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: 001-41184
ZYVERSA
THERAPEUTICS, INC.
(Exact
name of registrant as specified in its charter)
(Address of registrant’s principal executive offices) (Zip Code)
(Registrant’s telephone number, including area code)
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common Stock, $0.0001 par value per share ZVSA The Nasdaq Capital Market
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check 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 if 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 during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes: ☒ No: ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☒
If
an emerging growth company, indicate by 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 if 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 shares of the registrant’s Class A common stock held by non-affiliates of the registrant (based upon the
closing sales price of $9.93 for such shares on the Nasdaq Global Market on June 30, 2022) was approximately $77,127,889. For purposes of
calculating the aggregate market value of shares held by non-affiliates, we have assumed that all outstanding shares are held by
non-affiliates, except for shares held by each of our executive officers, directors, and 5% or greater stockholders. In the case of
5% or greater stockholders, we have not deemed such stockholders to be affiliates unless there are facts and circumstances which
would indicate that such stockholders exercise any control over our company, or unless they hold 10% or more of our outstanding
common stock. These assumptions should not be deemed to constitute an admission that all executive officers, directors, and 5% or
greater stockholders are, in fact, affiliates of our company, or that there are not other persons who may be deemed to be affiliates
of our company. Further information concerning shareholdings of our officers, directors, and principal stockholders is included or
incorporated by reference in Part III, Item 12 of this Annual Report on Form 10-K.
As
of March 23, 2023, the number of shares outstanding of the registrant’s common stock, $0.0001 par value per share, was 9,211,922.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
ZYVERSA
THERAPEUTICS, INC.
ANNUAL
REPORT ON FORM 10-K
FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2022
TABLE
OF CONTENTS
Page
PART I 5
1. Business 5
1A. Risk Factors 43
1B. Unresolved Staff Comments 95
2. Properties 95
3. Legal Proceedings 95
4. Mine Safety Disclosures 95
7A. Quantitative and Qualitative Disclosures About Market Risk 109
8. Financial Statements and Supplementary Data 109
9A. Controls and Procedures 110
9B. Other Information 110
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 110
10. Directors, Executive Officers and Corporate Governance 111
11. Executive Compensation 117
14. Principal Accounting Fees and Services 141
15. Exhibits, Financial Statement Schedules 141
CAUTIONARY
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Annual Report on Form 10-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include statements with respect to our beliefs,
plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance, and involve known and
unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance
or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking
statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can
identify these forward-looking statements through our use of words such as “may,” “can,” “anticipate,”
“assume,” “should,” “indicate,” “would,” “believe,” “contemplate,”
“expect,” “seek,” “estimate,” “continue,” “plan,” “point to,”
“project,” “predict,” “could,” “intend,” “target,” “potential”
and other similar words and expressions of the future.
There
are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking
statement made by us. These factors include, but are not limited to:
● our ability to realize the anticipated benefits of the Business Combination;
● the costs associated with our business;
● our ability to achieve and maintain profitability in the future
● our ability to effectively grow and expand operations;
● the risk of disruption to our current plans and operations;
● the impact of changes to applicable laws or regulations;
● the ability, assessment of, and strategies to compete with our competitors;
● the ability to prevent and guard against cybersecurity attacks;
● our ability to maintain and protect our brand and intellectual property; and
● other factors detailed under the section entitled “Risk Factors.”
The
foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or
risk factors that we are faced with that may cause our actual results to differ from those anticipated in such forward-looking statements.
Please see “Part I—Item 1A—Risk Factors” for additional risks which could adversely impact our business and financial
performance.
All
forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue
reliance on any forward-looking statements, which speak only as of the date of this report or the date of the document incorporated by
reference into this report. We have no obligation, and expressly disclaims any obligation, to update, revise or correct any of the forward-looking
statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections
in good faith and believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will
result or be achieved or accomplished.
PART
I
ITEM
1. BUSINESS
All
references in this report to “ZyVersa,” the “Company,” “we,” “us,” or “our”
mean ZyVersa Therapeutics, Inc. and its subsidiaries unless we state otherwise, or the context otherwise indicates.
Company
Overview
We
are a clinical stage biopharmaceutical company leveraging proprietary technologies to develop drugs for patients with chronic renal or
inflammatory diseases with high unmet medical needs. Our mission is to develop drugs that optimize health outcomes and improve patients’
quality of life.
We
have two proprietary globally licensed drug development platforms, each of which was discovered by research scientists at the University
of Miami, Miller School of Medicine (the “University of Miami” or “University”). These development platforms
are:
We
believe that each of our product candidates has the potential to treat numerous indications in their respective therapeutic areas. Our
strategy is to focus on indication expansion to maximize commercial potential.
