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

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Paragraph-level year-over-year comparison of Entrada Therapeutics, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+651 added−828 removedSource: 10-K (2025-02-27) vs 10-K (2024-03-13)

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

651 paragraphs added · 828 removed · 507 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

163 edited+59 added−251 removed249 unchanged
Biggest changeRegulatory Requirements After Marketing Authorization Following approval, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of the medicinal product, and must adhere in strict compliance with the applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive- (EU) 2017/1572, Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice.
Biggest changeAny authorization that is not followed by the placement of the product on the EU market (for a centrally authorized product) or on the market of the authorizing EU Member State (for a nationally authorized product) within three years after authorization, or if the product is removed from the market for three consecutive years, ceases to be valid (the so-called sunset clause). 37 Table of Contents Regulatory Requirements After Marketing Authorization Following approval, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of the medicinal product, and must adhere in strict compliance with the applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive (EU) 2017/1572, Regulation (EC) No 726/2004.
Any therapeutic candidates that we successfully develop and commercialize may compete with existing therapies and new therapies that may become available in the future. Currently, patients with DMD are treated with corticosteroids to manage the inflammatory component of the disease. EMFLAZA (deflazacort) is an FDA-approved corticosteroid marketed by PTC Therapeutics, Inc. (PTC).
Any therapeutic candidates that we successfully develop and commercialize may compete with existing therapies and new therapies that may become available in the future. Currently, patients with DMD are treated with corticosteroids to manage the inflammatory component of the disease. EMFLAZA (deflazacort) is an FDA-approved corticosteroid marketed by PTC Therapeutics, Inc.
Both parties have the right to terminate under certain enumerated circumstances. At our option, we may terminate the OSIF License Agreement for any reason with ninety days’ (90) written notice, or if OSIF is in material breach, after providing thirty (30) days’ notice of termination.
Both parties have the right to terminate under certain enumerated circumstances. At our option, we may terminate the OSIF License Agreement for any reason with ninety (90) days’ written notice, or if OSIF is in material breach, after providing thirty (30) days’ notice of termination.
During this market exclusivity period, the EMA the European Commission or the Member States may only grant a marketing authorization to a “similar medicinal product” for the same therapeutic indication if: (i) a second applicant can establish that its product, although similar to the authorized product, is safer, more effective or otherwise clinically superior; (ii) the marketing authorization holder for the authorized product consents to a second orphan medicinal product application; or (iii) the marketing authorization holder for the authorized product cannot supply enough orphan medicinal product.
During this market exclusivity period, the EMA, the European Commission or the EU Member States may only grant a marketing authorization to a “similar medicinal product” for the same therapeutic indication if: (i) a second applicant can establish that its product, although similar to the authorized orphan product, is safer, more effective or otherwise clinically superior; (ii) the marketing authorization holder for the authorized orphan product consents to a second medicinal product application; or (iii) the marketing authorization holder for the authorized orphan product cannot supply enough orphan medicinal product.
The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality (IMM), and that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality (“IMM”), and that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
Under the Pediatric Research Equity Act of 2003, an NDA, BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
Under the Pediatric Research Equity Act of 2003 (“PREA”), an NDA, BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
Periods of Authorization and Renewals A marketing authorization has an initial validity for five years, in principle, and it may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA (for a centrally authorized product) or by the competent authority of the authorizing Member State (for a nationally authorized product).
Periods of Authorization and Renewals A marketing authorization has an initial validity for five years, in principle, and it may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA (for a centrally authorized product) or by the competent authority of the authorizing EU Member State (for a nationally authorized product).
The team is led by Dipal Doshi, our Chief Executive Officer, who brings over 20 years of leadership experience within life sciences companies; Nathan Dowden, our President and Chief Operating Officer, who has three decades of experience leading corporate strategy, portfolio management, business planning and operations; Natarajan Sethuraman, Ph.D., our Chief Scientific Officer, who is an expert in large molecule therapeutic development and delivery platforms with over 30 years of experience across pharmaceutical and biotechnology companies; Kory Wentworth, our Chief Financial Officer, who has over 20 years of public accounting and global biopharmaceutical experience, and our General Counsel, Jared Cohen Ph.D., J.D., who has 20 years of both external and in-house experience at a range of mature and early stage biopharmaceutical companies.
The team is led by Dipal Doshi, our Chief Executive Officer, who brings over 20 years of leadership experience within life sciences companies; Nathan Dowden, our President and Chief Operating Officer, who has three decades of experience leading corporate strategy, portfolio management, business planning and operations; Natarajan Sethuraman, Ph.D., our President of Research and Development, who is an expert in large molecule therapeutic development and delivery platforms with over 30 years of experience across pharmaceutical and biotechnology companies; Kory Wentworth, our Chief Financial Officer, who has over 20 years of public accounting and global biopharmaceutical experience, and our General Counsel, Jared Cohen Ph.D., J.D., who has 20 years of both external and in-house experience at a range of mature and early stage biopharmaceutical companies.
A REMS can include medication guides, communication plans for healthcare professionals and elements to assure safe use (ETASU). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patent registries.
A REMS can include medication guides, communication plans for healthcare professionals and elements to assure safe use (“ETASU”). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patent registries.
Strict deadlines have been established for the assessment of clinical trial applications. The role of the relevant ethics committees in the assessment procedure continues to be governed by the national law of the applicable Member State, however, overall related timelines are defined by the Clinical Trials Regulation.
Strict deadlines have been established for the assessment of clinical trial applications. The role of the relevant ethics committees in the assessment procedure continues to be governed by the national law of the applicable EU Member State, however, overall related timelines are defined by the Clinical Trials Regulation.
Orphan Drug Designation and Exclusivity Regulation (EC) No 141/2000 and Regulation (EC) No. 847/2000 provide that a product can be designated as an orphan drug by the European Commission if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of (1) a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the European Union when the application is made, or (2) a life-threatening, seriously debilitating or serious and chronic condition in the European Union and that without incentives it is unlikely that the marketing of the drug in the European Union would generate sufficient return to justify the necessary investment in its development.
Orphan Drug Designation and Exclusivity Regulation (EC) No 141/2000 and Regulation (EC) No. 847/2000 provide that a product can be designated as an orphan drug by the European Commission if its sponsor can establish: that the product is intended for the diagnosis, prevention or treatment of (1) a life-threatening or chronically debilitating condition affecting not more than five in ten thousand persons in the EU when the application is made, or (2) a life-threatening, seriously debilitating or serious and chronic condition in the EU and that without incentives it is unlikely that the marketing of the drug in the EU would generate sufficient return to justify the necessary investment in its development.
Any U.S. or foreign patents issued from national stage filings of our PCT patent applications and any U.S. patents issued from non-provisional applications we have filed or may file in connection with our provisional patent applications would be scheduled to expire on various dates from 2036 through 2044, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees.
Any U.S. or foreign patents issued from national stage filings of our PCT patent applications and any U.S. patents issued from non-provisional applications we have filed or may file in connection with our provisional patent applications would be scheduled to expire on various dates from 2036 through 2045, without taking into account any possible patent term adjustments or extensions and assuming payment of all appropriate maintenance, renewal, annuity and other governmental fees.
On September 26, 2018, we exercised our option pursuant to the terms of the OSIF Option Agreement, and on December 14, 2018, we entered into a license agreement (OSIF License Agreement) for an exclusive, worldwide, sublicensable license under these patents and patent rights, and a non-exclusive, worldwide, sublicensable license under certain related know-how, to develop, commercialize or otherwise exploit products based on these cell-penetrating technologies for the treatment, prevention and diagnosis of any and all diseases or conditions.
On September 26, 2018, we exercised our option pursuant to the terms of the OSIF Option Agreement, and on December 14, 2018, we entered into a license agreement (“OSIF License Agreement”) for an exclusive, worldwide, sublicensable license under these patents and patent rights, and a non-exclusive, worldwide, sublicensable license under certain related know-how, to develop, commercialize or otherwise exploit products based on these cell-penetrating technologies for the treatment, prevention and diagnosis of any and all diseases or conditions.
The main characteristics of the Clinical Trials Regulation include: a streamlined application procedure via a single-entry point through the Clinical Trials Information System (CTIS); a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors; and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts (Part I contains scientific and medicinal product documentation and Part II contains the national and patient-level documentation).
The main characteristics of the Clinical Trials Regulation include: a streamlined application procedure via a single-entry point through the Clinical Trials Information System (“CTIS”); a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors; and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts (Part I contains scientific and medicinal product documentation and Part II contains the national and patient-level documentation).
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product; 52 Table of Contents • complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical trials; • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product recall, seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties.
Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product; • complete withdrawal of the product from the market or product recalls; • fines, warning letters or holds on post-approval clinical trials; 33 Table of Contents • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals; • product recall, seizure or detention, or refusal to permit the import or export of products; or • injunctions or the imposition of civil or criminal penalties.
A single UK-wide marketing authorization will be granted by the MHRA for all medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK.
A single UK-wide marketing authorization will be granted by the MHRA for all novel medicinal products to be sold in the UK, enabling products to be sold in a single pack and under a single authorization throughout the UK.
The FDCA requires that a sponsor who is planning to submit a marketing application for a product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan (PSP), within sixty days of an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA.
The FDCA requires that a sponsor who is planning to submit a marketing application for a product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan (“PSP”), within sixty days of an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA.
There is no obligation for a sponsor to make its drug products available for expanded access; however, as required by the 21 st Century Cures Act (Cures Act), a sponsor must make its policy regarding evaluating and responding to expanded access requests publicly available. In addition, on May 30, 2018, the Right to Try Act was signed into law.
There is no obligation for a sponsor to make its drug products available for expanded access; however, as required by the 21 st Century Cures Act (“Cures Act”), a sponsor must make its policy regarding evaluating and responding to expanded access requests publicly available. In addition, on May 30, 2018, the Right to Try Act was signed into law.
Our future commercial success depends in part on our ability to: • obtain, maintain, enforce and defend patent and other intellectual property rights for our important technology, inventions and know-how; preserve the confidentiality of our trade secrets and other confidential information; • obtain and maintain licenses to use and exploit intellectual property owned or controlled by third parties; • operate without infringing, misappropriating or otherwise violating any valid and enforceable patents and other intellectual property rights of third parties; and • defend against challenges and assertions by third parties challenging the validity or enforceability of our intellectual property rights, or our rights in our intellectual property, or asserting that the operation of our business infringes, misappropriates or otherwise violates their intellectual property rights.
Our future commercial success depends in part on our ability to: • obtain, maintain, enforce and defend patent and other intellectual property rights for our important technology, inventions and know-how; preserve the confidentiality of our trade secrets and other confidential information; • obtain and maintain licenses to use and exploit intellectual property owned or controlled by third parties; • operate without infringing, misappropriating or otherwise violating any valid and enforceable patents and other intellectual property rights of third parties; and 21 Table of Contents • defend against challenges and assertions by third parties challenging the validity or enforceability of our intellectual property rights, or our rights in our intellectual property, or asserting that the operation of our business infringes, misappropriates or otherwise violates their intellectual property rights.
These regulations govern record keeping, manufacturing processes and controls, personnel, quality control and quality assurance. Our CMOs are required to comply with these regulations and are assessed through regular monitoring and formal audits. Our third-party manufacturers are required to manufacture any therapeutic candidates we develop under current Good Manufacturing Practice (cGMP), requirements and other applicable laws and regulations.
These regulations govern record keeping, manufacturing processes and controls, personnel, quality control and quality assurance. Our CMOs are required to comply with these regulations and are assessed through regular monitoring and formal audits. Our third-party manufacturers are required to manufacture any therapeutic candidates we develop under current Good Manufacturing Practice (“CGMP”), requirements and other applicable laws and regulations.
There 47 Table of Contents is no obligation for a manufacturer to make its investigational products available to eligible patients as a result of the Right to Try Act. Compliance with cGMP Requirements Before approving an NDA or BLA, the FDA will typically inspect the facility or facilities where the product is manufactured.
There is no obligation for a manufacturer to make its investigational products available to eligible patients as a result of the Right to Try Act. Compliance with CGMP Requirements 28 Table of Contents Before approving an NDA or BLA, the FDA will typically inspect the facility or facilities where the product is manufactured.
Of these full-time employees, 126 employees are engaged in research and development. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.
Of these full-time employees, 144 employees are engaged in research and development. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees.
(Dyne), which is pursuing antibody fragment-oligonucleotide conjugates for exons 44, 45, 51 (clinical candidate DYNE-251), and 53, PepGen, Inc. with PGN-EDO51, a clinical candidate designed to address exon 51, along with discovery programs targeting exons 53, 44, and 45, and BioMarin Pharmaceutical Inc., which is in preclinical development with BMN 351, an antisense oligonucleotide therapy for exon 51.
(“Dyne”), which is pursuing antibody fragment-oligonucleotide conjugates for exons 44, 45, 51 (clinical candidate DYNE-251), and 53, PepGen, Inc. with PGN-EDO51, a clinical candidate designed to address exon 51, along with discovery programs targeting exons 53, 44, and 45, and BioMarin Pharmaceutical Inc., which is in clinical development with BMN 351, an antisense oligonucleotide therapy for exon 51.
During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (ANDA), or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval.
During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (“ANDA”), or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval.
Therapeutic candidates currently in development to treat DM1 include: tideglusib, a GSK3-ß inhibitor in late-stage clinical development by AMO Pharma Ltd. for the congenital phenotype of DM1; AOC-1001, an antibody linked siRNA in clinical development by Avidity; DYNE-101, an antibody fragment conjugated to an ASO targeting DM1 protein kinase knockdown in clinical development by Dyne; EDODM1, a linear peptide conjugated to a PMO targeting CUG repeats in clinical development by PepGen, Inc.; a small molecule targeting GTG repeats in preclinical development by Design Therapeutics, Inc.; an RNA-targeting gene therapy in preclinical development by Locana, Inc.; and small molecules interacting with RNA in preclinical development by Expansion Therapeutics, Inc.
Therapeutic candidates currently in development to treat DM1 include: tideglusib, a GSK3-ß inhibitor in late-stage clinical development by AMO Pharma Ltd. for the congenital phenotype of DM1; AOC-1001, an antibody linked siRNA in clinical development by Avidity; DYNE-101, an antibody fragment conjugated to an ASO targeting DM1 protein kinase knockdown in clinical development by Dyne; EDODM1, a linear peptide conjugated to a PMO targeting CUG repeats in clinical development by PepGen, Inc.; a small molecule targeting GTG repeats in preclinical development by Design Therapeutics, Inc.; and small molecules interacting with RNA in preclinical development by Expansion Therapeutics, Inc.
Nonetheless, we take steps to protect and preserve our trade secrets and other confidential and proprietary information and prevent the unauthorized disclosure of the foregoing, including by entering into non-disclosure and invention assignment agreements with parties who have access to our trade secrets or other confidential and proprietary information, such as employees, consultants, outside scientific collaborators, contract research and manufacturing organizations, sponsored researchers and other advisors, at the commencement of their employment, consulting or other relationships with us.
Nonetheless, we take steps to protect and preserve our trade secrets and other confidential and proprietary information and prevent the unauthorized disclosure of the foregoing, including by entering into non-disclosure and invention assignment agreements with parties who have access to our trade secrets or other confidential and proprietary information, such as employees, consultants, outside scientific collaborators, contract research and manufacturing organizations, sponsored researchers and other advisors, at the commencement of their 23 Table of Contents employment, consulting or other relationships with us.
The heightening compliance environment and the need to build and maintain robust and secure systems to comply with different privacy compliance and/or reporting requirements in multiple jurisdictions could 53 Table of Contents increase the possibility that we may fail to comply fully with one or more of these requirements.
The heightening compliance environment and the need to build and maintain robust and 34 Table of Contents secure systems to comply with different privacy compliance and/or reporting requirements in multiple jurisdictions could increase the possibility that we may fail to comply fully with one or more of these requirements.
Clinical Trial Approval In April 2014, the European Union adopted the new Clinical Trials Regulation (EU) No 536/2014, which came into effect on January 31, 2022 and repealed the Clinical Trials Directive 2001/20/EC. The Clinical Trial Regulation overhauled the previous system of approvals for clinical trials in the European Union.
Clinical Trial Approval In April 2014, the European Union (“EU”) adopted the Clinical Trials Regulation (EU) No 536/2014, which came into effect on January 31, 2022 and repealed the Clinical Trials Directive 2001/20/EC. The Clinical Trials Regulation overhauled the previous system of approvals for clinical trials in the EU.
However, the term of U.S. patents may be extended or adjusted for delays incurred due to compliance with FDA requirements or by delays encountered during prosecution that are caused by the United States Patent and Trademark Office (USPTO).
However, the term of U.S. patents may be extended or adjusted for delays incurred due to compliance with FDA requirements or by delays encountered during prosecution that are caused by the United States Patent and Trademark Office (“USPTO”).
An applicant seeking approval to market and distribute a new drug or biologic in the United States generally must satisfactorily complete each of the following steps: preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory Practices (GLP) regulations, as applicable; completion of the manufacture, under current Good Manufacturing Practices (cGMP) conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing; submission to the FDA of an IND, for human clinical testing, which must become effective before human clinical trials may begin; approval by an independent institutional review board (IRB), representing each clinical trial site before each clinical trial site may be initiated; performance of adequate and well-controlled human clinical trials, in accordance with current Good Clinical Practices (GCP), and any additional nonclinical studies required to establish the safety, efficacy, potency and purity of the product candidate for each proposed indication; preparation and submission to the FDA of a new drug application (NDA), or a Biologics License Application (BLA), for a biologic product, requesting marketing for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product in clinical development and proposed labelling; review of the product by an FDA advisory committee, where appropriate or if applicable; satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; satisfactory completion of any FDA audits of the preclinical studies and clinical trial sites to assure compliance with GLP, as applicable, and GCP, and the integrity of clinical data in support of the NDA or BLA; payment of user fees under the Prescription Drug User Fee Act (PDUFA); securing FDA approval of the NDA or BLA; and compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (REMS), and any post-approval studies or other post-marketing commitments required by the FDA.
