S-1 1 tm2123577-5_s1.htm S-1 tm2123577-5_s1 - none - 20.9219954s
As filed with the U.S. Securities and Exchange Commission on October 6, 2021.
Registration No. 333-      
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
Nuvectis Pharma, Inc.
(Exact name of Registrant as specified in its charter)
Delaware
2834
86-2405608
(State of incorporation
or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification Number)
1 Bridge Plaza
Suite 275
Fort Lee, NJ, 07024
(201) 614-3150
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Ron Bentsur, M.B.A.
Chairman and Chief Executive Officer
Nuvectis Pharma, Inc.
1 Bridge Plaza
Suite 275
Fort Lee, NJ, 07024
(201) 614-3151
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
Matthew W. Mamak
Alston & Bird LLP
90 Park Avenue
New York, NY 10016
(212) 210-1256
Ivan K. Blumenthal
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
666 3rd Avenue
New York, NY 10017
(212) 935-3000
Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box. ☐
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ☐
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” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
Title Of Each Class Of Securities To Be Registered
Proposed Maximum
Aggregate Offering
Price(1)(2)
Amount of
Registration Fee(3)(4)
Common Stock, par value $0.00001 per share
$ 30,000,000 $ 2,781.00
1)
Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
2)
Includes the aggregate offering price of additional shares that the underwriters have the option to purchase.
3)
Calculated pursuant to Rule 457(o) based on an estimate of the proposed maximum aggregate offering price.
4)
[Previously paid.]
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities in any jurisdiction where the offer or sale is not permitted.
PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION DATED           , 2021
            Shares
Common Stock
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Nuvectis Pharma, Inc.
This is an initial public offering of shares of common stock by Nuvectis Pharma, Inc. We are offering         shares of our common stock to be sold in this offering. The initial public offering price is expected to be between $      and $      per share.
Prior to this offering, there has been no public market for our common stock. We have applied to have our common stock listed on the Nasdaq Global Market under the symbol “NVCT ’’.
We are an “emerging growth company” and a “smaller reporting company” as defined under the U.S. federal securities laws and, as such, have elected to comply with certain reduced reporting requirements.
Investing in our common stock involves a high degree of risk. See “Risk factors” beginning on page 18.
Neither the Securities and Exchange Commission nor any other state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Per share
Total
Initial public offering price
$           $          
Underwriting discounts and commissions(1)
$ $
Proceeds to Nuvectis Pharma, Inc., before expenses
$ $
1)
See “Underwriting” for a description of the compensation payable to the underwriters.
The underwriters may also purchase up to an additional        shares of our common stock at the public offering price, less the underwriting discounts and commissions payable by us, to cover over-allotments, if any, within 30 days from the date of this prospectus. If the underwriters exercise this option in full, the total underwriting discounts and commissions will be $      and our total proceeds, after deducting underwriting discounts and commissions but before expenses, will be $      . The underwriters expect to deliver the shares of common stock to purchasers on or about            , 2021 through the book-entry facilities of The Depository Trust Company.
Investing in our common stock involves a high degree of risk. See “Risk factors” beginning on page 18.
Neither the Securities and Exchange Commission nor any other state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the shares of to purchasers on or about                 , 2021.
ThinkEquity
The date of this prospectus is            , 2021
 

 
Table of Contents
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F-1
We and the underwriters have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we have prepared. We and the underwriters take no responsibility for and can provide no assurance as to the reliability of any other information that others may provide you. We are offering to sell, and seeking offers to buy, shares of common stock only in jurisdictions where offers and sales are permitted. The information contained in this prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or of any sale of the common stock.
For investors outside the United States: Neither we nor the underwriters have done anything that would permit this offering, or the possession or distribution of this prospectus, in any jurisdiction where action for those purposes is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, this offering of common stock and the distribution of this prospectus outside the United States.
Through and including           , 2021 (25 days after the commencement of this offering), all dealers that buy, sell or trade shares of our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.
 
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INDUSTRY AND MARKET DATA
This prospectus includes industry and market data that we obtained from periodic industry publications, third party studies and surveys, filings of public companies in our industry and internal company surveys. These sources generally state that the information they provide has been obtained from sources believed to be reliable, but that the accuracy and completeness of the information are not guaranteed. The forecasts and projections are based on historical market data, and there is no assurance that any of the forecasts or projected amounts will be achieved. Industry and market data could be wrong because of the method by which sources obtained their data and because information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. The market and industry data used in this prospectus involve risks and uncertainties that are subject to change based on various factors, including the COVID-19 pandemic and those discussed in the section titled “Risk Factors.” These and other factors could cause results to differ materially from those expressed in, or implied by, the estimates made by independent parties and by us. Furthermore, we cannot assure you that a third party using different methods to assemble, analyze or compute industry and market data would obtain the same results.
TRADEMARKS AND TRADENAMES
We own various U.S. federal trademarks and/or unregistered trademarks, including our company name, logo and solution names and other trade or service marks. All other trademarks or trade names referred to in this prospectus are the property of their respective owners. Solely for convenience, the trademarks and trade names in this prospectus are referred to without the symbols® and ™, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their right thereto.
ABOUT THIS PROSPECTUS
In this prospectus, unless the context suggests otherwise, references to “Nuvectis Pharma,” “Nuvectis,” the “Company,” “we,” “us” and “our” refer to Nuvectis Pharma, Inc.
This prospectus describes the specific details regarding this offering and the terms and conditions of the common stock being offered hereby and the risks of investing in our common stock. You should read this prospectus, any free writing prospectus and the additional information about us described in the section entitled “Where You Can Find More Information” before making your investment decision.
Neither we, nor any of our officers, directors, agents or representatives or underwriters, make any representation to you about the legality of an investment in our common stock. You should not interpret the contents of this prospectus or any free writing prospectus to be legal, business, investment or tax advice. You should consult with your own advisors for that type of advice and consult with them about the legal, tax, business, financial and other issues that you should consider before investing in our common stock.
 
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Prospectus Summary
This summary highlights information contained in greater detail elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read this entire prospectus, including our financial statements and the related notes thereto included elsewhere in this prospectus. You should also consider, among other things, the information set forth under the sections titled “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in each case appearing elsewhere in this prospectus. Unless the context otherwise requires, we use the terms “Nuvectis,” “Nuvectis Pharma,” the “Company,” “we,” “us,” “our” and similar designations in this prospectus to refer to Nuvectis Pharma, Inc. and, where appropriate, our subsidiaries.
Overview and Our Approach
We are a biopharmaceutical company focused on the development of innovative precision medicines for the treatment of serious unmet medical needs in oncology. We rely on our core competencies of target selection, drug profiling, and clinical and regulatory execution to build a pipeline of anticancer targeted-therapy drugs. Improved genetic sequencing and understanding of cancers’ RNA, DNA and protein abnormalities has led to the discovery and characterization of novel oncogenic genetic mutations and alterations that were previously unknown, unaddressed, unsuccessfully targeted or overlooked. We believe that these advancements represent a fundamental change in the development of targeted therapies and will increasingly lead to tumor agnostic approaches whereby cancers will be characterized for treatment based on genetic signatures, such as a certain mutation, rather than in a tissue-specific manner. We are currently developing two preclinical drug candidates with the lead candidate expected to begin a Phase 1 clinical trial in the fourth quarter of 2021.
With our precision medicine approach, we aim to pharmacologically target novel oncogenic pathways which are key drivers of the disease. As such, we believe that our approach can also enable the use of biomarker-based patient selection, wherein patients are selected for treatment with a drug based on specific attributes of their cancer, such as specific mutations and cellular alterations. Our approach could prospectively identify patients that are more likely to benefit from our targeted therapy, which is a type of treatment that precisely identifies and attacks a specific pathway of cancer cells, thereby potentially increasing the likelihood of a successful treatment outcome. We have extensive experience and expertise in licensing promising product candidates from a wide range of global sources, including universities, academic/research centers and biotechnology companies.
In May 2021, we licensed exclusive worldwide commercial rights to NXP800, an HSF1 pathway inhibitor, our lead product candidate, which was discovered and developed in the drug discovery program at the Institute for Cancer Research (“ICR”) in London, England. The ICR performs pioneering work in discovering new cancer drugs with unique mechanisms of action. The ICR’s drug discovery unit has discovered several successful clinical drug candidates, the most notable of which is Zytiga, a leading drug for metastatic prostate cancer. In August 2021, we licensed worldwide commercial rights to NXP900, a novel SRC/YES1 kinase inhibitor from the University of Edinburgh, Scotland, U.K. (“UoE”). UoE is considered a leader in research designed to discover novel targeted-therapy drug candidates.
Our license agreements for NXP800 and NXP900 are subject to certain milestone and royalty payments. For additional information, see sections “NXP800 License Agreement” and “NXP900 License Agreement,” respectively.
Our drug candidates have not yet been approved by the U.S. Food and Drug Administration (“FDA”), and we may not obtain FDA approval for any of our drug candidates.
 
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Figure 1: Nuvectis Precision Medicine Pipeline
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Our Leadership Team
Nuvectis was founded and is led by a highly qualified management team comprised of industry veterans with extensive drug development experience. Our three co-founders have a proven track record of successful drug development and capability to raise the capital necessary to support the development of product candidates. Collectively, our three co-founders held leadership roles in companies that achieved four U.S. FDA approvals and launches of novel medications in both oncologic and non-oncologic indications, including three New Drug Applications (“NDAs”) and one Biologics License Application (“BLA”), as well as two approvals in the European Union (“EU”), and one approval in Japan (via a Japanese partner). Our co-founders successfully led the approvals and launches of: Auryxia®, which is approved for the treatment of hyperphosphatemia in patients with dialysis-dependent chronic kidney disease (“CKD”) and for the treatment of anemia in patients with non-dialysis-dependent CKD; Jelmyto®, which is approved for the treatment of upper tract urothelial carcinoma; and Elzonris®, which is approved for the treatment of blastic plasmacytoid dendritic cell neoplasm. Notably, significant regulatory achievements of our leadership team also include obtaining two Breakthrough Therapy Designations in oncology and six Orphan Drug (four U.S. and two EU) and two Fast Track Designations.
Ron Bentsur, our co-Founder, Chairman, Chief Executive Officer and President, previously served as Chief Executive Officer of Urogen Pharma, Ltd. (NASDAQ: URGN) and Keryx Biopharmaceuticals, Inc. (acquired by Akebia Therapeutics, Inc. in 2018), where he led these companies to the approval of their marketed products. Mr. Bentsur also served on the Board of Directors at Stemline Therapeutics, Inc. through the FDA approval of its marketed product and the company’s subsequent acquisition by Menarini Pharma in 2020.
We believe that our combination of clinical development, preclinical research expertise, and track record of drug approvals could improve the potential for clinical, regulatory, and commercial success.
See section “Executive Officers and Senior Management” for more information.
Our NXP800 program
NXP800 is an oral small molecule inhibitor of the Heat Shock Factor 1 (“HSF1”) pathway, a signaling pathway that plays an important role in the initiation and progression of many cancers. It was hypothesized that inhibiting the HSF1 pathway would significantly impede the survival of cancer cells. This hypothesis led to the discovery of NXP800 by the ICR.
 
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Our initial target indications for NXP800 — ovarian clear cell carcinoma (“OCCC”) and endometrioid ovarian cancer — are both serious conditions of unmet medical need. A large body of work has verified the importance of HSF1 to tumor genesis and progression in a variety of malignancies, and, in fact, amplification of the HSF1 gene has been observed at a high prevalence in a wide range of cancers. The roles of HSF1 in the regulation of genes that are involved in the control of cell proliferation (the process that results in an increase of the number of cells) and cell-cycle progression (a highly regulated process that is meant to ensure proper division of the cell and proliferation) as well as in the promotion of the survival of transformed cells have been independently described in various scientific publications.
HSF1 is also one of the key guardians of the cellular proteome (the pool of proteins within a cell), and as such, plays an important role in the cellular response to the oncogenic stress imposed on the cancer cell. Oncogenic, cellular and environmental stressors can include genetic perturbations (an alteration of function at the molecular level), oxidative stress (an imbalance of free radicals and antioxidants resulting from increased metabolic rate of the cancer cell), heavy metals and chemotherapy leading to errors in biogenesis (errors in the production of new cellular components), protein damage misfolding, and proteome imbalance (an imbalance in the dynamic regulation of the cell protein content). Cancer cells actively exploit the HSF1 transcription factor in an effort to overcome these diverse stresses and promote biological activities that are crucial to their survival, progression, immune evasion, and metastasis, thus developing a dependency on HSF1 (see Figure 2). This utilization of the HSF1 pathway by cancer cells in order to overcome stress is also referred to as an HSF1 addiction.
Figure 2: HSF1 addiction in cancer
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In preclinical studies, treatment with NXP800 inhibited tumor growth in human xenografts of ovarian cancer, particularly in OCCC and endometrioid ovarian cancer models, cancers that have a high prevalence of mutations in the AT-Rich Interaction Domain (“ARID1a”) gene. ARID1a is frequently mutated in various solid tumors, and these mutations are associated with aberrant cell cycle and loss of cell proliferation control. This helps the tumor cells on one hand, but at the same time reduces these cells’ defensive capacity against stresses that arise from their high metabolic rate and from insults arising from the tumor microenvironment (which is the environment around a tumor, including the surrounding blood vessels, immune cells, fibroblasts, signaling molecules and the extracellular matrix). Cancer cells compensate for this weakness by increased activity of the HSF1 pathway. This suggests a synthetic lethality potential for NXP800 in ARID1a-mutated cancers.
Synthetic Lethality and NXP800
The preclinical data that established the link between ARID1a deficiency and the overactivation of the HSF1 pathway as a compensation mechanism in cancer cells suggest that ARID1a-deficient cancer cells may be susceptible to synthetic lethality when treated with NXP800. Synthetic lethality is a clinically validated approach to treating cancer based on the concept that concomitant perturbations of two genes or pathways (a synthetic lethality pair), each of which is nonlethal to the cancer cell on its own, result in cell death. Hence, cancer cells that contain a mutation in one gene of a synthetic lethality pair are susceptible to specific targeting by a drug, or pharmacologic targeting, of the other gene of the pair. In cases where there is an
 
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existing mutation in a certain gene, various therapies aim at identifying a lethal pair target, ranging from oncogenes to tumor suppressors. This can result in synthetic lethality and potentially broaden the armamentarium of anti-cancer treatments. The first example of a treatment that exploits synthetic lethality is a poly adenosine diphosphate-ribose polymerase (“PARP”) inhibitors, which were first approved in 2016. PARP inhibitors are active against cancer cells only when these cells harbor mutations in their BRCA1 and BRCA2 genes. These two genes are tumor suppressor genes. When functioning properly, they help keep breast, ovarian, and other types of cells from growing and dividing too rapidly or in an uncontrolled way. When these genes are mutated, the cell may become cancerous.
In the human xenografts that harbored ARID1a mutations, NXP800 impacted the expression of several genes including downregulation (the reduction at the cellular level of the magnitude or rate of a physiological response or a biochemical process, such as the expression of a gene) of known HSF1 target genes, such as the pro-survival factor HSPB1 (a factor that promotes the survival of a cell) indicating a direct effect on the HSF1 pathway. In addition, NXP800 upregulated the expression of Glutathione-specific gamma-glutamylcyclotransferase 1 (“CHAC1”), whose unique function is the degradation of glutathione (“GSH”), a key metabolite in cell protection from stress, thus reducing the intracellular GSH levels. Consequently, by inhibiting the HSF1 pathway in ARID1a-mutated cancer cells, treatment with NXP800 resulted in a synthetic lethality effect (see Figure 3).
Further preclinical work is currently ongoing at the ICR to investigate the utility of ARID1a mutation as a potential patient selection marker in additional tumor types. This work could support our use of a tumor agnostic development strategy wherein we enroll patients based on the cancer’s genetic and molecular features without regard to the type or location of the cancer.
Figure 3. NXP800 Driven Synthetic Lethality
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Source: Nuvectis Pharma
As ARID1a mutations and gene silencing (a reduction or elimination of the production of a protein from its corresponding gene) occur in roughly two thirds of all OCCC patients, approximately 40% of all
 
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endometrioid ovarian cancer patients, as well as in various other types of cancers, we believe that NXP800’s mechanism of action is well suited as a synthetic lethality strategy. The genetic screening for the ARID1a mutation is a standard part of the commercially available screening panels utilized in the clinic for cancer patients.
A comprehensive preclinical data package comprised of pharmacology, pharmacokinetics and safety studies intended to support a submission of a clinical trial application (“CTA”) to the Medicines and Healthcare products Regulatory Agency (“MHRA”) in the U.K. has been completed, and we believe that this package is sufficient for this purpose. The CTA submission with the MHRA is planned for the fourth quarter of 2021, and we expect to initiate our Phase 1 dose-escalation study in the U.K. also in the fourth quarter of 2021, immediately following the acceptance of the CTA by the MHRA. However, this timeline may be delayed as a result of the MHRA review given that we have not yet submitted the CTA. Additionally, our submission of an Investigational New Drug (“IND”) Application to the U.S. Food and Drug Administration (“FDA”) is planned in the first half of 2022. This will be done in order to expand the study to also include clinical sites in the U.S. In preclinical and pharmacology studies, no meaningful off-target effects were observed when screened against a broad panel of kinases, bromodomains, GPCRs, orphan receptors, and nuclear hormone receptors. We plan to initiate a Phase 1 dose escalation trial for NXP800 in patients with advanced-stage solid tumors in the fourth quarter of 2021, followed by a clinical trial evaluating cohorts of patients with ARID1a-mutated OCCC and advanced-stage endometrioid ovarian cancer, and possibly cohorts of patients with additional types of solid tumors. Additional preclinical studies are planned at the ICR and other third-party vendors to assess the preclinical safety and efficacy of NXP800 in additional solid tumor types.
Addressing an Unmet Need in Clear Cell Ovarian Cancer and Advanced-stage Endometrioid Ovarian Carcinoma
We plan to initially investigate NXP800 as a treatment for OCCC and endometrioid ovarian carcinoma. NXP800 is precisely targeted for women with these diseases who have either the ARID1a mutation or ARID1a epigenetic loss.
OCCC is highly malignant, difficult to treat, and has a very poor survival rate due to frequent recurrence after surgery and first-line treatment. First-line treatment consists of platinum-based chemotherapy (“PBC”), for which the response rate in relapse/refractory platinum resistant patients is 1%, demonstrating a clear and dire need for a new treatment option for OCCC. OCCC represents approximately 10% of all ovarian cancer cases in the United States, with an annual incidence of approximately 2,200 patients.
Endometrioid ovarian cancer represents approximately 10% of all diagnosed ovarian cancer cases. If diagnosed at an early-stage, endometrioid ovarian tumors can typically be resected. However, if diagnosed at later stages, these tumors have a substantially worse prognosis. Advanced, platinum-resistant, endometrioid cancer in the United States represents approximately 30% of the endometrioid ovarian cancer segment. There are currently no FDA approved drugs for the treatment of advanced endometrioid ovarian cancer.
OCCC and endometrioid ovarian carcinoma are subtypes of epithelial ovarian carcinoma whose clinical characteristics are distinct from those of high-grade serious ovarian carcinoma. They exhibit a unique biological profile that is markedly different from those of other histologic types. The incidence of OCCC among ovarian cancer patients is higher in East Asia (approximately 25%), including Japan, than in Europe and the United States (approximately 10%) (see Table 1 below).
OCCC has highly malignant characteristics, reflected in its resistance and poor response to conventional chemotherapy. Endometrioid and clear cell variants are postulated to arise from the same cell type. Notwithstanding the initial PBC response in the endometrioid ovarian subset, the progression-free survival at three years for patients diagnosed with stage III/IV is a dismal 20% for stage III and 0% for stage IV. The dismal response to first line PBC in OCCC represents a clear unmet cancer treatment need.
 
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Table 1: Estimated Annual Incidence of ARID1a Mutated Patients in OCCC and Endometrioid Ovarian Carcinoma in Major Markets
Indication/Major market
Estimated Annual
Incidence
Patients with ARID1a
mutation or protein loss
OCCC/US
2,175 1,410
Endometrioid Ovarian Carcinoma/US
2,175 909
OCCC/EU
3,408 2,210
Endometrioid Ovarian Carcinoma/EU
3,408 1,425
OCCC/Japan
2,500 1,625
Endometrioid Ovarian Carcinoma/Japan
1,000 375
Source: Nuvectis Pharma
We believe that we can become the first company with an approved drug for advanced-stage OCCC and advanced-stage endometrioid ovarian carcinoma. Our plan is to commence a Phase 1 clinical trial of NXP800 in the fourth quarter of 2021.
Market Potential in Additional Solid Tumor Types
Beyond our initial target indications, we believe that NXP800 has the potential to demonstrate anti-tumor activity in several additional tumor types, such as gastric, hepatocellular, esophageal, urothelial carcinoma and others. Additional in vivo preclinical studies are planned at the ICR to investigate the use of ARID1a mutation as a potential patient selection marker in additional tumor types. This work could support our use of a tumor-agnostic development strategy wherein we enroll patients based on the cancer’s genetic and molecular features without regard to the type or location of the cancer. Regulatory approval by the FDA will be required for any of these potential additional indications prior to U.S. commercialization. While we expect that the current oral dosage form of NXP800 will also be used for these additional potential indications, different dosage strengths, dosing schedules and other drug administration characteristics may be required.
NXP800 Intellectual property
We licensed one patent family covering the composition of matter for NXP800, which includes two issued U.S. patents covering the composition of matter for NXP800, as well as methods of using and making NXP800. Composition of matter patents in this family have also been issued in other major markets, including Australia, Brazil, China, India, Israel, Mexico, Russia, Singapore, Japan and the E.U. The statutory expiration for patents in this family is October 2034, without taking into account any possible patent term extension, where applicable. We licensed a patent family directed to additional compounds structurally distinct from NXP800, that modulate HSF1. This patent family is granted in the U.S. and has a statutory expiration of April 2036. We have also licensed a patent family pending in the U.S. and Europe directed to deuterated compounds that modulate HSF1. Any patent that grants from this family would have a statutory expiration of October 2037.
Our NXP900 program
In August 2021, we licensed exclusive worldwide commercial rights to NXP900 and its derivatives from the UoE. NXP900 is a novel, oral small molecule designed to preferentially inhibit the SRC and YES1 kinases. NXP900 is in preclinical development with IND-enabling studies expected to begin in 4Q 2021. NXP900 inhibited the activity of SRC and YES1 kinases at concentrations < 0.5 nM and with its unique mechanism of action, we believe that NXP900 could be successful in treating solid tumors in which the activation of SRC and YES1 is implicated.
SRC target validation
SRC is aberrantly activated in many cancer types, including solid tumor cancers such as breast, colon, prostate, pancreatic and ovarian cancers, while remaining predominantly inactive in non-cancerous cells.
 
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Increased SRC activity is generally associated with late-stage cancers, metastatic potential and resistance to therapies, and correlates with poor clinical prognosis. Signaling pathways activated by SRC include proliferation, cell growth, cell migration and metastasis and angiogenesis (See Figure 4).
Figure 4: Key oncogenic pathways activated by SRC kinase
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Legend: Signaling pathways activated by SRC include proliferation, cell growth, cytoskeleton (cell migration and metastasis), and angiogenesis mediated by Phosphatidylinositide 3 Kinase (PI3K), Mitogen-Activated Protein Kinase (MAPK), Signal Transducer and Activator of Transcription 3 (Stat3), Interleukin (IL) 8, and Vascular Endothelial Growth Factor (VEGF)
Multikinase inhibitors that, among other kinases also inhibit SRC have been developed, and two of them, dasatinib and bosutinib, are approved for the treatment of chronic myelogenous leukemia and acute lymphoblastic leukemia, both hematologic (liquid) tumors. However, these drugs have thus far failed to demonstrate meaningful activity in solid tumors, believed to result from their immunosuppressive activity and their inability to completely inhibit the SRC pathway, as explained below. Consequently, while SRC is implicated in many solid tumor types, the existing SRC inhibitors are unable to favorably affect disease progression in solid tumors.
NXP900’s unique mechanism of action
Unlike the approved and clinical-stage SRC kinase inhibitors that inhibit only the catalytic function of SRC, NXP900 locks SRC in its native inactive conformation (see Figure 5), by inhibiting both the catalytic and the scaffolding functions, thereby disabling the SRC pathway by preventing both phosphorylation and complex formation of SRC with its primary partners, including PI3K and FAK (Focal Adhesion Kinase). Furthermore, unlike the approved and clinical-stage SRC inhibitors, NXP900 does not inhibit ABL, avoiding its related immunosuppressive effect. In vivo, treatment with NXP900 showed anti-tumor activity in both syngeneic murine cancer models and xenografts, and therefore we believe that NXP900 has the potential to become a treatment for SRC-associated solid tumors.
 
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Figure 5: NXP900 inhibits both the catalytic activity and scaffolding of the SRC kinase and locks SRC in its inactive state
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Legend: Complete activation of the SRC pathway requires both catalytic activity and scaffolding of its signal transduction partners in its active conformation (middle image). NXP900 locks SRC in its inactive conformation (left image) by inhibiting both the catalytic activity of SRC and its ability to bind to its signal transduction partners. Other SRC inhibitors, including dasatinib, only inhibit the catalytic activity of SRC while locking it in its active conformation (right image) thereby only partially inhibiting the SRC pathway.
Potential clinical significance of the YES1 target
Amplification of the YES1 gene has been reported in several tumors including lung, head and neck, bladder and esophageal cancers. Furthermore, it has been reported that YES1 gene amplification is a key mechanism of resistance to EGFR or HER2 inhibitors. YES1-dependent oncogenic transformation has also been reported, suggesting that YES1 plays a key role in these solid tumors. There are no FDA approved selective YES1 inhibitors.
Potential use of NXP900 in Medulloblastoma
Medulloblastoma is a rare brain cancer (annual incidence of approximately 500 in the U.S.) that affects mostly pediatric patients. Although rare, medulloblastoma is the most common pediatric brain tumor, with the majority of the incidence among children occurring before the age of five. Unfortunately, this disease spreads early and as many as 40% of patients have metastatic disease at time of diagnosis, resulting in a poor prognosis. Medulloblastoma represents a serious unmet medical need with no approved therapies.
Out of the four identified subtypes of Medulloblastomas, Group 4 is the most prevalent biological subtype, comprising approximately 40% of all medulloblastoma patients. Recent studies have identified aberrant ERBB4-SRC signaling pathway as the hallmark of Group 4 patients, suggesting the SRC kinase as a potential therapeutic target in this group.
In preclinical studies in mice, NXP900 demonstrated its ability to cross the blood-brain barrier, and, importantly, NXP900 remained in the brain over time at average concentrations exceeding the levels required to inhibit SRC in vitro. These data support further exploration of NXP900 in the treatment of Group 4 medulloblastoma.
NXP900 development goals
We plan to commence IND-(or equivalent) enabling studies for NXP900 in the fourth quarter of 2021. This work is intended to enable the start of clinical studies. Our initial target indications may include those
 
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cancers in which SRC and YES1 are implicated, including breast, colon, prostate, pancreatic, ovarian, lung, head and neck, bladder, esophageal cancers and medulloblastoma. Preclinical studies evaluating the potential use of biomarkers for the SRC pathway components and YES1 gene amplification are ongoing. We plan to conduct additional in vivo testing of NXP900 in medulloblastoma to better understand the potential therapeutic effect of NXP900 in this indication.
Although we have not, and may never, obtain regulatory approvals for our product candidates, we believe that we can become the first company with an approved SRC/YES1 kinase inhibitor for the treatment of solid tumors.
NXP900 Intellectual property
We licensed one patent family covering the composition of matter for NXP900, which has been granted in the U.S., EU, Japan, China, and is pending in the United Kingdom and Canada. The statutory expiration for patents in this patent family is April 2036, without taking into account any possible patent term extension, where applicable. We have also licensed a patent family directed to a metabolite of NXP900, filed as a priority application August 2021. Any patent that grants from this family would have a statutory expiration of August 2042.
Our Strategy
Our strategy is to build a global biopharmaceutical company through the identification, development, and commercialization of therapeutics to address unmet medical needs in oncology with an initial focus on patients with OCCC and endometrioid ovarian cancers. We intend to leverage our core competencies of target selection, drug profiling and clinical and regulatory execution to build a pipeline of product candidates targeting cancers driven by genetic alterations. The key elements driving our business strategy include:

establishing a leadership position in targeted oncology therapeutics, utilizing the synthetic lethality approach by inhibiting the HSF1 pathway in ARID1a-mutated cancers and/or protein deficiency as a biomarker;

advancing our lead product candidate, NXP800, through clinical development towards regulatory decision-making in OCCC and endometrioid ovarian cancer;

maximizing the therapeutic potential for NXP800 by leveraging preclinical data in additional ARID1a-mutated tumor types, as a monotherapy and possibly in combination with other approved therapies;

positioning NXP900 as a differentiated SRC kinase inhibitor with improved activity against solid tumors compared to the existing SRC kinase inhibitors;

maximizing the therapeutic potential of NXP900 by generating additional in vivo preclinical data to highlight the benefits of inhibiting YES1 on antitumor activity;

deploying our proven clinical, regulatory and business development/licensing expertise to further expand our targeted oncology pipeline for patients with unmet medical needs; and

evaluating opportunities to accelerate development timelines and enhancing the commercial potential of our products in collaboration with third parties, including potential ex-U.S. collaboration opportunities.
Risk Factors
An investment in our common stock is subject to broad range of risks and should only be made after a careful consideration of such risks. For a discussion of some of the risks you should consider before purchasing our common stock, you are urged to carefully review and consider the section entitled “Risk Factors.”
 
