UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________________
to __________________________
Commission file number 001-40804
PASITHEA THERAPEUTICS CORP.
(Exact name of registrant as specified in its charter)
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including
area code: (702)514-4174
Securities registered pursuant to Section 12(b)
of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, par value $0.0001 per share KTTA The Nasdaq Capital 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 Section 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 checkmark
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. ☐
If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s
executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐
No ☒
The aggregate market value of the common stock,
par value $0.0001 per share (“Common Stock”), held by non-affiliates of the registrant as of the last business day of the
registrant’s most recently completed second fiscal quarter (June 30, 2022) was $19.4 million.
The registrant had 26,126,740 shares of Common Stock outstanding as
of March 30, 2023.
DOCUMENTS INCORPORATED BY REFERENCE
None.
PASITHEA THERAPEUTICS CORP.
2022 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
Page
PART I
ITEM 1. BUSINESS 1
ITEM 1A. RISK FACTORS 27
ITEM 1B. UNRESOLVED STAFF COMMENTS 49
ITEM 2. PROPERTIES 49
ITEM 3. LEGAL PROCEEDINGS 49
ITEM 4. MINE SAFETY DISCLOSURES 49
PART II
ITEM 6. [RESERVED] 50
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 56
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 56
ITEM 9A. CONTROLS AND PROCEDURES 56
ITEM 9B. OTHER INFORMATION 57
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 57
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 58
ITEM 11. EXECUTIVE COMPENSATION 64
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES 75
PART IV
ITEM 15. EXHIBIT AND FINANCIAL STATEMENT SCHEDULES 77
SIGNATURES 79
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report contains
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended,. These statements are generally identified by the use of such words as “may,” “could,”
“should,” “would,” “believe,” “anticipate,” “forecast,” “estimate,”
“expect,” “intend,” “plan,” “continue,” “outlook,” “will,” “potential”
and similar statements of a future or forward-looking nature. These forward-looking statements speak only as of the date of filing this
annual report with the SEC and include, without limitation, statements about the following:
● our lack of operating history;
● our plans to develop and commercialize our product candidates;
● the timing of our IND submission for PAS-004;
● the timing of our planned clinical trials for PAS-004;
● the success of competing therapies that are or may become available;
● our dependence on third parties;
Because forward-looking statements are inherently subject to risks
and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these
forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may
not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. You should
refer to the “Risk Factors” section of this annual report for a discussion of important factors that may cause our actual
results to differ materially from those expressed or implied by our forward-looking statements. We operate in an evolving environment
and new risk factors and uncertainties may emerge from time to time. It is not possible for management to predict all risk factors and
uncertainties. As a result of these factors, we cannot assure you that the forward-looking statements in this annual report will prove
to be accurate. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained
herein, whether as a result of any new information, future events, changed circumstances or otherwise. You should review the factors and
risks and other information we describe in the reports we will file from time to time with the SEC.
ii
PART I
ITEM 1. BUSINESS
Overview
We are a biotechnology company
primarily focused on the discovery, research and development of innovative treatments for Central Nervous System (“CNS”) disorders
and RASopathies. We are leveraging our expertise in the fields of neuroscience, translational medicine, and drug development to advance
new molecular entities that target the pathophysiology underlying such diseases, with the goal of bringing life-changing therapies to
patients.
We have two business segments,
“Therapeutics” and “Clinics.” Our Therapeutics segment performs activities related to discovery, research and
development of innovative treatments for CNS disorders and other diseases. Our Clinics segment provided business support services to anti-depression
clinics in the U.K. and in the United States. Its operations in the U.K. involved providing business support services to registered healthcare
providers who assess patients and, if appropriate, administer intravenous infusions of ketamine. Its operations in the United States involved
providing business support services to entities that furnish similar services to patients who personally pay for those services. Operations
took place in New York, NY and Los Angeles, CA in the United States, and throughout the U.K. through partnerships with healthcare providers,
including Nadelson Medical PLLC and Zen Healthcare. We did not provide professional medical services, psychiatric assessments,
or administration of intravenous infusions of ketamine as part of our Clinics segment.
Prior to the date of this
Annual Report on Form 10-K, we have discontinued our at-home services in New York, NY as well as our services in the U.K. In addition,
we have discontinued our clinical operations in Los Angeles, CA and are actively exploring options for the disposal of related property.
Accordingly, as of the date of this Annual Report on Form 10-K, we have discontinued the operations of our Clinics segment.
Our Therapeutic Pipeline
Our therapeutic pipeline currently
consists of four programs. Our lead product candidate, PAS-004, is a next-generation macrocyclic (as defined below) mitogen-activated
protein kinase, or MEK inhibitor, that we believe may address the limitations and liabilities associated with existing drugs with a similar
mechanism of action. Our remaining three programs are in the discovery stage and are based on novel targets that we believe address limitations
in the treatment paradigm of the indications we plan to address, which are currently amyotrophic lateral sclerosis (“ALS”),
multiple sclerosis (“MS”) and schizophrenia.
