prax-20211231

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-K

(Mark One)

For the fiscal year ended December 31, 2021

For the transition period from________ to_________

Commission File Number: 001-39620

PRAXIS PRECISION MEDICINES, INC.

(Exact Name of Registrant as Specified in its Charter)

99 High Street, 30th Floor

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: 617-300-8460

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

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

Common Stock, par value $0.0001 per share PRAX The Nasdaq Global Select Market

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

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

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

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

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

Large accelerated filer ☒ Accelerated filer ☐

Non-accelerated filer ☐ Smaller reporting company ☒

Emerging growth company ☐

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

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

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

The aggregate market value of common stock held by non-affiliates of the registrant, based on the closing price of a share of common stock on June 30, 2021 as reported by the Nasdaq Global Select Market on such date was approximately $761.0 million. This calculation does not reflect a determination that certain persons are affiliates of the registrant for any other purpose.

As of February 18, 2022, the registrant had 45,487,614 shares of common stock, $0.0001 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement relating to its 2022 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, 2021 are incorporated herein by reference in Part III.

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TABLE OF CONTENTS

Part I

Item 1. Business 7

Item 1A. Risk Factors 57

Item 1B. Unresolved Staff Comments 108

Item 2. Properties 108

Item 3. Legal Proceedings 108

Item 4. Mine Safety Disclosures 108

Part II

Item 6. Selected Financial Data 109

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 121

Item 8. Financial Statements and Supplementary Data 122

Item 9A. Controls and Procedures 154

Item 9B. Other Information 155

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 156

Part III

Item 10. Directors, Executive Officers and Corporate Governance 157

Item 11. Executive Compensation 157

Item 14. Principal Accounting Fees and Services 157

Part IV

Item 15. Exhibits, Financial Statement Schedules 158

Signatures

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SUMMARY OF THE MATERIAL RISKS ASSOCIATED WITH OUR BUSINESS

•We are a clinical-stage biopharmaceutical company and we have incurred significant losses since our inception. We anticipate that we will continue to incur significant losses for the foreseeable future.

•We will need substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product discovery and development programs or commercialization efforts.

•The development and commercialization of drug products is subject to extensive regulation, and the regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable. If we are ultimately unable to obtain regulatory approval for our product candidates on a timely basis if at all, our business will be substantially harmed.

•Preclinical and clinical drug development involves a lengthy, complex and expensive process, with an uncertain outcome. The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA or comparable foreign regulatory authorities.

•Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit their commercial potential or result in significant negative consequences following regulatory approval, if obtained.

•The markets for our product candidates may be smaller than we expect.

•We face significant competition in an environment of rapid technological and scientific change, and there is a possibility that our competitors may achieve regulatory approval before us or develop therapies that are safer, more advanced or more effective than ours, which may negatively impact our ability to successfully market or commercialize any product candidates we may develop and ultimately harm our financial condition.

•Our success depends in part on our ability to protect our intellectual property. It is difficult and costly to protect our proprietary rights and technology, and we may not be able to ensure their protection.

•We have entered into, and may enter into, license or other collaboration agreements that impose certain obligations on us. If we fail to comply with our obligations under such agreements with third parties, we could lose license rights that may be important to our business.

•Third-party claims of intellectual property infringement may prevent or delay our product discovery and development efforts.

•We expect to depend on collaborations with third parties for the research, development and commercialization of certain of the product candidates we may develop. If any such collaborations are not successful, we may not be able to realize the market potential of those product candidates.

•Business interruptions resulting from COVID-19 or a similar pandemic, epidemic or outbreak of an infectious disease in the United States or worldwide may adversely affect our business.

•The price of our stock may be volatile, and you could lose all or part of your investment.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains express or implied forward-looking statements that are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements contained in this Annual Report on Form 10-K include, but are not limited to, statements about:

•the success, cost and timing of our product candidate development activities and clinical trials;

•our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates;

•the ability to license additional intellectual property relating to our product candidates from third parties and to comply with our existing license agreements and collaboration agreements;

•the ability and willingness of our third-party research institution collaborators to continue research and development activities relating to our product candidates;

•our ability to commercialize our product candidates, if approved, in light of the intellectual property rights of others;

•our ability to obtain funding for our operations, including funding necessary to complete further development and, if approved, commercialization of our product candidates;

•the commercialization of our product candidates, if approved;

•our plans to research, develop and, if approved, commercialize our product candidates;

•future agreements with third parties in connection with the commercialization of our product candidates, if approved, and any other approved product;

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

•the rate and degree of market acceptance of our product candidates, if approved;

•the pricing and reimbursement of our product candidates, if approved;

•regulatory developments in the United States and foreign countries;

•our ability to contract with third-party suppliers and manufacturers and their ability to perform adequately;

•the success of competing therapies that are or may become available;

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

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

•the effect of the COVID-19 pandemic, including mitigation efforts and economic effects, on any of the foregoing or other aspects of our business operations, including but not limited to our ongoing and planned preclinical studies and clinical trials

In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue” or the negative of

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these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Annual Report on Form 10-K. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this Annual Report on Form 10-K and the documents that we reference in this Annual Report on Form 10-K and have filed with the Securities and Exchange Commission as exhibits hereto completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.

The forward-looking statements in this Annual Report on Form 10-K represent our views as of the date of this Annual Report on Form 10-K. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Annual Report on Form 10-K.

This Annual Report on Form 10-K also contains estimates, projections and other information concerning our industry, our business and the markets for our product candidates. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are assumed in this information. Unless otherwise expressly stated, we obtained this industry, business, market, and other data from our own internal estimates and research as well as from reports, research surveys, studies, and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources. While we are not aware of any misstatements regarding any third-party information presented in this Annual Report on Form 10-K, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties and are subject to change based on various factors, including those discussed under the section titled “Risk Factors” and elsewhere in this Annual Report on Form 10-K.

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PART I

Item 1. Business

BUSINESS

COMPANY OVERVIEW

We are a clinical-stage biopharmaceutical company translating genetic insights into the development of therapies for central nervous system, or CNS, disorders characterized by neuronal excitation-inhibition imbalance. Normal brain function requires a delicate balance of excitation and inhibition in neuronal circuits, which, when dysregulated, can lead to abnormal function and disease. We are applying insights from genetic epilepsies to both rare and more prevalent neurological and psychiatric disorders, using our understanding of shared biological targets and circuits in the brain. We apply a deliberate and pragmatic precision approach, leveraging a suite of translational tools including novel transgenic and predictive translational animal models and electrophysiology markers, to enable an efficient path to proof-of-concept in patients. Through this approach, we have established a broad CNS portfolio with multiple programs, including product candidates across psychiatric disorders, movement disorders, epilepsy and other exploratory CNS indications, with three clinical-stage product candidates. Each of our clinical-stage product candidates is advancing in more than one indication and we anticipate expansion into additional indications. We expect multiple topline readouts from our clinical-stage programs and anticipate the launch of a fourth clinical development program in 2022. In addition, we have established a robust pipeline of preclinical stage programs through internal research and in-licensing.

Our broad portfolio of CNS programs is currently structured by therapeutic focus in three primary franchises – Psychiatry, Movement Disorders and Epilepsy. In addition, we are pursuing development in other exploratory CNS indications such as rare adult cephalgias. Within our Psychiatry franchise, our most advanced clinical candidate, PRAX-114, is being developed for the treatment of a broad range of patients suffering from major depressive disorder, or MDD and post-traumatic stress disorder, or PTSD. We expect to report topline results from the Aria Study, a Phase 2/3, placebo-controlled study evaluating PRAX-114 for monotherapy treatment of MDD, in the second quarter of 2022. We also expect to report topline results from the Acapella Study, a Phase 2, placebo-controlled, dose-ranging study evaluating PRAX-114 for treatment of MDD, in mid-2022. In addition, we have initiated a Phase 2, placebo-controlled study evaluating PRAX-114 for the treatment of PTSD and expect to report topline results in the second half of 2022.

Within our Movement Disorders franchise, our second clinical candidate, PRAX-944, is being developed for the treatment of Essential Tremor, or ET, and Parkinson's Disease, or PD. We anticipate reporting topline results from the second cohort of our ongoing Phase 2a trial evaluating PRAX-944 for the treatment of ET in the second quarter of 2022, including both open-label and placebo-controlled, randomized withdrawal period results. We have initiated a Phase 2b, placebo-controlled, dose-range finding trial, the Essential1 Study, to evaluate the tolerability, safety and efficacy of PRAX-944 in adults with ET and we expect to report topline results in the second half of 2022. We also expect to initiate a Phase 2, placebo-controlled, crossover study to evaluate the safety, pharmacokinetics, or PK, and efficacy of daytime dosing of PRAX-114 for the treatment of ET in the first quarter of 2022 and expect to report topline results in the second half of 2022. We expect to initiate a Phase 2, placebo-controlled trial to evaluate the safety, PK and efficacy of PRAX-944 as a non-dopaminergic treatment for the motor symptoms of PD in the second quarter of 2022.

Within our Epilepsy franchise, we expect to initiate a Phase 2 study with our third clinical-stage candidate, PRAX-562, in patients with rare pediatric Developmental and Epileptic Encephalopathies, or DEEs, in the second quarter of 2022. Our most advanced preclinical stage product candidate within our Epilepsy franchise, PRAX-222, is an antisense oligonucleotide, or ASO, designed to decrease the expression levels of the protein encoded by the gene SCN2A in patients with gain-of-function, or GOF, SCN2A mutations.We expect to initiate a seamless study of PRAX-222 in the second quarter of 2022, which would be our fourth program to reach clinical stage. We also expect to initiate a Phase 2 proof-of-concept, or POC, clinical trial evaluating PRAX-562 in patients with rare adult cephalgias in the first quarter of 2022. In addition, our preclinical pipeline consists of PRAX-628, a product candidate nominated in the fourth quarter of 2021 for focal epilepsy, a discovery program in development for KCNT1 related epilepsy, three ASOs targeting SCN2A in patients with loss-of-function, or LOF, mutations, PCDH19 and SYNGAP1, and three additional discovery programs for undisclosed targets in psychiatry, movement disorders and epilepsy.

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Our Approach

Each of our programs is based on four key principles that we believe will both increase the probability of success and allow us to efficiently translate insights into high-impact therapies for patients and society:

1.Focus on therapeutic targets identified through human genetics. Numerous CNS disorders are caused by an imbalance of excitation and inhibition in neuronal circuitry. By applying insights derived from the genetics of pediatric epilepsies, we have identified biological targets that we believe are implicated in determining neuronal excitability, not only in epilepsies, but also in a variety of rare and more prevalent CNS disorders. For example, human genetics points to the relevance of the GABAergic system where mutations in GABAA receptors are associated with a number of rare pediatric epilepsies. The GABAergic system is also implicated in MDD, where enhancing GABAA activity is believed to be beneficial. As our understanding of the genetic underpinning of these disorders evolves, we plan to continually apply learnings to expand and advance our portfolio.

2.Utilize translational tools to validate the potential of our targets and product candidates. We leverage a number of translational tools to both confirm pharmacodynamic effects of our product candidates in the brain and establish on-mechanism effects, which we believe will result in an increased probability of success in the clinic. Our programs utilize target-specific electroencephalogram, or EEG, endpoints to serve as robust markers of pharmacological engagement of the drug target and novel transgenic animal models to assess the therapeutic activity of our molecules. We expect these tools, along with rigorous preclinical PK and pharmacodynamic characterization of our molecules will position us to more efficiently translate preclinical findings into clinical utility.

3.Pursue efficient, rigorous clinical development paths to proof-of-concept in humans. Our development strategies are focused on defining efficient paths to demonstrate the safety and therapeutic activity of our programs in humans. We select indications that we believe will enable the early demonstration of desired effect in a relatively small patient sample and we focus on clinical endpoints that both minimize inter-patient variability and offer a clear connection between pharmacodynamic effects and clinical measures that are meaningful to patients, physicians and regulatory agencies. Our global network of contract research organizations, or CROs, and scientists affords us the flexibility to conduct research and development activities in diverse geographic locations to accelerate our development timelines and limit geographic risks.

4.Apply patient-guided development strategies.We pursue the development of candidates that address the treatment needs of patients and the treating community, including targeting the underlying disease pathology versus just symptom management. We intend to develop therapies that provide patients long-term relief from their disorders and significantly reduce the overall burden to patients and caregivers. Our development strategies are tailored to demonstrate these benefits.

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Our Portfolio

Below is a summary of our portfolio. We own global commercialization rights for all of our product candidates.

*SCN2A-LOF, SYNGAP1 and PCDH19 ASOs are being developed in collaboration with collaboration with The Florey Institute.

PSYCHIATRY

We are developing PRAX-114, an extrasynaptic GABAA receptor preferring positive allosteric modulator, or PAM, for the treatment of a broad range of patients suffering from MDD and PTSD. We believe that PRAX-114 has several advantages relative to currently available therapies and product candidates in the GABAA PAM therapeutic class, including the potential for rapid and durable antidepressant effect across MDD symptoms, a wider therapeutic window, simple nightly dosing with or without a meal via a tablet formulation and the potential for a differentiated tolerability profile. We have been diligently pursuing our strategy to advance PRAX-114 towards regulatory approval and commercialization to support a broad label in MDD that can be easily integrated into standard clinical practice. We intend to develop PRAX-114 as both a monotherapy and adjunctive therapy for MDD, and, if approved, commercialize it in the United States and explore opportunities to expand value in other countries. PRAX-114 is also being evaluated in a Phase 2 POC study for the treatment of PTSD. We believe that treatment of PTSD with a GABAA PAM has the potential to both address the underlying pathophysiology of the disorder more directly than standard of care treatments and address multiple unmet medical needs in this population. We intend to demonstrate POC for PRAX-114 for the treatment of PTSD and subsequently determine development and regulatory pathways. We are also assessing the potential development of PRAX-114 in additional indications.

PRAX-114 is currently in the registration-enabling phase of development for treatment of patients with MDD. We are conducting a Phase 2/3, placebo-controlled study, the Aria Study, to assess the efficacy and safety of 40mg of PRAX-114 for monotherapy treatment of MDD and expect to report topline results in the second quarter of 2022. The Aria Study is intended to serve as one of two trials required by the U.S. Food and Drug Administration, or the FDA, to demonstrate clinical efficacy to support registration of PRAX-114 for treatment of MDD. We are also conducting a Phase 2, placebo-controlled, dose-ranging study evaluating PRAX-114 for treatment of MDD, the Acapella Study, and expect to report topline results in mid-2022. The Acapella Study is intended to provide additional understanding of the dose range and to evaluate the safety and efficacy of PRAX-114 at doses of 10, 20, 40 and 60mg. We completed a multi-cohort, three-part Phase 2a clinical trial in Australia, in which Parts A and C of the trial treated patients with MDD while Part B focused on patients with perimenopausal depression, or PMD. For all parts of the trial, PRAX-114 was generally well-tolerated and demonstrated a rapid antidepressant effect that was maintained throughout the treatment period. We also observed improvements in menopausal and mood symptoms in patients with PMD and are assessing further development options based on this finding. In addition, we initiated a Phase 2, placebo-controlled study evaluating PRAX-114 for treatment of PTSD in the fourth quarter of 2021 and expect to report topline results in the second half of 2022.

