10-K

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2021

Commission File Number 001-40475

Janux Therapeutics, Inc.

(Exact name of registrant as specified in its Charter)

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (858) 750-4700

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

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

Common Stock, $0.001 par value per share JANX The Nasdaq Global Market

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

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

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

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

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

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

Large accelerated filer ☐ Accelerated filer ☐

Non-accelerated filer ☒ Smaller reporting company ☒

Emerging growth company ☒

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

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

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

The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, as of June 30, 2021, the last business day of the registrant's most recently completed second fiscal quarter, was approximately $525.7 millionbased on the closing price of $24.95 as reported on The Nasdaq Global Market on such date. Solely for the purposes of this disclosure, shares of common stock held by executive officers, directors and certain stockholders of the registrant as of such date have been excluded because such holders may be deemed to be affiliates.

The number of shares of registrant's Common Stock outstanding as of March 16, 2022 was 41,622,962.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for its 2022 Annual Meeting of Stockholders, which the registrant intends to file pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2021, are incorporated by reference into Part III of this Annual Report on Form 10-K.

JANUX THERAPEUTICS, INC.

Annual Report on Form 10-K

For the Fiscal Year Ended December 31, 2021

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Page

PART I

Item 1. Business 3

Item 1A. Risk Factors 54

Item 1B. Unresolved Staff Comments 107

Item 2. Properties 107

Item 3. Legal Proceedings 107

Item 4. Mine Safety Disclosures 108

PART II

Item 6. [Reserved] 110

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 110

Item 8. Financial Statements and Supplementary Data 121

Item 9A. Controls and Procedures 144

Item 9B. Other Information 144

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 144

PART III

Item 10. Directors, Executive Officers and Corporate Governance 145

Item 11. Executive Compensation 145

Item 14. Principal Accounting Fees and Services 145

PART IV

Item 15. Exhibits and Financial Statement Schedules 146

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Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K and the information incorporated herein by reference contain forward-looking statements that involve a number of risks and uncertainties, many of which are beyond our control. Although our forward-looking statements reflect the good faith judgment of our management, these statements can only be based on facts and factors currently known by us. Consequently, these forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from results and outcomes discussed in the forward-looking statements as a result of various factors, including those set forth below under the caption “Risk Factors.”

Forward-looking statements include, but are not limited to, statements regarding:

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our plans to research, develop and commercialize any product candidates;

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our ability to obtain and maintain regulatory approval of product candidates arising from our proprietary Tumor Activated T Cell Engager (TRACTr) and Tumor Activated Immunomodulator (TRACIr) platform technologies in any of the indications for which we plan to develop them;

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our ability to obtain funding for our operations, including funding necessary to commence and complete the clinical trials, conduct additional manufacturing and conduct preclinical studies of any of our product candidates;

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the success, cost and timing of our research and development activities, including our ongoing and planned preclinical studies and clinical trials;

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the size of the markets for our product candidates, and our ability to serve those markets;

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our ability to successfully commercialize our product candidates;

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

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our ability to develop and maintain sales and marketing capabilities, whether alone or with potential future collaborators;

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regulatory developments in the United States and foreign countries;

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the performance of our third-party service providers, including our CROs, suppliers and manufacturers;

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the safety, efficacy and market success of competing therapies that are or become available;

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our ability to attract and retain key scientific and management personnel;

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our ability to attract and retain collaborators with development, regulatory and commercialization expertise;

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

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

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our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates and our ability to operate our business without infringing on the intellectual property rights of others; and

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the impact of the COVID-19 pandemic on our business and operations.

In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “positioned,” “potential,” “predict,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These forward-looking statements are subject to a number of known and unknown risks, uncertainties and assumptions described in the sections of this Annual Report on Form 10-K titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report. We discuss many of the risks associated with the forward-looking statements in this Annual Report on Form 10-K in greater detail under the heading “Risk Factors.” Moreover, we

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operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. You should be aware that the occurrence of any of the events discussed under the caption “Risk Factors” and elsewhere in this report could substantially harm our business, results of operations and financial condition and that if any of these events occurs, the trading price of our common stock could decline and you could lose all or a part of the value of your shares of our common stock.

The cautionary statements made in this report are intended to be applicable to all related forward-looking statements wherever they may appear in this Annual Report on Form 10-K. We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. For all forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Except as required by law, we assume no obligation to update our forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in any forward-looking statements, whether as a result of new information, future events or otherwise.

This Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business, and the markets for our product candidates, including data regarding the estimated size of markets for oncology therapeutics and the incidence of certain medical conditions, statements that certain drugs, classes of drugs, or dosages are widely prescribed in the United States or other markets, statements regarding the perceptions and preferences of patients and physicians regarding certain therapies and other prescription, prescriber and patient data, as well as data regarding market research, estimates and forecasts prepared by our management. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

You should read the following together with the more detailed information regarding our company, our common stock and our financial statements and notes to those statements appearing elsewhere in this report or incorporated by reference. The Securities and Exchange Commission (SEC) allows us to “incorporate by reference” information that we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this report.

Risk Factors Summary

Below is a summary of the material factors that make an investment in our common stock speculative or risky. This summary does not address all of the risks that we face. Additional discussion of the risks summarized in this risk factor summary, and other risks that we face, can be found below under the heading “Risk Factors” under Part I, Item 1A of this Annual Report and should be carefully considered, together with other information in this Annual Report before making investment decisions regarding our common stock.

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We have a limited operating history, have incurred net losses since our inception, and anticipate that we will continue to incur significant losses for the foreseeable future. We may never generate any revenue or become profitable or, if we achieve profitability, may not be able to sustain it.

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If we are unable to raise capital when needed, we may be forced to delay, reduce or eliminate our product development programs or other operations.

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

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We are early in our development efforts and all of our product candidates and research programs are in the preclinical development or discovery stage. We have no history of conducting clinical trials to test our product candidates in humans.

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Preclinical and clinical development is a lengthy, expensive and uncertain process. The results of preclinical studies and early clinical trials are not always predictive of future results. Any product candidate that we advance into clinical trials may not achieve favorable results in later clinical trials, if any, or receive marketing approval.

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Our product candidates are based on novel technologies, which make it difficult to predict the timing, results and cost of product candidate development and likelihood of obtaining regulatory approval.

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We may rely on third parties to conduct, supervise, and monitor our planned clinical trials and perform some of our research and preclinical studies. If these third parties do not satisfactorily carry out their contractual duties or fail to meet expected deadlines, our development programs may be delayed or subject to increased costs, each of which may have an adverse effect on our business and prospects.

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The market opportunity for our product candidates may be relatively small as it will be limited to those patients who are ineligible for or have failed prior treatments and our estimates of the prevalence of our target patient populations may be inaccurate.

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

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The COVID-19 pandemic and other epidemic diseases could adversely impact our business, including our planned clinical trials, supply chain and business development activities.

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If we are unable to obtain and maintain sufficient intellectual property protection for our platform technologies and product candidates, or if the scope of the intellectual property protection is not sufficiently broad, our competitors could develop and commercialize products similar or identical to ours, and our ability to successfully commercialize our products may be adversely affected.

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Failure or perceived failure to comply with existing or future laws, regulations, contracts, self-regulatory schemes, standards, and other obligations related to data privacy and security (including security incidents) could harm our business. Compliance or the actual or perceived failure to comply with such obligations could negatively affect our operating results and business.

PART I

Item 1. Business.

Unless the context otherwise requires, the terms “Janux Therapeutics,” “Janux,” “we,” “us,” “our” and similar references in this Annual Report on Form 10-K refer to Janux Therapeutics, Inc.

Overview

We are an innovative biopharmaceutical company developing a broad pipeline of novel immunotherapies by applying our proprietary technology to our TRACTr and TRACIr platforms to better treat patients suffering from cancer. Our initial focus is on developing a novel class of T cell engagers (TCEs), and our lead product candidates are designed to target clinically validated drug targets. While TCE therapeutics have displayed potent anti-tumor activity in hematological cancers, developing TCEs to treat solid tumors has faced challenges due to the limitations of prior TCE technologies, namely (i) overactivation of the immune system leading to cytokine release syndrome (CRS), (ii) on-target, healthy tissue toxicities and (iii) poor pharmacokinetics (PK) leading to short half-life. We use our TRACTr platform technology to engineer product candidates designed to overcome these limitations. We are developing a broad pipeline with lead programs targeting prostate-specific membrane antigen (PSMA), epidermal growth factor receptor (EGFR), and trophoblast cell surface antigen 2 (TROP2), with all of our programs currently in the preclinical or discovery stage. We expect to submit Investigational New Drug applications (IND) for our PSMA-TRACTr in the first half of 2022, for our EGFR-TRACTr in the second half of 2022, and for our TROP2-TRACTr in 2023. We are also applying our proprietary technology to develop a TRACIr costimulatory bispecific product candidate against programmed death-ligand 1 (PD-L1) and Cluster of Differentiation 28 (CD28) designed to further enhance the anti-tumor activity of T cells, which we believe has the potential to be used as a single-agent or in combination with our current TRACTr pipeline and other modalities. We selected a PD-L1xCD28 TRACIr development candidate in the fourth quarter of 2021. We expect to submit an IND for this product candidate in 2023. Based on data we have generated in non-human primates (NHPs), we believe our TRACTr and TRACIr product candidates have the potential for (i) significantly reduced risk of toxic CRS responses, (ii) reduced risk of on-target, healthy tissue toxicities, and (iii) improved half-life with once-weekly dosing in humans.

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The promise of TCE technologies and their current limitations

TCEs are an emerging class of immunotherapies that bridge a tumor cell and a T cell to activate and redirect T cells to attack and eliminate tumors. TCEs have demonstrated promising anti-tumor activity in early clinical trials and in multiple animal models that rivals that of chimeric antigen receptor T cell (CAR T cell) therapies, with the distinct advantage that they are not cell therapies and have the potential to be offered as readily available, off-the-shelf therapies, which would avoid the lengthy, complicated, and expensive manufacturing process required for approved autologous CAR T cell therapies. One TCE, blinatumomab, marketed by Amgen as BLINCYTO, has been approved by the U.S. Food and Drug Administration (FDA) and, like the FDA-approved CAR T cell therapies, has been limited to hematological malignancies.

Three properties of existing TCEs have limited their potential to treat solid tumors:

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Cytokine release syndrome (CRS). CRS arises from the systemic activation of T cells and can result in life-threatening elevations in inflammatory cytokines such as interleukin-6 (IL-6). Severe and acute CRS leading to dose-limiting toxicities and deaths has been observed upon the dosing of TCEs developed using other platforms to treat cancer patients in prior clinical studies. This toxicity severely restricts the maximum blood levels of TCEs that can be safely dosed.

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On-target, healthy tissue toxicity. On-target, healthy tissue toxicity, arising from expression of the tumor target in healthy tissue and scarcity of highly tumor-selective antigens, is another limitation hindering the development of TCEs to treat solid tumor cancers. TCEs developed using other platforms not designed for tumor-specific activation have resulted in clinical holds and dose-limiting toxicities resulting from target expression in healthy tissues.

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Short half-lives. TCEs quickly reach sub-therapeutic levels after being administered as they are quickly eliminated from the body due to their short exposure half-lives. For this reason, TCEs such as blinatumomab (BLINCYTO) are typically administered by a low-dose, continuous infusion pump over a period of weeks to overcome the challenge of a short half-life and maintain therapeutic levels of the drug in the body. This continuous infusion dosing regimen represents a significant burden for patients.

Our TRACTr and TRACIr platforms

We believe our proprietary TRACTr and TRACIr platforms offer the potential to expand the breadth of patients that can be treated with TCEs and non-TCE based immunomodulators while reducing the risk of life-threatening toxicities. Each of our proprietary TRACTrs and TRACIrs are comprised of an antigen-binding domain, a T cell-binding domain, domain-optimized peptide masks, an albumin-binding domain, and cleavable peptide linkers. The mask is a peptide designed to bind to the tumor or T cell-binding domain. It inhibits the binding domain’s interaction with its target, thereby inhibiting the activation of T cells. The antigen and T cell-binding domains in our TRACTr and TRACIr product candidates may be covalently attached to peptide masks that block binding and activity until they are removed. We use proprietary peptide linker sequences composed of tumor protease recognition sites to attach these masks to the antigen-binding domains in a way designed to make the masks highly sensitive to removal by tumor proteases but highly stable in the absence of these proteases. In addition, we attach an albumin-binding domain to one mask, which is designed to extend the half-life of our TRACTr and TRACIr product candidates until they become activated inside a tumor.

While our TRACTr and TRACIr platforms are novel and unproven and our product candidates remain in the preclinical or discovery stage, our technology is designed to offer the following features for the discovery and development of novel therapies for the treatment of solid tumors:

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Potential to reduce CRS and on-target, healthy tissue toxicity risk. By engineering our TRACTrs and TRACIrs with novel peptide masks that are designed to be selectively activated in the tumor microenvironment and designed for any activated TCEs or non-TCE based immunomodulators to be rapidly cleared from healthy tissue upon escaping from the tumor, our product candidates have the potential to overcome the toxicity challenges of TCEs, non-TCE based immunomodulators and systemic immunotherapies in general.

