UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
☒ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022
or
☐TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission File Number: 001-36694
Protara Therapeutics, Inc.
(Exact name of registrant as specified in its
charter)
345 Park Avenue South
3rd Floor
New York, NY
(Address of Principal Executive Offices)
10010
(Zip Code)
(646)844-0337
(Registrant’s telephone number, including
area code)
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 $0.001 per share TARA The Nasdaq Capital Market
Securities registered pursuant to Section 12(g)
of the Act: None
Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes
☒ No ☐
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See 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. ☐
If securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to
previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are
restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers
during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As of June 30, 2022, the last business day of
the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’s common stock
held by non-affiliates of the registrant was approximately $19.6 million, based on the closing price of the registrant’s common
stock on the Nasdaq Capital Market on June 30, 2022 of $2.93 per share.
As of March 3, 2023, 11,306,753 shares of the registrant’s common
stock, $0.001 par value, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive
Proxy Statement to be filed with the Securities and Exchange Commission by May 2, 2023 are incorporated by reference into Part III of
this report.
PROTARA THERAPEUTICS, INC.
TABLE OF CONTENTS
FORM 10-K
For the Year Ended December 31,
2022
Page
PART I
Item 1. Business 3
Item 1A. Risk Factors 34
Item 1B. Unresolved Staff Comments 60
Item 2. Properties 60
Item 3. Legal Proceedings 60
Item 4. Mine Safety Disclosures 60
PART II
Item 6. Reserved 61
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 68
Item 8. Financial Statements and Supplementary Data 68
Item 9A. Controls and Procedures 68
Item 9B. Other Information 68
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 68
PART III
Item 10. Directors, Executive Officers and Corporate Governance 69
Item 11. Executive Compensation 69
Item 14. Principal Accountant Fees and Services 69
PART IV
Item 15. Exhibits and Financial Statement Schedules 70
i
PART I
FORWARD-LOOKING STATEMENTS
This Annual Report on Form
10-K, including sections entitled “Business,” “Risk Factors,” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” and other materials accompanying this Annual Report
on Form 10-K contain forward-looking statements or incorporate by reference forward-looking statements. Statements, other than statements
of historical facts, contained in this document, including statements regarding our business, operations and financial performance and
conditions, as well as our plans, objectives and expectations for our business operations and financial performance and condition, are
forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown
risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from
any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify
these forward-looking statements by terminology such as “believes,” “expects,” “potential,” “continues,”
“may,” “will,” “should,” “seek,” “approximately,” “predict,”
“intend,” “plans,” “estimates,” “anticipates” or the negative version of these terms
or other comparable terminology.
These forward-looking statements include, but
are not limited to, statements about:
● expectations regarding the safety and efficacy of our product candidates;
● expectations regarding potential market size;
● developments and projections relating to our competitors and industry;
● our ability to remain listed on the Nasdaq Capital Market, or Nasdaq;
● the impact of government laws and regulations;
● the timing or likelihood of regulatory filings and approvals;
● our ability to protect our intellectual property position;
1
We undertake no obligation
to update or revise any of the forward-looking statements contained in this Annual Report on Form 10-K after the date of this report,
except as required by law or the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. We caution readers not
to place undue reliance on forward-looking statements. Our actual results could differ materially from those discussed in this Annual
Report on Form 10-K. The forward-looking statements contained in this Annual Report on Form 10-K, and other written and oral forward-looking
statements made by us from time to time, are subject to certain risks and uncertainties that could cause actual results to differ materially
from those anticipated in the forward-looking statements, including the risks, uncertainties and assumptions identified under the heading
“Risk Factors” in this Annual Report on Form 10-K.
SUMMARY OF RISKS AFFECTING
OUR BUSINESS
Below is a summary of
the principal factors that make an investment in our securities speculative or risky. This summary does not address all of the risks
that we face. Additional discussion of the risks and uncertainties summarized in this risk factor summary, and other risks and uncertainties
that we face, are set forth in Part I, Item 1A, Risk Factors, and should be carefully considered, together with other information in
this Annual Report on Form 10-K and our other filings with the SEC before making investment decisions regarding our securities.
● We have a limited operating history and have never generated any revenues.
2
Item 1. Business.
Overview
We are a New York
City based clinical-stage biopharmaceutical company committed to advancing transformative therapies for the treatment of cancer and rare
diseases. We were founded on the principle of applying modern scientific, regulatory or manufacturing advancements to established mechanisms
in order to create new development opportunities. We prioritize creativity, diverse perspectives, integrity and tenacity to expedite
our goal of bringing life-changing therapies to people with limited treatment options.
Our portfolio includes two
development programs utilizing TARA-002, an investigational cell therapy based on the broad immunopotentiator, OK-432, which was originally
granted marketing approval by the Japanese Ministry of Health and Welfare as an immunopotentiating cancer therapeutic agent. This cell
therapy is currently approved in Japan and Taiwan for LMs and multiple oncologic indications. We have secured worldwide rights to the
asset excluding Japan and Taiwan and are exploring its use in oncology and rare disease indications. TARA-002 was developed from the
same master cell bank of genetically distinct group A Streptococcus pyogenes as OK-432 (marketed as Picibanil® in Japan and Taiwan
by Chugai Pharmaceutical Co., Ltd., or Chugai Pharmaceutical). We are currently developing TARA-002 in non-muscle invasive bladder cancer,
or NMIBC, and in LMs.