Our
renal pipeline is initially focused on rare, chronic glomerular diseases. Our lead indication for VAR 200 is focal segmental glomerulosclerosis
(“FSGS”). On January 21, 2020, we filed an Investigational New Drug application (“IND”) for VAR 200, and the
United States Food and Drug Administration (“FDA”) has allowed our development plans to proceed to a Phase 2a trial in patients
with FSGS based on the risk/benefit profile of the active ingredient (2HPβCD). Prior to initiating a Phase 2a trial in patients
with FSGS, we are planning to support an open-label investigator-initiated trial (“IIT”) in Q4-2023 where we expect to obtain
human proof-of-concept data in up to three renal patient cohorts. This will enable assessment of drug effects as patients proceed through
treatment and will provide insights for developing our Phase 2a protocol. In addition to FSGS, VAR 200 has pharmacologic proof-of-concept
data in animal models representative of Alport Syndrome and diabetic kidney disease, each of which may be developed based on our indication
expansion strategy.
Our
inflammasome ASC inhibitor program, IC 100, is in preclinical development. Our focus is on advancing 1C 100 toward a currently planned
IND submission in Q2-2024, followed by initiation of a Phase 1 trial. IC 100 has pharmacologic proof-of-concept data in animal models
representative of acute respiratory distress syndrome (“ARDS”) and multiple sclerosis (“MS”). We plan to conduct
additional animal studies in up to six indications, such as immunoglobulin A (“IgA”) nephropathy, Parkinson’s Disease,
Huntington’s Disease, congestive heart failure, and early Alzheimer’s disease, in our next waves of preclinical development.
We anticipate that one or more lead indications for IC 100 will be selected based on data from our preclinical program.
About
Chronic Kidney Disease (CKD)
Chronic
kidney disease (“CKD”) is an increasing public health problem which affects over 75 million people worldwide, and approximately
37 million in the United States. The National Kidney Foundation estimates that approximately 80 million adults are at risk for kidney
disease in the United States. With no disease modifying drug therapies commercially available, a sizeable percentage of kidney patients
progress to end-stage renal disease (“ESRD”), requiring dialysis or transplant to survive. According to the Centers for Disease
Control and Prevention, in 2018, approximately 131,600 people in the United States started treatment for ESRD, and nearly 786,000 people
are currently living with ESRD in the United States (of those 786,000 people, approximately 71% are on dialysis, and 29% are living with
a kidney transplant). Further, the economic burden associated with chronic kidney disease can be substantial, as Medicare Fee-for-Service
spending was $130 billion in 2018 according to the National Kidney Foundation. We believe the high incidence level and the steep monetary
burden caused by CKD create a need for effective, disease modifying drug therapies.
CKD
is associated with poor prognosis and in 2017, according to the National Vital Statistics Report, CKD was the ninth-leading cause of
death in the United States. To address this significant health problem, on July 10, 2019, the White House and Department of Health and
Human Services launched the Advancing American Kidney Health (“AAKH”) initiative to advance kidney disease prevention and
care in the United States, which has three goals: (1) to reduce the number of patients developing renal failure through better diagnosis,
treatment, and preventative care; (2) to maximize provision of home dialysis care; and (3) to expand the pool of kidneys available for
transplant. We believe that by mediating removal of excess renal intracellular cholesterol that contributes to kidney damage and dysfunction,
VAR 200 has the potential to help address the AAKH initiative’s first goal to reduce the number of patients developing renal failure.
Our
lead renal indication is FSGS, which is a progressive form of kidney disease with no approved drug therapies. Approximately 40-60% of
FSGS patients develop end stage kidney disease within 10-20 years, requiring dialysis and ultimately kidney transplant to survive. FSGS
is an orphan disease affecting approximately 40,000 people in the United States. It is characterized by injury to the kidneys’
filtration system or “glomerular podocytes” leading to scarring that is focal (i.e., affecting only some glomerulus) and
segmental (i.e., affecting only part of glomerulus). Accumulation of cholesterol and lipids in renal glomeruli, which has been associated
with structural damage and impaired kidney function, has been seen in FSGS patient biopsies and in representative FSGS animal models.
Damage to the glomeruli causes protein to leak into urine, a condition known as proteinuria. As the level of protein increases in the
urine, patients develop a specific set of symptoms known as nephrotic syndrome. Proteinuria is strongly associated with kidney disease
progression, and nephrotic syndrome is generally predictive of a poor prognosis. Approximately 70% of FSGS patients present with nephrotic
syndrome at diagnosis. By mediating removal of excess cholesterol from renal glomeruli, we believe that VAR 200 has the potential to
preserve renal structure and function and thereby reduce proteinuria that leads to FSGS progression.
