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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, ~~2021~~2022

☐	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 001-38552

PROVENTION BIO, INC.

(Exact name of registrant as specified in its charter)

Delaware

81-5245912

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

55 Broad Street, 2nd floor, Red Bank, NJ 07701 ~~(Address of registrant’s principal executive offices)~~

(~~908)~~Address ~~336-0360 (Registrant~~of registrant’s ~~telephone~~principal ~~number,~~executive ~~including area code~~offices)

(908) 336-0360

(Registrant’s telephone number, including area code)

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		PRVB		The Nasdaq Global Select Market

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒.

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

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

Indicate by check mark whether the registrant has submitted electronically 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). Yes ☒. No ☐.

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

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☐

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

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

The aggregate market value of the common stock held by non-affiliates of the Registrant as of June 30, ~~2021~~2022, the last business day of the Registrant’s last completed second quarter, based upon the closing price of the common stock as reported by The Nasdaq Global Select Market on such date was approximately $~~489~~244.7 million.

On ~~February~~March 2120, ~~2022~~2023, there were 6394,~~374~~780,~~738~~874 shares of the registrant’s common stock, $0.0001 par value, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE:

~~Portions of~~Certain ~~Provention~~documents ~~Bio, Inc.’s definitive proxy statement to be filed pursuant to Regulation 14A within 120 days after the end of the registrant’s fiscal year~~ are incorporated by reference into Part ~~III~~IV of this Annual Report on Form 10-K ~~and certain documents are incorporated by reference into Part IV~~.

PROVENTION BIO, INC.

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

		PAGE
FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY		2
	PART I	45
Item 1.	Business	45
Item 1A.	Risk Factors	54
Item 1B.	Unresolved Staff Comments	9192
Item 2.	Properties	9192
Item 3.	Legal Proceedings	9192
Item 4.	Mine Safety Disclosures	9192
	PART II	9293
Item 5.	Market for the Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	9293
Item 6.	[Reserved]	9394
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	9394
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	~~103~~106
Item 8.	Financial Statements and Supplementary Data	~~104~~107
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~104~~107
Item 9A.	Controls and Procedures	~~104~~107
Item 9B.	Other Information	~~104~~108
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	~~104~~108
	PART III	~~105~~109
Item 10.	Directors, Executive Officers and Corporate Governance	~~105~~109
Item 11.	Executive Compensation	~~105~~114
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	~~105~~133
Item 13.	Certain Relationships and Related Transactions and Director Independence	~~105~~134
Item 14.	Principal Accounting Fees and Services	~~105~~136
	PART IV	~~106~~137
Item 15.	Exhibits, Financial Statement Schedules	~~106~~137
Item 16.	Form 10-K Summary	~~108~~140
Signatures		~~109~~141

Unless the context otherwise indicates, references in this Form 10-K to “Provention Bio, Inc.” refers to Provention Bio, Inc., a Delaware corporation, and “Company,” “Provention,” “we,” “us” and “our” refer to Provention Bio, Inc. together with its consolidated subsidiaries. TZIELD is a trademark of Provention Bio, Inc. This Form 10-K also contains trademarks of third parties. Each trademark of another company appearing in this Form 10-K is the property of its owner.

FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY

This Annual Report on Form 10-K contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this Annual Report on Form 10-K, including, among others, statements regarding the ~~impact~~commercial launch of ~~the ongoing COVID-19 pandemic on our business~~TZIELD; the timing progress and potential success of our ongoing and planned clinical trials; the impact of the ongoing COVID-19 pandemic on our business; our ongoing and planned engagements with regulatory agencies relating to, and the expected timing of regulatory review of, or decisions relating to, our product candidates; execution of our business plans; and our current expectations regarding the ability of of our cash, cash equivalents and marketable securities to fund our projected operating requirements for at least the next 12 months, ~~are~~ are forward-looking statements. The words “believe,” “may,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements are subject to a number of risks, uncertainties and assumptions. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed herein may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.

Some of the key factors that could cause actual results to differ from our expectations include the following risks related to our business:

● ~~Our~~We ~~teplizumab~~may ~~Biologics~~not ~~License~~be ~~Application~~able ~~(“BLA”)~~to ~~resubmission~~complete inthe ~~February~~transaction ~~2022~~contemplated ~~for~~by the ~~delay~~Agreement ofand ~~clinical~~Plan ~~type~~of 1Merger ~~diabetes~~ (the “~~T1D~~Merger Agreement”) indated ~~at-risk~~March ~~individuals~~12, ~~(“At-Risk~~2023, ~~Indication”)~~by ~~may~~and ~~not~~among beProvention, ~~deemed~~Sanofi ~~complete~~S.A. (“Sanofi”) and ~~acceptable~~Sanofi’s ~~for~~indirect ~~review~~wholly orowned ~~ultimately~~acquisition ~~approved~~subsidiary, byZest ~~the~~Acquisition USub, Inc.S., ~~Food~~within ~~and~~the ~~Drug~~time ~~Administration~~frame ~~(“FDA”).~~we ~~Our~~anticipate, ~~BLA~~or ~~resubmission~~at ~~and~~all, ~~other~~which ~~regulatory~~could ~~efforts~~have ~~may~~an ~~not~~adverse beeffect ~~successful~~on inour ~~addressing~~business, tofinancial ~~the~~results ~~FDA’s~~and/or ~~satisfaction,~~operations. ~~the~~● ~~deficiencies~~The ~~identified~~pendency inof the ~~FDA’s~~proposed ~~July~~transaction ~~2021~~with ~~Complete~~Sanofi ~~Response~~may ~~Letter~~adversely ~~(“CRL”)~~affect ~~for~~ our ~~original~~results ~~teplizumab~~of ~~BLA~~operations, ~~for~~financial anresults ~~At-Risk~~and/or ~~Indication~~business generally, including ~~product~~our ~~quality~~ability to retain and ~~pharmacokinetic~~hire key personnel and maintain our relationships with collaborators, customers, contract research organizations (“PKCROs”), ~~comparability~~contract ~~considerations.~~manufacturing ~~Additionally~~organizations (“CMOs”), ~~our~~other ~~BLA~~vendors ~~resubmission~~ and ~~our~~other ~~regulatory~~business ~~efforts~~partners. ~~may~~● ~~not~~While ~~successfully~~the ~~address~~proposed ~~the~~transaction ~~FDA’s~~with ~~requests~~Sanofi ~~and~~is ~~requirements~~pending, ~~discussed~~we atare ~~our~~subject ~~January~~to ~~2022~~business ~~Type~~uncertainties Band ~~meeting~~contractual restrictions that could disrupt our business. ~~For~~● ~~example,~~We ~~although~~may wehave ~~included~~to inpay ~~the~~a ~~BLA~~termination ~~resubmission,~~fee asto ~~requested~~Sanofi byif ~~the~~certain ~~FDA~~circumstances occur, awhich ~~proposed~~could ~~adjusted~~require ~~14-day~~us ~~dosing~~to ~~regimen~~use ~~based~~cash onthat PKwould ~~modeling~~have ~~and~~otherwise ~~clinical~~been ~~data~~available for ~~teplizumab~~general tocorporate ~~match~~purposes. ~~exposure~~● ofShareholder ~~our~~litigation ~~planned~~could ~~commercial~~prevent ~~product~~or todelay ~~drug~~the ~~product~~closing ~~used~~of inthe ~~historical~~proposed ~~clinical~~transaction ~~trials,~~with ~~the~~Sanofi ~~FDA’s~~or PKotherwise ~~comparability~~negatively ~~concerns~~impact ~~may~~our ~~not~~business, beoperating ~~addressed~~results toand/or ~~their~~financial ~~satisfaction~~condition. ~~which~~● ~~could~~We ~~result~~have inincurred, ~~another~~and ~~CRL~~will ~~for~~continue ~~our~~to ~~BLA~~incur, ~~resubmission.~~direct ~~Additionally,~~and indirect costs as a result of ~~any~~the ~~final~~proposed ~~resolutions~~transaction towith ~~address~~Sanofi. ~~the~~● ~~FDA’s~~We ~~considerations~~are ~~related~~a tocommercial PKstage ~~comparability~~biopharmaceutical incompany ~~connection~~ with ~~the~~a ~~teplizumab~~limited ~~BLA~~operating ~~resubmission~~history, ~~for~~and anwe ~~At-Risk~~are ~~Indication,~~dependent on the ~~FDA~~commercial success of TZIELD. ● TZIELD may ~~require~~cause ~~that~~undesirable weside ~~further~~effects ~~characterize~~that ~~the~~could ~~teplizumab~~limit ~~planned~~its commercial ~~product~~potential. in● ~~the~~Our ~~PROTECT~~debt ~~Trial,~~agreement ~~including~~with ~~potentially~~Hercules ~~requiring~~Capital ~~additional~~Inc. ~~research,~~contains ~~analysis,~~milestones ~~clinical~~that ~~data~~must orbe ~~clinical~~achieved ~~trials,~~in order to ~~support~~draw adown ~~regulatory~~on ~~pathway~~our ~~for~~debt afacility ~~newly~~and ~~diagnosed~~operating ~~indication~~and offinancial ~~teplizumab~~covenants that restrict our business and financing activities. ● We are completely dependent on third parties to manufacture TZIELD and our product candidates, with no, to limited, redundancies in our supply chain,. The commercialization of TZIELD and ~~the~~clinical ~~commercialization~~trials of TZIELD and our product candidates could be halted, delayed or made less profitable if those third parties fail to ~~comply with regulatory requirements, fail to obtain manufacturing approval from the FDA or comparable foreign regulatory authorities, fail to~~ provide us with sufficient quantities of TZIELD or our other product candidates, or fail to do so at acceptable quality levels or prices. ● We are a small company that relies on third parties for execution of our business operations and plans, including ~~contract research organizations (“~~CROs”) and ~~contract manufacturing organizations (“~~CMOs”) for conducting our clinical trials, manufacturing and testing TZIELD and our other investigational and planned commercial drug products~~, including any additional work the FDA may require relating to product quality and PK comparability for teplizumab~~. If these parties fail to perform their contractual obligations or fail to comply with our requirements or the requirements of regulatory authorities, our business plans and operations may be negatively, and materially, impacted. ● The outbreak of the COVID-19 pandemic has caused delays to our clinical trials and could impact the quality or quantity of data we are able to collect or otherwise negatively impact the execution of our clinical trials. Moreover, the longer the pandemic persists, the more impact it may have on our clinical trials and other business plans and timelines, including any product launch plans if we successfully obtain approval for our teplizumab BLA resubmission for an At-Risk Indication in the United States, or obtain approval for teplizumab from other competent authorities, including the European Commission in the European Union and the Medicines and Healthcare Products Regulatory Agency (“MHRA”) in the UK. In addition, the COVID-19 pandemic has caused substantial disruption in the financial markets and may adversely impact economies worldwide, both of which could result in adverse effects on our business, operations and ability to raise capital. ● Clinical drug development involves a risky, lengthy and expensive process with an uncertain outcome. Although prior pre-clinical and clinical studies, data and analysis may support our belief in the potential of our pipeline of products, the results of our ongoing clinical trials for them may not be positive or supportive of our beliefs. We may encounter substantial delays in completing our ongoing clinical trials or starting any new clinical trials, which in turn may require additional costs, or we may fail to demonstrate adequate safety and efficacy to the satisfaction of applicable regulatory authorities for our product candidates, which could negatively and materially impact our business.

● The ~~FDA~~ongoing COVID-19 pandemic has caused delays to our clinical trials and may ~~conduct~~continue ~~additional~~to ~~site-inspections~~impact atour ~~any~~clinical oftrials, regulatory interactions and decisions relating to our ~~CMOs~~product ~~which~~candidates, ~~depending~~and onother ~~timing~~business plans and ~~outcomes~~timelines. In addition, ~~could~~the ~~negatively~~COVID-19 pandemic has caused substantial disruption in the financial markets and may adversely impact ~~timing~~economies worldwide, both of orwhich ~~regulatory~~could ~~decisions~~result ~~relating~~in toadverse ~~any~~effects ~~BLA~~on ~~resubmission~~our business, operations and ability to raise capital. ● WeClinical ~~are~~drug development involves a ~~clinical-stage~~risky, ~~biopharmaceutical~~lengthy ~~company~~and expensive process with aan ~~limited~~uncertain ~~operating~~outcome. ~~history~~Although prior pre-clinical and clinical studies, data and analysis may support our belief in the potential of our product candidates, the results of our ongoing clinical trials for them may not be positive or supportive of our beliefs. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of TZIELD in additional indications or any of our other product candidates, which could negatively and materially impact our business. ● We have incurred substantial operating losses in each year since our inception and expect to continue to incur substantial losses for the foreseeable future and we may never become profitable or, if achieved, be able to sustain profitability. ● We need to raise additional funding to support our business plans and operations. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate certain, or all of our product development programs or commercialization efforts. ● We have a limited number of product candidates and may not be able to acquire additional product candidates in the future. ● WeAlthough we have received ~~breakthrough therapy designation and priority review from the FDA,~~ a PRIority MEdicines (“PRIME”) designation from the European Medicines Agency (“EMA”), and the UK’s Innovation Passport from the Medicines and Healthcare Products Regulatory Agency (“MHRA”) for ~~teplizumab~~TZIELD, and we may pursue such expedited pathways for ~~other~~TZIELD ~~product~~in ~~candidates,~~other ~~however,~~indications ~~expedited~~or ~~development~~for orour ~~regulatory~~product ~~review~~candidates, ~~paths~~it may not actually lead to a faster development or regulatory review or approval process. ● We may not be able to obtain orphan drug marketing exclusivity for our product candidates. ● We may be unable to obtain or maintain governmental approvals to market TZIELD or our product candidates in the United States, European Union, United Kingdom or in other jurisdictions. ● The FDA, EMA or comparable foreign regulatory authorities could require the clearance, CE marking or approval of a companion diagnostic device for teplizumab for use in at-risk individuals, as a post-marketing commitment or otherwise, or the FDA may require other post-marketing commitments, which may require substantial financial resources and could delay regulatory approval or commercialization of teplizumab. ● Even if we receive regulatory approval for teplizumab or any of our product candidates, we may not be able to successfully commercialize any approved products, and the revenue that we generate from sales, if any, may be limited. ● We have never commercialized a product and are in the process of building and scaling our business for potential commercialization of a first product candidate, including building our compliance, medical affairs and commercial organizations, which, if we are not able to do so successfully could negatively impact our business, including the potential for a successful commercialization of our product candidates. ● We currently have a limited commercial organization. If we are unable to establish satisfactory sales and commercial support and marketing capabilities, we may not successfully commercialize any of our product candidates. ● We depend on rights to certain pharmaceutical compounds that are licensed to us, and any loss of our rights to them could prevent us from developing, commercializing or selling our products if approved. ● We are generally a virtual company and may be unable to adequately protect our information technology systems from cyber-attacks, which could result in the disclosure of confidential information, damage our reputation, and subject us to significant financial and legal exposure. ● We may be unable to protect our intellectual property rights or may infringe on the intellectual property rights of others. ● If product liability, securities law related, patent or other lawsuits are brought against us, we may incur substantial costs and liabilities and may be required to limit commercialization of our product candidates. See Part I, Item 3 Legal Proceedings for additional information.

	●	We currently have hired a commercial organization to support the commercialization of TZIELD. If we are unable to establish and maintain satisfactory sales and commercial support and marketing capabilities, we may not successfully commercialize TZIELD or any other product candidates for which we obtain marketing approval, and the revenue that we generate from sales, if any, may be limited.
	●	We depend on rights to certain pharmaceutical compounds that are licensed to us, and any loss of our rights to them could prevent us from developing, commercializing or selling our products if approved.
	●	We are generally a virtual company and may be unable to adequately protect our information technology systems from cyber-attacks, which could result in the disclosure of confidential information, damage our reputation, and subject us to significant financial and legal exposure.
	●	We may be unable to protect our intellectual property rights or may infringe on the intellectual property rights of others.
	●	If product liability, securities law related, patent or other lawsuits are brought against us, we may incur substantial costs and liabilities and may be required to limit commercialization of TZIELD or our product candidates. See Part I, Item 3 Legal Proceedings for additional information.

The forward-looking statements included herein are made only as of the date hereof. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. We undertake no obligations to update publicly any forward-looking statements for any reason after the date of this Form 10-K to conform these statements to actual results or to changes in our expectations.

We may from time to time provide estimates, projections and other information concerning our industry, the general business environment, and the markets for certain diseases, including estimates regarding the potential size of those markets and the estimated incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties, and actual events, circumstances or numbers, including actual disease prevalence rates and market size, may differ materially from the information reflected in this Annual Report. Unless otherwise expressly stated, we obtain industry, business information, market data, prevalence information and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data, and similar sources, in some cases applying our own assumptions and analysis that may, in the future, prove not to have been accurate.

PART I

ITEM 1. Business

Our Company

We are a ~~clinical~~commercial-stage biopharmaceutical company dedicated to intercepting and preventing immune-mediated diseases. Since our inception, we have devoted substantially all our efforts to business planning, research and development, ~~pre-commercial~~commercialization activities, recruiting management and technical staff, acquiring operating assets, partnering and raising capital. We ~~have not yet commenced any commercial revenue-generating operations,~~ do not have any positive cash flows from operations, and we will need to raise additional capital to finance our operations.

~~We have~~On ~~not~~November ~~received~~17, ~~regulatory~~2022, ~~approval~~the ~~for~~FDA ~~any~~approved TZIELD to delay the onset of ~~our~~Stage 3 ~~product~~Type ~~candidates~~1 Diabetes (“T1D”) in adult and ~~have~~pediatric ~~not~~patients ~~generated~~aged ~~any~~eight ~~revenue~~years ~~from~~and ~~commercial~~older ~~product~~with ~~sales~~Stage 2 T1D. In December 2022 we began shipping TZIELD to ~~date~~our distributors in the United States, which include a specialty distributor and, ~~through~~two specialty pharmacies. The full commercial launch of TZIELD began in mid-January 2023. As of December 31, ~~2021~~2022, we had an accumulated deficit of $~~292~~405.16 million. Since our inception in October 2016, we have financed our operations primarily through equity ~~offerings~~and debt financings. Through ~~these~~ equity offerings, we have raised aggregate net proceeds of approximately $~~364~~468.28 million as of December 31, 2022, net of underwriting discounts, commissions and other offering expenses. This includes completed underwritten public offerings in June 2020, which raised net proceeds of $103.3 million and in January 2021, which when combined with the partial exercise by the underwriters to purchase additional shares in February 2021, raised net proceeds of $102.3 million, as well as a private placement of common stock and warrants in July 2022 which raised net proceeds of $57.2 million. As of December 31, 2022, we have also raised $57.3 million in net proceeds from the sale of shares of common stock under our at-the-market (“ATM”) stock sale programs. In addition, we have received $23.7 million in net proceeds from a Loan and Security Agreement with Hercules Capital, Inc. (the “Hercules LSA”), which provides for up to $125.0 million of term loans in the aggregate.

We expect that over the next several years we will continue to incur losses from operations as we increase our expenditures in research and development in connection with our regulatory submissions, clinical trials and other development activities, as well as costs to support ~~our~~the commercialization ~~efforts~~of ~~to launch teplizumab, if we receive regulatory approval in the United States~~TZIELD. If adequate funds are not available to us on a timely basis, or at all, we may be required to terminate or delay certain development activities and certain ~~pre-~~ commercial efforts.

Merger Agreement with Sanofi

On March 12, 2023, we entered into the Merger Agreement with Sanofi and its indirect wholly owned acquisition subsidiary. Pursuant to the Merger Agreement, and upon the terms and subject to the conditions thereof, Sanofi’s acquisition subsidiary will commence a tender offer to purchase all of the issued and outstanding shares of our common stock at a price of $25.00 per share, to the seller in cash, without interest, but subject to any applicable withholding of taxes. If certain conditions are satisfied and the tender offer closes, Sanofi would acquire any remaining shares of our common stock by a merger of Sanofi’s acquisition subsidiary with and into the Company.

The Merger Agreement contemplates that the merger will be effected pursuant to Section 251(h) of the Delaware General Corporation Law, which permits completion of the merger without a shareholder vote promptly following consummation of the tender offer. The obligation of Sanofi and its acquisition subsidiary to consummate the tender offer is subject to the condition that there be validly tendered, and not properly withdrawn, prior to the expiration of the tender offer, that number of shares of our common stock that, together with the number of shares of our common stock, if any, then owned beneficially by Sanofi and its acquisition subsidiary (together with their wholly-owned subsidiaries), represents at least a majority of the shares of our common stock outstanding as of the consummation of the tender offer. The obligation of Sanofi’s acquisition subsidiary to consummate the tender offer is also subject to the expiration of the waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other customary conditions. Consummation of the tender offer is not subject to a financing condition.

Following the consummation of the tender offer and subject to the terms and conditions of the Merger Agreement, Sanofi’s acquisition subsidiary will merge with and into the Company pursuant to the provisions of Section 251(h) of the Delaware General Corporation Law as provided in the Merger Agreement, with the Company being the surviving corporation. At the effective time of the merger, each share of our common stock (other than shares of common stock (i) held in our treasury or owned by us or any of our direct or indirect wholly owned subsidiaries, (ii) owned by Sanofi, us or any of Sanofi’s or our respective direct or indirect wholly owned subsidiaries (other than Sanofi’s acquisition subsidiary), (iii) irrevocably accepted for purchase in the tender offer, and (iv) held by stockholders who have properly demanded appraisal of their shares of common stock in accordance with the Delaware General Corporation Law) will be cancelled and converted into the right to receive an amount in cash equal to the same $25.00 per share price payable in the tender offer, less applicable withholding of taxes.

The Merger Agreement includes customary representations, warranties and covenants. We have agreed to use commercially reasonable efforts to carry on our business in the ordinary course until the effective time of the merger. We have also agreed not to solicit or initiate discussions with third parties regarding other proposals for a strategic transaction involving the Company. Sanofi and its acquisition subsidiary have agreed to use reasonable best efforts to take actions that may be required in order to obtain antitrust approval of the proposed transaction, subject to certain limitations. The Merger Agreement also includes customary termination provisions for each of us and Sanofi, subject, in certain circumstances, to the payment by us of a termination fee of $100.0 million and the payment by Sanofi of a reverse termination fee of $158.0 million.

Strategy

Our mission is to intercept and/or prevent autoimmune disease and, when possible, durably reset the immune system ahead of disease progression, irreversible tissue damage, and organ failure. Our strategic priorities include:

● To advance commercialization efforts for TZIELD in our approved indication and continue to pursue clinical development of TZIELD in additional indications; ● To preferentially source, develop, and advance clinical-stage, or late preclinical-stage, therapeutic candidates targeting upstream mechanistic nodes in order to intercept and/or prevent immune-mediated diseases ● To leverage our immunology research and development capabilities to access different mechanistic approaches through in-licensed assets and/or partnerships ● To “predict” and “preempt” pathogenesis by identifying at-risk individuals and early-onset disease patients for whom early intervention may help prevent, ameliorate or delay the progression of chronic life-threatening and debilitating disease

We believe our interception and prevention conceptual platform, experience and expertise in translational medicine and immunology, and our ability to design and execute rapid go/no-go clinical trials makes us unique in the field of autoimmune-mediated disease.

We continue building on our access to relevant in-licensing opportunities from industry-leading pharmaceutical companies; innovative, development-stage biotechnology companies; and world-renowned academic centers. To date, we have obtained exclusive worldwide rights to two product candidates from MacroGenics, Inc. (“MacroGenics”), the asset acquisition of ~~teplizumab (PRV-031)~~TZIELD, ~~a Phase 3 clinical-stage candidate for T1D,~~ and the in-license of PRV-3279, a Phase 2 candidate for the potential treatment of systemic lupus erythematosus (“SLE”). We also in-licensed an enterovirus vaccine platform, targeting the prevention of coxsackievirus B (“CVB”) infections and the potential onset of T1D and celiac disease that includes PRV-101 from Vactech Ltd. (“Vactech”), a Finnish biotechnology company. Additionally, we in-licensed ~~PRV-015~~ (ordesekimab (also known as AMG 714, and formerly HuMax-IL1), a Phase 2 clinical-stage candidate targeting celiac disease, from Amgen, Inc. (“Amgen”).

Our Focus and Pipeline

Our goal is to pioneer substantial improvements in standards of care for autoimmune disease. Autoimmune disorders are a leading cause of death and disability around the world. Over 24 million patients in the United States live with autoimmune disease, with prevalence increasing significantly. There are over 100 types of autoimmune disorders which reduce patient quality-of-life, can result in complications such as cardiovascular risk and organ failures, and increase the risk of overall mortality.

Our portfolio aims to address autoimmune disease through modulating key upstream and nodal mechanisms of immune dysregulation. Our lead asset, TZIELD, is ~~focused~~approved ~~initially~~to ondelay ~~patients~~the ~~at-risk~~onset ~~for~~of ~~clinical~~Stage 3 T1D, ~~for~~in ~~which~~adult weand ~~have~~pediatric ~~resubmitted~~patients aaged ~~BLA~~eight inyears ~~February 2022~~ and ~~continue~~older towith ~~prepare~~Stage ~~for~~2 aT1D. ~~potential~~We are ~~approval~~also ~~and~~developing ~~commercialization,~~TZIELD ~~and~~for use in Stage 3 newly diagnosed T1D patients, for which we have an ongoing phase three clinical trial, the PROTECT study. Further, we intend to pursue the development of ~~prosecute~~ our other pipeline product candidates in SLE, celiac disease, and other debilitating and life-threatening autoimmune diseases.

While the etiology of autoimmune diseases is often complex, poorly characterized or unknown, infections are believed to play a key role in triggering disease. Inflammation is a natural consequence of most infections, as it is the immune system’s first response to ~~invading~~ invading pathogens in the event of injury or acute illness. Most of the time, this response is beneficial and well-controlled; helping to repair tissue damage and clear pathogens from the body. But when patients have the requisite genetic predisposition for autoimmunity, infections can also trigger chronic autoimmune responses that persist and progress long after the original insult has subsided. Our ~~pipeline~~product ~~of investigational~~portfolio ~~candidates~~targets ~~under development, target~~ upstream autoimmune pathways and viral triggers with the goal of intercepting and preventing life-threatening and debilitating immune-mediated diseases:

● ~~PRV-031~~TZIELD (teplizumab-mzwv): a ~~humanized, anti-~~CD3-directed ~~monoclonal~~ antibody ~~(“mAb”)~~indicated ~~for~~to delay the ~~delay~~onset of ~~clinical~~Stage 3 T1D in ~~at-risk~~adults ~~individuals~~ and ~~for~~pediatric patients ~~with~~aged ~~newly-diagnosed~~8 ~~T1D.~~years ~~Teplizumab~~and ~~has~~older ~~been~~with ~~designated~~Stage by2 ~~the FDA as an orphan drug for the treatment of newly-diagnosed~~ T1D. ~~Teplizumab~~We ~~was~~obtained ~~also granted breakthrough therapy designation from the~~ FDA inapproval ~~August~~for ~~2019,~~TZIELD ~~PRIME eligibility from the EMA~~ in ~~October~~November ~~2019~~2022. ~~and~~We ~~granted~~are analso ~~Innovation~~developing ~~Passport~~TZIELD infor ~~the~~use ~~United Kingdom~~ in ~~July~~Stage ~~2021~~3 ~~for~~newly ~~the~~diagnosed ~~delay~~T1D ~~of clinical type 1 diabetes in at-risk individuals~~patients; ● PRV-3279: a humanized bispecific scaffold molecule targeting the B-cell surface proteins, an inhibitory Fc receptor (“FcR”), known as FcgammaRIIb (“CD32B”), CD32B and CD79B, for the treatment of SLE and for the prevention of immunogenicity of biotherapeutics such as those used in gene therapy; ● ~~PRV-015 (~~ordesekimab): a human anti-interleukin 15 (“IL-15”) monoclonal antibody (“mAb”) for the treatment of gluten-free diet non-responsive celiac disease (“NRCD”), intercepting the effects of contaminating gluten in the most common autoimmune disorder without any approved medication; and ● PRV-101: a CVB vaccine to prevent acute CVB infections and, in those patients at-risk, to prevent the CVB-triggered autoimmune damage to pancreatic beta cells that may progress to T1D and damage to intestinal cells that may lead to celiac disease.