Our lead oncology program
is TARA-002 in NMIBC, which is cancer found in the tissue that lines the inner surface of the bladder that has not spread into the bladder
muscle. Bladder cancer is the sixth most common cancer in the United States, with NMIBC representing approximately 80% of bladder cancer
diagnoses. Approximately 65,000 patients are diagnosed with NMIBC in the United States each year. Very few new therapeutics have been
approved for NMIBC since the 1990s and the current standard of care for NMIBC includes intravesical Bacillus Calmette–Guérin,
or BCG. The mechanism of action of TARA-002 is similar to that of BCG. TARA-002 and BCG are both intravesically administered, elicit
a Th1 type immune response and produce a similar array of locally activated cytokines and immune cells.
We are conducting a Phase 1 dose-finding, open-label clinical trial
to evaluate TARA-002 in treatment-naïve and treatment-experienced NMIBC patients with carcinoma in situ, or CIS, and high-grade papillary
tumors (Ta), known as the ADVANCED-1 trial. In the initial dose escalation phase, or Phase 1a portion, of the trial, patients receive
six weekly intravesical doses of TARA-002. The primary objective of the trial is to evaluate the safety, tolerability and preliminary
signs of anti-tumor activity of TARA-002, with the goal of establishing a recommended dose for a future Phase 2 clinical trial. The trial
is ongoing and we expect data from the Phase 1a portion of the trial in the second quarter of 2023.
We are also pursuing TARA-002 in LMs, which are rare, non-malignant
cysts of the lymphatic vascular system that primarily form in the head and neck region of children before the age of two. In July 2020,
the FDA granted Rare Pediatric Disease designation for TARA-002 for the treatment of LMs and in May 2022, the European Medicines Agency
granted orphan drug designation to TARA-002 for the treatment of LMs. In addition to the clinical experience in Japan, we have secured
the rights to a dataset from one of the largest ever conducted Phase 2 trials in LMs, in which OK-432 was administered via a compassionate
use program led by the University of Iowa to over 500 pediatric and adult patients. We have an open IND for LMs with the Vaccines and
Related Products Division of the FDA, or Vaccines Division. We received feedback from the Vaccines Division on the protocol for our proposed
Phase 2 clinical trial evaluating TARA-002 in LMs. In the second half of 2023 we expect to initiate this Phase 2 single arm, open-label
clinical trial to evaluate the safety and efficacy of TARA-002 in pediatric patients with macrocystic and mixed-cystic LMs. The trial
design includes a safety lead-in phase followed by an expansion phase. We are conducting trial preparation activities and have identified
multiple trial sites.
3
The third development program in our portfolio is intravenous, or IV,
Choline Chloride, an investigational phospholipid substrate replacement therapy initially in development for patients receiving parenteral
nutrition, or PN, who have intestinal failure associated liver disease, or IFALD. IV Choline Chloride has been granted Orphan Drug Designation
by the FDA for this indication and has also been granted Fast Track Designation for the treatment of IFALD. Following a positive end of
Phase 2 meeting with the FDA, we received feedback on the design of the studies necessary to complete a registration package for IV Choline
Chloride for the treatment of IFALD, including a Phase 1 pharmacokinetic, or PK, trial and a Phase 3 clinical trial. Prior to initiating
these clinical trials, we are conducting a prevalence study to enhance understanding of the PN patient population and we plan to use this
information to determine the next steps for the development program. In September 2021, we reported results of the retrospective part
of the prevalence study, which supported the significant unmet medical need in patients dependent on PN who have IFALD. We are currently
conducting the prospective part of the prevalence study, which is a multi-center, cross-sectional observational study to assess the prevalence
of choline deficiency, as well as cholestasis and steatosis, in patients dependent on PN. We expect to have results of the study in the
third quarter of 2023. In April 2022, the U.S. Patent and Trademark office, or USPTO, issued to us Patent No. US 11,311,503 claiming a
sterile aqueous choline salt composition with a term expiring in 2041.
We have devoted substantial
efforts to the development of these programs but do not have any approved products and have not generated any revenue from product sales.
TARA-002 has not yet been approved for use for treatment of NMIBC, LMs or any other indications. We do not expect to generate revenues
in the near-term, if ever. To finance our current strategic plans, including the conduct of ongoing and future clinical trials and further
research and development costs, we will need to raise additional capital. See “Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations—Liquidity and Capital Resources” for additional information about our liquidity
and capital resource needs.
Our Product Candidate Pipeline
The following chart summarizes
the current status of our product candidate pipeline:
* TARA-002 Granted Rare Pediatric Disease Designation for the treatment of LMs
** Granted Orphan Drug and Fast Track Designations by the U.S. FDA
† Phase 1 PK study to be conducted in addition to Phase 3 study
Our Corporate Strategy:
We are an oncology and rare disease company focused on applying modern
scientific advancements to established mechanisms to deliver efficient de-risked clinical programs. Leveraging the drug development and
commercialization experience of our management team, our goal is to build a leading biopharmaceutical company focused on bringing life-saving
therapies to patients with significant unmet needs. Our current key initiatives are listed below:
4
1. Progress clinical program supporting
TARA-002 for the treatment of NMIBC.
