Item 1. Business.
On January 30, 2024, we entered into the Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Tectonic Operating Company, Inc. (previously Tectonic Therapeutic, Inc., referred to as “Legacy Tectonic”) and Alpine Merger Subsidiary, Inc. (“Merger Sub”). Pursuant to the Merger Agreement and the satisfaction of the conditions described in the Merger Agreement, on June 20, 2024, Merger Sub merged with and into Legacy Tectonic, with Legacy Tectonic surviving as our wholly owned subsidiary (the “Merger”). In connection with the completion of the Merger, we changed our name from “AVROBIO, Inc.” to “Tectonic Therapeutic, Inc.,” and our business became primarily the business conducted by Legacy Tectonic. We are now a clinical stage biotechnology company focused on developing novel GPCR-targeted biologics to effectively and safely treat patients with serious medical conditions where there are currently limited or no medical options. The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).
As used in this Annual Report on Form 10-K, the words “Company,” “we,” “our,” “us” and “Tectonic” refer, collectively to Tectonic Therapeutic, Inc. and its consolidated subsidiaries following completion of the Merger. Unless otherwise noted, all references to shares of common stock and per share amounts prior to the Merger in this Annual Report on Form 10-K have been retroactively adjusted to reflect the conversion of shares in the Merger based on an exchange ratio of 0.53441999 (after giving effect to the 1-for-12 reverse stock split effected on June 20, 2024).
Overview
We are a biotechnology company focused on the discovery and development of therapeutic proteins and antibodies that modulate the activity of G protein-coupled receptors (“GPCRs”). The discovery of biologics that can modulate GPCRs has historically been quite challenging. We have developed a proprietary technology platform called GEODe™, with the aim of addressing these challenges and to enable the discovery and development of GPCR-targeted biologic medicines that can modify the course of disease. We focus on areas of significant unmet medical need, often where therapeutic options are poor or nonexistent, and where new medicines have the potential to improve patient quality of life or extend duration of life.
GPCRs are receptor molecules found on the surface of cells that act as sensors for various extracellular stimuli to enable communication between cells and their environment. These molecules regulate diverse aspects of human biology including blood pressure, glucose metabolism, transmission between neurons and immune surveillance. There are over 800 human genes encoding GPCRs, underscoring the extent to which human biology has relied on this molecular system for physiological control. The breadth of effects controlled by GPCRs is illustrated by the fact that greater than 30% of all approved drugs address targets in this class. The vast majority of these drugs, however, are small molecules, and their targets have been largely confined to a few GPCR subfamilies, many of which have a natural ligand that is also a small molecule. We believe there are many situations where biologics could present advantages over small molecules for this class of targets. For instance, when targeting a single member of a highly related family of GPCRs, the selectivity profile achievable with an antibody may be preferable to that of a small molecule in order to optimize the therapeutic efficacy and safety for the patient. Conversely, when multi-modal action is needed to achieve a desired physiological effect, proteins engineered for bispecific function allow for dual target engagement, unlike small molecules that are generally optimized for action on a single target. We are focused on developing biologics to address GPCRs with the goal of capturing such opportunities.
It has been historically difficult to discover therapeutic proteins and antibodies that bind to and modulate the activity of GPCRs because of the low endogenous level of expression of many GPCRs, complex biochemistry and their inherent instability when removed from their natural environment in, the cell membrane. To unlock the potential for biologic therapeutics to broaden the clinical utility of GPCRs, we use our proprietary GEODe™ technology platform in an attempt to overcome the known challenges of GPCR-targeted drug discovery.
The initial components of the platform, its first generation yeast library design and initial yeast selection protocols, were developed at the Harvard Medical School. However, over the last few years we have improved and modified all aspects of the platform including second and third generation library designs, optimized GPCR engineering strategies and yeast selection protocols better suited to GPCR antibody discovery. These modifications have resulted in selection campaigns that have a higher success rate with molecules that have higher affinity and potency and better biophysical properties compared to hits identified from initial antibody selection campaigns. The GEODe™ platform includes components aimed at optimizing the expression, purification, and stabilization of GPCRs and pairs these advances with our protein engineering and structural biology capabilities. While the current libraries, receptor engineering and selection strategies
are producing GPCR-targeted antibodies, we continue to evolve and modify aspects of the platform, which we believe will lead to even better results.
Development and Pipeline Programs
The following table summarizes key information about our development programs and other pipeline programs:
TX000045
Our lead asset TX000045, referred to as TX45, is an Fc-relaxin fusion molecule that activates the RXFP1 receptor, the GPCR target of the hormone, relaxin. Relaxin is an endogenous protein that is expressed at low levels in both men and women. In normal human physiology, relaxin is upregulated during pregnancy where it exerts vasodilatory effects, reduces systemic and pulmonary vascular resistance and increases cardiac output to accommodate the increased demand for oxygen and nutrients from the developing fetus. Relaxin also exerts anti-fibrotic effects on pelvic ligaments to facilitate delivery of the baby. Scientists have hypothesized that these unique dual aspects of relaxin biology may offer therapeutic potential in the treatment of cardiovascular disease. Unfortunately, the development of a viable therapeutic targeting Fc-relaxin has been challenging, primarily because of relaxin’s very short half-life.
We believe TX45’s pharmacological profile, which is the direct result of applying our protein engineering capabilities, has the potential to overcome the limitations that have impeded previous attempts to develop relaxin as a therapeutic protein. We have identified Group 2 pulmonary hypertension (“PH”) in the setting of heart failure with preserved ejection Fraction (“HFpEF”) referred to as PH-HFpEF, as the initial disease in which to interrogate the therapeutic potential of relaxin. We hypothesize that treatment with relaxin could improve hemodynamics through effects on pulmonary and systemic vasodilation, cardiac diastolic dysfunction and potential remodeling in both the pulmonary vessels and the heart which could translate into a clinically meaningful improvement in exercise capacity in these patients. Clinical trials are ongoing to confirm this hypothesis. Despite this belief, our business carries substantial risks, including our limited experience in therapeutic discovery and development, and the risk that the platform may never result in the regulatory approval of a product candidate. See “Risk Factors – Risks Related to the Discovery, Development and Regulatory Approval of Our Product Candidates – We have limited experience in therapeutic discovery and development and our GEODe™ platform may never result in the regulatory approval of a product candidate.”
Group 2 PH is a subtype of PH which develops secondary to left heart disease (“LHD”). This is a common, chronic, life-threatening condition with complex causality for which there are presently no FDA-approved medications. PH-HFpEF is characterized by declining cardiac function, fibrotic tissue remodeling in the heart, and in some patients, fibrotic remodeling in the pulmonary vasculature as well. We have elected to prioritize development of TX45 in PH-HFpEF because of the high unmet medical need in this population and the specific physiological actions of relaxin that suggest that it could address the key pathophysiology of the disease which involves both impairment of left ventricular function and high pressures in the pulmonary arteries, and in some patients, high resistance in the pulmonary vasculature. There are no FDA approved therapies in Group 2 PH including PH-HFpEF. Furthermore, prior clinical data in patients with acute and chronic heart failure treated with a continuous infusion of a short half-life relaxin is supportive of the potential utility of relaxin administration in these patients. Clinical trials are ongoing to evaluate the hypothesis that relaxin could provide efficacy in patients with PH-HFpEF. Beyond PH-HFpEF, we believe there are additional areas where TX45 could provide benefit to patients, such as pulmonary hypertension in the setting of heart failure with reduced ejection fraction (“PH-HFrEF”), as well as with diseases that result in the chronic deterioration of lung and/or kidney function due to vasoconstriction and fibrotic remodeling.
In September 2024, we announced favorable results from a Phase 1a trial evaluating safety, tolerability and pharmacokinetic (“PK”) and pharmacodynamic (“PD”) properties for TX45. In this trial, TX45 was well tolerated after intravenous (IV) doses ranging from 0.3mg/kg to 3 mg/kg and subcutaneous (“SC”) doses ranging from 150mg to 600mg. PK profile revealed dose proportional PK and a half-life of 14-20 days. PD response of TX45 on renal plasma flow (“RPF”) was assessed in each dose cohort at multiple timepoints post dose. From the multiple PK/PD measurements a robust exposure-response Emax model was developed to enable dose selection for our Phase 2 trial. Based on this exposure-response model the doses of 300 mg SC every 2 weeks and 300 mg SC every 4 weeks were chosen for the TX45 Phase 2 trial in PH-HFpEF. Both of these doses are expected to result in steady state trough exposures yielding near maximal (300mg Q4W) or maximal (300mg Q2W) pharmacodynamic effects throughout the dosing interval.
The Phase 1b acute hemodynamic trial (TX000045-002) has completed enrollment in Part A which included 19 patients with PH-HFpEF. Part A included participants with both combined pre- and post-capillary PH (“CpcPH”) and isolated post-capillary PH (“IpcPH”). Top line data of Day1 hemodynamics and accumulated safety revealed that TX45 was well tolerated in this patient population after single IV doses ranging from 0.3mg/kg to 3mg/kg. There have been no serious or severe adverse events, no evidence of an immune related reaction, and no trial discontinuations. Data from an interim analysis of 16 of 19 patients reported in January 2025, showed that IV administration of TX45 resulted in significant improvements in various hemodynamic measures as assessed by right heart catheterization over the first 8 hours post dose. These improvements included the reduction in pulmonary capillary wedge pressure (“PCWP”) in the whole population and a reduction in pulmonary vascular resistance (“PVR”) in patients with CpcPH. Additionally, TX45 produced a reduction in mean pulmonary artery pressure (“mPAP”) and an increase in cardiac output and stroke volume. Part B of this trial is ongoing and plans to evaluate single IV safety and hemodynamic effects of TX45 in patients with PH-HFrEF.
Our Phase 2 clinical trial, which we refer to as the APEX trial (TX000045-003), was initiated early in the fourth quarter of 2024. This trial is a Phase 2, randomized, double-blind, placebo-controlled 24-week trial in PH-HFpEF patients, enriched for patients with CpcPH. In this trial, approximately 180 participants will be randomized in a 1:1:1 manner to either placebo, 300mg every 2 weeks or 300mg every 4 weeks. The primary endpoint for the Phase 2 trial is the change from baseline in PVR and a key secondary endpoint is change from baseline in PCWP. Other secondary endpoints include additional hemodynamic endpoints, change from baseline in 6 minute walk distance and change in symptoms as assessed by the Kansas City Cardiomyopathy Questionnaire (“KCCQ”).
TX2100: GPCR Antagonist for Hereditary Hemorrhagic Telangiectasia (“HHT”)
Our second program, TX2100, is aimed at the discovery and development of a GPCR targeting biotherapeutic as a potential treatment for HHT, the second-most common genetic bleeding disorder. In HHT, abnormal blood vessel formations result in telangiectasias and arterio-venous malformations or “AVMs.” These abnormal vessels are prone to spontaneous and severe bleeding that can be life-threatening. There are no currently approved therapies to treat HHT.
In HHT patients, mutations have been identified in BMP9, BMP10, Endoglin, ALK1 and SMAD4 proteins, all of which are members of a common signaling pathway. Preclinically, knock-out or inhibition of pathway members leads to increased expression of factors that drive angiogenesis and abnormal blood vessel formation that phenocopy the clinical situation. The GPCR target for our HHT program is a receptor for an angiogenic factor known to be upregulated in HHT animal models. By blocking the signaling of this receptor, we anticipate the potential for decreased bleeding resulting
from the abnormal angiogenesis seen in HHT. We selected TX2100 as a development candidate. TX2100 is a VHH-Fc fusion antagonist to an undisclosed GPCR target (“GPCR3”). We intend to start IND enabling toxicology studies in the second quarter of 2025 and expect to initiate a Phase 1 clinical trial for TX2100 in the fourth quarter of 2025 or the first quarter of 2026, subject to the results of IND-enabling studies.