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Major Depressive Disorder

MDD is a chronic psychiatric condition causing severe impairments that interfere with the ability to carry out life activities. An MDD episode is characterized by a period of at least two weeks of persistent depressed mood and/or the loss of interest or pleasure in activities, accompanied by sleep and appetite disturbance, fatigue, concentration difficulty, cognitive impairment, feelings of guilt, psychomotor retardation or agitation and suicidal ideation. MDD is one of the most prevalent psychiatric disorders. In the United States, approximately 19 million adults, or seven percent of the adult population suffer from an episode of MDD every year, with episodes lasting on average six to eight months. It is estimated that MDD affects more than 300 million people worldwide. Moreover, the prevalence of depression has increased during the COVID-19 pandemic in the United States and globally. In the United States, depression symptoms have increased by more than 3-fold overall during the COVID-19 pandemic. The most dramatic increases are reported in moderate, moderately severe and severe depression symptoms, with a 2.6-fold, 3.7-fold, and 7.5-fold rise, respectively, relative to a pre-COVID-19 pandemic period.

MDD is a recurrent psychiatric condition that frequently requires long-term treatment, with the ultimate goal of achieving remission. MDD is associated with an elevated risk of suicide, underscoring the need for rapid and effective treatment. The most explored pharmacological mechanisms for treating MDD target monoamine neurotransmitters. Drugs in this class include selective serotonin reuptake inhibitors, or SSRIs, serotonin and norepinephrine reuptake inhibitors, or SNRIs, bupropion and atypical antipsychotic medications. SSRIs and SNRIs are associated with significant side effects, including weight gain, sexual dysfunction, drowsiness, nausea, insomnia and discontinuation syndrome. Atypical antipsychotics indicated for adjunctive treatment of insufficient clinical response are associated with weight gain, sexual dysfunction, metabolic syndrome and movement disorders. The side effect profile of current antidepressant standard of care negatively impacts treatment outcomes, quality of life and adherence in MDD patients.

Approximately 70% of MDD patients fail to achieve remission with first line treatment. Further, those patients that are responsive typically require approximately six to eight weeks of treatment to show a clinically meaningful response. Slow onset of action is a substantial unmet need in MDD, with some of the most commonly prescribed antidepressants showing a reduction in the Hamilton Depression Scale, or HAM-D, of approximately 6- to 8-points and a difference from placebo of approximately 1-2 points at Week 2. The HAM-D is one of the most widely-used clinical rating scales for depression and includes 17 items used for scoring over a wide range of symptoms typically found with depression including mood, suicidal thoughts, insomnia, anxiety, loss of appetite and weight loss. Patients with more severe depression have higher scores. Moreover, approximately 40% of patients on therapy discontinued treatment due to either a loss of response or adverse side effects. Finally, 33% of patients failed to respond after treatment with three or more different standard of care therapies.

Among the MDD patients who experience a response to treatment, the majority do not achieve remission. Even for patients deemed responsive, disease burden often persists through the presence of residual depression symptoms that lead to an ongoing negative impact on home, interpersonal and occupational functioning, as well as a significantly increased risk of relapse of the full depressive syndrome and worse comorbid outcomes, including suicide.

Despite the numerous and long-standing antidepressant treatment options, there continues to be an unmet need for antidepressants that provide rapid onset of effect, higher remission rates, efficacy throughout the depressive episode and an improved tolerability profile that is aligned with the clinical care and the course of MDD and its accompanying comorbid symptoms.

GABAA in depression

Gamma-aminobutyric acid, or GABA, is the principal neurotransmitter mediating neuronal inhibition in the brain. Neurons that produce GABA, known as GABAergic neurons, are present throughout the brain, representing between 20% and 40% of all neurons depending on the region. Their primary role is to balance and fine tune excitatory neurotransmission of various neuronal circuits. Whole-exome sequencing has identified GABAA receptor mutations as an important cause in a range of neurological conditions, underscoring their importance as central regulators of excitatory and inhibitory balance in the brain.

It is well established that GABAergic signaling is impaired in patients with MDD and other stress-related mood disorders. GABA levels, levels of the GABA synthesizing enzyme GAD67, as well as GABAA receptor levels, have been shown to be reduced in brains of patients with MDD. In addition, decreased GABAergic neuron function, most notably in the prefrontal cortex, has been documented in MDD patients and in preclinical animal models of depression. Endogenous neuroactive steroids, or NAS, such as allopregnanolone and pregnanolone or synthetic derivatives thereof, such as PRAX-114, have been shown to potentiate the activity of GABAA receptors. Both

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human and animal data reveal an important role for NAS in these GABAergic deficits and levels of endogenous NAS are decreased in individuals with MDD.

Of particular relevance to PRAX-114 is the more recently established link between GABAergic signaling, neuroactive steroid levels and stress—a well-established risk factor for MDD and other mood disorders. In preclinical models, exposure to chronic stress leads to reduced neuroactive steroid biosynthesis and reduced GABAergic inhibition in depression-relevant brain circuits. This ultimately results in increased anxiety and depression-like behaviors. In particular, it has been shown that stress causes long-lasting loss of GABAergic inhibition in the amygdala, a brain region central to the stress response involved in controlling emotions. This reduced inhibition causes increased activity of the amygdala and is associated with an exaggerated stress hormone response.

We believe that enhancing modulation of GABAA receptors in patients with depression and anxiety has the potential to restore normal function in these circuits, leading to broad applications in mood and anxiety disorders.

Post-Traumatic Stress Disorder

PTSD is a chronic disorder occurring after direct or indirect exposure to psychological trauma. PTSD is characterized by re-experiencing aspects of the original trauma, avoidance of trauma reminders, anhedonic or dysphoric mood states, and/or negative thoughts or feelings that began or worsened after the trauma and trauma-related hyperarousal and hypervigilance. Problems with sleep onset and maintenance are common and may be associated with nightmares, safety concerns, or a generalized elevated arousal that interferes with sleep. PTSD is frequently associated with impairment in many aspects of daily functioning, including self-care, home functioning, relationships, and social interactions. Common occupational impacts include higher rates of sick leave, failure to return to work and reduced work performance that is correlated with PTSD symptom severity. Failure to achieve remission of PTSD is associated with ongoing functional impairment as well as subjective distress. Even with effective medication or psychotherapy treatment, hyperarousal symptoms such as irritability/anger, insomnia and nightmares often persist even when other symptoms have been adequately treated, with greater than half of patients reporting these residual symptoms even when they no longer meet diagnostic criteria. Continued sleep disruption can prolong other PTSD symptoms and increase risk of conditions frequently comorbid with PTSD such as severe chronic insomnia disorder, MDD and substance use disorders.

Despite the prevalence and negative impact of PTSD, there are few available pharmacotherapies for this disorder and their efficacy has substantial limitations. Only two medications are approved by the FDA for PTSD treatment (paroxetine and sertraline), and only a few additional medications (including fluoxetine and venlafaxine) have shown at least modest efficacy in the treatment of the disorder. The rate of response to SSRIs is at most 60%, and only 20 to 30% of those treated achieve symptomatic remission following pharmacotherapy. Achieving maximal improvement (even to incomplete response) with available medications can take months. In addition to the slow onset of efficacy for core PTSD symptoms, these treatments have adverse event, or AE, profiles including the potential to increase insomnia and anxiety symptoms during treatment initiation. The slow onset of efficacy and potential for increasing insomnia and anxiety symptoms lead a substantial proportion of patients to discontinue treatment. We believe this highlights the unmet medical need for a rapid onset treatment that can improve insomnia and anxiety symptoms both to ease subjective distress and support adherence with treatment.

GABAA in PTSD

Based on findings from third party studies, we believe there is a compelling rationale for alterations in GABAergic transmission associated with the pathophysiology of PTSD. These findings include reduced levels of plasma and cortical GABA seen in the insula and anterior cingulate cortex of veterans exposed to trauma. Additionally, in military service members with PTSD, lower brain levels of GABA in the parieto-occipital cortex were negatively correlated with and mediated by scores on the Insomnia Severity Index. Using transcranial magnetic stimulation, paired-pulse short- latency intracortical inhibition (an effect believed to reflect GABAA-mediated inhibition) was decreased in patients with PTSD relative to matched healthy controls.

PTSD has also been associated with alterations in NAS that positively allosterically modulate GABA action at GABAA receptors. These findings include reductions in allopregnanolone levels in cerebrospinal fluid that correlate negatively with PTSD and negative mood symptoms in both women and men. PTSD in women has been associated with a deficit in neurosteroid synthesis that in turn was associated with a deficit in extinction memory that plays a role in the development and maintenance of PTSD symptoms. Additionally, two neurosteroid GABAA receptor antagonists, dehydroepiandrosterone and dehydroepiandrosterone sulphate, have been shown to be elevated relative to controls in combat-associated PTSD, constituting an additional negative influence on GABAergic signaling. Taken together, these findings support our hypothesis that treatment of PTSD with a NAS GABAA PAM

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has the potential to address the underlying pathophysiology of the disorder more directly than standard of care treatments and address multiple unmet medical needs in this population.

GABAA receptors: The target of PRAX-114

PRAX-114 is a small molecule neuroactive steroid that acts as a positive allosteric modulator of GABAA receptors. PAMs are substances that bind to a receptor, such as GABAA, to enhance that receptor’s response to its endogenous ligand (or endogenous agonist). GABAA PAMs bind to a distinct site from endogenous GABA, an allosteric binding site, and do not activate the receptor in the absence of the GABA. Allosteric modulators are believed to have improved safety profiles and are less likely to result in tachyphylaxis, or decreasing drug response, as compared to agonists. GABA exerts its effects through binding to two types of GABAA receptors, synaptic and extrasynaptic receptors, which differ in their protein subunit composition, physical location on the cell surface and functional role in modulating neuronal circuits.

GABAA receptors are composed of five subunits which include two alpha, two beta and a fifth subunit (either gamma or delta) that is dependent on the type of receptor. Synaptic GABAA receptors, which are located in the synapse of neurons, contain a gamma subunit while GABAA receptors located outside of the synapse, referred to as extrasynaptic GABAA receptors, contain a delta subunit. Molecules that act as PAMs of only the synaptic GABAA receptor, such as benzodiazepines, bind to sites situated at the interface between the alpha and gamma subunits. Molecules that act as PAMs of both synaptic and extrasynaptic GABAA receptors, such as the NAS allopregnanolone and PRAX-114, bind to sites situated at the interface between the alpha and beta subunits present in both types of receptors. Figure 1 below displays the synaptic binding site for drugs such as benzodiazepines, and the distinct extrasynaptic and synaptic binding sites for NAS, such as allopregnanolone and PRAX-114.

Figure 1. GABAA synaptic and extrasynaptic receptors differ in structure and function.

Synaptic and extrasynaptic GABAA receptors have distinct functions. Synaptic GABAA receptors are responsible for short-lasting, or phasic, inhibition of neurons in response to GABA release at the synapse. By contrast, extrasynaptic GABAA receptors drive continuous, or tonic, low-level inhibition of neurons in response to lower ambient levels of GABA outside of the synapse. While synaptic receptors can respond quickly to stimulation and network demand, extrasynaptic receptors have a broader modulatory role, serving to continuously modulate the overall excitability of neurons.

Molecules that act as PAMs of only the synaptic GABAA receptor, such as benzodiazepines and barbiturates, are used for sedation, sleep induction and anxiolysis, and have anticonvulsant and muscle relaxant properties. These drugs have potent and rapid onset of activity but have not demonstrated antidepressant effects.

Allopregnanolone is an endogenous neuroactive steroid and a PAM of both the extrasynaptic and synaptic GABAA receptors, which has been associated with antidepressant activity. However, allopregnanolone also has

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shown significant dose-limiting sedative activity, which we believe is likely mediated at least partially by its effects on synaptic GABAA receptors. Despite this limitation, a formulation of allopregnanolone has been approved and is marketed as ZulressoTM to treat post-partum depression.

The distinct effects mediated by these classes of GABAA PAMs suggest that modulation of extrasynaptic GABAA receptors is responsible for the antidepressant effects demonstrated by allopregnanolone. One of the goals for a next generation neuroactive steroid, such as PRAX-114, is to preferentially modulate extrasynaptic GABAA receptors while minimizing the sedative impact from modulation of synaptic GABAA receptors.

PRAX-114 preference for extrasynaptic GABAA receptors

In preclinical studies, we assessed the relative potency in-vitro of PRAX-114-mediated GABAA receptor activation for synaptic and extrasynaptic receptors by measuring the peak current induced by a low concentration of GABA (2 μM) in the presence of increasing concentrations of PRAX-114 in Chinese Hamster Ovary, or CHO, cells expressing either extrasynaptic (α4ß3δ) or synaptic (α1ß2γ2) human GABAA receptors. In this model, PRAX-114 potentiated the GABA-activated current of both extrasynaptic and synaptic GABAA receptors but was approximately 6.4-fold more potent in potentiating the extrasynaptic form of the receptor than the synaptic form based on the concentration that gave half-maximal response, or EC50. At a concentration that activated extrasynaptic GABAA receptors to the equivalent of full activation by the endogenous ligand GABA (~260 nM, 300% potentiation of 2μM GABA), PRAX-114 led to 10.5-fold greater potentiation of extrasynaptic GABAA receptors than synaptic GABAA receptors (29%).

In the same assay, at the same level of extrasynaptic GABAA receptor potentiation (300%), other GABAA receptor PAM NAS in development, or on the market, demonstrated only 0.4 to 2.6-fold greater potentiation of extrasynaptic GABAA receptors, which compares unfavorably to the 10.5-fold observed for PRAX-114. Based on these assay conditions, we believe that the differentiated preference at extrasynaptic GABAA receptors by PRAX-114 will allow it to achieve high levels of extrasynaptic GABAergic activation with improved tolerability.

