ITEM 1A. RISK FACTORS 38
ITEM 1B. UNRESOLVED STAFF COMMENTS 93
ITEM 1C. CYBERSECURITY 93
ITEM 2. PROPERTIES 94
ITEM 3. LEGAL PROCEEDINGS 95
ITEM 4. MINE SAFETY DISCLOSURES 96
PART II
ITEM 6. RESERVED 98
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 118
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 118
ITEM 9A CONTROLS AND PROCEDURES 120
ITEM 9B. OTHER INFORMATION 121
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENTS INSPECTIONS 121
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 121
ITEM 11. EXECUTIVE COMPENSATION 128
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 156
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 157
FINANCIAL STATEMENTS F-1
i
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act.
These forward-looking statements include, among other things, statements regarding our and our management team’s expectations,
hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other
characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking
statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,”
“intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,”
“could,” “may,” “might,” “possible,” “potential,” “predict,”
“should,” “would,” “will,” “seek,” “target,” and other similar words and
expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this
report may include, for example, statements about:
● our ability to realize the expected benefits of the Business Combination;
● our ability to maintain the listing of our securities on the NYSE American;
● our market opportunity;
● our ability to retain or recruit officers, key employees and directors;
● the impact of governmental laws and regulations; and
The
forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments
and their potential effects on our business. There can be no assurance that future developments affecting our business will be those
that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control)
or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the section entitled
“Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties
emerge from time to time and it is not possible for us to predict all such risk factors, nor can we assess the effect of all such risk
factors on our business or the extent to which any factor or combination of factors may cause actual results to differ materially from
those contained in any forward-looking statements. Should one or more of these risks or uncertainties materialize, or should any of the
assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.
The
forward-looking statements made by us in this report speak only as of the date of this report. Except to the extent required under the
federal securities laws and rules and regulations of the Securities and Exchange Commission (“SEC”), we disclaim any obligation to update any forward-looking statement to reflect
events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light
of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in
fact occur, and you should not place undue reliance on these forward-looking statements.
Unless
the context otherwise requires, “we,” “us,” “our,” “registrant,” or “Registrant,”
“New Calidi” and the “Company” refer to Calidi Biotherapeutics, Inc., a Delaware corporation (f/k/a First Light
Acquisition Group, Inc., a Delaware corporation), and its consolidated subsidiaries following the Business Combination. Unless the context
otherwise requires, references to “FLAG” refer to First Light Acquisition Group, Inc., a Delaware corporation, prior to the
Business Combination. Unless the context otherwise requires, references to “Calidi” and “Calidi Biotherapeutics”
means Calidi Biotherapeutics(Nevada), Inc. (formerly Calidi Biotherapeutics, Inc.), a Nevada corporation and our wholly-owned subsidiary.
SELECTED
DEFINITIONS
Unless
the context otherwise requires or has otherwise been defined, the following defined terms shall have the meaning set forth below.
“anchor
investors” means certain unaffiliated qualified institutional buyers or institutional accredited investors who have each entered
into an Investment Agreement pursuant to which such anchor investors have purchased in the aggregate 1,452,654 founder shares from our
Sponsor and Metric at approximately $0.004 per share;
“Business
Combination” means the business combination of FLAG with Calidi pursuant to the terms and conditions of the Merger Agreement;
“Bylaws”
means the Second Amended and Restated Bylaws, as amended, in effect as of the date of this report;
“Calidi”
or “Calidi Biotherapeutics” means Calidi Biotherapeutics (Nevada), Inc. (formerly, Calidi Biotherapeutics, Inc.), a
Nevada corporation;
“Charter”
or “Second Amended and Restated Certificate of Incorporation” means the Second Amended and Restated Certificate of
Incorporation in effect.
“Closing”
means the closing of the Merger and all of the transactions contemplated by the Merger Agreement in accordance with the terms of the
Merger Agreement;
“Closing
Date” means the date on which the Business Combination was consummated which occurred on September 12, 2023;
“common
stock” or “Common Stock” means New Calidi Common Stock following
the Business Combination, with the rights and preferences and subject to the terms and conditions set forth in the Charter;
“DGCL”
means the Delaware General Corporation Law, as amended;
“Exchange
Act” means the Securities Exchange Act of 1934, as amended;
“FLAG”
means First Light Acquisition Group, Inc., a Delaware corporation;
“Investment
Agreement” means each of the investment agreements entered into between our Sponsor, Metric and the anchor investors pursuant
to which such anchor investors have purchased in the aggregate 1,452,654 founder shares from our Sponsor and Metric at approximately
$0.004 per share;
“Insiders”
are to, collectively, certain prior directors and officers of FLAG, including Thomas A. Vecchiolla, Michael J. Alber, Michael Reuttgers,
William J. Fallon, and Jeanne Tisinger;
“Metric”
means Metric Finance Holdings I, LLC, a Delaware limited liability company and an affiliate of Guggenheim Securities, LLC;
“New
Calidi Common Stock” means, following the consummation of the Business Combination, the common stock, par value $0.0001 per
share, of New Calidi.
“Registration
Rights Agreements” mean certain agreements requiring the Company to register the holders’ shares of common stock with
the Securities and Exchange Commission consisting of that certain (i) Amended And Restated Registration Rights Agreement dated September
12, 2023; (ii) Voting and Lock-Up Agreement dated as of January 9, 2023, and amended on April 12, 2023, and (iii) Series B Preferred
Stock Investors’ Rights Agreement dated June 16, 2023.
“Series
B Financing” means the equity financing contemplated by the Securities Purchase Agreements between Calidi Biotherapeutics,
Inc., and Jackson Investment Group, LLC and Calidi Cure, LLC, dated June 16, 2023, to secure commitments for the purchase of Series B
Convertible Preferred Stock of Calidi.