GPCR Modulator Bispecific for Fibrosis
Our third program is aimed at the discovery and development of a potential therapy for fibrotic diseases and employs a bispecific format for the construction of a molecule with a differentiated mechanism of action. The strategy leverages two targets, one with previous human proof of concept and one novel target. Both targets are expressed on overlapping cell types with complementary and nonoverlapping modes of action that simultaneously could enhance the therapeutic potential over modulating either target on its own.
Anticipated Milestones
Over the next few years, we anticipate that several significant milestones could be achieved for our lead asset TX45. This includes presentation of the final data from Part A of our Phase 1b acute hemodynamic trial at a medical meeting later this year, data from Part B of the Phase 1b trial in patients with PH-HFrEF in the second half of 2025, and data from the randomized Phase 2 trial in patients with PH-HFpEF in 2026. A development candidate from our HHT program may also advance into clinical trials in the fourth quarter of 2025 or the first quarter of 2026 and could progress into efficacy trials in patients in late 2026 or early 2027.
Our GEODeTM platform has been optimized over the last three years and is being used to discover biologic drugs targeting GPCRs. We are deploying our GEODeTM platform to generate additional pipeline assets by identifying and optimizing new GPCR targeted biologics that have the potential to address areas of substantial unmet need.
Background on GPCRs
GPCRs are a family of over 800 proteins found on the surface of cells throughout the body that mediate the body’s response to extracellular stimuli by initiating a series of enzymatic reactions on the inside of cells which result in changes to cellular physiology. The diversity, functional specificity and localization to particular cell or tissue types makes GPCRs an especially compelling class of drug targets. Over 30% of approved drugs spanning a wide range of therapeutic areas, including metabolic diseases, inflammation, respiratory diseases, neurology and cancer, exert their action by modulating GPCRs. The targets for these medicines, however, represent only approximately 12% of known GPCRs, leaving at least as many GPCRs that are considered druggable still unexploited. GPCRs have a complex topology which has made both the protein production and purification of GPCRs outside of their natural environment in the cellular lipid membrane, as well as the identification of viable drug candidates to target them, challenging.
Background on Relaxin / RXFP1 Biology
Relaxin is a naturally occurring peptide hormone that was first identified in 1926 in the setting of pregnancy. Relaxin is upregulated during pregnancy to allow for hemodynamic adaptation and increased cardiac output in response to the increased demands to the developing fetus and to allow for loosening of the pelvic ligaments prior to delivery. Relaxin is a member of the insulin superfamily of peptide hormones, and it consists of two peptide chains linked by disulfide bonds. Notably, activation of the RXFP1 receptor by relaxin does not result in internalization of the receptor, as is observed with many other GPCRs, which suggests there would be no receptor desensitization with chronic therapy using a relaxin-based agent.
Relaxin has long been of interest as a therapeutic agent for the treatment of cardiovascular disease because of its natural effects on hemodynamic function. The development of relaxin-based therapeutics, however, has been limited by the short half-life of the native peptide hormone, which necessitated continuous IV or subcutaneous administration to establish and maintain target therapeutic levels of the compound in circulation. Previous efforts to develop recombinant native human relaxin (“serelaxin”) to treat acute heart failure (“AHF”) have shown signs of clinical benefit.
To address the pharmacological limitations of the native relaxin hormone and enable its development beyond AHF, we have engineered a single-chain relaxin-Fc fusion protein, TX45, that features differentiated pharmacokinetic and biophysical properties to enhance key pharmacodynamic properties. TX45 was developed in a subcutaneous formulation with the goal of chronic administration via intermittent subcutaneous injection. As noted above, to interrogate the therapeutic potential of relaxin, we have identified PH-HFpEF as the initial indication with an emphasis on the CpCPH subpopulation and have started to explore its potential in PH-HFrEF as well. We believe that in these settings, treatment with relaxin could improve hemodynamics and promote beneficial remodeling in both the pulmonary vessels and the heart, making it potentially ideally suited for this indication. Clinical trials are ongoing to confirm this hypothesis.
Background on Group 2 PH
PH is a serious, life-threatening condition that affects hundreds of thousands of patients in the United States. In PH, the blood pressure in the pulmonary arteries is increased, exerting severe strain on the right side of the heart, which adapts poorly to the increased pressure. PH gradually causes worsening exercise capacity, shortness of breath and right-sided heart failure which can lead to death.
The World Health Organization has specified 5 different groups of PH. Group 1 PH is also known as pulmonary arterial hypertension (“PAH”) and is caused by spontaneous thickening and fibrosis of the pulmonary arteries and arterioles without underlying significant cardiac, lung parenchymal, or chronic thromboembolic disease. Group 2 PH is due to left-sided heart disease (“PH-LHD”) and is the largest group of PH. Although several Group 1 PH medications have been explored in Group 2 PH, no medications have yet been approved by the FDA for its treatment.
Group 2 PH Pathophysiology and Epidemiology
Group 2 PH is caused by left-sided heart disease, including heart failure with HFpEF, heart failure with reduced ejection fraction (“HFrEF”), and valvular heart disease (“VHD”). Group 2 PH itself consists of two disease subtypes, isolated IpcPH or CpcPH.
In patients with left-sided heart disease, whether HFpEF, HFrEF or VHD, the development of PH is associated with a much worse prognosis. In the various forms of heart failure, the heart fails to pump sufficient blood throughout the body to meet the metabolic demands of the individual. To compensate for inadequate cardiac output, the kidneys retain excess fluid to help increase the filling of the heart (“priming the pump”) during the relaxation phase of the cardiac cycle. This attempt to increase the filling of the heart leads to increased pressure during the relaxation phase. PH can develop in this setting when the pressure is transmitted backwards from the left atrium of the heart into the pulmonary veins and pulmonary arteries. This passive backflow of high pressure leads initially to post-capillary hypertension. These patients have a subtype of Group 2 PH called isolated post-capillary pulmonary hypertension (IpcPH). Over time this increased pressure can lead to the thickening and fibrosis of the pulmonary arteries and arterioles resulting in disease of the precapillary vasculature of the lung and this is demonstrated by increased PVR. When Group 2 PH results in both increased pulmonary artery pressures from the passive backflow of pressure from the left atrium along with intrinsic changes, such as thickening, fibrosis, and narrowing of the lumen of the pulmonary arteries, it is called Combined pre-and post-capillary Pulmonary Hypertension (CpcPH). To differentiate patients with IpcPH and CpcPH, a right heart catheterization is performed. Patients with elevated PVR, elevated pulmonary artery pressure (“PAP”) and an elevated Pulmonary Capillary Wedge Pressure (“PCWP”) have CpcPH, while those with just elevated PAP and PCWP and normal PVR have IpcPH. PH places a great strain on the right ventricle which is unable to compensate for this increased workload. Eventually, PH causes the right ventricle to dilate and fail, ultimately leading to death.
There are an estimated 7.3 million patients with heart failure in the United States, with HFpEF and HFrEF representing approximately 50% each of heart failure cases. We estimate the combined Group 2 PH population with HFpEF or HFmrEF (Left Ventricular Ejection Fraction between 40-50%) who are NYHA Class II or III is approximately 1.4 million and the prevalences of IpcPH of approximately 1 million and CpcPH of approximately 0.4 million using a PVR cutoff of >3 Wood units. We estimate the combined Group 2 PH population, class II and III patients, with HFrEF (LVEF<40%) at approximately 1.1 million and the prevalences of IpcPH of approximately 0.8 million and CpcPH of approximately 0.3 million using a PVR cutoff of >3 Wood units.
Pathophysiology of PH-HFpEF and Therapeutic Potential of Relaxin
Patients suffering from CpcPH typically face worse outcomes than those with IpcPH (23% survival at five years vs. 40%-50%, respectively). Optimal treatment of heart failure may improve IpcPH to some extent. However, because of the specific pulmonary vascular pathology in CpcPH, treatment of heart failure alone is often insufficient to have a meaningful impact on this form of the disease.
Several of the drugs used to treat pulmonary arterial hypertension (PAH, Group 1 PH) failed to demonstrate benefits in Group 2 PH-HFpEF. Most of these agents act as vasodilators in the lung, thereby increasing blood flow to the left side of the heart. However, pulmonary vasodilators have limited effect on left sided heart function especially diastolic function, or systemic circulation, and therefore, do not increase the ability of the left side of the heart to pump blood. This could worsen heart failure without improving exercise function. Relaxin’s hemodynamic effects are mediated both by inhibition of endothelin-1 as well as activation of the nitric oxide signaling pathway. Relaxin also serves as a lusitropic agent via inhibition of SERCA2 in cardiomyocytes, which enables the heart to actively relax and fill adequately during diastole. In addition, relaxin exerts anti-fibrotic and anti-inflammatory effects via activation of metalloproteinases, inhibition of the TGF-beta pathway and inhibition of IL-1beta and IL-6.
Our support of TX45 is based upon our hypothesis that relaxin’s activities, through its pulmonary vasodilatory, remodeling and anti-fibrotic effects, may reverse the deleterious changes in the pulmonary vasculature present in CpcPH. Furthermore, relaxin’s pulmonary and systemic vasodilatory activity could unload the left ventricle, while relaxin’s anti-fibrotic and anti-inflammatory activities could promote reverse remodeling of the left ventricle in HFpEF. Lastly, relaxin’s ability to relax the heart muscle could improve diastolic filling in HFpEF where cardiac hypertrophy and fibrosis lead to diastolic dysfunction and heart failure. While we believe these benefits are most likely to be greatest in the CpCPH population, these benefits could also extend to IpcPH patients and thus to the entire PH-HFpEF population.
As depicted in the table below, we hypothesize that the inherent vasodilatory, anti-fibrotic, and anti-inflammatory activities of relaxin could be well suited to address both the pulmonary and cardiac pathologies of PH-HFpEF.
Characteristics of Group 2 PH IpcPH CpcPH Anticipated Relaxin Effects
Pulmonary artery narrowing, thickening, stiffening, fibrotic remodeling ✓ Pulmonary vasodilation anti-inflammatory, anti-fibrotic
Right ventricular dysfunction ✓ ✓ Right ventricular remodeling
Thickening and stiffening of left ventricle ✓ ✓ Peripheral vasodilation, cardiac relaxation, left ventricular remodeling
Compromised kidney function ✓ ✓ Improvement in kidney function
Relaxin’s numerous physiologic activities, promoting vasodilation in both the systemic and pulmonary vasculature, increasing cardiac output and decreasing pulmonary capillary wedge pressure (PCWP, a measure of left ventricular diastolic function) have previously been demonstrated with serelaxin (recombinant native human relaxin-2). As reported by Ponikowski P. et al in European Heart Journal in 2014, patients with acute heart failure who had a right heart catheterization exhibited improved hemodynamics with relaxin treatment.
