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What changed in Lite Strategy, Inc.'s 10-K — 2023 vs 2024

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

+333 added−481 removedSource: 10-K (2024-06-30) vs 10-K (2023-09-26)

Top changes in Lite Strategy, Inc.'s 2024 10-K

333 paragraphs added · 481 removed · 182 edited across 3 sections

Item 1. Business

Business — how the company describes what it does

94 edited+50 added−25 removed124 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. 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.
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.
KKC License, Development and Commercialization Agreement In April 2020, we entered into the KKC Commercialization Agreement under which 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. (the “U.S.
KKC License, Development and Commercialization Agreement In April 2020, we entered into the KKC Commercialization Agreement under which 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. (the U.S.
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.
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 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.
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.
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.
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.
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.
Clinical trials must be conducted in accordance with federal regulations and Good Clinical Practice (“GCP”) requirements, and with investigational products that follow cGMP. GCPs include, among other requirements, the requirements related to monitoring, drug accountability, data integrity, and that all research subjects provide their informed consent in writing for their participation in any clinical trial.
Clinical trials must be conducted in accordance with federal regulations and Good Clinical Practice (GCP) requirements, and with investigational products that follow cGMP. GCPs include, among other requirements, the requirements related to monitoring, drug accountability, data integrity, and that all research subjects provide their informed consent in writing for their participation in any clinical trial.
Once the submission is accepted for filing, the FDA begins an in-depth substantive review. Under the goals agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), the agency currently aims to review 90% of all applications for new molecular entities within ten months of the 60-day filing date for a standard review.
Once the submission is accepted for filing, the FDA begins an in-depth substantive review. Under the goals agreed to by the FDA under the Prescription Drug User Fee Act (PDUFA), the agency currently aims to review 90% of all applications for new molecular entities within ten months of the 60-day filing date for a standard review.
The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly address the agreement between the sponsor and the FDA in the Pediatric Written Request, the additional protection is granted. The Pediatric Research Equity Act (“PREA”) also was reauthorized and amended by the FDAAA.
The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly address the agreement between the sponsor and the FDA in the Pediatric Written Request, the additional protection is granted. The Pediatric Research Equity Act (PREA) also was reauthorized and amended by the FDAAA.
Although the specific requirements and restrictions vary from country to country, as a general matter, foreign regulatory systems include risks similar to those associated with the FDA’s regulations, described above. Under European Union regulatory systems, marketing authorizations may be submitted either under a centralized or a decentralized procedure (“DCP”).
Although the specific requirements and restrictions vary from country to country, as a general matter, foreign regulatory systems include risks similar to those associated with the FDA’s regulations, described above. Under European Union (European Union) regulatory systems, marketing authorizations may be submitted either under a centralized or a decentralized procedure (DCP).
Under the centralized procedure, a single application to the EMA leads to an approval granted by the European Commission which permits the marketing of the product throughout the EU. The centralized procedure is mandatory for certain classes of medicinal products such as new substances for the treatment of oncology.
Under the centralized procedure, a single application to the European Medicines Agency (EMA) leads to an approval granted by the European Commission which permits the marketing of the product throughout the EU. The centralized procedure is mandatory for certain classes of medicinal products such as new substances for the treatment of oncology.
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. The drug candidate 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.
Our approach to oncology drug development has been 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 drug candidate 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.
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.
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 (Mcl-1), 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.
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.
Government Regulation U.S. Regulatory Requirements The U.S. Food and Drug Administration (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 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.
With the exit of the UK from the European Union, the UK did not implement the CTR and the UK provisions implementing the previous law as set out in the previous Clinical Trial Directive (which fundamentally covered the same area as the CTR but was far less detailed and predated the CTIS) will continue to apply until amended by the UK.
With the exit of the UK from the EU, the UK did not implement the CTR and the UK provisions implementing the previous law as set out in the previous Clinical Trial Directive (which fundamentally covered the same area as the CTR but was far less detailed and predated the CTIS) will continue to apply until amended by the UK.
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.
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 development opportunity.
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.
Results from an 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.
The term of most of our other current patents commenced, and most of our future patents, if any, will commence, on the date of issuance and terminate 20 years from the earliest effective filing date of the patent application.
The term of most of our other current patents commenced, and most of our future patents, if any, will commence, on the date of issuance and terminate 20 years from the earliest effective filing date of the non-provisional patent application.
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).
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.
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.
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.
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 AML.
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.
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.
Among other things, the IRA has multiple provisions that may impact the prices of drug products, such as negotiated ceiling prices and penalties for price increases that exceed the rate of inflation, that are both sold into the Medicare program and throughout the United States.
Among other things, the IRA 18 Table of Contents has multiple provisions that may impact the prices of drug products, such as negotiated ceiling prices and penalties for price increases that exceed the rate of inflation, that are both sold into the Medicare program and throughout the United States.
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 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 institutional review boards (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.
We cannot be certain that we will be able to take advantage of either the patent term extension or marketing exclusivity provisions of these laws or that, if received, they will adequately protect any approved products from competition. The Best Pharmaceuticals for Children Act (“BPCA”) was reauthorized and amended by the FDA Amendments Act of 2007 (“FDAAA”).
We cannot be certain that we will be able to take advantage of either the patent term extension or marketing exclusivity provisions of these laws or that, if received, they will adequately protect any approved products from competition. The Best Pharmaceuticals for Children Act (BPCA) was reauthorized and amended by the FDA Amendments Act of 2007 (FDAAA).
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”.
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.
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”).
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).
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.
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 European Economic Area (EEA) countries could use the CTIS since January 31, 2022.
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.
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 investigational new drug (IND) application, which must become effective before we may begin human clinical trials in the U.S.
Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a “rare disease or condition,” which generally is a disease or condition that affects fewer than 200,000 individuals in the U.S.
Under the Orphan Drug Act, the FDA may grant orphan drug designation to drugs intended to treat a rare disease or condition, which generally is a disease or condition that affects fewer than 200,000 individuals in the U.S.
There is currently no procedure for mutual EU/UK recognition of new medicinal products although there is an expedited review procedure (the “EC Decision Reliance Procedure”) for approval in the UK of EU approved products which is currently to run to December 31, 2023.
There is currently no procedure for mutual EU/UK recognition of new medicinal products although there is an expedited review procedure (the EC Decision Reliance Procedure) for approval in the UK of EU approved products which is currently to run to December 31, 2023.
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 EU is governed by the European Clinical Trials Regulation (CTR), which was implemented in June 2022. This CTR 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.
By example, if there is already a product 16 Table of Contents 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.
By example, 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.
Generally, the FDA may not approve an ANDA or 505(b)(2) NDA unless the reference listed drug’s Orange Book listed patents have expired and/or if the applicant certifies that it is not seeking approval for a patented method of use.
