In the context of an ADC, two factors are considered in the selection of the antigen to which the antibody is targeted: (i) preferential expression on tumor cells with as limited as possible expression on healthy tissues and (ii) level of antigen expression on tumor cells. The amount of payload delivered to the tumor cell is related to the binding of the ADC to the antigen and internalization, and as a result, it is generally recognized that very high and consistent (or homogeneous) antigen expression throughout the tumor correlates with higher efficacy. For example, ado‑trastuzumab emtansine is indicated for HER2‑positive late stage metastatic breast cancer. The HER2 antigen expression levels in the tumors of these patients is very high, and it has been reported that patients with the highest levels of HER2 expression derive the most therapeutic benefit. The ability to achieve a therapeutic concentration of payload in the tumor quickly diminishes as the level of antigen expression decreases, which may explain why current ADC approaches have only demonstrated efficacy in a limited range of tumors with relatively high expression of a target antigen.

Chemotherapeutic payloads

The second component of an ADC is a chemotherapeutic payload, or cell‑killing agent, too potent to be delivered as a standalone therapy. In the context of an ADC, the payload, which is conjugated to the antibody, is selectively delivered to the tumor as a result of the targeting ability of the antibody thereby limiting toxicity to healthy tissues.

The majority of payloads currently used in ADCs fall within one of two categories, based on mechanism of action: anti‑tubulin agents or DNA damaging agents. Many of the ADCs in clinical development use anti‑tubulin linker‑payload platforms developed by ImmunoGen, Inc., or ImmunoGen (SMCC‑DM1 and SPDB‑DM4) and Seattle Genetics (mc‑MMAF and vc‑MMAE). Anti‑tubulin payloads are preferentially toxic to dividing cells versus resting cells, a feature that is beneficial for ADCs where the target antigen is also expressed on healthy resting cells. Anti‑tubulins typically have potencies of 0.1 to 10 nM but are not effective against certain tumors, such as colorectal. More recently, in order to increase potency and potentially expand addressable indications, the field has seen an emergence of novel DNA damaging payload classes, such as pyrrolobenzodiazepine, or PBD, dimers, with potencies 100 to 1000 times higher than the anti‑tubulins. These payloads bind to the cell’s DNA, leading to cell death. To date, ADCs utilizing PBD dimers have been shown to be highly potent in early clinical development, however due to toxicities, the dose and duration of these ADCs have been limited.

After internalization by the targeted tumor cell, some ADC payloads have an additional ability to passively diffuse into and kill neighboring cells. This bystander effect can be very useful in enhancing the efficacy of these ADCs in tumors with heterogeneous antigen expression by providing a mechanism to kill neighboring tumor cells which do not express the target antigen. Whilecontrol the bystander effect canby locking the cytotoxic drug inside cells after allowing a short period of antigen-independent diffusion throughout the tumor. As the drug diffuses through neighboring cells, the DolaLock payload is metabolized to a form that is still highly potent but is designed to no longer be beneficialable to cross the cell membrane. We believe this “controlled bystander effect” may allow for enhanced safety and efficacy.

Dolaflexin platform

Our proprietary and highly differentiatedThe Dolaflexin platform iswas designed to increase the efficacy, safety and tolerability of ADCs by overcoming key limitations of existing technologies based on direct conjugation.ADCs. Dolaflexin consists ofutilizes our proprietary Fleximer polymer, a biodegradable, highly biocompatible, water solublewater-soluble polymer that is able to which are attachedcarry multiple copiespayloads. Instead of our proprietary auristatin drug payload, using a linker specifically optimized for use with our polymer. The high water solubility of the Fleximer polymer compensates for the low solubility of the payload, surrounding the payload and protecting it from aggregation. Multiple copies of this Dolaflexin polymer‑drug conjugate can then be attacheddirect conjugation to an antibody, of choice,payloads are attached through an optimized, cleavable linker to the Fleximer scaffold, which significantly increases the payload capacity of the resulting ADC. As shown in the schematic in Figure 2, this approach differs from most other ADC technologies where the payload is directlythen conjugated to the antibody viathrough a non-cleavable linker. UsingOur Fleximer polymer allows for an increased number of payloads carried by each ADC as compared to other ADC therapies and has demonstrated dramatically improved drug solubility and pharmacokinetics with higher DAR.

ranging from 0 to 3+, with 3+ representing the highest level of HER2 expression. Patients with HER2 3+ expression or who have gene amplification that results in them having multiple copies of the HER2 gene are considered HER2‑positive. There is a significantly larger population of patients with HER2 expression of 1+ or 2+ and without gene amplification, and for those patients, there are currently no approved HER2‑targeted therapies in breast, gastric or other cancers.