An applicant seeking approval to market and distribute a new drug or biologic in the United States generally must satisfactorily complete each of the following steps: preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s Good Laboratory Practices (“GLP”) regulations, as applicable; completion of the manufacture, under CGMP conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing; submission to the FDA of an IND, for human clinical testing, which must become effective before human clinical trials may begin; approval by an independent institutional review board (“IRB”), representing each clinical trial site before each clinical trial site may be initiated; performance of adequate and well-controlled human clinical trials, in accordance with current Good Clinical Practices (“GCP”), and any additional nonclinical studies required to establish the safety, efficacy, potency and purity of the product candidate for each proposed indication; preparation and submission to the FDA of a new drug application (“NDA”), or a Biologics License Application (“BLA”), for a biologic product, requesting marketing for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product in clinical development and proposed labelling; review of the product by an FDA advisory committee, where appropriate or if applicable; satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with CGMP and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; satisfactory completion of any FDA audits of the preclinical studies and clinical trial sites to assure compliance with GLP, as applicable, and GCP, and the integrity of clinical data in support of the NDA or BLA; payment of user fees under the Prescription Drug User Fee Act (“PDUFA”); securing FDA approval of the NDA or BLA; and compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”), and any post-approval studies or other post-marketing commitments required by the FDA.
Even if any therapeutic candidates we may develop are approved, sales of such therapeutic candidates will depend, in part, on the extent to which third-party payers, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed 58 Table of Contents care organizations, provide coverage and establish adequate reimbursement levels for, such therapeutic candidates.
Even if any therapeutic candidates we may develop are approved, sales of such therapeutic candidates will depend, in part, on the extent to which third-party payers, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations, provide coverage and establish adequate reimbursement levels for, such therapeutic candidates.
The Paediatric Committee of the EMA (PDCO), may grant deferrals for some medicines, allowing a company to delay development of the medicine for children until there is enough information to demonstrate its effectiveness and safety in adults.
The Paediatric Committee of the EMA (“PDCO”), may grant deferrals for some medicines, allowing a company to delay development of the medicine for children until there is enough information to demonstrate its effectiveness and safety in adults.
We may also be obligated to 43 Table of Contents pay aggregate milestone payments of up to $7,950,000, tiered royalties on sales at low single digit percentages, a license maintenance fee of $25,000 per year beginning in 2021 and continuing until the first year in which commercial sales of a licensed product pursuant to the agreement commence.
We may also be obligated to pay aggregate milestone payments of up to $7,950,000, tiered royalties on sales at low single digit percentages, a license maintenance fee of $25,000 per year beginning in 2021 and continuing until the first year in which commercial sales of a licensed product pursuant to the agreement commence.
In particular, the FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee. 48 Table of Contents Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.
In particular, the FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.
Under the terms of the Vertex Agreement, we received $250 million from the Vertex Agreement comprised of an upfront payment of $223.7 million and an equity investment of $26.3 million in our common stock at $16.26 per share.
Under the terms of the Vertex Agreement, we initially received $250.0 million from the Vertex Agreement comprised of an upfront payment of $223.7 million and an equity investment of $26.3 million in our common stock at $16.26 per share.
Based on our novel therapeutic approach and the broad potential applicability of our EEV Platform to deliver a variety of therapeutic modalities into cells, we are developing therapeutic candidates that would be regulated under the 44 Table of Contents FDCA, and/or the PHSA, and their implementing regulations, as drugs or biologics, depending on the modality of each product candidate.
Based on our novel therapeutic approach and the broad potential applicability of our EEV Platform to deliver a variety of therapeutic modalities into cells, we are developing therapeutic candidates that would be regulated under the FDCA, and/or the PHSA, and their implementing regulations, as drugs or biologics, depending on the modality of each product candidate.
Changes in the patent laws and rules, whether by legislation, judicial decisions or regulatory interpretation, in the United States and other jurisdictions may have uncertain affects that could improve or diminish our ability to protect our inventions and obtain, maintain, defend and enforce our patent rights, and could therefore affect the value of our business in uncertain ways.
Changes in the patent laws and rules, whether by legislation, judicial decisions or regulatory interpretation, in the United States and other jurisdictions may have uncertain affects that could improve or diminish our ability to protect our inventions and 22 Table of Contents obtain, maintain, defend and enforce our patent rights, and could therefore affect the value of our business in uncertain ways.
For example, in the United States, a patent claiming a new chemical entity or biologic product, its method of use or its method of manufacture may be eligible for a limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act) for up to five years beyond the normal expiration date of the patent.
For example, in the United States, a patent claiming a new chemical entity or biologic product, its method of use or its method of manufacture may be eligible for a limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”) for up to five years beyond the normal expiration date of the patent.
In addition, the manufacturing of authorized products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the EMA’s GMP requirements and comparable requirements of other regulatory bodies in the European Union, which mandate the methods, facilities and controls used in manufacturing, processing and packing of medical products to assure their safety and identity.
In addition, the manufacturing of authorized products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the EMA’s GMP requirements and comparable requirements of other regulatory bodies in the EU, which mandate the methods, facilities and controls used in manufacturing, processing and packing of medical products to assure their safety and identity.
We have a shared passion for involving 13 Table of Contents patients and caregivers so that we may better understand the patient experience in order to develop therapies that more effectively reflect their perspectives and priorities. Our management team brings a depth of experience and knowledge base in research, drug discovery and development and commercialization.
We have a shared passion for involving patients and caregivers so that we may better understand the patient experience in order to develop therapies that more effectively reflect their perspectives and priorities. Our management team brings a depth of experience and knowledge base in research, drug discovery and development and commercialization.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. If the FDA approves a new product, it may limit the approved indication(s) for use of the product. It may also require that contraindications, warnings, or precautions be included in the product labeling.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. 29 Table of Contents If the FDA approves a new product, it may limit the approved indication(s) for use of the product. It may also require that contraindications, warnings, or precautions be included in the product labeling.
The PRIority MEdicines (PRIME), scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure.
The PRIority MEdicines (“PRIME”), scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure.
Parties conducting certain clinical trials must, as in the United States, post clinical trial information in the European Union through the CTIS. PRIME Designation in the European Union In March 2016, the EMA launched an initiative to facilitate development of therapeutic candidates in indications, often rare, for which few or no therapies currently exist.
Parties conducting certain clinical trials must, as in the United States, post clinical trial information in the EU through the CTIS. PRIME Designation in the EU In March 2016, the EMA launched an initiative to facilitate development of therapeutic candidates in indications, often rare, for which few or no therapies currently exist.
Many benefits accrue to sponsors of therapeutic candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated marketing authorisation application (MAA) assessment once a dossier has been submitted.
Many benefits accrue to sponsors of therapeutic candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated MAA assessment once a dossier has been submitted.
We believe that this increases value to our stockholders and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives. 60 Table of Contents We have, since our inception, worked to create a high-performing, inclusive and diverse workforce, which is a core element of our operating culture.
We believe that this increases value to our stockholders and the success of our company by motivating such individuals to perform to the best of their abilities and achieve our objectives. We have, since our inception, worked to create a high-performing, inclusive and diverse workforce, which is a core element of our operating culture.
It also requires the submission to the relevant competent authorities of a marketing authorization application (MAA) and granting of a marketing authorization by these authorities before the product can be marketed and sold in the European Union.
It also requires the submission to the relevant competent authorities of a marketing authorization application (“MAA”) and granting of a marketing authorization by these authorities before the product can be marketed and sold in the European Union.
Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, inclusion and exclusion criteria, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.
Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, 26 Table of Contents inclusion and exclusion criteria, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.
Our ability to stop third parties from making, using, selling, offering to sell, importing or otherwise 41 Table of Contents commercializing any of our technology, inventions and improvements, either directly or indirectly, will depend in part on our success in obtaining, maintaining, defending and enforcing patent claims that cover our technology, inventions and improvements.
Our ability to stop third parties from making, using, selling, offering to sell, importing or otherwise commercializing any of our technology, inventions and improvements, either directly or indirectly, will depend in part on our success in obtaining, maintaining, defending and enforcing patent claims that cover our technology, inventions and improvements.
Where a product has already been authorized for marketing in a Member State of the EEA, this national MA can be recognized in other Member States through the mutual recognition procedure.
Where a product has already been authorized for marketing in a Member State of the EEA, this national marketing authorization can be recognized in other Member States through the mutual recognition procedure.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment. The aforementioned EU rules are generally applicable in the EEA.
Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment. All of the aforementioned EU rules are generally applicable in the EEA.
For either of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the European Union or, if such method exists, the drug product would be of significant benefit to those affected by that condition.
For either of these conditions, the applicant must demonstrate that there exists no satisfactory method of diagnosis, prevention or treatment of the condition in question that has been authorized in the EU or, if such method exists, the drug product would be of significant benefit to those affected by that condition.
Our preclinical studies have resulted in in vitro and in vivo data where we have observed splicing correction across multiple transcripts, durable DMPK mRNA knockdown, reduction of foci, rapid phenotypic correction, and tolerability in murine models of DM1 which exhibit expanded CTG and CUG repeats.
Our preclinical studies have resulted in in vitro and in vivo data where we have observed splicing correction a cross multiple transcripts, durable DMPK mRNA knockdown, reduction of foci, rapid phenotypic correction, and tolerability in murine models of DM1 which exhibit expanded CTG and CUG repeats.
Under the Food and Drug Omnibus Reform Act of 2022 (FDORA) the FDA is now permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.
Under the Food and Drug Omnibus Reform Act of 2022 (“FDORA”) the FDA is permitted to require, as appropriate, that such trials be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.
The BPCIA established a regulatory scheme authorizing the FDA to approve biosimilars and interchangeable biosimilars. A biosimilar is a biological product that is highly similar to an existing FDA-licensed “reference product.” The FDA has issued multiple guidance documents outlining an approach to review and approval of biosimilars.
The BPCIA established a regulatory scheme authorizing the FDA to 32 Table of Contents approve biosimilars and interchangeable biosimilars. A biosimilar is a biological product that is highly similar to an existing FDA-licensed “reference product.” The FDA has issued multiple guidance documents outlining an approach to review and approval of biosimilars.
These sanctions may include, but are not limited to, the FDA’s refusal to allow an applicant to proceed with clinical testing, refusal to approve pending applications, license suspension, or revocation, withdrawal of an approval, warning letters, adverse publicity, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines and civil or criminal investigations and penalties brought by the FDA or the Department of Justice (DOJ), and other governmental entities, including state agencies.
These sanctions may include, but are not limited to, the FDA’s refusal to allow an applicant to proceed with 25 Table of Contents clinical testing, refusal to approve pending applications, license suspension, or revocation, withdrawal of an approval, warning letters, adverse publicity, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines and civil or criminal investigations and penalties brought by the FDA or the Department of Justice (“DOJ”), and other governmental entities, including state agencies.
Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the European Union, an applicant must demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan (PIP), covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, class waiver or a deferral for one or more of the measures included in the PIP.
Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the EU, an applicant must demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan (“PIP”), covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, class waiver or a deferral for one or more of the measures included in the PIP.
Available Information We maintain an internet website at www.entradatx.com and make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act of 1934, or the Exchange Act.
Available Information We maintain an internet website at www.entradatx.com and make available free of charge through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, including exhibits and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act of 1934, as amended (the “Exchange Act”.
The provision of benefits or advantages to induce or reward improper performance generally is usually governed by the national anti-bribery laws of European Union Member States, and the Bribery Act 2010 in the UK. Infringement of these laws could result in substantial fines and imprisonment.
The provision of benefits or advantages to induce or reward improper performance generally is usually governed by the national anti-bribery laws of EU Member States, and the Bribery Act 2010 in the UK. Infringement of these laws could result in substantial fines and imprisonment.
Licensure and Regulation of Drugs and Biologics in the United States In the United States, where we are initially focusing our product development, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (FDCA), and biologics under the FDCA and the Public Health Service Act (PHSA), and their implementing regulations.
Licensure and Regulation of Drugs and Biologics in the United States In the United States, where we are initially focusing our product development, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”), and biologics under the FDCA and the Public Health Service Act (“PHSA”), and their implementing regulations.
This provision has been transposed into the Human Medicines Regulations 2012 and so remains applicable in the UK despite its departure from the European Union. Payments made to physicians in certain European Union Member States must be publicly disclosed.
This provision has been transposed into the Human Medicines Regulations 2012 and so remains applicable in the UK despite its departure from the EU. Payments made to physicians in certain EU Member States must be publicly disclosed.
Third-party reimbursement and coverage may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. In addition, any companion diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical or biological products.
Third-party reimbursement and coverage may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. In addition, any companion diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion 39 Table of Contents pharmaceutical or biological products.
We also rely on trade secrets and 40 Table of Contents confidentiality agreements to protect our confidential information and know-how and other aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.
We also rely on trade secrets and confidentiality agreements to protect our confidential information and know-how and other aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.
For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit.
For the purposes of accelerated approval, 30 Table of Contents a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit.
Much like the Anti-Kickback Statue prohibition in the United States, the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the European Union.
Much like the Anti-Kickback Statue prohibition in the United States, the provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is also prohibited in the EU.
We and Vertex entered into a Strategic Collaboration and License Agreement, which was amended in October 2023, (the Vertex Agreement) pursuant to which the Company granted Vertex an exclusive worldwide license to research, develop, manufacture, and commercialize VX-670 as well as any additional EEV-based therapeutic candidates that may be identified by the Company for the potential treatment of DM1 in the course of the parties’ four-year global research collaboration.
We entered into a Strategic Collaboration and License Agreement, which was amended in October 2023 (the “Vertex Agreement”), with Vertex pursuant to which we granted Vertex an exclusive worldwide license to research, develop, manufacture and commercialize VX-670, as well as any additional EEV-based therapeutic candidates that may be identified by the Company for the potential treatment of DM1 in the course of the parties’ global research collaboration.
Among these patent families, we have 238 pending applications (including PCT, provisional and non-provisional applications) in the U.S. and Europe,as well as other countries of strategic value; and 73 granted patents in the U.S., Europe, China, India, Japan, and Hong Kong (including a total of 45 member state validations of three European patents).
Among these patent families, we have 281 pending applications (including PCT, provisional and non-provisional applications) in the U.S. and Europe, as well as other countries of strategic value; and 83 granted patents in the U.S., Europe, China, India, Japan, and Hong Kong (including a total of 45 member state validations of three European patents).
Department of Health and Human Services (HHS), has issued regulations to protect the privacy and security of protected health information (PHI), used or disclosed by covered entities including certain healthcare providers, health plans and healthcare clearinghouses. HIPAA also regulates standardization of data content, codes and formats used in healthcare transactions and standardization of identifiers for health plans and providers.
Department of Health and Human Services (“HHS”), has issued regulations to protect the privacy and security of protected health information (“PHI”), used or disclosed by covered entities including certain healthcare providers, health plans and healthcare clearinghouses. HIPAA also regulates standardization of data content, codes and formats used in healthcare transactions and standardization of identifiers for health plans and providers.
The centralized procedure is optional for products containing a new active substance not yet authorized in the European Union, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the European Union.
The centralized procedure is optional for products containing a new active substance not yet authorized in the EU, or for products that constitute a significant therapeutic, scientific or technical innovation or which are in the interest of public health in the EU.
During the additional two-year period of market exclusivity, a generic or biosimilar MAA can be submitted and authorized, and the innovator’s data may be referenced, but no generic or biosimilar medicinal product can be marketed until the expiration of the market exclusivity.
During the additional two-year period of market exclusivity, a generic or biosimilar MAA can be submitted and authorized, and the innovator’s data may be referenced, but no generic or biosimilar medicinal product can be marketed until the 36 Table of Contents expiration of the market exclusivity.
Clinical testing also must satisfy extensive GCP rules and the requirements for informed consent. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board (DSMB), or data monitoring committee (DMC).
Clinical testing also must satisfy extensive GCP rules and the requirements for informed consent. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board (“DSMB”), or data monitoring committee (“DMC”).
In some cases, the FDA may approve an NDA or BLA for a product but require the sponsor to conduct additional clinical trials to further assess the product’s safety and effectiveness after approval. Such post-approval trials are typically referred to as Phase 4 clinical trials.
In some cases, the FDA may approve an NDA or BLA for a product but require the sponsor to conduct additional clinical trials to further assess the product’s safety and effectiveness after approval. Such post-approval trials are typically 27 Table of Contents referred to as Phase 4 clinical trials.
We make these reports available through our website as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the SEC. You can review our electronically filed reports and other information that we file with the SEC on the SEC’s web site at http://www.sec.gov.
We make these reports available through our website as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the SEC. You can review our electronically filed reports 41 Table of Contents and other information that we file with the SEC on the SEC’s web site at http://www.sec.gov.
(Sarepta), and VILTEPSO (vitolarsen), a PMO approved for the treatment of patients with DMD who are amenable to exon 53 skipping, which is marketed by Nippon Shinyaku Co. Ltd.
(“Sarepta”), and VILTEPSO (vitolarsen), a PMO approved for the treatment of patients with DMD who are amenable to exon 53 skipping, which is marketed by Nippon Shinyaku Co. Ltd (“Nippon”).
