UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

For the fiscal year ended December 31 2017, 2023

OR

For the transition period from to

Commission file number 001-37813

SYROS PHARMACEUTICALS, INC.

(Exact Name of Registrant as Specified in Its Charter)

(617) (617) 744-1340

(Registrant’s telephone number, including area code)

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

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 Section 15(d) of the Act. Yes ◻    ☐No☑

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). Yes☑ No ◻☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☑

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

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 Exchange Act). Yes ◻☐ No☑

As of June 30, 2017,2023, 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 was $289,542,157,$58,560,692 based on the last reported sale price of such stock on the Nasdaq Global Select Market as of such date.

Portions of the registrant’s definitive proxy statement for its 20182024 Annual Meeting of Stockholders, which the registrant intends to file pursuant to Regulation 14A with the Securities and Exchange Commission not later than 120 days after the registrant’s fiscal year ended December 31, 2017,2023, are incorporated by reference into Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K.As10-K. As of February 28, 2018,March 6, 2024, the registrant had 32,193,96126,453,891 shares of Common Stock, $0.001 par value per share, outstanding.

We may not actually achieve the plans, intentions or expectations disclosed in our forward‑looking statements, and you should not place undue reliance on our forward‑looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward‑looking statements we make. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward‑looking statements contained in this Annual Report.

We have included important factors in the cautionary statements included in this Annual Report particularly in the “Risk Factors” section, that could cause actual results or events to differ materially from the forward‑looking statements that we make. make, particularly the factors discussed below under the heading “Risk Factor Summary,” and the risk factors detailed further in Item 1A, “Risk Factors” of Part I of this Annual Report and in our Securities and Exchange Commission reports filed after this Annual Report.

Our forward‑looking statements also do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, joint ventures or investments that we may make or enter into.

This report also includes statistical and other industry and market data that we obtained from industry publications and research, surveys, and studies conducted by third parties as well as our own estimates. All of the market data used in this report involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunities for tamibarotene or any future product candidate include several key assumptions based on our industry knowledge, industry publications, third-party research, and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.

You should read this Annual Report and the documents that we have filed as exhibits to this Annual Report completely and with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward‑looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Risk Factor Summary

Investment in our securities involves risk. You should carefully consider the following summary of what we believe to be the principal risks facing our business, in addition to the risks described more fully in Item 1A, “Risk Factors” of Part I of this Annual Report also includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. All of the market data usedinformation included in this Annual Report involvesReport. The risks and uncertainties described below are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations.

If any of the following risks occurs, our business, financial condition, and results of operations and future growth prospects could be materially and adversely affected, and the actual outcomes of matters as to which forward-looking statements are made in this report could be materially different from those anticipated in such forward-looking statements.

Syros® is a registered trademark of Syros Pharmaceuticals, Inc. All rights reserved. All other trademarks used in this Annual Report are the property of their respective owners.

PART I

Item 1. BUSINESS

Overview

We are a biopharmaceutical company pioneering an understandingcommitted to developing new standards of care for the non-coding regulatory regionfrontline treatment of patients with hematologic malignancies. Driven by the genome controlling the activation and repression of genes. Our goal ismotivation to advancehelp patients with blood disorders that have largely eluded other targeted approaches, we are advancing tamibarotene, a new wave of medicines to control the expression of genes. We have builtselective retinoic acid receptor alpha, or RARα, agonist for which we are conducting SELECT-MDS-1, a proprietary gene control platform designed to systematically and efficiently analyze this unexploited region of DNAPhase 3 clinical trial evaluating tamibarotene in human disease tissue to identify novel targets linked tocombination with azacitidine in a genomically defined patient populationssubset of patients with higher-risk myelodysplastic syndrome, or HR-MDS, and to develop drugs against those targets based on our expertise in transcriptional chemistry. Because gene expression is fundamental to the function of all cells,for which we believe that our gene control platform has broad potential to create medicines that achieve profound and durable benefit across therapeutic areas andare conducting SELECT-AML-1, a range of diseases. We are currently focused on developing treatments for cancer and diseases resulting from modifications of a single gene, also known as monogenic diseases, and are building a pipeline of gene control medicines.

Our lead product candidates are:

We also have multiple programs in earlier stages of research and development in oncology, including immuno-oncology, and monogenic diseases. Our goal is to build a fully integrated biopharmaceutical company based on our leadership position in gene control.

At the 59th American Society of Hematology Annual Meeting and Exposition in December 2017, or ASH 2017, we presented clinical data from ourrandomized Phase 2 clinical trial evaluating SY-1425 astamibarotene in combination with venetoclax and azacitidine in a single agent ingenomically defined subsetssubset of AML and MDSnewly diagnosed patients with our proprietary RARAacute myeloid leukemia, or AML, who are not suitable candidates for standard intensive chemotherapy.

Tamibarotene

Overview

Tamibarotene is an oral, potent and IRF8 biomarkers. In the trial, we observed that chronic daily dosing of SY-1425 administered at 6 mg/m2 orally divided in two doses was generally well-tolerated and that clinical and biological activity was observed in patients enrolled in the trial. Specifically, clinical activity was observed in ten of 23 (43%) evaluable patients with relapsed or refractory AML and higher-risk MDS, including improvement in blood counts, reduction in leukemic blasts and one bone marrow complete response. Thirteenselective agonist of the 23 (57%) evaluable relapsed or refractorytranscription factor RARα. In cells overexpressing RARA, the gene that codes for RARα, tamibarotene has been observed to bind to RARα, saturating unliganded RARα receptors to trigger a transcriptional activation switch to restore myeloid differentiation, inhibit blast proliferation, and promote blast cell clearance. A growing body of data from multiple clinical trials supports our development strategy for tamibarotene in HR-MDS and AML patients who overexpress RARA. HR-MDS and higher-risk MDS patients had stable disease. Myeloid differentiation was also observedAML are hematologic malignancies that exist on the same disease continuum, with the two diseases diagnostically distinguished largely by the percentage blasts in the bone marrow, consistent with the underlying mechanism of action of SY-1425 as a differentiating agent. Induction of CD38, a marker of cell differentiation, was observed after one 28-day cycle of treatment in 11 of 13 (85%) patients with pre- and post-treatment immunophenotyping samples.

marrow. We believe that theseapproximately 50% of HR-MDS patients and approximately 30% of AML patients are positive for RARA overexpression.

Informed by feedback from the U.S. Food and Drug Administration, or FDA, we are enrolling newly diagnosed HR-MDS patients who overexpress RARA in SELECT-MDS-1, a double-blind placebo-controlled randomized Phase 3 clinical data, when combined with preclinical data showing the tumor-killing activity of SY-1425trial, to receive tamibarotene in combination with azacitidine, and with daratumumab, support the ongoing development of SY-1425 as a combination agent. SY-1425 has shown synergistic tumor-killing activityor placebo in combination with azacitidine, respectively. The primary efficacy endpoint is based on 190 patients to provide over 90% power to detect a difference in the rates of complete response, or CR, between the experimental and control arms, with a one-sided alpha of 0.025. The FDA has expressed that the CR rate is an acceptable efficacy endpoint for either full or accelerated approval for treatment of newly diagnosed HR-MDS with supporting data on durability of remission. Informed by feedback from the FDA, we amended the SELECT-MDS-1 clinical trial protocol in March 2023 to include a total of approximately 550 patients to enable us to assess overall survival, or OS, as wella key secondary endpoint, which could allow the trial to serve as a confirmatory study if needed to convert an accelerated approval to a full approval in the future. The amended clinical trial protocol is designed with daratumumab80% power to detect a difference in preclinical modelsOS rates for the key secondary endpoint between the experimental and control arms, also with a one-sided alpha of RARA biomarker-positive AML.0.025. In January 2023, the FDA granted Fast Track Designation to tamibarotene in combination with azacitidine SY-1425 demonstratedfor the treatment of adults with newly diagnosed HR-MDS who are positive for RARA overexpression. In the first quarter of 2024, we completed enrollment of the 190 patients necessary to support the CR primary endpoint analysis, and we expect to report pivotal CR data from the SELECT-MDS-1 trial by the middle of the fourth quarter of 2024.

In addition, we are advancing tamibarotene in combination with venetoclax and azacitidine in newly diagnosed unfit AML patients who are positive for RARA overexpression. Our ongoing Phase 2 clinical trial, known as SELECT-AML-1, included a single-arm safety lead-in to confirm the dosing regimen of the triplet to be used in the randomized portion of the trial, which is evaluating the safety and efficacy of tamibarotene in combination with venetoclax and azacitidine compared to venetoclax and azacitidine in approximately 80 patients randomized 1:1. The trial is also evaluating the triplet as a salvage strategy for patients in the control arm who do not respond to venetoclax and azacitidine. The primary endpoint of the trial is the CR/CRi rate (as defined below) and the trial is powered at 80% to detect a difference between the experimental and control arms. We reported initial data from the randomized portion of the SELECT-AML-1 trial in early December 2023. As of a November 13, 2023 data cut-off, seven of the nine response evaluable patients (78%) treated with the combination of tamibarotene, venetoclax and azacitidine achieved CR and two patients (22%) achieved complete response with incomplete blood count recovery, or CRi, for an aggregate CR/CRi rate of 100%. Three of the ten response evaluable patients (30%) treated with venetoclax and azacitidine achieved a CR and four patients (40%) achieved a CRi, for an aggregate CR/CRi rate of 70% in the control arm. We expect to report additional data from the SELECT-AML-1 trial in 2024. There can be no guarantee that this additional data will replicate the results of the initial data that was reported in December 2023.

In combination with daratumumab, SY-1425 induced robust immune cell-mediated tumor death in vitro. Notably, AML cells do not normally express high levelsan earlier cohort of CD38. We have shown that by inducing CD38 expression, SY-1425 sensitizes biomarker-positive AML models to the tumor-killing effects of daratumumab.

Our ongoingour Phase 2 clinical trial is assessingevaluating tamibarotene as a single agent, hematologic response was observed in 60% (3/5) of evaluable patients with relapsed or refractory HR-MDS, including one patient with a marrow CR. The evaluation of tamibarotene as a single agent was followed by evaluation of tamibarotene plus azacitidine in newly diagnosed unfit patients with AML in this same Phase 2 trial. We presented data at the 62nd American Society of Hematology Annual Meeting and Exposition held in December 2020, which was later published in Blood Advances in 2022, from our fully enrolled Phase 2 clinical trial evaluating the safety and efficacy of SY-1425tamibarotene in combination with azacitidine in approximately 25 newly diagnosed AML patients who are not suitable candidates for standard chemotherapy,chemotherapy. Fifty-one newly diagnosed unfit AML patients, including those with and without RARA gene overexpression, were eligible for a safety analysis. Eighteen patients who overexpress RARA were evaluable for clinical response. In those patients, the data showed that:

For the 28 patients who were negative for RARA overexpression and who were evaluable for clinical response, the data showed that the overall response rate was 43% (12/28), with a composite complete response rate of 32% (9/28), including seven patients (25%) achieving CR and two patients (7%) achieving CRi. The median time to response was 3.0 months, and the median duration of response was 10.3 months.

Tamibarotene in combination with daratumumabazacitidine was generally well-tolerated with no evidence of increased toxicity relative to either as a single agent, including rates of myelosuppression that were comparable to single agent azacitidine.

Tamibarotene in approximately 12 relapsed or refractoryCombination with Venetoclax and Azacitidine

At the 64th American Society of Hematology Annual Meeting held in December 2022, we presented data from the safety lead-in portion of our ongoing SELECT-AML-1 Phase 2 trial evaluating tamibarotene in combination with venetoclax and azacitidine in newly diagnosed, unfit patients with AML and higher-risk MDS patients. AllRARA gene overexpression. As of October 13, 2022, eight newly diagnosed, unfit patients enrolled or to bewho were positive for RARA overexpression had been enrolled in the trial, have been or will be prospectively selected using our

including six who

proprietary RARA or IRF8 biomarkers. InOn December 2017,6, 2023, we entered into a clinical supply agreement with Janssen Research and Development, LLC, or Janssen, pursuant to which Janssen agreed to supply us daratumumabannounced initial data from the randomized portion of SELECT-AML-1. As of November 13, 2023, 23 newly diagnosed unfit AML patients positive for useRARA overexpression had enrolled in the trial. We are no longer enrolling patients in the cohortsrandomized portion of the trial, in which SY-1425including 19 who were evaluable for response. The CR/CRi rate was being evaluated as a single agent. We expect to report initial clinical data from100% among response evaluable patients (nine of nine) treated with the combination cohortsof tamibarotene, venetoclax and azacitidine, as compared to 70% of patients (seven of ten) treated with the control arm of venetoclax and azacitidine. Seven of the trial innine response evaluable patients (78%) treated with the fourth quartercombination of 2018.

We are continuing to dosetamibarotene, venetoclax and azacitidine achieved a CR and two patients in the dose-escalation phase of our ongoing Phase 1 clinical trial of SY-1365 and expect to report data from this phase(22%) achieved a CRi. Three of the trial in the fourth quarter of 2018. Once a maximum tolerated dose is reached in the dose escalation phase of the Phase 1 clinical trial and the recommended dosing schedule is identified, we intend to open expansion cohorts evaluating SY-1365 in multiple ovarian cancer populations as a single agent as well as in combination with carboplatin, a chemotherapeutic agent. The ovarian cancer populations include a 24-patient cohort evaluating SY-1365 as a single agent inten response evaluable patients who have relapsed after three or more prior therapies, a 24-patient cohort evaluating SY-1365 in combination with carboplatin in patients who relapsed after one or more prior therapies but who may still benefit from additional platinum-based treatment, and a 12-patient pilot cohort evaluating SY-1365 as a single agent in primary platinum-refractory disease. We also plan to evaluate SY-1365 in combination with fulvestrant, a hormonal medicine, in 12 patients with hormone-receptor positive, or HR+, HER-2-negative metastatic breast cancer who have progressed after treatment with a CDK4/6 inhibitor plus an aromatase inhibitor. In addition, we plan to evaluate the mechanism of action of SY-1365 in ten patients with any solid tumor accessible for biopsies. We expect that the expansion cohorts in our Phase 1 clinical trial will be open to enrollment in mid-2018.

We currently have five programs in our preclinical and discovery pipeline, including preclinical programs directed to the development of a novel CDK7 inhibitor that can be administered orally, inhibitors of cyclin-dependent kinase 12/13, and inhibitors of an immuno-oncology target, as well as discovery programs related to a gene control target to treat sickle cell disease and in the field of cancer. We plan to nominate a development candidate from one of our preclinical programs during 2018 that we can advance into studies to support a potential investigational new drug application, or IND, filing in 2019. We have and are continuing to use our gene control platform in collaboration with third parties to identify and validate targets in diseases beyond our current areas of focus. To this end, we entered a target discovery, research collaboration and option agreement with Incyte Corporation, or Incyte, in January 2018 under which we will use our platform to identify novel therapeutic targets with a focus on myeloproliferative neoplasms. See “—License and Collaboration Agreements – Incyte” below. 

Our Focus—Gene Control Medicines

There are approximately 200 different cell types in the human body. Despite having identical genomes, each of these cell types has a different function. For example, a skin cell functions differently than a muscle cell despite sharing the exact same DNA. What determines cell type and function is the specific set of genes that is expressed, or turned “on” or “off,” in that given cell. This coordinated activation and repression of genes, known as the cell’s gene expression program, is controlled in part by a number of cellular components acting on non-coding regions of the genome. These components include transcription factors, transcriptional kinases, other transcriptional and regulatory proteins, and RNA. These transcriptional and regulatory proteins bind with specific regions of non‑coding DNA, including a specific category called enhancers, to control the rate and magnitude of gene transcription.

In some diseases, alterations in the physical state or function of the non‑coding regions of the genome can change a cell’s gene expression program, altering the type and function of that cell. Because the altered gene expression program is implemented by transcription factors, transcriptional kinases, other transcriptional and regulatory proteins, and RNA, these proteins and RNA can be important points for therapeutic intervention. Because this biology is fundamental to the function of all cells, it applies across diseases, whether the cause is genetic, environmental, bacterial, viral or multi‑factorial.

Although researchers have long believed that alterations in non‑coding regions of DNA, which account for 98% of the genome, play a key role in driving disease, the scientific community has lacked the tools to study these regions of the genome, rendering them poorly understood. As a result, the discovery and development of targeted therapies to date has focused almost exclusively on abnormal proteins resulting from genetic alterations found in regions of DNA that encode for proteins, which represent less than 2% of the entire genome.

While targeted therapies, in which the right drug is matched to the right patient, have dramatically improved the ability to treat certain cancers and other serious diseases, the opportunity to identify new drug targets by sequencing coding regions of DNA is limited, particularly in cancer. Moreover, in cancer, the clinical benefit from inhibiting

abnormal proteins resulting from single genetic alterations is often short-lived due to drug resistance. Furthermore, many serious diseases continue to go unaddressed due to the limitations of current drug discovery approaches. Taken together, these factors underscore the need for fundamentally new approaches to drug discovery and development.

Gene control medicines are intended to modulate the cell’s underlying gene expression program, influencing the expression of the crucial set of genes that are associated with disease. The relatively few gene control medicines available today are among the most important targeted therapies and are widely used for their approved indications. Drugs that target transcription factors, such as those which target the estrogen receptor in breast cancer, androgen receptor in prostate cancer and glucocorticoid receptor in inflammation, are important examples of gene control medicines that have produced transformative patient benefits. For example, tamoxifen, a gene control medicine targeting a transcription factor, revolutionized the treatment of certain breast cancers, illustrating the significant therapeutic potential of gene control medicines. However, the difficulty in studying non‑coding regions of the genome historically prevented a systematic approach to identifying these critical points of intervention, making gene control a largely untapped field for targeted drug discovery and development.

Based on the work of Syros’ scientific founders Richard A. Young, Ph.D., James Bradner, M.D. and Nathanael Gray, Ph.D., and other scientists, there is now a rapidly growing scientific understanding of how alterations in non‑coding regions of the genome drive disease and how to modulate gene control targets. One of the seminal discoveries that pushed the field forward came out of Dr. Young’s laboratory at the Whitehead Institute for Biomedical Research, or Whitehead. He discovered that a very small unique subset of enhancers, called super‑enhancers, are central to orchestrating gene expression programs. These highly specialized regulatory regions of non‑coding DNA bring together the cellular components needed for gene expression, assembling large amounts of transcription factors, transcriptional kinases and other transcriptional and regulatory proteins to drive increased expression of genes crucial to a given cell’s type and function.

Super‑enhancers exist in both normal and diseased cells. In many different diseases, super‑enhancers are associated with, and drive the expression of, disease‑causing genes. For example, multiple well‑known genes that are implicated in cancer, such as MYC, are associated with super‑enhancers. Notably, analysis of super‑enhancers and their associated genes allows us to rapidly and systematically elucidate gene expression programs, pinpointing the genes crucial to the function of a given cell and providing critical insights into changes in gene expression programs that contribute to disease.

These and other discoveries from our scientific founders, coupled with technological advancements, have enabled our pioneering approach to therapeutic gene control. We believe we have built the first proprietary platform designed to systematically and efficiently analyze non‑coding regions of the genome in healthy and diseased cells taken from patient tissues to identify alterations in gene expression programs that represent optimal points of therapeutic intervention and develop drugs to control the expression of disease‑driving genes. By doing so, we believe our gene control platform will allow us to (i) identify a wide array of potential new drug targets across a range of diseases, (ii) provide a new lens for diagnosing and segmenting patients, including those with complex, multi‑factorial diseases that have eluded segmentation with other genomic‑based approaches, and (iii) advance a new wave of medicines that have the potential to influence multiple drivers of disease through a single target, making them less susceptible to drug resistance and providing patients with a more profound and durable benefit than many of today’s targeted therapies.