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Our Lead Program: PAS-004
Our lead therapeutic product
candidate, PAS-004 (formerly known as “CIP-137401”), is a next-generation MEK 1 and 2 (“MEK 1/2”) inhibitor designed
to be macrocyclic for potential use in the treatment of a range of RASopathies, including neurofibromatosis type 1 (“NF1”)
and Noonan syndrome, as well as lamin A/C (“LMNA”) cardiomyopathy and a number of oncology indications. We acquired PAS-004
in connection with our acquisition of AlloMek Therapeutics, LLC (“AlloMek”), a privately held biotechnology company, in October
2022.
PAS-004 is a small molecule allosteric inhibitor of MEK 1/2. MEK 1/2
are two of several protein kinases involved in a signaling cascade, known as the mitogen-activated protein kinase, or MAPK pathway.
The MAPK pathway is an important pathway in cellular biology which has been a frequent target for drug discovery efforts. The MAPK pathway
has been implicated in a variety of diseases, as it functions to drive cell proliferation, differentiation, survival and a variety of
other cellular functions that, when abnormally activated, are critical for the formation and progression of tumors, fibrosis and other
diseases. MEK inhibitors block phosphorylation (activation) of extracellular signal-regulated kinases (“ERK”). Blocking the
phosphorylation of ERK can lead to cell death and inhibition of tumor growth.
PAS-004 has been tested in
a range of mouse models of various diseases and has completed preclinical testing and animal toxicology studies to support an Investigational
New Drug application (an “IND”) with the U.S. Food and Drug Administration (“FDA”). Additionally, PAS-004 has
received orphan-drug designation from the FDA for the treatment of NF1.
Existing FDA approved MEK inhibitors are marketed for a range of diseases,
including certain cancers and NF1. We believe these MEK inhibitors suffer from certain limitations, including known toxicities. Unlike
current FDA approved MEK inhibitors, PAS-004 is macrocyclic, which we believe may lead to improved pharmacokinetics, tolerability and
potency. Macrocycles are large cyclic molecules that can bring increased potency, metabolic stability, and oral bioavailability. Cyclization
also offers rigidity for stronger binding with drug target receptors. PAS-004 was designed to provide a longer half-life with what we
believe is a better therapeutic window. Further, we believe the potency and safety profile that PAS-004 has demonstrated in preclinical
studies may also lead to stronger and more durable response rates and efficacy, as well as better dosing schedules, which may not require
the fasting or dietary restrictions of approved MEK inhibitors. However, the ultimate efficacy of PAS-004 cannot be known at this time
and until all required clinical testing has been completed.
We plan to submit an IND to the FDA for PAS-004 in the third quarter
of 2023, following completion of the ongoing good manufacturing practice (“GMP”) manufacturing of PAS-004 and finalization
of our toxicology program. We plan to initially focus our clinical efforts on NF1, potentially followed by Noonan syndrome or other RASopathies,
rare diseases with significant unmet clinical needs. Assuming our IND for PAS-004 is accepted by the FDA, we anticipate initiating our
first-in-human Phase 1 clinical trial in healthy volunteers as early as possible after our IND is accepted.
Our Discovery Programs
In addition to PAS-004, we
are developing our pipeline of discovery programs focused on novel targets for the treatment of CNS disorders that have clear unmet medical
needs. Each of our discovery programs is summarized below.
PAS-003
Our
PAS-003 program aims to develop a proprietary humanized monoclonal antibody (“mAb”) with a mechanism-of-action targeting a5b1
integrin for the treatment of ALS and other neuroinflammatory disorders, such as MS and possibly stroke. We believe targeting a5b1
integrin may have a beneficial impact on disease due to modulation of multiple cell types and mechanisms involved in neuroinflammation,
which occurs in ALS. We acquired PAS-003 in connection with our acquisition of Alpha-5 integrin, LLC, a privately held biotechnology company,
in June 2022.
PAS-002
Our PAS-002 discovery program aims to develop a proprietary engineered
deoxyribonucleic acid (“DNA”) plasmid tolerizing vaccine targeting GlialCAM (a glial cell adhesion molecule implicated in
neurological disease), for the treatment of MS. A published study in Nature in 2022 has shown that GlialCAM, a CNS protein
found in the brain’s white matter, is attacked in MS. A component of GlialCAM mimics a component of Epstein-Barr virus (“EBV”)
nuclear antigen 1 (“EBNA-1”), which has been shown to likely play a critical role in triggering MS.
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PAS-001
Our PAS-001 discovery program
aims to develop a brain penetrant small molecule targeting the complement component 4A (“C4A”) for the treatment of schizophrenia.
Recent findings implicate C4A in synaptic loss (fewer connections between nerve cells), which has been shown to occur in schizophrenia.
In humans, greater expression of C4A in the brain is associated with an increased risk of schizophrenia.
Our Strategy
Our mission is to develop
innovative therapies to address areas of high unmet medical need, initially in CNS disorders and RASopathies. To achieve our mission,
we are executing a near-term strategy with the following key elements:
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Overview of Our Lead Program: PAS-004
MAPK Pathway Overview
Signaling pathways describe
a series of biological mechanisms in which a group of molecules work together to control a cell function. A cell receives signals from
its environment when a molecule binds to a specific receptor on or in the cell. This process may be repeated multiple times through the
entire signaling pathway until the last receptor is activated and the cell function is carried out. Abnormal activation of signaling pathways
may lead to diseases.
