ITEM 1A. RISK FACTORS 17
ITEM 1B. UNRESOLVED STAFF COMMENTS 55
ITEM 2. PROPERTIES 55
ITEM 3. LEGAL PROCEEDINGS 55
ITEM 4. MINE SAFETY DISCLOSURES 55
PART II
ITEM 6. RESERVED 57
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 75
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 75
ITEM 9A. CONTROLS AND PROCEDURES 75
ITEM 9B. OTHER INFORMATION 76
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 76
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 77
ITEM 11. EXECUTIVE COMPENSATION 83
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 96
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 98
INDEX TO EXHIBITS 98
CONSOLIDATED FINANCIAL STATEMENTS F-1
Introductory
Comment
Throughout
this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “our company,” “Lixte,”
the “Company” and the “Registrant” refer to Lixte Biotechnology Holdings, Inc., a Delaware corporation, and Lixte
Biotechnology, Inc., a Delaware corporation, our wholly-owned subsidiary.
FORWARD-LOOKING
STATEMENTS
This
Annual Report on Form 10-K (the “Report”) contains certain forward-looking statements. For example, statements regarding
our financial position, business strategy and other plans and objectives for future operations, and assumptions and predictions about
future product demand, supply, manufacturing, costs, marketing and pricing factors are all forward-looking statements. These statements
are generally accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,”
“potential(ly),” “continue,” “forecast,” “predict,” “plan,” “may,”
“will,” “could,” “would,” “should,” “expect” or the negative of such terms
or other comparable terminology. We believe that the assumptions and expectations reflected in such forward-looking statements are reasonable,
based on information available to us on the date hereof, but we cannot assure you that these assumptions and expectations will prove
to have been correct or that we will take any action that we may presently be planning. However, these forward-looking statements are
inherently subject to known and unknown risks and uncertainties. Actual results or experience may differ materially from those expected
or anticipated in the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited
to, regulatory policies, competition from other similar businesses, and market and general policies, competition from other similar businesses,
and market and general economic factors. This discussion should be read in conjunction with the consolidated financial statements and
notes thereto included in this Report.
If
one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results
may vary materially from what we project. Any forward-looking statement you read in this Report reflects our current views with respect
to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations,
growth strategy, and liquidity. All subsequent forward-looking statements attributable to us or individuals acting on our behalf are
expressly qualified in their entirety by this paragraph. You should specifically consider the factors identified in this Report, which
would cause actual results to differ before making an investment decision. We are under no duty to update any of these forward-looking
statements after the date of this Report or to conform these statements to actual results.
PART
I
ITEM
1. BUSINESS
Company
Overview
The
Company is a drug discovery company that uses biomarker technology to identify enzyme targets associated with serious common diseases
and then designs novel compounds to attack those targets. The Company’s corporate office is located in Pasadena, California.
The
Company’s product pipeline is primarily focused on inhibitors of protein phosphatases, used alone and in combination with cytotoxic
agents and/or x-ray and immune checkpoint blockers. The Company believes that inhibitors of protein phosphatases have broad therapeutic
potential not only for cancer but also for other debilitating and life-threatening diseases. The Company is directing its efforts on
clinical development of a specific protein phosphatase inhibitor, referred to as LB-100, which has been shown to have clinical anti-cancer
activity at doses that produce little or no toxicity.
The
Company’s activities are subject to significant risks and uncertainties, including the need for additional capital. The Company
has not yet commenced any revenue-generating operations, does not have positive cash flows from operations, relies on stock-based compensation
for a substantial portion of employee and consultant compensation, and is dependent on periodic infusions of equity capital to fund its
operating requirements.
Description
of Business; Research; Clinical Trial Activities
Our
primary focus is developing new treatments for human cancers for which better therapies are urgently needed.
Our
drug discovery process is based on discerning clues to potential new targets for disease treatments reported in the increasingly large
body of literature identifying the molecular variants which characterize human cancers and other non-cancer disorders. We design drugs
for which there are existing data suggesting that they may affect the altered pathways of the cancer cell and may be given safely to
humans. We seek to rapidly arrive at patentable structures through analysis of the literature rather than screening of thousands of structures
for activity against a particular biochemical pathway.
This
approach has led to the development of two classes of drugs for the treatment of cancer, consisting of protein phosphatase inhibitors
(PTase-i), designated by us as the LB-100 series of compounds, and histone deacetylase inhibitors (HDACi), designated by us as the LB-200
series of compounds. Our current focus is on the clinical development of the LB-100 series of compounds.
The
LB-100 series consists of novel structures which have the potential to be first in their class and may be useful in the treatment of
not only several types of cancer but also vascular and metabolic diseases.
We
have demonstrated that the lead compound of the LB-100 series is active against a broad spectrum of human cancers in cell culture and
against several types of human cancers in animal models. The research on these compounds was initiated in 2006 under a Cooperative Research
and Development Agreement or CRADA with the National Institute of Neurologic Disorders and Stroke or NINDS of the National Institutes
of Health or NIH dated March 22, 2006 that was subsequently extended through a series of amendments until it terminated on April 1, 2013.
The
LB-100 compounds have been studied against a variety of common and rare cancer types and have been shown to potentiate the activity of
standard anti-cancer drugs in animal models of breast and pancreatic cancer, melanoma, pheochromocytomas and sarcomas. More recently,
the LB-100 compounds have been shown to potentiate the relatively new category of drugs called immune blockers. Because the LB-100 compounds
appear to exert their ability to improve the effectiveness of different forms of chemotherapy, radiation therapy and immunotherapy, we
believe the LB-100 series of compounds may be useful against most, if not all, cancer types.
