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What changed in Lite Strategy, Inc.'s 10-K — 2022 vs 2023

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

+346 added−329 removedSource: 10-K (2023-09-26) vs 10-K (2022-09-08)

Top changes in Lite Strategy, Inc.'s 2023 10-K

346 paragraphs added · 329 removed · 179 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

84 edited+66 added−88 removed93 unchanged
Biggest changeMoreover, even if the FDA approves a product, it may limit the approved indications or populations for use of the product, require that contraindications, warnings, or precautions be included in the product labeling, including a black box warning, impose other conditions, such as post-approval studies, or may not approve label statements that are necessary for successful commercialization and marketing.
Biggest changeMoreover, even if the FDA approves a product, it may limit the approved indications or populations for use of the product, require that contraindications, warnings, or precautions be included in the product labeling, including a black box warning, impose other conditions, such as post-approval studies, or may not approve label statements that are necessary for successful commercialization and marketing. 13 Table of Contents Even after an NDA is approved, the FDA may impose additional obligations or restrictions (such as labeling changes, or clinical post-marketing requirements), or even suspend or withdraw a product approval or require additional testing or label revisions on the basis of data that arise after the product reaches the market, or if compliance with regulatory standards is not maintained.
Sponsors must make certain reports and submissions to FDA and global health authorities, as appropriate, and to clinical investigators who, in turn, make certain reports and submissions to the IRB or ethics committee, including annual reports, and reports of investigator financial interests, serious adverse events and other significant safety information, study amendments, and new study protocols.
Sponsors must make certain reports and submissions to the FDA and global health authorities, as appropriate, and to clinical investigators who, in turn, make certain reports and submissions to the IRB or ethics committee, including annual reports, and reports of investigator financial interests, serious adverse events and other significant safety information, study amendments, and new study protocols.
Under the Regulation, clinical trial sponsors were able to use the Clinical Trials Information System (“CTIS”) since 31 January 2022, but are not obliged to use it immediately, in line with a three-year transition period. National regulators in the EU Member States and EEA countries could use the CTIS since January 31, 2022.
Under the Regulation, clinical trial sponsors were able to use the Clinical Trials Information System (“CTIS”) since January 31, 2022, but are not obliged to use it immediately, in line with a three-year transition period. National regulators in the EU Member States and EEA countries could use the CTIS since January 31, 2022.
Absorption, metabolism, distribution, and excretion testing is generally performed at this stage. • Phase 2: The drug is studied in controlled, exploratory therapeutic trials in a limited number of subjects with the disease or medical condition for which the new drug is intended to be used in order to identify possible adverse effects and safety risks, to determine 14 Table of Contents the preliminary or potential efficacy of the product for specific targeted diseases or medical conditions, and to determine dosage tolerance and the optimal effective dose. • Phase 3: When Phase 2 studies demonstrate that a specific dosage range of the drug may be efficacious and the drug has an acceptable safety profile for further investigation, controlled, large-scale therapeutic Phase 3 trials are undertaken at multiple study sites to demonstrate clinical efficacy and to further test for safety in an expanded patient population.
Absorption, metabolism, distribution, and excretion testing is generally performed at this stage. 12 Table of Contents • Phase 2 : The drug is studied in controlled, exploratory therapeutic trials in a limited number of subjects with the disease or medical condition for which the new drug is intended to be used in order to identify possible adverse effects and safety risks, to determine the preliminary or potential efficacy of the product for specific targeted diseases or medical conditions, and to determine dosage tolerance and the optimal effective dose. • Phase 3 : When Phase 2 studies demonstrate that a specific dosage range of the drug may be efficacious and the drug has an acceptable safety profile for further investigation, controlled, large-scale therapeutic Phase 3 trials are undertaken at multiple study sites to demonstrate clinical efficacy and to further test for safety in an expanded patient population.
The primary objective of the trial was to show proof of ME-344 biologic activity as measured by Ki67 reductions in the presence of the nuclear protein Ki67 (expression of which is strongly associated with tumor cell proliferation and growth) from days 0 to 28 compared to the control group who received bevacizumab alone.
The primary objective of the trial was to show proof of ME-344 biologic activity as measured by reductions in the nuclear protein Ki67 (expression of which is strongly associated with tumor cell proliferation and growth) from days 0 to 28 compared to the control group who received bevacizumab alone.
Drug approval under the accelerated approval regulations may be based on evidence of clinical effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. A post-marketing clinical study will be required to verify clinical benefit, and other restrictions to assure safe use may be imposed.
Drug approval under the accelerated approval regulations may be based on evidence of clinical effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. A post-marketing clinical study will be required to be completed to verify clinical benefit, and other restrictions to assure safe use may be imposed.
Results of pre-clinical and toxicology studies, and clinical trials, as well as detailed information about the manufacturing process, quality control methods, and product composition, among other things, are submitted to the FDA as part of an NDA seeking approval to market and commercially distribute the product on the basis of a determination that the product is safe and effective for its intended use.
Results of nonclinical and toxicology studies, and clinical trials, as well as detailed information about the manufacturing process, quality control methods, and product composition, among other things, are submitted to the FDA as part of an NDA seeking approval to market and commercially distribute the product on the basis of a determination that the product is safe and effective for its intended use.
Three of three BRAF/MEK naive patients achieved a response: two partial responses and one complete response. In this study voruciclib was dosed at 150 mg daily plus vemurafenib 720 mg or 960 mg twice daily in 28-day cycles. The most common adverse events were fatigue, constipation, diarrhea, arthralgia and headache.
All three BRAF/MEK naive patients achieved a response: two partial responses and one complete response. In this study voruciclib was dosed at 150 mg daily plus vemurafenib 720 mg or 960 mg twice daily in 28-day cycles. The most common adverse events were fatigue, constipation, diarrhea, arthralgia and headache.
The data demonstrate significant biologic activity in the ME-344 treatment group: • In ME-344 treated patients, mean absolute Ki67 decreases were 13.3 compared to an increase of 1.1 in the bevacizumab monotherapy group (P=0.01). • In ME-344 treated patients, mean relative Ki67 decreases were 23% compared to an increase of 186% in the bevacizumab monotherapy group (P • The mean relative Ki67 reduction in patients experiencing vascular normalization in the ME-344 treated patients was 33%, compared to an increase of 11.8% in normalized patients from the bevacizumab monotherapy group (P=0.09).
The data demonstrated significant biologic activity in the ME-344 treatment group: • In ME-344 treated patients, mean absolute Ki67 decreases were 13.3 compared to an increase of 1.1 in the bevacizumab monotherapy group (P=0.01). • In ME-344 treated patients, mean relative Ki67 decreases were 23% compared to an increase of 186% in the bevacizumab monotherapy group (P • The mean relative Ki67 reduction in patients experiencing vascular normalization in the ME-344 treated patients was 33%, compared to an increase of 11.8% in normalized patients from the bevacizumab monotherapy group (P=0.09).
Success in pre-clinical or early-stage clinical trials does not ensure success in later stage clinical trials. Data obtained from pre-clinical and clinical activities are not always conclusive and may be susceptible to varying interpretations that could delay, limit, or prevent marketing approval. Even if a product receives marketing approval, the approval is limited to specific clinical indications.
Success in nonclinical or early-stage clinical trials does not ensure success in later stage clinical trials. Data obtained from nonclinical and clinical activities are not always conclusive and may be susceptible to varying interpretations that could delay, limit, or prevent marketing approval. Even if a product receives marketing approval, the approval is limited to specific clinical indications.
Such pediatric assessment must contain data, gathered using appropriate formulations for each age group for which the assessment is required, that are adequate to assess the safety and effectiveness of the drug or the biological product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the drug or the biological product is safe and effective.
Such pediatric assessment must contain data, gathered using appropriate formulations for each age group for which the assessment is required, that are adequate to assess the safety and effectiveness of the drug product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the drug product is safe and effective.
The conduct of clinical trials in the European Union is governed by the European Clinical Trials Regulation ("CTR"), which was implemented in June 2022. This Regulation governs how regulatory bodies in member states control clinical trials. No clinical trial may be started without a clinical trial authorization granted by the national competent authority and favorable ethics approval.
The conduct of clinical trials in the European Union is governed by the European Clinical Trials Regulation (“CTR”), which was implemented in June 2022. This Regulation governs how regulatory bodies in member states control clinical trials. No clinical trial may be started without a clinical trial authorization granted by the national competent authority and favorable ethics approval.
The results of the pre-clinical studies, together with initial specified manufacturing information, the proposed clinical trial protocol, and information about the participating investigators are submitted to the FDA as part of an IND, which must become effective before we may begin human clinical trials in the U.S.
The results of the nonclinical studies, together with initial specified manufacturing information, the proposed clinical trial protocol, and information about the participating investigators are submitted to the FDA as part of an IND, which must become effective before we may begin human clinical trials in the U.S.
A product designated as fast track is ordinarily eligible for additional programs for expediting development and review, such as increased FDA interactions and rolling submission of the application. Products that are intended to treat serious or life-threatening conditions and that provide a meaningful therapeutic benefit over existing treatments may also be eligible for accelerated approval.
A product designated as fast track is ordinarily eligible for additional programs for expediting development and review, such as increased FDA interactions and rolling submission of the application. 14 Table of Contents Products that are intended to treat serious or life-threatening conditions and that provide a meaningful therapeutic benefit over existing treatments may also be eligible for accelerated approval.
The process required by the FDA before drugs may be marketed in the U.S. generally involves the following: • pre-clinical laboratory evaluations, including formulation and stability testing, and animal tests performed under the FDA’s Good Laboratory Practices ("GLP") regulations to assess pharmacological activity and toxicity potential; • submission and approval of an investigational new drug ("IND") application, including results of pre-clinical tests, manufacturing information, and protocols for clinical tests, which must become effective before clinical trials may begin in the U.S.; • obtaining approval of IRBs to administer the products to human subjects in clinical trials; • adequate and well-controlled human clinical trials to establish the safety and efficacy of the product for the product’s intended use; • development of manufacturing processes which conform to the FDA’s current Good Manufacturing Practices (“cGMP”), as confirmed by FDA inspection or remote regulatory assessments; • submission of results for pre-clinical, toxicology, and clinical studies, and chemistry, manufacture and control information on the product to the FDA in a non-disclosure agreement ("NDA"); and • FDA review and approval of an NDA, prior to any commercial sale or shipment of a product.
The process required by the FDA before drugs may be marketed in the U.S. generally involves the following: • nonclinical laboratory evaluations, including formulation and stability testing, and animal tests performed under the FDA’s Good Laboratory Practices (“GLP”) regulations to assess pharmacological activity and toxicity potential; • submission and approval of an investigational new drug (“IND”) application, including results of nonclinical tests, manufacturing information, and protocols for clinical tests, which must become effective before clinical trials may begin in the U.S.; • obtaining approval of IRBs to administer the products to human subjects in clinical trials; • adequate and well-controlled human clinical trials to establish the safety and efficacy of the product for the product’s intended use; • development of manufacturing processes which conform to the FDA’s current Good Manufacturing Practices (“cGMP”), as confirmed by FDA inspection or remote regulatory assessments; • submission of results for nonclinical, toxicology, and clinical studies, and chemistry, manufacture and control information on the product to the FDA in a non-disclosure agreement(“NDA”); and • FDA review and approval of an NDA, prior to any commercial sale or shipment of a product.
The FDA also may require a Medication Guide and also a risk evaluation and mitigation strategy ("REMS"), or other conditions for a product's approval or following approval to ensure that the benefits of the product candidate outweigh the risks.
The FDA also may require a Medication Guide and also a risk evaluation and mitigation strategy(“REMS”), or other conditions for a product’s approval or following approval to ensure that the benefits of the product candidate outweigh the risks.
Data reported at the American Association for Cancer Research ("AACR") Annual Meeting 2021 in preclinical models demonstrates that voruciclib: • Results in a rapid decrease in the phosphorylation of proteins that promote MYC transcription; • Rapidly decreases phosphorylation of MYC protein on Ser62, a site implicated in stabilizing MYC in KRAS mutant cancers; • Possesses single agent activity against multiple KRAS mutant cancer cell lines both in vitro and in vivo; and • Synergistically inhibits KRAS G12C mutant cancer cell lines in combination with KRAS G12C inhibitors, both in vitro and in vivo.
Data reported at the American Association for Cancer Research (“AACR”) Annual Meeting 2021 in preclinical models demonstrated that voruciclib: • Results in a rapid decrease in the phosphorylation of proteins that promote MYC transcription; • Rapidly decreases phosphorylation of MYC protein on Ser62, a site implicated in stabilizing MYC in KRAS mutant cancers; • Possesses single agent activity against multiple KRAS mutant cancer cell lines both in vitro and in vivo; and • Synergistically inhibits KRAS G12C mutant cancer cell lines in combination with KRAS G12C inhibitors, both in vitro and in vivo.
Results from our earlier, first-in-human, single-agent Phase 1 clinical trial of ME-344 in patients with refractory solid tumors were published in the April 1, 2015 issue of Cancer .
Results from our earlier, first-in-human, single-agent Phase 1 clinical trial of ME-344 in patients with refractory solid tumors were published in the April 1, 2015 edition of Cancer.
In an effort to clarify which patents must be listed in the Orange Book, in January 2021, Congress passed the Orange Book Transparency Act of 2020, which largely codifies the FDA's existing practices into the FDCA.
In an effort to clarify which patents must be listed in the Orange Book, in January 2021, Congress passed the Orange Book Transparency Act of 2020, which largely codified the FDA’s existing practices into the FDCA.
The reauthorization of PREA requires that most applications for drugs and biologics include a pediatric assessment (unless waived or deferred) to ensure the drugs’ and biologics’ safety and effectiveness in children.
The reauthorization of PREA requires that most applications for drugs include a pediatric assessment (unless waived or deferred) to ensure the drugs’ safety and effectiveness in children.
In addition, we regularly review our patent portfolio to identify patents and patent applications that we deem to have relatively low value to our ongoing business operations for potential abandonment. There is also no assurance that we will correctly identify which of our patents and patent applications should be maintained and which should be abandoned.
In addition, we regularly review our patent 10 Table of Contents portfolio to identify patents and patent applications that we deem to have relatively low value to our ongoing business operations for potential abandonment. There is also no assurance that we will correctly identify which of our patents and patent applications should be maintained and which should be abandoned.
Typically, two Phase 3 trials are required by the FDA for product approval. Under some limited circumstances, however, the FDA may approve an NDA based upon a single Phase 3 clinical study plus confirmatory evidence or a single large multicenter trial without confirmatory evidence.
Typically, two Phase 3 trials are required by the FDA for product approval. Under some limited circumstances, however, the FDA may approve an NDA based upon a single Phase 3 clinical study plus confirmatory evidence or a single large multi-center trial without confirmatory evidence.
Approximately one-third of patients in each arm had vascular normalization. 11 Table of Contents Treatment was generally well tolerated; three grade 3 adverse events of high blood pressure were reported, two in the ME-344 arm and one in the bevacizumab monotherapy arm.
Approximately one-third of patients in each arm had vascular normalization. Treatment was generally well tolerated; three grade 3 adverse events of high blood pressure were reported, two in the ME-344 arm and one in the bevacizumab monotherapy arm.