PRAX-114 for the treatment of MDD and PTSD

We believe that PRAX-114 has several potential advantages:

•Wider Therapeutic Window. In preclinical studies, PRAX-114 showed approximately 10-fold more selectivity for PAM of the extrasynaptic form of GABAA receptors compared to the synaptic form. In clinical studies in healthy volunteers, we have observed PRAX-114 markedly increased quantitative electroencephalography, or qEEG, power in the alpha and beta-frequency bands—unlike GABAA receptor PAMs that only modulate synaptic GABAA receptors, such as benzodiazepines, or that are equipotent at synaptic and extrasynaptic receptors, such as allopregnanolone, which has been shown to decrease power in the alpha frequency band. We believe these data suggest that PRAX-114 has a differentiated pharmacological profile in relation to other GABAA PAMs at therapeutic doses due to the relatively selective activation of extrasynaptic GABAA receptors. By preferentially modulating extrasynaptic GABAA receptors, we believe PRAX-114 is able to uniquely activate the GABAergic target and has the potential to mediate antidepressant and anxiolytic activity without the significant sedation observed with less selective NAS.

•Simple Nightly Dosing With or Without Food. We believe the ability to administer PRAX-114 and achieve targeted exposures, with or without food, is key for clinical and commercial success in MDD. We believe this type of dosing regimen is also critical for a patient-guided therapy because many patients with depression suffer from appetite disturbances. We have observed fast absorption of PRAX-114 within one to three hours of dosing and predictable PK results across multiple trials. In clinical studies completed to date, PRAX-114 achieved reproducible overall exposure (i.e., area under the concentration curve, or AUC) across a wide range of administration conditions, demonstrating consistent exposure when administered with or without food and at different times of day, whereas other GABAA PAM NAS may require food to achieve therapeutic levels. While AUC is unaffected by administration conditions, nightly dosing has been shown to reduce blunted maximum drug concentration, or Cmax, thereby enhancing the potential for improved tolerability.

•Sustained Administration. After consultation with the FDA and other stakeholders in MDD therapy, we designed the Aria Study to include 28-day nightly dosing to evaluate patients at 14 days to assess the rapidity and robustness of response and 28 days to measure initial durability of effect. We believe that having a dosing paradigm consistent with the duration of depressive episodes and easily integrated into standard clinical practice will provide the most substantial benefit to patients in controlling their disease, further differentiating PRAX-114 from other GABAA PAMs.

PRAX-114 clinical development in depression

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We are conducting a Phase 2/3, placebo-controlled study for monotherapy treatment of MDD, the Aria Study, and expect topline results in the second quarter of 2022.The Aria Study is intended to serve as one of two trials required by the FD, to demonstrate clinical efficacy to support registration of PRAX-114 for monotherapy treatment of MDD. We also are conducting a Phase 2, placebo-controlled, dose-ranging study for treatment of MDD, the Acapella Study, and expect topline results in mid-2022. The Acapella Study is intended to provide additional understanding of the dose range and to evaluate the safety and efficacy of PRAX-114 at doses of 10, 20, 40 and 60mg.

Phase 2/3 Aria Study

Patients in the Aria Study are randomized 1:1 to receive nightly bedtime doses of 40mg PRAX-114 or placebo for 28 days in a fully outpatient setting, with two-weeks of additional follow up after the end of the active treatment period.Patients are required to be between the ages of 18 and 65, have a diagnosis of MDD with a current episode of at least 8 weeks and not more than 24 months in duration, have a HAM-D total score of 23 or higher consistent with moderate-to-severe MDD, and have had at least one prior episode of MDD. Participants are excluded if they are currently being treated with an antidepressant, have demonstrated an inadequate response to antidepressant treatment in the current episode or have treatment resistant depression, or if they have comorbid medical or psychiatric conditions that could interfere with the scientific objectives or safety of the trial.The primary efficacy endpoint is change in the HAM-D total score from baseline at Day 15.A key secondary endpoint is change in the HAM-D score after 28 days of treatment to assess the durability of effect of 40mg PRAX-114, and we also plan to evaluate changes in other depression-related assessments.

We selected a dose of 40mg in tablet formulation for the Aria Study based on the safety and efficacy results we observed from the 45mg suspension formulation in the Phase 2a clinical trial of PRAX-114 described below. We anticipate the 40mg dose in tablet formulation to yield exposures consistently or slightly higher than what we observed with the 45mg dose in suspension formulation.

Our clinical trial design and study conduct applies several best practices to support evaluation of clinical effects in MDD, including but not limited to:

•Enrollment of patients with moderate-to-severe MDD and at least one prior episode of MDD because recurrent depression has been associated with a lower placebo response rate;

•A two-level subject and data quality process that includes independent clinical interviews confirming eligibility through the SAFER process and conducting audio confirmation of HAM-D clinical assessments at key timepoints with ongoing rating assessment quality feedback;

•Using sites with a known track-record of high quality data generation and drug-placebo separation in the conduct of MDD trials;

•Integration of a placebo control reminder script at every visit and screening for potential duplicate subjects via a dedicated clinical trial registry; and

•Inclusion of the AiCure smartphone-based adherence monitoring system with structured site intervention to address participant adherence issues.

Phase 2 Acapella Study

In parallel with the Aria Study, we are conducting the Acapella Study to evaluate additional PRAX-114 doses for inclusion in pivotal Phase 3 studies in patients with MDD. Given that comparable improvement in the HAM-D was observed in all doses (45, 60 and 80mg) evaluated in the Phase 2a MDD study, this trial is designed to evaluate the efficacy of lower doses of PRAX-114 to determine the optimal dose range to include in future Phase 3 trials. The population for this study is both treatment naïve (monotherapy) MDD participants and MDD participants who have demonstrated an insufficient response to standard of care antidepressant treatment (adjunctive).

Patients in this study will be randomized to receive 10, 20, 40, or 60mg PRAX-114 or placebo in a 1:1:1:1:1 ratio for 28 days, with 2 weeks of additional follow up after the end of the active treatment period. This trial is expected to enroll approximately 125 patients between the ages of 18 and 65 who are experiencing a current major depressive episode of at least 12 weeks and not more than 24 months in duration, have a HAM-D total score of 20 or higher, and who have had at least one prior episode of MDD responsive to antidepressant treatment. Adjunctive participants must be currently treated with an antidepressant at a stable dose for at least eight weeks prior to Day 1 and have demonstrated an insufficient clinical response to one or two adequate trials of antidepressant treatment in the current episode. Exclusion criteria will be similar to the Aria Study with the exception of allowing for adjunctive patients under the criteria described above. The primary objective is to assess the presence of a dose-response

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signal for PRAX-114 in MDD using the primary efficacy endpoint of the change from baseline in HAM-D total score at Day 15. Secondary objectives will include evaluating the efficacy for each dose of PRAX-114 in MDD and the effect of PRAX-114 on the HAM-D scores after 28 days of treatment and impact on other depression-related assessments. This trial will employ the full set of clinical trial quality interventions summarized above for the Aria Study.

Phase 2a trial in patients with depression

Prior to the initiation of the Aria Study and the Acapella Study and based on the pharmacology observed in the Phase 1 trials described below, we conducted a three-part, open-label, Phase 2a trial in Australia to assess the safety and efficacy of PRAX-114 in patients with moderate-to-severe MDD or PMD.

Part A results

Part A of the open-label trial included two weeks of treatment and was designed to evaluate the timing and magnitude of the antidepressant effects of PRAX-114 across a range of doses in patients with MDD. Patients were required to be between the ages of 18 and 65 and to have moderate-to-severe MDD for at least one month as defined by a HAM-D score of 22 or higher. The effect of PRAX-114 was measured by the change in the HAM-D score relative to baseline. Patients who had previously failed to respond to a standard of care antidepressant in their current episode were eligible for inclusion. In addition to HAM-D, other scales used included the Montgomery–Åsberg Depression Rating Scale, or MADRS, the Hamilton Anxiety Rating Scale, or HAM-A, and the Symptoms of Depression Questionnaire, or SDQ. MADRS is a 10 item rating scale designed to assess the severity of symptoms in a depressive illness. HAM-A is a 14 item scale widely used to measure the severity of anxiety symptoms, including both psychic anxiety (mental agitation and psychological distress) and somatic anxiety (physical complaints related to anxiety). SDQ is a 44 item self-reported scale designed to measure the severity of symptoms across several subtypes of depression, including irritability, anger attacks and anxiety.

We selected an initial target dose of 45mg daily of PRAX-114 suspension formulation that was expected to achieve exposures demonstrating full clinical improvement based on the Phase 1 data and qEEG findings. Two additional cohorts were subsequently conducted to assess higher daily doses of 60mg and 80mg PRAX-114 due to the generally well-tolerated profile at 45mg. The first week of treatment was conducted in an inpatient setting to facilitate daily efficacy and safety assessments and then patients were discharged and treated as outpatients for the second week. Patients were instructed to take PRAX-114 at 4:00 PM on Day 1 to support collection of post-dose PK samples and then nightly at 9:30 PM on Days 2-14. Patients were not required to take PRAX-114 with food. Compliance was carefully monitored throughout the duration of the trial, including inpatient and outpatient periods, with a customized version of the AiCure smartphone adherence monitoring system.

Thirty-three patients were enrolled and completed Part A before the COVID-19 pandemic began impacting clinical trial conduct globally. At baseline, patients had a mean HAM-D total score of 25, ranging from 20 to 33, consistent with moderate-to-severe MDD. Twenty-six of the thirty-three participants had previously received an antidepressant during the current depressive episode but still had moderate-to-severe MDD. This failure to respond to initial antidepressant treatment has been associated with more severe and refractory depression. The remaining patients were not being treated with any antidepressant for the current episode before enrolling in the trial.

Dosing with PRAX-114 led to a marked improvement in the HAM-D score (Figure 2) within two weeks of treatment. After one week of treatment, least squares, or LS, mean improvements of 15 to 19 points from baseline were noted across the three dose groups. After two weeks of treatment, all 3 dose levels showed improvements from baseline of greater than 13 points with mean improvements from baseline of 14 to 16 points. Across all dose levels, two-thirds of patients were responders (defined as a >=50% reduction in HAM-D) or were clinically in remission (HAM-D<=7) at the end of the 14 day treatment period. Changes in MADRS, HAM-A and SDQ were consistent with the changes in HAM-D. While the study was not powered to show differences between dose levels, there was no notable dose response observed, which is common amongst trials of antidepressants.

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Figure 2. Reduction in HAM-D total score observed in MDD patients treated with PRAX-114 in Part A.

After 14 days of treatment, patients were monitored for an additional 14 days. During this monitoring period, the core mood symptoms measured by the HAM-D generally remained stable with a slight increase in the insomnia item scores post-treatment.

While our Phase 2a trial was not placebo controlled, prior randomized placebo-controlled MDD trials provide important context for the interpretation of the clinical response. The marked improvements in HAM-D scores seen in MDD patients in Part A within two weeks of treatment compares favorably to published reports on changes in HAM-D scale in clinical trials of approved antidepressants such as vortioxetine and duloxetine, among others, which commonly took approximately six to eight weeks to reach a maximal efficacy and often failed to differentiate from placebo at two weeks. Moreover, mean HAM-D changes from baseline at Day 14 for the placebo group of these randomized controlled antidepressant trials were most often between 4-8 points. Even at the first post-dose assessment on Day 3, patients dosed with PRAX-114 had a mean decrease of over 11 points on the HAM-D scale, which compares favorably with the average changes reported in the placebo groups at Day 14 from randomized studies completed for recently approved antidepressants (Figure 3), and other common antidepressants after several weeks of dosing. The clinical data that we have generated to date, and that we expect to generate in the future, from our clinical studies will constitute the bulk of the data needed to support an application for marketing approval of PRAX-114. Unless we conduct head-to-head studies of PRAX-114 against other molecules as part of our future clinical trials and elect to include the resulting data in an application for regulatory approval, we would not expect to rely upon PRAX-114’s potential differentiation from any other molecules in connection with submissions to the FDA or other regulatory agencies, as applicable, for approval or otherwise. As the data presented above is based on a cross-trial comparison and not a head-to-head clinical trial, such data may not be directly comparable due to differences in study protocols, conditions and patient populations. Accordingly, cross-trial comparisons may not be reliable predictors of the relative efficacy or other benefits of PRAX-114 compared to other product candidates that may be approved or that are or were in development for MDD.

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Figure 3. Change from baseline to Day 14 in HAM-D total score for the Placebo arm of selected randomized placebo-controlled studies of recently approved antidepressants. Bubble size is proportional to the sample size of the placebo group in each study. Across studies, the sample size in the placebo group ranged from 89 to 277.

Part B results

Part B of this trial assessed the effect of PRAX-114 on menopausal and mood symptoms in PMD patients. Six participants with PMD received 60mg of PRAX-114 nightly at 9:30PM for 14 days on an outpatient basis. The dose for this part of the trial was selected based on the data from Part A. Inclusion criteria for Part B were similar to Part A and C, except that Part B required participants to be females of 40 years of age or older with irregular menses and a minimum of four hot flushes per day averaged over the week prior to PRAX-114 dosing.

Daily treatment of PRAX-114 in Part B showed a rapid and marked decrease in menopausal symptoms throughout the 14-day treatment period. Treatment with PRAX-114 resulted in mean decreases from baseline at Day 15 of 60% in frequency of moderate-to-severe hot flashes and 68% in the total score of the Perimenopausal Depression Questionnaire, or Meno-D, a 12-item, self-reported questionnaire assessing the presence and severity of symptoms of PMD. At Day 28, two weeks following discontinuation of treatment, frequency of moderate-to-severe hot flashes and Meno-D total score trended toward baseline.

Daily treatment of PRAX-114 in Part B showed a rapid and marked decrease in mood symptoms throughout the 14-day treatment period. Treatment with PRAX-114 resulted in mean decreases from baseline at Day 15 of 47% in the HAM-D total score. Changes in MADRS, HAM-A and SDQ were consistent with the changes in HAM-D, and similar to the observations with hot flushes and the Meno-D, the HAM-D total score trended toward baseline at Day 28, two weeks following discontinuation of treatment.

Part C results

The goal of Part C was to evaluate the safety of four-week outpatient dosing with PRAX-114, similar to the study duration of our ongoing Aria Study, and the treatment effect from Day 15 to Day 28.

Inclusion criteria and symptom assessments were the same as Part A. However, due to restrictions imposed by the COVID-19 pandemic, we changed to the use of telehealth administered clinical efficacy assessments, mailed self-report assessments, and courier delivery of study drug to participants, which supported consistent site and participant adherence to study procedures and study drug administration through completion of Part C. We used our experience from Part C to inform the design and operationalization of the Aria Study.

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A total of thirteen participants were enrolled and completed a nightly 9:30 PM dose of PRAX-114 at 60mg for four weeks. At baseline, patients had a mean HAM-D total score of 25, that ranged from 22 to 30, indicating moderate-to-severe MDD. Eight of the thirteen participants had previously received an antidepressant during the current depressive episode but still had moderate-to-severe MDD. This failure to respond to initial antidepressant treatment has been associated with more severe and refractory depression. The remaining patients were not being treated with any antidepressant for the current episode before enrolling in the trial.

