CELC US Equity☆

Item 1A. Risk Factors 33

Item 1B. Unresolved Staff Comments 57

Item 2. Properties 57

Item 3. Legal Proceedings 57

Item 4. Mine Safety Disclosures 57

PART II

Item 6. Selected Financial Data 59

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 67

Item 8. Financial Statements and Supplementary Data 68

Item 9A. Controls and Procedures 88

Item 9B. Other Information 88

PART III

Item 10. Directors, Executive Officers and Corporate Governance 89

Item 11. Executive Compensation 91

Item 14. Principal Accounting Fees and Services 91

PART IV

Item 15. Exhibits, Financial Statement Schedules 92

Signatures 93

SPECIAL

NOTE REGARDING FORWARD-LOOKING STATEMENTS

The

Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. This

Annual Report on Form 10-K (this “Annual Report”) contains forward-looking statements regarding us, our business prospects

and our results of operations that are subject to certain risks and uncertainties that could cause our actual business, prospects and

results of operations to differ materially from those that may be anticipated by such forward-looking statements. Factors that could

cause or contribute to such differences include, but are not limited to, those described in Part I, Item 1A, “Risk Factors”

and elsewhere in this Annual Report. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak

only as of the date of this Annual Report. We expressly disclaim any intent or obligation to update or revise any forward-looking statements,

whether as a result of new information, future events or otherwise. Readers are urged to carefully review and consider the various disclosures

made by us in this Annual Report and in our other reports filed with the Securities and Exchange Commission (the “SEC”) that

advise interested parties of the risks and uncertainties that may affect our business.

All

statements, other than statements of historical facts, contained in this Annual Report, including statements regarding our plans, objectives

and expectations for our business, operations and financial performance and condition, are forward-looking statements. In some cases,

you can identify forward-looking statements by the following words: “anticipate,” “believe,” “continue,”

“could,” “estimate,” “expect,” “intend,” “may,” “might,” “target,”

“ongoing,” “plan,” “potential,” “predict,” “project,” “should,”

“will,” “would,” or the negative of these terms or other comparable terminology, although not all forward-looking

statements contain these words. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may

cause our results, performance or achievements to be materially different from the information expressed or implied by the forward-looking

statements in this Annual Report. Additionally, our forward-looking statements do not reflect the potential impact of any future acquisitions,

mergers, dispositions, joint ventures or investments that we may make. Forward-looking statements may include, among other things, statements

relating to:

These

statements involve known and unknown risks, uncertainties and other factors that may cause our results or our industry’s actual

results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these

forward-looking statements. Certain risks, uncertainties and other factors include, but are not limited to, our limited operating history;

the potential impact of COVID-19 and any resurgence thereof on our business and clinical study activities; our potential inability to

develop, validate and commercialize gedatolisib on a timely basis or at all; the uncertainties and costs associated with clinical studies

and with developing and commercializing biopharmaceuticals; the complexity and difficulty of demonstrating the safety and sufficient

magnitude of benefit to support regulatory approval of gedatolisib and other products we may develop; challenges we may face in developing

and maintaining relationships with pharmaceutical company partners; the complexity and timeline for development of our CELsignia tests;

the uncertainty regarding market acceptance of our products and services by physicians, patients, third-party payors and others in the

medical community, uncertainty with respect to the size of market opportunities available to us; uncertainty regarding the pricing of

drug products and molecular and other diagnostic products and services that compete or may compete with us; uncertainty with insurance

coverage and reimbursement for our products and services; difficulties we may face in managing growth, such as hiring and retaining key

personnel; changes in government regulations; and obtaining and maintaining intellectual property protection for our technology and time

and expense associated with defending third-party claims of intellectual property infringement, investigations or litigation threatened

or initiated against us. See “Risk Factors” in Part I, Item 1A of this Annual

Report for additional risks, uncertainties and other factors applicable to the Company.

SUMMARY

OF RISK FACTORS

Below

is a summary of the material factors that make an investment in our common stock speculative or risky. This summary does not address

all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face,

can be found in the “Risk Factors” section of Part I, Item 1A of this Annual Report and should be carefully considered, together

with other information in this Annual Report and our other filings with the Securities and Exchange Commission before making investment

decisions regarding our common stock.

● We will be dependent on our ability to attract and retain key personnel; and

PART

I

ITEM

1. Business

Overview

Unless

otherwise provided in this Annual Report, references to the “Company,” “we,” “us,” and “our”

and similar references refer to Celcuity Inc., a Delaware corporation. We own various unregistered trademarks and service marks, including

our corporate logo. Solely for convenience, the trademarks, trade names and service marks in this Annual Report, including those owned

by third parties, may be referred to without the ®,TM or SM symbols, but such references should not be construed

as any indicator that the owner of such trademarks, trade names and service marks will not assert, to the fullest extent under applicable

law, their rights thereto. We do not intend the use or display of other companies’ trademarks, trade names and service marks to

imply an endorsement or sponsorship of us by any other companies.

We

are a clinical-stage biotechnology company focused on development of targeted therapies for treatment of multiple solid tumor indications.

Our lead therapeutic candidate is gedatolisib, a pan-PI3K/mTOR inhibitor. Its mechanism of action and pharmacokinetic properties are

highly differentiated from other currently approved and investigational therapies that target PI3K or mTOR alone or together. With respect

to our CDx development activities, our CELsignia diagnostic platform is uniquely able to analyze live patient tumor cells to identify

new groups of cancer patients likely to benefit from targeted therapies.