The
LB-200 series consists of histone deacetylase inhibitors (HDACi). LB-200 has not yet advanced to the clinical stage and would require
additional capital to fund further development. Accordingly, because of our focus on the clinical development of LB-100 and analogs for
cancer therapy as described below in more detail, we have decided not to actively pursue the pre-clinical development of our LB-200 series
of compounds at this time. At this time, we intend to only maintain our composition of matter patents for LB-200 issued in the United
States.
Collaborations
with leading academic research centers in the United States, Europe and Asia have established the breadth of activity of LB-100 in pre-clinical
models of several major cancers. There is considerable scientific interest in LB-100 because it exerts its activity by a novel mechanism
and is the first of its type to be evaluated so broadly in multiple animal models of cancer and now in human beings. LB-100 is one of
a series of serine/threonine phosphatase (s/t ptase) inhibitors designed by us. The s/t ptases are ubiquitous enzymes that regulate many
cell signaling networks important to cell growth, division and death. The s/t ptases have long been appreciated as potentially important
targets for anti-cancer drugs. However, because of the multi-functionality of these enzymes, it had been widely held that pharmacologic
inhibitors of s/t ptases would be too toxic to allow their development as anti-cancer treatments, but we have shown that this is not
the case. LB-100 was well-tolerated at doses associated with objective regression (significant tumor shrinkage) and/or the arresting
of tumor progression in patients with progressive cancers.
Pre-clinical
studies showed that LB-100 itself inhibits a spectrum of human cancers and that combined with standard cytotoxic drugs and/or radiation,
LB-100 potentiates their effectiveness against hematologic and solid tumor cancers without enhancing toxicity. Given at very low doses
in animal models of cancer, LB-100 markedly increased the effectiveness of a PD-1 blocker, one of the widely used new immunotherapy drugs.
This finding raises the possibility that LB-100 may further expand the value of the expanding field of cancer immunotherapy.
We
completed a Phase 1 clinical trial of LB-100 to evaluate its safety that showed it is associated with antitumor activity in humans at
doses that are readily tolerable. Responses included objective regression (tumor shrinkage) lasting for 11 months of a pancreatic cancer
and cessation of growth (stabilization of disease) for 4 months or more of 9 other progressive solid tumors out of 20 patients who had
measurable disease. As Phase 1 clinical trials are fundamentally designed to determine safety of a new compound in humans, we were encouraged
by these results. The next step is to demonstrate in Phase 2 clinical trials the efficacy of LB-100 in one or more specific tumor types,
against which the compound has well documented activity in pre-clinical models.
Clinical
Trial Agreements
Moffitt
Cancer Center Clinical Trial Research Agreement
Effective
August 20, 2018, the Company entered into a Clinical Trial Research Agreement with the Moffitt Cancer Center and Research Institute Hospital
Inc., Tampa, Florida, effective for a term of five years, unless terminated earlier by the Company pursuant to 30 days written notice.
Pursuant to the Clinical Trial Research Agreement, Moffitt agreed to conduct and manage a Phase 1b/2 clinical trial to evaluate the therapeutic
benefit of the Company’s lead anti-cancer clinical compound LB-100 to be administered intravenously in patients with low or intermediate-1
risk myelodysplastic syndrome (MDS).
In
November 2018, the Company received approval from the U.S. Food and Drug Administration for its Investigational New Drug Application
(“IND”) to conduct a Phase 1b/2 clinical trial to evaluate the therapeutic benefit of LB-100 in patients with low and intermediate-1
risk MDS who have failed or are intolerant of standard treatment. Patients with MDS, although usually older, are generally well except
for severe anemia requiring frequent blood transfusions. This Phase 1b/2 clinical trial utilizes LB-100 as a single agent in the treatment
of patients with low and intermediate-1 risk MDS, including patients with del(5q) myelodysplastic syndrome (del5qMDS) failing first line
therapy. The bone marrow cells of patients with del5qMDS are deficient in PP2A by virtue of an acquired mutation and are especially vulnerable
to further inhibition of PP2A by LB-100. The clinical trial began at a single site in April 2019 and the first patient was entered into
the clinical trial in July 2019. A total enrollment of 41 patients is planned. An interim analysis will be done after the first 21 patients
are entered. If there are 3 or more responders but fewer than 7, an additional 20 patients will be entered. If at any point there are
7 or more responders, this will be sufficient evidence to support continued development of LB-100 for the treatment of low and intermediate-1
risk MDS. Recruitment has been slow and the Covid-19 pandemic has further reduced recruitment of patients into the protocol. At the current
rate of accrual, the clinical trial is expected to be completed by June 30, 2025. However, with additional funds, the Company would consider
adding two additional MDS centers to the Phase 2 portion of the study to accelerate patient accrual.
Spanish
Sarcoma Group Collaboration Agreement
Effective
July 31, 2019, the Company entered into a Collaboration Agreement for an Investigator-Initiated Clinical Trial with the Spanish Sarcoma
Group (Grupo Español de Investigación en Sarcomas or “GEIS”), Madrid, Spain, to carry out a study entitled
“Randomized phase I/II trial of LB-100 plus doxorubicin vs. doxorubicin alone in first line of advanced soft tissue sarcoma”.
The purpose of this clinical trial is to obtain information with respect to the efficacy and safety of LB-100 combined with doxorubicin
in soft tissue sarcomas. Doxorubicin is the global standard for initial treatment of advanced soft tissue sarcomas (“ASTS”).