Our Gene Control Platform

Our proprietary gene control platform consists of two fundamental pillars:

Identifying Novel Gene Control Targets

Our long‑term goal is to analyze gene expression programs in serious diseases where we believe currently underserved patients can benefit from gene control medicines. We have invested significant resources in building capabilities to discover novel gene control targets and associated biomarkers. Our approach is disease‑focused. Our platform consists of technologies and capabilities to analyze gene expression programs directly from patient tissue samples. We do this by employing our expertise and technologies in computational, gene control and cellular biology. We have in‑licensed intellectual property from the laboratories of our scientific founders at Whitehead and the Dana‑Farber Cancer Institute, Inc., or Dana-Farber. We have significantly improved this licensed technology, including computational algorithms and tissue processing systems, which have produced a highly efficient, scalable approach to analyze gene expression programs using small amounts of patient tissue. These advancements have enabled us to generate a substantial dataset of gene expression programs and to identify targets across many diseases and cell types. Through those efforts, we have identified drug targets in oncology, immuno‑oncology, immunology and monogenic diseases, and have validated several of these targets using biological methods to ablate, or knock out, the target gene or chemical methods to modulate the target’s activity. The discovery and validation of these targets has led to the identification of our product candidates SY‑1425 and SY-1365 as well as additional novel product candidates in earlier stages of research and preclinical development. We plan to analyze gene expression programs in other cancers, and to collaborate with third parties such as Incyte to identify and validate targets in diseases beyond our current areas of focus.

In some diseases, particularly monogenic diseases, research has revealed that a therapeutic benefit might be possible from modulating expression of a single gene. Another application of our platform is to characterize the regulatory region associated with such a gene and identify protein or RNA components that could be modulated to alter the expression of that single gene. We are applying this approach to sickle cell disease based on the hypothesis that increased expression of the fetal hemoglobin gene in individuals with sickle cell disease could be therapeutically beneficial.

Validation of Our Approach

We have validated our approach by successfully linking known targets of successful, marketed drugs to super‑enhancers in human disease tissue. Additionally, using our platform, we have identified super‑enhancers associated with genes linked to the hallmarks of a number of serious diseases.

During 2017, we presented data generated by our scientists in collaboration with researchers at Whitehead in which we analyzed regulatory regions of the genome in cancer stem cell enriched triple-negative breast cancer, or TNBC, cell lines. Cancer stem cells, or CSCs, are known to be involved in resistance to chemotherapies, relapse of disease and development of metastasis. The analysis revealed key genes that may be involved in driving disease relapse and metastasis, with implications for the discovery and development of novel therapies for TNBC. Notably, TP73, a gene that encodes a DNA-binding transcription factor called p73, was found to be a core driver of transcriptional circuitry in CSCs, controlling super-enhancer associated genes involved in cell migration, signal transduction and developmental processes. The set of TP73-controlled genes provide new leads for drug discovery and development with potential to yield much-needed new therapies for TNBC patients.

We also presented data during 2017 from our collaboration(30%) treated with the University of California, San Diego, in which our platformcontrol achieved a CR and four patients (40%) achieved a CRi. The median time to CR/CRi response was used to analyze and compare super-enhancers in cells21 days (ranging from pancreatic cancer patient tumors to those in cells from normal pancreatic tissues. These data showed that the leukemia inhibitory factor, or LIF, gene demonstrated one of the most significant changes in enhancer size from pancreatic tumors in comparison to normal pancreatic tissue. In preclinical mouse models, LIF enhanced the anti-tumor activity of chemotherapy and produced a survival benefit when inhibited using a monoclonal antibody.

Finally, we presented data in the last year showing alterations in regulatory regions of the genome in T cells from14-28) among patients treated with systemic lupus erythematosus, or SLE, revealing genes critical for activating T cells and driving disease. Specifically, we found that genes regulated by activation of the SYK kinase and IRF4 transcription factor are significantly enriched in SLE naïve and memory T cells, suggesting that they are key drivers of T cell activation in SLE and a core part of the transcriptional regulatory circuitry driving the disease. These findings provide biological insights into the autoimmune response in lupus that could lead to the identification of novel drug targets and therapeutic approaches to treat SLE.

Drugging Gene Control Targets

We develop product candidates against gene control targets through:

We have developed significant core internal capabilities in small molecule chemistry, biochemistry and structural biology to characterize the structure and function of transcription factors such as nuclear hormone receptors, transcriptional kinases, chromatin regulators, and other transcriptional and regulatory proteins in order to generate novel chemical matter. We have also developed a sophisticated suite of proprietary assays, which are internally developed tests to measure the biochemical, biophysical, cellular and genomic activity of known and novel compounds against gene control targets.

While our platform is designed to identify drug targets across a broad range of therapeutic areas and therapeutic modalities, our drug discovery and development efforts are focused on small molecule drugs to target specialized proteins responsible for gene expression, including transcription factors, transcriptional kinases and other transcriptional and regulatory proteins. Because these specialized proteins play a central role in implementing gene expression

programs, they are among the most promising and high potential gene control targets for therapeutic intervention. The graphic below illustrates our areas of focus for development of product candidates.

Drugging Transcriptional Kinases

SY‑1365 demonstrates our ability to identify tumors with transcriptional dependencies and to selectively drug transcriptional kinases. Using our core capabilities in gene control biology and biochemistry, we believe that we have the most advanced inhibitor of CDK7 in clinical development.

Drugging Transcription Factors

Leveraging our expertise in biology, biochemistry and chemistry, we have developed a suite of proprietary screens and assays to demonstrate direct binding of novel transcription factor inhibitors and to directly assess transcription factor inhibition in cells. We are using our capabilities and expertise in structure-based drug design and medicinal chemistry to identify small molecules that that interact with transcription factors.

Linking Existing Drugs to Novel Patient Populations

SY‑1425 demonstrates our ability to link existing drugs to novel genomically defined patient populations identified through our platform. We have established a process to systematically screen existing compounds for relationships between drug sensitivity and super‑enhancers that we identify in human disease tissue. To date, we have identified multiple drug and enhancer relationships, the most advanced leading to the identification of SY‑1425. This program exemplifies the general approach of using our platform to identify compounds that could accelerate our clinical development path.

Our Clinical Programs

SY‑1425

Overview

SY‑1425 (tamibarotene) is an oral, potent and selective agonist of the transcription factor RARα. In September 2015, we in‑licensed from TMRC Co., Ltd., or TMRC, the exclusive right to use intellectual property and data rights controlled by TMRC to develop and commercialize SY‑1425 for oncology indications in North America and Europe. We are currently conducting a Phase 2 clinical trial assessing the safety and efficacy of SY-1425 in combination with azacitidine, a hypomethylating agent frequently used to treat patients with AML and MDS, in approximately 25 newly diagnosed AML patients who are not suitable candidates for standard chemotherapy, and in combination with daratumumab, an anti-CD38 therapeutic antibody approved to treat multiple myeloma, in approximately 12 relapsed or refractory AML and higher-risk MDS patients. All patients enrolled or to be enrolled in the trial have been or will be prospectively selected using our proprietary RARA or IRF8 biomarkers. We expect to report initial clinical data from the combination cohorts of the trial in the fourth quarter of 2018.

Linking SY‑1425tamibarotene, venetoclax and azacitidine, as compared to Novel Patient Populations

We leveraged our platform to analyze gene expression programs in primary AML and breast cancer patient tissue samples. We discovered that RARA, the gene that codes for RARα, was associated with a super‑enhancer in some patients’ tumors but not in others. A super-enhancer is a highly specialized region of non-coding DNA central to orchestrating gene expression programs and driving increased expression of genes crucial to the function of a given cell.  The function of RARα differs depending on whether it is bound to its ligand. In the absence of a ligand, RARα represses differentiation. We believe that in tumors25 days (ranging from 17-56) among patients treated with the RARA‑associated super‑enhancer, there is an abundance of unliganded RARα, resulting in the repression of differentiation, thereby locking the cell in an immature, proliferative and undifferentiated state. Introducing a RARα agonist, such as SY‑1425, simulates the activity of a ligand, activating differentiation. 

In collaboration with researchers at Stanford University School of Medicine, we published data in the journal Cancer Discovery during 2017 where we used our gene control, platform to analyze 66 AML patients’ tumor samples and identified six distinct patient subsets based on super-enhancer profiles. The data showed that:

SY‑1425 Development Plan

We plan to develop SY‑1425 in North America and Europe for treatment of AML and MDS in genomically defined subsets of patients with either the RARA or IRF8 biomarker, or both. In September 2016, we initiated a multi-center, open-label Phase 2 clinical trial enrolling genomically-defined subsets of patients with AML and MDS pursuant to an IND accepted by the U.S. Food and Drug Administration, or FDA, in May 2016. In the fourth quarter of 2016, an investigational device exemption for the assay being used to select patients with the RARA and IRF8 biomarkers for inclusion in this trial was approvedCR/CRi being reached by the FDA. In this trial, we have explored the safety and efficacy of SY-1425 as a single agent, and are continuing to explore the safety and efficacy of SY-1425 in combination with other approved and investigational agents, in the following patient cohorts: 

All patients enrolled or to be enrolled in the trial are prospectively selected using our proprietary RARA or IRF8 biomarkers. At the European School of Hematology’s 4th International Conference on AML in October 2017, or ESH, we presented data from 201 evaluable patients screened in our ongoing Phase 2 clinical trial demonstrating that approximately 40% of patients were positive for either the RARA or IRF8 biomarker, or both, and that approximately one-third of the relapsed or refractory AML and higher-risk MDS patients tested were biomarker positive.

Tamibarotene, the active pharmaceutical ingredient of SY‑1425, has been extensively studied and has a well‑established safety profile. In our Phase 2 clinical trial, we are using the same dosage used in the treatment of acute promyelocytic leukemia, or APL, in Japan. This same dosage for SY‑1425 was previously used in a U.S. trial in relapsed and refractory APL, for which an IND was opened. We have exclusively in‑licensed from TMRC certain intellectual property rights controlled by TMRC and the preclinical data package that was used for approval in Japan and the IND filing in the United States for use in all cancer indications in North America and Europe.

At ASH 2017, we presented clinical data from our Phase 2 clinical trial evaluating SY-1425 as a single agent in 29 patients with relapsed or refractory AML or relapsed higher-risk MDS, and in 29 patients with lower-risk transfusion-dependent MDS. The median age100% of patients in the relapsed or refractory and higher-risk AML cohort was 72,triplet arm by the end of cycle one, compared with more than half of the patients having poor risk cytogenetics and 45% having two or more prior therapies. The median age60% of patients in the lower-risk MDS cohort was 76. Indoublet control arm. Consistent with prior clinical experience from the trial, we observed that chronic daily dosingsafety lead-in portion of SY-1425this study, tamibarotene administered at 6 mg/m2 orally divided in twocombination with approved doses of venetoclax and azacitidine was generally well-tolerated,well tolerated, and the overall safety profile demonstrated no additive toxicities or new safety signals, or evidence of increased myelosuppression compared to treatment with a median treatment durationthe doublet combination of 80 daysvenetoclax and patients treated up to eight months and remaining on study.azacitidine. The majority of non-hematologic adverse events observed in the trial were low grade, with the most commonly-reportedlow-grade and reversible, and rates of serious adverse events across all grades and causality being elevated triglycerides (36%), fatigue (31%), and dermatologic effects (28%). The most common Grade 3 or 4 adverse event was elevated triglycerides (16%). 

Atwere comparable between the timestudy arms. As of the data cut-off, there was comparable exposure across the treatment arms, consisting of 66 days (ranging from 8-188) among patients treated with the combination of tamibarotene, venetoclax and azacitidine, and 75 days (ranging from 7-227) for presenting data at ASH 2017, 48 patients were evaluabletreated with the control. Patients will be followed for duration of response, assessment, including 23minimal residual disease-negative response, and survival. We continue to enroll patients in the relapsed or refractory AML or relapsed higher-risk MDS cohortSELECT-AML-1 and 25 patients in the lower-risk transfusion-dependent MDS cohort. Clinical activity was observed in ten of 23 (43%) evaluable patients with relapsed or refractory AML and higher-risk MDS, and two of the 25 (8%) evaluable lower-risk MDS patients, including:

In addition, myeloid differentiation was observed in the bone marrow, consistent with the underlying mechanism of action of SY-1425 as a differentiating agent. The graphic below depicts myeloid differentiation in one relapsed or refractory AML patient starting after one cycle, with marrow blast reduction of greater than 25% beginning after two cycles and continuing to the start of the fourth cycle:

In addition to morphologic evidence of differentiation, immunophenotyping of bone marrow samples demonstrated induction of CD38, a marker of cell differentiation, after one 28-day cycle of treatment in 11 of 13 (85%) patients with pre- and post-treatment immunophenotyping samples.

We are no longer enrolling patients in the cohorts ofanticipate reporting additional data from the trial in which SY-14252024. There can be no guarantee that this additional data will replicate the results of the initial data that was being evaluated as a single agent. reported in December 2023.

Tamibarotene Market Opportunity

We believe that these clinical data, when combined with preclinical data showing the tumor-killing activity of SY-1425 in combination with azacitidine and with daratumumab, support the ongoing development of SY-1425 as a combination agent. SY-1425 has shown synergistic tumor-killing activity in combination with azacitidine as well as with daratumumab in preclinical models of RARA biomarker-positive AML. In combination with azacitidine, SY-1425 demonstrated greater cell death in vitro as well as greater clearance of tumor cells in bone marrow and other tissues and greater depth and duration of tumor response in PDX models, compared to either azacitidine or SY-1425 alone:  

In combination with daratumumab, SY-1425 induced robust immune cell-mediated tumor death in vitro. Notably, AML cells do not normally express high levels of CD38. We have shown that by inducing CD38 expression, SY-1425 sensitizes biomarker-positive AML models to the tumor-killing effects of daratumumab. At the European Hematology Association 22nd Congress held in June 2017, we presented data showing that, by inducing CD38 expression, SY-1425 sensitizes biomarker-positive AML models to the tumor-killing effects of daratumumab. The preclinical studies showed that SY-1425 induced levels of CD38 expression in RARA-high AML cells comparable to those in multiple myeloma cells that are known to be responsive to daratumumab, and led to robust cell-mediated tumor

cell death in RARA-high AML cells when combined with daratumumab, as shown below:

Our ongoing Phase 2 clinical trial is assessing the safety and efficacy of SY-1425 in combination with azacitidine in approximately 25 newly diagnosed AML patients who are not suitable candidates for standard chemotherapy and in combination with daratumumab in approximately 12 relapsed or refractory AML and higher-risk MDS patients. All patients enrolled or to be enrolled in the trial have been or will be prospectively selected using our proprietary RARA or IRF8 biomarkers. The primary endpoints for each of these cohorts of the trial are overall response rate, as determined by IWG criteria, as well as safety and tolerability. Secondary endpoints include duration of response, hematologic improvement and, for the daratumumab combination cohort, CD38 induction. In December 2017, we entered into a clinical supply agreement with Janssen pursuant to which Janssen agreed to supply us daratumumab for use in the trial. We expect to report initial clinical data from the combination cohorts of the trial in the fourth quarter of 2018.

We have entered into an agreement with a third party commercial provider to provide a validated laboratory test under Clinical Laboratory Improvement Amendment, or CLIA, guidelines using a well‑established diagnostic platform and approach that is being used to prospectively enroll RARA and IRF8 biomarker‑positive patients in our clinical trial. This CLIA laboratory test could become the basis for a commercial companion diagnostic. We are evaluating commercial providers to lead the development of a potential commercial companion diagnostic for these biomarkers, but have not yet selected a platform for development of a companion diagnostic test or entered in to an agreement with a third party for this work. We expect to do so in 2018.

We chose AML and MDS for our initial indications due to high levels of observed efficacy of SY‑1425 in our preclinical models, the significant unmet medical need of these patients and the potential for accelerated development. We intend to pursue additional indications, including breast cancer, upon establishing proof‑of‑concept in AML and MDS. Our preclinical data in breast cancer supports the development of SY‑1425 in genomically defined subsets of patients with breast cancers with our RARA biomarker. We also believe there are subsets of patients with other tumor types with our RARA biomarker and continue to research the role of the super‑enhancer associated with RARA in additional cancers.

Preclinical Data in Breast Cancer

Additionally, in our preclinical studies in breast cancer, many of which were presented at the San Antonio Breast Cancer Symposium in December 2016, we observed a strong link between sensitivity to treatment with SY‑1425 and breast cancer tumors with the RARA biomarker. As shown below, SY‑1425 was observed to result in significant tumor growth inhibition in PDX models derived from tumors with the RARA biomarker but was observed to have no effect in RARA biomarker-negative PDX models. Our in vitro studies have also shown that SY-1425 increased the anti-

tumor effects of standard-of-care therapies, including tamoxifen and palbociclib, in ER-positive breast cancer cells with high RARA expression and lapatinib in HER2-positive breast cancer cells with high RARA expression.

Prior Clinical Data

Tamibarotene, the active pharmaceutical ingredient of SY‑1425, is approved and marketed in Japan under the brand name Amnolake® for treatment of acute recurrent or intractable APL. Given the demonstrated efficacy of the drug in acute recurrent or intractable APL, we may evaluate SY‑1425 for treatment of APL in North America and Europe, but we do not have any current plans to do so. Extensive clinical work had been conducted on tamibarotene prior to us in‑licensing it from TMRC. The effectiveness of tamibarotene has been evaluated in patients with APL, including for relapsed patients and as maintenance therapy for newly diagnosed patients.

In all these studies, tamibarotene was generally well tolerated. Adverse effects included mild or moderate dry skin, skin rash, headache and bone pain, as well as retinoic acid syndrome and elevated levels of cholesterol, lipids, liver function enzymes and white blood cells, which were severe in certain cases. One such adverse effect, retinoic acid syndrome, is referenced on the drug’s label and was infrequently observed clinically. Retinoic acid syndrome is a side effect associated with retinoids and arsenic trioxide and can be mitigated by regular monitoring of clinical parameters,

including white blood cell counts. A summary of four published clinical studies of tamibarotene use in APL is provided below.

Table legend:

Tamibarotene was also studied in a Phase 2 clinical trial for the treatment of unselected late‑stage non‑small cell lung cancer under a previous license between TMRC and a third party. The trial evaluated the efficacy and safety of adding tamibarotene or placebo to paclitaxel and carboplatin in patients with stage IIIb (plus pleural effusion) or IV non‑small cell lung cancer. This trial was terminated when interim data suggested that a primary endpoint of progression‑free survival for 18 months after starting therapy would not be reached. Interim data also showed that tamibarotene combined with paclitaxel and carboplatin chemotherapy was associated with increased toxicity in this non‑selected non‑small cell lung cancer patient population.

SY‑1425 Market Opportunity

We believe that SY‑1425 has the potential to address significant unmet medical need across a range of blood cancersfor HR-MDS and solid tumors. At ESH, we presentedunfit AML patients with RARA gene overexpression. Based on data from 201 evaluableour clinical trials, we believe approximately 50% of HR-MDS patients screened in our ongoing Phase 2 clinical trial demonstratingand approximately 30% of AML patients are positive for RARA overexpression.