An IRB must operate in compliance with FDA regulations. The FDA, IRB, or the clinical trial sponsor may suspend or discontinue a clinical trial at any time for various reasons, including a finding that the clinical trial is not being conducted in accordance with GCP requirements or that the participants are being exposed to an unacceptable health risk.
The FDA, IRB, or the clinical trial sponsor may suspend or discontinue a clinical trial at any time for various reasons, including a finding that the clinical trial is not being conducted in accordance with GCP requirements or that the participants are being exposed to an unacceptable health risk.
For more information, please see the section entitled “Risk Factors—Risks Related to Our Intellectual Property.” License Agreement with The Ohio State University On May 12, 2017, we entered into an option agreement with Ohio State Innovation Foundation (OSIF), an affiliate of The Ohio State University (OSU) responsible for the commercialization of technology developed at or created by or for OSU, in which the Company obtained an option (OSIF Option Agreement) to license all patents and patent applications involving technologies using cell-penetrating peptides arising out of or related to specified invention disclosures or through a sponsored research agreement executed with OSU on the same date (OSU SRA).
For more information, please see the section entitled “Risk Factors—Risks Related to Our Intellectual Property.” License Agreement with The Ohio State University On May 12, 2017, we entered into an option agreement with Ohio State Innovation Foundation (“OSIF”), an affiliate of The Ohio State University (“OSU”) responsible for the commercialization of technology developed at or created by or for OSU, in which the Company obtained an option (“OSIF Option Agreement”) to license all patents and patent applications involving technologies using cell-penetrating peptides arising out of or related to specified invention disclosures or through a sponsored research agreement executed with OSU on the same date (“OSU SRA”).
Trade Secrets 42 Table of Contents In addition to patent protection, we also rely on trade secrets, know-how, unpatented technology and other proprietary information to strengthen our competitive position. We currently, and may continue in the future continue to, rely on third parties to assist us in developing and manufacturing our products.
Trade Secrets In addition to patent protection, we also rely on trade secrets, know-how, unpatented technology and other proprietary information to strengthen our competitive position. We currently, and may continue in the future continue to, rely on third parties to assist us in developing and manufacturing our products.
If the product has not received a national MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the decentralized procedure.
If the product has not received a national marketing authorization in any Member State at the time of application, it can be approved simultaneously in various Member States through the decentralized procedure.
Data exclusivity if granted, prevents applicants for authorization of generics or biosimilars of these innovative products from referencing the innovator’s preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic (abbreviated) or biosimilar authorization for a period of eight years from the date on which the reference product was first authorized in the European Union.
Data exclusivity, prevents applicants for authorization of generics or biosimilars of these innovative products from referencing the innovator’s preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic (abbreviated) or biosimilar authorization for a period of eight years from the date on which the reference product was first authorized in the EU.
A well-controlled, statistically robust Phase 3 trial may be designed to 46 Table of Contents deliver the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to appropriately label a therapeutic.
A well-controlled, statistically robust Phase 3 trial may be designed to deliver the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to appropriately label a therapeutic.
These include compliance with the European Union’s stringent pharmacovigilance or safety reporting rules, pursuant to which post-authorization studies and additional monitoring obligations can be imposed.
These include compliance with the EU’s stringent pharmacovigilance or safety reporting rules, pursuant to which post-authorization studies and additional monitoring obligations can be imposed.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe are an “emerging growth company” and a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors. We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act).
Biggest changeAny of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline. We are an “emerging growth company”, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our common stock less attractive to investors.
These could include, but may not be limited to, the following: • Delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets; • Potential or actual breach of statutory, regulatory or contractual obligations, including obligations that require the Company to maintain letters of credit or other credit support arrangements; • Termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements.
These could include, but may not be limited to, the following: • Delayed access to deposits or other financial assets or the uninsured loss of deposits or other financial assets; • Potential or actual breach of statutory, regulatory or contractual obligations, including obligations that require the Company to maintain letters of credit or other credit support arrangements; and • Termination of cash management arrangements and/or delays in accessing or actual loss of funds subject to cash management arrangements.
Among other things, such delays may be caused by slow enrollment in clinical trials, patients dropping out of trials, length of time to achieve trial endpoints, additional time requirements for data analysis, NDA or BLA preparation, discussions with the FDA, a failure to align with the FDA regarding clinical trial endpoints and related approval criteria, an FDA request for additional nonclinical or clinical data, or unexpected safety or manufacturing issues; • manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that make our EEV-therapeutics uneconomical; and • proprietary rights of others and their competing products and technologies that may prevent our EEV-therapeutics from being commercialized.
Among other things, such delays may be caused by slow enrollment in clinical trials, patients dropping out of trials, length of time to achieve trial endpoints, additional time requirements for data analysis, NDA or BLA preparation, discussions with the FDA, a failure to align with the FDA regarding clinical trial endpoints and related approval criteria, an FDA request for additional nonclinical or clinical data, or unexpected safety or manufacturing issues; • manufacturing costs, formulation issues, pricing or reimbursement issues, or other factors that make our therapeutics uneconomical; and • proprietary rights of others and their competing products and technologies that may prevent our therapeutics from being commercialized.
Intracellular therapeutics that appear promising in the early phases of development may fail to reach the market for several reasons, including: • nonclinical or preclinical testing or study results may show our EEV-therapeutics to be less effective than desired or to have harmful or problematic side effects or toxicities; • clinical trial results may show our oligonucleotides to be less effective than expected (e.g., a clinical trial could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities; • failure to receive the necessary regulatory approvals or a delay in receiving such approvals.
Intracellular therapeutics that appear promising in the early phases of development may fail to reach the market for several reasons, including: • nonclinical or preclinical testing or study results may show our therapeutics to be less effective than desired or to have harmful or problematic side effects or toxicities; • clinical trial results may show our oligonucleotides to be less effective than expected (e.g., a clinical trial could fail to meet its primary endpoint(s)) or to have unacceptable side effects or toxicities; • failure to receive the necessary regulatory approvals or a delay in receiving such approvals.
For example: • others may be able to make products that are similar to our therapeutic candidate or utilize similar technology but that are not covered by the claims of the patents that we license or may own; • we might not have been the first to make the inventions covered by our current or future patent applications; • we might not have been the first to file patent applications covering our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our current or future patent applications will not lead to issued patents; • any patent issuing from our current or future patent applications may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties; • our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we have engaged in scientific collaborations in the past and will continue to do so in the future and our collaborators may develop adjacent or competing products that are outside the scope of our patents; 108 Table of Contents • we may not develop additional proprietary technologies that are patentable; • the patents of others may harm our business; and • we may choose not to file for patent protection in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property.
For example: • others may be able to make products that are similar to our therapeutic candidate or utilize similar technology but that are not covered by the claims of the patents that we license or may own; • we might not have been the first to make the inventions covered by our current or future patent applications; • we might not have been the first to file patent applications covering our inventions; • others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; • it is possible that our current or future patent applications will not lead to issued patents; • any patent issuing from our current or future patent applications may be held invalid or unenforceable, including as a result of legal challenges by our competitors or other third parties; 89 Table of Contents • our competitors or other third parties might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; • we have engaged in scientific collaborations in the past and will continue to do so in the future and our collaborators may develop adjacent or competing products that are outside the scope of our patents; • we may not develop additional proprietary technologies that are patentable; • the patents of others may harm our business; and • we may choose not to file for patent protection in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent application covering such intellectual property.
In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by our vendors or consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we or our partners may not be able to obtain marketing approval of ENTR-601-44, ENTR-601-45, ENTR-601-50, VX-670 or any future therapeutic candidates or otherwise advance our business.
In addition, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by our vendors or consultants is compromised for any reason, our clinical trials may be extended, delayed or terminated, and we or our partners may not be able to obtain marketing approval of ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, VX-670 or any future therapeutic candidates or otherwise advance our business.
The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a therapeutic candidate for many reasons, including: • such authorities may disagree with the design or implementation of our or our current or future collaborators’ clinical trials; • negative or ambiguous results from our clinical trials or results may not meet the level of statistical significance required by the FDA or comparable foreign regulatory agencies for approval; • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our therapeutic candidates; • such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the United States; • we or any of our current or future collaborators may be unable to demonstrate that a therapeutic candidate is safe and effective, and that therapeutic candidate’s clinical and other benefits outweigh its safety risks; • such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • such authorities may not agree that the data collected from clinical trials of our therapeutic candidates are acceptable or sufficient to support the submission of an NDA or BLA or other submission or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials; • such authorities may disagree regarding the formulation, labeling and/or the specifications of our therapeutic candidates; • approval may be granted only for indications that are significantly more limited than what we apply for and/or with other significant restrictions on distribution and use; • such authorities may find deficiencies in the manufacturing processes, approval policies or facilities of our third-party manufacturers with which we or any of our current or future collaborators contract for clinical and commercial supplies; • regulations of such authorities may significantly change in a manner rendering our or any of our potential future collaborators’ clinical data insufficient for approval; or • such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.
The FDA or comparable foreign regulatory authorities can delay, limit or deny approval of a therapeutic candidate for many reasons, including: • such authorities may disagree with the design or implementation of our or our current or future collaborators’ clinical trials; • negative or ambiguous results from our clinical trials or results may not meet the level of statistical significance required by the FDA or comparable foreign regulatory agencies for approval; • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our therapeutic candidates; • such authorities may not accept clinical data from trials which are conducted at clinical facilities or in countries where the standard of care is potentially different from that of the United States; 53 Table of Contents • we or any of our current or future collaborators may be unable to demonstrate that a therapeutic candidate is safe and effective, and that therapeutic candidate’s clinical and other benefits outweigh its safety risks; • such authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • such authorities may not agree that the data collected from clinical trials of our therapeutic candidates are acceptable or sufficient to support the submission of an NDA or BLA or other submission or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials; • such authorities may disagree regarding the formulation, labeling and/or the specifications of our therapeutic candidates; • approval may be granted only for indications that are significantly more limited than what we apply for and/or with other significant restrictions on distribution and use; • such authorities may find deficiencies in the manufacturing processes, approval policies or facilities of our third-party manufacturers with which we or any of our current or future collaborators contract for clinical and commercial supplies; • regulations of such authorities may significantly change in a manner rendering our or any of our potential future collaborators’ clinical data insufficient for approval; or • such authorities may not accept a submission due to, among other reasons, the content or formatting of the submission.
Because ENTR-601-44 is our first EEV therapeutic candidate, if ENTR-601-44 encounters safety, efficacy, supply or manufacturing problems, developmental delays, regulatory or commercialization issues or other problems, the value of our EEV Platform, including our other therapeutic candidates such as ENTR-601-45, ENTR-601-50, and our partnered candidate VX-670, could be greatly diminished and our development plans and business would be significantly harmed.
Because ENTR-601-44 is our first EEV therapeutic candidate, if ENTR-601-44 encounters safety, efficacy, supply or manufacturing problems, developmental delays, regulatory or commercialization issues or other problems, the value of our EEV Platform, including our other therapeutic candidates such as ENTR-601-45, ENTR-601-50, ENTR-601-51, and our partnered candidate VX-670, could be greatly diminished and our development plans and business would be significantly harmed.
Although other oligonucleotide therapeutics, enzyme replacement therapies and gene therapies have received regulatory approval, our EEV-based therapeutics are a novel approach to the delivery of biological therapeutics, which may present enhanced uncertainty associated with the safety profile of ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670 and other EEV-based therapeutics compared to more well-established classes of therapies.
Although other oligonucleotide therapeutics, enzyme replacement therapies and gene therapies have received regulatory approval, our EEV-based therapeutics are a novel approach to the delivery of biological therapeutics, which may present enhanced uncertainty associated with the safety profile of ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670 and other EEV-based therapeutics compared to more well-established classes of therapies.
Further, we currently rely, and for the foreseeable future will continue to rely, in substantial part on certain third-party contract organizations, advisors and consultants to provide certain services, including assuming substantial responsibilities for the conduct of our clinical trials and the manufacture of ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670 or any future therapeutic candidates.
Further, we currently rely, and for the foreseeable future will continue to rely, in substantial part on certain third-party contract organizations, advisors and consultants to provide certain services, including assuming substantial responsibilities for the conduct of our clinical trials and the manufacture of ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670 or any future therapeutic candidates.
If we are not able to effectively manage growth and expand our organization, we may not be able to successfully implement the tasks necessary to further develop and commercialize ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670, our other development portfolio therapeutic candidates or any future therapeutic candidates and, accordingly, may not achieve our research, development and commercialization goals.
If we are not able to effectively manage growth and expand our organization, we may not be able to successfully implement the tasks necessary to further develop and commercialize ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670, our other development portfolio therapeutic candidates or any future therapeutic candidates and, accordingly, may not achieve our research, development and commercialization goals.
For example, under Section 174 of the Internal Revenue Code of 1986, as amended (the Code), in taxable years beginning after December 31, 2021, expenses that are incurred for research and development in the U.S. will be capitalized and amortized, which may have an adverse effect on our cash flow.
For example, under Section 174 of the Internal Revenue Code of 1986, as amended (the “Code”), in taxable years beginning after December 31, 2021, expenses that are incurred for research and development in the U.S. will be capitalized and amortized, which may have an adverse effect on our cash flow.
In addition, we have a development portfolio of programs that are in earlier stages of development and have not yet initiated or completed IND-enabling studies. We may never advance any therapeutic candidates through IND-enabling studies and receive authorization from the FDA, to proceed under an IND prior to initiating their clinical-stage development.
In addition, we have a development portfolio of programs that are in earlier stages of development and have not yet initiated or completed IND-enabling studies. We may never advance any additional therapeutic candidates through IND-enabling studies and receive authorization from the FDA, to proceed under an IND prior to initiating their clinical-stage development.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted and obligations imposed under the license agreement and other interpretation-related issues; • our or our licensors’ ability to obtain, maintain and defend intellectual property and to enforce intellectual property rights against third parties; • the extent to which our technology, therapeutic candidates and processes infringe, misappropriate or otherwise violate the intellectual property of the licensor that is not subject to the license agreement; 100 Table of Contents • the sublicensing of patent and other intellectual property rights under our license agreements; • our diligence, development, regulatory, commercialization, financial or other obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our current or future licensors and us and our partners; and • the priority of invention of patented technology.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: 81 Table of Contents • the scope of rights granted and obligations imposed under the license agreement and other interpretation-related issues; • our or our licensors’ ability to obtain, maintain and defend intellectual property and to enforce intellectual property rights against third parties; • the extent to which our technology, therapeutic candidates and processes infringe, misappropriate or otherwise violate the intellectual property of the licensor that is not subject to the license agreement; • the sublicensing of patent and other intellectual property rights under our license agreements; • our diligence, development, regulatory, commercialization, financial or other obligations under the license agreement and what activities satisfy those diligence obligations; • the inventorship and ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our current or future licensors and us and our partners; and • the priority of invention of patented technology.
Increased attention to, and evolving expectations for, environmental, climate change, social, and governance (ESG) initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business. Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices.
Increased attention to, and evolving expectations for, environmental, climate change, social, and governance (“ESG”) initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business. Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices.
From time to time, we may publicly disclose interim, preliminary or topline data from our preclinical studies and planned clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular trial.
From time to time, we may publicly disclose interim, preliminary or topline data from our preclinical studies and clinical trials, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular trial.
Data Privacy Framework (Framework), which entered into force on July 11, 2023. This Framework provides that the protection of personal data transferred between the EU and the United States is comparable to that offered in the EU. This provides a further avenue to ensuring transfers to the United States are carried out in line with GDPR.
Data Privacy Framework (“Framework”), which entered into force on July 11, 2023. This Framework provides that the protection of personal data transferred between the EU and the United States is comparable to that offered in the EU. This provides a further avenue to ensuring transfers to the United States are carried out in line with GDPR.
These provisions include, among other things: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder actions through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action; 119 Table of Contents • a requirement of approval by the affirmative vote of a majority of the outstanding shares of our voting stock to amend or repeal specified provisions of our certificate of incorporation, and the affirmative vote of a majority of the outstanding shares of each class entitled to vote thereon as a class, at a duly constituted meeting of stockholders called expressly for such purpose; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
These provisions include, among other things: • a board of directors divided into three classes serving staggered three-year terms, such that not all members of the board will be elected at one time; • a prohibition on stockholder actions through written consent, which requires that all stockholder actions be taken at a meeting of our stockholders; • a requirement that special meetings of stockholders be called only by the board of directors acting pursuant to a resolution approved by the affirmative vote of a majority of the directors then in office; • advance notice requirements for stockholder proposals and nominations for election to our board of directors; • a requirement that no member of our board of directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of not less than two-thirds of all outstanding shares of our voting stock then entitled to vote in the election of directors; • a requirement of approval of not less than two-thirds of all outstanding shares of our voting stock to amend any bylaws by stockholder action; • a requirement of approval by the affirmative vote of a majority of the outstanding shares of our voting stock to amend or repeal specified provisions of our certificate of incorporation, and the affirmative vote of a majority of the outstanding shares of each class entitled to vote thereon as a class, at a duly constituted meeting of stockholders called expressly for such purpose; and • the authority of the board of directors to issue preferred stock on terms determined by the board of directors without stockholder approval and which preferred stock may include rights superior to the rights of the holders of common stock.
The Inflation Reduction Act of 2022 (the IRA) includes several provisions that may impact our business to varying degrees, including provisions that create a $2,000 out-of-pocket cap for Medicare Part D beneficiaries, impose new manufacturer financial liability on all drugs in Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D pricing for certain high-cost drugs and biologics without generic or biosimilar competition, require companies to pay rebates to Medicare for drug prices that increase faster than inflation, and delay the rebate rule that would limit the fees that pharmacy benefit managers can charge.