Recent Company Developments

~~PRV-031~~TZIELD (teplizumab~~, anti~~-~~CD3 mAb~~mzwv)

~~Type-B~~FDA ~~Pre-BLA Resubmission Meeting~~Approval

On ~~January~~November 2717, 2022, wethe ~~announced~~FDA ~~our~~approved ~~intent~~TZIELD to ~~resubmit~~delay the ~~teplizumab~~onset ~~BLA for the delay~~ of ~~clinical~~Stage 3 T1D in ~~at-risk~~adult ~~individuals~~and ~~following a~~pediatric ~~Type~~patients Baged ~~pre-BLA~~eight ~~resubmission~~years ~~meeting~~and older with ~~the~~Stage ~~FDA~~2 T1D. ~~The~~With ~~purpose~~this ofapproval, ~~the~~TZIELD ~~Type~~became ~~B pre-BLA resubmission meeting was to discuss~~ the ~~FDA’s feedback~~first ~~and~~disease-modifying ~~obtain~~therapy ~~agreement~~in ~~on our proposed clinical pharmacology data package~~T1D, ~~including~~a ~~data~~life-threatening ~~and~~autoimmune ~~analysis~~disease. In ~~from~~December ~~the~~2022 ~~pharmacokinetic/pharmacodynamic (“PK/PD”)~~we ~~substudy~~began ~~completed~~shipping byTZIELD us to ~~address~~our ~~the~~distributors ~~FDA’s PK comparability considerations contained~~ in the ~~CRL~~United ~~issued in July 2021. In preliminary meeting comments~~States, ~~the~~which ~~FDA~~include ~~noted~~a ~~that the data package presented does not adequately support PK comparability~~specialty ~~because~~distributor ~~predicted~~and ~~primary~~two PKspecialty ~~parameters are indicative of a lower exposure~~pharmacies. ToThe ~~address~~full ~~this concern, the FDA proposed, and we agreed, to use PK modeling to adjust the 14-day dosing regimen for the planned~~ commercial ~~product~~launch ~~to match the exposure~~ of ~~clinical~~TZIELD ~~material used~~began in ~~prior clinical trials by ensuring that the 90% confidence intervals for relevant PK parameters fall within the target 80~~mid-~~125% range.~~January ~~On this basis, the FDA agreed that we could proceed to resubmit the BLA~~2023.

5PRV-3279

Based on our and the FDA’s agreed upon PK modeling, and our experience with various doses and regimens tested in prior clinical trials, we announced that we planned to propose in the BLA resubmission a modified 14-day course of therapy to address the FDA’s comparability considerations and also include responses to address the CRL’s Chemical, Manufacturing, and Controls (“CMC”) and product quality considerations, as agreed with the FDA at a Type A meeting held in August of 2021.

Teplizumab BLA Resubmission

On February 22, 2022, we announced that we resubmitted the BLA for teplizumab for the delay of clinical T1D in at-risk individuals. The purpose of the resubmission is to address the FDA’s PK comparability considerations contained in the CRL issued in July 2021, as well as the CRL’s CMC and product quality considerations. The CRL did not cite any clinical deficiencies related to the efficacy and safety data packages submitted to the original BLA. The resubmission comes after last month’s Type B meeting at which the FDA proposed, and we agreed, to use PK modeling to adjust the 14-day dosing regimen for the planned commercial product to match the exposure of clinical material used in prior clinical trials by ensuring that the 90% confidence intervals for relevant PK parameters fall within the target 80-125% range. Under applicable FDA guidelines, the FDA has 30 days to review the resubmission, determine whether it is complete and acceptable for review, and provide a review goal date.

PRV-3279 (humanized anti-CD32B and CD79B bispecific)

PREVAIL Phase 2a Study

On January 20, 2022, we announced the initiation of the Phase 2a PREVAIL-2 study (PRV-3279 EVAluation In Lupus - Phase 2). PRV-3279 is an investigational humanized bispecific DART molecule targeting the B-cell surface proteins CD32B and CD79B, which has the potential to intercept the pathophysiology of SLE and other B cell-mediated autoimmune diseases, as well as to prevent the immunogenicity of biotherapeutic products such as gene therapy.

The PREVAIL-2 study is a Phase 2a proof-of-concept (“POC”) study in moderate-to-severe SLE patients induced into response with a short course of corticosteroids, and then monitored for relapse, after randomization to either PRV-3279 or placebo treatment. This design enables the withdrawal of most concomitant medications and clear POC evaluation. The study will be conducted in the United States and Hong Kong. Screening has commenced in the United States with the goal of identifying and enrolling approximately 100 patients to 6 monthly infusions of PRV-3279 or placebo, with primary efficacy readout at 24 weeks. PRV-3279 was well-tolerated in a prior single ascending dose Phase 1 study and a multiple ascending dose Phase 1b study, PREVAIL-1, establishing proof of mechanism with long-lasting inhibition of B cell function as shown by reduction in Immunoglobulin M (“IgM”) production 8 weeks post last dose of PRV-3279. These results, together with observations that CD32B genetic variants are associated with SLE, and that PRV-3279 inhibits B cells isolated from SLE patients, support evaluation in SLE.

The ongoing effects of the COVID-19 pandemic have affected the PREVAIL-2 study enrollment, primarily due to resource constraints at the clinical site level, subdued patient interest in participating in clinical trials of immune modulatory agents. In addition, there has been an increase in competition for enrollment in lupus trials. We now expect top-line results of the PREVAIL-2 study in the second half of 2024.

Impact of COVID-19 on our Business

We are closely monitoring continued developments related to the COVID-19 pandemic and are making every effort to ensure we remain focused on the health and well-being of our patients and our employees while maintaining business continuity. At this time, we are unable to predict what the long-term impact of the pandemic, and the associated economic downturn, will have on our business, including planned clinical trial readouts, regulatory interactions and submissions, manufacturing and supply chain, ~~regulatory review~~ and ~~related~~success ~~timelines for~~of our ~~BLA resubmission including any potential~~ United States launch of ~~teplizumab if approved by the FDA~~TZIELD. We have experienced some level of disruption to ~~three~~each of our current ~~or planned clinical~~ trials. In March 2020, we announced a temporary pause in the randomization of patients with newly diagnosed T1D into our global Phase 3 PROTECT study of teplizumab. During the second quarter of 2020, we resumed enrolling patients in the PROTECT study on a country by country and site by site basis and by the end of the third quarter of 2020, all sites were activated, with a majority of the sites actively enrolling patients. We completed target enrollment in the PROTECT study in August 2021 and expect to report top-line results in the second half of 2023, subject to change for any potential interruptions ~~related~~ related to COVID-19, regulatory decisions or issues or other interruptions. InWe ~~addition,~~initiated ~~we, with our development partner Amgen, collectively decided that, to protect~~ the ~~integrity~~ordesekimab ~~and quality of the PRV-015~~ Phase 2b trial in gluten free diet NRCD, ~~we would stagger study startup throughout the third quarter of 2020 rather than initiating screening~~ in ~~the second quarter of 2020, as had originally been scheduled. We initiated the Phase 2b trial in~~ August 2020 and the pandemic has caused difficulties and delays in recruitment. As a result of these delays, we now expect to report top-line results from the PROACTIVE study by the end of 2023. ~~Additionally,~~The ~~our~~ongoing ~~plans~~effects toof ~~initiate~~ the ~~Phase~~ 2aCOVID-19 ~~portion~~pandemic ofhave affected the PREVAIL -2 study inenrollment, ~~lupus~~primarily ~~patients~~due byto resource constraints at the ~~first~~clinical ~~half~~site oflevel ~~2021~~and ~~were~~subdued ~~delayed,~~patient ~~predominantly~~interest ~~due~~in toparticipating ~~COVID-19~~in ~~related~~clinical ~~impacts,~~trials ~~and~~of weimmune ~~recently~~modulatory ~~initiated~~agents. We now expect top-line results of the PREVAIL-2 study in ~~January~~the ~~2022~~second half of 2024.

Our Products and Product Candidates

~~PRV-031~~TZIELD (teplizumab~~; anti~~-~~CD3 antibody~~mzwv) for T1D

Our lead ~~product candidate~~asset, ~~teplizumab~~TZIELD, is a humanized mAb that binds with high specificity to a cell surface protein called CD3. The CD3 protein is a co-receptor that helps activate T cells and direct different kinds of immune responses. Preclinical data suggests that binding of ~~teplizumab~~TZIELD to CD3 triggers events that differentially inhibit the activation of self-reactive T cells without affecting regulatory T-cells (“Tregs”). This restores the important state of immune tolerance and may prevent self-reactive T cells from attacking beta cells in the pancreas. The ~~When~~FDA ~~administered~~approved TZIELD to ~~T1D~~delay ~~Stage~~the ~~2 subjects, teplizumab delayed progression and~~ onset of ~~clinical T1D, and when administered to~~ Stage 3 ~~subjects,~~T1D ~~teplizumab~~in ~~slowed~~adult ~~down~~and ~~the~~pediatric ~~loss~~patients ofaged ~~beta~~eight ~~cell~~years ~~function~~and inolder ~~all~~with ~~studies~~Stage ~~conducted~~2 ~~to date~~T1D. ~~Therefore,~~ weWe ~~believe~~are ~~teplizumab~~also ~~has~~developing ~~the~~TZIELD ~~potential~~for touse ~~intercept~~in ~~the~~Stage ~~T1D~~3 ~~disease~~newly ~~process~~diagnosed ~~along~~T1D ~~the entire continuum, potentially slowing or preventing the destruction of insulin-producing pancreatic beta cells~~patients.

Regulatory History and Key Developments

At-Risk Indication

~~Rolling~~FDA ~~BLA~~Approval ~~Submission~~ and ~~Publications~~Commercial Launch

InOn ~~June~~November ~~2019~~17, ~~data from the At-Risk trial~~2022, ~~sponsored by~~ the ~~National~~FDA ~~Institutes~~approved ofTZIELD ~~Health~~to ~~and~~delay ~~conducted by TrialNet, was presented at~~ the ~~79th~~ Annual American Diabetes Association meeting and published in the New England Journal of Medicine. Results of this study demonstrated that a single 14-day course of teplizumab significantly delayed the onset of ~~clinical-stage~~Stage 3 T1D, asin ~~compared~~adult toand ~~placebo,~~pediatric bypatients aaged ~~median of~~eight ~~at least 2~~ years ~~in at-risk children~~ and ~~adults. In August 2019, the FDA granted breakthrough therapy designation (“BTD”)~~older towith ~~teplizumab~~Stage ~~for~~2 ~~the delay or prevention of clinical~~ T1D ~~in individuals at-risk of developing the disease~~. ~~BTD~~With isthis anapproval, ~~FDA~~TZIELD ~~program designed~~became ~~to expedite~~ the ~~development~~first ~~and~~disease-modifying ~~review~~therapy ofin ~~therapeutic~~T1D, ~~candidates~~a ~~intended to treat serious or~~ life-threatening ~~diseases~~autoimmune disease.

InApproval ~~April~~for ~~2020~~TZIELD was based on results of the TN-10 Study, wea ~~announced~~pivotal randomized, double-blind, event driven, placebo controlled clinical trial which evaluated TZIELD for the ~~initiation~~delay of ~~the~~T1D ~~rolling~~(Stage ~~submission~~3, or clinical T1D) in Stage 2 T1D patients, defined by the presence of ~~our~~two ~~BLA~~or more T1D-related autoantibodies and dysglycemia. Seventy-six patients (TZIELD N=44, placebo N=32) were enrolled ages 8 to 49, with 72% under the ~~FDA~~age ~~for~~of ~~teplizumab~~18, anand ~~anti~~randomized to receive a single 14-~~CD3~~day ~~monoclonal~~course ~~antibody~~of either TZIELD or placebo by IV infusion. The primary efficacy ~~for~~endpoint in this study was the ~~delay~~time orfrom ~~prevention~~randomization to development of ~~clinical~~Stage 3 T1D diagnosis. In Study TN-10, Stage 3 T1D was diagnosed in at20 (45%) of the TZIELD-~~risk~~treated ~~individuals,~~patients asand ~~indicated~~in 23 (72%) of the placebo-treated patients. A Cox proportional hazards model was used to analyze the time to Stage 3 T1D diagnosis, stratified by age and oral glucose tolerance test status at randomization. The median time from randomization to Stage 3 T1D diagnosis was 50 months in the ~~presence~~TZIELD group and 25 months in the placebo group, for a difference of 25 ~~two~~months. orWith ~~more~~a median follow-up time of 51 months, therapy with TZIELD resulted in a statistically significant delay in the development of Stage 3 T1D, hazard ratio 0.41 (95% CI: 0.22 to 0.78; p=0.0066). The most common adverse reactions (>10%) that occurred during treatment and through 28 days after the last study drug administration from the TN-~~related~~10 ~~autoantibodies~~study were lymphopenia (73% TZIELD, 6% Placebo), rash (TZIELD 36%, Placebo 0%), leukopenia (TZIELD 21%, Placebo 0%) and headache (TZIELD 11%, Placebo 6%).

In ~~September~~December ~~2020,~~2022 we ~~announced~~began ~~submission~~shipping ofTZIELD to our distributors in the ~~clinical~~United ~~module~~States, which include a specialty distributor and ~~then~~two specialty ~~completion~~pharmacies. ofThe ~~the~~full ~~rolling~~commercial ~~submission~~launch of ~~the~~TZIELD ~~BLA~~began in ~~November~~mid-January ~~2020~~2023. We have entered into a co-promotion agreement Infor ~~January~~the ~~2021,~~launch weof ~~announced~~TZIELD ~~that~~in the ~~FDA~~United ~~had~~States ~~accepted~~(the “Sanofi Co-Promotion Agreement”) with Genzyme Corporation, a fully-owned subsidiary of Sanofi. Pursuant to the ~~BLA~~agreement, ~~for~~Sanofi ~~filing~~will ~~and granted~~commit ~~Provention’s~~commercial ~~request~~resources, ~~for~~including ~~Priority~~diabetes ~~Review~~field sales, key account directors, field-based reimbursement, thought leader liaisons and ~~assigned~~medical ascience liaisons ~~user~~to ~~fee~~expand ~~goal~~the ~~date~~number of ~~July~~key 2,healthcare ~~2021,~~professionals ~~under~~reached in the ~~Prescription~~United ~~Drug~~States. ~~User-Fee~~See ~~Act~~the (section entitled “~~PDUFA~~Significant Contracts and Agreements Related to Research and Development Activities – Co-Promotion Agreement”) in this Annual Report on Form 10-K. We also have established a patient support program to help patients that are prescribed TZIELD navigate coverage, reimbursement and access.

~~On March~~Post 3,marketing ~~2021,~~requirements weand ~~announced~~commitments were communicated to us in the ~~peer~~FDA ~~reviewed~~approval ~~publication~~letter offor ~~the~~TZIELD. ~~extended~~The ~~follow~~post-upmarketing ~~results~~requirements ~~from~~include the ~~“At-Risk”~~following ~~TN-10~~(i) ~~study showing~~conduct ~~that~~ a 12-month single ~~teplizumab~~arm, 14open-~~day~~label study ~~course~~to ~~delayed~~assess ~~the~~safety ~~onset~~and PK in pediatric patients (zero to eight years of ~~insulin~~age) ~~dependence~~with inStage ~~T1D~~2 ~~patients~~TID, followed by ~~approximately~~a ~~32.5~~12-month ~~months~~open-label extension, ~~compared~~(ii) toconduct ~~placebo.~~an ~~Prior~~observational toregistry ~~this~~study ~~publication,~~over ina ~~June~~period ~~2020,~~of weat ~~announced~~least ~~that~~10 ~~new~~years ~~data~~to ~~from~~assess ~~the “At~~long-~~Risk”~~term ~~TN-10~~safety ~~study~~in Stage 2 T1D patients, including ~~presented~~enrollment byof ~~TrialNet~~ at ~~the~~least ~~2020~~150 ~~American~~subjects ~~Diabetes~~exposed ~~Association~~to ~~Scientific~~TZIELD ~~Sessions~~and on(iii) ~~June~~complete ~~15,~~the ~~2020,~~PROTECT ~~which~~and ~~demonstrated~~PROTECT ~~that~~Extension atrials ~~single 14-day~~to ~~course~~provide ofcomparative safety ~~our~~data ~~lead~~on ~~drug~~the ~~candidate,~~clinical ~~teplizumab,~~product ~~delayed~~used versus the ~~median~~clinical ~~onset~~product ofutilized ~~clinical~~in ~~T1D,~~the asTN-10 ~~compared~~trial, and to ~~placebo,~~collect byan ~~approximately three~~additional ~~years~~42 inmonths of atlong-~~risk~~term ~~individuals.~~safety ~~These~~ data. ~~from~~The ~~the “At~~post-~~Risk”~~marketing ~~TN-10~~commitments ~~study~~were ~~added~~all ~~approximately~~related ~~one~~to ~~year~~Chemistry, toManufacturing, ~~the~~and ~~two-year~~Controls (“CMC”) ~~median~~and ~~delay~~include ~~that~~optimization ~~was~~and ~~previously~~validation ~~observed~~of analytical methods and ~~included~~standards asused ~~part~~to oftest ~~the~~TZIELD ~~BLA~~and ~~submission~~additional analytical characterization of TZIELD.

During the FDA’s review of the BLA, the FDA suggested, and we agreed, to revise our proposed indication to remove the term “prevention,” as the term “delay” more accurately reflects the results of the TN-10 trial.

Advisory Committee Meeting

On May 27, 2021, the FDA held an advisory committee meeting where the Endocrinologic and Metabolic Drugs Advisory Committee (“EMDAC”) voted ten “yes” and seven “no” on the question, “Does the information provided in the background documents and presentations by the Applicant and FDA show that the benefits of teplizumab outweigh the risks in support of approval to delay clinical type 1 diabetes mellitus?”.

CRL to BLA

On July 2, 2021, the FDA issued a CRL for our BLA for teplizumab for the delay of clinical T1D in at-risk individuals. In the CRL, the FDA stated that a single, low-dose PK/PD bridging study in healthy volunteers to compare planned commercial product with the drug product evaluated in clinical trials had failed to show PK comparability. The FDA further noted that PK comparability remains the primary endpoint for demonstration of comparability between the two products and that we will need to establish PK comparability appropriately between the intended commercial product and the clinical trial product or provide other data that adequately justify why PK comparability is not necessary.

In the CRL, the FDA cited several additional considerations related to product quality, which we believe we have either addressed in amendments already submitted to the BLA or can be addressed in the near-term. The CRL acknowledged that the FDA had not reviewed several amendments already submitted by us in response to certain CMC information requests.

The FDA also stated in the CRL that certain deficiencies conveyed during a recent general inspection, not specific to teplizumab, at a fill/finish manufacturing facility used by us will need to be resolved before approval. These deficiencies have since been resolved and the FDA issued an inspection close out letter to the facility in August 2021.

The CRL did not cite any clinical deficiencies related to the efficacy and safety data packages submitted to the BLA and confirmed the acceptability of the proposed proprietary name for teplizumab. The FDA requested that we provide a safety update as part of our BLA resubmission. The CRL contained other comments and recommendations that do not impact approvability, as well as general guidance regarding the resubmission process.

Rare Pediatric Disease Designation Application Decision

In October 2021, the FDA sent a second deficiency letter for our application for Rare Pediatric Disease designation for teplizumab. In its letter, the FDA’s Office of Orphan Drug Development (“OOPD”), noted that they believe the At-Risk Stage 2 population is greater than 200,000 subjects in the United States and we have one year from the date of the deficiency letter (or any approved extension thereof) to provide arguments otherwise, or our request for Rare Pediatric Disease designation will be considered voluntarily withdrawn. We currently do not have plans to take any additional steps to address OOPD’s positions. We previously applied for orphan drug designation of teplizumab for the use in at-risk individuals which was denied by the OOPD in February 2021.

PK/PD Substudy & Type A Meeting with the FDA

On September 13, 2021, we announced that we completed the collection of data from a PK/PD substudy in the ongoing PROTECT Phase 3 trial in newly diagnosed T1D patients, to determine comparability between our planned commercial drug product and clinical trial drug product for teplizumab. On November 18, 2021, we had a Type A meeting with the FDA to discuss the popPK model to be used for the purpose of planned commercial and clinical drug product comparison. In preliminary meeting comments, the FDA approved us populating the popPK model with data collected from patients receiving therapeutic doses of teplizumab in the PK/PD substudy of the ongoing PROTECT Phase 3 trial in newly diagnosed T1D patients (Commercial Product N~30 patients, Clinical Drug Product N~130 patients). Our preliminary analysis from the popPK model produced the following top-line results:

Geometric mean of the ratio of commercial to clinical drug product [90% Confidence Interval (“CI”)]

● 83.2% AUC Infinity [CI: 76.9 – 89.9] ● 85.3% AUC Day 13 [CI: 78.0 – 93.3] ● 86.5% CMAX [CI: 83.9 – 89.3]

These results were not final and are subject to ongoing review of both the data and the popPK model by the FDA and us. As anticipated, given teplizumab’s target mediated mechanism of clearance, the difference in exposure (AUC Day 13 and 0-infinity) between commercial product and clinical drug product observed in the prior single, fractional low dose PK/PD study in healthy volunteers is greatly reduced when the products are administered and compared in accordance with the higher therapeutic dosing regimen used in T1D patients. Along with previously reported physicochemical and PD data, as well as the immunogenicity and safety profiles, we reported our opinion in November 2021 that these preliminary results support comparability of the commercial product and clinical drug product, however, the FDA is the final decision maker on comparability, and we continue to support the FDA in its independent review and analysis of the data. Additionally, in November 2021, we disclosed preliminary PD marker information upon therapeutic dosing of teplizumab from the substudy data that we believe are supportive, although not determinative, of comparability between the two drug products. These PD markers included lymphocyte counts, CD3 receptor occupancy and T-cell activation.

FDA Feedback on BLA Resubmission Path

In January 2022, we announced our plans, based on feedback from the FDA at a pre-BLA Type B resubmission meeting, to resubmit the teplizumab BLA for the delay of clinical type 1 diabetes in at-risk individuals in the first quarter of 2022. See Recent Company Developments.

Teplizumab BLA Resubmission

On February 22, 2022, we announced that we have resubmitted the BLA for teplizumab for the delay of clinical T1D in at-risk individuals. Under applicable FDA guidelines, the FDA has 30 days to review the BLA resubmission, determine whether it is complete and acceptable for review, and provide the due date for action. The FDA’s guidance is to complete its review within 6 months of the BLA resubmission date. See Recent Company Developments.

European and UK Regulatory Interactions to Date

In October 2019, the EMA granted PRIME eligibility to teplizumab for the prevention or delay of clinical T1D in individuals at-risk of developing the disease. The PRIME initiative is designed to expedite the development and review of promising therapies that target an unmet need and show potential clinical benefit so the medicine can reach patients earlier. The designation offers the opportunity for enhanced interaction and dialogue with the EMA to optimize development, as well as the potential for accelerated assessment at the time of application for a marketing authorization.

In April 2021, we received initial non-binding scientific advice in a letter from the MHRA on a potential regulatory and market access path forward for teplizumab in the United Kingdom. The MHRA indicated its view that (i) there is an unmet medical need for a treatment that delays or prevents progression to T1D in at-risk patients, (ii) a Marketing Authorization Application (“MAA”) may benefit from additional supplementary information on patient preference, and (iii) reliance on one pivotal study to obtain a marketing authorization ought to meet the criteria described in the EMA/CPMP points to consider on application with (a) meta-analyses and (b) one pivotal study (CPMP/EWP/2330/99).

An Innovation Passport in the United Kingdom was granted on July 12, 2021 in recognition of the significant patient or public need of teplizumab. Grant of the Innovation Passport paves the way for enhanced engagement with the MHRA and health technology agencies such as the National Institute for Health and Care Excellence (“NICE”) in the Innovative Licensing and Access Pathway (“ILAP”). ILAP is a new pathway created in the United Kingdom to accelerate the time to market, thus facilitating patient access to innovative medicines. We are targeting a potential filing of a MAA in the first half of ~~2023~~2024, assuming favorable regulatory interactions. We plan to continue to evaluate the regulatory path forward in the United Kingdom and in the European Union based on our further engagement with the MHRA, EMA and other European stakeholders in ~~2022~~2023.

~~Newly~~PROTECT Study for Newly Diagnosed Indication

We commenced a Phase 3 clinical trial (the PROTECT study) in approximately 300 pediatric and adolescent patients with newly diagnosed T1D. The first patient was dosed in the second quarter of 2019. Inand ~~March 2020, in connection with the COVID-19 pandemic,~~ we announced a temporary pause in the randomization of patients with newly diagnosed T1D into the PROTECT study. In June 2020, we resumed enrollment of the PROTECT study on a country by country, site by site basis. We reached the target enrollment of 300 patients during the third quarter of 2021. Given the challenges the COVID-19 pandemic has presented to clinical trials across the industry, we ultimately exceeded the ~~enrollment~~ enrollment target by approximately ten percent to ensure there were a sufficient number of evaluable patients. We expect to report top line data from the PROTECT Phase 3 study in the second half of 2023 and determine whether the results support filing a supplemental BLA submission in late 2023 in a newly diagnosed indication for the treatment to preserve beta cell function in individuals with newly diagnosed T1D.

Market Opportunity for ~~teplizumab~~TZIELD

Patients with T1D use daily insulin injections to manage blood sugar to within a normal range. However, it is estimated that fewer than one-third of people with T1D in the United States achieve target blood glucose levels and insulin injections often cause hypoglycemia (low blood sugar). While insulin injections or infusion allow a person with T1D to stay alive, they do not cure the disease, nor do they necessarily reduce the risk of serious effects and long-term complications of T1D.

While pancreatic and islet cell transplantation offer the ability to normalize glucose levels and remove the dependence on insulin products, there are significant risks, resulting in a modest number of such transplants being conducted every year. There is risk associated with mandatory immunosuppression, which commonly results in the development of infections that may be life-threatening. Furthermore, pancreas transplantation may be associated with technical complications (vascular thrombosis, pancreatitis, infection, fistulas) as well as acute and chronic organ rejection. Islet cell transplantation can provide better glycemic control and protect patients from hypoglycemic episodes, but only approximately 50% of patients are insulin-free after three years of follow-up. In a small, published study, Bellin 2012, the addition of teplizumab to the conditioning regimen has improved those figures to approximately 70% insulin-free at 5 years, providing a rationale for the continued study of teplizumab in this context.

TZIELD is the only disease-modifying therapy approved in T1D.

Estimated Prevalence of T1D

According to the International Diabetes Federation, 8.8% of the adult population worldwide has diabetes, among whom 10-15% have T1D. According to the Juvenile Diabetes Research Foundation (“JDRF”), it is estimated that over 1.68 million people in the United States ~~have~~ have T1D and approximately five million are expected to have T1D by 2050, including nearly 600,000 under 15 years of age. The annual ~~economic~~ economic burden of T1D has been estimated by JDRF to be greater than $30.0 billion in the United States and greater than $90.0 billion globally.

Moreover, the incidence of T1D is increasing worldwide. In the period between 2005 and 2020, epidemiologists predict a 70% increase in the incidence of T1D in children in Europe, with the age of onset decreasing and the number of cases in children younger than five years old doubling.

Estimated Patient Prevalence of At-Risk Indications (all ages)

Based on our analysis of literature, we believe the following represent the approximate estimated prevalence of At-Risk individuals. Familial direct relatives have 10x greater incidence of T1D autoimmunity than the general population:

Market	Stage 1 / Stage 2 >2 Autoantibodies	Stage 2 >2 Autoantibodies and Dysglycemia	Stage 2 Familial Direct Relatives of T1D Patients who exhibit >2 Autoantibodies and Dysglycemia
United States	300,000	200,000	30, 000
European Union	180,000-300,000	120,000-200,000	18,000-30,000

IfOur ~~the FDA approves our BLA resubmission for teplizumab for use in “At-Risk” individuals, our potential~~ commercial launch of ~~teplizumab~~TZIELD ~~would~~will initially focus on familial direct relatives of T1D patients with two or more autoantibodies and dysglycemia, and then expand to ~~other~~the general populations identified as ~~At-Risk~~Stage 2 T1D through potentially increased universal pediatric screening in the United States.

Since we began building our commercial infrastructure in 2020, we have enhanced our commercial capabilities and launch readiness in anticipation of a potential approval of teplizumab in the United States. To date, we have conducted primary market research and co-creation sessions with more than 1,300 participants, including pediatric endocrinologists, adult endocrinologists, certified diabetes educators, T1D patients, caregivers, at-risk individuals, T1D relatives, payers, advocacy groups, among others. These insights have been critical in the development of our go-to-market strategy.9

Since we began building our commercial infrastructure in 2020, we have enhanced our commercial capabilities and launch readiness in anticipation of FDA approval of TZIELD. To date, we have conducted primary market research and co-creation sessions with more than multiple stakeholder audiences, including pediatric endocrinologists, adult endocrinologists, certified diabetes educators, T1D patients, caregivers, at-risk individuals, T1D relatives, payers, advocacy groups, among others. These insights have been critical in the development of our go-to-market strategy.