We believe that approximately 40% of18,500 patients were positive for either the RARA or IRF8 biomarker, or both, and that approximately one-third of the relapsed or refractory AML and higher-risk MDS patients tested were biomarker positive.

There are an estimated 33,000 new AML diagnosesdiagnosed with HR-MDS in the United States Canada and Europe annually and we expect the five largest European countries each year. While several new drugstotal global market for the treatmentmyelodysplastic syndrome, or MDS, patients of AMLall risk groups to grow to approximately $4.7 billion by 2028. HR-MDS is progressive in nature and has a poor prognosis. Disease-related cytopenias result in significant morbidity and mortality, with more than half of HR-MDS patients progressing to AML. There have been approvedno new drug approvals for HR-MDS since 2006 other than hypomethylating agents, or HMAs. Azacitidine is an HMA that represents the current standard of care but offers a low CR rate of 17%, with a median overall survival of approximately 18.6 months.

In addition, we believe that approximately 25,000 patients are diagnosed with unfit AML in the last year,United States and Europe annually and we expect the overall total global market for all AML remains an areapatients to grow to approximately $7.5 billion by 2028. Despite a significant number of new product approvals in AML since 2018, there continues to be a significant unmet medical need. According to the American Cancer Society, newly diagnosed AML patients in the United States have a 27% five‑year survival rate. MoreIt is estimated that more than half of newly diagnosed AML patients are elderly or unfit for treatment with intensive therapies, underscoring the need for well-tolerated therapies that can be used in combination. Venetoclax with azacitidine is the standard therapies, leaving this groupof care, with limiteda 66% CR/CRi rate, a 37% CR rate and median OS of 14.7 months. Approximately one-third of patients do not respond, and nearly all relapse with a very poor prognosis, with median OS of only 2.4 months.

Other Assets

SY-2101

SY-2101 was previously in development for the treatment options and an average survival of less than one year. Despite initial responses to therapy in select patients, the majorityacute promyelocytic leukemia, or APL, a subtype of AML defined by a fusion of the RARA and promyelocytic leukemia genes. APL represents approximately 10% of all AML cases, and approximately 2,000 patients relapse or become refractory to current treatment options. There are an estimated 10,000 cases of relapsed or refractory AML each yeardiagnosed with APL in the United States Canada and the five largest European countries each year. In the absence of adequate therapies, these relapsed or refractory patients may be put into clinical trials for new and emerging therapies, and average survival of these patients is estimated to be less than six months.

Europe annually. An intravenously

There are approximately 32,000 new MDS diagnosesarsenic trioxide, or ATO, is approved for use in the countries listed above each year,combination with All-Trans-Retinoic-Acid, or ATRA, in patients with newly diagnosed lower-risk APL and, while curative in more than 80% of patients, its administration requires up to one‑third140 two- to four-hour infusions over the typical course of these newly diagnosed patients estimatedinduction and consolidation treatment. We believe SY-2101 has the potential to be likely to progress to AML. Of these patients, approximately 7,500 MDS patients have newly-diagnosed, higher‑risk MDS. Inbecome the United States, newly-diagnosed, higher‑risk MDS patients are expected to survivestandard-of-care frontline therapy for 0.8-1.6 years, and relapsed or refractory higher-risk AML patients have an average survival of less than six months. As with AML, treatment options for these patients are limited, with no new drugs having been approved forAPL by providing a substantially more convenient option that reduces the treatment relapsed or refractory, higher-risk MDS in overburden on patients, improving access, and lowering costs to the healthcare system. In a decade.

There are an estimated 2,500 new APL cases diagnosed in the United States, Canada and the five largest European countries each year. Despite advances in treating APL, approximately 20-30% of APL patients relapse and require salvage therapy.

SY‑1365

Overview

SY‑1365 is a highly potent and selective small molecule CDK7 inhibitor. CDK7, a member of the cyclin‑dependent kinase, or CDK, family, is a transcriptional kinase that plays a central role in the expression of key tumor-driving genes, transcription factors, and anti-apoptotic proteins. CDK7 activity has been implicated in various solid tumors with transcriptional dependencies. Inhibiting CDK7 preferentially lowers the expression of disease‑driving transcription factors controlled by super‑enhancers, and results in the preferential killing of cancer cells over non‑cancerous cells. Using our platform, we have generated several potent and selective small molecule CDK7 inhibitors, including SY‑1365. 

SY-1365 is currently in aprior Phase 1 clinical trial, SY-2101 demonstrated bioavailability, pharmacokinetic exposures similar to IV ATO, and a generally well-tolerated safety profile. Based on an interim analysis from our Phase 1b dose confirmation study of SY-2101 in adult APL patients undergoing consolidation treatment with IV ATO plus ATRA, administration of SY-2101 has demonstrated comparable exposures to IV ATO at the approved dose of 0.15 mg/kg, high oral bioavailability, and a well-tolerated safety profile, consistent with the prior Phase 1 study. In October 2023, we announced that we would stop further development in SY-2101 in order to prioritize the ongoing development of tamibarotene. We may in the future pursue further development of SY-2101 subject to additional capital availability.

SY‑5609

We are currently seeking out-licensing opportunities for the further development of SY-5609, our highly selective and potent inhibitor of cyclin dependent kinase 7, or CDK7. At the American Society for Clinical Oncology Annual Meeting held in June 2023, or ASCO 2023, we presented data from the completed Phase 1/1b clinical trial evaluating SY-5609 in patients with advancedrelapsed/refractory pancreatic ductal adenocarcinoma, or PDAC, hormone receptor positive, or HR+, breast cancer and other solid tumors. We believe that SY-1365 is the most advanced selective CDK7 inhibitor in clinical development. SY-1365, alone and in combination with other therapeutic agents, has shown significant anti-proliferative and pro-apoptotic activity in multiple in vitro and in vivo modelsThe Phase 1/1b trial of difficult-to-treat solid tumors, including ovarian and breast cancers. SY-1365 has induced anti-tumor activity in both cell line-derived xenograft and patient-derived xenograft models, including tumor regressions atSY-5609 included a twice weekly dosing regimen consistent with the initial regimen being evaluated in our Phase 1 clinical trial. SY-1365 has also shown to anti-tumor activity in models of blood cancers such as acute leukemias, as evidenced by in vitro cell death or complete tumor growth inhibition in cell-derived xenografts. Finally, SY-1365 has been shown to lower the expression of oncogenic transcription factors, including MYC, a mechanistic effect consistent with inhibition of CDK7.

SY‑1365 Clinical Development Plan

In April 2017, the FDA accepted our investigational new drug, or IND, application to advance SY-1365 into a Phase 1 clinical trialdose escalation study evaluating single agent SY-5609 in patients with select advanced solid tumor malignancies for whom standard curative or palliative measures do not exist or are no longer effective. This trial began enrolling patients in the second quarter of 2017. The trial is testing the safety and tolerability of escalating doses of SY-1365 with the goal of establishing a maximum tolerated dose and a recommended Phase 2 dose and schedule. Additional study objectives include assessing pharmacodynamic changes and early signs of biological activity using biomarkers and clinical efficacy as measured by response rate using radiographic measures. We are currently exploring both a twice-weekly and a once-weekly dosing regimen, and we anticipate that approximately 35 patients will be enrolled in the dose escalation phase of the trial.

Once a maximum tolerated dose is reached in the dose escalation phase of the Phase 1 clinical trial and the recommended dosing schedule is identified, we intend to open expansion cohorts evaluating SY-1365 in multiple ovarian cancer populations as a single agent as well as in combination with carboplatin, a chemotherapeutic agent. The ovarian cancer populations include a 24-patient cohort evaluating SY-1365 as a single agent in patients who have relapsed after three or more prior therapies, a 24-patient cohort evaluating SY-1365 in combination with carboplatin in patients who relapsed after one or more prior therapies but who may still benefit from additional platinum-based treatment, and a 12-patient pilot cohort evaluating SY-1365 as a single agent in primary platinum-refractory disease. We also plan to evaluate SY-1365 in combination with fulvestrant, a hormonal medicine, in 12 patients with HR+, HER-2-negative metastatic breast cancer who have progressed after treatment with a CDK4/6 inhibitor and aromatase inhibitor.  

In addition, we plan to evaluate the mechanism of action of SY-1365 in ten patients with any solid tumor accessible for biopsies. A schematic of our Phase 1 clinical trial of SY-1365 is below:

We expect that the expansion cohorts in our Phase 1 clinical trial will be open to enrollment in mid-2018 and that we will report clinical data from the dose-escalation phase of our Phase 1 trial, including safety and pharmacokinetic/pharmacodynamic data, in the fourth quarter of 2018.

Our Preclinical Data

Our clinical development program for SY-1365 is based on a robust preclinical development program showing significant anti-proliferative activity of SY-1365 in multiple in vitro and in vivo models of difficult-to-treat solid tumors and blood cancers, including ovarian cancer, breast cancer and AML. 

To evaluate the in vivo activity of SY-1365 in ovarian cancer, we evaluated SY-1365 in a number of patient-derived xenograft models derived from heavily-pretreated ovarian cancer patients and compared tumor growth in mice administered SY-1365 twice-weekly at the maximum tolerated dose in that species to untreated mice. Significant tumor growth inhibition was observed in many of these models following administration of SY-1365, with data from a representative model set forth in the graphic below:

We have also shown the synergistic effect of treatment with SY-1365 and platinum-based chemotherapy in  several ovarian cancer cell lines, as exemplified in the graphic below:

The inhibitory activity of SY-1365 was evaluated in vitro in many breast cancer cell lines, representing different subgroups of breast cancer. SY-1365 showed anti-tumor activity in all subgroups, inducing cell death in 15 of 19 TNBC cell lines and 17 of 21 HR+ and HER2-positive cell lines. At the San Antonio Breast Cancer Conference held in December 2017, we presented the results of our analysis of the anti-tumor activity of SY-1365 in xenograft models of TNBC. In the graphic below, we showed a complete response in mice administered SY-1365 twice weekly at the maximum tolerated dose in that species as compared to untreated mice.

We, together with several of our academic collaborators, have demonstrated that SY-1365 could inhibit many HR+ cancer cells, including those with a form of acquired resistance to a class of hormonal treatments known as aromatase inhibitors, and that SY-1365 was able to inhibit breast cancer cell lines in vitro that no longer respond to inhibitors of CDK4/6. In addition, SY-1365 showed in vitro synergy with fulvestrant in several HR+ breast cancer cell lines. SY-1365 also showed a combination effect with fulvestrant in an in vivo model of HR+ breast cancer, as shown in the graphic below. We believe that these data, taken together, provide a mechanistic rationale for evaluating SY-1365 in combination with fulvestrant in HR+ breast cancer, and a combination safety lead-in designed to inform a dose expansion study evaluating the doublet regimen of SY-5609 and gemcitabine and the triplet regimen of SY-5609, gemcitabine and nab-paclitaxel in patients with HR+ metastatic breast cancer who have progressed following treatment with a CDK4/6 inhibitor plus an aromatase inhibitor.PDAC in their second or third line of treatment.

We also believe that SY-1365 has potential in blood cancers as well as in other solid tumor malignancies.  The preclinical rationale for potential development of SY-1365 in blood cancers includes data we presented at ASH 2017 demonstrating that SY-1365:

In addition, weASCO 2023 demonstrated that SY-1365 synergizedthe maximum tolerated dose, or MTD, of SY-5609 as a single agent was 10 mg using a 7 day on/7 day off dosing schedule. For the doublet regimen, the MTD was 5 mg SY-5609 plus 1000 mg gemcitabine. A MTD was not established using the triplet cohort of SY-5609, gemcitabine and nab-paclitaxel. Each of the single agent, doublet and the triplet regimens were generally well-tolerated with venetoclax, an investigational product being developedmostly low-grade events. Encouraging clinical activity was observed with SY-5609 both as a single agent (10 mg) and in AML, in AML cell lines in vitro, and that, as showncombination (4 or 5 mg plus gemcitabine). Among the three response evaluable patients with select solid tumors in the graphic below,10 mg single agent cohort, data demonstrated a 100% disease control rate, or DCR. This included one patient with PDAC who experienced a 10% tumor reduction. Of the administrationnine response-evaluable patients treated with 4 or 5 mg of SY-1365 plus venetoclaxSY-5609 in combination with gemcitabine, the data demonstrated a 44% DCR (four patients). The 10 mg single agent DCR of 100% is superior to results observed with lower doses of SY-5609 on the 7 day on/7 day off schedule and the doublet DCR of 44% is comparable to current second-line benchmarks.

Patients enrolled in the fulvestrant cohort of the study presented with advanced disease: 78.6% (11 of 14 patients) had liver metastases and were heavily pre-treated, 78.6% (11 of 14 patients) had received five or more prior therapies, 100% (14 of 14 patients) had progressed on CDK4/6 therapy, and 85.7% (12 of 14 patients) had received prior fulvestrant. The combination of SY-5609 and fulvestrant demonstrated an in vivo model resulted in greater tumor growth inhibition than eitheracceptable safety profile across a variety of dosing schedules. The adverse event profile of the combination was generally consistent with the safety profile of single agent alone. 

We also presented dataSY-5609 or fulvestrant, with no new safety signals emerging from the combination at the 2017 AACR-NCI-EORTC Molecular Targetsevaluated doses and Cancer Therapeutics conference showing the relationship between the pharmacokinetic, pharmacodynamic and anti-tumor activity of SY-1365 in multiple preclinical models of TNBC and AML,dosing schedules. An MTD was not established. Twelve patients were evaluable for response across a range of doses and regimens from daily to weekly dosing. These data showeddosing schedules. Five of 12 achieved stable disease, or SD, for a prolonged pharmacodynamic effect, as measured by CDK7 target occupancy, with a half-lifeDCR of approximately42%; three days, which supports the intermittent dosing regimen being evaluated in our ongoing Phase 1 clinical trial. We are using an assay measuring target occupancy as a target engagement marker in this trial. These data also showed a dose-dependent relationship between CDK7 target occupancy and anti-tumor activity in a preclinical model of AML, and sustained tumor regressions in multiple in vivo models using a twice-weekly dosing regimen.

SY‑1365 Market Opportunity

With SY‑1365, we believe we have the opportunity to address significant unmet medical needs across a range of cancers. The initial disease-specific focus of our clinical development program for SY‑1365 is expected to be in ovarian cancer and HR+ breast cancer.

Ovarian cancer is the fifth most common cause of cancer death in women. There are an estimated 59,000 ovarian cancer diagnoses each year in what we refer to as the developed pharmaceutical markets – the United States, Canada, Japan and the five largest European countries by population, which are Germany, the United Kingdom, France Spain and Italy. Of these, approximately 70% have high-grade serous ovarian cancer and present with advanced disease at initial diagnosis.  The standard of care treatment for these patients is platinum-based chemotherapy. It is estimated that 10-15% of these five patients are “platinum-refractory,” which means that they progress during, or in lessachieved target lesion regression. Three patients remained on treatment with SD for greater than one month of completion of, platinum-based treatment. There are limited treatment options for platinum-refractory patients.  Approximately 30% of these patients are “platinum-resistant,” which means that they progress within six months, of completing platinum-based treatment. We believe that subsequent treatment options for theseincluding patients atwith the present time have limited activity and significant toxicities. Approximately 55-60% of these patients are “platinum-sensitive,” which means that they initially respond to platinum-based treatment, but progress after six months TP53 mutation, prior fulvestrant exposure and/or more. The majority of these patients relapse within three to five years. The planned expansion cohorts of our Phase 1 clinical trial of SY-1365 include patients who have progressed after platinum-based treatments.liver disease.

Breast cancer is the most common tumor type in women and is the leading cause of cancer death in women worldwide. According to the American Cancer Society, approximately 266,000 new breast cancer cases will be diagnosed in the United States in 2018,  with approximately 41,000 deaths from the disease. Approximately 80% of breast cancers express estrogen receptors, progesterone receptors, or both. Hormone-based therapies are the cornerstone for these HR+ cancers. In metastatic breast cancer, AIs are frequently used as a first-line treatment option.  Recent approvals of a class of drugs that inhibit CDK4/6, such as palbociclib and ribociclib, have resulted in their use in combination with AIs for the treatment of HR+, HER2-negative, breast cancers. Patients who relapse following treatment with an AI in combination with a CDK4/6 inhibitor currently have few effective treatment options.

Other Programs

We currently have five programs in our preclinical and discovery pipeline, including preclinical programs directed to the development of a CDK7 inhibitor that can be administered orally, inhibitors of cyclin-dependent kinase 12/13, and inhibitors of an immuno-oncology target, as well as discovery programs related to a gene control target to treat sickle cell disease and in the field of cancer. We plan to nominate a development candidate from one of our preclinical programs during 2018 that we can advance into studies to support a potential IND filing in 2019, consistent with our objective of filing, on average, an IND every other year. 

We are using our platform to analyze gene expression programs in tumors and immune cells across various cancers and monogenic diseases to identify optimal points of therapeutic intervention in specific subsets of patients and to create a pipeline of novel product candidates targeting transcriptional and regulatory proteins. We are also using our platform in collaboration with third parties to identify and validate targets in diseases beyond our current areas of focus.  To this end, we entered a target discovery, research collaboration and option agreement with Incyte in January 2018 under which we will use our platform to identify novel therapeutic targets with a focus on myeloproliferative neoplasms.  See “—License and Collaboration Agreements–Incyte” below.

Research and Development Expense

During the years ended December 31, 2017, 2016 and 2015, our research and development expenses were $41.9 million, $37.8 million and $24.4 million, respectively. For additional information regarding our research and development expense as well as our revenues, operating loss, and total assets, see the sections of this report entitled, “Financial Statements” in Part II, Item 8 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7.

Intellectual Property

We file patent applications directed to our gene control platform, proprietary compositionvarious compositions of matter, formulations and methods related to our product candidates and compounds in an effort to establish intellectual property positions regarding all aspectsearlier stages of our business, including new chemical entities, or NCEs,development and uses of these NCEs in the treatment of diseases.other commercially relevant inventions. As of February 28, 2018,December 31, 2023, we own or co-own 25 issued U.S. patents and 16 pending U.S. utility patent applications, excluding patents owned by Tyme Inc., our wholly owned subsidiary. We are pursuing or maintaining 131 corresponding patent applications that are pending or granted in various jurisdictions outside the United States, including Europe, Japan, Australia, Canada and China, and we own two issued U.S. patents, 12 pending U.S. provisional patent applications twelve U.S. pending patent applications, 41 foreign applicationsthat are pending in a number of jurisdictions, including Europe, Australia, Japan, China, and Canada, and four pendingaccordance with the Patent Cooperation Treaty, or PCT, patent applications. In addition, as of February 28, 2018, we have exclusively licensed six issued U.S. patents, three U.S. pending patent applications, five issued foreign patents and 12 foreign patent applications pending in a number of jurisdictions, including Australia, Canada, China, Europe, and Japan.Treaty. A significant portion of our ownedthe patents and licensed pending patent applications we own pertain to our product candidates that are in clinical development,

to methods of using them in the treatment of disease, and associated biomarkers, key discovery and preclinical programs, specifically our CDK7 inhibitor program, and transcription factor modulators, and our gene control platform.to methods of selecting patients for treatment based on biomarker expression.

