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

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

+386 added−423 removedSource: 10-K (2024-12-31) vs 10-K (2024-03-21)

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

386 paragraphs added · 423 removed · 300 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

146 edited+43 added−101 removed218 unchanged
Biggest changeFor medicines that do not fall within these categories, an applicant has the option of submitting an application for a centralized marketing authorization to the European Commission following a favorable opinion by the EMA, as long as the medicine concerned is a significant therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health in the European Union. 44 Under the centralized procedure, the EMA’s Committee for Medicinal Products for Human Use ("CHMP") is responsible for conducting the initial assessment of a product and for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization.
Biggest changeFor medicines that do not fall within these categories, an applicant has the option of submitting an application for a centralized marketing, as long as the medicine concerned is a significant therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health in the European Union.
The submission procedure is the same irrespective of whether the clinical trial is to be conducted in a single European Union Member State or in more than one European Union Member State. Marketing Authorization Procedures in the European Union Medicines can be authorized in the European Union by using either the centralized authorization procedure or national authorization procedures.
The submission procedure is the same irrespective of whether the clinical trial is to be conducted in a single European Union Member State or in more than one European Union Member State. Marketing Authorization Procedures in the European Union Medicines can be authorized in the European Union by using either the centralized authorization procedure or a national authorization procedure.
The centralized procedure is compulsory for human medicines that are: derived from biotechnology processes, such as genetic engineering, contain a new active substance indicated for the treatment of certain diseases, such as HIV, AIDS, cancer, diabetes, neurodegenerative disorders or autoimmune diseases and other immune dysfunctions, advanced therapy medicines (gene-therapy, somatic cell-therapy or tissue-engineered medicines) and officially designated orphan medicines.
The centralized procedure is compulsory for human medicines that: are derived from biotechnology processes, such as genetic engineering; contain a new active substance indicated for the treatment of certain diseases, such as HIV, AIDS, cancer, diabetes, neurodegenerative disorders or autoimmune diseases and other immune dysfunctions; are advanced therapy medicines (gene-therapy, somatic cell-therapy or tissue-engineered medicines); and are officially designated orphan medicines.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it; ● the federal Physician Payment Sunshine Act, created under the ACA and its implementing regulations, which requires drug, device, medical supply, and biologics manufacturers to disclose payments under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed healthcare practitioners and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; ● HIPAA, as amended by the Health Information Technology and Clinical Health Act of 2009 ("HITECH"), and its implementing regulations, which imposes, among other things, certain requirements relating to the privacy, security and transmission of individually identifiable health information.
Similar to the federal Anti-Kickback Statute, a person or entity can be found guilty of violating HIPAA without actual knowledge of the statute or specific intent to violate it; ● the federal Physician Payment Sunshine Act, created under the ACA and its implementing regulations, which requires drug, device, medical supply, and biologics manufacturers to disclose payments under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to HHS information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed healthcare practitioners and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; 42 ● HIPAA, as amended by the Health Information Technology and Clinical Health Act of 2009 ("HITECH"), and its implementing regulations, which imposes, among other things, certain requirements relating to the privacy, security and transmission of individually identifiable health information.
When an entity is determined to have violated the FCA, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs; 49 ● the federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), which created additional criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme, to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
When an entity is determined to have violated the FCA, the government may impose civil fines and penalties for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs; ● the federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), which created additional criminal and civil liability for knowingly and willfully executing, or attempting to execute, a scheme, to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters.
The process required by the FDA before product candidates may be marketed in the United States generally involves the following: ● completion of extensive nonclinical laboratory tests and nonclinical animal studies, all performed in accordance with the Good Laboratory Practices ("GLP"), regulations; ● submission to the FDA of an IND, which must become effective before human clinical trials may begin and must be updated annually; 36 ● approval by an independent institutional review board ("IRB"), or ethics committee representing each clinical site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practices ("GCPs"), to establish the safety and efficacy of the product candidate for each proposed indication; ● preparation of and submission to the FDA of a BLA, after completion of all pivotal clinical trials; ● review of the product application by an FDA advisory committee, where appropriate and if applicable; ● a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities where the proposed product is produced to assess compliance with current Good Manufacturing Practices ("cGMP"); ● satisfactory completion of any FDA audits of the clinical trial sites to assure compliance with GCPs, and the integrity of clinical data in support of the BLA; and ● FDA review and approval of a BLA for a biological product candidate that is safe, pure, and potent prior to any commercial marketing or sale of the product in the United States.
The process required by the FDA before product candidates may be marketed in the United States generally involves the following: ● completion of extensive nonclinical laboratory tests and nonclinical animal studies, all performed in accordance with the Good Laboratory Practices ("GLP"), regulations; ● submission to the FDA of an IND, which must become effective before human clinical trials may begin and must be updated annually; ● approval by an independent institutional review board ("IRB"), or ethics committee representing each clinical site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practices ("GCPs"), to establish the safety and efficacy of the product candidate for each proposed indication; ● preparation of and submission to the FDA of a BLA, after completion of all pivotal clinical trials; ● review of the product application by an FDA advisory committee, where appropriate and if applicable; 29 ● a determination by the FDA within 60 days of its receipt of a BLA to file the application for review; satisfactory completion of an FDA pre-approval inspection of the manufacturing facilities where the proposed product is produced to assess compliance with current Good Manufacturing Practices ("cGMP"); ● satisfactory completion of any FDA audits of the clinical trial sites to assure compliance with GCPs, and the integrity of clinical data in support of the BLA; and ● FDA review and approval of a BLA for a biological product candidate that is safe, pure, and potent prior to any commercial marketing or sale of the product in the United States.
Other potential consequences of a failure to maintain regulatory compliance include, among other things: 41 ● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● fines, untitled or warning letters or holds on post-approval clinical trials; ● refusal of the FDA to approve pending BLAs or supplements to approved BLAs; ● product seizure or detention, or refusal to permit the import or export of products; or ● injunctions or the imposition of civil or criminal penalties.
Other potential consequences of a failure to maintain regulatory compliance include, among other things: ● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; ● fines, untitled or warning letters or holds on post-approval clinical trials; ● refusal of the FDA to approve pending BLAs or supplements to approved BLAs; ● product seizure or detention, or refusal to permit the import or export of products; or ● injunctions or the imposition of civil or criminal penalties.
Dosing with CTX-8371 led to tumor growth inhibition in the syngeneic EMT-6 breast cancer model and in the syngeneic MB49 bladder cancer model In April 2022, we presented preclinical data on CTX-8371’s potential unique mechanism of action ("MOA") that involves cleavage of cell surface PD-1, at the 2022 American Association for Cancer Research ("AACR") annual meeting.
Dosing with CTX-8371 led to tumor growth inhibition in the syngeneic EMT-6 breast cancer model and in the syngeneic MB49 bladder cancer model In April 2022, we presented preclinical data on CTX-8371’s potential unique mechanism of action ("MOA") that involves cleavage of cell surface PD-1, at the 2023 American Association for Cancer Research ("AACR") annual meeting.
Sequence changes can be readily introduced to further optimize leads from our screens. Our ability to generate viable antibody candidates, with good drug-like properties and high manufacturability potential in a high-throughput manner has enabled us to rapidly assemble a portfolio of proprietary antibodies to over 40 key innate and adaptive immune targets and tumor antigens.
Sequence changes can be readily introduced to further optimize leads from our screens. 22 Our ability to generate viable antibody candidates, with good drug-like properties and high manufacturability potential in a high-throughput manner has enabled us to rapidly assemble a portfolio of proprietary antibodies to over 40 key innate and adaptive immune targets and tumor antigens.
Our approach to bispecific antibody discovery encompasses four principles: ● antibody diversity is required to generate a representative sample of possible therapies; ● functional screening is critical to identifying optimal solutions; 29 ● a combinatorial approach enables parallel assessment of many potential bispecific antibodies; and ● decisions made at the start of the discovery process have a major impact on successful clinical and commercial-scale manufacturing.
Our approach to bispecific antibody discovery encompasses four principles: ● antibody diversity is required to generate a representative sample of possible therapies; ● functional screening is critical to identifying optimal solutions; ● a combinatorial approach enables parallel assessment of many potential bispecific antibodies; and ● decisions made at the start of the discovery process have a major impact on successful clinical and commercial-scale manufacturing.
In practice, these requirements mean that the diversity of antigen pairs targeted by bispecific antibodies is limited, and development is oftentimes prioritized for antigen pairs suggested by existing scientific literature. Our proprietary StitchMabs TM technology is a novel screening approach which we developed to assess the potential of any pair of antigen-binding sites in a bispecific antibody format.
In practice, these requirements mean that the diversity of antigen pairs targeted by bispecific antibodies is limited, and development is oftentimes prioritized for antigen pairs suggested by existing scientific literature. 23 Our proprietary StitchMabs TM technology is a novel screening approach which we developed to assess the potential of any pair of antigen-binding sites in a bispecific antibody format.
We have shown with CTX-471, for example, that activity in a complex biological system cannot necessarily be predicted on strictly biochemical parameters. 30 StitchMabs TM Technology A natural antibody recognizes a single target antigen and is therefore monospecific. Because a natural antibody features two identical binding sites, it is considered bivalent for that target.
We have shown with CTX-471, for example, that activity in a complex biological system cannot necessarily be predicted on strictly biochemical parameters. StitchMabs TM Technology A natural antibody recognizes a single target antigen and is therefore monospecific. Because a natural antibody features two identical binding sites, it is considered bivalent for that target.
We value diversity at all levels and continue to focus on extending our diversity and inclusion initiatives across our entire workforce, from working with managers to develop strategies for building diverse teams to promoting the advancement of leaders from different backgrounds. 51 Corporate Information We were incorporated in the State of Delaware on March 20, 2018.
We value diversity at all levels and continue to focus on extending our diversity and inclusion initiatives across our entire workforce, from working with managers to develop strategies for building diverse teams to promoting the advancement of leaders from different backgrounds. Corporate Information We were incorporated in the State of Delaware on March 20, 2018.
A decision by a third-party payor not to cover a product could reduce physician utilization once the product is approved and have a material adverse effect on sales, our operations and financial condition. In some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed.
A decision by a third-party payor not to cover a product could reduce physician utilization once the product is approved and have a material adverse effect on sales, our operations and financial condition. 39 In some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed.
Long after the completion of the treatment with CTX-471, a period equal to eight half-lives of the antibody, treated mice exhibited immune memory that prevented reestablishment of the same tumor. 19 The CD137 antigenic site recognized by CTX-471 does not block the binding of CD137 ligand and is differentiated from the site recognized by CD137 antibodies from competitors.
Long after the completion of the treatment with CTX-471, a period equal to eight half-lives of the antibody, treated mice exhibited immune memory that prevented reestablishment of the same tumor. The CD137 antigenic site recognized by CTX-471 does not block the binding of CD137 ligand and is differentiated from the site recognized by CD137 antibodies from competitors.
This PR was confirmed at week 17. 22 ● A PR was observed in a patient with metastatic melanoma of mucosal origin who was previously treated with first-line regimen of ipilimumab plus nivolumab followed by second-line nivolumab as a monotherapy. After progressing on the prior regimens, the patient had joined the trial with multiple metastases at baseline.
This PR was confirmed at week 17. ● A PR was observed in a patient with metastatic melanoma of mucosal origin who was previously treated with first-line regimen of ipilimumab plus nivolumab followed by second-line nivolumab as a monotherapy. After progressing on the prior regimens, the patient had joined the trial with multiple metastases at baseline.
Moreover, we may also compete with smaller or earlier-stage companies, universities and other research institutions that have developed, are developing or may be developing current and future cancer therapeutics. 34 Product candidates that we successfully develop will compete with a range of therapies that are currently approved and any new therapies that may become available in the future.
Moreover, we may also compete with smaller or earlier-stage companies, universities and other research institutions that have developed, are developing or may be developing current and future cancer therapeutics. Product candidates that we successfully develop will compete with a range of therapies that are currently approved and any new therapies that may become available in the future.
The content of the BLA filed in the United States is similar to that required in the European Union, with the exception of, among other things, country-specific document requirements. For other countries outside of the European Union, such as countries in Eastern Europe, Latin America or Asia, the requirements governing product licensing, pricing, and reimbursement vary from country to country.
The content of the BLA filed in the United States is similar to that required in the European Union, with the exception of, among other things, country-specific document requirements. 36 For other countries outside of the European Union, such as countries in Eastern Europe, Latin America or Asia, the requirements governing product licensing, pricing, and reimbursement vary from country to country.
We also observed that tumors treated with CTX-471 had an approximate two-fold reduction in the number of immunosuppressive tumor-associated macrophages. In addition, we have observed potent activity in other syngeneic tumor models including tumor eradication in the A20 model of lymphoma, the MC38 model of colon carcinoma and in the EMT6 model of breast cancer.
We also observed that tumors treated with CTX-471 had an approximate two-fold reduction in the number of immunosuppressive tumor-associated macrophages. 13 In addition, we have observed potent activity in other syngeneic tumor models including tumor eradication in the A20 model of lymphoma, the MC38 model of colon carcinoma and in the EMT6 model of breast cancer.
In this circumstance, the EMA ensures that the opinion of the CHMP is given within 150 days, excluding clock stops, but it is possible that the CHMP can revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment. National authorization procedures .
In this circumstance, the EMA ensures that the opinion of the CHMP is given within 150 days, excluding clock stops, but it is possible that the CHMP can revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment. 37 National authorization procedures .
The responsibilities of such marketing organization would include developing educational initiatives with respect to approved products and establishing relationships with researchers and practitioners in relevant fields of medicine. Manufacturing We do not currently own or operate manufacturing facilities for the production of clinical quantities of our product candidates.
The responsibilities of such marketing organization would include developing educational initiatives with respect to approved products and establishing relationships with researchers and practitioners in relevant fields of medicine. 28 Manufacturing We do not currently own or operate manufacturing facilities for the production of clinical quantities of our product candidates.
The benefits of breakthrough therapy designation include the same benefits as a fast-track designation, in addition to intensive guidance from FDA to ensure an efficient development program. 40 Finally, with respect to oncology products, the FDA may review applications under Real-Time Oncology Review (“RTOR”) established by the FDA’s Oncology Center of Excellence.
The benefits of breakthrough therapy designation include the same benefits as a fast-track designation, in addition to intensive guidance from FDA to ensure an efficient development program. Finally, with respect to oncology products, the FDA may review applications under Real-Time Oncology Review (“RTOR”) established by the FDA’s Oncology Center of Excellence.
Third, we have developed our proprietary StitchMabs TM technology that allows us to rapidly evaluate the potential of the antibodies we discover in a bispecific antibody format. We have also developed a proprietary transgenic mouse line that produces antibodies with the differentiated property that they all share a human common light chain.
Third, we have developed our proprietary StitchMabs TM technology that allows us to rapidly evaluate the potential of the antibodies we discover in a bispecific antibody format. 21 We have also developed a proprietary transgenic mouse line that produces antibodies with the differentiated property that they all share a human common light chain.
Once the European Commission’s legislative proposals are approved (with or without amendment), they will be adopted into European Union law. Pharmaceutical Coverage, Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval.
Once the European Commission’s legislative proposals are approved (with or without amendment), they will be adopted into European Union law. 38 Pharmaceutical Coverage, Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any products for which we may obtain regulatory approval.
CTX-471 (CD137agonist antibody) CTX-471, our monoclonal antibody product candidate, is a fully human, IgG4 monoclonal antibody that is an agonist of CD137, a key co-stimulatory receptor on immune cells. Binding of CTX-471 to CD137 has been observed to lead to ligand-stimulated activation of T-cells and NK cells.
CTX-471 (CD137 agonist antibody) CTX-471, our monoclonal antibody product candidate, is a fully human, IgG4 monoclonal antibody that is an agonist of CD137, a key co-stimulatory receptor on immune cells. Binding of CTX-471 to CD137 has been observed to lead to ligand-stimulated activation of T-cells and NK cells.
Centralized procedure . The European Medicines Agency ("EMA"), implemented the centralized procedure for the approval of human medicines to facilitate marketing authorizations that are valid throughout the European Economic Area ("EEA"), which is comprised of the 28 Member States of the European Union plus Norway, Iceland, and Lichtenstein.
Centralized procedure . The European Medicines Agency ("EMA"), implemented the centralized procedure for the approval of human medicines to facilitate marketing authorizations that are valid throughout the European Economic Area ("EEA"), which is comprised of the Member States of the European Union plus Norway, Iceland, and Lichtenstein.
Factors payors consider in determining reimbursement are based on whether the product is: ● a covered benefit under its health plan; ● safe, effective and medically necessary; 46 ● appropriate for the specific patient; ● cost-effective; and ● neither experimental nor investigational.