Our development plan is supported by extensive preclinical data demonstrating XMT‑1522’s increased potency compared to currently marketed HER2 therapies, including against HER2 1+ and 2+ breast and gastric cancers where existing therapies are not approved and HER2-expressing breast, NSCLC and gastric cancers where existing therapies have failed. The following chart shows the initial therapeutic focus for our XMT‑1522 product candidate. We are focused in areas that leverage the advantages of XMT‑1522 and where patients have limited treatment options.

Among breast cancer patients, approximately 55% express HER2 at the 1+ or 2+ level without HER2 gene amplification. These patients are not eligible to receive existing HER2 therapies (trastuzumab, pertuzumab or ado‑trastuzumab emtansine) and have limited other options. Initially, we are studying XMT‑1522 in advanced or metastatic breast cancer patients who express HER2 at the 1+ and 2+ levels (whether hormone negative or have become hormone resistant or refractory) and have progressed on at least one line of chemotherapy. If proof‑of‑concept is established in this patient population, opportunities exist to move to an earlier stage of treatment in this hard‑to‑treat patient population. We are also planning to develop XMT‑1522 for HER2-positive breast cancer patients whose tumors have progressed after treatment with other HER2 therapies, such as ado‑trastuzumab emtansine and pertuzumab, and have limited other treatment options.

Among patients with NSCLC, expression of the HER2 protein at the 1+, 2+ or 3+ level hashad been shown to occur at a rate of approximately 50%. We are developing XMT‑1522 in HER2 1+, 2+ and 3+ patients who have previously been treated with a platinum‑containing regimen. Unlike HER2‑positive breast cancer, HER2 expression in NSCLC is not a dominant driver of tumor growth and hence HER2‑targeted antibodies have failed in this setting. If proof‑of‑concept is established in this population, opportunities exist to move earlier in the treatment paradigm or consider combination treatment with PD‑1/PD‑L1 antibodies, the emerging standard of care in front line NSCLC. Our emerging preclinical data appear to also support the potential for synergy with immune checkpoint inhibitors.

Among gastric cancer patients, approximately 15% to 20% are HER2‑positive. Trastuzumab is approved for this patient population but ado‑trastuzumab emtansine has failed to demonstrate a survival benefit. We are developing XMT‑1522 in HER2‑positive patients who have received prior therapy with trastuzumab. If proof‑of‑concept is established in this population, opportunities exist to address gastric cancer patients expressing HER2 at the 1+ and 2+ levels.

Clinical development plan and timeline

XMT‑1522 is in a Phase 1 open label, multi‑center study and is administered as an intravenous infusion once every three weeks. There are two parts to the Phase 1 study: (i) a dose escalation primarilyexploration trial in breast cancer patients with ovarian cancer and non-small cell lung cancer, or NSCLC, and we closed this company-sponsored trial in September 2022.

doses of 3 mg/kg or below, either as a single dose on Day 0 of the experiment or in three weekly doses on Days 0, 7 and 14. Experiments were allowed to run until at least Day 60, or at least 45 days following the last administration of XMT‑1522. As depicted in the graph, XMT‑1522 was able to achieve complete or near‑complete tumor regressions in 11 out of the 15 models. Of the 11 models that achieved complete or near‑complete regression, the regressions were sustained until Day 60 in 10 of the models even in the absence of additional therapy, showing the durability of tumor regressions induced by XMT‑1522 (Figure 6).