Our commercial priorities going forward are as follows:

Near-Term Focus

● ~~Launch~~Commercialization ~~planning~~ in the United States for the Atat-~~Risk~~risk ~~Indication~~indication ● T1D disease and risk factor education ● Health care professional (“HCP”) and key opinion leader (“KOL”) engagement ● Patient advocacy group engagement ● Increasing awareness of screening of familial direct relatives of known T1D patients

Mid-Term Focus

● Inform and support execution of our regulatory strategy and engagement with the MHRA in the United Kingdom and EMA in the European Union on potential approval pathways for ~~teplizumab~~TZIELD ● Commercial planning / partnership in European Union ● Planning for potential ~~Newly~~BLA ~~Diagnosed~~supplement submission for newly diagnosed indication ● Increasing awareness of screening of non-familial relatives with risk factors for T1D

Long-Term Focus

● Market expansion with broader general population screening ● Market expansion with label expansion (e.g., re-dosing, <8-year-old patients), combinations and non-T1D indication(s) ● Potential research efforts to support the addition of age groups and multiple courses of treatment ~~for both At-Risk and Newly Diagnosed potential indications~~.

Estimated Patient Incidence of Newly Diagnosed Indications (all ages)

It is estimated that approximately 64,000 new cases of clinical T1D in the United States are diagnosed each year, approximately 26% of which are in patients aged eight through 17 years (i.e., the target population of our PROTECT study in Stage 3/newly diagnosed T1D; the Protégé study included subjects aged eight through 35 years).

Overall, more than 90,000 children are diagnosed each year in the United States and the largest five European countries combined.

Market Exclusivity

We intend to seek data exclusivity or market exclusivity for teplizumab provided under the Federal Food, Drug, and Cosmetic Act (“FDCA”), and similar laws in other countries. In the United States, we believe that teplizumab will qualify for 12 years of data exclusivity under the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which was enacted as part of the Patient Protection and Affordable Care Act (“ACA”). Under the BPCIA, an application for a biosimilar product or BLA cannot be submitted to the FDA until four years, or if approved by the FDA, until 12 years, after the original brand product identified as the reference product is approved under a BLA. The BPCIA provides an abbreviated pathway for the approval of biosimilar and interchangeable biological products. The abbreviated regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on its similarity to an existing brand product.

T1D Lifecycle Management and other potential indications

We are currently exploring and supporting research and lifecycle management programs for T1D beyond our current pipeline. Within T1D, we are exploring programs which include repeat dosing and age expansion for both at-risk individuals and newly diagnosed patients, as well as subcutaneous formulations and combination therapies potentially with antigens, regulatory T cells, metabolic drugs, immune modulators and islet or beta cell transplants. We are evaluating other potential indications for teplizumab including, gastrointestinal (“GI”) immunology disorders such as Crohn’s disease, celiac disease and autoimmune hepatitis or rheumatology disorders such as rheumatoid arthritis. These initiatives may result in or include new clinical studies sponsored by us or investigator-initiated studies, which are clinical studies initiated and sponsored by physicians or research institutions with funding from us.

T1D Background Information

T1D is the end result of immune-mediated destruction of the insulin-producing beta cells of the pancreas and is one of the most common and serious chronic conditions occurring in childhood. T1D patients require life-long dependence on insulin products delivered through multiple daily injections or continuous infusion pumps. While the disease presents in children and adults, the vast majority of T1D is diagnosed in children, with more than half of T1D patients diagnosed before the age of 14 years. The life-expectancy of individuals with younger-onset disease is on average 16 years shorter than non-diabetic individuals. Individuals diagnosed before the age of 10 years have a 30-times greater risk of serious cardiovascular outcomes than the general population resulting in decreased life expectancy, compared to healthy individuals. It is believed the loss of beta cells, which is more severe and rapid in younger individuals leading to increased glycemic load, is the cause of increased cardiovascular-related deaths. The disease is believed to occur in genetically susceptible individuals upon exposure to environmental triggers. In addition, because of a similar genetic predisposition, patients with T1D are at high risk of developing celiac disease. Celiac disease is characterized by autoimmunity in the gut and other organs triggered by consumption of gluten and can lead to malnutrition and other complications including a form of cancer called lymphoma. There is no approved therapy for celiac disease.

Lack of insulin secretory capacity has serious consequences, even when patients receive insulin replacement therapy. The complications of T1D include eye disease, nerve damage, kidney disease and heart disease. Diabetic retinopathy has a prevalence of approximately 80% among patients with T1D and is the leading cause of vision impairment and blindness among adults. Moreover, about 60% to 70% of people with diabetes present some form of neuropathy that can induce numbness, weakness and blood pressure dysregulation. In addition, diabetic nephropathy is the leading cause of chronic kidney disease and affects about 30% of T1D patients. Diabetes can also cause severe heart complications and adults with diabetes are two to four times more likely to die from heart disease than adults without diabetes.

In summary, people with T1D experience substantial morbidity and mortality owing to chronic complications.

~~Current~~Overview of T1D ~~Treatment~~Biology ~~Options~~ and ~~Their~~mechanism ~~Limitations~~of action of TZIELD

So far, no disease-modifying or curative treatment exists for T1D. Patients with T1D still need to use daily insulin injections to manage blood sugar to within a normal range. However, it is estimated that fewer than one-third of people with T1D in the United States achieve target blood glucose levels and insulin injections often cause hypoglycemia (low blood sugar). While insulin injections or infusion allow a person with T1D to stay alive, they do not cure the disease, nor do they necessarily reduce the risk of serious effects and long-term complications of T1D.

New approaches are still required and could significantly enhance patient care. In particular, there is a strong need for new preventive or curative treatments. Among the different possible strategies, primary prevention through vaccination, which we are investigating with PRV-101, and secondary prevention (interception) with a disease-modifying non-chronic immune modulator, which we are investigating with teplizumab.

Overview of T1D Biology and teplizumab Mechanism of Action

T1D is an autoimmune disease which occurs in genetically-predisposed individuals. Specialized white blood cells of our immune system, known as self-reactive T cells (also called auto-reactive), are triggered, presumably by CVB viral infection of the beta cells in at least 50% of cases, to attack and destroy beta cells of the pancreas, thus causing a decline in the natural production of insulin. Simultaneously, another type of T cell, Tregs, which normally suppress the activity of self-reactive T cells, fail to do so effectively.

The clinical progression of T1D is relatively well understood and predictable, as it is a continuum marked by clinically-relevant biomarkers which identify stages of the disease. In an individual with genetic risk (primarily driven by human leukocyte antigen (“HLA”) haplotypes), the natural evolution of T1D has been described in stages (see figure below).

	●	Stage 1: emergence of T1D-related autoantibodies which reflect the initiation of the autoimmune process; this stage is associated with normoglycemia.
	●	Stage 2: persistence T1D-related autoantibodies, but with further loss of beta cell function and development of dysglycemia.
	●	Stage 3: symptomatic or clinical T1D, when remaining beta cell capacity is insufficient to maintain glucose metabolism.

Stages of Type 1 Diabetes

It is important to note that once subjects develop two or more T1D-related autoantibodies (Stage 1), the progression to clinical T1D (Stage 3) is not a matter of “if” but “when” as greater than 95 percent of the Stage 1 subjects and virtually all of the Stage 2 subjects will progress to Stage 3 necessitating insulin dependence. The progression of Stage 1 to Stage 3 is 44% in five years, and of Stage 2 to Stage 3 is 75% in four to five years.

~~Current~~TZIELD binds to CD3 (a cell surface antigen present on T lymphocytes) to delay the onset of Stage 3 T1D. The mechanism may involve partial agonistic signaling and deactivation of pancreatic beta cell autoreactive T lymphocytes. Clinical ~~Development~~studies ~~Program~~have shown that TZIELD binds to CD3 molecules on the surface of both CD4+ and CD8+ T cells during treatment, with internalization of the TZIELD/CD3 complex from the surface of T cells. TZIELD also leads to an increase in the proportion of regulatory T cells and of exhausted CD8+ T cells in peripheral blood, both believed to be important mechanisms of its proposed immunomodulatory properties. TZIELD is not a chronic administration therapy, and a single 14-day course led to a median delay of at least two years in the onset of Stage 3 T1D.

12Ongoing Clinical Studies

Newly-Diagnosed Patients (Stage 3)

Phase 3 Clinical Trial of teplizumab in Pediatric Patients Newly-Diagnosed T1D (PROTECT Study)

The PROTECT study (PROvention T1D trial Evaluating C-peptide with Teplizumab) is a randomized, double-blind, placebo-controlled, multicenter Phase 3 clinical trial in pediatric and adolescent patients (aged eight to 17 years) that are newly-diagnosed with clinical T1D. Patients with minimum beta-cell cell function (C-peptide >0.2 pmol/mL) and within six weeks of T1D diagnosis will receive two courses of teplizumab, six months apart. Each course will consist of 12 days of teplizumab administered intravenously, with a cumulative dose of ~9.0 mg/m2. The primary endpoint is the change in C-peptide at 18 months. Secondary endpoints including insulin use, HbA1C levels, hypoglycemic events and safety will also be evaluated. ~~The~~We ~~study~~commenced ~~is expected to enroll approximately 300 patients with 2:1 randomization (200 active: 100 placebo) and~~ enrollment ~~commenced~~ in the second quarter of 2019. Weand reached the target enrollment of 300 patients during the third quarter of 2021. Given the challenges the COVID-19 pandemic has presented to clinical trials across the industry, we ultimately exceeded the enrollment target by approximately ten percent to ensure there were a sufficient number of evaluable patients. We expect to report top line data from the PROTECT Phase 3 study in the second half of 2023.

InPrior ~~March~~Clinical 2020, we announced a temporary pause in the randomization of patients with newly diagnosed T1D into our global Phase 3 PROTECT study of teplizumab. This pause was taken to protect patients, caregivers, clinical site staff, company employees and contractors as part of the collective global efforts to combat the COVID-19 pandemic. Patients that were undergoing study therapy were allowed to complete their course, as recommended by the PROTECT study’s Data Safety Monitoring Board, which was expanded to include infectious disease expertise. In June 2020, we resumed enrollment on a country by country, site by site basis based upon review of local COVID-19 infection rates and the site’s ability to maintain the safety of participants.Evaluation

WeTo ~~are~~date, ~~also~~clinical ~~conducting~~development anof ~~extension~~teplizumab ~~study~~has ofincluded ~~the~~both ~~PROTECT~~academic ~~trial,~~and ~~PROTECT~~biopharmaceutical ~~Extension~~sponsors. ~~The~~Approximately ~~purpose~~1,100 ofsubjects have ~~this~~been ~~study~~enrolled isin tocompleted ~~evaluate~~teplizumab ~~the~~clinical ~~long-term safety~~trials, ~~profile~~with ofover ~~PROTECT~~800 ~~study~~subjects ~~patients~~receiving ~~who~~teplizumab. ~~received~~These astudies ~~12-day~~represent various ~~course~~doses, offormulations, ~~teplizumab~~and ~~treatment~~indications ~~upon T1D diagnosis~~ and aincludes ~~second~~earlier 12smaller investigator-~~day course~~sponsored ofstudies. ~~teplizumab~~The ~~treatment~~majority ~~approximately~~of ~~six~~patients were ~~months~~enrolled ~~later.~~in ~~The~~T1D ~~extension~~studies ~~study~~(>1,000), ~~will~~and ~~provide~~the arest ~~total~~in ofrenal 5or renal-~~year~~pancreatic ~~safety~~allograft ~~data~~rejection, ~~from~~pancreatic ~~the~~islet ~~initiation~~transplant, ofpsoriatic ~~treatment~~arthritis ~~for~~or ~~the~~plaque ~~participants~~psoriasis ~~in the PROTECT Study~~trials.

Prior Clinical Evaluation of teplizumab

To date, clinical development of teplizumab has included both academic and biopharmaceutical sponsors. Approximately 1,100 subjects have been enrolled in teplizumab clinical trials, with over 800 subjects receiving teplizumab. These studies represent various doses, formulations, and indications and includes earlier smaller investigator-sponsored studies. The majority of patients were enrolled in T1D studies (>1,000), and the rest in renal or renal-pancreatic allograft rejection, pancreatic islet transplant, psoriatic arthritis or plaque psoriasis trials.

In T1D patients, ten studies have been conducted, of which nine involved intravenous dosing (two Phase 1, three Phase 2, two Phase 3 and a Phase 3 extension study) and one subcutaneous dosing (Phase 1).

Among the T1D studies of teplizumab:

	●	In Stage 2, the At-Risk study enrolled Stage 2 individuals who were characterized as having at least two T1D autoantibodies and evidence of hyperglycemia.
	●	In Stage 3, five studies (Study 1, Study 2, Study 3, Study 4 “AbATE”, and Study 5 “Delay”) were completed under the direction of Dr. Kevan Herold (currently at Yale University) and collaborators. Studies 2, 3 and 4 were sponsored by the Immune Tolerance Network. Four additional studies were conducted by MacroGenics: three with intravenous administration (“Protégé”, “Protégé Extension”, and “Protégé Encore”) and one with subcutaneous administration (SUBCUE) of teplizumab. Among these studies, “Protégé” and “Protégé Encore” were Phase 3 studies. Protégé was the largest completed study for treatment of T1D, which enrolled 516 patients (aged eight to 35 years and T1D diagnosis within 12 weeks of study entry) and randomized into three teplizumab dosing regimens compared to placebo. Teplizumab showed promising immunological and clinical activities in these studies and was well tolerated. In particular, teplizumab treatment showed promising data on the preservation of C-peptide levels and the reduction of exogenous insulin use.

~~Stage~~Clinical Trials in Stage 2 ~~Programs~~Patients

Phase 2 Clinical Trial of teplizumab in At-Risk Relatives who develop T1D (At-Risk TN-10 Study)

The “At-Risk” TN-10 Study, a pivotal Phase 2 clinical trial, conducted at TrialNet sites and sponsored by National Institute of Diabetes and Digestive and Kidney Diseases (“NIDDK”), part of the National Institute of Health (“NIH”), evaluated teplizumab for the delay of clinical T1D in at-risk individuals. At-risk was defined by the presence of two or more T1D-related autoantibodies and dysglycemia (abnormal glucose metabolism). 76 subjects were enrolled, ages eight to 49 years, with 72 percent under the age of 18, and randomized to receive a single 14-day course of either teplizumab (cumulative dose of ~9.0 mg/m2) or placebo. Subjects were followed in a blinded fashion until a minimum 40 subjects developed clinical T1D which triggered the analysis of the primary endpoint. Thereafter, subjects were followed indefinitely in other TrialNet studies. Those who developed clinical T1D after the primary analysis was completed are eligible to enroll in a Provention trial, PRV-031-002, which we initiated in March 2020~~, described below~~.

Participants over eight years of age with Stage 2 T1D (presence of at least two T1D autoantibodies and dysglycemia, who were non-diabetic relatives of T1D individuals) were randomized 1:1 to receive teplizumab or placebo. Dysglycemia was defined on oral glucose tolerance test (“OGTT”) as: (a) Fasting plasma glucose ≥ 110mg/dL, and <126mgdL, or (b) 2-hour plasma glucose ≥140mg/dL, and <200mg/dL, or (c) 30, 60, or 90-minute value on OGTT ≥200mg/dL.

The primary endpoint was the time from randomization to the clinical diagnosis of diabetes, using ADA criteria. Criteria for clinical T1D diagnosis are based on glucose testing, or the presence of unequivocal hyperglycemia with acute metabolic decompensation (diabetic ketoacidosis). One of the following criteria must be met on two occasions as soon as possible but no less than one day apart for diabetes to be defined:

	●	Symptoms of diabetes plus casual plasma glucose concentration > 200 mg/dL (11.1 mmol/l). Casual is defined as any time of day without regard to time since last meal. The classic symptoms of diabetes include polyuria, polydipsia, and unexplained weight loss.
	●	Fasting plasma glucose ≥ 126 mg/dL (7 mmol/l). Fasting is defined as no caloric intake for at least eight hours.
	●	2-hour plasma glucose ≥ 200 mg/dL (11.1 mmol/l). The test should be performed using a glucose load containing the equivalent of 1.75g/kg body weight to a maximum of 75 g anhydrous glucose dissolved in water.

Teplizumab was administered over a 14-day course: 51 μg/m2, 103 μg/m2, 207 μg/m2, and 413 μg/m2 on study days 0–3, respectively, and 826 μg/m2 on each of study days four through 13. A total of 112 participants were screened and 76 were randomized, 44 to teplizumab and 32 to placebo. The baseline characteristics were balanced for age (median ~13-14 years of age), relationship to the relative with T1D, type of T1D autoantibodies and HbA1c.

~~At-Risk TN-10 Study– Primary Data Readout in June 2019~~13

Treatment with a single course of teplizumab delayed the time to T1D (see figure below): 19 of the 44 (43%) teplizumab-treated and 23 of the 32 (72%) placebo-treated participants were diagnosed with T1D. The annualized rates of T1D development were 14.9% and 35.9% per year, for the teplizumab and placebo groups, respectively. The median time to T1D was 24.4 months in the placebo and 48.4 months in the teplizumab groups (hazard ratio = 0.412 (95% CI: 0.216, 0.783) p=0.006 (2-sided)).

Time to T1D

In pre-specified analyses, the effects of teplizumab on the primary outcome based on baseline characteristics were evaluated. Although subgroup analyses had small sample sizes and need to be taken with caution, participants without anti-ZnT8 antibodies showed a greater effect size compared to those who did not have the antibody. The presence of HLA-DR4 and absence of HLA-DR3 were also associated with greater effect size, as was a below median C-peptide response to the OGTT at baseline (1.75 nmol/L). These larger effect sizes are attributed to more rapid progression of the disease in these subgroups, rather than clinically-actionable baseline characteristics able to predict response to teplizumab. We believe all patients with Stage 2 T1D can benefit from teplizumab as long as they have beta cells to be protected.

With regard to adverse events, similar to previous studies with teplizumab in newly-diagnosed T1D patients, the most common adverse events were transient lymphopenia and transient rash. Regarding lymphopenia, lymphocyte count declined to a nadir on day five by 72.3% (IQR 82.1, 68.4%) (p<0.0001) and then returned to baseline levels. This transient lymphopenia is believed to be the mechanistic consequence of margination (adhesion to the blood vessel wall) rather than depletion. Fifteen (34.1%) of the grade 3 events in the teplizumab group involved lymphopenia during the first 30 days after study drug administration. The lymphocyte counts recovered quickly: Lymphopenia resolved in all participants by day 45 except in one, whose counts returned on day 105. A spontaneously resolving rash, as previously noted, occurred in 36% of drug treated participants. The rates of clinical infection were similar in the two treatment arms.

Other anti-CD3 mAb experimental treatments, such as otelixizumab, have been associated with Epstein Barr virus (“EBV”), clinical reactivation in patients with latent infection. At entry, 30 participants (39%) (16 teplizumab and 14 placebo) had antibodies against EBV in TN-10. At weeks 3-6 after study drug treatment, there was quantifiable EBV DNA in whole blood in eight of the seropositive participants – all in the teplizumab group, one of whom had symptoms of pharyngitis, rhinorrhea, and cough on day 38. In these participants, the EBV DNA levels were below the level of quantification between day 43 and 134 (average 77 days). At entry, 17 participants (ten teplizumab and seven placebo) had antibodies against cytomegalovirus (“CMV”). One teplizumab participant, who was CMV seropositive, had detectable levels of CMV DNA at day 20 that was undetectable by day 42. These results show that, while viral reactivation may be observed during the first weeks post-teplizumab administration, these are typically asymptomatic and that immune competence is maintained that results in the resolution of viremia.

The TN-10 trial results demonstrate that a single course of teplizumab significantly delayed the progression to clinical T1D in high-risk Stage 2 relatives who had at least two autoantibodies and dysglycemia. The median delay in the diagnosis of diabetes was approximately two years, and at the conclusion of the trial, the frequency of diabetes-free subjects was double in the drug (57%) vs placebo-treated subjects (28%). The relatively rapid rate of progression to clinical diabetes in the placebo group, consistent with the previously reported natural history, reflects the very high risk of these individuals and reflects the inevitability of progression from Stage 2 to Stage 3 disease, consistent with observations of high rates of beta cell killing in these subjects. The rapid development of clinical T1D may also reflect the enrichment of pediatric participants (72.4%) in whom the rate of progression is rapid. The safety profile was consistent with previous experience and teplizumab was well-tolerated.

At-Risk TN-10 Study - Extended Data Readout in June 2020

After the primary readout in the TN-10 study, patients were followed indefinitely in other TrialNet observational studies. On June 15, 2020, we announced that new data from the TN-10 study was presented on that date by TrialNet at the 2020 American Diabetes Association Annual meeting. These follow-up data demonstrated that the single 14-day course of teplizumab had delayed the onset of clinical T1D, as compared to placebo, by a median of approximately three years in at-risk individuals. In other words, the follow-up data from the TN-10 added approximately one year to the two-year median delay that was previously observed and reported in the primary analysis. The median time to clinical diagnosis of T1D after one course of teplizumab was approximately five years (59.6 months) compared to approximately two years (27.1 months) for the placebo group (unchanged from previously published data). Nearly half of those treated with teplizumab are estimated to be free of clinical T1D at five years. The hazard ratio was 0.457 or a 54 percent reduction in risk of developing clinical T1D (p=0.01).

On March 3, 2021, we announced the peer reviewed publication of the extended follow-up results from the TN-10 study showing that a single teplizumab 14-day course delayed the onset of insulin dependence in T1D patients by approximately 32.5 months compared to placebo.

In addition, teplizumab treatment was associated with a greater on-study C-peptide (p=0.009), a measure of a persons’ own insulin production, compared to placebo. For both groups, C-peptide AUC mean slopes preceding study entry were similar and declining. In the placebo group, this decline continued over the six months after study entry. By contrast, the teplizumab-treated group showed an increased C-peptide AUC over this period (p=0.02 relative to study entry).

Note: Adapted from presentation 277-OR at ADA 2020 (Sims et al, June 15, 2020).

Mechanistically, the association between the expansion of partially exhausted CD8 T cells and the delay of clinical T1D conferred by teplizumab, previously described in newly diagnosed T1D patients, was also confirmed in subjects at-risk. C-peptide levels at three, six and 18 months post-teplizumab administration correlated with the levels of exhausted CD8+ T cells in the circulation (p=0.01 vs placebo). Subjects with the highest increase (top quartile) in exhausted CD8 T cells at 3 months post-teplizumab had no progression to clinical T1D in the period of observation of the study (p=0.005 vs placebo). Finally, inflammatory cytokines IFN-gamma and TNF-alpha were lower in the exhausted CD8 T cells in teplizumab vs placebo-treated subjects (p<0.0001).

In summary, the follow-up results showed that teplizumab’s effect on delaying the onset of clinical T1D was not only consistent from previous analyses, but was durable and now extended the median delay to approximately three years, without any additional safety signals noted.

~~Stage~~Clinical Trials in Stage 3 ~~Programs~~Patients

Protégé Study

Protégé was a randomized, controlled Phase 3 clinical trial conducted in 83 centers in North America (United States, Canada, Mexico), India, Israel, and Europe (Czech Republic, Estonia, Germany, Latvia, Poland, Romania, Spain, Sweden, Ukraine) completed between 2007 and 2011. Patients aged eight to 35 years with recently diagnosed T1D (≤12 weeks) were followed for 12 months (Protégé) and continued to 24 months (Protégé Extension). Three dose regimens of teplizumab were administered to 417 patients as intravenous infusions for six to 14 days; 99 patients received placebo. At 12 months, the primary efficacy endpoint, the proportion of patients with insulin use <0.5 U/kg per day and HbA1c <6.5%, ranged from 13.7% to 20.8% patients in the teplizumab groups, depending on dosing regimen, and 20.4% in the placebo group. The difference between teplizumab-treated patients and placebo-treated patients was not significant. The change in HbA1c from baseline also did not show a significant difference between teplizumab and placebo. However, subgroup analyses indicated the following findings:

●

We believe that the primary endpoint could have been achieved if cut-offs were changed to insulin use of <0.25 U/kg per day and HbA1c <7.0%, not only at 12 months but also at 24 months (figure below).

1816

●

C-peptide levels significantly improved in the teplizumab group compared with placebo group in all patients, and further analyses indicated that this difference was more pronounced in younger patients (aged eight to 11 years) and patients enrolled in United States sites. These findings are consistent with other clinical trials, showing a stronger effect in T1D patients who are younger (<17 years), more recently diagnosed (<10 weeks), and with higher C-peptide levels at baseline.

Protégé Encore Study

Protégé Encore was a randomized, controlled Phase 3 clinical trial conducted in 125 centers in 16 countries completed between 2009 and 2012. Patients aged eight to 35 years with recently diagnosed T1D were to be followed for 24 months. Three dose regimens of teplizumab, given as intravenous infusions for six to 14 days, were compared with placebo. The primary endpoint, the proportion of patients with insulin use <0.5 U/kg per day and HbA1c <6.5% at 12 months, was not met. Study enrollment was stopped at 254 patients (400 planned) when the Protégé study showed that the primary endpoint was not met. Efficacy analyses were not conducted in this study.

1917

A summary of the C-peptide data in the completed Phase 2 clinical trials and Phase 3 Protégé study are shown in the table below. All these studies have shown consistent and significant C-peptide benefit. Furthermore, subgroup analysis of the Protégé data indicated that younger patients (aged eight to 17 years) with minimum baseline beta cell function (C-peptide >0.2 pmol/mL) along with even more robust data in T1D patients with diagnosis under six weeks (Study 1), informed the inclusion criteria applied in our Phase 3 study, PROTECT.

*	Full 9.0 mg/m²/course 14-Day regimen was explored in 205 treated patients and 98 placebos;
**	Delay study based on 12-month time-point. All other studies based on 24-month time-points

SUBCUE Study

SUBCUE was a randomized, controlled Phase 1 clinical trial to evaluate the safety and tolerability, PK, and PD of subcutaneously injected teplizumab conducted between 2010 and 2011. Patients aged 18 to 35 years who were diagnosed with T1D within 12 months were to be given three dosing regimens of teplizumab or placebo. Patients were to be followed for 91 days. However, the study was stopped after one subject was enrolled, upon the Protégé study results.

Safety Data

Teplizumab safety data in T1D subjects have been analyzed from five clinical studies with similar study characteristics including a randomized controlled design and testing the proposed cumulative dose of 9034 µg/m² (~9.0 mg/m²) per treatment course. Four of these studies enrolled subjects with newly diagnosed Stage 3 clinical T1D (two Phase 2 studies, AbATE and Delay, and two Phase 3 studies, Protégé and Encore). One of these trials enrolled Stage 2 subjects in the At-risk (TN-10) study. The safety summary provided below pools data from the four Stage 3 clinical studies and a separate summary for the Stage 2, At-risk study (TN-10).

In Stage 3 teplizumab and placebo subjects, there were no major differences in the overall adverse events (“AEs”) (99.6% and 99.1%), and serious adverse events (“SAEs”) (12.2% (91 of 729 subjects)), and 8.9% (19 out of 213 subjects), although there were more severe AEs in teplizumab subjects (59% and 25%). In At-risk Stage 2 subjects, there was a higher incidence of AEs, SAEs, and severe AEs in the teplizumab subjects compared with placebo (AEs: 97.7% and 68.8%, SAEs: 15.9% (7 of 44 subjects) and 3.1% (1 of 32 subjects), and severe AEs: 59.1% and 9.4%).

The most common AEs were related to decreases in white blood cells (lymphopenia, leukopenia and neutropenia) as well as rash. ~~Lymphopenia~~ Lymphopenia was expected based on the mechanism of action of teplizumab and was observed in approximately 80% of Stage 3 and 73% of Stage 2 T1D subjects who received teplizumab compared with approximately 18% of Stage 3 and 6% of Stage 2 subjects who received placebo. Lymphopenia was commonly mild to moderate and resolved within 14 days. In Stage 3 T1D subjects, approximately 36% and 12% of teplizumab - and placebo-treated subjects, respectively, reported rash. In Stage 2 TID subjects, approximately 14% and 0% of ~~teplizumab~~ teplizumab- and placebo-treated subjects, respectively, reported rash. In teplizumab-treated patients, the rash was predominantly mild to moderate and usually resolved within one to two weeks. Laboratory abnormalities were also reported as AEs. The main differences in incidence in teplizumab and placebo subjects were related to liver function tests. For example, increased alanine aminotransferase occurred in 27.8% and 12.7% of Stage 3 teplizumab and placebo subjects and 4.5% and 3.1% of Stage 2 teplizumab and placebo subjects. These transaminase elevations were likely due to cytokine effects on the liver, usually resolved within 14 days of dose completion, and did not cause significant or lasting clinical concern. Cytokine release syndrome, which may include symptoms of rash, headache, nausea, vomiting, and chills/fever, occurred in 6% and 1.4% of teplizumab- and placebo-treated Stage 3 subjects and 2.3% and 0% of teplizumab- and placebo-treated Stage 2 subjects. Cytokine release syndrome was predominantly mild to moderate in severity, and in the majority of subjects (~80%), the treatment course was completed.

2018

In both Stage 3 and Stage 2 subjects, a total of 118 subjects (98 teplizumab (12.4%), 20 control (8.2%)) experienced one or more SAEs for a total of 167 SAEs. The majority, 76.7%, (128 out of 167) of SAEs were not considered treatment-related, while 23.4% (39 out of 167) were deemed related.

