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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2018~~2019

o ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 001-35619

STEMLINE THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware		45-0522567
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

750 Lexington Avenue

Eleventh Floor

New York, New York 10022

(Address of principal executive offices, including zip code)

(646)-502-2311

(Registrant’s telephone number, including area code)

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

Common Stock, par value $0.0001 per share		NASDAQ Capital Market
(Title of Class)		(Name of Each Exchange on Which Registered)

Title of each class:		Trading Symbol(s)		Name of each exchange on which registered:
Common Stock		STML		Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o¨ Yes x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. o¨ Yes x No

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ~~xYes o~~ x Yes ¨ No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

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

Large accelerated filer o¨ Accelerated filer x Non-accelerated filer o¨ Smaller reporting company x Emerging growth company o¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). o¨ Yes x No

The aggregate market value of voting common stock held by non-affiliates of the registrant (assuming, for purposes of this calculation, without conceding, that all executive officers and directors are “affiliates”) was $~~448~~ 612,~~641~~997,~~317~~628 as of June 30, ~~2018~~2019, based on the closing sale price of such stock as reported on the NASDAQ Capital Market.

There were 4350,~~569~~375,~~081~~079 shares of the registrant’s common stock outstanding as of March 1516, ~~2019~~2020.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s Proxy Statement for the ~~2019~~2020 Annual Meeting of Stockholders are incorporated by reference in Part III of this Annual Report on Form 10-K.

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TABLE OF CONTENTS

Part I 1 Item 1. Business 1 Item 1A. Risk Factors 27 Item 1B. Unresolved Staff Comments 62 Item 2. Properties 62 Item 3. Legal Proceedings 62 Item 4. Mine Safety Disclosures 62 Part II 63 Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 63 Item 6. Selected Financial Data 65 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 66 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 77 Item 8. Financial Statements and Supplementary Data 77 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 77 Item 9A. Controls and Procedures 77 Item 9B. Other Information 78 Part III 79 Item 10. Directors, Executive Officers and Corporate Governance 79 Item 11. Executive Compensation 79 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 79 Item 13. Certain Relationships and Related Transactions and Director Independence 79 Item 14. Principal Accounting Fees and Services 79 Part IV 80 Item 15. Exhibits, Financial Statements Schedules 80 Item 16. Form 10-K Summary 82

Part I		1
Item 1.	Business	1
Item 1.A	Risk Factors	32
Item 1B.	Unresolved Staff Comments	72
Item 2.	Properties	72
Item 3.	Legal Proceedings	72
Item 4.	Mine Safety Disclosures	72
Part II		73
Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	73
Item 6.	Selected Financial Data	76
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	77
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	91
Item 8.	Consolidated Financial Statements and Supplementary Data	92
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	92
Item 9A.	Controls and Procedures	92
Item 9B.	Other Information	95
Part III		95
Item 10.	Directors, Executive Officers and Corporate Governance	95
Item 11.	Executive Compensation	95
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	95
Item 13.	Certain Relationships and Related Transactions and Director Independence	95
Item 14.	Principal Accounting Fees and Services	95
Part IV		95
Item 15.	Exhibits, Financial Statements Schedules	96
Item 16.	Form 10-K Summary	99

This Annual Report on Form 10-K contains trademarks and trade names of Stemline Therapeutics, Inc., including our name and logo. All other trademarks, service marks, or trade names referenced in this Annual Report on Form 10-K are the property of their respective owners.

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SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

This annual report on Form 10-K (“Form 10-K”) includes statements that are, or may be deemed, “forward-looking statements.” In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “will,” “should,” “approximately” or, in each case, their negative or other ~~variations~~variaions thereon or comparable terminology, although not all forward-looking statements contain these words. They appear in a number of places throughout this Form 10-K and include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, our history of net operating losses and uncertainty regarding our ability to obtain capital and achieve profitability, our ability to develop and commercialize our product candidates, our ability to advance our development programs, enroll our trials, and achieve clinical endpoints, our ability to use or expand our technology to build a pipeline of product candidates, our ability to obtain and maintain regulatory approval of our products and product candidates and comply with ongoing regulatory requirements, our ability to successfully operate in a competitive industry and gain market acceptance by physician, provider, patient, and payor communities, our reliance on third parties, unstable economic or market conditions, and our ability to obtain and adequately protect intellectual property rights for our product candidates.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events, competitive dynamics, and healthcare, regulatory and scientific developments and depend on the economic circumstances that may or may not occur in the future or may occur on longer or shorter timelines than anticipated. Although we believe that we have a reasonable basis for each forward-looking statement contained in this Form 10-K, we caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward-looking statements contained in this Form 10-K. In addition, even if our results of operations, financial condition and liquidity, and the development of the industry in which we operate are consistent with the forward-looking statements contained in this Form 10-K, they may not be predictive of results or developments in future periods.

Some of the factors that we believe could cause actual results or outcomes to differ from those anticipated or predicted include:

· the success ~~and timing~~ of our ~~Marketing~~launch ~~Authorization~~and ~~Application,~~commercialization orof ~~MAA,~~ELZONRIS® ~~submission~~in to the ~~European~~U.S. ~~Medicines~~and ~~Agency, or EMA~~abroad;

· the success ~~and timing~~ of our ~~clinical~~commercial ~~trials~~infrastructure ~~and preclinical studies for our product candidates~~buildout, ~~including site initiation~~launch, ~~institutional~~and ~~review~~commercialization ~~board~~in ~~approval,~~the ~~scientific~~U.S. ~~review committee approval, patient accrual, safety, tolerability~~ and ~~efficacy~~potentially ~~data~~in ~~observed,~~other ~~and~~regions ~~input~~of ~~from~~the ~~regulatory~~world ~~authorities,~~should ~~including~~ELZONRIS ~~the~~be ~~risk~~approved ~~that~~for ~~the~~marketing by ex-U.S. ~~Food~~regulatory ~~and~~authorities ~~Drug~~for ~~Administration,~~any orindication ~~FDA, EMA,~~ or ~~other~~by ~~ex-~~U.S. ~~national~~regulatory ~~drug~~authorities ~~authority,~~for ~~ultimately~~any ~~does~~as ~~not~~yet ~~agree~~unapproved ~~with~~indication ~~our~~or ~~data,~~should ~~find~~any of our ~~data~~other ~~supportive~~product ofcandidates ~~approval,~~be orapproved ~~approve~~for ~~any~~marketing ofin ~~our~~the ~~product~~U.S. ~~candidates~~or abroad;

· the ~~possibility~~success ~~that~~and ~~results~~timing of our clinical trials ~~are~~for ~~not~~ELZONRIS ~~predictive~~in ofunapproved ~~safety~~indications and ~~efficacy~~our ~~results~~other ofproduct ~~our~~candidates, ~~products~~including orrisks ~~product~~relating ~~candidates~~to inregulatory ~~broader~~authority approval, institutional review board approval, scientific review committee approval, site initiation, patient ~~populations~~accrual, ortrial results including safety and efficacy, and the relevance of ~~our~~trial ~~products~~results ifto ~~approved~~potentially viable regulatory pathways and commercialization efforts;

· ~~our~~ ~~ability~~the topossibility ~~successfully~~that ~~file~~results ~~and~~of ~~obtain~~clinical ~~timely~~trials ~~marketing~~are ~~approval~~not ~~from~~predictive ~~the~~of ~~FDA~~safety orand ~~comparable~~efficacy ~~foreign~~results ~~regulatory~~of ~~agency~~our ~~for~~products ~~one~~ or ~~more~~product ~~Biologics~~candidates ~~License~~in ~~Applications,~~broader or ~~BLAs,~~additional orpatient ~~New Drug Applications, NDAs or comparable foreign marketing authorization submissions~~populations;

· our ability to ~~obtain~~adhere ~~and~~to ~~maintain~~ongoing ~~marketing~~compliance ~~approval~~requirements ~~from~~of ~~regulatory~~all ~~agencies~~health ~~for~~authorities ~~our~~to ~~products~~which we are subject, in the U.S. and ~~foreign countries~~abroad;

· our ability to adhere to ongoing compliance requirements of all health authorities, in the U.S. and foreign countries;

our ability to obtain and maintain adequate reimbursement for our products;

· ~~our~~ ~~ability~~product toquality, ~~obtain~~efficacy ~~the~~or ~~desired~~safety ~~labeling~~concerns ofresulting ~~our~~in ~~products~~complaints, ~~under~~adverse ~~any~~events, ~~regulatory~~product ~~approval~~recalls weor ~~might~~regulatory ~~receive~~action;

· ~~our~~ ~~plans~~the torisk ~~develop~~that ~~and~~estimates ~~commercialize~~regarding ~~our~~the ~~product~~number ~~candidates,~~of ~~including,~~patients ~~but~~with ~~not~~the ~~limited~~diseases tothat ~~delays~~our inproducts ~~arranging~~and ~~satisfactory~~product ~~manufacturing~~candidates ~~capabilities~~are ~~and~~designed ~~establishing~~to ~~commercial~~treat ~~infrastructure~~are ~~for~~inaccurate, ~~sale~~do ofnot ~~our~~predict, ~~product~~or ~~candidates~~are not reflective of actual numbers;

~~· product efficacy or safety concerns resulting in product recalls or regulatory action;~~i

· ~~the~~ ~~risk~~our ~~that~~products ~~estimates~~not ~~regarding~~gaining ~~the~~acceptance ~~number~~among of patients, ~~with~~providers ~~the~~and/or ~~diseases~~third ~~that~~party ~~our~~payors, ~~products~~including ~~and~~governmental ~~product~~agencies, ~~candidates~~for ~~may~~certain ~~treat~~approved ~~are~~indications, ~~inaccurate~~due to cost or otherwise;

· our ~~products~~ability ~~not~~to ~~gaining~~maintain ~~acceptance among patients (and providers~~ or ~~third~~increase ~~party~~sales ~~payers)~~of ~~for certain indications (due to cost or otherwise)~~ELZONRIS;

· the risk that third party payors (including governmental agencies) will not reimburse for the use of ELZONRIS at acceptable rates or at all;

· our ability to maintain or increase sales of ELZONRISTM (tagraxofusp-erzs; SL-401);

· our ability to develop and commercialize our products;

the adequacy of our pharmacovigilance and drug safety reporting processes;

the successful development and implementation of sales and marketing campaigns;

· the loss of key management, scientific, or ~~management~~other personnel;

· the ~~size~~success and ~~growth~~timing of ~~the~~any ~~potential~~regulatory ~~markets~~filings for ELZONRIS, or any of our other product candidates, ~~and~~including ~~our~~for ~~ability~~approval toin ~~serve~~the ~~those~~U.S., ~~markets~~Europe, and other regions for any indication(s);

· ~~our~~ ~~ability~~changes toin ~~successfully~~regulations ~~compete~~ in the ~~potential~~U.S., ~~markets~~Europe ~~for~~and ~~our~~any ~~product~~other ~~candidates~~regions where ELZONRIS may be approved, ifmarketed ~~commercialized~~and sold;

i· new products, new product candidates or new uses for existing products or technologies introduced or announced, by our competitors, and the timing of these introductions or announcements;

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· regulatory developments in the United States and foreign countries;

· the rate and degree of market acceptance of any of our product candidates;

· new products, product candidates or new uses for existing products or technologies introduced or announced by our competitors and the timing of these introductions or announcements;

· market conditions in the pharmaceutical and biotechnology sectors;

our available cash and investments;

the accuracy of our estimates regarding expenses, future income or revenue, capital requirements and needs for additional financing;

our ability to obtain additional funding;

our ability to obtain and maintain intellectual property protection for our products and product candidates;

· delays, interruptions, or failures in the manufacture, supply and ~~supply~~distribution of our products and/or our product candidates;

our ability to maintain the license agreements for our products and product candidates;

· the ~~success~~ability ~~and timing~~ of our ~~preclinical~~third-party ~~studies,~~manufacturers ~~including~~to ~~those~~manufacture ~~intended~~and tosupply ~~support~~our anproducts, ~~Investigational~~and ~~New~~the ~~Drug~~performance of, orand ~~IND~~our reliance on, ~~application~~our third-party manufacturers and suppliers;

· the ~~ability~~performance of our ~~product~~third-party ~~candidates~~vendors, toincluding ~~successfully~~clinical ~~perform~~research ~~and~~organizations, ~~advance~~clinical intrial sponsors, and clinical ~~trials~~trial investigators;

· ~~our~~ ~~ability~~the tosuccess ~~obtain and maintain authorization from regulatory authorities for use~~ of our ~~product~~preclinical, ~~candidates~~non-clinical, ~~for~~and ~~the~~pre-investigational ~~initiation~~new ~~and~~drug, ~~conduct~~or ofpre-IND, ~~clinical trials~~efforts;

· ~~the~~ ~~ability of~~ our ~~third-party~~ability ~~manufacturers~~ to ~~manufacture and supply our products,~~ gain access to products we may plan to use in combination studies; and ~~the performance of, and reliance on, our third-party manufacturers and suppliers;~~

· ~~the~~ ~~performance~~our ofability ~~our~~to ~~clinical~~form ~~research~~corporate ~~organizations~~partnerships, ~~clinical~~should ~~trial~~that ~~sponsors,~~be ~~and~~an ~~clinical~~avenue ~~trial~~we ~~investigators;~~choose ~~and~~to pursue.

· our ability to successfully implement our strategy.

Any forward-looking statements that we make in this Form 10-K speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or circumstances after the date of this Form 10-K. You should also read carefully the factors described in the “Risk Factors” section of this Form 10-K to better understand the risks and uncertainties inherent in our business and underlying any forward-looking statements. As a result of these risks and uncertainties, our actual results may differ materially from those reflected in the forward-looking statements in this Form 10-K.

This Form 10-K includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third-parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data.

We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

~~Table~~This Form 10-K includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of ~~Contents~~such information. While we believe these industry publications and third-party research, surveys and studies are reliable, we have not independently verified such data.

iii

Part I

Unless the context requires otherwise, references in this report to “Stemline,” “Company,” “we,” “us” and “our” refer to Stemline Therapeutics, Inc.

Item 1. Business

Overview

We are a commercial-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing ~~innovative~~ oncology therapeutics. ELZONRIS® (tagraxofusp-erzs) Inwas ~~December 2018,~~approved by the U.S. Food and Drug Administration, or FDA, ~~approved~~and ~~our~~is ~~first~~commercially available ~~product,~~in ~~ELZONRISTM (tagraxofusp-erzs;~~the ~~SL-401)~~U.S., afor ~~targeted~~the ~~therapy~~treatment ~~directed~~of toadult ~~CD123~~and pediatric patients, ~~for~~two ~~the~~years ~~treatment~~and ofolder, with blastic plasmacytoid dendritic cell neoplasm, or BPDCN. ELZONRIS is the first treatment approved for BPDCN and the first approved CD123-directed therapy. In addition, we are also assessing ELZONRIS, as both single agent and in ~~adults~~combination, in a variety of other indications including Phase 1 and 2 clinical trials in ~~pediatric~~chronic ~~patients~~myelomonocytic ~~two~~leukemia, ~~years~~or CMML, myelofibrosis, or MF, multiple myeloma, or MM, and ~~older.~~acute ~~ELZONRIS~~myeloid ~~has~~leukemia, ~~been~~or ~~commercially~~AML, ~~available~~with inadditional ~~the~~trials Uplanned including a CD123+ all-comers trial.S. ~~since~~We ~~the~~are ~~end~~also advancing a pipeline of ~~January~~additional ~~2019~~novel therapeutic candidates, ~~and~~including ~~patients~~felezonexor (SL-801), ~~are~~an oral small molecule XPO-1 inhibitor currently ~~being~~in ~~treated~~an ongoing Phase 1 trial of patients with ~~ELZONRIS~~advanced solid tumors, and SL-1001, an oral small molecule RET (rearranged during transfection) kinase inhibitor currently in investigational ~~the~~new ~~commercial~~drug, ~~setting~~or IND, directed studies intended for patients with a variety of genetically-defined malignancies.

ELZONRIS regulatory and commercial

ELZONRIS is a targeted therapy directed to ~~the interleukin-3 receptor-a, or~~ CD123. ELZONRIS was approved by the FDA in December 2018 for the treatment of BPDCN in adults and in pediatric patients, two years and older. ELZONRIS ~~is the first drug ever approved for this indication, the first CD123-targeted agent approved, and is commercially available to patients with BPDCN in the U.S. ELZONRIS~~ was granted Breakthrough Therapy Designation, or BTD, for the treatment of BPDCN in August 2016. ELZONRIS was granted Orphan Drug Designation, or ODD, in the U.S. for ~~AML in February 2011 and~~ BPDCN in June 2013 and granted ODD in Europe for ~~AML~~BPDCN in ~~September~~November 2015. ELZONRIS is the first drug ever approved for this indication, the first CD123-targeted agent approved, and is commercially available to patients with BPDCN in ~~November 2015~~the U.S.

In ~~November~~January ~~2018~~2019, Stemline submitted a Marketing Authorization Application, or MAA, to the European Medicines Agency, or EMA, ~~granted~~seeking ~~accelerated~~approval ~~assessment~~of ELZONRIS for the ~~review~~ treatment of ~~the~~adult ~~marketing~~patients ~~authorization~~with BPDCN. The application is being reviewed on a standard timeline under the centralized procedure. In June 2019, we received the Day 120 List of Outstanding Issues, which include matters relating to clinical, non-clinical, quality, chemistry, manufacturing and controls, or ~~MAA~~CMC, and all stages of ~~ELZONRIS~~the ~~for~~clinical trial, including stage 4, which largely utilized a new lyophilized drug product formulation. We continue to interact with the ~~treatment~~EMA ofregarding ~~BPDCN~~the application. A ~~The~~scientific ~~MAA~~advisory ~~was~~group ~~submitted~~(SAG) meeting to discuss clinical data of tagraxofusp in patients with BPDCN was held on March 5th, 2020. Aspects of benefit-risk (i.e. efficacy and ~~validated~~safety) byof tagraxofusp as a therapy for BPDCN as well as other elements pertaining to the MAA procedure were discussed. Minutes of the meeting will be reflected in the European Public Assessment Report, or EPAR. We expect an opinion or further questions from the ~~EMA~~Committee for Medicinal Products for Human Use, or CHMP, in ~~January 2019~~mid-2020. In anticipation of potential regulatory approval, we have assessed European staffing and infrastructure needs, and have been hiring personnel to meet the needs of a possible second half of 2020 commercial launch in Europe.

In addition, Stemline has instituted a global Early Access Program, or EAP, whereby physicians may seek access to Stemline’s investigational medicine outside of a clinical trial and/or before it is commercially available.

ELZONRIS additional clinical activities

We are ~~also~~ seeking to broaden the commercial potential of ELZONRIS, globally, through ~~ongoing~~ clinical trials in additional indications including ~~chronic myelomonocytic leukemia~~CMML, ~~or CMML~~MF, and ~~myelofibrosis~~AML, oras ~~MF,~~maintenance ~~acute~~therapy ~~myeloid~~in BPDCN ~~leukemia,~~patients ~~or AML~~post-transplant, as well as planned trials in other indications. ~~Additional~~including ~~planned~~a ~~trials include BPDCN maintenance post-stem cell transplant and AML subsets that have the BPDCN diagnostic signature and/or are enriched for~~ CD123+ ~~expression~~all-comers trial.

Additional pipeline candidates

Our other pipeline candidates include: felezonexor (SL-801), a novel oral small molecule reversible inhibitor of XPO1, which is currently in a Phase 1 trial of patients with advanced solid tumors and recent data were presented at the ~~2018~~2019 European Society of Medical Oncology, or ESMO, annual conference;, and SL-~~701~~1001, an ~~immunotherapeutic~~oral, ~~which~~selective ~~has~~small ~~completed~~molecule aRET ~~Phase~~kinase 2inhibitor ~~trial~~that inhas ~~patients~~demonstrated ~~with~~potent, ~~second~~selective, preclinical anti-~~line~~cancer ~~glioblastoma~~activity ~~and~~in ~~recent~~RET-driven ~~data~~tumor ~~were~~models ~~presented~~and atis ~~the~~currently ~~2018~~in ~~Society for Neuro~~IND-~~Oncology,~~enabling orstudies. ~~SNO,~~Additional ~~annual~~candidates ~~conference;~~ include: SL-901, an oral, small molecule kinase inhibitor, assessed in an abbreviated Phase 1 trial of patients with solid tumors in Europe, currently ~~with~~in aInvestigational ~~novel~~Medicinal ~~profile~~Product ~~that~~Dossier, ~~could~~or ~~have potential in oncology and certain non~~IMPD-~~oncologic~~enabling ~~orphan~~studies, ~~diseases;~~ and SL-~~1001~~701, an ~~oral~~immunotherapeutic, ~~selective~~which ~~small molecule RET (rearranged during transfection) kinase inhibitor that~~ has ~~demonstrated~~completed a ~~potent,~~Phase ~~selective,~~2 ~~preclinical~~trial ~~anti-cancer~~in ~~activity~~patients inwith ~~RET~~second-~~driven~~line ~~tumor models~~glioblastoma.

Our Company

We were incorporated under the laws of the State of Delaware in August 2003. Our principal executive office is located at 750 Lexington Avenue, Eleventh Floor, New York, New York 10022 and our telephone number is (646) 502-2311.

Our website address is www.stemline.com. The information set forth on our website is not a part of this report. We will make available free of charge through our website our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, and any amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the Securities and Exchange Commission, or SEC. We are not including the information on our website as a part of, nor incorporating it by reference into, this report. ~~You~~The ~~may read and copy any materials we file at the~~ SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally, the SEC maintains a website that contains annual, quarterly, and current reports, proxy statements, and other information that issuers (including us) file electronically with the SEC. The SEC’s website address is http://www.sec.gov/.

Management

We are led by a team with extensive experience in the biopharmaceutical industry including:

1· Ivan Bergstein, M.D. — Chairman, Chief Executive Officer and President. Dr. Bergstein is Chief Executive Officer and Founder of Stemline Therapeutics. Dr. Bergstein has managed the company’s evolution from early-stage research and development to the FDA approval and commercial launch of its lead product, ELZONRIS. Prior to founding Stemline, Dr. Bergstein was Medical Director of Access Oncology, Inc., a clinical stage oncology-focused biotechnology company where he was a key member of a small team responsible for the acquisition and development of the company’s clinical stage assets and ultimately the sale of the company to Keryx Biopharmaceuticals, Inc. He received a BA in mathematics from the University of Pennsylvania, was elected to the Pi Mu Epsilon National Mathematics Honor Society, and was captain of the varsity wrestling team at Penn. He then received an MD from the Mount Sinai School of Medicine where he was elected to the Alpha Omega Alpha Honor Medical Society, received the Merck Award for Clinical Excellence, and subsequently completed an internship in general surgery. He then became the Jerome A. Urban Post-Doctoral Research Fellow at the Cornell University Medical College where he studied and published work relating to Wnt genes in human breast cancer. He then completed an internal medicine residency and hematology-oncology fellowship at the New York Presbyterian Hospital — Weill Medical College of Cornell University where he studied and published work on gene therapy manipulations of the sonic hedgehog pathway.

~~Table~~· Kenneth Hoberman — Chief Operating Officer. Mr. Hoberman has extensive financial, accounting, investor relations, corporate governance and business development experience including M&A, strategic alliances and partnerships both domestic and international. His operational expertise includes regulatory oversight, human resources, manufacturing and clinical development. He was previously Vice President of ~~Contents~~Corporate and Business Development of Keryx Biopharmaceuticals, Inc., where he was instrumental in the success of the company. He also helped secure multiple sources of capital including over $200 million in equity investments through public and private offerings. He also initiated and executed a $100 million strategic alliance and originated, negotiated and closed dozens of licensing and operational contracts, helping to grow the company’s market capitalization to over $1 billion. He also led the team that originated, in-licensed, and developed Auryxia™ which was approved by the FDA in September 2014. He is on the Board of Directors of TG Therapeutics, Inc. (Nasdaq: TGTX). He received a B.S.B.A. in Finance from Boston University and completed post-baccalaureate studies at Columbia University.

· Ivan Bergstein, M.D. — Chairman, Chief Executive Officer and President. Dr. Bergstein is Chief Executive Officer and Founder of Stemline Therapeutics. Dr. Bergstein has managed the company’s evolution from early-stage research and development to the FDA approval of its lead product, ELZONRIS. Prior to founding Stemline, Dr. Bergstein was Medical Director of Access Oncology, Inc., a clinical stage oncology-focused biotechnology company where he was a key member of a small team responsible for the acquisition and development of the company’s clinical stage assets and ultimately the sale of the company to Keryx Biopharmaceuticals, Inc. (Nasdaq: KERX). He received a BA in mathematics from the University of Pennsylvania, was elected to the Pi Mu Epsilon National Mathematics Honor Society, and was captain of the varsity wrestling team. He then received an MD from the Mount Sinai School of Medicine where he was elected to the Alpha Omega Alpha Honor Medical Society, received the Merck Award for Clinical Excellence, and subsequently completed an internship in general surgery. He then became the Jerome A. Urban Post-Doctoral Research Fellow at the Cornell University Medical College where he studied and published work relating to Wnt genes in human breast cancer. He then completed an internal medicine residency and hematology-oncology fellowship at the New York Presbyterian Hospital — Weill Medical College of Cornell University where he studied and published work on gene therapy manipulations of the sonic hedgehog pathway.2

· ~~Kenneth~~ ~~Hoberman~~David Gionco — Senior Vice President of Finance and Chief ~~Operating~~Accounting Officer. Mr. ~~Hoberman~~ ~~has~~Gionco ~~extensive~~was ~~financial,~~previously ~~accounting,~~Vice ~~investor relations~~President, ~~corporate~~Chief ~~governance~~Financial Officer and ~~business~~Chief ~~development~~Accounting ~~experience~~Officer ~~including~~of ~~M&A~~Savient Pharmaceuticals, ~~strategic~~Inc. ~~alliances~~where ~~and~~he ~~partnerships~~oversaw ~~both~~the ~~domestic~~finance ~~and~~function ~~international.~~for ~~His~~the ~~operational~~organization ~~expertise~~and ~~includes~~was ~~regulatory~~instrumental ~~oversight,~~in ~~human~~helping ~~resources,~~to ~~manufacturing~~grow ~~and~~the ~~clinical~~company, ~~development.~~raising Heover ~~was~~$350 ~~previously~~million. ~~Vice~~Prior ~~President~~to ofthis, ~~Corporate~~Mr. ~~and~~Gionco ~~Business~~held ~~Development~~audit, ofcorporate ~~Keryx Biopharmaceuticals~~accounting, ~~Inc.~~ ~~(Nasdaq:~~financial ~~KERX)~~planning, ~~where~~finance heand ~~was~~controller ~~instrumental~~roles inat ~~the~~companies ~~success~~including ofMerck ~~the~~& ~~company~~Co., HeInc. ~~also~~(“Merck”) ~~helped~~and, ~~secure~~previously, ~~multiple~~Medco ~~sources~~Health ofSolutions, ~~capital~~Inc., ~~including~~which ~~over~~was ~~$200~~acquired ~~million~~by inMerck ~~equity~~during ~~investments~~his ~~through~~tenure. ~~public~~At ~~and~~Merck, ~~private offerings~~Mr. HeGionco ~~also~~held ~~initiated~~various financial and ~~executed~~accounting apositions ~~$100~~of ~~million~~increasing ~~strategic~~responsibility. ~~alliance~~Mr. ~~and~~Gionco ~~originated,~~also ~~negotiated~~held ~~and~~senior ~~closed~~financial ~~dozens~~positions ofat ~~licensing~~Progenics ~~and operational contracts~~Pharmaceuticals, ~~helping~~Inc. to(Nasdaq: ~~grow~~PGNX) ~~the~~and ~~company’s~~Odyssey ~~market~~Pharmaceuticals, ~~capitalization to over $1 billion~~Inc. He(a ~~also~~subsidiary ~~led~~of ~~the team that originated~~Pliva, ~~in-licensed~~Inc., ~~and~~now ~~developed~~Teva ~~Auryxia™~~Pharmaceutical ~~which~~Industries ~~was~~Ltd. ~~approved~~(NYSE: byTEVA)). ~~the~~Mr. ~~FDA~~Gionco inpreviously ~~September 2014.~~had Heseven isyears onof ~~the~~financial ~~Board~~auditing ofexperience ~~Directors~~with ofa TGmajor ~~Therapeutics, Inc.~~public ~~(Nasdaq:~~accounting ~~TGTX)~~firm. HeMr. ~~received~~Gionco holds a B.S.~~B.A.~~ in ~~Finance~~Accounting from ~~Boston~~Fairleigh Dickinson University and ~~completed~~an ~~post-baccalaureate~~MBA ~~studies~~in atFinance ~~Columbia~~from Rutgers University. Mr. Gionco is a Certified Public Accountant in the State of New York.

· ~~David~~ ~~Gionco~~Robert Francomano — ~~Vice President of Finance and~~ Chief ~~Accounting~~Commercial Officer. Mr. ~~Gionco~~ ~~was~~Francomano ~~previously~~joined ~~Vice~~Stemline ~~President,~~Therapeutics ~~Chief~~in ~~Financial~~2016 ~~Officer~~ and ~~Chief~~is ~~Accounting~~responsible ~~Officer~~for ofleading ~~Savient Pharmaceuticals, Inc. where he oversaw~~ the ~~finance~~transformation ~~function~~of ~~for~~ the organization ~~and~~from ~~was~~a ~~instrumental~~clinical-stage inentity ~~helping~~ to ~~grow~~one ~~the~~with ~~company,~~a ~~raising~~full ~~over~~commercial ~~$350~~capability ~~million~~and infrastructure. ~~Prior to this,~~ Mr. ~~Gionco~~ ~~held~~Francomano ~~audit,~~brings ~~corporate~~more ~~accounting,~~than ~~financial~~25 ~~planning,~~years ~~finance~~of ~~and~~biopharmaceutical ~~controller~~experience ~~roles~~to ~~at companies including Merck & Co.~~Stemline, ~~Inc.~~ ~~(“Merck”)~~with ~~and,~~the ~~previously,~~majority ~~Medco~~of ~~Health~~time ~~Solutions, Inc.,~~spent ~~which~~in ~~was~~the ~~acquired~~hematology/oncology bytherapeutic ~~Merck during his tenure~~area. AtPrior ~~Merck~~to Stemline, ~~Mr. Gionco~~Robert held ~~various~~several ~~financial~~key ~~and~~roles ~~accounting positions~~ of increasing responsibility. ~~Mr. Gionco~~within ~~also~~the ~~held~~oncology ~~senior~~divisions ~~financial~~of ~~positions~~Baxalta, ~~at Progenics Pharmaceuticals~~Pfizer, ~~Inc.~~ ~~(Nasdaq:~~GlaxoSmithKline ~~PGNX)~~ and ~~Odyssey~~AstraZeneca ~~Pharmaceuticals, Inc.~~with (aworkstreams ~~subsidiary~~that ofspanned ~~Pliva, Inc.,~~the ~~now~~life ~~Teva~~cycle ~~Pharmaceutical~~continuum ~~Industries~~from ~~Ltd.~~asset ~~(NYSE:~~discovery ~~TEVA)). Mr. Gionco~~through ~~previously~~patent ~~had seven (7) years of financial auditing experience with a major public accounting firm~~expiry. Mr. ~~Gionco~~ ~~holds~~Francomano earned a ~~B.S.~~bachelor’s degree in ~~Accounting~~marketing/management from ~~Fairleigh~~Siena ~~Dickinson~~College ~~University~~(NY) and an MBA ~~in Finance~~ from ~~Rutgers~~the University. ~~Mr. Gionco~~of isAlbany with a ~~Certified~~concentration ~~Public Accountant~~ in ~~the~~pharmaceutical/chemical ~~State of New York~~studies.

· Robert Francomano — Senior Vice President and Global Head of Commercial. Mr. Francomano joined Stemline Therapeutics in 2016 and is responsible for leading the transformation of the organization from a clinical-stage entity to one with a full commercial capability and infrastructure. Mr. Francomano brings more than 25 years of biopharmaceutical experience to Stemline, with the majority of time spent in the hematology/oncology therapeutic area. Prior to Stemline, Robert held several key roles of increasing responsibility within the oncology divisions of Baxalta, Pfizer, GlaxoSmithKline and AstraZeneca with workstreams that spanned the life cycle continuum from asset discovery through patent expiry. Mr. Francomano earned a bachelor’s degree in marketing/management from Siena College (NY) and an MBA from the University of Albany with a concentration in pharmaceutical/chemical studies.

Strategy

Our goal is to build a leading biopharmaceutical company focused on improving the lives of patients by developing and commercializing innovative therapeutics for difficult-to-treat cancers. The fundamental components of our business strategy to achieve this goal include the following:

Commercialize ELZONRIS in the U.S. On December 21, 2018, the FDA granted approval of ELZONRIS for the treatment of BPDCN in adults and pediatric patients two years and older, in both treatment-naïve and previously-treated populations. ELZONRIS is the first treatment approved for BPDCN and the first approved CD123-targeted therapy. In an effort to optimize commercial success, we have invested and continue to invest in disease awareness and an infrastructure that includes sales professionals, marketing, medical affairs, and reimbursement specialists.

· Assess ELZONRIS in additional indications. We are also assessing ELZONRIS as monotherapy in additional indications including in Phase 1/2 trials of patients with CMML and MF. ELZONRIS is also being assessed in Phase 1/2 trials of other indications including AML and multiple myeloma, in combination with other therapies. A CD123+ all-comers trial is also being planned.

~~Table~~· Obtain approval and commercialize ELZONRIS in the E.U. Stemline submitted a MAA in January 2019 to the EMA seeking approval of ~~Contents~~ELZONRIS for the treatment of adult patients with BPDCN. The MAA was accepted and is currently under review by the EMA. The application is being reviewed on a standard timeline under the centralized procedure. A SAG in the EU met in March 2020. We are in the process of building out a commercial infrastructure, including the hiring of commercial personnel, in Europe to meet the needs of a possible European commercial launch in the second half of 2020 should ELZONRIS obtain approval in the E.U.

· Obtain approval and commercialize ELZONRIS in the E.U. Stemline submitted a Marketing Authorization Application, or MAA, in January 2019 to the European Medicines Agency, or EMA, seeking approval of ELZONRIS for the treatment of adult patients with BPDCN. The MAA was validated and is currently under review by the EMA. The MAA was granted accelerated assessment in November 2018 by the EMA. We are in the process of analyzing and planning to subsequently implement the medical and commercial infrastructure build-out in the region should ELZONRIS obtain approval.3

· Assess ~~ELZONRIS~~felezonexor (SL-801) in ~~additional~~a ~~indications~~variety of cancer types. We are ~~also~~ assessing ~~ELZONRIS~~felezonexor as(SL-801) ~~monotherapy~~ in ~~additional~~a ~~indications including in~~ Phase 1/2 ~~trials~~trial of adult patients with ~~chronic~~advanced ~~myelomonocytic~~solid ~~leukemia,~~tumors. orPatients ~~CMML,~~are ~~and~~currently ~~myelofibrosis,~~enrolling orin ~~MF.~~this ~~ELZONRIS~~dose isescalation ~~also~~study ~~being~~and ~~assessed~~we inare ~~Phase~~assessing ~~1/2~~safety, ~~trials of other indications~~ including ~~acute~~attempting ~~myeloid~~to ~~leukemia,~~identify ora ~~AML,~~recommended dose and ~~multiple~~administration ~~myeloma~~schedule, inas ~~combination~~well ~~with~~as ~~other~~potential ~~therapies~~efficacy.

· ~~Assess~~ Develop SL-~~801~~1001 in acertain ~~variety~~genetically-defined ~~of cancer types~~tumors. We are assessing SL-~~801~~1001, in a ~~Phase~~novel 1RET ~~trial~~kinase ofinhibitor, ~~adult~~which ~~patients~~is ~~with advanced solid tumors. Patients are~~ currently ~~enrolling~~ in ~~this~~IND-enabling ~~dose~~studies ~~escalation~~with ~~study~~anticipation ~~and~~of weentering ~~are~~clinical ~~assessing~~trials ~~safety,~~in ~~including attempting to identify a recommended dose and administration schedule, as well as potential efficacy~~2021.

· Develop SL-701 in brain cancer. We have completed a Phase 2 trial of SL-701 in adult patients with second-line glioblastoma multiforme, or GBM. Patients received SL-701 alone, or in combination with bevacizumab, with immunostimulants. Data are being analyzed and we expect to provide updates for the program later this year.

· Advance the rest of our pipeline, including SL-901 and SL-1001. We plan to manufacture and conduct IND-enabling studies for SL-901 and SL-1001 in an effort to conduct clinical trials.

ELZONRIS

Overview

ELZONRIS is a novel targeted therapy directed to the interleukin-3 receptor-a, or CD123, a target present on a wide range of malignancies as well as some autoimmune disorders. ELZONRIS has been approved by the FDA for the treatment of BPDCN in adults and in pediatric patients two years and older, in both treatment-naïve and previously-treated populations. ELZONRIS is the first treatment approved for BPDCN and the first approved CD123-targeted therapy. The ELZONRIS label contains a boxed warning for capillary leak syndrome, or CLS, which may be life-threatening or fatal. Physicians are advised to monitor for signs and symptoms of CLS and take actions as recommended in the full prescribing information.

BPDCN, formerly known as blastic NK-cell lymphoma, is an aggressive, orphan hematologic malignancy with historically poor outcomes. BPDCN may present with features similar to, and can be mistaken for, certain diseases including ~~acute myeloid leukemia, or~~ AML, non-Hodgkin’s lymphoma, or NHL, acute lymphocytic leukemia, or ALL, myelodysplastic syndrome, or MDS, and ~~chronic myelomonocytic leukemia, or~~ CMML, asand ~~well as~~ other malignancies including those with skin manifestations as well as certain or non-malignant cutaneous conditions. BPDCN typically presents in the bone marrow and/or skin, and may also involve lymph nodes and viscera. The diagnosis of BPDCN is based on the immunophenotypic diagnostic triad of CD123, CD4, and CD56, as well as other markers including TCL-1.

ELZONRIS is designed to specifically target CD123. CD123 is ~~highly~~ expressed on BPDCN and is a key marker, as a part of a triad of markers, that enables proper diagnosis of BPDCN. Additionally, CD123 represents a potential target for therapeutic research in a variety of cancers beyond BPDCN, as well as certain autoimmune disorders. Expression of CD123 has also been associated with poor prognosis and clinical outcomes in additional diseases including AML and CMML.

~~ELZONRIS~~In ~~was granted Breakthrough Therapy Designation, or BTD, in by the FDA August~~April ~~2016. ELZONRIS was granted Orphan Drug Designation~~2019, ~~or ODD, by~~ the ~~FDA~~pivotal ~~for~~trial ~~BPDCN~~results inof ~~June 2013~~ELZONRIS ~~and AML~~ in patients ~~February 2011~~with ~~and was granted ODD by the EMA for~~ BPDCN inwere ~~November 2015~~published ~~and AML~~ in ~~September 2015. The ELZONRIS Biologics License Application, or BLA, was evaluated under Priority Review and approved by~~ the ~~FDA in December~~April ~~2018,~~25 ~~two~~issue ~~months ahead~~ of ~~its~~the ~~Prescription~~New ~~Drug~~England ~~User~~Journal ~~Fee~~of ~~Act, or PDUFA, action date~~Medicine.

In June 2019, ELZONRIS clinical data were presented at the 2019 American Society of Clinical Oncology, or ASCO, annual meeting in Chicago, Illinois and at the 24th Congress of the European Hematology Association, or EHA, in Amsterdam, Netherlands. Presentations included results from ongoing Phase 2 clinical trials of ELZONRIS monotherapy in relapsed/refractory CMML and relapsed/refractory MF. In October 2019, ELZONRIS clinical data from the pivotal trial in BPDCN were presented at the 81st Annual Meeting of the Japanese Society of Hematology, or JSH, in Tokyo, Japan. In November 2019, ELZONRIS preclinical results in systemic sclerosis, an autoimmune disorder in which CD123+ plasmacytoid dendritic cells, or pDCs, play a role in disease pathogenesis, were presented at the 2019 American College of Rheumatology, or ACR, annual meeting in Atlanta, Georgia. In December 2019, ELZONRIS clinical and preclinical data were presented at the 2019 American Society of Hematology, or ASH, annual meeting in Orlando, Florida. Presentations included results from ongoing Phase 2 clinical trials of ELZONRIS as monotherapy in patients with relapsed/refractory MF and in combination with pomalidomide and dexamethasone in patients with relapsed/refractory multiple myeloma. Preclinical data of ELZONRIS in combination with other agents in myeloproliferative neoplasms was also presented.

The FDA granted ELZONRIS BTD for the treatment of BPDCN in August 2016, and ODD for AML in February 2011 and ODD for BPDCN in June 2013. The EMA granted ELZONRIS ODD for AML in September 2015 and ODD for BPDCN in November 2015. The FDA granted the ELZONRIS Biologics License Application, or BLA, Priority Review and subsequently approved the BLA on December 21, 2018, two months ahead of its February 21, 2019, Prescription Drug User Fee Act, or PDUFA, date. In January 2019, Stemline submitted a MAA to the EMA, seeking approval of ELZONRIS for the treatment of adult patients with BPDCN. The application is being reviewed on a standard timeline under the centralized procedure. A SAG met during March 2020.

In addition to ELZONRIS, our pipeline of product candidates includes: felezonexor (SL-801, an XPO1 inhibitor), SL-1001 (a RET kinase inhibitor), SL-901 (a kinase inhibitor) and SL-701 (an immunotherapy).

ELZONRIS for blastic plasmacytoid dendritic cell neoplasm (BPDCN)

ELZONRIS is the first treatment approved for BPDCN and the first approved CD123-targeted therapy.

BPDCN is an aggressive hematologic cancer that carries a poor prognosis. BPDCN had been previously classified as blastic NK cell lymphoma, agranular CD4+/CD56+ hematodermic neoplasm, and plasmacytoid dendritic cell cancer. In 2008, this disease was renamed BPDCN by the World Health Organization, or WHO, due to the realization of its derivation from plasmacytoid dendritic cells, or pDCs, which are specialized immune cells.

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renamed BPDCN by the World Health Organization, or WHO, due to the realization of its derivation from plasmacytoid dendritic cells, or pDCs, which are specialized immune cells.

BPDCN is an aggressive malignancy that most commonly affects middle-aged and older patients and is approximately three times more common in men than women. This malignancy typically presents with skin lesions, as well as bone marrow involvement. BPDCN growth in the bone marrow results in decreased blood cell counts, which can lead to serious infections, fatigue, bleeding, and death. BPDCN has had historically poor outcomes and was considered an area of unmet medical need prior to the approval of ELZONRIS.

ELZONRIS mechanism of action

ELZONRIS is a novel targeted therapy directed to CD123. ELZONRIS is comprised of human IL-3 recombinantly fused to a truncated diphtheria toxin, or DT, payload engineered such that IL-3 replaces the native DT receptor-binding domain. In this way, the IL-3 domain of ELZONRIS directs the cytotoxic DT payload to cells expressing CD123. Upon internalization, ELZONRIS irreversibly inhibits protein synthesis and induces apoptosis of the target cell.

CD123

CD123 is normally expressed on certain maturing hematopoietic cells, including maturing myeloid cells, B cells, plasmacytoid dendritic cells, or pDCs, mast cells, basophils and eosinophils, and appears to be involved in cell maturation, differentiation, and survival. CD123 expression appears to be lower on normal hematopoietic stem cells.

CD123 is expressed on multiple malignancies, to varying extents, including BPDCN, AML, certain myeloproliferative neoplasms, or MPNs, myelodysplastic syndrome, or MDS, CMML, B-cell acute lymphoid leukemia, or B-ALL, hairy cell leukemia, Hodgkin’s and certain non-Hodgkin’s lymphomas. In addition to expression on tumor bulk, CD123 expression has been reported on the cancer stem cells, or CSCs, of certain hematologic cancers including AML, CMML, MDS, and potentially T-cell ALL. In addition, elevated CD123 expression has been correlated with poor prognosis in certain hematologic cancers.

CD123⁺ plasmacytoid dendritic cells (pDCs)

CD123⁺ pDCs are the cell of origin for BPDCN. Notably, CD123⁺ pDCs have also been reported in the microenvironment of several tumor types including multiple myeloma, CMML and other MPNs including myelofibrosis, or MF, and mastocytosis, as well as AML and some solid tumors where they may play a tumor-promoting role. In several cases, including CMML and AML, tumor microenvironmental pDCs have been shown to be neoplastic and part of the malignant clone, indicating a potential need for therapeutic targeting. Accordingly, the potential to target neoplastic pDCs with ELZONRIS in a variety of tumor types, both hematologic and possibly solid, could provide significant label and market expansion opportunities.

CD123+ pDCs have also been implicated in the pathogenesis of certain autoimmune diseases, including scleroderma and cutaneous lupus, and is a potential therapeutic target for these conditions. We are conducting preclinical research in this area and preclinical data presented at the Annual European Congress of Rheumatology, or EULAR, demonstrated the cytotoxic activity of ELZONRIS ~~clinical~~against ~~trial~~potentially ~~design~~pathogenic pDCs. This data suggests depleting pDCs or attenuation of pDC function could represent a potentially novel approach for the treatment of systemic sclerosis and certain other autoimmune disorders. In November 2019, ELZONRIS preclinical results in systemic sclerosis, an autoimmune disorder in which CD123+ pDCs play a role in disease pathogenesis, were presented at the 2019 American College of Rheumatology, or ACR, annual meeting in Atlanta, Georgia.

The ELZONRIS clinical trial, we believe, was the largest prospective trial ever conducted in BPDCN. This multicenter, multi-cohort, open-label, single-arm, clinical trial (STML-401-0114; NCT 02113982) enrolled 47 patients with BPDCN, including 32 treatment-naïve and 15 previously-treated patients, at seven sites in the U.S. Patients received ELZONRIS intravenously on days 1-5 of a 21-day cycle for multiple consecutive cycles. The trial consisted of three stages: Stage 1 (lead-in, dose escalation), Stage 2 (expansion) and Stage 3 (pivotal, confirmatory). Patients were also enrolled in an additional cohort (Stage 4) to enable uninterrupted access to ELZONRIS.

ELZONRIS clinical trial results

FDA approval was based on STML-401-0114 (NCT 02113982), which was conducted in patients with treatment-naïve or previously-treated BPDCN.

Clinical data from Stages 1, 2, and 3 of Study STML-401-0114 (NCT 02113982) were presented at the American Society of Hematology, or ASH, 2018 annual meeting. In 29 treatment-naïve patients who received ELZONRIS at 12 mcg/kg/day, the overall response rate (ORR) was 90 percent (26/29) (95% CI: 72.6, 97.8). In these patients, the CR/CRc rate was 72 percent (21/29) (95% CI: 52.8, 87.3) with a median duration of CR/CRc not reached (range: 1.3 to 32.2 months). Forty-five percent (13/29) of these patients were bridged to stem cell transplant, or SCT, following remission on ELZONRIS. In the Stage 3 (pivotal) cohort, 13 patients with

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treatment-naïve BPDCN received ELZONRIS at the labeled dose and schedule. Efficacy was based on the rate of complete response or clinical complete response (CR/CRc), with CRc defined as complete response with residual skin abnormality not indicative of active disease. In this pivotal cohort, the CR/CRc rate was 53.8 percent (7/13) (95% CI: 25.1, 80.8), and the median duration of CR/CRc was not reached (range: 3.9 to 12.2 months).

The safety of ELZONRIS was assessed in 94 adults with treatment-naïve or previously-treated myeloid malignancies treated with ELZONRIS at the labeled dose and schedule. The most common adverse reactions (incidence >30%) were CLS, nausea, fatigue, peripheral edema, pyrexia, and weight increase. The most common laboratory abnormalities (incidence >50%) were decreases in albumin, platelets, hemoglobin, calcium, sodium, and increases in glucose, alanine aminotransferase (ALT) and aspartate aminotransferase (AST). CLS, defined as any event reported as CLS during treatment with ELZONRIS or the occurrence of at least two (2) of the following CLS manifestations within seven (7) days of each other: hypoalbuminemia, edema, or hypotension, in clinical trials was 55% in patients receiving ELZONRIS, including grades 1 or 2 in 46% (43/94), grade 3 in 6% (6/94), grade 4 in 1% (1/94), and two (2) fatal events (2/94, 2%). In an additional 76 patients treated with ELZONRIS at 12 mcg/kg/day in all schedules, there were the following investigator-assessed CLS events: 3 grade 3 (4%), 1 grade 4 (1%) and 1 fatal event (1%). A myocardial infarction, grade 5, was reported in the grade 4 patient with CLS.

As presented at ASH 2018, the median overall survival, or OS, among 29 treatment-naïve patients who received ELZONRIS at 12 mcg/kg/day was not reached at the time of analysis (range: 0.2 to 42.0 months, with median follow-up of 23.0 months [range: 0.2 to 41+ months]).

ELZONRIS regulatory and commercial

On December 21, 2018, the FDA granted full approval of ELZONRIS for the treatment of BPDCN in adult and in pediatric patients two years and older, in both treatment-naïve and previously-treated populations. ~~Previously, the FDA granted~~ ELZONRIS ~~breakthrough therapy designation, or BTD, and orphan drug designation, or ODD, and evaluated the ELZONRIS biologics license application, or BLA, under Priority Review. ELZONRIS~~ is commercially available in the U.S.

Stemline is committed to helping patients with BPDCN in the U.S. access ELZONRIS through the Stemline ARC™® program. Stemline ARC is a comprehensive access program designed to provide support, information and assistance to patients prescribed ELZONRIS. Dedicated oncology nurse advocates are available to provide personalized education about BPDCN and ELZONRIS to patients and their caregivers, and to connect ~~them~~patients ~~with~~and their caregivers with helpful tools and resources. Stemline ARC offers a copay assistance program for patients with commercial insurance who qualify. Stemline is also partnering with patient advocacy groups to support the needs of other patients with BPDCN in the U.S.

In January 2019, Stemline submitted a ~~Marketing Authorization Application, or~~ MAA, to the ~~European Medicines Agency, or~~ EMA, seeking approval of ELZONRIS for the treatment of adult patients with BPDCN. The ~~MAA~~application is ~~currently~~being reviewed on a standard timeline under the ~~review~~centralized byprocedure. A SAG in the ~~EMA~~EU met in March 2020. ~~Previously,~~We are in the ~~MAA~~process ~~was~~of ~~granted~~building out ~~accelerated~~a ~~assessment~~commercial infrastructure in ~~November 2018~~Europe byshould ~~the~~ELZONRIS ~~EMA~~obtain approval.

Stemline’s commercial group is primarily focused on effectively launching and commercializing ELZONRIS in the U.S., ~~as well as preparing for a potential European launch.~~ The commercial ~~function~~group is comprised of a wide range of functions including ~~access & reimbursement~~commercial operations, sales, marketing, and ~~commercial~~market ~~operations~~access and reimbursement. Additionally, the organization has established a medical affairs presence in the field which is predominantly staffed by medical science ~~liasions~~liaisons. ~~The~~We ~~aforementioned~~aim ~~functions represent the necessary infrastructure~~ to ~~support~~build aon ~~successful~~this ~~launch~~field ofpresence ~~ELZONRIS in BPDCN. Over the past several years, the organization has been focused~~ based on ~~preparing~~routine ~~the~~reviews ~~market,~~of the ~~product,~~business and ~~the organization for the successful launch of ELZONRIS~~market. InFor ~~December 2017~~2020, we ~~launched~~anticipate ~~our~~adding ~~BPDCN~~diagnostic disease awareness campaign at the American Society of Hematology, or ASH, Annual Meeting. One of the campaign’s primary goals is to try to ensure that multidisciplinary healthcare professionals, including hematologist-oncologists, dermatologists, pathologists, and ~~allied~~telephonic ~~healthcare~~sales ~~professionals~~teams ~~are appropriately testing for CD123~~ to ~~bring~~further enhance the diagnosis of BPDCN to the forefront and to limit misdiagnoses and underdiagnoses. The campaign highlights the importance of CD123 as a key diagnostic marker for correct patient diagnosis. Access to ELZONRIS remains a top priority within our managed care group with key success criteria identified as removing hurdles to product ~~access and reimbursement~~uptake. We ~~have~~believe ~~set~~the upaforementioned afunctions ~~formal~~represent patient assistance program and have funded an independent 501(c)(3) foundation for those medicare patients that require assistance. Marketing, sales and medical affairs staffing efforts are scaled up to the ~~“right~~necessary ~~size.” As a next step, European staffing and~~ infrastructure ~~needs are being assessed~~ to ~~enact~~support a ~~similar~~successful launch ~~“right~~of ~~size”~~ELZONRIS ~~approach~~in toBPDCN ~~meet~~in the ~~needs of a potential EU launch~~U.S.

Over the past several years, the organization has been focused on preparing the market, the product, and the organization for the successful launch of ELZONRIS. In December 2017, we initiated our BPDCN disease awareness campaign at the American Society of Hematology, or ASH, annual meeting. One of the campaign’s primary goals has been to educate multidisciplinary healthcare professionals, including hematologist-oncologists, dermatologists, pathologists, and allied healthcare professionals about, among other things, the appropriate testing for CD123 in order to bring the diagnosis of BPDCN to the forefront, while limiting misdiagnoses and underdiagnoses. The campaign highlighted the importance of CD123 as a key diagnostic marker for correct patient identification. Beyond BPDCN, CD123 may have additional utility in identifying other hematologic cancer patient subsets, including those with poor prognosis AML or CMML.

Access to ELZONRIS remains a top priority within our managed care group, with key success criteria identified as removing hurdles to product access and reimbursement. The Centers for Medicare & Medicaid Services, or CMS, granted approval for a New Technology Add-On Payment, or NTAP, for ELZONRIS for the treatment of BPDCN, as well as a new ELZONRIS-specific J-code. Both of these milestones went into effect on October 1, 2019. NTAP is intended to support Medicare beneficiaries’ access to ELZONRIS by providing an incremental payment to hospitals for qualifying Medicare inpatient cases. A J-code is a permanent code assigned by CMS and used by Medicare, Medicaid, and commercial payers for billing and claims processing specific to ELZONRIS. We have also set up a formal patient support program and commercial co-payment assistance program known as the Stemline ARC program and have donated to an independent 501(c)(3) foundation for patients with BPDCN that require assistance.

ELZONRIS Clinical Trials in Additional Indications

We are also conducting additional clinical development activities with ELZONRIS including in Phase 1/2 clinical trials of patients with ~~chronic myelomonocytic leukemia, or~~ CMML, ~~patients with myelofibrosis~~MF, orand MFAML, and ~~patients~~other ~~with~~trials ~~other~~are ~~indications~~planned.

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Chronic Myelomonocytic Leukemia (CMML)

At the ~~2018~~2019 ~~ASH~~EHA ~~annual~~and ~~conference~~ASCO inannual ~~December 2018~~conferences, we reported Phase 1/2 data from 2023 patients with relapsed/refractory CMML who received ELZONRIS as a monotherapy in Stage 1 (lead-in, dose escalation stage) and Stage 2 (expansion stage). ~~Stage~~A 1new ~~has completed enrollment, and~~ Stage 23a cohort is ~~ongoing,~~now ~~with~~open ~~patient~~for enrollment ~~and follow-up continuing~~. In Stage 1, ELZONRIS at 12 mcg/kg/day for 3 days every 3-6 weeks was the highest tested dose for CMML, and a maximum tolerated dose, or MTD, was not reached. In Stage 2, patients are receiving ELZONRIS at 12 mcg/kg/day for three (3) days every 3-6 weeks.

