10-K
1
tm2210237d1_10k.htm
FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
For the Fiscal Year Ended December 31,
2021
or
For the Transition Period from to
.
Commission File Number 001-41264
NUVECTIS PHARMA, INC.
(Exact name of registrant as specified in its
charter)
1 Bridge Plaza, Suite 275
(Address of Principal Executive Offices) (Zip Code)
Registrant’s telephone number, including
area code: (201) 614-3150
Securities registered pursuant to Section 12(b) of
the Act:
Common Stock, par value $0.00001 per NVCT 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
x
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
x
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
x
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 x No
̈
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 x Smaller reporting company x
Emerging growth company x
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ̈
Indicate by check
mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public
accounting firm that prepared or issued its audit report. ̈
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ̈ No x
As of December 31, 2021, the last business
day of the registrant’s most recently completed fiscal year, the common stock of the registrant was not listed on any securities
exchange or quoted on any automated quotation system. Accordingly, the aggregate market value of the registrant’s common stock
held by non-affiliates cannot be calculated as of such date. As of March 17, 2022, the aggregate market value of the registrant’s
common stock held by non-affiliates was approximately $32.2 million, based on the closing sale price of $7.63 as quoted by the Nasdaq
Stock Market as of such date.
Indicate the number of shares outstanding of
each of the registrant’s classes of common stock, as of the latest practicable date.
Class of Common Stock Outstanding Shares as of March 17, 2022
NUVECTIS PHARMA, INC.
ANNUAL REPORT ON FORM 10-K
TABLE OF CONTENTS
Page
PART I 6
Item 1. Business 6
Item 1A. Risk Factors 17
Item 1B. Unresolved Staff Comments 44
Item 2. Properties 44
Item 3. Legal Proceedings 44
Item 4. Mine Safety Disclosures 44
Item 6. [Reserved] 46
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 53
Item 8. Financial Statements and Supplementary Data 53
Item 9A. Controls and Procedures 53
Item 9B. Other Information 53
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 53
PART III 54
Item 10. Directors, Executive Officers and Corporate Governance 54
Item 11. Executive Compensation 60
Item 14. Principal Accountant Fees and Services 68
Item 15. Exhibits and Financial Statement Schedules 69
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SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING
STATEMENTS
Certain matters discussed
in this report may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended (the “Securities
Act”) and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve known and unknown risks,
uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future
results, performance or achievements expressed or implied by such forward-looking statements. The words “may,” “will,”
“should,” “expect,” “plan,” “anticipate,” “could,” “intend,”
“target,” “project,” “contemplate,” “believe,” “estimate,” “predict,”
“would,” “potential,” “continue,” “anticipate,” “believe,” “estimate,”
“may,” “expect” and similar expressions are generally intended to identify forward-looking statements. These
forward-looking statements are based on management’s current expectations and assumptions about future events, which are inherently
subject to uncertainties, risks and changes in circumstances that are difficult to predict.
Our actual results may differ
materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation,
those discussed under the captions “Risk Factors,” and elsewhere in this report. All written or oral forward-looking statements
attributable to us are expressly qualified in their entirety by these cautionary statements. Such forward-looking statements include,
but are not limited to, statements about:
● expectations for increases or decreases in expenses;
● developments and projections relating to our competitors and industry;
● our expectations about how market trends will affect our business;
● expectations for future capital requirements;
● the volatility of the trading price of our common stock; and
The
forward-looking statements contained in this report reflect our views and assumptions as of the date of this report. New risks and uncertainties
arise from time to time, and it is impossible for us to predict these events or how they may affect us. Except as required by law, we
assume no responsibility for updating any forward-looking statements.
We
qualify all of our forward-looking statements by these cautionary statements. In addition, we claim the protection of the safe harbor
for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
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SUMMARY OF RISK FACTORS
An investment in our common
stock is subject to broad range of risks and should only be made after a careful consideration of such risks. For a discussion of some
of the risks you should consider before purchasing our common stock, you are urged to carefully review and consider the section entitled
“Item 1A. Risk Factors.”
Our business is subject to
a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial
condition, results of operations, cash flows and prospects that you should consider before making a decision to invest in our common
stock. These risks are discussed more fully in the section titled “Risk factors” beginning on page 19 of this report,
and include the following:
Risks Related to our Financial Condition and
Capital Requirements
Risks Related to the Development of our Product
Candidates
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Risks Related to Government Regulation
Risks Related to our Reliance on Third Parties
Risks Related to Managing Growth and Employee
Matters
Risks Related to our Intellectual Property
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PART I
Item 1. Business
OVERVIEW
We are a biopharmaceutical company focused on
the development of innovative precision medicines for the treatment of serious unmet medical needs in oncology. Our development strategy
utilizes a precision medicine-based approach that translates key scientific insights relating to oncogenic drivers, pathway addiction
and other cancer-promoting factors into selective and potent and highly selective anticancer drugs.