Background on TX45
TX45 is a recombinant protein consisting of an engineered single chain human relaxin domain fused to the Fc domain of human immunoglobulin 1 (IgG1) using a peptide chain linker. The Fc portion of TX45 was modified to reduce Fcg receptor activation, and to increase binding to the neonatal Fc receptor (FcRn) with the goal of significantly increasing the half-life of the molecule in circulation, relative to the half-life of native human relaxin. TX45 was further engineered to reduce the isoelectric point (pI) of the molecule to enhance its pharmacokinetic properties and improve its biophysical profile. Reduction of the molecule’s pI was deemed necessary to avoid the non-specific clearance of high pI molecules from the circulation that takes place immediately following administration as a result of binding to negatively charged heparin proteoglycans on the blood vessel wall. This effect can dramatically reduce the amount of bioavailable drug to exert pharmacologic action.
TX45 Pharmacology Studies
TX45 has been tested in several non-clinical in vivo PK and pharmacology studies. These include a rat renal blood flow model that is used as a PD endpoint that demonstrates the vasodilatory effects of relaxin. TX45 administration shows a dose-response and exposure-response relationship on increasing rat renal blood flow. TX45 also demonstrated a significant effect on a number of clinically relevant parameters in the rat monocrotaline-induced (MCT) model of PH. Significant reductions in pulmonary artery pressure, right ventricular hypertrophy, NT-proBNP, and pulmonary artery muscularization were demonstrated along with improvement in survival compared with control animals. The trough exposure corrected for human potency that is associated with maximal efficacy in this chronic rat model was approximately 2ug/ml. The trough exposure for maximal efficacy in this chronic model corresponds to a near maximal effect in our acute renal blood flow assay. This exposure is on the order of EC70.
TX45 Non-clinical Toxicology Studies
TX45 has been tested in rat and non-human primate (NHP) 1-month GLP toxicology and 6-month GLP toxicology studies at ITR in Canada. There is relatively low sequence homology between the active portion of TX45 and rat relaxin (approximately 50%) or NHP relaxin (approximately 73%). In the 1-month GLP toxicology studies, there were no specific toxicities identified and no observable adverse effect level (NOAEL), which is the greatest dose of a drug at which no detectable adverse effects occur in an exposed population, was 100 mg/kg for both species. Administration of TX45 resulted in the development of anti-drug antibodies (ADAs) in some rats and monkeys, but the ADA response was most prevalent in rats receiving TX45 by subcutaneous injection.
During weeks 6-9 of the 26-week GLP chronic toxicology study in NHPs, 5/32 monkeys treated with TX45 developed monkey anti-human anti-drug antibodies. ADAs formed in these 5 animals while they were recovering from an upper respiratory infection (URI) during weeks 5-9 of the study. Three animals were terminated prematurely due to severe immune related reactions, two of which had measured ADAs at the time of termination. We believe the URI acted as an adjuvant to heighten the immunologic response to TX45. Only animals that had URI symptoms developed ADAs and no additional animals developed ADAs as of week 25 (out of 26) of the study. The development of ADAs was not unexpected since there is only 75% homology between human and monkey relaxin, and ADAs were previously reported in serelaxin chronic toxicology studies. There is no expected correlation between the development of ADAs against a substantially human protein administered to NHPs and the immunogenicity profile of the same protein in humans. The absence of high sequence homology between non-clinical species and human protein therapeutics is a common cause of immunogenicity in toxicology studies, particularly in longer-term studies, and does not predict immunogenicity in human clinical studies. The preclinical data for TX45 have not yet been published.
TX45 Clinical Development Studies and Plans
The TX45 clinical development program was designed to provide data supporting key inflection points. TX000045-001, a first in human, single ascending dose trial, was completed in third quarter of 2024. This trial was designed to provide data on safety and tolerability, and immunogenicity as well as define the PK and PD profile of TX45 after single doses in healthy volunteers.
Part A of the Phase 1b single dose acute hemodynamic trial in PH-HFpEF patients completed dosing of the 19 patients in this part of the trial. In January 2025, we reported interim data on the safety and day 1 hemodynamic effects of TX45 in 16 out of the total 19 participants in Part A. The final data is expected to be presented at an upcoming medical conference. Data from Part B of the Phase 1b trial in PH-HFrEF patients is anticipated to be reported in the second half of 2025.
The first patient was enrolled in the Phase 2 proof-of-concept randomized, double-blind, placebo-controlled trial in PH-HFpEF in October 2024 and data from this trial is expected to be available in 2026.
A pre-IND consultation between us and the FDA occurred in early 2024. No significant issues were identified by the FDA with our planned clinical development strategy for TX45. The agency agreed that demonstration of an improvement in exercise capacity would be a suitable pivotal endpoint for regulatory approval. They confirmed that an appropriate endpoint for an assessment of exercise capacity would be six-minute walk distance (6MWD). Provided the Phase 1 and 2 trials result in sufficient safety and efficacy data to justify proceeding to Phase 3, the conduct of global Phase 3 pivotal trials including sites in the United States, and additional non-clinical development work including scale-up of GMP manufacturing to commercial scale would also be needed to generate the data package necessary to support regulatory approval for marketing authorization in the United States. through the submission of a Biologic License Application (“BLA”) to the FDA. We would also seek similar regulatory approvals through equivalent submissions to regulatory bodies in territories outside of the United States.
Trial, Status Trial Design Treatments Subject Population and
Number
TX000045-001 Phase 1a (Completed) Randomized, double- blind, SAD TX000045 or placebo Single ascending IV and SC doses per clinical trial protocol: IV: 0.3mg/kg, 1mg/kg, 3mg/kg SC: 150mg, 300mg, 600mg 47 Healthy male and female subjects Each cohort had up to 8 subjects, 6 on TX45 and 2 on placebo
TX000045-002 Phase 1b, Part A (Dosing Completed) Open-label single dose TX000045 0.3, 1, or 3 mg/kg IV 19 patients with PH-HFpEF dosed
TX000045-002 Phase 1b, Part B (Ongoing) Open-label single dose TX000045 3 mg/kg IV Approximately 10 patients with PH-HFrEF to be dosed
TX000045-003 Phase 2(Ongoing) Randomized, placebo-controlled, double-blind, repeated dose TX000045 300 mg SC Q2W, 300 mg SC Q4W, or placebo 180 patients with PH-HFpEF to be randomized
Completed Phase 1a Single Ascending Dose Trial (TX000045-001)
TX000045-001 was a randomized, placebo-controlled, double-blind single ascending dose (SAD) trial in healthy volunteers which completed in the third quarter of 2024. In this trial, TX45 was well-tolerated after single IV doses ranging from 0.3mg/kg to 3 mg/kg and SC doses ranging from 150mg to 600mg. PK profile revealed dose proportional PK and a half-life of 14-20 days. The PD response of TX45 on RPF was assessed at multiple time points post dose for all dose cohorts. From these multiple PK/PD measurements we developed a robust exposure-response Emax model to enable dose selection for our Phase 2 study. We found the Emax effect of TX45 on RPF to be a 33% increase consistent with reported effect of relaxin from other relaxin compounds, such as Serelaxin (Voors, 2014) and Volenrelaxin (Tham, 2024). Based on our exposure-response model we selected TX45 doses for our Phase 2 trial as follows: 300mg SC every 4 weeks which is predicted to provide steady state trough exposure of approximately 2.6 ug/ml and near maximal effect on RPF at trough, and 300 mg SC every 2 weeks which is predicted to provide a trough exposure of approximately 8.7 ug/ml with maximal pharmacodynamic effects throughout the dosing interval. There was no evidence of immunogenicity or anti-drug antibodies in this trial.
Part A of the Acute Hemodynamic Phase 1b Trial (TX000045-002A)
TX000045-002 is an open-label, single dose trial in patients with PH associated with heart failure designed to evaluate the safety, tolerability and acute hemodynamic effects of TX45 as assessed by right heart catheterization. Part A of this trial enrolled 19 patients with PH-HFpEF, including both CpcPH and IpcPH. The doses of TX45 administered in this trial were 0.3 mg/kg IV, 1 mg/kg IV, and 3 mg/kg IV. The study evaluated safety and tolerability as well as the change from baseline in hemodynamic parameters including pulmonary capillary wedge pressure (“PCWP”) and PVR, mPAP, cardiac output (“CO”), and systemic vascular resistance (“SVR”) and additional hemodynamic measures. Notably, exposures over the first 8 hours after dosing were anticipated to be within the therapeutic range for all doses tested, therefore, it was prespecified that efficacy analyses would be done with pooling of patient data across doses.
Interim data of 16 out of the total 19 patients, released in January 2025, revealed that TX45 administration was well-tolerated in PH-HFpEF patients. No serious adverse events or severe adverse events were reported in this cohort. The interim data analysis from the first 16 (of 19 in total) patients TX45 administration significantly reduced PCWP in the overall group, and significantly reduced PVR in patients with CpcPH. In addition, TX45 administration raised CO and stroke volume and reduced Total Pulmonary Resistance (TPR) and mPAP in the overall group. The chart below summarizes our findings:
Ongoing Part B of the Phase 1b Acute Hemodynamic Trial (TX000045-002B)
Part B of the Phase 1b acute hemodynamic open-label trial in patients with PH-HFrEF, including both IpcPH and CpcPH, is currently being conducted. In this trial, approximately 10 patients with PH-HFrEF will receive a single IV dose of TX45 and hemodynamics will be monitored by right heart catheterization for 8 hours after dosing. We enrolled the first patient in the Part B Phase 1b trial in March 2025, and expect topline trial results in the second half of 2025.
Ongoing Phase 2 Proof of Concept, Randomized, Placebo-Controlled, Double-Blind Trial in PH-HFpEF (TX000045-003)
Our ongoing Phase 2 randomized, placebo-controlled, double-blind proof-of-concept (POC) clinical trial in patients with PH-HFpEF is being conducted globally. In this trial, patients with PH-HFpEF are randomized to receive TX45 or placebo for 6 months. Two dose regimens of TX45 will be administered: 300 mg SC Q2W or 300 mg SC Q4W. Prior to dosing, right heart catheterization will be performed to determine baseline hemodynamics. After 6 months of treatment, patients will undergo a second right heart catheterization. The primary endpoint is change from baseline in PVR in patients with CpcPH. The key secondary endpoint is change from baseline in PCWP in all subjects. Additional endpoints will include change from baseline in 6MWD, change from baseline in the Kansas City Cardiomyopathy Questionnaire score and change from baseline in additional hemodynamic parameters including cardiac output, mean pulmonary pressure, systemic vascular resistance and stroke volume and biomarkers such as NT-proBNP. Changes in relevant echocardiographic endpoints will also be explored. This trial enriches for patients with CpcPH based on baseline right heart catheterization with the goal of evaluating efficacy in both CpcPH as well as the whole population with PH-HFpEF. We currently expect that approximately 180 subjects will be enrolled in this trial.
Group 2 PH with HFpEF Anticipated Pivotal Development Pathway
Subject to the results of our Phase 2 trials and feedback received during the End of Phase 2 meeting with the FDA, we expect to initiate a randomized, placebo-controlled, double-blind Phase 3 clinical trial in Group 2 PH patients with HFpEF, as well as long term, open label extension trial for safety evaluation. Based on historical precedent across
multiple PH subtypes and our Pre-IND consultation with the FDA regarding the specific requirements for approval in Group 2 PH with HFpEF, we believe that the achievement of a clinically significant change in a functional endpoint, such as 6-minute walk distance could be sufficient for approval. The secondary endpoints may also include change from baseline to week 24 in: KCCQ-12 score, and the percentage who improve in WHO functional class. An additional secondary endpoint may be the time to the first occurrence of a clinical worsening event or death and changes in relevant echocardiographic endpoints and biomarker endpoints such as NTproBNP. At this time, we do not anticipate that an assessment of TX45’s impact on long-term cardiovascular outcomes will be a requirement for approval. Commercialization in the United States and other countries will be contingent on approval by the regulatory authorities (the FDA in the United States) and an assessment by the regulators that the studies were conducted in accordance with accepted guidance and the data demonstrated that there was a positive benefit risk for patients.