Complete the ongoing Phase
1 clinical trial to assess the safety and tolerability of TARA-002 in patients with high-grade NMIBC, involving a dose escalation phase
in which we are evaluating the safety, tolerability and preliminary signs of anti-tumor activity of TARA-002 to determine dosage for
a future Phase 2 clinical trial. We then intend to further assess safety and preliminary signs of anti-tumor activity of TARA-002 in
both BCG-naïve and BCG-exposed NMIBC patients with CIS in an expanded cohort of our Phase 1 and Phase 2 clinical trials.
2. Progress clinical program for TARA-002
in LMs by initiating a Phase 2 clinical trial in patients with macrocystic and mixed-cystic LMs.
Based on the robust dataset for the originator product OK-432 in LMs
and the full Clinical Study Report, or CSR of the randomized Phase 2 clinical trial of OK-432 in LMs led by the University of Iowa, we
are encouraged by the potential for TARA-002 to treat patients with LMs. Following feedback from the Vaccines Division, we expect to initiate
a Phase 2 clinical trial evaluating TARA-002 in pediatric patients with macrocystic and mixed-cystic LMs.
3. Complete prospective prevalence study
of patients receiving PN and who have IFALD to refine a development pathway for IV Choline Chloride.
We are currently conducting
a prospective prevalence study to enhance understanding of the PN patient population and plan to use this information to inform the next
steps for the development program. We received FDA feedback on a potential design of the studies necessary to complete a registration
package for IV Choline Chloride for the treatment of IFALD, including a Phase 1 pharmacokinetic study and a Phase 3 trial. We intend
to use the results of our multinational prevalence study of the PN patient population to inform our strategy for IV Choline Chloride.
4. Explore opportunities to expand our
pipeline of uses for TARA-002 alone and in combination with other therapies.
We are exploring the use
of TARA-002 in combination with other therapies and are working to identify additional opportunities to develop TARA-002 in indications
beyond NMIBC and LMs. We are conducting non-clinical experiments and modeling to better characterize the potential benefits of combination
therapy with TARA-002, particularly in NMIBC. In addition, our leadership team has a strong track record of licensing, acquiring and
optimizing product candidates and we intend to leverage this skill set to identify opportunities for potential combination opportunities
for TARA-002, in NMIBC and other oncology indications. The immunological activity of TARA-002’s originator product, OK-432, has
been effectively interrogated in patients in numerous indications. We plan to continue to carefully evaluate the case reports and the
literature and perform non-clinical characterization studies to better understand the mechanism of action of TARA-002 and its potential
activity in indications beyond NMIBC and LM in which there is unmet need.
Our Pipeline
TARA-002
TARA-002, our lead program,
is an investigational cell therapy developed from the master cell line of the same genetically distinct Streptococcus pyogenes
(group A, type 3) Su strain as OK-432, a broad immunopotentiator marketed as Picibanil® in Japan and Taiwan by Chugai Pharmaceutical.
We are using the same regulatory starting materials as OK-432 and manufacture TARA-002 using an updated version of the same proprietary
processes used to manufacture OK-432. We have designated this product candidate as TARA-002 in order to differentiate the regulatory
path in the United States and other geographies from that of OK-432 in Japan.
We entered into an agreement
with Chugai Pharmaceutical in June 2019, as amended in July 2020, to support our development of TARA-002. The agreement provides us with
exclusive access to certain materials and documents relating to OK-432 including the master cell bank of Streptococcus pyogenes
used in the manufacturing of OK-432. Additionally, the agreement provides technical support during a certain period. We have utilized
the materials, proprietary manufacturing process and technical support provided by Chugai Pharmaceutical to produce TARA-002 at a cGMP-compliant
facility in the United States. Under the agreement with Chugai Pharmaceutical, we have sole responsibility for the development and commercialization
of TARA-002 worldwide, excluding Japan and Taiwan. This agreement is exclusive through June 17, 2030, or following any termination of
the agreement by either party.
5
In Japan, OK-432 is indicated
for: the treatment of lymphangiomas (lymphatic malformations); the prolongation of survival time in patients with gastric cancer (postoperative
cases) or primary lung cancer in combination with chemotherapy; and the reduction of cancerous pleural effusion or ascites in patients
with lung cancer or gastrointestinal cancer respectively, head and neck cancer (maxillary cancer, laryngeal cancer, pharyngeal cancer,
and tongue cancer) and thyroid cancer that are resistant to other drugs.
We plan to pursue development
of TARA-002 for the treatment of NMIBC and LMs initially in the United States, and plan to also seek approval in Europe and other regions
in the future and may also explore additional indications where its utility as an immunostimulant has been hypothesized to be of therapeutic
benefit.
TARA-002 in NMIBC
Disease Overview
Bladder cancer is the sixth
most common cancer in the United States, with NMIBC representing approximately 80% of bladder cancer diagnoses. NMIBC is cancer found
in the tissue that lines the inner surface of the bladder that has not spread into the bladder muscle. There are three subtypes of NMIBC:
Ta (non-invasive papillary carcinoma), Tis (carcinoma in situ or CIS), and T1 (carcinoma invading the lamina propria). Among the types
of NMIBC, Ta accounts for most NMIBC cases (70%), whereas T1 and CIS account for 20% and 10%, respectively.