Generally, the FDA may not approve an abbreviated new drug application (ANDA) or 505(b)(2) NDA unless the reference listed drug’s Orange Book listed patents have expired and/or if the applicant certifies that it is not seeking approval for a patented method of use.
ANDA applicants generally must only scientifically demonstrate that their product is bioequivalent to, or performs in the same manner as, the innovator drug and can often be substituted by pharmacists under prescriptions written for the reference listed drug.
ANDA 16 Table of Contents applicants generally must only scientifically demonstrate that their product is bioequivalent to, or performs in the same manner as, the innovator drug and can often be substituted by pharmacists under prescriptions written for the reference listed drug.
On the intermittent dosing schedule selected for further development, no dose-limiting toxicities (DLT) were observed, there were no grade three or higher drug related toxicities, and dose escalation was stopped at 200 mg before reaching the maximum tolerated dose because plasma concentrations reached levels considered sufficient for target inhibition.
On the intermittent dosing schedule selected for further development, no DLTs were observed, there were no Grade 3 or higher drug related toxicities, and dose escalation was stopped at 200 mg before reaching the maximum tolerated dose because plasma concentrations reached levels considered sufficient for target inhibition.
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.
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 provided evidence for the combinatorial use of ME-344 with anti-angiogenic therapeutics.
Concurrent with clinical trials, companies usually complete additional non-clinical and toxicology studies and must also develop additional information about the CMC of the product candidate. Some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data monitoring committee.
Concurrent with clinical trials, companies usually complete additional nonclinical and toxicology studies and must also develop additional information about the chemistry, manufacturing and controls (CMC) of the product candidate. Some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data monitoring committee.
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.
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. Voruciclib: Inhibition of MCL1 CDK9 is a known transcriptional regulator of MCL1.
Of the 46 employees, 23 were engaged in research and development activities and 23 were engaged in business development, finance, information systems, facilities, human resources or administrative support. Other personnel resources are used from time to time as consultants or third party service organizations on an as-needed basis.
Of the 28 employees, 12 were engaged in research and development activities and 16 were engaged in business development, finance, information systems, facilities, human resources or administrative support. 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.
FDA approval of the manufacturing procedures and the site will be required prior to commercial distribution. Human Capital Management As of June 30, 2024, we had 28 employees, 3 of whom hold a Ph.D. or M.D. degree, all of which reside in the United States.
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.
The USPTO has issued 12 patents covering ME-344 as composition of matter, 11 Table of Contents pharmaceutical compositions, and methods of use to treat cancer. There are approximately 61 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.
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.
It was 6 Table of Contents 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.
If the FDA imposes a clinical hold at any time before or during clinical trials, the IND sponsor must resolve the FDA’s concerns before clinical trials can begin or continue.
If the FDA imposes a clinical hold at any time before or 13 Table of Contents during clinical trials, the IND sponsor must resolve the FDA’s concerns before clinical trials can begin or continue.
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.
There are approximately 90 allowed or issued foreign patents, 3 pending U.S. provisional patent applications, and approximately 60 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 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.
There are 2 pending U.S. patent applications, 1 pending PTC application and approximately 11 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.
The discontinuation of zandelisib in Japan was a business decision by KKC based on the most recent regulatory guidance from the PMDA and was not related to the zandelisib clinical data generated to date.
The discontinuation of zandelisib in Japan was a business decision by KKC based on the most recent regulatory guidance from the Pharmaceuticals and Medical Devices Agency in Japan and was not related to the zandelisib clinical data generated to date.
State governments may also impose obligations in these and other areas. These requirements are extensive and are frequently changing. 11 Table of Contents In the U.S., pharmaceutical products are regulated by the FDA under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and other laws.
State governments may also impose obligations in these and other areas. These requirements are extensive and are frequently changing. In the U.S., pharmaceutical products are regulated by the FDA under the Federal Food, Drug, and Cosmetic Act (FDCA) and other laws.
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.
Item 1. Business Overview MEI Pharma, Inc. (Nasdaq: MEIP) is a pharmaceutical company that has been developing novel and differentiated cancer therapies. We built our pipeline by acquiring promising cancer agents and creating value in programs through clinical development, strategic partnerships, and out-licensing or commercialization, as appropriate.
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.
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 SEC.
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”).
Intellectual Property We own, by assignment or exclusive license, worldwide rights to each of our current drug candidates. Our intellectual property portfolio includes approximately 38 issued U.S. patents, 201 issued foreign patents, 10 pending U.S. patent applications, and 83 pending foreign applications. We have acquired exclusive worldwide rights to develop, manufacture and commercialize voruciclib from Presage Biosciences, Inc. (Presage).
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.
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.
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.
The U.S. Patent and Trademark Office (USPTO) has allowed or issued 19 U.S. patents covering the composition of matter, pharmaceutical compositions, and methods of use to treat cancer which are projected to expire between 2026 and 2037, not including any patent term extension.
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.
Inhibition of CDK9 blocks the production of Mcl-1, which is also an established resistance mechanism to the BCL-2 inhibitor venetoclax. • CDK9 is a transcriptional regulator of the MYC proto-oncogene protein (MYC) which regulates cell proliferation and growth. Upregulation of MYC is implicated in many human cancers and is frequently associated with poor prognosis and unfavorable patient survival.
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.
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 our relations with employees to generally be positive.
There are four pending U.S. patent applications and seven pending foreign patent applications directed to ME-344 and related compounds or methods of use thereof. We have acquired, by assignment, worldwide rights to zandelisib and other related compounds from Pathway Therapeutics, Inc.
There are 5 pending U.S. patent applications, 1 pending Patient Cooperation Treaty (PCT) and 10 pending foreign patent applications directed to ME-344 and related compounds or methods of use thereof. We have acquired, by assignment, worldwide rights to zandelisib and other related compounds from Pathway Therapeutics, Inc.
Under the FDA Reauthorization Act of 2017, sponsors submitting original applications on or after August 18, 2020, for product candidates intended for the treatment of adult cancer which are directed at molecular targets that the FDA determines to be substantially relevant to the growth or progression of pediatric cancer must submit, prior to marketing application submission, an initial Pediatric Study Plan for FDA agreement, and with the application, reports from molecularly targeted pediatric cancer clinical investigations designed to yield clinically meaningful pediatric study data, using appropriate pediatric formulations, to inform potential pediatric labeling.