About
Inflammatory Diseases
Chronic
inflammatory diseases have been recognized as one of the most significant causes of death in the world today, with more than 50% of all
deaths worldwide attributable to inflammation-related diseases such as ischemic heart disease, stroke, cancer, diabetes mellitus, chronic
kidney disease, non-alcoholic fatty liver disease (“NAFLD”) and autoimmune and neurodegenerative conditions. Excessive and
persistent activation of inflammasomes have been linked to the pathophysiology of these types of chronic diseases.
Inflammasomes
are comprised of 3 proteins: (i) one of several types of sensor molecules, (ii) an apoptosis-associated speck-like protein
containing a caspase recruitment domain (“ASC”), and (iii) proinflammatory caspase-1 (“pro-caspase-1”).
There are multiple types of inflammasomes that trigger inflammation. They are named based on their associated sensor molecule, such
as NLRP1, NLRP2, NLRP3, NLRC4, AIM2, and Pyrin. Numerous inflammatory diseases are often associated with activation of multiple
types of inflammasomes. For example, multiple sclerosis is associated with activation of AIM2, NLRP1, NLRP3, and NLRC4. The ASC
component of inflammasomes is a promising drug target since it is a component of the six most common types of inflammasomes
referenced above. We believe this is more advantageous than targeting a specific sensor protein, a component of one type of
inflammasome, which is the focus of several potential competitors. In addition to its pivotal role in inflammasome formation and
activation required for initiation of an inflammatory response, ASC also plays a role in the perpetuation of inflammation associated
with extracellular release of ASC specks. By targeting ASC, we believe IC 100 has potential to effectively control inflammation in a
multitude of inflammatory diseases.
Our
Pipeline
The
goal of our pipeline is to target renal and inflammatory indications with high unmet medical needs, which we believe can be addressed
by our mechanisms of action. We intend to further enhance and expand our product portfolio through the development of multiple indications
for each of VAR 200 and IC 100, and through potential in-licensing of promising renal and anti-inflammatory product candidates.
Our
current pipeline consists of the following:
For
VAR 200, our lead renal indication is FSGS (VAR 200-01). For IC 100, we will select one or more lead indications prior to our IND filing
planned for Q2-2024. This will be based on data from existing and future preclinical studies.
With
the myriad of diverse diseases and conditions mediated by chronic inflammation, we believe IC 100 has potential to treat a multitude
of inflammatory diseases. The following is a summary of the market for IC 100’s current pipeline.
1. Quintanilla E, et al. Front Genet. 2021 December
2. National Multiple Sclerosis Society
3. IgA Nephropathy Market. DelveInsight Report, October, 2021
4. National Cancer Institute
5. Parkinson’s Foundation
6. Huntington’s Disease Market. DelveInsight Report, October 2021
7. Centers for Disease Control and Prevention
Business
Strategy
We
seek to be recognized as a leading biopharmaceutical company at the forefront of innovation for patients with high unmet medical needs.
We are committed to restoring health and transforming the lives of patients through development of biopharmaceutical products. Our strategy
is to:
The
dates and events reflected in the foregoing are estimates only, and there can be no assurances that the events included will be completed
on the anticipated timeline presented, or at all. Further, there can be no assurances that we will be successful in the development of
any of our product candidates, or any other products or product candidates we may develop in the future, or that any product candidate
we may develop in the future, will receive FDA approval for any indication.
Our
Product Candidates
Cholesterol
Efflux Mediator TM, VAR 200 (2-hydroxypropyl-beta-cyclodextrin, 2HPβCD)
Cholesterol
Efflux Mediator VAR 200 is an injectable drug in clinical development for treatment of chronic glomerular diseases, initially focusing
on FSGS. Alport Syndrome and diabetic kidney disease indications may be pursued based on our indication expansion strategy.
VAR
200 was developed with the intent to preserve renal structure and function, and reduce proteinuria that leads to glomerular disease progression
by mediating removal of excess cholesterol that damages renal glomeruli. For our lead renal indication, FSGS (VAR 200-01), we are planning
to support an open-label IIT in 2023 where we expect to obtain human proof-of-concept data in up to 3 renal patient cohorts, to be followed
by initiation of a Phase 2a trial in patients with FSGS. Based on the anticipated data and key learnings from these trials, we may progress
development of VAR 200 for Alport Syndrome (VAR 200-02) and for diabetic kidney disease (VAR 200-03) based on our indication expansion
strategy.