Dosing with PRAX-114 for four weeks led to a rapid and marked improvement in the HAM-D score (Figure 4) within two weeks of treatment, and LS Mean improvement of 11 points at Day 15 remained stable through the end of the active treatment period.

Figure 4. Reduction of HAM-D total score observed in MDD patients treated with PRAX-114 in Part C.

Overall, dosing with PRAX-114 led to a marked reduction in HAM-D score during the treatment periods in Parts A, B and C, with symptom improvement evident upon follow-up in the MDD populations in Parts A and C and trending toward baseline in Part B. Changes in MADRS, HAM-A and SDQ (and menopausal symptom assessments in Part B) were consistent with the changes in HAM-D. More than 70% of participants from all parts of the study had previously received an antidepressant during the current depressive episode but still had moderate-to-severe MDD. We also observed in each part of the Phase 2a trial that greater than 50% of patients were responders at two weeks.

Combined Safety Results Summary (Parts A, B and C)

In the Phase 2a study overall, PRAX-114 suspension formulation was generally well-tolerated across the dose range in 52 participants with MDD and PMD, including at the highest 80mg dose in Part A. Treatment-emergent adverse events, or TEAEs, were generally mild to moderate (Table 5). There were no serious adverse events, or SAEs, and study drug cessation at the end of the treatment period was generally well-tolerated. There was one discontinuation from the study due to AEs in a Part B participant of moderate daytime sedation and mild feeling abnormal. The most common AEs were headache, somnolence, and dizziness.

Rates of somnolence, which is characterized by sleepiness or drowsiness, increased with dose, demonstrating a pharmacological effect which was somewhat mitigated by dosing at night versus the morning. With night-time dosing, 17 out of 52 patients (33%) noted somnolence post-dosing, which was generally time-limited, not experienced during the daytime.

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Preferred Term 45 mg* (N=13) 60 mg (N=32) 80 mg* (N=7) Overall (N=52)

*IncludesparticipantsfromPartAonly.

InPartA,PRAX-114wasadministeredatdaytimeofDay1,nighttimeofDays2-14.

Table 5. TEAEs reported in ≥10% of participants across all parts

of the PRAX-114 Phase 2a study (Parts A, B and C).

Phase 1 trials in healthy volunteers

Phase 1 SAD clinical trial

We conducted a Phase 1 randomized, double-blind, placebo-controlled single ascending dose, or SAD, trial of PRAX-114 suspension formulation in healthy volunteers to evaluate safety and tolerability of PRAX-114. This trial enrolled 36 volunteers who were randomized into cohorts dosed with 1mg, 3mg, 10mg, 30mg or 60mg of PRAX-114 or placebo. In this trial, we observed fast absorption of PRAX-114 within one to three hours of dosing and approximately dose-proportional increases in peak concentration and total drug exposure. PRAX-114 was generally well-tolerated and no SAEs were reported in this trial.

Phase 1 MAD clinical trial

We subsequently conducted a Phase 1 randomized, double-blind, placebo-controlled multiple ascending dose, or MAD, trial in healthy volunteers in Australia to evaluate the safety, tolerability and PK of PRAX-114 suspension formulation and to assess the effect of food on drug exposure. Thirty-six volunteers were randomized to receive daily doses of 15mg, 30mg or 60mg of PRAX-114 or placebo for 14 days. Ten additional volunteers in a food effect cohort received 30mg doses of PRAX-114 when they were in a fasted state or with a high-fat meal.

As part of this trial, we evaluated the effect of PRAX-114 on qEEG to understand the potential pharmacodynamic effect of PRAX-114 on GABAA receptor activation. An EEG is a real-time, non-invasive measure of electrical activity of neurons in the brain. The frequency and amplitude of the detected electrical signals provide insights into brain function and brain state (e.g., awake, deep sleep, etc). qEEG is a quantitative measure of the changes in brain activity in specific EEG frequency bands in response to treatment with a brain-active compound. Changes in power in the beta frequency band, specifically, are used as a pharmacodynamic biomarker of GABAA receptor activation in response to a brain active compound.

In this trial, we observed fast absorption of PRAX-114 within one to three hours of dosing and approximately dose-proportional increases in peak concentration and total drug exposure. The half-life of the drug was between 12.2 and 14.8 hours, consistent with a once-daily dosing regimen. Little or no accumulation of the drug was observed over the ranges of doses tested.

We believe that the potentially simple nightly administration of PRAX-114 with or without food is key for clinical, and, if approved, commercial success in MDD, as many patients struggle with adherence to medication and forcing a dietary regimen would impose further complications in this vulnerable population. In the food effect cohort of the MAD trial, overall drug exposure as measured by AUC of PRAX-114 increased by only 1.17-fold in the fed state versus in the fasted state. The primary effect caused by food intake was observed in the Cmax, which was 0.64-fold of that observed under fed conditions. These findings indicate that PRAX-114 may not need to be taken with food to achieve therapeutic exposures, which we believe could create a potential competitive advantage over drugs that may require administration with food to achieve consistent target exposures, and could allow flexibility to adjust to the comorbid changes in appetite and preferences of MDD patients.

We measured changes in qEEG power in our Phase 1 MAD volunteers to assess the effect of PRAX-114 on GABAA receptors in the brain on Days 1 and 14 of this trial. PRAX-114 produced marked increases in the power of the alpha and beta-frequency bands.Increases in the beta-frequency band are correlated with GABAergic activation, as previously shown by the marketed GABAA PAMs. We believe the qEEG measurements observed for

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PRAX-114 were consistent with its extrasynaptic GABAA receptor preference and differentiated pharmacological profile relative to benzodiazepines and other GABAA PAMs in the class.

Moreover, the increases in alpha and beta-frequency were strongly correlated with dose and PRAX-114 levels in the blood. In these healthy volunteers at one hour post-dose on Day 1, PRAX-114 30mg resulted in an average increase in qEEG alpha and beta power of approximately 1.5-fold and 1.6-fold compared to baseline, and 60mg resulted in an increase in this measure of 2.6-fold and 2.8-fold compared to baseline, respectively (Figure 6). These increases on the qEEG alpha and beta power were sustained at Day 14. These data show that PRAX-114 engaged GABAA receptors in the brain and produced consistent increases on qEEG within the first hour after dosing with similar increases on Days 1 and 14. This finding was also consistent with the pharmacologic activity and qEEG data from our preclinical studies, where a 1.6-fold increase in beta power was associated with robust activity in animal models of anxiety and depression and was used to inform dose selection in subsequent clinical trials. Notably, PRAX-114 showed increases in beta power up to 2.8-fold without achieving a MTD or demonstrating any SAEs.

Figure 6. PRAX-114 (30mg and 60mg) showed a robust dose-dependent qEEG signal and target activation that was sustained over 14 days of dosing.

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In this trial, PRAX-114 was generally well-tolerated, with no SAEs reported. The reported TEAEs were mild to moderate and were consistent with those expected for the potential mechanism of action. The most common TEAE was somnolence, which is characterized by sleepiness or drowsiness, and all events of somnolence were mild in severity. Increases in sleepiness as measured by the Stanford Sleepiness Scale occurred between one- and three-hours post-dosing, consistent with the period of peak drug concentrations; sleepiness ratings at the 60mg dose were similar to placebo within 4 hours post-dose. Other common TEAEs were dizziness and hypoaesthesia, or a diminished sense of touch. TEAEs observed in more than one subject were euphoric mood, hyperhidrosis, or excessive sweating, muscle twitching, skin irritation and fatigue. In the placebo group, we observed fatigue in 22.2% of subjects. TEAEs appearing to be dose-related were somnolence, dizziness headache, euphoric mood and hypoaesthesia. We did not observe a maximally tolerated dose, or MTD. We believe the tolerability results observed of PRAX-114 suggest the potential for a wider therapeutic window, increased adherence and a wider dose range for MDD patients.

Phase 1 pharmacokinetics bridging study

In preparation for our randomized, placebo-controlled trials in MDD, we conducted a clinical PK bridging study in which PRAX-114 was administered as a solid dose (i.e., tablet) formulation in single ascending doses of 40mg, 60mg and 80mg or placebo in seventeen participants and compared to PRAX-114 suspension formulation administered at the 60mg dose. The PK of the tablet formulation was found to be comparable to the suspension formulation at the 60mg dose level. Overall, PRAX 114 showed demonstrated consistent drug exposure across a wide range of administration conditions and demonstrated a consistent AUC when administered with or without food and at different times of day, which we believe could enable once daily administration at bedtime without the need for additional patient instructions.

PRAX-114 clinical development in PTSD

We are conducting a Phase 2, placebo-controlled study evaluating PRAX-114 for the treatment of PTSD and expect to report topline results in the second half of 2022, which will guide decision making for subsequent development of PRAX-114 in the PTSD population.

Patients in the Phase 2 trial will be randomized 1:1 to receive nightly bedtime doses of PRAX-114 or placebo for 28 days in an outpatient setting, with two-weeks of additional follow up after the end of the active treatment period.Dose selection was based on similar considerations to those that informed dose selection for the Aria Study and the Acapella Study. Since it is not known whether there may be dose response differences between MDD and PTSD with this drug mechanism, a flexible-dose approach in the range that showed positive results in the Phase 2a MDD study was included in the design of this study.

Participants treated with PRAX-114 will receive 40mg on Days 1 to 14; on Day 15, those PRAX-114 participants not achieving at least a 20% reduction in PTSD symptoms, as measured by the Clinician-Administered PTSD Scale for DSM-5, or CAPS-5, total score, will receive an increase to 60mg from Days 15 to 28 unless tolerability concerns preclude a dose increase. CAPS-5 is a 30-item structured interview that is the gold standard in PTSD assessment, with versions that can be used to make a current diagnosis of PTSD and to assess PTSD symptoms over the past week. Patients will be required to be between the ages of 18 and 65, have a diagnosis of PTSD with a duration of at least six months, have a CAPS-5 total score of 30 or higher consistent with moderate-to-severe PTSD, and either currently not treated with psychiatric medications or taking no more than one antidepressant within the labeled prescribing dose range for a minimum of three months prior to screening, with the intent to remain on a stable dose throughout the trial. Participants will be excluded if they have comorbid medical or psychiatric conditions that could interfere with the scientific objectives or safety of the trial.The primary efficacy endpoint in this study is the change from baseline in the CAPS-5 total score after 28 days of treatment. A key secondary endpoint will be change from baseline in the CAPS-5 score after 14 days of treatment to assess the rapidity of onset of the treatment effect of PRAX-114 in PTSD.We expect to employ similar clinical trial quality interventions to those summarized above for the Aria Study and the Acapella Study.

PRAX-114 preclinical data

In our preclinical studies of PRAX-114, we evaluated translational pharmacodynamic biomarkers to inform clinical development. In our rat translational biomarker model, we administered PRAX-114 to wild-type rats at doses ranging from 1 to 20mg/kg to assess the impact on power in the beta frequency band. We found that PRAX-114 dose-dependently increased the power in the beta frequency band and these changes correlated with changes in plasma pharmacokinetics. This EEG biomarker was used to inform dose-selection for PRAX-114 clinical studies. In our preclinical studies, doses (and plasma/brain concentrations) that induced a 1.6-fold increase in the beta frequency power in rats were associated with both robust preclinical activity in animal models of depression and

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anxiety and good tolerability. Specifically, the PRAX-114 dose was estimated to induce a 1.6-fold increase in EEG beta power activity in rats led to activity in the rat WKY model of depression and the window between that dose that increased beta power by 1.6-fold increase in EEG and the dose that caused a 50% reduction of spontaneous locomotion in the sLMA sedation assay, or ED50, was ~11-fold, based on brain concentrations. In addition, at this brain concentration, PRAX-114 showed activity and was generally well-tolerated in animal models of anxiety including conditional emotional response, or CER, punished drinking, or Vogel, and elevated plus maze, or EPM (Figure 7).

In the figure below, the lower bound of the preclinical activity in animal models and EEG bars are determined by the brain exposure at the lowest dose at which significant activity was observed (p < 0.05). The lower bound of the tolerability bar represents the TC50 in the brain. The upper bound represents the mean brain concentration at the highest dose tested in a given assay.

Figure 7. Summary of PRAX-114 preclinical data.

MOVEMENT DISORDERS

Our Movement Disorders franchise is currently focused on the two most prevalent movement disorders, ET and PD. We are developing PRAX-944, a potentially differentiated selective small molecule inhibitor of T-type calcium channels, and PRAX-114 for the treatment of ET, with the goal of allowing patients to fit the right therapy to their needs and on an as-needed or chronic basis. ET is the most common movement disorder, affecting up to seven million patients in the United States, and is a disease associated with debilitating action tremors triggered when a patient voluntarily attempts to move. There is a high unmet need for patients given limited treatment options, with only one approved pharmacotherapy that offers limited efficacy and poor tolerability.

For PRAX-944, there is a large body of clinical, preclinical and genetic evidence that points to the involvement of T-type calcium channels in the cerebello-thalamo-cortical, or CTC, circuit, as a main driver of ET. We have designed our development program to include clinical endpoints assessing how a patient feels and functions, a modified release formulation designed to provide a blunted Cmax for tolerability and sustained exposures throughout the day, and dose titration strategy to optimally reach therapeutic levels. We believe the design of PRAX-944, coupled with its modified release formulation, positions it for development as a differentiated therapy in ET. We intend to initiate a registrational study for PRAX-944 for the treatment of ET, pending receipt of positive topline results from the Phase 2b randomized controlled dose-range finding Essential1 Study, which are expected in the second half of 2022. For PRAX-114, the GABA neurotransmitter system is hypothesized to play an important role in ET, and several available treatment options appear to work via GABAergic mechanisms directly or indirectly (primidone, topiramate, propranolol). In the PRAX-114 Phase 2 placebo-controlled, crossover study for the treatment of ET, we intend to evaluate whether there is an appropriate dose of PRAX-114 for daytime administration that enables reduction in tremor without somnolence or sedation that will guide decision making for subsequent development of PRAX-114 in the ET population.

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We are also developing PRAX-944 as a potential non-dopaminergic therapy for PD. T-type calcium channels in the CTC are also implicated in the modulation of motor circuits in PD and there is preclinical evidence which suggests blocking T-type calcium channels may support improvement of motor activity in PD models. We intend to initiate a Phase 2 POC study of PRAX-944 for the treatment of PD in the second quarter of 2022 to evaluate motor function improvement in patients and subsequently determine development and regulatory pathways. Because of the gatekeeper role of T-type calcium channels in regulating neuronal firing patterns in multiple neuronal circuits, we believe PRAX-944 is suitable for potential development across a wide range of indications and potentially sizable expansion opportunities in addition to ET.