CORPORATE INFORMATION
We were incorporated in July 2020 under
the laws of the State of Delaware under the name Centry Pharma, Inc., and changed our name to Nuvectis Pharma, Inc. in July 2021.
Our principal executive offices are located at 1 Bridge Plaza, 2nd Floor, Fort Lee, NJ 07024, and our telephone number is
(201) 614-3150.
We
maintain a website with the address www.nuvectis.com. We make available free of charge through our Internet website our annual reports
on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to these reports, as
soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange
Commission (“SEC”). We are not including the information on our website as a part of, nor incorporating it by reference into,
this report. Additionally, the SEC maintains a website that contains annual, quarterly, and current reports, proxy statements, and other
information that issuers (including us) file electronically with the SEC. The SEC’s website address is http://www.sec.gov.
PRODUCTS UNDER DEVELOPMENT
NXP800 (HSF1-Pathway Inhibitor)
We have licensed exclusive world-wide commercial
rights to NXP800, a novel Heat Shock Factor 1 (“HSF1”) pathway inhibitor, which was developed at the Institute for Cancer
Research (“ICR”) in London, England. Our license agreement with the ICR is subject to certain milestone and royalty payments.
For additional information see section “NXP800 License Agreement”.
Scientific Background:
Cancer cells actively exploit HSF1 to overcome
diverse stresses and promote biological activities crucial for their survival, progression, immune evasion, and metastasis. This utilization
of the HSF1 pathway by the cancer cell in order to overcome stress is also referred to as an HSF1 addiction.
In preclinical studies, treatment with NXP800
inhibited tumor growth in human xenografts of ovarian cancer. In addition, we identified a gene signature related to a mutation in the
AT-Rich Interaction Domain (“ARID1a”) gene that has potential to serve as a biomarker for patient selection in ovarian and
other cancer types. Based on this work, we plan to initially study the potential efficacy of NXP800 in Ovarian Clear Cell Carcinoma (“OCCC”)
and endometrioid ovarian carcinoma, and to investigate the use of ARID1a mutations as a potential patient selection marker for additional
types of cancer. The genetic screening for the ARID1a mutation is a standard part of the commercially available screening panels being
utilized in the clinic for cancer patients.
A comprehensive preclinical data package supported
the approval of the Clinical Trial Application (“CTA”) by the Medicines and Healthcare Regulatory Agency (“MHRA”)
in the United Kingdom, and we believe that it will also be sufficient for the Investigational New Drug (“IND”) Application
submission to the FDA, which is expected in the second quarter of 2022. In December 2021, we announced the commencement of the Phase
1 study for NXP800. The Phase 1 study is comprised of two parts: dose-escalation Phase 1a, initiated in December 2021, to be followed
by an expansion Phase 1b. In the Phase 1a, the safety and tolerability of NXP800 will be evaluated in patients with advanced solid tumors
to identify a dose and dosing schedule for the Phase 1b. In the Phase 1b, the safety and preliminary anti-tumor activity of NXP800 will
be evaluated in biomarker-selected patients, initially in OCCC and endometrioid carcinoma harboring the ARID1a mutation and possibly
cohorts of patients with additional types of solid tumors. Additional preclinical studies will be conducted by the ICR and other third-party
vendors in order to assess the preclinical safety and efficacy of NXP800 in additional solid tumor types.
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Addressing an Unmet Need in Clear Cell Ovarian Cancer and Advanced-stage
Endometrioid Ovarian Carcinoma
We plan to initially investigate NXP800 as treatment
for OCCC and endometrioid ovarian carcinoma. NXP800 is precisely targeted for women with these diseases who have either the ARID1a mutation
or ARID1a epigenetic loss.
OCCC is highly malignant, difficult to treat,
and has a very poor survival rate due to frequent recurrence after surgery and first-line treatment. First-line treatment consists of
platinum-based chemotherapy (“PBC”), for which the reported response rate in relapse/refractory, platinum resistant patients
is 1%, demonstrating a clear and dire need for a new treatment option for OCCC. OCCC represents approximately 10% of all ovarian cancer
cases in the United States, with an annual incidence of approximately 2,200 patients.
Endometrioid ovarian cancer represents approximately
10% of all diagnosed ovarian cancer cases. If diagnosed as early-stage, endometrioid ovarian tumors can typically be resected. However,
if diagnosed at later stages, these tumors have a substantially worse prognosis. Advanced, platinum-refractory, endometrioid cancer in
the United States represents approximately 30% of the endometrioid ovarian cancer segment. In this ovarian subset the progression-free
survival at three years for patients diagnosed with stage III/IV is a dismal 20% for stage III and 0% for stage IV, representing a clear
unmet cancer treatment need.