~~Median~~In ~~age~~Stage ~~was~~1, ~~69.5~~ELZONRIS ~~years~~at ~~(range:~~12 ~~43-80); 80% were male. 50% (10~~mcg/~~20)~~kg/day offor ~~patients~~3 ~~had~~days ~~baseline~~every ~~splenomegaly~~3-6 ~~by physical examination (measured in centimeters that spleen~~ weeks was ~~palpable below~~ the ~~left~~highest ~~costal~~tested ~~margin).~~dose ~~The~~for ~~most~~CMML, ~~common~~and ~~treatment-related~~a ~~adverse~~maximum ~~events~~tolerated dose, or ~~TRAEs~~MTD, ~~were~~was ~~hypoalbuminemia~~not ~~and~~reached. ~~thrombocytopenia~~In ~~(each~~Stage ~~35%)~~2, ~~vomiting~~patients ~~and~~are ~~nausea~~receiving ELZONRIS ~~(each~~at ~~30%),~~12 ~~fatigue~~mcg/kg/day ~~and~~for ~~edema~~three ~~peripheral~~ (~~each 20%). CLS was reported in 15% (~~3~~/20~~) days ofevery ~~patients; all three cases were grade 2. The most common TRAEs, grade~~ 3+,-6 ~~were thrombocytopenia (35%) and nausea (5%)~~weeks.

~~ELZONRIS~~Median ~~monotherapy~~age ~~demonstrated~~was ~~improvements~~69 inyears ~~splenomegaly~~(range: ~~and~~42-80); ~~bone~~83% ~~marrow~~were ~~complete responses, or CRs, in patients with relapsed/refractory CMML~~male. ~~100~~52% (1012/1023) of ~~evaluable~~ patients ~~with~~had baseline splenomegaly, by physical examination, ~~had~~(measured ain centimeters that spleen ~~response:~~was ~~80%~~palpable ~~(8/10)~~below ofthe ~~these~~left costal ~~patients~~margin). ~~had~~The ~~splenomegaly~~most ~~reductions~~common bytreatment-related atadverse ~~least~~events, ~~50%~~or TRAEs, ~~and~~were ~~67%~~hypoalbuminemia (~~4/6~~35%), ofthrombocytopenia ~~these~~(30%), vomiting ~~patients~~and ~~with~~nausea ~~baseline~~(each ~~splenomegaly~~26%), ofand 5anaemia cm(22%). orThere ~~more~~were ~~below~~3 ~~the~~cases ~~left costal margin had splenomegaly reductions~~ of atcapillary ~~least~~leak ~~50%.~~syndrome; Inall ~~addition,~~ three ~~patients~~cases ~~had~~were ~~bone~~grade ~~marrow~~2. The ~~CRs~~most ~~including~~common ~~one~~TRAEs, ~~patient~~grade ~~who~~3+, ~~was~~were ~~bridged~~thrombocytopenia to(30%), ~~stem~~anaemia ~~cell transplant~~(17%), orand ~~SCT~~nausea (4%).

~~Based~~ELZONRIS onmonotherapy ~~results~~demonstrated ~~observed~~improvements in ~~this~~splenomegaly and ~~trial~~bone ~~thus~~marrow ~~far~~complete responses, ~~the~~or ~~potential~~CRs, ~~unmet~~in ~~medical~~patients ~~need~~with in relapsed/refractory CMML,. ~~and~~100% ~~feedback~~(12/12) ~~from~~of ~~investigators~~evaluable patients with baseline splenomegaly, weby ~~are~~physical ~~planning~~examination, tohad ~~discuss~~a ~~registration-directed~~spleen ~~plans~~response: ~~with~~67% ~~the~~(8/12) ~~FDA~~of ~~mid-year~~these patients had splenomegaly reductions by at least 50%, ~~with~~and ~~the~~50% ~~goal~~(4/8) of ~~initiating~~these apatients ~~registration-directed~~with ~~trial~~baseline splenomegaly of 5 cm or ~~cohort.~~more ~~The~~below ~~current~~the ~~ongoing~~left ~~trial~~costal ismargin ~~continuing~~had tosplenomegaly reductions ~~enroll~~of at least 50%. In addition, three patients ~~and~~had webone ~~expect~~marrow toCRs ~~provide~~including ~~periodic~~one ~~updates~~patient atwho ~~upcoming~~was ~~conferences~~bridged into ~~2019~~stem cell transplant, or SCT.

Myelofibrosis (MF)

At the ~~2018~~2019 ASH annual conference in December ~~2018~~2019, wethe ELZONRIS ~~reported~~ Phase 1/2 data was the subject of an oral presentation by our principal investigators. The presentation included data from 2329 patients with relapsed/refractory MF who received ELZONRIS in Stage 1 (lead-in, dose escalation stage) and Stage 2 (expansion stage). Stage 1 has completed enrollment, and Stage 2 has been expanded and is ongoing, with patient enrollment and follow up continuing. In Stage 1, ELZONRIS at 12 mcg/kg/day was the highest tested dose for MF, and aan MTD was not reached. In Stage 2, patients are receiving ELZONRIS at 12 mcg/kg/day for three (3) days every 3-6 weeks.

Median age was 69 years (range: 5554-8187); 6152% were female. 7079% (~~16/~~23/29) of patients had baseline splenomegaly by physical examination (measured by spleen that is palpable >5 cm below costal margin). In Stage 1, no dose limiting toxicities, or DLT, were identified and a maximum tolerated dose, or MTD, was not reached. The most common TRAEs were alanine aminotransferase levels increased, headache and hypoalbuminaemia (each 2217%). ~~The most common TRAEs, grade 3+, was thrombocytopenia (8%). There was also one case of CLS which was grade 3.~~

~~ELZONRIS~~The most ~~monotherapy~~common ~~demonstrated~~TRAEs, ~~improvements~~grade in3+, ~~splenomegaly~~were inanemia ~~patients with relapsed/refractory MF. 56%~~ (~~9/16~~14%), ofand ~~evaluable~~thrombocytopenia ~~patients with baseline spleen size >5 cm palpable by physical exam below the left costal margin experienced a reduction in splenomegaly: 44%~~ (~~7/16~~6%). ofThere ~~patients~~was ~~had~~also ~~splenomegaly~~one ~~reduction~~case byof atCLS ~~least~~which ~~29%~~was grade ~~and 25% (4/16) had splenomegaly reductions by at least 45%~~3.

InELZONRIS monotherapy demonstrated improvements in splenomegaly in patients with relapsed/refractory MF,. ~~monocytosis~~53% (~~>1x109~~8/~~L monocytes~~15) isof ~~associated~~evaluable patients with ~~rapid~~baseline ~~disease~~spleen ~~progression~~size >5 ~~and~~cm ~~short~~palpable by ~~survival,~~physical ~~and~~exam ~~indicates~~below anthe ~~accelerated~~left ~~phase~~costal ofmargin ~~the~~experienced ~~disease.~~a Inreduction ~~the~~in ~~trial,~~splenomegaly: ~~100~~20% (53/515) of ~~evaluable~~ patients ~~treated~~had ~~with~~splenomegaly reduction ~~ELZONRIS~~by ~~and~~at ~~who~~least ~~had~~35% ~~baseline~~measured ~~monocytosis~~by ~~and~~palpation ~~spleen~~during ~~size~~physical ~~>5cm,~~exam below left costal margin. 44% (7/16) of patients had splenomegaly reduction inby ~~baseline~~at ~~splenomegaly,~~least of29% ~~which~~and 8025% (4/516) had ~~reduction~~splenomegaly reductions by ~~>29~~at least 45%. ~~and~~Additionally, 4045% (29/520) of evaluable patients had symptom burden reduction, byincluding ~~>45%~~3 with symptom response per IWG-MRT 2013 MF response criteria.

Based on results observed in the trial thus far, and the potential unmet medical need in relapsed/refractory MF, the next steps for the program are being evaluated. These steps could include single agent, combination, and registration-directed trials in patients with relapsed/refractory MF.7

WeIn ~~expect~~patients towith ~~provide~~MF, ~~further~~monocytosis ~~updates~~(>1x109/L ~~around~~monocytes) has ~~these~~been ~~plans~~associated ~~later~~with ~~this~~rapid ~~year~~disease progression and ~~into~~short ~~early~~survival, ~~next~~and ~~year~~may inindicate an ~~effort~~accelerated tophase ~~formulate~~of athe ~~registration-directed strategy~~disease. ~~The~~In the ~~current ongoing~~ trial, is100% ~~continuing~~(5/5) toof ~~enroll~~evaluable patients treated with ELZONRIS and wewho ~~expect~~had tobaseline ~~provide~~monocytosis ~~periodic~~and ~~updates~~spleen atsize ~~upcoming~~>5cm, had ~~conferences~~reduction in ~~2019~~baseline splenomegaly, of which 40% (2/5) had reduction by >35%.

6An additional ASH presentation demonstrated that ELZONRIS, either alone or in combination with ruxolitinib, had preclinical activity against primary MF patient samples, including those in accelerated phase and with high molecular risk profiles, which have limited therapeutic options beyond ruxolitinib and CD123 expression is evident. Based on these data, we are planning additional trials of ELZONRIS in MF, not only as a single agent but potentially in combination with other agents, including JAK inhibitors.

~~Table~~We continue to enroll patients with relapsed/refractory MF, and have expanded the trial to increased enrollment and add additional sites, in order to further elucidate the safety and efficacy profile of ~~Contents~~ELZONRIS in this patient population, including in patient subsets with monocytosis, thrombocytopenia and CD123 expression. By the end of 2020, we expect to provide updates on potential registration pathways in MF.

AML in complete remission with minimal residual disease, or MRD

ELZONRIS is being assessed in a Phase 1/2 clinical trial in AML in complete remission with minimal residual disease, or MRD. This trial consists of a lead-in, dose escalation stage, 3x3 design (Stage 1) in which patients received ELZONRIS as a daily intravenous infusion at 7, 9, or 12 mcg/kg/day for days 1-5 of a 21 or 28-day cycle. Stage 1 was followed by an expansion stage (Stage 2) which is enrolling AML patients in complete remission with MRD at the dose (12 mcg/kg/day) determined in Stage 1. We plan to consider the information from this trial, moving forward, to inform key elements of a regimen for patients with MRD.

Multiple Myeloma (MM)

ELZONRIS, in combination with pomalidomide and dexamethasone, was ~~is being~~ assessed in a Phase 1/2 clinical trial in relapsed/refractory multiple myeloma. This trial has a lead-in dose escalation stage (Stage 1) and an expansion stage (Stage 2) designed to enroll patients at the dose and regimen determined by Stage 1. We plan to consider the information from this trial, moving forward, to inform key elements of a combination regimen to align administration schedules with available agents.

~~Other~~At ~~planned~~the ~~trials~~2019 ASH annual conference in December 2019, we presented preliminary Phase 1/2 data from 9 patients with relapsed/refractory multiple myeloma who received ELZONRIS in combination with pomalidomide and dexamethasone. The median age was 65 (range: 57-70); 56% were male. The median number of prior systemic therapies was 3 (range: 2-6), with all patients having previously received dexamethasone, bortezomib, and lenalidomide. The most common grade 1/2 TRAE’s included hypoalbuminemia (67%), chills, insomnia, nausea, and pyrexia (each 56%), dizziness, and headache (each 44%). The most common grade 3+ TRAE’s were thrombocytopenia (44%), neutropenia (33%), and hypophosphatemia (22%). There was one case of capillary leak syndrome which was grade 2.

~~Additional~~Notably, ~~planned~~five ~~trials~~patients ~~for~~achieved ~~ELZONRIS~~partial responses ~~include~~(PRs) ~~BPDCN~~along ~~maintenance~~with ~~post-stem~~decreases in plasmacytoid dendritic cell ~~transplant~~(pDC) ~~and~~levels ~~AML~~while ~~subsets~~on ~~that~~treatment. ~~have~~The presence of pDCs, which is the cell of origin of BPDCN, ~~diagnostic~~has ~~signature~~been linked with myeloma growth and~~/or~~ ~~are~~aggressiveness. ~~enriched~~These ~~for~~patients ~~CD123~~also ~~expression~~experienced decreased levels of myeloma-related laboratory assessed values after 1 cycle of treatment with ELZONRIS combined with pomalidomide and dexamethasone.

~~Other~~Given the promising early results, and the strong scientific rationale, potential ~~indications~~avenues for ~~ELZONRIS~~further development in this indication are currently under consideration. These include new patient populations, combination with daratumumab, and/or novel agents such as XPO1 inhibitors.

InAcute ~~addition~~Myeloid toLeukemia ~~BPDCN, CMML, MF and~~ (AML~~, additional potential indications for ELZONRIS include other hematologic cancers, solid tumors, and certain autoimmune disorders. .~~)

An investigator-sponsored trial of ELZONRIS in combination with azacitidine and venetoclax is currently being evaluated in the dose escalation stage of a Phase 1/2 trial of patients with relapsed/refractory AML, first-line AML who are unfit for chemotherapy, or high-risk myelodysplastic syndrome, or MDS. CD123 expression will be assessed. The trial is enrolling and data updates are expected later this year and on into next year.

Additional trials and potential indications for ELZONRIS

A Phase 1/2 trial is currently open for ELZONRIS as a maintenance therapy, post-stem cell transplantation, in patients with BPDCN We expect to provide further program updates later this year.

Additional planned trials include ELZONRIS as monotherapy or in combination with other agents in a basket of CD123⁺ malignancies which may include acute lymphoid leukemia, or ALL, hairy cell leukemia, Hodgkin’s disease, and certain other lymphomas.

In addition to BPDCN, CMML, MF and AML, additional potential indications for ELZONRIS include other hematologic cancers, solid tumors, and certain autoimmune disorders which are under evaluation for further development.

SL-801

Felezonexor (SL-801) is a structurally novel, oral, small molecule, reversible inhibitor of Exportin-1, or XPO1, a nuclear transport protein implicated in a variety of malignancies. ~~SL-801~~XPO1 is a clinically validated target in oncology, and the FDA recently approved an XPO1 inhibitor in patients with relapsed/refractory multiple myeloma. Felezonexor has demonstrated preclinical in vitro and in vivo antitumor activity against a wide array of solid and hematologic cancers. ~~SL-801~~Felezonexor’s potential ability to reversibly bind XPO1 may offer the possibility to mitigate side effects and help optimize the therapeutic index. We are currently enrolling patients with advanced solid tumors in a Phase 1 dose escalation trial of single agent ~~SL-801~~felezonexor. The dosing regimen for felezonexor was revised in an effort to improve tolerability while maintaining dose intensity, and dosing resumed at 70 mg/day with a new schedule (Schedule B).

In ~~October~~September ~~2018~~2019, we ~~presented~~provided an update ~~on the ongoing SL-801 Phase 1 trial~~ at the European Society of Medical Oncology, or ESMO, ~~annual~~Congress ~~meeting~~2019 in ~~Munich~~Barcelona, ~~Germany~~Spain. ~~Forty-two~~Results ~~patients~~from ~~with advanced solid tumors received SL-801 at escalating doses. Median age was 64 years (range: 39-83);~~ 52% ~~were female. The trial has largely enrolled a~~ heavily ~~pretreated~~pre-treated ~~patient~~solid ~~population~~tumor patients (72~90% ~~of patients~~ were third- line or greater), with a wide spectrum of ~~tumor~~solid ~~types~~tumors, including gastrointestinal, breast, lung, neuroendocrine, ovarian, and others were presented. NoSchedule ~~MTD~~A ~~has~~was ~~yet~~amended ~~been~~to ~~identified.~~Schedule ~~The~~B ~~most~~in ~~common~~an ~~TRAEs,~~effort ~~through~~to ~~ten~~improve ~~cohorts,~~tolerability ~~included~~while ~~nausea~~maintaining dose ~~(64%),~~intensity. ~~vomiting~~In ~~(48%),~~Schedule ~~fatigue~~B (~~38%~~n=7), ~~diarrhea~~grade ~~(24%)~~3 weakness was experienced. As such, the 75mg cohort was expanded and ~~decreased~~is ~~appetite~~being ~~(24%)~~evaluated. The most common TRAEs, ~~grade 3,~~ were nausea (769%), ~~diarrhea~~vomiting (553%), fatigue (544%), ~~and~~decreased ~~vomiting~~appetite (224%)., ~~There~~and ~~was~~diarrhea ~~also~~(22%), ~~one~~and ~~grade~~the 3most common TRAE, ~~of hypophosphatemia and one~~ grade 3 ~~TRAE~~or ofhigher, ~~neutropenia~~was nausea (9%).

~~Through~~A ~~ten~~partial ~~cohorts~~response, ~~stable~~or ~~disease~~PR, of duration 18+ weeks, was achieved with single agent felezonexor in ~~29%~~a fourth line patient with KRAS-positive, microsatellite stable, or MSS, colorectal cancer. The PR (~~12/42~~based on RECIST 1.1 criteria) was reported after two cycles of ~~patients.~~felezonexor ~~One~~(70mg ~~patient~~then 65mg due to elevated creatinine), with the apatient ~~heavily~~demonstrating ~~pretreated~~serial ~~neuroendocrine~~reductions ~~tumor~~in ~~had~~the atwo ~~20%~~target ~~tumor~~lesions ~~shrinkage~~(liver and spleen).

~~The~~Response ~~dosing~~and ~~regimen~~treatment ~~for~~with ~~SL-801~~felezonexor iswere ~~currently~~ongoing ~~being~~at ~~revised~~the time of presentation. Stable disease, or SD, was achieved in ~~light~~12 ofpatients, ~~the~~with ~~occurrence~~11/12 of ~~non-dose~~these ~~limiting~~patients ~~gastrointestinal~~third ~~effects.~~line ~~Our~~or ~~plan~~greater. isFive patients tohad ~~resume~~SD ~~dosing~~for at4 70and ~~mg/day~~11 ~~for~~months, ~~days~~including 1-2 ~~every~~patient ~~seven~~with ~~days~~basal ofcell acarcinoma ~~28-day~~with ~~cycle~~SD for ~11 months, and we20% ~~expect~~disease toshrinkage was ~~provide~~noted ~~further~~in ~~data~~one ~~updates~~patient ~~throughout~~with ~~2019~~a heavily pre-treated neuroendocrine tumor.

~~SL-701~~We believe the ideal therapeutic dose and regimen have yet to be determined. Dose escalation is ongoing, and we intend to provide further updates as the Phase 1 clinical trial continues to enroll.

We completed a Phase 2 trial of SL-701 in adult patients with second-line glioblastoma, or GBM. Phase 2 data suggest SL-701 is generating target specific CD8+ T-cell responses in patients, which may be translating into improved clinical outcomes, including improved OS, in a subset of patients.

In October 2018, data from the trial were selected for oral presentation at the ESMO annual meeting in Munich, Germany. The trial consisted of two stages: Stage 1 and Stage 2. Stage 1 enrolled 46 patients and administered SL-701 as a single agent, with the

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immunostimulants GM-CSF and Imiquimod. Stage 2 enrolled 28 patients and administered SL-701 in combination with bevacizumab, and the immunostimulant poly-ICLC. SL-701 was generally well-tolerated. The most common TRAEs were fatigue (22%) and injection site reaction (18%). The only grade 3+ TRAE was fatigue (3%).

In Stage 1, one patient had a partial response, or PR, of 18+ month duration (ongoing), and there were 15 SDs, six (6) of which were at least five (5) months duration (range: 5 to 28+ months, ongoing). In Stage 2, two patients achieved CR and two (2) patients had PRs, for an ORR of 14% (6/28).

In Stage 2, the median overall survival, or OS, was 11.7 months with a 50% 12-month OS rate including some long-term (>12 month) survivors. Long-term survivors in Stage 2 were comprised largely of patients who generated target-specific CD8+ T-cell responses, as determined by ex vivo assay of blood samples, suggesting that immunocompetent patients, in particular, may benefit from this treatment.

Given the safety and efficacy data generated to date with SL-701 and bevacizumab in second-line GBM, we are considering next steps including leveraging these results and the potential immune-related data in registration-directed trial designs. These next steps may involve conducting trials with enrichment strategies, larger studies, including randomized studies, single arm studies, further combination studies with novel agents (e.g., checkpoint inhibitors), that could be conducted alone or via partnerships, or cessation of the program. If additional studies are conducted, this may entail significant manufacturing campaigns and commitments around SL-701 and certain immunostimulants depending upon the choice and availability of immunostimulants.

SL-701 was awarded ODD from the FDA for the treatment of glioma in January 2015.

We expect to provide further updates relating to this program later this year.

SL-901

SL-901 is an oral, small molecule kinase inhibitor. In December 2017, we in-licensed this drug candidate from UCB Biopharma Sprl, or UCB. Prior to in-licensing, the agent had demonstrated preclinical activity in several tumor types, and was evaluated in an abbreviated Phase 1 clinical trial in Europe. A partial response, or PR, was reported in one patient with advanced lung cancer. Neither a DLT nor MTD was reached in the trial and we believe further dose escalation is possible and warranted. We also believe SL-901 may have utility in certain non-oncologic orphan diseases and preclinical work in this area is ongoing. We are currently evaluating plans to enable a new regulatory filing, including certain IND-enabling work, to continue clinical dose escalation.

SL-1001

SL-1001 is an oral, selective small molecule RET (rearranged during transfection) kinase inhibitor. Genetic alterations in the RET kinase have been found in a diverse range of cancers. ~~and, we~~ We believe, RET kinase represents a clinically validated target in multiple oncology indications. In March 2019, we in-licensed this preclinical drug candidate from the CRT Pioneer Fund. The ~~candidate~~molecule was rationally designed by scientists at Cancer Research UK Manchester Institute (United Kingdom), and has demonstrated potent, selective, preclinical anti-cancer activity, both in vitro and in vivo, in RET-driven tumor models. IND-enabling studies are ~~planned~~ongoing, and we expect ~~SL-1001~~ to ~~enter~~initiate ~~the~~clinical ~~clinic~~studies of SL-1001 in ~~2020~~2021.

SL-901

SL-901 is an oral, small molecule kinase inhibitor. In December 2017, we in-licensed this drug candidate from UCB Biopharma SPRL. Prior to in-licensing, the agent had demonstrated preclinical activity in several tumor types, and was evaluated in an abbreviated Phase 1 clinical trial in Europe. A PR was reported in one patient with advanced lung cancer. Neither a dose-limiting toxicity nor a maximum tolerated dose was reached in the trial and we believe further dose escalation is possible and warranted. In an effort to continue clinical dose escalation, we are currently conducting pre-IMPD-enabling work in anticipation of a regulatory re-filing.

SL-701

SL-701 is an immunotherapy designed to direct the immune system to attack targets present on brain cancer and other malignancies. SL-701 is comprised of several short synthetic peptides that correspond to epitopes of targets including IL-13Rα2, EphA2, and survivin; two of these synthetic peptides (IL-13Rα2 and survivin) are mutant and believed to enhance immune activity. We completed a Phase 2 trial of SL-701 in adult patients with second-line glioblastoma, or GBM. Phase 2 data preliminarily suggest SL-701 is generating target specific CD8+ T-cell responses in patients, which may be translating into improved clinical outcomes, including improved overall survival, or OS, in a subset of patients, which could form the basis of studies. SL-701 was awarded ODD from the FDA for the treatment of glioma in January 2015.

SL-501

SL-501, is a novel CD123-targeted therapy in preclinical development~~, is a high-affinity variant of ELZONRIS~~ that has ~~shown~~demonstrated potency, in vitro and in vivo, against several hematologic tumor types, including AML, CMML, HLHodgkin’s lymphoma, and NHL.

Patents and Proprietary Rights

Our intellectual property portfolio consists of numerous issued patents and pending applications in the U.S. and worldwide of both in-licensed and Stemline-originated inventions.

We continually assess our intellectual property strategy in order to fortify our position in our market space. To that end, we are prepared to file additional patent applications in any of the above families should our intellectual property strategy require such filings and/or where we seek to adapt to competition or seize business opportunities. Further, we are prepared to file patent applications relating to the other products in our pipeline soon after the experimental data necessary for a strong application become available and our cost-benefit analyses justify filing such applications.

In addition to filing and prosecuting patent applications in the United States, we typically file counterpart patent applications in Europe, Canada, Japan, Australia, and additional countries where we think such foreign filing is likely to be beneficial.

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We do not know if patents will be issued for all of the patent applications in our portfolio, and there is no assurance that they will be. Furthermore, for patent claims now issued and for claims to be issued in the future, we do not know if such claims will provide significant proprietary protection to our drug candidates and proprietary technologies or if they will be challenged, circumvented, or invalidated. Our success will in part depend on our ability to obtain and maintain patents protecting our drug candidates, technologies and inventions, to operate without infringing the proprietary rights of third-parties, and to enforce and defend our patents and ensure others do not infringe on our proprietary rights.

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing a non-provisional patent application (in the case of the US) or 20 years from the earliest date of filing a PCT or Paris Convention application (in the case of other countries). In the United States, a patent’s term may be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution by the patentee, and a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office in granting a patent, but deducts any applicant delay from that lengthened term.

The term of a patent that covers an FDA-approved drug or biologic may also be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug or biologic is under regulatory review. Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug or biologic may be extended. Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug or biologic. In the future, if and when our pharmaceutical products receive FDA approval, we expect to apply for patent term extensions on patents covering those products. We anticipate that some of our issued patents may be eligible for patent term extensions. For more information regarding U.S. patent laws, see “Business — Government Regulation.”

In addition to the patent term extension rights described above, any of our product candidates that receive FDA approval may also be eligible for market exclusivity protection under the Federal Food, Drug and Cosmetic Act or the Biologics Price Competition and Innovation Act of 2009. For more information regarding market exclusivity laws, see “Business — Government Regulation.”

Many pharmaceutical companies, biotechnology companies and academic institutions are competing with us in the field of oncology and filing patent applications potentially relevant to our business. In order to contend with the inevitable possibility of third-party intellectual property conflicts, from time to time, we review and assess the third-party intellectual property landscape for competitive and other developments that may inform or impact our intellectual property development and commercialization strategies.

From time to time, we may find it necessary or prudent to obtain licenses from third-party intellectual property holders. Where licenses are readily available at reasonable cost, such licenses are considered a normal cost of doing business. In other instances, however, where a third-party holds relevant intellectual property and is a direct competitor, a license might not be available on commercially reasonable terms or available at all. Accordingly, we attempt to manage the risk that such third-party intellectual property may pose by conducting, among other measures, freedom-to-operate studies to guide our early-stage research away from areas where we are likely to encounter obstacles in the form of third-party intellectual property. As our programs advance, we continue to monitor the intellectual property landscape in an effort to assess the advisability of licensing third-party intellectual property or taking other appropriate steps to address such freedom-to-operate or development issues in the manner we deem in the best interests of the Company.

With respect to third-party intellectual property, it is impossible to establish with certainty that our product candidates or discovery platform will be free of claims by third-party intellectual property holders or whether we will require licenses from such third- parties. Even with modern databases and on-line search engines, literature searches are imperfect and may fail to identify relevant patents and published applications. Even when a third-party patent is identified, we may conclude, upon a thorough analysis, that we do not infringe the patent or that the patent is invalid. If the third-party patent owner disagrees with our conclusion and we continue with the business activity in question, we might face patent litigation by the third-party. Alternatively, we might decide to initiate litigation in an attempt to have a court declare the third-party patent invalid or not infringed by our activity. In either scenario, patent litigation typically is costly and time-consuming, and the outcome is uncertain. The outcome of patent litigation is subject to uncertainties that cannot be quantified in advance, for example, the credibility of expert witnesses who may disagree on technical interpretation of scientific data. Ultimately, in the case of an adverse outcome in litigation, we could be prevented from commercializing a product or using certain aspects of our discovery platform as a result of patent infringement claims asserted against us and/or face a significant monetary damages award. This could have a material adverse effect on our business.

To protect our competitive position, it may be necessary to enforce our patent rights through litigation against infringing third- parties. Litigation to enforce our own patent rights is subject to the same uncertainties discussed above. In addition, however, litigation involving our patents carries the risk that one or more of our patents will be held invalid (in whole or in part, on a claim-by-claim basis) or held unenforceable. Such an adverse court ruling could allow third parties to commercialize our products or our platform technology, and then compete directly with us, without payment to us.

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involving our patents carries the risk that one or more of our patents will be held invalid (in whole or in part, on a claim-by-claim basis) or held unenforceable. Such an adverse court ruling could allow third-parties to commercialize our products or our platform technology, and then compete directly with us, without payment to us.

Patents and Proprietary Rights Covering Stemline’s Drug Candidates

We have an exclusive worldwide license to ELZONRIS. These patent rights include issued U.S. ~~Patents,~~Patent 7,763,242,; U.S. Patent 8,470,307,; U.S. Patent 9,181,317,; ~~and~~U.S. Patent 9,631,006; and U.S. Patent 10,259,853 covering methods of treating AML, BPDCN, MDS, and ~~MDS~~CMML that expire in 2027, as well as ~~seven~~ten issued foreign patents. We have applied for an extension of the U.S. patent term pursuant to the Hatch Waxman act for issued patents covering ELZONRIS and if granted we will need to choose a single patent to extend. There are additional pending U.S. applications directed to methods of using ELZONRIS to treat other diseases that, if issued, would also expire in 2027 or 2039. In addition, we have filed foreign patent applications for the method of using ELZONRIS to treat various diseases, although there can be no assurances that such patents will be issued. In addition to patent protection, we also have the exclusivity afforded by the FDA’s orphan designation of ELZONRIS for the treatment of ~~both AML and~~ BPDCN and by the provisions of the Biologics Price Competition and Innovation Act of 2009. See “Government Regulation — Orphan Drug Designation” and “— U.S. Patent Term Restoration and Marketing Exclusivity—Biologics Price Competition and Innovation Act of 2009.”

We have anexclusive and non-exclusive worldwide ~~license~~licenses ~~(with the exception of Japan, Korea, Taiwan, and China)~~ to patents covering SL-801. These patent rights include issued U.S. Patents 8,084,454 and ~~U.S. Patent~~ 8,415,357 covering composition of matter and uses of SL-801 that expire in 2030 and 2028, respectively, as well as ~~nine~~eleven issued foreign patents that expire in 2028. We also have additional pending foreign patent applications directed to SL-801 which if issued, for which there can be no guarantee, would provide additional protection in certain non-U.S. territories and would be expected to expire in or around 2028.

We have an exclusive worldwide license to patents covering the SL-701 component, IL-13Rα2 mutant, a non-exclusive worldwide license to patents covering the SL-701 component, EphA2, and have filed U.S. and foreign patent applications covering the SL-701 component, survivin mutant. This intellectual property consists of an issued U.S. composition of matter patent (U.S. Patent 7,612,162) directed to an immunogenic mutant IL-13Rα2 peptide expiring in 2026, an issued U.S. composition of matter patent (U.S. Patent 8,574,584) directed to an immunogenic EphA2 peptide expiring in 2024, issued U.S. method of use patents (U.S. Patent 8,114,407, U.S. Patent 9,359,402, and U.S. Patent 10,131,699) directed to the use of EphA2 peptide expiring in 2024 and 2025, issued U.S. method of use patent (U.S. Patent 8,859,488) directed to the combined use of IL-13Rα2 mutant and EphA2 peptides expiring in 2026, an issued U.S. method of use patent (U.S. Patent 10,485,858) directed to the combined use of an IL-13Rα2 peptide, an EphA2 peptide, a survivin mutant peptide, and a Tetanus toxoid peptide formulated as an emulsion expiring in 2033, an issued European composition of matter patent (EP 2608799) directed to the combination of IL-13Rα2 mutant, EphA2, and survivin mutant peptides expiring in 2031, an issued U.S. method of use patent (U.S. 10,485,858) directed to the combined use of an IL-13Rα2 mutant, EphA2, and a new immunogenic survivin mutant peptide expiring in 2033, and additional pending U.S. and foreign patent applications directed to the use of an immunogenic mutant survivin peptide which, to the extent it issues, would be expected to expire in 2033. We also have additional pending patent applications directed to methods of using SL-701 components to treat certain diseases which, if issued (for which there can be no guarantee), would provide additional protection in the United States and certain non-U.S. territories and would expire in 2025, 2031, or 2033. In addition to patent protection, we also have the exclusivity afforded by the FDA’s orphan designation of SL-701 for the treatment of glioma and by the provisions of the Biologics Price Competition and Innovation Act of 2009. See “Government Regulation — Orphan Drug Designation” and “— U.S. Patent Term Restoration and Marketing Exclusivity—Biologics Price Competition and Innovation Act of 2009”.

We have an exclusive worldwide license to patents covering SL-901. This intellectual property consists of the patent family derived from WO 2009/001089, issued in the US, Europe and other territories (expiring in 2028); the patent family derived from WO 2008/001076, issued in the US and Europe (expiring in ~~2029~~2027); and the patent family derived from WO 2006/114606, issued in the US, Europe and other territories, expiring in ~~2027~~2026. We also have additional pending patent applications directed to SL-901 which, if issued (for which there can be no guarantee), would provide additional protection in the United States and certain non-U.S. territories and would expire in 2038.

We have an exclusive worldwide license to pending patents covering the SL-1001 component. This intellectual property consists of the patent family derived from PCT/GB2017/051076 (application date April 18, 2017, pending in the US, Europe and other territories); the patent family derived from PCT/GB2017/051077 (application date April 18, 2017, pending in US, Europe and other territories); and the patent family derived from PCT/GB2018/050986 (application date April 13, 2018, pending).12

We have an exclusive worldwide license to pending patents covering the SL-1001 component. This intellectual property consists of the patent family derived from PCT/GB2017/051076 (application date April 18, 2017, pending in the US, Europe and other territories, which if issued would expire in 2037); the patent family derived from PCT/GB2017/051077 (application date April 18, 2017, pending in the US, Europe and other territories); and the patent family derived from PCT/GB2018/050986 (application date April 13, 2018, pending in the U.S. Europe and other territories, which if issued would expire in 2038).

We also in-licensed or own certain patent rights, which includes issued patents and pending patent applications in the U.S. and abroad, to our preclinical assets.

Patents and Proprietary Rights Covering ~~Cancer Stem Cell, or~~ CSC, Focused Intellectual Property

We have exclusive worldwide rights to early and broad patents and patent applications in the CSC field covering CSC therapeutics, diagnostics, including companion diagnostics, and drug discovery:

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two pending U.S. patent applications filed in 2007 directed to CSC-directed therapies and regimens, including CSC-directed therapies and regimens for use in combination with companion diagnostics. Patent protection, to the extent it issues, would be expected to extend to 2027;

a pending patent application that covers oligonucleotide-based oncology therapies, including CSC-targeted therapeutics, which target microRNA. Patent protection, to the extent it issues, would be expected to extend to 2022;

· a family of intellectual property covering methods to treat cancer through use of antibody-based compounds directed to IL-3Rα as well as composition of matter covering IL-3Rα-targeted antibody conjugates, including U.S. Patent 6,733,743; U.S. Patent 7,651,678; U.S. Patent 8,163,279; U.S. Patent 8,852,551; U.S. Patent 8,992,910; U.S. Patent 9,518,119; U.S. Patent 9,873,743; U.S. Patent 10,316,098; U.S. Patent 10,508,150; and other pending applications. Patent protection, to the extent it has or may issue, would be expected to extend to 2021 or 2028, as applicable; and

· a an issued (U.S. Patent 10,538,742) and one pending U.S. patent ~~application~~ covering CSC-focused drug discovery, including a novel high throughput screen to discover compounds that target CSCs~~. Patent protection~~, toexpiring ~~the~~in ~~extent it issues, would be expected to extend to 2025~~2027.

License and Research Agreements

Scott and White Memorial Hospital

Research and License Agreement (ELZONRIS)

In June 2006, we entered into a research and license agreement with Scott and White Memorial Hospital (Temple, Texas) for ELZONRIS, our biologic targeted therapy directed to the IL-3R. Under the agreement, Scott and White has granted us an exclusive, royalty-bearing, worldwide license under certain patent rights, know-how and materials to research, develop, make, have made, formulate, use, sell, offer to sell and import ELZONRIS, and any products containing or comprising such compound in finished dosage pharmaceutical form, for the diagnosis, prophylaxis and/or treatment of any disease or condition in humans or animals. The patent rights exclusively licensed to us under the agreement are described in more detail above under “Business — Patents and Proprietary Rights.”

We must pay Scott and White royalties based on adjusted gross sales, by us or our sublicensees, of products containing the licensed compound for a period of ten years following the first commercial sale of each product in each country. Through December 31, 2019, we have expensed approximately $0.6 million relating to royalty to Scott and White. The royalty rates for each product range from the low- to mid-single digits and are tiered based on our annual sales. We have sublicensing rights under the agreement, subject to our paying to Scott and White a percentage of the up-front payments we receive from a sublicensee.

We must exercise commercially reasonable efforts to develop and commercialize a licensed product and to achieve certain regulatory milestones within certain periods, subject to extensions based on unforeseen technical, scientific, intellectual property or regulatory issues. If we fail to comply with our diligence obligations with respect to at least one licensed product, then Scott and White may convert our exclusive license to a non-exclusive license.

The agreement survives until the later of the expiration of the last to expire licensed patent or the date on which we owe no further payments to Scott and White, after which our license becomes fully paid, irrevocable, perpetual, non-exclusive and royalty-free. We may terminate the license in whole or on a country-by-country and product-by-product basis upon prior written notice to Scott and White. If either we or Scott and White breach a material obligation under the agreement, and such obligation is not cured within a specified period of time following written notice from the other party, then the non-breaching party may terminate the agreement upon an additional written notice.

In addition, the agreement provides for Scott and White to conduct a research program with ELZONRIS. In March 2010, the agreement was amended to further the regulatory advancement of ELZONRIS. We have made certain payments to Scott and White for such research services pursuant to the agreement, which to date total approximately $1.04 million in the aggregate. Additionally, we have been granted the exclusive right of reference to its IND for our own regulatory filings. We may assign the agreement to an affiliate of ours, a purchaser of all or substantially all of our assets or in connection with a merger, change in control or similar transaction by us.

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CanBas, Ltd

License for SL-801

On December 26, 2014, we entered into a license agreement with CanBas, Ltd. for SL-801. SL-801 is a small molecule, reversible inhibitor of XPO1. Under the terms of the agreement, CanBas has granted us an exclusive, royalty-bearing, worldwide license, under certain patent rights, know-how and materials to research, develop, make, have made, formulate, use, sell, offer to sell and import SL-801, and any products containing or comprising such compound in finished dosage pharmaceutical form, for the treatment of any disease or condition in humans. The patent rights exclusively licensed to us under the agreement are described in more detail above under “Patents and Proprietary Rights Covering Stemline’s Drug Candidates.”

We are responsible to pay the remaining technical advisory fees over the next 1.5 years totaling 165 million Japanese Yen (JPY), if the clinical development continues over this time period. Additionally, we must pay CanBas tiered royalties based on aggregate net sales, by us or our sublicensees, of products containing the licensed compound until the latest date of a period of ten years following the first commercial sale of each product in each country; the date upon which there are no more valid claims or the expiration or termination of the last regulatory exclusivity period. The royalty rates start in the low single digits and are tiered up based on annual net sales. In the future, we may also be responsible, based on the achievement of specific clinical-development, regulatory and sales-based commercial milestones, for certain payments to CanBas of up to $86 million. We have sublicensing rights under the agreement, subject to our paying to CanBas a standard royalty percentage of the payments we receive from a sublicensee.

The agreement survives until the later of ten years following the first commercial sale of each product in each country; the date upon which there are no more valid claims; or the expiration or termination of the last regulatory exclusivity period, after which our license becomes fully paid, irrevocable, perpetual, non-exclusive and royalty-free. We may terminate the license for any or no reason upon 60 days advance written notice to CanBas. If either we or CanBas breach a material obligation under the agreement, and such obligation is not cured within a specified period of time following written notice from the other party, then the non-breaching party may terminate the agreement upon an additional written notice.

University of Pittsburgh

Exclusive License Agreement to IL-13Rα2 peptide (SL-701 component)

In September 2009, we entered into an exclusive license agreement with the University of Pittsburgh, or the University, for the composition of matter, and use with other components, of a proprietary immunogenic mutant analog peptide of IL-13Rα2, an active ingredient of SL-701, our brain cancer immunotherapy candidate. Under the agreement, the University grants us an exclusive worldwide license under certain patent rights to make, have made, use, sell and import brain cancer peptide antigen immunotherapies (including SL-701, which has been developed by the University under a separate immunotherapy name designated by the University). The patent rights exclusively licensed to us under the agreement are described in more detail above under “Business — Patents and Proprietary Rights.” The University retains the right to practice the licensed patent rights for non-commercial education and research purposes. The license is also subject to certain retained rights of the United States government. Our right to grant sublicenses to third parties is subject to the prior written approval of the University, which the University may not unreasonably withhold or delay.

12We paid the University an initial license fee and will pay the University annual license maintenance fees until the first commercial sale of a licensed product. To date, we have paid an aggregate of approximately $0.8 million in fees to the University under the agreement. We must also pay the University a low-single digit royalty as a percentage of net sales of licensed products by us or our sublicensees, with standard provisions for royalty offsets to the extent we need to obtain any rights from third-parties to commercialize the licensed products. We must also pay a minimum annual royalty following the first commercial sale of a licensed product, but only to the extent the minimum annual royalty amount is greater than the annual royalty otherwise due. We also must pay the University a percentage of non-royalty revenue we receive from our sublicensees, which decreases if we enter into the applicable sublicense agreement after a certain clinical milestone has been met. We also must make certain payments to the University of up to approximately $4.2 million upon the achievement of specific regulatory and commercial milestone events.

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(including SL-701, which has been developed by the University under a separate immunotherapy name designated by the University). The patent rights exclusively licensed to us under the agreement are described in more detail above under “Business — Patents and Proprietary Rights.” The University retains the right to practice the licensed patent rights for non-commercial education and research purposes. The license is also subject to certain retained rights of the United States government. Our right to grant sublicenses to third parties is subject to the prior written approval of the University, which the University may not unreasonably withhold or delay.

We paid the University an initial license fee and will pay the University annual license maintenance fees until the first commercial sale of a licensed product. To date, we have paid an aggregate of approximately $0.7 million in fees to the University under the agreement. We must also pay the University a low-single digit royalty as a percentage of net sales of licensed products by us or our sublicensees, with standard provisions for royalty offsets to the extent we need to obtain any rights from third-parties to commercialize the licensed products. We must also pay a minimum annual royalty following the first commercial sale of a licensed product, but only to the extent the minimum annual royalty amount is greater than the annual royalty otherwise due. We also must pay the University a percentage of non-royalty revenue we receive from our sublicensees, which decreases if we enter into the applicable sublicense agreement after a certain clinical milestone has been met. We also must make certain payments to the University of up to approximately $4.2 million upon the achievement of specific regulatory and commercial milestone events.

We must use our commercially reasonable best efforts to develop or commercialize a licensed product as soon as practicable, and to continue active, diligent marketing efforts throughout the term of the agreement. We also must adhere to certain specific regulatory milestones with respect to initiating clinical trials and submitting an application for regulatory approval of a licensed product. If we fail to meet any such milestone through no fault of our own, we may negotiate with the University a one-time extension of the applicable dates, subject to paying the University a fee. If we do not meet the extended milestone dates, then the University may terminate the agreement.

The agreement survives until the expiration of the last to expire licensed patent. The University may terminate the agreement if we default in the performance of any of our obligations and do not cure the default within a specified period of time after receiving notice from the University, or if we challenge the validity, enforceability or ownership of the ~~license~~licensed patent rights anywhere in the world. The University may also terminate the agreement if we cease to carry out our business or become bankrupt or insolvent. We may terminate the agreement for any reason upon prior written notice to the University and payment of all amounts due to the University through the date of termination. Any sublicense agreement entered into prior to termination will survive, subject to certain customary conditions. We may assign the agreement to an affiliate of ours, a purchaser of all or substantially all of our assets or in connection with a merger, change in control or similar transaction by us.

Non-Exclusive License Agreement to EphA2 peptide (SL-701 component)

In March 2012, we entered into a non-exclusive license agreement with the University for the use of EphA2 epitopes, another active ingredient of SL-701. Under the agreement, the University grants us a non-exclusive worldwide license under certain patent rights to use the EphA2 peptide in or packaged with the IL-13Rα2 peptide, as well as other immunotherapies we may develop and own or exclusively control, for the diagnosis, treatment or prevention of diseases and tumors of the brain in human patients. The patent rights licensed to us under the agreement are described in more detail above under “Business — Patents and Proprietary Rights.” The University retains the right to practice the licensed patent rights for non-commercial education and research purposes. The license grant is also subject to certain retained rights of the United States government. We may only grant sublicenses to third parties who are permitted sublicensees under the exclusive IL-13Rα2 peptide license agreement with the University.

We must pay the University an initial license fee, and will pay the University annual license maintenance fees until the net sales of a licensed product exceed a specified amount. To date, we have paid an aggregate of approximately $0.1 million in fees to the University under the agreement. We must also pay the University a customary low-single digit royalty for the license as a percentage of net sales of licensed products by us or our sublicensees, with standard provisions for royalty offsets to the extent we need to obtain any rights from third-parties to commercialize the licensed products. We must also pay a minimum annual royalty following the first commercial sale of a licensed product, but only to the extent the minimum annual royalty amount is greater than the annual royalty otherwise due.

We must use our commercially reasonable best efforts to develop or commercialize a licensed product as soon as practicable, and to continue active, diligent marketing efforts throughout the term of the agreement. We also must adhere to certain specific regulatory milestones with respect to initiating clinical trials and submitting an application for regulatory approval of a licensed product. If we fail to meet any such milestone by certain specified dates, then the University may terminate the agreement.

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The agreement survives until the expiration of the last to expire licensed patent. The University may terminate the agreement if we default in the performance of any of our obligations and do not cure the default within a specified time period of receiving notice from the University. The University may also terminate the agreement if we cease to carry out our business or become bankrupt or insolvent. We may terminate the agreement for any reason upon prior written notice to the University and payment of all amounts due to the University through the date of termination. Any sublicense agreement entered into prior to termination will survive, subject to certain customary conditions. We may assign the agreement to an affiliate of ours, a purchaser of all or substantially all of our assets or in connection with a merger, change in control or similar transaction by us.

Non-Exclusive License Agreement to use and reference certain data, information and regulatory filings (SL-701)

In March 2012, we entered into a non-exclusive license agreement with the University. Pursuant to the agreement, we acquired a non-exclusive, worldwide license to use and reference certain know-how, information and data that is contained in the INDs covering the clinical trials of SL-701 that were conducted by the University for the development, manufacture, regulatory approval and commercialization of pharmaceutical products. We may grant sublicenses in conjunction with a sublicense to a permitted sublicensee under the exclusive IL-13Rα2 peptide license agreement with the University.

We paid the University an initial license fee, as well as payments following a regulatory milestone. To date, we have paid an aggregate of approximately $27,500 in fees to the University under the agreement. We also must pay the University a percentage of non-royalty revenue we receive from our sublicensees. We must use our commercially reasonable best efforts to develop or commercialize a product derived from the use of the licensed data or information as soon as practicable. We also must adhere to a specific regulatory milestone with respect to submitting an application for regulatory approval that incorporates the licensed data or information, and if we fail to meet the milestone, the University may terminate the agreement unless we have pre-paid the milestone payment listed above.

The term of the license agreement is 20 years, and the University may terminate the agreement earlier (i) if we default in the performance of any of our obligations and do not cure the default within a specified time period, (ii) upon the termination of the exclusive IL-13Rα2 peptide license agreement with the University, or (iii) if we cease to carry out our business or become bankrupt or insolvent. We may terminate the agreement at any time prior to incorporating or referencing the data or University INDs, after a specified number of days following written notice. We may assign the agreement to an affiliate of ours, a purchaser of all or substantially all of our assets or in connection with a merger, change in control or similar transaction by us.

Cambridge University Technical Services Limited

Exclusive Patent and Non-Exclusive Know-How License Agreement (Platform Technology)

In September 2004, we entered into a license agreement with Cambridge University Technical Services Limited, or CUTS, relating to our StemScreen® platform technology. Under the agreement, we acquired an exclusive, royalty-bearing, worldwide license under patent rights owned by CUTS to develop, manufacture, have manufactured, use, sell, offer to sell, market, have marketed, import, have imported, export and have exported products covered by the patent rights, including a platform technology to discover and screen for compounds that target CSCs. The patent rights exclusively licensed to us under the agreement are described in more detail above under “Business — Patents and Proprietary Rights.” The license is subject to certain rights retained by CUTS for academic research and teaching. We also acquired a non-exclusive, worldwide license to know-how related to the licensed patent rights. The agreement provides us with full sublicensing rights. Under the agreement, we paid an upfront license fee and are obligated to make milestone payments of up to an aggregate of $1.7 million upon specified regulatory events, as well as pay royalties of less than 1% on sales of licensed products. CUTS may terminate the agreement, including our rights to the platform technology, for specified cause or upon certain events involving our bankruptcy or insolvency.

Competition

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. Additionally, there has been an increase in development of therapeutics targeting ultra orphan and rare oncologic indications, our main area of focus. While we believe that our scientific knowledge, technology, and development experience provide us with competitive advantages, we face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions. Any current and/or future product candidates that we successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

14There are several biopharmaceutical companies whose primary focus appears to be developing therapies against CSCs, including Verastem, Inc., OncoMed Pharmaceuticals, Inc., Sumitomo Dainippon Pharma Co. Ltd., Bionomics Limited and Stemcentrx, Inc. (an AbbVie, Inc., company). There are also several biopharmaceutical companies that do not appear to be primarily focused on CSCs, but may be developing at least one CSC-directed compound. These companies include Astellas Pharma US, Inc., Boehringer Ingelheim GmbH, Geron Corp., GlaxoSmithKline plc, Ignyta, Inc. (a Roche company), Macrogenics Inc., Micromet, Inc. (an Amgen, Inc. company), Pfizer Inc., Roche Holding AG, Sanofi U.S. LLC, and others. Additionally, there are a number of companies working to develop new treatments for hematologic cancers, which may compete with ELZONRIS and SL-801, including AbbVie, Inc., Ambit Biosciences Corporation (a Daiichi Sankyo company), Amgen, Inc., Astex Pharmaceuticals (now an Otsuka Pharmaceutical company), Celator Pharmaceuticals, Inc. (a Jazz Pharmaceuticals company), Celgene Corporation, Cellectis, Cyclacel Pharmaceuticals, Inc., Eisai Co. Ltd., Genzyme Corporation (a Sanofi company), Immunogen, Inc., Janssen Pharmaceutical Companies of Johnson and Johnson, Karyopharm Therapeutics, Inc., Kura Oncology, Inc., Novartis AG, Seattle Genetics, Inc., and Sunesis Pharmaceuticals, Inc., among others. There are also a number of drugs used for the treatment of brain cancer that may compete with SL-701, including, Avastin® (Roche Holding AG), Gliadel® (Eisai Co. Ltd.), and Temodar® (Merck & Co., Inc.). There are a number of companies working to develop brain cancer therapeutics with programs in clinical testing, including Agenus Inc., Bristol-Myers Squibb, Inc., Cortice Biosciences, Inc., Celldex Therapeutics, Inc., CytRx Corporation, Inspyr Therapeutics, Inc., GlaxoSmithKline plc., Northwest Biotherapeutics, Inc., Novartis AG, Roche Holding AG and others.

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There are several biopharmaceutical companies whose primary focus appears to be developing therapies against CSCs, including Verastem, Inc., OncoMed Pharmaceuticals, Inc., Sumitomo Dainippon Pharma Co. Ltd., Bionomics Limited and Stemcentrx, Inc. (an AbbVie, Inc., company). There are also several biopharmaceutical companies that do not appear to be primarily focused on CSCs, but may be developing at least one CSC-directed compound. These companies include Astellas Pharma US, Inc., Boehringer Ingelheim GmbH, Geron Corp., GlaxoSmithKline plc, Ignyta, Inc. (a Roche company), Macrogenics Inc., Micromet, Inc. (an Amgen, Inc. company), Pfizer Inc., Roche Holding AG, Sanofi U.S. LLC, and others. Additionally, there are a number of companies working to develop new treatments for hematologic cancers, which may compete with ELZONRIS and SL-801, including AbbVie, Inc., Ambit Biosciences Corporation (a Daiichi Sankyo company), Amgen, Inc., Astex Pharmaceuticals (now an Otsuka Pharmaceutical company), Celator Pharmaceuticals, Inc. (a Jazz Pharmaceuticals company), Celgene Corporation, Cellectis, Cyclacel Pharmaceuticals, Inc., Eisai Co. Ltd., Genzyme Corporation (a Sanofi company), Immunogen, Inc., Janssen Pharmaceutical Companies of Johnson and Johnson, Karyopharm Therapeutics, Inc., Kura Oncology, Inc., Novartis AG, Seattle Genetics, Inc., and Sunesis Pharmaceuticals, Inc., TG Therapeutics, Inc., among others. There are also a number of drugs used for the treatment of brain cancer that may compete with SL-701, including, Avastin® (Roche Holding AG), Gliadel® (Eisai Co. Ltd.), and Temodar® (Merck & Co., Inc.). There are a number of companies working to develop brain cancer therapeutics with programs in clinical testing, including Agenus Inc., Bristol-Myers Squibb, Inc., Cortice Biosciences, Inc., Celldex Therapeutics, Inc., CytRx Corporation, Inspyr Therapeutics, Inc., GlaxoSmithKline plc., Northwest Biotherapeutics, Inc., Novartis AG, Roche Holding AG and others.

Many of our competitors 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. Mergers and acquisitions in the pharmaceutical, biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller number of our competitors. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Small or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

The key competitive factors affecting the success of all of our product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other third-party payors.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market. Also, if our competitors receive marketing approval for a product for which it has an orphan designation, we may not be able to receive marketing approval for one of our products for the same indication unless it demonstrates clinical superiority to such product. Our ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic products. If our therapeutic product candidates are approved, we expect that they will be priced at a significant premium over any competitive generic products.

The most common methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy and targeted drug therapy. These therapies are numerous and varied in their design, therapeutic application and mechanism of action. As a result, they may provide significant competition for any of our product candidates for which we obtain market approval. In addition to currently marketed oncology therapies, there are also a number of products in late stage clinical development to treat cancer. These products in development may provide efficacy, safety, convenience and other benefits that are not provided by currently marketed therapies. As a result, they may provide significant competition for any of our product candidates for which we obtain market approval.

Competition for ELZONRIS

There are a number of companies working to develop new treatments for AML and other hematologic cancers, including Agios, Inc., Ambit Biosciences Corporation (~~now~~ a Daiichi Sankyo company), Astex Pharmaceuticals (an Otsuka Pharmaceutical company), Boehringer Ingelheim, Celator Pharmaceuticals, Inc. (a Jazz Pharmaceuticals company), Celgene Corporation, Cellectis, Cyclacel Pharmaceuticals, Inc., Eisai Co. Ltd., Epizyme, Inc., Genzyme Corporation (a Sanofi company), Immunogen, Inc., Janssen Pharmaceutical Companies of Johnson and Johnson, Kura Oncology, Inc., Seattle Genetics, Inc., and Sunesis Pharmaceuticals, Inc., ~~TG Therapeutics, Inc.,~~ among others.

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Competition for SL-801

Karyopharm Therapeutics is the only company, to our knowledge, that currently has XPO1 inhibitors in clinical development. Karyopharm’s selinexor has been approved by the U.S. FDA (in combination with dexamethasone) for the treatment of adult patients with relapsed refractory multiple myeloma, and is being evaluated in a number of clinical trials in both solid and hematologic cancers, with the most advanced clinical programs in AML, ~~multiple myeloma~~ and diffuse large B-Cell lymphoma, or DLBCL. Karyopharm has also advanced a second generation compound, KPT-8602, into clinical trials in relapsed/refractory multiple myeloma.

Competition for SL-701

There are a limited number of drugs used for the treatment of brain cancer, including Temodar® (Merck & Co., Inc.), nitrosoureas including Gliadel® (Eisai Co., Inc.), and Avastin® (Roche Holding AG). There are a number of companies working to develop brain cancer therapeutics with programs in clinical testing including Agenus Inc., Bristol-Myers Squibb, Inc., Cortice Biosciences, Inc., Celldex Therapeutics, Inc., CytRx Corporation, Inspyr Therapeutics, Inc., GlaxoSmithKline plc., Northwest Biotherapeutics, Inc., Novartis AG, Roche Holding AG and others.