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Potential for extended half-life of our TRACTrs and TRACIrs. We designed our TRACTrs and TRACIrs with an albumin-binding domain to be stable in the bloodstream and to have an extended serum half-life before activation. Our TRACTrs and TRACIrs have demonstrated long half-lives in NHPs, which we believe translates to the potential for once-weekly dosing in humans. This contrasts to first-generation TCEs and non-TCE based immunomodulators that are rapidly cleared and require high frequency or continuous dosing.

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Potential for activity at low levels of target expression. Our TRACTrs and TRACIrs are designed to be active at low levels of tumor target expression where other treatment modalities lose efficacy. In preclinical studies, our TRACTrs and TRACIrs did not require high levels of tumor target expression to activate T cells to kill cancer cells.

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Modularity. Our TRACTr and TRACIr platforms’ modular characteristics enable us to leverage the learnings from the development of our product candidates to progress the discovery process of new TRACTr and TRACIr candidates against a wide variety of targets.

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Manufacturability. The development, manufacturing and control processes of our TRACTr and TRACIr molecules closely resemble those used for monoclonal antibodies with the expectation for a relatively lower cost of goods.

A schematic of our proprietary TRACTrs and TRACIrs in development and their modular components is depicted below.

Our lead programs

Our lead TRACTr product candidates are designed to target PSMA, EGFR, and TROP2. Each of these tumor targets is clinically validated and implicated in solid tumors with high prevalence, including metastatic castrate-resistant prostate cancer (mCRPC), colorectal cancer (CRC), squamous cell carcinoma of the head and neck (SCCHN), triple-negative breast cancer (TNBC), urothelial cancer (UC), and non-small cell lung cancer (NSCLC). We anticipate submitting INDs for two of these product candidates by the end of 2022. We are also applying our proprietary technology to develop a TRACIr costimulatory bispecific product candidate against programmed death-ligand 1 (PD-L1) and CD28 designed to further enhance the anti-tumor activity of T cells, which we believe has the potential to be used as a single-agent or in combination with our current TRACTr pipeline and other modalities. We anticipate submitting an IND for this product candidate in 2023. Our pipeline is summarized below:

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In addition to our wholly-owned pipeline programs, we have a strategic research collaboration with Merck Sharp & Dohme Corp. (Merck) to develop TRACTr product candidates directed against two cancer targets selected by Merck.

Our TRACTr Programs

We are building a broad portfolio of TRACTr programs led by our PSMA, EGFR, and TROP2 targeted TRACTrs.

Our PSMA-TRACTr

Our PSMA-TRACTr is designed to target PSMA, a protein expressed in prostate cancer tumors and the vasculature of other tumors. Prostate cancer is the second most common cancer in men, leading to over 34,000 estimated deaths in the United States in 2021. PSMA is highly expressed in prostate cancer which has led to the development of PSMA-targeted biologics, including TCEs. A third-party clinical trial with a continuously infused PSMA-TCE demonstrated clinical benefit, suggesting the potential of a PSMA-TCE approach. Given the challenges of continuous infusion, other companies are developing TCEs that enable once-weekly dosing. However, clinical trial results have shown dose-limiting CRS toxicities as single agents, highlighting the limitations of traditional TCEs. Efforts to mitigate CRS include combining TCEs with the immunosuppressive agent dexamethasone and/or lower sub-efficacious initial priming doses followed by efficacious doses. These strategies have the potential to either reduce the efficacy of the TCE or introduce other problems in patients who frequently have multiple pre-existing comorbidities. Our PSMA-TRACTr is designed to generate potent anti-tumor activity in mCRPC patients by enabling the delivery of higher concentrations of active drugs to tumors than traditional TCEs. We believe that our PSMA-TRACTr product candidate has the potential to deliver therapeutic benefits to patients while minimizing severe adverse events (SAEs), including the prevention of dose-limiting CRS. We plan to submit an IND for our PSMA-TRACTr product candidate in the first half of 2022.

Our EGFR-TRACTr

Our EGFR-TRACTr is designed to target EGFR, a well-validated target that is overexpressed in many cancer types with multiple approved monoclonal antibodies (mAbs), including ERBITUX, marketed by Eli Lilly and Merck KGaA, for the treatment of CRC and SCCHN, and VECTIBIX, marketed by Amgen and Takeda, for the treatment of CRC. Beyond CRC and SCCHN, the below figure describes cancers where EGFR may be overexpressed and approved EGFR-directed therapeutics, illustrating the significant unmet medical need for the majority of these patient populations where there are no approved, EGFR-directed treatment options.

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Figure 1. Common cancers where EGFR may be overexpressed and where EGFR-directed therapeutics, including tyrosine kinase inhibitors (TKIs) and monoclonal antibodies (mAbs) are already approved

CRC represents one tumor type for which EGFR is overexpressed. However, approximately 85 percent of patients do not respond to anti-EGFR mAbs, and of those that do, resistance often develops. SCCHN and NSCLC cancers also represent tumor types for which EGFR is frequently overexpressed, and anti-EGFR antibodies have received marketing approvals. Frequently genetic mutations in signaling pathways, such as KRAS mutants (45 percent in CRC, and 35 percent in NSCLC) can lead to de novo resistance to naked antibody therapy. Stronger tumoricidal activity is needed. We believe that EGFR-directed immunotherapies, including TCEs, have the potential to address this high unmet need. Our EGFR-TRACTr is designed to generate potent anti-tumor activity by enabling the delivery of higher concentrations of active drug to tumors than traditional TCEs. We believe that our EGFR-TRACTr product candidate has the potential to deliver therapeutic benefits to patients while minimizing SAEs, including the prevention of dose-limiting CRS. We selected a development candidate for our EGFR-TRACTr in the second quarter of 2021, and we plan to submit an IND in the second half of 2022.

Our TROP2-TRACTr

Our TROP2-TRACTr is designed to target TROP2, a clinically validated anti-tumor target for which there is a recently approved anti-TROP2 antibody-drug conjugate (ADC), sacituzumab govitecan, marketed as TRODELVY by Gilead. TRODELVY has been approved to treat metastatic TNBC and UC. Early clinical proof-of-concept has also been demonstrated in NSCLC and several other solid tumor indications potentially targetable by TROP2, including hormone receptor-positive (HR+)/HER2 breast cancer, small cell lung cancer (SCLC), gastric cancer, esophageal cancer, head and neck cancer, prostate cancer, and endometrial cancer. However, these ADCs are also associated with significant toxicities that limit dosing. Our TROP2-TRACTr is designed to generate potent anti-tumor activity, initially in TNBC patients, by enabling the delivery of higher concentrations of active drug to tumors than traditional TCEs. We believe that our TROP2-TRACTr has the potential to deliver therapeutic benefits to patients while minimizing SAEs, including the prevention of dose-limiting CRS. We believe that our TROP2-TRACTr has the potential to deliver the potent anti-tumor activity of a TCE to patients who have tumors that overexpress TROP2 while also providing increased safety and dosing convenience. We plan to submit an IND for our TROP2-TRACTr in 2023.

Our TRACIr Program

We are also applying our proprietary technology to our TRACIr platform, with our first program being a tumor-activated PD-L1xCD28 T cell costimulatory bispecific.

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Our PD-L1xCD28 costimulatory bispecific

Our PD-L1xCD28 costimulatory bispecific program is designed to amplify existing T cell anti-tumor responses and TRACTr activity through a dual mechanism of (i) blocking tumor-expressed immunosuppressive signaling and (ii) activating T cell costimulatory signaling. Our bispecific molecule is designed to bind to immunosuppressive PD-L1 on tumor cells and to the CD28 costimulatory receptor on T cells. We believe that our technology’s potential to convert the inhibitory checkpoint signal into an immune activation signal via costimulation could stimulate further anti-tumor activity. Like current checkpoint inhibitors, we believe our costimulatory program could be combined with a variety of classes of therapeutics, including chemotherapeutics as well as other immunotherapies. We have shown that the use of this bispecific led to potent T cell-directed tumor cell killing in cell assays in which a checkpoint inhibitor was ineffective. In addition, our costimulatory program enhanced the potency of tumor cell killing when combined with a TCE. We selected a development candidate for our PD-L1xCD28 bispecific product candidate in the fourth quarter of 2021. We plan to submit an IND for our PD-L1xCD28-TRACIr in 2023.

Our Research Collaboration with Merck Sharp & Dohme Corp.

In December 2020, we entered into a research collaboration and exclusive license agreement with Merck to develop TRACTr product candidates distinct from those in our internally developed pipeline. Merck has the right to select up to two collaboration targets related to next-generation TCE immunotherapies for cancer treatment. Merck will receive an exclusive worldwide license for each selected target and intellectual property from the collaboration. In return, we are eligible to receive up to $500.5 million per target in upfront and milestone payments, plus royalties on sales of the products derived from the collaboration. Merck will provide research funding under the collaboration.

We plan to selectively consider other strategic collaboration opportunities in the future.

Our Strategy

Our goal is to unleash the potential of our TRACTr and TRACIr platforms technology to transform the lives of cancer patients. To achieve this goal, critical elements of our strategy include the following:

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Advance our lead TRACTr programs through clinical development. We intend to submit INDs for our PSMA-TRACTr in the first half of 2022, EGFR-TRACTr in the second half of 2022, and TROP2-TRACTr in 2023 and, in each instance, to initiate a Phase 1 clinical trial soon after. We believe that our programs have the potential to transform the treatment of metastatic diseases such as mCRPC, CRC, NSCLC, TNBC, UC, SCCHN, and a wide range of other tumor types that overexpress PSMA, EGFR or TROP2, which are clinically validated targets.

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Broaden our portfolio of TRACTr product candidates. Our TRACTr platform technology’s modular characteristics enable us to leverage the learnings from the development of our product candidates to progress the discovery process of new TRACTr candidates against a wide variety of targets. For our first three programs, once an antibody was identified, we developed a masked tumor-binding domain in less than six months to begin evaluating TRACTr development candidates. We are actively pursuing the development of additional TRACTr programs against several other clinically validated targets.

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Expand our internal pipeline into logical classes of therapeutics beyond TCEs. Our tumor-activated masking and bispecific molecule design enable more molecular phenotypes than classic CD3 targeted TCEs. For example, our proprietary technology allows the masking and tumor activation of different T cell therapy modalities, including costimulation via CD28 engagement of a PD-L1xCD28 bispecific molecule, our first TRACIr program. We believe this TRACIr program has the potential to be used as a single-agent or in combination with our current TRACTr pipeline and other modalities. We intend to submit an IND for our PD-L1xCD28 TRACIr in 2023 and to initiate a Phase 1 clinical trial soon after. We are also applying our proprietary technology to create molecules designed to attract, redirect, or mobilize different types of immune cells to tumor sites that exclude or lack resident immune cells.

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Selectively evaluate opportunities to maximize the potential of our programs in partnership with leading biopharmaceutical companies. We plan to selectively evaluate potential opportunities on a program-by-program basis with biopharmaceutical companies whose research, development, and/or

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geographic capabilities complement our own with the goal to help mitigate clinical and commercial risk and/or maximize global commercial potential.

TCEs as novel therapeutics to overcome the limitations of current immunotherapies

Background

Immunotherapy has ushered in a new era of cancer treatment with unprecedented responses in many tumor types. Unleashing the power of the immune system on cancer cells has been one of the most promising new advancements in a field long dominated by suboptimal approaches such as chemotherapy. One class of immunotherapy, checkpoint inhibitors, has generated encouraging efficacy results and represents the standard of care in selected tumor types. However, despite this clinical benefit for a subset of patients, it is estimated that less than 13 percent of all cancer patients in the United States respond to checkpoint inhibitors. Tumors have evolved to evade and dampen tumor immune surveillance. Consequently, new classes of immunotherapy designed to overcome the various immune-evasion mechanisms that tumors employ have emerged.

TCEs are immunotherapies that bridge tumor-fighting T cells and tumors in a way that overcomes this challenge. TCEs are bivalent biologics; that is, they can bind to two different cell surface targets. By selecting one target on a tumor cell and another on a T cell, the TCE bridges these two cell types to trigger tumor cell killing by the T cell. TCEs can be mass-produced and made available as off-the-shelf therapies. Furthermore, TCEs, as biologics, have pharmacologic properties that allow control of the amount of active drug in the body at any one time. The doses that are delivered can be titrated, and the pharmacokinetics generally follow those of other biologics.