Background on HHT Opportunity
Hereditary Hemorrhagic Telangiectasia (HHT), also known as Osler-Weber-Rendu syndrome, is the second most common genetic bleeding disorder. It has been estimated that there are approximately 70,000-75,000 HHT patients in the USA and it has also been estimated that up to 15-20% of them have severe disease. Symptoms of this disorder typically arise in late teenage years or older, and the most common manifestation is recurrent epistaxis (nosebleeds), or gastrointestinal bleeding, that can be severe in some patients, requiring iron infusions or blood transfusions, Epistaxis is typically due to abnormal small blood vessels (telangiectasias) in the nasal mucosa. Patients with HHT can also develop large arterio-venous malformations (AVMs) in various organs, such as the brain, liver and lung. The presence of liver AVMs can lead to high output heart failure. AVMs can spontaneously bleed on occasion with potentially devastating results. While some AVMs can be treated by radiologic embolization, such as AVMs in the lung, others cannot, especially in the liver. Indeed, for patients with prominent liver AVMs, the only therapeutic option may be transplantation.
While there are no approved medical therapies for HHT, anti-VEGF therapies including bevacizumab have been used on an ad hoc basis with results demonstrating that anti-angiogenic therapy has the potential to be an efficacious treatment. These therapies reduce angiogenesis and bleeding in mouse models of HHT. Importantly, these data have translated to the clinic: small investigator-sponsored trials in HHT patients demonstrated reduced epistaxis episodes and reduced transfusion dependence. The effects of anti-VEGF therapy suggest that targeting an alternative pathway, similar to the VEGF-VEGFR pathway in its ability to more specifically regulate angiogenesis, could be a productive strategy to address HHT. In addition to bevacizumab, pazopanib, a tyrosine kinase inhibitor, has been explored in small investigator-initiated studies with preliminary evidence of clinical benefit.
HHT is a genetic disorder due to loss-of-function mutations in proteins in the BMP9/10-Endoglin-ALK1- SMAD4 signaling pathway. BMP9 is a member of the TGF-beta family of growth factors that regulate blood vessel development. “GPCR3” (the specific GPCR target is not disclosed at this stage) and its ligand (“L3”) have been described to play a role in angiogenesis and AVM formation. Expression of L3 is also upregulated in HHT disease models and likely contributes to the development of abnormal blood vessels.
Development Candidate for the Treatment of HHT
We identified TX2100 as a development candidate for the treatment of HHT. TX2100 is a VHH-Fc fusion antagonist antibody that binds to “GPCR3”. The Fc portion of TX2100 was modified to reduce Fcgreceptor activation and to increase binding to FcRn, in order to extend the half-life of the molecule.
Pharmacology Studies with Animal Models of HHT
Several murine models of HHT have been established. These include both genetic loss-of-function models that disrupt the BMP9/10-Endoglin-ALK1-SMAD4 signaling pathway at different points, and the BMP9/10 immunoblocked model. In these murine models of HHT, anti-VEGF or anti-VEGF receptor agents reduce AVM formation and bleeding. As referenced above, since bevacizumab, an anti-VEGF monoclonal antibody, has been shown to have a clinical impact in HHT patients at reducing epistaxis, the mouse models appear to be predictive of these human impacts. Despite these signs of clinical utility, neither bevacizumab nor small molecule VEGF receptor inhibitors have been approved for the treatment of HHT, and they are not widely used likely because of the lack of approval, concerns about toxicity and lack of adequate information about dose. We established a pharmacodynamic model of neonatal murine retinal angiogenesis. In this model, treatment with a potent mouse “GPCR3” Nanobody-Fc antagonist reduces neo-angiogenesis and the vascularized area in the neonatal mouse retina. We have also established the BMP9/10-immunoblocked mouse model of HHT. This model reliably leads to the development of hypervascularization, AVMs and bleeding in organs including the eye, GI tract and brain.
In this model, our “GPCR3” antagonist significantly reduces both arteriovenous malformations formation (AVM) and retinal hypervascularization induced by BMP9/BMP10 blockade to a similar degree as a VEGF antagonist. In addition,
“GPCR3” antagonism significantly reduced bleeding as measured by reduced drop in hemoglobin compared to an isotype control antibody. This demonstrates that pharmacologic inhibition of “GPCR3” provides significant effects on endpoints relevant to HHT patients. Additional in vivo studies characterizing the effects of “GPCR3” antagonism on additional HHT relevant vascular pathology endpoints in mice are planned.
Clinical Development Plans
The Phase 1 program for TX2100 would consist of a randomized, placebo-controlled, double-blind ascending-dose trial performed in healthy volunteers. Likely primary endpoints would be the safety and tolerability of TX2100 in these subjects, and likely secondary endpoints would be the pharmacokinetic properties of TX2100. Assuming adequate PK and safety are established in Phase 1, we intend to conduct efficacy trial(s) including a Phase 2 randomized, placebo-controlled, double-blind 6-month proof of concept (POC) trial in HHT patients with frequent epistaxis and anemia.
Background on GEODeTM Platform
We believe that our GEODeTM platform has the potential to advance the field of biologic drugs targeted to GPCRs. To date, only 12% of the more than 800 GPCRs in the human body have been successfully translated into targets for approved therapeutics with biologics representing only three of those approvals. GPCRs have proven to be elusive targets for biologics largely due to their dynamic structure and expression levels in the plasma membrane and the difficulty of translating them in a functional form outside of their native lipid microenvironment.
The majority of successful GPCR targeted therapeutics to date are small molecules, however, the success of this modality has been largely confined to just 6 GPCR subfamilies, many of which have a natural ligand that is also a small molecule. Establishing and maintaining target engagement and selectivity, therefore, for small molecules has proven challenging for receptors of increased size and complexity, greater sequence homology in ligand binding sites, or where subfamilies have overlapping ligands.
GEODeTM was developed with the aim of addressing the challenges of GPCR targeted biologics via a combination of (1) GPCR protein engineering strategies that stabilize the pharmacologically relevant forms of the receptor and increase the cell surface receptor expression, enabling purification and formulation of the receptor at scale and in the correct conformation for naïve antibody selection campaigns; (2) using an optimized cell free yeast display platform with proprietary, highly diverse Fab and VHH antibody libraries designed to target GPCRs; and (3) structure-guided protein engineering strategies to identify optimal GPCR targeted biologics. The original platform technology was developed in Dr. Andrew Kruse’s lab at Harvard. This platform technology included yeast display selection protocols, first generation Fab and VHH library designs and protocols to detergent solubilize GPCRs. Our team has made significant changes and modifications to the original platform to optimize the quality of the molecules emerging from its naïve selections and affinity maturations including optimization of its receptor design strategy, the design of its naive and affinity maturation libraries and of the yeast display selection protocols.
Summary of Our Expertise in GPCRs and mAb Discovery
Our optimized GPCR-targeted antibody discovery process comprises the following steps:
1. Optimization, stabilization, and formulation of GPCRs using proprietary protein engineering and biochemistry techniques, to produce sufficient target material in the correct conformation, as a reagent for discovery campaigns. We use structure-based homology modeling and prediction to engineer changes to the receptor that can bias it into an active or inactive state. These changes can also increase receptor cell surface expression and stability. Also, because the lipid bilayer surrounding a receptor can strongly affect its activation, we have developed techniques to present our targets in a variety of different membrane mimetics that recapitulate the lipid bilayer environment that the receptor is embedded in. We have also taken a machine learning guided protein engineering approach to generate G-protein mimetics that can stabilize GPCRs in their active state conformation. This stabilized protein complex can be used to discover agonist antibodies during yeast display selection campaigns.
2. Optimized and streamlined yeast display antibody selection protocols that minimize false positive hits from non-specific binders and can productively pull initial hits from antibody discovery campaigns. We employ antibody libraries designed and optimized for targeting GPCRs, novel tagging strategies, and make extensive use of automated workflow.
3. High throughput GPCR binding assessment to confirm binding of purified antibodies to the target of interest. This step enables rapid narrowing of the set of initial hits to focus on the best hits merging from the selection.
4. GPCR signaling assays to confirm that hits which were identified in the selection campaign and confirmed as target selective binders, are also functionally active to modulate signaling through the target of interest. We have implemented a wide range of signaling assays that can support characterization of hits against different GPCR targets.
5. Antibody lead optimization via affinity maturation to further improve either potency, selectivity, cross-species reactivity, developability and manufacturability characteristics or any combination of the above.
Collaboration, License and Services Agreements
Harvard Option and License Agreement
In July 2020, Legacy Tectonic entered into an agreement with the President and Fellows of Harvard College (“Harvard”), for an option fee in the low five digits, whereby Harvard granted Legacy Tectonic an exclusive option to negotiate a worldwide, exclusive, royalty-bearing license under Harvard’s interest in the patent rights covering certain technology that was developed by Harvard. In October 2021, Legacy Tectonic exercised the option and on February 10, 2022, entered into a license agreement (“License Agreement”) with Harvard to conduct research and development activities using certain materials, technology and patent rights owned by Harvard, with the intent to develop, obtain regulatory approval for, and commercialize products. The License Agreement will remain in effect until the expiration of the last valid claim within the patent rights covering a product developed under the License Agreement or the termination of the License Agreement. As consideration for the License Agreement, we paid Harvard a one-time license fee of $170,000 and issued 227,486 shares of common stock with a fair market value of $0.4 million.
We are responsible for payment of (1) annual maintenance fees ranging from the low five digits to the low six digits during the term of the License Agreement (through the first commercial sale of a royalty-bearing product); (2) royalty payments as a percentage in the low single digits of the annual net sales that we generate from products that utilize the license technology (“Licensed Products”) and royalty payments as a percentage in the low single digits of the annual net sales that we generate from know-how enabled product licenses (“Know-How Enabled Products”) and (3) a percentage between 10-20% of all non-royalty income received by us under sublicenses, strategic partnerships and know-how enabled product licenses that utilize the license technology. Subsequent to the first commercial sale of a royalty-bearing product, annual maintenance fees will increase to a low six digits for the remainder of the term of the License Agreement. The royalty term from sales of Licensed Products will terminate on a country-by-country and product-by-product basis on the earlier of (i) the expiration of the patent rights covering the product, expected to be no earlier than May 2041, and (ii) the termination of the License Agreement. The royalty term from sales of Know-How Enabled Products will terminate on the earlier of (i) ten years after the first commercial sale of the first Know-How Enabled Product and (ii) twelve years after the first commercial sale of the first Licensed Product.
WuXi Master Development and Manufacturing Services Agreement
On May 6, 2022, we entered into a development and manufacturing agreement (the “WuXi Biologics Manufacturing Agreement”) with WuXi Biologics. The WuXi Biologics Manufacturing Agreement governs the general terms under which WuXi Biologics, or one of its affiliates, will provide biologics development and manufacturing services as specified by us on a project-by-project basis. Such services are performed under agreed-upon work orders. Under the terms of the WuXi Biologics Manufacturing Agreement, we have agreed to pay fees for WuXi Biologics’ performance of services in addition to reimbursing WuXi Biologics for reasonable expenses authorized by us and as provided in each applicable work order.