Our

therapeutic candidate, gedatolisib, is a potent, well-tolerated, small molecule dual inhibitor, administered intravenously, that selectively

targets all Class I isoforms of PI3K and mammalian target of rapamycin (mTOR). In April 2021, we obtained exclusive global development

and commercialization rights to gedatolisib under a license agreement with Pfizer, Inc. Our initial clinical development program for

gedatolisib will focus on the treatment of patients with hormone receptor positive (HR+), HER2-negative, advanced or metastatic breast

cancer. In 2022, we dosed our first patient in our Phase 3 clinical trial, VIKTORIA-1, evaluating gedatolisib in combination with fulvestrant

with or without palbociclib in patients with HR+/HER2- advanced breast cancer (ABC).

Supporting

the development of a potential first-in-class targeted therapy for breast cancer, like gedatolisib, with our CELsignia platform is a

natural extension of our strategy to use our CELsignia CDx to enable new indications for other companies’ targeted therapies. By

combining companion diagnostics designed to enable proprietary new drug indications with targeted therapies that treat signaling dysregulation

our CDx identifies, we believe we are uniquely positioned to improve the standard-of-care for many early and late-stage breast cancer

patients. Our goal is to play a key role in the multiple treatment approaches required to treat breast cancer patients at various stages

of their disease.

Therapeutic

(Rx) Product Development

Gedatolisib

Gedatolisib

is a potent, reversible dual inhibitor that selectively targets PI3K and mTOR. Gedatolisib was originally developed by Wyeth and clinical

development was continued by Pfizer after it acquired Wyeth. We exclusively licensed global rights to gedatolisib from Pfizer in April

2021. A Phase 1b trial evaluating patients with ER+/HER2- metastatic breast cancer was initiated in 2016 and subsequently enrolled 138

patients.

On

January 13, 2022, gedatolisib was granted Fast Track designation for the treatment of patients with HR+/HER2- metastatic breast cancer

after progression on CDK4/6 therapy. Fast Track designation is granted by the FDA for products that are intended for the treatment of

serious or life-threatening disease or conditions and which demonstrate the potential to address an unmet medical need.

On

July 18, 2022, gedatolisib was granted Breakthrough Therapy Designation for HR+/HER2- advanced breast cancer after progression on CDK4/6

therapy. Breakthrough Therapy designation is granted by the FDA to expedite the development and regulatory review of an investigational

medicine that is intended to treat a serious or life-threatening condition. The criteria for Breakthrough Therapy designation require

preliminary clinical evidence that demonstrates the drug may have substantial improvement on one or more clinically significant endpoints

over available therapy.

In

2022, we activated VIKTORIA-1, a Phase 3, open-label, randomized clinical trial to evaluate the efficacy and safety of two regimens in

adults with HR+/HER2- advanced breast cancer whose disease has progressed after prior CDK4/6 therapy in combination with an aromatase

inhibitor: 1) gedatolisib in combination with palbociclib and fulvestrant; and 2) gedatolisib in combination with fulvestrant. Two hundred

clinical sites in North America, Europe, South America, Asia, and Australia have been selected to participate in the study. The first

clinical site was activated in the third quarter of 2022. The first dosage of a patient in the trial occurred in December 2022.

Background

Breast

cancer is the most prevalent cancer in women, accounting for 30% of all female cancers and 13% of cancer-related deaths in the United

States. The National Cancer Institute estimated that approximately 281,000 new cases of breast cancer would be diagnosed in the United

States in 2020, and approximately 43,600 breast cancer patients would die of the disease. Approximately 190,000, or 70%, of these new

cases are for HR+/HER2- breast cancer.

Four

different breast cancer subtypes are currently identified using molecular tests that determine the level of HR and HER2 expression. About

70% of breast cancers are HR+/HER2-, which is indicative of hormone dependency. Despite progress in treatment strategies, metastatic

HR+/HER2- breast cancer (MBC) remains an incurable disease, with a median overall survival (OS) of three years and a five-year survival

rate of 29%.

Four

different classes of targeted therapies are currently used to treat HR+/HER2- tumors: endocrine-based therapies, CDK4/6 inhibitors, PI3K

inhibitors and mTOR inhibitors. Each of the CDK4/6 inhibitors, PI3K inhibitors and mTOR inhibitors are generally used to respond to the

related mechanisms of resistance to endocrine therapy, namely, activation of the CDK4/6, PI3K and mTOR pathways.

As

specifically relates to gedatolisib, activation of the PI3K/mTOR pathway has been implicated in a wide variety of human cancers, involving

either activating mutations, or other unknown drivers of pathway amplification. These include cancers of the breast, prostate, endometrial,

colon, rectum, and lung, among others.

Activities

associated with PI3K involve complex essential cell regulatory mechanisms including feedforward and feedback signaling loops.

Overactivation of the pathway is frequently present in human malignancies and plays a key role in cancer progression. Four catalytic

isoforms of Class I PI3K preferentially mediate signal transduction and tumor cell survival based on the type of malignancy and

the genetic or epigenetic alterations an individual patient harbors. Due to the multiple subcellular locations, activities, and

importance of the different PI3K complexes in regulating many types of cancer cell proliferation, control of PI3K activity is an

important target in cancer therapy.

mTOR

is a critical effector in cell-signaling pathways commonly dysregulated in human cancers. The mTOR signaling pathway integrates both

intracellular and extracellular signals and serves as a central regulator of cell metabolism, growth, proliferation, and survival. mTOR

is a serine/threonine protein kinase, a downstream effector of PI3K, and regulated by hormones, growth factors, and nutrients, that is

contained in two functionally distinct protein assemblies – mTORC1 and mTORC2. In cancer, dysfunctional signaling leads to various

constitutive activities of the mTOR complexes, making mTOR a good therapeutic target.