Doxorubicin alone has been the mainstay of first line treatment of ASTS for over 40 years, with little therapeutic gain from adding cytotoxic
compounds to or substituting other cytotoxic compounds for doxorubicin. In animal models, LB-100 consistently enhances the anti-tumor
activity of doxorubicin without apparent increases in toxicity.
GEIS
has a network of referral centers in Spain and across Europe that have an impressive track record of efficiently conducting innovative
studies in ASTS. The Company agreed to provide GEIS with a supply of LB-100 to be utilized in the conduct of this clinical trial, as
well as to provide funding for the clinical trial. The goal is to enter approximately 150 patients in this clinical trial over a period
of two years. As advanced sarcoma is a very aggressive disease, the design of the study assumes a median progression free survival (PFS,
no evidence of disease progression or death from any cause) of 4.5 months in the doxorubicin arm and an alternative median PFS of 7.5
months in the doxorubicin plus LB-100 arm to demonstrate a statistically significant decrease in relative risk of progression or death
by adding LB-100. There is a planned interim analysis of the primary endpoint when approximately 50% of the 102 events required for final
analysis is reached.
The
Company had previously expected that this clinical trial would commence during the quarter ended June 30, 2020. However, during July
2020, the Spanish regulatory authority advised the Company that although it had approved the scientific and ethical basis of the protocol,
it required that the Company manufacture new inventory of LB-100 under current Spanish pharmaceutical manufacturing standards. These
standards were adopted subsequent to the production of the Company’s existing LB-100 inventory.
In
order to manufacture a new inventory supply of LB-100 for the GEIS clinical trial, the Company engaged a number of vendors to carry out
the multiple tasks needed to make and gain approval of a new clinical product for investigational study in Spain. These tasks included
the synthesis under good manufacturing practices (GMP) of the active pharmacologic ingredient (API), with documentation of each of the
steps involved by an independent auditor. The API was then transferred to a vendor that prepares the clinical drug product, also under
GMP conditions documented by an independent auditor. The clinical drug product was then sent to a vendor to test for purity and sterility,
provide appropriate labels, store the drug, and distribute the drug to the clinical centers for use in the clinical trials. A formal
application documenting all steps taken to prepare the clinical drug product for clinical use must be submitted to the appropriate regulatory
authorities for review and approval before being used in a clinical trial.
On
October 13, 2022, the Company announced that the Spanish Agency for Medicines and Health Products (Agencia Española de Medicamentos
y Productos Sanitarios or “AEMPS”) had authorized a Phase 1b/randomized Phase 2 study of LB-100, the Company’s lead
clinical compound, plus doxorubicin, versus doxorubicin alone, the global standard for initial treatment of advanced soft tissue sarcomas
(ASTS). Consequently, the GEIS clinical trial is currently scheduled to commence during the quarter ending June 30, 2023 and to be completed
by December 31, 2025. Up to 170 patents will be entered into the clinical trial. The Phase 1b section of the protocol is expected to
be completed by June 30, 2024, at which time the Company expects to have data on both response and toxicity from this portion of the
clinical trial.
The
interim analysis of this clinical trial will be done before full accrual of patients is completed to determine whether the study has
the possibility of showing superiority of the combination of LB-100 plus doxorubicin compared to doxorubicin alone. A positive study
would have the potential to change the standard therapy for this disease after four decades of failure to improve the marginal benefit
of doxorubicin alone.
National
Cancer Institute Pharmacologic Clinical Trial
In
May 2019, the National Cancer Institute (NCI) initiated a glioblastoma (GBM) pharmacologic clinical trial. This study is being conducted
and funded by the NCI under a Cooperative Research and Development Agreement, with the Company being required to provide the LB-100 clinical
compound.
Primary
malignant brain tumors (gliomas) are very challenging to treat. Radiation combined with the chemotherapeutic drug temozolomide has been
the mainstay of therapy of the most aggressive gliomas (glioblastoma multiforme or GBM) for decades, with some further benefit gained
by the addition of one or more anti-cancer drugs, but without major advances in overall survival for the majority of patients. In animal
models of GBM, the Company’s novel protein phosphatase inhibitor, LB-100, has been found to enhance the effectiveness of radiation,
temozolomide chemotherapy treatments and immunotherapy, raising the possibility that LB-100 may improve outcomes of standard GBM treatment
in the clinic. Although LB-100 has proven safe in patients at doses associated with apparent anti-tumor activity against several human
cancers arising outside the brain, the ability of LB-100 to penetrate tumor tissue arising in the brain is not known. Unfortunately,
many drugs potentially useful for GBM treatment do not enter the brain in amounts necessary for anti-cancer action.
The
NCI study is designed to determine the extent to which LB-100 enters recurrent malignant gliomas. Patients having surgery to remove one
or more tumors will receive one dose of LB-100 prior to surgery and have blood and tumor tissue analyzed to determine the amount of LB-100
present and to determine whether the cells in the tumors show the biochemical changes expected to be present if LB-100 reaches its molecular
target. As a result of the innovative design of the NCI study, data from a few patients should be sufficient to provide a sound rationale
for conducting a larger clinical trial to determine the effectiveness of adding LB-100 to the standard treatment regimen for GBMs. Five
patients have been entered and analysis of the blood and tissue will now proceed. If there is evidence in at least two of the patients
of penetration of LB 100 into tumor tissue, the study will be deemed as successful. The results of this study are expected during 2023.