The term of the WuXi Biologics Manufacturing Agreement will expire on the later of May 6, 2025, or the completion of the services under all work orders executed by the parties prior to May 6, 2025, provided that the term may be extended by us for additional periods. We will have the right to terminate the WuXi Biologics Manufacturing Agreement or any work order upon thirty days’ prior written notice or immediately if, in our reasonable judgment, WuXi Biologics is or will be unable to perform the Services or WuXi Biologics fails to obtain or maintain any necessary licenses or approvals. Either party may terminate the WuXi Biologics Manufacturing Agreement or any work order if the other party files for bankruptcy, fails to cure a material breach during the cure period or a force majeure event that has lasted for the time period specified within the WuXi Biologics Manufacturing Agreement. WuXi Biologics has the right to terminate if the parties are unable to reach an agreement on an amendment to the services if such services become impossible due solely to changes in applicable law. The term of each work order terminates upon completion of the services under such work order, unless terminated earlier.
The WuXi Biologics Manufacturing Agreement includes customary terms relating to, among others, indemnification, intellectual property protection, confidentiality, remedies and warranties.
Novotech Master Clinical Contract Services Agreement
In March 2023, we entered into a master clinical contract services agreement (the “Novotech CSA”) with Novotech (Australia) Pty Limited (“Novotech”). The Novotech CSA governs the general terms under which Novotech, or one of its affiliates, will provide clinical development related services (excluding manufacturing services) as specified by us on a project-by-project basis. Such services are performed under agreed statements of work. Under the terms of the
Novotech CSA, we have agreed to pay fees for Novotech’s performance of services in addition to reimbursing Novotech for reasonably incurred, pass through costs agreed to by us and as provided in each applicable statement of work. Additionally, under the terms of the Novotech CSA, all documentation, information, and biological, chemical or other materials controlled by us and furnished to Novotech by or on behalf of us shall remain our exclusive property, and we shall own all rights to, and Novotech shall assigns all right, title and interest to, all inventions, discoveries, improvements, ideas, processes, formulations, products, co computer programs, works of authorship, databases, trade secrets, know-how, information, data, documentation, reports, research, creations and all other products and/or materials arising from or made in the performance of Novotech’s service, except for Novotech’s background intellectual property rights as defined under the Agreement.
The term of the Novotech CSA will expire on the later of (i) five years from the effective date of the Novotech CSA, or March 2028, or (ii) the completion of the services under all statements of work executed prior to the fifth anniversary of the effective date of the Novotech CSA, or March 2028. We may terminate the Novotech CSA or any statement of work thereunder immediately if Novotech has committed an uncurable breach or has failed to cure a breach after thirty days’ written notice. We may also terminate the Novotech CSA or any statement of work thereunder for any reason upon thirty days’ prior written notice to Novotech. Novotech may terminate the Novotech CSA or any statement of work thereunder immediately if we have failed to cure a material breach after thirty days’ written notice.
The Novotech CSA includes customary terms relating to, among others, indemnification, intellectual property protection, confidentiality, non-solicitation, remedies and warranties.
ARENSIA Master Agreement for Early Phase Clinical Services
In October 2023, we entered into a master agreement for early phase clinical services (the “Arensia CSA”) with ARENSIA Exploratory Medicine GmbH (“Arensia”). The Arensia CSA governs the general terms under which Arensia, or one of its affiliates, will provide early phase clinical research services in connection with clinical research programs as specified by us on a project-by-project basis. Such services are performed under agreed work orders. Under the terms of the Arensia CSA, we have agreed to pay fees for Arensia’s performance of services in addition to reimbursing Arensia for pre-approved, reasonable expenses actually and necessarily incurred by Arensia as specified in each applicable work order.
The term of the Arensia CSA will expire on the later of: (i) five years from the effective date of the Arensia CSA, or October 2028, or (ii) the completion of the services under all work orders executed prior to the fifth anniversary of the effective date of the Arensia CSA, or October 2028. Work orders shall expire upon the completion of the services specified thereunder, provided that we may terminate a work order if the study governed by such work order is suspended for more than thirty days and either party may terminate a work order for reasonable scientific safety reasons. We may terminate the Arensia CSA in its entirety for any reason upon thirty days’ prior written notice to Arensia. Either party may terminate the Arensia CSA or any statement of work thereunder immediately if the other party has failed to cure a material breach after thirty days’ written notice or for the other party’s insolvency.
The Arensia CSA includes customary terms relating to, among others, indemnification, intellectual property protection, confidentiality, remedies and warranties.
QPS Holdings Master Contract Services Agreement
In October 2023, we entered into a master contract services agreement (the “QPS Agreement”) with QPS Holdings, LLC (“QPS”). The QPS Agreement governs the general terms under which QPS, or one of its affiliates, will provide services (excluding GMP manufacturing and clinical development related services) as specified by Tectonic on a project-by-project basis. Such services are performed under agreed statements of work. Under the terms of the QPS Agreement, Tectonic has agreed to pay for QPS’s performance of the services as specified in the applicable statement of work. Additionally, under the terms of the QPS Agreement, all documentation, information, and biological, chemical or other materials controlled by Tectonic and furnished to QPS by or on behalf of Tectonic shall remain the exclusive property of Tectonic, and Tectonic shall own all rights to, and QPS shall assigns all right, title and interest to, all inventions, discoveries, improvements, ideas, processes, formulations, products, co computer programs, works of authorship, databases, trade secrets, know-how, information, data, documentation, reports, research, creations and all other products and/or materials arising from or made in the performance of QPS’s services.
The term of the QPS Agreement will expire on the later of: (i) two years from the effective date of the QPS Agreement, or October 2025, or (ii) the completion of the services under all work orders executed prior to the second anniversary of the effective date of the QPS Agreement, or October 2025. Tectonic may terminate the QPS Agreement or any statement of work thereunder for any reason upon thirty days’ prior written notice or immediately if QPS commits an uncurable breach of the QPS Agreement. QPS may terminate the QPS Agreement or any statement of work thereunder if Tectonic
has failed to cure a material breach after thirty days’ written notice or may terminate the QPS Agreement for any reason upon sixty days’ prior written notice provided there are no active statements of work outstanding.
The QPS Agreement includes customary terms relating to, among others, indemnification, intellectual property protection, confidentiality, remedies and warranties.
Intellectual Property
We strive to protect and enhance the proprietary technologies, inventions and improvements that we believe are important to our business, including seeking, maintaining and defending patent rights, whether developed internally or licensed from third parties. Our policy is to seek to protect our proprietary position by, among other methods, pursuing and obtaining patent protection in the United States and in jurisdictions outside of the United States related to our proprietary technology, inventions, improvements, platforms and our product candidates that are important to the development and implementation of our business.
Our patent portfolio includes three pending U.S. non-provisional applications, one pending international (Patent Cooperation Treaty) application, and nineteen pending foreign applications relating to Fc-relaxin fusion protein compositions (including TX45) and methods of use thereof. Specifically, we have exclusively in-licensed one patent family from the President and Fellows of Harvard College and wholly own two patents families, relating Fc-relaxin fusion protein compositions (including TX45) and methods of use thereof. The in-licensed patent family consists of one pending U.S. non-provisional patent application and nine pending foreign applications in Australia, Canada, China, Europe, Israel, Japan, Korea, Mexico, and Singapore, with any patent issuing from these applications having an expected 20-year expiry date of not earlier than May 2041. The first wholly owned patent family consists of one pending U.S. non-provisional patent application and nine pending foreign applications in Australia, Canada, China, Europe, Israel, Japan, Korea, Mexico, and Singapore, with any patent issuing from these applications having an expected 20-year expiry date of not earlier than November 2042, and the second family consists of one pending Patent Cooperation Treaty application, one pending U.S. non-provisional patent application, and one pending foreign application in Taiwan, with any patent issuing from these applications having an expected 20-year expiry date of not earlier than May 2044. Individual patents extend for varying periods depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, patents issued for regularly filed applications in the United States are granted a term of 20 years from the earliest effective non-provisional filing date. In addition, in certain instances, a patent term can be extended to recapture a portion of the U.S. Patent and Trademark Office, or the USPTO, delay in issuing the patent as well as a portion of the term effectively lost as a result of the FDA regulatory review period. However, as to the FDA component, the restoration period cannot be longer than five years and the total patent term including the restoration period must not exceed 14 years following FDA approval. The duration of foreign patents varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective filing date. However, the actual protection afforded by a patent varies on a product by product basis, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.
Furthermore, we rely upon trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our proprietary information, in part, using confidentiality agreements with our collaborators, employees and consultants and invention assignment agreements with our employees. We also have confidentiality agreements or invention assignment agreements with our collaborators and selected consultants. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third party. These agreements may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
Our commercial success will also depend in part on not infringing upon the proprietary rights of third parties. It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies, or its product candidates or processes, obtain licenses or cease certain activities. Our breach of any license agreements or failure to obtain a license to proprietary rights that we may require to develop or commercialize our future product candidates may have an adverse impact on us. If third parties have prepared and filed patent applications prior to March 16, 2013 in the United States that also claim technology to which we have rights, we may have to participate in interference proceedings in the USPTO, to determine priority of invention. For more information, please see “Risk Factors — Risks Related to Intellectual Property.”
Sales and Marketing
Given our stage of development, we have not yet established a commercial organization or distribution capabilities.
Manufacturing
We do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of our lead product candidate TX45. We currently rely, and expect to continue to rely for the foreseeable future, on third-party contract development and manufacturing organizations (“CDMOs”) to produce our product candidates for preclinical and clinical testing, as well as for future commercial manufacture of any products that we may commercialize.
We require our CDMOs to conduct manufacturing activities in compliance with Current Good Manufacturing Practices (“CGMPs”) requirements. We have assembled a team of experienced employees and consultants to provide the necessary technical, quality and regulatory oversight over its CDMOs. Currently, we contract with two third-party manufacturers, including WuXi Biologics, to provide biologics development and manufacturing services for our product candidates. In the future, we may engage additional third-party manufacturers to support any clinical trials for TX45 and TX2100 as well as commercialization of TX45, if approved, in the United States or other jurisdictions or the clinical development and potential commercialization of additional programs from our pipeline.
We rely on WuXi Biologics to perform all chemistry, manufacturing, and controls (“CMC”) activities related to our TX45 program. We require that WuXi Biologics produces bulk drug substances and finished drug products in accordance with CGMPs, and all other applicable laws and regulations. In addition, we rely on WuXi Biologics to operate facilities that meet regulatory requirements for production and testing of clinical and commercial products and to work closely with us to validate manufacturing processes prior to commercial launch. We oversee WuXi Biologics by performing technical and quality assurance review and/or approval of CGMP documentation, establishing quality agreements to define responsibilities and expectations for goods and services, and observing production and testing activities, among other activities.
Competition
The biotechnology and pharmaceutical industries are characterized by the rapid evolution of technologies and understanding of disease etiology, intense competition and a strong emphasis on intellectual property. We believe that our approach, strategy, scientific capabilities, know-how and experience provide us with competitive advantages. However, we expect substantial competition from multiple sources, including major pharmaceutical, specialty pharmaceutical, and existing or emerging biotechnology companies, academic research institutions and governmental agencies and public and private research institutions worldwide. Many of our competitors, either alone or with their collaborations, have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than we do. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient enrollment in 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 before or more successfully than we do.
We face competition from companies that are pursuing development of engineered proteins or small molecule agonists of relaxin including AstraZeneca, who is currently conducting Phase 2 trials. To our knowledge, Astra Zeneca is pursuing either the broader Heart Failure population or Group 2 PH in the setting of either HFpEF or HFrEF without enrichment for CpCPH patients.