The Inflation Reduction Act of 2022 (the “IRA”) includes several provisions that may impact our business to varying degrees, including provisions that create a $2,000 out-of-pocket cap for Medicare Part D beneficiaries, impose new manufacturer financial liability on all drugs in Medicare Part D, allow the U.S. government to negotiate Medicare Part B and Part D pricing for certain high-cost drugs and biologics without generic or biosimilar competition, require companies to pay rebates to Medicare for drug prices that increase faster than inflation, and delay the rebate rule that would limit the fees that pharmacy benefit managers can charge.
In addition, the loss of clinical trial data for ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670 or any other therapeutic candidates could result in delays in our marketing approval efforts and significantly increase our costs to recover or reproduce the data.
In addition, the loss of clinical trial data for ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670 or any other therapeutic candidates could result in delays in our marketing approval efforts and significantly increase our costs to recover or reproduce the data.
Our future capital requirements will depend on many factors, including, but not limited to: • the type, number, scope, progress, expansions, results, costs and timing of our preclinical studies and any clinical trials of the therapeutic candidates that we are pursuing or may choose to pursue in the future; • the clinical development plans we establish for our EEV therapeutic candidates; • the costs and timing of manufacturing for our therapeutic candidates and commercial manufacturing if any therapeutic candidate is approved; • the costs of establishing and maintaining clinical and commercial supply for the development and manufacture of our therapeutic candidates; • the costs, timing and outcome of regulatory review of our therapeutic candidates; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; • the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with hiring additional personnel and consultants as our preclinical and clinical activities increase; 63 Table of Contents • the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements, if any; • the costs and timing of establishing or securing sales and marketing capabilities if any therapeutic candidate is approved; • subject to receipt of regulatory approval, revenue, if any, received from commercial sales of our therapeutic candidates; • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; • the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims; and • the ongoing costs of operating as a public company.
Our future capital requirements will depend on many factors, including, but not limited to: • the type, number, scope, progress, expansions, results, costs and timing of our preclinical studies and any clinical trials of the therapeutic candidates that we are pursuing or may choose to pursue in the future; • the clinical development plans we establish for our therapeutic candidates; • the costs and timing of manufacturing for our therapeutic candidates and commercial manufacturing if any therapeutic candidate is approved; • the costs of establishing and maintaining clinical and commercial supply for the development and manufacture of our therapeutic candidates; • the costs, timing and outcome of regulatory review of our therapeutic candidates; • the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements; • the costs of obtaining, maintaining and enforcing our patents and other intellectual property rights; • our efforts to enhance operational systems and hire additional personnel to satisfy our obligations as a public company, including enhanced internal controls over financial reporting; • the costs associated with hiring additional personnel and consultants as our preclinical and clinical activities increase; • the achievement of milestones or occurrence of other developments that trigger payments under any collaboration agreements, if any; • the costs and timing of establishing or securing sales and marketing capabilities if any therapeutic candidate is approved; • subject to receipt of regulatory approval, revenue, if any, received from commercial sales of our therapeutic candidates; • our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; • the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights, including enforcing and defending intellectual property related claims; and • the ongoing costs of operating as a public company.
Patient enrollment and trial competition may be affected by other factors including: • clinicians’ and patients’ perceived risks and benefits of the therapeutic candidate under trial, particularly therapeutic candidates developed using a novel and unproven therapeutic approach, like our EEV therapeutic candidates in relation to available or investigational drugs; • size of the patient population, in particular for rare diseases such as the diseases on which we are initially focused, and process for identifying patients; • design of the trial protocol; • efforts to facilitate timely enrollment in clinical trials; • eligibility and exclusion criteria; • availability of competing therapies and clinical trials; • severity of the disease or disorder under investigation; • proximity and availability of clinical trial sites for prospective patients; • ability to obtain and maintain patient consent; • risk that enrolled patients will drop out before completion of the trial; • patient referral practices of physicians; and • ability to monitor patients adequately during and after treatment.
Patient enrollment and trial competition may be affected by other factors including: 51 Table of Contents • clinicians’ and patients’ perceived risks and benefits of the therapeutic candidate under trial, particularly therapeutic candidates developed using a novel and unproven therapeutic approach, like our EEV therapeutic candidates in relation to available or investigational drugs; • size of the patient population, in particular for rare diseases such as the diseases on which we are initially focused, and process for identifying patients; • design of the trial protocol; • efforts to facilitate timely enrollment in clinical trials; • eligibility and exclusion criteria; • availability of competing therapies and clinical trials; • severity of the disease or disorder under investigation; • proximity and availability of clinical trial sites for prospective patients; • ability to obtain and maintain patient consent; • risk that enrolled patients will drop out before completion of the trial; • patient referral practices of physicians; and • ability to monitor patients adequately during and after treatment.
The federal False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery; 93 Table of Contents • the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created new federal criminal statutes that prohibit a person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates, independent contractors or agents of covered entities, that perform services for them that involve the creation, maintenance, receipt, use, or disclosure of, individually identifiable health information relating to the privacy, security and transmission of individually identifiable health information.
The federal False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery; • the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit a person from knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, healthcare benefits, 74 Table of Contents items or services relating to healthcare matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose requirements on certain covered healthcare providers, health plans, and healthcare clearinghouses as well as their respective business associates, independent contractors or agents of covered entities, that perform services for them that involve the creation, maintenance, receipt, use, or disclosure of, individually identifiable health information relating to the privacy, security and transmission of individually identifiable health information.
Other events that may prevent successful enrollment, initiation or timely completion of clinical development include: • we may be unable to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of clinical trials; • delays in reaching a consensus with regulatory authorities on trial design; • delays in reaching agreement on acceptable terms with prospective clinical research organizations (CROs) and clinical trial sites; • delays in opening clinical trial sites or obtaining required institutional review board (IRB) or independent ethics committee approval, or the equivalent review groups for sites outside the United States, at each clinical trial site; • we may need to add new or additional clinical trial sites; • imposition of a clinical hold by regulatory authorities as a result of a serious adverse event or after an inspection of our clinical trial operations or trial sites; • negative or inconclusive results observed in clinical trials, including failure to demonstrate statistical significance, safety, purity or potency, which could lead us, or cause regulators to require us, to conduct additional clinical trials or abandon product development programs; • positive results from our preclinical studies of our therapeutic candidates may not necessarily be predictive of the results from required later preclinical studies and clinical trials and positive results from such preclinical studies 69 Table of Contents and clinical trials of our therapeutic candidates may not be replicated in subsequent preclinical studies or clinical trial results; • failure by us, any CROs we engage or any other third parties to adhere to clinical trial requirements; • failure to perform in accordance with applicable GCPs; • failure by investigators to adhere to clinical trial protocols leading to variable results; • delays in the testing, validation, manufacturing and delivery of any therapeutic candidates we may develop to the clinical sites, including delays by third parties with whom we have contracted to perform certain of those functions; • failure of our third-party contractors to comply with regulatory requirements or to meet their contractual obligations to us in a timely manner, or at all; • delays in having patients complete participation in a trial or return for post-treatment follow-up; • clinical trial sites or patients dropping out of a trial; • selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; • occurrence of serious adverse events associated with the therapeutic candidate that are viewed to outweigh its potential benefits; • occurrence of serious adverse events associated with a therapeutic candidate in development by another company, which are viewed to outweigh its potential benefits, and which may negatively impact the perception of our product due to a similarity in technology or approach; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • the FDA or other regulatory authorities may require us to submit additional data such as long-term toxicology studies or impose other requirements before permitting us to initiate a clinical trial; • changes in the legal or regulatory regimes domestically or internationally related to patient rights and privacy; or • lack of adequate funding to continue the clinical trial.
Other events that may prevent successful enrollment, initiation or timely completion of clinical development include: • we may be unable to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of clinical trials; • delays in reaching a consensus with regulatory authorities on trial design; • delays in reaching agreement on acceptable terms with prospective clinical research organizations (“CROs”) and clinical trial sites; • delays in opening clinical trial sites or obtaining required institutional review board (“IRB”) or independent ethics committee approval, or the equivalent review groups for sites outside the United States, at each clinical trial site; • we may need to add new or additional clinical trial sites; • imposition of a clinical hold by regulatory authorities as a result of a serious adverse event or after an inspection of our clinical trial operations or trial sites; • negative or inconclusive results observed in clinical trials, including failure to demonstrate statistical significance, safety, purity or potency, which could lead us, or cause regulators to require us, to conduct additional clinical trials or abandon product development programs; • positive results from our preclinical studies of our therapeutic candidates may not necessarily be predictive of the results from required later preclinical studies and clinical trials and positive results from such preclinical studies and clinical trials of our therapeutic candidates may not be replicated in subsequent preclinical studies or clinical trial results; • failure by us, any CROs we engage or any other third parties to adhere to clinical trial requirements; • failure to perform in accordance with applicable GCPs; • failure by investigators to adhere to clinical trial protocols leading to variable results; • delays in the testing, validation, manufacturing and delivery of any therapeutic candidates we may develop to the clinical sites, including delays by third parties with whom we have contracted to perform certain of those functions; • failure of our third-party contractors to comply with regulatory requirements or to meet their contractual obligations to us in a timely manner, or at all; • delays in having patients complete participation in a trial or return for post-treatment follow-up; • clinical trial sites or patients dropping out of a trial; • selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data; • occurrence of serious adverse events associated with the therapeutic candidate that are viewed to outweigh its potential benefits; • occurrence of serious adverse events associated with a therapeutic candidate in development by another company, which are viewed to outweigh its potential benefits, and which may negatively impact the perception of our product due to a similarity in technology or approach; • changes in regulatory requirements and guidance that require amending or submitting new clinical protocols; • the FDA, other regulatory authorities, or ethics committees may require us to submit additional data such as long-term toxicology studies or impose other requirements before permitting us to initiate a clinical trial; • changes in the legal or regulatory regimes domestically or internationally related to patient rights and privacy; or • lack of adequate funding to continue the clinical trial.
Additionally, if the results of future clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with any therapeutic candidates we may develop, we may: • be delayed in obtaining marketing approval for therapeutic candidates, if at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; 70 Table of Contents • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; • be subject to changes in the way the product is administered; • be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements; • have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy; • be subject to the addition of labeling statements, such as warnings or contraindications; • be sued; or • experience damage to our reputation.
Additionally, if the results of future clinical trials are inconclusive or if there are safety concerns or serious adverse events associated with any therapeutic candidates we may develop, we may: • be delayed in obtaining marketing approval for therapeutic candidates, if at all; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; • be subject to changes in the way the product is administered; • be required to perform additional clinical trials to support approval or be subject to additional post-marketing testing requirements; • have regulatory authorities withdraw, or suspend, their approval of the product or impose restrictions on its distribution in the form of a modified risk evaluation and mitigation strategy; • be subject to the addition of labeling statements, such as warnings or contraindications; • be sued; or • experience damage to our reputation.
We are highly dependent on the research expertise of Natarajan Sethuraman, Ph.D., our Chief Scientific Officer, and the development and management expertise of Dipal Doshi, our Chief Executive Officer, as well as the other principal members of our management, scientific and clinical team.
We are highly dependent on the research expertise of Natarajan Sethuraman, Ph.D., our President of Research and Development, and the development and management expertise of Dipal Doshi, our Chief Executive Officer, as well as the other principal members of our management, scientific and clinical team.
Collaborations involving our research programs or any therapeutic candidates we may develop pose numerous risks to us, including the following: • collaborators would have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of any therapeutic candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay programs, preclinical studies or clinical trials, provide insufficient funding for programs, preclinical studies or clinical trials, stop a preclinical study or clinical trial or abandon a therapeutic candidate, repeat or conduct new clinical trials or require a new formulation of a therapeutic candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with any therapeutic candidates we may develop if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators may be acquired by a third party having competitive products or different priorities, causing the emphasis on our product development or commercialization program under such collaboration to be delayed, diminished or terminated; • collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; • collaborators may not properly obtain, maintain, enforce or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation; • if a collaborator of ours is involved in a business combination, the collaborator might de-emphasize or terminate the development or commercialization of any therapeutic candidate licensed to it by us; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of any therapeutic candidates we may develop or that result in costly litigation or arbitration that diverts management attention and resources; • we may lose certain valuable rights under certain circumstances, including if we undergo a change of control; • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable therapeutic candidates we may develop; and • our collaborators’ business or operations could be disrupted due to reasons outside of our control, such as global health crises, which could have an adverse impact on their development and commercialization efforts or the prospects of our collaboration; • collaboration agreements may not lead to development or commercialization of therapeutic candidates in the most efficient manner or at all.
Collaborations involving our research programs or any therapeutic candidates we may develop pose numerous risks to us, including the following: • collaborators would have significant discretion in determining the efforts and resources that they will apply to these collaborations; 64 Table of Contents • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of any therapeutic candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities; • collaborators may delay programs, preclinical studies or clinical trials, provide insufficient funding for programs, preclinical studies or clinical trials, stop a preclinical study or clinical trial or abandon a therapeutic candidate, repeat or conduct new clinical trials or require a new formulation of a therapeutic candidate for clinical testing; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with any therapeutic candidates we may develop if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • collaborators may be acquired by a third party having competitive products or different priorities, causing the emphasis on our product development or commercialization program under such collaboration to be delayed, diminished or terminated; • collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products; • collaborators may not properly obtain, maintain, enforce or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation; • if a collaborator of ours is involved in a business combination, the collaborator might de-emphasize or terminate the development or commercialization of any therapeutic candidate licensed to it by us; • disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of any therapeutic candidates we may develop or that result in costly litigation or arbitration that diverts management attention and resources; • we may lose certain valuable rights under certain circumstances, including if we undergo a change of control; • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable therapeutic candidates we may develop; • our collaborators’ business or operations could be disrupted due to reasons outside of our control, such as global health crises, macroeconomic conditions and geopolitical developments, which could have an adverse impact on their development and commercialization efforts or the prospects of our collaboration; and • collaboration agreements may not lead to development or commercialization of therapeutic candidates in the most efficient manner or at all.
To the extent that any disruption or cybersecurity incident were to result in a loss of, or damage to, our data or applications, or those of our third-party CROs, vendors and other contractors and consultants, or inappropriate disclosure of confidential or proprietary information, we could incur liability and reputational damage and the further development and commercialization of ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670 or any future therapeutic candidates could be delayed.
To the extent that any disruption, data breach, or cybersecurity incident were to result in a loss of, or damage to, our data or applications, or those of our third-party CROs, vendors and other contractors and consultants, or inappropriate disclosure of confidential or proprietary information, we could incur liability and reputational damage and the further development and commercialization of ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670 or any future therapeutic candidates could be delayed.
Most of our development programs, with the exception of ENTR-601-44 and our partnered candidate VX-670, but including ENTR-601-45 and ENTR-601-50, are in preclinical development or in the drug discovery stage.
Most of our development programs, with the exception of ENTR-601-44 and our partnered candidate VX-670, but including ENTR-601-45, ENTR-601-50 and ENTR-601-51, are in preclinical development or in the drug discovery stage.
For as long as we continue to be an emerging growth company, we intend to take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including: • being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in our periodic reports; • not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (Sarbanes-Oxley Act); 118 Table of Contents • not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; • reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and • exemptions from the requirements of holding nonbinding advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
For as long as we continue to be an emerging growth company, we intend to take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including: • being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements, with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in our periodic reports; • not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley Act”); • not being required to comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements; • reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and 100 Table of Contents • exemptions from the requirements of holding nonbinding advisory stockholder votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
All of these risks may relate to our current and future programs sharing similar science (including EEV science) and infrastructure, and in the event material decisions in any of these areas turn out to have been incorrect or under-optimized, we may experience a material adverse impact on our business and ability to fund our operations and we may never realize what we believe is the potential of EEVs.
All of these risks may relate to our current and future programs sharing similar science (including EEV science) and infrastructure, and in the event material decisions in any of these areas turn out to have been incorrect or under-optimized, we may experience a material adverse impact on our business and ability to fund our operations and we may never realize what we believe is the potential of EEV peptides.
However, if our efforts in the United States and elsewhere are not successful, we may not be able to complete a clinical development program that enables the approval and marketing of ENTR-601-44 as planned, or at all. Furthermore, therapeutic candidates are subject to continued preclinical safety studies, which may be conducted concurrently with our clinical testing.
In addition, if our efforts in the United States and elsewhere are not successful, we may not be able to complete a clinical development program that enables the approval and marketing of ENTR-601-44 as planned, or at all. Furthermore, therapeutic candidates are subject to continued preclinical safety studies, which may be conducted concurrently with our clinical testing.
Our lead therapeutic candidates, with the exception of ENTR-601-44 and our partnered candidate VX-670, but including ENTR-601-45 and ENTR-601-50, are in preclinical development.
Our lead therapeutic candidates, with the exception of ENTR-601-44 and our partnered candidate VX-670, but including ENTR-601-45, ENTR-601-50 and ENTR-601-51, are in preclinical development.
Furthermore, significant disruptions of our internal information technology systems or those of our third-party CROs, vendors and other contractors and consultants, or cybersecurity incidents could result in the loss, misappropriation and/or unauthorized access, use, or disclosure of, or the prevention of access to, confidential information (including trade secrets or other intellectual property, proprietary business information and personal information), which could result in financial, legal, business and reputational harm to us.