We cannot be certain that any NDA we submit will be approved by the FDA for full or accelerated approval on a timely basis, if at all. Also, any such approval may limit the 15 Table of Contents indicated uses for which the product may be marketed.
We cannot be certain that any NDA we submit will be approved by the FDA for full or accelerated approval on a timely basis, if at all. Also, any such approval may limit the indicated uses for which the product may be marketed.
Information about certain clinical trials, including a description of the study and study results, must also be submitted within specific timeframes to the National Institutes of Health, or NIH, for public dissemination on the clinicaltrials.gov website. Sponsors of investigational products for serious diseases must also have a publicly available policy on requests for expanded access.
Information about certain clinical trials, including a description of the study and study results, must also be submitted within specific time frames to the National Institutes of Health (the “NIH”), for public dissemination on the clinicaltrials.gov website. Sponsors of investigational products for serious diseases must also have a publicly available policy on requests for expanded access.
Voruciclib Scientific Overview: Cell Cycle Signaling CDK9 has important functions in cell cycle regulation, including the modulation of two therapeutic targets in cancer: • CDK9 is a transcriptional regulator of the myeloid leukemia cell differentiation protein ("MCL1"), a member of the family of anti-apoptotic proteins which, when elevated, may prevent the cell from undergoing cell death.
Voruciclib Scientific Overview: Cell Cycle Signaling CDK9 has important functions in cell cycle regulation, including the modulation of two therapeutic targets in cancer: • CDK9 is a transcriptional regulator of the myeloid leukemia cell differentiation protein (“MCL1”), a member of the family of anti-apoptotic proteins which, when elevated, may prevent the cell from undergoing cell death and result in poor prognosis in cancer.
There are approximately 90 allowed or issued foreign patents, seven pending U.S. patent applications, and 34 pending foreign patent applications for voruciclib, related compounds, and related methods of use. We have acquired, by assignment, patents and patent applications from Novogen, our former majority shareholder, relating to a family of isoflavonoid compounds, including ME-344.
There are approximately 85 allowed or issued foreign patents, 7 pending U.S. patent applications, and 52 pending foreign patent applications for voruciclib, related compounds, and related methods of use. We have acquired, by assignment, patents and patent applications from Novogen, our former majority shareholder, relating to a family of isoflavonoid compounds, including ME-344.
The key aspects of our research and development program are to provide more complete characterization of the following: • the relevant molecular targets of action of our drug candidates; • the relative therapeutic benefits and indications for use of our drug candidates as a monotherapy or as part of combinational therapy with other agents; and • the most appropriate therapeutic indications and dosage forms for zandelisib, voruciclib and ME-344. 13 Table of Contents Government Regulation U.S.
The key aspects of our research and development program are to provide more complete characterization of the following: • the relevant molecular targets of action of our drug candidates; • the relative therapeutic benefits and indications for use of our drug candidates as a monotherapy or as part of combinational therapy with other agents; and • the most appropriate therapeutic indications and dosage forms for voruciclib, ME-344 and zandelisib.
Results published in the November 2019 issue of Clinical Cancer Research from a multicenter, investigator-initiated, randomized, open-label, clinical trial that evaluated the combination of ME-344 and bevacizumab in 42 women with early HER2-negative breast cancer further support the combinatorial use of ME-344 with anti-angiogenic therapeutics.
Results published in the November 2019 issue of Clinical Cancer Research from a multi-center, investigator-initiated, randomized, controlled, , clinical trial that evaluated the combination of ME-344 and bevacizumab in 42 women with early HER2-negative breast cancer further support the combinatorial use of ME-344 with anti- angiogenic therapeutics.
In such cases of tumor plasticity in the presence of treatment with anti-angiogenics, targeting the alternative metabolic source with ME-344 may open an important therapeutic opportunity.
In such cases of tumor plasticity in the presence of treatment with anti-angiogenics, contemporaneously targeting the mitochondria as an alternative metabolic source of ATP with ME-344 may open an important therapeutic opportunity.
We granted to KKC a co-exclusive, sublicensable, payment-bearing license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in the U.S., and an exclusive (subject to certain retained rights to perform obligations under the agreement), sublicensable, payment-bearing, license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in countries outside of the U.S.
License”), and an exclusive (subject to certain retained rights to perform obligations under the KKC Commercialization Agreement), sublicensable, payment- bearing, license under certain patents and know-how controlled by us to develop and commercialize zandelisib and any pharmaceutical product containing zandelisib for all human indications in countries outside of the U.S. (the “Ex-U.S.” and the “Ex-U.S. License”).
Regulatory Requirements The FDA, and comparable regulatory agencies in other countries, regulate and impose substantial requirements upon the research, development, pre-clinical and clinical testing, labeling, manufacture, quality control, storage, approval, advertising, promotion, marketing, distribution, import, and export of pharmaceutical products including biologics, as well as significant reporting and record-keeping obligations.
Government Regulation U.S. Regulatory Requirements The FDA, and comparable regulatory agencies in other countries, regulate and impose substantial requirements upon the research, development, nonclinical and clinical testing, labeling, manufacture, quality control, storage, approval, advertising, promotion, marketing, distribution, import, and export of pharmaceutical products, as well as significant reporting and record-keeping obligations.
The FDA’s policies may change, and additional governmental regulations may be enacted that could delay, limit, or prevent regulatory approval of our products, that require that we implement additional compliance steps, or affect our ability to manufacture, market, or distribute our products after approval. For example, in March 2020, the U.S.
The FDA’s policies may change, and additional governmental regulations may be enacted that could delay, limit, or prevent regulatory approval of our products, that require that we implement additional compliance steps, or affect our ability to manufacture, market, or distribute our products after approval.
(the “Ex-U.S.”). KKC grants to us a co-exclusive, sublicensable, license under certain patents and know-how controlled by KKC to develop and commercialize zandelisib for all human indications in the U.S., and a co-exclusive, sublicensable, royalty-free, fully paid license under certain patents and know-how controlled by KKC to perform our obligations in the Ex-U.S. under the KKC Commercialization Agreement.
KKC granted to us a co-exclusive, sublicensable, license under certain patents and know-how controlled by KKC to develop and commercialize zandelisib for all human indications in the U.S., and a co-exclusive, sublicensable, royalty-free, fully paid license under certain patents and know-how controlled by KKC to perform our obligations in the Ex-U.S. under the KKC 9 Table of Contents Commercialization Agreement.
Clinical Program ME-344 demonstrated evidence of single agent activity against refractory solid tumors in a Phase 1 trial, and in pre-clinical studies tumor cells treated with ME-344 resulted in a rapid loss of ATP and cancer cell death. In addition to single agent activity, ME-344 may also have significant potential in combination with anti-angiogenic therapeutics.
When evaluated as a single agent, ME-344 demonstrated evidence of activity against refractory solid tumors in a Phase 1b trial, and in pre-clinical studies tumor cells treated with ME-344 resulted in a rapid loss of ATP and cancer cell death. In addition to single agent activity, ME-344 has also demonstrated significant potential in combination with anti-angiogenic therapeutics.
The research presented suggests that voruciclib could be an attractive therapeutic agent for cancers, including solid tumors, dependent on the activity of MYC. Clinical Program We are evaluating patients with hematological malignancies in a Phase 1 clinical trial evaluating the dose and schedule of voruciclib.
The research presented suggests that voruciclib could be an attractive therapeutic agent for both hematological cancers, as well as solid tumors, dependent on the activity of MYC. 6 Table of Contents Clinical Programs We are evaluating patients with hematological malignancies in a Phase 1 clinical trial evaluating the dose and schedule of voruciclib.
Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed with or furnished to the Securities and Exchange Commission pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge through our website at www.meipharma.com as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities and Exchange Commission.
Management considers our relations with employees to generally be positive. 18 Table of Contents Available Information Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed with or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are available free of charge through our website at www.meipharma.com as soon as reasonably practicable after they are electronically filed with, or furnished to, the SSEC.
There are three pending U.S. patent applications, one pending PCT application, and three pending foreign patent applications directed to ME-344 and related compounds or methods of use thereof. Our success depends in large part on our ability to protect our proprietary technologies, compounds and information, and to operate without infringing the proprietary rights of third parties.
There are two pending U.S. patent applications and approximately 8 pending foreign patent applications directed to zandelisib and related compounds or methods of use thereof. Our success depends in large part on our ability to protect our proprietary technologies, compounds and information, and to operate without infringing the proprietary rights of third parties.
We also offer comprehensive and locally relevant benefits for all eligible employees. 19 Table of Contents We focus on our culture through a combination of regular training for employees at all levels, policies and practices in support of these goals, and a variety of internal and community-based events and actions that reinforce the power of our values and the unique characteristics of each of our employees.
We focus on our culture through a combination of regular training for employees at all levels, policies and practices in support of these goals, and a variety of internal and community-based events and actions that reinforce the power of our values and the unique characteristics of each of our employees.
Dose-limiting toxicities were observed at both the 15 mg/kg and 20 mg/kg dose levels, consisting primarily of grade 3 peripheral neuropathy. We are planning to advance ME-344 in combination with the anti-angiogenic antibody bevacizumab in a Phase 1b study evaluating patients with relapsed colorectal cancer in the first half of calendar year 2023.
Dose-limiting toxicities were observed at both the 15 mg/kg and 20 mg/kg dose levels, consisting primarily of grade 3 peripheral neuropathy. 8 Table of Contents We are advancing ME-344 in combination with the anti-angiogenic antibody bevacizumab in a Phase 1b study evaluating patients with relapsed colorectal cancer.
None of our employees are represented by a labor union or covered by collective bargaining agreements. We have never experienced a work stoppage and believe our relationship with our employees is good. Management considers its relations with employees to generally be positive.
None of our employees are represented by a labor union or covered by collective bargaining agreements. We have never experienced a work stoppage and believe our relationship with our employees is good.
For example, the FDA finalized a rule and a guidance to facilitate drug importation. Congress also passed a bill requiring sponsors of NDA products to provide sufficient quantities of drug product on commercially reasonable market-based terms to entities developing generic and 505(b)(2) products. This bill also included provisions on shared and individual REMS for generic drug products.
Congress also passed a bill requiring sponsors of 15 Table of Contents NDA products to provide sufficient quantities of drug product on commercially reasonable market-based terms to entities developing generic and 505(b)(2) products. This bill also included provisions on shared and individual REMS for generic drug products.
Additionally, ME-344 may also have clinical potential against hematological malignancies. At the AACR Annual Meeting 2022, a poster presentation reported results from preclinical studies exploring the ability of ME-344 to enhance the activity of venetoclax against AML.
At the AACR Annual Meeting 2022, a poster presentation reported results from preclinical studies exploring the ability of ME-344 to enhance the activity of venetoclax against AML.
In pre-clinical studies, it was shown that one outcome of anti-angiogenics was to reduce the rate of glycolysis in tumors as a mechanism to slow tumor growth. However, tumor metabolism was able to shift to mitochondrial metabolism for energy production to support continued tumor proliferation.
Pre-clinical studies, have shown that one outcome of anti-angiogenics is a reduced rate of glycolysis in tumors as a mechanism to slow tumor growth. However, when faced with reduced glycolysis and reduced ATP production, tumor metabolism was able to shift to mitochondrial metabolism for energy production to support continued tumor proliferation.
The USPTO has issued 11 patents covering ME-344 as composition of matter, pharmaceutical 12 Table of Contents compositions, and methods of use to treat cancer. There are approximately 70 foreign patents granted or allowed. The issued U.S. patents with composition of matter claims covering ME-344 are expected to expire in March 2027 and November 2031, not including patent term extension.
The USPTO has issued 13 patents covering ME-344 as composition of matter, pharmaceutical compositions, and methods of use to treat cancer. There are approximately 78 foreign patents granted or allowed. The issued U.S. patents with composition of matter claims covering ME-344 are expected to expire between 2025 and 2031, not including patent term extension.
Voruciclib is also being evaluated in pre-clinical studies to explore the potential synergistic activity in various solid tumor cancers of voruciclib in combination with drug-candidates that targets in the RAS signaling pathway, including KRAS.
Voruciclib is also being evaluated in pre-clinical studies to explore potential activity in various solid tumor cancers including in combination with therapies that target the RAS signaling pathway, such as KRAS inhibitors.
The data demonstrated that ME-344 and venetoclax prolong survival in MV4-11 and MV4-11/AraC-R-derived xenograft AML models. The poster concludes that ME-344 enhances venetoclax activity against AML cells including resistant AML. Competition The marketplace for our drug candidates is highly competitive.
The data demonstrated that ME-344 and venetoclax prolong survival in MV4-11 and MV4-11/AraC-R-derived xenograft AML models. The poster concluded that ME-344 enhances venetoclax activity against AML cells including resistant AML.
The U.S. Patent and Trademark Office (“USPTO”) has issued seven patents covering zandelisib as composition of matter, pharmaceutical compositions, and methods of use to treat cancer. The issued U.S. patents with composition of matter claims covering zandelisib are projected to expire in January 2031 and December 2032, not including any patent term extension.
The USPTO has issued seven patents covering zandelisib as composition of matter, pharmaceutical compositions, and methods of use to treat cancer. The issued U.S. patents with composition of matter claims covering zandelisib are projected to expire between 2031 and 2032, not including any patent term extension. There are approximately 50 foreign patents granted or allowed.
Targeting MYC directly has historically been difficult, but CDK9 is a promising approach to target this oncogene. 9 Table of Contents Voruciclib: Inhibition of MCL1 In pre-clinical studies, voruciclib shows dose-dependent suppression of MCL1; in December 2017, a study of voruciclib published in the journal Nature Scientific Reports reported that the combination of voruciclib plus the BCL-2 inhibitor venetoclax was capable of inhibiting two master regulators of cell survival, MCL-1 and BCL-2, and achieved synergistic antitumor effect in an aggressive subset of DLBCL pre-clinical models.
In pre-clinical studies voruciclib shows dose-dependent suppression of MCL1; in December 2017, a study of voruciclib published in the journal Nature Scientific Reports reported that the combination of voruciclib plus the BCL-2 inhibitor venetoclax was capable of inhibiting two master regulators of cell survival, MCL-1 and BCL-2, and achieved synergistic antitumor effect in an aggressive subset of DLBCL cells.
These patents are published in the FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can be cited by potential competitors as a reference listed drug in support of a 505(b)(2) NDA or an Abbreviated New Drug Application, (“ANDA”).
Drugs listed in the Orange Book can be cited by potential competitors as a reference listed drug in support of a 505(b)(2) NDA or an Abbreviated New Drug Application, (“ANDA”).
If the FDA imposes a clinical hold, the IND sponsor must resolve the FDA’s concerns before clinical trials can begin. Pre-clinical tests and studies can take several years to complete, and there is no guarantee that an IND that is submitted based on such tests and studies will become effective within any specific time period, if at all.
Nonclinical tests and studies can take several years to complete, and there is no guarantee that an IND that is submitted based on such tests and studies will become effective within any specific time period, if at all.