The Food and Drug Administration Safety and Innovation Act signed into law on July 9, 2012, permanently renewed and strengthened BPCA and PREA. 17 Table of Contents Under the FDA Reauthorization Act of 2017, sponsors submitting original applications on or after August 18, 2020, for product candidates intended for the treatment of adult cancer which are directed at molecular targets that the FDA determines to be substantially relevant to the growth or progression of pediatric cancer must submit, prior to marketing application submission, an initial Pediatric Study Plan for FDA agreement, and with the application, reports from molecularly targeted pediatric cancer clinical investigations designed to yield clinically meaningful pediatric study data, using appropriate pediatric formulations, to inform potential pediatric labeling.
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.
The data are generated by our pre-clinical studies and clinical trial programs. 12 Table of Contents The key aspects of our research and development program have been 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.
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.
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.
In March 2022, we and KKC reported the outcome of an end of Phase 2 meeting with the FDA wherein the agency discouraged a filing based on data from a single-arm Phase 2 trial, called TIDAL, evaluating zandelisib in patients with relapsed or refractory follicular lymphoma.
In March 2022, we and KKC reported the outcome of an end of Phase 2 meeting with the FDA wherein the agency discouraged a filing based on data from a single-arm Phase 2 TIDAL trial.
Thereafter a new international recognition framework will be in place, which will have regard to decisions already made by the European Medicines Agency. This means applications with a CHMP positive opinion received after December 31, 2023 will be eligible.
Thereafter a new international recognition framework will be in place, which will have regard to decisions already made by the EMA. This means applications with a positive opinion from the Committee for Medicaid Products for Human Use (CHMP) received after December 31, 2023 will be eligible.
Of the 40 patients enrolled, the first 16 were dosed daily continuously at 50 and 100 mg and the following 24 were dosed on an intermittent schedule (14 consecutive days on therapy in a 28-day cycle) at 100, 150 and 200 mg. All patients were heavily pre-treated with a median of 3 prior therapies (range 1-8).
Of the 40 patients enrolled, the first 16 were dosed daily continuously at 50 and 100 mg and the following 24 patients were dosed on an intermittent schedule (14 consecutive days on therapy in a 28-day cycle) at 100, 150 and 200 mg.
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.
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. Clinical Programs In a recent Phase 1 clinical trial, we evaluated the dose and schedule of voruciclib in combination with venetoclax, a BCL-2 inhibitor, in patients with R/R AML.
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.
Also under the KKC Commercialization Agreement, we were granted 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. and were paid an initial non-refundable payment of $100.0 million.
If applicable regulatory criteria are not satisfied, the FDA may issue a complete response letter (“CRL”) to the sponsor requiring additional non-clinical or clinical studies or data or additional CMC information.
Inspections may be in-person or conducted remotely. If applicable regulatory criteria are not satisfied, the FDA may issue a complete response letter (CRL) to the sponsor requiring additional nonclinical or clinical studies or data or additional CMC information.
The FDA may refer certain applications to an advisory committee, which is a panel of experts that make a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
The FDA may refer certain applications to an advisory committee, which is a panel of experts that make a recommendation as to whether the application should be approved and under what conditions.
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.
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.
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.
Additionally, in Japan, the KKC 10 Table of Contents 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.
On July 14, 2023, we entered into a Termination Agreement (the “Termination Agreement”) with KKC to terminate all agreements between the parties and cease further zandelisib clinical development globally. We anticipate completing the wind down activities related to the KKC License, Development and Commercialization Agreement during the second quarter of fiscal year 2024.
On July 14, 2023, we entered into a Termination Agreement (the Termination Agreement) with KKC to terminate all agreements between the parties and cease further zandelisib clinical development globally. Activities associated with the compassionate use supply and wind down of the KKC Commercialization Agreement were completed in fiscal year 2024.
All members of our senior management team have prior experience with pharmaceutical, biotechnology or medical product companies. We believe that we have been successful in attracting skilled and experienced personnel, but there can be no assurance that we will be able to attract and retain the individuals needed. Our people are a critical component in our continued success.
We believe that we have been successful in attracting skilled and experienced personnel, but there can be no assurance that we will be able to attract and retain the individuals needed. 19 Table of Contents Our people are a critical component in our continued success.
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.
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.
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.
Voruciclib recently completed a Phase 1 trial evaluating dose and schedule in patients with acute myeloid leukemia (AML) in combination with the B-cell lymphoma 2 (BCL-2) inhibitor venetoclax (marketed as Venclexta®).
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.
We have already initiated research and development activity of the new formulation, with the goal of increasing biological activity, improving patient convenience of administration and increasing commercial opportunity. Zandelisib: PI3Kδ 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.
By the date of approval of an accelerated approval product, the FDA must specify the conditions for the required post approval studies, including enrollment targets, the study protocol, milestones, and target completion dates. The FDA may also require that the confirmatory Phase 4 studies be commenced prior to the FDA granting a product accelerated approval.
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. By the date of approval of an accelerated approval product, the FDA must specify the conditions for the required post approval studies, including enrollment targets, the study protocol, milestones, and target completion dates.
The totality of the clinical data, along with data from pre-clinical studies, suggests voruciclib’s ability to inhibit its molecular target at a projected dose as low as 150 mg daily. In one clinical study, voruciclib was evaluated in combination with vemurafenib (marketed as Zelboraf ® ) in nine patients with BRAF mutated advanced/ inoperable malignant melanoma.
Voruciclib was also previously evaluated in more than 70 patients with solid tumors in multiple Phase 1 studies. The totality of the clinical data, along with data from pre-clinical studies, suggests voruciclib’s ability to inhibit its molecular target at a projected dose as low as 150 mg daily.
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.
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. One instance of grade 3 fatigue was dose limiting and no serious adverse events related to voruciclib were reported.
Before approving an NDA, the FDA will inspect the facilities at which the product is manufactured and may inspect the sponsor, clinical study vendors, and clinical sites at which the product candidate was studied and will not approve the product unless cGMP and GCP compliance are satisfactory. Inspections may be in-person or conducted remotely.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions. 14 Table of Contents Before approving an NDA, the FDA will inspect the facilities at which the product is manufactured and may inspect the sponsor, clinical study vendors, and clinical sites at which the product candidate was studied and will not approve the product unless cGMP and GCP compliance are satisfactory.
At this meeting, the FDA provided further guidance regarding the design and statistical analysis for the Phase 3 COASTAL trial.
In November 2022, we and KKC met with the FDA in a follow-up meeting to the March 2022 end of Phase 2 meeting. At this meeting, the FDA provided further guidance regarding the design and statistical analysis for the Phase 3 COASTAL trial.
Maintaining compliance is costly and time-consuming. We cannot be certain that we, or our present or future suppliers or third party manufacturers, will be able to comply with all FDA regulatory requirements, and potential consequences of noncompliance could have a material adverse impact on our business prospects.