Furthermore, significant disruptions of our internal information technology systems or those of our third-party CROs, vendors and other contractors and consultants, data breaches, or cybersecurity incidents could result in the loss, misappropriation and/or unauthorized access, use, or disclosure of, or the prevention of access to, confidential information (including trade secrets or other intellectual property, proprietary business information and personal information), which could result in financial, legal, business and reputational harm to us.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for any therapeutic candidates we may develop; • injury to our reputation and significant negative media attention; • withdrawal of clinical trial participants and inability to continue clinical trials; • initiation of investigations by regulators; • significant costs to defend any related litigation; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • loss of revenue; • exhaustion of any available insurance and our capital resources; • decline in our stock price; • reduced resources of our management to pursue our business strategy; and • the inability to commercialize any therapeutic candidates we may develop.
Regardless of merit or eventual outcome, liability claims may result in: • decreased demand for any therapeutic candidates we may develop; • injury to our reputation and significant negative media attention; • withdrawal of clinical trial participants and inability to continue clinical trials; • initiation of investigations by regulators; • significant costs to defend any related litigation; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; 59 Table of Contents • loss of revenue; • exhaustion of any available insurance and our capital resources; • decline in our stock price; • reduced resources of our management to pursue our business strategy; and • the inability to commercialize any therapeutic candidates we may develop.
In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price (ASP) and best price. Penalties may apply in some cases when such metrics are not submitted accurately and timely. Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs.
In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price (“ASP”) and best price. Penalties may apply in some cases when such metrics are not submitted accurately and timely. Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs.
If the information technology systems of our third-party CROs, vendors and other contractors and consultants become subject to disruptions or cybersecurity incidents, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent future events of this nature from occurring.
If the information technology systems of our third-party CROs, vendors and other contractors and consultants become subject to disruptions, data breaches, or cybersecurity incidents, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event, and to develop and implement protections to prevent future events of this nature from occurring.
Commencing clinical trials in the United States is subject to acceptance by the FDA of an IND and finalizing the trial design based on discussions with the FDA and other regulatory authorities. For the FDA to accept an IND, we must complete Good Laboratory Practices (GLP) studies, which may not be successful or may take longer than we expect.
Commencing clinical trials in the United States is subject to acceptance by the FDA of an IND and finalizing the trial design based on discussions with the FDA and other regulatory authorities. For the FDA to accept an IND, we must complete Good Laboratory Practices (“GLP”) studies, which may not be successful or may take longer than we expect.
Using EEV technology to develop therapeutic candidates is a new therapeutic approach and no products based on EEVs have been approved to date in the United States or the rest of the world. As such, it is difficult to accurately predict the developmental challenges we may face for our EEV therapeutic candidates as they proceed through development.
Using EEV technology to develop therapeutic candidates is a new therapeutic approach and no products based on EEV peptides have been approved to date in the United States or the rest of the world. As such, it is difficult to accurately predict the developmental challenges we may face for our EEV therapeutic candidates as they proceed through development.
The positive results we have observed for our therapeutic candidates in early, non-GLP preclinical studies and animal models may not be predictive of our future clinical trials in humans. Furthermore, for some indications that we are pursuing there are no animal models that adequately mirror the human disease to predict any level of positive results.
The positive results we have observed for our therapeutic candidates in early, non-GLP preclinical studies and animal models may not be predictive of our current or future clinical trials in humans. Furthermore, for some indications that we are pursuing there are no animal models that adequately mirror the human disease to predict any level of positive results.
Changes in either the patent laws or interpretation of patent laws in the United States and worldwide, including patent reform legislation such as the Leahy-Smith America Invents Act (the Leahy-Smith Act), could increase the uncertainties and costs surrounding the prosecution of any owned or in-licensed patent applications and the maintenance, enforcement or defense of any current in-licensed issued patents and issued patents we may own or in-license in the future.
Changes in either the patent laws or interpretation of patent laws in the United States and worldwide, including patent reform legislation such as the Leahy-Smith America Invents Act (the “Leahy-Smith Act”), could increase the uncertainties and costs surrounding the prosecution of any owned or in-licensed patent applications and the maintenance, enforcement or defense of any current in-licensed issued patents and issued patents we may own or in-license in the future.
By way of example, the California Consumer Privacy Act (CCPA), which went into effect on January 1, 2020, established a comprehensive privacy framework for covered businesses by creating an expanded definition of personal information, establishing new data privacy rights for consumers in the State of California, and imposing special rules on the collection of consumer data from minors.
By way of example, the California Consumer Privacy Act (“CCPA”), which went into effect on January 1, 2020, established a comprehensive privacy framework for covered businesses by creating an expanded definition of personal information, establishing new data privacy rights for consumers in the State of California, and imposing special rules on the collection of consumer data from minors.
In addition, our amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the foregoing provisions; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
In addition, our Bylaws provide that any person or entity purchasing or otherwise acquiring any interest in shares of our common stock is deemed to have notice of and consented to the foregoing provisions; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.
If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to significant penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, the exclusion from participation in federal and state healthcare programs, individual imprisonment, reputational harm, and the curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
If our operations are found to be in violation of any of the laws described above or any other governmental laws and regulations that may apply to us, we may be subject to 75 Table of Contents significant penalties, including administrative, civil and criminal penalties, damages, fines, disgorgement, the exclusion from participation in federal and state healthcare programs, individual imprisonment, reputational harm, and the curtailment or restructuring of our operations, as well as additional reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations of non-compliance with these laws.
After initiating a clinical trial, we could also encounter delays if the clinical trial is suspended, placed on clinical hold or terminated by us, the IRBs of the institutions in which such trials are being conducted, or the FDA or other regulatory authorities or recommended for suspension or termination by the Data Safety Monitoring Board (DSMB) for such trial.
After initiating a clinical trial, we could also encounter delays if the clinical trial is suspended, placed on clinical hold or terminated by us, the IRBs of the institutions in which such trials are being conducted, or the FDA or other regulatory authorities or recommended for suspension or termination by the Data Safety Monitoring Board (“DSMB”) for such trial.
Additionally, the forum selection clauses in our amended and restated bylaws may limit our stockholders’ ability to bring a claim in a forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees even though an action, if successful, might benefit our stockholders.
Additionally, the forum selection clauses in our Bylaws may limit our stockholders’ ability to bring a claim in a forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage such lawsuits against us and our directors, officers and employees even though an action, if successful, might benefit our stockholders.
Any positive results from our preclinical studies of our EEV therapeutic candidates may not necessarily be predictive of the results in later preclinical studies and clinical trials.
Any positive results from our preclinical studies of our therapeutic candidates may not necessarily be predictive of the results in later preclinical studies and clinical trials.
In particular, while we have conducted certain preclinical studies of ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670 and other potential therapeutic candidates, we do not know whether ENTR-601-44, ENTR-601-45, ENTR-601-50, VX-670 or the other potential therapeutic candidates will perform in future clinical trials as they have performed in these prior studies.
In particular, while we have conducted certain preclinical studies of ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670 and other potential therapeutic candidates, we do not know whether ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, VX-670 or the other potential therapeutic candidates will perform in current or future clinical trials as they have performed in these prior studies.
We currently rely, and expect to continue to rely, on third parties with respect to many of these items, including contract manufacturing organizations (CMOs) for the manufacturing of any therapeutic candidates we test in preclinical or clinical development, as well as CROs for the conduct of our animal testing and research and CROs for the conduct of our planned clinical trials.
We currently rely, and expect to continue to rely, on third parties with respect to many of these items, including contract manufacturing organizations (“CMOs”) for the manufacturing of any therapeutic candidates we test in preclinical or clinical development, as well as CROs for the conduct of our animal testing and research and CROs for the conduct of our planned clinical trials.
A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product or treatment, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial 50 Table of Contents site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a product or treatment, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.
In addition, the U.S. government has the right, under certain limited circumstances, to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if it determines that: (1) adequate steps have not been taken to commercialize the invention; (2) government action is necessary to meet public health or safety needs; or (3) government action is necessary to meet requirements for public use under federal regulations (also referred to as march-in rights).
In addition, the U.S. government has the right, under certain limited circumstances, to require us to grant exclusive, partially exclusive, or non-exclusive licenses to any of these inventions to a third party if it determines that: (1) adequate steps have not been 82 Table of Contents taken to commercialize the invention; (2) government action is necessary to meet public health or safety needs; or (3) government action is necessary to meet requirements for public use under federal regulations (also referred to as march-in rights).
Even when HIPAA does not apply, failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act (FTCA), 15 U.S.C § 45(a).
Even when HIPAA does not apply, failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act (“FTCA”), 15 U.S.C § 45(a).
The UK is not subject to the European Commission’s SCCs but the UK Information Commissioner’s Office has published the UK’s own transfer mechanisms for personal data originating from the UK (the International Data Transfer Agreement and International Data Transfer Addendum (each an IDTA)), which have been in force since March 21, 2022.
The UK is not subject to the European Commission’s SCCs but the UK Information Commissioner’s Office has published the UK’s own transfer mechanisms for personal data originating from the UK (the International Data Transfer Agreement and International Data Transfer Addendum (each an “IDTA”)), which have been in force since March 21, 2022.
Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock. Pursuant to our 2021 Stock Option and Incentive Plan (2021 Plan), our management is authorized to grant stock options to our employees, directors and consultants.
Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock. Pursuant to our 2021 Stock Option and Incentive Plan (the “2021 Plan”), our management is authorized to grant stock options to our employees, directors and consultants.
For the foregoing reasons, we cannot be certain that our ongoing and planned preclinical studies and planned clinical trials will be successful.
For the foregoing reasons, we cannot be certain that our ongoing and planned preclinical studies and current and planned clinical trials will be successful.
Food and Drug Administration (FDA), the European Medicines Agency (EMA) or other comparable foreign regulatory authority guidelines and requirements, the quantity of production and the terms of our agreements with manufacturers; • expenditures that we will or may incur to acquire or develop additional therapeutic candidates and technologies or other assets; • the timing and outcomes of preclinical studies and clinical trials for ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670 and any therapeutic candidates from our discovery programs, or competing therapeutic candidates; • the need to conduct unanticipated clinical trials or trials that are larger or more complex than anticipated; 64 Table of Contents • competition from existing and potential future products that compete with ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670 or any of our discovery programs, and changes in the competitive landscape of our industry, including consolidation among our competitors or partners; • any delays in regulatory review or approval of ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670 or therapeutic candidates from any of our discovery programs; • the level of demand for any of our therapeutic candidates, if approved, which may fluctuate significantly and be difficult to predict; • the risk/benefit profile, cost and reimbursement policies with respect to our therapeutic candidates, if approved, and existing and potential future products that compete with ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670 or any of our discovery programs; • our or our partners' ability to commercialize ENTR-601-44, ENTR-601-45, ENTR-601-50, our partnered candidate VX-670 or therapeutic candidates from any of our discovery programs, if approved, inside and outside of the U.S., either independently or working with third parties; • our ability to establish and maintain collaborations, licensing or other arrangements; • our ability to adequately support future growth; • potential unforeseen business disruptions that increase our costs or expenses; • future accounting pronouncements or changes in our accounting policies; and • the changing and volatile United States and global economic and political environment.
Food and Drug Administration (“FDA”), the European Medicines Agency (“EMA”) or other comparable foreign regulatory authority guidelines and requirements, the quantity of production and the terms of our agreements with manufacturers; • expenditures that we will or may incur to acquire or develop additional therapeutic candidates and technologies or other assets; • the timing and outcomes of preclinical studies and clinical trials for ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670 and any therapeutic candidates from our discovery programs, or competing therapeutic candidates; • the need to conduct unanticipated clinical trials or trials that are larger or more complex than anticipated; • competition from existing and potential future products that compete with ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670 or any of our discovery programs, and changes in the competitive landscape of our industry, including consolidation among our competitors or partners; • any delays in regulatory review or approval of ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670 or therapeutic candidates from any of our discovery programs; • the level of demand for any of our therapeutic candidates, if approved, which may fluctuate significantly and be difficult to predict; • the risk/benefit profile, cost and reimbursement policies with respect to our therapeutic candidates, if approved, and existing and potential future products that compete with ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670 or any of our discovery programs; • our or our partners' ability to commercialize ENTR-601-44, ENTR-601-45, ENTR-601-50, ENTR-601-51, our partnered candidate VX-670 or therapeutic candidates from any of our discovery programs, if approved, inside and outside of the U.S., either independently or working with third parties; • our ability to establish and maintain collaborations, licensing or other arrangements; • our ability to adequately support future growth; • potential unforeseen business disruptions that increase our costs or expenses; • future accounting pronouncements or changes in our accounting policies; and • the changing and volatile United States and global economic and political environment.
Despite the implementation of security measures, given their size and complexity and the increasing amounts of confidential information that they maintain, our internal information technology systems and those of our third-party CROs, vendors and other contractors and consultants are potentially vulnerable to breakdown or other damage or 91 Table of Contents interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as cybersecurity incidents from inadvertent or intentional actions by our employees, third-party CROs, vendors, contractors, consultants, business partners and/or other third parties, or from cyber-attacks by malicious third parties (including the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and other means to affect service reliability and threaten the confidentiality, integrity and availability of information), which may compromise our system infrastructure, or that of our third-party CROs, vendors and other contractors and consultants, or lead to data leakage.
Despite the implementation of security measures, given their size and complexity and the increasing amounts of confidential information that they maintain, our internal information technology systems and those of our third-party CROs, vendors and other contractors and consultants are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as data breaches or cybersecurity incidents from inadvertent or intentional actions by our employees, third-party CROs, vendors, contractors, consultants, business partners and/or other third parties, or from cyber-attacks by malicious third parties (including the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering (including phishing attacks) and other means to affect service reliability and threaten the confidentiality, integrity and availability of information), which may compromise our system infrastructure, or that of our third-party CROs, vendors and other contractors and consultants, or lead to data leakage.
For example, in September 2023, we entered into a sales agreement (the Sales Agreement) with Cowen and Company, LLC acting as our agent and/or principal (the Sales Agent), with respect to an "at the market offering" program under which we may offer and sell, from time to time, at our sole discretion, shares of common stock having an aggregate offering price of up to $150.0 million through the Sales Agent.
For example, in September 2023, we entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC acting as our agent and/or principal (the “Sales Agent”), with respect to an "at the market offering" program under which we may offer and sell, from time to time, at our sole discretion, shares of common stock having an aggregate offering price of up to $150.0 million through the Sales Agent.
Under the Orphan Drug Act, the FDA may designate a therapeutic candidate as an orphan drug if it is a drug intended to treat a rare condition, which is generally defined as a patient 76 Table of Contents population of fewer than 200,000 individuals annually in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.
Under the Orphan Drug Act, the FDA may designate a therapeutic candidate as an orphan drug if it is a drug intended to treat a rare condition, which is generally defined as a patient population of fewer than 200,000 individuals annually in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.
We cannot assure our stockholders that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials complies with GCP regulations. In addition, our clinical trials must be conducted with product produced under conditions that comply with GMPs.
We cannot assure our stockholders that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials complies with GCP regulations. In addition, our clinical trials must be conducted with product produced under conditions that comply with CGMPs.
Although the UK is regarded as a third country under the EU’s GDPR, the European Commission (EC) has now issued a decision recognizing the UK as providing adequate protection under the EU GDPR and, therefore, transfers of personal data originating in the EU to the UK remain unrestricted.
Although the UK is regarded as a third country under the EU’s GDPR, the European Commission (“EC”) has now issued a decision recognizing the UK as providing adequate protection under the EU GDPR and, therefore, transfers of personal data originating in the EU to the UK remain unrestricted.
These changes include provisions that affect the way patent applications are prosecuted, redefine prior art, provide more efficient and cost-effective avenues for competitors to challenge the validity of patents, and enable third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent at USPTO-administered post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings.
These changes include provisions that affect the way patent applications are prosecuted, redefine prior art, provide more efficient and cost-effective avenues for competitors to challenge the validity of patents, and enable third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent at USPTO-administered post-grant proceedings, 84 Table of Contents including post-grant review, inter partes review, and derivation proceedings.
Under these rules, beginning with our second annual report on Form 10-K after we become a public company, we are required to make a formal assessment of the effectiveness of our internal control over financial reporting, and once we cease to be an emerging growth company, we may be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
Under these rules, beginning with our second annual report on Form 10-K after we become a public company, we are required to make a formal assessment of the effectiveness 102 Table of Contents of our internal control over financial reporting, and once we cease to be an emerging growth company, we may be required to include an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.
Sales of these or other products that we may identify will depend substantially, both domestically and abroad, on the extent to which the costs of our therapeutics will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors.
Sales of these or other products that we may identify will depend substantially, both domestically and abroad, on the extent to which the costs of our therapeutics will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management 67 Table of Contents organizations, or reimbursed by government health administration authorities, private health coverage insurers and other third-party payors.
Under existing U.S. environmental laws and regulations, current or previous owners or operators of real property and entities that disposed or arranged for the disposal of hazardous substances may be held strictly, jointly and severally liable for the cost of investigating or remediating contamination caused by hazardous substance releases, even if they did not know of and were not responsible for the releases.
Under existing U.S. environmental laws and regulations, current or previous owners or operators of real property and entities that disposed or arranged for the disposal of hazardous substances may be held strictly, jointly and 73 Table of Contents severally liable for the cost of investigating or remediating contamination caused by hazardous substance releases, even if they did not know of and were not responsible for the releases.
If we or our licensors are unsuccessful in any of these proceedings, such patent rights may be narrowed, invalidated or held 102 Table of Contents unenforceable, we may be required to obtain licenses from third parties, which may not be available on commercially reasonable terms or at all, or we may be required to cease the development, manufacture and commercialization of one or more of our therapeutic candidates.
If we or our licensors are unsuccessful in any of these proceedings, such patent rights may be narrowed, invalidated or held unenforceable, we may be required to obtain licenses from third parties, which may not be available on commercially reasonable terms or at all, or we may be required to cease the development, manufacture and commercialization of one or more of our therapeutic candidates.