There are approximately 65,000 incident cases of NMIBC in the United
States every year, and based upon currently available data we believe that approximately 45% (approximately 30,000) are made up of High-Grade
tumor types that are considered higher risk, and therefore candidates for immunotherapies, such as TARA-002. In addition, NMIBC has one
of the highest rates of recurrence with three-year rate estimated at up to 80%.
Treatment
Treatment for NMIBC is typically targeted to reduce unresectable persistence,
recurrence after resection and to prevent disease progression to muscle-invasive bladder cancer. The initial treatment for NMIBC includes
cystoscopy and complete transurethral resection of the bladder tumor (TURBT) for papillary Ta or T1, or biopsy for CIS. A single postoperative
instillation of intravesical chemotherapy is recommended in patients with low risk of progression, and for patients with intermediate
and high-risk disease, a longer course of intravesical therapy is administered. The most efficacious intravesical agent to date has been
BCG, a live attenuated form of Mycobacterium bovis. BCG has been the subject of multiple supply shortages in the US in the past
decade due to the inability to meet demand to treat the large population of patients with NMIBC. There has been a significant increase
in bladder cancer recurrence and progression with an escalated number of patients who require cystectomy. As such, with the current BCG
shortage and limited effective alternate therapies or dosing strategies, there continues to be a significant unmet need for treatment
options for patients with NMIBC.
Clinical Development
We are currently conducting our ADVANCED-1 trial. In the initial dose
escalation phase of the trial, patients receive six weekly intravesical doses of TARA-002. The primary objective of the trial is to evaluate
the safety, tolerability and preliminary signs of anti-tumor activity of TARA-002, with the goal of establishing a recommended dose for
a future Phase 2 clinical trial. The trial is ongoing and we expect data from the Phase 1a portion of the trial in the second quarter
of 2023.
Preclinical Development
We continue to conduct pre-clinical
studies on TARA-002 to better characterize the mechanism of action to help us understand how TARA-002 may perform in potential combinations
with other agents used to treat NMIBC. In addition, we use pre-clinical data to help us define other cancer targets for TARA-002 both
within the urothelial cancer space and other types of cancer affecting different parts of the body.
Regulatory Interactions
In October 2021, we announced
that the Office of Tissues and Advanced Therapies Division, or the OTAT Division, of the FDA’s Center for Biologics Evaluation
and Research, or CBER, cleared our Investigational New Drug, or IND, application for TARA-002 in NMIBC, allowing us to commence our ADVANCED-1
trial. The primary objective of the trial is to evaluate the safety, tolerability and preliminary signs of anti-tumor activity of TARA-002,
with the goal of establishing a recommended dose for a future Phase 2 clinical trial.
6
Manufacturing
We manufacture TARA-002
using an equivalent, but modernized, proprietary manufacturing process as is used to produce OK-432 by Chugai Pharmaceutical, starting
with a master cell line propagated by us but utilizing the same genetically distinct strain of Streptococcus pyogenes (A group,
type 3) Su strain as OK-432. We have contracted a contract development and manufacturing organization, or CDMO, to manufacture TARA-002.
TARA-002 for the Treatment of Lymphatic
Malformations
Disease Overview
We have worked with the FDA to align on a regulatory pathway and development
plan for TARA-002 for the treatment of LMs. The International Society for the Study of Vascular Anomalies classifies LMs as either macrocystic,
microcystic, or mixed-cystic. Macrocystic and microcystic LMs are differentiated by the size of the fluid-containing portion of the malformation.
Macrocystic LMs are characteristically large, fluid-filled cysts with a thin endothelial lining. Macrocystic LMs are composed of cysts
greater than 2 cubic centimeters in size and present as a soft, fluid-filled swelling beneath normal or slightly discolored skin. Macrocystic
LMs are usually located in the antero-lateral cervical region of the neck; however, it is possible for this type of LM to originate in
other areas of the body. In contrast, microcystic LMs have very limited internal space with a thick irregular endothelial lining. Microcystic
LMs are comprised of cysts less than 2 cubic centimeters in size and are often composed of micro-lymphatic channels that integrate and
infiltrate normal soft tissue. Microcystic LMs can involve both superficial and deep aspects including muscle and bone. Microcystic LMs
can thicken or swell causing enlargement of surrounding soft tissue and bones and can be found on any area of the skin or mucous membrane.
Mixed-cystic LMs are comprised of varying degrees of both macrocystic and microcystic LMs.
While the exact prevalence
of LMs is not known, in the United States, the condition is thought to be present in approximately one in every 4,000 live births and
we believe there are approximately 1,400-1,800 LM cases per year.
Treatment
There are no approved pharmacotherapies
for LMs, except in Japan and Taiwan where OK-432 is approved. In these countries, OK-432 has been the standard of care for LMs for over
25 years.
Treatment of LMs varies
depending on the symptoms and complications that present themselves. The standard of care outside Japan and Taiwan for the treatment
of LMs is either a partial or complete surgical excision of the cysts. While surgery is the standard approach to the treatment of LMs
in the head and neck, the region is a difficult area to operate on because of the large number of important anatomical structures in
the area. Major venous and arterial trunks travel through the neck, as do important nerves. Surgery on such malformations frequently
results in high rates of recurrence and complications including life-long chronic conditions, such as damage to nerves and other important
structures of the head and neck.
