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What changed in Cue Biopharma, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Cue Biopharma, 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.

+696 added−640 removedSource: 10-K (2025-03-31) vs 10-K (2024-03-28)

Top changes in Cue Biopharma, Inc.'s 2024 10-K

696 paragraphs added · 640 removed · 395 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

138 edited+170 added−143 removed305 unchanged
Biggest changeIn addition, any issued patents may be contested, circumvented, found unenforceable or invalid, and we may not be able to successfully enforce our patent rights against third parties. No assurance can be given that others will not independently develop a similar or competing technology or design around any patents that may be issued to us.
Biggest changeNo assurances can be given that any of our patent applications will result in the issuance of a patent or that the examination process will not require us to narrow our claims. In addition, any issued patents may be contested, circumvented, found unenforceable or invalid, and we may not be able to successfully enforce our patent rights against third parties.
Competition While we believe that our drug product candidates, technology, knowledge and experience provide us with significant competitive advantages, we face competition from established and emerging pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions, among others, who may have drug product candidates in further stages of development than ours.
While we believe that our drug product candidates, technology, knowledge and experience provide us with significant competitive advantages, we face competition from established and emerging pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions, among others, who may have drug product candidates in further stages of development than ours.
An IRB must operate in compliance with FDA regulations. The FDA, IRB, or the clinical trial sponsor may suspend or discontinue a clinical trial at any time for various reasons, including a finding that the clinical trial is not being conducted in accordance with FDA requirements or the subjects or patients are being exposed to an unacceptable health risk.
An IRB must operate in compliance with FDA regulations. The IRB or the clinical trial sponsor may suspend or discontinue a clinical trial at any time for various reasons, including a finding that the clinical trial is not being conducted in accordance with FDA requirements or the subjects or patients are being exposed to an unacceptable health risk.
Department of Justice, or the Office of the Inspector General of the Department of the HHS, as well as state authorities. This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products.
Department of Justice, or the Office of the Inspector General of HHS, as well as state authorities. This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products.
Biosimilars and Exclusivity The 2010 Patient Protection and Affordable Care Act, which was signed into law in March 2010, included a subtitle called the Biologics Price Competition and Innovation Act of 2009, or the BPCIA. The BPCIA established a regulatory scheme authorizing the FDA to approve biosimilars and interchangeable biosimilars.
Biosimilars and Regulatory Exclusivity The 2010 Patient Protection and Affordable Care Act, which was signed into law in March 2010, included a subtitle called the Biologics Price Competition and Innovation Act of 2009, or the BPCIA. The BPCIA established a regulatory scheme authorizing the FDA to approve biosimilars and interchangeable biosimilars.
Restrictions under applicable federal and state healthcare laws and regulations, include the following: • the U.S. federal Anti‑Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; • the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious, or fraudulent or knowingly making, using, or causing to made or used a false record or statement to avoid, decrease, or conceal an obligation to pay money to the federal government; • the federal civil monetary penalty and false statement laws and regulations relating to pricing and submission of pricing information for government programs, including penalties for knowingly and intentionally overcharging 340b eligible entities and the submission of false or fraudulent pricing information to government entities; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information; • the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for health care benefits, items or services; • the Foreign Corrupt Practices Act, which prohibits companies and their intermediaries from making, or offering or promising to make improper payments to non-U.S. officials for the purpose of obtaining or retaining business 43 or otherwise seeking favorable treatment; • the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, or PPACA, as amended by the Health Care Education Reconciliation Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within HHS information related to payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti‑kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non‑governmental third‑party payors, including private insurers.
Restrictions under applicable federal and state healthcare laws and regulations, include the following: • the U.S. federal Anti‑Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any 41 good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; • the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious, or fraudulent or knowingly making, using, or causing to made or used a false record or statement to avoid, decrease, or conceal an obligation to pay money to the federal government; • the federal civil monetary penalty and false statement laws and regulations relating to pricing and submission of pricing information for government programs, including penalties for knowingly and intentionally overcharging 340b eligible entities and the submission of false or fraudulent pricing information to government entities; • the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information; • the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for health care benefits, items or services; • the Foreign Corrupt Practices Act, which prohibits companies and their intermediaries from making, or offering or promising to make improper payments to non-U.S. officials for the purpose of obtaining or retaining business or otherwise seeking favorable treatment; • the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, or PPACA, as amended by the Health Care Education Reconciliation Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within HHS information related to payments and other transfers of value made by that entity to physicians, other healthcare providers and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and • analogous state and foreign laws and regulations, such as state anti‑kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non‑governmental third‑party payors, including private insurers.
Under the Einstein License, we will be obligated to make royalty payments to Einstein, with respect to certain Licensed Products, for the longer of 15 years from the first sale of such products in each country or for the duration of any market exclusivity period granted by a regulatory agency for such product and, with respect to certain Licensed Products sold by sublicensees, the longer of 10 years from the first sale of such products in each country or for so long as the sublicensee agrees to pay royalties on such products.
Under the Einstein License, we will be obligated to make royalty payments to Einstein, with respect to certain Licensed Products, for the 16 longer of 15 years from the first sale of such products in each country or for the duration of any market exclusivity period granted by a regulatory agency for such product and, with respect to certain Licensed Products sold by sublicensees, the longer of 10 years from the first sale of such products in each country or for so long as the sublicensee agrees to pay royalties on such products.
The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable 32 products. There have been recent government proposals to reduce the 12-year reference product exclusivity period, but none has been enacted to date. At the same time, since passage of the BPCIA, many states have passed laws or amendments to laws, which address pharmacy practices involving biosimilar products.
The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. There have been recent government proposals to reduce the 12-year reference product exclusivity period, but none has been enacted to date. At the same time, since passage of the BPCIA, many states have passed laws or amendments to laws, which address pharmacy practices involving biosimilar products.
The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing 39 information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other trials or animal or in vitro testing that suggest a significant risk in humans exposed to the product; and any clinically important increase in the occurrence of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.
In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other trials or animal or in vitro testing that 23 suggest a significant risk in humans exposed to the product; and any clinically important increase in the occurrence of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.
Those criteria include whether: the investigational product is likely to demonstrate substantial improvements over available therapy; the study design is straight forward, as determined by the review division and the OCE; the endpoints can be easily interpreted. Applications with chemistry, manufacturing and control formulation changes and supplements with 29 pharmacology/toxicology data are excluded from RTOR.
Those criteria include whether: the investigational product is likely to demonstrate substantial improvements over available therapy; the study design is straight forward, as determined by the review division and the OCE; the endpoints can be easily interpreted. Applications with chemistry, manufacturing and control formulation changes and supplements with pharmacology/toxicology data are excluded from RTOR.
Approval of Companion Diagnostic Devices In the European Union, medical devices such as companion diagnostics must comply with the General Safety and Performance Requirements, or SPRs, detailed in Annex I of the EU Medical Devices Regulation (Regulation (EU) 2017/745), or MDR, which came into force on May 26, 2021 and replaced the previously applicable EU Medical Devices Directive (Council Directive 93/42/EEC).
Approval of Companion Diagnostic Devices 38 In the European Union, medical devices such as companion diagnostics must comply with the General Safety and Performance Requirements, or SPRs, detailed in Annex I of the EU Medical Devices Regulation (Regulation (EU) 2017/745), or MDR, which came into force on May 26, 2021 and replaced the previously applicable EU Medical Devices Directive (Council Directive 93/42/EEC).
In September 2021, the FDA published final regulations which describe the types of evidence that the agency will consider in determining the intended use of a biologic. If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the U.S.
In September 2021, the FDA published final regulations which describe the types of evidence that the agency will consider in determining the intended use of a biologic. 29 If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the U.S.
Regulation and Procedures Governing Approval of Medicinal Products in the European Union 35 In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products.
Regulation and Procedures Governing Approval of Medicinal Products in the European Union In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products.
An SPC may extend the term of a patent for up to five years after its originally scheduled expiration date and can provide up to a maximum of fifteen years of 38 marketing exclusivity for a drug. These periods can be extended for six additional months if pediatric exclusivity is obtained, which is described in detail below.
An SPC may extend the term of a patent for up to five years after its originally scheduled expiration date and can provide up to a maximum of fifteen years of marketing exclusivity for a drug. These periods can be extended for six additional months if pediatric exclusivity is obtained, which is described in detail below.
FDA aims to complete its review of priority review applications within six months as opposed to 10 months for standard review. • Accelerated approval. Biologic products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval.
The FDA aims to complete its review of priority review applications within six months as opposed to 10 months for standard review. • Accelerated approval. Biologic products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval.
Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such product containing the sponsor’s own preclinical data and data from adequate and well‑controlled clinical trials to demonstrate the safety, purity, and potency of their product.
Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such product containing the 31 sponsor’s own preclinical data and data from adequate and well‑controlled clinical trials to demonstrate the safety, purity, and potency of their product.
It involves a rigorous premarket review during which the sponsor must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling. PMA applications are subject to an application fee.
It involves a rigorous premarket review during which the sponsor must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its 32 components regarding, among other things, device design, manufacturing and labeling. PMA applications are subject to an application fee.
Sponsors that receive a CRL may submit to the FDA information that represents a complete response to the issues identified by the FDA. Such resubmissions are classified under PDUFA as either Class 1 or 27 Class 2. The classification of a resubmission is based on the information submitted by a sponsor in response to an action letter.
Sponsors that receive a CRL may submit to the FDA information that represents a complete response to the issues identified by the FDA. Such resubmissions are classified under PDUFA as either Class 1 or Class 2. The classification of a resubmission is based on the information submitted by a sponsor in response to an action letter.
The conduct of such a clinical trial could be expensive and result in delays in our commercialization efforts. 42 In the European Union, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed.
The conduct of such a clinical trial could be expensive and result in delays in our commercialization efforts. In the European Union, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed.
Oncology Competition We compete with other companies working to develop cytokines as cancer immunotherapies, as well as those developing other immunotherapeutic modalities, including monoclonal antibodies, bi-specific antibodies, antibody-drug conjugates, cell therapies, oncolytic viruses, and vaccines with application in treating patients living with cancer.
Oncology Competition 18 We compete with other companies working to develop cytokines as cancer immunotherapies, as well as those developing other immunotherapeutic modalities, including monoclonal antibodies, bi-specific antibodies, antibody-drug conjugates, cell therapies, oncolytic viruses, and vaccines with application in treating patients living with cancer.
In December 2022, with the passage of the Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
In December 2022, with the passage of the Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan, or DAP, for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
Delaying, denying, limiting, or refusing inspection by the FDA may lead to a product being deemed to be adulterated. 26 Changes to the manufacturing process, specifications or container closure system for an approved product are strictly regulated and often require prior FDA approval before being implemented.
Delaying, denying, limiting, or refusing inspection by the FDA may lead to a product being deemed to be adulterated. Changes to the manufacturing process, specifications or container closure system for an approved product are strictly regulated and often require prior FDA approval before being implemented.
Further, each clinical trial must be reviewed and approved by an IRB either centrally or individually at each institution at which the clinical trial will be conducted. The IRB will consider, among other things, clinical trial design, patient informed consent, ethical factors, the safety of human subjects, and the possible liability of the institution.
Each clinical trial must be reviewed and approved by an IRB either centrally or individually at each institution at which the clinical trial will be conducted. The IRB will consider, among other things, clinical trial design, patient informed consent, ethical factors, the safety of human subjects, and the possible liability of the institution.
After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval. Expedited Review Programs The FDA is authorized to expedite the review of applications in several ways.
After approval, many types of changes to the approved product, such as adding new indications, 26 manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval. Expedited Review Programs The FDA is authorized to expedite the review of applications in several ways.
In the case of orphan medicinal products, a 39 two year extension of the orphan market exclusivity may be available. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.
In the case of orphan medicinal products, a two year extension of the orphan market exclusivity may be available. This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the PIP are developed and submitted.
As a condition of approval, the FDA may require that a sponsor of a biologic product candidate receiving accelerated approval 28 perform adequate and well controlled post-marketing clinical trials. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials.
As a condition of approval, the FDA may require that a sponsor of a biologic product candidate receiving accelerated approval perform adequate and well controlled post-marketing clinical trials. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials.
In addition, sponsors are given opportunities to meet with the FDA at certain points in the clinical development program. Meetings at other times may also be requested. There are five types of meetings that occur between sponsors and the 25 FDA.
In addition, sponsors are given opportunities to meet with the FDA at certain points in the clinical development program. Meetings at other times may also be requested. There are five types of meetings that occur between sponsors and the FDA.
Importantly, a dedicated EMA contact and rapporteur from the Committee for Human Medicinal Products, or CHMP, or Committee for Advanced Therapies are appointed early in the PRIME scheme facilitating increased understanding of the product at the EMA’s Committee level.
Importantly, a dedicated EMA contact and rapporteur from the Committee for Human Medicinal Products, or CHMP, or Committee for Advanced Therapies are appointed early in the PRIME scheme 35 facilitating increased understanding of the product at the EMA’s Committee level.
This group may recommend continuation of the study as planned, changes in study conduct, or cessation of the study at designated check points based on certain available data from the study to which only the DSMB or DMC has access.
This group may recommend continuation of the study as planned, changes in study conduct, or cessation of the study at designated check points based on certain available data from the study to which only the DMC has access.
The FDA and other agencies actively 30 enforce the laws and regulations prohibiting the promotion of off‑label uses, and a company that is found to have improperly promoted off‑label uses may be subject to significant liability.
The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off‑label uses, and a company that is found to have improperly promoted off‑label uses may be subject to significant liability.
In November 2020, California voters passed a ballot initiative for the California Privacy Rights Act, or CRPA, which went into effect on January 1, 2023, and significantly expanded the CCPA to incorporate additional GDPR-like provisions including requiring that the use, retention, and sharing of personal information of California residents be reasonably necessary and proportionate to the purposes of collection or processing, granting additional protections for sensitive personal information, and requiring greater disclosures related to notice to residents regarding retention of information.
In November 2020, California voters passed a ballot initiative for the California Privacy Rights Act, or the CPRA, which went into effect on January 1, 2023, and significantly expanded the CCPA to incorporate additional GDPR-like provisions including requiring that the use, retention, and sharing of personal information of California residents be reasonably necessary and proportionate to the purposes of collection or processing, granting additional protections for sensitive personal information, and requiring greater disclosures related to notice to residents regarding retention of information.
If the FDA raises concerns or questions either during this initial 30‑day period or following commencement of the clinical trial, it may choose to impose a partial or complete clinical hold.
If the FDA raises concerns or questions either during this 20 initial 30‑day period or following commencement of the clinical trial, it may choose to impose a partial or complete clinical hold.
Clinical holds are imposed by the FDA whenever there is concern for patient safety and may be a result of new data, findings, or 22 developments in clinical, nonclinical, and/or CMC.
Clinical holds are imposed by the FDA whenever there is concern for patient safety and may be a result of new data, findings, or developments in clinical, nonclinical, and/or CMC.
A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing authorization holder, including obligations with respect to the completion of ongoing or new clinical trials and with respect to the collection of pharmacovigilance data.
A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing 36 authorization holder, including obligations with respect to the completion of ongoing or new clinical trials and with respect to the collection of pharmacovigilance data.
Following the withdrawal of the UK from the EU, the UK Data 41 Protection Act 2018 applies to the processing of personal data that takes place in the UK and includes parallel obligations to those set forth by GDPR.
Following the withdrawal of the UK from the EU, the UK Data Protection Act 2018 applies to the processing of personal data that takes place in the UK and includes parallel obligations to those set forth by GDPR.
We use a variety of human capital measures in managing our business, including: workforce demographics; inclusion and diversity; and employee health and safety. Corporation Information Our website address is www.cuebiopharma.com.
We use a variety of human capital measures in managing our business, including: workforce demographics; inclusion; and employee health and safety. Corporation Information Our website address is www.cuebiopharma.com.
The final rule would eliminate the current safe harbor for Medicare drug rebates and create new safe harbors for beneficiary point-of-sale discounts and pharmacy benefit manager service fees.
The final rule would eliminate the current safe harbor for Medicare drug rebates and create 43 new safe harbors for beneficiary point-of-sale discounts and pharmacy benefit manager service fees.
Government Regulation and Licensure of Products Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the European Union, extensively regulate, among other things, the research, development, testing, manufacture, pricing, reimbursement, sales, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post‑approval monitoring and reporting, and import and export of pharmaceutical products, including biological products.
Government Regulation and Licensure of Products Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions, including the European Union, or EU, extensively regulate, among other things, the research, development, testing, manufacture, pricing, reimbursement, sales, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post‑approval monitoring and reporting, and import and export of pharmaceutical products, including biological products.
