10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2022

Commission File Number: 001-39856

CULLINAN ONCOLOGY, INC.

(Exact name of registrant as specified in its charter)

(Address of principal executive offices) (Zip Code)

(617) 410-4650

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class TradingSymbol(s) Name of each exchange on which registered

Common Stock, par value $0.0001 per share CGEM The Nasdaq Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the Registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the Registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No☒

The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant as of June 30, 2022 was $375.6 million based on the closing price of the Registrant's shares of common stock on the Nasdaq Global Select Market on such date.

The number of shares of the Registrant’s common stock outstanding as of March 1, 2023 was 39,327,298.

The number of shares of the Registrant’s preferred stock outstanding as of March 1, 2023 was 647,500, which are excluded from the above aggregate market value. Each share of the preferred stock will be convertible into 10 shares of common stock at the option of the holder at any time, subject to certain limitations, including that the holder will be prohibited from converting preferred stock into common stock if, as a result of such conversion, the holder, together with its affiliates, would beneficially own a number of shares of common stock more than 9.99% of the total common stock then issued and outstanding immediately following the conversion of such shares of preferred stock. Shares of preferred stock will generally have no voting rights, except as required by law and except that the consent of a majority of the holders of the outstanding preferred stock will be required to amend the terms of the preferred stock. In the event of the Company’s liquidation, dissolution or winding up, holders of Preferred Stock will participate pari passu with any distribution of proceeds to holders of Common Stock. The Preferred Stock ranks (i) senior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms junior to the Preferred Stock; (ii) on parity with the Common Stock and any class or series of capital stock of the Company created specifically ranking by its terms on parity with the Preferred Stock; and (iii) junior to any class or series of capital stock of the Company created specifically ranking by its terms senior to any Preferred Stock, in each case, as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.

Table of Contents

Page

PART I

Item 1. Business 1

Item 1A. Risk Factors 53

Item 1B. Unresolved Staff Comments 106

Item 2. Properties 106

Item 3. Legal Proceedings 106

Item 4. Mine Safety Disclosures 106

PART II

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 119

Item 8. Financial Statements and Supplementary Data 119

Item 9A. Controls and Procedures 119

Item 9B. Other Information 120

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 120

PART III

Item 10. Directors, Executive Officers and Corporate Governance 121

Item 11. Executive Compensation 124

Item 14. Principal Accountant Fees and Services 137

PART IV

Item 15. Exhibits and Financial Statement Schedules 138

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. All statements, other than statements of historical facts, contained in this Annual Report on Form 10-K, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

Any forward-looking statements in this Annual Report on Form 10-K reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed in this Annual Report on Form 10-K and other filings with the Securities Exchange Commission (the “SEC”), including the following:

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the success, cost and timing of our clinical-stage product candidates, including zipalertinib (CLN-081/TAS6417), CLN-049, CLN-619, CLN-418, and CLN-978;

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the initiation, timing, progress, results and cost of our research and development programs and our current and future preclinical and clinical studies, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;

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our ability to initiate, recruit, and enroll patients in and conduct our clinical trials at the pace that we project;

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our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations, or warnings in the label of any of our product candidates, if approved;

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our ability to compete with companies currently marketing or engaged in the development of treatments that our product candidates are designed to target;

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our reliance on third parties to conduct our clinical trials and to manufacture drug substance and drug product for use in our clinical trials;

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the size and growth potential of the markets for oncology diseases and any of our current product candidates or other product candidates we may identify and pursue, and our ability to serve those markets;

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our ability to identify and advance through clinical development any additional product candidates;

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the commercialization of our current product candidates and any other product candidates we may identify and pursue, if approved, including our ability to successfully build a specialty sales force and commercial infrastructure to market our current product candidates and any other product candidates we may identify and pursue;

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our ability to identify research priorities and apply a risk-mitigated strategy to efficiently discover and develop product candidates;

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our ability to retain and recruit key personnel;

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our ability to obtain and maintain adequate intellectual property rights;

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our expectations regarding government and third-party payor coverage and reimbursement;

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our estimates of our expenses, ongoing losses, capital requirements and our needs for or ability to obtain additional financing;

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the milestone payments that we may receive from Taiho Pharmaceutical Co., Ltd.;

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the anticipated development and commercialization of zipalertinib;

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the development of our commercial infrastructure;

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potential investments in our pipeline and the potential for such product candidates;

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our cash runway;

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the potential benefits of strategic collaboration agreements, our ability to enter into additional strategic collaborations or arrangements, and our ability to attract collaborators with development, regulatory, and commercialization expertise;

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our financial performance;

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developments and projections relating to our competitors or our industry; and

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the effect of the COVID-19 pandemic, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations, including but not limited to our preclinical studies and future clinical trials.

We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and investors should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make or collaborations or strategic partnerships we may enter into.

You should read this Annual Report on Form 10-K and the documents that we reference herein and have filed or incorporated by reference as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

This Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business and the markets for our product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from our own internal estimates and research as well as from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. While we are not aware of any misstatements regarding any third-party information presented in this Annual Report on Form 10-K, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties and are subject to change based on various factors, including those discussed under the section titled “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

Summary of the Material and Other Risks Associated with Our Business

Below is a summary of the principal 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, are summarized in “Risk Factors” and should be carefully considered, together with other information in this Annual Report on Form 10-K and our other filings with the Securities and Exchange Commission, before making an investment decision regarding our common stock.

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We are early in our development efforts and are substantially dependent on our lead product candidates, zipalertinib, CLN-049, CLN-619, and CLN-418. If we are unable to advance these or any of our other product candidates through clinical development, or to obtain regulatory approval and ultimately commercialize any such product candidates, either by ourselves or with or by third parties or if we experience significant delays in doing so, our business will be materially harmed.

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Difficulty in enrolling patients could delay or prevent clinical trials of our product candidates, and ultimately delay or prevent regulatory approval.

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Interim, “topline”, and preliminary data from our clinical trials that we announce or publish may change as more patient data become available and are subject to confirmation, audit, and verification procedures that could result in material changes in the final data.

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Our product candidates may cause undesirable side effects or have other properties that delay or prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences following any potential marketing approval.

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Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.

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We have incurred significant losses since inception, and we expect to incur losses over the next several years and may not be able to achieve or sustain revenues or profitability in the future.

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We will require substantial additional funding to develop and commercialize our product candidates and identify and invest in new product candidates. If we are unable to raise capital when needed, we would be compelled to delay, reduce, or eliminate our product development programs or other operations.

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We may not be successful in our efforts to build a pipeline of product candidates with commercial value.

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Our subsidiaries are party to certain agreements that provide our licensors, collaborators, or other shareholders in our subsidiaries with rights that could delay or impact the potential sale of our subsidiaries or could impact the ability of our subsidiaries to sell assets, or enter into strategic alliances, collaborations, or licensing arrangements with other third parties.

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Our ability to realize value from our subsidiaries may be impacted if we reduce our ownership to a minority interest or otherwise cede control to other investors through contractual agreements or otherwise.

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A single or limited number of subsidiaries may comprise a large proportion of our value.

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Our reliance on a central team consisting of a limited number of employees presents operational challenges that may adversely affect our business.

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We face substantial competition, which may result in others discovering, developing, or commercializing products before or more successfully than we do.

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If we are unable to obtain and maintain patent and other intellectual property protection for our current and future product candidates and technology, or if the scope of intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to commercialize zipalertinib, CLN-049, CLN-619, and CLN-418 or any other product candidates or technology may be adversely affected.

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We currently rely and expect to continue to rely on the outsourcing of the majority of our development functions to third parties to conduct our preclinical studies and clinical trials. If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidates.

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COVID-19 has and may continue to adversely impact our business.

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We are highly dependent on our key personnel. If we are not successful in retaining highly qualified personnel, we may not be able to successfully implement our business strategy.

PART I

Item 1. Business.

Overview

We are a clinical-stage biopharmaceutical company focused on modality-agnostic targeted oncology. Our strategy is to identify high-impact cancer targets and then select what we believe is the optimal therapeutic modality for those targets. We source innovation both internally and externally, focusing on product candidates with novel technology platforms or differentiated mechanisms. Before we advance a product candidate into clinical development, we evaluate its potential for anti-tumor activity as a single agent as well as its ability to generate an immune system response or to inhibit oncogenic processes. Using this strategy, we have built a broad and deep pipeline of targeted oncology programs that includes six distinct product candidates, of which five are clinical-stage, as well as multiple research and discovery programs.

Zipalertinib (CLN-081/TAS6417) which we are co-developing with an affiliate of Taiho Pharmaceutical, Co. Ltd ("Taiho"), is an orally bioavailable small-molecule, irreversible epidermal growth factor receptor ("EGFR") inhibitor that is designed to selectively target cells expressing EGFR exon 20 insertion ("EGFRex20ins") mutations with relative sparing of cells expressing wild-type EGFR. The United States Food and Drug Administration (the "FDA") has granted Breakthrough Therapy designation to zipalertinib. In the fourth quarter of 2022, in collaboration with our partners at Taiho, we initiated a pivotal Phase 2b study in patients with EGFR exon 20 non-small-cell lung cancer ("NSCLC") who progressed after prior systemic therapy. In June 2022, Taiho acquired our equity interest in our partially-owned subsidiary, Cullinan Pearl Corp. (“Cullinan Pearl”), which provided Taiho with worldwide rights to zipalertinib outside of Japan and Greater China, for an upfront payment of $275.0 million. As part of the sale, we are also eligible to receive up to an additional $130.0 million tied to EGFR exon 20 NSCLC regulatory milestones. Concurrently with the closing of the sale of our equity interest in Cullinan Pearl, we entered into a co-development and co-commercialization agreement for zipalertinib with an affiliate of Taiho, pursuant to which we will collaborate to develop zipalertinib and will retain the option to co-commercialize zipalertinib in the United States ("U.S."). Development costs for, and any future pre-tax profits from potential U.S. sales of, zipalertinib shall be shared equally between us and Taiho.

In addition to zipalertinib, our portfolio includes four other clinical-stage product candidates and one product candidate that is pending FDA clearance for its investigational new drug application ("IND"):

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CLN-049 is a FLT3/CD3 T cell engaging bispecific antibody being investigated in patients with relapsed/refractory acute myeloid leukemia ("AML") or myelodysplastic syndrome ("MDS"). CLN-049 is currently in an ongoing Phase 1 study with initial clinical data expected in mid-2023.

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CLN-619 is a monoclonal antibody that stabilizes expression of MICA/B on the tumor cell surface to promote tumor cell lysis mediated by both cytotoxic innate and adaptive immune cells. CLN-619 has broad therapeutic potential and is being investigated as both monotherapy and in combination with checkpoint inhibitor therapy in an ongoing Phase 1 study in patients with advanced solid tumors with initial clinical data expected in mid-2023.

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CLN-418 is a B7H4/4-1BB bispecific antibody that induces tumor-specific immune activation and is being investigated in an ongoing Phase 1 study in patients with advanced solid tumors with initial clinical data expected in 2024.

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CLN-978 is a CD19/CD3 T cell engaging antibody construct with a human serum albumin ("HSA") binding domain to increase serum half-life. In January 2023, the FDA cleared our IND for CLN-978. We will initially evaluate CLN-978 in a Phase 1 study for the treatment of relapsed/refractory B-cell non-Hodgkin lymphoma ("B-NHL").

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CLN-617 is a fusion protein combining two potent antitumor cytokines, interleukin-2 ("IL-2") and interleukin-12 ("IL-12") with tumor retention domains for the treatment of solid tumors. In February 2023, we filed the IND for CLN-617 and intend to initiate a Phase 1 study by the end of 2023, pending IND clearance.

In addition to the product candidates described above, we are actively developing several preclinical oncology programs, all in the discovery stage, including our collaboration with Icahn School of Medicine at Mount Sinai for the development of novel hematopoietic progenitor kinase 1 ("HPK1") degraders.

Our mission is to create new standards of care for patients with cancer. We seek to achieve our mission through our differentiated approach to drug development, which is guided by the following core elements:

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Rapidly advance only candidates that we believe have first- and/or best-in-class potential.

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Seek clear evidence of monotherapy activity early in preclinical and clinical development, which we believe will de-risk later stage drug development.

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Innovate without borders: Remain open to finding what we believe are the optimal modalities and drug candidates either through in-house discovery or through licensing and collaborations.

Our Pipeline

Our pipeline includes oncology product candidates and programs that are diversified by target, mechanism, technology platform, and modality. We rigorously assess each of our programs to justify continued investment and determine proper capital allocation. When certain programs do not meet our de-risking criteria for advancement, we terminate those programs and preserve our capital and resources to invest in programs with greater potential. As a result, our pipeline will continue to be dynamic. We believe that each program candidate has differentiating design features or mechanisms of action, as well as first- and/or best-in-class potential. Our current pipeline is summarized in the diagram below:

Our Business Strategy and Objectives

Our strategic focus is on what we call “modality-agnostic targeted oncology”: We first identify high-impact cancer targets and then select what we believe is the optimal therapeutic modality for those targets. As a result, we are not dependent upon a singular technological platform or product. We define “high-impact” biological targets as those that play key roles as either oncogenic drivers or immune system activators. From there, we advance only molecules that we believe have first- and/or best-in-class potential and that can generate a robust anti-tumor response as a single agent in vivo. Through this disciplined approach, we believe we will bring forward differentiated molecules with the potential to create new standards of care for patients with cancer. Key objectives we aim to achieve with our strategy are as follows:

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Advance zipalertinib, which we are co-developing with an affiliate of Taiho, toward potential regulatory approval for the targeted treatment of NSCLC patients with EGFRex20ins mutations. In the fourth quarter of 2022, in collaboration with our partners at Taiho, we initiated a pivotal study of zipalertinib in EGFR exon 20 NSCLC patients who progressed after prior systemic therapy. In collaboration with Taiho, we also intend to initiate a pivotal study of zipalertinib for the first line treatment of patients with metastatic or locally advanced disease. We intend to continue leveraging zipalertinib’s Breakthrough Therapy designation to support our ongoing development activity and future interactions with the FDA.

