10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2021

Commission File Number 001-39782

4D Molecular Therapeutics, Inc.

(Exact name of Registrant as specified in its Charter)

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (510) 505-2680

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

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

Common Stock, par value $0.0001 per share FDMT 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, 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. ☐

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 common equity held by non-affiliates of the Registrant, based on the closing price of the shares of common stock on The Nasdaq Global Select Market on June 30, 2021 was $444,521,977

The number of shares of Registrant’s Common Stock outstanding as of March 28, 2022 was 32,237,496

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement relating to the 2022 Annual Meeting of Stockholders are incorporated herein by reference in Part III of this Annual Report on Form 10-K to the extent stated herein. The proxy statement will be filed with the Securities and Exchange Commission within 120 days of the registrant’s fiscal year ended December 31, 2021.

Table of Contents

Page

PART I

Item 1. Business 1

Item 1A. Risk Factors 45

Item 1B. Unresolved Staff Comments 115

Item 2. Properties 115

Item 3. Legal Proceedings 115

Item 4. Mine Safety Disclosures 115

PART II

Item 6. [Reserved] 117

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 130

Item 8. Financial Statements and Supplementary Data 131

Item 9A. Controls and Procedures 131

Item 9B. Other Information 132

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 132

PART III

Item 10. Directors, Executive Officers and Corporate Governance 133

Item 11. Executive Compensation 133

Item 14. Principal Accounting Fees and Services 133

PART IV

Item 15. Exhibits, Financial Statement Schedules 134

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements concerning our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our business operations and financial performance and condition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “potential,” “positioned,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

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the success, cost and timing of our development activities, preclinical studies and clinical trials, including our clinical trials for 4D-310, 4D-150, 4D-125, 4D-110 and 4D-710

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the timing of IND-enabling studies and results from such studies;

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the timing and success of lead optimization for our product candidates in lead optimization;

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the translation of our preclinical results and data into future clinical trials in humans;

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the timing of any manufacturing runs for materials to be used in patient trials;

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the number, size and design of our planned clinical trials, and what regulatory authorities may require to obtain marketing approval

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the potential effects of the COVID-19 pandemic on our preclinical and clinical programs and business;

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the timing or likelihood of regulatory filings and approvals;

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

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our ability to obtain funding for our operations, including funding necessary to develop and commercialize our product candidates;

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the rate and degree of market acceptance of our product candidates;

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the success of competing products or platform technologies that are or may become available;

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our plans and ability to establish sales, marketing and distribution infrastructure to commercialize any product candidates for which we obtain approval;

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future agreements with third parties in connection with the commercialization of our product candidates;

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the size and growth potential of the markets for our product candidates, if approved for commercial use, and our ability to serve those markets;

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existing regulations and regulatory developments in the United States and foreign countries;

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the expected potential benefits of strategic collaboration agreements, including our relationships with uniQure and Cystic Fibrosis Foundation ("CFF"), and our ability to attract collaborators with development, regulatory and commercialization expertise;

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the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology;

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potential claims relating to our intellectual property and third-party intellectual property;

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our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

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the pricing and reimbursement of our product candidates, if approved;

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our ability to attract and retain key managerial, scientific and medical personnel;

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the accuracy of our estimates regarding expenses, capital requirements and needs for additional financing;

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our financial performance; and

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our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act.

These forward-looking statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and management’s beliefs and assumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Annual Report on Form 10-K may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Annual Report on Form 10-K. Potential investors are urged to consider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only as of the date of this Annual Report on Form 10-K. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the SEC after the date of this Annual Report on Form 10-K.

iii

PART I

Item 1. Business.

Overview

We are a clinical-stage gene therapy company pioneering the development of product candidates using our targeted and evolved AAV vectors. We seek to unlock the full potential of gene therapy using our platform, Therapeutic Vector Evolution, which combines the power of directed evolution with our approximately one billion synthetic capsid sequences to invent evolved vectors for use in targeted gene therapy products. We believe key features of our targeted and evolved vectors will help us to potentially create targeted gene therapy product candidates with improved therapeutic profiles, and to address a broad range of both rare and large market diseases, including those that other gene therapies are unable to address.

We have built a deep portfolio of gene therapy product candidates, with five product candidates in clinical trials: 4D-125 for the treatment of X-linked retinitis pigmentosa ("XLRP"), 4D-150 for the treatment of wet age-related macular degeneration ("wet AMD"), 4D-110 for the treatment of choroideremia, 4D-310 for the treatment of Fabry disease, and 4D-710 for the treatment of cystic fibrosis lung disease.

We believe we are positioned to create, develop, manufacture and, if approved, effectively commercialize targeted gene therapies that could transform the lives of patients suffering from debilitating diseases.

Our Product Candidate Pipeline

We are developing a diverse pipeline of product candidates for both rare and large market diseases, including patient populations that other gene therapies are unable to address. Our initial product candidates are focused on the following therapeutic areas: ophthalmology, cardiology and pulmonology. Each of our product candidates leverages a targeted and evolved vector we invented through our Therapeutic Vector Evolution platform. Below is a summary of our wholly-owned product candidate pipeline:

Ophthalmology Pipeline: Intravitreal Product Candidates

With our ophthalmology product strategy we plan to treat diseases that affect tissues throughout the retina. We are developing product candidates to treat tissues throughout the retina. Our retina product candidates, 4D-125, 4D-150 and 4D-110 utilize our targeted and evolved AAV vector, R100, which was invented for routine intravitreal injection, leading to transgene expression across the entire surface area of the retina and in the major cell layers of the retina.

Cardiology Pipeline: Intravenous Product Candidates

With our cardiology product strategy, we plan to treat patient populations in both primary cardiomyopathies, that involve the heart only, as well as cardiomyopathies that are secondary to systemic diseases, such as lysosomal storage diseases. Our cardiology product candidate, 4D-310, utilizes our targeted and evolved AAV vector, C102, which was invented for routine low dose intravenous administration and delivery to the heart, leading to transgene expression in heart muscle cells throughout the organ. For lysosomal storage diseases involving the heart and other organs, including Fabry disease, our product candidates are designed for transgene expression both within the heart and in other targeted tissues.

Pulmonology Pipeline: Aerosol Delivery Product Candidates

With our pulmonology product strategy, we plan to treat diseases that affect the lungs. Our pulmonology product candidate, 4D-710, utilizes our targeted and evolved vector, A101, which was invented for aerosol delivery to all major regions within the lung, including airways and alveoli, and penetration of the mucus barrier for transduction of lung airway cells, overcoming potential barriers such as pre-existing AAV antibodies and other inhibitory proteins within the mucus barrier. A101 was designed to enable efficient airway and alveolar cell transduction and transgene expression.

The 4DMT Therapeutic Vector Evolution Platform: Evolved Vectors for Targeted Gene Therapy

Gene therapy holds tremendous promise as a transformative therapeutic class. However, the majority of gene therapies have encountered limitations such as inflammation and toxicity, high dose requirements, limited efficacy and neutralization by pre-existing antibodies, due in part to their utilization of conventional AAV vectors that are naturally occurring and non-targeted. Through our Therapeutic Vector Evolution Platform we apply the principles of directed evolution to invent targeted and evolved vectors for the delivery of genes to specific tissue types to treat diseases involving those same target tissue(s). Our product candidates are designed and engineered to utilize our targeted and evolved vectors to potentially address the limitations encountered with gene therapies utilizing conventional AAV vectors.

The first step of directed evolution involves the generation of massively diverse libraries of biological variants. Leveraging a wide range of molecular biology techniques, we have developed a collection of 40 distinct libraries that are comprised of approximately one billion synthetic capsid sequences. We next define a Target Vector Profile that identifies the optimal vector features for the specific tissue type(s) and related set of diseases we seek to target, with the goal of overcoming limitations encountered by conventional AAVs. We then deploy Therapeutic Vector Evolution with our capsid libraries in non-human primates ("NHPs") and use competitive selection to identify targeted and evolved vectors from our libraries that demonstrate the strongest match to the Target Vector Profile. Subsequently, we characterize and evaluate a lead targeted and evolved vector for delivery and transgene expression through extensive studies in NHPs and human cell and organotypic tissue assays.

We believe our proprietary vectors will allow us to overcome known limitations of conventional AAV vectors, and to potentially address a broad range of diseases that affect both rare and large patient populations that cannot be addressed with conventional vectors.

Our proprietary Therapeutic Vector Evolution Platform is based on the principles of directed evolution. Directed evolution is a high-throughput platform approach that harnesses the power of evolution in order to create biologics with new and desirable characteristics.

The first step in directed evolution is to generate massive genetic diversity. Starting with the genomes of multiple naturally occurring AAV variants, and their ancestral predecessors, we employ numerous molecular biology techniques to create our 40 distinct libraries comprising approximately one billion synthetic capsid sequences.

Starting with our 40 distinct libraries comprising approximately one billion synthetic capsid sequences, we conduct Therapeutic Vector Evolution, including competitive selection, to identify targeted and evolved vectors that fit a Target Vector Profile. The illustration below highlights the Target Vector Profile design and subsequent selection process whereby competitive pressure is applied over a varying number of selection rounds for each program. Capsids with the best fitness for the Target Vector Profile are enriched at each round and are designated lead vectors.

Our co-founder Dr. David Schaffer, pioneered the use of directed evolution to create improved AAV capsids for use as gene therapy vectors at U.C. Berkeley over 20 years ago. Since the company's founding in 2013, we have developed and industrialized our Therapeutic Vector Evolution Platform to invent targeted and evolved vectors for use in human therapeutic products. In addition to the foundational libraries we in-licensed from U.C. Berkeley, we have created over 30 new libraries, which comprise approximately one billion proprietary synthetic capsid sequences. In addition, we have developed significant experience in performing Therapeutic Vector Evolution programs in NHPs, with over 14 capsid selections completed to date. We believe this will help us to develop product candidates to address a broad swath of diseases in rare and large patient populations, including those other gene therapies cannot address.

Diverse Libraries of Synthetic Capsid Sequences

Each library results from the application of a different genetic diversification methodology, such as variable loop mutagenesis, random peptide insertion, random point mutagenesis, DNA shuffling and ancestral reconstruction, and is also defined by its starting material (AAV capsid gene sequences). We also apply bioinformatics, emerging technologies, and experience and know-how resulting from previous discovery programs to continually improve and expand our libraries and improve our ability to select customized targeted and evolved vectors.

We believe the size and diversity of our proprietary synthetic capsid libraries represent a differentiating competitive advantage for us in the field of gene therapy.

The Target Vector Profile Followed by Competitive Vector Selection

We employ a rigorous approach to inventing targeted and evolved vectors based on what we consider an optimal vector and product profile, which we term the Target Vector Profile. For any set of target diseases that affect the same tissue(s), this profile includes any combination of the following: the optimal route of administration for targeting the specific tissue(s), the optimal dose range, the desired distribution of vector transduction within the target organs, overall biodistribution and/or antibody resistance.

We use our Therapeutic Vector Evolution Platform to select the “fittest” targeted and evolved capsid that best matches our Target Vector Profile. We achieve this through serial rounds of “selection”, or discovery, with each round of selection filtering down to fewer and fewer synthetic capsids from the original library. This funneling process is achieved by applying selective pressures—forcing competition—among all synthetic capsid variants in the library to achieve delivery to the target cells as defined in the Target Vector Profile. Each round is performed in a primate in vivo, sometimes in the presence of human antibodies.

By the end of a typical Therapeutic Vector Evolution process, we will have identified approximately two to four targeted and evolved vectors, or hits, based on their frequency in the final pool of synthetic capsid sequences, in addition to numerous sequences present at lower frequencies. We believe this deliberate approach to selection in vivo in NHPs and in human tissues should lead to identification of targeted and evolved vectors with a higher likelihood of therapeutic benefit in humans.

Vector Invention Results to Date

We have completed unique vector selection programs or “selection processes” for specific proprietary synthetic capsids with specific Target Vector Profiles. Across our clinical development and discovery portfolio, we have utilized four different routes of administration: intravenous, intravitreal, aerosol, and intrathecal administrations. We have completed discovery programs targeting a diverse array of tissue types including various retinal cell types, heart and skeletal muscle tissues, different lung cell types, liver, brain, dorsal root ganglia, and synovial joints, resulting in over 300 unique targeted and evolved vectors.

