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What changed in Benitec Biopharma Inc.'s 10-K — 2022 vs 2023

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

+353 added−312 removedSource: 10-K (2023-09-21) vs 10-K (2022-09-02)

Top changes in Benitec Biopharma Inc.'s 2023 10-K

353 paragraphs added · 312 removed · 247 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

84 edited+21 added−14 removed201 unchanged
Biggest changePharyngeal Muscle Tissue Transduction Levels for BB-301 Regarding Gene Expression Levels Observed for BB-301 Within the Pharyngeal Muscle Tissues (Figure 8, Figure 9, Figure 10): • BB-301 encodes two distinct siRNA species (i.e., siRNA13 and siRNA17) which are each, independently, capable of inhibiting (i.e., “silencing”) the expression of the mutant form of the PABPN1 protein and the wild type (i.e., endogenous) form of the PABPN1 protein (importantly, the mutant form of the PABPN1 protein underlies the development and progression of OPMD). • BB-301 also codes for a wild type version of the PABPN1 protein whose intracellular expression is unaffected by the inhibitory activities of siRNA13 and siRNA17, and this codon optimized PABPN1 protein (i.e., coPABPN1) serves to replenish the endogenous form of the PABPN1 protein and to replace the mutant form of PABPN1 that underlies the development and progression of OPMD in diseased tissues. • For comparative purposes, it should be noted that the average range of expression for wild type PABPN1 within the pharyngeal muscle cells of Beagle dogs is 4.5 copies per cell-to-7.8 copies per cell. 16 Table of Contents Figure 8. siRNA13 Expression Levels for BB-301 within Pharyngeal Muscle Tissues 17 Table of Contents Figure 9. siRNA17 Expression Levels for BB-301 within Pharyngeal Muscle Tissues 18 Table of Contents Figure 10. coPABPN1 Expression Levels for BB-301 within Pharyngeal Muscle Tissues Regarding Wild Type PABPN1 Silencing (i.e. target “knock-down”) Observed for BB-301 Within the Pharyngeal Muscle Tissues (Figure 11): • As noted above, BB-301 encodes two distinct siRNA species (i.e., siRNA13 and siRNA17) which are each, independently, capable of inhibiting (i.e., “silencing”) the expression of all forms of the PABPN1 protein (siRNA13 and siRNA17 silence the expression of both wild type PABPN1 [wtPABPN1] and mutant PABPN1). • While the Beagle dog subjects treated in the BB-301 Pilot Dosing Study did not express mutant PABPN1, the level of BB-301-driven gene silencing for the PABPN1 target can be accurately assessed due to the equivalent inhibitory effects of siRNA13 and siRNA17 on both wtPABPN1 and mutant PABPN1. • Thus, the wtPABPN1 silencing activity observed in the BB-301 Pilot Dosing Study served as a surrogate for the activity that would be anticipated in the presence of mutant PABPN1. • BB-301 has been evaluated in prior nonclinical studies in animals that express mutant PABPN1 and manifest the key signs and symptoms of OPMD and, in these animal models of OPMD, the achievement of PABPN1 silencing levels of 31% inhibition or higher led to resolution of OPMD disease symptoms and correction of the histological hallmarks of OPMD. 19 Table of Contents Figure 11.
Biggest changeFigure 8. siRNA13 Expression Levels for BB-301 within Pharyngeal Muscle Tissues Figure 9. siRNA17 Expression Levels for BB-301 within Pharyngeal Muscle Tissues 16 Table of Contents Figure 10. coPABPN1 Expression Levels for BB-301 within Pharyngeal Muscle Tissues Regarding Wild Type PABPN1 Silencing (i.e. target “knock-down”) Observed for BB-301 Within the Pharyngeal Muscle Tissues (Figure 11): • As noted above, BB-301 encodes two distinct siRNA species (i.e., siRNA13 and siRNA17) which are each, independently, capable of inhibiting (i.e., “silencing”) the expression of all forms of the PABPN1 protein (siRNA13 and siRNA17 silence the expression of both wild type PABPN1 [wtPABPN1] and mutant PABPN1). • While the Beagle dog subjects treated in the BB-301 Pilot Dosing Study did not express mutant PABPN1, the level of BB-301-driven gene silencing for the PABPN1 target can be accurately assessed due to the equivalent inhibitory effects of siRNA13 and siRNA17 on both wtPABPN1 and mutant PABPN1. • Thus, the wtPABPN1 silencing activity observed in the BB-301 Pilot Dosing Study served as a surrogate for the activity that would be anticipated in the presence of mutant PABPN1. • BB-301 has been evaluated in prior nonclinical studies in animals that express mutant PABPN1 and manifest the key signs and symptoms of OPMD and, in these animal models of OPMD, the achievement of PABPN1 silencing levels of 31% inhibition or higher led to resolution of OPMD disease symptoms and correction of the histological hallmarks of OPMD. 17 Table of Contents Figure 11.
While efficacy has been demonstrated in several clinical indications through the use of this approach, siRNA-based approaches maintain a number of limitations, including: 5 Table of Contents • Clinical management requires repeat administration of the siRNA-based therapeutic agent for multiple cycles to maintain efficacy; • Long-term patient compliance challenges due to dosing frequencies and treatment durations; • Therapeutic concentrations of siRNA are not stably maintained because the levels of synthetic siRNA in the target cells decrease over time; • Novel chemical modifications or novel delivery materials are typically required to introduce the siRNA into the target cells, making it complicated to develop a broad range of therapeutics agents; • Potential adverse immune responses, resulting in serious adverse effects; • Requirement for specialized delivery formulations for genetic disorders caused by mutations of multiple genes; and • siRNA acts only to silence genes and cannot be used to replace defective genes with normally functioning genes.
While efficacy has been demonstrated in several clinical indications through the use of this approach, siRNA-based approaches maintain a number of limitations, including: • Clinical management requires repeat administration of the siRNA-based therapeutic agent for multiple cycles to maintain efficacy; 5 Table of Contents • Long-term patient compliance challenges due to dosing frequencies and treatment durations; • Therapeutic concentrations of siRNA are not stably maintained because the levels of synthetic siRNA in the target cells decrease over time; • Novel chemical modifications or novel delivery materials are typically required to introduce the siRNA into the target cells, making it complicated to develop a broad range of therapeutics agents; • Potential adverse immune responses, resulting in serious adverse effects; • Requirement for specialized delivery formulations for genetic disorders caused by mutations of multiple genes; and • siRNA acts only to silence genes and cannot be used to replace defective genes with normally functioning genes.
We cannot predict the likelihood, nature or extent of adverse governmental regulation that might arise from future legislative, judicial, or administrative action, either in the United States or abroad. Recent Developments in Regulation of Gene Therapy The FDA has provided guidance for the development of gene therapy products.
We cannot predict the likelihood, nature or extent of adverse governmental regulation that might arise from future legislative, judicial, or administrative action, either in the United States or abroad. Recent Developments in Regulation of Gene Therapy Government Regulation in the United States The FDA has provided guidance for the development of gene therapy products.
In the future, if and when our products receive FDA approval, or approval from an equivalent regulatory body in another jurisdiction in which patent protection is sought or obtained, we expect to apply for patent term extensions on patents covering those products. 23 Table of Contents Trademarks Our trademarks include registrations for company branding and product names for our pipeline in development.
In the future, if and when our products receive FDA approval, or approval from an equivalent regulatory body in another jurisdiction in which patent protection is sought or obtained, we expect to apply for patent term extensions on patents covering those products. 22 Table of Contents Trademarks Our trademarks include registrations for company branding and product names for our pipeline in development.
None of our employees is represented by any labor union. As of June 30, 2022, 17 employees were located in the United States of America, and 1 employee was located in Australia. Corporate Information We were incorporated as a Delaware corporation on November 22, 2019 and completed the Re-domiciliation April 15, 2020.
None of our employees is represented by any labor union. As of June 30, 2023, 17 employees were located in the United States of America, and 1 employee was located in Australia. Corporate Information We were incorporated as a Delaware corporation on November 22, 2019 and completed the Re-domiciliation April 15, 2020.
This technology has broad application in AAV-based gene therapies; • The capabilities to drive the development of a pipeline of programs focused on chronic diseases with either large patient populations, or rare diseases, which may potentially support the receipt of Orphan Drug Designation, including OPMD; and 8 Table of Contents • A growing portfolio of patents protecting improvements to our ddRNAi, and silence and replace, technology and product candidates through at least 2036, with additional patent life anticipated through at least 2040.
This technology has broad application in AAV-based gene therapies; • The capabilities to drive the development of a pipeline of programs focused on chronic diseases with either large patient populations, or rare diseases, which may potentially support the receipt of Orphan Drug Designation, including OPMD; and • A growing portfolio of patents protecting improvements to our ddRNAi, and silence and replace, technology and product candidates through at least 2036, with additional patent life anticipated through at least 2040.
Dose-Dependent shRNA Expression Figure 6b. Dose-Dependent PABPN1 Inhibition and Transgene Expression 13 Table of Contents Figure 6c. Dose-Dependent Decreases in Intranuclear Inclusions Figure 6d.
Dose-Dependent shRNA Expression 12 Table of Contents Figure 6b. Dose-Dependent PABPN1 Inhibition and Transgene Expression Figure 6c. Dose-Dependent Decreases in Intranuclear Inclusions 13 Table of Contents Figure 6d.
If we receive marketing and commercialization approval for any of our 24 Table of Contents product candidates, we intend to market the product through strategic alliances and distribution agreements with third parties. In certain cases, we may market an approved product directly worldwide or in selected geographical segments.
If we receive marketing and commercialization approval for any of our 23 Table of Contents product candidates, we intend to market the product through strategic alliances and distribution agreements with third parties. In certain cases, we may market an approved product directly worldwide or in selected geographical segments.
Following the implementation of these methodological modifications, Benitec demonstrated a 248-fold improvement (+24,650%) in BB-301 transduction of the HP muscle and a 111-fold improvement (+11,027%) in BB-301 transduction of the TP muscle relative to the levels of BB-301 transduction observed by the previous BB-301 licensee (Figure 12). 20 Table of Contents Figure 12.
Following the implementation of these methodological modifications, Benitec demonstrated a 248-fold improvement (+24,650%) in BB-301 transduction of the HP muscle and a 111-fold improvement (+11,027%) in BB-301 transduction of the TP muscle relative to the levels of BB-301 transduction observed by the previous BB-301 licensee (Figure 12). 18 Table of Contents Figure 12.
This patent family exists as a PCT application and was filed solely in the name of Benitec. AAV with modified phospholipase domain The Benitec patent portfolio includes a single patent family, entitled “ Adeno-associated virus (AAV) with modified phospholipase domain ,” which relates to an AAV having a modified phospholipase (PLA2) domain in the capsid.
This patent family exists as a PCT application and was filed solely in the name of Benitec. AAV with modified phospholipase domain The Benitec patent portfolio includes a single patent family, entitled “Adeno-associated virus (AAV) with modified phospholipase domain,” which relates to an AAV having a modified phospholipase (PLA2) domain in the capsid.
Our Approach to the Treatment of Genetic Diseases—ddRNAi and Silence and Replace Our proprietary silence and replace approach to the treatment of genetic diseases combines RNAi with wild type gene replacement to drive sustained silencing of disease-causing genes and concomitant restoration of functional wild type genes following a single administration of the therapeutic agent.
Our Approach to the Treatment of Genetic Diseases—ddRNAi and Silence and Replace Our proprietary silence and replace approach to the treatment of genetic diseases combines RNAi with wild type gene replacement to drive permanent silencing of disease-causing genes and concomitant restoration of functional wild type genes following a single administration of the therapeutic agent.
Oculopharyngeal Muscular Dystrophy—OPMD OPMD is an insidious, autosomal-dominant, late-onset degenerative muscle disorder that typically presents in patients at 40-to-50 years of age. The disease is characterized by progressive swallowing difficulties (dysphagia) 7 Table of Contents and eyelid drooping (ptosis). OPMD is caused by a specific mutation in the poly(A)-binding protein nuclear 1, or PABPN1, gene.
Oculopharyngeal Muscular Dystrophy—OPMD OPMD is an insidious, autosomal-dominant, late-onset degenerative muscle disorder that typically presents in patients at 40-to-50 years of age. The disease is characterized by progressive swallowing difficulties (dysphagia) and eyelid drooping (ptosis). OPMD is caused by a specific mutation in the poly(A)-binding protein nuclear 1, or PABPN1, gene.
If a product candidate that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biological product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the 31 Table of Contents product with orphan exclusivity.
If a product candidate that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biological product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity.
The Biologics Price Competition and Innovation Act of 2009, which was included within the Patient Protection and Affordable Care Act, created an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference biological product, and grants a reference biologic twelve 34 Table of Contents years of exclusivity from the time of first licensure.
The Biologics Price Competition and Innovation Act of 2009, which was included within the Patient Protection and Affordable Care Act, created an abbreviated approval pathway for biological products shown to be similar to, or interchangeable with, an FDA-licensed reference biological product, and grants a reference biologic twelve years of exclusivity from the time of first licensure.
This increasingly competitive landscape may compromise the development of our product candidates. Government Regulation As a pharmaceutical and biological product company that wishes to conduct clinical trials and ultimately obtain marketing approval in the United States, we are subject to extensive regulation by the FDA, and other federal, state, and local regulatory agencies.
This increasingly competitive landscape may compromise the development of our product candidates. 24 Table of Contents Government Regulation As a pharmaceutical and biological product company that wishes to conduct clinical trials and ultimately obtain marketing approval in the United States, we are subject to extensive regulation by the FDA, and other federal, state, and local regulatory agencies.
Biologics License Application Approval Process In order to obtain approval to market a biologic in the United States, a BLA must be submitted to the FDA that provides data from nonclinical studies and clinical trials and manufacturing information establishing to the FDA’s satisfaction the safety, purity, and potency or efficacy of the investigational product for the proposed indication.
Biologics License Application Approval Process In order to obtain approval to market a biologic in the United States, a BLA must be submitted to the FDA that provides data from nonclinical studies and clinical trials and manufacturing information establishing to the 28 Table of Contents FDA’s satisfaction the safety, purity, and potency or efficacy of the investigational product for the proposed indication.
This patent family is directed to RNAi agents targeting specific regions within mutant 21 Table of Contents PABPN1 variants causative of OPMD, as well as use of those RNAi agents in combination with PABPN1 replacement constructs to treat OPMD. More specifically, this family includes claims covering shmiR17 of BB-301 This patent family entered the national/regional phase in October/November 2018.
This patent family is directed to RNAi agents targeting specific regions within mutant PABPN1 variants causative of OPMD, as well as use of those RNAi agents in combination with PABPN1 replacement constructs to treat OPMD. More specifically, this family includes claims covering shmiR17 of BB-301 This patent family entered the national/regional phase in October/November 2018.
The targeted gene silencing effects of RNAi, in conjunction with the durable transgene expression achievable via the use of modified viral vectors, imbues the silence and replace approach with the potential to produce long-term silencing of disease-causing genes along with simultaneous replacement of wild type gene function following a single administration of the proprietary genetic medicine.
The targeted gene silencing effects of RNAi, in conjunction with the durable transgene expression achievable via the use of modified viral vectors, imbues the silence and replace approach with the potential to produce permanent silencing of disease-causing genes along with simultaneous replacement of the wild type gene function following a single administration of the proprietary genetic medicine.
They are performed after preliminary evidence suggesting effectiveness of the investigational product has been obtained, and are intended to further evaluate dosage, clinical effectiveness and safety, to establish the overall benefit-risk relationship of the product, and to provide an adequate basis for product approval. Phase III clinical trials usually involve several hundred to several thousand participants.
They are performed after preliminary evidence suggesting effectiveness of the investigational product has been obtained, and are intended to further evaluate dosage, clinical effectiveness and safety, to establish the overall benefit-risk relationship of the product, and to provide an adequate basis for product approval. Phase III clinical trials usually involve several 27 Table of Contents hundred to several thousand participants.
FDA Post-Approval Requirements Any products manufactured or distributed by us or on our behalf pursuant to FDA approvals are subject to continuing regulation by the FDA, including requirements for record-keeping, reporting of adverse experiences with the biologic or drug, and submitting biological product deviation reports to notify the FDA of unanticipated changes in distributed products.
FDA Post-Approval Requirements Any products manufactured or distributed by us or on our behalf pursuant to FDA approvals are subject to continuing regulation by the FDA, including requirements for record-keeping, reporting of adverse experiences 31 Table of Contents with the biologic or drug, and submitting biological product deviation reports to notify the FDA of unanticipated changes in distributed products.
In the A17 mouse model, the treatment restores muscle strength and muscle weight to wild type levels and improves other physiological hallmarks of the disease (Figure 6a, Figure 6b, Figure 6c, Figure 6d): • Multiple A17 animal cohorts received single doses of BB-301 (over a range of doses spanning 4x108 vg/muscle-to-7.5x1011 vg/muscle) and, following BB-301 administration, each cohort was observed for 14-weeks • BB-301 was injected into the Tibialis Anterior (TA) muscle of 10 week old-to-12 week old animals and, 14-weeks post administration, each A17 cohort was anesthetized and the contractile properties of the injected TA muscles were analyzed via in-situ muscle electrophysiology • Intermediate doses of BB-301 resulted in 75% silencing of PABPN1 and 26% replacement of wild type PABPN1 activity, leading to full restoration of muscle strength, clearance of INIs, and a reduction of fibrosis • An additional experiment conducted over the course of 20-weeks demonstrated that more modest doses of BB-301 (which supported only partial resolution of the disease phenotype at week-14) were, surprisingly, able to facilitate significant benefit at 20-weeks, as evidenced by restoration of parameters relating to muscle strength, weight and INI formation 12 Table of Contents Figure 6a.