Role
of Cholesterol and Lipid Accumulation in Glomerular Diseases (Including FSGS, Alport Syndrome, and Diabetic Kidney Disease)
In
chronic glomerular diseases, cholesterol accumulates in glomerular podocytes, due in part to impaired transport out of the cell, or “efflux,”
resulting from reduced expression of the cholesterol transporters ABCA1 and ABCG1. Glomerular lipid accumulation has been demonstrated
by in vitro podocyte studies, in human biopsy data, and in animal models of various kidney diseases, including FSGS, Alport Syndrome,
and diabetic kidney disease. As shown below, the lipid accumulation causes distorted podocyte structure, damaged podocyte foot processes,
and podocyte detachment and loss, which impairs kidney filtration resulting in proteinuria and disease progression. We hypothesize that
restoration of lipid homeostasis and podocyte integrity has the potential to slow ongoing kidney damage progression to kidney failure,
and delay the need for dialysis and ultimately transplant.
VAR
200 Mechanism of Action
VAR
200’s active ingredient, 2HβCD, is comprised of seven sugar molecules bound together in a 3-D ring with a hydrophobic core
and hydrophilic exterior. VAR 200 mediates cholesterol efflux both passively and actively by interacting with hydrophilic components
of the glomerular membrane.
Passive
Cholesterol Efflux
Passive
cholesterol efflux occurs with formation of 2HPβCD dimers, which bind to the cell membrane surface and incorporate cholesterol into
its hydrophobic core as an inclusion complex. Release of the 2HPβCD/cholesterol inclusion complex from the cell membrane surface
brings the cholesterol into solution for transfer to cholesterol acceptors, such as high-density lipoprotein (“HDL”).
Active
Cholesterol Efflux
Active
cholesterol efflux occurs through mediating metabolism of free cholesterol into oxysterols. Oxysterols activate the liver X receptor
(“LXR”)-transcription factors, resulting in induction of cellular cholesterol efflux pathways, including upregulation cholesterol
efflux transporters, ABCA1 and ABCG1, which transport free cholesterol outside the cell to cholesterol acceptors, such as HDL.
Preclinical
Support for VAR 200
We
believe that VAR 200 has an established benefit/risk profile supported by our in vivo studies and decades of use as an excipient.
Additionally, it is our belief that data from animal models representing FSGS, Alport Syndrome, and diabetic kidney disease demonstrate
that VAR 200 promotes cholesterol removal from podocytes, protecting the kidney’s filtration system from damage and reducing protein
spillage into the urine or “proteinuria.” These types of outcomes are thought to be key to delaying or preventing progression
of kidney disease.
VAR
200 and FSGS
VAR
200 was evaluated in two FSGS mouse models, an experimental nuclear factor of activated T-cells (“NFAT”) FSGS model and an
Adriamycin (“ADR”)-induced FSGS model, which is characterized by a milder, less progressive form of nephropathy than the
NFAT model.
Nuclear
Factor of Activated T-Cells (NFAT) Model
In
a study to examine the role of altered podocyte cholesterol homeostasis in NFAT-mediated podocyte injury and the effects of treatment
with VAR 200, researchers administered VAR 200 subcutaneously at 4,000 mg/kg to 6-week-old NFATc1nuc mice 24 hours prior to
induction with doxycycline, and then every other day for 4 days. Single transgenic (“ST”) mice served as a control.
VAR
200 (indicated by “CD” in the graphs below) significantly reduced cholesterol in the renal cortex of FSGS mice compared to
untreated double transgenic mice (indicated by “DT” in the graphs below). This was associated with a significant reduction
in proteinuria (albumin/creatine ratio) as shown below.
Adriamycin
(ADR)-induced Model
In
the second FSGS model, researchers injected 5-week-old BALB/c mice with one dose of Adriamycin at 11 mg/kg. Subsequently, VAR 200 was
administered 24 hours later at 40 mg/kg via subcutaneous osmotic pump for 10 weeks. Non-induced mice served as a control.
VAR
200 (indicated by “CD” in the graphs below) significantly reduced mesangial expansion, which is commonly associated with
lipid deposition, compared to untreated ADR-induced mice as shown below. This was associated with a significant reduction in proteinuria
(albumin/creatine) and blood urea nitrogen (“BUN”) in VAR 200-treated) ADR-induced mice compared to untreated ADR-induced
mice as shown below.