Other approaches to immunotherapy, like cell therapies, such as CAR T cell therapy, are also emerging. We believe the unique characteristics of TCEs render them an attractive immunotherapy alternative to these approaches. While cell therapies have displayed efficacy in treating cancer, these treatments have also led to morbidity and mortality resulting from toxicity. Cell therapies also typically require complex and costly manufacturing strategies, making them unsuitable for several aggressive tumors and advanced disease patients. They are primarily confined to treatment for hematological malignancies, and CAR T cell therapies have not to date been successfully developed for any solid tumor.

While we believe that TCEs hold promise in treating solid tumors, three properties of TCEs derived from other platforms have limited their potential:

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Cytokine release syndrome (CRS). CRS arises from the systemic activation of T cells and can result in life-threatening elevations in inflammatory cytokines such as IL-6. Severe and acute CRS leading to dose-limiting toxicities and deaths has been observed upon the dosing of TCEs developed using other platforms to treat cancer patients in prior clinical studies. This toxicity severely restricts the maximum blood levels of TCEs that can be safely dosed.

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On-target, healthy tissue toxicity. On-target, healthy tissue toxicity, arising from the expression of the tumor target in healthy tissue and scarcity of highly tumor-selective antigens, is another limitation hindering the development of TCEs to treat solid tumor cancers. TCEs developed using other platforms not designed for tumor-specific activation have resulted in clinical holds and dose-limiting toxicities resulting from target expression in healthy tissues.

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Short half-lives. TCEs quickly reach sub-therapeutic levels after being administered as they are quickly eliminated from the body due to their short exposure half-lives. For this reason, TCEs such as blinatumomab (BLINCYTO) are typically administered by a low-dose, continuous infusion pump for weeks to overcome the challenge of a short half-life and to maintain therapeutic levels of the drug in the body. This continuous infusion dosing regimen represents a significant burden for patients.

Next generation approaches to overcome the challenges of conventional TCEs

First-generation immuno-oncology drugs have an increased risk of systemic toxicity due to the active drug circulating throughout the body. Second generation immuno oncology drugs, such as protease-activated antibodies, have attempted to limit systemic toxicities by being administered in an inactive form and only activated upon exposure to tumor proteases within the tumor microenvironment. However, once these activated drugs leave the tumor, they circulate throughout the body and accumulate over time, leading to on-target, healthy tissue toxicity in

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target-expressing tissues. Several product candidates have been developed that take advantage of tumor-associated proteases to activate potent drugs in tumors. These include prodrugs such as leucine-doxorubicin and masked antibodies such as Probodies developed by CytomX. In initial clinical trials, CytomX has demonstrated clinical benefit in patients and a mechanistic proof-of-concept for this masked antibody approach, with 83 percent of the patients having enough tumor protease activity to achieve clinically relevant levels of unmasked antibodies in the tumor. However, an unwanted consequence of CytomX’s approach is that the relatively long half-lives of its drugs in active form led to their accumulation in healthy tissue throughout treatment.

We are developing our TRACTr and TRACIr platforms to address the limitations of previous generations of immuno-oncology drugs and to restrict activity to tumors. Our TRACTrs and TRACIrs are designed to be activated by tumor-specific proteases but, upon activation, be converted to a form that has a short half-life to eliminate them from the body rapidly should they re-enter the circulatory system. A representation of the pharmacokinetic design of first and second-generation TCEs and our TRACTrs / TRACIrs is shown in the figure below.

Figure 2. Our TRACTr and TRACIr platforms are designed to limit the activity of our therapies to tumor sites, reducing the risk of on-target, healthy tissue toxicity

Our TRACTr and TRACIr Platforms

Our TRACTr and TRACIr platforms are designed to offer the following features for the discovery and development of novel therapies for the treatment of solid tumors:

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Potential for the extended half-life of our TRACTrs and TRACIrs. We designed our TRACTrs and TRACIrs with an albumin-binding domain to be stable in the bloodstream and to have an extended serum half-life before activation. Our TRACTrs and TRACIrs have demonstrated long half-lives in NHPs, which we believe translates to the potential for once-weekly dosing in humans. This contrasts with first-generation TCEs or non-TCE based immunomodulators that are rapidly cleared and require high frequency or continuous dosing.

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TRACTr and TRACIr design and structure

Our TRACTr and TRACIr product candidates are biologics comprised of multiple domains that have been designed to serve specific functions but engineered to function as a single unit. At their core, our TRACTr and TRACIr product candidates are TCEs and non-TCE based immunomodulators, respectively, that couple a tumor antigen binding domain to a T cell-specific antigen binding domain. Masks cover both binding sites and block activity while our TRACTr or TRACIr product candidate are in circulation and exposed to healthy tissues. We use proprietary peptide linker sequences composed of tumor protease recognition sites to attach these masks to the antigen-binding domains in a way that is designed to make the masks highly sensitive to release by tumor proteases. This release exposes both the tumor-binding domain and the T cell antigen binding domains to generate a fully activated TCE or non-TCE based immunomodulator. This is designed to enable our TRACTr or TRACIr product candidates to bridge the T cells and tumor cells into close proximity and to enable T cell-mediated killing of tumor cells.

Our TRACTr and TRACIr product candidates also have a proprietary albumin-binding domain designed to increase their half-life in serum. This proprietary domain is designed to bind albumin and, by doing so, prevent the rapid degradation and elimination of TRACTr or TRACIr product candidates. In contrast, blinatumomab, a TCE that lacks an albumin-binding domain, has a very short half-life in serum and is administered through continuous infusion for 28 days per treatment cycle, with hospitalization recommended for up to the first nine days.

Our TRACTrs and TRACIrs are designed to limit binding to their targets in healthy cells. When our TRACTr or TRACIr product candidates are in the non-activated state, they are designed not to activate T cells before reaching the tumor. Upon exposure to tumor proteases, the linkers are designed to be cleaved, and the masks and albumin-binding domains are designed to be released to generate a fully active TCE or non-TCE based immunomodulator. This is designed to enable tumor-specific T cell activation and tumor cell killing while priming the activated TCE or non-TCE based immunomodulator for rapid elimination should it leave the tumor and re-enter circulation. We believe that our technology’s design to restrict T cell activation specifically to tumor sites provides the opportunity to generate TCEs and non-TCE based immunomodulators with broader therapeutic windows. We summarize our TRACTr and TRACIr structure, activation mechanism in tumor tissue, and rapid elimination from healthy tissue once activated below.

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Our TRACTr and TRACIr development process

We have developed robust processes to select specific sequences for each of these components in a TRACTr or TRACIr both for their individual properties and for their ability to contribute to the desired properties of our fully assembled product candidates.

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Antigen-binding domains. Our initial product candidates are based on antigen binding domains, which have been incorporated into other products associated with clinical activity. As we expand our pipeline, we are developing proprietary antigen binding domains against novel targets.

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Geometry connecting the antigen binding domains. The orientation of a tumor-specific and a T cell-specific antigen binding domain is central to creating a TCE or non-TCE based immunomodulator with optimal T cell activation. We have found that the orientation between the two antigen-binding domains profoundly affected activity in preclinical studies. For example, we constructed two PSMA TCEs with similar binding domains but of different geometry, where their potency in T cell-directed, PSMA-specific tumor cell killing differed by over 900-fold, as shown in the figure below.

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Figure 3. The orientation of the two antigen binding domains in a PSMA-TCE led to an over 900-fold difference in potency in preclinical studies (top), and the configurations of these two TCEs, VH and VL (bottom)

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Mask Discovery. Each mask sequence is designed to be optimized for a specific antigen-binding domain through an iterative process of phage display and quantitative binding assays designed to select for those masks that can prevent binding to the target antigen. We use a directed evolution-based process using proprietary phage libraries. We go through multiple cycles of selection and amplification of potential inhibitory peptides capable of blocking the antigen-binding domain from binding to its target to optimize masked TCE or non-TCE based immunomodulator stability in serum and limit cleavage to the tumor microenvironment thereby reducing toxicity. We depict our mask discovery process in the figure below.

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Figure 4. Using directed evolution and phage display technology, we identify potential mask sequences that are designed to completely block antigen recognition by our antigen binding domains

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Single versus dual masks. Our technology allows us to develop product candidates with either one or both antigen-binding domains masked depending on the tumor target’s profile. For tumor targets with minimal healthy tissue expression or toxicity concerns, we develop single mask TRACTrs or TRACIrs designed to block the T cell-binding domain to prevent non-tumor-specific activation of T cells that contributes to CRS. For targets with high/broad healthy tissue expression or toxicity concerns, we develop dual mask TRACTrs or TRACIrs designed to mask both domains to minimize the risk of healthy tissue toxicity and CRS. We depict the single and dual mask TRACTr and TRACIr structures in the figure below.

Figure 5. We design both single and dual masked TRACTr and TRACIr product candidates based on the healthy tissue expression levels of the tumor-targeted antigen and the risk of healthy tissue toxicity

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Cleavage linker. We optimized the selection of cleavage linkers by a process involving identifying the predominant proteases in solid tumors and mining databases for potential substrates of these proteases. We then screened peptide sequences for their sensitivity to cleavage by these proteases. We specifically identified potential cleavage linker sequences that were rapidly cleaved by a tumor-specific protease to improve anti-tumor TRACTr or TRACIr activities potentially, yet remain stable in human, NHP, and mouse serum to limit non-tumor activation. We have identified several proprietary cleavable linkers that we utilize to optimize efficacy and stability in our TRACTrs and TRACIrs, as shown in the schematic below.

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Albumin-binding domain. We developed our proprietary albumin-binding domain derived from a llama antibody optimized for its ability to bind to albumin from both humans and NHPs, the primary preclinical species in which we conduct our in vivo experiments due to the similarity in target sequences and immune function with humans. As shown in Figure 6 below, our albumin-binding domain has a nearly identical binding affinity to albumin from these two species.

Figure 6. Our proprietary albumin-binding domain had potent binding to both NHP and human albumin

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Development viability. Once we have identified the critical components for any product candidate, we assemble them and modify the assembled construct using standard techniques to make it more human-like. We then assess its feasibility for development. We are primarily concerned with the following attributes of a potential product candidate:

Manufacturability using standard mammalian cell expression systems;

Drug-like properties such as solubility, thermal stability, and stability in human serum; and

Optimal performance with efficient linker cleavage, mask removal, antigen-binding, albumin-binding, and functional activity.

Our extensive library of masks and linkers combined with our protein engineering expertise allows us to generate product candidates that meet the high standards that we have set for therapeutic candidates that we believe have the potential to have clinical activity across a broad spectrum of indications.

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Initial proof of technology study

To demonstrate proof of concept for TRACTrs, we tested a TRACTr and a first-generation TCE that targeted EGFR using identical antigen-binding domains. We assessed the risk of developing CRS by dosing both agents in non-human primates (NHPs), a species that was chosen because of the similarity in antigen binding affinities in these NHPs compared to humans, and demonstration that an EGFR bi-specific T cell engager (EGFR-BiTE, or EGFR-TCE) triggered significant CRS and healthy tissue toxicity up to and including death.

Our EGFR-TRACTr included an albumin-binding domain intended to increase its half-life in serum to extend the interval between dosing while simultaneously utilizing the protease-mediated cleavage of the linker to remove the domain once our TRACTr was activated. In NHPs, our EGFR-TRACTr was found to have a half-life of over 100 hours compared to approximately one hour for the corresponding EGFR-TCE, as demonstrated below. We believe that this half-life is consistent with the potential for once-weekly dosing in humans. Furthermore, we believe the rapid elimination of the unmasked TCE minimizes the risk of TCE-induced CRS due to short circulation time in serum.

Figure 7. Our EGFR-TRACTr was shown to have an extended half-life in NHPs compared to a corresponding TCE while the unmasked form was rapidly eliminated

In this same study, a dose of 3mg/kg and 10mg/kg of the EGFR-TCE resulted in the release of high levels of the inflammatory cytokine IL-6. In comparison, 600mg/kg of our EGFR-TRACTr reduced those levels to less than 500pg/ml, shown below, even though the plasma levels were substantially higher with the TRACTr than the TCE. Published studies have shown median IL-6 levels of 122pg/ml in patients with Grade 0-3 CRS and 8,300pg/ml in Grade 4-5 CRS patients. A similar reduction in the other inflammatory cytokines measured was observed with our TRACTr compared to the EGFR-TCE.

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Figure 8. Our EGFR-TRACTr did not lead to CRS in NHPs even at high doses. Inflammatory cytokines evaluated in this study included IL-6, tumor necrosis factor alpha (TNFa), interferon gamma (IFNg), and interleukin-2 (IL-2). TNFa, IFNg, and IL-2 were all below the quantification limit (BQL)

The lack of induction of inflammatory cytokines in NHPs associated with CRS in humans is consistent with the potential for the peptide masks to prevent antigen binding and thereby T cell activation. In these studies, the EGFR-TRACTr maximum tolerated dose (MTD) was higher than 600mg/kg due to a lack of CRS, lack of safety observations, and lack of healthy tissue toxicity. In contrast, a published study using a constant infusion of an EGFR-TCE observed an MTD of 30pM plasma levels and 300pM lethal dose plasma levels, where significant liver and kidney toxicities were reported. In similar models, our TRACTr dosed at 600mg/kg had no signs of toxicity and a Cmax of 360nM, further suggesting the potential for improvement in safety via masking.