Clinical
Research Support Agreement with City of Hope National Medical Center
Effective
January 18, 2021, the Company executed a Clinical Research Support Agreement with the City of Hope National Medical Center, an NCI-designated
comprehensive cancer center, and City of Hope Medical Foundation (collectively, “City of Hope”), to carry out a Phase 1b
clinical trial of LB-100, the Company’s first-in-class protein phosphatase inhibitor, combined with a standard regimen for treatment
of untreated extensive- stage disease small cell lung cancer (ED-SCLC). LB-100 will be given in combination with carboplatin, etoposide
and atezolizumab, an FDA-approved but marginally effective regimen, to previously untreated ED-SCLC patients. The dose of LB-100 will
be escalated with the standard fixed doses of the 3-drug regimen to reach a recommended Phase 2 dose (RP2D). Patient entry will be expanded
so that a total of 12 patients will be evaluable at the RP2D to confirm the safety of the LB-100 combination and to look for potential
therapeutic activity as assessed by objective response rate, duration of overall response, progression-free-survival and overall survival.
The
clinical trial was initiated on March 9, 2021, with patient accrual expected to take approximately two years to complete. However, as
patient accrual has been slower than expected, the Company is currently seeking to add two additional sites to increase the rate of patient
accrual, with at least one major site expected to be added by June 30, 2023. With the additional sites, the Company expects that this
clinical trial will be completed by December 31, 2024. Without the additional sites, the Company expects that this clinical trial will
be completed no sooner than December 31, 2025.
Effective
March 6, 2023, Sarah Cannon Research Institute (SCRI), Nashville, Tennessee, joined the City of Hope’s ongoing Phase 1b clinical
trial to assess the combination of the Company’s first-in-class protein phosphatase 2A (PP2A) inhibitor, LB-100, with a standard
regimen for previously untreated, extensive stage small cell lung cancer disease. SCRI, one of the largest community-based cancer trial
centers in the United States, is expected to expedite and expand the accrual of patients to this clinical trial, thus reducing the time
required to demonstrate the feasibility, tolerability and efficacy of adding LB-100 to the current standard treatment regimen.
The
Company currently expects that enrollment in this clinical trial will range from approximately 18 to 30 enrollees, with 24 enrollees
as the most likely number. Should fewer than 42 enrollees be required, the Company has agreed to compensate City of Hope on a per enrollee
basis. If a significant improvement in outcome is seen with the addition of LB-100, this would be an important advance in the treatment
of a very aggressive disease.
Clinical
Trial Monitoring Agreements
Moffitt.
On September 12, 2018, the Company finalized a work order agreement with Theradex Systems, Inc. (“Theradex”), an international
contract research organization (“CRO”), to monitor the Phase 1b/2 clinical trial being managed and conducted by Moffitt.
The clinical trial began in April 2019 and the first patient was entered into the clinical trial in July 2019. At the current rate of
accrual, the clinical trial is expected to be completed by June 30, 2025.
City
of Hope. On February 5, 2021, the Company signed a new work order agreement with Theradex to monitor the City of Hope investigator-initiated
clinical trial in small cell lung cancer in accordance with FDA requirements for oversight by the sponsoring party.
Patent
and License Agreements
Moffitt.
Effective August 20, 2018, the Company entered into an Exclusive License Agreement with Moffitt. Pursuant to the License Agreement,
Moffitt granted the Company an exclusive license under certain patents owned by Moffitt (the “Licensed Patents”) relating
to the treatment of MDS and a non-exclusive license under inventions, concepts, processes, information, data, know-how, research results,
clinical data, and the like (other than the Licensed Patents) necessary or useful for the practice of any claim under the Licensed Patents
or the use, development, manufacture or sale of any product for the treatment of MDS which would otherwise infringe a valid claim under
the Licensed Patents. The Company was obligated to pay Moffitt a non-refundable license issue fee of $25,000 after the first patient
was entered into a Phase 1b/2 clinical trial to be managed and conducted by Moffitt. The clinical trial began at a single site in April
2019 and the first patient was entered into the clinical trial in July 2019. The Company is also obligated to pay Moffitt an annual license
maintenance fee of $25,000 commencing on the first anniversary of the Effective Date and every anniversary thereafter until the Company
commences payment of minimum royalty payments. The Company has also agreed to pay non-refundable milestone payments to Moffitt, which
cannot be credited against earned royalties payable by the Company, based on reaching various clinical and commercial milestones aggregating
$1,897,000, subject to reduction by 40% under certain circumstances relating to the status of Valid Claims, as such term is defined in
the License Agreement. During the years ended December 31, 2022 and 2021, the Company recorded charges to operations of $25,000 and $25,000,
respectively, in connection with its obligations under the License Agreement. As of December 31, 2022, no milestones had yet been attained.
The
Company will be obligated to pay Moffitt earned royalties of 4% on worldwide cumulative net sales of royalty-bearing products, subject
to reduction to 2% under certain circumstances, on a quarterly basis, with a minimum royalty payment of $50,000 in the first four years
after sales commence, and $100,000 in year five and each year thereafter, subject to reduction by 40% under certain circumstances relating
to the status of Valid Claims, as such term is defined in the License Agreement. The Company’s obligation to pay earned royalties
under the License Agreement commences on the date of the first sale of a royalty-bearing product, and shall automatically expire on a
country-by-country basis on the date on which the last valid claim of the Licensed Patents expires, lapses or is declared invalid, and
the obligation to pay any earned royalties under the License Agreement shall terminate on the date on which the last valid claim of the
Licensed Patents expires, lapses, or is declared to be invalid in all countries.
Other
Significant Agreements and Contracts
NDA
Consulting Corp. On December 24, 2013, the Company entered into an agreement with NDA Consulting Corp. for consultation and advice
in the field of oncology research and drug development. As part of the agreement, NDA also agreed to cause its president, Dr. Daniel
D. Von Hoff, M.D., to become a member of the Company’s Scientific Advisory Committee. The term of the agreement was for one year
and provided for a quarterly cash fee of $4,000. The agreement has been automatically renewed for additional one-year terms on its anniversary
date since 2014.