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Advance CLN-049, CLN-619, and CLN-418, which are all being evaluated in ongoing clinical studies, through late-stage clinical development. We believe these molecules are representative of our modality-agnostic, targeted approach to oncology drug discovery and development. For example, each candidate is designed to engage with important targets found in the tumor microenvironment: CLN-049 targets FLT3, a known oncogenic driver on AML cells, and CD3 on T cells in order to direct cell-mediated lysis of tumor cells; CLN-619 targets MICA/B, which are ligands expressed on tumor cells, in order to restore immune recognition and lysis of tumor cells via multiple mechanisms of action; finally, CLN-418 is a bispecific antibody designed to deliver conditional activation of 4-1BB by targeting B7H4, an antigen expressed on tumor cells. FLT3, MICA/B and B7H4 all have relatively higher expression on tumor cells compared to healthy cells, potentially allowing for a wide therapeutic window and limiting on-target, off-tumor toxicity. Furthermore, each target’s expression profile identifies what we believe is potentially a large addressable patient population: both MICA/B and B7H4 are expressed in a broad range of tumor types, and FLT3, whether mutant or wild-type, is expressed on approximately 80% of AML cells. We intend to provide a clinical update for CLN-049 and CLN-619 in mid-2023 and for CLN-418 in 2024.

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Continue to advance our pipeline through our rigorous and differentiated approach to drug development. In addition to the programs listed above, we are advancing two candidates that are both designed to address limitations of approved oncology therapies. CLN-978 is a half-life extended, humanized, single-chain T cell engaging antibody that we believe has the potential to improve on some of the limitations of the approved CD3/CD19 bispecific T cell engager, blinatumomab, and to compete with CD19-targeted CAR-T cell therapies. In January 2023, the FDA cleared our IND for CLN-978. We believe the second candidate, CLN-617, is the only single agent immunotherapy in development combining IL-2 and IL-12 with a collagen-binding domain to enhance retention of cytokines within the tumor microenvironment. In February 2023, we filed the IND for CLN-617 and intend to initiate a Phase 1 study by the end of 2023, pending IND clearance.

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Expand our pipeline through research collaborations, business development, and internally designed programs. Our management team is comprised of leaders in oncology drug discovery, clinical development, and commercial operations. Their proven track records and longstanding relationships in the life sciences industry provide us with access to programs from around the world, including zipalertinib, CLN-049, CLN-619, and CLN-418, each of which were sourced externally. In addition, their experiences and deep understanding of molecular oncology and cancer immunotherapy also enable us to translate novel concepts into internally designed product candidates, such as CLN-978, or those that contain both internal and externally sourced innovation, such as CLN-617. We are evaluating both external and internal opportunities to continue to expand our pipeline, while balancing the desire to maintain ample cash runway beyond key program milestones.

Our Structure

We are developing product candidates through Cullinan Oncology, Inc. (“Cullinan”) and through established development subsidiaries that we have created. Cullinan holds U.S. co-development and co-commercialization rights to zipalertinib, as well as U.S. rights to CLN-418, and worldwide rights to CLN-978. Previously, we established development subsidiaries when we licensed or acquired exclusive worldwide rights to intellectual property for several of our drug candidates, including Cullinan Florentine Corp. (“Cullinan Florentine”) for CLN-049, Cullinan MICA Corp. (“Cullinan MICA”) for CLN-619, and Cullinan Amber Corp. (“Cullinan Amber”) for CLN-617. Cullinan currently owns 96% of Cullinan Florentine, 95% of Cullinan Mica, and 94% of Cullinan Amber. The structure of our financing arrangements with each subsidiary enables us to increase our economic ownership when we provide additional capital.

We historically created development subsidiaries as a private company in order to grow and advance our portfolio efficiently. As a publicly held company, we do not intend to create new development subsidiaries in the future. Further information about our subsidiaries, including ownership and governance, is included in the “Management’s Discussion and Analysis” section of this Annual Report on Form 10-K.

Our Programs

Zipalertinib

Overview

Zipalertinib is an orally bioavailable small-molecule designed as a next generation, irreversible EGFR inhibitor being developed in collaboration with an affiliate of Taiho for the treatment of a genetically defined subset of patients with NSCLC. In January 2022, the FDA granted Breakthrough Therapy designation to zipalertinib and in November 2022, in collaboration with our partners at Taiho, we initiated a pivotal Phase 2b trial evaluating zipalertinib in adult NSCLC patients with EGFRex20ins mutations who progressed after prior systemic therapy. We have a co-development and co-commercialization agreement for zipalertinib with an affiliate of Taiho, pursuant to which we will collaborate to develop zipalertinib and will retain the option to co-commercialize zipalertinib in the U.S. Development costs for zipalertinib shall be shared equally between us and Taiho with each party receiving 50% of any future pre-tax profits from potential U.S. sales of zipalertinib.

In June 2022, we provided a clinical update at the American Society for Clinical Oncology meeting that included safety and efficacy data from 73 evaluable NSCLC patients with EGFRex20ins mutations enrolled in a Phase 1/2a trial across five dose levels, ranging from 30 to 150 milligrams ("mg") twice daily. At the 100 mg twice-daily dose, we observed the following efficacy and safety highlights, which we believe reflect zipalertinib’s differentiated clinical profile:

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16 of 39 (41%) response evaluable patients achieved a confirmed partial response.

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38 of 39 (97%) response evaluable patients achieved a best response of partial response or stable disease.

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The median progression-free survival ("PFS") was 12 months.

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No Grade 3 or greater treatment-related adverse events ("TRAEs") of rash or diarrhea, which are associated with EGFR tyrosine kinase inhibitor (“TKI”) therapies.

Background on NSCLC and EGFR mutations

Lung cancer is by far the leading cause of cancer deaths among both men and women, comprising almost 25% of all cancer deaths. The American Cancer Society estimated that in 2023, there will be approximately 238,340 new cases of lung cancer and approximately 127,070 deaths from lung cancer in the U.S. The most common subtype of lung cancer is NSCLC, which represents approximately 80% to 85% of all lung cancers.

EGFR is a receptor tyrosine kinase ("RTK"), that normally functions to trigger cell division when growth factors bind to the receptor. Oncogenic mutations in the tyrosine kinase domain can induce growth factor-independent activation of EGFR, resulting in uncontrolled cell growth and proliferation. Ultimately, these aberrant signals can contribute to the development of NSCLC. EGFR mutations are present in approximately 15% to 25% of U.S. and Western European NSCLC patients and approximately 30% to 50% of Asian NSCLC patients. Given its important role and prevalence in cancer, mutant EGFR is a critical target in lung cancer therapy. Exon 19 deletion and exon 21 L858R substitution mutations, collectively referred to as classical EGFR mutations, are the most common and account for over 75% of EGFR mutations in NSCLC. Multiple EGFR inhibitors, including gefitinib, erlotinib, afatinib, and osimertinib, target these common mutations and have been approved as first-line therapies, thus validating mutant EGFR as a target for the treatment of NSCLC.

Exon 20 insertions, which account for 7% to 13% of all EGFR mutations in NSCLC patients, are the most prevalent after the classical EGFR mutations. We estimate an incidence of approximately 2,000 to 5,000 NSCLC patients in the U.S. and approximately 1,000 to 3,000 patients in France, Germany, Italy, Spain, and the United Kingdom (the "UK") with EGFRex20ins mutations. Preclinical studies have shown that exon 20 insertions, as well as classical EGFR mutations, have the characteristics of oncogenic driver mutations, which are responsible for both tumorigenesis and the progression of cancer. However, in contrast to classical EGFR mutations, exon 20 insertions do not sensitize the kinase domain to treatment with approved EGFR inhibitors.

Currently, there are two targeted therapies with accelerated approval for NSCLC patients with EGFRex20ins mutations whose disease has progressed on or after platinum-based chemotherapy: amivantamab-vmjw (Rybrevant) and mobocertinib (Exkivity). Despite these accelerated approvals, we believe significant unmet need remains for NSCLC patients with EGFRex20ins mutations. Specifically, we believe there is an opportunity for an oral therapy with strong selectivity for mutant versus wild-type EGFR, which could potentially lead to an improved safety and tolerability profile, especially with respect to treatment-related adverse events such as rash, diarrhea, and infusion site reactions, as well as cardiovascular events.

Zipalertinib

Zipalertinib is a small molecule that was designed as an irreversible EGFR inhibitor with a novel pyrrolopyrimidine scaffold, which is unique among the therapies in development that are targeting EGFRex20ins mutations. Zipalertinib is designed to fit into the adenosine triphosphate-binding site of EGFR where it covalently modifies C797, thereby forming a durable drug-protein linkage that irreversibly inhibits the mutant receptor. In preclinical studies, zipalertinib demonstrated high selectivity and inhibition of EGFR in cells expressing mutant EGFR proteins, with substantially less inhibition in cells expressing wild-type EGFR.

The selectivity index of zipalertinib versus competing EGFR inhibitors was evaluated in vitro as measured by the ratio of the half-maximal growth inhibition ("IC50") value of cells expressing wild-type EGFR versus cells expressing exon 20 insertion mutant EGFR. As shown below, zipalertinib demonstrated the highest selectivity index among a panel of EGFR targeted therapies, suggesting that zipalertinib may be capable of achieving clinically relevant inhibition of EGFRex20ins mutations with relative sparing of wild-type EGFR.

Zipalertinib Demonstrated Superior Selectivity Across Multiple EGFRex20ins Mutations

Clinical Development

Phase 1/2a Study

We initiated our ongoing Phase 1/2a trial of zipalertinib in the fourth quarter of 2019. This first-in-human, open-label, multi-center trial was designed to evaluate the safety and tolerability, pharmacokinetics, pharmacodynamics, and preliminary efficacy of zipalertinib in adult NSCLC patients with EGFRex20ins mutation who progressed after prior systemic therapy. The trial included two major components: dose escalation and cohort expansion. Dose escalation began with a single patient accelerated titration design and transitioned to rolling six decision rules upon the first occurrence of a Grade 2 or greater TRAE, which occurred at the 100 mg twice-daily dose level. This trial had a flexible, adaptive design that included 30, 45, 65, 100, and 150 mg twice-daily dose cohorts and allowed for expansion of any given cohort, gated by acceptable safety and pre-specified efficacy criteria. Per original protocol, cohorts could be expanded to six, then 13, then 36 patients, gated by these criteria. We expanded cohorts at the 65 mg, 100 mg, and the 150 mg twice-daily dose levels, although we subsequently discontinued enrollment at the 150 mg level after 11 patients based on assessment of the overall clinical profile at this dose level. We enrolled a total of 39 patients at the 100 mg twice-daily dose level, which includes the original protocol maximum of 36 patients plus an additional three patients that were reassigned following our decision to discontinue enrollment at the 150 mg twice-daily dose level. We enrolled patients across sites in the U.S., the Netherlands, Singapore, Hong Kong, and Taiwan.

The study enrolled a total of 73 patients who received at least one dose of zipalertinib. The patient population was heavily pre-treated, with a median of two prior systemic therapies and 66% of patients having received two or more prior therapies at study entry (i.e. third line of therapy or greater). Further, 36% of patients received prior treatment with an EGFR inhibitor, including 4% that received prior treatment with poziotinib or Exkivity, TKIs that target exon 20 insertion mutations. Over half (55%) of the patients received prior treatment with immunotherapy.

Phase 1/2a Safety and Pharmacokinetic Data

The following table provides a summary of treatment-related safety and tolerability events, including rash and diarrhea, which are toxicities related to inhibition of wild-type EGFR, as well as laboratory abnormalities including anemia and transaminase elevations across all twice-daily dose levels for comparison, as well as the overall safety population in our Phase 1/2a trial. We believe that this safety and tolerability profile compares favorably to other EGFR exon 20 inhibitors, in particular with respect to the incidence and severity of diarrhea.

Differentiated Safety and Tolerability Profile of Zipalertinib at 100mg Twice-Daily

1Common Terminology Criteria for Adverse Events v5.0

In the 39 safety-evaluable patients in the Phase 1/2a trial treated at the 100 mg twice daily dose level, none experienced Grade 3 or greater treatment-related rash or diarrhea. At this dose level, 82% and 36% of patients experienced treatment-related rash and diarrhea, respectively, of either Grade 1 or 2 severity; however, the ratio of patients who experience Grade 1 versus Grade 2 events is approximately 3:1 for both rash and diarrhea. Both events were manageable with conventional supportive care, and implementation of systematic gastrointestinal prophylaxis was not required for diarrhea management. As has been seen with other EGFR TKIs, a case of Grade 3 treatment-related pneumonitis was observed at this dose level, although the patient had recent treatment with checkpoint inhibitor therapy and the concurrent presence of a significant hydropneumothorax, not related to treatment, in the contralateral lung.