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Risk Factor Summary
Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, financial condition, results of operations, cash flows and prospects that you should consider before making a decision to invest in our common stock. These risks are discussed more fully in the section titled “Risk factors” beginning on page 18, of this prospectus, and include the following:

We have a limited operating history, have not initiated or completed any clinical trials to date, have no products approved for commercial sale and have not generated any revenue, which may make it difficult for investors to evaluate our current business and likelihood of success and viability.

We have incurred losses since our inception and have not generated any revenue. We expect to incur continued losses for the foreseeable future and may never achieve or maintain profitability.

Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve several objectives relating to the discovery or identification, development, regulatory approval and commercialization of our current or future product candidates.

Even if this offering is successful, we will require substantial additional capital to finance our operations and achieve our goals. If we are unable to raise capital when needed or on terms acceptable to us, we may be forced to delay, reduce or eliminate our research or product development programs, any future commercialization efforts or other operations.

We are substantially dependent on the success of our lead product candidate, NXP800, for which we have not yet commenced a clinical trial.

Clinical trials are very expensive, time consuming and difficult to design and implement, and involve uncertain outcomes. Furthermore, results of earlier preclinical studies and clinical trials may not be predictive of results of future preclinical studies or clinical trials. Our current or future product candidates may not have favorable results in later clinical trials, if any, or receive regulatory approval.

If we fail to demonstrate safety and efficacy to our stakeholders, we may need to terminate development programs, our reputation may be harmed, and our business will suffer.

The COVID-19 pandemic could adversely impact our business, including our clinical trials and clinical trial operations.

The development and commercialization of pharmaceutical products are subject to extensive regulation, and we may not obtain regulatory approvals for NXP800, NXP900, or any future product candidate, on a timely basis or at all.

The manufacture of any of our current or future product candidates is complex. Our third-party manufacturers may encounter difficulties or interruptions in production, which could delay or entirely halt their ability to supply any of our current or future product candidates for clinical trials or, if approved, for commercial sale.

Our future success depends on our ability to retain our executive officers and key employees and to attract, retain and motivate qualified personnel and manage our human capital.

We currently have 3 full-time employees and we will need to grow the size and capabilities of our organization, and we may experience difficulties in managing this growth.

If we are unable to obtain and maintain patent protection or other necessary rights for our products and technology, or if the scope of the patent protection obtained is not sufficiently broad or our rights under licensed patents is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to successfully commercialize our products and technology may be adversely affected.
Corporate Information
We were incorporated in July 2020 under the laws of the State of Delaware under the name Centry Pharma, Inc., and changed our name to Nuvectis Pharma, Inc. in July 2021. Our principal executive offices are
 
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located at 1 Bridge Plaza, 2nd Floor, Fort Lee, NJ 07024, and our telephone number is (201) 614-3150. Our website address is www.nuvectis.com. The information contained in or accessible from our website is not incorporated into this prospectus, and you should not consider it part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
Implications of being an emerging growth company and a smaller reporting company
We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended. As an emerging growth company, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies. These provisions include:

being permitted to only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this prospectus;

reduced disclosure about our executive compensation arrangements; and

not being required to hold advisory votes on executive compensation or to obtain stockholder approval of any golden parachute arrangements not previously approved; and an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting.
We may take advantage of these exemptions for up to five years or such earlier time that we are no longer an emerging growth company.
We would cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more; (ii) the last day of our fiscal year following the fifth anniversary of the date of the completion of this offering; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission (“SEC”). We may choose to take advantage of some but not all of these exemptions. We have taken advantage of reduced reporting requirements in this prospectus. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold stock.
We have elected not to “opt out” of the exemption for the delayed adoption of certain accounting standards and, therefore, we will adopt new or revised accounting standards at the time private companies adopt the new or revised accounting standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.
We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
 
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The Offering
Shares of common stock offered by us
     shares
Shares of our common stock to be outstanding after this
offering
     shares (or        shares if the underwriters exercise their option to purchase additional shares in full).
Underwriters’ option to purchase additional shares
We have granted the underwriters an option for a period of 30 days to purchase up to               additional shares of common stock.
Use of proceeds
We estimate that the net proceeds to us from this offering will be approximately $      million, or approximately $      million if the underwriters exercise their option to purchase additional shares in full, assuming an initial public offering price of $      per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
We estimate that the net proceeds to us from the sale of shares of our common stock in this offering will be approximately $    million, or $     million if the underwriters exercise their option to purchase additional shares in full, assuming an initial public offering price of $     per share, the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds of this offering to fund the Phase 1/2 development of NXP800, to continue development and sponsored research related to our current product candidates or any future product candidate, hiring of additional personnel, capital expenditures, costs of operating as a public company and other general corporate purposes. See “Use of Proceeds.”
Proposed Nasdaq Global Market symbol
“NVCT”
Risk factors
Investment in our common stock involves substantial risks. You should read this prospectus carefully, including the section entitled “Risk Factors” and the financial statements and the related notes to those statements included in this prospectus, before investing in our common stock.
The number of shares of our common stock outstanding after this offering is based on 244,046 shares of our common stock outstanding as of October 6, 2021, after giving effect to the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 128,520 shares of common stock upon the completion of this offering, and excludes:

5,810 shares of common stock issuable upon exercise of options outstanding under our Global Equity Incentive Plan as amended and restated (the “Plan”), at an exercise price of $119.05 per share as of October 6, 2021;

2,587 shares of common stock issuable upon the exercise of warrants under the Plan to purchase common stock at an exercise price of $119.05 per share as of October 6, 2021;

4,963 shares of restricted stock granted to the Company’s three founders on July 27, 2021;
 
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400 shares of restricted stock issued under the Plan on September 1, 2021; and

1,677 shares of common stock reserved for future issuance under the Plan.
Except as otherwise noted, all information in this prospectus:

assumes no exercise of the underwriters’ option to purchase up to additional shares of common stock in this offering;

assumes no exercise of the outstanding options and warrants described above;

gives effect to the automatic conversion upon the completion of this offering of all of our outstanding shares of preferred stock into an aggregate of shares of common stock; and

assumes the filing of our amended and restated certificate of incorporation and the effectiveness of our amended and restated bylaws, which will occur upon the closing of this offering.
 
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Summary Financial Data
The following tables set forth a summary of our financial data for the periods and as of the dates indicated. The summary statement of operations data for the period from July 27, 2020 (inception) through December 31, 2020 are derived from our audited financial statements and related notes included elsewhere in this prospectus. We did not have any significant operation through March 31, 2021. For interim periods, we have derived our selected statement of operations data for the six months ended June 30, 2021 and the selected balance sheet data as of June 30, 2021 from our unaudited condensed financial statements and related notes included elsewhere in this prospectus. Our historical results are not necessarily indicative of our future results for any period. You should read this data together with our audited financial statements, condensed unaudited financial statements, and related notes appearing elsewhere in this prospectus and the information under the captions “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The summary financial data included in this section is not intended to replace the financial statements and related notes included elsewhere in this prospectus.
The following table summarizes the relevant financial data for our business and should be read with our financial statements, which are included in this prospectus.
Statement of Operations
(in thousands, except per share and share amounts)
For the period of
six months ended
as of June 30, 2021
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT
4,245
GENERAL AND ADMINISTRATIVE
1,716
5,961
NET LOSS
5,961
BASIC AND DILUTED NET LOSS PER COMMON SHARE OUTSTANDING.
57.73
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING*
103,260
*
Adjusted to reflect stock split which was approved by the Company’s Board of Directors in May 2021.
Balance Sheet Data
As of 30 June 2021
(in thousands)
Actual
December 31, 2020
Actual
June 30, 2021
Pro Forma
June 30, 2021
(Note 1)
Pro Forma
as adjusted
June 30, 2021
(Note 2)
Cash and cash equivalents
7,214 11,234
Working capital
(10) 6,825 10,845
Total assets
7,214 11,234
Accounts payable
10 389 389
Total liabilities
10 389 389
 
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As of 30 June 2021
(in thousands)
Actual
December 31, 2020
Actual
June 30, 2021
Pro Forma
June 30, 2021
(Note 1)
Pro Forma
as adjusted
June 30, 2021
(Note 2)
Redeemable convertible preferred shares
11,225
Common Stock
* * 2
Additional paid-in capital
1,571 16,814
Accumulated deficit
(10) (5,971) (5,971)
Total stockholders’ equity
(10) (4,400) 10,845
Total liabilities and redeemable convertible preferred shares , net of stockholders’ equity (deficit)
7,214 11,234
Note 1: The pro forma balance sheet data gives effect to the Preferred stock investment agreement closed in July 2021, in the amount of approximately $4 million and gives effect to the conversion of our Preferred Stock into 128,520 shares of common stock immediately prior to the closing of this offering
Note 2: The pro forma as adjusted balance sheet data gives further effect to the issuance of shares of our common stock in this offering.
In June and July 2021, we entered into an investment agreement with our founders, directors and certain new investors to issue 128,520 preferred A shares (“Preferred Stock”) in a total amount of approximately $15.3 million, of which $1.73 million was invested by related parties on the same terms as all investors in the Preferred Stock. As of the issuance date of this prospectus, we received the total amount of the investments. Of the $15.3 million raised, $11.3 was raised in June 2021 and $4.0 million was raised in July 2021.
 
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Special Note Regarding Forward-looking Statements
This prospectus contains forward-looking statements within the meaning of the federal securities laws, which statements are subject to substantial risks and uncertainties and are based on estimates and assumptions. All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations or financial condition, business strategy and plans, financial needs, and objectives of management for future operations are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “would,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. These forward-looking statements include, among others, statements relating to our future financial performance, our business prospects and strategy, our market opportunity and the potential growth of that market, our anticipated financial position, our liquidity and capital needs and other similar matters. These forward-looking statements are based on management’s current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
Our actual results may differ materially from those expressed in, or implied by, the forward-looking statements included in this prospectus as a result of various factors, including, among others:
our company as an early-stage company with a history of losses, which expects to incur significant expenses and continuing losses for the foreseeable future;
the impact of health epidemics, including the COVID-19 pandemic, on our business and the actions we may take in response thereto;

developments and projections relating to our competitors and industry;

increases in costs, disruption of supply or shortage of raw materials, which could harm our business;

our expectations about how market trends will affect our business;

our and our licensors’ ability to obtain, establish, maintain, protect and enforce intellectual property and proprietary protection for our products and technologies and to avoid claims of infringement, misappropriation or other violation of third-party intellectual property and proprietary rights;

our ability to hire and retain key management, scientific and engineering personnel and to manage our future growth effectively;

our ability to obtain additional financing in this or future offerings;

the volatility of the trading price of our common stock;

evolving regulations and the potential for unfavorable changes to, or failure by us to comply with, regulations, which could substantially harm our business and operating results;

our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act; and

our expectations regarding use of proceeds from this offering.
We have based the forward-looking statements contained in this prospectus primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described in the section captioned “Risk Factors” and elsewhere in this prospectus. These risks are not exhaustive. Other sections of this prospectus include additional factors that could adversely impact our business and financial performance. Furthermore, new risks and uncertainties emerge from time to time
 
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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 prospectus. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. You should, however, review the factors and risks and other information we describe in the reports we will file from time to time with the SEC after the date of this prospectus. See “Where You Can Find More Information.”
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.
You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement of which this prospectus forms a part with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
The forward-looking statements made in this prospectus relate only to events as of the date on which such statements are made. We undertake no obligation to update any forward-looking statements after the date of this prospectus or to conform such statements to actual results or revised expectations, except as required by law.
 
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Risk Factors
Investing in our common stock involves a high degree of risk. You should consider carefully the risks and uncertainties described below, together with all of the other information in this prospectus, including the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes, before making a decision to invest in our common stock. Our business, results of operations, financial condition and prospects could also be harmed by risks and uncertainties that are not presently known to us or that we currently believe are not material. If any of the risks actually occur, our business, platform, reputation, brand, results of operations, financial condition and prospects could be materially and adversely affected. In such event, the market price of our common stock could decline, and you could lose all or part of your investment.
Risks Related to our Financial Condition and Capital Requirements
Our limited operating history may make it difficult for you to evaluate the success of our business to date and to assess our future viability.
We are a preclinical stage biopharmaceutical company with a limited operating history. We were incorporated in Delaware in July 2020 and commenced operations in May 2021. Our operations to date have been limited to organizing and staffing our company, business planning, raising capital, identifying, investigating, licensing and evaluating potential product candidates, and establishing arrangements with third parties for the manufacture of initial quantities of our lead product candidate and component materials. Our lead product candidate is still in preclinical development. We have not yet demonstrated our ability to successfully initiate, conduct or complete any clinical trials, obtain marketing approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, or conduct sales, marketing and distribution activities necessary for successful product commercialization. Consequently, any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history.
We will need to transition at some point from a company with a research and development focus to a company capable of supporting commercial activities related to the full product life cycle. We may not be successful in such a transition.
We have incurred losses since inception and anticipate that we will continue to incur losses for the foreseeable future. We may never achieve or maintain profitability.
Investment in biopharmaceutical product development is a highly speculative undertaking and entails substantial upfront capital expenditures and significant risk that our current or potential future product candidates will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval and become commercially viable. We are still in the early stages of development of our product candidates and have not yet initiated our first clinical trial. We have no products approved for commercial sale and have not generated any revenue from product sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. We have financed our operations primarily through a private placement of our preferred stock. In addition, as a business with a limited operating history, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors, such as the COVID-19 pandemic.
We have incurred losses in each period since we commenced operations. Since inception through the end of the first quarter of 2021, we had an accumulated deficit of $33,000. In June 2021, in connection with the exclusive licensing agreement related to our lead product candidate, NXP800, we paid an upfront payment of $3.5 million. In September 2021, in connection with the exclusive licensing agreement related to NXP900, we also paid an upfront payment of $3.5 million. We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase substantially if and as we continue our research and development efforts and submit IND applications for our lead product candidate; conduct preclinical studies and clinical trials for our current and future product candidates; seek marketing approvals for any current or future product candidate that successfully completes clinical trials; experience any delays or
 
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Risk Factors
encounter any issues with any of the above; establish a sales, marketing and distribution infrastructure and scale-up manufacturing capabilities to commercialize any current or future product candidates for which we may obtain regulatory approval; obtain, expand, maintain, enforce and protect our intellectual property portfolio; hire additional clinical, regulatory and scientific personnel; and operate as a public company.
Our product candidates, NXP800 and NXP900, are in the preclinical stage of development and will require additional preclinical studies, clinical development, regulatory review and approval, substantial investment, access to sufficient clinical and commercial manufacturing capacity and significant marketing efforts before we can generate any revenue from product sales. NXP800 and NXP900 have yet to enter clinical trials. To date, we have not generated any revenue from our product candidates. Our ability to generate revenue will depend on a number of factors, including, but not limited to:

the timely completion of our preclinical studies and clinical trials, which may be significantly slower or more costly than anticipated and will depend upon the performance of third-party contractors;

successful submissions of INDs and applications to the FDA and a CTA to the MHRA and any additional comparable applications;

completion of IND enabling studies necessary for the IND or comparable submission, as appropriate;

whether we are required by the FDA or similar foreign regulatory authorities to conduct additional clinical trials or other studies to support the approval and commercialization of our current or future product candidates;

the FDA’s and similar foreign regulatory authorities’ acceptance of the safety, potency, purity, efficacy and risk to benefit profile of our current or future product candidates;

the prevalence, duration and severity of potential side effects or other safety issues experienced with our current or future product candidates, if any;

the timely receipt of necessary marketing approvals from the FDA and similar foreign regulatory authorities;

the actual and perceived availability, cost, risk profile and safety and efficacy of our current or future product candidates, if approved, relative to existing and future alternative cancer therapies and competitive product candidates and technologies;

our ability and the ability of third parties with whom we contract to manufacture adequate clinical and commercial supplies of our current or future product candidates, to remain in good standing with regulatory authorities and to develop, validate and maintain commercially viable manufacturing processes that are compliant with current good manufacturing practices (“cGMP”);

our ability to successfully develop a commercial strategy and to commercialize any current or future product candidate in the United States and internationally, if approved for marketing, reimbursement, sale and distribution in such countries and territories, whether alone or in collaboration with others;

patient demand for our current or future product candidates, if approved; and

our ability to establish and enforce intellectual property rights in and to our current or future product candidates.
Many of the factors listed above are beyond our control and could cause us to experience significant delays or prevent us from obtaining regulatory approvals or commercializing our current and future product candidates. Even if we can commercialize any current or future product candidates, we may not achieve profitability soon after generating product sales, if ever.
Even if this offering is successful, we will require substantial additional funding. If we are unable to raise capital as needed, we may be compelled to delay, reduce or eliminate our product development programs or commercialization efforts.
We expect our expenses to increase in parallel with our ongoing activities, particularly as we continue our discovery and preclinical development activities to identify new product candidates and initiate clinical trials
 
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Risk Factors
of, and seek marketing approval for, any of our current or future product candidates. In addition, if we obtain marketing approval for any of our current or future product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing, and distribution. Furthermore, upon the closing of this offering, we expect to incur significant additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. We cannot be certain that additional funding will be available on acceptable terms, or at all. Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of public or private equity offerings, debt financings, governmental funding, collaborations, strategic partnerships and alliances or marketing, distribution or licensing arrangements with third parties. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our discovery and preclinical development programs or any future commercialization efforts.
Major public health issues, and specifically the pandemic caused by the coronavirus COVID-19 outbreak, could have an adverse effect on our clinical trials, and as a result, have an adverse impact on our financial condition and results of operations and other aspects of our business.
In December 2019, a novel strain of coronavirus which causes a disease referred to as COVID-19, was first detected in Wuhan, China, and has since spread worldwide. On March 11, 2020, the World Health Organization declared that the rapidly spreading COVID-19 outbreak had evolved into a pandemic. In response to the pandemic, and despite mass immunization efforts in many countries around the world, many governments are still implementing a variety of control measures to reduce the spread of COVID-19, including travel restrictions and bans, instructions to residents to practice social distancing, quarantine advisories, shelter-in-place orders and required closures of non-essential businesses.
The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, and created significant volatility and disruption of financial markets. The extent to which the COVID-19 pandemic impacts our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning the virus and the actions to contain it or treat its impact, among others. Some factors from the COVID-19 outbreak or any outbreak caused by any variant of COVID-19 that may delay or otherwise adversely affect our clinical trial programs, as well as adversely impact our business generally, include:

delays or difficulties in clinical site initiation, including difficulties in recruiting clinical sites, and delays enrolling patients in our clinical trials or increased rates of patients withdrawing from our clinical trials following enrollment as a result of contracting COVID-19, being forced to quarantine, or not otherwise being able to complete study assessments, particularly for older patients or others with a higher risk of contracting COVID-19;

diversion of healthcare resources, including clinical trial investigators and staff, away from the conduct of clinical trials to focus on pandemic concerns which could result in delays to our partner companies’ clinical trials;

limitations on travel, including limitations on domestic and international travel, and government-imposed quarantines or restrictions imposed by key third parties that could interrupt key trial activities, such as clinical trial site initiations and monitoring;

interruption of, or delays in receiving, supplies of our product candidates from our contract manufacturing organizations due to staffing shortages, or production slowdowns or stoppages;

disruptions and delays caused by potential workplace, laboratory and office closures and an increased reliance on employees working from home across the healthcare system; and

disruptions in or delays to regulatory approvals, inspections, reviews or other regulatory activities as a result of the spread of COVID-19 affecting the operations of the FDA or other regulatory authorities.
 
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Risk Factors
We currently rely on third parties for certain functions or services in support of our clinical trials and key areas of our operations. If these third parties themselves are adversely impacted by restrictions resulting from the COVID-19 outbreak, we will likely experience delays and/or realize additional costs. As a result, our ability to commence and complete clinical trials in timely fashion, obtain regulatory approvals for, and to commercialize, our current and future product candidates may be delayed or disrupted.
Risks Related to the Development of our Product Candidates
Our discovery and preclinical development approach focuses on the development of precision medicines for patients with genetically defined cancers and may never lead to marketable products.
The patient populations for our product candidates and potential future product candidates are limited to those with specific target mutations and may not be completely defined but are substantially smaller than the general treated cancer population and we will need to screen and identify these patients with the targeted mutations. Successful identification of patients is dependent on several factors, including achieving certainty as to how specific genetic alterations respond to our current product candidates or any future product candidate and, if necessary, developing companion diagnostics to identify such genetic alterations. Furthermore, even if we are successful in identifying patients, we cannot be certain that the resulting patient populations for each mutation will be large enough to allow us to successfully obtain approval for each mutation type and commercialize our products and achieve profitability. In addition, even if our approach is successful in showing clinical benefit by downregulating the HSF1 pathway in tumors harboring an ARID1A mutation or alteration, we may never successfully identify additional oncogenic mutations for other genes. We do not know if our approach of treating patients with genetically defined cancers will be successful; and if our approach is unsuccessful, our business will suffer.
We are very early in our development efforts and are substantially dependent on our lead product candidate, NXP800. If we are unable to advance NXP800, NXP900 or any of our other future product candidates through clinical development, obtain regulatory approval and ultimately commercialize NXP800, NXP900 or any of our other future product candidates, or experience significant delays in doing so, our business will be materially harmed.
NXP800, our lead product candidate, is still in preclinical development and has never been tested in human subjects. Our ability to generate product revenues, which we do not expect will occur for many years, if ever, will depend heavily on the successful clinical development and eventual commercialization of NXP800 or future product candidates. Our second drug candidate, NXP900, has yet to begin IND-enabling studies or similar studies required by a foreign regulatory agency. Depending on the results of these IND-enabling studies, we may not be able to submit an IND with the FDA or a similar submission with a foreign regulatory agency and, therefore, may not be able to conduct clinical trials for NXP900. In addition, our drug development programs may contemplate the development of companion diagnostics, which are assays or tests to identify an appropriate patient population. Companion diagnostics are subject to regulation as medical devices and must themselves receive marketing authorization from the FDA or certain other foreign regulatory agencies before they may be marketed. If a companion diagnostic is essential to the safe and effective use of any of our current and future product candidates, the FDA must conclude that the companion diagnostic meets the applicable standard for safety and effectiveness or for substantial equivalence for use with our product candidates before either the product candidates or companion diagnostic may be marketed in the United States.
Negative results in the development of our lead product candidate may also prevent or delay our ability to continue or conduct clinical programs or receive regulatory approvals for our other future product candidates. For example, although we believe, based on preclinical studies of OCCC models that demonstrated tumor growth inhibition, that this cancer type might be particularly sensitive to NXP800, this may not prove true in clinical testing for any or all of the target indications. Moreover, anti-tumor activity may be different in each tumor type that we plan to evaluate in clinical trials. Therefore, even though we plan to potentially pursue tumor-agnostic clinical development of NXP800, the tumor response may be low in patients with some cancers compared to others. As a result, we may be required to discontinue development of NXP800 for patients with those tumor types and/or mutations due to insufficient clinical benefit, while continuing
 
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development in a more limited population of patients. Consequently, in order to obtain regulatory approval, we may have to reach agreement with the FDA on defining the optimal patient population, study design and size, any of which may require significant additional resources and delay our clinical trials and ultimately the approval, if any, of any of our other future product candidates.
We may experience setbacks that could delay or prevent regulatory approval of, or our ability to commercialize, our current or future product candidates, including:

negative or inconclusive results from our preclinical studies or clinical trials or positive results from the clinical trials of others for product candidates similar to ours leading to their approval, and evolving to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program;

product-related side effects experienced by patients or subjects in our clinical trials or by individuals using drugs or therapeutics that we, the FDA, other regulators or others view as relevant to the development of our current or future product candidates;

delays in submitting INDs or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial, or a suspension or termination of a clinical trial once commenced;

conditions imposed by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials, including our clinical endpoints;

delays in enrolling subjects in clinical trials, including due to the COVID-19 pandemic, and completion of clinical trials, including under GCP or GLP requirements;

inability to maintain compliance with regulatory requirements, including cGMPs, and complying effectively with other requirements pertaining to the quality of our current or future product candidates;

high drop-out rates of subjects from clinical trials;

inadequate supply or quality of our current or future product candidates or other materials necessary for the conduct of our clinical trials;

greater than anticipated clinical trial costs;

inability to compete with other therapies;

poor efficacy of our current or future product candidates during clinical trials;

trial results taking longer than anticipated;

trials being subjected to fraud or data capture failure or other technical mishaps leading to the invalidation of our trials;

the results of our trials not supporting application for conditional approval in the EU;

unfavorable FDA or other regulatory agency inspection and review of a clinical trial site;

failure of our third-party contractors or investigators to comply with regulatory requirements or otherwise meet their contractual obligations in a timely manner, or at all;

delays related to the impact of the spread of the COVID-19 pandemic, including the impact of COVID-19 on the FDA’s ability to continue its normal operations;

delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical development generally or with respect to our technology in particular; or

varying interpretations of data by the FDA and similar foreign regulatory agencies.
In addition, because we have limited financial and personnel resources and are focusing primarily on developing our lead product candidate, we may forgo or delay pursuit of other future product candidates
 
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that may prove to have greater commercial potential and may fail to capitalize on viable commercial products or profitable market opportunities. If we do not accurately evaluate the commercial potential or target market for a future product candidate, we may relinquish valuable rights to those future product candidates through collaboration, licensing, or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to such future product candidates.
Clinical drug development involves a lengthy and expensive process with uncertain outcomes, clinical trials are difficult to design and implement, and any of our clinical trials could produce unsuccessful results or fail at any stage in the process.
Clinical trials conducted on humans are expensive and can take many years to complete, and outcomes are inherently uncertain. Failure can occur at any time during the process. Additionally, any positive results of preclinical studies and early clinical trials of a drug candidate may not be predictive of the results of later-stage clinical trials, such that drug candidates may reach later stages of clinical trials and fail to show the desired safety and efficacy traits despite having shown indications of those traits in preclinical studies and early-stage clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in preclinical studies or earlier phases of clinical trials. Therefore, the results of any future clinical trials we conduct may not be successful.
Clinical trials may be delayed, suspended or prematurely terminated because costs are greater than we anticipate or for a variety of reasons, such as:

delay or failure in reaching agreement with the FDA or a comparable foreign regulatory authority on a trial design that we are able to execute;

delay or failure in obtaining authorization to commence a trial, including approval from the appropriate independent review board (“IRB”) to conduct testing of a candidate on human subjects, or inability to comply with conditions imposed by a regulatory authority regarding the scope or design of a clinical trial;

delay in reaching, or failure to reach, agreement on acceptable terms with prospective clinical research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

inability, delay or failure in identifying and maintaining a sufficient number of trial sites, many of which may already be engaged in other clinical programs;

delay or failure in recruiting and enrolling suitable volunteers or patients to participate in a trial;

delay or failure in developing and validating companion diagnostics, if they are deemed necessary, on a timely basis;

failure of patients to complete a trial or return for post-treatment follow-up;

inability to monitor patients adequately during or after treatment;

clinical sites and investigators deviating from trial protocols, failing to conduct the trial in accordance with regulatory requirements or dropping out of a trial;

failure to initiate or delay of or inability to complete a clinical trial as a result of a clinical hold imposed by the FDA or comparable foreign regulatory authority due to observed safety findings or other reasons;

negative or inconclusive results in our clinical trials, and our decision to or regulators’ requirement that we conduct additional preclinical studies, clinical trials or that we abandon one or more of our product development programs; or

inability to manufacture sufficient quantities of a drug candidate of acceptable quality for use in clinical trials.
 