VAR
200 and Alport Syndrome
In
another study, to evaluate whether VAR 200 has a protective effect in Alport Syndrome, researchers injected four-week-old female Col4a3
knockout (Col4a3−/−) mice with VAR 200 at 4000 mg/kg subcutaneously 3 times per week for 4 weeks. Wild type Col4a3 (“Col43+/+”)
mice served as controls.
VAR
200 (indicated by “CD” in the graphs below) significantly reduced renal neutral lipid, cholesterol ester, and cholesterol
crystal accumulation in Alport Syndrome mice when compared to untreated Alport Syndrome mice as shown below.
The
decreased intracellular lipids in VAR 200-treated Alport Syndrome mice were associated with a significant reduction in renal damage (reduced
mesangial expansion, fibrosis, and foot process effacement), and renal function was maintained when compared to untreated Alport Syndrome
mice, as evidenced by reduced proteinuria (albumin/creatinine), blood urea nitrogen, and serum creatinine when compared to untreated
Alport Syndrome mice as shown below.
VAR
200 and Diabetic Kidney Disease
In
another study to determine if VAR 200 can sequester intracellular cholesterol and protect podocytes from cholesterol-dependent damage
in diabetic kidney disease, researchers treated 4-week old BTBR ob/ob homozygous mice, a diabetic model of progressive kidney disease,
with 3 weekly subcutaneous injections of VAR 200 at 4,000 mg/kg for 5 months. Heterozygous mice served as controls.
VAR
200 (indicated by “CD” in the graphs below) significantly reduced total cholesterol in the kidney cortex compared with untreated
diabetic mice. This was associated with a significant reduction in renal damage (mesangial expansion) and reduced proteinuria (albumin/creatinine)
compared to untreated diabetic mice starting at 2 months following treatment, with statistically significant reduced levels from 3 months
to end of study as shown below.
Based
on the results in animal models of 3 different renal diseases summarized above, we believe that VAR 200 has potential to induce and maintain
partial or complete remission of proteinuria in renal patients with nephrotic syndrome, thereby reducing the rate of renal disease progression.
IC
100 (Inflammasome ASC Inhibitor)
IC
100 is a monoclonal antibody inflammasome ASC inhibitor in preclinical development for the treatment of numerous inflammatory diseases.
IC 100 was developed with the intent of mediating chronic aberrant inflammation that is pathogenic in a multitude of inflammatory diseases
by blocking initiation and perpetuation of the innate inflammatory response to stop disease progression and improve quality of life.
A
lead indication as not yet been identified for IC 100. Our focus is on advancing IC 100 toward a planned submission of an IND application
in Q2-2024, which we intend to be followed by initiation of a Phase 1 trial. IC 100 has pharmacologic proof-of-concept data in animal
models representative of ARDS and MS. We plan to conduct GLP toxicology studies in mice and NHP and conduct additional animal studies
in up to 6 additional indications, such as IgA nephropathy, Parkinson’s disease, Huntington’s disease, congestive heart failure,
and early Alzheimer’s disease, in our next waves of preclinical development (including,). One or more lead indications for IC 100
will be selected based on data from our preclinical program.
Role
of Inflammasomes in Inflammatory Diseases
Excessive
and persistent activation of inflammasomes have been linked to the pathophysiology of inflammatory diseases. Inflammasomes are multiprotein
complexes that initiate an immune response to pathogens or internal danger signals. They are comprised three basic proteins: (i) one
of several types of sensor molecules (e.g., NLRP1, NLRP2, NLRP3, NLRC4, AIM2, and Pyrin), (ii) adaptor protein, ASC, and (iii) pro-caspase
1. Each sensor molecule responds to different pathogens or internal danger signals.
As
depicted below, in the presence of harmful pathogens or cell damage, an intracellular sensor molecule (e.g., NLRP3) is triggered, stimulating
recruitment of adaptor ASC, which in turn recruits pro-caspase-1 to form an inflammasome. The inflammasome is the organizing center that
recruits additional ASC and polymerizes in a prion-like structure to form a large filamentous signaling platform, known as an ASC Speck.
ASC Specks provide a scaffold for pro-caspase-1 recruitment, which triggers conversion of pro-caspase-1 to active caspase-1, which in
turn converts the cytokine pro-IL-1ß to its active form IL-1ß, initiating the inflammatory response. Activated caspase-1
also drives cleavage of Gasdermin D, which triggers pyroptosis, a form of programmed cell death, releasing active cytokines and ASC Specks
into the extracellular space, with continued activation of pro-IL-1ß, heightening and perpetuating the inflammatory response in
neighboring cells and tissues. Although inflammasome triggering of the innate immune response is essential for protection against pathogens,
persistent overactivation of inflammasomes can lead to chronic inflammation underlying a multitude of inflammatory conditions and diseases.