Government Regulation

Government authorities in the United States, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, approval, manufacture, testing, quality control, packaging, labeling, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products such as those we are developing. Any pharmaceutical candidate that we develop must be approved by the FDA before it may be legally marketed in the United States or by the appropriate foreign regulatory agency before it may be legally marketed in foreign countries.

United States Drug Development Process

In the United States, the FDA regulates drugs and biologics under the Federal Food, Drug and Cosmetic Act, or FDCA, and implementing regulations. Drugs are also subject to other federal, state and local statutes and regulations. Biologics are subject to regulation by the FDA under the FDCA, the Public Health Service Act, or the PHSA, and related regulations, and other federal, state and local statutes and regulations. Biological products include, among other things, viruses, therapeutic serums, vaccines and most protein products. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable United States requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions. FDA ~~sanctions~~regulatory, compliance or enforcement actions could include a clinical hold, refusal to approve pending applications, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, civil or criminal penalties, or withdrawal of an approval. Any administrative action or judicial enforcement action could have a material adverse effect on us.

The process required by the FDA before a drug or biological product may be marketed in the United States generally involves the following:

· Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices orand other applicable regulations;

· Submission to the FDA of an Investigational New Drug, or IND application, which FDA must ~~clear~~acknowledge or approve before human clinical trials may begin;

· Performance of adequate and well-controlled human clinical trials according to the FDA’s current Good Clinical Practices, or ~~cGCPs~~CGCPs, and in accordance with human subject protection regulations, to establish the safety and efficacy of the proposed drug or biologic for its intended use;

· Submission to the FDA of aan NDA for a new drug product, or a BLA for a new biological product;

· Satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities where the drug or biologic is to be produced to assess compliance with the FDA’s current good manufacturing practice regulations, or ~~cGMPs~~CGMPs, to assure that the facilities, methods and controls are adequate to preserve the drug’s or biologic’s identity, strength, quality and purity;

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Potential FDA inspection of the nonclinical and clinical trial sites that generated the data in support of the NDA or BLA; and

· FDA review and approval of the NDA or BLA, ~~and~~which typically includes the successful resolution of any questions that arise in the review process.

The lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations post-approval require the expenditure of substantial resources. There can be no certainty that approvals will be granted.

Before testing any compounds with potential therapeutic value in humans, the drug or biological candidate ~~enters~~undergoes ~~the~~ preclinical testing ~~stage~~. Preclinical ~~tests~~testing include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the drug or biological candidate. The conduct of the preclinical tests must comply with federal regulations and requirements including ~~good~~Good Laboratory ~~laboratory practices~~Practices. The sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or published literature and a proposed clinical study design protocol, to the FDA as part of the IND. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA places the clinical trial on a clinical hold within that 30-day time period. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. The FDA may also impose clinical holds on a drug or biological candidate at any time before or during clinical trials due to safety ~~concerns~~ or ~~non-~~compliance concerns. Accordingly, we cannot assure that submission of an IND will result in the FDA allowing clinical trials to begin, or that, once begun, issues will not arise that ~~suspend~~cause ~~or terminate~~ such trial to be delayed, suspended or terminated.

Clinical trials involve the administration of the drug or biological candidate to healthy volunteers or patients having the disease being studied under the supervision of qualified investigators; often these are physicians not employed by or under the trial sponsor’s control. Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, and the parameters to be used to monitor subject safety. Each protocol must be submitted to the FDA as part of the IND. Clinical trials must be conducted in accordance with the FDA’s current good clinical practices, or ~~cGCPs~~CGCPs, requirements, regulations for the protection of human subjects and with applicable ~~cGMP~~CGMP requirements. Further, each clinical trial must be reviewed and approved by an institutional review board, or IRB, at or servicing each institution at which the clinical trial will be conducted. An IRB is charged with protecting the welfare and rights of trial participants and considers such items as whether the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. The IRB also approves trial recruitment materials and the informed consent form that must be used as part of the informed consent process with each clinical trial subject or his or her legal representative and must monitor the clinical trial until it is completed.

Human clinical trials prior to approval are typically conducted in three sequential Phases that may overlap or be combined:

· Phase 1. The drug or biologic is initially introduced into small groups of healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion. In the case of some products for severe or life-threatening diseases, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients having the specific disease.

· Phase 2. The drug or biologic is evaluated in a larger, but still limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule for patients having the specific disease.

Phase 3. Clinical trials are undertaken to further evaluate the selected dose, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites. These pivotal clinical trials, which usually involve more subjects than earlier trials, are intended to establish the overall risk/benefit ratio of the product and provide adequate data which serve as the basis to inform product labeling. Generally, at least two adequate and well-controlled Phase 3 clinical trials are required by the FDA for approval of an NDA or BLA.

Post-approval studies, or Phase 4 clinical trials, may be conducted after initial marketing approval. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication and may be required by the FDA as part of the approval process.

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Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA by the investigators for serious and unexpected adverse events or any finding from tests in laboratory animals that suggests a significant risk for human subjects. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all. The FDA or the sponsor or its data safety monitoring board may suspend a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug or biologic has been associated with unexpected serious harm to patients.

Concurrent with clinical trials, companies usually complete additional animal studies and develop additional information about the chemistry and physical characteristics of the drug or biologic as well as finalize a process for manufacturing the product in commercial quantities in accordance with ~~cGMP~~CGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the drug or biological candidate. In addition, companies must develop and validate analytical methods for testing the identity, strength, quality and purity of raw materials, in-process material and the final drug or biologic. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the drug or biological candidate does not undergo unacceptable deterioration over its shelf life.

U.S. Review and Approval Processes

The results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the drug or biologic, proposed packaging and labeling and other relevant information are submitted to the FDA as part of an NDA or BLA requesting approval to market the product. The submission of an NDA or BLA is subject to the payment of substantial user fees; a waiver of such fees may be obtained under certain limited circumstances. We believe that we will be required to submit BLAs or NDAs for our product candidates.

In addition, under the Pediatric Research Equity Act, or PREA, an NDA or a BLA, or supplement to an NDA or a BLA, that covers a new active ingredient, new indication, new dosage form, new dosing regimen, or new route of administration must contain data to assess the safety and effectiveness of the ~~drug~~proposed orindication ~~biologic for~~ of the ~~claimed~~drug ~~indications~~or biologic in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may grant deferrals for submission of pediatric data or full or partial waivers. PREA does not apply to any drug or biologic for an indication for which orphan designation has been granted unless FDA were to issue a regulation to require pediatric assessments.

The FDA ~~reviews~~performs an administrative review of all NDAs and BLAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA or BLA for filing. Once the submission is accepted for filing, the FDA begins an in-depth technical and scientific review of the NDA or BLA. Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act, or PDUFA, the FDA has established a performance goal of ten months in which to complete its initial review of a standard NDA or BLA and respond to the applicant, and a performance goal of six months for a priority NDA or BLA. The FDA does not always meet its PDUFA goal dates for standard and priority NDAs and BLAs.

After the NDA or BLA submission is accepted for filing, the FDA reviews the ~~NDA~~submission to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with ~~cGMP~~CGMP requirements to assure and preserve the product’s identity, strength, quality and purity. The FDA reviews a BLA to determine, among other things, whether the product is safe, pure and potent and the facility in which it is manufactured, processed, packaged or held meets standards designed to assure the product’s continued safety, purity and potency. In addition to its own review, the FDA may refer applications for novel drug or biological products or drug or biological products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts in the disease area, for review, evaluation and 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. On September 27, 2007, the Food and Drug Administration Amendments Act of 2007 was enacted, giving the FDA enhanced post-market authority, including the authority to require post-marketing studies and post-marketing clinical trials related to serious risks, labeling changes based on new safety information, and compliance with risk evaluation and mitigation strategies, or REMS, approved by the FDA. The FDA’s exercise of this authority can result in delays or increased costs during the period of product development, clinical trials and regulatory review and approval, which may also increase costs related to complying with new post-approval regulatory requirements, and increase potential FDA restrictions on the sale or distribution of approved products. During the approval process, the FDA will determine whether a REMS is necessary to assure the safe use of the drug or biologic post-approval. If the FDA concludes that a REMS is needed, the sponsor of the NDA or BLA must submit a proposed REMS; the FDA will not approve the NDA or BLA without a REMS, if required.

1821

~~Table~~Before approving an NDA or BLA, the FDA will inspect the facilities at which the product is to be manufactured. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with CGMP requirements and adequate to assure consistent production of ~~Contents~~the product within required specifications. In this inspection, the FDA also seeks to determine whether the manufacturing conforms with application commitments, the authenticity and accuracy of data, and the adequacy of the company’s analytical methodology. Additionally, before approving an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with current good clinical practices, or CGCPs. If the FDA determines the application, data, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information.

~~Before~~The ~~approving an~~ NDA or BLA, ~~the~~review ~~FDA~~and ~~will~~approval ~~inspect~~process ~~the~~is ~~facilities~~lengthy atand ~~which~~difficult and the ~~product~~FDA ismay refuse to beapprove ~~manufactured.~~an ~~The~~NDA ~~FDA~~or ~~will~~BLA ~~not~~if ~~approve~~ the ~~product~~applicable ~~unless~~regulatory itcriteria ~~determines~~are ~~that~~not satisfied or the ~~manufacturing~~agency ~~processes~~requires additional ~~and~~clinical ~~facilities~~data ~~are~~or inother ~~compliance~~data ~~with~~and ~~cGMP~~information. ~~requirements~~Even if such data and ~~adequate~~information tois ~~assure~~submitted, ~~consistent~~the ~~production~~FDA ofmay ultimately decide that the ~~product~~NDA ~~within~~or ~~required~~BLA ~~specifications. In~~does ~~this~~not ~~inspection,~~satisfy the ~~FDA~~criteria ~~also~~for ~~seeks~~approval. toData ~~determine~~obtained ~~whether~~from ~~the~~clinical ~~manufacturing~~trials ~~conforms~~are ~~with~~not ~~application~~always ~~commitments,~~conclusive and ~~the~~may ~~authenticity~~be ~~and~~susceptible ~~accuracy~~to ofvarying ~~data~~interpretations, ~~and~~which ~~the~~could ~~adequacy~~delay, oflimit ~~the~~or ~~company’s~~prevent ~~analytical~~regulatory ~~methodology~~approval. ~~Additionally~~In addition, ~~before~~protocol deviations ~~approving~~or andata ~~NDA~~discrepancies orcould ~~BLA~~delay, ~~the~~limit or prevent regulatory approval. The FDA will ~~typically~~issue ~~inspect~~a ~~one~~Complete Response Letter, or ~~more~~CRL, ~~clinical~~if ~~sites~~the toagency ~~assure~~decides ~~compliance~~not ~~with~~to ~~current~~approve ~~good~~the ~~clinical~~NDA ~~practices,~~ or ~~cGCPs~~BLA. IfThe ~~the~~CRL ~~FDA~~describes ~~determines~~all of the ~~application,~~specific ~~data,~~deficiencies ~~manufacturing~~in ~~process~~the NDA or ~~manufacturing~~BLA identified ~~facilities~~by ~~are~~the ~~not~~FDA. ~~acceptable,~~The itdeficiencies ~~will~~identified ~~outline~~may ~~the~~be ~~deficiencies~~minor, infor ~~the~~example, ~~submission~~requiring ~~and~~labeling ~~often~~changes, ~~will~~or ~~request~~major, for example, requiring additional ~~testing~~clinical trials or ~~information~~new clinical data.

~~The~~Additionally, ~~NDA or BLA review and approval process is lengthy and difficult and~~ the ~~FDA~~CRL may ~~refuse~~include torecommended ~~approve~~actions anthat ~~NDA or BLA if~~ the applicant ~~applicable~~might ~~regulatory~~take ~~criteria~~to ~~are~~place ~~not satisfied or~~ the ~~agency~~application ~~requires~~in ~~additional~~a ~~clinical~~condition ~~data~~for ~~or other data and information~~approval. ~~Even~~If ifa ~~such~~CRL ~~data and information~~ is ~~submitted~~issued, the ~~FDA~~applicant may ~~ultimately~~either ~~decide that~~ resubmit the NDA or BLA ~~does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive and may be susceptible to varying interpretations~~, ~~which~~addressing could delay, limit or prevent regulatory approval. In addition, protocol deviations or data discrepancies could delay, limit or prevent regulatory approval. The FDA will issue a “complete response” letter if the agency decides not to approve the NDA or BLA. The complete response letter usually describes all of the ~~specific~~ deficiencies ~~in the NDA or BLA~~ identified byin the ~~FDA. The deficiencies identified may be minor~~CRL, ~~for example, requiring labeling changes,~~ or ~~major,~~withdraw ~~for~~the ~~example, requiring additional clinical trials~~application.

~~Additionally~~If a product receives regulatory approval, the ~~complete~~approval ~~response~~may be ~~letter~~limited to specific diseases and dosages or the indications for use may ~~include~~otherwise ~~recommended~~be ~~actions~~limited, ~~that~~which could restrict the ~~applicant~~commercial value ~~might~~of ~~take~~the toproduct. ~~place~~Further, the ~~application~~FDA inmay arequire ~~condition~~that ~~for~~certain ~~approval.~~contraindications, Ifwarnings aor ~~complete~~precautions ~~response~~be ~~letter~~included isin ~~issued~~the product labeling. In addition, the ~~applicant~~FDA may ~~either~~require ~~resubmit~~Phase 4 ~~the~~testing ~~NDA~~which orinvolves ~~BLA,~~clinical ~~addressing~~trials ~~all~~designed ofto ~~the~~further ~~deficiencies~~assess ~~identified~~a inproduct’s post-market ~~the~~safety ~~letter,~~and oreffectiveness ~~withdraw~~and may require testing and surveillance programs to monitor the ~~application~~safety of approved products that have been commercialized.

If a product receives regulatory approval, the approval may be limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling. In addition, the FDA may require Phase 4 testing which involves clinical trials designed to further assess a product’s safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized.

Orphan Drug Designation

Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making a drug or biological product available in the United States for this type of disease or condition will be recovered from sales of the product. Orphan product designation must be requested before submitting an NDA or BLA. After the FDA grants orphan product designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan product designation does not convey any advantage in or shorten the duration of the regulatory review and approval process.

If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications to market the same drug or biological product for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity. Competitors, however, may receive approval of different products for the indication for which the orphan product has exclusivity or obtain approval for the same product but for a different indication for which the orphan product has exclusivity. Orphan product exclusivity also could block the approval of one of our products for seven years if a competitor obtains approval of the same drug or biological product for the same indication as defined by the FDA or if our drug or biological candidate is determined to be contained within the competitor’s product for the same indication or disease. If a drug or biological product designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan product exclusivity. Orphan drug status in the European Union has similar but not identical benefits in the European Union.

The FDA granted ODD to ELZONRIS for the treatment of AML, in February 2011 and for BPDCN in June 2013. The European Medicines Agency, or EMA, granted ODD to ELZONRIS for the treatment of AML in October 2015 and for BPDCN in November 2015. In addition, we received ODD for SL-701 for the treatment of glioma in January 2015. ELZONRIS was granted BTD by the FDA, for the treatment of patients with BPDCN in August 2016. On December 21, 2018, the FDA granted approval of ELZONRIS for the treatment of BPDCN in adult and pediatric patients two years and older, in both treatment-naïve and previously-treated populations.

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Expedited Development and Review Programs

The FDA has established aExpedited ~~BTD~~Review ~~program~~Programs ~~wherein~~to areview applications ~~drug~~for ~~may~~therapies ~~receive~~that ~~this designation if it is intended to~~ treat a serious ~~condition~~or ~~where~~life-threatening ~~preliminary~~diseases ~~clinical~~or ~~evidence~~have ~~indicates that~~ the ~~drug~~potential ~~may~~to ~~demonstrate~~provide ~~substantial~~unusually ~~improvement~~large onbenefits to apatients ~~clinically~~more ~~significant~~efficiently endpoint(s) over available therapies. Drugs receiving FDA designation as breakthrough therapies typically receive intensive guidance from FDA’s review teams for efficient drug development, organizational commitment from FDA, and ~~rolling review of applications submitted for approval, among other things~~expeditiously.

A product may be eligible for the BTD program, allowing expedited development and review by FDA. A BTD may apply to a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate a substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. The benefits of BTD include more intensive FDA guidance on an efficient drug development program, an organizational commitment involving senior FDA managers, and eligibility for rolling review and priority review of marketing applications. The receipt of a BTD for a product candidate may not result in a faster development process, review or approval compared to drugs considered for approval under conventional FDA procedures and a BTD may be rescinded by FDA where subsequent data no longer support the BTD of the candidate.

In August 2016, we announced that the FDA granted BTD to ELZONRIS for the treatment of BPDCN. On December 21, 2018, the FDA granted approval of ELZONRIS for the treatment of BPDCN in adult and pediatric patients two years and older, in both treatment-naïve and previously treated populations.

The FDA also has a Fast Track program that is intended to expedite or facilitate the process for reviewing new drug and biological products that meet certain criteria. Specifically, new drug and biological 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 drug product alone or in combination with one or more other drugs for the specific indication for which it is being studied. Unique to a Fast Track product, the FDA may consider reviewing sections of the NDA or BLA on a rolling basis before the complete application is submitted. In addition, the sponsor and FDA would agree on a schedule for the submission of the sections of the NDA or BLA. If the FDA agrees to a rolling review of a NDA or BLA, and determines that the schedule is acceptable, the sponsor pays any required user fees upon submission of the first section of the NDA or BLA.

Any product submitted to the FDA for marketing approval, including those submitted to a Fast Track program, may also be eligible for other types of FDA programs intended to expedite development and review, such as priority review and accelerated approval. Any product is eligible for priority review if it has the potential to provide safe and effective therapy where no satisfactory alternative therapy exists or a significant improvement in the treatment, diagnosis or prevention of a disease compared with marketed products. The FDA will attempt to direct additional resources to the evaluation of an application for a new drug or biological product designated for priority review in an effort to facilitate the review with the goal of taking Agency action on a marketing application within six (6) months.23

~~Additionally,~~Any a product ~~may~~submitted beto ~~eligible~~the ~~for~~FDA ~~accelerated approval. Drug or biological products studied~~ for ~~their~~marketing ~~safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated~~ approval, ~~which~~including those ~~means~~submitted ~~that they may be approved on the basis of adequate and well-controlled clinical studies establishing that the product has an effect on a surrogate endpoint that is reasonably likely~~ to ~~predict~~ a ~~clinical~~Fast ~~benefit~~Track program, ormay onalso ~~the~~be ~~basis~~eligible offor ~~an effect on a clinical endpoint~~ other ~~than~~types ~~survival or irreversible morbidity. As a condition~~ of ~~approval, the~~ FDA ~~generally~~programs ~~requires~~intended ~~that a sponsor of a drug or biological product receiving accelerated approval perform adequate and well-controlled post-marketing clinical studies~~ to ~~establish~~expedite ~~safety~~ development and ~~efficacy for the approved indication. Failure to conduct such studies~~review, ~~or conducting~~ such ~~studies that do not establish the required safety and efficacy may result in revocation of the original approval. In addition, the FDA currently requires~~ as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch or subsequent marketing of the product. Fast Track designation, priority review and accelerated approval ~~may expedite the development or approval process~~.

~~Lastly,~~Any a product ~~may~~is be eligible for ~~BTD~~Priority ~~and~~Review ~~expedited~~if ~~development~~it ~~and~~has ~~review~~the ~~by FDA. A Breakthrough Therapy is defined as a drug that is intended, alone or in combination with one or more other drugs,~~ potential to ~~treat~~provide asafe ~~serious or life-threatening disease or condition,~~ and ~~preliminary~~effective ~~clinical~~therapy ~~evidence~~where ~~indicates~~no ~~that~~satisfactory ~~the~~alternative ~~drug~~therapy ~~may~~exists ~~demonstrate~~or a ~~substantial~~significant improvement ~~over~~in ~~existing~~the ~~therapies~~treatment, diagnosis ~~on one~~ or ~~more~~prevention ~~clinically~~of ~~significant~~a ~~endpoints,~~disease ~~such~~compared aswith ~~substantial~~marketed ~~treatment effects observed early in clinical development~~products. The ~~benefits of BTD include more intensive~~ FDA ~~guidance~~will onattempt anto ~~efficient~~direct ~~drug~~additional ~~development~~resources ~~program,~~to anthe evaluation ~~organizational commitment involving senior FDA managers, and eligibility for rolling review and priority review~~ of ~~marketing~~an ~~applications.~~application ~~The receipt of a BTD~~ for a ~~product~~new ~~candidate~~drug ~~may not result in a faster development process, review~~ or ~~approval~~biological ~~compared~~product todesignated ~~drugs considered~~ for ~~approval~~priority ~~under~~review ~~conventional~~in ~~FDA~~an ~~procedures~~effort ~~and a BTD may be rescinded by FDA where subsequent data no longer support the BTD of the candidate. In August 2016, we announced that the FDA granted BTD~~ to ~~ELZONRIS~~facilitate ~~for~~ the review ~~treatment~~with ~~of BPDCN. On December 21, 2018,~~ the ~~FDA~~goal ~~granted approval~~ of ~~ELZONRIS~~taking ~~for~~Agency ~~the~~action ~~treatment~~on ofa ~~BPDCN~~marketing inapplication ~~adult~~within ~~and~~six ~~pediatric patients two years and older, in both treatment-naïve and previously-treated populations~~(6) months.

Lastly, a product may be eligible for the Accelerated Approval Program. 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, which means that they may be approved on the basis of adequate and well-controlled clinical studies establishing that the product 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. As a condition of approval, the FDA generally requires that a sponsor of a drug or biological product receiving accelerated approval perform adequate and well-controlled post-marketing clinical studies to establish safety and efficacy for the approved indication. Failure to conduct such studies, or conducting such studies that do not establish the required safety and efficacy may result in revocation of the original approval. In addition, the FDA currently requires as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial launch or subsequent marketing of the product. Fast Track designation, priority review and accelerated approval may expedite the development or approval process.

Post-Approval Requirements

Any drug or biological products for which we receive FDA approvals are subject to continuing regulation by the FDA, including, among other things, ~~cGMP~~CGMP compliance, record-keeping requirements, reporting of nonconforming distributed products which would require field alert reports (FARs) for NDAs and biological product deviation reports (BPDRs) for BLAs, reporting of adverse events, providing the FDA with updated safety and efficacy information on an annual basis or as required more frequently for specific events, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, prohibitions against promoting drugs and biologics for uses or in patient populations that are not described in the drug’s or biologic’s approved labeling (known as “off-label promotion”), rules for conducting industry-sponsored scientific and educational activities, limitations on comparative or superiority claims and promotional activities involving data presentations. Failure to comply with FDA requirements can have negative consequences, including for cause inspections; warning or untitled letters from the FDA, including demands for correction or removal of noncomplying product; adverse publicity; mandated corrective advertising or communications with doctors; and civil or criminal penalties. Although physicians may prescribe legally available drugs and biologics for off-label uses, manufacturers may not market or promote such off-label uses.

20We rely, and expect to continue to rely, on third parties for the production of clinical and commercial quantities of our product candidates. Manufacturers of our product candidates are required to comply with applicable FDA manufacturing requirements contained in the FDA’s CGMP regulations. CGMP regulations require among other things, quality control and quality assurance as well as the corresponding maintenance of comprehensive records and documentation. We are required by law to establish adequate oversight and control over raw materials, components and finished products furnished by our third-party manufacturers, which we establish by contract, supplier qualification and periodic audits, but unforeseen circumstances could affect our third-party manufacturers’ compliance with applicable regulations and standards. Drug and biologic manufacturers and other entities involved in the manufacture and distribution of approved drugs and biologics are also required to register their establishments and list any products made there with the FDA and comply with related requirements in certain states, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with CGMP and other laws. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain CGMP compliance. Discovery of problems with a product after approval may result in serious and extensive restrictions on a product, manufacturer, or holder of an approved NDA or BLA, including suspension of a product until the FDA is assured that quality standards can be met, continuing oversight of manufacturing by the FDA under a “consent decree,” which frequently includes the imposition of penalties for failure to comply with the terms of the consent decree, audits conducted by outside experts, extensive reporting requirements, and possible withdrawal of the product from the market. Historically, the minimum term of an FDA consent decree has been five years, and violation of consent decree terms can result in the extension of the consent decree term.

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limitations on comparative or superiority claims and promotional activities involving data presentations. Failure to comply with FDA requirements can have negative consequences, including for cause inspections; warning or untitled letters from the FDA, including demands for correction or removal of noncomplying product; adverse publicity; mandated corrective advertising or communications with doctors; and civil or criminal penalties. Although physicians may prescribe legally available drugs and biologics for off-label uses, manufacturers may not market or promote such off-label uses.

We rely, and expect to continue to rely, on third parties for the production of clinical and commercial quantities of our product candidates. Manufacturers of our product candidates are required to comply with applicable FDA manufacturing requirements contained in the FDA’s cGMP regulations. cGMP regulations require among other things, quality control and quality assurance as well as the corresponding maintenance of comprehensive records and documentation. We are required by law to establish adequate oversight and control over raw materials, components and finished products furnished by our third-party manufacturers, which we establish by contract, supplier qualification and periodic audits, but unforeseen circumstances could affect our third-party manufacturers’ compliance with applicable regulations and standards. Drug and biologic manufacturers and other entities involved in the manufacture and distribution of approved drugs and biologics are also required to register their establishments and list any products made there with the FDA and comply with related requirements in certain states, and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance. Discovery of problems with a product after approval may result in serious and extensive restrictions on a product, manufacturer, or holder of an approved NDA or BLA, including suspension of a product until the FDA is assured that quality standards can be met, continuing oversight of manufacturing by the FDA under a “consent decree,” which frequently includes the imposition of penalties for failure to comply with the terms of the consent decree, audits conducted by outside experts, extensive reporting requirements, and possible withdrawal of the product from the market. Historically, the minimum term of an FDA consent decree has been five years, and violation of consent decree terms can result in the extension of the consent decree term.

Major changes to the manufacturing process and other types of major changes, such as adding new indications, require prior FDA approval before being implemented. Moderate and minor changes require FDA notification but not prior approval.

The FDA also may require post-marketing testing, known as Phase 4 testing, risk minimization action plans and surveillance to monitor the effects of an approved product or place conditions on an approval that could otherwise restrict the distribution or use of the product.

On July 9, 2012, the Food and Drug Administration Safety and Innovation Act, among other things, renewed the drug user fee program, expanded the FDA’s inspection records access and required manufacturers to establish appropriate oversight and controls over their suppliers and the supply chain, including raw material suppliers and contract manufacturers, as a part of ~~cGMP~~CGMP compliance. On November 27, 2013, the Drug Quality and Security Act, which included the Drug Supply Chain Security Act, was enacted to, among other things, build an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States. Requirements for the tracing of products through the pharmaceutical distribution supply chain took effect on January 1, 2015 for manufacturers and building internal systems to ensure compliance with this law will require dedication of resources. In addition, this law requires engaging in transactions only with authorized trading partners and can limit the pool of available trading partners. On August 18, 2017, the FDA Reauthorization Act of 2017, among other things, reauthorized and amended the user fee program eliminating the establishment fee and replacing the Prescription Drug Product Fee with a Prescription Drug Program Fee.

U.S. Patent Term Restoration and Marketing Exclusivity

Drug Price Competition and Patent Term Restoration Act of 1984

Depending upon the timing, duration and specifics of the FDA approval of the use of our drug and biologics candidates, some of our United States patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments. Although drafted to cover small-molecule drugs, as opposed to biologics, the Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during federal regulatory review preceding the FDA regulatory review process. The FDA has been granting patent term extensions to biologics. However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date. The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of an NDA or a BLA plus the time between the submission date of an NDA or a BLA and the approval of that application. Only one patent applicable to an approved drug or biologic is eligible for the extension and the application for the extension must be submitted within 60 days of approval and prior to the expiration of the patent. Further, to be eligible for patent term extension a drug must be the first permitted commercial marketing for which there was a regulatory review period. The United States Patent and Trademark Office, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. In the future, we may apply for restoration of patent term for one of our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA.

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restoration. In the future, we may apply for restoration of patent term for one of our currently owned or licensed patents to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant NDA.

Federal Food, Drug and Cosmetic Act

Market exclusivity provisions under the FDCA, which are independent of patent status and any patent-related extensions and can run concurrently with a patent or not, can also delay the submission or effective approval of certain applications of companies seeking to reference another company’s NDA. The length of time that the FDA grants depends on the type of exclusivity.

If the new drug that is the subject of an approved NDA contains a new chemical entity, the FDCA provides a five-year period of non-patent marketing exclusivity within the United States that runs from the date of NDA approval. FDA regulations define “new chemical entity” as “a drug that contains no active moiety that has been approved by FDA in any other NDA submitted under section 505(b) of the Federal Food, Drug, and Cosmetic Act.” 21 C.F.R. § 314.108. During the five-year exclusivity period, no company may submit an ANDA or a 505(b)(2) NDA for a drug product that contains the same active moiety as in the new chemical entity with one exception, however, such application may be submitted after four years if it contains a certification of patent invalidity or noninfringement to one of the patents listed in FDA’s Orange Book by the innovator NDA holder.

The FDCA also provides three years of marketing exclusivity for an NDA, or supplement to an existing NDA, that contained new clinical investigations (other than bioavailability studies) that were conducted or sponsored by the applicant and are deemed by FDA to be essential to the approval of the NDA or supplement. Such new clinical investigations may support approval of, for example, new indications, dosages or strengths of an existing drug. This three-year exclusivity period runs from the date of approval of the NDA or supplement containing the new clinical investigations and covers only the conditions associated with the new clinical investigations. That is, it bars the FDA from approving an ANDA or 505(b)(2) NDA for those conditions of approval. Unlike NCE exclusivity, exclusivity for new clinical investigations does not prohibit the submission of an ANDA or 505(b)(2) NDA by another company during that three-year period.

Pediatric exclusivity is another type of regulatory market exclusivity in the United States. Pediatric exclusivity, if granted by the FDA, adds six months to existing exclusivity periods and patent terms. This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the completion of a pediatric trial in accordance with an FDA-issued “Written Request” for such a trial. Biologic products that are subject to the PHSA are not eligible for pediatric exclusivity under the FDCA.

Biologics Price Competition and Innovation Act of 2009

The Biologics Price Competition and Innovation Act of 2009, or BPCIA, amended the PHSA to create a new licensure framework for biosimilar products, which could ultimately subject our biological product candidates to competition. Under the BPCIA, a manufacturer may submit an application for licensure of a biological product that is “biosimilar to” or “interchangeable with” a referenced, branded biologic product. Previously, there had been no licensure pathway for such biosimilar or interchangeable products. For purposes of the BPCIA, a reference product is defined as the single biological product licensed under a full BLA against which a biological product is evaluated in an application submitted under a follow-on BLA.

The BPCIA also created a 12-year period of reference product exclusivity, which can be extended to 12.5 years with pediatric exclusivity. The 12-year exclusivity period begins on the date of first licensure of the reference product under the PHSA and during which the licensure of a follow-on application for a biosimilar or interchangeable product cannot be made effective. During the first four years (or four and one-half years with pediatric exclusivity) of the 12-year period, an application for a biosimilar or interchangeable version of the reference product cannot be submitted to the FDA. Members have recently begun introducing bills that would decrease the reference product exclusivity ~~reference product exclusivity~~ from 12 to seven years. Congress has not yet enacted such a change in the BPCIA, but could move to enact such a decrease in the reference product exclusivity period.

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The BPCIA includes limits on obtaining 12-year reference product exclusivity for certain changes or modifications to the reference product. A separate 12-year reference product exclusivity period does not apply to:

a BLA supplement for the product that is the reference product;

a subsequent BLA filed by the same reference product sponsor or manufacturer (or a licensor, predecessor in interest, or other related entity) for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength; or

a modification to the structure of the biological product that does not result in a change in safety, purity or potency.

In addition to creating a 12-year period of reference product exclusivity, the BPCIA clarifies the interaction of that exclusivity with orphan drug exclusivity, such that, if a reference product has been designated for a rare disease or condition the licensure of a biosimilar or interchangeable version of a reference product for such disease or condition may only occur after the later of the expiration of any applicable seven-year orphan drug exclusivity or the 12-year reference product exclusivity (or seven and one-half years and 12.5 years with pediatric exclusivity).

Like pediatric exclusivity applicable to drug products approved under the FDCA, pediatric exclusivity applicable to biological reference products is subject to an exception. Pediatric exclusivity will not apply to either the 12-year reference product or the seven-year orphan drug exclusivity periods if the FDA has not determined that the study reports a BLA sponsor submitted in response to a written request for pediatric studies met the terms of that request before nine months prior to the expiration of such period.

Our biological product candidates, if approved, could be considered reference products entitled to 12-year exclusivity. Even if our products are considered to be reference products eligible for exclusivity, another company could market a competing version of any of our biological products 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 sets forth a complex mechanism for resolving patent disputes that ~~involves~~involve a step-wise exchange of information prior to the initiation of a patent infringement lawsuit against a biosimilar or interchangeable product sponsor. Unlike the Hatch-Waxman Act, the BPCIA provides no automatic stay on approval of a biosimilar product application, except an interchangeable product receives the lesser of one year of exclusivity after the date of first commercial marketing or 18 months of exclusivity after a final court decision or dismissal of a patent challenge or, if the applicant has not been sued, after approval. The BPCIA does not prevent a competitor from conducting its own clinical trials and submitting a full BLA on the same or similar product.

There is also currently substantial uncertainty as to how certain terms of the BPCIA will be interpreted by the Courts, which may affect the timing of the entry of a biosimilar or interchangeable product to market, and the required notice that the owner of the reference product exclusivity must be given by the owner of the application of a biosimilar or interchangeable product. Should the courts resolve the interpretation issues in favor of the biosimilar or interchangeable product applicants, the BPCIA may offer more limited exclusivity to the reference product than currently believed.

Other U.S. Healthcare Laws and Compliance Requirements

In the United States, ~~our~~healthcare-related activities are potentially subject to regulation by various federal, state and local authorities in addition to the FDA, including the Centers for Medicare ~~and~~ & Medicaid Services, or CMS (formerly the Health Care Financing Administration), other divisions of the United States Department of Health and Human Services, or HHS (e.g., the Office of Inspector General and the Office of Civil Rights), the United States Department of Justice and individual United States Attorney offices within the Department of Justice, state ~~attorney~~attorneys ~~generals~~general and state and local governments. For example, sales, marketing and scientific/educational grant programs must comply with the federal Anti-Kickback Statute, the federal False Claims Act, the privacy and security provisions of the Health Insurance Portability and Accountability Act, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, (“or HITECH~~”),~~ , and similar state laws, each as amended. Pricing and rebate programs must comply with the Medicaid rebate requirements of the Omnibus Budget Reconciliation Act of 1990, the Veterans Health Care Act of 1992, and the federal Anti-Kickback Statute, each as amended. If products are made available to authorized users of the Federal Supply Schedule, (or FSS), of the General Services Administration, additional laws and requirements apply. Under the Veterans Health Care Act, or VHCA, drug companies are required to offer certain pharmaceutical products at a reduced price to four federal agencies including the United States Department of Veterans Affairs, the United States Department of Defense, the Coast Guard, the Public Health Service and certain private Public Health Service designated entities (including the Indian Health Service) in order for reimbursement to be available for our product under Medicare and Medicaid. FSS pricing to these four agencies must be equal to or less than the federal ceiling price, (“or FCP”), which is, at a minimum, 24% off the Non-Federal Average Manufacturer Price for the prior fiscal year.

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Participation under the VHCA requires submission of pricing data and calculation of discounts and rebates pursuant to complex statutory formulas, as well as the entry into government procurement contracts governed by the Federal Acquisition Regulations.

In order to distribute products commercially, we must comply with state laws that require the registration of manufacturers and wholesale distributors of pharmaceutical products in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers or distributors have no place of business within the state. 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, 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. All of our activities are potentially subject to federal and state consumer protection and unfair competition laws. In addition, in August 2013, the federal Physician Payment Sunshine Act took effect and requires annual reporting by prescription drug manufacturers with at least one (1) approved product of certain payments and transfers of value made to physicians and teaching hospitals. Post-approval of any of our product candidates, we will need to ensure compliance with annual tracking and reporting of these payments and transfers of value to CMS.

Europe and Worldwide Government Regulation

In addition to regulations in the United States, we will be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales and distribution of our products.

Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. Certain countries outside of the United States have a similar process that requires the submission of a clinical trial application much like the IND prior to the commencement of human clinical trials. In the European Union, for example, a clinical trial application, or CTA, must be submitted to each country’s national health authority and an independent ethics committee, much like the FDA and IRB, respectively. Once the CTA is approved in accordance with a country’s requirements, clinical trials may proceed.

The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In all cases, the clinical trials are required to be in accordance with International Conference on Harmonisation (ICH) / WHO Good Clinical Practice standards and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

To obtain regulatory approval of an investigational drug or biological product under European Union regulatory systems, we must submit a marketing authorization application to the EMA. The application used to file an NDA or a BLA in the United States is similar to that required in the European Union, with the exception of, among other things, country-specific document requirements. For example, the EMA has already established a number of guidelines for approval of various biosimilars.

For other countries outside of the European Union, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In all cases, again, the clinical trials are conducted in accordance with ~~cGCP~~ CGCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.

If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Pharmaceutical Coverage, Pricing and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of any drug or biological candidates for which we obtain regulatory approval. In the United States and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payors. Third-party payors include government health administrative authorities, managed care providers, private health insurers and other organizations. The process for determining whether a payor will provide coverage for a drug or biological product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the drug or biological product. Third-party payors may limit coverage to specific drug or biological products on an approved list, or formulary, which might not include all of the FDA-approved drug or biological products for a particular indication. Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy. We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain the FDA approvals. Our drug or biological candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug or biological product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

24In 2003, the United States government enacted legislation providing a partial prescription drug benefit for Medicare recipients, which became effective at the beginning of 2006. Government payment for some of the costs of prescription drugs and biologics may increase demand for any products for which we receive marketing approval. However, to obtain payments under this program, we would be required to sell products to Medicare recipients through prescription drug plans operating pursuant to this legislation. These plans will likely negotiate discounted prices for our products. Further, to obtain coverage under Medicare Part B or Medicaid, we would be required to enter into a national rebate agreement with the Secretary of HHS to provide substantial rebates and discounts to state Medicaid agencies, certain government purchasers, and certain non-profit health care entities. Federal, state and local governments in the United States continue to consider legislation to limit the growth of healthcare costs, including the cost of prescription drugs and biologics. Future legislation could limit payments for pharmaceuticals such as the drug or biological candidates that we are developing.

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conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain the FDA approvals. Our drug or biological candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a drug or biological product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

In 2003, the United States government enacted legislation providing a partial prescription drug benefit for Medicare recipients, which became effective at the beginning of 2006. Government payment for some of the costs of prescription drugs and biologics may increase demand for any products for which we receive marketing approval. However, to obtain payments under this program, we would be required to sell products to Medicare recipients through prescription drug plans operating pursuant to this legislation. These plans will likely negotiate discounted prices for our products. Federal, state and local governments in the United States continue to consider legislation to limit the growth of healthcare costs, including the cost of prescription drugs and biologics. Future legislation could limit payments for pharmaceuticals such as the drug or biological candidates that we are developing.

Different pricing and reimbursement schemes exist in other countries. In the European Community, governments influence the price of pharmaceutical products through their pricing and reimbursement rules and control of national healthcare systems that fund a large part of the cost of those products to consumers. Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost-effectiveness of a particular drug or biological candidate to currently available therapies. Other member states allow companies to fix their own prices for medicines, but monitor and control company profits. The downward pressure on healthcare costs in general, particularly prescription drugs and biologics, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert a commercial pressure on pricing within a country.

The marketability of any drug or biological candidates for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. In addition, emphasis on managed care in the United States has increased and we expect will continue to increase the pressure on pharmaceutical pricing. Coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Manufacturing

We do not currently own or operate any manufacturing facilities for the clinical or commercial production of our drug candidates. For past investigator sponsored studies, all drug substance and drug product for ELZONRIS and SL-701 ~~was~~were manufactured at academic and contract manufacturing ~~organizations~~organization, or CMO, facilities, as directed by our academic collaborators. We have now developed manufacturing processes that are suitable for full-scale ~~cGMP~~ CGMP manufacturing. Additionally, we have qualified FDA-audited third-party CMOs to produce sufficient quantities of ELZONRIS, SL-801, and SL-701 drug substance and drug product of suitable quality for our active and contemplated corporate sponsored clinical trials and commercialization. For ELZONRIS, commercial supplies have been manufactured in support of approval and routine resupply manufacturing is ongoing. Our manufacturing programs are being managed with oversight by our manufacturing team, which is comprised of full-time employees and consultants with experience in manufacturing pharmaceutical drug substance and drug products.

ELZONRIS Manufacturing and Supply

ELZONRIS is a recombinant protein generated from an antibiotic-resistance driven DNA-based plasmid vector and manufactured by bacterial fermentation in E. coli. For past investigator sponsored studies, ELZONRIS was manufactured at Wake Forest University. We have optimized the protein expression, generated ~~cGMP~~CGMP master and working cell banks, and developed the fermentation and purification steps of our manufacturing process to be suitable for scale-up in standard manufacturing equipment. This technology has been transferred to a third-party CMO with expertise in bacterial fermentation, which has further optimized and scaled-up the process in their ~~cGMP~~CGMP production suite. The ELZONRIS drug substance has now met standard industry quality specifications and is adequate to support commercial distribution as well as our ongoing and planned corporate sponsored clinical trials. The drug product formulation and manufacturing process has been transferred to a third-party CMO with expertise in sterile product manufacture for clinical and commercial supply, and they have successfully produced drug product meeting CGMP ~~cGMP~~ requirements for use in clinical studies. We ~~expect~~have also utilized the same process, scale and CMOs ~~will be used~~ to manufacture drug substance and drug product for current and future commercial supply. WeAdditionally, we have a lyophilized formulation of ELZONRIS, which is currently being developed.

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SL-801 Manufacturing and Supply

SL-801 is a small molecule that is prepared via synthetic organic chemistry. We have completed process development and ~~cGMP~~CGMP manufacturing at an adequate scale to supply our ongoing and planned corporate sponsored clinical studies. We have also developed a stable solid-oral tablet formulation that has been produced using CGMP ~~cGMP~~ manufacturing equipment at our third-party CMO. We believe that the manufacturing scale and product quality procedures and oversight ensure an adequate supply for our active and planned corporate sponsored clinical studies.

SL-701 Manufacturing and Supply

SL-701 is an immunotherapy that is comprised of several short synthetic peptides. Each of the component peptides of SL-701 is manufactured individually by solid-phase synthesis and all have been prepared to acceptable quality specifications in ~~cGMP~~CGMP manufacturing equipment by our third-party CMO. The manufacturing scale and product quality procedures and oversight ensure an adequate supply for our active and planned corporate sponsored clinical studies. We have also developed a stable formulation that combines the individual peptides in a single sterile solution to generate SL-701 drug product. This manufacturing process was transferred to a third-party CMO with expertise in sterile product manufacture. This CMO has produced multiple ~~cGMP~~CGMP drug product batches of sufficient quality and quantity to supply our corporate sponsored clinical trials. SL-701 has been utilized with several different adjuvants including Montanide, GM-CSF, Imiquimod, and poly-ICLC. We have been, and may continue to be, reliant on the availability of these adjuvants from their respective manufacturers.

SL-901

SL-901 is a small molecule that is prepared via synthetic organic chemistry. WeProcess ~~are~~development ~~engaged~~and inactive ~~process~~pharmaceutical ~~development~~ingredient, toor ~~support~~API, ~~cGMP~~CGMP manufacturing at an adequate scale to enable an IND, or foreign equivalent, submission and supply our planned clinical studies have been completed. We have also developed a stable capsule formulation that will be produced using ~~cGMP~~CGMP manufacturing equipment at our third-party CMO. We believe that the manufacturing scale and product quality procedures and oversight ensure an adequate supply for our planned clinical studies.

SL-1001

SL-1001 is a small molecule that is prepared via synthetic organic chemistry. API process development and CGMP manufacturing is ongoing at a third-party CMO. Development of an oral capsule formulation is also ongoing at a different third-party CMO. We believe that the manufacturing scale and product quality procedures and oversight will ensure an adequate supply for our planned corporate sponsored clinical studies.

Sales and Marketing

WeStemline’s ~~believe~~commercial ~~the~~group ~~infrastructure~~is ~~required~~primarily tofocused ~~commercialize~~on ~~oncology~~effectively launching ~~products~~and iscommercializing ~~cost-effective~~ELZONRIS ~~for~~in usthe toU.S. ~~internally~~The ~~develop,~~commercial ~~train,~~group ~~and~~is ~~deploy~~comprised of a wide range of functions including commercial operations, sales, marketing, and ~~sales~~market ~~force~~access toand ~~support~~reimbursement. Additionally, the ~~U.S.~~organization ~~launch~~has ofestablished ~~ELZONRIS.~~a Ifmedical ~~ELZONRIS~~affairs presence in the field, which is ~~approved~~predominantly staffed by ~~the~~medical ~~EMA,~~science weliaisons. ~~plan~~We aim to ~~potentially~~ build ~~the~~on ~~infrastructure~~this tofield ~~commercialize~~presence ~~these~~based on ~~products~~routine inreviews ~~Europe~~of ~~ourselves~~the business and market. ~~However~~For 2020, we ~~will~~anticipate ~~remain~~adding ~~opportunistic~~diagnostic inand ~~seeking~~telephonic ~~strategic~~sales ~~partnerships~~teams into ~~these~~further enhance ~~and~~product ~~other~~uptake. ~~markets~~We ~~when~~believe ~~advantageous~~the aforementioned functions represent the necessary infrastructure to support a successful launch of ELZONRIS indicated for BPDCN in the U.S.

The commercial infrastructure of specialty oncology products typically consists of a targeted, specialty sales force that calls on a ~~limited~~highly ~~and~~targeted ~~focused~~ group of ~~physicians~~health care providers, or HCPs, supported by sales management, internal sales support, an internal marketing group, and distribution ~~support~~. Additional capabilities important to the oncology marketplace include the management of key accounts, such as managed care organizations, group-purchasing organizations, specialty ~~pharmacies~~distributors, oncology group networks, and government accounts. As ELZONRIS is approved ~~in, and our other compounds may initially be developed~~ for, an ultra-orphan ~~indications~~ indication with a relatively small number of treating physicians,. weThis ~~anticipate~~corresponds ~~that~~with a reduced infrastructure, ~~including~~need consisting of a small, targeted sales force,. The current staffing is thought to be sufficient to support our current sales and marketing objectives but remains scalable given market needs. We have allocated management resources and made significant financial investments to support the commercial launch of ELZONRIS, including preparation of marketing and sales training materials developed in compliance with medical, legal and regulatory requirements. We may elect in the future to utilize strategic partners, distributors, or contract sales forces to assist in the commercialization of our products.

WeIn ~~may~~January 2019, ~~elect~~Stemline submitted a MAA to the EMA, seeking approval of ELZONRIS for the treatment of adult patients with BPDCN. The application is being reviewed under the centralized procedure on a standard review timeline. A SAG in the ~~future~~EU tomet ~~utilize~~in ~~strategic~~March 2020. ~~partners~~In anticipation of potential regulatory success, ~~distributors~~we have assessed European staffing and infrastructure needs, orand ~~contract~~have ~~sales~~hired commercial ~~forces~~personnel to ~~assist~~meet in the ~~commercialization~~needs of ~~our~~a ~~products~~possible second half of 2020 commercial launch in Europe.

Research and Development

Company sponsored research and development expenses totaled $4750.7 million in ~~2018~~2019, $5047.27 million in ~~2017~~2018, and $2750.92 million in ~~2016~~2017. “Research and development expenses” consist of costs associated with the development of our product candidates and our platform technology, which include: clinical trial costs, CMC-related costs, nonclinical costs, employee related expenses, external research and development expenses, license fees and milestone payments related to in-licensed products and technology, and facilities, depreciation and other allocated expenses. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview.”

Employees

As of March 1516, ~~2019~~2020, we had 92 100 full-time employees, 7 of whom hold Ph.D. or M.D. degrees. None of our employees is subject to a collective bargaining agreement or represented by a trade or labor union. We believe that we have a good relationship with our employees.

26Item1.A Risk Factors.

~~Table~~You should carefully consider the following risks and uncertainties. If any of ~~Contents~~the following occurs, our business, financial condition and/or operating results could be materially harmed. These factors could cause the trading price of our common stock to decline, and you could lose all or a substantial part of your investment.

~~Item~~Risks ~~1A.~~Related ~~Risk~~to ~~Factors~~Development, Clinical Testing, Regulatory Approval, and Commercialization of Our Product Candidates

~~You~~We ~~should~~are ~~carefully~~heavily ~~consider~~dependent on the ~~following~~success ~~risks and uncertainties. If any~~ of ~~the following occurs,~~ our ~~business,~~product candidates ~~financial condition~~ and~~/or~~ ~~operating~~clinical ~~results~~product ~~could~~candidates beand ~~materially~~we ~~harmed.~~cannot ~~These~~provide ~~factors~~any ~~could~~assurance ~~cause~~that ~~the~~any ~~trading price~~ of our ~~common~~additional ~~stock~~current toor ~~decline,~~future ~~and~~product candidates ~~you~~will ~~could~~be ~~lose~~approved, ~~all~~commercialized, or asuccessfully ~~substantial~~marketed ~~part~~in ofthe ~~your investment~~future.

~~Risks~~To ~~Related~~date, towe ~~Development~~have invested a significant portion of our efforts and financial resources in the acquisition and development of our clinical product candidates, ~~Clinical~~which ~~Testing~~we plan to advance through clinical development. Our future success depends heavily on our ability to successfully manufacture, ~~Regulatory~~develop, ~~Approval~~obtain regulatory approval for, and ~~Commercialization~~commercialize ofthese ~~Our~~products ~~Product~~and ~~Candidates~~product candidates, which may never occur.

WeBefore ~~are~~we ~~heavily~~generate ~~dependent~~any onincome ~~the~~from ~~success~~sales of our ~~products~~product ~~and~~ candidates, clinical product candidates ~~and~~or future product candidates in the United States or elsewhere, we ~~cannot~~must ~~provide~~complete ~~any~~preclinical ~~assurance~~and clinical development, conduct human subject research, submit clinical and manufacturing data to the U.S. Food and Drug Administration, or FDA, or foreign equivalent, qualify a third-party contract manufacturing organization, or CMO, satisfy the FDA or foreign equivalent that ~~any~~our CMO is capable of ~~our~~manufacturing the product ~~candidates~~in ~~will~~compliance bewith ~~approved~~the FDA’s current good manufacturing practices (CGMPs), submit ~~commercialized~~a marketing application (e.g., Biologics License Application, or ~~successfully~~BLA, ~~marketed~~or foreign equivalent), or New Drug Application, or NDA, or foreign equivalent, receive regulatory approval from the FDA or a foreign regulatory authority, build a commercial organization, make substantial investments, and undertake significant marketing efforts ourselves or in partnership with others to ensure compliant marketing and market acceptance of any products we commercialize. We are not permitted to engage in unrestricted marketing or promotion of any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for our current or future product candidates.

ToWe ~~date~~cannot be certain that any further BLAs, weNDAs ~~have~~or ~~invested~~MAAs will be filed within a ~~significant~~specified ~~portion~~period of ~~our~~time, ~~efforts~~or ~~and~~that ~~financial~~any ~~resources~~BLA inor ~~the~~NDA ~~acquisition~~or ~~and~~similar ~~development~~foreign ofmarketing ~~our~~application ~~clinical~~will ~~drug~~allow ~~candidates~~us to obtain or maintain marketing approval. In addition, ~~which~~any marketing approval we ~~plan~~may toobtain ~~advance~~may ~~through~~be ~~clinical~~for ~~development.~~indications ~~Our~~and ~~future~~uses ~~success~~that ~~depends~~are ~~heavily~~more limited onthan ~~our~~we ~~ability~~expect toor ~~successfully~~include ~~manufacture,~~contraindications ~~develop,~~or ~~obtain~~risk ~~regulatory~~measures that limit market acceptance of the product subject to the marketing approval. ~~for,~~We ~~and~~also ~~commercialize~~cannot ~~these~~be ~~products~~certain ~~and~~that our product or product candidates will be successful in clinical trials or that the clinical trials or data will support filing any further BLAs or NDAs in the U.S., ~~which~~or ~~may~~similar ~~never~~foreign ~~occur~~marketing applications elsewhere. We ~~currently~~also ~~generate~~cannot nobe ~~income~~certain ~~from~~that ~~our~~any ~~clinical~~of our product candidates, ~~and~~will wereceive ~~may~~the ~~never~~appropriate beregulatory ~~able~~approval required to ~~develop~~commence clinical trials. Further, the FDA, an independent review committee, or ~~commercialize~~IRC, aor ~~marketable~~an ~~drug~~oncologic ~~from~~drugs ~~those~~advisory committee, or ODAC, may not agree with the interpretation by our investigators or us of the clinical safety and efficacy of our product candidates, and our product candidates may not receive regulatory approval.

Before we generate any income from sales of our products or product candidates in the United States or elsewhere, we must complete preclinical and clinical development, conduct human subject research, submit clinical and manufacturing data to the U.S. Food and Drug Administration, or FDA (or foreign equivalent), qualify a third-party contract manufacturing organization, or CMO, satisfy the FDA that our CMO is capable of manufacturing the product in compliance with the FDA’s current good manufacturing practices, or CGMPs, submit a marketing application (e.g., Biologics License Application, or BLA (or foreign equivalent), or New Drug Application, or NDA (or foreign equivalent)), receive regulatory approval from the FDA or a foreign regulatory agency, build a commercial organization, make substantial investments, and undertake significant marketing efforts ourselves or in partnership with others to ensure compliant marketing and market acceptance of any products we commercialize. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA or comparable foreign regulatory authorities, and we may never receive such regulatory approval for some of our product candidates.32

We ~~cannot~~do benot ~~certain~~have ~~that~~the ~~any~~resources ~~further~~to ~~BLAs,~~conduct ~~NDAs~~and ordirectly ~~MAAs~~oversee our ~~will~~product bedevelopment ~~filed~~programs ~~within~~without aassistance ~~specified~~from ~~period~~third ofparties. ~~time,~~In orthe ~~that~~execution ~~any~~of ~~BLA~~our orproduct ~~NDA~~development orprograms, ~~similar~~we may ~~foreign~~have ~~marketing~~to ~~application~~rely ~~will~~on ~~allow~~collaborations uswith toclinical ~~obtain~~partners oras ~~maintain~~well ~~marketing~~as ~~approval.~~clinical Inresearch ~~addition~~organizations, ~~any~~or ~~marketing~~CROs, ~~approval~~CMOs, wevendors ~~may~~and other ~~obtain~~service ~~may~~providers. beFailure ~~for~~by ~~uses~~these ~~more~~entities ~~limited~~to ~~than~~satisfactorily weconduct ~~expect~~clinical research or ~~include~~to ~~contraindications~~provide orthe ~~risk~~services ~~measures~~requested by ~~that~~us ~~limit~~may ~~market~~negatively ~~acceptance~~impact ofour ~~the~~ product ~~subject~~development toprograms, ~~the~~including, ~~marketing~~but ~~approval.~~not Welimited ~~also~~to, ~~cannot~~program bedelays ~~certain~~or ~~that~~preventing approval of our ~~products or~~ product candidates. ~~will~~We beplan ~~successful~~to inseek ~~clinical~~regulatory ~~trials~~approval orto ~~that~~commercialize ~~the~~our ~~clinical~~product ~~trials~~candidates orin ~~data~~the ~~will~~United ~~support~~States, ~~filing~~the European ~~any~~Union ~~further~~and ~~BLAs~~additional orforeign ~~NDAs~~jurisdictions. inWhile the ~~U.S.,~~scope orof ~~similar~~regulatory ~~foreign~~review ~~marketing~~and ~~applications~~approval ~~elsewhere.~~can Webe ~~also~~similar ~~cannot~~in beother countries, ~~certain~~to ~~that~~obtain ~~any~~separate ofregulatory ~~our~~review ~~product~~and ~~candidates~~approval ~~will~~in ~~receive~~many ~~regulatory~~other ~~approval~~countries, ~~for~~we ~~trial~~must ~~initiation.~~comply ~~Further,~~with the ~~FDA,~~numerous anand ~~independent~~varying regulatory ~~review~~requirements ~~committee,~~of orsuch ~~IRC~~countries, orincluding anthose ~~oncologic~~regarding ~~drugs~~safety ~~advisory~~and ~~committee~~efficacy, orclinical ~~ODAC~~trials, ~~may~~manufacturing, ~~not~~post-marketing commitments, ~~agree~~and ~~with~~commercial ~~the~~sales, ~~interpretation~~pricing ~~by our investigators or us of the clinical safety~~ and ~~efficacy~~distribution of our product candidates, and ~~our~~we ~~product~~cannot ~~candidates~~predict ~~may~~or ~~not~~guarantee ~~receive~~success in ~~regulatory~~these ~~approval~~jurisdictions.