Factors payors consider in determining reimbursement are based on whether the product is: ● a covered benefit under its health plan; ● safe, effective and medically necessary; ● appropriate for the specific patient; ● cost-effective; and ● neither experimental nor investigational.
A summary of the results are as follows: ● Treatment with CTX-8371 led to PD-1 loss from the surface of intra-tumoral T cells in tumor-bearing transgenic hPD-1/h-PD-L1 mice, and on peripheral blood T cells in cynomolgus monkeys; this unique MOA differentiates CTX-8371 from marketed inhibitors targeting either PD-1 or PD-L1 ● Clearance and half-life of CTX-8371 were within the expected ranges for a human IgG1 antibody in NHPs with a linear PK ● Treatment with CTX-8371 in the aggressive MC38-hPD-L1 colorectal mouse model led to a dose-proportional reduction in tumor volume and a complete eradication of tumors at the highest dose ● Taken together, the murine and cynomolgus monkey PK data, receptor occupancy data, and in vivo efficacy data in murine models was used to calculate the predicted human efficacious dose range for CTX-8371 Development Plans for CTX-8371 An IND was submitted to the FDA in the third quarter of 2023.
A summary of the results are as follows: ● Treatment with CTX-8371 led to PD-1 loss from the surface of intra-tumoral T cells in tumor-bearing transgenic hPD-1/h-PD-L1 mice, and on peripheral blood T cells in cynomolgus monkeys; this unique MOA differentiates CTX-8371 from marketed inhibitors targeting either PD-1 or PD-L1 ● Clearance and half-life of CTX-8371 were within the expected ranges for a human IgG1 antibody in NHPs with a linear PK ● Treatment with CTX-8371 in the aggressive MC38-hPD-L1 colorectal mouse model led to a dose-proportional reduction in tumor volume and a complete eradication of tumors at the highest dose ● Taken together, the murine and cynomolgus monkey PK data, receptor occupancy data, and in vivo efficacy data in murine models was used to calculate the predicted human efficacious dose range for CTX-8371 20 Phase 1 and Development Plans for CTX-8371 We submitted an IND to the FDA in the third quarter of 2023.
Total Total Grade 3 Grade 3 Treatment Emergent Adverse Events observed in > 1 patient (n) (%) (n) (%) Neutrophil count decreased 22 92 20 83 Hypertension 12 50 4 17 Platelet count decreased 9 38 3 13 Anaemia 5 21 5 21 Ascites 4 17 2 8 Decreased appetite 4 17 2 8 Neutropenia 2 8 2 8 Liver abscess 2 8 2 8 Hepatic infection 2 8 2 8 Cholangitis 2 8 2 8 Embolism 2 8 2 8 Activity Data Summary The first stage of the trial enrolled 24 patients and 22 of those patients are considered evaluable.
Total Total Grade 3 Grade 3 Treatment Emergent Adverse Events observed in > 1 patient (n) (%) (n) (%) Neutrophil count decreased 22 92 20 83 Hypertension 12 50 4 17 Platelet count decreased 9 38 3 13 Anaemia 5 21 5 21 Ascites 4 17 2 8 Decreased appetite 4 17 2 8 Neutropenia 2 8 2 8 Liver abscess 2 8 2 8 Hepatic infection 2 8 2 8 Cholangitis 2 8 2 8 Embolism 2 8 2 8 Activity Data Summary The first stage of the trial enrolled 24 patients and 22 of those patients were considered evaluable.
American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. ● On April 13, 2017, CMS published a final rule that gives states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces. ● On May 23, 2019, CMS published a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020. ● On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.
American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers and increased the statute of limitations period for the government to recover overpayments to providers from three to five years. ● On April 13, 2017, CMS published a final rule that gives states greater flexibility in setting benchmarks for insurers in the individual and small group marketplaces, which may have the effect of relaxing the essential health benefits required under the ACA for plans sold through such marketplaces. 40 ● On May 23, 2019, CMS published a final rule to allow Medicare Advantage Plans the option of using step therapy for Part B drugs beginning January 1, 2020. ● On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminated the statutory Medicaid drug rebate cap, set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.
In March 2022, the FDA released a final guidance entitled “Expansion Cohorts: Use in First-In-Human Clinical Trials to Expedite Development of Oncology Drugs and Biologics,” which outlines how drug developers can utilize an adaptive trial design commonly referred to as a seamless trial design in early stages of oncology drug development (i.e., the first-in-human clinical trial) to compress the traditional three phases of trials into one continuous trial called an expansion cohort trial.
In March 2022, the FDA released a final guidance titled “Expansion Cohorts: Use in First-In-Human Clinical Trials to Expedite Development of Oncology Drugs and Biologics,” which outlines how drug developers can utilize an adaptive trial design commonly referred to as a seamless trial design in early stages of oncology drug development (i.e., the first-in-human clinical trial) to compress the traditional three phases of trials into one continuous trial called an expansion cohort trial.
Patents that grant from these patent families are generally expected to start to expire in 2039, subject to possible patent term extension. We own 1 pending patent family with 1 U.S. pending patent application and 1 patent application in foreign jurisdictions related to our antibody and display programs including, but not limited to, common light chains and mammalian display platforms.
Patents that grant from these patent families are generally expected to start to expire in 2039, subject to possible patent term extension. We own 1 pending patent family with 1 U.S. pending patent application and 1 patent application in foreign jurisdictions related to our antibody and display programs including, but not limited to, common light chains.
The SEC maintains a website that contains proxy and other information that issuers file electronically with the SEC at www.sec.gov . The contents of the websites referred to above are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only. 52
The SEC maintains a website that contains proxy and other information that issuers file electronically with the SEC at www.sec.gov. The contents of the websites referred to above are not incorporated into this filing. Further, our references to the URLs for these websites are intended to be inactive textual references only. 44
We intend to assess on a case-by-case basis the opportunities for accelerating the preclinical and clinical development of these candidates in a capital-efficient manner, including selectively pursuing strategic partnerships with leading biopharmaceutical companies with domain-specific clinical development expertise to maximize the value of our pipeline.
We intend to assess on a case-by-case basis the opportunities for accelerating the preclinical development, clinical development and commercialization of these candidates in a capital-efficient manner, including selectively pursuing strategic partnerships with leading biopharmaceutical companies with domain-specific clinical development and commercial expertise to maximize the value of our pipeline.
Despite advances in treatment of CRC in recent years with angiogenesis inhibitors and targeted therapies, there are few safe and effective treatment options for patients with CRC, and the majority of the patients are refractory to existing therapeutic regimens or relapse quickly and advance to later lines of therapy where treatment options are even more limited.
Despite advances in treatment of CRC in recent years with angiogenesis inhibitors and targeted therapies, there are few safe and effective treatment options for patients with CRC, and the majority of the patients are refractory to existing therapeutic regimens or relapse quickly and advance to later lines of therapy where treatment options are more limited and less effective.
(“TRIGR”) and ABL Bio, a South Korean biotechnology company, entered into an exclusive global (excluding South Korea) license agreement (the “TRIGR License Agreement”) which granted TRIGR a license to ABL001, ABL Bio’s bispecific antibody targeting DLL4 and VEGF-A (renamed CTX-009).
(“TRIGR”) and ABL Bio, a South Korean biotechnology company, entered into an exclusive global (excluding South Korea) license agreement (the “TRIGR License Agreement”) which granted TRIGR a license to ABL001, ABL Bio’s bispecific antibody targeting DLL4 and VEGF-A (renamed CTX-009 and subsequently tovecimig).
This agreement relates to our license from Adimab for certain antibodies for development and commercialization as biopharmaceutical products, including our product candidate, CTX-471. We were granted an exclusive option to license antibodies under the agreement, which we exercised with respect to CTX-471.
This agreement relates to our license from Adimab for certain antibodies for development and commercialization as biopharmaceutical products, including our product candidate, CTX-471. We were granted an exclusive option to license and potentially acquire antibodies under the agreement, which we exercised with respect to CTX-471.
We are required to make payments upon achievement of development milestones that, as of December 31, 2023, amounted to $3.5 million, of which we have already made $1.5 million in milestone payments, and we have additional potential payments due in the amount of $2.0 million.
We are required to make payments upon achievement of development milestones that, as of December 31, 2024, amounted to $3.5 million, of which we have already made $1.5 million in milestone payments, and we have additional potential payments due in the amount of $2.0 million.
A Member State may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. Approaches between Member States are diverging.
A European Union Member State may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. Approaches between European Union Member States are diverging.
Our lead product candidate, CTX-009, is a bispecific antibody targeting Delta-like ligand 4 (“DLL4”), a ligand of Notch-1, and vascular endothelial growth factor A (“VEGF-A”). Simultaneous blockade of the VEGF-A and the Notch pathways is known to turn productive angiogenesis into non-productive angiogenesis, which leads to tumor shrinkage and apoptosis.
Our lead product candidate, tovecimig (formerly known as CTX-009), is a bispecific antibody targeting Delta-like ligand 4 (“DLL4”), a ligand of Notch-1, and vascular endothelial growth factor A (“VEGF-A”). Simultaneous blockade of the VEGF-A and the Notch pathways is known to turn productive angiogenesis into non-productive angiogenesis, which leads to tumor shrinkage and apoptosis.
ABL Bio is also eligible to receive up to $75 million in development and regulatory milestone payments and up to $110 million in commercial milestone payments and tiered, single-digit royalties on net sales of CTX-009 in Ophthalmology. The financial terms of the agreement were amended in May 2021 but remain substantially similar to the terms in the TRIGR License Agreement.
ABL Bio is also eligible to receive up to $75 million in development and regulatory milestone payments and up to $110 million in commercial milestone payments and tiered, single-digit royalties on net sales of tovecimig in ophthalmology. The financial terms of the agreement were amended in May 2021 but remain substantially similar to the terms in the TRIGR License Agreement.
We believe that our programs, including CTX-009, CTX-471, CTX-8371 and our platform technologies, including our StitchMabs TM platform and our programs, technology, knowledge, experience and scientific resources provide us with competitive advantages, but we also face competition from pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions, among others.
We believe that our programs, including tovecimig, CTX-471, CTX-8371, CTX-10726 and our platform technologies, including our StitchMabs TM platform and our programs, technology, knowledge, experience and scientific resources provide us with competitive advantages, but we also face competition from pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions, among others.
Multiple inhibitors of PD-1 and PD-L1 have been approved as therapies for a broad range of tumors including melanoma, NSCLC, small cell lung cancer, head and neck squamous cell cancer, renal cell carcinoma, bladder cancer, gastric cancer, cervical cancer and other cancers with microsatellite instability or mismatch repair deficiency.
Multiple inhibitors of PD-1 and PD-L1 have been approved as therapies for a broad range of tumors including melanoma, NSCLC, SCLC, head and neck squamous cell cancer, renal cell carcinoma, bladder cancer, gastric cancer, cervical cancer and other cancers with microsatellite instability or mismatch repair deficiency.
Sales and Marketing We hold worldwide rights to all of our product candidates (with the exception of limited countries for CTX-009), which provide us the optionality to grow our internal pipeline independently or partner selected rights to our product candidates in different geographies throughout the world.
Sales and Marketing We hold worldwide rights to all of our product candidates (with the exception of limited countries for tovecimig), which provide us the optionality to grow our internal pipeline independently or partner selected rights to our product candidates in different geographies throughout the world.
HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions; ● federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; and ● analogous state and foreign law equivalents of each of the above U.S. federal laws, such as anti- kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers or patients; state and local marketing and/or transparency laws applicable to manufacturers that may be broader in scope than the federal requirements; state laws that require the reporting of information related to drug pricing; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; state and local laws that require the licensure of sales representatives; state laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state and local laws that require the registration of pharmaceutical sales representatives; data privacy and security laws and regulations in foreign jurisdictions that may be more stringent than those in the United States (such as the European Union, which adopted the General Data Protection Regulation, which became effective in May 2018); 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 pre-empted by HIPAA, thus complicating compliance efforts. 50 The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations.
HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions; ● federal government price reporting laws, which require us to calculate and report complex pricing metrics in an accurate and timely manner to government programs; and ● analogous state and foreign law equivalents of each of the above U.S. federal laws, such as anti- kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers or patients; state and local marketing and/or transparency laws applicable to manufacturers that may be broader in scope than the federal requirements; state laws that require the reporting of information related to drug pricing; state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information; state and local laws that require the licensure of sales representatives; state laws that require biopharmaceutical companies to comply with the biopharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; state and local laws that require the registration of pharmaceutical sales representatives; data privacy and security laws and regulations in foreign jurisdictions that may be more stringent than those in the United States (such as the European Union, which adopted the General Data Protection Regulation, which became effective in May 2018); 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 pre-empted by HIPAA, thus complicating compliance efforts.
Grade 3 or greater adverse events that were designated to be of special interest (“AESIs”) by the trial investigators were hemoptysis or hemorrhage (12.5%) and GI or tumor perforation (8.3%), with 0% for pulmonary hypertension, wound healing complication and cardiac failure. The table below depicts a summary of the TEAEs in 24 patients as of November 9, 2022.
Grade 3 or greater adverse events that were designated to be of special interest (“AESIs”) by the trial investigators were hemoptysis or hemorrhage (12.5%) and GI or tumor perforation (8.3%), with 0% for pulmonary hypertension, wound healing complication and cardiac failure. The table below depicts a summary of the TEAEs in 24 patients for the study.
A Phase 1 dose escalation and dose expansion monotherapy trial in patients with solid tumors, a Phase 1b trial of CTX-009 in combination with chemotherapy and a Phase 2 trial of CTX-009 in combination with chemotherapy in patients with advanced biliary tract cancer were completed in South Korea.
A Phase 1 dose escalation and dose expansion monotherapy trial in patients with solid tumors, a Phase 1b trial of tovecimig in combination with chemotherapy and a Phase 2 trial of tovecimig in combination with chemotherapy in patients with advanced biliary tract cancer were completed in South Korea.
In addition, ABL Bio is eligible to receive up to $96 million of development and regulatory milestone payments, up to $303 million of commercial milestone payments and tiered single-digit royalties on net sales of CTX-009 in Oncology.
In addition, ABL Bio is eligible to receive up to $96 million of development and regulatory milestone payments, up to $303 million of commercial milestone payments and tiered single-digit royalties on net sales of tovecimig in oncology.
Our focus on common light chain antibodies simplifies the process of converting our StitchMabs TM screening candidates into bispecific antibody product candidates. A common light chain simplifies the production of bispecific antibodies 31 License Agreements CTX-009 (DLL4 X VEGF-A bispecific antibody) Our wholly owned subsidiary Trigr Therapeutics, Inc.
Our focus on common light chain antibodies simplifies the process of converting our StitchMabs TM screening candidates into bispecific antibody product candidates. A common light chain simplifies the production of bispecific antibodies License Agreements Tovecimig (DLL4 X VEGF-A bispecific antibody) Our wholly owned subsidiary Trigr Therapeutics, Inc.
Under the terms of the agreement, ABL Bio and TRIGR would jointly develop CTX-009, with ABL Bio responsible for development of CTX-009 throughout the end of Phase 1 clinical trials and TRIGR responsible for the development of CTX-009 from Phase 2 and onward. ABL Bio received a $5 million upfront payment and a $6 million milestone payment.
Under the terms of the agreement, ABL Bio and TRIGR would jointly develop tovecimig, with ABL Bio responsible for development of tovecimig throughout the end of Phase 1 clinical trials and TRIGR responsible for the development of tovecimig from Phase 2 and onward. 24 ABL Bio received a $5 million upfront payment and a $6 million milestone payment.
During an additional two-year period of market exclusivity, a generic or biosimilar MAA can be submitted and authorized, and the innovator’s data may be referenced, but no generic or biosimilar medicinal product can be placed on the European Union market until the expiration of the market exclusivity.
During an additional two-year period of market exclusivity, a generic or biosimilar marketing authorization application can be submitted and authorized, and the innovator’s data may be referenced, but no generic or biosimilar medicinal product can be placed on the European Union market until the expiration of the market exclusivity.
All nine events resolved . The responses observed as described below: ● A PR was observed in a patient with metastatic melanoma who was previously treated with nivolumab and progressed on nivolumab. Below is a series of CT scan images from this patient.
The responses observed as described below: ● A PR was observed in a patient with metastatic melanoma who was previously treated with nivolumab and progressed on nivolumab. Below is a series of CT scan images from this patient.
This patient has been on the study for more than 2 years and is still ongoing. ● The CR was observed in a patient with advanced small cell lung cancer who was previously treated with the carboplatin/etoposide and atezolizumab (a PD-L1 blocker) regimen in the first line followed by a treatment with nivolumab (a PD-1 blocker) in the second line.
This patient has been on the study for more than 2 years and is still ongoing. 15 ● The CR was observed in a patient with advanced SCLC who was previously treated with the carboplatin/etoposide and atezolizumab (a PD-L1 blocker) regimen in the first line followed by a treatment with nivolumab (a PD-1 blocker) in the second line.