Numerous inflammatory diseases are associated with activation of multiple types of inflammasomes. For example, multiple sclerosis is
associated with activation of AIM2, NLRP1, NLRP3, and NLRC4.
IC
100 Mechanism of Action
IC
100 was designed to bind to key amino acids in adaptor protein ASC that govern ASC recruitment into the inflammasome complex and ASC
Speck formation:
Inflammasome
Activation in One Condition Can Impact Another
A
recent paper published in Translational Research demonstrates that inflammasome activity and signaling proteins triggered by one unique
inflammatory condition can impact and potentially interact with another. The authors provided extensive evidence that traumatic brain
injury (TBI) and Alzheimer’s disease (AD) are linked by activation of multiple types of inflammasomes (NLRP3, NLRP1, and AIM2).
In each condition, inflammasome activation leads to cell death and release of active cytokines and ASC specks to neighboring cells allowing
for one condition to potentially exacerbate the other. For example, individuals with a history of moderate TBI have a 2.3 times greater
risk of developing AD. Likewise, AD pathology is potentially exacerbated by inflammasome activation in patients with TBI through IL-18
and pathological ASC speck interactions with amyloid beta and phosphorylated tau, hallmarks of AD. The authors reported that inflammasome
ASC represents a promising therapeutic target for TBI and AD because of ASC’s unique role in heightening and perpetuating inflammation
in neighboring cells, and its pathological interactions with amyloid beta and phosphorylated tau. In a subsequent study, also published
in Translational Research by several of the same authors, researchers evaluated if blocking inflammasome activity by inhibiting ASC with
IC 100 reduces the elevated inflammatory response in AD mice after TBI. Data demonstrated that 100 resulted in reduction of inflammasome-mediated
cytokine IL-1β in the injured cortex of AD mice at 1-week post-injury. This is consistent with preclinical studies conducted with
IC 100, demonstrating reduced inflammatory activity, and improved histological and/or functional outcomes in models of traumatic brain
injury and age-related brain inflammation (associated with conditions such as Alzheimer’s disease), highlighted in the next sections
below.
Preclinical
Support for IC 100
Non-GLP
toxicology studies in mice and non-human primates demonstrate that IC 100 has a good safety profile. There were no drug-related adverse
events at doses up to 300 mg/kg in either species. Likewise, epigenetic screening demonstrates a lower immunogenicity potential than
many biologics. Based on our preclinical study in an animal model representing MS, inflammation was attenuated without immunosuppression.
In addition to the studies in traumatic brain injury and age-related inflammation (early cognitive impairment) referenced above, IC 100
has pharmacologic proof-of-concept data in animal models representative of ARDS and MS, and mechanistic proof-of-concept data in animal
models representative of spinal cord injury.
IC
100 and MS
In
one study to determine if IC 100 protects against MS progression, researchers induced active experimental autoimmune encephalomyelitis
(“EAE”) in C57BL/6 mice through immunization with myelin oligodendrocyte glycoprotein peptide 35 – 55 (“MOG35
– 55”). IC 100 was administered via intraperitoneal (“IP”) injection at 10, 30, or 45 mg/kg on day 8 before appearance
of clinical symptoms, followed by treatment every 4 days for 32 days. Vehicle served as a control.
IC
100 penetrated the spinal cord and decreased the number of spinal cords activated microglial CD4+, CD8+, and myeloid cells. This was
associated with delayed onset and significantly improved functionality based on MS clinical scores as shown below.
IC
100 and ARDS
In
another study to determine if IC 100 can improve histopathological outcomes in ARDS, researchers induced acute lung injury and subsequent
ARDS in naïve mice by delivering extracellular vesicles (“EV”) from mice with traumatic brain injury, followed by IV
administration of a functional prototype of IC 100 at 5 mg/kg 1 hour after EV delivery; animals were sacrificed 24 hours later. Data
were compared to naïve, sham (saline), untreated, or enoxaparin at 3mg/kg experimental groups.
IC
100 inhibited inflammasome and cytokine activation in lungs as evidenced by a reduction in caspase-1, ASC, IL-1β, AIM2, HMGB1 when
compared with untreated positive control animals. This was associated with improved histological outcomes and reduced acute lung injury
scores indicative of decreased lung injury severity.
IC
100 Mechanistic Proof of Concept Data
Spinal
Cord Injury
To
determine the effects of ASC neutralization in spinal cord injury, researchers administered 50 mcg of anti-ASC tool antibody IV and IP
20 minutes after injury in Fischer rats subjected to moderate cervical spinal cord injury (“SCI”). Anti-ASC neutralizing
antibodies decreased caspase-1 activation and cytokine levels, improved histopathological outcomes and decreased spinal cord lesion volume,
and improves functional outcomes (e.g., motor skills) compared to controls.