“Significant
Calidi Holder” means Allan Camaisa and/or Scott Leftwich; and
“Sponsor”
means First Light Acquisition Group, LLC, a Delaware series limited liability company.
“Sponsor
Shares” means 5,527,093 shares of common stock (net of cancellations from the original 5,750,000 shares of common stock sold)
in the aggregate originally sold to the Sponsor and Metric at $0.004 per share, and subsequently sold to the anchor investors at the
same purchase price or transferred other shareholders as an inducement to complete and finance the Business Combination.
PART
I
ITEM
1 – BUSINESS
Overview
We
are a clinical stage immuno-oncology company that is developing proprietary allogeneic stem cell-based platforms to potentiate and
deliver oncolytic viruses (vaccinia virus and adenovirus) and, potentially, other molecules to cancer patients. Recently we have
added into our pipeline early discovery research for a product candidate (CLD-400) involving a new platform (RTNova) based on
enveloped vaccinia virus design to target systemically multiple cancer sites, including, but not limited to, certain lung cancers
and other cancer metastatic solid tumors. We are currently developing two proprietary stem cell-based platforms and one enveloped
vaccinia virus platform designed to protect the oncolytic virus, whether natural or engineered, from neutralization by the
patient’s immune defenses, allowing for greater infection of the tumor cells and leading to a potential improvement in the
antitumor activity of oncolytic viruses over traditional “naked” oncolytic virus therapies. A “naked” virus
means the virus is unprotected from the patient’s immune defenses — it has no relevance to engineering of the virus.
Natural (unmodified virus) can be naked or protected. Similarly, engineered (modified virus) can be naked or protected.
Our
Product candidates using allogeneic stem cells (stem cells derived from humans other than the patient) or enveloped virotherapies
are being developed in order to:
● Enhance oncolytic viral amplification inside the allogeneic cells; and
We
believe our allogeneic stem cell product candidates have competitive advantages over other product candidates using autologous stem cells
(stem cells derived only from the individual patient) including the following:
Our enveloped technologies, which
are based on years of research involving the use of cells to protect and deliver oncolytic viruses, are being developed with a
focus on systemic delivery to target metastatic cancer.
Oncolytic
viral immunotherapy utilizes viruses that preferentially infect and replicate within cancer cells, resulting in both direct lysis of
the tumor cells as well as activation of an antitumor immune response, while leaving normal, healthy cells unharmed. Oncolytic viruses
may kill cancer cells by several mechanisms including virus replication-associated cell death (“oncolysis”), induction of
antitumor immune responses (involving tumor-specific T lymphocytes, and other immune cells), induction of bystander cell killing and
by viral induction of changes in tumor-associated vasculature. Currently, a number of oncolytic viruses are at various stages of clinical
development. Thus far, all clinically tested oncolytic viruses have faced a number of obstacles. A major obstacle to this approach has
been the rapid elimination of oncolytic virus by the patient’s immune system. Preclinical studies have demonstrated that the transient
immunomodulatory properties of adipose-derived mesenchymal stem cells (“AD-MSC”) and the tumor-tropic nature of immortalized
neural stem cells have the potential to potentiate the antitumor effects of oncolytic viruses regardless of the delivery mechanisms (intratumoral
or intravenous). Our proprietary platform leverages allogeneic culture-expanded stem cells, which we believe has the potential to prevent
viral elimination of an oncolytic virus payload by the patient’s immune system, and facilitate initial viral amplification and
expansion at the tumor site.
Oncolytic viral lysis of tumor
cells can result in immunological cell death (ICD), which has the ability to prime the patient’s immune system resulting in an antitumor
immune response to many tumor antigens, essentially creating a cancer vaccine-like response, in situ. This response may augment
direct cytolytic activity of the oncolytic viral therapy. Upon ICD of cancer cells, several immune mediators may be released, including
damage-associated molecular patterns (DAMPs), pathogen-associated molecular patterns (PAMPs), cytokines, and tumor-associated antigens
(TAAs). These immune mediators help “recruit” a patient’s immune cells to the tumor microenvironment (TME), transforming
an immunologically “cold” tumor (tumor that is not likely to trigger a strong immune response
and respond to immunotherapy) into an immunologically “hot” tumor (tumor that is likely
to trigger a strong immune response and respond to immunotherapy).
Our
platform leverages allogeneic culture-expanded stem cells, combined with an oncolytic virus payload, which is designed to prevent the
viral elimination by the patient’s immune system, and facilitates initial viral amplification and expansion at the tumor sites
by protecting the oncolytic virus from immune neutralization. This process is accompanied by immunogenic cell death of cancer cells leading
to improved induction of antitumor immune response, capable of targeting distal lesions though the abscopal effect.
Therefore, we believe that the combination of improved cell-based delivery, direct cancer cell killing by the oncolytic viruses and induction
of antitumor immunity may be responsible for the antitumor activity of our approach not only at the injected tumor site, but also at
distant metastatic tumor sites.
As
of the date of this report, there is currently only one oncolytic virus therapy that has received marketing approval for the
treatment of cancer in the United States. This product is T-VEC (Imlygic®), a modified herpes simplex virus (HSV) for the
treatment of patients with melanoma.
Our
Novel Oncolytic Virus Platform
NeuroNovaTM
Platform
Our
novel NeuroNovaTM Platform utilizes the immortalized neural stem cell bank HB1.F3.CD21 we procured from the City of Hope
loaded with the engineered oncolytic adenovirus CRAd-S-pk7 we procured from Northwestern University (“Northwestern”). We
are currently in the process of extending cell bank HB1.F3.CD21 at a commercial ready CMO. We have licensed from Northwestern the commercial
rights to the use of de-identified data from the Northwestern investigator sponsored clinical trial using immortalized neural stem cells
loaded with adenovirus CRAd-S-pk7 and we also have licensed the patents and other intellectual property rights for the commercial development
of immortalized neural stem cells loaded with adenovirus CRAd-S-pk7 from the University of Chicago.