In the A17 mouse model, the treatment restores muscle strength and muscle weight to wild type levels and improves other physiological hallmarks of the disease (Figure 6a, Figure 6b, Figure 6c, Figure 6d): • Multiple A17 animal cohorts received single doses of BB-301 (over a range of doses spanning 4x10 8 vg/muscle-to-7.5x10 11 vg/muscle) and, following BB-301 administration, each cohort was observed for 14-weeks • BB-301 was injected into the Tibialis Anterior (TA) muscle of 10 week old-to-12 week old animals and, 14-weeks post administration, each A17 cohort was anesthetized and the contractile properties of the injected TA muscles were analyzed via in-situ muscle electrophysiology • Intermediate doses of BB-301 resulted in 75% silencing of PABPN1 and 26% replacement of wild type PABPN1 activity, leading to full restoration of muscle strength, clearance of INIs, and a reduction of fibrosis • An additional experiment conducted over the course of 20-weeks demonstrated that more modest doses of BB-301 (which supported only partial resolution of the disease phenotype at week-14) were, surprisingly, able to facilitate significant benefit at 20-weeks, as evidenced by restoration of parameters relating to muscle strength, weight and INI formation Figure 6a.
The ultimate implementation of our strategy for realizing the financial value of our product candidates is dependent on the results of clinical trials for our product candidates, the availability of funds and the ability to negotiate acceptable commercial terms with third parties. 25 Table of Contents Competition The biopharmaceutical industry is characterized by intense and dynamic competition to develop new technologies and proprietary therapies.
The ultimate implementation of our strategy for realizing the financial value of our product candidates is dependent on the results of clinical trials for our product candidates, the availability of funds and the ability to negotiate acceptable commercial terms with third parties. Competition The biopharmaceutical industry is characterized by intense and dynamic competition to develop new technologies and proprietary therapies.
To obtain regulatory approval of a biological product under European Union regulatory systems, we must submit a marketing authorization application. The application required in the European Union is similar to a BLA in the United States, with the exception of, among other things, country-specific document requirements. The European Union also provides opportunities for market exclusivity.
To obtain regulatory approval of a biological product under European Union regulatory systems, we must submit a marketing authorization application. The application required in the European Union is similar to a BLA in the 33 Table of Contents United States, with the exception of, among other things, country-specific document requirements. The European Union also provides opportunities for market exclusivity.
Our key strengths include: • A proprietary ddRNAi-based silence and replace technology platform that may potentially enable the serial development of single-administration therapeutics capable of facilitating sustained, long-term silencing of disease-causing genes and concomitant replacement of wild type gene function; • A proprietary AAV vector technology which improves the endosomal escape capability of virus produced in insect cells using a baculovirus system.
Our key strengths include: • A first mover advantage for silence and replace-based therapeutics; • A proprietary ddRNAi-based silence and replace technology platform that may potentially enable the serial development of single-administration therapeutics capable of facilitating sustained, long-term silencing of disease-causing genes and concomitant replacement of wild type gene function; • A proprietary AAV vector technology which improves the endosomal escape capability of virus produced in insect cells using a baculovirus system.
This fundamental therapeutic approach to disease management is called “silence and replace” and this biological mechanism offers the potential to restore the underlying physiology of the treated tissues and, in the process, improve treatment outcomes for patients suffering from the chronic and, potentially, fatal effects of Oculopharyngeal Muscular Dystrophy (OPMD).
This fundamental therapeutic approach to disease management is called “silence and replace” and this biological mechanism offers the potential to restore the underlying physiology of the treated tissues and, in the process, improve treatment 7 Table of Contents outcomes for patients suffering from the chronic and, potentially, fatal effects of Oculopharyngeal Muscular Dystrophy (OPMD).
(“Benitec” or the “Company” or in the third person, “we” or “our”) is a development- stage biotechnology company focused on the advancement of novel genetic medicines with headquarters in Hayward, California.
(“Benitec” or the “Company” or in the third person, “we” or “our”) is a clinical-stage biotechnology company focused on the advancement of novel genetic medicines with headquarters in Hayward, California.
The Pilot Dosing Study evaluated the safety and biological activity of two concentrations of BB-301 (1.0+E13 vg/mL and 3.0+E13 vg/mL) across three distinct doses (1.0+E13 vg/mL, 3.0+E13 vg/mL with a low injection volume, and 3.0+E13 vg/mL with a high injection volume) following direct intramuscular injection into the Hypopharyngeus (HP) muscles and the Thyropharyngeus (TP) muscles of Beagle dogs via the use of a proprietary delivery device employed in an open surgical procedure.
The Pilot Dosing Study evaluated the safety and biological activity of two concentrations of BB-301 (1.0+E13 vg/mL and 3.0+E13 vg/mL) across three distinct doses (1.0+E13 vg/mL, 3.0+E13 vg/mL with a low injection volume, and 3.0+E13 vg/mL with a high injection volume) following direct intramuscular injection into the Hypopharyngeal (HP) muscles and the Thyropharyngeal (TP) muscles of Beagle dogs via the use of a proprietary delivery device employed in an open surgical procedure.
The information on, or that can be accessed through, our website is not part of this Annual Report and is not incorporated by reference herein. 37 Table of Contents
The information on, or that can be accessed through, our website is not part of this Annual Report and is not incorporated by reference herein. 36 Table of Contents
In this regard, the dual capabilities of the proprietary silence and replace approach to silence a disease-causing gene via ddRNAi and simultaneously replace the wildtype activity of a mutant gene via the delivery of an engineered transgene could facilitate the development of differentially efficacious treatments for a range of genetic disorders.
In this regard, the dual capabilities of the proprietary silence and replace approach to silence a disease-causing gene via ddRNAi and simultaneously replace the wild type activity of a mutant gene via the delivery of an engineered transgene could facilitate the development of differentially efficacious treatments for a range of genetic disorders.
The sponsor must submit an IND safety report within 15 29 Table of Contents calendar days after the sponsor determines that the information qualifies for reporting. The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information.
The sponsor must submit an IND safety report within 15 calendar days after the sponsor determines that the information qualifies for reporting. The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of the information.
The eligibility of the RMAT-designated product for these expedited programs can be discussed with the FDA at specific development meetings, but we do not know whether any of our current or future product candidates will be eligible for RMAT designation.
The eligibility of the RMAT-designated product for these expedited 25 Table of Contents programs can be discussed with the FDA at specific development meetings, but we do not know whether any of our current or future product candidates will be eligible for RMAT designation.
In the United States and some foreign jurisdictions, there have been, and likely will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system directed at broadening the availability of healthcare and containing or lowering the cost of healthcare.
In the United States and some foreign jurisdictions, there have been, and likely will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system directed at broadening 34 Table of Contents the availability of healthcare and containing or lowering the cost of healthcare.
Noncompliance with cGMP or other requirements can result in issuance of warning or untitled letters, civil and criminal penalties, seizures, and injunctive action. 33 Table of Contents The FDA and other federal and state agencies closely regulate the labeling, marketing and promotion of drugs and biologics.
Noncompliance with cGMP or other requirements can result in issuance of warning or untitled letters, civil and criminal penalties, seizures, and injunctive action. The FDA and other federal and state agencies closely regulate the labeling, marketing and promotion of drugs and biologics.
Some nonclinical testing may continue even after the IND application is submitted. IND authorization is required before interstate shipping and administration of any new product to humans that is not the subject of an approved 28 Table of Contents BLA.
Some nonclinical testing may continue even after the IND application is submitted. IND authorization is required before interstate shipping and administration of any new product to humans that is not the subject of an approved BLA.
Our cash and cash equivalents will be deployed to advance our product candidate BB-301 for OPMD, including the natural history lead-in study and Phase 1b/2a BB 301 treatment study, for the continued advancement of development activities for other existing and new product candidates, for general corporate purposes and for strategic growth opportunities.
Our cash and cash equivalents will be deployed for the advancement of our product candidate BB-301 for the treatment of OPMD-derived dysphagia, including the natural history lead-in study and the Phase 1b/2a BB-301 treatment study, for the continued advancement of development activities for other existing and new product candidates, for general corporate purposes and for strategic growth opportunities.
The FDA will inspect the facilities at which the product is manufactured to ensure the manufacturing processes and facilities are in compliance with cGMP 30 Table of Contents requirements and are adequate to assure consistent production of the product within required specifications.
The FDA will inspect the facilities at which the product is manufactured to ensure the manufacturing processes and facilities are in compliance with cGMP requirements and are adequate to assure consistent production of the product within required specifications.
The mechanism of action of BB-301 is shown in Figure 5. 11 Table of Contents Figure 5 In initial in vivo studies evaluating the use of direct intramuscular injection of AAV-based constructs with the potential to facilitate the desired silence and replace approach in the A17 transgenic mouse model of OPMD at the Royal Holloway University of London and the Institut de Myologie, we observed decreases in muscle fibrosis, increases in cross sectional area of the treated muscles, decreases in intranuclear inclusions, and normalization of muscle strength.
Figure 5 In initial in vivo studies evaluating the use of direct intramuscular injection of AAV-based constructs with the potential to facilitate the desired silence and replace approach in the A17 transgenic mouse model of OPMD at 11 Table of Contents the Royal Holloway University of London and the Institut de Myologie, we observed decreases in muscle fibrosis, increases in cross sectional area of the treated muscles, decreases in intranuclear inclusions, and normalization of muscle strength.
BB-301 dosing was carried out independently by both a veterinary surgeon and a practicing Otolaryngologist who has extensive experience with the provision of palliative surgical care for OPMD patients. 15 Table of Contents The key preliminary results are summarized here: Figure 7.
BB-301 dosing was carried out independently by both a veterinary surgeon and a practicing Otolaryngologist who has extensive experience with the provision of palliative surgical care for OPMD patients. The key results are summarized here: Figure 7.
Employees As of June 30, 2022, we had 18 full-time employees, 7 of whom have a Ph.D., 4 have Masters Degrees and 2 have Biotechnology Certificates, for a total of 13 with post-graduate degrees. Of these full-time employees, 15 are engaged in research and development activities and 3 are engaged in finance, legal, human resources, facilities and general management.
Employees As of June 30, 2023, we had 18 full-time employees, 7 of whom have a Ph.D., 4 have Masters Degrees and 2 have Biotechnology Certificates, for a total of 13 with post-graduate degrees. Of these full-time employees, 13 are engaged in research and development activities and 5 are engaged in finance, legal, human resources, facilities and general management.
Interim results of the BB-301 Pilot Dosing Study were reported in 2021: Benitec conducted the BB-301 Pilot Dosing Study in Beagle dog subjects to demonstrate that direct intramuscular injection of BB-301 via the use of a proprietary dosing device in an open surgical procedure could safely achieve the following goals: • Biologically significant and dose-dependent levels of BB-301 tissue transduction (i.e., delivery of the multi-functional BB-301 genetic construct into the target pharyngeal muscle cells); • Broad-based and dose-dependent expression of the three distinct genes comprising the BB-301 gene construct within the pharyngeal muscle cells; and • Durable and biologically significant levels of target gene knock-down (i.e., inhibition of the expression of the gene of interest) within the pharyngeal muscle cells.
Benitec conducted the BB-301 Pilot Dosing Study in Beagle dog subjects to demonstrate that direct intramuscular injection of BB-301 via the use of a proprietary dosing device in an open surgical procedure could safely achieve the following goals: • Biologically significant and dose-dependent levels of BB-301 tissue transduction (i.e., delivery of the multi-functional BB-301 genetic construct into the target pharyngeal muscle cells); 14 Table of Contents • Broad-based and dose-dependent expression of the three distinct genes comprising the BB-301 gene construct within the pharyngeal muscle cells; and • Durable and biologically significant levels of target gene knock-down (i.e., inhibition of the expression of the gene of interest) within the pharyngeal muscle cells.
For example, the FDA has established the Office of Tissues and Advanced Therapies (formerly Office of Cellular, Tissue and Gene Therapies) within CBER, to consolidate the review of gene therapy and related products, and the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its reviews.
For example, the FDA has established the Office of Tissues and Advanced Therapies (formerly Office of Cellular, Tissue and Gene Therapies) within the Center for Biologics Evaluation and Research (CBER), to consolidate the review of gene therapy and related products, and the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its reviews.
BB-301 is an AAV-based gene therapy designed to both silence the expression of mutated, disease-causing genes (to slow, or halt, the underlying mechanism of disease progression) and simultaneously replace the mutant genes with normal, “wild type” genes (to drive restoration of function in diseased cells).
BB-301 is an AAV-based gene therapy designed to silence the expression of disease-causing genes (to slow, or halt, the underlying mechanism of disease progression) and to simultaneously replace the mutant genes with normal, “wildtype” genes (to drive restoration of function in diseased cells).
Our Strengths We believe that the combination of our proprietary ddRNAi technology and our deep expertise in the design and development of genetic medicines, and specifically ddRNAi-based therapeutics, will enable us to achieve and maintain a leading position in gene silencing and gene therapy for the treatment of human disease.
Our Strengths We believe that the combination of our proprietary ddRNAi and silence and replace technology, and our deep expertise in the design and development of genetic medicines, will enable us to achieve and maintain a leading position in gene silencing and gene therapy for the treatment of human disease.
The silence and replace approach further bolsters the biological benefits of long-term silencing of disease-causing genes by incorporating multifunctional genetic constructs within the modified AAV vectors to create an AAV-based gene therapy agent that is designed to both silence the expression of mutated, disease-causing genes (to slow, or halt, the underlying mechanism of disease progression) and, simultaneously, replace the mutant genes with normal, “wild type” genes (to drive restoration of function in diseased cells).
The silence and replace approach further bolsters the biological benefits of permanent silencing of disease-causing genes by incorporating multifunctional genetic constructs within the modified AAV vectors to create an AAV-based gene therapy agent that is designed to silence the expression of disease-causing genes (to slow, or halt, the underlying mechanism of disease progression) and to simultaneously replace the mutant genes with normal, “wildtype” genes (to drive restoration of function in diseased cells).
In the silence and replace approach (Figure 2): • A DNA construct is delivered to the nucleus of the target cell by a gene therapy vector (A) such as an AAV vector; • Once inside of the nucleus, the DNA construct drives the continuous production of shRNA molecules (B) which are processed by an enzyme called Dicer into siRNAs (C); 6 Table of Contents • The processed siRNA is incorporated into RISC and silences the target gene using the same mechanism shown in Figure 1; and • When the DNA expression cassette is additionally comprised of a wild type transgene, upon entry of the DNA construct into the nucleus of the target cell via the use of the AAV vector, the DNA construct also drives the continuous production of wild type protein (to restore native intracellular biological processes).
In the silence and replace approach (Figure 2): • A DNA construct is delivered to the nucleus of the target cell by a gene therapy vector (A) such as an AAV vector; • Once inside of the nucleus, the DNA construct drives the continuous production of shRNA molecules (B) which are processed by an enzyme called Dicer into siRNAs (C); • The processed siRNA is incorporated into RISC and silences the target gene using the same mechanism shown in Figure 1; and • When the DNA expression cassette is additionally comprised of a wild type transgene, upon entry of the DNA construct into the nucleus of the target cell via the use of the AAV vector, the DNA construct also drives the continuous production of wild type protein (to restore native intracellular biological processes). 6 Table of Contents Figure 2 Our strategy is to discover, develop and commercialize treatments that leverage the capabilities of ddRNAi and the silence and replace approach to disease management.
Fast Track designation and breakthrough therapy designation may expedite the product development and approval process, and priority review may expedite the approval process. However, these three paths do not change the standards for approval.
Fast Track designation and breakthrough therapy designation may expedite the product development and approval process, and priority review may expedite the approval process. However, these three paths do not change the standards for approval. Accelerated approval designation changes the standards for product approval and thus may expedite the development and/or approval process.
The claims in this application are not limited to BB-301. This patent family exists as a PCT application and was filed solely in the name of Benitec. A fourth patent family, entitled “Methods for Treating Oculopharyngeal Muscular Dystrophy (OPMD) (OPMD family #4)” has been filed to specifically claim the OPMD therapeutic candidate developed by Benitec, BB-301 (described herein).
This patent family exists as a PCT application and was filed solely in the name of Benitec. 21 Table of Contents A fourth patent family, entitled “Methods for Treating Oculopharyngeal Muscular Dystrophy (OPMD) (OPMD family #4)” has been filed to specifically claim the OPMD therapeutic candidate developed by Benitec, BB-301 (described herein).
A failure to comply explicitly with any requirements during the product development, approval, or post-approval 26 Table of Contents periods, may lead to administrative or judicial sanctions.
A failure to comply explicitly with any requirements during the product development, approval, or post-approval periods, may lead to administrative or judicial sanctions.
These efforts are central to the growth of our business and include: • Seeking and maintaining patents claiming our ddRNAi and silence and replace technologies and other inventions relating to our specific products in development or that are otherwise commercially and/or strategically important to the development of our business; • Protecting and enforcing our intellectual property rights; and • Strategically licensing intellectual property from third parties to advance development of our product candidates.
These efforts are central to the growth of our business and include: • Seeking and maintaining patents claiming our ddRNAi and silence and replace technologies and other inventions relating to our specific products in development or that are otherwise commercially and/or strategically important to the development of our business; • Protecting and enforcing our intellectual property rights; and • Strategically licensing intellectual property from third parties to advance development of our product candidates. 8 Table of Contents Our Pipeline The following table sets forth our current product candidate and the development status: Table 1.
This 10-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the 35 Table of Contents criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.
Orphan drugs in the European Union are eligible for 10-year market exclusivity. This 10-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.
Additionally, the achievement of long-term gene silencing and gene replacement may significantly reduce the risk of patient non-compliance during the course of medical management of potentially fatal clinical disorders. We will require additional financing to continue the development of our product candidates through key inflection points and to continue to execute on our business plan.
Additionally, the achievement of permanent gene silencing and gene replacement may significantly reduce the risk of patient non-compliance during the course of medical management of potentially fatal clinical disorders. We will require additional financing to progress our product candidates through to key inflection points.
In a July 2018 guidance, the FDA announced that it does not expect to grant any additional orphan drug designations to drugs for pediatric subpopulations of common diseases (i.e., diseases or conditions with an overall prevalence of 200,000 or greater). Pediatric subpopulation orphan designations that have already been granted will not be affected by this change.
In a July 2018 guidance, the FDA announced that it does not expect to grant any additional orphan drug designations to drugs for pediatric subpopulations of common diseases (i.e., diseases or conditions with an overall prevalence of 200,000 or greater).
These so-called Phase 4 clinical trials may be made a condition to be satisfied for continuing drug and biologic approval. The results of Phase 4 clinical trials can confirm the efficacy of a product candidate and can provide important safety information.