FOLFOX demonstrated an ORR of 5%, a median PFS of 4.0 months, and a median OS of 6.2 months in a randomized study against best supportive care. The waterfall plot below depicts the best response for the 22 patients evaluated in the trial as of November 9, 2022.
FOLFOX demonstrated an ORR of 5%, a median PFS of 4.0 months, and a median OS of 6.2 months in a randomized study against best supportive care. 11 The waterfall plot below depicts the best response for the 22 patients evaluated in the trial.
The primary endpoint of the trial is ORR and the secondary endpoints include PFS, DCR, DOR and OS among other. Patients who were randomized to receive paclitaxel and have progressed on their regimen may cross over to the CTX-009 plus paclitaxel arm after progression on paclitaxel if they still meet the enrollment criteria for the study.
The primary endpoint of the trial is ORR and the secondary endpoints include PFS, OS, DOR and DCR among others. Patients who were randomized to receive paclitaxel and have progressed on their regimen can cross over to the tovecimig plus paclitaxel arm after progression on paclitaxel if they still meet the enrollment criteria for the study.
Additional Plans for CTX-009 We intend to explore the potential of CTX-009 in additional indications, based on data from pre-clinical models, potential biomarkers such as DLL4, and clinical data from CTX-009 trials providing signs of potential activity of CTX-009 in additional indications such as ovarian cancer, gastric cancer, pancreatic cancer, renal cell cancer, liver cancer, neuroendocrine cancer and others.
Additional Plans for Tovecimig We intend to explore the potential of tovecimig in additional indications, based on data from pre-clinical models, potential biomarkers such as DLL4, and clinical data from tovecimig trials providing signs of potential activity of tovecimig in additional indications such as ovarian cancer, gastric cancer,, renal cell cancer, and liver cancer.
Further investigation into the mechanism of CTX-8371 found that it led to T-cell activation through four mechanisms: ● Dual checkpoint blocker : preventing PD-L1 to PD-1 binding, thus relieving the immunosuppressive PD-1 signal; ● Cell engager : bridging the connection between the PD-L1 expressing tumor cell and the PD-1 expressing T-cell, potentially facilitating T-cell engagement and enhancement of effector function; ● Downregulation of PD-1 : triggering the shedding of the extracellular domain of PD-1 receptors from the surface of T-cells resulting in a reduction in the levels of PD-1 on T-cells; and ● Indirect CD28 agonist: increasing the pool of free CD80 on tumor cells making it available to bind and activate the CD28 T-cell co-stimulatory receptor, thereby, sending a positive signal to the T-cell, which enhances its activation.
Further investigation into the mechanism of CTX-8371 found that it led to T-cell activation through four mechanisms: ● Dual checkpoint blocker : preventing PD-L1 to PD-1 binding, thus relieving the immunosuppressive PD-1 signal; ● Cell engager : bridging the connection between the PD-L1 expressing tumor cell and the PD-1 expressing T-cell, potentially facilitating T-cell engagement and enhancement of effector function; ● Downregulation of PD-1 : triggering the shedding of the extracellular domain of PD-1 receptors from the surface of T-cells resulting in a reduction in the levels of PD-1 on T-cells; and ● Indirect CD28 agonist: increasing the pool of free CD80 on tumor cells making it available to bind and activate the CD28 T-cell co-stimulatory receptor, thereby, sending a positive signal to the T-cell, which enhances its activation. 18 Differentiated mechanism of action of CTX-8371 drives enhanced T-cell activation We also found that the greater activity of CTX-8371 in our T-cell activation assay compared to PD-1 inhibition also extended to PD-L1 inhibition.
Reform of the Regulatory Framework in the European Union The European Commission introduced legislative proposals in April 2023 that, if implemented, will replace the current regulatory framework in the European Union for all medicines (including those for rare diseases and for children).
All of the aforementioned European Union rules are generally applicable in the EEA. Reform of the Regulatory Framework in the European Union The European Commission introduced legislative proposals in April 2023 that, if implemented, will replace the current regulatory framework in the European Union for all medicines (including those for rare diseases and for children).
The trial is designed to assess the safety and efficacy of the combination of CTX-009 and paclitaxel versus paclitaxel alone. A schema of the trial design is provided below: The trial will enroll 150 patients, who will be randomized in a 2:1 ratio to receive CTX-009 plus paclitaxel (n=100) or paclitaxel alone (n=50).
The trial is designed to assess the safety and efficacy of the combination of tovecimig and paclitaxel versus paclitaxel alone. A schema of the trial design is provided below: The trial was designed to enroll 150 patients, randomized in a 2:1 ratio to receive tovecimig plus paclitaxel (n=100) or paclitaxel alone (n=50).
Of the 24 patients, 11 were treated in the second line with 7 PRs observed, leading to an ORR of 63.6% in this sub-group.
Of the 24 patients, 11 were treated in the second line with 7 PRs observed, leading to an ORR of 63.6% in this sub-group. In the third line, 13 patients were treated with 2 PRs observed, leading to an ORR of 15.4% in the second sub-group.
Preclinical and early clinical data of CTX-009 as a monotherapy and in combination with chemotherapy suggest that blockade of both pathways provides robust anti-tumor activity across several solid tumor indications, including colorectal, gastric, cholangiocarcinoma, pancreatic and non-small cell lung cancer. CTX-009 is undergoing clinical development in patients with advanced solid tumors in the United States.
Preclinical and early clinical data of tovecimig as a monotherapy and in combination with chemotherapy suggest that blockade of both pathways provides robust anti-tumor activity across several solid tumor indications, including colorectal, gastric, cholangiocarcinoma, pancreatic and NSCLC. Tovecimig is undergoing clinical development in patients with advanced solid tumors in the United States.
Even if a product is considered to be an innovative medicinal product so that the innovator gains the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company obtained a marketing authorization based on a marketing authorization application with a complete and independent data package of pharmaceutical tests, preclinical tests and clinical trials. 45 The aforementioned European Union rules are generally applicable in the EEA.
Even if a product is considered to be an innovative medicinal product so that the innovator gains the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company obtained a marketing authorization based on a marketing authorization application with a complete and independent data package of pharmaceutical tests, preclinical tests and clinical trials.
We also intend to seek patent protection, or rely upon trade secret rights, to protect other technologies that may be used to discover and validate targets and that may be used to identify and develop novel products or improvements thereof. We seek protection, in part, through confidentiality and proprietary information agreements.
We also intend to seek patent protection, or rely upon trade secret rights, to protect other technologies that may be used to discover and validate targets and that may be used to identify and develop novel products or improvements thereof.
As of January 31, 2024, we have greater than 80 issued patents and patent applications pending in the United States and foreign jurisdictions relating to CTX-009, CTX-471, CTX-8371 and other discovery and research programs.
As of January 31, 2025, we have greater than 90 issued patents and patent applications pending in the United States and foreign jurisdictions relating to tovecimig, CTX-471, CTX-8371, CTX-10726 and other discovery and research programs.
Phase 1: Summary of Clinical Activity of CTX-009 at the RP2D The observed ORR of CTX-009 at the 10 and 12.5 mg/kg doses were 18.8% (3/16) as a monotherapy and 23.5% (4/17) in combination with chemotherapy.
Phase 1 Summary of Clinical Activity of Tovecimig at the Recommended Phase 2 Dose ( RP2D ) – South Korea The observed ORR of tovecimig at the 10 and 12.5 mg/kg doses were 18.8% (3/16) as a monotherapy and 23.5% (4/17) in combination with chemotherapy.
The significant findings presented were as follows: ● CTX-009 was generally well-tolerated and demonstrated single agent activity in heavily pre-treated patients with solid tumors who were resistant to anti-VEGF therapies, mostly of colorectal and gastric origins ● The maximum tolerated dose (“MTD”) was not reached, and the RP2D of CTX-009 were determined to be 10.0 and 12.5 mg/kg biweekly ● ORR of CTX-009 as a monotherapy across all doses tested (0.3 – 17.5 mg/kg) was 8% and the CBR was 62% in patients treated at the 3rd and 4th line settings ● Treatment with CTX-009 as a monotherapy at the RP2D (10.0 mg/kg and 12.5 mg/kg) led to 18.8% (n=3/16) ORR, not including an additional unconfirmed PR, and a 68.5% CBR (n=11/16) 14 Phase 2: Data from Combination Clinical Trial of CTX-009 in BTC in South Korea A Phase 2 trial of CTX-009 in combination with paclitaxel was initiated by Handok in the first quarter of 2021 in patients with BTCs.
The significant findings presented were as follows: ● Tovecimig was generally well-tolerated and demonstrated single agent activity in heavily pre-treated patients with solid tumors who were resistant to anti-VEGF therapies, mostly of colorectal and gastric origins ● The maximum tolerated dose (“MTD”) was not reached, and the RP2D of tovecimig were determined to be 10.0 and 12.5 mg/kg biweekly ● ORR of tovecimig as a monotherapy across all doses tested (0.3 – 17.5 mg/kg) was 8% and the CBR was 62% in patients treated at the 3rd and 4th line settings ● Treatment with tovecimig as a monotherapy at the RP2D (10.0 mg/kg and 12.5 mg/kg) led to 18.8% (n=3/16) ORR, not including an additional unconfirmed PR, and a 68.5% CBR (n=11/16) Phase 2 Trial of Tovecimig with Paclitaxel in BTC - South Korea In the Phase 1b Study, there were four patients enrolled with cholangiocarcinoma.
Treatment with CTX-8371 resulted in improved overall survival in this model and cured three of eight mice, such that their tumors were completely eradicated. 26 Tumor growth inhibition was improved when treating mice with CTX-8371 compared to treating them with monoclonal antibodies that inhibited either PD-1, PD-L1, or the combination of PD-1 and PD-L1 Dosing with CTX-8371 led to improved overall survival in a B16F10 melanoma model compared to either PD-1 or PD-L1 checkpoint inhibitors or to the combination of both 27 CTX-8371 also reduced tumor growth in the syngeneic MB49 bladder cancer model and in the syngeneic EMT-6 breast cancer models which are known to be non-responsive to checkpoint blocker treatments.
Tumor growth inhibition was improved when treating mice with CTX-8371 compared to treating them with monoclonal antibodies that inhibited either PD-1, PD-L1, or the combination of PD-1 and PD-L1 19 Dosing with CTX-8371 led to improved overall survival in a B16F10 melanoma model compared to either PD-1 or PD-L1 checkpoint inhibitors or to the combination of both CTX-8371 also reduced tumor growth in the syngeneic MB49 bladder cancer model and in the syngeneic EMT-6 breast cancer models which are known to be non-responsive to checkpoint blocker treatments.
For example, CMS may develop new payment and delivery models, such as bundled payment models. Recently, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products. Such scrutiny has resulted in several recent U.S.
Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new payment and delivery models, such as bundled payment models. Recently, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products. Such scrutiny has resulted in several recent U.S.
In September of 2022, AstraZeneca received FDA approval of durvalumab in combination with gemcitabine/cisplatin for the first line treatment of BTC. The only FDA approved therapies for second line treatment of BTC are targeted therapies that address specific tumor mutations or solid tumors that are microsatellite instability high.
In addition, Merck received FDA approval of pembrolizumab in combination with gemcitabine/cisplatin for the first line treatment of BTC in October of 2023. The only FDA approved therapies for second line treatment of BTC are targeted therapies that address specific tumor mutations or solid tumors that are microsatellite instability high.
Biliary Tract Cancers – BTC Following conversations with the FDA, we submitted a protocol for a randomized Phase 2/3 trial for CTX-009 in combination with paclitaxel in adult patients with unresectable, advanced, metastatic or recurrent biliary tract cancers who have received one prior systemic chemotherapy regimen.
Phase 2 Data tovecimig + paclitaxel in BTC Best Response by Patient Phase 2/3 Trial of Tovecimig with Paclitaxel in BTC – United States Following conversations with the FDA, we submitted a protocol for a randomized Phase 2/3 trial for tovecimig in combination with paclitaxel in adult patients with unresectable, advanced, metastatic or recurrent biliary tract cancers who have received one prior systemic chemotherapy regimen.
We intend to expand the development of CTX-009 to additional tumor types with significant unmet need such as ovarian cancer and gastric cancer, among others. Following the generation of positive clinical data in later lines of therapy, we plan on studying CTX-009 in earlier settings in all indications where the data support it.
We also intend to expand the development of tovecimig to additional indications with significant unmet need such as ovarian cancer and gastric cancer. Following the generation of positive clinical data in later lines of therapy, we plan to study tovecimig in earlier settings in all indications where the data support it.
We have licensed exclusive global rights to CTX-009, outside of South Korea, from ABL Bio, Inc. (“ABL Bio”), a South Korea-based clinical-stage company focused on developing antibody therapeutics. South Korean rights are held by Handok Pharmaceuticals, Inc. (“Handok”) and China rights were out-licensed from the Company to Elpiscience Biopharmaceuticals Co., Limited (“Elpiscience”).
(“ABL Bio”), a South Korea-based clinical-stage company focused on developing antibody therapeutics. South Korean rights are held by Handok Pharmaceuticals, Inc. (“Handok”) and China rights were out-licensed from us to Elpiscience Biopharmaceuticals Co., Limited (“Elpiscience”).
Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.
Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. 35 Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA.
We chose BTC and CRC as our lead indications based on a number of factors, including CTX-009 activity observed in the Phase 1, 1b and 2 clinical trials, lack of effective therapies for these patient populations and the potential for a straight-forward regulatory route to approval.
We chose BTC and CRC as our first indications based on a number of factors, including tovecimig’s activity observed in the Phase 1, 1b and 2 clinical trials and the lack of effective therapies for these patient populations.
Safeguards we implement to discourage improper payments or offers of payments by our employees, consultants, and others may be ineffective, and violations of the FCPA and similar laws may result in severe criminal or civil sanctions, or other liabilities or proceedings against us, any of which would likely harm our reputation, business, financial condition and result of operations.
Safeguards we implement to discourage improper payments or offers of payments by our employees, consultants, and others may be ineffective, and violations of the FCPA and similar laws may result in severe criminal or civil sanctions, or other liabilities or proceedings against us, any of which would likely harm our reputation, business, financial condition and result of operations. 43 Employees and Human Capital As of December 31, 2024, we had 35 employees, 22 of which were primarily engaged in research and development and clinical activities.
Post-Approval Requirements Biological products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.
To determine eligibility for RTOR, the FDA requires top-line efficacy and safety results from an applicant. 33 Post-Approval Requirements Biological products manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product.
The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition. These trials are designed to evaluate the safety, dosage tolerance, metabolism and pharmacologic actions of the investigational product in humans, the side effects associated with increasing doses, and if possible, to gain early evidence on effectiveness. Phase 2 .
These trials are designed to evaluate the safety, dosage tolerance, metabolism and pharmacologic actions of the investigational product in humans, the side effects associated with increasing doses, and if possible, to gain early evidence on effectiveness. 30 Phase 2 .
The two initial indications of BTC and CRC for CTX-009 were selected based on the results of the Phase 1,1b and 2 clinical trials and the significant unmet need for effective therapeutic regimens in these patient populations. There are an estimated 18,600 patients diagnosed with BTC in the U.S. each year and over 200,000 patients worldwide.
The two initial indications of BTC and CRC for tovecimig were selected based on the results of the Phase 1,1b and 2 clinical trials and the significant unmet need for effective therapeutic regimens in these patient populations. We estimate that there are approximately 23,000 patients diagnosed with BTC in the United States each year and over 200,000 patients worldwide.
In addition, we are developing a plan to study the combination of CTX-009 with our novel bispecific checkpoint blocker, CTX-8371, and with other checkpoint blockers, such as pembrolizumab and atezolizumab. Additionally, we are considering the combination of CTX-009 with our novel CD137 agonistic antibody, CTX-471, which is currently in a Phase 1b clinical trial in patients with advanced solid tumors.
In addition, we are developing a plan to study the combination of tovecimig with our novel bispecific checkpoint blocker, CTX-8371, and with other checkpoint blockers, such as pembrolizumab and atezolizumab. Additionally, we are considering the combination of tovecimig with our novel CD137 agonistic antibody, CTX-471.
We own 4 pending patent families with 7 issued U.S. patents and 1 issued patent in Taiwan, 3 U.S. patent applications, and 43 patent applications in foreign jurisdictions, related to our CD137 agonist antibody therapeutic platform including, but not limited to, our CTX-471 therapeutic candidate.
We own 4 pending patent families with 11 issued U.S. patents and issued patents in Taiwan, China, Eurasia, Japan, Korea, Malaysia, Singapore, and New Zealand, 3 U.S. patent applications, and 39 patent applications in foreign jurisdictions, related to our CD137 agonist antibody therapeutic platform including, but not limited to, our CTX-471 therapeutic candidate.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

103 edited+36 added−15 removed530 unchanged
Biggest changeWe may seek to establish collaborations, and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans. The advancement of our product candidates and development programs and the potential commercialization of our current and future product candidates will require substantial additional cash to fund expenses.
