imux-20211231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2021

For the transition period from to

Commission File Number:001-36201

Immunic, Inc.

(Exact name of registrant as specified in its charter)

1200 Avenue of the Americas, Suite 200

(Address of principal executive offices) (Zip Code)

(332) 255-9818

(Registrant’s telephone number, including area code)

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, $0.0001 par value IMUX The Nasdaq Stock Market LLC

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 and post such files). Yes☒ No ☐

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

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☐

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

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

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

The aggregate market value of the common equity held by non-affiliates of the Registrant, based on the closing price of the common stock on The Nasdaq Stock Market on June 30, 2021 was $225.0 million.

On February 18, 2022, 27,906,942 shares of common stock, $0.0001 par value, were outstanding.

Documents Incorporated by Reference: Certain portions of the registrant’s definitive Proxy Statement for its 2022 Annual Meeting of Stockholders are incorporated by reference into Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K.

Immunic, Inc.

ANNUAL REPORT ON FORM 10-K

For the Fiscal Year Ended December 31, 2021

Table of Contents

Page

PART I 2

Item 1. Business. 2

Item 1A. Risk Factors. 29

Item 1B. Unresolved Staff Comments. 64

Item 2. Properties. 64

Item 3. Legal Proceedings. 64

Item 4. Mine Safety Disclosures. 65

Item 6. Selected Financial Data. 67

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 78

Item 8. Financial Statements and Supplementary Data. 79

Item 9A. Controls and Procedures. 80

Item 9B. Other Information. 80

PART III 81

Item 10. Directors, Executive Officers and Corporate Governance. 81

Item 11. Executive Compensation. 81

Item 14. Principal Accountant Fees and Services. 81

Item 15. Exhibits and Financial Statement Schedules. 82

Signatures

Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are based on our management’s current beliefs and assumptions and on information currently available to our management, and are contained principally in the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements include all statements that are not historical facts and can be identified by terms such as “anticipates,” “believes,” “best in class,” “could,” “seeks,” “estimates,” “expects,” “first-in-class,” “focused,” “goal,” “intends,” “may,” “objective,” “opportunity,” “pipeline,” “plans,” “potential,” “predicts,” “projects,” “pursuing,” “should,” “target,” “treatment option,” “will,” “would,” “might,” “can,” “continue” or similar expressions and the negatives of those terms.

These forward-looking statements include, among other things, statements about:

•the strategies, prospects, plans, expectations and objectives of management;

•our ability to maintain compliance with Nasdaq listing standards;

•strategies with respect to our development programs,including our ability to develop and commercialize our product candidates and the timing and expected data of clinical trials and preclinical studies;

•our estimates regarding revenues, expenses, capital requirements, projected cash requirements and needs for additional financing

•possible sources of funding for future operations;

•our ability to protect intellectual property rights and our intellectual property position;

•future economic conditions or performance;

•proposed products or product candidates;

•our ability to retain key personnel;

•our ability to maintain effective internal control over financial reporting; and

•beliefs and assumptions underlying any of the foregoing.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements including those described in “Risk Factors” and elsewhere in this Annual Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Annual Report, unless an earlier date is specified. You should read this Annual Report and the documents that we reference in this Annual Report and have filed with the Securities and Exchange Commission ("SEC") as exhibits hereto completely and with the understanding that our actual future results may be materially different from what we expect.

Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

PART I

Item 1. Business.

Overview

Immunic, Inc. ("Immunic," “we,” “us,” “our” or the "Company") is a clinical-stage biopharmaceutical company with a pipeline of selective oral immunology therapies focused on treating chronic inflammatory and autoimmune diseases, including relapsing multiple sclerosis (“RMS”), ulcerative colitis (“UC”), Crohn’s disease (“CD”) and psoriasis. We are headquartered in New York City with our main operations in Gräfelfing near Munich, Germany. We currently have approximately 55 employees.

We are currently pursuing three development programs. These include the vidofludimus calcium (IMU-838) program, which is focused on the development of oral formulations of a small molecule inhibitor of the enzyme dihydroorotate dehydrogenase (“DHODH”); the IMU-935 program, which is focused on an inverse agonist of retinoic acid receptor-related orphan nuclear receptor gamma truncated (“RORγt”), an immune cell-specific isoform of RORγ; and the IMU-856 program, which involves the development of a drug targeting the restoration of intestinal barrier function and regeneration of bowel epithelium. These product candidates are being developed to address diseases such as RMS, UC, CD, and psoriasis. In addition to these large markets, these products are also being developed to address certain rare diseases with high unmet medical needs, such as primary sclerosing cholangitis (“PSC”), as well as metastatic castration-resistant prostate cancer (“mCRPC”).

The following table summarizes the potential indications, clinical targets and clinical development status of our three product candidates:

Our most advanced drug candidate, vidofludimus calcium (IMU-838), targets DHODH, a key enzyme in the intracellular metabolism of immune cells in the body. In the third quarter of 2020, we reported positive results from our Phase 2 EMPhASIS trial of vidofludimus calcium in relapsing-remitting multiple sclerosis (“RRMS”), achieving both primary and key secondary endpoints with high statistical significance. The first patient in our Phase 3 ENSURE program of vidofludimus calcium in RMS, comprising twin studies evaluating efficacy, safety, and tolerability of vidofludimus calcium versus placebo, was enrolled in November 2021. The first patient in our supportive Phase 2 CALLIPER trial of vidofludimus calcium in progressive multiple sclerosis (“PMS”) was enrolled in September 2021. In the first quarter of 2021, we announced that vidofludimus calcium showed evidence of clinical activity in our Phase 2 CALVID-1 trial in hospitalized patients with moderate coronavirus disease 2019 ("COVID-19"). Also, in the first quarter of 2021, we reported positive top-line data from an investigator-sponsored Phase 2 proof-of-concept clinical trial of vidofludimus calcium in primary sclerosing cholangitis which was conducted in collaboration with the Mayo Clinic. In addition, vidofludimus calcium is currently being tested in a Phase 2 trial in patients with ulcerative colitis (CALDOSE-1 trial), for which we expect top-line data to be available in June of 2022. Additional antiviral directed development activity remains ongoing through an investigator-sponsored Phase 2 clinical trial of vidofludimus calcium as well as preclinical development examining the potential to treat a broad set of viral indications with vidofludimus calcium and other DHODH inhibitors in combination with nucleoside analogues.

If approved, we believe that vidofludimus calcium has the potential to be a highly selective first-in-class DHODH inhibitor in inflammatory bowel disease (“IBD”) and best-in-class DHODH inhibitor in RMS. Importantly, vidofludimus calcium has an attractive pharmacokinetic, safety and tolerability profile and has already been exposed to approximately 1,100 human subjects and patients in either of the drug’s formulations.

Our second drug candidate, IMU-935, is a highly potent and selective inverse agonist of a transcription factor called RORγt. We believe that the nuclear receptor RORγt is the main driver for the differentiation of T-helper 17 (“Th17”) cells and the release of cytokines involved in various inflammatory and autoimmune diseases. We believe this target is an attractive alternative to approved antibodies for targets, such as interleukin-23 (“IL-23”), the IL-17 receptor and IL-17 itself. We have observed strong cytokine inhibition targeting both Th1 and Th17 responses in preclinical testing, as well as indications of activity in animal models for psoriasis, graft versus host disease, MS and IBD. Preclinical experiments indicated that, while leading to a potent inhibition of Th17 differentiation and cytokine secretion, IMU-935 did not affect thymocyte maturation, one of the important physiological functions that should be maintained. Based on these preclinical data and the selectivity of the effect maintaining important physiological functions while providing the desired anti-Th17 effect, we believe that IMU-935 has potential to be a best-in-class therapy for various autoimmune diseases. A Phase 1 clinical trial exploring safety, pharmacodynamics and pharmacokinetics of IMU-935 in healthy human subjects and psoriasis patients is currently ongoing. Additionally, IMU-935 has been shown in preclinical models to target an established mechanism of treatment resistance to androgen receptor therapy, making it a potential treatment option for patients with resistant CRPC. A Phase 1 clinical trial exploring safety and tolerability of increasing doses of IMU-935 to establish the maximum tolerated dose and the recommended phase 2 dose is currently ongoing in patients with mCRPC.

Our third program, IMU-856, which we believe to be novel, is an orally available small molecule modulator that targets a protein which serves as a transcriptional regulator of intestinal barrier function and regeneration of bowel epithelium. We have not yet disclosed the molecular target for IMU-856. Based on preclinical data, we believe this compound may represent a new treatment approach, as the mechanism of action targets the restoration of the intestinal barrier function and regeneration of bowel epithelium in patients suffering from gastrointestinal diseases such as IBD, irritable bowel syndrome with diarrhea, celiac disease and other intestinal barrier function associated diseases. We believe that because IMU-856 has been shown in preclinical investigations to avoid suppression of immune cells, it may therefore have the potential to maintain immune surveillance for patients during therapy, an important advantage versus chronic treatment with potentially immunosuppressive medications. A Phase 1 clinical trial exploring safety, pharmacodynamics and pharmacokinetics of IMU-856 is currently ongoing.

We expect to continue to lead most of our research and development activities from our Gräfelfing, Germany location, where dedicated scientific, regulatory, clinical and medical teams conduct their activities. Due to these teams' key relationships with local and international service providers, we anticipate that this will result in timely, cost-effective execution of our development programs. In addition, we are using our subsidiary in Melbourne, Australia to expedite the early clinical trials for IMU-935 and IMU-856. We also conduct preclinical work in Halle/Saale, Germany through a collaboration with the Fraunhofer Institute.

Strategy

We are focused on the development of best-in-class molecules that maximize the therapeutic benefits for patients by uniquely addressing biologically relevant immunological targets. We take advantage of our established research and development infrastructure and operations in Germany and Australia to efficiently develop our product candidates in indications of high unmet need and where the product candidates have the potential to elevate the standard of care for the benefit of patients. Given the mechanisms of action and the data generated to date for our product candidates, we continue to execute on the clinical development of our programs for established indications as well as explore additional indications where patients could potentially benefit from the unique profiles of each product candidate.

We are currently focused on maximizing the potential of our development programs through the following strategic initiatives:

•Executing the ongoing ENSURE and CALLIPER clinical trial programs of vidofludimus calcium in MS.

•Delivering the results from the CALDOSE-1 trial of vidofludimus calcium in UC, with the path for future development to be assessed following analysis of the results.

•Executing the ongoing clinical studies of IMU-935 in patients with psoriasis and in patients with mCRPC, with the path for future development to be assessed following analysis of the results.

•Executing the ongoing Phase 1 clinical trials of IMU-856, with potential to expand into the treatment of patients with certain gastrointestinal diseases following sufficient safety and tolerability data.

•Continued preclinical research to complement the existing clinical activities, explore additional indications for future development, and where appropriate, generate additional molecules for future development.

•Facilitating readiness for potential commercial launch of our product candidates through targeted and stage-appropriate pre-commercial activities.

•Evaluating potential strategic collaborations for each product candidate in order to complement our existing research and development capabilities and to facilitate potential commercialization of these product candidates by taking advantage of the resources and capabilities of strategic collaborators in order to enhance the potential and value of each product candidate.

Liquidity and Financial Condition

Our business, operating results, financial condition and growth prospects are subject to significant risks and uncertainties, including the failure of our clinical trials to meet their endpoints, failure to obtain regulatory approval and needing additional funding to complete the development and commercialization of our three development programs.

We have no products approved for commercial sale and have not generated any revenue from product sales. We have never been profitable and has incurred operating losses in each year since inception (2016). We have an accumulated deficit of approximately $196.9 million as of December 31, 2021 and approximately $103.9 million as of December 31, 2020. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future as we continue the preclinical and clinical development of our product candidates and add personnel necessary to advance our pipeline of product candidates.We expect that our operating losses will fluctuate significantly from quarter-to-quarter and year-to-year due to timing of clinical development programs.

From inception through December 31, 2021, we have raised net cash of approximately $259.5 million from private and public offerings of preferred and common stock. As of December 31, 2021, we had cash and cash equivalents of approximately $86.9 million. We are dependent on financing activities to fund ongoing operations, and due to the inherent uncertainties in successfully completing financing transactions, and with our forecasted cash reach through the first quarter of 2023, these are indicators of an inability to continue as a going concern. However, we have the ability to manage the amount and timing of expenditures to reduce costs, have limited required fixed spend, and can manage working capital as needed and that coupled with the $16.2 million of cash raised so far in 2022 under our At The Market ("ATM") facility alleviates any uncertainty that we will have adequate liquidity to meet our obligations for at least the next 12 months from the financial statement release date.

Key Status Updates

Vidofludimus Calcium (IMU-838)

Phase 3 Program of Vidofludimus Calcium in RMS (ENSURE-1 and ENSURE-2 Trials)

On July 1, 2021, we announced U.S. Food and Drug Administration (“FDA”) clearance of our Investigational New Drug (“IND”) application for the Phase 3 ENSURE program of our lead product candidate, vidofludimus calcium in patients with RMS. The ENSURE program comprises two identical multicenter, randomized, double-blind Phase 3 trials designed to evaluate the efficacy, safety, and tolerability of vidofludimus calcium versus placebo in RMS patients. Based on vidofludimus calcium’s highly significant activity in preventing lesion formation in our Phase 2 EMPhASIS trial in RMS, the strong and consistent correlation observed between lesion formation and clinical relapse in third-party clinical trials, and the drug’s robust safety profile to date, we believe that this Phase 3 program should provide a relatively simple and straightforward path towards potential regulatory approval of vidofludimus calcium in RMS.

Each of the identical twin Phase 3 trials, titled ENSURE-1 and ENSURE-2, is expected to enroll approximately 1,050 adult patients with active RMS at more than 100 sites in more than 15 countries, including the United States, India and countries in Latin America, Central and Eastern Europe. Patients will be randomized in a double-blinded fashion to either 30 mg daily doses of vidofludimus calcium or placebo and the primary endpoint for both trials is time to first relapse up to 72 weeks. Key secondary endpoints include volume of new T2-lesions, time to confirmed disability progression, time to sustained clinically relevant changes in cognition, and percentage of whole brain volume change. With regard to the disability progression endpoint, the ENSURE program will apply a pooled analysis of disability worsening across both trials.