Figure 5. Waterfall Plot of Best Tumor Response to XMT‑1522 in Xenograft Models

Figure 6. Day 60 Tumor Volumes in Models Achieving Complete or Near‑Complete Regression After Treatment with XMT‑1522

To evaluate the relative efficacy of XMT‑1522 compared to ado‑trastuzumab emtansine, we conducted studies in tumor models representing high, medium and low levels of HER2 expression (Figure 7). In the high HER2‑expressing model (NCI‑N87 gastric cancer, HER2 gene amplified, HER2 3+), XMT‑1522 induced complete tumor regressions after a single 1 mg/kg dose on Day 1. As we expected, ado‑trastuzumab emtansine was similarly active in HER2 high expressing tumors after a single dose of 10 mg/kg. However, in the medium‑ and low‑expressing models, XMT‑1522 was still able to induce

durable complete tumor regressions where ado‑trastuzumab emtansine failed to do so, even at doses at least 10‑fold higher than the XMT‑1522 dose. XMT‑1522 was also capable of inducing complete tumor regressions in models of acquired resistance to ado‑trastuzumab emtansine, both in a model generated in the laboratory and in a tumor model obtained from a patient who responded to ado‑trastuzumab emtansine but then experienced disease progression. In contrast, in the model obtained from a patient, lapatinib/gemcitabine, the current standard of care, did not have material impact on tumor growth. These data suggest that our ADCs may have improved efficacy relative to traditional ADCs, even in tumors where the target antigen is expressed at moderate to low levels.

Figure 7. Comparing XMT‑1522 to Ado‑Trastuzumab Emtansine in Models Representing High, Medium and Low Levels of HER2 Expression

To evaluate the potential of XMT‑1522 in combination with other agents, we conducted preclinical studies with other HER2‑targeted therapies and checkpoint inhibitors currently used in the treatment of cancer. Since XMT‑1522 binds to an epitope distinct from the HER2 epitopes to which trastuzumab and pertuzumab bind, it does not compete with either of those antibodies for HER2 binding. We have shown that the triple combination of XMT‑1522 with trastuzumab and pertuzumab is more active than XMT‑1522 alone or the trastuzumab/pertuzumab doublet in a HER2‑driven tumor model (N87 HER2‑positive gastric cancer) (Figure 8). In this experiment, XMT‑1522 was administered at a dose lower than the maximally efficacious dose to manifest the triplet synergy. Consequently, we believe XMT‑1522 has the potential to be combined with either or both of those monoclonal antibodies, even at doses of trastuzumab and pertuzumab over 20‑fold higher than the dose of XMT‑1522, to promote more complete inhibition of HER2 signaling while not interfering with delivery of the XMT‑1522 chemotherapeutic payload.

Figure 8. Synergy Seen in Triple Combination with Trastuzumab and Pertuzumab

ADC payloads, including AF‑HPA, have been shown to induce immunogenic cell death, or ICD. Chemotherapeutic compounds that induce ICD are hypothesized to increase the presentation of tumor antigens in the tumor microenvironment and to generate an immune response to the tumor, resulting in increased sensitivity of the tumor to immune checkpoint drugs such as the PD‑1 or PD‑L1 inhibitors. We have tested this hypothesis with XMT‑1522 in a mouse model carrying a humanized immune system and a patient‑derived NSCLC tumor expressing HER2. In this experiment, we tested the PD‑1 antibody pembrolizumab alone, XMT‑1522 alone and the combination of XMT‑1522 with pembrolizumab. As shown in Figure 9, the combination of XMT‑1522 with pembrolizumab is more active than either therapy alone. We believe these data support the potential to combine Dolaflexin ADCs with immune checkpoint inhibitors in cancer indications where checkpoint inhibitors are active.

Figure 9. XMT‑1522 in Combination with Pembrolizumab Results in Greater Efficacy than Either Treatment Alone

Preclinical safety studies

We have evaluated the safety and tolerability of XMT‑1522 in both non‑human primates and rats. Based on these studies, we have established that the XMT‑1522 plasma concentrations necessary for efficacy in the variety of models studied are below the highest tolerated dose in non‑human primates. Furthermore, we have established that XMT‑1522 is stable in circulation, has predictable pharmacokinetics and has a safety profile acceptable for Phase 1 testing in patients with advanced cancer. The plasma concentrations of XMT‑1522 ADC and the monoclonal antibody were similar over the course of the study and the concentration of free AF‑HPA payload was less than 0.05% the concentration of antibody conjugated AF‑HPA at all time points, indicating the stability of the ADC in circulation. Plasma exposure to free AF payload was also low and peaked at a later time point compared to free AF‑HPA, consistent with the metabolism of our AF‑HPA payload. There was no evidence of cardiotoxicity in non‑human primates at any dose tested, including at doses significantly above the highest tolerated dose in dose finding studies. The most pronounced hematologic finding in non‑human primates was a transient decrease in platelet counts not associated with clinically‑significant bleeding. Neutropenia was not observed in either species. Opthalmological evaluation was performed in preclinical studies in both species. Adverse ocular events related to XMT‑1522 were seen only at the highest dose tested in the rat, associated with plasma exposure of XMT‑1522 greater than eight fold higher than the exposure at the highest non‑severely toxic dose in non‑human primates. Gastrointestinal toxicity was the primary toxicity associated with XMT‑1522 and was seen only in non‑human primates. These effects were fully reversible at tolerated doses.