The PDUFA date is only a goal, thus, the FDA does not always meet its PDUFA dates. The PDUFA date may also be extended if the FDA requests or the sponsor provides substantial additional information regarding the submission. This timing may also change with the current user fee reauthorization efforts that are being undertaken in Congress.
The PDUFA date is only a goal, thus, the FDA does not always meet its PDUFA dates. The PDUFA date may also be extended if the FDA requests or the sponsor provides substantial additional information regarding the submission.
These provisions set forth a procedure for designation of a drug as a “fast track product”. The fast track designation applies to the combination of the product and specific indication for which it is being studied.
The fast track designation applies to the combination of the product and specific indication for which it is being studied.
The research presented suggests that voruciclib is an attractive therapeutic target for treating cancers in combination with venetoclax or other BCL-2 inhibitors, and is supportive of our ongoing clinical evaluation of voruciclib in B-cell malignancies and AML. Voruciclib: Inhibition of MYC Many cancers are associated with overexpression of MYC, a transcription factor regulating cell proliferation and growth.
The research suggests that voruciclib is potentially an attractive therapeutic agent for treating cancers in combination with venetoclax or other BCL-2 inhibitors, to address potential resistance associated with MCL1, and is supportive of our ongoing clinical evaluation of voruciclib in B-cell malignancies and AML.
ME-344 Scientific Overview: Cancer Metabolism Tumor cells often display a high metabolic rate to support cell division and growth. This heightened metabolism requires a continual supply of energy in the form of ATP. The two major sources of ATP are the specialized cellular organelles termed mitochondria and through the metabolism of carbohydrates, proteins and lipids.
ME-344 Scientific Overview: Cancer Metabolism Energy supplied in the form of ATP fuels tumor metabolism supporting cell division and growth. Accordingly, tumor cells often display a high metabolic rate to support tumor cell survival and proliferation. This heightened metabolism requires a continual supply of energy in the form of ATP.
Intellectual Property We own, by assignment or exclusive license, worldwide rights to each of our current drug candidates. Our intellectual property portfolio includes approximately 36 issued U.S. patents, 209 issued foreign patents, 17 pending U.S. patent applications, and 137 pending foreign applications. We have acquired, by assignment, worldwide rights to zandelisib and other related compounds from Pathway Therapeutics, Inc.
Intellectual Property We own, by assignment or exclusive license, worldwide rights to each of our current drug candidates. Our intellectual property portfolio includes approximately 37 issued U.S. patents, 213 issued foreign patents, 13 pending U.S. patent applications, and 67 pending foreign applications. We have acquired exclusive worldwide rights to develop, manufacture and commercialize voruciclib from Presage Biosciences, Inc. (“Presage”).
The data demonstrated that voruciclib synergizes with venetoclax to induce programmed cell death, or apoptosis, in both AML cell lines and primary patient samples. It was also demonstrated that voruciclib downregulates MCL1, which is relevant for the synergy between voruciclib and venetoclax, and further that voruciclib also downregulates MYC, which also contributes to the synergies with venetoclax.
It was also demonstrated that voruciclib downregulates MCL1, which is relevant for the synergy between voruciclib and venetoclax, and further that voruciclib downregulates MYC, which also contributes to the synergies with venetoclax.
Under the terms of the KKC Commercialization Agreement, KKC paid us an initial payment of $100 million. We may also earn up to approximately $582.5 million in potential development, regulatory and commercialization milestone payments, plus royalties on net sales of zandelisib in the Ex-U.S., which are tiered beginning in the teens.
KKC paid us an initial payment of $100.0 million. Additionally, in Japan, the KKC Commercialization Agreement included potential regulatory and commercialization milestone payments plus royalties on net sales of zandelisib in Japan, which are tiered beginning in the teens.
In a peer reviewed manuscript published in 2020 by Luedtke et al, it was reported that the inhibition of CDK9 by voruciclib synergistically enhances cell death induced by the Bcl-2 selective inhibitor venetoclax in preclinical models of AML.
In a peer reviewed manuscript published in 2020, it was reported that the inhibition of CDK9 by voruciclib synergistically enhances cell death induced by the BCL-2 inhibitor venetoclax in preclinical models of AML. The data demonstrated that voruciclib synergizes with venetoclax to induce programmed cell death, or apoptosis, in both AML cell lines and primary patient samples.
It will be necessary for applicants to make a separate application to the UK Medicines and Healthcare products Regulatory Agency ("MHRA") for a UK marketing authorization. There is currently no procedure for mutual EU/UK recognition of new medicinal products.
It will be necessary for applicants to make a separate 17 Table of Contents application to the UK Medicines and Healthcare products Regulatory Agency (“MHRA”) for a UK marketing authorization.
If a lawsuit is brought, the FDA may not make an approval effective until the earlier of 30 months from the patent or application owner’s receipt of the notice of the paragraph IV certification, the expiration of the patent, when the infringement case concerning each such patent is favorably decided in the applicant’s favor or settled, or such shorter or longer period as may be ordered by a court. 17 Table of Contents Recently, Congress and U.S. federal administrative agencies have taken certain measures to increase drug competition and thus decrease drug prices, including by facilitating 505(b)(2) NDAs and ANDAs, and by introducing additional products into the U.S. market.
If a lawsuit is brought, the FDA may not make an approval effective until the earlier of 30 months from the patent or application owner’s receipt of the notice of the paragraph IV certification, the expiration of the patent, when the infringement case concerning each such patent is favorably decided in the applicant’s favor or settled, or such shorter or longer period as may be ordered by a court.
Inhibition of CDK9 blocks the production of MCL1, which is an established resistance mechanism to the B-cell lymphoma ("BCL2") inhibitor venetoclax (marketed as Venclexta ® ). • CDK9 is a transcriptional regulator of the MYC proto-oncogene protein ("MYC") which regulates cell proliferation and growth.
Inhibition of CDK9 blocks the production of MCL1, which is also an established resistance mechanism to the BCL2 inhibitor venetoclax. • CDK9 is a transcriptional regulator of the MYC proto-oncogene protein (“MYC”) which regulates cell proliferation and growth. Up regulation of MYC is implicated in many human cancers and is frequently associated with poor prognosis and unfavorable patient survival.
We have acquired exclusive worldwide rights to develop, manufacture and commercialize voruciclib from Presage Biosciences, Inc. (“Presage”). The USPTO has issued 18 U.S. patents covering the composition of matter, pharmaceutical compositions, and methods of use to treat cancer which are projected to expire between April 2024 and December 2037, not including any patent term extension.
The U.S. Patent and Trademark Office (“USPTO”) has allowed or issued 17 U.S. patents covering the composition of matter, pharmaceutical compositions, and methods of use to treat cancer which are projected to expire between April 2024 and March 2037, not including any patent term extension.
We will also provide to KKC certain drug supplies necessary for the development and commercialization of zandelisib in the Ex-U.S. pursuant to supply agreements to be entered into on customary terms, with the understanding that KKC will assume responsibility for manufacturing for the Ex-U.S. as soon as practicable.
We also provided to KKC certain drug supplies necessary for the development and commercialization of zandelisib in the Ex-U.S., with the understanding that KKC would have assumed responsibility for manufacturing for the Ex-U.S. as soon as practicable. Competition The marketplace for our drug candidates is highly competitive.
The KKC Commercialization Agreement substantially retains and consolidates the terms of the 2018 license agreement with KKC to develop and commercialize zandelisib in Japan. KKC will be responsible for the development and commercialization of zandelisib in the Ex-U.S. and, subject to certain exceptions, will be solely responsible for all costs related thereto.
Prior to the execution of the Termination Agreement on July 14, 2023, KKC was responsible for the development and commercialization of zandelisib in the Ex-U.S. and, subject to certain exceptions, solely responsible for all costs related thereto.
FDA approval of the manufacturing procedures and the site will be required prior to commercial distribution. Human Capital Management As of June 30, 2022, we had 102 employees, 21 of whom hold a Ph.D. or M.D. degree. Other personnel resources are used from time to time as consultants or third party service organizations on an as-needed basis.
FDA approval of the manufacturing procedures and the site will be required prior to commercial distribution. Human Capital Management As of June 30, 2023, we had 46 employees, 5 of whom hold a Ph.D. or M.D. degree, all of which reside in the United States.
Accordingly, the FDA may be more conservative in granting accelerated approval or, if granted, may be more apt to withdrawal approval if clinical benefit is not confirmed or the risk benefit assessment changes. There may also be legislative or regulatory changes to the accelerated approval pathway which may impact the ability to obtain or maintain any such approvals, if received.
Accordingly, the FDA may be more conservative in granting accelerated approval or, if granted, may be more apt to withdrawal approval if clinical benefit is not confirmed or the risk benefit assessment changes. A third potential designation that may be available is breakthrough therapy designation.
ME-344 was studied in an investigator-initiated, multi-center, randomized clinical trial in combination with the vascular endothelial growth factor (“VEGF”) inhibitor bevacizumab (marketed as Avastin ® ) in a total of 42 patients with human epidermal growth factor receptor 2 (“HER2”) negative breast cancer.
MEI is pursuing evaluation of ME-344 in combination with VEGF inhibition and obtained preliminary clinical validation of the approach in a completed investigator-initiated, multi-center, randomized, controlled, window of opportunity clinical trial in combination with bevacizumab that enrolled a total of 42 patients with human epidermal growth factor receptor 2 (“HER2”) negative breast cancer.
If there is already a product approved by the FDA that is the same product for the same indication, the orphan designated product will only receive orphan drug exclusivity if the prior hypothesis of clinical superiority is demonstrated. 18 Table of Contents Foreign Regulatory Requirements Outside the U.S., our ability to market our products will also be contingent upon receiving marketing authorizations from the appropriate regulatory authorities and compliance with applicable post-approval regulatory requirements.
Foreign Regulatory Requirements Outside the U.S., our ability to market our products will also be contingent upon receiving marketing authorizations from the appropriate regulatory authorities and compliance with applicable post-approval regulatory requirements.
We may incur significant costs to comply with such laws and regulations now or in the future, and the failure to comply may have a material adverse impact on our business prospects. 16 Table of Contents The FDCA includes provisions designed to facilitate the development and expedite the review of drugs and biological products intended for treatment of serious or life-threatening conditions that demonstrate the potential to address unmet medical needs for such conditions or present a significant improvement over existing therapy.
The FDCA includes provisions designed to facilitate the development and expedite the review of drugs intended for treatment of serious or life-threatening conditions that demonstrate the potential to address unmet medical needs for such conditions or present a significant improvement over existing therapy. These provisions set forth a procedure for designation of a drug as a “fast track product”.
Upregulation of MYC is implicated in many human cancers and is frequently associated with poor prognosis and unfavorable patient survival. CDK9, in addition to being a transcription factor for MYC, also decreases phosphorylation of MYC protein that is implicated in stabilizing MYC in KRAS mutant cancers.
CDK9, in addition to being a transcription factor for MYC, also decreases phosphorylation of MYC protein that is implicated in stabilizing MYC in KRAS mutant cancers. Directly inhibiting MCL1 and MYC has historically been difficult, but CDK9 is a promising approach to indirectly target these oncogenes.
Failure to conduct required post-approval studies, or confirm a clinical benefit, will allow the FDA to withdraw the drug or biologic from the market on an expedited basis. Moreover, in recent years, the accelerated approval pathway has come under significant FDA and public scrutiny.
Reports on the progress of the required Phase 4 confirmatory studies must be submitted to the FDA every 180 days after approval. Failure to conduct required post-approval studies, or confirm a clinical benefit, will allow the FDA to withdraw the drug or biologic from the market on an statutorily defined expedited basis.
Voruciclib: Potent Orally Administered CDK9 Inhibitor in Phase 1 Studies CDK Inhibitor with CDK9 Inhibition in Phase 1 Studies Voruciclib is a potent orally administered CDK9 inhibitor. Voruciclib is being evaluated in a Phase 1 trial evaluating dose and schedule in patients with acute myeloid leukemia (“AML”) and B-cell malignancies.
Voruciclib is being studied in a Phase 1 trial evaluating dose and schedule in patients with acute myeloid leukemia (“AML”) and B-cell malignancies as a single-agent, and in combination 5 Table of Contents with the B-cell lymphoma 2 (“BCL2”) inhibitor venetoclax (marketed as Venclexta ® ) in patients with AML.
We are now also starting to evaluate the dose and schedule of voruciclib in combination with venetoclax, a BCL2 inhibitor, to assess synergies and the opportunity for combination treatments, initially in patients with AML and subsequently across multiple indications.
After completing the monotherapy dose escalation stage of the study, we are now evaluating the dose and schedule of voruciclib in combination with venetoclax, a BCL2 inhibitor, initially in patients with AML. The primary goal of the Phase 1 study is to assess the safety, and possible synergies, of voruciclib administered in combination with venetoclax.
Our common stock is listed on the Nasdaq Capital Market under the symbol “MEIP.” Clinical Development Programs We build our pipeline by licensing or acquiring promising cancer agents and creating value in programs through development, commercialization and strategic partnerships, as appropriate.
Item 1. Business Overview MEI Pharma, Inc. (Nasdaq: MEIP) is a clinical-stage pharmaceutical company committed to developing novel and differentiated cancer therapies. We build our pipeline by acquiring promising cancer agents and creating value in programs through clinical development, strategic partnerships, and out-licensing or commercialization, as appropriate.
CDK9 is a known regulator of MYC transcription and a modulator of MYC protein phosphorylation.
Voruciclib: Inhibition of MYC Many cancers are associated with over expression of MYC, a transcription factor regulating cell proliferation and growth. CDK9 is a known regulator of MYC transcription and a modulator of MYC protein phosphorylation.
There is also no guarantee that we will be able to maintain any designation that we have received or may receive. Following the FDA's approval of an NDA, sponsors are required to list with the FDA each patent with claims that cover the applicant’s drug or a method of using the drug.
Following the FDA’s approval of an NDA, sponsors are required to list with the FDA each patent with claims that cover the applicant’s drug or a method of using the drug. These patents are published in the FDA’s list of Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.
Currently, we have fast track designation for one of our clinical programs (zandelisib for patients with relapsed follicular lymphoma who have received at least two prior systemic therapies). If we should seek additional designations for any of our programs, we cannot be assured that it will be granted by the FDA.
If we should seek additional designations for any of our programs, we cannot be assured that it will be granted by the FDA. There is also no guarantee that we will be able to maintain any designation that we have received or may receive.
KKC License, Development and Commercialization Agreement In April 2020, we entered into a License, Development and Commercialization Agreement with KKC (the “KKC Commercialization Agreement”).
Zandelisib: PI3K δ Inhibitor Overview Zandelisib is an oral, once-daily, selective PI3Kδ inhibitor that we were jointly developing with KKC under a global license, development and commercialization agreement entered into in April 2020.
One instance of grade 3 fatigue was dose limiting and no serious adverse events related to voruciclib were reported.