A biosimilar is a biological product that is highly similar to an existing FDA-licensed “reference product.” To date, the FDA has licensed a number of biosimilar products and several interchangeable biosimilar products.
A biosimilar is a biological product that is highly similar to an existing FDA-licensed “reference product.” To date, the FDA has licensed a number of biosimilar products and interchangeable biosimilar products.
Our License Agreement with Einstein On January 14, 2015, or the Effective Date, we entered into a license agreement, as amended and restated on July 31, 2017 and as amended on October 30, 2018, or the Einstein License, with Albert Einstein College of Medicine, or Einstein, for certain patent rights, or the Patents, relating to our core technology platform for the engineering of biologics to control T cell activity, precision, immune-modulatory drug product candidates, and two supporting technologies that enable the discovery of costimulatory signaling molecules (ligands) and T cell targeting peptides.
Our License Agreement with Einstein On January 14, 2015, or the Effective Date, we entered into a license agreement, as amended and restated on July 31, 2017 and as further amended on October 30, 2018 and January 13, 2024, or the Einstein License, with Albert Einstein College of Medicine, or Einstein, for certain patent rights, or the Patents, relating to our core technology platform for the engineering of biologics to control T cell activity, precision, immune-modulatory drug product candidates, and two supporting technologies that enable the discovery of costimulatory signaling molecules (ligands) and T cell targeting peptides.
The draft guidance is adopted from the International Council for Harmonisation’s, or ICH’s, recently updated E6(R3) draft guideline that was developed to enable the incorporation of rapidly developing technological and methodological innovations into the clinical trial enterprise. In addition, the FDA issued draft guidance outlining recommendations for the implementation of decentralized clinical trials.
The draft guidance is adopted from the International Council for Harmonisation’s recently updated E6(R3) draft guideline that was developed to enable the incorporation of rapidly developing technological and methodological innovations into the clinical trial enterprise. In addition, the FDA issued draft guidance outlining recommendations for the implementation of decentralized clinical trials.
There have been several recent U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid.
There have been U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid.
These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products. Specifically, action plans must include the sponsor’s goals for enrollment, the underlying rationale for those goals, and an explanation of how the sponsor intends to meet them.
These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products. Specifically, DAPs must include the sponsor’s goals for enrollment, the underlying rationale for those goals, and an explanation of how the sponsor intends to meet them.
Connecticut and Nevada have also passed similar laws regulating consumer health data, and more states are considering such legislation in 2024. These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.
Connecticut and Nevada have also passed similar laws regulating consumer health data, and more states are considering such legislation. These laws may impact our business activities, including our identification of research subjects, relationships with business partners and ultimately the marketing and distribution of our products.
A sponsor seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps: • preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s 21 Good Laboratory Practice, or GLP, regulations and standards and other applicable regulations; • completion of the manufacture, under current Good Manufacturing Practices, or GMP, conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing; • design of a clinical protocol and submission to the FDA of an investigational new drug application, or IND, application for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated; • performance of adequate and well‑controlled human clinical trials to establish the safety, potency, and purity of the product candidate for each proposed indication, in accordance with current Good Clinical Practices, or GCP; • preparation and submission to the FDA of a Biologic License Application, or BLA, for a biologic product requesting marketing for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product in clinical development and proposed labelling; • review of the product by an FDA advisory committee, where appropriate or if applicable; • satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with GMP requirements and to assure that the chemistry, methods, and controls, or CMC, for the product are adequate to preserve the product’s identity, strength, quality, and purity, and, if applicable, the FDA’s current good tissue practice for the use of human cellular and tissue products; • satisfactory completion of any FDA audits of the non‑clinical and clinical trial sites to assure compliance with GCPs and the integrity of clinical data in support of the BLA; • payment of user Prescription Drug User Free Act, or PDUFA, securing FDA approval of the BLA and licensure of the new biologic product; and • compliance with any post‑approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and any post‑approval studies required by the FDA.
A sponsor seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps: • preclinical laboratory tests, animal studies and formulation studies all performed in accordance with the FDA’s 19 Good Laboratory Practice, or GLP, regulations and standards and other applicable regulations; • completion of the manufacture, under current Good Manufacturing Practices, or GMP, conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing; • design of a clinical protocol and submission to the FDA of an investigational new drug application, or IND, application for human clinical testing, which must become effective before human clinical trials may begin; • approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated; • performance of adequate and well‑controlled human clinical trials to establish the safety, potency, and purity of the product candidate for each proposed indication, in accordance with current Good Clinical Practices, or GCP; • preparation and submission to the FDA of a BLA for a biologic product requesting marketing for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product in clinical development and proposed labelling; • review of the product by an FDA advisory committee, where appropriate or if applicable; • satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with GMP requirements and to assure that the chemistry, methods, and controls, or CMC, for the product are adequate to preserve the product’s identity, strength, quality, and purity, and, if applicable, the FDA’s current good tissue practice for the use of human cellular and tissue products; • satisfactory completion of any FDA audits of the non‑clinical and clinical trial sites to assure compliance with GCPs and the integrity of clinical data in support of the BLA; • payment of substantial application and program fees pursuant to the Prescription Drug User Free Act, or PDUFA; • securing FDA approval of the BLA and licensure of the new biologic product allowing marketing in the United States for particular indications and under certain conditions; and • compliance with any post‑approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and any post‑approval studies required by the FDA.
Licensure and Regulation of Biologics in the United States In the United States, our drug product candidates are regulated as biological products, or biologics, under the Public Health Service Act, or the PHSA, and the Federal Food, Drug and Cosmetic Act, or the FDCA, and its implementing regulations and guidance.
Licensure and Regulation of Biologics in the United States In the United States, our drug product candidates are regulated as biological products, or biologics, under the Public Health Service Act, or the PHSA, and the Federal Food, Drug and Cosmetic Act, or the FDCA, and their implementing regulations and guidance.
Our website and the information contained on, or that can be accessed through, the website will not be deemed to be incorporated by reference in, and are not considered part of, this Annual Report on Form 10-K or any other report or document we file with the Securities and Exchange Commission, or the SEC, and any reference to our website address is intended to be an inactive textual reference only. 47
Our website and the information contained on, or that can be accessed through, the website will not be deemed to be incorporated by reference in, and are not considered part of, this Annual Report on Form 10-K or any other report or document we file with the Securities and Exchange Commission, or the SEC, and any reference to our website address is intended to be an inactive textual reference only. 45 46
If a product with orphan designation receives the first FDA approval for the disease or condition for which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product 31 generally will receive orphan drug exclusivity.
If a product with orphan designation receives the first FDA approval for the disease or condition for which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product 30 generally will receive orphan drug exclusivity.
In the CPI space, potential competitors include AstraZeneca, Bristol-Myers Squibb, Merck & Co., and Roche Holding AG. 20 We believe that our approach provides us with a competitive advantage through selective delivery of immune activating signals, coupling engineered cytokines (i.e., IL-2) to a targeting moiety (i.e., peptide-MHC complex) for enhanced activation of cancer-specific CD8+ T cells.
In the checkpoint inhibitor, or CPI, space, potential competitors include AstraZeneca, Bristol-Myers Squibb, Merck & Co., and Roche Holding AG. We believe that our approach provides us with a competitive advantage through selective delivery of immune activating signals, coupling engineered cytokines (i.e., IL-2) to a targeting moiety (i.e., peptide-MHC complex) for enhanced activation of cancer-specific CD8+ T cells.
For the year ended December 31, 2023, there were no payments related to Einstein license maintenance fees under the Einstein License, as they were creditable against actual payments owed to Einstein during the twelve-month period.
For the year ended December 31, 2024, there were no payments related to Einstein license maintenance fees under the Einstein License, as they were creditable against actual payments owed to Einstein during the twelve-month period.
In addition to our obligation to pay royalties based upon a percentage of proceeds from sales of Licensed Products, we have also agreed to pay Einstein annual maintenance fees. The maintenance payments are creditable against any royalty payments we pay under the Einstein License.
In addition to our obligation to pay royalties based upon a percentage of proceeds from sales of Licensed Products, we have also agreed to pay Einstein annual maintenance fees. The maintenance payments are non-refundable, but are creditable against any royalty payments we pay under the Einstein License.
Strict deadlines have been established for the assessment of clinical trial applications. The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the concerned member state. However, overall related timelines will be defined by the Clinical Trials Regulation.
Strict deadlines have been established for the assessment of clinical trial applications. The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the concerned member state. However, overall related timelines will be defined by the CTR.
On January 23, 2023, FDA announced that, in matters beyond the scope of that court order, FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug was approved.
On January 23, 2023, the FDA announced that, in matters beyond the scope of the Catalyst court order, the FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug is approved.
The current transition periods range from 26 May 2025 for high risk IVDs to 26 May 2027 for lower risk IVDs. Certain provisions for devices manufactured and used in health institutions, would have to apply as from 26 May 2028.
The current transition periods range from May 26, 2025 for high risk in vitro diagnostics, or IVDs, to May 26, 2027 for lower risk IVDs. Certain provisions for devices manufactured and used in health institutions, would have to apply as from May 26, 2028.
Specifically, the process governing approval of medicinal products in the European Union, or EU, generally follows the same lines as in the United States. It entails satisfactory completion of preclinical studies and adequate and well‑controlled clinical trials to establish the safety and efficacy of the product for each proposed indication.
Specifically, the process governing approval of medicinal products in the EU generally follows the same lines as in the United States. It entails satisfactory completion of preclinical studies and adequate and well‑controlled clinical trials to establish the safety and efficacy 34 of the product for each proposed indication.
The first of these pilot programs, Real-Time Oncology Review, or RTOR, focuses on early submission of data that are the most relevant to assessing the product’s safety and effectiveness.
The first of these pilot programs, Real-Time Oncology Review, or RTOR, focuses on early submission of data that are the most relevant to assessing the product’s safety, potency and purity.
Clinical testing also must satisfy extensive GCP rules and the requirements for informed consent. 23 Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board, or DSMB, or data monitoring committee, or DMC.
Clinical testing also must satisfy extensive GCP rules and the requirements for informed consent. 21 Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data monitoring committee, or DMC.
These transition periods only apply to so called ‘ legacy device’, meaning devices covered by a certificate or declaration of conformity issued under the previous legal framework (notably, the IVDD). Brexit and the Regulatory Framework in the United Kingdom The United Kingdom’s, or UK’s, withdrawal from the EU took place on January 31, 2020.
These transition periods only apply to so called “legacy device”, meaning devices covered by a certificate or declaration of conformity issued under the previous legal framework (notably, the IVDD). Brexit and the Regulatory Framework in the United Kingdom The United Kingdom’s, or UK’s, withdrawal from the EU, commonly referred to as Brexit, took place on January 31, 2020.
While this guidance is currently only in draft form and will ultimately not be legally binding even when finalized, sponsors typically observe the FDA’s guidance closely to ensure that their investigational products qualify for accelerated approval. • Regenerative advanced therapy.
While these guidances are currently only in draft form and will ultimately not be legally binding even when finalized, sponsors typically observe the FDA’s guidance closely to ensure that their investigational products qualify for accelerated approval. • Regenerative advanced therapy.
These two “cues”, or signals, when engaged concurrently, as is the case with our Immuno-STATs, are able to “dial-in” selective activation of targeted tumor-specific T cells to attack cancer while avoiding potentially harmful broad immune activation of T cells.
These “cues”, or signals, when engaged at the same time, as is the case with our Immuno-STATs, are able to “dial-in” selective activation of targeted tumor-specific T cells to attack cancer while avoiding potentially harmful broad immune activation of T cells.
The BLA must contain extensive manufacturing information and detailed information on the composition of the product and proposed labeling as well as payment of a user fee. Under federal law, the submission of most BLAs is subject to an application user fee, which for federal fiscal year 2024 is $4,048,695 for an application requiring clinical data.
The BLA must contain extensive manufacturing information and detailed information on the composition of the product and proposed labeling as well as payment of a user fee. Under federal law, the submission of most BLAs is subject to an application user fee, which for federal fiscal year 2025 is $4,310,002 for an application requiring clinical data.
The sponsor of a licensed BLA is also subject to an annual program fee, which for federal fiscal year 2024 is $416,734. Certain exceptions and waivers are available for some of these fees, such as an exception from the application fee for products with orphan designation and a waiver for certain small businesses.
The sponsor of a licensed BLA is also subject to an annual program fee, which for federal fiscal year 2025 is $403,889. Certain exceptions and waivers are available for some of these fees, such as an exception from the application fee for products with orphan designation and a waiver for certain small businesses.
The principal purposes of our incentive plans are to attract, retain and motivate selected employees, consultants, advisors and directors through the granting of stock-based compensation awards and cash-based performance bonus awards, as applicable. We support employees 46 attending industry conferences and obtaining professional licenses.
We offer employees a competitive and comprehensive benefits package. The principal purposes of our incentive plans are to attract, retain and motivate selected employees, consultants, advisors and directors through the granting of stock-based compensation awards and cash-based performance bonus awards, as applicable. We support employees attending industry conferences and obtaining professional licenses.
Parties conducting certain clinical trials must, as in the United States, post clinical trial information in the European Union at the EU Clinical Trials Registry. 36 PRIME Designation In March 2016, the EMA, launched an initiative to facilitate development of drug product candidates in indications, often rare, for which few or no therapies currently exist.
Parties conducting certain clinical trials must, as in the United States, post clinical trial information in the EU at the EudraCT website: https://eudract.ema.europa.eu. PRIME Designation In March 2016, the EMA, launched an initiative to facilitate development of drug product candidates in indications, often rare, for which few or no therapies currently exist.
The processes for obtaining marketing approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.
The processes for obtaining marketing approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources and may have a significant impact on our business.
We also rely and will rely on trade secrets, know-how, continuing technological innovations and licensing opportunities to develop, maintain and strengthen our competitive position. We seek to protect these, in part, through confidentiality agreements with certain employees, consultants, advisors and other parties.
We believe that these intellectual property rights will affect our ability to compete effectively with others. We also rely and will rely on trade secrets, know-how, continuing technological innovations and licensing opportunities to develop, maintain and strengthen our competitive position. We seek to protect these, in part, through confidentiality agreements with certain employees, consultants, advisors and other parties.
The EU and the UK reached an agreement on their new partnership in the Trade and Cooperation Agreement, or the Agreement, which was applied provisionally beginning on January 1, 2021 and which entered into force on May 1, 2021.
The EU and the UK reached an agreement on their new partnership in the Trade and Cooperation Agreement, which entered into force on May 1, 2021.
In November 2013, the federal Drug Supply Chain Security Act, or DSCSA, became effective in the United States, mandating an industry-wide, electronic, interoperable system to trace prescription drugs through the pharmaceutical distribution supply chain with a ten-year phase-in process.
In November 2013, the federal Drug Supply Chain Security Act, or DSCSA, became effective in the United States, mandating an industry-wide, electronic, interoperable system to trace prescription drugs through the pharmaceutical distribution supply chain with a ten-year phase-in process. Manufacturers were required by November 2023 to have such systems and processes in place.
Einstein may also terminate the Einstein License in the event we are convicted of certain felonies relating to the manufacture or use of Licensed Products. 17 The Einstein License also obligates us to meet certain due diligence requirements, or the Diligence Milestones, as follows: • update our research and development plan annually; • initiate Phase 1 clinical trials on a Licensed Product within a number of years from the Effective Date; • initiate Phase 2 clinical trials on a Licensed Product within a number of years from the Effective Date; • initiate Phase 3 clinical trials on a Licensed Product within a number of years from the Effective Date; • submit an application for FDA approval to market and sell a Licensed Product within a number of years from the Effective Date; • have our first commercial sale of an FDA Licensed Product within a number of years from the Effective Date; and • spend a minimum amount per year on product development until our first commercial sale of a Licensed Product.
The Einstein License also obligates us to meet certain due diligence requirements, or the Diligence Milestones, as follows: • update our research and development plan annually; • initiate Phase 1 clinical trials on a Licensed Product within a number of years from the Effective Date; • initiate Phase 2 clinical trials on a Licensed Product within a number of years from the Effective Date; • initiate Phase 3 clinical trials on a Licensed Product or an FDA approved clinical trial designed to support a biologics license application, or BLA, within a number of years from the Effective Date; • submit an application for FDA approval to market and sell a Licensed Product within a number of years from the Effective Date; • have our first commercial sale of an FDA Licensed Product within a number of years from the Effective Date; and • spend a minimum amount per year on product development until our first commercial sale of a Licensed Product.
The FDA also may inspect foreign facilities that export products to the United States. 34 Federal and State Data Privacy and Security Laws Under the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, HHS has issued regulations to protect the privacy and security of protected health information used or disclosed by covered entities including certain healthcare providers, health plans, and healthcare clearinghouses.