In

addition, the PI3K/mTOR pathway, like other mitogenic pathways, can also promote the activities of cyclin D and CDK4/6 to drive proliferative

cell cycling. The available evidence indicates that resistance to CDK4/6 inhibition in patients with HR+/HER2- advanced breast cancer

is a transient adaptive mechanism, most likely involving the PI3K/mTOR pathway. This data indicates that CDK4/6 signaling is restored

in CDK4/6 resistant tumors when PI3K/mTOR inhibitors are applied. Thus, continuing CDK4/6 inhibitor treatment in combination with a PI3K/mTOR

inhibitor in patients who progressed on their prior CDK4/6 inhibitor, would both blockade the reactivated CDK4/6 pathway and prevent

adaptive activation of the PI3K/mTOR pathway. This suggests the limited efficacy induced by current standard-of-care (SOC) therapies

in patients who have progressed on a CDK4/6 therapy reflects the mechanistic inadequacy of relying on partial PI3K/mTOR inhibition (e.g.,

alpelisib or everolimus) and no CDK4/6 inhibition to address this complex disease mechanism.

We

believe the complex connection between the PI3K/mTOR and CDK4/6 pathways can enable gedatolisib to adaptively reactivate CDK4/6 signaling

that reportedly occurs in CDK4/6 resistant tumors when the PI3K/mTOR pathway is completely blockaded. By re-activating CDK4/6 signaling,

we believe gedatolisib can restore the therapeutic effect of CDK4/6 inhibition when it is combined with a CDK4/6 inhibitor. The contributory

effect of a CDK4/6 inhibitor when combined with gedatolisib would thus largely reflect the interaction between the two therapies that

gedatolisib initiates.

Evidence

of gedatolisib anti-tumor in vivo activity was provided in a study evaluating the combination of gedatolisib and a CDK4/6 inhibitor in

cell-line xenograft model where response to endocrine therapy was improved and tumor regressions were induced. In a study evaluating

the MCF7 xenograft model (ER+/HER2-/PIK3CA mutant), the combination of gedatolisib with palbociclib and fulvestrant caused 90% tumor

regression with no tumor regrowth observed for more than 60 days after the final dose.

Advantages

of Gedatolisib over other PI3K and mTOR inhibitors

The

important role the PI3K/mTOR pathway plays in cancer has led to significant investment in the development of many different PI3K and

mTOR inhibitors for solid tumors. However, developing efficacious and well-tolerated therapies that target this pathway has been challenging.

This reflects the inherent adaptability and complexity of the PI3K pathway, where numerous feedforward and feedback loops, crosstalk

with other pathways, and compensatory pathways enable resistance to PI3K inhibition. Another major hurdle for the development of PI3K

pathway inhibitors has been the inability to achieve optimal drug-target blockade in tumors while avoiding undue toxicities in patients.

We

believe there is significant potential for gedatolisib to address previously treated breast cancer tumors and has the potential to be

used in other tumor types where the PI3K/mTOR pathway is either: i) driving tumorigenesis directly; ii) cooperating with other dysregulated

signaling pathways; or iii) a mechanism of resistance to other drug therapies.

As

a result, we believe gedatolisib’s unique mechanism of action, favorable pharmacokinetic properties, and intravenous formulation

offer distinct advantages over currently approved and investigational therapies that target PI3K or mTOR alone or together.

● Better tolerated by patients than oral PI3K and mTOR drugs.

Clinical

Experience with Gedatolisib

As

of December 31, 2022, 492 patients with solid tumors have received gedatolisib in eight clinical trials sponsored by Pfizer. Of the 492

patients, 129 were treated with gedatolisib as a single agent in three clinical trials. The remaining 363 patients received gedatolisib

in combination with other anti-cancer agents in five clinical trials. Additional patients received gedatolisib in combination with other

anti-cancer agents in nine investigator sponsored clinical trials.

On

January 13, 2022, gedatolisib was granted Fast Track designation for the treatment of patients with HR+/HER2- metastatic breast cancer

after progression on CDK4/6 therapy. Fast Track designation is granted by the FDA for products that are intended for the treatment of

serious or life-threatening disease or conditions and which demonstrate the potential to address an unmet medical need. The designation

offers the opportunity for frequent interactions with the FDA to discuss the drug’s development plan and to ensure collection of

appropriate data needed to support drug approval, as well as eligibility for rolling submission of a New Drug Application.

On

July 18, 2022, gedatolisib was granted Breakthrough Therapy Designation for HR+/HER2- advanced breast cancer after progression on CDK4/6

therapy. Breakthrough Therapy designation is granted by the FDA to expedite the development and regulatory review of an investigational

medicine that is intended to treat a serious or life-threatening condition. The criteria for Breakthrough Therapy designation require

preliminary clinical evidence that demonstrates the drug may have substantial improvement on one or more clinically significant endpoints

over available therapy. The benefits of Breakthrough Therapy Designation include more intensive guidance from the FDA on an efficient

development program, access to a scientific liaison to help accelerate review time, and potential eligibility for priority review if

relevant criteria are met. Celcuity’s breakthrough application was supported by data from a Phase 1b study that assessed the safety,

tolerability and clinical activity of gedatolisib in combination with palbociclib and fulvestrant in patients with HR+/HER2- advanced

breast cancer whose disease progressed during treatment with a CDK4/6 therapy and an aromatase inhibitor.

Gedatolisib’s

safety, tolerability and pharmacokinetic profile were determined in a Phase 1 First-in-Human study. The favorability of preliminary results

from our most recently completed clinical trial, a Phase 1b study which evaluated 138 patients with HR+/HER2- advanced breast cancer

(ABC), led us to focus on our initial clinical development program on advanced breast cancer.