We cannot be certain that we, or our present or future suppliers or third-party manufacturers, will be able to comply with all FDA regulatory requirements, and potential consequences of noncompliance could have a material adverse impact on our business prospects. 15 Table of Contents 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.
Subsequently, at an April 2022 meeting of the FDA Oncology Drugs Advisory Committee, the committee voted that future approvals of PI3K inhibitors for hematologic malignancies should be supported by randomized data. In November 2022, we and KKC met with the FDA in a follow-up meeting to the March 2022 end of Phase 2 meeting.
At that time, the FDA emphasized that we continue efforts with the ongoing randomized Phase 3 COASTAL trial evaluating patients with relapsed or refractory follicular or marginal zone lymphomas. Subsequently, at an April 2022 meeting of the FDA Oncology Drugs Advisory Committee, the committee voted that future approvals of PI3Kδ inhibitors for hematologic malignancies should be supported by randomized data.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. 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.
Biggest changeIf 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 are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes.
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.
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.
We will have broad discretion to use the net proceeds to us upon any exercise of outstanding warrants and options, and investors in our stock will be relying on the judgment of our board of directors and management regarding the application of these proceeds.
We will have broad discretion to use the net proceeds to us upon any exercise of outstanding warrants and options, and investors in our stock will be relying on the judgment of our Board and management regarding the application of these proceeds.
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.
Our sixth 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.
These provisions include: • a staggered board providing for three classes of directors, which limits the ability of a stockholder or group to gain control of our board; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • the right of our board to elect a director to fill a vacancy created by the expansion of our board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our board; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
These provisions include: • a staggered board providing for three classes of directors, which limits the ability of a stockholder or group to gain control of our board; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; 29 Table of Contents • the right of our board to elect a director to fill a vacancy created by the expansion of our board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our board; and • advance notice procedures that stockholders must comply with in order to nominate candidates to our board or to propose matters to be acted upon at a meeting of stockholders, which may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
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.
Our sixth amended and restated bylaws provide that, unless we consent 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.
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.
Alternatively, if a court were to find the choice of forum provision contained in our sixth 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.
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.
Notwithstanding the foregoing, the forum selection provision of our sixth 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.
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.
Our amended and restated certificate of incorporation and sixth 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 fifth 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 sixth amended and restated bylaws, as well as provisions of Delaware law, could impair a takeover attempt.
The collection and use of personal health data of individuals in the European Union is also governed by strict data protection laws. In addition to existing laws, since May 25, 2018, the General Data Protection Regulation (“GDPR”) has imposed obligations with respect to European Union data and substantial fines for breaches of the data protection rules.
The collection and use of personal health data of individuals in the European Union is also governed by strict data protection laws. In addition to existing laws, since May 25, 2018, the General Data Protection Regulation (GDPR) has imposed obligations with respect to European Union data and substantial fines for breaches of the data protection rules.
The CCPA may significantly impact our business activities and require substantial compliance costs that adversely affect business, operating results, prospects and financial condition. Amendments to the CCPA mandated by the California Privacy Rights Act (“CPRA”) will impose additional privacy requirements, effective on January 1, 2023.
The CCPA may significantly impact our business activities and require substantial compliance costs that adversely affect business, operating results, prospects and financial condition. Amendments to the CCPA mandated by the California Privacy Rights Act (CPRA) will impose additional privacy requirements, effective on January 1, 2023.
Limitations on the deductibility of net operating losses could adversely affect our business and financial condition. We have a history of net operating losses. In December 2017, the U.S government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”).
Limitations on the deductibility of net operating losses could adversely affect our business and financial condition. We have a history of net operating losses. In December 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the Tax Act).
Additionally, California has the California Consumer Privacy Act (“CCPA”), which creates individual privacy rights for consumers (as that word is broadly defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.
Additionally, California has the California Consumer Privacy Act (CCPA), which creates individual privacy rights for consumers (as that word is broadly defined in the law) and places increased privacy and security obligations on entities handling personal data of consumers or households.
Moreover, it is possible for a whistleblower to pursue a False Claims Act, (“FCA”), case against us even if the government considers the claim unmeritorious and declines to intervene, which could require us to incur costs defending against such a claim.
Moreover, it is possible for a whistleblower to pursue a False Claims Act (FCA), case against us even if the government considers the claim unmeritorious and declines to intervene, which could require us to incur costs defending against such a claim.
We continue to evaluate the legal issues that arise concerning transfer of personal data of residents of the European Economic Area (“EEA”) member states or the U.K. to the U.S. or other jurisdictions that are not deemed adequate by the European Commission.
We continue to evaluate the legal issues that arise concerning transfer of personal data of residents of the European Economic Area (EEA) member states or the U.K. to the U.S. or other jurisdictions that are not deemed adequate by the European Commission.
Additionally, Novogen had previously applied for patents in a number of countries with respect to the use of their isoflavone compounds, including ME-344. Finally, in September 2013, we acquired patents and patent applications related to zandelisib from Pathway Therapeutics, Inc.
Additionally, Novogen had previously applied for patents in a number of countries with 24 Table of Contents respect to the use of their isoflavone compounds, including ME-344. Finally, in September 2013, we acquired patents and patent applications related to zandelisib from Pathway Therapeutics, Inc.
We may experience reluctance or refusal by current or prospective European clinical trial sites and CROs to use our products, and we may find it necessary or desirable to make further changes to our processing of personal data of EEA or U.K. data subjects.
We may experience reluctance or refusal by current or 26 Table of Contents prospective European clinical trial sites and CROs to use our products, and we may find it necessary or desirable to make further changes to our processing of personal data of EEA or U.K. data subjects.
The loss of services of our Chief Executive Officer or other key employees could adversely impact our operations and ability to generate or raise additional capital. Negative U.S. and global economic conditions may pose challenges to our business strategy, which relies on funding from the financial markets or collaborators.
The loss of services of our Acting Chief Executive Officer, Chief Financial Officer or other key employees could adversely impact our operations and ability to generate or raise additional capital. 25 Table of Contents Negative U.S. and global economic conditions may pose challenges to our business strategy, which relies on funding from the financial markets or collaborators.
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.
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.
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.
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).
As of June 30, 2023, we had outstanding warrants exercisable to purchase 102,513 shares of common stock at an exercise price of $6.80 per share, which expire in October 2027. We also have outstanding options to purchase 1,284,907 shares of common stock.
As of June 30, 2024, we had outstanding warrants exercisable to purchase 102,513 shares of common stock at an exercise price of $6.80 per share, which expire in October 2027. We also have outstanding options to purchase 1,357,213 shares of common stock .
Anson Advisors Inc. holds approximately 13.0% of our outstanding common stock and Cable Car Capital LLC holds approximately 6.9% of our outstanding common stock, and each have sought to exert influence on our business operations and Board of Directors, and we expect that each will or may continue to do so.