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Risk Factors
We rely and plan to continue to rely on CROs, Contract manufacturing organizations (“CMOs”) and clinical trial sites to ensure the proper and timely conduct of our clinical trials. Although we have and expect that we will have agreements in place with CROs and CMOs governing their contracted activities and conduct, we will have limited influence over their actual performance. As a result, we ultimately do not and will not have control over a CRO or CMO’s compliance with the terms of any agreement it may have with us, its compliance with applicable regulatory requirements, or its adherence to agreed-upon time schedules and deadlines, and a future CRO or CMO’s failure to perform those obligations could subject any of our clinical trials to delays or failure.
Further, we may also encounter delays if a clinical trial is suspended or terminated by us, by any independent review board (“IRB”) or ethics committee, by a Data Safety Monitoring Board, or DSMB, or by the FDA or EMA, or other regulatory authority. A suspension or termination may be due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements, inspection of the clinical trial operations or trial site by the FDA, EMA or other regulatory authorities, exposing participants to health risks caused by unforeseen safety issues or adverse side effects, development of previously unseen safety issues, failure to demonstrate a benefit from using a drug candidate, or changes in governmental regulations or administrative actions. Therefore, we cannot predict with any certainty the schedule for commencement or completion of any currently ongoing, planned or future clinical trials.
Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval for our current or future product candidates.
If we experience delays in the commencement or completion of, or suspension or termination of, any clinical trial for our drug candidates, the commercial prospects of the drug candidate could be harmed, and our ability to generate product revenues from the drug candidate may be delayed or eliminated. In addition, any delays in completing our clinical trials will increase our costs, slow down our drug candidate development and approval process and jeopardize regulatory approval of our drug candidates and our ability to commence sales and generate revenues. The occurrence of any of these events could harm our business, financial condition, results of operations and prospects significantly.
Difficulty in enrolling patients could delay or prevent clinical trials of our current or future product candidates.
Identifying and qualifying patients to participate in clinical studies of our current or future product candidates is critical to our success. The timing of completion of our clinical studies depends in part on the speed at which we can recruit patients to participate in testing our current or future product candidates and we may experience delays in our clinical trials if we encounter difficulties in enrollment. Further, because we are focused on patients with specific indications and genetic mutations, our ability to enroll eligible patients may be limited and may result in slower enrollment than we anticipate. Our clinical trials will compete with other clinical trials for current or future product candidates that are in the same therapeutic areas as our current or future product candidates, which may reduce the number and types of patients available to us.
Clinical trials may be subject to delays as a result of patient enrollment taking longer than anticipated or greater than anticipated subject withdrawal. We may not be able to initiate or continue clinical trials for our current or future product candidates if we are unable to locate and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA or foreign regulatory authorities. We cannot predict how successful we will be at enrolling subjects in future clinical trials. The enrollment of patients depends on many factors, including:

the patient eligibility and exclusion criteria defined in the protocol;

the size of the patient population required for analysis of the clinical trial’s primary endpoints and the process for identifying patients;

potential disruptions caused by the COVID-19 pandemic, including difficulties in initiating clinical sites, enrolling and retaining participants, diversion of health care resources away from clinical trials, travel or quarantine policies that may be implemented, and other factors;

the proximity of patients to clinical trial sites;
 
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Risk Factors

the design of the trial;

our ability to recruit clinical trial investigators with the appropriate competencies and experience;

clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for the indications we are investigating;

the availability of competing commercially available therapies and other competing product candidates’ clinical trials;

our ability to obtain and maintain clinical trial subject informed consents; and

the risk that subjects enrolled in clinical trials will drop out of the trials before completion.
If we are unable to locate and enroll sufficient eligible patients to participate, as required by the FDA or similar regulatory authorities, we may be unable to initiate or continue clinical trials for our current or future product candidates. If necessary, we intend to engage third parties to develop companion diagnostics for use in our clinical trials. If such third parties are unsuccessful, our difficulty in identifying patients with the targeted genetic mutations for our clinical trials would be increased. If we are unable to include patients with the targeted genetic mutations or patients with well-defined serious unmet medical needs, we may be unable to participate in the FDA’s expedited review and development programs, including breakthrough therapy designation and fast track designation, or otherwise seek to accelerate clinical development and regulatory timelines.
Our preclinical studies and clinical trials may fail to demonstrate adequately the safety, potency, purity, efficacy or any other necessary pharmacological properties of any of our current or future product candidates, which would prevent or delay development, regulatory approval and commercialization.
Before obtaining regulatory approvals for the commercial sale of our current or future product candidates, including NXP800 and NXP900, we must demonstrate through lengthy, complex and expensive preclinical studies and clinical trials that our current or future product candidates are both safe and effective for use in each target indication. Preclinical and clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. Failure can occur at any time during the preclinical study and clinical trial processes, and, because our current product candidates are in an early stage of development, there is a high risk of failure.
The results of preclinical studies and early clinical trials of our current or future product candidates may not be predictive of the results of later-stage clinical trials. Although product candidates may demonstrate promising results in preclinical studies and early clinical trials, they may not prove to be effective in subsequent clinical trials. Additionally, while we have not yet initiated clinical trials for any of our current or future product candidates, as is the case with all oncology drugs, it is likely that there may be side effects associated with their use. Results of our trials could reveal a high and unacceptable severity and prevalence of these or other side effects. In such an event, our trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval of our current or future product candidates for any or all targeted indications. Drug-related side effects could also affect patient recruitment into the study or patient willingness to remain in the study and therefore affect our ability to complete clinical trials. Drug-related side effects could also result in potential product liability claims. Any of these occurrences may harm our business, financial condition and prospects significantly.
The FDA and comparable foreign regulatory authorities may not accept data from any preclinical or clinical trials we may conduct in foreign countries.
The FDA’s acceptance of data generated for patients recruited outside the United States from clinical trials conducted in whole or in part outside the United States may be subject to certain conditions, if accepted at all. Although the FDA has the authority to accept foreign data as part or even the sole basis for marketing approval, the FDA generally does not approve an application on the basis of foreign data alone unless (i) the data is applicable to the U.S. population and U.S. medical practice, (ii) the trials were performed by clinical
 
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Risk Factors
investigators of recognized competence and pursuant to good clinical practice regulations, and (iii) the FDA’s clinical trial requirements, including sufficient patient population size and statistical powering, were met. Many foreign regulatory authorities have similar approval requirements. In addition, any clinical study conducted in whole or in part outside of the United States would be subject to the applicable local laws of the jurisdiction where the trial was conducted. We cannot guarantee that the FDA or comparable foreign regulatory authority will accept data from trials conducted in whole or in part outside of the United States, which may result in the need for additional trials.
We may not be able to submit INDs or IND amendments to commence additional clinical trials on the timelines we expect, and even if we are able to, the FDA may not permit us to proceed.
We plan to submit a CTA with the MHRA by December 2021 and an IND to FDA in the first half of 2022 for NXP800. However, if we experience manufacturing delays or other delays with the CTA submission process, we may be unable to file CTAs, INDs or other clinical research authorizations for other product candidates on our expected timelines. Moreover, we cannot be sure that submission of a CTA or an IND will result in the MHRA or the FDA allowing our planned clinical trials to begin, or that, once begun, issues will not arise that suspend or terminate such clinical trials. Any failure to file CTAs, INDs or other clinical research authorizations will adversely impact our expected timelines to obtain regulatory acceptance for the commencement of our trials and may prevent us from completing our clinical trials or commercializing our products on a timely basis, if at all.
We currently have no marketing and sales organization and have limited experience in marketing products. If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell any approved product candidates, we may not be able to generate product revenue.
We will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train and retain marketing and sales personnel. If we are unable or decide not to establish internal sales, marketing, and distribution capabilities, we will pursue arrangements with third-party sales, marketing, and distribution collaborators regarding the sales and marketing of our products, if approved.
There can be no assurance that we will be able to develop in-house sales and distribution capabilities or establish or maintain relationships with third-party collaborators to commercialize any product in the United States or overseas.
We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
While we believe that our scientific knowledge, technology, and development expertise provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceuticals, specialty pharmaceuticals and biotechnology companies, academic institutions and government agencies, and public and private research institutes that conduct research, development, manufacturing, and commercialization. Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, regulatory approvals, and product marketing than we do. Our competitors may compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient recruitment for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. As a result, our competitors may discover, develop, license, or commercialize products earlier or more successfully than we do.
If our drug candidates, NXP800 and NXP900, are approved for the indications for which we are currently conducting or planning preclinical and clinical trials, they will likely compete with competitor drugs and other drugs that are currently in development. The availability of reimbursement from government and other third-party payors will also significantly affect the pricing and competitiveness of our products. Our competitors may also obtain FDA or other regulatory approval for their products more rapidly than we do, which could result in our competitors establishing a strong market position before we are able to enter the market.
 
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Risk Factors
Risks Related to Government Regulation
Denial of or delay in our receipt of required regulatory approvals may prevent or delay commercialization of our current or future product candidates and our ability to generate revenue may be materially impaired.
The research, testing, manufacturing, labeling, approval, sale, marketing and distribution of drug products are, and will remain, subject to extensive regulation by the FDA in the United States and by the respective regulatory authorities in other countries where regulations differ. We will not be permitted to market our current or future product candidates in the United States until we receive the respective approval of an NDA from the FDA, or in any foreign countries until we receive the requisite approval from the respective regulatory authorities in such countries. The time required to obtain regulatory approval, if any, by the FDA, EMA and comparable foreign authorities is unpredictable, but typically takes many years following the commencement of clinical trials, if approval is obtained at all, and depends upon numerous factors, including the substantial discretion of the regulatory authorities and the type, complexity and novelty of the product candidates involved. Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional nonclinical studies or clinical trials. We have not submitted a marketing application such as an NDA to the FDA, an MAA to the EMA, or any similar application to any other jurisdiction.
Obtaining regulatory approval requires the submission of extensive nonclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing regulatory approval also requires the submission of information about the product manufacturing process, and in many cases the inspection of manufacturing, processing, and packaging facilities by the regulatory authorities. Our current or future product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use, or there may be deficiencies in cGMP compliance by us or by our CMOs that could result in the candidate not being approved. Moreover, we have not obtained regulatory approval for any drug candidate in any jurisdiction and it is possible that none of our existing drug candidates or any drug candidates we may seek to develop in the future will ever obtain regulatory approval.
Our drug candidates could fail to receive, or could be delayed in receiving, regulatory approval for many reasons, including any one or more of the following:

the FDA, EMA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials;

we may be unable to demonstrate to the satisfaction of the FDA, EMA or comparable foreign regulatory authorities that a drug candidate is safe and effective for its proposed indication;

the results of clinical trials may not meet the level of statistical significance required by the FDA, EMA or comparable foreign regulatory authorities for approval;

we may be unable to demonstrate that a drug candidate’s clinical and other benefits outweigh its safety risks;

the FDA, EMA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

the data collected from clinical trials of our drug candidates may not be sufficient to support the submission of an NDA or other submission or to obtain regulatory approval in the United States or elsewhere;

upon review of our clinical trial sites and data, the FDA or comparable foreign regulatory authorities may find our record keeping or the record keeping of our clinical trial sites to be inadequate;

the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies may fail to meet the requirements of the FDA, EMA or comparable foreign regulatory authorities;
 
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Risk Factors

the FDA, EMA or comparable foreign regulatory authorities may fail to approve the companion diagnostics we contemplate developing internally or with partners; and

the change of the medical standard of care or the approval policies or regulations of the FDA, EMA or comparable foreign regulatory authorities may significantly change in a manner that renders our clinical data insufficient for approval.
The time and expense of the approval process, as well as the unpredictability of future clinical trial results and other contributing factors, may result in our failure to obtain regulatory approval to market, in one or more jurisdictions, NXP800, NXP900 or any other drug candidates we may seek to develop in the future, which would significantly harm our business, results of operations and prospects. In such case, we may also not have the resources to conduct new clinical trials and/or we may determine that further clinical development of any such drug candidate is not justified and may discontinue any such programs.
In addition, even if we were to obtain regulatory approval in one or more jurisdictions, regulatory authorities may approve any of our drug candidates for fewer or more limited indications than we request, may not approve prices we may propose to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials (referred to as “conditional” or “accelerated” approval depending on the jurisdiction), or may approve a drug candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that drug candidate. Any of the foregoing circumstances could materially harm the commercial prospects for our drug candidates.
Obtaining and maintaining regulatory approval of our current or future product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our current or future product candidates in other jurisdictions.
Obtaining and maintaining regulatory approval of any of our current or future product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, while a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in other jurisdictions. For example, even if the FDA grants regulatory approval of a product candidate, similar foreign regulatory authorities must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Drug product approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.
We may also submit marketing applications in other countries. Regulatory authorities in jurisdictions outside of the United States have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions. Obtaining similar foreign regulatory approvals and compliance with similar foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries. We do not have any product candidates approved for sale in any jurisdiction, including international markets, and we do not have experience in obtaining regulatory approval in international markets. If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our current or future product candidates will be harmed.
Even if we receive regulatory approval of our current or future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our current or future product candidates.
If any of our current or future product candidates are approved, activities such as the manufacturing, labeling, packaging, storage, advertising, promotion, sampling, and record keeping for the products will be
 
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Risk Factors
subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as ongoing compliance with cGMP regulations. Drug manufacturers and any CMOs responsible for any product manufacturing processes are required to comply with extensive FDA and comparable foreign regulatory authority requirements, including ensuring that quality control and manufacturing procedures conform to cGMP regulations and any applicable foreign equivalents. As such, we and our CMOs will be subject to continual review and inspections to assess compliance with cGMP and adherence to commitments made in any NDA, other marketing application, and previous responses to inspection observations. Accordingly, we and others with whom we work must continue to expend time, money, and effort in all areas of regulatory compliance, including manufacturing, production and quality control.
The FDA or a comparable foreign regulatory authority may also impose requirements for costly post-marketing nonclinical studies or clinical trials (often called “Phase 4 trials”) and post-marketing surveillance to monitor the safety or efficacy of the product. If we or a regulatory authority discover previously unknown problems with a product, such as adverse events of unanticipated severity or frequency, production problems or issues with the facility where the product is manufactured or processed, such as product contamination or significant not-compliance with applicable cGMP regulations, a regulator may impose restrictions on that product, the manufacturing facility or us. If we or our third-party providers, including our CMOs, fail to comply fully with applicable regulations, then we may be required to initiate a recall or withdrawal of our products.
Later discovery of previously unknown problems with our current or future product candidates, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in the following, among other things:

restrictions on the manufacturing of the product, the approved manufacturers or the manufacturing process;

restrictions on the labeling or marketing of a product;

restrictions on product distribution or use;

requirements to conduct post-marketing studies or clinical trials;

withdrawal of the product from the market;

product recalls;

warning or untitled letters from the FDA or comparable notice of violations from foreign regulatory authorities;

refusal of the FDA or other applicable regulatory authority to approve pending applications or supplements to approved applications;

fines, restitution or disgorgement of profits or revenues;

suspension or withdrawal of marketing approvals;

suspension of any of our ongoing clinical trials;

product seizure or detention or refusal to permit the import or export of products; and

consent decrees, injunctions or the imposition of civil or criminal penalties.
In addition, regulatory authorities’ policies (such as those of the FDA or EMA) may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our current or future product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are otherwise not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, which would adversely affect our business, prospects and ability to achieve or sustain profitability.
 
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Non-compliance with European Union requirements regarding safety monitoring or pharmacovigilance can also result in significant financial penalties. Similarly, failure to comply with the European Union’s requirements regarding the protection of personal information can also lead to significant penalties and sanctions.
The FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay marketing approval of our current or future product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, this may adversely affect, or even lead to the rescission of, the marketing approval that we may have obtained, which would adversely affect our business, prospects and ability to achieve or sustain profitability.
A variety of risks associated with marketing our current or future product candidates internationally could materially adversely affect our business.
We plan to seek regulatory approval of our current or future product candidates outside of the United States and expect that we will be subject to additional risks related to operating in foreign countries including: differing regulatory requirements; unexpected changes in tariffs, trade barriers, price and exchange controls; economic weakness, including inflation, or political instability in particular foreign economies and markets; compliance with tax, employment, immigration and labor laws for employees living or traveling abroad; foreign currency fluctuations that result in increased operating expenses, reduced revenue, and other obligations incident to doing business in another country; potential liability under the Foreign Corrupt Practices Act of 1977 or comparable foreign regulations; and challenges enforcing our contractual and intellectual property rights, especially in countries that do not recognize intellectual property rights to the same extent as the United States.
The insurance coverage and reimbursement status of newly approved products is uncertain. Our current or future product candidates may become subject to unfavorable pricing regulations, third-party coverage and reimbursement practices, or healthcare reform initiatives, which would harm our business. Failure to obtain or maintain adequate coverage and reimbursement for new or current products could limit our ability to market those products and decrease our ability to generate revenue.
Adverse pricing limitations may hinder our ability to recoup our investment in one or more of our current or future product candidates, even if any such current or future product candidate we may develop obtains marketing approval.
Our ability to successfully commercialize any current or future product candidates will depend in part on the coverage and reimbursement for the products and related treatments from government health administration authorities and third-party payors, such as private health insurers and health maintenance organizations. These organizations decide which medications they will pay for and establish reimbursement levels. If coverage and adequate reimbursement is not available, or the approved reimbursement amount is not high enough, we may be unable to establish or maintain pricing sufficient to generate a return on our investment and may be unable to successfully commercialize our current or future product candidates. Reimbursement by a third-party payor may depend upon a number of factors, including, but not limited to, the third-party payor’s determination that use of a product is a covered benefit under its health plan, safe, effective and medically necessary, appropriate for the specific patient, cost-effective, and neither experimental nor investigational. If coverage and adequate reimbursement is not available, or the approved reimbursement amount is not high enough, we may be unable to establish or maintain pricing sufficient to generate a return on our investment and may be unable to successfully commercialize our current or future product candidates.
A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications. In general, the prices of medicines under such systems are substantially lower than in the United States.
 
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There is also significant uncertainty related to the insurance coverage and reimbursement of newly approved products, and coverage may be more limited than the purposes for which the medicine is approved by the FDA or comparable foreign regulatory authorities. In the United States, the principal decisions about reimbursement for new medicines are typically made by the Centers for Medicare & Medicaid Services (“CMS”), an agency within the U.S. Department of Health and Human Services (“HSS”). As a result, the coverage determination process is often a time consuming and costly process that may require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. It is difficult to predict what CMS will decide with respect to reimbursement for fundamentally novel products such as ours. Reimbursement agencies in Europe may be more conservative than CMS. Our inability to promptly obtain coverage and profitable payment rates from both government-funded and private payors for any approved products we may develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize our current or future product candidates, and our overall financial condition.
Healthcare legislative measures and changes in policies, funding, staffing and leadership at the FDA and other agencies could hinder or prevent the commercial success of our products.
In the United States, there have been a number of legislative and regulatory changes to the healthcare system that could affect our future results of operations and the future results of operations of our potential customers.
In recent years, there has been heightened governmental scrutiny over the manner in which biopharmaceutical manufacturers set prices for their marketed products, which has resulted in several recent government inquiries as well as federal and state legislation designed to, among other things, increase drug price transparency, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government reimbursement for drug products. Congress and the executive branch have each indicated that they will continue to seek new legislative and/or administrative measures to control drug costs, making this area subject to ongoing uncertainty. At the state level in the United States, legislatures have also increasingly passed legislation and implemented regulations designed to control drug product pricing.
While we cannot predict what impact these laws or policies will have in general or specifically on any product we may commercialize in the future, such efforts by the government and payors may result in downward pressure on reimbursement, which could negatively affect market acceptance of new products. Any rebates, discounts, taxes costs or regulatory or systematic changes on healthcare may have a significant effect on our profitability in the future.
Given recent federal and state government initiatives directed at lowering the total cost of healthcare, the executive branch, Congress and state legislatures will likely continue to focus on healthcare reform and the reform of the Medicare and Medicaid programs. While we cannot predict the full outcome of any such government action or legislation, it may harm our ability to market our products and generate revenues.
Furthermore, regulatory authorities’ assessment of the data and results required to demonstrate safety and effectiveness can change over time and can be affected by many factors, such as the emergence of new information, including on other products, changing policies and agency funding, staffing and leadership. We cannot be sure whether future changes to the regulatory environment will be favorable or unfavorable to our business prospects.
Our future relationships with customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings.
Healthcare providers, physicians and third-party payors in the U.S. and elsewhere will play a primary role in the recommendation and prescription of any current or future product candidates for which we obtain
 
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marketing approval. Our future arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, which may constrain the business or financial arrangements and relationships through which we sell, market and distribute any current or future product candidates for which we obtain marketing approval. In addition, we may be subject to transparency laws and patient privacy regulation by the federal and state governments and by governments in foreign jurisdictions in which we conduct our business. The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not necessarily limited to:

the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs, such as Medicare and Medicaid;

federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and their respective implementing regulations, which impose obligations on covered healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

the federal Open Payments program, which requires manufacturers of certain drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to CMS, information related to “payments or other transfers of value” made to “covered recipients,” which include physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and teaching hospitals) and applicable manufacturers. Applicable group purchasing organizations also are required to report annually to CMS the ownership and investment interests held by the physicians and their immediate family members. The SUPPORT for Patients and Communities Act added to the definition of covered recipient practitioners including physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists and certified nurse-midwives effective in 2022. Data collection began on August 1, 2013 with requirements for manufacturers to submit reports to CMS by March 31, 2014 and 90 days after the end of each subsequent calendar year. Disclosure of such information was made by CMS on a publicly available website beginning in September 2014; and

analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
 
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Risk Factors
In November 2020, the Department of Health and Human Services (“DHHS”) finalized significant changes to the regulations implementing the Anti-Kickback Statute, as well as the Physician Self-Referral Law (“Stark Law”) and the civil monetary penalty rules regarding beneficiary inducements, with the goal of offering the healthcare industry more flexibility and reducing the regulatory burden associated with those fraud and abuse laws, particularly with respect to value-based arrangements among industry participants.
Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, which could have a material adverse effect on our businesses. If any of the physicians or other healthcare providers or entities with whom we expect to do business, including our collaborators, is found not to be in compliance with applicable laws, it may be subject to criminal, civil or administrative sanctions, including exclusions from participation in government healthcare programs, which could also materially affect our businesses.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our operations may involve the use of hazardous and flammable materials, including chemicals and biological and radioactive materials. Our operations also may produce hazardous waste products. We currently contract with third parties for the conduct of our manufacturing efforts and preclinical studies and clinical trials and such third parties are responsible for disposal of these materials and wastes. However, we cannot eliminate our risk of contamination or injury from these materials. In the event of contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.
Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.
Risks Related to our Intellectual Property
We currently hold a license to certain intellectual property rights relating to our lead product candidate, NXP800 and to NXP900, as well as intellectual property rights relating to other compounds that modulate HSF1 and the SRC and YES1 kinases. If we are unable to maintain patent and other intellectual property protection for NXP800 and NXP900, and to obtain and maintain patent and other intellectual property protections for our other current or future product candidates and technology, or any other product candidates or technology we may develop, or if the scope of intellectual property protection obtained or maintained is not sufficiently broad, our competitors could develop and commercialize products and technology similar or identical to ours, and our ability to commercialize NXP800, NXP900 or any other current or future product candidates or technology may be adversely affected.
Our success depends in large part on our ability to obtain and maintain patent and other intellectual property protection in the United States and other countries with respect to our current or future product candidates, including NXP800 and NXP900, their respective components, formulations, combination therapies, methods used to manufacture them and methods of treatment and development that are important to our business, as well as successfully defending these patents against third-party challenges. If we do not
 
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adequately protect our intellectual property rights, or if the intellectual property rights we are able to obtain are insufficiently broad and exclusive, competitors may be able to erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability.
We intend to rely upon a combination of patents, patent applications, confidentiality agreements, trade secret protection and license agreements to protect the intellectual property related to our current or future product candidates and technologies. Any disclosure to or misappropriation by third parties of our confidential proprietary information could enable competitors to quickly duplicate or surpass our technological achievements, thus eroding our competitive position in our market. We, or any current or future partners, collaborators, or licensees, may fail to identify patentable aspects of inventions made in the course of development and commercialization activities before it is too late to obtain patent protection on them. We may be also unable to exclusively license relevant technology and associated IP developed by others. Therefore, we may miss potential opportunities to establish our patent position.
If we are unable to secure additional patent protection or maintain existing or future patent protection with respect to NXP800, NXP900, or any other proprietary products and technology we develop, our business, financial condition, results of operations, and prospects would be materially harmed.
We currently hold a license to certain intellectual property rights relating to NXP800, including its composition of matter and to other compounds that modulate HSF1. In addition, we hold a license to certain intellectual property relating to NXP900, including its composition of matter and to other compounds that inhibit the SRC and YES1 kinases.
As of May 19, 2021, we licensed one patent family covering the composition of matter for NXP800, including two issued U.S. patents covering the composition of matter for NXP800, as well as methods for using and making NXP800. Additionally, patents have been issued in major markets, including the U.S., the E.U., and Japan. The statutory expiration for the issued U.S. patents in this family is October 2034, without considering any patent extensions that may or may not be possible.
We have licensed a patent family directed to additional compounds that modulate HSF1. A patent from this family has been granted in the U.S., and has a statutory expiration of April 2036, without considering any patent extensions that may or may not be possible.
We have also licensed a patent family directed to deuterated compounds that modulate HSF1. Any U.S. patent that grants from this family would have a statutory expiration of October 2037, without considering any patent extensions or patent disclaimers that may or may not be possible.
As of August 26, 2021, we licensed one patent family covering the composition of matter for NXP900, which has been granted in the U.S., EU, Japan, China and is pending in the United Kingdom and Canada. The statutory expiration for patents in this patent family is April 2036, without taking into account any possible patent term extension, where applicable. We have also licensed a patent family directed to a metabolite of NXP900, filed as a priority application August 2021. Any patent that grants from this family would have a statutory expiration of August 2042.
If the scope of our patent protection, whether now or in the future, with respect to NXP800, NXP900 or our other current or future product candidates and technology is not sufficiently broad, we will be unable to prevent others from using our technology or from developing or commercializing technology and products similar or identical to ours or other competing products and technologies. Any failure to obtain or maintain patent protection, through our own patents or through in-licensing, with respect to NXP800 and our other current or future product candidates would have a material adverse effect on our business, financial condition, results of operations and prospects.
Even if they are unchallenged, our patent applications, if issued, and any patents we may own or in-license now or in the future, may not provide us with any meaningful protection or prevent competitors from designing around our patent claims to circumvent any patents we may own or in-license in the future by developing similar or alternative technologies or therapeutics in a non-infringing manner. If the patent protection
 
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Risk Factors
provided by our patent applications or any patents we may pursue with respect to our current or future product candidates is not sufficiently broad to impede competition, our ability to successfully commercialize our current or future product candidates could be negatively affected, which would harm our business.
Additionally, we cannot be certain that the claims in our patent applications covering composition of matter (or other related aspects) of our current or future product candidates or technology will be considered patentable by the U.S. Patent and Trademark Office (“USPTO”), or by patent offices in foreign countries, or that the claims in any issued patents we may own or in-license in the future will be considered patentable by courts in the United States or foreign countries.
The issuance of a patent does not foreclose challenges to its inventorship, scope, validity or enforceability. Therefore, our owned and in-licensed patents may be challenged in the courts or patent offices in the United States and elsewhere. Such challenges may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part. Successful patent challenges could limit our ability to stop others from using or commercializing similar or identical technology and products, or limit the duration of the patent protection of our technology and products. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized. As a result, our owned and in-licensed patents may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.
Moreover, we may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, reexamination, inter parties review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission, Patent Trial and Appeal Board trial, proceeding or litigation could reduce the scope of, render unenforceable, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.
If we fail to comply with our obligations in our current license agreement, or in any future agreements under which we may license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our current or future licensors, we could lose license rights that are important to our business.
We are currently party to a license which grants us certain intellectual property rights relating to our lead drug candidate, NXP800, as well as other compounds that modulate HSF1 and to a license which grants us certain intellectual property rights relating to our second drug candidate, NXP900, as well as other compounds that inhibit the SRC and YES1 kinases. This agreement imposes numerous obligations on us to maintain our licensing rights, including development, diligence, payment, commercialization, funding, milestone, royalty, sublicensing, insurance, patent prosecution, enforcement and other obligations. Moreover, the license agreement imposes a financial condition precedent, which requires us to meet certain financial obligations before the agreement can become effective. We believe these conditions will be satisfied in connection with this offering. In spite of our best efforts, our licensor might conclude that we have materially breached our license agreement and might therefore terminate the license agreement, thereby removing or limiting our ability to develop and commercialize NXP800 or NXP900 (and other compounds covered by the licenses).
Additionally, in the future, we may be party to other license or collaboration agreements with third parties to advance our research or allow commercialization of current or future product candidates. Such future agreements may impose numerous obligations, such as development, diligence, payment, commercialization, funding, milestone, royalty, sublicensing, insurance, patent prosecution, enforcement and other obligations on us and may require us to meet development timelines, or to exercise commercially reasonable efforts to develop and commercialize licensed products, in order to maintain the licenses. In spite of our best efforts,
 
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our future licensors might conclude that we have materially breached our future license agreements and might therefore terminate the license agreements, thereby removing or limiting our ability to develop and commercialize products and technologies covered by these license agreements.
Any termination of these current or future licenses, or if the underlying patents fail to provide the intended exclusivity, could result in the loss of significant rights and could harm our ability to commercialize our current or future product candidates, and competitors or other third parties would have the freedom to seek regulatory approval of, and to market, products identical to ours and we may be required to cease our development and commercialization of certain of our current or future product candidates. Any of the foregoing could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.
In addition to the protection afforded by patents we may own or in-license in the future, we seek to rely on trade secret protection, confidentiality agreements, and license agreements to protect proprietary know-how that is not patentable, processes for which patents are difficult to enforce, and any other elements of our product discovery and development processes that involve proprietary know-how, information, or technology that is not covered by patents. Although we require all of our employees, consultants, advisors and any third parties who have access to our proprietary know-how, information, or technology to enter into confidentiality agreements, trade secrets can be difficult to protect and we have limited control over the protection of trade secrets used by our collaborators and suppliers.
If we are unable to prevent unauthorized material disclosure of our intellectual property to third parties, we will not be able to establish or maintain a competitive advantage in our market, which could materially adversely affect our business, financial condition, results of operations and future prospects.
Third-party claims of intellectual property infringement, misappropriation or other violations may be costly and time consuming and may prevent or delay our product discovery and development efforts.
The intellectual property landscape around precision medicine is crowded, and third parties may initiate legal proceedings alleging that we are infringing, misappropriating, or otherwise violating their intellectual property rights; the outcome of which would be uncertain and could have a material adverse effect on the success of our business. We or any of our future licensors or strategic partners may be party to, exposed to, or threatened with, future adversarial proceedings or litigation by third parties having patent or other intellectual property rights alleging that our current or future product candidates and/or proprietary technologies infringe, misappropriate or otherwise violate their intellectual property rights. Thus, because of the large number of patents issued and patent applications filed in our fields, there may be a risk that third parties may allege they have patent rights encompassing our current or future product candidates, technologies or methods.
Third parties may assert that we are employing their proprietary technology without authorization. In addition, because some patent applications in the United States may be maintained in secrecy until the patents are issued, patent applications in the United States and many foreign jurisdictions are typically not published until 18 months after filing, and publications in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed patent applications covering our current or future product candidates or technology. If any such patent applications issue as patents, and if such patents have priority over our patent applications or patents we may own or in-license, we may be required to obtain rights to such patents owned by third parties which may not be available on commercially reasonable terms or at all, or may only be available on a non-exclusive basis.
In the event of a successful claim of infringement, misappropriation or other violation against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.
 