XMT‑1536: our NaPi2b‑targeted ADC

Program description

Our second product candidate, XMT‑1536, is a Dolaflexin ADC targeting NaPi2b‑expressing tumors. NaPi2b is an antigen highly expressed in 60 to 90% of both non‑squamous NSCLC and epithelial ovarian cancer. However, the expression of NaPi2b in normal tissue is restricted to a limited subset of cell types, rendering it an ideal antigen for ADC development. XMT‑1536 is composed of a proprietary anti‑NaPi2b antibody, selected for its advantageous internalization properties. XMT‑1536 entered clinical development in late 2017 and is currently in a Phase 1 dose escalation study.

Genentech’s lifastuzumab vedotin, an ADC targeting NaPi2b utilizing the Seattle Genetics vc‑MMAE platform, provided encouraging results in Phase 1 studies in ovarian cancer, where a 41% confirmed objective response rate by RECIST criteria was achieved without evidence of target‑mediated toxicities. However, in a randomized Phase 2 study in platinum‑resistant ovarian cancer, lifastuzumab vedotin failed to demonstrate a statistically‑significant benefit to liposomal doxorubicin, the comparator, on the primary endpoint of progression free survival, or PFS, despite a numerically superior response rate and improvement in median progression‑free survival. Surprisingly, responses in NSCLC patients were also limited despite widespread expression of the NaPi2b target in the Phase 1 patients. Genentech has since discontinued development of lifastuzumab vedotin. The partial validation of the NaPi2b target provided by these studies forms the basis of our rationale to develop XMT‑1536 as a potentially clinically meaningful ADC for the treatment of epithelial ovarian cancer and non‑squamous NSCLC. Based on our preclinical data, we believe that XMT‑1536 may offer improved efficacy and a wider therapeutic index in these patients.

Unmet need and epidemiology

Ovarian cancer patients who progress during or within six months of completion of platinum‑based therapy are considered to have platinum‑resistant disease. These patients have limited treatment options other than single agent platinum‑based chemotherapies (e.g., docetaxel, paclitaxel) or targeted therapies, such as bevacizumab (in patients who have not received beviciaumab for treatment of earlier stage disease), olaparib (for patients carrying germline mutations in the BRCA1 and BRCA2 genes) and rucaparib (for patients carrying germline and somatic mutations in the BRCA1 and BRCA2 genes), which have either shown limited overall survival benefit (e.g., bevacizumab) or have yet to demonstrate survival benefit (e.g., olaparib and rucaparib). We plan to initially test XMT‑1536 in patients with platinum‑resistant ovarian cancer. If proof‑of‑concept is established, there are opportunities to address treatment of primary ovarian cancer and recurrent, platinum‑sensitive disease where platinum‑based chemotherapy regimens remain the standard of care.

Given the breadth of NaPi2b expression in non‑squamous NSCLC, we believe XMT‑1536 also has the potential to treat a broad population of NSCLC patients. Initially, we plan to test XMT‑1536 in platinum‑resistant NSCLC patients. If proof‑of‑concept is established in this population, we believe that there are opportunities to move earlier in the treatment paradigm or consider combination treatment with PD‑1/PD‑L1 antibodies, the emerging standard of care in front line NSCLC. Our preclinical data indicating that the AF‑HPA payload used in XMT‑1536 induced immunogenic cell death support the potential for synergy with immune checkpoint inhibitors.