One instance of grade 3 fatigue was dose limiting and no serious adverse events related to voruciclib were reported. Other clinical studies evaluated voruciclib at doses up to 850 mg in patients with solid tumors, demonstrating additional evidence of potential biologic activity and an adverse event profile generally consistent with other drugs in its class.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

86 edited+25 added−61 removed244 unchanged
Biggest changeIn the future, we may identify additional material weaknesses or otherwise fail to maintain an effective system of internal control over financial reporting or adequate disclosure controls and procedures, which may result in material errors in our financial statements or cause us to fail to meet our periodic reporting obligations. • Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer; 21 Table of Contents • If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business; • We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster; • Limitations on the deductibility of net operating losses could adversely affect our business and financial condition; • The trading price of the shares of our common stock has been and may continue to be highly volatile and could decline in value and we may incur significant costs from class action litigation; • Future sales of our common stock, including common stock issued upon exercise of outstanding warrants or options, may depress the market price of our common stock and cause stockholders to experience dilution; • Because we do not intend to pay, and have not paid, any cash dividends on our shares of common stock, our stockholders will not be able to receive a return on their shares unless the value of our common stock appreciates and they sell their shares; • We will have broad discretion over the use of the net proceeds from any exercise of outstanding warrants and options; • We are authorized to issue blank check preferred stock, which could adversely affect the holders of our common stock; • Anti-takeover provisions contained in our amended and restated certificate of incorporation and third amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt; • Our third amended and restated bylaws require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders; and • Our executive officers and directors may sell shares of their stock, and these sales could adversely affect our stock price.
Biggest changeIncreases in the cost of manufacturing our drug candidates or delays in manufacturing would increase our costs of conducting clinical trials and could adversely affect our future profitability; • We rely on acquisitions or licenses from third parties to expand our pipeline of drug candidates; • Our commercial success is dependent, in part, on obtaining and maintaining patent protection and preserving trade secrets, which cannot be guaranteed; • Claims by other companies that we infringe on their proprietary technology may result in liability for damages or stop our development and commercialization efforts; • We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property; • We may be subject to substantial costs stemming from our defense against third party intellectual property infringement claims; • We face a risk of product liability claims and claims may exceed our insurance limits; • Our employees, independent contractors, consultants, commercial partners, principal investigators, or clinical contract research organizations ("CROs") may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business; • Our business and operations would suffer in the event of system failures; • Our efforts will be seriously jeopardized if we are unable to retain and attract key employees; • Negative U.S. and global economic conditions may pose challenges to our business strategy, which relies on funding from the financial markets or collaborators; • Laws, rules and regulations relating to public companies may be costly and impact our ability to attract and retain directors and executive officers; • Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer; • If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business; • We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster; • Limitations on the deductibility of net operating losses could adversely affect our business and financial condition; • Our business could be negatively impacted as a result of any ongoing or future activism campaigns by Anson Advisors Inc. and Cable Car Capital LLC and other activist investors; • The trading price of the shares of our common stock has been and may continue to be highly volatile and could decline in value and we may incur significant costs from class action litigation; • Future sales of our common stock, including common stock issued upon exercise of outstanding warrants or options, may depress the market price of our common stock and cause stockholders to experience dilution; • Because we do not intend to pay, and have not paid, any cash dividends on our shares of common stock, our stockholders will not be able to receive a return on their shares unless the value of our common stock appreciates and they sell their shares; • We will have broad discretion over the use of the net proceeds from any exercise of outstanding warrants and options; • We are authorized to issue blank check preferred stock, which could adversely affect the holders of our common stock; • Anti-takeover provisions contained in our amended and restated certificate of incorporation and fifth amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt; • Our fifth amended and restated bylaws require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other 20 Table of Contents similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders; and • Our executive officers and directors may sell shares of their stock, and these sales could adversely affect our stock price.
Therefore, zandelisib, voruciclib and ME-344, and any other drug candidates, may give rise to claims that they infringe the patents or proprietary rights of other parties existing now and in the future.
Therefore voruciclib, ME-344, and zandelisib, and any other drug candidates, may give rise to claims that they infringe the patents or proprietary rights of other parties existing now and in the future.
Any failure to comply with the applicable regulatory requirements or problems with our drug candidates may result in regulatory enforcement or other actions, including: • restrictions on manufacturing or distribution, or marketing of any approved products; • restrictions on the labeling, including restrictions on the indication or approved patient population, and required additional warnings, such as black box warnings, contraindications, and precautions; • modifications to promotional pieces or issuance of corrective information; • requirements to conduct post-marketing studies or other clinical trials; • clinical holds or termination of clinical trials; • requirements to establish or modify a REMS or a comparable foreign authority may require that we establish or modify a similar strategy; • changes to the way the product is administered; 32 Table of Contents • liability for harm caused to patients or subjects; • reputational harm; • the product becoming less competitive; • warning, untitled, or cyber letters; • suspension of marketing or withdrawal of the products from the market; • regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product; • refusal to approve pending applications or supplements to approved applications that we submit; • recalls of products; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure or detention; • FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements; or • injunctions or the imposition of civil or criminal penalties, including imprisonment.
Any failure to comply with the applicable regulatory requirements or problems with our drug candidates may result in regulatory enforcement or other actions, including: • restrictions on manufacturing or distribution, or marketing of any approved products; • restrictions on the labeling, including restrictions on the indication or approved patient population, and required additional warnings, such as black box warnings, contraindications, and precautions; • modifications to promotional pieces or issuance of corrective information; • requirements to conduct post-marketing studies or other clinical trials; • clinical holds or termination of clinical trials; • requirements to establish or modify a REMS or a comparable foreign authority may require that we establish or modify a similar strategy; • changes to the way the product is administered; • liability for harm caused to patients or subjects; • reputational harm; • the product becoming less competitive; • warning, untitled, or cyber letters; • suspension of marketing or withdrawal of the products from the market; • regulatory authority issuance of safety alerts, Dear Healthcare Provider letters, press releases, or other communications containing warnings or other safety information about the product; • refusal to approve pending applications or supplements to approved applications that we submit; • recalls of products; • fines, restitution or disgorgement of profits or revenues; • suspension or withdrawal of marketing approvals; • refusal to permit the import or export of our products; • product seizure or detention; • FDA debarment, suspension and debarment from government contracts, and refusal of orders under existing government contracts, exclusion from federal healthcare programs, consent decrees, or corporate integrity agreements; or • injunctions or the imposition of civil or criminal penalties, including imprisonment.
We are solely responsible for the development and commercialization of voruciclib, including the related costs. Drug development is a long, expensive and uncertain process and delay or failure can occur at any stage of our clinical trials. We cannot be certain that we will ever receive regulatory approval for voruciclib or that it will be successfully commercialized, even if approved.
We are solely responsible for the development and commercialization of voruciclib, including the related costs. Drug development is a long, expensive and uncertain process and delay or failure can occur at any stage of our clinical trials. We cannot be certain that we will ever receive regulatory approval for voruciclib or that we will be successfully commercialized, even if approved.
Our contract manufacturers may not be able to comply with the applicable FDA regulatory requirements, which could result in delays to our product development programs, could result in adverse regulatory actions against them or us, and could prevent us from ultimately receiving product marketing approval.
Our contract manufacturers may not be able to comply with the applicable FDA regulatory requirements, which could result in delays to our product development programs, could result in adverse regulatory actions against us or our contract manufacturers, and could prevent us from ultimately receiving product marketing approval.
We may also not be able to obtain or maintain any such designation; • Any orphan drug designations we receive may not confer marketing exclusivity or other benefits; • Even if we or our licensees receive regulatory approval to commercialize our drug candidates, our ability to generate revenues from any resulting products will be subject to a variety of risks, many of which are out of our control; • If any products we develop become subject to unfavorable pricing regulations, third party reimbursement practices or healthcare reform initiatives, our ability to successfully commercialize our products will be impaired; • Our drug candidates are subject to ongoing government regulation both before and after regulatory approval; • We may not be able to establish the contractual arrangements necessary to develop, market and distribute our drug candidates; • Our commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive than our drug candidates; • Our product candidates may face competition sooner than anticipated; • We rely on third parties to conduct our clinical trials and pre-clinical studies.
We may also not be able to obtain or maintain any such designation; • Any orphan drug designations we receive may not confer marketing exclusivity or other benefits; 19 Table of Contents • Even if we or our licensees receive regulatory approval to commercialize our drug candidates, our ability to generate revenues from any resulting products will be subject to a variety of risks, many of which are out of our control; • If any products we develop become subject to unfavorable pricing regulations, third party reimbursement practices or healthcare reform initiatives, our ability to successfully commercialize our products will be impaired; • Our drug candidates are subject to ongoing government regulation both before and after regulatory approval; • We may not be able to establish the contractual arrangements necessary to develop, market and distribute our drug candidates; • Our commercial opportunity will be reduced or eliminated if competitors develop and market products that are more effective, have fewer side effects or are less expensive than our drug candidates; • Our product candidates may face competition sooner than anticipated; • We rely on third parties to conduct our clinical trials and pre-clinical studies.
We have been opportunistic in our efforts to obtain cash, and we expect to continue to evaluate various funding alternatives from time to time. If we obtain additional funding, it may adversely affect the market price of our common stock and may be dilutive to existing stockholders.
We have been opportunistic in our efforts to obtain funding, and we expect to continue to evaluate various funding alternatives from time to time. If we obtain additional funding, it may adversely affect the market price of our common stock and may be dilutive to existing stockholders.
Accordingly, the successful development of any of our drug candidates is uncertain and, accordingly, we may never commercialize any of these drug candidates or generate significant revenue. The FDA may determine that our drug candidates have undesirable side effects that could delay or prevent their regulatory approval or commercialization.
Accordingly, the successful development of any of our drug candidates is uncertain and, accordingly, we may never commercialize any of these drug candidates or generate significant revenue. The FDA may determine that our drug candidates have undesirable side effects that could delay or prevent regulatory approval or commercialization.
Patient enrollment is affected by other factors including: • the size and nature of the patient population; • the severity of the disease under investigation; • the existence of current treatments for the indications for which we are conducting clinical trials; • the eligibility criteria for and design of the clinical trial in question, including factors such as frequency of required assessments, length of the study and ongoing monitoring requirements; • the perceived risks and benefits of the drug candidate, including the potential advantages or disadvantages of the drug candidate being studied in relation to other available therapies; • competition in recruiting and enrolling patients in clinical trials; • efforts to facilitate timely enrolment in clinical trials; • patient referral practices of physicians; • effectiveness of publicity created by clinical trial sites regarding the trial; • patients’ ability to comply with the specific instructions related to the trial protocol, proper documentation, and use of the drug candidate; 29 Table of Contents • an inability to obtain or maintain patient informed consents; • the risk that enrolled patients will drop out before completion or not return for post-treatment follow-up; • the ability to monitor patients adequately during and after treatment; • the ability to compensate patients for their time and effort; and • the proximity and availability of clinical trial sites for prospective patients.
Patient enrollment is affected by other factors including: • the size and nature of the patient population; • the severity of the disease under investigation; • the existence of current treatments for the indications for which we are conducting clinical trials; • the eligibility criteria for and design of the clinical trial in question, including factors such as frequency of required assessments, length of the study and ongoing monitoring requirements; • the perceived risks and benefits of the drug candidate, including the potential advantages or disadvantages of the drug candidate being studied in relation to other available therapies; • competition in recruiting and enrolling patients in clinical trials; • efforts to facilitate timely enrollment in clinical trials; • patient referral practices of physicians; • effectiveness of publicity created by clinical trial sites regarding the trial; • patients’ ability to comply with the specific instructions related to the trial protocol, proper documentation, and use of the drug candidate; • an inability to obtain or maintain patient informed consents; • the risk that enrolled patients will drop out before completion or not return for post-treatment follow-up; • the ability to monitor patients adequately during and after treatment; • the ability to compensate patients for their time and effort; and • the proximity and availability of clinical trial sites for prospective patients.
Our third amended and restated bylaws require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders.
Our fifth amended and restated bylaws require, to the fullest extent permitted by law, that derivative actions brought in our name, actions against our directors, officers, other employees or stockholders for breach of fiduciary duty and other similar actions may be brought only in the Court of Chancery in the State of Delaware and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, which may have the effect of discouraging lawsuits against our directors, officers, other employees or stockholders.
Moreover, regardless of merit or eventual outcome, liability claims can have other adverse consequences, including: • loss of revenue from decreased demand for our products and/or drug candidates; • impairment of our business reputation or financial stability; • costs of related litigation; • substantial monetary awards to patients or other claimants; • diversion of management attention; • withdrawal of clinical trial participants and potential termination of clinical trial sites or entire clinical programs; 37 Table of Contents • the inability to commercialize our drug candidates; • significant negative media attention; • decrease in our stock price; or • initiation of investigations, and enforcement actions by regulators; and product recalls, withdrawals, revocation of approvals, or labeling, marketing or promotional restrictions.
Moreover, regardless of merit or eventual outcome, liability claims can have other adverse consequences, including: • loss of revenue from decreased demand for our products and/or drug candidates; • impairment of our business reputation or financial stability; • costs of related litigation; • substantial monetary awards to patients or other claimants; • diversion of management attention; • withdrawal of clinical trial participants and potential termination of clinical trial sites or entire clinical programs; • the inability to commercialize our drug candidates; • significant negative media attention; • decrease in our stock price; or • initiation of investigations, and enforcement actions by regulators; and product recalls, withdrawals, revocation of approvals, or labeling, marketing or promotional restrictions.
They also generally must pass an FDA preapproval inspection or assessment for conformity with cGMPs before we can obtain approval to manufacture our drug candidates and will be subject to ongoing, periodic, unannounced inspection or assessment by the FDA and corresponding state agencies to ensure strict compliance with cGMP, and other applicable government regulations and corresponding foreign standards.
They also generally must pass an FDA pre-approval inspection or assessment for conformity with cGMPs before we can obtain approval to manufacture our drug candidates and will be subject to ongoing, periodic, unannounced inspection or assessment by the FDA and corresponding state agencies to ensure strict compliance with cGMP, and other applicable government regulations and corresponding foreign standards.
Alternatively, if a court were to find the choice of forum provision contained in our third amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Alternatively, if a court were to find the choice of forum provision contained in our fifth amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, operating results and financial condition.
Our amended and restated certificate of incorporation and third amended and restated bylaws contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control.
Our amended and restated certificate of incorporation and fifth amended and restated bylaws contain provisions that may discourage unsolicited takeover proposals that stockholders may consider to be in their best interests. We are also subject to anti-takeover provisions under Delaware law, which could delay or prevent a change of control.
In certain circumstances, such issuance could have the effect of decreasing the market price of our shares, or making a change in control of the Company more difficult. Anti-takeover provisions contained in our amended and restated certificate of incorporation and third amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
In certain circumstances, such issuance could have the effect of decreasing the market price of our shares or making a change in control of the company more difficult. Anti-takeover provisions contained in our amended and restated certificate of incorporation and fifth amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
Any of these events could prevent us from achieving or maintaining regulatory product approval and market acceptance of the particular drug candidate, if approved, or could substantially increase the costs and expenses of developing and commercializing such product, which in turn could delay or prevent us from generating significant revenues from its sale.
Any of these events could prevent us from achieving or maintaining regulatory product approval and market acceptance of the particular drug candidate, if approved, or could substantially increase the costs and expenses of developing and commercializing such product, which in turn could delay or prevent us from generating significant revenues from our sale.
