Item 1A. Risk Factors 24
Item 1B. Unresolved Staff Comments 62
Item 1C. Cybersecurity 62
Item 2. Properties 63
Item 3. Legal Proceedings 63
Item 4. Mine Safety Disclosures 63
Item 6. [Reserved] 63
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 68
Item 8. Financial Statements and Supplementary Data F-1
Item 9A. Controls and Procedures 69
Item 9B. Other Information 70
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 70
PART III 70
Item 10. Directors, Executive Officers and Corporate Governance 70
Item 11. Executive Compensation 79
Item 14. Principal Accountant Fees and Services 92
Item 15. Exhibits and Financial Statement Schedules 92
ABOUT
THIS ANNUAL REPORT
All
references to “we,” “us,” “our,” “Indaptus Therapeutics”, “Indaptus”, “the
Company” and “our company”, in this Annual Report on Form 10- K, or our Annual Report, are to Indaptus Therapeutics,
Inc. (formerly Intec Parent, Inc.) and, where appropriate, its consolidated subsidiaries, Intec Pharma Ltd. and Decoy Biosystems, Inc.
All references to “common stock” and “share capital” refer to common stock and share capital of Indaptus. Our
historical results do not necessarily indicate our expected results for any future periods. Any discrepancies in any table between totals
and sums of the amounts listed are due to rounding. Unless otherwise indicated, or the context otherwise requires, references in this
Annual Report to financial and operational data for a particular year refer to the fiscal year of our Company ended December 31 of that
year.
All
information in this Annual Report relating to shares or price per share reflects the 1-for-28 reverse stock split effected by us on June
26, 2025 which began trading on a post-split basis on the Nasdaq Capital Market on June 27, 2025.
EXPLANATORY
NOTE
On
December 22, 2025, the Company entered into a Securities Purchase Agreement, or the Purchase Agreement, with David E. Lazar,
pursuant to which he agreed to purchase from the Company 300,000 shares of Series AA Preferred Stock and 700,000 shares of Series
AAA Preferred Stock (the “Series AAA Preferred Stock” and, together with the Series AA Preferred Stock, the
“Preferred Stock”) at a purchase price of $6.00 per share of Preferred Stock for aggregate gross proceeds of $6.0
million, subject to the terms and conditions thereunder, or the Investment Transaction. The offering closed on December 23, 2025. As
of the date of this Annual Report, Mr. Lazar is the beneficial owner of approximately 96.4% of common stock of the Company on an
as-converted and fully-diluted basis. As part of the Investment Transaction, the Company plans to pursue a strategic transaction
involving either an investment in or acquisition of an operating business, or the Target Company, referred to as the
“Post-Investment Transaction.” Should such a transaction be approved and successfully finalized, the Company anticipates
that combining with a Target Company will create future growth opportunities for both the Company and its stockholders. The Company
is currently in the process of evaluating its strategic options for a Post-Investment Transaction. For further information, see “Recent
Developments – Lazar Investment Transaction”.
Market
data and certain industry data and forecasts used throughout this Annual Report were obtained from market research databases, consultant
surveys commissioned by us, publicly available information, reports of governmental agencies and industry publications and surveys. Industry
surveys, publications, consultant surveys commissioned by us and forecasts generally state that the information contained therein has
been obtained from sources believed to be reliable. We have relied on certain data from third-party sources, including internal surveys,
industry forecasts and market research, which we believe to be reliable based on our management’s knowledge of the industry. Statements
as to our market position are based on the most currently available data. While we are not aware of any misstatements regarding the industry
data presented in this Annual Report, our estimates involve risks and uncertainties and are subject to change based on various factors,
including those discussed under Part I. Item 1A. “Risk Factors” in this Annual Report.
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Annual Report contains, and management may make, certain forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements other than statements of historical facts contained in this Annual Report on Form 10-K are forward-looking
statements. In some cases, forward-looking statements can be identified by the use of terms such as “believe,” “expect,”
“intend,” “plan,” “may,” “should,” “anticipate,” “could,” “might,”
“seek,” “target,” “will,” “project,” “forecast,” “continue” or
their negatives or variations of these words or other comparable words. These statements include, without limitation, our statements
about: the Investment Transaction; our ability to successfully pursue our business strategy, including identifying and completing a Post-Investment
Transaction; the Company’s financial condition and results of operations, including the financial impact of the Investment Transaction
and related transactions and matters, our product candidates’ development; the anticipated effects of our product candidates; the
market potential and treatment potential of our product candidates; our commercialization, marketing and manufacturing capabilities and
strategy; our expectations about the willingness of healthcare professionals to use our product candidates; our general business strategy
and the plans and objectives of management for future operations; our research and development activities and costs; our future results
of operations and condition; the sufficiency of our cash and cash equivalents to fund our ongoing activities; the impact of current macroeconomic
conditions, geopolitical events and ongoing military conflicts in the Middle East and the war between Russia and Ukraine on our operations,
ability to access capital, and liquidity; and any impact of a pandemic, epidemic or other future health crisis on our business.
The
forward-looking statements in this Annual Report are only predictions and are based largely on our current expectations and projections
about future events and financial trends that we believe may affect our business, financial condition and results of operations. These
forward-looking statements speak only as of the date of this Annual Report and are subject to a number of known and unknown risks, uncertainties
and assumptions, including those described under the sections in this Annual Report entitled “Summary Risk Factors,” Part
I. Item 1A. “Risk Factors” and Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” and elsewhere in this Annual Report.You
should also refer to our quarterly reports on Form 10-Q for future periods and current reports on Form 8-K as we file them with the U.S.
Securities and Exchange Commission, or the SEC, and to other materials we may furnish to the public from time to time through SEC filings.
Because
forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some
of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events
and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially
from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties
may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties.