Key observations in 11 safety-evaluable patients at the 150 mg twice-daily dose level included treatment-related Grade 3 diarrhea in two patients, Grade 3 rash in one patient, and two patients with Grade 3 and Grade 4 transaminitis. In addition, one patient who was off treatment with zipalertinib for more than three weeks because of progressive disease was reported as having Grade 3 treatment-related pneumonitis; the patient had a concurrent Pneumocystis jirovecii infection. In addition, an increase in rates of dose reduction and dose discontinuation were observed among patients treated at the 150 mg twice-daily compared to the 100 mg twice-daily dose level. These observations informed our decision to discontinue further enrollment of patients at 150 mg twice-daily, after 11 patients.

Preliminary pharmacokinetic data demonstrated a near dose-dependent trend in exposure, as measured by unbound area under the curve ("AUC") and Cmax values. Furthermore, the target AUC required to achieve tumor regression in preclinical studies was reached starting at the initial dose of 30 mg twice daily. Notable features of the zipalertinib pharmacokinetic profile include sustained pharmacokinetic exposure over the concentration required for 50% growth inhibition ("GI50") for EGFRex20ins mutations for eight hours post dose, limited interpatient heterogeneity, and limited exposure above the GI50 for wild-type EGFR at doses at or below 100 mg twice daily. Consistent with the clinical safety profile at 100 mg twice-daily dose compared with the 150 mg twice-daily dose, at the 150 mg twice-daily dose we observed zipalertinib concentrations above wild-type EGFR GI50 ratios for approximately four hours.

Phase 1/2a Efficacy Data

The following table summarizes best response characteristics for response-evaluable patients treated at 65mg or below (N=23), 100 mg (N=39), and 150 mg (N=11) twice-daily dose levels as well as the overall population across dose levels in aggregate (N=73) as of a May 9, 2022 data cutoff. Among patients treated at 100 mg twice daily, 16 patients achieved a confirmed partial response, indicating a 41% confirmed overall response rate ("ORR"). This confirmed ORR was higher than the 36% confirmed ORR among 11 patients at the 150 mg twice-daily dose cohort. At the 100 mg twice-daily dose cohort, median PFS was 12 months compared to a PFS of only 8 months at the 150mg twice-daily dose. As discussed above, Grade 3 or higher rash and diarrhea as well as dose reductions and dose discontinuations all favored the 100mg twice-daily dose cohort.

Zipalertinib: Superior Safety and Efficacy Observed at 100mg Twice-Daily Dose

Below are additional efficacy analyses for the 73 patients including a swimmer’s chart (A) and a waterfall chart with percentage best change from baseline (B). We have also included a Kaplan-Meier curve showing median PFS (C). Patients in the trial have their initial tumor imaging performed after approximately six weeks of treatment, and then every nine weeks thereafter. Based on these analyses, we believe that zipalertinib has shown substantial antitumor activity with broad EGFR exon 20 variant coverage; a rapid onset of action; and encouraging response quality as measured by PFS.

(A) Preliminary Efficacy Results from Ongoing Phase 1/2a Trial of Zipalertinib

(B) Best Response % Change from Baseline (target lesion)

Phase 1/2a Food Effect Study

In addition to the Phase 1/2a trial described above, in 2022 we completed a 16 patient preliminary food effect module evaluating the single-dose pharmacokinetics (PK) of a single dose of 150 mg zipalertinib in an all-comer solid tumor population. Employing a randomized cross-over design, each patient received 150 mg zipalertinib in both the fed and fasted state in order to assess the effect of taking the drug with food on exposure. The results showed that co-administering the drug with food did not meaningfully change zipalertinib exposure. Consistent with decision rules reviewed by the FDA, we will explore the safety and efficacy of the 150 mg twice-daily dose in a fed state as part of the pivotal Phase 2b portion of the study, as described below.

Pivotal Phase 2b Study

In November 2022, in collaboration with our partners at Taiho, we initiated an ongoing, pivotal Phase 2b study of zipalertinib in adult NSCLC patients with EGFRex20ins mutations who progressed after prior systemic therapy, a patient population consistent with the Phase 1/2a trial. The pivotal portion of the Phase 2b study consists of two parallel, non-randomized dosing cohorts: one cohort of patients receiving a 100 mg twice-daily dose of zipalertinib in the fasted state and a second cohort of patients receiving a 150 mg twice-daily dose of zipalertinib in the fed state. Rigorous stopping rules are being applied to the 150 mg cohort in which this dose must show superior efficacy and safety relative to the Phase 1/2a results for the 100 mg fasted dose. If the 150 mg cohort fails to show superiority on both safety and efficacy criteria, we will stop enrollment and continue enrolling patients only at the 100 mg twice-daily fasted dose. The trial protocol also includes a separate cohort intended to evaluate zipalertinib at the 100 mg fasted dose level in adult NSCLC patients with EGFRex20ins mutations who have received prior treatment with an approved exon 20 therapy.

CLN-049

Overview

CLN-049, is a humanized bispecific antibody that we are developing for the treatment of AML and MDS. We are currently evaluating CLN-049 in a multi-ascending dose trial in adult patients with relapsed or refractory AML (“r/r AML") and MDS. CLN-049 is designed to simultaneously bind to FLT3 on the extracellular domain of target leukemic cells and to CD3 on T cells, triggering the T cells to kill the target cancer cells. FLT3 is a proto-oncogene and a validated target, and several kinase inhibitors targeting mutant FLT3 are approved for the treatment of r/r AML, but their use is limited to approximately 25% of the AML population with FLT3 mutations. By targeting the extracellular domain of FLT3, CLN-049 has the potential to address up to approximately 80% of AML patients that express mutant or wild-type FLT3. Preclinically, we have observed that CLN-049 led to highly potent FLT3-dependent killing of leukemic cells in vitro at a wide range of FLT3 expression levels on AML cells regardless of FLT3 mutational status. In preclinical studies, treatment with CLN-049, even at low doses, led to survival benefit in an AML xenograft model and elimination of leukemic blasts in mouse models implanted with AML cell lines or primary patient leukemic cells.

Background on Acute Myeloid Leukemia and FLT3

The American Cancer Society estimates that, in 2023, there will be approximately 20,380 newly diagnosed patients with AML and approximately 11,310 deaths from AML in the U.S. AML is a complex hematologic malignancy characterized by uncontrolled proliferation of malignant immature myeloid blast cell populations. These blasts may completely infiltrate and replace the bone marrow, resulting in major disruption of normal hematopoiesis and pancytopenia, very high numbers of circulating blasts in the peripheral blood, and infiltration of visceral organs as well as the skin. In addition, patients with AML may be susceptible to bleeding complications due to thrombocytopenia and experience complications from treatment with cytotoxic chemotherapy. These patients may also be severely immuno-compromised secondary to their disease and experience prolonged periods of neutropenia and lymphopenia. As a result, these patients are often susceptible to life-threatening infections that also contribute to severe morbidity and mortality.

Despite advancements in the treatment of AML, there continues to be a high unmet need in these patients. Eligible newly diagnosed patients are typically treated with intensive induction chemotherapy (“IC”), which may include continuous infusion of cytarabine with an anthracycline, in an attempt to achieve a complete remission. The majority of patients that experience complete remission undergo hematopoietic stem cell transplantation ("HSCT"). This regimen is the only currently available curative therapy for AML. However, 85% of patients over 60 years old are ineligible for IC and HSCT. Given an average age of diagnosis of 68 years old, curative therapy is not available for most AML patients. Despite aggressive first-line combination chemotherapy, the recent approvals of multiple targeted small molecules for molecularly defined AML patient subsets, and the use of HSCT in patients with a suitable matched donor, the prognosis of patients with AML remains extremely poor. Although 60% to 85% of younger adult patients achieve complete remissions, patients older than 60 years of age have inferior complete response rates of 40% to 60%. In addition, approximately 40% of all patients relapse following HSCT and approximately 10% of relapsed patients survive at least five years. Therefore, a significant unmet need remains for a broadly applicable, well-tolerated therapy that can produce high rates of durable responses.

FLT3 is a Class III RTK with a well-recognized and essential role in hematopoiesis. In healthy individuals, expression of FLT3 is restricted to a subpopulation of hematopoietic stem and progenitor cells ("HSPCs"), inducing their proliferation and differentiation into monocytes, dendritic cells, B cells, and T cells. FLT3 has been identified as a proto-oncogene and plays a key role in promoting leukemic cell proliferation and survival. Several small-molecule kinase inhibitors targeting FLT3 mutations are in development or have been approved for the treatment of AML. However, these product candidates and approved therapies only address approximately 25% of AML patients who have intracellular FLT3 genetic mutations but do not address the larger subset of patients with extracellular expression of FLT3 regardless of mutational status on the surface of cancer cells.

Studies using flow cytometry have shown that FLT3 is expressed on AML blasts in approximately 80% of AML patients, regardless of mutational status. In one study, leukemic bulk cells from 318 newly diagnosed or relapsed AML patients were evaluated for cell surface FLT3 protein expression, and 78% were found positive for FLT3, as shown in the figure below. This broad expression of FLT3 in AML patients suggests that targeting FLT3 with a biologic agent, namely a T cell engaging bispecific antibody that recruits T cells to kill tumor cells expressing FLT3 on the cell surface, could address a larger AML patient population than the targeted small-molecule inhibitors targeting the mutated version of the intracellular signaling domain of FLT3 that are approved or in development. Compared to other tumor surface antigens identified in AML, such as CD33 and CD123, FLT3 expression is generally restricted to a subpopulation of bone marrow HSPCs and circulating dendritic cells. FLT3 plays a key role in driving leukemogenesis and malignant progression of AML, promoting leukemic cell proliferation and survival. We believe that the expression of FLT3 on the surface of leukemic blasts in most AML patients and its role as a known oncogenic driver make it an attractive therapeutic target for a T cell engager approach.

Approximately 80% of AML Patients Show Positive Cell Surface FLT3 Protein Expression

CLN-049

As shown below, CLN-049 is a humanized bispecific antibody construct comprised of two FLT3-binding domains, an Fc-silenced humanized immunoglobulin G1 (“IgG1") backbone, and CD3-binding single-chain variable fragment domains ("scFvs"), fused to the C-terminus of the antibody’s heavy chain. In multiple preclinical studies, CLN-049 has demonstrated the ability to redirect T cells to lyse FLT3-expressing AML cells in vitro and potent antitumor activity in vivo. By targeting extracellular FLT3, regardless of mutant or wild-type status, we believe CLN-049 has the potential to address up to approximately 80% of AML patients, a broader patient population than existing small-molecule FLT3 kinase inhibitors acting on the intracellular domain, which are limited to a subset of approximately 25% of AML patients with FLT3 mutations.

CLN-049 Mechanism Potentially Allows for Broad FLT3 Depended AML Blast Killing

Preclinical Data

Given the observed variability in FLT3 expression levels among patients, we characterized the killing potential of CLN-049 across multiple cell lines expressing differing levels of FLT3 on the cell surface. As shown in the figures below, CLN-049 was observed to mediate robust target-dependent cell killing in vitro across all AML cell lines tested. Importantly, we observed that the drug concentration at which 50% of target cells are killed (the "EC50 value"), was in the sub-nanomolar range and did not seem to be dependent on the number of FLT3 receptor molecules found on AML target cells. In particular, we observed potent target cell killing even when those cells expressed fewer than 100 copies of the FLT3 receptor per cell. We also observed potent redirected lysis of AML cell lines with wild-type or mutant FLT3 expression. Based on these results, we believe CLN-049 may effectively kill AML target cells with even low levels of FLT3 expression, regardless of wild-type or mutant status, which could potentially translate into deeper and more durable responses in the clinic and may allow us to treat a larger subset of AML patients.

CLN-049 Demonstrated Killing of Target Cells Expressing a Range of FLT3, in vitro

CLN-049 Demonstrated Killing of Target Cells Expressing Wild-Type and Mutant FLT3, in vitro

FLT3 is not widely expressed on normal immune cells, but rather is restricted to certain hematopoietic stem cell precursors in the bone marrow and dendritic cell subsets in the periphery. As shown in the figure below, a recent study found that the expression level of FLT3 transcript was significantly higher on AML cells compared to normal tissues.

FLT3 Transcript Level is Higher on AML Cells Than on Normal Human Solid Tissues

CLN-049 has two CD3-binding arms that can potentially crosslink CD3 on T cells, which may result in target cell-independent T cell activation and systemic cytokine-related toxicities. In preclinical studies, we examined whether CLN-049 can lead to spurious T cell activation in the absence of target cells. As shown below, incubation of purified human T cells with CLN-049 in the absence of target-expressing cells did not induce T cell activation markers CD25 and CD69 on either CD4+ or CD8+ T cells as opposed to positive control anti-CD3 antibodies OKT3 and UCHT1 (CLN-049 parental anti-CD3 antibody) that induced T cell activation.