BioPharmaWorks.
Effective September 14, 2015, the Company entered into a Collaboration Agreement with BioPharmaWorks, pursuant to which the Company engaged
BioPharmaWorks to perform certain services for the Company. Those services included, among other things, assisting the Company to commercialize
its products and strengthen its patent portfolio; identifying large pharmaceutical companies with a potential interest in the Company’s
product pipeline; assisting in preparing technical presentations concerning the Company’s products; consultation in drug discovery
and development; and identifying providers and overseeing tasks relating to clinical development of new compounds.
BioPharmaWorks
was founded in 2015 by former Pfizer scientists with extensive multi-disciplinary research and development and drug development experience.
The Collaboration Agreement was for an initial term of two years and automatically renews for subsequent annual periods unless terminated
by a party not less than 60 days prior to the expiration of the applicable period. In connection with the Collaboration Agreement, the
Company agreed to pay BioPharmaWorks a monthly fee of $10,000, subject to the right of the Company to pay a negotiated hourly rate in
lieu of the monthly payment, and agreed to issue to BioPharmaWorks certain equity-based compensation.
Foundation
for Angelman Syndrome Therapy. Effective August 12, 2020, the Company entered into a Master Service Agreement with the Foundation
for Angelman Syndrome Therapy (FAST) to collaborate in supporting pre-clinical studies of the potential benefit of LB-100 in a mouse
model of Angelman Syndrome (AS) as reported in The Proceedings of The National Academy of Science (Wang et al, June 3, 2019). The pre-clinical
studies were to be conducted at The University of California - Davis under the direction of Dr. David Segal, an internationally recognized
leader in AS research. If the pre-clinical studies confirm that LB-100 reduces AS signs in rodent models, the Company has agreed to enter
into discussions with FAST with respect to possible collaborations to most efficiently assess the benefit of LB-100 in patients with
AS, which is a rare disease affecting an estimated one out of 12,000 to one out of 20,000 persons in the United States. The genetic cause
of AS, reduced function of a specific maternal gene called Ube3, has been understood for some time, but the molecular abnormality resulting
from the genetic lesion has now been shown to be increased concentrations of protein phosphatase 2A (PP2A), a molecular target of the
Company’s investigational compound, LB-100. The Company has agreed to provide FAST with a supply of LB-100 to be utilized in the
conduct of this study, which was initially expected to be completed within three years. Conditioned on FAST’s completion of this
study, the Company has agreed to pay FAST five percent (5%) of all proceeds, as defined in the Master Service Agreement, received by
the Company, up to a maximum of $250,000, from the exploitation of the study results.
The
research team at the University of California - Davis recently completed their pre-clinical study of the potential benefit of LB-100
in a mouse model of AS. The preliminary analysis indicates that the positive results previously reported by Chinese investigators were
not confirmed in the US model. The Company is currently awaiting input from FAST as to whether it intends to continue to pursue pre-clinical
studies of LB 100. To date, FAST has not indicated whether it desires to pursue further studies of LB-100, but in light of the failure
to confirm the Chinese study results, the Company does not plan to pursue further studies of AS.
Netherlands
Cancer Institute. On October 8, 2021, the Company entered into a Development Collaboration Agreement with the Netherlands Cancer
Institute, Amsterdam, one of the world’s leading comprehensive cancer centers, and Oncode Institute, Utrecht, a major independent
cancer research center, to identify the most promising drugs to be combined with LB-100, and potentially LB-100 analogues, to be used
to treat a range of cancers, as well as to identify the specific molecular mechanisms underlying the identified combinations. The Company
has agreed to fund the study and provide a sufficient supply of LB-100 to conduct the study. The study is expected to take approximately
two years to conduct.
MRI
Global. The Company has contracted with MRI Global for stability analysis, storage and distribution of LB-100 for clinical trials
in the United States. On June 10, 2022, the contract was amended to reflect an estimated completion date of April 30, 2023.
Potential
Future Clinical Trials
Our
objective is to initiate a Phase 1b/2 immunotherapy clinical trial in 2023. Our ability to conduct such a clinical trial, and possibly
other clinical trials, is subject to the availability of additional financial resources. The clinical trial would study the ability of
LB-100 to enhance the effectiveness of adding LB-100 to an immunoblocker in treatment of one of several cancers in which immunotherapy
alone has modest activity.
The
Phase 1b/2 clinical trial in LB-100 plus a PD-1 inhibitor in yet to be specified solid tumors would require additional financing in excess
of that currently budgeted and/or partnering relationships with other pharmaceutical companies. From time to time, we engage discussions
with various parties with respect to the financing immunotherapy clinical trials. There is no assurance that we will be able to obtain
such financing and/or partnering relationships on acceptable terms or at all. Our longer-term objective is to secure one or more strategic
partnerships with pharmaceutical companies with major programs in cancer research and drug development.
Intellectual
Property
Our
products will ultimately be based on our intellectual property and are expected to be covered by our patents. These patents now cover
sole rights to the composition and synthesis of our LB-100 series of drugs, which is the Company’s lead clinical compound in development.
Joint patent applications with the NIH have been filed for the treatment of glioblastoma multiforme, medulloblastoma, and neuroblastoma.
Patent
applications for the LB-100 series (oxabicycloheptanes and heptenes) have been filed in the United States and internationally under the
Patent Cooperation Treaty. Patents for composition of matter and for several uses of the LB-100 series have been issued in the United
States, Mexico, Australia, Japan, China, Hong Kong, Canada, Germany, France, the United Kingdom, and by the European Patent Office and
the Eurasian Patent Office.