In a separate study in a mouse model of human CRC using human HCT116 tumor cells and human immune cells, our EGFR-TRACTr displayed potent anti-tumor activity. As shown in the figure below, our EGFR-TRACTr dosed for 10 days at 1.5mg/kg led to significant tumor shrinkage, which was roughly equivalent to that observed with 0.5mg/kg of the EGFR-TCE.

With the observation of reduced CRS risk for our EGFR-TRACTr relative to the EGFR-TCE (at a substantially lower dose than the TRACTr) in our NHP study, and the observation of comparable anti-tumor activity of our EGFR-TRACTr and the EGFR-TCE (at one third of the dose of the our TRACTr) in our mouse model of human CRC, we believe our EGFR-TRACTr may offer reduced CRS risk relative to the EGFR-TCE when dosed at levels expected to result in anti-tumor activity in humans.

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Figure 9. Our EGFR-TRACTr led to significant tumor shrinkage in an HCT116 mouse tumor model

Our Lead Programs

Our lead TRACTr product candidates are designed to target PSMA, EGFR, and TROP2. These tumor targets are clinically validated and implicated in solid tumors with high prevalence, including mCRPC, CRC, TNBC, SCCHN, UC, and NSCLC. While our product candidates remain in the preclinical or discovery stage and are based on novel technologies, we anticipate submitting INDs for two of these product candidates by the end of 2022. We are also applying our proprietary technology to develop a TRACIr costimulatory bispecific product candidate designed to further enhance the anti-tumor activity of T cells, which we believe has the potential to be used as a single-agent or in combination with our current TRACTr pipeline and other modalities. We anticipate submitting an IND for this product candidate in 2023. Our pipeline is summarized below:

Our PSMA-TRACTr for the treatment of mCRPC

We are developing our PSMA-TRACTr product candidate for the treatment of mCRPC. In a preclinical study, PSMA-TRACTr showed a 500-fold reduced ability to induce T cell-mediated killing of prostate cancer cells when masked compared to when unmasked. In addition, we found that our PSMA-TRACTr was well-tolerated in NHPs, substantially reduced cytokine release relative to the unmasked TCE, and had a prolonged half-life. We plan to submit an IND for our PSMA-TRACTr product candidate in the first half of 2022.

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Prostate cancer overview

Prostate cancer is the second most common cancer in men worldwide. Over 3 million men live with prostate cancer in the United States alone. Approximately 12 percent of men will be diagnosed with prostate cancer at some point during their lifetime. In 2021, there were an estimated 248,530 new prostate cancer diagnoses in the United States, representing over ten percent of all new cancer diagnoses. Early diagnoses and effective therapies mean that most prostate cancer patients have a prognosis with a mean five-year survival rate of approximately 98 percent. However, an estimated six percent of prostate cancer patients develop metastatic disease, which is associated with a five-year survival rate of approximately 30 percent. There were an estimated 34,130 deaths in the United States due to prostate cancer in 2021.

Treatment options for prostate cancer

Patients diagnosed with the localized, low-risk disease may be followed by active surveillance or treated with definitive therapy by prostatectomy or radiation therapy. Approximately half of patients with intermediate or high risk prostate cancer are cured by surgery or radiation, but the other half will experience recurrence, usually but not always detected by biochemical surveillance (PSA test). Patients with recurrent disease are typically treated with androgen deprivation therapy (ADT), and if high risk, ADT combined with chemotherapy or addition of novel hormonal therapy. Androgens, including testosterone and dihydrotestosterone, activate androgen receptor-dependent gene transcription, which drives the growth of prostate cancer cells. ADT blocks testicular production of testosterone, otherwise known as a chemical castration, and is administered for those patients who present initially with regional or advanced disease at diagnosis or develop advanced disease at recurrence. Most ADT-treated patients develop castration-resistant prostate cancer (CRPC) and progress.

Treatment options for mCRPC

Standard therapies for these patients include novel hormonal agents, which either further suppress androgen synthesis (abiraterone), or efficiently block Androgen receptor signaling (Enzalutamide). Further treatment options range from cytotoxic chemotherapy (taxanes), Radium-223, or immunotherapy (sipuleucel-T), and an autologous activated antigen presenting cell therapy. PARP inhibitors, and immune checkpoint inhibitors are also approved, but for only small subsets of patients. The median overall survival of patients with mCRPC in multiple Phase 3 trials is approximately 12-18 months and has been augmented by only 2-5 months by the best agents, highlighting the need for more effective therapies in mCRPC.

PSMA is a validated prostate cancer antigen

PSMA is a prostate-specific transmembrane protein expressed at a 100-fold to a 1,000-fold higher level in prostate adenocarcinoma than in the benign prostate. Of importance, PSMA expression is (i) increased when patients are on ADT and (ii) highest in high-grade and mCRPC. Over half of prostate cancer patients treated with radical prostatectomy with high levels of PSMA are likely to have recurrent disease, at a rate that is twice that of patients observed with low levels of PSMA. PSMA is the target of FDA-approved imaging agent, ProstaScint, TCEs, radioisotopes, and ADCs in development.

Clinical results published in the journal Immunotherapy in 2020 from a Phase 1 trial of pasotuxizumab, a PSMA-targeted TCE, highlight the potential of targeting mCRPC with a PSMA-targeted TCE and the limitations of current approaches. Patients in this trial were initially treated with daily subcutaneous injections, but anti-drug antibodies (ADAs) developed in all treated patients, likely due to the high doses administered. These high doses of the drug, which have a short half-life, were required to achieve sufficient drug exposure to the tumor. The trial was then amended so that clinicians could dose patients using continuous intravenous infusion. Prostate-specific antigen (PSA) levels are a validated measure of disease severity in prostate cancer patients. A dose-dependent reduction in serum PSA levels was observed in the intravenous group, achieving a median best PSA change from baseline of approximately 55 percent in the high dose group. The percentage of patients with PSA reduction of greater than 50 percent in the top three groups was 33 percent. Two patients had long-term PSA responses. One patient had long-term stable disease with 337 days to tumor progression. One patient had near-complete regression of lymph node lesions and bone metastases, with 500 days to disease progression. One of the patients who had initially presented with extensive metastatic disease had a reduction in PSA of greater than 96 percent. Within 43 days of treatment, the extent of the PSMA-expressing tumor was significantly reduced. By day 85, there was little evidence of tumor remaining. While no on-target healthy tissue toxicity was reported, treatment-emergent increases in alanine

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aminotransferase and aspartate aminotransferase did occur, and over half of patients in this trial developed Grade 3 or Grade 4 drug-related SAEs. Three patients dosed with continuous infusion developed CRS; two were Grade 2 and one was Grade 3.

We believe that our TRACTr platform technology can be used to create a PSMA-TCE with the potential to build upon the preliminary signs of anti-tumor activity observed with pasotuxizumab through improved pharmacokinetics and reduced risk of CRS toxicity.

Our solution: our PSMA-TRACTr product candidate

We designed our PSMA-TRACTr product candidate as a single-masked TRACTr in which the PSMA-binding domain is unmasked. The T cell-specific binding domain (CD3e) is masked to prevent CRS. We illustrate our PSMA-TRACTr structure in the figure below.

We found that our PSMA-TRACTr product candidate exhibited a 500-fold shift in activating T cell killing of PSMA expressing tumor cells in an in vitro assay when it was masked than when the mask was removed, as shown in the figure below. We believe this difference in activity has the potential to greatly reduce toxicities caused by PSMA expression outside of tumors.

Figure 11. Our masked PSMA-TRACTr was 500-fold less potent in activating T cell killing of PSMA expressing tumors than when the mask was removed in an in vitro assay

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In NHPs, our PSMA-TRACTr demonstrated a half-life of approximately 119 hours, which we believe translates to once-weekly dosing in humans. In comparison, pasotuxizumab was reported to have a half-life of one to three hours in humans and required continuous intravenous infusion for 5 weeks to maintain sufficient drug exposure, representing a significant burden for patients. The figure below illustrates our PSMA-TRACTr and the PSMA-TCE half-lives in NHPs. For comparison, the projected human efficacious dose (pHED) of 100pM for pasotuxizumab based on the clinical trial protocol for its Phase 1 study is also shown.

Figure 12. Our PSMA-TRACTr had a half-life of 119 hours in NHPs, which we believe is in line with the potential for once-weekly dosing in humans

In this same study, dosing our PSMA-TRACTr at 87mg/kg resulted in minimal levels of inflammatory cytokine production relative to an unmasked PSMA-TCE at 10mg/kg, which led to a greater than 130-fold expression of IL-6 as shown in the figure below. We believe these data suggest our PSMA-TRACTr will have the potential to reduce CRS risk relative to an unmasked PSMA-TCE. Furthermore, in a separate study of our PSMA-TRACTr dosed at 1,000mg/kg once-weekly for three weeks in NHPs, no dose-limiting toxicities were identified.

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Figure 13. Dosing of our PSMA-TRACTr in NHPs had minimal effects on inflammatory cytokine levels, several of which were below the limit of quantification (LOQ). In contrast, dosing of a PSMA-TCE led to substantial levels of IL-6 as well as elevation of other inflammatory cytokines commonly observed in CRS.

Clinical development plans

We are conducting IND-enabling studies with our PSMA-TRACTr. We plan to submit an IND in the first half of 2022 to conduct a Phase 1 trial in patients with mCRPC to assess safety, tolerability, and pharmacokinetics.

Our EGFR-TRACTr for the treatment of colorectal cancer, head and neck cancer and non-small cell lung cancer

We are developing our EGFR-TRACTr product candidate for the treatment of metastatic CRC, SCCHN and NSCLC. We have shown in preclinical studies that our EGFR-TRACTr had an 8,500-fold reduced ability to activate T cells when it is masked compared to when it is unmasked. In addition, we demonstrated that our EGFR-TRACTr was well-tolerated in NHPs, substantially reduced cytokine release relative to the unmasked TCE, and had a prolonged half-life. We selected a development candidate for our EGFR-TRACTr product candidate in the second quarter of 2021, and we plan to submit an IND in the second half of 2022.

Colorectal cancer overview

Most colorectal cancers are a type of tumor called adenocarcinoma, cancer of the cells that line the inside tissue of the colon and rectum. However, other less frequently arising colorectal tumors include a neuroendocrine tumor of the gastrointestinal tract, gastrointestinal stromal tumor, small cell carcinoma, and lymphoma.

Colorectal cancer is the second most common cancer in women and the third most common cancer in men worldwide. It is estimated that there will be approximately 106,180 new cases of colon cancer and 44,850 new cases of rectal cancer in the United States in 2022 and approximately 52,580 deaths. Approximately 25 percent of patients have metastatic disease at diagnosis, meaning the disease has spread to other organs, and about 50 percent of patients with CRC will eventually develop metastases. Over 35 percent of the patients with a new diagnosis of CRC, and over 85 percent of patients with a new metastatic CRC diagnosis, will die within five years. Furthermore, the cumulative recurrence rate of CRC at four years is 100 percent.

EGFR is a validated colorectal cancer target

EGFR is the most commonly overexpressed membrane protein in cancer. In CRC, 80 percent of patients overexpress EGFR, and higher expression levels have been linked to more aggressive metastatic disease, which is associated with poor prognosis, including decreased disease-free survival and overall survival. However, EGFR

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expression is not limited to tumors and is widely expressed throughout the body, resulting in systemic toxicities with EGFR-directed therapies.

Treatment options for mCRC

Treatment of CRC typically involves cytotoxic chemotherapy in a regimen containing folinic acid, fluorouracil, and irinotecan, called FOLFIRI, and radiation. Anti-EGFR mAbs such as cetuximab (ERBITUX, marketed by Eli Lilly) and panitumumab (VECTIBIX, marketed by Amgen and Takeda) can be added to standard therapy. However, only 10-20 percent of patients respond to anti-EGFR mAb therapies, and of those that do, resistance often develops. Of the 85 percent of CRC patients resistant to EGFR mAb treatment, 35 percent to 45 percent are resistant due to KRAS mutations. Treatment with EGFR mAbs is not recommended for patients with KRAS mutations. This suggests that if an anti-EGFR therapeutic that could treat all EGFR overexpressing patients harboring KRAS mutations was developed, the potential treatable population could be significantly expanded.

A combination of nivolumab (OPDIVO) and ipilimumab (YERVOY), which are both marketed by Bristol Myers Squibb, as well as pembrolizumab monotherapy (KEYTRUDA, marketed by Merck & Co.), have been approved for the treatment of microsatellite instability-high (MSI-high) CRC. This is a subset of four to five percent of CRC patients with mutations that lead to high genetic instability. These results suggest that EGFR-directed immunotherapies have the potential to treat CRC and that, at least in some patients, there are sufficient T cells to mount an effective immune response.