Anson Advisors Inc. holds approximately 16.4% of our outstanding common stock and Cable Car Capital LLC holds approximately 9.2% of our outstanding common stock, and each have sought to exert influence on our business operations and Board, and we expect that each will or may continue to do so.
Therefore, our stockholders will not be able to receive a return on their investment 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.
Therefore, our stockholders will not be able to receive a return on their investment unless a strategic transaction that requires a dividend is successful or 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.
The trading price of our common stock could be highly volatile in response to various factors, many of which are beyond our control, including, but not limited to, the following: • failure to successfully develop our drug candidates; • design, results and timing of clinical trials and pre-clinical studies; • announcements of technological innovations by us or our competitors; • new products introduced or announced by us or our competitors; • changes in financial estimates by securities analysts; • actual or anticipated variations in operating results; • expiration or termination of licenses, research contracts or other collaboration agreements; • conditions or trends in the regulatory climate and the biotechnology, pharmaceutical and genomics industries; • instability in the stock market as a result of current or future domestic and global events; • changes in the market valuations of similar companies; • the liquidity of any market for our securities; and • threatened or actual delisting of our common stock from a national stock exchange.
The trading price of our common stock could be highly volatile in response to various factors, many of which are beyond our control, including, but not limited to, the following: • failure to successfully develop our drug candidates; • design, results and timing of clinical trials and pre-clinical studies; • announcements of technological innovations by us or our competitors; • new products introduced or announced by us or our competitors; • changes in financial estimates by securities analysts; • actual or anticipated variations in operating results; • expiration or termination of licenses, research contracts or other collaboration agreements; • conditions or trends in the regulatory climate and the biotechnology, pharmaceutical and genomics industries; • instability in the stock market as a result of current or future domestic and global events; • changes in the market valuations of similar companies; • the liquidity of any market for our securities; and • threatened or actual delisting of our common stock from a national stock exchange. 28 Table of Contents Equity markets in general, and the market for biotechnology and life sciences companies in particular, have experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies traded in those markets.
Future market disruptions and/or illiquidity would be expected to have an adverse effect on our business, financial condition, results of operations and cash flows.
Disruptions in the capital markets in the past have resulted in illiquidity in parts of the capital markets. Future market disruptions and/or illiquidity would be expected to have an adverse effect on our business, financial condition, results of operations and cash flows.
Our commercial success will depend, in part, on our ability to obtain and maintain effective patent protection for our compounds and their use in treating, preventing, or curing cancer, and to successfully defend patent rights in those technologies against third party challenges.
Should we resume development of our drug candidate or any future drug candidates, our commercial success will depend, in part, on our ability to obtain and maintain effective patent protection for our compounds and their use in treating, preventing, or curing cancer, and to successfully defend patent rights in those technologies against third-party challenges.
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.
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 cyber-attacks or breached due to employee error, malfeasance or other disruptions.
Risks Related to Our Business Risks Related to Our Development Stage We are currently operating in a period of capital markets disruption and economic uncertainty.
Risks Related to Securities Markets and Investment in our Stock We are currently operating in a period of capital markets disruption and economic uncertainty.
The U.S. capital markets are currently experiencing extreme volatility and disruption following the global outbreak of COVID-19, high inflation and the government response thereto, potential economic downturn, publicized failures in the regional banking sector, the war in Ukraine, and other global events. Disruptions in the capital markets in the past have resulted in illiquidity in parts of the capital markets.
The U.S. capital markets are currently experiencing extreme volatility and disruption following the global outbreak of COVID-19, high inflation and the government response thereto, potential economic downturn, publicized failures in the regional banking 27 Table of Contents sector, the war in Ukraine, the upcoming U.S. presidential election, and other global events.
We have never paid or declared any cash dividends on our common stock, and we intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future.
Other than the Capital Return, w e have never paid or declared any cash dividends on our common stock, and we intend to retain any future earnings to finance the development and expansion of our business. We do not anticipate paying any cash dividends on our common stock in the foreseeable future other than in connection with a strategic transaction.
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.
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.
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.
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.
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.
The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our Board, 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.
Risks Related to Securities Markets and Investment in our Stock Our business could be negatively impacted as a result of any future activism campaigns by Anson Advisors Inc. and Cable Car Capital LLC and other activist investors.
In addition, delisting from Nasdaq may negatively impact our reputation and, consequently, our business. Our business could be negatively impacted as a result of any future activism campaigns by Anson Advisors Inc. and Cable Car Capital LLC and other activist investors.
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.
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.
Additional risks not presently known to us or that we currently deem immaterial may also affect our business, operating results, prospects or financial condition. Summary Risk Factors Our business is subject to numerous risks and uncertainties that you should consider before investing in our common stock.
Additional risks not presently known to us or that we currently deem immaterial may also affect our business, operating results, prospects or financial condition.
Continued pursuit or further activities by Anson Advisors Inc. and Cable Car Capital LLC, or by other activist shareholders, could result in yet additional distractions and costs and could lead to a materially adverse impact on our business or operating results. 38 Table of Contents 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.
Continued pursuit or further activities by Anson Advisors Inc. and Cable Car Capital LLC, or by other activist shareholders, could result in yet additional distractions and costs and could lead to a materially adverse impact on our business or operating results.
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.
General Business Risks 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.
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.
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.
These events have limited and could continue to limit our capital investment considerations, limit our abilit y to fund further clinical development and have a material negative impact on our operating results. We will need substantial additional funds to progress the clinical trial programs for our drug candidates, and to develop new compounds.
These events have limited and could continue to limit our capital investment considerations, limit our abilit y to fund further clinical development, limit our ability to identify and implement any potential strategic alternatives and have a material negative impact on our operating results.
If we are unable to identify, select and acquire or license suitable product candidates from third parties on terms acceptable to us, our business and prospects may be limited. Risks Related to Our Intellectual Property Our commercial success is dependent, in part, on obtaining and maintaining patent protection and preserving trade secrets, which cannot be guaranteed.
Risks Related to Our Intellectual Property The value of our intellectual property is dependent, in part, on obtaining and maintaining patent protection and preserving trade secrets, which cannot be guaranteed.
Stockholders will experience significant dilution if we sell these future shares at prices significantly below the price at which such previous stockholders invested.
Stockholders will experience significant dilution if we sell these future shares at prices significantly below the price at which such previous stockholders invested. Other than as described below or in connection with a strategic transaction we do not intend to pay, and we have not paid, any cash dividends on our shares of common stock.
We are not presently engaged in drug discovery activities. In order to expand our pipeline of drug candidates for future development, we may need to purchase or in-license any such drug candidates.