Characterization of Novel Vector Variant “Hits” and “Leads”

Vector hits are typically characterized by three major criteria: manufacturing, human cell and human organotypic model transduction, and delivery to tissues in NHPs by the designated route of administration. Vector hits may also be evaluated for transduction in the presence of human antibodies. In order to perform characterization studies, vectors are armed with marker gene payloads such as enhanced green fluorescent protein (“EGFP”). After these hits have been evaluated, a lead vector is selected.

Directed Evolution-Based Promoter and Transgene Discovery Platforms

To complement our Therapeutic Vector Evolution Platform and modular development approach, we are generating next-generation optimized promoter elements and transgenes using a combination of directed evolution and proprietary algorithms.

Currently available promoters may lack sufficient strength of expression and selectivity for clinical benefit of AAV gene therapies. In addition, for some AAV gene therapy products a smaller promoter region may be essential for the gene payload to fit in the AAV. Therefore, we believe there is a need for better promoters for many AAV products to enable or enhance their therapeutic benefit. We generate Target Promoter Profiles for any given product and disease target. This promoter profile includes target cell specificity and strength in order to maximize tolerability and/or biologic activity, as well as to account for any necessary size constraints. Our libraries of novel and diverse synthetic promoters have been engineered and currently comprise approximately ten million unique sequences. Our discovery platform identifies the best promoters within the libraries for a specific Target Promoter Profile.

In addition to our synthetic promoters, we are developing next-generation optimized transgenes. Our discovery platform uses a high-throughput approach, harnessing both directed evolution and rational design algorithms, to identify novel transgenes that express therapeutic proteins. For example, we have developed transgenes to express RNAi in target cells of interest for treatment of disease. These transgene-expressed RNAi molecules, or ddRNAi, are anchored by a microRNA backbone that not only enhances stability and limits off-target effects, but also facilitates high expression within target cells and thereby may increase efficacy. Our technology allows us to knock down disease-causing transcripts, combining a design for a high degree of selectivity with the goal of long-term expression afforded by AAV-based gene therapy.

Our Product Candidate Pipeline

Ophthalmology Therapeutic Area

Introduction

We are developing product candidates to treat severe ophthalmologic diseases. Our targeted and evolved vector, R100, is used in all three of our ophthalmology clinical stage product candidates and was invented for routine intravitreal injection, leading to transgene expression across the entire surface area of the retina, and in the major cell layers of the retina. We believe that the ability to use the same novel vector in all three product candidates will help inform the clinical development of subsequent product candidates using the same vector.

4D-125 for X-Linked Retinitis Pigmentosa (“XLRP”)

Disease Background, Unmet Medical Need and Target Patient Population

XLRP is a rare inherited X-linked recessive genetic disorder that causes progressive vision loss and blindness. There are currently no approved therapies for XLRP. Seventy percent of cases are caused by mutations in the retinitis pigmentosa GTPase regulator (“RPGR”) gene. The estimated worldwide prevalence of XLRP due to RPGR variants is approximately one in 25,600 people, which represents approximately 24,000 patients in the United States, and France, Germany, Italy, Spain and the United Kingdom (together, EU-5). It is characterized by dysfunction and degeneration of photoreceptors in the retina. Loss of RPGR function in retinal cells causes the progressive loss of rod and cone photoreceptors, leading to the progressive loss of vision. Symptoms of XLRP are initially night blindness, followed by loss of peripheral visual field, decreasing visual acuity and eventually blindness. While males are usually the most affected, approximately 25% of heterozygous females experience loss of vision.

Our Solution

We are developing 4D-125 for the treatment of patients with XLRP with RPGR mutations. 4D-125 is designed to benefit patients at all stages of XLRP, including early stage patients whose entire viable retinas are not adequately treated by subretinal surgery. This product candidate is comprised of R100 and a codon-optimized RPGR transgene engineered for expression within human photoreceptors. In NHP models, we have observed widespread transduction and transgene expression across the entire retinal surface. We believe that 4D-125 has the potential to successfully treat XLRP patients at the earliest stages of their disease progression and ideally, slow or prevent progression and retain vision.

Competition and Differentiation: AAV Gene Therapy for XLRP

Several companies are developing subretinal AAV gene therapies for patients with XLRP. In Phase 1 and 2 trials, investigators have reported improvements in visual field function within the localized retina area receiving the treatment bleb in a subset of patients. These AAV gene therapies require invasive subretinal surgery, which has been associated with subretinal surgery-related adverse events. In addition, subretinal surgery results in transduction and direct treatment of only a small fraction of the retina and is, therefore, limited to patients with more advanced disease with a small remaining area of viable retinal cells.

We believe 4D-125 has the potential to be differentiated from other AAV gene therapies in clinical development, to our knowledge, on the basis of four features:

Safe and routine intravitreal route of administration: Product candidates that utilize conventional AAV vectors such as AAV2, must be administered by subretinal surgery for XLRP. Unlike those product candidates, R100, which is included in our product candidate 4D-125, was specifically invented for intravitreal injection. This easier and widely used route of administration may result in faster clinical trial enrollment and better efficacy.

Treatment of the entire retinal surface: Unlike conventional AAV vectors administered by subretinal surgery, which treat only a small fraction of the retinal surface, 4D-125 can be used to treat the entire retinal surface following intravitreal injection, potentially broadening its therapeutic applicability.

Feasibility of treating early stage patients: We believe it will be feasible to safely treat early stage patients before they start to lose their retinal function. 4D-125 is designed to treat the entire surface of the retina, including the periphery where degenerative diseases like XLRP start. In addition, intravitreal injection is recognized as a safe, simple and routinely used method of administering therapeutics.

Preclinical Animal Model Pharmacology and Toxicology Studies

We completed a single dose IND-enabling toxicology and biodistribution study in 30 NHPs with 4D-125. 4D-125 was administered at doses of 1E11 vg/eye or 1E12 vg/eye by intravitreal injection. Animals were sacrificed at three weeks, three months or six months. No meaningful toxicities were reported anywhere in the body, including specifically within the retina. Mild, transient uveitis was observed, but no chronic inflammation was reported; all animals were under systemic immunosuppression during the study. We detected vector genomes and XLRP transgene RNA expression in all treated retinas at both dose levels; the genome and RNA levels were higher in the high dose animals.

In an in vitro model of the disease, XLRP patient photoreceptors were derived from XLRP-diseased white blood cells that had been reprogrammed into induced pluripotent stem cells. Diseased photoreceptors were transduced with 4D-125 and protein lysates were harvested 30 days post-transduction. 4D-125 transduced cells expressed significantly more transgene product (hRPGRorf15) than control cells. Moreover, this expressed protein was shown to be active as measured by glutamylation (GT335).

Clinical Development: Phase 1/2 Clinical Trial

4D-125 is currently being evaluated in a first-in-human, on-going Phase 1/2 dose escalation and dose expansion clinical trial. The primary objectives of this trial are to evaluate the safety and maximum tolerated dose of 4D-125. Secondary endpoints include assessments of biologic activity, including both visual field function and anatomical endpoints.

We reported initial clinical data on this program in October 2021. As of the data cutoff date of September 1, 2021, eight patients with clinically advanced XLRP due to RPGR gene mutation had been treated. A standard 3+3 dose escalation was used. Patients were enrolled in one of three dose cohorts: dose-escalation cohort 1 (3E11 vg/eye; n=3), dose-escalation cohort 2 (1E12 vg/eye n=3) and the dose expansion cohort (1E12vg/eye; n=2). Patients enrolled in the dose escalation cohorts of this first-in-human clinical trial had clinically-advanced XLRP, with patients having limited or no measurable remaining photoreceptor area or retinal sensitivity.

Two dose escalation patients (n=1 at 3E11 vg/eye; n=1 at 1E12 vg/eye) were evaluable for clinical activity defined as having both measurable ellipsoid-zone area ("EZ Area") by spectral domain optical coherence tomography ("SD-OCT") and retinal sensitivity by microperimetry in both the treated and untreated control eye with at least six months follow-up; dose expansion cohort patients (n=2) had not yet reached six months of follow-up.

*Month 4 – Patient 5 unable to fixate in untreated eye at Month 6.

4D-125 was well-tolerated and did not result in dose-limiting toxicities. No serious adverse events were reported. Enrollment in the dose-expansion cohort is ongoing. We expect to enroll patients with less advanced disease than those enrolled in dose escalation, and whom we expect to be evaluable for clinical activity based on central reading center confirmation at screening.

4D-150 for Wet AMD and Diabetic Retinopathy

Disease Background, Unmet Medical Need and Target Patient Population

Wet AMD is a type of macular degeneration where abnormal blood vessels (choroidal neovascularization or "CNV") grow into the macula, the central area of the retina. As a consequence, CNV causes retina swelling and edema, and bleeding can occur and cause visual distortion and reduced acuity. The proliferation of abnormal blood vessels in the retina is stimulated by VEGF. This process distorts and can potentially destroy central vision and may progress to blindness without treatment. There are on average 200,000 new incidences of wet AMD per year in the United States alone. Wet AMD accounts for approximately 10% of all diagnosed cases of AMD, but it results in an estimated 90% of the legal blindness caused by all types of AMD. High expression levels of VEGF appear to play a causal role in the symptoms of wet AMD.

Diabetes mellitus affects approximately 400 million adults worldwide and the prevalence is expected to increase by approximately 45% in the next decade. Diabetic eye disease, primarily diabetic retinopathy (“DR”), is a leading cause of vision loss and blindness in working-age adults and occurs due to the development of diabetic macular edema (“DME”; swelling, edema and hemorrhage in the central vision) and complications arising from proliferative diabetic retinopathy ("PDR"; retinal neovascularization causing bleeding and retinal detachment). The prevalence of diabetic retinopathy is high, affecting almost one-third of adults over 40 years of age with diabetes. In the United States approximately 4.2 million adults have DR and 655,000 have vision-threatening DR.

The current treatment paradigm for wet AMD and diabetic retinopathy, including DME, is intravitreal injection of patients with anti-VEGF proteins that inhibit the proliferation of new blood vessels, reducing edema and bleeding and allowing some visual acuity to be recovered. Most anti-VEGF therapies require repeated intravitreal injections in the office every few weeks to every few months to obtain full efficacy. When patients miss doses, they may experience accelerated vision decline. Based on current clinical experience, after several years of treatment, the early vision gains are frequently lost, and acuity declines are observed for reasons that may include variable treatment regimens and poor patient compliance.

We believe these major retinal diseases are ideal candidate applications for gene therapy. There are multiple products on the market that validate the anti-VEGF therapeutic approach, and emerging randomized clinical trial data suggest that inhibiting additional molecular targets can extend the efficacy and durability of anti-VEGF alone. Delivering intravitreal therapies to the eye is routine, and there is an advantage for a single dose gene therapy that can provide long-term efficacy in patients for whom compliance, or treatment resistance, is a problem.

Our Solution

4D-150 is a dual-transgene, intravitreal gene therapy designed to inhibit four distinct angiogenic factors to prevent angiogenesis and reduce vascular permeability for the treatment of angiogenic diseases of the retina. These angiogenic diseases of the retina, including wet AMD and diabetic retinopathy, represent therapeutic markets of over $9.7 billion in annual global sales.

4D-150 is engineered for efficient intravitreal delivery to the retina of a payload expressing two transgenes that has the potential for greater efficacy and/or lower required doses versus therapies that target a single VEGF factor, including in patients refractory to currently approved anti-VEGF therapies. Intravitreal delivery of biologics to the eye is routine, and a single dose intravitreal gene therapy that could provide long-term efficacy in patients would be an advantage for patients who struggle with treatment burden and/or treatment resistance.