Federal and State Data Privacy and Security Laws Under the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, HHS has issued regulations to protect the privacy and security of protected health information used or disclosed by covered entities including certain healthcare providers, health plans, and healthcare clearinghouses.
While these notices of non-compliance did not result in civil monetary penalties, the failure to submit clinical trial information to clinicaltrials.gov, as required, is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues.
While these notices of non-compliance did not result in civil monetary penalties, the failure to submit clinical trial information to clinicaltrials.gov is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues. Violations may also result in injunctions and/or criminal prosecution or disqualification from federal grants.
At December 31, 2023, we have made payments totaling $1,233,000 since inception with respect to achievement of these milestones.
At December 31, 2024, we have made payments totaling $1.2 million since inception with respect to achievement of these milestones.
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap; imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation (first due in 2023); and replaces the Part D coverage gap discount program with a 45 new discounting program (beginning in 2025).
Among other things, the IRA requires manufacturers of certain drugs to engage in price negotiations with Medicare (beginning in 2026), with prices that can be negotiated subject to a cap, and it replaces the Part D coverage gap discount program with a new discounting program (beginning in 2025).
The CPRA also created a new enforcement agency – the California Privacy Protection Agency – whose sole responsibility is to enforce the CPRA, which will further increase compliance risk. The provisions in the CPRA may apply to some of our business activities. In addition to California, eleven other states have passed comprehensive privacy laws similar to the CCPA and CPRA.
The CPRA also created a new enforcement agency – the California Privacy Protection Agency – whose sole responsibility is to enforce the CPRA, which will further increase compliance risk. The provisions in the CPRA may apply to some of our business activities.
Additionally, many competitors have greater experience in product discovery and development, obtaining FDA and other regulatory approvals, and commercialization capabilities, which may provide them with a competitive advantage.
Many of our competitors have greater financial, technical and human resources than we do. Additionally, many competitors have greater experience in product discovery and development, obtaining FDA and other regulatory approvals, and commercialization capabilities, which may provide them with a competitive advantage.
In September 2021, the Court of Appeals for the 11th Circuit held that, for the purpose of determining the scope of market exclusivity, the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” Thus, the court concluded, orphan drug exclusivity applies to the entire designated disease or condition rather than the “indication or use.” Although there have been legislative proposals to overrule this decision, they have not been enacted into law.
Becerra , or Catalyst, held that, for the purpose of determining the scope of orphan drug exclusivity, the term “same disease or condition” in the statute means the designated “rare disease or condition” and could not be interpreted by the FDA to mean the “indication or use.” Although there have been legislative proposals to overrule this decision, they have not been enacted into law.
In addition to these 24 requirements, the legislation directs the FDA to issue new guidance on diversity action plans. In January 2024, the FDA issued draft guidance setting out its policies for the collection of race and ethnicity data in clinical trials.
In addition to these requirements, the legislation directed the FDA to issue new guidance on DAPs. In June 2024, the FDA issued draft guidance 22 setting out its policies for the collection of race and ethnicity data in clinical trials.
For federal fiscal year 2024, the standard fee is $483,560 and the small business fee is $120,890. 33 A clinical trial is typically required for a PMA application and, in a small percentage of cases, the FDA may require a clinical study in support of a 510(k) submission.
For federal fiscal year 2025, the standard fee is $540,783 and the small business fee is $135,196. A clinical trial is typically required for a PMA application and, in a small percentage of cases, the FDA may require a clinical study in support of a 510(k) submission.
Although the FDA has historically not enforced these reporting requirements due to the U.S. Department of Health and Human Services’, or HHS’s, long delay in issuing final implementing regulations, those regulations have now been issued and the FDA has issued several pre-notices for voluntary corrective action and several notices of non-compliance during the past two years.
Although the FDA has historically not enforced these reporting requirements due to the U.S. Department of Health and Human Services’, or HHS’s, long delay in issuing final implementing regulations, those regulations have now been issued.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn the first quarter of 2022, we determined to prioritize and strategically focus on our CUE-101 and CUE-102 oncology programs in our CUE-100 series, and we are actively seeking third party support through partnerships and collaborations, or alternative funding structures, to further develop CUE-103 and our Neo-STAT and RDI-STAT programs, as well as our programs outside of oncology, including our CUE-200, CUE-300 and CUE-400 series, and there is no guarantee that we will be able to do so on favorable terms or at all.
Biggest changeWe are actively seeking third party support through partnerships and collaborations, or alternative funding structures, to further develop our CUE-101 and CUE-102 oncology programs in our CUE-100 series and our CUE-501 preclinical autoimmune program in our CUE-500 series, and there is no guarantee that we will be able to do so on favorable terms or at all. 51 In addition, on February 22, 2023, we entered into a strategic collaboration agreement, or the Ono Collaboration and Option Agreement, with Ono Pharmaceutical Co., Ltd., or Ono, to further develop CUE-401 and provide dedicated resources and capabilities to help advance CUE-401 toward the clinic.
In recent years, a significant number of pharmaceutical and biotechnology companies have been the target of inquiries and investigations by various federal and state regulatory, investigative, prosecutorial and administrative entities in connection with the promotion of products for unapproved uses and other sales practices, including the Department of Justice and various U.S.
In recent years, a significant number of pharmaceutical and biotechnology companies have been the target of inquiries and investigations by various federal and state regulatory, investigative, prosecutorial and administrative entities in connection with the promotion of products for unapproved uses and other sales practices, including the U.S. Department of Justice and various U.S.
Attorneys’ Offices, the Office of Inspector General of the HHS, the FDA, the Federal Trade Commission, or the FTC, and various state Attorneys General offices.
Attorneys’ Offices, the Office of Inspector General of HHS, the FDA, the Federal Trade Commission, or the FTC, and various state Attorneys General offices.
Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
Disruptions at the FDA and other agencies may also slow the time necessary for new product candidates to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.
On June 6, 2023, Merck & Co. filed a lawsuit against the HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution. Subsequently, a number of other parties, including the U.S.
On June 6, 2023, Merck & Co. filed a lawsuit against HHS and CMS asserting that, among other things, the IRA’s Drug Price Negotiation Program for Medicare constitutes an uncompensated taking in violation of the Fifth Amendment of the Constitution. Subsequently, a number of other parties, including the U.S.
Our future funding requirements will depend on many factors, including, but not limited to: 82 • the progress, timing, scope and costs of our clinical trials, including the ability to timely enroll patients in our current and future clinical trials; • the outcome, timing and cost of regulatory approvals by the FDA and comparable regulatory authorities, including the potential that the FDA or comparable regulatory authorities may require that we perform more studies than those that we currently expect; • the number and characteristics of drug product candidates that we may in-license and develop; • our ability to successfully commercialize our drug product candidates, if approved; • the amount of sales and other revenues from drug product candidates that we may commercialize, if any, including the selling prices for such potential products and the availability of adequate third-party reimbursement; • selling and marketing costs associated with our potential products, including the cost and timing of expanding our marketing and sales capabilities; • the terms and timing of any potential future collaborations, licensing or other arrangements that we may establish; • cash requirements of any future acquisitions and/or the development of other drug product candidates; • the costs of operating as a public company; • the cost and timing of completion of commercial-scale, outsourced manufacturing activities; • the time and cost necessary to respond to technological and market developments; • any disputes which may occur between us and our employees, collaborators, including Einstein, LG Chem and Ono, or other prospective business partners; and • the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.
Our future funding requirements will depend on many factors, including, but not limited to: • the progress, timing, scope and costs of our clinical trials, including the ability to timely enroll patients in our current and any future clinical trials; • the outcome, timing and cost of regulatory approvals by the FDA and comparable regulatory authorities, including the potential that the FDA or comparable regulatory authorities may require that we perform more studies than those that we currently expect; • the number and characteristics of drug product candidates that we may in-license and develop; • our ability to successfully commercialize our drug product candidates, if approved; • the amount of sales and other revenues from drug product candidates that we may commercialize, if any, including the selling prices for such potential products and the availability of adequate third-party reimbursement; • selling and marketing costs associated with our potential products, including the cost and timing of expanding our marketing and sales capabilities; • the terms and timing of any potential future collaborations, licensing or other arrangements that we may establish; • cash requirements of any future acquisitions and/or the development of other drug product candidates; • the costs of operating as a public company; • the cost and timing of completion of commercial-scale, outsourced manufacturing activities; • the time and cost necessary to respond to technological and market developments; • any disputes which may occur between us and our employees, collaborators, including Einstein, LG Chem and Ono, or other prospective business partners; and 82 • the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.
Restrictions under applicable federal and state healthcare laws and regulations include the following: • the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order, or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid; • the federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval from Medicare, Medicaid, or other government payors that are false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties; • the federal Health Insurance Portability and Accountability Act of 1996, as further amended by the Health Information Technology for Economic and Clinical Health Act, which imposes certain requirements, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, health care clearinghouses, and health care providers; • the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items, or services; • the federal transparency requirements under the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics, and medical supplies to report to the HHS information related to payments and other transfers of value to physicians, other healthcare providers and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members and applicable group purchasing organizations; and • analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and certain state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures.
Restrictions under applicable federal and state healthcare laws and regulations include the following: • the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving, or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order, or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid; 71 • the federal False Claims Act imposes criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment or approval from Medicare, Medicaid, or other government payors that are false or fraudulent or making a false statement to avoid, decrease, or conceal an obligation to pay money to the federal government, with potential liability including mandatory treble damages and significant per-claim penalties; • the federal Health Insurance Portability and Accountability Act of 1996, as further amended by the Health Information Technology for Economic and Clinical Health Act, which imposes certain requirements, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information without appropriate authorization by entities subject to the rule, such as health plans, health care clearinghouses, and health care providers; • the federal false statements statute, which prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items, or services; • the federal transparency requirements under the federal Physician Payment Sunshine Act, which requires manufacturers of drugs, devices, biologics, and medical supplies to report to HHS information related to payments and other transfers of value to physicians, other healthcare providers and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members and applicable group purchasing organizations; and • analogous state laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and certain state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures.
Our efforts may not lead to commercially successful products for a number of reasons, including: • we and our licensor, prospective business partners and other collaborators may not be able to complete research regarding, and nonclinical and clinical development of, our drug product candidates; • regulatory approvals and marketing authorizations may not be achieved for our drug product candidates, or the scope of the approved indication may be narrower than sought; • we and our licensor, prospective business partners and other collaborators may experience delays in our development programs, clinical trials and the regulatory approval process; • our technology may not prove to be safe and effective in clinical trials or preclinical studies and our drug product candidates may have adverse side effects which outweigh any potential benefit to patients; • we may not be able to identify suitable collaborators to complete development or commercialization of our potential products; • we may not be able to maintain, protect or expand our portfolio of intellectual property rights, including patents, trade secrets and know-how; 48 • any future products that are ultimately approved by the FDA or other regulatory bodies may not be commercially accepted in the marketplace by physicians or patients; • any future products that are ultimately approved by the FDA or other regulatory bodies may not be able to be manufactured in commercial quantities or at an acceptable cost; • physicians may not receive any reimbursement from third-party payors, or the level of reimbursement may be insufficient to support widespread adoption of any of our future products once approved by the FDA or other regulatory bodies; and • rapid technological change may make our technology and drug product candidates obsolete.
Our efforts may not lead to commercially successful products for a number of reasons, including: • we and our licensor, prospective business partners and other collaborators may not be able to complete research regarding, and nonclinical and clinical development of, our drug product candidates; • regulatory approvals and marketing authorizations may not be achieved for our drug product candidates, or the scope of the approved indication may be narrower than sought; • we and our licensor, prospective business partners and other collaborators may experience delays in our development programs, clinical trials and the regulatory approval process; • our technology may not prove to be safe and effective in clinical trials or preclinical studies and our drug product candidates may have adverse side effects which outweigh any potential benefit to patients; • we may not be able to identify suitable collaborators to complete development or commercialization of our potential products; • we may not be able to maintain, protect or expand our portfolio of intellectual property rights, including patents, trade secrets and know-how; • any future products that are ultimately approved by the FDA or other regulatory bodies may not be commercially accepted in the marketplace by physicians or patients; • any future products that are ultimately approved by the FDA or other regulatory bodies may not be able to be manufactured in commercial quantities or at an acceptable cost; • physicians may not receive any reimbursement from third-party payors, or the level of reimbursement may be insufficient to support widespread adoption of any of our future products once approved by the FDA or other regulatory bodies; and • rapid technological change may make our technology and drug product candidates obsolete.
The GDPR also permits data protection authorities to require destruction of improperly gathered or used personal information and/or impose substantial fines for violations of the GDPR, which can be up to four percent of global revenues of the respective group of companies or €20 million, whichever is greater, and it also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
The GDPR also permits data protection authorities to require 77 destruction of improperly gathered or used personal information and/or impose substantial fines for violations of the GDPR, which can be up to four percent of global revenues of the respective group of companies or €20 million, whichever is greater, and it also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government health 72 care programs, such as Medicare and Medicaid, imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our business, financial condition, results of operations, and prospects.
If our operations are found to be in violation of any of the laws described above or any other government regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from participation in government health care programs, such as Medicare and Medicaid, imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our business, financial condition, results of operations, and prospects.
Although we generally do not begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the clinical trial, any significant delay in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to 57 replace a contract manufacturer or other third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our drug product candidates.
Although we generally do not begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the clinical trial, any significant delay in the supply of a product candidate, or the raw material components thereof, for an ongoing clinical trial due to the need to replace a contract manufacturer or other third-party manufacturer could considerably delay completion of our clinical trials, product testing and potential regulatory approval of our drug product candidates.
In addition, if any product fails to comply with applicable regulatory requirements, a regulatory agency may: • issue fines, warning letters, untitled letters or impose holds on clinical trials if any are still ongoing; • mandate modifications to promotional materials or require provision of corrective information to healthcare practitioners; • impose restrictions on the product or its manufacturers or manufacturing processes; • impose restrictions on the labeling or marketing of the product; • impose restrictions on product distribution or use; • require post-marketing clinical trials; • require withdrawal of the product from the market; • refuse to approve pending applications or supplements to approved applications that we submit; • require recall of the product; • require entry into a consent decree, which can include imposition of various fines (including restitution or disgorgement of profits or revenue), reimbursements for inspection costs, required due dates for specific actions and penalties for non-compliance; • suspend or withdraw marketing approvals; • refuse to permit the import or export of the product; • seize or detain supplies of the product; or 69 • issue injunctions or impose civil or criminal penalties.
In addition, if any product fails to comply with applicable regulatory requirements, a regulatory agency may: • issue fines, warning letters, untitled letters or impose holds on clinical trials if any are still ongoing; • mandate modifications to promotional materials or require provision of corrective information to healthcare practitioners; • impose restrictions on the product or its manufacturers or manufacturing processes; • impose restrictions on the labeling or marketing of the product; • impose restrictions on product distribution or use; • require post-marketing clinical trials; • require withdrawal of the product from the market; • refuse to approve pending applications or supplements to approved applications that we submit; • require recall of the product; • require entry into a consent decree, which can include imposition of various fines (including restitution or disgorgement of profits or revenue), reimbursements for inspection costs, required due dates for specific actions and penalties for non-compliance; 68 • suspend or withdraw marketing approvals; • refuse to permit the import or export of the product; • seize or detain supplies of the product; or • issue injunctions or impose civil or criminal penalties.
We expect that we will be subject to additional risks in commercializing any of our drug product candidates that receive marketing approval outside the United States, including tariffs, trade barriers and regulatory requirements; economic weakness, including inflation, or political instability in particular foreign economies and markets; compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; and workforce uncertainty in countries where labor unrest is more common than in the United States. 64 We may seek orphan drug designation for one or more of our drug product candidates, but even if such designation is granted, we may be unable to maintain any benefits associated with orphan drug designation, including market exclusivity that prevents the FDA or the EMA from approving other competing products.
We expect that we will be subject to additional risks in commercializing any of our drug product candidates that receive marketing approval outside the United States, including tariffs, trade barriers and regulatory requirements; economic weakness, including inflation, or political instability in particular foreign economies and markets; compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; foreign currency fluctuations, which could result in increased operating expenses and reduced revenue, and other obligations incident to doing business in another country; and workforce uncertainty in countries where labor unrest is more common than in the United States. 63 We may seek orphan drug designation for one or more of our drug product candidates, but even if such designation is granted, we may be unable to maintain any benefits associated with orphan drug designation, including market exclusivity that prevents the FDA or the EMA from approving other competing products.