We are not permitted to market or promote any of our drug candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities; should we resume development activities in the future we may never receive such regulatory approval for voruciclib or any future drug candidates.
The failure to develop and commercialize our drug candidates would have a material adverse effect on our business, operating results, prospects and financial condition.
Any of the foregoing risks could have a material adverse effect on our business, financial condition and prospects. If a strategic transaction is not consummated, our Board may decide to pursue a dissolution and liquidation.
Removed
Set forth below is a summary of the principal risks we face: • We are currently operating in a period of capital markets disruption and economic uncertainty; • We will need substantial additional funds to progress the clinical trial programs for our drug candidates, to commercialize our drug candidates and to develop new compounds.
Added
Risks Related to Our Review of Strategic Alternatives We may not be successful in identifying and implementing any potential strategic alternatives in a timely manner, or at all, and any strategic transactions that we may consummate in the future could have negative consequences.
Removed
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.
Added
In July 2024, we announced that we are undertaking a comprehensive exploration of strategic alternatives focused on maximizing stockholder value. We expect to devote substantial time and resources to exploring strategic alternatives that our Board believes will maximize stockholder value.
Removed
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.
Added
Despite management devoting significant efforts to identify and evaluate potential strategic alternatives, there can be no assurance that this strategic review process will result in us pursuing any transaction or that we will be able to successfully consummate any particular strategic transaction on attractive terms, on a timely basis, or at all.
Removed
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.
Added
For example, certain types of strategic transactions may require third-party consents, such as stockholder approval, which could be difficult or costly to obtain. We have not set a timetable for completion of this strategic review process, and our Board has not approved a definitive course of action.
Removed
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.
Added
Additionally, there can be no assurance that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated or lead to increased stockholder value or that we will make any cash distributions to our stockholders.
Removed
Increases 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.
Added
The process of continuing to evaluate our strategic alternatives may be costly, time-consuming and complex, and we may incur significant legal, accounting and advisory fees and other expenses, some of which may be incurred regardless of whether we successfully enter into a transaction. We may also incur additional unanticipated expenses in connection with this process.
Removed
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.
Added
Any such expenses will decrease the remaining cash available for use in our business. Our ability to pursue or consummate strategic transactions also depends upon our ability to retain certain of our employees, the loss of whose services may adversely impact the ability to 20 Table of Contents identify, negotiate and consummate such transaction.
Removed
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.
Added
If we are unable to successfully retain certain of our key remaining personnel, we are at risk of a disruption to our exploration and consummation of one or more strategic transactions. In addition, potential counterparties in a strategic transaction involving us may place minimal or no value on our assets and our public listing.
Removed
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.
Added
Further, should we resume the development of future drug candidates, such as one or more of the programs in our pipeline for which we halted further development, the development and any potential commercialization of our future drug candidates will require substantial additional cash to fund the costs associated with conducting the necessary preclinical and clinical testing and obtaining regulatory approval.
Removed
If we are unable to obtain additional funds on favorable terms or at all, we may be required to cease or reduce our operations.
Added
Consequently, any potential counterparty in a strategic transaction involving us may choose not to spend additional resources to resume or continue development of our future drug candidates and may attribute little or no value, in such a transaction, to our future drug candidates.
Removed
We may sell additional shares of common stock, and securities exercisable for or convertible into shares of our common stock, or we may seek to obtain debt financing, in each case, to satisfy our capital and operating needs; however, such transactions will be subject to market conditions and there can be no assurance any such transactions will be completed.
Added
In addition, any strategic transactions that we may pursue could have a variety of negative consequences, and we may enter into a transaction that yields unexpected results that adversely affect our business and decreases the remaining cash available for use in our business.
Removed
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.
Added
Any potential transaction would be dependent on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest of third parties in a potential transaction with us, obtaining stockholder approval and the availability of financing to third parties in a potential transaction with us on reasonable terms.
Removed
If we raise additional capital through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, technologies, intellectual property, future revenue streams or research programs or grant licenses on terms that may not be favorable to us.
Added
There can be no assurance that any particular course of action, business arrangement or transaction, or series of transactions, will be pursued, successfully consummated, lead to increased stockholder value, or achieve the anticipated results.
Removed
We could also be required to seek collaborators for one or more of our current or future product candidates at an earlier stage than otherwise would be desirable or relinquish our rights to product candidates or technologies that we otherwise would seek to develop or commercialize ourselves.
Added
If we are not successful in setting forth a new strategic path for us, or if our plans are not executed in a timely fashion, this may cause reputational harm with our stockholders and the value of our securities may be adversely impacted.
Removed
If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us when we deem it is required, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our research and development initiatives.
Added
In addition, speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties related to the future of us could cause our stock price to fluctuate significantly.
Removed
Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our Common Stock to decline. 21 Table of Contents 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.
Added
Even if we successfully consummate any strategic transaction, or series of transactions, from our strategic assessment, we may fail to realize all or any of the anticipated benefits of any such transaction, such benefits may take longer to realize than expected, we may encounter integration difficulties or we may be exposed to other operational and financial risks.
Removed
You should consider our prospects in light of the risks and difficulties frequently encountered by clinical research stage and developmental companies.
Added
Our ability to realize the anticipated benefits of any potential strategic transaction will depend on a number of factors, including our ability to integrate with any future business partner, our ability to obtain value for portions of our business, if divested, and our ability to generate future stockholder value.
Removed
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).

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

43 edited+36 added−22 removed18 unchanged
Biggest changeThe 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.
Biggest changeThe weighted-average exercise price presented is the weighted-average exercise price of vested and unvested options. 32 Table of Contents Item 6. [Reserved] Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. 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.
For additional details regarding these agreements, see the section titled Note 3—Other License Agreements and Note 8—Commitments and Contingencies to our consolidated financial statements and related notes included elsewhere in this Annual Report; • Obligations under contracts which are cancelable without significant penalty; • Purchase orders issued in the ordinary course of business as they represent authorizations to purchase the items rather than binding agreements; and • Contracts in the normal course of business with clinical supply manufactures and with vendors for preclinical studies, research supplies and other services and products for operating purposes.
For additional details regarding these agreements, see the section titled Note 8—Other License Agreements and Note 6—Commitments and Contingencies to our consolidated financial statements and related notes included elsewhere in this Annual Report; • Obligations under contracts which are cancelable without significant penalty; • Purchase orders issued in the ordinary course of business as they represent authorizations to purchase the items rather than binding agreements; and • Contracts in the normal course of business with clinical supply manufactures and with vendors for preclinical studies, research supplies and other services and products for operating purposes.
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.
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 are partially dependent upon accurate reporting by CROs and other third-party vendors.
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.
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 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.
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.