Competition and Differentiation: AAV Gene Therapy for wet AMD and Diabetic Retinopathy

AAV gene therapy approaches are being developed by several companies to treat wet AMD by delivering a functional copy of an anti-angiogenic transgene by either subretinal or suprachoroidal injection with a conventional AAV vector, or intravitreal administration with a mouse-evolved vector. It remains to be demonstrated whether conventional AAVs or mouse-evolved vectors can deliver significant retinal coverage while limiting off-target effects. In comparison, our targeted and evolved vectors are designed and tested in NHPs whose eyes more closely resemble the anatomy of the human eye than mouse eyes. We believe this provides comprehensive retinal coverage through less invasive and more commonly used intravitreal injections while delivering an improved tolerability profile with limited inflammation. To our knowledge, 4D-150 is the only AAV gene therapy asset in wet AMD and DR to utilize an intravitreal vector (such as R100) discovered through directed evolution in NHP. In addition, in vitrostudies of R100 versus AAV2 have shown superior transduction by R100 in human retinal cells. We have not compared R100 to AAV2 in patients in clinical studies. R100 has been associated with a low inflammation profile and lack of adverse findings in 91 NHP eyes injected in GLP toxicology studies.

In addition, to our knowledge, 4D-150 is the first gene therapy product candidate for the eye designed to implement three mechanisms of action by directly inhibiting four different angiogenic growth factor targets, including VEGF-A, -B and C- and PlGF. We therefore believe there is significant differentiation between our gene therapy product candidate and other AAV gene therapeutics in development in this therapeutic area.

We believe 4D-150 has the potential to be differentiated from approved agents, and those in clinical development, to our knowledge, on the basis of five features:

Four distinct mechanisms-of-action: An intravitreal dose of 4D-150 should result in sustained anti-angiogenic effects through three distinct mechanisms of action.

One-time therapy: Unlike intravitreal protein therapeutics that require repeat dosing every few weeks for a patient’s lifetime, 4D-150 is designed as a one-time dose.

Novel vector evolved in NHPs for efficient intravitreal delivery: Unlike conventional AAV vectors such as AAV2 or the mouse-evolved AAV vector 7m8, R100 was specifically selected in NHPs from our collection of over one billion synthetic capsid sequences for use in humans.

Low inflammation profile design: Following intravitreal injection, R100 has shown a low inflammation profile and no significant adverse findings in three GLP toxicology studies, involving 91 NHP eyes, with two different 4DMT products utilizing the R100 vector (4D-110 and 4D-125). In addition, R100 vector-based product candidates 4D-125 and 4D-110 have been administered to patients at doses up to 1E12 vg/eye without dose-limiting toxicities observed to date. With respect to 4D-110 at the 1E12 vg/eye dose, pigment dispersion (iris transillumination) was observed in three patients in the 1E12 vg/eye cohort approximately 7 to 9 months following treatment. Two cases were asymptomatic and one patient reported mild glare. In each case the investigator described this as a Serious Adverse Event, but no hospitalization or medical intervention was initiated.

Commercial opportunity: Intravitreal injections are widely adopted by many practicing ophthalmologists and used to treat a number of ophthalmological indications. As a result, we believe 4D-150 has the potential for rapid market uptake, if approved. Additionally, the low inflammation profile we have observed in our R100-based GLP toxicology studies, if reproduced in the clinic with 4D-150, may promote broad product adoption, if approved.

Preclinical Animal Model Pharmacology and Toxicology Studies

We carried out a proof-of-concept efficacy study in NHPs with 4D-150. In this study using the retinal laser-induced CNV model, we treated animals with intravitreal 4D-150 at doses of 1E11, 3E11 and 1E12 vg per eye. Animals received steroid treatment for 28 days following IVT administration of 4D-150 and remained off steroids for the remainder of the study. No adverse findings were reported. We demonstrated 100% suppression of CNV lesions 4-weeks after laser administration, the primary endpoint of the study, including at the lowest dose tested of 1E11 vg/eye. No uveitis or retinal abnormalities were reported at this 1E11 vg/eye dose level.

In an acute biodistribution study of 4D-150 in NHP, a single intravitreal injection resulted in both high levels of ocular aflibercept expression and VEGF-C miRNA expression within the retina at 4 weeks, with no evidence of uveitis or retinal abnormalities observed.

Clinical Development: Phase 1/2 Clinical Trial

4D-150 is currently being evaluated in a first-in-human, on-going Phase 1/2 dose-escalation and randomized, controlled, masked expansion trial and is expected to enroll approximately 60 adults with wet AMD. In the dose-escalation phase, multiple dose levels of 4D-150 will be examined in an open-label, 3+3 design with an initial dose of 3E10 vg/eye. In dose expansion, patients (n=50) will be randomized 2:2:1 to receive one of 2 dose levels of 4D-150 (n=20 for each dose level) or aflibercept (n=10). The primary endpoints of the study are safety and tolerability. Secondary endpoints include the number of supplemental aflibercept injections received and change from baseline in best corrected visual acuity ("BCVA") over time. In January 2022, we announced the dosing of the first patient in this trial.

4D-110 for Choroideremia

Disease Background, Unmet Medical Need and Target Patient Population

Choroideremia is a monogenic blinding disease, affecting approximately 13,000 patients in the United States and EU-5. No products are approved currently for the treatment of this disease in the United States or European Union. This X-linked, progressive degenerative disease of the retina and choroid is caused exclusively by mutations in the CHM gene that encodes for the REP1 protein. While choroideremia primarily affects men, some heterozygous females also suffer variable visual loss from the condition.

Choroideremia initially manifests as night-blindness and peripheral visual field defects, usually starting in the first two decades of life. The visual field begins to constrict relatively early in the disease’s progression, which hinders patients’ ability to conduct daily activities such as driving. Many patients become blind by 30 years of age. A patient with advanced disease will be legally blind by virtue of poor visual acuity and minimal preserved visual field. Almost all mutations in the CHM gene result in production of a non-functional REP1 protein. REP1 is essential for the activation (prenylation) of Ras-associated binding (“Rab”) proteins involved in intracellular vesicle trafficking.

Our Solution

We are developing 4D-110 for the treatment of choroideremia. 4D-110 is designed for a single intravitreal injection and to benefit patients at all stages of disease, including early-stage patients whose entire viable retinas are not adequately treated by subretinal injection. 4D-110 contains the R100 vector and is engineered to deliver the CHMtransgene, the dysfunctional gene in choroideremia, to human RPE cells safely. We believe that 4D-110 has the potential, if approved, to successfully treat choroideremia patients at the earliest stages of their disease progression and ideally, slow or prevent progression and retain vision.

Competition and Differentiation: AAV Gene Therapy for Choroideremia

Previously, subretinal conventional AAV gene therapy approaches were being developed to treat choroideremia. With the recent discontinuation of BIIB111, there is currently no direct competition for the choroideremia market. Subretinal administration requires an invasive surgical procedure, which has been associated with subretinal surgery-related adverse events. In addition, subretinal surgery results in transduction of only a small fraction of the retina and is therefore limited to patients with more advanced disease who have a small remaining area of viable retinal cells.

Preclinical Animal Model Pharmacology and Toxicology Studies

A total of 44 NHPs have been treated with 4D-110 on two GLP toxicology and biodistribution studies. No significant adverse effects or toxicities were reported.

We completed a single dose IND-enabling toxicology and biodistribution study in 27 NHPs dosed with 4D-110. 4D-110 was administered at doses of 1E11 vg/eye or 1E12 vg/eye by intravitreal injection. Animals were sacrificed at three weeks, three months or six months. No meaningful toxicities were reported anywhere in the body, including specifically within the retina. Mild, transient cortico-steroid responsive anterior uveitis was reported in a minority of treated NHP. No chronic inflammation was reported; all animals were under systemic immunosuppression during the study. We detected vector genomes and CHM/REP1 transgene RNA expression in all treated retinas at both dose levels; the genome and RNA levels were higher in the high dose animals.

We subsequently completed a bilateral intravitreal 4D-110 GLP toxicology and biodistribution study in 17 NHPs dosed with 4D-110. 4D-110 was administered at doses of 3E11 vg/eye or 1E12 vg/eye by intravitreal injection. Animals were sacrificed at three weeks, 13 weeks and 26 weeks. No meaningful toxicities were reported anywhere in the body, including specifically within the retina.

Transient cortico-steroid responsive uveitis was reported. No chronic inflammation was reported; all animals were under systemic immunosuppression during the study. We detected vector genomes and CHM/REP1transgene RNA expression in treated retinas at both dose levels.

In preclinical pharmacology studies involving human choroideremia patient-derived RPE cells, 4D-110 led to functional REP1 protein expression that corrected RAB27A trafficking from the cytoplasm to the cell membrane. In similar fashion to normal RPE cells, 4D-110-treated diseased RPE cells derived from choroideremia patients had RAB27A protein associated with their cell membranes; this finding confirmed the functionality of the REP1 protein expressed from 4D-110. In contrast, in untreated diseased cells, RAB27A was demonstrated diffusely throughout the cytoplasm.

Clinical Development: Phase 1/2 Clinical Trial

4D-110 is currently being studied in an ongoing Phase 1/2 dose escalation clinical trial in patients with choroideremia. The primary objectives of this trial are to evaluate the safety and maximum tolerated dose of 4D-110. Secondary endpoints include assessments of biologic activity, including both visual field function and anatomical endpoints.

We reported initial clinical data on this program in October 2021. As of the October 2021 data disclosure, six patients with clinically advanced choroideremia were treated. A standard 3+3 dose escalation design was used. Patients were enrolled in one of two dose cohorts: 3E11 vg/eye (cohort 1; n=3) and 1E12 vg/eye (cohort 2; n=3).

* Rate of progression normalized for same # months

+ Patient 2 latest evaluable scans 10 months

At the 3E11 vg/eye dose (Cohort 1), 4D-110 was well-tolerated with no dose-limiting toxicities or serious adverse events. Initial signals of clinical activity were observed at this dose, through anatomical measurements of the retinal pigment epithelium ("RPE") by fundus autofluorescence area and photoreceptors by ellipsoid zone area. At the 1E12 vg/eye dose, pigment dispersion (iris transillumination) was observed in three patients in the 1E12 vg/eye cohort approximately 7 to 9 months following treatment. Two cases were asymptomatic and one patient reported mild glare. In each case the investigator described this as a Serious Adverse Event, but no hospitalization or medical intervention was initiated.

Enrollment in the clinical trial is on-going at the 3E11 vg/eye dose level.

Cardiology Therapeutic Area

Introduction

We are developing product candidates to treat cardiomyopathies. These target indications may include both primary cardiomyopathies that involve the heart exclusively, as with hypertrophic cardiomyopathies, or secondary cardiomyopathies that occur in the context of a systemic disease, as with lysosomal storage diseases. In the context of secondary cardiomyopathies, such as Fabry disease, we design and engineer the product to treat all diseased organs including the high unmet medical need in the heart. Our targeted and evolved vector, C102, used in all of our cardiology product candidates, was invented for low dose intravenous infusion, leading to transgene expression throughout the myocardium. We believe that this modular product approach, utilizing C102 for all of our cardiology product candidates, and switching the therapeutic transgene inserts, will help inform the clinical development of subsequent product candidates using the same vector.

4D-310 for Fabry Disease

Disease Background, Unmet Medical Need and Target Patient Population

Fabry disease is a monogenic disease caused by mutations in the GLA gene which encodes for the alpha-galactosidase A (“AGA”) enzyme, that result in the body’s inability to produce sufficient AGA enzyme activity, causing the accumulation of toxic levels of sphingolipids, such as the substrate globotriaosylceramide-3 (“lyso-Gb3”), in critical organs, including the heart, kidney and blood vessels. The cardiomyopathy in Fabry disease is the leading cause of death, accounting for 54% of deaths. Substrate accumulation in the heart can lead to life-threatening heart failure, arrhythmias, and vascular blockages. Fabry disease is progressive and fatal, with an average life expectancy of approximately 50 years. Progression of the disease causes significant reduction in the quality of life and significant economic burden associated with greater patient needs for supportive care.