If wethe doincidence ~~not~~and/or ~~receive~~prevalence ~~regulatory~~of ~~approvals~~diseases, or disease areas, we are targeting for ~~our~~development ~~product~~and/or ~~candidates~~commercialization, weand ~~may~~future ~~not~~growth, beare ~~able~~low, toincluding ~~continue~~lower than our ~~operations.~~estimates ~~Even~~or ifestimates of wethird-parties, ~~successfully~~this ~~obtain~~could ~~regulatory~~significantly ~~approvals~~delay topatient ~~market~~enrollment in our ~~product~~additional ~~candidates~~ongoing or future clinical trials and/or could negatively impact commercial revenue. The true incidence and/or prevalence, ~~our~~as ~~income~~well ~~will~~as market potential, can be ~~dependent~~difficult to determine, inahead ~~part~~of commercial launch, ~~upon~~for ~~the~~certain ~~prescribing~~rare ~~information~~diseases, ~~adoption~~such ~~within~~as ~~clinical~~blastic ~~practice~~plasmacytoid ~~guidelines~~dendritic cell neoplasm, ~~and~~or ~~the~~BPDCN, where ~~size~~there ofhad ~~the~~been ~~markets~~limited inepidemiologic ~~the~~and ~~territories~~published ~~for~~data, ~~which~~and databases, and where we ~~gain~~are ~~regulatory~~the ~~approval~~first ~~and~~company ~~have~~to ~~commercial~~receive ~~rights.~~approval for Inthis ~~addition~~indication, ~~our~~with ~~income~~no ~~will~~prior beproduct ~~dependent,~~revenue indata. ~~part~~Additionally, ~~upon~~due to the ~~market~~unfamiliarity ~~acceptance~~and/or rarity of ~~our~~certain ~~products~~diseases, such ~~once~~as ~~approved~~BPDCN, ashealth ~~well~~care asproviders ~~upon~~may ~~reimbursement~~not be aware of, and/or ~~coverage~~may misdiagnose or underdiagnose such diseases, ~~among~~leading ~~other~~to ~~things~~low trial enrollment and/or product revenue. IfOur disease awareness campaign, intended to raise awareness of the ~~markets~~disease ~~for~~and increase patient ~~subsets~~identification, ~~that~~could wefail ~~plan~~ to ~~target~~do ~~are~~so ~~not~~for asmany ~~significant~~reasons. asAt wethis ~~estimate~~time, we ~~may~~have ~~not~~no ~~generate~~way ~~significant~~of ~~income~~assuring ~~from~~the ~~sales~~accuracy of ~~such~~any ~~products~~incidence/prevalence or revenue numbers, or the chances for successful development in related areas, thus if ~~approved~~these are low, despite expectations to the contrary, this will negatively impact our revenue and future prospects for the company.

WeClinical dodrug ~~not~~development ~~have~~involves ~~the~~a ~~resources~~lengthy ~~to conduct~~ and ~~directly~~expensive process ~~oversee our product development programs without assistance from third parties. In the execution of our product development programs, we may have to rely on collaborations~~ with ~~clinical~~an ~~partners~~uncertain ~~as well as clinical research organizations, or CROs, CMOs, vendors and other service providers~~outcome. Failure of these entities to satisfactorily conduct clinical research or to provide the services requested by us may negatively impact our product development programs, including but not limited to program delays or preventing approval of our product candidates. We plan to seek regulatory approval to commercialize our product candidates in the United States, and potentially in the European Union and additional foreign countries. While the scope of regulatory review and approval can be similar in other countries, to obtain separate regulatory review and approval in many other

27Clinical testing is expensive and can take a substantial amount of time to complete. Its outcome is inherently uncertain. In addition, failure can occur at any time during clinical development, including after significant resources have been invested. We cannot predict whether we will encounter challenges with any of our clinical trials that will cause us, or regulatory authorities, to delay, suspend or terminate current or future trials.

~~Table~~Clinical oftrials ~~Contents~~can be delayed, suspended or terminated for many reasons, including but not limited to:

~~countries,~~· wedelays ~~must~~or ~~comply~~failures ~~with~~in ~~the~~reaching ~~numerous~~an ~~and~~agreement ~~varying~~on ~~regulatory~~acceptable ~~requirements~~terms ofwith ~~such~~prospective ~~countries~~CMOs, ~~including~~CROs, ~~those regarding safety~~ and ~~efficacy,~~ clinical ~~trials,~~trial ~~manufacturing~~sites, ~~post-marketing~~the ~~commitments,~~terms ~~and~~of ~~commercial~~which ~~sales,~~can ~~pricing~~be ~~and~~subject ~~distribution~~to ofextensive ~~our~~negotiation ~~product candidates,~~ and wemay ~~cannot~~vary ~~predict~~significantly ~~success~~depending inupon ~~these~~the ~~jurisdictions.~~circumstances;

If· ~~the~~failure ~~incidence and/or prevalence~~ of ~~diseases, or disease areas, we are targeting for development and/or commercialization, and further growth, are low, including lower than~~ our ~~estimates or estimates of~~ third-~~parties,~~party this could significantly delay patient enrollment in our ongoing or future clinical trials and/or could negatively impact commercial revenue. The true incidence and/or prevalence as well as market potential can be difficult to determinecontractors, ~~ahead~~including ofCROs ~~commercial launch, for certain rare diseases, such as BPDCN, for which there had been limited epidemiologic~~ and ~~published data~~CMOs, ~~and databases, and no previous drug approvals and no prior product revenue data. Additionally, due to the unfamiliarity and/~~or ~~rarity~~our ~~of certain diseases~~investigators, ~~such as BPDCN, health care providers may not be aware and/or may misdiagnose or underdiagnose such diseases leading~~ to ~~low~~comply ~~trial~~with ~~enrollment~~regulatory ~~and/or~~requirements product revenue. Our disease awareness campaign, intended to raise awareness of the disease and increase patient identification, could fail to do so for many reasons. At this time, we have no way of assuring the accuracy of any incidence/prevalence or ~~revenue~~otherwise ~~numbers,~~meet orcontractual ~~the~~obligations ~~chances~~in ~~for~~a ~~revenue~~timely ~~growth into related areas, thus if these are low, despite expectations to the contrary, this will negatively impact our revenue and future prospects for the company.~~manner;

~~Clinical drug development involves a lengthy and expensive process with an uncertain outcome.~~33

~~Clinical~~· ~~testing~~delays isor ~~expensive~~failure ~~and~~in ~~can~~obtaining ~~take~~the anecessary ~~substantial~~approvals ~~amount~~from ofregulators, ~~time~~institutional toreview ~~complete. Its outcome is inherently uncertain. In addition~~boards, ~~failure~~or ~~can occur at any time during clinical development~~IRBs, ~~including~~or ~~after~~scientific ~~significant~~review ~~resources have been invested. We cannot predict whether we will encounter challenges with any of our clinical trials that will cause us~~committees, or ~~regulatory authorities~~SRCs, toin ~~delay,~~order ~~suspend~~to commence or ~~terminate~~continue ~~current~~a orclinical ~~future trials.~~trial;

~~Clinical~~· ~~trials~~our ~~can~~inability beto ~~delayed~~manufacture, or ~~halted~~obtain ~~for~~from ~~many~~third-parties, ~~reasons~~adequate supply of drug substance, ~~including~~drug ~~but~~product ~~not~~or ~~limited~~adjuvant therapies sufficient to: complete our preclinical studies and clinical trials;

· ~~delays~~ orrisk ~~failures~~of inloss ~~reaching~~of andrug ~~agreement on acceptable terms with prospective CMOs~~product, ~~CROs,~~adjuvants and/or ~~clinical~~other ~~trial~~components ~~sites,~~of the ~~terms~~product, ofdue ~~which can be subject~~ to ~~extensive~~third-party ~~negotiation~~storage and ~~may~~distribution ~~vary~~of ~~significantly~~such ~~depending on the circumstances~~supplies;

· ~~failure~~ ofthe ~~our~~FDA, ~~third-party~~or ~~contractors~~other regulatory authority, ~~including~~issuing ~~CROs~~a ~~and~~clinical ~~CMOs,~~hold or ~~our~~requiring ~~investigators,~~alterations to ~~comply~~any ~~with~~of ~~regulatory~~our ~~requirements~~study designs, including extending a study or ~~otherwise~~requiring ~~meet~~new ~~contractual~~studies, ~~obligations~~to inour aoverall ~~timely~~strategy ~~manner~~or to our manufacturing plans;

· delays orin ~~failure~~patient inenrollment, ~~obtaining~~variability in the ~~necessary~~number ~~approvals~~and ~~from~~types ~~regulators,~~of ~~institutional~~patients ~~review~~available ~~boards,~~for orclinical ~~IRBs~~trials, orpoor ~~scientific review committees~~accrual, or ~~SRCs,~~high indrop-out ~~order~~rates toof ~~commence~~patients orin ~~continue~~our a clinical ~~trial~~trials;

· ~~our~~ ~~inability~~clinical totrial ~~manufacture,~~sites ordeviating ~~obtain~~ from ~~third-parties,~~trial ~~adequate~~protocols ~~supply~~or ofdropping ~~drug~~out ~~substance,~~of ~~drug~~a ~~product~~trial orand ~~adjuvant~~our ~~therapies~~inability ~~sufficient~~ to ~~complete~~add ~~our~~new ~~preclinical studies and~~ clinical ~~trials~~trial sites;

· ~~risk~~ ofdifficulty ~~loss~~in ofmaintaining ~~drug~~contact ~~product,~~with ~~adjuvants~~patients ~~and/or~~after ~~other components of the product~~treatment, ~~due~~resulting toin ~~third-party~~incomplete ~~storage and distribution of such supplies~~data;

· ~~the~~ ~~FDA,~~poor oreffectiveness ~~other regulatory authority, issuing a clinical hold or requiring alterations to any~~ of our ~~study~~product ~~designs,~~candidates ~~including~~during ~~extending~~clinical ~~a study or requiring new studies, to our overall strategy or to our manufacturing plans~~trials;

· ~~delays~~ insafety ~~patient enrollment~~issues, ~~variability~~including inserious ~~the~~adverse ~~number~~events ~~and~~associated ~~types~~with ofour ~~patients~~product ~~available~~candidates ~~for~~and ~~clinical~~patient ~~trials,~~exposure ~~poor~~to ~~accrual,~~unacceptable orhealth ~~high drop-out rates of patients in our clinical trials~~risks;

· ~~clinical~~ ~~trial~~reports ~~sites~~of ~~deviating~~adverse ~~from~~events ~~trial protocols~~ or ~~dropping~~other ~~out~~safety ofconcerns ainvolving ~~trial~~ELZONRIS and our ~~inability to add new~~ clinical ~~trial~~drug ~~sites~~candidates;

· ~~difficulty~~ inreceipt ~~maintaining~~by ~~contact~~a ~~with~~competitor ~~patients~~of ~~after~~marketing ~~treatment,~~approval ~~resulting~~for ina ~~incomplete~~product ~~data~~targeting an indication that one of our product candidates targets;

· ~~poor~~ ~~effectiveness~~governmental ofor ~~our~~regulatory ~~product~~delays ~~candidates~~and ~~during~~changes ~~clinical~~in ~~trials~~regulatory leadership, requirements, policy and guidelines; or

· ~~safety~~ ~~issues~~the FDA, ~~including~~or ~~serious~~similar ~~adverse~~regulatory ~~events~~body, ~~associated~~may not agree with the endpoints we select or the interpretation of the results related to the endpoints in the evaluation of our product candidates, ~~and~~thereby ~~patient~~refusing ~~exposure~~ to ~~unacceptable~~approve ~~health~~our ~~risks;~~product candidates for marketing approval, or withdrawing approval.

~~· receipt~~We could also encounter delays if a clinical trial is suspended or terminated by us, by the IRB where such trial is being conducted, by a ~~competitor~~Data ofSafety ~~marketing~~Monitoring ~~approval~~Board, or DSMB, if one is utilized for any such trial, or by the FDA or other regulatory authorities. Such authorities may suspend or terminate a ~~product~~clinical ~~targeting~~trial due to a number of factors, including, among other things, failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, regulatory violations identified during an ~~indication~~inspection ~~that~~of ~~one~~the clinical trial operations or trial site, imposition of ~~our~~a ~~product~~clinical ~~candidates~~hold ~~targets~~by the FDA or other regulatory authorities, ~~such~~study ~~that~~subject wesafety ~~are~~concerns, ~~not~~adverse ~~“first~~events or severe adverse events, including deaths, failure to ~~market”~~demonstrate ~~with~~a ~~our~~benefit ~~product~~from ~~candidate;~~using a drug, changes in governmental regulations or administrative actions, or lack of adequate funding to continue the clinical trial.

28There are unknown risks for our clinical product candidates, including with respect to dosing, administration, pharmacokinetics, bioavailability, safety and efficacy, that we expect we will learn about during clinical development, which could halt or delay this development program and/or alter our current strategy for the development of these product candidates.

~~Table of Contents~~34

~~· governmental~~We may not have the necessary expertise or ~~regulatory~~capabilities, ~~delays~~including adequate staffing, to successfully manage the execution and ~~changes~~completion inof ~~regulatory~~any ~~leadership,~~of ~~requirements~~our clinical trials, ~~policy~~prepare clinical study reports and ~~guidelines;~~MAAs, and ultimately obtain marketing approval for our product candidates in a timely manner, or at all.

~~· differing~~In ~~interpretations~~any clinical trial of a product candidate, the results of such trial may not be adequate to support submission of a marketing application or marketing approval. Because our product candidates are intended for use in life-threatening diseases, in many cases we ultimately intend to seek marketing approval for each product candidate based on the results of a single clinical trial, which may be open-label and single-group in nature. As a result, these trials may receive enhanced scrutiny from the FDA. For any such trial, if the FDA disagrees with our choice or definition of primary endpoint, or the results for the primary endpoint are not robust or significant or clinically beneficial enough, including relative to a control or historical data, the FDA may refuse to approve a BLA or NDA based on such intended pivotal trial, despite meeting a primary endpoint of the study. In addition, the results of any such intended pivotal trial may be subject to confounding factors, or may not be adequately supported by other study endpoints, possibly including overall survival, or OS, overall response rate, or ORR, rate of complete response, or CR, rate of clinical complete response, or cCR, rate of partial response, or PR, rate and definition of bone marrow complete response with partial or incomplete hematologic recovery, rate and definition of other responses including spleen response, including measurement modality and timing of events, rate and definition of total symptom score response, and/or response duration including definition of response duration, in which case the FDA may refuse to approve a BLA or ~~similar~~NDA ~~foreign~~based on ~~regulatory~~such ~~authorities;~~intended pivotal trial, despite meeting a primary endpoint of the study. The FDA may not accept the design of or our future Stage 3a results of ELZONRIS in CMML, or our conclusions related to our design of or future Stage 3a results, as a basis to design and implement the pivotal Stage 3b portion of the program. The FDA may also require the completion of additional clinical trials before or as a condition for approving our product candidates.

· If we experience delays in the ~~FDA~~completion of, or ~~similar~~a ~~regulatory body~~termination of, ~~may~~any ~~not~~clinical ~~agree~~trial ~~with~~of our product candidates, the ~~endpoints~~commercial weprospects ~~select~~of orour ~~the~~product ~~interpretation~~candidates ofwill ~~the~~be ~~results~~harmed, ~~related~~which will have a negative impact on our ability to ~~the~~commence ~~endpoints~~product insales ~~the~~and ~~evaluation~~generate product income from any of our product candidates. In addition, ~~thereby~~any ~~refusing~~delays toin ~~approve~~completing our clinical trials will increase our costs and slow down our product ~~candidates~~candidate ~~for~~development and approval process, and may negatively impact our ability to raise additional capital to support these increased costs. Delays in completing our clinical trials could also allow our competitors to obtain marketing approval before we do, or ~~withdrawing~~could shorten the patent protection period during which we may have the exclusive right to commercialize our product candidates. Any of these occurrences may harm our business, financial condition and prospects significantly. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials, may also ultimately lead to the denial of regulatory approval of our product candidates.

WeResults ~~could~~of ~~also~~earlier ~~encounter delays if a~~ clinical ~~trial~~trials is suspended or terminated by us, by the IRB where such trial is being conducted, by a Data Safety Monitoring Board, or DSMB, if one is utilized for any such trial, or by the FDA or other regulatory authorities. Such authorities may ~~suspend~~not orbe predictive ~~terminate a clinical trial due to a number~~ of ~~factors, including, among other things, failure to conduct~~ the ~~clinical~~results ~~trial in accordance with regulatory requirements or our clinical protocols, regulatory violations identified during an inspection~~ of ~~the~~later-stage ~~clinical trial operations~~ or ~~trial~~subsequent ~~site, imposition of a~~ clinical ~~hold~~trials byand ~~the~~results ~~FDA or other regulatory authorities, study subject safety concerns, adverse events or severe adverse events, including deaths, failure to demonstrate a benefit from using a drug, changes~~ in ~~governmental~~the ~~regulations~~commercial orsetting ~~administrative~~may ~~actions,~~be ordifferent than ~~lack of adequate funding to continue the~~ clinical trial. ~~For example, we have observed serious adverse events, including deaths, from or relating to capillary leak syndrome, or CLS, with ELZONRIS~~experience. The occurrence of these and other adverse events could jeopardize or preclude our ability to develop ELZONRIS in additional indications including CMML, obtain or maintain marketing approval for, or successfully commercialize, market, and sell any or all of our product candidates for one or more indications.

WeThe ~~have~~results ~~also~~of ~~advanced~~preclinical ~~SL-801~~studies and clinical trials, including ~~SL-701~~early stage, late stage, and SLinvestigator-~~901~~sponsored ~~into~~or corporate-sponsored clinical trials. ~~There~~of ~~are~~any ~~unknown~~investigational or ~~risks~~approved ~~for~~products, ~~these~~may ~~product~~not ~~candidates,~~be ~~including~~predictive ~~with~~of ~~respect~~the toresults ~~dosing~~of subsequent and/or later stage clinical trials such as Stage 3a or Stage 3b versus Stage 1 and 2 of the ELZONRIS Phase 1/2 trial in CMML or Stage 4 versus Stages 1, ~~administration~~2, ~~pharmacokinetics~~and 3 of the ELZONRIS Phase 1/2 trial in BPDCN. Investigational or approved products in later stage, ~~bioavailability~~including subsequent stages of a given trial, or larger clinical trials may fail to show the same safety and efficacy results demonstrated in earlier studies, ~~that~~including having wediffering ~~expect~~patients wepopulations ~~will~~and/or ~~learn~~endpoints ~~about~~and ~~during~~methods and schedules to assess such endpoints, despite having progressed through preclinical studies and earlier clinical ~~development~~trials. ~~which~~Many ~~could~~companies ~~halt~~in orthe ~~delay~~biopharmaceutical ~~this~~industry have suffered significant setbacks in later stage clinical trials, including canceling clinical development ~~program~~programs, ~~and/~~due to adverse safety profiles or ~~alter~~lack ~~our~~of ~~current~~efficacy ~~strategy~~observed ~~for~~in the ~~development~~commercial setting, notwithstanding promising results in earlier studies. Similarly, our clinical trials results, including with inclusion of ~~this~~subsequent ~~product~~stages ~~candidate~~of any given trial or experience with products in the commercial setting, may not be successful, including from a regulatory standpoint, for these or other reasons.

We may not have the necessary expertise or capabilities, including adequate staffing, to successfully manage the execution and completion of any of our clinical trials, prepare clinical study reports and marketing authorization applications, and ultimately obtain marketing approval for our product candidates in a timely manner, or at all.35

InThis ~~any~~drug ~~clinical~~development ~~trial~~risk ofis aheightened ~~product~~by ~~candidate,~~any ~~the~~change ~~results~~in ofongoing and ~~such~~future ~~trial~~clinical ~~may~~trials ~~not~~compared ~~be adequate~~ to ~~support~~completed ~~submission~~clinical ~~of a marketing application or marketing approval~~trials. ~~Because~~As ~~our~~ product candidates are ~~intended~~advanced ~~for~~through ~~use~~preclinical ~~in life-threatening diseases, in many cases we ultimately intend~~ studies to ~~seek~~early ~~marketing~~and ~~approval~~late ~~for~~stage ~~each product candidate based on the results of a single~~ clinical ~~trial,~~trials ~~which~~and ~~may~~towards beapproval ~~open-label~~ and ~~single-group in nature. As a result~~commercialization, ~~these~~it ~~trials~~is ~~may~~customary ~~receive~~that ~~enhanced~~various ~~scrutiny~~aspects ~~from~~of the development ~~FDA.~~program, ~~For any~~ such ~~trial,~~as ifmanufacturing ~~the~~and ~~FDA~~methods ~~disagrees with our choice or definition~~ of ~~primary~~administration ~~endpoint~~and dosing, orare ~~the~~altered ~~results~~along ~~for~~ the ~~primary~~way ~~endpoint~~in ~~are~~an ~~not~~effort ~~robust or significant or clinically beneficial enough, including relative~~ to optimize aprocesses ~~control~~and orresults. ~~historical~~While ~~data,~~these ~~the~~types ~~FDA may refuse to approve a BLA or NDA based on such intended pivotal trial, despite meeting a primary endpoint~~ of ~~the~~changes ~~study.~~are Incommon ~~addition,~~and ~~the~~are ~~results of any such~~ intended ~~pivotal trial may be subject~~ to ~~confounding~~optimize ~~factors,~~the orproduct ~~may~~candidates ~~not~~for later bestage ~~adequately supported by other study endpoints, possibly including overall survival, or OS, overall response rate, or ORR, rate of complete response, or CR, rate of~~ clinical ~~complete response~~trials, orapproval ~~CRc,~~ and~~/or~~ ~~response duration~~commercialization, insuch ~~which~~changes ~~case~~do carry the ~~FDA~~risk ~~may~~that ~~refuse~~they towill ~~approve~~not aachieve ~~BLA~~these ~~or NDA based on such~~ intended objectives. ~~pivotal~~For ~~trial~~example, ~~despite~~the ~~meeting~~results ~~a primary endpoint~~ of ~~the~~our ~~study.~~ongoing ~~The~~and ~~FDA~~future ~~may also require the completion of additional~~ clinical trials ~~before~~may orbe asadversely aaffected ~~condition~~by ~~for~~the ~~approving~~following ~~our product candidates.~~changes:

If· As we ~~experience~~optimize ~~delays~~and inscale-up ~~the~~production ~~completion~~ of, orour aclinical ~~termination~~product ofcandidates, ~~any~~there ~~clinical~~may ~~trial~~be ofmanufacturing, ~~our product candidates~~formulation, ~~the~~fill-finish ~~commercial~~and ~~prospects~~other ofprocess ~~our~~and ~~product~~analytical ~~candidates~~changes ~~will~~that beare ~~harmed,~~part ~~which~~of ~~will~~the ~~have~~optimization aand ~~negative~~scale-up ~~impact~~necessary onfor ~~our~~producing ~~ability~~drug tosubstance ~~commence~~and drug product ~~sales~~of a quality, quantity and ~~generate~~stability ~~product~~sufficient ~~income~~for ~~from~~later ~~any~~stage ofclinical ~~our~~development ~~product~~and ~~candidates~~commercialization. InDelays, ~~addition~~including failures, in any ~~delays~~of inthese ~~completing~~steps, ~~our~~may delay initiation and completion of clinical trials, ~~will~~regulatory ~~increase~~submissions, ~~our~~or ~~costs~~commercial ~~and~~launch. ~~slow~~We ~~down~~may ~~our~~also ~~product~~need ~~candidate~~to ~~development~~demonstrate ~~and~~comparability ~~approval~~between ~~process~~newly ~~and~~manufactured ~~may~~drug ~~negatively~~substances ~~impact~~and/or ~~our~~drug ~~ability~~products relative to ~~raise~~previously ~~additional~~manufactured ~~capital~~drug tosubstances ~~support~~and/or ~~these~~drug ~~increased~~products. Demonstrating comparability may cause us to incur additional costs. ~~Delays~~or indelay ~~completing~~initiation or completion of our clinical trials, ~~could~~including ~~also~~the ~~allow~~need ~~our~~or ~~competitors~~choice to ~~obtain~~initiate ~~marketing~~a ~~approval~~dose ~~before~~escalation westudy, doand, orif unsuccessful, could ~~shorten~~require ~~the~~us ~~patent~~to ~~protection~~complete ~~period~~additional ~~during~~preclinical ~~which~~or weclinical ~~may~~studies ~~have~~of ~~the~~our ~~exclusive~~product ~~right~~candidates. Failure to ~~commercialize~~demonstrate ~~our~~comparability ~~product~~could ~~candidates.~~also ~~Any~~result ofin ~~these~~delays ~~occurrences~~in ~~may~~regulatory ~~harm~~submissions ~~our~~or ~~business,~~commercial ~~financial~~launch. ~~condition~~We ~~and~~are ~~prospects~~also ~~significantly.~~developing Ina ~~addition,~~new ~~many~~lyophilized formulation of ELZONRIS. In the ~~factors~~event that ~~cause,~~this orformulation ~~lead~~does ~~to,~~not ademonstrate ~~delay~~comparability inwith the ~~commencement~~current orliquid/frozen ~~completion~~formulation, ofincluding ~~clinical~~from ~~trials~~a ~~may~~pharmacokinetic, ~~also~~safety ~~ultimately~~and/or ~~lead~~efficacy toperspective, the ~~denial~~commercial success of ~~regulatory~~ELZONRIS ~~approval~~could ofbe ~~our~~negatively ~~product candidates~~impacted.

~~Reports~~· ofWe ~~adverse~~are, ~~events~~or may in the future be, treating patients with certain diseases or ~~other~~conditions ~~safety~~that ~~concerns~~have ~~involving~~not ~~ELZONRIS~~been ~~and~~previously treated with our ~~clinical~~product ~~drug~~candidates. In these instances, we may choose to treat patients at several different doses and use multi-cycle dosing regimens to determine the optimal doses and schedules for both near-term and long-term safety and disease control in each indication. Use of our product candidates ~~could~~in ~~delay~~new ~~clinical~~disease ~~development,~~populations ~~delay~~and orat ~~prevent~~new usdosing ~~from~~regimens ~~obtaining~~could orproduce ~~maintaining~~unforeseen ~~regulatory~~adverse ~~approvals,~~reactions orand ~~negatively~~events that could impact ~~sales~~the development and ability to obtain or ~~the~~maintain ~~commercial~~marketing ~~prospects~~approval for our product candidates.

~~Reports~~· ofWe ~~adverse~~may ~~events~~determine, orbased ~~other~~on safety ~~concerns involving ELZONRIS~~ and ~~our clinical drug candidates could interrupt~~efficacy, ~~delay~~that orcertain ~~halt~~doses ~~our clinical trials. For example, CLS is a known, sometimes fatal,~~ and ~~well-documented~~regimens ~~side effect~~ of ~~ELZONRIS. Reports of additional CLS cases, or other adverse events or other safety concerns involving ELZONRIS or~~ our ~~other~~ product candidates, ~~could~~for ~~result~~particular inindications ~~clinical~~are ~~trial~~optimal ~~delays~~for ~~including~~initial ~~regulatory~~near-term ~~authorities~~therapy ~~placing~~whereas ~~trials~~the onsame, ~~clinical hold~~ or ~~denying or withdrawing approval for trials of any or all indications. Further~~other, ~~patients~~doses ~~receiving~~and ~~ELZONRIS~~regimens orare ~~our~~optimal ~~other~~for ~~product candidates with co~~longer-~~morbid~~term ~~diseases~~maintenance ~~and/or~~therapy.

29· We are developing SL-701 as an injection administered under the skin, or subcutaneously, in our trials. Two previous investigator-sponsored trials of an earlier version of SL-701 used this method of delivery. Another previous investigator-sponsored trial of an earlier version of SL-701 used a different method of delivery, in which dendritic cells, which are a type of immune cell, were removed from the patient, exposed to immunogenic peptides, and then re-injected into or near a lymph node of the patient (intra/peri-nodally). Our plan continues with the subcutaneous injection method used in two of the previous studies and represents a change from one of the other previous studies.

~~Table~~· We manufactured and formulated SL-701 as a mixture of ~~Contents~~IL-13R2 mutant peptide, EphA2 peptide, a new survivin mutant peptide, and a tetanus toxoid peptide. An earlier version of this immunotherapy, which included IL-13R2 mutant and EphA2 peptides, was mixed with additional peptides in previous studies, including a different survivin peptide in some studies.

indications not previously well-studied may experience new or different serious adverse events in the future. Likewise, reports of adverse events or other safety concerns involving ELZONRIS or our other product candidates could interrupt, delay or halt ongoing or planned clinical trials of such product candidates, could require redesign of study protocols and conduct of additional trials, could result in our inability to file for or obtain regulatory approvals for any of our product candidates, or negatively impact commercial prospects for our product candidates.36

~~Results~~· In the initial stage of our SL-701 corporate-sponsored trial, we used granulocyte-macrophage-colony-stimulating factor, or GM-CSF, and imiquimod as the immunostimulants. In the second stage of our SL-701 trial, we used poly-ICLC as the immunostimulant, which was the immunostimulant used, along with an earlier ~~clinical~~version ~~trials~~of ~~may~~SL-701, in the previous investigator-sponsored study but is not becurrently ~~predictive~~commercially ofavailable. If the ~~results~~poly-ICLC regimen is found to be superior, it would require successful approval and commercialization of ~~later~~poly-~~stage~~ICLC ~~clinical~~in ~~trials~~addition to SL-701 to support product launch, which would entail a more complicated regulatory and commercialization strategy than required for a single product launch.

~~The~~· ~~results~~In ~~of preclinical studies and~~ clinical trials, ~~including~~we ~~early~~have stage, late stage, and investigator-sponsored clinical trials of product candidates may not be predictive of the results of subsequent later stage clinical trials, including corporate sponsored trials. Product candidates in later stage or ~~larger~~are ~~clinical~~currently ~~trials~~combining ~~may~~ELZONRIS ~~fail~~with topomalidomide ~~show the safety~~ and ~~efficacy~~dexamethasone ~~results demonstrated~~ in ~~earlier~~myeloma, ~~studies~~ELZONRIS ~~despite~~with ~~having~~a ~~progressed~~hypomethylating ~~through~~agent ~~preclinical studies~~ and ~~earlier~~potentially ~~clinical~~a ~~trials.~~Bcl-2 ~~Many~~inhibitor ~~companies~~and inpotentially ~~the~~certain ~~biopharmaceutical~~chemotherapeutic ~~industry~~agents ~~have suffered significant setbacks~~ in ~~later~~various ~~stage~~indications ~~clinical trials,~~ including ~~canceling~~AML ~~clinical~~and ~~development programs, due to adverse safety profiles or lack of efficacy, notwithstanding promising results in earlier studies~~BPDCN. ~~Similarly, our clinical trials may not be successful for these or other reasons.~~

~~This~~· ~~drug~~In ~~development~~some ~~risk~~of isour ~~heightened~~current byor ~~any changes in ongoing and~~ future ~~clinical~~ trials, ~~compared~~we toare, ~~completed~~or ~~clinical~~may, ~~trials.~~combine Asour product candidates ~~are~~with ~~advanced~~each ~~through~~other ~~preclinical~~or ~~studies~~with toother ~~early~~therapies ~~and late stage clinical trials and towards approval and commercialization, it is customary that various aspects of the development program,~~ such as ~~manufacturing and methods of administration and dosing~~chemotherapy, ~~are altered along the way in an effort to optimize processes and results. While these types of changes are common and are intended to optimize the product candidates for later stage clinical trials~~radiation, ~~approval~~targeted ~~and commercialization~~therapy, ~~such~~or ~~changes~~anti-angiogenic dotherapy ~~carry~~which ~~the~~could ~~risk~~result ~~that~~in ~~they~~unforeseen ~~will not achieve these intended objectives~~toxicities. ~~For example, the results of our ongoing and future clinical trials may be adversely affected by the following changes:~~

~~· As~~Any ~~we optimize and scale-up production~~ of ~~our~~the ~~clinical~~aforementioned ~~drug candidates~~changes, ~~there~~or ~~may be manufacturing, formulation, fill-finish and~~ other ~~process and analytical~~ changes ~~that~~could ~~are part of~~ make the ~~optimization and scale-up necessary for producing drug substance and drug product of a quality~~timing, ~~quantity~~including ~~and stability sufficient for later stage clinical development and commercialization. Delays~~initiation, ~~including~~patient ~~failures~~accrual, inor ~~any~~results of ~~these~~our ~~steps may delay initiation and completion of~~ clinical trials, ~~regulatory~~less ~~submissions~~predictable, orand ~~commercial~~could ~~launch.~~cause Weour ~~may~~product candidates ~~also need~~ to ~~demonstrate~~perform ~~comparability~~differently, ~~between~~including ~~newly~~causing ~~manufactured~~toxicities, ~~drug~~which ~~substances~~could ~~and/or drug products relative to previously manufactured drug substances and/or drug products. Demonstrating comparability may cause us to incur additional costs or~~ delay ~~initiation~~ or suspend completion of our clinical trials, delay, ~~including the need~~ or ~~choice~~prevent toapproval ~~initiate~~of aour ~~dose~~product ~~escalation study~~candidates, and~~, if unsuccessful, could require us to complete additional preclinical~~ /or ~~clinical~~jeopardize ~~studies of~~ our ~~product~~ability ~~candidates. Failure~~ to ~~demonstrate~~obtain ~~comparability could also result in delays in~~ regulatory submissions or commercial launch. We are also developing a new lyophilized formulation of ELZONRIS. In the event it does not demonstrate adequacy or comparability with the current liquid/frozen formulationapproval, ~~ELZONRIS~~commence ~~could~~product sales beand ~~negatively~~generate ~~impacted~~income.

~~· We~~Adverse ~~have~~events ~~changed~~or ~~the~~other ~~treatment~~safety ~~regimen~~concerns ofinvolving ELZONRIS or toour aclinical ~~multi-cycle~~drug ~~regimen,~~candidates incould ~~which~~delay ~~patients~~clinical ~~will receive more than one treatment cycle~~development, ~~rather~~delay ~~than~~or aprevent ~~single-cycle~~us ~~treatment as used in the completed investigator-initiated clinical trial. Although we anticipate that patients receiving multiple cycles of ELZONRIS may derive greater clinical benefit than~~ from aobtaining ~~single~~or ~~cycle~~maintaining regulatory approvals, ~~there~~or isnegatively aimpact ~~risk~~sales ~~of toxicity~~ or athe ~~lack~~commercial ofprospects ~~efficacy~~for ~~arising~~our ~~from~~product ~~multiple cycles~~candidates.

~~· We~~Adverse ~~are,~~events or ~~may~~other safety concerns involving ELZONRIS or our clinical drug candidates in the ~~future~~development beor commercial setting could interrupt, ~~treating~~delay ~~patients~~or ~~with~~halt ~~certain~~our ~~diseases~~clinical trials and/or commercial ~~conditions~~sales ~~that~~of ~~have~~our ~~not~~products. ~~been~~For ~~previously~~example, ~~treated~~CLS ~~with~~is a known, sometimes fatal, and well-documented side effect of ELZONRIS. Reports of CLS cases, or other adverse events or other safety concerns involving ELZONRIS or our product candidates., Incould ~~these~~result ~~instances~~in clinical trial delays including regulatory authorities placing trials on clinical hold or denying or withdrawing approval for trials of any or all indications, weor ~~may~~adversely ~~choose~~affect our ability to ~~treat~~maintain ~~patients~~or atincrease ~~several~~commercial ~~different~~sales ~~doses~~of ~~and~~our ~~use~~product ~~multi-cycle~~or ~~dosing~~products. ~~regimens~~Further, patients toreceiving ~~determine~~ELZONRIS ~~the~~or ~~optimal~~our ~~doses~~product candidates with co-morbid diseases and/or ~~schedules~~indications ~~for~~not ~~both~~previously ~~near~~well-~~term~~studied, and/or in ~~long-term~~combination ~~safety~~with ~~and~~other ~~disease~~agents, ~~control~~may experience new or different serious adverse events in ~~each~~the ~~indication~~future. ~~Use~~ Likewise, reports of adverse events or other safety concerns involving ELZONRIS or our product candidates incould ~~new~~interrupt, ~~disease~~delay ~~populations~~or ~~and~~halt atongoing ~~new~~or ~~dosing~~planned clinical ~~regimens~~trials of such product candidates, could ~~produce~~require ~~unforeseen~~redesign ~~adverse~~of ~~reactions~~study protocols and ~~events~~conduct ~~that~~of ~~could~~additional ~~impact~~trials, ~~the~~could ~~development~~result in ~~and~~our ~~ability~~inability to file for or obtain regulatory approvals for any of our product candidates, or ~~maintain~~could ~~marketing~~negatively ~~approval~~impact commercial prospects for our product or product candidates.

~~· We~~If ~~may~~we ~~determine,~~experience ~~based~~delays onin ~~safety~~the ~~and~~enrollment ~~efficacy,~~of ~~that~~patients in ~~certain~~our ~~doses~~clinical ~~and~~trials, ~~regimens of~~ our ~~product~~receipt ~~candidates~~of ~~for~~necessary ~~particular~~regulatory ~~indications~~approvals ~~are~~could ~~optimal~~be ~~for~~delayed ~~initial near-term therapy whereas the same,~~ or ~~other, doses and regimens are optimal for longer-term maintenance therapy~~prevented.

· We ~~are~~may ~~developing~~not ~~SL-701~~be asable anto ~~injection~~continue ~~administered~~clinical ~~under~~trials ~~the~~for ~~skin,~~our orproduct candidates ~~subcutaneously,~~if inwe ~~our~~are ~~trials.~~unable ~~Two~~to ~~previous~~enroll ~~investigator-sponsored~~a ~~trials~~sufficient number of aneligible ~~earlier~~patients ~~version~~to ofparticipate ~~SL-701~~in ~~used~~these ~~this~~trials, ~~method~~including ofas ~~delivery.~~required by ~~Another~~the ~~previous~~FDA ~~investigator-sponsored~~or ~~trial~~other ofregulatory anauthorities. ~~earlier~~Patient ~~version~~enrollment, ofa ~~SL-701~~significant ~~used~~factor ain ~~different~~the ~~method~~timing of ~~delivery~~clinical trials, inis ~~which~~affected by ~~dendritic~~many ~~cells,~~factors ~~which~~including ~~are~~the asize ~~type~~and nature of ~~immune~~the ~~cell~~patient population, ~~were~~the ~~removed~~proximity ~~from~~of patients to clinical sites, the ~~patient~~eligibility criteria for the trial, ~~exposed~~the todesign ~~immunogenic~~of ~~peptides~~the clinical trial, competing clinical trials and ~~then~~clinicians’ ~~re-injected~~and ~~into~~patients’ orperceptions as ~~near~~to athe ~~lymph~~potential ~~node~~advantages of the ~~patient~~drug ~~(intra/peri-nodally).~~being ~~Our~~studied ~~plan~~in ~~continues~~relation ~~with~~to ~~the~~other ~~subcutaneous~~available ~~injection~~therapies, ~~method~~including ~~used~~any innew ~~two~~drugs ofthat may ~~the~~be ~~previous~~approved ~~studies~~or ~~and~~may ~~represents~~commence acompeting ~~change~~clinical ~~from~~trials ~~one~~for of the ~~other~~indications ~~previous~~we ~~studies~~are investigating.

3037

~~Table~~Some of ~~Contents~~our product candidates are being developed in rare indications with small available study populations. There are very limited independently reported data on annual incidences of these rare diseases. If the prevalence of these diseases is very low, including lower than our estimates or estimates of our third-party contractors, this could significantly delay patient enrollment in any one or more of our ongoing or future clinical trials.

~~· We~~Further, ~~manufactured~~if ~~and~~we ~~formulated~~fail ~~SL-701~~to asenroll aand ~~mixture~~maintain the number of ~~IL-13Ra2~~patients for ~~mutant~~which ~~peptide,~~the ~~EphA2~~clinical ~~peptide~~trial was designed, athe ~~new~~statistical ~~survivin~~power ~~mutant~~of ~~peptide~~that clinical trial may be reduced, ~~and~~which awould ~~tetanus~~make ~~toxoid~~it ~~peptide~~harder to demonstrate that the product candidate being tested in such clinical trial is safe and effective. AnAdditionally, ~~earlier~~enrollment ~~version~~delays in ofour ~~this~~clinical ~~immunotherapy~~trials may result in increased development costs for our product candidates, which ~~included~~would ~~IL-13Ra2~~cause ~~mutant~~the value of our common stock to decline and ~~EphA2~~limit ~~peptides,~~our ~~was~~ability ~~mixed~~to ~~with~~obtain additional ~~peptides~~financing. inOur ~~previous~~inability ~~studies,~~to ~~including~~enroll a ~~different~~sufficient ~~survivin~~number ~~peptide~~of patients for any of our current or future clinical trials would result in ~~some~~significant ~~studies~~delays to, or may require us to terminate or not initiate, one or more clinical trials.

~~· In~~The ~~the~~regulatory ~~initial~~review ~~stage of our SL-701 corporate-sponsored trial, we used granulocyte-macrophage-colony-stimulating factor, or GM-CSF,~~ and ~~imiquimod~~approval asprocesses ~~the immunostimulants. In the second stage~~ of ~~our SL-701 trial, we used poly-ICLC as~~ the ~~immunostimulant,~~FDA and ~~which~~comparable ~~was~~foreign ~~the~~authorities ~~immunostimulant~~are ~~used~~lengthy, ~~along with an earlier version of SL~~time-~~701,~~consuming inand ~~the~~inherently ~~previous investigator-sponsored study but is not currently commercially available. If the poly-ICLC regimen is found to be superior~~unpredictable, ~~it would require successful approval~~ and ~~commercialization~~if ofwe ~~poly-ICLC~~are inultimately ~~addition~~unable to obtain ~~SL-701~~regulatory toapproval ~~support~~for our product ~~launch~~candidates, ~~which~~our ~~would~~business ~~entail~~will abe ~~more~~substantially ~~complicated regulatory and commercialization strategy than required for a single product launch~~harmed.

~~· In~~The ~~some~~time required to obtain approval by the FDA and comparable foreign authorities can be unpredictable and depends upon numerous factors, including the substantial discretionary review afforded to the regulatory authorities, which could include the prerequisite of ~~our~~an ~~current~~advisory orpanel, ~~future~~e.g. ~~trials~~ODAC review. In addition, weregulations, policies ~~are~~or guidance documents, or ~~may~~the type and amount of preclinical, ~~combine~~CMC, ~~our~~clinical pharmacology, and clinical data necessary to gain approval may change during the course of a product ~~candidates~~candidate’s ~~with~~clinical ~~each~~development ~~other~~and may vary among jurisdictions. We may be required to undertake and complete certain additional preclinical, CMC, clinical pharmacology, bioanalytical, immunogenicity, or ~~with~~clinical ~~other~~studies ~~therapies~~to ~~such~~generate asadditional ~~chemotherapy~~data required to support the submission of an IND, ~~radiation~~a BLA, ~~targeted~~or ~~therapy~~an NDA to the FDA or equivalent applications to comparable foreign authorities. An inadequacy in any of these areas, or ~~anti-angiogenic~~a ~~therapy~~lack ~~which~~of personnel, financial resources or performance, including by third parties, could result in ~~unforeseen~~a ~~toxicities~~delayed or unsuccessful regulatory filing. WeThe FDA, or other non-U.S. regulatory authority, may provide feedback or make requests that are ~~currently~~difficult ~~combining~~to ~~ELZONRIS~~implement ~~with~~or ~~pomalidomide~~not inimplementable ~~myeloma~~at all, and/or our ~~have~~understanding ~~combined~~of SLregulatory feedback, including regulatory authority minutes, may be incorrect. Also, the FDA, or any other non-~~701~~U.S. ~~with~~regulatory ~~bevacizumab~~authority, ~~and~~may ~~immunostimulants~~require additional studies to support regulatory approval, including either full or accelerated or conditional, which could result in ~~brain~~a ~~cancer~~delay in our clinical programs and/or a delayed or unsuccessful regulatory filing, or no filing at all.

~~Any~~To date, we have only obtained FDA regulatory approval for one drug product, ELZONRIS, and it is possible that none of our other existing product candidates, additional indications for ELZONRIS (including, but not limited to, CMML), or any product candidates we may seek to develop in the ~~aforementioned~~future will ever obtain regulatory approval. Furthermore, approval by the FDA does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one foreign regulatory authority does not ensure approval by regulatory authorities in other foreign countries or by the FDA. Our MAA is currently under review by the European Medicines Agency, ~~changes~~or ~~could~~EMA, ~~make~~under a standard timeline. In June 2019, we received the ~~timing~~Day 120 List of Questions which include matters relating to clinical, ~~including~~non-clinical, ~~initiation~~quality, ~~patient~~and ~~accrual~~CMC, orand ~~results~~all stages of ~~our~~the clinical trials, ~~less~~including ~~predictable~~stage ~~and~~4, ~~could~~which ~~cause~~largely ~~our~~utilized a new lyophilized drug product. ~~candidates~~We continue to ~~perform~~interact ~~differently,~~with the ~~including~~EMA ~~causing~~regarding ~~toxicities,~~the ~~which~~application ~~could~~and ~~delay~~a orSAG ~~suspend~~meeting ~~completion~~was ofrecently held during March 2020. While we remain confident in our ~~clinical~~ability ~~trials~~to successfully address these matters, ~~delay~~we orare ~~prevent~~still ~~approval~~early in the process of evaluating our ~~product~~data ~~candidates,~~and options and~~/or~~ ~~jeopardize~~we ~~our~~acknowledge ~~ability~~that tothere ~~obtain~~is ~~regulatory~~no guarantee we will be successful attaining full approval for previously-untreated and previously-treated BPDCN, ~~commence~~full ~~product~~approval ~~sales~~for ~~and~~one ~~generate~~or ~~income~~the other indications, conditional approval for both indications, conditional approval for one or the other indications, or approval at all.

~~If we experience delays in the enrollment of patients in our clinical trials, our receipt of necessary regulatory approvals could be delayed or prevented.~~38

WeOur ~~may not be able to continue clinical trials for our~~ product candidates ~~if we are unable to enroll a sufficient number of eligible patients to participate in these trials~~, ~~including~~alone ~~as required by the FDA~~ or ~~other regulatory authorities. Patient enrollment, a significant factor~~ in ~~the~~combination ~~timing~~with ofany ~~clinical trials~~adjuvant, immunostimulant ~~is affected by many factors~~ including ~~the~~GM-CSF ~~size~~or ~~and~~imiquimod ~~nature~~or ~~of the patient population~~poly-ICLC, ~~the~~or ~~proximity~~other ofagents ~~patients~~with towhich ~~clinical~~we ~~sites,~~may ~~the~~combine ~~eligibility~~our ~~criteria~~drug ~~for the trial~~candidates, ~~the~~could fail ~~design of the clinical trial, competing clinical trials and clinicians’ and patients’ perceptions as~~ to ~~the~~receive ~~potential~~regulatory ~~advantages~~approval offor ~~the~~many ~~drug being studied in relation to other available therapies~~reasons, including, ~~any~~but ~~new~~not ~~drugs~~limited ~~that may be approved or may commence competing clinical trials for the indications we are investigating.~~to:

~~Some~~· ofthe ~~our~~FDA ~~product~~or ~~candidates~~comparable ~~are~~foreign ~~being~~regulatory ~~developed~~authorities inmay ~~orphan~~disagree ~~indications (i.e., rare diseases)~~ with ~~small available study populations. There are very limited independently reported data on annual incidences of these orphan indications. If~~ the ~~prevalence of these diseases is very low~~design, ~~including~~conduct ~~lower than our estimates~~ or ~~estimates~~findings of our ~~third-party contractors, this could significantly delay patient enrollment in any one or more of our ongoing or future~~ clinical trials.;

~~Further,~~· ~~if we fail to enroll and maintain~~ the ~~number~~FDA ofor ~~patients~~comparable ~~for~~foreign ~~which~~regulatory ~~the~~authorities ~~clinical trial was designed, the statistical power of that clinical trial~~ may beidentify ~~reduced,~~protocol ~~which~~deviations would make it harder to demonstrate that the product candidate being tested in such clinical trial is safe and effective. Additionally, enrollment delays in our clinical trials may result in increased development costs for our product candidates, which would cause the value of our common stock to decline and limit our ability to obtain additional financing. Our inability to enroll a sufficient number of patients for any of our current or ~~future~~data ~~clinical~~quality ~~trials would result in significant delays to,~~ or ~~may~~integrity ~~require~~concerns uswith toour ~~terminate~~preclinical orstudies ~~not initiate, one~~ or ~~more~~ clinical trials.;

~~The~~· ~~regulatory~~we ~~review~~may ~~and~~be ~~approval~~unable ~~processes~~to demonstrate to the satisfaction of the FDA ~~and~~or comparable foreign regulatory authorities ~~are~~that ~~lengthy,~~a ~~time-consuming~~product ~~and~~candidate ~~inherently~~is ~~unpredictable,~~safe and ifeffective ~~we are ultimately unable to obtain regulatory approval~~ for ~~our~~its ~~product~~proposed ~~candidates, our business will be substantially harmed.~~indication;

~~The~~· ~~time required to obtain approval by~~ the ~~FDA~~results ~~and comparable foreign authorities is unpredictable and depends upon numerous factors, including the substantial discretion~~ of ~~the regulatory authorities, which could include the prerequisite of an advisory panel, e.g. ODAC, review. In addition, approval policies, regulations, or the type and amount of preclinical, CMC,~~ clinical ~~pharmacology,~~trials ~~and clinical data necessary to gain approval~~ may ~~change~~not ~~during~~meet the ~~course~~level of astatistical ~~product~~significance ~~candidate’s clinical development, and may vary among jurisdictions. We may be~~ required toby ~~undertake and complete certain additional preclinical, CMC, clinical pharmacology, bioanalytical, immunogenicity, or clinical studies to generate additional data required to support~~ the ~~submission of an IND, a BLA, or an NDA to the~~ FDA or ~~equivalent applications to~~ comparable foreign ~~authorities. An inadequacy in any of these areas, or a lack of personnel, financial resources or performance, including by third parties, could result in a delayed or unsuccessful~~ regulatory ~~filing.~~authorities ~~For~~for example, we intend to have a meeting with the FDA to discuss the clinical development of ELZONRIS in CMML and potentially other indications. The FDA feedback may be difficult to implement or not implementable at all. Also, the FDA may require additional studies to support regulatory approval~~, which could result in a delay in our clinical programs and/or a delay or unsuccessful or no regulatory filing.~~ ;

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

~~Table~~· the FDA or comparable foreign regulatory authorities may disagree with our interpretation of ~~Contents~~data from, or the study design or execution of, preclinical studies or clinical trials;

We· ~~have~~the ~~only obtained~~ FDA ~~regulatory~~or ~~approval~~comparable ~~for~~foreign ~~one~~regulatory ~~drug~~authorities ~~product,~~may ~~ELZONRIS,~~not ~~and~~accept ~~it is possible that none of~~ our ~~other existing product candidates~~definition, ~~additional indications for ELZONRIS,~~ or ~~any product candidates we may seek to develop in the future will ever obtain regulatory approval. Furthermore~~criteria, ~~approval~~for by the ~~FDA~~primary ~~does~~endpoints ~~not~~and/or ~~ensure~~other ~~approval~~endpoints byfor ~~regulatory~~evaluation ~~authorities~~of inefficacy ~~other countries or jurisdictions,~~ and ~~approval~~clinical bybenefit ~~one~~to ~~foreign~~patients ~~regulatory~~and ~~authority~~may ~~does~~withhold ~~not~~marketing ~~ensure~~ approval, bydespite ~~regulatory~~meeting ~~authorities~~the inprimary ~~other~~endpoint ~~foreign~~of ~~countries~~a ~~or by the FDA.~~trial;

~~Our~~· ~~product~~the ~~candidates,~~data ~~alone~~collected orfrom inclinical ~~combination~~trials ~~with~~of ~~any~~our ~~adjuvant,~~product ~~immunostimulant~~candidates ~~including~~may ~~GM-CSF~~not orbe ~~Imiquimod~~sufficient orto ~~poly-ICLC,~~support orthe ~~other~~submission ~~agents~~of ~~with~~a ~~which~~BLA, wean ~~may~~NDA, ~~combine~~or ~~our~~other ~~drug~~submission ~~candidates,~~or ~~could fail~~ to ~~receive~~obtain regulatory approval ~~for~~in ~~many~~the ~~reasons,~~United ~~including~~States ~~but~~or ~~not limited to the following:~~elsewhere;

· ~~the~~ ~~FDA~~we ormay ~~comparable~~fail ~~foreign~~to ~~regulatory~~secure ~~authorities~~an ~~may~~appropriate ~~disagree~~right ~~with~~of reference to the ~~design,~~data ~~conduct~~from preclinical studies or ~~findings~~clinical trials of our ~~clinical~~product ~~trials~~candidates that we did not conduct or sponsor;

· the FDA or comparable foreign regulatory authorities may ~~identify~~fail ~~protocol~~to ~~deviations~~approve orthe ~~data~~manufacturing ~~quality~~processes or ~~integrity~~facilities ~~concerns~~of third-party manufacturers with ~~our~~which ~~preclinical~~we ~~studies~~currently orcontract for clinical ~~trials~~supplies and plan to contract for commercial supplies;

· we ~~may be unable to demonstrate to~~ the ~~satisfaction of the~~ FDA or comparable foreign regulatory authorities ~~that~~may afail ~~product~~to ~~candidate~~approve isany ~~safe~~companion ~~and~~diagnostics ~~effective~~we ~~for its proposed indication~~develop; and

· the ~~results~~approval ofpolicies ~~clinical~~or ~~trials~~regulations ~~may~~of ~~not~~the ~~meet~~FDA ~~the~~or ~~level~~comparable offoreign ~~statistical~~regulatory ~~significance~~authorities ~~required~~may bysignificantly ~~the~~change ~~FDA~~in ora ~~comparable~~manner ~~foreign~~rendering ~~regulatory~~our ~~authorities~~clinical data insufficient for approval;.

~~· we~~This lengthy and costly review process, as well as the unpredictability of future clinical trial results, may beresult ~~unable~~in our failing to ~~demonstrate~~obtain ~~that~~regulatory aapproval to market our product ~~candidate’s~~candidates ~~clinical~~that we may advance into and ~~other~~through ~~benefits~~clinical ~~outweigh~~trials, ~~its~~which ~~safety~~would ~~risks;~~significantly harm our business.