No T Cell Activation by CLN-049 in the Absence of Target Cells

The potential efficacy of CLN-049 was evaluated in a humanized mouse model where a human AML cell line was implanted systemically. As shown in the figure below, CLN-049 controlled AML leukemic burden in mice engrafted with human peripheral blood mononuclear cells (“PBMC") and led to improved survival of the mice in a dose-dependent manner beginning at very low doses. We believe CLN-049 effected this result by redirecting the T cells in the human PBMC population to kill the target AML cells.

Increased Survival of Engrafted Mice Starting at Very Low Doses of CLN-049

The anti-leukemic activity of CLN-049 was also evaluated using patient-derived AML or acute lymphoblastic leukemia (“ALL") blasts and PBMCs in disseminated humanized mouse models. As shown in the figure below, treatment with CLN-049 resulted in a significant reduction in the overall leukemic burden in the bone marrow in both the primary AML model and the primary ALL model. In contrast, a control T cell engaging bispecific antibody having the same format as CLN-049 but containing a non-specific target-binding domain did not impact the leukemic burden as compared to untreated control.

CLN-049 Demonstrated Potent Elimination of Patient-Derived AML Blasts in Mice

Ongoing Clinical Development

In December 2021, we initiated a Phase 1 clinical trial evaluating CLN-049 in r/r AML patients. The study is designed to primarily evaluate the pharmacokinetics and safety of the administration of CLN-049. We completed the single ascending dose portion of the Phase 1 trial testing intravenous administration of CLN-049 and initiated a multi-ascending dose portion of the study utilizing subcutaneous dosing in December 2022. We expect to present initial clinical data in mid-2023.

CLN-619

Overview

CLN-619 is a MICA/B-targeted, humanized IgG1 monoclonal antibody that we intend to initially develop for the treatment of solid tumors. CLN-619 was designed to promote an antitumor response through multiple mechanisms of action, including inhibition of MICA/B shedding, mediation of antibody-dependent cell-mediated cytotoxicity (“ADCC”), antibody-dependent cellular phagocytosis (“ADCP”), and enhancement of NKG2D receptor binding to MICA/B. The MICA/B receptor, NKG2D, is expressed on both innate and adaptive immune cell populations. Although several companies have disclosed preclinical MICA/B targeting programs, we are unaware of any clinical stage, antibody-based programs engaging this target, implying CLN-619 has first-in-class potential. In multiple in vivo preclinical tumor models, CLN-619 administration was associated with antitumor activity and reduced levels of serum MICA/B.

We believe CLN-619 has the potential to become a novel backbone agent for immuno-oncology therapy given the broad expression of MICA/B across tumor types and the biological rationale for combining CLN-619 with other agents. We are currently evaluating CLN-619 in an ongoing clinical trial for patients with advanced solid tumors. The trial design includes parallel evaluation of CLN-619 as a monotherapy and in combination with checkpoint-inhibitor therapy.

Background on NKG2D and MICA/B

NKG2D is a key activating receptor on NK cells responsible for cytolysis upon binding to ligands expressed on target cells. NKG2D is also expressed on other types of immune cells, including CD8+ß T cells, natural killer T cells, and  T cells, and can prime such cells for activation and enhance their antitumor activity as a co-activating receptor. Healthy cells do not normally express ligands of NKG2D, but will do so in response to cellular stress, such as oxygen or nutrient deprivation, radiation, viral infection, or oncogenic transformation.

MICA/B proteins are broadly recognized by NK cells,  T cells, and CD8+ß T cells via the NKG2D receptor. The engagement between the NKG2D receptor and MICA/B proteins triggers the effector cytolytic responses of NK cells and  T cells against tumor cells expressing MICA/B. In the case of CD8+ß T cells, effector responses mediated by the T cell receptor are enhanced by NKG2D-MICA/B interactions. NKG2D-mediated stimulation also results in the induction of cytokines, which further promotes the recruitment and the proliferation of immune cells and bolsters the immune response.

To evade potential cytotoxic destruction by NK cells and T cells, tumor cells expressing MICA/B have adopted shedding of MICA/B from their cell surface as a key evasion mechanism. The MICA/B alpha-3 domain contains a stretch of amino acids that allows for protease cleavage of an extracellular portion of MICA/B and subsequent release from the cell surface, thereby reducing the ability of MICA/B to interact with NKG2D and resulting in decreased NKG2D-mediated killing of tumor cells. This mechanism also concomitantly increases the amount of circulating serum MICA/B ("sMICA/B"). The mechanisms underlying this biology are illustrated below. Below, the top pathway shows the normal mechanism by which tumor-associated ligands of NKG2D, such as MICA/B, can induce the killing of stressed cells. The bottom pathway shows how tumor cells, through the proteolytic cleavage of MICA/B, can escape immune surveillance and immune cell-mediated killing.

MICA/B Serves as a Warning Signal to the Immune System to Eliminate Potentially Dangerous Cells

An analysis of the expression of the NKG2D ligands in The Cancer Genome Atlas ("TCGA"), shows that MICA and MICB are the two ligands for NKG2D that are most frequently expressed across a wide range of tumor types. In the results of the TCGA analysis shown below, the red shading indicates high expression levels of NKG2D ligands and blue shading indicates low expression levels. We believe the positive expression profile of MICA/B in many tumor types provides attractive development opportunities across a wide range of indications.

MICA/B are the Most Highly Expressed NKG2D Ligands Across a Wide Array of Tumor Types

Data generated via analysis of TCGA database by Monoceros Biosystems.

CLN-619

CLN-619 is a MICA/B-targeted humanized IgG1 antibody with a competent Fc gamma 1 domain capable of mediating effector cell functions through binding to Fc gamma receptors on innate immune cells.

We believe CLN-619 may affect antitumor activity through a multi-pronged mechanism of action. First, we believe that CLN-619 may prevent the proteolytic cleavage of MICA and MICB on cancer cells by proteases commonly found in the tumor microenvironment (noted as “1” in the figure below). This mechanism would enable the accumulation of MICA/B on the surface of cancer cells. In preclinical studies, treatment with a parental CLN-619 clone resulted in increased cell surface expression and reduced serum levels of MICA/B in various tumor cell lines, while CLN-619 treatment in vivo led to reduced serum levels of MICA/B. Elevated expression of MICA/B on the surface of cancer cells is expected to enhance killing of cancer cells by NK cells via binding of their NKG2D receptor to MICA/B. MICA/B also interacts with NKG2D expressed on gd T cells and natural killer T cells, where NKG2D can play the role of a co-activating receptor, lowering the threshold for T cell-mediated cancer cell lysis. Second, CLN-619 has a human IgG1 backbone with a wild-type Fc gamma domain, which allows it to engage NK cells by binding to their FcgRIIIa, leading to ADCC (noted as “2” in the figure below). In preclinical studies, treatment with CLN-619 was shown to induce ADCC in vitro. Third, the wild-type Fc gamma domain of CLN-619 enables it to mediate ADCP of target tumor cells via macrophage engagement (noted as “3” in the figure below). Finally, our preliminary preclinical data suggests that CLN-619 may have the potential to enhance the binding of MICA/B to NKG2D receptors on NK cells or other immune cells to provide for improved cancer cell lysis (noted as “4” in the figure below). We believe that all of these mechanisms may be acting in a coordinated manner to engage NK cells and other immune cells, which could result in the cancer cell lysis observed in the preclinical studies described below.

Three CLN-619 Modes of Action

Preclinical Data

The key mechanistic underpinning of CLN-619’s antitumor activity is its ability to stabilize and prevent the shedding of MICA/B expressed on the surface of cancer cells. In preclinical studies, CLN-619 prevented shedding across a variety of cancer cell lines. In a representative hepatoma PLC/PRF/5 cell line, soluble MICA in the supernatant decreased following treatment with CLN-619 compared to a control antibody as shown in the figure below.

CLN-619 Inhibits MICA/B Shedding from Tumor Cells

CLN-619 also demonstrated the ability to enhance NK cell-mediated killing of MICA/B expressing cancer cells in vitro. In an ADCC reporter bioassay, the parental clone of CLN-619, which has antibody variable region sequences from a mouse hybridoma from which CLN-619 was derived, induced ADCC in a dose-dependent and MICA/B binding-dependent manner, as shown in the figure below, where killing activity was measured by the relative luminescence units ("RLU"). Such ADCC activity was abrogated when mutations in the Fc region were introduced into h3F9-DANA, which eliminated the binding to FcRIIIa on NK cells that is key to mediating ADCC. An isotype control also failed to trigger ADCC, demonstrating the requirement of MICA/B target engagement.

Parental Clone of CLN-619 Induces Cell Killing at Low Concentrations

The antitumor activity of CLN-619 was further evaluated in multiple mouse tumor models. In a representative lung cancer xenograft model, CLN-619 treatment as a single agent resulted in tumor growth inhibition at all doses tested, as shown in the figure below. We also observed suppression of MICA shedding at all doses tested as measured by soluble MICA serum levels.

CLN-619 Demonstrated Tumor Growth Inhibition

in a HCC1534 Lung Cancer Xenograft Model

Ongoing Clinical Development Plan

We are currently evaluating CLN-619 in a global Phase 1 clinical trial in patients with advanced solid tumors. The trial design includes initial evaluation of CLN-619 as a monotherapy and in combination with checkpoint inhibitor therapy in parallel dose-escalation cohorts. Upon establishing a recommended Phase 2 dose, the trial design includes several expansion cohorts to evaluate the preliminary efficacy of CLN-619 as both a monotherapy and in combination with checkpoint inhibitor therapy in patients with multiple solid tumor types. Planned monotherapy expansion cohorts include one in NSCLC, one in cervical cancer, and up to three additional cohorts to be determined based on observations from the dose escalation portion of the study. Planned combination expansion cohorts include NSCLC, head and neck squamous cell carcinoma, and metastatic urothelial cancer. In addition, we will collect and analyze biomarkers, including sMICA, to inform the future development of CLN-619. Monotherapy dose escalation was initiated in December 2021 and the dose escalation with checkpoint inhibitor therapy was initiated as planned in 2022 after the 3 mg/kg monotherapy dose level cleared evaluation for dose-limiting toxicity. We expect to present initial clinical data in mid-2023.

Global Phase 1 Clinical Trial Design of CLN-619

CLN-418

Overview

CLN-418 is a fully human bispecific antibody targeting B7H4 and 4-1BB. In February 2023, we licensed from Harbour BioMed US Inc. ("Harbour") the exclusive rights to develop and commercialize CLN-418 in the U.S. in exchange for an upfront license fee of $25 million, plus up to $148 million in development and regulatory milestone payments, up to $415 million in sales-based milestone payments, and tiered royalties up to high teens on potential U.S. commercial sales. We are currently evaluating CLN-418 in a Phase 1 clinical study being conducted at U.S. and Australian sites in patients with advanced solid tumors.

Background on B7H4 and 4-1BB

We believe that B7H4 represents an attractive target for cancer immunotherapy. B7H4 is a member of the B7 family of immune regulatory proteins that includes important immune inhibitory ligands like PD-L1. B7H4 is expressed on the cell surface of tumor cells and has been shown to play an immunosuppressive role by inhibiting T cell proliferation and expansion. Expression of B7H4 in patient tumor samples has been correlated with advanced stages of disease, poor prognosis, and lower overall patient survival. While B7H4 is expressed at potentially clinically relevant levels across a range of solid tumors, including triple-negative breast cancer, NSCLC, and ovarian cancer, its expression is limited on normal tissues, indicating the potential for a wide therapeutic window. Finally, B7H4 often has minimal overlap with PD-L1 expression, which we believe creates the potential to address so-called “cold tumors” for which current PD-1 pathway immunotherapy approaches have demonstrated limited efficacy. The panel below includes B7H4 expression data from various studies conducted by Harbour.

B7H4 expression across solid tumor typesB7H4 relative to PD-L1 expression across solid tumor cells

4-1BB is a key costimulatory molecule expressed on T cells and NK cells and has emerged as an attractive immunotherapy target. Mechanistically, 4-1BB activation induces T cell proliferation and survival, stimulates the secretion of inflammatory cytokines, and can promote anti-tumor immunity. Monoclonal agonistic antibodies targeting 4-1BB have been shown to have the ability to stimulate immune cells and generate antitumor responses in patients, but not without challenging toxicity issues often associated with non-specific 4-1BB immune cell activation, such as liver toxicity which is thought to be caused by Fc-mediated cross-linking enabled by Fc gamma receptor expressing cells present in the liver.

CLN-418

CLN-418 is a fully human bispecific antibody that contains human B7H4 and 4-1BB binding domains that were selected to have high binding affinity to B7H4 and designed to enable B7H4-crosslinking dependent 4-1BB activation. CLN-418 includes a silenced Fc domain designed to avoid cross-linking mediated by Fc gamma receptor-expressing cells. By targeting B7H4 on tumor cells, we believe CLN-418 represents a unique approach to enable the conditional activation of 4-1BB in the tumor microenvironment. Because of this mechanism and because CLN-418 lacks an active Fc domain, we believe CLN-418 has the potential to avoid toxicities associated with non-specific 4-1BB activation seen with Fc-functional monoclonal 4-1BB agonist antibodies. Also, CLN-418 may have the potential to synergize with other cancer therapies, particularly immunotherapy approaches, making it a strong candidate for combination therapy.