The ENSURE trials will be run concurrently. The first patient in ENSURE-1 was enrolled in November 2021. The first patient in ENSURE-2 was enrolled in January 2022. An interim analysis to assess event rates is planned to occur after a certain number of relapses have occurred in the double-blind treatment periods. This analysis is intended to inform potential sample size adjustment and help ensure that final study readout is not planned to occur before sufficient events have been achieved. This interim analysis will also allow for a non-binding futility analysis.

Phase 2 Program of Vidofludimus Calcium in PMS (CALLIPER Trial)

On July 1, 2021, we announced that the FDA also cleared our separate IND application for the supportive Phase 2 CALLIPER trial of vidofludimus calcium in patients with PMS. The first patient was enrolled in September 2021.

The multicenter, randomized, double-blind, placebo-controlled Phase 2 CALLIPER trial in PMS is intended to run concurrently with and to complement the Phase 3 program in RMS. In particular, CALLIPER is focused on progressive forms of multiple sclerosis (“MS”) and is designed to corroborate vidofludimus calcium’s neuroprotective potential, as exemplified by slowing of brain atrophy and delay in disability worsening. Neurodegeneration is a key concern in both PMS and RMS, since axonal and neural damage is responsible for the increasing and often severe disability experienced by patients. We believe that, if the CALLIPER trial is successful in showing a beneficial effect of vidofludimus calcium, this data, along with the ENSURE program and vidofludimus calcium’s strong safety and tolerability profile, may allow for a meaningful clinical differentiation of vidofludimus calcium from other oral MS medications and a potentially attractive commercial positioning. Although a supportive trial, we do not believe that data from the CALLIPER trial are a pre-condition for filing a New Drug Application (“NDA”) in RMS. Additional clinical studies and the potential regulatory path forward specific to the treatment of PMS will be informed by the results of the CALLIPER trial and will be further assessed accordingly.

The Phase 2 CALLIPER trial is expected to enroll approximately 450 patients with PMS at more than 70 sites in North America, Western, Central and Eastern Europe with patients randomized to either 45 mg daily doses of vidofludimus calcium or placebo in a double-blinded fashion. The trial’s primary endpoint is the annualized rate of percent brain volume change up to 120 weeks. Key secondary endpoints include the annualized rate of change in whole brain atrophy and time to 24-week confirmed disability progression based on the expanded disability status scale which may further support disability data from the ENSURE trials.

An interim analysis comprising an unblinded analysis of serum neurofilament light chain (“NfL”) is planned to occur once approximately half of the enrolled patients have completed 24 weeks of treatment. NfL has been shown in third-party research to consistently correlate with disease activity in neurodegenerative disorders and has become one of the most important serum biomarkers for axonal damage over the past few years. As previously reported, results of the Phase 2 EMPhASIS trial of vidofludimus calcium in RRMS showed a robust decrease in serum NfL at 24 weeks (-17.0% for 30 mg and -20.5% for 45 mg), as compared to baseline values, while the patients on placebo experienced a 6.5% increase in serum NfL over the same period.

Phase 2 Trial of Vidofludimus Calcium in UC (CALDOSE-1 Trial)

On October 28, 2021, we announced completion of enrollment of our Phase 2 CALDOSE-1 trial of vidofludimus calcium in UC. At completion of patient recruitment, the trial has randomized a total of 263 patients into four arms: three active dosing arms of 10 mg, 30 mg and 45 mg, as well as placebo. Top-line data for the induction phase are expected to be available in June of 2022.

On February 18, 2022, we announced the main blinded baseline characteristics of the CALDOSE-1 trial, including:

•263 moderate-to-severe UC patients were enrolled in 78 study sites with the Ukraine and Poland representing the countries with highest number of patients and U.S. sites contributing 12.5% of the overall enrollment.

•Of the 263 patients, 148 (56.3%) were male and 115 (43.7%) were female patients. The mean age at baseline was 41.7 (18-77) years.

•All patients had to have failed at least one prior therapy option. Of the 263 patients, 83% were biologically naïve and 17% were biologically experienced (received at least 1 prior treatment with any biological agent approved in the UC indication).

•Enrolled patients had to show evidence of active moderate-to-severe UC disease. This is reflected in their baseline characteristics for patient-reported outcomes:

◦The baseline Mayo stool frequency scores were: (i) score of 3 for 59% of patients, (ii) score of 2 for 36% patients and (iii) score of 1 for 5% of patients.

◦The Mayo rectal bleeding scores were: (i) score of 3 in 10% of patients, (ii) score of 2 for 54% of patients and (iii) score of 1 for 31% of patients.

◦The average value for fecal calprotectin at baseline was approximately 1,320 μg/g for currently available, yet incomplete data.

•The trial employed a central independent reader to evaluate the endoscopic eligibility criteria and the following modified Mayo endoscopic scores were assessed at baseline:

◦55% of patients with a score of 3; and

◦45% of patients with a score of 2.

•At week 10 (the time point of the primary efficacy analysis), an adjudication procedure was used for endoscopy assessments. In the case of disagreement between two independent readers, a third independent reader was used for adjudication.

We believe that these blinded baseline characteristics of randomized patients and the methodology regarding endoscopic assessments contributes to ensuring an optimized study read-out.

Phase 2 Trial of Vidofludimus Calcium in PSC

On February 18, 2021, we announced positive top-line data from our investigator-sponsored proof-of-concept clinical trial of vidofludimus calcium in PSC, which was conducted at Mayo Clinic in Arizona and Minnesota, both of which are tertiary referral centers for PSC patients. As the next step in this indication, we are currently conducting a Phase 1 trial in hepatic impaired patients in order to explore dose optimization of vidofludimus calcium for potential future clinical activities in PSC. This Phase 1 trial started in September 2021 and is expected to run approximately six months.

IMU-935

Phase 1 Clinical Trial of IMU-935 in Healthy Human Subjects and Moderate to Severe Psoriasis Patients

On July 12, 2021, we provided an update on our IMU-935 program, including new preclinical and clinical data. The main result from preclinical investigations was that IMU-935 inhibits cytokine production (thought to be a pre-condition for its use in immunological and autoimmune diseases) while maintaining the known and required physiological functions of maturing T lymphocytes. In ex vivo mouse cell differentiation and maturation assays, IMU-935 was recently observed to selectively inhibit RORγt-dependent gene expression during Th17 differentiation without affecting either RORγt-dependent gene regulation relevant to thymocyte development, or the viability of these cells. In third-party research, impairment of thymocyte development has been shown to be associated with serious safety issues, including, among others, T cell malfunction and potential lymphoma formation. We believe that IMU-935's observed selectivity may enable it to inhibit both the generation of Th17 cells and the production of IL-17 cytokines that are responsible for the development of autoimmune diseases, without impairing thymocyte development, which is associated with the potential risk of lymphoma seen with other, third-party RORγt programs.

On December 14, 2021, we provided an update on the preclinical and clinical development of IMU-935, announcing that:

•Unblinded data from the single ascending dose part of the ongoing phase 1 clinical trial of a new powder-in-capsule formulation of IMU-935, in which healthy human subjects were treated with 100 mg, 200 mg, 300 mg and 400 mg of this new formulation or placebo, found these single ascending daily doses of IMU-935 to be safe and well-tolerated, and no maximum tolerated dose was reached. No serious adverse events occurred. A dose-proportional pharmacokinetic profile was observed across the investigated dose range.

•Unblinded data from the multiple ascending dose part of the ongoing phase 1 clinical trial, in which healthy human subjects were dosed for 14 days with 150 mg either once or twice daily doses of IMU-935 or placebo, found these multiple ascending doses of IMU-935 to be safe and well-tolerated, and no maximum tolerated dose was reached. Treatment emergent adverse events were generally mild in severity, with moderate treatment emergent adverse events reported in one of eleven IMU-935 treated subjects, compared with one of four subjects on placebo. No serious adverse events were reported. No dose-dependent changes in laboratory values (including no effects on liver enzymes or in hematological parameters), vital signs or in electrocardiographic evaluations were found. Pharmacokinetic analysis showed that stable steady-state plasma concentrations were achieved within the first week of dosing with an accumulation factor for IMU-935 allowing predictable trough levels during daily dosing.

•Based on the favorable safety and tolerability data observed in healthy human subjects, our phase 1 clinical trial of IMU-935 was expanded in October 2021 to include a third portion, part C, in which moderate to severe psoriasis patients are to be randomized to 28-day treatment of IMU-935 or placebo. Planned assessments include safety, tolerability, pharmacokinetic and pharmacodynamic markers, as well as skin evaluations. Recruitment of part C depends on several external factors which are not under our direct control, including, in particular, the relatively restrictive COVID-19-related rules in effect in Australia and New Zealand. This situation has and may further influence our ability to enroll study participants and/or perform on-site monitoring at clinical sites in those locations. In light of this, we have already initiated remedial measures, including the potential addition of sites outside of Australia and New Zealand, for the ongoing part C of IMU-935 in psoriasis patients. As a result, initial results from the third portion of the Phase 1 clinical trial in patients with moderate-to-severe psoriasis are now expected to be available in the second half of 2022, instead of at the end of the second quarter of 2022, as previously announced.

•In previous preclinical in vitro data, it was shown that IMU-935 selectively inhibits Th17 differentiation and IL-17 production, whereas RORγt was unaffected by IMU-935 during thymocyte maturation and, therefore, does not harm normal thymocyte maturation. Newly obtained data from acute and chronic treatment of mice corroborated in vivo that IMU-935 is the first molecule observed to impact neither thymus size, thymocyte numbers, nor the maturation status of thymocytes, in contrast to two other known inhibitors of RORγt.

Phase 1 Clinical Trial of IMU-935 in mCRPC

On July 12, 2021, we also presented new preclinical data highlighting IMU-935's therapeutic potential in CRPC. Recently published third-party studies have shown that RORγ plays an important pro-tumor role by driving expression of the androgen receptor (“AR”), leading to tumor growth. During tumor progression, AR tends to mutate into AR-V7, leading to resistance of AR-axis-targeted therapies. In preclinical studies, IMU-935 was observed to inhibit the expression of mutated AR-V7, and the tumor growth of prostate cancer cell lines in vitro. Finally, we believe IMU-935's potency in inhibiting tumorigenesis-promoting IL-17 and Th17 cells in vitro may result in further antitumoral activity in humans.

Based on these strong preclinical results, we have initiated an open-label Phase 1 dose-escalation trial designed to evaluate the safety and tolerability of increasing doses of IMU-935 to establish the maximum tolerated dose and the recommended phase 2 dose. The trial will also evaluate the anti-tumor activity of IMU-935 by means of prostate-specific antigen levels, circulating tumor cell numbers, and radiographic response assessments of tumor progression. The trial’s Principal Investigator is Johann Sebastian de Bono, MD, PhD, Regius Professor of Cancer Research and Professor in Experimental Cancer Medicine, The Institute of Cancer Research, London, and The Royal Marsden NHS Foundation Trust, London, United Kingdom. The trial was approved by the Medicines and Healthcare products Regulatory Agency (MHRA), the Research Ethics Committee (REC) and the Health Research Authority (HRA) in the United Kingdom. The first patient was enrolled in December 2021. Initial clinical safety data are expected to be available in the third quarter of 2022.

IMU-856

Phase 1 Clinical Trial of IMU-856

A Phase 1 clinical trial of IMU-856 is ongoing and progressing in Australia. The trial includes single and multiple ascending dose parts in healthy human subjects designed to assess safety, pharmacodynamics and pharmacokinetics of IMU-856. All planned single ascending dose cohorts for the current tablet formulation of IMU-856 have been completed but have not yet been unblinded. Based on the favorable data available so far, the Ethics Committee in Australia has agreed to proceed to the multiple ascending dose part which is currently being dosed. Unblinded safety data from the single and multiple ascending dose parts in healthy human subjects are expected to be available in the third quarter of 2022.

We also plan to extend this trial to assess biomarkers, disease symptoms, safety and drug trough levels in patients with a model disease of altered intestinal barrier function to provide initial activity data. Initiation of this third portion of the Phase 1 clinical trial is expected in the first half of 2022.

Product Acquisition History

Our wholly-owned subsidiary Immunic AG acquired IMU-838 and IMU-935 in September 2016 through asset acquisitions from 4SC AG (hereinafter, “4SC”), a publicly traded company based in Planegg-Martinsried, Germany. On March

31, 2021, Immunic AG and 4SC entered into a Settlement Agreement, pursuant to which Immunic AG settled its remaining obligation of a 4.4% royalty on net sales for $17.25 million. The payment was made 50% in cash and 50% in shares of Immunic’s common stock.

Our rights to IMU-856 are secured pursuant to an option and license agreement (the “Daiichi Sankyo Option”) with Daiichi Sankyo Co., Ltd. (hereinafter, "Daiichi Sankyo") in Tokyo, Japan. On January 5, 2020, Immunic AG exercised its option under the Daiichi Sankyo Option to acquire the exclusive global rights to commercialize IMU-856. The license also grants Immunic AG the rights to Daiichi Sankyo’s patent application related to IMU-856. Concurrent with the option exercise, Immunic AG paid to Daiichi Sankyo a one-time upfront licensing fee. Going forward, Daiichi Sankyo is eligible to receive future development, regulatory and sales milestone payments, as well as royalties related to IMU-856.

Leadership

We are led by a team of dedicated and committed experienced professionals with an entrepreneurial spirit and track record of successful licensing transactions in the healthcare industry worldwide (EU, the United States and Asia). The team brings together several decades of leadership experience in the pharmaceutical industry with a strong scientific background and sound knowledge in drug discovery, product development, chemistry, manufacturing and controls processes, intellectual property, clinical trial design, health economics and market access, merger and acquisitions, capital markets, corporate finance, business development, regulatory affairs and project valuation. Our team members are inventors on project-related patents and have successfully published project-related scientific publications.

Product Candidates

Vidofludimus Calcium (IMU-838)

Vidofludimus calcium is a small molecule investigational drug in development as an oral tablet formulation for the treatment of RMS, IBD and other chronic inflammatory and autoimmune diseases. By inhibiting DHODH, a key enzyme of pyrimidine de novo biosynthesis, highly metabolically activated T and B immune cells experience metabolic stress, which leads to a modulation of their activity and function. Thereby, pro-inflammatory cytokines, such as interferon gamma (“IFNγ”), tumor necrosis factor alpha (“TNFα”), IL-17A and IL-17F, produced by activated Th1 and Th17 cells, which represent subtypes of so-called T helper cells, are repressed and thereby reduce the inflammation associated with IBD, MS and other chronic inflammatory diseases.