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. The warrants expired in May 2023.
Our future capital requirements will depend on many factors, including: • the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for our product candidates; • the costs, timing and outcome of regulatory review of our product candidates; • the costs of establishing or contracting for sales, marketing and distribution capabilities if we obtain regulatory approvals to market our product candidates; 46 Table of Contents • the costs of securing and producing drug substance and drug product material for use in preclinical studies, clinical trials and for use as commercial supply; • the costs of securing manufacturing arrangements for development activities and commercial production; • the scope, prioritization and number of our research and development programs; • the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under future collaboration agreements, if any; and • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims.
Our future capital requirements will depend on many factors, including: • the Board's decision regarding strategic alternatives; • the scope, progress, results and costs of drug discovery, preclinical development, laboratory testing and clinical trials for our product candidates; • the costs, timing and outcome of regulatory review of our product candidates; • the costs of establishing or contracting for sales, marketing and distribution capabilities if we obtain regulatory approvals to market our product candidates; • the costs of securing and producing drug substance and drug product material for use in preclinical studies, clinical trials and for use as commercial supply; • the costs of securing manufacturing arrangements for development activities and commercial production; • the scope, prioritization and number of our research and development programs; • the extent to which we are obligated to reimburse, or entitled to reimbursement of, clinical trial costs under future collaboration agreements, if any; and • the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims.
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.
Costs incurred related to the purchase or 35 Table of Contents 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.
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.
Changes in estimates are accounted for prospectively.‌ In response to the discontinuance of zandelisib development with KKC during the fiscal 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.
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.
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.
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.
Net cash used in in operating activities during the fiscal year ended June 30, 2023, of $52.5 million consisted of our net loss of $31.8 million and $24.9 million cash used in operating activities partially offset by $4.3 million of noncash items.
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.
To date, we have obtained cash and funded our operations primarily through equity financings and license agreements and to resume the development of our drug candidates we would require one or more capital transactions, whether through the sale of equity securities, debt financing, license agreements or entry into strategic partnerships at some point in the future.
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.
As of June 30, 2024, we have outstanding warrants to purchase 102,513 shares of our common stock, all issued to Torreya Partners LLC in fiscal year 2023. The warrants are fully vested, exercisable at a price of $6.80 per share and expire in October 2027. No warrants were exercised during the years June 30, 2024 and 2023.
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.
Prior to June 30, 2024, the Termination Amounts had been paid and we had no further financial obligations under the Agreement. 37 Table of Contents As of June 30, 2024, 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.
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.
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 13, 2024, there were 6,662,857 shares of our common stock outstanding and 321 holders of record of our common stock.
(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.
(Nasdaq: MEIP) is a pharmaceutical company that has been developing novel and differentiated cancer therapies. We built our pipeline by acquiring promising cancer agents and creating value in programs through clinical development, strategic partnerships, and out-licensing or commercialization, as appropriate.
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.
For a discussion of outstanding warrants and other securities exercisable for or convertible into shares of our common stock, see Note 10 - Stockholders' Equity and Note 11 - Share-based Compensation under Item 8 Consolidated Financial Statements and Supplementary Data in this Annual Report.
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.
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 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.
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.
Net cash provided by investing activities for the fiscal year ended June 30, 2024, was $49.1 million compared to $53.7 million for the fiscal year ended June 30, 2023.
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.
The decrease in net cash provided by investing activities was due to fewer purchases of short-term investments offset by a lower amount of maturities in short-term investments being utilized to fund ongoing operations during the fiscal year ended June 30, 2024.
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.
Other Income, Net: Other income, net, decreased by $1.7 million to $3.2 million for the fiscal year ended June 30, 2024, as compared to $4.9 million for the fiscal year ended June 30, 2023.
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.
We recorded a noncash gain of $1.6 million during the fiscal year ended June 30, 2023, due to a change in the fair value of our warrant liability. The warrants expired in May 2023. New Accounting Pronouncements See Note 2. Summary of Significant Accounting Policies , to the Consolidated Financial Statements included in Item 8.
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) 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.
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) 1,270,950 $ 32.50 465,633 Equity compensation plans not approved by security holders (2) 86,263 18.25 130,737 Total 1,357,213 $ 31.60 596,370 (1) Consists of 1,270,950 shares of common stock issuable upon exercise of options granted under the MEI Pharma, Inc.
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.
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.
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.
Net cash used in financing activities for the fiscal year ended June 30, 2024, was $11.9 million compared to $40,000 of cash used in financing activities for the fiscal year ended June 30, 2023.
"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.
Consolidated Financial Statements and Supplementary Data of this Annual Report. Liquidity and Capital Resources We have accumulated losses of $388.2 million since inception and expect to incur operating losses and generate negative cash flows from operations for the foreseeable future. As of June 30, 2024, we had $38.3 million in cash, cash equivalents and short-term investments.
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.
Securities authorized for issuance under equity compensation plans The table below shows, as of June 30, 2024, information for equity compensation plans previously approved by stockholders and for compensation plans not previously approved by stockholders.
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.
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.
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.
General and Administrative : General and administrative expenses decreased $9.8 million to $23.3 million for the fiscal year ended June 30, 2024, compared to $33.1 million for the fiscal year ended June 30, 2023.
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.
Equity Transactions Shelf Registration Statement We have a shelf registration statement (February 2024 Shelf Registration Statement) that permits us to sell, from time to time, up to $100.0 million of common stock, preferred stock, warrants rights and units subject to the "Baby Shelf Limitation" described below.
The warrants were fully vested and exercisable at a price of $50.80 per share.
Warrants In May 2023, outstanding warrants to purchase 802,949 shares of our common stock expired. The warrants were fully vested and exercisable at a price of $50.80 per share.
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.
Costs related to voruciclib increased $1.1 million due to higher clinical costs partially offset by lower manufacturing costs. Costs related to ME-344 increased $3.6 million due to higher clinical costs related to the Phase 1b study and manufacturing costs of ME-344 to support clinical and nonclinical studies.
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.
Our approach to oncology drug development has been 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.
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.
The net decrease was primarily due to $5.5 million less in personnel costs, which includes $1.7 million resulting from our reduction-in-force and other termination 36 Table of Contents related benefits, as well as $0.9 million less in noncash stock-based compensation, a $1.7 million decrease in external professional services, $1.5 million decrease in corporate overhead costs and a $0.2 million decrease in legal fees.
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.
(2) Consists of 86,263 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. 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.
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.
Sources and Uses of Our Cash Net cash used in operating activities for the fiscal year ended June 30, 2024, of $50.5 million consisted of our net income of $17.8 million and $84.3 million cash used by operating activities partially offset by $16.0 million for noncash items.
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).