Although
we do not plan to allocate resources to further develop our LB-200 series of drugs, we have patents that cover sole rights to the composition
and synthesis of the LB-200 series of drugs, with coverage of the LB-200 series now limited to those patents issued in the United States.
For the LB-200 series, only patents issued in the United States are being maintained.
The
Company strives to protect and enhance the proprietary technology, inventions, and improvements that are commercially important to the
development of its business, including seeking, maintaining, and defending its patent rights, which are owned solely by our wholly-owned
Delaware subsidiary, Lixte Biotechnology, Inc., except in two instances jointly with one of our collaborators. The Company also relies
on trade secrets relating to its proprietary pipeline of product candidates and on know-how and continuing technological innovation to
develop and strengthen its pipeline. The Company intends to rely on regulatory protection afforded by regulatory agencies through data
exclusivity, market exclusivity, and patent term extensions, where available.
The
Company’s success will depend in large part on its ability to obtain and maintain patent and other proprietary protection for commercially
important technology, inventions and know-how related to its business; defend and enforce its patents; preserve the confidentiality of
its trade secrets; and operate without infringing valid and enforceable patents or proprietary rights of third parties. The Company’s
ability to stop third parties from making, using, selling, offering to sell, or importing our technology may depend on the extent to
which the Company has rights under valid and enforceable licenses, patents, or trade secrets that cover these activities. In some cases,
enforcement of these rights may depend on cooperation of the joint owners of our jointly owned patents and patent applications.
With
respect to both the Company’s solely and jointly owned intellectual property, the Company cannot be sure that patents will be granted
on any of its pending patent applications or on any patent applications filed solely or jointly by the Company in the future; we cannot
be sure that any of the Company’s existing patents or any patents that may be granted to us in the future will be commercially
useful in protecting the Company’s intended commercial products or therapeutic methods; and the Company cannot be sure that an
agency or court would determine that the Company’s solely or jointly owned patents are valid and enforceable.
The
patent portfolios for the Company’s most important programs involving the development of the LB-100 series are summarized and presented
below, along with related information, as of December 31, 2022, followed by a detailed listing of each domestic and international patent
that has been issued. The projected patent expiration dates noted below assume that that all required maintenance or annuity fees for
the patents are timely paid and that a court or agency does not determine that the patents are invalid or unenforceable.
LB-100.
The Company’s lead compound LB-100 is covered by U.S. Patent Nos. 8,822,461 and 7,998,957, which are solely owned by Lixte Biotechnology,
Inc. These patents are projected to expire in 2030 or 2028, exclusive of any available patent term extension. Counterpart non-U.S. patents
are projected to expire in 2028. Pharmaceutical compositions of LB-100 are covered by U.S. Patent Nos. 10,532,050, 10,023,587 and 8,822,461,
which are solely owned by Lixte Biotechnology, Inc. These patents and their non-U.S. counterparts are projected to expire in 2034 or
2028, exclusive of any available patent term extension.
LB-100
Combination Therapy with a Checkpoint Inhibitor. LB-100 combination therapy with a checkpoint inhibitor for treating cancer is
covered by a pending U.S. patent application and by non-U.S. patents and patent applications. These patents and patent applications are
jointly owned by Lixte Biotechnology, Inc. and The United States of America, as represented by the Secretary, Department of Health and
Human Services. These patents and patents issuing from these patent applications are projected to expire in 2037, exclusive of any patent
term extension.
LB-100
Combination Therapy with Carboplatin, Etoposide and Atezolizumab. LB-100 combination therapy with carboplatin, etoposide and
atezolizumab for treating small-cell lung cancer is covered by pending U.S., Taiwanese and international patent applications that are
solely owned by Lixte Biotechnology, Inc. Patents issuing from these patent applications are projected to expire in 2041, exclusive of
any patent term extension.
LB-100
Combination Therapy with Another Investigational Compound. LB-100 combination therapy with one of several other investigational
compounds for treating cancer, or preventing, inhibiting or reducing risk of metastasis of the cancer, is covered by pending U.S., Tawainese
and international patent applications that are jointly owned by Lixte Biotechnology, Inc. and Stichting Het Nederlands Kanker Instituut
– Antoni Van Leeuwenhoek Ziekenhuis. Patents issuing from these patent applications are projected to expire in 2043, exclusive
of any patent term extension.
LB-100
for Treating Myelodysplastic Syndrome. LB-100 for treating myelodysplastic syndrome is covered by U.S. Patent Nos. 10,434,100
and 10,071,094, which are jointly owned by Lixte Biotechnology, Inc. and H. Lee Moffitt Cancer Center and Research Institute, Inc. These
patents and their non-U.S. counterparts are projected to expire in 2035, exclusive of any patent term extension.
LB-100
for Treating Cancer. LB-100 for treating breast cancer, colon cancer, large cell lung cancer, adenocarcinoma of the lung, small
cell lung cancer, stomach cancer, liver cancer, ovary adenocarcinoma, pancreas carcinoma, prostate carcinoma, promyelocytic leukemia,
chronic myelocytic leukemia or acute lymphocytic leukemia, is covered by U.S. Patent No. 9,079,917, which is solely owned by Lixte Biotechnology,
Inc. This patent and its non-U.S. counterparts are projected to expire in 2028, exclusive of any patent term extension.