The provisions in our Certificate of Incorporation and Bylaws: • authorize our board of directors to issue preferred stock without stockholder approval and to designate the rights, preferences and privileges of each class; if issued, such preferred stock would increase the number of outstanding shares of our common stock and could include terms that may deter an acquisition of us; • limit who may call stockholder meetings; • do not provide for cumulative voting rights; • provide that all vacancies on our board of directors may be filled only by the affirmative vote of a majority of directors then in office, even if less than a quorum, or by a sole remaining director; 87 • provide that stockholders must comply with advance notice procedures with respect to stockholder proposals and the nomination of candidates for director; • provide that stockholders may only amend our Certificate of Incorporation and Bylaws upon a supermajority vote of stockholders; and • provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal claims.
The provisions in our Certificate of Incorporation and Bylaws: 86 • authorize our board of directors to issue preferred stock without stockholder approval and to designate the rights, preferences and privileges of each class; if issued, such preferred stock would increase the number of outstanding shares of our common stock and could include terms that may deter an acquisition of us; • limit who may call stockholder meetings; • do not provide for cumulative voting rights; • provide that all vacancies on our board of directors may be filled only by the affirmative vote of a majority of directors then in office, even if less than a quorum, or by a sole remaining director; • provide that stockholders must comply with advance notice procedures with respect to stockholder proposals and the nomination of candidates for director; • provide that stockholders may only amend our Certificate of Incorporation and Bylaws upon a supermajority vote of stockholders; and • provide that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal claims.
We also cannot be sure that our employees will comply with company policies and applicable regulations regarding the promotion of products for unapproved uses. 70 Notwithstanding the regulatory restrictions on off-label promotion, the FDA and other regulatory authorities allow companies to engage in truthful, non-misleading, and non-promotional scientific communications concerning their products in certain circumstances.
We also cannot be sure that our employees will comply with company policies and applicable regulations regarding the promotion of products for unapproved uses. Notwithstanding the regulatory restrictions on off-label promotion, the FDA and other regulatory authorities allow companies to engage in truthful, non-misleading, and non-promotional scientific communications concerning their products in certain circumstances.
Liabilities they incur pursuant to these laws could result in significant costs or an interruption in operations, which could have a material adverse effect on our business, financial condition, results of operations, and prospects. If commercial third-party payors or government payors fail to provide coverage or adequate reimbursement, our revenue and prospects for profitability would be harmed.
Liabilities they incur pursuant to these laws could result in significant costs or an interruption in operations, which could have a material adverse effect on our business, financial condition, results of operations, and prospects. 72 If commercial third-party payors or government payors fail to provide coverage or adequate reimbursement, our revenue and prospects for profitability would be harmed.
Depending upon the timing, duration and conditions of any FDA marketing approval of our drug product candidates, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments, and similar legislation in the European Union.
Depending upon the timing, duration and conditions of any FDA marketing approval of our drug product candidates, one or more of our U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments, and similar legislation in the European Union, or EU.
Failure to comply with any of these laws and regulations could result in enforcement actions against us, including fines, claims for damages by affected individuals, damage to our reputation and loss of goodwill, any of which could have a material adverse effect on our business, financial condition, results of operations or prospects.
Failure to comply with any of these laws and regulations could result in enforcement actions against us, including fines, claims for damages by affected 78 individuals, damage to our reputation and loss of goodwill, any of which could have a material adverse effect on our business, financial condition, results of operations or prospects.
If one or more of these analysts ceases research coverage of us or fails to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our securities or trading volume to decline. We have not paid dividends in the past and have no immediate plans to pay dividends.
If one or more of these analysts ceases research coverage of us or fails to regularly 85 publish reports on us, we could lose visibility in the financial markets, which in turn could cause the price of our securities or trading volume to decline. We have not paid dividends in the past and have no immediate plans to pay dividends.
We have limited experience in conducting clinical trials and no history of commercializing biologic products, which may make it difficult to evaluate the prospects for our future viability. Our operations to date have been limited to financing and staffing our company, conducting research and developing our core technologies, and identifying and optimizing our lead product clinical candidates.
We have limited experience in conducting clinical trials and no history of commercializing biologic products, which may make it difficult to evaluate the prospects for our future viability. Our operations to date have been limited to financing and staffing our company, conducting research and developing our core technologies, and identifying and optimizing our lead drug product candidates.
The FCPA also obligates companies whose securities are listed in the United States to comply with certain accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal 80 accounting controls for international operations.
The FCPA also obligates companies whose securities are listed in the United States to comply with certain accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations.
There can be no assurance that the results seen in preclinical studies for any of our drug product candidates ultimately will result in success in clinical trials or that results seen in Phase 1 or 2 trials will be replicated in Phase 3 trials. 51 There is a high failure rate for drugs and biologic products proceeding through clinical trials.
There can be no assurance that the results seen in preclinical studies for any of our drug product candidates ultimately will result in success in clinical trials or that results seen in Phase 1 or 2 trials will be replicated in Phase 3 trials. There is a high failure rate for drugs and biologic products proceeding through clinical trials.
We and our CROs, including our CMO Catalent Pharma Solutions, LLC, or Catalent, are required to comply with FDA laws and regulations regarding current good clinical practice, or GCP, for all of our products in clinical development. Regulatory authorities enforce GCP through periodic inspections of trial sponsors, principal investigators and trial sites.
We and our CROs, including our CMO Catalent Pharma Solutions, LLC, or Catalent, are required to comply with FDA laws and regulations regarding current good clinical practice, or GCP, for all of our 55 products in clinical development. Regulatory authorities enforce GCP through periodic inspections of trial sponsors, principal investigators and trial sites.
The cost to us of any litigation or other proceeding, regardless of its merit, and even if resolved in our favor, could be substantial. Some of our competitors may be able to bear the costs of such litigation or proceedings more effectively than we can because of their having greater financial and human resources.
The cost to us of any litigation or other proceeding, regardless of its merit, and even if resolved in our favor, could be substantial. Some of our competitors may be able to bear the costs of such litigation or proceedings more effectively than we can because of their greater financial and human resources.
If we and such collaborators are not able to comply with post-approval regulatory requirements, we and such collaborators could have the marketing approvals for our products withdrawn by regulatory authorities and our, or such 68 collaborators’, ability to market any future products could be limited, which could adversely affect our ability to generate revenue and achieve or sustain profitability.
If we and such collaborators are not able to comply with post-approval regulatory requirements, we and such collaborators could have the marketing approvals for our products withdrawn by regulatory authorities and our, or such collaborators’, ability to market any future products could be limited, which could adversely affect our ability to generate revenue and achieve or sustain profitability.
If the FDA does not accept the data from any trial that we 67 conduct outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and delay or permanently halt our development of our drug product candidates.
If the FDA does not accept the data from any trial that we conduct outside the United States, it would likely result in the need for additional trials, which would be costly and time-consuming and delay or permanently halt our development of our drug product candidates.
Further, collaborations involving our drug product candidates are subject to numerous risks, which may include the following: • our collaborators may have significant discretion in determining the efforts and resources that they will apply to our collaboration as compared to their other then-existing collaborations; 52 • our collaborators may not pursue development and commercialization of our drug product candidates or may elect not to continue or renew development or commercialization of our programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • our collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • our collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our drug product candidates; • a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of each of our potential products; • our collaborators may not properly maintain or defend our intellectual property rights in accordance with the terms of our contractual arrangements with them or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to other potential liability; • disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our drug product candidates, or that result in costly litigation or arbitration that diverts our managements’ attention and our other resources; • collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable drug product candidates; and • our collaborators may own or co-own intellectual property covering our potential products that results from our collaboration with them, and in such case, we would not have the exclusive right to commercialize such intellectual property without our collaborators’ involvement and consent.
Further, collaborations involving our drug product candidates are subject to numerous risks, which may include the following: • our collaborators may have significant discretion in determining the efforts and resources that they will apply to our collaboration as compared to their other then-existing collaborations; • our collaborators may not pursue development and commercialization of our drug product candidates or may elect not to continue or renew development or commercialization of our programs based on clinical trial results, changes in their strategic focus due to the acquisition of competitive products, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities; • our collaborators may delay clinical trials, provide insufficient funding for a clinical trial, stop a clinical trial, abandon a product candidate, repeat or conduct new clinical trials, or require a new formulation of a product candidate for clinical testing; • our collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our drug product candidates; • a collaborator with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of each of our potential products; • our collaborators may not properly maintain or defend our intellectual property rights in accordance with the terms of our contractual arrangements with them or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to other potential liability; • disputes may arise between us and a collaborator that cause the delay or termination of the research, development or commercialization of our drug product candidates, or that result in costly litigation or arbitration that diverts our management's attention and our other resources; • collaborations have been, and in the future, additional collaborations may be, terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable drug product candidates; and 52 • our collaborators may own or co-own intellectual property covering our potential products that results from our collaboration with them, and in such case, we would not have the exclusive right to commercialize such intellectual property without our collaborators’ involvement and consent.
For example, in December 2022, with the passage of the Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
For example, in December 2022, with the passage of the Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan, or DAP, for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product.
If clinical trials of our drug product candidates fail to demonstrate efficacy to the satisfaction of regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug product candidates.
If clinical trials of our drug product candidates fail to demonstrate efficacy to the satisfaction of 50 regulatory authorities or do not otherwise produce positive results, we may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our drug product candidates.
The HIPAA privacy, security and breach notification regulations, including the expanded requirements under HITECH, establish comprehensive federal standards with respect to the uses and disclosures of protected health information, or PHI, by health plans, healthcare providers and healthcare clearinghouses, in addition to setting standards to protect the confidentiality, integrity and security of PHI.
The HIPAA privacy, security and breach notification regulations, including the expanded requirements under HITECH, establish comprehensive federal standards with respect to the uses and disclosures of protected health information, or PHI, by health plans, healthcare providers and healthcare clearinghouses, in addition to setting standards to protect the 76 confidentiality, integrity and security of PHI.
While we work closely with our 56 CMOs on the manufacturing process for our drug product candidates, including quality audits, we generally do not control the implementation of the manufacturing process of, and are completely dependent on, our CMOs for compliance with GMP regulatory requirements and for manufacture of both active drug substances and finished drug products.
While we work closely with our CMOs on the manufacturing process for our drug product candidates, including quality audits, we generally do not control the implementation of the manufacturing process of, and are completely dependent on, our CMOs for compliance with GMP regulatory requirements and for manufacture of both active drug substances and finished drug products.
Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of the reference products in a way that is similar to traditional generic substitution for non-biological products will depend on a number of marketplace and regulatory factors that are still 65 developing.
Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of the reference products in a way that is similar to traditional generic substitution for non-biological products will depend on a number of marketplace and regulatory factors that are still developing.
Nonetheless, the approval of a biosimilar to our drug product candidates would have a material adverse impact on our business due to increased competition and pricing pressure. We may seek fast track designation or breakthrough therapy and priority review programs for our drug product candidates.
Nonetheless, the approval of a biosimilar to our drug product candidates would have a material adverse impact on our business due to increased competition and pricing pressure. 64 We may seek fast track designation or breakthrough therapy and priority review programs for our drug product candidates.
For us to develop any products that might ultimately be commercialized, we will have to invest further time and capital in research and product development, regulatory compliance and market development. We and our licensor, prospective business partners and other collaborators may never develop any products that can be commercialized.
For us to develop any products that might ultimately be commercialized, we will have to invest further time and capital in research and product 47 development, regulatory compliance and market development. We and our licensor, prospective business partners and other collaborators may never develop any products that can be commercialized.
Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under 75 Medicare Part B and Part D.
Specifically, with respect to price negotiations, Congress authorized Medicare to negotiate lower prices for certain costly single-source drug and biologic products that do not have competing generics or biosimilars and are reimbursed under Medicare Part B and Part D.
Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product.
Even if marketing approval of a product candidate is granted, the approval may be subject to limitations on the indicated uses for which the product may be marketed or to the conditions of 67 approval, or contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the product.
There are a limited number of suppliers for raw materials that we use to manufacture our products and drug product candidates and we may need to assess alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our drug product candidates for our clinical trials.
There are a limited number of suppliers for raw materials that we use to manufacture 56 our products and drug product candidates and we may need to assess alternate suppliers to prevent a possible disruption of the manufacture of the materials necessary to produce our drug product candidates for our clinical trials.
For example, the clinical trial must be well designed and conducted and performed by qualified investigators in accordance with good clinical practice. The FDA must be able to validate the data from the trial through an onsite inspection if necessary.
For example, the clinical trial must be well designed and conducted and 66 performed by qualified investigators in accordance with good clinical practice. The FDA must be able to validate the data from the trial through an onsite inspection if necessary.
We can give no assurance that we could find satisfactory replacements for our current and future key scientific and management employees on terms that would not be unduly expensive or burdensome to us.
We can give 54 no assurance that we could find satisfactory replacements for our current and future key scientific and management employees on terms that would not be unduly expensive or burdensome to us.
Further, if this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case, and our competitive position, business, financial condition, results of operations, and prospects could be materially harmed. 61 If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our drug product candidates.
Further, if this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case, and our competitive position, business, financial condition, results of operations, and prospects could be materially harmed. 60 If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our drug product candidates.
Under the Federal Food, Drug and Cosmetic Act, or the FDCA, and implementing regulations, the FDA may grant accelerated approval to a product candidate to treat a serious or life-threatening condition that provides meaningful therapeutic benefit over available therapies, upon a determination that the product has an effect on a surrogate endpoint or intermediate 66 clinical endpoint that is reasonably likely to predict clinical benefit.
Under the Federal Food, Drug and Cosmetic Act, or the FDCA, and implementing regulations, the FDA may grant accelerated approval to a product candidate to treat a serious or life-threatening condition that provides meaningful therapeutic 65 benefit over available therapies, upon a determination that the product has an effect on a surrogate endpoint or intermediate clinical endpoint that is reasonably likely to predict clinical benefit.
Relying on third-party clinical investigators, CROs, CMOs or collaborators may result in delays that are outside of our control. 49 Furthermore, we may not have the financial resources to continue development of, or to enter into collaborations for, a product candidate if we experience any problems or other unforeseen events that delay or prevent regulatory approval of, or our ability to commercialize, drug product candidates, including: • negative or inconclusive results from our IND-enabling studies, clinical trials or the clinical trials of other drug product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program; • delays in submitting INDs or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced; • conditions imposed by the FDA or a foreign regulatory authority regarding the number, scope or design of our clinical trials; • delays in enrolling patients in clinical trials; • high drop-out rates of patients; • inadequate supply or quality of clinical trial materials or other supplies necessary to conduct our clinical trials; • greater than anticipated clinical trial costs; • poor effectiveness or unacceptable side effects of our drug product candidates during clinical trials; • unfavorable FDA or other regulatory agency inspection and review of a clinical trial site; • difficulty in establishing or managing relationships with CROs, CMOs, and clinical investigators; • failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; • serious and unexpected drug-related side effects or other safety issues experienced by participants in our clinical trials or by individuals using drugs similar to our drug product candidates; • delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our technology in particular; or • varying interpretations of data by the FDA and foreign regulatory authorities.
Furthermore, we may not have the financial resources to continue development of, or to enter into collaborations for, a product candidate if we experience any problems or other unforeseen events that delay or prevent regulatory approval of, or our ability to commercialize, drug product candidates, including: • negative or inconclusive results from our IND-enabling studies, clinical trials or the clinical trials of other drug product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program; • delays in submitting INDs or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced; • conditions imposed by the FDA or a foreign regulatory authority regarding the number, scope or design of our clinical trials; • delays in enrolling patients in clinical trials; • high drop-out rates of patients; • inadequate supply or quality of clinical trial materials or other supplies necessary to conduct our clinical trials; • greater than anticipated clinical trial costs; • poor effectiveness or unacceptable side effects of our drug product candidates during clinical trials; • unfavorable FDA or other regulatory agency inspection and review of a clinical trial site; • difficulty in establishing or managing relationships with CROs, CMOs, and clinical investigators; • failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all; 49 • serious and unexpected drug-related side effects or other safety issues experienced by participants in our clinical trials or by individuals using drugs similar to our drug product candidates; • delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our technology in particular; or • varying interpretations of data by the FDA and foreign regulatory authorities.
The termination of this license agreement would have a material adverse effect on our financial condition, results of operations, and prospects. 59 If we are unable to patent and protect the intellectual property used in our potential products, others may be able to copy our innovations, which may impair our ability to compete effectively in our markets.
The termination of this license agreement would have a material adverse effect on our financial condition, results of operations, and prospects. 58 If we are unable to patent and protect the intellectual property used in our potential products, others may be able to copy our innovations, which may impair our ability to compete effectively in our markets.
Our research and development efforts remain subject to all of the risks associated with the development of new biopharmaceutical products and treatments based on immune modulation.
Our research and development efforts remain subject to all of the risks associated with the development of new biopharmaceutical products and treatments based on 48 immune modulation.