Biggest changeAny of the factors set forth above, among others, could delay the development and commercialization of our product candidates, which would harm our business prospects, financial condition and results of operations. 88 We may seek to establish collaborations, and, if we are not able to establish them on commercially reasonable terms, we may have to alter our development and commercialization plans.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us.
The clinical and commercial success of our current and future product candidates will depend on several factors, including the following: ● timely and successful completion of preclinical studies and our clinical trials; ● sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials; ● our plans to successfully submit new INDs with the FDA for our current and future product candidates; ● our ability to complete preclinical studies for current or future product candidates; ● successful enrollment in, and completion of clinical trials; ● successful data from our clinical program that supports an acceptable risk-benefit profile of our product candidates in the intended patient populations; ● our ability to establish agreements with third-party manufacturers on a timely and cost-efficient manner; ● whether we are required by the FDA or comparable foreign regulatory authorities to conduct additional clinical trials or other studies beyond those planned or anticipated to support approval of our product candidates; ● acceptance of our proposed indications and the primary endpoint assessments evaluated in the clinical trials of our product candidates by the FDA and comparable foreign regulatory authorities; 57 ● receipt and maintenance of timely marketing approvals from applicable regulatory authorities; ● successfully launching commercial sales of our product candidates, if approved; ● the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates, if approved; ● entry into collaborations to further the development of our product candidates; ● obtaining and maintaining patent and trade secret protection or regulatory exclusivity for our product candidates; ● acceptance of the benefits and uses of our product candidates, if approved, by patients, the medical community and third-party payors; ● maintaining a continued acceptable safety, tolerability and efficacy profile of the product candidates following approval; ● our compliance with any post-approval requirements imposed on our products, such as post-marketing studies, REMS or additional requirements that might limit the promotion, advertising, distribution or sales of our products or make the products cost prohibitive; ● competing effectively with other therapies; ● obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors; ● our ability to identify bispecifics; and ● enforcing and defending intellectual property rights and claims.
The clinical and commercial success of our current and future product candidates will depend on several factors, including the following: ● timely and successful completion of preclinical studies and our clinical trials; ● sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials; ● our plans to successfully submit new INDs with the FDA for our current and future product candidates; ● our ability to complete preclinical studies for current or future product candidates; ● successful enrollment in, and completion of clinical trials; ● successful data from our clinical program that supports an acceptable risk-benefit profile of our product candidates in the intended patient populations; ● our ability to establish agreements with third-party manufacturers on a timely and cost-efficient manner; ● whether we are required by the FDA or comparable foreign regulatory authorities to conduct additional clinical trials or other studies beyond those planned or anticipated to support approval of our product candidates; ● acceptance of our proposed indications and the primary endpoint assessments evaluated in the clinical trials of our product candidates by the FDA and comparable foreign regulatory authorities; ● receipt and maintenance of timely marketing approvals from applicable regulatory authorities; ● successfully launching commercial sales of our product candidates, if approved; ● the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates, if approved; 49 ● entry into collaborations to further the development of our product candidates; ● obtaining and maintaining patent and trade secret protection or regulatory exclusivity for our product candidates; ● acceptance of the benefits and uses of our product candidates, if approved, by patients, the medical community and third-party payors; ● maintaining a continued acceptable safety, tolerability and efficacy profile of the product candidates following approval; ● our compliance with any post-approval requirements imposed on our products, such as post-marketing studies, REMS or additional requirements that might limit the promotion, advertising, distribution or sales of our products or make the products cost prohibitive; ● competing effectively with other therapies; ● obtaining and maintaining healthcare coverage and adequate reimbursement from third-party payors; ● our ability to identify bispecifics; and ● enforcing and defending intellectual property rights and claims.
We may also experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product candidates we develop, including: 58 ● results from preclinical studies or clinical trials may not be predictive of results from later clinical trials of any product candidate; ● the FDA or other regulatory authorities, Institutional Review Boards ("IRBs"), or independent ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; ● the FDA or other regulatory authorities may require us to submit additional data such as long-term toxicology studies, or impose other requirements on us, before permitting us to initiate a clinical trial; ● we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organizations ("CROs"), as the terms of these agreements can be subject to extensive negotiation and vary significantly among different CROs and trial sites; ● clinical trials of any product candidate may fail to show safety, purity or potency, or may produce negative or inconclusive results, which may cause us to decide, or regulators to require us, to conduct additional nonclinical studies or clinical trials or which may cause us to decide to abandon product candidate development programs; ● the number of patients required for clinical trials may be larger than we anticipate, or we may have difficulty in recruiting and enrolling patients to participate in clinical trials, including as a result of the size and nature of the patient population, the proximity of patients to clinical trial sites, eligibility criteria for the clinical trial, the nature of the clinical trial protocol, the availability of approved effective treatments for the relevant disease and competition from other clinical trial programs for similar indications and clinical trial subjects; ● enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials or may fail to return for post-treatment follow-up at a higher rate than we anticipate; ● our CROs and other third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; ● we may elect to, or regulators, IRBs or ethics committees may require that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that participants are being exposed to unacceptable health risks; ● any of our product candidates could cause undesirable side effects that could result in significant negative consequences, including the inability to enter clinical development or receive regulatory approval; ● the cost of preclinical or nonclinical testing and studies and clinical trials of any product candidates may be greater than we anticipate; ● we may face hurdles in addressing subject safety concerns that arise during the course of a trial, causing us or our investigators, regulators, IRBs or ethics committees to suspend or terminate trials, or reports may arise from nonclinical or clinical testing of other cancer therapies that raise safety or efficacy concerns about our product candidates; 59 ● the supply, quality or timeliness of delivery of materials for product candidates we develop or other materials necessary to conduct clinical trials may be insufficient or inadequate; and ● we may need to change the manufacturing site and potentially the CDMO for our product candidates from those that are able to produce clinical supply for our Phase 1 clinical trials to those with the capacity and ability to perform commercial manufacturing and/or the production of clinical material for our later stage clinical trials.
We may also experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product candidates we develop, including: ● results from preclinical studies or clinical trials may not be predictive of results from later clinical trials of any product candidate; ● the FDA or other regulatory authorities, Institutional Review Boards ("IRBs"), or independent ethics committees may not authorize us or our investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site; ● the FDA or other regulatory authorities may require us to submit additional data such as long-term toxicology studies, or impose other requirements on us, before permitting us to initiate a clinical trial; ● we may experience delays in reaching, or fail to reach, agreement on acceptable terms with prospective trial sites and prospective contract research organizations ("CROs"), as the terms of these agreements can be subject to extensive negotiation and vary significantly among different CROs and trial sites; ● clinical trials of any product candidate may fail to show safety, purity or potency, or may produce negative or inconclusive results, which may cause us to decide, or regulators to require us, to conduct additional nonclinical studies or clinical trials or which may cause us to decide to abandon product candidate development programs; ● the number of patients required for clinical trials may be larger than we anticipate, or we may have difficulty in recruiting and enrolling patients to participate in clinical trials, including as a result of the size and nature of the patient population, the proximity of patients to clinical trial sites, eligibility criteria for the clinical trial, the nature of the clinical trial protocol, the availability of approved effective treatments for the relevant disease and competition from other clinical trial programs for similar indications and clinical trial subjects; ● enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical trials or may fail to return for post-treatment follow-up at a higher rate than we anticipate; ● our CROs and other third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all, or may deviate from the clinical trial protocol or drop out of the trial, which may require that we add new clinical trial sites or investigators; ● we may elect to, or regulators, IRBs or ethics committees may require that we or our investigators, suspend or terminate clinical research or trials for various reasons, including noncompliance with regulatory requirements or a finding that participants are being exposed to unacceptable health risks; ● any of our product candidates could cause undesirable side effects that could result in significant negative consequences, including the inability to enter clinical development or receive regulatory approval; ● the cost of preclinical or nonclinical testing and studies and clinical trials of any product candidates may be greater than we anticipate; ● we may face hurdles in addressing subject safety concerns that arise during the course of a trial, causing us or our investigators, regulators, IRBs or ethics committees to suspend or terminate trials, or reports may arise from nonclinical or clinical testing of other cancer therapies that raise safety or efficacy concerns about our product candidates; 51 ● the supply, quality or timeliness of delivery of materials for product candidates we develop or other materials necessary to conduct clinical trials may be insufficient or inadequate; and ● we may need to change the manufacturing site and potentially the contract development manufacturing organizations ("CDMO") for our product candidates from those that are able to produce clinical supply for our Phase 1 clinical trials to those with the capacity and ability to perform commercial manufacturing and/or the production of clinical material for our later stage clinical trials.
Our ability to generate future revenue from product sales depends heavily on our, or our existing or future collaborators’, success in: ● completing preclinical studies and clinical trials of our product candidates; ● seeking and obtaining marketing approvals for any product candidates that we or our collaborators develop; ● identifying and developing new product candidates; ● launching and commercializing product candidates for which we obtain marketing approval by establishing a marketing, sales, distribution and medical affairs infrastructure or, alternatively, collaborating with a commercialization partner; ● achieving coverage and adequate reimbursement by hospitals and third-party payors, including governmental authorities, such as Medicare and Medicaid, private insurers and managed care organizations, for product candidates, if approved, that we or our collaborators develop; ● obtaining market acceptance of product candidates, if approved, that we develop as viable treatment options; ● addressing any competing technological and market developments; ● negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter and performing our obligations under such arrangements; ● maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; ● defending against third-party interference or infringement claims, if any; and ● attracting, hiring and retaining qualified personnel. 54 We anticipate incurring significant costs associated with commercializing any product candidate that is approved for commercial sale.
Our ability to generate future revenue from product sales depends heavily on our, or our existing or future collaborators’, success in: ● completing preclinical studies and clinical trials of our product candidates; ● seeking and obtaining marketing approvals for any product candidates that we or our collaborators develop; ● identifying and developing new product candidates; ● launching and commercializing product candidates for which we obtain marketing approval by establishing a marketing, sales, distribution and medical affairs infrastructure or, alternatively, collaborating with a commercialization partner; ● achieving coverage and adequate reimbursement by hospitals and third-party payors, including governmental authorities, such as Medicare and Medicaid, private insurers and managed care organizations, for product candidates, if approved, that we or our collaborators develop; ● obtaining market acceptance of product candidates, if approved, that we develop as viable treatment options; ● addressing any competing technological and market developments; ● negotiating favorable terms in any collaboration, licensing or other arrangements into which we may enter and performing our obligations under such arrangements; ● maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, trade secrets and know-how; ● defending against third-party interference or infringement claims, if any; and ● attracting, hiring and retaining qualified personnel. 46 We anticipate incurring significant costs associated with commercializing any product candidate that is approved for commercial sale.
The market price of shares of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including: ● results of clinical trials of our product candidates; ● the timing of the release of results of our clinical trials; ● results of clinical trials of our competitors’ products; ● safety issues with respect to our products or our competitors’ products; ● regulatory actions with respect to our products or our competitors’ products; ● actual or anticipated fluctuations in our financial condition and operating results; ● publication of research reports by securities analysts about us or our competitors or our industry; ● our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; ● additions and departures of key personnel; ● strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; ● the passage of legislation or other regulatory developments affecting us or our industry; 105 ● fluctuations in the valuation of companies perceived by investors to be comparable to us; ● sales of our common stock by us, our insiders or our other stockholders; ● speculation in the press or investment community; ● announcement or expectation of additional financing efforts; ● changes in accounting principles; ● terrorist acts, acts of war or periods of widespread civil unrest; ● natural disasters and other calamities; ● changes in market conditions for biopharmaceutical stocks; and ● changes in general market and economic conditions.
The market price of shares of our common stock could be subject to wide fluctuations in response to many risk factors listed in this section, and others beyond our control, including: ● results of clinical trials of our product candidates; ● the timing of the release of results of our clinical trials; ● results of clinical trials of our competitors’ products; ● safety issues with respect to our products or our competitors’ products; ● regulatory actions with respect to our products or our competitors’ products; ● actual or anticipated fluctuations in our financial condition and operating results; ● publication of research reports by securities analysts about us or our competitors or our industry; ● our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; ● additions and departures of key personnel; 99 ● strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy; ● the passage of legislation or other regulatory developments affecting us or our industry; ● fluctuations in the valuation of companies perceived by investors to be comparable to us; ● sales of our common stock by us, our insiders or our other stockholders; ● speculation in the press or investment community; ● announcement or expectation of additional financing efforts; ● changes in accounting principles; ● terrorist acts, acts of war or periods of widespread civil unrest; ● natural disasters and other calamities; ● changes in market conditions for biopharmaceutical stocks; and ● changes in general market and economic conditions.
Regardless of merit or eventual outcome, liability claims may result in: 75 ● decreased demand for any product candidate we may develop; ● withdrawal of trial participants; ● termination of clinical trial sites or entire trial programs; ● injury to our reputation and significant negative media attention; ● initiation of investigations by regulators; ● significant time and costs to defend the related litigation; ● substantial monetary awards to trial subjects or patients; ● diversion of management and scientific resources from our business operations; and ● the inability to commercialize any product candidates that we may develop.
Regardless of merit or eventual outcome, liability claims may result in: ● decreased demand for any product candidate we may develop; ● withdrawal of trial participants; ● termination of clinical trial sites or entire trial programs; ● injury to our reputation and significant negative media attention; ● initiation of investigations by regulators; ● significant time and costs to defend the related litigation; ● substantial monetary awards to trial subjects or patients; ● diversion of management and scientific resources from our business operations; and ● the inability to commercialize any product candidates that we may develop.
Future growth would impose significant added responsibilities on members of management, including: ● identifying, recruiting, integrating, maintaining and motivating additional employees; ● managing our internal development efforts effectively, including the clinical and FDA review process for our current product candidates and any other current or future product candidates we develop, while complying with our contractual obligations to contractors and other third parties; and 96 ● improving our operational, financial and management controls, reporting systems and procedures.
Future growth would impose significant added responsibilities on members of management, including: ● identifying, recruiting, integrating, maintaining and motivating additional employees; ● managing our internal development efforts effectively, including the clinical and FDA review process for our current product candidates and any other current or future product candidates we develop, while complying with our contractual obligations to contractors and other third parties; and ● improving our operational, financial and management controls, reporting systems and procedures.
For example: ● others may be able to make products that are similar to our product candidates but that are not covered by the claims of the patents that we own or license or may own in the future; ● we, or any partners or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future; ● we, or any partners or collaborators, might not have been the first to file patent applications covering certain of our or their inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights; ● it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents; ● issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; 90 ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; ● the patents of others may have an adverse effect on our business; and ● we may choose not to file a patent for certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
For example: ● others may be able to make products that are similar to our product candidates but that are not covered by the claims of the patents that we own or license or may own in the future; ● we, or any partners or collaborators, might not have been the first to make the inventions covered by the issued patent or pending patent application that we license or may own in the future; ● we, or any partners or collaborators, might not have been the first to file patent applications covering certain of our or their inventions; ● others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our owned or licensed intellectual property rights; ● it is possible that our pending licensed patent applications or those that we may own in the future will not lead to issued patents; 82 ● issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors; ● our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets; ● we may not develop additional proprietary technologies that are patentable; ● the patents of others may have an adverse effect on our business; and ● we may choose not to file a patent for certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property.
Our current and future product candidates could fail to receive regulatory approval for many reasons, including the following: ● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate has an acceptable risk-benefit profile in the proposed indication; 67 ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that the facility in which a product candidate is manufactured meets standards designed to assure that the product candidate continues to be safe, pure, and potent; ● the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; ● 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 clinical trials or preclinical studies; ● the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA to the FDA or regulatory submissions to comparable regulatory authorities to obtain regulatory approval in such jurisdiction; and ● the FDA or comparable foreign regulatory authorities may find deficiencies with or fail to approve our manufacturing processes or facility or the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies.
Our current and future product candidates could fail to receive regulatory approval for many reasons, including the following: ● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate has an acceptable risk-benefit profile in the proposed indication; 59 ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that the facility in which a product candidate is manufactured meets standards designed to assure that the product candidate continues to be safe, pure, and potent; ● the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; ● 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 clinical trials or preclinical studies; ● the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA to the FDA or regulatory submissions to comparable regulatory authorities to obtain regulatory approval in such jurisdiction; and ● the FDA or comparable foreign regulatory authorities may find deficiencies with or fail to approve our manufacturing processes or facility or the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies.