Except
as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as
a result of any new information, future events, changed circumstances or otherwise. We intend the forward-looking statements contained
in this Annual Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities
Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act.
Summary
Risk Factors
The
principal factors and uncertainties that make investing in our common stock risky, include, among others:
PART
I
Item
1. Business.
Overview
We
are a clinical biotechnology company that has developed a novel and patented systemically-administered anti-cancer and anti-viral immunotherapy.
We have evolved from more than a century of immunotherapy advances. Our approach is based on the hypothesis that efficient activation
of both innate and adaptive immune cells and associated anti-tumor and anti-viral immune responses will require a multi-targeted package
of immune system activating signals that can be administered safely intravenously. Our patented technology is composed of single strains
of attenuated and killed, non-pathogenic, Gram-negative bacteria, designed to have reduced i.v. toxicity, but largely uncompromised ability
to prime or activate many of the cellular components of innate and adaptive immunity. This approach has led to broad anti-tumor and anti-viral
activity in preclinical models, including durable anti-tumor response synergy observed with each of four different classes of existing
agents, including NSAIDs, checkpoint therapy, targeted antibody therapy and low-dose chemotherapy. Tumor eradication by our technology
was associated with induction of both innate and adaptive immunological memory and, importantly, did not require provision of or targeting
a tumor antigen in preclinical models. In 2023, we initiated a Phase 1 clinical trial with our lead clinical candidate, Decoy20, in patients with advanced solid tumors where
currently approved therapies have failed. In May 2025, we decided to conclude enrollment in the dosing of Decoy20 as a monotherapy and
focus on the combination study of Decoy20 with BeOne’s anti-PD-1 antibody, Tislelizumab for the treatment of participants with advanced
solid tumors, or the Combination Study. As of the date of this Annual Report on Form 10-K, we have discontinued further enrollment in
the Combination Study and there are no participants remaining in the study. We do not have any current plans to initiate a new clinical
trial.
Recent
Developments
Lazar
Investment Transaction
On
December 22, 2025, we entered into the Purchase Agreement with Mr. Lazar, pursuant to which he agreed to purchase from us 300,000 shares
of Series AA Preferred Stock and 700,000 shares of Series AAA Preferred Stock at a purchase price of $6.00 per share of Preferred Stock
for aggregate gross proceeds of $6.0 million, subject to the terms and conditions thereunder. The offering closed on December 23, 2025.
Pursuant
to the Purchase Agreement, we held a special meeting of stockholders on February 26, 2026, where the stockholders approved the following
actions (i) the issuance of common stock to Mr. Lazar in compliance with the rules and regulations of Nasdaq (without regard to any limitations
on conversion set forth in the applicable Certificate of Designations) upon conversion of the shares of Preferred Stock, (ii) an amendment
to our amended and restated certificate of incorporation that increases the authorized shares of common stock from 200,000,000 to 1,000,000,000
shares at the discretion of the Board, (iii) an amendment to our amended and restated certificate of incorporation that permits future
shareholder action by written consent of the majority of shareholders, (iv) the election of Jerome Jabbour as Class I and Matthew McMurdo
as Class III directors (each a designee of Mr. Lazar) to the Board of Directors to serve until the 2028 and 2027 annual meeting of stockholders,
respectively, and (v) a reverse stock split of the common stock of the Company in the range to be determined by the Board.
Each
share of Series AA Preferred Stock is convertible into 20 shares of our common stock and each share of Series AAA Preferred Stock is
convertible into 150 shares of common stock for a combined total of 111,000,000 shares of common stock.
In
connection with the Investment Transaction, our past Board members Mr. Robert E. Martell and Ms. Hila Karah resigned from the Board and
Mr. Lazar and Mr. Avraham Ben-Tzvi (a designee of Mr. Lazar) were appointed to fill the vacancies created by their resignations. Both
Mr. Lazar and Mr. Ben-Tzvi currently serve as Class I directors with a term expiring at our 2028 annual meeting of stockholders. Mr.
Lazar was appointed as the Chairman of the Board taking over the role held by Dr. Roger Pomerantz. However, Dr. Pomerantz continued
to serve as a member of the Board of Directors. Additionally, the Board appointed David Natan, also a designee of Mr. Lazar, to the Board
effective January 7, 2026 as a Class II member to serve for a term ending at the 2026 annual meeting of stockholders.
Further,
pursuant to the terms of the Purchase Agreement, we entered into employment modification agreements with each of Jeffrey A. Meckler,
Michael J. Newman, Ph.D., Nir Sassi and Walt A. Linscott, Esq. (collectively, the “Executive Officers”). Pursuant to the
terms of the employment modification agreements, or the Modification Agreements, each of the Executive Officers agreed to remain employed
in their existing roles except for Mr. Meckler who agreed to change his title to Co-Chief Executive Officer. The Executive Officers agreed
to modify certain terms of their original employment agreements, granted release of claims relating to their employment, and received
certain cash and equity payments at the closing of the Investment Transaction. More recently, in January of 2026, the employment agreements
of Mr. Meckler and Mr. Newman were further amended whereby their salaries were reduced to $60,000 per annum. Further, pursuant to the
Investment Transaction, each of the Executive Officers entered into a voting agreement, dated December 22, 2025, pursuant to which each
of the Executive Officers agreed, in their capacity as stockholders of the Company, to vote all of their shares of common stock in favor
of all proposals at the special meeting of stockholders held on February 26, 2026.
As
indicated above, following the Investment Transaction, we plan to pursue a strategic transaction involving either an investment in or
acquisition of a Target Company. Should such a transaction be approved and successfully finalized, the Company anticipates that combining
with a Target Company will create future growth opportunities for both the Company and its stockholders. We are currently in the process
of evaluating our strategic options for a Post-Investment Transaction.