Phase

1 First-in-Human Study

In

2013, Pfizer completed a Phase 1, open-label, dose-escalation first-in human study of single-agent gedatolisib in patients with advanced

solid tumors. The primary objective of Part 1 of the study was to determine the safety, tolerability, and maximum tolerated dose (MTD)

of single-agent gedatolisib administered once weekly as an intravenous (IV) infusion. Seventy-seven patients with advanced solid tumors

received doses of gedatolisib and the MTD was determined to be 154 mg IV once weekly (n = 42). Based on results and analyses from subsequent

clinical trials, the maximum tolerated dose was determined to be 180 mg IV once weekly.

Phase

1b HR+/HER2- ABC Clinical Trial Results

In

2016, Pfizer initiated a Phase 1b dose-finding trial with an expansion portion for safety and efficacy to evaluate gedatolisib when added

to either the standard doses of palbociclib plus letrozole or palbociclib plus fulvestrant in patients with HR+/HER2- advanced breast

cancer. PI3K mutation status was not used as an eligibility criterion. Patient enrollment for the trial is complete.

A

total of 138 patients with HR+/HER2- advanced breast cancer were dosed in the clinical trial. Seven patients from this study continue

to receive study treatment, as of December 31, 2022, each of whom have received study treatment for more than four years.

Analysis

for the 103 patients enrolled in the expansion portion of the Phase 1b clinical trial, as of a database cutoff date of June 29, 2022,

showed:

● Efficacy analysis for all arms in aggregate:

○ 63% objective response rate (ORR)

○ 92% clinical benefit rate (CBR)

● Safety analysis:

● Best overall response data for each arm is presented in the table below:

Total Expansion Arms (N=103, full analysis set)

Arm A Arm B Arm C Arm D

Study Treatment P + L + G P + F + G P + F + G P + F + G

Gedatolisib schedule weekly weekly weekly 3 wks on/1 wk off

(1)

ORR represents PR, except in Arm A, which had 1 CR = complete response. Responses per RECIST 1.1; (2) Includes 2 unconfirmed PR

Abbreviations: 1L= first line, 2L= second line; mos= months; NR = not reached; ORR, objective response rate; PFS, progression free

survival

Source:

Wesolowski 2022 SABCS

Other

Gedatolisib Clinical Trials

Phase

2 Pilot Clinical Trial for HER2+/PIK3CA+ Patients

The

Korean Cancer Study Group sponsored a Phase 2 pilot clinical trial to evaluate gedatolisib combined with a trastuzumab biosimilar (Herzuma®),

in patients with HER2+/PIK3CA+ metastatic breast cancers whose disease had progressed after treatment with three or more prior HER2 targeted

therapy regimens. The clinical trial commenced in December 2019 and interim efficacy data from the first 17 patients enrolled was presented

at the San Antonio Breast Cancer Symposium in December 2021. Patients received a trastuzumab biosimilar (8 mg/kg IV for 1st cycle loading

dose, and then 6 mg/kg IV every 3 weeks) plus gedatolisib (180 mg, weekly IV). The primary endpoint was objective response, a reduction

of at least 30% in tumor volume by RECIST v1.1.

As

of a data cutoff date of October 30, 2021, 10 of 17 patients achieved a partial response, an ORR of 59%, and four patients had stable

disease. Fourteen of 17 patients thus received either a partial response or stable disease, resulting in a clinical benefit rate of 82%.

Best responses are shown in the following chart. The dotted lines represent the cutoff for progressive disease (>20% tumor growth)

and for partial response (>30% tumor regression).

Best Response

*

Patient whose target lesion decreased by 63% but a new leptomeningeal seeding occurred.

The

duration of treatment for the 16 patients evaluated is shown in the chart below. As of the October 30, 2020 data cutoff, 16 patients

(80%) remained on therapy. Four patients discontinued treatment, one due to disease progression, one due to an adverse event of Grade

1 diarrhea, one participant decision, and one patient being unable to undergo the required MRI imaging due to a titanium rod implant

from non-treatment related worsening of scoliosis. At the time of data cut-off, the median time on treatment for these 20 patients was

10.1 cycles (approximately 10 months) and all 10 patients who had achieved an objective response remained on therapy assessment. At the

time of the analysis, nine patients had a continuing response. The dashed lines show the response at 3 months and 6 months.

Duration

of Treatment

Phase

1 Clinical Trial in Patients with Solid Tumors

A

phase 1 study conducted at the Indiana University Simon Cancer Center evaluated the safety, tolerability, pharmacokinetics and preliminary

activity of gedatolisib combined with carboplatin and paclitaxel in patients with advanced solid tumors previously who were treated with

two or more prior chemotherapies. Seventeen patients were enrolled (10 clear cell ovarian, one low-grade serous ovarian, four endometrial,

and two lung cancers). The ORR was 65% in all patients (11/17 patients: eight partial responses and three complete responses) and stable

disease was 17% (3/17). Among patients with clear cell ovarian cancer, the ORR was 80%, with three patients achieving a complete response.

Best

Response

Active

Gedatolisib Clinical Trials

Phase

3 HR+/HER2- ABC Clinical Trial (VIKTORIA-1)

In

2022, we initiated VIKTORIA-1, a Phase 3, open-label, randomized clinical trial to evaluate the efficacy and safety of gedatolisib in

combination with fulvestrant with or without palbociclib in adults with HR+/HER2- advanced breast cancer whose disease has progressed

after prior CDK4/6 therapy in combination with an aromatase inhibitor. This multi-center, international trial is expected to enroll 701

total subjects at approximately 200 clinical sites across North America, Europe, Latin America, and Asia. The first clinical site was

activated in the third quarter of 2022. The first patient was dosed in December 2022.