The Draft Framework sets forth the factors that an agency may consider when deciding whether to exercise march-in rights pursuant to 63 the Bayh-Dole Act and includes a first-ever specification that price can be a factor in determining that a drug or other taxpayer-funded invention is not accessible to the public.
The Draft Framework sets forth the factors that an agency may consider when deciding whether to exercise march-in rights pursuant to the Bayh-Dole Act and includes a first-ever specification that price can be a factor in determining that a drug or other 62 taxpayer-funded invention is not accessible to the public.
Similarly, failure to comply with federal and state laws regarding privacy and security of personal information could expose us to fines and penalties under such laws.
Similarly, failure to comply with federal and state laws 79 regarding privacy and security of personal information could expose us to fines and penalties under such laws.
The majority of the intellectual property rights we have licensed are generated through the use of U.S. government funding and are therefore subject to certain federal regulations. As a result, the U.S. government may have certain rights to 60 intellectual property embodied in our current or future drug product candidates pursuant to the Bayh-Dole Act of 1980, or Bayh-Dole Act.
The majority of the intellectual property rights we have licensed are generated through the use of U.S. government funding and are therefore subject to certain federal regulations. As a result, the U.S. government may have certain rights to 59 intellectual property embodied in our current or future drug product candidates pursuant to the Bayh-Dole Act of 1980, or Bayh-Dole Act.
The CPRA also created a new enforcement agency – the California Privacy Protection Agency – whose sole responsibility is to enforce the CPRA, which will further increase compliance risk. The provisions in the CPRA may apply to some of our business activities. In addition to California, eleven other states have passed comprehensive privacy laws similar to the CCPA and CPRA.
The CPRA also created a new enforcement agency – the California Privacy Protection Agency – whose sole responsibility is to enforce the CPRA, which will further increase compliance risk. The provisions in the CPRA may apply to some of our business activities. In addition to California, several other states have passed comprehensive privacy laws similar to the CCPA and CPRA.
Filing, prosecuting, maintaining and defending patents on drug product candidates in all countries throughout the world could be prohibitively expensive for us, and our intellectual property rights in some non-U.S. countries can have a 58 different scope and strength than do those in the United States.
Filing, prosecuting, maintaining and defending patents on drug product candidates in all countries throughout the world could be prohibitively expensive for us, and our intellectual property rights in some non-U.S. countries can have a 57 different scope and strength than do those in the United States.
There have been several recent U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid.
There have been U.S. congressional inquiries, as well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to pharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of pharmaceuticals under Medicare and Medicaid.
We cannot be certain that current or planned clinical trials will begin or be completed on time, if at all, or that our planned development programs would be acceptable to the FDA or other regulatory authorities, or that, if regulatory approval is obtained, our drug product candidates can be successfully commercialized.
We cannot be certain that our current or any future clinical trials will begin or be completed on time, if at all, or that our planned development programs would be acceptable to the FDA or other regulatory authorities, or that, if regulatory approval is obtained, our drug product candidates can be successfully commercialized.
For example, approved products, manufacturers and manufacturers’ facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to cGMPs. As such, we and our contract manufacturers will be subject to continual review and periodic inspections to assess compliance with cGMPs.
For example, approved products, manufacturers and manufacturers’ facilities are required to comply with extensive FDA requirements, including ensuring that quality control and manufacturing procedures conform to GMPs. As such, we and our contract manufacturers will be subject to continual review and periodic inspections to assess compliance with GMPs.
For example, the collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the European Union, including personal health data, is subject to the EU General Data Protection Regulation, or the GDPR, which took effect across all member states of the European Economic Area, or EEA, in May 2018.
For example, the collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the European Union, including personal health data, is subject to the EU General Data Protection Regulation, or the GDPR, which took effect across all member states of the EEA in May 2018.
Risks Related to Intellectual Property and Other Legal Matters If we or our licensor(s) is unable to protect our or its intellectual property, then our financial condition, results of operations and the value of our technology and potential products could be adversely affected.
Risks Related to Intellectual Property and Other Legal Matters If we or our licensor(s) are unable to protect our or its intellectual property, then our financial condition, results of operations and the value of our technology and potential products could be adversely affected.
Therefore, significant additional research and development activity and clinical testing are required before we and our collaborators will have a chance to achieve a commercially viable product from CUE-101, CUE-102 or our other drug product candidates.
Therefore, significant additional research and development activity and clinical testing are required before we and our collaborators will have a chance to achieve a commercially viable product from CUE-101, CUE-102, CUE-401, CUE-501 or our other drug product candidates.
The anti-bribery provisions of the FCPA are enforced primarily by the Department of Justice. The SEC is involved with enforcement of the books and records provisions of the FCPA. Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem.
The anti-bribery provisions of the FCPA are enforced primarily by the U.S. Department of Justice. The SEC is involved with enforcement of the books and records provisions of the FCPA. Compliance with the FCPA is expensive and difficult, particularly in countries in which corruption is a recognized problem.
The FDA may also require a REMS as a condition of approval of our drug product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
The FDA may also require a Risk Evaluation and Mitigation Strategy, or REMS, as a condition of approval of our drug product candidates, which could include requirements for a medication guide, physician communication plans or additional elements to ensure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
The manufacturing processes for CUE-101 and CUE-102 and our other drug product candidates are complex, and it may be difficult or impossible to finalize appropriate processes for the scaled manufacture of the drug product candidates.
The manufacturing processes for CUE-101, CUE-102, CUE-401, CUE-501 and our other drug product candidates are complex, and it may be difficult or impossible to finalize appropriate processes for the scaled manufacture of the drug product candidates.
We have only limited experience in filing and 62 supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs to assist us in this process.
We have only limited experience in filing and 61 supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs to assist us in this process.
For example, in December 2022, with the passage of FDORA, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product. These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products.
For example, in December 2022, with the passage of FDORA, Congress required sponsors to develop and submit a DAP for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product. These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products.
Our pledge of our assets as collateral to secure our obligations under our loan and security agreement, as amended, or the Loan Agreement, with First Citizens Bank (as defined below) (and formerly with Silicon Valley Bank, or SVB), may limit our ability to obtain additional debt financing.
Our pledge of our assets as collateral to secure our obligations under our loan and security agreement, as amended, or the Loan Agreement, with Silicon Valley Bank, or SVB, a division of First Citizens Bank (as defined below), may limit our ability to obtain additional debt financing.
The applicable legislation in the EU also requires sponsors to either conduct clinical trials in a pediatric population in accordance with a Pediatric Investigation Plan approved by the Pediatric Committee of the EMA, or to obtain a waiver or deferral from the conduct of these studies by the Pediatric Committee of the EMA.
The applicable legislation in the EU also requires sponsors to either conduct clinical trials in a pediatric population in accordance with a Pediatric Investigation Plan approved by the Pediatric Committee of the European Medicines Agency, or EMA, or to obtain a waiver or deferral from the conduct of these studies by the Pediatric Committee of the EMA.
On January 23, 2023, the FDA announced that, in matters beyond the scope of that court order, FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug was approved.
On January 23, 2023, the FDA announced that, in matters beyond the scope of the Catalyst court order, the FDA will continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug is approved.
Upon the occurrence of an event of default, which includes our failure to satisfy our payment obligations under the Loan Agreement, the breach of certain of these covenants under the Loan Agreement, or the occurrence of a material adverse change in our business, First Citizens Bank is entitled to accelerate amounts due under the Loan Agreement and dispose the collateral as permitted under applicable law.
Upon the occurrence of an event of default, which includes our failure to satisfy our payment obligations under the Loan Agreement, the breach of certain of these covenants under the Loan Agreement, or the occurrence of a material adverse change in our business, SVB is entitled to accelerate amounts due under the Loan Agreement and dispose the collateral as permitted under applicable law.
Under the Loan Agreement, we are also restricted from incurring future debt, granting liens, making investments, making acquisitions, distributing dividends on our common stock and selling assets and making certain other uses of our cash, without First Citizens Bank’s consent, subject in each case to certain exceptions.
Under the Loan Agreement, we are also restricted from incurring future debt, granting liens, making investments, making acquisitions, distributing dividends on our common stock and selling assets and making certain other uses of our cash, without SVB’s consent, subject in each case to certain exceptions.
Under the LG Chem Collaboration Agreement, we will engineer the selected Immuno-STAT for up to three alleles, which are expected to include the predominant alleles in the LG Chem Territory, while LG Chem will establish a CMC process for the development and commercialization of Drug Product Candidates.
Under the LG Chem Collaboration Agreement, we will engineer the selected Immuno-STAT for up to three alleles, which are expected to include the predominant alleles in the LG Chem Territory, while LG Chem will establish a chemistry, manufacturing and controls, or CMC, process for the development and commercialization of Drug Product Candidates.
Our business may be adversely affected by political instability, disruption or destruction in a geographic region in which we operate, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest, and natural or manmade disasters, including famine, flood, fire, earthquake, storm or pandemic events and spread of disease, such as the COVID-19 pandemic, and geopolitical conflicts.
Our business may be adversely affected by political instability, disruption or destruction in a geographic region in which we operate, regardless of cause, including war, terrorism, riot, civil insurrection or social unrest, and natural or manmade disasters, including famine, flood, fire, earthquake, storm or pandemic events and spread of disease, and geopolitical conflicts.
In addition, government funding of the SEC and other government agencies on which our operations may rely, including those that fund research and development activities or enable capital raising activities, is subject to the political process, which is inherently fluid and unpredictable.
In addition, government funding of 70 the Securities and Exchange Commission, or SEC, and other government agencies on which our operations may rely, including those that fund research and development activities or enable capital raising activities, is subject to the political process, which is inherently fluid and unpredictable.
In addition, under the PREA, a BLA or supplement to a BLA for certain biological products must contain data to assess the safety and effectiveness of the biological product in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless the sponsor receives a deferral or waiver from the FDA.
In addition, under the Pediatric Research Equity Act of 2003, a BLA or supplement to a BLA for certain biological products must contain data to assess the safety and effectiveness of the biological product in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless the sponsor receives a deferral or waiver from the FDA.
Currently, we use Catalent and Ajinomoto as our source of supply for manufacturing clinical supply of our lead product candidates, CUE-101 and CUE-102. If we experience multiple successive batch failures, or if supply from Catalent and Ajinomoto is otherwise interrupted, there could be a significant disruption in our drug product candidates supply.
Currently, we use Catalent and Ajinomoto as our source of supply for manufacturing clinical supply of our most advanced clinical stage assets, CUE-101 and CUE-102. If we experience multiple successive batch failures, or if supply from Catalent and Ajinomoto is otherwise interrupted, there could be a significant disruption in our drug product candidates supply.
Our ability to raise additional funds may be adversely impacted by general economic conditions, both inside and outside the U.S., including disruptions to, and instability and volatility in, the credit and financial markets in the U.S. and worldwide, heightened inflation, interest rate and currency rate fluctuations, and economic slowdown or recession as well as concerns related to pandemic events and spread of disease, such as the COVID-19 pandemic, and geopolitical events, including civil or political unrest.
Our ability to raise additional funds may be adversely impacted by general economic conditions, both inside and outside the U.S., including disruptions to, and instability and volatility in, the credit and financial markets in the U.S. and worldwide, heightened inflation, interest rate and currency rate fluctuations, the implementation of trade barriers and tariffs and economic slowdown or recession as well as concerns related to pandemic events, spread of disease and geopolitical events, including civil or political unrest.
District Court for the Northern District of Texas stayed the approval by the FDA of mifepristone, a drug product which was originally approved in 2000 and whose distribution is governed by various conditions adopted under a REMS.
District Court for the Northern District of Texas invalidated the approval by the FDA of mifepristone, a drug product which was originally approved in 2000 and whose distribution is governed by various measures adopted under a REMS.
We cannot be certain that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations. In addition, our clinical trials must be conducted with product produced under GMP regulations.
We cannot be certain that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCP regulations. In addition, our clinical trials must be conducted with product produced under current good manufacturing practices, or GMP, regulations.
Therefore, any estimated timing for our drug product candidates to be commercialized would be highly speculative. To date, we have invested substantial resources in an exclusive license with Einstein that forms the foundation for our drug product candidates and potential applications.
Therefore, any estimated timing for our drug product candidates to be commercialized would be highly speculative. To date, we have invested substantial resources in an exclusive license with Albert Einstein College of Medicine, or Einstein, that forms the foundation for certain of our drug product candidates and potential applications.
Accordingly, while it is currently unclear how the IRA will be effectuated, we cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition.
Accordingly, while it is currently unclear how the IRA will be effectuated, we cannot predict with certainty what impact any federal or state health reforms will have on us, but such changes could impose new or more stringent regulatory requirements on our activities or result in reduced reimbursement for our products, any of which could adversely affect our business, results of operations and financial condition. 75 In addition, we will need to carefully navigate the IRA and its provisions governing orphan drugs.
We have a loan agreement that requires us to meet certain operating covenants and place restrictions on our operating and financial flexibility. On February 15, 2022, we entered into the Loan Agreement with SVB, which was later assumed by First Citizens Bank, pursuant to which we have borrowed $10.0 million. The Loan Agreement was amended in April 2023.
We have a loan agreement that requires us to meet certain operating covenants and place restrictions on our operating and financial flexibility. On February 15, 2022, we entered into the Loan Agreement with SVB, which has been assumed by First Citizens Bank, pursuant to which we have borrowed $10.0 million.
We may focus our efforts and resources on potential drug product candidates or other potential programs that ultimately prove to be unsuccessful. We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively. The biotechnology and pharmaceutical industries are characterized by intense competition and rapid innovation.
We may focus our efforts and resources on potential drug product candidates or other potential programs that ultimately prove to be unsuccessful. We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.
During this 12-year period of exclusivity, another company may still develop and receive approval of a competing biologic, so long as its BLA does not reply on the reference product, sponsor’s data or submit the application as a biosimilar application. The law is complex and is still being interpreted and implemented by the FDA.
During this 12-year period of exclusivity, another company may still develop and receive approval of a competing biologic, so long as its BLA does not reply on the reference product, sponsor’s data or submit the application as a biosimilar application.
Our stock price may be affected by many factors, including: • setbacks with respect to our research and development programs; • announcements of therapeutic innovations or new products by us or our competitors; • adverse actions taken by regulatory agencies with respect to our clinical trials; • any adverse changes to our relationship with collaborators; • results of internal and external studies and clinical trials; • results of our business development efforts; • variations in the level of expenses related to our existing drug product candidates or preclinical and clinical development programs; • any intellectual property infringement actions in which we may become involved; • variations in our results of operations; • press reports, whether or not true, about our business; • additions to or departures of our management; 85 • sales or perceived potential sales of additional shares of our common stock; • sales of our common stock by us, our executive officers and directors or our stockholders in the future; and • general economic and market conditions and overall fluctuations in the U.S. equity markets.
Our stock price may be affected by many factors, including: • setbacks with respect to our research and development programs; • announcements of therapeutic innovations or new products by us or our competitors; • adverse actions taken by regulatory agencies with respect to our clinical trials; • any adverse changes to our relationship with collaborators; • results of internal and external studies and clinical trials; • results of our business development efforts; 84 • variations in the level of expenses related to our existing drug product candidates or preclinical and clinical development programs; • any intellectual property infringement actions in which we may become involved; • variations in our results of operations; • press reports, whether or not true, about our business; • additions to or departures of our management; • sales or perceived potential sales of additional shares of our common stock; • sales of our common stock by us, our executive officers and directors or our stockholders in the future; and • general economic and market conditions, including recent adverse changes in the domestic and international financial markets, the impacts of inflation and the implementation of trade barriers and tariffs and government action in response thereto.
Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.
These sales, or the perception in the market that holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeSpecific cybersecurity related 89 responsibilities of the Senior Director of Information Technology and Cyber Security include overseeing our processes and strategies for the detection, mitigation, and remediation of cybersecurity incidents.
Biggest changeSpecific cybersecurity related responsibilities of the Information Technology and Cyber Security Manager include overseeing our processes and strategies for the detection, mitigation, and remediation of cybersecurity incidents. Our Information Technology and Cyber Security Manager has over 17 years of experience in information technology and cybersecurity, enabling him to effectively oversee cybersecurity risks and threats.
The Audit Committee regularly meets with members of management responsible for data privacy, technology, and information security risks to discuss these risks, risk management activities, incident response plans, best practices, the effectiveness of our security measures, and other related matters.
The Audit Committee regularly meets with members of 89 management responsible for data privacy, technology, and information security risks to discuss these risks, risk management activities, incident response plans, best practices, the effectiveness of our security measures, and other related matters.
Our Senior Director of Information Technology and Cyber Security, who reports to our Chief Financial Officer, leads the operational oversight of company-wide cybersecurity strategy, policy, standards, and processes and works across relevant departments to assess and help prepare us and our employees to address cybersecurity risks.