OCCC and endometrioid ovarian carcinoma are subtypes
of epithelial ovarian carcinoma whose clinical characteristics are distinct from those of high-grade serious ovarian carcinoma. They
exhibit a unique biological profile that is markedly different from those of other histologic types. The incidence of OCCC and endometrioid
among ovarian cancer patients is higher in East Asia (for example approximately 25% and 19% in Japan for OCCC and endometrioid, respectively),
than in Europe and the United States (approximately 10% for each indication).
Market Potential/Addressable Patient Population in Additional Solid
Tumor Types
Beyond our initial target indications, we believe
that NXP800 has the potential to demonstrate anti-tumor activity in several additional tumor types, such as gastric, hepatocellular,
esophageal, urothelial carcinoma and others. In vitro preclinical work has been conducted and in vivo preclinical studies are underway
to investigate the use of ARID1a mutation as a potential patient selection marker in these additional tumor types. This work could support
our use of a tumor agnostic development strategy wherein we enroll patients based on the cancer’s genetic and molecular features
without regard to the type or location of the cancer.
NXP800 Clinical Development Plan
Based on the compelling preclinical data, in
December 2021 we announced the commencement of the first-in-human Phase 1 study for NXP800 in adult patients. The Phase 1 study
consists of two parts: dose-escalation Phase 1a, initiated in December 2021, to be followed by an expansion Phase 1b. In the Phase
1a, the safety and tolerability of NXP800 will be evaluated in patients with advanced solid tumors to identify a dose and dosing schedule
for the Phase 1b. In the Phase 1b, the safety and preliminary anti-tumor activity of NXP800 will be evaluated in biomarker-selected patients,
initially in ovarian clear cell carcinoma and endometrioid carcinoma harboring the ARID1a mutation and possibly cohorts of patients with
additional types of solid tumors.
The MHRA in the United Kingdom has approved our
CTA for the Phase 1 study, and we plan to submit an IND application with the FDA in the second quarter of 2022. Our Phase 1 dose-escalation
study in the U.K. began in December 2021 and is currently ongoing.
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NXP900 – Scientific Background
In August 2021, we licensed worldwide commercial
rights to NXP900 from the University of Edinburgh in Scotland. NXP900 is a preclinical-stage, targeted-therapy, small molecule drug candidate
designed to preferentially inhibit the Proto-oncogene c-Src (“SRC”) and YES1 kinases. We started the preclinical IND-enabling
studies for NXP900 in the fourth quarter of 2021. Following the IND-enabling studies, we plan to submit an IND application with the FDA,
or an equivalent submission with a foreign agency, in order to begin a Phase 1 dose-escalation study of NXP900 in solid tumors. Subsequently,
upon successful completion of the dose-escalation study, we plan to conduct a clinical trial to investigate NXP900 in solid tumors where
the SRC and/or YES1 pathways are overactivated and implicated.
SRC as an Anti-Cancer Target
SRC is aberrantly activated in many cancer types,
including solid tumor cancers such as breast, colon, prostate, pancreatic and ovarian cancers, while remaining predominantly inactive
in non-cancerous cells. Increased SRC activity is generally associated with late-stage cancers, metastatic potential and resistance to
therapies, and correlates with poor clinical prognosis. To date no kinase inhibitor has been approved for the treatment of SRC-active
solid tumor malignancies.
NXP900’s Novel Mechanism of Action
SRC pathway activation is regulated by a switch
between inactive and active conformations. The inactive conformation of SRC family kinases is associated with lack of membrane binding,
lack of phosphorylation of the activation loop, and characterized by a “closed conformation.” The active “open”
conformation allows for the binding of SRC to signaling partners and enables full activation of the pathway via SRC’s kinase catalytic
activity and the scaffolding property.
Unlike the approved and clinical-stage SRC kinase
inhibitors, NXP900 induces and locks the SRC kinase in its native inactive conformation which inhibits both the catalytic (enzymatic)
and scaffolding functions. The existing SRC inhibitor drugs only inhibit the catalytic functions of SRC which enable it to bind to its
signaling partners with the pathway remaining partially active. NXP900 is a highly specific inhibitor and, unlike many other SRC inhibitors,
does not inhibit the Abelson tyrosine kinase (“ABL”), and as such, NXP900 in vivo data indicates no treatment related
immunosuppression. The lack of immunosuppressive effects with NXP900 is a potential advantage in the setting of solid tumors.
NXP900's unique mechanism of action, which leads
to inactivation of the SRC kinase, has resulted in SRC-pathway inhibition in vitro and in vivo. In vivo, treatment with NXP900 inhibited
primary and metastatic tumor growth in xenograft models of triple negative breast cancer and demonstrated on-target pharmacodynamic effects.
This novel mode of inhibiting SRC by NXP900 could lead to improved treatment of SRC-associated oncologic disorders and the potential
to treat solid tumors for the first time with a SRC inhibitor.