The
oncolytic adenovirus, CRAd-S-pk7, was engineered by incorporating a survivin promoter to drive expression of the E1A gene, which is essential
for viral replication, and modifying the Ad5 fiber protein through the incorporation of a poly-lysine sequence (pk7). These alterations
enhanced tumor specificity and viral replication within glioma cells, which improved antitumor activity and increased survival in mouse
and hamster models. The neural stem cell line HB1.F3.CD21 was generated from cells harvested from fetal tissue. The final product candidate,
CLD-101, was created by incubating the CRAd-S-pk7 virus with neural stem cell line HB1.F3.CD21 using proprietary media and conditions.
The
parent cell line HB1.F3.CD21, which is a component of the NSC CRAd-S-pk7 product candidate, has been used in four clinical studies: (i) A Pilot
Feasibility Study of Oral 5-Fluorocytosine and Genetically Modified Neural Stem Cells Expressing E. coli Cytosine Deaminase for
Treatment of Recurrent High-Grade Gliomas, (ii) A Phase 1 Study of Cytosine Deaminase-Expressing Neural Stem Cells in Combination
with Oral 5-Fluorocytosine and Leucovorin for the Treatment of Recurrent High-Grade Gliomas, (iii) A Phase 1 Study of Intracranially
Administered Carboxylesterase-Expressing Neural Stem Cells in Combination with Intravenous Irinotecan for the Treatment of Recurrent
High-Grade Gliomas, and (iv) A Phase 1 Study of Neural Stem Cell-Based Virotherapy in Combination With Standard Radiation and
Chemotherapy for Newly Diagnosed High-Grade Glioma.
In
a series of preclinical studies, the scientists at Northwestern University observed stem cell-based delivery of the CRAd-S-pk7 virus
to murine tumors and demonstrated an increase of median survival by 50% as compared with mice that were treated with the same
oncolytic virus alone in experimental glioblastoma mouse models. Additionally, it was observed that intratumorally delivered
HB1.F3.CD21 stem cells were capable of migrating throughout the brain to deliver the therapeutic payload of CRAd-S-pk7 to distal
glioma metastasis. These findings warranted the translation of this therapeutic approach to the clinical setting.
We
believe our use of allogeneic neural stem cells loaded with CRAd-S-pk7 oncolytic adenovirus in the design and execution of our anticipated
clinical trials differs from other clinical trials utilizing oncolytic viruses that are administered “naked” intratumorally
or systemically that face rapid elimination by the patient’s immune system.
SuperNovaTM
Platform
Our
proprietary SuperNovaTM Platform utilizes our own allogeneic adipose-derived mesenchymal stem cell
(“AD-MSC”) line, VP-001, loaded with a tumor selective “CAL1” oncolytic vaccinia virus strain that we
currently manufacture under contract from Genscript ProBio in China. We believe our SuperNovaTM Platform is covered
by four patent families: (i) Combination Immunotherapy Approach for Treatment of Cancer, (ii) Smallpox Vaccine
for Cancer Treatment, (iii) Cell-Based Vehicles for Potentiation of Viral Therapy, and (iv) Enhanced Systems for
Cell-Mediated Oncolytic Viral Therapy. See, Intellectual Property.
The
CAL1 vaccinia virus is an unmodified virus belonging to the poxvirus family and is manufactured by propagating ACAM1000
clonal vaccine in CV-1 cells. ACAM1000 (manufactured in MRC-5 cells) is genetically identical to ACAM2000 (manufactured in Vero
cells). CAL1 vaccinia virus genome carries key genomic alterations that explain its reduced virulence. Two main disrupted
factors are immunomodulatory: (i) the tumor necrosis factor receptor, and (ii) the interferon α/ß binding protein. The
FDA approved ACAM2000 as a vaccine for smallpox in August 2007, based on this strain’s reduced virulence and safety profile in
preclinical animal studies and human clinical trials.
The
CAL1 virus has the following advantages over other oncolytic viruses:
a)
the virus is not a human pathogen — does not cause any known serious diseases in humans;
b)
it has a short, well-characterized life cycle, spreading very rapidly from cell to cell;
c)
it is highly cytolytic for a broad range of tumor cell types;
d)
it has a large insertion carrying capacity (> 25 kb) for the expression of exogenous genes;
e)
it has high genetic stability;
f)
it is amenable to large scale production of high levels of infectious virus;
g)
it remains in the cytoplasm and does not enter the host cell nucleus during the entire life cycle, and thus does not integrate into the
host genome;
h)
it has been used extensively over decades as a smallpox vaccine in millions of people with minimal and well documented side effects;
i)
existing approved drugs (vaccinia immunoglobulin (VIG), TPOXX (tecovirimat), and cidofovir) are available to treat any potential vaccinia
infections effectively; and
j)
it has been well tolerated when administered by different routes: intravenous, intraperitoneal, intrapleural, and intratumorally to patients
with advanced cancer.
Mesenchymal
stem/stromal cells (MSCs) are stromal regenerative cells with mesenchyme origin during embryonic development and possess the ability
to differentiate into osteoblasts, adipocytes, and chondrocytes. MSCs can be harvested from several adult tissue types, including bone
marrow, umbilical cord, and adipose tissue and have the following key characteristics:
i)
plastic adherence in standard culture conditions;
ii)
surface marker expression of CD105, CD73 and CD90; and
iii)
lack expression of CD45, CD34, CD14 or CD11b, CD79 or CD19 and HLA-DR.
Adipose
tissue-derived MSCs (AD-MSC) have significant advantages over MSCs derived from other sources because they are obtained from a minimally
invasive lipoaspiration procedure. The MSC concentration in adipose tissue is greater than all other tissues in the body and the MSC’s
potency is maintained with the donor’s age, unlike bone marrow-derived MSCs. Significant numbers of AD-MSC can be obtained due
to accessibility to the subcutaneous adipose tissue and the volume that can easily be extracted. It is well-documented that the AD-MSC
has potent immune modulatory properties due to either direct release of immuno-modulatory factors or indirect effects through other immune
cells. Significant anti-inflammatory effects of AD-MSC have been confirmed in many veterinary and human clinical studies.