Head and neck cancer overview

Cancers known collectively as head and neck cancers usually begin in the squamous cells that line the moist, mucosal surfaces inside the head and neck, otherwise known as squamous cell carcinomas. Cancers of the head and neck are further categorized by the area of the head or neck in which they begin: oral cavity, pharynx, larynx, paranasal sinuses and nasal cavity and salivary glands. Head and neck cancers account for approximately 4 percent of all cancers in the United States and are more than twice as common among men as they are among women. Researchers estimated that more than 68,000 men and women in the United States would be diagnosed with head and neck cancers in 2021. Additionally, there were an estimated 14,620 deaths from head and neck cancer in 2021. EGFR is overexpressed in approximately 90-95 percent of head and neck cancers.

Treatment options for SCCHN

Locoregional SCCHN is treated with curative intent but at the cost of functional impairment and locoregional recurrence or metastatic disease. Standard first-line treatment for recurrent or metastatic (R/M) disease that is not amenable to local therapy was for more than a decade, cetuximab, an EGFR antibody, plus chemotherapy with platinum and 5-fluorouracil (the EXTREME regimen), which provides a mOS of about 10 months and is associated with substantial adverse events.

A significant number of cancer patients fail to respond to immunomodulatory agents regardless of PD-L1 expression, presumably because of tumor resistance mechanisms against immune attacks. The two-year OS in first-line R/M SCCHN ranged from 38 percent to 27 percent, pending the combined positive score. Consequently, there is a significant unmet need for improved therapies.

Non-small cell lung cancer overview

It is estimated that there were approximately 235,000 new lung cancer cases and 131,000 lung cancer deaths in the United States in 2021. NSCLC accounts for approximately 84 percent of lung cancer cases. The overall five-year survival for all patients diagnosed with NSCLC is approximately 25 percent.

Treatment options for NSCLC

Targeted therapies have been developed for NSCLC patients with tumors containing alterations in EGFR and anaplastic lymphoma kinase gene (ALK); however, less than thirty percent of patients are eligible for these therapies. Patients ineligible or resistant to these therapies can be treated with immune checkpoint inhibitors. This treatment regimen significantly improves progression-free survival (PFS) and OS compared to standard chemotherapy. However, despite the availability of these therapies, very few patients are cured of their disease, and the prognosis in NSCLC remains poor.

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Our solution: our EGFR-TRACTr product candidate

We designed our EGFR-TRACTr product candidate as a dual-masked TRACTr in which both the EGFR and T cell-binding domains are designed to be masked. Based upon the activity of EGFR-TCEs against CRC cell lines that harbor mutations or modifications that render them resistant to anti-EGFR antibodies, we believe our EGFR-TRACTr has the potential to treat an expanded CRC patient population. We illustrate our EGFR-TRACTr structure below.

Figure 14. Structure of our EGFR-TRACTr

We found that our EGFR-TRACTr product candidate exhibited an 8,500-fold shift in activating T cell killing of EGFR expressing HCT116 tumor cells in an in vitro assay when it was masked than when the mask was removed, as shown below. We believe this differential in activity can significantly reduce healthy tissue toxicities caused by EGFR expression outside of tumors.

Since these cells harbor KRAS mutations and are resistant to anti-EGFR antibodies, the observed EGFR-TCE activity suggests that EGFR inhibitor-resistant (including KRAS mutants sensitive to our EGFR-TRACTr) CRC will be sensitive to our EGFR-TRACTr. Our observation is consistent with published studies demonstrating EGFR-TCE activity in cell lines resistant to EGFR mAbs and harbored KRAS mutations. The results of our study are depicted in the figure below.

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Figure 15. Our masked EGFR-TRACTr was over 8,500-fold less potent at T cell-mediated killing of EGFR-expressing tumor cells than an equivalent unmasked TCE in an in vitro assay

In NHPs, our EGFR-TRACTr demonstrated a half-life of approximately 94 hours, which we believe translates to the potential for once-weekly dosing in humans. This compares to the half-life of the unmasked EGFR-TCE of approximately one hour. In figure 16, we illustrate our EGFR-TRACTr and the EGFR-TCE half-lives in a study in NHPs.

Figure 16. Our EGFR-TRACTr had a half-life of approximately 94 hours in NHPs, which we believe is in line with once-weekly dosing in humans

In this same study, dosing our EGFR-TRACTr at 100mg/kg resulted in minimal levels of inflammatory cytokine release, relative to an unmasked EGFR-TCE at 10mg/kg, which led to a greater than 20-fold expression of IL-6. We believe these data suggest that our EGFR-TRACTr has the potential to reduce CRS risk relative to an unmasked EGFR-TCE. Furthermore, in a separate, study of our EGFR-TRACTr dosed at 600mg/kg once-weekly for three weeks in NHPs, no dose-limiting toxicities were identified.

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Figure 17. Dosing of our EGFR-TRACTr in NHPs had minimal effects on inflammatory cytokine levels. In contrast, dosing of an EGFR-TCE led to substantial levels of IL-6 as well as elevation of other inflammatory cytokines commonly observed in CRS

Clinical Development Plans

We are conducting IND-enabling studies with our EGFR-TRACTr. We plan to submit an IND in the second half of 2022 to conduct a Phase 1 trial in patients with advanced solid tumors that overexpress EGFR, including CRC, SCCHN and NSCLC, to assess safety, tolerability, and pharmacokinetics. In addition, we plan to evaluate additional opportunities where EGFR is overexpressed.

Our TROP2-TRACTr for the treatment of TROP2 overexpressing solid tumors

We are developing our TROP2-TRACTr program to treat TROP2 overexpressing solid tumors, including TNBC, UC, and NSCLC. TROP2 is a cell surface glycoprotein overexpressed by many human carcinomas. In preclinical studies, we showed that our TROP2-TRACTr had an over 6,500-fold reduced ability to activate T cells when it was masked compared to unmasked. In addition, we demonstrated that our TROP2-TRACTr was well-tolerated in NHPs, substantially reduced cytokine release relative to the unmasked TCE, and had a prolonged half-life. We plan to submit an IND for our TROP2-TRACTr product candidate in 2023.

Triple-negative breast cancer overview

Although some forms of breast cancer are less aggressive and have displayed improving survival rates, there are still highly aggressive forms of disease that represent a significant unmet need. For example, TNBC tends to present later than other types of breast cancer and grows, spreads, and recurs faster than most other types. Women with triple-negative breast cancer are also more likely to develop metastases. They typically have a poorer prognosis than other types of breast cancer due to the lack of targeted therapies available for treatment. TNBC is referred to as “triple-negative” because it is estrogen receptor-negative (ER-), progesterone receptor-negative (PR-), and HER2-, and is unlikely to respond to hormonal or HER2-targeted therapies. TNBC accounts for approximately 10-15 percent of all breast cancers and is more aggressive and likely to recur compared to receptor-positive breast cancers. The five-year survival rate for TNBC is approximately 77 percent compared to approximately 90 percent for other types of breast cancers.

Urothelial cancer overview

Cancer that begins in cells that line the urethra, bladder, ureters, renal pelvis, and some other organs is referred to as urothelial carcinoma. UC is the most common type of bladder cancer, and bladder cancer is the fourth most common cancer in men in the United States. UC accounts for 90 percent of all bladder cancers, and can also arise in

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the renal pelvis and ureters. The American Cancer Society estimates that approximately 81,180 new cases of, and 17,100 deaths were caused by, bladder cancer in the United States in 2021. Despite the approval of checkpoint inhibitors in recent years, the treatment of patients with advanced UC in the second-line setting remains a significant unmet need. The relative five-year survival rate for patients with metastatic UC is about six percent.

TROP2 is a validated cancer target

TROP2 is a transmembrane protein involved in calcium signal transduction. The observed TROP2 level is low in normal tissues, and TROP2 is overexpressed in various cancer types, such as breast, lung, urothelial, endometrial, ovarian, prostate, pancreatic, gastric, colon, head and neck, and glioma. Furthermore, TROP2 functions as an oncogene capable of driving tumorigenesis and metastasis in epithelial cancers such as colorectal cancer. TROP2 expression in cancer cells has long been correlated with drug resistance, and high levels of TROP2 expression have been shown to correlate with poor prognosis in various cancer types. A meta-analysis, including data from approximately 2,500 patients, increased TROP2 expression was associated with poor overall survival and disease-free survival outcomes across several solid tumors.

The increased expression of TROP2 in tumors has made it both a prognostic biomarker and a therapeutic target for cancer. Sacituzumab govitecan, marketed as Trodelvy by Gilead, is an anti-TROP2 ADC that received accelerated approval by the FDA in April 2020 as a treatment for metastatic TNBC and UC in April 2021. In metastatic TNBC, this ADC had a 33 percent overall response rate, providing clinical validation of TROP2 as a target. However, sacituzumab govitecan was also associated with significant toxicities: 21 percent of patients reported Grade 3 or Grade 4 serious gastrointestinal events, and 43 percent reported Grade 3 or Grade 4 neutropenia. Beyond TNBC, a published report from the 2019 Genitourinary Cancers Symposium indicated an objective response with sacituzumab govitecan in approximately 30 percent of highly pretreated urothelial cancer patients.

Furthermore, in a Phase 1 trial of datopotamab deruxtecan (DS-1062), an anti-TROP2 ADC in clinical development by AstraZeneca and Daiichi Sankyo, objective responses were obtained by 21 percent to 25 percent of NSCLC patients treated. Promising third-party clinical data in multiple metastatic cancer indications have been reported, including HR+/HER2- breast and urothelial cancers. As a therapeutic target, TROP2’s independence from other therapeutic approaches (e.g., checkpoint inhibitors, Poly (ADP-ribose) polymerase (PARP) inhibitors) lends combination therapy with TROP2 targeted therapies a potentially promising approach.

Our solution: our TROP2-TRACTr program

We designed our TROP2-TRACTr program as a dual-masked TRACTr in which both the TROP2 and the CD3e antigen binding domains are masked in order to minimize the risk of on-target, healthy tissue toxicity. We illustrate our dual masked TROP2-TRACTr structure in the figure below.

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Figure 18. Structure of our dual masked TROP2-TRACTr

In preclinical in vitro studies, our unmasked TROP2-TCE led to T cell-mediated cell killing of several tumor cell lines with potencies that generally correlated with the level of TROP2 expression. The TROP2-TCE was active against both high TROP2-expressing cell lines, such as BxPC3 and NCI-N87, which were sensitized to killing by concentrations of TROP2-TCE of less than 1 pM and the low TROP2-expressing cell line, HCT116 at 10 pM, as shown in the figure below.

Figure 19. Our TROP2-TCE led to potent T cell-mediated cell killing across a range of tumor types that express TROP2 in preclinical studies

We found that our TROP2-TRACTr exhibited a 12,500-fold shift in activating T cell killing of TROP2 expressing tumor cells in an in vitro assay when it was masked than when the mask was removed. We believe this differential in activity has the potential to greatly reduce toxicities caused by TROP2 expression outside of tumors.

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Figure 20. Our masked TROP2-TRACTr was greater than 12,500-fold less potent at activating T cell mediated killing of TROP2-expressing tumor cells than unmasked TROP2-TCE in an in vitro assay

In NHPs, our TROP2-TRACTr demonstrated a half-life of approximately 90 hours, which we believe is in line with the potential for once-weekly dosing in humans. The half-life of the unmasked TROP2-TCE was less than 2 hours. We illustrate our TROP2-TRACTr and the TROP2-TCE half-lives in our NHP study in the figure below.

Figure 21. Our TROP2-TRACTr had a half-life of 90 hours in NHPs, which we believe is in line with once-weekly dosing in humans

In this same study, dosing of our TROP2-TRACTr at 100mg/kg resulted in minimal levels of inflammatory cytokine production, relative to an unmasked TROP2-TCE at 3mg/kg, which led to a greater than 20-fold expression of IL-6 as shown in the figure below. We believe these data suggest our TROP2-TRACTr has the potential to reduce CRS risk relative to an unmasked TROP2-TCE.

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Figure 22. Dosing of our TROP2-TRACTr in NHPs had minimal effects on inflammatory cytokine levels. In contrast, dosing of a TROP2-TCE led to substantial levels of IL-6 as well as elevation of other inflammatory cytokines commonly observed in CRS.

Clinical development plans

We plan to submit an IND for TROP2-TRACTr in 2023 to conduct a Phase 1 trial in patients with advanced solid tumors that are overexpressing TROP2, including TNBC, UC, and NSCLC, to assess safety, tolerability, and pharmacokinetics.