FDA Additional Requirements The FDA may require, or companies may pursue, additional clinical trials after a product is approved. These so-called Phase 4 clinical trials may be made a condition to be satisfied for continuing drug and biologic approval. The results of Phase 4 clinical trials can confirm the efficacy of a product candidate and can provide important safety information.
RISC uses the antisense strand to find the mRNA that has a complementary sequence (E, Figure 1) leading to the cleavage of the target mRNA (F, Figure 1). As a consequence, the output of the mRNA (protein production) does not occur (G, Figure 1). Several companies, including Alnylam Pharmaceuticals Inc. (“Alnylam”) and Arbutus Biopharma Corp.
RISC uses the antisense strand to find the mRNA that has a complementary sequence (E, Figure 1) leading to the cleavage of the target mRNA (F, Figure 1). As a consequence, the output of the mRNA (protein production) does not occur (G, Figure 1). Several companies, including Alnylam Pharmaceuticals Inc. (“Alnylam”), utilize this approach in their RNAi product candidates.
Dose-Dependent Increases in Muscle Force Restoration of muscle strength was assessed by muscle contractility measurements in response to a series of induced impulses that ranged from 10 to 180 Hz Ongoing Development Activities for BB-301 On July 8, 2020, Benitec announced the initiation of the BB-301 Pilot Dosing Study in large animal subjects. 14 Table of Contents The BB-301 Pilot Dosing Study was the first of two planned CTA-enabling and IND-enabling studies that were designed to be conducted in large animals.
Dose-Dependent Increases in Muscle Force Restoration of muscle strength was assessed by muscle contractility measurements in response to a series of induced impulses that ranged from 10 to 180 Hz Ongoing Development Activities for BB-301 On July 8, 2020, Benitec announced the initiation of the BB-301 Pilot Dosing Study in large animal subjects.
Product Development Process Before testing any biologic in humans, the product enters the nonclinical, or preclinical, testing stage. Nonclinical tests include laboratory evaluations of product chemistry, toxicity, and formulation, as well as animal studies to assess the potential safety and activity of the product. The conduct of nonclinical tests must comply with federal regulations and requirements including GLPs.
Product Development Process Before testing any biologic in humans, the product enters the nonclinical, or preclinical, testing stage. Nonclinical tests include laboratory evaluations of product chemistry, toxicity, and formulation, as well as animal 26 Table of Contents studies to assess the potential safety and activity of the product.
Know-How In addition to patent protection of ddRNAi and other technology and our product candidates, we also rely on proprietary know-how that is not patentable or that we elect not to patent, as valuable intellectual property for our business.
We cannot guarantee the availability of the license or that it can be obtained on commercially reasonable terms. Know-How In addition to patent protection of ddRNAi and other technology and our product candidates, we also rely on proprietary know-how that is not patentable or that we elect not to patent, as valuable intellectual property for our business.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product candidate intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making a drug or biological product available in the United States for this type of disease or condition will be recovered from sales of the product candidate.
We may encounter difficulties or unanticipated costs in our efforts to secure necessary governmental approvals, which could delay or preclude us from marketing our products. 29 Table of Contents Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product candidate intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making a drug or biological product available in the United States for this type of disease or condition will be recovered from sales of the product candidate.
Modified AAV vectors are employed to deliver genetic constructs which encode short hairpin RNAs that are, then, serially expressed and processed to produce siRNA molecules within the transduced cell for the duration of the life of the target cell.
Modified AAV vectors are employed to deliver genetic constructs which encode short hairpin RNAs that are, then, serially expressed and processed to produce siRNA molecules within the transduced cell for the duration of the life of the target cell. These newly introduced siRNA molecules drive 3 Table of Contents permanent silencing of the expression of the disease-causing gene.
PABPN1 is a ubiquitous factor that promotes interaction between the poly(A) polymerase and CPSF (cleavage and polyadenylation specificity factor) and, thus, controls the length of mRNA poly(A) tails, mRNA export from the nucleus, and alternative poly(A) site usage.
Each of these attributes could facilitate efficient clinical development and global commercialization of BB-301. PABPN1 is a ubiquitous factor that promotes the interaction between the poly(A) polymerase and CPSF (cleavage and polyadenylation specificity factor) and, thus, controls the length of mRNA poly(A) tails, mRNA export from the nucleus, and alternative poly(A) site usage.
Re-domiciliation On April 15, 2020, or the Implementation Date, the re-domiciliation, or the Re-domiciliation, of Benitec Biopharma Limited, a public company incorporated under the laws of the State of Western Australia, or Benitec Limited, was completed in accordance with the Scheme Implementation Agreement, as amended and restated as of January 30, 2020, between Benitec Limited and us.
Our principal executive offices are located at 3940 Trust Way, Hayward, California 94545. 35 Table of Contents Re-domiciliation On April 15, 2020, or the Implementation Date, the re-domiciliation, or the Re-domiciliation, of Benitec Biopharma Limited, a public company incorporated under the laws of the State of Western Australia, or Benitec Limited, was completed in accordance with the Scheme Implementation Agreement, as amended and restated as of January 30, 2020, between Benitec Limited and us.
See “Risk Factors—Our auditors’ report expresses doubt about our ability to continue as a going concern.” Our proprietary technology platforms are designated as DNA-directed RNA interference, or “ddRNAi”, and “silence and replace”. ddRNAi is designed to produce long-term silencing of disease-causing genes, by combining RNA interference, or RNAi, with viral delivery agents typically associated with the field of gene therapy (i.e., viral vectors).
Our proprietary technology platforms are designated as DNA-directed RNA interference, or “ddRNAi”, and “silence and replace.” ddRNAi is designed to produce permanent silencing of disease-causing genes, by combining RNA interference, or RNAi, with viral delivery agents typically associated with the field of gene therapy (i.e., viral vectors).
Figure 4 In collaboration with researchers at the Royal Holloway University of London and the Institut de Myologie in Paris, we developed a ddRNAi construct expressing three shRNAs against three distinct regions of PABPN1 mRNA and observed effective silencing of the PABPN1 gene in vitro using this ddRNAi construct.
BB-301 is also engineered to drive the simultaneous expression of a codon-optimized, siRNA-resistant, version of the wild type PABPN1 gene (Figure 4). 10 Table of Contents Figure 4 In collaboration with researchers at the Royal Holloway University of London and the Institut de Myologie in Paris, we developed a ddRNAi construct expressing three shRNAs against three distinct regions of PABPN1 mRNA and observed effective silencing of the PABPN1 gene in vitro using this ddRNAi construct.
Depending on the financial aspects of our relationships with manufacturers for such products, we may incur additional compliance costs which could impact our financial results. 36 Table of Contents Other Healthcare Laws Although we currently do not have any products on the market, we may be subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and other countries in which we conduct our business.
Other Healthcare Laws Although we currently do not have any products on the market, we may be subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and other countries in which we conduct our business.
Patent Term Restoration and Marketing Exclusivity Depending on the timing, duration and specifics of FDA marketing approval of our product candidates, some of our U.S. patents may be eligible for limited patent term extension under the Hatch-Waxman Amendments.
Pediatric subpopulation orphan designations that have already been granted will not be affected by this change. 32 Table of Contents Patent Term Restoration and Marketing Exclusivity Depending on the timing, duration and specifics of FDA marketing approval of our product candidates, some of our U.S. patents may be eligible for limited patent term extension under the Hatch-Waxman Amendments.
As a condition of approval, the FDA may require that a sponsor of a biological or drug product receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.
As a condition of approval, the FDA may require that a sponsor of a biological or drug product receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials.
Our product candidates may not be eligible for RMAT designation now or in the future. 27 Table of Contents In May 2016, the EMA approved a second gene therapy product called Strimvelis, the first approved ex vivo stem cell gene therapy, to treat patients with a very rare disease called ADA-SCID (Severe Combined Immunodeficiency due to Adenosine Deaminase deficiency).
In May 2016, the EMA approved a second gene therapy product called Strimvelis, the first approved ex vivo stem cell gene therapy, to treat patients with a very rare disease called ADA-SCID (Severe Combined Immunodeficiency due to Adenosine Deaminase deficiency). In August 2017, the FDA approved the first gene therapy product in the United States.
The characteristic genetic mutation underlying OPMD results in trinucleotide repeat expansion(s) within exon 1 of PABPN1 and results in an expanded poly-alanine tract at the N-terminal end of PABPN1. The mutation generates a protein with an N-terminal expanded poly-alanine tract of up to 18 contiguous alanine residues prone to the formation of aggregates called intranuclear inclusions (INIs).
The characteristic genetic mutation underlying OPMD results in trinucleotide repeat expansion(s) within exon 1 of PABPN1 and results in an expanded poly-alanine tract at the N-terminal end of PABPN1.
Luxturna is the first directly administered gene therapy approved in the United States that targets a disease caused by mutations in a specific gene. Marketing Approval In the United States, for premarket approval purposes, the FDA regulates gene therapy products as biologics under the FDC Act, the PHS Act and related regulations.
Marketing Approval In the United States, for premarket approval purposes, the FDA regulates gene therapy products as biologics under the FDC Act, the PHS Act and related regulations.
RMAT designation enables gene therapy products to access the FDA’s existing expedited programs to help foster the development and approval of gene therapy products.
RMAT designation enables gene therapy products to access the FDA’s existing expedited programs to help foster the development and approval of gene therapy products. Our product candidates may not be eligible for RMAT designation now or in the future.
In August 2017, the FDA approved the first gene therapy product in the United States. The FDA approved Kymriah (tisagenlecleucel) for the treatment of certain pediatric and young adult patients with a form of acute lymphoblastic leukemia (ALL). Kymriah is a genetically-modified autologous T-cell immunotherapy.
The FDA approved Kymriah (tisagenlecleucel) for the treatment of certain pediatric and young adult patients with a form of acute lymphoblastic leukemia (ALL). Kymriah is a genetically-modified autologous T-cell immunotherapy. Because of the risk of cytokine release syndrome and neurological events, Kymriah is being approved with a REMS.
Because of the risk of cytokine release syndrome and neurological events, Kymriah is being approved with a REMS. In December 2017, the FDA approved Luxturna (voretigene neparvovec-rzyl), a gene therapy to treat children and adult patients with an inherited form of vision loss that may result in blindness.
In December 2017, the FDA approved Luxturna (voretigene neparvovec-rzyl), a gene therapy to treat children and adult patients with an inherited form of vision loss that may result in blindness. Luxturna is the first directly administered gene therapy approved in the United States that targets a disease caused by mutations in a specific gene.
The modified AAV will be used as the delivery system for the OPMD therapeutic. 22 Table of Contents We are aware of a third party patent directed to AAV vectors that expires in 2026.
The modified AAV will be used as the delivery system for the OPMD therapeutic. We are aware of a third party patent directed to AAV vectors that expires in 2026. In the event we receive regulatory marketing approval before the expiration date it may be necessary for us to obtain a license to the patent in order to commercialize.
BB-301 is the most advanced ddRNAi-based genetic medicine currently under development by Benitec. BB-301 is an AAV-based gene therapy designed to both silence the expression of mutated, disease-causing genes (to slow, or halt, the underlying mechanism of disease progression) and simultaneously replace the mutant genes with normal, “wild type” genes (to drive restoration of function in diseased cells).
BB-301 is an AAV-based gene therapy designed to permanently silence the expression of the disease-causing gene (to slow, or halt, the biological mechanisms underlying disease progression in OPMD) and to simultaneously replace the mutant gene with a wildtype gene (to drive restoration of function in diseased cells).
Our Strategy We endeavor to become the leader in discovery, development, and commercialization of therapeutic agents capable of addressing significant unmet medical need via the application of the silence and replace approach to the treatment of genetic disorders.
Our Strategy We endeavor to become the leader in discovery, development, and commercialization of silence and replace-based therapeutic agents.
Our product candidates, if approved, would also compete with treatments that have already been approved and accepted by the medical community, patients and third-party payers.
We are aware of several companies focused on developing gene therapy or gene silencing product candidates. We are not aware of any companies developing a gene therapy or gene silencing approach for OPMD. Our product candidates, if approved, would also compete with treatments that have already been approved and accepted by the medical community, patients and third-party payers.
The disease is characterized by progressive swallowing difficulties (dysphagia) and eyelid drooping (ptosis). OPMD is caused by a specific mutation in the poly(A)-binding protein nuclear 1, or PABPN1, gene. OPMD is a rare disease, however, patients have been diagnosed with OPMD in at least 33 countries.
OPMD is caused by a specific mutation in the poly(A)-binding protein nuclear 1 gene (PABPN1). OPMD is a rare disease, however, patients have been diagnosed with OPMD in at least 33 countries. Patient populations suffering from OPMD are well-identified, and significant geographical clustering has been noted for patients with this disorder.
BB-301 has been granted Orphan Drug Designation in the United States and the European Union. On July 9, 2018, the Company entered into a License and Collaboration Agreement with Axovant.
BB-301 has been granted Orphan Drug Designation in the United States and the European Union.
Our predecessor, Benitec Limited, was incorporated under the laws of Australia in 1995. Our principal executive offices are located at 3940 Trust Way, Hayward, California 94545.
Our predecessor, Benitec Limited, was incorporated under the laws of Australia in 1995.
BB-301 is the lead pipeline program for Benitec, and the key attributes of BB-301 are outlined in in Figure 3. 9 Table of Contents Figure 3 In-House Development Programs BB-301 for the Treatment of Oculopharyngeal Muscular Dystrophy OPMD is an insidious, autosomal-dominant, late-onset, degenerative muscle disorder that typically presents in patients at 40-to-50 years of age.
Figure 3 BB-301 is a first-in-class genetic medicine employing the “silence and replace” approach for the treatment of OPMD. OPMD is an insidious, autosomal-dominant, late-onset, degenerative muscle disorder that typically 9 Table of Contents presents in patients at 40-to-50 years of age. The disease is characterized by progressive swallowing difficulties (dysphagia) and eyelid drooping (ptosis).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe use AAV vectors as part of our ddRNAi and silence and replace approaches for several indications. As such, we require licenses and the ability to manufacture large quantities of AAV particles under the FDA’s current good manufacturing practices, or cGMP, requirements and those of comparable foreign regulatory authorities in order to commercialize a product candidate using an AAV vector.
Biggest changeAs such, we require licenses and the ability to manufacture large quantities of AAV particles under the FDA’s current good manufacturing practices, or cGMP, requirements and those of comparable foreign regulatory authorities in order to commercialize a product candidate using an AAV vector. 44 Table of Contents We may find it difficult to enroll patients in any future clinical trials, and patients could discontinue their participation in our current and any future clinical trials, which could delay or prevent our current and any future clinical trials of our product candidates and make those trials more expensive to undertake.
The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not limited to, the following: • the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid; • federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose obligations on covered healthcare providers, health plans and healthcare clearinghouses, as well as their business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • the federal Open Payments program, created under the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the CMS information related to payments or other transfers of value made to physicians, and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by the physicians and their immediate family members by the 90th day of each subsequent calendar year, and disclosure of such information will be made by CMS on a publicly available website; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payers, including private insurers; state and foreign laws that require biopharmaceutical or biotechnology companies to comply with the industry voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that 65 Table of Contents require biopharmaceutical or biotechnology manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not limited to, the following: • the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid; • federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for, among other things, executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose obligations on covered healthcare providers, health plans and healthcare clearinghouses, as well as their business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • the federal Open Payments program, created under the ACA, and its implementing regulations, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the CMS information related to payments or other transfers of value made to physicians, and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by the physicians and their immediate family members by the 90th day of each subsequent calendar year, and disclosure of such information will be made by CMS on a publicly available website; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payers, including private insurers; state and foreign laws that require biopharmaceutical or biotechnology companies to comply with the industry voluntary 63 Table of Contents compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require biopharmaceutical or biotechnology manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Our ability to generate future revenues from commercializing product candidates depends heavily on our success in: • establishing proof of concept in preclinical studies and clinical trials for our product candidates; • successfully initiating and completing clinical trials of our product candidates; 39 Table of Contents • obtaining regulatory and marketing approvals for product candidates for which we complete clinical trials; • maintaining, protecting and expanding our intellectual property portfolio, and avoiding infringing on intellectual property of third parties; • establishing and maintaining successful licenses, collaborations and alliances with third parties; • developing a sustainable, scalable, reproducible and transferable manufacturing process for our product candidates; • establishing and maintaining supply and manufacturing relationships with third parties that can provide products and services adequate, in amount and quality, to support clinical development and commercialization of our product candidates, if approved; • launching and commercializing any product candidates for which we obtain regulatory and marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and distribution infrastructure; • obtaining market acceptance of any product candidates that receive regulatory approval as viable treatment options; • obtaining favorable coverage and reimbursement rates for our products from third-party payers; • addressing any competing technological and market developments; • identifying and validating new product candidates; and • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter.
Our ability to generate future revenues from commercializing product candidates depends heavily on our success in: • establishing proof of concept in preclinical studies and clinical trials for our product candidates; • successfully initiating and completing clinical trials of our product candidates; 38 Table of Contents • obtaining regulatory and marketing approvals for product candidates for which we complete clinical trials; • maintaining, protecting and expanding our intellectual property portfolio, and avoiding infringing on intellectual property of third parties; • establishing and maintaining successful licenses, collaborations and alliances with third parties; • developing a sustainable, scalable, reproducible and transferable manufacturing process for our product candidates; • establishing and maintaining supply and manufacturing relationships with third parties that can provide products and services adequate, in amount and quality, to support clinical development and commercialization of our product candidates, if approved; • launching and commercializing any product candidates for which we obtain regulatory and marketing approval, either by collaborating with a partner or, if launched independently, by establishing a sales, marketing and distribution infrastructure; • obtaining market acceptance of any product candidates that receive regulatory approval as viable treatment options; • obtaining favorable coverage and reimbursement rates for our products from third-party payers; • addressing any competing technological and market developments; • identifying and validating new product candidates; and • negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter.