Annual worldwide sales of Fabry medicines were approximately $1.8 billion in 2021. We estimate the potential initial addressable male Fabry patient population in the United States and EU-5 to be up to 19,000 individuals, 57% of whom suffer from Classic Fabry disease. Of note, we estimate the prevalence of individuals with Fabry disease-associated GLA mutations in the United States and EU-5 falls between 50,000 and 70,000 in the United States and the EU-5 based on recent newborn screening. Pre-treatment antibody titers to gene therapy, including 4D-310, may result in a reduction in the addressable patient population, if antibody titers at baseline are shown to be predictive of treatment response and/or tolerability.

The current treatment paradigm for Fabry disease is bi-weekly infusion of AGA enzyme, a class of therapies broadly referred to as enzyme replacement therapies (“ERT”). For example, Fabrazyme received accelerated regulatory approval in 2003 in the United States based on improvements in a kidney interstitial capillary substrate biopsy endpoint, and received full approval in 2021.

In addition to high burdens of therapy due to the short-half life in the blood, patients on ERTs lack therapeutic concentrations of AGA in their blood for the majority of time between infusions, potentially limiting clinical benefit. AGA is normally produced within target cells themselves, but ERTs reportedly lack efficient uptake by parenchymal cells including cardiomyocytes. As a result, patients remain at risk of cardiac complications including death. Finally, antibodies develop to AGA in the majority of Classic Fabry disease patients after ERT which can reduce the therapeutic effect of ERT, leading to worse clinical outcomes than those patients on ERT who don't develop anti-AGA antibodies.

Therefore, we believe cardiac-targeted treatment of Fabry disease is still an unmet medical need.

Our Solution

We are developing 4D-310 for the comprehensive systemic treatment of Fabry disease. 4D-310 is designed for an efficient, single low dose IV administration to benefit classic and late onset patients, including those who have previously received ERT. 4D-310 is comprised of C102 and is engineered with a codon-optimized GLA transgene under control of a ubiquitous promoter. 4D-310 is designed to generate both high, stable AGA activity in the blood, potentially resulting in cross correction of a broad range of critical organs, and to generate AGA activity via intracellular production within diseased cells including cardiomyocytes.

We believe 4D-310 has the potential for “mutation independent” treatment of both “classic” (early onset, severe) as well as late-onset Fabry disease, both of which are often associated with cardiomyopathy. We believe reducing substrate in cardiomyocytes would represent a strategic advantage and significant opportunity in the treatment of Fabry-associated cardiomyopathy, which we believe remains a significant unmet medical need and is a leading cause of death in Fabry disease patients.

In addition, AGA produced by 4D-310 within target cells themselves will not be exposed to serum antibodies against AGA. These antibodies develop following ERT in approximately 80% of Classic Fabry disease patients. We therefore have the potential to treat this patient population via intracellular production of AGA, in contrast to approaches that rely exclusively on delivery of AGA through the bloodstream.

Finally, single dose gene therapy treatment with 4D-310 may obviate biweekly ERT infusions in these patients, and/or every other day small molecule medicines for patients amenable to AGA chaperone therapy.

Competition and Differentiation: AAV and Gene Therapy for Fabry Disease

Companies are developing liver-expressing AAV gene therapy for Fabry disease using conventional AAVs designed for expression from the liver only using liver-specific promoters. These product candidates are designed for the production and secretion of AGA enzyme for activity in the blood, as with ERT, but with more stable blood levels than achieved with intermittent ERT infusions. When administered as ERT in patients, the AGA protein has not been shown definitively to enter cardiomyocytes or other affected parenchymal cells. It is therefore unclear whether gene therapy-induced production of AGA from the liver, with secretion into the bloodstream, would result in effective correction in cardiac muscle cells or other affected parenchymal cells such as in the kidney.

We believe 4D-310 is the only gene therapy candidate designed specifically to express the AGA enzyme in cardiac tissues, as well as in other affected tissues in these patients, potentially addressing a major unmet medical need.

We believe 4D-310 has the potential to be differentiated from approved agents and those in clinical development, to our knowledge, on the basis of four features:

Dual mechanisms-of-action: An IV dose of 4D-310 is designed to generate both stable sustained levels of AGA enzyme activity in blood and endothelial cells following secretion from the liver, plus high AGA levels directly within muscle cells throughout the heart. Preclinical data also suggest cells within the kidney, blood vessels and small intestine also produce intracellular AGA after 4D-310 treatment, albeit at significantly lower levels than in the heart.

One-time therapy: Unlike AGA chaperones that require dosing every other day for a patient’s life, or IV ERT every two weeks for life, 4D-310 is designed as a single dose therapy.

AGA mutation-independent biologic activity: Unlike AGA chaperones that are only effective against specific AGA mutations present in a minority of Fabry patients, 4D-310 is designed to treat Fabry patients with any AGA mutation.

Resistance to AGA antibodies: We believe that 4D-310 may be able to treat patients that have anti-AGA antibodies. Those antibodies develop in approximately 80% of Classic Fabry disease patients (early onset, severe disease) treated with ERT. This is in contrast to competing approaches that rely exclusively on AGA delivery through the bloodstream, that may be inhibited by these antibodies since AGA comes into contact with anti-AGA antibodies in the bloodstream that may inhibit delivery to target organs. Unlike ERT and gene therapies that are designed to rely exclusively on AGA production and secretion from the liver into the blood, 4D-310 is designed to include intracellular AGA production in target tissues themselves, thus avoiding AGA antibody contact and inhibition. We therefore plan to evaluate the treatment of patients with pre-existing AGA antibodies, potentially resulting in a larger addressable patient population.

The target product profile for 4D-310 is compared to competing technologies below. Many aspects of this profile have been supported by data generated to date with either the C102 vector or with 4D-310 itself.

Preclinical Animal Model Pharmacology and Toxicology Studies

We completed an IND-enabling GLP toxicology and biodistribution study of 4D-310 in normal mice. No meaningful toxicity was reported at doses up to 1.5E14 vg/kg, based both on in-life and histopathology assessments. This dose is 300% of the highest planned dose in our Phase 1/2 clinical trial. 4D-310-mediated AGA expression and/or AGA enzyme activity was observed in all target tissues tested, including heart, kidney, blood vessels, small intestine and blood.

Pharmacology studies have been completed in Fabry disease knock-out mice. We observed that a single IV treatment with 4D-310 resulted in high stable blood concentrations and durable AGA production in target tissues, including the heart and kidney, and that toxic lyso-Gb3 metabolites were reduced significantly in all evaluated target tissues versus vehicle control. Efficacy was demonstrated with doses as low as 1E12 vg/kg. No adverse findings were observed in these knock-out animals at doses as high as 5E13 vg/kg.

We performed a dose-ranging toxicity and biodistribution study in NHPs. Doses of 3E12, 1E13 and 5E13 vg/kg were well-tolerated and resulted in AGA activity concentrations in blood equal to 1.9-fold, 3.4-fold and 70-fold higher than pretreatment blood levels, respectively, within 14 days after treatment. NHPs used in this study were healthy and had normal baseline levels of AGA activity. No meaningful toxicity was noted clinically or with blood testing. Histopathology assessments were normal. Tissue analyses demonstrated dose-related 4D-310 genome delivery, RNA expression and AGA activity throughout the heart, especially within the left ventricle which is the key target tissue. AGA expression and enzymatic activity were also demonstrated within the kidney.

Clinical Development: Phase 1/2 Clinical Trial

We are currently studying 4D-310 in an on-going Phase 1/2 dose-escalation and dose-expansion clinical program assessing intravenous 4D-310, 4DMT’s targeted and evolved C102 vector-based product candidate designed for Fabry disease. The primary endpoint of these trials is safety and tolerability. Key secondary endpoints include change from baseline in serum AGA activity and serum lyso-Gb3. Exploratory endpoints include markers of biologic activity in the heart, including cardiac imaging parameters and quality of life. In the Asia-Pacific portion of the program, cardiac biopsies will also be assessed.

In February 2022, we reported updated interim Phase 1/2 data from the on-going clinical trial. All three patients enrolled were patients with Classic Fabry disease, defined as having AGA activity <5% of mean normal in peripheral blood white cells and having one or more clinical characteristics such as acroparesthesia, hypohidrosis, angiokeratoma or cornea verticillata.

Consistent with the Classic Fabry disease phenotype, all three patients had serum AGA activity below mean normal at baseline, ranging from 0 – 0.42 nmol/hr/mL (population normal range: 4.44 – 27.42 nmol/hr/mL; population mean normal 9.9 nmol/hr/mL).

All three patients had prior experience on enzyme replacement therapy ("ERT"). Patients 1 and 3 were enrolled while receiving ERT (ON-ERT). Patient 2 had prior experience with ERT but was not receiving ERT (OFF-ERT) for approximately 13 months prior to dosing. Consistent with prior ERT use, each patient had positive baseline anti-AGA antibody titers:

Patient 1: Baseline anti-AGA antibody titer 1:947

Patient 2: Baseline anti-AGA antibody titer 1:99,900

Patient 3: Baseline anti-AGA antibody titer 1:13,900

Following 4D-310 infusion, mean serum AGA enzyme activity was within, or significantly above, the normal range in all three patients, despite pre-treatment anti-AGA antibody titer positivity in all patients. Lyso-Gb3 substrate concentrations in serum decreased significantly in Patient 2, who enrolled in the trial OFF-ERT and therefore with an elevated lyso-Gb3 level.

Patients 1 and 3 demonstrated an increase in serum AGA enzyme activity significantly above the normal range at all timepoints through last follow-up.

Serum AGA activity: mean normal = 9.9 nmol/hr/ml; normal range: 4.44 – 27.42 nmol/hr/mL

Patient 2 entered the trial OFF-ERT but had prior ERT treatment that was stopped approximately 13 months prior to dosing. As a result, Patient 2 had a high baseline lyso-Gb3 level (101 ng/mL). Patient 2 also had the highest pre-treatment anti-AGA antibody titer of all three patients treated and of all patients screened to date (1:99,900).Patient 2 demonstrated a significant increase in serum AGA enzyme activity into the normal range. Lyso-Gb3 decreased significantly (>50%) within the first four weeks and remained stable through week 12.

Serum AGA activity: mean normal = 9.9 nmol/hr/ml; normal range: 4.44 – 27.42 nmol/hr/mL;

Lyso-Gb3 normal range: < 1.0 ng/mL

* = Patient 2 week 6 lyso-Gb3 datapoint not evaluable due to hemolysis

Preliminary clinical data evaluating biologic activity in the heart were also reported. Patient 1, who was the only patient who reached the initial 6-month cardiac MRI assessment, demonstrated encouraging signals of biologic activity in the heart on Native T1 and Global Longitudinal Strain.

4D-310 demonstrated a manageable safety profile in all three patients. No dose-limiting toxicities were observed and no serious adverse events were reported with Patient 1 and 3, and these patients did not have either atypical hemolytic uremic syndrome ("aHUS") or liver toxicity, which are the two primary class-related toxicities associated with systemically administered AAV. Patient 2 developed transient, self-limited aHUS within approximately one week following treatment and was admitted to the hospital for observation and hydration and was discharged after four days. As a result of hospitalization, this event was classified as a serious adverse event.

Enrollment is on-going in both the Phase 1/2 dose-escalation and dose-expansion clinical program.

Pulmonology Therapeutic Area

Introduction

We are developing product candidates to treat lung diseases. Our targeted and evolved vector, A101, is used in all of our pulmonology disease product candidates and was invented for aerosol delivery, leading to transgene expression throughout all regions of the lung airways and alveoli, as well as resistance to pre-existing antibodies. We believe that this modular product approach, utilizing A101 for multiple product candidates by switching the therapeutic transgene insert, will help inform the clinical development of subsequent product candidates using the same vector.

Our first pulmonology product candidate is 4D-710 for cystic fibrosis lung disease. This IND candidate has completed a non-GLP dose-ranging toxicology and biodistribution study in NHPs by aerosol delivery. No notable adverse effects were reported, and widespread biodistribution and transgene expression were observed throughout all lung segments tested in all NHPs. We have initiated an IND-enabling GLP toxicology and biodistribution study in NHPs. We are currently enrolling a Phase 1/2 clinical trial in patients with cystic fibrosis.