In the HHT space, Vaderis has been pursuing development of an oral AKT inhibitor and Diagonal Therapeutics has been pursuing agonist antibodies for the treatment of this condition. Investigator-initiated studies of nintendanib (Boehringer Ingelheim) and pazopanib (Novartis) are also ongoing to explore the potential utility of these kinase inhibitors to treat this condition.
Our focus on biologic drugs differentiates us from many competitor GPCR companies whose primary focus is on small molecule drug discovery. Additionally, our GPCR membrane protein biochemistry experience, which is key for generating optimally stabilized and formulated receptors for antibody selection campaigns, combined with our experience using novel antigen formats differentiates us from in vitro display based antibody discovery. Specifically, our use of membrane mimetics that help maintain native receptor extra-cellular domain conformations combined with the membrane protein biochemistry expertise that we have built over the last three years is a key point of potential differentiation.
Several other companies are focused on discovery of GPCR-targeted therapeutics. Some may have an emphasis on small molecule approaches (Septerna, SOSEI-Heptares, Structure Therapeutics), on alternative biologic efforts (Abalone Bio, Orion Biotechnology), both (Abilitia Bio, Confo Therapeutic, Orion Biotechnology, Omeros), or on specific targets or target classes (GPCR Therapeutics).
Government Regulation
Government authorities in the United States, at the federal, state and local level and in other countries and jurisdictions, including the European Union, extensively regulate, among other things, the research, development, testing, manufacture, pricing, reimbursement, sales, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting and import and export of pharmaceutical products, including biological products. The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.
Licensure and regulation of biologics in the United States
In the United States, any product candidates we may develop would be regulated as biological products, or biologics, under the Public Health Service Act (“PHSA”) and the Federal Food, Drug and Cosmetic Act (“FDCA”) and its implementing regulations. The failure to comply with the applicable U.S. requirements at any time during the product development process, including preclinical testing, clinical testing, the approval process, or post-approval process, may subject an applicant to delays in the conduct of the study, regulatory review and approval and/or administrative or judicial sanctions.
An applicant seeking approval to market and distribute a new biologic in the United States generally must satisfactorily complete each of the following steps:
•preclinical laboratory tests, animal studies and formulation studies performed in accordance with the FDA’s applicable Good Laboratory Practices (“GLP”) regulations;
•completion of the manufacture, under current good manufacturing practices (“CGMP”) conditions, of the drug substance and drug product that the sponsor intends to use in human clinical trials along with required analytical and stability testing;
•submission to the FDA of an IND application for human clinical testing, which must become effective before human clinical trials may begin;
•approval by an independent IRB representing each clinical site before each clinical trial may be initiated;
•performance of adequate and well-controlled human clinical trials to establish the safety, potency and purity of the product candidate for each proposed indication, in accordance with current good clinical practices (“GCP”) regulations;
•preparation and submission to the FDA of a BLA for a biological product requesting marketing for one or more proposed indications, including submission of detailed information on the manufacture and composition of the product in clinical development and proposed labelling;
•review of the product by an FDA advisory committee, where appropriate or if applicable;
•satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities, including those of third parties, at which the product, or components thereof, are produced to assess compliance with CGMP requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;
•satisfactory completion of any FDA audits of the preclinical studies and clinical trial sites to assure compliance with GLP, as applicable, and GCP, and the integrity of clinical data in support of the BLA;
•payment of Prescription Drug User Fee Act (“PDUFA”) fees, securing FDA approval of the BLA and licensure of the new biological product; and
•compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”) and any post-approval studies or other post- marketing commitments required by the FDA.
Preclinical studies and investigational new drug application
Before testing any biological product candidate in humans, the product candidate must undergo preclinical testing. Preclinical tests include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate the potential for efficacy and toxicity in animal studies. The conduct of the preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements. The results of the preclinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND application.
An IND is an exemption from the FDCA that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational clinical trial and a request for FDA authorization to administer such investigational product to humans. The IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions about the product or conduct of the proposed clinical trial, including concerns that human research subjects will be exposed to unreasonable health risks. In that case, the IND sponsor and the FDA must resolve any outstanding FDA concerns before the clinical trial can begin or recommence.
As a result, submission of the IND may result in the FDA not allowing the trial to commence or allowing the trial to commence on the terms originally specified by the sponsor in the IND. If the FDA raises concerns or questions either during this initial 30-day period, or at any time during the IND review process, it may choose to impose a partial or complete clinical hold. Clinical holds are imposed by the FDA whenever there is concern for patient safety, may be a result of new data, findings, or developments in clinical, preclinical and/or chemistry, manufacturing and controls or where there is non-compliance with regulatory requirements. This order issued by the FDA would delay either a proposed clinical trial or cause suspension of an ongoing trial, until all outstanding concerns have been adequately addressed, and the FDA has notified the company that investigations may proceed. This could cause significant delays or difficulties in completing our planned clinical trials or future clinical trials in a timely manner.
Human clinical trials in support of a BLA
Clinical trials involve the administration of the investigational product candidate to healthy volunteers or patients with the disease or condition to be treated under the supervision of a qualified principal investigator in accordance with GCP requirements. Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, inclusion and exclusion criteria, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.
A sponsor who wishes to conduct a clinical trial outside the United States may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. When a foreign clinical trial is conducted under an IND, all FDA IND requirements must be met unless waived. When a foreign clinical trial is not conducted under an IND, the sponsor must ensure that the trial complies with certain regulatory requirements of the FDA in order to use the trial as support for an IND or application for marketing approval. Specifically, the FDA requires that such trials be conducted in accordance with GCP, including review and approval by an independent ethics committee and informed consent from participants. The GCP requirements encompass both ethical and data integrity standards for clinical trials. The FDA’s regulations are intended to help ensure the protection of human subjects enrolled in non-IND foreign clinical trials, as well as the quality and integrity of the resulting data. They further help ensure that non-IND foreign trials are conducted in a manner comparable to that required for clinical trials in the United States.
Further, each clinical trial must be reviewed and approved by an IRB either centrally or individually at each institution at which the clinical trial will be conducted. The IRB will consider, among other things, clinical trial design, patient informed consent, ethical factors, the safety of human subjects, and the possible liability of the institution. An IRB must operate in compliance with FDA regulations. The FDA, IRB, or the clinical trial sponsor may suspend or discontinue a clinical trial at any time for various reasons, including a finding that the clinical trial is not being conducted in accordance with FDA requirements or that the participants are being exposed to an unacceptable health risk. Clinical testing also must satisfy extensive GCP rules and the requirements for informed consent.
Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board (“DSMB”). This group may recommend continuation of the trial as planned, changes in trial conduct, or cessation of the trial at designated check points based on certain available data from the trial to which only the DSMB has access.
Clinical trials typically are conducted in three sequential phases, but the phases may overlap or be combined. Additional studies may be required after approval.
Phase 1 clinical trials are initially conducted in a limited population to test the product candidate for safety, including adverse effects, dose tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics in healthy humans or, on occasion, in patients.
Phase 2 clinical trials are generally conducted in a limited patient population to identify possible adverse effects and safety risks, evaluate the efficacy of the product candidate for specific targeted indications and determine dose tolerance and optimal dosage. Multiple Phase 2 clinical trials may be conducted by the sponsor to obtain information prior to beginning larger and more costly Phase 3 clinical trials.
Phase 3 clinical trials proceed if the Phase 2 clinical trials demonstrate that a dose range of the product candidate is potentially effective and has an acceptable safety profile. Phase 3 clinical trials are undertaken within an expanded patient population to further evaluate dosage, provide substantial evidence of clinical efficacy and further test for safety in an expanded and diverse patient population at multiple, geographically dispersed clinical trial sites. A well-controlled, statistically robust Phase 3 trial may be designed to deliver the data that regulatory authorities will use to decide whether or not to approve, and, if approved, how to appropriately label a biologic; such Phase 3 studies are referred to as “pivotal.”
In some cases, the FDA may approve a BLA for a product but require the sponsor to conduct additional clinical trials to further assess the product’s safety and effectiveness after approval. Such post-approval trials are typically referred to as Phase 4 clinical trials. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of biologics approved under accelerated approval regulations. If the FDA approves a product while a company has ongoing clinical trials that were not necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase 4 clinical trial requirement or to request a change in the product labeling. The failure to exercise due diligence with regard to conducting Phase 4 clinical trials could result in withdrawal of approval for products.
Information about applicable clinical trials must be submitted within specific timeframes to the National Institutes of Health (“NIH”) for public dissemination on its ClinicalTrials.gov website.
Pediatric studies
Under the Pediatric Research Equity Act of 2003 (“PREA”), a BLA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. Sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver requests, and other information required by regulation. The applicant, the FDA, and the FDA’s internal review committee must then review the information submitted, consult with each other, and agree upon a final plan. The FDA or the applicant may request an amendment to the plan at any time. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.
Compliance with CGMP requirements
Before approving a BLA, the FDA typically will 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 product within required specifications. The PHSA emphasizes the importance of manufacturing control for products like biologics whose attributes cannot be precisely defined.
Manufacturers and others involved in the manufacture and distribution of products must also register their establishments with the FDA and certain state agencies. Both domestic and foreign manufacturing establishments must register and provide additional information to the FDA upon their initial participation in the manufacturing process. Any product manufactured by or imported from a facility that has not registered, whether foreign or domestic, is deemed misbranded under the FDCA. Establishments may be subject to periodic unannounced inspections by government authorities to ensure compliance with CGMPs and other laws. Inspections must follow a “risk-based schedule” that may result in certain establishments being inspected more frequently. Manufacturers may also have to provide, on request, electronic or physical records regarding their establishments. Delaying, denying, limiting, or refusing inspection by the FDA may lead to a product being deemed to be adulterated.
Review and approval of a BLA
The results of product candidate development, preclinical testing and clinical trials, including negative or ambiguous results as well as positive findings, are submitted to the FDA as part of a BLA requesting license to market the product. The BLA must contain extensive manufacturing information and detailed information on the composition of the product and proposed labeling as well as payment of a user fee. Under federal law, the submission of most BLAs is subject to a substantial application user fee. The sponsor of a licensed BLA is also subject to an annual program fee. Certain exceptions and waivers are available for some of these fees, such as an exception from the application fee for products with orphan designation and a waiver for certain small businesses.
The FDA has 60 days after submission of the application to conduct an initial review to determine whether it is sufficient to accept for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review. Once the submission has been accepted for filing, the FDA begins an in-depth review of the application. Under the goals and policies agreed to by the FDA under the PDUFA, the FDA has ten months in which to complete its initial review of a standard application and respond to the applicant, and six months for a priority review of the application. The FDA does not always meet its PDUFA goal dates for standard and priority BLAs. The review process may often be significantly extended by FDA requests for additional information or clarification.
Under the PHSA, the FDA may approve a BLA if it determines that the product is safe, pure and potent, and the facility where the product will be manufactured meets standards designed to ensure that it continues to be safe, pure and potent. On the basis of the FDA’s evaluation of the application and accompanying information, including the results of the inspection of the manufacturing facilities and any FDA audits of preclinical and clinical trial sites to assure compliance with GCPs, the FDA may issue an approval letter or a complete response letter (“CRL”). An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. If the application is not approved, the FDA will issue a CRL, which will contain the conditions that must be met in order to secure final approval of the application, and when possible will outline recommended actions the sponsor might take to obtain approval of the application. Sponsors that receive a CRL may submit to the FDA information that represents a complete response to the issues identified by the FDA.