CLN-418 Structure

Preclinical Data

Preclinical studies of CLN-418 in multiple tumor cell lines, summarized below, have demonstrated 4-1BB T cell activation, as measured by induction of IL-2, contingent on the presence of B7H4, unlike monoclonal 4-1BB agonistic antibodies, such as urelumab and utomilumab.

CLN-418 only elicits T-cell activation in the presence of B7H4

Preclinically, CLN-418 showed the ability as a single agent to eradicate tumors in vivo and drive a memory response that prevented tumor growth upon re-challenge in the mice. An example of these results is shown below in a syngeneic mouse tumor model, whereby CLN-418 demonstrates a dose-dependent inhibition of tumor growth, and mice with an initial complete response following treatment with CLN-418 are subsequently immune upon tumor re-challenge.

CLN-418 clears tumors in mice and drives a memory response that prevents tumor growth upon re-challenge

Ongoing Clinical Development Plan

We are currently evaluating CLN-418 in a Phase 1 clinical study being conducted at U.S. and Australian sites in patients with advanced solid tumors. The part 1 dose escalation will test up to seven dose levels of CLN-418, from 0.03 to 20 mg per kilogram, dosed once every three weeks. Once a proposed Phase 2 dose is determined, the part 2 dose expansion will evaluate up to 30 patients in each of three tumor specific expansion cohorts: one in NSCLC, one in breast cancer, and a third to be determined by the efficacy signals observed in part 1 of the clinical study. In parallel, we are exploring opportunities to expand the trial to include one or more combination arms, which may include approved immunotherapy agents or other emerging therapeutic candidates in investigational studies. Initial data from part 1 of the ongoing trial is expected in 2024.

CLN-978

Overview

CLN-978 is a half-life extended, humanized, single-chain bispecific antibody designed to simultaneously engage CD19 on cancer cells and CD3 on T cells, triggering redirected T cells to lyse the target cancer cells. In addition, CLN-978 has an HSA binding domain designed to prolong its serum half-life. CLN-978 mediated CD19-dependent cell lysis in vitro of target cell lines with a range of CD19 target expression levels. In preclinical in vivo studies, treatment with CLN-978, at extremely low and infrequent doses, led to inhibition of tumor growth and tumor regression in a humanized lymphoma xenograft mouse model. We intend to initially evaluate CLN-978 as a novel treatment for B-NHL and are currently preparing to enter Phase 1 clinical studies in 2023.

We designed CLN-978 based on a bispecific T cell engager-like format using tandemly arranged scFvs for CD19 and CD3, similar to blinatumomab. In addition, we incorporated a third domain in the form of a single-domain antibody (VHH) for binding to HSA. We believe that binding of CLN-978 to albumin has the potential to extend its serum half-life. An illustration of the CLN-978 structure is shown in the following figure.

Design of CLN-978, a CD19/CD3-bispecific T Cell Engager with Extended Serum Half-life

We have engaged with Adimab, LLC ("Adimab") to generate antibody-derived binding domains specific for CD19, CD3, and HSA with optimized biophysical and biochemical properties, tailored binding affinities as well as other parameters that are key to developability, manufacturability and preclinical testing of drug candidates. In preclinical studies, CLN-978 has demonstrated potent antitumor activity both in terms of redirecting T cells to lyse low-CD19 expressing cells in vitro and significant tumor growth inhibition in vivo. We believe these preclinical results support further evaluation of CLN-978 for its potential to improve upon the clinical efficacy of existing therapies. In addition, we believe the ability to target cells with low CD19 expression would potentially enable us to address patients such as those patients that progress following CAR-T therapy.

Preclinical Data

CLN-978 incorporates a CD19 binding domain that was engineered to achieve picomolar binding affinity to CD19 as measured using plasmon resonance, which we believe may contribute to cytolytic potency against low CD19-expressing cell lines in in vitro studies. As shown in the figure below, CLN-978 targets a range of CD19 expression levels in the engineered A20 cell lines evaluated as measured by both the picomolar EC50 values of redirected cell lysis and the maximum percentage of lysis. We believe this observation supports our hypothesis that CLN-978 may have the potential to more adequately address the patient population with lower levels of CD19 expression and/or patients in which CD19 expression is downregulated as a resistance mechanism to CD19-targeted therapies. It was also shown that the robust lysis of target cells was dependent on CD19 expression, as the A20 parental cell line, which lacks CD19 expression, was not susceptible to lysis at any of the drug concentrations tested.

CLN-978 Redirects Cell Lysis of Low CD19-expressing Cell Lines in vitro Cytotoxicity Assays

CLN-978 has also demonstrated antitumor activity in vivo in a humanized model, where the mice were implanted with a human Raji-luciferase lymphoma cell line (Raji B.luc) and human PBMC. As shown in the figure below, CLN-978 demonstrated significant tumor growth inhibition at every dose level tested, both via intravenous ("IV") or subcutaneous ("SC") administration. Furthermore, at the 3 microgram per kilogram dose level and above, CLN-978 treatment resulted in a complete response in 100% of treated mice, regardless of route of administration.

Antitumor Activity of CLN-978 in a Raji-luciferase human PBMC mouse model

Consistent with the tumor growth inhibition, we observed a statistically significant reduction in the number of both Raji B.luc cells and normal human CD19+ B cells in all CLN-978 treated groups as shown in the figure below.

Reduction in normal B cells and tumor cells in peripheral blood after treatment with CLN-978 in the huPBMC Raji B.luc mouse model

Ongoing Clinical Development Plan

We submitted an IND for CLN-978 in the fourth quarter of 2022. The FDA cleared our IND in January 2023. We remain on track to begin a Phase 1 clinical trial in 2023 evaluating CLN-978 in patients with relapsed/refractory B-NHL.

CLN-617

Overview

CLN-617 is a fusion protein uniquely combining, in a single agent, two potent antitumor cytokines, IL-2 and IL-12, with a collagen-binding domain for the treatment of solid tumors. The combination of IL-2 and IL-12 therapeutic administration has previously been shown to synergistically enhance T and NK cell functions in vitro and mediated pronounced therapeutic activity in preclinical tumor models, even in well-established mouse models with primary and/or metastatic tumors. For nearly five decades, clinical researchers have studied the powerful role cytokines play in stimulating an immune response to cancer. However, severe toxicities associated with systemic cytokine administration and a short serum half-life have hindered their clinical development and broader commercial uptake. Despite numerous advancements in protein engineering, delivery and targeting mechanisms, there are currently only two FDA-approved cytokine-based cancer therapies, with the most recent approval occurring over twenty years ago.

We have included multiple differentiating features in CLN-617’s design in order to address the historical limitations of cytokine-based therapy. First, tumor retention following intratumoral injection is enabled by the collagen-binding domain, due to the presence of collagen in all solid tumors, and by HSA, which increases the molecular weight to further reduce the rate of diffusion out of the tumor tissue. Retention may help minimize the systemic dissemination and associated toxicities of IL-2 and IL-12 and prolong their immunostimulatory antitumor activity in the tumor. Second, CLN-617 is the only product candidate that we are aware of that co-delivers IL-2 and IL-12 proteins, functionally enabling synergistic T and NK cell activation. Third, CLN-617’s construct uses fully wild-type domains, which potentially reduces the immunogenicity risk associated with engineered cytokines. Finally, unlike other intratumoral cytokine-based therapies, CLN-617 does not rely on viral infection or nucleic acid transfection for in situ expression.

CLN-617 Design

In preclinical studies, a murine surrogate of CLN-617 demonstrated robust single agent antitumor activity in both treated and untreated tumors without inducing systemic toxicity, as measured by reduction in body weight. Given the broad expression of collagen across multiple tumor types and the well-validated anti-tumor activity of cytokine-based therapies, we believe CLN-617 may have utility across a broad range of solid tumors. We believe that CLN-617 is a first-in-class opportunity given it is the only anti-cancer product candidate we are aware of that is designed to co-deliver IL-2 and IL-12 cytokines and retain them in the tumor microenvironment.

The collagen-binding retention technology used in CLN-617 is based on technology that originated in the laboratory of Professor Karl Dane Wittrup at the Massachusetts Institute of Technology ("MIT"). We have further developed and refined this technology to create our Amber platform, which we believe represents a novel platform with the potential to broaden the therapeutic window of cytokines and other immunostimulatory agents with substantially reduced systemic toxicity.

Preclinical Data

A murine surrogate incorporating the murine homologs of the constituent domains of CLN-617 was generated and named mCLN-617. Retention of mCLN-617 was demonstrated in mice bearing B16F10 tumors which were treated either intratumorally or intravenously with mCLN-617. Two hours after treatment, the concentration of mCLN-617 was assessed in serum, and we found that drug levels following intratumoral injection were on average <5% that of intravenously administered mCLN-617 (left panel below). These results suggest that mCLN-617 is efficiently retained in the tumor, thereby limiting systemic distribution. Intratumoral injection also enhanced the anti-tumor activity of mCLN-617. At each tested dose level, intratumorally administered mCLN-617 outperformed intravenously administered mCLN-617 as measured by tumor growth inhibition (right panel below).

Reduced Systemic Levels of mCLN-617 and Improved Efficacy Following Intratumoral Versus Intravenous Administration

We utilized the MC38 syngeneic tumor model to assess whether mCLN-617 treatment could generate long-term immune memory following primary tumor clearance. As shown in the left panel below, mCLN-617 led to 100% complete responses in treated animals, whereas no complete responses were observed in control or anti-PD1 treated groups. Subsequently, we re-injected tumors into animals that achieved a complete response. As shown in the right panel below, five out of ten mice previously treated with mCLN-617 rejected the newly injected tumors, and all tumors that grew out did so at a slower rate than tumors in age-matched naïve controls. Similar results were achieved in the CT26 syngeneic tumor model.

High Complete Response Rate and Memory Response Following mCLN-617 Treatment

We demonstrated that in addition to mediating long-term memory, mCLN-617 is capable of generating responses against established untreated distal tumors due to the induction of systemic immunity, also known as an abscopal effect. We utilized C57BL/6 mice bearing two MC38 tumors, only one of which was treated with mCLN-617, either alone or in combination with systemically delivered anti-PD1 antibody. mCLN-617 alone mediated significant regression, including complete responses, of both the treated and untreated tumors. The effect was more consistent and durable in the untreated tumor when combined with anti-PD1, despite no significant survival benefit with anti-PD1 treatment alone. These results demonstrate both an abscopal effect and synergy of mCLN-617 with systemically administered anti-PD1 antibody.

Intratumorally delivered mCLN-617 Inhibits Tumor Growth in Both Treated and Untreated Tumors and Synergizes with Systemically Delivered Anti-PD1 Therapy

Through our ongoing studies with mCLN-617, we are seeking to characterize the mechanism of action by which a locally retained cytokine fusion can generate robust systemic anti-tumor immunity. Studies with mCLN-617 in mice bearing two MC38 tumors have thus far demonstrated an improved ratio of effector T cells to immunosuppressive regulatory T cells in both treated and untreated tumors. Furthermore, tumor-specific T cells expanded in peripheral blood, providing evidence of a vaccine-like mechanism of action.

The fully human CLN-617 clinical candidate has been generated, and the bioactivity of both cytokines and the collagen-binding domain has been confirmed in vitro. Both a non-GLP pharmacokinetic study and a GLP toxicology study with CLN-617 have been conducted in non-human primates to support an IND filing.

Based on the results of our preclinical studies with mCLN-617, we believe that the inclusion of a collagen-binding domain by our Amber platform has the potential to allow for the safe retention of high levels of cytokines in the tumor microenvironment. While remarkable progress has been made in the treatment of cancer with the adoption of checkpoint inhibitors, including pembrolizumab, ipilimumab, and nivolumab, only a fraction of patients with solid tumors respond to these therapies. We believe a well-tolerated agent that can deliver the functional synergies of IL-2 and IL-12 has the potential to treat a broad range of solid tumors, including those that are not responsive to checkpoint inhibitors.

In February 2023, we filed the IND for CLN-617 and intend to initiate a Phase 1 study by the end of 2023, pending IND clearance.

Our Other Preclinical Programs

Competition

The biotechnology and pharmaceutical industries are characterized by the rapid evolution of technologies and understanding of disease etiology, intense competition and a strong emphasis on intellectual property. We believe that our differentiated business model, approach, scientific capabilities, know-how and experience provide us with competitive advantages. However, we face, and will continue to face, competition from companies focused on more traditional therapeutic modalities, such as small-molecule inhibitors. We expect substantial competition from multiple sources, including major pharmaceutical, specialty pharmaceutical, and existing or emerging biotechnology companies, academic research institutions, governmental agencies, and public and private research institutions worldwide. Many of our competitors, either alone or through collaborations, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved products than we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These companies also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and recruiting patients in clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. As a result, our competitors may discover, develop, license or commercialize products before or more successfully than we do.

We also face competition more broadly across the oncology market for cost-effective and reimbursable cancer treatments. The most common methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy, biologic therapy, such as monoclonal and bispecific antibodies, immunotherapy, cell-based therapy and targeted therapy, or a combination of any such methods. There are a variety of available drug therapies marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While our product candidates, if any are approved, may compete with these existing drugs and other therapies, to the extent they are ultimately used in combination with or as an adjunct to these therapies, our product candidates may not be competitive with them. Some of these drugs are branded and subject to patent protection, and others are available on a generic basis. Insurers and other third-party payors may also encourage the use of generic products or specific branded products. As a result, we may face challenges in obtaining market acceptance of, and gaining significant share of the market for, any of our product candidates that we successfully introduce to the market. In addition, many companies are developing new oncology therapeutics, and we cannot predict what the standard of care will be as our product candidates progress through clinical development.