Warrant
Repricing
On
February 11, 2026, we entered into warrant repricing agreements, or the Repricing Agreements, with certain holders, or the Executing
Holders, of warrants to purchase an aggregate of 913,638 shares of our common stock that were originally issued in financing rounds during
2024 and 2025 (financing rounds discussed below) at exercise prices ranging from $8.30 to $47.60 (the “Executing Warrants”).
Pursuant to the Repricing Agreements, we agreed to reduce the per share exercise prices of the Executing Warrants to $1.75, which is
equal to the “Minimum Price” as calculated in accordance with the Nasdaq rules, or the Exercise Price Reduction. As a condition
to the Exercise Price Reduction, the Executing Holders agreed to enter into a voting agreement pursuant to which the Executing Holders
agreed to vote all of the shares of common stock held by the Executing Holders in favor of all proposals at the special meeting of stockholders
held on February 26, 2026.
In
addition, on February 11, 2026, with respect to the remaining warrants and placement agent warrants to purchase an aggregate of 762,787
shares of common stock that were issued in the same financing rounds described above, our Board of Directors unilaterally reduced their
per share exercise prices to $1.75. Other than the reduction in the per share exercise price, all other terms and provisions of the warrants
described above remained unchanged.
ATM
Offering
In
June 2022, we entered into an at-the-market offering agreement (the “ATM Agreement”) with H.C. Wainwright & Co. LLC (“Wainwright”),
which was amended on September 1, 2022, relating to the offer and sale of shares of our common stock having an aggregate offering price
of up to $6.3 million. The issuances and sales of common stock by us under the ATM Agreement were being made pursuant to “shelf”
registration statements on Form S-3 filed with the SEC on September 1, 2022 and declared effective on September 9, 2022 and most recently
on August 13, 2025 and declared effective on August 20, 2025. Our ability to issue shares under the shelf registration statement on Form
S-3 is limited by General Instruction I.B.6 to Form S-3. In September 2025, we sold 520,000 shares of our common stock for aggregate
gross proceeds of approximately $2.3 million.
June
2025 Convertible Note Financing
In
June 2025, we completed a private placement, or the June 2025 Financing, of convertible notes to certain investors, including our then
Chief Executive Officer, Jeffrey Meckler, in the aggregate principal amount of approximately $5.7 million and warrants to purchase shares
of common stock. The notes automatically converted in July 2025 into 501,566 shares of our common stock and pre-funded warrants to purchase
190,795 shares of our common stock at a conversion price of $8.30 per share. In connection with the offering, we also issued to the investors
warrants to purchase 1,384,722 shares of our common stock, exercisable at $8.30 per share and expiring on July 27, 2030. The warrants
issued in the June 2025 Financing were the subject of warrant repricing completed in February 2026. See “Warrant Repricing”
on page 6 of this Annual Report.
Reverse
Split
On
June 26, 2025, we effected a 1-for-28 reverse stock split of our common stock and began trading on a post-split basis on the Nasdaq Capital
Market on June 27, 2025, which resulted in our regaining compliance with Nasdaq’s minimum bid price requirement. As a result of
the reverse stock split, every 28 shares of outstanding common stock were combined into one share of common stock. The reverse stock
split decreased our outstanding common stock from 16,946,528 shares to 604,963 shares as of that date. In addition, a proportionate adjustment
was made to the per share exercise price and the number of shares issuable upon the exercise of all outstanding options and warrants
entitling the holders to purchase common stock. All share and per share amounts in this annual report on Form 10-K and the consolidated
financial statements have been retroactively adjusted to reflect the reverse stock split.
February
2025 Equity Line
On
February 12, 2025, we entered into a Standby Equity Purchase Agreement, or the SEPA with YA II PN, LTD., a Cayman Islands exempt
limited company, or Yorkville. Pursuant to the SEPA, we have the right, but not the obligation, to sell to Yorkville from time to
time up to $20.0 million of our common stock, during the 36 months following the execution of the Purchase Agreement, subject to the
restrictions and satisfaction of the conditions in the SEPA. At our option, the shares of common stock would be purchased by
Yorkville from time to time at a price equal to 97% of the lowest of the three daily VWAPs during a three consecutive trading day
period commencing on the date that we, subject to certain limitations, deliver a notice to Yorkville that the Company is committing
Yorkville to purchase such shares of common stock. We may also specify a certain minimum acceptable price per share in each Advance.
As consideration for Yorkville’s irrevocable commitment to purchase our shares, we issued to Yorkville 10,927 shares of common
stock. Under the applicable rules of Nasdaq and pursuant to the SEPA, in no event may we issue or sell to Yorkville more than
100,830 shares of common stock, or the Exchange Cap, which is 19.99% of the shares of common stock outstanding immediately prior to
the execution of the SEPA, unless (i) we obtain stockholder approval to issue shares of common stock in excess of the Exchange Cap
or (ii) the average price of all applicable sales of common stock under the SEPA equals or exceeds $22.882 per share (which
represents the lower of (i) the Nasdaq Official Closing Price (as reflected on Nasdaq.com) on the trading day immediately preceding
the effective date or (ii) the average Nasdaq Official Closing Price of the common stock (as reflected on Nasdaq.com) for the five
trading days immediately preceding the effective date). In addition, effective February 12, 2025, we terminated the purchase
agreement that we entered into with Lincoln Park Capital Fund, LLC in December 2022. As of March 16, 2026, we sold and issued 89,902
shares of common stock under the SEPA for aggregate net proceeds of approximately $1.74 million, after deducting offering expenses
in the amount of approximately $0.1 million. Effective March 11, 2026, we terminated the SEPA with Yorkville, and the SEPA is no
longer in effect.