Our ability to recognize revenues from successful potential collaborations may be impaired by multiple factors including: • a collaborator may shift its priorities and resources away from our programs due to a change in business strategies, or a merger, acquisition, sale or downsizing of its company or business unit; • a collaborator may cease development in an area that is the subject of a collaboration agreement; • a collaborator may change the success criteria for a particular program or product candidate in development, thereby delaying or ceasing development of such program or product candidate in development; • a collaborator with development or commercialization obligations may not commit sufficient financial or human resources to the development, marketing, distribution or sale of a product, or may otherwise fail in development or commercialization efforts; • a collaborator with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demand requirement; • a collaborator could independently develop, or develop with unrelated parties, products that compete directly or indirectly with our product candidates; • a collaborator may exercise its rights under the agreement to discontinue our collaboration; • a dispute may arise between us and a collaborator concerning the development or commercialization of a product candidate, resulting in a delay in milestones, royalty payments, or discontinuation of a program and possibly resulting in costly litigation or arbitration that may divert management attention and resources; • a collaborator may not adequately protect the intellectual property rights associated with a product candidate; • a collaborator may use our proprietary information or intellectual property in such a way as to expose us actual or threatened litigation from a third party, patent office proceedings or other risks that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; and • a collaborator may own or co-own, or have a license to use, intellectual property rights associated with a product candidate that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property rights.
Our ability to recognize revenues from successful potential collaborations may be impaired by multiple factors including: • a collaborator may shift its priorities and resources away from our programs due to a change in business strategies, or a merger, acquisition, sale or downsizing of its company or business unit; • a collaborator may cease development in an area that is the subject of a collaboration agreement; • a collaborator may change the success criteria for a particular program or product candidate in development, thereby delaying or ceasing development of such program or product candidate in development; • a collaborator with development or commercialization obligations may not commit sufficient financial or human resources to the development, marketing, distribution or sale of a product, or may otherwise fail in development or commercialization efforts; • a collaborator with manufacturing responsibilities may encounter regulatory, resource or quality issues and be unable to meet demand requirement; • a collaborator could independently develop, or develop with unrelated parties, products that compete directly or indirectly with our product candidates; • a collaborator may exercise its rights under the agreement to discontinue our collaboration; • a dispute may arise between us and a collaborator concerning the development or commercialization of a product candidate, resulting in a delay in milestones, royalty payments, or discontinuation of a program and possibly resulting in costly litigation or arbitration that may divert management attention and resources; • a collaborator may not adequately protect the intellectual property rights associated with a product candidate; 53 Table of Contents • a collaborator may use our proprietary information or intellectual property in such a way as to expose us actual or threatened litigation from a third party, patent office proceedings or other risks that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability; and • a collaborator may own or co-own, or have a license to use, intellectual property rights associated with a product candidate that results from our collaborating with them, and in such cases, we would not have the exclusive right to commercialize such intellectual property rights.
Regulatory agencies can delay, limit or deny marketing approval of a product candidate for many reasons, including: • the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of any future clinical trials; • we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication; 43 Table of Contents • the results of any future clinical trials may not meet the level of statistical or clinical significance required by the FDA or comparable foreign regulatory authorities for approval; • the patients recruited for a particular clinical program may not be sufficiently broad or representative to assure safety and effectiveness in the full population for which we seek approval; • the results of any future clinical trials may not confirm the positive results from earlier preclinical studies or clinical trials; • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • the data collected from any future clinical trials of our product candidates may not be sufficient to the satisfaction of FDA or comparable foreign regulatory authorities to support the submission of a biologics license application, or BLA, or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may only agree to approve a product candidate under conditions that are so restrictive that the product is not commercially viable; • regulatory agencies might not approve or might require changes to our manufacturing processes or facilities; or • regulatory agencies may change their approval policies or adopt new regulations in a manner rendering our clinical data insufficient for approval.
Regulatory agencies can delay, limit or deny marketing approval of a product candidate for many reasons, including: • the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of any future clinical trials; • we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication; • the results of any future clinical trials may not meet the level of statistical or clinical significance required by the FDA or comparable foreign regulatory authorities for approval; • the patients recruited for a particular clinical program may not be sufficiently broad or representative to assure safety and effectiveness in the full population for which we seek approval; • the results of any future clinical trials may not confirm the positive results from earlier preclinical studies or clinical trials; • we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks; • the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • the data collected from any future clinical trials of our product candidates may not be sufficient to the satisfaction of FDA or comparable foreign regulatory authorities to support the submission of a biologics license application, or BLA, or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may only agree to approve a product candidate under conditions that are so restrictive that the product is not commercially viable; • regulatory agencies might not approve or might require changes to our manufacturing processes or facilities; or • regulatory agencies may change their approval policies or adopt new regulations in a manner rendering our clinical data insufficient for approval.
In addition, regardless of merit or eventual outcome, product liability claims may result in: • impairment of our business reputation; • withdrawal of clinical trial participants; • costs due to related litigation; • distraction of management’s attention from our primary business; 68 Table of Contents • substantial monetary awards to patients or other claimants; • the inability to commercialize our product candidates; • decreased demand for our product candidates, if approved for commercial sale; and • increased cost, or impairment of our ability, to obtain or maintain product liability insurance coverage.
In addition, regardless of merit or eventual outcome, product liability claims may result in: • impairment of our business reputation; • withdrawal of clinical trial participants; 66 Table of Contents • costs due to related litigation; • distraction of management’s attention from our primary business; • substantial monetary awards to patients or other claimants; • the inability to commercialize our product candidates; • decreased demand for our product candidates, if approved for commercial sale; and • increased cost, or impairment of our ability, to obtain or maintain product liability insurance coverage.
Risks Related to an Investment in Our Common Sock The market price and trading volume of our common stock may be volatile and may be affected by economic conditions beyond our control. The market price of our common stock may be highly volatile and subject to wide fluctuations.
Risks Related to an Investment in Our Common Stock The market price and trading volume of our common stock may be volatile and may be affected by economic conditions beyond our control. The market price of our common stock may be highly volatile and subject to wide fluctuations.
In addition, failure to comply with FDA and non-U.S. regulatory requirements may, either before or after product approval, if any, subject us to administrative or judicially imposed sanctions, including: • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on the products, manufacturers or manufacturing process; • warning letters; • civil and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions or import bans; • voluntary or mandatory product recalls and publicity requirements; • total or partial suspension of production; 44 Table of Contents • imposition of restrictions on operations, including costly new manufacturing requirements; and • refusal to approve pending BLAs or supplements to approved BLAs.
In addition, failure to comply with FDA and non-U.S. regulatory requirements may, either before or after product approval, if any, subject us to administrative or judicially imposed sanctions, including: • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on the products, manufacturers, or manufacturing process; • warning letters; • civil and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions or import bans; • voluntary or mandatory product recalls and publicity requirements; • total or partial suspension of production; • imposition of restrictions on operations, including costly new manufacturing requirements; and • refusal to approve pending BLAs or supplements to approved BLAs.
Patient enrollment is affected by factors including: • finding and diagnosing patients; 46 Table of Contents • severity of the disease under investigation; • design of the clinical trial protocol; • size and nature of the patient population; • eligibility criteria for the trial in question; • perceived risks and benefits of the product candidate under study; • proximity and availability of clinical trial sites for prospective patients; • availability of competing therapies and clinical trials; • clinicians’ and patients’ perceptions of the potential advantages of the product being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; • patient referral practices of physicians; • ability to monitor patients adequately during and after treatment; and • the COVID-19 pandemic.
Patient enrollment is affected by factors including: • finding and diagnosing patients; • severity of the disease under investigation; • design of the clinical trial protocol; • size and nature of the patient population; • eligibility criteria for the trial in question; • perceived risks and benefits of the product candidate under study; • proximity and availability of clinical trial sites for prospective patients; • availability of competing therapies and clinical trials; • clinicians’ and patients’ perceptions of the potential advantages of the product being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; • patient referral practices of physicians; • ability to monitor patients adequately during and after treatment; and • the COVID-19 pandemic.
Events that may prevent successful or timely completion of clinical development include: • inability to generate sufficient preclinical, toxicology or other data to support the initiation of human clinical trials; • delays in reaching consensus with regulatory agencies on trial design; • identifying, recruiting and training suitable clinical investigators; • delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites; • delays in obtaining required IRB or IBC approval at each clinical trial site; • delays in recruiting suitable patients to participate in our clinical trials, including as a result of the current COVID-19 pandemic; • imposition of a clinical hold by regulatory agencies, including after an inspection of our clinical trial operations or trial sites; • failure by our CROs, other third parties or us to adhere to clinical trial requirements; • failure to perform in accordance with the FDA’s good clinical practices, or GCP, or applicable regulatory requirements in other countries; • inability to manufacture, test, release, import or export for use sufficient quantities of our product candidates for use in clinical trials; • failure to manufacture our product candidate in accordance with cGMP requirements or applicable regulatory guidelines in other countries; • delays in the testing, validation and manufacturing of our product candidates; • delays in the delivery of our product candidates to the clinical trial sites; • delays in having patients complete participation in a trial or return for post-treatment follow-up; • clinical trial sites dropping out of a trial; • occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits; • changes in regulatory requirements and guidance that require amending or submitting new clinical trial protocols; • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or discontinue product development programs; or • the severity, duration and impact of the COVID-19 pandemic.
Events that may prevent successful or timely completion of clinical development include: • inability to generate sufficient preclinical, toxicology or other data to support the initiation of human clinical trials; • delays in reaching consensus with regulatory agencies on trial design; • identifying, recruiting and training suitable clinical investigators; • delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites; • delays in obtaining required IRB or IBC approval at each clinical trial site; • delays in recruiting suitable patients to participate in our clinical trials; • imposition of a clinical hold by regulatory agencies, including after an inspection of our clinical trial operations or trial sites; • failure by our CROs, other third parties or us to adhere to clinical trial requirements; • failure to perform in accordance with the FDA’s good clinical practices, or GCP, or applicable regulatory requirements in other countries; • inability to manufacture, test, release, import or export for use sufficient quantities of our product candidates for use in clinical trials; • failure to manufacture our product candidate in accordance with cGMP requirements or applicable regulatory guidelines in other countries; • delays in the testing, validation and manufacturing of our product candidates; • delays in the delivery of our product candidates to the clinical trial sites; • delays in having patients complete participation in a trial or return for post-treatment follow-up; • clinical trial sites dropping out of a trial; • occurrence of serious adverse events associated with the product candidate that are viewed to outweigh its potential benefits; • changes in regulatory requirements and guidance that require amending or submitting new clinical trial protocols; 46 Table of Contents • clinical trials of our product candidates may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical trials or discontinue product development programs; or • the severity, duration and impact of the COVID-19 pandemic.
If we fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory agency may: • issue a warning letter asserting that we are in violation of the law; • seek an injunction or impose civil or criminal penalties or monetary fines; • suspend or withdraw regulatory approval; 52 Table of Contents • suspend any ongoing clinical trials; • refuse to permit government reimbursement of our product by government-sponsored third-party payers; • refuse to approve a pending BLA or supplements to a BLA submitted by us for other indications or new product candidates; • seize our product; or • refuse to allow us to enter into or continue supply contracts, including government contracts.
If we fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory agency may: • issue a warning letter asserting that we are in violation of the law; • seek an injunction or impose civil or criminal penalties or monetary fines; • suspend or withdraw regulatory approval; • suspend any ongoing clinical trials; • refuse to permit government reimbursement of our product by government-sponsored third-party payers; • refuse to approve a pending BLA or supplements to a BLA submitted by us for other indications or new product candidates; • seize our product; or • refuse to allow us to enter into or continue supply contracts, including government contracts.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe on intellectual property of a licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under any collaborative relationships we might enter into in the future; • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
Disputes may arise regarding intellectual property subject to a licensing agreement, including: • the scope of rights granted under the license agreement and other interpretation-related issues; • the extent to which our technology and processes infringe on intellectual property of a licensor that is not subject to the licensing agreement; • the sublicensing of patent and other rights under any collaborative relationships we might enter into in the future; 72 Table of Contents • our diligence obligations under the license agreement and what activities satisfy those diligence obligations; • the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners; and • the priority of invention of patented technology.
We may be unable to reach agreement on favorable terms, or at all, with providers of vectors needed to optimize delivery of our product candidates to 42 Table of Contents target disease cells and we may also experience unanticipated problems or delays in expanding our manufacturing capacity or transferring our manufacturing process to commercial partners, any of which may prevent us from completing our preclinical trials, initiating clinical trials or commercializing our products on a timely or profitable basis, if at all.
We may be unable to reach agreement on favorable terms, or at all, with providers of vectors needed to optimize delivery of our product candidates to target disease cells and we may also experience unanticipated problems or delays in expanding our manufacturing capacity or transferring our manufacturing process to commercial partners, any of which may prevent us from completing our preclinical trials, initiating clinical trials or commercializing our products on a timely or profitable basis, if at all.
If we are unable to raise additional funds, and thus unable to continue our studies, our business operations may be adversely affected. 41 Table of Contents Risks Related to the Product Development and Regulatory Approval of Our Product Candidates Our product candidates are based on ddRNAi and silence and replace technology.
If we are unable to raise additional funds, and thus unable to continue our studies, our business operations may be adversely affected. 40 Table of Contents Risks Related to the Product Development and Regulatory Approval of Our Product Candidates Our product candidates are based on ddRNAi and silence and replace technology.
We expect that we will be subject to additional risks related to engaging in international operations, including: • different regulatory requirements for approval of biopharmaceutical products in foreign countries; • reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • workforce uncertainty in countries where labor unrest is more common than in Australia or the United States; • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters, including earthquakes, typhoons, floods and fires and disease pandemics and epidemics, including the current COVID-19 pandemic.
We expect that we will be subject to additional risks related to engaging in international operations, including: • different regulatory requirements for approval of biopharmaceutical products in foreign countries; • reduced protection for intellectual property rights; • unexpected changes in tariffs, trade barriers and regulatory requirements; • economic weakness, including inflation, or political instability in particular foreign economies and markets; • compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; • foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; • workforce uncertainty in countries where labor unrest is more common than in Australia or the United States; 60 Table of Contents • production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and • business interruptions resulting from geopolitical actions, including war and terrorism, natural disasters, including earthquakes, typhoons, floods and fires and disease pandemics and epidemics.
Sales of our product candidates will depend substantially, 62 Table of Contents both in the United States and abroad, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by third-party payers, and there have been increasing efforts by governmental and other third-party payers, in the United States and abroad, to cap or reduce healthcare costs.
Sales of our product candidates will depend substantially, both in the United States and abroad, on the extent to which the costs of our product candidates will be paid by health maintenance, managed care, pharmacy benefit and similar healthcare management organizations, or reimbursed by third-party payers, and there have been increasing efforts by governmental and other third-party payers, in the United States and abroad, to cap or reduce healthcare costs.
In addition, because the length of time and activities associated with successful development of our product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities.
Because the length of time and activities associated with successful development of our product candidates is highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and commercialization activities.
If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates. 74 Table of Contents Our results of operations will be affected by the level of royalty payments that we are required to pay to third parties.
If disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates. Our results of operations will be affected by the level of royalty payments that we are required to pay to third parties.
In that event, we likely would be required to limit the size and scope of one or more of our independent programs or increase our expenditures and seek additional funding, which may not be available on acceptable terms or at all, and our business may be harmed. 55 Table of Contents We rely on third parties to conduct our preclinical studies and clinical trials.
In that event, we likely would be required to limit the size and scope of one or more of our independent programs or increase our expenditures and seek additional funding, which may not be available on acceptable terms or at all, and our business may be harmed. We rely on third parties to conduct our preclinical studies and clinical trials.
For example, the AAV vector and related capsid protein, which we are currently using to deliver many of our ddRNAi and silence and replace product candidates, could cause adverse immunological side effects due to 49 Table of Contents preexisting and/or recall responses to the naturally occurring virus from which the vector is engineered, or to the DNA construct product itself.
For example, the AAV vector and related capsid protein, which we are currently using to deliver many of our ddRNAi and silence and replace product candidates, could cause adverse immunological side effects due to preexisting and/or recall responses to the naturally occurring virus from which the vector is engineered, or to the DNA construct product itself.
In the event of a successful claim of infringement 75 Table of Contents against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.
In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure.
Satisfaction of the marketing approval requirements typically takes several years and the time needed to satisfy them may vary substantially, based on the type, complexity and novelty of the biopharmaceutical product. We cannot predict if or when we might receive regulatory approvals for any of our product candidates currently under development.
Satisfaction of the marketing approval requirements typically takes several years and the time needed to satisfy them may vary substantially, based on 41 Table of Contents the type, complexity and novelty of the biopharmaceutical product. We cannot predict if or when we might receive regulatory approvals for any of our product candidates currently under development.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or 79 Table of Contents marketing of competing products in violation of our proprietary rights generally.
The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents, trade secrets and other intellectual property protection, particularly those relating to biotechnology products, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.
Other elements to assure safe use in a mandated REMS could include, but are not limited to, restrictions upon distribution and prescribing, additional prescriber training, establishment of patient registries and other measures that could limit commercialization of the product. Comparable foreign regulating authorities might require adoption of measures similar to a REMS.
Other elements to assure safe use in a mandated REMS could include, but are not limited to, restrictions upon distribution and prescribing, additional prescriber training, establishment of patient registries and other measures that could limit commercialization of the product. Comparable foreign regulating authorities might require adoption of measures similar to a 48 Table of Contents REMS.
Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our product candidates in certain countries. Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries.
Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our product candidates in certain countries. 51 Table of Contents Further, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries.
Even if we obtain approval for a product candidate, we may not generate or sustain revenue from sales of the product if the product cannot be sold at a competitive cost or if it fails to achieve market acceptance by 59 Table of Contents physicians, patients, third-party payers or others in the medical community.
Even if we obtain approval for a product candidate, we may not generate or sustain revenue from sales of the product if the product cannot be sold at a competitive cost or if it fails to achieve market acceptance by physicians, patients, third-party payers or others in the medical community.
Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may be accused of infringing. In addition, third parties may obtain patents in the future and claim that use of our technologies infringes upon these patents.
Because patent applications can take many years to issue, there may be currently pending patent applications which may later result in issued patents that our product candidates may be accused of infringing. In addition, third parties may obtain patents in 73 Table of Contents the future and claim that use of our technologies infringes upon these patents.
There are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
There are situations in which non-compliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. 76 Table of Contents Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
We will be competing with many companies that currently have extensive and well-funded marketing and sales operations to recruit, hire, train and retain marketing and sales personnel. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates.