We are early in our development efforts and all our development programs, including our lead therapeutic candidates ENTR-601-44 and our partnered candidate VX-670, which are in the early clinical stage, and ENTR-601-45 and ENTR-601-50, which are in the preclinical or drug discovery stage.
We are early in our development efforts and all our development programs, including our lead therapeutic candidate ENTR-601-44 and our partnered candidate VX-670, which are in the early clinical stage, and ENTR-601-45, ENTR-601-50 and ENTR-601-51, which are in the preclinical or drug discovery stage.
Any of these factors may prevent us from completing our preclinical studies or any clinical trials that we may initiate or commercializing any therapeutic candidates we may develop on a timely or profitable basis, if at all.
Any of these factors may prevent us from completing our preclinical studies or any clinical trials that we have initiated or may initiate or commercializing any therapeutic candidates we may develop on a timely or profitable basis, if at all.
As such, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our in-licensed issued patents and issued patents we may own or in-license in the future, all 103 Table of Contents of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
As such, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our in-licensed issued patents and issued patents we may own or in-license in the future, all of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Further, a ballot initiative, the California Privacy Rights Act (CPRA), was passed by California voters on November 3, 2020 and as of January 1, 2023 has imposed additional obligations on companies covered by the legislation.
Further, a ballot initiative, the California Privacy Rights Act (“CPRA”), was passed by California voters on November 3, 2020 and as of January 1, 2023 has imposed additional obligations on companies covered by the legislation.
In addition, receiving accelerated approval does not assure that the product’s accelerated approval will eventually be converted to a traditional approval. We may seek Fast Track designation, Breakthrough Therapy designation and/or orphan drug designation from the FDA or similar designations from other regulatory authorities for one or more of our therapeutic candidates.
In addition, receiving accelerated approval does not assure that the product’s accelerated approval will eventually be converted to a traditional approval. 56 Table of Contents We may seek Fast Track designation, Breakthrough Therapy designation and/or orphan drug designation from the FDA or similar designations from other regulatory authorities for one or more of our therapeutic candidates.
The clinical development, manufacturing, labeling, packaging, storage, record-keeping, advertising, promotion, import, export, marketing, distribution and adverse event reporting, including the submission of safety and other information, of our therapeutic candidates are subject to extensive regulation by the FDA in the United States and by 72 Table of Contents comparable foreign regulatory authorities in foreign markets.
The clinical development, manufacturing, labeling, packaging, storage, record-keeping, advertising, promotion, import, export, marketing, distribution and adverse event reporting, including the submission of safety and other information, of our therapeutic candidates are subject to extensive regulation by the FDA in the United States and by comparable foreign regulatory authorities in foreign markets.
Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial 97 Table of Contents services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems.
These transfers are prohibited unless an appropriate safeguard specified by data protection laws is implemented, such as the Standard Contractual Clauses, or SCCs, approved by the European Commission, or a derogation applies.
These transfers are prohibited unless an appropriate safeguard specified by data protection laws is implemented, such as the Standard Contractual Clauses (“SCCs”), approved by the European Commission, or a derogation applies.
A failure of one or more clinical trials can occur at any stage of testing, which may result from a multitude of factors, including, but not limited to, flaws in trial design, dose selection issues, patient enrollment criteria and failure to demonstrate favorable safety or efficacy traits.
A failure of one or more clinical trials can occur at any stage of testing, which may result from a 49 Table of Contents multitude of factors, including, but not limited to, flaws in trial design, dose selection issues, patient enrollment criteria and failure to demonstrate favorable safety or efficacy traits.
Outside parties may: • have staffing difficulties; • be unable to acquire the necessary supplies to perform successfully; • fail to comply with contractual obligations; • experience regulatory compliance issues; 80 Table of Contents • undergo changes in priorities or become financially distressed; or • form relationships with other entities, some of which may be our competitors.
Outside parties may: • have staffing difficulties; • be unable to acquire the necessary supplies to perform successfully; • fail to comply with contractual obligations; • experience regulatory compliance issues; • undergo changes in priorities or become financially distressed; or • form relationships with other entities, some of which may be our competitors.
Under certain circumstances, eligible patients can seek 90 Table of Contents treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.
Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA permission under the FDA expanded access program. There is no obligation for a pharmaceutical manufacturer to make its drug products available to eligible patients as a result of the Right to Try Act.
If we are unable to successfully obtain rights to required third party 105 Table of Contents intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of the relevant program or therapeutic candidate, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
If we are unable to successfully obtain rights to required third party intellectual property rights or maintain the existing intellectual property rights we have, we may have to abandon development of the relevant program or therapeutic candidate, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
Recent volatility in capital markets and lower market prices for many securities may affect our ability to access new capital through sales of shares of our common stock or issuance of indebtedness, which may harm our liquidity, limit 114 Table of Contents our ability to grow our business, pursue acquisitions or improve our operating infrastructure and restrict our ability to compete in our markets.
Recent volatility in capital markets and lower market prices for many securities may affect our ability to access new capital through sales of shares of our common stock or issuance of indebtedness, which may harm our liquidity, limit our ability to grow our business, pursue acquisitions or improve our operating infrastructure and restrict our ability to compete in our markets.
To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees, which may adversely impact our operations. 116 Table of Contents In addition, we expect there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters.
To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees, which may adversely impact our operations. In addition, we expect there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of our cybersecurity risk management program, we maintain processes related to third-party vendor cybersecurity risk management. As appropriate, we contractually require certain third-parties to certify that they have the ability to implement and maintain appropriate cybersecurity measures, consistent with applicable laws, and to promptly report any suspected cybersecurity incidents that may affect our company or our data.
Biggest changeAs appropriate, we contractually require certain third-parties to certify that they have the ability to implement and maintain appropriate cybersecurity measures, consistent with applicable laws, and to promptly report any suspected cybersecurity incidents that may affect our company or our data. We face a number of cybersecurity risks in connection with our business.
Our cybersecurity risk management program is informed by recognized industry standards and frameworks and incorporates elements of the same, including elements of the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework and the Federal Information Processing Standards Publication (“FIPS”).
Our cybersecurity risk management program is informed by recognized industry standards and frameworks and incorporates elements of the same, including elements of the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework and the Federal Information Processing Standards (“FIPS”) Publication.
The CFO reports on the cybersecurity risk management program to the other members of our Risk Management Committee and, alongside our General Counsel, provides quarterly cybersecurity risk management briefings to the audit committee, including discussion of cybersecurity risks, that include any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and other matters relevant to our overall cybersecurity risk management.
The CFO reports on the cybersecurity risk management program to the other members of our Risk and Compliance Committee and, alongside our General Counsel, provides quarterly cybersecurity risk management briefings to the audit committee, including discussion of cybersecurity risks, that include any recent cybersecurity incidents and related responses, cybersecurity systems testing, activities of third parties, and other matters relevant to our overall cybersecurity risk management.
Our Head of IT’s responsibilities, with support from our internal IT team and external IT consultants, include assessing, monitoring, and managing our cybersecurity risks. Our Head of IT periodically reports to our CFO on matters relating to our overall cybersecurity risk management program and, in the event of a cybersecurity incident, reports directly to our entire Risk Management Committee.
Our Head of IT’s responsibilities, with support from our internal IT team and external IT consultants, include assessing, monitoring, and managing our cybersecurity risks. Our Head of IT periodically reports to our CFO on matters relating to our overall cybersecurity risk management program and, in the event of a cybersecurity incident, reports directly to our entire Risk and Compliance Committee.
Our Head of Information Technology (“IT”), who reports directly to our CFO, has primary responsibility for the day-to-day management of our cybersecurity risk management program. The individual currently operating as our Head of IT possesses approximately 19 years of experience with information technology and cybersecurity risk management programs.
Our Head of Information Technology (“IT”), who reports directly to our CFO, has primary responsibility for the day-to-day management of our cybersecurity risk management program. The individual currently operating as our Head of IT possesses approximately 20 years of experience with information technology and cybersecurity risk management programs.
Under the purview of our audit committee, our President and Chief Operating Officer, General Counsel, and Chief Financial Officer (“CFO”) collectively, the “Risk Management Committee”) are primarily responsible for assessing, managing and mitigating our critical risks from cybersecurity threats.
Under the purview of our audit committee, our President and Chief Operating Officer, General Counsel, and Chief Financial Officer (“CFO”) (collectively, the “Risk and Compliance Committee”) are primarily responsible for assessing, managing and mitigating our critical risks from cybersecurity threats.
These cybersecurity risk assessments are designed to include identification of reasonably foreseeable internal and external cybersecurity risks, analysis on the likelihood and potential damage that could result from such risks, and feedback on the sufficiency of our existing procedures, systems, and safeguards to mitigate such cybersecurity risks.
These cybersecurity risk assessments are designed to include identification of reasonably foreseeable internal and external cybersecurity risks, analysis on the likelihood and potential damage that could result from such risks, and feedback on the sufficiency of our existing procedures, systems, and safeguards to mitigate such cybersecurity risks. 104 Table of Contents As part of our cybersecurity risk management program, we maintain processes related to third-party vendor cybersecurity risk management.
These service providers assist us in designing and implementing cybersecurity procedures, as well as in monitoring and testing the effectiveness of our cybersecurity safeguards.
As necessary and appropriate, we engage consultants, or other third parties, in connection with our cybersecurity risk assessment processes. These service providers assist us in designing and implementing cybersecurity procedures, as well as in monitoring and testing the effectiveness of our cybersecurity safeguards.
These tools and processes include, but are not limited to, periodic cybersecurity risk assessments and vulnerability analyses, as well as monitoring for critical risks from cybersecurity threats using automated tools.
These tools and processes include, but are not limited to, periodic cybersecurity risk assessments and vulnerability analyses, as well as monitoring for critical risks from cybersecurity threats using automated tools. Personnel at all levels and departments are made aware of our cybersecurity policies through participation in cybersecurity risk awareness trainings during onboarding and on an annual basis thereafter.
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Personnel at all levels and departments are made aware of our cybersecurity policies through participation in cybersecurity risk awareness trainings during onboarding and on an annual basis thereafter. 122 Table of Contents As necessary and appropriate, we engage consultants, or other third parties, in connection with our cybersecurity risk assessment processes.
Removed
We face a number of cybersecurity risks in connection with our business.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe also continue to lease approximately 23,189 of space at 6 Tide Street, our previous headquarters. The lease expires in November 2025, subject to an option to extend the lease for three additional years.
Biggest changeWe also continue to lease approximately 23,189 square feet of space at 6 Tide Street in Boston, Massachusetts, our previous headquarters. The lease expires in November 2025, subject to an option to extend the lease for three additional years.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. Legal Proceedings 123 Table of Contents From time to time, we may become involved in litigation or other legal proceedings arising in the ordinary course of our business.
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Item 3. Legal Proceedings From time to time, claims are made against the Company in the ordinary course of business, which could result in litigation. Claims and associated litigation are subject to inherent uncertainties, and unfavorable outcomes could occur.
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While the outcome of any such proceedings cannot be predicted with certainty, as of December 31, 2023, we were not a party to any litigation or legal proceedings that, in the opinion of our management, are probable to have a material adverse effect on our business.
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In the opinion of management, the resolution of these matters, if any, will not have a material adverse impact on the Company’s financial position or results of operations.
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Regardless of outcome, litigation can have an adverse impact on our business, financial condition, results of operations and prospects because of defense and settlement costs, diversion of management resources and other factors . Item 4. Mine Safety Disclosures Not applicable. 124 Table of Contents PART II
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On February 7, 2025, OSIF filed a complaint in the United States District Court for the Southern District of Ohio against us, alleging claims for breach of contract related to the License Agreement, by and between us and OSIF, dated as of December 14, 2018, as amended.
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The dispute concerns our payment of sublicensing fees to OSIF arising from the Sublicense Agreement. The complaint seeks compensatory damages, pre-judgment and post-judgment interest, and attorneys' fees and costs, as well as an order for specific performance. We dispute OSIF’s claims and intend to vigorously 105 Table of Contents defend against the claims.
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We and OSIF are in discussions concerning mediation of their disputes and, pending agreement on mediation procedures, plan to ask the Court to stay or extend deadlines in the litigation pending the parties’ mediation. Item 4. Mine Safety Disclosures Not applicable. 106 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeUse of Proceeds from Initial Public Offering of Common Stock In November 2021, the Company completed its initial public offering (IPO) in which the Company issued and sold 10,436,250 shares of its common stock, including 1,361,250 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $20.00 per share .
Biggest changeUse of Proceeds from Initial Public Offering of Common Stock In November 2021, the Company completed its initial public offering ( “ IPO ” ) in which the Company issued and sold 10,436,250 shares of its common stock, including 1,361,250 shares pursuant to the full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $20.00 per share .
All of the shares of common stock issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1, as amended (File No. 333-260160), which was declared effective by the Securities and Exchange Commission (the SEC) on October 28, 2021. Goldman Sachs & Co.
All of the shares of common stock issued and sold in our IPO were registered under the Securities Act pursuant to a registration statement on Form S-1, as amended (File No. 333-260160), which was declared effective by the Securities and Exchange Commission (the “SEC”) on October 28, 2021. Goldman Sachs & Co.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers 125 Table of Contents None. Item 6. Reserved Not Applicable.
Purchases of Equity Securities by the Issuer or Affiliated Purchasers 107 Table of Contents None. Item 6. Reserved Not Applicable.
Holders of Our Common Stock As of March 6, 2024, there were approximately 26 stockholders of record of our common stock. The actual number of stockholders is greater than the number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.
Holders of Our Common Stock As of February 20, 2025, there were approximately 20 stockholders of record of our common stock. The actual number of stockholders is greater than the number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees.

Item 7. Management's Discussion & Analysis

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

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Biggest changeThe increase of $33.3 million in research and development expenses was primarily attributable to: • an increase of $19.6 million in internal costs driven by increased headcount in our research and development function, inclusive of stock-based compensation expense of $6.2 million and $4.2 million for the years ended December 31, 2023 and 2022, respectively, and increased facilities costs to support our expanding operations; and • an increase of $13.7 million in external costs primarily driven by higher costs incurred as we advance our preclinical activities for our ENTR-601-45 and other preclinical and discovery programs.
Biggest changeThe increase of $25.4 million in research and development expenses was primarily attributable to: • an increase of $10.8 million in direct research and development costs primarily driven by additional activities performed to advance our DMD programs and discovery work for future product candidates; 114 Table of Contents • an increase of 10.5 million in personnel related costs driven by increased headcount in our research and development function, inclusive of stock-based compensation expense of $7.8 million and $6.2 million for the years ended December 31, 2024 and 2023, respectively; and • an increase of $4.1 million in facility related and other costs to support our expanding operations.
Our future capital requirements will depend on many factors, including costs associated with: • the continuation of our current research programs and our preclinical development of therapeutic candidates from our current research programs; • seeking to identify additional research programs and additional therapeutic candidates; • advancing our existing and future therapeutic candidates into clinical development; • initiating preclinical studies and clinical trials for any therapeutic candidates we identify and develop or expand development of existing programs into additional indications; • maintaining, expanding, enforcing, defending and protecting our intellectual property portfolio and providing reimbursement of third-party expenses related to our patent portfolio; • timing of manufacturing for our therapeutic candidates and commercial manufacturing if any therapeutic candidate is approved; • establishing and maintaining clinical and commercial supply for the development and manufacture of our therapeutic candidates; • seeking regulatory and marketing approvals for any of our therapeutic candidates that we develop, if any; • seeking to identify, establish and maintain additional collaborations and license agreements, and the success of those collaborations and license agreements; • ultimately establishing a sales, marketing and distribution infrastructure to commercialize any platforms for which we may obtain marketing approval, either by ourselves or in collaboration with others; 135 Table of Contents • generating revenue from commercial sales of therapeutic candidates we may develop for which we receive marketing approval; • hiring additional personnel including research and development, clinical and commercial personnel; • adding operational, financial and management information systems and personnel, including personnel to support our product development; • achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; • acquiring or in-licensing products, intellectual property and technologies; and • the ongoing costs of operating as a public company and recent increases in inflationary rates.
Our future capital requirements will depend on many factors, including costs associated with: • the continuation of our current research programs and our preclinical development of therapeutic candidates from our current research programs; • seeking to identify additional research programs and additional therapeutic candidates; • advancing our existing and future therapeutic candidates into clinical development; • initiating preclinical studies and clinical trials for any therapeutic candidates we identify and develop or expand development of existing programs into additional indications; • maintaining, expanding, enforcing, defending and protecting our intellectual property portfolio and providing reimbursement of third-party expenses related to our patent portfolio; • timing of manufacturing for our therapeutic candidates and commercial manufacturing if any therapeutic candidate is approved; • establishing and maintaining clinical and commercial supply for the development and manufacture of our therapeutic candidates; • seeking regulatory and marketing approvals for any of our therapeutic candidates that we develop, if any; • seeking to identify, establish and maintain additional collaborations and license agreements, and the success of those collaborations and license agreements; • ultimately establishing a sales, marketing and distribution infrastructure to commercialize any platforms for which we may obtain marketing approval, either by ourselves or in collaboration with others; • generating revenue from commercial sales of therapeutic candidates we may develop for which we receive marketing approval; • hiring additional personnel including research and development, clinical and commercial personnel; • adding operational, financial and management information systems and personnel, including personnel to support our product development; • achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products; • acquiring or in-licensing products, intellectual property and technologies; and • the ongoing costs of operating as a public company and recent increases in inflationary rates.
We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. We periodically corroborate the accuracy of these estimates with the service providers and make adjustments, if necessary.