● In Stage 3 subjects, 110 of 729 total participants (91 teplizumab (12.2%), 19 control (8.8%)) reported at total of 158 SAEs. The most common SAEs were related to diabetes control including diabetic ketoacidosis, hypoglycemic seizures/unconsciousness, hyperglycemia, hypoglycemia (consistent with the underlying disorder) and were reported in 4.9% and 2.3% of Stage 3 teplizumab and placebo subjects, respectively. These events did not occur in any Stage 2 subjects.

	●	In Stage 3 subjects, 110 of 729 total participants (91 teplizumab (12.2%), 19 control (8.8%)) reported at total of 158 SAEs. The most common SAEs were related to diabetes control including diabetic ketoacidosis, hypoglycemic seizures/unconsciousness, hyperglycemia, hypoglycemia (consistent with the underlying disorder) and were reported in 4.9% and 2.3% of Stage 3 teplizumab and placebo subjects, respectively. These events did not occur in any Stage 2 subjects.

	●	In Stage 2 subjects, 8 of 76 total participants (7 of 44 teplizumab (15.9%), 1 of 32 controls (3.1%)) reported a total of 9 SAEs during the study. Of the 8 SAEs reported in teplizumab subjects, 4 were infections (pneumonia, cellulitis, wound infection, and gastroenteritis). Two of the 8 SAEs reported in teplizumab subjects were considered by the investigators to be related to study treatment and included serum sickness and pneumonia.

● In Stage 2 subjects, 8 of 76 total participants (7 of 44 teplizumab (15.9%), 1 of 32 controls (3.1%)) reported a total of 9 SAEs during the study. Of the 8 SAEs reported in teplizumab subjects, 4 were infections (pneumonia, cellulitis, wound infection, and gastroenteritis). Two of the 8 SAEs reported in teplizumab subjects were considered by the investigators to be related to study treatment and included serum sickness and pneumonia.

Three deaths were observed in Stage 3 subjects and categorized by the principal investigator (in accordance with International Conference on Harmonisation/Good Clinical Practice guidelines) and included in the Investigator Brochure for teplizumab filed with the FDA. The relationship between each death and teplizumab is listed in the Investigator Brochure as follows: one death, “none”; one death “not related”; and one death “unlikely.” The specific causes of deaths were (1) unknown for subject with gastrointestinal symptoms which the relationship was listed as “none” in the Investigator Brochure, (2) anterior myocardial infarction with ventricular tachycardia and cardio-respiratory arrest for which the relationship was listed as “not related” in the Investigator Brochure and (3) diabetic ketoacidosis for which the relationship was listed as “unlikely” in the Investigator Brochure. No deaths were reported in Stage 2 subjects.

The most common severe AE occurring in at least 10% of Stage 3 subjects was lymphopenia observed in 43.6% (326 out of 729 subjects) and 5.2% (11 out of 213 subjects) of teplizumab and placebo subjects, respectively. In Stage 2 subjects, lymphopenia was also the most frequently observed severe AE, occurring in 47.5% (21of 44 subjects) teplizumab-treated subjects but none of the placebo subjects. This AE is consistent with the mechanism of action of teplizumab.

Overall, in both Stage 3 and Stage 2 subjects, infections were reported in comparable rates between teplizumab and controls (53.0% vs 52.7%) with the most common infections reported involving upper respiratory infections (19.0% vs 17.6%), nasopharyngitis (11.1% vs 9.4%) and pharyngitis (5.1% vs 4.5%). The rate of primary EBV infections does not appear to be increased with teplizumab (1.9% vs 3.6%). While there were more cases of EBV reactivation with teplizumab (3.9% vs 1.2%), they were asymptomatic in the majority of subjects and were associated with transient viremia.

The safety profile of teplizumab in the at-risk population (Stage 2 T1D), appeared to be comparable with those of newly diagnosed patients (Stage 3 T1D). No new safety signals were identified. The majority of the adverse events were mild to moderate and were transient and manageable.

Phase 2 Clinical Trial of teplizumab in combination with AG019 in newly diagnosed T1D patients

We believe that combination therapy may enhance the potential therapeutic benefit of teplizumab by increasing efficacy, enhancing the durability of response, or restoring insulin production by beta cells. Combination therapies may include islet or beta-cell transplant, regulatory T cells, beta cell antigens, tolerogenic cytokines and other immune modulators, which could enhance the removal of self-reactive lymphocytes or increase the function of Tregs, or metabolic agents that could further improve or preserve beta cell function or mass.

We are collaborating with Precigen and its subsidiary, Precigen ActoBio, to explore the combination of teplizumab and the orally administered AG019, a Lactococcus lactis (“L. lactis”) strain genetically engineered to secrete human proinsulin and human interleukin-10, an anti-inflammatory cytokine. Precigen reported positive interim results from the Phase 1b/2a clinical trial, in June 2021 and October 2021, for the combination of AG019 and teplizumab, with a 79% response (C-peptide preservation) in newly diagnosed T1D. In addition to this collaboration, we plan to explore other combination therapies in the future.

AG019 is an oral-capsule consisting of engineered L. lactis specifically modified to deliver autoantigen human proinsulin and the tolerance-enhancing cytokine human interleukin-10 to the mucosal lining of the gastro-intestinal tissues. The primary objective of the study was to assess the safety and tolerability of different doses of AG019 alone as well as AG019 in association with teplizumab. The secondary objectives of this study are: to obtain PD data of AG019 as monotherapy as well as AG019 in combination with teplizumab; and PK data to determine the potential presence of AG019 in systemic circulation (safety - systemic exposure) and the presence of L. lactis bacteria in fecal excretion (local exposure). The study has been completed and was conducted in two phases:

● Phase 1b (27 participants enrolled): open-label part of the study which investigated the safety and tolerability of two different doses of AG019 in two age groups (18 to 40 years of age and 12 to 17 years of age).

	●	Phase 1b (27 participants enrolled): open-label part of the study which investigated the safety and tolerability of two different doses of AG019 in two age groups (18 to 40 years of age and 12 to 17 years of age).
	●	Phase 2a (18 participants enrolled): randomized, double-blind part of the study which investigated the safety and tolerability of AG019, in association with teplizumab, in two age groups (18 to 40 years of age and 12 to 17 years of age). Patients receive a daily dose of oral AG019 monotherapy for 8 weeks in combination with daily intravenous infusions of teplizumab for 12 days.

● Phase 2a (18 participants enrolled): randomized, double-blind part of the study which investigated the safety and tolerability of AG019, in association with teplizumab, in two age groups (18 to 40 years of age and 12 to 17 years of age). Patients receive a daily dose of oral AG019 monotherapy for 8 weeks in combination with daily intravenous infusions of teplizumab for 12 days.

The study commenced in October 2018 and enrollment is completed. Precigen presented updates in June and October 2021, on their interim data from the Phase 1b (monotherapy) and Phase 2a (combination) arms of the study:

	●	AG019 was well tolerated as a monotherapy and in combination with teplizumab with no serious SAEs reported.
	●	In the AG019 monotherapy arm, 56% of adult patients (5 of 9) showed stabilization or increase of C-peptide levels during the first 6 months post treatment initiation.
	●	In the teplizumab combination arm, 79% of all patients (11 of 14) showed stabilization of C-peptide levels at 6 months post treatment initiation.
	●	Exhaustion of autoreactive T cells, only seen in the teplizumab combination arm, correlated with response.
	●	There was an increase in pre-proinsulin (“PPI”) - specific Type 1 regulatory (“Tr1”) cells in both monotherapy and combination arms.
	●	There was a significant decrease in PPI-specific CD8+ T cells in both monotherapy and combination arms.

~~PRV-3279~~T1D ~~(Humanized~~Lifecycle ~~CD32B~~Management xopportunities ~~CD79B Dual Affinity Biologic for SLE~~ and ~~Other~~other ~~Autoimmune~~potential ~~Diseases)~~indications

PRV-3279 for SLE and Other Autoimmune Diseases

PRV-3279 is a humanized CD32B x CD79B dual affinity biologic in a new class of bispecific scaffold antibody-like molecules called DARTs. It is designed to simultaneously bind to CD32B and CD79B on B cells. The simultaneous binding of both CD32B and CD79B triggers CD32B-coupled immunoreceptor tyrosine-based inhibitory motif signaling, which leads to the suppression of B cells activated to produce auto-antibodies, while not causing broad B cell depletion.

We believe PRV-3279 may intercept the pathophysiology of SLE by preventing the production of auto-antibodies by abnormally active B cells. Additionally, based on our published clinical (hepatitis A vaccination) and pre-clinical (Pompe disease gene therapy model) studies, we believe PRV-3279 may prevent the detrimental immunogenicity of biotherapeutic products, such as gene therapy products, though, we will need to conduct additional clinical studies to confirm and support our belief.

~~Current Clinical Development Program in SLE~~20

Preclinical Studies for the SLE

In support of the clinical evaluation of PRV-3279 in lupus, we and our partner, MacroGenics, studied the effect of PRV-3279 on B cells from lupus patients ex vivo. PRV-3279 reduced the activation of these B cells similarly to its effects on healthy volunteer B cells, regardless of the activity level of the lupus patients. These data were presented at the American College of Rheumatology (“ACR”) conference in November 2020.

Phase 1b/2a clinical trial of PRV-3279 in Healthy Volunteers and Patients with Lupus

We are conducting a two-part study in SLE, the PREVAIL (PRV-3279 EVAluation In Lupus) study. PREVAIL is a randomized, double-blind, placebo-controlled Phase 1b/2a clinical trial to evaluate the safety, tolerability, PK, PD, and immunogenicity of multiple ascending doses of PRV-3279 in 16 healthy adult volunteers (Part 1) and the efficacy of PRV-3279 in patients with lupus (Part 2). Our ultimate goal is to determine if PRV-3279 can intercept the pathophysiology of SLE by preventing the production of auto-antibodies by abnormally active B cells.

On March 12, 2020, we announced positive top-line results from the Phase 1b portion of the PREVAIL study. PRV-3279 was well-tolerated, with no serious adverse events, and as expected, did not deplete B cells and demonstrated profound and sustained binding to circulating B lymphocytes, with reduction of circulating immunoglobulin M levels in a dose-proportional manner. While anti-drug antibody production was observed at both dose levels tested, immunogenicity was found not to affect exposure, safety or pharmacodynamic parameters. Data from PREVAIL-1 was presented at the ACR conference in November 2020.

On January 20, 2022, we announced the initiation of the Phase 2a PREVAIL-2 study. The PREVAIL-2 study is a Phase 2a POC study in moderate-to-severe SLE patients induced into response with a short course of corticosteroids, and then monitored for relapse, after randomization to either PRV-3279 or placebo treatment. This design enables the withdrawal of most concomitant medications and clear POC evaluation. The study will be conducted in the United States and Hong Kong. Screening has commenced in the United States with the goal of identifying and enrolling approximately 100 patients to 6 monthly infusions of PRV-3279 or placebo, with primary efficacy readout at 24 weeks. Stratification and pre-defined subset analysis in PREVAIL-2 of a potentially highly responsive SLE population using a B cell gene signature may identify patients most likely to benefit from PRV-3279 therapy in the future

Clinical endpoints for the PREVAIL-2 Study will include the Systemic Lupus Erythematosus Disease Activity Index 2000 (SLEDAI-2K), the British Isles Lupus Assessment Group score, urine protein to creatinine ratio, and daily glucocorticoid use. Additional biomarkers will include urinary/renal markers (e.g., serum creatinine, estimated glomerular filtration rate) and blood/circulating markers (e.g., auto-antibodies, complement (C3 and C4), B cell function/phenotype, including CD32B expression/response relationship).

Current Preclinical Development Program in Gene Therapy

Preclinical Studies for the Prevention of the Immunogenicity of Biotherapeutics Including Gene Therapy

We believe that PRV-3279 has the potential to prevent or reduce the immunogenicity of biotherapeutics, including but not limited to gene therapy vectors and transgenes (new proteins expressed as a result of the gene therapy).

As the field of gene therapy advances, patients’ immune responses to the viral vectors and the transgene products remain a key challenge negatively impacting the safety, efficacy and ability to deliver additional courses systemically. One of the current mitigation strategies to overcome these immune responses is pharmacological modulation of the patients’ antibody immune responses with the B cell depleting agent rituximab in combination with the immune-suppressive agent sirolimus. The use of rituximab has been associated with certain adverse events. The use of PRV-3279, as a non-depleting B cell inhibitor, is a potential strategy to address this unmet need in serious genetic diseases.

PRV-3279 reduced B cell responses to viral antigens using an experimental vaccine challenge in a Phase 1 study. In addition, In January 2021, we announced positive results of pre-clinical proof-of-concept experiments in support of the prevention of immunogenicity indication. A PRV-3279 mouse surrogate was tested in mice transgenic for human CD32B, which received gene therapy with an adeno-associated virus (“AAV”) vector AAV9 encoding for the enzyme acid-alpha-glucosidase (“GAA”) gene. Errors in the GAA gene cause the serious human glycogen storage disease type II known as Pompe disease. In the study, the PRV-3279 surrogate reduced anti-AAV9 vector antibody levels in a dose-dependent fashion. Anti-AAV9 antibodies have been linked to reduced efficacy, safety concerns and the inability to re-dose patients based on these and other study data, we believe PRV-3279 co-administration with gene therapy products has the potential to improve the safety and efficacy of this therapeutic modality. The PRV-3279 surrogate in combination with sirolimus increased skeletal muscle levels of GAA enzyme expression. Consistent with prior results from clinical trials in healthy human subjects, the PRV-3279 surrogate decreased Immunoglobulin M (“IgM”) production and was well tolerated. These results have been presented at the 2021 American Society for Gene and Cell Therapy conference.

Based on these data, we plan to look for opportunities to work with academic and industry experts to combine PRV-3279 with gene therapy and other biotherapeutic products to further our mission of preventing and intercepting devastating immune-mediated conditions.

SLE Market and Other Opportunities for PRV-3279

~~Sales of~~The ~~therapies~~treatment toand ~~treat~~management of SLE ~~are~~depends ~~expected~~on todisease ~~climb~~severity toand ~~nearly~~disease $3manifestations.0 ~~billion~~Hydroxychloroquine byplays ~~2025-2027,~~a ~~approximately~~central ~~7-8%~~role ~~annual~~in ~~growth~~the ~~from~~long-term ~~2019.~~treatment ~~This~~of SLE ~~growth~~and is ~~driven~~the ~~primarily~~cornerstone byof ~~treatments~~SLE ~~that~~therapy. ~~target~~Corticosteroids, Bnonsteroidal ~~cells~~anti-inflammatory drugs (“NSAIDs”), ~~such~~and asimmunosuppressive agents ~~belimumab~~(e.g., ~~with~~azathioprine, acyclophosphamide, ~~new~~cyclosporine, ~~indication~~methotrexate, inand ~~lupus~~mycophenolate ~~nephritis~~mofetil) inhave ~~2020,~~also ~~off-label use~~been ofused ~~rituximab,~~in ~~and~~ the ~~approval~~treatment and management of ~~new~~SLE. ~~mechanisms~~These ~~(voclosporin~~treatments ~~for~~are ~~lupus~~only ~~nephritis,~~modestly ~~approved~~effective inand ~~January~~present ~~2021,~~safety and/or ~~the~~immune ~~type~~suppression Iconcerns ~~interferon~~with prolonged ~~inhibitor,~~use. ~~anifrolumab,~~The ~~approved~~B incell-depleting ~~July~~antibody ~~2021~~rituximab ~~for systemic lupus~~(Rituxan)~~. Despite these available medications~~, ~~substantial~~while ~~unmet~~not ~~need~~approved ~~remains,~~ for ~~novel~~treatment ~~and~~of ~~safe~~SLE, ~~non-depleting~~appears Bto ~~cell~~be ~~therapy~~beneficial ~~with~~in ~~greater~~certain ~~efficacy~~subsets of ~~than belimumab~~patients.

23In 2011, the FDA approved belimumab (Benlysta), an antibody that targets B lymphocyte stimulator, for the treatment of mild to moderate SLE in combination with standard therapy, providing additional clinical validation of the therapeutic benefit of B cell-targeted therapy for autoimmune diseases. However, the modest therapeutic benefit of belimumab and delayed onset of disease intervention indicate the need for additional therapeutic strategies to inhibit overactive B cells. We believe PRV-3279 can fulfill that requirement and is uniquely differentiated to allow for rapid inhibition of activated B cells (potentially more effective than belimumab), while sparing non-activated B cells from depletion or inactivation (potentially safer than rituximab).

In ~~addition~~ toDecember ~~SLE~~2020, ~~PRV-3279~~January ~~has~~2021, and ~~the~~July ~~potential~~2021, tothe ~~treat~~FDA ~~other~~approved Bbelimumab, ~~cell-~~voclosporin and ~~auto-antibody-driven~~anifrolumab, ~~autoimmune~~respectively, ~~diseases.~~for ~~Such~~the ~~diseases~~treatment ~~include multiple~~of ~~sclerosis~~lupus ~~and~~nephritis RA(belimumab, voclosporin ~~where B cell therapies rituximab~~ and ~~ocrelizumab~~systemic ~~have~~lupus, ~~sales~~ in ~~excess~~the case of ~~$1 billion~~anifrolumab). ~~Several~~We ~~niche/orphan indications~~believe ~~may~~that ~~also~~PRV-3279 can be ~~explored,~~differentiated ~~including~~form ~~T1D~~anifrolumab (~~potentially~~a inType ~~combination with teplizumab), Sjogren’s syndrome, vasculitis (e.g.,~~I ~~polymyalgia~~interferon ~~rheumatica,~~receptor ~~giant cell arteritis, Behçets disease~~inhibitor), ~~myasthenia~~as ~~gravis,~~it ~~pemphigus,~~targets ~~neuromyelitis~~B ~~optica~~cells, ~~anti-NMDA receptor~~and ~~encephalitis,~~are ~~Guillain-Barré~~focused ~~syndrome,~~on ~~chronic~~development ~~inflammatory~~of ~~demyelinating polyneuropathy, Grave’s ophthalmopathy, IgG4~~PRV-~~related~~3279 ~~disease,~~in ~~and idiopathic thrombocytopenic purpura~~SLE.

Sales of therapies to treat SLE are expected to climb to nearly $3.6 billion by 2029, approximately 9% annual growth from 2022. This growth is driven primarily by treatments that target B cells, such as belimumab, with a new indication in lupus nephritis in 2020, off-label use of rituximab, and the approval of new mechanisms (voclosporin for lupus nephritis, approved in January 2021, and the type I interferon inhibitor, anifrolumab, approved in July 2021 for systemic lupus). Despite these available medications, substantial unmet need remains, for novel and safe non-depleting B cell therapy with greater efficacy than belimumab.

In addition to SLE, PRV-3279 has the potential to treat other B cell- and auto-antibody-driven autoimmune diseases. Such diseases include multiple sclerosis and rheumatoid arthritis (“RA”), where B cell therapies rituximab and ocrelizumab have sales in excess of $1 billion. Several niche/orphan indications may also be explored, including T1D (potentially in combination with teplizumab), Sjogren’s syndrome, vasculitis (e.g., polymyalgia rheumatica, giant cell arteritis, Behçets disease), myasthenia gravis, pemphigus, neuromyelitis optica, anti-NMDA receptor encephalitis, Guillain-Barré syndrome, chronic inflammatory demyelinating polyneuropathy, Grave’s ophthalmopathy, IgG4-related disease, and idiopathic thrombocytopenic purpura.

SLE Background Information

SLE is a chronic autoimmune disorder that can affect nearly every major organ system, causing inflammation, tissue injury, organ damage, and in some patients, organ failure. The prognosis of SLE is highly variable in individual patients, often waxing and waning throughout their lifetime. The natural history of SLE ranges from relatively benign disease to rapidly progressive and even fatal disease. Comorbidities, such as infections, malignancies, hypertension, lipid disorders and diabetes increase the risk of disability and death in patients with SLE. Organ systems commonly affected by SLE include the central nervous system, kidneys, gastrointestinal system, mucous membranes, heart, skin, hematologic system, musculoskeletal system and lungs, with specific organ involvement defining subsets of the disease (e.g., lupus nephritis). According to the Lupus Foundation of America, at least 1.5 million Americans are afflicted by SLE and more than 16,000 new cases of lupus are reported annually. It is estimated that five million people throughout the world suffer from some form of lupus. Lupus affects primarily women of childbearing age (15 to 44 years). However, men, children, and teenagers can also develop lupus.

The pathogenesis of SLE is characterized by an abnormal overactivation of B cells and subsequent pathologic production of auto-antibodies (antibodies that attack one’s own cells and tissues). Uncontrolled activation of B cells is normally terminated when the activating stimulus is exhausted and when a negative feedback loop is triggered by the engagement of ~~an inhibitory Fc receptor (“FcR”), known as FcgammaRIIb (“~~CD32B”). Mutations in the CD32B gene in humans are associated with an increased likelihood of SLE, and reduced expression of CD32B is apparent in B cells from SLE patients. It is thought that activation of this inhibitory pathway could ameliorate the overactive B cell-driven pathology of SLE and other autoimmune diseases. In addition, the excess auto-antibodies produced bind to target antigens and form immune complexes.

When the B cell receptor (“BCR”) (which is the “Y” shaped molecule, resembling an antibody in the figure below) is bound and activated by an antigen, it initiates a cascade of biochemical changes necessary for the activation of the CD32B inhibitory pathway, thus triggering the negative feedback loop. CD79B is a subunit of the BCR that plays a key role in this process when it is close to CD32B. Therefore, if a pharmacologic treatment is to activate the CD32B inhibitory pathway, it also has to simultaneously bind to CD79B. PRV-3279 (formerly MGD010), is a humanized CD32B x CD79B DART protein developed originally by MacroGenics as a bi-specific therapy with these properties, and thus a potential treatment for SLE and other similar diseases. It is designed to simultaneously bind to CD32B and CD79B on B cells.

2421

PRV-3279 and related molecules have shown inhibitory effects on BCR-induced B cell proliferation and antibody secretion (including B cells obtained from SLE patients) as well as beneficial effects in mouse models of autoimmunity. PRV-3279 is expected to boost the negative feedback loop on B cells by robustly engaging the available CD32B and CD79B.

PRV-3279 has been studied in humans and was shown to be well tolerated. Proof of mechanism and PRV-3279’s inhibitory effect on antibody immune responses were demonstrated in a Phase 1a single ascending dose study in healthy volunteers, including a cohort demonstrating inhibition of the immunogenicity of the hepatitis A vaccine. Immunogenicity of PRV-3279 was also observed, but had no impact on mechanistic effects, safety or pharmacokinetics, and decreased with increasing doses of PRV-3279, possibly a reflection of its mechanism of action.

Our ultimate goal is to determine if PRV-3279 can intercept the pathophysiology of SLE by preventing the production of auto-antibodies by abnormally active B cells.

~~Current Treatment Options for SLE and Their Limitations~~22

The treatment and management of SLE depends on disease severity and disease manifestations. Hydroxychloroquine plays a central role in the long-term treatment of SLE and is the cornerstone of SLE therapy. Corticosteroids, nonsteroidal anti-inflammatory drugs (“NSAIDs”), and immunosuppressive agents (e.g., azathioprine, cyclophosphamide, cyclosporine, methotrexate, and mycophenolate mofetil) have also been used in the treatment and management of SLE. These treatments are only modestly effective and present safety and/or immune suppression concerns with prolonged use. The B cell-depleting antibody rituximab (Rituxan), while not approved for treatment of SLE, appears to be beneficial in certain subsets of patients.

In 2011, the FDA approved belimumab (Benlysta), an antibody that targets B lymphocyte stimulator, for the treatment of mild to moderate SLE in combination with standard therapy, providing additional clinical validation of the therapeutic benefit of B cell-targeted therapy for autoimmune diseases. However, the modest therapeutic benefit of belimumab and delayed onset of disease intervention indicate the need for additional therapeutic strategies to inhibit overactive B cells. We believe PRV-3279 can fulfill that requirement and is uniquely differentiated to allow for rapid inhibition of activated B cells (potentially more effective than belimumab), while sparing non-activated B cells from depletion or inactivation (potentially safer than rituximab).

In December 2020, January 2021, and July 2021, the FDA approved belimumab, voclosporin and anifrolumab, respectively, for the treatment of lupus (lupus nephritis, in the case of voclosporin). We are focused on development of PRV-3279 in SLE.

Overview of CD32B Biology and Relevance in Lupus

CD32B is expressed widely on the surface of human B cells. In addition to its expression on B cells, CD32B is also expressed on other immune cells such as dendritic cells, macrophages, neutrophils, and mast cells. It is a single-chain protein with a portion that sits outside of the cell membrane, which can be bound by chemical signals.

CD32B is the only known inhibitory FcR in the immune system. It plays an important role not only for innate and adaptive immune responses, but also in the maintenance of immune tolerance and controlling autoimmunity. Mice deficient in CD32B have increased antibody responses due in part to chronic B cell activation, and as a result, develop autoimmune disease similar to human SLE. In contrast, B cell-specific overexpression of CD32B and cross-linking of CD32B with antibodies ameliorate the incidence and severity of lupus in mouse lupus models. In humans, mutations and decreased expression of the CD32B gene are associated with an increased likelihood of SLE. These results underscore the important role of CD32B in regulating the antibody immune response and suggest that drug-mediated engagement of CD32B could provide therapeutic benefit in autoimmune diseases by dampening the effects of chronically activated B cells and reducing the production of auto-antibodies. In particular, preventing the production of auto-antibodies could intercept the disease course in lupus nephritis, a subtype of lupus driven by accumulation of auto-antibodies and immune complexes (a mass of antibodies and other molecules) in the kidneys.

Consistently, a monoclonal antibody anti-CD19 which binds CD32B with high affinity, ~~XmAb5871 (Xencor)~~obexelimab, was shown in 2018 to be efficacious -albeit ~~missing~~ missing the primary endpoint- in a Phase 2 lupus trial, particularly in patients with B cell biomarker signatures, providing indirect ~~validation~~ validation for the potential of PRV-3279 in lupus. ~~XmAb5871~~Obexelimab, ~~which~~ has ~~shown thrombocytopenia (unlike PRV-3279, XmAb5871 appears to bind to CD32A, which is expressed on platelets), has~~ not moved forward in development in SLE to date. In November 2021, Xencor announced the licensing of ~~XmAb5871 (~~obexelimab) to Zenas BioPharma, which is currently sponsoring a trial in another immune indication (IgG4-Related Disease).

Mechanism of Action of PRV-3279

PRV-3279 is in a new class of bispecific scaffold antibody-like molecules called DARTs. It is designed to simultaneously bind to CD32B and CD79B on B cells. The simultaneous binding of both CD32B and CD79B triggers CD32B-coupled immunoreceptor tyrosine-based inhibitory motif signaling, which leads to the suppression of B cells activated to produce auto-antibodies, while not causing broad B cell depletion.

To prolong its half-life in the body, PRV-3279 contains a human IgG1 Fc region (a specific antibody fragment) that is manipulated to eliminate its effector function. As a molecule designed to inhibit immune responses, PRV-3279 does not activate any part of the immune system either in the body or in laboratory tests. PRV-3279 also does not bind to platelets, a unique feature compared to competing molecules targeting CD32B that are associated with toxicity due to binding to platelets (e.g., XmAb5871, an anti-CD19 mAb which binds to CD32 via the Fc fragment).

Clinical Development Program in SLE

Phase 1b/2a clinical trial of PRV-3279 in Healthy Volunteers and Patients with Lupus

Clinical endpoints for the PREVAIL-2 Study include time to and frequency of disease flares, and change from baseline in disease activity, assessed based on the Systemic Lupus Erythematosus Disease Activity Index 2000 (SLEDAI-2K), the British Isles Lupus Assessment Organ System Group scores, physician global assessment of disease activity, patient reported outcomes and use of glucocorticoids or other SLE treatments. Additional biomarkers will include urinary/renal markers (e.g., serum creatinine, estimated glomerular filtration rate, urine protein to creatinine ratio) and blood/circulating markers (e.g., auto-antibodies, complement (C3 and C4), B cell function/phenotype and, B cell gene signature/response relationship).

Preclinical Studies for the SLE

In support of the clinical evaluation of PRV-3279 in lupus, we and our partner, MacroGenics, studied the effect of PRV-3279 on B cells from lupus patients ex vivo. PRV-3279 reduced the activation of these B cells similarly to its effects on healthy volunteer B cells, regardless of the activity level of the lupus patients. These data were presented at the ACR conference in November 2020.

Prior Preclinical Evaluation of PRV-3279

The only nonhuman species that PRV-3279 binds to is chimpanzees. An initial non-Good Laboratory Practices (“GLP”) study with PRV-3279 in chimpanzees demonstrated it to be well tolerated at all doses, with an assigned no observed-adverse-effect level (“NOAEL”), of 10 mg/kg.