There are currently no FDA‑tests approved testsby the FDA to measure NaPi2b expression on tumor cells, however given the prevalence of its expression on epithelial ovarian and non‑squamous NSCLC tumors,cells. While our initial clinical studies of XMT‑1536 will be conducted without prospective identification oftrials have not prospectively identified patients with NaPi2b‑expressing tumors. Nonetheless, we have developed and validated anNaPi2b-expressing tumors, our development plan for UpRi includes the development of a proprietary immunohistochemistry assay to measure NaPi2b expression whichin tumors. Based on our retrospective evaluation of tumors collected in the dose escalation and expansion portions of our initial UpRi Phase 1 trial, our evaluation of patient tissue bank materials and other published data we believe that high NaPi2b expression is present in at least a majority of ovarian cancer patients. We intend to use retrospectivelycontinue developing our assay in order to confirm our estimates of the broad prevalence of NaPi2b expression in our target patient populations while correlatingevaluating the correlation of those expression levels with the efficacy observed in such patients. To date, data generated using our assay has found NaPi2b expression in 12 out of 20 and 16 out of 20 samples of ovarian and lung cancer, respectively. If resultsWe are sufficiently robust, we believe there is an opportunity to develop XMT‑1536 without the need forcurrently collaborating with a companion diagnostic, or with the inclusion of the NaPi2b assay in the label as a complementary diagnostic to guide physician decision making. If a companion diagnostic is required for the label for XMT‑1536, we may seek approval for our validated assay as a companion diagnostic or we may contract with third partiesparty to create and obtain regulatory approval for our assay as a commercial companion diagnostic.

Preclinical studies

XMT‑1536 induced completeor complementary diagnostic, and we expect that the third party would seek such approval simultaneously with our submission of a BLA, if any, for UpRi around the end of 2023. We are using and expect to continue to use the assay to evaluate Tumor Proportion Score of greater than or equal to 75%, TPS75, to identify patients with tumors that have high NaPi2b tumor regressionsexpression and to help us enrich our data analyses based on biomarker expression. We refer to patients with cancers with TPS75 as “NaPi2b positive.”

forprimary endpoint is ORR in the NaPi2b expression and represented a range of tumor genotypes frequently observed in NSCLC adenocarcinoma, including RAS/RAF mutant tumors, EGFR mutant tumors, ALK‑translocated tumors and tumors not carrying known oncogenic drivers. As with the data presented above, each column represents an individual tumor model,positive patient population, and the more negativesecondary endpoints are ORR in the value,overall population, duration of response and safety. In October 2022, we completed the greaterenrollment of approximately 270 patients in UPLIFT at sites in the degreeUnited States, Europe and Australia. We expect to announce top-line data from UPLIFT in mid-2023 following the major oncology conferences scheduled for June. If we achieve positive results from UPLIFT, we believe that the trial may enable us to submit a BLA for UpRi for the treatment of XMT‑1536 efficacy,patients with negative 100% representing complete tumor regression. platinum-resistant ovarian cancer with one to four prior lines of therapy under the FDA's accelerated approval pathway around the end of 2023.

Platform development

We intend to establish a leading position in the field of ADCs by continuing to advance platform innovations that further broaden the potentialcore pillar of our ADCsoverall corporate strategy, and our platforms and product candidates allow us to deliver clinically meaningful benefit for cancer patients. Our areasconsider multiple potential types of focus include the development of alternative scaffolds to drive homogeneity of our ADCs, alternative payloads to address additional indications and drug resistance and alternative targeting moieties to improve tumor penetration and biodistributuion. We believe these efforts may lead to improved efficacy and tolerability as well as expansion of the addressable patient population. 

Strategic partnerships

Strategic partnerships with leading biopharmaceutical companies to advance Fleximer ADC product candidates

strategic collaborations. We believe that our ADC platform hasplatforms have broad applicability across a number of targets. We have used strategic partneringtargets, allowing us to accelerate bringing Fleximer ADCsconsider collaborations in which a partner provides proprietary antibodies for a select number of targets and we utilize our platforms to patients. Since 2012, we have entered into a strategic partnership for XMT‑1522 with Takeda, through its wholly owned subsidiary Millennium Pharmaceuticals, Inc., and strategic research and development partnerships with Takeda, Merck KGaA and Asana BioSciences, LLC (by assignment from Endo Pharmaceuticals Inc.) to enable development of certaindiscover novel ADC product candidates utilizing Fleximer. In establishing each ofcandidates. Under these partnerships, our primary objectives were to collaborate with leading biopharmaceutical companies to validate the potential of ADC product candidates utilizing Fleximer, gain meaningful near‑term funding and drive significant long‑term value. Under each of our partnerships,collaboration agreements, we own the rights to any improvements to our ADC platform. The detailsplatform(s). For instance, we have entered into two discovery collaborations with Merck KGaA and a separate discovery collaboration with Janssen. We believe platform-based collaborations allow us to leverage the potential of our material existing strategic partnerships are as follows:

Takeda XMT‑1522 strategic partnership

platforms, provide near-term capital and help us potentially bring important new therapeutic options to patients.

Phase 2 clinical study of XMT‑1522. Each party may terminate this agreement in its entirety upon bankruptcy or similar proceedings of the other party and in its entirety or on a country‑by‑country basis upon an uncured material breach of the agreement by the other party. Following any such termination, all rights in XMT‑1522 licensed to Takeda will revert to us for further development and commercialization.

Takeda strategic research and development partnership

In March 2014, we entered into a collaboration agreement with Takeda for the development and commercialization of ADC product candidates utilizing Fleximer. We formed a strategic partnership with Takeda because of their industry expertise in oncology drug development and their experience developing and commercializing brentuximab vedotin outside of the United States, one of only four approved ADCs. Under this agreement, Takeda received rights to select up to seven target antigens, of which it has selected four to date. Takeda is responsible for generating antibodies against the target antigens, and we are responsible for generating Fleximer and our proprietary payloads and conjugating this to the antibody to create the ADC product candidates. With respect to each target antigen selected by Takeda, we granted Takeda an exclusive, worldwide license under certain of our Fleximer ADC‑related patents and know‑how to develop, manufacture and commercialize ADC product candidates directed to such target antigen. Takeda is then responsible for the further development, manufacture and commercialization of these ADC product candidates. Takeda selected its first Dolaflexin ADC in 2017 and initiated full preclinical IND enabling studies.

Takeda is responsible for its own costs in the development, commercialization and manufacture of ADC product candidates and reimburses us for our costs incurred in performing our research activities under this agreement, except in the event that we exercise our opt‑in right as described below.

Through December 31, 2017, we have received $24.8 million in upfront payments and option fees under this agreement. If products are successfully developed and commercialized against all seven potential target antigens, we are entitled to receive future development, regulatory and commercial milestones of up to $1.063 billion, except in the event that we exercise our opt‑in right as described below. During the applicable royalty term, we are entitled to receive tiered royalties in the mid‑single digit percentages on net sales of each product targeting Takeda’s first or second target antigen and in the mid‑ to high‑single digit percentages on net sales of each product targeting Takeda’s third through seventh target antigens if products are successfully developed and commercialized by Takeda and except in the event that we exercise our opt‑in right as described below.

In addition, we have an option to co‑develop and co‑commercialize one product targeting one of Takeda’s third through seventh target antigens in the United States for a payment of $15 million in cash or in our common stock, and we may exercise such option with respect to an applicable product no later than 30 days after initiation ofADC in a Phase 2 clinical study for such product or at an earlier time if Takeda intendscountry, Janssen’s license becomes a perpetual, irrevocable, non-exclusive, fully-paid and royalty-free right and license, with the right to grant rights to such product to a third party. If we elect to exercise the option to co‑develop and co‑commercialize a product, we will share development costs related to such product in the United States equally with Takeda and we will be responsible for 30% of the global development costs for such product. If we elect to exercise the option to co‑develop and co‑commercialize a product, we will share the profits and losses related to such product in the United States equally with Takeda in lieu of certain milestones and royalties on the net sales in the United States.