Based
on the promising results in animal models of various inflammatory diseases, we believe IC 100 has potential to mediate the persistent
damaging inflammation associated with inflammatory disease and improve outcomes.
Traumatic
Brain Injury
The
effects of ASC neutralization in traumatic brain injury were evaluated in two different animal models, a penetrating ballistic-like brain
injury model, and a fluid percussion injury model.
In
the penetrating ballistic-like brain injury model, researchers performed IV administration of a functional prototype of IC 100 at 5 mg/kg
four hours after injury in Sprague-Dawley rats receiving a penetrating ballistic-like brain injury. IC 100 decreased inflammasome activation,
as evidenced by decreased caspase-1 activity, and pyroptosis in microglia and infiltrating leukocytes compared with vehicle control.
In
the fluid percussion injury model, researchers performed IV administration of anti-ASC tool antibody at 15 mcg immediately after injury
in Sprague — Dawley rats receiving a fluid-percussion injury. Immunoglobulin G (“IgG”) served as a control. Neutralization
of ASC interfered with NLRP1 inflammasome signaling, leading to a significant reduction caspase-1 compared with IgG. This was associated
with a significant reduction in contusion volume.
Age-related
Inflammation (Early Cognitive Impairment)
To
determine the effects of IC 100 on age-related inflammation, which is representative of early cognitive impairment, a functional prototype
of IC 100 was administered via IP injection at 10 mg/kg for 3 days to aged mice (i.e., 18 months old). Aged mice receiving saline control,
and untreated young mice (i.e., 3 months old) served as controls. IC 100 reduced inflammasome protein levels (i.e., NLRP1, ASC, capsase-1)
and ASC Specks associated with a reduction of IL-1β, indicating that IC 100 reduces inflammasome activation in the cortex of aged
mice.
ASC
as a Biomarker
Biomarkers
are valuable tools to predict, diagnose, and monitor disease progression. They can also be used to target patients who are likely to
respond to specific treatments, and to monitor ongoing efficacy of those treatments over time.
Researchers
at the University of Miami evaluated serum inflammasome proteins as potential biomarkers for inflammatory disorders and identified ASC
as a potential candidate. Serum ASC levels were elevated in patients with various inflammatory disorders when compared to healthy people.
Additionally, when compared to caspase-1 as a biomarker in patients with multiple sclerosis, ASC had a similar sensitivity to caspase-1,
but a significantly higher specificity than caspase-1.
ASC
levels have been demonstrated to correlate with disease outcomes and disease severity, for example:
Market
and Commercial Opportunity
We
believe that our lead product candidates have potential for treatment of diseases with significant unmet medical needs, including (i)
our lead renal product candidate, VAR 200, in development for potential treatment of multiple renal indications such as focal segmental
glomerulosclerosis (FSGS), and Alport Syndrome (orphan indications), and diabetic nephropathy; and (ii) our lead anti-inflammatory product
candidate, IC 100, for treatment of multiple inflammatory diseases, including, but not limited to multiple sclerosis and acute respiratory
distress syndrome. VAR 200 has not yet been granted orphan drug designation by the FDA for FSGS or Alport Syndrome.
Cholesterol
Efflux MediatorTM VAR 200 Opportunity
FSGS
Market
The
total addressable market for disease-specific drug therapies for FSGS has not been established because there are no approved drug therapies
specific to the condition (please see the next section which discusses the current treatment limitations). FSGS, an orphan indication,
is estimated to affect around 40,000 people in the United States, with more than 5,400 new cases diagnosed annually, according to Nephcure
Kidney International. FSGS is most common in adults 45 years of age and older and occurs in Black Americans at a rate that is four times
higher than in Caucasian Americans.
Current
FSGS Treatments and Limitations
At
present, there are no commercially available disease-specific treatments for FSGS and there is no known cure. Current therapy focuses
on maintaining adequate nutrition, controlling blood pressure and serum lipids, minimizing loss of protein in the urine, and preventing
complications from edema, thereby stabilizing kidney function. The most common drug therapy includes diuretics for edema, ACE inhibitors
and ARBs for reduction of proteinuria, other antihypertensive agents, and lipid lowering drugs. Steroids and calcineurin inhibitors are
also used to induce partial remission of proteinuria.
We
believe that there is a significant unmet need for effective FSGS-specific treatments that can delay disease progression, prevent end-stage
renal disease, improve patients’ quality of life, and reduce the health economic burden.