For the treatment of ET with PRAX-944, we have evaluated the safety and tolerability in approximately 200 healthy volunteers and patients in seven completed and two ongoing studies. We are conducting the Essential1 Study to evaluate the tolerability, safety and efficacy of PRAX-944 in adults with ET. We have also completed enrollment in a two-part open-label Phase 2a proof-of-concept trial in ET patients. Data from six patients from Part A showed tremor reduction and that PRAX-944 was generally well-tolerated at one and two weeks in patients dosed up to 40 mg once daily, which compared favorably to historical placebo response. Based on the Part A data and the observed safety results in the healthy volunteer titration study, we added a second cohort, Part B, to the Phase 2a trial in which patients are being titrated to a dose of up to 120mg/day of PRAX-944. We have also included a randomized, double-blind, placebo-controlled withdrawal phase to Part B, during which participants will either be maintained on their final open-label dose or switched to placebo. Preliminary open-label data as of December 10, 2021 from nine evaluable subjects in Part B showed favorable trends in tremor reduction and activities of daily living, or ADLs, in doses up to 120mg/day. We plan to report topline results for Part B in the second quarter of 2022, including both open-label and placebo-controlled, randomized withdrawal results. We have also studied the safety of PRAX-944 modified release formulation with titration up to 120mg/day and no MTD has been identified.

We expect to initiate a Phase 2 study evaluating daytime administration of PRAX-114 in ET patients in the first quarter of 2022. The objective of this trial is to evaluate the safety, tolerability, PK and efficacy of PRAX-114 in the treatment of adults with ET. The trial is comprised of two parts: Part A and Part B. Part A is a randomized, double-blind, placebo-controlled, three-period crossover design where all participants will receive a single dose of 10mg of PRAX-114, 20mg of PRAX-114, and matching placebo across three dosing days. Part B is an open-label design where participants from Part A may receive either 10mg PRAX-114 for 28 days, or 10mg PRAX-114 for 14 days and then 20mg PRAX-114 for 14 days. Topline results are expected to be reported in the second half of 2022. The doses of 10mg and 20mg PRAX-114 were chosen based on pharmacological activity observed in clinical trials with healthy participants and clinical experience, to balance the known impact of GABAergic molecules on somnolence and sedation in older patients with ET. Our PK-PD modeling predicts pharmacodynamic activity at concentrations resulting from daily administration of 10 and 20mg PRAX-114, hypothesized to be predictive of efficacy in ET based on preclinical harmaline-induced tremor data. Additionally, data in healthy volunteers at 20mg during the day suggested a tolerable profile when assessed using the Stanford Sleepiness Scale, or SSS. Thus, the selected dose levels present a favorable benefit/risk profile in ET based on the overall interpretation of the preliminary preclinical efficacy data, clinical PK and safety data (including safety AEs, SSS and EEG), qEEG biomarker data, and nonclinical safety data.

Essential Tremor

ET is characterized by involuntary rhythmic movement in the upper limbs, with or without tremor in other body locations such as the head, vocal cords, or legs. ET is a daytime disease associated with debilitating tremors triggered when a patient voluntarily attempts to move. These tremors significantly disrupt daily living and are progressive in nature, with increases in tremor severity and amplitude commonly observed over the course of the disease. ET is a heterogeneous disease with a range of patient characteristics including a variety of comorbidities, range of age, severity, and impact on daily living including psychosocial aspects.

Despite the prevalence and significant disease burden of ET, only approximately two million people in the United States are diagnosed with ET and only approximately one million are actively treated, based on U.S. healthcare claims data as of 2019. We believe that the low treatment rate is due to limitations in efficacy and tolerability of the existing treatment options, and that the treated population could increase with the availability of new therapies with improved efficacy and tolerability that allow for patients to stay on therapy longer and more patients to start therapy sooner. There have been no approved pharmacotherapy products designed to treat ET and the two current products commonly used offer limited efficacy and poor tolerability, resulting in treatment delays and high discontinuation rates. Propranolol, approved by the FDA in 1967, remains the only approved therapy for ET in the United States. A non-selective beta blocker, propranolol is contraindicated for individuals with certain respiratory or cardiac issues, which are common comorbidities in the age group affected by ET. Primidone, an anticonvulsant, is used off-label and can cause sedation and balance issues while accelerating osteoporosis with long-term use.

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As a last line therapy, several thousand ET patients in the United States opt for invasive surgery each year. Interventions include gamma knife and focused ultrasound thalamotomy, where part of the thalamus involved in the CTC circuit is ablated, or deep brain stimulation, or DBS, where an electrode is implanted into the brain. These procedures are generally effective, but are associated with significant side effects and risk. Therefore, many patients who are eligible for surgical therapies elect to not have these procedures.

Genetics of Essential Tremor

Our rationale for approaching ET through inhibition of T-type calcium channels is rooted in the genetics of epilepsy. CACNA1G, a gene that encodes for a particular isoform of T-type calcium channels, is one of the most significantly associated genes for generalized genetic epilepsy, or GGE. Some of these epilepsy patients also suffer from comorbid movement disorders such as tremor and ataxia. The odds of observing a T-type calcium channel mutation in the GGE population is nine times of that of the healthy population. This supports the key role of T-type calcium channels in maintaining excitation and inhibition balance.

Additional human genetic data provide evidence for the role of T-type calcium channels in movement disorders. Whole exome sequencing of early-onset familial ET patients also identified mutations in CACNA1G that segregated with the tremor phenotype in multiple family pedigrees. The importance of T-type Ca++ channels to the function of the CTC circuit is highlighted by variants in the CACNA1G gene which are associated with rare cases of pediatric cerebellar atrophy. Additionally, mutations in the T-type calcium channel have also been reported as causative of a form of spinocerebellar ataxia. We believe this genetic link, along with the preclinical and clinical evidence, support the role of T-type calcium channels in the pathophysiology of ET.

Role of T-type calcium channels in ET

T-type calcium channels function as the gatekeepers of neuronal firing patterns, controlling the switch between tonic and burst firing in the CTC circuit. The CTC circuit is a series of brain nuclei or neuron clusters, including the inferior olivary nucleus, cerebellar Purkinje cells, deep cerebellar nuclei, ventral motor thalamus and motor cortex, which work together in regulating coordinated movements and when disrupted generate tremor. All nuclei in this circuit contain pacemaker cells with inherent burst firing capability and express T-type calcium channels, which are known drivers of oscillatory burst firing.

T-type calcium channels are low voltage activated channels that respond to weak depolarization of neuronal membranes and are quickly inactivated (a closed state where the channel cannot be reopened for some time). The opening of T-type calcium channels leads to membrane depolarization, which activates voltage-activated sodium channels, leading to the formation of an action potential and neuronal firing. When only a small number of T-type calcium channels are activated, leading to small T-type calcium channel mediated membrane depolarizations, the neuron generally generates unitary action potentials, also called tonic firing. When the activity of T-type calcium channels is increased, either due to genetic mutations or other changes in network activity that recruit more T-type calcium channels, a longer lasting depolarization is generated, resulting in high-frequency clusters of sodium channel driven action potentials, also called burst firing, as illustrated in Figure 8 below.

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Figure 8. T-Type calcium channels are gatekeepers of neuronal firing patterns.

Neuroimaging and neurophysiology studies in ET patients have consistently demonstrated that individual nuclei along the CTC circuit oscillate at the same frequency as the tremor and with strong coherence among the brain regions and movement in the affected muscles. Further, intraoperative real-time single-unit recordings of action potentials of individual neurons in the ventral motor thalamus of severe ET patients receiving DBS implants, in periods with and without tremors, further substantiates the central role of the CTC circuit and T-type calcium channels in ET. When no tremor was observed at rest, tonic firing was recorded in neurons of the ventral motor thalamus. During tremor, the same neurons fire in rhythmic bursts that are highly coherent with tremor activity. Furthermore, the emergence of action tremors coincided with the emergence of burst firing. Lesioning or DBS of the ventral motor thalamus has been shown to silence the oscillatory burst firing activity in the CTC circuit, resulting in significant tremor reduction. The strong temporal coordination between the tremors and burst firing, a neuronal firing pattern frequently gated by T-type calcium channel activity, strongly suggest that pharmacological inhibition of these channels may represent an effective pharmacological approach in ET.

Figure 9. Thalamic neuron burst firing correlated with tremor activity in ET patients.

The role of the CTC circuit and T-type calcium channels has been further observed in animal models. A known pharmacological tremor model utilizes administration of harmaline, an alkaloid toxin, to animals. Harmaline, on administration to experimental animals such as rodents, induces an acute action tremor as well as rhythmic burst-firing activity in the CTC circuit similar to that observed in ET patients. We believe this model carries clinically predictive value, as compounds that improve tremor in ET patients clinically (e.g., propranolol, primidone) have also been shown to reduce harmaline-induced tremor preclinically; in contrast compounds that worsen tremor in patients (e.g., caffeine) also worsen tremor in this model. Similar to observations in ET patients, normalizing oscillatory

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activity in the CTC circuit, for example with DBS, reduces harmaline induced tremor in rodents. Pharmacological inhibition or genetic knockout of T-type calcium channels led to resistance to harmaline-induced tremor.

Role of GABAA in ET

The GABA neurotransmitter system is hypothesized to play an important role in ET, and several available treatment options appear to work via GABAergic mechanisms directly or indirectly (primidone, topiramate, propranolol). Studies in patients with ET have shown a reduction in GABA receptor binding capacity using positron imaging that also correlated with disease severity and a loss of GABAergic cerebellar Purkinje neurons in postmortem tissue that contributes to overall reduced inhibitory output from the cerebellum. In animal models of harmaline-induced ET, the hypothesized reduction of GABAergic activity can be reversed with GABAA receptor modulation using benzodiazepines and other compounds that act at both synaptic and extrasynaptic GABAA receptors as well as NAS GABAA-PAMs that activate both synaptic and extrasynaptic GABAA receptors. In addition, extrasynaptic GABAA receptor activation using highly selective agonists like THIP/gaboxadol, has been demonstrated to reduce tremor in the same model. These data suggest that therapeutics that possess preferential extrasynaptic GABAA receptor activity, like NAS, may have greater efficacy in ET than molecules that primarily activate synaptic receptors (e.g., benzodiazepines).

Parkinson's Disease

PD is a debilitating neurodegenerative disorder with about one million diagnosed patients in the United States and about 10 million worldwide. Approximately 60,000 patients are diagnosed with PD each year in the United States alone.

PD is characterized by slow movement (bradykinesia), in combination with either rest tremor and/or rigidity. Symptoms progress over time in severity and eventually affect both sides of the body, often impairing ADLs such as dressing and eating. Non-motor symptoms, such as impaired smell, sleep disorders, gastrointestinal symptoms and psychiatric disorders like depression also play a pivotal role in the daily life of PD patients.

Degeneration of dopaminergic neurons in the mid-brain (specifically pars compacta of the substantia nigra, or SNc) results in loss of dopaminergic output. Thus, the cornerstone of treatment for PD has been dopaminergic replacement therapy. L-dopa, or levodopa, a formulation of replacement dopamine, is considered the standard treatment of PD. Levodopa has been shown to be highly effective in improving symptoms of bradykinesia and rigidity, but has a variable impact on tremor. Other common PD medications mainly reduce dopamine metabolism or are dopamine receptor agonists. As the neuronal degeneration progresses, higher and more frequent levodopa is required due to diminishing responses to dopaminergic medication and an inability to store excess dopamine.

While chronic dopaminergic therapy is effective, it can result in distressing side effects of motor fluctuations (wearing off) and levodopa-induced dyskinesias, impulse control disorders, and psychosis. These side effects are disabling and, at times, more severe and distressing than the PD symptoms themselves. Patients may also opt for a more invasive procedure to deliver continuous dopamine stimulation with levodopa-carbidopa enteral suspension to continuously control motor fluctuations and dyskinesias. Thus, symptom management using non-dopaminergic therapeutics that have a better safety and tolerability profile are needed. Adjunctive therapies that alleviate PD symptoms could also indirectly reduce the need for dose escalations of dopaminergic therapies and thus lower the risk of side effects.

Advanced therapies, such as DBS, can be very effective for treating for tremors and motor complications by modifying basal ganglia function downstream of the nigrostriatal pathway. Depending on the patient’s specific symptoms, DBS electrodes can be placed in either the globus pallidus interna, or gPi, nucleus ventralis intermedius, or VIM, of the thalamus, or the subthalamic nucleus, or STN, and may be affecting aberrant burst firing in these areas.

DBS is typically reserved for those patients who respond to dopaminergic therapy like levodopa but have residual symptons despite best medical management . Further, DBS carries significant risks associated with brain surgery, including intracerebral hemorrhage, infection, hemiparesis and cognitive decline. The prospect of neurosurgery in later years is often overwhelming or contraindicated (e.g., due to presence of cognitive impairment), and many patients are not treated with DBS. Thus, we believe there is a clinical need for a pharmacological therapy that could mimic the effects of DBS and modulate burst firing downstream of SNc.

Role of T-type calcium channels in PD

Animal models and human PD patient data from third-party studies demonstrate that degeneration of nigral dopaminergic neurons converts the subthalamic nucleus, or STN, from a tonic firing to an aberrant bursting phenotype. This bursting activity drove symptoms of bradykinesia and rigidity in animal models and excessive

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activation of T-type Ca2+ channels has been shown to underlie this phenotype. T-type Ca2+ channels are expressed widely throughout the brain, including in the STN. Eliminating this burst firing through blockade of T-type Ca2+ channels has been shown to improve motor function in a 6-hydroxydopamine (6-OHDA) rat model of PD. Thus, we believe an inhibitor of T-type Ca2+ channels could offer a non-surgical and non-dopaminergic treatment option to alleviate motor symptoms in PD.

PRAX-944 in Essential Tremor

We believe that our PRAX-944 program has several potential advantages in development for ET:

•Wide Therapeutic Window: We are currently studying PRAX-944 across a wide range of doses, ranging from 5mg to 120mg. Our goal is to find the appropriate dose(s) to meet the needs of different patients and help address a larger market by tailoring PRAX-944 to the key unmet need in ET as well as individual patient needs. Importantly, no MTD has been identified to date.

•Simple Daytime Dosing: We believe the ability to administer one-time daily dose is important for reducing the burden for ET patients that are treated chronically. These patients are typically older and with multiple comorbidities where simplicity is important when adding medications.

•Modified Release Formulation: We believe that PRAX-944 has the potential to provide a more attractive treatment option for ET patients due to its modified release, or MR, formulation, along with a wide potential therapeutic window that could allow for up-titration. We have observed that the MR formulation, which released approximately 80% of the drug product over seven hours in vitro, reduced the maximum plasma concentration and delayed the tmax without meaningfully impacting the overall AUC. We have also observed that this formulation resulted in improved tolerability relative to an immediate release, or IR, formulation and sustained targeted concentrations throughout the day.