We 57 Table of Contents will be competing with many companies that currently have extensive and well- funded marketing and sales operations to recruit, hire, train and retain marketing and sales personnel. We also face competition in our search for third parties to assist us with the sales and marketing efforts of our product candidates.
Any new collaboration may be on terms that are not optimal for us, and we may not be able to maintain any new or existing collaboration if, for example, development or approval of a product candidate is delayed, sales of an approved product candidate do not meet expectations or the collaborator discontinues the collaboration.
Any new collaboration may be on terms that are not optimal for us, and we may not be able to maintain any new or existing collaboration if, for example, development or approval of a product 64 Table of Contents candidate is delayed, sales of an approved product candidate do not meet expectations or the collaborator discontinues the collaboration.
Because we have limited resources, we may forego or delay pursuit of opportunities with certain programs or product candidates or for indications that later prove to have greater commercial potential. Our resource 69 Table of Contents allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
Because we have limited resources, we may forego or delay pursuit of opportunities with certain programs or product candidates or for indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.
An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing. 76 Table of Contents For example, in patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.
An adverse result in any litigation or defense proceedings could put one or more of our patents at risk of being invalidated or interpreted narrowly and could put our patent applications at risk of not issuing. For example, in patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace.
If we seek equity financing we may need to use a significant percentage of our unreserved authorized shares of common stock in such an offering, and would therefore need stockholder approval to implement an increase in our authorized shares of common stock or a reverse stock split in order to issue additional shares of common stock in the future.
If we seek equity financing we may need to use a significant percentage of our unreserved authorized shares of common stock in such an offering, and would therefore need stockholder approval to implement an increase in 80 Table of Contents our authorized shares of common stock or a reverse stock split in order to issue additional shares of common stock in the future.
These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year effective April 2013 that, due to subsequent 63 Table of Contents legislative amendments to the statute, will stay in effect through 2029 unless additional Congressional action is taken.
These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year effective April 2013 that, due to subsequent legislative amendments to the statute, will stay in effect through 2029 unless additional Congressional action is taken.
In recent years, many such changes have been made and changes are likely to continue to occur in the future. Future changes in U.S. tax laws could have a material adverse effect on our business, cash flow, financial condition or results of operations.
In recent years, many such changes have been made and 62 Table of Contents changes are likely to continue to occur in the future. Future changes in U.S. tax laws could have a material adverse effect on our business, cash flow, financial condition or results of operations.
Despite these contractual provisions, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by potential competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.
Despite these contractual provisions, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by potential competitors, are inadvertently incorporated into the technology of others, or 56 Table of Contents are disclosed or used in violation of these agreements.
Any significant efforts at the federal or state levels to reform the healthcare system by changing the way healthcare is provided or funded—including through the expansion of Medicare to larger sections of the population—could have a material impact on our business.
Any significant efforts at the federal or state levels to reform the healthcare system by 61 Table of Contents changing the way healthcare is provided or funded—including through the expansion of Medicare to larger sections of the population—could have a material impact on our business.
We also seek to preserve the integrity and confidentiality of our data and trade secrets by measures designed to maintain the physical security of our 72 Table of Contents premises and physical and electronic security of our information technology systems. Security measures may be breached, and we may not have adequate remedies for any breach.
We also seek to preserve the integrity and confidentiality of our data and trade secrets by measures designed to maintain the physical security of our premises and physical and electronic security of our information technology systems. Security measures may be breached, and we may not have adequate remedies for any breach.
We have devoted most of our financial resources to research and development, including our clinical and preclinical development activities. To date, we and our predecessor have financed our operations primarily through the issuance of equity securities, research 38 Table of Contents and development grants from the Australian government and payments from our collaboration partners.
We have devoted most of our financial resources to research and development, including our clinical and preclinical development activities. To date, we and our predecessor have financed our operations primarily through the issuance of equity securities, research and development grants from the Australian government and payments from our collaboration partners.
Our product candidates derived from our 53 Table of Contents platform technology may not successfully complete investigational new drug, or IND, enabling studies, and our research programs may fail to identify other potential product candidates for clinical development for a number of reasons.
Our product candidates derived from our platform technology may not successfully complete investigational new drug, or IND, enabling studies, and our research programs may fail to identify other potential product candidates for clinical development for a number of reasons.
We have never declared or paid cash dividends on our common stock. For the foreseeable future, we currently intend to retain all available funds and any future earnings to support our operations and to finance the growth 81 Table of Contents and development of our business.
We have never declared or paid cash dividends on our common stock. For the foreseeable future, we currently intend to retain all available funds and any future earnings to support our operations and to finance the growth and development of our business.
A third party that files a patent application in the USPTO after that date but before us could therefore be awarded a patent covering an invention 78 Table of Contents of ours even if we had made the invention before it was made by the third party.
A third party that files a patent application in the USPTO after that date but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by the third party.
We do not expect to generate any significant revenue for the foreseeable future, and we expect to incur significant operating losses for the foreseeable future due to the cost of research and development, preclinical studies and clinical trials and the regulatory approval process for product candidates.
We do 37 Table of Contents not expect to generate any significant revenue for the foreseeable future, and we expect to incur significant operating losses for the foreseeable future due to the cost of research and development, preclinical studies and clinical trials and the regulatory approval process for product candidates.
Although our common stock is listed on Nasdaq, if an active public market in the United States for our common stock does not continue to develop, the market price and liquidity of our common stock may be adversely 80 Table of Contents affected.
Although our common stock is listed on Nasdaq, if an active public market in the United States for our common stock does not continue to develop, the market price and liquidity of our common stock may be adversely affected.
We cannot commercialize a product until the appropriate regulatory authorities have reviewed and approved the product candidate. Even if our product candidates demonstrate safety and efficacy in clinical trials, the regulatory agencies may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval.
We cannot commercialize a product until the appropriate regulatory authorities have reviewed and approved the product candidate. Even if our product candidates demonstrate safety and efficacy in clinical trials, the regulatory 49 Table of Contents agencies may not complete their review processes in a timely manner, or we may not be able to obtain regulatory approval.
The development and commercialization of our products is 60 Table of Contents dependent on the efforts of our third-party collaborators, as we rely on third parties to conduct our preclinical studies and clinical trials, and for our supply of research and development, preclinical and clinical development biologics and other materials.
The development and commercialization of our products is dependent on the efforts of our third-party collaborators, as we rely on third parties to conduct our preclinical studies and clinical trials, and for our supply of research and development, preclinical and clinical development biologics and other materials.
Pursuant to the terms of some of our license agreements with third parties, some of our third-party licensors have the right, but not the obligation, to control enforcement of our licensed patents or 73 Table of Contents defense of any claims asserting the invalidity of these patents.
Pursuant to the terms of some of our license agreements with third parties, some of our third-party licensors have the right, but not the obligation, to control enforcement of our licensed patents or defense of any claims asserting the invalidity of these patents.
We cannot guarantee that any clinical trials will be initiated or conducted as planned or completed on schedule, if at all. A 47 Table of Contents failure of one or more clinical trials can occur at any stage of testing.
We cannot guarantee that any clinical trials will be initiated or conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage of testing.
Any unplanned event, such as flood, fire, explosion, earthquake, extreme weather condition, medical epidemics, including the current COVID-19 pandemic, power shortage, telecommunication failure or other natural or manmade accidents or incidents that result in us being unable to fully utilize the facility, may compromise our ability to operate our business, particularly on a daily basis, cause us financial losses and inhibit or delay our continued development of our product candidates.
Any unplanned event, such as flood, fire, explosion, earthquake, extreme weather condition, medical epidemics and pandemics, power shortage, telecommunication failure or other natural or manmade accidents or incidents that result in us being unable to fully utilize the facility, may compromise our ability to operate our business, particularly on a daily basis, cause us financial losses and inhibit or delay our continued development of our product candidates.
Other than as provided for in our collaboration agreements, we have 54 Table of Contents no control over the resources, time and effort that our collaborators may devote to the development of product candidates.
Other than as provided for in our collaboration agreements, we have no control over the resources, time and effort that our collaborators may devote to the development of product candidates.
Some specific factors that could negatively affect the price of our common stock or result in fluctuations in its price and trading volume include: • results of our clinical trials; • regulatory actions; • actual or expected fluctuations in our operating results; • changes in market valuations of similar companies; • changes in our key personnel; • changes in financial estimates or recommendations by securities analysts; • strategic decisions by us or our competitors, such as acquisitions, collaborations, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • the passage of legislation or other regulatory developments in the United States and other countries affecting us or our industry; • changes in trading volume of our common stock on Nasdaq; • sales of our common stock by us, our executive officers or our shareholders in the future; and • conditions in the financial markets or changes in general economic conditions, including as a result of the current COVID-19 pandemic.
Some specific factors that could negatively affect the price of our common stock or result in fluctuations in its price and trading volume include: • results of our clinical trials; • regulatory actions; • actual or expected fluctuations in our operating results; • changes in market valuations of similar companies; • changes in our key personnel; • changes in financial estimates or recommendations by securities analysts; • strategic decisions by us or our competitors, such as acquisitions, collaborations, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; • the passage of legislation or other regulatory developments in the United States and other countries affecting us or our industry; • changes in trading volume of our common stock on Nasdaq; 78 Table of Contents • sales of our common stock by us, our executive officers or our shareholders in the future; and • conditions in the financial markets or changes in general economic conditions.
Many companies in the pharmaceutical and biotechnology industries 45 Table of Contents have suffered significant setbacks in clinical trials after achieving positive results in preclinical development or early stage clinical trials, and we cannot be certain that we will not face similar setbacks.
Many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical trials after achieving positive results in preclinical development or early stage clinical trials, and we cannot be certain that we will not face similar setbacks.
Pursuant to the terms of certain of our warrants, we are obligated to have an effective registration statement 82 Table of Contents covering the resale of the shares of common stock underlying such warrants.
Pursuant to the terms of certain of our warrants, we are obligated to have an effective registration statement covering the resale of the shares of common stock underlying such warrants.
If no registration is effective at the time a warrant holder seeks to exercise their warrants, we would be obligated to issue shares to such warrant holder in a “cashless exercise” in exchange for such holder’s warrants, in which case we would not receive the cash that we would otherwise receive in an exercise of warrants for cash.
If no registration is effective at the time a warrant holder seeks to exercise their warrants, we would be obligated to issue shares to such warrant holder in a “cashless exercise” in exchange for such holder’s warrants, in which case we would not receive the cash that we would otherwise receive in an exercise of warrants for cash. 81 Table of Contents Item 1B.
If the results of our current or any future clinical trials are inconclusive or if there are safety concerns or adverse events associated with our product candidates, we may: • fail to obtain, or be delayed in obtaining, marketing approval for our product candidates; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; • need to change the way the product is administered; • be required to perform additional clinical trials to support approval or be subject to additional post- marketing testing requirements; • have regulatory authorities withdraw their marketing approval of the product after granting it; • have regulatory authorities impose restrictions on distribution of the product in the form of a risk evaluation and mitigation strategy, or REMS, or modified REMS, that limit our ability to commercialize the product; • be subject to the addition of labeling statements, such as warnings or contraindications; • be sued and held liable for harm caused to patients; or • experience damage to our reputation.
If the results of our current or any future clinical trials are inconclusive or if there are safety concerns or adverse events associated with our product candidates, we may: • fail to obtain, or be delayed in obtaining, marketing approval for our product candidates; • obtain approval for indications or patient populations that are not as broad as intended or desired; • obtain approval with labeling that includes significant use or distribution restrictions or safety warnings; • need to change the way the product is administered; • be required to perform additional clinical trials to support approval or be subject to additional post- marketing testing requirements; • have regulatory authorities withdraw their marketing approval of the product after granting it; • have regulatory authorities impose restrictions on distribution of the product in the form of a risk evaluation and mitigation strategy, or REMS, or modified REMS, that limit our ability to commercialize the product; • be subject to the addition of labeling statements, such as warnings or contraindications; • be sued and held liable for harm caused to patients; or • experience damage to our reputation. 47 Table of Contents Any of these events could prevent us from achieving or maintaining market acceptance of our product candidates and impair our ability to commercialize our product candidates.
Risks Related to Our Financial Condition, Capital Requirements We have incurred significant losses since inception and anticipate that we will continue to incur losses for the foreseeable future. If we are unable to achieve or sustain profitability, the market value of our common stock will likely decline. As of June 30, 2022, we had accumulated losses of $148.3 million.
Risks Related to Our Financial Condition, Capital Requirements We have incurred significant losses since inception and anticipate that we will continue to incur losses for the foreseeable future. If we are unable to achieve or sustain profitability, the market value of our common stock will likely decline. As of June 30, 2023, we had accumulated losses of $167.9 million.
The costs related to significant security breaches or disruptions could be material and exceed the limits of any insurance coverage we may have.
The costs related to significant security breaches or disruptions could be material and exceed 68 Table of Contents the limits of any insurance coverage we may have.
Therefore, our patents and patent applications may not be prosecuted and enforced in a manner consistent with the best interests of our business.
Therefore, our patents and patent applications may not be prosecuted 69 Table of Contents and enforced in a manner consistent with the best interests of our business.
The COVID-19 pandemic and other public health crises may materially and adversely affect our business, financial condition and results of operations. The COVID-19 pandemic and other public health crises may materially and adversely affect our business, financial condition and results of operations.
Events such as the COVID-19 pandemic and other public health crises may materially and adversely affect our business, financial condition and results of operations.
If we fail to obtain FDA approval to market our product candidates, we will be unable to sell our product candidates in the United States, which will significantly impair our ability to generate revenues.
If we fail to 42 Table of Contents obtain FDA approval to market our product candidates, we will be unable to sell our product candidates in the United States, which will significantly impair our ability to generate revenues.
Currently, no product candidates utilizing ddRNAi technology or silence and replace technology have been approved for commercial sale and our approach to the development of ddRNAi technology and silence and replace technology may not result in safe, effective or marketable products; • We are early in our product development efforts and our current product candidates are still in preclinical development.
Currently, no product candidates utilizing ddRNAi technology or silence and replace technology have been approved for commercial sale and our approach to the development of ddRNAi technology and silence and replace technology may not result in safe, effective or marketable products; • We are early in our product development efforts and our current product candidate is in early clinical stage.
If we are unable to conclude that we have effective internal controls over financial reporting, investors may lose confidence in our operating results, the price of our common stock could decline and we may be subject to litigation or regulatory enforcement actions.
These changes may not, however, be effective in maintaining the adequacy of our internal control. If we are unable to conclude that we have effective internal controls over financial reporting, investors may lose confidence in our operating results, the price of our common stock could decline and we may be subject to litigation or regulatory enforcement actions.
Failure to obtain capital when needed may negatively impact our ability to continue as a going concern; • Our auditors’ report expresses doubt about our ability to continue as a going concern; • Our product candidates are based on ddRNAi and silence and replace technology.
Failure to obtain capital when needed may negatively impact our ability to continue as a going concern; • Our product candidates are based on ddRNAi and silence and replace technology.
We have limited experience in development and commercialization of pharmaceutical products. As our product candidates continue to advance through preclinical studies and any future clinical trials and potentially toward regulatory approval and commercial sale, we will need to expand our development, regulatory, manufacturing and sales capabilities or contract with other organizations to provide these capabilities for us.
As our product candidates continue to advance through preclinical studies and any future clinical trials and potentially toward regulatory approval and commercial sale, we will need to expand our development, regulatory, manufacturing and sales capabilities or contract with other organizations to provide these capabilities for us.
We do not own manufacturing facilities or supply sources for such materials. There can be no assurance that our supply of research and development, preclinical and clinical development biologics and other materials will not be limited, interrupted or restricted in certain geographic regions, be of satisfactory quality or continue to be available at acceptable prices.
There can be no assurance that our supply of research and development, preclinical and clinical development biologics and other materials will not be limited, interrupted or restricted in certain geographic regions, be of satisfactory quality or continue to be available at acceptable prices.
The investment of our cash and cash equivalents is subject to risks which may cause losses and affect the liquidity of these investments. As of June 30, 2022, we had $4.1 million in cash and cash equivalents.
The investment of our cash and cash equivalents is subject to risks which may cause losses and affect the liquidity of these investments. As of June 30, 2023, we had $2.5 million in cash and cash equivalents.
We will continue to seek to raise additional working capital through public equity, private equity or debt financings. If we fail to raise additional working capital, or do so on commercially unfavorable terms, it would materially and adversely affect our business, prospects, financial condition and results of operations, and we may be unable to continue as a going concern.
If we fail to raise additional working capital, or do so on commercially unfavorable terms, it may materially and adversely affect our business, prospects, financial condition and results of operations, and we may be unable to continue as a going concern.
We may develop related diagnostics for some of our therapeutic product candidates. Such related diagnostics are subject to regulation by the FDA and typically to comparable foreign regulatory authorities as medical devices and typically require separate regulatory approval or clearance prior to commercialization. Marketing approval or clearance of the diagnostic will require sufficient data to support its safety and efficacy.
Such related diagnostics are subject to regulation by the FDA and typically to comparable foreign regulatory authorities as medical devices and typically require separate regulatory approval or clearance prior to commercialization. Marketing approval or clearance of the diagnostic will require sufficient data to support its safety and efficacy.
For example, if a key scientist acting as a principal investigator in any of our future clinical trials identifies a potential product or compound that is more scientifically interesting to his or her professional interests, his or her availability to remain involved in any future clinical trials could be restricted or eliminated. 67 Table of Contents We may experience difficulties in managing our growth and expanding our operations.
For example, if a key scientist acting as a principal investigator in any of our future clinical 65 Table of Contents trials identifies a potential product or compound that is more scientifically interesting to his or her professional interests, his or her availability to remain involved in any future clinical trials could be restricted or eliminated.
We have not yet secured manufacturing capabilities for commercial quantities of our product candidates or established facilities in the desired locations to support commercialization of our product candidates. We intend to rely on third-party manufacturers for commercialization, but have not entered into any agreements with such manufacturers to support our product candidates currently in development.
Risks Related to Commercialization of Our Product Candidates We have not entered into agreements with any third-party manufacturers to support commercialization of our product candidates. We have not yet secured manufacturing capabilities for commercial quantities of our product candidates or established facilities in the desired locations to support commercialization of our product candidates.