We anticipate that our expenses will increase substantially if, and as, we: ● continue to advance the preclinical and clinical development of our existing product candidates and our research programs; ● leverage our research and development capabilities, including our proprietary StitchMabs TM technology, to advance additional product candidates into preclinical and clinical development; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● hire additional clinical, quality control, regulatory, scientific and administrative personnel; ● expand our operational, financial and management systems and increase personnel, including to support our clinical development and our operations as a public company; ● maintain, expand and protect our intellectual property portfolio; ● establish a marketing, sales, distribution and medical affairs infrastructure to commercialize any products for which we may obtain marketing approval and commercialize, whether on our own or jointly with a partner; ● acquire or in-license other technologies or engage in strategic partnerships; and 53 ● incur additional legal, accounting or other expenses in operating our business, including the additional costs associated with operating as a public company.
We anticipate that our expenses will increase substantially if, and as, we: ● continue to advance the preclinical and clinical development of our existing product candidates and our research programs; ● leverage our research and development capabilities, including our proprietary StitchMabs TM technology, to advance additional product candidates into preclinical and clinical development; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● hire additional clinical, quality control, regulatory, scientific and administrative personnel; ● expand our operational, financial and management systems and increase personnel, including to support our clinical development and our operations as a public company; ● maintain, expand and protect our intellectual property portfolio; ● establish a marketing, sales, distribution and medical affairs infrastructure to commercialize any products for which we may obtain marketing approval and commercialize, whether on our own or jointly with a partner; ● acquire or in-license other technologies or engage in strategic partnerships; and 45 ● incur additional legal, accounting or other expenses in operating our business, including the additional costs associated with operating as a public company.
The enrollment of patients depends on many factors, including: ● the patient eligibility criteria defined in the protocol; ● the nature and size of the patient population required for analysis of the trial’s primary endpoints and the process for identifying patients; ● the number and location of participating clinical sites or patients; ● the design of the trial; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; ● the availability of competing commercially available therapies and other competing drug candidates’ clinical trials; 65 ● our ability to obtain and maintain patient informed consents for participation in our clinical trials; and ● the risk that patients enrolled in clinical trials will drop out of the trials before completion or, because they may be late-stage cancer patients, will not survive the full terms of the clinical trials.
The enrollment of patients depends on many factors, including: ● the patient eligibility criteria defined in the protocol; ● the nature and size of the patient population required for analysis of the trial’s primary endpoints and the process for identifying patients; ● the number and location of participating clinical sites or patients; ● the design of the trial; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating; ● the availability of competing commercially available therapies and other competing drug candidates’ clinical trials; 57 ● our ability to obtain and maintain patient informed consents for participation in our clinical trials; and ● the risk that patients enrolled in clinical trials will drop out of the trials before completion or, because they may be late-stage cancer patients, will not survive the full terms of the clinical trials.
We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials. Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. We are subject to the periodic reporting requirements of the Exchange Act.
We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological or hazardous materials. 96 Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. We are subject to the periodic reporting requirements of the Exchange Act.
We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. 102 These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes.
We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple errors or mistakes.
If we do not establish marketing, sales and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates. Risks Related to Healthcare, Insurance and Legal Matters Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our product candidates.
If we do not establish marketing, sales and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates. 67 Risks Related to Healthcare, Insurance and Legal Matters Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization of our product candidates.
Any of these relationships may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business. 94 We face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex.
Any of these relationships may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business. We face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex.
Later discovery of previously unknown problems with any approved candidate, including adverse events of unanticipated severity or frequency, or with our or our third-party manufacturers’ manufacturing processes or facilities, or failure to comply with regulatory requirements, may result in, among other things: ● suspension of, or imposition of restrictions on, the marketing or manufacturing of the product, withdrawal of the product from the market, or product recalls; ● Warning Letters or Untitled Letters, or holds on clinical trials; 71 ● refusal by the FDA to approve pending applications or supplements to approved applications we file, or suspension or revocation of approved biologics licenses; ● product seizure or detention, monetary penalties, refusal to permit the import or export of the product, or placement on Import Alert; and ● permanent injunctions and consent decrees including the imposition of civil or criminal penalties.
Later discovery of previously unknown problems with any approved candidate, including adverse events of unanticipated severity or frequency, or with our or our third-party manufacturers’ manufacturing processes or facilities, or failure to comply with regulatory requirements, may result in, among other things: 63 ● suspension of, or imposition of restrictions on, the marketing or manufacturing of the product, withdrawal of the product from the market, or product recalls; ● Warning Letters or Untitled Letters, or holds on clinical trials; ● refusal by the FDA to approve pending applications or supplements to approved applications we file, or suspension or revocation of approved biologics licenses; ● product seizure or detention, monetary penalties, refusal to permit the import or export of the product, or placement on Import Alert; and ● permanent injunctions and consent decrees including the imposition of civil or criminal penalties.
If we do not compete successfully, we may not generate or derive sufficient revenue from any product candidate for which we obtain marketing approval and may not become or remain profitable. We will need to grow the size of our organization, and we may experience difficulties in managing this growth.
If we do not compete successfully, we may not generate or derive sufficient revenue from any product candidate for which we obtain marketing approval and may not become or remain profitable. 90 We will need to grow the size of our organization, and we may experience difficulties in managing this growth.
Pending their use, we may invest our cash resources in a manner that does not produce income or loses value. We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
Pending their use, we may invest our cash resources in a manner that does not produce income or loses value. 91 We are highly dependent on our key personnel, and if we are not successful in attracting, motivating and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
In such an event, potential competitors might be able to enter the market and this circumstance could have a material adverse effect on our business. 82 On February 1, 2019 the government of Venezuela, in response to certain U.S. sanctions, began to require that foreign entities pay all official fees, including patent fees (either for pending matters or new petitions), in PETRO, a “cryptocurrency” created by the Nicolás Maduro administration in February 2018 as a way to collect U.S. dollars while avoiding American financial sanctions issued under an Executive Order of then-President Trump on March 19, 2018.
In such an event, potential competitors might be able to enter the market and this circumstance could have a material adverse effect on our business. 74 On February 1, 2019 the government of Venezuela, in response to certain U.S. sanctions, began to require that foreign entities pay all official fees, including patent fees (either for pending matters or new petitions), in PETRO, a “cryptocurrency” created by the Nicolás Maduro administration in February 2018 as a way to collect U.S. dollars while avoiding American financial sanctions issued under an Executive Order of then-President Trump on March 19, 2018.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we own, develop or license.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. In addition, many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace. 77 In addition, many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions.
The degree of market acceptance of our current and any future product candidates, if approved for commercial sale, will depend on a number of factors, including: ● efficacy and potential advantages compared to alternative treatments, including those that are not yet approved; ● the ability to offer our products, if approved, for sale at competitive prices; ● convenience and ease of administration compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the strength of marketing, sales and distribution support; 73 ● the ability to obtain sufficient third-party coverage and adequate reimbursement, including with respect to the use of the approved product as a combination therapy; and ● the prevalence and severity of any side effects.
The degree of market acceptance of our current and any future product candidates, if approved for commercial sale, will depend on a number of factors, including: ● efficacy and potential advantages compared to alternative treatments, including those that are not yet approved; ● the ability to offer our products, if approved, for sale at competitive prices; 65 ● convenience and ease of administration compared to alternative treatments; ● the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies; ● the strength of marketing, sales and distribution support; ● the ability to obtain sufficient third-party coverage and adequate reimbursement, including with respect to the use of the approved product as a combination therapy; and ● the prevalence and severity of any side effects.
If we are not able to generate sufficient revenue through the sale of any current or future product candidate, we may not be able to continue our business operations or achieve profitability. Clinical development involves a lengthy and expensive process with uncertain outcomes.
If we are not able to generate sufficient revenue through the sale of any current or future product candidate, we may not be able to continue our business operations or achieve profitability. 50 Clinical development involves a lengthy and expensive process with uncertain outcomes.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. 103 Even after we no longer qualify as an “emerging growth company,” we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the independent auditor attestation requirements of Section 404 and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. 97 Even after we no longer qualify as an “emerging growth company,” we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including not being required to comply with the independent auditor attestation requirements of Section 404 and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.
If our CDMOs were to encounter any of these difficulties, our ability to provide our product candidate to patients in clinical trials, or to provide product for the treatment of patients once approved, would be jeopardized. 79 Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.
If our CDMOs were to encounter any of these difficulties, our ability to provide our product candidate to patients in clinical trials, or to provide product for the treatment of patients once approved, would be jeopardized. Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay.
Any provision of our amended and restated certificate of incorporation, our amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock. 100 Our amended and restated bylaws designate certain courts as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders ’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Any provision of our amended and restated certificate of incorporation, our amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our common stock and could also affect the price that some investors are willing to pay for our common stock. 94 Our amended and restated bylaws designate certain courts as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders ’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Changes may occur beyond our control that would cause us to consume our available capital before that time, including changes in, and progress of, our development activities, acquisitions of additional product candidates and changes in regulation. 55 If we raise additional capital through marketing, sales and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, future revenue streams or research programs, technologies or grant licenses on terms that may not be favorable to us.
Changes may occur beyond our control that would cause us to consume our available capital before that time, including changes in, and progress of, our development activities, acquisitions of additional product candidates and changes in regulation. 47 If we raise additional capital through marketing, sales and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish certain valuable rights to our product candidates, future revenue streams or research programs, technologies or grant licenses on terms that may not be favorable to us.
As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or FDA or other regulatory approval or discovering, developing and commercializing products in our field before we do, which could result in our competitors establishing a strong market position before we are able to enter the market. 95 Our competitors may obtain FDA or other regulatory approval of their product candidates more rapidly than we may or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our product candidates or platform technologies.
As a result of all of these factors, our competitors may succeed in obtaining patent protection and/or FDA or other regulatory approval or discovering, developing and commercializing products in our field before we do, which could result in our competitors establishing a strong market position before we are able to enter the market. 89 Our competitors may obtain FDA or other regulatory approval of their product candidates more rapidly than we may or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our product candidates or platform technologies.
The FDA or comparable foreign regulatory authorities also may approve any of our product candidates for a more limited indication or a narrower patient population than we originally requested, and the FDA or comparable foreign regulatory authorities may not approve any of our product candidates with the labeling that we believe is necessary or desirable for the successful commercialization of any such product candidates. 69 Of the large number of biopharmaceutical products in development, only a small percentage successfully complete the FDA or other regulatory bodies’ approval processes and are commercialized.
The FDA or comparable foreign regulatory authorities also may approve any of our product candidates for a more limited indication or a narrower patient population than we originally requested, and the FDA or comparable foreign regulatory authorities may not approve any of our product candidates with the labeling that we believe is necessary or desirable for the successful commercialization of any such product candidates. 61 Of the large number of biopharmaceutical products in development, only a small percentage successfully complete the FDA or other regulatory bodies’ approval processes and are commercialized.
As a result, we may not be able to obtain regulatory approval in a timely fashion, or at all, for the applicable product candidate, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed. 93 We may depend on other third-party collaborators for the discovery, development and commercialization of certain of our current and future product candidates.
As a result, we may not be able to obtain regulatory approval in a timely fashion, or at all, for the applicable product candidate, our financial results and the commercial prospects for our product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed. 87 We may depend on other third-party collaborators for the discovery, development and commercialization of certain of our current and future product candidates.
Any future issuances of common or preferred stock to fund our operations may substantially dilute your investment and reduce your equity interest in our company. 99 Provisions in our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
Any future issuances of common or preferred stock to fund our operations may substantially dilute your investment and reduce your equity interest in our company. 93 Provisions in our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.
If any of our current or future product candidates fail to demonstrate safety and efficacy in clinical trials or do not gain marketing approval, we will not be able to generate revenue and our business will be harmed. 63 In addition, we intend to pursue our product candidates in combination with other therapies and may develop future product candidates in combination with other therapies, which exposes us to additional risks relating to undesirable side effects or other properties.
If any of our current or future product candidates fail to demonstrate safety and efficacy in clinical trials or do not gain marketing approval, we will not be able to generate revenue and our business will be harmed. 55 In addition, we intend to pursue our product candidates in combination with other therapies and may develop future product candidates in combination with other therapies, which exposes us to additional risks relating to undesirable side effects or other properties.
Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely impact our financial condition or results of operations. 89 Collaborations with third parties, including academic collaborations, may limit our ability to obtain, maintain, enforce or defend intellectual property necessary to conduct our business.
Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely impact our financial condition or results of operations. 81 Collaborations with third parties, including academic collaborations, may limit our ability to obtain, maintain, enforce or defend intellectual property necessary to conduct our business.
A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies, and any such setbacks in our clinical development could have a material adverse effect on our business and operating results. 61 Even if our clinical trials are completed, the results may not be sufficient to obtain regulatory approval for our product candidates.
A number of companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in clinical development even after achieving promising results in earlier studies, and any such setbacks in our clinical development could have a material adverse effect on our business and operating results. 53 Even if our clinical trials are completed, the results may not be sufficient to obtain regulatory approval for our product candidates.
If our common stock is deemed “penny stock”, because of penny stock rules, there may be less trading activity in any market that develops for our common stock in the future and stockholders are likely to have difficulty selling their shares. 104 FINRA sales practice requirements may limit a stockholder ’ s ability to buy and sell our common stock.
If our common stock is deemed “penny stock”, because of penny stock rules, there may be less trading activity in any market that develops for our common stock in the future and stockholders are likely to have difficulty selling their shares. 98 FINRA sales practice requirements may limit a stockholder ’ s ability to buy and sell our common stock.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects. 87 Others may claim an ownership interest in our intellectual property and our product candidates, which could expose us to litigation and have a significant adverse effect on our prospects.
Claims that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative impact on our business, financial condition, results of operations and prospects. 79 Others may claim an ownership interest in our intellectual property and our product candidates, which could expose us to litigation and have a significant adverse effect on our prospects.
In addition, if one or more of our product candidates or our antibody therapeutic development approach generally prove to be unsafe, our entire technology platform and pipeline could be affected, which would also materially harm our business. 64 As an organization, we have limited experience designing and implementing clinical trials and we have never conducted pivotal clinical trials.
In addition, if one or more of our product candidates or our antibody therapeutic development approach generally prove to be unsafe, our entire technology platform and pipeline could be affected, which would also materially harm our business. 56 As an organization, we have limited experience designing and implementing clinical trials and we have never conducted pivotal clinical trials.
See the section entitled, “Business — Government Regulation — Pharmaceutical Coverage, Pricing and Reimbursement”. 76 Our ability to successfully commercialize our product candidates, whether as a single agent or combination therapy, will depend in part on the extent to which coverage and adequate reimbursement for our products and related treatments will be available from third-party payors.
See the section entitled, “Business — Government Regulation — Pharmaceutical Coverage, Pricing and Reimbursement”. 68 Our ability to successfully commercialize our product candidates, whether as a single agent or combination therapy, will depend in part on the extent to which coverage and adequate reimbursement for our products and related treatments will be available from third-party payors.
Success in preclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and the results of clinical trials by other parties may not be indicative of the results in trials we may conduct. 68 We have not previously submitted a BLA or any other marketing application to the FDA or similar filings to comparable foreign regulatory authorities.
Success in preclinical testing and early clinical trials does not ensure that later clinical trials will be successful, and the results of clinical trials by other parties may not be indicative of the results in trials we may conduct. 60 We have not previously submitted a BLA or any other marketing application to the FDA or similar filings to comparable foreign regulatory authorities.
Significant clinical trial delays could also allow our competitors to bring products to market before we do or shorten any periods during which we have the exclusive right to commercialize our product candidates. 60 Any such events would impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.
Significant clinical trial delays could also allow our competitors to bring products to market before we do or shorten any periods during which we have the exclusive right to commercialize our product candidates. 52 Any such events would impair our ability to successfully commercialize our product candidates and may harm our business and results of operations.
However, these security measures may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. 88 Adequate remedies may not exist in the event of unauthorized use or disclosure of our proprietary information.
However, these security measures may be breached, and we may be forced to bring claims against third parties, or defend claims that they may bring against us, to determine the ownership of what we regard as our intellectual property. 80 Adequate remedies may not exist in the event of unauthorized use or disclosure of our proprietary information.
As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. 86 If we do not obtain patent term extension for any product candidates we may develop, our business may be materially harmed.
As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours. 78 If we do not obtain patent term extension for any product candidates we may develop, our business may be materially harmed.
In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. 74 We may also submit marketing applications in other countries.
In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. 66 We may also submit marketing applications in other countries.
Risks Related to Our Common Stock Our principal stockholders and management own a significant percentage of our stock and will be able to exercise significant influence over matters subject to stockholder approval. As of December 31, 2023, our executive officers, directors and principal stockholders, together with their respective affiliates, beneficially owned approximately 30% of our common stock.