PRAX-944 clinical development in ET

Phase 2b Essential1 Study in patients with ET

We are conducting the Essential1 Study to evaluate the safety and efficacy of titration to PRAX-944 20mg, 60mg or 100mg with the objective of identifying the dose for a registrational study. Participants in the Essential1 Study will be randomized to receive either 56 days of treatment with one of three PRAX-944 dose levels or placebo every morning. Fixed titration regimens will be used. The primary objective of this trial is to assess for the presence of a tolerability dose-response signal over 56 days of dosing in ET participants with moderate-to-severe tremor. A secondary objective is to identify a potential dose-response profile for PRAX-944 with respect to efficacy outcomes. This trial will also assess innovative approaches to objectively measure tremor in ET participants and will include a sub-study with a wearable device. Together, these data, if supportive, are expected to enable dose selection for subsequent Phase 3 trials. Topline data from this trial is expected to be reported in the second half of 2022.

Phase 2a trial in patients with ET

We are currently in the second of two cohorts of our Phase 2a POC open-label trial evaluating safety and efficacy in patients titrated up to 120mg per day. In the first cohort, Part A, participants received 20mg daily dosing of PRAX-944 for one week followed by 40mg daily dosing for the second week, taken in the morning. We have completed enrollment in an additional cohort, Part B, of ET patients dosing up to 120mg for up to 42 days.

We are measuring changes in tremor with different, complementary approaches including components of the Essential Tremor Rating Scale, or TETRAS, Performance Scale and accelerometry. We are using change from baseline in the rating of upper limb, or UL, items of the TETRAS as the primary efficacy outcome in this proof-of-concept trial because all ET patients suffer from UL tremor. As the UL items drive most of the score on the overall TETRAS and are more reliably rated than other items on the scale, we expect them to have the best signal to noise ratio. UL items have also been the basis of the most recent regulatory approval of neurosurgical treatments for severe ET. We have established rigorous procedures for training and for blinded scoring of efficacy, including using centralized video assessment as an exploratory endpoint, with randomization of the videos and masking to allow for rating concordance. We have also included the overall TETRAS performance scale, or TETRAS-PS, (both site and central video rating) and Kinesia ONE accelerometer (an objective measure of tremor), clinical global impression of severity and improvement, or CGI-S and CGI-I, respectively, and the patient global impression of change, or PGI-C, as secondary endpoints to assess consistency of response across different endpoints.

In this trial, we are enrolling participants with well-established ET, as defined by the Movement Disorders Society Task Force for Tremor as an isolated tremor syndrome of bilateral UL action tremor with at least three years’ duration. In Part A, tremor severity was evaluated before drug administration, after daily morning dosing of

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PRAX-944 20mg for seven days (Day 7), following daily administration of PRAX-944 40mg for seven additional days (Day 14) and one week after administration of PRAX-944 has been stopped (Day 21). Data available from six participants who completed Part A of the trial and received PRAX-944 doses of 20mg followed by 40mg each for seven days is shown in Figure 10 below. Preliminary site (primary endpoint measure) and central video assessments of participants TETRAS-PS in this cohort showed generally stable tremor severity between screening and baseline visits.The primary endpoint change suggests dose dependent tremor reduction on the TETRAS-UL, and this change was consistent with the central video assessment. Importantly, five of the six participants remained on propranolol in this study, suggesting that PRAX-944 could also be developed as an adjunctive treatment. Similar patterns of improvement were also observed in the full TETRAS-PS, and Kinesia ONE accelerometry scores. The site and central ratings were strongly correlated on the TETRAS-UL and TETRAS-PS with r values of 0.8 and 0.83, respectively.

*As TETRAS PS items are rated on a logarithmic scale, the Weber-Fechner law was used to calculate the percent change in tremor amplitude according to the equation presented in Elble (2018).

Figure 10. Percent change from baseline in tremor amplitude as measured by site ratings of the TETRAS PS and Upper Limb subscale in Part A of the ET OL study (N=6).

In Part A, the dose levels were generally well-tolerated. No SAEs and no severe AEs were observed. The majority of AEs were mild, transient and resolved without intervention. Six out of seven participants completed dosing per protocol. One participant discontinued on Day 8 due to anxiety. This participant was also non-compliant with the protocol, stopping propranolol on Day 3 of dosing without consulting study staff.Due to this protocol deviation which would have impacted this participant’s TETRAS scores, this participant was included in the safety analysis but not in efficacy analysis. No clinically significant ECG or laboratory abnormalities were reported.

We are currently conducting Part B of the Phase 2a clinical trial, titrating up to 120mg in an open-label fashion for 42 days following by a randomized, double-blind, placebo-controlled withdrawal phase, where participants will either be maintained on their final open-label dose or switched to placebo. The goals of the randomized withdrawal are to obtain blinded evidence of any potential effect from the open-label titration and to assess for durability of any such effect. In addition, the TETRAS activities of daily living sub-scale was added to the efficacy endpoints. In December 2021, preliminary data from twelve participants in Part B were presented. Figure 11 shows preliminary open-label data from nine evaluable subjects in Part B demonstrating favorable trends in tremor reduction in doses up to 120mg/day as of December 10, 2021, as measured by percent change from baseline in UL tremor amplitude measured with the TETRAS scale.

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Figure 11. Individual participant percent change from baseline in UL tremor amplitude in Part A (left panel) and the open-label component of Part B (right panel).

Moreover, participants in Part B who had a reduction in their UL tremor as of December 10, 2021 were generally noted to have improvements on the TETRAS activities of daily living subscale (Figure 12). Participants with more severe tremor at baseline generally showed greater improvement in both tremor and ADLs with PRAX-944 treatment, which was consistent with the floor effects seen in the TETRAS scale and challenges with visual estimation of tremor.

Figure 12. Individual participant percent change from baseline in UL tremor amplitude (upper panel) and activities of daily living subscale (lower panel) in the open-label component of Part B.

PRAX-944 was generally well-tolerated with no SAEs and no physical exam, laboratory, ECG or CSSRS abnormalities as of December 10, 2021. In Part B, one participant discontinued at 20mg due to an AE, one participant withdrew after Day 21 assessment at 40mg due to an AE, and two participants at the same site discontinued at 20mg but had protocol violations related to eligibility. Additionally, in Part B, there were four AEs leading to dose down-titration. TEAEs leading to dose down-titration or discontinuation were mild-moderate. Participants not tolerating dose escalation have been able return to a lower dose level and continue the study.

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Phase 1 trials in healthy volunteers using MR formulation

We conducted a Phase 1 multiple dose trial of the MR formulation of PRAX-944 in England. Doses of 20mg and 40mg were generally well-tolerated over 8 days. AEs were transient and occurred at a rate similar to placebo. The most common TEAEs were somnolence, headache, dizziness, fatigue, hot flashes, and nausea. We also observed ECG application site rash, EEG application site skin reaction, blurred vision, thermal burn (accidental), euphoric mood, vomiting, and dry throat. All TEAEs were mild to moderate.

A single dose of 60mg was not tolerated in the single dose trial due to reports of nausea in five of six subjects and vomiting in three of six subjects. In the multiple dose 20mg and 40mg groups, three subjects reported nausea with one subject also reporting vomiting; these events were mild in severity and resolved on Day 1 of dosing. No subjects reported nausea or vomiting after Day 1 of dosing. While a single dose of 60mg was not well-tolerated, the average peak drug levels (138ng/mL) observed in the 40mg group after eight days of treatment were greater than those seen with the single 60mg dose (130ng/mL) on Day 1 (Figure 13). Improved tolerability observed at higher concentrations following repeated dosing suggests that titration to higher doses might be a viable strategy to further improve the tolerability profile.

Figure 13. Sustained exposures were observed for the MR formulation of PRAX-944.

Quantitative EEG studies in healthy volunteers were used to assess the pharmacodynamic effect of PRAX-944 on T-type calcium channels in the brain. One frequency band known to be driven by T-type calcium channel activation is the sigma frequency band (11 to 15 Hz) during non-rapid eye movement sleep, or NREM sleep. T-type calcium channels expressed in thalamic neurons are critically involved in the generation and modulation of these rhythmic thalamocortical oscillations during NREM sleep.

In our preclinical studies, dosing of normal rats with PRAX-944 led to robust and dose-dependent changes in EEG activity. Because similarly robust sigma frequency band changes after dosing with PRAX-944 were observed during NREM sleep in rats and humans, our hypothesis is that the inhibition of this EEG signal can be used as a pharmacodynamic biomarker. Because the doses at which EEG changes observed in rats were similar to those that demonstrated activity in a preclinical model of essential tremor, or the harmaline model, we believe that this EEG biomarker can be used to estimate the dose of PRAX-944 that we believe will be most likely to produce a therapeutic effect in patients with ET.

In our Phase 1 trial, 20mg and 40mg doses of PRAX-944 administered to healthy volunteers produced changes in the qEEG recordings of the sigma frequency band during NREM sleep consistent with those observed in rats (Figure 14). These results suggested that PRAX-944 reached target levels in the brain needed to inhibit T-type calcium channels. Based on the overlap of these EEG changes with drug levels showing activity in the preclinical harmaline model, we believe that 20mg and 40mg doses of PRAX-944, which were generally well-tolerated in healthy volunteers without titration, have the potential to reduce tremor in patients with ET.

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Figure 14. Exposures of PRAX-944 that decreased sigma band activity were generally well-tolerated in healthy volunteers and were associated with harmaline tremor reduction.

Titration trial in healthy volunteers

Considering that improved tolerability is the key unmet need in ET and that existing data suggest that titration is a viable strategy to improve PRAX-944’s tolerability, we explored titration in a two-part healthy volunteer study. In Part A, a 5mg PRAX-944 tablet was assessed for low-dose pharmacodynamic effects in an open-label titration paradigm from 5mg up to 20mg daily. In Part B, PRAX-944 was titrated from 20mg up to 120mg daily, to assess the safety, tolerability and pharmacodynamic activity of higher doses. Participants were randomized to PRAX-944 or placebo in a 3:1 ratio, starting at 20mg daily in the morning and titrated at 20mg increments up to 120mg daily with up to one week in between each dose increment to achieve steady-state plasma concentrations and for the collection of safety data. The total dosing duration was 31 days.

The safety data demonstrated that with titration, PRAX-944 was generally well-tolerated up to 120mg daily. There were no SAEs and no severe AEs. The majority of AEs were mild, transient and resolved without intervention (Figure 15). There were no treatment-related ECG or EEG abnormalities. Safety laboratory values were generally within normal limits and there were no dose dependent excursions from the normal range. One of 12 participants randomized to PRAX-944 discontinued due to a TEAE. This participant dropped out after one dose (20mg) due to symptoms the participant described as similar to a prior panic attack (not reported at screening). Vital signs, physical examination, clinical laboratory tests, and ECG parameters were all within normal limits for this participant. The symptoms self-resolved.

Importantly, no MTD was identified. Analyses showed pharmacodynamic changes consistent with those seen in the previous Phase 1 trial described above, and showed similar changes in sigma EEG power during NREM sleep across the dose range up to 120mg/day (Figure 16).

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Figure 15. TEAEs Occurring in at least two participants in a dose group or overall.

Figure 16. Dose and concentration dependent pharmacodynamic effects on sigma band (11-15 HZ) EEG power in the PRAX-944-105 study.

Phase 1 study to explore shorter titration schemes

We completed a single-center, multi-part, Phase 1, randomized, double-blind, placebo-controlled clinical trial in which we assessed the safety, tolerability, and PK of a more rapid PRAX-944 titration scheme up to 120mg in healthy male and female participants aged 18 to 54 years (Part A) and 55 to 75 years (Part B). We observed no new safety signals and PK results were consistent with what we previously reported.

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Preclinical support for advancing PRAX-944

In preclinical studies, PRAX-944 inhibited all three human T-type calcium channel isoforms, CaV3.1, CaV3.2 and CaV3.3, and has demonstrated high selectivity against L and N-type calcium channels, or CaV1.2 and CaV2.2, respectively, and other key ion channels important for normal physiology, such as the cardiac potassium channel human Ether-à-go-go-Related Gene, or hERG, and the voltage gated sodium channel NaV1.5. Robust selectivity and potency have been demonstrated across both exogenously expressed recombinant channels in a human cell line and naïve channels in isolated dorsal root ganglion, or DRG, neurons from rats using electrophysiological techniques.

Consistent with the gatekeeper role of T-type calcium channels in neuronal firing patterns, a gain of function mutation of the T-type calcium channel CaV3.2 leads to pathological burst firing in thalamic neurons in a rat model known as the GAERS model. Administration of PRAX-944 resulted in complete suppression of the pathological burst-firing in thalamic neurons derived from the GAERS model.

We evaluated the therapeutic potential of PRAX-944 to treat ET using the harmaline-induced tremor model in rats. Administration of harmaline triggers ET-like tremors in experimental animals as well as pathological burst firing throughout the CTC circuit. We observed a large and dose-dependent decrease of harmaline-induced tremor in rats treated with PRAX-944 as compared to vehicle-treated animals, when measured as percent increase of tremor from pre-harmaline baseline. We believe this result served to both support the potential of PRAX-944 in ET and provide independent evidence of the potential role of T-type calcium channels in tremor reduction.

EEG as a pharmacodynamic biomarker for dose selection

PRAX-944 robustly and dose-dependently decreased EEG power in the sigma frequency band during NREM sleep in rats. We believe the effect of PRAX-944 on the EEG observed in rats when dosed with PRAX-944 suggests its potential to mediate the blockade of T-type calcium channels in the thalamocortical circuit, and further suggesting that this result may provide a pharmacodynamic biomarker for PRAX-944. Because the doses at which the EEG changes were observed were similar to those that led to tremor reduction in the harmaline model, we believe that this potential biomarker could be used to estimate a dose that could be effective in treating ET.

EPILEPSY

Epilepsy is a common neurological disorder that affects all age groups, can lead to significant disability and social impact to the patient, family and caregivers, and is characterized by brain excitation-inhibition, or E/I, imbalance. Hyperexcitability can lead to abnormal synchronization of neurons and neuronal circuits, which is the electrical basis of a seizure. It is estimated that over 70 million people are living with epilepsy globally and a significant number of them are refractory to current pharmacotherapy. In the United States, the number of people living with epilepsy is estimated to be approximately three million, of which approximately 30% are characterized as refractory to treatment despite the availability of over 20 antiseizure medications.