Our intellectual property portfolio as of February 28, 2018December 31, 2023 is summarizedfurther described below. For some of our pending patent applications, prosecution has yet to commence. ProsecutionProsecuting patent applications to allowance is often a lengthy process, during which the scope of the claims initially submitted for examination by the U.S. Patent and Trademark Office, or USPTO,various patent offices is often significantly narrowed, byand some claims may never be granted. It is possible that we will amend the time they issue, if they issue at all. We expect this to be the case with respect toclaims of our pending patent applications referred to below. In addition, welimit their scope. We may also elect to abandon prosecution of some of our pending patent applications, particularly those pending outside of the United States, if we determine that these applications do not have strategic significance to our programs or platform.programs.

SY‑1425

Our owned intellectual propertyThe patent portfolio we own for SY‑1425tamibarotene contains twoseven issued U.S. patents, twofour pending U.S. pendingutility patent applications, 11 foreignand 66 applications pending or granted in a number of jurisdictions,countries other than the United States, including Europe, Japan, Australia, Japan,Canada, China, Russia, Israel and Canada,Mexico. Some of these patents and three pending PCT patent applications directeddisclose methods of identifying and treating patients who are sensitive to patient stratification methodsRARα agonists, including tamibarotene, based on the expression of certain biomarkers, combinations andincluding RARA. Some of the applications disclose methods of use for agoniststreating selected patients with tamibarotene alone or with a combination of RARα, including SY-1425.tamibarotene and a second agent, such as azacitidine. One of our issued patents, U.S. Patent No. 9,845,508, covers a methodmethods of diagnosing and treating human patients suffering from non-APL AML by administering tamibarotene; the patients by determining whether they have elevated levelsare diagnosed based on the level of RARA messenger RNA, or mRNA, and, if they do, administering SY-1425.previously determined to be present in a sample of diseased cells from the subject. The granted claims of a second patent, U.S. Patent No. 10,167,518, cover methods of treating human subjects suffering from MDS. Selection of subjects for treatment is again based on the level of RARA mRNA expression, and subjects with RARA overexpression are treated with tamibarotene. A third patent, U.S. Patent No. 9,868,994, covers a methodmethods of treating non-APL AML andor MDS by administering SY-1425tamibarotene to patients knowna patient when a defined sample obtained from the patient is determined to have an elevated level of IRF8 mRNA or elevated levels of both IRF8 and RARA mRNA. For purposesA fourth patent, U.S. Patent No. 10,240,210, covers methods of these patents,treating non-APL AML does not include acute promyelocytic leukemia, or APL.MDS with a combination of tamibarotene and azacitidine when a defined sample from the subject has been determined to have an elevated RARA mRNA level or an elevated IRF8 mRNA level. A fifth patent, U.S. Patent No. 10,697,025, covers methods of treating subjects who have non-APL AML with tamibarotene; treatment proceeds when a sample of diseased cells from the subject was determined to have a super enhancer associated with a RARA gene or a level of primary RNA transcripts from the RARA gene that is equal to or above a pre-determined threshold. A sixth patent, U.S. Patent No. 11,053,552, covers methods of treating non-APL AML or MDS by administering a combination of tamibarotene and a second therapeutic agent, with further specification of the analysis of an IRF8 biomarker and/or a RARA biomarker. A seventh patent, U.S. Patent No. 11,447,831, covers methods of treating subjects who have MDS with tamibarotene; treatment proceeds when a sample of diseased cells from the subject is determined to have a super enhancer associated with a RARA gene or a level of primary RNA transcripts from the RARA gene that is equal to or above a pre-determined threshold. We believe that our currently-issuedthese seven U.S. patents related to our SY-1425 program are eligible for listing in the U.S. Food and Drug Administration’s OrangeFDA’s “Orange Book. The U.S.” These patents, and pending applications andas well as any U.S. or non‑U.S.additional patents that may grant from applications claiming priority to these pending applications, if issued,the benefit of the same filing date as the currently granted patents, have statutory expiration dates no earlier than March 2036. Patent term extensions could result in later expiration dates.

In addition, we have an exclusive license from TMRC Co. Ltd., or TMRC, to practice the inventions claimed in one U.S. patent and five patents or applications granted or pending in the United States or other jurisdictions, including Canada and Europe. The claims of the U.S. patent are exclusively licenseddirected to a tamibarotene capsule preparation. We do not have composition of matter patent protection with respect to tamibarotene.

The patent portfolio we own for SY‑2101 contains patents that have granted in North Americathe United States, Europe, Japan, China, Australia, Taiwan, and Mexico, and patent applications that are pending in the United States, Europe under two issued U.S.and other major pharmaceutical markets. Generally, these patents and five issued foreignapplications disclose methods of making lyophilized compositions comprising arsenic and formulations containing the lyophilized arsenic that can be orally administered to patients having APL and other hematological malignancies. These patents, as well as any additional patents that may grant from applications claiming the benefit of the same filing date as the currently granted patents, have statutory expiration dates no earlier than February 2036. Patent term extensions could result in later expiration dates.

The patent portfolio we own for SY-5609 contains patents that have granted in the United States, Europe, Japan and several additional countries, and patent applications that are pending in Canadathe United States, Europe and Europe,other major pharmaceutical markets generally directed to the compound SY-5609 and related CDK7 inhibitors, pharmaceutical kitsformulations containing them, and drug combinations comprising tamibarotenemethods of making and certain other chemotherapeutic agents, certain formulationsusing them. Any patent that has issued or will issue and that

claims the benefit of tamibarotene, and crystal formsthe priority date of tamibarotene and their preparation. One licensed issued U.S.one or more of these patents or patent covering formulations hasapplications will have a statutory expiration date of April 2028. The other licensed issued U.S. patent covering crystals has a statutory expiration date of August 2021.ranging from October 2034 to November 2042. Patent term adjustments or patent term extensions could result in later expiration dates for each of these patents. We do not have composition of matter patent protection with respect to SY‑1425.dates.

SY‑1365

The intellectual property portfolio for SY‑1365 and our other CDK7 inhibitors contains patent applications directed to compositions of matter for our compounds and analogs, compositions of matter for CDK7 inhibitors having different structural features (i.e., different compound families), as well as methods of use, biomarkers, and formulations for these novel compounds. As of February 28, 2018, we own six pending U.S. patent applications, 29 pending foreign applications in a number of jurisdictions, including Europe, Canada, China, Japan and Australia and one pending PCT patent application and seven pending U.S. provisional applications, directed to this program. Any U.S. or non‑U.S. patents issuing from these pending applications or applications claiming priority to the pending applications covering our compounds and related methods of use will have a statutory expiration date ranging from October 2034 to January 2039. Patent term adjustments or patent term extensions could result in later expiration dates.

We are also exclusively licensed under one U.S. patent, two pending U.S. patent applications and 11 pending foreign patent applications in a number of jurisdictions, including Australia, Canada, Europe, and Japan, directed to this program.

Other Programs

The intellectual property portfolio for our other programs contains patents and patent applications directed to compositions of matter for inhibiting transcription factors and immuno-oncology targets in multiple compound families, and methods of treating various diseases, including cancer and immunological diseases, through inhibition of specific transcription factor(s) or gene products. As of February 28, 2018, we own five U.S. provisional patent applications and three U.S. patent applications and are exclusively licensed to two issued U.S. patents directed to our other programs. The licensed U.S. patents have statutory expiration dates of July 2032 and November 2033. Any U.S. or non‑U.S. patents issuing from the pending applications or applications claiming priority to the pending applications covering transcription factor inhibitors, immuno-oncology target inhibitors or methods of treating disease by inhibition of transcription factors or gene products will have statutory expiration dates ranging from February 2031 to December 2038.

Platform

The intellectual property portfolio directed to our platform includes patent applications and patents directed to super‑enhancers and their detection and uses thereof to detect novel disease targets. As of February 28, 2018, we own one pending U.S. patent application and one pending patent application in Europe directed to these technologies which, if issued, will have a statutory expiration date of March 2034. In addition, we have an exclusive license to one issued U.S. patent, one U.S. pending patent application and one pending foreign patent application in Europe, directed to these technologies. The U.S. and foreign patent applications that we own are directed to the identification of new super‑enhancer components and methods of treating diseases by targeting those novel components, and if issued, will have a statutory expiration date no earlier than March 2034. The licensed U.S. patent has a statutory expiration date of October 2033 and the licensed pending applications directed to super‑enhancers and their detection and uses thereof to detect novel disease targets, if issued, will have a statutory expiration date no earlier than October 2033.

The term of individual patents depends upon the legal term for patents in the countries in which they are obtained. In most countries, including the United States, thea patent term isexpires 20 years from theits earliest effective filing date of a non‑provisional patent application.date. In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patenteeto compensate for administrative delays by the U.S. Patent and Trademark Office, or USPTO, in examining and granting a patent or may be shortened if a patent is terminally disclaimed over an earlier filed patent. The term of aA patent that covers a drug or biological producttherapeutic agent may also be eligible for patent term extension when FDA approval is granted, provided statutory and regulatory requirements are met. See “—Government Regulation and Product Approvals—Marketing Authorization and Exclusivity”Authorization” below for additional information on such exclusivity. In the future, ifIf and when our product candidatesproducts receive approval by the FDA or foreign regulatory authorities,agencies in other countries, we expect to apply for a patent term extensionsextension on an issued patentspatent covering those drugs,a given product, depending upon the length of the clinical trials for each drugproduct and other factors. There can be no assurance that any of our pending patent applications will issue or that we will benefit from any patent term extension or favorable adjustment to the termterms of any of our patents.

As with other biotechnology and pharmaceutical companies, our ability to maintain and solidify our proprietary and intellectual property position forexclude others from making, using, or selling our product candidates and technologiesother inventions will depend on our success in obtaining effectivevalid patent claims and enforcing those claims, if granted. Ourclaims. One or more of our pending patent applications, and any patent applications that we may in the future file or license from third parties in the future may not, however, result in the issuance of patents.proceed to grant as an issued patent. We also cannot predict the breadth of claims that may be allowed or enforced in our patents. Any issued patents that we may receive in the futurepatent may be challenged, invalidated or circumvented. For example, we cannot be certain of the priority of inventions covered by pending third‑party patent applications. If third parties prepare and file patent applications in the United States that also claim technology or therapeutics to which we have rights, we may have to participate in interference proceedings in the USPTO to determine priority of invention, which could result in substantial costs to us, even if the eventual outcome is favorable to us, which is highly unpredictable. In addition, because of the extensive time required for clinical development and regulatory review of a product candidate we may develop, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby limiting protection such patent would afford the respective product and any competitive advantage such patent may provide.

In addition to patents and pending patent applications, we rely upon unpatented trade secrets andunpatentable know‑how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, by executing confidentiality, agreements with our collaboratorsinvention assignment, and scientific advisors, and non‑competition, non‑solicitation, confidentiality, and invention assignmentnon-solicitation agreements with our employees, and consultants. We have also executed agreements requiring assignment of inventions with selectedcollaborators, scientific advisors and collaborators.consultants as appropriate. The confidentiality agreements we enter into are designed to protect our proprietary information and the agreements or clauses requiring assignment of inventions to us are designed to grant us ownership of technologies that are developed through our relationship with the respective counterparty. We cannot guarantee, however, that these agreements will afford us adequate protection of our intellectual property and proprietary information rights.

License and Collaboration Agreements

We are a party to global target discovery collaboration with Incyte under whichcollaborations that we believe will contribute to our ability to advance development and ultimately commercialize our product candidates. We expect to enter into additional collaborations in the future. For instance, we intend to identifyseek to enter into collaborations where we believe that realizing the full commercial value of our development programs will require access to broader geographic markets or the pursuit of broader patient populations or indications. Our existing collaborations impose, and validate novel therapeutic targets with a focus on myeloproliferative neoplasms. By enteringany collaborations we may enter into this collaboration, we aimin the future are likely to use our platform to benefit patients with diseases beyond our current areas of focus, although we do not have any rights to commercialize any products arising from this collaboration. These collaborations impose, certain performance obligations on us. We may enter into agreements similar to this one in the future.

In addition, we are a party to a number of license agreements under which we license patents, patent applications and other intellectual property from third parties. We enter into these agreements to augment our proprietary intellectual property portfolio. TheThis licensed intellectual property covers some of the compounds that we are researching and developing and some of the scientific processes that we use. These licenses impose various diligence and financial payment obligations on us. We expect to continue to enter into these types of license agreements in the future.

Incyte Corporation

In January 2018, we entered into a target discovery, research collaboration and option agreement with Incyte. Under this agreement, we will use our gene control platform to identify novel therapeutic targets with a focus on myeloproliferative neoplasms, and Incyte will receive options to obtain exclusive worldwide rights to intellectual property resulting from the collaboration for the development and commercialization of therapeutic products directed to up to seven validated targets. Incyte will have exclusive worldwide rights to develop and commercialize any therapies under the collaboration that modulate those validated targets.

Under the terms of the collaboration agreement, Incyte paid us $10.0 million in up-front consideration, consisting of $2.5 million in cash and $7.5 million in pre-paid research funding. Our activities under this agreement are subject to a joint research plan and, subject to certain exceptions, Incyte will be responsible for funding our activities under the research plan, including amounts in excess of the pre-paid research funding amount. We are eligible to receive target selection milestone payments and option exercise fees of up to an aggregate of $54.0 million if Incyte selects the maximum number of targets for validation and exercises its option to obtain exclusive rights to collaboration intellectual property for therapeutic products directed to all seven validated targets. Should any therapeutic product be developed by Incyte against a target as to which Incyte has exercised its option to obtain exclusive rights to collaboration intellectual property, we will be eligible to receive milestone payments and, if approved and commercialized, royalty payments from Incyte. For each of the seven validated targets, we would become eligible to receive from Incyte a total of up to $50.0 million in development and regulatory milestone payments. If products arising from the collaboration are approved, we would become eligible to receive from Incyte, for each validated target, a total of up to $65.0 million in commercial milestone payments. Upon approval and commercialization of any therapeutic product resulting from the collaboration, we would become eligible to receive low single-digit royalties on net sales of such product.

The term of the collaboration agreement with Incyte will, unless terminated by a party early, expire when all royalty obligations for products arising from the collaboration expire. The agreement may be terminated by Incyte for convenience on sixty (60) days’ prior written notice to us, or by us on thirty (30) days’ written notice in the event Incyte or one of its affiliates or sublicensees challenges the validity or enforceability of certain patent rights controlled by us. The agreement may also be terminated by either of the parties on thirty (30) days’ prior written notice in the event of an uncured material breach of the agreement by the other party or immediately in the case of certain bankruptcy events. Incyte’s right to terminate for convenience and each party’s right to terminate for uncured material breach may be exercised either with respect to the agreement in its entirety or, as applicable, in relation to the relevant validated target and associated therapeutic products.

TMRC

In connection with the collaboration agreement, we sold 793,021 shares of our common stock to Incyte for an aggregate purchase price of $10.0 million in cash, or $12.61 per share, in a private placement. In addition, from the closing of this sale until the earlier of the second anniversary of such closing or the expiration or termination of the collaboration agreement, we have granted to Incyte the right to purchase up to its pro rata share of the securities offered in certain subsequent offerings of our common stock or common stock equivalents, subject to the terms and conditions set forth in the stock purchase agreement. In February 2018, we sold 144,505 additional shares of our common stock to Incyte at a price of $9.55 per share, resulting in proceeds to us of $1.4 million.

We are obligated to make a payment to Whitehead representing a percentage of the up-front cash consideration and equity premium received from Incyte.

TMRC

In September 2015 we entered into, and in April 2016 we amended and restated, a license agreement with TMRC, which we refer to as the TMRC license agreement, pursuant to which TMRC granted us an exclusive license, with the right to sublicense, under TMRC patent rights, data, regulatory filings and other intellectual property for the North American and European development and commercialization of SY‑1425 (tamibarotene)tamibarotene products for the treatment of human cancer indications. In January 2021, we further amended the TMRC license agreement to expand the territory under which we are licensed to include Central and South America, Australia, Israel, and Russia. Under the TMRC license agreement, we have agreed to pay TMRC single‑digit royalties based on net sales if TMRC’s patents cover our product and low single‑digit royalties based on net sales with respect to know‑how licensed by TMRC during a predefined royalty term, and to make payments to TMRC upon meeting specified clinical and regulatory milestones in an aggregate amount of approximately $13.0 million per indication, of which $1.0 million was paid in the third quarter of 2016 upon successful dosing of the first patient in our Phase 2 clinical trial of SY-1425.tamibarotene. Under the TMRC license agreement, we must use commercially reasonable efforts to, among other things, commence development activities within one year, to develop SY‑1425tamibarotene in at least one cancer indication, and, following marketing approval, to market the product. The license agreement expires on the expiration of the subject patent rights or 15 years after the date of first commercial sale of product, whichever is later. The TMRC license agreement may be terminated by either party if the other party is in breach and the breach is not cured within a required amount of time or if the other party is in bankruptcy. If we have reason to do so, we may also terminate the agreement after one year from the original effective date at our sole discretion.

In connection with the TMRC license agreement, in April 2016 we entered into a supply management agreement with TMRC. Pursuant to the supply management agreement, we and TMRC have agreed to establish a joint manufacturing committee to discuss strategy for supply of SY‑1425.tamibarotene. In addition, we have agreed to pay TMRC a fee for each kilogram of SY‑1425 active pharmaceutical ingredienttamibarotene we procure for clinical trial or commercial use. The supply management agreement terminates on the expiration or termination of the TMRC license agreement, and our obligation to pay these fees survives the termination of the supply management agreement. In April 2016, we also entered into a standby license with TMRC and Toko Pharmaceuticals Ind. Co. Ltd., or Toko, the owner of the patent rights licensed to TMRC from which our license agreement with TMRC derives its rights, pursuant to which we obtain a standby license from Toko if Toko’s license with TMRC is terminated.

Dana‑Farber Cancer Institute, Inc.

We have developed our own patent portfolio related to tamibarotene, which generally discloses methods of identifying and treating patients who are sensitive to RARα agonists, including tamibarotene, based on the expression of certain biomarkers, including RARA. In February 2013,January 2021, we entered into a license agreement with Dana‑Farber pursuant toTMRC, which we wererefer to as the biomarker license agreement, under which we granted TMRC an exclusive worldwide, sublicensable license, with the right to grant sublicenses, under specified patents relatingthese patent rights and certain know-how that it controls related to CDK7 inhibitorsthe RARA biomarker for the development and JNK inhibitors ownedcommercialization of tamibarotene for human cancer indications in Japan, China, South Korea, India and Taiwan. Under the biomarker license agreement, TMRC will be obligated to pay us a low single-digit royalty on net sales of tamibarotene in these territories during a pre-specified royalty term to the extent the manufacture, use or controlled by Dana‑Farber. Thesale of tamibarotene infringes a valid claim of the patent rights or is developed using know-how licensed to TMRC under the biomarker license agreement.

Qiagen

In March 2022, we entered into a master collaboration agreement and a project schedule with Qiagen. Pursuant to this agreement, Qiagen has agreed to develop and commercialize an assay as a companion diagnostic test to determine the RARA gene expression levels for use with tamibarotene in newly diagnosed higher-risk MDS patients.