With respect to zipalertinib, which we are co-developing with an affiliate of Taiho, we are aware of other EGFR inhibitors that have accelerated approval or are in clinical development for the treatment of NSCLC patients harboring EGFRex20ins mutations. In May 2021, Rybrevant (amivantimab), an EGFR/cMET bispecific antibody that was developed and is now marketed by Johnson & Johnson obtained accelerated approval from the FDA for adult patients with locally advanced or metastatic NSCLC with EGFRex20ins mutations whose disease has progressed on or after platinum-based chemotherapy. Additionally, in September 2021, Exkivity (mobocertinib), which was developed and is now marketed by Takeda Pharmaceuticals, Inc., obtained accelerated approval from the FDA for adult patients with locally advanced or metastatic NSCLC with EGFRex20ins mutations whose disease has progressed on or after platinum-based chemotherapy. We believe that the most advanced clinical-stage programs for EGFRex20ins patients are sunvozertinib from Dizal Pharmaceutical Co., Ltd and and furmonertinib from ArriVent BioPharma, Inc. and Allist Pharmaceuticals, Inc. Other clinical-stage EGFR ex20ins TKI programs include Oric Pharmaceuticals, Inc.’s ORIC-114 (Voronoi, Inc., in mainland China, Hong Kong, Macau and Taiwan) and Blueprint Medicine Corporation’s LNG-451.

With respect to CLN-049, we are aware of several companies that are developing bispecifics for the treatment of AML, including those targeting CD3 and CD33 (Amgen Inc. ("Amgen") and Amphivena Therapeutics, Inc.), CD123 (Macrogenics, Inc. and Xencor, Inc.), and CCL1/CLEC12A (Merus N.V. and Genentech, Inc.). Amgen is developing a bispecific T cell engager targeting FLT3 for AML. There are also several targeted small-molecule therapies approved for the treatment of r/r or first-line AML, including for AML with FLT3 mutations, such as Astellas Pharma Inc.’s XOSPATA (gilteritinib) and Novartis International AG’s ("Novartis") RYDAPT (midostaurin). We are also aware of other small molecules that are approved or in development for AML patients with FLT3 mutations, including IDH inhibitors, such as TIBSOVO (ivosidenib) by Servier Pharmaceuticals LLC and IDHIFA (enasidenib) by Agios Pharmaceuticals, Inc., BCL2 inhibitors, such as VENCLEXTA (ventoclax) by AbbVie Inc., and hedgehog pathway inhibitors, such as DAURISMO (glasdegib) by Pfizer, Inc. ("Pfizer").

With respect to CLN-619, we are aware of several companies that are developing cancer therapies targeting MICA/B as a monotherapy and/or in combination with other agents, including: CanCure LLC, Genentech Inc., Novartis, and Bristol-Myers Squibb Company ("Bristol-Myers Squibb"). To our knowledge, none of them has entered clinical development.

With respect to CLN-418, we are unaware of any other candidates in development that combine 4-1BB and B7H4 in a single bispecific molecule. However, there are several candidates that target one or the other of these molecules. For example, urelumab by Bristol Meyers Squibb Company is a monoclonal antibody targeting 4-1BB. Several companies are developing monoclonal antibodies, antibody-drug conjugates, or (CD3) T-cell engagers directed towards B7H4. These companies include Amgen, Nextcure, Inc., Genmab A/S ("Genmab"), Pfizer, AstraZeneca plc ("AstraZeneca"), Seagen Inc., Mersana Therapeutics Inc., and Jiangsu Hansoh Pharmaceutical Group Co., Ltd. Several companies are also developing 4-1BB agonists that target other tumor associated antigens rather than B7H4 (e.g. PD-L1, FAP, CD40, etc.) including Genmab, Inhibrx, Inc., Eli Lilly and Company, Boehringer Ingelheim Pharma GmbH, and Roche AG ("Roche").

With respect to our CLN-978 program, we are aware of a number of companies developing product candidates that target CD19 or other tumor antigens relevant to B-cell ALL and B-NHL using immune cells or other cytotoxic modalities. These mainly include immune cell redirecting therapeutics (e.g., T cell engagers), adoptive cellular therapies (e.g., CAR-Ts) and antibody drug conjugates. Companies developing cell therapies or antibodies targeting CD19 include, but are not limited to, AstraZeneca, Morphosys AG, Novartis, Gilead Sciences Inc., Bristol-Myers Squibb, Allogene Therapeutics Inc., Century Therapeutics, Inc., Nkarta Inc., Autolus Therapeutics plc, ADC Therapeutics, and Amgen.

With respect to CLN-617, we are not aware of any other drug candidates currently under development that integrate both IL-2 and IL-12 into a single multi-functional construct and stimulate the immune system in a tumor-specific manner. We are aware of several companies actively developing clinical-stage programs as either individual IL-2 or IL-12 therapies, including: Alkermes plc, Sanofi S.A., Philogen S.p.A., Roche, Apeiron Biologics AG, Werewolf Therapeutics, Inc., Xilio Therapeutics, Inc., and Dragonfly Therapeutics Inc.

If our competitors develop and commercialize drugs that are safer, more effective, have fewer or less severe side effects, are more convenient to administer, are less expensive or have a more favorable label than our product candidates, we could see a reduction or elimination in our commercial opportunity. Our competitors also may obtain FDA or other regulatory approval for their drugs more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. The key competitive factors affecting the success of all of our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other third-party payors.

License Agreements

DKFZ/Tübingen

Our partially-owned subsidiary Cullinan Florentine is party to an exclusive license agreement (the "DKFZ/Tübingen License Agreement"), with Deutsches Krebsforschungszentrum ("DKFZ"), Eberhard Karls University of Tübingen, Faculty of Medicine ("University of Tübingen"), and Universitätsmedizin Gesellschaft für Forschung und Entwicklung mbH, Tübingen ("UFE"). Pursuant to the DKFZ/Tübingen License Agreement, DKFZ and University of Tübingen, collectively referred to as the Licensor, granted to Cullinan Florentine an exclusive (even as to Licensor, UFE and its and their affiliates), worldwide, milestone- and royalty-bearing, license under certain licensed patent rights, applications, technical information and know-how, with the right to grant sublicenses through multiple tiers to research, develop, commercialize or otherwise exploit licensed products, itself and through its affiliates and third parties, within the field. Cullinan Florentine has the sole right, but not the obligation, to prosecute and maintain all licensed patent rights worldwide, provided that Licensor may take over or continue such prosecution and maintenance if Cullinan Florentine elects to cease the prosecution or maintenance of a licensed patent right.

Under the DKFZ/Tübingen License Agreement, Cullinan Florentine is obligated to achieve certain regulatory and research and development performance benchmarks (collectively, the "Performance Benchmarks"), by certain specified dates (collectively, the "Performance Dates"). If a Performance Benchmark is not achievable by the applicable Performance Date, Cullinan Florentine may extend the Performance Date for any single Performance Benchmark by a mid-single digit amount of months by providing written notice to Licensor and paying a non-refundable, non-creditable extension fee per each such extension. Cullinan Florentine may extend the Performance Date for any single Performance Benchmark up to a low single digit amount of times, provided that Cullinan Florentine may only request an extension a mid-single digit amount of times. If Cullinan Florentine is unable to seek a further extension per the preceding sentence, then Cullinan Florentine may seek a further extension by providing written notice to Licensor and any such extension shall be subject to the prior written approval of the Licensor, such approval not to be unreasonably withheld or delayed. As of December 31, 2022, Cullinan Florentine has met the first performance benchmark to create a master cell bank.

Additionally, Cullinan Florentine shall pay certain non-refundable, non-creditable milestone payments to Licensor upon the occurrence of certain clinical and regulatory events by a licensed product, whether triggered by Cullinan Florentine, its affiliates or sublicensees. Each milestone payment is paid one time only up to an aggregate of $28.0 million. No milestones have been achieved to date under the DKFZ/Tübingen License Agreement.

Furthermore, Cullinan Florentine is required to pay running low to mid-single digit royalty percentage on net sales of each licensed product on a country-by-country and product-by-product basis during the royalty term, subject to certain offsets or reductions. The aggregate, worldwide royalties due to Licensor for net sales of any licensed product in a calendar year shall not be reduced to an amount less than low to mid-single digit percentages. Such royalty obligations will expire on a country-by-country and product-by-product basis upon the later of (a) the expiration of the last valid claim of a patent which covers a product in such country and (b) a low double-digit anniversary following the first commercial sale of a product in such country. Under certain conditions upon a first change in control, Cullinan Florentine shall pay a non-refundable, non-creditable mid-single digit percent of sale proceeds, provided, however, that such payment shall not be required following consummation of an initial public offering of Cullinan Florentine.

Either party may terminate the agreement upon a material breach by the other party or insolvency of the other party. Cullinan Florentine may terminate the DKFZ/Tübingen License Agreement for any or no reason after the first filing of an IND or clinical trial agreement, by providing prior written notice. Licensor may terminate the agreement by providing prior written notice, if Cullinan Florentine or any of its affiliates challenges the validity of certain patent rights. Unless earlier terminated, the DKFZ/Tübingen License Agreement continues on a perpetual basis. Refer to Note 7, License and Collaboration Agreements, of our consolidated financial statements included in this Annual Report on Form 10-K for further detail regarding the DKFZ/Tübingen License Agreement.

MIT

Our partially-owned subsidiary Cullinan Amber is party to an exclusive patent license agreement (the "MIT License Agreement") with MIT. Pursuant to the MIT License Agreement, MIT granted to Cullinan Amber an exclusive, worldwide, milestone-, equity- and royalty-bearing license under certain licensed patent rights and applications, with the right to grant sublicenses through three tiers (so long as Cullinan Amber remains an exclusive licensee of the patent rights in the field worldwide) to develop, make, have made, use, sell, have sold, offer to sell, lease, and import licensed products containing specific fusion proteins in the field of diagnosis, prognosis, prophylaxis or treatment of cancer in humans or other animals. MIT shall prepare, file, prosecute and maintain all of the patent rights, and Cullinan Amber shall cooperate with the prosecution, provide comments on patent prosecution documents, and pay all fees and costs relating to such prosecution and maintenance.

Cullinan Amber shall reimburse MIT for certain documented, out-of-pocket expenses incurred by MIT in connection with the preparation, filing, prosecution, maintenance and defense of the patent rights. The MIT License Agreement also provides for anti-dilution adjustments, requiring Cullinan Amber to issue MIT additional shares to ensure the shares issued to MIT do not equal less than the mid-single digit percentage amount until a financing threshold representing the aggregate investment in Cullinan Amber is reached. MIT was also granted participation rights, up to a low double-digit percentage of the securities issued, in any proposed financings of Cullinan Amber. Cullinan Amber is also responsible for paying non-refundable, creditable annual license maintenance fees in an increasing amount over a certain number of years of the license and a fixed amount subsequent to this period of time. In addition, MIT granted to Cullinan Amber an exclusive option to amend the definition of field to include expansion fields, and each such amendment would trigger the payment to MIT of an amendment fee and cause an amendment, to be negotiated upon exercise of the option, to Cullinan Amber’s financial obligations with respect to the licensed products to reflect the additional rights and value being added.

Additionally, Cullinan Amber shall pay certain non-refundable, non-creditable milestone payments to MIT upon the achievement by itself or its sublicensees of certain clinical and regulatory milestones in an aggregate amount up to $7.0 million for each distinct licensed product. Each milestone payment is paid one time only up to a certain payment amount, except there are separate milestone payments payable for a second and third indication of a licensed product in an aggregate amount up to $5.5 million per product. Cullinan Amber shall also pay to MIT certain one-time milestone payments for the achievement of certain commercial milestones based on the calculation of net sales across all licensed products in all indications in an aggregate amount up to $12.5 million. As of December, 31, 2022, no milestones have been achieved under the MIT License Agreement.

Under certain conditions upon a change in control, Cullinan Amber is required to pay a specified change in control fee and Cullinan Amber’s clinical and regulatory milestone payments shall be increased by a certain low three-digit percentage amount.

Furthermore, Cullinan Amber is required to pay a running mid-single digit royalty percentage on net sales of all licensed products for each reporting period, subject to certain offsets or reductions. The royalties due to MIT for net sales of all licensed products shall not be reduced by more than 50%. Cullinan Amber is also required to share any income from sublicensing the licensed products, with the percentage to be determined by the clinical phase of the licensed product, no greater than low-to-mid double-digit percentages. Such royalty obligations will expire on a country-by-country and product-by-product basis upon the expiration or abandonment of all issued patents and filed patent applications within the patent rights.

Under the MIT License Agreement, MIT must notify Cullinan Amber of certain patentable inventions conceived and reduced to practice during a certain period of time ("Improvements") and Cullinan Amber has the option to acquire rights to those Improvements upon MIT’s approval of a business and development plan, not to be unreasonably withheld, for a specified fee. In addition to this specified fee, Cullinan Amber’s financial obligations with respect to the Improvements may be amended to reflect the value being added, such as by adding an upfront fee, maintenance fees, and milestone payments.