Due to the lack of target binding, chronic four-week and three-month repeat-dose GLP toxicology studies were performed using a surrogate DART molecule similar to PRV-3279 that was designed to target human CD32B and mouse CD79B in a transgenic mouse line that expresses human CD32B. A NOAEL at the highest dose of 50 mg/kg was assigned in the three-month study. We believe these studies, and our regulatory interactions, support the advancement of PRV-3279 in long-term efficacy studies in humans, such as PREVAIL-2.

Prior Clinical Evaluation and Proof of Mechanism for PRV-3279

To date, there have been two clinical trials completed with PRV-3279. The first study was conducted at a single site in the United States, from February 2015 to February 2017 and was a first-in-human (“FIH”), double-blind, placebo-controlled Phase 1a clinical trial to evaluate the safety, tolerability, PK, PD, and immunogenicity of PRV-3279 in healthy adult volunteers.

A total of 49 subjects were randomized; 12 received placebo and 37 received PRV-3279 intravenously at escalating doses from 0.1 mg/kg to 10 mg/kg in six cohorts. PRV-3279 was well tolerated over the range of doses, with only mild adverse events that resolved quickly, including headache, somnolence (sleepiness), upper respiratory tract infection, folliculitis and night sweats. Target binding and proof of mechanism were demonstrated by measuring functional B cell inhibition at doses of 1 mg/kg or higher, without broader B cell activation or depletion observed.

Subsequently, proof of mechanism was further confirmed in a dose escalation extension of the study in which single doses of PRV-3279 at 3 mg/kg and 10 mg/kg (16 subjects) were compared with placebo (eight subjects) for the ability to affect B cell responses to a hepatitis A vaccine, which was administered to participants who had no previous hepatitis A immunity, on day two of the study. At both doses, PRV-3279 reduced the proportion of volunteers who generated an immune response against the vaccine, as well as the amount of antibody they produced, in both cases as compared to placebo.

PRV-3279 exhibited an approximate half-life of seven days after a single dose. A majority (~86%) of study participants developed antibodies against PRV-3279 (i.e., immunogenicity) after receiving the 3 mg/kg dose, but no detrimental effect was observed on the pharmacokinetics of PRV-3279. The proportion of participants developing antibodies against PRV-3279 decreased with increasing dose (29% in the 10 mg/kg dose) and such antibodies did not occur in the multiple dose chimpanzee study, suggesting that PRV-3279 may limit its own immunogenicity at therapeutic doses, which is consistent with its mechanism of action.

The second study was the Phase 1b portion of the PREVAIL study, which was a double-blind, placebo-controlled, multiple ascending dose study in 16 health volunteers described above.

~~PRV-015 (ordesekimab,~~Preclinical ~~human~~Development ~~anti-interleukin~~Program 15in ~~mAb)~~Gene ~~for Non-Responsive Celiac Disease (NCRD)~~Therapy

~~PRV-015 (ordesekimab)~~Preclinical ~~is a fully human immunoglobulin (“IgG1”) mAb that binds to and inhibits pro-inflammatory cytokine interleukin~~Studies ~~(“IL-15”),~~for ~~which has been identified as a major mediator in~~ the ~~pathophysiology~~Prevention of ~~celiac disease. PRV-015 has emerged as a leading candidate for~~ the ~~treatment~~Immunogenicity of ~~nonresponsive~~Biotherapeutics ~~celiac~~Including ~~disease,~~Gene inTherapy ~~which patients continue to have disease activity despite ongoing gluten free diet (“GFD”).~~

~~PRV-015 has~~We ~~undergone~~believe ~~clinical~~that ~~testing in approximately 250 subjects who have received~~ PRV-~~015~~3279 ~~across~~has ~~two Phase 1 (healthy volunteers and psoriasis,~~the ~~rheumatoid~~potential ~~arthritis~~to ~~(“RA”))~~prevent ~~and~~or ~~three~~reduce ~~Phase~~the 2immunogenicity ~~clinical~~of ~~trials (celiac disease~~biotherapeutics, ~~RCD-II,~~including ~~RA).~~but Nonot ~~serious~~limited ~~adverse events deemed related~~ to ~~PRV-015~~gene ~~were~~therapy ~~observed~~vectors ~~that would preclude further clinical development. Proof of mechanism~~ and~~/or~~ ~~proof of concept~~transgenes ~~was~~(new ~~demonstrated~~proteins inexpressed ~~RA,~~as ~~celiac~~a ~~disease~~result ~~and refractory celiac disease Type II. The effect~~ of ~~PRV-015~~the ingene ~~celiac disease was evidenced by reduction in inflammation and symptoms after a controlled gluten challenge in a Phase 2a clinical trials with 63 celiac patients~~therapy).

~~Celiac~~As the field of gene therapy advances, ~~Disease~~patients’ ~~Market~~immune responses to the viral vectors and the transgene products remain a key challenge negatively impacting the safety, efficacy and ability to deliver additional courses systemically. One of the current mitigation strategies to overcome these immune responses is pharmacological modulation of the patients’ antibody immune responses with the B cell depleting agent rituximab in combination with the immune-suppressive agent sirolimus. The use of rituximab has been associated with certain adverse events. The use of PRV-3279, as a non-depleting B cell inhibitor, is a potential strategy to address this unmet need in serious genetic diseases.

~~There~~PRV-3279 isreduced noB ~~approved~~cell ~~drug~~responses ~~for~~to ~~CD.~~viral ~~The~~antigens ~~annual~~using ~~healthcare~~an ~~utilization~~experimental byvaccine ~~NRCD~~challenge ~~patients~~ in ~~2013~~a ~~was~~Phase ~~$18,206,~~1 ~~for~~study. $4In addition,~~796~~ inIn ~~matched~~January ~~controls~~2021, ~~due~~we toannounced ~~the~~positive ~~extra~~results ~~costs~~of pre-clinical proof-of-concept ~~uncontrolled~~experiments CDin ~~investigations~~support ~~and~~of ~~treatment~~the prevention of ~~complications~~immunogenicity indication. ~~Given~~A ~~the~~PRV-3279 mouse ~~large~~surrogate ~~prevalence~~was ~~(15~~tested toin 20mice ~~million~~transgenic ~~patients world-wide~~for human CD32B, 1%which ofreceived gene therapy with an adeno-associated virus (“AAV”) vector AAV9 encoding for the ~~population~~enzyme acid-alpha-glucosidase (“GAA”) gene. Errors in the ~~Western~~GAA ~~world~~gene ~~and~~cause 0the serious human glycogen storage disease type II known as Pompe disease.5% In the study, the PRV-3279 surrogate reduced anti-AAV9 vector antibody levels in ~~Asia)~~a dose-dependent fashion. Anti-AAV9 antibodies have been linked to reduced efficacy, safety concerns and the ~~unmet~~inability ~~need~~to ~~(50%~~re-dose of patients based on ~~GFD~~these and ~~continue~~other study data, we believe PRV-3279 co-administration with gene therapy products has the potential to ~~suffer~~improve the safety and efficacy ~~from~~of ~~disease~~this ~~activity~~therapeutic ~~due~~modality. toThe ~~contaminating~~PRV-3279 ~~gluten~~surrogate in ~~the~~combination ~~diet),~~with ~~NRCD~~sirolimus isincreased ~~considered~~skeletal amuscle ~~substantial~~levels ~~opportunity~~of ~~for~~GAA ~~pharmaceutical~~enzyme ~~development~~expression. ofConsistent anwith ~~effective~~prior ~~and~~results ~~well-tolerated~~from ~~adjunctive~~clinical ~~treatment~~trials toin healthy human subjects, the ~~GFD~~PRV-3279 surrogate decreased IgM production and was well tolerated.

27Based on these data, we plan to look for opportunities to work with academic and industry experts to combine PRV-3279 with gene therapy and other biotherapeutic products to further our mission of preventing and intercepting devastating immune-mediated conditions.

~~Current Clinical~~Ordesekimab, ~~Development~~human ~~Program~~anti-interleukin 15 mAb for Non-Responsive Celiac Disease (NCRD)

~~Phase~~Ordesekimab 2bis ~~Clinical~~a ~~Trial~~fully ofhuman ~~PRV~~immunoglobulin (“IgG1”) mAb that binds to and inhibits pro-~~015~~inflammatory cytokine interleukin (~~ordesekimab~~“IL-15”), which has been identified as a major mediator in ~~Celiac~~the ~~Disease~~pathophysiology ~~(PROACTIVE~~of ~~Study~~celiac disease. Ordesekimab has emerged as a leading candidate for the treatment of nonresponsive celiac disease, in which patients continue to have disease activity despite ongoing gluten free diet (“GFD”).

WeOrdesekimab ~~and~~has ~~our~~undergone ~~partner~~clinical ~~Amgen~~testing ~~conducted chronic toxicology studies~~ in ~~2019~~approximately ~~and~~250 ~~early~~subjects ~~2020.~~who Inhave ~~August~~received ~~2020,~~ordesekimab weacross ~~initiated~~two ~~the~~Phase ~~PROACTIVE~~1 ~~study~~ (~~PROvention Amgen~~healthy ~~Celiac~~volunteers ~~ProtecTIVE~~and ~~Study~~psoriasis), aand ~~randomized,~~three ~~double-blind, placebo-controlled, parallel-group, multicenter~~ Phase 2 clinical ~~trial~~trials ~~in adult~~(celiac ~~patients~~disease, ~~with~~RCD-II, ~~NRCD~~RA). ~~PRV-015~~No ~~will~~serious beadverse ~~administered~~events ~~every~~deemed related ~~two~~to ~~weeks~~ordesekimab ~~via~~were ~~subcutaneous~~observed ~~route for six months. The hypothesis of this study is~~ that ~~PRV-015~~would ~~will~~preclude befurther ~~superior~~clinical todevelopment. ~~the~~Proof ~~GFD~~of atmechanism ~~intercepting~~and/or ~~the~~proof ~~effects~~ of ~~contaminating~~concept ~~gluten~~was ~~exposure~~ demonstrated in ~~celiac patients following a GFD~~RA, asceliac ~~measured~~disease ~~by symptoms~~ and ~~objective~~refractory ~~signs~~celiac ofdisease ~~intestinal~~Type ~~inflammation after 24 weeks of treatment~~II. ~~Approximately~~The ~~220~~effect ~~subjects are planned to be enrolled. Due to the impacts~~ of ~~the~~ordesekimab ~~COVID-19~~in ~~pandemic~~celiac ondisease ~~certain~~was ~~aspects~~evidenced ofby ~~medical~~reduction ~~care~~in ~~during~~inflammation and ~~the~~symptoms ~~pandemic,~~after ~~such as~~ a ~~temporary~~controlled ~~halting of elective endoscopy procedures, lack of prioritization of chronic life-threatening conditions and reduced exposure to~~ gluten ~~due~~challenge toin ~~reductions~~a ~~of travel and dining out, we are experiencing enrollment delays that have extended the enrollment target. We now expect to report top line results from the~~ Phase 2b2a ~~PROACTIVE~~clinical ~~study~~trials bywith ~~the~~63 ~~end~~celiac ~~of 2023~~patients.

Celiac Disease Background Information

Celiac disease is a systemic autoimmune disease triggered by gluten consumption in genetically susceptible individuals. Approximately 1% of the western population is affected by celiac disease. This prevalence has been reported to be doubling every 20 years. Gluten is ubiquitous in food and elicits autoimmune responses in celiac patients, with damage to the mucosal lining of the small intestine. Celiac disease causes debilitating symptoms and serious medical complications, as the small bowel damage can lead to nutrient malabsorption and results in a range of subsequent intestinal and extra-intestinal clinical manifestations. The stimulation of intestinal lymphocytes for decades can lead to the development of lymphoma, with increased mortality.

Gluten is the main protein present in some of the most common cereals (wheat, barley, rye). Modern diets are increasingly enriched with gluten and it is also used as an additive in processed foods, cosmetics and oral medications. Gluten is also present in trace amounts in foods labeled as “gluten-free”, as a tableting excipient, and in products such as toothpaste and lipstick. As little as 50mg/day of gluten triggers the disease. A normal diet contains >10 g/day, 200 times the amount that causes damage and intestinal histological abnormalities. As such, celiac patients face enormous challenges to follow a strict GFD.

The pathophysiology of celiac disease is characterized by an abnormal immune response to gluten. Humans lack enzymes to fully digest gluten, which against the right genetic background triggers inflammation and autoimmunity in the intestine and in other organs. An adaptive immune response is triggered when gluten peptides are deamidated in the extracellular space, by the enzyme tissue transglutaminase, normally an intracellular enzyme that is released by damaged cells. This deamidation renders gluten peptides high-avidity binders to HLA-DQ2 and HLA-DQ8, which present these peptides to intestinal CD4+ T cells, thereby activating these T cells and initiating the inflammatory cascade. The innate immune system’s intraepithelial lymphocytes (“IELs”), primarily CD8+, are able to directly lyse and destroy intestinal epithelial cells, damaging the mucosal lining of the small intestine, in response to IL-15 release stimulated by gluten peptides. In healthy individuals, the activated T cells are controlled by Tregs, but this does not happen in celiac disease as IL-15 confers the effector CD4+ T cells resistance to suppression by Tregs.

Celiac disease causes debilitating symptoms and serious medical complications. In many patients, gastrointestinal symptoms derived from intestinal mucosal damage dominate the patient reported symptoms at diagnosis. The normal villi (absorptive finger-like prolongations) present in the gut of healthy individuals are lost in active celiac disease as a result of mucosal atrophy and crypt enlargement. Small bowel damage often leads to nutrient malabsorption that can result in a range of further clinical manifestations (anemia, osteopenia, failure to thrive in children). In addition, extra-intestinal symptoms and systemic manifestations are often present, such as dermatitis, infertility, or neurological and skeletal disorders. Mortality is increased in subjects with persistent intestinal mucosal damage.

The most serious complication of celiac disease is the development of an in situ small bowel T cell lymphoma after many years of exposure, voluntary or inadvertent, to gluten. This malignant complication of celiac disease, which appears to be independent of gluten and unresponsive to a strict GFD, is termed RCD-II when the percentage of aberrant IELs is >20% and Type I refractory celiac disease when the percentage is <20%. In RCD-II, aberrant IELs proliferate in what represents a slow-growing non-Hodgkin lymphoma localized (in situ) in the small bowel, primarily in the epithelial compartment. RCD-II affects approximately 0.5% of celiac patients and can lead to overt and systemic enteropathy-associated T cell lymphoma, with very poor prognosis and >80% mortality in five years.

28Celiac Disease Market

Current Treatment Options and Their Limitations

Celiac disease is the only common autoimmune disorder with no approved medication. The only current available strategy for the management of celiac disease is a lifelong total avoidance of gluten. While simple in theory, the ubiquity of gluten in foodstuffs, medications, household substances, cosmetics, and gluten-free items makes total avoidance of gluten difficult, if not impossible.

The main challenge to the successful maintenance of a GFD is that cereal flours are widely used in the food industry and are present in numerous food products either naturally or as additives. Although gluten-free products can be purchased, commercially manufactured gluten-free products may be difficult to find, tend to be less flavorful and are more expensive than regular gluten containing foods. In addition, labeling of food products is deficient in many countries. Even in countries with superior labeling guidelines foods labeled “gluten-free” may nevertheless contain gluten. For example, in northern European countries amounts of up to 100 parts per million are permitted in gluten-free products designated apt for celiac sufferers.

For these reasons, celiac sufferers are regularly exposed to gluten contamination in the food and beverages they consume. This exposure to gluten contamination and the associated physiological and psychological consequences results in a self-limitation of social activities and/or a reduction in the variety of foods consumed. Thus, the only currently available management option of a GFD presents both a considerable challenge and substantial burden for patients. A study by Shah and collaborators (2014) found the burden of celiac disease and GFD on patient quality of life to be very high, second only to end-stage renal disease – a condition that requires multiple, weekly dialysis treatments.

As a result of the difficulty in maintaining total avoidance of gluten while on a GFD, gluten contamination causes 50% or more of all diagnosed celiac patients on a GFD to continue to experience disease activity. Patients who continue to have symptoms despite attempting to maintain a GFD are deemed to have NRCD. NRCD has been defined as “persistent symptoms, signs or laboratory abnormalities typical of celiac disease despite 6–12 months of dietary gluten avoidance”. As requested by patient support groups and experts, alternative treatment options that can be administered independently or in combination with a GFD, as well as treatments for refractory celiac disease, are required in order to improve the quality of life for celiac patients.

~~Overview~~There is no approved drug for celiac disease (“CD”). The annual healthcare utilization by NRCD patients in 2013 was $18,206, for $4,796 in matched controls due to the extra costs of ~~IL-15~~uncontrolled ~~Biology~~CD investigations and ~~PRV~~treatment of complications. Given the large prevalence (15 to 20 million patients world-~~015~~wide, ~~Mechanism~~1% of ~~Action~~the population in the Western world and 0.5% in Asia), and the unmet need (50% of patients on GFD continue to suffer from disease activity due to contaminating gluten in the diet), NRCD is considered a substantial opportunity for pharmaceutical development of an effective and well-tolerated adjunctive treatment to the GFD.

Overview of IL-15 Biology and ordesekimab Mechanism of Action

IL-15 is a pro-inflammatory cytokine that serves as a potent growth, survival, and activation factor for T cells, particularly IELs, and for natural killer (“NK”), cells. Increased expression of IL-15 has been demonstrated in a variety of inflammatory conditions, including celiac disease, RA, and psoriasis. IL-15 is considered a central regulator of celiac disease immunopathology and a non-redundant driver of lymphomagenesis in RCD-II.

Substantial evidence suggests a pathophysiological role for IL-15 in celiac disease:

Innate immunity:

	●	IL-15 is an essential, non-redundant growth and activation factor for the IELs which destroy the intestinal mucosa;
	●	The expression of IL-15 in the intestinal epithelium is necessary for villous atrophy; and
	●	In some patients, IL-15 drives progression towards lymphomagenesis and potentially fatal RCD-II.

Adaptive immunity:

	●	IL-15 enhances the presentation of deamidated gluten peptides by APCs;
	●	IL-15 renders the activated CD4+ T cells resistant to inhibition by Tregs; and
	●	IL-15 has been proven to be a key factor in the loss of tolerance to food antigens.

By activating the IELs, IL-15 is believed to be the main mediator in the mucosal damage that ensues in response to gluten exposure in celiac disease. The expression of IL-15 in the intestinal epithelium is necessary for villous atrophy in animal models of celiac disease and circumstantial evidence suggests this to be the case in humans, as well. In addition, IL-15 renders effector T cells resistant to inhibition by Tregs, promoting loss of tolerance to food antigens.

One of the studied mouse models of celiac disease is an IL-15-transgenic mouse, in which IL-15 overexpression by gut epithelial cells leads to celiac-like disease, including T and B cell-mediated pathology. IEL apoptosis has been observed in this animal model after treatment with anti-IL-15 or anti-IL-15-receptor monoclonal antibodies.

Figure 1. Multiple actions of IL-15 in the pathophysiology of celiac and refractory celiac disease

~~PRV-015 (ordesekimab,~~Ordesekimab (also known as AMG 714, and formerly HuMax-IL15), is a fully human immunoglobulin (IgG1κ) mAb which binds to and inhibits the function of IL-15 in all its forms (cis, trans, soluble IL-15 bound to IL-15Rα). ~~PRV-015~~Ordesekimab inhibits IL-15-induced T cell proliferation and shows a dose-dependent inhibition of IL-15-induced TNF-α production. ~~PRV-015~~Ordesekimab underwent preclinical testing and was subsequently evaluated in a Phase 1 and Phase 2 study in subjects with RA, in a Phase 1 study in healthy volunteers and in patients with psoriasis, and in two Phase 2a studies in celiac disease and refractory celiac disease Type-II.

Pre-clinical Evaluation of ~~PRV-015~~ordesekimab

The nonclinical development of ~~PRV-015~~ordesekimab consisted of a series of in vitro studies demonstrating the binding properties of ~~PRV-015~~ordesekimab against human IL-15; in vitro and in vivo studies providing proof-of-concept for the benefit of blocking the IL-15 pathway in celiac disease; and a series of GLP studies evaluating the nonclinical safety profile of Hu714MuXHu, the ~~PRV-015~~ordesekimab surrogate molecule which is active in macaques.

Pharmacology

~~PRV-015~~Ordesekimab was found to be efficacious in a mouse model of celiac disease triggered by the transgenic expression of human IL-15 in the gut epithelium. In this model, ~~PRV-015~~ordesekimab prevented IEL activation and proliferation, as well as histological abnormalities. In addition, ~~PRV-015~~ordesekimab was able to induce apoptosis of human IELs in ex vivo culture of small intestinal explants from active celiac disease and RCD-II patients. In this culture experiment, ~~PRV-015~~ordesekimab resulted in a suppression of IL-15-driven anti-apoptotic signaling via JAK3 and STAT5.

Toxicology

In vitro studies demonstrated that ~~PRV-015~~ordesekimab had high binding affinity for human IL-15, but lower affinity for macaque IL-15. Additionally, ~~PRV-015~~ordesekimab neutralized human IL-15 but did not efficiently neutralize macaque IL-15. To enable preclinical and toxicology studies in macaques, a surrogate antibody, Hu714MuXHu, was developed by Amgen by fusing the F(ab) portion of a mouse anti-human IL-15 mAb known to neutralize macaque IL-15, M111, with human IgG1 Fc. Hu714MuXHu was shown to neutralize macaque IL-15 with approximately the same potency as ~~PRV-015~~ordesekimab neutralizes human IL-15.

There was a decrease in NK cell counts and NK cell activity following administration of Hu714MuXHu to monkeys, reflecting a PD response to IL-15 blockade in this species, given the known role of IL-15 in NK cell biology in animal models (rodents and non-human primates). Of note, no changes in absolute or relative numbers of NK cells were observed in any of the human studies. This difference between observations in preclinical studies and clinical trials appears related to a differential sensitivity of human versus cynomolgus monkey NK cells to IL-15 deprivation. Human NK cells are not dependent on IL-15 for their survival, possibly due to the redundant role of IL-2 on human NK cells.

Pharmacokinetics of ~~PRV-015~~ordesekimab

The PK of ~~PRV-015~~ordesekimab was consistent with a typical human immunoglobulin G1 antibody with no apparent target-mediated disposition within the investigated dosing range. The mean half-life in human studies has been 20 to 22 days, potentially enabling monthly dosing.

There was no development of anti-drug antibodies to ~~PRV-015~~ordesekimab in healthy volunteers, patients with psoriasis or patients with refractory celiac disease. Only one RA patient in the phase 2b study was positive for anti-drug antibodies. Approximately 14% of patients with celiac disease developed anti-drug antibodies in the Phase 2a clinical trial, with an additional 10% presenting pre-existing anti-drug antibodies, a reflection of the abnormal antibody responses which characterize celiac disease. The anti-drug antibodies were not associated with injection reactions or adverse events, and they were non-neutralizing, with no impact on PK.

Proof of Mechanism for ~~PRV-015~~ordesekimab and Prior Clinical Evaluation

~~PRV-015~~Ordesekimab was initially developed for RA in two small Phase 1 and 2 studies with approximately 200 patients with moderate-to-severe disease. Although ~~PRV-015~~ordesekimab missed the primary endpoint in the Phase 2 study at week 14, the results were significant at weeks 12 and 16, establishing proof-of-concept. Approximately 60% of patients with active RA in both Phase 1 and Phase 2 studies versus approximately 30% of patients in the placebo groups demonstrated a response to treatment as measured by the American College of Rheumatology 20% improvement score (ACR 20) at 8 and 12 weeks, respectively. ~~PRV-015~~Ordesekimab also led to decreases in RA inflammatory biomarkers such as C-reactive protein and erythrocyte sedimentation rate. ~~PRV-015~~Ordesekimab was not effective in psoriasis in a small Phase 1 study, suggesting ~~PRV-015~~ordesekimab’s action is selective, unlike that of broad systemic immune suppressants.

Upon gluten challenge in a Phase 2 clinical trial in celiac disease (CELIM-NRCD-001), ~~PRV-015~~ordesekimab did not prevent gluten-induced architectural mucosal injury, and thus missed the primary endpoint, yet the high dose of ~~PRV-015~~ordesekimab, 300 mg, showed statistically significant attenuation of gluten’s effects on the change from baseline in intestinal inflammation, in patient-reported symptom questionnaires (the Celiac Disease Patient Reported Endpoint, CeD PRO, a registrational endpoint in NRCD) and in diarrhea, compared with placebo. The totality of the results from the patients who had gluten challenge indicate that 300 mg ~~PRV-015~~ordesekimab (formerly AMG 714) given every two weeks can ameliorate the inflammation and symptoms caused by substantial gluten exposure, the first demonstration of such dual benefit in intestinal inflammation and symptoms for any experimental medication for celiac disease. The results suggest that ~~PRV-015~~ordesekimab can be a potential adjunctive treatment for NRCD to the GFD to ameliorate or resolve persistent inflammation seen in the majority of celiac patients already on GFD.

In the Phase 2a clinical trial in RCD-II (CELIM-RCD-002), the primary endpoint (reduction in intestinal IELs) was not achieved, yet PRV-015 showed statistically significant benefit over placebo in reducing T cell receptor clonality (no increase in clonality with PRV-015) and symptoms (diarrhea). Other endpoints, such as histology, did not reach statistically significant differences between groups, but the results consistently favored PRV-015 numerically. PRV-015 was generally well tolerated, with no observed immunogenicity.28

Summary data of the Phase 2a clinical trial as presented at Digestive Disease Week in June 2018 is shown below:

The CELIM-NRCD-001 study included 62 randomized celiac patients on a gluten-free diet, of which 49 patients underwent a substantial gluten challenge of 2.5 grams per day for 10 weeks in order to assess the ability of ordesekimab ~~PRV-015~~ to ameliorate the effects of gluten. Upon gluten challenge, ~~PRV-015~~ordesekimab did not prevent gluten-induced architectural mucosal changes, the primary endpoint in the study. However, in secondary efficacy assessments, the ~~PRV-015~~ordesekimab 300 mg dose consistently attenuated the effects of gluten in intestinal inflammation (intraepithelial lymphocyte density, p=0.03), and in gastrointestinal symptoms as measured by three independent endpoints: the Celiac Disease Patient Reported Endpoint (CeD-PRO, p=0.02), the Celiac Disease Gastrointestinal Symptom Rating Scale (CeD-GSRS, p=0.07) and the Bristol Stool Form Scale (BSFS/diarrhea, p=0.0002). The CeD-PRO is a validated endpoint acceptable for registrational trials. In addition, patients in the ~~PRV-015~~ordesekimab 300 mg arm had a significantly improved Physician Global Assessment of disease (PGA, p=0.03). The totality of the results demonstrated proof-of-concept for ~~PRV-015~~ordesekimab 300 mg given subcutaneously every two weeks in the amelioration of inflammation and symptoms caused by the consumption of gluten by celiac patients. Importantly, ~~PRV-015~~ ordesekimab was well tolerated, and only 14% of patients developed anti-drug antibodies, which were non-neutralizing and not correlated with impact of efficacy or safety. The PK profile was consistent with a monoclonal antibody, and potentially enables future monthly dosing.

32In the Phase 2a clinical trial in RCD-II (CELIM-RCD-002), the primary endpoint (reduction in intestinal IELs) was not achieved, yet ordesekimab showed statistically significant benefit over placebo in reducing T cell receptor clonality (no increase in clonality with ordesekimab) and symptoms (diarrhea). Other endpoints, such as histology, did not reach statistically significant differences between groups, but the results consistently favored ordesekimab numerically. Ordesekimab was generally well tolerated, with no observed immunogenicity. A 5-year follow-up of a subset of patients in the CELIM-RCD-002 trial presented at a scientific conference in 2022 showed long-term benefit of treatment with ordesekimab in RCD-II, with reduction in disease activity and clinical improvement compared to patients who received placebo in the trial.

Current Clinical Development Program

Phase 2b Clinical Trial of ordesekimab in Celiac Disease (PROACTIVE Study)

We and our partner Amgen conducted chronic toxicology studies in 2019 and early 2020. In August 2020, we initiated the PROACTIVE study (PROvention Amgen Celiac ProtecTIVE Study), a randomized, double-blind, placebo-controlled, parallel-group, multicenter Phase 2 clinical trial in adult patients with NRCD. Ordesekimab will be administered every two weeks via subcutaneous route for six months. The hypothesis of this study is that ordesekimab will be superior to the GFD at intercepting the effects of contaminating gluten exposure in celiac patients following a GFD, as measured by symptoms and objective signs of intestinal inflammation after 24 weeks of treatment. Approximately 220 subjects are planned to be enrolled. Due to the impacts of the COVID-19 pandemic on certain aspects of medical care during the pandemic, such as a temporary halting of elective endoscopy procedures, lack of prioritization of chronic life-threatening conditions and reduced exposure to gluten due to reductions of travel and dining out, we are experiencing enrollment delays that have extended the enrollment target. We now expect to report top line results from the Phase 2b PROACTIVE study by the end of 2023.