4D-710 for Cystic Fibrosis Lung Disease

Disease Background, Unmet Medical Need and Target Patient Population

Cystic fibrosis is the most common fatal inherited disease in the United States and results from mutations in the cystic fibrosis transmembrane conductance regulator (“CFTR”) gene. Cystic fibrosis causes impaired lung function, inflammation and bronchiectasis and is commonly associated with repeat and persistent lung infections due to the inability to clear thickened mucus from the lung, often resulting in frequent exacerbations and hospitalizations and eventual end-stage respiratory failure. There is no cure for cystic fibrosis, and the median age of death for patients is approximately 40 years in developed countries. Cystic fibrosis is considered a rare, or orphan, disease by both the FDA and the EMA.

According to the Cystic Fibrosis Foundation, more than 30,000 people in the United States and more than 70,000 people worldwide are living with cystic fibrosis, and approximately 1,000 new cases of cystic fibrosis are diagnosed in the United States each year. Patients with cystic fibrosis require lifelong treatment with multiple daily medications, frequent hospitalizations and, ultimately, lung transplants in some end-stage patients. The quality of life for cystic fibrosis patients is further compromised as a result of spending significant time on self-care every day and frequent outpatient doctor visits and hospitalizations.

Until recently, approved therapies to treat cystic fibrosis patients were only designed to treat the symptoms of cystic fibrosis, for example by preventing and controlling infections that occur in the lungs, rather than addressing the underlying cause of the disease. Accordingly, antibiotics are frequently used along with mucus-thinning drugs.

More recently, a new class of drugs called modulators target CFTR for patients with certain gene mutations. Several therapies from Vertex Pharmaceuticals Inc. have been approved for marketing in the United States and the European Union based on their ability to improve lung function in genetically defined subsets of cystic fibrosis patients. In 2019, the FDA approved triple drug therapy with Trikafta (elexacaftor/ivacaftor/tezacaftor), which Vertex believes would be applicable for up to 90% of cystic fibrosis patients, leaving at least 10% with no CFTR-targeted options. While these therapies improve lung function, reduce exacerbations and have extrapulmonary benefits, the magnitude of lung function improvement is variable, and these chronic therapies require daily dosing for the patient’s lifetime. In addition, the existing cystic fibrosis drugs have been associated with tolerability issues, thus limiting their use.

We believe there is a clinical need and market opportunity for a durable aerosolized therapy, delivered by breath-actuated nebulizer, that can restore normal CFTR function across all cystic fibrosis patient subgroups, including patients who are receiving combination CFTR-modulator therapies and/or do not have appreciable CFTR protein expression and are therefore not amenable to CFTR modulators. We expect to explore single agent therapy with 4D-710 initially in patients who are not amenable to CFTR modulators (estimated to include approximately 10% of all cystic fibrosis patients), and to explore single agent or combination therapy with CFTR modulators for the remaining approximately 90% of patients with cystic fibrosis.

Our Solution

We are developing 4D-710 for the treatment of a broad range of patients with cystic fibrosis independent of their specific CFTR mutation. 4D-710 is designed for efficient single dose aerosol delivery to the proximal and distal airways and alveoli, subsequent mucus barrier penetration, lung epithelial cell transduction, and resistance to pre-existing antibodies in humans. The intended result is to achieve CFTR expression within lung airway epithelial cells for correction of cystic fibrosis lung disease. 4D-710 is comprised of our targeted and evolved vector, A101, and a codon-optimized version of a synthetic truncated CFTR transgene deltaR-CFTR, which we refer to as microCFTR. microCFTR is a construct that retains the most critical functional components of the full-size CFTR gene and is small enough to fit within AAV vector packaging constraints.

We believe 4D-710 has the potential to treat a broad range of patients with cystic fibrosis independent of their specific CFTR mutation. Initially we plan to focus on the approximately 10% of all patients who are not amenable to existing medicines targeting the CFTR protein as we believe these patients have the highest unmet medical need. In patients with CFTR mutations that are amenable to modulator medicines, while therapies demonstrate improvements in lung function, these modulators do not restore normal lung function in most patients. Further, these chronic therapies require daily dosing for the patient’s lifetime. We therefore expect to eventually develop 4D-710 in this patient population, as a single agent and/or in combination with these CFTR modulator small molecule medicines.

Competition and Differentiation: AAV Gene Therapy for Cystic Fibrosis

A number of biotechnology companies have pursued gene therapy solutions to treat cystic fibrosis. We believe these prior attempts to deliver AAV gene therapy to the lungs of cystic fibrosis patients have failed due to an inability of conventional AAV vectors to penetrate through the lung mucus barrier and transduce lung cells efficiently. Further, we believe antibody neutralization of AAV likely also played a role in the lack of efficacy, as the mucosal immune system actively transports large quantities of antibodies into all mucus secretions, including on the lung mucosa.

While a number of companies are currently pursuing other gene therapy solutions utilizing liposomes, herpesvirus, lentivirus or conventional AAV vectors, these product candidates are in early stages of development. Moreover, they are not, to our knowledge, comprised of AAV vectors evolved in NHPs for aerosol delivery diffusely throughout the lung airways and alveoli. In addition, we believe these products were not designed for resistance to pre-existing antibodies to conventional AAVs, which is potentially a key requirement for successful delivery in the lung. As a result, to our knowledge, 4D-710 is the only AAV gene therapy product candidate in development designed specifically with a vector selected for aerosol delivery in NHPs, including humans, and with resistance to antibodies in the human population.

We believe 4D-710 has the potential to be differentiated from approved agents, and those in clinical development to our knowledge, on the basis of four features:

Corrective mechanism-of-action: An aerosol dose of 4D-710 is designed to result in therapeutic levels of the CFTR protein directly within target cells lining the airway and alveoli. 4D-710 comprises a targeted and evolved vector invented for aerosol delivery, mucus barrier penetration and transduction of epithelial cells within the airways and alveoli of NHPs and humans.

One-time therapy: Unlike CFTR-targeted small molecules that require daily dosing for a patient’s entire life, 4D-710 is designed for single or significantly less frequent dosing.

CFTR mutation-independent efficacy: Unlike CFTR-targeted small molecules that are only effective against specific mutations, 4D-710 is designed to be used in cystic fibrosis patients with any mutation, including in the approximately 10% of patients whose disease is not amenable to currently available medical therapy.

Resistance to AAV antibodies: Unlike conventional AAV vectors, which are sensitive to anti-AAV antibody inhibition, 4D-710 utilizes A101, a vector invented for resistance to human antibody inhibition.

Preclinical Proof-of-Concept Study with Evolved AAV for Aerosol Delivery in the Cystic Fibrosis Pig Model

Preclinical proof-of-concept studies have been conducted utilizing directed evolution to discover vectors for delivering a corrective CFTR gene construct to cystic fibrosis lung tissue in a large animal model of cystic fibrosis, and in a human cystic fibrosis patient lung tissue model. Building on these previous proof-of-concept studies, our product candidate 4D-710 utilizes a vector, A101, that was evolved and selected in NHPs, which we believe is more relevant for human use. The product was designed to package the same microCFTR transgene payload in this vector that was customized for use in humans.

In addition, directed evolution was used in an in vitro human organotypic air-liquid interface model of lung epithelium to select AAV2.5T, which we in-licensed with exclusive worldwide rights. In preclinical studies, AAV2.5T carrying microCFTR transduced human lung epithelial tissue and resulted in expression of functional protein as suggested by increased chloride ion transport as compared to untreated control.

We believe that these results demonstrate that a targeted and evolved vector can penetrate the mucus layer of diseased cystic fibrosis lungs and deliver functional CFTR protein in a well-validated large animal model of the disease, as well as in human cystic fibrosis patient-derived organotypic lung models.

Preclinical Animal Model Pharmacology and Toxicology Studies

In our NHP study of a single aerosol delivered dose of 4D-710 at two different dose levels, treatment resulted in widespread distribution, CFTR transgene expression throughout both proximal and distal airways and alveoli. No meaningful inflammation or adverse findings were reported on in-life examinations, hematology or clinical chemistry analyses, or lung histology analyses. Ex vivo studies demonstrated highly significant resistance to neutralization by human pooled antibody preparations, with human IVIG pooled from over 1,000 individuals.

Clinical Development: Phase 1/2 Clinical Trial

In October 2021, we received clearance from the U.S. Food and Drug Administration ("FDA") of an Investigational New Drug Application ("IND") for 4D-710. We expect to dose the first patient in our Phase 1/2 clinical trial for 4D-710 in the first half of 2022. The Phase 1/2 clinical trial is a multicenter, open-label, dose-escalation and dose-expansion trial of 4D-710 in patients (n=~18) with cystic fibrosis who are ineligible for CFTR modulator therapy or who have discontinued therapy due to adverse effects. The primary endpoint of the study is safety and tolerability. Secondary endpoints include assessments of clinical activity including lung function, plus transgene transfer and microCFTR expression as measured within bronchoscopic biopsies and brushings.

Competition

We are aware of several companies focused on developing gene therapies in various indications as well as companies addressing methods for modifying genes and regulating gene expression. We may also face competition from large and specialty pharmaceutical and biotechnology companies, academic research institutions, government agencies and public and private research institutions with genetic medicine and other therapeutic approaches.

With respect to 4D-125 for the treatment of XLRP, we consider our most direct AAV gene therapy competitors to be as follows: Applied Genetic Technologies Corporation (candidate administered by subretinal surgery in a Phase 1/2 clinical trial), Janssen Pharmaceuticals Inc. / MeiraGTx Holdings Plc (candidate administered by subretinal surgery enrolling a Phase 3 clinical trial).

With respect to 4D-110 for the treatment of choroideremia, we currently believe there are no gene therapies in development for this disease.

We consider our most direct competitors with respect to 4D-150 for the treatment of diabetic retinopathy and wet AMD to be Eylea (aflibercept) from Regeneron Pharmaceuticals Inc., which is the current wet AMD standard of care, and a combination of antibody-based programs including, but not limited to, Lucentis, Susvimo and Vabysmo from Roche, KSI-301 from Kodiak Sciences Inc. (missed primary endpoint in wet AMD), and OPT-302 from Opthea Limited, and gene-therapy based programs including ADVM-022 from Adverum Biotechnologies (discontinued in diabetic populations) and RGX-314 from RegenxBio Inc., which are both AAV-based programs in Phase 2 and Phase 3 studies, respectively.

We consider our most direct competitors with respect to 4D-310 for the treatment of Fabry disease to be Amicus Therapeutics, which has Galafold (migalastat) approved as a small molecule chaperone for specific mutations, and several gene therapy companies including Freeline Therapeutics Holdings Plc, which is in Phase 1 development of AAVS2-based FLT-190, and Sangamo, which is in Phase 1/2 development of AAV2/6-based ST-920. Other competitors include Sanofi Genzyme, Takeda Pharmaceutical Company Limited and Protalix BioTherapeutics, all of which either commercialize or develop enzyme replacement therapy for the treatment of Fabry disease.

We consider our most direct competitors with respect to 4D-710 for the treatment of cystic fibrosis lung disease to be Vertex, which has several approved CFTR modulators, as well as other gene therapy companies in preclinical development of cystic fibrosis programs, including Krystal Biotech Inc., Abeona Therapeutics Inc., Spirovant Sciences Inc. and Editas Medicine Inc.

Manufacturing

CMC Strategy

In order to fulfill our strategy to maximize the robustness and internal control of our manufacturing processes from discovery and process development through to clinical-grade cGMP manufacturing, we have designed and are continually developing and scaling a robust in-house manufacturing platform for both GMP and non-GMP manufacturing. While many companies in the AAV gene therapy field in-license clinical trial material or manufacturing technologies from other companies or academic manufacturing centers, in contrast, our manufacturing processes were developed internally using internal technology transfers from our own process development labs. Our current in-house manufacturing capabilities include GMP manufacturing (upstream, downstream and fill/finish), production capabilities for clinical trials, IND-enabling GLP toxicology studies and research candidate production. In addition to our internal activities, we also collaborate with Contract Manufacturing Organizations ("CMOs").