The MAPK pathway,
which relies upon the Ras/Raf/MEK/ERK signaling cascade, represents a central biological pathway in all human cells that is
responsible for regulating cellular transcription, proliferation and survival. The general structure of the pathway consists of Ras,
a small GTPase, and three downstream protein kinases, Raf, MEK and ERK. ERK 1 and 2 (“ERK 1/2”) are structurally similar
protein-serine/threonine kinases that regulate a variety of cellular processes including adhesion, migration, survival,
differentiation, metabolism, proliferation, transcription, cytoskeletal remodeling and cell cycle progression. MEK 1/2 catalyzes the
phosphorylation of ERK 1/2, which is required for enzyme activation. Phosphorylated ERK 1/2 moves to the nucleus, and in turn
activates many transcription factors, regulates gene expression, and controls various physiological processes, finally inducing cell
repair or cell death.
In addition, at the level
of Ras, the pathway is negatively regulated by several proteins, including neurofibromin, the protein encoded by the NF1 gene.
Given its direct regulation of ERK, which directly controls downstream signaling through the MAPK pathway, MEK occupies a pivotal
position in this signaling cascade and represents a rational small-molecule therapeutic target for multiple diseases, including RASopathies
(such as NF1), CNS indications (such as ALS), cardiomyopathies (such as LMNA cardiomyopathy) and oncology indications, where overactivation
of the MAPK pathway contributes to disease onset and/or progression.
Background of MEK Inhibitors
MAPK represents one of the most highly targeted signaling pathways
in drug development. Several allosteric inhibitors of MEK 1/2 are currently in clinical development. Four of them are approved by the
FDA for various oncological indications, with only one approved for NF1. These MEK inhibitors are selective towards MEK 1/2, as they bind
to non-ATP-competitive allosteric sites. We believe a limitation of current FDA approved MEK inhibitors are their high rates of serious
drug-related adverse events, reported to occur in many treated patients, which may result in drug intolerability. These MEK inhibitors
often require increased dosing frequency, which contributes to high rates of adverse events, because the drugs systemically circulate
for an extended period of time destroying healthy normal cells, which also rely on the pathway for survival.
Our rationale in developing
PAS-004 is to address these shortcomings to potentially provide patients with better outcomes and improved safety.
RASopathies Overview
RASopathies are a clinically
defined group of genetic syndromes caused by germline mutations in genes that encode components or regulators of the MAPK pathway. These
disorders include neurofibromatosis type 1, Noonan syndrome, capillary malformation–arteriovenous malformation syndrome, Costello
syndrome, cardio-facio-cutaneous syndrome, and Legius syndrome. Because of the common underlying MAPK pathway dysregulation amongst all
of these syndromes, RASopathies exhibit numerous overlapping phenotypic features, including CNS abnormalities. The MAPK pathway plays
an essential role in regulating various cell cycle functions, which are critical to normal human development. MAPK pathway dysregulation
has profound deleterious effects on both embryonic and later stages of development, which may cause many of the RASopathies. Therefore,
we believe there is a strong scientific rationale for targeting the MAPK pathway with small-molecule therapeutics to treat various RASopathies.
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Neurofibramtosis-1 (NF-1) Overview
The initial indication we
plan to pursue for PAS-004 is the treatment of NF1. NF1 is a RASopathy and part of a group of conditions known as neurocutaneous disorders,
conditions that affect the skin and the CNS. NF1 is one of the most common inherited neurological disorders, affecting both children and
adults. NF1 affects approximately one in 3,000 newborns throughout the world, with approximately 100,000 patients living in U.S. with
NF1. NF1 arises from mutations in the NF1 gene, which encodes for neurofibromin, a key negative regulator of the MAPK pathway.
NF1 is characterized by multiple
café au lait (light brown) skin spots and neurofibromas (small benign growths) on or under the skin, and/or freckling in the armpits
or groin. Individuals with NF1 may have other manifestations of the disorder, including cardiac malformations, cardiovascular disease,
vasculopathy, hypertension, vitamin D deficiency, brain malformations, and seizures. About 50% of people with NF1 also have learning disabilities.
Softening and curving of bones, and curvature of the spine (scoliosis) may occur in some patients with NF1. Occasionally, tumors
may develop in the brain, on cranial nerves, or on the spinal cord. NF1 is usually diagnosed during childhood. Throughout their lifetime,
about 30% to 50% of NF1 patients progress to develop plexiform neurofibromas (“PN”), which are tumors that grow in an infiltrative
pattern along the peripheral nerve sheath and can cause severe disfigurement, pain and functional impairment. In some cases NF1-PN may
be fatal. NF1-PN are most often diagnosed within the first twenty years of life. These tumors are characterized by aggressive growth,
which is typically more rapid during childhood. While NF1-PN are initially benign, these tumors can undergo malignant transformation,
leading to malignant peripheral nerve sheath tumors (“MPNST”). NF1 patients have an 8% to 15% lifetime risk of developing
MPNST, a diagnosis that carries a 12-month survival rate of under 50%. In addition to MPNST, NF1 patients are at an increased risk of
developing other malignancies, including breast cancer and gliomas.