Unless earlier terminated, this agreement will expire upon the expiration of the last royalty term for a productsublicenses, under the agreementrelevant platform technology and our interest in all countries. The royalty term means, on a product‑by‑productany joint technology to develop, manufacture, commercialize and country‑by‑country basis, the period commencing upon the first commercial sale of a product and ending upon the later to occur of: (i) the later of expiration of the last Mersana patent right that would be infringed by the manufacture or commercialization ofotherwise exploit such productADC in such country and the expiration of the first‑to‑expire patent right claiming the composition of matter of the ADC contained in such product, or (ii) 10 years from the date of first commercial sale of such product in such country. Upon the expiration of each royalty term for each product on a country‑by‑country basis, Takeda’s exclusive license will convert to a perpetual, non‑exclusive, royalty‑free license with respect to such product in such country. Except with respect to the target antigen of a product for which we exercised our option to co‑develop and co‑commercialize in the United States, Takeda may terminate this agreement in its entirety or with respect to any target antigen for convenience upon 45 days’ prior written notice. Each party may terminate this agreement in its entirety upon bankruptcy or similar proceedings of the other party

or upon an uncured material breach of the agreement by the other party. However, if such breach only relates to one target antigen, the agreement may only be terminated with respect to such target antigen.

2014 Merck KGaA strategic research and development partnership

Collaboration

Dolaflexin platform technology. Our HER2‑targeted antibody used in XMT‑1522 was the result of this partnership. We exercised an option under this agreement to acquire Adimab’s interest in this antibody and certain other antibodies developed under this partnership. Through exercising this option, we have also acquired Adimab’s interests in patents and know‑how arising from its work that were solely related to such antibodies and obtained a non‑exclusive, worldwide license to Adimab’s background technology to exploit ADCs containing these antibodies. Under the agreement, we are responsible for all development, manufacture and commercialization activities related to ADCs containing these antibodies, including XMT‑1522, and we must use commercially reasonable efforts to develop or commercialize one such ADC or our rights to these antibodies will revert to Adimab. During 2014, we paid an option exercise fee of $1.5 million under this agreement and are obligated to pay Adimab up to $26.5 million in development and regulatory milestones for each product containing one of these antibodies and a low‑single digit percentage royalty on net sales of each product during the applicable royalty term if this product is successfully developed and commercialized. The royalty term for XMT‑1522 means, on a country‑by‑country basis, the period during which (i) the sale of XMT‑1522 in the country of sale, or the manufacture of XMT‑1522 in the country of manufacture, is covered by a licensed patent in such country or (ii) XMT‑1522 has regulatory exclusivity granted by the FDA or any other regulatory authority in such country providing a period of marketing exclusivity or data exclusivity. During 2017, we made a milestone payment of $1.5 million to Adimab with respect to XMT‑1522.

Recepta license for the NaPi2b antibody in XMT‑1536

as Phase 4 clinical studiestrials, may be conducted after initial marketing approval. These studiestrials are used to gain additional experience from the treatment of a larger number of patients in the intended therapeutic indication andtreatment group. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials, such as to document averify clinical benefit in the case of products approved under accelerated approval regulationsregulations. Failure to exhibit due diligence with regard to conducting mandatory Phase 4 clinical trials could result in withdrawal of FDA approval for products. In December 2022, with the passage of the Food and Drug Omnibus Reform Act, or when otherwise requestedFDORA, 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.

Fast track, breakthrough therapy and priority review designations

The FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatmentFollowing approval of a serious or life‑threatening disease or condition. These programs are fast track designation, breakthrough therapy designation and priority review designation.

First,new prescription product, the FDA may designate amanufacturer, the approved product for “fast track” review if it is intended for the treatment of a serious or life‑threatening disease or condition and it demonstrates the potential to address unmet medical needs for such 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 BLA before the application is complete. This “rolling review” is 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.

Second, the FDA may designate a product as a breakthrough therapy if it is intended 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. 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 studies in an efficient manner.

Third, the FDA may designate a product for priority review if it treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. A priority designation is intended to direct overall attention and resources to the evaluation of such applications and shortens the FDA’s goal for taking action on a marketing application from ten months to six months from the filing date.

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. A product eligible for accelerated approval may be approved on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.

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 studies to demonstrate a clinical or survival benefit.

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 studies to confirm the effect on the clinical endpoint. Failure to conduct required post‑approval studies, or to confirm a clinical benefit during post‑marketing studies, would allow the FDA to withdraw the product from the market on an expedited basis. All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA.