Gene amplification of the site containing the
YES1 gene has been reported in clinical samples in several tumors including lung, head and neck, bladder and esophageal cancers. Furthermore,
it has been found that YES1 gene amplification is a key mechanism of resistance to Epidermal Growth Factor Receptor (“EGFR”)
or Human Epidermal growth factor Receptor 2 (“HER2”) inhibitors. YES1-dependent oncogenic transformation has also been reported,
suggesting that YES1 plays a key role in these solid tumors. The transforming ability of YES1 has been demonstrated through several
experimental methods, for example down-regulating YES1 by short hairpin RNA (“shRNA”) significantly inhibited cell growth
in several malignancies, including colon carcinoma, rhabdomyosarcoma, and basal-like breast cancer, suggesting YES1 may play a key role
in these solid tumors.
NXP900 has been shown to inhibit the YES1 kinase
in preclinical models, providing an additional potential target for pharmacological inhibition by NXP900 of a biologically-relevant target
in various cancer types, some of which may rely on both the SRC and YES1 pathways for their advantage. There are no selective YES1 inhibitors
that are FDA approved or in clinical development. We plan to conduct in vivo studies to better understand the effects of YES1 inhibition
in solid tumors.
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OUR STRATEGY
We have a mission-driven strategy to build a
global biopharmaceutical company through the identification, licensing, development, and commercialization of therapeutics to address
unmet medical needs in oncology, with an initial focus on OCCC and endometrioid ovarian carcinoma patients. The key elements driving
our business strategy include:
INTELLECTUAL PROPERTY
We strive to protect the proprietary technologies
that we believe are important to our business, including pursuing, obtaining and maintaining patent protection intended to cover the
composition of matter of our current or future product candidates, their methods of use, related technologies and other inventions that
are important to our business. In addition to patent protection, we also rely on trade secrets to protect aspects of our business that
are not amenable to, or that we do not consider appropriate for, patent protection. We also rely on know-how and continuing technological
innovation to develop and maintain our proprietary and intellectual property position.
As with other biotechnology and biopharmaceutical
companies, our commercial success depends in part upon our ability to obtain, maintain, enforce, and protect our patents, intellectual
property, and other proprietary rights for our current or future product candidates and other commercially important technologies, inventions,
improvements, and know-how related to our business. Our success also depends on our ability to defend and enforce our intellectual property,
any patent rights that we may own or in-license, prevent others from infringing any patents we may own or in-license, preserve the confidentiality
of our trade secrets, and operate without infringing the valid and enforceable intellectual property and proprietary rights of third
parties.
Our ability to maintain and solidify our proprietary
and intellectual property position for our current or future product candidates and technologies depends on our success in obtaining
effective patent claims and enforcing those claims if granted. However, our current patent applications and any patent applications that
we may in the future file or license from third parties may not result in the issuance of patents, and any issued patents we may obtain
may not guarantee us the right to practice our technology in relation to the commercialization of our products. We also cannot predict
the breadth of claims that may be allowed or enforced in any patents we may own or in-license in the future.
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The patent positions for biotechnology and biopharmaceutical
companies like us are generally uncertain and can involve complex legal, scientific, and factual issues. We cannot predict whether the
patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued
patents will provide sufficient proprietary protection from competitors. Any issued patents that we may own or in-license in the future
may be challenged, invalidated, circumvented, or have the scope of their claims narrowed. Furthermore, the coverage claimed in a patent
application can be significantly reduced before a patent is issued, and its scope can be reinterpreted and even challenged after issuance.
Moreover, many jurisdictions permit third parties
to challenge issued patents in administrative proceedings, which may result in further narrowing or even cancellation of patent claims.
As a result, we cannot guarantee that any of our current or future product candidates will be protected or remain protectable by enforceable
patents. Moreover, any patents that we hold may be challenged, circumvented or invalidated by third parties. We cannot be certain of
the priority of inventions covered by pending third-party patent applications. If third parties prepare and file patent applications
in the United States that also claim technology or therapeutics to which we have rights, we may have to participate in interference proceedings
in the U.S. Patent and Trademark Office (“USPTO”) to determine priority of invention, which could result in substantial costs
to us, even if the eventual outcome is favorable to us, which is highly unpredictable. In addition, because of the extensive time required
for clinical development and regulatory review of any current or future product candidate we may develop, it is possible that, before
any current or future product candidates can be commercialized, any related patent may expire or remain in force for only a short period
following commercialization, thereby limiting the protection such patent would afford the respective product and any competitive advantage
such patent may provide.
In May 2021, we licensed one patent family
covering the composition of matter for NXP800, which includes two issued U.S. patents as well as methods of using and making NXP800.