The

clinical trial will enable separate evaluation of subjects according to their PIK3CA status.

The

clinical trial primary endpoints are progression free survival (PFS), per RECIST 1.1 criteria, as assessed by blinded independent central

review (BICR). Two primary endpoints will be evaluated in subjects who are PI3KCA WT, and one primary endpoint will be evaluated in subjects

who are PI3KCA MT. In subjects who are PI3KCA WT, the PFS of gedatolisib in combination with palbociclib and fulvestrant (Arm A) will

be compared to fulvestrant monotherapy (Arm C), and the PFS in gedatolisib in combination with fulvestrant (Arm B) will be compared to

fulvestrant monotherapy (Arm C). In subjects who are PI3KCA MT, the PFS of gedatolisib in combination with palbociclib and fulvestrant

(Arm D) will be compared to alpelisib combined with fulvestrant (Arm E).

All

subjects will receive treatment according to the assigned study arm until objective progressive disease, unacceptable toxicity, death,

or withdrawal of consent, whichever occurs first. Subjects in Arm C will have the option to receive the treatment regimen provided in

Arm A or Arm B upon radiographically confirmed disease progression. Subjects will be followed for AEs, safety laboratory testing, tumour

assessment by RECIST v1.1, quality of life, and overall survival.

Planned

Phase 2 Gedatolisib Clinical Trials

We

expect to use the CELsignia PI3K Activity Test to help support development of gedatolisib for breast cancer indications. Our internal

studies demonstrate how measurement of PI3K-involved signaling may provide a sensitive and specific method of identifying patients most

likely to benefit from PI3K inhibitors. We believe CELsignia tests uniquely enable us to pursue indications simultaneously for unselected

patient populations and CELsignia selected patient sub-groups. This approach can greatly reduce the risk of pursing an indication for

a large, but unselected patient population, as we plan to do for the initial gedatolisib indication. By combining the capabilities of

CELsignia PI3K Activity Test with a potent pan-PI3K/mTOR inhibitor like gedatolisib, we believe we are uniquely suited to maximize the

probability of obtaining regulatory approval to market gedatolisib.

Accordingly,

we plan to initiate a Phase 2 clinical trial to evaluate gedatolisib in combination with palbociclib and letrozole in early-stage HR+/HER2-

breast cancer patients. The tumors from all patients will be evaluated with a CELsignia PI3K Pathway Test.

Pfizer

License Agreement

In

April 2021, we entered into a license agreement, or the Gedatolisib License Agreement, with Pfizer pursuant to which we acquired exclusive

(including as to Pfizer) worldwide sublicensable rights to research, develop, manufacture, and commercialize gedatolisib for the treatment,

diagnosis and prevention of all diseases. Pursuant to the Gedatolisib License Agreement, we are obligated to use commercially reasonable

efforts to develop and seek regulatory approval for at least one product in the U.S. and if regulatory approval is obtained, to commercialize

such product in the U.S and at least one international major market.

We

paid Pfizer a $5.0 million upfront fee upon execution of the Gedatolisib License Agreement and issued to Pfizer $5.0 million of our common

stock. We are also required to make milestone payments to Pfizer upon achievement of certain development and commercial milestone events,

up to an aggregate of $335.0 million. We will pay Pfizer tiered royalties on sales of gedatolisib at percentages ranging from the low

to mid-teens, that may be subject to deductions for expiration of valid claims, amounts due under third-party licenses and generic competition.

Unless earlier terminated, the Gedatolisib License Agreement will expire upon the expiration of all royalty obligations. The royalty

period will expire on a country-by-country basis upon the later of (a) 12 years following the date of First Commercial Sale of such Product

in such country, (b) the expiration of all regulatory or data exclusivity in such country for such Product or (c) the date upon which

the manufacture, use, sale, offer for sale or importation of such Product in such country would no longer infringe, but for the license

granted herein, a Valid Claim of a Licensed Patent Right. Capitalized terms in this paragraph have the meanings set forth in the Gedatolisib

License Agreement.

We

have the right to terminate the Gedatolisib License Agreement for convenience upon 90 days’ prior written notice. Pfizer may not

terminate the agreement for convenience. Either we or Pfizer may terminate the Gedatolisib License Agreement if the other party is in

material breach and such breach is not cured within the specified cure period. In addition, either we or Pfizer may terminate the Gedatolisib

License Agreement in the event of specified insolvency events involving the other party.

Manufacturing

We

rely on third parties to manufacture gedatolisib. We expect to enter into agreements with contract manufacturing organizations, or CMOs,

to produce drug substance for gedatolisib. We require all of our CMOs to conduct manufacturing activities in compliance with current

good manufacturing practice, or cGMP, requirements. We anticipate that these CMOs will have the capacity to support both clinical supply

and commercial-scale production, but we do not have any formal agreements at this time to cover commercial production. We may also elect

to enter into agreements with other CMOs to manufacture supplies of drug substance and finished drug product.

Sales

and Marketing

If

any of our product candidates are approved, we intend to market and commercialize them in the U.S. and select international markets,

either alone or in partnership with others. Cancer patients are managed by oncologists, medical geneticists and neurologists, and therefore

we believe can be reached with a targeted sales force.

Competition

for Gedatolisib

The

pharmaceutical industry is characterized by rapid evolution of technologies and intense competition. While we believe that our product

candidates, technology, knowledge, experience and scientific resources provide us with competitive advantages, we face competition from

major pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions,

among others. Any product candidates that we successfully develop and commercialize will compete with approved treatment options, including

off-label therapies, and new therapies that may become available in the future. Key considerations that would impact our ability to effectively

compete with other therapies include the efficacy, safety, method of administration, cost, level of promotional activity and intellectual

property protection of our products. Many of the companies against which we may compete have significantly greater financial resources

and expertise than we do in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory

approvals and marketing approved products.