Current Good Manufacturing Practices (“cGMP”) Capabilities

Our team has extensive experience with the manufacturing and analytical testing of numerous unique AAV capsids. Our team has internally manufactured over 150 unique AAV vectors, including both proprietary evolved 4DMT capsid variants and naturally occurring capsids. Our team has manufactured over 240 total lots of AAV vectors for research or clinical use. We have in-house cGMP manufacturing capabilities for clinical trial material production. Our manufacturing team has completed and released multiple lots of clinical trial material for our five product candidates in clinical development. This total also includes 15 lots of product candidate material for GLP toxicology and biodistribution studies. Leveraging internal testing capabilities in addition to qualified contract testing laboratories, we fully test and release our GLP and GMP lots for use in toxicology and clinical trials, respectively. We have developed and qualified assays for characterization, in-process testing and release and stability testing of our internally and externally manufactured proprietary AAV vectors.

Process Development Capabilities

We use robust, scalable and transferable manufacturing unit operations throughout both the vector characterization process and product development, which are both platform-specific and product-specific. The upstream manufacturing step involves triple plasmid transfections in an adherent HEK293 mammalian production cell line. Downstream manufacturing steps for purification and concentration include multiple orthogonal column chromatography steps and tangential flow filtration. The downstream purification columns used in our process are from stable sources including General Electric. Using internally developed manufacturing processes and testing, we characterize our novel capsids and payloads. In addition, leveraging internal expertise and capabilities, we package and test our novel vectors with payloads using internally developed manufacturing processes.

Manufacturing Facilities

Our manufacturing facilities are on site at company headquarters in Emeryville, California and include process development labs, an analytical development lab, and a cGMP manufacturing facility. These manufacturing facilities are also designed for production of material for GLP toxicology and biodistribution studies. In addition, we are currently building a second manufacturing facility to enable commercial-scale lot sizes under cGMP. Our cGMP facilities will be able to provide additional capacity for production of Phase 1 through Phase 3 clinical trials material. We expect to utilize commercial-scale bioreactors that are designed to manufacture higher titer clinical trial material lots. Our manufacturing facilities are also designed for production of material for GLP toxicology and biodistribution studies.

Manufacturing Team

Our team of approximately 40 highly trained individuals is led by our Chief Technical Officer and Chief Operating Officer, Dr. Fred Kamal, and includes Ph.D. scientists. Collectively, they have significant experience in viral vector manufacturing, chemistry-manufacturing-controls (“CMC”), regulatory affairs, analytical and process development, and quality assurance and controls. As of December 31, 2021, our team has submitted five INDs all of which have been granted clearance by the FDA enabling our clinical candidates to advance to Phase 1/2 clinical development. Our team also has experience prior to 4DMT with manufacturing multiple viral vectors from preclinical studies through to multiple Phase 3 trials. For example, Dr. Kamal helped to write and compile the AAV gene therapy BLA for Zolgensma ("Novartis"), the first AAV gene therapy approved for intravenous administration in infants and babies.

Intellectual Property

Our commercial success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, manufacturing and process discoveries, and other know-how, to operate without infringing the proprietary rights of others and to prevent others from infringing our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing U.S. and foreign patent applications related to our proprietary technology, inventions and improvements that are important to the development and implementation of our business. In particular, our patent strategy includes the filing of patent applications covering unique gene sequences selected through our Therapeutic Vector Evolution process. We also rely on trade secrets, know-how, continuing technological innovation and potential in-licensing opportunities to develop and maintain our proprietary position.

Our product and lead optimization candidates were discovered by us utilizing our proprietary technology. We have filed several non-provisional and provisional patent applications, all owned by us, relating to our product and lead optimization candidates in the United States, certain foreign countries, and the World Intellectual Property Organization that are directed to compositions-of-matter, dosage unit forms, methods-of-treatment and medical use. We have also licensed several non-provisional patent applications, granted patents and international patent applications relating to our targeted and evolved vector, A101, which is used in 4D-710, and to other AAV-based technologies from U.C. Berkeley.

As of December 31, 2021, our solely owned patent portfolio includes four granted U.S. patents and twenty-one granted foreign patents; each of these patents is expected to expire between May 2037 and April 2041, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid. Our solely owned patent portfolio also includes eight pending U.S. non-provisional applications and sixty-three pending foreign applications. We expect that United States and European patents, if issued from pending applications in our solely owned portfolio, would expire between May 2037 and August 2041, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid. Additional patent term for the presently issued or later issued U.S. patents may be awarded as a result of the patent term extension provision of the Hatch-Waxman Amendments of 1984. In the European Union member countries, a supplementary protection certificate, if obtained, provides a maximum five years of market exclusivity. Our solely owned patent portfolio also includes one pending U.S. provisional patent application.

In other jurisdictions (currently, Australia, Bahrain, Brazil, Canada, Chile, China, Colombia, Costa Rica, Egypt, India, Indonesia, Iran, Israel, Japan, Korea, Kuwait, Malaysia, Mexico, New Zealand, Oman, Peru, Philippines, Qatar, Russia, Saudi Arabia, Singapore, South Africa, Taiwan, Thailand, United Arab Emirates, Ukraine and Vietnam), patents, if issued on pending applications in our solely owned patent portfolio, where applicable, relating to our product and lead optimization candidates, including composition of matter, dosage unit form, method-of-treatment and medical use, are expected to expire between May 2037 and August 2041, if the appropriate maintenance, renewal, annuity, and other government fees are paid. These patents and patent applications (if applicable), depending on the national laws, may benefit from extension of patent term in individual countries if regulatory approval of any of our product or lead optimization candidates is obtained in those countries. For example, in Japan, the term of a patent may be extended by a maximum of five years in certain circumstances.

As of December 31, 2021, our in-licensed patent portfolio includes five granted U.S. patents and six granted foreign patents; each of these patents is expected to expire between June 2024 and May 2034, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid. Our in-licensed patent portfolio also includes four pending U.S. non-provisional patent applications and twenty-two pending foreign patent applications. We expect that United States and European patents, if issued from applications in our in-licensed portfolio would expire between June 2024 and June 2038, excluding any additional term from patent term adjustment or patent term extension if appropriate maintenance and other governmental fees are paid.

In other jurisdictions (currently, Australia, Brazil, Canada, China, Hong Kong, India, Japan, Korea and Mexico), patents, if issued on pending applications in our in-licensed patent portfolio, where applicable, relating to our product and lead optimization candidates, including composition of matter and various other patents, including dosage unit form, method-of-treatment and medical use patents are expected to expire between June 2024 and June 2038, if the appropriate maintenance, renewal, annuity, and other government fees are paid. These patents and patent applications (if applicable), depending on the national laws, may benefit from extension of patent term in individual countries if regulatory approval of any of our product or lead optimization candidates is obtained in those countries. For example, in Japan, the term of a patent may be extended by a maximum of five years in certain circumstances.

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 United States are effective for 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 (“USPTO”) delay in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period. However, as to the FDA component, 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. The duration of foreign patents varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective filing date. The actual protection afforded by a patent varies on a product by product basis, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

We also protect our trade secrets and other proprietary technology and processes, in part, by confidentiality and invention assignment agreements with our employees, consultants, scientific advisors and other contractors. These agreements may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our employees, consultants, scientific advisors or other contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

Our commercial success will also depend in part on not infringing the proprietary rights of third parties. It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies, alter our drugs or processes, obtain licenses or cease certain activities. Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or commercialize our future drugs may have a material adverse impact on us.

Strategic Collaborations

Collaboration and License Agreement with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc.

In November 2017, we entered into a Collaboration and License Agreement (the “2017 Roche Agreement”), with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., collectively referred to as Roche. Under the Roche Agreement, we granted Roche an exclusive, sublicensable, worldwide license under certain intellectual property rights to research, develop, make, use, import, export, and sell products and constructs using our proprietary AAV vectors to treat ophthalmological diseases and disorders, excluding treatment and prevention of cancer and central nervous system conditions (but not retinal nerves) and delivery of DNA-directed RNA interference (the “Roche Field”).

At the effective date of the 2017 Roche Agreement, choroideremia was designated a Roche product class and the 4D-110 product was licensed to Roche. We were responsible for conducting research and development services prior to pivotal clinical studies, and Roche was responsible for conducting subsequent development and commercialization activities. In addition, Roche agreed to pay for research and development services we incur at an agreed upon full-time employee rate and certain third party costs, excluding costs associated with the manufacturing work for choroideremia.

Under the 2017 Roche Agreement, Roche had an option exercisable prior to pivotal clinical studies, to license 4D-125 (for the treatment of XLRP), which was not exercised.

Pursuant to the 2017 Roche Agreement, we received a non-refundable upfront payment of $21.0 million as consideration. In addition, we were entitled to contingent payments including (i) $1.0 million for each Roche nominated product beyond the first three, (ii) up to $30.0 million upon exercise of the option to convert a product we nominated and developed prior to pivotal clinical studies, (iii) development milestone payments of up to $223.0 million, of which $86.0 million related to choroideremia and the rest related to other licensed products; and (iv) sales-based milestones of up to $123.0 million in connection with licensed products. Through December 31, 2021, we received $10.0 million for development milestone payments that are non-refundable. The 2017 Roche Agreement also included provisions that entitled us to receive royalty payments ranging from the mid-single digits to the mid-teens for the net sales of the licensed products, in each case subject to the reductions in accordance with the terms of the agreement.

In its accounting treatment, we identified a single combined performance obligation for the license, research services and participation in the joint steering committee and concluded that Roche’s option did not represent a material right. We determined that the 2017 Roche Agreement did not include a significant financing component. We further concluded that the transaction price should not include the variable consideration related to the development milestones, which were considered to be constrained, as it was probable that the inclusion of such variable consideration could result in a significant reversal of cumulative revenue in the future. We excluded any consideration related to sales-based milestones, including royalties, which would be recognized when the related sales occur. The transaction price and estimated period of performance are re-evaluated at each reporting period and adjusted as needed to reflect changes in the scope of the project, reimbursable expenses and other conditions affecting variable consideration.

In June 2021, we received from Roche notice of termination without cause of the 2017 Roche Agreement. The licenses granted by us to Roche under the 2017 Roche Agreement terminated in their entirety on September 16, 2021. Therefore, as of September 16, 2021, Roche no longer has a license for 4D-110 for the treatment of choroideremia or any other product class, and we are no longer entitled to receive any further milestones or royalties from Roche. In July 2021, we notified Roche of our election to continue development of choroideremia. As a result, in accordance with the terms of the agreement, all rights to 4D-110 data and intellectual property generated under the collaboration reverted to us. Under the 2017 Roche Agreement, if we are required to initiate a new Phase 1/2a clinical trial for 4D-110, we would not owe any royalty to Roche on net sales of 4D-110 following regulatory approval and commercialization. If, however, we obtain regulatory approval for and commercializes 4D-110, without being required to conduct a new Phase 1/2a clinical trial, we must pay Roche a mid-single digits percentage royalty on the net sales of 4D-110.

Collaboration and License Agreements with uniQure biopharma B.V.

In August 2019, we entered into an Amended and Restated Collaboration and License Agreement (the “Amended and Restated uniQure Agreement”) with uniQure biopharma B.V., now uniQure N.V. (“uniQure”), which amended and restated the Collaboration and License Agreement that we entered into with uniQure in January 2014.

Under the Amended and Restated uniQure Agreement, we granted uniQure an exclusive, sublicensable, worldwide license under certain of our intellectual property rights, and other rights, to research, develop, make, use, and commercialize pre-selected AAV capsid variants (“Selected Variants”), and compounds and products containing such Selected Variants, using our proprietary AAV technology for delivery of gene therapy constructs to cells in the central nervous system and the liver (the “uniQure Field”). uniQure is solely responsible, at its cost and expense, to develop and commercialize the compounds and products containing the Selected Variants in accordance with the terms of the Amended and Restated uniQure Agreement. We retain all rights to all other AAV capsid variants, and compounds and products containing such AAV capsid variants, in the uniQure Field.