In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.
This risk is material in light of the length of the development process of our products and lifespan of our current patent portfolio. 70 Table of Contents In addition to the protection afforded by patents, we rely on trade secret protection and confidentiality agreements to protect proprietary know-how that is not patentable or that we elect not to patent, processes for which patents are difficult to enforce and any other elements of our product candidate discovery and development processes that involve proprietary know-how, information or technology that is not covered by patents.
Some of our current product candidates, if approved, would compete with approved and currently marketed treatments. 61 Table of Contents In addition, our ddRNAi-based product candidates would compete with antisense and other RNA-based pharmaceutical products currently under development. Like RNAi therapeutics, antisense products target mRNA with the objective of suppressing the activity of specific genes.
In addition, our ddRNAi-based product candidates would compete with antisense and other RNA-based pharmaceutical products currently under development. Like RNAi therapeutics, antisense products target mRNA with the objective of suppressing the activity of specific genes.
Any such collaboration, or other strategic transaction, may require us to incur non-recurring or other charges, increase our expenditures, pose significant integration or implementation challenges or disrupt our management or business. 66 Table of Contents These transactions would entail numerous operational and financial risks, including exposure to unknown liabilities, incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses, difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business, impairment of relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership and the inability to retain key employees of any acquired business.
These transactions would entail numerous operational and financial risks, including exposure to unknown liabilities, incurrence of substantial debt or dilutive issuances of equity securities to pay transaction consideration or costs, higher than expected collaboration, acquisition or integration costs, write-downs of assets or goodwill or impairment charges, increased amortization expenses, difficulty and cost in facilitating the collaboration or combining the operations and personnel of any acquired business, impairment of relationships with key suppliers, manufacturers or customers of any acquired business due to changes in management and ownership and the inability to retain key employees of any acquired business.
Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify our existing accounting systems, take a significant period of time to complete and divert management’s attention from other business concerns. These changes may not, however, be effective in maintaining the adequacy of our internal control.
Implementing any appropriate changes to our internal controls may require specific compliance training of our directors and employees, entail substantial costs in order to modify 79 Table of Contents our existing accounting systems, take a significant period of time to complete and divert management’s attention from other business concerns.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of confidential or proprietary information, including data related to our personnel, we could incur liability and the further development and commercialization of our product candidates could be delayed and our business and operations could be adversely affected and/or could result in the loss or disclosure of critical or sensitive data, which could result in financial, legal, business or reputational harm to us. 70 Table of Contents Our current laboratory operations are concentrated in one location and any events affecting this location may seriously compromise our ability to operate our business and continue the development of our product candidates.
To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or systems, or inappropriate disclosure of confidential or proprietary information, including data related to our personnel, we could incur liability and the further development and commercialization of our product candidates could be delayed and our business and operations could be adversely affected and/or could result in the loss or disclosure of critical or sensitive data, which could result in financial, legal, business or reputational harm to us.
The FDA or comparable foreign regulatory authorities may impose a REMS or other conditions upon our approval that limit our ability to commercialize the product candidate. 51 Table of Contents Inadequate funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
Inadequate funding for the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner or otherwise prevent those agencies from performing normal business functions on which the operation of our business may rely, which could negatively impact our business.
Certain of our key employees and personnel are or were previously employed at universities, medical institutions or other biotechnology or pharmaceutical companies, including our competitors or potential competitors. 77 Table of Contents Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any of our employee’s former employer or other third parties.
Although we try to ensure that our employees, consultants and independent contractors do not use the proprietary information or know-how of others in their work for us, we may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed intellectual property, including trade secrets or other proprietary information, of any of our employee’s former employer or other third parties.
To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming.
Competitors may infringe our patents or the patents of our licensors. To counter infringement or unauthorized use, we may be required to file infringement claims, which can be expensive and time-consuming.
In addition, product manufacturers and their establishments, products and applications are subject to payment of user fees/or and continual review and periodic inspections by the FDA and comparable foreign regulatory authorities for compliance with cGMP and comparable foreign requirements, and adherence to commitments made in the BLA.
Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable foreign, federal and state laws. 50 Table of Contents In addition, product manufacturers and their establishments, products and applications are subject to payment of user fees/or and continual review and periodic inspections by the FDA and comparable foreign regulatory authorities for compliance with cGMP and comparable foreign requirements, and adherence to commitments made in the BLA.
In the event that any of our suppliers or manufacturers fails to comply with such requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves or enter into an agreement with another third party, which would be costly and delay any future clinical trials. 56 Table of Contents In some cases, the technical skills or technology required to manufacture our product candidates may be unique or proprietary to the original manufacturer and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills or technology to another third party.
In the event that any of our suppliers or manufacturers fails to comply with such requirements or to perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves or enter into an agreement with another third party, which would be costly and delay any future clinical trials.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe are not currently a party to any material legal proceedings. Item 4. Mine Safety Disclosures. Not applicable. 84 Table of Contents PART II
Biggest changeWe are not currently a party to any material legal proceedings. Item 4. Mine Safety Disclosures. Not applicable. 82 Table of Contents PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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Market Information Our common stock trades on Nasdaq under the symbol “BNTC.” On August 15, 2023, the closing sale price of our common stock as reported on Nasdaq was $2.69 per share. Holders As of September 10, 2023, we had approximately 3,318 record holders of our common stock.
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The number of record holders is based on the actual number of holders registered on the books of our transfer agent and does not reflect holders of shares in “street name” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies.
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Dividends We never have declared or paid any cash dividends on our capital stock. Currently, we anticipate that we will retain all available funds for use in the operation and expansion of our business and do not anticipate paying any cash dividends for the foreseeable future.
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Any future determination relating to dividend policy will be made at the discretion of our Board and will depend on our future earnings, capital requirements, financial condition, prospects, applicable Delaware law, which provides that dividends are only payable out of surplus or current net profits, and other factors that our Board deems relevant. Recent Sales of Unregistered Securities None.
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Use of Proceeds Not applicable. Purchases of Equity Securities Not applicable. Item 6. Reserved. 83 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAny future determination relating to dividend policy will be made at the discretion of our Board and will depend on our future earnings, capital requirements, financial condition, prospects, applicable Delaware law, which provides that dividends are only payable out of surplus or current net profits, and other factors that our Board deems relevant. Recent Sales of Unregistered Securities None.
Biggest changeAny future determination relating to our dividend policy will be made at the discretion of our Board and will depend on our future earnings, capital requirements, financial condition, prospects, applicable Delaware law, which provides that dividends are only payable out of surplus or current net profits, and other factors that our Board deems relevant.
Dividends We never have declared or paid any cash dividends on our capital stock. Currently, we anticipate that we will retain all available funds for use in the operation and expansion of our business and do not anticipate paying any cash dividends for the foreseeable future.
DIVIDEND POLICY We never have declared or paid any cash dividends on our capital stock. Currently, we anticipate that we will retain all available funds for use in the operation and expansion of our business and do not anticipate paying any cash dividends for the foreseeable future.
Removed
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock trades on Nasdaq under the symbol “BNTC.” On August 15, 2022, the closing sale price of our common stock as reported on Nasdaq was $0.845 per share.
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Equity or Equity-Linked Incentive Awards Although we do not have a formal policy with respect to the grant of equity incentive awards to our NEOs, we believe that equity grants provide our NEOs with a strong link to our long-term performance, create an ownership culture and help to align the interests of our NEOs and our stockholders.
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Holders As of August 15, 2022, we had approximately 3,313 record holders of our common stock.
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On December 9, 2020, the Company’s stockholders approved the Company’s 2020 Equity and Incentive Compensation Plan (the “2020 Plan”).
Removed
The number of record holders is based on the actual number of holders registered on the books of our transfer agent and does not reflect holders of shares in “street name” or persons, partnerships, associations, corporations or other entities identified in security position listings maintained by depository trust companies.
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Our Compensation Committee has granted stock options to our NEOs, which have historically been subject to time-based vesting, vesting in increments of one-third on each of the first, second and third anniversaries of the applicable grant date, generally subject to the applicable NEO’s continued employment through the vesting date.
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Use of Proceeds Not applicable. Purchases of Equity Securities Not applicable. Item 6. Reserved. 85 Table of Contents
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We believe that equity grants with a time-based vesting feature promote executive retention because this feature incentivizes our NEOs to remain in our employment during the vesting period. III-6 Table of Contents On June 13, 2023, the Compensation Committee approved the grant to each of Dr. Banks and Ms.
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Boston, of nonqualified stock options to purchase 20,994 and 9,000 shares (reflective of the Reverse Stock Split), respectively, of the Company’s common stock pursuant to the 2020 Plan. The stock options vest in increments of one-third on each of the first, second and third anniversaries of the applicable grant date.
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If an NEO dies or terminates employment or service due to Disability (as defined in the 2020 Plan), the NEO generally has 12 months to exercise their vested options or the options are cancelled.
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If an NEO otherwise leaves the Company, other than for a termination by the Company for Cause (as defined in the 2020 Plan), the NEO generally has 90 days to exercise their vested options or the options are cancelled.
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Upon the consummation of a Change in Control (as defined in the 2020 Plan), all unvested stock options will immediately vest as of immediately prior to the Change in Control. Employment Agreements with our NEOs. We are a party to employment agreements with each of our NEOs.
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These employment agreements provide for “at will” employment and may be terminated at any time. Employment Agreement with Dr. Jerel A. Banks, M.D. Ph.D. In September 2018, Tacere Therapeutics, Inc., a subsidiary of the Company, entered into an employment agreement with Dr. Banks setting forth the terms of his employment as Executive Chairman and Chief Executive Officer of Limited.
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In connection with the Re-Domiciliation, Dr. Banks was appointed Executive Chairman and Chief Executive Officer of the Company. The agreement provides for Dr.
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Banks’ employment and sets forth his (i) annual base salary, (ii) discretionary annual bonus, (iii) eligibility to participate in employee benefit plans, (iv) eligibility for accrued paid vacation, (v) expense reimbursements in accordance with Company policy, (vi) eligibility to participate in the Company’s Share Option Plan (as defined below), (vii) post-employment obligations to refrain from soliciting our employees for one year following the end of employment, and (viii) certain non-disparagement obligations.
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Dr. Banks’ employment agreement also provides for confidentiality of information and ownership of proprietary property restrictions. Pursuant to the employment agreement, Dr. Banks’ employment is “at will” and can be terminated at any time. However, the Company must provide Dr. Banks with at least six months’ prior notice (or pay in lieu of notice) prior to any termination. Dr.
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Banks may terminate his employment on no fewer than six months’ prior written notice to the Company. Notwithstanding any provisions in the employment agreement, the Company may terminate Dr. Banks’ employment immediately without prior notice to Dr.
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Banks if he (a) commits any serious or persistent breach of any of the provisions of the employment agreement, (b) commits any act of willful or serious misconduct or negligence in the discharge of his duties, (c) becomes of unsound mind or under the control of any committee or officer under any law relating to mental health, (d) is convicted of a felony, which in our reasonable opinion affects Dr.
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Banks’ position, or (e) becomes permanently incapacitated by accident or illness from performing duties under the employment agreement for a period aggregating more than three months in any six-month period, or for any period beyond three consecutive months.
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Employment Agreement with Megan Boston In July 2018, Limited entered into an employment agreement with Megan Boston for the position of Executive Director. In connection with entering into the employment agreement, Ms. Boston ceased serving as a Non-Executive Director of the Company. Ms. Boston remains on the Board as an Executive Director. The employment agreement provides for Ms.
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Boston’s employment and sets forth her (i) annual base salary, (ii) discretionary annual bonus, (iii) superannuation contribution, (iv) eligibility for accrued paid vacation, (v) expense reimbursements in accordance with Company policy, and (vi) post-employment obligations to refrain from soliciting our employees for one year following the end of employment. Ms.
Added
Boston’s employment agreement also provides for confidentiality of information and ownership of proprietary property restrictions. III-7 Table of Contents Pursuant to the employment agreement, Ms. Boston’s employment is “at will” and can be terminated at any time. However, the Company must provide Ms.
Added
Boston with at least six months’ prior notice (or pay in lieu of notice) prior to any termination. Ms. Boston may terminate her employment on no fewer than six months’ prior written notice. Notwithstanding any provisions in the employment agreement, the Company may terminate Ms. Boston’s employment immediately without prior notice to Ms.
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Boston if she (a) commits any serious or persistent breach of any of the provisions of the employment agreement, (b) commits any act of willful or serious misconduct or negligence in the discharge of her duties, (c) becomes bankrupt or makes any arrangement or composition with her creditors, (d) becomes of unsound mind or under the control of any committee or officer under any law relating to mental health, (e) is convicted of any criminal offense other than an offense which in our reasonable opinion does not affect Ms.
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Boston’s position, or (f) becomes permanently incapacitated by accident or illness from performing her duties under the employment agreement for a period aggregating more than three months in any six-month period, or any period beyond three consecutive months.
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Outstanding Equity Awards at Fiscal Year-End The following table sets forth information regarding outstanding equity or equity-linked awards for each of our NEOs as of June 30, 2023. All amounts are reflective of the Company’s 1-for-17 reverse stock split of the shares of Common Stock, effective July 26, 2023 (the “Reverse Stock Split”).
Added
Option Awards Named Executive Officer Grant Date Number of Securities Underlying Unexercised Options (#)— Exercisable Number of Securities Underlying Unexercised Options (#)— Unexercisable Option Exercise Price ($) Option Expiration Date Dr. Jerel A. Banks, M.D.
Added
Ph.D. 6/13/2023(1)(2) — 20,994 3.91 6/13/2033 Executive Chairman and Chief Executive Officer 12/9/2020(1)(2) 11,150 5,576 50.66 12/9/2030 Megan Boston 6/13/2023(1)(2) — 9,000 3.91 6/13/2033 Executive Director 12/9/2020(1)(2) 5,575 2,788 50.66 12/9/2030 3/12/2019(2)(3) 980 — 721.99 3/12/2024 (1) The option awards were granted under the 2020 Plan.
Added
(2) The shares subject to each of the option awards vest in substantially equal installments on each of the first, second and third anniversaries of the grant date, generally subject to continued employment through the applicable vesting date.
Added
(3) The option awards were granted under the Benitec Officers’ and Employees’ Share Option Plan prior to the Re-Domiciliation (the “ Share Option Plan ”). The share amounts and exercise prices of the awards shown in this table have been adjusted to reflect the terms of the Re-Domiciliation.
Added
Other Elements of Compensation Other Benefits and Perquisites We offer participation in broad-based retirement, health and welfare plans to all of our colleagues, including our NEOs. We maintain a tax-qualified defined contribution retirement plan that provides eligible U.S. employees (including Dr. Banks) with an opportunity to save for retirement on a tax-advantaged basis.
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Plan participants are eligible to defer eligible compensation subject to applicable annual Internal Revenue Code limits. The 401(k) III-8 Table of Contents plan is intended to be qualified under Section 401(a) of the Internal Revenue Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Internal Revenue Code.
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As a tax-qualified retirement plan, contributions to the 401(k) plan and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan. We contribute to the Australian superannuation scheme that provides eligible Australian employees (including Ms. Boston) with an opportunity to save for retirement on a tax-advantaged basis.
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We pay superannuation in accordance with legislative requirements and our minimum contribution is set by legislation. We offer flexibility for salary sacrifice to be added to the superannuation scheme and any actual increase in our contribution to the superannuation scheme is subject to legislative rules at the time.
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Termination or Change in Control Benefits The employment agreements with our NEOs provide for specified notice periods (or pay in lieu of notice) if the Company terminates the employment of our NEOs under certain circumstances, as described above in the “Employment Agreements with our NEOs” section.
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Upon the consummation of a Change in Control (as defined in the 2020 Plan), all unvested stock options granted pursuant to the 2020 Plan will immediately vest as of immediately prior to the Change in Control.
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Our NEOs are not eligible to receive any additional payments or benefits in connection with their termination of employment or in connection with the Company’s change in control.
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Pay Versus Performance Disclosure As required by Item 402(v) of Regulation S-K, which was mandated by Section 953(a) of the Dodd-Frank Act, we are providing the following information about the relationship between “compensation actually paid” to our principal executive officer (“PEO”) and average “compensation actually paid” (“CAP”) to each of our NEOs and the financial performance of the Company for the Company’s fiscal years ended June 30, 2023 (“Fiscal 2023”) and June 30, 2022 (“Fiscal 2022”), in each case calculated in a manner consistent with SEC rules.
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Year Summary Compensation Table Total for PEO(1) Compensation Actually Paid to PEO(1)(2) Average Summary Compensation Table Total for Non-PEO NEOs (2)(3) Average Compensation Actually Paid to Non-PEO NEOs (2)(3) Value of Initial Fixed $100 Investment Based On(4): Net Income (loss) (in thousands) Total Shareholder Return 2023 $ 645,725 $ 428,866 $ 352,529 $ 243,965 $ (79.44 ) $ (14,901 )(5) 2022 $ 799,964 $ (176,698 ) $ 456,476 $ (39,270 ) $ (71.36 ) $ (18,208 ) (1) The PEO reflected in these columns for Fiscal 2023 and Fiscal 2022 is Dr.
Added
Jerel A. Banks, M.D. Ph.D. (2) CAP to our PEO and Non-PEO NEO (Megan Boston, our Executive Director) is calculated based on the “Total Compensation” reported in the Summary Compensation Table (“SCT”) for each of the applicable fiscal years, adjusted to exclude and include certain items in accordance with Item 402(v) of Regulation S-K as follows.