Under the agreement, Qiagen is responsible for all fields of usedeveloping, and obtaining and maintaining regulatory approvals for the companion diagnostic test in the United States and, at our request and subject to certain rights retained by Dana‑Farber for internal non‑commercial research, academic/teaching and government purposes. Subject to certain restrictions, Dana‑Farber granted us an option to obtain an exclusive commercial license to certain improvements created by Dana‑Farber during the first three yearsnegotiation of mutually agreed payments, in the following additional markets: Canada, the United Kingdom, the member states of the agreement, which would be negotiated in good faithEuropean Economic Area, Switzerland, Mexico, Australia, Russia, Israel and incorporated into this agreement. In connection with the agreement, we paid Dana‑Farber an upfront licensing fee and a milestone payment based on our first round of funding, such payments totaling $175,000, in addition to past patent expenses. We are obligated to pay Dana‑Farber annual license maintenance fees that are creditable against other payments and royalties due under the agreement and to make milestone payments of up to an aggregate of $3.4 million for each of the first two licensed products in connection with the achievement of certain clinical and regulatory milestones.Brazil. In addition, we are required to pay Dana‑Farber a tiered royalty on net sale of licensed products by us, our affiliates and sublicensees ranging from low single digit to mid‑single digit percentages, subject to certain adjustments, as well as a tiered mid‑single digit to low double-digit percentage of sublicense income. Our royalty and sublicensing income payment obligations are further subject to apportionment between designated agreements existing among us, Dana‑Farber and

Whitehead. We are required to meet certain diligence milestones andQiagen has agreed to use commercially reasonable efforts to among other things, developmanufacture the companion diagnostic test and, commercialize one or more licensed products or processes andupon negotiation of mutually agreed terms, to make one or more licensed products or processes reasonablythe companion diagnostic test commercially available in the United States, the additional markets described above, and such other countries as the parties may mutually agree. Qiagen has agreed to undertake specified actions to minimize the risk of an inability of supply occurring for the manufacture of the companion diagnostic test.

Subject to the public. The agreement contains specified diligence activities that if met on an annual basis would be deemed to satisfy someterms of our diligence obligations for the particular year. The agreement, unless earlier terminated by us or Dana‑Farber, will remain in effect until the expiration or abandonment of the licensed patent rights. We have the right to terminate the agreement for any reason provided that we provide Dana‑Farber the required notice and we pay all undisputed amounts due to Dana‑Farber at the time of termination. Dana‑Farber has the right to terminate the agreement if we cease doing business, or if we do not pay them the amounts owed under the agreement and fail to cure, or ifupon achievement of specified technical and development milestones, we commit and fail to cure a material breach under the agreement, or if our successor does not agree in writing to be bound by this agreement within the designated period following assignment.

Whitehead Institute for Biomedical Research and Dana‑Farber Cancer Institute, Inc.

In April 2013, we entered into a license agreement with Whitehead and Dana‑Farber, pursuant to which we were granted an exclusive, sublicensable with certain restrictions, license under specified patents relating to MYC modulators owned or controlled by Whitehead and Dana‑Farber, to make, have made, use, sell, offer for sale and import products and to perform and have performed licensed processes, in each case, in the applicable field. We were granted a non‑exclusive license to certain materials for the practice of our exclusive licenses. The licenses are subject to certain rights retained by Dana‑Farber and Whitehead for internal non‑commercial research, academic/teaching and government purposes. Commencing five years after the effective date and subject to certain terms and conditions, the agreement requires us to negotiate and potentially issue mandatory sublicenses under the patent rights outside of human health and therapeutics for fields and products that are not directly competitive with products in active development or commercialization by us, our affiliates or sublicensees.

In connection with the agreement, we paid Whitehead an upfront licensing fee, and a milestone payment based on our first round of funding, such payments totaling $100,000, in addition to past patent expenses. We are obligated to pay Whitehead annual license maintenance feesQiagen up to a high single-digit million dollar payment in the agreement over the term of the initial project schedule in connection with developing and obtaining and maintaining regulatory approval for the companion

diagnostic in the United States. In addition, we must reimburse Qiagen for certain pass-through costs. These amounts are subject to adjustment if the parties determine that changes in the scope of the development program are creditable against other payments and royalties duerequired. In addition, Qiagen will retain all proceeds from the commercialization of the companion diagnostic test. We have no financial obligations to Qiagen under the agreement and to make milestone paymentson the commercialization of up to an aggregate of $3.4 million in connection with the achievement of certain clinical and regulatory milestones. In addition, we are required to pay Whitehead a royalty on net salestamibarotene.

The initial term of the various products by us, our affiliates and sublicensees ranging from low single digitagreement expires on the later to mid‑single digit percentages, subject to certain adjustments, including a lower royalty on products identified throughoccur of (i) the usefifth anniversary of certain licensed products or processes. In addition, we are required to pay a tiered mid‑single digit to low double-digit percentage of our and our affiliates’ sublicense income and income we receive from the performance of licensed processes. Our royalty, sublicensing and licensed process income payment obligations are further subject to apportionment between designated agreements existing among us, Dana‑Farber and Whitehead. In connection with the agreement we also issued an aggregateand (ii) the expiration or termination of 98,099 sharesall project schedules executed under the agreement. Thereafter, the agreement automatically renews for additional periods of our common stockone year. We may terminate the agreement or a project schedule executed under the agreement for convenience upon 90 day’s prior written notice to Whitehead. We are required to achieve certain diligence milestones withinQiagen. Either party may terminate the specified timeframes, and failure to do so may result in our licenseagreement or any project schedule executed under certain patent rights being converted to non‑exclusive or otherwise be deemedthe agreement, as applicable, upon a material breach of the other party that is not cured within 30 days after written notice of such breach, immediately upon the bankruptcy or insolvency of the other party, or in certain other circumstances described in the agreement. The agreement further requiresIn the event that we use commercially reasonable efforts to, among other things, develop and commercialize one or more licensed products or processes and to make one or more licensed products or processes reasonably available to the public. The agreement contains specified diligence activities that if met on an annual basis would be deemed to satisfy some of our diligence obligations for the particular year. The agreement, unless earlier terminated by us, Whitehead or Dana‑Farber, will remain in effect until the expiration or abandonment of the licensed patent rights. We have the right to terminate the agreement for any reason, provided that we provide Dana‑Farber and Whitehead the required notice and we pay all undisputed amounts due to Whitehead and Dana‑Farber at the time of termination. Whitehead and Dana‑Farber have the right to terminate the agreement if we cease doing business, or if we do not pay them the amounts owed under the agreement and fail to cure, or if we commit and fail to cure areasons other than Qiagen’s material breach under the agreement, or if our successor does not agree in writing tobankruptcy, we will be bound by this agreement within the designated period following assignment.

Whitehead Institute for Biomedical Research

In April 2013, we entered into a license agreement with Whitehead, which we refer to as the Whitehead license agreement, pursuant to which we were granted a worldwide license under specified patents relating to super‑enhancers owned or controlled by Whitehead. This license was exclusive in all fields until April 2016, and can remain exclusive thereafter, on a field‑by‑field basis, as long as we can demonstrate that we are using commercially reasonable efforts in the applicable field, and if we are not using such commercially reasonable efforts in such applicable field, our license rights would become non‑exclusive with respect to such field. As of February 28, 2018, our license continued to be

exclusive in all fields. We were also granted a non‑exclusive license to use certain Whitehead materials in connection with the practice of the licensed Whitehead patents. In connection with the Whitehead license agreement, we paid Whitehead an upfront licensing fee of $30,000. In connection with the agreement, we also issued an aggregate of 73,575 shares of our common stock to Whitehead. We are obligated to pay Whitehead annual license maintenance fees that are creditable againstQiagen wind-down and other paymentscosts and royalties due under the agreement. In addition, we are required to pay Whitehead a tiered royalty on our net sales ranging from low single digit to mid‑single digit percentages, a lower royalty on products identified through the use of licensed products or processes, and a tiered mid‑single digit to low double digit percentage of sublicense income, which steps down depending on time, development stage of the products or processes and payments made to Whitehead, and patent expenses of Whitehead in connection with the licensed patents. We are required to use commercially reasonable efforts to, among other things, develop and commercialize one or more licensed products or processes and to make one or more licensed products or products reasonably available to the public. The Whitehead license agreement, unless earlier terminated by us or Whitehead, will remain in effect until the expiration or abandonment of the licensed patent rights. We have the right to terminate the Whitehead license agreement for any reason upon three months’ notice to Whitehead, provided that we pay all undisputed amounts due to Whitehead at the time of termination. Whitehead has the right to terminate the Whitehead license agreement immediately if we cease doing business, or if we do not pay Whitehead the amounts owed under the agreement or commit a material breach under the agreement, Whitehead has the right to terminate after we have had an opportunity to cure the breach.final payments.

Competition

The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. While we believe that our technology, development experience, and scientific knowledge provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental agencies and public and private research institutions. Any product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

We compete in the segments of the pharmaceutical, biotechnology and other related markets that address gene control and cancer. There are other companies working to develop therapies intherapy for the fieldstreatment of gene control and cancer. These companies includecancer, including divisions of large pharmaceutical companies and biotechnology companies of various sizes.

The most common methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy and targeted drug therapy. There are a variety of available drug therapies marketed for cancer. In many cases, these drugs are administered in combination to enhance efficacy. While our product candidates may compete with many existing drug and other therapies, they may also be used in combination with or as an adjunct to these therapies. Some of the currently approved drug therapies are branded and subject to patent protection, and others are available on a generic basis. Many of these approved drugs are well‑well established therapies and are widely accepted by physicians, patients and third‑partythird-party payors. In general, although there has been considerable progress over the past few decades in the treatment of cancer and the currently marketed therapies provide benefits to many patients, these therapies all are limited to some extent in their efficacy and frequency of adverse events. As a result, the level of morbidity and mortality from cancer remains high.

In addition to currently marketed therapies, there are also a number of medicines in late stagelate-stage clinical development to treat cancer. These medicines in development may provide efficacy, safety, convenience and other benefits that are not provided by currently marketed therapies. As a result, they may provide significant competition for any of our product candidates for which we obtain market approval.

Many of our competitors may have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved medicines than we do. Mergers and acquisitions in the pharmaceutical, biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller number of our competitors. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early stageearly-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

The key competitive factors affecting the success of all of our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the effectiveness of and ease of access to companion diagnostics in guiding the use of related therapeutics, the level of generic competition and the availability of reimbursement from government and other third‑partythird-party payors.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize medicines that are safer, more effective, have fewer or less severe side effects, are more convenient, have greater ease of access, or are less expensive than any medicines that we may develop. Our competitors also may obtain FDA or other regulatory approval for their medicines more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. In addition, our ability to compete may be affected in many cases by insurers or other third‑partythird-party payors seeking to encourage the use of generic medicines. There are many generic medicines currently on the market for the indications that we are pursuing, and additional medicines are expected to become available on a generic basis over the coming years. If our therapeutic product candidates are approved, we expect that they will be priced at a significant premium over competitive generic medicines.

If the product candidates of our priority programsWe are approved for the indications for which we are currently planning clinical trials, they will compete with the drugs discussed below and will likely compete with other drugs currently in development.

SY‑1425

We plan to initially develop SY‑1425,developing tamibarotene, our RARα agonist, for patients with AML orand MDS. We will selectare selecting patients for our clinical trials based on high‑high levels of RARα as measured by our proprietary RARA and IRF8 biomarkers.gene expression. We are aware of fourseveral new drugs approved by the FDA during 2017since 2018 for the treatment of newly diagnosed unfit AML or patient subsets within AML: midostaurin, enasidanib, daunorubicin + cytarabine liposome,newly diagnosed unfit AML (including ivosidenib, venetoclax, and gemtuzumab. SY-1425glasdegib), and one new drug approved by the FDA in 2020 for the treatment of MDS or patient subsets within MDS (decitabine/cedazuridine). Tamibarotene may also face competition from other investigational productsagents currently in clinical development for AML and MDS, including venetoclax, which is currently being evaluated by AbbVie, Inc.those in two randomized pivotal studies in patients with AML, as well as investigational products inlate-stage development from Takeda Pharmaceutical Co. Ltd., Daiichi Sankyo Company, Limited, Agios Pharmaceuticals,Abbvie Inc., NovartisRoche Holding AG, Bristol-Myers Squibb Co., Eli Lilly & Co., EisaiTaiho Oncology, Inc., Celgene Corporation,and Pfizer Inc., Incyte Corporation and FORMA Therapeutics, LLC. We are not aware of only one otherany selective RARα program, a compound in development from Io Therapeutics, Inc. which, according to a government-sponsored website, is in an investigator initiated Phase 1/2 study in a non-selective patient group in relapsed and refractory AML, high-risk MDS and chronic myelomonocytic leukemia.

SY‑1365

We are conducting a Phase 1 clinical trial of SY-1365 in patients with advanced solid tumors and plan to open expansion cohorts in various ovarian and breast cancer populations once we establish the maximum tolerated dose during the dose escalation phase of the trial. We believe that SY‑1365 is the most advanced selective CDK7 inhibitor in clinical development. We are aware of an oral CDK7 inhibitor being developed by Carrick Therapeutics Ltd. that has recently entered Phase 1 clinical development, and are aware of several other selective CDK7 inhibitoragonist programs that we believe are in preclinical development, including programs from Aurigene Discovery Technologies Ltd., Ube Industries Ltd., Qurient Co. Ltd., and Beta Pharma, Inc. SY-1365 may face competition from these selective CDK7 inhibitors.active clinical development.

Government Regulation and Product Approvals

Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions includingsuch as the European Union, or EU, extensively regulate, among other things, the research, development, testing, manufacture, pricing, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of biopharmaceutical products. The processes for obtaining marketing approvals in the United States and in foreign countries and jurisdictions, along with compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.

Approval and Regulation of Drugs in the United States

In the United States, drug products are approved and regulated under the Federal Food, Drug and Cosmetic Act, or FDCA, and applicable implementing regulations and guidance. A company, institution or organization which takes responsibility for the initiation and management of a clinical development program for such products, and for their regulatory approval, is typically referred to as a sponsor. The failure of an applicanta sponsor to comply with the applicable regulatory requirements at any time during the product development process including non-clinical testing, clinical testing, the approval process or post-approval process, may result in delays to the conduct of a study, regulatory review and approval and/or administrative or judicial sanctions. These sanctions may include, but are not limited to, the FDA’s refusal to allow an applicant to proceed with clinical trials, refusal to approve pending applications, license suspension or revocation, withdrawal of an approval, warning letters, adverse publicity, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines and civil or criminal investigations and penalties brought by the FDA or Department of Justice, or DOJ, or other government entities, including state agencies.

An applicantSpecifically, a sponsor seeking approval to market and distribute a new drug in the United States generally must satisfactorily complete each of the following steps before the product candidate will be licensedapproved by the FDA:

Preclinical Studies

Before an applicanta sponsor begins testing a product candidate with potential therapeutic value in humans, the product candidate enters the preclinical testing stage. Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as other studies to evaluate, among other things, the toxicityThe results of the product candidate.preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND and are generally referred to as IND-enabling studies. The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements, including GLP regulations and standards. The resultsstandards and the United States Department of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND.Agriculture’s Animal Welfare Act, if applicable. Some long-term preclinical

testing, such as animal tests of reproductive adverse events and carcinogenicity, and long-term toxicity studies, may continue after the IND is submitted.

The IND and IRB Processes

An IND is an exemption from the FDCA that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer such investigational product to humans. Such authorization must be secured prior to interstate shipment and administration of any product candidate that is not the subject of an approved NDA. In support of a request for an IND, applicantssponsors must submit a protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND. In addition, the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things,, must be submitted to the FDA as part of an IND. The FDA requires a 30-day waiting period after the filing of each IND before clinical trials may begin. This waiting period is designed to allow the FDA to review the IND to assure the safety and rights of patients and to determine whether human research subjectsthat the quality of the investigation will be exposedadequate to unreasonable health risks.permit an evaluation of the proposed drug’s effectiveness and safety. At any time during this 30-day period, or thereafter, the FDA may raise concerns or questions about the conduct of the trials as outlined in the IND and impose a clinical hold or partial clinical hold. In this case, the IND sponsor and the FDA must resolve any outstanding concerns before clinical trials can begin.

Following commencement of a clinical trial under an IND, the FDA may also place a clinical hold or partial clinical hold on that trial. A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation. A partial clinical hold is a delay or suspension of only part of the clinical work requested under the IND. For example, a specific protocol or part of a protocol is not allowed to proceed, while other protocols may do so. No more than 30 days after imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold. Following issuance of a clinical hold or partial clinical hold, an investigation may only resume after the FDA has notified the sponsor that the investigation may proceed. The FDA will base that determination on information provided by the sponsor correcting the deficiencies previously cited or otherwise satisfying the FDA that the investigation can proceed.

A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND. When a foreign clinical study is conducted under an IND, all FDA IND requirements must be met unless waived. When a foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements of the FDA in order to use the study as support for an IND or application for marketing approval. Specifically, on April 28, 2008, the FDA amended its regulations governing the acceptance of foreign clinical studies not conducted under an investigational new drug application as support for an IND or a new drug application. The final rule provides that such studies must be conducted in accordance with good clinical practice, or GCP, including review and approval by an independent ethics committee, or IEC, and informed consent from subjects. The GCP requirements in the final rule encompass both ethical and data integrity standards for clinical studies. The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical studies, as well as the quality and integrity of the resulting data. They further help ensure that non-IND foreign studies are conducted in a manner comparable to that required for IND studies.

In addition to the foregoing IND requirements, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. An IRB must operate in compliance with FDA regulations. An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

Additionally, some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board or committee, or DSMB.committee. This group provides a recommendation as to whether or not a trial may move forward at designated check points based on access that only the group maintains to available data from the study. Suspension or termination of development during any phase of clinical trials can occur if it is determined that the participants or patients are being exposed to an unacceptable health risk. Other reasons for suspension or termination may be made by us based on evolving business objectives and/or competitive climate.

Information aboutClinical Studies Outside the United States in Support of FDA Approval

Sponsors frequently conduct clinical trials at sites outside the United States. When a foreign clinical study is conducted under an IND, all IND requirements must be submitted within specific timeframesmet unless waived. When a foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements of the FDA in order to use the study as support for an IND or application for marketing approval. Specifically, the studies must be conducted in accordance with GCP, including undergoing review and receiving approval by an independent ethics committee and seeking and receiving informed consent from subjects. GCP requirements encompass both ethical and data integrity standards for clinical studies. The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical studies, as well as the quality and integrity of the resulting data. They further help ensure that non-IND foreign studies are conducted in a manner comparable to that required for IND studies.

The acceptance by the FDA of study data from clinical trials conducted outside the United States in support of U.S. approval may be subject to certain conditions or may not be accepted at all. In cases where data from foreign clinical trials are intended to serve as the sole basis for marketing approval in the U.S., the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the National InstitutesU.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of Health,recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or NIH,if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means.

In addition, even where the foreign study data are not intended to serve as the sole basis for public disseminationapproval, the FDA will not accept the data as support for an application for marketing approval unless the study is well-designed and well-conducted in accordance with GCP requirements and the FDA is able to validate the data from the study through an onsite inspection if deemed necessary. Many foreign regulatory authorities have similar approval requirements. In addition, such foreign trials are subject to the applicable local laws of the foreign jurisdictions where the trials are conducted.

Expanded Access to an Investigational Drug for Treatment Use

Expanded access, sometimes called “compassionate use,” is the use of investigational new drug products outside of clinical trials to treat patients with serious or immediately life-threatening diseases or conditions when there are no comparable or satisfactory alternative treatment options. The rules and regulations related to expanded access are intended to improve access to investigational drugs for patients who may benefit from investigational therapies. FDA regulations allow access to investigational drugs under an IND by the company or the treating physician for treatment purposes on a case-by-case basis for: individual patients (single-patient IND applications for treatment in emergency settings and non-emergency settings); intermediate-size patient populations; and larger populations for use of the drug under a treatment protocol or Treatment IND Application.