In
order to develop a clinically relevant oncolytic platform, CAL1 virus was loaded into allogeneic AD-MSC cells to generate CLD-201 to produce a preclinical drug product,
which we intend to demonstrate through clinical trials is more resistant to humoral inactivation than naked virus, potentially
leading to higher antitumor activity.
We
believe our use of allogeneic adipose-derived mesenchymal stem cells loaded with CAL1 oncolytic virus in the design and execution of
our anticipated clinical trials differs from other clinical trials utilizing oncolytic viruses that are administered “naked”
intratumorally or systemically that face rapid elimination by the patient’s immune system.
First-in-human
preclinical study of vaccinia virus ACAM2000/CAL1 delivered by autologous adipose stromal vascular fraction (SVF) cells.
The
tolerability and toxicity of the ACAM2000 virus (equivalent to CAL1) was observed in a first-in-human clinical trial of vaccinia virus
delivered by autologous adipose stromal vascular fraction (SVF) cells, in patients with advanced solid tumors or acute myeloid leukemia
(AML).
In
preclinical studies, we observed ACAM2000 virus (aka ACAM1000 or CAL1) as a very potent oncolytic virus, able to infect and kill multiple
human cancer cell lines in vitro. However, we and others also observed that the human complement system could neutralize most of the
viral particles after intravenous deployment. Consequently, we suggested that the viral particles taken up by autologous SVF stem cells
may be protected from the patient’s immune system, thus allowing delivery of a greater amount of the loaded oncolytic virus to
the tumor sites. In addition, SVF contains stem cells exhibiting a natural tropism towards tumor sites, which could theoretically be
exploited to transport the viral payloads directly to the tumor sites. Therefore, a clinical study was designed utilizing autologous
SVF cells incubated with vaccinia virus (ACAM2000/SVF) in patients with advanced solid tumors or AML. This physician sponsored study
was designed and completed prior to recent court decisions holding that the use of autologous adipose SVF cells in these studies requires
an IND issued by the FDA.
The
tolerability and toxicity of ACAM2000/SVF administered to patients with advanced metastatic solid tumors or advanced AML observed in
this preclinical study support our intention to apply for an IND from the FDA and to conduct a Phase I clinical trial thereafter
using our CLD-201 product candidate that utilizes allogeneic adipose-derived mesenchymal stem cell (“AD-MSC”) line
VP-001 loaded with tumor selective “CAL1” oncolytic vaccinia virus strain having an identical sequence as ACAM2000. We do not intend to develop a product
candidate using autologous adipose SVF cells. However, two important aspects of this study will have clear clinical implications in
future IND enabled clinical trials: (i) this is the first-in-human clinical study to observe the tolerability and toxicity of a
TK-positive oncolytic vaccinia virus delivered by autologous SVF cells, and (ii) the administration of ACAM2000/SVF in severely
immunocompromised patients with advanced cancer appeared to be well tolerated. In addition, by combining ACAM2000 and SVF as a
delivery vehicle we observed evidence suggesting SVF cells may protect the virus from complement inactivation in the blood. No
significant treatment-associated toxicities were observed in any of the 26 patients who received IV, IP and IT injections of
ACAM2000 loaded onto freshly isolated SVF cells. Although not statistically significant due to small number of patients, several
patients experienced significant tumor size reduction, especially when the ACAM2000/SVF treatment was combined with checkpoint
inhibition. These early observations must be re-evaluated within a larger and more homogeneous cohort of patients to confirm the
feasibility of this treatment approach. The results of this study have been published in the Journal of Translational Medicine in
2019.
Because
clinical autologous approaches do not allow the development of off-the-shelf standardized product candidates for treatment of cancer,
we are focusing our development efforts on allogeneic therapies which we believe will allow the immediate treatment of many patients without
the need of extraction of fresh autologous adipose stem cells. Consequently,
we are developing allogeneic cell-based product candidates, where we believe the virus can be protected from humoral immunity, significantly
amplified, and potentiated inside the stem cells to minimize its clearance by the immune system.
Although
we have not yet received FDA marketing approval for any of our product candidates, we are advancing a pipeline of “off-the-shelf”
allogeneic cell product candidates in preclinical studies and clinical trials to determine whether our product candidates will: (i) protect
oncolytic viruses from complement inactivation and innate immune cell inactivation by the body’s immune system; (ii) support oncolytic
viral amplification in the allogeneic cells, and (iii) modify the TME to allow tumor cell targeting and viral amplification at the tumor
sites for an extended period of time.
As
described in the diagram above, our most advanced product candidates include the following.
CLD-101
product for high grade glioma (“HGG”) (which we sometimes refer to as NeuroNova 1 or “NNV1” program as
to the indication). CLD-101 is our product candidate utilizing our NeuroNovaTM Platform targeting and indication of
newly diagnosed HGG. Prior to our licensing agreement with Northwestern University, an open-label, investigator sponsored, Phase 1,
dose-escalation clinical trial for CLD-101 in patients with newly diagnosed high-grade gliomas was completed. This clinical trial
observed that CLD-101 was well tolerated. We plan to commence a Phase 1b/2 clinical trial in collaboration with Northwestern
University in the first half of 2024. The Phase 1b dose escalation lead in portion of this anticipated trial will explore the final
dosing regimen for CLD-101, including the feasibility of repeated dosing.