Most patients with NF1-PN
are treated with surgical removal of the tumors. However, because NF1-PN arise from nerve cells and grow in an infiltrative pattern, it
is challenging to successfully resect tumors without severe comorbidities, such as permanent nerve damage and disfigurement. Patients
that are ineligible for surgery or those who have had a recurrence post-surgery are often treated with a variety of off-label therapies.
Among these off-label therapies are various systemic treatments, such as chemotherapy and immunotherapy, which have not been shown to
consistently confer a clinical benefit. Given that NF1-PN is driven by dysregulation in the MAPK pathway, MEK inhibitors have emerged
as a class of therapies that may hold significant promise for the treatment of NF1.
Limitations of Current Standard of Care
Koselugo (selumetinib), a MEK inhibitor, was approved by the FDA in
2020 for NF1 pediatric patients two years of age and older who have symptomatic, inoperable plexiform neurofibromas. Koselugo is the only
FDA approved drug for the treatment of NF1. Koselugo is also being evaluated in an ongoing Phase 3 clinical trial for the treatment of
adult patients with NF1 who have symptomatic, inoperable PN. In addition to Koselugo, we are aware of several other MEK inhibitors
in clinical trials for this indication, as well as the off-label use of other drugs, such as bevacizumab, for the treatment of NF1.
We believe that Koselugo and
other earlier generation MEK inhibitors approved for indications other than NFI suffer from limitations, such as an onerous dosing schedule,
which requires dosing twice a day on an empty stomach, at least one hour before or two hours after a meal. We believe that this creates
a significant market opportunity for a next-generation MEK inhibitor that addresses these shortcomings, has a pharmacokinetic and tolerability
profile suitable for long-term dosing and that can arrest or reverse tumor growth.
Noonan Syndrome Overview
The second indication for which we may pursue for PAS-004 is for the
treatment of Noonan Syndrome. Noonan Syndrome is a genetic disorder that may be caused by variants in one of several MAPK pathway
genes. It affects approximately one in 1,000 to 2,500 newborns. Noonan Syndrome is characterized by distinctive craniofacial features,
including a broad forehead, hypertelorism, down-slanting palpebral fissures, and low-set, posteriorly rotated ears. Other features include
congenital cardiac defects, reduced growth, bleeding disorders, and a variable degree of neurocognitive delay. Several genes have been
shown to be associated with Noonan Syndrome and all these genes encode various components of or proteins associated with the MAPK pathway.
Patients with Noonan Syndrome have an increased risk of developing cardiomyopathies as well as several cancers that affect the blood (leukemia),
nervous system (neuroblastoma), brain (glioma), muscle (rhabdomyosarcoma), and bones. Patients with Noonan syndrome diagnosed in early
childhood with severe hypertrophic cardiomyopathy have an increased mortality risk. Case reports of off label use of MEK inhibitors have
shown the potential for prompt clinical improvement and subsequent amelioration of hypertrophic cardiomyopathy as assessed by ultrasound.
5
Limitations of Current
Standard of Care
Noonan Syndrome can be diagnosed
based on a patient’s medical history and diagnostic tests. There is no approved single treatment for Noonan Syndrome, however management
of Noonan syndrome is targeted toward symptomatic improvement and supportive care depending on type and severity. Treatments typically
begin around four or five years of age and continue until the child stops growing. There has been evidence of off label use of MEK inhibitors
to delay time to a heart transplant in infants diagnosed with Noonan Syndrome.
Preclinical Profile and Mechanism of Action
of PAS-004
PAS-004 is a next-generation
MEK inhibitor that was rationally designed to have a macrocyclic structure by taking into consideration the metabolic liabilities of earlier
generation MEK inhibitors. The structure of PAS-004 is distinct from other earlier generation MEK inhibitors as
it maintains critical protein/ligand contacts through sulfonamide and iodophenyl but does not possess a primary alcohol or hydroxamate
functionality, a known metabolic liability in earlier generation MEK inhibitors. It is generally observed that macrocyclic scaffolds improve
drug-like properties including target binding, selectivity, and oral bioavailability.
PAS-004 has displayed promising pharmacokinetic properties in IND-enabling
toxicology studies of both rats and dogs. In these toxicology studies, PAS-004 has demonstrated a half-life of 11.5 hours in rats and
52 hours in dogs. We believe PAS-004’s half-life allows durable suppression of ERK phosphorylation, critical for clinical responses.
Further, in these toxicology studies PAS-004 displayed a low peak/trough ratio, which might minimize potential related toxicities.
Preclinical Studies Overview
In vitro Preclinical Studies of PAS-004
In an unpublished preclinical
study, the effects of PAS-004 were assessed in the in vivo Colo-205 xenograft tumor model, a common mouse model used for preclinical
therapies. Results showed that PAS-004 dosed at 5mg/kg once daily reduced tumor volume. The magnitude of tumor volume reduction was similar
to selumetinib dosed at 25mg/kg, twice daily, as published in Molecular Cancer Therapeutics in 2007.
In an unpublished preclinical
study, the effects of PAS-004 were compared to selumetinib in human wild type and NF1 deficient Schwann cells, the tumorigenic cell of
origin for NF1 plexiform neurofibromas. Preliminary results showed that PAS-004 had minimal activity against wild type cells, however,
dose-dependent inhibitory activity against proliferation in NF1 deficient cells was observed.