Summary of clinical trials

Study Number (Phase; Sponsor)	Key Design Features	Dose Route, Duration	Study Population
Hx-IL15-001 (Phase 1; Genmab)	Double-blind, placebo-controlled, single SC infusion, dose escalation, study with open-label, repeat-dose (4 weekly doses) follow-up	Initial single dose: 0 or 0.15 to 8 mg/kg SC infusion Repeated dose: 0.5 to 4 mg/kg SC infusion once weekly for four weeks. five doses over eight weeks	30 subjects with RA
20030210 (Phase 2; Genmab/ Amgen)	Double-blind, placebo-controlled, multiple SC infusion, parallel-group, multicenter study	0 or 40 to 280 mg SC infusion dose every two weeks for 12 weeks with initial 200% loading dose	180 subjects with RA
20050193 (Phase 1; Amgen)	Double-blind, placebo-controlled, single SC or IV doses, dose-escalation study	SC doses: 0, 30, 100, 300 or 700 mg (cohorts 1 to 4) IV dose: 0 or 100 mg (cohort 5)	40 healthy subjects
20060349 (Phase 1b/2a; Amgen)	Double-blind, placebo-controlled, multiple SC doses, dose-escalating study	0 or 150 mg SC (cohort 1) 0 or 300 mg SC (cohort 2) Every two weeks for 12 weeks	22 subjects with moderate to severe psoriasis
CELIM-NRCD-001 (Phase 2a; Celimmune)	Double-blind, placebo- controlled, SC, parallel group, multicenter study	0, 150 mg or 300 mg PRV-015 once every two weeks for six consecutive doses over ten weeks	63 subjects with NRCD
CELIM-RCD-002 (Phase 2a; Celimmune)	Double-blind, placebo controlled IV infusion, parallel group, multicenter study	0 or 8 mg/kg IV, a total of seven times over ten weeks	24 subjects with Type II refractory celiac disease

Safety of PRV-015

20050193 (Phase 1; Amgen)	Double-blind, placebo-controlled, single SC or IV doses, dose-escalation study	SC doses: 0, 30, 100, 300 or 700 mg (cohorts 1 to 4) IV dose: 0 or 100 mg (cohort 5)	40 healthy subjects

20060349 (Phase 1b/2a; Amgen)	Double-blind, placebo-controlled, multiple SC doses, dose-escalating study	0 or 150 mg SC (cohort 1) 0 or 300 mg SC (cohort 2) Every two weeks for 12 weeks	22 subjects with moderate to severe psoriasis

CELIM-NRCD-001 (Phase 2a; Celimmune)	Double-blind, placebo- controlled, SC, parallel group, multicenter study	0, 150 mg or 300 mg ordesekimab once every two weeks for six consecutive doses over ten weeks	63 subjects with NRCD

CELIM-RCD-002 (Phase 2a; Celimmune)	Double-blind, placebo controlled IV infusion, parallel group, multicenter study	0 or 8 mg/kg IV, a total of seven times over ten weeks	24 subjects with Type II refractory celiac disease

~~Approximately~~Safety ~~250 subjects have been exposed to PRV-015 to date, including approximately 200 subjects for 12 weeks~~ of biweekly dosing. In all studies to date, PRV-015 was generally well tolerated by healthy volunteers, patients with active RA, and patients with celiac disease or RCD-II. While PRV-015 has the potential, to increase susceptibility to infections as is the case with immune modulators, PRV-015 has not demonstrated this effect in the six clinical trials completed to date. No deaths or clinically significant changes in laboratory parameters were observed, including no NK cell depletion.ordesekimab

~~The~~Approximately ~~only~~250 ~~adverse~~subjects ~~events clearly increased in PRV-015-treated patients~~ have been ~~injection site reactions, which were more commonly reported in subjects~~ exposed to ~~PRV-015,~~ordesekimab ~~in a dose-dependent fashion (up~~ to ~~~52%~~date ~~on PRV-015 vs ~26%~~ in ~~placebo~~completed ~~in the celiac Phase 2a clinical trial)~~studies, ~~and~~including ~~nasopharyngitis~~approximately ~~(most~~200 ~~cases~~subjects ~~with~~for ~~suspected~~12 ~~allergic~~weeks ~~origin~~of atbiweekly ~~a single site in RCD-II)~~dosing. In ~~the population which will be studied~~all instudies ~~Phase~~to 2bdate, ~~celiac~~ordesekimab ~~disease,~~was ~~there~~generally ~~were~~well notolerated ~~SAEs~~by inhealthy ~~the~~volunteers, ~~Phase~~patients 2awith ~~clinical~~active ~~trial~~RA, ~~while there were six SAEs (five on PRV-015~~ and ~~one~~patients onwith celiac ~~placebo)~~disease inor ~~the~~ RCD-II,. aWhile ~~much~~ordesekimab ~~sicker~~has ~~patient~~the ~~population~~potential, ~~with~~to ~~immune~~increase ~~suppression~~susceptibility atto ~~baseline.~~infections Ofas is the ~~five~~case ~~SAE~~with onimmune ~~PRV-015 in RCD-II patients~~modulators, ~~two~~ordesekimab ~~were~~has ~~infections~~not ~~(both~~demonstrated ~~resolved~~this ~~while~~effect onin ~~PRV-015).~~the ~~There~~six ~~was~~clinical ~~one~~trials ~~mild~~completed ~~balance~~to ~~disorder~~date. ~~(considered~~No ~~unlikely~~deaths toor beclinically ~~related~~significant ~~to PRV-015~~changes ~~and~~in ~~resolved~~laboratory ~~while~~parameters onwere ~~the~~observed, ~~drug).~~including ~~Another~~no ~~patient~~NK ~~had~~cell ~~mild cerebellar syndrome which led to discontinuation from the study~~depletion.

~~PRV~~The only adverse events clearly increased in ordesekimab-~~101~~treated patients have been injection site reactions, which were more commonly reported in subjects exposed to ordesekimab, in a dose-dependent fashion (~~CVB~~up ~~Vaccine~~to ~52% on ordesekimab vs ~26% in placebo in the celiac Phase 2a clinical trial), ~~for~~and ~~Acute~~nasopharyngitis ~~Infection~~(most cases with suspected allergic origin at a single site in RCD-II). In the population which will be studied in Phase 2b, celiac disease, there were no SAEs in the Phase 2a clinical trial, while there were six SAEs (five on ordesekimab and ~~T1D~~one on placebo) in the RCD-II, a much sicker patient population with immune suppression at baseline. Of the five SAE on ordesekimab in RCD-II patients, two were infections (both resolved while on ordesekimab). There was one mild balance disorder (considered unlikely to be related to ordesekimab and resolved while on the drug). Another patient had mild cerebellar syndrome which led to discontinuation from the study.

PRV-101 for Acute Infection and T1D

PRV-101 is a polyvalent inactivated prophylactic CVB vaccine candidate targeting all five key CVB serotypes associated the development of T1D, intended to prevent acute CVB infection and the development of CVB-induced T1D and celiac autoimmunity. Based on epidemiological and pre-clinical study data to date, we believe that, if successful, PRV-101 may prevent up to 50% of T1D cases and up to 20% of celiac cases. Preclinical studies completed to date by Vactech and replicated independently by us demonstrate that CVB triggers diabetes in animal models of T1D and that vaccination against CVB protects mice from acute infection as well as prevents the onset of diabetes triggered by CVB infection. Interim results in normal adult healthy volunteers, which we disclosed in a press release in October 2021, showed that in this study PRV-101 was well tolerated and elicited high titers of virus neutralizing antibodies, in a dose dependent fashion in healthy volunteers, against all CVB serotypes included in the vaccine, thus supporting further development of this vaccine.

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Current Clinical Development Program

First in Human Phase 1 Clinical Trial of PRV-101 (PROVENT Study)

In December 2020, we initiated the PROVENT (PROtocol for coxsackievirus VaccinE in healthy voluNTeers) study, a first-in-human study of PRV-101. PROVENT is a placebo-controlled, double-blind, randomized first-in-human study. The study’s primary endpoint is the safety of two dose levels of PRV-101 in healthy adult volunteers provided three administrations with 4-week intervals. Tolerability and immunogenicity were also evaluated. We completed enrollment in April 2021.

We reported positive interim results from this first-in-human study in October 2021. The interim analysis was conducted after all trial participants completed 4 weeks of follow-up after the 3rd dose (Week 12) to assess vaccine response and safety. In this interim analysis, PRV-101 met the primary endpoint demonstrating that it was well tolerated in this study, with no treatment-emergent Serious Adverse Events, Adverse Events of Special Interest, or Adverse Events that led to study drug discontinuation or study withdrawal. PRV-101 also met the secondary efficacy endpoint as it induced high titers of viral-neutralizing antibodies against all CVB serotypes included in the vaccine in a dose-dependent fashion. The percent of subjects who responded to all 5 serotypes (response defined as seroconversion if baseline-negative or >= 4x increase in VNT if baseline-positive) was 0% in placebo, 67% in the low dose and 100% in the high dose arm of PRV-101.

An additional 6-month safety and efficacy follow up will be conducted and final trial results from the trial are expected in the first half of 2022.

CVB Infection Market

Enteroviruses are responsible for an estimated ten to 15 million symptomatic infections in the United States annually. CVB contributes to a major part of the healthcare costs of enteroviruses as they cause the most serious complications and are among the most frequently reported enteroviral infections according to the CDC. Acute CVB infection is usually asymptomatic or causes common cold-type symptoms. It often also leads to a febrile illness associated by rash, hand-foot-mouth disease and/or mild GI distress. However, CVB infections also cause more severe manifestations including pericarditis, myocarditis, meningitis and pancreatitis.

	●	*Myocarditis:* CVB is the most common etiologic agents for myocarditis in the Western world, responsible for up to 33% of cases of myocarditis. Myocarditis is an important cause of sudden unexpected death: the prevalence of myocarditis in children and adolescents leading to sudden unexpected death has been reported to be as high as 8% to 42%. In certain individuals, acute myocarditis progresses to chronic myocarditis and dilated cardiomyopathy, which is a severe life-threatening condition.
	●	*Otitis media:* otitis media (middle ear inflammation) may develop in patients with upper respiratory disease caused by enterovirus. Otitis media constitutes 18% of physician visits in the United States (largest single reason in children). The costs of otitis media treatment in the United States were estimated to be approximately $3 billion in 2014.
	●	*Meningitis:* CVB is a common cause of enteroviral meningitis. Meningitis beyond the neonatal period is characterized by the sudden onset of fever of 38-40°C. Headache and photophobia are almost universally reported in these patients. Reports on the incidence of viral meningitis vary from approximately 50,000 hospitalized cases to over 2 million cases of aseptic meningitis per year. Based on 300,000 annual cases of aseptic meningitis in the United States (of which enteroviruses, and coxsackie viruses in particular, are the most common cause), the economic impact is estimated to be $1.5 billion in direct costs alone.

Overview of CVB Infection of the Pancreas, T1D and PRV-101’s Mechanism of Action

Longitudinal studies of more than 200,000 children studied for up to two decades in Finland by our technology licensor, Vactech, and its collaborators (“DIPP Study”), identified CVB infection as a likely environmental trigger in the onset of T1D autoimmunity and T1D-associated ~~celiac~~ ~~disease (“~~CD”) autoimmunity. Subsequent full-virome analysis of the TEDDY Study (400,000 children international study) confirmed that CVB is the only virus whose persistent infection is associated with the development of T1D and celiac disease autoimmunity (T1D-associated and also independent of T1D).

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CVB infection is very common and is responsible for various symptoms and complications ranging from mild respiratory disease, gastrointestinal disturbances and hand-foot-mouth disease to life-threatening cardiomyopathy and meningitis. However, in patients with a certain genetic background, CVB appears responsible for the development of autoimmunity. The T1D association with CVB infection has been observed in independent cohorts in 15 countries, including in North America, Europe and Australasia. These epidemiological observations have been substantiated by biological experimentation. Insulin-producing beta cells in the pancreas express specialized receptors associated with the transport, storage and release of insulin. These receptors appear to be used by CVB to preferentially infect these cells and polymorphism in these receptors are associated with development of T1D autoimmunity. Infection by enteroviruses can be detected in the pancreatic beta cells of approximately 60% of T1D patients and in the gut of most patients with T1D-associated CD. Importantly, if mothers have anti-CVB immunity at the time of the pregnancy, a 50% reduction in the onset of T1D autoimmunity (T1D-associated auto-antibodies) has been observed in their offspring, presumably due to protection by maternal antibodies passed on to the fetus. This observation strongly suggests the potential efficacy of CVB vaccination for children and/or mothers, resulting in the development of protective antibodies potentially capable of preventing or delaying the onset of T1D.

An analysis of stool samples collected from these individuals identified enterovirus infections prior to the first detection of T1D auto-antibodies. Enterovirus RNA was also detected in stool samples. Examination of antibodies present in DIPP children who developed at least two islet cell auto-antibodies (sign of early T1D) and/or progressed to clinical T1D confirmed that among all enteroviruses, only CVB was significantly associated with initiation of beta cell autoimmunity.

Enterovirus RNA in Blood is Linked to the Development of T1D

OR: odd ratio; CI: confidence interval; EV: enterovirus

Current Clinical Development Program

First in Human Phase 1 Clinical Trial of PRV-101 (PROVENT Study)

On March 28, 2022, we announced results from the final analysis of this first-in-human study. In the final analysis, six months following the last administered dose of the vaccine, PRV-101 met the primary endpoint confirming the tolerability observed in the previously reported interim analysis, with no treatment-emerging serious adverse events, adverse events of special interest, or adverse events leading to study drug discontinuation or study withdrawal. The results showed durability of VNT responses. Six months following the final dosing, the percentage of subjects in the high-dose PRV-101 arm who maintained high titers of VNT were 100% for the majority of serotypes included in the vaccine and no less than 90% for all serotypes. We are currently exploring partnership opportunities to further the clinical development of PRV-101.

Preclinical Evaluation PRV-101

Preclinical Data for PRV-101

The mechanism of action and efficacy of PRV-101 is supported by the results of several in vivo studies. Inactivated CVB-based viral vaccines efficiently protect mice from CVB infections and from viral spread to the pancreas, as seen for CVB1 and CVB3 vaccines. Similar experiments conducted with a vaccine covering all six CVB serotypes demonstrated that it can induce a strong neutralizing anti-CVB response in mice and protect the animals against multiple CVB infections from the corresponding live viruses. Independent experiments confirm that CVB infection can accelerate T1D onset in T1D susceptible NOD (Non-obese diabetic) or SOCS-1-Tg (suppressor of cytokine signaling 1 transgenic) mice, suggesting that protection from CVB infection would therefore protect against T1D development. This hypothesis has been confirmed in experiments conducted by the Karolinska Institute (Sweden) and the University of Tampere (Finland), demonstrating that CVB1 and CVB3 vaccines produced by Provention indeed protected SOCS-1-Tg mice against T1D induced by CVB1 and CVB3, respectively. These mice develop T1D after CVB infection as a consequence of a direct infection of insulin-producing beta cells in the pancreas and the subsequent immune response against the beta cells, mimicking human T1D. A three-injection vaccination course induced robust neutralizing antibody responses against CVB1/CVB3 and protected mice from both CVB1/CVB3 infection and CVB1/CVB3-driven T1D. CVB1/CVB3 infection led to a loss of insulin-producing cells in unvaccinated mice, which also was prevented by the vaccine. These data strongly supported the development of PRV-101 for the prevention of T1D in humans.

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Formalin-Inactivated CVB1 Vaccine is effective against CVB1-Induced T1D in a Mouse Model.

As seen in the left panel below, CVB1 infection led to loss of insulin-producing cells, and this pathology was completely prevented by the CVB1 vaccine (right panel). In this experiment, while 50% of unvaccinated mice develop T1D as a consequence of CVB1 infection, all vaccinated mice were protected (not shown).

Important from a safety point of view, the formalin-inactivated CVB1 vaccines did not cause any undesirable effects in the pancreas. There was no vaccine-induced pancreatic pathological change, islet autoimmunity or diabetes in the vaccinated mice. Similar results were obtained for Provention-manufactured CVB1 and CVB3 vaccines (not shown).

Finally, maternal CVB infection during gestation in mice protects the offspring from CVB infection and subsequent T1D development, presumably through transfer of specific antibodies from the mother to the fetus, corroborating previous findings in humans in the DIPP study and further supporting the use of a prophylactic vaccine to protect against CVB-associated-T1D.

CTA-Enabling Program to Support FIH Study

The CVB vaccine toxicology program to date has consisted of ~~Good Laboratory Practices (“~~GLP”) and non-GLP safety and immunogenicity studies conducted in mice. These studies were designed to identify and characterize potential toxicities associated with PRV-101 treatment, including those arising from the immune responses induced by the product. They mirrored the administration regimen that is now used in the PROVENT FIH study, and by the same route of administration.

Pharmacology studies have also been conducted to determine the desired composition of the vaccine, leading to successful GMP manufacturing of the final polyvalent vaccine for clinical trials.

Significant Contracts and Agreements Related to ~~Research~~Business ~~and Development Activities~~Operations

Co-Promotion Agreement

On October 4, 2022, we entered into the Sanofi Co-Promotion Agreement. Pursuant to the Sanofi Co-Promotion Agreement, we appointed Sanofi to co-promote and conduct certain commercialization activities with respect to TZIELD in the United States on a co-exclusive basis for the treatment to delay the onset of Stage 3 T1D in adult and pediatric patients aged eight years and older with Stage 2 T1D. We also committed to reimburse the field force-related expenses and certain other allowable expenses that Sanofi will incur in connection with commercializing TZIELD under the agreement, up to an aggregate cap of $33.0 million, which includes a pre-determined margin on field force-related expenses. Pursuant to the Sanofi Co-Promotion Agreement, we also granted Sanofi an exclusive, one-time right of first negotiation to obtain exclusive rights to research, develop and commercialize TZIELD with respect to the treatment or delay of T1D, or any of its root causes throughout the world, and to manufacture TZIELD in support of such research, development and commercialization (the “ROFN”) in exchange for a one-time, upfront, non-refundable payment of $20.0 million, and subject to certain retained rights by us to engage in discussions with third parties with respect to certain transactions (“Third Party Transactions”). Sanofi may exercise the ROFN until June 30, 2023 (the “Initial ROFN Period”), and the Initial ROFN Period may be extended at Sanofi’s election, upon payment of a one-time extension fee, to the later of (i) September 30, 2023, and (ii) 60 days after we deliver to Sanofi the top-line data for an identified clinical trial sponsored by us (the “Data Delivery Date”). Within six months following the later of the expiration of (x) the Initial ROFN Period, and (y) any extension to the Initial ROFN Period pursuant to the terms of the Sanofi Co-Promotion Agreement, we may not enter into a Third Party Transaction on terms that are materially less favorable in the aggregate to us than the most recent terms Sanofi offered, if any, without first permitting Sanofi to execute an agreement with us on either such terms previously offered by Sanofi or the terms offered by such third party.

The activities of the Company and Sanofi under the Sanofi Co-Promotion Agreement in the United States will be overseen by a joint steering committee composed of representatives from Provention and Sanofi. Under the Sanofi Co-Promotion Agreement, subject to any execution of a definitive agreement following an exercise of the ROFN, we will retain the right to develop, manufacture, supply and distribute, as well as determine the commercialization strategy for, TZIELD and will remain responsible for the costs of holding and maintaining regulatory approval of, reporting adverse events relating to, developing, manufacturing, supplying and distributing TZIELD. The term of the Sanofi Co-Promotion Agreement expires on December 31, 2023. Subject to specified notice periods and limitations, (a) Sanofi may terminate the Sanofi Co-Promotion Agreement early if regulatory approval for TZIELD either is not obtained in the United States by December 31, 2022 or is obtained but later withdrawn or we undergoes a change of control with a major biopharmaceutical company with a certain level of financial resources and (b) either we or Sanofi may terminate the Sanofi Co-Promotion Agreement early if (i) the other party commits an uncured material breach, (ii) the other party undergoes a bankruptcy event, (iii) there is a material safety event associated with teplizumab, or (iv) there is a prolonged delay in performance due to a force majeure event.

Simultaneously, we and Sanofi also entered into a Securities Purchase Agreement (the “Sanofi Securities Purchase Agreement”). Pursuant to the Sanofi Securities Purchase Agreement, if the BLA submitted to the FDA for the delay of clinical T1D in at-risk individuals is approved by the FDA, Sanofi has agreed to purchase $35.0 million of our common stock at a purchase price per share equal 140% of the daily volume-weighted average per share price of the Company’s common stock for the five consecutive trading days prior to the closing date. On February 9, 2023, we elected to proceed with the closing of the Sanofi Securities Purchase Agreement, pursuant to which, on February 10, 2023, Sanofi purchased 2,712,497 shares of our common stock at a purchase price of approximately $12.90 per share, which was equal to 140% of the daily volume-weighted average price per share of the Company’s common stock for the five consecutive trading days prior to the closing date, for a total investment of $35.0 million.

License and Acquisition Agreements

MacroGenics Asset Purchase Agreement

In May 2018, we entered into an Asset Purchase Agreement (the “MacroGenics Asset Purchase Agreement”) with MacroGenics pursuant to which we acquired MacroGenics’ interest in teplizumab ~~(renamed PRV-031), a humanized mAb for the treatment of T1D~~. As partial consideration for the MacroGenics Asset Purchase Agreement, we granted MacroGenics a warrant to purchase 2,162,389 shares of our common stock at an exercise price of $2.50 per share. In July 2019, these warrants were exercised by MacroGenics on a cashless basis. We are obligated to pay MacroGenics contingent milestone payments totaling $170.0 million upon the achievement of certain regulatory approval milestones, including $60.0 million which became payable ~~within~~on 90November 17, ~~days~~2022 ofwhen anthe ~~approval~~FDA approved TZIELD to delay the onset of aStage ~~BLA~~3 T1D in adult and pediatric patients aged eight years and older with Stage 2 T1D. This milestone is for athe first indication approved in the United States. In addition, we are obligated to make contingent milestone payments to MacroGenics totaling $225.0 million upon the achievement of certain sales milestones. We have also agreed to pay MacroGenics a single-digit royalty on net sales of the product. We have also agreed to pay third-party obligations, including low single-digit royalties, a portion of which is creditable against royalties payable to MacroGenics, aggregate milestone payments of up to approximately $0.7 million and other consideration, for certain third-party intellectual property under agreements we assumed pursuant to the MacroGenics Asset Purchase Agreement. Further, we are required to pay MacroGenics a low double-digit percentage of certain consideration to the extent it is received in connection with a future grant of rights to teplizumab by us to a third party. We are obligated to use reasonable commercial efforts to develop and seek regulatory approval for teplizumab.

36On November 30, 2022, we entered into Amendment No. 1 to the MacroGenics Asset Purchase Agreement (the “MacroGenics Amendment”) with MacroGenics. Pursuant to the MacroGenics Amendment, the $60.0 million milestone payment related to the achievement of FDA approval of TZIELD to delay the onset of Stage 3 T1D in adult and pediatric patients aged eight years and older with Stage 2 T1D was revised to require the amount to be paid in four equal installments rather than within 90 days of FDA approval. Under the MacroGenics Amendment, we paid $15.0 million on each of November 30, 2022 and March 1, 2023, and are required to pay MacroGenics $15.0 million on each of June 1, 2023 and September 1, 2023.

MacroGenics License Agreement

In May 2018, we entered into a License Agreement with MacroGenics (the “MacroGenics License Agreement”), pursuant to which MacroGenics granted us exclusive global rights for the purpose of developing and commercializing MGD010 (renamed PRV-3279), a humanized protein and a potential treatment for SLE and other similar diseases. As partial consideration for the MacroGenics License Agreement, we granted MacroGenics a warrant to purchase 270,299 shares of our common stock at an exercise price of $2.50 per share. In July 2019, these warrants were exercised by MacroGenics on a cashless basis. We are obligated to make contingent milestone payments to MacroGenics totaling $42.5 million upon the achievement of certain developmental and approval milestones for the first indication, ~~and~~of anwhich ~~additional~~we paid $0.4 million to MacroGenics in April 2022. This payment was triggered upon the enrollment of the first patient in the Phase 2a PREVAIL-2 study. We are also obligated to make contingent milestone payments totaling $22.5 million upon the achievement of certain regulatory approvals for a second indication. In addition, we are obligated to make contingent milestone payments to MacroGenics totaling $225.0 million upon the achievement of certain sales milestones. We have also agreed to pay MacroGenics a single-digit royalty on net sales of the product. Further, we are required to pay MacroGenics a low double-digit percentage of certain consideration to the extent received in connection with a future grant of rights to PRV-3279 by us to a third party. In connection with our grant of certain rights for PRV-3279 to Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (“Huadong”) under the Huadong License Agreement (as defined below), in May 2021, we paid $1.1 million to MacroGenics related to “qualified” consideration, as defined in the MacroGenics License Agreement, that we received from Huadong. See below for further description of the Huadong License Agreement.

We are obligated to use commercially reasonable efforts to develop and seek regulatory approval for PRV-3279. The license agreement may be terminated by either party upon a material breach or bankruptcy of the other party, by us without cause upon prior notice to MacroGenics, and by MacroGenics in the event that we challenge the validity of any licensed patent under the agreement.

Huadong License Agreement

In February 2021, we entered into a License Agreement with Huadong, a wholly-owned subsidiary of Huadong Medicine Co., Ltd. (the “Huadong License Agreement”), pursuant to which we granted Huadong exclusive rights for the purpose of developing and commercializing PRV-3279, a DART® (bispecific antibody-based molecule) targeting the B cell surface proteins CD32B and CD79B, in Greater China (mainland China, Hong Kong, Macau and Taiwan). We will retain exclusive worldwide rights to develop PRV-3279 for combination uses to reduce the immunogenicity of biotherapeutics, but Huadong will have the exclusive right to distribute PRV-3279 in that field in Greater China. In consideration of the license and other rights granted as part of the Huadong License Agreement, we received an upfront payment of $6.0 million and will receive up to $11.5 million in research, development and manufacturing funding over the next three years, of which $25.5 million was received as of December 31, ~~2021~~2022. If Huadong successfully develops, obtains regulatory approval for, and commercializes PRV-3279 in Greater China, we are eligible to receive up to $37.0 million in regulatory milestones and up to $135.0 million in commercial milestones based on aggregate net sales in a calendar year in Greater China. If commercialized, we would also be eligible to receive low double-digit royalties on net sales of PRV-3279 by Huadong in Greater China. The License Agreement may be terminated by either party upon a material breach or bankruptcy of the other party, by Huadong without cause upon at least 12 months prior notice to us, and by us in the event Huadong challenges a licensed patent or in the event that our upstream license terminates. We may also terminate the License Agreement if Huadong ceases commercialization of PRV-3279 for a consecutive period of six months after first commercial sale. We are generally responsible for the manufacturing of PRV-3279 through regulatory approval in Greater China, and Huadong will exclusively purchase all clinical and commercial supply requirements of PRV-3279 from us until Huadong exercises its option to assume manufacturing responsibilities, which may be triggered after regulatory approval in China. We will retain all rights to PRV-3279 in the rest of the world. We recently initiated a Phase 2a trial of PRV-3279 in systemic lupus erythematosus in January 2022 and are conducting a portion of this trial in in Hong Kong.

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Vactech License

In April 2017, we entered into a License Agreement with Vactech (the “Vactech License Agreement”), pursuant to which Vactech granted us exclusive global rights for the purpose of developing and commercializing the CVB vaccine platform technology. In consideration of the licenses and other rights granted by Vactech, we issued two million shares of our common stock to Vactech. We recorded the issuance of the shares at their estimated fair value of approximately $1.70 per share, for a total of $3.4 million as a license fee expense included as part of research & development expense for the year ended December 31, 2017. We paid Vactech a total of approximately $0.5 million for transition and advisory services during the first 18 months of the term of the agreement. Vactech is obligated to transition its intellectual property, provide reference samples, assist with the technology transfer to a third-party contract manufacturer, and participate on our scientific advisory board. In addition, we may be obligated to make a series of contingent milestone payments to Vactech totaling up to an additional $24.5 million upon the achievement of certain clinical development and regulatory filing milestones, of which we paid $0.5 million to Vactech in April 2021. This payment was triggered upon the dosing of the first patient in the Phase 1 PROVENT study, which occurred in January 2021. In addition, we have agreed to pay Vactech tiered single-digit royalties on net sales of any approved product based on the CVB platform technology and three additional payments totaling $19.0 million upon the achievement of certain annual net sales levels. The Vactech License Agreement may be terminated by us on a country by country basis without cause (in which case the exclusive global rights to the technology will transfer back to Vactech) and by either party upon a material breach or insolvency of the other party. If we terminate the agreement with respect to two or more specified European countries, the agreement will be deemed terminated with respect to all of the European Union, and if we terminate the agreement with respect to the United States, the agreement will be deemed terminated with respect to all of North America. The agreement expires upon the expiration of our last obligation to make royalty payments to Vactech.