· the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from, or the study design or execution of, preclinical studies or clinical trials;39

~~· the~~In ~~FDA~~addition, oreven ~~comparable~~as ~~foreign~~part ~~regulatory~~of obtaining approval, regulatory authorities may ~~not~~approve ~~accept~~any of our ~~definition~~product candidates for fewer or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing commitments, including additional clinical trials, observational studies, and/or ~~criteria~~pregnancy registries, which could impact market adoption and acceptance and exceed commercialization budgets. Regulatory authorities may also approve a product candidate with a label that includes labeling claims that may be undesirable for the ~~primary~~successful commercialization ~~endpoints~~of ~~and/~~that product candidate, including product contraindications, warnings or ~~other~~precautions, ~~endpoints~~the need for ~~evaluation~~inpatient versus outpatient administration, or limitations on the administration schedule, such as the number of ~~efficacy~~infusions ~~and~~or ~~clinical~~cycles. ~~benefit~~In addition, we may not be able to ~~patients~~ultimately ~~and~~set ~~may~~the ~~withhold~~price ~~marketing~~we ~~approval~~intend to charge for our product candidates or obtain satisfactory reimbursement or coverage for our product candidates. Moreover, ~~despite~~in ~~meeting~~many foreign countries, a product candidate must be approved for reimbursement before it can be approved for sale in that country and the ~~primary~~reimbursement ~~endpoint~~may be suboptimal. Any of athe ~~trial;~~foregoing scenarios could materially harm the commercial prospects for our product candidates.

~~· the~~If ~~data~~we ~~collected~~are ~~from clinical trials of our product candidates may~~ not besuccessful ~~sufficient~~in todiscovering, ~~support~~developing ~~the~~and commercializing ~~submission~~additional ofproduct ~~a BLA~~candidates, anour ~~NDA,~~ability orto ~~other~~expand ~~submission~~our orbusiness toand ~~obtain~~achieve ~~regulatory~~our ~~approval~~strategic inobjectives ~~the~~may ~~United~~be ~~States or elsewhere;~~impaired.

· Although we ~~may~~expect ~~fail~~ to ~~secure~~focus ana ~~appropriate~~substantial ~~right~~amount of ~~reference~~our efforts on the continued clinical testing and regulatory interactions for our clinical stage drug candidates, another key element of our strategy is to identify and test additional compounds. A portion of the ~~data~~preclinical ~~from~~research that we are conducting involves new and unproven drug discovery methods, as well as the preclinical ~~studies~~testing orof ~~clinical~~new ~~trials~~compounds and potential new uses of existing compounds. The drug discovery that we are conducting using our StemScreen® platform technology may not be successful in identifying compounds that are useful in treating humans with cancer. Research programs designed to identify product candidates ~~that~~require wesubstantial ~~did~~technical, financial and human resources, whether or not ~~conduct~~any product candidates suitable for approval and commercial marketing are ultimately identified. Even if our research programs may initially show promise in identifying potential product candidates, they may fail to yield product candidates for clinical development or ~~sponsor;~~commercialization for many reasons, including the following:

· the ~~FDA~~research ormethodology ~~comparable~~used ~~foreign regulatory authorities~~ may ~~fail~~not tobe ~~approve~~successful ~~the~~in ~~manufacturing~~identifying ~~processes~~potential orproduct ~~facilities of third-party manufacturers with which we currently contract for clinical supplies and plan to contract for commercial supplies~~candidates;

· ~~the~~ ~~FDA~~competitors ~~or comparable foreign regulatory authorities~~ may ~~fail~~develop toalternatives ~~approve~~that ~~any~~render ~~companion~~our ~~diagnostics~~product wecandidates ~~develop~~obsolete; ~~and~~

· ~~the~~ ~~approval~~a ~~policies~~product orcandidate ~~regulations~~is ofsubject to the ~~FDA~~ongoing orcollection ~~comparable~~of ~~foreign~~safety ~~regulatory~~and ~~authorities~~efficacy data and may, ~~significantly~~on ~~change~~further instudy, abe ~~manner~~shown ~~rendering~~to ~~our~~have ~~clinical~~harmful ~~data~~side ~~insufficient~~effects, ~~for~~be ~~approval.~~prone to serious adverse events, fail to continue to exhibit that characteristics that support the initial findings of safety and efficacy or to otherwise fail to meet applicable regulatory criteria;

~~This~~· ~~lengthy~~a ~~and~~product ~~costly~~candidate ~~review~~may ~~process,~~not asbe ~~well~~capable ~~as the unpredictability~~ of ~~future~~being ~~clinical~~produced ~~trial results may result~~ in ~~our~~commercial ~~failing~~quantities toat ~~obtain~~an ~~regulatory~~acceptable ~~approval to market our product candidates that we may advance into and through clinical trials~~cost, ~~which~~or ~~would~~at ~~significantly~~all; ~~harm our business.~~and

In· addition, even after obtaining approval, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing commitments, including additional clinical trials, observational studies, and/or pregnancy registries, which could impact market adoption and acceptance and exceed commercialization budgets. Regulatory authorities may also approve a product candidate ~~with a label that includes labeling claims that~~ may not be ~~undesirable~~accepted ~~for~~as ~~the~~safe ~~successful~~and ~~commercialization~~effective ofby ~~that~~regulatory ~~product candidate~~authorities, ~~including product contraindications~~patients, ~~warnings or precautions,~~ the ~~need~~medical ~~for~~community ~~inpatient versus outpatient administration,~~ or ~~limitations~~third-party ~~on the administration schedule, such as the number of infusions or cycles~~payors. In addition, we may not be able to ultimately achieve the price we intend to charge for our product candidates or obtain satisfactory reimbursement or coverage for our product candidates. Moreover, in many foreign countries, a

32If we are unable to identify additional compounds for preclinical and clinical development, we may not have sufficient or any product income, which could result in significant harm to our financial position and adversely impact our stock price.

~~Table of Contents~~40

~~product~~If ~~candidate~~we ~~must~~obtain beapproval ~~approved~~to ~~for~~market ~~reimbursement~~any ~~before~~products itoutside ~~can~~of the beU.S., ~~approved~~a ~~for~~variety ~~sale~~of inrisks ~~that~~associated ~~country~~with ~~and~~international ~~the~~operations ~~reimbursement~~and ~~may~~expansion ~~be suboptimal. Any of the foregoing scenarios~~ could materially ~~harm~~adversely ~~the~~affect ~~commercial prospects for~~ our ~~product candidates~~business.

~~Our~~If ~~approach~~ELZONRIS tois ~~the~~approved ~~discovery~~for ~~and~~marketing ~~development~~outside of ~~product~~the ~~candidates~~U.S., ~~includes~~which may ~~the~~not ~~targeting~~occur, ofwe ~~cancer~~may ~~stem~~enter ~~cells~~into ~~(CSC),~~agreements ~~which~~with isthird ~~unproven~~parties to market ELZONRIS in certain jurisdictions. We have no prior experience in these countries, and wemany dobiopharmaceutical ~~not~~companies ~~know~~have ~~whether~~found the process of marketing their products in foreign countries to be very challenging. We expect that we will be ~~able~~subject to ~~develop~~additional ~~any~~risks ~~products~~related ofto ~~commercial~~international ~~value.~~operations or entering into international business relationships, including:

~~Research~~· ondifferent ~~CSCs~~regulatory isrequirements anfor ~~emerging~~drug ~~field~~development and, ~~consequently,~~approvals ~~there~~and isrules angoverning ~~ongoing~~drug ~~debate~~commercialization ~~regarding~~in ~~the~~foreign ~~importance of CSCs as an underlying cause of tumor initiation~~countries, ~~propagation,~~including ~~recurrence,~~postmarket ~~resistance~~surveillance, monitoring and ~~metastasis. In addition, there is some debate in the scientific community regarding the defining characteristics of these cells.~~reporting;

~~Although~~· ~~there~~possible isfailure aby ~~general~~us ~~consensus~~or ~~that~~our ~~some~~distributors ~~cancer~~to ~~cells~~obtain ~~have~~appropriate ~~tumor-initiating~~licenses ~~capacity,~~or ~~there~~regulatory ~~also~~approvals isfor ~~some debate in~~ the ~~scientific~~sale ~~community~~or ~~regarding~~use ~~the defining characteristics and the origin~~ of ~~these~~our ~~cells.~~product ~~Some believe that normal adult stem cells transform into CSCs. Others believe that normal tumor bulk can transform into CSCs and~~candidates, ~~therefore,~~if ~~a definitive CSC cannot be readily isolated or targeted. In addition~~approved, ~~some~~in ~~believe~~various that targeting CSCs should be sufficient for a positive clinical outcome, while others believe that, at times or always, targeting CSCs should be coupled with targeting tumor bulk for a positive clinical outcome.countries;

~~Based~~· onreduced preclinical and clinical data, we believe that, for some cancers, ELZONRIS may target both tumor bulk and CSCs. However, it is conceivable that ELZONRIS and any other product candidates that we develop may not effectively target tumor bulk or ~~CSCs~~no ~~or,~~protection ~~even~~over ifintellectual ~~they~~property do, they may not have a beneficial or durable clinical outcome that outweighs the risks associated with the product. In addition, it is conceivable that our platform technology may ultimately fail to identify commercially viable drugs to treat human patients with cancer or any other disease or condition.rights;

If· weunexpected ~~are~~changes ~~not successful~~ in ~~discovering~~tariffs, ~~developing~~export and ~~commercializing~~import ~~additional~~restrictions, ~~product~~trade ~~candidates~~barriers, ~~our ability to expand our business~~ and ~~achieve~~regulatory ~~our strategic objectives may be impaired.~~requirements;

~~Although~~· weeconomic ~~expect to focus a substantial amount of our efforts on the continued clinical testing and regulatory interactions for our clinical stage drug candidates~~weakness, ~~another key element of our strategy is to identify and test additional compounds. A portion of the preclinical research that we are conducting involves new and unproven drug discovery methods,~~ including ~~our proprietary StemScreen® platform technology~~inflation, asor ~~well~~political asinstability ~~the preclinical testing of new compounds and potential new uses of existing compounds. The drug discovery that we are conducting using our StemScreen® platform technology may not be successful~~ in ~~identifying~~particular ~~compounds~~foreign ~~that~~economies ~~are useful in treating humans with cancer. Research programs designed to identify product candidates require substantial technical, financial~~ and human resources, whether or not any product candidates are ultimately identified. Even if our research programs may initially show promise in identifying potential product candidates, they may fail to yield product candidates for clinical development or commercialization for many reasons, including the following:markets;

· ~~the~~ ~~research~~complexities ~~methodology~~associated ~~used~~with ~~may~~managing ~~not~~multiple bepayor-reimbursement ~~successful~~regimes inor ~~identifying~~self-pay ~~potential product candidates~~systems;

· ~~competitors~~ ~~may~~financial ~~develop~~risks, ~~alternatives~~such ~~that~~as ~~render~~longer ~~our~~payment ~~product~~cycles, ~~candidates~~difficulty ~~obsolete~~enforcing contracts and collecting accounts receivable;

· a ~~product~~compliance ~~candidate~~with ~~may~~tax, ~~on further study~~employment, beimmigration ~~shown~~and tolabor ~~have~~laws ~~harmful~~for ~~effects,~~employees toliving ~~have characteristics that indicate it is unlikely to be safe and effective,~~ or totraveling ~~otherwise fail to meet applicable regulatory criteria~~abroad;

· a ~~product~~foreign ~~candidate~~reimbursement, ~~may not be capable of being produced in commercial quantities at an acceptable cost~~pricing, orand atinsurance ~~all~~regimes; ~~and~~

· a ~~product~~foreign ~~candidate may not be accepted as safe and effective by regulatory authorities, patients, the medical community or third-party payors.~~taxes;

If· weforeign ~~are~~currency ~~unable to identify additional compounds for preclinical and clinical development~~fluctuations, ~~we may not sufficient any product income,~~ which could result in ~~significant~~increased ~~harm~~operating toexpenses ~~our~~and ~~financial~~reduced ~~position~~revenue, and ~~adversely~~other ~~impact~~obligations ~~our~~incident ~~stock~~to ~~price.~~doing business in another country;

If· weworkforce ~~obtain~~uncertainty ~~approval~~in tocountries ~~market~~where ~~any~~labor ~~products~~unrest ~~outside~~is ofmore common than in the U.S.~~, a variety of risks associated with international operations could materially adversely affect our business.~~;

If· ~~ELZONRIS~~difficulties ~~is approved for marketing outside of the U.S., we intend to enter into agreements with third parties to market these products~~ in ~~certain~~managing ~~jurisdictions.~~foreign ~~We expect that we will be subject to additional risks related to international~~ operations ~~or entering into international business relationships, including:~~;

· ~~different~~ ~~regulatory~~compliance ~~requirements~~with ~~for~~the ~~drug~~U.S. ~~approvals~~Foreign ~~and~~Corrupt ~~rules governing~~Practices ~~drug~~Act, ~~commercialization~~the United Kingdom Bribery Act 2010, or similar antibribery and anticorruption laws in ~~foreign~~other ~~countries~~jurisdictions as well as various regulations pertaining to data privacy, such as the European Union General Data Privacy Regulation;

33· production shortages resulting from any events affecting raw material supply or manufacturing capabilities abroad; and

~~Table~~· ofbusiness ~~Contents~~interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods, and fires.

~~· reduced or no protection over intellectual property rights;~~41

~~· unexpected~~We ~~changes~~are insubject ~~tariffs~~to ongoing FDA regulatory requirements related to ELZONRIS and our product candidates, ~~trade~~both ~~barriers~~before and after regulatory approval, which require significant resources. Additionally, our product and product candidates, if approved, could be subject to labeling and other restrictions and we may be subject to regulatory and enforcement actions or penalties if we fail to comply with regulatory requirements; or experience unanticipated problems with our product.

~~· economic~~Any ~~weakness~~additional regulatory approvals that we or our potential strategic partners may receive for our product candidates may also be subject to limitations on the approved indication for use for which the product may be marketed or to the conditions of approval, may contain product contraindications, warnings, or precautions that limit the use of our product candidates or may contain requirements for potentially costly post-marketing testing, including Phase ~~inflation~~4 clinical trials, and surveillance to monitor the safety and efficacy of our product candidates. In addition, with regard to ELZONRIS or ~~political~~any ~~instability~~product candidates, should they become approved by the FDA, the manufacturing processes, testing, packaging, labeling, storage, distribution, post-market reporting, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory compliance requirements. These requirements include submissions of safety and other post-marketing information and reports, as well as continued compliance with CGMPs for commercial manufacturing and good clinical practices, or GCPs, for any clinical trials that we conduct post-approval. For example, we have several post-marketing commitments related to the FDA approval of ELZONRIS. In addition, there are now and may be in ~~particular~~the ~~foreign~~future ~~economies~~manufacturing, formulation, fill-finish and ~~markets;~~other process and analytical changes required by the FDA related to producing drug substance and drug product of a quality, quantity and stability sufficient for commercial supply. Changes, delays or failures in any of these steps may negatively affect disposition of manufactured batches of drug substance and/or drug product, and as a result, may require production of additional batches of drug substance and/or drug product. Issues that may arise with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

· ~~compliance~~ ~~with~~restrictions ~~tax,~~on ~~employment~~the marketing or manufacturing of the product, ~~immigration~~withdrawal ~~and~~of ~~labor~~the ~~laws~~product ~~for~~from ~~employees~~the ~~living~~market, or ~~traveling~~product ~~abroad~~recalls;

· ~~foreign~~ ~~reimbursement~~warning letters, ~~pricing~~untitled letters, ~~and~~or ~~insurance~~holds ~~regimes~~on clinical trials;

· ~~foreign~~ ~~taxes~~refusal by the FDA to approve pending applications or supplements to approved applications filed by us or our strategic partners, or suspension or revocation of product license approvals;

· ~~foreign~~ ~~currency~~product ~~fluctuations,~~seizure ~~which~~or ~~could~~detention, ~~result~~or inrefusal ~~increased~~to ~~operating~~permit ~~expenses~~the ~~and~~import ~~reduced revenue,~~ and ~~other~~export ~~obligations~~of ~~incident to doing business in another country~~products;

· ~~workforce~~ ~~uncertainty~~investigations inor ~~countries~~inspections ~~where~~by ~~labor~~government ~~unrest~~entities, isincluding, ~~more~~but ~~common~~not ~~than~~limited into, ~~the~~FDA ~~U.S.~~or foreign health authorities; and

· ~~potential~~ ~~noncompliance~~injunctions, ~~with~~fines, ~~the~~consent ~~U.S. Foreign Corrupt Practices Act~~decrees, ~~the~~corporate ~~United~~integrity ~~Kingdom Bribery Act 2010~~agreements, or ~~similar~~the ~~antibribery~~imposition ~~and~~of ~~anticorruption laws in~~ other ~~jurisdictions~~civil aspenalties ~~well~~or ascriminal ~~various regulations pertaining to data privacy, such as the GDPR;~~penalties.

~~· production~~We ~~shortages~~cannot ~~resulting~~predict ~~from~~the ~~any~~likelihood, ~~events~~nature ~~affecting~~or ~~raw~~extent ~~material~~of ~~supply~~government regulation that may arise from future legislation or ~~manufacturing~~administrative ~~capabilities~~action, either in the United States or abroad;. If we are slow or are unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would adversely affect our business.

· business interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters including earthquakes, typhoons, floods, and fires.42

~~Also,~~Risks ~~see~~Related ~~the~~to ~~Risk~~Commercialization ~~Factor titled “International expansion~~ of ~~our~~ELZONRIS ~~business exposes us to business, legal, regulatory, political, operational, financial, economic,~~ and ~~other risks associated with conducting business outside of~~ the ~~U.S.” We have no prior experience in these countries,~~ Development and ~~many~~Commercialization ~~biopharmaceutical companies have found the process~~ of ~~marketing~~Our ~~their~~Product ~~products in foreign countries to be very challenging.~~Candidates

~~International~~If ~~expansion~~we ofare ~~our~~unable ~~business~~to ~~exposes~~fully usestablish toor ~~business,~~implement ~~legal,~~our ~~regulatory~~own sales, ~~political~~marketing, ~~operational,~~and ~~financial~~distribution capabilities in a timely manner, ~~economic~~or are unable to enter into licensing or collaboration agreements for these purposes, ~~and~~we ~~other~~may ~~risks~~not ~~associated~~be ~~with~~successful ~~conducting~~in ~~business~~commercializing ~~outside~~our ofproduct ~~the~~or Uproduct candidates.S.

~~Part of~~We ~~our~~continue ~~business~~to ~~strategy~~develop ~~involves~~our ~~international~~infrastructure ~~expansion,~~to ~~including~~commercialize ~~establishing~~ ELZONRIS, and ~~maintaining~~potentially ~~operations~~our ~~outside~~product ofcandidates, ~~the~~if ~~U.S.~~any ~~and~~are ~~establishing~~approved. ~~and~~We ~~maintaining~~may ~~relationships~~potentially ~~with~~enter ~~health~~into ~~care~~contract ~~providers~~research, ~~payors,~~contract ~~government officials~~sales, ~~distributors~~licensing or ~~and~~collaboration ~~manufacturers~~agreements ~~globally.~~to ~~Conducting~~assist ~~business~~in ~~internationally~~the ~~involves~~future adevelopment ~~number~~and commercialization of ~~risks,~~such ~~including:~~product candidates.

~~· multiple~~To ~~conflicting~~develop ~~and~~internal ~~changing~~sales, ~~laws~~distribution and ~~regulations~~marketing ~~such~~capabilities for asour ~~tax~~product ~~laws~~candidates that might be approved, ~~export~~we would have to invest significant amounts of financial and ~~import~~management ~~restrictions~~resources, some ~~employment~~of ~~laws,~~which ~~anti-bribery~~would ~~and~~be ~~anti-corruption~~committed ~~laws~~prior to knowing that our clinical drug candidates were approved. For ELZONRIS, ~~regulatory~~as ~~requirements~~well ~~and~~as ~~other~~for our ~~governmental~~product ~~approvals~~candidates for which we decide to perform sales, ~~permits~~marketing, and ~~licenses;~~distribution functions ourselves, we face a number of additional risks, including:

· ~~possible~~ ~~failure by us or~~ our ~~distributors~~inability to ~~obtain~~recruit, ~~appropriate~~train, ~~licenses~~and orretain ~~regulatory~~adequate ~~approvals~~numbers ~~for the sale or use~~ of ~~our~~effective ~~product~~sales ~~candidates,~~and ifmarketing ~~approved, in various countries~~personnel;

· ~~difficulties~~ inthe ~~managing~~inability ~~foreign~~of ~~operations~~sales personnel to obtain access to physicians or effectively promote our approved product to physicians and other providers;

· ~~complexities~~ ~~associated~~the ~~with~~lack ~~managing~~of ~~multiple~~complementary ~~payor-reimbursement~~drug ~~regimes~~product orto ~~self-pay~~be ~~systems~~offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines;

· ~~financial~~ ~~risks,~~unforeseen ~~such~~costs asand ~~longer~~expenses ~~payment~~associated ~~cycles,~~with ~~difficulty~~creating ~~enforcing~~internal ~~contracts~~sales and ~~collecting~~marketing ~~accounts receivable, and exposure to foreign currency exchange rate fluctuations~~organizations;

· ~~reduced~~ ~~protection~~our ~~for~~inability ~~intellectual~~to ~~property~~effectively ~~rights~~build our manufacturing and commercial infrastructures to manufacture, market and sell our product candidates;

· ~~business~~ ~~interruptions~~our ~~resulting~~inability ~~from~~to ~~geopolitical~~build ~~actions,~~and ~~economic instability~~staff, or ~~natural~~enter ~~disasters,~~into ~~including,~~a ~~but~~partnership ~~not limited~~ to, ~~wars and terrorism~~support, ~~political~~an ~~unrest,~~effective ~~outbreak~~commercial ofdistribution ~~disease,~~organization; ~~earthquakes, boycotts, curtailment of trade,~~ and ~~other business restrictions;~~

34· the addressable market for our product candidates may result in unsatisfactory income.

~~Table~~Where and when appropriate, we may elect to utilize contract sales forces or strategic partners to assist in the commercialization of ~~Contents~~our products and product candidates for which we might receive marketing approval. If we enter into arrangements with third parties to perform sales, marketing and distribution services for our product, the resulting revenues or the profitability from these revenues to us are likely to be lower than if we had sold, marketed and distributed our product ourselves. In addition, we may not be successful in entering into arrangements with third parties to sell, market and distribute our product candidates or may be unable to do so on terms that are favorable to us. We may have limited control over such third-parties, and any of these third-parties may fail to devote the necessary resources and attention to sell, market and distribute our products effectively and may engage in conduct that subjects us to significant regulatory enforcement action, as well as civil and criminal liability. For ELZONRIS and our other product candidates that we commercialize on our own and build our own sales and marketing organization, there is also a risk that our employees may engage in conduct that subjects us to significant regulatory enforcement action, as well as civil and criminal liability. The sale of drug products is subject to numerous regulatory and legal restrictions on promotional statements that may be made regarding a product’s benefits and risks, in addition to certain restrictions and limitations on interactions with healthcare professionals. If we do not establish sales, marketing and distribution capabilities successfully and in compliance with legal and regulatory requirements, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates.

· failure to comply with foreign laws, regulations, standards and regulatory guidance governing the collection, use, disclosure, retention, security and transfer of personal data, including the European Union General Data Privacy Regulation, or GDPR, which introduces strict requirements for processing personal data of individuals within the European Union; and43

~~· failure~~Our tocommercial ~~comply~~success ~~with~~depends ~~the~~upon ~~Foreign~~attaining ~~Corrupt~~significant market ~~Practices~~acceptance ~~Act,~~of ~~including~~ELZONRIS ~~its books~~ and ~~records~~our ~~provisions~~clinical ~~and~~drug ~~its~~candidates, ~~anti-bribery~~if ~~provisions~~approved, ~~the~~among ~~United~~physicians ~~Kingdom~~and ~~Bribery~~other ~~Act~~healthcare ~~2010~~providers, ~~and~~patients, third-party ~~similar~~payors ~~antibribery~~ and, ~~anticorruption laws~~ in ~~other~~the ~~jurisdictions~~cancer market, ~~for~~acceptance ~~example~~ by ~~failing~~the tooperators ~~maintain~~of ~~accurate~~major ~~information~~cancer ~~and control over sales or distributors’ activities~~clinics.

~~Also,~~Even ~~see~~if ~~the~~our ~~Risk~~clinical ~~Factor~~drug ~~titled~~candidates, ~~“If~~or any other product candidate that we may develop or acquire in the future, obtain regulatory approval, tothe product may not gain market ~~any~~acceptance ~~products~~among ~~outside~~physicians, third-party ofpayors, patients and the Umedical community.S. For example, acurrent ~~variety~~cancer oftreatments ~~risks~~such ~~associated~~as ~~with~~chemotherapy ~~international~~and ~~operations~~radiation therapy ~~could~~are ~~materially~~well ~~adversely~~established ~~affect~~in ~~our~~the ~~business.”~~medical ~~Any~~community, ofand ~~these~~doctors ~~risks,~~may ifcontinue ~~encountered,~~to ~~could~~rely ~~significantly~~on ~~harm~~these ~~our~~treatments. ~~future~~The ~~international~~degree ~~expansion~~of ~~and~~market acceptance ~~operations~~of ELZONRIS and, ~~consequently,~~any ~~negatively~~other ~~impact~~product ~~our~~candidates ~~financial~~for ~~condition,~~which ~~results~~we ofreceive ~~operations,~~approval ~~and~~for ~~cash~~commercial ~~flows.~~sale depends on a number of factors, including:

We· ~~are~~the ~~subject~~assurance toof ~~ongoing~~efficacy ~~FDA regulatory requirements, related to ELZONRIS~~ and ~~our~~safety ~~product~~of ~~candidates, both before and after regulatory approval, which requires significant resources. Additionally,~~ our products, ~~and~~as ~~product~~demonstrated ~~candidates,~~in ifclinical ~~approved~~trials, ~~could be subject to labeling~~ and ~~other~~the ~~restrictions~~degree ~~and market withdrawal and we may be subject~~ to ~~penalties~~which ifour weproducts ~~fail~~represent toa ~~comply~~clinically ~~with~~meaningful ~~regulatory~~improvement ~~requirements~~in orcare ~~experience~~as ~~unanticipated~~compared ~~problems~~ with ~~our~~other ~~products.~~available therapies;

~~Any~~· ~~additional regulatory approvals that we or our potential strategic partners may receive for our product candidates may also be subject to limitations on~~ the ~~approved~~clinical ~~indicated~~indications ~~uses~~ for which ~~the product may be marketed or to the conditions of approval, may contain product contraindications, warnings, or precautions that limit the use of~~ our ~~product~~products ~~candidates~~are or may contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of our product candidates. In addition, with regard to ELZONRIS or any product candidates, should they become approved ~~by the FDA, the manufacturing processes, testing, packaging, labeling, storage, distribution, field alert or biological product deviation reporting, adverse event reporting, advertising, promotion~~ and recordkeeping for the product will be subject to extensive and ongoing regulatory compliance requirements. These requirements include submissions of safety and other post-marketing information and reports, as well as continued compliance with cGMPs for commercial manufacturing and good clinical practices, or GCPs, for any ~~clinical~~limiting ~~trials that we conduct post-approval. For example~~contraindications, ~~we have several post-marketing commitments related to the FDA approval of ELZONRIS. In addition~~warnings, ~~there are now~~ and may be in the future manufacturing, formulation, fill-finish and other process and analytical changes required by the FDA related to producing drug substance and drug product of a quality, quantity and stability sufficient for commercial supply. Changes, delays or failures in any of these steps may negatively affect disposition of manufactured batches of drug substance and/or drug product and as a result may require production of additional batches of drug substance and/or drug product. Problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:precautions;

· ~~restrictions~~ onacceptance ~~the~~by ~~marketing~~physicians, oroperators ~~manufacturing~~ of ~~the~~major ~~product,~~cancer ~~withdrawal~~clinics ofand ~~the~~patients ~~product~~of ~~from~~our ~~the~~products ~~market,~~as orsafe ~~product~~and ~~recalls~~effective treatments;

· ~~warning~~ ~~letters,~~the ~~untitled~~willingness ~~letters~~of the target patient populations to try new therapies, orenroll ~~holds~~in onongoing clinical trials, and of physicians to prescribe these therapies;

· ~~refusal~~ by the ~~FDA~~potential toand ~~approve~~perceived ~~pending~~advantages ~~applications~~of ~~or supplements to approved applications filed by us or~~ our ~~strategic~~products ~~partners,~~over oralternative ~~suspension or revocation of product license approvals~~treatments;

· ~~product~~ ~~seizure~~the ornumber ~~detention,~~of orvials ~~refusal~~and cycles used in the commercial setting relative to ~~permit~~what was used in the ~~import~~clinical trial setting and ~~export~~may ofhave ~~products;~~been expected in the commercial setting

· ~~investigations~~ orthe ~~inspections~~cost byof ~~government~~treatment ~~entities,~~in ~~including,~~relation ~~but not limited~~ to, ~~FDA~~alternative ~~or foreign health authorities~~treatments; ~~and~~

· ~~injunctions,~~ ~~fines,~~the ~~consent~~availability ~~decrees,~~of ~~corporate~~adequate ~~integrity~~reimbursement ~~agreements,~~and orpricing ~~the~~by ~~imposition~~third ofparties ~~other~~and ~~civil~~government ~~penalties or criminal penalties.~~authorities;

We· ~~cannot predict~~ the ~~likelihood,~~continued ~~nature~~projected orgrowth ~~extent~~ of ~~government~~oncology ~~regulation~~drug that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability, which would adversely affect our business.markets;

~~Risks~~· ~~Related~~relative toconvenience ~~Commercialization~~and ease of ~~ELZONRIS~~administration, ~~and~~including ~~the~~access ~~Development~~to ~~and~~drug ~~Commercialization~~administration ofequipment ~~Our~~such ~~Product~~as ~~Candidates~~syringe pumps;

If· wethe ~~are~~requirement ~~unable to fully establish or implement our own sales, marketing, and distribution capabilities in a timely manner, or are unable to enter into licensing or collaboration agreements~~ for ~~these purposes, we may not be successful~~ in-patient ~~commercializing~~versus ~~our~~out-patient ~~products or product candidates.~~administration;

We· ~~have~~the ~~built~~prevalence ~~our own commercial infrastructure to commercialize ELZONRIS,~~ and ~~potentially~~severity ~~our~~of ~~product~~adverse ~~candidates,~~events and ~~may~~side ~~potentially~~effects; ~~enter into contract research, contract sales, licensing or collaboration agreements to assist in the future development~~ and ~~commercialization of such product candidates.~~

To· ~~develop~~the ~~internal~~effectiveness ~~sales, distribution and marketing capabilities, we would have to invest significant amounts~~ of ~~financial and management resources, some of which would be committed prior to knowing that~~ our ~~clinical drug candidates were approved. For product candidates for which we decide to perform~~ sales, ~~marketing,~~ and ~~distribution~~marketing ~~functions ourselves, we could face a number of additional risks, including:~~efforts.

~~· our~~In ~~inability~~addition, we must be able to ~~recruit,~~successfully ~~train,~~identify ~~and~~patient populations ~~retain~~with ~~adequate~~sufficient numbers in order to successfully commercialize our products. There can be no guarantee that any of our programs will be effective ~~sales~~at identifying target patient populations, and the number of patients in the markets for which we may receive marketing ~~personnel;~~approval (e.g., in the United States, Europe and elsewhere) may turn out to be lower than expected, or patients may not be otherwise amenable to treatment with our products, all of which would adversely affect the results of our operations and our business.

~~· the~~If ~~inability~~ELZONRIS, ofor ~~sales~~any ~~personnel~~product candidates for which we were to receive ~~obtain~~approval, ~~access~~failed to ~~physicians~~achieve ormarket ~~effectively~~acceptance, ~~promote~~we ~~our~~would not be able to generate significant income. In addition, there are no guarantees that any approved ~~products~~product will be effective, or gain market acceptance, if we were to ~~physicians~~obtain ~~and~~approval ~~other~~for ~~providers;~~additional indications.

3544

~~Table~~Our ofproduct ~~Contents~~or product candidates may become subject to unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives, which would harm our business.

~~· the~~The ~~lack~~regulations ofthat ~~complementary~~govern marketing approvals, pricing and reimbursement for new drug products vary widely from country to becountry ~~offered~~and byare ~~sales~~subject ~~personnel~~to changes in interpretation, ~~which~~application and ~~may~~new ~~put~~legislative usproposals at any time. Some countries require the approval of the sale price of a ~~competitive~~drug ~~disadvantage~~before ~~relative~~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 ~~companies~~continuing ~~with~~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 income 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 ~~extensive~~product candidates, even if our product ~~lines;~~candidates obtain marketing approval.

~~· unforeseen~~Our ability to commercialize any products successfully also will depend in part on the extent to which reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will cover and how much they will pay for them. 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 ~~expenses~~the ~~associated~~amount of reimbursement for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with ~~creating~~predetermined ~~internal~~discounts ~~sales~~from list prices and are ~~marketing~~challenging ~~organizations;~~the prices charged for medical products. We cannot be sure that reimbursement will be available for any product that we commercialize and, if reimbursement is available, the level of reimbursement.

~~· our~~Reimbursement ~~inability~~may toimpact ~~build~~the demand for, or the price of, any product candidate for which we obtain marketing approval. Obtaining reimbursement for our ~~own~~products ~~manufacturing~~may ~~and~~be ~~commercial~~particularly ~~infrastructures~~difficult because of the higher prices often associated with drugs administered under the supervision of a physician. If reimbursement is not available or is available only to ~~manufacture~~limited levels, ~~market~~we ~~and~~may ~~sell~~not ~~our~~be able to successfully commercialize any product ~~candidates;~~candidate for which we obtain marketing approval.

· There may be significant delays in obtaining 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 the United States. Moreover, eligibility for reimbursement does not imply that any drug will be paid for in all cases or at a rate that covers our ~~inability~~costs, including research, development, manufacture, sale and distribution. Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to ~~build~~cover our costs and ~~staff~~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, ormay ~~enter~~be based on reimbursement levels already set for lower cost drugs and may be incorporated into aexisting ~~partnership~~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 follow Medicare coverage policy and payment limitations in setting their own reimbursement policies. Our inability to ~~support~~promptly obtain coverage and profitable payment 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, ~~commercial~~our ~~distribution~~ability ~~organizations;~~to raise the capital needed to commercialize products and our overall financial condition.

~~· the~~Healthcare ~~addressable~~policy ~~market~~changes ~~for~~may ~~our~~have ~~product~~a ~~candidates~~material ~~may~~adverse effect ~~result~~on ~~in unsatisfactory income~~us.

~~Where~~Our ~~and~~business ~~when appropriate, we~~ may ~~elect~~be toaffected ~~utilize~~by ~~contract~~the ~~sales~~efforts ~~forces~~of orgovernment ~~strategic~~and third-party ~~partners~~payors to ~~assist~~contain inor reduce the ~~commercialization~~cost of ~~product~~healthcare ~~candidates~~through ~~for~~various ~~which~~means. weFor ~~might~~example, ~~receive~~the ~~marketing~~Patient ~~approval.~~Protection Ifand weAffordable Care ~~enter~~Act ~~into~~and ~~arrangements~~the ~~with~~Health ~~third-parties~~Care toand ~~perform~~Education ~~sales,~~Affordability ~~marketing~~Reconciliation ~~and~~Act ~~distribution~~of ~~services~~2010 ~~for~~(collectively, ~~our~~the ~~products~~ACA), ~~the~~enacted ~~resulting~~in ~~revenues~~March 2010, substantially orchanged the ~~profitability~~way ~~from~~healthcare ~~these~~is ~~revenues~~financed toby usboth ~~are~~governmental ~~likely~~and toprivate beinsurers, ~~lower~~and ~~than~~significantly ifimpacted wethe pharmaceutical ~~had~~industry. ~~sold,~~With ~~marketed~~regard ~~and~~to ~~distributed~~pharmaceutical ~~our~~ products, ~~ourselves.~~among Inother ~~addition~~things, wethe ~~may~~ACA ~~not~~expanded beand ~~successful~~increased inindustry ~~entering~~rebates for ~~into~~drugs ~~arrangements~~covered ~~with~~under ~~third-parties~~federal tohealth ~~sell,~~care ~~market~~programs. ~~and~~Legislative ~~distribute~~proposals ~~our~~such ~~product~~as ~~candidates~~expanding orthe ~~may~~Medicaid bedrug ~~unable~~rebate program to dothe soMedicare onPart D ~~terms~~program, ~~that~~providing ~~are~~authority ~~favorable~~for tothe ~~us.~~government Weto ~~may~~negotiate ~~have~~drug ~~limited~~prices ~~control~~under ~~over~~the ~~such~~Medicare ~~third-parties,~~Part D program and ~~any~~lowering ofreimbursement ~~these~~for ~~third-parties~~drugs ~~may~~covered ~~fail~~under tothe ~~devote~~Medicare ~~the~~Part B ~~necessary~~program ~~resources~~have ~~and~~been ~~attention~~raised toin ~~sell,~~Congress ~~market~~but ~~and~~have not ~~distribute~~been ~~our~~enacted ~~products~~so ~~effectively~~far. ~~and~~In ~~may~~the ~~engage~~116th inU.S. ~~conduct~~Congress, ~~that~~there ~~subjects~~has usbeen a renewed and bipartisan effort to ~~significant~~address ~~regulatory~~the ~~enforcement~~cost ~~action~~of prescription drugs, asincluding ~~well~~legislation asintended ~~civil~~to ~~and~~increase ~~criminal~~competition ~~liability.~~by ~~For~~speeding ~~those~~the ~~products~~approval ~~that~~of wegeneric ~~commercialize~~drugs onand ~~our~~their ~~own~~entry ~~and~~to ~~build~~the marketplace, ~~our~~international ~~own~~reference ~~sales~~pricing and ~~marketing~~direct ~~organization~~government drug price negotiation, ~~there~~and isincreasing ~~also~~transparency aon ~~risk~~patents and ~~that~~price ~~our~~increases. ~~employees~~The ~~may~~administration ~~engage~~can inrely ~~conduct~~on ~~that~~its ~~subjects~~existing usstatutory authority to ~~significant~~make ~~regulatory~~policy ~~enforcement~~changes ~~action,~~that ascould ~~well~~have asan impact ~~civil~~on ~~and~~the ~~criminal~~drug ~~liability~~industry. ~~The~~For ~~sale~~example, ofthe ~~drug~~Medicare ~~products~~program ishas ~~subject~~in tothe ~~numerous~~past ~~regulatory~~proposed ~~and~~to ~~legal~~test ~~restrictions~~alternative onpayment ~~promotional~~methodologies for ~~statements~~drugs ~~that~~covered ~~may~~under bethe ~~made~~Part B ~~regarding~~program and finalized a ~~product’s~~proposal ~~benefits~~to ~~and~~pay ~~risks,~~hospitals inless ~~addition~~for toPart B-covered ~~certain~~drugs ~~restrictions~~purchased through ~~and~~the ~~limitations~~340B onDrug ~~interactions~~Pricing ~~with~~Program ~~healthcare~~effective ~~professionals~~January 1, 2018. IfAt wethe doend ~~not~~of ~~establish sales~~2019, ~~marketing~~the ~~and~~HHS ~~distribution~~released ~~capabilities~~a ~~successfully~~draft ~~and~~rule related to inimportation ~~compliance~~of ~~with~~prescription ~~legal~~drugs. ~~and~~It ~~regulatory~~is ~~requirements,~~unclear ~~either~~how onthis ~~our~~might ~~own~~impact orthe inpharmaceutical ~~collaboration~~market, ~~with~~but ~~third-parties,~~signals wea ~~will~~continued ~~not~~effort by bethe ~~successful~~administration into ~~commercializing~~lower ~~our~~drug ~~product~~costs ~~candidates~~through regulatory action.

Our commercial success depends upon attaining significant market acceptance of ELZONRIS and our clinical drug candidates, if approved, among physicians and other healthcare providers, patients, third-party payors and, in the cancer market, acceptance by the operators of major cancer clinics.45

~~Even~~Modifications ifto ~~our~~or ~~clinical~~repeal ~~drug~~of ~~candidates,~~all or ~~any~~certain ~~other~~provisions ~~product~~of ~~candidate~~the ACA ~~that~~have webeen ~~may~~attempted ~~develop or acquire~~ in ~~the~~Congress ~~future,~~as ~~obtains~~a ~~regulatory~~result ~~approval,~~of the ~~product~~outcome ~~may~~of ~~not~~the ~~gain~~recent ~~market~~presidential ~~acceptance~~and ~~among~~congressional ~~physicians~~elections, ~~third-party~~consistent with ~~payors,~~statements ~~patients~~made ~~and~~by the ~~medical~~incoming ~~community.~~administration ~~For~~and ~~example,~~members ~~current~~of ~~cancer~~Congress ~~treatments~~during ~~such~~the aspresidential ~~chemotherapy~~ and ~~radiation~~congressional ~~therapy~~campaigns and ~~are~~following ~~well established in~~ the ~~medical~~election. ~~community~~In January 2017, ~~and~~Congress ~~doctors~~voted ~~may continue~~ to ~~rely~~adopt ona ~~these~~budget ~~treatments.~~resolution ~~The~~for ~~degree~~the offiscal ~~market~~year ~~acceptance~~ of ~~any~~2017, ~~products~~or ~~for~~the Budget ~~which~~Resolution, wethat ~~receive~~authorizes ~~approval~~the ~~for~~implementation ~~commercial~~of ~~sale~~legislation ~~depends~~that onwould arepeal ~~number~~portions of ~~factors,~~the ~~including:~~ACA.

· The Budget Resolution is not a law. However, it is widely viewed as the ~~efficacy~~first step toward the passage of legislation that would repeal certain aspects of the ACA. Further, on January 20, 2017, President Trump signed an Executive Order directing federal agencies with authorities and ~~safety~~responsibilities under the ACA to waive, defer, grant exemptions from, or delay the implementation of ~~our~~any ~~products~~provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devices. In March 2017, following the passage of the budget resolution for the fiscal year of 2017, the U.S. House of Representatives passed legislation known as ~~demonstrated~~the American Health Care Act of 2017, which, if enacted, would amend or repeal significant portions of the ACA. Attempts in ~~clinical~~the ~~trials~~Senate in 2017 to pass similar ACA repeal legislation, including the Better Care Reconciliation Act of 2017, were unsuccessful. However, in December 2017, the Tax Cuts and Jobs Act was enacted, which includes a provision that effectively repeals the ~~degree~~ACA’s individual mandate by reducing the tax penalty for failing to ~~which~~maintain ~~our~~minimum ~~products~~essential ~~represent~~coverage to zero. Following this legislation, Texas and 19 other states filed a ~~clinically~~lawsuit ~~meaningful~~alleging ~~improvement~~that inthe ~~care~~ACA is unconstitutional as ~~compared~~the individual ~~with~~mandate ~~other~~was ~~available~~repealed, undermining the legal basis for the Supreme Court’s prior decision. On December 14, Texas federal district court judge Reed O’Connor issued a ruling declaring that the ACA in its entirety is unconstitutional. Upon appeal, the Fifth Circuit upheld the district court’s ruling that the individual mandate is unconstitutional. However, the Fifth Circuit remanded the case back to the district court to conduct a more thorough assessment of the constitutionality of the entire ACA despite the individual mandate being unconstitutional. While this decision has no immediate legal effect on the ACA and its provisions, this lawsuit is ongoing. The Bipartisan Budget Act of 2018, or BBA, passed in February 2018, set government spending levels for Fiscal Years 2018 and 2019 and revised certain provisions of the ACA. Specifically, beginning in 2019, the BBA increased manufacturer point-of-sale discounts off negotiated prices of applicable brand drugs in the Medicare Part D coverage gap from 50% to 70%, ultimately increasing the liability for brand drug manufacturers. This mandatory manufacturer discount also applied to biosimilars beginning in 2019. Regardless of whether or not the ACA is changed or modified by Congress or the Supreme Court, we expect both government and private health plans to continue to require healthcare providers, including healthcare providers that may one day purchase our products, to contain costs and demonstrate the value of the therapies; they provide.

~~· the clinical indications for which our products are approved and any limiting contraindications, warnings, and precautions;~~46

~~· acceptance~~Our ~~by physicians~~product, ~~operators~~or ofproduct ~~major~~candidates ~~cancer~~for ~~clinics~~which ~~and~~we ~~patients~~intend to ofseek ~~our~~approval as biological products, asmay ~~safe~~face ~~and~~competition ~~effective~~sooner ~~treatments;~~than expected.

· With the ~~willingness~~enactment of the ~~target~~Biologics ~~patient~~Price ~~populations~~Competition and Innovation Act of 2009, or BPCIA, as part of the ACA, an abbreviated pathway for the approval of biosimilar and interchangeable biological products was created. Under the BPCIA, an application for a biosimilar product cannot be submitted to ~~try~~the ~~new~~FDA ~~therapies~~until four years after, and approval by the FDA cannot be made effective until 12 years after, the date of ~~physicians~~the first licensure of the reference product. We believe that ELZONRIS, and or any of our product candidates that may receive marketing approval by the FDA as a biological product under a BLA, should qualify for the 12-year period of exclusivity. However, there is a risk that the U.S. Congress could amend the BPCIA to ~~prescribe~~significantly ~~these~~shorten ~~therapies;~~this exclusivity period, potentially creating the opportunity for generic competition sooner than anticipated. Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of our reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. In addition, a competitor could decide to forego the biosimilar route and submit a full BLA after completing its own preclinical studies and clinical trials. In such cases, any exclusivity to which we may be eligible under the BPCIA would not prevent the competitor from marketing its product as soon as it is approved.

~~· the~~Risks ~~potential~~Related ~~and~~to ~~perceived~~Our ~~advantages~~Financial ofPosition ~~our~~and ~~products~~Capital ~~over alternative treatments;~~Requirements

· We have incurred net operating losses since our inception and anticipate that we will continue to incur substantial operating losses for the ~~cost~~foreseeable future. We may never achieve or sustain profitability, which would depress the market price of ~~treatment~~our incommon ~~relation~~stock, and could cause you to ~~alternative~~lose ~~treatments;~~all or a part of your investment.

· We have incurred net losses from operations from our inception through December 31, 2019 of approximately $377.6 million. We do not know whether or when we will become profitable. Our losses have resulted principally from costs incurred in development and discovery activities. We anticipate that our operating losses will decrease over the ~~availability~~next several years as we execute our strategy to commercialize ELZONRIS coupled with our plan to expand our discovery, research and development activities. We believe that our existing cash, cash equivalents, and investments, including the cash proceeds received from our follow-on public offering during the third quarter of ~~adequate~~2019, ~~reimbursement~~will be sufficient to fund our operations and ~~pricing~~our bycapital expenditures for at least the next two years. If our cash is insufficient to meet future operating requirements, we will have to raise additional funds. If we are unable to obtain additional funds on terms favorable to us or at all, we may be required to cease or reduce our operating activities or sell or license to third-parties some or all of our intellectual property. If we raise additional funds by selling additional shares of our capital stock, the ownership interests of our stockholders will be diluted. If we need to raise additional funds through the sale or license of our intellectual property, we may be unable to do so on terms favorable to us, if at all. In addition, if we do not continue to meet our diligence obligations under our license agreements for our clinical drug candidates that we have in-licensed, we will lose our rights to develop and ~~government~~commercialize ~~authorities;~~those clinical drug candidates.

· If we do not successfully develop and obtain regulatory approval for our existing and future product candidates and effectively manufacture, market and sell our product candidates that are approved, we may never generate sales of those product candidates, and even if we do generate sales, we may never achieve or sustain profitability on a quarterly or annual basis. Our failure to become and remain profitable would depress the ~~continued~~market ~~projected~~price ~~growth~~of our common stock and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations. A decline in the market price of ~~oncology~~our ~~drug~~common ~~markets;~~stock also could cause you to lose all or a part of your investment.

~~· relative convenience and ease of administration, including access to drug administration equipment such as syringe pumps;~~47

36We will require additional financing to achieve our goals, and a failure to obtain this capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts.

~~Table~~Since our inception, most of ~~Contents~~our resources have been dedicated to the discovery, acquisition, preclinical and clinical development of our product candidates. We have expended and believe that we will continue to expend substantial resources for the development of our clinical product candidates and may expend additional resources on other product candidates and drug acquisition or discovery efforts. These expenditures will include costs associated with general administration, facilities, research and development, acquiring new technologies, manufacturing product and product candidates, conducting preclinical experiments, conducting clinical trials, preparing for and having regulatory interactions including applying for regulatory approvals, and commercializing ELZONRIS, as well as any product candidates that might receive approval for sale, as well as costs associated with operating as a public company.

· As the ~~requirement~~outcome ~~for~~of ~~in-patient~~our ~~versus~~ongoing ~~out-patient~~and ~~administration;~~future clinical trials is highly uncertain, our estimates of clinical trial costs necessary to successfully complete the development and commercialization of our product candidates may differ significantly from our actual costs. In addition, other unanticipated costs may arise, which could cause us to seek additional funds sooner than planned.

~~· the~~Our ~~prevalence~~future ~~and~~capital ~~severity~~requirements ofdepend ~~adverse~~on ~~events~~many ~~and~~factors, ~~side effects; and~~including:

· the ~~effectiveness~~number of ~~our~~product ~~sales~~candidates we pursue and ~~marketing~~the ~~efforts.~~specific capital requirements to develop each product candidate;

In· addition, we must be able to successfully identify patient populations with sufficient numbers in order to successfully commercialize our products. There can be no guarantee that any of our programs will be effective at identifying target patient populations and the ~~number of patients the markets in which may receive marketing approval (e.g.~~scope, ~~in the United States~~progress, ~~Europe~~results and ~~elsewhere)~~costs ~~may~~of ~~turn~~researching ~~out~~and todeveloping beour ~~lower~~product ~~than expected~~candidates, ~~may~~and ~~not~~conducting bepreclinical ~~otherwise~~studies ~~amenable to treatment with our products, all of which would adversely affect the results of our operations~~ and ~~our~~clinical ~~business.~~trials;

If· wethe ~~were~~ability ~~to receive approval for any~~ of our ~~drug~~product candidates ~~and~~(including ~~they~~ELZONRIS ~~failed~~for touse ~~achieve~~in ~~market~~other ~~acceptance,~~indications) ~~we would not be able~~ to ~~generate~~progress ~~significant~~through ~~revenue.~~clinical Indevelopment ~~addition, there are no guarantees that any approved product will be effective, or gain market acceptance, if we were to obtain approval for additional indications.~~successfully;

~~Our~~· ~~products~~the ortiming ~~product candidates may become subject to unfavorable pricing regulations~~of, ~~third-party~~and ~~reimbursement~~the ~~practices~~costs orinvolved ~~healthcare reform initiatives~~in, ~~which~~seeking ~~would~~regulatory ~~harm~~approvals for our ~~business.~~product candidates;

~~The~~· ~~regulations~~the ~~that~~cost ~~govern~~of ~~marketing~~commercialization ~~approvals,~~activities ~~pricing and reimbursement~~ for ~~new drug products vary widely from country to country and are subject to changes interpretation~~ELZONRIS, ~~application~~along ~~and~~with ~~new legislative proposals at~~ any ~~time. Some countries require the approval~~ of ~~the~~our ~~sale~~other ~~price~~product ofcandidates athat ~~drug~~may ~~before it can~~ be ~~marketed.~~approved Infor ~~many countries~~sale, ~~the~~including ~~pricing review period begins after~~ marketing ~~or product licensing approval is granted. In some foreign markets~~, ~~prescription~~sales 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~~distribution impact the income 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.costs;

~~Our~~· ~~ability to commercialize any products successfully also will depend in part on~~ the extent to which reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations. Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will cover and how much they will pay for them. A primary trend in the U.S. healthcare industry and elsewhere is cost ~~containment.~~associated ~~Government~~with ~~authorities~~securing and ~~third-party~~establishing ~~payors~~commercialization ~~have attempted to control costs by limiting coverage~~ and ~~the~~manufacturing ~~amount~~capabilities ~~of reimbursement~~ for ~~particular~~our ~~medications.~~product ~~Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices~~ and ~~are~~product ~~challenging~~candidates ~~the prices charged~~ for ~~medical~~which ~~products. We cannot be sure that reimbursement will be available for any product that~~ we ~~commercialize~~might ~~and,~~receive ifregulatory ~~reimbursement is available, the level of reimbursement.~~approval;

~~Reimbursement~~· ~~may~~our ~~impact~~ability ~~the~~to ~~demand~~establish ~~for,~~and ormaintain ~~the~~strategic ~~price of~~partnerships, ~~any~~licensing ~~product~~or ~~candidate~~other ~~for~~arrangements ~~which~~and ~~we obtain marketing approval. Obtaining reimbursement for our products may be particularly difficult because of~~ the ~~higher~~economic ~~prices~~and ~~often~~other ~~associated~~terms ~~with drugs administered under the supervision~~ of asuch ~~physician. If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize any product candidate for which we obtain marketing approval.~~agreements;

~~There~~· ~~may be significant delays in obtaining reimbursement for newly approved drugs, and coverage may be more limited than~~ the ~~purposes~~costs ~~for~~involved ~~which the drug is approved by the FDA or similar regulatory authorities outside the United States. Moreover, eligibility for reimbursement does not imply that any drug will be paid for~~ in ~~all cases or at a rate that covers our costs~~preparing, ~~including research~~filing, ~~development~~prosecuting, ~~manufacture~~maintaining, ~~sale~~defending and ~~distribution.~~enforcing ~~Interim~~patent ~~reimbursement levels for new drugs~~claims, ifincluding ~~applicable,~~litigation ~~may also not be sufficient to cover our~~ costs and ~~may not be made permanent. Reimbursement rates may vary according to~~ the ~~use~~outcome of ~~the~~such 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 follow Medicare coverage policy and payment limitations in setting their own reimbursement policies. Our inability to promptly obtain coverage and profitable payment 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 the capital needed to commercialize products and our overall financial condition.litigation;

37· the timing, receipt and amount of sales of, or royalties on, our future products, if any;

~~Table~~· ofour ~~Contents~~need and ability to hire additional management and scientific, medical, sales, and marketing personnel;

~~Healthcare~~· ~~policy~~the ~~changes~~effect ~~may~~of ~~have~~competing atechnological ~~material~~and ~~adverse~~market ~~effect~~developments; ~~on us.~~and

Our business may be affected by the efforts of government and third-party payors to contain or reduce the cost of healthcare through various means. For example, the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act of 2010 (collectively, the ACA), enacted in March 2010, substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacted the pharmaceutical industry. With regard to pharmaceutical products, among other things, the ACA is expected to expand and increase industry rebates for drugs covered under Medicaid programs and make changes to the coverage requirements under the Medicare Part D program. In 2012, the Supreme Court upheld the ACA in response to a lawsuit alleging that the individual mandate was unconstitutional. The Supreme Court held that the individual mandate and corresponding penalty was constitutional because it would be considered a tax by the federal government. The Supreme Court also upheld federal subsidies for purchasers of insurance through federally facilitated exchanges in a decision released in June 2015. Legislative proposals such as expanding the Medicaid drug rebate program to the Medicare Part D program, providing authority for the government to negotiate drug prices under the Medicare Part D program and lowering reimbursement for drugs covered under the Medicare Part B program have been raised in Congress but have been met with strong opposition and have not been enacted so far. The administration can rely on its existing statutory authority to make policy changes that could have an impact on the drug industry. For example, the Medicare program has in the past proposed to test alternative payment methodologies for drugs covered under the Part B program and finalized a proposal to pay hospitals less for Part B-covered drugs purchased through the 340B Drug Pricing Program effective January 1, 2018.48

~~Modifications~~· toour orneed ~~repeal~~to ofimplement ~~all~~additional orinternal ~~certain~~systems ~~provisions of the ACA have been attempted in Congress as a result of the outcome of the recent presidential~~ and ~~congressional elections~~infrastructure, ~~consistent~~including ~~with~~financial ~~statements made by the incoming administration~~ and ~~members~~reporting ~~of Congress during the presidential and congressional campaigns and following the election~~systems. In January 2017, Congress voted to adopt a budget resolution for the fiscal year of 2017, or the Budget Resolution, that authorizes the implementation of legislation that would repeal portions of the ACA.