Our Information Technology and Cyber Security Manager, who reports to our Chief Financial Officer , leads the operational oversight of company-wide cybersecurity strategy, policy, standards, and processes and works across relevant departments to assess and help prepare us and our employees to address cybersecurity risks.
In an effort to deter and detect cyber threats, we provide all employees, including any part-time employees, with a data protection, cybersecurity, and incident response and prevention training program designed to educate employees on the importance of identifying and reporting all potential data security incidents immediately.
He helped design and implement our initial cybersecurity infrastructure. In an effort to deter and detect cyber threats, we provide all employees, including any part-time employees, with a data protection, cybersecurity, and incident response and prevention training program designed to educate employees on the importance of identifying and reporting all potential data security incidents immediately.
Our security incident response plan is designed to help coordinate our response to, and recovery from, any cybersecurity incidents, and includes processes to assess the severity of, escalate, contain, investigate, and remediate such incidents as well as to comply with applicable legal obligations. We engage certain external parties to enhance our cybersecurity processes and strategies.
Our security incident response plan is designed to help coordinate our response to, and recovery from, any cybersecurity incidents, and includes processes to assess the severity of, escalate, contain, investigate, and remediate such incidents as well as to comply with applicable legal obligations.
Depending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider, we evaluate the security and risk posture of such providers according to the perceived level of risk and in accordance with industry standard best practices.
Depending on the nature of the services provided, the sensitivity and quantity of information processed, and the identity of the service provider , we evaluate the security and risk posture of third-party service providers according to the perceived level of risk and benchmarked against industry standard best practices.
We do not believe that there are currently any known risks from cybersecurity threats that are reasonably likely to materially affect us or our business strategy, results of operations or financial condition. Despite our cybersecurity efforts, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
We do not believe that there are currently any risks from known cybersecurity threats that have materially affected or are reasonably likely to materially affect us or our business strategy, results of operations or financial condition.
See Part I, Item 1A, Risk Factors, in this Annual Report for a discussion of cybersecurity risks. We maintain cyber insurance coverage; however, such insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks, and other related breaches.
We maintain cyber insurance coverage; however, such insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks, and other related breaches.
Removed
Our Senior Director of Information Technology and Cyber Security has over 25 years of diverse experience in information technology, including management roles at managed service providers, enabling him to effectively oversee cybersecurity risks and threats.
Added
In response to the complexity and evolving nature of cybersecurity threats, incidents and risks, we engage with a range of third-party experts, including cybersecurity penetration testers, data protection services, security awareness and training, and AI based security services in evaluating and supporting our risk management.
Added
Our collaboration with these third parties includes regular independent audits, threat assessments, and consultation on security enhancements.
Added
Despite our cybersecurity efforts, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. See Part I, Item 1A, Risk Factors, in this Annual Report for a discussion of cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe use this space as our principal executive offices and for general office, research and development, and laboratory uses. The monthly rental rate was $209,700 until April 2023, when it increased to $218,088. In April 2024, it will increase to $226,812 and in April 2025 will increase to $235,884 for the remainder of the term through April 2026.
Biggest changeWe use this space as our principal executive offices and for general office, research and development, and laboratory uses. The monthly rental rate was $209,700 until April 2023, when it increased to $218,088. In April 2024, it increased to $226,812 and in April 2025 it will increase to $235,884 for the remainder of the term through April 2026.
We also lease additional laboratory space consisting of one procedure and two holding rooms. The monthly payments due under this lease agreement were $59,153 until November 2023, when they increased to $61,519 for the remainder of the lease term which expires on December 1, 2024.
We also lease additional laboratory space consisting of one procedure and two holding rooms. The monthly payments due under this lease agreement were $59,153 until November 2023, when they increased to $61,519 for the remainder of the lease term which expired on December 1, 2024.
Added
On November 20, 2024, we extended the lease for the additional laboratory space through July 14, 2026. The monthly rental rate is $61,519 through November 30, 2025 and $63,979 for the remainder of the term until July 14, 2026.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRecent Sales of Unregistered Securities During the period covered by this Annual Report on Form 10-K, we did not issue any unregistered equity securities other than pursuant to transactions previously disclosed in our Current Reports on Form 8-K. Item 6. [Reserv ed] 91
Biggest changeRecent Sales of Unregistered Securities Other than as set forth below, during the period covered by this Annual Report on Form 10-K, we did not issue any unregistered equity securities other than pursuant to transactions previously disclosed in our Current Reports on Form 8-K.
As of March 25, 2024, there were approximately 86 registered holders of our common stock. Dividend Policy We have never paid cash dividends on our securities and we do not anticipate paying any cash dividends on our shares of common stock in the foreseeable future.
As of March 27, 2025, there were approximately 85 registered holders of our common stock. Dividend Policy We have never paid cash dividends on our securities and we do not anticipate paying any cash dividends on our shares of common stock in the foreseeable future.
Added
On November 25, 2024, we granted to an employee an option to purchase 200,000 shares of our common stock. This option was made as an inducement material to such individual’s acceptance of an offer of employment with us in accordance with Nasdaq Listing Rule 5635(c)(4).
Added
We intend to file a registration statement on a Form S-8 to register the shares of common stock underlying this inducement award prior to the time at which the award becomes exercisable.

Item 7. Management's Discussion & Analysis

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

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Biggest changeYears Ended December 31, 2023 2022 (in thousands) Collaboration revenue $ 5,490 $ 1,245 Operating expenses (income): General and administrative 16,680 16,169 Research and development 40,802 38,578 Loss (gain) on fixed asset disposal and right-of-use asset termination 157 (277 ) Total operating expenses 57,639 54,470 Loss from operations (52,149 ) (53,225 ) Other income (expense): Interest income 2,661 928 Interest expense (1,245 ) (713 ) Total other income (expense), net 1,416 215 Net loss $ (50,733 ) $ (53,010 ) Unrealized gain (loss) from available-for-sale securities 96 (96 ) Comprehensive loss $ (50,637 ) $ (53,106 ) Net loss per common share – basic and diluted $ (1.11 ) $ (1.49 ) Weighted average common shares outstanding – basic and diluted 45,754,794 35,649,134 Collaboration Revenue Collaboration revenue totaled approximately $5,490,000 and $1,245,000 for the years ended December 31, 2023 and 2022, respectively.
Biggest changeResults of Operations Years Ended December 31, 2024 and 2023 Our consolidated statements of operations for the years ended December 31, 2024 and 2023, as discussed herein are presented below. 2024 2023 Collaboration revenue $ 9,287 $ 5,490 Operating expenses (income): General and administrative 14,585 16,680 Research and development 36,295 40,802 (Gain) loss on fixed asset disposal (93 ) 157 Total operating expenses 50,787 57,639 Loss from operations (41,500 ) (52,149 ) Other income (expense): Interest income 1,622 2,661 Interest expense (796 ) (1,245 ) Total other income, net 826 1,416 Net loss $ (40,674 ) $ (50,733 ) 98 Collaboration Revenue Collaboration revenue increased by $3.8 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Collaboration Agreement with Ono On February 22, 2023, we entered into a strategic collaboration agreement, or the Ono Collaboration and Option Agreement, with Ono Pharmaceutical Co., Ltd., or Ono, to further develop CUE-401 and provide dedicated resources and capabilities to help advance CUE-401 toward the clinic.
Collaboration and Option Agreement with Ono On February 22, 2023, we entered into a strategic collaboration agreement, or the Ono Collaboration and Option Agreement, with Ono Pharmaceutical Co., Ltd., or Ono, to further develop CUE-401 and provide dedicated resources and capabilities to help advance CUE-401 toward the clinic.
In October 2021, we entered into an open market sale agreement, or the October 2021 ATM Agreement, with Jefferies LLC, or Jefferies, to sell shares of our common stock for aggregate gross proceeds of up to $80.0 million, from time to time, through an "at-the-market" equity offering program under which Jefferies acts as sales agent.
In October 2021, we entered into an open market sale agreement, or the ATM Sales Agreement, with Jefferies LLC, or Jefferies, to sell shares of our common stock for aggregate gross proceeds of up to $80.0 million, from time to time, through an "at-the-market" equity offering program under which Jefferies acts as sales agent.
On November 14, 2022, we entered into securities purchase agreements with accredited investors pursuant to which, on November 16, 2022, we issued and sold to such investors in a private placement an aggregate of 7,656,966 shares of common stock and, in lieu of shares of common stock to certain investors, pre-funded warrants, or Pre-Funded Warrants, to purchase an aggregate of 1,531,440 shares of common stock, and, in each case, accompanying warrants, or Warrants, to purchase an aggregate of up to 9,188,406 additional shares of common stock (or Pre-Funded Warrants in lieu thereof) at a price of $3.265 per share and accompanying Warrant (or $3.2649 per Pre-Funded Warrant and accompanying Warrant), or the PIPE Financing.
On November 14, 2022, we entered into securities purchase agreements with accredited investors pursuant to which, on November 16, 2022, we issued and sold to such investors in a private placement an aggregate of 7,656,966 shares of common stock and, in lieu of shares of common stock to certain investors, pre-funded warrants, or the 2022 Pre-Funded Warrants, to purchase an aggregate of 1,531,440 shares of common stock, and, in each case, accompanying warrants, or the 2022 Common Stock Warrants, to purchase an aggregate of up to 9,188,406 additional shares of common stock (or 2022 Pre-Funded Warrants in lieu thereof) at a price of $3.265 per share and accompanying 2022 Common Stock Warrant (or $3.2649 per 2022 Pre-Funded Warrant and accompanying 2022 Common Stock Warrant), or the PIPE Financing.
We are also eligible to receive additional aggregate payments of up to approximately $400.0 million if certain research, development, regulatory and commercial milestones are successfully achieved. On May 16, 2019, we earned a $2.5 million milestone payment for the FDA’s acceptance of the IND for our lead drug product candidate, CUE-101, pursuant to the LG Chem Collaboration Agreement.
We are also eligible to receive additional aggregate payments of up to $400.0 million if certain research, development, regulatory and commercial milestones are successfully achieved. On May 16, 2019, we earned a $2.5 million milestone payment for the FDA’s acceptance of the IND for our lead drug product candidate, CUE-101, pursuant to the LG Chem Collaboration Agreement.
Under the terms of the LG Chem Collaboration Agreement, LG Chem paid us a $5.0 million non-refundable, non-creditable upfront payment and purchased approximately $5.0 million of shares of our common stock at a price per share equal to a 20% premium to the volume weighted-average closing price per share over the 30 trading day period immediately prior to the effective date of the LG Chem Collaboration Agreement.
Under the terms of the LG Chem Collaboration Agreement, LG Chem paid us a $5.0 million non-refundable, non-creditable upfront payment and purchased $5.0 million of shares of our common stock at a price per share equal to a 20% premium to the volume weighted-average closing price per share over the 30 trading day period immediately prior to the effective date of the LG Chem Collaboration Agreement.
Likewise, should we determine that we would not be able to realize all or part of our deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to operations in the period such determination was made. 94 We are subject to U.S. federal and Massachusetts state income taxes.
Likewise, should we determine that we would not be able to realize all or part of our deferred tax assets in the future, an adjustment to the deferred tax assets would be charged to operations in the period such determination was made. We are subject to U.S. federal and Massachusetts state income taxes.
On March 27, 2023, First Citizens Bank assumed all of SVB’s deposits and certain other liabilities and acquired substantially all of SVB’s loans and certain other assets from the FDIC. First Citizens Bank continues to hold our Term Loans 100 under the same existing terms and covenants which were in place with SVB.
On March 27, 2023, First Citizens Bank assumed all of SVB’s deposits and certain other liabilities and acquired substantially all of SVB’s loans and certain other assets from the FDIC. First Citizens Bank continues to hold our Term Loans under the same existing terms and covenants which were in place with SVB.
The Einstein License includes certain termination provisions that will be triggered if we fail to meet our obligations thereunder. We account for the costs incurred in connection with the Einstein License in accordance with ASC 730, Research and Development .
The Einstein License includes certain termination provisions that will be triggered if we fail to meet our obligations thereunder. 95 We account for the costs incurred in connection with the Einstein License in accordance with ASC 730, Research and Development .
Per the Ono Collaboration and Option Agreement, as consideration for the R&D activities performed by us, Ono (i) has made a one-time, non-refundable, non-creditable upfront payment of $3.0 million to us in March 2023, and (ii) will reimburse us for all costs incurred in conducting research, including (a) pass through costs from third party contractors and (b) full time employee salaries capped at $2.1 million in the first 18 months of the Research Term.
Per the Ono Collaboration and Option Agreement, as consideration for the R&D activities performed by us, Ono (i) has made a one-time, non-refundable, non-creditable upfront payment of $3.0 million to us in March 2023, and (ii) agreed to reimburse us for all costs incurred in conducting research, including (a) pass through costs from third party contractors and (b) full time employee salaries capped at $2.1 million in the first 18 months of the Research Term.
Pursuant to the LG Chem Collaboration Agreement, we granted LG Chem an exclusive license to develop, manufacture and commercialize our lead product, CUE-101, as well as Immuno-STATs that target T cells against two additional cancer antigens, or the Drug Product Candidates, in Australia, Japan, Republic of Korea, Singapore, Malaysia, Vietnam, Thailand, Philippines, Indonesia, China (including Macau and Hong Kong) and Taiwan, which we refer to collectively as the LG Chem Territory.
Pursuant to the LG Chem Collaboration Agreement, we granted LG Chem an exclusive license to develop, manufacture and commercialize CUE-101, as well as Immuno-STATs that target T cells against two additional cancer antigens, or the Drug Product Candidates, in Australia, Japan, Republic of Korea, Singapore, Malaysia, Vietnam, Thailand, Philippines, Indonesia, China (including Macau and Hong Kong) and Taiwan, which we refer to collectively as the LG Chem Territory.
GAAP. The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements, and the reported revenue and expenses during the reported periods.
The preparation of our financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of our financial statements, and the reported revenue and expenses during the reported periods.
Significant Contracts and Agreements Related to Research and Development Activities Einstein License Agreement On January 14, 2015, we entered into a license agreement, as amended and restated on July 31, 2017, and as amended on October 30, 2018, or the Einstein License, with Albert Einstein College of Medicine, or Einstein, for certain patent rights, or the Patents, relating to our core technology platform for the engineering of biologics to control T cell activity, precision, immune-modulatory drug product candidates, and two supporting technologies that enable the discovery of costimulatory signaling molecules (ligands) and T cell targeting peptides.
Significant Contracts and Agreements Related to Research and Development Activities Einstein License Agreement On January 14, 2015, we entered into a license agreement, as amended and restated on July 31, 2017, and as further amended on October 30, 2018 and January 13, 2024, or the Einstein License, with Albert Einstein College of Medicine, or Einstein, for certain patent rights, or the Patents, relating to our core technology platform for the engineering of biologics to control T cell activity, precision, immune-modulatory drug product candidates, and two supporting technologies that enable the discovery of costimulatory signaling molecules (ligands) and T cell targeting peptides.
There were no material changes to our critical accounting policies and estimates during the year ended December 31, 2023. Revenue Recognition We recognize collaboration revenue under certain of our license and collaboration agreements that are within the scope of Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers .
There were no material changes to our critical accounting policies and estimates during the year ended December 31, 2024. Revenue Recognition We recognize collaboration revenue under certain of our license and collaboration agreements that are within the scope of Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers .
The Loan Agreement was amended in April 2023. The term loans under the Loan Agreement, or the Term Loans, bear interest at a floating rate per annum equal to the greater of (A) the prime rate (as published in the money rates section of The Wall Street Journal) plus 2.25% and (B) 5.50%.
The Loan Agreement was amended in April 2023 and October 2024. The term loans under the Loan Agreement, or the Term Loans, bear interest at a floating rate per annum equal to the greater of (A) the prime rate (as published in the money rates section of The Wall Street Journal) plus 2.25% and (B) 5.50%.
We were in compliance with our obligations under the Einstein License at December 31, 2023 and 2022. The Einstein License expires upon the expiration of the last obligation to make royalty payments to Einstein which may be due with respect to certain Licensed Products, unless terminated earlier under the provisions thereof.
We were in compliance with our obligations under the Einstein License at December 31, 2024 and 2023. The Einstein License expires upon the expiration of the last obligation to make royalty payments to Einstein which may be due with respect to certain Licensed Products, unless terminated earlier under the provisions thereof.
For the years ended December 31, 2023 and 2022, there is no provision for income taxes in the U.S. because we have historically incurred net operating losses and maintain a full valuation allowance against our net deferred assets.
For the years ended December 31, 2024 and 2023, there is no provision for income taxes in the U.S. because we have historically incurred net operating losses and maintain a full valuation allowance against our net deferred assets.