Additionally, PAS-004 was
compared to selumetinib in an in vitro potency assay. Western blots from this unpublished preclinical study showed that cells treated
with PAS-004 demonstrated greater reduction in ERK 1/2 phosphorylation as compared to cells treated with selumetinib.
We believe these in vitro
preclinical results support PAS-004’s favorable pharmacokinetic profile, potency and dose-dependent inhibitory activity against
cellular proliferation in NF1 deficient Schwann cells and appears similar to selumetinib, an FDA approved MEK inhibitor.
In vivo Preclinical Studies
In an unpublished preclinical
pilot study, PAS-004 was tested for tolerability and preliminary biological efficacy in a genetically engineered mouse model of NF1 plexiform neurofibromas.
These mice were engineered to develop plexiform neurofibromas that closely phenocopy the human tumors by four months of age with
100% penetrance. In this pilot study, selumetinib was administered in a parallel group, which served as a positive control. Both PAS-004
and selumetinib were administered as single-agents to six mice per group. PAS-004 was administered at 10mg/kg once daily and selumetinib
was administered at the established maximum tolerated dose of 10mg/kg, twice daily. Treatment began when the mice reached four months
of age and was continued for 12 weeks or until death. Mice were monitored for signs of toxicity, as well as survival. Results demonstrated
that both PAS-004 and selumetinib showed similar toxicity profiles and both PAS-004 (p=0.0123) and selumetinib (p=0.0048) significantly
reduced the tumor size compared to vehicle-treated mice based on statistical analysis using uncorrected Fisher’s least significant
difference.
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We believe the results from
this preclinical pilot study show that PAS-004 may be effective in reducing tumor burden of NF1-associated plexiform neurofibromas.
When administered at 10mg/kg once daily, PAS-004 and selumetinib, which was dosed at 10mg/kg twice daily, demonstrated similar results.
We believe that the longer half-life of PAS-004, as compared to selumetinib, could potentially enhance treatment with superior efficacy
by allowing better sustained MEK/ERK signaling inhibition, or allowing for greater intervals between dosing such as single daily dose
as compared to the required twice daily dosing for selumetinib.
Mutations in the LMNA gene,
which encodes nuclear lamins A and C, cause diseases affecting various organs, including the heart. Studies have found that the ERK 1/2
kinase branches of the MAPK signaling pathway were abnormally hyperactivated prior to the onset of significant cardiac impairment.
PAS-004 was studied in the
LMNA-cardiomyopathy LmnaH222P/H222P mouse model, a validated model of cardiomyopathy caused by LMNA mutations in humans. In
this study, male mice were orally administered placebo, or PAS-004 at 3 mg/kg/day or PAS-004 at 6 mg/kg/day starting at 14 weeks of age
when symptoms of cardiomyopathy were present. Results of this preclinical study were published in Bioorganic & Medicinal Chemistry
in 2017 and are summarized as follows:
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Toxicology Studies
28-day toxicological studies
were performed in both rats and dogs under good laboratory practices (“GLP”) on PAS-004 by Wuxi AppTec (Suzhou) Co., Ltd.
We believe the results from these studies have demonstrated a sufficient safety and toxicology profile of PAS-004 to support our IND filing
with the FDA. We are conducting an additional 28-day toxicological study in male rats to further support our IND filing with the FDA.
Overview of Our Discovery Programs
PAS-003 Program
Amyotrophic Lateral Sclerosis Overview
ALS, or Lou Gehrig’s
disease, is a fatal, progressive motor neuron disease that targets nerve cells in the spinal cord and brain. ALS most commonly affects
people between the ages of 40 and 70, with an average age of 55 at the time of diagnosis. It affects as many as 30,000 patients in the
United States, with 5,000 new cases diagnosed each year.
While approximately 10% of
cases are hereditary, which is known as familial ALS, the large majority of cases (90-95%) are not, which is known as sporadic ALS. A
large majority of familial ALS cases are due to genetic mutations in the superoxide dismutase 1 (“SOD1”) gene. While the pathogenesis
of ALS is not fully understood, studies have shown that the disease is multifactorial, with several interlinked mechanisms contributing
to neurodegeneration, including neuroinflammation, which has been shown to play an important role in neurodegeneration.
ALS often begins with muscle
twitching and/or weakness in a limb, however, as the disease progresses, ALS affects control of the muscles needed to move, speak, eat
and breathe. As a result, ALS patients develop extensive muscle wasting and atrophy leading to paralysis. The life expectancy is
low, with patients living on average three to five years after symptom onset, and the patient ́s quality of life is typically poor.
There are currently six FDA
approved medications to treat ALS and its symptoms. However, they have been shown to only modestly slow disease progression. Therefore,
despite these therapies, the medical need for new treatments for ALS patients is very high.
Scientific Background and Rationale for Targeting
a5b1 integrin for the treatment of ALS
Integrins are the principal
receptors used by animal cells to bind to the extracellular matrix as well as other cells. Integrins activate intracellular signaling
pathways and can cooperate with other conventional signaling receptors. Integrins are involved in a wide range of biological processes
including cell growth, migration, survival, and proliferation as well as cytokine activation and release. As a result, integrins play
a significant role in many physiological processes, including embryogenesis, organogenesis, and tissue development, but also in pathogenic
ones, including inflammation, infection, and allergic and neoplastic diseases.