Clinical Development
Historical Data on OK- 432, predecessor therapy
to TARA-002
When OK-432 is administered
locally for LMs, it is hypothesized that innate immune cells within the cyst are activated and produce a strong immune cascade. Neutrophils
and monocytes infiltrate the cyst and various cytokines, including interleukins IL-6, IL-8, IL-12, interferon, or IFN, -gamma, tumor
necrosis factor, or TNF-alpha, and vascular endothelial growth factor (VEGF) are secreted by immune cells within the cyst in response
to the presence of OK-432. In concert, these immune activities induce a strong local inflammatory reaction in the cyst wall, resulting
in fluid drainage, shrinkage and fibrotic adhesion of the cyst.
7
A randomized, phase 2 clinical trial led by the University of Iowa
studied the use of OK-432 in patients with LM from 1998 to 2005. Most eligible subjects were between 6 months and 18 years of age with
macrocystic or mixed-cystic LMs (with ≥ 50% macrocytic disease) of the head and/or neck. There were three treatment groups: immediate
treatment (ITG), delayed treatment (DTG), and open label treatment group. The immediate treatment group received treatment with OK-432
upon diagnosis. The delayed treatment group received OK-432 treatment following a six-month observation period; the cross-over design
was intended to investigate spontaneous resolution. The open-label treatment group included infants younger than six months of age, adults
older than 18 years of age, patients with LMs involving sites other than the head and neck (such as the axilla, thorax, and extremities),
and patients treated on an emergent basis. The open label treatment group were treated immediately with OK-432. Response to therapy was
measured by quantitating change in lesion size. Clinical success was defined as a complete (90% to 100%) or substantial (60% to 89%) response
to treatment based on radiographically confirmed shrinkage in lesions.
Results presented in this
report were based on a retrospective analysis of source verified data that included the full dataset of subjects enrolled in the Phase
2 randomized clinical trial between January 1998 and August 2005, including data in the published study (Smith et al. 2009) that included
subjects enrolled between January 1998 and November 2004.
Overall, 310 subjects were enrolled with intent to treat: 246 subjects
were randomized to the immediate (ITG, N=171) and delayed (DTG, N=75) treatment groups; 64 subjects were nonrandomized and assigned to
the open-label group. Analysis of the primary efficacy endpoint (N=150) demonstrated clinical success (complete and/or substantial response)
in 69% of patients in the ITG 6 months after enrollment, while 7.5% of patients in the DTG experienced spontaneous regression of a LM
during this time interval (p < 0.0001)). When the results were analyzed by lesion type across all treatment groups, a successful outcome
was observed in 84% and 60% of patients with macrocystic and mixed-cystic LM, respectively. None of the patients with microcystic LM demonstrated
clinical success with OK-432 therapy. The results of the retrospective analysis were consistent with the results observed in the original
analysis (Smith et al. 2009).
Figure 1: 69% of patients in the immediate treatment group had a complete
or substantial response to OK-432, meeting the primary endpoint, while 7.5% of patients in the delayed treatment group had a complete
or substantial response after six months of observation and before treatment.
ǂ Clinical Success was defined as complete or substantial response.
8
Figure 2: patients with radiographically confirmed
macrocystic lesions had the greatest likelihood of clinical success and in those patients with mixed lesions, clinical success was also
present.
ǂ Clinical Success was defined as complete or substantial response.
** Results were analyzed by lesion type across all treatment groups.
TARA-002 Clinical Development
We have an open IND for
LMs with the Vaccines Division. Later in 2023 we expect to initiate a Phase 2 single arm, open-label clinical trial to evaluate the safety
and efficacy of TARA-002 in pediatric patients with macrocystic and mixed-cystic LMs. The trial design includes a safety lead-in phase
followed by an expansion phase. We are conducting trial preparation activities and have identified multiple trial sites.
Historical Safety Profile on OK-432, predecessor
therapy to TARA-002
The most common adverse
events with treatment with OK-432 were local injection site reactions, fever, fatigue, and decreased appetite, with resolution within
two weeks. Treatment emergent serious adverse events or SAEs, (treatment emergent SAEs are defined as any SAE occurring or worsening
on or after the first dose of study drug and within 35 days after the last dose of study drug) associated with OK-432 treatment were
reported in 4.1% of patients, with the most severe events being airway obstruction and facial paralysis due to massive swelling post-injection
that required tracheostomy and hospitalization. Both of these events were reported as resolved.
The safety findings from
the sponsor-conducted retrospective analysis are consistent with the original analysis reported in Smith et al. 2009, and with safety
data in published studies in approximately 865 patients with LMs after treatment with OK-432.
Historical Preclinical Development on
OK-432, predecessor therapy to TARA-002
A comprehensive preclinical
development program for OK-432, including in vitro and in vivo pharmacology and toxicology studies, was conducted by Chugai
Pharmaceutical to support the filing of a NDA with the Japan Pharmaceuticals and Medical Devices Agency. We believe these studies may
help inform the design of a development plan for TARA-002 in LMs.