Added
PEO SCT Total to CAP Reconciliation: Fiscal Year SCT Total Deductions from SCT Total (i) Additions to SCT Total (ii) CAP Fair Value of Current Year Equity Awards for Fiscal Year 2023 Change in Value of Prior Years’ Awards Unvested for Fiscal Year 2023 Change in Value of Prior Years’ Awards that Vested in Fiscal Year 2023 2023 $ 645,725 $ 70,657 74,271 (230,188 ) 9,715 $ 428,866 2022 $ 799,964 $ 0 0 (867,266 ) (109,396 ) $ (176,698 ) III-9 Table of Contents Average Non-PEO NEOs SCT Total to CAP Reconciliation: Fiscal Year Summary Compensation Table (“SCT”) Total Deductions from SCT(i) Additions to SCT(ii) CAP Fair Value of Current Year Equity Awards for Fiscal Year 2023 Change in Value of Prior Years’ Awards Unvested for Fiscal Year 2023 Change in Value of Prior Years’ Awards that Vested in Fiscal Year 2023 2023 $ 352,529 $ 30,289 31,839 (114,972 ) 4,858 $ 243,965 2022 $ 456,476 $ 0 0 (435,106 ) (60,640 ) $ (39,270 ) (i) Represents the grant date fair value of equity-based awards granted each year as reported in the Summary Compensation Table for the applicable fiscal year.
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The fair values of equity compensation, including such amounts described in the tables above, are calculated in accordance with FASB ASC Topic 718. All assumptions made in the valuations are contained and described in Note 10 to the Company’s consolidated financial statements for the year ended June 30, 2023 included in this Annual Report.
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We did not report a change in pension value for any of the years reflected in this table because the Company does not maintain a defined benefit or actuarial pension plan and therefore a deduction from SCT related to such pension plans is not needed.
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(ii) Reflects the value of equity calculated in accordance with the SEC methodology for determining CAP for each year shown. The fair values of equity compensation, including such amounts described in the tables below, are calculated in accordance with FASB ASC Topic 718.
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The amounts shown in the table reflect the total fair value on the applicable date(s) listed in the table above, and do not necessarily reflect the actual value, if any, that may be realized by the PEO.
Added
(3) The non-PEO NEO reflected in these columns, and our only non-PEO for the covered fiscal years, is Megan Boston (Executive Director) (4) Represents cumulative total return to holders of our common stock from June 30, 2021 (the last trading day before Fiscal 2022) through June 30, 2023 (the last trading day of the covered period), calculated from the market close on the last trading day before Fiscal 2022 through and including the end of each applicable fiscal year in the table above for which the total shareholder return is being calculated.
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The total shareholder return for each investment assumes that $100 was invested in our common stock and the respective index on June 30, 2021 through June 30, 2023, including reinvestment of any dividends (of which none were paid during this period).
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Relationship Between Financial Performance Measures and CAP In Fiscal 2023, there was an inverse relationship between our total shareholder return compared to our PEO CAP and our average non-PEO NEO CAP, and there was a direct relationship between our net income compared to our PEO CAP and our average non-PEO NEO CAP.
Added
Our total shareholder return decreased by approximately 11% as compared to Fiscal 2022. Our net income between Fiscal 2022 and Fiscal 2023 decreased by approximately 5%. Our PEO CAP increased by approximately 343% and our average non-PEO NEO CAP increased by approximately 721%, in each case as compared to Fiscal 2022.
Added
In Fiscal 2022, there was a direct relationship between our total shareholder return and net income, compared to our PEO CAP and average non-PEO NEO CAP, all of which were negative in Fiscal 2022. Our total shareholder return decreased by approximately 42% as compared to Fiscal 2021. Our net income between Fiscal 2021 and Fiscal 2022 decreased by approximately 31%.
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And our PEO CAP and average non-PEO NEO CAP each decreased by approximately 110% and 104%, respectively, as compared to Fiscal 2021. III-10 Table of Contents DIRECTOR COMPENSATION The following table shows the total compensation paid to the Company’s directors (other than any such directors who are also NEOs) for the fiscal year ended June 30, 2023.
Added
Name Fees Earned or Paid in Cash ($)(2) Option Awards ($)(3) All Other Compensation ($)(4) Total ($) J. Kevin Buchi 64,000 1,777 — 65,777 Peter Francis 60,066 1,777 5,460 67,303 Edward F. Smith 61,208 1,777 — 62,985 (1) For information regarding the compensation of Dr. Banks and Ms. Boston, see “Summary Compensation Table.” (2) Fees paid to Mr.
Added
Francis were paid in Australian dollars and have been converted to U.S. dollars using a conversion rate of A$1.00 to $0.673 for the fiscal year ended June 30, 2023.
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(3) Amount represents the aggregate grant date fair value of stock and option awards granted by the Company in the fiscal year ended June 30, 2023, computed in accordance with FASB ASC Topic 718.
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For further information on how we account for stock-based compensation, see Note 10 to the Company’s consolidated financial statements for the year ended June 30, 2023 included in this Annual Report. These amounts reflect the Company’s accounting expense for these awards and do not correspond to the actual amounts, if any, that will be recognized by the directors.
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(4) For information regarding other compensation of all directors, see “Narrative Disclosure to Director Compensation Table.” For each director, the aggregate number of option awards outstanding at fiscal year-end for the fiscal year ended June 30, 2023 is set forth below. All amounts below are reflective of the Reverse Stock Split: Name Option Awards (#) J.
Added
Kevin Buchi 2,798 Peter Francis 2,798 Edward F. Smith 2,798 Narrative Disclosure to Director Compensation Table Upon their appointment as executive officers and employees, Dr. Banks and Ms. Boston no longer receive annual fees with respect to their service on the Board.
Added
The annual fees for the fiscal year ended June 30, 2023 paid to our non-employee directors were: • an annual cash retainer of $40,000; • an additional annual cash retainer of $15,000 to the chair of the Audit Committee; • an additional annual cash retainer of $10,000 to the chair of the Compensation Committee; • an additional annual cash retainer of $7,500 to the chair of the Nominating Committee; • an additional annual cash retainer of $7,500 to a non-chair member of the Audit Committee; • an additional annual cash retainer of $5,000 to a non-chair member of the Compensation Committee; and • an additional annual cash retainer of $4,000 to a non-chair member of the Nominating Committee.
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III-11 Table of Contents In addition to the cash fees paid to our non-employee directors, the Board granted each of Messrs. Buchi, Francis and Smith seven hundred five (705) option awards (reflective of the Reverse Stock Split) on December 7, 2022.
Added
The option awards vest in three substantially equal installments on the day prior to each of the Company’s next three annual stockholder meetings occurring immediately following December 7, 2022. In addition, the Company makes a superannuation contribution on Mr. Francis’ behalf in the amount of $5,460.

Item 7. Management's Discussion & Analysis

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

47 edited+8 added−27 removed26 unchanged
Biggest changeNew Accounting Standards and Interpretations not yet mandatory or early adopted ASU 2016-13 —In June 2016, the FASB issued ASU No. 2016-13: “ Financial Instruments—Credit Losses (Topic 326)”. This ASU represents a significant change in the accounting for credit losses model by requiring immediate recognition of management’s estimates of current expected credit losses (CECL).
Biggest changeThe Company values employee and non-employee share-based compensation at fair value using the Black-Scholes Option Pricing Model. Recent Accounting Pronouncements Accounting Standards recently adopted None. New Accounting Standards and Interpretations not yet mandatory or early adopted ASU 2016-13 —In June 2016, the FASB issued ASU No. 2016-13: “ Financial Instruments—Credit Losses (Topic 326)”.
The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. The Company makes significant judgments and estimates in determining the accrued liabilities balance at the end of each reporting period. As actual costs become known, the Company adjusts its accrued liabilities.
The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with its third-party service providers. The Company makes significant judgments and estimates in determining the accrued liabilities balance at the end of each reporting period. As actual costs become known, the Company adjusts its accrued liabilities.
Our future funding requirements will depend on many factors, including, but not limited to: • the timing and costs of our planned clinical trials for our ddRNAi and silence and replace product candidates; • the timing and costs of our planned preclinical studies for our ddRNAi and silence and replace product candidates; • the number and characteristics of product candidates that we pursue; • the outcome, timing and costs of seeking regulatory approvals; • revenue received from commercial sales of any of our product candidates that may receive regulatory approval; • the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may establish; • the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; • the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property related claims; and • the extent to which we need to in-license or acquire other products and technologies.
Our future funding requirements will depend on many factors, including, but not limited to: • the timing and costs of our planned clinical trials for our ddRNAi and silence and replace product candidates; • the timing and costs of our planned preclinical studies for our ddRNAi and silence and replace product candidates; 89 Table of Contents • the number and characteristics of product candidates that we pursue; • the outcome, timing and costs of seeking regulatory approvals; • revenue received from commercial sales of any of our product candidates that may receive regulatory approval; • the terms and timing of any future collaborations, licensing, consulting or other arrangements that we may establish; • the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; • the costs of preparing, filing and prosecuting patent applications, maintaining and protecting our intellectual property rights and defending against intellectual property related claims; and • the extent to which we need to in-license or acquire other products and technologies.
As such, ASU 2019-10: “ Financial Instruments-Credit Losses, Derivatives and Hedging, and Leases: Effective Dates” amended the effective date for the Company to be for reporting periods beginning after December 15, 2022. The Company will adopt this ASU effective July 1, 2023.
As such, ASU 2019-10: “ Financial Instruments-Credit Losses, Derivatives and Hedging, and Leases: Effective Dates ” amended the effective date for the Company to be for reporting periods beginning after December 15, 2022. The Company will adopt this ASU effective July 1, 2023.
These uncertainties are discussed in the section above entitled “Risk Factors.” Based on a critical assessment of its accounting policies and the underlying judgments and uncertainties affecting the application of those policies, management believes that the Company’s consolidated financial statements are fairly stated in accordance with accounting principles generally accepted in the United States of America, and provide a meaningful presentation of the Company’s financial condition and results of operations.
These uncertainties are discussed in the section above entitled “Risk Factors.” Based on a critical assessment of its accounting policies and the underlying judgments 90 Table of Contents and uncertainties affecting the application of those policies, management believes that the Company’s consolidated financial statements are fairly stated in accordance with accounting principles generally accepted in the United States of America, and provide a meaningful presentation of the Company’s financial condition and results of operations.
(“Benitec” or the “Company” or in the third person, “we” or “our”) is a development- stage biotechnology company focused on the advancement of novel genetic medicines with headquarters in Hayward, California.
(“Benitec” or the “Company” or in the third person, “we” or “our”) is a clinical-stage biotechnology company focused on the advancement of novel genetic medicines with headquarters in Hayward, California.
The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and includes these costs in trade and other payables on the consolidated balance sheets and within research and development expenses on the consolidated statements of operations and comprehensive loss.
The Company records the estimated costs of research and development activities based 86 Table of Contents upon the estimated amount of services provided but not yet invoiced and includes these costs in trade and other payables on the consolidated balance sheets and within research and development expenses on the consolidated statements of operations and comprehensive loss.
The change is primarily due to a decrease in license fees. During the year ended June 30, 2022, we incurred $11.272 million in research and development expenses, as compared to $7.020 million for the comparable year ended June 30, 2021. The increase in research and development expenses relates primarily to the OPMD project.
The change is primarily due to a decrease in license fees. During the year ended June 30, 2023, we incurred $12.774 million in research and development expenses, as compared to $11.272 million for the comparable year ended June 30, 2022. The increase in research and development expenses relates primarily to the OPMD project.
Pre- clinical and clinical development costs are a significant component of research and development expenses. The Company records accrued liabilities for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and contract manufacturing activities.
The Company records accrued liabilities for estimated costs of research and development activities conducted by third-party service providers, which include the conduct of pre-clinical studies and clinical trials, and contract manufacturing activities.
Additionally, the establishment of chronic gene silencing and gene replacement may significantly reduce the risk of patient non-compliance during the course of medical management of potentially fatal clinical disorders.
Additionally, the achievement of permanent gene silencing and gene replacement may significantly reduce the risk of patient non-compliance during the course of medical management of potentially fatal clinical disorders.
Certain of our research and development efforts are conducted globally, including the ongoing development of our silence and replace therapeutic for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), and will be dependent upon our ability to initiate preclinical and clinical studies despite the ongoing COVID-19 pandemic.
Certain of our research and development efforts are conducted globally, including the ongoing development of our silence and replace therapeutic for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), and will be dependent upon our ability to continue our preclinical and clinical studies and related work despite the COVID-19 pandemic and any similar events.
The increase in revenues from customers is due to the increase in licensing and royalty revenues in the current year. 89 Table of Contents Royalties and license fees Royalties and license fees consist primarily of payments we are required to remit for royalties and other payments related to in-licensed intellectual property.
The slight increase in revenues from customers is due to the increase in licensing revenue in the current year. Royalties and license fees Royalties and license fees consist primarily of payments we are required to remit for royalties and other payments related to in-licensed intellectual property.
Net cash used in operating activities for the year ended June 30, 2021 was $12.832 million. Net cash used in operating activities was primarily the result of our net loss, change in working capital, depreciation and amortization, and share-based compensation expense.
Net cash used in operating activities for the year ended June 30, 202 was $15.899 million. Net cash used in operating activities was primarily the result of our net loss, change in working capital, depreciation and amortization, and share-based compensation expense.
We do not know when, or if, we will generate any revenue from product sales. We do not expect to generate revenue from product sales unless and until we obtain regulatory approval of and commercialize one of our current or future product candidates.
We do not expect to generate revenue from product sales unless and until we obtain regulatory approval of and commercialize one of our current or future product candidates.
Through the combination of the targeted gene silencing effects of RNAi and the durable transgene expression achievable via the use of modified viral vectors, the silence and replace approach has the potential to produce long-term silencing of disease-causing genes along with simultaneous replacement of wild type gene function following a single administration of the proprietary genetic medicine.
The targeted gene silencing effects of RNAi, in conjunction with the durable transgene expression achievable via the use of modified viral vectors, imbues the silence and replace approach with the potential to produce permanent silencing of disease-causing genes along with simultaneous replacement of the wild type gene function following a single administration of the proprietary genetic medicine.
The Company received gross proceeds of approximately $14.3 million and net proceeds of approximately $12.7 million from the offering. Results of Operations Revenues from customers In the fiscal year ended June 30, 2021, the Company generated funds primarily from capital raising activities. The Company has not generated any revenues from the sales of products.
The Company received gross proceeds of approximately $30.9 million and net proceeds of approximately $28.6 million from the offering. Results of Operations Revenues from customers In the fiscal year ended June 30, 2023, the Company generated funds primarily from capital raising activities. The Company has not generated any revenues from the sales of products.
Investing activities Net cash used in investing activities for the years ended June 30, 2022 and 2021 was $13 thousand and $221 thousand, respectively, and primarily related to purchases of equipment. Financing activities Net cash provided by (used in) financing activities was zero and $22.522 million for the years ended June 30, 2022 and 2021, respectively.
Investing activities Net cash used in investing activities for the years ended June 30, 2023 and 2022 was $1 thousand and $13 thousand, respectively, and primarily related to purchases of equipment. Financing activities Net cash provided by financing activities was $16.015 million and zero for the years ended June 30, 2023 and 2022, respectively.
The Re-domiciliation was effected pursuant to a statutory scheme of arrangement under Australian law, or the Scheme, whereby on the Implementation Date, all of the issued and outstanding ordinary shares of Benitec 86 Table of Contents Limited were exchanged for newly issued shares of our common stock, on the basis of one share of our common stock, par value $0.0001 per share, for every 300 ordinary shares of Benitec Limited issued and outstanding.
As a result of the Re-domiciliation, the jurisdiction of incorporation was changed from Australia to Delaware, and Benitec Limited became our wholly owned subsidiary. 84 Table of Contents The Re-domiciliation was effected pursuant to a statutory scheme of arrangement under Australian law, or the Scheme, whereby on the Implementation Date, all of the issued and outstanding ordinary shares of Benitec Limited were exchanged for newly issued shares of our common stock, on the basis of one share of our common stock, par value $0.0001 per share, for every 300 ordinary shares of Benitec Limited issued and outstanding.
The Company had accumulated losses of $148.3 million as of June 30, 2022. We expect that our research and development expenses may increase due to the continued development of the OPMD program. We had no borrowings for the years ended June 30, 2022 and 2021 and do not currently have a credit facility.
We expect that our research and development expenses may increase due to the continued development of the OPMD program. We had no borrowings for the years ended June 30, 2023 and 2022 and do not currently have a credit facility. As of June 30, 2023, we had cash and cash equivalents of $2.5 million.
While we continue to progress discussions and advance opportunities to engage with pharmaceutical companies and continue to seek licensing partners for ddRNAi in disease areas that are not our focus, there can be no assurance as to whether we will enter into such arrangements or what the terms of any such arrangement could be. 92 Table of Contents While we have established some licensing arrangements, we do not have any products approved for sale and have not generated any revenue from product sales.
While we continue to progress discussions and advance opportunities to engage with pharmaceutical companies and continue to seek licensing partners for ddRNAi in disease areas that are not our focus, there can be no assurance as to whether we will enter into such arrangements or what the terms of any such arrangement could be.
Revenues from licensing fees and interest income are included in the revenue from customers line item on our statements of operations and comprehensive income (loss).
Revenues from licensing fees and interest income are included in the revenue from customers line item on our statements of operations and comprehensive income (loss). Our licensing fees have been generated through the licensing of our ddRNAi technology to biopharmaceutical companies.
The following table sets forth a summary of the net cash flow activity for each of the periods set forth below: Year Ended June 30, 2022 2021 (US$’000) Net cash provided by (used in): Operating activities $ (15,899 ) $ (12,832 ) Investing activities (13 ) (221 ) Financing activities — 22,522 Effects of exchange rate changes on cash, cash equivalents, and restricted cash 204 499 Net increase (decrease) in cash, cash equivalents, and restricted cash $ (15,708 ) $ 9,968 Operating activities Net cash used in operating activities for the year ended June 30, 2022 was $15.899 million.
The following table sets forth a summary of the net cash flow activity for each of the periods set forth below: Year Ended June 30, 2023 2022 (US$’000) Net cash provided by (used in): Operating activities $ (18,012 ) $ (15,899 ) Investing activities (1 ) (13 ) Financing activities 16,015 — Effects of exchange rate changes on cash, cash equivalents, and restricted cash 412 204 Net decrease in cash, cash equivalents, and restricted cash $ (1,586 ) $ (15,708 ) 88 Table of Contents Operating activities Net cash used in operating activities for the year ended June 30, 2023 was $18.012 million.
The Company received gross proceeds of approximately $11.5 million and net proceeds of approximately $9.9 million from the offering. April 2021 Capital Raise On April 30, 2021, the Company announced the closing of an underwritten public offering of common stock and common stock equivalents (the “April 2021 Capital Raise”).