We make estimates of our accrued expenses as of each balance sheet date in the consolidated financial statements based on facts and circumstances known to us at that time. We periodically corroborate the accuracy of these estimates with the service providers and make adjustments, as necessary.
We will remain an EGC until the earliest to occur of (i) the last day of the fiscal year following the fifth anniversary of the completion of our IPO, (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous rolling three-year period or (iv) the date on which we are deemed to be a large accelerated filer under the Securities Exchange Act of 1934, as amended (the Exchange Act).
We will remain an EGC until the earliest to occur of (i) the last day of the fiscal year following the fifth anniversary of the completion of our IPO, (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (iii) the date on which we have issued more than $1.0 billion in non-convertible debt during the previous rolling three-year period or (iv) the date on which we are deemed to be a large accelerated filer under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
IDB Sublease The Company subleases a portion of the office and laboratory space leased under the IDB Lease to a third-party (subtenant). The term of the sublease commenced in April 2023. The sublease term is 3 years.
IDB Sublease The Company subleases a portion of the office and laboratory space leased under the IDB Lease to a third-party. The term of the sublease commenced in April 2023. The sublease term is 3 years.
Revenue Recognition All of our revenue to date has been generated from the Vertex Agreement. We account for revenue pursuant to ASC Topic 606, "Revenue from Contracts with Customers" (ASC 606).
Revenue Recognition Substantially all of our revenue to date has been generated from the Vertex Agreement. We account for revenue pursuant to ASC Topic 606, "Revenue from Contracts with Customers" ("ASC 606").
We expect to track these external research and development costs on a program-by-program basis as we identify specific programs and product candidates to advance into clinical development .
We track these external research and development costs on a program-by-program basis as we identify specific programs and product candidates to advance into clinical development .
Subject to certain conditions, as an EGC: • we may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations; • we may avail ourselves of the exemption from providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended (the Sarbanes-Oxley Act); • we may avail ourselves of the exemption from complying with any requirement that may be adopted by the Public Company Accounting Oversight Board (PCAOB) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis; • we may provide reduced disclosure about our executive compensation arrangements; and • we may not require nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments.
Subject to certain conditions, as an EGC: • we may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations; • we may avail ourselves of the exemption from providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”); • we may avail ourselves of the exemption from complying with any requirement that may be adopted by the Public Company Accounting Oversight Board (“PCAOB”) regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis; • we may provide reduced disclosure about our executive compensation arrangements; and • we may not require nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments.
The fixed rental rate is $0.5 million per month for the remainder of the lease term. For additional information about our lease commitments, see Note 11, Leases , to our consolidated financial statements included elsewhere in this Annual Report.
The fixed rental rate is $0.4 million per month for the remainder of the lease term. For additional information about our lease commitments, see Note 11, Leases , to our consolidated financial statements included elsewhere in this Annual Report.
Milestone payments under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable. 128 Table of Contents Our research and development costs are primarily devoted to supporting our neuromuscular program development and platform discovery efforts.
Milestone payments under license agreements are accrued, with a corresponding expense being recognized, in the period in which the milestone is determined to be probable of achievement and the related amount is reasonably estimable. Our research and development costs are primarily devoted to supporting our neuromuscular program development and platform discovery efforts.
These expenses include: • personnel-related expenses, including salaries, related benefits and stock-based compensation expense for individuals engaged in research and development functions; • expenses incurred in connection with the discovery and preclinical development of our therapeutic candidates and research programs, including under agreements with third parties, such as consultants, contractors and CROs; • the cost of developing and validating our manufacturing process for use in our preclinical studies and potential future clinical trials, including the cost of raw materials used in our research and development activities and engaging with third party CMOs; • costs incurred in connection with the performance of research and development activities under the Vertex Agreement; • the cost of laboratory supplies and research materials; • the costs of payments made under third-party licensing agreements and related future payments should certain development and regulatory milestones be achieved; and • facilities, depreciation and other direct and allocated expenses, including rent and other operating costs, incurred as a result of our research and development activities.
These expenses include: 109 Table of Contents • personnel-related expenses, including salaries, related benefits and stock-based compensation expense for individuals engaged in research and development functions; • expenses incurred in connection with our research programs and development of our therapeutic candidates and research programs, including under agreements with third parties, such as consultants, contractors and CROs to conduct preclinical studies and clinical trials; • the cost of developing and validating our manufacturing process for use in our preclinical studies and potential future clinical trials, including the cost of raw materials used in our research and development activities and engaging with third party CMOs; • costs incurred in connection with the performance of research and development activities under the Vertex Agreement; • the cost of laboratory supplies and research materials; • the costs of payments made under third-party licensing agreements and related future payments should certain development and regulatory milestones be achieved; and • facilities, depreciation and other direct and allocated expenses, including rent and other operating costs, incurred as a result of our research and development activities.
Until such time, if ever, as we can generate substantial product revenue to support our cost structure, we expect to finance our cash needs through a combination of equity offerings, debt financings, license and collaboration agreements and other similar arrangements.
Until such time, if ever, as we can generate substantial product revenue to support our cost structure, we expect to finance our cash needs through a combination of equity offerings, debt financings, license and collaboration agreements 117 Table of Contents and other similar arrangements.
Examples of estimated accrued research and development expenses include those related to fees paid to: • vendors in connection with discovery and preclinical development activities; • CROs in connection with preclinical studies and testing; and • third-party manufacturers in connection with the development and scale up activities and the production of materials.
Examples of estimated accrued research and development expenses include those related to fees paid to: • vendors in connection with discovery and preclinical development activities; • CROs in connection with the ELEVATE clinical studies; and • third-party manufacturers in connection with the development and scale up activities and the production of materials.
At the end of each subsequent reporting period, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price.
At the end of each 112 Table of Contents subsequent reporting period, the Company re-evaluates the estimated variable consideration included in the transaction price and any related constraint, and if necessary, adjusts its estimate of the overall transaction price.
The Practice Aid identifies various available methods for allocating the enterprise value across classes of series of capital stock in determining the fair value of our common stock at each valuation date.
The Practice Aid identifies various available methods for allocating the enterprise value across classes of series of capital stock 113 Table of Contents in determining the fair value of our common stock at each valuation date.
This is due to the numerous risks and uncertainties associated with product development, including the following: • the scope, timing, rate of progress and expenses of our ongoing and potential future research activities, including preclinical and IND-enabling studies, clinical trials and other research and development activities we decide to pursue; • the successful initiation, enrollment and completion of clinical trials under current good clinical practices; • the timing of filing and acceptance of INDs or comparable foreign applications that allow commencement of future clinical trials for our therapeutic candidates; • the timing and likelihood of resolution of the clinical hold on our IND application for ENTR-601-44 and initiation of clinical trials for ENTR-601-44 in the United States; • whether our therapeutic candidates show safety and efficacy in our clinical trials and an acceptable risk-benefit profile in the intended populations; • our ability to hire and retain key research and development personnel; • our ability to successfully develop, obtain regulatory and marketing approvals of our therapeutic candidates for the expected indications and patient populations; • our ability to establish and maintain agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our therapeutic candidates are approved; • commercializing therapeutic candidates, if and when approved, whether alone or in collaboration with others; • our ability to maintain a continued acceptable safety, tolerability and efficacy profile of our therapeutic candidates following approval; • our ability to establish new licensing or collaboration arrangements to support our potential therapeutic candidates on favorable business terms; • any decisions we make to discontinue, delay or modify our programs to focus on others; • obtaining, maintaining, protecting and enforcing patent and trade secret protection and regulatory exclusivity for our therapeutic candidates; 129 Table of Contents • obtaining and maintaining adequate coverage and reimbursement from third party payors; and • the effects of worldwide pandemics and health crises.
This is due to the numerous risks and uncertainties associated with product development, including the following: • the scope, timing, rate of progress and expenses of our ongoing and potential future research activities, including preclinical and IND-enabling studies, clinical trials and other research and development activities we decide to pursue; 110 Table of Contents • the successful initiation, enrollment and completion of clinical trials under current good clinical practices; • the timing of filing and acceptance of INDs or comparable foreign applications that allow commencement of future clinical trials for our therapeutic candidates; • whether our therapeutic candidates show safety and efficacy in our clinical trials and an acceptable risk-benefit profile in the intended populations; • our ability to hire and retain key research and development personnel; • our ability to successfully develop, obtain regulatory and marketing approvals of our therapeutic candidates for the expected indications and patient populations; • our ability to establish and maintain agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our therapeutic candidates are approved; • commercializing therapeutic candidates, if and when approved, whether alone or in collaboration with others; • our ability to maintain a continued acceptable safety, tolerability and efficacy profile of our therapeutic candidates following approval; • our ability to establish new licensing or collaboration arrangements to support our potential therapeutic candidates on favorable business terms; • any decisions we make to discontinue, delay or modify our programs to focus on others; • obtaining, maintaining, protecting and enforcing patent and trade secret protection and regulatory exclusivity for our therapeutic candidates; and • obtaining and maintaining adequate coverage and reimbursement from third party payors.
These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (Practice Aid).
These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation (“Practice Aid”).
A significant portion of the taxable income related to the collaboration payment is offset by current year expenses and prior year accumulated losses. For additional details about the current year tax provision, refer to Note 9, Income Taxes , to the Consolidated Financial Statements appearing elsewhere in this Annual Report on Form 10-K.
For both periods, a significant portion of the taxable income related to the collaboration payments was offset by current year expenses and prior year accumulated losses. For additional details about the current year tax provision, refer to Note 9, Income Taxes , to the Consolidated Financial Statements appearing elsewhere in this Annual Report on Form 10-K.
In September 2023, we entered into a sales agreement (Sales Agreement) with Cowen and Company, LLC (Cowen) under which we may, from time to time, issue and sell shares of our common stock having aggregate sales proceeds of up to $150.0 million, in a series of one or more ATM equity offerings (the 2023 ATM Program).
In September 2023, we entered into a sales agreement (“Sales Agreement”) with Cowen and Company, LLC (“Cowen”) under which we may, from time to time, issue and sell shares of our common stock having aggregate sales proceeds of up to $150.0 million, in a series of one or more ATM equity offerings (the “2023 ATM Program”).
As of December 31, 2023 and 2022, we had an accumulated deficit of $195.0 million and $188.3 million , respectively. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future as we advance our platform and EEV therapeutic candidates.
As of December 31, 2024 and 2023, we had an accumulated deficit of $129.3 million and $195.0 million, respectively. We expect to generate operating losses and negative operating cash flows for the foreseeable future as we advance our platform and EEV therapeutic candidates.
As of December 31, 2023, we had federal net operating loss carryforwards of $14.6 million , which may be available to offset future taxable income. None of our federal net operating loss carryforwards will expire, but all are limited in their usage to an annual deduction equal to 80% of annual taxable income.
As of December 31, 2024, we had federal net operating loss carryforwards of $4.2 million , which may be available to offset future taxable income. None of our federal net operating loss carryforwards will expire, but all are limited in their usage to an annual deduction equal to 80% of annual taxable income.
If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations. 127 Table of Contents As of December 31, 2023, we had cash, cash equivalents and marketable securities of $352.0 million .
If we fail to become profitable or are unable to sustain profitability on a continuing basis, we may be unable to continue our operations at planned levels and be forced to reduce or terminate our operations. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $420.0 million .
Since our inception, we have raised over $650 million of gross proceeds from sales of stock to leading biotechnology investors and from the Vertex Agreement. As of December 31, 2023, we had cash, cash equivalents and marketable securities of $352.0 million .
Since our inception, we have raised over $850.0 million of gross proceeds from sales of stock to leading biotechnology investors and from the Vertex Agreement. As of December 31, 2024, we had cash, cash equivalents and marketable securities of $420.0 million.
In addition, as of December 31, 2023, we had state net operating loss carryforwards of $8.7 million , which may be available to offset future taxable income and expire at various dates beginning in 2036.
In addition, as of December 31, 2024, we had state net operating loss carryforwards of $6.0 million , which may be available to offset future taxable income and expire at various dates beginning in 2036.
As of December 31, 2023, we also had federal and state research and development tax credit carryforwards of $2.1 million and $0.8 million , respectively, which may be available to reduce future tax liabilities and expire at various dates beginning in 2039 and 2035, respectively.
As of December 31, 2024, we also had federal and state research and development tax credit carryforwards of $3.4 million and $1.5 million , respectively, which may be available to reduce future tax liabilities and expire at various dates beginning in 2039 and 2035, respectively.
Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation. Emerging Growth Company and Smaller Reporting Company Status We are an “emerging growth company,” or EGC, under the Jumpstart Our Business Startups Act of 2012 (the JOBS Act).
Payments due upon cancellation consist only of payments for services provided or expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation. 118 Table of Contents Emerging Growth Company and Smaller Reporting Company Status We are an “emerging growth company”, or “EGC”, under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).
Since our IPO, we have determined the fair market value of our common stock using the closing price of our common stock as reported on the Nasdaq Global Market. Subsequent to the IPO, the fair value of the common stock underlying our stock-based awards is the closing price of our common stock on the date of grant.
Since our IPO, we have determined the fair market value of our common stock using the closing price of our common stock as reported on the Nasdaq Global Market on the date of grant.
License Agreements 136 Table of Contents We have also entered into a license agreement (OSIF License Agreement) with Ohio State Innovation Foundation (OSIF), an affiliate of The Ohio State University (OSU), under which we are obligated to make specific milestone and royalty payments.
License Agreements We have also entered into a license agreement (“OSIF License Agreement”) with Ohio State Innovation Foundation (“OSIF”), an affiliate of The Ohio State University (“OSU”), under which we are obligated to make specific milestone and royalty payments.
Components of Our Results of Operations Revenue All of our revenue to date has been derived from the Vertex Agreement. We do not expect to generate any revenue from the sale of products unless and until such time that our product candidates have advanced through clinical development and regulatory approval, if ever.
We do not expect to generate any revenue from the sale of products unless and until such time that our product candidates have advanced through clinical development and regulatory approval, if ever.
General and Administrative Expenses General and administrative expenses for the year ended December 31, 2023 were $32.3 million , compared to $30.6 million for the year ended December 31, 2022.
General and Administrative Expenses General and administrative expenses for the year ended December 31, 2024 were $38.5 million , compared to $32.3 million for the year ended December 31, 2023.
Our actual results may differ from these estimates under different assumptions or conditions. 130 Table of Contents While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Investing Activities Net cash used in investing activities was $138.4 million for the year ended December 31, 2023, consisting primarily of $407.2 million in purchases of marketable securities, partially offset by $274.4 million from the maturities of marketable securities, and $5.6 million in purchases of property and equipment. 134 Table of Contents Net cash used in investing activities was $148.7 million for the year ended December 31, 2022, consisting primarily of $222.0 million in purchases of marketable securities, partially offset by $76.2 million from the maturities of marketable securities, and $2.9 million from purchases of property and equipment.
Net cash used in investing activities was $138.4 million for the year ended December 31, 2023, and was driven by $407.2 million in purchases of marketable securities and $5.6 million from purchases of property and equipment, , which were partially offset by $274.4 million from the maturities of marketable securities.
Since our inception, we have devoted substantially all our resources to research and development efforts relating to our EEV Platform, advancing development of our portfolio of programs and general and administrative support for these operations, including raising capital.
Since our inception, we have devoted substantially all our resources to research and development efforts relating to our EEV Platform, advancing development of our portfolio of programs and general and administrative support for these operations, including raising capital. We have raised over $850.0 million of gross proceeds from equity sales to leading biotechnology investors and from the Vertex Agreement.
Our operating expenses and future funding requirements are expected to increase substantially as we continue to advance our portfolio of programs.
In addition, we expect to incur additional costs associated with operating as a public company. Our operating expenses and future funding requirements are expected to increase substantially as we continue to advance our portfolio of programs.
Net cash provided by financing activities wa s $0.5 million for the year ended December 31, 2022, consisting of $0.2 million of proceeds from stock option exercises and $0.3 million from the issuance of common stock under our employee stock purchase plan.
Financing Activities Net cash provided by financing activities was $103.0 million for the year ended December 31, 2024, consisting of $99.6 million in net proceeds from sales of our common stock and pre-funded warrants, $2.8 million proceeds from stock option exercises and $0.6 million from the issuance of common stock under our 2021 Employee Stock Purchase Plan (the “ESPP”).
We record these as prepaid expenses on our consolidated balance sheets. Stock-Based Compensation We account for all stock-based compensation awards granted as stock-based compensation expense at fair value in accordance with FASB ASC Topic 718, Compensation—Stock Compensation (ASC 718) . Our stock-based payments include stock options and grants of common stock restricted for vesting conditions.
Stock-Based Compensation We account for all stock-based compensation awards granted as stock-based compensation expense at fair value in accordance with FASB ASC Topic 718, Compensation—Stock Compensation (ASC 718) . Our stock-based payments include stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”).
The increase of $1.7 million was primarily attributable to the following: • a $2.3 million increase in personnel-related costs, primarily as a result of the increase in headcount in our general and administrative function, inclusive of stock-based compensation expense of $6.9 million an d $5.7 million for the years ended December 31, 2023 and 2022, respectively; • a $1.3 million decrease in professional services costs; • a $0.4 million increase in facility and equipment-related expenses in connection with the operating lease for our corporate headquarters; and Interest and Other Income Total interest and other income was $15.2 million for the year ended December 31, 2023 , compared to $2.6 million of interest and other income for the year ended December 31, 2022.
The increase of $6.2 million was primarily attributable to the following: • a $5.9 million increase in personnel-related costs, primarily as a result of the increase in headcount in our general and administrative function, inclusive of stock-based compensation expense of $10.1 million an d $6.9 million for the years ended December 31, 2024 and 2023, respectively.