Composition of matter patents in this family have also been issued in other major markets, including Australia, Brazil, China, India, Israel,
Mexico, Russia, Singapore, the European Union and Japan. The statutory expiration for patents in this family is October 2034, without
taking into account any possible patent term extension, where applicable. We licensed a patent family directed to additional compounds,
structurally distinct from NXP800, that modulate HSF1. This patent family is granted in the U.S. and has a statutory expiration of April 2036.
We have also licensed a patent family pending in the U.S. and Europe directed to deuterated compounds that modulate HSF1. Any patent
that grants from this family would have a statutory expiration of October 2037. We intend to pursue additional patent protection
for NXP800 relating to methods of use and related technologies that we consider important to our business.
In August 2021, we licensed one patent family
covering the composition of matter for NXP900, which includes one U.S. patent covering the composition of matter for NXP900, as well
as patents and patent applications issued/pending in major markets, including the European Union and Japan. The statutory expiration
for patents in this patent family is April 2036, without taking into account any possible patent term extension, where applicable.
The term of individual patents depends upon the
legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years
from the earliest date of filing a non- provisional patent application. In the United States, the term of a patent covering an FDA-approved
drug may, in certain cases, be eligible for a patent term extension under the Hatch-Waxman Act as compensation for the loss of patent
term during the FDA regulatory review process. The period of extension may be up to five years but cannot extend the remaining term of
a patent beyond a total of 14 years from the date of product approval. Only one patent applicable to an approved drug is eligible for
extension and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended.
Similar provisions are available in Europe and in certain other jurisdictions to extend the term of a patent that covers an approved
drug. It is possible that issued U.S. patents covering NXP800 and NXP900, may or will be entitled to patent term extensions. If our current
or future product candidates receive FDA approval, we intend to apply for patent term extensions, if available, to extend the term of
patents that cover any approved product candidates. We also intend to seek patent term extensions in any jurisdictions where they are
available; however, there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether
such extensions should be granted, and even if granted, the length of such extensions.
In addition to patent protection, we also rely
on trade secret protection for our proprietary information that is not amenable to, or that we do not consider appropriate for, patent
protection, including certain aspect of our manufacturing processes. However, trade secrets can be difficult to protect. Although we
take steps to protect our proprietary information, including restricting access to our confidential information, as well as entering
into non-disclosure and confidentiality agreements with our employees, consultants, independent contractors, advisors, contract manufacturers,
clinical research organizations (“CROs”), hospitals, independent treatment centers, suppliers, collaborators and other third
parties, such parties may breach such agreements and disclose our proprietary information including our trade secrets, and we may not
be able to obtain adequate remedies for such breaches. In addition, third parties may independently develop the same or similar proprietary
information or may otherwise gain access to our proprietary information. As a result, we may be unable to meaningfully protect our trade
secrets and proprietary information. For more information regarding the risks related to our intellectual property, please see “Risk
Factors - Risks Related to Our Intellectual Property.”
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NXP800 License Agreement
In May 2021, we entered into a worldwide,
exclusive license agreement with the CRT Pioneer Fund (“CRT”) for NXP800 and any of its derivatives (collectively, the “NXP800
Program”). NXP800 is a small molecule product candidate that we believe can be applied to a broad range of cancers.
Pursuant to the license agreement, we have an
obligation to pay success-based milestones and royalties to CRT, as follows:
➢ regulatory approval and commercial sales milestones of up $178 million; and
➢ mid-single digit to 10% royalties on a tiered basis on net sales.
In addition, in connection with the licensing
agreement, we expect to provide ICR with up to an additional $500,000 in research and development support over the next 18 months to
conduct additional scientific research and preclinical testing for certain indications that we select in connection with the NXP800 Program.
We own an exclusive license to intellectual property rights developed in the collaboration, to research, develop and commercialize products
resulting from the collaboration.
License Term
The license will remain in effect in each territory
subject to the license and will continue until our obligation to pay royalties in such territory has expired. The royalty term for each
licensed product in each country commences with the first commercial sale of the applicable licensed product in the applicable country
and ending on the expiration of the last to expire of any patent specified by the license (with the key composition of matters patent
expiring October 2034) or the expiration of any extended exclusivity period in the relevant country. CRT may earlier terminate the
license if we, or any of our affiliates or sub-licensees, challenge or seek to challenge the validity of any of the licensed patents
or upon certain change of control provisions. Either party may terminate the license upon material breach by the other party, and upon
the appointment of a receiver or upon a winding-up order or similar or equivalent action.
NXP900 License Agreement
In August 2021, we entered into a worldwide,
exclusive license agreement with the University of Edinburgh (“UoE”) for NXP900 and any of its derivatives (collectively,
the “NXP900 Program”). Discovered at the UoE, NXP900 is a targeted therapy, small molecule SRC and YES1 kinase inhibitor
product candidate that we believe can be applied to a broad range of cancers.