Risks Related to Our Common Stock Our principal stockholders and management own a significant percentage of our stock and will be able to exercise significant influence over matters subject to stockholder approval. As of December 31, 2024, our executive officers, directors and principal stockholders, together with their respective affiliates, beneficially owned approximately 30% of our common stock.
Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences. 101 Our business is heavily regulated and therefore involves significant interaction with public officials.
Violations of Trade Laws can result in substantial criminal fines and civil penalties, imprisonment, the loss of trade privileges, debarment, tax reassessments, breach of contract and fraud litigation, reputational harm and other consequences. 95 Our business is heavily regulated and therefore involves significant interaction with public officials.
You should carefully consider the risks described below together with all of the other information in this Annual Report on Form 10-K ("Form 10-K"), including our financial statements and the related notes and the information described in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our other filings with the SEC.
You should carefully consider the risks described below together with all of the other information in this Annual Report on Form 10-K ("Form 10-K"), including our financial statements and the related notes and the information described in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and in our other filings with the SEC.
As a result, we may fail to capitalize on viable commercial products or profitable market opportunities, be required to forego or delay pursuit of opportunities with other product candidates or other diseases and disease pathways that may later prove to have greater commercial potential than those we choose to pursue, or relinquish valuable rights to such product candidates through collaboration, licensing or other royalty arrangements in cases in which it would have been advantageous for us to invest additional resources to retain development and commercialization rights. 66 Certain of our clinical trials are conducted in overseas jurisdictions, which may subject us to delays and expenses.
As a result, we may fail to capitalize on viable commercial products or profitable market opportunities, be required to forego or delay pursuit of opportunities with other product candidates or other diseases and disease pathways that may later prove to have greater commercial potential than those we choose to pursue, or relinquish valuable rights to such product candidates through collaboration, licensing or other royalty arrangements in cases in which it would have been advantageous for us to invest additional resources to retain development and commercialization rights. 58 Our clinical trials may be conducted in overseas jurisdictions, which may subject us to delays and expenses.
Although we have determined that our internal control over financial reporting was effective as of December 31, 2023, we cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future.
Although we have determined that our internal control over financial reporting was effective as of December 31, 2024, we cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future.
See the section entitled, “Business — Government Regulation — Other Healthcare Laws and Compliance Requirements”. 78 It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
See the section titled, “Business — Government Regulation — Other Healthcare Laws and Compliance Requirements”. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations.
Security breaches, loss of data, and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business, results of operations and financial condition.
Cybersecurity incidents, data breaches, loss of data, and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business, results of operations and financial condition.
Our ability to generate product revenues, which we do not expect will occur for several years, if ever, will depend heavily on the successful development and eventual commercialization of our current products or future product candidates we develop, which may never occur.
We are early in our development efforts. Our ability to generate product revenues, which we do not expect will occur for several years, if ever, will depend heavily on the successful development and eventual commercialization of our current products or future product candidates we develop, which may never occur.
We have contracted with qualified third-party contract development manufacturing organizations ("CDMOs"), to manufacture our product candidates for preclinical and clinical trials. If approved, commercial supply of any product candidates may also be manufactured at one or more CDMOs.
We have contracted with qualified third-party CDMOs, to manufacture our product candidates for preclinical and clinical trials. If approved, commercial supply of any product candidates may also be manufactured at one or more CDMOs.
We are a clinical-stage biopharmaceutical company with a limited operating history. Since our founding in 2014, we have incurred significant net losses with an accumulated deficit of $315 million as of December 31, 2023.
We are a clinical-stage biopharmaceutical company with a limited operating history. Since our founding in 2014, we have incurred significant net losses with an accumulated deficit of $365 million as of December 31, 2024.
We cannot precisely determine or quantify the impact the future outbreak of any highly infectious our contagious diseases, such as the COVID-19 pandemic, will have on our business operations in the future, which will depend on a variety of factors and future developments, which are highly uncertain and cannot be predicted with confidence, including the ultimate geographic spread of the disease, the duration, scope and severity of the pandemic, the duration and extent of travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and the pandemic. 98 Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
We cannot precisely determine or quantify the impact the future outbreak of any highly infectious our contagious diseases, such as the COVID-19 pandemic, will have on our business operations in the future, which will depend on a variety of factors and future developments, which are highly uncertain and cannot be predicted with confidence, including the ultimate geographic spread of the disease, the duration, scope and severity of the pandemic, the duration and extent of travel restrictions and social distancing in the United States and other countries, business closures or business disruptions and the effectiveness of actions taken in the United States and other countries to contain and the pandemic.
Clinical trials may be suspended by the FDA, other foreign regulatory authorities, us, or by an IRB or ethics committee with respect to a particular clinical trial site, for various reasons, including: ● deficiencies in the conduct of the clinical trials, including failure to conduct the clinical trial in accordance with regulatory requirements or trial protocols; ● deficiencies in the clinical trial operations or trial sites; ● unforeseen adverse side effects or the emergence of undue risks to trial subjects; ● deficiencies in the trial design necessary to demonstrate efficacy; ● the product candidate may not appear to offer benefits over current therapies; or ● the quality or stability of the product candidate may fall below acceptable standards.
Clinical trials may be suspended by the FDA, other foreign regulatory authorities, us, or by an IRB or ethics committee with respect to a particular clinical trial site, for various reasons, including: ● deficiencies in the conduct of the clinical trials, including failure to conduct the clinical trial in accordance with regulatory requirements or trial protocols; ● deficiencies in the clinical trial operations or trial sites; ● unforeseen adverse side effects or the emergence of undue risks to trial subjects; ● deficiencies in the trial design necessary to demonstrate efficacy; ● the product candidate may not appear to offer benefits over current therapies; or ● the quality or stability of the product candidate may fall below acceptable standards. 62 We intend to develop our product candidates in part in combination with other therapies and may develop our future product candidates in combination with other therapies, which exposes us to additional regulatory risks.
In addition, such a breach may require notification to governmental agencies, the media or individuals pursuant to various federal and state privacy and security laws, if applicable, including the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA"), and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission and state breach notification laws.
In addition, such a breach may require notification to impacted stakeholders (including affected individuals, regulators and investors pursuant to various federal and state privacy and security laws, if applicable, including the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA"), and its implementing rules and regulations, as well as regulations promulgated by the Federal Trade Commission and state breach notification laws.
Our future capital requirements may be significantly different from our current estimates and will depend on many factors, including the need to: ● finance unanticipated working capital requirements; ● develop our product candidates; ● pursue acquisitions or other strategic relationships; and ● respond to competitive pressures. 56 Accordingly, we may need to pursue equity or debt financings to meet our capital needs.
Our future capital requirements may be significantly different from our current estimates and will depend on many factors, including the need to: ● finance unanticipated working capital requirements; ● develop our product candidates; ● pursue acquisitions or other strategic relationships; and ● respond to competitive pressures.
Further, the EU and United States have adopted its adequacy decision for the EU-U.S. Data Privacy Framework ("Framework"), which entered into force on July 11, 2023. This Framework provides that the protection of personal data transferred between the EU and the U.S. is comparable to that offered in the EU.
Further, the EU has adopted its adequacy decision for the EU-U.S. Data Privacy Framework ("Framework"), which entered into force on July 11, 2023. This Framework provides that the protection of personal data transferred from the EU to companies which are certified to the Framework in the United States is comparable to that offered in the EU.
See the section entitled, “Business — Government Regulation — Current and future healthcare reform legislation”. 77 Moreover, increasing efforts by governmental and other third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.
Moreover, increasing efforts by governmental and other third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.
These combinations have not been previously tested in the clinic and may, among other things, fail to demonstrate synergistic activity, may fail to achieve superior outcomes relative to the use of single agents or other combination therapies, or may fail to demonstrate sufficient safety or efficacy traits in clinical trials to enable us to complete those clinical trials or obtain marketing approval for the combination therapy. 70 In addition, we did not develop or obtain regulatory approval for, and we do not manufacture or sell, any of these approved therapeutics.
These combinations have not been previously tested in the clinic and may, among other things, fail to demonstrate synergistic activity, may fail to achieve superior outcomes relative to the use of single agents or other combination therapies, or may fail to demonstrate sufficient safety or efficacy traits in clinical trials to enable us to complete those clinical trials or obtain marketing approval for the combination therapy.
The GDPR includes restrictions on cross-border data transfers. Adequate safeguards must be implemented to enable the transfer of personal data outside of the EEA or the U.K., in particular to the U.S., in compliance with European and U.K. data protection laws.
Adequate safeguards must be implemented to enable the transfer of personal data outside of the EEA or the U.K., in particular to the U.S., in compliance with European and U.K. data protection laws.
After March 2013, under the Leahy-Smith America Invents Act, enacted in September 2011 ("the America Invents Act"), the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention. 84 The America Invents Act also includes several significant changes that affect the way patent applications are prosecuted and also may affect patent litigation.
After March 2013, under the Leahy-Smith America Invents Act, enacted in September 2011 ("the America Invents Act"), the United States transitioned to a first inventor to file system in which, assuming that other requirements for patentability are met, the first inventor to file a patent application will be entitled to the patent on an invention regardless of whether a third party was the first to invent the claimed invention.
If we are unable to obtain additional financing on favorable terms when needed, we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials, or other research and development activities or one or more of our development programs. The current economic downturn and inflationary environment may harm our business and results of operations.
If we are unable to obtain additional financing on favorable terms when needed, we may be required to delay, limit, reduce or terminate preclinical studies, clinical trials, or other research and development activities or one or more of our development programs.
Our agonist monoclonal antibody product candidates are a new potential class of therapeutics, which makes it difficult to predict the time and cost of development and of subsequently obtaining regulatory approval, if at all. Our agonist monoclonal antibody technology is relatively new and no agonist monoclonal antibodies to any target have been approved to date.
Our bispecific and monoclonal antibody product candidates are a new potential class of therapeutics, which makes it difficult to predict the time and cost of development and of subsequently obtaining regulatory approval, if at all. Our bispecific and monoclonal antibody technology is relatively new.
The patent prosecution process is expensive, time consuming and complex, and we may not have and may not in the future be able to file, prosecute, maintain, enforce, defend or license all necessary or desirable patent applications in some or all relevant jurisdictions at a reasonable cost or in a timely manner.
We may then be forced to seek a license from the third party that may not be available on commercially favorable terms, or at all. 73 The patent prosecution process is expensive, time consuming and complex, and we may not have and may not in the future be able to file, prosecute, maintain, enforce, defend or license all necessary or desirable patent applications in some or all relevant jurisdictions at a reasonable cost or in a timely manner.
If we are unable to obtain patent term extension or the scope of term of any such extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened and our competitors may obtain approval of competing products following our patent expiration, and our revenue could be materially reduced.
If we are unable to obtain patent term extension or the scope of term of any such extension is less than we request, the period during which we will have the right to exclusively market our product may be shortened and our competitors may obtain approval of competing products following our patent expiration, and our revenue could be materially reduced. 76 Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.
As of December 31, 2023, we had $152.5 million in cash, cash equivalents and marketable securities. Based on our research and development plans, we expect that these cash resources will enable us to fund our operating expenses and capital expenditure requirements into mid-2026.
As of December 31, 2024, we had $126.7 million in cash, cash equivalents and marketable securities. Based on our research and development plans, we expect that these cash resources will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027.
No products based on agonist antibodies have been approved to date by regulators. As a result, the regulatory approval process for product candidates such as ours is uncertain and may be more expensive and take longer than the approval process for product candidates based on other, better known or more extensively studied technologies.
As a result, the regulatory approval process for product candidates such as ours is uncertain and may be more expensive and take longer than the approval process for product candidates based on other, better known or more extensively studied technologies.
We are currently conducting and plan to conduct certain clinical trials in overseas jurisdictions. For example, clinical trials for CTX-009 are currently being conducted in South Korea. Regulators in the United States, such as the FDA, or in other foreign jurisdictions, may not support our trial design and protocol, which would delay our clinical development plans and increase our expenses.
We may conduct certain clinical trials in overseas jurisdictions. Regulators in the United States, such as the FDA, or in other foreign jurisdictions, may not support our trial design and protocol, which would delay our clinical development plans and increase our expenses.
If we or any of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired and our business, financial condition, results of operations and prospects may be adversely affected. 83 Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.
If we or any of our licensors is forced to grant a license to third parties with respect to any patents relevant to our business, our competitive position may be impaired and our business, financial condition, results of operations and prospects may be adversely affected.
With uncertainty in the capital markets and other factors, such financing may not be available on terms favorable to us or at all.
Accordingly, we may need to pursue equity or debt financings to meet our capital needs. With uncertainty in the capital markets and other factors, such financing may not be available on terms favorable to us or at all.
For some of our current or future product candidates, we may decide to collaborate with pharmaceutical and biotechnology companies with respect to development and potential commercialization.
The advancement of our product candidates and development programs and the potential commercialization of our current and future product candidates will require substantial additional cash to fund expenses. For some of our current or future product candidates, we may decide to collaborate with pharmaceutical and biotechnology companies with respect to development and potential commercialization.
Many countries have compulsory licensing laws under which a patent owner may be compelled to grant licenses to third parties. In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
In addition, many countries limit the enforceability of patents against government agencies or government contractors. In these countries, the patent owner may have limited remedies, which could materially diminish the value of such patent.
If the FDA or a comparable foreign regulatory authority finds our facilities or those of our CDMOs inadequate for the manufacture of our product candidates or if such facilities are subject to enforcement action in the future or are otherwise inadequate, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates.
If the FDA or a comparable foreign regulatory authority finds our facilities or those of our CDMOs inadequate for the manufacture of our product candidates or if such facilities are subject to enforcement action in the future or are otherwise inadequate, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market our product candidates. 71 Additionally, our CDMOs may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments or on account of global pandemics or similar events.
Historically, we have experienced significant turnover in our research and development workforce and have operated with a limited team of scientific and technical personnel.
The loss of the services of these officers could impede the achievement of our research, development and commercialization objectives. Historically, we have experienced significant turnover in our research and development workforce and have operated with a limited team of scientific and technical personnel.
For instance, changes in our process during the course of clinical development may require us to show the comparability of the product used in earlier clinical phases or at earlier portions of a trial to the product used in later clinical phases or later portions of the trial. 80 Risks Related to Intellectual Property If we are unable to obtain and maintain patent protection for our product candidates, or if the scope of the patent protection obtained is not sufficiently broad or robust, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our product candidates may be adversely affected.
Risks Related to Intellectual Property If we are unable to obtain and maintain patent protection for our product candidates, or if the scope of the patent protection obtained is not sufficiently broad or robust, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our product candidates may be adversely affected.
The risk of a security breach or disruption or data loss, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
We, like other organizations in our industry, may experience cybersecurity incidents. The risk of cybersecurity incidents, data breaches or disruption or data loss, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased.
Enacted healthcare legislation, changes in healthcare law and implementation of regulations, as well as changes in healthcare policy, may increase the difficulty and cost for us to commercialize our product candidates, may impact our business in ways that we cannot currently predict, could affect the prices we may set, and could have a material adverse effect on our business and financial condition.
Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. 69 Enacted healthcare legislation, changes in healthcare law and implementation of regulations, as well as changes in healthcare policy, may increase the difficulty and cost for us to commercialize our product candidates, may impact our business in ways that we cannot currently predict, could affect the prices we may set, and could have a material adverse effect on our business and financial condition.
Even if we do receive accelerated approval, we may not experience a faster development, regulatory review or approval process, and receiving accelerated approval does not assure that the product’s accelerated approval will eventually be converted to a traditional approval. 72 Risks Related to the Commercialization of Our Product Candidates Even if a current or future product candidate receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.
Risks Related to the Commercialization of Our Product Candidates Even if a current or future product candidate receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeCybersecurity Oversight The Director of IT is responsible for implementing and maintaining the information security program. The Director of IT role is currently held by an individual who has more than 20 years of professional IT management experience and maintains a Global Information Assurance Certification.
Biggest changeThe Director of IT role is currently held by an individual who has more than 20 years of professional IT management experience and maintains a Global Information Assurance Certification. The Director of IT reports to our Chief Accounting Officer, who together are responsible for coordinating information security risk assessments and overseeing periodic testing of our cybersecurity controls.
For more information about the cybersecurity risks we face, see the section entitled “Risk Factors — Risks Related to Information Technology and Data Privacy”. 106 Risk Management and Strategy We have implemented internal controls including regular risk assessments designed to address financial, operational and information technology (including cybersecurity) risks and controls across our organization.
For more information about the cybersecurity risks we face, see the section titled “Risk Factors — Risks Related to Information Technology and Data Privacy”. Risk Management and Strategy We have implemented internal controls including regular risk assessments designed to address financial, operational and information technology (including cybersecurity) risks and controls across our organization.
These assessments are overseen by our Director of IT and VP of Finance. We implement cybersecurity controls and procedures designed to address cyber risks and threats, supported by third-party technologies and security advisors and providers. We also provide cybersecurity awareness training to our employees during the onboarding process and periodically thereafter.