Our PD-L1 x CD28 TRACIr for the treatment of solid tumors

Activation of T cells is a highly regulated process that typically requires two signaling events for full functionality: the first signal is initiated upon binding of the MHC-antigen complex, which helps distinguish “self” from “non-self” to the T cell receptor (TCR) and the second signal through activation of a costimulatory receptor. While the first recognition signal activates a T cell and triggers T cell-mediated toxicity of the recognized cell, if the T cell does not receive a second costimulatory signal, it can lead to T cell tolerance whereby the T cells continue to recognize the tumor antigen but do not mount an immune response against the tumor cell. The second costimulatory signal prevents T cell tolerance and further activates the T cell to enhance T cell cytotoxicity towards the targeted cell. The interaction of tumor cells and T cells with and without our PD-L1xCD28 costimulatory bispecific is depicted in the figure below.

Figure 23. T cell costimulatory bispecific activators such as our PD-L1xCD28 program have the potential to increase activation both as monotherapy and in combination with TCEs

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Our PD-L1xCD28 costimulatory bispecific is designed to act both as an antagonist of PD-L1 and a conditional agonist of CD28 as shown in the figure above. While CD28 agonism has shown some clinical promise, the efficacy seen with this approach has been limited due to dose-limiting toxicities that result from systemic activation of CD28. Our PD-L1xCD28 costimulatory bispecific is designed to conditionally agonize CD28 only in the presence of PD-L1, which is often overexpressed by tumors to avoid T cell- mediated killing. In addition, engagement of PD-L1 by our costimulatory bispecific is designed to block PD-1 binding and provide checkpoint inhibition. We believe this unique combination of potential mechanisms of action could enhance anti-tumor responses and limit the systemic toxicity of CD28 agonism. This is supported by studies in NHPs with our costimulatory bispecific demonstrating a lack of systemic immune system activation as evidenced by the lack of cytokine release, as shown in the figure below.

Figure 24. Dosing of our PD-L1xCD28 costimulatory bispecific in NHPs had minimal effects on inflammatory cytokine levels, and several of these were below limits of quantification

Despite unprecedented clinical response rates, most patients fail to respond to therapies targeting PD-1 and PD-L1. We believe this is partly because T cells require costimulation for full functionality, to enable the immune system to attack a tumor fully. We believe the addition of immune costimulatory agents could derive further benefit. A preclinical study comparing a checkpoint antibody with our costimulatory bispecific with PD-L1 expressing tumor cells demonstrated induction of T cell cytotoxicity and IFNg release with the costimulatory bispecific and lack of activity with the checkpoint antibody, as shown in the figure below. In addition, IL-2 release was observed with the costimulatory bispecific, which is consistent with CD28 agonism. We believe that intra-tumoral release of IL-2 has the potential to further enhance the activity of tumor resident T cells to improve activity further.

Figure 25. Our unmasked PD-L1xCD28 bispecific led to T cell-dependent anti-tumor activity and the release of IFNg and IL-2 from T cells in preclinical studies

We plan to clinically evaluate the single-agent activity of our costimulatory bispecific to treat patients with PD-L1 expressing tumors, including those refractory to, or relapsed from, approved checkpoint inhibitor therapies. Additional supporting evidence for this strategy is provided in the figure below, where our costimulatory bispecific demonstrated T cell-mediated killing of a range of different cancer cells, including breast cancer, NSCLC, and skin cancer.

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Figure 26. Our PD-L1xCD28 bispecific led to T cell-mediated cell killing of a number of cell lines

We also plan to evaluate our costimulatory bispecific in combination with our TRACTrs clinically. Since TCE activation of T cells occurs via the first signal, we expect improved activity when combined with our costimulatory bispecific. In preclinical studies, our costimulatory bispecific enhanced anticancer activity greater than 30-fold when combined with a PSMA-TCE. We believe these data highlight the potential synergy between a PD-L1/CD28 bispecific and a CD3-directed TCE, as shown in the figure below.

Figure 27. Our PD-L1xCD28 bispecific combined with a TCE led to increased cell killing in preclinical studies

To reduce potential toxicities and enable combination therapy with our TRACTrs we optimized the masks for our T cell costimulatory bispecific molecules. We also modified them to contain our proprietary cleavable linkers and albumin-binding domain with the goal of creating bispecific product candidates that can be safely administered with a long half-life when in the inactive state, and display potent T cell costimulatory activity that is limited to tumor sites. We anticipate developing this bispecific costimulatory molecule both as a monotherapy and in combination with other T cell engagers, including with our TRACTr programs. The below schematic illustrates the potentially synergistic benefit of combining our bispecific costimulatory molecule with our TRACTrs. In this scenario, TRACTr-mediated anti-tumor activity is further enhanced through a reversal of tumor-mediated immunesuppression via simultaneous binding to PD-L1 and CD28 mediated by our costimulatory bispecific.

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Figure 28. Potential synergistic benefit of combining our bispecific costimulatory molecule with our TRACTrs

Clinical development plans

We selected a development candidate for our PD-L1xCD28 TRACIr in the fourth quarter of 2021,and we are conducting IND-enabling studies. We plan to submit an IND in 2023 to conduct a Phase 1 trial in patients with advanced solid tumors to assess safety, tolerability, and pharmacokinetics.

Manufacturing

Certain features of our TRACTr and TRACIr molecules allow for their development, manufacturing and control processes to closely resemble those used for standard monoclonal antibodies. First, our TRACTr and TRACIr molecules are readily expressed at high levels recombinantly in common Chinese hamster ovary cells. Second, our TRACTr and TRACIr molecules bind protein A via the anti-albumin-binding domain. Protein A affinity chromatography is the standard technique for capturing recombinant monoclonal antibodies and is a very robust purification procedure due to its specificity. After the protein A affinity chromatography step, TRACTrs and TRACIrs are further purified and polished using standard ion exchange and/or hydrophobic-interaction chromatography, virus filtration, and ultrafiltration/diafiltration formulation steps. Our anticipated dosing strategy gives us the advantage of manufacturing at relatively smaller scale and formulating our drug products at low protein concentrations in typical formulation matrices. Through developability and manufacturability assessments, we continue to verify that our TRACTr and TRACIr constructs have advantageous properties that include high solubility, minimal aggregation, and good stability. We believe all of these attributes will allow our products to be manufactured at a substantially lower cost than monoclonal antibodies.

We do not own or operate and currently have no plans to establish cGMP manufacturing facilities and laboratories. We currently rely on third-party manufacturers and suppliers for the raw materials and starting components used to make our TRACTrs and TRACIrs, and we expect to continue to do so to meet our development, clinical and commercial activities. Our third-party manufacturers are qualified to manufacture our product candidates under cGMP requirements and other applicable laws, guidance and regulations. We believe there are multiple sources for all of the materials and components required for the manufacture of our product candidates.

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All of our TRACTrs and TRACIrs are and will continue to be manufactured from a vial of a master cell bank or working cell bank of that biologic therapeutic’s production cell line. We have or intend to have one master cell bank for each TRACTr and TRACIr that was or will be produced and tested in accordance with current good manufacturing practice (cGMP) and applicable regulations. Each master cell bank is or will be stored in two independent locations, and we intend to produce working cell banks for each product candidate later in product development. It is possible that we could lose multiple cell banks from multiple locations and have our manufacturing severely impacted by the need to replace the cell banks. However, we believe we have an adequate backup should any particular cell bank be lost in a catastrophic event.

We currently and plan to continue to obtain bulk drug substance (BDS) for our TRACTrs and TRACIrs from a single-source third-party contract manufacturer. While any reduction or halt in the supply of BDS from this contract manufacturer could limit our ability to develop our product candidates until a replacement contract manufacturer is found and qualified, we believe that we will have sufficient BDS to support any future clinical trial programs. We are in the process of developing our supply chain for each of our product candidates and have and intend to continue to put in place agreements under which our third-party contract manufacturers will generally provide us with necessary quantities of BDS and drug product on a project-by-project basis based on our development and commercial supply needs.

Competition

The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products. While we believe that our technology, development experience, and scientific knowledge provide us with competitive advantages, we face potential competition from many different sources, including large pharmaceutical and biotechnology companies, academic institutions, government agencies, and other public and private research organizations that conduct research, seek patent protection, and establish collaborative arrangements for the research, development, manufacturing, and commercialization of cancer immunotherapies. Any product candidates that we successfully develop and commercialize will compete with new immunotherapies that may become available in the future.

We compete in the segments of the pharmaceutical, biotechnology, and other related markets that develop immuno oncology treatments. Many other companies have commercialized and/or are developing immuno oncology treatments for cancer including large pharmaceutical and biotechnology companies, such as AbbVie, Amgen, AstraZeneca, Bristol Myers Squibb, Johnson & Johnson, Merck & Co., Novartis, Pfizer, and Roche/Genentech.

We face significant competition from pharmaceutical and biotechnology companies that target specific tumor-associated antigens using immune cells or other cytotoxic modalities. These generally include immune cell redirecting therapeutics (e.g., T cell engagers), adoptive cellular therapies (e.g., CAR T cell therapies), antibody-drug conjugates, targeted radiopharmaceuticals, targeted immunotoxin, and targeted cancer vaccines.

With respect to our lead PSMA-TRACTr, we are aware of other competing PSMA-targeting clinical-stage therapeutics, which include, but are not limited to: T cell engagers from Amgen, Abbvie, Janssen/Genmab, Harpoon Therapeutics, and Regeneron Pharmaceuticals; CAR T cell therapies from Poseida Therapeutics, Sorrento Therapeutics, and Tmunity Therapeutics; NK cell engagers from Crescendo Biologics; and radiopharmaceuticals from Novartis, Point Biopharma, Telix and Bayer.

With respect to our EGFR-TRACTr, we face competition from several targeted therapies approved by the FDA to treat CRC, including, but not limited to, Roche’s bevacizumab, Amgen’s panitumumab, Eli Lilly/Merck KGaA’s cetuximab, Bayer’s regorafenib, and Eli Lilly’s ramucirumab. We also face competition from other anti-EGFR therapies that are in clinical development for CRC. We believe that the most advanced candidates are those being developed by Takeda, Sorrento Therapeutics and Spectrum Pharmaceuticals.

With respect to our TROP2-TRACTr, Gilead’s sacituzumab govitecan was the first ADC approved by the FDA for the treatment of relapsed/refractory metastatic TNBC. We are aware of other TROP2 therapies that are in clinical development for solid tumors. We believe that the most advanced candidates are Daiichi Sankyo/AstraZeneca’s ADC DS-8201 and KLUS Pharma’s SKB264. Additional competition may come from leading companies in lung cancer and breast cancer, including, but not limited to, AstraZeneca, Bristol Myers Squibb, Merck & Co., Merck KGaA, Pfizer, and Roche.

With respect to our PD-L1 x CD28 TRACIr, we are aware of other CD28-based multispecifics that are in clinical development for solid tumors. We believe the most advanced candidates are Alpine Immune Sciences’

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ALPN-202, Regeneron’s REGN5678, REGN5668 and REGN7075, and Sanofi’s SAR443216. Additional competition may come from other companies developing costimulatory multispecifics, including, but not limited to Genmab/BioNTech, Inhibrx, Incyte/Merus, KAHR Medical and Shattuck Labs.

We are currently developing a pipeline of TRACTr and other protease-activated therapeutics that face increasing competition from other biologic prodrug developers, which include, but are not limited to, Adagene, Akrevia Therapeutics, Bayer AG, BioAtla, Chugai Pharmaceutical Co., CytomX Therapeutics, Genentech, Harpoon Therapeutics, Nektar Therapeutics, Pandion Therapeutics, Revitope Oncology, Roche Holding AG, Sanofi, and Seattle Genetics.

Many of the companies against which we are competing or against which we may compete in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals, and marketing approved drugs than we do. Mergers and acquisitions in the pharmaceutical, biotechnology, and diagnostic industries may result in even more resources being concentrated among a smaller number of our competitors. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites, and enrolling subjects for any future clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

We could see a reduction or elimination of our commercial opportunity if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient, or are less expensive than any products that we or our collaborators may develop. Our competitors also may obtain FDA or foreign regulatory approval for their products more rapidly than we may obtain approval for our product candidates, which could result in our competitors establishing a strong market position before we or our collaborators are able to enter the market. The key competitive factors affecting the success of all of our programs are likely to be efficacy, safety, and convenience. If we are not successful in developing, commercializing, and achieving higher levels of reimbursement than our competitors, we will not be able to compete against them and our business would be materially harmed.

Research Collaboration and Exclusive License Agreement with Merck Sharp & Dohme Corp.