Amgen License and Collaboration Agreement

In November 2018, we entered into a License and Collaboration Agreement (the “Amgen Agreement”) with Amgen for ~~PRV-015 (~~ordesekimab, (also known as AMG 714), a novel anti-IL-15 monoclonal antibody being developed for the treatment of gluten-free diet NRCD. Under ~~the~~ the terms of the agreement, we will conduct and fund a Phase 2b trial in NRCD and lead the development and regulatory activities for ~~the~~ the program. Amgen agreed to make an equity investment of up to $20.0 million in us, which was completed in September 2019 through the purchase of 2,500,000 shares of our common stock. Amgen is also responsible for the manufacturing of ~~PRV-015~~ordesekimab. Upon completion of the Phase 2b trial, a $150.0 million milestone payment is due from Amgen to us, plus an additional regulatory milestone payment, and ~~single~~ single digit royalties on future sales; provided, however, that Amgen has the right to elect not to pay the $150.0 million milestone, in which case we will have an option to negotiate for the transfer to us of rights to AMG 714 pursuant to a termination license agreement between Amgen and us. The material terms of the termination license agreement have been negotiated and agreed and form part of the Amgen Agreement. Under the terms of the termination license agreement, we would be obligated to make certain contingent milestone payments to Amgen and other third parties totaling up to $70.0 million upon the achievement of certain clinical and regulatory milestones and a low double-digit royalty on net sales of any approved product based on the IL-15 technology. The agreement may be terminated by either party upon a material breach or upon an insolvency event and by Amgen if we are not able to fund our clinical development obligations (among other termination triggers). The agreement expires upon the expiration of Amgen’s last obligation to make royalty payments to us.

AGC Biologics Agreement

In February 2019, we entered into services agreement with AGC Biologics (“AGC”), to manufacture and supply ~~teplizumab~~TZIELD for our ~~anticipated~~ anticipated clinical and commercial supply needs. We may terminate the agreement or any stage of services thereunder with 90 days’ prior written notice. If we provide less than 12 months’ notice of termination for the termination of a scheduled batch, we may incur a cancellation fee. The amount of the cancellation fee would depend on the timing of such notice. Each party also has the right to terminate the agreement for other customary reasons such as material breach and bankruptcy. The agreement contains provisions relating to compliance by AGC with current GMP, cooperation by AGC in connection with ~~potential~~ marketing applications for ~~teplizumab~~TZIELD, indemnification, confidentiality, dispute resolution and other customary matters for an agreement of this kind.

Parexel Services Agreement

In February 2019, we entered into a services agreement with Parexel (the “Parexel Services Agreement”), pursuant to which we retained Parexel to perform implementation and management services in connection with the PROTECT study of ~~teplizumab~~TZIELD. We may terminate ~~the~~ the services agreement or any work order for any reason and without cause with 90 days’ written notice. Either party may terminate the agreement in the event of a material breach or, bankruptcy petition by the other party or, if any approval from a regulatory authority is revoked, suspended or expires without renewal.

Intellectual Property

We believe that our current patent applications and any future patents and other proprietary rights that we own, or control through licensing, are and will be essential to our business. We believe that these intellectual property rights will affect our ability to compete effectively with others. We also rely and will rely on trade secrets, know-how, continuing technological innovations and licensing opportunities to develop, maintain and strengthen our competitive position. We seek to protect these, in part, through confidentiality agreements with certain employees, consultants, advisors and other parties. Our success will depend in part on our ability, and the ability of our licensor, to obtain, maintain (including making periodic filings and payments) and enforce patent protection for our/their intellectual property, including those patent applications to which we have secured exclusive rights.

We plan to spend considerable resources and focus in the future on obtaining United States and foreign patents. We have and will continue to actively protect our intellectual property. No assurances can be given that any of our patent applications will result in the issuance of a patent or that the examination process will not require us to narrow our claims. In addition, any issued patents may be contested, circumvented, found unenforceable or invalid, and we may not be able to successfully enforce our patent rights against third parties. No assurance can be given that others will not independently develop a similar or competing technology or design around any patents that may be issued to us. We intend to expand our international operations in the future and our patent portfolio, copyright, trademark and trade secret protections may not be available or may be limited in foreign countries.

~~PRV-031~~TZIELD (teplizumab-mzwv, anti-CD3 antibody)

Through our agreement with MacroGenics, we have acquired a patent portfolio that includes seven issued patents, including two United States patents and five ex-United States patents in Australia, Israel, Mexico and Singapore. The issued patents are set to expire no earlier than dates ranging from 2026 and 2028, subject to any disclaimers, patent term adjustments or extensions available under the law. These issued patents cover use of certain humanized antibodies that bind to CD3 in the treatment of autoimmune disorders, including T1D and RA.

WeIn September 2022, US Patent No. 11,434,291 and Japan Patent No. JP7137696 were granted, and these patents should expire in May 2040. Additional patent applications are pending in 14 countries. We have additionally filed ~~one~~four PCT international patent ~~application~~ applications, three United States non-provisional patent application, ~~four~~six United States provisional patent applications, and 21 ~~fourteen~~ ex-United States patent applications directed to various new uses of anti-CD3 antibodies, including teplizumab for the prevention or delay of clinical T1D, combination therapy as well as new dosing regimens. If issued, patents claiming priority to these applications will expire no earlier than 2040, subject to any disclaimers, patent term adjustments or extensions available under the law.

PRV-101 (CVB vaccine for the prevention of T1D and celiac disease)

Through our agreement with Vactech, we have a licensed patent portfolio that includes three issued United States patents, two pending United States patent applications, and 14 patents in various European countries (i.e., one granted European patent validated in 14 European Patent Convention member states). We also have ~~two~~one pending ~~provisional~~PCT ~~United~~application that ~~States~~is ~~patent applications~~ co-owned by Vactech and Provention. The issued United Stated patents, the pending United States patent applications, ~~and~~ the European country patents, and the pending PCT application disclose use of a CVB vaccine composition in the prevention or treatment of T1D.

The patents issued in the United States and various European countries generally have terms of 20 years from their respective priority filing dates, subject to available extensions, and are thus set to expire no earlier than 2032, subject to any disclaimers, patent term adjustments or extensions available under the law.

PRV-3279 (CD32B/CD79B diabody)

Through our agreement with MacroGenics, we have licensed a patent portfolio that includes: i) ~~191~~206 issued patents, including 1216 United States patents, ~~110~~115 patents in European countries, and 6975 patents in other ex-United States jurisdictions; and ii) 3537 pending patent applications, including eight pending United States patent applications, four pending European patent applications, and 2325 pending patent applications in other ex-United States jurisdictions.

The patents and patent applications disclose a platform technology for making diabodies, specific anti-CD32B antibodies, specific anti-CD79B antibodies, specific diabodies that co-ligate both CD32B and CD79B, as well as use of these antibodies and diabodies in treating various disorders, including cancer, autoimmune disorder, inflammatory disorder, and IgE-mediated allergic disorder.

The issued patents in the United States and various ex-United States countries generally have terms of 20 years from their respective priority filing dates, subject to available extensions, and are thus set to expire no earlier than dates ranging from 2032 and 2034, subject to any disclaimers, patent term adjustments or extensions available under the law. In the event that the pending patent applications issue as patents, although there can be no assurance that the patent applications will issue, the patents would be set to expire no earlier than dates ranging from 2032 and 2037, subject to any disclaimers, patent term adjustments or extensions available under the law.

We have additionally filed two PCT international patent applications, three United States non-provisional patent application, and ~~one~~13 ex-United States ~~provisional~~ patent ~~application~~applications directed to new uses of B cell inhibitors such as PRV-3279, including the prevention of immunogenicity associated with gene therapy, and treatment of B cell driven autoimmune and/or allergic diseases, among other things. If issued, patents claiming priority to these applications will expire no earlier than 2040, subject to any disclaimers, patent term adjustments or extensions available under the law.

~~PRV-015 (ordesekimab~~Ordesekimab (anti-IL-15 antibody)

Through our agreement with Amgen, we have licensed a patent portfolio that includes: i) 8034 issued patents, including eight United States patents, 4216 patents in European countries, and 3010 patents in other ex-United States jurisdictions; and ii) 1819 pending patent applications, including two pending United States patent applications, one pending European patent application, and 1516 pending patent applications in other ex-United States jurisdictions.

The patents and patent applications disclose anti-IL-15 antibodies, methods of using the same, manufacturing conditions and dosages of the same.

The issued patents are set to expire no earlier than dates ranging from ~~2022~~2024 and 2027, subject to any disclaimers or extensions under the law. In the event that the pending patent applications issue as patents, although there can be no assurance that the patent applications will issue, the patents would be set to expire no earlier than dates ranging from 2026 and 2037, subject to any disclaimers, patent term adjustments of extensions available under the law.

PRV-6527 (CSF-1R small molecule inhibitor)

Through our agreement with Janssen Pharmaceutica NV, we have licensed a patent portfolio that includes: i) 73 issued patents, including one United States patent, one patent in European countries, and 71 patents in other ex-United States jurisdictions; and ii) three pending patent applications, including one pending United States patent application, one pending European patent application, and one pending patent applications in other ex-United States jurisdictions. The issued patents are set to expire no earlier than dates ranging from 2027 and 2030, subject to any disclaimers, patent term adjustments or extensions under the law. In the event that the pending patent applications issue as patents, although there can be no assurance that the patent applications will issue, the patents would be set to expire no earlier than dates ranging from 2027 and 2030, subject to any disclaimers, patent term adjustments or extensions under the law.

Sales and Marketing

We are a ~~clinical~~newly commercial stage company, without a history of commercial revenue or marketing experience. WeBecause ~~intend~~commercialization is expensive and time consuming, we have appointed Sanofi to ~~commercialize~~co-promote ~~teplizumab~~and ~~ourselves in~~conduct certain commercialization activities with respect to TZIELD in the United States,. ~~however,~~See ~~because~~the ~~commercialization~~section isentitled ~~expensive~~“Significant Contracts and ~~time~~Agreements ~~consuming,~~Related ~~we intend~~ to ~~explore~~Business ~~multiple~~Operations ~~commercialization~~– Co-Promotion ~~strategies~~Agreement” ~~outside~~in ~~the~~this ~~United~~Annual ~~States,~~Report ~~including:~~on Form 10-K.

●We also ~~exploring~~intend ~~strategic~~to ~~partners~~explore ~~for~~multiple commercialization instrategies ~~markets~~ outside the United States;, including:

40● exploring strategic partners for commercialization in markets outside the United States; ● considering launching in the U.K. ourselves, depending on ongoing discussions with potential partners ex-United States; ● strategically entering into co-development partnership(s) to retain potential for commercialization rights on selected drug candidate(s) and market opportunities; and

● considering launching in the U.K. ourselves, depending on ongoing discussions with potential partners ex-United States; ● developing drug candidates through the earlier stages of clinical development with the objectives of rapid, cost effective risk reduction and value creation and then establishing strategic partnership for late stage clinical development and subsequent commercialization; ● developing a robust pipeline of promising drug candidates at various stages of the development process to establish optionality and regular value inflection opportunities and revenue(s); ● strategically entering into co-development partnership(s) to retain potential for commercialization rights on selected drug candidate(s) and market opportunities; and ● partnering with industry participants to incorporate our technology into new and existing drugs.

We expect that partnering with pharmaceutical or biotherapeutic companies may accelerate product acceptance into target market areas outside the United States and gain the sales and marketing advantages of the partner’s distribution infrastructure. We intend to continue to strengthen our market position and solidify our leadership position in immunotherapy by continuing to improve our technology, broadening our clinical and therapeutic applications, identifying new clinical and therapeutic applications and forming strategic relationships with our licensors.

Manufacturing

We do not currently own or operate manufacturing facilities for the production of clinical or commercial quantities of ~~any~~TZIELD ofor our product candidates. Although we rely and intend to continue to rely upon third–party contract manufacturers to produce our products and product candidates, we have recruited personnel and consultants with experience to manage these third–party contract manufacturers. In certain cases, our collaboration partners for each respective program are responsible for providing clinical drug supply or drug product for those program’s clinical trials. In other cases, we have engaged third-party manufacturers to provide services related to process development, non-GMP and GMP manufacturing and other related services.

The table below lists the third-party responsible for manufacturing drug supply for each of our programs:

Product Candidate	Supplier	Party Responsible for Costs
PRV-031 (teplizumab)	AGC Biologics	Provention
TZIELD	AGC Biologics	Provention
PRV-101	Intravacc	Provention
PRV-3279	~~Existing~~Current drug supply – MacroGenics Future drug supply – vendors being evaluated	~~MacroGenics~~Provention Provention
PRV-015 (ordesekimab)	Amgen	Amgen
Ordesekimab	Amgen	Amgen

We have historically relied upon an existing supply of teplizumab produced by MacroGenics for use in our clinical trials of teplizumab. This existing supply is insufficient to fully supply the ongoing PROTECT study to completion or our potential commercialization need. In February 2019, we entered into an agreement with AGC Biologics to manufacture teplizumab for our anticipated clinical trial needs as as well as for ~~potential~~the commercialization of ~~teplizumab~~TZIELD.

Supplies of ~~teplizumab~~TZIELD sufficient to supply ~~the~~our ~~PROTECT~~commercial ~~study~~launch and expected demand have been manufactured by our CMOs. ~~and~~In ~~are~~addition, ~~currently~~we ~~being~~have ~~utilized~~sufficient supply into complete the PROTECT study and our other clinical development needs.

In order to ~~obtain~~maintain regulatory approval for ~~teplizumab~~TZIELD, third-party manufacturers ~~have~~will ~~been~~be required to consistently produce ~~teplizumab~~TZIELD in ~~commercial~~ commercial quantities and of specified quality on a repeated basis and document their ability to do so. The required number of batches of teplizumab have been manufactured at our CMOs by the processes we intend to use for commercialization. The quality and consistency of these lots, along with their comparability to teplizumab manufactured for clinical studies, is now under review by the FDA.

If the FDA concludes that the teplizumab manufactured by the current third-parties is not of sufficient quality, or is not comparable to drug product used in the TN-10 study, delays in FDA acceptance of our BLA resubmission may occur. If the FDA applies a shorter shelf life of teplizumab than we planned, this may negatively impact our commercial supply. Such impacts would, in turn, delay the potential marketing and commercialization of teplizumab, which would materially and adversely affect our business.

Competition

We face substantial competition from well-established large pharmaceutical companies, as well as innovative new entrants. Nevertheless, we believe our strategic intent is sufficiently differentiated in that we are focusing on intercepting or potentially preventing the onset and progression of immune-mediated and inflammatory diseases by selecting and developing product candidates that are aimed at relevant and predominantly upstream pathophysiological targets.

The symptomatic treatment of T1D is a highly competitive market with large incumbents such as Sanofi, Novo Nordisk and Eli Lilly providing insulin and Medtronic, Abbott, and Dexcom providing blood glucose monitoring products and many working on new ways to manage the disease. Our goal is to delay or prevent the onset of T1D and spare patients the need to live with blood glucose monitoring and daily insulin injections and ~~this~~the ~~therapy’s~~ many complications and clinically relevant shortfalls of this therapy. We believe our enteroviral vaccine approach is unique in that it aims to prevent the onset of T1D prior to the rise of immune cells and auto-antibodies programmed to attack insulin producing beta cells. We are aware of competitive vaccine technologies in development that are attempting to alter the autoimmune cycle once these auto-antibodies have been detected. However, we believe our vaccine approach may intercept the process prior to this cycle being initiated (primary prevention). There is at this time no other CVB vaccine in clinical development.

We believe, our secondary prevention (i.e., interception) approach with ~~teplizumab~~TZIELD is more advanced and differentiated from other immunomodulation therapies which have shown preservation of beta cell function in early phase studies of newly diagnosed onset T1D including anti-thymocyte globulin (ATG), CTLA4-Ig (costimulatory blocker), anti-CD20 (Rituxan) and LFA3-Ig (alefacept). All of these Phase 2 studies were conducted by the academic community or by T1D networks and do not appear to be in active Phase 3 development by industry sponsors. The most recent data were reported with ~~Thymoglobulin~~thymoglobulin which is an approved anti-thymocyte globulin obtained by immunization of rabbits with human thymocytes and is indicated for the treatment of renal transplant acute rejection in conjunction with concomitant immunosuppression and for induction in adult renal transplant recipients. Low dose ATG was administered intravenously for 2 days in early onset T1D (within 100 days of diagnosis). While C-peptide preservation was observed, due to the risk of serum sickness, ATG was administered during a 2-3 day hospitalization and required pre-medication, including intravenous corticosteroids. In January 2020, a Phase 3 trial in newly diagnosed T1D patients with ladarixin (Dompe) an interleukin-8 inhibitor, was announced on the basis of post-hoc results in a subset of patients after the drug failed to improve C-peptide in Phase 2a. Importantly, ~~teplizumab~~TZIELD is the only ~~experimental~~ drug ~~with~~approved ~~positive~~for ~~data in Stage 2, in~~ the prevention/delay of clinical T1D in Stage 2 T1D patients, and no other pivotal studies are on-going in this indication.

PRV-015 has the potential to be the first drug ever approved for CD since it is the only medication which has shown simultaneous improvement in gluten-induced symptoms and gut inflammation to date, and since most clinical-stage products are early in development and have not established proof-of-concept. There is another anti-IL-15 mAb in clinical development, CALY002 by Calypso, currently in Phase 1. Potential competition includes the recent initiation of a Phase 1b study with the marketed psoriasis anti-IL-23 mAb guselkumab (TREMFYA, Janssen), and experimental medications in development by: 9 Meters (larazotide acetate, Phase 2b study completed in 2014; Phase 3 started in 2019 as a symptomatic relief, not disease-modifying agent), ImmunogenX (IMGX-003/latiglutenase, Phase 2b study completed in 2016 missed primary endpoint, new phase 2a started in 2019), Zedira/Dr. Falk (ZED1227, positive phase 2a reported in 2021), Takeda (with TAK-101, formerly NP-GLI, in Phase 1b/2a after Phase 1/2 completed in 2019; and TAK-062, formerly KumaMax, in Phase 1b after Phase 1 completed in 2019) and Anokion (in Phase 1 with KAN-101).39

~~The market~~Ordesekimab ~~for~~has ~~lupus~~the ispotential ~~currently~~to ~~led~~be bythe ~~large~~first ~~pharmaceutical~~drug ~~companies~~ever commercializing older, off-patent products such as steroids, immunosuppressive agents including azathioprine, cyclosphosphamide, cyclosporine and mycophenolate. In addition, Glaxo SmithKline (“GSK”) and Roche offer recently approved Bfor ~~cell-targeted~~CD ~~agents.~~since ~~GSK~~it ~~received~~is ~~approval~~one ~~for~~of ~~belimumab (Benlysta) in 2011,~~ the ~~first~~few ~~drug~~experimental ~~approval~~candidates inwhich ~~lupus~~have inshown 50simultaneous ~~years.~~improvement ~~Despite~~in ~~modest~~gluten-induced ~~efficacy~~symptoms and ~~slow~~gut ~~onset of effect~~inflammation, ~~belimumab’s~~and ~~annual~~since ~~sales~~most ~~are~~clinical-stage ~~currently approximately~~products ~~$800 million and~~ are ~~expected~~early toin ~~grow~~development ~~with~~and ~~the~~have ~~December~~not ~~2020~~established ~~approval in lupus nephritis~~proof-of-concept. ~~Roche’s~~There ~~rituximab (Rituxan), a blockbuster drug,~~ is ~~used~~another ~~off~~anti-~~label~~IL-15 inmAb ~~lupus despite not having been approved~~ in ~~SLE.~~clinical ~~The~~development, ~~calcineurin~~CALY002 ~~inhibitor voclosporin (Aurinia Pharmaceuticals)~~by ~~was~~Calypso, ~~approved~~currently ~~for~~in ~~lupus~~Phase ~~nephritis~~1, inand ~~January~~a ~~2021.~~new ~~Anifrolumab~~IL-15/IL-21-targeting ~~(SAPHNELO~~peptide, ~~Astra~~EQ102 ~~Zeneca)~~by isEquilium, ainitiating ~~type~~Phase 1. ~~interferon~~Potential ~~receptor~~additional ~~mAb approved in~~competition ~~July~~includes ~~2021.~~the ~~The~~recent ~~lupus~~initiation ~~field~~of isa ~~competitive~~Phase ~~and~~1b ~~new~~study ~~experimental~~with ~~drugs~~the ~~are~~marketed ~~being~~psoriasis ~~tested in late~~anti-~~stage~~IL-23 ~~trials~~mAb byguselkumab ~~large~~(TREMFYA, ~~pharmaceutical~~Janssen), ~~companies~~ and ~~early~~experimental medications toin ~~mid-stage~~Phase ~~biotech~~2b ~~companies.~~development Weby: ~~expect~~ImmunogenX ~~that PRV~~(IMGX-~~3279 will be differentiated from the competition because of greater and faster-onset efficacy~~003/latiglutenase), ~~better~~Takeda/Zedira/Dr. ~~safety~~Falk (~~PRV-3279 does not deplete B cells and is not expected to be immune-suppressive~~TAK1227), and ~~less~~Takeda ~~side~~TAK-062. Earlier ~~effects~~experimental ~~(since~~candidates ~~PRV-3279~~in isdevelopment ainclude ~~highly~~Takeda’s ~~specific~~TAK-101 ~~mAb~~(in ~~with~~Phase ~~likely~~1b/2a) ~~minimal~~and ~~off-target~~Anokion’s ~~side effects)~~KAN-101.

42The market for lupus is currently led by large pharmaceutical companies commercializing older, off-patent products such as steroids, immunosuppressive agents including azathioprine, cyclosphosphamide, cyclosporine and mycophenolate. In addition, Glaxo SmithKline (“GSK”) and Roche offer B cell-targeted agents. GSK received approval for belimumab (Benlysta) in 2011, the first drug approval in lupus in 50 years. Despite modest efficacy and slow onset of effect, belimumab’s annual sales are currently approximately $1.2 billion and are expected to continue to grow following the December 2020 approval in lupus nephritis. Roche’s rituximab (Rituxan), a blockbuster drug, is used off-label in lupus despite not having been approved in SLE. The calcineurin inhibitor voclosporin (Aurinia Pharmaceuticals) was approved for lupus nephritis in January 2021. Anifrolumab (SAPHNELO, Astra Zeneca) is a type 1 interferon receptor mAb approved in July 2021. The lupus field is competitive and new experimental drugs are being tested in late-stage trials by large pharmaceutical companies and early to mid-stage biotech companies. We expect that PRV-3279 will be differentiated from the B cell-focused competition because of greater and faster-onset efficacy, better safety (PRV-3279 does not deplete B cells and is not expected to be immune-suppressive), and less side effects (since PRV-3279 is a highly specific mAb with likely minimal off-target side effects).

There are no drugs approved for the prevention of the immunogenicity of biotherapeutics, and rituximab is occasionally used off-label in gene therapy. Experimental medications are being tested in Phase 1-2 by Selecta Biosciences and Hansa Biopharma.

Government Regulation

Our business activities, including the manufacturing, research, development and marketing of TZIELD and our product candidates, are subject to extensive regulation by numerous governmental authorities in the United States, the European Union, the United Kingdom and other countries. Before marketing in the United States, the European Union, or the United Kingdom, any new drug developed by us or our collaborators must undergo rigorous preclinical testing, clinical trials and an extensive regulatory clearance process implemented by the FDA, EMA or MHRA, respectively. The process for obtaining regulatory approval and compliance with applicable federal, state ~~and~~, supranational, domestic and local laws and regulations requires the expenditure of substantial time and financial resources. ~~Moreover,~~Government ~~government~~and ~~coverage~~private ~~and~~payor coverage and reimbursement policies will both directly and indirectly impact our ability to successfully commercialize any future approved products, and such coverage and reimbursement policies will be impacted by ~~enacted and any~~ applicable future healthcare ~~reform~~ and drug pricing ~~measures~~ initiatives. In addition, in the United States, we are subject to state and federal laws, including, among others, anti-kickback laws, false claims laws, data privacy and security laws, and transparency laws that restrict certain business practices in the pharmaceutical industry. We are also subject to equivalent legislation in the other countries where we perform our business activities.

~~US Regulation of Drugs and Biologics~~40

InRegulation ~~the United States, FDA regulates human drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and in the case~~ of ~~biologics, also~~Drugs ~~under the Public Health Service Act (“PHSA”)~~ and their implementing regulations. The FDA regulates, among other things, the development, testing, manufacture, safety, efficacy, record keeping, packaging, labeling, storage, approval, advertising, promotion, import, export, sale and distribution of biopharmaceutical products.Biologics

In the United States, the FDA regulates human drugs under the Federal Food, Drug, and Cosmetic Act (“FDCA”) and in the case of biologics, also under the Public Health Service Act (“PHSA”) and their implementing regulations. In the European Union, the EMA primarily regulates human drugs under Directive 2001/83/EC, Regulation (EU) 726/2004, and associated legislation, as amended from time to time. In the United Kingdom, the MHRA primarily regulates human drugs under the Human Medicines Regulations 2012/1916 and associated legislation. In their respective jurisdictions, the FDA, EMA and MHRA regulate, among other things, the development, testing, manufacture, safety, efficacy, record keeping, packaging, labeling, storage, approval, advertising, promotion, import, export, sale and distribution of biopharmaceutical products.

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

	●	completion of preclinical laboratory tests, animal studies and formulation studies according to GLP regulations or other applicable regulations;
	●	submission to the FDA of an Investigational New Drug Application (“IND”), which must become effective before human clinical trials may begin;
	●	approval by an independent institutional review board (“IRB”) or ethics committee at each clinical trial site before each clinical trial may be initiated;
	●	performance of adequate and well-controlled human clinical trials in accordance with applicable IND regulations, good clinical practices (“GCPs”), and other clinical-trial related regulations to evaluate the safety and efficacy of the investigational product for each proposed indication;
	●	preparation and submission to the FDA of a New Drug Application (“NDA”) or BLA requesting marketing approval for one or more proposed indications, including payment of application user fees;
	●	acceptance of the NDA or BLA for filing and review by the FDA;
	●	review of the NDA or BLA by an FDA advisory committee, where applicable;
	●	satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the drug or biologic is produced to assess compliance with GMP requirements to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;
	●	satisfactory completion of any FDA audits of the non-clinical and clinical trial sites to assure compliance with GCPs and the integrity of the clinical data submitted in support of the NDA or BLA; and
	●	FDA review and approval of the NDA or BLA, which may be subject to additional post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy (“REMS”), and any post-approval studies required by the FDA.

43Equivalent processes are in place in the European Union and the United Kingdom. The key features of the approval processes in Europe are as follows:

	●	prior to any clinical trial commencing, a clinical trial authorization (“CTA”) must be obtained from the national competent authority (“NCA”) of each country in which the clinical trial will be conducted and new legislation has recently entered into application in the European Union which, subject to transition periods, will streamline this process;
	●	prior to any clinical trial commencing, a favorable opinion of a research ethics committee (“REC”) in each country in which the clinical trial will be conducted must be obtained;
	●	in relation the European Union and United Kingdom respectively, preparation and submission to the EMA through the Centralized procedure which is mandatory for medicinal products developed by means of biotechnological processes and MHRA of an MAA requesting marketing approval for one or more proposed indications, including payment of application user fees;
	●	in relation the European Union, following a successful review of the MAA, the EMA will issue an opinion on the approvability of the MAA to the European Commission, who will then decide whether to issue the marketing authorization (“MA”) in a binding decision; and in relation to the United Kingdom, following a successful review of the MAA, the MHRA will act on behalf of the Licensing Authority to issue an MA.

Nonclinical and Clinical Development

Before testing any drug product candidates in humans, the product candidate intended for human use must undergo rigorous laboratory and animal testing until adequate proof of safety is established. This preclinical testing generally involves laboratory evaluations of drug chemistry, formulation and stability, as well as in vitro and animal studies, to assess the potential for adverse events and in some cases to establish a rationale for therapeutic use. ~~The~~In the United States, the conduct of preclinical studies is subject to federal regulations and requirements, including GLP regulations for safety and toxicology studies, and equivalent rules apply in the European Union and United Kingdom. The sponsor must submit the results of the preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND, and to the NCAs of the European Union member states and the MHRA (as applicable) as part of their respective CTA application procedures. An IND is a request for authorization from the FDA to administer an investigational product to humans and must become effective before human clinical trials may begin. An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time, the FDA raises concerns or questions related to one or more proposed clinical trials and places the trial on clinical hold. In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not result in the FDA allowing clinical trials to commence. Equivalent processes apply in the NCAs of the European Union member states and the MHRA.