9
TARA-002 Regulatory Interactions
In July 2020, the FDA granted
Rare Pediatric Disease designation for TARA-002 for the treatment of LMs. The FDA grants Rare Pediatric Disease designation for serious
diseases that primarily affect children ages 18 years or younger and fewer than 200,000 persons in the United States. Under the FDA’s
Rare Pediatric Disease Priority Review Voucher program, a sponsor who receives an approval of a NDA or BLA for a product for the prevention
or treatment of a rare pediatric disease may be eligible for a voucher, which can be redeemed to obtain priority review for any subsequent
marketing application or may be sold or transferred.
The robust dataset for OK-432 in LMs has informed our development of
TARA-002. At the FDA’s request, we submitted the full CSR of the randomized Phase 2 clinical trial of OK-432 in LMs led by the University
of Iowa to our open IND with the Vaccines Division. We received feedback from the Vaccines Division on the protocol for our proposed Phase
2 clinical trial evaluating TARA-002 in LMs. In the second half of 2023 we expect to initiate this Phase 2 single arm, open-label clinical
trial to evaluate the safety and efficacy of TARA-002 in pediatric patients with macrocystic and mixed-cystic LMs. The trial design includes
a safety lead-in phase followed by an expansion phase. We are conducting trial preparation activities and have identified multiple trial
sites.
Manufacturing
TARA-002 is manufactured
using an equivalent, but modernized, proprietary manufacturing process as is used to produce OK-432 by Chugai Pharmaceutical. Starting
with a master cell line propagated by us but utilizing the same genetically distinct strain of Streptococcus pyogenes (A group,
type 3) Su strain as OK-432. We have contracted a CDMO to manufacture TARA-002.
IV Choline Chloride for the treatment of Intestinal
Failure Associated Liver Disease
IV Choline Chloride is an
IV substrate replacement therapy initially in development for patients receiving PN who have IFALD.
Choline is a known important
substrate for phospholipids that are critical for healthy liver function. Because patients receiving PN cannot sufficiently absorb adequate
levels of choline and no available PN components contain sufficient amounts of choline to correct this deficit, they often experience
a prolonged progression to hepatic failure and death, with the only known intervention being a dual small bowel / liver transplant. If
approved, IV Choline Chloride would be the first approved therapy for IFALD. It has been granted ODD by the FDA for the treatment of
IFALD and the prevention of choline deficiency in PN patients. We are currently undertaking a multinational prevalence study to enhance
understanding of the PN patient population. We expect to complete the prospective part of the study in mid-2023.
We have entered into a license
agreement with Dr. Alan Buchman for exclusive rights to the IND, ODD and other regulatory assets related to IV Choline Chloride, as well
as exclusive rights to the data from previously conducted Phase 1 and Phase 2 clinical trials led by Dr. Buchman.
The results of a randomized,
controlled, Phase 2 clinical trial demonstrated that treatment with IV Choline Chloride resulted in normalization of plasma-free choline
concentrations, improvement of hepatic steatosis, and statistically significant improvement in cholestasis in patients dependent on PN.
We had an end of Phase 2
meeting with the FDA in November 2018 and received the FDA’s feedback on the design of studies necessary to complete the registration
package for IV Choline Chloride for the treatment of IFALD, including a Phase 1 pharmacokinetic study and a Phase 3 trial. We intend
to use the results of our multinational prevalence study of the PN patient population to inform our strategy for IV Choline Chloride.
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Disease Overview
IFALD is a rare hepatic/metabolic
disease. IFALD, which occurs in patients dependent upon PN, is characterized by choline deficiency, hepatic steatosis, cholestasis, and
rapid progression of liver disease through to hepatic failure and death, in the absence of intestine-liver transplant. IFALD carries
a relatively poor prognosis, with a 15-34% death rate within one to four years. When IFALD presents in children, mortality is even higher,
with studies reporting death rates of 23-40% within 18 months. A patient is considered to have IFALD if she/he:
Many patients receiving
PN are entirely dependent on PN for their nutritional needs. PN delivers nearly all the macro and micro-nutrients necessary for survival
in their patients, with the notable exception of choline. Consequently, patients dependent on PN support have been shown to be choline
deficient. Patients dependent upon PN are unable to synthesize sufficient levels of choline and malabsorption limits the bioavailability
of choline chloride from the PN diet. The American Society for Parenteral and Enteral Nutrition and the Academy of Nutrition and Dietetics’
Dietitians in Nutrition Support both recommend that choline be developed and routinely included in PN products; however, there are currently
no FDA-approved choline chloride PN products.
Dependence on PN and resulting
choline deficiency often leads to IFALD, which is the most common adverse outcome in chronic PN adult patients that is associated with
death. Low free choline plasma concentrations are associated with alanine aminotransferase, or ALT, aspartate aminotransferase, or AST,
and ALP elevations as well as steatosis (fatty liver) and cholestasis (when bile from the liver stops or slows), all indicators of ongoing
liver damage.
Clinical Development
In a Phase 2 randomized,
double-blind, controlled 24-week clinical trial, patients (n=15) receiving nightly PN for > 85% of their nutritional needs (for at
least 12 weeks prior to entry) were randomized to receive via IV infusion (10-12 hours) their usual PN with placebo (n = 8), or PN to
which 2g IV Choline Chloride was added (n = 7).