CLD-101
product for Recurrent HGG (which we sometimes refer to as NeuroNova 2 or “NNV2” program as to the indication). Our
partner City of Hope is conducting clinical studies on CLD-101 utilizing our NeuroNovaTM Platform for the indication
of recurrent HGG using the same allogeneic neural stem cell bank and oncolytic adenovirus being used in our clinical trials for
newly diagnosed HGG. City of Hope dosed the first patient in May 2023 in a Phase 1 clinical trial for this
indication.
CLD-201
product for Advanced Solid Tumors (TNBC, Melanoma, and Head and Neck) (which we sometimes refer to as SuperNova 1 or “SNV1”).
CLD-201 is our first internally developed preclinical product candidate utilizing our SuperNovaTM Platform targeting
the indication of Advanced Solid Tumors (triple-negative breast cancer (“TNBC”), metastatic / unresectable melanoma (IIB-IV),
head & neck squamous cell carcinoma (HNSCC), advanced soft tissue sarcoma and advanced basal cell carcinoma (BCC). Based on our pre-clinical
studies, we believe CLD-201 has therapeutic potential for the treatment of multiple solid tumors such as triple-negative breast cancer
(“TNBC”), metastatic / unresectable melanoma (IIB-IV), head & neck squamous cell carcinoma (HNSCC), advanced soft tissue
sarcoma and advanced basal cell carcinoma (BCC). We have held a pre-IND meeting with FDA to discuss the filing of our IND application
for the clinical development of CLD-201. We anticipate commencing a Phase 1 clinical trial for CLD-201 during the second half of 2024.
CLD-400
(RTNova) for certain lung cancer and Metastatic Solid Tumors, Our pre-clinical program involving enveloped oncolytic viruses is in
the discovery phase of development and builds upon our research of using cells to protect, potentiate and deliver virotherapies. Our
CLD-400 platform is derived from the research conducted in our prior pre-clinical CLD-202 program. The RTNova platform utilizes an engineered
vaccinia virus enveloped by a cell membrane, that is potentially capable of targeting lung cancer and advanced metastatic disease
due to its early remarkable ability to survive in the bloodstream. Metastatic solid tumors involve cancer cells that break away from
where they first formed (primary cancer) and travel through the blood or lymph system to form new tumors, known as metastatic tumors,
in other parts of the body. In preclinical models, RTNova has shown the early preclinical capability to target multiple distant and diverse
tumors and transform their microenvironments leading to their elimination. In addition, the program has shown potential synergistic effects
with other immunotherapies, including cell therapies, to attack and eliminate disseminated solid tumors.
In
addition to our pipeline product candidates described above, we are also engaged in discovery research for the following:
CLD-301
(AAA) for Multiple Indications. We are also currently engaged in early discovery research involving Adult Allogeneic Adipose-derived
(“AAA”) stem cells for various indications and therapies. These AAA stem cells are theoretically multipotent, differentiating
along the adipocyte, chondrocyte, myocyte, neuronal, and osteoblast lineages, and may have the ability to serve in other capacities,
such as providing hematopoietic support and gene transfer with potential applications for repair and regeneration of acute and chronically
damaged tissues. Pre-clinical studies involving toxicity and efficacy will be needed before an IND application may be filed with the
FDA.
Our
Strategy
Our
strategy is to pioneer next generation immunotherapies for the treatment of cancer by utilizing stem cell-based platforms or
enveloped oncolytic virotherapies for delivery and potentiation of oncolytic viruses as well as the use of allogeneic stem cells for
treatment of non-cancer indications. We intend to achieve this strategy by:
Our
Product Candidates
CLD-101
(NeuroNovaTM) for Newly Diagnosed High Grade Glioma (“HGG”).
CLD-101
is composed of the immortalized neural stem cell line HB1.F3.CD21 loaded with the engineered oncolytic adenovirus CRAd-S-pk7 (NSC- CRAd-S-pk7)
for the treatment of high-grade glioma (“HGG”). High-grade gliomas are the most common and lethal CNS tumors in adults.
Despite aggressive treatment regimens that comprise neurosurgical resection, radiotherapy, and chemotherapy, median survival time in
patients with newly diagnosed HGG ranges from 14 months to 21 months. The presence of aberrant chemo resistant and radioresistant glioma
stem cells within the tumor tissue contributes to relapse and poor survival outcomes, whereby the median survival time upon tumor recurrence
is typically nine to 11 months. As such, a targeted approach that selectively kills tumor cells and resistant glioma stem cells, without
disrupting the delicate neural architecture of the surrounding brain is necessary for effective treatment. Oncolytic adenoviral therapy
is a promising therapeutic approach in HGG owing to its direct viral oncolytic effects and its ability to elicit an anti-tumor immune
response. Oncolytic viral therapies have also been observed to be well tolerated in prior clinical trials. Nevertheless, delivery of
traditional oncolytic virus therapy has been a hurdle to use due to poor distribution and spread through the tumor mass after intratumoral
injection or their limited abilities to effectively cross the blood — brain barrier after systemic administration. No approvals
have been received to address HGG through either oncolytic or adenoviral therapy or oncolytic viral therapies.
Neural
stem cells (NSCs) are multipotent progenitor cells present in the developing and adult CNS. Preclinical experiments have shown their
inherent ability to cross the blood — brain barrier, distribute within the tumor bed, surround the tumor border, and migrate within
the brain parenchyma to target glioma cells, allowing NSCs delivered either locally or peripherally to be used to target therapeutic
molecules across the blood — brain barrier.