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Pursuant to the license agreement, we have an
obligation to pay success-based milestones and royalties to the UoE, as follows:
➢ regulatory approval and commercial sales milestones of up $279.5 million;
➢ mid-single digit to 8% royalties on a tiered basis on net sales; and
In addition, in connection with the license agreement,
we expect to provide the UoE with up to an additional £580,000 in research and development support over the next 18 months to conduct
additional scientific research and preclinical testing for certain indications that we select in connection with the NXP900 Program.
We own an exclusive license to intellectual property rights developed in the collaboration, to research, develop and commercialize products
resulting from the collaboration.
License Term
The royalty term for each licensed product in
each country is the period commencing with first commercial sale of the applicable licensed product in the applicable country and ending
on the expiration of the last to expire of any patent specified by the license (statutory expiration for the NXP900 patent family is
April 2036), or the expiration of any extended exclusivity period in the relevant country. We may terminate the license if we determine
that it is not scientifically or commercially viable to research, develop, or commercialize the licensed products which are the subject
of the license agreement. UoE may terminate the agreement if we: (i) cease to carry on the business regarding the treatment, prevention
and/or diagnosis of human diseases; (ii) discontinue the development of the licensed products which are the subject of the license;
(iii) dispose of our assets or business in whole or in material part; (iv) challenge the validity, ownership, or enforceability
of the exclusively licensed technology; (v) contest the secret or substantial nature of certain know-how subject to the license;
or (vi) breach certain diligence obligations or fail to pay any amount due under the license within a specified time frame. The
parties may terminate the NXP900 license agreement immediately by written notice upon material breach by the other party, if such breach
(if capable of cure) is not so cured within thirty (30) business days following the notice of breach.
Competition
Our industry is intensely competitive and subject
to rapid and significant technological changes. We face competition with respect to our current product candidates, and will face competition
with respect to future product candidates, from segments of the pharmaceutical, biotechnology and other related markets. There are several
companies that are developing drugs for various types of ovarian cancer, including ImmunoGen, Inc. and Constellation Pharmaceuticals, Inc.
(acquired by MorphoSys AG in June 2021). MorphoSys AG disclosed patient recruitment commenced in May 2021 in a phase 2 expansion
cohort for CPI-0209 in patients with relapsed urothelial carcinoma, relapsed OCCC, and relapsed endometrial carcinoma, all with known
ARID1A mutations.
Turning Point Therapeutics, Inc. (“Turning
Point”) is developing a MET/SRC/CSF1R inhibitor which is currently being studied in a Phase 1 trial of patients with advanced or
metastatic solid tumors harboring Mesenchymal–Epithelial Transition (“MET”) genetic alterations. The simultaneous inhibition
of MET, SRC and CSF1R kinases has been reported by Turning Point as a key component of the target product profile, and Turning Point
has described the program as a strategy for the treatment of MET-driven solid tumors, an area that does not overlap with our development
strategy. Turning Point is also developing TPX-0046, a Rearranged during Transfection (“RET”) kinase inhibitor that can also
inhibit other kinases including SRC family members, YES1, ABl, TRK and JAK2. TPX-0046 is being evaluated in an ongoing Phase 1/2 clinical
trial for the treatment of advanced solid tumors with RET gene alterations, an area that does not overlap with our development strategy.
Our competitors may obtain regulatory approval
of their products more rapidly than us, or may obtain patent protection or other intellectual property rights that limit our ability
to develop or commercialize our current or future product candidates. Our competitors may also develop drugs that are more effective,
more convenient, more widely used and less costly, or have a better safety profile than our products; and these competitors may also
be more successful than us in manufacturing and marketing their products.
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In addition, we may need to develop our current or future product
candidates in collaboration with diagnostic companies, and we will face competition from other companies in establishing these collaborations.
Our competitors will also compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing
clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary
for, our programs.
The acquisition or licensing of pharmaceutical
products is also very competitive. If we seek to acquire or license products, we will face substantial competition from a number of more
established companies, some of which have acknowledged strategies to license or acquire products and many of which are bigger than us
and have more institutional experience and greater cash positions or flows than we have. These more established companies may have competitive
advantages over us, as may other emerging companies taking similar or different approaches to product licenses and/or acquisitions. In
addition, a number of established research-based pharmaceutical and biotechnology companies may acquire products in late stages of development
to augment their internal product lines, which may provide those companies with an even greater competitive advantage.
Supply and Manufacturing
We do not have any manufacturing facilities.
We currently rely, and expect to continue to rely, on third-party manufacturers, including a single-manufacturer to make the NXP800 drug
substance and a single-manufacturer to make the NXP800 drug product. With respect to NXP900, to date, the drug substance has been manufactured
by a non-good manufacturing practices (“non-GMP”) manufacturer for research purposes at lab scale. We will need to identify
a third-party manufacturer(s) compliant with current good manufacturing practices (“cGMP”) for the production of NXP900
drug substance and drug product. With any supply program, obtaining raw materials of the correct
quality cannot be guaranteed and we cannot ensure that we will be successful in these endeavors.