January
2025 Financing
On
January 12, 2025, we entered into securities purchase agreements, or the January 2025 Purchase Agreements, with certain institutional
and accredited investors, or the January 2025 Purchasers. The January 2025 Purchase Agreements provide for the sale and issuance by us
of an aggregate of: (i) 75,335 shares of our common stock and (ii) warrants to purchase 75,335 shares of common stock in a private placement,
or the January 2025 Warrants. The shares and January 2025 Warrants were sold on a combined basis for consideration of $29.82 for one
share and a January 2025 Warrant. The exercise price of the January 2025 Warrants is $26.32 per share.
The
January 2025 Warrants were immediately exercisable upon issuance and will expire five years following the date of issuance. The January
2025 Warrants contain standard adjustments to the exercise price including for stock splits, stock dividends and reorganizations. In
lieu of making the cash payment otherwise contemplated to be made upon exercise in payment of the aggregate exercise price, the holder
may, in the event the shares underlying the January 2025 Warrants are not registered under the Securities Act, elect instead to receive
upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth
in the January 2025 Warrants. Under the terms of the January 2025 Warrants, a holder (together with its affiliates) may not exercise
any portion of its January 2025 Warrant to the extent that the holder would beneficially own more than 4.99% or 9.99%, depending on the
individual investor, of the outstanding common stock immediately after exercise, or the Beneficial Ownership Limitation, except that
upon at least 61 days’ prior notice from the holder to us, the holder may increase the Beneficial Ownership Limitation, provided
that the Beneficial Ownership Limitation in no event exceeds 19.99%.
Paulson
Investment Company, LLC, or Paulson, served as the exclusive placement agent for the issuance and sale of the securities. As compensation
for such placement agent services, we paid Paulson an aggregate cash fee equal to 7.0% of the gross proceeds received by us from the
offering, and a non-accountable expense of $25,000. As additional compensation to Paulson, we issued to Paulson (or its designees) a
warrant, or the January 2025 Placement Agent Warrants, to purchase an aggregate of 5,273 shares at an exercise price per share equal
to $32.9 per share. The January 2025 Placement Agent Warrants are exercisable six months from the date of issuance and expire on the
fifth anniversary of the issue date. The January 2025 Warrants and the January 2025 Placement Agent Warrants were the subject of warrant
repricing completed in February 2026. See “Warrant Repricing” on page 6 of this Annual Report.
November
2024 Financing
On
November 22, 2024, we entered into securities purchase agreements, or the November 2024 Purchase Agreements, with certain institutional
and accredited investors, or the November 2024 Purchasers. The November 2024 Purchase Agreements provide for the sale and issuance by
us of an aggregate of: (i) 64,893 shares of our common stock in a registered direct offering and (ii) warrants to purchase 64,893 shares
of common stock in a private placement, or the November 2024 Warrants. The shares and November 2024 Warrants were sold on a combined
basis for consideration of $32.9 for one share and a November 2024 Warrant. The exercise price of the November 2024 Warrants is $29.4
per share. One of the November 2024 Purchasers was our then Chief Executive Officer, Mr. Jeffrey Meckler, who purchased 1,519 shares
and November 2024 Warrants to purchase 1,519 shares, or the Affiliate Securities, at the same price and upon the same terms as the other
November 2024 Purchasers.
The
November 2024 Warrants were immediately exercisable upon issuance and will expire five years following the date of issuance. The November
2024 Warrants contain standard adjustments to the exercise price including for stock splits, stock dividends and reorganizations. In
lieu of making the cash payment otherwise contemplated to be made upon exercise in payment of the aggregate exercise price, the holder
may, in the event the shares underlying the November 2024 Warrants are not registered under the Securities Act, elect instead to receive
upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth
in the November 2024 Warrants. Under the terms of the November 2024 Warrants, a holder (together with its affiliates) may not exercise
any portion of its November 2024 Warrant to the extent that the holder would beneficially own more than the Beneficial Ownership Limitation,
except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the Beneficial Ownership Limitation,
provided that the Beneficial Ownership Limitation in no event exceeds 19.99%.
Paulson
served as the exclusive placement agent for the issuance and sale of the securities. As compensation for such placement agent services,
we paid Paulson an aggregate cash fee equal to 7.0% of the gross proceeds received by us from the offering (excluding the Affiliate Securities),
and a non-accountable expense of $25,000. As additional compensation to Paulson, we issued to the Paulson (or its designees) a warrant,
or the November 2024 Placement Agent Warrants, to purchase an aggregate of 4,436 shares at an exercise price per share equal to $36.75
per share. The November 2024 Placement Agent Warrants are exercisable six months from the date of issuance and expire on the fifth anniversary
of the issue date. The November 2024 Warrants and the November 2024 Placement Agent Warrants were the subject of warrant repricing completed
in February 2026. See “Warrant Repricing” on page 6 of this Annual Report.
August
2024 Financing
On
August 8, 2024, we completed a registered direct offering, pursuant to which we sold and issued to certain investors, including one of
our officers, 58,708 shares of common stock. In addition, in a concurrent private placement, we issued to the investors unregistered
warrants to purchase 58,708 shares of common stock, or the August 2024 Private Placement. The warrants were immediately exercisable at
an exercise price of $47.60 per share and expire five years from the date of issuance. The combined purchase price for one share of common
stock and one warrant was $51.1, resulting in gross proceeds of approximately $3.0 million, before deducting placement agent and other
offering expenses in the amount of approximately $0.5 million. The warrants issued in the August 2024 Private Placement were the subject
of warrant repricing completed in February 2026. See “Warrant Repricing” on page 6 of this Annual Report.