Northwestern
University completed an open label, Phase 1, single ascending dose clinical trial that followed a 3 + 3 design. It was primarily done
at the Northwestern Memorial Hospital (Chicago, IL, USA), with a secondary site at the City of Hope National Medical Center (Duarte,
CA, USA). Between April 24, 2017, and November 13, 2019, 12 patients with newly diagnosed high-grade glioma were enrolled and confirmed
through clinical and radiological evaluation. Pathological confirmation of HGG was made at the time of resection on frozen section by
a neuropathologist before the CLD-101 injection. Diagnoses made through frozen section analysis were later confirmed through permanent
section analysis. In the trial design, patients would receive standard chemoradiotherapy, and their tumors had to be accessible for CLD-101
injection. Eligible patients were aged 18 years or older and had a Karnofsky performance scale score of 70 or more. To be included, participants
also had to have adequate organ and bone marrow function within 28 days before registration, as defined by an aspartate transaminase
concentration less than three times the upper limit of normal, serum creatinine less than 2 mg/dL, platelets more than 100 000 per mm3,
and white blood cells more than 3000 per mm3. Further baseline evaluations comprised panels for hematology, coagulation, and serum
chemistry, a urinalysis with microscopy, an ECG, replication competent retrovirus testing, and viral shedding. Eligible participants
were also able to undergo a brain MRI scan. Patients were excluded if the tumor invaded the ventricular system, received previous radiotherapy
or other experimental therapy, or took immunosuppressive medications (other than corticosteroids) within 28 days of the surgical procedure.
Patients with prior or ongoing liver disease (cirrhosis, or active hepatitis B or C virus infection) or known HIV infection were also
excluded.
City
of Hope National Medical Center provided the NSCs for the clinical trial. CRAd-S-pk7 was produced and loaded into NSCs at the University
of Alabama at Birmingham Vector Production Facility (Birmingham, AL, USA), in accordance with current good manufacturing practice for
phase 1 investigational drugs. Regulatory approvals were obtained from the Center for Biologics Evaluation and Research of the FDA and
the local institutional research ethics committees (FDA IND 17365). The study was done in accordance with the Declaration of Helsinki
and Good Clinical Practice guidelines. This trial was done in compliance with the Data Safety Monitoring Plan of the Robert H Lurie Comprehensive
Cancer Center of Northwestern University (Chicago, IL, USA). A data safety monitoring board (DSMB) was instituted to review any complications
arising from the proposed therapy before the enrolment of new patients. Additionally, the study abided by the safety reporting regulations,
as set forth in the Code of Federal Regulations. All protocol amendments were approved by the trial sponsor and the DSMB. All participants
provided written, informed consent.
Histopathological
evaluation identified 11 (92%) of 12 patients with HGG and one (8%) with anaplastic astrocytoma. Two (17%) of 12 tumors harbored an IDH1
mutation. The MGMT gene promoter was methylated in three (25%) of 12 patients, including the two IDH1-mutated tumors.
One (17%) of six patients taking the third dose (1·50 × 108 NSCs loading 1·875 × 1011
viral particles) developed a grade 2 subdural fluid collection 22 days after surgery and product injection that was deemed possibly related
to CLD-101 administration. Another patient (17%) of the six taking the third dose developed meningitis (grade 3) due to the inadvertent
injection of CLD-101 into the ventricle. Cerebrospinal fluid trickled into the open ventricle, collection and subsequent analysis of
which was consistent with viral meningitis. After hospitalization, the patient fully recovered. Subsequently, three additional patients
were enrolled at the same dose without major toxicity and complications. This was the highest prespecified dose, a formal dose-limiting
toxicity was not observed, and 1·50 × 108 NSCs loading 1·875 × 1011 viral particles
was recommended for a Phase 2 clinical trial.
During
the Phase 1 clinical trial, most treatment-emergent adverse events were not related to CLD-101 and all were commonly observed
toxicities of subsequent chemotherapy and radiotherapy. The most common grade 3 adverse events were decreased lymphocyte count (5 of
12 patients, or 42%), hypertension (5 of 12 patients, or 42%), and muscle weakness (4 of 12 patients, or 33%). Five severe adverse
events were reported, including a thromboembolic event, encephalopathy, cerebral edema, muscle weakness, and meningitis. Only viral
meningitis was probably related to CLD-101 due to the inadvertent injection of CLD-101 into the lateral ventricle. All patients recovered fully from their adverse events, and there were no dropouts or
deaths due to an adverse event.
After
resection, residual evaluable tumor was present in nine (75%) of 12 patients. Assessment of best response showed that one (8%) of 12
patients had a partial response, one (8%) of 12 patients had pseudo-progression, and ten (83%) of 12 patients had stable disease. At
database lock, ten (83%) of 12 patients had progressed, and nine (75%) of 12 patients had died. The median progression-free survival
was 9·1 months. The median overall survival was 18·4 months. In the subset of patients with glioma containing an unmethylated
MGMT promoter, median progression-free survival was 8·8 months, and median overall survival was 18·0 months. Of
the three (25%) of 12 patients with tumors with methylated MGMT promoters, two patients were censored at last follow-up, and the
one uncensored patient had progression-free survival of 24·2 months and overall survival of 36·4 months.
MRI,
before and after the treatment regimen, showed a decrease in contrast enhancement and peritumoral hyperintensity around the resection
cavity after therapy. Patients had a reduction in quality of life reported until the cessation of radiotherapy, after which they returned
to near baseline levels. Post-hoc exploratory studies allowed the assessment of the immune response to CLD-101. Flow cytometric analysis
revealed a spike in neutrophil and monocyte ratios at day 3 in doses 2 and 3. This peak diminished by day 14, when the number of lymphocytes
tended to increase in doses 2 and 3. A direct comparison of the immune response between day 3 and day 14 showed a significant decrease
in neutrophil and monocyte ratios at dose 2 and a significant increase in absolute lymphocyte count in both dose levels 2 and 3. Analysis
of lymphocytic subsets showed an increase in CD8+ T cells in dose 3 at day 14. Pro-inflammatory cytokines — granzyme B, interferon-gamma,
and tumor necrosis factor — were expressed regardless of tumor tissue depth. Additionally, CD8 and CD69 expression increased in
sampled tumors after CLD-101 treatment. Anti-Ad5 neutralizing antibodies were detected in low titers 14 days after treatment at the first
dose and within a week at higher doses. Analysis of circulating cytokine profiles in patients’ serum showed an initial decrease
in concentrations of IL8, IL1Ra, IL12p70, IL13, and CCL22 7 days after surgery and product injection. This decrease was followed by an
increase in concentrations up until day 14 for IL8, IL1Ra, IL6, IL13, and IL16, after which concentrations of these cytokines plateaued
or decreased. Other cytokine concentrations, such as IL12p70, CXCL10, CCL17, and CCL22, continued to increase up to day 28. ELISpot assay
showed antiviral immunity through the detection of hexon spots, which increased as the dose of CLD-101 increased; differences in hexon
spots between doses could be visualized 7 days and 14 days after surgery and CLD-101 injection. 1 year later, antitumoral immunity could
be detected in one (8%) of 12 patients that received CLD-101.