Integrins are composed by
two non-covalently linked alpha and beta subunits. a5b1
integrin, also known as the fibronectin receptor, is a heterodimer consisting of a5 and b1
subunits. Integrins can be broadly grouped based on ligand specificity. In this classification, integrin a5b1
falls under RGD-recognizing integrins and is known to bind fibronectin, osteopontin, fibrillin, thrombospondin, among others. a5b1
integrin has been shown to play a role in cancer, angiogenesis and in a variety of neurological disorders. a5b1
integrin is a validated drug target supported by the clinical development of anti-a5b1
mAbs by several pharmaceutical companies, including PDL Biopharma, Inc. jointly with Biogen Inc., and Pfizer, Inc., for the treatment
of cancer indications.
8
In
a 2018 Nature Neuroscience publication, scientists at the Steinman Laboratory at Stanford University, headed by our Chairman, Prof. Lawrence
Steinman, used mass cytometry to identify an upregulation of CD49e (a5
integrin) on brain myeloid cells in the mutant SOD1-G93A mouse model of ALS and demonstrated that a5b1
integrin is upregulated on microglia in the CNS as the disease progresses. Additional preclinical studies have shown that a5
integrin is also elevated on macrophages in the periphery and suggest a role for mast cells which also express high level of a5
integrin.
In
collaboration with the Mayo Clinic, we have shown a5b1
integrin positive endothelial cells are concentrated in post-mortem human brain motor neuron tracts but not in sensory regions
in ALS and that a5b1
expression increases with disease progression in both mouse models of ALS and human ALS patients. Previous studies have shown that high
levels of a5b1
integrin on the endothelium plays a role in angiogenesis while our results suggest a role in the blood brain barrier which regulates immune
cell trafficking.
Together these findings indicate that
a5b1
expression increases with disease progression in mouse models of ALS and in human ALS patients and highlight the role of a5
b1 integrin on four different
cell types involved in neuroinflammation in ALS: microglia, macrophages, mast cells and endothelial cells. We believe these findings suggest
that targeting a5b1
integrin may provide a treatment for ALS. In this regard, initial results from the Steinman Laboratory and our own preclinical studies
have demonstrated that anti-a5b1
treatment improved motor function and increased survival in SOD transgenic mice, the most phenotypically relevant preclinical model for
ALS.
We
believe these preclinical results demonstrate that targeting a5b1
integrin has the potential to be a powerful new therapy that could improve ALS outcomes. Our goal is to select a lead product candidate
for our PAS-003 discovery program in the second half of 2023 and seek partnerships and/or collaborators to continue development of the
program.
PAS-002
Multiple Sclerosis Overview
MS is an auto-immune chronic
inflammatory demyelinating disease affecting the CNS. According to the National MS Society, there are more than 2.8 million people worldwide
with a diagnosis of MS. In the United States a recently completed prevalence study, funded by the National MS Society, estimated that
nearly one million people over the age of 18 live with a diagnosis of MS.
Most people with MS have
a relapsing-remitting disease course. They experience periods of new symptoms or relapses that develop over days or weeks and usually
improve partially or completely. These relapses are followed by quiet periods of disease remission that can last months or even years.
Approximately two-thirds of those with relapsing-remitting MS can eventually develop a steady progression of symptoms, with
or without periods of remission, within 10 to 20 years from disease onset. This is known as secondary-progressive MS. Approximately
10% of people with MS experience a gradual onset and steady progression of signs and symptoms without any relapses, known as
primary-progressive MS.
The exact cause of MS is unknown,
but changes in the peripheral immune system and intrinsic CNS immune cells (such as microglia) contribute to MS pathogenesis. Acute and
chronic inflammation as well as neurodegeneration occur throughout the disease course, with prominence of acute inflammation in the relapsing
phase of disease. Both innate and adaptive immune responses play a role in MS. The adaptive immune response includes CD8+ cytotoxic
T cells as well as CD4+ T cells, in particular Th1 cells, against myelin proteins. Furthermore, B cells also play a role by mean of antigen
presentation to T cells, antibody formation and production of proinflammatory cytokines. MS lesions (focal areas of myelin damage) ultimately
causes the symptoms of MS.
Recent studies have proved that Epstein-Barr virus (“EBV”),
triggers MS by priming the immune system to attack the body’s own nervous system. A 2022 study published in Science
analyzed EBV antibodies in serum from 801 individuals who developed MS among a cohort of more than10 million people active in the U.S.
military over a 20-year period. This study showed that EBV infection was present in all but one case at the time of MS onset, and found
that of 35 people who were initially EBV-negative, all but one became infected with EBV before the onset of MS. This finding provides
compelling data implicating EBV as the trigger for the development of MS.
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Scientific Background and Rationale for Targeting GLIALCAM for the
treatment of MS
GlialCAM found in the brain’s
white matter is attacked in MS. GlialCAM is a CNS protein that has a component that mimics a component of EBNA-1, which plays a critical
role in triggering MS. This study elucidated the molecular mimicry between EBNA-1 and GlialCAM, and GlialCAM’s role in the pathogenesis
of MS. It also demonstrated that targeting the adaptive immune response to EBNA-1 and GlialCAM with approaches aimed at tolerization of
the autoimmune response and eradication of the EBV infection in the B lymphocyte lineage. These findings demonstrate a mechanistic link
between EBV infection and the pathobiology of MS and create new pathways for the clinical treatment of multiple sclerosis.