In the IV Choline Chloride
group, mean choline levels were within or greater than the estimated normal range (i.e., 6.7 to 26.9 nmol/mL) throughout the 24-week
trial and quickly returned to baseline levels when treatment was discontinued.
Steatosis:
Upon conversion of the quantification
of computed tomography, or CT, values to magnetic resonance imaging proton density fat fraction, or MRI-PDFF, significant differences
in the least square, or LS, mean change from baseline in estimated MRI-PDFF were observed in the IV Choline Chloride group in comparison
to placebo group at Week 4 through Week 24, demonstrating a clinically meaningful and statistically significant reduction in steatosis.
When LS mean percent changes from baseline in MRI-PDFF were compared between treatment groups, significant differences in LS mean changes
(range, 31.7% to 53.6%) were observed from Weeks 4 to 24 with p-values of 0.0009 to 0.0297 favoring the IV Choline Chloride group.
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Figure 3. Liver CT Images: Before and After Treatment with IV Choline
Chloride
Alkaline Phosphatase:
At baseline, LS mean ALP
concentration was 239.3 ± 118.93 in the IV Choline Chloride group and 148.1 ± 100.2 in the placebo group. The mixed model
for repeated measures, or MMRM, analyses demonstrated statistically significant decreases in ALP concentrations at Week 12 (p = 0.008),
Week 16 (p = 0.005), Week 20 (p = 0.007), and Week 24 (p = 0.005) for the IV Choline Chloride group, demonstrating a reduction in cholestasis.
A trend towards significance was observed at Week 4 (p = 0.076) and Week 6 (p = 0.056). At Week 34, 10 weeks after discontinuation of
IV Choline Chloride treatment, LS mean change from baseline in ALP concentrations still demonstrated statistically significant decreases
(p = 0.002), demonstrating a significant improvement in cholestasis with treatment with IV Choline Chloride (Figure 4).
In the subgroup of subjects
with ALP concentration > 1.5x upper limit of normal (ULN) at baseline, (n=7), mean values at baseline were comparable between the
IV Choline Chloride and placebo groups (294.20 ± 87.947 versus 277.00 ± 128.693, respectively). In the sub-group analysis,
improvement in ALP was consistent and substantial, with 20-30% improvement over 12-24 weeks of treatment. Statistical significance was
observed at 12, 16, and 20 weeks.
In the description of the trials above and
elsewhere in this Annual Report on Form 10-K, “n” represents the number of patients in a particular group and “p”
or “p-values” represent the probability that random chance caused the result (e.g., a p-value of 0.001
means that there is a 0.1% probability that the difference between the placebo group and the treatment group is purely due to random
chance). A p-value of less than or equal to 0.05 is a commonly used criterion for statistical significance, and may
be supportive of a finding of efficacy by regulatory authorities.
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Figure 4. Improvement in Cholestasis1: All Patients
1 Protara Therapeutics re-analysis of patient CRF’s, data on file.
* MMRM method used for imputation.
Preclinical Development
Table 1. Preclinical Studies Conducted by us
for IV Choline Chloride
Study Type Brief Description
Evaluation of Transporter Inhibition by Choline Chloride in Caco-2 Cells
Evaluation of Cytochrome P450 Induction by Choline Chloride in Human Hepatocytes
Evaluation of Transporter Inhibition by Choline Chloride in Caco-2 Cells
Assessment of Choline as a Substrate of Human BSEP Mediated Transport
GLP Combined Single-dose IV Neurobehavioral and Respiratory Study
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Regulatory Interactions
We have received feedback
from the FDA on a number of key aspects of the overall clinical program necessary for registration, including a Phase 1 pharmacokinetic
study and a Phase 3 clinical trial. We completed a retrospective, observational study of patients dependent on PN for 6 or more months.
The objective of the study was to understand the incidence of cholestasis, a hallmark pathology of IFALD in this patient population by
measuring serum alkaline phosphatase (ALP) levels greater than 1.5 times the upper limit of normal ULN as a key marker of cholestasis.
Results of the study showed: 31% of all patients, irrespective of baseline levels, presented with ALP levels greater than 1.5 times the
ULN at any given time during 6 to 36 months. In addition, approximately 28% of all patients had persistent ALP elevations greater than
1.5 times the ULN at 36 months. At baseline, approximately 23% of patients presented with ALP levels greater than 1.5 times the ULN with
approximately 76% presenting with greater than 1.5 times the ULN at any given time during 6 to 36 months and approximately 59% with persistent
ALP elevations greater than 1.5 times the ULN at 36 months. While medical management demonstrated some improvement in ALP levels, it
was not sufficient for managing ALP levels over the long term in patients on PN. Results support further exploration in patient population
to determine rates of choline deficiency and steatosis. We have initiated a prospective observational study to further characterize the
prevalence of choline deficiency, as well as cholestasis and steatosis. We plan to use information from this prospective study to determine
the appropriate next steps for the development program.
Manufacturing
Through our CDMO, we have
manufactured sufficient amounts of cGMP drug substance and drug product to initiate the planned clinical trials. Scale up for commercial
demand, if and when applicable, will commence when appropriate. Our end-to-end manufacturing of IV Choline Chloride is conducted in the
United States by a cGMP-compliant CDMO. However, due to current macroeconomic factors, such as rising inflation and supply chain shortages,
scaling up may be more difficult than originally anticipated.