Aside from the $3.0 million upfront payment and funding related to pass through costs, we do not believe that any variable consideration should be included in the transaction price as of December 31, 2023.
Aside from the $3.0 million upfront payment and funding related to pass through costs, we do not believe that any variable consideration should be included in the transaction price as of December 31, 2024.
We evaluate these estimates and judgments, 92 including those described below, on an ongoing basis.
We evaluate these estimates and judgments, including those described below, on an ongoing basis.
We will need to raise additional capital or incur additional indebtedness to continue to fund our operations in the future. Our ability to raise additional funds will depend on financial, economic and market conditions, many of which are outside of our control, and we may be unable to raise financing when needed, or on terms favorable to us.
We will need to raise additional capital or incur additional indebtedness to continue to fund our operations in the near term. Our ability to raise additional funds will depend on financial, economic and market conditions, many of which are outside of our control, and we may be unable to raise financing when needed, or on terms favorable to us.
Under the terms of the Ono Collaboration and Option Agreement, Ono paid us an upfront payment and agreed to fully fund all research activities related to CUE-401 through a specified option period. During this option period, we will be responsible for the research and development of CUE-401.
Under the terms of the Ono Collaboration and Option Agreement, Ono paid us an upfront payment and agreed to fully fund all research activities related to CUE-401 through a specified option period. During this option period, we were responsible for the research and development of CUE-401.
During the years ended December 31, 2023 and 2022, we did not recognize any income tax related interest and penalties. We did not have any accruals for income tax related interest and penalties at December 31, 2023 and 2022.
During the years ended December 31, 2024 and 2023, we did not recognize any income tax related interest and penalties. We did not have any accruals for income tax related interest and penalties at December 31, 2024 and 2023.
Since we currently believe that our existing cash and cash equivalents, as of December 31, 2023, will enable us to fund our operations into the first quarter of 2025, we have determined that this cash runway of less than 12 months from the date of issuance of our financial statements included in this Annual Report on Form 10-K, along with our accumulated deficit, history of losses, and future expected losses meet the ASC 205-40 standard for raising substantial doubt about our ability to continue as a going concern within one year of the issuance date of our financial statements included in this Annual Report on Form 10-K.
Since we currently believe that our existing cash and cash equivalents, as of December 31, 2024, and our current operating plan will enable us to fund our operations into the fourth quarter of 2025, we have determined that this cash runway of less than 12 months from the date of issuance of our financial statements included in this Annual Report on Form 10-K, along with our accumulated deficit, history of losses, and future expected losses meet the ASC 205-40 standard for raising substantial doubt about our ability to continue as a going concern within one year of the issuance date of our financial statements included in this Annual Report on Form 10-K.
Cash Flows Based on our current plans and forecasted expenses, we believe that our existing cash and cash equivalents, as of December 31, 2023, will enable us to fund our operations into the first quarter of 2025. However, we will need to raise additional capital to fund our future operations and remain as a going concern.
Cash Flows Based on our current plans and forecasted expenses, we believe that our existing cash and cash equivalents, as of December 31, 2024, will enable us to fund our operations into the fourth quarter of 2025. However, we will need to raise additional capital to fund our future operations and remain as a going concern.
Factors that may affect our planned future capital requirements and accelerate our need for additional working capital include the following: • the progress, timing, scope and costs of our clinical trials, including the ability to timely enroll patients in our ongoing, planned and potential future clinical trials; • the outcome, timing and cost of regulatory approvals by the FDA and other comparable regulatory authorities, including the potential that the FDA or other comparable regulatory authorities may require that we perform more studies than those that we currently expect; • the number and characteristics of drug product candidates that we may in-license and develop; • our ability to successfully commercialize our drug product candidates, if approved; • the amount of sales and other revenues from drug product candidates that we may commercialize, if any, including the selling prices for such potential products and the availability of adequate third-party reimbursement; • selling and marketing costs associated with our potential products, including the cost and timing of expanding our marketing and sales capabilities; • the terms and timing of any potential future collaborations, licensing or other arrangements that we may establish; 103 • cash requirements of any future acquisitions and/or the development of other drug product candidates; • the costs of operating as a public company; • the cost and timing of completion of commercial-scale, outsourced manufacturing activities; • the time and cost necessary to respond to technological and market developments; • any disputes which may occur between us and our employees, collaborators, including Einstein, LG Chem and Ono, or other prospective business partners; and • the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.
Factors that may affect our planned future capital requirements and accelerate our need for additional working capital include the following: 102 • the progress, timing, scope and costs of our clinical trials, including the ability to timely enroll patients in our ongoing, planned and any future clinical trials; • our ability to secure third party support through partnerships and collaborations to further develop the CUE-100 series programs, including CUE-101 and CUE-102, as well as CUE-501; • the outcome, timing and cost of regulatory approvals by the FDA and other comparable regulatory authorities, including the potential that the FDA or other comparable regulatory authorities may require that we perform more studies than those that we currently expect; • the number and characteristics of drug product candidates that we may in-license and develop; • our ability to successfully commercialize our drug product candidates, if approved; • the amount of sales and other revenues from drug product candidates that we may commercialize, if any, including the selling prices for such potential products and the availability of adequate third-party reimbursement; • selling and marketing costs associated with our potential products, including the cost and timing of expanding our marketing and sales capabilities; • the terms and timing of any potential future collaborations, licensing or other arrangements that we may establish; • cash requirements of any future acquisitions and/or the development of other drug product candidates; • the costs of operating as a public company; • the cost and timing of completion of commercial-scale, outsourced manufacturing activities; • the time and cost necessary to respond to technological and market developments; • any disputes which may occur between us and our employees, collaborators, including Einstein, LG Chem and Ono, or other prospective business partners; and • the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.
Research and development expenses incurred under contracts are expensed ratably over the life of the underlying contracts, unless the achievement of milestones, the completion of contracted work, or other information indicates that a different pattern of performance is more appropriate.
Research and development expenses incurred under contracts are expensed ratably over the life of the underlying contracts, unless the achievement of milestones, the completion of contracted work, or other information indicates that a different pattern of performance is more appropriate. Other research and development expenses are charged to operations as incurred.
During this Research Term, we will be responsible for the execution of scientific investigation, nonclinical, preclinical, and clinical drug research and development activities designed to progress CUE-401 toward a potential IND and regulatory approval, collectively referred to as R&D. Ono is responsible for the funding of R&D activities performed by us.
During this Research Term, we were responsible for the execution of scientific investigation, nonclinical, preclinical, and clinical drug research and development activities designed to progress CUE-401 toward a potential IND and regulatory approval, collectively referred to as R&D. Ono was responsible for the funding of R&D activities performed by us.
As discussed in Note 1 of the Notes to the Consolidated Financial Statements under Accounting Standards Update, or ASU, 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40), or, ASC 205-40, we have the responsibility to evaluate whether conditions or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year after the date the financial statements are issued.
Under Accounting Standards Update, or ASU, 2014-15, Presentation of Financial Statements—Going Concern (Subtopic 205-40), or, ASC 205-40, we have the responsibility to evaluate whether conditions or events raise substantial doubt about our ability to meet our future financial obligations as they become due within one year after the date the financial statements are issued.
We recognized a right of use asset of approximately $9,056,000 and an operating lease liability of approximately $9,056,000 which were recorded as of the Term Commencement Date (as defined below) related to the License. The term of the License commenced on April 15, 2022, or the Term Commencement Date, and expires on April 14, 2026, or the Term.
We recognized a right of use asset of $9.1 million and an operating lease liability of $9.1 million which were recorded as of the Term Commencement Date (as defined below) related to the License. The term of the License commenced on April 15, 2022, or the Term Commencement Date, and expires on April 14, 2026, or the Term.
As of December 31, 2023, two of these milestones had been achieved, as we had filed an IND in 2019, and initiated the investigator sponsored Phase 1b neoadjuvant clinical trial for CUE-101 in 2021. • Incur minimum product development costs per year and meet certain diligence obligations until the first commercial sale of the first Licensed Product.
As of December 31, 2024, two of these milestones had been achieved, as we had filed an investigational new drug application, or IND, in 2019, and initiated the investigator sponsored Phase 1b neoadjuvant clinical trial for CUE-101 in 2021. • Incur minimum product development costs per year and meet certain diligence obligations until the first commercial sale of the first Licensed Product.
The October 2021 ATM Agreement will terminate upon the earliest of (a) the sale of $80.0 million of shares of our common stock pursuant to the October 2021 ATM Agreement or (b) the termination of the October 2021 ATM Agreement by us or Jefferies.
The ATM Sales Agreement will terminate 99 upon the earliest of (a) the sale of $80.0 million of shares of our common stock pursuant to the ATM Sales Agreement or (b) the termination of the ATM Sales Agreement by us or Jefferies.
The exercise price of the Warrants is $3.93 per share, or if exercised for a Pre-Funded Warrant in lieu thereof, $3.9299 per Pre-Funded Warrant. The Warrants are exercisable at any time after they are issued and ending on the fifth anniversary of the closing. The Pre-Funded Warrants are exercisable at any time after they are issued and will not expire.
The exercise price of the 2022 Common Stock Warrants is $3.93 per share, or if exercised for a 2022 Pre-Funded Warrant in lieu thereof, $3.9299 per 2022 Pre-Funded Warrant. The 2022 Common Stock Warrants are exercisable at any time after they are issued and ending on the fifth anniversary of the closing.
The tax effects of a position are recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date. If the tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are recognized.
The tax effects of a position are recognized only if it is “more-likely-than-not” to be sustained by the taxing authority as of the reporting date.
Our expenses will also increase if, and as, we: • continue the clinical development of our CUE-100 series, including CUE-101 and CUE-102; • leverage our programs to advance our other drug product candidates into preclinical and clinical development; • seek regulatory approvals for any drug product candidates for which we successfully complete clinical trials; • seek to discover and develop additional drug product candidates in the CUE-100 series, including Neo-STATs; • establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any drug product candidates for which we may obtain marketing approval and intend to commercialize on our own or jointly; • hire additional clinical, quality control and scientific personnel; • expand our manufacturing, quality, operational, financial and management systems; • increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company; 102 • maintain, expand and protect our intellectual property portfolio; • acquire or in-license other drug product candidates and technologies; and • incur additional legal, accounting and other expenses in operating as a public company.
Our expenses will also increase if, and as, we: • continue to assess maturing clinical data of our CUE-100 series, including CUE-101 and CUE-102, which we have deprioritized; • continue the preclinical development of CUE-401 and CUE-501; • leverage our programs, including our autoimmune programs, to advance our other drug product candidates into preclinical and clinical development; • seek regulatory approvals for any drug product candidates for which we successfully complete clinical trials; • seek to discover and develop additional drug product candidates; • establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any drug product candidates for which we may obtain marketing approval and intend to commercialize on our own or jointly; • expand our manufacturing, quality, operational, financial and management systems, including personnel to support these functions; • maintain, expand and protect our intellectual property portfolio; • acquire or in-license other drug product candidates and technologies; and • incur additional legal, accounting and other expenses in operating as a public company.
Upon any such exercise, Ono will receive worldwide rights to develop and commercialize CUE-401, with us retaining a 50% co-development and co-commercialization right in the United States. Our decision to elect the co-development and co-commercialization option may be made within 30 days of Ono’s option exercise to license CUE-401.
Upon any such exercise, Ono would have received worldwide rights to develop and commercialize CUE-401, with us retaining a 50% co-development and co-commercialization right in the United States. Our decision to elect the co-development and co-commercialization option could have been made within 30 days of Ono’s option exercise to license CUE-401.
See “Our Collaboration Agreement with Ono” under Part I, Item 1 of the Annual Report on Form 10-K for additional discussion of the Ono Collaboration and Option Agreement. Results of Operations Collaboration Revenue We have not yet generated commercial revenue from product sales. To date, we have generated revenue from collaboration agreements with Merck Sharp & Dohme Corp.
See “Our Collaboration and Option Agreement with Ono” under Part I, Item 1 of this Annual Report on Form 10-K for additional discussion of the Ono Collaboration and Option Agreement. Components of Results of Operations Collaboration Revenue We have not yet generated commercial revenue from product sales.
The Loan Agreement permits voluntary prepayment of all, but not less than all, of the Term Loans, subject to a prepayment premium except if the facility is refinanced with another First Citizens Bank facility.
The Loan Agreement permits voluntary prepayment of all, but not less than all, of the Term Loans, subject to a prepayment premium except if the facility is refinanced with another First Citizens Bank facility. Such prepayment premium would be 1.00% of the principal amount of the Term Loans.
The monthly rental rate under the 40G Additional Laboratory Lease is $59,152 for the first 12 months and $61,519 for the remainder of the term.
The monthly rental rate under the 40G Additional Laboratory Lease was $59,153 for the first 12 months and $61,519 for the remainder of the initial term.
Collaboration Agreement with LG Chem Effective November 6, 2018, we entered into a Collaboration, License and Option Agreement, or the LG Chem Collaboration Agreement, with LG Chem Ltd., or LG Chem, related to the development of Immuno-STATs focused in the field of oncology.
Collaboration Agreement with LG Chem On November 6, 2018, we entered into a Collaboration, License and Option Agreement, or the LG Chem Collaboration Agreement, with LG Chem Ltd., or LG Chem, pertaining to the development of CUE-101 and CUE-102 Immuno-STATs focused in the field of oncology.
Our operating expenses also include non-cash components related to depreciation and amortization of property and equipment and stock-based compensation, which are allocated, as appropriate, to general and administrative expenses and research and development expenses.
Operating Expenses We generally recognize operating expenses as they are incurred in two general categories, general and administrative expenses and research and development expenses. Our operating expenses also include non-cash components related to depreciation and amortization of property and equipment and stock-based compensation, which are allocated, as appropriate, to general and administrative expenses and research and development expenses.
The Licensor is obligated under the License to provide certain services to us, including providing certain gases, chemicals and equipment to the Premises’ laboratory space, IT support, security, office support and health and safety training.
The Licensor is obligated under the License to provide certain services to us, including providing certain gases, chemicals and equipment to the Premises’ laboratory space, IT support, security, office support and health and safety training. The Licensor has the right to terminate the License for Cause (as defined in the License).
Upon Ono’s exercise of its option to license CUE-401, we will receive an option exercise payment and be eligible for development and commercial milestone payments up to an aggregate of approximately $220 million, as well as tiered royalties on sales.
Upon Ono’s exercise of its option to license CUE-401, we would have received an option exercise payment and been eligible for development and commercial milestone payments up to an aggregate of $220.0 million, as well as tiered royalties on sales.
At December 31, 2023 and December 31, 2022, we had cash, cash equivalents and marketable securities totaling approximately $48,514,000 and approximately $76,289,000, respectively, available to fund our ongoing business activities. Additional information concerning our financial condition and results of operations is provided in the financial statements included in this Annual Report on Form 10-K.
At December 31, 2024 and December 31, 2023, we had cash and cash equivalents totaling $22.5 million and $48.5 million, respectively, available to fund our ongoing business activities. Additional information concerning our financial condition and results of operations is provided in the financial statements included in this Annual Report on Form 10-K.
We have not yet commenced any commercial revenue-generating operations, have limited cash flows from operations, and will need to access substantial additional capital to fund our growth and ongoing business operations. Plan of Operation Our technology is in the development phase.
We have not yet commenced any commercial revenue-generating operations, have limited cash flows from operations, and will need to access substantial additional capital to fund our growth and ongoing business operations. Plan of Operation and Events that Raise Substantial Doubt About Our Ability to Continue as a Going Concern Our technology is in the development phase.
LG Chem may terminate the LG Chem Collaboration Agreement for convenience or change of control of us on a program-by-program, product-by-product or country-by-country basis, or in its entirety, at any time 96 following the notice period set forth in the LG Chem Collaboration Agreement.
The LG Chem Collaboration Agreement includes various representations, warranties, covenants, indemnities and other customary provisions. LG Chem may terminate the LG Chem Collaboration Agreement for convenience or change of control of us on a program-by-program, product-by-product or country-by-country basis, or in its entirety, at any time following the notice period set forth in the LG Chem Collaboration Agreement.
As of December 31, 2023, we had sold an aggregate of 7,600,373 shares of common stock under the October 2021 ATM Agreement for proceeds of $37.0 million, net of commission paid, but excluding transaction expenses. On February 15, 2022, we entered into the Loan Agreement, pursuant to which we have borrowed $10.0 million.
As of December 31, 2024, we had sold an aggregate of 9,072,231 shares of common stock under the ATM Sales Agreement for proceeds of $40.4 million, net of commission paid, but excluding transaction expenses. On February 15, 2022, we entered into the Loan Agreement, pursuant to which we have borrowed $10.0 million.