In an initial preclinical
proof-of-concept study in a mouse model of relapsing-remitting experimental autoimmune encephalomyelitis (“EAE”), the standard
animal model of MS, we showed that an engineered DNA tolerizing vaccine targeting GlialCAM reduced disease severity and incidence of relapse
when administered prophylactically in the EAE model. Based on these results, we are continuing to study engineered DNA plasmids in additional
proof-of-concept studies and plan to publish results when complete.
In addition, we are investigating
different lipid nanoparticle delivery systems for delivery of the DNA plasmid.
We believe these early results
in EAE models demonstrate that developing a DNA plasmid tolerizing vaccine targeting GlialCAM has the potential to reduce disease severity
and incidence in relapsing-remitting MS and possibly result in a long-term cure. Our goal is to develop the PAS-002 to lead candidate
selection and seek partnerships and/or collaborators to continue development of the program.
PAS-001
Schizophrenia Overview
Schizophrenia is a chronic
and disabling psychiatric illness characterized by positive psychotic symptoms, such as delusions and hallucinations, negative symptoms,
such as social withdrawal and amotivation, and impairment in cognitive domains, including attention, working memory, verbal learning and
executive function. According to the World Health Organization (“WHO”) schizophrenia affects approximately 24 million people,
or one in 300 people worldwide. Schizophrenia has a low lifetime prevalence of about 1%, however the burden of the disease is substantial.
Schizophrenia is a leading cause of adult disease burden and has been ranked 12th in the top global causes of disability for the last
decade, leading to substantial healthcare and societal costs, with annual associated costs in the U.S. estimated to be more than $150
billion.
Current pharmacological treatments
for schizophrenia all act on dopamine D2 receptors. Although they are effective in reducing positive symptoms, they have little effect
on both cognitive and negative symptoms. Furthermore, up to 30% of patients show only partial benefit with antipsychotics and have treatment
resistant schizophrenia. This highlights the need for new therapeutic strategies.
Despite extensive research
the molecular etiology remains unknown. The current dopamine hypothesis postulates that excessive striatal dopamine transmission and reduced
frontal dopamine stimulation underlie the pathophysiology of positive and negative symptoms, respectively. However, converging lines of
genetic, epidemiological and clinical evidence indicate that inflammatory pathways are also altered in schizophrenia. More recently, a
leading hypothesis proposes that synaptic terminal loss is central to the pathophysiology of schizophrenia, leading to impaired cortical
function, and symptoms, including cognitive impairments.
Scientific Background and Rationale for Targeting
C4A for the treatment of Schizophrenia
The complement system is a
group of proteins found in blood plasma and on some cell surfaces. These proteins play an important role in protecting against infection
and removing dead cells and foreign material. In the brain, the complement system plays a crucial role in immune response and in synaptic
elimination during normal development and disease. There are nine major complement proteins, labeled C1 through C9. Complement protein
C4 is the only complement protein that has two different isotypes encoded by two different genes: C4A and C4B.
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Microglia are phagocytes residing
in the CNS. Unlike other phagocytes, which primarily function in immunity, microglia are heavily involved in shaping and supporting brain
tissue. Microglia use immune molecules, such as complement proteins, to send signals to neurons and glia, and to survey their microenvironment
using dynamic processes. Microglia are key modulators of neuronal development. However, the full role they play in healthy brain
development and disease remain elusive.
In studies, C4A has been shown
to mark synapses for phagocytosis by microglia. Further, the C4 gene has been linked to synaptic refinement and psychiatric disorders,
including schizophrenia. In humans, greater expression of C4A in the brain is associated with an increased risk of schizophrenia.
The largest genome-wide association
study (GWAS) in schizophrenia in 2014 identified 128 independent associations spanning 108 conservatively defined loci that meet genome-wide
significance, including the major histocompatibility complex (MHC) locus on chromosome 6, which includes the C4 gene, thus furthering
the hypothesis of C4 as an important genetic risk factor in schizophrenia. These results established a link between complement-mediated
synaptic pruning and dendritic spine loss in the cortex of schizophrenic patients.
Animal models of increased
C4 expression show reduced levels of synaptic proteins and increased phagocytosis of synaptic terminals by microglia. Moreover, preclinical
models show C4 overexpression leads to reduced neurotransmission in prefrontal cortical neurons, reduced social interaction and impaired
memory, which mimic similar abnormalities seen in schizophrenia patients. Finally, excessive microglial synapse elimination has been observed
in schizophrenia-derived in vitro models. Post-mortem brain analyses showed that C4 is expressed at significantly higher levels in people
with schizophrenia than controls. C4 levels in cerebro-spinal fluid (“CSF”) have shown to be elevated in patients with schizophrenia
relative to matched controls and correlates with CSF measurements of synapse density. C4 levels have also been found to be elevated in
plasma in schizophrenia, and higher levels predict poorer outcomes in first episode patients.