The FDA may also refer the application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved. In particular, the FDA may refer applications for novel biological products or biological products that present difficult questions of safety or efficacy to an advisory committee. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
If the FDA approves a new product, it may limit the approved indication(s) for use of the product. It may also require that contraindications, warnings, or precautions be included in the product labeling. In addition, the FDA may call for post-approval studies, including Phase 4 clinical trials, to further assess the product’s efficacy and/or safety after approval. The agency may also require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution restrictions or other risk management mechanisms, including REMS, to help ensure that the benefits of the product outweigh the potential risks. REMS can include medication guides, communication plans for healthcare professionals and elements to assure safe use (“ETASU”). ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patent registries. The FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.
Expedited review programs
The FDA is authorized to expedite the review of BLAs in several ways. Under the Fast Track program, the sponsor of a product candidate may request the FDA to designate the product for a specific indication as a Fast Track product concurrent with or after the filing of the IND. Candidate products are eligible for Fast Track designation if they are intended to treat a serious or life-threatening condition and demonstrate the potential to address unmet medical needs for the condition. Fast Track designation applies to the combination of the product candidate and the specific indication for which it is being studied. In addition to other benefits, such as the ability to have greater interactions with the FDA, the FDA may initiate review of sections of a Fast Track application before the application is complete, a process known as rolling review.
Any product candidate submitted to the FDA for marketing, including under a Fast Track program, may be eligible for other types of FDA programs intended to expedite development and review, such as breakthrough therapy designation, priority review and accelerated approval.
•Breakthrough therapy designation. To qualify for the breakthrough therapy program, product candidates must be intended to treat a serious or life-threatening disease or condition and preliminary clinical evidence must indicate that such product candidates may demonstrate substantial improvement on one or more clinically significant endpoints over existing therapies. The FDA will seek to ensure the sponsor of a breakthrough therapy product candidate receives intensive guidance on an efficient drug development program, intensive involvement of senior managers and experienced staff on a proactive, collaborative and cross-disciplinary review and rolling review.
•Priority review. A product candidate is eligible for priority review if it treats a serious condition and, if approved, it would be a significant improvement in the safety or effectiveness of the treatment, diagnosis or prevention compared to marketed products. FDA aims to complete its review of priority review applications within six months as opposed to 10 months for standard review.
•Accelerated approval. Drug or biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval. Accelerated approval means that a product candidate may be approved on the basis of adequate and well controlled clinical trials establishing that the product candidate has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit, or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity and prevalence of the condition and the availability or lack of alternative treatments. As a condition of approval, the FDA may require that a sponsor of a drug or biological product candidate receiving accelerated approval perform adequate and well controlled post-marketing clinical trials. In addition, for products being considered for accelerated approval, the FDA generally requires, as a condition for accelerated approval, pre-approval of promotional materials.
None of these expedited programs change the standards for approval but they may help expedite the development or approval process of product candidates.
Post-approval regulation
If regulatory approval for marketing of a product or new indication for an existing product is obtained, the sponsor will be required to comply with all regular post-approval regulatory requirements as well as any post- approval requirements that the FDA have imposed as part of the approval process. The sponsor will be required to report certain adverse reactions and production problems to the FDA, provide updated safety and efficacy information and comply with requirements concerning advertising and promotional labeling requirements. Manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with ongoing regulatory requirements, including CGMP regulations, which impose certain procedural and documentation requirements upon manufacturers. Manufacturers and other parties involved in the drug supply chain for prescription drug and biological products must also comply with product tracking and tracing requirements and for notifying the FDA of counterfeit, diverted, stolen and intentionally adulterated products or products that are otherwise unfit for distribution in the United States. Accordingly, the sponsor and its third-party manufacturers must continue to expend time, money and effort in the areas of production and quality control to maintain compliance with CGMP regulations and other regulatory requirements.
A product may also be subject to official lot release, meaning that the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official lot release, the manufacturer must submit samples of each lot, together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot, to the FDA. The FDA may in addition perform certain confirmatory tests on lots of some products before releasing the lots for distribution. Finally, the FDA will conduct laboratory research related to the safety, purity, potency and effectiveness of pharmaceutical products.
Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements 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; imposition of post-market studies or clinical trials to assess new safety risks; or
imposition of distribution or other restrictions under a REMS program. 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;
•fines, warning letters or holds on post-approval clinical trials;
•refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product license approvals;
•product recall, seizure or detention, or refusal to permit the import or export of products; or
•injunctions or the imposition of civil or criminal penalties.
Pharmaceutical products may be promoted only for the approved indications and in accordance with the provisions of the approved label. Although healthcare providers may prescribe products for uses not described in the drug’s labeling, known as off-label uses, in their professional medical judgment, drug manufacturers are prohibited from soliciting, encouraging or promoting unapproved uses of a product. Drug manufacturers may only share truthful and non-misleading information that is otherwise consistent with a product’s FDA approved labeling. 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.
The FDA strictly regulates the marketing, labeling, advertising and promotion of prescription drug products placed on the market. This regulation includes, among other things, standards and regulations for direct-to-consumer advertising, communications regarding unapproved uses, industry-sponsored scientific and educational activities and promotional activities involving the Internet and social media. Promotional claims about a drug’s safety or effectiveness are prohibited before the drug is approved. After approval, a drug product generally may not be promoted for uses that are not approved by the FDA, as reflected in the product’s prescribing information.
If a company is found to have promoted off-label uses, it may become subject to adverse public relations and administrative and judicial enforcement by the FDA, the Department of Justice, or the Office of the Inspector General of the Department of Health and Human Services, as well as state authorities. This could subject a company to a range of penalties that could have a significant commercial impact, including civil and criminal fines and agreements that materially restrict the manner in which a company promotes or distributes drug products. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.
Biosimilars and exclusivity
The 2010 Patient Protection and Affordable Care Act, which was signed into law in March 2010, included a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”). The BPCIA established a regulatory scheme authorizing the FDA to approve biosimilars and interchangeable biosimilars. A biosimilar is a biological product that is highly similar to an existing FDA-licensed “reference product”. The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars. Additional guidance is expected to be finalized by the FDA in the near term.
Under the BPCIA, a manufacturer may submit an application for licensure of a biological product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product.” In order for the FDA to approve a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity and potency. For the FDA to approve a biosimilar product as interchangeable with a reference product, the agency must find that the biosimilar product can be expected to produce the same clinical results as the reference product, and (for products administered multiple times) that the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.
Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date of approval of the reference product. The FDA may not approve a biosimilar product until 12 years from the date on which the reference product was approved. Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. Since the passage of the BPCIA, many states have passed laws or
amendments to laws, including laws governing pharmacy practices, which are state-regulated, to regulate the use of biosimilars.
Patent term restoration and extension
In the United States, a patent claiming a new biological product, its method of use or its method of manufacture may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent extension of up to five years for patent term lost during product development and FDA regulatory review. Assuming grant of the patent for which the extension is sought, the restoration period for a patent covering a product is typically one-half the time between the effective date of the IND and the submission date of the BLA, plus the time between the submission date of the BLA and the ultimate approval date. Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date in the United States. Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent for which extension is sought. A patent that covers multiple products for which approval is sought can only be extended in connection with one of the approvals. The USPTO reviews and approves the application for any patent term extension in consultation with the FDA.
Other U.S. healthcare laws and compliance requirements
Healthcare providers, including physicians, and third-party payors play a primary role in the recommendation and prescription of any product candidates that we may develop for which we obtain marketing approval. Our current and future arrangements with third-party payors, healthcare providers and customers may implicate broadly applicable fraud and abuse and other healthcare laws and regulations. Restrictions under applicable federal and state healthcare laws and regulations, including certain laws and regulations applicable only if we have marketed products, include the following:
•the civil False Claims Act (“FCA”), prohibits knowingly presenting or causing the presentation of a false, fictitious or fraudulent claim for payment to the U.S. government. Actions under the False Claims Act may be brought by the Attorney General or as a qui tam action by a private individual in the name of the government. Violations of the False Claims Act can result in very significant monetary penalties, for each false claim and treble the amount of the government’s damages. Manufacturers can be held liable under the False Claims Act even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. The federal False Claims Act also permits a private individual acting as a “whistleblower” to bring actions on behalf of the federal government alleging violations of the federal False Claims Act and to share in any monetary recovery;
•the federal Anti-Kickback Statute prohibits, among other things, persons or entities from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as Medicare and Medicaid. The federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers, and formulary managers on the other. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. A violation of the federal Anti-Kickback Statute can also form the basis for FCA liability;
•the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
•HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), and its implementing regulations, including the final omnibus rule published on January 25, 2013, imposes, among other things, certain requirements relating to the privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to business associates, defined as independent contractors or agents of covered entities that create, receive, maintain, transmit, or obtain, protected health information in connection with providing a service for or on behalf of a covered entity, and their covered subcontractors. HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions;
•federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs;
•Federal price transparency laws, including the provision commonly referred to as the Physician Payments Sunshine Act, and its implementing regulations, which requires applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the Centers of Medicare & Medicaid Services (“CMS”), information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain other licensed health care practitioners (such as physician assistants and nurse practitioners) and teaching hospitals, as well as ownership and investment interests held by the physicians described above and their immediate family members;
•federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and
•analogous state and foreign laws and regulations, such as state anti-kickback, anti-bribery and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers.
Some states also impose requirements on manufacturers and distributors to establish the pedigree of product in the chain of distribution, including some states that require manufacturers and others to adopt new technology capable of tracking and tracing product as it moves through the distribution chain. Several states have enacted legislation requiring pharmaceutical companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, track and report gifts, compensation and other remuneration made to physicians and other healthcare providers, clinical trials and other activities, and/ or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.
Payments made to physicians in certain European Union Member States must be publicly disclosed. Moreover, agreements with physicians often must be the subject of prior notification and approval by the physician’s employer, his or her competent professional organization, and/or the regulatory authorities of the individual European Union Member States. These requirements are provided in the national laws, industry codes, or professional codes of conduct applicable in the European Union Member States. Failure to comply with these requirements could result in criminal and civil sanctions, including significant fines and civil monetary penalties, reputational risk, public reprimands, administrative penalties, exclusion from participation in governmental healthcare programs, disgorgement, or imprisonment. Similar sanctions and penalties, as well as imprisonment, also can be imposed upon executive officers and employees of such companies.
Healthcare reform
In the United States and some foreign jurisdictions, there have been and continue to be ongoing efforts to implement legislative and regulatory changes regarding the healthcare system. Such changes could prevent or delay marketing approval of any product candidates that we may develop, restrict or regulate post-approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval. Although we cannot predict what healthcare or other reform efforts will be successful, such efforts may result in more rigorous coverage criteria, in additional downward pressure on the price that we, or our future collaborators, may receive for any approved products or in other consequences that may adversely affect our ability to achieve or maintain profitability.
Within the United States, the federal government and individual states have aggressively pursued healthcare reform, as evidenced by the passing of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Reconciliation Act of 2010 (the “ACA”), and the ongoing efforts to modify or repeal that legislation. The ACA substantially changed the way healthcare is financed by both governmental and private insurers and contains a number of provisions that affect coverage and reimbursement of drug products and/or that could potentially reduce the demand for pharmaceutical products such as increasing drug rebates under state Medicaid programs for brand name prescription drugs and extending those rebates to Medicaid managed care and assessing a fee on manufacturers and importers of brand name prescription drugs reimbursed under certain government programs, including Medicare and Medicaid. Other aspects of healthcare reform, such as expanded government enforcement authority and heightened standards that could increase compliance-related costs, could also affect our business. Modifications have been implemented and additional modifications or repeal may occur.