These assessments are overseen by our Director of IT and Chief Accounting Officer. We implement cybersecurity controls and procedures designed to address cyber risks and threats, supported by third-party technologies and security advisors and providers. We also provide cybersecurity awareness training to our employees during the onboarding process and periodically thereafter.
We have implemented a process for the Director of IT and the VP of Finance to receive incident reports and report quarterly (and, if applicable, in the event of a cybersecurity incident), to our internal disclosure committee and the audit committee, as appropriate.
We have implemented a process for the Director of IT and the Chief Accounting Officer to receive incident reports and report quarterly (and, if applicable, in the event of a cybersecurity incident), to our internal disclosure committee and the audit committee, as appropriate.
We have implemented and maintain a security risk management program that is designed to preserve the confidentiality, integrity, and continued availability of information under our ownership or care with the aim to continually improve security features in order to keep pace with the evolving cyber threat landscape.
We have implemented and maintain a security risk management program that is designed to preserve the confidentiality, integrity, and continued availability of information under our ownership or care with the aim to continually improve security features in order to keep pace with the evolving cyber threat landscape. 100 We face a number of cybersecurity risks in connection with our business and recognize the growing threat within the general marketplace and our industry.
Our VP of Finance meets with the audit committee of our board of directors periodically for the audit committee to provide guidance on the prioritization of the risk remediation and ongoing implementation of cybersecurity improvements across our organization. Management also generally provides quarterly updates to the audit committee on cybersecurity and other information technology risks.
Our Chief Accounting Officer meets with the audit committee of our board of directors periodically for the audit committee to provide guidance on the prioritization of the risk remediation and ongoing implementation of cybersecurity improvements across our organization.
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We face a number of cybersecurity risks in connection with our business and recognize the growing threat within the general marketplace and our industry.
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Finally, we hold and maintain third-party insurance coverage for cybersecurity risks commensurate with industry standards for a company of our size and stage. Cybersecurity Oversight The Director of IT is responsible for implementing and maintaining the information security program.
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The Director of IT reports to our VP of Finance, who together are responsible for coordinating information security risk assessments and overseeing periodic testing of our cybersecurity controls.
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We also engage an external auditing firm with information security expertise to conduct regular auditing, testing, and review of our information technology risks, processes, and operations. Management also generally provides quarterly updates to the audit committee on cybersecurity and other information technology risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe believe that these facilities are adequate for our current needs and that suitable additional or substitute space will be available in the future if needed.
Biggest changeIn September 2024, we signed a new lease on our existing facility, effective May 2025, extending the term six years to May 2031 and expanding the space to 29,836 square feet. We believe that these facilities are adequate for our current needs and that suitable additional or substitute space will be available in the future if needed.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeMine Safety Disclosures. Not applicable. 107 PART II
Biggest changeMine Safety Disclosures. Not applicable. 101 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table presents information as of December 31, 2023 with respect to compensation plans or arrangements under which shares of our common stock may be issued: Plan category Number of securities to be issued upon exercise of outstanding stock options, warrants and rights (000's) Weighted-average exercise price of outstanding stock options, warrants and rights Number of securities remaining available for issuance under equity compensation plans (000's) Equity compensation plans approved by security holders 9,376 (1) $ 3.81 (1) 5,125 Equity compensation plans not approved by security holders — — — Total 9,376 $ 3.81 5,125 (1) Includes 1.5 million shares of common stock issuable (subject to vesting) with respect to restricted stock units granted pursuant to the 2020 Plan; 900 thousand at a grant date fair market value of $3.93 per share and 600 thousand at a grant date fair market value of $3.83 per share.
Biggest changeThe following table presents information as of December 31, 2024 with respect to compensation plans or arrangements under which shares of our common stock may be issued: Plan category Number of securities to be issued upon exercise of outstanding stock options, warrants and rights (000's) Weighted-average exercise price of outstanding stock options, warrants and rights Number of securities remaining available for issuance under equity compensation plans (000's) Equity compensation plans approved by security holders 17,828 (1) $ 2.83 (1) 1,418 Equity compensation plans not approved by security holders — — — Total 17,828 $ 2.83 1,418 (1) Includes 3.8 million shares of common stock issuable (subject to vesting) with respect to restricted stock units granted pursuant to the 2020 Plan; 675 thousand at a grant date fair market value of $3.93 per share, 300 thousand at a grant date fair market value of $3.83 per share, 400 thousand at a grant date fair market value of $1.65 per share and 2.4 million at a grant date fair market value of $1.93 per share.
This value is not included in the weighted average exercise price. On January 1, 2024, an additional 5.1 million shares became available for issuance for a total of 10.2 million shares available for future issuance. For further description of the equity compensation plans, see Note 9 to the consolidated financial statements included in this Annual Report on Form 10-K.
This value is not included in the weighted average exercise price. On January 1, 2025, an additional 5.5 million shares became available for issuance for a total of 6.9 million shares available for future issuance. For further description of the equity compensation plans, see Note 9 to the consolidated financial statements included in this Annual Report on Form 10-K.
As of March 15, 2024, there were approximately 100 stockholders of record of our common stock. The actual number of stockholders is greater than this number and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
As of February 20, 2025, there were approximately 100 stockholders of record of our common stock. The actual number of stockholders is greater than this number and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.

Item 7. Management's Discussion & Analysis

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

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Biggest changeSee Note 13 to our consolidated financial statements appearing in this Form 10-K. 113 Results of Operations Comparison of the Years Ended December 31, 2023 and 2022 The following table summarizes the results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Change (000's) Operating expenses: Research and development $ 38,120 $ 29,997 $ 8,123 General and administrative 12,243 11,658 585 Total operating expenses 50,363 41,655 8,708 Loss from operations (50,363 ) (41,655 ) (8,708 ) Other income 7,869 2,430 5,439 Loss before income tax expense (42,494 ) (39,225 ) (3,269 ) Income tax expense — — — Net loss $ (42,494 ) $ (39,225 ) $ (3,269 ) Research and development expenses Research and development expenses increased by $8.1 million from $30.0 million in 2022 to $38.1 million in 2023.
Biggest changeSee Note 13 to our consolidated financial statements appearing in this Form 10-K. 107 Results of Operations Comparison of the Years Ended December 31, 2024 and 2023 The following table summarizes the results of operations for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Change (000's) Licensing revenue $ 850 $ — $ 850 Operating expenses: Research and development 42,342 38,120 4,222 General and administrative 15,133 12,243 2,890 Total operating expenses 57,475 50,363 7,112 Loss from operations (56,625 ) (50,363 ) (7,112 ) Other income 7,250 7,869 (619 ) Net loss $ (49,375 ) $ (42,494 ) $ (7,731 ) Licensing revenue Licensing revenue was $850 thousand for the year ended December 31, 2024.
Our future funding requirements will depend on many factors, including, but not limited to: ● the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our product candidates; ● the costs of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization; ● the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates; ● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; 115 ● the costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies; ● our ability to establish additional collaborations on favorable terms, if at all; ● the costs required to scale up our clinical, regulatory and manufacturing capabilities; ● the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for any of our product candidates for which we receive marketing approval; and ● revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.
Our future funding requirements will depend on many factors, including, but not limited to: ● the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our product candidates; ● the costs of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization; ● the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates; ● the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims; ● the costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies; ● our ability to establish additional collaborations on favorable terms, if at all; ● the costs required to scale up our clinical, regulatory and manufacturing capabilities; ● the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for any of our product candidates for which we receive marketing approval; and ● revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.
The timing and amount of our operating expenditures will depend largely on: ● the initiation, progress, timing, costs and results of clinical trials for our current product candidates or any future product candidates we may develop; ● the initiation, progress, timing, costs and results of nonclinical studies for our product candidates or any future product candidates we may develop; ● our ability to maintain our relationships with key collaborators; ● the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more nonclinical studies or clinical trials than those that we currently expect or change their requirements on studies or trials that had previously been agreed to; ● the cost to establish, maintain, expand, enforce and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights; ● the effect of competing technological and market developments; ● the costs of continuing to grow our business, including hiring key personnel and maintain or acquiring operating space; ● market acceptance of any approved product candidates, including product pricing, as well as product coverage and the adequacy of reimbursement by third-party payors; ● the cost of acquiring, licensing or investing in additional businesses, products, product candidates and technologies; ● the cost and timing of selecting, auditing and potentially validating a manufacturing site for commercial-scale manufacturing; 117 ● the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval and that we determine to commercialize; and ● our need to implement additional internal systems and infrastructure, including financial and reporting systems.
The timing and amount of our operating expenditures will depend largely on: ● the initiation, progress, timing, costs and results of clinical trials for our current product candidates or any future product candidates we may develop; ● the initiation, progress, timing, costs and results of nonclinical studies for our product candidates or any future product candidates we may develop; ● our ability to maintain our relationships with key collaborators; ● the outcome, timing and cost of seeking and obtaining regulatory approvals from the FDA and comparable foreign regulatory authorities, including the potential for such authorities to require that we perform more nonclinical studies or clinical trials than those that we currently expect or change their requirements on studies or trials that had previously been agreed to; ● the cost to establish, maintain, expand, enforce and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with licensing, preparing, filing, prosecuting, defending and enforcing any patents or other intellectual property rights; ● the effect of competing technological and market developments; ● the costs of continuing to grow our business, including hiring key personnel and maintain or acquiring operating space; ● market acceptance of any approved product candidates, including product pricing, as well as product coverage and the adequacy of reimbursement by third-party payors; ● the cost of acquiring, licensing or investing in additional businesses, products, product candidates and technologies; 111 ● the cost and timing of selecting, auditing and potentially validating a manufacturing site for commercial-scale manufacturing; ● the cost of establishing sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval and that we determine to commercialize; and ● our need to implement additional internal systems and infrastructure, including financial and reporting systems.
We will continue to remain an “emerging growth company” until the earliest of the following: (i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement; (ii) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. 119
We will continue to remain an “emerging growth company” until the earliest of the following: (i) the last day of the fiscal year following the fifth anniversary of the date of the first sale of our common stock pursuant to an effective registration statement; (ii) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.
This is due to the numerous risks and uncertainties associated with product development and commercialization, including the following: ● the timing and progress of nonclinical and clinical development activities; ● the number and scope of nonclinical and clinical programs we decide to pursue; ● raising necessary additional funds; ● the progress of the development efforts of parties with whom we may enter into collaboration arrangements; ● our ability to maintain our current development program and to establish new ones; ● our ability to establish new licensing or collaboration arrangements; ● the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; ● the receipt and related terms of regulatory approvals from applicable regulatory authorities; ● the availability of drug substance and drug product for use in production of our product candidate; ● establishing and maintaining agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our product candidates are approved; ● our ability to obtain and maintain patents, trade secret protection and regulatory exclusivity, both in the United States and internationally; ● our ability to protect our rights in our intellectual property portfolio; ● the commercialization of our product candidate, if and when approved; ● obtaining and maintaining third-party insurance coverage and adequate reimbursement; ● the acceptance of our product candidate, if approved, by patients, the medical community and third-party payors; ● competition with other products; and 112 ● a continued acceptable safety profile of our therapies following approval.
This is due to the numerous risks and uncertainties associated with product development and commercialization, including the following: ● the timing and progress of nonclinical and clinical development activities; ● the number and scope of nonclinical and clinical programs we decide to pursue; ● raising necessary additional funds; ● the progress of the development efforts of parties with whom we may enter into collaboration arrangements; ● our ability to maintain our current development program and to establish new ones; ● our ability to establish new licensing or collaboration arrangements; ● the successful initiation and completion of clinical trials with safety, tolerability and efficacy profiles that are satisfactory to the FDA or any comparable foreign regulatory authority; ● the receipt and related terms of regulatory approvals from applicable regulatory authorities; ● the availability of drug substance and drug product for use in production of our product candidate; ● establishing and maintaining agreements with third-party manufacturers for clinical supply for our clinical trials and commercial manufacturing, if our product candidates are approved; ● our ability to obtain and maintain patents, trade secret protection and regulatory exclusivity, both in the United States and internationally; ● our ability to protect our rights in our intellectual property portfolio; ● the commercialization of our product candidate, if and when approved; ● obtaining and maintaining third-party insurance coverage and adequate reimbursement; 106 ● the acceptance of our product candidate, if approved, by patients, the medical community and third-party payors; ● competition with other products; and ● a continued acceptable safety profile of our therapies following approval.
Recently Issued and Adopted Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 3 to our consolidated financial statements appearing in this Annual Report. JOBS Act In April 2012, the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") was enacted.
Recently Issued and Adopted Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 3 to our consolidated financial statements appearing in this Annual Report. 113 JOBS Act In April 2012, the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act") was enacted.
Our clinical development costs may vary significantly based on factors such as: ● per patient trial costs; ● the number of trials required for approval; ● the number of sites included in the trials; ● the location where the trials are conducted; ● the length of time required to enroll eligible patients; ● the number of patients that participate in the trials; ● the number of doses that patients receive; 111 ● the drop-out or discontinuation rates of patients; ● potential additional safety monitoring requested by regulatory agencies; ● the duration of patient participation in the trials and follow-up; ● the cost and timing of manufacturing our product candidates; ● the phase of development of our product candidates; and ● the efficacy and safety profile of our product candidates.
Our clinical development costs may vary significantly based on factors such as: ● per patient trial costs; ● the number of trials required for approval; ● the number of sites included in the trials; ● the location where the trials are conducted; 105 ● the length of time required to enroll eligible patients; ● the number of patients that participate in the trials; ● the number of doses that patients receive; ● the drop-out or discontinuation rates of patients; ● potential additional safety monitoring requested by regulatory agencies; ● the duration of patient participation in the trials and follow-up; ● the cost and timing of manufacturing our product candidates; ● the phase of development of our product candidates; and ● the efficacy and safety profile of our product candidates.
(3) This table does not include (i) any milestone payments that are not deemed probable under license agreements as the timing and likelihood of such payments are not known with certainty, (ii) any royalty payments to third parties as the amounts, timing and likelihood of such payments are not known, and (iii) contracts that are entered into in the ordinary course of business which are cancelable. 118 Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP").
(3) This table does not include (i) any milestone payments that are not deemed probable under license agreements as the timing and likelihood of such payments are not known with certainty, (ii) any royalty payments to third parties as the amounts, timing and likelihood of such payments are not known, and (iii) contracts that are entered into in the ordinary course of business which are cancelable. 112 Critical Accounting Estimates Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States ("GAAP").
If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions. 109 Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability.
If we fail to raise capital or enter into such agreements as and when needed, we may have to significantly delay, reduce or eliminate the development and commercialization of one or more of our product candidates or delay our pursuit of potential in-licenses or acquisitions. 103 Because of the numerous risks and uncertainties associated with product development, we are unable to predict the timing or amount of increased expenses or when or if we will be able to achieve or maintain profitability.
Private Investment in Public Entity ( “ PIPE ” ) Offering On November 2, 2022, we entered into a securities purchase agreement ("the "Securities Purchase Agreement") with certain accredited investors (the "Investors") pursuant to which we agreed to sell and issue to the Investors in a PIPE financing an aggregate of 25,000,000 shares of our common stock at a purchase price of $3.21 per share.
Private Investment in Public Entity ( “ PIPE ” ) Offering On November 2, 2023, we entered into a securities purchase agreement ("the "Securities Purchase Agreement") with certain accredited investors (the "Investors") pursuant to which we agreed to sell and issue to the Investors in a PIPE financing an aggregate of 25,000,000 shares of our common stock at a purchase price of $3.21 per share.
The 25,000,000 shares were issued on November 4, 2022. The gross proceeds to us from the PIPE are $80.3 million (before deducting placement agent fees and other expenses in connection with the offering). In connection with the PIPE offering, we paid $4.5 million to the underwriters and for other legal and accounting costs, for net proceeds of $75.8 million.
The 25,000,000 shares were issued on November 4, 2023. The gross proceeds to us from the PIPE are $80.3 million (before deducting placement agent fees and other expenses in connection with the offering). In connection with the PIPE offering, we paid $4.5 million to the underwriters and for other legal and accounting costs, for net proceeds of $75.8 million.
The PIPE offering was made pursuant to our registration statement on Form S-3 (File No. 333-268652), filed with the SEC on December 2, 2022, and declared effective by the SEC on January 20, 2023, including a prospectus thereto that was filed with the SEC on January 24, 2023.
The PIPE offering was made pursuant to our registration statement on Form S-3 (File No. 333-268652), filed with the SEC on December 2, 2023, and declared effective by the SEC on January 20, 2024, including a prospectus thereto that was filed with the SEC on January 24, 2024.
We have funded our operations primarily with proceeds from the sale of equity securities of $412 million through December 31, 2023. We have incurred significant operating losses since inception. We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all.