To the extent that a nonrefundable advance payment is for contracted services to be performed within 12 months from the reporting date, such advance is included in current assets; otherwise, such advance is included in non-current assets.
Nonrefundable advance payments for research and development services are included in prepaid and other current assets on the balance sheet. To the extent that a nonrefundable advance payment is for contracted services to be performed within 12 months from the reporting date, such advance is included in current assets; otherwise, such advance is included in non-current assets.
During the year ended December 31, 2022, we recognized a right of use asset of approximately $1,307,000 and a short and long term operating lease liability of approximately $712,000, and $535,000, respectively, using the weighted average discount rate of 10%, which were recorded as of the Term Commencement Date related to the 40G Additional Laboratory Lease.
During the year ended December 31, 2024, we recognized a right of use asset of $1.1 million and a short and long term operating lease liability of $0.7 million, and $0.4 million, respectively, using a discount rate of 10%, which were recorded as of the Term Commencement Date related to the 40G Additional Laboratory Lease, as amended.
In consideration of the First Amendment, the security deposit was increased from $225,760 to $235,884 effective July 15, 2022. Upon execution of the First Amendment, we prepaid three months of rent, two of which will be held in escrow and credited against future rent payments and the other of which was applied to the first month’s rent.
Upon execution of the First Amendment, we prepaid three months of rent, two of which will be held in escrow and credited against future rent payments and the other of which was applied to the first month’s rent. Effective July 15, 2022, the monthly rental rate under the First Amendment increased to $209,700 from $200,700.
During the year ended December 31, 2022, we recognized a right of use asset of approximately $369,000 and a short and long term operating lease liability of approximately $100,300 and $260,600, respectively, using the weighted average discount rate of 8%, which were recorded as of the Term Commencement Date related to the License.
During the year ended December 31, 2022, we recognized a right of use asset of $0.4 million and short and long term operating lease liabilities of $0.1 million and $0.3 million, respectively, using a discount rate of 8%, which were recorded as of the Term Commencement Date related to the License.
For arrangements that include sales-based royalties, including milestone payments based upon the achievement of a certain level of product sales, we recognize revenue upon the later of: (i) when the related sales occur or (ii) when the performance obligation to which some or all of the payment has been allocated has been satisfied (or partially satisfied).
Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and net loss in the period of adjustment. 93 For arrangements that include sales-based royalties, including milestone payments based upon the achievement of a certain level of product sales, we recognize revenue upon the later of: (i) when the related sales occur or (ii) when the performance obligation to which some or all of the payment has been allocated has been satisfied (or partially satisfied).
The FDIC created a successor bridge bank, and all deposits of SVB were transferred to the bridge bank under a systemic risk exception approved by the U.S. Department of the Treasury, the Federal Reserve and the FDIC.
On March 10, 2023, SVB was closed and the Federal Deposit Insurance Company, or FDIC, was appointed receiver for the bank. The FDIC created a successor bridge bank, and all deposits of SVB were transferred to the bridge bank under a systemic risk exception approved by the U.S. Department of the Treasury, the Federal Reserve and the FDIC.
Other research and development expenses are charged to operations as incurred. 93 Nonrefundable advance payments are recognized as an expense as the related services are performed. We evaluate whether we expect the services to be rendered at each quarter end and year end reporting date.
Nonrefundable advance payments are recognized as an expense as the related services are performed. We evaluate whether we expect the services to be rendered at each quarter end and year end reporting date. If we do not expect the services to be rendered, the advance payment is recorded as expense.
Manufacturing Agreement with Catalent We have entered into agreements with Catalent Pharma Solutions, LLC or Catalent, for Catalent to provide us with contracted manufacturing services related to the manufacture of CUE-401 materials and CUE-101 late stage process optimization. Work related to these services began in 2023, and at December 31, 2023, work totaling approximately $8,105,000 is still to be performed.
Manufacturing Agreement with Catalent We have entered into agreements with Catalent Pharma Solutions, LLC or Catalent, for Catalent to provide us with contracted manufacturing services related to the manufacture of CUE-401 materials and CUE-101 late stage process optimization.
During the year ended December 31, 2023, we sold 4,006,966 shares of common stock under the October 2021 ATM Agreement for proceeds of approximately $13.4 million, net of commission paid, but excluding transaction expense.
During the years ended December 31, 2024 and 2023, we sold 1,471,858 and 4,006,966 shares, respectively, of common stock under the ATM Sales Agreement for proceeds of $3.4 million and $13.4 million, respectively, net of commission paid, but excluding transaction expenses.
Income Taxes We account for income taxes under an asset and liability approach for financial accounting and reporting for income taxes. Accordingly, we recognize deferred tax assets and liabilities for the expected impact of differences between the financial statements and the tax basis of assets and liabilities.
Accordingly, we recognize deferred tax assets and liabilities for the expected impact of differences between the financial statements and the tax basis of assets and liabilities.
In return for performing CMC process development, LG Chem is eligible to receive low-single digit percentage royalty payments on the sales of Collaboration Products sold in all countries outside the LG Chem Territory. For the years ended December 31, 2023 and 2022, we recognized revenue of approximately $324,000 and approximately $1,245,000, respectively, related to the LG Chem Collaboration Agreement.
In return for performing CMC process development, LG Chem is eligible to receive low-single digit percentage royalty payments on the sales of Collaboration Products sold in all countries outside the LG Chem Territory.
We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.
If the tax position is not considered “more-likely-than-not” to be sustained, then no benefits of the position are recognized. 94 We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.
A fundamental part of our corporate development strategy is to establish strategic partnerships with leading pharmaceutical or biotechnology organizations that will allow us to more fully exploit the potential of our technology platform in the areas of oncology and autoimmune disease and accelerate and expand our CUE-100 series pipeline, such as our collaborations described below under the headings “Collaboration Agreement with LG Chem" and "Collaboration and Option Agreement with Ono." Critical Accounting Estimates and Significant Judgments Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States, or U.S.
A fundamental part of our corporate development strategy is to establish strategic partnerships with leading pharmaceutical or biotechnology organizations that will allow us to more fully exploit the potential of our technology platform 92 in the areas of oncology and autoimmune disease and accelerate and expand our CUE-100 series pipeline, such as our collaborations described below under the headings “Collaboration Agreement with LG Chem" and "Collaboration and Option Agreement with Ono." We will need to raise additional capital to fund our future operations and remain as a going concern.
Under the terms of this lease agreement, we prepaid three months of rent, two of which will be held in escrow and credited against future rent payments and the other of which was applied to the first month’s rent.
Under the terms of the 40G Additional Laboratory Lease, we prepaid three months of rent, two of which are held in escrow and credited against future rent payments and the other of which was applied to the first month’s rent. On November 20, 2024, we extended the lease through July 14, 2026.
The Licensor has the right to terminate the License for Cause (as defined in the License). 104 On May 3, 2022, we entered into the First Amendment to the License, or the First Amendment, with the Licensor, pursuant to which the License was expanded to include an additional room effective July 15, 2022.
On May 3, 2022, we entered into the First Amendment to the License, or the First Amendment, with the Licensor, pursuant to which the License was expanded to include an additional room effective July 15, 2022. In consideration of the First Amendment, the security deposit was increased from $225,760 to $235,884 effective July 15, 2022.
Principal Commitments Leased Facilities On March 28, 2022, we entered into a License Agreement, or the License, with MIL 40G, LLC, or the Licensor, pursuant to which we lease approximately 13,000 square feet of office, research and development and laboratory space located at 40 Guest Street, Boston, Massachusetts 02135, or the Premises.
Any inability to raise adequate funds on commercially reasonable terms could have a material adverse effect on our business, results of operation and financial condition, including the possibility that a lack of funds could cause our business to fail, dissolve and liquidate with little or no return to investors. 103 Principal Commitments Leased Facilities On March 28, 2022, we entered into a License Agreement, or the License, with MIL 40G, LLC, or the Licensor, pursuant to which we lease approximately 13,000 square feet of office, research and development and laboratory space located at 40 Guest Street, Boston, Massachusetts 02135, or the Premises.
The following table summarizes our changes in cash, cash equivalents, and restricted cash for the year ended December 31, 2023 and 2022: December 31, 2023 2022 (in thousands) Net cash provided by (used in): Operating activities $ (39,961 ) $ (41,806 ) Investing activities 25,002 (24,610 ) Financing activities 11,860 53,659 Net decrease in cash, cash equivalents, and restricted cash $ (3,099 ) $ (12,757 ) Operating Activities During the year ended December 31, 2023, we used cash of approximately $39,961,000 in operating activities, as compared to approximately $41,806,000 of cash used in operating activities during the year ended December 31, 2022.
The following table summarizes our changes in cash, cash equivalents, and restricted cash for the year ended December 31, 2024 and 2023: December 31, 2024 2023 (in thousands) Net cash provided by (used in): Operating activities $ (36,329 ) $ (39,961 ) Investing activities 32 25,002 Financing activities 10,243 11,860 Net decrease in cash, cash equivalents, and restricted cash $ (26,054 ) $ (3,099 ) Operating Activities Net cash used in operating activities decreased by $3.6 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
At the end of each reporting period, we reevaluate the probability of achievement of each milestone and any related constraint, and, if necessary, adjust its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenue and net loss in the period of adjustment.
At the end of each reporting period, we reevaluate the probability of achievement of each milestone and any related constraint, and, if necessary, adjust its estimate of the overall transaction price.
Funding Requirements We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of our Immuno-STAT platform, continue ongoing and initiate new clinical trials of and seek marketing approval for our drug product candidates. In addition, we expect to incur additional costs associated with operating as a public company.
This was primarily due to a decrease in proceeds received from sales pursuant to our ATM Sales Agreement in 2024 compared to 2023, partially offset by net proceeds received from our underwritten public offering in September 2024. 101 Funding Requirements We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the research and development of our Immuno-STAT platform and continue ongoing and initiate new clinical trials of and seek marketing approval for our drug product candidates.
(which terminated in December 2022), LG Chem, and Ono. Collaboration revenue may vary from period to period depending on the progress of our work in connection with our collaboration agreements. 97 Operating Expenses We generally recognize operating expenses as they are incurred in two general categories, general and administrative expenses and research and development expenses.
To date, we have generated revenue from collaboration agreements with Merck Sharp & Dohme Corp. (which terminated in December 2022), LG Chem, and Ono. Collaboration revenue may vary from period to period depending on the progress of our work in connection with our collaboration agreements.
Net Loss As a result of the foregoing, our net loss was approximately $50,733,000 for the year ended December 31, 2023, as compared to approximately $53,010,000 for the year ended December 31, 2022.
Net Loss As a result of the foregoing, our net loss decreased by $10.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The emerging preliminary clinical data for CUE-101 and CUE-102 bolsters our belief that we have developed a potential breakthrough approach for modulating cancer-specific T cells directly in the patient’s body. However, our activities are also subject to significant risks and uncertainties.
The clinical data generated to date for CUE-101 and CUE-102 as well as the preclinical data supporting the advancement of our CUE-400 and CUE-500 series for autoimmune disease bolsters our belief that we have developed a potential breakthrough approach for the treatment of cancer and autoimmune disease. However, our activities are also subject to significant risks and uncertainties.
The amount paid by Ono to us for the option exercise and future milestone payments will vary based upon our decision to exercise the co-development and co-commercialization option. Under the terms of the Ono Collaboration and Option Agreement, we will perform research activities related to CUE-401 through a specified option period of 24 months, or the Research Term.
Under the terms of the Ono Collaboration and Option Agreement, we performed research activities related to CUE-401 through a specified option period of 24 months, or the Research Term.
For the years ended December 31, 2023 and 2022, costs incurred with respect to the Einstein License were $7,000 and $0, respectively.
For the years ended December 31, 2024 and 2023, costs incurred with respect to the Einstein License were $0.1 million and $7,000, respectively. Such costs are included in research and development costs in our consolidated statements of operations and comprehensive loss.
See “Our License Agreement with Einstein” under Part I, Item 1 of the Annual Report on Form 10-K for additional discussion of the Einstein License.
Pursuant to the Einstein License, we issued to Einstein 671,572 shares of our common stock in connection with the consummation of the initial public offering of our common stock on December 27, 2017. See “Our License Agreement with Einstein” under Part I, Item 1 of this Annual Report on Form 10-K for additional discussion of the Einstein License.
We expect general and administrative expenses to increase in future periods as we incur additional expenses related to our operation as a public company which requires our compliance with certain regulatory and legal procedures. We expect activities supporting our operations including legal, accounting, insurance, employee compensation and other expenses to increase.
We expect general and administrative expenses to remain consistent in future periods as we continue to incur expenses related to our operation as a public company, which requires our ongoing compliance with certain laws and regulations.
Einstein License Agreement Our commitments with respect to the Einstein License are summarized above at “Significant Contracts and Agreements Related to Research and Development Activities."
Work related to these services began in 2023, and at December 31, 2024, work totaling $8.4 million is still to be performed. 104 Einstein License Agreement Our commitments with respect to the Einstein License are summarized above at “Significant Contracts and Agreements Related to Research and Development Activities.”
As of December 31, 2023, we recognized revenue of approximately $5,166,000 related to the Ono Collaboration and Option Agreement and recorded short-term research and development liabilities of approximately $2,112,000 on our balance sheet.
As of December 31, 2024 and 2023, we recognized revenue of 97 $9.2 million and $5.2 million, respectively, related to the Ono Collaboration and Option Agreement and recorded deferred revenue of $0.1 million and $2.1 million, respectively, on our consolidated balance sheets.
Unless earlier terminated, the LG Chem Collaboration Agreement will expire on a product-by-product and country-by-country basis upon the expiration of the applicable royalty term. To date, LG Chem has selected one additional cancer antigen, WT1, which is the focus of the CUE-102 research program. We are currently developing two Collaboration Products with LG Chem pursuant to this agreement.
Unless earlier terminated, the LG Chem Collaboration Agreement will expire on a product-by-product and country-by-country basis upon the expiration of the applicable royalty term.
We believe our proprietary Immuno-STAT platform, as described below, will enable us to enhance the potential of the patient’s own immune system to restore health while avoiding the negative side effects of broad indiscriminate immune activation, in the case of cancer, and broad immune suppression, in the case of autoimmune disease.
We believe our proprietary Immuno-STAT™ (Selective Targeting and Alteration of T Cells) platform, as described below, will enable us to therapeutically enhance a patient’s own immune system to potentially restore health. A key factor in the susceptibility to cancer is inadequate immunity against malignant cancer cells and inversely, autoimmune disease is caused by excessive immune activation against self-tissue.
We received aggregate gross proceeds from the PIPE Financing of approximately $30 million, before deducting placement agent fees and offering expenses of $2.6 million. Piper Sandler & Co. acted as lead placement agent and Public Ventures LLC acted as co-placement agent for the PIPE Financing.
The 2022 Pre-Funded Warrants are exercisable at any time after they are issued and will not expire. We received aggregate gross proceeds from the PIPE Financing of $30 million, before deducting placement agent fees and offering expenses of $2.6 million.
Overview We are a clinical-stage biopharmaceutical company developing a novel series of T cell engagers, termed Immuno-STAT™ ( Selective Targeting and Alteration of T Cells ), that are engineered to selectively engage and modulate disease-relevant T cells while avoiding the deleterious side effects of non-selective, systemic immune activation.
Overview We are a clinical-stage biopharmaceutical company with a novel class of injectable therapeutics engineered to selectively engage and modulate targeted, disease-relevant T cells.
As of December 31, 2023, we had recorded approximately $19.9 million in collaboration revenue related to this agreement since the agreement was entered into. The majority of the research phase of the LG Chem Collaboration Agreement was substantially complete on March 31, 2022. The LG Chem Collaboration Agreement includes various representations, warranties, covenants, indemnities and other customary provisions.
For the years ended December 31, 2024 and 2023, we recognized revenue of less than $0.1 million and $0.3 million, respectively, related to the LG Chem 96 Collaboration Agreement. As of December 31, 2024, we had recorded $20.0 million in collaboration revenue related to this agreement since the agreement was entered into.
At December 31, 2023, we recorded approximately $6,323,000 to operating lease right-of-use asset, and approximately $3,368,000 and $3,162,000 to the short-term and long-term operating lease liability, respectively. At December 31, 2022, we recorded approximately $9,203,000 to operating lease right-of-use asset, and approximately $3,300,000 and $6,018,000 to the short-term and long-term operating lease liability, respectively.
For the year ended December 31, 2024, we recorded $0.3 million in interest expense to the lease liability. At December 31, 2024, we recorded an operating lease right-of-use asset of $4.4 million, as well as corresponding short-term and long-term operating lease liabilities of $3.5 million and $1.0 million, respectively.

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