In preclinical studies of vidofludimus, the active moiety and free acid form of vidofludimus calcium, apoptosis (or programmed cell death) was induced in activated T cells, which we believee may also play a crucial role in the activity of the drug in IBD by further dampening the inflammatory response. We believe that a key advantage of DHODH inhibition, in general, is that the sensitivity of specific immune cells to DHODH inhibition correlates with their intracellular metabolic activation state, and therefore may not negatively impact “normal” immune and bone marrow cells. In animal studies of vidofludimus calcium, animals treated with large doses of the active moiety of vidofludimus calcium were shown to lack detrimental effects on bone marrow, supporting the lack of an unspecific anti-proliferative effect regularly seen with many traditional immunomodulators.

Based on the selectivity toward metabolically activated cells (with a high need for ribonucleic acid and deoxyribonucleic acid production), DHODH inhibition also leads to a direct antiviral effect, which has been observed in various virus infected cells, such as Epstein-Barr virus (“EBV”) infections, hepatitis C virus infections, severe acute respiratory syndrome coronavirus 2 (“SARS-CoV-2”) infections, cytomegalovirus infections and even hemorrhagic fever-causing viruses, such as Arena virus infections. Treatment with vidofludimus calcium may avoid virus infections and reactivations, one of the major drawbacks of the long-term use of traditional immunomodulators in IBD and MS patients. Recently, we presented preclinical data demonstrating the activity of vidofludimus calcium to prevent the reactivation of latent EBV infection into lytic infection

(Marschall et al. 2021). This mechanism may lead to reduce the regular cycle of reactivations and reinfections in the medium term, and thus the latent persistent EBV infection in patients in the long term.

Efficacy of vidofludimus has been observed in several animal disease models for IBD, MS, as well as systemic lupus erythematosus and transplant rejection. Previous filings by us with the SEC have summarized the development history of vidofludimus and the previous amorphous formulation of the free acid form of vidofludimus. After the consummation of the asset acquisition from 4SC, Immunic developed and filed a patent application for a new specific polymorph of the calcium salt formulation of vidofludimus, vidofludimus calcium, which we believe exhibits improved physicochemical and pharmacokinetic properties. In 2017, we completed two Phase 1 studies of single or repeated once-daily doses of vidofludimus calcium in

healthy volunteers, where we observed results supporting tolerability of repeated daily dosing of up to 50 mg of vidofludimus calcium.

Indication: Multiple Sclerosis

Diagnosis and Prevalence

MS is an autoimmune disease that affects the brain, spinal cord and optic nerve. In MS, myelin, the coating that protects the nerves, is attacked and damaged by the immune system. Thus, MS is considered an immune-mediated demyelinating disease of the central nervous system ("CNS"). MS is a progressive disease which, without effective treatment, leads to severe disability. We are developing vidofludimus calcium for the treatment of RRMS, the most common form of MS. Approximately 85% of patients with MS are expected to develop RRMS, with some of these patients later developing more progressive forms of the disease. RRMS is characterized by clearly defined attacks of new or increasing neurologic symptoms. These relapses are followed by periods of remissions, or partial or complete recovery. During remissions, all symptoms may disappear, or some symptoms may continue and become permanent.

MS is a disease with unpredictable symptoms that can vary widely. Common early signs of MS include vision problems, tingling and numbness or other unspecific neurological symptoms. Diagnosis of MS is confirmed via blood tests and a spinal tap, in which a small sample of fluid is removed from the spinal cord. However, most important for diagnosis are characteristic CNS lesions found using magnetic resonance imaging ("MRI").

According to DRG (Market Forecast Dashboard, Multiple Sclerosis (2020-2030), December 2021), MS affects more than 500,000 people in the United States, and more than 1.1 million people in the G7 countries (US, UK, Canada, Japan, Germany, France, Italy). The disease has a large economic impact as it affects mainly young adults in the prime working age, peaking around 30 years old, although MS can occur in children and in adults. MS is up to three times more common in women than in men. MS affects twice as many women and men in certain age cohorts and is more common in areas inhabited by people of northern European ancestry, such as Europe, the United States, Canada, New Zealand and parts of Australia.

A recent publication shed new light on the role of infection with the EBV previously postulated to trigger MS. Bjornevik et al. (2022) analyzed EBV antibodies in serum from 801 individuals who developed MS among a cohort of more than 10 million people active in the US military over a 20-year period (1993 to 2013). Risk of MS increased 32-fold after infection with EBV but was not increased after infection with other viruses, including the similarly transmitted cytomegalovirus. Serum levels of neurofilament light chain, a biomarker of axonal damage, increased only after EBV seroconversion. These findings cannot be explained by any known risk factor for MS and suggest EBV as the leading cause of MS. In addition, antibody producing cells directed against the latent EBV protein EBNA1 were found in the CSF of MS patients. Cross reactivity of anti-EBNA1 antibodies against GlialCAM, a protein that is predominantly expressed in glial cells in the CNS and potentially important in the myelination process of axons, further corroborates the connection between EBV infections and pathologic processes in MS (Lanz et al. 2022).

Current Treatment Options

There are currently two main treatment types available for RRMS. Some therapies, such as short-term corticosteroid medications, are used for treating relapses of MS symptoms. Other approaches are used as long-term treatments to reduce the number of relapses and prevent disability progression. The latter are referred to as disease-modifying therapies. We intend to develop vidofludimus calcium as a disease-modifying therapy for RRMS.

The initial treatment options for RRMS patients are often beta interferons (either as interferon beta-1a or interferon beta-1b) or glatiramer acetate, all of which are given by injection. For patients requiring more advanced treatment options, there are several oral medications, such as dimethyl fumarate, fingolimod, siponimod, teriflunomide, ozanimod or cladribine, and biologics, such as natalizumab, ocrelizumab, ofatumumab or alemtuzumab, approved for commercial use in MS in various countries. In addition, some of these drugs already have generic versions available in some countries and other drugs will become generic in the next years.

There is no specific guidance on which therapies or medications are used in which sequence of the MS disease course. Typically, treatments are escalated over time, considering:

•Persistent high MS disease activity under treatment with base medications (relapse(s), disability worsening, MRI lesions),

•Risks of long-term immunosuppression,

•Patient preferences or risks perceptions, and

•Safety/tolerability aspects.

Many drugs approved for patients with RRMS suppress the immune system, either broadly or by targeting classes of immune cells, altering how the immune system functions and fights certain infections. As a result, people who take these therapies are at higher risk for John Cunningham virus infection or re-activation, which is believed to be the cause of a rare and often lethal viral disease of the brain called progressive multifocal leukoencephalopathy ("PML"). To date, occurrences of PML have been reported in individuals with RRMS treated with natalizumab, dimethyl fumarate and fingolimod. No case of PML has yet been reported for the DHODH inhibitor teriflunomide, which has been one of the key differentiators of teriflunomide from other disease-modifying therapies in RRMS. The active moiety of vidofludimus calcium has also shown direct antiviral effects in several models of virus-infected cells, which we believe is caused by DHODH inhibition. Subject to further clinical trials, we believe that this could be a “class effect” of the DHODH inhibitors and if shown, could be an important potential differentiator against other drug classes in RRMS.

Depending on the results of future clinical trials, we believe that vidofludimus calcium has the potential to demonstrate medically important advantages compared with other treatments, particularly for the early treatment of RRMS patients, due to its anti-inflammatory and neuroprotective properties and safety and tolerability profile. Vidofludimus calcium could provide RRMS patients with a distinctive combination of the following properties:

•Targeted effect on hyperactive immune cells without suppression of normal immune function.

•Pronounced MRI lesion suppression of vidofludimus calcium compares favorably to other oral medications commercially available in RRMS.

•Improved rates of disability worsening, particularly in light of the apparent class effect of DHODH inhibition to disproportionally improve disability progression over the long-term.

•Robust decrease in serum neurofilament light chain, a biomarker for axonal damage, was observed for vidofludimus calcium and provides evidence of vidofludimus calcium’s potential neuroprotective activity.

•A very low discontinuation rate for vidofludimus calcium-treated RRMS patients, substantially below placebo, indicates an encouraging combination of tolerability and efficacy as well as maintenance of normal quality-of-life

•Absence of hepatotoxicity signals and other relevant adverse events leading to discontinuations distinguishes vidofludimus calcium well from other oral RRMS treatments.

•Broad spectrum antiviral effect of vidofludimus calcium may support in lowering the rate of viral infections and reactivations, including EBV reactivation, potentially resulting in slowing potential EBV-related neurodegenerative processes.

Current Development Plan and Ongoing Studies

Phase 2 Trial of Vidofludimus Calcium in RRMS (EMPhASIS Trial)

Our Phase 2 EMPhASIS trial of vidofludimus calcium in RRMS consisted of two cohorts: The full data set of Cohort 1, which evaluated efficacy and safety of 30 mg or 45 mg once daily vidofludimus calcium compared to placebo, was published by us in August and September 2020, respectively. Cohort 2, which evaluates efficacy and safety of 10 mg once daily vidofludimus calcium compared to placebo, was meanwhile also completed.

On August 2, 2020, we announced positive top-line data from our Phase 2 EMPhASIS trial of vidofludimus calcium in patients with RRMS. The study achieved statistical significance on all primary and key secondary endpoints, indicating activity in RRMS patients. In particular, the study met its primary endpoint, demonstrating a statistically significant reduction in the cumulative number of combined unique active (“CUA”) magnetic resonance imaging (“MRI”) lesions up to week 24 in patients receiving 45 mg of vidofludimus calcium once daily, by 62% (p=0.0002), as compared to placebo. The study also met its key secondary endpoint, showing a statistically significant reduction in the cumulative number of CUA MRI lesions for the 30 mg once daily dose by 70% (p<0.0001), as compared to placebo. On September 11, 2020, we published the full unblinded clinical data set from our Phase 2 EMPhASIS trial of vidofludimus calcium in patients with RRMS. The data confirmed and expanded on the previously announced top-line results.

On April 15, 2021, we announced interim data from Cohort 2 after 59 randomized patients completed week 12 MRI assessments. We concluded from this data, along with previously published data from Cohort 1, that 30 mg once daily vidofludimus calcium is the most appropriate anti-inflammatory dose for Phase 3 trials in patients with RMS.

Meanwhile, final data from Cohort 2 are also available showing that the anti-inflammatory effects of vidofludimus calcium at the 10 mg dose were observed to be lower (13% reduction of gadolinium-enhancing magnetic resonance imaging lesions up to 24 weeks, as compared to placebo) than those found with the 30 mg vidofludimus calcium dose in the pooled Cohort 1 and 2 data (78% reduction), providing further support for the selection of 30 mg dosing in the ongoing ENSURE trials in RMS. Final Cohort 2 data also provide evidence of dose-proportional neuroprotective activity. For instance, the highest decrease of the biomarker serum neurofilament light chain was observed with the 45 mg dose of vidofludimus calcium versus placebo (-26.0% median of differences between percentage change of serum neurofilament, Hodges-Lehmann estimation), a substantial decrease was seen with the 30 mg dose (-18.0%), while the smallest decrease was observed with the 10 mg dose of Cohort 2 (-9.0%). The 10 mg group in Cohort 2 also showed a signal with respect to improvement in Expanded Disability Status Scale (“EDSS”), consistent with those signals seen with the higher doses in Cohort 1, although all of these early signals need to be confirmed in a larger patient population with longer follow-up periods. Taken together, these last two observations suggest that higher doses, such as 45 mg vidofludimus calcium, may be preferred doses for clinical trials in which neuroprotective effects are the main mechanism for improvement, such as in PMS.

While Cohort 1 blinded treatment was completed right before the COVID-19 pandemic started, final Cohort 2 data provide additional evidence that ongoing vidofludimus calcium treatment may reduce the risk of COVID-19 infections, presumably related to its known antiviral activity. In the entire Cohort 2 population of 59 patients, who were enrolled during pandemic conditions, incidental COVID-19 infections in the active treatment group were less frequent (8.5%, n=4/47) than in the placebo group (25.0%, n=3/12). Additionally, we recently obtained new preclinical data underlining that vidofludimus calcium shows potent anti-EBV activity. We also confirmed that vidofludimus calcium can be detected to a noteworthy degree in the cerebrospinal fluid of animals, after oral dosing. We believe that this finding suggests that vidofludimus calcium may be able to act directly within the central nervous system.

We have designed the Phase 3 trials in RMS and the Phase 2 trial in PMS to provide additional insights how vidofludimus calcium may address all aspects of the MS disease, in particular, monitoring of potential neuroprotective effects. The EMPhASIS trial continues as an open-label extension (“OLE”) treatment to obtain long-term safety data in RRMS patients. Currently, more than 200 patients are still on OLE treatment.

Further information regarding our EMPhASIS trial in RRMS can be found on ClinicalTrials.gov under the identifier NCT03846219.

Phase 3 Program of Vidofludimus Calcium in RMS (ENSURE-1 and ENSURE-2 Trials)

On July 1, 2021, we announced FDA clearance of our IND application for the Phase 3 ENSURE program of vidofludimus calcium in patients with RMS. The ENSURE program comprises two identical multicenter, randomized, double-blind Phase 3 trials designed to evaluate the efficacy, safety, and tolerability of vidofludimus calcium versus placebo in RMS patients. Based on vidofludimus calcium’s highly significant activity in preventing lesion formation in our Phase 2 EMPhASIS trial in RMS, the strong and consistent correlation observed between lesion formation and clinical relapse in third-party clinical trials, and the drug’s robust safety profile to date, we believe that this Phase 3 program should provide a relatively simple and straightforward path towards potential regulatory approval of vidofludimus calcium in RMS.

size adjustment and help ensure that final study readout is not planned to occur before sufficient events have been achieved. This interim analysis will also allow for a non-binding futility analysis.

Further information regarding our ENSURE program in RMS can be found on ClinicalTrials.gov under the identifiers NCT05134441 (ENSURE-1) and NCT05201638 (ENSURE-2), respectively.

The execution of clinical Phase 3 trials usually requires the use of a commercial formulation of the investigational drug manufactured at commercially usable quantities. Manufactures under contract with us have developed and produced a roller compactor formulation of vidofludimus calcium (IMU-838-RC) which would allow commercially usable production batches. An Phase 1 bioequivalence study between the previous wet granulation and the new IMU-838-RC formulation of vidofludimus calcium has completed the experimental phase and showed bioequivalence regarding drug exposure curve in blood plasma (area under the curve). A confirmatory relative bioavailability and food effect study demonstrated a high bioavailability of IMU-838-RC tablets as compared to a drinking solution and confirmed the in vitro finding of a complete and fast dissolution profile in human subjects. No food effect on the uptake or elimination of vidofludimus after administration of the IMU-838-RC tablet was observed.