The Company received gross proceeds of approximately $17.9 million and net proceeds of approximately $16.0 million from the offering. August 2023 Capital Raise On August 11, 2023, the Company announced the closing of an underwritten public offering of common stock and common stock equivalents (the “August 2023 Capital Raise”).
The Company has not experienced any material differences between accrued costs and actual costs incurred. General and Administrative Expenses General and administrative expenses consist primarily of salaries, related benefits, travel, and equity-based compensation expense.
The Company has not experienced any material differences between accrued costs and actual costs incurred. General and Administrative Expenses General and administrative expenses consist primarily of salaries, related benefits, travel, and equity-based compensation expense. General and administrative expenses also include facility expenses, professional fees for legal, consulting, accounting and audit services and other related costs.
In July 2015, we entered into an earn-out agreement with Biomics which confirmed Benitec’s ownership of certain patents resulting from the collaboration in exchange for an upfront payment and equity issuance to Biomics and a share of certain future licensing revenue received by Benitec. 87 Table of Contents Foreign Currency Translation and Other Comprehensive Income (Loss) The Company’s functional currency and reporting currency is the United States dollar.
In July 2015, we entered into an earn-out agreement with Biomics which confirmed Benitec’s ownership of certain patents resulting from the collaboration in exchange for an upfront payment and equity issuance to Biomics and a share of certain future licensing revenue received by Benitec.
Our licensing fees have been generated through the licensing of our ddRNAi technology to biopharmaceutical companies. 88 Table of Contents The following table sets forth a summary of our revenues for each of the periods set forth below: Year Ended June 30, 2022 2021 (US$’000) Revenues from customers $ 73 $ 59 Total revenues $ 73 $ 59 During the year ended June 30, 2022, the Company recognized $73 thousand in customer revenues, as compared to $59 thousand for the comparable year ended June 30, 2021.
The following table sets forth a summary of our revenues for each of the periods set forth below: Year Ended June 30, 2023 2022 (US$’000) Revenues from customers $ 75 $ 73 Total revenues $ 75 $ 73 During the year ended June 30, 2023, the Company recognized $75 thousand in customer revenues, as compared to $73 thousand for the comparable year ended June 30, 2022.
Expenses The following table sets forth a summary of our expenses for each of the periods set forth below: Year Ended June 30, 2022 2021 (US$’000) Expenses: Royalties and license fees $ 9 $ 123 Research and Development 11,272 7,020 General and Administrative 6,646 6,512 Total expenses 17,927 13.655 During the year ended June 30, 2022, we incurred $9 thousand in royalties and license fees, as compared to $123 thousand for the comparable year ended June 30, 2021.
Expenses The following table sets forth a summary of our expenses for each of the periods set forth below: Year Ended June 30, 2023 2022 (US$’000) Expenses: Royalties and license fees $ — $ 9 Research and development 12,774 11,272 General and administrative 6,382 6,646 Total expenses 19,156 17,927 During the year ended June 30, 2023, we did not incur any royalties and license fees, as compared to $9 thousand for the year ended June 30, 2022.
We are subject to the risks inherent in the development of new gene therapy products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.
We are subject to the risks inherent in the development of new gene therapy products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business. On August 11, 2023, the Company announced the closing of an underwritten public offering of common stock and common stock equivalents.
BBL’s functional currency is the Australian dollar (AUD). Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period. Equity transactions are translated at each historical transaction date spot rate.
Foreign Currency Translation and Other Comprehensive Income (Loss) The Company’s functional currency and reporting currency is the United States dollar. BBL’s functional currency is the Australian dollar (AUD). Assets and liabilities are translated at the exchange rate in effect at the balance sheet date. Revenues and expenses are translated at the average rate of exchange prevailing during the reporting period.
This fundamental approach to disease management is called “silence and replace” and this biological mechanism offers the potential to restore the underlying physiology of the treated tissues and, in the process, improve treatment outcomes for patients suffering from the chronic and, potentially, fatal effects of Oculopharyngeal Muscular Dystrophy (OPMD).
This fundamental therapeutic approach to disease management is called “silence and replace.” The silence and replace mechanism offers the potential to restore the normative physiology of diseased cells and tissues and to improve treatment outcomes for patients suffering from the chronic, and potentially fatal, effects of OPMD.
These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments. 93 Table of Contents Critical Accounting Policies and Significant Accounting Estimates The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported.
Critical Accounting Policies and Significant Accounting Estimates The preparation of consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, assumptions and estimates that affect the amounts reported.
Other Income (Loss) The following table sets forth a summary of our other income (loss) for each of the periods set forth below: Year Ended June 30, 2022 2021 (US$’000) Other Income (Loss): Foreign currency transaction loss (232 ) (333 ) Interest expense, net (32 ) (6 ) Other income (expense), net (79 ) 37 Unrealized gain (loss) on investment (11 ) 16 Total other loss, net (354 ) (286 ) The other loss, net during the year ended June 30, 2022 totaled ($354) thousand, which consists of foreign currency transaction loss, interest expense, other income, and unrealized gain (loss) on investment.
The year-over-year decrease relates primarily to lower listing and filing fees and stock-based compensation. 87 Table of Contents Other Income (Loss) The following table sets forth a summary of our other income (loss) for each of the periods set forth below: Year Ended June 30, 2023 2022 (US$’000) Other Loss: Foreign currency transaction loss (415 ) (232 ) Interest expense, net (33 ) (32 ) Other expense, net (30 ) (79 ) Unrealized loss on investment (3 ) (11 ) Total other loss, net (481 ) (354 ) The other loss, net during the year ended June 30, 2023 totaled $481 thousand, which consists of foreign currency transaction loss, interest expense, other expense, net, and unrealized loss on investment.
BB-301 is an internally optimized, AAV-based gene therapy agent that is designed to both silence the expression of mutated, disease-causing genes (to slow, or halt, the underlying mechanism of disease progression) and replace the mutant genes with normal, “wild type” genes (to drive restoration of function in diseased cells).
BB-301 is an AAV-based gene therapy designed to permanently silence the expression of the disease-causing gene (to slow, or halt, the biological mechanisms underlying disease progression in OPMD) and to simultaneously replace the mutant gene with a wildtype gene (to drive restoration of function in diseased cells).
Unrealized gain (loss) on investment was due to lower fair market values of the Company’s investments. 91 Table of Contents Liquidity and Capital Resources The Company has incurred cumulative losses and negative cash flows from operations since our predecessor’s inception in 1995, except for the year ended June 30, 2019 where we had net income of $2.609 million and generated positive cash flows of $4.790 million from operating activities.
The Company has incurred cumulative losses and negative cash flows from operations since our predecessor’s inception in 1995, except for the year ended June 30, 2019 where we had net income of $2.609 million and generated positive cash flows of $4.790 million from operating activities. The Company had accumulated losses of $167.9 million as of June 30, 2023.
The Company enters into contracts in the normal course of business with third-party contract research organizations, contract development and manufacturing organizations and other service providers and vendors.
The Company enters into contracts in the normal course of business with third-party contract research organizations, contract development and manufacturing organizations and other service providers and vendors. These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.
As of June 30, 2022, we had cash and cash equivalents of $4.1 million. Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Currently, our cash and cash equivalents are held in bank accounts. Our short-term investments consist of term deposits with maturity within 180 days.
Cash in excess of immediate requirements is invested in accordance with our investment policy, primarily with a view to liquidity and capital preservation. Currently, our cash and cash equivalents are held in bank accounts.
We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.
Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements.
We believe this novel attribute of the investigational agents under development by Benitec may facilitate the achievement of robust clinical activity while greatly reducing the dosing frequencies traditionally expected for medicines employed for the management of chronic diseases.
We believe that this novel mechanistic profile of the current and future investigational agents developed by Benitec could facilitate the achievement of robust and durable clinical activity while greatly reducing the frequency of drug administration traditionally expected for medicines employed for the management of chronic diseases.
Under the prior model, losses were recognized only as they were incurred. The Company has determined that it has met the criteria of a smaller reporting company (“SRC”) as of November 15, 2019.
This ASU represents a significant change in the accounting for credit losses model by requiring immediate recognition of management’s estimates of current expected credit losses (CECL). Under the prior model, losses were recognized only as they were incurred. The Company has determined that it has met the criteria of a smaller reporting company (“SRC”) as of November 15, 2019.
For the year ended June 30, 2021, cash from financing activities related to the issuance of ordinary shares, including $25.750 million in gross proceeds from the October 2020 and April 2021 Capital Raises and exercise of pre-funded warrants, partially offset by $3.228 million in share issue transaction costs.
For the year ended June 30, 2023, cash from financing activities related to the issuance of ordinary shares and pre-funded warrants, and common warrants; including $17.884 million in gross proceeds from the September 2022 Capital Raise, partially offset by $1.869 million of shares and warrant issuance costs.
General and administrative expenses also include facility expenses, professional fees for legal, consulting, accounting and audit services and other related costs. 90 Table of Contents We anticipate that our general and administrative expenses may increase as the Company focuses on the continued development of the pre-clinical OPMD program.
We anticipate that our general and administrative expenses may increase as the Company focuses on the continued development of the pre-clinical OPMD program.
During the year ended June 30, 2021, other income (loss) totaled ($286) thousand. Foreign currency transaction loss has decreased due to a change in foreign exchange rates. Interest expense, net increased due to higher interest expense resulting from extension of the Company’s lease to June 2025.
During the year ended June 30, 2022, other loss, net, totaled $354 thousand. Foreign currency transaction loss has increased due to a change in foreign exchange rates. Interest expense was essentially unchanged year-over-year. The decrease in other expense, net relates to recognition of a tax refund.
The Company has not experienced any material differences between accrued costs and actual costs incurred. 95 Table of Contents Share-Based Compensation The Company records share-based compensation in accordance with ASC 718, “ Stock Compensation ”.
The Company has not experienced any material differences between accrued costs and actual costs incurred. Share-Based Compensation The Company records share-based compensation in accordance with ASC 718, “ Stock Compensation ”. ASC 718 requires the fair value of all share- based employee compensation awarded to employees and non-employees to be recorded as an expense over the related requisite service period.
The proprietary platform, called DNA-directed RNA interference, or ddRNAi, combines RNA interference, or RNAi, with gene therapy to create medicines that facilitate sustained silencing of disease- causing genes following a single administration. The Company is developing ddRNAi-based therapeutics for chronic and life-threatening human conditions including Oculopharyngeal Muscular Dystrophy (OPMD).
The proprietary platform, called DNA-directed RNA interference, or ddRNAi, combines RNA interference, or RNAi, with gene therapy to create medicines that facilitate sustained silencing of disease-causing genes following a single administration. The unique therapeutic constructs also enable the simultaneous delivery of wildtype replacement genes, facilitating the proprietary “silence and replace” approach to the treatment of genetically defined diseases.
The Company concluded the BB-301 Regulatory Toxicology Study and the Parallel Assay Method Development, Qualification, and Validation project, and continued with the GMP Manufacturing project. General and administrative expense was $6.646 million and $6.512 million for the years ended June 30, 2022 and 2021, respectively.
General and administrative expense was $6.382 million and $6.646 million for the years ended June 30, 2023 and 2022, respectively.
Other Comprehensive Income (Loss) for all periods presented includes only foreign currency translation gains (losses).
Other Comprehensive Income (Loss) for all periods presented includes only foreign currency translation gains (losses). April 2021 Capital Raise On April 30, 2021, the Company announced the closing of an underwritten public offering of common stock and common stock equivalents (the “April 2021 Capital Raise”).
BB-301 is the most advanced ddRNAi-based genetic medicine currently under development by Benitec.
The Company is developing a silence and replace-based therapeutic (BB-301) for the treatment of Oculopharyngeal Muscular Dystrophy (OPMD), a chronic, life-threatening genetic disorder. BB-301 is a silence and replace-based genetic medicine currently under development by Benitec.
Removed
As a result of the Re-domiciliation, the jurisdiction of incorporation was changed from Australia to Delaware, and Benitec Limited became our wholly owned subsidiary.
Added
Equity transactions are translated at each historical transaction date spot rate.
Removed
As we continue to actively advance our preclinical programs, including our ongoing tissue transduction studies for BB-301, we are in close contact with our principal investigators and preclinical trial sites, which are primarily located in France, and are assessing the impact of COVID-19 on our studies and the expected development timelines and costs of all of our product candidates, on an ongoing basis.
Added
The Company received gross proceeds of approximately $14.3 million and net proceeds of approximately $12.7 million from the offering. 85 Table of Contents September 2022 Capital Raise On September 15, 2022, the Company announced the closing of an underwritten public offering of common stock and common stock equivalents (the September 2022 Capital Raise”).
Removed
In light of developments relating to the COVID-19 global pandemic since the beginning of the outbreak, the focus of healthcare providers and hospitals on fighting the virus, and consistent with the FDA’s industry guidance for conducting clinical trials, we have experienced delays to the original timeline regarding the initiation and anticipated completion of the ongoing BB-301 IND-enabling development work.
Added
Unrealized loss on investment was due to lower fair market values of the Company’s investments. Liquidity and Capital Resources The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.
Removed
The initiation of the BB-301 tissue transduction study, which represents a key component of the IND-enabling work, was initially delayed by several months, however, the study has been recently initiated and the dosing of the initial preclinical cohorts has proceeded without incident.
Added
For the years ended June 30, 2023, and 2022, the Company incurred net losses of $19.56 million and $18.21 million, and used net cash of $18.01 million and $15.90 million in operations, respectively. The Company expects to continue to incur additional operating losses in the foreseeable future.
Removed
We will continue to evaluate the impact of the COVID-19 pandemic on our business and expect to reevaluate the timing of our anticipated preclinical and clinical milestones as we learn more and the impact of COVID-19 on our industry becomes more clear.
Added
On August 11, 2023, the Company closed an underwritten public offering resulting in $28.6 million in net proceeds to the Company. We estimate that our cash and cash equivalents will be sufficient to fund the Company’s operations for at least the next twelve months after the date that this Annual Report is filed.
Removed
We had also implemented work-from-home measures for the majority of our employees, resulting in a reduction of laboratory work and a halt of non-essential business travel. As we transition our employees back to our premises, there is a risk that COVID-19 infections occur at our offices or laboratory facilities and significantly affect our operations.
Added
While we have established some licensing arrangements, we do not have any products approved for sale and have not generated any revenue from product sales. We do not know when, or if, we will generate any revenue from product sales.
Removed
Additionally, if any of our critical vendors are impacted, our business could be affected if we become unable to timely procure essential equipment, supplies or services in adequate quantities and at acceptable prices.
Added
The Company received gross proceeds of approximately $30.9 million and net proceeds of approximately $28.6 million from the offering. We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect.
Removed
Explanatory Paragraph in the Auditors’ Report About the Company’s Ability to Continue as a Going Concern The independent auditors’ report on our June 30, 2022 financial statements included in this Annual Report states that the Company’s historical losses and net cash used in operations raise substantial doubts about the Company’s ability to continue as a going concern.
Added
Management believes that the following are critical accounting policies: Research and Development Expenses Research and development expenses relate primarily to the cost of conducting clinical and pre-clinical trials. Pre- clinical and clinical development costs are a significant component of research and development expenses.
Removed
We can make no assurances that our business operations will develop and provide us with significant cash to continue operations. In order to improve the Company’s liquidity, the Company’s management is actively pursuing additional financing through discussions with investment bankers, financial institutions and private investors.
Removed
There can be no assurance the Company will be successful in its effort to secure additional financing. Our ability to continue as a going concern is subject to our ability to develop profitable operations. We are devoting substantially all of our efforts to developing our business and raising capital.
Removed
Our net operating losses increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful. October 2020 Capital Raise On October 6, 2020, the Company announced the closing of an underwritten public offering of common stock and common stock equivalents (the “October 2020 Capital Raise”).
Removed
The increase for the year relates primarily to legal costs, combined with higher NASDAQ filing fees and share-based compensation expense.
Removed
Other income (expense), net became an expense due to the discontinuation of COVID-19 stimulus incentives from the Australian government, combined with higher state taxes.
Removed
The Company does not have adequate liquidity to fund its operations for the next twelve months without raising additional funds and the success of raising such additional capital is not solely within the control of the Company.
Removed
Management believes that the following are critical accounting policies: Revenue Recognition The Company recognizes revenue in accordance with that core principle by applying the following steps: Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price.
Removed
Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation. The Company applies judgement in determining whether contracts entered into fall within the scope of ASC 606 – Revenue from Contracts with Customers (“ASC 606”).
Removed
In doing so, management considers the commercial substance of the transaction and how risks and benefits of the contract accrue to the various parties to the contract.
Removed
Management has also made the judgement that the grant of the license and transfer of associated know-how and materials are accounted for as one performance obligation as they are not considered to be distinct; they are 94 Table of Contents highly interrelated and could not provide benefits to the customer independently from each other.
Removed
Judgements were made in relation to the transfer of the license and know-how and whether this should be recognized over time or a point in time.
Removed
The point in time has been determined with regard to the point at which the transfer of know-how has substantially been completed and the customer has control of the asset and the ability to direct the use of and receive substantially all of the remaining benefits.
Removed
Licensing revenues Revenue from licensees of the Company’s intellectual property reflects the transfer of a right to use the intellectual property as it exists at the point in time in which the license is transferred to the customer. Consideration can be variable and is estimated using the most likely amount method.
Removed
Subsequently, the estimate is constrained until it is probable that a significant revenue reversal will not occur when the uncertainty is resolved. Revenue is recognized as or when the performance obligations are satisfied. The Company recognizes contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the consolidated balance sheet.
Removed
Similarly, if the Company satisfies a performance obligation before it receives the consideration, the Company recognizes either a contract asset or a receivable in its consolidated balance sheet, depending on whether something other than the passage of time is required before the consideration is due.
Removed
Royalties Revenue from licensees of the Company’s intellectual property reflect a right to use the intellectual property as it exists at the point in time in which the license is granted. Where consideration is based on sales of product by the licensee, revenue is recognized when the customer’s subsequent sales of product occur.
Removed
Services revenue Revenue is earned (constrained by variable considerations) from the provision of research and development services to customers. Services revenue is recognized when performance obligations are either satisfied over time or at a point in time.

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