We may not be able to enter into collaborative or license agreements or may not be able to negotiate commercially acceptable terms for these agreements; • Final approval by regulatory authorities of our drug candidates for commercial use may be delayed, limited or prevented, any of which would adversely affect our ability to generate operating revenues; 20 Table of Contents • The FDA may determine that our drug candidates have undesirable side effects that could delay or prevent their regulatory approval or commercialization; • If we experience delays or difficulties in the enrolment of patients in clinical trials, our completion of clinical trials and receipt of necessary regulatory approvals could be delayed or prevented; • Changes in funding for the FDA and other government agencies or future government shutdowns could cause delays in the submission and regulatory review of marketing applications, which could negatively impact our business or prospects; • Failure to obtain regulatory approval in foreign jurisdictions would prevent us from marketing our products internationally; • Any designation granted by the FDA for any of our product candidates may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive marketing approval.
We may not be able to enter into collaborative or license agreements or may not be able to negotiate commercially acceptable terms for these agreements; • Final approval by regulatory authorities of our drug candidates for commercial use may be delayed, limited or prevented, any of which would adversely affect our ability to generate operating revenues; • The FDA may determine that our drug candidates have undesirable side effects that could delay or prevent regulatory approval or commercialization; • If we experience delays or difficulties in the enrollment of patients in clinical trials, our completion of clinical trials and receipt of necessary regulatory approvals could be delayed or prevented; • Changes in funding for the FDA and other government agencies or future government shutdowns could cause delays in the submission and regulatory review of marketing applications, which could negatively impact our business or prospects; • Failure to obtain regulatory approval in foreign jurisdictions would prevent us from marketing our products internationally; • Any designation granted by the FDA for any of our product candidates may not lead to a faster development or regulatory review or approval process, and does not increase the likelihood that our product candidates will receive marketing approval.
The actual amount of funds we will need will be determined by a number of factors, some of which are beyond our control. We will need substantial additional funds to progress the clinical trial program for our drug candidates and to develop any additional compounds.
The actual amount of funds we will need will be determined by a number of factors, some of which are beyond our control. We will need substantial additional funds to progress the clinical trial programs for our drug candidates and to develop any additional compounds.
The factors that will determine the actual amount of funds that we will need to progress the clinical trial programs may include, but are not limited to, the following: • the therapeutic indications for use being developed; • the clinical trial endpoint required to achieve regulatory approval; • the number of clinical trials required to achieve regulatory approval; • the number of sites included in the trials; • the length of time required to enroll suitable patients; • the number of patients who participate in the trials and the rate that they are recruited; • the number of treatment cycles patients complete while they are enrolled in the trials; • costs and potential difficulties encountered in manufacturing sufficient drug product for the trials; and • the efficacy and safety profile of the product.
The factors that will determine the actual amount of funds that we will need to progress the clinical trial programs may include, but are not limited to, the following: • the therapeutic indications for use being developed; • the clinical trial endpoints required to advance clinical development and achieve regulatory approval; • the number of clinical trials required to achieve regulatory approval; • the number of sites included in the trials; • the length of time required to enroll suitable patients; • the number of patients who participate in the trials and the rate that they are recruited; • the number of treatment cycles patients complete while they are enrolled in the trials; • costs and potential difficulties encountered in manufacturing sufficient drug product for the trials; and • the efficacy and safety profile of the product.
If we receive any designation, the potential reduced timelines associated with designation may introduce significant chemistry, manufacturing and controls challenges for product development as manufacturing development may need to take place at a faster pace than would otherwise be required because the FDA will expect that properly qualified and manufactured product be available at the time of product 30 Table of Contents approval.
If we receive any designation, the potential reduced timelines associated with designation may introduce significant chemistry, manufacturing and controls challenges for product development as manufacturing development may need to take place at a faster pace than would otherwise be required because the FDA will expect that properly qualified and manufactured product be available at the time of product approval.
Failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. We also are required to register certain clinical trials and post the results of certain completed clinical trials on a government-sponsored database, ClinicalTrials.gov , within specified timeframes. Failure to do so can result in enforcement actions and adverse publicity.
Failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process. We also are required to register certain clinical trials and post the results of certain completed clinical trials on a government-sponsored database, ClinicalTrials.gov , within specified time frames. Failure to do so can result in enforcement actions and adverse publicity.
The FDA can delay, limit or deny approval of a drug candidate for many reasons, and product candidate development programs may be delayed or may not be successful for many reasons including but not limited to, the following: • the FDA or IRBs may not authorize us to commence, amend, or continue clinical studies; • we may be required to amend our clinical studies in such a way that it compromises the study data or makes the ongoing conduct of the study is impracticable; • there may be deviations from the clinical study protocol that may result in the need to drop patients from the study, increase the study enrollment size or duration, or that may compromise the reliability of the study and the resulting data; • we may not be able to enroll a sufficient number of qualified patients for clinical trials in a timely manner or at all, patients may drop out of our clinical trials or be lost to follow-up at a higher rate than we anticipate, patients may not follow the clinical trial procedures, or the number of patients required for clinical trials may be larger than we anticipate; • we may have delays in adding new investigators or clinical trial sites, or we may experience a withdrawal of clinical trial sites; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate, including as a result of global trade policies; • a drug candidate may not be deemed adequately safe or effective for an intended use; • the FDA may not find the data from pre-clinical studies and clinical trials sufficient; • we may not be able to demonstrate that a product candidate provides an advantage over current standards of care or current or future competitive therapies in development; • the FDA or comparable foreign regulatory authorities may disagree with our chosen endpoints; • results from our non-primary endpoints may contradict the results of our primary endpoints, raising questions regarding product efficacy; • the FDA or comparable foreign regulatory authorities may disagree with our proposed product doses.
The FDA can delay, limit or deny approval of a drug candidate for many reasons, and product candidate development programs may be delayed or may not be successful for many reasons including but not limited to, the following: • the FDA or IRBs may not authorize us to commence, amend, or continue clinical studies; • we may be required to amend our clinical studies in such a way that it compromises the study data or makes the ongoing conduct of the study is impracticable; • there may be deviations from the clinical study protocol that may result in the need to drop patients from the study, increase the study enrollment size or duration, or that may compromise the reliability of the study and the resulting data; • we may not be able to enroll a sufficient number of qualified patients for clinical trials in a timely manner or at all, patients may drop out of our clinical trials or be lost to follow-up at a higher rate than we anticipate, patients may not follow the clinical trial procedures, or the number of patients required for clinical trials may be larger than we anticipate; 24 Table of Contents • we may have delays in adding new investigators or clinical trial sites, or we may experience a withdrawal of clinical trial sites; • the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate, including as a result of global trade policies; • a drug candidate may not be deemed adequately safe or effective for an intended use; • the FDA may not find the data from pre-clinical studies and clinical trials sufficient; • we may not be able to demonstrate that a product candidate provides an advantage over current standards of care or current or future competitive therapies in development; • the FDA or comparable foreign regulatory authorities may disagree with our chosen endpoints; • results from our non-primary endpoints may contradict the results of our primary endpoints, raising questions regarding product efficacy; • the FDA or comparable foreign regulatory authorities may not find our dose-finding clinical trials and data from other sources adequate and/or may disagree with our proposed product dosages for administration.
All of the risks relating to product development, regulatory approval and commercialization described in this Annual Report also apply to the activities of our 26 Table of Contents collaborators. Moreover, should our collaborators not comply with the applicable regulatory or legal requirements, we and/or they, may be subject to regulatory enforcement action. Risks Related to FDA and Non-U.S.
All of the risks relating to product development, regulatory approval and commercialization described in this Annual Report also apply to the activities of our collaborators. Moreover, should our collaborators not comply with the applicable regulatory or legal requirements, we and/or they, may be subject to regulatory enforcement action. Risks Related to FDA and Non-U.S.
Accordingly, upon approval of our product candidates we may be subject to generic competition or competition from similar products, or may need to commence patent infringement proceedings, which would divert our resources. We currently anticipate that we may be eligible for five years of non-patent marketing exclusivity in the U.S.
Accordingly, upon approval of our product candidates we may be subject to generic competition or competition from similar products, or may need to commence patent infringement proceedings, which would divert our resources. 31 Table of Contents We currently anticipate that we may be eligible for five years of non-patent marketing exclusivity in the U.S.
Risks Related to Our Clinical Trials The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current drug candidates may not have favorable results in later studies or trials. 23 Table of Contents Pre-clinical studies and Phase 1 and Phase 2 clinical trials are an expensive and uncertain process that may take years to complete.
Risks Related to Our Clinical Trials The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current drug candidates may not have favorable results in later studies or trials. Pre-clinical studies and Phase 1 and Phase 2 clinical trials are an expensive and uncertain process that may take years to complete.
Risks Related to Our Licensing and Collaboration Agreements If KKC or other parties with whom we collaborate on the development and commercialization of our drug candidates do not satisfy their obligations, do not otherwise pursue development or commercialization of our drug candidates or if they terminate their agreements with us, we may not be able to develop or commercialize our drug candidates.
Risks Related to Our Licensing and Collaboration Agreements If third parties with whom we collaborate on the development and commercialization of our drug candidates do not satisfy their obligations, do not otherwise pursue development or commercialization of our drug candidates or if they terminate their agreements with us, we may not be able to develop or commercialize our drug candidates.
If we are slow or unable to adapt to changes in existing requirements, standards of care, or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and be subject to regulatory enforcement action.
If we are slow or unable to adapt to changes in existing requirements, standards of care, or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and 30 Table of Contents be subject to regulatory enforcement action.
If another sponsor receives FDA approval for such product before we do, we would be prevented from launching our product in the U.S. for the orphan indication for a period of at least seven years unless we can demonstrate clinical superiority.
If another sponsor receives 28 Table of Contents FDA approval for such product before we do, we would be prevented from launching our product in the U.S. for the orphan indication for a period of at least seven years unless we can demonstrate clinical superiority.
If the FDA or comparable foreign regulatory authorities approve generic or similar versions of any of our product candidates that receive 33 Table of Contents marketing approval, or such authorities do not grant our products appropriate periods of regulatory exclusivity before approving generic or similar versions of our products, the sales of our products could be adversely affected.
If the FDA or comparable foreign regulatory authorities approve generic or similar versions of any of our product candidates that receive marketing approval, or such authorities do not grant our products appropriate periods of regulatory exclusivity before approving generic or similar versions of our products, the sales of our products could be adversely affected.
If those parties do not successfully carry out their contractual duties or meet expected deadlines, our drug candidates may not advance in a timely manner or at all; • We will depend on third party suppliers and contract manufacturers for the manufacturing of our drug candidates and have no direct control over the cost and timing of manufacturing our drug candidates; neither do we have control over the scheduling and availability of manufacturing sites at our contract manufacturers.
If those parties do not successfully carry out their contractual duties or meet expected deadlines, our drug candidates may not advance in a timely manner or at all; • We will depend on third party suppliers and contract manufacturers for the manufacturing of our drug candidates and have no direct control over the cost and timing of manufacturing our drug candidates.
Individual states in the U.S. have also been increasingly passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Individual states in the U.S. have also been increasingly passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access 29 Table of Contents and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
Any such security 39 Table of Contents incident could compromise our networks and the information stored there could be accessed, publicly disclosed, encrypted, lost or stolen. We could be required to expend significant amounts of money and other resources to repair or replace information systems or networks.
Any such security incident could compromise our networks and the information stored there could be accessed, publicly disclosed, encrypted, lost or stolen. We could be required to expend significant amounts of money and other resources to repair or replace information systems or networks.
We may enter into additional agreements to collaborate with other third parties on the development, manufacturing or commercialization of our drug candidates in the future. In connection with these agreements, we may grant certain rights regarding the use of our patents and technology.
We have in the past and may in the future enter into agreements to collaborate with other third parties on the development, manufacturing or commercialization of our drug candidates in the future. In connection with these agreements, we may grant certain rights regarding the use of our patents and technology.
The success of this strategy depends in large part on the combination of our regulatory and development capabilities and expertise and our ability to identify, select and acquire or in-license clinically-enabled product candidates on terms that are acceptable to us.
The success of this strategy depends in large part on the combination of our regulatory and development capabilities and expertise and our ability to identify, select and acquire or 33 Table of Contents in-license clinically-enabled product candidates on terms that are acceptable to us.
Sales of our stock by our executive officers and directors, or the perception that such sales may occur, could cause the market price of our common stock to decline or could make it more difficult for us to raise funds through the sale of equity in the future, either as part, or outside, of trading plans under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Sales of our stock by our executive officers and directors, or the perception that such sales may occur, could cause the market price of our common stock to decline or could make it more difficult for us to raise funds through the sale of equity in the future, either as part, or outside, of trading plans under Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). 40 Table of Contents Item 1B.
Claims by other companies that we infringe on their proprietary technology may result in liability for damages or stop our development and commercialization efforts. 36 Table of Contents The pharmaceutical industry is highly competitive, and patents have been applied for by, and issued to, other parties relating to products competitive with the compounds that we have acquired.
Claims by other companies that we infringe on their proprietary technology may result in liability for damages or stop our development and commercialization efforts. The pharmaceutical industry is highly competitive, and patents have been applied for by, and issued to, other parties relating to products competitive with the compounds that we have acquired.
The issuance of a class of preferred stock could decrease the amount of earnings and assets available for distribution to the holders of our common stock or could adversely affect the rights and powers, including voting rights, of such holders.
The issuance of a class of preferred stock could decrease the amount of earnings and assets available for distribution to the holders of our common stock or 39 Table of Contents could adversely affect the rights and powers, including voting rights, of such holders.
Disruptions at the FDA and other agencies, including as a result of the ongoing COVID-19 pandemic and legislative actions, may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
Disruptions at the FDA and other agencies, including as a result of pandemics like COVID-19 and legislative actions, may also slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
We have taken the strategic decision not to manufacture active pharmaceutical ingredients (“API”), nor finished product, for our drug candidates, as these can be more economically supplied by third parties with particular expertise in this area.
We have taken the strategic decision not to manufacture active 32 Table of Contents pharmaceutical ingredients (“API”), nor finished product, for our drug candidates, as these can be more economically supplied by third parties with particular expertise in this area.
Cyberattacks and other security incidents are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise.
Cyber attacks and other security incidents are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise.
Our third amended and restated bylaws provide that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for any stockholder to bring (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s stockholders, (iii) any action asserting a claim against the Company, its directors, officers or employees arising pursuant to any provision of the Delaware General Corporation Law, or (iv) any action asserting a claim against the Company, its directors, officers or employees governed by the internal affairs doctrine, and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, provided, however, that, in each case, if the Court of Chancery does not have jurisdiction, the forum for such action shall be another state court located within the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware, in all cases subject to the court having personal jurisdiction over the indispensable parties named as defendants therein.
Our fifth amended and restated bylaws provide that, unless we consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for any stockholder to bring (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of ours to us or our stockholders, (iii) any action asserting a claim pursuant to any provision of the Delaware General Corporation Law, or (iv) any action asserting a claim governed by the internal affairs doctrine, and, if brought outside of Delaware, the stockholder bringing the suit will be deemed to have consented to service of process on such stockholder’s counsel, provided, however, that, in each case, if the Court of Chancery does not have jurisdiction, the forum for such action shall be another state court located within the State of Delaware or, if no state court located within the State of Delaware has jurisdiction, the federal district court for the District of Delaware, in all cases subject to the court having personal jurisdiction over the indispensable parties named as defendants therein.