Background
Approved
immunotherapies, such as Interluekin-2, Interferon-alpha and the more recently approved “checkpoint” and CAR-T therapies
produce durable responses in a few percent to about fifty percent of patients across about a dozen out of over one hundred different
types of cancer. Although checkpoint therapies are able to effectively cure many previously incurable patients, only about 15% of patients
receiving this type of therapy respond. The main limitation of existing immunotherapies is that they each activate only one or a small
number of key steps in either the innate or adaptive immune system, but there is general agreement that highly efficient cancer immunotherapy
will require activation of both innate and adaptive immunity. The human body’s innate and adaptive immune systems are each capable
of cell-mediated destruction of tumors if the tumor cells are recognized as foreign or damaged. Activation of innate and adaptive responses
is also dependent on immune cells sensing the presence of “danger.” The most potent immune cell activating danger signals
are released by bacteria and viruses in the setting of infection, and include agonists of immune cell receptors, such as Toll-Like (TLR),
NOD and STING. Bacterial danger signals, including TLR agonists are called pathogen-associated molecular patterns (PAMPs) and can activate
both innate and adaptive immune cells, including antigen-presenting cells, promoting innate (NK, macrophage) and adaptive (T cell-mediated)
destruction of tumors.
The
oldest form of cancer immunotherapy involves the provision of decoy danger signals from bacteria. It was based on the long-standing observation
of tumor regression in the setting of bacterial infection. Treatment of cancer patients with heat-killed bacteria, or Coley’s toxins,
was established in 1891 and used for 70 years with significant success. For example, ≥5-year survival was reported for 45% of 432
inoperable sarcoma, lymphoma, melanoma, and carcinoma patients. Despite this success, several limitations led to the abandonment of this
approach by the pharmaceutical industry. Although there was an indication that Coley’s toxins worked best when administered intravenously
(i.v.), it was too toxic when given by this route, limiting the approach to local administration, which produced highly variable results.
Another limitation was lack of knowledge about the mechanism of action, preventing optimization and standardization of manufacturing,
leading to another source of variability in clinical response. Due to this high variability, Coley’s toxins was not grandfathered-in
as an approved drug by the FDA in 1963 and was supplanted by radiation and chemotherapy, despite the fact that these more modern approaches
rarely produce durable responses in advanced cancer patients. Scientists now understand the mechanism of action of Coley’s toxins.
Gram-negative bacteria contain multiple immune-stimulating danger signals, including TLR agonists such as lipopolysaccharide (LPS). Bacteria
and purified or mono-specific TLR agonists, including LPS derivatives, have been validated and approved for prevention and treatment
of early stage cancer. However, a safe and effective TLR agonist-based approach for advanced cancer has been elusive, possibly due to
limitations in the ability of intratumorally administered, mono-specific TLR agonists to induce potent, systemic anti-tumor immune responses.
In addition, the intratumoral approach is not feasible with all tumor types or patients. Our hypothesis is that an effective TLR agonist-based
immunotherapy for advanced cancer will require invention of a packaged, multi-TLR agonist or multi-danger signal product that is modified
or attenuated to allow safe i.v. administration.
Our
Approach
Our
patented approach is based on the hypothesis that efficient activation of both innate and adaptive immune cells and associated anti-tumor
immune responses can be achieved by using intact bacteria, containing multiple PAMPs, which have been attenuated so that they can be
administered safely intravenously. Because LPS appears to be the most important contributor to both toxicity and efficacy, our patented
product candidates are single strains of killed, non-pathogenic Gram-negative bacteria that have been treated in an effort to kill the
bacteria and significantly reduce, but not completely eliminate, the cell surface LPS-endotoxin activity. Our product candidates are
designed to have enhanced sufficient residual LPS to synergize with other PAMPs in the bacteria to efficiently prime innate and adaptive
immune pathways. This approach has led to broad anti-tumor and anti-viral activity in preclinical models, including durable anti-tumor
response synergy observed with each of four different classes of existing agents, including NSAIDs, checkpoint therapy, targeted antibody
therapy and low-dose chemotherapy. Tumor eradication by our technology is designed to produce both innate and adaptive immunological
memory and, importantly, not require provision of an exogenous tumor antigen, potentially due to the ability of LPS and other PAMPS to
activate dendritic cells that have already captured a tumor antigen.
All
immune cells can participate in killing of tumors and viruses. As illustrated below, current therapies activate only one or a small subset
of both pathways and cure only a small percentage of patients.
Our
technology, however, is designed to synergize with existing therapies to activate both innate and adaptive immune cells, inducing efficient
anti- tumor immune responses with a wide safety margin. Induction of adaptive anti-tumor immune responses and immunological memory by
our technology does not require an exogenous tumor antigen.
Innate
and adaptive immune responses require identification of a tumor as foreign or not self. However, most steps required for migration and
activation of immune cells are unrelated to the tumor or are tumor non-specific. All innate and adaptive non-specific steps are induced
or promoted by immune system “danger signal” molecules, such as those found in our bacteria. Bacteria-derived danger signals
are also able to enhance the processing and recognition of tumor antigens, which are frequently present, but not “seen” by
the immune system.
Results
Preclinical
Trials
In
preclinical models, Indaptus treated bacteria induced less systemic toxicity than untreated bacteria but were still able to activate
innate and adaptive immune responses. Despite exhibiting reduced in vivo pyrogenicity and a higher maximally tolerated dose, our bacteria
were able to induce secretion of most cytokines and chemokines from mouse and human immune cells in vitro at levels comparable to those
seen with untreated bacteria. Our bacteria were also able to synergize with human immune cells to kill human tumor cells in vitro.