Also in August 2019, we entered into a separate Collaboration and License Agreement with uniQure (“Second uniQure Agreement”). Under the Second uniQure Agreement, the parties agreed to research and develop new AAV capsid variants that are not Selected Variants (New Variants) using our proprietary AAV technology for delivery of transgene constructs that affect certain targets (“uniQure Targets”) in the uniQure Field. We are responsible for the research of the New Variants, and uniQure is responsible for the development and commercialization of a certain number of compounds and products containing New Variants, that affect the uniQure Targets (“Licensed Products”). We granted uniQure an exclusive, sublicensable, worldwide license under certain of our intellectual property rights, and other rights, to research, develop, make, use, and commercialize the Licensed Products. We retain all rights to New Variants in the uniQure Field that affect targets other than the uniQure Targets. We also retain all rights to any new AAV capsid variants developed under the agreements that are not New Variants, and compounds and products containing such variants.

Under both the Amended and Restated uniQure Agreement and the Second uniQure Agreement, uniQure will be required to pay us royalties on worldwide annual net sales of licensed products at a mid-single digit percentage rate, subject to certain specified reductions. These royalties are payable on a product-by-product and country-by-country basis until the latest of ten years after the date of the first commercial sale of such product in such country, the expiration of the last-to-expire licensed patent right covering such product in such country (of which there are none), and the expiration of any applicable exclusivity granted by a regulatory authority in such country for such product (the “uniQure Royalty Term”). uniQure will also be required to pay us a portion of the amounts it receives for licensing or sublicensing to third parties our intellectual property rights licensed or other rights otherwise granted under the Amended and Restated uniQure Agreement, and a portion of the amounts it receives for licensing to third parties our intellectual property rights granted under the Second uniQure Agreement, each at a rate between mid-single digit to mid-twenties percentages, depending on the stage of development at which such third-party grant occurs.

Under both the Amended and Restated uniQure Agreement and the Second uniQure Agreement, under certain circumstances, we may propose to uniQure, and uniQure may grant to us, a non-exclusive right for us to develop and commercialize certain licensed products based on Selected Variants in the uniQure Field, or the New Variants in the uniQure Field to deliver transgene constructs that affect the uniQure Targets (“4DMT Proposed Products”). Pursuant to the Second uniQure Agreement, under certain circumstances, uniQure may propose to us, and we may grant to uniQure a non-exclusive right for uniQure to develop and commercialize certain licensed products using any new AAV capsid variants developed under the agreement that are not New Variants in the uniQure Field to deliver transgene constructs that affect targets other than the uniQure Targets (“uniQure Proposed Products”). If either party obtains the rights to develop and commercialize a 4DMT Proposed Product or a uniQure Proposed Product, as applicable, such party will be required to pay the other party royalties on worldwide annual net sales of such products at a mid-single digit percentage rate, subject to specified reductions. These royalties will be payable on a product-by-product basis during the uniQure Royalty Term for such products. The party receiving such license will also be required to pay the other party a portion of the amounts that it may receive for licensing or sublicensing to third parties rights for such 4DMT Proposed Products or uniQure Proposed Products, as applicable, at a rate between mid-single digit to mid-twenties percentages depending on the stage of development at which the sublicense is granted.

Each of the Amended and Restated uniQure Agreement and the Second uniQure Agreement will expire on the expiration of all payment obligations of the parties under such agreement. Each party may terminate either agreement for the other party’s insolvency or bankruptcy. Each party may also terminate either agreement in its entirety in some circumstances or on an indication-by-indication basis if the other party fails to cure its material breach under the applicable agreement within 90 days of receiving notice, subject to an additional cure period in accordance with the terms of such agreement. uniQure may terminate either agreement upon 90 days’ prior written notice. If we terminate either agreement for uniQure’s material breach, insolvency or bankruptcy or if uniQure terminates either agreement for convenience, the rights to the Selected Variants, and compounds and products containing such Selected Variants, or the uniQure New Variants, and compounds and products containing such uniQure New Variants, as applicable, generally revert back to us. If uniQure terminates either agreement for our material breach under the applicable agreement, insolvency or bankruptcy, uniQure may retain its rights to the intellectual property license grant under such agreement and uniQure’s payment obligations will survive.

Exclusive License and Agreements with The Regents of the University of California and The Trustees of the University of Pennsylvania

In December 2013, we entered into two Exclusive License and Bailment Agreements (the “2013 UC Agreements”) with The Regents of the University of California (the “UC Regents”) with one of the agreements covering AAV2 capsid mutants with novel properties for enhanced performance in gene therapy and the other covering AAV for enhanced gene delivery in the presence of neutralizing antibodies. Under both 2013 UC Agreements, the UC Regents granted us an exclusive, sublicensable license under certain patent rights to make, use, sell, offer to sell, and import products and services, and to practice methods in the United States and foreign countries where the licensed patent rights exist. The license grant under one of the 2013 UC Agreements is in all fields of use and the license grant under the other 2013 UC Agreement is in all fields of use, with the exception of the ophthalmic field. We agreed to certain general and specific diligence obligations under both 2013 UC Agreements in connection with the development, manufacture and sales of the licensed products, services and methods.

Under each 2013 UC Agreement, we paid the UC Regents an upfront payment of $5,000. Further, at the closing of our Series A financing that was a qualified financing pursuant to the 2013 UC Agreements, we issued 311,812 shares of our common stock in aggregate under both agreements. Under each 2013 UC Agreement, we agreed to pay the UC Regents a specified annual license maintenance fee in each year in which we do not owe royalties to the UC Regents. We also agreed to pay the UC Regents a mid-teens to mid-twenties percentage range of any consideration, including royalties, we receive for the grant of a sublicense under the licensed patent rights under each 2013 UC Agreement, with the consideration payable to the UC Regents to not exceed such percentage range in the aggregate under both 2013 UC Agreements for the same sublicense grant. We may reduce any such sublicense consideration payable to UC Regents if we sublicense any of our own or third-party patent rights under the sublicense grant based on the relative value of the sublicensed patents. Upon the achievement of specified development and regulatory milestones by the first licensed product or method, we will be required to pay the UC Regents up to $3.1 million under each 2013 UC Agreement. We will also be required to pay the UC Regents a royalty on net sales of licensed products, services and methods covered by the patents licensed under the 2013 UC Agreements at a percentage in the low single-digit percentage rate, subject to certain specified reductions. Under the UC Agreements, a specified minimum annual royalty will also be due to the UC Regents beginning the first calendar year after the year in which any net sales of a licensed product first occur, such minimum royalty amount to increase on an annual basis, but not to exceed $0.1 million in the aggregate under both UC Agreements. Under each UC Agreement, royalties are payable until the expiration of the last-to-expire licensed patent right covering the licensed product, service or method, at which time the agreement shall expire. The UC Regents may terminate each of the 2013 UC Agreements if we fail to cure a breach of such UC Agreement within 60 days of notice. If we fail to meet our diligence obligations, the UC Regents has the right, under each 2013 UC Agreement, to either terminate the agreement or to reduce our exclusive license to a non-exclusive license, after giving us 60 days to cure or request arbitration. We may terminate either 2013 UC Agreement at-will in its entirety or with respect to any portion of the licensed patent rights upon 90 days prior written notice.

In January 2019, the Company entered into an Exclusive License and Bailment Agreement (“the 2019 UC Agreement”) with the UC Regents to license patent rights related to certain retinal AAV variants. The UC Regents granted us an exclusive, sublicensable license to make, use, sell, offer to sell, and import products and services, and to practice methods in the United States and foreign countries where the licensed patent rights exist. The license grant under the 2019 UC Agreement is in all fields of use. We agreed to certain general and specific diligence obligations under the 2019 UC Agreement in connection with the development, manufacture and sales of the licensed products, services and methods.

Under the 2019 UC Agreement, we paid the UC Regents an upfront payment of $50,000 and agreed to pay a specified annual license maintenance fee in each year in which we do not owe royalties to the UC Regents. We also agreed to pay the UC Regents a mid-teens to mid-twenties percentage range of any consideration, including royalties, we receive for the grant of a sublicense under the licensed patent rights under the 2019 UC Agreement. We may reduce any such sublicense consideration payable to UC Regents if we sublicense any of our own or third-party patent rights under the sublicense grant based on the relative value of the sublicensed patents. Upon the achievement of specified development and regulatory milestones by the first licensed product or method, we will be required to pay the UC Regents up to $3.1 million under the 2019 UC Agreement. We will also be required to pay the UC Regents a royalty on net sales of licensed products, services and methods covered by the patents licensed under the 2019 UC Agreements at a percentage in the low single-digit percentage rate, subject to certain specified reductions. Under the 2019 UC Agreement, a specified minimum annual royalty will also be due to the UC Regents beginning the first calendar year after the year in which any net sales of a licensed product first occur, such minimum royalty amount to increase on an annual basis, but not to exceed $0.1 million in the aggregate. Under the 2019 UC Agreement, royalties are payable until the expiration of the last-to-expire licensed patent right covering the licensed product, service or method, at which time the agreement shall expire. The UC Regents may terminate the 2019 UC Agreement if we fail to cure a breach of the agreement within 60 days of notice. If we fail to meet our diligence obligations, the UC Regents has the right to either terminate the agreement or to reduce our exclusive license to a non-exclusive license, after giving us 60 days to cure or request arbitration. We may terminate either 2019 UC Agreement at-will in its entirety or with respect to any portion of the licensed patent rights upon 90 days prior written notice.

In July 2021, the Company entered into an Exclusive License Agreement (the "UC/UPenn Agreement") with the UC Regents and the Trustees of the University of Pennsylvania ("UPenn") to license intellectual property related to certain AAV vectors. The UC Regents and UPenn granted us an exclusive, sublicensable license to make, use, sell, offer to sell, and import products and services, and to practice methods in the United States and foreign countries where the licensed patent rights exist. The license grant under the UC/UPenn Agreement is in all therapeutic and prophylactic fields of use and excludes diagnostic uses. We agreed to certain general and specific diligence obligations under the UC/UPenn Agreement in connection with the development, manufacture and sales of the licensed products, services and methods. In July 2021, the Company paid a non-refundable license fee of $100,000 to the UC Regents upon execution of the agreement. The Company is obligated to pay a non-refundable license maintenance fee of $10,000 on the one-year anniversary of the contract effective date and each year thereafter, except years for which the Company has paid royalties on the net sales of a licensed product. In addition, the Company is obligated to make certain contingent payments including (i) development sales milestones up to $3.9 million, (ii) low single digit percentage rate royalties on the net sales of its licensed products that consists of a minimum annual royalty of up to $0.1 million per year for the term of the Agreement beginning in the first calendar year after the year in which net sales first occurred and (iii) sublicense consideration in the mid-single digits to the low twenties percentage rate range on any future sublicensing arrangements the Company may enter into with third-party licensees, which we may reduce if we sublicense any of our own or third-party patent rights under the sublicense grant based on the relative value of the sublicensed patents. Under the UC/UPenn Agreement, royalties are payable until the expiration of the last-to-expire licensed patent right covering the licensed product, services or method, at which time the agreement shall expire. The UC Regents or UPenn may terminate the UC/UPenn Agreement if we fail to cure a breach of the agreement within 60 days of notice. If we fail to meet our diligence obligations, the UC Regents has the right to either terminate the agreement or to reduce our exclusive license to a non-exclusive license, after giving us 60 days to cure or request arbitration. We may terminate the UC/UPenn Agreement at-will in its entirety or with respect to any portion of the licensed patent rights upon 90 days prior written notice.

Cystic Fibrosis Foundation

In 2016, we received a grant from Cystic Fibrosis Foundation (“CFF”) in the amount of $525,000 to support discovery and development of product candidates to treat cystic fibrosis. The grant was increased to $3.5 million in 2017 and was subsequently amended to allocate the $3.5 million to different milestones. The grant provides for repayment to CFF upon the commercialization of any product developed under the grant. The repayment is capped at nine times the grant actually paid to us.