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Changes to patent law in the United States and in foreign jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
Our success is heavily dependent on intellectual property, particularly patents. Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce patents that we might obtain in the future.
We may be subject to claims challenging the inventorship or ownership of any intellectual property, including any patents we may own or in-license currently or in the future.
We may be subject to claims that former employees, collaborators or other third parties have an interest in any patents we may own or in-license currently or in the future, trade secrets, or other intellectual property as an inventor or co-inventor. Litigation may be necessary to defend against these and other claims challenging inventorship of any patents we may own or in-license in the future, trade secrets or other intellectual property.
We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information or alleged trade secrets of third parties or competitors or are in breach of non-competition or non-solicitation agreements with our competitors.
We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise used or disclosed confidential information or trade secrets of these third parties or our employees’ former employers or our consultants’ or contractors’ current or former clients or customers. Litigation or arbitration may be necessary to defend against these claims.
If we do not obtain patent term extension and data exclusivity for any of our current or future product candidates we may develop, our business may be materially harmed.
Depending upon the timing, duration and specifics of any FDA marketing approval of any of our current or future product candidates we may develop, one or more U.S. patents we may own or in-license in the future may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments. If we are unable to obtain patent term extension or the term of any such extension is shorter than what we request, our competitors may obtain approval of competing products following expiration of any patents that issue from our patent applications, and our business, financial condition, results of operations, and prospects could be materially harmed.
If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our marks of interest and our business may be adversely affected.
Our trademarks or trade names may be challenged, infringed, diluted, circumvented or declared generic or determined to be infringing on other marks. We intend to rely on both registration and common law protection for our trademarks. We may not be able to protect our rights to these trademarks and trade names or may be forced to stop using these names, which we need for name recognition by potential partners or customers in our markets of interest. If we are unable to obtain a registered trademark or establish name recognition based on our trademarks and trade names, we may not be able to compete effectively and our business may be adversely affected.
Risks Related to our Reliance on Third Parties
We plan to rely on third parties to conduct our preclinical studies and clinical trials. If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our current or future product candidates.
We plan to utilize and depend upon independent investigators and collaborators, such as medical institutions, CROs, CMOs, and strategic partners to conduct and support our preclinical studies and clinical trials
 
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Risk Factors
under agreements with us. We rely upon, and plan to continue to rely upon, such third-party entities to execute our clinical trials and preclinical studies and to monitor and manage data produced by and relating to those studies and trials. However, in the future we may not be able to establish arrangements with CROs when needed or on terms that are acceptable to us, or at all, which could negatively affect our development efforts with respect to our drug candidates and materially harm our business, operations and prospects. As a result of the use of third-party contractors, we will have only limited control over certain aspects of their activities. Nevertheless, we are responsible for ensuring that each of our studies, including each of our clinical trials, is conducted in accordance with the applicable protocol, legal and regulatory requirements as well as scientific standards, and our reliance on any third-party entity will not relieve us of our regulatory responsibilities.
Based on our present expectations, we and our third-party contractors will be required to comply with GCP regulations for the clinical development of all of our drug candidates. If we or any of these third parties fail to comply with applicable good laboratory practice (“GLP’’) or GCP regulations, the clinical data generated in our preclinical and clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications, which we may not have sufficient cash or other resources to support and which would delay our ability to generate revenue from future sales of such drug candidate. Any agreements governing our relationships with CROs or other contractors with whom we currently engage or may engage in the future may provide those outside contractors with certain rights to terminate a clinical trial under specified circumstances. If such an outside contractor terminates its relationship with us during the performance of a clinical trial, we would be forced to seek an engagement with a substitute contractor, which we may not be able to do on a timely basis or on commercially reasonable terms, if at all, and the applicable clinical trial would experience delays or may not be completed.
Large-scale clinical trials require significant additional financial and management resources and reliance on third-party clinical investigators, CROs, and consultants, which may cause us to encounter delays that are outside of our control. We may be unable to identify and contract with sufficient investigators, CROs, or consultants on a timely basis, if at all.
If these third parties do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols, legal and regulatory requirements or for other reasons, our preclinical or clinical trials may be extended, delayed or terminated and we may not be able to complete development of, obtain regulatory approval for, or successfully commercialize, our current or future product candidates. In addition, we will be unable to control whether or not they devote sufficient time and resources to our preclinical and clinical programs. These outside contractors may not assign as great a priority to our programs or pursue them as diligently as we would if we were undertaking such programs ourselves. As a result, our operations and the commercial prospects for the effected drug candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed. These contractors may also have relationships with other commercial entities, some of whom may compete with us. If our contractors assist our competitors to our detriment, our competitive position would be harmed.
If our relationships with any third parties conducting our studies are terminated, we may be unable to enter into arrangements with alternative third parties on commercially reasonable terms, or at all. Switching or adding third parties to conduct our studies involves substantial cost and requires extensive management time and focus. In addition, there is a natural transition period when a new third party commences work. As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines. Although we carefully manage our relationships with third parties conducting our studies, we cannot assure you that we will not encounter similar challenges or delays in the future or that these delays or challenges will not have a material and adverse effect on our business, financial condition and results of operations.
 
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Risk Factors
We rely, and expect to continue to rely, on the third-party manufacturers to manufacture our current or future product candidates. Reliance on third parties increases the risk that we will not have sufficient quantities of our products or such quantities at an acceptable quality and cost, which could delay, prevent or impair our development or commercialization efforts.
We do not currently own any facility that may be used as our clinical-scale manufacturing and processing facility and must rely on outside vendors to manufacture our current or future product candidates. We rely on a single CMO for manufacturing of NXP800 drug substance and drug product, which are manufactured at two different sites of the same CMO. We intend to continue our relationship with this CMO for the supply of NXP800; however, there can be no assurance that we will be able to retain this relationship on commercially reasonable terms, if at all. If we are unable to maintain this relationship, we could experience delays in our development efforts as we locate and qualify a new CMO. For the in vitro and in vivo experiments of NXP900 conducted to date, small, lab-scale, non cGMP material has been used. We will need to identify an appropriate cGMP CMO(s) for the manufacture of NXP900 drug substance and drug product, and there is no assurance that such CMO(s) will be successful in manufacturing NXP900 drug substance or product. If NXP800, NXP900 or any other drug candidate we may develop or acquire in the future receives regulatory approval, we will rely on one or more CMOs to manufacture the commercial supply of such drugs.
Our anticipated reliance on a limited number of third-party manufacturers exposes us to a number of risks, including:

due to the limited number of potential manufacturers, and because the FDA requires inspection of any manufacturers’ cGMP compliance as part of our marketing application, we may be unable to identify manufacturers on acceptable terms, if at all;

a new manufacturer would have to be educated in and develop substantially equivalent processes for, the production of our current or future product candidates;

our third-party manufacturers might be unable to timely manufacture our current or future product candidates or produce the quantity and quality required to meet our clinical and commercial needs due to a variety of potential reasons including failure to achieve drug substance or drug product specifications, batch to batch inconsistencies, site or equipment contaminations, failed regulatory inspections, competition for production capacity and availability from other customers;

we may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our current or future product candidates;

our third-party manufacturers could breach or terminate their agreements with us;

our third-party manufacturers might be unable to formulate and manufacture our drugs in the volume and of the quality required to meet our clinical and commercial needs, if any;

our third-party manufacturers may not perform as contractually agreed or may not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our products;

drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and some state agencies in the United States, as well as foreign regulatory authorities, to ensure strict compliance with cGMP regulations and other regulatory requirements. We do not have control over third-party manufacturers’ compliance with these regulations and standards; and

raw materials and components used in the manufacturing process, particularly those for which we have no other source or supplier, may not be available or may not be suitable or acceptable for use due to material or component defects.
Each of these risks could delay or prevent the completion of our preclinical or clinical trials or the approval of any of our current or future product candidates by the FDA or another foreign regulatory authority, result in higher costs or adversely impact commercialization of our current or future product candidates.
 
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Risk Factors
Although our agreements with our CMOs require them to perform according to certain cGMP requirements such as those relating to quality control, quality assurance and qualified personnel, we cannot control the conduct of our CMOs to implement and maintain these standards. If any of our CMOs cannot successfully manufacture material that conforms to our specifications and the regulatory requirements of the FDA, EMA or other comparable foreign authorities, we could be prevented from obtaining regulatory approval for our drug candidates unless and until we engage a substitute CMO that can comply with such requirements, which we may not be able to do. Any such failure by any of our CMOs would significantly impact our ability to develop, obtain regulatory approval for or market our drug candidates, if approved.
If our third-party manufacturers use hazardous and biological materials in a manner that causes injury or violates applicable law, we may be liable for damages.
Although we believe that our manufacturers’ procedures for using, handling, storing, and disposing of hazardous and biological materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury. In the event of an accident, local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations. Further, we could be held liable for damages or penalized with fines, and the liability could exceed our resources. We do not have any insurance for liabilities arising from medical or hazardous materials.
Risks Related to Managing Growth and Employee Matters
We are highly dependent on our key personnel and anticipate hiring new key personnel. If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and retain highly qualified managerial, scientific and medical personnel. We are highly dependent on our management, scientific and medical personnel, including our Chairman, Chief Executive Officer and President, our Chief Scientific and Business Officer, our Chief Development Officer, and our Head of Manufacturing. While we expect to engage in an orderly transition process as we integrate newly appointed officers and managers, we face a variety of risks and uncertainties relating to management transition, including diversion of management attention from business concerns, failure to retain other key personnel or loss of institutional knowledge.
We will need to grow the size of our organization, and we may experience difficulties in managing this growth.
As of October 6, 2021, we had 4 full-time employees. We also contract for various services through consulting and vendor agreements. We intend to hire new employees to conduct our research and development activities in the future. Any delay in hiring such new employees could result in delays in our research and development activities and would harm our business. As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we expect to need additional managerial, operational, sales, marketing, financial and other personnel, as well as additional facilities to expand our operations.
If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, or we are not able to effectively build out new facilities to accommodate this expansion, we may not be able to successfully implement the tasks necessary to further develop and commercialize our current or future product candidates and, accordingly, may not achieve our research, development and commercialization goals.
We will incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to compliance activities and initiatives.
As a public company, we will incur significant legal, accounting, and other expenses that we did not incur as a private company. We will be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, which will require, among other things, that we file with the SEC, annual, quarterly, and
 
40

Risk Factors
current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and the Nasdaq Global Market to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.
Moreover, these rules and regulations will increase our legal and financial compliance costs and make some activities more time-consuming and costly. For example, these rules and regulations make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our Board committees or as executive officers.
The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. As a result, we are required to periodically perform an evaluation of our internal control over financial reporting to allow management to report on the effectiveness of those controls, as required by Section 404 of the Sarbanes-Oxley Act. Additionally, our independent auditors are required to perform a similar evaluation and report on the effectiveness of our internal control over financial reporting. These efforts to comply with Section 404 will require the commitment of significant financial and managerial resources. While we anticipate maintaining the integrity of our internal control over financial reporting and all other aspects of Section 404, we cannot be certain that a material weakness will not be identified when we test the effectiveness of our control systems in the future. If a material weakness is identified, we could be subject to sanctions or investigations by the SEC or other regulatory authorities, which would require additional financial and management resources, costly litigation or a loss of public confidence in our internal control, which could have an adverse effect on the market price of our stock.
Risks Related to Commercial Activities
If any of our current or future product candidates do not achieve broad market acceptance among physicians, patients, healthcare payors and the medical community, the revenues from any such current or future product candidate may be limited.
The use of precision medicines as a potential cancer treatment is a recent development and may not become broadly accepted by physicians, patients, hospitals, cancer treatment centers, and others in the medical community. We cannot predict whether physicians, patients, hospitals, cancer treatment centers, and government agencies or third-party payors will determine that our product is safe, therapeutically effective, and cost effective as compared with competing treatments. If our current or potential future product candidates do not achieve an adequate level of market acceptance, we may not generate significant product revenues and may not become profitable. Factors influencing acceptance of our current or future product candidates in the market, include: the clinical indications for which our product candidates are licensed; whether our product candidates are viewed as a safe and effective treatment; our ability to demonstrate our product’s advantages, including cost advantages, over alternative treatments; the prevalence and severity of any side effects of our products and of other precision medicines; product labeling or product insert requirements of the FDA or other regulatory authorities and limitations or warnings contained in the labeling; the timing of market introduction of our product candidates and competitive products; patient willingness to pay out-of-pocket in the absence of coverage by third-party payors and government authorities; and the effectiveness of our sales and marketing efforts.
If our current or future product candidates are licensed but fail to achieve market acceptance among physicians, patients, hospitals, cancer treatment centers or others in the medical community, we will not be able to generate significant revenue. In addition, although our current or future product candidates may differ in certain ways from other precision medicine approaches, serious adverse events or deaths in other preclinical or clinical trials involving precision medicines, even if not ultimately attributable to our current or future products or product candidates, could result in increased government regulation, unfavorable public perception and publicity, potential regulatory delays in the testing or licensing of our current or future
 
41

Risk Factors
product candidates, stricter labeling requirements for those product candidates that are licensed, and a decrease in demand for any such product candidates.
If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our current or future product candidates.
We face an inherent risk of costly and time-consuming product liability lawsuits as a result of the planned clinical testing of our current or future product candidates and will face an even greater risk if we commercialize any products. For example, we may be sued if our current or future product candidates cause or are perceived to cause injury or are found to be otherwise unsuitable during clinical testing, manufacturing, marketing or sale. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our current or future product candidates. Failure to obtain or retain sufficient product liability insurance at an acceptable cost may prevent or inhibit the commercialization of products we may develop. Although we have clinical trial insurance, our insurance policies have various exclusions, and we may be subject to a claim for which we have no coverage. We may have to pay any amounts awarded by a court or negotiated in a settlement that are not covered by or which exceed our insurance coverage, and we may not have sufficient capital to pay such amounts.
Risks Related to this Offering and Ownership of our Common Stock
We do not know whether an active, liquid and orderly trading market will develop for our common stock or what the market price of our common stock will be and, as a result, it may be difficult for you to sell your shares of our common stock.
Prior to this offering, there was no public trading market for shares of our common stock. Although we intend to list our common stock on the Nasdaq Capital Market, an active trading market for our shares may not develop or be sustained following this offering. The initial public offering price for our common stock will be determined through negotiations with the underwriters, and the negotiated price may not be indicative of the market price of the common stock after the offering. As a result, you may be unable to resell your shares of our common stock at or above the initial public offering price. Further, an inactive market may impair our ability to raise capital by selling shares of our common stock and to enter into strategic partnerships or acquire companies or products using our shares of common stock as consideration.
We do not intend to pay dividends on our common stock, so any returns will be limited to the value of our stock, which may be volatile, and you could lose all or part of your investment.
We plan to retain future earnings for the development, operation, and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to the appreciation of their stock, which may never occur. Further, the trading price of our common stock following this offering is likely to be highly volatile and may be subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume. Broad market and industry factors may negatively affect the market price of our common stock, regardless of our actual operating performance. If the market price of our common stock after this offering does not exceed the initial public offering price, you may not realize any return on your investment in us and may lose some or all of your investment.
If equity research analysts do not publish research or reports about our business or if they publish negative evaluations of or downgrade our common stock, the price of our common stock could decline.
The trading market for our common stock relies in part on the research and reports that equity research analysts publish about us or our business. We do not control these analysts. We may never obtain research coverage by industry or financial analysts. If no or few analysts publish research reports on the Company or if analysts publish negative research reports about the Company, our stock price may significantly decline.
 
42

Risk Factors
If you purchase our common stock in this offering, you will incur immediate and substantial dilution in the book value of your shares.
The initial public offering price will be substantially higher than the net tangible book value per share of our common stock. Investors purchasing common stock in this offering will pay a price per share that substantially exceeds the book value of our tangible assets after subtracting our liabilities.
Raising additional capital may cause dilution to our existing stockholders, restrict our operations, or require us to relinquish rights to our current or future technologies or product candidates.
We may seek additional capital through a combination of public and private equity offerings, debt financings, strategic partnerships and alliances and licensing arrangements. Any equity or equity-related financing may dilute our stockholders may subject us to restrictive covenants and interest costs. If we obtain funding through a strategic collaboration or licensing arrangement, we may be required to relinquish our rights to our current product candidates or any future product candidates that we may develop.
Additional fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our operations. If we are unable to raise additional capital as needed or on acceptable terms, we may be required to delay or discontinue any research, development or commercialization programs and may be unable to expand our operations or otherwise capitalize on our business opportunities. Further, we may be required to seek collaborators for potential product candidates earlier, or on less favorable terms, than might otherwise be desired, or to relinquish or license our rights to potential product candidates in markets where we otherwise would seek to pursue development or commercialization. Any of the above events could significantly harm our business, prospects, financial condition and results of operations and cause the price of our common stock to decline.
Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant influence over matters subject to stockholder approval.
Prior to this offering, our executive officers, directors, and 5% stockholders beneficially owned approximately 77.21% of our voting stock as of October 6, 2021. We anticipate that same group will hold a significant portion of our outstanding voting stock following this offering. Therefore, even after this offering, these stockholders will have the ability to influence us through their ownership position. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders.
We are an emerging growth company and a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our common stock less attractive to investors.
We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act, or JOBS Act, enacted in April 2012. For as long as we continue to be an emerging growth company, we may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including: exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended; being permitted to provide only two years of our audited financial statements and correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; exemption from any Public Company Accounting Oversight Board requirement regarding audit firm rotation or an auditor report supplement providing additional information about the audit and financial statements; reduced disclosure obligations regarding executive compensation; and exemption from the nonbinding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We have elected to take advantage of certain of the reduced reporting obligations. We cannot predict whether investors will find our common stock less attractive if we rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be reduced or more volatile.
 
43

Risk Factors
Provisions in our certificate of incorporation, our bylaws, and Delaware law may discourage, delay, or prevent a change in control of our Company or changes in our management and, as a result, depress the trading price of our stock.
Provisions of our certificate of incorporation, our bylaws and Delaware law may deter unsolicited takeovers and/or delay or prevent a change in control of our Company, including transactions in which our stockholders might otherwise receive a premium for their shares.
In addition, the Delaware General Corporation Law prohibits a publicly held Delaware corporation from engaging in a business combination with an interested stockholder, defined as a person who owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.
The foregoing provisions and anti-takeover measures may limit the price that investors might be willing to pay in the future for shares of our Common Stock and may deter potential acquirers of our Company.
 
44

 
USE OF PROCEEDS
We estimate that the net proceeds to us from the sale of shares of our common stock in this offering will be approximately $      million, based upon the assumed initial public offering price of $      per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. If the underwriters’ option to purchase additional shares is exercised in full, we estimate that the net proceeds to be received by us will be approximately $      million, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, as well as 2.5% of the gross amount of the initial public offering, payable to the UoE in connection with the NXP900 license agreement (see "NXP900 License Agreement" for more information).
A $1.00 increase (decrease) in the assumed initial public offering price of $      per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds that we receive from this offering by approximately $      million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Similarly, an increase (decrease) of 1.0 million in the number of shares offered by us would increase (decrease) the net proceeds that we receive from this offering by approximately $      million, assuming that the assumed initial public offering price remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We do not expect that a change in the initial price to the public or the number of shares by these amounts would have a material effect on the uses of the proceeds from this offering, although it may accelerate the time at which we will need to seek additional capital.
The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our common stock and thereby enable access to the public equity markets for us and our stockholders. We expect to use the net proceeds from this offering to fund the Phase 1/2 development of NXP800, the IND-enabling studies of NXP900, to continue development and sponsored research related to our current product candidates or any future product candidate, hiring of additional personnel, capital expenditures, costs of operating as a public company and other general corporate purposes. We may also use a portion of the net proceeds for acquisitions of, or strategic investments in, complementary businesses, products, services, or technologies. However, we do not have any agreements or commitments to enter into any material acquisitions or investments at this time.
This expected use of net proceeds from this offering represents our intentions based on our current plans and business conditions, which could change in the future as our plans and business conditions evolve. As a result, our management will have broad discretion over the uses of the net proceeds from this offering and investors will be relying on the judgement of our management regarding the application of the net proceeds from this offering.
Predicting the costs necessary to develop a product candidate can be difficult, and we will need substantial additional capital to complete our clinical development of any of our current or future product candidates. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including the progress and costs of our development activities, the status of and results from clinical trials, as well as the status and results from our current and any future collaborations with third parties for our current or future product candidates, and any unforeseen cash needs. Pending the use of the proceeds from this offering as described above, we intend to invest the net proceeds from the offering that are not used as described above in investment-grade, interest-bearing instruments such as money market accounts, certificates of deposit, commercial paper and guaranteed obligations of the U.S. government.
As of June 30, 2021 we had a cash and cash equivalents balance of $7.2 million. In June and July 2021, we raised approximately $15.3 million through the issuance of Preferred Stock, of which $4.0 million was raised in July 2021. In June we paid out $3.5 million as an up-front payment in connection with an exclusive licensing agreement related to our lead product candidate, NXP800. In September 2021, we paid out another
 
45

USE OF PROCEEDS
$3.5 million as an upfront payment in connection with an exclusive license agreement related to our second product candidate, NXP900. We currently intend to use the net proceeds from this offering as follows:

approximately $      million to fund the Phase 1/2 development of NXP800;

approximately $      million for the continued preclinical development and sponsored research related to NXP800 and NXP900; and

the remaining proceeds for in licensing of additional products, hiring of additional personnel, capital expenditures, costs of operating as a public company and other general corporate purposes.
Based on our current plans, we believe our existing cash, together with the net proceeds from this offering, will be sufficient to fund our operations and capital expenditure requirements for the next 24 months.
This expected use of the net proceeds from this offering represents our intentions based upon our current plans and business conditions, which could change in the future as our plans and business conditions evolve. As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the closing of this offering or the amounts that we will actually spend on the uses set forth above. The amounts and timing of our actual expenditures and the extent of clinical development may vary significantly depending on numerous factors, including the progress of our development, the status of and results from preclinical studies or clinical trials we may commence in the future, as well as any collaborations that we may enter into with third parties for our current or future product candidates or strategic opportunities that become available to us, and any unforeseen cash needs. As a result, our management will retain broad discretion over the allocation of the net proceeds from this offering.
Pending our use of proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation instruments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.
 
46

 
DIVIDEND POLICY
We have never declared or paid any cash dividends on our capital stock. We currently intend to retain any future earnings to fund the development and expansion of our business, and therefore we do not anticipate paying cash dividends on our common stock in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and will depend on our results of operations, financial condition, capital requirements, contractual restrictions and other factors deemed relevant by our board of directors.
 
47

 
CAPITALIZATION
The following table sets forth our capitalization as of June 30, 2021:

On an actual basis.

The pro forma balance sheet data gives effect to the preferred stock investment agreement closed in July 2021, in the amount of approximately $4 million and gives effect to the conversion of our Preferred Stock into 128,520 shares of common stock immediately prior to the closing of this offering

The pro forma as adjusted balance sheet data gives further effect to the issuance by us of    shares of our common stock in this offering at an assumed initial public offering price of $     per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information set forth below is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. Each $1.00 increase (decrease) in the assumed initial public offering price of $     per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the as-adjusted amount of each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity, and total capitalization by approximately $     million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase (decrease) of one million shares offered by us at the assumed initial public offering price per share of $     per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the as- adjusted amount of each of cash and cash equivalents, additional paid-in capital, total stockholders’ equity, and total capitalization by approximately $     million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, as well as 2.5% of the gross amount of the initial public offering, payable to the UoE in connection with the NXP900 license agreement (see "NXP900 License Agreement" for more information).
You should read this information in conjunction with our financial statements and the related notes included elsewhere in this prospectus, the sections titled “Selected Financial Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information contained in this prospectus.
As of June 30, 2021
Actual
Pro Forma
Pro Forma As
Adjusted
(Unaudited
in thousands, except share and per share data)
Cash
$ 7,214 $ 11,234
Total liabilities
(389) (389)
Redeemable convertible Preferred stock A, $0.00001 par value – 170,000 shares authorize as of June 30, 2021
As of June 30, 2021 94,752 preferred stock were issued, and no shares issued pro forma and pro forma as adjusted
11,225
Stockholders’ equity:
Common stock, $0.00001 par value – 330,000 shares
authorized as of June 30, 2021 and 115,526 shares issued
and outstanding as of June 30, 2021. 244,046 shares
issued and outstanding Pro forma and        shares
issued Pro Forma As Adjusted
* 2
 
48

CAPITALIZATION
As of June 30, 2021
Actual
Pro Forma
Pro Forma As
Adjusted
(Unaudited
in thousands, except share and per share data)
Additional paid-in capital
1,571 16,814
Notes received for common shares
(*) (*)
Accumulated deficit
(5,971) (5,971)
Total stockholders’ equity
$ (4,400) $ 10,845
Total capitalization
7,214 11,234
*
Represent amount lower than US 1 dollar
During June and July 2021, we entered into an investment agreement with our founders, directors and certain new investors to issue 128,520 preferred A shares (“Preferred Stock”) for a total amount of approximately $15.3 million of which $1.73 million was invested by related parties on the same terms as all investors in the Preferred Stock. Of the $15.3 million raised, $11.3 million was raised in June 2021 and 94,752 Preferred A shares were issued, and $4.0 million was raised in July 2021 and 33,768 Preferred A shares were issued. As of the issuance date of these financial statements, we received the total amount of the investments.
The table above excludes each of the following:
The number of shares of our common stock outstanding after this offering is based on 244,046 shares of our common stock outstanding as of October 6, 2021, after giving effect to the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 128,520 shares of common stock upon the completion of this offering, and excludes:

5,810 shares of common stock issuable upon exercise of options outstanding under our Global Equity Incentive Plan as amended and restated (the “Plan”), at an exercise price of $119.05 per share as of October 6, 2021;

2,587 shares of common stock issuable upon the exercise of warrants under the Plan to purchase common stock at an exercise price of $119.05 per share as of October 6, 2021;

4,963 shares of restricted stock granted to the Company’s three founders on July 27, 2021;

400 shares of restricted stock issued under the Plan on September 1, 2021; and

1,677 shares of common stock to be reserved for future issuance under our 2021 Stock Option and Incentive Plan.
 