Alport
Syndrome (AS)
AS,
an orphan indication, is a progressive, inherited form of kidney disease that is often associated with hearing loss and abnormalities
of the eye. It is caused by genetic mutations in genes encoding members of the type IV collagen family that ultimately cause lipid accumulation
and scarring of the basement membranes of the kidney, or “glomerulus”, the inner ear, or “cochlea”, and the eye.
A key, early feature of AS is blood in the urine, or “hematuria”, with a progressive decline in kidney function ultimately
resulting in kidney failure. Hearing loss affecting both ears occurs in late childhood or early adolescence, generally before the onset
of kidney failure. Patients may also have misshapen lenses in the eyes (anterior lenticonus) and abnormal retina coloration, but these
abnormalities seldom lead to vision loss. Prognosis for patients with AS is poor.
AS
Market
The
total addressable market for disease-specific drug therapies for AS has not been established because there are no FDA approved drug therapies
specific to the condition (please see the next section which discusses the current treatment limitations). AS represents all geographic
and ethnic groups. Although the overall incidence in the general population is unknown, U.S. data demonstrates AS accounts for three
percent of children and 0.2% of adults with end-stage kidney disease. The gene frequency of AS in the United States has been estimated
at 1:5,000 to 1:10,000 people, suggesting there are approximately 30,000 to 60,000 affected individuals, according to the National Organization
of Rare Diseases.
Current
AS Treatments and Limitations
There
are currently no commercially available disease-specific treatments for AS. Current therapy focuses on minimizing loss of protein in
the urine and preventing complications from edema to help stabilize kidney function. Angiotensin-converting enzyme (“ACE”)
inhibitor therapy or angiotensin receptor blocker (“ARB”) therapy is recommended in individuals with AS who show overt proteinuria.
We believe that there is a significant unmet need for effective AS-specific treatments that can delay disease progression, prevent end-stage
renal disease and hearing loss, and improve patients’ quality of life.
Diabetic
Nephropathy
Kidney
disease or “nephropathy” has been recognized as a common complication of diabetes since the 1950s. Currently, diabetic nephropathy
is the leading cause of chronic kidney disease in the United States and other Western societies. It is also one of the most significant
long-term complications in terms of morbidity and mortality for individual patients with diabetes. Diabetes is responsible for 30 to
40% of all end-stage renal disease (“ESRD”) cases in the United States. Proteinuria is a predictor of morbidity and mortality.
Patients with proteinuria have a 40-fold higher relative mortality rate. Microalbuminuria, (small quantities of albumin in the urine)
independently predicts cardiovascular morbidity, and spillage of the protein, albumin into the urine (or “microalbuminuria and
macroalbuminuria”) increase mortality from any cause in diabetes mellitus.
Diabetic
Nephropathy Market
The
total addressable market for disease-specific drug therapies for Diabetic Nephropathy has not been established because there are no approved
drug therapies specific to the condition (please see the next section which discusses the current treatment limitations). Up to 50% of
patients who have had diabetes for more than 20 years have diabetic nephropathy. It is estimated that up to 12 million people in the
United States according to the Center for Disease Control and Prevention.
Current
Diabetic Nephropathy Treatments and Limitations
High
blood sugar, or “hyperglycemia”, has been shown to be a major determinant of the progression of diabetic nephropathy, so
good blood glucose control is a key to management of the condition. As with other kidney diseases, there are no renal-specific drug therapies.
Control of blood pressure using ACE inhibitors and ARBs is standard of care. New treatment guidelines recommend sodium-glucose co-transporter
2 (“SGLT2”) inhibitors for patients with Type 2 diabetes, diabetic nephropathy, and an estimated glomerular filtration rate
(“eGFR”) ≥30 ml/min per 1.73 m2 at any level of current glycemic control. SGLT2 inhibitors have been proven to improve
kidney and cardiovascular outcomes in this population.
We
believe there is a significant unmet need for effective diabetic nephropathy-specific treatments that can delay disease progression,
prevent end-stage renal disease, and improve patients’ quality of life.
IC
100 Opportunity
Anti-Inflammatory
Biologics Market
The
global anti-inflammatory biologics market was valued at $64.84 billion in 2019 and is projected to reach $149.80 billion by 2027 according
to Fortune Business Insights.
Multiple
Sclerosis (MS)
MS
is a potentially disabling disease of the brain and spinal cord, which occurs as a result of the immune system attacking the protective
myelin sheath that covers nerve fibers, resulting in communication problems between the brain and the rest of the body. Eventually, the