There

are several PI3K and mTOR inhibitors approved by the FDA, including Piqray and Afinitor from Novartis AG, Aliqopa from Bayer Corporation,

Copiktra from Verastem, Inc., Zydelig from Gilead Sciences, Inc. and we are aware that other companies are, or may be, developing products

for this indication, including AstraZeneca plc, BridgeBio Inc., Eli Lilly and Company, F. Hoffmann-La Roche Ltd, Kazia Therapeutics Limited,

Infinity Pharmaceuticals, Inc., Relay Therapeutics, Revolution Medicines Inc., and Takeda Pharmaceutical Company Limited. There may be

additional companies with programs suitable for addressing these patient populations that could be competitive with our efforts but that

have not yet disclosed specific clinical development plans. Smaller or early-stage companies, including oncology-focused therapeutics

companies, may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

These companies may also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical

trial sites, enrolling patients in clinical trials and acquiring technologies complementary to, or necessary for, our programs. The availability

of reimbursement from government and private payors will also significantly impact the pricing and competitiveness of our products. Our

competitors may obtain FDA or other regulatory approvals for their products more rapidly than we may obtain approvals for our product

candidates, which could result in our competitors establishing a strong market position before we are able to commercialize our product

candidates.

CELsignia

Development and CDx Programs

Overview

Our

proprietary CELsignia diagnostic platform is the only commercially ready technology we are aware of that uses a patient’s living

tumor cells to identify the specific abnormal cellular process driving a patient’s cancer and the targeted therapy that best treats

it. This enables us to identify patients whose tumors may respond to a targeted therapy, even though they lack a previously associated

molecular mutation. By identifying cancer patients whose tumors lack an associated genetic mutation but have abnormal cellular activity

a matching targeted therapeutic is designed to inhibit, we believe our CELsignia CDx can expand the markets for a number of already approved

targeted therapies. Our current CDx identifies breast and ovarian cancer patients whose tumors have cancer drivers potentially responsive

to treatment with human epidermal growth factor receptor 2-negative (HER2), mesenchymal-epithelial transition factor (c-MET), or phosphatidylinositol

3-kinases (PI3K) targeted therapeutics.

Our

CELsignia platform provides an important advantage over traditional molecular diagnostics. Current molecular diagnostics analyze fragmented

cells to obtain a snapshot of the genetic mutations present in a patient’s tumor. Using cell fragments prevents molecular diagnostics

from analyzing the dynamic cellular activities, known as cell signaling, that regulate cell proliferation or survival. Cancer can develop

when critical cell signaling, regulating physiologic activity such as cell proliferation, becomes abnormal or dysregulated. Since genetic

mutations are often only weakly correlated to the dysregulated cell signaling activity driving a patient’s cancer, a molecular

diagnostic is prone to providing an incomplete diagnosis. CELsignia tests overcome this limitation by measuring dynamic cell signaling

activity in a cancer patient’s living tumor cells. When a CELsignia test detects abnormal signaling activity, a more accurate diagnosis

of the patient’s cancer driver is obtained.

We

are supporting the advancement of new potential indications for four different targeted therapies, controlled by other pharmaceutical

companies, that would rely on a CELsignia CDx to select patients. Our first analytically validated and commercially ready test using

our CELsignia platform, the CELsignia HER2 Pathway Activity Test for breast cancer, diagnoses two new sub-types of HER2-negative breast

cancer that traditional molecular diagnostics cannot detect. Our internal studies show that approximately 15-20% of HER2-negative breast

cancer patients have abnormal HER2 signaling activity similar to levels found in HER2-positive breast cancer cells. As a result, these

HER2-negative patients have undiagnosed HER2-driven breast cancer and would be likely to respond to the same anti-HER2 targeted therapies

only HER2-positive patients receive today. We have three interventional clinical trials underway to evaluate the efficacy of HER2 targeted

therapies in breast cancer patients selected with our CELsignia HER2 Pathway Activity Test.

Our

second CELsignia test for breast cancer evaluates independent c-Met signaling activity and its involvement with HER family signaling

in HER2-negative breast cancer tumor cells. Our internal studies show that approximately 20%-25% of HER2-negative breast cancer patients

have abnormal c-Met signaling activity that is co-activated with abnormal HER family signaling. These studies suggest that this sub-group

of HER2-negative breast cancer patients may best respond to treatment with a combination of HER family and c-Met inhibitors. We have

one interventional clinical trial underway to evaluate the efficacy of HER2 and c-Met targeted therapies, in previously treated metastatic

HER2-negative breast cancer patients selected with our CELsignia Multi-Pathway Activity Test, or CELsignia MP Test.

Our

third CELsignia test for breast cancer evaluates PI3K signaling in HER2-negative breast cancer tumor cells. Our internal studies demonstrate

how measurement of PI3K-involved signaling may provide a more sensitive and specific method of identifying patients most likely to benefit

from PI3K inhibitors than current genetic tests that measure PI3K mutations. We intend to combine these three tests to expand the CELsignia

MP Test. With this next generation CELsignia test, we plan to provide an analysis of EGFR/HER1, HER2, HER3, c-MET, and PI3K-node involved

signaling activity for each patient tumor specimen received.