Cullinan Amber may voluntarily terminate the MIT License Agreement for any reason after providing written notice within a specified period of time in advance, provided that all amounts due to MIT have been paid. MIT has the right to terminate the MIT License Agreement upon written notice to Cullinan Amber if Cullinan Amber ceases to carry out its business related to the MIT License Agreement. Either party may terminate the MIT License Agreement upon a material breach by the other party. Unless earlier terminated, the MIT License Agreement shall remain in effect until the expiration or abandonment of all issued patents and the filed patent application within the patent rights. Refer to Note 7, License and Collaboration Agreements, of our consolidated financial statements included in this Annual Report on Form 10-K for further detail regarding the MIT License Agreement.

Adimab

We have a collaboration agreement (the "Adimab Collaboration Agreement"), with Adimab. Pursuant to the Adimab Collaboration Agreement, we selected a single-digit number of biological targets against which Adimab used its proprietary platform technology to discover and/or optimize antibodies based upon mutually agreed upon research plans. Under the Adimab Collaboration Agreement, we have the ability to select a specified low single-digit number of additional biological targets against which Adimab will provide additional antibody discovery and optimization services.

During the research term and evaluation term for a given research program with Adimab, we have a non-exclusive worldwide license under Adimab’s technology to perform certain research activities and to evaluate the program antibodies to determine whether we want to exercise its option to obtain a royalty-free, fully paid, non-exclusive license under Adimab’s background patent rights to exploit such antibodies sublicensable through multiple tiers (the "Adimab Option"). In the event we exercise the Adimab Option, we will pay an option fee for each target subject to certain adjustments.

Under the Adimab Collaboration Agreement, we paid a one-time, non-creditable, non-refundable technology access fee. We are also required to pay an annual access fee and research funding fees in connection with Adimab’s full-time employees’ compensation for performance of Adimab’s obligations under the Adimab Collaboration Agreement. We are also obligated to make certain research delivery, clinical and sales milestone payments to Adimab in an aggregate amount of up to $15.8 million for each product, on a product-by-product basis, subject to certain reductions and discounts.

Furthermore, we are obligated to pay certain royalty payments on a product-by-product basis at a low single-digit percentage of annual aggregate worldwide net sales. Such royalty obligations will expire on a country-by-country and product-by-product basis upon the later of (a) a certain low double-digit number of years after the first commercial sale of such product in such country and (b) the expiration of the last issued and not expired, permanently revoked, or invalid claim within a program patent covering such product as defined in the agreement.

We may terminate the Adimab Collaboration Agreement at any time, for any reason, upon a specified period advance written notice. The term of the Adimab Collaboration Agreement expires upon the last research program’s evaluation term in the event no Adimab Option is exercised or, in the event an Adimab Option is exercised, after the royalty term thereof expires at the later of a specified period or invalid patent coverage of the relevant product. Refer to Note 7, License and Collaboration Agreements, of our consolidated financial statements included in this Annual Report on Form 10-K for further detail regarding the Adimab Collaboration Agreement.

Harbour

In February 2023, we entered into a License and Collaboration Agreement (the “Harbour License Agreement”) with Harbour BioMed US Inc. (“Harbour”), pursuant to which Harbour granted us an exclusive license for the development, manufacturing and commercialization of HBM7008, which we now refer to as CLN-418, in the U.S.

Under the terms of the Harbour License Agreement, we paid Harbour an upfront license fee of $25 million upon entry into the agreement. Additionally, pursuant to the agreement, Harbour will be eligible to receive (i) up to $148 million in milestone payments based on the achievement of pre-specified development and regulatory milestones and (ii) up to an additional $415 million in sales-based milestones as well as tiered royalties up to high teens on a licensed product-by-licensed product basis, as a percentage of U.S. commercial sales. Harbour will grant us certain intellectual property rights to enable us to perform our obligations and exercise our rights under the Harbour License Agreement.

Unless earlier terminated, the Harbour License Agreement will continue in effect until the expiration of our royalty obligations. The Harbour License Agreement may be terminated by either party for a material breach by the other party, subject to notice and cure provisions, or in the event of the other party’s insolvency. We may terminate the Harbour License Agreement for convenience by providing 90 days’ written notice to Harbour.

Intellectual Property

Our intellectual property is critical to our business, and we strive to protect it, including by obtaining, maintaining, defending, and enforcing patents and other intellectual property, in the U.S. and internationally, for our proprietary therapeutic molecules, technology, improvements, platforms, product candidates and components thereof, novel biological discoveries, new therapeutic approaches and potential indications, and other inventions that are important to our business. For our product candidates, generally we initially pursue patent protection covering compositions of matter, methods of use, and methods of production. Throughout the development of our product candidates, we will seek to identify additional means of obtaining patent protection that would potentially enhance commercial success, including improvement to pharmaceutical formulations, methods of use and production.

As of February 16, 2023, our patent portfolio includes 9 patent families, including both patent applications we own, and patent applications exclusively in-licensed from external technology originators in a respective field. Specifically, we have exclusively in-licensed at least 31 patent applications pending worldwide. Patents that may issue from our pending patent applications, are expected to expire between 2039 and 2043, excluding any patent term adjustments or extensions, if applicable, that may be available. As to the patent term extension to restore patent term effectively lost following patent grant but during the FDA regulatory review process, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval.

We, through our subsidiary Cullinan MICA, own two patent families related to our CLN-619 product candidate, including patent families directed to compositions, and methods of using such compositions therapeutically. The family of patent applications with claims directed to CLN-619 compositions, if issued, are expected to expire in 2039, excluding any patent term adjustments or extensions, if applicable. For the first of these patent families, patent applications have so far been filed in Australia, Brazil, Canada, mainland China, the European Patent Office (the "EPO"), India, Indonesia, Israel, Japan, Korea, Malaysia, Mexico, New Zealand, the Philippines, Russia, Singapore, South Africa, Thailand, the U.S., and Vietnam. A patent family with claims directed to additional anti-MICA antibody compositions and methods of use, if issued, is expected to expire in 2043, excluding any patent term adjustments or extensions, if applicable. A U.S. provisional application has been filed under this family.

Our portfolio related to our CLN-049 product candidate includes one patent family, in-licensed from the University of Tubingen, directed to compositions, and methods of using such compositions therapeutically. This family of patent applications contain claims directed to CLN-049 compositions, which, if issued, are expected to expire in 2039, excluding any patent term adjustments or extensions, if applicable. Patent applications have so far been filed for this family in Australia, Brazil, Canada, mainland China, the EPO, Hong Kong, India, Indonesia, Israel, Japan, Korea, Malaysia, Mexico, New Zealand, the Philippines, Singapore, South Africa, Thailand, the U.S. and Vietnam.

Our portfolio related to our CLN-617 product candidate and Cullinan Amber program includes two patent families. The first family was in-licensed from MIT, directed to compositions, and methods of using such compositions therapeutically. This family of patent applications contain claims covering Cullinan Amber related compositions, which, if issued, are expected to expire in 2039, excluding any patent term adjustments or extensions, if applicable. Patent applications have so far been filed for this family in Australia, Brazil, Canada, mainland China, the EPO, Israel, Japan, Korea, Singapore, and the U.S. The second family is a PCT application owned by Cullinan Amber, which is directed to certain compositions, and methods of using such compositions therapeutically. This family contains claims covering additional Cullinan Amber related compositions, which, if issued, are expected to expire in 2041, excluding any patent term adjustments or extensions, if applicable.

Our portfolio related to our CLN-978 product candidate includes three patent families, directed to compositions, and methods of using such compositions therapeutically. The first two families of patent applications contain claims directed to CLN-978 compositions, which, if issued, are expected to expire in 2040, excluding any patent term adjustments or extensions, if applicable. Patent applications for both families have been filed in Australia, Canada, mainland China, the EPO, Israel, Japan, and the U.S. The third family of patent applications contains claims directed to alternative formats of compositions related to CLN-978, which, if issued, are expected to expire in 2039. Patent applications have been filed for this family in Australia, Canada, mainland China, the EPO, Hong Kong, Israel, Japan, South Africa and the U.S.

Our portfolio related to compositions comprising compounds which degrade HPK1 and methods of using such compounds therapeutically, includes one patent family that is jointly owned with Icahn School of Medicine at Mount Sinai. This patent family contains claims directed to compositions comprising HPK1 degraders and methods of using such compounds. A PCT application has been filed for this patent family. Applications claiming priority to the PCT application, if issued, are expected to expire in 2042, excluding any patent term adjustments or extensions.

Individual patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, patents issued for regularly filed applications in the U.S. are granted a term of 20 years from the earliest effective non-provisional filing date. In addition, in certain instances, a patent term can be extended to recapture a portion of the U.S. Patent and Trademark Office (the "USPTO") review period in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period.

Manufacturing

We do not own or operate, and currently have no plans to establish, any good manufacturing practice ("GMP"), manufacturing facilities. We rely, and expect to continue to rely, on third parties for the manufacture of our product candidates for preclinical and clinical testing, as well as for commercial manufacture if any of our product candidates obtain marketing approval. We also rely, and expect to continue to rely, on third parties to package, label, store and distribute our investigational product candidates and, if marketing approval is obtained, our commercial products. We believe this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment and personnel while also enabling us to focus our expertise and resources on the development of new product candidates.

We receive material from our contract manufacturing organizations ("CMOs") for preclinical testing. We receive clinical supply material manufactured in compliance with current GMP requirements ("cGMPs"), and we conduct audits before and during the trial, in cooperation with a CMO, to ensure compliance with the mutually agreed-upon process descriptions and cGMP regulations.

Zipalertinib, which we are co-developing with an affiliate of Taiho, is a small molecule that is manufactured in synthetic processes from available starting materials. The chemistry appears amenable to scale-up and does not currently require unusual equipment in the manufacturing process. We generally expect to rely on third parties for the manufacture of companion diagnostics, which are assays or tests that identify an appropriate patient population for zipalertinib. Depending on the technology solutions we choose, we may rely on multiple third parties to manufacture and sell a single test.

To date, we have obtained drug substance and drug product from single-source third-party contract manufacturers, which is typical for this stage of development. We utilize a global network of manufacturers for our programs in development, with vendors located in the U.S., Europe, and Asia. Any reduction or halt in supply of drug substance or drug product from these contract manufacturers could limit our ability to develop our product candidates until we find a qualified replacement contract manufacturer. However, we have procured or have plans to procure sufficient drug substance to supply the planned initial clinical studies for our programs. At the appropriate time in development, we intend to put in place agreements under which our third-party contract manufacturers will generally provide us with necessary quantities of drug substance and drug product on a project-by-project basis, based on our projected development and commercial supply needs.

CLN-049, CLN-619, CLN-418, CLN-978 and CLN-617 are manufactured from a vial of a master cell bank ("MCB"), from the respective production cell lines. We have one MCB for each program that was produced and tested in accordance with cGMPs and applicable regulations. We either already have in place or intend to produce working cell banks for each product candidate later in product development. It is possible that we could lose multiple cell banks from multiple locations and have our manufacturing severely impacted by the need to replace the cell banks. However, we believe we have adequate backup should any particular cell bank be lost in a catastrophic event.

Governmental Regulation

U.S. Food and Drug Administration Regulation

The FDA and other U.S. regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, safety, efficacy, import, export, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drugs and biologics such as those we are developing. We, along with our vendors, collaboration partners, clinical research organizations ("CROs"), clinical trial investigators, and CMOs will be required to navigate the various preclinical, clinical, manufacturing and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval of our product candidates. The process of obtaining regulatory approvals of drugs and ensuring subsequent compliance with appropriate U.S. federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable regulatory requirements at any time during the product development process or post-approval may subject an applicant to delays in development or approval, as well as administrative and judicial sanctions.

In the U.S., the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (as amended, the “FDCA"), and biologics under the FDCA and the Public Health Service Act (as amended, the "PHSA"), and their implementing regulations. Both drugs and biologics are also subject to other federal, state and local statutes and regulations. Our product candidates are early-stage and have not been approved by the FDA for marketing in the U.S.

Our product candidates must be approved for therapeutic indications by the FDA before they may be marketed in the U.S. For our drug product candidates regulated under the FDCA, such as zipalertinib, the FDA must approve a New Drug Application ("NDA"). For our biologic product candidates regulated under the FDCA and PHSA, such as CLN-049, CLN-619, CLN-418, and CLN-978, the FDA must approve a Biologics License Application ("BLA"). The process is similar and generally involves the following:

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completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with good laboratory practice ("GLP") requirements;

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submission to the FDA of an IND which must become effective before clinical trials may begin and must be updated annually and when certain changes are made;

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approval by an institutional review board ("IRB") or independent ethics committee at each clinical trial site before each trial may be initiated;

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performance of adequate and well-controlled clinical trials in accordance with good clinical practice ("GCP") requirements and other clinical trial-related regulations to establish the safety and efficacy of the investigational product for each proposed indication;

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preparation and submission to the FDA of an NDA or BLA;

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payment of user fees for FDA review of the NDA or BLA, unless waived;

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a determination by the FDA within 60 days of its receipt of an NDA or BLA to file the application for review;

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satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the product will be produced to assess compliance with cGMPs to assure that the facilities, methods and controls are adequate to ensure and preserve the drug or biological product’s identity, strength, quality and purity;

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satisfactory completion of any FDA audits of the clinical trial sites that generated the data in support of the NDA or BLA; and

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FDA review and approval of the NDA or BLA, including, where applicable, consideration of the views of any FDA advisory committee, prior to any commercial marketing or sale of the drug or biologic in the U.S.