Additional investigations regarding metabolite characterization, metabolic modeling and potential drug-drug interactions, as well as other activities relating to clinical pharmacology are also being finalized at this time in anticipation for presentation to regulatory authorities.

We are currently working with clinical and regulatory advisors to propose a pediatric development plan for vidofludimus calcium in RRMS in the near future.

Phase 2 Program of Vidofludimus Calcium in PMS (CALLIPER Trial)

The multicenter, randomized, double-blind, placebo-controlled Phase 2 CALLIPER trial is intended to run concurrently with and to complement the Phase 3 program in RMS. In particular, CALLIPER is focused on progressive forms of MS and designed to corroborate vidofludimus calcium’s neuroprotective potential, as exemplified by slowing of brain atrophy and delay in disability worsening. Neurodegeneration is a key concern in both PMS and RMS, since axonal and neural damage is responsible for the increasing and often severe disability experienced by patients. We believe that, if the CALLIPER trial is successful in showing a beneficial effect of vidofludimus calcium, this data, along with the ENSURE program and vidofludimus calcium’s strong safety and tolerability profile, may allow for a meaningful clinical differentiation of vidofludimus calcium from other MS medications and potentially attractive commercial positioning. Although a supportive trial, we do not believe that data from the CALLIPER trial are a pre-condition for filing an NDA in RMS. Additional clinical studies and the potential regulatory path forward specific to the treatment of PMS will be informed by the results of the CALLIPER trial and will be further assessed accordingly.

The Phase 2 CALLIPER trial is expected to enroll approximately 450 patients at more than 70 sites in North America, Western, Central and Eastern Europe with patients randomized to either 45 mg daily doses of vidofludimus calcium or placebo in a double-blinded fashion. The trial’s primary endpoint is the annualized rate of percent brain volume change up to 120 weeks. Key secondary endpoints include the annualized rate of change in whole brain atrophy and time to 24-week confirmed disability progression based on the expanded disability status scale which may further support disability data from the ENSURE trials.

An interim analysis comprising an unblinded analysis of serum NfL is planned to occur once approximately half of the enrolled patients have completed 24 weeks of treatment. NfL has been shown in third-party research to consistently correlate with disease activity in neurodegenerative disorders and has become one of the most important serum biomarkers for axonal damage over the past few years. As previously reported, results of the Phase 2 EMPhASIS trial of vidofludimus calcium in RRMS showed a robust decrease in serum NfL at 24 weeks (-17.0% for 30 mg and -20.5% for 45 mg), as compared to baseline values, while the patients on placebo experienced a 6.5% increase in serum NfL over the same period.

Further information regarding our CALLIPER trial in PMS can be found on ClinicalTrials.gov under the identifier NCT05054140.

Indication: Ulcerative Colitis

Diagnosis and Prevalence

UC is a chronic inflammatory disease characterized by diffuse inflammation of the mucosa of the colon and rectum. The hallmark clinical symptoms of UC are diarrhea and bloody stool, and its clinical course is marked by exacerbations and remissions, which may occur spontaneously or in response to treatment changes or intercurrent illnesses.

UC is most commonly diagnosed in late adolescence or early adulthood, but it can occur at any age. The occurrence of UC worldwide has increased over the past few years, particularly in Latin America, Asia and Eastern Europe (Burisch et al. 2015). According to DRG (Market Forecast Dashboard, UC (2020-2030), November 2021), approximately one million patients are affected by UC in the United States, and more than 2.2 million in the G7 countries (US, UK, Canada, Japan, Germany, France, Italy). UC is almost equally distributed between genders (Kappelman et al. 2007).

Current Treatment Options

The severity and extent of UC are characterized based on clinical and endoscopic findings. The treatment approach often depends on disease severity and typically follows a stepwise treatment regimen. Patients with mild disease may initially receive aminosalicylates or non-systemic steroids, such as budesonide. Patients with moderate to severe disease activity may receive traditional immunomodulators (such as azathioprine or 6-mercaptopurine) or steroids (such as prednisone). If patients fail to respond to these therapies, treatment may be escalated to the use of biologics or selective immunomodulators (such as tofacitinib). The most common category of biologics used to treat UC includes TNFα antibody drugs, such as infliximab or adalimumab. New biologic options are alpha-4-beta-7 (α4ß7) integrin-specific antibodies, such as vedolizumab and anti-IL-12/IL-23 antibodies, such as ustekinumab. All biologics currently used to treat UC are injectables. Biologics are usually the most expensive treatment option and reserved for patients who have failed other therapies.

Currently, there are several new oral treatment options for UC patients in advanced clinical development or in regulatory review. Most of them fall into one of the following two categories: sphingosine-1-phosphate (“S1P”) agonists, or Janus kinase (“JAK”) inhibitors. Some of these drug candidates have been or may be approved by regulatory authorities for commercial use before vidofludimus calcium may receive approval. However, depending on the results of future clinical trials, we believes that vidofludimus calcium has the potential to demonstrate medically important advantages compared with other treatments, particularly for long-term therapy in UC patients, due to the selectivity of DHODH targeting of metabolically activated lymphocytes, the absence of general detrimental effects on bone marrow and the immune system, its safety and tolerability profile and the direct antiviral activity.

Treatment of UC is differentiated between induction treatment (during periods of disease symptoms or following relapse) and maintenance treatment (often a long-term treatment to keep a patient relapse-free). Since UC patients ultimately fail to respond to treatments, cease to respond to their treatments or develop unacceptable side effects, there is a need for safe and effective treatments for UC with novel mechanisms. Additionally, patients often prefer the convenience of oral treatments over injections. For some of the currently available oral immunomodulators or those in clinical testing, a higher rate of infections (particularly virus re-activations) have been reported versus placebo control, which can be a medically significant event for patients.

Vidofludimus calcium is being developed to be a new treatment option for patients with moderate to severe UC who are candidates for therapy escalation. As a potentially highly selective, first-in-class oral therapy, vidofludimus calcium has the potential to become a new standard of care in the treatment armamentarium for patients with moderate to severe UC. This potential is supported by the following properties of vidofludimus calcium:

•Targeted effect on hyperactive immune cells without suppression of normal immune function.

•First-in-class mode of action targeting relevant immune cell populations not currently addressed by existing therapeutic options, particularly in patients who are not sufficiently responsive to available therapies.

•Potential best-in-class safety and tolerability profile, as has been observed to date across the full scope of clinical trials for vidofludimus calcium.

•Potential for combination treatment with established biologics through synergistic effects.

•Increased flexibility for dosing and administration outside of infusion centers.

•Long-term treatment potential with small molecule approach, avoiding the decreasing responsiveness shown with existing antibody treatments as a result of anti-drug antibody development.

•Antiviral effects that potentially avoid virus reactivations which is known to be connected to several currently approved medications in UC.

Clinical Development Plan and Ongoing/Planned Clinical Studies

Before commencing clinical development in IBD, including UC, we had developed a clinical development plan in collaboration with a group of well-known and experienced physicians from North America and Europe, and had received formal regulatory advice for our Phase 2 development program from the FDA.

Phase 2 Trial of Vidofludimus Calcium in UC (CALDOSE-1 Trial)

The CALDOSE-1 trial of vidofludimus calcium in moderate to severe UC is a Phase 2b, dose-finding, multicenter, double-blind, placebo-controlled study including a blinded induction and maintenance phase, with double randomization (initial randomization for induction and second randomization for maintenance). The trial also includes an option for an open-label treatment extension for patients discontinuing from or completing blinded treatment. The primary endpoint comprises a composite of patient-reported outcome and endoscopy-assessed outcome, both evaluated following ten weeks of induction treatment with vidofludimus calcium or placebo. We have an active IND application for vidofludimus calcium in UC with the FDA.

CALDOSE-1 is being conducted at more than 100 sites in 19 countries, including the United States and Western, Central and Eastern Europe. Enrollment in the study includes a central, blinded and independent assessment of endoscopy at screening to confirm patient eligibility. We believe that it has taken prudent steps to ensure that the study is conducted in a manner that is consistent with the study protocol in all countries in which the study is being conducted, even though such countries have varying healthcare systems and practices. This includes an endoscopy-based patient eligibility assessment by a central independent reader and a multiple read and potential adjudication process for week 10 endoscopy when the primary study endpoint is assessed.

On October 28, 2021, we announced that the final patient has been enrolled and randomized in the CALDOSE-1 trial. At the completion of patient recruitment, the trial has randomized a total of 263 patients into four arms: three active dosing arms of 10 mg, 30 mg and 45 mg, as well as placebo. Top-line data for the induction phase are expected to be available in June of 2022.

Under an agreement between us and the FDA, reached during our pre-IND meeting in 2017, the UC Phase 2b trial was designed to begin enrollment with three active dosing arms of 10 mg, 30 mg and 45 mg, respectively, in addition to a placebo arm. At the end of August 2019, an interim dosing analysis was performed by an unblinded and independent data review committee, which has concluded that the lowest dose of 10 mg appeared not to be likely ineffective, the highest dose of 45 mg was not intolerable, and no safety signal was identified for any of the trial’s three doses of vidofludimus calcium. The data review committee has not shared with us any of the unblinded data underlying these conclusions, and the study remains blinded to us, the investigators and the enrolled patients. The interim dosing analysis was not designed to be a futility analysis nor was the primary endpoint or any other endpoint of the study tested statistically. As a result of these findings, the trial’s steering committee has recommended continuation of all three dosing arms, which recommendation was implemented by us. Expansion of vidofludimus calcium’s potentially effective dose range required continuation of all three dose groups and increased the overall number of patients expected to be included in the ongoing trial from a previously anticipated 195 patients, to a total of 240 patients.

Further information regarding our CALDOSE-1 trial in UC can be found on ClinicalTrials.gov under the identifier NCT03341962.

Indication: Crohn’s Disease

Diagnosis and Prevalence

CD is an idiopathic chronic inflammatory disease of unknown etiology with genetic, immunologic and environmental influences. Like UC, it is one of the major diseases that are generally characterized as IBD. Both UC and CD are caused by chronic inflammation in the gastrointestinal ("GI") tract, but CD can involve the entire GI tract, from the mouth to the anus (but it most commonly involves both the large and small intestines), whereas UC is restricted to the colon and rectum. Distinguishing CD from UC can be challenging when inflammation is confined to the colon. CD typically involves all layers of

the bowel wall, thereby causing complications, such as abscesses, strictures and fistulas, that regularly require surgical intervention.

Hallmark clinical symptoms of CD are chronic diarrhea and abdominal pain. However, the diagnosing physician needs to evaluate laboratory tests, endoscopy results, pathology findings and radiographic tests to arrive at a clinical diagnosis of CD. In general, it is the presence of chronic intestinal inflammation that leads to a diagnosis of CD.

CD is most commonly diagnosed in late adolescence or early adulthood, but it can manifest at any age. According to DRG (Market Forecast Dashboard, Crohn’s Disease (2020-2030), December 2021), more than 900,000 patients are affected by CD in the United States, and more than 1.7 million in the G7 countries (US, UK, Canada, Japan, Germany, France, Italy). CD is slightly more prevalent in women than in men.

Current Treatment Options

Treatment of CD is similar to treatment of UC. However, some of the therapies available for UC (such as tofacitinib) have shown varying levels of activity in CD. Conversely, and based on the treatment needs of patients with CD, some drugs have been primarily developed for CD. One such example is the biologic ustekinumab, an antibody directed against IL-12 and IL-23. There are now some approved treatments, such as alofisel, that target the specific structural complications of CD, including fistulas.

Leflunomide is used off-label in patients with CD and has shown an initial suggestion of the possible value of DHODH inhibition in this patient population (Holtmann et al. 2008, Prajapati et al. 2003). In two small investigator trials of leflunomide in CD patients, investigators observed DHODH inhibitor activity in the treatment of moderate to severe CD in patients who have failed or are intolerant to traditional immunomodulator therapy. However, the side effect profile of leflunomide included diarrhea. The prescribing information for teriflunomide, leflunomide’s active metabolite, lists a 15-18% rate of diarrhea, which makes it one of the most prevalent side effects of this DHODH inhibitor. We believe that despite the findings of efficacy for leflunomide in the investigator trials in CD patients, the side effect profile makes it unlikely that this type of DHODH inhibitor can be developed in the indication of IBD, and particularly in CD.

Current Development Plan and Ongoing Studies

We are considering our development strategy for vidofludimus calcium for the treatment of CD. During the previously noted discussions with the FDA regarding our UC trial, we and the FDA reached agreement that a clinical trial of vidofludimus calcium in CD could commence when the interim dosing analysis for the Phase 2b CALDOSE-1 trial in UC has been completed. This would allow us to execute its development of vidofludimus calcium in CD with the remaining active dose groups from CALDOSE-1 and placebo, thereby potentially allowing more efficient recruitment into this trial. We had also received additional written advice from the FDA regarding patient-reported outcomes to be used in this trial, called CALDOSE-2. Given the outcome of the interim dosing analysis of the CALDOSE-1 trial, we are currently re-evaluating the trial design in CD and also prefers to evaluate the upcoming CALDOSE-1 results prior to the start of a potential CALDOSE-2 clinical trial. In addition, we are evaluating the optimal time for efficiently executing such study following the COVID-19 pandemic.

Indication: Primary Sclerosing Cholangitis

We are also exploring the use of vidofludimus calcium in orphan diseases that may allow for an accelerated path to commercialization. We are exploring such orphan diseases in conjunction with interested investigators.

Diagnosis and Prevalence

PSC is a rare liver disease in which the bile ducts in the liver become inflamed, narrow and prevent bile from flowing properly. According to Toy et al. (2011), PSC has a prevalence of approximately 4.15 per 100,000 in the United States. The exact cause and disease mechanism of PSC are still unknown, but an autoimmune mechanism may play a role. According to Singh et al. (2013), there is an association with IBD, most often with UC and less commonly with CD. Progressive biliary and hepatic damage results in portal hypertension and hepatic failure in a significant majority of patients over a 10-15 year period from initial diagnosis.