Several other studies in scientific
journals, including a 1997 study from Psychiatry Research, a 2016 study from Nature and a 2012 study from Revista Brasileira
de Psiquiatria, have also reported increased complement gene expression, protein concentration, and overall activity in the serum or plasma
of schizophrenia cases compared to controls. Further, a 2020 study published in Brain, Behavior and Immunity, found that C4 was
overexpressed in the dorsolateral prefrontal cortex, parietal cortex, superior temporal gyrus and associative striatum of patients with
schizophrenia and that C4 expression was not altered in the peripheral tissues of schizophrenia patients. Further, the study found lifelong
C4 overexpression in the brain of schizophrenia patients. Taken together, this evidence has led to the hypothesis that schizophrenia is
a neuroimmune disorder mediated by alterations in pro- and anti-inflammatory processes in the CNS.
We are currently developing
a brain-penetrant small molecule able to down regulate C4A, a novel neuroinflammatory pathway, for the systemic treatment of schizophrenia.
The initial development work and screening is currently being conducted by Evotec, utilizing Evotec’s integrated research and development
expertise and state-of-the-art structure-based drug design techniques. Our goal is to continue screening and early development of PAS-001
and seek partnerships and/or collaborators to continue further preclinical development of the program.
Recent Acquisitions
Alpha-5 Integrin Therapeutics, LLC
On June 21, 2022, we entered
into a Membership Interest Purchase Agreement (the “Alpha-5 Agreement”) with PD Joint Holdings, LLC Series 2016-A and Prof.
Lawrence Steinman (the “Alpha-5 Sellers”), pursuant to which we purchased from the Alpha-5 Sellers all of the issued and outstanding
equity of Alpha-5 integrin, LLC, a Delaware limited liability (“Alpha-5”). The Alpha-5 Sellers were the sole title and beneficial
owners of 100% of the equity interests of Alpha-5. In consideration of the equity of Alpha-5, the Alpha-5 Sellers received (i) an aggregate
of 3,260,870 shares (the “Alpha-5 Shares”) of our Common Stock, (ii) warrants to purchase 1,000,000 shares of our Common Stock
at an exercise price of $1.88 per share (the “Alpha-5 Warrants”), and (iii) contingent earn-out payments of an aggregate of
2% to 4% of net sales generated from the sale of a drug currently in development by Alpha-5.
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Prof. Lawrence Steinman, one
of the Alpha-5 Sellers, is our Executive Chairman and Co-Founder of the Company, and as such is considered a related party. The terms
of the Alpha-5 Agreement were approved by (i) the disinterested members of the audit committee (“Audit Committee”) of our
board of directors (the “Board”) and (ii) the disinterested members the Board, under the Company’s related party transaction
policy.
In connection with the Alpha-5
Agreement, each of the employees of Alpha-5 entered into employment agreements with the Company.
AlloMek Therapeutics, LLC
On
October 11, 2022, we entered into a Membership Interest Purchase Agreement, dated October 11, 2022 (the “AlloMek Agreement”),
by and among the Company, AlloMek Therapeutics, LLC, a Delaware limited liability company (the “AlloMek”), the persons listed
on Schedule 1.1 thereto (each individually a “AlloMek Seller” and collectively, “Sellers”), and Uday Khire, not
individually but in his capacity as the representative of Sellers (the “AlloMek Representative”), pursuant to which we purchased
all of the issued and outstanding equity of AlloMek. The AlloMek Sellers were the sole title and beneficial owners of 100% of the equity
interests of AlloMek. In consideration of the sale of the equity of AlloMek, the AlloMek Sellers received (i) an aggregate of 2,700,000
shares of our Common Stock, (ii) warrants to purchase an aggregate of 1,000,000 shares of our Common Stock (the “AlloMek Warrants”)
at an exercise price of $1.88 per share, which may be exercised on a cashless basis, for a period of five years commencing on the date
of issuance, (iii) a cash payment in the amount of $1.05 million, (iv) the right to certain milestone payments in an amount up to $5.0
million, and (v) the right to contingent earn-out payments ranging from 3% to 5% of net sales of the Drug (as defined in the AlloMek Agreement)
depending on the amount of such net sales in the applicable measurement period.
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Competition
The biotechnology and pharmaceutical
industries are characterized by rapidly evolving technologies, intense competition, and an emphasis on proprietary product candidates.
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 major pharmaceutical, specialty pharmaceutical, and biotechnology companies,
academic institutions, governmental agencies and public and private research institutions. Any product candidates that we successfully
develop and commercialize will compete with existing therapies and new therapies that may become available in the future.
Many of our competitors may
have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting
clinical trials, obtaining regulatory approvals, and marketing approved products than we do. Mergers and acquisitions in the pharmaceutical
and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors. These competitors
also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and
patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller
or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and
established companies. Moreover, potential competitors have or may have patents or other rights
that conflict with patents covering our technologies.
The key competitive factors
affecting the success of all our product candidates, if approved, are likely to be their efficacy, safety, side effects, convenience,
price, the level of generic competition, and the availability of reimbursement from government and other third-party payors.
Our commercial opportunity
could be reduced or eliminated 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 product candidates that we may develop. Our competitors also
may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in
our competitors establishing a strong market position before we are able to enter the market. In addition, our ability to compete may
be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic products.
PAS-004
Companies
with FDA approved MEK inhibitors include: GSK plc, which received FDA approval for Mekinist (trametinib), which was subsequently