Preclinical and Clinical Trials

Before testing any drug or biologic in humans, the product candidate must undergo rigorous preclinical testing. Preclinical studies include laboratory evaluations of chemistry, formulation and stability, as well as in vitro and animal studies to assess safety and in some cases to establish the rationale for therapeutic use. The conduct of preclinical studies is subject to federal and state regulations and requirements, including GLP requirements for safety and toxicology studies. In the U.S., the results of the preclinical studies, together with manufacturing information and analytical data must be submitted to the FDA as part of an IND.

An IND is a request for authorization from the FDA to administer an investigational product to humans and must become effective before clinical trials may begin. The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical studies. The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology and pharmacodynamic characteristics of the product; chemistry, manufacturing and controls information; and any available human data or literature to support the use of the investigational product. In the U.S., the IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises concerns or questions about the conduct of the clinical trial, including concerns that human research subjects will be exposed to unreasonable health risks and imposes a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. Some long-term preclinical testing may continue after the IND is submitted. Accordingly, submission of an IND may or may not result in FDA authorization to begin a trial.

The clinical stage of development involves the administration of the product candidate to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirements that all research subjects provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria and the parameters and criteria to be used in monitoring safety and evaluating effectiveness, including stopping rules that assure a clinical study will be stopped if certain adverse events should occur. Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND. Furthermore, each clinical trial must be reviewed and approved by an IRB, either centrally or at each institution at which the clinical trial will be conducted, to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable related to the anticipated benefits. The IRB also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed.

The FDA may, at any time during the initial 30-day IND review period or while clinical trials are ongoing under the IND, impose a partial or complete clinical hold based on concerns for patient safety and/or noncompliance with regulatory requirements. This order issued by the FDA would delay a proposed clinical study or cause suspension of an ongoing study until all outstanding concerns have been adequately addressed, and the FDA has notified us that investigations may proceed. Imposition of a clinical hold could cause significant delays or difficulties in completing planned clinical studies in a timely manner. In addition, the IRB or the sponsor may suspend or discontinue a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk. Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy. There also are requirements governing the reporting of ongoing clinical trials and completed clinical trials to public registries. In the U.S., information about applicable clinical trials, including clinical trials results, must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website.

A sponsor who wishes to conduct a clinical trial outside of the U.S. may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. The FDA will accept a well-designed and well-conducted foreign clinical study not conducted under an IND if the study was conducted in accordance with GCP requirements, and the FDA is able to validate the data through an onsite inspection if deemed necessary.

Clinical trials to evaluate therapeutic indications to support NDAs and BLAs for marketing approval are typically conducted in three sequential phases, which may overlap or be combined.

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Phase 1—Phase 1 clinical trials involve initial introduction of the investigational product in a limited population of healthy human volunteers or patients with the target disease or condition in the case of some products for severe or life-threatening diseases. These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, evaluate the side effects associated with increasing doses, and, if possible, to gain early evidence of effectiveness.

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Phase 2—Phase 2 clinical trials typically involve administration of the investigational product to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks. Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.

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Phase 3—Phase 3 clinical trials typically involve administration of the investigational product to an expanded patient population to further evaluate dosage, to provide substantial evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval. Generally, two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA or BLA.

Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication and are commonly intended to generate additional safety data regarding use of the product in a clinical setting. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA or BLA. Failure to exhibit due diligence with regard to conducting required Phase 4 clinical trials could result in withdrawal of approval for products.

During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical study investigators. Progress reports detailing the results of the clinical trials, among other information, must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators fifteen days after the trial sponsor determines the information qualifies for reporting for serious and unexpected suspected adverse events, findings from other studies or animal or in vitro testing that suggest a significant risk for human participants exposed to the drug or biologic and any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. The sponsor must also notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction as soon as possible but in no case later than seven calendar days after the sponsor’s initial receipt of the information.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the drug or biological characteristics of the product candidate and finalize a process for manufacturing the drug product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and manufacturers must develop, among other things, methods for testing the identity, strength, quality and purity of the final drug product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life and to identify appropriate storage conditions for the product candidate.

Expanded Access

Expanded access, sometimes called compassionate use, is the use of investigational products outside of clinical trials to treat patients with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options. FDA regulations allow access to investigational products under an IND by us or the treating physician for treatment purposes on a case-by-case basis for the following groups: individual patients (single-patient INDs for treatment in emergency settings and non-emergency settings); intermediate-size patient populations; and larger populations for use of the investigational product under a treatment protocol or treatment IND.

There is no requirement for a company to provide expanded access to its investigational product. However, if a company decides to make its investigational product available for expanded access, the FDA reviews each request for expanded access and determines if treatment may proceed. Expanded access may be appropriate when all of the following criteria apply: the patient has a serious or immediately life-threatening disease or condition, and there is no comparable or satisfactory alternative therapy to diagnose, monitor, or treat the disease or condition; the potential benefit justifies the potential risks of the treatment and the potential risks are not unreasonable in the context of the disease or condition to be treated; and providing the investigational product for the requested use will not interfere with the initiation, conduct, or completion of clinical investigations that could support marketing approval of the expanded access use or otherwise compromise the potential development of the expanded access use.

In the U.S., the Right to Try Act, among other things, provides an additional mechanism for patients with a life-threatening condition who have exhausted approved treatments and are unable to participate in clinical trials to access certain investigational products that have completed a Phase 1 clinical trial, are the subject of an active IND, and are undergoing investigation for FDA approval. Unlike the expanded access framework described above, the Right to Try Act does not require the FDA to review or approve requests for use of the investigational product.

Under the FDCA, sponsors of one or more investigational products for the treatment of a serious disease or condition must make publicly available their policy for evaluating and responding to requests for expanded access for individual patients. Sponsors are required to make such policies publicly available upon the earlier of initiation of a Phase 2 or Phase 3 study, or 15 days after the investigational drug or biologic receives designation as a Breakthrough Therapy, Fast Track product, or regenerative medicine advanced therapy. There is no obligation for a sponsor to make its investigational products available to eligible patients as a result of the Right to Try Act, but the sponsor must develop an internal policy and respond to patient requests according to that policy.

FDA Marketing Application Review and Approval Process

Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for one or more indications. An NDA is a request for approval to market a new drug for one or more specified indications, and a BLA is a request for approval to market a new biologic for one or more specified indications. The NDA or BLA must include all relevant data available from pertinent preclinical studies and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls, and proposed labeling, among other things. Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational drug, or the safety, purity and potency of the investigational biologic, to the satisfaction of the FDA. FDA approval of an NDA or BLA must be obtained before a drug or biologic may be marketed in the U.S.

In addition, under the Pediatric Research Equity Act ("PREA"), certain NDAs and BLAs and certain supplements to an NDA or BLA must contain data to assess the safety and effectiveness of the drug or biological product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The Food and Drug Administration Safety and Innovation Act requires that a sponsor who is planning to submit a marketing application or supplement to an application for a drug or biological product that includes a new active ingredient or clinically active component, new indication, new dosage form, new dosing regimen or new route of administration submit an initial Pediatric Study Plan within 60 days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and the FDA. Unless otherwise required by regulation, PREA does not apply to a drug or biological product for an indication for which orphan designation has been granted.

In the U.S., the FDA reviews all submitted NDAs and BLAs to ensure they are sufficiently complete to permit substantive review before it accepts them for filing and may request additional information rather than accepting the NDA or BLA for filing. The FDA makes a decision on accepting an NDA or BLA for filing within 60 days of receipt, and such decision could include a refusal to file by the FDA. The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information. In this event, the BLA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the application. The FDA reviews an NDA or BLA to determine, among other things, whether the product is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards, including cGMP requirements, designed to assure and preserve the product’s identity, strength, quality and purity. Under the goals and polices agreed to by the FDA under the Prescription Drug User Fee Act ("PDUFA"), the FDA targets ten months from the filing date in which to complete its initial review of an original NDA or BLA and respond to the applicant, and six months from the filing date of an original NDA or BLA filed for priority review. The FDA does not always meet its PDUFA goal dates for standard or priority NDAs or BLAs, and the review process is often extended by FDA requests for additional information or clarification.

Further, under PDUFA, as amended, each NDA or BLA must be accompanied by a user fee, and the sponsor of an approved NDA or BLA is also subject to an annual program fee. The FDA adjusts the PDUFA user fees on an annual basis. Fee waivers or reductions may be available in certain circumstances, including a waiver of the application fee for the first application filed by a small business. Additionally, no user fees are assessed on NDAs or BLAs for products designated as orphan drugs, unless the product also includes a non-orphan indication.

The FDA may refer an application for a drug or biologic to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, which reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA or BLA, the FDA typically will inspect the facility or facilities where the product is manufactured. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA or BLA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP and other requirements and the integrity of the clinical data submitted to the FDA. To assure GMP and GCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production, and quality control.

After evaluating the application and all related information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in some cases, a complete response letter. A complete response letter indicates that the review cycle of the application is complete and the application is not ready for approval. A complete response letter will usually describe all of the deficiencies that the FDA has identified in the NDA or BLA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the complete response letter without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling. In issuing the complete response letter, the FDA may recommend actions that the applicant might take to place the NDA or BLA in condition for approval, including requests for additional information or clarification. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.

Even if the FDA approves a product, depending on the specific risk(s) to be addressed, the FDA may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a product’s safety or efficacy after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a risk evaluation and mitigation strategy ("REMS"), which can materially affect the potential market and profitability of the product. REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use ("ETASU"). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patent registries. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some 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.

Orphan Drug Designation and Exclusivity

Under the Orphan Drug Act, the FDA may grant orphan drug designation ("ODD") to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with either a patient population of fewer than 200,000 individuals in the U.S., or a patient population of greater than 200,000 individuals in the U.S. when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the U.S. will be recovered from sales in the U.S. of that drug or biologic. ODD must be requested before submitting an NDA or BLA. After the FDA grants ODD, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. The granting of ODD does not convey any advantage in or shorten the duration of the regulatory review and approval process.

If a product that has received ODD and subsequently receives the first FDA approval for that drug for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA or BLA, to market the same drug or biologic for the same indication for seven years from the approval of the NDA or BLA, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity or if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition. Among the other benefits of ODD are tax credits for certain research and a waiver of the NDA or BLA application user fee.

A designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received ODD. In addition, orphan drug exclusive marketing rights in the U.S. may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. The FDA has historically taken the position that the scope of orphan exclusivity aligns with the approved indication or uses of a product, rather than the disease or condition for which the product received orphan designation. However, on September 30, 2021, the U.S. Court of Appeals for the Eleventh Circuit issued a decision in Catalyst Pharms., Inc. v. Becerra holding that the scope of orphan drug exclusivity must align with the disease or condition for which the product received orphan designation, even if the product’s approval was for a narrower use or indication. The FDA announced on January 24, 2023 that despite the Catalyst decision, it will continue to apply its longstanding regulations, which tie the scope of orphan exclusivity to the uses or indications for which the drug is approved, rather than to the designation. The FDA’s application of its orphan drug regulations post-Catalyst could be the subject of future legislation or to further challenges in court, and it remains to be seen how this decision affects orphan drug exclusivity going forward.

Expedited Development and Review Programs

The FDA maintains several programs intended to facilitate and expedite development and review of new drugs and biologics to address unmet medical needs in the treatment of serious or life-threatening diseases or conditions. These programs include Fast Track designation, Breakthrough Therapy designation, priority review and accelerated approval. Fast Track designation, Breakthrough Therapy designation, priority review and accelerated approval do not change the standards for approval but may expedite the development or approval process.

A new drug or biologic is eligible for Fast Track designation if it is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address unmet medical needs for such disease or condition. Fast Track designation applies to the combination of the product and the specific indication for which it is being studied. Fast Track designation provides increased opportunities for sponsor interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review once a marketing application is filed, meaning that the FDA may initiate review of sections of a Fast Track product’s application before the application is complete upon satisfaction of certain conditions.

In addition, a new drug or biological product may be eligible for Breakthrough Therapy designation if it is intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug or biologic, alone or in combination with or more other drugs or biologics, may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Breakthrough Therapy designation provides all the features of Fast Track designation in addition to intensive guidance on an efficient development program beginning as early as Phase 1, and FDA organizational commitment to expedited development, including involvement of senior managers and experienced review staff in a cross-disciplinary review, where appropriate.

Any product submitted to the FDA for approval, including a product with Fast Track or Breakthrough Therapy designation, may also be eligible for priority review. A product is eligible for priority review if it is intended to treat a serious or life-threatening disease or condition, and if approved, would provide a significant improvement in safety or effectiveness. For original NDAs and BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (compared with ten months under standard review).

CGEM US Equity

CGEM · 10-K · period ended 2022-12-31

Item 1. Business.

CGEM US Equity☆

CGEM · 10-K · period ended 2022-12-31

Item 1. Business.

CGEM US Equity