Laws, rules and regulations relating to public companies may be costly and impact our ability to attract and retain directors and executive officers. 38 Table of Contents Laws and regulations affecting public companies, including rules adopted by the SEC and by Nasdaq, may result in increased costs to us.
Laws, rules and regulations relating to public companies may be costly and impact our ability to attract and retain directors and executive officers. Laws and regulations affecting public companies, including rules adopted by the SEC and by Nasdaq, may result in increased costs to us.
In addition, our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyberattacks and other related security incidents.
In addition, our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber attacks and other related security incidents.
There are a limited number of 35 Table of Contents manufacturers that operate under cGMP regulations and that are both capable of manufacturing for us and willing to do so.
There are a limited number of manufacturers that operate under cGMP regulations and that are both capable of manufacturing for us and willing to do so.
Additionally, other factors may serve to delay, limit or prevent the final approval by regulatory authorities of our drug candidates for commercial use, including, but not limited to: 28 Table of Contents • Zandelisib, voruciclib and ME-344 are in various stages of development, and we or our licensees will need to conduct significant clinical testing and development work to demonstrate the quality, safety, and efficacy of these drug candidates before applications for marketing can be filed with the FDA, or with the regulatory authorities of other countries; • development and testing of product formulation, including identification of suitable excipients, or chemical additives intended to facilitate delivery of our drug candidates; • it may take us many years to complete the testing of our drug candidates, and failure can occur at any stage of this process; and • negative or inconclusive results, statistically or clinically insignificant results, or adverse medical events during a clinical trial could cause us to delay or terminate our development efforts.
Additionally, other factors may serve to delay, limit or prevent the final approval by regulatory authorities of our drug candidates for commercial use, including, but not limited to: • voruciclib is in Phase 1 studies and ME-344 is in Phase 1b studies, and we or our potential licensees will need to conduct significant clinical testing and development work to demonstrate the quality, safety, and efficacy of these drug candidates before applications for marketing can be filed with the FDA, or with the regulatory authorities of other countries; • development and testing of product formulation, including identification of suitable excipients, or chemical additives intended to facilitate delivery of our drug candidates; • it may take us many years to complete the testing of our drug candidates, and failure can occur at any stage of this process; and • negative or inconclusive results, statistically or clinically insignificant results, or adverse medical events during a clinical trial could cause us to delay or terminate our development efforts.
In addition, there is privacy legislation and rulemaking efforts at the federal level which may increase our privacy obligations in the U.S.
In addition, there is privacy legislation and rule making efforts at the federal level which may increase our privacy obligations in the U.S.
We believe that the degree of market acceptance and our ability to generate revenues from such products will depend on a number of factors, including, but not limited to, the following: • timing of market introduction of our drugs and competitive drugs; • actual and perceived efficacy and safety of our drug candidates; • prevalence and severity of any side effects; • potential or perceived advantages or disadvantages over alternative treatments; • potential post-marketing commitments imposed by regulatory authorities, such as patient registries; • strength of sales, marketing and distribution support; • price of our future products, both in absolute terms and relative to alternative treatments; • the effect of current and future healthcare laws on our drug candidates; and • availability of coverage and reimbursement from government and other third party payers. 31 Table of Contents If any of our drugs are approved and fail to achieve market acceptance, we may not be able to generate significant revenue to achieve or sustain profitability.
We believe that the degree of market acceptance and our ability to generate revenues from such products will depend on a number of factors, including, but not limited to, the following: • timing of market introduction of our drugs and competitive drugs; • actual and perceived efficacy and safety of our drug candidates; • prevalence and severity of any side effects; • potential or perceived advantages or disadvantages over alternative treatments; • potential post-marketing commitments imposed by regulatory authorities, such as patient registries; • strength of sales, marketing and distribution support; • price of our future products, both in absolute terms and relative to alternative treatments; • the effect of current and future healthcare laws on our drug candidates; and • availability of coverage and reimbursement from government and other third party payers.
Clinical trial sponsors may also choose to discontinue clinical trials as a result of risks to clinical trial patients, a lack of favorable results, or changing business priorities.
Clinical trial sponsors may also choose to discontinue clinical trials as a result of risks to clinical trial patients, a lack of favorable results, data monitoring committee recommendations or changing business priorities.
Failure to obtain regulatory approval in foreign jurisdictions would prevent us from marketing our products internationally. We intend to have our drug candidates marketed outside the U.S. In order to market our products in many non-U.S. jurisdictions, we must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements.
Failure to obtain regulatory approval in foreign jurisdictions would prevent us from marketing our products internationally. We may attempt to have our drug candidates marketed outside the U.S. In order to market our products in many non-U.S. jurisdictions, we must obtain separate international regulatory approvals and comply with numerous and varying regulatory 27 Table of Contents requirements.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws and regulations may impair our research, development or production efforts.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws and regulations may impair our research, development or production efforts. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.
In September 2013, we acquired patents and patent applications related to zandelisib from Pathway Therapeutics, Inc. In September 2017, we acquired patents and patent applications related to voruciclib from Presage. In 2011, we acquired both issued patents and pending patent applications related to ME-344 from Novogen in relation to our Isoflavone-based compounds, which we previously licensed from Novogen.
We acquired patents and patent applications related to voruciclib from Presage in 2017, and acquired both issued patents and pending patent applications related to ME-344 from Novogen in relation to its Isoflavone-based compounds, which we previously licensed from Novogen, in 2011.
In addition, there is a natural transition period when a new third party commences work. As a result, if we need to enter into alternative arrangements, it could delay our product development activities and adversely affect our business.
Switching or adding additional third parties involves additional cost and requires management time and focus. In addition, there is a natural transition period when a new third party commences work. As a result, if we need to enter into alternative arrangements, it could delay our product development activities and adversely affect our business.
Receipt of such designations is within the discretion of the FDA. Accordingly, even if we believe one of our drug candidates meets the criteria for a designation, the FDA may disagree.
Accordingly, even if we believe one of our drug candidates meets the criteria for a designation, the FDA may disagree.
The actual amount of funds we will need will be determined by a number of factors, some of which are beyond our control; • We are a late-stage clinical research and development stage company and are likely to incur operating losses for the foreseeable future; • The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current drug candidates may not have favorable results in later studies or trials; • The ongoing COVID-19 pandemic, or other pandemic, epidemic or outbreak of an infectious disease may materially and adversely impact our business, including our preclinical studies and clinical trials; • Changes in drug candidate manufacturing or formulation may result in additional costs or delay; • If KKC or other parties with whom we collaborate on the development and commercialization of our drug candidates do not satisfy their obligations, do not otherwise pursue development or commercialization of our drug candidates or if they terminate their agreements with us, we may not be able to develop or commercialize our drug candidates; • We are subject to significant obligations to Presage in connection with our license of voruciclib, and we may become subject to significant obligations in connection with future licenses we obtain, which could adversely affect the overall profitability of any products we may seek to commercialize, and such licenses of drug candidates, the development and commercialization for which we are solely responsible, may never become profitable; • Our business strategy may include entry into additional collaborative or license agreements.
The actual amount of funds we will need will be determined by a number of factors, some of which are beyond our control; • We may be required to seek additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties at terms which maybe unfavorable to us; • We are a clinical-stage pharmaceutical company focused on developing potential new therapies for cancer and are likely to incur operating losses for the foreseeable future; • The results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current drug candidates may not have favorable results in later studies or trials; • Changes in drug candidate manufacturing or formulation may result in additional costs or delay; • If third parties with whom we collaborate on the development and commercialization of our drug candidates do not satisfy their obligations, do not otherwise pursue development or commercialization of our drug candidates or if they terminate their agreements with us, we may not be able to develop or commercialize our drug candidates; • We are subject to significant obligations to Presage in connection with our license of voruciclib, and we may become subject to significant obligations in connection with future licenses we obtain, which could adversely affect the overall profitability of any products we may seek to commercialize, and such licenses of drug candidates, the development and commercialization for which we are solely responsible, may never become profitable; • Our business strategy may include entry into additional collaborative or license agreements.
Thus, any access, disclosure or other loss of information, including our data being breached at our partners or third party providers, along with violations of privacy laws that exist and are increasing around the world, could result in legal claims or proceedings and liability under laws that protect the privacy of personal information, disrupt our operations and damage our reputation, which could adversely affect our business.
Thus, any access, disclosure or other loss of information, including our data being breached at our partners or third party providers, along with violations of privacy laws that exist and are increasing around the world, could result in legal claims or proceedings and liability under laws that protect the privacy of personal information, disrupt our operations and damage our reputation, which could adversely affect our business. 37 Table of Contents If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could harm our business.
Similarly, our third party providers possess certain of our sensitive protected health data. The secure maintenance of this information is critical to our operations and business strategy. Despite our reasonable security measures, our information technology and infrastructure may be vulnerable to cyberattacks or breached due to employee error, malfeasance or other disruptions.
The secure maintenance of this information is critical to our operations and business strategy. Despite our reasonable security measures, our information technology and infrastructure may be vulnerable to cyber attacks or breached due to employee error, malfeasance or other disruptions.
We could also become involved in disputes with our counterparties, which could lead to delays in or termination of the agreement and time-consuming and expensive litigation or arbitration. 25 Table of Contents If our counterparties are unwilling or unable to fulfill their obligations or otherwise fail to fully pursue the development and commercialization of our drug candidates or if the agreement is terminated, we may lack sufficient resources to develop and commercialize our drug candidates on our own and may be unable to reach agreement with a suitable alternative collaborator.
If our counterparties are unwilling or unable to fulfill their obligations or otherwise fail to fully pursue the development and commercialization of our drug candidates or if the agreement is terminated, we may lack sufficient resources to develop and commercialize our drug candidates on our own and may be unable to reach agreement with a suitable alternative collaborator.
As described in the Government Regulation section of this Annual Report, there are a number of FDA programs that are intended to speed the development of drugs that are intended to treat serious diseases and conditions when there is an unmet need, including Fast Track and Break Through Therapy Designation.
There are a number of FDA programs that are intended to speed the development of drugs that are intended to treat serious diseases and conditions when there is an unmet need, including Fast Track and Break Through Therapy Designation. Receipt of such designations is within the discretion of the FDA.
The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on our board committees or as executive officers. We cannot estimate accurately the amount or timing of additional costs we may incur to respond to these laws, rules and regulations.
The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, on our board committees or as executive officers.
If they fail to devote adequate resources or otherwise do not successfully develop, commercialize or manufacture our drug candidates, we may not receive the future milestone payments or royalties provided for in the agreement. In addition, under certain circumstances, including our failure to satisfy our obligations under the agreement, the counterparty may have the right to terminate the agreement.
If they fail to devote adequate resources or otherwise do not successfully develop, commercialize or manufacture our drug 22 Table of Contents candidates, we may not receive the future milestone payments or royalties provided for in the agreement.
For example, for certain of our product candidates, the FDA has recommended additional dose finding work and, at a 2022 advisory committee meeting on 27 Table of Contents P13K inhibitors , the FDA described the potential need for more extensive dose optimization studies for both investigational products and approved products with which the investigational products will be used; • there may be changes to standard of care that impact the design and conduct of our trial, may result in studies no longer being clinically significant, may require that we change our studies once they have already commenced, or may result in other products being preferred over our product candidates, if they are approved; • to the extent that we are developing drug candidates for use in combination with other products, clinical trials may be more complex, resulting data may be more difficult to interpret, we may not be able to demonstrate that clinical trial results are attributable to our drug candidate, or developments with respect to the other product or standard of care may impact our ability to obtain product approval for our drug candidate or to successfully market our drug candidate; • even if our product candidates perform satisfactorily in clinical studies, regulatory authorities may still have remaining questions or concerns based on outcomes observed with respect to other products and product candidates in the same pharmacologic class; • the FDA or comparable foreign regulatory authorities may not accept data from studies with clinical trial sites in foreign countries; • the FDA may require that we conduct additional pre-clinical or clinical studies, change our manufacturing process, or gather additional manufacturing information above what we currently have planned for; • the FDA’s interpretation and our interpretation of data from pre-clinical studies and clinical trials may differ significantly; • the FDA may not agree with our intended indications, the design of our clinical or pre-clinical studies, or there may be a flaw in the design that does not become apparent until the studies are well advanced; • we may not be able to establish agreements with contractors or collaborators, including clinical trial sites and CROs, or they or we may fail to comply with applicable FDA, protocol, and other regulatory requirements, including those identified in other risk factors; • the FDA may not approve the manufacturing processes or facilities; • the FDA may change its approval policies or adopt new laws, guidance, or regulations and our development program may not meet newly imposed requirements.
Such efforts have been emphasized through FDA initiatives, such as Project Optimus, which has the goal “t o educate, innovate, and collaborate with companies, academia, professional societies, international regulatory authorities, and patients to move forward with a dose-finding and dose optimization paradigm across oncology that emphasizes selection of a dose or doses that maximizes not only the efficacy of a drug but the safety and tolerability as well” ; • there may be changes to standard of care that impact the design and conduct of our trial, may result in studies no longer being clinically significant, may require that we change our studies once they have already commenced, or may result in other products being preferred over our product candidates, if they are approved; • to the extent that we are developing drug candidates for use in combination with other products, clinical trials may be more complex, resulting data may be more difficult to interpret, we may not be able to demonstrate that clinical trial results are attributable to our drug candidate, or developments with respect to the other product or standard of care may impact our ability to obtain product approval for our drug candidate or to successfully market our drug candidate; • even if our product candidates perform satisfactorily in clinical studies, regulatory authorities may still have remaining questions or concerns based on outcomes observed with respect to other products and product candidates in the same pharmacologic class; • the FDA or comparable foreign regulatory authorities may not accept data from studies with clinical trial sites in foreign countries; • the FDA may require that we conduct additional pre-clinical or clinical studies, change our manufacturing process, or gather additional manufacturing information above what we currently have planned for; • the FDA’s interpretation and our interpretation of data from pre-clinical studies and clinical trials may differ significantly; • the FDA may not agree with our intended indications, the design of our clinical or pre-clinical studies, or there may be a flaw in the design that does not become apparent until the studies are well advanced; • we may not be able to establish agreements with contractors or collaborators, including clinical trial sites and CROs, or they or we may fail to comply with applicable FDA, protocol, and other regulatory requirements, including those identified in other risk factors; • the FDA may not approve the manufacturing processes or facilities; • the FDA may change its approval policies or adopt new laws, guidance, or regulations and our development program may not meet newly imposed requirements; • the cost of clinical trials of our product candidates may be greater than we anticipate or we may have insufficient funds for a clinical trial or to pay the substantial user fees required by the FDA upon the filing of a marketing application; or • the FDA may not accept an NDA or other submission due to, among other reasons, the content or formatting of the submission.