Current Treatment Options

Treatment of PSC is supportive, with a focus on monitoring the disease progression and treating symptoms and complications as they arise. The only substantial treatment is liver transplantation, which may be an option when the disease progresses to cirrhosis and liver function is significantly affected. When some of the larger bile ducts become blocked in patients with PSC, one potential is to open them with endoscopy-based methods, balloon dilatation or stent placement. No medication is currently approved to treat PSC, but medications may be used to control symptoms. Although many trials have failed to meet their endpoints in PSC, there are now a few studies for medications (such as obeticholic acid) that have shown limited activity in PSC.

Current Development Plan and Ongoing Studies

We have entered into a collaboration with investigators at the Mayo Clinic to explore the use of vidofludimus calcium in PSC. An investigator-sponsored proof-of-concept clinical trial of vidofludimus calcium in PSC, for which we provided the study medication, was conducted at the Mayo Clinic in Arizona and Minnesota, both of which are tertiary referral centers for PSC patients. The study was led by Elizabeth Carey, M.D., Professor of Medicine, Division of Gastroenterology and Hepatology, Department of Internal Medicine, Mayo Clinic, who had received Investigator IND approval from the FDA and had been granted Institutional Review Board ("IRB") approval to conduct the study. The study was supported by a grant from the National Institutes of Health (“NIH”).

The study planned to enroll 30 patients with PSC, aged 18 to 75 years, who received 30 mg of vidofludimus calcium once daily for a period of 24 weeks. Enrollment for the study took place between July 2019 and September 2020, but almost all enrollment occurred in 2019 and early 2020. During the COVID-19 pandemic, recruitment for this study was hampered, as patients with PSC are at a high risk of COVID-19 infections and were advised to avoid travel and unnecessary social contacts such as those required to participate in a clinical trial. Together with the investigators, we determined to readout data of the 18 patients who were enrolled prior to the COVID-19 pandemic. The ongoing pandemic situation also triggered the principal investigator’s decision to terminate the study in late 2020, before the intended recruitment goal of 30 patients was reached.

On February 18, 2021, we announced positive top-line data from the study which was designed to investigate vidofludimus calcium's potential to improve various biochemical parameters in PSC patients and help determine whether any such activity warrants further investigation randomized PSC trials. 18 of the targeted 30 patients were enrolled in the study (intent-to-treat population, “ITT”), of whom only 11 patients completed the full vidofludimus calcium treatment course and were evaluable over the 24-week treatment period (per-protocol population, “PP”).

The primary objective of this study was to determine whether vidofludimus calcium reduces serum alkaline phosphatase (“ALP”) in adult patients diagnosed with PSC. The main analysis for the primary objective was whether patients could achieve a reduction of ALP at week 24 which is greater or equal to 25%, as compared to baseline, with an AST increase at week 24 of no more than 33%, as compared to baseline. This positive primary outcome was achieved by 3 of 11 patients in the PP population (27.3%, 95% CI: 6-61%). By virtue of inclusion criteria, patients at baseline had to have an elevated ALP value of at least 1.5 times the upper limit of normal. In addition, time from baseline was calculated as a continuous variable and treated as the primary predictor using a random intercept model which was adjusted for age at baseline and gender. For this longitudinal analysis of ALP from baseline to week 24 in the PP population, the ALP value statistically significantly (p=0.041) decreased by an average of 5.76 IU/L every 30 days (95% CI: -11.29, -0.23; statistical model). The time trend was not statistically significant in the ITT analysis (p=0.578) due to missing data following the high rate of treatment discontinuations during the COVID-19 pandemic. A consistent individual pattern of a stable decrease in ALP values was observed in the PP population between baseline and week 24, without any single patient showing an increase of more than 20% of ALP.

Secondary objectives were to investigate the liver biochemistry parameters, AST, ALT, and total/direct/indirect bilirubin, as well as the concentrations of proinflammatory cytokines, as compared to baseline. The longitudinal analysis of both AST and ALT as well as total, direct and indirect bilirubin values showed a stable pattern in the PP population with no statistically significant change over time and the confidence interval to include the no-change scenario (AST: average 30 day change 1.22 IU/L, 95% CI: -0.53, 2.97, p=0.170; ALT: average 30 day change 0.85 IU/L, 95% CI -1.46, 3.15, p=0.467, total bilirubin: average 30 day change 0.00 mg/dL, 95% CI -0.01, 0.02, p=0.561, direct bilirubin: average 30 day change 0.00 mg/dL, 95% CI -0.01, 0.01, p=0.861, indirect bilirubin: average 30 day change 0.00 mg/dL, 95% CI -0.01, 0.01, p=0.556). Similar results were found in the ITT population. In addition, a decrease in the Ulcerative Colitis Clinical Score was observed in evaluated patients, although the number of assessed patients was limited. The study also found that vidofludimus calcium is a safe and well-tolerated oral drug for PSC patients and treatment-emergent adverse events were rare and generally mild.

Further information regarding the PSC study can be found on ClinicalTrials.gov under the identifier NCT03722576.

As the next step in this indication, we are currently conducting a Phase 1 trial in hepatic impaired patients in order to explore dose optimization of vidofludimus calcium for potential future clinical activities in PSC. This Phase 1 trial has started in September 2021 and is expected to run approximately six months.

Indication: COVID-19

Diagnosis and Prevalence

The World Health Organization (“WHO”) declared SARS-CoV-2 infections causing COVID-19 a pandemic on March 11, 2020. Main clinical symptoms include fever, cough, myalgia or fatigue, expectoration, and dyspnea, but a range of other symptoms have been connected to COVID-19 as well. The symptoms of COVID-19 typically appear within 3 to 14 days after initial exposure to SARS-CoV-2. If any patient develops characteristic symptoms of COVID-19 or was exposed to a person with COVID-19, infection with SARS-CoV-2 leading to COVID-19 has to be considered.

As there are no specific clinical features that can reliably distinguish COVID-19 from other viral respiratory infections, the patient will then need to undergo specific testing for SARS-CoV-2. Although several testing methods have been developed, polymerase chain reaction testing remains the primary and most reliable COVID-19 diagnostic testing method in the United States and in most developed countries. Generally, a sample from the nose (nasopharyngeal swab) or throat (throat swab) is taken and then sent to a laboratory for testing.

Current Treatment Options

As of January 2022, at least three vaccines have been authorized and recommended by the FDA for preventing COVID-19:

•Pfizer-BioNTech's COVID-19 vaccine (Comirnaty®, BNT162b2)

•Moderna’s COVID-19 vaccine (Spikevax®, mRNA-1273)

•Janssen’s COVID-19 vaccine (JNJ-78436735)

Current approaches to COVID-19 therapies generally fall into two categories: antivirals, which prevent the virus from multiplying, and immune modulators, which help the immune system to fight the virus or stop it from overreacting dangerously. Some potential therapies act in a different way or via multiple mechanisms.

In May 2020, the FDA issued an Emergency Use Authorization (“EUA”) for emergency use of remdesivir (Veklury®) for the treatment of hospitalized patients with severe COVID-19. Remdesivir is a direct acting antiviral drug that inhibits viral RNA synthesis. On November 20, 2020, the WHO issued a conditional recommendation against the use of remdesivir in hospitalized COVID-19 patients, regardless of disease severity, as there is currently no evidence that remdesivir improves survival and other outcomes in these patients.

In December 2021, the FDA issued an EUA for Pfizer’s Paxlovid® (nirmatrelvir tablets and ritonavir tablets, co-packaged for oral use) for the treatment of mild to moderate COVID-19 in adults and pediatric patients (12 years of age and older weighing at least 40 kilograms or about 88 pounds) with positive results of direct SARS-CoV-2 testing, and who are at high risk for progression to severe COVID-19, including hospitalization or death.

In addition, the FDA has issued initial EUAs for several monoclonal antibodies for the treatment and, partially, prevention of COVID-19 in adult and pediatric patients. Monoclonal antibodies are laboratory-made molecules acting as substitute antibodies. The immune system can recognize and respond more effectively to the COVID-19 infection, making it more difficult for the virus to reproduce and cause harm. Some EUAs were revised or revoked later based on updated data when those became available.

Current Development Plan and Ongoing Studies

A publication from scientists in Wuhan, China (Xiong et al. 2020) had shown promising activity of DHODH inhibitors against SARS-CoV-2 in in vitro cellular studies. On April 21, 2020, we announced that vidofludimus calcium had successfully demonstrated preclinical activity against SARS-CoV-2. Specifically, vidofludimus calcium was observed to inhibit

replication of clinical isolates of SARS-CoV-2 associated with COVID-19. In cellular assays, vidofludimus calcium demonstrated this antiviral activity at concentrations which are well below the blood concentrations associated with vidofludimus calcium dosing regimens studied in ongoing and previous clinical trials.

Phase 2 Trial of Vidofludimus Calcium in Moderate COVID-19 (CALVID-1 Trial)

The CALVID-1 trial was a prospective, multicenter, randomized, placebo-controlled, double-blind clinical trial in hospitalized patients with moderate COVID-19, designed to evaluate efficacy, safety and tolerability of vidofludimus calcium. The aim of the CALVID-1 trial was to investigate vidofludimus calcium as an oral treatment option for COVID-19 and to support potential use of vidofludimus calcium as a treatment for current and potential future viral pandemic threats. Patients were enrolled at 20 sites in eleven countries, including the United States, Germany, and a range of other European countries. Patients were randomized to receive either 22.5 mg of vidofludimus calcium twice daily (45 mg/day), or placebo twice daily, for 14 consecutive days. Patients in both arms were also eligible to receive investigator’s choice of standard-of-care therapy throughout the duration of the study. Inclusion criteria called for hospitalized adult patients with a confirmed SARS-CoV-2 infection fulfilling clinical status category 3 or 4, as assessed with the nine-category ordinal scale proposed by the World Health Organization (WHO) COVID-19 Therapeutic Trial Synopsis, as well as certain additional clinical and laboratory criteria.

On February 17, 2021, we announced that vidofludimus calcium has shown evidence of clinical activity in hospitalized patients with moderate COVID-19. This planned main analysis of the CALVID-1 trial was based on data from 204 randomized patients and included top-line clinical efficacy, safety, disease marker, and virology data. Although the trial found very low rates of serious complications (e.g., mortality, rate of intensive care unit submissions and rate of invasive ventilations) in the population of hospitalized patients with moderate COVID-19, the data did show clinical activity of vidofludimus calcium based on multiple secondary endpoints, including clinically meaningful improvements in time to clinical recovery, time to clinical improvement, and disease markers. In addition, high-risk patients and patients over 65 years of age experienced a more substantial treatment effect of vidofludimus calcium. Vidofludimus calcium also prevented many COVID-19-related adverse events of higher severity. Finally, vidofludimus calcium was found to be safe and well-tolerated in this patient population.

The full analysis of all 223 randomized patients supports the conclusions made for the main analysis. However, the full analysis also provided data on a few additional endpoints that were not assessed in the main analysis. The rate and timing of anti-SARS-CoV-2 antibodies patients are developing in response to the infection was found to be identical between the vidofludimus calcium and placebo treatment arms. We believe that this is an important confirmation of the mechanism of action of vidofludimus calcium that selectively targets highly metabolically activated cells involved in the disease process, but leaves antibody production relatively unaffected. Although no specific data are available at this point, we also believe that these data may support that vaccinations, including those for SARS-CoV-2, may be effectively given during vidofludimus calcium therapy. Many immunomodulatory therapies are known to interfere with vaccinations, however several studies with another DHODH inhibitor (teriflunomide) had shown that this is not the case for these class of drugs. The CALVID-1 SARS-CoV-2 antibody data are supportive of this finding as well. The full analysis was also able to detect a relationship between drug trough levels in blood plasma and the clinical recovery endpoint. Higher drug levels correlate with shorter clinical recovery periods. We believe that this is another important finding to provide evidence of clinical activity in moderate COVID-19 patients.

Further information regarding our CALVID-1 trial in COVID-19 can be found on ClinicalTrials.gov under the identifier NCT04379271.

The CALVID-1 trial was able to highlight important differentiators of vidofludimus calcium as compared to existing medications in MS and UC. Many other immunomodulatory drugs commercially used provide a beneficial effect on the disease but are also known to have a higher rate of virus reactivations as adverse drug reactions. For example, some drugs used in ulcerative colitis are known for elevated rates of zoster virus reactivation (shingles). Drugs approved for multiple sclerosis have shown the rare but clinically very important side effect of PML which is highly lethal and caused by a virus reactivation and infection of the brain tissue. vidofludimus calcium has not shown an increased rate of infections and infestations, as compared to placebo, in the CALVID-1 trial. The same finding was already observed in other controlled clinical trials of vidofludimus calcium, including the Phase 2 EMPhASIS trial in RRMS. We believe that both the underlying selectivity of DHODH inhibition on the immune system and the broad antiviral properties of vidofludimus calcium contribute to these findings.

The results of the CALVID-1 trial also corroborate the broad antiviral activity of vidofludimus calcium, already known from previous in vitro testing in a range of different virus families. We believe that these results support the ability of a host-cell directed antiviral mechanism of vidofludimus calcium to provide antiviral activities largely independent of mutational variants. We will continue to explore the broad antiviral properties of vidofludimus calcium, including testing its combination

potential with other drugs in further in vitro and in vivo preclinical studies. In other clinically important virus diseases, such as hepatitis or AIDS, combination treatments are already the mainstay of therapy, whereas monotherapy was found to be inferior to such combinations. This additional research will enable us to explore the potential of vidofludimus calcium to target preparedness for potential future pandemics and for clinically important and underserved viral diseases.

Investigator-Sponsored Phase 2 Trial of Vidofludimus Calcium in Combination with Oseltamivir in Moderate to Severe COVID-19 (IONIC Trial)

On July 27, 2020, we announced enrollment of the first patients in an investigator-sponsored Phase 2 trial of vidofludimus calcium for the treatment of patients with moderate to severe COVID-19. This trial is run by sponsor and lead site, University Hospitals Coventry and Warwickshire NHS Trust, London, United Kingdom, and is a prospective, randomized, parallel-group, open-label Phase 2b trial, designed to evaluate efficacy and safety of vidofludimus calcium in combination with the neuraminidase inhibitor, Oseltamivir (TamifluR), in approximately 120 adult patients with moderate to severe COVID-19. An interim analysis of approx. 30 patients provided evidence for potential activity of the combination treatment of oseltamivir and vidofludimus calcium and the trial is currently being expanded to include additional sites.