We
have observed significant single agent anti-tumor activity and/or combination therapy-mediated regression with durable responses in established
non-Hodgkin’s lymphoma, as well as colorectal, hepatocellular and pancreatic carcinoma in preclinical syngeneic and human tumor
xenograft models. Our bacteria synergized with each of four different classes of approved agents in preclinical models, including NSAIDs,
checkpoint therapy, targeted antibody therapy and low-dose chemotherapy to induce tumor regression, providing significant flexibility
for targeting of diverse types of cancer. Our technology is designed to eradicate tumors via activation of both innate (NK cell) and
adaptive (CD4+ and CD8+ T cell) mechanisms, with the goal of producing both innate and adaptive immunological memory. In our preclinical
studies, tumor eradication occurred at non-toxic doses of our bacteria, with a very wide (10 to ≥33-fold) therapeutic index. Notable
mechanism of action information has also been obtained, via gene expression analysis with treated tumors and plasma cytokine analysis,
demonstrating that our combination technology has the potential to turn “cold” tumors into “hot” tumors and induce,
activate or recruit innate and adaptive genes, cells and pathways. Immune cell pre-depletion studies have demonstrated that both innate
(NK) and adaptive (CD4 T and CD8 T) immune cells are involved in tumor eradication. We have also demonstrated significant single agent
activity against chronic Hepatitis B virus (HBV) and human immunodeficiency virus (HIV) infection in standard preclinical models.
We
have carried out successful cGMP manufacturing and stability studies with our lead product candidate, Decoy20. In addition, IND-enabling
multi-dose toxicology studies have been completed and did not produce sustained induction of factors that are associated with cytokine
release syndrome.
The
chart above demonstrates that our bacteria synergize with Anti-PD-1 Checkpoint therapy to regress established mouse hepatocellular carcinoma
(HCC) Tumors. All mice (all groups) received a low-dose, non-steroidal anti-inflammatory drug (NSAID/Indomethacin), which increases the
number of regressions in the combination setting. Most regressions were durable, with 5/6 combination regressions stable through termination
at Day 91 and in a repeat experiment through termination at Day 143 (see next Figure below) (CR = complete response or complete regression).
The repeat experiment also produced 5/6 or 6/6 durable regressions per group over a 33-fold Indaptus concentration range and an absence
of safety concerns, demonstrating a very wide therapeutic index. Similar tumor eradication results have been obtained by combining our
bacteria with low-dose chemotherapy in a mouse non-Hodgkin’s lymphoma model. Eradication of established non-Hodgkin’s lymphoma
tumors by our technology has also been observed with human tumor xenografts, via activation of the innate immune system. Development
and preclinical efficacy characterization of a systemically administered multiple Toll-like receptor (TLR) agonist for antitumor immunotherapy
[abstract]. In: Proceedings of the Fourth CRI-CIMT-EATI-AACR International Cancer Immunotherapy Conference: Translating Science into
Survival; Sept 30-Oct 3, 2018; New York, NY. Philadelphia (PA): AACR; Cancer Immunol Res 2019;7(2 Suppl):Abstract
nr B178.
The
chart above illustrates that the synergistic tumor eradication by our technology and Anti-PD-1 produces immunological memory. Established
tumors were regressed in 11 mice by combination treatment as in the Figure above and then the mice were re-challenged with fresh HCC
tumor cells, without further treatment. All of the new tumors were rejected. Similar results have been obtained by combining our bacteria
with low-dose chemotherapy in a non-Hodgkin’s lymphoma model.
Clinical
Trials
In
May 2022, the U.S. Food and Drug Administration, or the FDA, allowed us to proceed under our IND for a Phase 1 clinical trial in patients
with advanced solid tumors where currently approved therapies have failed. In December 2022, we initiated an open label, multi-center,
dose escalation and expansion, single arm (monotherapy) Phase 1 study conducted in 2 parts. The Phase 1 study began with single dose
administration and was followed with continuous weekly dosing of Decoy20 in tumor-specific expansion cohorts. The study enrolled patients
with any one of six advanced/metastatic solid tumors, who have exhausted approved treatment options. The study’s objectives were
to assess the safety and tolerability of Decoy20, to determine the maximum tolerated dose, the optimal biologically active and recommended
Phase 2 dose, as well as to assess Decoy20 pharmacokinetics (PK), pharmacodynamics and clinical activity. The primary endpoints of the
study were incidence, relatedness and severity of adverse events and treatment-emergent adverse events and determining the number of
subjects per cohort with dose limiting toxicity-based adverse events. Secondary endpoints included the incidence of anti-drug antibodies
and neutralizing antibodies pre- and post-treatment, change in Decoy20 PK parameters over time, objective response rate and duration
of response.
In
August 2023, we evaluated the first four patients who received a single dose of 7 x 10^7 Decoy20 in Part 1 of the Phase 1 clinical trial.
All four patients who enrolled were evaluable in the first cohort. These patients experienced generally anticipated transient adverse
events including hemodynamic changes such as changes in pulse or blood pressure that resolved within 30 minutes and laboratory abnormalities
such as grade 1-3 elevations in transaminases (liver function tests) and grade 4 reductions in lymphocytes that generally resolved within
three days. One patient had a dose-limiting toxicity of grade 3 bradycardia (slow heart rate) and grade 2 hypotension (low blood pressure)
which resolved within approximately 90 minutes with i.v. fluids. Patients also experienced transient induction of over 50 different biomarkers
associated with innate and adaptive anti-tumor immune responses. After the end of infusion, Decoy20 was cleared from the blood within
30 to 120 minutes. Peak cytokine and chemokine induction occurred within ~4 to 24 hours and most cytokine/chemokines returned to the
patient’s respective baseline by 24-72 hours. This rapid clearance and associated transient cytokine/chemokine induction are desired
to avoid prolonged toxicity, often associated with longer term cytokine exposure.
In
September 2023, we began the second cohort of the Phase 1 clinical trial after receiving authorization from the Safety Review Committee.