We plan to continue to rely on third-party manufacturers
for the supply of NXP800 and NXP900, for manufacture of future additional product candidates, for preclinical testing as well as for
clinical trials and commercial manufacture if our current or future product candidates receive marketing approval.
GOVERNMENT REGULATION
Numerous governmental authorities, principally
the FDA, as well other state and foreign regulatory agencies impose substantial regulatory requirements
upon the clinical development, manufacture and marketing of our product candidates, as well as our ongoing research and development activities.
Before marketing in the U.S., any drug that we develop must undergo rigorous preclinical testing and clinical trials and an extensive
regulatory approval process implemented by the FDA under the Food, Drug and Cosmetic Act of 1930. The FDA regulates, among other things,
the pre-clinical and clinical testing, safety, efficacy, approval, manufacturing, record keeping, adverse event reporting, packaging,
labeling, storage, advertising, promotion, export, sale and distribution of biopharmaceutical products. If we fail to comply with
applicable FDA or other legal requirements, we may become subject to administrative or judicial sanctions or other legal consequences.
These sanctions or consequences may include, among other things, the FDA’s denial of our pending applications, the issuance of
clinical holds for ongoing studies, suspension or revocation of approved applications, warning or untitled letters, product withdrawals
or recalls, product seizures, relabeling or repackaging, total or partial suspensions of manufacturing or distribution, injunctions,
fines, civil penalties or criminal prosecution.
The clinical testing and approval processes require
substantial time, effort, and financial resources, and we cannot be certain that any approvals for our current or future product candidates
will be granted on a timely basis, if at all. We, along with our vendors, contract research organizations and contract manufacturers,
will be required to navigate the various preclinical, clinical, manufacturing and commercial requirements of the FDA, as well as those
of any other governing regulatory agency of the countries in which we wish to conduct studies or seek approval of our current or future
product candidates. The process of obtaining regulatory approvals of drugs and ensuring subsequent compliance with appropriate federal,
state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources.
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Preclinical and clinical trials for drugs
Before testing any drug in humans, a product
candidate must undergo rigorous preclinical testing. Preclinical studies include laboratory evaluations of drug chemistry, formulation
and stability, as well as in vitro and animal studies to assess safety and address use concerns. The conduct of preclinical studies is
subject to federal and state regulations and requirements, including good clinical practice (“GCP”) requirements for safety/toxicology
studies. The results of the preclinical studies, together with manufacturing information and analytical data must be submitted to the
FDA as part of an IND application. An IND application is a request for authorization from the FDA to administer an investigational product
to humans and must become effective before clinical trials may begin. Some long-term preclinical testing may continue after the IND application
is submitted. An IND application automatically becomes effective 30 days after receipt by the FDA unless the FDA raises concerns or questions
about any portion of the IND application and imposes a clinical hold. In such a case, the IND sponsor and the FDA need to resolve any
outstanding concerns before the clinical trial can begin. Submission of an IND application may result in the FDA not allowing clinical
trials to commence or not allowing clinical trials to commence on the terms originally specified in the IND application. A separate submission
to an existing IND application must also be made for each successive clinical trial conducted during product development of a product
candidate, and the FDA must grant permission, either explicitly or implicitly by not objecting, before each clinical trial can begin.
Clinical development of product candidates to
support New Drug Applications (“NDAs”) are typically conducted in three sequential phases, which may overlap:
Expedited development and review programs
The FDA is authorized to designate certain products
for expedited development or review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening
disease or condition. These programs include fast track designation, breakthrough therapy designation and priority review designation.
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A new drug is eligible for fast track designation
if it is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical
need for such disease or condition. Fast track designation provides increased opportunities for sponsor interactions with the FDA during
preclinical and clinical development, in addition to the potential for rolling review of a marketing application once a marketing application
is filed, meaning that the agency may review portions of the application before the sponsor submits the complete application, as well
as priority review, discussed below. In addition, a new drug may be eligible for breakthrough therapy designation if it is intended,
alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition and preliminary
clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant
endpoints, such as substantial treatment effects observed early in clinical development. Breakthrough therapy designation provides all
the features of fast track designation in addition to intensive guidance on an efficient drug development program beginning as early
as Phase 1, and FDA organizational commitment to expedited development, including involvement of senior managers and experienced review
staff in a cross-disciplinary review, where appropriate. Drugs or biologics designated as breakthrough therapies are also eligible for
accelerated approval of their respective marketing applications.