Further information regarding the IONIC trial in COVID-19 can be found on ClinicalTrials.gov under the identifier NCT04516915.

Vidofludimus Calcium Registration Plan

All of our drug development candidates require approval from the FDA and corresponding agencies in other countries before they can be marketed for sale. The activities required before drugs or biologics may be marketed in the United States include:

•preclinical laboratory tests, in vitro and in vivo preclinical studies and formulation and stability studies;

•the submission to the FDA of an application for human clinical testing, which is known as an IND;

•adequate and well-controlled human clinical trials to demonstrate the safety and effectiveness of the drug;

•the submission of an NDA for a drug; and

•the approval by the FDA of an NDA.

The FDA reviews all available data relating to safety, efficacy and quality and assesses the risk/benefit profile of a product candidate before granting approval. The data assessed by the FDA in reviewing an NDA includes animal or preclinical testing data, chemistry, drug-drug interaction data, manufacturing controls data and clinical safety and efficacy data.

Future human clinical testing and marketing outside the United States will be subject to foreign regulatory requirements. These requirements vary by jurisdiction, differ from those in the United States and may require us to perform additional preclinical or clinical testing regardless of whether FDA approval has been obtained. The amount of time required to obtain necessary approvals from foreign regulatory agencies may be longer or shorter than that required for FDA approval. In many countries outside of the United States, coverage, pricing and reimbursement approvals are also required.

We have an ongoing Phase 3 program for vidofludimus calcium in RMS, and ongoing Phase 2 trials for vidofludimus calcium in PMS and UC. We are also considering whether to conduct another clinical trials in CD and PSC. For our lead indications RMS and IBD, marketing approval would require completion of two successful, well-controlled Phase 3 trials. Completing such trials would require substantial financial and resource investments and may take several years to complete. In parallel, additional preclinical and clinical investigations need to be conducted in preparation for filing applications for regulatory approval, including additional pharmacological studies in special populations or drug-drug interaction studies. There are also additional steps required to develop and validate large-scale manufacturing capabilities as well as manufacturing controls.

The FDA may grant accelerated approval for drugs that address life-threatening diseases without effective therapies, based on findings from surrogate endpoints reasonably expected to predict clinical outcomes. Additionally, the FDA may grant

orphan status for drugs that address high unmet medical needs in rare diseases. Accordingly, due to its relatively low prevalence, PSC may have the potential for an accelerated path toward commercial approval. Based on the rarity of PSC, the life-threatening nature of the disease and the lack of effective therapies, the FDA and other regulatory agencies may agree to an abbreviated development plan, including the possibility of only one single open-label pivotal trial. However, any such development path needs to be discussed with and approved by regulatory agencies and we have not yet had any such discussions.

Vidofludimus Calcium Manufacturing and Formulation

Vidofludimus calcium is provided as a white, uncoated immediate release tablet. Dose strengths for clinical trials are 5 mg, 15 mg, 22.5 mg, 30 mg and 45 mg, compared with placebo. The tablets are packaged in polyethylene bottles. Vidofludimus calcium has been synthesized in several batches of approximately 80 kg each of active pharmaceutical ingredient (“API”) and a drug product batch size of 500,000 tablets has been produced by manufacturers under contract with us. Our existing manufacturers have the capacity for batch sizes of up to several million units.

Vidofludimus Calcium Intellectual Property, Licenses and Royalties

Vidofludimus calcium is covered by several layers of patents and applications, all either granted or filed in the United States, the European Union and other territories. Initially, vidofludimus calcium is protected by a granted patent claiming the composition of matter of vidofludimus calcium’s active moiety, vidofludimus, the free acid form of vidofludimus calcium. This patent is granted in most major markets and expires in 2022 in most of these jurisdictions. Additionally, a second layer of applications was filed to cover vidofludimus calcium’s active ingredient, the calcium salt of vidofludimus. These applications are granted in some jurisdictions and cover vidofludimus calcium until 2031, and U.S. Patent Term Extension and/or European Supplementary Protection Certificates could provide prolonged protection from generic entry up to 2036, depending on NDA submission time and IND filing in the United States and analogous filings in the European Union. Another layer consists of patent applications filed in early 2018 and directed to composition of matter of a newly-identified, specific polymorph of vidofludimus calcium and a related method of production of the clinical material for vidofludimus calcium, which is now the active ingredient of the currently used vidofludimus calcium formulation. In addition, a patent application covering a dosing scheme currently used with vidofludimus calcium was filed in 2017, based on unexpected findings from Phase 1 and preclinical investigations. If issued, this patent could extend patent protection for vidofludimus calcium to 2038.

Vidofludimus calcium and IMU-935 were acquired in a transaction with the originator 4SC in September 2016. We have subsequently submitted additional patent applications for independently developed intellectual property relating to each of vidofludimus calcium and IMU-935. On March 31, 2021, our German subsidiary, Immunic AG, and 4SC entered into a Settlement Agreement, pursuant to which Immunic AG settled its remaining obligation of a 4.4% royalty on net sales for $17.25 million. The payment was made 50% in cash and 50% in shares of our common stock.

IMU-935 – Targeting RORγt and Th17

Mechanism of Action and Key Mechanistic Data

IMU-935 is a highly potent and selective inverse agonist of a transcription factor called RORγt. We believe that the nuclear receptor RORγt is the main driver for the differentiation of Th17 cells and the release of cytokines involved in various inflammatory and autoimmune diseases. The target RORγt (RORC) has three known main functions in T cells: (i) it is a key regulator of Th17 cell differentiation, (ii)itis the crucial transcription factor for the genes encoding IL-17A and IL-17F, and (iii) it drives normal thymocyte maturation. We believe this target is an attractive alternative to approved antibodies for targets, such as IL-23, the IL-17 receptor and IL-17 itself.

Preclinical results confirm that IMU-935 is a highly potent and selective inverse agonist of RORγt with an IC50 (the concentration of drug that inhibits 50% of the activity of the target) of around 24 nM in reporter assays and 20 nM in a microscale thermophoresis (“MST”) binding assay to the protein. The resulting effect of RORγt inhibition by IMU-935 in vitro on IL-17A, IL-17F and IFNγ cytokine release from stimulated human lymphocytes is in the low single-digit nanomolar range, showing IC90 levels of 5-6 nM. Furthermore, IMU-935 potently inhibits Th17 differentiation and has demonstrated dose dependent activity in several cellular test systems and in vivo in psoriasis/IL-17, graft versus host disease, experimental autoimmune encephalomyelitis (“EAE”)and IBD animal models.

One of the potential risks of drugs targeting RORγt was identified in prior research suggesting that RORγt knockout or inhibition impacts Th17 differentiation, IL-17 transcription and thymocyte maturation to the same extent. More recent research published in Nature Immunology (2017) suggests that these functions are differentially mediated by small structural changes of the RORγt protein impacting the interaction with co-factors and other proteins.

Preclinical experiments indicated that, while leading to a potent inhibition of Th17 differentiation and cytokine secretion, IMU-935 did not affect thymocyte maturation, one of the important physiological functions that should be maintained. Based on these preclinical data and the selectivity of the effect maintaining important physiological functions while providing the desired anti-Th17 effect, we believe that IMU-935 has potential to be a best-in-class therapy for various autoimmune diseases. Newly obtained data from acute and chronic treatment of mice corroborated in vivo that IMU-935 is the first molecule observed to impact neither thymus size, thymocyte numbers, nor the maturation status of thymocytes, in contrast to two other known inhibitors of RORγt.

The preclinical effect of targeting RORγt has been demonstrated in several preclinical experiments of competing RORγt modulators. Some molecules progressed to clinical stage. However, to date, only a limited number of product candidates have reached clinical Phase 2 studies.

Indication: Psoriasis

Diagnosis and Prevalence

Psoriasis is a chronic inflammatory disease of the skin with unknown etiology that leads to hyperproliferation of keratinocytes and endothelial cells. Most mechanistic data support the hypothesis that psoriasis is an autoimmune disease driven by activated T-lymphocytes which then release cytokines, chemokines and pro-inflammatory molecules into the dermis and epidermis.

Psoriasis is characterized clinically by development of red, scaly, itchy, symmetrical, dry plaques typically located on skin overlying the elbows, knees, lumbar area and scalp. Plaques vary from a few millimeters in diameter to several centimeters and can be localized to a specific area or extend over most of the body surface.

Psoriasis is one of the most common chronic inflammatory skin diseases (Di Meglio et al. 2014). The disease prevalence varies between geographic regions. Studies of psoriasis suggest an overall prevalence of 2% to 3% of the world’s population, with a higher prevalence in U.S. and Canadian populations (4.6% and 4.7%, respectively). Psoriasis is considered equally prevalent between genders and can occur at any age. However, there seems to be a bimodal distribution of the age of disease onset, with a first peak between 15 and 30 years, and a second peak between 50 and 60 years of age.

Current Treatment Options

Current treatments for patients with psoriasis include topical therapies, oral therapies and biologics. Topical therapies, such as corticosteroids and vitamin D3 analogues, reduce inflammation, which slows the proliferation of keratinocytes and reduces itching. Oral therapies, such as methotrexate, cyclosporine, apremilast and tofacitinib, target anti-inflammatory processes. Biologics block proteins produced by keratinocytes, dendritic cells, Th17 lymphocytes or other immune cells. Examples of biologics include anti-TNFα therapies, such as infliximab, etanercept and adalimumab. Monoclonal antibodies, such as secukinumab, ixekizumab and brodalumab, have been developed to target the pro-inflammatory cytokine IL-17. Anti-IL-23 agents, such as risankizumab, guselkumab and tildrakizumab, are further treatment options. Of note, therapies targeting the IL-17/IL-23 axis have largely revolutionized the treatment of patients with moderate to severe psoriasis as they have achieved highly successful skin clearance rates.

We intend to develop IMU-935 as an oral and more convenient treatment option for patients with moderate to severe psoriasis with a mechanism of action and efficacy that approximates those of IL-17 antibodies.

Indication: Castration-Resistant Prostate Cancer

Diagnosis and Prevalence

Prostate cancer is the most common malignancy in men (Siegel RL et al., CA CANCER J CLIN 2021;71:7–33). Castration-resistant prostate cancer (“CRPC”) is defined by disease progression despite androgen depletion therapy and may

present as either a continuous rise in serum prostate-specific antigen (“PSA”) levels, the progression of pre-existing disease, and/or the appearance of new metastases (Saad et al., CAN UROL ASSOC J 2010;4(6):380-4).

Among patients whose prostate cancer is metastatic at the time of diagnosis, bone pain may be the leading symptom. Bone is the predominant site of disseminated prostate cancer, and pain is the most common manifestation of bone metastases. Other symptoms with metastatic disease may include hematuria, inability to void, incontinence, erectile dysfunction, weight loss, weakness or pain due to spinal cord compression, pain due to pathologic fractures, fatigue caused by anemia, or symptoms associated with chronic renal failure. Clinical signs associated with prostate cancer include an elevated PSA on laboratory testing and an abnormal prostate finding on digital rectal examination.

Current Treatment Options and Unmet Need

While docetaxel is still considered a reference chemotherapy for patients with CRPC, cabazitaxel, abiraterone acetate and enzalutamide are commonly prescribed for the majority of patients with CRPC based on the ability to improve overall survival in men who progress after docetaxel. However, de novo and acquired resistance to these therapies seem to be inevitable, meaning that almost all show disease progression despite treatment with these agents (Chopra S and Rashid P, Aust Fam Physician 2015 May;44(5):302-5).

On July 12, 2021, we presented new preclinical data highlighting IMU-935's therapeutic potential in CRPC. Recently published third-party studies have shown that RORγ plays an important pro-tumor role by driving expression of the androgen receptor (“AR”), leading to tumor growth. AR has been shown to be mutated in a constitutively active form called AR-V7 in 18% of untreated patients and up to 95% of patients treated with abiraterone acetate and enzalutamide. This mutation leads to resistance of AR-axis-targeted therapies and is associated with poor outcomes of progression free survival and overall survival for patients on AR-axis-targeted therapies (Sciarra et al. 2019 May; 98(19): e15608). In preclinical studies, IMU-935 was observed to inhibit the expression of mutated AR-V7, and the tumor growth of prostate cancer cell lines in vitro. We believe IMU-935's potency in inhibiting tumorigenesis-promoting IL-17 and Th17 cells in vitro may result in further antitumoral activity in humans.

Indication: Guillain-Barré Syndrome

Diagnosis and Prevalence

Historically, Guillain-Barré Syndrome (“GBS”) was considered a single disease entity. It is now known to be a heterogeneous syndrome with several variant forms. Acute inflammatory demyelinating polyradiculopathy is the most common form in North America, Europe and most of the developed world, where it accounts for approximately 90% of cases. GBS is thought to result from an immune response to a preceding infection that cross-reacts with peripheral nerve components. The exact mechanisms are unknown. However, cellular and humoral immune responses are of relevance in the pathogenesis of GBS.

The clinical manifestation of GBS is characterized by an acute or subacute onset of a progressive, symmetric weakness in limbs or cranial nerve-innervated muscles, accompanied by absent or depressed deep tendon reflexes, and a characteristic profile in the cerebrospinal fluid and electrodiagnostic studies (Hughes et al. 2005). Patients usually present a few days to a week after onset of symptoms. The weakness can vary from mild difficulty with walking to nearly complete paralysis of all extremity, facial, respiratory, and bulbar muscles.

GBS occurs worldwide with an overall incidence of 0.16 to 3.0 per 100,000 person-years (McGrogan et al. 2009). Thus, it is considered a rare disease. The incidence increases by approximately 20% with every 10-year increase in age beyond the first decade of life (Sejvar et al. 2011). In addition, the incidence is slightly greater in males than in females.

Current Treatment Options

Current treatments for patients with GBS include plasma exchange (also called plasmapheresis) and administration of intravenous immune globulin (“IVIg”). Over the past three decades, no other therapies have been found to be effective for GBS.

IMU-935 Clinical Development Plan and Ongoing/Planned Clinical Studies

Our current development plan for IMU-935 focuses on two initial goals: (i) to rapidly obtain human safety and pharmacokinetic data for IMU-935 in order to evaluate the safety profile of this development candidate, and (ii) to obtain preliminary clinical activity data using safe doses.