In

addition, we completed development of our first CELsignia test for ovarian cancer in 2020. This test identifies a new sub-group of ovarian

cancer patients with tumors that have abnormal c-Met and HER2 signaling activity. These findings suggest that a significant sub-group

of ovarian cancer patients may respond to treatment with a combination of ErbB and c-Met inhibitors. Nearly 14,000 women a year die from

ovarian cancer, a disease that has less than a 50% five-year survival rate and a limited range of targeted therapy options. There is

thus a significant unmet need for additional therapeutic options for ovarian cancer patients. As a companion diagnostic, our CELsignia

test for ovarian cancer will be intended to help pharmaceutical companies obtain new drug indications and expand treatment options for

this challenging tumor type.

Our

overall commercialization strategy is to develop diagnostics that expand the patient population eligible for targeted therapies. In furtherance

of this strategy, we have been and will continue to seek collaborations with pharmaceutical companies to field clinical trials to advance

the clinical development of their targeted therapies with the eventual goal of obtaining FDA approval of a new drug indication.

CELsignia

Clinical Trials

We

are currently collaborating on four Phase 2 clinical trials to evaluate the efficacy of our collaboration partners’ targeted

therapies in patients selected with one of our CELsignia tests. The goal of these trials is to support the development of four

potential new drug indications to treat patient groups found responsive by our CELsignia test to their approved targeted therapies.

These clinical trials include:

Companion

Diagnostics Industry

According

to the Centers for Disease Control and Prevention, cancer was the second-leading cause of death in the United States in 2020, responsible

for nearly one of every four deaths. There are many types of cancer treatment options, including surgery, radiation therapy, chemotherapy,

immunotherapy, hormone therapy, stem cell transplant, and targeted therapy. Targeted therapies are drugs or other substances that block

the growth and spread of cancer by interfering with specific molecular targets involved in the progression of cancer. Targeted therapies

differ from standard chemotherapy drugs in that they are often cytostatic (block tumor cell proliferation) rather than cytotoxic (kill

tumor cells). According to the National Cancer Institute, there are currently more than 90 approved targeted oncology therapies, some

of which cost more than $100,000 per treatment course.

Diagnostic

tests to detect single biomarkers are now widely used by pathologists to determine the molecular sub-type of a cancer. When a molecular

biomarker test is used to support the choice of therapy to prescribe, it is often referred to as a “companion diagnostic.”

Increasing numbers of targeted therapeutics are prescribed based on the results from a companion diagnostic test to detect the presence

of a molecular biomarker. Only patients testing positive for the biomarker are eligible to receive the associated therapy.

Companion

diagnostics are becoming increasingly important to the pharmaceutical industry. The use of companion diagnostics to better match patients

to effective treatments positively impacts clinical outcomes and lowers expenditures on drugs that do not benefit patients. Stratifying

the eligible patient population to include only likely responders is particularly important when the percentage of likely responders

is only a fraction of the total cancer population. In these circumstances, narrowing the eligible patient population is often necessary

to meet the clinical endpoint targets required to receive FDA drug approval.

CELsignia

Testing Opportunities

We

expect to generate recurring companion diagnostic testing revenues once a CELsignia companion diagnostic-linked drug therapy is approved

for patient use. On average, we believe that the lifetime value of providing the companion diagnostic test will significantly exceed

the revenue generated from the companion diagnostic development program. We expect to offer each CELsignia test to patients at prices

ranging from $4,000–$7,000, depending on the number of pathways evaluated. No tests directly comparable to the CELsignia tests

are available today to offer reference points for pricing purposes. Pricing for several proprietary complex genomic tests, however, fall

within this range and we believe this provides guidance on the amount insurance companies are willing to pay for highly informative tests

that guide patient care.

Our

CELsignia Platform

We

have made significant investments in research and development of our CELsignia platform. To measure dynamic cellular activity, we internally

developed two distinct but complementary technologies, which now comprise our CELsignia platform:

● our proprietary cell microenvironment; and

● our method to quantify dynamic patient cell signaling dysfunction.

We

utilize our CELsignia platform to create CELsignia tests that measure specific signaling pathway activity in various tumor types.

Cell

microenvironment. Previous research has shown that cancer cells extracted from a patient’s tumor share the molecular features

of the primary cancers from which they were derived and could provide an ex vivo (outside the patient) model of a patient’s

tumor. The technology around tumor cell extraction from individual patients and culturing techniques, however, has largely remained undeveloped.

For instance, we are not aware of any competing diagnostic tests that use live patient tumor cells to measure dynamic cell signaling

activity. Studies on the topic have historically highlighted the challenges of deriving a viable patient tumor cell sample from an individual

patient tumor specimen.

We

have developed a cell microenvironment to extract and expand viable tumor cells from fresh human tumor tissue, which meets the three

critical clinical parameters a patient-derived tumor cell sample would need to satisfy in order to meet the regulatory and clinical requirements

for a diagnostic test measuring signaling activity:

Dynamic

patient cell signaling quantification. The second component of our CELsignia platform involves methods to quantify specific dynamic

signal transduction events in patient derived tumor cells. The complexity of signal transduction processes is immense, and the permutations

of the pathway variables are practically unquantifiable. Current analytical methods to assess these variables use cell fragments. Point-in-time

measurements are limited to assessment of the compositional status (e.g., mutation), concentration level (e.g., protein amount), or activation

status (e.g., phosphorylation) of a finite number of signaling pathway components. A key insight underlying our technology was our observation

that, no matter how sophisticated or detailed, a point-in-time molecular profile would only provide a snapshot. These methods could not

provide a complete, dynamic assessment of the signaling activity driving a patient’s cancer. These point-in-time molecular analyses

would, in many cases, only provide a weak correlation to the presence of the signaling pathway dysfunction driving a patient’s

cancer. Instead, we concluded that a complete diagnosis of cancer and an assessment of a patient’s response to treating their disease

requires measurement of the underlying activity of signaling pathways in live patient tumor cells.