49

 
DILUTION
If you invest in our common stock in this offering, your ownership interest will be diluted immediately to the extent of the difference between the initial public offering price per share of our common stock and the as adjusted net tangible book value per share of our common stock after this offering. As of June 30, 2021, our historical net tangible book value was $6.8 million, or $59.08 per share of common stock. Our historical net tangible book value is the amount of our total tangible assets less our total liabilities. Historical net tangible book value per share represents historical net tangible book value divided by 115,526 shares of common stock outstanding as of June 30, 2021.
Our pro forma net tangible book value as of June 30, 2021 was $10.8 million, or $44.25 per share of common stock. Pro forma net tangible book value is the amount of our total tangible assets less our total liabilities. Pro forma net tangible book value per share represents pro forma net tangible book value divided by the total number of shares outstanding as of June 30, 2021, after giving effect to the automatic conversion of the 128,520 Preferred shares to common stock immediately prior to the closing of this offering as if such conversion had occurred on June 30, 2021.
After giving further effect to: the issuance and sale of      shares of our common stock in this offering at an assumed initial public offering price of $     per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, as well as 2.5% of the gross amount of the initial public offering, payable to the UoE in connection with the NXP900 license agreement (see "NXP900 License Agreement" for more information), our pro forma as adjusted net tangible book value as of June 30, 2021 would have been $     million, or $     per share of common stock. This represents an immediate increase in as adjusted net tangible book value of $    per share to existing stockholders and an immediate dilution of $   in as adjusted net tangible book value per share to new investors purchasing common stock in this offering. Dilution per share to new investors is determined by subtracting as- adjusted net tangible book value per share after this offering from the assumed initial public offering price per share paid by new investors. The following table illustrates this dilution on a per share basis. 
Assumed initial public offering price per share
$        
Pro forma net tangible book value per share at June 30, 2021
$ 44.25
Increase in Pro forma net tangible book value per share attributable to this offering
$
Pro forma as adjusted net tangible book value per share after this offering
$
Dilution per share to new investors in this offering
$
Pro forma as adjusted net tangible book value per share after giving further effect to
our issuance and sale of      shares of our common stock in this offering at an
assumed initial public offering price of $ per share, which is the midpoint of the
price range set forth on the cover page of this prospectus, and after deducting
estimated underwriting discounts and commissions and estimated offering expenses
payable by us, our pro forma as adjusted net tangible book value as of June 30,
2021 would have been $     million, or $   per share of common stock
The dilution information discussed above is illustrative only and will change based on the actual initial public offering price and other terms of this offering determined at pricing. A $1.00 increase (decrease) in the assumed initial public offering price of $      per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the as adjusted net tangible book value by $      per share and the dilution to investors purchasing common stock in this offering by $      per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated expenses payable by us. An increase of 1,000,000 shares in the number of shares offered by us in this offering would increase the as adjusted net tangible book value by $      per share and would decrease the dilution per share to new investors purchasing common stock in this offering by $      per share, assuming no change in the
 
50

DILUTION
assumed initial public offering price of $      per share and after deducting estimated underwriting discounts and commissions and estimated expenses payable by us, as well as 2.5% of the gross amount of the initial public offering, payable to the UoE in connection with the NXP900 license agreement (see "NXP900 License Agreement" for more information). A decrease of 1,000,000 shares in the number of shares offered by us, as set forth on the cover page of this prospectus, would decrease our as adjusted net tangible book value per share after this offering by $      and increase the dilution per share to new investors purchasing common stock in this offering by $      , assuming no change in the assumed initial public offering price of $      per share and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
If the underwriters exercise their option to purchase additional shares in full, our as adjusted net tangible book value per share after this offering would be $      , representing an immediate increase in as adjusted net tangible book value per share of $      to existing stockholders and immediate dilution in as adjusted net tangible book value per share of $      to new investors purchasing common stock in this offering, assuming an initial public offering price of $      per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
The following table summarizes, on a as adjusted basis as of June 30, 2021, the total number of shares of common stock purchased from us on an as converted basis, the total consideration paid or to be paid and the average price per share paid, or to be paid by existing stockholders and by new investors in this offering, based on the assumed initial public offering price of $      per share, which is the midpoint of the price range set forth on the cover of this prospectus before deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us:
Shares
Purchased
Total Consideration
Weighted-
Average
Price
Per Share
Number
Percent
Amount
Percent
Existing stockholders
% $      % $     
Investors participating in this offering
      $
Total
100.0% $ 100.0%
A $1.00 increase (decrease) in the assumed initial public offering price of $      per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the total consideration paid by new investors by $      million, would increase (decrease) the total consideration paid by new investors by $      million and, in the case of an increase, would increase the percentage of total consideration paid by new investors by           percentage points and, in the case of a decrease, would decrease the percentage of total consideration paid by new investors by           percentage points, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, as well as 2.5% of the gross amount of the initial public offering, payable to the UoE in connection with the NXP900 license agreement (see "NXP900 License Agreement" for more information). An increase (decrease) of 1,000,000 shares in the number of shares offered by us in this offering would increase (decrease) the total consideration paid by new investors in this offering by $      million, and, in the case of an increase, would increase the percentage of total consideration paid by new investors by           percentage points and, in the case of a decrease, would decrease the percentage of total consideration paid by new investors by                 percentage points, assuming no change in the assumed initial public offering price of $      per share, the midpoint of the price range set forth on the cover page of this prospectus, remains the same, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us.
The table above assumes no exercise of the underwriters’ option to purchase additional shares in this offering. If the underwriters exercise their option to purchase additional shares of our common stock in
 
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DILUTION
full, the number of shares of our common stock held by existing stockholders would be reduced to    % of the total number of shares of our common stock outstanding after this offering.
The foregoing tables and calculations exclude:
The number of shares of our common stock outstanding after this offering is based on 244,046 shares of our common stock outstanding as of October 6, 2021, after giving effect to the automatic conversion of all outstanding shares of our preferred stock into an aggregate of 128,520 shares of common stock upon the completion of this offering, and excludes:

5,810 shares of common stock issuable upon exercise of options outstanding under our Plan, at an exercise price of $119.05 per share as of October 6, 2021;

2,587 shares of common stock issuable upon the exercise of warrants under the Plan to purchase common stock at an exercise price of $119.05 per share as of October 6, 2021;

4,963 shares of restricted stock granted to the Company’s three founders on July 27, 2021;

400 shares of restricted stock issued under the Plan on September 1, 2021; and

1,677 shares of common stock to be reserved for future issuance under our 2021 Stock Option and Incentive Plan.
To the extent that outstanding stock options or warrants are exercised, new stock options are issued, or we issue additional shares of common stock in the future, there will be further dilution to existing stockholders and new investors. In addition, we may choose to raise additional capital because of market conditions or strategic considerations even if we believe that we have sufficient funds for our current or future operating plans. If we raise additional capital through the sale of equity or convertible debt securities, the issuance of these securities could result in further dilution to our stockholders.
 
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with the “Selected Financial Data” section of this prospectus and our financial statements and related notes appearing elsewhere in this prospectus. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this prospectus, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a biopharmaceutical company focused on the development of novel targeted small molecule therapeutics for the treatment of cancer in genetically defined patient populations. Our precision medicine approach translates key scientific insights relating to the oncogenic drivers and pathway addiction of cancer into potent and highly selective anticancer drugs. In addition, we will investigate the relevance of specific mutations and other DNA alterations as a potential patient selection marker and to identify synthetic lethality targets. This work could support our use of a tumor agnostic development strategy wherein we enroll patients based on the cancer’s genetic and molecular features without regard to the type or location of the cancer. Since our inception in 2020, we have devoted substantially all of our efforts and financial resources to organizing and staffing our company, business planning, raising capital, acquiring, discovering product candidates and securing related intellectual property rights and conducting research and development activities for our programs. We do not have any products approved for sale and have not generated any revenue from product sales. We may never be able to develop or commercialize a marketable product. We have not yet successfully completed any pivotal clinical trials, obtained any regulatory approvals, manufactured a commercial-scale drug, or conducted sales and marketing activities.
Results of Operations
Through June 30, 2021, we did not generate any revenue. Our only activities through June 30, 2021 have been organizational and capital raising activities in order to in-license and begin developing NXP800 and NXP900 and preparing for this offering.
For the six months ended June 2021, we incurred research and development expenses of $4.2 million, primarily related to the one-time $3.5 million upfront payment paid out in connection with the exclusive license agreement for our lead product candidate, NXP800 and to $0.6 million of non-cash equity-based expenses. Of note, in September 2021 we paid a one-time upfront payment, also in the amount of $3.5 million, in connection with the exclusive license agreement for our second product candidate, NXP900.
For the six months ended June 30, 2021, our general and administrative expenses were $1.7 million, primarily attributable to $1.0 million of non-cash equity-based expenses and $0.3 paid to certain consultants.
We expect our research and development and general and administrative expenses to increase in the future as we begin the execution of our business plan for our two pipeline product candidates, NXP800 and NXP900.
Liquidity and Capital Resources
As of June 30, 2021, we had $7.2 million of cash and cash equivalents. In June and July 2021, we completed a $15.3 million capital raise through the issuance of Preferred Stock which was paid out in connection with an exclusive licensing agreement related to our lead product candidate, NXP800. Of the $15.3 million raised, $4.0 million was raised in July 2021. In June 2021 we paid an upfront payment of $3.5 million in connection with the NXP800 license agreement. In August 2021 we closed the exclusive license agreement
 
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
related to our second product candidate, NXP900. In September 2021 we paid the upfront payment in connection with this license agreement, also in the amount of $3.5 million. We believe that the proceeds from the June and July 2021 Preferred Stock offering, will enable us to fund our operating expenses and capital expenditure based on our cash flow projections through at least the next 12 months. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. Our future viability beyond that point is dependent on our ability to raise additional capital to finance our operations.
Funding Requirements
We expect our expenses to increase substantially in connection with our ongoing activities, particularly as we advance the preclinical activities and clinical trials of our current or future product candidates, including payments of milestones and sponsored research commitments associated with our license agreements for NXP800 and NXP900. In addition, upon the closing of this offering, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company. The timing and amount of our operating expenditures will depend largely on our ability to:

advance development of our early-stage programs;

acquire additional product candidates;

manufacture, or have manufactured on our behalf, our preclinical and clinical drug material and develop processes for late state and commercial manufacturing;

seek regulatory approvals for any current or future product candidates that successfully complete clinical trials;

achieve milestones in accordance with the license agreements for NXP800 and NXP900;

establish a sales, marketing, medical affairs and distribution infrastructure to commercialize any current or future product candidates for which we may obtain marketing approval and intend to commercialize on our own;

hire additional clinical, quality control and scientific personnel;

expand our operational, financial and management systems and increase personnel, including personnel to support our clinical development, manufacturing and commercialization efforts and our operations as a public company; and

obtain, maintain, expand and protect our intellectual property portfolio.
We anticipate that we will require additional capital as we seek regulatory approval of our product candidates and if we choose to pursue in-licenses or acquisitions of other product candidates. If we receive regulatory approval for our other future product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution, depending on where we choose to commercialize.
Because of the numerous risks and uncertainties associated with research, development and commercialization of biologic product candidates, we are unable to estimate the exact amount of our working capital requirements. Our future funding requirements will depend on and could increase significantly as a result of many factors, including:

the scope, progress, results and costs of researching and developing our current or future product candidates, and conducting preclinical and clinical trials;

the costs, timing and outcome of regulatory review of our current or future product candidates;

the costs, timing and ability to manufacture our current or future product candidates to supply our clinical and preclinical development efforts and our clinical trials;
 
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Management’s Discussion and Analysis of Financial Condition and Results of Operations

the costs of future activities, including product sales, medical affairs, marketing, manufacturing and distribution, for any of our current or future product candidates for which we receive marketing approval;

the costs of manufacturing commercial-grade product and necessary inventory to support commercial launch;

the ability to receive additional non-dilutive funding, including grants from organizations and foundations;

the revenue, if any, received from commercial sale of our products, should any of our current or future product candidates receive marketing approval;

the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining, expanding and enforcing our intellectual property rights and defending intellectual property-related claims;

our ability to establish and maintain collaborations on favorable terms, if at all; and

the extent to which we acquire or in-license other product candidates and technologies.
Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of public or private equity offerings, debt financings, governmental funding, collaborations, strategic partnerships and alliances or marketing, distribution or licensing arrangements with third parties. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest may be materially diluted, and the terms of such securities could include liquidation or other preferences that adversely affect your rights as a common stockholder. Debt financing and preferred equity financing, if available, may involve agreements that include restrictive covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. In addition, debt financing would result in fixed payment obligations.
If we raise additional funds through governmental funding, collaborations, strategic partnerships and alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Critical Accounting Policies and Significant Judgments and Estimates
Our financial statements are prepared in accordance with generally accepted accounting principles in the United States, or GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in more detail in Note 2 to our financial statements appearing elsewhere in this prospectus, we commenced our principal operations in May 2021 and therefore we did not use estimates in the preparation of these financial statements.
Controls and Procedures
We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. We will be required to comply with the internal control requirements of the
 
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
Sarbanes-Oxley Act as of the end of the first full fiscal year after becoming a public company. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the independent registered public accounting firm attestation requirement. Further, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirement. Prior to the closing of this offering, we have not completed an assessment, nor has our independent registered public accounting firm tested our systems, of internal controls.
Off-balance Sheet Arrangements
We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission.
Quantitative and Qualitative Disclosures About Market Risks
This disclosure is not applicable as we are a smaller reporting company.
Emerging Growth Company and Smaller Reporting Company Status
The Jumpstart Our Business Startups Act of 2012 permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. We have elected to not “opt out” of this provision and, as a result, we will adopt new or revised accounting standards at the time private companies adopt the new or revised accounting standard and will do so until such time that we either (i) irrevocably elect to “opt out” of such extended transition period or (ii) no longer qualify as an emerging growth company.
We are also a “smaller reporting company” meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue was less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.
 
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Overview
We are a biopharmaceutical company focused on the development of innovative precision medicines for the treatment of serious unmet medical needs in oncology. Our development strategy utilizes a precision medicine-based approach that translates key scientific insights relating to oncogenic drivers, pathway addiction and other cancer-promoting factors into selective and potent and highly selective anticancer drugs.
A new generation of approved targeted therapies, such as kinase inhibitors, have transformed the treatment of cancer and demonstrated a significant benefit to certain patients with genetically defined tumor types. In turn, improved genetic sequencing has led to the discovery of additional cancer-promoting genetic alterations that were previously unknown, unaddressed, unsuccessfully targeted or overlooked.
We believe that these advancements provide the basis for modern development of targeted therapies that will enable the discovery and development of anticancer treatments based on genetic characterization of tumors rather than tumor histology.
Nuvectis was founded and is led by an experienced management team with extensive drug development expertise. Our three co-founders have significant drug development knowledge and experience, and a demonstrated track record of success including four past FDA approvals of novel medications in both oncologic and non-oncologic indications and additional approvals in Europe and Japan.
The Nuvectis Approach
Our mission is to develop a portfolio of innovative product candidates for the treatment of cancer. We rely on our core competencies of target selection, drug profiling, licensing, and clinical and regulatory execution to build a pipeline of anticancer drugs. We plan to continue to collaborate with best-in-class technology partners that we believe have the capability to discover selective and potent compounds with desirable pharmacologic properties.
We apply our deep understanding of how genetic alterations lead to the development, growth and spread of cancer. This understanding, combined with our knowledge of the underlying unmet clinical needs, informs and enables our development of an effective clinical and regulatory strategy. We believe that our combination of clinical development and preclinical research expertise, could improve the potential for clinical, regulatory, and commercial success.
With our focus on precision medicine, we aim to pharmacologically target oncogenic drivers, such as certain kinases that are mutated, overexpressed, or overactive, in cases where such alterations to the oncogene result in hyperactivation of pro-malignant signaling pathways, non-oncogenic addiction targets, such as support genes required for the survival of cancer cells, as well as synthetic lethality targets. Our approach could enable the use of biomarker-driven patient selection, which could prospectively identify patients that are more likely to benefit from our targeted therapy, a type of cancer treatment that precisely identifies and attacks a specific pathway of cancer cells, thereby potentially increasing the likelihood of a successful treatment outcome.
Moreover, we believe our approach will allow us to potentially improve the time, costs and risks often associated with cancer drug development, and enable us to improve outcomes for patients with cancer.
 
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Figure 6: Nuvectis Precision Medicine Pipeline
[MISSING IMAGE: tm2123577d5-tbl_nuvectis4c.jpg]
Our Leadership Team
Nuvectis was founded in 2020 and is led by a highly qualified management team comprised of industry veterans with extensive drug development experience, as well as proven capabilities to raise the capital necessary to support clinical development. Our three co-founders, Ron Bentsur, Enrique Poradosu, PhD., and Shay Shemesh, have extensive experience and a proven track record of successful drug development including four past FDA approvals of novel medications in both oncologic and non-oncologic indications and additional approvals in Europe and Japan.
Collectively, the three co-founders of Nuvectis held leadership roles in four FDA approvals and launches of novel medications in both oncologic and non-oncologic indication, including three NDAs and one BLA, as well as two approvals in the EU, and one approval in Japan (via a Japanese partner). Our co-founders successfully led the approvals and launches of: Auryxia®, which is used for the treatment of hyperphosphatemia in patients with dialysis-dependent chronic kidney disease (“CKD”) and for the treatment of anemia in patients with non-dialysis-dependent CKD; Jelmyto®, which is used for the treatment of upper tract urothelial carcinoma; and Elzonris®, which is used for the treatment of blastic plasmacytoid dendritic cell neoplasm. Notably, significant regulatory achievements also include obtaining two Breakthrough Therapy Designations in oncology and six Orphan Drug Designations (four in the U.S. and two in the EU) and two Fast Track Designations.
Our principals are:
Ron Bentsur (55), Co-Founder, Chairman, Chief Executive Officer and President of Nuvectis, has 20 years of senior leadership experience in the biotechnology industry. He served as CEO of UroGen Pharma, Inc. (NASDAQ: URGN) from August 2015 until January 2019, and as CEO of Keryx Biopharmaceuticals, Inc. (NASDAQ: KERX, acquired by Akebia Therapeutics) from May 2009 until May 2015. At UroGen and Keryx, Mr. Bentsur led the clinical development, regulatory approvals and the commercial infrastructure buildouts for the US commercial launches of Jelmyto and Auryxia, respectively. Mr. Bentsur also led the establishment of a successful worldwide partnership for an earlier-stage program at UroGen and an ex-US development partnership for Auryxia at Keryx. Mr. Bentsur served as CEO of XTL Biopharmaceuticals, Inc. (NASDAQ: XTLB) from January 2006 until April 2009 and as Investor Relations and CFO of Keryx from October 2000 until January 2006. Mr. Bentsur worked as an investment banker in NYC and Tel Aviv, Israel, from 1994 until 2000. Mr. Bentsur served as a member of the Board of Directors of Stemline Therapeutics, Inc. from 2009 through the approval and launch of Elzonris® and through the subsequent acquisition of the company by Menarini in June 2020, and serves on the Board of Directors of Beyond Air,
 
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Inc. (NASDAQ: XAIR). Mr. Bentsur holds a BA in Economics and Business Administration with distinction from the Hebrew University of Jerusalem, Israel and an MBA (Magna Cum Laude), from New York University’s Stern School of Business.
Enrique Poradosu, PhD (55), Co-Founder, Executive Vice President, Chief Scientific and Business Officer of Nuvectis, has 20 years of senior scientific leadership experience in the biotechnology industry. From 2016 until 2020, he served as SVP, Business and Scientific Strategy at Stemline Therapeutics, Inc. (NASDAQ: STML, acquired by Menarini in June 2020). At Stemline Dr. Poradosu led the licensing and scientific strategy of the company’s pipeline, as well as directly leading strategic planning and operational execution of the early-stage drug development programs. Prior to that, Dr. Poradosu served as VP Business and Scientific Strategy at Keryx Biopharmaceuticals, Inc. (NASDAQ: KERX, acquired by Akebia Therapeutics), from 2003 until 2016. From 1998 until 2003, Dr. Poradosu served as a project manager at a private biomedical incubator. Dr. Poradosu holds a BSc in Chemistry and Biology with distinction from the Hebrew University of Jerusalem, Israel and a PhD in Biochemistry, from the Hebrew University of Jerusalem.
Shay Shemesh (38), Co-Founder, Executive Vice President, Chief Development Officer of Nuvectis, has 14 years of multi-disciplinary experience in drug development. From 2015 until 2020, he served as SVP, Clinical and Regulatory Affairs at Stemline Therapeutics, Inc. (NASDAQ: STML, acquired by Menarini in June 2020) where he led multi-disciplinary development teams in early and late-stage projects. In this role, Mr. Shemesh held responsibilities for the strategic planning and operational execution of the Elzonris® clinical program and Biologics License Application, with the FDA and Marketing Authorization Application with EMA, resulting in the approval of Elzonris™ in both regions for the treatment of blastic plasmacytoid dendritic cell neoplasm, an orphan hematologic malignancy. Prior to that, Mr. Shemesh was a clinical operations lead at Keryx Biopharmaceuticals (NASDAQ: KERX, acquired by Akebia Therapeutics), where he managed the late-stage clinical trials for Auryxia™ for the treatment of anemia in patients with non-dialysis CKD, which led to the approval of Auryxia in this indication in the US and the EU. Mr. Shemesh holds a BSc and MSc in Biotechnology from Bar Ilan University in Israel.
Uri Ben-Or (51), Interim Chief Financial Officer of Nuvectis, has over 20 years of broad experience in corporate finance, accounting, M&A transactions, initial public offerings and operations. He specializes in public life science companies whose securities are traded at the Tel Aviv Stock Exchange and in the U.S. market and serves as the acting Chief Financial Officer of some of them. In the past, he served as an Auditor at PricewaterhouseCoopers. Mr. Ben-Or holds a BA degree in Business from Bar Ilan University in Israel and is a Certified Public Accountant in Israel. Mr. Ben-Or serves Nuvectis Pharma on a consulting basis.
NXP800 — Our Lead Product Candidate
We have licensed exclusive world-wide commercial rights to NXP800, our lead product candidate, which was developed at the world-renowned Institute for Cancer Research (“ICR”) in London, England. The ICR is a pioneer in discovery of new anti-cancer agents with unique mechanisms of action. The ICR’s drug discovery unit has discovered several successful product candidates, the most notable of which is Zytiga, a leading drug for metastatic prostate cancer. Our license agreement with the ICR is subject to certain milestone and royalty payments. For additional information see section “NXP800 License Agreement”.
NXP800 is an inhibitor of the Heat Shock Factor 1 (“HSF1”) pathway. A large body of work has verified the importance of HSF1 to tumorigenesis and progression in a variety of malignancies. Cancer cells actively exploit HSF1 to overcome diverse stresses and promote biological activities crucial for the survival, progression, immune evasion, and metastasis. This utilization of the HSF1 pathway by the cancer cell in order to overcome stress is also referred to as an HSF1 addiction. It was hypothesized that inhibiting the HSF1 pathway would substantially impede the survival of cancer cells. This hypothesis led to the discovery of NXP800.
In preclinical studies, treatment with NXP800 inhibited tumor growth in human xenografts of ovarian cancer. In addition, we identified a gene signature related to a mutation in the AT-Rich Interaction Domain (“ARID1a”) gene that has potential to serve as a biomarker for patient selection in ovarian and other
 
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cancer types. Based on this work, we plan to initially study the potential efficacy of NXP800 in Ovarian Clear Cell Carcinoma (“OCCC”) and endometrioid ovarian carcinoma, and to investigate the use of ARID1a mutations as a potential patient selection marker for additional types of cancer. The genetic screening for the ARID1a mutation is a standard part of the commercially available screening panels being utilized in the clinic for cancer patients.
A comprehensive preclinical data package comprised of pharmacology, pharmacokinetic, and toxicological and other safety studies required as part of an IND Application to the FDA and a CTA to the MHRA for the initiation of a first in human (FIH), Phase 1, clinical study of NXP800 has been completed by the ICR and by third-party certified labs, and we believe that this package is sufficient for this purpose. In preclinical and toxicology studies no meaningful off-target effects were observed when screened against a broad panel of kinases, bromodomains, GPCRs, orphan receptors, and nuclear hormone receptors. We plan to initiate a Phase 1 dose escalation trial for NXP800 in patients with advanced-stage solid tumors in the fourth quarter of 2021, followed by a clinical trial evaluating cohorts of OCCC and endometrioid ovarian cancer patients harboring the ARID1a mutation and possibly cohorts of patients with additional types of solid tumors. Moreover, additional preclinical studies will be conducted by the ICR and other third-party vendors in order to assess the preclinical safety and efficacy of NXP800 in additional solid tumor types.
As described below in more detail, the use of NXP800 to inhibit the HSF1 pathway in the context of ARID1a mutated or altered tumors indicates a possible synthetic lethality treatment modality. Synthetic lethality is a clinically validated approach to treating cancer which arises by the concomitant perturbations (an alteration of function at the molecular level) of two genes or pathways, each of which is nonlethal to the cell alone, but simultaneous deficiencies in both cause cell death. Hence, cancer cells that contain a mutation in one gene of a synthetic lethality pair are susceptible to therapeutic intervention targeting the other gene pair. With an existing mutation in a certain gene, synthetic lethal therapies aim at identifying a lethal target, ranging from oncogenes to tumor suppressors, and have the potential to broaden the strategies of anti-cancer treatments. The first examples of a molecular targeted therapeutic exploiting synthetic lethality are poly adenosine diphosphate-ribose polymerase (“PARP”) inhibitors, which were first approved in 2016. PARP inhibitors are active against cancer cells only when those cells’ tumor suppression genes BRCA1 and BRCA2 are mutated.
Clinical Trial and Regulatory Execution
Our clinical development strategy employs a stepwise approach designed to identify signals of activity early in development. In our exploratory clinical trials, we plan to treat patients whose tumors harbor a specific genetic alteration, the ARID1a mutation. We believe that this patient enrichment approach improves the likelihood of demonstrating clinical benefit and providing meaningful insight into a product candidate’s therapeutic potential.
NXP800 Scientific Background
Cell Stress and Carcinogenesis
Living cells possess different mechanisms that allow them to adapt to stressful factors in their environment. These cellular mechanisms involve alterations in metabolism, as well as in signal transduction, transcription, translation, protein packaging and/or release. The initial cellular response against a harmful factor is aimed at defense. If the damaging signals are too severe and cause irreversible injury, cells activate death signaling pathways. The activation of protective or destructive pathways depends to a large extent on the nature and duration of the stress, as well as the cell type involved. The final fate of the stressed cell depends on the interplay between these responses.
Carcinogenesis is a complex multi-step process involving metabolic and functional changes enabling transformed cells to survive and adapt to the tumor microenvironment. Most cancers are associated with various genetic and epigenetic changes leading to the malfunctioning of critical genes. However, cancer cells also depend on the normal functioning of certain genes. As such, activation of specific cytoprotective mechanisms can support the survival of transformed cells.
 
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HSF1 — A Guardian of the Proteome
One of the main pro-survival responses, a factor promoting the survival of a cell, that protect cancer cells from stress is the transcription factor HSF1, which plays a dominant role in the cellular response to the oncogenic stress imposed on the cancer cell, such as proteotoxic oxidative stress (an imbalance of free radicals and antioxidants resulting from increased metabolic rate of the cancer cell), and acidification of the microenvironment as well as heavy metals such as iron, all of which are relevant to the etiology of our initial targeted indications. A large body of work has verified the importance of HSF1 to tumorigenesis and cancer progression.
HSF1 can also be considered as one of the guardians of the cellular proteome, or the pool of proteins within a cell. It has been found that HSF1 normally regulates a subset of genes involved in the control of cell proliferation, the process that results in an increase of the number of cells and cell cycle progression, and also extends the survival of transformed cells. Consequently, cancer cells may become dependent upon, or addicted to, HSF1. Although HSF1 is neither a tumor suppressor nor a typical oncogene, it affects many aspects of cellular metabolism that are important for the cancer phenotype by modulating signaling pathways associated with growth and proliferation, apoptosis, glucose metabolism, angiogenesis, cell motility, and the response to the proteotoxic stress in the tumor microenvironment (See Figure 7).
Figure 7: HSF1 addiction in cancer
[MISSING IMAGE: tm2123577d1-fc_1fig4clr.jpg]
Legend: HSF1 is actively exploited by cancer cells to overcome diverse stresses and to promote biological activities crucial for cancer survival, progression, immune evasion and metastasis.
Additionally, HSF1’s activity has been found to modulate signaling pathways that are altered through the expression of mutant oncogenic proteins, thus affecting the phenotype of cancer cells. This phenomenon has been referred to as non-oncogenic addiction, based on the observation that cancer cells are more dependent on the chaperoning function of HSPs than normal cells. Thus, the HSF1 pathway is a compelling oncology target, which led to the discovery of the NXP800 strategy.
Discovery and Optimization of NXP800
NXP800 emerged from phenotypic screening for antagonists that could modify the HSF1-mediated heat shock response. In phenotypic screens, small molecules undergo high-throughput screening against intact cells, and discrete phenotypic changes in the cell are measured and quantified. Phenotypic screens are unbiased and have several advantages over screens using recombinant proteins. Hits from a phenotypic screen will, by definition, be cell permeable and have cellular activity, potentially reducing optimization cycles and timelines. The ICR screening led to the identification of a series of bisamides having anti-cancer effects. These compounds were further optimized to demonstrate in vivo efficacy in mouse xenografts, maintaining the potent anti-proliferative activity of the initial lead compounds and while demonstrating an improved pharmacokinetic profile in preclinical studies. Thus, NXP800 was rationally selected as the most suitable candidate of the compounds tested.
 