The Company’s common stock will be sold at prevailing market prices at the time of the sale, and as a result, prices may vary. As of December 31, 2023, we have not sold any shares of common stock under the ATM program.
Our common stock will be sold at prevailing market prices at the time of the sale, and as a result, prices may vary.
We expect that our research and development expenses will increase as we continue our current research and development activities, continue clinical trials for ENTR-601-44 and our partnered candidate, VX-670, initiate new research programs, continue our preclinical development of therapeutic candidates, and progress ENTR-601-45, ENTR-601-50, and future product candidates, into clinical trials.
We expect that our research and development expenses will increase as we advance ENTR-601-44 and ENTR-601-45 through clinical trials, progress ENTR-601-50 and ENTR-601-51 through preclinical development and into clinical trials, and continue to perform discovery work for future product candidates.
Cash Flows The following table summarizes our cash flows for each of the periods presented: Year Ended December 31, (in thousands) 2023 2022 Net cash provided by (used in) operating activities $ 139,803 $ (93,786) Net cash used in investing activities (138,395) (148,650) Net cash provided by financing activities 21,037 479 Net increase (decrease) in cash, cash equivalents and restricted cash $ 22,445 $ (241,957) Operating Activities For the year ended December 31, 2023, net cash provided by operating activities was $139.8 million , driven by our net loss of $6.7 million, a net cash increase from changes in our operating assets and liabilities of $136.3 million, which was primarily related to the upfront and milestone payment received from Vertex , and adjustments for non-cash items, primarily relating to stock-based compensation expense of $13.1 million, depreciation expense of $2.8 million, and net accretion of premiums and discounts on marketable securities of $5.7 million .
Cash Flows The following table summarizes our cash flows for each of the periods presented: Year Ended December 31, (in thousands) 2024 2023 Net cash (used in) provided by operating activities $ (41,557) $ 139,803 Net cash used in investing activities (27,798) (138,395) Net cash provided by financing activities 102,964 21,037 Net increase in cash, cash equivalents and restricted cash $ 33,609 $ 22,445 Operating Activities For the year ended December 31, 2024, net cash used in operating activities was $41.6 million , and was driven by our net income of $65.6 million, net cash used in changes in our operating assets and liabilities of $118.9 million, adjustments for non-cash expenses relating to stock-based compensation expense of $17.9 million and depreciation expense of $3.8 million, and adjustments for non-cash income relating to accretion of premiums and discounts on marketable securities of $10.0 million .
We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of our candidates, we are unable to estimate the exact amount of our working capital requirements.
Because of the numerous risks and uncertainties associated with research, development and commercialization of our candidates, we are unable to estimate the exact amount of our working capital requirements.
For the year ended December 31, 2022, net cash used in operating activities was $93.8 million , consisting primarily of our net loss of $94.6 million, a net cash decrease from changes in our operating assets and liabilities of $11.1 million , and adjustments for non-cash items, primarily relating to stock-based compensation expense of $9.9 million, depreciation expense of $1.9 million, and net amortization of premiums and discounts of $0.1 million on marketable securities.
For the year ended December 31, 2023, net cash provided by operating activities was $139.8 million , and was driven by our net loss of $6.7 million, net cash provided by changes in our operating assets and liabilities of $136.3 million , adjustments for non-cash expenses relating to stock-based compensation expense of $13.1 million and depreciation expense of $2.8 million, and adjustments for non-cash income related to net amortization of premiums and discounts of $5.7 million on marketable securities.
Income Taxes The Company recorded income tax expense of $18.7 million for the year ended December 31, 2023. The income tax expense recorded was driven largely by the current tax liability associated with the tax recognition of the Vertex Agreement payments received during 2023.
The income tax expense recorded for the year ended December 31, 2023 was driven largely by the current tax liability associated with the tax recognition of the upfront payment received pursuant to the Vertex Agreement and the capitalization of research and development expenses under Section 174.
We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future as we advance our platform and EEV therapeutic candidates. We will not generate any revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for one or more therapeutic candidates, if ever.
We will not generate any revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for one or more therapeutic candidates, if ever. If we obtain regulatory approval for any therapeutic candidates, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing and distribution.
If we obtain regulatory approval for any therapeutic candidates, we expect to incur significant expenses related to developing our internal commercialization capability to support product sales, marketing and distribution. Furthermore, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses.
Furthermore, we expect to continue to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses.
This increase is primarily driven by higher interest rates and larger investments in debt securities. Provision for Income Taxes 133 Table of Contents The Company recorded an income tax expense of $18.7 million for the year ended December 31, 2023.
Interest and Other Income Total interest and other income was $19.5 million for the year ended December 31, 2024 , compared to $15.2 million of interest and other income for the year ended December 31, 2023. This increase is primarily driven by higher interest rates and larger investments in debt securities.
Financing Activities Net cash provided by financing activities was $21.0 million for the year ended December 31, 2023, consisting of $19.4 million in net proceeds from the issuance of 1,618,613 shares in connection with the Vertex Agreement, $1.2 million proceeds from stock option exercises and $0.4 million from the issuance of common stock under our employee stock purchase plan.
Net cash provided by financing activities wa s $21.0 million for the year ended December 31, 2023, consisting of $19.4 million in net proceeds from sales of our common stock in connection with the Vertex Agreement, $1.2 million of proceeds from stock option exercises and $0.4 million from the issuance of common stock under the ESPP. 116 Table of Contents Funding Requirements We expect to incur significant expenses and operating losses for the foreseeable future as we advance the preclinical and, if successful, the clinical development of our programs.
We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” To finance our operations beyond that point we will need to raise additional capital, which cannot be assured.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources.” To finance our operations beyond that point we will need to raise additional capital, which cannot be assured. Components of Our Results of Operations Revenue Substantially all of our revenue to date has been derived from the Vertex Agreement.
The income tax expense was driven largely by the current tax liability associated with the tax recognition of the Vertex Agreement payments received during 2023. The Company reported no income tax expense for the year ended December 31, 2022. Liquidity and Capital Resources Sources of Liquidity Since our inception in 2016, we have incurred significant operating losses.
For both periods, a significant portion of the taxable income related to the collaboration payments was offset by current year expenses and prior year accumulated losses. Liquidity and Capital Resources Sources of Liquidity Since our inception in 2016, we have incurred significant operating losses.
While the majority of our service providers invoice us in arrears for services performed, on a pre-determined schedule or when contractual milestones are met, some require advance payments. There may be instances in 131 Table of Contents which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense.
There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. We record these as prepaid expenses on our consolidated balance sheets.
The measurement date for awards is the date of grant, and stock-based compensation costs are recognized as expense over the requisite service period, which is generally the vesting period, on a straight-line basis. Stock-based compensation expense is classified in the accompanying consolidated statements of operations based on the function to which the related services are provided.
Compensation expense related to stock option awards and RSUs awards with only service-based vesting is recognized over the requisite service period, which is generally the vesting period, on a straight-line basis. For PSUs, which also contain performance based vesting criteria, we recognize stock-based compensation expense over the requisite service period using the accelerated attribution method once achievement is probable.
Since our inception, we have raised over $650.0 million of gross proceeds from sales of stock to leading biotechnology investors and from the Vertex Agreement. Since inception, we have incurred significant net losses. As of December 31, 2023, we had an accumulated deficit of $195.0 million.
Since inception, we have incurred significant net losses. As of December 31, 2024, we had an accumulated deficit of $129.3 million. We expect to generate operating losses and negative operating cash flows for the foreseeable future as we advance our platform and EEV therapeutic candidates.
Removed
The Company’s Endosomal Escape Vehicle (EEV™)-therapeutics are designed to enable the efficient delivery of a wide range of therapeutics into a variety of organs and tissues, resulting in an improved therapeutic index. Through our proprietary, highly versatile and modular EEV platform (EEV Platform), we are building a robust development portfolio of therapeutic candidates.
Added
We enter 2025 with significant momentum, including the planned initiation of our next clinical trial of ENTR-601-44, regulatory submissions under review for ENTR-601-45, and the ongoing progress of our VX-670 partnership with Vertex Pharmaceuticals Incorporated (“Vertex”). We plan to have four clinical programs in patients ongoing by the end of 2025, marking a new phase in the Company’s growth.
Removed
Our first two drug candidates are in clinical trials, and we expect to initiate additional regulatory filings by the end of 2024. We believe that the potential success of our early programs can translate into the efficient development of additional EEV therapeutic candidates and allow us to build portfolios in neuromuscular disease and beyond.
Added
This regulatory progress follows positive preliminary data in healthy volunteers from a Phase 1 clinical trial, ENTR-601-44-101, reported in 2024. Key business updates include: • In 2024, we submitted regulatory applications to initiate global Phase 1/2 MAD clinical studies in patients for ENTR-601-44 in the United States, United Kingdom and Europe.
Removed
Our most advanced therapeutic candidate, ENTR-601-44, is being developed for patients with DMD that are exon 44 skipping amenable. On July 24, 2023, we received authorization from the MHRA for our Phase 1 clinical trial in healthy volunteers, ENTR-601-44-101.
Added
We have also submitted regulatory applications to initiate a Phase 1/2 MAD clinical study of ENTR-601-45 in the United Kingdom and Europe for patients living with DMD who are amenable to exon 45 skipping. • On February 3, 2025, we announced the receipt of authorization from the United Kingdom’s Medicines and Healthcare Products Regulatory Agency (“MHRA”) and Research Ethics Committee for its Clinical Trial of an Investigational Medicinal Product to initiate ELEVATE-44-201, a Phase 1/2 multiple ascending dose (“MAD”) clinical study of ENTR-601-44 for the potential treatment of Duchenne muscular dystrophy (“Duchenne” or “DMD”) in patients with a confirmed mutation in the DMD gene amenable to exon 44 skipping.
Removed
The Phase 1 clinical trial's primary objective is to evaluate the safety and tolerability of a single dose of ENTR-601-44 in healthy volunteers, with a target enrollment of approximately 40 participants.
Added
We are on track to initiate ELEVATE-44-201 in the United Kingdom in the second quarter of 2025. • On February 24, 2025, we announced that the United States Food and Drug Administration (“FDA”) had lifted the clinical hold on the Investigational New Drug application (“IND”) for ENTR-601-44, and we received authorization to initiate ELEVATE-44-102, a Phase 1b MAD clinical study of ENTR-601-44 in adult DMD patients.
Removed
The trial will also evaluate pharmacokinetics and target engagement as measured by exon skipping in the skeletal muscle, bearing the Company's recent in vitro data showed that exon skipping was approximately 10-40x higher in dystrophic muscle compared to healthy muscle, suggesting that data from healthy normal volunteers may substantially underestimate potential potency.
Added
The Company plans to initiate study enrollment in the first half of 2026. • Based on the positive preclinical data, we are on track to submit regulatory applications to initiate a clinical trial of our third Duchenne product candidate, ENTR-601-50, in patients who are exon 50 skipping amenable, in the fourth quarter of 2025. • In 2024, we selected ENTR-601-51 as our clinical candidate for our exon 51 program in patients who are exon 51 skipping amenable, and expect to submit global regulatory filings in 2026. • Our Vertex partnered candidate, VX-670, is in an ongoing global Phase 1/2 clinical trial, and in November 2024, Vertex announced completion of the Phase 1 SAD portion of the study and initiation of the Phase 2 MAD portion to evaluate both safety and efficacy. • We have also generated positive preclinical data from programs outside of our neuromuscular franchise, which include new moieties, and expect to share our first clinical candidate in ocular disease later in 2025. 108 Table of Contents We believe that the potential success of our early programs can translate into the efficient development of additional therapeutic candidates and allow us to build portfolios in neuromuscular disease and beyond.
Removed
On March 13, 2024, we announced that the first, second and third cohorts of participants had been successfully dosed and we expect to report data from the Phase 1 clinical trial in the second half of 2024.
Added
Based on our current operating plans, we believe that our cash, cash equivalents and marketable securities as of December 31, 2024 will be sufficient to fund our operations into the second quarter of 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
Removed
The data from this trial will inform our global clinical development strategy, and if favorable, support regulatory filings to open a global multiple ascending dose (MAD) Phase 2 trial in the fourth quarter of 2024. It is expected that countries will be included in the trial on a rolling basis, as dependent on discussions with individual regulators.
Added
Income Taxes The Company recorded income tax expense of $0.9 million for the year ended December 31, 2024 and income tax expense of $18.7 million for the year ended December 31, 2023.
Removed
On December 19, 2022, we announced that we received a clinical hold notice from the FDA regarding the IND application for ENTR-601-44. The FDA has requested that we continue to gather and submit additional information regarding ENTR-601-44 and we are actively working to resolve the clinical hold in the United States.
Added
The income tax expense recorded for the year ended 111 Table of Contents December 31, 2024 was driven largely by the current tax liability associated with the $75.0 million payment for the achievement of the clinical advancement milestone for VX-670 and $1.7 million in related interest owed to taxing authorities pursuant to Section 453A.
Removed
On January 9, 2023, we announced the selection of a second clinical candidate within our Duchenne franchise, ENTR-601-45, for the potential treatment of people living with DMD who are exon 45 skipping amenable. We plan to submit a CTA/IND application for ENTR-601-45 in the fourth quarter of 2024.
Added
Our actual results may differ from these estimates under different assumptions or conditions.
Removed
On November 7, 2023, we announced the selection of a third clinical candidate within our Duchenne franchise, ENTR-601-50, for the potential treatment of people living with DMD who are exon 50 skipping amenable. The selection of ENTR-501-50 is based on in vivo preclinical data that demonstrated robust exon 50 skipping across cardiac and skeletal muscle groups.
Added
We estimate the fair value of stock options granted using the Black-Scholes option-pricing model (“Black-Scholes”) for stock option grants to both employees and non-employees. The fair value of the Company’s common stock is used to determine the fair value of RSUs and PSUs. The Company’s stock-based compensation awards are subject to service-based vesting conditions.
Removed
We plan to submit a CTA/IND application for ENTR-601-50 in 2025.
Added
Stock-based compensation expense is classified in the accompanying consolidated statements of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.
Removed
We have also entered into a Strategic Collaboration and License Agreement, which was amended in October 2023, (the Vertex Agreement) with Vertex Pharmaceuticals Incorporated (Vertex) pursuant to which we granted Vertex an exclusive worldwide license to research, develop, manufacture and commercialize VX-670, our intracellular EEV-based 126 Table of Contents therapeutic candidate for the treatment of myotonic dystrophy type 1 (DM1) that targets expanded CUG repeats in DM1 protein kinase (DMPK) mRNA transcripts, as well as any additional EEV-based therapeutic candidates that may be identified by the Company for the potential treatment of DM1 in the course of the parties’ global research collaboration.
Added
Recently Issued Accounting Pronouncements See Note 2, Summary of Significant Accounting Policies , in the notes to our consolidated financial statements included elsewhere in this Annual Report for a description of recent accounting pronouncements applicable to our business.
Removed
The Vertex Agreement provides for a four-year global research collaboration under which Vertex will fund our continued preclinical development of VX-670, as well as the option to fund additional DM1-related research activities with a goal of identifying other EEV-based therapeutic product candidates for the potential treatment of DM1.
Added
Results of Operations Comparison of the years ended December 31, 2024 and 2023 Year ended December 31, (in thousands) 2024 2023 Change Collaboration revenue $ 210,782 $ 129,013 $ 81,769 Operating expenses: Research and development 125,306 99,884 25,422 General and administrative 38,465 32,291 6,174 Total operating expenses 163,771 132,175 31,596 Income (loss) from operations 47,011 (3,162) 50,173 Other income: Interest and other income 19,474 15,218 4,256 Total other income 19,474 15,218 4,256 Income before provision for income taxes $ 66,485 $ 12,056 $ 54,429 Provision for income taxes (859) (18,741) 17,882 Net income (loss) $ 65,626 $ (6,685) $ 72,311 Research and Development Expenses Year ended December 31, (in thousands) 2024 2023 Change Direct research and development expenses ENTR-601-44 $ 13,109 $ 10,043 $ 3,066 ENTR-601-45 8,584 9,782 (1,198) ENTR-601-50 10,851 3,016 7,835 ENTR-601-51 1,345 1,531 (186) Collaboration services 12,074 11,970 104 Other preclinical and discovery 7,926 6,712 1,214 Unallocated research and development expenses Personnel related (including stock-based compensation) 41,762 31,250 10,512 Facility related and other 29,655 25,580 4,075 Total research and development expenses $ 125,306 $ 99,884 $ 25,422 Research and development expenses were $125.3 million for the year ended December 31, 2024, compared to $99.9 million for the year ended December 31, 2023.
Removed
Other than our efforts under this research collaboration, Vertex will be responsible for global development, manufacturing and commercialization of the licensed products. Under the terms of the Vertex Agreement, Entrada received $250.0 million from the Vertex agreement comprised of an upfront payment of $223.7 million and an equity investment of $26.3 million in our common stock at $16.26 per share.
Added
Provision for Income Taxes The Company recorded income tax expense of $0.9 million for the year ended December 31, 2024 and income tax expense of $18.7 million for the year ended December 31, 2023.

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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 changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item. 138 Table of Contents
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk As of December 31, 2024, we no longer qualify as a smaller reporting company.
Added
However, in accordance with Item 10(f)(2)(i) of Regulation S-K, we are permitted to apply the scaled disclosure requirements for smaller reporting companies in this Annual Report and are not required to provide the information required under this item.
Added
We will be transitioning to the disclosure requirements applicable to non-smaller reporting companies beginning with our Quarterly Report on Form 10-Q for the fiscal quarter ending March 31, 2025 . 119 Table of Contents

Other TRDA 10-K year-over-year comparisons