To

measure live real-time dynamic cell signaling activity, we utilize an impedance biosensor instrument. An impedance biosensor is an analytical

platform that converts changes in cellular activity to a measurable electrical signal. When cells are stimulated and change their function,

the accompanying changes alter the electrical signal that is measured. The output value is quantified over time and used to determine

a Signaling Function Score. To determine the activity of a specific signaling pathway, an activating agent specific to a pathway receptor

is used to turn on the pathway and a corresponding inhibitory agent specific to the pathway receptor is used to turn signaling off. When

signaling pathways are stimulated in this manner, a change in the electrical signal occurs and Signaling Function Score recorded. By

relying on the principle of detecting signaling pathway activity, we believe we can develop tests for a range of disease types and targeted

therapies that affect various cellular pathways.

CELsignia

Multi-Pathway Activity Test

Our

CELsignia MP Test is a qualitative laboratory developed test or LDT that measures HER2, c-Met, and PI3K signaling activity in breast

and ovarian tumor cells obtained from patients previously diagnosed with cancer to determine whether or not the patients have one of

the following cancer sub-types:

1. Abnormal HER2 signaling driven cancer.

2. Abnormal c-Met and HER2 signaling driven cancer.

3. Abnormal PI3K-involved signaling driven cancer.

CELsignia’s

Commercialization Strategy

Our

commercial activities will target three complementary groups at various phases of the development of our CELsignia tests.

Our

CELsignia tests are laboratory developed tests, or LDTs, and subject to regulation under the Clinical Laboratory Improvement Amendments,

or CLIA. We completed the analytical validation of our first CELsignia test and received CLIA certification in 2016. Our current focus

is to field clinical trials with leading cancer centers in collaboration with pharmaceutical companies to demonstrate that cancer patients

diagnosed with an abnormal signaling pathway by a CELsignia test respond efficaciously to treatment with a matching targeted therapy.

Once favorable efficacy data is available, we expect to generate revenues from CELsignia tests performed in conjunction with the clinical

trials a pharmaceutical company will field during the registrational phase of our partners’ drug approval process. We also expect

that the agreements we enter into with the pharmaceutical companies partnering with us on these registrational trials will include milestone

payments at initiation and completion of trials and perhaps at various other negotiated points during the trials. We expect to generate

revenue from the sale of CELsignia tests ordered by physicians upon the approval of our pharmaceutical company’s matching drug,

as a companion diagnostic. A key requirement for success of these partnerships will be clinical trial results that demonstrate the advantages

of using a CELsignia test as a companion diagnostic.

A

CELsignia test would be launched upon the approval of a pharmaceutical company’s matching drug as a companion diagnostic. We would

expect physicians, typically a medical or surgical oncologist, to order our tests in conjunction with the roll-out of the pharmaceutical

company’s matching drug. The physician will prescribe a CELsignia test and coordinate provision of a patient specimen from a biopsy

or surgical procedure. The fresh tissue would then be shipped overnight directly to our laboratory where we would use our proprietary

methods to extract diseased cell samples from the patient’s tissue and perform the CELsignia tests ordered. Test results would

typically be available in 10 to 14 days after receipt of the patient specimen. For each patient sample analyzed, a Signaling Function

Score would be calculated quantitatively and converted into a final qualitative result: abnormal or normal. For patients found to have

an abnormal signaling pathway, clinicians would use the results of the CELsignia test as a guide to select a targeted drug that inhibits

the abnormal signaling activity identified.

Pricing

and Reimbursement

The

principal groups that we expect to pay us in the future for our CELsignia tests include:

● commercial third-party payors;

● government payors, including Medicare and state Medicaid plans;

● biopharmaceutical customers;

● hospitals, cancer centers, and other institutions; and

● patients.

Adequate

reimbursement will be an important factor in achieving broad clinical adoption of our CELsignia tests. At the same time, we believe

broad clinical adoption will help drive favorable reimbursement decisions. To achieve broad reimbursement coverage with commercial

third-party payors and government payors, including Medicare and Medicaid, we plan to demonstrate the economic and clinical value of

our CELsignia tests to payors by employing a multi-pronged strategy:

CELsignia’s

Competition

At

present, we are not aware of any other companies that offer diagnostic tests that use a patient’s live tumor cells to identify

the signaling pathway driving a patient’s cancer. There are several companies focused on developing genomic or proteomic analyses

of a patient’s diseased cells. Initial efforts identified protein targets or genetic mutations, oftentimes referred to as “biomarkers,”

that are associated with a disease process to enable development of drugs more closely tailored to specific patient populations.

As

tools for human genome analysis have become less expensive, a number of companies have also recently launched more complex genomic test

panels and gene expression signatures tests. These tests rely on a static measurement of molecular properties and mathematical analysis

to identify statistically significant correlations between the selected molecular properties and a clinical condition or outcome of populations

of patients with the “same” disease.

These

genetic tests often have limited predictive success because they only identify some, but not all, of, the molecular and cellular conditions

required for a drug therapy to function in a patient. They may identify the presence of the genes associated with a disease, but they

cannot determine how the gene products function in the context of a particular individual.

Providers

of genomic or proteomic tests include diagnostic kit manufacturers, hospitals, and independent laboratories. We do not plan to develop

tests where a molecular biomarker can identify drug responsive patients, so our current tests will not compete directly against the tests

provided by these other companies.

Diagnostics

competitors that have molecular method-based tests include, but are not limited to, Foundation Medicine, Caris Life Sciences, NeoGenomics,

LabCorp, Quest, Nanostring, Paradigm, Biocept, Exosome Diagnostics, Guardant Health, Roche Diagnostics, Qiagen, Myriad, and Genomic Health.

Principal