When considering an IND application for expanded access to an investigational product with the purpose of treating a patient or a group of patients, the sponsor and treating physicians or investigators will determine suitability when all of the following criteria apply: patient(s) have a serious or immediately life-threatening disease or condition, and there is no comparable or satisfactory alternative therapy to diagnose, monitor, or treat the disease or condition; the potential patient benefit justifies the potential risks of the treatment and the potential risks are not unreasonable in the context or condition to be treated; and the expanded use of the investigational drug for the requested treatment will not interfere with the initiation, conduct, or completion of clinical investigations that could support marketing approval of the product or otherwise compromise the potential development of the product.

There is no obligation for a sponsor to make its ClinicalTrials.gov website.investigational products available for expanded access. Sponsors of one or more investigational drugs for the treatment of a serious disease(s) or condition(s) must, however, make publicly available their policy for evaluating and responding to requests for expanded access for individual patients.

In addition, on May 30, 2018, the Right to Try Act, was signed into law. The law, among other things, provides a federal framework for certain patients to access certain investigational new drug products that have completed a Phase 1 clinical trial and that are undergoing investigation for FDA approval. Under certain circumstances, eligible patients can seek

the Right to Try Act, but the manufacturer must develop an internal policy and respond to patient requests according to that policy.

Human Clinical Trials in Support of an NDA

Clinical trials involve the administration of the investigational product candidate to human subjects under the supervision of a qualified investigator in accordance with GCP requirements which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial. Clinical trials are conducted under written clinical trial protocols detailing, among other things, the objectives of the study, inclusion and exclusion criteria, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.

Human clinical trials are typically conducted in three sequential phases, but the phases may overlap or be combined. Additional studies may also be required after approval.

Phase 1 clinical trials are initially conducted in a limited population to test the product candidate for safety, including adverse effects, dose tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics in healthy humans or in patients. During Phase 1 clinical trials, information about the investigational drug product’s pharmacokinetics and pharmacological effects may be obtained to permit the design of well-controlled and scientifically valid Phase 2 clinical trials.

Phase 2 clinical trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, evaluate the efficacy of the product candidate for specific targeted indications and determine dose tolerance and optimal dosage and dosage schedule. Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more costly Phase 3 clinical trials. Phase 2 clinical trials are well controlled, closely monitored and conducted in a limited patient population.

Phase 3 clinical trials proceed if the Phase 2 clinical trials demonstrate that a dose range of the product candidate is potentially effective and has an acceptable safety profile. Phase 3 clinical trials are undertaken within an expanded patient population to further evaluate dosage, provide substantial evidence of clinical efficacy and further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites.sites. A well-controlled, statistically robust Phase 3 clinical trial may be designed to deliver the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to appropriately label a drug: such Phase 3 studies are referred to as “pivotal.”

In some cases, the FDA may approve an NDA for a product candidate but require the sponsor to conduct additional clinical trials to further assess the product candidate’s safety and effectiveness after approval. Such post-approval trials are typically referred to as Phase 4 clinical trials. These studies are used to gain additional experience from the treatment of a larger number of patients in the intended treatment group and to further document a clinical benefit in the case of drugs approved under accelerated approval regulations. Failure to exhibit due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of approval for products.

In March 2022, the FDA finalized guidance entitled “Expansion Cohorts: Use in First-In-Human Clinical Trials to Expedite Development of Oncology Drugs and Biologics,” which outlines how sponsors can utilize an adaptive trial design in the early stages of oncology product development (i.e., the first-in-human clinical trial) to compress the traditional three phases of trials into one continuous trial called an expansion cohort trial. Information to support the design of individual expansion cohorts are included in IND applications and assessed by the FDA. Expansion cohort trials can potentially bring efficiency to product development and reduce developmental costs and time.Progress reports detailing the status and a brief description of available results of the clinical trials must be submitted at least annually to the FDA. In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the product; and any clinically important increase in the case of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or completed at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product has been associated with unexpected serious harm to patients. The FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

In December 2022, with the passage of the Food and Drug Omnibus Reform Act, or FDORA, Congress required sponsors to develop and submit a diversity action plan for each Phase 3 clinical trial or any other “pivotal study” of a new drug or biological product. These plans are meant to encourage the enrollment of more diverse patient populations in late-stage clinical trials of FDA-regulated products. Specifically, action plans must include the sponsor’s goals for enrollment, the

underlying rationale for those goals, and an explanation of how the sponsor intends to meet them. In addition to these requirements, the legislation directs the FDA to issue new guidance on diversity action plans.

In June 2023, the FDA issued draft guidance with updated recommendations for GCPs aimed at modernizing the design and conduct of clinical trials. The updates are intended to help pave the way for more efficient clinical trials to facilitate the development of medical products. The draft guidance is adopted from the International Council for Harmonisation’s recently updated E6(R3) draft guideline that was developed to enable the incorporation of rapidly developing technological and methodological innovations into the clinical trial enterprise. In addition, the FDA issued draft guidance outlining recommendations for the implementation of decentralized clinical trials.

Sponsors of clinical trials are required to register and disclose certain clinical trial information on a public registry (clinicaltrials.gov) maintained by the U.S. National Institutes of Health. In particular, information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial are made public as part of the registration of the clinical trial. The failure to submit clinical trial information to clinicaltrials.gov, as required, is a prohibited act under the FDCA with violations subject to potential civil monetary penalties of up to $10,000 for each day the violation continues. Although the FDA has historically not enforced these reporting requirements due to the long delay in issuing final implementing regulations by the Department of Health and Human Services, or HHS, the FDA has issued pre-notices for voluntary corrective action and several notices of non-compliance during the past two years. These notices of non-compliance did not result in civil monetary penalties.

Concurrent with clinical trials, companies often complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the investigational drug as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, must develop methods for testing the identity, strength, quality, purity, and potency of the final drug. Additionally, appropriate

packaging must be selected and tested and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

Interactions with FDA During the Clinical Development Program

Following the clearance of an IND and the commencement of clinical trials, the sponsor will continue to have interactions with the FDA. Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. In addition, IND safety reports must be submitted to the FDA for any of the following: serious and unexpected suspected adverse reactions; findings from other studies or animal or in vitro testing that suggest a significant risk in humans exposed to the drug; and any clinically important increase in the case of a serious suspected adverse reaction over that listed in the protocol or investigator brochure. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all.

In addition, sponsors are given opportunities to meet with the FDA at certain points in the clinical development program. There are five types of meetings that occur between sponsors and the FDA. Type A meetings are those that are necessary for an otherwise stalled product development program to proceed or to address an important safety issue. Type B meetings include pre-IND and pre-NDA meetings, as well as end of phase meetings such as EOP2 meetings. A Type C meeting is any meeting other than a Type A or Type B meeting regarding the development and review of a product, including for example meetings to facilitate early consultations on the use of a biomarker as a new surrogate endpoint that has never been previously used as the primary basis for product approval in the proposed context of use. A Type D meeting is focused on a narrow set of issues (should be limited to no more than 2 focused topics) and should not require input from more than 3 disciplines or divisions. Finally, INTERACT meetings are intended for novel products and development programs that present unique challenges in the early development of an investigational product.

These meetings provide an opportunity for the sponsor to share information about the data gathered to date with the FDA and for the FDA to provide advice on the next phase of development. The FDA has indicated that its responses, as conveyed in meeting minutes and advice letters, only constitute mere recommendations and/or advice made to a sponsor and, as such, sponsors are not bound by such recommendations and/or advice. Nonetheless, from a practical perspective, a sponsor’s failure to follow the FDA’s recommendations for design of a clinical program may put the program at significant risk of failure.

Review and Approval of an NDA

In order to obtain approval to market a drug product in the United States, a marketing application must be submitted to the FDA that provides sufficient data establishing the safety, purity and potency of the proposed drug product for its intended indication. The application includes all relevant data available from pertinent preclinical and clinical trials, together with detailed information relating to the product’s chemistry, manufacturing, controls and proposed labeling, among other things. Data can come from company-sponsored clinical trials intended to test the safety and effectiveness of a use of a product, or from a number of alternative sources, including studies initiated by investigators. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety, purity and potency of the drug product to the satisfaction of the FDA.

The NDA is a vehicle through which applicantssponsors formally propose that the FDA approve a new product for marketing and sale in the United States for one or more indications. Every new drug product candidate must be the subject of an approved NDA before it may be commercialized in the United States. Under federal law, the submission of most NDAs is subject to an application user fee, which for federal fiscal year 20182024 is $2,421,495$4,048,695 for an application requiring clinical data. The sponsor of an approved NDA is also subject to an annual program fee, which for federal fiscal year 20182024 is $304,162.$416,734. Certain exceptions and waivers are available for some of these fees, such as an exception from the application fee for products with orphan designation and a waiver for certain small businesses.businesses.

Following submission of an NDA, the FDA conducts a preliminary review of the application generally within 60 calendar days of its receipt and strives tomust inform the sponsor by the 74th day after the FDA’s receipt of the submissionthat time whether the application is sufficiently complete to permit substantive review. If not, the FDA will issue a Refuse to File determination to the sponsor. The FDA may request additional information rather than accept the application for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA has agreed to specified performance goals in the review process of NDAs. Under that agreement, 90% of applications seeking approval of New Molecular Entities, or NMEs, are meant to be reviewed within ten months fromNDAs, but the date on which the FDA accepts the application for filing, and 90% of applications for NMEs that have been designated for “priority review” are meant to be reviewed within six months of the filing date. For applications seeking approval of products that are not NMEs, the ten-month and six-month review periods run from the date that the FDA receives the application. The review process and the Prescription Drug User Fee Act, or PDUFA, goal date may be extended by the FDA for three additional months to consider new information or clarification provided by the applicantsponsor to address an outstanding deficiency identified by the FDA following the original submission.

Before approvingIn connection with its review of an application, the FDA typically will inspect the facility or facilities where the product is or will be manufactured. These pre-approval inspections may cover all facilities associated with an NDA submission, including component manufacturing, finished product manufacturing and control testing laboratories. The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.  Under With the passage of FDORA, Congress clarified the FDA’s authority to conduct inspections by expressly permitting inspection of facilities involved in the preparation, conduct, or analysis of clinical and non-clinical studies submitted to the FDA, Reauthorization Act of 2017, the FDA must implement a protocol to expedite review of responses to inspection reports pertaining to certain applications, including applications for products in shortageas well as other persons holding study records or those for which approval is dependent on remediation of conditions identifiedinvolved in the inspection report.study process.

In addition, as a condition of approval, the FDA may require an applicanta sponsor to develop a REMS. REMS use risk minimization strategies beyond the professional labeling to ensure that the benefits of the product outweigh the potential risks. To determine whether a REMS is needed, the FDA will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of treatment, seriousness of known or potential adverse events and whether the product is a new molecular entity.

The FDA may refer an application for a novel product to an advisory committee or explain why such referral was not made. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Fast Track, Breakthrough Therapy and Priority Review

The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life‑threatening disease or condition. These programs, as applicable to our business, are referred to as fast track designation, breakthrough therapy designation and priority review designation. None of these programs changes the standards for approval but each may help expedite the development or approval process governing product candidates.

Specifically, the FDA may designate a product for Fast Track review if it is intended, whether alone or in combination with one or more other products, for the treatment of a serious or life‑threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition. For Fast Track products, sponsors may have greater interactions with the FDA and the FDA may initiate review of sections of a Fast Track product’s application before the application is complete. This rolling review may be available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a Fast Track product may be effective. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees. However, the FDA’s time period goal for reviewing a Fast Track application does not begin until the last section of the application is submitted. In addition, the Fast Track designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

Second, a product may be designated as a Breakthrough Therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life‑threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The FDA may take certain actions with respect to Breakthrough Therapies, including holding meetings with the sponsor throughout the development process; providing timely advice to the product sponsor regarding development and approval; involving more senior staff in the review process; assigning a cross‑disciplinary project lead for the review team; and taking other steps to design the clinical trials in an efficient manner.

Third, the FDA may designate a product for priority review if it is a product that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA determines, on a case‑by‑case basis, whether the proposed product represents a significant improvement when compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment‑limiting product reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from ten months to six months.

Accelerated Approval Pathway

The FDA may grant accelerated approval to a product for a serious or life‑threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on irreversible morbidity or mortalityIMM or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. Products granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM. The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a product.

The accelerated approval pathway is most often used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical benefit of a product, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus, accelerated approval has been used extensively in the development and approval of products for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large trials to demonstrate a clinical or survival benefit. Thus, the benefit of accelerated approval derives from the potential to receive approval based on surrogate endpoints sooner than possible for trials with clinical or survival endpoints, rather than deriving from any explicit shortening of the FDA approval timeline, as is the case with priority review.

The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post‑approval confirmatory studies to verify and describe the product’s clinical benefit. As a result, a product candidate approved on this basis is subject to rigorous post‑marketing compliance requirements, including the completion of Phase 4 or post‑approval clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post‑approval studies, or confirm a clinical benefit during post‑marketing studies, would allow the FDA to initiate expedited proceedings to withdraw approval of the product. All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA.

With the passage of FDORA, in December 2022, Congress modified certain provisions governing accelerated approval of drug and biologic products. Specifically, the new legislation authorized the FDA to require a sponsor to have its confirmatory clinical trial underway before accelerated approval is awarded; to require a sponsor of a product granted accelerated approval to submit progress reports on its post-approval studies to the FDA every six months until the study is completed; and to use expedited procedures to withdraw accelerated approval of an NDA or BLA after the confirmatory trial fails to verify the product’s clinical benefit. Further, FDORA requires the agency to publish on its website “the rationale for why a post-approval study is not appropriate or necessary” whenever it decides not to require such a study upon granting accelerated approval.

In March 2023, the FDA issued draft guidance that outlines its current thinking and approach to accelerated approval. The agency indicated that the accelerated approval pathway is commonly used for approval of oncology drugs due to the serious and life-threatening nature of cancer. Although single-arm trials have been commonly used to support accelerated approval, a randomized controlled trial is the preferred approach as it provides a more robust efficacy and safety assessment and allows for direct comparisons to an available therapy. To that end, the FDA outlined considerations for designing, conducting, and analyzing data for trials intended to support accelerated approvals of oncology therapeutics. While this guidance is currently only in draft form and will ultimately not be legally binding even when finalized, sponsors typically observe FDA’s guidance closely to ensure that their investigational products qualify for accelerated approval.

The FDA’s Decision on an NDA

On the basis of the FDA’s evaluation of the application and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA may issue an approval letter or a complete response letter. An approval letter, authorizes commercial marketingor CRL. To reach this determination, the FDA must determine that the drug is effective and that its expected benefits outweigh its potential risks to patients. This “benefit-risk” assessment is informed by the extensive body of evidence about the product’s safety and efficacy in the NDA. This assessment is also informed by other factors, including: the severity of the underlying condition and how well patients’ medical needs are addressed by currently available therapies; uncertainty about how the premarket clinical trial evidence will extrapolate to real-world use of the product within the post-market setting; and whether risk management tools are necessary to manage specific prescribing information for specific indications. risks.

A complete response letterCRL generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

An approval letter authorizes commercial marketing of the product with specific prescribing information for each indication. If the FDA approves a new product, it may limit the approved indications for use of the product. The agency may also require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, to help ensure that the safe usebenefits of the product.product outweigh the potential risks. REMS can include medication guides, communication plans for health care professionals, and elements to assure safe use, or ETASU. ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patent registries. The FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Post-Approval Regulation

If regulatory approval for marketing of a product or new indication for an existing product is obtained, the sponsor will be required to comply with all regular post-approval regulatory requirements as well as any post-approval requirements that the FDA may have imposed as part of the approval process. The sponsor will be required to report, among other things, certain adverse reactions and manufacturing problems to the FDA, provide updated safety and efficacy information and comply with requirements concerning advertising and promotional labeling requirements. Manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including cGMP regulations, which impose certain procedural and documentation requirements upon manufacturers. Accordingly,The PREVENT Pandemics Act, which was enacted in December 2022, clarifies that foreign drug manufacturing establishments are subject to registration and listing requirements even if a drug undergoes further manufacture, preparation, propagation, compounding, or processing at a separate establishment outside the sponsor and its third-party manufacturers must continueUnited States prior to expend time, money and effort inbeing imported or offered for import into the areas of production and quality control to maintain compliance with cGMP regulations and other regulatory requirements.United States.

A product may also be subject to official lot release, meaning that the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official release, the manufacturer must submit samples of each lot, together with a release protocol showing a summary of the history of

manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot, to the FDA. The FDA may in addition perform certain confirmatory tests on lots of some products before releasing the lots for distribution. Finally, the FDA will conduct laboratory research related to the safety, purity, potency and effectiveness of pharmaceutical products.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

The FDA strictly regulates the marketing, labeling, advertising and promotion of prescription drug products placed on the market. This regulation includes, among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities, and promotional activities involving the Internet and social media. Promotional claims about a drug’s safety or effectiveness are prohibited before the drug is approved. After approval, a drug product generally may not be promoted for uses that are not approved by the FDA, as reflected in the product’s prescribing information. In September 2021, the FDA published final regulations which describe the types of evidence that the agency will consider in determining the intended use of a drug product.

In the United States, health care professionals are generally permitted to prescribe drugs for such uses not described in the drug’s labeling, known as off-label uses, because the FDA does not regulate the practice of medicine. However, FDA regulations impose rigorous restrictions on manufacturers’ communications, prohibiting the promotion of off-label uses.uses. It may be permissible, under very specific, narrow conditions, for a manufacturer to engage in nonpromotional, non-misleading communication regarding off-label information, such as distributing scientific or medical journal information.

Further, with passage of the Pre-Approval Information Exchange Act in December 2022, sponsors of products that have not been approved may proactively communicate to payors certain information about products in development to help expedite patient access upon product approval. Previously, such communications were permitted under FDA guidance, but the new legislation explicitly provides protection to sponsors who convey certain information about products in development to payors, including unapproved uses of approved products. In addition, in October 2023, the FDA published draft guidance

If a company is found to have promoted off-label uses,, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the DOJ,Department of Justice, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities. This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products. The federal government has levied large civil and criminal fines against companies for alleged improper promotion, and has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, and its implementing regulations, as well as the Drug Supply Chain Security Act, or DSCA, which regulate the distribution and tracing of prescription drug samples at the federal level, and set minimum standards for the regulation of distributors by the states. The PDMA, its implementing regulations and state laws limit the distribution of prescription pharmaceutical product samples, and the DSCA imposes requirements to ensure accountability in distribution and to identify and remove counterfeit and other illegitimate products from the market.

Pediatric Studies and Exclusivity

Under the Pediatric Research Equity Act of 2003,, or PREA, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. Sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric study or studies the applicantsponsor plans to conduct, including study objectives and design,

any deferral or waiver requests and other information required by regulation. The applicant,sponsor, the FDA, and the FDA’s internal review committee must then review the information submitted, consult with each other and agree upon a final plan. The FDA or the applicantsponsor may request an amendment to the plan at any time.