We are currently performing a Phase 1 clinical trial with IMU-935 through its Australian subsidiary. Immunic believes that this development approach allows it to accelerate the program due to certain unique regulatory requirements and processes in Australia. In the third quarter of 2019, our Australian subsidiary received clearance from the Bellberry Human Research Ethics Committee in Australia to begin Phase 1 trials of IMU-935 under the Clinical Trial Notification scheme of the Australian Therapeutic Goods Administration.

The Phase 1 clinical trial of IMU-935 is comprised of three parts:

Part A: Single Ascending Dose Part

The first part of the Phase 1 trial was a single ascending dose, double-blind, placebo-controlled study of IMU-935 in healthy human subjects. This part was designed to evaluate the drug’s safety and pharmacokinetic profile and also included the evaluation of food effects.

On December 14, 2021, we announced that unblinded data from the single ascending dose part of the ongoing phase 1 clinical trial of a new powder-in-capsule formulation of IMU-935, in which healthy human subjects were treated with 100 mg, 200 mg, 300 mg and 400 mg of this new formulation or placebo, found these single ascending daily doses of IMU-935 to be safe and well-tolerated, and no maximum tolerated dose was reached. No serious adverse events occurred. A dose-proportional pharmacokinetic profile was observed across the investigated dose range.

Part B: Multiple Ascending Dose Part

Following the single ascending dose part, we initiated a second portion of the Phase 1 trial which was a multiple ascending dose, double-blind, placebo-controlled study in healthy human subjects with IMU-935 given daily for 14 consecutive days. This part assessed the safety and pharmacokinetic properties of IMU-935.

On December 14, 2021, we also announced unblinded data from the multiple ascending dose part of the ongoing phase 1 clinical trial, in which healthy human subjects were dosed for 14 days with 150 mg either once or twice daily doses of IMU-935 or placebo, found these multiple ascending doses of IMU-935 to be safe and well-tolerated, and no maximum tolerated dose was reached. Treatment emergent adverse events were generally mild in severity, with moderate treatment emergent adverse events reported in one of eleven IMU-935 treated subjects, compared with one of four subjects on placebo. No serious adverse events were reported. No dose-dependent changes in laboratory values (including no effects on liver enzymes or in hematological parameters), vital signs or in electrocardiographic evaluations were found. Pharmacokinetic analysis showed that stable steady-state plasma concentrations were achieved within the first week of dosing with an accumulation factor for IMU-935 allowing predictable trough levels during daily dosing.

Part C: Psoriasis Patients

In light of the favorable safety and tolerability data observed in healthy human subjects, we announced on October 27, 2021 that it has initiated part C of the ongoing phase 1 clinical trial, where moderate to severe psoriasis patients are to be randomized to 28-day treatment with IMU-935 or placebo. Planned assessments include safety, tolerability, pharmacokinetic and pharmacodynamic markers, as well as skin evaluations. Recruitment of part C depends on several external factors which are not under our direct control, including, in particular, the relatively restrictive COVID-19-related rules in effect in Australia and New Zealand. This situation has and may further influence our ability to enroll study participants and/or perform on-site monitoring at clinical sites in those locations. In light of this, we have already initiated remedial measures, including the potential addition of sites outside of Australia and New Zealand, for the ongoing part C of IMU-935 in psoriasis patients. As a result, initial results from the third portion of the Phase 1 clinical trial in patients with moderate-to-severe psoriasis are now expected to be available in the second half of 2022, instead of at the end of the second quarter of 2022, as previously announced.

Further information regarding our Phase 1 clinical trial can be found on anzctr.org.au under the registration number ACTRN12619001544167.

Phase 1 Clinical Trial of IMU-935 in mCRPC

Based on these strong preclinical results, the Company has initiated an open-label Phase 1 dose-escalation trial designed to evaluate the safety and tolerability of increasing doses of IMU-935 to establish the maximum tolerated dose and the recommended phase 2 dose. The trial will also evaluate the anti-tumor activity of IMU-935 by means of PSA levels, circulating tumor cell numbers, and radiographic response assessments of tumor progression. The trial’s Principal Investigator is Johann Sebastian de Bono, MD, PhD, Regius Professor of Cancer Research and Professor in Experimental Cancer Medicine, The Institute of Cancer Research, London, and The Royal Marsden NHS Foundation Trust, London, United Kingdom. The trial was approved by the Medicines and Healthcare products Regulatory Agency ("MHRA"), the Research Ethics Committee ("REC") and the Health Research Authority ("HRA") in the United Kingdom. The first patient was enrolled in December 2021. Initial clinical data are expected to be available in the third quarter of 2022.

Further information regarding Immunic’s Phase 1 clinical trial in mCRPC can be found on ClinicalTrials.gov under the identifier NCT05124795.

Potential Phase 2 Trial of IMU-935 in GBS

Immunic believes that the mechanism of action of IMU-935 may also support its evaluation for the treatment of potential orphan indications. Immunic anticipates that it may also begin a Phase 2a proof-of-concept clinical trial of IMU-935 in an orphan autoimmune indication, if the full Phase 1 clinical trial results support such a study. This orphan approach may allow for an accelerated path to approval, in parallel to IMU-935’s previously planned development in psoriasis. After a thorough review of suitable autoimmune conditions, Immunic has targeted GBS as additional indication for IMU-935, as previously announced. GBS is an acute neurological disorder in which the body's immune system attacks its peripheral nervous system, and for which very few therapies exist. The Company plans to announce additional details as soon as design and timing of the envisaged trial are further defined.

IMU-935 Manufacturing and Formulation

IM105935, the API of the IMU-935 drug product, is a small molecule compound and is currently synthesized at up to 30 kg scale. Clinical trials are supplied with a powder-in-capsule formulation produced by manufacturers under contract with us.

IMU-935 Intellectual Property, Licenses and Royalties

On February 2, 2022 the Company announced that it received a Notice of Allowance from the U.S. Patent and Trademark Office (“USPTO”) for patent application 16/644581, entitled, “IL-17 and IFN-gamma inhibition for the treatment of autoimmune diseases and chronic inflammation”. The company also received notice of allowance of patent application EP18762111.5 in Europe, and notice of grant of patent application 2018330633 in Australia. All three patents cover composition of matter of IMU-935 and related formulations, and are expected to provide protection into at least 2038, without accounting for potential Patent Term Extension (“PTE”) in the United States or Supplementary Protection Certificates (“SPC”) in Europe, respectively.

IP related to IMU-838 and IMU-935 was acquired in a transaction with the originator 4SC in September 2016. Immunic has subsequently submitted additional patent applications for independently developed intellectual property relating to each of IMU-838 and IMU-935. On March 31, 2021, Immunic AG, our German subsidiary, and 4SC entered into a Settlement Agreement, pursuant to which Immunic AG settled its remaining obligation of a 4.4% royalty on net sales for $17.25 million. The payment was made 50% in cash and 50% in shares of our common stock.

IMU-856 – Targeting Intestinal Barrier Function

Mechanism of Action and Key Mechanistic Data

IMU-856, which we believe could have a highly advantageous potential for multiple diseases, is an orally available small molecule modulator that targets a protein which serves as a transcriptional regulator of the intestinal barrier function and regeneration of bowel epithelium. Immunic has not yet disclosed the molecular target for IMU-856. Based on preclinical data,

Immunic believes this compound may represent a new treatment approach, as the mechanism of action targets the restoration of the intestinal barrier function and regeneration of bowel epithelium in patients suffering from gastrointestinal diseases such as IBD, IBS-D, celiac disease and other intestinal barrier function associated diseases. Immunic believes that because IMU-856 has been shown in preclinical investigations to avoid suppression of immune cells, it may therefore maintain immune surveillance for patients during therapy, which would be an important advantage versus chronic treatment with potentially immunosuppressive medications.

Importance of Targeting Bowel Permeability in Multiple Diseases

Bowel permeability is suspected to be involved in the initiation of many chronic inflammatory or autoimmune conditions, as the impaired intestinal barrier function may be one of the preconditions for antigens of the microbiome to be recognized by the body’s immune system. This is not only true for diseases of the bowel; the interaction of the immune system with components of the microbiome is suspected for many diseases throughout the body. To date, there are no good treatment strategies to ameliorate impaired bowel permeability.

IBD is a chronic, inflammatory disorder characterized by transmural inflammation of a part of the GI tract (UC) or the entire GI tract (CD). IBD is defined by relapsing and remitting episodes with progression over time to complications, including intestinal ulcers and bleeding. The current hypothesis regarding the onset of IBD involves an impaired bowel wall barrier function as the central element of the pathophysiology. In healthy bowel walls, bacteria cannot pass from the lumen to the lamina propria because tightness is maintained between the epithelial cells in what resembles an intact barrier function of the bowel wall. However, in response to environmental or genetic factors, bowel wall barrier function may be weakened, allowing bacteria to pass through and enter the bowel wall, where immune cells recognize the bacteria. This would trigger an initial inflammation event. It is hypothesized that in IBD patients, the initial inflammatory response is abnormally sustained from lack of efficient apoptosis of immune cells, but this mechanism is not yet fully understood. Ultimately, patients develop a chronic and systemic immune response. The presence of certain “bad bacteria”, which may contain certain epitopes in the microbiota, or the overall makeup of the microbiome, which lack “good bacteria”, are also known to contribute to the sustained and overshooting inflammation in IBD. Additionally, it was shown that IBD patients in endoscopic remission still display IBD symptoms if bowel tightness is not normalized. Episodes of impaired bowel wall barrier function are also correlated with relapse weeks later.

Irritable bowel syndrome is a common GI disorder in which the underlying pathophysiology is poorly understood. However, increased intestinal permeability in IBS-D patients has been reported. Studies have shown that IBS-D patients have increased intestinal membrane permeability. This increased intestinal permeability may be due to a number of factors, including low-grade inflammation, which has been reported in mucosal biopsies of some diarrhea-predominant and post-infectious patients, but not constipation-predominant patients. It has been established that patients with inflammatory conditions, such as celiac sprue and acute alcoholic gastroenteritis, also have increased gut permeability. Acute symptoms usually coincide with the acute inflammation that leads to chronic abdominal pain, diarrhea and bloating.

Celiac disease is an autoimmune and chronic inflammatory condition of the small intestine involving an inappropriate immune response to the gluten-derived protein gliadin in genetically susceptible individuals. It is characterized by small intestinal epithelial injury, elevated intestinal permeability, and nutrient malabsorption. The prevalence of celiac disease is 0.5–1% in the general population, with an increasing incidence since the second half of the 20th century. Celiac disease causes debilitating symptoms and serious medical complications. Many patients suffer from gastrointestinal symptoms and have abnormal bowel epithelial lining (mucosal atrophy and crypt enlargement). Small bowel damage often leads to nutrient malabsorption that can result in a range of further clinical manifestations (anemia, osteopenia, failure to thrive in children). In addition, extra-intestinal symptoms and systemic manifestations are often present, such as dermatitis, infertility, or neurological and skeletal disorders. Patients with persistent villous atrophy show an increased risk of lymphoproliferative malignancy. The intestinal epithelia barrier, physiologically impermeable to macromolecules such as gliadin, is recognized to play an important role in the pathogenesis of celiac disease.

Targeting the Disease-Causing and Sustaining Processes

Current treatments of many conditions of the bowel are aimed at inhibiting inflammation, but they do not target the impaired bowel wall barrier function. IMU-856 is designed to target pathways impacting the bowel wall barrier function and is aimed to normalize such function. Immunic believes that normalized bowel wall barrier function may avoid bacterial triggers, which may lead to the achievement and maintenance of remission without significantly influencing the immune competency of the patient.

Clinical Development Plan and Planned Studies

Immunic is currently performing early clinical trials of IMU-856, including Phase 1 single and multiple ascending dose trials, through its Australian subsidiary. Immunic believes that this development approach will allow it to accelerate the studies due to certain unique regulatory requirements and processes in Australia. The development activities for IMU-856 are intended to largely follow established processes and service provider relationships established for the IMU-935 development program. This may lead to operational and financial synergies in study preparation and execution.

In the third quarter of 2020, Immunic’s Australian subsidiary received clearance from the Bellberry Human Research Ethics Committee in Australia to begin Phase 1 trials of IMU-856 under the Clinical Trial Notification scheme of the Australian Therapeutic Goods Administration. The first healthy volunteer in the Phase 1 clinical trial of IMU-856 was dosed in August 2020. The trial is currently ongoing and progressing. Unblinded safety data from the single and multiple ascending dose parts in healthy human subjects is expected to be available in the third quarter of 2022.

The Phase 1 clinical trial of IMU-856 is comprised of three parts:

Part A: Single Ascending Dose Part

The first part of the Phase 1 trial is a single ascending dose, double-blind, placebo-controlled study in healthy human subjects designed to assess safety, pharmacodynamic and pharmacokinetic properties of IMU-856. One dose level evaluates intra-individual differences between fasted and fed conditions. All planned single ascending dose cohorts for the current tablet formulation of IMU-856 have been completed but have not yet been unblinded.

Part B: Multiple Ascending Dose Part

Based on the favorable data available so far, the Ethics Committee in Australia has agreed to proceed to the multiple ascending dose part of the Phase 1 trial which is currently being dosed. This is a multiple ascending dose, double-blind, placebo-controlled study in healthy human subjects with two ascending dose levels of IMU-856 and the study drug given daily for 14 consecutive days. This part is designed to assess safety, pharmacodynamic and pharmacokinetic properties of IMU-856.

Part C: Patients with Conditions Involving Impaired Bowel Barrier Function

The Company plans to extend these single and multiple ascending dose studies in the first half of 2022 to include patients with intestinal barrier function associated diseases. This would be a double-blind, placebo-controlled study with partial parallel group design. The study drug would be given daily over 28 consecutive days to patients with a model disease which would allow to potentially provide initial evidence of activity of IMU-856.

IMU-856 Manufacturing and Formulation

SPIM-15, the API of the IMU-856 drug product, is a small molecule compound and is currently synthesized at up to 8 kg scale. It is formulated as an immediate release tablet. Although the IMU-856 tablets are produced in different countries by manufacturers under contract with us, the final release for clinical trials is done by a vendor in Australia

IMU-856 Intellectual Property, Licenses and Royalties

On November 5, 2018, Daiichi Sankyo and Immunic AG, our German subsidiary, entered into an option and license agreement that granted Immunic AG an exclusive global option to exclusively license a group of compounds, designated by us as IMU-856. Under this agreement, ImmunicAG has the exclusive rights to commercialization of IMU-856 in all countries, including the United States, Europe and Japan. The license also includes exclusivity on a patent application filed by Daiichi Sankyo in early 2018, covering IMU-856’s composition of matter. Immunic AG exercised the option on January 5, 2020.