~~The~~Additional ~~Budget~~funds ~~Resolution~~may is not abe ~~law.~~available ~~However,~~when itwe isneed ~~widely viewed as the first step toward the passage of legislation that would repeal certain aspects of the ACA. Further~~them, on terms ~~January 20,~~that ~~2017,~~are ~~President~~acceptable ~~Trump signed an Executive Order directing federal agencies with authorities and responsibilities under the ACA~~ to ~~waive~~us, ~~defer, grant exemptions from,~~ or ~~delay~~at the implementation of any provision of the ACA that would impose a fiscal or regulatory burden on states, individuals, healthcare providers, health insurers, or manufacturers of pharmaceuticals or medical devicesall. InIf ~~March 2017,~~adequate ~~following~~funds ~~the~~are ~~passage~~not ofavailable the budget resolution for the fiscal year of 2017, the U.S. House of Representatives passed legislation known as the American Health Care Act of 2017, which, if enacted, would amend or repeal significant portions of the ACA. Attempts in the Senate in 2017 to ~~pass~~us ~~similar~~on ~~ACA repeal legislation, including the Better Care Reconciliation Act of 2017, were unsuccessful. However, in December 2017, the Tax Cuts and Jobs Act was enacted, which includes~~ a ~~provision~~timely that effectively repeals the ACA’s individual mandate by reducing the tax penalty for failing to maintain minimum essential coverage to zero. Following this legislation, Texas and 19 other states filed a lawsuit alleging that the ACA is unconstitutional as the individual mandate was repealed, undermining the legal basis ~~for the Supreme Court’s prior decision. This lawsuit is ongoing. Most recently~~, the Bipartisan Budget Act of 2018 (the BBA), passed in February 2018, set government spending levels for Fiscal Years 2018 and 2019 and revised certain provisions of the ACA. Specifically, beginning in 2019, the BBA increased manufacturer point-of-sale discounts off negotiated prices of applicable brand drugs in the Medicare Part D coverage gap from 50% to 70%, ultimately increasing the liability for brand drug manufacturers. This mandatory manufacturer discount also applies to biosimilars beginning in 2019. Regardless of whether or not the ACA is changed or modified by Congress or the Supreme Court, we ~~expect both government and private health plans to continue to require healthcare providers, including healthcare providers that~~ may ~~one~~be ~~day~~required ~~purchase our products,~~ to ~~contain costs and demonstrate the value of the therapies they provide.~~:

38· delay, limit, reduce or terminate preclinical studies, clinical trials or other research and development activities for one or more of our product candidates;

~~Table~~· delay, limit, reduce or terminate manufacturing of ~~Contents~~our product candidates; or

~~Our~~· ~~products~~delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize any of our product candidates ~~for~~that ~~which~~received weor ~~intend~~might toreceive ~~seek~~regulatory approval asand ~~biological~~ensure ~~products~~their ~~may~~acceptance ~~face~~by ~~competition~~third-party ~~sooner~~payors ~~than~~and ~~expected~~the market.

~~With~~We ~~the~~will ~~enactment~~need of the Biologics Price Competition and Innovation Act of 2009, or BPCIA, as part of the ACA, an abbreviated pathway for the approval of biosimilar and interchangeable biological products was created. The new abbreviated regulatory pathway establishes legal authority for the FDA to ~~review~~raise ~~and~~additional ~~approve~~funds ~~biosimilar biologics, including the possible designation of a biosimilar as “interchangeable.” The FDA defines an interchangeable biosimilar as a product that (1) can be expected~~ to ~~produce~~complete ~~the~~our ~~same~~ clinical trials ~~result as the reference product in any given patient~~ and ~~(2),~~achieve ~~where~~positive ~~the~~cash product is administered more than once, in terms of safety or diminished efficacy, presents no greater risk when switching between the biosimilar and its reference product than the risk of using the reference product aloneflow. Under the BPCIA, an application for a biosimilar product cannot be submitted to the FDA until four years after, and approval by the FDA cannot be made effective until 12 years after, the date of the first licensure of the reference product. The law is complex and is only beginning to be interpreted by the FDA and the courts. For example, in June 2017, the United States Supreme Court, in Sandoz, Inc. v. Amgen Inc., issued an opinion potentially impacting the previously understood effective market exclusivity period. The BPCIA’s ultimate impact, implementation and meaning are subject to uncertainty. While it is uncertain when this development and approval process may be fully adopted by the FDA, the manner in which FDA implements the process could have a material adverse effect on the future commercial prospects for our biological products.

WeRaising ~~believe~~additional ~~that~~capital ~~ELZONRIS,~~may orcause ~~any~~dilution ofto our ~~product candidates that receive marketing approval by the FDA as a biological product under a BLA~~existing stockholders, ~~should~~restrict ~~qualify~~our ~~for~~operations ~~the~~or ~~12-year~~require ~~period~~us ~~of exclusivity. However, there is a risk that the U.S. Congress could amend the BPCIA~~ to ~~significantly~~relinquish ~~shorten~~rights ~~this exclusivity period, potentially creating the opportunity for generic competition sooner than anticipated. Moreover, the extent~~ to ~~which a biosimilar, once approved, will be substituted for any one of~~ our ~~reference~~technologies ~~products~~or in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing. In addition, a competitor could decide to forego the biosimilar route and submit a full BLA after completing its own preclinical studies and clinical trials. In such cases, any exclusivity to which we may be eligible under the BPCIA would not prevent the competitor from marketing its product ~~as soon as it is approved~~candidates.

~~Risks~~We ~~Related~~will likely seek to ~~Our~~raise ~~Financial~~additional ~~Position~~capital through one or a combination of efforts including equity offerings, debt financings, strategic partnerships and ~~Capital~~alliances ~~Requirements~~and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of existing stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect stockholder rights. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take certain actions, such as incurring debt, making capital expenditures or declaring dividends. If we raise additional funds through strategic partnerships and alliances and licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us. If we are unable to raise additional funds through equity or debt financing when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

WeUnstable ~~have~~market ~~incurred net operating losses since our inception~~ and ~~anticipate~~economic ~~that~~conditions ~~we will continue to incur substantial operating losses for the foreseeable future. We~~ may ~~never~~have ~~achieve~~serious adverse orconsequences ~~sustain~~on ~~profitability, which would depress the market price of~~ our ~~common stock~~business, ~~and~~financial ~~could~~condition ~~cause~~and ~~you~~stock ~~to lose all or a part of your investment~~price.

39There can be no assurance that deterioration in credit and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by an economic downturn, a volatile business environment or an unpredictable and unstable market. If equity and credit markets deteriorate, it may make any necessary equity, debt, or other financing more difficult to secure, more costly, more dilutive, and less favorable to existing shareholders. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon our business and clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive these difficult economic times, which could directly affect our ability to attain our operating goals on schedule and on budget. There is a possibility that our stock price may decline, due in part to the volatility of the stock market and the general economic downturn.

~~Table of Contents~~49

WeAlthough ~~have~~we ~~incurred~~received ~~net~~FDA ~~losses~~approval ~~from~~for ~~operations from our inception through December 31~~ELZONRIS, ~~2018~~and ofeven if ~~approximately $300.8 million. We do not know whether or when~~ we ~~will~~receive ~~become~~regulatory ~~profitable.~~approval ~~Our~~for ~~losses~~any ~~have~~of ~~resulted principally from costs incurred in development and discovery activities. We anticipate that~~ our ~~operating~~product ~~losses will substantially increase over the next several years as we execute our plan to expand our discovery~~candidates, ~~research,~~sales ~~development~~of ~~and commercialization activities. We believe that~~ our ~~existing~~product ~~cash,~~depend ~~cash equivalents, short-term investments and long-term investments including the cash proceeds received from our follow-~~on ~~public~~reimbursement ~~offering~~by ~~during~~government health ~~the~~administration ~~first~~authorities, ~~quarter~~private ofhealth ~~2019~~insurers, ~~will be sufficient to fund our operations~~ and ~~our~~other ~~capital expenditures for at least the next two years~~organizations. If ~~our cash is insufficient to meet future operating requirements,~~ we ~~will have to raise additional funds. If we~~ are unable to obtain ~~additional~~or ~~funds~~maintain onanticipated levels, ~~terms~~reimbursement ~~favorable~~for toour usproduct or atcoverage ~~all, we~~ may be ~~required~~reduced, ~~to cease or reduce~~ our ~~operating~~pricing ~~activities~~may orbe ~~sell~~affected or ~~license to third-parties some or all of~~ our ~~intellectual~~product ~~property. If we raise additional funds by selling additional shares of our capital stock~~sales, ~~the~~results ~~ownership interests~~ of operations ~~our stockholders will be diluted. If we need to raise additional funds through the sale~~ or ~~license~~financial ofcondition ~~our~~could ~~intellectual property, we may~~ be ~~unable to do so on terms favorable to us, if at all~~harmed. In addition, if we do not continue to meet our diligence obligations under our license agreements for our clinical drug candidates that we have in-licensed, we will lose our rights to develop and commercialize those clinical drug candidates.

IfWe wemay do not ~~successfully~~be ~~develop~~able ~~and~~to ~~obtain~~sell ~~regulatory~~our ~~approval~~products ~~for~~on ~~our~~a ~~existing~~profitable ~~and~~basis or ~~future~~our ~~product~~profitability ~~candidates~~may ~~and~~be ~~effectively~~reduced ~~manufacture,~~if ~~market~~we ~~and~~are required to sell our ~~product~~products ~~candidates~~at ~~that~~lower ~~are~~than ~~approved,~~anticipated weprices or reimbursement is unavailable or limited in scope or amount. Our products may ~~never~~be ~~generate~~priced ~~sales~~significantly ofmore ~~those~~expensive ~~product~~than ~~candidates,~~traditional drug treatments and ~~even~~almost ifall patients require some form of third-party coverage to afford their cost. We anticipate that we dowill ~~generate~~depend, ~~sales~~to a significant extent, weon ~~may~~governmental ~~never~~payers, ~~achieve~~such oras ~~sustain~~Medicare ~~profitability~~and onMedicaid ain ~~quarterly~~the U.S. or ~~annual~~country ~~basis.~~specific ~~Our~~governmental ~~failure~~organizations in toforeign ~~become~~countries, and ~~remain~~private ~~profitable~~third-party ~~would~~payers ~~depress~~to defray the ~~market~~cost ~~price~~ of our ~~common~~products ~~stock~~to ~~and~~patients. ~~could~~These ~~impair~~entities ~~our~~may ~~ability~~ refuse to ~~raise~~provide ~~capital,~~coverage ~~expand~~and ~~our business~~reimbursement, ~~diversify~~determine ~~our~~to ~~product~~provide ~~offerings~~a orlower ~~continue~~level ~~our~~of ~~operations.~~coverage Aand ~~decline~~reimbursement inthan ~~the~~anticipated, ~~market~~or ~~price~~reduce previously ofapproved ~~our~~levels ~~common~~of ~~stock~~coverage ~~also~~and ~~could~~reimbursement, ~~cause~~including ~~you~~in tothe ~~lose~~form ~~all~~of orhigher amandatory ~~part~~rebates ofor ~~your~~modified ~~investment~~pricing terms.

WeIn ~~will~~certain ~~require~~countries ~~additional~~where ~~financing~~we sell or are seeking or may seek to ~~achieve~~commercialize our ~~goals~~products, pricing, coverage and alevel ~~failure~~of reimbursement or funding of prescription drugs are subject to ~~obtain~~governmental control. ~~this~~We ~~capital~~may ~~when~~be ~~needed~~unable ~~could~~to ~~force~~timely or successfully negotiate coverage, pricing, and reimbursement on terms that are favorable to us, or such coverage, pricing, and reimbursement may differ in separate regions in the same country. In some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to ~~delay~~country, ~~limit~~which may include a combination of distinct potential payers, ~~reduce~~including orprivate ~~terminate~~insurance and governmental payers as well as health technology assessment of medicinal products for pricing and reimbursement methodologies. Therefore, we may not successfully conclude the necessary processes and commercialize our ~~product~~products ~~development~~in every, or ~~commercialization~~even ~~efforts~~most countries in which we seek to sell our products.

~~Since~~A ~~our~~significant ~~inception,~~reduction ~~most~~in the amount of reimbursement or pricing for our ~~resources~~products ~~have~~in ~~been~~one ~~dedicated~~or tomore ~~the~~countries ~~discovery,~~may ~~acquisition~~reduce ~~and~~our ~~preclinical~~profitability and ~~clinical~~adversely ~~development~~affect of our ~~product~~financial ~~candidates~~condition. WeCertain ~~have~~countries establish ~~expended~~pricing and ~~believe~~reimbursement ~~that~~amounts weby ~~will~~reference ~~continue~~ to ~~expend~~the ~~substantial~~price ~~resources~~of ~~for~~the same or similar products in other countries. Therefore, if coverage or the ~~development~~level of ~~our~~reimbursement ~~clinical~~is ~~drug~~limited ~~candidates~~in ~~and~~one or more countries, we may ~~expend~~be ~~additional~~unable ~~resources~~to onobtain ~~other~~or ~~product~~maintain ~~candidates~~anticipated pricing ~~and~~or ~~drug~~reimbursement ~~discovery~~in ~~and~~current ~~acquisition~~or ~~efforts~~new territories. ~~These~~In ~~expenditures~~the ~~will~~U.S., ~~include~~the ~~costs~~European ~~associated~~Union ~~with~~member ~~general administration~~states, ~~facilities~~and elsewhere, ~~research~~there have been, and ~~development,~~we ~~acquiring~~expect ~~new~~there ~~technologies,~~will ~~manufacturing~~continue ~~product~~to ~~candidates~~be, ~~conducting~~efforts ~~preclinical~~to ~~experiments~~control and ~~clinical~~reduce ~~trials~~healthcare costs. In the U.S. for example, ~~applying~~the price of drugs has come under intense scrutiny by the U.S. Congress. Third party payers decide which drugs they will pay for ~~regulatory~~and ~~approvals,~~establish reimbursement and ~~commercializing~~co-payment ~~any~~levels. ~~products~~Government ~~that~~and ~~might~~other ~~receive~~third-party ~~approval~~payers are increasingly challenging the prices charged for healthcare ~~sale~~products, asexamining ~~well~~the ascost ~~costs~~effectiveness ~~associated~~of ~~with~~drugs ~~operating~~in asaddition ato ~~public~~their ~~company~~safety and efficacy, and limiting or attempting to limit both coverage and the level of reimbursement for prescription drugs.

WeHealth doinsurance ~~not~~programs ~~expect~~may torestrict ~~generate~~coverage ~~income~~of ~~until,~~some ~~and~~products by ~~unless,~~using wepayer ~~successfully~~formularies ~~commercialize~~under ~~one~~which oronly ~~more~~selected ofdrugs ~~our~~are ~~product~~covered, ~~compounds.~~variable Asco-payments that make drugs that are not preferred by the ~~outcome~~payer ofmore ~~our~~expensive ~~ongoing~~for patients, and ~~future~~by ~~clinical~~using ~~trials~~utilization ismanagement ~~highly uncertain~~controls, ~~our~~such ~~estimates~~as requirements for prior authorization or failure first on another type of ~~clinical~~treatment. ~~trial~~Payers ~~costs~~may ~~necessary~~especially toimpose ~~successfully~~these ~~complete~~obstacles ~~the~~to ~~development~~coverage ~~and~~for ~~commercialization~~higher-priced ofdrugs, and consequently our ~~product~~products ~~candidates~~ may ~~differ~~be ~~significantly~~subject ~~from~~to ~~our~~payer-driven ~~actual~~restrictions. ~~costs~~Additionally, U.S. Inpayers ~~addition,~~are ~~other~~increasingly ~~unanticipated~~considering new ~~costs~~metrics ~~may~~as ~~arise~~the basis for reimbursement rates.

AsIn acountries ~~result~~where ofpatients ~~these~~have ~~and~~access ~~other~~to ~~factors~~insurance, ~~currently~~their insurance ~~unknown~~co-payment toamount ~~us,~~or weother benefit limits may ~~need~~represent a barrier to ~~seek~~obtaining ~~additional~~or ~~funds~~continuing ~~sooner~~use ~~than~~of ~~planned,~~our ~~through~~potential ~~public~~products. We oranticipate ~~private~~providing ~~equity,~~support ~~debt~~for ~~financings~~non-profit organizations that assist patients in accessing treatment for certain diseases. Such organizations assist patients whose insurance coverage imposes prohibitive co-payment amounts or other expensive financial obligations. Such organizations’ ability to provide assistance to patients is dependent on funding from external sources, and ~~such~~we ascannot ~~strategic~~guarantee ~~partnerships~~that ~~and~~such ~~alliances~~funding ~~and~~will ~~licensing~~be ~~arrangements.~~provided Inat ~~addition~~adequate levels, weif at all. We also may ~~seek~~provide ~~additional~~our ~~capital~~products ~~due~~without charge to ~~favorable~~patients ~~market~~who ~~conditions~~have orno ~~strategic~~insurance ~~considerations~~coverage ~~even~~for ifdrugs wethrough ~~believe~~related charitable purposes. We are not able to predict the financial impact of the support we may provide for these and other charitable purposes; however, substantial support could have a ~~sufficient~~material ~~funds~~adverse ~~for~~effect on our ~~current~~profitability orin ~~future~~the ~~operating plans~~future.

~~Our future capital requirements depend on many factors, including:~~50

~~· the~~Our ~~number~~commercial success depends on obtaining and ~~characteristics~~maintaining reimbursement at anticipated levels for our products. It may be difficult to project the impact of evolving reimbursement mechanics on the ~~product~~willingness ~~candidates~~of payers to cover our products. If we ~~pursue;~~are unable to obtain or maintain coverage, or coverage is reduced in one or more countries, our pricing may be affected or our product sales, results of operations or financial condition could be harmed.

~~· the~~Risks ~~scope,~~Related ~~progress,~~to ~~results~~Our ~~and~~Business ~~costs of researching~~ and ~~developing our product candidates, and conducting preclinical studies and clinical trials;~~Industry

~~· the~~We ~~ability~~are ofa ~~our~~commercial-stage biopharmaceutical company with one FDA approved product ~~candidates~~in toa ~~progress~~single ~~through~~indication, ~~clinical~~which ~~development~~makes ~~successfully;~~it difficult to assess our future viability.

~~· the~~We ~~timing~~are a commercial-stage biopharmaceutical company with a limited operating history. We have not yet demonstrated an ability to successfully overcome many of, the risks and ~~the~~uncertainties ~~costs~~frequently encountered ~~involved~~by companies in new and rapidly evolving fields, ~~seeking~~particularly ~~regulatory~~in ~~approvals~~the ~~for~~biopharmaceutical area. For example, to execute our ~~product~~business ~~candidates;~~plan, we will need to successfully:

· ~~the~~ ~~cost~~execute ofand ~~commercialization~~sustain ~~activities~~successful ~~for ELZONRIS, along with any of our other~~ product ~~candidates~~candidate ~~that~~development ~~may be approved for sale, including marketing, sales and distribution costs~~activities;

· ~~the~~ ~~cost~~obtain ~~associated~~required ~~with~~regulatory ~~securing~~approvals ~~and~~for ~~establishing~~the ~~commercialization~~development and ~~manufacturing~~commercialization ~~capabilities~~of ~~for~~ our product candidates, and any ~~products~~new ~~for~~or ~~which~~expanded weindications ~~might~~for ~~receive~~these ~~regulatory~~product ~~approval~~candidates;

40· maintain, defend, leverage and expand our intellectual property portfolio;

~~Table~~· ofbuild, ~~Contents~~deploy, and maintain sales, distribution and marketing capabilities, either on our own or in collaboration with strategic partners should our product candidates obtain market approval;

· gain market and third-party payor acceptance for ELZONRIS, our approved product, ~~sales~~and ofour other product candidates, should they obtain market approval, or ELZONRIS should it obtain market approval in additional indications;

· ~~our~~ ~~ability~~develop toand ~~establish~~maintain CGMP compliant manufacturing and ~~maintain~~distribution ~~strategic~~capabilities ~~partnerships,~~sufficient ~~licensing~~to orsupport ~~other~~the ~~arrangements~~intended scope of our preclinical and ~~the~~clinical ~~economic~~development plans and ~~other~~the ~~terms~~commercial ofdemand ~~such~~for ~~agreements~~our product;

· ~~the~~ ~~costs~~complete ~~involved~~required inprocess ~~preparing,~~characterization ~~filing,~~and ~~prosecuting,~~validation ~~maintaining,~~activities ~~defending~~to ~~and~~support ~~enforcing~~any ~~patent~~planned ~~claims~~regulatory submission, ~~including~~which ~~litigation~~historically ~~costs~~has ~~and~~included the ~~outcome~~manufacture of ~~such~~at ~~litigation~~least three consecutive successful process validation batches for drug substance and at least three consecutive successful process validation batches for drug product;

· ~~the~~ ~~timing,~~implement ~~receipt~~a ~~and~~successful ~~amount~~post-market ofsurveillance ~~sales~~program to monitor the safety of, orany ~~royalties~~approved ~~on,~~product ~~our~~that ~~future~~are ~~products,~~being ifcommercially ~~any~~marketed and sold;

· ~~our~~ ~~need~~develop and ~~ability~~maintain toany ~~hire~~strategic ~~additional~~relationships ~~management~~we ~~and~~elect ~~scientific,~~to ~~medical,~~enter ~~sales, and marketing personnel~~into;

· ~~the~~ ~~effect~~satisfy ofour ~~competing~~obligations ~~technological~~under our licensing agreement and ~~market~~other ~~developments~~agreements; and

~~· our need to implement additional internal systems and infrastructure, including financial and reporting systems.~~51

~~Additional~~· ~~funds~~manage ~~may~~our ~~not~~spending beas ~~available~~costs ~~when~~and weexpenses ~~need~~increase ~~them,~~due onto ~~terms~~drug ~~that~~acquisition, ~~are~~discovery, ~~acceptable~~preclinical ~~to us~~development, orclinical attrials, ~~all.~~regulatory Ifinteractions, ~~adequate~~agreements, ~~funds~~and ~~are~~approvals, ~~not available to us on a timely basis~~manufacturing, weand ~~may be required to:~~commercialization.

~~· delay,~~If ~~limit,~~we ~~reduce~~are orunsuccessful ~~terminate~~in ~~preclinical~~accomplishing ~~studies~~these objectives, ~~clinical~~we may ~~trials~~not orbe ~~other~~able ~~research~~to ~~and~~adequately ~~development~~commercialize ~~activities~~our ~~for~~product(s) or ~~one~~product orcandidates, ~~more~~generate ofmeaningful ~~our~~revenue, develop our product candidates;, raise capital, expand our business, or continue our operations.

~~· delay~~We face substantial competition, ~~limit~~which may result in others discovering, ~~reduce~~developing or ~~terminate~~commercializing ~~manufacturing~~products ofbefore, ~~our~~or ~~product~~more ~~candidates;~~successfully, orthan we do.

~~· delay,~~Our ~~limit,~~future ~~reduce~~success ordepends ~~terminate~~on our ~~establishment~~ability ofto ~~sales~~demonstrate and maintain ~~marketing~~a ~~capabilities~~competitive oradvantage ~~other~~with ~~activities~~respect ~~that~~to the design, development, and commercialization of product candidates. Our competitors may besucceed ~~necessary~~in developing competing products before we do for the same indications we are pursuing, obtaining regulatory approval or gaining acceptance for products or for the same markets that we plan to ~~commercialize~~target. ~~any~~If ofwe are not “first to market” with our product candidates, ~~that~~our ~~received~~competitive orposition ~~might~~could ~~receive~~be ~~regulatory~~compromised ~~approval~~because ~~and~~it ~~ensure~~may ~~their~~be ~~acceptance~~more bydifficult ~~third-party~~for ~~payors~~us to obtain marketing approval for that product candidate and ~~the~~successfully market that product candidate as a competitor.

WeEven ~~will~~if ~~need~~we are “first to ~~raise~~market” ~~additional~~with ~~funds~~one toor ~~complete~~more of our ~~clinical~~product ~~trials~~candidates, a competitor could develop an alternative therapy for our approved indication(s) that demonstrates a superior efficacy and/or ~~achieve~~safety ~~positive~~profile ~~cash~~relative ~~flow~~to our approved product.

~~Raising~~We ~~additional~~expect ~~capital~~any ~~may~~product ~~cause~~candidate ~~dilution~~that we are able to ~~our~~commercialize will ~~existing~~compete ~~stockholders~~with products from other companies in the biotechnology and pharmaceutical industries. For example, ~~restrict~~there ~~our~~are ~~operations~~a ornumber of ~~require~~biopharmaceutical uscompanies tofocused ~~relinquish~~on ~~rights~~developing totherapeutics ~~our~~with ~~technologies~~which orwe ~~product~~may ~~candidates~~potentially compete including AbbVie Inc., Agenus Inc., Agios Pharmaceuticals, Inc., Ambit Biosciences Corporation (now a Daiichi Sankyo company), Amgen Inc., Astellas Pharma U.S., Inc., Astex Pharmaceuticals (now an Otsuka Pharmaceutical company), Bayer AG, Bionomics Limited, Blueprint Medicines Corp., Boehringer Ingelheim GmbH, Bristol-Myers Squibb, Inc., Celator Pharmaceuticals (now a Jazz Pharmaceuticals company), Celgene Corporation, Celldex Therapeutics, Inc. Cellectis, Cortice Biosciences, Inc., CTI BioPharma Corp., Cyclacel Pharmaceuticals, Inc., CytRx Corporation, Eli Lilly and Company, Eisai Co., Ltd., Genmab, Sanofi Genzyme Corporation, Geron Corp., GlaxoSmithKline plc, Humanigen, Inc., Ignyta, Inc. (a Roche company), ImmunoCellular Therapeutics, Ltd., ImmunoGen, Inc., Impact Biomedicines, Inc. (now a Celgene company), Incyte Corporation, Inspyr Therapeutics, Inc., Janssen Pharmaceutical Companies of Johnson & Johnson, Karyopharm Therapeutics Inc., Kura Oncology, Inc., Macrogenics, Inc., Merck & Co., Inc., Micromet, Inc. (an Amgen Inc. company), Mustang Bio, Inc., Northwest Biotherapeutics, Inc., Novartis International AG, OncoMed Pharmaceuticals, Inc., Pfizer Inc., Roche Holding AG, Sanofi U.S. LLC, Seattle Genetics, Inc., Stemcentrx, Inc. (an AbbVie company), Sumitomo Dainippon Pharma Co., Ltd., Sunesis Pharmaceuticals, Inc., Verastem, Inc., Xencor, Inc. and others.

WeMany ~~will~~of ~~likely~~our ~~seek~~competitors tohave ~~raise~~substantially ~~additional~~greater ~~capital~~commercial infrastructures ~~through a combination of private~~ and ~~public equity offerings~~financial, ~~debt~~technical ~~financings, strategic partnerships~~ and ~~alliances~~personnel ~~and~~resources ~~licensing~~than ~~arrangements. To the extent that~~ we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of existing stockholders will be diluted, and the terms may include liquidation or other preferences that adversely affect stockholder rightshave. ~~Debt~~In ~~financing~~addition, ifmany ~~available,~~are ~~may~~farther ~~involve~~along ~~agreements~~in ~~that~~their ~~include~~clinical development ~~covenants limiting or restricting our ability to take certain actions, such as incurring debt, making capital expenditures or declaring dividends~~programs. IfWe ~~we raise additional funds through strategic partnerships and alliances and licensing arrangements with third-parties, we~~ may ~~have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms that are~~ not ~~favorable to us. If we are unable to raise additional funds through equity or debt financing when needed, we may~~ be ~~required~~able to ~~delay,~~compete ~~limit,~~unless ~~reduce or terminate our product development or commercialization efforts or grant rights to develop and market product candidates that~~ we ~~would otherwise prefer to develop and market ourselves.~~successfully:

~~Unstable~~· ~~market~~design and ~~economic~~develop ~~conditions~~products ~~may~~that ~~have~~address ~~serious~~an ~~adverse~~unmet ~~consequences~~medical onneed ~~our~~or ~~business,~~demonstrate ~~financial~~a ~~condition~~superior ~~and~~benefit/risk ~~stock~~profile ~~price.~~to other products in the market;

~~There~~· ~~can~~conduct besuccessful nopreclinical ~~assurance~~studies ~~that deterioration in credit~~ and financial markets and confidence in economic conditions will not occur. Our general business strategy may be adversely affected by an economic downturn, a volatile business environment or an unpredictable and unstable market. If equity and credit markets deteriorate, it may make any necessary equity, debt, or other financing more difficult to secure, more costly, more dilutive, and less favorable to existing shareholders. Failure to secure any necessary financing in a timely manner and on favorable terms could have a material adverse effect on our growth strategy, financial performance and stock price and could require us to delay or abandon our business and clinical development plans. In addition, there is a risk that one or more of our current service providers, manufacturers and other partners may not survive these difficult economic times, which could directly affect our ability to attain our operating goals on schedule and on budget. There is a possibility that our stock price may decline, due in part to the volatility of the stock market and the general economic downturn.trials;

41· attract qualified scientific, medical, sales, marketing and commercial personnel;

~~Table of Contents~~52

~~Although~~· weobtain ~~received~~patent ~~FDA approval for ELZONRIS,~~ and/or ~~even~~other ifintellectual weproperty ~~receive~~protections ~~regulatory approval~~ for ~~any of~~ our ~~product~~processes ~~candidates, sales of our products depend on reimbursement by government health administration authorities, private health insurers~~ and ~~other organizations. If we are unable to obtain, or maintain at anticipated levels, reimbursement for our products, or coverage is reduced, our pricing may be affected or our~~ product ~~sales, results of operations or financial condition could be harmed.~~candidates;

We· ~~may~~obtain ~~not be able to sell our products on a profitable basis or our profitability may be reduced if we are~~ required toregulatory ~~sell~~approvals; ~~our products at lower than anticipated prices or reimbursement is unavailable or limited in scope or amount. Our products may be priced significantly more expensive than traditional drug treatments~~ and almost all patients require some form of third party coverage to afford their cost. We anticipate that we will depend, to a significant extent, on governmental payers, such as Medicare and Medicaid in the U.S. or country specific governmental organizations in foreign countries, and private third-party payers to defray the cost of our products to patients. These entities may refuse to provide coverage and reimbursement, determine to provide a lower level of coverage and reimbursement than anticipated, or reduce previously approved levels of coverage and reimbursement, including in the form of higher mandatory rebates or modified pricing terms.

In· ~~certain~~collaborate ~~countries~~with ~~where~~others we sell or are seeking or may seek to commercialize our products, pricing, coverage and level of reimbursement or funding of prescription drugs are subject to governmental control. We may be unable to timely or successfully negotiate coverage, pricing, and reimbursement on terms that are favorable to us, or such coverage, pricing, and reimbursement may differ in ~~separate regions in~~ the ~~same country. In some foreign countries~~design, ~~the~~development proposed pricing for a drug must be approved before it may be lawfully marketed. The requirements governing drug pricing vary widely from country to country, which may include a combination of distinct potential payers, including private insurance and ~~governmental~~commercialization ~~payers as well as health technology assessment~~ of ~~medicinal~~new products ~~for pricing and reimbursement methodologies~~. ~~Therefore, we may not successfully conclude the necessary processes and commercialize our products in every, or even most countries in which we seek to sell our products.~~

AEstablished ~~significant~~competitors ~~reduction in the amount of reimbursement or pricing for our products in one or more countries~~ may ~~reduce~~invest ~~our~~heavily ~~profitability~~to ~~and~~quickly ~~adversely affect our financial condition. Certain countries establish pricing~~ discover and ~~reimbursement~~develop ~~amounts~~novel bycompounds ~~reference~~that tocould ~~the~~make ~~price~~our ofproduct ~~the~~candidates ~~same or similar products in other countries~~obsolete. ~~Therefore,~~In ~~if coverage or the level of reimbursement is limited in one or more countries~~addition, weany ~~may~~new beproduct ~~unable~~that tocompetes ~~obtain~~with oran approved ~~maintain~~product ~~anticipated~~must ~~pricing~~demonstrate orcompelling ~~reimbursement~~advantages in ~~current or new territories. In the U.S.~~efficacy, ~~the European Union member states~~convenience, ~~and~~tolerability ~~elsewhere, there have been,~~ and wesafety ~~expect~~in ~~there~~order ~~will continue~~ to ~~be, efforts to control and reduce healthcare costs. In the U.S. for example, the~~ overcome price ofcompetition ~~drugs has come under intense scrutiny by the U.S. Congress. Third party payers decide which drugs they will pay for~~ and ~~establish~~to ~~reimbursement~~be ~~and~~commercially ~~co-payment levels~~successful. ~~Government~~If ~~and~~we ~~other third-party payers~~ are ~~increasingly~~not ~~challenging~~able ~~the~~to ~~prices~~compete ~~charged~~effectively ~~for~~against ~~healthcare~~our ~~products~~competitors, ~~examining~~our ~~the~~business will ~~cost~~not ~~effectiveness~~grow ~~of drugs in addition to their safety~~ and ~~efficacy,~~our ~~and~~financial ~~limiting~~condition ~~or attempting to limit both coverage~~ and ~~the~~operations ~~level~~will ~~of reimbursement for prescription drugs~~suffer.

~~Health~~If ~~insurance~~we ~~programs~~fail ~~may~~to ~~restrict~~attract ~~coverage~~and ofkeep ~~some~~senior ~~products~~management byand ~~using~~key scientific ~~payer formularies under which only selected drugs are covered, variable co-payments that make drugs that are not preferred by the payer more expensive for patients,~~ and bymarketing ~~using utilization management controls~~personnel, ~~such~~we ~~as requirements for prior authorization or failure first on another type of treatment. Payers~~ may ~~especially~~be ~~impose~~unable ~~these obstacles~~ to ~~coverage~~successfully ~~for~~develop ~~higher-priced~~our ~~drugs,~~product ~~and consequently~~candidates, conduct our ~~products~~clinical ~~may be subject to payer-driven restrictions. Additionally~~trials, and ~~U.S.~~commercialize ~~payers~~ELZONRIS ~~are~~or ~~increasingly~~our ~~considering~~product ~~new metrics as the basis for reimbursement rates~~candidates.

InOur ~~countries~~success ~~where~~depends ~~patients~~in ~~have~~part ~~access~~on toour ~~insurance,~~continued ~~their~~ability ~~insurance~~to ~~co-payment~~attract, retain ~~amounts~~and ormotivate ~~other~~highly ~~benefit~~qualified ~~limits~~management, ~~may~~clinical ~~represent~~and ascientific ~~barrier~~personnel. toWe ~~obtaining~~are orhighly ~~continuing~~dependent ~~use~~upon of our ~~potential~~senior ~~products.~~management as Wewell ~~anticipate~~as ~~providing~~other ~~support~~employees, ~~for~~consultants ~~non-profit~~and ~~organizations~~scientific ~~that~~and ~~assist~~medical ~~patients in accessing treatment for certain diseases~~collaborators. ~~Such~~As ~~organizations~~of ~~assist~~March 16, ~~patients~~2020, ~~whose~~we ~~insurance~~had ~~coverage~~100 ~~imposes prohibitive co~~full-~~payment~~time employees, ~~amounts~~which ormay ~~other~~make ~~expensive~~us ~~financial~~more ~~obligations.~~reliant ~~Such organizations’ ability to provide assistance to patients is dependent~~ on ~~funding~~our ~~from~~individual ~~external~~employees ~~sources,~~than ~~and~~companies wewith ~~cannot~~a ~~guarantee~~greater ~~that~~number ~~such~~of ~~funding~~employees. ~~will~~The beloss of ~~provided~~services atof ~~adequate~~any ~~levels,~~of ifthese atindividuals ~~all.~~or Weone ~~also~~or ~~may~~more ~~provide~~of our ~~products~~other ~~without~~members ~~charge~~of tosenior ~~patients~~management ~~who~~could ~~have~~delay noor ~~insurance~~prevent ~~coverage for drugs through related charitable purposes. We are not able to predict~~ the ~~financial~~successful development ~~impact~~ of ~~the~~our ~~support~~product wepipeline, ~~may~~completion ~~provide~~of ~~for~~our ~~these~~ongoing and ~~other~~future ~~charitable~~clinical ~~purposes;~~trials ~~however,~~or ~~substantial~~the ~~support~~commercialization ~~could~~and ~~have~~successful marketing alaunch ~~material~~of ~~adverse effect on~~ our ~~profitability~~product ~~in the future~~candidates.

~~Our~~Although ~~commercial~~we ~~success~~have ~~depends~~not onhistorically ~~obtaining~~experienced ~~and~~unique ~~maintaining~~difficulties attracting ~~reimbursement~~and atretaining ~~anticipated~~qualified ~~levels~~employees, ~~for~~we ~~our~~could ~~products.~~experience Itsuch ~~may~~problems bein ~~difficult to project~~ the ~~impact~~future. ofFor ~~evolving~~example, ~~reimbursement~~competition ~~mechanics~~for onqualified personnel in the ~~willingness~~biotechnology ofand ~~payers~~pharmaceuticals tofield ~~cover~~is ~~our products~~intense. IfWe wewill ~~are~~need ~~unable~~ to ~~obtain~~hire oradditional ~~maintain~~personnel ~~coverage,~~as orwe ~~coverage~~expand isour clinical ~~reduced~~development inand ~~one~~commercial oractivities. ~~more~~We ~~countries, our pricing~~ may not be ~~affected~~able orto ~~our~~attract ~~product~~and ~~sales,~~retain ~~results~~quality ofpersonnel ~~operations~~on oracceptable ~~financial condition could be harmed~~terms.

42In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in formulating our research and development and commercialization strategy. Our consultants and advisors may also be engaged with companies other than us and may have commitments under consulting or advisory contracts with other entities that may limit their availability to us.

~~Table~~If ofour ~~Contents~~employees or third parties acting on our behalf commit fraud or other misconduct, including noncompliance with regulatory standards and requirements, our business may experience serious adverse consequences.

~~Risks~~We ~~Related~~are exposed to ~~Our~~the risk of fraud or other misconduct by employees and third parties acting on our behalf. Misconduct by employees or third parties could include intentional failures to comply with FDA regulations, to provide accurate information to the FDA, to comply with manufacturing standards we have established, to comply with federal and state healthcare fraud and abuse laws and regulations, to report financial information or data accurately or to disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. We have adopted a Code of Business Conduct and ~~Industry~~Ethics, but it is not always possible to identify and deter employee and third-party misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines, penalties, other sanctions, and exclusion from government-funded healthcare programs.

~~We are a commercial-stage biopharmaceutical company with one FDA approved product, which makes it difficult to assess our future viability.~~53

We ~~are~~expect ~~a commercial-stage biopharmaceutical company with a limited operating history. We have not yet demonstrated an ability~~ to ~~successfully~~expand ~~overcome~~our ~~many~~development, ofregulatory, ~~the~~and ~~risks~~ sales and ~~uncertainties~~marketing ~~frequently~~capabilities, ~~encountered by companies in new~~ and ~~rapidly~~as ~~evolving~~a ~~fields~~result, ~~particularly~~we inmay ~~the~~encounter ~~biopharmaceutical~~difficulties ~~area.~~in ~~For~~managing ~~example, to execute~~ our ~~business plan~~growth, wewhich ~~will~~could ~~need~~disrupt toour ~~successfully:~~operations.

~~· execute~~In connection with our commercial launch of ELZONRIS and possible international expansion, we expect to experience significant growth in the number of our employees and the scope of our operations, particularly in the areas of drug development, regulatory affairs, quality, commercial compliance, medical affairs, and sales and marketing. For example, we plan to hire additional personnel in connection with our commercial launch of ELZONRIS in the United States and Europe and prepare for potential regulatory filings for ELZONRIS in other markets. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. The hiring, training and integration of new employees may be more difficult, costly and/or time-consuming for us because we have fewer resources than a larger organization. Our future financial performance, our ability to successfully commercialize ELZONRIS and our product ~~candidate~~candidates, and our ability to compete effectively will depend, in part, on our ability to manage any future growth effectively. Our management team has limited experience in managing a company with this anticipated growth, and we may not be able to do so effectively. The physical expansion of our operations may lead to significant costs and may divert our management and business development ~~activities;~~resources. We may not be able to effectively manage the expansion of our operations, which could delay the execution of our business plans or disrupt our operations.

~~· obtain~~If ~~required~~product ~~regulatory~~liability ~~approvals~~lawsuits ~~for~~are ~~the~~brought ~~development~~against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates;.

~~· maintain~~We face an inherent risk of product liability as a result of the clinical testing and commercial sale of our product candidates and products. For example, ~~defend~~we may be sued if any product we develop allegedly causes or contributes to an injury or is found to be otherwise defective during product testing, clinical ~~leverage~~study, clinical use, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects in manufacturing, defects in design, failure to warn of dangers inherent in the product, negligence, strict liability and ~~expand~~a breach of warranties. Fraud-based claims, as well as claims made pursuant to state consumer protection acts, are also a possibility. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our ~~intellectual~~product ~~property~~candidates. ~~portfolio;~~Even a successful defense would require significant financial and management resources. Regardless of the merits or eventual outcome, liability claims may result in:

· ~~build,~~ ~~deploy,~~decreased ~~and~~demand ~~maintain~~for ~~sales,~~our ~~distribution~~product and ~~marketing~~product ~~capabilities,~~candidates ~~either~~that onwe ~~our~~may ~~own or in collaboration with strategic partners, should our products obtain market approval~~develop;

· ~~gain~~ ~~market~~injury ~~and~~to ~~third-party payor acceptance for~~ our ~~products, should they obtain market approval~~reputation;

· ~~develop~~ ~~and~~withdrawal ~~maintain~~of ~~cGMP~~clinical ~~compliant~~trial ~~manufacturing~~participants and ~~distribution~~inability ~~capabilities sufficient~~ to ~~support~~enroll ~~the~~future ~~intended scope of our preclinical and~~ clinical ~~development~~trial ~~plans and the potential commercial demand for our product(s)~~participants;

· ~~complete~~ ~~required~~costs ~~process characterization and validation activities~~ to ~~support~~defend ~~any planned regulatory submission, which historically has included~~ the ~~manufacture~~related ~~of at least three (3) consecutive successful process validation batches for drug substance and at least three (3) consecutive successful process validation batches for drug product~~litigation;

· ~~develop~~ ~~and~~a ~~maintain~~diversion ~~any~~of ~~strategic~~management’s ~~relationships~~time weand ~~elect~~our ~~to enter into~~resources;

~~· satisfy our obligations under our licensing agreement and other agreements; and~~54

· ~~manage~~ ~~our~~substantial ~~spending~~monetary asawards ~~costs and expenses increase due~~ to ~~drug~~trial ~~discovery,~~participants ~~preclinical~~or ~~development, clinical trials, regulatory approvals, manufacturing and commercialization.~~patients;

If· weproduct ~~are unsuccessful in accomplishing these objectives~~recalls, wewithdrawals ~~may~~or ~~not be able to develop product candidates~~labeling, ~~raise~~marketing ~~capital, expand our business~~ or ~~continue~~promotional ~~our operations.~~restrictions;

We· ~~face~~loss ~~substantial~~of ~~competition, which may result in others discovering, developing or commercializing products before, or more successfully, than we do.~~income;

~~Our~~· ~~future success depends on our ability to demonstrate and maintain a competitive advantage with respect to~~ the ~~design,~~inability development and commercialization of product candidates. Our competitors may succeed in developing competing products before we do for the same indications we are pursuing, obtaining regulatory approval or gaining acceptance for products or for the same markets that we plan to ~~target.~~commercialize ~~If we are not “first to market” with~~ our product candidates,; ~~our competitive position could be compromised because it may be more difficult for us to obtain marketing approval for that product candidate~~ and ~~successfully market that product candidate as a competitor.~~

~~Even~~· ~~if we are “first to market” with one or more of our product candidates,~~ a ~~competitor~~decline ~~could~~in ~~develop an alternative therapy for~~ our ~~approved~~stock ~~indication(s) that demonstrates a superior efficacy and/or safety profile relative to our approved product(s)~~price.

WeOur ~~expect~~inability ~~any~~to obtain and retain sufficient product ~~candidate~~liability insurance ~~that~~at wean ~~are~~acceptable ~~able~~cost to ~~commercialize~~protect ~~will~~against ~~compete~~potential ~~with~~product ~~products~~liability ~~from~~claims ~~other~~could ~~companies~~prevent inor inhibit the ~~biotechnology~~commercialization of ~~and~~products ~~pharmaceutical~~we ~~industries~~develop. ~~For~~Although ~~example~~we maintain liability insurance, ~~there~~any ~~are~~claim athat ~~number~~may ofbe ~~biopharmaceutical~~brought ~~companies~~against ~~focused~~us oncould ~~developing~~result ~~therapeutics~~in ~~with~~a ~~which~~court judgment weor ~~may~~settlement ~~potentially~~in ~~compete~~an ~~including~~amount ~~Astellas~~that ~~Pharma~~is ~~U.S.~~not covered, ~~Inc.,~~ ~~Bionomics~~in ~~Limited,~~whole ~~Boehringer~~or ~~Ingelheim~~in ~~GmbH~~part, ~~Geron~~by ~~Corp.,~~our ~~GlaxoSmithKline~~insurance ~~plc,~~or ~~Macrogenics~~that ~~Inc.,~~is ~~Micromet, Inc.~~in ~~(an~~excess ~~Amgen, Inc.~~of ~~company),~~the ~~OncoMed~~limits of ~~Pharmaceuticals, Inc.,~~our ~~Pfizer~~insurance ~~Inc~~coverage., ~~Roche~~Our ~~Holding~~insurance ~~AG,~~policies ~~Sanofi~~also ~~U.S.~~have ~~LLC,~~various ~~Stemcentrx~~exclusions, ~~Inc.~~ ~~(an~~and ~~AbbVie~~we ~~company),~~may ~~Sumitomo~~be ~~Dainippon~~subject ~~Pharma~~to ~~Co.~~a ~~Ltd.,~~product ~~Verastem, Inc.,~~liability ~~and~~claim for ~~others.~~which ~~Additionally,~~we ~~there~~have ~~are~~no acoverage. ~~number~~We ofwill ~~companies~~have ~~working~~ to ~~develop~~pay ~~new~~any ~~treatments,~~amounts ~~which~~awarded ~~may~~by ~~compete~~a ~~with~~court ~~ELZONRIS~~or ~~and~~negotiated ~~SL-801,~~in ~~including~~a ~~AbbVie,~~settlement ~~Agios, Inc.,~~that ~~Ambit~~exceed ~~Biosciences~~our coverage ~~Corporation~~limitations ~~(now~~or athat ~~Daiichi~~are ~~Sankyo~~not ~~company),~~covered ~~Amgen~~by our insurance, ~~Astex~~and ~~Pharmaceuticals~~we ~~(now~~may annot ~~Otsuka~~have, ~~Pharmaceutical~~or ~~company)~~be able to obtain, ~~Celator~~sufficient ~~Pharmaceuticals~~capital ~~(now~~to pay such amounts.

43Our relationships with healthcare providers, physicians, and third-party payors in the United States and in foreign jurisdictions are subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which could expose us to criminal, civil or administrative sanctions, contractual damages, potential exclusion from government-funded healthcare programs, reputational harm, and diminished profits and future earnings.

~~Table~~Healthcare providers, physicians and third-party payors in the United States and in foreign jurisdictions play a primary role in the recommendation and prescription of ~~Contents~~any product candidates for which we obtain marketing approval. Our future arrangements with third-party payors and customers may expose us to fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our products for which we obtain marketing approval. Restrictions under applicable federal, state and foreign healthcare laws and regulations include the following:

a· ~~Jazz~~the ~~Pharmaceuticals~~federal ~~company),~~healthcare ~~Celgene~~Anti-Kickback ~~Corporation,~~Statute ~~Cellectis~~prohibits, ~~CTI~~among ~~BioPharma,~~other ~~Cyclacel Pharmaceuticals~~things, ~~Inc.,~~ ~~Eisai~~persons ~~Co.~~from ~~Ltd.,~~knowingly ~~Genmab,~~and ~~Genzyme~~willfully ~~Corporation (now a Sanofi company)~~soliciting, ~~Humanigen~~offering, ~~Inc., Immunogen, Incyte~~ ~~Corporation, Impact~~receiving ~~Biomedicines~~or ~~(now~~providing ~~a Celgene company)~~remuneration, ~~Janssen~~directly ~~Pharmaceutical~~or ~~Companies of Johnson & Johnson~~indirectly, ~~Karyopharm~~in ~~Therapeutics, Inc.,~~cash ~~Kura~~or ~~Oncology, Inc.,~~in ~~MustangBio~~kind, ~~Inc.,~~ ~~Novartis~~to ~~AG,~~induce ~~Seattle~~or ~~Genetics, Inc.,~~reward ~~Sunesis~~either ~~Pharmaceuticals, Inc., and Xencor, among others. There are also a number of drugs used for~~ the ~~treatment~~referral of ~~brain~~an ~~cancer~~individual ~~that may compete with SL-701~~for, ~~including,~~or ~~Avastin®~~the ~~(Roche Holding AG)~~purchase, ~~Gliadel®~~order ~~(Eisai~~or ~~Co.~~recommendation ~~Ltd.)~~of, ~~and~~any ~~Temodar®~~good ~~(Merck &~~or ~~Co., Inc.).~~service ~~There~~for ~~are~~which apayment ~~number~~may ofbe ~~companies~~made ~~working~~under tofederal ~~develop~~and ~~brain~~state ~~cancer~~healthcare ~~therapeutics with~~ programs insuch ~~clinical~~as ~~testing,~~Medicare including Agenus Inc., Bristol-Myers Squibb, Inc., Cortice Biosciences, Inc., CytRx Corporation, GenSpera, Inc., GlaxoSmithKline plc., ImmunoCellular Therapeutics, Ltd., Northwest Biotherapeutics, Inc., Novartis AG, Roche Holding AG, and ~~others.~~Medicaid;

~~Many~~· ofthe ~~our~~federal ~~competitors~~False ~~have~~Claims ~~substantially~~Act ~~greater~~imposes ~~commercial~~civil ~~infrastructures~~penalties, ~~and~~against ~~financial~~individuals or entities for knowingly presenting, ~~technical~~or ~~and~~causing ~~personnel~~to ~~resources~~be ~~than~~presented, weto ~~have.~~the Infederal ~~addition~~government, ~~many~~claims for payment that are ~~farther~~false ~~along~~or infraudulent ~~their~~or ~~clinical~~making ~~development~~a ~~programs.~~false Westatement ~~may~~to ~~not~~avoid, bedecrease ~~able~~or conceal an obligation to ~~compete~~pay ~~unless~~money weto ~~successfully:~~the federal government and also includes provisions allowing for private, civil whistleblower or “qui tam” actions;

· ~~design~~ the federal Health Insurance Portability and ~~develop~~Accountability ~~products~~Act ~~that~~of ~~address~~1996, anor ~~unmet~~HIPAA, ~~medical~~as ~~need~~amended by the Health Information Technology for Economic and Clinical Health Act, or ~~demonstrate~~HITECH, imposes criminal and civil liability for executing a ~~superior~~scheme to defraud any healthcare benefit~~/risk~~ ~~profile~~program. toHIPAA ~~other~~and ~~products~~HITECH inalso regulate the ~~market~~use and disclosure of identifiable health information by healthcare providers, health plans and healthcare clearinghouses, and impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of identifiable health information as well as requiring notification of regulatory breaches. HIPAA and HITECH violations may prompt civil and criminal enforcement actions as well as enforcement by state attorney generals;

~~· conduct successful preclinical studies and clinical trials;~~55

· ~~attract~~ ~~qualified~~the ~~scientific,~~federal ~~medical,~~false ~~sales~~statements statute prohibits knowingly and willfully falsifying, ~~marketing~~concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, ~~and~~items ~~commercial~~or ~~personnel~~services;

· ~~obtain~~ ~~patent~~the federal transparency requirements under the ACA, commonly referred to as the Sunshine Act requires manufacturers of drugs, devices, biologics and~~/or~~ medical supplies to report to the HHS information related to U.S.-licensed physician and teaching hospital payments and other ~~intellectual~~transfers ~~property~~of ~~protections~~value ~~for~~including ~~our~~research ~~processes~~payments and ~~product~~ownership ~~candidates~~and investment interests;

· ~~obtain~~ ~~required~~analogous ~~regulatory~~state ~~approvals;~~laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other healthcare providers or marketing expenditures;

· ~~collaborate~~ the U.S. Foreign Corrupt Practices Act, or FCPA, and other anti-corruption laws and regulations pertain to interactions with ~~others~~foreign government officials. The FCPA prohibits U.S. companies and their employees, officers, and representatives from paying, offering to pay, promising, or authorizing the payment of anything of value, directly or indirectly, to any foreign government official, which includes any officer, employee, political candidate or any person acting in an official capacity for or on behalf of any agency, instrumentality, department, subdivision, or other body of any national, state, or local government, for the ~~design~~purpose of influencing the foreign official in his or her official capacity, ~~development~~inducing ~~and~~the ~~commercialization~~foreign official to do or omit to do an act in violation of ~~new~~his or her lawful duty, or to secure any improper advantage in order to obtain or retain business or to otherwise seek favorable treatment. In many countries in which we operate or sell our products, the healthcare professionals with whom we interact may be considered to be foreign government officials for purposes of the FCPA. The FCPA’s Accounting Provisions separately require that publicly traded companies make and keep books, records and accounts, which in reasonable detail, accurately and fairly reflect the transactions and dispositions of the company’s assets and devise and maintain a system of internal controls sufficient to assure management’s control, authority, and responsibility over the company’s assets;

~~Established~~· ~~competitors~~the ~~may~~European ~~invest~~Union’s ~~heavily~~General toData ~~quickly~~Protection ~~discover~~Regulation and ~~develop~~implementing ~~novel~~laws ~~compounds~~in ~~that~~its ~~could~~member ~~make~~states ~~our~~govern ~~product~~the ~~candidates~~collection ~~obsolete.~~and Inprocessing ~~addition~~of residents’ personal data and, ~~any~~among ~~new~~other ~~product~~requirements, ~~that~~imposes ~~competes~~certain ~~with~~consent anand ~~approved~~data ~~product~~access ~~must~~rights. ~~demonstrate~~Such ~~compelling~~laws ~~advantages~~may inimpact ~~efficacy,~~our ~~convenience,~~ability ~~tolerability~~to conduct clinical trials that involve personal data and ~~safety~~engage in ~~order~~other toactivities ~~overcome~~that ~~price~~require ~~competition~~the ~~and~~processing toof bepersonal ~~commercially~~data. ~~successful~~Outside of the U.S. Ifand wethe European Union, there are ~~not~~numerous ~~able~~other tojurisdictions ~~compete~~that ~~effectively~~have ~~against~~their ~~our~~own ~~competitors~~privacy and information security laws, ~~our~~and ~~business~~new ~~will~~laws ~~not~~and ~~grow~~regulations are being considered and/or enacted globally, which may affect our ~~financial~~ability ~~condition~~to collect, process, and ~~operations~~store ~~will~~their ~~suffer.~~residents’ personal data; and

If· weanalogous ~~fail~~anti-kickback, tofraud ~~attract~~ and ~~keep~~abuse ~~senior management~~ and ~~key~~healthcare ~~scientific~~laws and ~~marketing~~regulations ~~personnel,~~in weforeign ~~may be unable to successfully develop our product candidates, conduct our clinical trials and commercialize our product candidates~~countries.