The mechanisms of action for most of the currently available epilepsy treatments are poorly understood. Nevertheless, fundamentals of brain electrophysiology and mechanisms dictating seizure genesis are conserved across species and, consequently, animal models of seizures and epilepsy enable a clinically predictive and therefore efficient drug development path in this therapeutic area. Moreover, the existence of rapid POC clinical designs and established regulatory pathways for epilepsy drug approvals, together with the significant unmet need, make the epilepsy market attractive.

Recent investigations have led to the identification of over 500 genes that are causal or present risk factors for different forms of epilepsy. We believe this understanding unlocks opportunities for disease mechanism-targeted drug discovery that can more precisely meet the needs of people with epilepsy by addressing such fundamental mechanisms. We have utilized this approach to identify genes that are well-positioned to impact not only rare epilepsies but also the more common forms of epilepsy, as well as other CNS conditions. Our pipeline is being developed in recognition that through better understanding of validated targets, we may be able to maximize the impact our product candidates have on people with epilepsy, mood disorders, movement disorders and potentially other excitability disorders. Discovery and development for rare epilepsies is therefore a key driver and catalyst for optimization of our pipeline and meeting the needs of the broader CNS patient populations we seek to serve.

Underpinning this approach is continual assessment and evaluation of computational, discovery, development, formulation and delivery technologies that can further optimize the speed and quality of the delivery of our pipelines. Whether through in-house developments or via key strategic collaborations, we will explore ways to enhance successful delivery of new products to market and do so time and time again.

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A subset of epilepsy, DEEs, are rare neurologic diseases characterized by early onset (< 2 years of age), frequent seizures, abnormal epileptiform electroencephalographic activity, developmental impairment and resistance to available antiepileptic drugs. Furthermore, DEEs are associated with a high mortality rate and comorbidities such as developmental delay in addition to behavioral disorders, movement disorders, pain and sensory dysfunction and sleep disruptions. The understanding of the etiology of DEEs has been revolutionized by recent whole-exome sequencing initiatives that showed over 60 genetic causes of epilepsy. An underlying pathologic feature of many DEEs is the dysregulated neuronal activity leading to hyperexcitability, seizures and associated comorbidities. This phenomenon is observed in many pediatric DEEs with an identified genetic cause, such as SCN8A, SCN2A, KCNT1, KCNQ2, KCNQ1, STXBP1 and SYNGAP1, as well as epilepsies in which a genetic cause remains unclear, such as Lennox Gastaut Syndrome, or Doose Syndrome. Up to 40% of DEEs are caused by single gene mutations, enabling precision medicine approaches. Given the overlapping biology, phenotypic presentation and clinical execution considerations, we believe that developing a portfolio of drugs to treat DEEs will create a distinct body of knowledge and operational synergies across our rare disease portfolio, positioning us as a leader in developing meaningful therapies for this group of patients with devastating unmet clinical needs.

Within our Epilepsy franchise, we expect to initiate a Phase 2 study with our third clinical-stage candidate, PRAX-562, in patients with rare pediatric DEEs in the second quarter of 2022. Our lead product candidate to treat epilepsy is PRAX-222, an ASO designed to lower the expression levels of the protein encoded by the gene SCN2A in patients with GOF mutations in SCN2A, the underlying cause of SCN2A-GOF DEE. PRAX-222 has completed IND-enabling toxicology studies, and we expect to initiate a seamless study in the second quarter of 2022. In January 2022, we exercised our option to in-license PRAX-222 from Ionis Pharmaceuticals, Inc., or Ionis.

We intend to develop PRAX-628, a small molecule with unique NaV channel binding kinetics that favor inhibition of pathological neuronal activity underlying aberrant brain function, such as that seen in our initial indication of focal onset seizures. We anticipate use in other common forms of epilepsy and CNS excitability disorders more generally. PRAX-628 is currently in IND-enabling toxicology studies.

We have also entered into a research collaboration with The Florey Institute of Neuroscience and Mental Health to develop three novel ASO therapies for the treatment of patients with SCN2A loss-of-function, or LOF, mutations and two additional rare epilepsy targets, SYNGAP1 and PCDH19. We believe this collaboration positions us at the forefront in rare epilepsy drug development with six distinct programs for the treatment of six different rare epilepsies.

PRAX-562

Standard of care sodium channel blockers, such as Tegretol (carbamazepine), Lamictal (lamotrigine), Dilantin (phenytoin) and many others are an important class of medicines in neurology and psychiatry. All standard of care sodium channel blockers modulate neuronal activity by targeting peak sodium current, which can reverse the pathological neuronal hyperexcitability that underlies many CNS conditions, but simultaneously affects the physiological cellular action potential firing required for a functioning nervous and cardiovascular system. Hence, this class is widely used for the treatment of epilepsy, pain, migraine and bipolar disorder. However, the efficacy of sodium channel blockers is generally limited by side effects, many attributable to on-target toxicological effects.

PRAX-562 is a preferential, persistent sodium current blocker that is designed to reduce pathological neuronal hyperexcitability and to provide an improved tolerability profile. PRAX-562 is in development for the treatment of a broad range of rare, devastating CNS disorders, such as severe pediatric epilepsies and adult cephalgias. We are pursuing proof of concept clinical data in a subset of rare cephalgias, initially Short-lasting Unilateral Neuralgiform headache attacks with Conjunctival injection and Tearing, or SUNCT, Short-lasting Unilateral Neuralgiform headache with Autonomic symptoms, or SUNA, and Trigeminal Neuralgia, or TN.

We completed a Phase 1 trial of PRAX-562 in Australia to evaluate the safety, tolerability, PK and effects on an exploratory EEG biomarker in up to 129 adult healthy volunteers. We completed the dosing and safety follow-up period for the single ascending dose and multiple ascending dose cohorts up to 150mg and 120mg, respectively. PRAX-562 was well-tolerated, with no clinically significant safety findings. In this study, we used auditory steady state response, or ASSR, as an exploratory EEG biomarker to determine the doses required to achieve pharmacological blockade of persistent sodium current, which we believe is a potential indicator of efficacy in patients. Dose-related changes were observed in the ASSR biomarker with a reduction of greater than 50% in Phase Locking Factor, or PLF, after 14 days of daily dosing of PRAX-562 (120mg), as compared to baseline. These data suggest that PRAX-562 appeared to be achieving brain exposures needed to modulate cortical E/I balance.

Based on the observed signal in the ASSR biomarker in the Phase 1 trial, we have started dosing patients in the United States in a Phase 1, placebo-controlled, two-cohort study to further evaluate the observed ASSR signal

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and to evaluate 28-day dosing. We expect to report topline data in the second quarter of 2022. The study is designed to evaluate ASSR as a potential biomarker for the PRAX-562 program to further support selection of doses to evaluate in Phase 2 studies. The clinical development plan for PRAX-562 encompasses exploring the broad potential for the mechanism of action in rare diseases through conducting proof-of-concept clinical trials in rare adult cephalgias, then expanding its development into a range of rare pediatric DEEs.

The FDA granted both orphan drug and rare pediatric disease designations for PRAX-562 for the treatment of SCN2A and SCN8A developmental and epileptic encephalopathies, or SCN2A-DEE and SCN8A-DEE, respectively, and the EMA Committee for Orphan Medicinal Products granted orphan drug designation for PRAX-562 for the treatment of SCN2A-DEE and SCN8A-DEE.

Voltage-gated sodium channels, persistent sodium current and neuronal excitability

Voltage-gated sodium channels, or VGSCs, are transmembrane proteins that are required for electrical signaling and therefore communication in neurons. VGSCs respond to changes in the membrane potential and are tightly regulated by their biophysical properties. Upon opening of VGSCs, sodium ions can move into the cell leading to a depolarization and therefore excitation of the neuron. This sodium current is the initiator and driver of neuronal action potentials, or APs, the primary means of electrical signal propagation along the neuron’s axon.

The family of VGSCs consists of nine highly related isoforms (NaV1.1 – NaV1.9) with differential tissue distributions and functions. NaV1.1, 1.2 and 1.6 are the major sodium channels expressed in the central nervous system.

Isoform Gene Expression

NaV1.1 SCN1A CNS

NaV1.2 SCN2A CNS

NaV1.3 SCN3A CNS/Pancreas

NaV1.4 SCN4A Muscle

NaV1.5 SCN5A Heart

NaV1.6 SCN8A CNS/PNS

NaV1.7 SCN9A PNS

_______________________________

CNS: Central Nervous System, PNS: Peripheral Nervous System

Table 17. Sodium Channel Isoforms and tissue distribution.

VGSCs undergo a structural change that alter their ability to conduct sodium ions (Table 17) and are triggered to open upon excitation, or depolarization, of the cell membrane allowing sodium ions to enter the neuron. Sodium influx further excites, or depolarizes, the neuron, leading to the opening of even more sodium channels. This series of events can lead to a large peak sodium current underlying the initiation and propagation of neuronal action potentials, or APs, the primary means by which neurons propagate information in the nervous system. To prevent overexcitation of neurons, or hyperexcitability in the form of excessive high frequency AP firing, the majority of sodium channels only open very briefly after activation (1-2ms), followed by a refractory period of inactivation or non-responsiveness.

However, at membrane potentials below the AP firing threshold, a small subset of sodium channels can remain open for hundreds of milliseconds, carrying the so-called persistent sodium current. Persistent sodium current is present under physiologic conditions where it modulates excitability of neurons and can be significantly increased in pathologic states (Figure 18).

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Figure 18. Impact of a pathological mutation on sodium channels.

There are currently more than 15 sodium channel blockers in the market commonly used to treat diseases such as epilepsy, bipolar disorder and pain. While standard of care sodium channel blockers, such as carbamazepine, lamotrigine and phenytoin, inhibit persistent sodium current, they likely also block peak sodium current at therapeutic concentrations, which can cause significant AEs such as ataxia, drowsiness and dizziness, and therefore have a very narrow Therapeutic Index, or TI.

Genetics of persistent sodium current

In published whole-exome sequencing studies of diverse patient populations, mutations in all voltage gated sodium channel subtypes have been reported as a likely cause of disease. Furthermore, gain-of-function mutations that are associated with disease can cause an increase of persistent sodium current, raising the idea that this might be a critical driver of hyperexcitability in neurologic disorders.

The specific disease that a patient develops depends on both the sodium channel subtype and where the affected sodium channel is expressed. Gain-of-function mutations in SCN2A, or NaV1.2, and SCN8A, or NaV1.6, two of the major sodium channels in the brain, cause early onset epileptic encephalopathies with frequent seizures and developmental delay. Gain-of-function mutations in NaV1.1, NaV1.4, NaV1.5 and NaV1.7 cause familial hemiplegic migraine, myotonia, cardiac arrythmia and severe pain disorders, based on their primary expression in the CNS, muscle, heart and pain pathways, respectively. These channelopathies demonstrate the important role persistent sodium current plays as a modulator of cellular excitability.

PRAX-562 preclinical data

PRAX-562 preclinical studies were designed to test our belief that the block of persistent sodium current is sufficient to demonstrate robust activity in animal models of hyperexcitation and that the selective block of persistent sodium current over physiological peak current could lead to an improved TI.

Selective inhibition of persistent sodium channels

PRAX-562 showed potent inhibition of persistent sodium current as measured in cell-based assays, in which sodium channel isoforms were heterologously expressed and channel activity was measured via patch clamp electrophysiology. Using electrophysiological voltage protocols, the effect of compounds on a specific channel state (e.g., peak current vs persistent current) can be measured. When compared to other approved sodium channel inhibitors for various neurological indications, PRAX-562 showed hundreds of times greater potency in inhibiting persistent sodium current. PRAX-562 had an IC50 of 141 nM compared to SOC sodium channel blockers lamotrigine and carbamazepine which had an IC50 of 78,530 nM and 77,520 nM, respectively – a potency difference of over 500-fold. PRAX-562 also potently inhibited persistent INa expressed by the SCN8A-DEE mutant hNaV1.6-N1768D (IC50 75 nM). PRAX-562 was ~60 fold selective for inhibiting persistent current over peak current.

The selective block of persistent sodium current reduces neuronal hyperexcitability without affecting the action potential, or AP, amplitude, which is required for normal neuron function. In mouse brain slice experiments, a hyperexcitable state can be mimicked by artificially depolarizing the neuron using the patch clamp method, which elicits high frequency AP firing. PRAX-562 reduced the neuronal AP firing frequency, an indicator of neuronal excitability, without a significant effect on AP amplitude, an indicator of normal neuronal function, suggesting reduction of hyperexcitability without impacting the ability of the neuron to respond to physiologic stimuli. In

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comparison, carbamazepine, a SOC sodium channel blocker, at comparable concentrations (relative to the potency in cells heterologously expressing NaV1.6), excessively decreased AP firing almost completely and reduced the amplitude of APs, indicating impairment of normal function.

PRAX-562 Representative AP Traces Carbamazepine Representative AP Traces

Figure 19. PRAX-562 reduced neuronal hyperexcitability (AP frequency) without impairing normal function (minimal effect on AP amplitude). In contrast, carbamazepine significantly reduced the AP amplitude suggesting impairment of normal function.

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Preclinical in vivo pharmacological activity, tolerability and EEG pharmacodynamic biomarker

We investigated the preclinical activity of PRAX-562 in the maximal electroshock model of epilepsy, or MES model, that has shown good predictive validity for clinical anti-convulsant activity, and compared it to the effects of SOC sodium channel blockers carbamazepine and lamotrigine. To determine how well PRAX-562 was tolerated in this study, we compared its effects on spontaneous locomotor activity, or sLMA, to the effects of carbamazepine and lamotrigine.

PRAX-562 was able to block seizures completely in mice at a dose that did not impair locomotor function (10mg/kg). In contrast, carbamazepine and lamotrigine only achieved full block of seizures in this model at doses that also showed impairment of locomotion. PRAX-562 at a dose of 2mg/kg (concentration in brain of 116ng/g and plasma of 90.1ng/mL), inhibited the epilepsy response to half of its maximum value, or ED50. Inhibition of sLMA required an estimated dose of 44mg/kg (concentration in brain of 1,899ng/g and plasma of 1,553ng/mL), to obtain 50 percent inhibition, or TD50.

Figure 20. Doses of PRAX-562 resulting in potent anticonvulsant activity were associated with minimal effects on general locomotor activity.

We calculated the TI of each molecule as the preclinical tolerability/pharmacological activity ratio. This ratio is calculated by dividing the plasma and brain concentrations at the dose that reduces locomotion by 50% by the concentrations that reduce seizures by 50%. We found that PRAX-562 had a significantly improved TI of ~16 fold (based on brain concentrations) and ~17 fold (based on plasma concentrations) compared to the currently prescribed sodium channel blockers carbamazepine and lamotrigine, which had a much lower protective index of three to six-fold. Notably, standard sodium channel blockers, such as carbamazepine and phenytoin, show severe toxicity in humans at exposures that are only about 1.5 to 3 times the target therapeutic exposures, underscoring the need for modulators of sodium channels with an improved tolerability.