For drugs intended to treat a serious or life-threatening disease or condition, the FDA must, upon the request of an applicant, meet to discuss preparation of the initial pediatric study plan or to discuss deferral or waiver of pediatric assessments. In addition, FDA will meet early in the development process to discuss pediatric study plans with sponsors and FDA must meet with sponsors by no later than the end-of-phase 1 meeting for serious or life-threatening diseases and by no later than ninety (90) days after the FDA’s receipt of the study plan.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Additional requirements and procedures relating to deferral requests and requests for extension of deferrals are contained in FDASIA. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation.

The FDA Reauthorization Act of 2017 established new requirements to govern certain molecularly targeted cancer indications. Any company that submits an NDA three years after the date of enactment of that statute must submit pediatric assessments with the NDA if the drug is intended for the treatment of an adult cancer and is directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric cancer. The investigation must be designed to yield clinically meaningful pediatric study data regarding the dosing, safety and preliminary efficacy to inform pediatric labeling for the product.

The FDA is required to send a PREA Non-Compliance letter to sponsors who have failed to submit their pediatric assessments required under PREA, have failed to seek or obtain a deferral or deferral extension or have failed to request approval for a required pediatric formulation. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with orphan designation, although the FDA has recently taken steps to limit what it considers abuse of this statutory exemption in PREA by announcing that it does not intend to grant any additional orphan drug designations for rare pediatric subpopulations of what is otherwise a common disease. In May 2023, the FDA issued new draft guidance that further describes the pediatric study requirements under PREA.

Orphan Drug Designation and Exclusivity

Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition, generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a product available in the United States for treatment of the disease or condition will be recovered from sales of the product. A company must seek orphan drug designation before submitting an NDA for the product candidate. If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use. Orphan drug designation does not shorten the PDUFA goal dates for the regulatory review and approval process, although it does convey certain advantages such as tax benefits and exemption from the PDUFA application fee.

If a product with orphan designation receives the first FDA approval for the disease or condition for which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product generally will receive orphan drug exclusivity. Orphan drug exclusivity means that the FDA may not approve another sponsor’s marketing application for the same drug for the same condition for seven years, except in certain limited circumstances. Orphan exclusivity does not block the approval of a different product for the same rare disease or condition, nor does it block the approval of the same product for different conditions. If a drug designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity.

Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protectionregulatory exclusivity to the term of any existing patent or other regulatory exclusivity, including the non-patent and orphan exclusivity.exclusivity, for drug products. For biologic products, only non-patent exclusivity is extended. This six-month exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data. The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted. If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patent protection cover the product are extended by six months. This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.

Orphan Drug Designation and Exclusivity

Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition, generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a product available in the United States for treatment of the disease or condition will be recovered from sales of the product. A company must seek orphan drug designation before submitting an NDA for the candidate product. If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use. Orphan drug designation does not shorten the PDUFA goal dates for the regulatory review and approval process, although it does convey certain advantages such as tax benefits and exemption from the PDUFA application fee.

If a product with orphan designation receives the first FDA approval for the disease or condition for which it has such designation or for a select indication or use within the rare disease or condition for which it was designated, the product generally will receive orphan drug exclusivity. Orphan drug exclusivity means that the FDA may not approve another sponsor’s marketing application for the same drug for the same condition for seven years, except in certain limited circumstances. Orphan exclusivity does not block the approval of a different product for the same rare disease or condition, nor does it block the approval of the same product for different conditions. If a drug designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity.

Orphan drug exclusivity will not bar approval of another product under certain circumstances, including if a subsequent product with the same drug for the same condition is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand. This is the case despite an earlier court opinion holding that the

Orphan Drug Act unambiguously required the FDA to recognize orphan exclusivity regardless of a showing of clinical superiority.

Section 505(b)(2) NDAs

NDAs for most new drug products are based on well controlledtwo full clinical studies that providemust contain substantial evidence of the safety and efficacy of the proposed new product for the proposed use.use. These applications are submitted under Section 505(b)(1) of the FDCA. The FDA is, however, authorized to approve an alternative type of NDA under Section 505(b)(2) of the FDCA. This type of application allows the applicantsponsor to rely, in part, on the FDA’s previous findings of safety and efficacy for a similar product, or published literature. Specifically, Section 505(b)(2) applies to NDAs for a drug for which the investigations made to show whether or not the drug is safe for use and effective in use and relied upon by the applicantsponsor for approval of the application “were not conducted by or for the applicantsponsor and for which the applicantsponsor has not obtained a right of reference or use from the person by or for whom the investigations were conducted.”

Thus, Section 505(b)(2) authorizes the FDA to approve an NDA based on safety and effectiveness data that were not developed by the applicant.sponsor. NDAs filed under Section 505(b)(2) may provide an alternate and potentially more expeditious pathway to FDA approval for new or improved formulations or new uses of previously approved products. If the 505(b)(2) applicant can establish that reliance on the FDA’s previous approval is scientifically appropriate, the applicant may eliminate the need to conduct certain preclinical or clinical studies of the new product. The FDA may also require companies to perform additional studies or measurements to support the change from the approved product.product. The FDA may then approve the new product candidate for all or some of the label indications for which the referenced productdrug has been approved, as well as for any new indication sought by the Section 505(b)(2) applicant.

Abbreviated New Drug Applications for Generic Drugs

In 1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress established an abbreviated regulatory scheme authorizing the FDA to approve generic drugs that are shown to contain the same active ingredients as, and to be bioequivalent to, drugs previously approved by the FDA pursuant to NDAs. To obtain approval of a generic drug, an applicant must submit

Specifically, in order for an abbreviated new drug application, or ANDA, to the agency. An ANDA is a comprehensive submission that contains, among other things, data and information pertaining to the active pharmaceutical ingredient, bioequivalence, drug product formulation, specifications and stability of the generic drug, as well as analytical methods, manufacturing process validation data and quality control procedures. ANDAs are “abbreviated” because they generally do not include preclinical and clinical data to demonstrate safety and effectiveness. Instead, in support of such applications, a generic manufacturer may rely on the preclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the reference-listed drug, or RLD.

Specifically, in order for an ANDA, to be approved, the FDA must find that the generic version is identical to the reference listed drug, or RLD, with respect to the active ingredients, the route of administration, the dosage form, the strength of the drug and the conditions of use of the drug. At the same time, the FDA must also determine that the generic drug is “bioequivalent” to the innovator drug. Under the statute, a generic drug is bioequivalent to a RLD if “the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.” Upon approval of an ANDA, the FDA indicates whether the generic product is “therapeutically equivalent” to the RLD in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Physicians and pharmacists consider a therapeutic equivalent generic drug to be fully substitutable for the RLD. In addition, by operation of certain state laws and numerous health insurance programs, the FDA’s designation of therapeutic equivalence often results in substitution of the generic drug without the knowledge or consent of either the prescribing physician or patient.

Under the Hatch-Waxman Amendments, the FDA may not approve an ANDA until any applicable period of non-patent exclusivity for the RLD has expired. The FDCA provides a period of five years of non-patent data exclusivity for a

new drug containing a new chemical entity. For the purposes of this provision, a new chemical entity, or NCE, is a drug that contains no active moiety that has previously been approved by the FDA in any other NDA. An active moiety is the molecule or ion responsible for the physiological or pharmacological action of the drug substance. This interpretation of the FDCA by the FDA was confirmed with enactment of the Ensuring Innovation Act in April 2021. In cases where such NCE exclusivity has been granted, an ANDA may not be filed with the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval.

The FDCA also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the applicant and are essential to the approval of the application. This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication. Three-year exclusivity would be available for a drug product that contains a previously approved active moiety, provided the statutory requirement for a new clinical investigation is satisfied. Unlike five-year NCE exclusivity, an award of three-year exclusivity does not block the FDA from accepting ANDAs seeking approval for generic versions of the drug as of the date of approval of the original drug product. The FDA typically makes decisions about awards of data exclusivity shortly before a product is approved.

The FDA must establish a priority review track for certain generic drugs, requiring the FDA to review a drug application within eight months for a drug that has three or fewer approved drugs listed in the Orange Book and is no longer protected by any patent or regulatory exclusivities, or is on the FDA’s drug shortage list. The new legislation also authorizes FDA to expedite review of ‘‘competitor generic therapies’’ or drugs with inadequate generic competition, including holding meetings with or providing advice to the drug sponsor prior to submission of the application.

Hatch-Waxman Patent Certification and the 30-Month Stay

Upon approval of an NDA or a supplement thereto, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or an approved method of using the product. Each of the patents listed by the NDA sponsor is published in the Orange Book. The FDA’s regulations governing patent listings were largely codified into law with enactment of the Orange Book Modernization Act in January 2021. When an ANDA or 505(b)(2) applicant files its application with the FDA, the applicant is required to certify to the FDA concerning any patents listed for the reference product in the Orange Book, except for patents covering methods of use for which the ANDA applicant is not seeking approval. To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would.

Specifically, the applicant must certify with respect to each patent that:

A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification. If the applicant does not challenge the listed patents or indicates that it is not seeking approval of a patented method of use, the application will not be approved until all the listed patents claiming the referenced product have expired (other than method of use patents involving indications for which the applicant is not seeking approval).

If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA applicant.

To the extent that the Section 505(b)(2) applicant is relying on studies conducted for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would. As a result, approval of a Section 505(b)(2) NDA can be stalled until all the listed patents claiming the referenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity,an NCE, listed in the Orange Book for the referenced product has expired, and, in the case of a Paragraph IV certification and subsequent patent infringement suit, until the earlier of 30

months, settlement of the lawsuit or a decision in the infringement case that is favorable to the Section 505(b)(2) applicant.

Patent Term Restoration and Extension

A patent claiming a new drug product may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and the FDA regulatory review. The restoration period granted on a patent covering a product is typically one-half the time between the effective date of a clinical investigation involving human beings is begunthe IND and the submission date of an application, plus the time between the submission date of an application and the ultimate approval date. Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date. Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent in question. A patent that covers multiple products for which approval is sought can only be extended in connection with one of the approvals. The United States Patent and Trademark Office reviews and approves the application for any patent term extension or restoration in consultation with the FDA.

With amendments to the FDCA and the PHSA, Title III of the Cures Act seeks to accelerate the discovery, development, and delivery of new medicines and medical technologies. To that end, and among other provisions, the Cures Act reauthorizes the existing priority review voucher program for certain drugs intended to treat rare pediatric diseases until 2020; creates a new priority review voucher program for drug applications determined to be material national security threat medical countermeasure applications; revises the FDCA to streamline review of combination product applications; requires FDA to evaluate the potential use of “real world evidence” to help support approval of new indications for approved drugs; provides a new “limited population” approval pathway for antibiotic and antifungal drugs intended to treat serious or life-threatening infections; and authorizes the FDA to designate a drug as a “regenerative advanced therapy,” thereby making it eligible for certain expedited review and approval designations.

FDA Approval and Regulation of Companion Diagnostics

If safe and effective use of a therapeutic depends on an in vitro diagnostic, then the FDA generally will require approval or clearance of that diagnostic, known as a companion diagnostic, at the same time that the FDA approves the therapeutic product. In August 2014, the FDA issued final guidance clarifying the requirements that will apply to approval of therapeutic products and in vitro companion diagnostics. According to the guidance, if the FDA determines that a companion diagnostic device is essential to the safe and effective use of a novel therapeutic product or indication, the FDA generally will not approve the therapeutic product or new therapeutic product indication if the companion diagnostic device is not approved or cleared for that indication. Approval or clearance of the companion diagnostic device will ensure that the device has been adequately evaluated and has adequate performance characteristics in the intended population. The review of in vitro companion diagnostics in conjunction with the review of our therapeutic treatments for cancer will, therefore, likely involve coordination of review by the FDA’s Center for Drug Evaluation and Research and the FDA’s Center for Devices and Radiological Health Office of In Vitro Diagnostics Device Evaluation and Safety.

Under the FDCA, in vitro diagnostics, including companion diagnostics, are regulated as medical devices. In the United States, the FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post‑market surveillance. Unless an exemption applies, diagnostic tests require

marketing clearance or approval from the FDA prior to commercial distribution. The two primary types of FDA marketing authorization applicable to a medical device are premarket notification, also called 510(k) clearance, and premarket approval, or PMA.

The FDA previously has required in vitro companion diagnostics intended to select the patients who will respond to the product candidate to obtain PMA approval.

simultaneously with approval of the therapeutic product candidate. The PMA process, including the gathering of clinical and preclinical data and the submission to and review by the FDA, can take several years or longer. It involves a rigorous premarket review during which the applicantsponsor must prepare and provide the FDA with reasonable assurance of the device’s safety and effectiveness and information about the device and its components regarding, among other things, device design, manufacturing and labeling. PMA applications are subject to an application fee. For federal fiscal year 2024, the standard fee which exceeds $250,000 for most PMAs. In addition, PMAs for certain devices must generally include the results from extensive preclinical and adequate and well‑controlled clinical trials to establish the safety and effectiveness of the device for each indication for which FDA approval is sought. In particular, for a diagnostic, a PMA application typically requires data regarding analytical and clinical validation studies. As part of the PMA review, the FDA will typically inspect the manufacturer’s facilities for compliance with the Quality System Regulation, or QSR, which imposes elaborate testing, control, documentation and other quality assurance requirements.

PMA approval is not guaranteed,$483,560 and the FDA may ultimately respond to a PMA submission with a not approvable determination based on deficiencies in the application and require additional clinical trial or other data that may be expensive and time‑consuming to generate and that can substantially delay approval. If the FDA’s evaluation of the PMA applicationsmall business fee is favorable, the FDA typically issues an approvable letter requiring the applicant’s agreement to specific conditions, such as changes in labeling, or specific additional information, such as submission of final labeling, in order to secure final approval of the PMA. If the FDA’s evaluation of the PMA or manufacturing facilities is not favorable, the FDA will deny approval of the PMA or issue a not approvable letter. A not approvable letter will outline the deficiencies in the application and, where practical, will identify what is necessary to make the PMA approvable. The FDA may also determine that additional clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are conducted and then the data submitted in an amendment to the PMA. If the FDA concludes that the applicable criteria have been met, the FDA will issue a PMA for the approved indications, which can be more limited than those originally sought by the applicant. The PMA can include post‑approval conditions that the FDA believes necessary to ensure the safety and effectiveness of the device, including, among other things, restrictions on labeling, promotion, sale and distribution. Once granted, PMA approval may be withdrawn by the FDA if compliance with post approval requirements, conditions of approval or other regulatory standards are not maintained or problems are identified following initial marketing.$120,890.

After a device is placed on the market, it remains subject to significant regulatory requirements. Medical devices may be marketed only for the uses and indications for which they are cleared or approved. Device manufacturers must also establish registration and device listings with the FDA. A medical device manufacturer’s manufacturing processes and those of its suppliers are required to comply with the applicable portions of the QSR,Quality System Regulation, which covercovers the methods and documentation of the design, testing, production, processes, controls, quality assurance, labeling, packaging and shipping of medical devices. Domestic facility records and manufacturing processes are subject to periodic unscheduled inspections by the FDA. The FDA also may inspect foreign facilities that export products to the United States.

Health careHealthcare Law and Regulation

Health care providers and third-party payors play a primary role in the recommendation and prescription of drug products that are granted marketing approval. Arrangements with providers, consultants, third-party payors and customers are subject to broadly applicable fraud and abuse, anti-kickback, false claims laws, patient privacy laws and regulations and other health care laws and regulations that may constrain business and/or financial arrangements. Restrictions under applicable federal and state health care laws and regulations, include the following:

SomeFurther, some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures. StateAdditionally, some state and foreignlocal laws also governrequire the privacy and securityregistration of health informationpharmaceutical sales representatives in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.the jurisdiction.

Pharmaceutical Insurance Coverage and Health CareHealthcare Reform

In the United States and markets in other countries, patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated health care costs. Significant uncertainty exists as to the coverage and reimbursement status of products approved by the FDA and other government authorities. Thus, even if a product candidate is approved, sales of the product will depend, in part, on the extent to which third-party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations, provide coverage and establish adequate reimbursement levels for, the product.product. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved. Third-party payors are increasingly challenging the prices charged, examining the medical necessity and reviewing the cost-effectiveness of medical products and services and imposing controls to manage costs. Third-party payors may limit coverage to specific products on an approved list, also known as a formulary, which might not include all of the approved products for a particular indication.

In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or other comparable marketing approvals. Nonetheless, product candidates may not be considered medically necessary or cost effective. A decision by a third-party payor not to cover a product could reduce physician utilization once the product is approved and have a material adverse effect on sales, results of operations and financial condition. Additionally, a payor’s decision to provide coverage for a

product does not imply that an adequate reimbursement rate will be approved. Further, one payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and reimbursement for the product, and the level of coverage and reimbursement can differ significantly from payor to payor.

The containment of health care costs also has become a priority of federal, state and foreign governments and the prices of products have been a focus in this effort. Governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit a company’s revenue generated from the sale of any approved products. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which a company or its collaborators receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

There have been a number of federal and state proposals during the last few years regarding the pricing of pharmaceutical and biopharmaceutical products, limiting coverage and reimbursement for drugs and biologics and other medical products, government control and other changes to the health care system in the United States. In March 2010, President Obama signed into law the ACA was enacted, which includes measures that have significantly changed health care financingPatient Protection and Affordable Care Act, as amended by both governmentalthe Health Care and private insurers. The provisions ofEducation Affordability Reconciliation Act, or collectively the ACA of importance to the pharmaceutical and biotechnology industry are, among others, the following:

Other legislative changes have been proposed and adopted since the ACA was enacted. These changes includeIn August 2011, the Budget Control Act of 2011, which, among other things, ledcreated measures for spending reductions by Congress. A Joint Select Committee on Deficit Reduction, tasked with recommending a targeted deficit reduction of at least $1.2 trillion for the years 2013 through 2021, was unable to reach required goals, thereby triggering the legislation’s automatic reduction to several government programs. These changes included aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, that startedwhich went into effect in April

Under current legislation, designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products.

These healthcare reforms, as well as other healthcare reform measures that may be adopted in the future, may result in additionalactual reductions in Medicare payments may vary up to 4%. The Consolidated Appropriations Act, which was signed into law by President Biden in December 2022, made several changes to sequestration of the Medicare program. Section 1001 of the Consolidated Appropriations Act delays the 4% Statutory Pay-As-You-Go Act of 2010 (PAYGO) sequester for two years, through the end of calendar year 2024. Triggered by enactment of the American Rescue Plan Act of 2021, the 4% cut to the Medicare program would have taken effect in January 2023. The Consolidated Appropriations Act’s health care offset title includes Section 4163, which extends the 2% Budget Control Act of 2011 Medicare sequester for six months into fiscal year 2032 and other healthcare funding, more rigorous coverage criteria, newlowers the payment methodologiesreduction percentages in fiscal years 2030 and additional downward pressure on the price for any approved product and/or the level of reimbursement physicians receive for administering any approved product. Reductions in reimbursement levels may negatively impact the prices or the frequency with which products are prescribed or administered. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. 2031.

Since enactment of the ACA, there have been, and continue to be, numerous legal challenges and Congressional actions to repeal and replace provisions of the law. In MayFor example, with enactment of the Tax Cuts and Jobs Act of 2017, which was signed by President Trump on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, became effective in 2019. On June 17, 2021, the U.S. House of Representatives passed legislation known asSupreme Court dismissed the American Health Care Act of 2017. Thereafter, the Senate Republicans introduced and then updated a billmost recent judicial challenge to replace the ACA known asbrought by several states without specifically ruling on the Better Care Reconciliation Actconstitutionality of 2017. The Senate Republicans also introducedthe ACA. Litigation and legislation to repealover the ACA without companion legislationare likely to replace it,continue, with unpredictable and a “skinny” version of the Better Care Reconciliation Act of 2017.  In addition, the Senate considered proposed healthcare reform legislation known as the Graham-Cassidy bill.  None of these measures was passed by the U.S. Senate.uncertain results.