Finally, the FDA may designate a product for
priority review if it is a drug or biologic that treats a serious condition and, if approved, would provide a significant improvement
in safety or effectiveness. The FDA determines at the time that the marketing application is submitted, on a case-by-case basis, whether
the proposed drug represents a significant improvement in treatment, prevention or diagnosis of disease when compared with other available
therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination
or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient compliance that may lead to improvement
in serious outcomes, or evidence of safety and effectiveness in a new subpopulation. A priority review designation is intended to direct
overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing
application from ten months to six months for a new molecular entity NDA from the date of filing.
Even if a product qualifies for one or more of
these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period
for FDA review or approval will not be shortened. Furthermore, fast track designation, breakthrough therapy designation and priority
review do not change the standards for approval and may not ultimately expedite the development or approval process.
Other regulatory matters
Manufacturing, sales, promotion and other activities
of product candidates following product approval, where applicable, or commercialization are also subject to regulation by numerous regulatory
authorities in the United States in addition to the FDA, which may include the Centers for Medicare & Medicaid Services (“CMS”)
an agency within the U.S. Department of Health and Human Services (“HSS”), other divisions of the Department of Health and
Human Services, the Department of Justice, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade
Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency and state and local governments
and governmental agencies.
Other healthcare laws
Healthcare providers, physicians, and third-party
payors will play a primary role in the recommendation and prescription of any products for which we obtain marketing approval. Our business
operations and any current or future arrangements with third-party payors, healthcare providers and physicians may expose us to broadly
applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships
through which we develop, market, sell and distribute any drugs for which we obtain marketing approval. In the United States, these laws
include, without limitation, state and federal anti-kickback, false claims, physician transparency, and patient data privacy and security
laws and regulations. For a description of these risks, please see the section entitled “Risk Factors.”
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Current and future healthcare reform legislation
The FDA’s and other regulatory authorities’
policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our
current or future product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements
or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained
and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results
of operations.
In recent years, there has been heightened governmental
scrutiny over the manner in which biopharmaceutical manufacturers set prices for their marketed products. Such scrutiny has resulted
in several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things,
bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of
drugs under Medicare, and reform government program reimbursement methodologies for pharmaceutical products. Congress and the executive
branch have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs, making
this area subject to ongoing uncertainty.
Other U.S. environmental, health and safety laws and regulations
We may be subject to numerous environmental,
health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and
disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and
flammable materials, including chemicals and biological materials, and may also produce hazardous waste products. Even if we contract
with third parties for the disposal of these materials and waste products, we cannot completely eliminate the risk of contamination or
injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of our hazardous materials,
we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs
associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.
We maintain workers’ compensation insurance
to cover us for costs and expenses we may incur due to injuries to our employees, but this insurance may not provide adequate coverage
against potential liabilities. However, we do not maintain insurance for environmental liability or toxic tort claims that may be asserted
against us. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws
and regulations. Current or future environmental laws and regulations may impair our research, development or production efforts. In
addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.
Government regulation of drugs outside of the United States
In addition
to regulations in the United States, there are a variety of foreign regulations governing clinical trials and commercial sales and distribution
of any product candidates. The approval process varies from country to country, and the time may be longer or shorter than that required
for FDA approval.
EMPLOYEES AND HUMAN CAPITAL MANAGEMENT
As of March 22, 2022, we had 8 full-time
employees. Additionally, we have retained and may retain in the future, a number of expert consultants and vendors that help navigate
us through and execute the different aspects of our business. We consider our relationship with our employees to be good and have not
experienced any work stoppages, slowdowns or other serious labor problems that have materially impeded our business operations. None
of our employees are represented by labor unions or covered by collective bargaining agreements.
Our human capital management objectives include,
as applicable, identifying, recruiting, retaining, incentivizing, and integrating our new and existing employees. The principal purpose
of our equity incentive plan is to attract, retain, and motivate selected employees, consultants, and directors through the granting
of stock-based compensation awards and cash-based bonus awards.
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Item 1A. Risk
Factors
Investing in our common stock involves a high
degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information
in this report, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of
Operations” and our financial statements and related notes, before making a decision to invest in our common stock. Our business,
results of operations, financial condition and prospects could also be harmed by risks and uncertainties that are not presently known
to us or that we currently believe are not material. If any of the risks actually occur, our business, platform, reputation, brand, results
of operations, financial condition and prospects could be materially and adversely affected. In such event, the market price of our common
stock could decline, and you could lose all or part of your investment.
Risks Related to Our Finances and Capital Requirements
Our limited operating history may make
it difficult for you to evaluate the success of our business to date and to assess our future viability.
We are a clinical stage biopharmaceutical company
with a limited operating history. We were incorporated in Delaware in July 2020 and commenced operations in May 2021. Our operations
to date have been limited to organizing and staffing our company, business planning, raising capital, identifying, investigating, licensing
and evaluating potential product candidates, and establishing arrangements with third parties for the manufacture of initial quantities
of our lead product candidate and component materials. Our lead product candidate is in early clinical development, and our second drug