Stockholders will experience significant dilution if we sell these future shares at prices significantly below the price at which such previous stockholders invested. 41 Table of Contents Because we do not intend to pay, and have not paid, any cash dividends on our shares of common stock, our stockholders will not be able to receive a return on their shares unless the value of our common stock appreciates and they sell their shares.
Because we do not intend to pay, and have not paid, any cash dividends on our shares of common stock, our stockholders will not be able to receive a return on their shares unless the value of our common stock appreciates and they sell their shares.
Negative or inconclusive results or adverse medical events during a clinical trial could cause a clinical trial to be delayed, repeated or terminated, or a clinical program to be abandoned.
Negative or inconclusive results or adverse medical events during a clinical trial could cause a clinical trial to be delayed, repeated or terminated, or a clinical program to be abandoned. Changes in drug candidate manufacturing or formulation may result in additional costs or delay.
Our efforts to take advantage of expedited regulatory pathways for serious or life-threatening illnesses to secure marketing authorization more quickly may not be successful.
We may not be successful in any effort to take advantage of expedited regulatory pathways for serious or life-threatening illnesses or to secure marketing authorization from the FDA.
Any person or entity purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Company shall be deemed to have notice of and consented to such provisions. 42 Table of Contents Notwithstanding the foregoing, the forum selection provision of our third amended and restated bylaws will not apply to suits brought to enforce any liability or duty created by the federal securities laws or any other claim for which the federal district courts of the U.S. of America shall be the sole and exclusive forum.
Notwithstanding the foregoing, the forum selection provision of our fifth amended and restated bylaws will not apply to suits brought to enforce any liability or duty created by the federal securities laws or any other claim for which the federal district courts of the U.S. of America shall be the sole and exclusive forum.
Many of our employees and the employees of KKC and third parties upon which we rely to conduct our clinical trials were previously employed at universities or at other biotechnology or pharmaceutical companies, some of which may be competitors or potential competitors.
We may be subject to claims by third parties asserting that our employees or we have misappropriated their intellectual property, or claiming ownership of what we regard as our own intellectual property. 34 Table of Contents Many of our employees and the employees of KKC and third parties upon which we rely to conduct our clinical trials were previously employed at universities or at other biotechnology or pharmaceutical companies, some of which may be competitors or potential competitors.
The therapeutic-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims. Any of these occurrences may significantly harm our business, financial condition, results of operations, and prospects.
The therapeutic-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims.
We are a clinical research and development stage company and are likely to incur operating losses for the foreseeable future. You should consider our prospects in light of the risks and difficulties frequently encountered by clinical research stage and developmental companies.
You should consider our prospects in light of the risks and difficulties frequently encountered by clinical research stage and developmental companies.
If any products we develop become subject to unfavorable pricing regulations, third party reimbursement practices or healthcare reform initiatives, our ability to successfully commercialize our products will be impaired.
If any of our drugs are approved and fail to achieve market acceptance, we may not be able to generate significant revenue to achieve or sustain profitability. If any products we develop become subject to unfavorable pricing regulations, third party reimbursement practices or healthcare reform initiatives, our ability to successfully commercialize our products will be impaired.
In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions. 40 Table of Contents We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
We or the third parties upon whom we depend may be adversely affected by natural disasters and our business continuity and disaster recovery plans may not adequately protect us from a serious disaster.
From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous waste. Even if we contract with third parties for the disposal of these materials and waste, we cannot completely eliminate the risk of contamination or injury resulting from these materials.
Even if we contract with third parties for the disposal of these materials and waste, we cannot completely eliminate the risk of contamination or injury resulting from these materials.
Our employees, independent contractors, consultants, commercial partners, principal investigators, or CROs may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business. We are exposed to the risk of employee fraud or other misconduct.
If we cannot or do not sufficiently insure against potential product liability claims, we may be exposed to significant liabilities, which may materially and adversely affect our business development and commercialization efforts. 35 Table of Contents Our employees, independent contractors, consultants, commercial partners, principal investigators, or CROs may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could have a material adverse effect on our business.
If we experience delays or difficulties in the enrolment of patients in clinical trials, our completion of clinical trials and receipt of necessary regulatory approvals could be delayed or prevented.
Any of these occurrences may significantly harm our business, financial condition, results of operations, and prospects. 26 Table of Contents If we experience delays or difficulties in the enrollment of patients in clinical trials, our completion of clinical trials and receipt of necessary regulatory approvals could be delayed or prevented.
Additionally, Novogen had previously applied for patents in a number of countries with respect to the use of their isoflavone compounds, including ME-344. The patent applications may not proceed to grant or may be amended to reduce the scope of protection of any patent granted. The applications and patents may also be opposed or challenged by third parties.
The patent applications may not proceed to grant or may be amended to reduce the scope of protection of any patent granted. The applications and patents may also be opposed or challenged by third parties.
We have incurred net losses of $374.2 million from our inception through June 30, 2022, including a net loss of $75.2 million for the year ended June 30, 2022 (excluding $20.8 million of non-cash gain resulting from a change in fair value of our warrant liability), a net loss of $59.4 million for the year ended June 30, 2021 (excluding $18.1 million of non-cash gain resulting from a change in fair value of our warrant liability), and a net loss of $24.3 million for the year ended June 30, 2020 (excluding $22.9 million of non-cash loss resulting from a change in the fair value of our warrant liability).
We have an accumulated deficit of $406 million from our inception through June 30, 2023, including a net loss of $33.4 million for the year ended June 30, 2023 (excluding $1.6 million of non-cash gain resulting from a change in fair value of our warrant liability).
Under agreements with any collaborators or licensees we may work with in the future, we may rely significantly on them to, among other activities: • fund research and development activities with us; • pay us fees upon the achievement of milestones; and • market for or with us any commercial products that result from our collaborations.
Under agreements with any collaborators or licensees we may work with in the future, we may rely significantly on them to, among other activities: • fund research and development activities with us; • pay us fees upon the achievement of milestones; and • market for or with us any commercial products that result from our collaborations. 23 Table of Contents If we do not consummate collaborative or license agreements, we may use our financial resources more rapidly on our drug development efforts, continue to defer certain development activities or forego the exploitation of certain geographic territories, any of which could have a material adverse effect on our business prospects.
Agreements with third parties conducting or otherwise assisting with our clinical or preclinical studies might terminate for a variety of reasons, including a failure to perform by the third parties.
Agreements with third parties conducting or otherwise assisting with our clinical or preclinical studies might terminate for a variety of reasons, including a failure to perform by the third parties. If any of our relationships with these third parties terminate, we may not be able to enter into arrangements with alternative providers or to do so on commercially reasonable terms.
Security breaches and privacy issues could compromise our information and expose us to liability, which would cause our business and reputation to suffer. In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our suppliers, as well as personally identifiable information of clinical trial participants and employees.
In the ordinary course of our business, we collect and store sensitive data, including intellectual property, our proprietary business information and that of our suppliers, as well as personally identifiable information of clinical trial participants and employees. Similarly, our third party providers possess certain of our sensitive protected health data.
In addition, adverse events which had initially been considered unrelated to the study treatment may later be found to be caused by the study treatment. Moreover, incorrect or improper use of our drug candidates could cause unexpected side effects or adverse events.
Many compounds that initially showed promise in clinical or earlier stage testing have later been found to cause side effects that prevented further development of the compound. In addition, adverse events which had initially been considered unrelated to the study treatment may later be found to be caused by the study treatment.
If approved, the FDA will require post-marketing studies to verify clinical benefit. Failure to conduct required post-approval studies, or confirm a clinical benefit, will allow the FDA to withdraw the drug from the market on an expedited basis. Indeed, companies have previously withdrawn approved indications following failure to confirm a clinical benefit for their products, including for PI3K inhibitors.
Failure to conduct required post-approval studies, or confirm a clinical benefit, will allow the FDA to withdraw the drug or biologic from the market on a statutorily defined expedited basis.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties We occupy approximately 45,100 square feet of office space in San Diego, California under a lease that expires in November 2029. We believe our current office space is adequate for our immediate needs and that suitable additional space will be available as and when needed. Item 3. Legal Proceedings None. Item 4. Mine Safety Disclosures Not applicable.
Biggest changeItem 2. Properties We occupy approximately 45,100 square feet of office space in San Diego, California under a lease that expires in November 2029. We believe our current office space is adequate for our immediate needs and that suitable additional space will be available as and when needed. Item 3.
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Legal Proceedings We are not currently a party to a significant legal proceeding that we believe will have a material adverse effect on our business or financial conditions. Item 4. Mine Safety Disclosures Not applicable. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities authorized for issuance under equity compensation plans The table below shows, as of June 30, 2022, information for equity compensation plans previously approved by stockholders and for compensation plans not previously approved by stockholders. 43 Table of Contents Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders (1) 17,761,407 $2.95 9,154,665 Equity compensation plans not approved by security holders (2) 2,357,000 2.07 143,000 Total 20,118,407 $2.85 9,297,665 (1) Consists of 17,577,007 shares of common stock issuable upon exercise of options and 184,400 shares of common stock upon vesting of RSUs, in each case, granted under the MEI Pharma, Inc.
Biggest changePlan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) Weighted-average exercise price of outstanding options, warrants and rights (b) Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c) Equity compensation plans approved by security holders (1) 1,162,810 $39.88 573,773 Equity compensation plans not approved by security holders (2) 122,097 23.43 94,903 Total 1,284,907 $38.32 668,676 (1) Consists of 1,162,810 shares of common stock issuable upon exercise of options granted under the MEI Pharma, Inc.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the Nasdaq Capital Market under the symbol “MEIP”. Holders As of September 6, 2022, there were 133,260,865 shares of our common stock outstanding and 556 holders of record of our common stock.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the Nasdaq Capital Market under the symbol “MEIP”. Holders As of September 8, 2023, there were 6,662,857 shares of our common stock outstanding and 360 holders of record of our common stock.
Amended and Restated 2008 Stock Omnibus Equity Compensation Plan (“Omnibus Plan”), under which 29,014,794 shares of common stock are authorized for issuance. The Omnibus Plan provides for the grant of options and/or other stock-based or stock-denominated awards to our non-employee directors, officers, employees and advisors. The weighted-average exercise price presented is the weighted-average exercise price of vested and unvested options.
Amended and Restated 2008 Stock Omnibus Equity Compensation Plan (“Omnibus Plan”), under which 1,850,739 shares of common stock are authorized for issuance. The Omnibus Plan provides for the grant of options and/or other 41 Table of Contents stock-based or stock-denominated awards to our non-employee directors, officers, employees and advisors.
For a discussion of outstanding warrants and other securities exercisable for or convertible into shares of our common stock, see Notes 8 and 9 under Item 8 in this Annual Report. Dividends We have never declared or paid any cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future.
For a discussion of outstanding warrants and other securities exercisable for or convertible into shares of our common stock, see Note 6 - Stockholders' Equity and Note 7 - Share-based Compensation under Item 8 in this Annual Report.
(2) Consists of 2,357,000 shares of common stock issuable upon exercise of options granted under the MEI Pharma, Inc. 2022 Inducement Plan (“Inducement Plan”), under which 2,500,000 shares of common stock are authorized for issuance. The Inducement Plan provides for the grant of options and/or other stock-based or stock-denominated awards to attract and retain selected individuals to serve as employees.
The weighted-average exercise price presented is the weighted-average exercise price of vested and unvested options. (2) Consists of 122,097 shares of common stock issuable upon exercise of options granted under the MEI Pharma, Inc. 2021 Inducement Plan (“Inducement Plan”), under which 217,000 shares of common stock are authorized for issuance.
We currently intend to retain all available funds and future earnings, if any, to support operations and finance the growth and development of our business. Any future determination related to our dividend policy will be made at the discretion of our board of directors.
Dividends We have never declared or paid any cash dividends on our common stock and do not anticipate paying any cash dividends in the foreseeable future. We currently intend to retain all available funds and future earnings, if any, to support operations and finance the growth and development of our business.
The weighted-average exercise price presented is the weighted-average exercise price of vested and unvested options. Item 6. [Reserved]
The Inducement Plan provides for the grant of options and/or other stock-based or stock-denominated awards to attract and retain selected individuals to serve as employees. The weighted-average exercise price presented is the weighted-average exercise price of vested and unvested options. Item 6. [Reserved] Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Removed
The RSUs have no exercise price. For purposes of determining the number of shares available for future grant, each outstanding RSU as of June 30, 2022 is calculated as 1.25 shares of common stock under the terms of the Omnibus Plan.
Added
Any future determination related to our dividend policy will be made at the discretion of our board of directors. Securities authorized for issuance under equity compensation plans The table below shows, as of June 30, 2023, information for equity compensation plans previously approved by stockholders and for compensation plans not previously approved by stockholders.
Added
The following discussion and analysis should be read in conjunction with “ Item 8. Consolidated Financial Statements and Supplementary Data ” included below in this Annual Report. Operating results are not necessarily indicative of results that may occur in future periods. This discussion and analysis contains forward-looking statements that involve a number of risks, uncertainties and assumptions.
Added
Actual results may differ materially from those anticipated in the forward-looking statements as a result of many factors including, but not limited to, those set forth under “Cautionary Statement About Forward-Looking Statements” and “Risk Factors” in Item 1A. Risk Factors included above in this Annual Report.
Added
All forward-looking statements included in this Annual Report are based on the information available to us as of the time we file this Annual Report, and except as required by law, we undertake no obligation to update publicly or revise any forward-looking statements. Overview MEI Pharma, Inc.
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(Nasdaq: MEIP) is a clinical-stage pharmaceutical company committed to developing novel and differentiated cancer therapies. We build our pipeline by acquiring promising cancer agents and creating value in programs through development, strategic partnerships, and out-licensing or commercialization, as appropriate.
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Our approach to oncology drug development is to evaluate our drug candidates in combinations with standard-of-care therapies to overcome known resistance mechanisms and address clear medical needs to provide improved patient benefit. Our pipeline includes voruciclib, an oral cyclin-dependent kinase 9 (“CDK9”) inhibitor, and ME-344, an intravenous small molecule mitochondrial inhibitor targeting the oxidative phosphorylation pathway.
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Our common stock is listed on the Nasdaq Capital Market under the symbol “MEIP.” Clinical Development Programs Our clinical-stage drug candidate pipeline includes voruciclib, an oral cyclin-dependent kinase 9 (“CDK9”) inhibitor and ME-344, an intravenous small molecule targeting the oxidative phosphorylation pathway in the mitochondria.
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For a more complete discussion of our business, see the section of this Annual Report “ Item 1. Business ” above. Recent Developments Merger with Infinity Pharmaceuticals, Inc. In February 2023, we, Infinity Pharmaceuticals, Inc. (“Infinity”), and Meadow Merger Sub, Inc., our wholly owned subsidiary (“Merger Sub”) entered into an agreement and plan of merger (“Merger Agreement”).
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The Merger Agreement provided that Merger Sub will merge with and into Infinity, with Infinity being the surviving entity as a wholly owned subsidiary of us and was subject to approvals by our and Infinity’s stockholders, respectively.
Added
On July 23, 2023, we convened our Special Meeting of Stockholders at which time our stockholders did not approve the proposed transaction and subsequently, we delivered a letter to Infinity which terminated the Merger Agreement pursuant to Section 7.2(c) of the Merger Agreement, effective July 23, 2023.