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Figure 8: NXP800 — Planned Development
[MISSING IMAGE: tm2123577d1-tbl_4fig4clr.jpg]
Source: Nuvectis Pharma
Beyond the initial target indications of OCCC and endometrioid ovarian carcinoma, we believe that NXP800 has the potential to demonstrate anti-tumor activity in several additional tumor types, such as breast, lung, gastrointestinal, hepatocellular, esophageal and others. Preclinical work is currently being conducted to investigate the use of ARID1a mutation as a potential patient selection marker in additional tumor types. This work could support our use of a tumor-agnostic development strategy (see Figure 6) wherein we enroll patients based on the cancer’s genetic and molecular features without regard to the type or location of the cancer.
NXP800 Patient Enrichment Strategies
Using gene expression microarray analysis, we have identified a gene signature that may indicate the sensitivity of specific cancer mutations to NXP800 and has potential as a biomarker for patient enrichment. Tumor samples from seven different ovarian cancer xenograft model studies were split into two groups based on their response to NXP800 treatment (4/7 responsive and 3/7 non-responsive), with probes required to express at least a two-fold differential in the responsive groups. Treatment with NXP800 in the IGROV-1, OVISE, SK-OV-3 and TOV-21G xenografts showed significant anti-tumor effect (as illustrated in Figure 9 showing data for two of these models). These OCCC and endometrioid ovarian cancer models all harbor a mutation in ARID1a. ARID1a is frequently mutated in solid tumors and is associated with aberrant cell cycle and loss of control of proliferation, allowing cancer cells to achieve an advantage, but at the expense of lowered defenses against oncogenic, cellular and environmental stressors such as oxidative stress (an imbalance of free radicals and antioxidants resulting from increased metabolic rate of the cancer cell), heavy metals and chemotherapy. The cancer cells compensate for this exposure utilizing the cell stress response including increased activity of the HSF1 pathway.
Figure 9: Inhibition of OCCC Tumor Growth in Preclinical In Vivo Models Harboring the ARID1a Mutation
[MISSING IMAGE: tm2123577d1-lc_4fig4clr.jpg]
 
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Legend: NXP800 (CCT361814 in the chart) strongly inhibited tumor growth of SKOV3 and Tov-21G OCCC models in vivo
Thus, ARID1a deficiency offers a potential biomarker for precision medicine and patient enrichment strategies in ovarian and other cancers. ARID1a testing is available in commonly conducted using commercially available and academic molecular diagnostic panels.
Mutations and epigenetic downregulation, the reduction at the cellular level of the magnitude or rate of a physiological response or a biochemical process, such as the expression of a gene of ARID1a occur in roughly two thirds of all OCCC patients, approximately 40% of all endometrioid ovarian carcinoma patients, as well as in varying percentages in several additional types of cancers. Consequently, the ARID1a mutation provides the potential as a biomarker for patient enrichment strategies in ovarian and other cancer types. Based on this data, we plan to initially study the potential efficacy of NXP800 in OCCC and endometrioid ovarian carcinoma in patients harboring the ARID1a mutation. ARID1a is also frequently mutated in additional solid tumors (see Table 2).
We hope to become the first company with an approved drug in relapse/refractory OCCC and endometrioid ovarian carcinoma, two unmet medical needs with no approved therapies. Additionally, given the potentially wider role of ARID1a, we believe that NXP800 has substantial potential beyond our initial indications, and we plan to explore numerous development approaches to broaden the market opportunities in a variety of solid tumors.
Table 2: Prevalence of ARID1a mutation and protein loss in solid tumors
Primary Cancer
ARID1a
Mutation
ARID1a Protein
Loss
OCCC
53.8% 64.8%
Endometrioid Ovarian Carcinoma
37.6% 41.8%
Gastric
15.6% 25%
Hepatocellular Carcinoma (HCC)
13.2% 27%
Esophageal
13.3% 11%
Pancreatic Cancer
5.7% 6.7%
Uterine endometrioid carcinoma
N.A. 34.9%
N.A. — Data not available
OCCC and Endometrioid Ovarian Carcinoma: Disease Etiology and HSF1
Clinically, it has been observed that OCCC arises predominantly from ovarian endometriotic cysts, which are characterized by repeated bleeding into the cyst cavity during the menstrual cycle. The content of an endometriotic cyst, consisting of old blood, contains a markedly high concentration of free iron. Free iron is a source of reactive oxygen species (“ROS”) and excess iron is associated with cancer development through the induction of persistent oxidative stress (an imbalance of free radicals and antioxidants resulting from increased metabolic rate of the cancer cell) in several organs. Thus, extensive oxidative stress in the endometriotic cyst may contributes to of the development of OCCC and endometrioid ovarian carcinoma through induction of DNA damage (see Figure 10 below).
 
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Figure 10: Unique microenvironment within endometriotic cysts may lead to ovarian carcinoma
[MISSING IMAGE: tm2123577d1-org_5fig4clr.jpg]
Legend: Microenvironment with especially high concentration of free iron, derived from blood accumulated in the cyst, causes oxidative stress (“ROS”) and leads to DNA damage. Accumulation of DNA damage over the years eventually leads to development of cancer.
Source: Nuvectis Pharma
In parallel to the DNA damage, exposure to free iron can also trigger ferroptosis, a newly identified, iron-dependent, regulated cell death mechanism. As described in Figure 11 below, ovarian cancer cells develop an increased capability to overcome ferroptosis, which in turn promotes cancer cell survival, with the HSF1 pathway playing a major role in this protective mechanism.
ARID1a Enrichment Strategy — Scientific Rationale
Several genes were identified as NXP800 dependent biomarkers, including downregulation, the reduction at the cellular level of the magnitude or rate of a physiological response or a biochemical process, such as the expression of a gene, of known HSF1 target genes, such as HSPB1, which is an important pro-survival factor, a factor promoting the survival of a cell, indicating a direct effect on the HSF1 pathway by NXP800. In addition, NXP800 upregulates CHAC-1, whose unique function is the degradation of GSH, a key metabolite in cancer cell protection from stress (see Figure 11 below).
ARID1a mutations and protein loss are associated with aberrant cell cycle and loss of control of proliferation, allowing cancer cells to achieve an advantage, but at the expense of lowered defenses against oncogenic stress and microenvironment stress. The cancer cells compensate for this exposure including by increased activity of the HSF1 pathway. Thus, by inhibiting the HSF1 pathway and downregulating the GSH levels in cancer cells with the ARID1a mutation, NXP800 tips the balance towards cancer cell death, with the cancer cell no longer able to tolerate the increased metabolic stress, thus achieving a synthetic lethality effect (further discussed in the sections below, see also Figure 12).
ARID1a and Glutathione Metabolism
A novel relationship was recently established between ARID1a deficiency and glutathione (“GSH”) metabolism (see Figure 12), showing that reducing antioxidant GSH metabolism is a weakness of ARID1a. Disruption of the SWI/SNF (SWItch/Sucrose Non-Fermentable) complex, of which ARID1a is a key component, is associated with aberrant cell cycle and loss of control of proliferation, therefore, cancer cells achieve an advantage at a price of lowering their defenses against insults from free iron (which as discussed previously is a key stress factor involved in the etiology of OCCC and endometrioid ovarian carcinoma). Reduction of the metabolic pathway leading to GSH generation can be partially balanced in cancer cells by
 
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an increase in the activity of the HSF1-HSPB1 axis. The discovery of the link between ARID1a deficiency and reduction of the GSH protective pool has important therapeutic implications for the treatment of ARID1a-deficient tumors, which are susceptible to targeting the HSF1 pathway via synthetically lethality whereby GSH levels are further reduced through the activation of the main enzyme responsible for GSH degradation (“CHAC1”).
Figure 11: CHAC1 and HSPB1 are validated NXP800 Biomarkers and are Key Regulators of Ferroptotic Cell Death
[MISSING IMAGE: tm2123577d1-pht_6fig4clr.jpg]
Legend: As the levels of the cystine importer, SLC7A11 are reduced in ARID1a mutations, the cancer cells are increasingly dependent on alternative pathways that are targeted by NXP800 as demonstrated by the validated biomarkers HSPB1 and Chac1
Synthetic Lethality and ARID1a
Synthetic lethality is a clinically validated approach to treating cancer which arises when simultaneous deficiencies in a pair of genes result in cell death. However, if the deficiency exists in only one gene, the cell survives. The first examples of a molecular targeted therapeutic exploiting synthetic lethality are the PARP inhibitors, which were first approved in 2016. PARP inhibitors are active against cancer cells only when those cells’ tumor suppression genes BRCA1 and BRCA2 are mutated PARP inhibitors represent a targeted therapy, or a type of cancer treatment that precisely identifies and attacks a specific pathway of cancer cells, against ovarian and breast tumors harboring the BRCA mutations, FDA approved PARP inhibitors include AstraZeneca and Merck’s Lynparza® and Zejula® from the GlaxoSmithKline unit Tesaro. PARP is a family of proteins involved in essential cellular processes such as DNA repair, genomic stability, and programmed cell death. The synthetic lethality approach represents a way to target lost tumor suppressor genes, which have long evaded drug developers as they cannot be drugged directly. The BRCA mutation is found in approximately 10-15% of the ovarian epithelial cancer, a slightly lower target patient prevalence compared to OCCC and endometrioid ovarian carcinoma combined. In 2017, prior to their additional approval in the maintenance setting in ovarian cancer and in breast cancer, global PARP inhibitors revenue in the heavily pretreated, advanced-stage ovarian cancer setting was reported at $461 million. In 2020, following the label expansion, the global PARP inhibitor market was valued at $2.178 billion.
The preclinical data establishing the link between ARID1a deficiency and the overactivation of the HSF1 pathway as a compensation mechanism in cancer cells suggest these cancer cells may be susceptible to a synthetic lethality approach through NXP800’s inhibition of the HSF1 pathway. Synthetic lethality results from the interaction between two genes that cause cell death when both, as a prerequisite, are inactivate, if only one of the pair genes is inactivated, the cell survives. In cancer cells, a certain genetic lesion which has little effect on cell viability can create a vulnerability that enables the pharmacological inhibition of a
 
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different target to kill the cancer cells whereas normal cells (which lack the genetic lesion) are spared the effect of the drug. In cancer cells, one of these genes can be inactivated epigenetically or via mutation; while the other can be inactivated by a drug.
NXP800’s hypothesized mode of action is that NXP800 reduces the protective factors in the cell that are modified by overactivation of HSP1, with ARID1a gene defective cells being most vulnerable. Thus, NXP800’s mechanism of action is well suited to target OCCC and endometrioid ovarian carcinoma, as well as additional tumor types, with a synthetic lethality strategy aimed at patients with the highly prevalent ARID1a mutation.
We plan to initially evaluate the potential efficacy of NXP800 in OCCC and endometrioid ovarian carcinoma with ARID1a mutations to be investigated as a potential marker for patient enrichment in clinical trials. Further, we believe that NXP800 has the potential to demonstrate anti-tumor activity in several additional tumor types.
ARID1a synthetic lethality mechanistic rationale: Discovery and validation of pharmacodynamic markers
Several genes were identified as NXP800 dependent biomarkers, including known HSF1 target genes, such as ATF3 and HSPB1 (which encodes the HSP27 protein). A clear dose-dependent inhibition of HSP27 expression by NXP800 was observed in vitro and in vivo. In addition, CHAC-1, ASNS and SLC6A9, all acting downstream of the ATF4/ATF3/CHOP arm of the endoplasmic reticulum (“ER”) stress response pathway, were substantially modulated. The protein expression of CHAC1 has also been shown to be induced by NXP800 in SK-OV-3 tumor xenografts. CHAC1’s unique function is the degradation of GSH into 5-oxoproline and the Gly-Cys dipeptide, thus catalytically reducing intracellular GSH levels, which is already affected in ARID1a mutated cells. Thus, by modulating the GSH levels in cancer cells with the ARID1a mutation, NXP800 tips the balance towards cell death, with the cancer cell no longer able to tolerate the increased ROS, achieving the synthetic lethality effect (see Figure 12).
 
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Figure 12. ARID1a and NXP800 Driven Synthetic Lethality
[MISSING IMAGE: tm2123577d1-fc_2fig4c.jpg]
Source: Nuvectis Pharma
The biomarkers we have identified are currently being developed as potential clinical pharmacodynamic markers. It has been confirmed that NXP800 modulates CHAC1, ATF3 and HSPB1 RNA and ATF4 at the protein level in white blood cells from healthy volunteers in a similar manner to that seen in preclinical models, so peripheral blood mononuclear cells (“PBMCs”) will be considered as a normal medium for clinical trial pharmacodynamic monitoring. Assays to measure the RNA and/or protein levels of CHAC1, ATF3, ATF4 and HSPB1 in tumor biopsies and PBMCs or platelet-rich plasma will also be developed for use in clinical trials.
NXP800 appears to work by reducing the levels of protective GSH in cancer cells, especially those with the ARID1a mutation. Cancer cells are “addicted to” elevated GSH levels that they make possible by manipulating the HSF1 pathway. By tipping the balance from cancer cell survival to cancer cell death, NXP800 acts as a precision intervention for patients with cancers having the ARID1a mutations, harnessing the synthetic lethality mode of action. ARID1a mutations and gene silencing occur in approximately two thirds of all OCCC patients, and approximately 40% of all endometrioid ovarian carcinoma patients. Thus, we believe that NXP800’s mechanism of action is well-suited to target OCCC and endometrioid ovarian carcinoma by virtue of a combination of the natural evolution of these cancers in the cyst environment and the synthetic lethality with the highly prevalent ARID1a mutation.
Addressing an Unmet Need in Clear Cell Ovarian Cancer and Advanced-stage Endometrioid Ovarian Carcinoma
We plan to initially investigate NXP800 as treatment for OCCC and endometrioid ovarian carcinoma. NXP800 is precisely targeted for women with these diseases who have either the ARID1a mutation or ARID1a epigenetic loss.
OCCC is highly malignant, difficult to treat, and has a very poor survival rate due to frequent recurrence after surgery and first-line treatment. First-line treatment consists of platinum-based chemotherapy (“PBC”),
 
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for which the reported response rate in relapse/refractory, platinum resistant patients is 1%, demonstrating a clear and dire need for a new treatment option for OCCC. OCCC represents approximately 10% of all ovarian cancer cases in the United States, with an annual incidence of approximately 2,200 patients.
Endometrioid ovarian cancer represents approximately 10% of all diagnosed ovarian cancer cases. If diagnosed as early-stage, endometrioid ovarian tumors can typically be resected. However, if diagnosed at later stages, these tumors have a substantially worse prognosis. Advanced, platinum-refractory, endometrioid cancer in the United States represents approximately 30% of the endometrioid ovarian cancer segment.
OCCC and endometrioid ovarian carcinoma are subtypes of epithelial ovarian carcinoma whose clinical characteristics are distinct from those of high-grade serious ovarian carcinoma. They exhibit a unique biological profile that is markedly different from those of other histologic types. The incidence of OCCC among ovarian cancer patients is higher in East Asia (approximately 25%), including Japan, than in Europe and the United States (approximately 10%) (see Table 3 below).
OCCC has highly malignant characteristics, reflected in its resistance and poor response to conventional chemotherapy. Endometrioid and clear cell variants are postulated to arise from the same cell type. Notwithstanding the initial PBC response in the endometrioid ovarian subset, the progression-free survival at three years for patients diagnosed with stage III/IV is a dismal 20% and for stage III and 0% for stage IV. The dismal response to first line PBC in OCCC represents a clear unmet cancer treatment need.
Table 3: Estimated Annual Incidence of ARID1a Mutated Patients in OCCC and Endometrioid Ovarian Carcinoma in Major Markets
Indication/Major market
Estimated Annual
Incidence
Patients with ARID1a
mutation or protein loss
OCCC/US
2,175 1,410
Endometrioid Ovarian Carcinoma/US
2,175 909
OCCC/EU
3,408 2,210
Endometrioid Ovarian Carcinoma/EU
3,408 1,425
OCCC/Japan
2,500 1,625
Endometrioid Ovarian Carcinoma/Japan
1,000 375
Source: Nuvectis Pharma
We believe that we can become the first company with an approved drug in advanced-stage OCCC and endometrioid ovarian carcinoma. Our plan is to commence a Phase 1 clinical trial of NXP800 in the fourth quarter of 2021.
Market Potential/Addressable Patient Population in Additional Solid Tumor Types
Beyond our initial target indications, we believe that NXP800 has the potential to demonstrate anti-tumor activity in several additional tumor types, such as gastric, hepatocellular, esophageal, urothelial carcinoma and others. In vitro preclinical work is currently being conducted and in vivo preclinical studies are planned at the ICR to investigate the use of ARID1a mutation as a potential patient selection marker in additional tumor types. This work could support our use of a tumor agnostic development strategy wherein we enroll patients based on the cancer’s genetic and molecular features without regard to the type or location of the cancer.
ARID1a mutations are present in a number of other cancers, most notably gastric, hepatocellular, and esophageal cancers. These may be investigated as secondary indications (see Table 4 below).
 
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Table 4: Examples of estimated annual incidence of patients with advanced-stage solid tumors harboring ARID1a mutations
Indication
Estimated Incidence
(US)
Patients with
ARID1a protein loss
Gastric cancer
26,550 6,615
Liver
34,000 9,070
Esophageal
19,260 2,120
Urothelial
75,357 25,621
Uterine endometrioid carcinoma
66,570 26,628
Pancreatic
60,430 4,230
Source: Nuvectis Pharma
Preclinical drug discovery and validation
A comprehensive preclinical data package for NXP800 has been assembled. Preclinical studies of NXP800 conducted were as follows:
Pharmacology studies
The in vivo antitumour activity of NXP800 was evaluated in mice bearing human tumor xenografts (in all studies tumor growth inhibition (TGI) was calculated versus vehicle control (i.e., no active drug) that was administered to a concurrently treated group of mice, p-values were calculated for the weight-based assessments):
Experiments in SKOV-3 xenograft models (ovarian cancer model):

Experiment 1: 10 mice were treated with 35 mg/kg orally once daily for 20 days, resulting in TGI of 75.2% based on tumor volume and 62.7% based on tumor weight (p<0.05); in the same experiment, 10 mice were treated with 70 mg/kg orally once daily on days 0-6, 10,14,19 and 20, resulting in TGI of 71.7% based on tumor volume and 86.6% based on tumor weight (p<0.05) (10 mice were treated in the control group).

Experiment 2: 12 mice were treated with 8.7 mg/kg orally once daily for 33 days, resulting in TGI of 40.5% based on tumor volume and 22.7% based on tumor weight (p<0.05); in the same experiment, 12 mice were treated with 17.5 mg/kg orally once daily resulting in TGI of 45.6% based on tumor volume and 6.6% based on tumor weight (p<0.05); in the same experiment, 12 mice were treated with 35 mg/kg orally once daily on days 0-9, 12, 13 17-20, and 26-33 resulting in TGI of 82.4% based on tumor volume and 72.1% based on tumor weight (p<0.05) (13 mice were treated in the control group).

Experiment 3: 6 mice were treated with 35 mg/kg on days 0-4, 7-11, 14-18, 21-25, 28-32 and 35-39 resulting in TGI of 51.5% based on tumor volume (6 mice were treated in the control group). As some animals were removed from the control group before the end of the experiment, there was no measurable tumour growth inhibition at the end of the study based on weights.

Experiment 4: 12 mice were treated with 12.5mg/kg orally twice per day on days 0-8, 12-16, 19-23 and 26-28, resulting in TGI of 40.2% based on tumor volume and 41.3% based on tumor weight (p<0.05); in the same experiment, 12 mice were treated with 25 mg/kg orally once daily on days 0-8, 12-16, 19-23 and 26-28 resulting in a TGI of 48.7% based on tumor volume and 47.5 based on tumor weight (p<0.05); In the same experiment, 12 mice were treated with 50 mg/kg once every other day on days 2, 4, 6, 8, 12, 14, 16, 19, 23, 26,28 resulting in TGI of 65.9% based on tumor volume and 65.3% based on tumor weight (p<0.05) (12 mice were treated in the control group).

Experiment 5: 2 groups of mice each were treated with 35 mg/kg orally once daily on days 0-4, 7-11, 21-25 28-31, 33 and 34 (group 1 — 10 mice, group 2 — 6 mice), resulting in TGI of 58.7%
 
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based on tumor volume and 57.1% based on tumor weight (p<0.05) in group 1, and 71.3% based on tumor volume and 69.2% based on tumor weight (p<0.05) in group 2 (10 mice were treated in the control group).
Experiment in TOV-21G xenograft model (ovarian cancer model):

12 mice were treated with 35 mg/kg orally once daily on days 0-4, 7-11, 14-18, 21-25, 28-30 resulting in TGI of 73.3% based on tumor volume and 59.1% based on tumor weight (p<0.05) (12 mice were treated in the control group).
Experiment in OVISE xenograft model (ovarian cancer model):

12 mice were treated with 35 mg/kg orally once daily on days 0-4, 7-11, 14-18, 21-25, 28-32, 35-39, 42-46 and 49-51 resulting in TGI of 50.5% based on tumor volume and 46.9% based on tumor weigh (p<0.05) (12 mice were treated in the control group).
Experiment in IGROV-1 xenograft model (ovarian cancer model):

9 mice were treated with 35 mg/kg orally once daily on days 0-2, 4-6, 8, and 11-14, resulting in TGI of 51.3% based on tumor volume and 50.7% based on tumor weight (p<0.05) (9 mice were treated in the control group).
Experiment in PA-1 xenograft model (ovarian cancer model):

10 mice were treated with 35 mg/kg orally once a day on days 0-4, 7-10, 14-18, 21-25 and 28-31, resulting in TGI of 80.6% based on tumor volume and 79.9% based on tumor weight (p<0.05) (10 mice were treated in the control group).
Experiment in WM266.4 xenograft model (melanoma model):

10 mice were treated with 35 mg/kg orally once daily on days 0-17, resulting in TGI of 66.2% based on tumor volume and 62.6% based on tumor weight (p<0.05) (10 mice were treated in the control group).
Experiment in MCF-7 xenograft model (breast cancer model):

12 mice were treated with 35 mg/kg orally once daily on days 0-4, 8-10, 14,16, 20-22, and 27-30, resulting in TGI of 57.5% based on tumor volume and 60.1% based on tumor weight (p<0.05) (12 mice were treated in the control group).
Secondary pharmacodynamics
NXP800 has been screened against several panels for secondary pharmacology, and no hits were found in any of the screens at concentrations that are relevant to the free drug target concentrations of NXP800 associated with efficacy (in mouse models) or toxicity (in rat and dog, the species used in the GLP-toxicology studies).
Safety pharmacology
NXP800 was profiled against the Cerep Safetyscreen 87 at a concentration of 10 µM. Hits (> 50% at 10 µM) in this preliminary screen were then assessed across a range of concentrations in an individual cell-based assay for both agonism and antagonism of the relevant receptors. NXP800 showed no agonism activity with any receptor and antagonist activity with only one receptor with an IC50 of 2.0 µM. A GLP study was performed to evaluate the effects of NXP800 on cardiovascular parameters and body temperature in the dog (two groups of two dogs each) following oral administration, and the No Adverse Effect Level (NOEL), driven by a transient increase in arterial blood pressure, was 3 mg/kg.
Pharmacokinetics
The absorption, distribution, and metabolism properties of NXP800 were characterized, including apparent permeability in Caco-2 cells and transporter interaction, plasma protein binding and blood-to-plasma
 
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partitioning, intrinsic clearance, identification of metabolites (including a proposed metabolic pathway in human) and inhibition of human CYP isoforms. The excretion of NXP800 was characterized post IV or oral dose in rats.
Toxicology
The toxicity of NXP800 was initially assessed in healthy mice. Formal toxicology was then performed in rat and dog. In both rat and dog, non-GLP combined dose range finding and pharmacokinetic (“PK’’) studies were performed prior to the pivotal GLP 28-day repeat dose toxicity studies and included an assessment of recovery and toxicokinetics. All pivotal GLP toxicity studies were conducted at Charles River Laboratories Edinburgh Ltd, UK. The GLP studies were therefore performed in a country that is a member of the OECD Mutual Acceptance of Data program with the OECD Test Guidelines and Principles of GLP.
Rat and dog were selected as the rodent and non-rodent species for toxicity studies of NXP800 based on similarities to humans with regard to the proportion of hydrolysis metabolism. Based on initial PK studies, free drug exposure levels could be achieved following oral dosing at comparable levels to those required to achieve efficacy in mice. In addition, all metabolites found after exposure of human matrices to NXP800 were also found in matrices of one or both toxicity model species, and therefore their toxicity would be assessed in the toxicology studies.
Continuous daily dosing was selected as the initial schedule for NXP800 toxicity studies to facilitate flexibility in clinical administration. In the dog, Cmax-driven emesis limited exposure and the schedule changed to continuous twice daily dosing to increase exposure to NXP800.
Based on the clinical indication (advanced solid tumors) and route of administration (oral) of NXP800, no carcinogenicity, reproductive toxicity or local tolerance studies have been performed at this stage of development. Non GLP mutagenicity studies have been performed. The phototoxicity of NXP800 has also been assessed.
NXP800 Clinical Development Plan
Based on the compelling preclinical data, NXP800 will be investigated clinically in a Phase 1, first-in- human, dose escalation trial in adult patients with advanced-stage solid tumors. The primary objective of the trial is to identify a recommended Phase 2 dose. The endpoints that will be utilized to inform the primary objective include estimation of the rate and severity of adverse events and dose-limiting toxicities in the dose escalation stage, and estimation of clinical activity in the expansion stage of the Phase 1 study. Secondary objectives include characterization of the pharmacokinetic and pharmacodynamic profile of NXP800. Once a recommended dose is established, patients will be enrolled in additional cohorts to determine the clinical activity and further characterize the clinical profile of NXP800. The sample size for the dose escalation portion of the study will be driven by the emerging clinical data and is expected to be between 20-50 subjects. In the expansion stage of the Phase 1 study, we plan to enroll three cohorts of 12 – 15 subjects each. We plan to include OCCC or endometrioid ovarian carcinoma patients with the ARID1a mutation in these cohorts.
We anticipate submitting a CTA with the MHRA in the United Kingdom in the fourth quarter of 2021, to be followed by an IND application with the FDA. We expect to commence the Phase 1 dose-escalation study in the fourth quarter of 2021 in the U.K.
NXP900 Scientific Background
In August 2021 we licensed worldwide commercial rights to NXP900 from the UoE. NXP900 is a preclinical-stage, targeted-therapy, small molecule drug candidate designed to preferentially inhibit the SRC and YES 1 kinases. We expect to start the preclinical IND-enabling (or equivalent) studies for NXP900 in the fourth quarter of 2021. Following the IND-enabling studies, if successfully completed, we plan to submit an
 
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IND with the FDA, or an equivalent submission with a foreign agency, in order to begin a Phase 1 dose- escalation study of NXP900 in solid tumors. Subsequently, upon successful completion of the dose-escalation study, we plan to conduct a clinical trial to investigate NXP900 in solid tumors where the SRC and/or YES1 pathways are overactivated and implicated.
SRC as an anti-cancer target
SRC is aberrantly activated in many cancer types, including solid tumor cancers such as breast, colon, prostate, pancreatic and ovarian cancers, while remaining predominantly inactive in non-cancerous cells. Increased SRC activity is generally associated with late-stage cancers, metastatic potential and resistance to therapies, and correlates with poor clinical prognosis. Signaling pathways activated by SRC include proliferation, cell growth, cell migration and metastasis, and angiogenesis mediated by Phosphatidylinositide 3 Kinase (PI3K), Mitogen-Activated Protein Kinase (MAPK), Signal Transducer and Activator of Transcription 3 (Stat3), Interleukin (IL) 8, and Vascular Endothelial Growth Factor (VEGF) (see Figure 13).
Figure 13: Key oncogenic pathways activated by SRC kinase
[MISSING IMAGE: tm2123577d2-fc_target4clr.jpg]
Legend: Signaling pathways activated by SRC include proliferation, cell growth, cytoskeleton (cell migration and metastasis), and angiogenesis mediated by Phosphatidylinositide 3 Kinase (PI3K), Mitogen-Activated Protein Kinase (MAPK), Signal Transducer and Activator of Transcription 3 (Stat3), Interleukin (IL) 8, and Vascular Endothelial Growth Factor (VEGF)
SRC is a non-receptor tyrosine kinase and a widely studied member of the SRC family kinases (SFKs), which include LYN, FYN, LCK, HCK, FGR, BLK, FRK and YES. The SRC kinase, product of the first cellular proto-oncogene identified, emerged as a potential therapeutic target in the early 1980s. Predominantly inactive in non-cancerous cells, SRC is aberrantly activated in many cancer types, including breast, colon, prostate, pancreatic and ovarian cancers. Increased SRC activity is generally associated with late-stage cancers, metastatic potential and resistance to treatment, and correlates with poor clinical prognosis. Despite the vast amount of evidence gathered over the years and the approval of dasatinib and bosutinib, which act as dual SRC/ABL kinase inhibitors to treat chronic myelogenous leukemia and acute lymphoblastic leukemia, both hematologic (liquid) tumors, to date no SFK inhibitor has been approved for the treatment of SRC-active solid tumor malignancies.
Due to high structural similarities between their active sites, most inhibitors targeting SFK’s, including the approved drugs dasatinib and bosutinib, display equal potency against the nonreceptor tyrosine kinase ABL. While dual inhibition of ABL and SRC can be beneficial in the treatment of hematologic cancers, this polypharmacological profile is not desirable in the treatment of solid tumors, as several studies have found that inhibition of ABL leads to immuno suppressive effects. To date no kinase inhibitor has been approved for the treatment of SRC-active solid tumor malignancies.
 