In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA contains several provisions that may impact our business to varying degrees, including provisions that reduce the out-of-pocket spending cap for Medicare Part D beneficiaries from $7,050 to $2,000 starting in 2025, thereby effectively eliminating the coverage gap; impose new manufacturer financial liability on certain drugs under Medicare Part D; allow the U.S. government to negotiate Medicare Part B and Part D price caps for certain single-source high-cost biologics that have been on the market for at least 11 years without generic or biosimilar competition (the “Medicare Drug Price Negotiation Program”); require companies to pay rebates to Medicare for certain drug prices that increase faster than inflation; and delay until January 1, 2032 the implementation of the U.S. Department of Health and Human Services (“HHS”) rebate rule that would have limited the fees that pharmacy benefit managers can charge. Further, under the IRA, orphan drugs are exempted from the Medicare drug price negotiation program, but only if they have one orphan designation and for which the only approved indication is for that disease or condition. If a product receives multiple rare disease designations or has multiple approved indications, it may not qualify for the orphan drug exemption. The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. On August 15, 2024, HHS announced the agreed-upon price of the first ten drugs that were subject to price negotiations, although there is currently ongoing litigation challenging the constitutionality of the IRA’s Medicare Drug Price Negotiation Program. On January 17, 2025, HHS selected fifteen additional products covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program. Further, on December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights. While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.
In addition to pricing regulations, reforms of regulatory approval frameworks may adversely affect our pricing strategy. The current Trump administration is pursuing policies to reduce regulations and expenditures across government including at HHS, the FDA, CMS and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. These actions may, for example, include directives to reduce agency workforce, rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation (“CMMI”) to consider new payment and healthcare models to limit drug spending and eliminating the Biden administration’s executive order that directed HHS to establishing an AI task force and developing a strategic plan. Additionally, in its June 2024 decision in Loper Bright Enterprises v. Raimondo (“Loper Bright”), the U.S. Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The Loper Bright decision could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program created under the IRA.
In the European Union, similar political, economic and regulatory developments may affect our ability to profitably commercialize our potential product candidates. In markets outside of the United States and the European Union, reimbursement and healthcare payment systems vary significantly by country, and many countries have instituted price ceilings on specific products and therapies. In some countries, particularly the countries of the European Union, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product. To obtain reimbursement or pricing approval in some countries, we may be required to conduct a clinical trial that compares the cost-effectiveness of any product candidates we may develop to other available therapies. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed, possibly materially.
Coverage and reimbursement
The regulations that govern marketing approvals, pricing, coverage and reimbursement for new drug products vary widely from country to country. Current and future legislation may significantly change the approval requirements in ways that could involve additional costs and cause delays in obtaining approvals. Some countries require approval of the sale price of a drug before it can be marketed. In many countries, the pricing review period begins after marketing or product licensing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, we might obtain marketing approval for a product in a particular country, but then be subject to price regulations that delay our commercial launch of the product, possibly for lengthy time periods, and negatively impact the revenues we are able to generate from the sale of the product in that country. Adverse pricing limitations may hinder our ability to recoup our investment in one or more product candidates, even if our product candidates obtain marketing approval.
Our ability to commercialize any product candidates successfully also will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels. Coverage and reimbursement by a third-party payor may depend upon a number of factors, including 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.
In the United States, there is no uniform policy of coverage and reimbursement for products that exists among third-party payors. As a result, obtaining coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and cost-effectiveness data for the use of our products on a payor-by- payor basis, with no assurance that coverage and adequate reimbursement will be obtained. The availability and adequacy of coverage and reimbursement by governmental healthcare programs such as Medicare and Medicaid, private health insurers and other third-party payors are essential for most patients to be able to afford our product candidates, if approved. Our ability to achieve acceptable levels of coverage and reimbursement for our product candidates, if approved, by governmental authorities, private health insurers and other organizations will have an effect on our ability to successfully commercialize, our product candidates. Assuming we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require patient out-of-pocket costs that patients find unacceptably high.
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. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products. Coverage and reimbursement may not be available for any product that we commercialize and, even if these are available, the level of reimbursement may not be satisfactory. Reimbursement may affect the demand for, or the price of, any product candidate for which we obtain marketing approval. Obtaining and maintaining adequate reimbursement for our products may be difficult. We may be required to conduct expensive pharmacoeconomic studies to justify coverage and reimbursement or the level of reimbursement relative to other therapies. Further, coverage policies and third-party payor reimbursement rates may change. Even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future. If coverage and adequate reimbursement are not available or reimbursement is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.
There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage may be more limited than the purposes for which the drug is approved by the FDA or similar regulatory authorities outside of the United States. Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution expenses. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be made permanent. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used, may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the United States. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement policies. Our inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors for any approved products that we develop could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our overall financial condition.
There can be no assurance that our product candidates, even if they are approved for sale in the United States or in other countries, will be considered medically reasonable and necessary for a specific indication or cost-effective by third-party payors, or that coverage and an adequate level of reimbursement will be available or that third-party payors’ reimbursement policies will not adversely affect our ability to sell our product candidates profitably.
Regulation outside of the United States
In addition to regulations in the United States, we will be required to comply with comparable regulations in each jurisdiction outside of the United States in which we choose to manufacture, develop or seek marketing authorization for our product candidates.
European Union drug development
Most countries outside of the United States require that clinical trial applications be submitted to and approved by the local regulatory authority for each clinical study. In the European Union, for example, an application must be submitted to the national competent authority and an independent ethics committee in each country in which we intend to conduct clinical trials, much like the FDA and IRB, respectively. Under the new Clinical Trials Regulation (EU) No 536/2014, which replaced the previous Clinical Trials Directive 2001/20/EC on January 31, 2022, a single application is now made through the Clinical Trials Information System for clinical trial authorization in up to 30 EU or European Economic Area (Norway, Iceland and Liechtenstein) (“EEA”) countries at the same time and with a single set of documentation.
The assessment of applications for clinical trials is divided into two parts (Part I contains scientific and medicinal product documentation and Part II contains the national and patient-level documentation). Part I is assessed by a coordinated review by the competent authorities of all European Union Member States in which an application for authorization of a clinical trial has been submitted (each, a “Member State Concerned”) of a draft report prepared by a Reference Member State. Part II is assessed separately by each Member State Concerned. The role of the relevant ethics committees in the assessment procedure continues to be governed by the national law of the Member State Concerned, however overall related timelines are defined by the Clinical Trials Regulation. The new Clinical Trials Regulation also provides for simplified reporting procedures for clinical trial sponsors.
European Union drug review and approval
In addition, whether or not we obtain FDA approval for a product, we must obtain approval of a product by the comparable regulatory authorities of countries outside the United States before we can commence marketing of the product in those countries. The approval process and requirements vary from country to country, so the number and type of nonclinical, clinical, and manufacturing studies needed may differ, and the time may be longer or shorter than that required for FDA approval.
To obtain regulatory approval for our medicinal product candidates in the European Union, a marketing authorization application (“MAA”) needs to be submitted. There are a number of potential routes open to obtain a marketing authorization (“MA”) in the European Union. A centralized MA is issued by the European Commission through the centralized procedure, based on the opinion of the Committee for Medicinal Products for Human Use (“CHMP”) of the EMA, and is valid throughout the European Union, and in the additional Member States of the EEA. The centralized procedure is compulsory for medicinal products manufactured using biotechnological processes, orphan medicinal products, advanced therapy medicinal products (gene-therapy, somatic cell-therapy or tissue-engineered medicines) and products containing a new active substance which is not yet authorized in the European Union and which is intended for the treatment of HIV, AIDS, cancer, neurodegenerative disorders, auto-immune and other immune dysfunctions, viral diseases or diabetes. The centralized procedure is optional for any other products containing new active substances not authorized in the European Union or for products which constitute a significant therapeutic, scientific, or technical innovation or for which a centralized authorization is in the interests of patients at European Union level.
National MAs are issued by the competent authorities of the EU Member States and only cover their respective territory. This procedure is available for product candidates not falling within the mandatory scope of the centralized procedure. Where a product has already been authorized for marketing in an EU Member State, this national MA can be recognized in another Member State through the mutual recognition procedure. If the product has not received a national MA in any Member State at the time of application, it can be approved simultaneously in various Member States through the decentralized procedure. Under the decentralized procedure an identical dossier is submitted to the competent authorities of each Member State in which the MA is sought, one of which is selected by the applicant as the Reference Member State.
Under the centralized procedure the maximum timeframe for the evaluation of an MAA 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. Clock stops may extend the timeframe of evaluation of an MAA considerably beyond 210 days. Where the CHMP gives a positive opinion, it provides the opinion together with supporting documentation to the European Commission, who make the final decision to grant a marketing authorization, which is issued within 67 days of receipt of the EMA’s recommendation. Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of 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, but it is possible that the CHMP may revert to the standard time limit for the centralized
procedure if it determines that the application is no longer appropriate to conduct an accelerated assessment. MAs in the European Union have an initial duration of five years. After these five years, the authorization may be renewed for an unlimited period on the basis of a re-evaluation of the risk-benefit balance.
Data protection regulation
In the European Economic Area (“EEA”), the collection and processing of personal data, including personal health data is regulated by the General Data Protection Regulation (EU) 2016/679 (“GDPR”). Similarly, in the United Kingdom, the collection and processing of personal data, including personal health data is regulated by the UK General Data Protection Regulation and the UK Data Protection Act 2018 (“UK GDPR” and together with the EU GDPR, referred to as “GDPR”). The GDPR has extra-territorial application and applies not only to organizations with a presence in the EEA and the UK but also to non-EEA/UK based businesses that carry out processing that is related to (i) an offer of goods or services to individuals in the EEA/UK or (ii) the monitoring of their behavior so long as this takes place in the EEA/UK, even if the data is stored outside the EEA/UK. The GDPR imposes obligations on businesses (including companies that operate in our industry) with respect to the processing of personal data and the cross-border transfer of such data. We will be subject to the GDPR to the extent we process the personal data of individuals based in the EEA/UK.
Employees and Human Capital
As of December 31, 2024, we had 51 full-time employees, 41 of whom were primarily engaged in research and development activities, and 22 of our employees had an M.D. or Ph.D. degree. None of our employees are represented by a labor union and we consider our employee relations to be good.
Our human capital objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards.
Corporate Information
Our common stock is listed on The Nasdaq Global Market under the symbol “TECX”.
We were incorporated under the laws of the State of Delaware in November 2015. Legacy Tectonic was incorporated under the laws of the State of Delaware in June 2019. Following the Merger with Tectonic Operating Company, Inc. (formerly Tectonic Therapeutic, Inc.) on June 20, 2024, we changed our name from AVROBIO, Inc. to Tectonic Therapeutic, Inc. Our principal executive office is located at 490 Arsenal Way, Suite 210, Watertown, Massachusetts 02472, and our telephone number is (339) 666-3320.
Our headquarters consist of approximately 19,000 square feet of leased research laboratory and office space under a lease that expires in January 2026. We believe that our facilities are adequate to meet our current needs.
Available Information
Our website is www.tectonictx.com. We may use our website to comply with disclosure obligations under Regulation FD. Therefore, investors should monitor our website in addition to following its press releases, filings with the SEC, public conference calls, and webcasts. The contents of our website are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only.