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Kyowa Kirin License, Development and Commercialization Agreement On April 13, 2020, we entered into a License, Development and Commercialization Agreement (the “Original Agreement”) with KKC, effective as of April 13, 2020.
Added
Pursuant to the terms of the Original Agreement, We and KKC agreed to terminate the License, Development and Commercialization Agreement dated October 31, 2018 (the “JP Agreement”) and to expand the scope of the JP Agreement to collaborate on the development, manufacturing and commercialization of ME-401 globally in accordance with the Original Agreement. 42 Table of Contents On July 14, 2023, we entered into a Termination Agreement with KKC to mutually terminate the Original Agreement, effective July 14, 2023, and all other related agreements between the parties.
Added
Pursuant to the Termination Agreement: • We regained full, global rights to develop, manufacture and commercialize ME-401, subject to KKC's limited rights to use ME-401 for “compassionate use” (as more specifically defined in the Termination Agreement) in certain expanded access programs for the existing patients who have been enrolled in Japanese clinical trial sponsored by KKC until November 30, 2027, and for which KKC is fully liable; • each party released the other party from any and all claims, demands, etc. arising from the Original Agreement, excluding certain surviving claims; and • we are obligated to deliver a discrete quantity of materials to facilitate KKC's activities.
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We anticipate completing the wind down activities related to the KKC License, Development and Commercialization Agreement during the second quarter of fiscal year 2024.
Added
Consent Solicitation In July 2023, Anson Advisors Inc. and Cable Car Capital LLC initiated a consent solicitation to seek the consent of our stockholders holding at least a majority of our outstanding shares of common stock to, among other things, remove and replace all members of our Board of Directors for cause (the “Consent Solicitation”).
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On September 18, 2023, we filed our definitive consent revocation statement urging stockholders to revoke their consents and reject the Consent Solicitation.
Added
Equity Transactions Underwritten Registered Offering During the year ended June 30, 2022, we completed an underwritten registered offering of 1,006,250 shares of common stock at a price per share of $52.00 for net cash proceeds of $48.7 million, after offering costs of $3.7 million.
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Shelf Registration Statement We had a shelf registration statement that permits us to sell, from time to time, up to $200.0 million of common stock, preferred stock and warrants.
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The shelf registration was filed and declared effective in May 2020, replacing a prior shelf registration statement that was filed and declared effective in May 2017, and carried forward approximately $107.5 million of unsold securities registered under the prior shelf registration statement. The shelf registration expired on May 18, 2023.
Added
At-The-Market Equity Offering On November 10, 2020, we entered into an At-The-Market Equity Offering Sales Agreement (the “2020 ATM Sales Agreement”), pursuant to which we may sell an aggregate of up to $60.0 million of our common stock pursuant to the shelf registration statement.
Added
There were no sales under the 2020 ATM Sales Agreement during the years ended June 30, 2023 and 2022, and the 2020 ATM Sales Agreement expired in conjunction with the shelf registration on May 18, 2023. Warrants In May 2023, outstanding warrants to purchase 802,949 shares of our common stock expired.
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The warrants were fully vested and exercisable at a price of $50.80 per share.
Added
Pursuant to the terms of the warrants, we could have been required to settle the warrants in cash in the event of an acquisition of the company and, as a result, the warrants were required, prior to their expiration, to be measured at fair value and reported as a liability in the consolidated balance sheets.
Added
As of June 30, 2022 the warrants were valued at $1.6 million. Prior to their expiration, the warrants had been revalued to $0, as of December 31, 2022. All corresponding changes in fair value were recorded as a component of other income (expense) in our consolidated statements of operations.
Added
No warrants were exercised during the years ended June 30, 2023 and 2022. The warrants expired in May 2023. As of June 30, 2023, we have outstanding warrants to purchase 102,513 shares of our common stock, all issued to Torreya Partners. The warrants are fully vested, exercisable at a price of $6.80 per share and expire in October 2027.
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Critical Accounting Estimates Critical accounting policies are those most important to the portrayal of our financial condition and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.
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Certain accounting estimates are particularly sensitive because of their significance to financial statements and because of the possibility future events affecting the estimate may differ 43 Table of Contents significantly from management’s current judgments. We believe the following critical accounting policies involve the most significant estimates and judgments used in the preparation of our consolidated financial statements.
Added
There have been no material changes from the critical accounting estimates identified below nor our significant accounting policies set forth in Note 1—The Company and Summary of Significant Accounting Policies . Revenue Recognition We apply the five-step revenue recognition model within the scope of ASC Topic 606, Revenue from Contracts with Customers (ASC 606).
Added
Under this model, we: (i) identify the contract, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations in the contract, and (v) recognize revenue when, or as, a company satisfies a performance obligation.
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A performance obligation is a promise in a contract to transfer a distinct good or service and is the unit of accounting in ASC 606.
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A contract’s transaction price is allocated among each distinct performance obligation based on relative standalone selling price and recognized as revenue when, or as, the applicable performance obligation is satisfied.‌ The terms of our arrangements include upfront and license fees, research and development services, milestone and other contingent payments for the achievement of defined objectives and certain preclinical, clinical, regulatory and sales-based events, as well as royalties on sales of commercialized products.
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Agreements with certain upfront payments may require deferral of revenue recognition to a future period until we perform the obligations under these agreements. We use the most likely amount method to estimate variable consideration for event-based milestones and other contingent payments.
Added
Given the high degree of uncertainty around the occurrence of such events, the event-based milestones and other contingent payments have been fully constrained until any uncertainty associated with these payments is resolved.
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Revenue from sales-based milestones and royalty payments is recognized at the later of when or as the sales occur or when the related performance obligation has been satisfied or partially satisfied.
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We continue to re-evaluate the transaction price in each reporting period as contingencies are resolved and other changes in circumstances occur.‌ Revenue recognition is subject to uncertainty due to the variable consideration estimates required to be made. These estimates include the level of effort required to satisfy our obligations under our research and development services arrangements.
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These amounts are estimated at the inception of the services arrangement and are re-evaluated at each reporting period. To accomplish this, we rely on management’s experience, relevant internal data reports and regulatory approvals. The recorded variable consideration is directly sensitive to the estimated inputs made by management used in the calculation.
Added
Changes in estimates are accounted for prospectively.‌ As discussed above in Recent Developments , in response to the discontinuance of zandelisib development with KKC during the year ended June 30, 2023, we updated our estimated costs to complete each of the performance obligations, which resulted in a higher progress towards completion based on the ratio of costs incurred to date to the total estimated costs and a corresponding decrease in our deferred revenue.
Added
Additionally, we recognized revenue related to non-refundable payments for performance obligations that have not commenced and will no longer be initiated. Research and Development Costs Research and development costs are expensed as incurred and include costs paid to third-party contractors to perform research, conduct clinical trials and develop and manufacture drug materials.
Added
Clinical trial costs, including costs associated with third-party contractors, are a significant component of research and development expenses and we expense research and development costs based on work performed. In determining the amount to expense, management relies on estimates of total costs based on contract components completed, the enrollment of subjects, the completion of trials, and other events.
Added
Costs incurred related to the purchase or licensing of in-process research and development for early-stage products or products that are not commercially viable and ready for use, or have no alternative future use, are charged to expense in the period incurred.
Added
As part of the process of preparing the consolidated financial statements, we are required to estimate expenses resulting from obligations under contracts with vendors, clinical research organizations (CROs), consultants and under clinical site agreements relating to conducting clinical trials.
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The financial terms of these contracts vary and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. Our objective is to reflect the appropriate clinical trial expenses in our consolidated financial statements by recording those expenses in the period in which services are performed and efforts are expended.
Added
We account for these expenses according to the progress of the clinical trial as measured by patient progression and the timing of various aspects of the trial. Management determines accrual estimates through financial models and discussions with applicable personnel and outside service providers as to the progress of clinical trials.
Added
During a clinical trial, we adjust the clinical expense recognition if actual results differ from our estimates. We make estimates of accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. Our clinical trial accruals 44 Table of Contents are partially dependent upon accurate reporting by CROs and other third-party vendors.
Added
Our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in changes in our estimates.
Added
Results of Operations Comparison of Years Ended June 30, 2023 and 2022 Revenue: We recognized revenue of $48.8 million for the year ended June 30, 2023, compared to $40.7 million for the year ended June 30, 2022.
Added
As a result of the discontinuation of the zandelisib program, we updated our estimated costs to complete each performance obligation, resulting in a higher progress towards completion based on the ratio of costs incurred to date to the total estimated costs, resulting in the recognition of $16.6 million of previously deferred revenue related to performance obligations that are being closed.
Added
We also recognized $8.6 million of previously deferred revenue related to performance obligations associated with clinical trials that have not commenced and will no longer be initiated. This increase in revenue is offset by a decrease in reimbursement of expenses from KKC due to the discontinuation of the zandelisib program in December 2022.
Added
Research and Development : The following table illustrates the components of our research and development expenses for the years presented (in thousands): Years Ended June 30, 2023 2022 zandelisib $ 25,900 $ 54,764 voruciclib 2,335 5,475 ME-344 1,137 2,915 Other 23,078 22,487 Total research and development expenses $ 52,450 $ 85,641 Research and development expenses consist primarily of clinical trial costs, including payments to contract research organizations ("CROs"), pre-clinical study costs, and costs to manufacture our drug candidates for non-clinical and clinical studies.
Added
Other research and development expenses consist primarily of salaries and personnel costs, share-based compensation, legal costs, and other costs not allocated to specific drug programs. Costs related to zandelisib decreased $28.9 million primarily as a result of the discontinuation of the program during the year ended June 30, 2023, which resulted in decreased clinical trial, manufacturing, and consultant costs.
Added
Costs related to voruciclib decreased $3.1 million due to lower drug manufacturing costs and clinical costs related to the Phase 1 study. Costs related to ME-344 decreased $1.8 million primarily due to decreased drug manufacturing costs.
Added
Other research and development costs increased $0.6 million primarily due to a $2.8 million increase in severance costs due to a reduction in force during the year ended June 30, 2023 and an increase in payroll and related expenses of $0.4 million, partially offset by a decrease of $1.9 million in noncash stock-based compensation and $0.9 million decrease in recruitment costs.
Added
General and Administrative : General and administrative expenses increased $2.6 million to $33.1 million for the year ended June 30, 2023, compared to $30.5 million for the year ended June 30, 2022.
Added
The net increase was primarily due to $2.0 million in severance costs due to our reduction in force in the current year with no similar expense in the prior year, as well as increases in external professional services of $1.8 million, corporate overhead costs of $1.2 million and payroll and related expenses of $0.5 million, partially offset by a $2.9 million decrease in noncash stock-based compensation.
Added
Other Income, Net: Other income, net, decreased by $16.1 million to $4.9 million for the year ended June 30, 2023, as compared to $21.0 million for the year ended June 30, 2022.
Added
We recorded a noncash gain of $1.6 million during the year ended June 30, 2023, due to a change in the fair value of our warrant liability compared to a noncash gain of $20.8 million during the year ended June 30, 2022. The warrants expired in May 2023.
Added
Additionally, we received interest and dividend income of $3.3 million for the year ended June 30, 2023, compared to $0.3 million for the year ended June 30, 2022. The increase is primarily due to higher yields during the year ended June 30, 2023, compared to the prior period. New Accounting Pronouncements See Note 1.
Added
"The Company and Summary of Significant Accounting Policies ," to the Consolidated Financial Statements included in Item 8 of this Annual Report. Liquidity and Capital Resources We have accumulated losses of $406 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future.
Added
As of June 30, 2023, we had $101 million in cash, cash equivalents and short-term investments. We believe our cash balance is sufficient to fund operations for at least the next 12 months, and through the reporting of clinical data readouts from the ongoing and planned voruciclib and ME-344 Phase 1 and Phase 1b clinical programs, respectively.
Added
Our 45 Table of Contents current business operations are focused on continuing the clinical development of our drug candidates. Changes to our research and development plans or other changes affecting our operating expenses may affect actual future use of existing cash resources. Our research and development expenses are expected to increase in the foreseeable future.
Added
We cannot determine with certainty costs associated with ongoing and future clinical trials or the regulatory approval process. The duration, costs and timing associated with the development of our product candidates will depend on a variety of factors, including uncertainties associated with the results of our clinical trials.
Added
To date, we have obtained cash and funded our operations primarily through equity financings and license agreements. In order to continue the development of our drug candidates, at some point in the future we expect to pursue one or more capital transactions, whether through the sale of equity securities, debt financing, license agreements or entry into strategic partnerships.
Added
There can be no assurance that we will be able to continue to raise additional capital in the future.
Added
Sources and Uses of Our Cash Net cash used in operating activities for the year ended June 30, 2023, of $52.5 million consisted of our net loss of $31.8 million and $24.9 million cash used by operating activities partially offset by $4.3 million for noncash items.
Added
Net cash used in in operating activities during the year ended June 30, 2022, of $48.7 million ($68.7 million, net of $20.0 million of milestone payments received from KKC) consisted of our net loss of $54.5 million and adjustments for noncash items of $11.2 million partially offset by cash provided by operating activities of $16.9 million.
Added
Net cash provided by investing activities for the year ended June 30, 2023, was $53.7 million compared to $6.9 million for the year ended June 30, 2022.
Added
The increase in net cash provided by investing activities was due to a higher amount of maturities and fewer purchases of short-term investments during the year ended June 30, 2023, due to maturities being utilized to fund ongoing operations when compared to the level of maturities and purchases for the year ended June 30, 2022.
Added
Net cash used in financing activities for the year ended June 30, 2023, was immaterial compared to $49.1 million of cash provided by financing activities for the year ended June 30, 2022.
Added
The decrease from prior year was primarily due to cash raised during the year ended June 30, 2022, that included $48.7 million of net proceeds from the issuance of common stock. Capital Resource Requirements In January 2022, we amended our facility lease for an additional 20 months through November 2029.
Added
The amended lease agreement also provided for additional lease space that we took control over on July 1, 2022. Under the terms of the lease, we are obligated to make aggregate remaining lease payments as of June 30, 2023, of $16.4 million, excluding common area maintenance and other variable consideration due under the lease agreement.
Added
Estimated lease payments for the fiscal year ended June 30, 2024 are expected to be $2.3 million, excluding common area maintenance and other variable consideration due under the lease agreement.
Added
As of June 30, 2023, we have the following potential purchase obligations for which the timing and/or likelihood of occurrence is unknown; however, if such claims arise in the future, they could have a material effect on our financial position, results of operations, and cash flows. • Under our remaining license agreements, we have payment obligations, which are contingent upon future events such as our achievement of specified development, regulatory and commercial milestones and are required to make royalty payments in connection with the sales of products developed under those agreements.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

1 edited+0 added−0 removed5 unchanged
Biggest changeWe do not believe that inflation has had a material effect on our business, financial condition or results of operations during the years ended June 30, 2022, 2021 or 2020. 50 Table of Contents
Biggest changeWe do not believe that inflation has had a material effect on our business, financial condition or results of operations during the years ended June 30, 2023 and 2022. 47 Table of Contents

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