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NXP900’s Novel Mechanism of Action
SRC pathway activation is regulated by a switch between an inactive and active conformation. The inactive conformation of SRC family kinases is associated with lack of membrane binding, lack of phosphorylation of the activation loop, and characterized by a “closed conformation.” The active “open” conformation allows for the binding of SRC to signaling partners such as PI3K and FAK, thus enabling full activation of the pathway via SRC’s kinase catalytic activity and the scaffolding property.
NXP900 is a targeted-therapy designed to preferentially inhibit the SRC and YES1 kinases. Unlike the approved and clinical-stage SRC kinase inhibitors, NXP900 induces and locks SRC in its native inactive conformation (see Figure 14), by inhibiting both the catalytic (enzymatic) and scaffolding functions, thus preventing phosphorylation and complex formation with its primary partners. NXP900 does not inhibit ABL, as in vivo data indicates no treatment related immunosuppression, potentially avoiding the immunosuppression associated with ABL inhibition. This is a potential advantage in the setting of solid tumors. The existing SRC inhibitor drugs only inhibit the catalytic functions of SRC, still enabling it to bind to its primary partners and remain partially active. Moreover, the existing SRC inhibitor drugs are also potent inhibitors of ABL resulting in immunosuppressive effects.
This unique mechanism of action, which leads to inactivation of the SRC kinase, has resulted in SRC- pathway inhibition in vitro and in vivo (see table 5). In vivo, treatment with NXP900 inhibited primary and metastatic tumor growth in xenograft models of breast cancer and demonstrated on-target pharmacodynamic effects. Therefore, this novel mode of inhibiting SRC by NXP900 could lead to improved treatment of SRC-associated oncologic disorders and provides the potential to treat solid tumors for the first time with a SRC inhibitor.
Gene amplification of the site containing the YES1 gene has been reported in clinical samples in several tumors including lung, head and neck, bladder and esophageal cancers. Furthermore, it has been found that YES1 gene amplification is a key mechanism of resistance to EGFR or HER2 inhibitors. YES1-dependent oncogenic transformation has also been reported, suggesting that YES1 plays a key role in these solid tumors — The transforming ability of YES1 has been demonstrated via several experimental methods, for example down-regulating YES1 by short hairpin RNA (shRNA) significantly inhibited cell growth in several malignancies, including colon carcinoma, rhabdomyosarcoma, and basal-like breast cancer suggesting YES1 may play a key role in these solid tumors.
NXP900 has been shown to inhibit the YES1 kinase in preclinical models, providing an additional target for pharmacological inhibition by NXP900 of a biologically-relevant target in various cancer types, some of which may rely on both the SRC and YES1 pathways for their advantage. There are no selective YES1 inhibitors that are FDA approved or currently in clinical development. We plan to conduct in vivo studies to better understand the effects of YES1 inhibition in solid tumors driven by YES1 overexpression or gene amplification.
Figure 14: Novel mechanism of action compared to other SRC inhibitors
[MISSING IMAGE: tm2123577d2-pht_inhibit4clr.jpg]
 
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Legend: Complete activation of the SRC pathway requires both catalytic activity and scaffolding of its signal transduction partners in its active conformation (middle image).NXP900 locks SRC in its inactive conformation (left image) by inhibiting both the catalytic activity of SRC and its ability to bind to its signal transduction partners.Other SRC inhibitors, including dasatinib, only inhibit the catalytic activity of SRC while locking it in its active conformation (right image) thereby only partially inhibiting the SRC pathway.
NXP900 preclinical proof of concept — In Vitro
NXP900 is active against the catalytic activity of SRC in vitro in subnanomolar concentrations. NXP900 requires concentrations approximately three orders of magnitude (X1000) greater to inhibit ABL, rendering it not an ABL inhibitor (Table 5).
In cells, NXP900 reduces SRC binding to its partner FAK. Notably, the SRC/ABL inhibitor dasatinib (known to bind SRC in its active conformation) induces precisely the opposite effect. These results provide convincing evidence that NXP900 and dasatinib bind and promote different conformations in SRC whereby NXP900 inhibits both SRC kinase catalytic activity and its scaffolding functions. Further, it has been recently reported that SRC inhibitors such as dasatinib are allosteric facilitators of SRC conformational activation, and may actually enhance SRC-FAK complex formation and increase FAK autophosphorylation, leading to activation of signaling via SRC, whereas treatment with NXP900 is not expected to lead to such paradoxical activation.
The kinase inhibitors approved or in clinical development that target SRC activity are examples of non-selective, promiscuous inhibitors targeting many kinases in addition to SRC and its most closely related family members, often resulting in undesirable off-target effects. Preclinically, NXP900 inhibits SRC and YES1 in concentrations of < 0.5 nM as demonstrated in a standard kinase panel (Table 5). In addition, co-crystal structure analysis reveals that NXP900 induces and stabilizes the native inactive conformation of the SRC kinase domain as shown in Figure 14. The absence of SRC inhibitors displaying this mode of binding combined with the benefits of targeting the inactive SRC kinase conformation make this a unique property. which could prove advantageous clinically compared to other SRC inhibitors.
Table 5: NXP900 selectivity in vitro compared to dasatinib (IC50 values calculated in nM)
Kinase
NXP900
Dasatinib
SRC 0.5 0.5
YES 0.5 0.5
c-Abl 479 0.5
c-Kit >104 39
PDGFRa >104 9.9
RET >104 433
NXP900 preclinical proof of concept — In Vivo
NXP900 demonstrated antitumor activity in mouse models of triple negative breast cancer.
NXP900 mediated in vivo antitumor activity in murine triple negative breast cancer models, against primary tumors and bone metastases, regardless of the mouse strain used (Figure 15). In the post-treatment period, mice with an intact immune system were able to control tumor growth beyond the treatment phase, whereas tumor relapse occurs in immunosuppressed mice as soon as the animals were off treatment. Emulating the results of NXP900 in immunosuppressed mice, dasatinib elicits a strong anticancer effect in immunocompetent mice during the treatment phase, but tumor growth accelerates immediately after halting the treatment (Figure 16).
Based on the preclinical data and novel mechanism of action, we believe that NXP900 represents an important drug candidate for the treatment of SRC and YES1 associated oncologic disorders.
 
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Figure 15: In vivo antitumor activity of NXP900 in murine triple negative breast cancer models, against primary tumors and bone metastases
[MISSING IMAGE: tm2123577d2-lc_potent4clr.jpg]
Legend: (d,e) tumor growth inhibition of a MetBo2 breast cancer model in (d) immunocompetent FVB mice and (e) immunocompromised CD-1 mice treated orally daily for 28 d with NXP900 (40 mg/Kg) or vehicle. (f) Tumor volumes at days 28 and 39 in FVB vs. CD1 mice treated with NXP900. (g-i) Metastasis inhibition by NXP900 in a breast cancer bone metastasis model (40 mg/Kg or vehicle). (g) Percentage bioluminescence imaging (BLI) in left and right hind legs. Animals were monitored for 63 d. (h) Comparative analysis of % BLI between groups at day 7. (i) Bioluminescence tomography images of two representative mice from each group at day 7.
 
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Figure 16: NXP900 inhibited tumor growth in an orthotopic model of triple negative breast cancer (TNBC) in immunocompetent animals and a substantial long-term effect after treatment completion.
[MISSING IMAGE: tm2123577d2-lc_tumor4clr.jpg]
Legend: A,B) Comparative analysis of tumor volumes vs dasatinib; C) Kaplan-Meier Survival analysis.
Preclinical Data of NXP900 in Medulloblastoma
Medulloblastoma is a rare brain cancer (with an annual incidence of approximately 500 in the U.S.) that affects mostly pediatric patients. While rare, it is the most common pediatric brain tumor, with most of the incidences among children occurring before the age of five. This disease spreads rapidly, and by the time of diagnosis, as many as 40% of patients carry metastases and have a poor prognosis for survival. Metastatic disease and tumor recurrence are responsible for the lack of improvement in survival rates over the past decades. In addition, survivors frequently face treatment-related adverse effects.
Out of the four identified subtypes, group 4 is the most prevalent biological subtype, comprising approximately 40% of all medulloblastoma patients. Recent studies have identified aberrant ERBB4-SRC signaling pathway as the hallmark of group 4 patients, indicating the SRC kinase as a potential therapeutic target in this most common medulloblastoma subgroup.
In a PK study, NXP900 was shown to cross the blood-brain barrier in mice, in concentrations that exceeded the levels required to inhibit SRC in vitro with NXP900. This data supports the further exploration of NXP900 in the treatment of group 4 medulloblastoma. We plan to conduct additional preclinical testing of NXP900 to better understand the potential therapeutic effect of NXP900 in this indication.
Our Strategy
We have a mission-driven strategy to build a global biopharmaceutical company through the identification, licensing, development, and commercialization of therapeutics to address unmet medical needs in oncology, with an initial focus on OCCC and endometrioid ovarian carcinoma patients. We intend to leverage our core competencies of target selection, drug profiling and clinical and regulatory execution to build a pipeline of product candidates targeting cancers driven by genetic alterations. The key elements driving our business strategy include:
 
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establishing a leadership position in targeted oncology therapeutics, targeting the inhibition of the HSF1 pathway utilizing the ARID1a mutation as a biomarker;

advancing our lead product candidate, NXP800, through clinical development towards regulatory approval in OCCC and endometrioid cancers;

maximizing the therapeutic potential for NXP800 by leveraging preclinical data in additional tumor types harboring the ARID1a mutation, both as a monotherapy and in possibly in combination with other approved therapies;

positioning NXP900 as a differentiated SRC kinase inhibitor with improved therapeutic activity in solid tumors compared to the existing SRC kinase inhibitors;

maximizing the therapeutic potential of NXP900 by generating additional preclinical data to highlight the benefits of YES1 inhibition;

deploying our differentiated and proven business development expertise to further expand our targeted oncology pipeline for patients with unmet medical needs; and

evaluating opportunities to accelerate development timelines and enhance the commercial potential of our programs in collaboration with third parties, including potential ex-U.S. collaboration opportunities.
Intellectual Property
We strive to protect the proprietary technologies that we believe are important to our business, including pursuing, obtaining and maintaining patent protection intended to cover the composition of matter of our current or future product candidates, including NXP800, their methods of use, related technologies and other inventions that are important to our business. In addition to patent protection, we also rely on trade secrets to protect aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection. We also rely on know-how and continuing technological innovation to develop and maintain our proprietary and intellectual property position.
As with other biotechnology companies, our commercial success depends in part upon our ability to: obtain, maintain, enforce, and protect our patent, intellectual property, and other proprietary rights for our current or future product candidates and other commercially important technologies, inventions, improvements, and know-how related to our business; defend and enforce our intellectual property, in particular, any patent rights that we may own or in-license;, prevent others from infringing any patents we may own or in-license; preserve the confidentiality of our trade secrets; and operate without infringing the valid and enforceable intellectual property and proprietary rights of third parties.
Our ability to maintain and solidify our proprietary and intellectual property position for our current or future product candidates and technologies depends on our success in obtaining effective patent claims and enforcing those claims if granted. However, our current patent applications and any patent applications that we may in the future file or license from third parties may not result in the issuance of patents, and any issued patents we may obtain may not guarantee us the right to practice our technology in relation to the commercialization of our products. We also cannot predict the breadth of claims that may be allowed or enforced in any patents we may own or in- license in the future.
The patent positions for biotechnology and pharmaceutical companies like us are generally uncertain and can involve complex legal, scientific, and factual issues. We cannot predict whether the patent applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued patents will provide sufficient proprietary protection from competitors. Any issued patents that we may own or in-license in the future may be challenged, invalidated, circumvented, or have the scope of their claims narrowed. Furthermore, the coverage claimed in a patent application can be significantly reduced before a patent is issued, and its scope can be reinterpreted and even challenged after issuance.
Moreover, many jurisdictions permit third parties to challenge issued patents in administrative proceedings, which may result in further narrowing or even cancellation of patent claims. As a result, we cannot
 
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guarantee that any of our current or future product candidates will be protected or remain protectable by enforceable patents. Moreover, any patents that we hold may be challenged, circumvented or invalidated by third parties. 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 any current or future product candidate we may develop, it is possible that, before any current or future product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby limiting the protection such patent would afford the respective product and any competitive advantage such patent may provide.
As of May 19, 2021, we licensed one patent family covering the composition of matter for NXP800, which includes two issued U.S. patents covering the composition of matter for NXP800, as well as methods of using and making NXP800. Composition of matter patents in this family have also been issued in other major markets, including Australia, Brazil, China, India, Israel, Mexico, Russia, Singapore, the E.U. and Japan. The statutory expiration for patents in this family is October 2034, without taking into account any possible patent term extension, where applicable. We licensed a patent family directed to additional compounds, structurally distinct from NXP800, that modulate HSF1. This patent family is granted in the U.S. and has a statutory expiration of April 2036. We have also licensed a patent family pending in the U.S. and Europe directed to deuterated compounds that modulate HSF1. Any patent that grants from this family would have a statutory expiration of October 2037. We intend to pursue additional patent protection for NXP800 relating to methods of use and related technologies that we consider important to our business.
As of August 26, 2021, we licensed one patent family covering the composition of matter for NXP900, which includes one U.S. patent covering the composition of matter for NXP900, as well as patents and patent applications issued/pending in major markets, including the E.U. and Japan. The statutory expiration for patents in this patent family is April 2036, without taking into account any possible patent term extension, where applicable. We have also licensed a patent family directed to a metabolite of NXP900, filed as a priority application August 2021. Any patent that grants from this family would have a statutory expiration of August 2042.
The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing a non- provisional patent application. In the United States, the term of a patent covering an FDA-approved drug may, in certain cases, be eligible for a patent term extension under the Hatch-Waxman Act as compensation for the loss of patent term during the FDA regulatory review process. The period of extension may be up to five years, but cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval. Only one patent applicable to an approved drug is eligible for extension and only those claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. Similar provisions are available in Europe and in certain other jurisdictions to extend the term of a patent that covers an approved drug. It is possible that issued U.S. patents covering NXP800 and NXP900, may or will be entitled to patent term extensions. If our current or future product candidates receive FDA approval, we intend to apply for patent term extensions, if available, to extend the term of patents that cover any approved product candidates. We also intend to seek patent term extensions in any jurisdictions where they are available; however, there is no guarantee that the applicable authorities, including the FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.
In addition to patent protection, we also rely on trade secret protection for our proprietary information that is not amenable to, or that we do not consider appropriate for, patent protection, including certain aspect of our manufacturing processes. However, trade secrets can be difficult to protect. Although we take steps to protect our proprietary information, including restricting access to our confidential information, as well as entering into non-disclosure and confidentiality agreements with our employees, consultants, independent contractors, advisors, contract manufacturers, CROs, hospitals, independent treatment centers, suppliers,
 
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collaborators and other third parties, such parties may breach such agreements and disclose our proprietary information including our trade secrets, and we may not be able to obtain adequate remedies for such breaches. In addition, third parties may independently develop the same or similar proprietary information or may otherwise gain access to our proprietary information. As a result, we may be unable to meaningfully protect our trade secrets and proprietary information. For more information regarding the risks related to our intellectual property, please see “Risk Factors — Risks Related to Our Intellectual Property.”
NXP800 License Agreement
In May 2021, we entered into a worldwide, exclusive license agreement with the CRT Pioneer Fund (“CRT”) for NXP800 and any of its derivatives (collectively, the “NXP800 Program”). NXP800 is a small molecule product candidate that we believe can be applied to a broad range of cancers.
Prior to Nuvectis, CRT was the commercial owner of the NXP800 Program which it acquired from the ICR. The ICR is a world-renowned research institute focused on the discovery and preclinical development of cancer therapeutics.
Pursuant to the license agreement, we have an obligation to pay success-based milestones and royalties to CRT, as follows:

pre-approval milestone payments of up to approximately $26.5 million including an upfront payment of $3.5 million which has already been paid;

regulatory approval and commercial sales milestones of up $178 million; and

mid-single digit to 10% royalties on a tiered basis on net sales.
In addition, in connection with the licensing agreement, we intend to provide ICR with up to an additional $500,000 research and development support over the next 18 months to conduct additional scientific research and preclinical testing for certain indications that we select in connection with the NXP800 Program. We own an exclusive license to intellectual property rights developed in the collaboration, to research, develop and commercialize products resulting from the collaboration.
License Term
The license will remain in effect in each territory subject to the license and will continue until our obligation to pay royalties in such territory has expired. The royalty term for each licensed product in each country commences with the first commercial sale of the applicable licensed product in the applicable country and ending on the expiration of the last to expire of any patent specified by the license (with the key composition of matters patent expiring October 2034) or the expiration of any extended exclusivity period in the relevant country. CRT may earlier terminate the license if we, or any of our affiliates or sub-licensees, challenge or seek to challenge the validity of any of the licensed patents or upon a change of control in which we become controlled by a Tobacco Party, as such term is defined in the license. Either party may terminate the license upon material breach by the other party, and upon the appointment of a receiver or upon a winding-up order or similar or equivalent action.
NXP900 License Agreement
In August 2021, we entered into a worldwide, exclusive license agreement with the UoE for NXP900 and any of its derivatives (collectively, the “NXP900 Program”). Discovered at the UoE, NXP900 is a targeted therapy, small molecule SRC and YES1 kinase inhibitor product candidate that we believe can be applied to a broad range of cancers.
Pursuant to the license agreement, we have an obligation to pay success-based milestones and royalties to the UoE, as follows:

pre-approval milestone payments of up to approximately $49.5 million including an upfront payment of $3.5 million which has already been paid;
 
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regulatory approval and commercial sales milestones of up $279.5 million;

mid-single digit to 8% royalties on a tiered basis on net sales; and

2.5% of the gross amount of each Nuvectis fundraising, including this offering, up to an aggregate total of $3.0 million.
In addition, in connection with the licensing agreement, we intend to provide the UoE with up to an additional £580,000 in research and development support over the next 18 months to conduct additional scientific research and preclinical testing for certain indications that we select in connection with the NXP900 Program. We own an exclusive license to intellectual property rights developed in the collaboration, to research, develop and commercialize products resulting from the collaboration.
License Term
The royalty term for each licensed product in each country is the period commencing with first commercial sale of the applicable licensed product in the applicable country and ending on the expiration of the last to expire of any patent specified by the license (statutory expiration for the NXP900 patent family is April 2036), or the expiration of any extended exclusivity period in the relevant country. We may terminate the license if we determine that it is not scientifically or commercially viable to research, develop, or commercialize the licensed products which are the subject of the license agreement. UoE may terminate the agreement if we: (i) cease to carry on the business regarding the treatment, prevention and/or diagnosis of human diseases; (ii) discontinue the development of the licensed products which are the subject of the license; (iii) dispose of our assets or business in whole or in material part; (iv) challenge the validity, ownership, or enforceability of the exclusively licensed technology; (v) contest the secret or substantial nature of certain know-how subject to the license; or (vi) breach certain diligence obligations or fail to pay any amount due under the license within a specified time frame. The parties may terminate the NXP900 License Agreement immediately by written notice upon material breach by the other party, if such breach (if capable of cure) is not so cured to the within thirty (30) business days following the notice of breach.
Competition
Our industry is intensely competitive and subject to rapid and significant technological changes. We face competition with respect to our current product candidates, and will face competition with respect to future product candidates, from segments of the pharmaceutical, biotechnology and other related markets. For example, there are several companies that are developing drugs for various types of ovarian cancer, including Immunogen Therapeutics and Constellation Pharma. Of note, in May 2021 Constellation Pharma (acquired by Morphosys, June 2021), has disclosed patient recruitment commencing in May 2021 in a phase 2 expansion cohort for CPI-0209, a small molecule inhibitor of Enhancer of Zeste Homolog 2 (“EZH2”) in patients with relapsed urothelial carcinoma, relapsed OCCC, and relapsed endometrial carcinoma all with known ARID1A mutations.
In the SRC/YES1 space Dasatinib (SPRYCEL®) and bosutinib (BOSULIF®) are multikinase inhibitors that also target Abl and SRC and are approved in Philadelphia chromosome-positive chronic myeloid leukemia (CML) and Philadelphia chromosome-positive acute lymphoblastic leukemia (ALL), both hematological malignancies. These two compounds have been extensively tested in solid tumors demonstrating only minor clinical activity. Sarcatinib is an inhibitor of the SRC/ABl family of kinases. It was originally developed by AstraZeneca for various types of cancer, but discontinued in Phase 2 for lack of sufficient efficacy.
Turning Point Therapeutics (Turning Point) is developing TPX-0022, a MET/SRC/CSF1R inhibitor which is currently being studied in a Phase 1 trial of patients with advanced or metastatic solid tumors harboring MET genetic alterations. The simultaneous inhibition of MET, SRC and CSF1R kinases has been reported by Turning Point as a key component of the target product profile, and Turning Point has described the program as a strategy for the treatment of MET-driven solid tumors, an area that does not overlap with our development strategy.
 
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Turning Point is also developing TPX-0046, a RET kinase inhibitor that can also inhibit other kinases including SRC family members, YES1, ABl, TRK and JAK2. TPX-0046 is being evaluated in an ongoing Phase 1/2 clinical trial for the treatment of advanced solid tumors with RET gene alterations, an area that does not overlap with our development strategy.
Our competitors may obtain regulatory approval of their products more rapidly than us, or may obtain patent protection or other intellectual property rights that limit our ability to develop or commercialize our current or future product candidates. Our competitors may also develop drugs that are more effective, more convenient, more widely used and less costly, or have a better safety profile than our products; and these competitors may also be more successful than us in manufacturing and marketing their products.
In addition, we may need to develop our current or future product candidates in collaboration with diagnostic companies, and we will face competition from other companies in establishing these collaborations. Our competitors will also compete with us in recruiting and retaining qualified scientific, management and commercial personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.
Furthermore, we also face competition more broadly across the market for cost-effective and reimbursable cancer treatments. The most common methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy and targeted drug therapy, or a combination of such methods. 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 current or future product candidates, if any, are approved, may compete with these existing drug and other therapies, to the extent they are ultimately used in combination with, or as an adjunct to, these therapies, our current or future product candidates may not be competitive with them. Some of these drugs are branded and subject to patent protection, and others are available on a generic basis. Insurers and other third-party payors may also encourage the use of generic products or specific branded products. We expect that if any of our current or future product candidates are approved, they will be priced at a significant premium over competitive generic and branded generic products. As a result, obtaining market acceptance of, and gaining significant share of the market for, any of our current or future product candidates that we successfully introduce to the market will pose challenges. In addition, many companies are developing new therapeutics, and we cannot predict what the standard of care will be as our current or future product candidates progress through clinical development.
The acquisition or licensing of pharmaceutical products is also very competitive. If we seek to acquire or license products, we will face substantial competition from a number of more established companies, some of which have acknowledged strategies to license or acquire products and many of which are bigger than us and have more institutional experience and greater cash flows than we have. These more established companies may have competitive advantages over us, as may other emerging companies taking similar or different approaches to product licenses and/or acquisitions. In addition, a number of established research-based pharmaceutical and biotechnology companies may acquire products in late stages of development to augment their internal product lines, which may provide those companies with an even greater competitive advantage.
Manufacturing
We do not have any manufacturing facilities or personnel. We currently rely, and expect to continue to rely, on a third-party manufacturers including a single-manufacturer to make the NXP800 drug substance and a single-manufacturer to make the NXP800 drug product. With respect to NXP900, to date, the drug substance has been manufactured by a non-GMP manufacturer for research purposes at lab scale. We will need to identify a third-party manufacturer(s) for the production of NXP900 drug substance and drug product.
We plan to continue to rely on third party manufacturers for the supply of NXP800 and NXP900, for manufacture of future additional product candidates, for preclinical testing as well as for clinical trials and commercial manufacture if our current or future product candidates receive marketing approval.
 
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Commercialization
Subject to receiving marketing approvals, we expect to commence commercialization activities by building a focused sales and marketing organization in the United States to sell our products. We believe that such an organization will be able to address the community of oncologists who are the key specialists in treating the patient populations for which our current or future product candidates are being developed. Outside the United States, we expect to enter into distribution and other marketing arrangements with third parties for any of our current or future product candidates that obtain marketing approval.
We also plan to build a marketing and sales management organization to create and implement marketing strategies for any products that we market through our own sales organization and to oversee and support our sales force. The responsibilities of the marketing organization would include developing educational initiatives with respect to approved products and establishing relationships with researchers and practitioners in relevant fields of medicine.
Government Regulation
Government regulation of drugs in the United States
The FDA and other regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting of drugs. We, along with our vendors, contract research organizations and contract manufacturers, will be required to navigate the various preclinical, clinical, manufacturing and commercial requirements of the FDA, as well as of any other governing regulatory agency of the countries in which we wish to conduct studies or seek approval of our current or future product candidates. The process of obtaining regulatory approvals of drugs and ensuring subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources.
In the United States, the FDA regulates drug products under the Federal Food, Drug, and Cosmetic Act and its subsequent enactments, its implementing regulations, and other laws. Our product candidates have not been approved by the FDA for marketing in the United States. If we fail to comply with applicable FDA or other requirements at any time with respect to product development, clinical testing, approval or any other legal requirements relating to product manufacture, processing, handling, storage, quality control, safety, marketing, advertising, promotion, packaging, labeling, export, import, distribution, or sale, we may become subject to administrative or judicial sanctions or other legal consequences. These sanctions or consequences could include, among other things, the FDA’s refusal to approve pending applications, the issuance of clinical holds for ongoing studies, suspension or revocation of approved applications, warning or untitled letters, product withdrawals or recalls, product seizures, relabeling or repackaging, total or partial suspensions of manufacturing or distribution, injunctions, fines, civil penalties or criminal prosecution.
The process required by the FDA before a product candidate is approved as a drug for therapeutic indications in the United States generally involves the following:

completion of extensive preclinical studies in accordance with applicable regulations, including studies conducted in accordance with GLP requirements;

submission to the FDA of an IND application;

approval by an institutional review board (“IRB”) or independent ethics committee at each clinical trial site before each trial may be initiated;

performance of adequate and well-controlled clinical trials in accordance with applicable FDA regulations commonly referred to as good clinical practice (“GCP”) requirements and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the investigational product for each proposed indication;
 
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submission of a NDA to FDA for marketing approval that includes sufficient evidence to establish the safety and effectiveness of the proposed drug product for its intended indication, including from results of nonclinical testing and clinical trials;

a decision by the FDA to accept the NDA for review, and initiate a scientific review;

satisfactory completion of one or more FDA pre-approval inspections of the manufacturing facility or facilities where the drug will be produced to assess compliance with current good manufacturing practice (“cGMP”) requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality, and purity;

potential FDA inspection of the clinical trial sites that generated the data supporting the NDA;

payment of user fees for FDA review of the NDA

review of the product candidate by an FDA advisory committee, where appropriate or if applicable; and

FDA review and approval of the NDA.
The testing and approval process requires substantial time, effort, and financial resources, and we cannot be certain that any approvals for our current or future product candidates will be granted on a timely basis, if at all.
Preclinical and clinical trials for drugs
Before testing any drug in humans, a product candidate must undergo rigorous preclinical testing. Preclinical studies include laboratory evaluations of drug chemistry, formulation and stability, as well as in vitro and animal studies to assess safety and address use concerns. The conduct of preclinical studies is subject to federal and state regulations and requirements, including GCP requirements for safety/toxicology studies. The results of the preclinical studies, together with manufacturing information and analytical data must be submitted to the FDA as part of an IND application. An IND application is a request for authorization from the FDA to administer an investigational product to humans and must become effective before clinical trials may begin. Some long-term preclinical testing may continue after the IND is submitted. An IND automatically becomes effective 30 days after receipt by the FDA unless the FDA raises concerns or questions about any portion of the IND application and imposes a clinical hold. In such a case, the IND sponsor and the FDA need to resolve any outstanding concerns before the clinical trial can begin. Submission of an IND application may result in the FDA not allowing clinical trials to commence or not allowing clinical trials to commence on the terms originally specified in the IND application. A separate submission to an existing IND must also be made for each successive clinical trial conducted during product development of a product candidate, and the FDA must grant permission, either explicitly or implicitly by not objecting, before each clinical trial can begin.
The clinical stage of development involves the administration of a product candidate to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCP requirements, which include the requirements that all research subjects provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria and the parameters and criteria to be used in monitoring safety and evaluating efficacy. Each protocol, and any subsequent amendments to the protocol, must be submitted to the FDA as part of the IND application. Furthermore, an IRB representing each institution that is 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 thereafter conduct a continuing review and reapprove the trial at least annually. The IRB must review and approve, among other things, the trial protocol and informed consent information to be provided to clinical trial subjects. An IRB must operate in compliance with FDA regulations.
Information about certain clinical trials, including details of the protocol and eventually study results, also must be submitted within specific timeframes to the National Institutes of Health for public dissemination on
 
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the ClinicalTrials.gov data registry. Information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Sponsors are also obligated to disclose the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed in some cases for up to two years after the date of completion of the trial. Failure to timely register a covered clinical study or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government. The NIH’s Final Rule on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and both NIH and FDA have signaled the government’s willingness to begin enforcing those requirements against non-compliant clinical trial sponsors.
A sponsor who wishes to conduct a clinical trial outside of the United States may obtain FDA authorization to conduct the clinical trial under an IND. If a foreign clinical trial is not conducted under an IND, the sponsor must submit data from the clinical trial to the FDA in support of an NDA. The FDA may accept a well-designed and well-conducted foreign clinical study not conducted under an IND if the study was conducted in accordance with GCP requirements, and the FDA is able to validate the data through an onsite inspection if deemed necessary.
Clinical development of product candidates to support NDAs are typically conducted in three sequential phases, which may overlap:

Phase 1:   The investigational product is initially introduced into healthy human volunteers. These studies are typically designed to test the safety, dosage tolerance, absorption, metabolism, excretion and distribution of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence of efficacy. In the case of some products for severe or life-threatening diseases, such as cancer, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.