The second cohort dose was a reduction from 7 x 10^7 Decoy20 dose to 3 x 10^7 Decoy20. In March 2024, we completed the second cohort
of patients who received a single dose of 3 x 10^7 Decoy20 in Phase 1 of the clinical trial. Patients on the second (lower dose) cohort
experienced adverse events similar in frequency and severity to the higher dose cohort with one dose-limiting toxicity of grade 3 ALT
elevation that required one week to resolve. Pharmacodynamic effects included transient induction of multiple biomarkers. Clearance of
Decoy20 was similarly rapid. Following authorization from the Safety Review Committee, we advanced into the weekly dosing part of the
trial.
In
May and June 2024, we enrolled two additional patients in the first cohort who received a single dose of 7 x 10^7 Decoy20, and in August
2024 we received the authorization from the Safety Review Committee to initiate the weekly dosing with 7 x 10^7 Decoy20.
As
of October 2024, we completed one month of the weekly dosing part in the first six participants at the 3 x 10^7 Decoy20 dose and following
the review of the safety data by the Safety Review Committee we received the authorization to initiate unrestricted enrollment of participants
at the 3 x 10^7 Decoy20 dose. By May 2025, we had enrolled 13 participants on Decoy20 as a single dose and 32 participants in the weekly
dosing among the two Decoy20 dose levels. In May 2025, we decided to conclude enrollment in the weekly dosing and focus on the Combination Study, as further described below. We have observed early signs of potential benefits emerging with some
participants with stable disease. As expected with the mechanism of action of Decoy20, we have seen adverse events of cytokine release
syndrome (CRS) in six participants that have resolved within 24-72 hours.
In
October 2024, we entered into a clinical supply agreement, or the Supply Agreement, with BeOne Medicines (formerly known as BeiGene Switzerland
GmbH), to advance clinical evaluation of Decoy20 in combination with BeOne’s anti-PD-1 antibody, Tislelizumab, or the BeOne Product,
for the treatment of participants with advanced solid tumors, or the Combination Study. This Combination Study builds on preclinical
results where Decoy20, combined with a PD-1 inhibitor, demonstrated tumor eradication. By November 2025, we had enrolled six evaluable
participants in the Combination Study, and we have seen one related serious adverse event of CRS in one participant that has resolved
within 72 hours. Following initial efficacy evaluations, we had three participants who experienced disease progression and had to discontinue
from the study, and we had evidence of stable disease assessment in three subjects. Of the three stable disease participants, one subject
with squamous cell carcinoma of the head and neck developed disease progression at the next restaging assessment and discontinued from
the study; one subject with pancreatic adenocarcinoma maintained stable disease with Decoy20 for more than four months, with tislelizumab
held between weeks 10-20 for autoimmune thyroiditis, before discontinuing after 6 months with disease progression; and the third subject
with hepatocellular carcinoma had stable disease for four months before discontinuing for disease progression after six months. The Combination
Study assessed safety, dose optimization, and early signs of anti-tumor activity in participants with advanced solid tumors, previously
treated with a checkpoint inhibitor or with tumors typically unresponsive to checkpoint inhibitors. Currently, we have discontinued further
enrollment and there are no participants remaining in the study. We do not have any current plans to initiate a new clinical trial.
Under
the terms of the Supply Agreement, we covered all costs associated with the Combination Study, excluding the cost of the BeOne
Product. BeOne supplied the BeOne Product for use in the study, and we supplied Decoy20 for the purposes of the Combination Study.
Following the discontinuation of the Combination Study, we provided BeOne notice of termination per the Supply Agreement.
Historically,
we have operated virtually with a team of highly experienced consultants and advisors, carrying out research and development at contract
research organizations (CROs). We have developed patented treatment methods (and associated patented compositions) for attenuation and
killing of non-pathogenic, Gram-negative bacteria. Since our inception, we have funded our operations
primarily through public and private offerings of our equity securities.
Governmental
Regulation
Among
others, the FDA and comparable regulatory authorities in state and local jurisdictions and in other countries impose substantial and
burdensome requirements upon companies involved in the clinical development, manufacture, marketing and distribution of drugs such as
those we are developing. These agencies and other federal, state and local entities regulate, among other things, the research and development,
testing, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, approval, advertising and promotion,
distribution, post-approval monitoring and reporting, sampling and export and import of our product candidates.
U.S.
Regulation of Drugs and Biologics
In
the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act (FDCA) and its implementing regulations, and
biologics under the FDCA and the Public Health Service Act (PHSA) and its implementing regulations. FDA approval is required before any
new unapproved drug or dosage form, including a new use of a previously approved drug, can be marketed in the United States. Drugs and
biologics are also subject to other federal, state, and local statutes and regulations. The process required by the FDA before product
candidates may be marketed in the United States generally involves the following:
Once
a product candidate is identified for development, it enters the preclinical testing stage. Preclinical tests include laboratory evaluations
of product chemistry, toxicity and formulation, as well as animal studies. An IND sponsor must submit the results of the preclinical
tests, together with manufacturing information and analytical data, to the FDA as part of an IND. An IND is a request for authorization
from the FDA to administer an investigational drug product to humans. An IND will also include a protocol detailing, among other things,
the objectives of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated,
if the trial includes an efficacy evaluation. Some preclinical testing may continue even after the IND is submitted. The 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. Clinical
holds also may be imposed by the FDA at any time before or during clinical trials due to safety concerns about on-going or proposed clinical
trials or non-compliance with specific FDA requirements, and the trials may not begin 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 in accordance with GCPs, which include
the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical
trials must be conducted under protocols detailing the objectives of the trial, dosing procedures, subject selection and exclusion criteria
and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND, and a separate
submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent
protocol amendments. While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies
performed since the last progress report, among other information, must be submitted at least annually to the FDA, and written IND safety
reports must be submitted to the FDA and investigators for serious and unexpected suspected adverse events, findings from other studies
suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant
risk to humans, and any clinically important increased incidence of a serious suspected adverse reaction compared to that listed in the
protocol or investigator brochure.