Collaborations and License Agreements
Chugai Agreement
On June 17, 2019, we entered
into an agreement, or the Chugai Agreement, with Chugai Pharmaceutical, a company organized and existing under the laws of Japan. Chugai
Pharmaceutical has developed and commercialized a therapeutic product, OK-432 (or Existing Product), in Japan and Taiwan, or the Chugai
Territory and owns and controls certain materials and documents related to the Existing Product (or the Chugai Materials). Pursuant to
the Chugai Agreement, Chugai Pharmaceutical has provided us with certain materials and documents relating to the Existing Product and
has provided certain technical services to us for our development and commercialization in territories other than the Chugai Territory,
or the Protara Territory of a new therapeutic product, or the New Product or TARA-002 comparable to the Existing Product beginning on
the effective date of the Chugai Agreement and ending on June 30, 2020, or any other date to be agreed to by the parties, or the Chugai
Service Period. Under the Chugai Agreement, Chugai Pharmaceutical will exclusively provide the Existing Product and Chugai Materials
to us and will not provide the Existing Product or Chugai Materials to any third parties during the Chugai Service Period, other than
for medical, compassionate use and/or non-commercial research purposes. Additionally, beginning on the effective date of the Chugai Agreement
and ending on the fifth anniversary of such date or upon the termination of the Chugai Agreement, whichever comes earlier, Chugai Pharmaceutical
will not provide Chugai Materials or technical support to any third-party for the purpose of development and commercialization in the
Protara Territory of a therapeutic product comparable to the Existing Product. We are responsible, at our sole cost and expense, for
the development and commercialization of the New Product in the Protara Territory.
On July 14, 2020, we and Chugai Pharmaceutical entered into an amendment
of the Chugai Agreement, or the Chugai Amendment, with an effective date as of June 30, 2020. The Chugai Amendment extends the date through
which Chugai will exclusively provide the Existing Product and materials to us from June 30, 2020 to June 30, 2021, extends the date through
which Chugai will not provide materials or technical support to any third-party for the purpose of development and commercialization in
a given area from the fifth anniversary to the eleventh anniversary of the original effective date (extended to June 17, 2030), and provides
for further such extensions on the occurrence of certain events and milestones. The Chugai Amendment also provides that, in addition to
the designated fee payable upon the initial indication approval in the Chugai Agreement described below, we will pay Chugai a designated
fee in the low, single digit millions for each additional indication approval.
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As consideration for Chugai Pharmaceutical’s performance under
the Chugai Agreement, we agreed to pay Chugai Pharmaceutical a payment in the low, single-digit millions, which will be made in two installments
with an initial payment made in July 2020, and the remaining majority of the total amount will be payable upon FDA approval of the New
Product.
We granted Chugai Pharmaceutical
a right of first refusal on terms to be negotiated between the parties for a license related to the New Product-relevant information,
data and documentation and inventions to develop and commercialize the New Product in the Chugai Territory. We will be responsible for
manufacturing and supplying or causing our CDMO to manufacture and supply the New Product to Chugai Pharmaceutical.
The Chugai Agreement will
remain in full force and effect until the first anniversary of the date of FDA approval of the New Product, unless terminated sooner,
or the Chugai Term. Following the Chugai Service Period and during the Chugai Term, Chugai Pharmaceutical may terminate the Chugai Agreement,
in whole or in part, without cause, by providing us 90 days prior written notice. Following such termination, we would maintain exclusive
access to Chugai Materials, subject to the termination clauses outlined below. We may terminate the Chugai Agreement, in whole only,
by providing Chugai Pharmaceutical 90 days’ prior written notice if (i) we decide to discontinue the New Product development; (ii)
we decide that the FDA’s requirements for the New Product are not likely to be met; or (iii) the FDA identifies a safety issue
regarding the New Product.
In addition, either party
may terminate the Chugai Agreement, in whole or in part, in the event that the other party materially breaches the Chugai Agreement and
fails to cure the breach within 30 days of written notice. Either party may terminate the Chugai Agreement in its entirety immediately
upon notice to the other party if such other party: (i) is dissolved or liquidated or takes any corporate action for such purpose; (ii)
becomes insolvent or is generally unable to pay, or fails to pay, its debts as they become due; (iii) files or has filed against it a
petition for voluntary or involuntary bankruptcy or otherwise becomes subject to any proceeding under any domestic or foreign bankruptcy
or insolvency laws; (iv) makes or seeks to make a general assignment for the benefit of creditors; or (v) applies for or has a receiver,
trustee, custodian or similar agent appointed by order of any court to take charge of or sell any material portion of its property or
business.
In the event that we undergo
a change of control, Chugai Pharmaceutical may terminate the Chugai Agreement upon 90 days’ written notice to us, absent a written
pledge by the new controlling party of its agreement to fulfill and undertake all obligations of ours and to be bound by the Chugai Agreement.
Sponsored Research and License Agreement
On November 28, 2018, we
entered into a sponsored research and license agreement, or the Research Agreement, with The University of Iowa, or the University, pursuant