~~Our~~The ~~success~~ACA ~~depends~~broadened inthe ~~part~~reach onof ~~our~~fraud ~~continued~~and ~~ability~~abuse tolaws ~~attract~~by, ~~retain~~among other ~~and~~things, ~~motivate~~amending ~~highly~~the ~~qualified~~intent ~~management,~~requirement ~~clinical~~of ~~and~~the ~~scientific~~federal ~~personnel.~~Anti-Kickback WeStatute ~~are~~and ~~highly~~the ~~dependent~~applicable ~~upon~~criminal ~~our~~healthcare ~~senior~~fraud statutes ~~management~~contained aswithin ~~well~~42 asU.S.C. ~~other~~Section 1320a-7b. ~~employees,~~Pursuant ~~consultants~~to ~~and~~the ~~scientific~~statutory ~~and~~amendment, ~~medical~~a ~~collaborators.~~person Asor ofentity ~~March 15,~~no ~~2019,~~longer weneeds to ~~had~~have 92actual ~~full-time~~knowledge ~~employees,~~of ~~which~~this ~~may~~statute ~~make~~or usspecific ~~more~~intent ~~reliant~~to onviolate ~~our~~it ~~individual~~in ~~employees~~order ~~than~~to ~~companies~~have ~~with~~committed a ~~greater~~violation. ~~number~~In ofaddition, the ~~employees.~~ACA ~~Although~~provides ~~none~~that ofthe ~~these~~government ~~individuals~~may ~~has~~assert ~~informed~~that usa toclaim ~~date~~including ~~that~~items he or ~~she~~services ~~intends~~resulting tofrom ~~retire~~a orviolation ~~resign~~of in the ~~near~~federal Anti-Kickback ~~future,~~Statute ~~the~~constitutes ~~loss~~a offalse ~~services~~or offraudulent ~~any~~claim for purposes of ~~these~~the ~~individuals~~civil orFalse ~~one~~Claims Act or ~~more~~the ofcivil ~~our~~monetary penalties ~~other~~statute. ~~members~~Many ofstates ~~senior~~have ~~management~~adopted ~~could~~laws ~~delay~~similar orto ~~prevent~~ the ~~successful~~federal ~~development~~Anti-Kickback Statute, some of ~~our~~which ~~product~~apply ~~pipeline,~~to ~~completion~~the referral of ~~our~~patients ~~ongoing~~for ~~and~~healthcare ~~future~~items ~~clinical~~or ~~trials~~services orreimbursed ~~the~~by ~~commercialization~~any ~~and~~source, ~~successful~~not ~~marketing~~only ~~launch~~the ofMedicare ~~our~~and ~~product~~Medicaid ~~candidates~~programs.

Although we have not historically experienced unique difficulties attracting and retaining qualified employees, we could experience such problems in the future. For example, competition for qualified personnel in the biotechnology and pharmaceuticals field is intense. We will need to hire additional personnel as we expand our clinical development and commercial activities. We may not be able to attract and retain quality personnel on acceptable terms.56

InEfforts ~~addition,~~to weensure ~~rely~~that onour ~~consultants~~business ~~and~~arrangements ~~advisors,~~with ~~including~~third parties ~~scientific~~will comply with applicable healthcare laws and ~~clinical~~regulations ~~advisors,~~will toinvolve ~~assist~~substantial uscosts. inIt ~~formulating~~is possible that governmental authorities will conclude that our ~~research~~business ~~and~~practices ~~development~~do not comply with current or future statutes, regulations or case law involving applicable fraud and ~~commercialization~~abuse ~~strategy.~~or ~~Our~~other ~~consultants~~healthcare laws and ~~advisors~~regulations. ~~may~~If ~~also~~our operations are found to be ~~engaged~~in ~~with~~violation ~~companies~~of any of these laws or any other ~~than~~governmental regulations that may apply to us, ~~and~~we may ~~have~~be ~~commitments~~subject ~~under~~to ~~consulting~~significant civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid, and the curtailment or ~~advisory~~restructuring ~~contracts~~of ~~with~~our operations. If any of the physicians or other providers or entities ~~that~~with ~~may~~whom ~~limit~~we ~~their~~expect ~~availability~~to do business are found to usbe not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusion from government-funded healthcare programs.

44If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business.

~~Table~~We and our suppliers are subject to numerous environmental, health and safety laws and regulations, including those governing laboratory procedures and the handling, use, storage, treatment and disposal of ~~Contents~~hazardous materials and wastes. Our operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our operations also release hazardous waste. We generally contract with third parties for the disposal of these materials and wastes. We cannot eliminate the risk of release, contamination or injury from these materials. In the event of release, contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.

IfAlthough we maintain workers’ compensation insurance to cover us for costs and expenses that we may incur due to injuries to our employees orresulting ~~third~~from ~~parties~~the ~~acting~~use onof ~~our~~hazardous ~~behalf~~materials, this ~~commit~~insurance ~~fraud~~may not provide adequate coverage against potential liabilities. We do not maintain insurance for environmental liability or ~~other~~toxic ~~misconduct,~~tort ~~including~~claims ~~noncompliance~~that ~~with~~may ~~regulatory~~be ~~standards~~asserted ~~and~~against ~~requirements,~~us in connection with our ~~business~~storage ~~may~~or ~~experience~~disposal ~~serious~~of ~~adverse~~biological, ~~consequences~~hazardous or radioactive materials.

WeIn ~~are~~addition, ~~exposed~~we ~~to the risk of fraud or other misconduct by employees~~ and ~~third parties acting on~~ our ~~behalf.~~suppliers ~~Misconduct~~may byincur ~~employees~~substantial orcosts in ~~third~~order ~~parties could include intentional failures~~ to comply with ~~FDA~~current ~~regulations,~~or tofuture ~~provide accurate information to the FDA~~environmental, tohealth ~~comply with manufacturing standards we have established, to comply with federal~~ and ~~state~~safety ~~healthcare fraud and abuse~~ laws and regulations,. toThese ~~report~~current ~~financial information~~ or ~~data~~future ~~accurately or to disclose unauthorized activities to us. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive~~ laws and regulations ~~intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations~~ may ~~restrict~~impair or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our ~~reputation. We have adopted a Code of Business Conduct and Ethics~~research, ~~but~~development ~~it is not always possible to identify and deter employee and third-party misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown~~ or ~~unmanaged~~production ~~risks~~efforts. orFailure ~~losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure~~ to becomply ~~in compliance~~ with ~~such~~these laws orand regulations. Ifalso may ~~any~~result ~~such actions are instituted against us, and we are not successful~~ in ~~defending~~substantial ~~ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant~~ fines, penalties, or other sanctions~~, and exclusion from government-funded healthcare programs~~.

WeOur ~~may~~internal ~~encounter~~computer ~~difficulties~~systems, inor ~~managing~~those of our ~~growth~~third-party CMOs, ~~and~~CROs ~~expanding~~or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our ~~operations~~product ~~successfully~~candidates’ development programs.

AsDespite wethe ~~seek~~implementation toof ~~advance~~security measures, our ~~product~~internal computer ~~candidates~~systems ~~through~~and ~~the~~those ~~development~~of ~~process,~~our wethird-party ~~will~~CMOs, ~~need~~CROs toand ~~expand~~other ~~our~~contractors ~~development,~~and ~~regulatory,~~consultants ~~manufacturing,~~are ~~marketing~~vulnerable ~~and~~to ~~sales~~damage ~~capabilities~~from orcomputer viruses, ~~contract~~unauthorized ~~with~~access, ~~third-parties~~theft, tonatural ~~provide~~disasters, ~~these~~terrorism, ~~capabilities~~war ~~for~~and ~~us.~~telecommunication Asand ~~our~~electrical ~~operations~~failures. ~~expand,~~While we have ~~expect~~not ~~that~~experienced weany ~~will~~such ~~need~~system ~~to identify~~failure, ~~commence~~accident ~~and~~or ~~manage~~security ~~additional~~breach ~~relationships~~to ~~with~~date, ~~various~~if ~~strategic~~such ~~partners,~~an ~~qualified~~event ~~suppliers,~~were ~~manufacturers~~to occur and ~~other~~cause ~~third-parties.~~interruptions in ~~Future~~our ~~growth~~operations, ~~will~~it ~~impose~~could ~~significant~~result ~~added~~in ~~responsibilities~~a onmaterial ~~members~~disruption of ~~management~~our programs. ~~Our~~For ~~future~~example, ~~financial~~the ~~performance~~loss ~~and~~of ~~our~~clinical ~~ability~~trial todata ~~commercialize~~for our product candidates ~~and~~could toresult ~~compete~~in ~~effectively~~delays ~~will depend,~~ in ~~part, on~~ our ~~ability~~regulatory toapproval ~~manage~~efforts ~~any~~and ~~future~~significantly ~~growth~~increase ~~effectively.~~our Tocosts ~~that~~due ~~end,~~to werecovering or ~~must~~reproducing bethe ~~able~~data. toTo ~~manage~~the ~~our~~extent ~~development~~that ~~efforts~~any ~~and~~disruption ~~clinical~~or ~~trials~~security ~~effectively~~breach ~~and~~results ~~hire,~~in ~~train~~a ~~and~~loss ~~integrate~~of ~~additional~~or ~~management,~~damage ~~administrative,~~to ~~sales,~~our ~~and~~data ~~marketing~~or ~~personnel. The hiring~~applications, loss ~~training and integration~~ of ~~new~~or ~~employees~~damage ~~may~~to beother ~~more~~data ~~difficult, costly and/~~or ~~time-consuming~~applications ~~for~~relating usto ~~because~~our wetechnology ~~have~~or ~~fewer~~product ~~resources~~candidates, ~~than~~or ainappropriate ~~larger~~disclosure ~~organization.~~or theft Weof ~~may~~confidential ~~not~~or beproprietary ~~able to accomplish these tasks~~information, orwe tocould ~~accomplish~~incur ~~them~~liabilities ~~in a timely fashion,~~ and ~~our~~the ~~failure~~further todevelopment ~~accomplish any~~ of ~~them~~our product candidates could ~~prevent~~be ~~us from successfully growing our company~~delayed.

~~We expect to expand our development, regulatory and sales and marketing capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.~~57

InEurope ~~connection~~has ~~with~~enacted ~~our~~a ~~commercial~~new ~~launch~~data ofprivacy ~~ELZONRIS and international expansion~~regulation, ~~we expect to experience significant growth in~~ the General ~~number~~Data ofProtection ~~our employees and the scope of our operations~~Regulation, particularly in the areas of drug development, regulatory affairs, quality, commercial compliance, medical affairs, and sales and marketing. For example, we plan to hire additional personnel in connection with our commercial launch of ELZONRIS in the United States and Europe and preparation for potential regulatory filings for ELZONRIS in other markets. To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel. Due to the limited experience of our management team in managing a ~~company~~violation ~~with this anticipated growth, we may not be able to effectively manage the expansion~~ of ~~our~~which ~~operations~~could orsubject ~~recruit~~us ~~and train additional qualified personnel. The physical expansion of our operations may lead~~ to significant ~~costs and may divert our management and business development resources~~fines. ~~We may not be able to effectively manage the expansion of our operations, which could delay the execution of our business plans or disrupt our operations.~~

IfIn ~~product~~May 2018, ~~liability~~a ~~lawsuits~~new privacy regime, the General Data Protection Regulation, or GDPR, took effect across all member states of the European Economic Area. The new regime increases our obligations with respect to clinical trials conducted in the member states by expanding the definition of personal data to include coded data, and requiring changes to informed consent practices and more detailed notices for clinical trial subjects and investigators. In addition, it increases the scrutiny that clinical trial sites located in the member states should apply to transfers of personal data from such sites to countries that are ~~brought~~considered ~~against~~to uslack an adequate level of data protection, wesuch ~~may~~as ~~incur~~the United States. The regime imposes substantial ~~liabilities~~fines ~~and~~for ~~may~~breaches of data protection requirements, which can be ~~required~~up to ~~limit~~four ~~commercialization~~percent of global turnover or 20 million Euros, whichever is greater, and it also confers a private right of action on data subjects for breaches of data protection requirements. Compliance with these directives is a rigorous and time-intensive process that may increase our ~~product~~cost ~~candidates~~of doing business, and the failure to comply with these laws could subject us to significant fines.

WeRisks ~~face~~Related an inherent risk of product liability as a result of the clinical testing and commercial sale of our product candidates and and products. For example, we may be sued if any product we develop allegedly causes or contributes to anOur ~~injury~~Dependence oron isThird ~~found~~Parties ~~to be otherwise defective during product testing, clinical study, clinical use, manufacturing, marketing or sale. Any such product liability claims may include allegations of defects~~ in ~~manufacturing, defects in design, failure to warn of dangers inherent in~~ the ~~product, negligence, strict liability and a breach of warranties~~U. ~~Fraud-based claims as well as claims made pursuant to state consumer protection acts are also a possibility~~S. If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of our product candidates. Even successful defense would require significant financial and ~~management resources. Regardless of the merits or eventual outcome, liability claims may result in:~~Abroad

~~· decreased~~Third ~~demand~~parties ~~for~~have conducted clinical trials of our product candidates in the past, and our ability to influence the design and conduct of such trials was limited. Our current and future corporate-sponsored trials will also require us to rely on various third parties. Any failure by a third-party to meet its obligations with respect to the clinical and regulatory development of our product candidates may delay or ~~products~~impair ~~that~~our weability ~~may~~to ~~develop;~~obtain regulatory approval for our products.

45We are currently advancing our clinical-stage product candidates through multiple corporate-sponsored clinical trials under corporate-sponsored INDs and through investigator sponsored trials. Prior to sponsoring our INDs for our product candidates, faculty members at academic institutions and other companies may have conducted and sponsored the INDs and clinical trials relating to our drug candidates. As such, we did not control the design or conduct of any trials conducted prior to the initiation of our corporate-sponsored INDs, and it is possible that the FDA will not view these previous trials as providing adequate support for future clinical trials or regulatory filings.

~~Table~~In addition, we have relied on contractual arrangements with academic institutions and investigators that provide us certain information rights with respect to the completed investigator-sponsored trials, including access to, and the ability to use and reference the data, including for our own regulatory filings, resulting from the completed trials. If these obligations are breached by the investigators or institutions, or if the data prove to be inadequate, then our ability to conduct our planned corporate-sponsored clinical trials may be adversely affected. Additionally, the FDA may disagree with our interpretation of ~~Contents~~the adequacy of the preclinical, manufacturing, and/or clinical data from these studies. If so, the FDA may require us to obtain and submit additional preclinical, manufacturing, and/or clinical data relating to our planned trials and/or may not accept such additional data as adequate for our regulatory filings.

~~· injury to our reputation;~~58

~~· withdrawal~~We ofrely on, and expect to continue to rely on, third parties to monitor, support, conduct and/or oversee clinical ~~trial~~trials ~~participants~~of our product candidates and, ~~inability~~in some cases, to ~~enroll~~maintain ~~future~~regulatory files for our product candidates. If we are not able to maintain or secure agreements with such third-parties on acceptable terms to monitor, support, conduct and/or oversee these clinical ~~trial~~trials, ~~participants;~~if these third-parties do not perform their services as required, or if these third-parties fail to timely transfer any regulatory information held by them to us, we may not be able to obtain regulatory approval for, or commercialize, our product candidates.

~~· costs~~To conduct our preclinical and clinical studies, we rely on academic institutions, CROs, hospitals, clinics and other third-party collaborators who are outside our direct control, which limits our control over the overall conduct of these studies and the ability to ~~defend~~successfully complete them. In our corporate-sponsored trials and investigator sponsored trials of ELZONRIS and our clinical drug candidates, we have continued to engage various third parties. If we are unable to maintain or enter into agreements with these third parties on acceptable terms, or if any such engagement is terminated, we may be unable to enroll patients on a timely basis or otherwise conduct our trials in the ~~related~~manner ~~litigation;~~we anticipate. In addition, there is no guarantee that these third parties will devote adequate time and resources to our studies or perform as required by contract or in accordance with regulatory requirements. If these third-parties fail to meet expected deadlines, fail to adhere to protocols or fail to act in accordance with regulatory requirements or our agreements with them, or if they otherwise perform in a substandard manner or in a way that compromises the quality or accuracy of their activities or the data they obtain, then trials of our product candidates may be extended, delayed, compromised or terminated, and as a result we may not be able to commercialize our product candidates.

~~· a~~We ~~diversion~~may ofnot ~~management’s~~be ~~time~~successful in establishing and maintaining strategic partnerships, which could adversely affect our ~~resources;~~ability to develop and commercialize products.

~~· substantial~~We ~~monetary~~may ~~awards~~seek to ~~trial~~enter ~~participants~~into strategic partnerships in the future, including alliances with other biotechnology or ~~patients;~~pharmaceutical companies, to enhance and accelerate the development and commercialization of our products in territories outside the United States. We face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. Moreover, we may not be successful in our efforts to establish a strategic partnership or other alternative arrangements for any future product candidates and programs because our research and development pipeline may be insufficient, our product candidates and programs may be deemed to be at too early a stage of development for collaborative effort, and/or third-parties may not view our product candidates and programs as having the requisite potential to demonstrate safety and efficacy. Even if we are successful in our efforts to establish strategic partnerships, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such strategic partnerships if, for example, development or approval of a product candidate is delayed or sales of an approved product are disappointing.

~~· product~~If ~~recalls,~~we ~~withdrawals~~ultimately ordetermine ~~labeling~~that entering into strategic partnerships is in our best interest but either fail to enter into, ~~marketing~~are delayed in entering into, or ~~promotional~~fail ~~restrictions;~~to maintain such strategic partnerships:

· ~~loss~~ the development of ~~income~~certain of our current or future product candidates may be terminated or delayed;

· ~~the~~ ~~inability~~our cash expenditures related to ~~commercialize~~development of certain of our current or future product candidates; would increase significantly and we may need to seek additional financing;

· a ~~decline~~we inmay ~~our~~be ~~stock~~required ~~price.~~to hire additional employees or otherwise develop expertise, such as sales and marketing expertise, for which we have not budgeted;

~~Our~~· inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we ~~develop. Although we maintain liability insurance, any claim that~~ may bebear ~~brought~~all ~~against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess~~ of the ~~limits~~risk ofrelated ~~our insurance coverage. Our insurance policies also have various exclusions, and we may be subject~~ to athe ~~product~~development ~~liability~~of ~~claim for which we have no coverage. We will have to pay~~ any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such ~~amounts.~~product candidates;

~~Our~~· ~~relationships with customers and third-party payors in~~ the ~~United~~competitiveness ~~States~~of ~~and~~any inproduct ~~foreign~~candidate ~~jurisdictions~~that ~~will~~is becommercialized ~~subject to applicable anti-kickback, fraud and abuse and other healthcare laws and regulations, which~~ could ~~expose~~be usreduced; ~~to criminal, civil or administrative sanctions, contractual damages, reputational harm~~ and ~~diminished profits and future earnings.~~

~~Healthcare~~· providers, physicians and third-party payors in the United States and in foreign jurisdictions play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval. Our future arrangements with ~~third-party~~respect ~~payors and customers may expose us~~ to ~~broadly~~our ~~applicable~~platform ~~fraud~~technology, ~~and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market~~StemScreen®, ~~sell and distribute our products for which~~ we ~~obtain~~may ~~marketing~~not ~~approval.~~realize ~~Restrictions~~its ~~under~~potential ~~applicable~~as ~~federal,~~a ~~state~~means ~~and~~of ~~foreign~~identifying ~~healthcare laws~~ and ~~regulations~~validating ~~include~~new ~~the~~cancer ~~following:~~therapies.

· the federal healthcare Anti-Kickback Statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal and state healthcare programs such as Medicare and Medicaid;59

~~· the~~We ~~federal~~rely ~~False~~on ~~Claims~~third-party ~~Act~~manufacturers ~~imposes~~to ~~civil~~produce ~~penalties,~~and ~~against~~supply our ~~individuals~~commercial orproducts, ~~entities~~as ~~for~~well ~~knowingly~~as ~~presenting,~~our orclinical ~~causing~~and topreclinical beproduct ~~presented,~~candidates. toAny ~~the~~failure ~~federal~~by ~~government,~~a ~~claims~~third-party ~~for~~manufacturer to ~~payment~~produce ~~that~~supplies ~~are~~for ~~false~~us ormay ~~fraudulent~~delay or ~~making~~impair aour ~~false~~ability ~~statement~~ to ~~avoid,~~initiate ~~decrease~~ or ~~conceal~~complete anour ~~obligation~~clinical totrials, ~~pay~~commercialize ~~money~~our ~~to the federal government and also includes provisions allowing for private~~products, or ~~civil~~continue ~~whistleblower~~to orsell ~~“qui~~our ~~tam”~~approved ~~actions;~~products.

~~· the~~We ~~federal~~do ~~Health~~not ~~Insurance~~currently ~~Portability~~own or operate any manufacturing facilities, and ~~Accountability~~we ~~Act~~lack ofsufficient ~~1996~~internal ~~(“HIPAA”)~~staff and infrastructure to produce commercial supplies, as ~~amended~~well byas ~~the~~clinical ~~Health~~and ~~Information~~preclinical ~~Technology~~product candidate ~~for~~supplies, ~~Economic~~ourselves. As a result, we work with third-party CMOs to produce and ~~Clinical~~test ~~Health~~our ~~Act~~products ~~(“HITECH”),~~and ~~imposes~~clinical ~~criminal~~product candidates in acceptable quality and ~~civil~~quantity ~~liability~~for our ongoing and future clinical trials, as well as for ~~executing~~commercial asupply. ~~scheme~~If we are unable to ~~defraud~~maintain ~~any~~such ~~healthcare~~third-party ~~benefit~~manufacturing ~~program.~~sources, ~~HIPAA~~or fail to do so on commercially reasonable terms or on a timely basis, we may not be able to successfully produce, develop, and ~~HITECH~~market ~~also~~ELZONRIS ~~regulate~~or ~~the~~our ~~use~~clinical drug candidates or may be delayed in doing so. We purchase and ~~disclosure~~plan ofto ~~identifiable~~purchase ~~health~~immunostimulants ~~information~~used bywith ~~healthcare~~SL-701 ~~providers,~~from ~~health~~third ~~plans~~parties. Whereas GM-CSF and ~~healthcare~~Imiquimod are ~~clearinghouses~~commercially available products, poly-ICLC (Hiltonol®) is a development stage candidate and ~~impose~~not ~~obligations,~~commercially ~~including~~available. We ~~mandatory~~do ~~contractual~~not ~~terms,~~have ~~with~~a ~~respect~~right to ~~safeguarding~~manufacture ~~the~~poly-ICLC ~~privacy,~~directly ~~security~~or ~~and~~through ~~transmission~~our ofthird-party ~~identifiable~~CMOs, ~~health~~and ~~information~~are aswholly ~~well~~dependent ason ~~requiring~~a ~~notification~~third-party manufacturer of ~~regulatory~~poly-ICLC ~~breaches~~for clinical supply. ~~HIPAA~~This ~~and~~third-party ~~HITECH~~manufacturer ~~violations~~currently ~~may~~has ~~prompt~~a ~~civil~~limited supply and ~~criminal~~may ~~enforcement~~be ~~actions~~unable asto provide ~~well~~adequate aspoly-ICLC ~~enforcement~~to byus ~~state~~in ~~attorneys~~the ~~general;~~future.

46We also expect to rely upon third parties to produce and test drug substance and drug product required for the clinical trials and commercial supply of our product and product candidates. If we are unable to arrange for third-party manufacturing sources, or to do so on commercially reasonable terms or on a timely basis, we may not be able to complete the development of such other product candidates or market those that are approved. Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured product candidates ourselves, including reliance on the third-party for regulatory compliance and quality assurance, the possibility of breach of the manufacturing agreement by the third-party because of factors beyond our control (including a failure to synthesize and manufacture our product candidates in accordance with our product specifications), and the possibility of termination or nonrenewal of the agreement by the third-party, based on its own business priorities, at a time that is costly or damaging to us. We will be dependent on the ability of these third-party manufacturers to produce adequate supplies of drug product to support our clinical development programs, our supply needs for ELZONRIS, and future commercialization of any product candidates for which we may receive regulatory approval. In addition, the FDA and other regulatory authorities require that our products and product candidates be manufactured according to CGMPs, and similar standards for products manufactured for markets outside the U.S. Any failure by our third-party manufacturers to comply with CGMPs or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of product or product candidates of acceptable quality in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval for trial initiation or marketing of any of our product candidates or commercial products. In addition, such failures could be the basis for action by the FDA to withdraw product approvals previously granted to us and for other regulatory action, which could result in or lead to recall, seizure, import alerts, fines, imposition of operating restrictions, total or partial suspension of production, injunctions, consent decrees, or civil or criminal sanctions.

~~Table~~Any adverse developments affecting our manufacturing operations or the operations of ~~Contents~~our third-party providers could result in a product shortage of clinical or commercial requirements, withdrawal of our product candidates or any approved products, shipment delays, lot failures or recalls. We may also have to write-off inventory and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts or seek more costly manufacturing alternatives. Each of these could have an adverse material impact on our business individually or in the aggregate.

· We rely on our third-party manufacturers to purchase from third-party suppliers the ~~federal~~materials ~~false~~necessary ~~statements~~to ~~statute~~produce ~~prohibits~~our ~~knowingly~~products, and ~~willfully~~product ~~falsifying,~~candidates ~~concealing~~for orour ~~covering~~clinical upstudies. There are a ~~material~~small ~~fact~~number of suppliers for certain capital equipment and materials that we use to manufacture and test our drugs. Such suppliers may not sell these materials to our third-party manufacturers at the times we need them or ~~making~~on commercially reasonable terms. We do not have control over the process or timing of the acquisition of these materials by our third-party manufacturers. Moreover, we currently do not have any ~~materially~~agreements ~~false~~for ~~statement~~the commercial production of these materials. Although we generally do not begin a clinical trial unless we believe we have a sufficient supply of a product candidate to complete the clinical trial, any significant delay in ~~connection~~the supply ~~with~~of a product candidate or the ~~delivery~~material components thereof for a clinical trial, including an ongoing clinical trial, due to the need to replace a third-party manufacturer, could considerably delay completion of our clinical studies, product testing and potential regulatory approval of our product candidates. If our third-party manufacturers or ~~payment~~we are unable to purchase these materials after regulatory approval has been obtained for ~~healthcare~~our ~~benefits~~product candidates, ~~items~~the commercial launch of our product candidates would be delayed or ~~services;~~there would be a shortage in supply, which would impair our ability to generate revenues from the sale of our products or product candidates.

· the federal transparency requirements under the Affordable Care Act, or ACA, commonly referred to as the Sunshine Act, requires manufacturers of drugs, devices, biologics and medical supplies to report to the Department of Health and Human Services information related to U.S.-licensed physician and teaching hospital payments and other transfers of value including research payments and ownership and investment interests;60

~~· analogous~~We ~~state~~are ~~laws~~working with our third-party manufacturers to optimize the manufacturing processes for our products and ~~regulations~~product candidates, ~~such~~including asrelated ~~state~~drug ~~anti-kickback~~substances, so that these products and ~~false~~product ~~claims~~candidates ~~laws~~may be routinely produced in adequate quantities of adequate quality, ~~may~~and ~~apply~~at toan ~~sales~~acceptable orcost, ~~marketing~~to ~~arrangements~~support our clinical trials and ~~claims~~commercialization ~~involving~~of ~~healthcare~~products ~~items~~that ormight ~~services~~be ~~reimbursed~~approved. byOur ~~non~~third-~~governmental~~party manufacturers may not be able to control batch-to-batch variability below an acceptable threshold, increasing the risk of batch failures, which could cause significant delays and increased costs to our programs. Our third-party ~~payors~~manufacturers may not be able to manufacture our products or product candidates at a cost, ~~including~~or ~~private~~in ~~insurers~~quantities, or in a timely manner necessary, to develop and ~~some~~commercialize ~~state~~them. ~~laws~~If we successfully commercialize any of our product candidates, we may be required to establish or access large-scale commercial manufacturing capabilities, and may require ~~pharmaceutical~~different ~~companies~~technologies to ~~comply~~manufacture ~~with~~these ~~the~~products. ~~pharmaceutical~~In ~~industry’s~~addition, ~~voluntary~~assuming ~~compliance~~that ~~guidelines~~our drug development pipeline increases and ~~the~~matures, ~~relevant~~we ~~compliance~~will ~~guidance~~have ~~promulgated~~a bygreater ~~the~~need ~~federal~~for ~~government~~clinical intrial ~~addition~~and tocommercial ~~requiring~~manufacturing ~~drug~~capacity. ~~manufacturers~~To meet our projected needs for commercial manufacturing, third parties with whom we currently work may need to ~~report~~increase ~~information~~their ~~related~~scale of production and/or we may need to ~~payments~~secure additional suppliers with appropriate technologies to ~~physicians~~support ~~and~~our ~~other~~new ~~healthcare~~product ~~providers~~candidates. If our projected needs for commercial manufacturing are not accurate, or ~~marketing~~we ~~expenditures;~~do not obtain regulatory approval of new products or additional indications for existing products or additional delivery systems, or are significantly delayed or limited in doing so, our revenue may be adversely affected, we may experience surplus inventory and we may be required to write down certain assets.

~~· the~~Business ~~U.S.~~or ~~Foreign~~economic ~~Corrupt~~disruptions ~~Practices~~or ~~Act~~global ~~(FCPA)~~health ~~and~~concerns could ~~other~~seriously ~~anti-corruption~~harm ~~laws and regulations pertain to~~ our ~~financial~~development ~~relationships~~efforts and ~~interactions~~increase ~~with~~our ~~foreign~~costs ~~government officials. The FCPA prohibits U.S. companies~~ and their employees, officers, and representatives from paying, offering to pay, promising, or authorizing the payment of anything of value to any foreign government official, government staff member, political party, or political candidate to obtain or retain business or to otherwise seek favorable treatmentexpenses. ~~In many countries in which we operate or sell our products, the healthcare professionals with whom we interact may be deemed to be foreign government officials for purposes of the FCPA;~~

~~· the~~Broad-based ~~EU’s~~business ~~General~~or ~~Data~~economic ~~Protection~~disruptions could ~~Regulation~~adversely ~~(GDPR)~~affect ~~and~~our ~~implementing~~ongoing ~~laws~~or inplanned ~~the~~research EUand ~~member~~development, ~~states~~clinical, ~~govern~~or ~~the~~commercial ~~collection~~activities. ~~and~~For ~~processing~~example, ofin EUDecember 2019 an ~~residents’~~outbreak ~~personal~~of ~~data~~a ~~and,~~novel ~~among~~strain ~~other~~of ~~requirements,~~coronavirus originated ~~imposes~~in ~~certain~~Wuhan, ~~consent~~China, and ~~data~~has ~~access~~since ~~rights.~~spread ~~Such~~to ~~laws~~a ~~may~~number ~~impact~~of ~~our~~other ~~ability~~countries, including tothe ~~conduct~~United ~~clinical~~States. ~~trials~~To ~~that~~date, ~~involve~~this EUoutbreak ~~personal~~has ~~data~~already ~~and~~resulted ~~engage~~ in ~~other~~extended ~~activities~~shutdowns ~~that~~of ~~require~~certain businesses in the ~~processing~~Wuhan region ofand EUhas ~~personal~~had ~~data.~~ripple ~~Outside~~effects ofto businesses around the Uworld.S. ~~and~~The ~~the~~outbreak ~~EU,~~may ~~there~~result ~~are~~in ~~numerous~~additional ~~other~~or ~~jurisdictions~~more ~~that~~extensive ~~have~~travel restrictions, ~~their~~closures, ~~own~~disruptions ~~privacy~~of ~~and~~businesses ~~information~~or ~~security~~facilities ~~laws,~~in ~~and~~China ~~new~~or ~~laws~~other ~~and~~affected ~~regulations~~regions ~~are~~around ~~being~~the ~~considered~~world ~~and/~~or ~~enacted~~lead ~~globally~~to social, ~~which~~economic, ~~may~~political ~~affect~~or ~~our~~labor ~~ability~~instability toin ~~collect,~~the ~~process,~~affected ~~and~~areas ~~store~~may ~~their~~impact ~~residents~~our suppliers’ ~~personal~~or ~~data;~~our ~~and~~customers’ operations.

~~· analogous~~Global ~~anti-kickback~~epidemics, ~~fraud~~such as the coronavirus, could also negatively affect the hospitals and ~~abuse~~clinical sites in which we conduct any of our clinical trials, which could have a material adverse effect on our business and ~~healthcare~~our ~~laws~~results of operation and ~~regulations~~financial condition. We cannot presently predict the scope and severity of any potential business shutdowns or disruptions, but if we or any of the third parties with whom we engage, including the suppliers, clinical trial sites, regulators and other third parties with whom we conduct business, were to experience shutdowns or other business disruptions, our ability to conduct our business in ~~foreign~~the ~~countries~~manner and on the timelines presently planned could be materially and negatively impacted.

The ACA broadened the reach of fraud and abuse laws by, among other things, amending the intent requirement of the federal Anti-Kickback Statute and the applicable criminal healthcare fraud statutes contained within 42 U.S.C. Section 1320a-7b. Pursuant to the statutory amendment, a person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In addition, the ACA provides that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act or the civil monetary penalties statute. Many states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, not only the Medicare and Medicaid programs.61

~~Efforts~~We toare ~~ensure~~currently ~~that~~sole ~~our~~sourced ~~business~~for ~~arrangements~~supply ~~with~~of ~~third-parties~~our ~~will~~drug ~~comply~~substance and ~~with~~drug ~~applicable~~product ~~healthcare~~for ~~laws~~each ~~and~~of ~~regulations~~our ~~will~~product ~~involve~~and ~~substantial~~product ~~costs~~candidates. ItAny isproblems ~~possible~~experienced ~~that~~by ~~governmental authorities will conclude that~~ our ~~business~~third-party ~~practices~~manufacturers ~~do not comply with current~~ or ~~future~~their vendors ~~statutes,~~could ~~regulations~~result orin ~~case~~a ~~law~~delay ~~involving applicable fraud and abuse~~ or ~~other~~interruption ~~healthcare laws and regulations. If our operations are found to be~~ in ~~violation~~the ofsupply ~~any~~ of ~~these~~our ~~laws~~products or ~~any~~product ~~other~~candidates ~~governmental regulations that may apply~~ to us, weuntil ~~may be subject to significant civil, criminal and administrative penalties, damages, fines, exclusion from government funded healthcare programs, such as Medicare and Medicaid, and~~ the ~~curtailment~~third-party manufacturer or ~~restructuring~~its ofvendor ~~our~~cures ~~operations. If any of~~ the ~~physicians~~problem or ~~other~~until ~~providers or entities with whom~~ we ~~expect~~locate toand doqualify ~~business~~an ~~are~~alternative ~~found~~source toof bemanufacturing ~~not~~and ~~in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusion from government-funded healthcare programs~~supply.

IfThe wethird-party ~~fail~~manufacturers of our product and product candidates require specialized equipment and utilize complicated production processes that would be difficult, time-consuming and costly to duplicate. ~~comply~~Thus, ~~with~~we ~~environmental~~have multiple third-party manufacturers who supply our drug product candidates, ~~health~~one third-party manufacturer for each of our product and ~~safety~~product ~~laws~~candidates. Because of this arrangement, there is a greater risk that issues in execution or changes in business focus and/or ~~regulations~~product risk assessments at a third-party manufacturer could cause delays in the clinical development or manufacture of a product or product candidate than if we used more than one third-party manufacturer for each product and product candidate. For each of our product and product candidates, we currently rely on third-party manufacturers to purchase from their third-party vendors the materials necessary to manufacture our product and product candidates for commercial supply and our clinical studies. Any prolonged disruption in a third-party manufacturer’s vendor’s ability to supply materials for our manufacturing could ~~become~~have ~~subject~~a significant negative impact on our third-party manufacturer’s ability to ~~fines~~manufacture orour ~~penalties~~product or ~~incur~~product candidates. This would cause us to seek additional third-party manufacturing contracts, thereby increasing, if applicable, our development costs and timelines, and any commercialization costs. In addition, our third-party manufacturers may experience problems not related to their vendors that could also have a ~~material~~significant ~~adverse~~negative ~~effect~~impact on their ability to manufacture our product and product candidates. This would cause us to seek additional third-party manufacturing contracts, thereby increasing, if applicable, our development costs and timelines and any commercialization costs. Moreover, third-party manufacturers and third-party laboratories performing analytical and other testing could receive inspection findings from regulatory authorities that require investigation and remediation, and this could result in business interruptions affecting the ~~success~~production of our product and product candidates. We may face losses related to the supply of drug substances, drug product, adjuvants and other components of the product due to third-party distribution and storage of such product. We may suffer losses due to third-party manufacturers’ shortages or supply shortages of their vendors. We may suffer losses as a result of business interruptions that exceed coverage under our manufacturers’ insurance policies. Events beyond our control, such as natural disasters, fire, sabotage or business accidents could have a significant negative impact on our operations by disrupting our product candidate development and commercialization efforts until our third-party manufacturers can repair their facilities or we can qualify alternate third-party contract manufacturers to assume this manufacturing role, which we may not be able to do on reasonable terms, if at all. In addition, if we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines and that they can successfully transfer our manufacturing processes to produce product of equivalent quality and quantity. FDA or other local health authority approval of any new manufacturer would also be required. The delays associated with the qualification of a new manufacturer or the requalification of an existing manufacturer could negatively affect our ability to develop product candidates or produce approved products in a timely manner. Any delay or interruption in our clinical studies or in the development, validation and commercialization of our product or product candidates could negatively affect our business.

WeBecause ~~and~~of our ~~suppliers~~reliance ~~are~~on ~~subject~~contract ~~to numerous environmental~~manufacturers, ~~health~~we ~~and~~may ~~safety~~choose to ~~laws~~maintain ~~and~~a ~~regulations,~~higher ~~including~~inventory ~~those governing laboratory procedures and the handling, use, storage, treatment and disposal~~ of ~~hazardous~~drug ~~materials~~product and/or ~~wastes.~~drug ~~Our~~substance ~~operations~~for ~~involve~~any ~~the use~~ of ~~hazardous~~our ~~and~~product ~~flammable~~candidates ~~materials,~~or ~~including~~approved ~~chemicals~~products ~~and~~than would ~~biological~~be ~~materials.~~necessary ~~Our~~if ~~operations~~we ~~also~~had ~~release~~direct ~~hazardous~~control ~~waste.~~of ~~We generally contract with third-parties for~~ the ~~disposal~~manufacturing ~~of these materials and wastes~~assets. ~~We cannot eliminate the risk~~

47To the extent we elect to enter into licensing or collaboration agreements to develop and commercialize our products or product candidates, our dependence on such relationships may adversely affect our business.

~~Table~~Our global commercialization strategy for certain of ~~Contents~~our product or product candidates may depend on our ability to enter into agreements with collaborators to obtain assistance and funding for the development and commercialization of these product or product candidates. Supporting diligence activities conducted by potential collaborators and negotiating the financial and other terms of a collaboration agreement are long and complex processes with uncertain results. Even if we are successful in entering into one or more collaboration agreements, collaborations may involve greater uncertainty for us, as we have less control over certain aspects of our collaborative programs than we do over our proprietary development and commercialization programs. We may determine that continuing to collaborate under the terms provided is not in our best interest, and we may terminate such collaboration. Our collaborators could delay or terminate their agreements, and our product or product candidates subject to collaborative arrangements may never be successfully commercialized.

of release, contamination or injury from these materials. In the event of release, contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines and penalties.62

~~Although~~Further, weour ~~maintain~~future ~~workers’~~collaborators ~~compensation~~may ~~insurance~~develop toalternative ~~cover~~products or uspursue ~~for~~alternative ~~costs~~technologies ~~and~~either ~~expenses~~on wetheir ~~may~~own ~~incur~~or ~~due~~in tocollaboration ~~injuries~~with toothers, including our ~~employees~~competitors, ~~resulting~~and ~~from~~ the ~~use~~priorities or focus of ~~hazardous~~our ~~materials~~collaborators may shift, ~~this~~so ~~insurance~~that ~~may~~our ~~not~~programs ~~provide~~receive ~~adequate~~less ~~coverage~~attention ~~against~~or ~~potential~~resources ~~liabilities.~~than Wewe dowould ~~not~~like, ~~maintain~~or ~~insurance~~they ~~for~~may be ~~environmental~~terminated ~~liability~~altogether. orAny ~~toxic~~such ~~tort~~actions ~~claims~~by ~~that~~our collaborators, may beadversely ~~asserted~~affect ~~against~~our usbusiness inprospects ~~connection~~and ability to earn income. In addition, we could have disputes with our ~~storage~~future collaborators, on issues such as the interpretation of terms in our agreements. Any such disagreements could lead to delays in the development or ~~disposal~~commercialization of ~~biological,~~any ~~hazardous~~potential products or ~~radioactive~~could result ~~materials~~in time-consuming and expensive litigation or arbitration, which might not be resolved in our favor.

InEven ~~addition,~~with respect to certain other products that we ~~and~~intend ~~our~~to commercialize ~~suppliers~~ourselves, we may ~~incur~~enter ~~substantial~~into ~~costs~~agreements inwith ~~order~~collaborators to ~~comply~~share ~~with~~in ~~current~~the orburden ~~future~~of ~~environmental,~~conducting ~~health~~clinical trials, manufacturing, and ~~safety~~marketing ~~laws~~our ~~and~~product ~~regulations~~candidates or products. ~~These~~In ~~current~~addition, orour ~~future~~ability ~~laws~~to ~~and~~apply ~~regulations~~our ~~may~~proprietary ~~impair~~technologies to ~~our~~develop ~~research,~~proprietary ~~development~~compounds orwill ~~production~~depend ~~efforts.~~on ~~Failure~~our ability to ~~comply~~establish and maintain licensing arrangements or other collaborative arrangements with ~~these~~the ~~laws~~holders ~~and~~of ~~regulations~~proprietary ~~also~~rights to such compounds. We may ~~result~~not inbe ~~substantial~~able ~~fines,~~to ~~penalties~~establish such arrangements on favorable terms or ~~other~~at ~~sanctions~~all, and our future collaborative arrangements might not be successful.

~~Our~~Risks ~~internal~~Related ~~computer~~to ~~systems,~~Our orIntellectual ~~those~~Property ~~of our third-party CMOs, CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product candidates’ development programs.~~Rights

~~Despite~~We ~~the~~could ~~implementation~~be ofunsuccessful security measures, our internal computer systems and those of our third-party CMOs, CROs and other contractors and consultants are vulnerable to damage from computer viruses, unauthorized access, theft, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any such system failure, accident or security breach to date, if such an event were to occur and cause interruptions in ~~our~~obtaining ~~operations,~~adequate itpatent protection ~~could result in a material disruption of our programs. For example, the loss of clinical trial data~~ for ~~our~~one ~~product candidates could result in delays in our regulatory approval efforts and significantly increase our costs to recover~~ or ~~reproduce~~more ~~the data. To the extent that any disruption or security breach results in a loss~~ of ~~or damage to~~ our ~~data~~products or ~~applications or other data or applications relating to our technology or~~ product candidates~~, or inappropriate disclosure or theft of confidential or proprietary information, we could incur liabilities and the further development of our product candidates could be delayed~~.

~~Europe~~Our ~~has~~commercial ~~enacted~~success awill ~~new~~depend ~~data~~in ~~privacy~~part ~~regulation~~on obtaining and maintaining patent protection and trade secret protection in the U.S. and other countries with respect to our product and product candidates or any future product candidate that we may license or acquire and the methods we use to manufacture them, as well as successfully defending these patents and trade secrets against third-party challenges. We seek to protect our proprietary position by filing patent applications in the ~~General~~United ~~Data~~States ~~Protection~~and ~~Regulation~~abroad related to our novel technologies and product or product candidates, and aby ~~violation~~the maintenance of ~~which~~our trade secrets through proper procedures. We will only be able to protect our technologies from unauthorized use by third parties to the extent that valid and enforceable patents or trade secrets cover them in the market they are being used or developed. We cannot be certain that patents will be issued, or that issued or allowed patents will not later be found to be invalid and/or unenforceable. The patent prosecution process is expensive and time-consuming, and we may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner. An adverse determination in any such submission, patent office trial, proceeding or litigation could ~~subject~~reduce the scope of, render unenforceable, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to ~~significant~~us, ~~fines~~or result in our inability to manufacture or commercialize products without infringing third-party patent rights. It is also possible that we will fail to identify any patentable aspects of our research and development output and methodology, and, even if we do, an opportunity to obtain patent protection may have passed. Given the uncertain and time-consuming process of filing patent applications and prosecuting them, it is possible that our product, product candidates or process(es) originally covered by the scope of the patent application may have changed or been modified, leaving our product or product candidates process(es) without patent protection.

In May 2018, a new privacy regime, the General Data Protection Regulation, or GDPR, took effect across all member states of the European Economic Area, or EEA. The GDPR increases our obligations with respect to clinical trials conducted in the EEA by expanding the definition of personal data to include coded data, and requiring changes to informed consent practices and more detailed notices for clinical trial subjects and investigators. In addition, the GDPR increases the scrutiny that clinical trial sites located in the EEA should apply to transfers of personal data from such sites to countries that are considered to lack an adequate level of data protection, such as the United States. The GDPR imposes substantial fines for breaches of data protection requirements, which can be up to four percent of global turnover or 20 million Euros, whichever is greater, and it also confers a private right of action on data subjects for breaches of data protection requirements. Compliance with these directives is a rigorous and time-intensive process that may increase our cost of doing business, and the failure to comply with these laws could subject us to significant fines.63

48The patent position of biotechnology and pharmaceutical companies is generally highly uncertain, involves complex legal and factual questions, and has in recent years been the subject of much litigation. In addition, no consistent policy regarding the breadth of claims allowed in pharmaceutical or biotechnology patents has emerged to date in the U.S. The patent situation outside the U.S. is even more uncertain. The laws of foreign countries may not protect our rights to the same extent as the laws of the U.S., and we may fail to seek or obtain patent protection in all major markets. For example, European patent law restricts the patentability of methods of treatment of the human body more than U.S. law does. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after a first filing, or in some cases not at all. Therefore, we cannot know with certainty whether we or our licensors were the first to make the inventions claimed in patents or pending patent applications that we own or licensed, or that we or our licensors were the first to file for patent protection of such inventions. In the event that a third party has also filed a U.S. patent application relating to our product candidates or a similar invention, depending upon the priority dates claimed by the competing parties, we may (i) fail to obtain a patent based on anticipation or obviousness over a competitor’s earlier filed application or (ii) have to participate in interference proceedings declared by the United States Patent and Trademark Office, or USPTO, to determine priority of invention in the U.S. Moreover, we may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging our patent rights or the patent rights of others. The costs of these proceedings could be substantial and it is possible that our efforts to establish we were the first-to-file on our technology or products or that we had priority of invention would be unsuccessful, resulting in a material adverse effect on our U.S. patent position. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from commercializing competitive technologies and products. Changes in either the patent laws or interpretation of the patent laws in the U.S. and other countries may diminish the value of our patents or narrow the scope of our patent protection. For example, the federal courts of the U.S. have taken an increasingly dim view of the patent eligibility of certain subject matter, such as naturally occurring nucleic acid sequences, amino acid sequences and certain methods of utilizing same, which include their detection in a biological sample and diagnostic conclusions arising from their detection. Such subject matter, which had long been a staple of the biotechnology and biopharmaceutical industry to protect their discoveries, is now considered, with few exceptions, ineligible in the first instance for protection under the patent laws of the U.S. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced in our patents or in those licensed from a third-party. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

~~Table~~Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of ~~Contents~~our patent applications and the enforcement or defense of our issued patents. The Supreme Court has issued several decisions in patent cases in recent years, which either narrow the scope of patent protection or weaken the rights of patent owners in certain situations. In addition to increasing uncertainty in regards to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could hinder our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to the United States patent law. These include changes to transition from a “first-to-invent” system to a “first-to-file” system and to the way issued patents are challenged.

~~Risks~~The ~~Related~~formation toof the Patent Trial and Appeal Board (PTAB) now provides a quicker and less expensive process for challenging issued patents. Our ~~Dependence~~patents, even after they are issued by the USPTO, may be challenged by competitors in the PTAB, in addition to challenges we could have faced previously in district court. The USPTO recently developed new regulations and procedures to govern the administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first-inventor-to-file provisions, only became effective on ~~Third~~March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-~~Parties~~Smith Act will have on the operation of our business.

Third-parties have conducted clinical trials of our product candidates in the past, and our ability to influence the design and conduct of such trials was limited. Our current and future corporate-sponsored trials will also require us to rely on various third-parties. Any failure by a third-party to meet its obligations with respect to the clinical and regulatory development of our product candidates may delay or impair our ability to obtain regulatory approval for our products.64

WeEven ~~are~~if ~~currently advancing~~ our ~~clinical-stage~~patent ~~product~~applications ~~candidates~~issue ~~through~~as ~~multiple~~patents, ~~corporate-sponsored~~they may ~~clinical~~not ~~trials~~issue ~~under~~in ~~corporate-sponsored~~a ~~INDs~~form ~~and~~that ~~through~~will ~~investigator~~provide ~~sponsored~~us ~~trials.~~with ~~Prior~~any tomeaningful ~~sponsoring our INDs for our product candidates~~protection, ~~faculty~~prevent ~~members~~competitors atfrom ~~academic~~competing ~~institutions~~with ~~and~~us ~~other~~or ~~companies~~otherwise provide ~~may~~us ~~have~~with ~~conducted~~any ~~and~~competitive ~~sponsored~~advantage. ~~the~~Our ~~INDs~~competitors ~~and~~may ~~clinical~~be ~~trials~~able ~~relating~~ to circumvent our ~~drug~~owned ~~candidates.As~~or ~~such,~~licensed wepatents ~~did~~by ~~not~~developing similar ~~control~~or ~~the~~alternative ~~design~~technologies or ~~conduct~~products ofin ~~any~~a ~~trials conducted prior to the initiation of our corporate~~non-~~sponsored~~infringing ~~INDs, and it is possible that the FDA will not view these previous trials as providing adequate support for future clinical trials or regulatory filings~~manner..

InOur ~~addition,~~patents weand ~~have~~patent ~~relied~~applications onmay ~~contractual~~not ~~arrangements~~be ~~with~~sufficient ~~academic~~to protect ~~institutions~~our product and ~~investigators~~product ~~that~~candidates ~~provide~~from uscommercial ~~certain~~competition. ~~information~~For ~~rights~~example, ~~with~~we ~~respect~~cannot toobtain ~~the~~a ~~completed~~composition ~~investigator-sponsored~~of ~~trials,~~matter ~~including~~patent and ~~access~~are ~~to,~~limited ~~and~~in the ~~ability~~types toof ~~use~~claims ~~and~~that ~~reference~~we ~~the~~can ~~data,~~obtain ~~including~~ for ~~our~~ELZONRIS ~~own~~due ~~regulatory~~to ~~filings,~~earlier ~~resulting~~published ~~from~~prior ~~the completed trials~~art. IfWe ~~these~~have ~~obligations~~however ~~are~~obtained U.S. ~~breached~~and byforeign ~~the~~patents ~~investigators~~for orcertain ~~institutions,~~methods orof ifusing ~~the~~ELZONRIS ~~data prove~~ to betreat ~~inadequate~~AML, ~~then~~BPDCN, ~~our~~CMML, ~~ability~~and tomyelodysplastic ~~conduct~~syndrome, ~~our~~or ~~planned corporate-sponsored clinical trials may be adversely affected~~MDS. In ~~Additionally~~addition, ~~the~~we ~~FDA~~have ~~may~~filed ~~disagree~~additional ~~with~~U.S. ~~our interpretation of the adequacy of the preclinical, manufacturing,~~ and~~/or~~ ~~clinical~~foreign ~~data~~patent ~~from~~applications ~~these~~for ~~studies. If so,~~ the ~~FDA~~method ~~may~~of ~~require~~using usELZONRIS to ~~obtain~~treat ~~and~~AML, ~~submit additional preclinical~~MDS, BPDCN, ~~manufacturing~~CMML, and~~/or~~ ~~clinical~~other ~~data~~diseases ~~relating~~although tothere ~~our~~can ~~planned~~be ~~trials~~no ~~and/or~~assurances ~~may~~that ~~not accept~~ such ~~additional~~patents ~~data~~will ~~as adequate for our regulatory filings~~issue.

WeFailure ~~rely~~to ~~on,~~obtain ~~and~~patents ~~expect~~directed to ~~continue~~all approved uses of ELZONRIS may enable a competitor to ~~rely~~market onELZONRIS for such approved but unpatented indication(s), ~~third-parties~~which could lead to ~~monitor,~~price ~~support~~erosion for sales of ELZONRIS. With respect to SL-701, ~~conduct~~although ~~and/or~~we ~~oversee~~have ~~clinical~~licensed ~~trials~~an issued U.S. patent directed to the composition of ~~our~~matter for ~~product~~the ~~candidates~~mutant ~~and~~immunogenic IL-13Rα2 peptide, as well as issued patents in ~~some~~Europe, ~~cases~~Japan, Australia, and Mexico directed to uses ~~maintain~~of ~~regulatory~~the ~~files~~SL-701 composition, we currently do not have any composition of matter patent protection for ~~our~~SL-701. ~~product~~We ~~candidates~~have filed U.S. Ifand weforeign ~~are~~patent ~~not~~applications ~~able~~directed to ~~maintain~~methods orof ~~secure~~use ~~agreements~~of ~~with~~a ~~such~~new ~~third~~survivin mutant peptide for use in SL-~~parties~~701. onThe ~~acceptable~~U.S. ~~terms~~patent application directed to ~~monitor,~~certain ~~support,~~uses ~~conduct~~of ~~and/or~~a ~~oversee~~new ~~these~~survivin ~~clinical~~mutant ~~trials,~~peptide iffor ~~these~~use ~~third~~in SL-~~parties~~701 dofor ~~not~~treating ~~perform~~brain ~~their~~cancer ~~services~~has been issued by the USPTO as ~~required~~U.S. 10,485,858 orand ifpatents ~~these~~have ~~third~~been issued for certain uses of the SL-~~parties~~701 ~~fail~~composition in Europe and Japan. While we have a non-exclusive license to ~~timely~~issued ~~transfer~~U.S. patents directed to methods of use for the EphA2 peptide, we currently do not have any ~~regulatory~~composition ~~information~~of ~~held~~matter bypatent ~~them~~protection, although we do have rights to usforeign pending patent applications that seek to cover certain uses of this peptide. With respect to SL-801 and SL-901, we ~~may~~have ~~not~~licensed becomposition ~~able~~of matter patents issued in the U.S. and abroad directed to ~~obtain~~the ~~regulatory~~SL-801 ~~approval~~compound ~~for~~and SL-901. With respect to SL-1001, orwe ~~commercialize~~have filed U.S. and foreign patent applications directed to the SL-1001 composition, and these applications are pending Our inability to obtain adequate patent protection for our product candidates or platform technology could adversely affect our business.

ToIssued ~~conduct~~patents ~~our~~covering ~~preclinical~~one ~~and~~or ~~clinical~~more ~~studies, we rely on academic institutions, CROs, hospitals, clinics and other third-party collaborators who are outside our direct control, which limits our control over the overall conduct~~ of ~~these studies and the ability to successfully complete them. In~~ our ~~corporate-sponsored~~product ~~trials~~or product ~~and investigator sponsored trials of ELZONRIS and our clinical drug~~ candidates, wecould ~~have~~be ~~continued~~found toinvalid ~~engage various third-parties. If we are unable to maintain~~ or ~~enter~~unenforceable ~~into agreements with these third-parties on acceptable terms, or~~ if ~~any~~challenged ~~such engagement is terminated, we may be unable to enroll patients on a timely basis or otherwise conduct our trials~~ in ~~the manner~~court.

49If we were to initiate legal proceedings against a third-party to enforce a patent covering one of our products or product candidates, the defendant could counterclaim that our patent is invalid and/or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of patentable subject matter, novelty, obviousness, written description or non-enablement.

~~Table~~Grounds for an unenforceability assertion could be an allegation that someone connected with the prosecution of ~~Contents~~the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable. Furthermore, any claims asserted against accused infringers could provoke those parties to petition the USPTO to institute inter partes review against the asserted patents, which may lead to a finding that all or some of the claims of the patent are invalid. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner and we were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or unenforceability, we would lose at least part, and perhaps all, of the patent protection on one or more of our products or product candidates or certain aspects of our platform technology, StemScreen®. Such a loss of patent protection could have a material adverse impact on our business. Furthermore, adverse results on U.S. patents may affect related patents in our global portfolio.

we anticipate. In addition, there is no guarantee that these third-parties will devote adequate time and resources to our studies or perform as required by contract or in accordance with regulatory requirements. If these third-parties fail to meet expected deadlines, fail to adhere to protocols or fail to act in accordance with regulatory requirements or our agreements with them, or if they otherwise perform in a substandard manner or in a way that compromises the quality or accuracy of their activities or the data they obtain, then trials of our product candidates may be extended, delayed, compromised or terminated, and as a result we may not be able to commercialize our product candidates.65

WeClaims ~~may~~that ~~not~~our beproduct ~~successful~~or inproduct ~~establishing~~candidates ~~and~~or ~~maintaining~~other technologies, ~~strategic~~or ~~partnerships,~~the ~~which~~sale ~~could~~or ~~adversely~~use ~~affect~~of our ~~ability~~products toor ~~develop~~technology infringe the patent rights of third parties could result in costly litigation or could require substantial time and ~~commercialize~~money ~~products~~to resolve, even if litigation is avoided.