LB-100
Prodrugs and Analogs. LB-100 prodrugs and analogs are covered by U.S. Patent Nos. 10,618,908, 9,988,394, 8,822,461, 8,227,473
and 7,998,957, which are solely owned by Lixte Biotechnology, Inc. These patents and their non-U.S. counterparts are projected to expire
in 2036, 2030 or 2028, exclusive of any patent term extension. Pharmaceutical compositions of LB-100 prodrugs or analogs are covered
by U.S. Patent Nos. 11,236,102, 10,532,050, 10,023,587, 8,822,461, 8,227,473 and 7,998,957, which are solely owned by Lixte Biotechnology,
Inc. These patents and their non-U.S. counterparts are projected to expire in 2034, 2030 or 2028, exclusive of any patent term extension.
Our
portfolio of domestic and international patents issued is summarized below. We have additional domestic and international patents pending.
LB-100
Series of Compounds - Phosphatase Inhibitors – Composition and Use in Cancer Treatment
Oxabicycloheptanes
and Oxabicycloheptenes, Their Preparation and Use
LB-100
and LB-200 Series of Compounds – Use in Treatment of Multiple CNS Diseases
Neuroprotective
Agents for the Prevention and Treatment of Neurodegenerative Diseases
Oxabicycloheptanes
and Oxabicycloheptenes for the Treatment of Reperfusion Injury
Oxabicycloheptanes
and Oxabicycloheptenes for the Treatment of Depressive and Stress Disorders
HDAC
Inhibitors
Oxabicycloheptanes
and Oxabicycloheptenes for the Treatment of Diabetes
Formulations
of Oxabicycloheptanes and Oxabicycloheptenes
Process
of Synthesizing 3-(4-Methylpiperazine-1-Carbonyl)-7-Oxabicyclo [2.2.1] Heptane-2-Carboxylic Acid
Protein
Phosphatase 2A Inhibitors for Treating Myelodysplastic Syndromes
Oxabicycloheptane
Prodrugs
The
Market
Anti-Cancer
Drugs
We
have developed two series of pharmacologically active drugs, designated as the LB-100 series and the LB-200 series. We believe that the
mechanism by which compounds of the LB-100 series affect cancer cell growth is different from cancer agents currently approved for clinical
use. Lead compounds from each series have activity against a broad spectrum of common and rarer human cancers in cell culture systems.
In addition, compounds from both series have anti-cancer activity in animal models of glioblastoma multiforme, neuroblastoma, and medulloblastoma,
all cancers of neural tissue. Lead compounds of the LB-100 series also have activity against melanoma, breast cancer and sarcoma in animal
models and enhance the effectiveness of commonly used anti-cancer drugs in animal models. The enhancement of anti-cancer activity of
these anti-cancer drugs occurs at doses of LB-100 that do not significantly increase toxicity in animals. It is therefore hoped that
when combined with standard anti-cancer regimens against many tumor types, our compounds will improve therapeutic benefit without enhancing
toxicity in humans.
Marketing
Plan
Our
primary goal to date has been to take our primary compound, LB-100, through Phase 2 clinical trials. Because of the novelty and spectrum
of activity of LB-100, we believe it is reasonably likely we may find a partner in the pharmaceutical industry with interest in this
compound at some stage of its clinical development. However, we would prefer to delay the partnering/licensing decision until the potential
value of our products are augmented by demonstrating there is no impediment to clinical evaluation and a therapeutic dose level is determined
in clinical trials. Demonstration of clinical usefulness would be expected to substantially increase the value of our product.
Research
and Development
Further
development of lead compounds in addition to LB-100 will require pharmacokinetic/ pharmacodynamic characterization (i.e., how long a
drug persists in the blood and how long the drug is active at the intended target) and large animal toxicologic evaluation under conditions
meeting FDA requirements. Most anti-cancer drugs fail in development because of unacceptable toxicity. However, by analogy with mechanistically
related compounds, there is good reason to believe that lead compounds in addition to LB-100 will be able to be given to humans safely
by routes and at doses resulting in concentration of drug producing anti-cancer activity in animal models.
One
of our most valuable resources is our scientific team, a coalition of various experts brought together through contracts and other collaborative
arrangements. The team has expertise in cancer biology, proteomics (cancer biomarkers), medicinal and synthetic chemistry, pharmacology,
clinical oncology and drug evaluation. In a relatively short period of time and at low cost, this group has developed lead compounds
of two different classes of drugs that are positioned for development as new treatments for several types of cancer.
Product
Development
We
are subject to FDA regulations as it conducts clinical trials. Additionally, any product for which we obtain marketing approval, along
with the manufacturing processes, post-approval clinical data and promotional activities for such product, will be subject to continual
review and periodic inspections by the FDA and other regulatory bodies. Even if regulatory approval of a product is granted, the approval
may be subject to limitations on the indicated uses for which the product may be marketed or contain requirements for costly post-marketing
testing and surveillance to monitor the safety or efficacy of the product. Later discovery of previously unknown problems with our products,
including unanticipated adverse events or adverse events of unanticipated severity or frequency, manufacturer or manufacturing processes,
or failure to comply with regulatory requirements, may result in restrictions on such products or manufacturing processes, withdrawal
of the products from the market, voluntary or mandatory recall, fines, suspension of regulatory approvals, product seizures, injunctions
or the imposition of civil or criminal penalties.
Competition
The
life sciences industry is highly competitive and subject to rapid and profound technological change. Our present and potential competitors
include major pharmaceutical companies, as well as specialized biotechnology and life sciences firms in the United States and in other
countries. Most of these companies have considerably greater financial, technical and marketing resources than we do. Additionally, mergers
and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated in our competitors.