The ASSR is a non-invasive EEG measure of E/I balance in the brain. This response is elicited with short lasting (2sec) auditory stimuli that lead to brain activity changes that are measured as a 40Hz EEG signature and depend on network activity between excitatory and inhibitory cortical neurons. We believe that persistent current block has the potential to lead to reduced excitability of the network and will be measurable with this endpoint.

Consistent with this hypothesis, dosing normal mice with PRAX-562 led to a dose-dependent decrease in the ASSR amplitude (40Hz power). This decrease was greater at doses that showed robust anticonvulsant activity in the maximal electroshock model.

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Figure 21. PRAX-562 dose-dependently reduced the 40Hz EEG power of the auditory steady state response in mice.

Together, our data suggest that PRAX-562 selectively affected hyperexcitable states without affecting normal neuronal function, which led to the robust preclinical reduction of seizures and improved tolerability in animal models. As shown below, exposures of PRAX-562 that led to biomarker change (ASSR amplitude reduction shown in top row) also demonstrated robust anticonvulsant activity (shown in middle row). Moreover, PRAX-562 has shown a ~16.4 fold protective index based on the spontaneous locomotor activity (shown in bottom row). In the figure below, the lower bound of the preclinical pharmacological activity range, EEG and tolerability bars is determined by the brain EC50 (preclinical seizure and ASSR assays) or TC50 (tolerability assay) in a given assay and the upper bound represents the mean brain concentration at the highest dose tested in a given assay.

Figure 22. Summary of PRAX-562 preclinical data.

We believe that the preclinical results for PRAX-562 may support clinical development across several indications caused by underlying hyperexcitability where standard sodium channel blockers have shown efficacy, albeit with limited tolerability, such as rare pediatric epilepsies and cephalgias like SUNCT/SUNA and TN.

Preclinical in vivo pharmacological evaluation in mouse models of SCN2A and SCN8A Gain-of-Function Epilepsy

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PRAX-562 also blocked seizures in two independent transgenic mice strains expressing mutant NaV gene alleles which cause human seizure disorders and encode NaV channels with gain-of-function increases in persistent INa. Transgenic mice heterozygous for Scn8aD/+ (encoding NaV1.6-N1768D) exhibit symptoms observed in the human disease, including spontaneous seizures, audiogenic seizures, and sudden unexpected death. PRAX-562 resulted in dose-dependent inhibition of audiogenic seizures with an ED50 of 3.7 mg/kg (concentration in brain of 120 ng/g and plasma of 114 ng/mL).The Scn2aQ54 mouse line is a model of NaV1.2 gain-of-function where an engineered mutation (GAL879-881QQQ) results in increased persistent INa. Similar to patients, Scn2aQ54 mice exhibit spontaneous early life seizures and premature death. PRAX-562 resulted in dose-dependent reduction of spontaneous seizure frequency in the Scn2aQ54 mice with an ED50 of 0.73 mg/kg (concentration in brain of 51.0 ng/g and plasma of 17.8 ng/mL). These preclinical studies demonstrate a dose-dependent and complete prevention of seizures in two independent mouse models NaV gain-of-function DEE.

Figure 23. PRAX-562 protected against audiogenic seizures

in Scn8a-N1768D (D/+) GOF Mice

Figure 24. PRAX-562 protected against spontaneous seizures

in Scn2aQ54 GOF Mice

PRAX-222

PRAX-222 is an ASO for patients with SCN2A GOF epilepsy. The PRAX-222 program is ongoing under a three-way collaboration with Ionis and RogCon Inc., or RogCon. Under the terms of the collaboration agreement, Ionis was responsible for preclinical and IND-enabling toxicology studies and we are responsible for clinical development and commercialization. PRAX-222 has completed IND-enabling toxicology studies, and we expect to initiate a seamless study in SCN2A GOF patients in the second quarter of 2022. In January 2022, we exercised our option to in-license PRAX-222 from Ionis. The FDA has granted both rare pediatric disease and orphan drug designations for PRAX-222 for the treatment of SCN2A-DEE, and the EMA Committee for Orphan Medicinal Products has granted orphan drug designation for PRAX-222 for the treatment of SCN2A-DEE.

SCN2A is the gene that encodes the voltage-gated sodium channel NaV1.2 that is primarily found in excitatory neurons throughout the brain and which plays a critical role in action potential generation and signaling between neurons. Individuals with gain-of-function mutations in SCN2A develop early-onset epileptic encephalopathy with

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severe seizures that begin within the first month of life that are often refractory to standard of care antiepileptic medications. SCN2A GOF DEE patients also suffer from significant intellectual disability, movement disorders and in some cases early death due to sudden unexpected death in epilepsy, or SUDEP. It is estimated that there are thousands of patients worldwide with gain-of-function changes in SCN2A leading to epileptic encephalopathy.

The PRAX-222 program is designed to directly target the cause of SCN2A disease by down-regulating NaV1.2 expression, an effect that has demonstrated disease-modifying activity in animal models of SCN2A epileptic encephalopathy. In transgenic mice carrying a human SCN2A GOF mutation, we observed a significant, dose-dependent reduction in seizures and increased survival of mice treated with a mouse ASO that is designed to down-regulate SCN2A. The survival benefit from the ASO was maintained with repeat dosing. We also observed survival benefits following administration of a mouse ASO to a group of mice after onset of disease and around the time of onset of mortality. This observation suggests that candidate ASOs of the PRAX-222 program may have the potential to provide clinical benefits for children after disease onset. The ASO-treated disease model animals demonstrated similar behavior and locomotor activity as wild type animals, suggesting SCN2A knockdown was generally well-tolerated and that the potential benefits could extend beyond seizure control alone.

Figure 25. An SCN2A ASO increased survival in a SCN2A gain-of-function mouse model.

KCNT1 Program

We are currently identifying small molecule inhibitors of the sodium-activated potassium channel encoded by the gene KCNT1 for the treatment of KCNT1 GOF epilepsy. Potassium channels encoded by the KCNT1 gene play a key role in regulating neuronal AP firing. Gain-of-function KCNT1 mutations promote neuronal hyperexcitability, resulting in severe early onset epilepsy with continuous seizures and severe developmental delay, affecting thousands of patients worldwide. KCNT1 GOF epilepsy is often refractory to conventional treatment approaches. Anticonvulsants, such as stiripentol, benzodiazepines, levetiracetam and ketogenic diet, have all demonstrated limited efficacy.

Genetically lowering KCNT1 expression in transgenic mice carrying a KCNT1 human GOF mutation has been reported to result in disease modifying preclinical activity including seizure reduction, improved cognitive function and survival benefit. Through chemical optimization of the potency and pharmacokinetic properties of hits from a high-throughput screen, we have identified novel small molecule inhibitors of KCNT1. These inhibitors restored normal action potential firing in-vitro in KCNT1 GOF mutant neurons and reduce seizure and abnormal interictal spikes in-vivo in transgenic mice carrying a KCNT1 human GOF mutation, recapitulating the reported disease modifying preclinical activity demonstrated by genetic tools.

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Figure 26. A KCNT1 inhibitor eliminated the occurrence of seizures in a KCNT1 transgenic mouse model and suppressed interictal spikes (or abnormal electrographic discharges observed between seizures) as detected by EEG

Development options based on ongoing preclinical work are under assessment and we expect to provide an update in the first half of 2022.

COMPETITION

The biopharmaceutical industry is characterized by rapidly advancing technologies, strong competition and an emphasis on proprietary products. While we believe that our technology, knowledge, experience and scientific personnel provide us with competitive advantages, we face substantial competition from many different sources, including large and small pharmaceutical and biotechnology companies, academic research institutions, governmental agencies and public and private institutions.

Any product candidates that we successfully develop and commercialize will compete with currently approved therapies and new therapies that may become available in the future. Key product features that would affect our ability to effectively compete with other therapeutics include the efficacy, safety, convenience, cost, effectiveness of promotional support and intellectual property protection of our products. Our competitors fall primarily into the following groups of treatment:

•GABAA receptor modulator programs in development targeting MDD, including that of SAGE Therapeutics, as well as other programs in clinical development targeting other mechanisms of action and approved therapies such as SSRIs.

•T-type calcium channel inhibitor programs in development targeting ET, including that of Jazz Pharmaceuticals and Neurocrine Biosciences, as well as other programs in clinical development targeting other mechanisms of action and approved therapies, such as propranolol, and off-label therapies, such as primidone.

•Sodium channel blocker or similar programs in development for DEEs, including those of SK-Pharma, Xenon Pharmaceuticals, Neurocrine Biosciences and Stoke Therapeutics, as well as other programs in clinical development targeting other mechanisms of action and approved therapies including other existing ion channel blockers.

•Treatments for TN include anticonvulsive medications, such as carbamazepine as well as various procedures or surgical interventions (vascular decompression or gamma knife). We are not aware of any development programs targeting SUNCT and SUNA, but we may face competition from off-label therapies such as intravenous lidocaine.

Many of our competitors have substantially greater financial resources, expertise and capabilities in research and development, the regulatory approval process, manufacturing and marketing than we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through M&A activity and sizeable collaborative arrangements with established companies.

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INTELLECTUAL PROPERTY

We strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to the development of our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties. We may also rely on trade secrets relating to our proprietary technology platform and on know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of neuroscience that may be important for the development of our business. We additionally may rely on regulatory protection afforded through data exclusivity, market exclusivity and patent term extensions, where available.

Patent expiration dates noted in the following paragraphs refer to statutory expiration dates and do not take into account any potential patent term adjustment or extension that may be available. Depending upon the timing, duration and specifics of FDA approval of our drug product candidates, some of our U.S. patents may be eligible for limited patent term extension. These patent term extensions permit a patent restoration term of up to five years as compensation for any patent term lost during product development and the FDA regulatory review process. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the drug product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a New Drug Application, or NDA, plus the time between the submission date of an NDA and the approval of that application. Only one patent applicable to an approved drug is eligible for the extension and the extension must be applied for prior to expiration of the patent. The United States Patent and Trademark Office, or the USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration

GABAA receptor positive allosteric modulators

We own twelve patent families directed to GABAA receptor positive allosteric modulators. Several patent families disclose and claim salts and polymorphs of PRAX-114, including the current clinical candidate salt. Two patents are granted in the United States (U.S. 10,562,930 and U.S. 10,927,141), and patent applications are pending in other potentially commercially relevant jurisdictions, which expire in 2039. Other patent families are directed to alternative salt forms of PRAX-114 and deuterated forms of PRAX-114, which expire in 2041. Other patent applications cover formulations and processes for making related to PRAX-114, which expire in 2043. Several patent applications covers various methods of use, including treatment of major depressive disorder (the current lead clinical indication,) with PRAX-114, which expire in 2039. Other patent applications are directed to methods of treating various perimenopausal symptoms with PRAX-114 (which expire in 2040); methods of treating mood disorders (including depression) with combinations of GABA-PAMs (including PRAX-114) with NMDA antagonists, NMDA Negative Allosteric Modulators or NMDA partial agonists (which expire in 2040); methods of treating adjustment disorder with PRAX-114 (which expire in 2041); and methods of treating motor disorders (including essential tremor) and musculoskeletal conditions with PRAX-114 (which expire in 2042).

T-type Calcium channel blockers

We own six patent families directed to T-type Calcium channel blockers. One patent family discloses and claims compositions of matter of certain T-type calcium channel modulators, including PRAX-944. This patent family has issued in many major pharmaceutical markets and is pending in others, and expires in 2029. A second family is directed to methods of use of certain T-type calcium channel modulators, including PRAX-944, in treating disease such as epilepsy. This patent family is pending in the United States and expires in 2037. A third patent family is directed to certain pharmaceutical formulations of PRAX-944 and methods of use in treating disorders such as essential tremor. This patent family is pending in multiple jurisdictions of potential commercial interest, and expires in 2029. A fourth family is directed to titration methods of using PRAX-944, and expires in 2041 A fifth patent family is directed to certain analog compounds of PRAX-944, and expires in 2041. The sixth patent family is directed to the adjunctive use of a beta blocker and/or certain anticonvulsants with PRAX-944 and expires in 2043.

Persistent sodium current blockers

We own fifteen patent families directed to persistent sodium current blockers, including a patent family that relates to PRAX-562 and PRAX-1451, two additional patent families that relate to PRAX-562 program, and the remaining patent families related to other persistent sodium current blockers. One patent family discloses and claims certain persistent sodium current blockers, including PRAX-562 and PRAX-1451, and methods of use in treating diseases such as epilepsy (including pediatric epilepsy), as well as migraine and pain. In this patent family, PRAX-562 is covered by a patent that has granted in the United States (U.S. 11,014,931), and patent applications pending in other potentially commercially relevant jurisdictions, which expire in 2039. A second family discloses other persistent sodium current blockers and generically claims PRAX-562, as well as methods of treating diseases such as pediatric epilepsy. This patent family is pending in multiple jurisdictions, and expires in 2037. A third family

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is directed to pharmaceutical formulations of PRAX-562, methods of use in treating diseases such as pediatric epilepsy, cephalgia, SUNCT and SUNA, and methods of making PRAX-562, and expires in 2040. The remaining patent families are directed to other persistent sodium current blockers of various core structures and methods of use in treating diseases such as pediatric epilepsy, expiring between 2037 and 2040.

SCN2A downregulation

We have exclusively in-licensed three patent families directed to our SCN2A program. Two of these patent families are owned by RogCon, and disclose and claim certain antisense oligonucleotides targeting SCN2A and methods of use in treating diseases such as epilepsy, including epilepsy having certain SCN2A mutations. One patent family is pending in the United States, and expires in 2038. A second patent family is directed to methods of treating SCN1A encephalopathy using antisense oligonucleotides targeting SCN2A, and expires in 2039.

The other in-licensed patent family is owned by Ionis, and is directed to compositions of matter of PRAX-222. It includes pending PCT and Taiwanese applications that expire in 2041.

We own two patent families directed to our PRAX-222 program. The first has claims directed to a method of treating SCN2A gain of function neurological diseases using certain antisense oligonucelotides. This patent family is pending in the United States, and expires in 2041. The second is directed to methods of treating SCN2A-related disorders using SCN2A inhibitors and expires in 2043.

KCNT1 blockers

We own eleven patent families directed to KCNT1 blockers including ten families related to our KCNT1 program and one family related to antisense oligonucleotides. Ten patent families disclose and claim small molecule KCNT1 blockers and methods of use in treating diseases such as epilepsy, including epilepsy having certain KCNT1 mutations, and expire between 2040 and 2042. One patent family is directed to certain antisense oligonucleotides and methods of use in treating diseases such as epilepsy, including epilepsy having certain KCNT1 mutations, and expires in 2039.

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