We ~~may~~cannot ~~seek~~guarantee tothat ~~enter~~our ~~into~~product ~~strategic~~or ~~partnerships~~product in candidates, the ~~future,~~use ~~including~~of ~~alliances~~our ~~with~~product ~~other~~or ~~biotechnology~~product candidates, or ~~pharmaceutical~~our ~~companies~~platform technology, toStemScreen®, ~~enhance~~do ~~and~~not ~~accelerate~~infringe ~~the~~third-party ~~development~~patents or ~~and~~other ~~commercialization~~intellectual ofproperty. ~~our~~Third ~~products~~parties inmight ~~territories~~allege ~~outside~~that ~~the~~we ~~United~~are ~~States.~~infringing Wetheir ~~face~~patent ~~significant~~rights ~~competition~~or inthat ~~seeking~~we ~~appropriate~~have ~~strategic~~misappropriated their ~~partners~~trade ~~and~~secrets. ~~the~~Such ~~negotiation~~third ~~process~~parties ismight ~~time-consuming~~resort ~~and~~to ~~complex.~~litigation ~~Moreover,~~against weus. ~~may~~The ~~not~~basis beof ~~successful~~such inclaims that our ~~efforts~~product tocandidates or ~~establish~~platform atechnology ~~strategic~~infringe ~~partnership~~the orrights ~~other~~of ~~alternative~~third ~~arrangements~~parties ~~for~~could also adversely affect our business. Regardless of the outcome of any ~~future~~litigation, ~~product~~defending ~~candidates~~the ~~and~~litigation ~~programs~~may ~~because~~be ~~our~~expensive, ~~research~~time-consuming and ~~development~~distracting ~~pipeline~~to management. For example, we are aware of third-party patents with certain claims that may be ~~insufficient,~~directed to some of our product candidates, including one of the peptides used in SL-701 and ~~programs~~structures which may be ~~deemed~~related to beSL-1001. atWe ~~too~~may ~~early~~need ato ~~stage~~seek ofa ~~development~~license ~~for~~with ~~collaborative~~respect ~~effort,~~to ~~and/~~one or more of these third-~~parties~~party ~~may~~patents ~~not~~in ~~view~~order to commercialize our ~~product~~products. ~~candidates~~No ~~and~~assurance ~~programs~~can asbe ~~having~~given ~~the~~that ~~requisite~~any ~~potential~~such tolicenses ~~demonstrate~~will ~~safety~~be ~~and~~available, or ~~efficacy.~~that ~~Even~~they ifwill webe ~~are~~available ~~successful~~on inreasonable ~~our~~or ~~efforts~~commercially toacceptable ~~establish~~terms ~~strategic~~or ~~partnerships,~~at ~~the~~all. ~~terms~~Failure ~~that~~to weobtain ~~agree~~any ~~upon~~required ~~may~~licenses could ~~not~~restrict beour ~~favorable~~ability to ~~us,~~commercialize ~~and~~our weproducts ~~may~~in ~~not~~certain beterritories ~~able~~or tosubject ~~maintain~~us ~~such~~to ~~strategic~~patent ~~partnerships~~infringement iflitigation, could ~~for~~result ~~example,~~in ~~development~~us orhaving ~~approval~~to ofcease acommercialization ~~product~~of ~~candidate~~our isproducts ~~delayed~~ and/or ~~sales~~subject ofus anto ~~approved~~money ~~product~~damages ~~were~~in ~~disappointing~~such territories.

IfIt weis ~~ultimately~~also ~~determine~~possible that ~~entering~~we ~~into~~have ~~strategic~~failed ~~partnerships~~to isidentify inrelevant patents or applications. Patent applications covering our ~~best~~product, ~~interest~~product ~~but~~candidates, ~~either~~or ~~fail~~platform technology could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can, subject to ~~enter~~certain ~~into~~limitations, be ~~are~~later ~~delayed~~amended in ~~entering~~a ~~into~~manner that could cover our platform technologies, orour ~~fail~~product, toproduct ~~maintain~~candidates ~~such~~or ~~strategic~~the ~~partnerships:~~use of our products.

~~· the~~In ~~development~~order ofto ~~certain~~avoid or settle potential claims with respect to any patent rights of ~~our~~third ~~current~~parties, we may choose or ~~future~~be ~~product~~required ~~candidates~~to seek a license from a third-party and be required to pay license fees or royalties or both. These licenses may not be ~~terminated~~available on expected, reasonable, or ~~delayed;~~acceptable terms, or at all. Even if we or any future strategic partners were able to obtain a license, the rights may be non-exclusive, which could result in our competitors gaining access to the same intellectual property.

~~· our~~Ultimately, ~~cash~~we ~~expenditures~~could ~~related~~be toprevented ~~the~~from ~~development~~commercializing ofone ~~certain~~or more of our ~~current~~products or ~~future~~ product candidates, ~~would~~or ~~increase~~be ~~significantly~~forced ~~and~~to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we ~~may~~are ~~need~~unable to ~~seek~~enter ~~additional~~into ~~financing;~~licenses on acceptable terms. Even if we were to ultimately prevail, or to settle at an early stage, such litigation could burden us with substantial unanticipated costs. In addition, litigation or threatened litigation could result in significant demands on the time and attention of our management team, distracting them from the pursuit of other company business.

~~· we~~Unfavorable ~~may~~outcomes bein ~~required~~intellectual toproperty ~~hire~~litigation could ~~additional~~limit ~~employees~~our orresearch ~~otherwise~~and ~~develop~~development ~~expertise,~~activities ~~such as sales~~ and/or ~~marketing~~our ~~expertise,~~ability ~~for~~to ~~which~~commercialize wecertain ~~have not budgeted;~~products.

· If third parties successfully assert intellectual property rights against us, we ~~will~~might ~~bear~~be ~~all~~barred from using certain aspects of our platform technology or barred from developing and commercializing certain products. Prohibitions against using certain technologies, or prohibitions against commercializing certain products, could be imposed by a court or by a settlement agreement between a patent owner and us. In addition, if we are unsuccessful in defending against allegations of patent infringement or misappropriation of trade secrets, we may be forced to pay substantial damage awards to the ~~risk~~plaintiff. ~~related~~There is inevitable uncertainty in any litigation, including intellectual property litigation. There can be no assurance that we would prevail in any intellectual property litigation, even if the case against us is weak or flawed. If litigation leads to an outcome unfavorable to us, we may be required to obtain a license from the patent owner, in order to continue our research and development ofprograms ~~any~~or ~~such~~to market our product. ~~candidates;~~It is possible that the necessary licenses will not be available to us on commercially acceptable terms, or at all. This could limit our research and development activities, our ability to commercialize certain products, or both.

~~· the competitiveness of any product candidate that is commercialized could be reduced; and~~66

· Most of our competitors are larger than we are and have substantially greater resources. They are, therefore, likely to be able to sustain the costs of complex patent litigation longer than we could. In addition, the uncertainties associated with ~~respect~~litigation could have a material adverse effect on our ability to raise the funds necessary to continue our ~~platform~~clinical trials, continue our internal research programs, in-license needed technology, ~~StemScreen®~~or enter into strategic partnerships that would help us bring our product candidates to market. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, wemarketing or distribution activities. We may not ~~realize~~have ~~its~~sufficient ~~potential~~financial asor aother ~~means~~resources ofto ~~identifying~~conduct ~~and~~such ~~validating~~litigation ~~new~~or ~~cancer~~proceedings ~~therapies~~adequately.

WeIntellectual ~~rely~~property onlitigation ~~third-party~~may ~~manufacturers~~lead to ~~produce~~unfavorable publicity ~~and~~that ~~supply~~harms our ~~commercial~~reputation ~~products, clinical~~ and ~~preclinical~~causes ~~product~~the ~~candidates.~~market ~~Any~~price ~~failure~~of ~~by a third-party manufacturer to produce supplies for us may delay or impair~~ our ~~ability~~common tostock ~~initiate or complete our clinical trials, commercialize our products or continue~~ to ~~sell any approved products~~decline.

WeDuring dothe ~~not~~course ~~currently~~of ~~own or operate~~ any ~~manufacturing~~patent ~~facilities~~litigation, ~~and~~there wecould ~~lack~~be ~~sufficient~~public announcements ~~internal~~of ~~staff~~the ~~and~~results ~~infrastructure~~of tohearings, ~~produce~~rulings ~~clinical~~on ~~and preclinical product candidate supplies ourselves. As a result~~motions, ~~we work with third-party CMOs to produce our products~~ and ~~clinical~~other ~~product~~interim ~~candidates~~proceedings in ~~acceptable~~the ~~quality and quantity for our ongoing and future clinical trials~~litigation. If wesecurities ~~are~~analysts or ~~unable~~investors toregard ~~maintain~~these ~~such~~announcements ~~third-party~~as ~~manufacturing sources~~negative, orthe ~~fail~~perceived tovalue doof soour onproduct ~~commercially reasonable terms or on a timely basis~~candidates, weplatform ~~may not be able to successfully produce~~technology, ~~develop~~programs, ~~and market ELZONRIS~~ or ~~our~~intellectual ~~clinical~~property ~~drug~~could ~~candidates or may~~ be ~~delayed in doing so~~diminished. ~~We purchase and plan to purchase immunostimulants used with SL-701 from third-parties. Whereas GM-CSF and Imiquimod are commercially available products~~Accordingly, ~~poly-ICLC~~the ~~(Hiltonol®)~~market isprice aof ~~development stage candidate and not commercially available. We do not have a right to manufacture poly-ICLC directly or through~~ our ~~third-party~~common ~~CMOs~~stock ~~and are wholly dependent on a third-party manufacturer of poly-ICLC for clinical supply. This third-party manufacturer currently has a limited supply and~~ may ~~be unable to provide adequate poly-ICLC to us in the future~~decline.

WeELZONRIS, ~~also~~our ~~expect~~clinical todrug ~~rely~~candidates, ~~upon~~as ~~third-parties~~well toas ~~produce~~some of ~~drug~~our ~~substance~~other ~~and drug~~ product ~~required~~candidates ~~for the clinical trials~~ and ~~commercial supply of~~ our ~~products~~platform ~~and~~technologies, ~~product~~are ~~candidates.~~protected Ifby weintellectual ~~are~~property ~~unable~~licensed tofrom ~~arrange for~~ third~~-party~~ ~~manufacturing sources~~parties, including oracademic toinstitutions. doIf sothe onlicensors ~~commercially~~terminate ~~reasonable~~the ~~terms~~licenses, or onfail ato ~~timely~~prosecute, ~~basis~~maintain, weenforce, ~~may~~and/or ~~not~~defend the belicensed ~~able~~patents toand ~~complete~~patent ~~development~~applications, ofour ~~such~~competitive ~~other~~position, ~~product candidates or~~ market ~~them~~share, ifand ~~eventually~~business ~~approved.~~prospects ~~Reliance on third-party manufacturers entails risks to which we~~ would ~~not~~ be ~~subject if we manufactured product candidates ourselves, including reliance on the third-party for regulatory compliance and quality assurance, the~~harmed.

50We are a party to several license agreements relating to certain patents and patent applications owned by third parties, upon which certain aspects of our business depend. In particular, we hold an exclusive license from Scott and White Memorial Hospital, or Scott and White, for ELZONRIS and SL-501, and we hold three licenses, including an exclusive license and two non-exclusive licenses, from the University of Pittsburgh relating to SL-701. Our license agreement with Scott and White survives, unless earlier terminated, until the later of the expiration of the last to expire licensed patent or the date on which we owe no further payments to Scott and White. Our exclusive and our non-exclusive patent license agreements with the University of Pittsburgh survive, unless earlier terminated, until the expiration of the last to expire licensed patent, and our non-exclusive license with the University of Pittsburgh to use and reference certain clinical trial data and information survives for a term of twenty years unless earlier terminated. We hold an exclusive worldwide license from CanBas Co., Ltd. for SL-801. The agreement with CanBas Co., Ltd. survives until the later of ten years following the first commercial sale of each product in each country; the date upon which there are no more valid claims; or the expiration or termination of the last regulatory exclusivity period, after which our license becomes fully paid, irrevocable, perpetual, non-exclusive and royalty-free. In March 2019, we acquired an exclusive worldwide license to pending patents covering the SL-1001 component from CRT Pioneer Fund. We also hold an exclusive worldwide license from UCB Biopharma SPRL for the patents covering SL-901. In addition, we hold licenses from academic institutions relating to intellectual property underlying ELZONRIS and our product candidates. We also hold an exclusive license from CRT Pioneer Fund LP for SL-1001, which survives until Stemline’s obligation to pay royalties ends, which the agreement defines as the later of the date when the licensed product is no longer within the scope of a valid claim of a licensed patent in the country of sale or manufacture or the expiry of any extended exclusivity period in the relevant country, unless earlier terminated. We expect to enter into additional license agreements as part of the development of our business.

~~Table~~In some instances, we depend on our licensors to protect the proprietary rights covering our technology and we have limited, if any, control over the amount or timing of ~~Contents~~resources that they devote on our behalf, or the priority they place on, maintaining patent rights and prosecuting patent applications to our advantage. Moreover, in some instances, we have limited, if any, control over the strategies and arguments employed in the maintenance of patent rights and the prosecution of patent applications to our advantage. Our current or future licensors may not successfully prosecute certain patent applications under which we are licensed and on which our business depends. Even if patents issue from these applications, our licensors may fail to maintain these patents, may decide not to pursue litigation against third-party infringers, may fail to prove infringement, or may fail to defend against counterclaims of patent invalidity or unenforceability. Moreover, and possibly unbeknownst to us, our licensors may experience serious difficulties related to their overall business or financial stability, and they may be unwilling or unable to continue to expend the financial resources required to maintain and prosecute these patents and patent applications. While we intend to take actions reasonably necessary to enforce our patent rights, we depend, in part, on our licensors to protect a substantial portion of our proprietary rights and to inform us of the status of those protections and efforts thereto.

possibility of breach of the manufacturing agreement by the third-party because of factors beyond our control (including a failure to synthesize and manufacture our product candidates in accordance with our product specifications), and the possibility of termination or nonrenewal of the agreement by the third-party, based on its own business priorities, at a time that is costly or damaging to us. We will be dependent on the ability of these third-party manufacturers to produce adequate supplies of drug product to support our clinical development programs and future commercialization of any product candidates for which we may receive regulatory approval. In addition, the FDA and other regulatory authorities require that our product candidates be manufactured according to CGMP and similar standards for products manufactured for non-US markets. Any failure by our third-party manufacturers to comply with CGMP or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of product or product candidates of acceptable quality in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval for trial initiation or marketing of any of our product candidates. In addition, such failures could be the basis for action by the FDA to withdraw approvals for products previously granted to us and for other regulatory action, which could result in or lead to recall, seizure, fines, imposition of operating restrictions, total or partial suspension of production, injunctions, consent decrees, or civil or criminal sanctions.67

WeOur ~~rely~~licensors onmay ~~our~~also ~~third-party~~be ~~manufacturers~~notified toof ~~purchase~~alleged ~~from~~infringement ~~third-party suppliers the materials necessary to produce our products~~ and be ~~product~~sued ~~candidates~~ for ~~our~~infringement ~~clinical studies. There are a small number~~ of ~~suppliers for certain capital equipment and materials that we use to manufacture and test our drugs. Such suppliers may not sell these materials to our~~ third-party ~~manufacturers~~patents ~~at the times we need them~~ or onother ~~commercially~~proprietary ~~reasonable terms~~rights. We domay ~~not~~ have ~~control~~limited, ~~over~~if ~~the~~any, ~~process~~control or ~~timing~~involvement over of the ~~acquisition~~defense of these ~~materials~~claims, byand our ~~third-party~~licensors ~~manufacturers.~~could ~~Moreover,~~be wesubject currently do not have any agreements for the commercial production of these materials. Although we generally do not begin a clinical trial unless we believe we have a sufficient supply of a product candidate to ~~complete~~injunctions ~~the~~and ~~clinical~~temporary ~~trial,~~or ~~any~~permanent ~~significant~~exclusionary ~~delay~~ orders in the ~~supply~~U.S. ~~of a product candidate~~ or ~~the~~other ~~material~~countries. ~~components~~Our ~~thereof~~licensors ~~for~~are anot ~~clinical~~obligated ~~trial, including an ongoing clinical trial, due~~ to ~~the~~defend ~~need~~or toassist ~~replace~~in ~~a third-party manufacturer, could considerably delay completion of~~ our ~~clinical~~defense ~~studies,~~against ~~product testing and potential regulatory approval of our product candidates. If our~~ third-party ~~manufacturers~~claims ~~or we are unable to purchase these materials after regulatory approval has been obtained for our product candidates, the commercial launch~~ of ~~our product candidates would be delayed or there would be a shortage in supply, which would impair our ability to generate revenues from the sale of our products or product candidates~~ infringement.

WeIn ~~are~~addition, ~~working~~in ~~with~~spite ~~our~~of ~~third-party manufacturers to optimize the manufacturing processes for~~ our ~~products~~best ~~and product candidates~~efforts, ~~including~~our ~~related~~licensors ~~drug~~might conclude ~~substances, so~~ that ~~these~~we ~~products~~have ~~and~~materially ~~product~~breached ~~candidates~~our ~~may~~license beagreements ~~routinely~~and ~~produced~~might intherefore ~~adequate~~seek ~~quantities~~to ofterminate ~~adequate~~the ~~quality~~license agreements, thereby ~~and~~removing atour anability ~~acceptable cost,~~ to ~~support~~obtain ~~our~~regulatory ~~clinical~~approval ~~trials~~ and ~~ultimate~~to ~~commercialization~~market ~~of any~~ products ~~that~~covered ~~might~~by bethese ~~approved~~license agreements. Our ~~third-party manufacturers~~ licensors may ~~not~~also beseek ~~able~~ to ~~control~~terminate ~~batch-to-batch variability below an acceptable threshold, increasing~~ the ~~risk~~license ofagreements ~~batch~~if ~~failures,~~we ~~which~~fail ~~could cause significant delays and increased costs~~ to ~~our~~satisfy ~~programs. Our third-party manufacturers may not be able to manufacture~~ our ~~products~~diligence orobligations ~~product candidates at a cost,~~ and/or inmeet ~~quantities,~~specified milestones or inupon ainsolvency. ~~timely~~From ~~manner~~time ~~necessary,~~ to ~~develop and commercialize them. If we successfully commercialize any of our product candidates~~time, we ~~may~~have behad ~~required~~ to ~~establish~~request orextensions ~~access~~of ~~large-scale commercial manufacturing capabilities. In addition, assuming that~~ our ~~drug~~ development ~~pipeline~~obligations ~~increases~~contained ~~and~~in ~~matures,~~some weof ~~will have a greater need for clinical trial and commercial manufacturing capacity. To meet~~ our license ~~projected needs for commercial manufacturing~~agreements, ~~third-parties~~and ~~with whom~~ we ~~currently work~~ may need to ~~increase~~seek ~~their~~further ~~scale~~extensions ofin ~~production~~the ~~and/or we may need to secure additional suppliers~~future.

~~Because~~Although ofwe ~~our~~have ~~reliance~~obtained onsuch ~~contract~~extensions ~~manufacturers~~in the past, wethere can ~~may~~be ~~choose~~no assurance that our licensors will continue to ~~maintain~~extend athe ~~higher~~development ~~inventory~~timelines ofor ~~drug~~other ~~product~~milestones ~~and/~~contained in our license agreements. If these in-licenses are terminated, or ~~drug~~if ~~substance~~the ~~for~~underlying ~~any~~patents offail to provide the intended market exclusivity, we could lose our rights to develop and commercialize ELZONRIS and the product candidates orgoverned ~~approved~~by ~~products~~the ~~that~~licenses, and competitors would behave ~~necessary~~the iffreedom weto ~~had~~seek ~~direct~~regulatory ~~control~~approval of, ~~the~~and ~~manufacturing~~to ~~assets~~market, products identical to ours. This could have a material adverse effect on our competitive business position and our business prospects.

WeConfidentiality ~~rely~~agreements onwith aemployees ~~single third-party to manufacture~~ and ~~supply our drug substance and a single~~ third~~-party~~ toparties may ~~manufacture~~not ~~and~~prevent ~~supply~~unauthorized ~~our~~disclosure ~~drug product for our products and product candidates. Any problems experienced by our third-party manufacturers or their vendors could result in a delay or interruption in the supply~~ of ~~our~~trade ~~products~~secrets ~~or product candidates to us until the third-party manufacturer or its vendor cures the problem or until we locate~~ and ~~qualify~~other anproprietary ~~alternative source of manufacturing and supply~~information.

~~The~~In ~~third-party~~addition ~~manufacturers~~to ofpatents, ~~our~~we ~~products~~rely ~~and~~on ~~product~~trade ~~candidates require specialized equipment and utilize complicated production processes that would be difficult~~secrets, ~~time~~technical know-~~consuming~~how, and ~~costly~~proprietary toinformation ~~duplicate.~~concerning ~~Thus,~~our webusiness ~~have~~strategy ~~multiple~~in ~~third-party~~order ~~manufacturers~~to ~~who~~protect ~~supply~~ our ~~drug~~competitive ~~product~~position ~~candidates,~~in ~~one~~the ~~third-party~~field of ~~manufacturer~~oncology. ~~for~~In ~~each~~the course of our ~~product~~research ~~candidates.~~and ~~Because~~development ofactivities ~~this~~and ~~arrangement,~~our ~~there~~business isactivities, awe ~~greater~~often ~~risk~~rely ~~that~~on ~~issues~~confidentiality agreements into ~~execution~~protect orour ~~changes~~proprietary ininformation. ~~business~~Such ~~focus~~confidentiality ~~and/or~~agreements ~~product~~are ~~risk~~used, ~~assessments~~for atexample, awhen ~~third-party~~we ~~manufacturer~~talk ~~could~~to ~~cause~~vendors of ~~delays~~laboratory inor ~~the~~ clinical development services or ~~manufacture~~potential ofstrategic apartners. ~~product~~In oraddition, ~~product~~each ~~candidate~~of ~~than~~our ifemployees weis ~~used~~required to ~~more~~sign ~~than~~a ~~one~~confidentiality ~~third-party~~agreement ~~manufacturer~~upon ~~for~~joining ~~each~~our ~~product~~company. orWe ~~product~~take ~~candidate.~~steps ~~For~~to ~~each~~protect of our ~~products~~proprietary ~~and product candidates~~information, weand ~~currently~~our ~~rely~~confidentiality agreements onare ~~third-party~~carefully ~~manufacturers~~drafted to ~~purchase~~protect ~~from their third-party vendors the materials necessary to manufacture~~ our ~~products~~proprietary ~~and~~interests. ~~product~~Nevertheless, ~~candidates~~there ~~for~~can ~~our~~be ~~clinical~~no ~~studies.~~guarantee ~~Any~~that ~~prolonged~~an ~~disruption~~employee or inan aoutside ~~third-~~party ~~manufacturer’s~~will ~~vendor’s~~not ~~ability~~make toan ~~supply~~unauthorized ~~materials~~disclosure ~~for~~of our ~~manufacturing~~proprietary ~~could~~confidential ~~have~~information. aThis ~~significant~~might ~~negative~~happen ~~impact~~intentionally or oninadvertently, ~~our~~and ~~third-party~~we ~~manufacturer’s~~may ~~their~~not ~~ability~~be able to ~~manufacture~~obtain ~~our~~adequate ~~products~~remedies orfor ~~product~~such ~~candidates~~breaches. ~~This~~It ~~would~~is ~~cause~~possible usthat toa ~~seek~~competitor ~~additional~~will ~~third-party~~make use ~~manufacturing~~of ~~contracts~~such information, ~~thereby~~and ~~increasing~~that our ~~development~~competitive ~~costs~~position ~~and~~will ~~timelines~~be ~~and~~compromised, ifin ~~applicable,~~spite of any ~~commercialization~~legal ~~costs.~~action Inwe ~~addition,~~might ~~our~~take ~~third-party~~against persons ~~manufacturers~~making ~~may~~such ~~experience~~unauthorized ~~problems not related to their vendors that could also have a significant negative impact on their ability~~disclosures.

51Trade secrets are difficult to protect. Courts outside the United States sometimes are less willing than U.S. courts to protect trade secrets. Moreover, if any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be harmed.

~~Table of Contents~~68

toOur ~~manufacture~~research ~~our products~~ and ~~product candidates on our own and would cause us to seek additional third-party manufacturing contracts, thereby increasing our~~ development ~~costs~~strategic ~~and~~partners timelines, if applicable, and any commercialization costs. Moreover, third-party manufacturers and third-party laboratories performing analytical and other testing could receive inspection findings from regulatory authorities that require investigation and remediation, and this could result in business interruptions affecting the production of our product candidates. We may ~~face~~have ~~losses related~~ rights to ~~the~~publish ~~supply~~data ~~of drug substances, drug product, adjuvants~~ and other ~~components~~information ~~of the product due~~ to ~~third-party~~which ~~distribution~~we ~~and~~have ~~storage of such product~~rights. WeIn ~~may~~addition, ~~suffer~~we ~~losses~~sometimes ~~due~~engage toindividuals ~~third-party manufacturers’ shortages~~ or ~~supply~~entities ~~shortages~~to ofconduct research ~~their~~relevant ~~vendors. We~~to ~~may suffer losses as a result of business interruptions that exceed coverage under~~ our ~~manufacturers’ insurance policies~~business. ~~Events~~The ~~beyond~~ability ~~our~~of ~~control,~~these ~~such~~individuals asor ~~natural~~entities ~~disasters,~~to ~~fire,~~publish ~~sabotage~~ or ~~business~~otherwise ~~accidents~~publicly ~~could~~disclose ~~have a significant negative impact on our operations by disrupting our product candidate development~~ data and ~~commercialization~~other ~~efforts~~information ~~until~~generated ~~our~~during ~~third-party~~the ~~manufacturers~~course ~~can~~of ~~repair~~ their ~~facilities~~research oris wesubject ~~can qualify alternate third-party contract manufacturers~~ to ~~assume~~certain ~~this~~contractual ~~manufacturing~~limitations. ~~role,~~These ~~which~~contractual provisions we may ~~not~~ be ~~able~~insufficient toor doinadequate onto ~~reasonable~~protect ~~terms,~~our ifconfidential ~~at all~~information. InIf ~~addition, if~~ we ~~are~~do ~~required~~not toapply ~~change manufacturers~~ for ~~any~~patent ~~reason,~~protection prior ~~we will be required~~ to ~~verify~~such ~~that~~publication, ~~the~~or ~~new~~if ~~manufacturer~~we ~~maintains~~cannot ~~facilities~~otherwise ~~and~~maintain ~~procedures~~the ~~that~~confidentiality ~~comply~~of ~~with quality standards and with all applicable regulations and guidelines and that they can successfully transfer~~ our ~~manufacturing~~proprietary ~~processes~~technology ~~to produce product of equivalent quality~~ and ~~quantity.~~other ~~FDA~~confidential information, ~~approval~~then ~~of any new manufacturer would also be required. The delays associated with the qualification of a new manufacturer or the requalification of an existing manufacturer could negatively affect~~ our ability to ~~develop~~obtain ~~product~~patent ~~candidates~~protection or ~~produce~~to ~~approved~~protect ~~products in a timely manner. Any delay or interruption in~~ our ~~clinical~~trade ~~studies~~secret orinformation inmay ~~the~~be ~~development, validation and commercialization of our product candidates could negatively affect our business~~jeopardized.

ToIntellectual ~~the~~property ~~extent~~rights wedo ~~elect~~not tonecessarily ~~enter~~address all ~~into~~potential ~~licensing~~threats ~~or collaboration agreements~~ to ~~develop and potentially commercialize~~ our ~~products~~competitive ~~or product candidates, our dependence on such relationships may adversely affect our business~~advantage.

~~Our~~The ~~global~~degree ~~commercialization strategy for certain~~ of ~~our~~future ~~products~~protection orafforded ~~product~~by ~~candidates may depend on~~ our ~~ability~~intellectual property torights ~~enter~~is into agreements with collaborators to obtain assistance and funding for the development and potential commercialization of these products or product candidates. Supporting diligence activities conducted by potential collaborators and negotiating the financial and other terms of a collaboration agreement are long and complex processes with uncertain ~~results.~~because ~~Even~~intellectual ifproperty werights ~~are~~have ~~successful in entering into one or more collaboration agreements~~limitations, ~~collaborations may involve greater uncertainty for us, as we have less control over certain aspects of our collaborative programs than we do over our proprietary development~~ and ~~commercialization programs. We~~ may ~~determine that continuing to collaborate under the terms provided is~~ not inadequately protect our ~~best interest~~business, ~~and we may terminate such collaboration. Our collaborators could delay~~ or ~~terminate~~permit ~~their~~us ~~agreements,~~to ~~and~~maintain our ~~products~~competitive ~~subject~~advantage. toThe ~~collaborative~~following ~~arrangements~~examples ~~may~~are ~~never be successfully commercialized.~~illustrative:

~~Further,~~· ~~our~~others ~~future collaborators~~ may ~~develop~~be ~~alternative~~able ~~products~~to ormake ~~pursue~~compounds ~~alternative~~that ~~technologies~~are ~~either~~the onsame ~~their~~as ~~own~~ or insimilar ~~collaboration~~to ~~with others, including~~ our ~~competitors,~~product ~~and the priorities~~ or ~~focus~~product ofcandidates ~~our~~but ~~collaborators may shift, so~~ that ~~our~~are ~~programs~~not ~~receive~~covered ~~less attention or resources than we would like, or they may be terminated altogether. Any such actions~~ by ~~our collaborators, on issues may adversely affect our business prospects and ability to earn income. In addition, we could have disputes with our future collaborators, on issues such as~~ the ~~interpretation~~claims of ~~terms in our agreements. Any such disagreements could lead to delays in~~ the ~~development~~patents orthat ~~commercialization~~we ofown ~~any potential products~~ or ~~could~~have ~~result~~exclusively ~~in time-consuming and expensive litigation or arbitration, which might not be resolved in our favor.~~licensed;

~~Even~~· ~~with respect to certain other products that~~ we ~~intend~~or ~~to commercialize ourselves, we may enter into agreements with collaborators to share in the burden of conducting clinical trials, manufacturing, and marketing~~ our ~~product~~licensors ~~candidates~~ or ~~products.~~any Infuture ~~addition,~~strategic ~~our~~partners ~~ability~~might tonot ~~apply~~have ~~our~~been ~~proprietary~~the ~~technologies~~first to ~~develop~~make ~~proprietary~~the ~~compounds~~inventions ~~will~~covered ~~depend~~by onthe ~~our~~issued ~~ability~~patent ~~to establish and maintain licensing arrangements~~ or ~~other~~pending ~~collaborative~~patent ~~arrangements~~application ~~with~~that ~~the~~we ~~holders~~own ~~of proprietary rights to such compounds. We may not be able to establish such arrangements on favorable terms~~ or athave ~~all,~~exclusively ~~and our future collaborative arrangements might not be successful.~~licensed;

~~Risks~~· ~~Related~~we or our licensors or any future strategic partners might not have been the first to ~~Our~~file ~~Intellectual~~patent ~~Property~~applications ~~Rights~~covering certain of our inventions;

We· ~~could~~others bemay ~~unsuccessful~~independently indevelop ~~obtaining~~similar ~~adequate~~or ~~patent~~alternative ~~protection~~technologies ~~for one~~ or ~~more~~duplicate any of our ~~products~~technologies orwithout ~~product~~infringing ~~candidates.~~our intellectual property rights;

~~Our~~· ~~commercial~~it ~~success~~is ~~will~~possible depend in part on obtaining and maintaining patent protection and trade secret protection in the U.S. and other countries with respect to our products and product candidates or any future product candidate that ~~we may license or acquire and the methods we use to manufacture them, as well as successfully defending these patents and trade secrets against third-party challenges. We seek to protect~~ our ~~proprietary~~pending ~~position by filing~~ patent applications ~~in the United States and abroad related to our novel technologies and products or product candidates, and by the maintenance of our trade secrets through proper procedures. We~~ will ~~only~~not belead ~~able~~ to protect our technologies from unauthorized use by third parties to the extent that valid and enforceable patents or trade secrets cover them in the market they are being used or developed. We cannot be certain that patents will be issued, ~~or that issued or allowed~~ patents ~~will not later be found to be invalid and/or unenforceable. The patent prosecution process is expensive and~~;

52· it is possible that our applications for patent term extension for ELZONRIS pursuant to the Hatch Waxman Act will not result in added patent term, or may result in a shorter patent term extension than we applied for or that is available under the Hatch Waxman Act;

~~Table~~· the scope of ~~Contents~~our issued patents may not extend to competitive products developed or produced by others;

~~time-consuming,~~· ~~and~~issued wepatents ~~may~~that ~~not~~we beown ~~able to file and prosecute all necessary~~ or ~~desirable~~have ~~patent~~exclusively ~~applications~~licensed atmay anot ~~reasonable~~provide ~~cost~~us orwith ~~in a timely manner. It is also possible that we will fail to identify~~ any ~~patentable~~competitive ~~aspects of our research and development output and methodology~~advantages, ~~and,~~or ~~even if we do, an opportunity to obtain patent protection~~ may ~~have~~be ~~passed.~~held ~~Given~~invalid ~~the~~or ~~uncertain~~unenforceable, ~~and~~as ~~time-consuming~~a ~~process~~result of ~~filing~~legal ~~patent~~challenges ~~applications and prosecuting them, it is possible that our product(s) or process(es) originally covered~~ by ~~the scope of the patent application may have changed or been modified, leaving~~ our ~~product(s) or process(es) without patent protection.~~competitors;

~~The~~· ~~patent~~our ~~position~~competitors ofmight ~~biotechnology~~conduct ~~and~~research ~~pharmaceutical companies is generally highly uncertain, involves complex legal~~ and ~~factual~~development ~~questions,~~activities ~~and has~~ in recent years been the subject of much litigation. In addition, no consistent policy regarding the breadth of claims allowed in pharmaceutical or biotechnology patents has emerged to date in the U.S. The patent situation outside the U.S. is even more uncertain. The laws of foreign countries ~~may~~where ~~not protect our rights to the same extent as the laws of the U.S., and~~ we ~~may~~do ~~fail~~not tohave ~~seek or obtain~~ patent ~~protection~~rights in all major markets. For example, European patent law restricts the patentability of methods of treatment of the human body more than U.S. law does. Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the U.S. and other jurisdictions are typically not published until 18 months after a first filing, or inwhere ~~some cases not at all. Therefore, we cannot know with certainty whether we or our licensors were~~ the ~~first to make the inventions claimed in patents or pending~~ patent ~~applications~~rights that we ~~own~~do ornot ~~licensed,~~have orare ~~that~~not wecomparable ~~or our licensors were the first~~ to ~~file~~those ~~for~~afforded patent protection of such inventions. In the event that a third party has also filed a U.S. patent application relating to our product candidates or a similar invention, depending upon the priority dates claimed by the competing parties, we may have to participate in ~~interference proceedings declared by~~ the United States ~~Patent and Trademark Office~~, or ~~USPTO,~~where ~~to determine priority of invention in~~ the ~~U.S.~~applicable ~~The~~laws ~~costs~~provide ~~of these proceedings could be substantial and it is possible that our efforts to establish priority of invention would be unsuccessful, resulting in~~ a ~~material~~safe ~~adverse~~harbor ~~effect~~exemption on our U.S. patent position. As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and future patent applications may not result in patents being issued which protect our technology or products, in whole or in part, or which effectively prevent others from ~~commercializing~~infringement ~~competitive~~liability ~~technologies~~for and products. Changes in either the patent laws or interpretation of the patent laws in the U.S. and other countries may diminish the value of our patents or narrow the scope of our patent protection. For example, the federal courts of the U.S. have taken an increasingly dim view of the patent eligibility of certain ~~subject~~research ~~matter~~purposes, ~~such as naturally occurring nucleic acid sequences, amino acid sequences~~ and ~~certain~~then ~~methods~~use ofthe ~~utilizing~~information ~~same,~~learned ~~which include their detection in a biological sample and diagnostic conclusions arising~~ from ~~their~~such ~~detection.~~activities ~~Such subject matter, which had long been a staple of the biotechnology and biopharmaceutical industry~~ to ~~protect~~develop ~~their~~competitive ~~discoveries,~~products ~~is now considered, with few exceptions, ineligible in the first instance~~ for ~~protection~~sale ~~under the patent laws of the U.S. Accordingly, we cannot predict the breadth of claims that may be allowed or enforced~~ in our ~~patents~~major orcommercial ~~in those licensed from a third-party.~~markets;

~~Recent~~· ~~patent~~we ~~reform~~may ~~legislation~~not ~~could~~develop ~~increase~~additional ~~the~~proprietary ~~uncertainties~~technologies ~~and~~that costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents. On September 16, 2011, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes to the United States patent law. These include changes to transition from a “first-to-invent” system to a “first-to-file” system and to the way issued patents are ~~challenged.~~patentable; ~~The formation of the Patent Trial~~ and Appeal Board now provides a quicker and less expensive process for challenging issued patents. The USPTO recently developed new regulations and procedures to govern the administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act, and in particular, the first-inventor-to-file provisions, only became effective on March 16, 2013. Accordingly, it is not clear what, if any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition.

~~Moreover,~~· wethe ~~may~~intellectual beproperty ~~subject~~rights ~~to a third-party pre-issuance submission~~ of ~~prior~~others ~~art~~may tohave ~~the~~an ~~USPTO,~~adverse oreffect ~~become~~on ~~involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference proceedings challenging~~ our ~~patent rights or the patent rights of others~~business.

The costs of these proceedings could be substantial and it is possible that our efforts to establish priority of invention would be unsuccessful, resulting in a material adverse effect on our U.S. patent position. An adverse determination in any such submission, patent office trial, proceeding or litigation could reduce the scope of, render unenforceable, or invalidate, our patent rights, allow third parties to commercialize our technology or products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent rights. In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.69

53Risks Related to Our Common Stock

~~Table~~The market price of ~~Contents~~our common stock may be highly volatile and our stockholders could incur substantial losses.

~~Even~~The ifmarket price of our ~~patent~~common ~~applications~~stock ~~issue~~may asbe ~~patents~~highly volatile, and ~~they~~could ~~may~~be ~~not~~subject ~~issue~~to wide fluctuations in aresponse ~~form~~to ~~that~~various ~~will~~factors, ~~provide~~some usof ~~with~~which ~~any~~are ~~meaningful~~beyond ~~protection~~our control. Since our initial public offering which occurred in January 2013, ~~prevent~~the ~~competitors~~price ~~from~~of ~~competing~~our ~~with~~common usstock orhas ~~otherwise~~ranged ~~provide~~from us$3.43 ~~with~~per ~~any~~share ~~competitive~~to ~~advantage~~$47.25 ~~Our~~per share. ~~competitors~~The ~~may~~stock bemarket ~~able~~in togeneral ~~circumvent~~and ~~our~~the ~~owned~~market orfor ~~licensed~~biopharmaceutical ~~patents~~companies byin ~~developing~~particular ~~similar~~have orexperienced ~~alternative~~extreme ~~technologies~~volatility that orhas ~~products~~often inbeen aunrelated ~~non-infringing~~to ~~manner~~the operating performance of particular companies. The market price for our common stock may be influenced by many factors, including:

~~Our~~· ~~patents~~our ~~and~~ability ~~patent applications may not be sufficient~~ to ~~protect~~commercialize our ~~products~~approved ~~and~~ product candidates from commercial competition. For example, we cannot obtain a composition of matter patent and are limited in the types of claims that we can obtain for ELZONRIS due to earlier published prior art. We have however obtained U.S. and foreign patents for certain methods of using ELZONRIS to treat AML, BPDCN, and myelodysplastic syndrome, or MDS. In addition, we have filed additional U.S. and foreign patent applications for the method of using ELZONRIS to treat AML, MDS, BPDCN, and other diseases although there can be no assurances that such patents will issue.;

~~Failure~~· toresults ~~obtain~~from ~~patents~~or ~~directed~~delays ~~to all approved uses~~ of ~~ELZONRIS~~clinical ~~may~~trials ~~enable a competitor to market ELZONRIS for such approved but unpatented indication(s), which could lead to price erosion for sales~~ of ~~ELZONRIS.~~our ~~With~~product ~~respect~~or toproduct ~~SL-701~~candidates, although we have licensed an issued U.S. patent directed to the composition of matter for the mutant immunogenic IL-13Rα2 peptide, we currently do not have any foreign composition of matter patent protection. We do, however, have foreign pending patent applications, as well as anresults ~~issued patents in Australia and Mexico and an allowed patent application in Europe, that would cover certain uses~~ of ~~this~~regulatory ~~peptide.~~reviews ~~While~~relating ~~we have a non-exclusive license~~ to ~~issued U.S. patents directed to methods of use for~~ the ~~EphA2~~approval ~~peptide, we currently do not have any composition~~ of matter patent protection, although we do have rights to foreign pending patent applications that seek to cover certain uses of this peptide. While we have filed U.S. and foreign patent applications directed to methods of use of a new survivin mutant peptide for use in SL-701, we currently do not have any composition-of-matter patent protection. With respect to SL-801, we have licensed composition of matter patents issued in the U.S. and abroad directed to the SL-801 compound. While we have an issued patent in Canada and a patent application pending in the U.S. and Canada directed to our StemScreen® technology, we currently have no issued patents covering StemScreen® in the U.S. Although we have various patent applications pending in the U.S. and abroad that we anticipate may result in additional protection for ELZONRIS, our clinical drug candidates and StemScreen®, there can be no assurance that any of these applications will result in an issued patent, or that if they issue, they will provide additional meaningful protection for these assets. Our inability to obtain adequate patent protection for our product candidates ~~or platform technology could adversely affect our business.~~;

~~Issued~~· ~~patents~~our ~~covering~~decision ~~one~~to orinitiate ~~more~~a ofclinical ~~our~~trial, ~~products~~not orto ~~product~~initiate ~~candidates~~a ~~could~~clinical betrial ~~found invalid~~ or ~~unenforceable~~to ifterminate ~~challenged~~an inexisting ~~court.~~clinical trial;

If· weour ~~were~~dependence toon ~~initiate legal proceedings against a~~ third~~-party~~ ~~to enforce a patent covering one of our products or product candidates~~parties, ~~the~~including ~~defendant~~clinical ~~could~~research ~~counterclaim~~organizations ~~that our patent is invalid~~ and~~/or~~ ~~unenforceable.~~contract Inmanufacturing ~~patent~~organizations, ~~litigation~~trial ~~in the United States~~sites, ~~defendant~~clinical ~~counterclaims~~trial ~~alleging~~sponsors ~~invalidity~~ and~~/or~~ ~~unenforceability~~clinical are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, for example, lack of patentable subject matter, novelty, obviousness, written description or non-enablement.investigators;

~~Grounds~~· ~~for an unenforceability assertion could be an allegation that someone connected with~~ the ~~prosecution~~results of ~~the~~our ~~patent~~efforts withheld relevant information from the USPTO, or made a misleading statement, during prosecution. The outcome following legal assertions of invalidity and unenforceability during patent litigation is unpredictable. Furthermore, any claims asserted against accused infringers could provoke those parties to ~~petition the USPTO to institute inter partes review against the asserted patents~~discover, ~~which may lead to a finding that all or some of the claims of the patent are invalid. With respect to the validity question~~develop, ~~for~~acquire example, we cannot be certain that there is no invalidating prior art, of which we and the patent examiner and we were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or ~~unenforceability,~~in-license weadditional ~~would lose at least part, and perhaps all, of the patent protection on one or more of our products or~~ product candidates or certain aspects of our platform technology, StemScreen®. Such a loss of patent protection could have a material adverse impact on our business. Furthermore, adverse results on U.S. patents may affect related patents in our global portfolio.products;

~~The~~· ~~issuance~~new ~~of a patent does not foreclose challenges to its inventorship~~products, ~~scope,~~product ~~validity~~candidates or ~~enforceability.~~new ~~Therefore,~~uses ~~our~~for ~~owned~~existing ~~and~~products ~~licensed patents may be challenged in the courts~~ or ~~patent~~technologies ~~offices~~introduced ~~in the United States and abroad. Such challenges may result in loss of exclusivity~~ or inannounced ~~patent~~by ~~claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit~~ our ~~ability~~competitors ~~to stop others from using or commercializing similar or identical technology~~ and ~~products, or limit~~ the ~~duration~~timing of ~~the~~these ~~patent~~introductions protection of our technology and products. Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such product candidates might expire before or shortly after such product candidates are commercialized. As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.announcements;

54· regulatory or legal developments in the United States and other countries;

~~Table~~· ofour ~~Contents~~ability to maintain the license agreements for our product or product candidates;

~~Claims~~· ~~that~~developments ~~our products~~ or ~~product~~disputes ~~candidates~~concerning orpatent ~~StemScreen®~~applications, orissued ~~the~~patents ~~sale~~ or ~~use~~other ofproprietary ~~our products or technology infringe the patent~~ rights ~~of third-parties could result in costly litigation or could require substantial time and money to resolve, even if litigation is avoided.~~;

We· ~~cannot guarantee that our products or product candidates,~~ the ~~use~~recruitment ~~of our products~~ or ~~product~~departure candidates, or our platform technology, StemScreen®, do not infringe third-party patents or other intellectual property. Third-parties might allege that we are infringing their patent rights or that we have misappropriated their trade secrets. Such third-parties might resort to litigation against us. The basis of ~~such~~key ~~litigation~~scientific ~~could be existing patents~~ or patents that issue in the future. Our failure to successfully defend against any claims that our product candidates or platform technology infringe the rights of third-parties could also adversely affect our business. Regardless of the outcome of any litigation, defending the litigation may be expensive, time-consuming and distracting to management. For example, we are aware of third-party patents with certain claims directed to some of our product candidates, including one of the peptides used in SL-701 and structures which may be related to SL-1001. We may need to seek a license with respect to one or more of these third-party patents in order to commercialize our products. No assurance can be given that any such licenses will be available, or that they will be available on reasonable or commercially acceptable terms or at all. Failure to obtain any required licenses could restrict our ability to commercialize our products in certain territories or subject us to patent infringement litigation, could result in us having to cease commercialization of our products and/or subject us to money damages in such territories.personnel;

It· isthe ~~also~~level ~~possible~~of ~~that~~expenses werelated ~~have failed~~ to ~~identify~~any ~~relevant~~of ~~patents or applications. Patent applications covering~~ our ~~products,~~ product ~~candidates,~~ or platform technology could have been filed by others without our knowledge. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our platform technologies, our products, product candidates or ~~the~~clinical ~~use~~development ~~of our products.~~programs;

In· ~~order~~actual ~~to avoid~~ or ~~settle~~anticipated ~~potential~~changes ~~claims~~in ~~with~~estimates ~~respect~~as to ~~any~~financial ~~patent rights of third-parties~~results, wedevelopment ~~may~~timelines ~~choose~~ or berecommendations ~~required~~by tosecurities seek a license from a third-party and be required to pay license fees or royalties or both. These licenses may not be available on expected, reasonable, or acceptable terms, or at all. Even if we or any future strategic partners were able to obtain a license, the rights may be non-exclusive, which could result in our competitors gaining access to the same intellectual property.analysts;

~~Ultimately,~~· wevariations ~~could~~in ~~be prevented from commercializing one or more of~~ our ~~products~~financial orresults ~~product candidates,~~ or bethose ~~forced to cease some aspect~~ of ~~our~~companies ~~business~~that ~~operations, if, as a result of actual or threatened patent infringement claims, we~~ are ~~unable~~perceived to ~~enter~~be ~~into~~similar ~~licenses on acceptable terms. Patent litigation could also expose us~~ to ~~significant monetary damages. This could harm our business significantly.~~us;

~~Defending~~· ~~against~~sales ~~claims~~ of ~~patent~~common ~~infringement~~stock orby ~~misappropriation~~us ofor ~~trade~~our ~~secrets~~stockholders ~~could~~in ~~be costly and time-consuming, regardless of~~ the ~~outcome. Thus~~future, ~~even~~as ifwell weas were to ultimately prevail, or to settle at an early-stage, such litigation could burden us with substantial unanticipated costs. In addition, litigation or threatened litigation could result in significant demands on the ~~time~~overall ~~and~~trading ~~attention~~volume of our ~~management~~common ~~team, distracting them from the pursuit of other Company business.~~stock;

~~Unfavorable~~· ~~outcomes~~changes in ~~intellectual~~the ~~property~~structure ~~litigation~~of ~~could~~healthcare ~~limit~~payment ~~our~~systems ~~research~~ and ~~development~~product ~~activities~~pricing ~~and/or our ability to commercialize certain products.~~restrictions;

If· ~~third-parties~~market ~~successfully~~conditions assert intellectual property rights against us, we might be barred from using certain aspects of our platform technology or barred from developing and commercializing certain products. Prohibitions against using certain technologies, or prohibitions against commercializing certain products, could be imposed by a court or by a settlement agreement between a patent owner and us. In addition, if we are unsuccessful in ~~defending against allegations of patent infringement or misappropriation of trade secrets, we may be forced to pay substantial damage awards to~~ the ~~plaintiff.~~pharmaceutical There is inevitable uncertainty in any litigation, including intellectual property litigation. There can be no assurance that we would prevail in any intellectual property litigation, even if the case against us is weak or flawed. If litigation leads to an outcome unfavorable to us, we may be required to obtain a license from the patent owner, in order to continue our research and ~~development~~biotechnology programs or to market our product(s). It is possible that the necessary licenses will not be available to us on commercially acceptable terms, or at all. This could limit our research and development activities, our ability to commercialize certain products, or both.sectors;

~~Most~~· ofgeneral ~~our~~economic, ~~competitors~~industry ~~are~~and ~~larger~~market ~~than~~conditions ~~we are~~ and ~~have~~other ~~substantially~~factors ~~greater~~that ~~resources.~~may ~~They are, therefore, likely to~~ be ~~able~~unrelated to ~~sustain the costs of complex patent litigation longer than we could. In addition, the uncertainties associated with litigation could have a material adverse effect on~~ our ~~ability~~operating toperformance ~~raise~~or the ~~funds~~operating ~~necessary~~performance toof ~~continue~~ our ~~clinical trials~~competitors, ~~continue~~including ~~our~~changes ~~internal research programs,~~ in~~-license~~ ~~needed technology, or enter into strategic partnerships that would help us bring our product candidates to~~ market~~. Such~~ ~~litigation~~valuations orof ~~proceedings~~similar ~~could~~companies; ~~substantially increase our operating losses~~ and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.

55· the other factors described in this “Risk Factors” section.

~~Table of Contents~~70

InOur ~~addition,~~executive ~~any future patent litigation~~officers, ~~interference~~directors ~~or other administrative proceedings will result in additional expense~~ and ~~distraction~~principal ofstockholders maintain ~~our~~the ~~personnel.~~ability ~~An adverse outcome in such litigation or proceedings may expose us or any future strategic partners~~ to ~~loss~~exert ofsubstantial ~~our~~influence ~~proprietary~~over ~~position,~~all ~~expose~~matters ussubmitted to ~~significant~~stockholders ~~liabilities,~~for ~~or require us to seek licenses that may not be available on commercially acceptable terms, if at all~~approval.

~~Intellectual~~Our ~~property~~executive ~~litigation~~officers, ~~may~~directors ~~lead~~and principal stockholders beneficially own shares representing approximately 17.7% of our outstanding capital stock. As a result, if these stockholders were to ~~unfavorable~~choose ~~publicity~~to ~~that~~act ~~harms~~together, they would be able to exert substantial influence over all matters submitted to our ~~reputation~~stockholders for approval, as well as our management and ~~causes~~affairs. For example, these persons, if they choose to act together, would exert substantial influence over the ~~market~~election ~~price~~of directors and approval of any merger, consolidation or sale of all or substantially all of our assets. ~~common~~This ~~stock~~concentration toof ~~decline~~voting power could delay or prevent an acquisition of our company on terms that other stockholders may desire.

~~During~~Provisions ~~the~~in ~~course~~our ofcorporate ~~any~~charter ~~patent~~documents ~~litigation,~~and ~~there~~under Delaware law could bemake ~~public~~an ~~announcements~~acquisition of ~~the results of hearings~~us, ~~rulings~~which onmay ~~motions,~~be ~~and~~beneficial ~~other~~to ~~interim~~our ~~proceedings~~stockholders, inmore ~~the~~difficult ~~litigation.~~and Ifmay ~~securities~~prevent ~~analysts~~attempts by ~~or investors regard these announcements as negative, the perceived value of~~ our ~~product~~stockholders ~~candidates,~~to ~~platform~~replace ~~technology, programs,~~ or ~~intellectual~~remove ~~property could be diminished. Accordingly, the market price of~~ our ~~common~~current ~~stock may decline~~management.

~~ELZONRIS,~~Provisions in our ~~clinical~~corporate ~~drug~~charter ~~candidates~~and our bylaws may discourage, delay asor ~~well~~prevent asa ~~some~~merger, ofacquisition ~~our~~or other ~~product~~change ~~candidates~~in ~~and~~control ~~our~~of ~~platform~~us ~~technologies~~that stockholders may consider favorable, ~~are~~including ~~protected~~transactions in bywhich ~~intellectual~~they ~~property~~might ~~licensed~~otherwise ~~from~~receive ~~third~~a ~~parties,~~premium ~~including~~for ~~academic~~their ~~institutions~~shares. IfThese ~~the~~provisions ~~licensors~~could ~~terminate~~also limit the ~~licenses,~~price orthat ~~fail~~investors tomight be ~~prosecute,~~willing ~~maintain,~~to ~~enforce,~~pay ~~and/or~~in ~~defend~~ the ~~licensed~~future ~~patents~~for ~~and~~shares ~~patent~~of ~~applications,~~ our ~~competitive~~common ~~position~~stock, ~~market~~thereby ~~share,~~depressing ~~and~~the ~~business~~market ~~prospects~~price ~~would~~of beour ~~harmed~~common stock. Among other things, these provisions:

We· ~~are~~establish a ~~party~~classified toboard ~~several license agreements relating to certain patents and patent applications owned by third-parties, upon which certain aspects~~ of ~~our~~directors ~~business~~such ~~depend.~~that Innot particular, we hold an exclusive license from Scott and White Memorial Hospital, or Scott and White, for ELZONRIS and SL-501, and we hold three licenses, including an exclusive license and two non-exclusive licenses, from the University of Pittsburgh relating to SL-701. Our license agreement with Scott and White survives, unless earlier terminated, until the later of the expiration of the last to expire licensed patent or the date on which we owe no further payments to Scott and White. Our exclusive and our non-exclusive patent license agreements with the University of Pittsburgh survive, unless earlier terminated, until the expiration of the last to expire licensed patent, and our non-exclusive license with the University of Pittsburgh to use and reference certain clinical trial data and information survives for a term of twenty years unless earlier terminated. We hold an exclusive license from CanBas, Ltd. for SL-801 in all ~~worldwide~~members ~~territories other than Japan, Korea, Taiwan, and China. The agreement with CanBas, Ltd. survives until the later~~ of ~~ten years following~~ the ~~first~~board ~~commercial sale of each product in each country; the date upon which there~~ are noelected ~~more~~at ~~valid~~one claims; or the expiration or termination of the last regulatory exclusivity period, after which our license becomes fully paid, irrevocable, perpetual, non-exclusive and royalty-free. We also hold licenses from academic institutions relating to intellectual property underlying ELZONRIS and our product candidates and our StemScreen® platform technology. We expect to enter into additional license agreements as part of the development of our business.time

We· ~~depend~~allow ~~on our licensors to protect~~ the ~~proprietary~~authorized ~~rights~~

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