Our existing or prospective competitors may develop processes or products that are more effective than ours or be more effective at implementing
their technologies to develop commercial products faster. Our competitors may succeed in obtaining patent protection and/or receiving
regulatory approval for commercializing products before we do. Developments by our competitors may render our product candidates obsolete
or non-competitive.
We
also experience competition from universities and other research institutions, and we are likely to compete with others in acquiring
technology from those sources. There can be no assurance that other organizations will not develop technologies with significant advantages
over those that we are seeking to develop. Any such development could harm our business.
We
compete with universities and other research institutions engaged in research in these areas. Many of our competitors have greater technical
and financial resources than we do.
Our
ability to compete successfully is based on numerous factors, including:
If
we are unable to distinguish our products from competing products, or if competing products reach the market first, we may be unable
to compete successfully with current or future competitors.
Employees
and Human Capital Resources
As
of March 1, 2023, we had three full-time officer/employees and one part-time officer/employee. The Company relies to a significant extent
on outside consultants and advisors with various technical skills and expertise that the Company can draw on as necessary to conduct
its research and development and clinical trial programs. We consider our relationship with our employees to be good. Our future performance
depends significantly upon the continued service of our key personnel and our ability to attract highly skilled employees. We provide
our employees with opportunities for equity ownership.
Facilities
As
of March 1, 2023, we do not operate any facilities. We contract out research and development activities, drug production, and drug storage
to various commercial laboratories, drug manufacturers and storage facilities.
Government
Regulation
Our
business is subject to the regulations of the FDA as it conducts clinical trials. Clinical trials are research studies to answer specific
questions about new therapies or new ways of using known treatments. Clinical trials determine whether new drugs or treatments are both
safe and effective and the FDA has determined that carefully conducted clinical trials are the fastest and safest way to find treatments
that work in people.
The
FDA also requires that an independent review body consider the benefits and risks of a clinical trial and grant approval for the proposed
study including selecting of initial doses, plans for escalation of dose, plans for modification of dose if toxicity is encountered,
plans for monitoring the wellbeing of individuals participating in the study, and for defining and measuring, to the extent possible,
any untoward effects related to drug administration. Serious adverse effects, such as life-threatening toxicities and death, are immediately
reportable to the review body and to the FDA. To minimize risk when studying a new drug, the initial dose is well below that expected
to cause any toxicity. No more than three patients are entered at a given dose. In general, a dose is not escalated within an individual
patient. Once safety is established by the absence of toxicity or low toxicity in a group of three patients, a planned higher dose is
then evaluated in a subsequent group of three individuals and so on until dose-limiting toxicity is encountered. The dose level producing
definite but acceptable toxicity is then selected as the dose level to be evaluated in Phase 2 trials. Thus, the goal of Phase 1 studies
is to determine the appropriate dose level for evaluation of drug efficacy in patients with the same type of tumor at comparable stages
of progression for which no beneficial treatment is established.
In
addition to regulations imposed by the FDA, depending on our future activities, we may become subject to regulation under various federal
and state statutes and regulations, such as the Occupational Safety and Health Act, the Environmental Protection Act, the Toxic Substances
Control Act, the Research Conservation and Recovery Act, national restrictions on technology transfer, and import, export and customs
regulations. From time to time, other federal agencies and congressional committees have indicated an interest in implementing further
regulation of biotechnology applications. We are not able to predict whether any such regulations will be adopted or whether, if adopted,
such regulations will apply to our business, or whether we or our collaborators would be able to comply with any applicable regulations.
In
addition, as we intend to market our products in international markets, we may be required to obtain separate regulatory approvals from
the European Union and many other foreign jurisdictions. Approval by the FDA does not ensure approval by regulatory authorities in other
countries, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries
or by the FDA. We may not be able to file for regulatory approvals and may not receive necessary approvals to commercialize our products
in any market.
Legal
Proceedings
We
may be involved from time to time in ordinary litigation, negotiation, and settlement matters that will not have a material effect on
our operations or finances. We are not currently party to any material legal proceedings, and we are not aware of any pending or threatened
litigation against us.
ITEM
1A. RISK FACTORS
The
following risk factors, together with the other information presented in this document, including the financial statements and the notes
thereto, should be considered by investors.
Risks
Related to Our Financial Resources and Capital Needs
We
are engaged in early-stage research and as such might not be successful in our efforts to develop a portfolio of commercially viable
products.
A
key element of our strategy is to discover new product candidates and develop LB-100 as a monotherapy or combination therapy to treat
cancer. We are seeking to do so through our internal research programs or strategic partnerships. A significant portion of the research
or development that we are conducting involves new and unproven technologies. Research programs to identify new disease targets and product
candidates or to develop them require substantial technical, financial and human resources whether or not any candidates or technologies
are ultimately identified or proven successful. Our research programs might initially show promise in identifying potential product candidates,
yet fail to yield product candidates for clinical development for the following reasons:
If
we are unable to discover suitable potential product candidates, develop additional delivery technologies through internal research programs
or strategic partnerships, or in-license suitable products or delivery technologies on acceptable business terms, our business prospects
will suffer. Even if we discover additional product candidates, and even though LB-100 has completed a Phase 1 clinical trial, subsequent
clinical trials of LB-100 or new clinical trials of one or more additional drug candidates may show that these product candidates are
unsafe or ineffective.
We
have incurred substantial losses since our inception and anticipate that we will continue to incur substantial and increasing losses
for the foreseeable future.
We
are a clinical-stage biopharmaceutical company that uses biomarker technology to identify enzyme targets associated with serious common
diseases and then design novel compounds to attack those threats. We do not have any products approved by a regulatory authority and