Furthermore,
an independent IRB at each institution participating in the clinical trial must review and approve each protocol before a clinical trial
commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to
each trial subject or his or her legal representative, monitor the study until completed and otherwise comply with IRB regulations. The
FDA or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients
are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its 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 organized
by the sponsor, known as a data safety monitoring board or committee. Depending on its charter, this group may determine whether a trial
may move forward at designated check points based on access to certain data from the trial. There are also requirements governing the
reporting of ongoing clinical studies and clinical study results to public registries, including clinicaltrials.gov.
The
clinical investigation of a drug is generally divided into three phases. Although the phases are usually conducted sequentially, they
may overlap or be combined.
Post-approval
trials, sometimes referred to as Phase 4 studies, may be conducted after initial marketing approval. These trials are used to gain additional
experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance
of Phase 4 clinical trials as a condition of approval of an NDA.
During
the development of a product candidate, sponsors are given opportunities to meet with the FDA at certain points. These points may be
prior to submission of an IND, at the end of Phase 2, and before an NDA or BLA is submitted. Meetings at other times may be requested.
These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide
advice, and for the sponsor and the FDA to reach agreement on the next phase of development. Concurrent with clinical trials, companies
usually complete additional animal studies and must also develop additional information about the chemistry and physical characteristics
of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMPs. The manufacturing
process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer
must develop methods for testing the identity, strength, quality and purity of the final drug. In addition, appropriate packaging must
be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable
deterioration over its shelf life.
NDA
and BLA Review Process
Assuming
successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development,
nonclinical studies and clinical trials are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for
one or more indications. The NDA or BLA must include all relevant data available from pertinent preclinical studies and clinical trials,
including negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s
chemistry, manufacturing and controls and proposed labeling, among other things. Data can come from company-sponsored clinical studies
intended to test the safety and effectiveness of the product, or from a number of alternative sources, including studies initiated and
sponsored by investigators. The submission of an NDA or BLA requires payment of a substantial application user fee to the FDA, unless
a waiver or exemption applies.
In
addition, under the Pediatric Research Equity Act, or PREA, an NDA or BLA or supplement to an NDA or BLA must contain data to assess
the safety and effectiveness of the biological product candidate for the claimed indications in all relevant pediatric subpopulations
and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The Food and Drug
Administration Safety and Innovation Act requires that a sponsor who is planning to submit a marketing application for a drug or biological
product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit
an initial pediatric study plan within sixty days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA. Unless
otherwise required by regulation, PREA does not apply to any drug or biological product for an indication for which orphan designation
has been granted.
Within
60 days following submission of the application, the FDA reviews the submitted BLA or NDA to determine if the application is substantially
complete before the agency accepts it for filing. The FDA may refuse to file any NDA or BLA that it deems incomplete or not properly
reviewable at the time of submission and may request additional information. In this event, the NDA or BLA must be resubmitted with the
additional information. Once an NDA or BLA has been accepted for filing, the FDA’s goal is to review standard applications within
ten months after the filing date, or, if the application qualifies for priority review, six months after the FDA accepts the application
for filing. In both standard and priority reviews, the review process may also be extended by FDA requests for additional information
or clarification. The FDA reviews an NDA to determine, among other things, whether a product candidate is safe and effective for its
intended use and whether its manufacturing is sufficient to assure and preserve the product’s identity, strength, quality and purity.
The FDA reviews a BLA to determine, among other things, whether a product candidate is safe, pure and potent and the facility in which
it is manufactured, processed, packed or held meets standards designed to assure the product’s continued safety, purity and potency.
When reviewing an NDA or BLA, the FDA may convene an advisory committee to provide clinical insight on application review questions.
The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Before
approving an NDA or BLA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not
approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements
and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA or
BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.
After
the FDA evaluates the NDA or BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug
substance will be produced, the FDA may issue an approval letter or a Complete Response Letter, or CRL. An approval letter authorizes
commercial marketing of the product with specific prescribing information 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 usually describes the specific deficiencies
in the NDA or BLA identified by the FDA and may require additional clinical data, including additional clinical trials, or other significant
and time-consuming requirements related to clinical trials, nonclinical studies or manufacturing. If a CRL is issued, the sponsor must
resubmit the NDA or BLA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data
and information are submitted, the FDA may decide that the NDA or BLA does not satisfy the criteria for approval.
If
regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the
indicated uses for which such product may be marketed. For example, the FDA may approve the NDA or BLA with a Risk Evaluation and Mitigation
Strategy, or REMS, to ensure the benefits of the product outweigh its risks. A REMS is a safety strategy to manage a known or potential
serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use,
and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods,
patient registries and other risk minimization tools. The FDA also may condition approval on, among other things, changes to proposed
labeling or the development of adequate controls and specifications. The FDA may also require one or more Phase 4 post-market studies
and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further
marketing of the product based on the results of these post-marketing studies.
Expedited
Development and Review Programs
The
FDA offers a number of expedited development and review programs for qualifying product candidates. For example, the fast track program
is intended to expedite or facilitate the process for reviewing new products that meet certain criteria. Specifically, product candidates
are eligible for fast track designation if they are intended to treat a serious or life-threatening disease or condition and demonstrate
the potential to address unmet medical needs for the disease or condition. Fast track designation applies to the combination of the product
candidate and the specific indication for which it is being studied. The sponsor of a fast track product candidate has opportunities
for more frequent interactions with the review team during product development and, once an NDA or BLA is submitted, the application
may be eligible for priority review. A fast track product candidate may also be eligible for rolling review, where the FDA may consider