In April 2020, CFF made a $10.0 million investment in our Series C redeemable convertible preferred stock financing. In return for the investment, CFF received shares of our Series C redeemable convertible preferred stock, and we and CFF entered into a Funding Agreement (the Funding Agreement). Pursuant to the terms of the Funding Agreement, we agreed to use the proceeds of the CFF investment to support development of 4D-710, our product candidate for the treatment of cystic fibrosis, and to match CFF’s support for the product candidate. As provided under the Funding Agreement, following acceptance by the FDA in October 2021 of our IND for 4D-710 ("Acceptance"), CFF made an additional $4.0 million investment (the "Subsequent Investment"), in exchange for 125,715 shares of the Company's common stock. We have agreed to use the additional $4.0 million from the Subsequent Investment to support development of 4D-710 and to match CFF's support of the product candidate. Under the terms of the Funding Agreement, neither the $10.0 million investment in the Series C redeemable convertible preferred stock nor the $4.0 million of funding upon Acceptance are restricted as to withdrawal or usage.

Government Regulation

The FDA and other 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, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of biological product candidates such as those we are developing. We, along with third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our product candidates. The process of obtaining regulatory approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.

U.S. Biologics Regulation

In the United States, biological products are subject to regulation under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, and other federal, state, local and foreign statutes and regulations. The process required by the FDA before biologic product candidates may be marketed in the United States generally involves the following:

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completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s GLPs;

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submission to the FDA of an IND which must become effective before clinical trials may begin;

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approval by an IRB or ethics committee at each clinical site before the trial is commenced;

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performance of adequate and well-controlled human clinical trials to establish the safety, purity and potency of the proposed biologic product candidate for its intended purpose;

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preparation of and submission to the FDA of a BLA after completion of all pivotal clinical trials;

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satisfactory completion of an FDA Advisory Committee review, if applicable;

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

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satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMP and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (“GCPs”); and

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FDA review and approval of the BLA to permit commercial marketing of the product for particular indications for use in the United States.

Prior to beginning the first clinical trial with a product candidate in the United States, we must submit an IND to the FDA. An IND is a request for authorization from the FDA to administer an investigational new drug product to humans. The central focus of an IND submission is on the general investigational plan and the protocol(s) for clinical trials. 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. An IND must become effective before human clinical trials may begin. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the proposed clinical trial. In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

In addition to the submission of an IND to the FDA, under the National Institutes of Health, or NIH, Guidelines for Research Involving Recombinant DNA Molecules (NIH Guidelines), supervision of certain human gene transfer trials may also require evaluation and assessment by an institutional biosafety committee (“IBC”), a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution. The IBC assesses the safety of the research and identifies any potential risk to the public health or the environment, and such assessment may result in some delay before initiation of a clinical trial. While the NIH Guidelines are not mandatory unless the research in question is being conducted at or sponsored by institutions receiving NIH funding of recombinant or synthetic nucleic acid molecule research, many companies and other institutions not otherwise subject to the NIH Guidelines voluntarily follow them.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical study. Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments. Furthermore, an independent IRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site and must monitor the study until completed. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. 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 are also requirements governing the reporting of ongoing clinical studies and clinical study results to public registries.

For purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

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Phase 1—The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition. These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.

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Phase 2—The investigational product is administered 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—The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant 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.

In some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product. These so-called Phase 4 studies may also be made a condition to approval of the BLA.

While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the drug, findings from animal or in vitro testing suggesting a significant risk to humans exposed to the drug, and any clinically important increased rate of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure.

Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate, and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final 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.

BLA Submission and Review by the FDA

Assuming successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or more indications. The BLA must include all relevant data available from preclinical 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 can come from company-sponsored clinical studies intended to test the safety and effectiveness of a use of the product, or from a number of alternative sources, including studies initiated by investigators. The submission of a BLA requires payment of a substantial user fee to FDA, and the sponsor of an approved BLA is also subject to an annual program fee. A waiver of user fees may be obtained under certain limited circumstances. Additionally, no user fees are assessed on BLAs for products designated as orphan drugs, unless the product also includes a non-orphan indication.

Within 60 days following submission of the application, the FDA reviews a BLA submitted to determine if it is substantially complete before the FDA accepts it for filing. 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. Once a BLA has been accepted for filing, the FDA’s goal is to review standard applications within ten months after the filing date, or, if the application qualifies for priority review, six months after the filing date. Priority review designation will direct overall attention and resources to the evaluation of applications for products that, if approved, would be significant improvements in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions. In both standard and priority reviews, the review process is often significantly extended by FDA requests for additional information or clarification. The FDA reviews a BLA to determine, among other things, whether a product is safe, pure and potent and the facility in which it is manufactured, processed, packed, or held meets standards designed to assure the product’s continued safety, purity and potency. The FDA may also convene an advisory committee to provide clinical insight on application review questions. The FDA is not bound by recommendations of an advisory committee, but it considers such recommendations when making decisions regarding approval.

Before approving a BLA, the FDA will typically 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 and adequate to assure consistent production of the product within required specifications. Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval letter or a Complete Response Letter (“CRL”). An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A CRL will describe all of the deficiencies that the FDA has identified in the BLA, except that where the FDA determines that the data supporting the application are inadequate to support approval, the FDA may issue the CRL without first conducting required inspections, testing submitted product lots, and/or reviewing proposed labeling. In issuing the CRL, the FDA may recommend actions that the applicant might take to place the BLA in condition for approval, including requests for additional information or clarification. The FDA may delay or refuse approval of a BLA if applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product.

If regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed. For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation Strategy (“REMS”), to ensure the benefits of the product outweigh its risks. A REMS is a safety strategy to manage a known or potential serious risk associated with a medicine and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries, and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications. Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace. The FDA may also require one or more Phase IV post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

Expedited Development and Review Programs

A sponsor may seek approval of its product candidate under programs designed to accelerate FDA’s review and approval of new drugs and biological products that meet certain criteria. Specifically, new biological product candidates are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast track designation applies to the combination of the product candidate and the specific indication for which it is being studied. The sponsor of a fast track product candidate has opportunities for more frequent interactions with the applicable FDA review team during product development and, once a BLA is submitted, the application may be eligible for priority review. For a fast track product candidate, the FDA may consider sections of the BLA for review on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the application, the FDA agrees to accept sections of the application and determines that the schedule is acceptable and the sponsor pays any required user fees upon submission of the first section of the application. A fast track designated product candidate may also qualify for priority review, under which the FDA sets the target date for FDA action on the BLA at six months after the FDA accepts the application for filing.

A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation to expedite its development and review. A product candidate can receive breakthrough therapy designation if preliminary clinical evidence indicates that the product candidate, alone or in combination with one 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. The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of senior managers.

In 2017, the FDA established the regenerative medicine advanced therapy (“RMAT”) designation as part of its implementation of the 21st Century Cures Act. The RMAT designation program is intended to fulfill the 21st Century Cures Act requirement that the FDA facilitate an efficient development program for, and expedite review of, any drug or biologic that meets the following criteria: (i) the drug or biologic qualifies as a RMAT, which is defined as a cell therapy, therapeutic tissue engineering product, human cell and tissue product, or any combination product using such therapies or products, with limited exceptions; (ii) the drug or biologic is intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition; and (iii) preliminary clinical evidence indicates that the drug or biologic has the potential to address unmet medical needs for such a disease or condition. RMAT designation provides all the benefits of breakthrough therapy designation, including more frequent meetings with the FDA to discuss the development plan for the product candidate and eligibility for rolling review and priority review. Product candidates granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of clinical trial sites, including through expansion of trials to additional sites.

Any marketing application for a drug or biologic submitted to the FDA for approval, including a product candidate with a fast track designation, RMAT designation and/or breakthrough therapy designation, may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as priority review and accelerated approval. A product candidate is eligible for priority review if it is designed to treat a serious or life-threatening disease or condition, and if approved, would provide a significant improvement in safety or effectiveness compared to available alternatives for such disease or condition. For original 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 (as compared to ten months under standard review). Under the accelerated approval program, the FDA may approve a BLA on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. Post-marketing studies or completion of ongoing studies after marketing approval are generally required to verify the biologic’s clinical benefit in relationship to the surrogate endpoint or ultimate outcome in relationship to the clinical benefit. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product. FDA may withdraw approval of a biologic or indication approved under accelerated approval on an expedited basis if, for example, the sponsor fails to conduct required post-marketing trials in a timely manner or if such trials fail to verify the predicted clinical benefit of the product.

Fast Track designation, priority review, accelerated approval, RMAT designation and breakthrough therapy designation do not change the standards for approval but may expedite the development or approval process. Even if a product candidate qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.

Orphan Drug Designation and Exclusivity

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, defined as a disease or condition with a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 individuals in the United States and when there is no reasonable expectation that the cost of developing and making available the drug or biologic in the United States will be recovered from sales in the United States for that drug or biologic. Orphan drug designation must be requested before submitting a BLA. After the FDA grants orphan drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.

If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient 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 BLA, to market the same biologic for the same indication for seven years, 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 orphan drug designation are tax credits for certain research and a waiver of the 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 orphan designation. In addition, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or, as noted above, if the second applicant demonstrates that its product is clinically superior to the approved product with orphan exclusivity or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition. We have obtained orphan drug designation for 4D-110 for the treatment of Choroideremia and for 4D-310 for the treatment of Fabry disease, and we plan to seek additional orphan drug designations for some or all of our product candidates in specific orphan indications in which there is a medically plausible basis for the use of these products.

Post-Approval Requirements

Biologics are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual program fees for any marketed products. Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP, which impose certain procedural and documentation requirements upon us and our third-party manufacturers. Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting requirements upon us and any third-party manufacturers that we may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS program. Other potential consequences include, among other things:

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restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

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fines, warning letters, or untitled letters;

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clinical holds on clinical studies;

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refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals;

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product seizure or detention, or refusal to permit the import or export of products;

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consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs;

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mandated modification of promotional materials and labeling and the issuance of corrective information;

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the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; or

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injunctions or the imposition of civil or criminal penalties.

The FDA closely regulates the marketing, labeling, advertising and promotion of biologics. A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA. Such off-label uses are common across medical specialties. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.

Biosimilars and Exclusivity

The Affordable Care Act, signed into law in 2010, includes a subtitle called the BPCIA, which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product. The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars. Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through analytical studies, animal studies, and a clinical study or studies. Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA. In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed. During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

A biological product can also obtain pediatric market exclusivity in the United States. Pediatric exclusivity, if granted, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study.

The BPCIA is complex and continues to be interpreted and implemented by the FDA. In addition, government proposals have sought to reduce the 12-year reference product exclusivity period. Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation. As a result, the ultimate impact, implementation, and impact of the BPCIA is subject to significant uncertainty.

Other Healthcare Laws

Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business. Such laws include, without limitation, U.S. federal and state anti-kickback, fraud and abuse, false claims, pricing reporting, data privacy and security, and transparency laws and regulations as well as similar foreign laws in the jurisdictions outside the U.S. For example, the federal Anti-Kickback Statute prohibits, among other things, individuals or entities from knowingly and willfully offering, paying, soliciting or receiving remuneration, directly or indirectly, overtly or covertly, in cash or in kind to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs. A person or entity does not need to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act and the civil monetary penalties statute. The federal civil and criminal false claims laws, including the civil False Claims Act, prohibit, among other things, any individual or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), created additional federal civil and criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to defraud any healthcare benefit program. Similar to the U.S. federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the healthcare fraud statute implemented under HIPAA or specific intent to violate it in order to have committed a violation. The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to CMS information related to payments or other transfers of value made to physicians, certain other health care professionals beginning in 2022, and teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members.

Similar state and local laws and regulations may also restrict business practices in the pharmaceutical industry, such as state anti-kickback and false claims laws, which may apply to business practices, including but not limited to, research, distribution, sales and marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or by patients themselves; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information or which require tracking gifts and other remuneration and items of value provided to physicians, other healthcare providers and entities; state and local laws that require the registration of pharmaceutical sales representatives. Violation of any of such laws or any other governmental regulations that apply may result in significant penalties, including, without limitation, administrative civil and criminal penalties, damages, disgorgement fines, additional reporting requirements and oversight obligations, contractual damages, the curtailment or restructuring of operations, exclusion from participation in government healthcare programs and imprisonment.

Data Privacy and Security Laws

FDMT US Equity

FDMT · 10-K · period ended 2021-12-31

Item 1. Business.

FDMT US Equity☆

FDMT · 10-K · period ended 2021-12-31

Item 1. Business.

FDMT US Equity