Phase 2:   This phase typically involves administration of the investigational product to a limited patient population with a specified disease or condition to determine optimal dosages, dosage tolerance and dosing schedule, to identify possible adverse side effects and safety risks, and to preliminarily evaluate the efficacy of the product candidate for specific targeted diseases.

Phase 3:   This phase typically involves administration of the investigational product to an expanded patient population to provide significant evidence of clinical efficacy and to further test for safety, generally at multiple and often geographically dispersed clinical trial sites. These clinical trials are intended to provide the primary basis for the overall risk/benefit ratio of the investigational product and to enable regulatory decision-making of product approval and physician labeling. These trials may include comparisons with placebo and/or other comparator treatments. The duration of treatment is often extended to mimic the actual use of a product during marketing.
Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA.
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, or SAEs, occur. 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 or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the clinical protocol, GCP, or other IRB requirements or if the drug has been associated with unexpected serious harm to patients.
Concurrent with clinical trials, additional animal studies are often completed and additional information about the chemistry and physical characteristics of the product candidate, including finalization of the
 
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process for manufacturing the drug product in commercial quantities in accordance with cGMP requirements is generated. The manufacturing process must be capable of consistently producing quality batches of the product candidate and manufacturers must develop, among other things, methods for testing the identity, strength, quality and purity of the final drug product. 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.
Marketing Approval in the United States
Assuming successful completion of the required clinical testing, the results of the preclinical studies and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more indications. An NDA is a request for approval to market a new drug for one or more specified indications and must contain proof of the drug’s safety and efficacy. Data may come from company-sponsored clinical trials intended to test the safety and efficacy of a product’s use 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 and efficacy of the investigational product to the satisfaction of the FDA. Under federal law, the fee for the submission of an NDA for which clinical data is substantial (for example, for FY2021 this application fee exceeds $2.8 million), and for which the sponsor of an approved NDA is also subject to an annual program fee, is currently more than $300,000 per program. These fees are typically adjusted annually, but exemptions and waivers may be available under certain circumstances.
The FDA performs a preliminary review of the NDA within 60 days of receipt and informs the sponsor by the 74th day after the FDA’s receipt of the submission whether an application is sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA 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.
If the NDA is filed, the FDA begins an in-depth substantive review of the NDA. The FDA reviews an NDA to determine, among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, quality and purity. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA, for original NDAs, the FDA has ten months from the filing date in which to complete its initial review of a standard application and respond to the applicant, and six months from the filing date for an application with priority review. For all new molecular entity, or NME, NDAs, the ten and six-month time periods run from the filing date; for all other original applications, the ten and six-month time periods run from the submission date. Despite these review goals, it is not uncommon for FDA review of an NDA to extend beyond the goal date. The review process may be extended by the FDA for three additional months to consider new information or in the case of a clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.
Before approving an NDA, the FDA will typically inspect the facility or facilities where the product is manufactured. 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 new drug product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP and other requirements and the integrity of the clinical data submitted to the FDA.
The FDA also may require submission of a Risk Evaluation and Mitigation Strategies (“REMS”) plan to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the drug product. The REMS plan could include medication guides, physician communication plans, assessment plans, and/or elements to assure safe use, such as restricted distribution methods, patient registries, or other risk-minimization tools. The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS. The FDA will not approve an NDA without a REMS, if required.
 
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The FDA may refer any NDA to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, which 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.
Before approving an NDA, the FDA will typically inspect the facility or facilities where the product is manufactured. 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 new drug product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure compliance with GCP and other requirements and the integrity of the clinical data submitted to the FDA.
After evaluating the NDA and all related information, the FDA may issue an approval letter or a complete response letter (“CRL”). An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. A CRL generally contains details on specific conditions that must be met to support approval of the NDA, often requiring additional clinical or preclinical testing in order for the FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. If and when the conditions identified in the CRL have been met to the FDA’s satisfaction, the FDA may issue an approval letter.
If a product receives regulatory approval from the FDA, the approval is limited to the conditions of use (e.g., patient population, indication) described in the application. Further, depending on the specific risk(s) to be addressed, the FDA may limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results of post-marketing studies or surveillance programs. After approval, some 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.
Orphan drug designation and exclusivity
Under the Orphan Drug Act, the FDA may grant orphan designation to a drug intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or if it affects more than 200,000 individuals in the United States, but there is no reasonable expectation that the cost of developing and making the product available in the United States for the disease or condition will be recovered from sales of the product. Orphan designation must be requested before submitting an NDA. Orphan designation does not convey any advantage in or shorten the duration of the regulatory review and approval process, though companies developing orphan products are eligible for certain incentives, including tax credits for qualified clinical testing and waiver of application fees.
If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to a seven-year period of marketing exclusivity during which the FDA may not approve any other applications to market the same therapeutic agent for the same indication, except in limited circumstances. However, competitors may receive approval of different therapeutic product candidates for the indication for which the orphan product has exclusivity or obtain approval for the same therapeutic agent for a different indication than that for which the orphan product has exclusivity. Orphan product exclusivity could block the approval of one of our products for seven years if a competitor obtains approval for the same therapeutic agent for the same indication before we do, unless we are able to demonstrate that our product is superior. If an orphan designated product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan
 
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exclusivity. Further, orphan drug exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation was materially defective or the manufacturer of the approved product is unable to assure sufficient quantities of the product to meet the needs of patients with the rare disease or condition.
Expedited development and review programs
The FDA is authorized to designate certain products for expedited development or 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 include fast track designation, breakthrough therapy designation and priority review designation.
A new drug is eligible for fast track designation if it is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet medical need for such disease or condition. Fast track designation provides increased opportunities for sponsor interactions with the FDA during preclinical and clinical development, in addition to the potential for rolling review of a marketing application once a marketing application is filed, meaning that the agency may review portions of the application before the sponsor submits the complete application, as well as priority review, discussed below. In addition, a new drug may be eligible for breakthrough therapy designation if it is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. Breakthrough therapy designation provides all the features of fast track designation in addition to intensive guidance on an efficient drug development program beginning as early as Phase 1, and FDA organizational commitment to expedited development, including involvement of senior managers and experienced review staff in a cross-disciplinary review, where appropriate. Drugs or biologics designated as breakthrough therapies are also eligible for accelerated approval of their respective marketing applications.
Finally, the FDA may designate a product for priority review if it is a drug or biologic that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. The FDA determines at the time that the marketing application is submitted, on a case-by-case basis, whether the proposed drug represents a significant improvement in treatment, prevention or diagnosis of disease 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 drug reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, or evidence of safety and effectiveness in a new subpopulation. A priority review 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 for a new molecular entity NDA from the date of filing.
Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. Furthermore, fast track designation, breakthrough therapy designation and priority review do not change the standards for approval and may not ultimately expedite the development or approval process.
Pediatric information and pediatric exclusivity
Pediatric exclusivity is a type of non-patent marketing exclusivity available in the United States and, if granted, it provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity or listed patents. 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,
 
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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. The issuance of a written request does not require the sponsor to undertake the described studies.
Post-approval requirements
Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, reporting of adverse experiences with the product, complying with promotion and advertising requirements, which include restrictions on promoting products for unapproved uses or patient populations (known as “off-label use”) and limitations on industry-sponsored scientific and educational activities. Although physicians may prescribe legally available products for 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, including investigation by federal and state authorities. Prescription drug promotional materials must be submitted to the FDA in conjunction with their first use or first publication. Further, if there are any modifications to the drug, including changes in indications, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new NDA or an NDA supplement, which may require the development of additional data or preclinical studies and clinical trials. The FDA may also impose a number of post-approval requirements as a condition of approval of an NDA.
In addition, drug manufacturers and their subcontractors involved in the manufacture and distribution of approved drugs 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, which impose certain procedural and documentation requirements upon us and our contract manufacturers. Failure to comply with statutory and regulatory requirements can subject a manufacturer to possible legal or regulatory action, such as warning letters, suspension of manufacturing, product seizures, injunctions, civil penalties or criminal prosecution.
Once an approval or clearance of a drug is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards 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, requirements for post-market studies or clinical trials to assess new safety risks, or imposition of distribution or other restrictions under a REMS. Other potential consequences include, among other things:

restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product;

fines, warning letters or holds on post-approval clinical trials;

refusal of the FDA to approve applications or supplements to approved applications, or suspension or revocation of product approvals;

product seizure or detention, or refusal to permit the import or export of products;

injunctions or the imposition of civil or criminal penalties; and

consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; or mandated modification of promotional materials and labeling and issuance of corrective information.
 
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Other regulatory matters
Manufacturing, sales, promotion and other activities of product candidates following product approval, where applicable, or commercialization are also subject to regulation by numerous regulatory authorities in the United States in addition to the FDA, which may include CMS, other divisions of the Department of Health and Human Services, the Department of Justice, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency and state and local governments and governmental agencies.
Other healthcare laws
Healthcare providers, physicians, and third-party payors will play a primary role in the recommendation and prescription of any products for which we obtain marketing approval. Our business operations and any current or future arrangements with third-party payors, healthcare providers and physicians may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we develop, market, sell and distribute any drugs for which we obtain marketing approval. In the United States, these laws include, without limitation, state and federal anti-kickback, false claims, physician transparency, and patient data privacy and security laws and regulations. For a description of these risks, please see the section entitled “Risk Factors.”
Insurance coverage and reimbursement
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 healthcare costs. 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. In the United States, the principal decisions about reimbursement for new medicines are typically made by CMS. CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree. No uniform policy of coverage and reimbursement for drug products exists among third-party payors. Therefore, coverage and reimbursement for drug products can differ significantly from payor to payor. The process for determining whether a third-party 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 regulatory approvals. Additionally, companies may also need to provide discounts to purchasers, private health plans or government healthcare programs. 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, our operations and financial condition. Additionally, a third-party 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 healthcare costs 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
 
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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 payor 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 regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.
Current and future healthcare reform legislation
The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our current or future product candidates. For example, in December 2016, the 21st Century Cures Act, or Cures Act, was signed into law. The Cures Act, among other things, was intended to modernize the regulation of drugs and devices and to spur innovation, but its ultimate implementation is uncertain. Legislative proposals continue to be discussed in the U.S. Congress as potentially leading to a future “Cures 2.0” bill that is expected to have bipartisan support. In addition, in August 2017, the FDA Reauthorization Act was signed into law, which reauthorized the FDA’s user fee programs and included additional drug and biological product provisions. The next legislative reauthorization must be completed in 2022, which has the potential to make further changes to FDA authorities or policies pertaining to biopharmaceutical products. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.
In recent years, there has been heightened governmental scrutiny over the manner in which biopharmaceutical manufacturers set prices for their marketed products. Such scrutiny has resulted in several recent U.S. Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of drugs under Medicare, and reform government program reimbursement methodologies for pharmaceutical products. Congress and the executive branch have each indicated that it will continue to seek new legislative and/or administrative measures to control drug costs, making this area subject to ongoing uncertainty.
At the state level in the United States, legislatures have also increasingly passed legislation and implemented regulations designed to control pharmaceutical 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 December 2020, the U.S. Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers, or PBMs, and other members of the healthcare and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.
We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad. We expect that additional federal, state, and foreign 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 limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.
Other U.S. environmental, health and safety laws and regulations
We may be subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. From time to time and in the future, our operations may involve the use of hazardous and flammable materials, including chemicals and biological materials, and may also produce hazardous
 
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waste products. Even if we contract with third parties for the disposal of these materials and waste products, we cannot completely eliminate the risk of contamination or injury resulting from these materials. In the event of contamination or injury resulting from the use or disposal of our hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties for failure to comply with such laws and regulations.
We maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to injuries to our employees, but this insurance may not provide adequate coverage against potential liabilities. However, we do not maintain insurance for environmental liability or toxic tort claims that may be asserted against us. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. Current or future environmental laws and regulations may impair our research, development or production efforts. In addition, failure to comply with these laws and regulations may result in substantial fines, penalties or other sanctions.
Government regulation of drugs outside of the United States
To market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries regarding safety and efficacy and governing, among other things, clinical trials, marketing authorization or identification of an alternate regulatory pathway, manufacturing, commercial sales and distribution of our products. For instance, in the European Economic Area (“EEA”) (comprised of the 28 EU Member States plus Iceland, Liechtenstein and Norway), medicinal products must be authorized for marketing by using either the centralized authorization procedure or national authorization procedures.

Centralized procedure:   If pursuing marketing authorization of a product candidate for a therapeutic indication under the centralized procedure, following the opining of the European Medicines Agency’s (“EMA”) Committee for Medicinal Products for Human Use (“CHMP”) the European Commission issues a single marketing authorization valid across the EEA. The centralized procedure is compulsory for human medicines derived from biotechnology processes or advanced therapy medicinal products (such as gene therapy, somatic cell therapy and tissue engineered products), products that contain a new active substance indicated for the treatment of certain diseases, such as HIV/AIDS, cancer, neurodegenerative disorders, diabetes, autoimmune diseases and other immune dysfunctions, viral diseases, and officially designated orphan medicines. For medicines that do not fall within these categories, an applicant has the option of submitting an application for a centralized marketing authorization to the EMA, as long as the medicine concerned contains a new active substance not yet authorized in the EEA, is a significant therapeutic, scientific or technical innovation, or if its authorization would be in the interest of public health in the EEA. Under the centralized procedure, the maximum timeframe for the evaluation of an MAA (marketing authorization application) by the EMA is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP. Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly from the point of view of therapeutic innovation. The timeframe for the evaluation of an MAA under the accelerated assessment procedure is 150 days, excluding clock stops.

National authorization procedures:   There are also two other possible routes to authorize products for therapeutic indications in several countries, which are available for products that fall outside the scope of the centralized procedure:

Decentralized procedure — Using the decentralized procedure, an applicant may apply for simultaneous authorization in more than one EU country of medicinal products that have not yet been authorized in any EU country and that do not fall within the mandatory scope of the centralized procedure.

Mutual recognition procedure — In the mutual recognition procedure, a medicine is first authorized in one EU Member State, in accordance with the national procedures of that country. Following this, additional marketing authorizations can be sought from other EU
 
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countries in a procedure whereby the countries concerned recognize the validity of the original, national marketing authorization.
In the EEA, new products for therapeutic indications that are authorized for marketing (i.e., reference products) qualify for eight years of data exclusivity and an additional two years of market exclusivity upon marketing authorization. The data exclusivity period prevents generic or biosimilar applicants from relying on the preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization in the EU during a period of eight years from the date on which the reference product was first authorized in the EU. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until ten years have elapsed from the initial authorization of the reference product in the EU. The ten-year market exclusivity period can be extended to a maximum of eleven 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.
The criteria for designating an “orphan medicinal product” in the EEA are similar in principle to those in the United States. In the EEA a medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition; (2) either (a) such condition affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the EU to justify investment; and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to those affected by the condition. Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee waivers and are, upon grant of a marketing authorization, entitled to ten years of market exclusivity for the approved therapeutic indication. During this ten-year orphan market exclusivity period, no marketing authorization application shall be accepted, and no marketing authorization shall be granted for a similar medicinal product for the same indication. An orphan product can also obtain an additional two years of market exclusivity in the EU for pediatric studies. The ten-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity. Additionally, marketing authorization may be granted to a similar product for the same indication at any time if (i) the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior; (ii) the applicant consents to a second orphan medicinal product application; or (iii) the applicant cannot supply enough orphan medicinal product.
Similar to the United States, the various phases of non-clinical and clinical research in the European Union are subject to significant regulatory controls. The Clinical Trials Directive 2001/20/EC, the Directive 2005/28/EC on GCP and the related national implementing provisions of the individual EU Member States govern the system for the approval of clinical trials in the European Union. Under this system, an applicant must obtain prior approval from 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 States and further detailed in applicable guidance documents.
In April 2014, the European Union adopted a new Clinical Trials Regulation (EU) No 536/2014, which is set to replace the Clinical Trials Directive 2001/20/EC and will overhaul the current system of approvals for clinical trials in the European Union. Specifically, the new regulation, which will be directly applicable in all Member States (meaning that no national implementing legislation in each European Union Member State is required), aims at simplifying and streamlining the approval of clinical trials in the European Union. For instance, the new Clinical Trials Regulation provides for a streamlined application procedure via a single entry point and strictly defined deadlines for the assessment of clinical trial applications. It is expected that the
 
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new Clinical Trials Regulation (EU) No 536/2014 will come into effect following confirmation of full functionality of the Clinical Trials Information System, the centralized European Union portal and database for clinical trials foreseen by the new Clinical Trials regulation, through an independent audit, which is currently expected to occur in December 2021.
In addition, the collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in the EEA, including personal health data, is subject to the General Data Protection Regulation 2016/679 (“GDPR”), which became effective on May 25, 2018. The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors. The GDPR also imposes strict rules on the transfer of personal data to countries outside the European Union, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater. The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR. In addition, the GDPR includes restrictions on cross-border data transfers. Compliance with the GDPR will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.
There is significant uncertainty related to the manner in which data protection authorities will seek to enforce compliance with GDPR. Additionally, if we utilize third party distributors, compliance with such foreign governmental regulations would generally be the responsibility of such distributors, who may be independent contractors over whom we have limited control.
Payment and reimbursement
Outside the United States, ensuring coverage and adequate payment for a product also involves challenges. Pricing of prescription pharmaceuticals is subject to government control in many countries. Pricing negotiations with government authorities can extend well beyond the receipt of regulatory approval for a product and may require a clinical trial that compares the cost-effectiveness of a product to other available therapies. The conduct of such a clinical trial could be expensive and result in delays in commercialization.
In the European Union, pricing and reimbursement schemes vary widely from country to country. Some countries provide that products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies or so-called health technology assessments, in order to obtain reimbursement or pricing approval. For example, the European Union provides options for its member states to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. European Union member states may approve a specific price for a product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other member states allow companies to fix their own prices for products, but monitor and control prescription volumes and issue guidance to physicians to limit prescriptions. Recently, many countries in the European Union have increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the European Union. The downward pressure on healthcare costs in general, particularly prescription products, has become intense. As a result, increasingly high barriers are being erected to the entry of new products. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various European Union member states, and parallel trade, i.e., arbitrage between low-priced and high-priced member states, can further reduce prices. There can be no assurance that any
 
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country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any products, if approved in those countries.
Brexit
On June 23, 2016, the United Kingdom (“UK”) held a referendum in which a majority of voters approved an exit from the EU (“Brexit”). After nearly years of negotiation and political and economic uncertainty, the UK’s withdrawal from the EU became effective on January 31, 2020. There was a transitional period, during which EU laws, including pharmaceutical laws, continued to apply in the UK, however this ended on December 31, 2020. The UK and EU have signed an EU-UK trade and cooperation agreement (EU-UK Trade and Cooperation Agreement), which became provisionally applicable on January 1, 2021 and will become formally applicable once ratified by both the UK and the EU. This agreement provides details on how some aspects of the UK and EU’s relationship regarding medicinal products will operate, particularly in relation to GMP, however there are still many uncertainties. Many of the regulations that now apply in the UK following the transition period (including financial laws and regulations, taxes, intellectual property rights, data protection laws, supply chain logistics, environmental, health and safety laws and regulations, medicine approval and regulations, immigration laws and employment laws), will likely be amended in future as the UK determines its new approach, which may result in significant divergence from EU regulations. This lack of clarity on future UK laws and regulations and their interaction with the EU laws and regulations increases our regulatory burden of operating in and doing business with both the UK and the EU.
The long-term effects of Brexit will depend, in part, on how the EU-UK Trade and Cooperation Agreement, and any future agreements signed by the UK and the EU, take effect in practice. Such a withdrawal from the EU is unprecedented, and it is unclear how the restrictions on the UK’s access to the European single market for goods, capital, services and labor within the EU and the wider commercial, legal and regulatory environment, could impact our current and future operations and clinical activities in the UK.
We may also face new regulatory costs and challenges that could have an adverse effect on our operations as a result of Brexit. Since the regulatory framework in the UK covering quality, safety and efficacy of medicinal products, clinical trials, marketing authorization, commercial sales and distribution of medicinal products is derived from EU directives and regulations, Brexit could materially impact the future regulatory regime with respect to the approval of any of our product candidate or future product candidates in the UK. For instance, the UK will now no longer be covered by the centralized procedure for obtaining EEA-wide marketing and manufacturing authorizations from the EMA for medicinal products and a separate process for authorization of drug products will be required in the UK. For a period of two years from January 1, 2021, the MHRA may rely on a decision taken by the European Commission on the approval of a new marketing authorization in the centralized procedure, in order to more quickly grant a UK marketing authorization, however a separate application will still be required. Any delay in obtaining, or an inability to obtain, any regulatory approvals, as a result of Brexit or otherwise, would delay or prevent us from commercializing our current or future product candidates in the UK and could restrict our ability to generate revenue from that market.
We expect that, now the transition period has expired, Brexit could lead to legal uncertainty and potentially divergent national laws and regulations as the UK determines which EU laws to replicate or replace, including those related to the regulation of medicinal products. Any of these effects of Brexit, and others we cannot anticipate, could negatively impact our business and results of operations in the UK.
The uncertainty concerning the UK’s legal, political and economic relationship with the EU following Brexit may also be a source of instability in the international markets, create significant currency fluctuations, and/or otherwise adversely affect trading agreements or similar cross-border co-operation arrangements (whether economic, tax, fiscal, legal, regulatory or otherwise).
Employees and Human Capital Management
As of October 6, 2021, we had 4 full-time employees. Additionally, we have retained and may retain in the future, a number of expert consultants and vendors that help navigate us through and execute the different
 
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aspects of our business. We consider our relationship with our employees to be good and have not experienced any work stoppages, slowdowns or other serious labor problems that have materially impeded our business operations. None of our employees are represented by labor unions or covered by collective bargaining agreements.
Our human capital management objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our new and existing employees. The principal purpose of our equity incentive plan is to attract, retain, and motivate selected employees, consultants, and directors through the granting of stock-based compensation awards and cash-based bonus awards.
Facilities
We believe that our current facilities are adequate for our current needs and that suitable additional or substitute space at commercially reasonable terms will be available as needed to accommodate any future expansion of our operations.
Legal proceedings
From time to time, we may become involved in legal proceedings arising in the ordinary course of our business, the resolution of which we do not anticipate would have a material adverse impact on our financial position, results of operations or cash flows. However, there is no certainty that any such future litigation that may arise would not have a material financial impact on our business. As of the date of this prospectus, we were not a party to any material legal matters or claims.
 
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MANAGEMENT
The following table sets forth information about our directors, executive officers and other senior management as of October 6, 2021.
Executive Officers and Directors
The following table sets forth certain information about our directors and executive officers.
Name
Age
Position
Ron Bentsur
56
Chairman, Chief Executive Officer and President
Enrique Poradosu
55
Executive Vice President, Chief Scientific and Business Officer
Shay Shemesh
38
Executive Vice President, Chief Development Officer
Uri Ben-Or
51
Interim Chief Financial Officer, Consultant
Kenneth Hoberman
56
Director
Matthew Kaplan
54
Director
James F. Oliviero
45
Director
Executive Officers and Senior Management
Ron Bentsur (56), Co-Founder, Chairman, Chief Executive Officer and President of Nuvectis, has 20 years of senior leadership experience in the biotechnology industry. He served as CEO of UroGen Pharma, Inc. (NASDAQ: URGN) from August 2015 until January 2019, and as CEO of Keryx Biopharmaceuticals, Inc. (NASDAQ: KERX, acquired by Akebia Therapeutics) from May 2009 until May 2015. At UroGen and Keryx, Mr. Bentsur led the clinical development, regulatory approvals and the commercial infrastructure buildouts for the US commercial launches of Jelmyto and Auryxia, respectively. Mr. Bentsur also led the establishment of a successful worldwide partnership for an earlier-stage program at UroGen and an ex-US development partnership for Auryxia at Keryx. Mr. Bentsur served as CEO of XTL Biopharmaceuticals, Inc. (NASDAQ: XTLB) from January 2006 until April 2009 and as Investor Relations and CFO of Keryx from October 2000 until January 2006. Mr. Bentsur worked as an investment banker in NYC and Tel Aviv, Israel, from 1994 until 2000. Mr. Bentsur served as a member of the Board of Directors of Stemline Therapeutics, Inc. from 2009 through the approval and launch of Elzonris® and through the subsequent acquisition of the company by Menarini in June 2020, and serves on the Board of Directors of Beyond Air, Inc. (NASDAQ: XAIR). Mr. Bentsur holds a BA in Economics and Business Administration with distinction from the Hebrew University of Jerusalem, Israel and an MBA (Magna Cum Laude), from New York University’s Stern School of Business. Mr. Bentsur has been selected to serve on our Board of Directors based on his years of experience in the biotechnology industry and extensive management experience.
Enrique Poradosu, PhD (55), Co-Founder, Executive Vice President, Chief Scientific and Business Officer of Nuvectis, has 20 years of senior scientific leadership experience in the biotechnology industry. From January 2016 until December 2020, he served as SVP, Business and Scientific Strategy at Stemline Therapeutics, Inc. (NASDAQ: STML, acquired by Menarini in June 2020). At Stemline Dr. Poradosu led the licensing and scientific strategy of the company’s pipeline, as well as directly leading strategic planning and operational execution of the early-stage drug development programs. Prior to that, Dr. Poradosu served as VP Business and Scientific Strategy at Keryx Biopharmaceuticals, Inc. (NASDAQ: KERX), acquired by Akebia Therapeutics (NASDAQ: AKBA)), from 2003 until 2016. From 1998 until 2003, Dr. Poradosu served as a project manager at a private biomedical incubator. Dr. Poradosu holds a BSc in Chemistry and Biology with distinction from the Hebrew University of Jerusalem, Israel and a PhD in Biochemistry, from the Hebrew University of Jerusalem.
 
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