Viral
traces of E1A and hexon and v-myc DNA, which is used to immortalize the NSCs, could not be detected at the site of injection or
in other collected autopsy samples. In eight (67%) of 12 patients who underwent repeat surgical resections or autopsy, we sampled and
compared tumor tissues before and after CLD-101 administration. Because the survivin promoter is incorporated within the virus and syndecan-1
is targeted by the viral capsid, tumor-specific marker staining of survivin and syndecan-1 showed a decrease in expression after CLD-101
treatment. Immunohistochemical (multiplex) staining showed an increase in CD8+ T cells, specifically at the tumor site, after CLD-101
injection. These findings were seen across samples from three (100%) of three patients whose tissues were selected for analysis, because
more CD8+ T cells were seen at the recurred glioma lesion post CLD-101 injection. Quantitative analysis of staining results showed increased
numbers of CD8+ T cells and higher expression of PD-1 after CLD-101 injection. Numbers of CD63+ cells and SOX2+ cells that express survivin
decreased after treatment.
The
trial’s primary endpoint was met as the addition of CLD-101 to resection and chemoradiotherapy was shown to be well tolerated and
non-toxic. No dose-limiting toxicity was noted, and the highest preassigned dose was the maximum tolerated dose. Only one severe adverse
event, viral meningitis (grade 3), in one patient was deemed to be probably related to the treatment. This adverse event was caused by
unintended injection of the regimen into the lateral ventricle. The patient was adequately managed and recovered fully in the following
days.
Immune
studies suggested that CLD-101 initiates an immune response in patients with high-grade gliomas. Early immune responses showed an increase
in inflammatory myeloid recruitment in high doses of CLD-101, followed by an increase in the number of circulating lymphocytes, especially
CD8+ T cells, two weeks after surgery in dose 3. The CD8+ T cells in the tumor microenvironment (TME) were shown to be active and cytotoxic
immune cells, owing to the increase in CD8+:CD4+ ratios, and the expression of the early activation marker CD69, which indicates recent
activation and tissue infiltration. This inflammatory presentation conforms to the typified models of immune reactivity in humans and
to other oncolytic adenovirus responses. These changes were not observed in the cohort that received the lowest dose of CLD-101, which
might suggest that higher doses promote systemic immunity and might reflect better antitumoral immune responses. Moreover, the cytokine
profile described in response to CLD-101 could help in following the immune-mediated response to therapy if confirmed in future, higher
phase trials.
Limitations
of the study include the fact that it is a single-arm, open-label study with no comparator group. Statistical evaluation of a Phase 1
trial has limitations in terms of patient expectations regarding activity. The observed survival benefit in comparison to historical
controls could be due to early initiation of radiotherapy and temozolomide, more intensive care of the patients on trial, or institution-specific
performance. One (8%) of 12 patients, with a right parietal-temporal tumor, received a temporal lobectomy, which is reported to improve
survival outcomes. The validation of the survival outcomes and immune and histopathological findings, will require a phase 2/3 study
with a larger cohort and a cell-labelling component. The clinical trial results were published in The Lancet Oncology on June 29, 2021.
CLD-101
(NeuroNovaTM) for Recurrent HGG.
Our partner City
of Hope is conducting clinical studies on CLD-101 utilizing our NeuroNovaTM Platform for the indication of recurring
HGG using the same allogeneic neural stem cell bank and oncolytic adenovirus being used in our clinical trials for newly diagnosed
HGG discussed above. City of Hope dosed the first patient in May 2023 in a Phase 1 clinical trial with CLD-101 for
recurring HGG. This program is supported by a grant from CIRM awarded to the City of Hope.
CLD-201
(SuperNovaTM) for Advanced Solid Tumors (TNBC, Melanoma, and Head and Neck).
CLD-201
is composed of CAL1 vaccinia virus (AKA ACAM1000 or ACAM2000) loaded into the allogeneic AD-MSC cell line VP-001 and is our first internally
developed product candidate utilizing our SuperNovaTM Platform targeting multiple Advanced Solid
Tumors (TNBC, Melanoma, and Head and Neck). Based on our pre-clinical studies, we believe CLD-201 has therapeutic potential for the treatment
of multiple solid tumors such as, head and neck cancer, triple-negative breast cancer and melanoma. We have held a pre-IND meeting with
FDA to discuss the filing of our IND application for the clinical development of CLD-201. We anticipate commencing a Phase 1 clinical
trial for CLD-201 during the second half of 2024.
In
preclinical in vitro studies, we observed that the naked CAL1 virus was quickly inactivated in the presence of human serum, while
CLD-201 retained the ability to kill tumor cells. In vivo studies demonstrated the ability of CLD-201 to induce direct tumor oncolysis
and to modify the tumor microenvironment (TME), converting immunologically invisible or “cold” tumors into immunologically
visible or “hot” tumors by reducing immunosuppressive populations such as Tregs (regulatory T cells) and simultaneously increasing
tumor infiltration with CD4 and CD8 effector T cells, thus generating anti-tumor immunity in both the treated lesion and untreated distant
tumors. Importantly, product candidate CLD-201 contains not only stem cells loaded with viral particles, but also immune modulatory cytokines
produced by the stem cells as well as virally encoded proteins. Therefore, the TME may be modified immediately upon intra-tumoral injection
to support viral amplification and oncolysis.