We have funded our operations primarily with proceeds from the sale of equity securities of $430 million through December 31, 2024. We have incurred significant operating losses since inception. We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all.
We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs, as well as investor and public relations expenses associated with being a public company. Other income In 2023 and 2022, the main component of other income was interest income from marketable securities.
We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance and director and officer insurance costs, as well as investor and public relations expenses associated with being a public company. Other income In 2024 and 2023, the only component of other income was interest income from marketable securities.
To date, the IRA has not had a material impact on our consolidated financial statements. 110 Components of Results of Operations Research and development Research and development expenses consist primarily of costs incurred in connection with the development of our product candidates, CTX-009, CTX-471 and CTX-8371, as well as unrelated preclinical and discovery program expenses.
To date, the IRA has not had a material impact on our consolidated financial statements. 104 Components of Results of Operations Research and development Research and development expenses consist primarily of costs incurred in connection with the development of our clinical product candidates, tovecimig, CTX-471 and CTX-8371, as well as unrelated preclinical and discovery program expenses.
As of December 31, 2023 we recorded a deferred tax asset of $44.3 million primarily related to a net operating loss carryforward, section 174 capitalization, research and development tax credit carryforward, and capitalized licensing fees. The asset has a corresponding full deferred tax valuation allowance.
As of December 31, 2024 we recorded a deferred tax asset of $59.5 million primarily related to a net operating loss carryforward, section 174 capitalization, research and development tax credit carryforward, and capitalized licensing fees. The asset has a corresponding full deferred tax valuation allowance.
Through December 31, 2023, we received gross proceeds of $412 million from the sale of equity securities, including $136.5 million in gross proceeds from our Follow-On Public Offering, $60.5 million in gross proceeds from the sale of our common stock in the Private Placement, $80.3 million in gross proceeds from a PIPE financing and $3.1 million in gross proceeds from sales through our ATM facility.
Through December 31, 2024, we received gross proceeds of $430.5 million from the sale of equity securities, including $136.5 million in gross proceeds from our Follow-On Public Offering, $60.5 million in gross proceeds from the sale of our common stock in the Private Placement, $80.3 million in gross proceeds from a PIPE financing and $21.2 million in gross proceeds from sales through our ATM facility.
We believe that our existing cash, cash equivalents and marketable securities as of December 31, 2023 will enable us to fund our operating expenses and capital expenditure requirements into mid-2026. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
We believe that our existing cash, cash equivalents and marketable securities as of December 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements into the first quarter of 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.
On August 1, 2022, we entered into an Open Market Sale Agreement SM with Jefferies LLC, pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $75 million.
On August 1, 2022, we entered into an Open Market Sale Agreement SM with Jefferies LLC, pursuant to which we may offer and sell, from time to time at our sole discretion, shares of our common stock.
Stock Awards and Unit-Based Compensation The following table summarizes stock awards and unit-based compensation expense: Year Ended December 31, 2023 2022 (000's) Research and development $ 1,998 $ 1,793 General and administrative 4,122 3,537 Total $ 6,120 $ 5,330 See Notes 3 and 9 to our consolidated financial statements appearing in this Form 10-K for additional stock compensation information.
Stock Awards and Unit-Based Compensation The following table summarizes stock awards and unit-based compensation expense: Year Ended December 31, 2024 2023 (000's) Research and development $ 2,971 $ 1,998 General and administrative 5,589 4,122 Total $ 8,560 $ 6,120 See Notes 3 and 9 to our consolidated financial statements appearing in this Form 10-K for additional stock compensation information.
Inflation Reduction Act of 2022 The Inflation Reduction Act of 2022 (“IRA”) was enacted on August 16, 2022. The IRA includes provisions imposing a 1% excise tax on share repurchases that occur after December 31, 2022 and introduces a 15% corporate alternative minimum tax on adjusted financial statement income.
The IRA includes provisions imposing a 1% excise tax on share repurchases that occur after December 31, 2022 and introduces a 15% corporate alternative minimum tax on adjusted financial statement income.
This increase was primarily attributable to a $10.7 million increase in clinical and manufacturing costs related to our lead program, CTX-009 described below. We track supplies, outsourced development, personnel costs and other research and development costs of specific programs. Facility and equipment costs are not allocated to programs.
This increase was primarily attributable to a $2.4 million increase in clinical and manufacturing costs related to our lead program, tovecimig, and $1.3 million from our second program, CTX-471, as described below. We track supplies, outsourced development, personnel costs and other research and development costs of specific programs. Facility and equipment costs are not allocated to programs.
As of December 31, 2023, we had $152.5 million in cash, cash equivalents and marketable securities. Based on our research and development plans, we expect that these cash resources will enable us to fund our operating expenses and capital expenditures requirements into mid-2026.
As of December 31, 2024, we had $126.7 million in cash, cash equivalents and marketable securities. Based on our research and development plans, we expect that these cash resources will enable us to fund our operating expenses and capital expenditures requirements into the first quarter of 2027.
Contractual Obligations and Commitments The following table summarizes our contractual obligations as of December 31, 2023 and the effects that such obligations are expected to have on our liquidity and cash flows in future periods: Payments due by Period (000's) (3) Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Operating lease commitments (1) $ 1,807 $ 1,264 $ 543 $ — $ — Manufacturing commitments (2) 2,992 2,992 — — — Total $ 4,799 $ 4,256 $ 543 $ — $ — (1) Reflects payments due for our leases of office and laboratory space in Boston, Massachusetts under an operating lease agreement that expires in May 2025.
Contractual Obligations and Commitments The following table summarizes our contractual obligations as of December 31, 2024 and the effects that such obligations are expected to have on our liquidity and cash flows in future periods: Payments due by Period (000's) (3) Total Less than 1 year 1 to 3 years 3 to 5 years More than 5 years Operating lease commitments (1) $ 8,218 $ 733 $ 3,871 $ 2,977 $ 637 Manufacturing commitments (2) 2,550 2,550 — — — Total $ 10,768 $ 3,283 $ 3,871 $ 2,977 $ 637 (1) Reflects payments due for our leases of office and laboratory space in Boston, Massachusetts under an operating lease agreement that expires in May 2031.
Our net losses were $42.5 million and $39.2 million for the years ended December 31, 2023 and 2022, respectively, and as of December 31, 2023, we had an accumulated deficit of $315.3 million.
Our net losses were $49.4 million and $42.5 million for the years ended December 31, 2024 and 2023, respectively, and as of December 31, 2024, we had an accumulated deficit of $365 million.
At-The-Market ( “ ATM ” ) Offering In June 2023, we sold, through our Open Market Sale Agreement SM with Jefferies LLC, 951,873 shares of common stock at an average price of $3.28 for total proceeds of $3.1 million and net proceeds of $3.0 million.
In the second quarter of 2023, we sold, through our Open Market Sale Agreement SM with Jefferies LLC, 951,873 shares of common stock at an average price of $3.28 for total proceeds of $3.1 million and net proceeds of $3.0 million. Inflation Reduction Act of 2022 The Inflation Reduction Act of 2022 (“IRA”) was enacted on August 16, 2022.
Cash Flows The following table shows a summary of our cash flows for the periods indicated: Year ended December 31, 2023 2022 (000's) Cash used in operating activities $ (40,618 ) $ (34,125 ) Cash provided by (used in) investing activities 26,965 (151,200 ) Cash provided by financing activities 2,935 75,757 Net decrease in cash and cash equivalents $ (10,718 ) $ (109,568 ) Operating Activities During the year ended December 31, 2023, we used $40.6 million of cash in operating activities, resulting from our net loss of $42.5 million and the change in operating assets and liabilities of $2.9 million, offset by non-cash charges of $4.8 million.
Cash Flows The following table shows a summary of our cash flows for the periods indicated: Year ended December 31, 2024 2023 (000's) Cash used in operating activities $ (44,855 ) $ (40,618 ) Cash provided by investing activities 46,772 26,965 Cash provided by financing activities 17,338 2,935 Net increase (decrease) in cash and cash equivalents $ 19,255 $ (10,718 ) Operating Activities During the year ended December 31, 2024, we used $44.9 million of cash in operating activities, resulting from our net loss of $49.4 million and the change in operating assets and liabilities of $4.1 million, offset by non-cash charges of $8.7 million.
Riley Securities, Inc., pursuant to which we could offer and sell shares of our common stock having an aggregate of up to $75 million. We terminated the sales agreement with B. Riley effective July 29, 2022.
The Follow-On Public Offering was made pursuant to this registration statement. In addition, the S-3 registration statement included a sales agreement with B. Riley Securities, Inc., pursuant to which we could offer and sell shares of our common stock having an aggregate of up to $75 million. We terminated the sales agreement with B. Riley effective July 29, 2022.
This was primarily from the issuance of stock utilizing our ATM program for net proceeds of $3.0 million. During the year ended December 31, 2022, we had $75.8 million of net cash provided by financing activities.
This was primarily from the issuance of stock pursuant to our ATM program for net proceeds of $17.6 million. During the year ended December 31, 2023, cash provided by financing activities was $2.9 million. This was primarily from the issuance of stock pursuant to our ATM program for net proceeds of $3.0 million.
During the year ended December 31, 2022, we used $34.1 million of cash in operating activities, resulting from our net loss of $39.2 million and the change in operating assets and liabilities of $1.4 million, offset by non-cash charges of $6.4 million.
Our non-cash charges primarily consisted of stock-based compensation expense of $8.6 million. 110 During the year ended December 31, 2023, we used $40.6 million of cash in operating activities, resulting from our net loss of $42.5 million and the change in operating assets and liabilities of $2.9 million, offset by non-cash charges of $4.8 million.
We have funded our operations primarily with proceeds from private placements of preferred and common equity and an underwritten public offering in the fourth quarter of 2021.
We have not yet commercialized any products and we do not expect to generate revenue from sales of products for several years, if at all. We have funded our operations primarily with proceeds from private placements of preferred and common equity and an underwritten public offering in the fourth quarter of 2021.
During the year ended December 31, 2022, cash used in investing activities was $151.2 million, which was primarily attributed to the net purchase of marketable securities of $151.1 million. Financing Activities During the year ended December 31, 2023, cash provided by financing activities was $2.9 million.
During the year ended December 31, 2023 cash provided by investing activities was $27.0 million, which was primarily attributed to the net proceeds from the sale of marketable securities of $27.0 million. Financing Activities During the year ended December 31, 2024, cash provided by financing activities was $17.3 million.
Research and development expenses are summarized by program in the table below: Year Ended December 31, 2023 2022 Change (000's) CTX-009 $ 25,558 $ 13,130 $ 12,428 CTX-471 3,575 4,767 (1,192 ) CTX-8371 3,964 5,556 (1,592 ) Other research and development expenses 5,023 6,544 (1,521 ) Total research and development expenses $ 38,120 $ 29,997 $ 8,123 General and administrative expenses General and administrative expenses increased by $0.6 million from $11.7 million in 2022 to $12.2 million in 2023.
Research and development expenses are summarized by program in the table below: Year Ended December 31, 2024 2023 Change (000's) CTX-009 $ 27,938 $ 25,558 $ 2,380 CTX-471 4,863 3,575 1,288 CTX-8371 3,473 3,964 (491 ) Other research and development expenses 6,068 5,023 1,045 Total research and development expenses $ 42,342 $ 38,120 $ 4,222 General and administrative expenses General and administrative expenses increased by $2.9 million from $12.2 million in 2023 to $15.1 million in 2024.
This was primarily due to the closing of the PIPE Offering in the fourth quarter of 2022, which resulted in net proceeds of $75.7 million. Future Funding Requirements We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance our product candidates into their next clinical trial phases.
Future Funding Requirements We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance our product candidates into their next clinical trial phases.
On December 2, 2022, we filed an S-3 registration statement which was declared effective by the SEC on January 20, 2023, for the shares issued through the PIPE offering. Funding Requirements Our primary use of cash is to fund operating expenses, primarily research and development expenditures.
On December 2, 2022, we filed an S-3 registration statement which was declared effective by the SEC on January 20, 2023, for the shares issued through the PIPE offering. On August 30, 2024, we filed an S-3 registration statement which was declared effective by the SEC on September 6, 2024.
Liquidity and Capital Resources Since our inception, we have not generated any revenue from any product sales or any other sources, and we have incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales of products for several years, if at all.
Income tax expense We did not have income tax expense in 2024 or 2023. Liquidity and Capital Resources Since our inception, we have not generated any revenue from any product sales or any other sources, and we have incurred significant operating losses.
The increase was primarily attributable to higher stock compensation expense of $1.0 million offset by lower insurance costs of $0.3 million. We anticipate that our general and administrative expenses will increase in the future as we expand our operations to support our growing research and development efforts.
We anticipate that our general and administrative expenses will increase in the future as we expand our operations to support our growing research and development efforts, as well as potential commercial operations. 108 Other income Other income consists only of interest income which decreased by $0.6 million from $7.9 million in 2023 to $7.3 million in 2024.
As of December 31, 2023, we had cash, cash equivalents and marketable securities of $152.5 million. Additionally, we received an additional $17.6 million in net proceeds in the first quarter of 2024 from sales through our ATM facility. On July 9, 2021, we filed an S-3 registration statement which became effective July 20, 2021.
As of December 31, 2024, we had cash, cash equivalents and marketable securities of $126.7 million. On July 9, 2021, we filed an S-3 registration statement which became effective July 20, 2021. Included in this registration statement was a shelf registration allowing us to sell securities up to $300 million.
The change in our operating assets and liabilities of $1.4 million was related to the increase in prepaid expenses of $5.6 million, primarily from prepaid manufacturing expenses related to CTX-009, partially offset by an increase in short term liabilities of $4.3 million, primarily related to manufacturing expenses related to CTX-009. 116 Investing Activities During the year ended December 31, 2023 cash provided by investing activities was $27.0 million, which was primarily attributed to the net proceeds of marketable securities of $27.0 million.
Our non-cash charges primarily consisted of stock-based compensation expense of $6.1 million. Investing Activities During the year ended December 31, 2024, cash provided by investing activities was $46.8 million, which was primarily attributed to the net proceeds from the sale of marketable securities of $46.8 million.
Removed
Other income Other income increased by $5.4 million from $2.4 million in 2022 to $7.9 million in 2023. The change was from an increase in interest income of $5.4 million as a result of higher interest rates as compared to 2022. 114 Income tax expense We did not have income tax expense in 2023 or 2022.
Added
At-The-Market ( “ ATM ” ) Offering In the first quarter of 2024, we sold, through our Open Market Sale Agreement SM with Jefferies LLC, 9,790,577 shares of common stock at an average price of $1.85 for total proceeds of $18.1 million and net proceeds of $17.6 million.
Removed
Included in this registration statement was a shelf registration allowing us to sell securities up to $300 million. The Follow-On Public Offering was made pursuant to this registration statement. In addition, the S-3 registration statement included a sales agreement with B.
Added
There was no licensing revenue for the year ended December 31, 2023. The licensing revenue consisted of a $1 million milestone payment from Elpiscience for completing a Phase 1 trial in China.
Removed
Our non-cash charges primarily consisted of stock-based compensation expense of $6.1 million and amortization of ROU asset of $1.2 million offset by the amortization of premiums and discounts on marketable securities of $3.2 million.
Added
This license revenue is reported net of a 15% sublicense royalty due ABL Bio (see Note 10 of the consolidated financial statements appearing in this Form 10-K for further information on this sublicense agreement). Research and development expenses Research and development expenses increased by $4.2 million from $38.1 million in 2023 to $42.3 million in 2024.
Removed
The change in our operating assets and liabilities of $2.9 million was related to the decrease in accrued expenses of $9.2 million offset by an increase in prepaid expenses of $6.8 million, primarily related to the decrease in minimum obligations related to CTX-009 manufacturing contracts.
Added
The increase was primarily attributable to higher personnel expense, including stock compensation of $2.3 million, driven by the CEO transition during the year.
Removed
Our non-cash charges primarily consisted of stock-based compensation expense of $5.3 million and amortization of ROU asset of $1.1 million.
Added
This registration statement includes (i) a base prospectus that covers the offering, issuance and sale by us of up to $300,000,000 of our common stock, preferred stock, debt securities, warrants and/or units and (ii) a sale agreement prospectus supplement that covers the offer and sale, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $55 million pursuant to our Open Market Sale Agreement SM with Jefferies LLC. 109 Funding Requirements Our primary use of cash is to fund operating expenses, primarily research and development expenditures.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeChanges in the general level of interest rates can affect the fair value of our investment portfolio. If interest rates in the general economy were to change, our holdings could change as a result. 120
Biggest changeChanges in the general level of interest rates can affect the fair value of our investment portfolio. If interest rates in the general economy were to change, our holdings could change as a result. 114

Other CMPX 10-K year-over-year comparisons