Except as provided below, there have been no material changes from the critical accounting estimates identified below nor our significant accounting policies set forth in Note 2.
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.
Clinical Development Programs Our drug candidate 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. For a more complete discussion of our business, see the section of this Annual Report Item 1. Business above.
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.
Research and Development : The following table illustrates the components of our research and development expenses for the years presented (in thousands): For the Fiscal Year Ended June 30, 2024 2023 zandelisib $ 435 $ 25,900 voruciclib 3,413 2,335 ME-344 4,724 1,137 Other 7,989 23,078 Total research and development expenses $ 16,561 $ 52,450 Costs related to zandelisib decreased $25.5 million primarily as a result of the discontinuation of the program during fiscal year 2023 with lower costs in fiscal year 2024 associated with wind-down activities.
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.
We do not anticipate paying additional cash dividends in the foreseeable future other than in connection with a strategic transaction which requires it, and currently intend to retain all available funds and future earnings, if any, to support operations. Any future determination related to our dividend policy will be made at the discretion of our board of directors.
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.
The February 2024 Shelf Registration Statement was filed February 20, 2024 and declared effective February 28, 2024. At-The-Market Equity Offering On February 20, 2024, we entered into a capital on demand sales agreement with JonesTrading Institutional Services LLC, pursuant to which we can offer and sell shares having an aggregate offering price of up to $25.0 million (ATM Program).
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.
Other research and development costs decreased $15.1 million primarily due to a decrease of $14.1 million in personnel costs, including a $2.6 million decrease in one-time employee termination benefits, resulting from our reductions in workforce during fiscal year 2023 and a $0.4 million decrease in noncash stock-based compensation.
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.
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. 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.
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.
We will continue to incur research and development expenses in connection with clinical trial closing costs and the completion of certain ongoing nonclinical activities. We believe our cash balance, including our short-term investments, is sufficient to fund operations for at least the next 12 months.
Removed
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”).
Added
Dividends On November 6, 2023, pursuant to the Cooperation Agreement, the Board declared a special cash dividend of $1.75 per share of common stock to stockholders of record at the close of business on November 17, 2023.
Removed
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
The total dividend of $11.7 million was paid on December 6, 2023, and was recorded as a reduction of additional paid-in capital in the consolidated statements of stockholders' equity, as we have an accumulated deficit, rather than retained earnings.
Removed
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.
Added
Recent Developments Notification of Strategic Alternatives Evaluation On July 22, 2024, we announced that our Board had determined unanimously to begin the evaluation of our strategic alternatives, including potential transactions as well as an orderly wind down of operations, if appropriate, to maximize the value of our assets for our stockholders.
Removed
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
We commenced a reduction-in-force beginning August 1, 2024, which will continue in stages as our operational and strategic direction evolves. We have discontinued the clinical development of voruciclib, while certain nonclinical activities related to MEI’s drug candidate assets will continue to be conducted by us.
Removed
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
As part of the review of strategic alternatives, we may consider options such as out-licensing opportunities for existing programs and merger and acquisition opportunities. Consistent with our intention to preserve cash, David M. Urso, our President and Chief Executive Officer, and Richard Ghalie, MD, our Chief Medical Officer, have stepped down effective August 1, 2024. Mr.
Removed
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.
Added
Urso also left the Board at that date. We have entered into consulting agreements with both Mr. Urso and Dr. Ghalie under which they will remain available to assist us in our strategic efforts. Charles V. Baltic III, the Chairperson of the Board, also stepped down from the Board contemporaneously with the announcement on July 22, 2024.
Removed
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
Our Board has appointed Justin J. File, our current Chief Financial Officer, to assume the position of Acting Chief Executive Officer and has appointed Frederick W. Driscoll as Chairperson of the Board.
Removed
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”).
Added
Cooperation Agreement On October 31, 2023, we announced our entry into a Cooperation Agreement (Cooperation Agreement) with Anson Funds Management LP and Cable Car Capital LLC (Anson and Cable Car, respectively), which, among other non-financial related items provided for a capital return to stockholders in the form of a dividend in the amount of $1.75 per share of common stock, as further discussed below.
Removed
On September 18, 2023, we filed our definitive consent revocation statement urging stockholders to revoke their consents and reject the Consent Solicitation.
Added
Additionally, the Cooperation Agreement contemplated a potential second return of capital not to exceed $9.33 million (Potential Second Return of Capital) if authorized by Board should our ongoing ME-344 Phase 1b trial fail to meet certain defined endpoints or our Board determines not to proceed with a second cohort.
Removed
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.
Added
In April 2024, the Board unanimously determined not to proceed with the Potential Second Return of Capital under the Cooperation Agreement in order to conserve resources and align strategic investment, and thereby extend our operational runway. As part of the Cooperation Agreement, Anson and Cable Car withdrew their consent solicitation and agreed to abide by customary standstill provisions.
Removed
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
Additionally, we reimbursed Anson's and Cable Car’s fees and expenses related to their engagement 33 Table of Contents with us as of the date of the Cooperation Agreement in an amount of $1.1 million, which is recorded within general and administrative expenses in the consolidated statements of operations for the fiscal year ended June 30, 2024.
Removed
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.
Added
Cash Dividend On November 6, 2023, pursuant to the Cooperation Agreement, the Board declared a special cash dividend of $1.75 per share of common stock to stockholders of record at the close of business on November 17, 2023.
Removed
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
The total dividend of $11.7 million was paid on December 6, 2023, and was recorded as a reduction of additional paid-in capital in the consolidated statements of stockholders' equity, as we have an accumulated deficit, rather than retained earnings.
Removed
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
In no event will we sell securities registered on this registration statement in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as our public float remains below $75 million (Baby Shelf Limitation).
Removed
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
As of January 2, 2024, the date used under applicable rules of the Securities and Exchange Commission to determine our public float at the commencement of the offering, one-third of our public float was equal to approximately $9.9 million. As of June 30, 2024, no shares have been issued and sold under our ATM Program.
Removed
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
Rights Agreement On October 1, 2023, our Board approved and adopted a rights agreement (Rights Agreement) by and between us and Computershare, Inc., as Rights Agent (as defined in the Rights Agreement).
Removed
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
Pursuant to the Rights Agreement, the Board declared a dividend of one preferred share purchase right (each, a Right) for each outstanding share of our common stock, par value $0.00000002 (each, a Common Share and collectively, the Common Shares). The Rights are distributable to stockholders of record as of the close of business on October 12, 2023.
Removed
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
One Right also will be issued together with each Common Share issued by us after October 12, 2023, but before the Distribution Date (as defined in the Rights Agreement) (or the earlier of the redemption or expiration of the Rights) and, in certain circumstances, after the Distribution Date.
Removed
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.

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