On December 15, 2020, we and Merck Sharp & Dohme Corp. (Merck), entered into a research collaboration and exclusive license agreement (the Merck Agreement). The Merck Agreement provides that we and Merck will use commercially reasonable efforts to engage in certain research and development activities related to our TRACTr platform technology that are to be funded by Merck up to specified annual limits. Pursuant to the agreement, Merck has the right to designate up to two TRACTr product candidates in each case to be developed against a target (a Collaboration Target). We granted Merck an exclusive, worldwide, royalty-bearing, sublicensable license to certain of our patent rights and know-how with respect to the Collaboration Targets, in each case once designated by Merck, to research, develop, make, have made, use, import, offer to sell, and sell compounds and any licensed products related thereto. Merck selected one of the Collaboration Targets upon execution of the Merck Agreement and has a specified period of time to select the second Collaboration Target. Following the research term, Merck will have the sole right to research, develop, manufacture, and commercialize the licensed compounds and products directed against the Collaboration Targets.

In consideration of the rights granted to Merck under the Merck Agreement, Merck paid us a one-time upfront payment of $8.0 million in respect of the first Collaboration Target and is required to pay us an additional one-time payment of $8.0 million upon the selection of the second Collaboration Target. In addition, Merck is required to make milestone payments to us upon the successful completion of certain regulatory and development milestones, in an aggregate amount not to exceed $142.5 million for each of the two Collaboration Targets ($285.0 million collectively for both Collaboration Targets). Merck is also required to make milestone payments to us upon the successful completion of certain sales milestones, in an aggregate amount not to exceed $350.0 million for each licensed product under either of the Collaboration Targets.

Merck is also required to make tiered royalty payments on a product-by-product and country-by-country basis, ranging from low single-digit to low teens percentage royalty rates, on specified portions of annual net sales for licensed products under either of the Collaboration Targets that are commercialized. Such royalties are subject to reduction, on a product-by-product and country-by-country basis, for licensed products not covered by patent claims, or that require Merck to obtain a license to third-party intellectual property in order to commercialize the

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licensed product, or that are subject to compulsory licensing. Merck’s royalty obligation with respect to a given licensed product in a given country begins upon, and ends no less than 10 years following, the first sale of such product in such country.

The Merck Agreement will terminate at the end of the calendar year in which the expiration of all royalty obligations occurs for all licensed products under the agreement. Merck has the unilateral right to terminate the agreement in its entirety or on a Collaboration Target by Collaboration Target basis at any time and for any reason upon prior written notice to us. Both parties have the right to terminate the agreement for an uncured material breach, certain illegal or unethical activities, and insolvency of the other party. Upon expiration of the agreement but not early termination thereof, and provided all payments due under the agreement have been made, Merck’s exclusive licenses under the agreement will become fully paid-up and perpetual.

License Agreement with WuXi Biologics (Hong Kong) Limited

In April 2021, we entered into a cell line license agreement (Cell Line License Agreement) with WuXi Biologics (Hong Kong) Limited (WuXi Biologics), pursuant to which we received a non-exclusive, worldwide, sublicensable license under certain of WuXi Biologics’ patent rights, know-how and biological materials (WuXi Biologics Licensed Technology), to use the WuXi Biologics Licensed Technology to make, use, sell, offer for sale and import certain therapeutic products produced through the use of the cell line licensed by WuXi Biologics under the Cell Line License Agreement (WuXi Biologics Licensed Product). Specifically, the WuXi Biologics Licensed Technology is used to manufacture a component of our PSMA-TRACTr and EGFR-TRACTr product candidates.

In consideration for the license, we agreed to pay WuXi Biologics a non-refundable, one-time license fee of $0.2 million upon Wuxi Biologics’ achievement of a certain technical milestone, which was achieved in May 2021. Additionally, if we do not engage WuXi Biologics or its affiliates to manufacture the WuXi Biologics Licensed Products for our commercial supplies, we are required to make royalty payments to WuXi Biologics in an amount equal to a low single-digit percentage of specified portions of net sales of WuXi Biologics Licensed Products manufactured by a third-party manufacturer. We have the right (but not the obligation) to buy out our remaining royalty obligations with respect to each WuXi Biologics Licensed Product by paying WuXi Biologics a one-time payment in an amount ranging from low single digit million dollars to a maximum of $15.0 million depending on the development and commercialization stage of the WuXi Biologics Licensed Product (the Buyout Option), and upon such payment, our license with respect to such WuXi Biologics Licensed Product will become fully paid-up, irrevocable, and perpetual. The royalty obligations will remain in effect during the term of the Cell Line License Agreement so long as we have not exercised the Buyout Option.

The Cell Line License Agreement will continue indefinitely unless terminated (i) by us upon three months’ prior written notice and our payment of all amounts due to WuXi Biologics through the effective date of termination, (ii) by either party for the other party’s material breach that remains uncured for 30 days after written notice, and (iii) by WuXi Biologics if we fail to make a payment and such failure continues for 30 days after receiving notice of such failure.

Intellectual Property

We strive to protect and enhance the proprietary technology, inventions, and improvements that are commercially important to our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties. We own the patent applications relating to our TRACTr and TRACIr platform technologies. Our intellectual property policy includes seeking to protect our proprietary position by, among other methods, striving to obtain issued patents by filing and prosecuting patent applications in the United States and in jurisdictions outside of the United States, directed to our proprietary technology, inventions, improvements, and product candidates that are important to the development and implementation of our business. We also rely on trade secrets and know-how relating to our proprietary technology and product candidates, continued innovation, and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of immunotherapy. We also plan to rely on data exclusivity, market exclusivity, and patent term extensions when available. Our commercial success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our technology, inventions, and improvements; to preserve the confidentiality of our trade secrets and know-how; to obtain and maintain licenses to use intellectual property owned by third parties; to defend and enforce our proprietary rights, including any patents that we may own in the future; and to operate without infringing on the valid and enforceable patents and other proprietary rights of third parties.

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As of February 28, 2022, we own 19 pending U.S. provisional and non-provisional patent applications, nine pending patent applications filed under the Patent Cooperation Treaty (PCT) and eight foreign patent applications. Specifically, we have one U.S. non-provisional patent application and four foreign patent applications directed to compositions of our TRACTr and TRACIr platform technologies that are applicable across our PSMA, TROP2, EGFR, and costimulatory bispecific (CD28 and PD-L1) product candidates. We also have three PCT patent applications and one U.S. non-provisional patent application that cover compositions and applications of various components and aspects of our TRACTr and TRACIr platform technologies and have general applicability across various product candidates. We have one PCT patent application that covers compositions and applications of components of our TRACTr platform technology that has generally applicability to TRACTr product candidates. We further have two provisional patent applications, two PCT patent applications, one U.S. non-provisional patent application, and two foreign patent applications specific to the PSMA product candidate, two provisional patent applications, two PCT patent applications, and two foreign patent applications specific to the TROP2 product candidate, two provisional patent applications specific to the EGFR product candidate, and one provisional patent application and one PCT patent application specific to the bispecific product candidate. In addition, we have four provisional patent applications, five non-provisional patent applications and one PCT patent application relating to compositions of our other proprietary antibodies, compounds, technology, inventions, improvements, and other aspects of our technology that are not under active development. Any patents that issue from these pending patent applications are expected to expire between 2038 and 2043, absent any patent term adjustments or extensions. We also possess substantial know-how and trade secrets relating to the development and commercialization of our product candidates, including related manufacturing processes and technology.

With respect to our product candidates and processes, we intend to develop and commercialize in the normal course of business, and we intend to pursue patent protection directed to, when possible, compositions, methods of use, methods of making, dosing, and formulations. We may also pursue patent protection with respect to manufacturing, therapeutic development processes and technologies, and therapeutic delivery technologies.

Issued patents can provide protection for varying periods of time, depending upon the date of filing of the patent application, the date of patent issuance, and the legal term of patents in the countries in which they are obtained. In general, patents issued for applications filed in the United States can provide exclusionary rights for 20 years from the earliest effective filing date excluding U.S. provisional applications. In addition, in certain instances, the term of an issued U.S. patent that is directed to or claims an FDA approved product can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory review period, which is called patent term extension. The restoration period cannot be longer than five years and the total patent term, including the restoration period, must not exceed 14 years following FDA approval. The term of patents outside of the United States varies in accordance with the laws of the foreign jurisdiction, but typically is also 20 years from the earliest effective filing date excluding U.S. provisional applications. However, the actual protection afforded by a patent varies on a product-by-product basis, from country-to-country, and depends upon many factors, including the type of patent, the scope of its claims, the availability of regulatory-related extensions, the availability of legal remedies in a particular country, and the validity and enforceability of the patent.

The patent positions of companies like ours are generally uncertain and involve complex legal and factual questions. No consistent policy regarding the scope of claims allowable in patents in the field of immunotherapy has emerged in the United States. The relevant patent laws and their interpretation outside of the United States is also uncertain. Changes in either the patent laws or their interpretation in the United States and other countries may diminish our ability to protect our technology or product candidates and enforce the patent rights that we may license, and could affect the value of such intellectual property. In particular, our ability to stop third parties from making, using, selling, offering to sell, or importing products that infringe our intellectual property will depend in part on our success in obtaining and enforcing patent claims that cover our technology, inventions, and improvements. With respect to company-owned intellectual property, we cannot guarantee that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications we may file in the future, nor can we be sure that any patents that may be granted to us in the future will be commercially useful in protecting our products, the methods of use or manufacture of those products. Moreover, even the issued patents that we license do not guarantee us the right to practice our technology in relation to the commercialization of our products. Patent and other intellectual property rights in the pharmaceutical and biotechnology space are evolving and involve many risks and uncertainties. For example, third parties may have blocking patents that could be used to prevent us from commercializing our product candidates and practicing our proprietary technology, and the issued patents that we may in-license and those that may issue in the future may be challenged, invalidated, or

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circumvented, which could limit our ability to stop competitors from marketing related products or could limit the term of patent protection that otherwise may exist for our product candidates. In addition, the scope of the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies that are outside the scope of the rights granted under any issued patents that we own or that we may exclusively in-license. For these reasons, we may face competition with respect to our product candidates. Moreover, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any particular product candidate can be commercialized, any patent protection for such product may expire or remain in force for only a short period following commercialization, thereby reducing the commercial advantage the patent provides. A comprehensive discussion on risks relating to intellectual property is provided under the section of this Annual Report titled “Risk Factors—Risks Related to Our Intellectual Property.”

Government Regulation

Government authorities in the United States at the federal, state and local level and in other countries and jurisdictions, including the European Union, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of drug and biological products, such as our investigational medicines and any future investigational medicines. Generally, before a new drug or biologic can be marketed, considerable data demonstrating its quality, safety and efficacy must be obtained, organized into a format specific for each regulatory authority, submitted for review and approved by the regulatory authority.

Regulatory Approval in the United States

In the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act (FDCA) and the Public Health Service Act (PHSA), and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of biologic products. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as clinical hold, FDA refusal to approve pending biologics license applications (BLAs), warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties and criminal prosecution.

A biologic must be approved by the FDA pursuant to a BLA before it may be legally marketed in the United States. The process generally involves the following:

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

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submission to the FDA of an investigational new drug application (IND), which must become effective before human clinical trials may begin;

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

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

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submission to the FDA of a BLA;

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payment of any user fees for FDA review of the BLA;

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

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satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the biologic, or components thereof, will be produced to assess compliance with current good manufacturing processes (cGMP) requirements to assure that the facilities, methods and controls are adequate to preserve the biologic’s identity, strength, quality and purity;

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satisfactory completion of any potential FDA audits of the clinical trial sites that generated the data in support of the BLA to assure compliance with GCPs and integrity of the clinical data;

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FDA review and approval of the BLA, including consideration of the views of any FDA advisory committee; and

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compliance with any post-approval requirements, including REMS, where applicable, and post- approval studies required by the FDA as a condition of approval.

Preclinical Studies

Before testing any biological product candidates in humans, the product candidate must undergo rigorous preclinical testing. Preclinical studies include laboratory evaluation of product candidates and formulations, as well as in vitro and animal studies to assess the potential for adverse events and in some cases to establish a rationale for therapeutic use. The conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for safety/toxicology studies. An IND sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical studies, among other things, to the FDA as part of an IND. An IND is a request for authorization from the FDA to administer an investigational product to humans and must become effective before human clinical trials may begin. Some long-term preclinical testing may continue after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the trial on clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

Clinical Trials

The clinical stage of development involves the administration of the investigational product to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with GCPs, an international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and monitors; as well as (iii) under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated in the trial. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to the FDA as part of the IND. Furthermore, each clinical trial must be reviewed and approved by an IRB for each institution at which the clinical trial will be conducted to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves the informed consent form that must be provided to each clinical trial subject or his or her legal representative and must monitor the clinical trial until completed. There also are requirements governing the reporting of ongoing clinical trials and completed clinical trial results to public registries. Information about certain clinical trials, including clinical trial results, must be submitted within specific timeframes for publication on the www.clinicaltrials.gov website. Information related to the product, patient population, phase of investigation, clinical trial sites and investigators and other aspects of the clinical trial is then made public as part of the registration.