Concurrent with the option exercise, Immunic AG paid to Daiichi Sankyo a one-time upfront licensing fee. Going forward, Daiichi Sankyo is eligible to receive future development, regulatory and sales milestone payments, as well as royalties related to IMU-856.

Government Regulation - All Products

In the United States, the FDA regulates drugs under the federal Food, Drug, and Cosmetic Act (“FDCA”), and its implementing regulations. All of Immunic’s drug development candidates require approval from the FDA and corresponding agencies in other countries before they can be marketed for sale. The activities required before drugs or biologics may be marketed in the United States include:

•preclinical laboratory tests, in vitro and in vivo preclinical studies and formulation and stability studies;

•the submission to the FDA of an application for human clinical testing, which is known as an IND application;

•adequate and well-controlled human clinical trials to demonstrate the safety and effectiveness of the drug;

•the submission to the FDA of a New Drug Application ("NDA") for a drug; and

•satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current GMP (“cGMP”), requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

•the approval by the FDA of an NDA.

Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies. Preclinical trials must also be conducted in accordance with FDA and comparable foreign authorities’ legal requirements, regulations or guidelines, including Good Laboratory Practice (“GLP”), an international standard meant to harmonize the conduct and quality of non-clinical studies and the archiving and reporting of findings. Before human clinical testing can begin, a sponsor must submit the results of the preclinical tests, together with manufacturing information and analytical data, to the FDA as part of the IND, which is a request for authorization from the FDA to administer an IND product candidates to humans in clinical trials. An IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the clinical trial on a clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The FDA may impose a clinical hold at any time before or during clinical trials due to safety concerns about proposed or ongoing clinical trials or non-compliance with FDA requirements, and the trials may not commence or continue until the FDA notifies the sponsor that the hold has been lifted.

All clinical trials must be conducted under the supervision of one or more qualified investigators pursuant to protocols detailing, among other things, the objectives of the trial, dosing procedures, subject selection, inclusion/exclusion criteria and the safety and effectiveness criteria to be evaluated. The trial sponsor submits the protocol, as well as any subsequent protocol amendments, to the FDA as part of the IND. Sponsors must also provide all participating investigators and FDA safety reports of any serious and unexpected adverse events and any findings from laboratory tests in animals that suggests a significant risk for human subjects. For each institution where a clinical trial will be conducted, an Institutional Review Board ("IRB") must review and approve the clinical trial protocol and informed consent form required to be provided to each trial subject or his or her legal representative prior to a clinical trial commencing, and conduct ongoing monitoring of the study until completed or termination to assure that appropriate steps are taken to protect the human subjects participating in the research.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

Phase 1: In Phase 1 studies, the product candidate is initially introduced into healthy human subjects and tested for safety, dosage and tolerability, absorption, distribution, metabolism, excretion, and effect on the body.

Phase 2: Phase 2 studies are conducted in a limited patient population. These studies continue to evaluate safety while gathering preliminary data on effectiveness in patients with the targeted disease or condition.

Phase 3: Phase 3 trials further evaluate efficacy and safety in an expanded patient population, generally at geographically dispersed clinical study sites. These clinical trials are intended to establish the overall risk-benefit ratio of the product candidate and provide, if appropriate, an adequate basis for product labeling.

Post-approval studies, sometimes referred to as Phase 4 studies, may be conducted after initial marketing approval from the FDA. These studies are used to gather additional information about a product’s safety and/or efficacy in patients affected by the therapeutic indication. The FDA may require Phase 4 studies as a condition of approval of an NDA.

Clinical trials must also be conducted in accordance with legal requirements, regulations or guidelines of the FDA and comparable foreign authorities, including human subject protection requirements and current good clinical practice (“cGCP” or “GCP”). In addition, clinical trials must be conducted using product candidates produced under cGMP requirements. The FDA or the sponsor may suspend a clinical trial at any time for various reasons, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB may suspend or terminate approval of a clinical trial at an institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. In addition, some clinical trials are overseen by an independent group of qualified experts, known as a data safety monitoring board or committee, which monitors data from the trial to ensure patient safety and data integrity and may also make recommendations to alter or terminate a trial based on concerns for patient safety.

Before obtaining marketing approval for the commercial sale of any drug product, a sponsor must demonstrate in preclinical studies and well-controlled clinical trials that the product is safe and effective for its intended use and that the manufacturing facilities, processes and controls are adequate to preserve the drug’s identity, strength, quality and purity. The results of these preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product. The submission of an NDA is subject to the payment of substantial user fees ($3,117,218 for 2022); under certain limited circumstances, a waiver of such fees may be obtained. After the submission of an NDA, but before approval of the NDA, the manufacturing facilities used to manufacture a product candidate must be inspected by the FDA to ensure compliance with the applicable cGMP requirements. The FDA may also inspect clinical trial sites and audit clinical study data to ensure that the sponsor’s studies were properly conducted in accordance with the IND regulations, human subject protection regulations, and cGCP.

Under the current Prescription Drug User Fee Act (“PDUFA”) guidelines, the FDA goal for acting on the submission of an NDA for a new molecular entity is ten months from the date of “filing.” The FDA conducts a preliminary review of an NDA within 60 days after submission to determine whether it is sufficiently complete to permit substantive review, before accepting the NDA for filing. This two month preliminary review effectively extends the typical NDA review period to twelve months.The FDA may request additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing.

Following the FDA’s evaluation of an NDA, it will issue an approval letter or a complete response letter (“CRL”). An approval letter authorizes the sponsor to begin commercial marketing of the drug for specific indications. A CRL indicates that the review cycle of the application is complete and the application will not be approved in its present form. A CRL describes the specific deficiencies in the NDA identified by the FDA. When possible, a CRL will recommend actions that the applicant might take, including providing additional clinical data, such as an additional Phase 3 trial or other significant and time consuming requirements related to clinical trials, nonclinical studies or manufacturing, to place the application in condition for approval. If a CRL is issued, the sponsor must resubmit the NDA addressing all of the deficiencies identified in the letter, or withdraw the application. Even if the sponsor submits the recommended data and information, the FDA may decide that the NDA does not satisfy the criteria for approval.

As condition to a product’s regulatory approval, the FDA may require a sponsor to conduct Phase 4 studies designed to further assess the drug’s safety and effectiveness after NDA approval, or may require other testing and surveillance programs to monitor the safety of the approved product. The FDA may also place other conditions on approval including the requirement for a risk evaluation and mitigation strategy (“REMS”) to assure the safe use of the drug. A REMS could include medication guides, communication plans to healthcare professionals or other activities to assure safe use, such as provider certification or training, restricted distribution methods, and patient registries.

Research and Development

We recognized $61.1 million and $38.6 million in research and development expenses in the years ended December 31, 2021 and 2020, respectively.

Geographic Information

Substantially all of our long-lived assets were located within both the United States and Germany in 2021 and 2020.

Employees

As of February 18, 2021, we had 55 employees, six of whom held M.D. degrees. Of the employees, 38 were engaged in research and development and 17 in administration. We consider our employee relations to be good.

Corporate Information and Website

We maintain a website at www.imux.com. The information contained on, or that can be accessed through, the website is not a part of this Annual Report on Form 10-K.

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through the investor relations page of our internet website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

Item 1A. Risk Factors.

Investing in our common stock involves a high degree of risk. Before deciding to invest in our company or deciding to maintain or increase your investment, you should consider carefully the risks and uncertainties described below. The risks and uncertainties described below and in our other filings with the SEC are not the only risks we face. If one or more of the following risks are realized, our business, financial condition, results of operations and prospects could be materially and adversely affected. In that event, the market price for our common stock could decline, and you may lose your entire investment.

Risk Factor Summary

The following is a summary of certain important factors that may make an investment in our Company speculative or risky. You should carefully consider the fuller risk factor disclosure set forth in this Annual Report, in addition to the other information herein, including the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes.

•The coronavirus pandemic has caused interruptions or delays of our business plan and may have a significant adverse effect on our business.

•Our clinical trials could be delayed or suspended as a result of the threatened invasion of Ukraine by Russia.

•We have a limited operating history with our current business plan, have incurred significant losses since 2016, anticipate that we will continue to incur significant and increasing losses for the foreseeable future and may never achieve or maintain profitability. The absence of any commercial sales and our limited operating history make it difficult to assess our future viability.

•We currently have no source of product sales revenue and may never be profitable.

•We will require substantial additional funding, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development, other operations or future commercialization efforts.

•Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

•The marketing approval processes of the FDA and comparable foreign regulatory authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our product candidates, our business will be substantially harmed.

•Clinical drug development involves a lengthy and expensive process with an uncertain outcome.

•Clinical failure can occur at any stage of clinical development. Because the results of earlier clinical trials are not necessarily predictive of future results, any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive marketing approval.

•Our product candidates may cause undesirable adverse effects or have other properties that could delay or prevent their marketing approval, limit the commercial profile of an approved label or result in significant negative consequences following marketing approval, if obtained.

•We are heavily dependent on the success of our product candidates, which are in the early stages of clinical development. We cannot give any assurance that we will generate data for any of our product candidates sufficient to receive regulatory approval in our planned indications, which will be required before they can be commercialized.

•Due to our limited resources and access to capital, we must decide to prioritize development of our current product candidates for certain indications and at certain doses. These decisions may prove to have been wrong and may materially adversely affect our business, financial condition, results of operations and prospects.

•If we fail to attract and retain key management and scientific personnel, we may be unable to successfully develop or commercialize our product candidates.

•Even if we obtain the required regulatory approvals in the United States and other territories, the commercial success of our product candidates will depend on market awareness and acceptance of our product candidates.

•We currently have limited marketing and sales experience. If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell our product candidates, we may be unable to generate any revenue.

•If we fail to enter into strategic relationships or collaborations, our business, financial condition, commercialization prospects and results of operations may be materially adversely affected.

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

•The size of the potential market for our product candidates is difficult to estimate and, if any of our assumptions are inaccurate, the actual markets for our product candidates may be smaller than our estimates.

•We may be unable to realize the potential benefits of any collaboration.

•Our proprietary rights may not adequately protect our technologies and product candidates.

•We may not be able to protect our intellectual property rights throughout the world.

•Intellectual property rights do not protect against all potential threats to our competitive advantage.

•We incur significant costs and demands upon management as a result of complying with the laws and regulations affecting public companies.

•The market price of our common stock is volatile.

•We do not anticipate that we will pay any cash dividends in the foreseeable future.

Risks Related to COVID-19

The coronavirus pandemic has caused interruptions or delays of our business plan and may have a significant adverse effect on our business.

In an effort to contain and mitigate the spread of COVID-19, many countries, including the United States (and some states and cities), Canada, the European Union and China, have imposed unprecedented restrictions on travel, quarantines, vaccine mandates and other public health safety measures. Legal challenges to some of these restrictions have been successful, others are currently pending, with additional challenges expected. As a result, there is uncertainty about the legality and enforceability of many of these restrictions. The timing and efficacy of the vaccination programs in the jurisdictions in which we operate, and the actions implemented to contain the impact of COVID-19 by Federal, state and local governments, limit determining the foreseeable resulting economic effects with any level of predictability.

The extent to which the pandemic may continue to impact our business will depend on future developments, which are highly uncertain and cannot be predicted, but the development of clinical supply materials could be delayed and enrollment of patients in our ongoing studies may be delayed or suspended, as hospitals and clinics in areas where we are conducting trials have shifted resources to cope with the COVID-19 pandemic and may limit access or close clinical facilities due to the COVID-19 pandemic. Additionally, if our trial participants are unable to travel to our clinical study sites as a result of

quarantines, vaccine mandates, travel bans or other restrictions resulting from the COVID-19 pandemic, we may experience higher discontinuation rates or delays in our clinical studies, as occurred in our investigator-sponsored trial of vidofludimus calcium in PSC that was conducted at the Mayo Clinic. Government-imposed quarantines and restrictions may also require us to temporarily terminate our clinical sites. Furthermore, if we determine that our trial participants may suffer from exposure to COVID-19 as a result of their participation in our clinical trials, we may voluntarily terminate certain clinical sites as a safety measure until we reasonably believe that the likelihood of exposure has subsided. As a result, our expected development timelines for our product candidates may be negatively impacted. In addition, the COVID-19 pandemic has affected and may continue to affect the operations of the U.S. Food and Drug Administration and other regulatory authorities, which could result in delays of reviews and approvals with respect to our product candidates. We cannot predict the continuing impact of the COVID-19 pandemic, as consequences of such an event are highly uncertain and subject to change. We do not yet know the full extent of potential delays or impacts that have affected and may continue to affect our business, or our clinical studies in general. The COVID-19 pandemic has already adversely affected our operations and may further materially disrupt or delay our business operations, further divert the attention and efforts of the medical community to coping with COVID-19, disrupt the marketplace in which we operate, and/or have continuing material adverse effects on our operations.

Additionally, Phase 1 trials are ongoing for drug candidates IMU-935 and IMU-856 in Australia. Such Phase 1 trials are customarily conducted in healthy volunteers who have no potential benefits from participation in such trials. Hence, Phase 1 trials usually are subject to more strict evaluation and assessments during pandemic periods. Such Phase 1 trials may for that reason be interrupted or delayed.

Moreover, the various precautionary measures taken by many governmental authorities throughout the world in order to limit the spread of COVID-19 have had and may continue to have an adverse effect on the global markets and global economy generally, including on the availability and pricing of employees, resources, materials, manufacturing and delivery efforts and other aspects of the global economy. There have been business closures and a substantial global reduction in economic activity as a result of COVID-19. Significant uncertainty remains as to the full impact of the COVID-19 pandemic on the global economy. We cannot currently predict the duration of the pandemic or its impact on global or regional economic activity. The COVID-19 pandemic could continue to disrupt our business and operations, interrupt our sources of supply, hamper our ability to raise additional funds or sell our securities, continue to slow down the overall economy or curtail consumer spending.

Our clinical trials could be delayed or suspended as a result of the threatened military action by Russia in the Ukraine.

IMUX US Equity

IMUX · 10-K · period ended 2021-12-31

Item 1. Business.

Item 1A. Risk Factors.

IMUX US Equity☆

IMUX · 10-K · period ended 2021-12-31

Item 1. Business.

Item 1A. Risk Factors.

IMUX US Equity