We
anticipate our proposed Phase 1/2 trial will be an open label dose escalation safety, PK, and PD study of CLD-201 in adult patients with
advanced metastatic solid tumors who have relapsed from or are refractory to standard therapy. In the Phase 1 dose escalation portion
of the anticipated study, the toxicity and tolerability of CLD-201 will be determined. We also anticipate that the dose escalation portion
of the Phase 1 trial will determine the recommended Phase 2 dose of CLD-201. The dose escalation cohorts are intended to be composed
of patients with any of the selected three indications (metastatic/unresectable melanoma, TNBC and head & neck squamous cell head
& neck carcinoma). In the Phase 1 dose expansion portion of this study, we anticipate 30 patients (metastatic/unresectable melanoma
(N=10), TNBC (N =10) and squamous cell head & neck carcinoma (N=10) will be enrolled at the selected dose to assess clinical objective
response rate (ORR)). In the Phase 2 portion of this study, we anticipate 50 patients with the best responding indication determined
in the study will be treated with the CLD-201 dose identified in Phase 1 of this trial.
CLD-301
(AAA) for Multiple Indications.
We
are also currently engaged in early discovery research involving Adult Allogeneic Adipose-derived (“AAA”) stem cells for
various indications and therapies. These AAA stem cells are theoretically multipotent, differentiating along the adipocyte, chondrocyte,
myocyte, neuronal, and osteoblast lineages, and may have the ability to serve in other capacities, such as providing hematopoietic support
and gene transfer with potential applications for repair and regeneration of acute and chronically damaged tissues. Pre-clinical studies
involving toxicity and efficacy will be needed before an IND application may be filed with the FDA.
We own eight allogeneic AAA stem
cell banks at different stages of development. A new manufacturing protocol developed internally offers the potential to generate millions
(1015) of doses of stem cells. Strategic manufacturing campaigns have the potential to maximize the use of one single donor
for multiple indications, clinical development programs and commercialization products. One of our selected cell banks, VP-001, used to
develop CLD-201, is also under clinical development in partnership with PSC, for a Covid-19 therapeutic candidate known as COVI-MSC.
During
2024, we intend to pursue collaborations and out-license opportunities for continued development of our AAA cell bank, VP-001, and our
other AAA cell banks for non-cancer indications.
CLD-400
(RTNova) for certain Lung Cancer and Metastatic Solid Tumors.
CLD-400
(RTNova) is our preclinical program involving enveloped oncolytic viruses, is in the discovery phase of development and builds upon our
research of using cells to protect, potentiate and deliver virotherapies. Our CLD-400 program is derived from the research conducted
in our prior pre-clinical CLD-202 program. The RTNova platform utilizes an engineered vaccinia virus enveloped by a cell membrane, that
is potentially capable of targeting lung cancer and advanced metastatic disease due to its early remarkable ability to survive in
the bloodstream. Metastatic solid tumors involve cancer cells that break away from where they first formed (primary cancer) and travel
through the blood or lymph system to form new tumors, known as metastatic tumors, in other parts of the body.
In
preclinical models, RTNova has shown the early preclinical capability to target multiple distant and diverse tumors and transform their
microenvironments leading to their elimination. In addition, the program has shown potential synergistic effects with other immunotherapies,
including cell therapies, to attack and eliminate disseminated solid tumors.
Competition
The
development and commercialization of new product candidates is highly competitive. We face competition from major pharmaceutical, specialty
pharmaceutical and biotechnology companies among others with respect to our NeuroNovaTM, SuperNovaTM
and RTNova product candidates and will face similar competition with respect to any product candidates that we may seek to develop or
commercialize in the future. We compete in pharmaceutical, biotechnology and other related markets that develop immune-oncology therapies
for the treatment of cancer. There are other companies working to develop viral immunotherapies for the treatment of cancer including
divisions of large pharmaceutical and biotechnology companies of various sizes. The large pharmaceutical and biotechnology companies
that have commercialized and/or are developing immuno-oncology treatments for cancer include AstraZeneca, Bristol-Myers Squibb, Gilead
Sciences, Inc., Merck & Co., Novartis, Pfizer and Genentech, Inc.
Some
of the products and therapies developed by our competitors are based on scientific approaches that are the same as or similar to our
approach, including with respect to the use of viral immunotherapy with oncolytic viruses. Other competitive products and therapies are
based on entirely different approaches. We are aware that Oncorus, Inc., Replimune Group, Inc., Amgen Inc., ImmVira Co., Ltd., IconOVir
Bio, Inc., Candel Therapeutics, Inc. and FerGene, Inc., among others, are developing viral immunotherapies that may have utility for
the treatment of indications that we are targeting. Potential competitors also include academic institutions, government agencies and
other public and private research organizations that conduct research, seek patent protection and establish collaborative arrangements
for research, development, manufacturing and commercialization.
Many
of the companies we compete against or may compete against in the future have significantly greater financial resources and expertise
in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing
approved drugs than we do. Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in concentration of
even more resources among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors,
particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting
and retaining qualified scientific and management personnel, in establishing clinical trial sites and enrolling subjects for our clinical
trials and in acquiring technologies complementary to, or necessary for, our programs.
We
could see a reduction or elimination of our commercial opportunity if our competitors develop and commercialize products that are safer,
more effective, have fewer or less severe side effects, or are more convenient or are less expensive than any products that we or our
collaborators may develop. Our competitors also may obtain FDA or other regulatory approval for their products 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 our product candidates, if approved, are likely to be their efficacy,
safety, convenience and price, if required, the level of biosimilar or generic competition and the availability of reimbursement from