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

Clinical trials are generally conducted in three sequential phases, known as Phase 1, Phase 2 and Phase 3, which may overlap or be combined:

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Phase 1 clinical trials generally involve a small number of healthy volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate. The primary purpose of these clinical trials is to assess the metabolism, pharmacokinetics, pharmacologic action, side effect tolerability, safety of the product candidate, and, if possible, early evidence of effectiveness.

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Phase 2 clinical trials generally involve studies in disease-affected patients to evaluate proof of concept and/or determine the dosing regimen(s) for subsequent investigations. At the same time, safety and further pharmacokinetic and pharmacodynamic information is collected, possible adverse effects and safety risks are identified, and a preliminary evaluation of efficacy is conducted.

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Phase 3 clinical trials generally involve a large number of patients at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product for its intended use, its safety in use and to establish the overall benefit/risk relationship of the product and provide an

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adequate basis for product labeling. In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the biologic.

A single Phase 3 or Phase 2 trial with other confirmatory evidence may be sufficient in rare instances to provide substantial evidence of effectiveness (generally subject to the requirement of additional post-approval studies).

The FDA, the IRB, or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including non-compliance with regulatory requirements or a finding that the 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 or biologic has been associated with unexpected serious harm to patients. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether a trial may move forward at designated checkpoints based on access to certain data from the trial.

Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the chemistry and physical characteristics of the drug or biologic as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product and, among other things, companies must develop methods for testing the identity, strength, quality, potency and purity of the final product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the investigational medicines do not undergo unacceptable deterioration over their shelf life.

FDA Review Process

Following completion of the clinical trials, the results of preclinical studies and clinical trials are submitted to the FDA as part of a BLA, along with proposed labeling, chemistry and manufacturing information to ensure product quality and other relevant data. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety, purity, and potency of the investigational product to the satisfaction of the FDA. FDA approval of a BLA must be obtained before a biologic or drug may be marketed in the United States. The cost of preparing and submitting a BLA is substantial. Under the PDUFA, each BLA must be accompanied by a substantial user fee. The FDA adjusts the PDUFA user fees on an annual basis. Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business. Additionally, no user fees are assessed on BLAs for products designated as orphan drugs, unless the product also includes a non-orphan indication. The applicant under an approved BLA is also subject to an annual program fee.

The FDA reviews all submitted BLAs before it accepts them for filing and may request additional information. The FDA must make a decision on accepting a BLA for filing within 60 days of receipt, and such decision could include a refusal to file by the FDA. Once the submission is accepted for filing, the FDA begins an in-depth review of the BLA. Under the goals and policies agreed to by the FDA under PDUFA, the FDA has 10 months, from the filing date, in which to complete its initial review of an original BLA and respond to the applicant, and six months from the filing date of an original BLA designated for priority review. The FDA does not always meet its PDUFA goal dates for standard and priority BLAs, and the review process can be extended by FDA requests for additional information or clarification.

Before approving a BLA, the FDA will generally conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with cGMP requirements. The FDA will not

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approve the product 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.

The FDA also may audit data from clinical trials to ensure compliance with GCP requirements and the integrity of the data supporting safety and efficacy. Additionally, the FDA may refer applications for novel products or products that present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions, if any. The FDA is not bound by recommendations of an advisory committee, but it generally follows such recommendations when making decisions on approval. The FDA likely will reanalyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the review process.

After the FDA evaluates a BLA, it will issue either an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the biologic with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form. A Complete Response Letter generally outlines the deficiencies in the BLA and may require additional clinical data, additional pivotal clinical trial(s) and/or other significant and time-consuming requirements related to clinical trials, preclinical studies or manufacturing in order for FDA to reconsider the application. If a Complete Response Letter is issued, the applicant may either resubmit the BLA, addressing all of the deficiencies identified in the letter, or withdraw the application or request an opportunity for a hearing. Even if such data and information are submitted, the FDA may decide that the BLA does not satisfy the criteria for approval.

As a condition of BLA approval, the FDA may require a Risk Evaluation and Mitigation Strategy (REMS) to help ensure that the benefits of the biologic outweigh the potential risks to patients. A REMS can include medication guides, communication plans for healthcare professionals and elements to assure a product’s safe use (ETASU). An ETASU can include, but is not limited to, special training or certification for prescribing or dispensing the product, dispensing the product only under certain circumstances, special monitoring and the use of patient-specific registries. The requirement for a REMS can materially affect the potential market and profitability of the product. Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the product’s safety or efficacy.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan designation to a biological product intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States but for which there is no reasonable expectation that the cost of developing and making the product for this type of disease or condition will be recovered from sales of the product in the United States.

Orphan drug designation must be requested before submitting a BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan drug designation on its own does not convey any advantage in or shorten the duration of the regulatory review and approval process.

Among the other benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA application user fee. In addition, if a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same product for the same indication for seven years from the date of such approval, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity by means of greater effectiveness, greater safety, or providing a major contribution to patient care, or in instances of drug supply issues. Competitors, however, may receive approval of either a different product for the same indication or the same product for a different indication. In the latter case, because healthcare professionals are free to prescribe products for off-label uses based on their independent medical judgement, the competitor’s product could be used for the orphan indication despite another product’s orphan exclusivity.

An orphan-designated product may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation. In addition, exclusive marketing rights in the

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United States may be lost if the FDA later determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.

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 both the product and the specific indication for which it is being studied. The sponsor of a new biologic candidate can request the FDA to designate the candidate for a specific indication for fast track status concurrent with, or after, the submission of the IND for the candidate. The FDA must determine if the biologic candidate qualifies for fast track designation within 60 days of receipt of the sponsor’s request. For fast track products, sponsors may have greater interactions with the FDA and the FDA may initiate review of sections of a fast track product’s BLA before the application is complete. This “rolling review” is available if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA. Any product submitted to the FDA for marketing, including under a fast track program, may be eligible for other types of FDA programs intended to expedite development and review, such as breakthrough therapy, priority review and accelerated approval.

Breakthrough therapy designation may be granted for products that are intended, alone or in combination with one or more other products, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over currently approved therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Under the breakthrough therapy program, the sponsor of a new biologic candidate may request that the FDA designate the candidate for a specific indication as a breakthrough therapy concurrent with, or after, the submission of the IND for the biologic candidate. The FDA must determine if the biological product qualifies for breakthrough therapy designation within 60 days of receipt of the sponsor’s request. The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process, providing timely advice to the product sponsor regarding development and approval, involving more senior staff in the review process, assigning a cross-disciplinary project lead for the review team and taking other steps to design the clinical studies in an efficient manner.

Priority review may be granted for products that are intended to treat a serious or life-threatening condition and, if approved, would provide a significant improvement in safety and effectiveness compared to available therapies. The FDA will attempt to direct additional resources to the evaluation of an application designated for priority review in an effort to facilitate the review, and for original BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (as compared to ten months under standard review).

Accelerated approval may be granted for products that are intended to treat a serious or life-threatening disease or condition on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. In clinical trials, a surrogate endpoint is a measurement of laboratory or clinical signs of a disease or condition that substitutes for a direct measurement of how a patient feels, functions or survives. The accelerated approval pathway is most often used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical benefit of a product, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus, accelerated approval has been used extensively in the development and approval of products for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large studies to demonstrate a clinical or survival benefit. As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit. Products receiving accelerated approval may be subject

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to expedited withdrawal procedures if the sponsor fails to conduct the required post-marketing studies or if such studies fail to verify the predicted clinical benefit. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch of the product.

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

Pediatric Information

Under the Pediatric Research Equity Act (PREA), BLAs or supplements to BLAs must contain data to assess the safety and effectiveness of the biological product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the biological product is safe and effective. The FDA may grant full or partial waivers, or deferrals, for submission of data.

The Best Pharmaceuticals for Children Act (the BPCA) provides a six-month extension of any exclusivity—patent or non-patent—for a biologic if certain conditions are met. Conditions for exclusivity include the FDA’s determination that information relating to the use of a new biologic in the pediatric population may produce health benefits in that population, FDA making a written request for pediatric studies, and the applicant agreeing to perform, and reporting on, the requested studies within the statutory timeframe. Applications under the BPCA are treated as priority applications, with all of the benefits that designation confers.

Post-Approval Requirements

Once a BLA is approved, a product will be subject to certain post-approval requirements. For instance, the FDA closely regulates the post-approval marketing and promotion of biologics, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the Internet. Biologics may be marketed only for the approved indications and in a manner consistent with the provisions of the approved labeling. Although physicians may prescribe products for off-label uses as the FDA and other regulatory agencies do not regulate a physician’s choice of drug treatment made in the physician’s independent medical judgment, they do restrict promotional communications from companies or their sales force with respect to off-label uses of products for which marketing clearance has not been issued. Companies may only share truthful and not misleading information that is otherwise consistent with a product’s FDA approved labeling.

Adverse event reporting and submission of periodic safety summary reports is required following FDA approval of a BLA. The FDA also may require post-marketing testing, known as Phase 4 testing, REMS, and surveillance to monitor the effects of an approved product, or the FDA may place conditions on an approval that could restrict the distribution or use of the product. In addition, quality control, biological product manufacture, packaging and labeling procedures must continue to conform to cGMPs after approval. Biologic manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects a biologic product’s manufacturing facilities to assess compliance with cGMPs. Accordingly, manufacturers must continue to expend time, money and effort in the areas of production and quality-control to maintain compliance with cGMPs. Regulatory authorities may withdraw product approvals or request product recalls if a company fails to comply with required regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems are subsequently discovered.

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

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

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fines, warning or other enforcement-related letters or holds on post-approval clinical studies;

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

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

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injunctions or the imposition of civil or criminal penalties.

Biosimilars and Exclusivity

The Biologics Price Competition and Innovation Act of 2009 (the BPCIA) created an abbreviated approval pathway for biological products shown to be biosimilar to, or interchangeable with, an FDA-licensed reference biological product. Biosimilarity, which requires that the biological product be highly similar to the reference product notwithstanding minor differences in clinically inactive components and that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity and potency, can be shown through analytical studies, animal studies and a clinical trial or trials. Interchangeability requires that a biological product be biosimilar to the reference product and that the product can be expected to produce the same clinical results as the reference product in any given patient and, for products administered multiple times to an individual, that the product and the reference product may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biological product without such alternation or switch. A reference biological product is granted 12 years of exclusivity from the time of first licensure of the product and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product. “First licensure” typically means the initial date the particular product at issue was licensed in the United States. Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a biological product if the licensure is for a supplement for the biological product or for a subsequent application by the same sponsor or manufacturer of the biological product (or licensor, predecessor in interest or other related entity) for a change (not including a modification to the structure of the

biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength, or for a modification to the structure of the biological product that does not result in a change in safety, purity or potency.

Regulatory Approval in the European Union

The EMA is a decentralized scientific agency of the European Union. It coordinates the evaluation and monitoring of centrally authorized medicinal products. It is responsible for the scientific evaluation of applications for EU marketing authorizations, as well as the development of technical guidance and the provision of scientific advice to sponsors. The EMA decentralizes its scientific assessment of medicines by working through a network of about 4,500 experts throughout the European Union, nominated by the member states. The EMA draws on resources of over 40 National Competent Authorities of European Union member states.

The process regarding approval of medicinal products in the European Union follows roughly the same lines as in the United States. The new Clinical Trials Regulation that came into force on January 31, 2022 aims to simplify and streamline the approval of clinical trials in the European Union. The Clinical Trials Regulation introduces a complete overhaul of the existing legislation governing clinical trials for medicinal products in the EU. The main characteristics of the regulation include: a streamlined application procedure via a single entry point, the “EU portal”; a single set of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors; and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts. Part I is assessed by the competent authorities of all EU member states in which an application for authorization of a clinical trial has been submitted (member states concerned). Part II is assessed separately by each member state concerned. Strict deadlines have been established for the assessment of clinical trial applications. The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the concerned EU member state. However, overall related timelines will be defined by the Clinical Trials Regulation.

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Manufacturing and import into the EU of investigational medicinal products is subject to the holding of appropriate authorizations and must be carried out in accordance with cGMP.

Review and Approval

Authorization to market a product in the European Union member states proceeds under one of four procedures: a centralized authorization procedure, a mutual recognition procedure, a decentralized procedure or a national procedure. Since our products by their virtue of being antibody-based biologics fall under the centralized procedure, only this procedure will be described here.

Certain drugs, including medicinal products developed by means of biotechnological processes, must be approved via the centralized authorization procedure for marketing authorization. A successful application under the centralized authorization procedure results in a marketing authorization from the European Commission, which is automatically valid in all European Union member states. The other European Economic Area member states (namely Norway, Iceland and Liechtenstein) are also obligated to recognize the European Commission decision. The EMA and the European Commission administer the centralized authorization procedure.

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JANX · 10-K · period ended 2021-12-31

Item 1. Business.

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JANX · 10-K · period ended 2021-12-31

Item 1. Business.

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