The Trump Administration has also takentook executive actions to undermine or delay implementation of the ACA.  In January 2017, President Trump signed an Executive OrderACA, including directing federal agencies with authorities and responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. In October 2017, theOn January 28, 2021, however, President signedBiden issued a secondnew Executive Order allowingwhich directs federal agencies to reconsider rules and other policies that limit Americans’ access to health care and consider actions that will protect and strengthen that access. Under this Order, federal agencies are directed to re-examine: policies that undermine protections for the use of association health planspeople with pre-existing conditions, including complications related to COVID-19; demonstrations and short-term health insurance, which may provide fewer health benefits than the plans sold throughwaivers under Medicaid and the ACA exchanges. Atthat may reduce coverage or undermine the same time,programs, including work requirements; policies that undermine the Administration announcedHealth Insurance Marketplace or other markets for health insurance; policies that make it will discontinuemore difficult to enroll in Medicaid and the paymentACA; and policies that reduce affordability of cost-sharing reduction (CSR) payments to insurance companies until Congress approvescoverage or financial assistance, including for dependents.

The prices of prescription pharmaceuticals have also been the appropriationsubject of funds for such CSR payments. The loss of the CSR payments is expected to increase premiums on certain policies issued by qualified health plans under the ACA. A bipartisan bill to appropriate funds for CSR payments was introducedconsiderable discussion in the Senate, but the future of that bill is uncertain.

More recently, with enactment of the Tax Cuts and Jobs Act of 2017, which was signed by the President on December 22, 2017, Congress repealed the “individual mandate.” The repeal of this provision, which requires most Americans to carry a minimal level of health insurance, will become effective in 2019. According to the Congressional Budget Office, the repeal of the individual mandate will cause 13 million fewer Americans to be insured in 2027 and premiums in insurance markets may rise. Additionally, on January 22, 2018, President Trump signed a continuing resolution on appropriations for fiscal year 2018 that delayed the implementation of certain ACA-mandated fees, including the so-called “Cadillac” tax on certain high cost employer-sponsored insurance plans, the annual fee imposed on certain health insurance providers based on market share, and the medical device excise tax on non-exempt medical devices. Congress will likely consider other legislation to replace elements of the ACA, during the next Congressional session.

Further, thereUnited States. There have been several recent U.S. congressional inquiries, and proposed federal andas well as proposed and enacted state and federal legislation designed to, among other things, bring more transparency to drugpharmaceutical pricing, review the relationship between pricing and manufacturer patient programs, and reduce the costs of drugspharmaceuticals under Medicare and reform government program reimbursement methodologiesMedicaid. In 2020, President Trump issued several executive orders intended to lower the costs of prescription products and certain provisions in these orders have been incorporated into regulations. These regulations include an interim final rule implementing a most favored nation model for drug products. Atprices that would tie Medicare Part B payments for certain physician-administered pharmaceuticals to the federal level, Congresslowest price paid in other economically advanced countries, effective January 1, 2021. That rule, however, has been subject to a nationwide preliminary injunction and, the Trump

administration have each indicatedthis rule, CMS stated that it will explore all options to incorporate value into payments for Medicare Part B pharmaceuticals and improve beneficiaries' access to evidence-based care.

In addition, in October 2020, HHS and the FDA published a final rule allowing states and other entities to develop a Section 804 Importation Program to import certain prescription drugs from Canada into the United States. That regulation was challenged in a lawsuit by the Pharmaceutical Research and Manufacturers of America, or PhRMA, but the case was dismissed by a federal district court in February 2023 after the court found that PhRMA did not have standing to sue HHS. Nine states (Colorado, Florida, Maine, New Hampshire, New Mexico, North Dakota, Texas, Vermont and Wisconsin) have passed laws allowing for the importation of drugs from Canada. Certain of these states have submitted Section 804

At the state level, individual stateslegislatures are increasinglyaggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. In addition, regional health care authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other health care programs. These measures could reduce the ultimate demand for our products, once approved, or put pressure on our product pricing. We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures.

ReviewFederal and State Data Privacy Laws

There are multiple privacy and data security laws that may impact our business activities, in the United States and in other countries where we conduct trials or where we may do business in the future. These laws are evolving and may increase both our obligations and our regulatory risks in the future. In the health care industry generally, under the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, HHS has issued regulations to protect the privacy and security of protected health information used or disclosed by covered entities including certain healthcare providers, health plans, and healthcare clearinghouses. HIPAA also regulates standardization of data content, codes and formats used in healthcare transactions and standardization of identifiers for health plans and providers. HIPAA also imposes certain

Regulations and Procedures Governing Approval of Medicinal Products in the European Union

In order to market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of products. Whether or not it obtains FDA approval for a product, an applicanta sponsor will need to obtain the necessary approvals by the comparable non-U.S. regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions. Specifically, the process governing approval of medicinal products in the European Union, or EU, generally follows the same lines as in the United States. It entails satisfactory completion of preclinical studies and adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication. It also requires the submission to the relevant competent authorities of a marketing authorization application, or MAA, and granting of a marketing authorization by these authorities before the product can be marketed and sold in the EU.

Clinical Trial ApprovalNon-Clinical Studies

The Clinical TrialsNon-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances. Non-clinical (pharmaco-toxicological) studies must be conducted in compliance with the principles of GLP as set forth in EU Directive 2001/20/2004/10/EC (unless otherwise justified for certain particular medicinal products—e.g., radio-pharmaceutical precursors for radio-labeling purposes). In particular, non-clinical studies, both in vitro and in vivo, must be planned, performed, monitored, recorded, reported and archived in accordance with the Directive 2005/28/EC on Good Clinical Practice, or GCP,GLP principles, which define a set of rules and the related national implementing provisions of the individual EU Member States govern thecriteria for a quality system for the approval of clinical trials inorganizational process and the EU. Under this system, an applicant must obtain prior approval fromconditions for non-clinical studies. These GLP standards reflect the competent national authority of the EU Member States in which the clinical trial is to be conducted. Furthermore, the applicant may only start a clinical trial at a specific study site after the competent ethics committee has issued a favorable opinion. The clinical trial application must be accompanied by, among other documents, an investigational medicinal product dossier (the Common Technical Document) with supporting information prescribed by Directive 2001/20/EC, Directive 2005/28/EC, where relevant the implementing national provisions of the individual EU Member StatesOrganization for Economic Co-operation and further detailed in applicable guidance documents.Development requirements.

In April 2014,Clinical Trial Approval

On January 31, 2022, the new Clinical Trials Regulation (EU) No 536/2014 or Clinical Trials Regulation, was adopted. The Regulation was published on June 16, 2014 but is not expected to apply until 2019. The Clinical Trials Regulation will be directly applicablebecame effective in all the EU Member States, repealingEuropean Union and replaced the currentprior Clinical Trials Directive 2001/20/ECEC. The new regulation aims at simplifying and replacing any national legislation that was put in place to implementstreamlining the Directive. Conductauthorization, conduct and transparency of all clinical trials performed in the EU will continue to be bound by currently applicable provisions untilEuropean Union. Under the new Clinical Trials Regulation becomes applicable. The extent to which on-going clinical trials will be governed by the Clinical Trials Regulation will depend on when the Clinical Trials Regulation becomes applicable and on the duration of the individual clinical trial. If a clinical trial continuescoordinated procedure for more than three years from the day on which the Clinical Trials Regulation becomes applicable the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

The new Clinical Trials Regulation aims to simplify and streamline the approval of clinical trials, the sponsor of a clinical trial to be conducted in more than one Member State of the EU. European Union, or EU Member State, is required to submit a single application for approval. The submission will be made through the Clinical Trials Information System, a new clinical trials portal overseen by the European Medicines Agency, or EMA, and available to clinical trial sponsors, competent authorities of the EU Member States and the public.

The main characteristics of the new regulation include: a streamlined application procedure via a single entry point, the “EU Portal and Database”;include a single set of documents to be prepared and submitted for the application, as well as simplified reporting procedures for clinical trial sponsors;sponsors, and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts. Part I is assessed by the appointed reporting Member State, whose assessment report is submitted for review by the sponsor and all other competent authorities of all EU Member States in which an application for authorization of a clinical trial has been submitted (Concerned(EU Member States)States concerned). Part II is assessed separately by each Concerned Member State. concerned. Strict deadlines have been established for the assessment of clinical trial applications. The role of the relevant ethics committees in the assessment procedure will continue to be governed by the national law of the Concernedconcerned EU Member State. However, overall related timelines will be defined by the Clinical Trials Regulation.

the EU Member State in which the clinical trial is to be conducted. If the clinical trial is conducted in different EU Member States, the competent authorities in each of these EU Member States must provide their approval for the conduct of the clinical trial. Furthermore, the sponsor may only start a clinical trial at a specific study site after the applicable ethics committee has issued a favorable opinion.

Parties conducting certain clinical trials must, as in the United States, post clinical trial information in the EU at the EU Clinical Trials Register.

PRIME Designation in the EU

In March 2016, the European Medicines Agency, or EMA launched an initiative to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist. The PRIority MEdicines, or PRIME, scheme is intended to encourage

drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure. Products from small- and medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies. Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and accelerated marketing authorization application assessment once a dossier has been submitted.  Importantly, a dedicated Agency contact and rapporteur from the Committee for Human Medicinal Products, or CHMP, or Committee for Advanced Therapies are appointed early in PRIME scheme facilitating increased understanding of the product at EMA’s Committee level. A kick-off meeting initiates these relationships and includes a team of multidisciplinary experts at the EMA to provide guidance on the overall development and regulatory strategies.

Marketing Authorization

To obtain a marketing authorization for a product under EU regulatory systems, an applicanta sponsor must submit an MAA either under a centralized procedure administered by the EMA, or one of the procedures administered by competent authorities in the EU Member States (decentralized procedure, national procedure or mutual recognition procedure). A marketing authorization may be granted only to an applicanta sponsor established in the EU. Regulation (EC) No 1901/2006 provides that prior to obtaining a marketing authorization in the EU, applicants have tosponsors must demonstrate compliance with all measures included in an EMA-approved Paediatric Investigation Plan, or PIP, covering all subsets of the pediatric population, unless the EMA has granted (1)(i) a product-specific waiver, (2)(ii) a class waiver or (3)(iii) a deferral for one or more of the measures included in the PIP.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid across the European Economic Area (i.e., the EU as well as Iceland, Liechtenstein and Norway). Pursuant to Regulation (EC) No 726/2004, the centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products, and products with a new active substance indicated for the treatment of certain diseases, including products for the treatment of cancer. For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, the centralized procedure may be optional. The centralized procedure may at the request of the applicantsponsor also be used in certain other cases. We anticipate that the centralized procedure will be mandatory for the product candidates we are developing.

Under the centralized procedure, the Committee for Medicinal Products for Human Use, or CHMP, is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization. Under the centralized procedure in the EU, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops, when additional information or written or oral explanation is to be provided by the applicantsponsor in response to questions of the CHMP. Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation. If the CHMP accepts such request, the time limit of 210 days will be reduced to 150 days, but it is possible that the CHMP can revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment. At the end of this period, the CHMP provides a scientific opinion on whether or not a marketing authorization should be granted in relation to a medicinal product. Within 15 calendar days of receipt of a final opinion from the CHMP, the European Commission must prepare a draft decision concerning an application for marketing authorization. This draft decision must take the opinion and any relevant provisions of EU law into account. Before arriving at a final decision on an application for centralized authorization of a medicinal product the European Commission must consult the Standing Committee on Medicinal Products for Human Use. The Standing Committee is composed of representatives of the EU Member States and chaired by a non-voting European Commission representative. The European Parliament also has a related “droit de regard”.regard.” The European Parliament's role is to ensure that the European Commission has not exceeded its powers in deciding to grant or refuse to grant a marketing authorization.

The decentralized procedure is available to sponsors who wish to market a product in various EU Member States where such product has not received marketing approval in any EU Member States before. The decentralized procedure provides for approval by one or more other, or concerned, member states of an assessment of an application performed by one member state designated by the sponsor, known as the reference member state. Under this procedure, a sponsor submits an application based on identical dossiers and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference member state and concerned member states. The reference member state prepares a draft assessment report and drafts of the related materials within 210 days after receipt of a valid application. Within 90 days of receiving the reference member state’s assessment report and related materials, each concerned member state must decide whether to approve the assessment report and related materials.

If a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the European Commission, may grant a so-called “marketing authorization under exceptional circumstances”. Such authorizationwhose decision is intended for products for which the applicant can demonstrate that it is unable to provide

binding on all member states.

comprehensive dataIn particular circumstances, European Union legislation (Article 14–a Regulation (EC) No 726/2004 (as amended by Regulation (EU) 2019/5 and Regulation (EC) No 507/2006 on the efficacy and safety under normal conditions of use, because the indicationsConditional Marketing Authorizations for which the product in question is intended are encountered so rarely that the applicant cannot reasonably be expectedMedicinal Products for Human Use) enables sponsors to provide comprehensive evidence, or in the present state of scientific knowledge, comprehensive information cannot be provided, or it would be contrary to generally accepted principles of medical ethics to collect such information. Consequently,obtain a conditional marketing authorization under exceptional circumstances may be granted subject to certain specific obligations, which may include the following:

A marketing authorization under exceptional circumstances is subject to annual review to reassess the risk-benefit balance in an annual reassessment procedure. Continuation of the authorization is linked to the annual reassessment and a negative assessment could potentially result in the marketing authorization being suspended or revoked. The renewal of a marketing authorization of a medicinal product under exceptional circumstances, however, follows the same rules as a “normal” marketing authorization. Thus, a marketing authorization under exceptional circumstances is granted for an initial five years, after which the authorization will become valid indefinitely, unless the EMA decides that safety grounds merit one additional five-year renewal.

The European Commission may also grant a so-called “conditional marketing authorization” prior to obtaining the comprehensive clinical data required for an application for a full marketing authorization.authorization. Such conditional marketing authorizationsapprovals may be granted for product candidates (including medicines designated as orphan medicinal products), if (i) the risk-benefit balance of(1) the product candidate is positive, (ii) itintended for the treatment, prevention or medical diagnosis of seriously debilitating or life-threatening diseases; (2) the product candidate is likelyintended to meet unmet medical needs of patients; (3) a marketing authorization may be granted prior to submission of comprehensive clinical data provided that the applicant will be in a position to provide the required comprehensive clinical trial data, (iii) the product fulfills an unmet medical need and (iv) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required.required; (4) the risk-benefit balance of the product candidate is positive, and (5) it is likely that the sponsor will be in a position to provide the required comprehensive clinical trial data. A conditional marketing authorization may contain specific obligations to be fulfilled by the marketing authorization holder, including obligations with respect to the completion of ongoing or new studies and with respect to the collection of pharmacovigilance data. Conditional marketing authorizations are valid for one year, and may be renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions and/or specific obligations. The timelines for the centralized procedure described above also apply with respect to the review by the CHMP of applications for a conditional marketing authorization.authorization, but applicants can also request EMA to conduct an accelerated assessment, for instance in cases of unmet medical needs.

The EU medicines rules expressly permitExceptional Circumstances

A marketing authorization may also be granted “under exceptional circumstances” when the EU Member Statesapplicant can show that it is unable to adopt national legislation prohibitingprovide comprehensive data on the efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being introduced. This may arise in particular when the intended indications are very rare and, in the present state of scientific knowledge, it is not possible to provide comprehensive information, or restrictingwhen generating data may be contrary to generally accepted ethical principles. This marketing authorization is close to the sale, supplyconditional marketing authorization as it is reserved to medicinal products to be approved for severe diseases or useunmet medical needs and the applicant does not hold the complete data set legally required for the grant of anya marketing authorization. However, unlike the conditional marketing authorization, the applicant does not, and will not in the future, have to provide the missing data. Although the marketing authorization “under exceptional circumstances” is granted definitively, the risk-benefit balance of the medicinal product containing, consisting of or derived from a specific type of human or animal cell, such as embryonic stem cells. Whileis reviewed annually and the products we have in development do not make use of embryonic stem cells, it is possible that the national laws in certain EU Member States may prohibit or restrict us from commercializing our products, even if they have been granted an EU marketing authorization.

Unlike the centralized authorization procedure, the decentralized marketing authorization procedure requires a separate application to, and leads to separate approval by,is withdrawn in case the competent authorities of each EU Member State in whichrisk-benefit ratio is no longer favorable. Under these procedures, before granting the product is to be marketed. This application is identical to the application that would be submitted tomarketing authorization, the EMA for authorization through the centralized procedure. The reference EU Member State prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application. The resulting assessment report is submitted to the concerned EU Member States who, within 90 days of receipt, must decide whether to approve the assessment report and related materials. If a concerned EU Member State cannot approve the assessment report and related materials due to concerns relating to a potential serious risk to public health, disputed elements may be referred to the European Commission, whose decision is binding on all EU Member States.

The mutual recognition procedure similarly is based on the acceptance byor the competent authorities of the EU Member Statesmember states make an assessment of the risk-benefit balance of the product on the basis of scientific criteria concerning its quality, safety, and efficacy. Except conditional marketing authorizations, marketing authorizations have an initial duration of five years. After these five years, the authorization may be renewed on the basis of a medicinal product byreevaluation of the competent authorities of other EU Member

States. The holder of a national marketing authorization may submit an application to the competent authority of an EU Member State requesting that this authority recognize the marketing authorization delivered by the competent authority of another EU Member State.risk-benefit balance.

Regulatory Data Protection in the EU

In the EU, innovative medicinal products approved on the basis of a complete independent data package qualify for eight years of data exclusivity upon marketing authorization and an additional two years of market exclusivity pursuant to Directive 2001/83/EC. Regulation (EC) No 726/2004 repeats this entitlement for medicinal products authorized in accordance the centralized authorization procedure. Data exclusivity prevents applicantssponsors for authorization of generics of these innovative products from referencing the innovator’s data to assess a generic (abridged) application for a period of eight years. During an additional two-year period of market exclusivity,, a generic marketing authorization application can be submitted and authorized, and the innovator’s data may be referenced, but no generic medicinal product can be placed on the EU market until the expiration of the market exclusivity. The overall ten-year period will be extended to a maximum of 11 years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. Even if a compound is considered to be a new chemical entity so that the innovator gains the prescribed period of data exclusivity, another company nevertheless could also market another version of the product if such company obtained marketing authorization based on an MAA with a complete independent data package of pharmaceutical tests, preclinical tests and clinical trials.

Periods of Authorization and Renewals

A marketing authorization has an initial validity for five years in principle. The marketing authorization may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the EU Member State. To this end, the marketing authorization holder must provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases to be valid. The European Commission or the competent authorities of the EU Member States may decide on justified grounds relating to pharmacovigilance, to proceed with one further five-year period of marketing authorization. Once subsequently definitively renewed, the marketing authorization shall be valid for an unlimited period. Any authorization which is not followed by the actual placing of the medicinal product on the EU n  market (in case of centralized procedure) or on the market of the authorizing EU Member State within three years after authorization ceases to be valid.  valid.