Post‑approval requirements

Products manufactured or distributed pursuant to FDA approvalsmanufacturing locations are subject to pervasive and continuing regulation by the FDA, including,governing, among other things, requirements relating to recordkeeping, periodic reporting, product samplingmonitoring and distribution, advertising and promotion andrecord-keeping activities, reporting of adverse experiences with the product. After approval, most changesproduct and product problems to the approvedFDA, product sampling and distribution, manufacturing and promotion and advertising. Although physicians may prescribe legally available products for unapproved uses or patient populations (i.e., “off-label uses”), manufacturers may not market or promote such uses. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability. 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 biologic.

relative to exclusive use of the reference biologic. To date,Upon licensure by the FDA, has approved a numberan interchangeable biosimilar may be substituted for the reference product without the intervention of biosimilars and has issued several guidance documents outlining its approach to the review andhealth care provider who prescribed the reference product. Following approval of biosimilars.

the interchangeable biosimilar product, the FDA may not grant interchangeability status for any second biosimilar until one year after the first commercial marketing of the first interchangeable biosimilar product. Congress clarified through FDORA that the FDA may approve multiple first interchangeable biosimilar biological products so long as the products are all approved on the first day on which such a product is approved as interchangeable with the reference product.

Intellectual property

are projected to expire inbetween 2033 and 2035,2037, excluding any additional term for patent term adjustments or patent term extensions; and any patent that may issue from our pending U.S. applications isare projected to expire between 2032 and 2038,2043, in each case, excluding any additional term for patent term adjustments or patent term extensions. In addition, we have exclusively in‑licensed threein-licensed four issued U.S. patents one pending U.S. patent application and one issued European patent for the NaPi2b antibody from Recepta.Recepta, which Recepta licensed from the Ludwig Institute for Cancer Research. These in‑licensedin-licensed issued U.S. and foreignEuropean patents are projected to expire in 2029, excluding any additional term for patent term adjustments or patent term extensions. Recepta still owns one pending Brazilian patent application for the NaPi2b antibody, which is not licensed to us. A patent issuing from this Brazilian patent application is projected to expire in 2029, excluding any additional term for patent term adjustments or patent term extensions. We have also non-exclusively in-licensed from Synaffix certain patents and patent applications for their proprietary site-specific conjugation technology. These in-licensed Synaffix patents and patent applications are eight issued US patents, three pending non-provisional U.S. patent applications, thirteen issued foreign patents, and 14 pending foreign patent applications, in a number of foreign jurisdictions, including, but not limited to, China, Europe, India, Japan, and Netherlands These in-licensed issued U.S. and European patents are projected to expire from 2031 to 2040, excluding any additional term for patent term adjustments or patent term extensions. We have so far not filed for patent protection in all national and regional jurisdictions where such protection may be available. In addition, we may decide to abandon national and regional patent applications before they are granted. Finally, the grant proceeding of each national or regional patent is an independent proceeding which may lead to situations in which applications might in some jurisdictions be refused by the relevant registration authorities, while granted by others. It is also quite common that depending on the country, various scopes of patent protection may be granted on the same product candidate or technology.

Philippines, Singapore, South Africa, Thailand, Taiwan, Tunisia, Ukraine, Uzbekistan and Vietnam. Any U.S. or foreign patent issuing from the pending applications covering XMT‑1522 ADC platform is projected to expire in June 2035, and any U.S. or foreign patent issuing from the pending applications covering the XMT‑1522 ADC platform in combination with checkpoint inhibitors is projected to expire in February 2038, excluding any additional term for patent term adjustments or patent term extensions.

XMT‑1536 ADC

The intellectual property portfolio for ourleading NaPi2b ADC product candidate XMT‑1536, is directed to compositions of matter for our novel ADC based on exclusively in‑licensedin-licensed NaPi2b antibody and our Dolaflexin platform, as well as methods of using and making these novel conjugates.conjugates, methods of administration and companion or complementary diagnostics. As of February 28, 2018,December 31, 2022, we owned threetwo issued U.S. patents, five pending non-provisional U.S. patent applications (including one allowed U.S. patent application), two pending provisional U.S. patent applications), fourapplications, five issued foreign patents, 52 pending foreign patent applications (including two allowed foreign patent applications), in a number of foreign jurisdictions, including, but not limited

factors—Risks related to our intellectual property—Confidentiality agreements with employees and third parties may not prevent unauthorized disclosure of trade secrets and other proprietary information.”

activities. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good.