The clinical stage of development involves the administration of the investigational product to healthy volunteers or patients under the supervision of qualified investigators, in accordance with GCP requirements, which include the requirement that all patients provide their informed consent for their participation in any clinical trial. Clinical trials are conducted under protocols detailing the objectives of the study, inclusion and exclusion criteria, the parameters to be used in monitoring the safety and effectiveness criteria to be evaluated. Each protocol, as well as any subsequent amendments, must be submitted to the FDA as part of the IND, and to the NCAs of the European Union member states and the MHRA (as applicable) as part of their respective CTA application procedures. Additionally, in the United States, each clinical trial and its related documentation, including the trial protocol and informed consent form, must be reviewed and approved by an IRB for each institution at which the clinical trial will be conducted to ensure that the risks to individuals participating in the clinical trials are minimized and are reasonable in relation to anticipated benefits. ~~Some~~In Europe, the process involves the review of equivalent documents by a REC in each country in which the clinical ~~trials~~trial will be conducted. In the United States, some clinical trials are also overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group may recommend continuation of the study as planned, changes in study conduct, or cessation of the study at designated checkpoints based on access to certain data from the study.

Clinical trials for new product candidates are then typically conducted in humans in three sequential phases that may overlap. Phase 1 trials involve the initial introduction of the product candidate into a small number of healthy human volunteers or disease-affected patients who are initially exposed to a single dose and then multiple doses of the product candidate. The emphasis of Phase 1 trials is on testing for safety or adverse events, dosage, tolerance, metabolism, distribution, excretion and clinical pharmacology. Phase 2 involves studies in a limited patient population to determine the initial efficacy of the compound for specific targeted indications, to determine dosage tolerance and optimal dosage, and to identify possible adverse side effects and safety risks. Once a compound shows evidence of effectiveness and is found to have an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to more fully evaluate clinical outcomes. Phase 3 clinical trials generally involve a large number of patients at multiple sites and are designed to provide the data necessary to demonstrate the effectiveness of the product for its intended use, its safety in use and to establish the overall benefit/risk relationship of the product and provide an adequate basis for product labeling. Post-approval trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. These trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA, EMA or MHRA (as applicable) may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA, BLA or ~~BLA~~MAA (as applicable). Failure to exhibit due diligence with regard to conducting mandatory Phase 4 clinical trials could result in withdrawal of approval for products.

During the development of a new drug or biological product, sponsors have the opportunity to meet with the FDA at certain points, including prior to submission of an IND, at the end of phase 2, and before submission of an NDA or BLA. These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach agreement on the next phase of development. In the European Union and the United Kingdom, scientific advice can be sought from regulators to guide product development. Regulatory authorities, IRBs, RECs and Data Monitoring Committees may require additional ~~data~~ data before allowing clinical trials to commence, continue or proceed from one phase to another, and could demand that studies be discontinued or suspended at any time if there are significant safety issues. Progress reports detailing the results of the clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur. The FDA, NCAs of the European Union member states and/or MHRA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the clinical protocol, GCP, or other IRB requirements or if the drug has been associated with unexpected serious harm to patients.

Information about certain clinical trials, including details of the protocol and eventually study results, also must be submitted within specific time frames to the National Institutes of Health for public dissemination on the Clinicaltrials.gov data registry.42

44In the United States, information about certain clinical trials, including details of the protocol and eventually study results, also must be submitted within specific time frames to the National Institutes of Health for public dissemination on the Clinicaltrials.gov data registry. In the European Union, this information must be posted on the European Union Clinical Trials Register, and in the United Kingdom, it must be posted on a publicly accessible database.

Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the physical characteristics of the drug or biologic and finalize a process for manufacturing the product in commercial quantities in accordance with GMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality, potency and purity of the final drug or biological product. For biological products in particular, the PHSA emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined in order to help reduce the risk of the introduction of adventitious agents. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

Generating the required data and information for regulatory approval takes many years and requires the expenditure of substantial resources. Following completion of the required testing, the results of the nonclinical studies and clinical trials, along with information relating to the product’s chemistry, manufacturing, and controls and proposed labeling, are submitted to, in relation to the United States, the FDA as part of an NDA or BLA, ~~requesting~~and in relation to the European Union and the United Kingdom, the EMA and MHRA respectively as part of an MAA, requesting approval to market the product for one or more indications. To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the investigational product in the proposed patient population to the satisfaction of the FDA, EMA and/or MHRA (as applicable). Under the PDUFA, each NDA or BLA must be accompanied by a user fee, which for federal fiscal year ~~2021~~2022 is $23,~~875~~117,~~842~~ 218 for an application requiring clinical data. The sponsor of an approved NDA or BLA is also subject to an annual program fee, which for fiscal year ~~2021~~2022 is $~~336~~369,~~432~~413. The FDA adjusts the PDUFA user fees on an annual basis, but fee waivers or reductions are available in certain circumstances. In the European Union, the MAA must be accompanied by an application fee, which, as of January 16, 2023, starts at EUR 297,400 for applications concerning a single strength, one pharmaceutical form, and one presentation. In the United Kingdom, the MAA must be accompanied by an application fee, which, as of January 16, 2023, varies from GBP 18,473 for MAAs submitted pursuant to the reliance procedure for approval to be granted based on the assessment already carried out by the EMA, to GBP 92,753 for stand-alone MAAs.

~~Under~~In the United States, under applicable laws and FDA regulations, each NDA or BLA submitted for FDA approval is given an internal administrative review within 60 days following submission of the NDA or BLA. If deemed sufficiently complete to permit a substantive review, the FDA will accept the NDA or BLA for filing. The FDA can refuse to file any NDA and BLA that it deems incomplete or not properly reviewable. Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA or BLA. The FDA has established internal goals of eight months from submission for priority review of NDAs or BLAs that cover product candidates that offer major advances in treatment or provide a treatment where no adequate therapy exists, and 12 months from submission for the standard review of NDAs and BLAs. However, the FDA is not legally required to complete its review within these periods, these performance goals may change over time and the review is often extended by FDA requests for additional information or clarification.

Before approving an NDA or BLA, the FDA will typically conduct pre-approval inspections of the facilities at which the product is manufactured to determine whether the manufacturing processes and facilities are in compliance with GMP requirements and adequate to assure consistent production of the product within required specifications. The FDA may also audit the clinical trial sponsor and one or more sites at which clinical trials have been conducted to determine compliance with GCPs and data integrity. Additionally, the FDA may refer any NDA or BLA, including applications for novel product candidates which present difficult questions of safety or efficacy, to an advisory committee. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendation of an advisory committee, but it considers such recommendations when making final decisions on approval. The FDA likely will re-analyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the review process.

Before receiving FDA approval to market a potential product, we or our collaborators must demonstrate through adequate and well-controlled clinical trials that the potential product is safe and effective in the patient population that will be treated. In addition, under the Pediatric Research Equity Act (“PREA”), an NDA or BLA or supplement thereto must contain data to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. The FDA may grant deferrals for submission of pediatric data or full or partial waivers of the requirement to provide data from pediatric studies.

After the FDA evaluates an NDA or BLA, it will issue an approval letter or a Complete Response Letter. An approval letter authorizes commercial marketing of the drug or biologic with specific prescribing information for specific indications. A Complete Response Letter indicates that the review cycle of the application is complete and the application will not be approved in its present form. A Complete Response Letter usually describes all of the specific deficiencies in the NDA or BLA identified by the FDA. The Complete Response Letter may require additional clinical data and/or other significant and time-consuming requirements related to clinical trials, preclinical studies or manufacturing. If a Complete Response Letter is issued, the applicant has one year to either resubmit the NDA or BLA, addressing all of the deficiencies identified in the letter, or withdraw the application. Even if such data and information are submitted, the FDA may decide that the NDA or BLA does not satisfy the criteria for approval. Data obtained from clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data. In addition, delays or rejections may be encountered based upon changes in regulatory policy, regulations or statutes governing product approval during the period of product development and regulatory agency review.

45If regulatory approval of a potential product is granted, this approval will be limited to those disease states and conditions for which the product is approved. Marketing or promoting a drug for an unapproved indication is generally prohibited. Furthermore, FDA approval may require that contraindications, warnings, or precautions be included in the product labeling and entail ongoing requirements for risk management, including post-marketing, or Phase 4, studies, testing and surveillance programs, distribution restrictions, and other post-marketing requirements and commitments. Following approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval and may require the development of additional data or preclinical studies and clinical trials.

If regulatory approval of a potential product is granted, this approval will be limited to those disease states and conditions for which the product is approved. Marketing or promoting a drug for an unapproved indication is generally prohibited. Furthermore, FDA approval may require that contraindications, warnings, or precautions be included in the product labeling and entail ongoing requirements for risk management, including post-marketing, or Phase 4, studies, testing and surveillance programs, and distribution restrictions. Following approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval and may require the development of additional data or preclinical studies and clinical trials.

Any drug is likely to produce some toxicities or undesirable side effects in animals and in humans when administered at sufficiently high doses and/or for sufficiently long periods of time. Unacceptable toxicities or side effects may occur at any dose level at any time in the course of studies in animals designed to identify unacceptable effects of a product candidate, known as toxicological studies, or during clinical trials of our potential products. The appearance of any unacceptable toxicity or side effect could cause us or regulatory authorities to interrupt, limit, delay or abort the development of any of our product candidates. Further, such unacceptable toxicity or side effects could ultimately prevent a potential product’s approval by the FDA or foreign regulatory authorities for any or all targeted indications or limit any labeling claims and market acceptance, even if the product is approved.

In addition, as a condition of approval, the FDA may require an applicant to develop a REMS. A REMS uses risk minimization strategies beyond the professional labeling to ensure that the benefits of the product outweigh the potential risks. To determine whether a REMS is needed, the FDA will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of treatment, seriousness of known or potential adverse events, and whether the product is a new molecular entity. REMS can include medication guides, physician communication plans for healthcare professionals, and elements to assure safe use (“ETASU”). ETASU may include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries. The FDA may require a REMS before approval or post-approval if it becomes aware of a serious risk associated with use of the product. The requirement for a REMS can materially affect the potential market and profitability of a product.

~~Any~~In ~~trade~~the ~~name~~European ~~that~~Union, wethe ~~intend~~assessment toof ~~use~~an MAA for a ~~potential~~new medicinal product ~~must~~takes beup ~~approved~~to by210 ~~the~~‘active ~~FDA~~days’, ~~irrespective~~discounting ofthe ~~whether~~procedural clock-stop weperiods ~~have~~during ~~secured~~the aprocedure ~~formal trademark~~for ~~registration~~the ~~from~~applicant to address the ~~United~~list ~~States~~of ~~Patent~~questions ~~and~~raised ~~Trademark~~by ~~Office.~~the ~~The~~EMA’s ~~FDA~~advisory ~~conducts~~committees. When aan ~~rigorous~~MAA ~~review~~is ofsubmitted, ~~proposed~~the ~~product~~rapporteur ~~names~~ and ~~may~~co-rapporteur ~~reject~~appointed aby ~~product~~the ~~name~~EMA’s ifCommittee itfor ~~believes~~Medicinal ~~that~~Products for Human Use (the ~~name~~“CHMP”) ~~inappropriately~~lead ~~implies~~the ~~medical~~assessment ~~claims~~on orthe ifevidence itsubmitted ~~poses~~by the ~~potential~~applicant for ~~confusion with~~the ~~other~~CHMP ~~product~~to ~~names.~~determine ~~The~~the ~~FDA~~safety, ~~will~~quality and ~~not~~efficacy ~~approve~~of athe ~~trade~~medicinal ~~name~~product. ~~until~~The ~~the~~CHMP ~~NDA~~may orrecommend ~~BLA~~an ~~for~~inspection ato ~~product~~be iscarried ~~approved.~~out Ifby ~~the~~a ~~FDA~~NCA ~~determines that~~of the ~~trade~~European ~~names~~Union ofmember ~~other~~state to ~~products~~verify ~~that~~the ~~are~~state ~~approved~~of ~~prior~~compliance toof the ~~approval~~manufacturing offacility ~~our~~and ~~potential~~the ~~products~~clinical ~~may~~trial ~~present~~conduct. In parallel, a ~~risk~~rapporteur ofand ~~confusion~~co-rapporteur ~~with~~of ~~our~~the ~~proposed~~EMA’s ~~trade~~Pharmacovigilance ~~name,~~Risk Assessment Committee (the ~~FDA~~“PRAC”) ~~may~~are ~~elect~~appointed to ~~not~~lead ~~approve~~the ~~our~~assessment ~~proposed~~of ~~trade~~all ~~name.~~aspects of Ifthe ~~our~~applicant’s ~~trade~~proposed ~~name~~risk ismanagement ~~rejected,~~plan ~~we will lose~~ (the ~~benefit~~ of“RMP”) ~~any~~which ~~brand~~describes ~~equity~~a ~~that~~set ~~may~~of ~~already~~pharmacovigilance ~~have~~activities and ~~been~~interventions ~~developed~~designed ~~for~~to ~~this~~identify, ~~trade name~~characterize, asprevent ~~well~~or asminimize ~~the~~risk ~~benefit~~relating ofto ~~our~~the ~~existing~~medicinal ~~trademark applications~~product ~~for~~under ~~this trade name~~review.

We and our collaborators and contract manufacturers also are required to comply with the applicable FDA GMP regulations. GMP regulations include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation. Manufacturing facilities are subject to inspection by the FDA. These facilities must be approved before we can use them in commercial manufacturing of our potential products and must maintain ongoing compliance for commercial product manufacture. Manufacturers and other entities involved in the manufacture and distribution of approved drugs or biologics are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with GMPs and other laws. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain GMP compliance. Future inspections by the FDA and other regulatory agencies may identify compliance issues at the facilities of our contract manufacturers that may disrupt production or distribution or require substantial resources to correct. In addition, the discovery of conditions that violate these rules, including failure to conform to GMPs, could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions on a product, manufacturer or holder of an approved NDA or BLA, including voluntary recall and regulatory sanctions.44

46By day 210, the CHMP adopts an opinion on the MAA as to whether the medicinal product should be granted a MA. Within 15 days of receipt of the CHMP’s opinion, the applicant can request re-examination of the CHMP’s opinion and detailed grounds should be submitted within 60 days. The re-examination is led by new rapporteurs and must be completed within 60 days from the date of receipt of the detailed grounds for re-examination for the CHMP’s final opinion to be adopted.

IfIn arelation ~~product~~to isthe ~~approved~~United Kingdom, wehigh ~~must~~quality ~~also~~MAAs ~~comply~~can ~~with~~be ~~post~~submitted for an expedited 150-~~marketing~~day ~~requirements,~~assessment ~~including,~~to ~~but~~be ~~not~~initiated. ~~limited~~At least 90 days prior to the intended MAA submission date, ~~compliance~~applicants ~~with~~should ~~advertising and~~request ~~promotion~~a ~~requirements~~pre-submission meeting from the MHRA. At this meeting, ~~which~~the ~~include~~applicant will ~~restrictions~~provide ona ~~promoting~~short ~~products~~summary ~~for~~of ~~unapproved~~the ~~uses~~dossier orand, ~~patient~~if ~~populations~~necessary, ~~(known~~request input on specific issues, such as ~~“off-label~~consideration for an orphan ~~use”)~~MA, ~~monitoring~~conditional ~~and~~MA ~~record-keeping~~or ~~activities,~~MA ~~reporting~~under ofexceptional ~~adverse~~circumstances. ~~events~~When ~~and~~the ~~other~~MAA ~~periodic~~is ~~reports~~submitted to the MHRA, ~~product~~the ~~sampling~~clock will start when the application ~~and~~is ~~distribution~~validated ~~restrictions,~~for ~~and~~completeness ~~limitations~~of ondossier ~~industry~~for ~~sponsored~~the ~~scientific~~regulatory ~~and~~review ~~educational~~to ~~activities~~commence. IfThe ~~there~~assessment ~~are~~process ~~any~~involves ~~modifications~~two phases which are toseparated ~~the~~by ~~product,~~a ~~including~~‘clock-off’. ~~changes~~At inDay ~~indications,~~80 ~~labeling~~constituting orthe ~~manufacturing~~Phase ~~processes~~1 orof ~~facilities~~the assessment procedure, wematters ~~may~~requiring clarification will be ~~required~~raised towith ~~submit~~the ~~and~~applicant as a letter requesting further information (“RFI”). Applicants must address these matters ~~obtain~~within ~~FDA~~60 ~~approval~~days. Phase 2 of athe ~~new~~MAA ~~NDA~~process orbegins ~~BLA~~as orsoon anas ~~NDA~~the orMHRA ~~BLA~~receives ~~supplement~~the applicant’s responses to the RFIs. By day 150, the ~~which~~MHRA ~~may~~will ~~require~~provide usa decision on approvability of the product. If the MHRA proposes to ~~develop~~refuse ~~additional~~the ~~data~~grant orof ~~conduct~~the ~~additional~~MA, the applicant can ~~pre-clinical~~request ~~studies~~a ~~and~~review ~~clinical~~of ~~trials~~the decision.

Any trade name that we intend to use for a potential product must be approved by the FDA, EMA and/or MHRA (as applicable) irrespective of whether we have secured a formal trademark registration from the United States Patent and Trademark Office, or equivalent foreign authorities. The FDA, EMA and MHRA conduct rigorous reviews of proposed product names, and they may reject a product name if they believe, among other things, that the name inappropriately implies medical claims or if it poses the potential for confusion with other product names. The FDA will not approve a trade name until the NDA or BLA for a product is approved. If the FDA determines that the trade names of other products that are approved prior to the approval of our potential products may present a risk of confusion with our proposed trade name, the FDA may elect to not approve our proposed trade name. If our trade name is rejected, we will lose the benefit of any brand equity that may already have been developed for this trade name, as well as the benefit of our existing trademark applications for this trade name.

We and our collaborators and contract manufacturers also are required to comply with the applicable GMP regulations. GMP regulations include requirements relating to quality control and quality assurance as well as the corresponding maintenance of records and documentation. Manufacturing facilities are subject to inspection by the FDA, EMA, NCAs and MHRA (as applicable). These facilities must be approved before we can use them in commercial manufacturing of our potential products and must maintain ongoing compliance for commercial product manufacture. Manufacturers and other entities involved in the manufacture and distribution of approved drugs or biologics are required to register their establishments with the FDA and certain state agencies and could be subject to unannounced inspections by the FDA and certain state agencies for compliance with GMPs and other laws, including the equivalent requirements applicable in Europe. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain GMP compliance. Future inspections by the FDA and other regulatory agencies may identify compliance issues at the facilities of our contract manufacturers that may disrupt production or distribution or require substantial resources to correct. In addition, the discovery of conditions that violate these rules, including failure to conform to GMPs, could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions on a product, manufacturer or holder of an approved NDA, BLA or MA, including voluntary recall and regulatory sanctions.

If a product is approved, we must also comply with post-marketing requirements, including, but not limited to, compliance with advertising and promotion requirements, which include restrictions on promoting products for unapproved uses or patient populations (known as “off-label use”), monitoring and record-keeping activities, reporting of adverse events and other periodic reports, product sampling and distribution restrictions, and limitations on industry sponsored scientific and educational activities. If there are any modifications to the product, including changes in indications, labeling or manufacturing processes or facilities, we may be required to submit and obtain FDA, EMA and/or MHRA approval (as applicable) of a new NDA, BLA or MA, or an NDA, BLA or MA supplement/variation, which may require us to develop additional data or conduct additional pre-clinical studies and clinical trials.

Although physicians may prescribe legally available products for off-label uses, manufacturers may not market or promote such uses. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to adverse publicity as well as significant liability. The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has also requested that companies enter into consent decrees or permanent injunctions under which specified promotional conduct is changed or curtailed.

The FDA, EMA and MHRA (as applicable) may withdraw approval of an NDA, BLA or ~~BLA~~MA if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information; imposition of post-market or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things: restrictions on the marketing or manufacturing of the product; complete withdrawal of the product from the market or product recalls; issuance of safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product; fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials; refusal of the FDA to approve pending NDAs or BLAs or supplements to approved NDAs or BLAs, or suspension or revocation of product approvals; product seizure or detention, or refusal to permit the import or export of products; injunctions or the imposition of civil or criminal penalties; and consent decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs; or mandated modification of promotional materials and labeling and the issuance of corrective information.

InOutside ~~addition~~of tothe ~~FDA~~United ~~requirements~~States, weour ~~must~~ability ~~also~~to ~~comply~~market ~~with~~a ~~federal~~product ~~and~~is ~~state~~contingent ~~anti-fraud~~upon ~~and~~receiving ~~abuse~~a ~~laws,~~marketing ~~including~~authorization ~~anti-kickback~~from ~~and~~the ~~false~~appropriate regulatory ~~claims~~authorities. ~~laws~~The requirements governing the conduct of clinical trials, ~~healthcare~~marketing ~~information~~authorization, ~~privacy~~pricing and ~~security~~reimbursement ~~laws~~vary widely from country to country. At present, ~~post-~~foreign marketing ~~safety~~authorizations ~~surveillance~~are applied for at a national level. If the regulatory authority is satisfied that adequate evidence of safety, quality and ~~disclosure~~efficacy ofhas ~~payments~~been orpresented, ~~other~~marketing authorization will be granted. This ~~transfers~~foreign regulatory development and approval process involves all of ~~value~~the torisks ~~healthcare~~associated ~~professionals~~with ~~and~~achieving ~~entities~~FDA marketing approval in the United States as discussed above. In addition, weforeign ~~are~~regulations ~~subject~~may toinclude ~~other~~applicable ~~federal~~post-marketing ~~and~~requirements, ~~state regulation~~ including, safety ~~for~~surveillance, ~~example~~anti-fraud and abuse laws, ~~the~~and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals and entities.

If we elect to distribute our 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.

Outside of the United States, our ability to market a product is contingent upon receiving a marketing authorization from the appropriate regulatory authorities, including the EMA. The requirements governing the conduct of clinical trials, marketing authorization, pricing and reimbursement vary widely from country to country. At present, foreign marketing authorizations are applied for at a national level, although within the European Community, centralized registration procedures are available to companies wishing to market a product in more than one European Community member state. If the regulatory authority is satisfied that adequate evidence of safety, quality and efficacy has been presented, marketing authorization will be granted. This foreign regulatory development and approval process involves all of the risks associated with achieving FDA marketing approval in the United States as discussed above. In addition, foreign regulations may include applicable post-marketing requirements, including safety surveillance, anti-fraud and abuse laws, and implementation of corporate compliance programs and reporting of payments or other transfers of value to healthcare professionals and entities.

Expedited development and review programs

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

The FDA has a fast track program that is intended to expedite or facilitate the process for reviewing new drugs and biologics that meet certain criteria. Specifically, new drugs and biologics are eligible for fast track designation if they are intended to treat a serious or life-threatening condition and preclinical or clinical data demonstrate the potential to address unmet medical needs for the condition. Fast track designation applies to both the product and the specific indication for which it is being studied. Fast track designation provides opportunities for more frequent interactions with the FDA review team to expedite development and review of the product. The sponsor of a drug or biologic can request the FDA to designate the product for fast track status any time before receiving NDA or BLA approval. Fast track designation may be withdrawn by the sponsor or rescinded by the FDA if the designation is no longer supported by data emerging from the clinical trial process.

Additionally, a drug or biologic may be eligible for designation as a breakthrough therapy if the product is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing currently approved therapies on one or more clinically significant endpoints. The benefits of breakthrough therapy designation include the same benefits as fast track designation, plus intensive guidance from the FDA to ensure an efficient drug development program. Drugs or biologics designated as breakthrough therapies are also eligible for accelerated approval of their respective marketing applications.

A product may also be eligible for accelerated approval if it treats a serious or life-threatening condition and generally provides a meaningful advantage over available therapies. In addition, it must demonstrate an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality (“IMM”) that is reasonably likely to predict an effect on IMM or other clinical benefit. As a condition of approval, the FDA may require that a sponsor of a drug or biologic receiving accelerated approval perform adequate and well-controlled post-marketing clinical trials. If the FDA concludes that a drug or biologic shown to be effective can be safely used only if distribution or use is restricted, it will require such post-marketing restrictions as it deems necessary to assure safe use of the product. If the FDA determines that the conditions of approval are not being met, such as the required post-marketing confirmatory trial does not demonstrate a clinical benefit, the FDA can withdraw its accelerated approval for such drug or biologic. In addition, unless otherwise informed by the FDA, the FDA currently requires, as a condition for accelerated approval, that all advertising and promotional materials that are intended for dissemination or publication be submitted to the agency in advance for review.

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

Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. Furthermore, fast track designation, priority review, accelerated approval and breakthrough therapy designation, do not change the standards for approval and may not ultimately expedite the development or approval process.

48In the European Union, developers of medicinal products seeking to address an unmet medical can seek obtain enhanced support from the EMA via the PRIME scheme. The PRIME scheme, which is a voluntary operational framework for enhanced interaction and early dialogue between the EMA and developers of promising medicines, to optimize development plans and speed up evaluation so that these medicines can reach patients earlier.

In the United Kingdom, developers of medicinal products which either target a life-threatening or seriously debilitating condition, or which represent a significant patient or public health need, can benefit from ILAP. ILAP consists of designation of an Innovation Passport, creation of a Target Development Profile (“TDP”) and provides applicants with access to a toolkit to support all stages of the design, development and approvals process. Medicines falling within the scope of ILAP include new chemical entities, biological medicines, new indications and repurposed medicines. The first step in the ILAP process is to obtain an Innovation Passport, which will only be granted in respect of medicinal products which: (1) are intended to treat a qualifying condition, patient or public health area, (2) fulfill one or more of a specific area (e.g., advanced therapy medicinal product, orphan products, etc.), and (3) have the potential to offer benefits to patients. Following designation of an Innovation Passport, a product-specific team of experts will develop a TDP based on the medicinal product’s characteristics. The TDP defines key regulatory and developmental features, identifies potential pitfalls, and creates a road map for delivering early patient access. The TDP also includes details about how the applicant can work with other United Kingdom stakeholders for coordinated and efficient evidence generation and evaluation and address commercial and managed access considerations.

Orphan drug designation and exclusivity

Orphan drug designation in the United States is designed to encourage sponsors to develop products intended for the treatment of rare diseases or conditions. In the United States, a rare disease or condition is statutorily defined as a condition that affects fewer than 200,000 individuals in the United States or that affects more than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making the product available for the disease or condition will be recovered from sales of the product in the United States.

Orphan drug designation qualifies a company for certain tax credits. In addition, if a drug candidate that has orphan drug designation subsequently receives the first FDA approval for that drug for the disease for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same indication for seven years following product approval unless the subsequent product candidate is demonstrated to be clinically superior. Absent a showing of clinical superiority, FDA cannot approve the same product made by another manufacturer for the same indication during the market exclusivity period unless it has the consent of the sponsor or the sponsor is unable to provide sufficient quantities.47

Orphan drug designation qualifies a company for certain tax credits. In addition, if a drug candidate that has orphan drug designation subsequently receives the first FDA approval for that drug for the disease for which it has such designation, the product is entitled to orphan drug exclusivity, which means that the FDA may not approve any other applications to market the same drug for the same indication for seven years following product approval unless the subsequent product candidate is demonstrated to be clinically superior. Absent a showing of clinical superiority, the FDA cannot approve the same product made by another manufacturer for the same indication during the market exclusivity period unless it has the consent of the sponsor or the sponsor is unable to provide sufficient quantities.

A sponsor may request orphan drug designation of a previously unapproved product or new orphan indication for an already marketed product. In addition, a sponsor of a product that is otherwise the same product as an already approved orphan drug may seek and obtain orphan drug designation for the subsequent product for the same rare disease or condition if it can present a plausible hypothesis that its product may be clinically superior to the first drug. More than one sponsor may receive orphan drug designation for the same product for the same rare disease or condition, but each sponsor seeking orphan drug designation must file a complete request for designation. To qualify for orphan exclusivity, however, the drug must be clinically superior to the previously approved product that is the same drug for the same condition. If a product designated as an orphan drug ultimately receives marketing approval for an indication broader than what was designated in its orphan drug application, it may not be entitled to exclusivity.

In the European Union, orphan designations are assessed by the EMA’s Committee for Orphan Medicinal Products (“COMP”) for binding decisions to be issued by the European Commission to promote the development of medicinal products that are intended for the diagnosis, prevention or treatment of life-threatening or chronically debilitating conditions which either affect not more than five in 10,000 persons in the European Union, or where it is unlikely that the marketing of the medicinal product in the European Union would generate sufficient return to justify the necessary investment in its development. In each case, there can be no satisfactory method of diagnosis, prevention or treatment of the condition already authorized (or, if such a method exists, the product would be a significant benefit to those affected by the condition).

If the COMP grants an orphan designation, the developer will be entitled to financial incentives such as reduction of fees or fee waivers. If orphan status is maintained at the grant of MA, the medicinal product will benefit from ten years of market exclusivity. This period may be reduced to six years if, at the end of the fifth year, it is established that the orphan drug designation criteria are no longer met, including where it is shown that the product is sufficiently profitable not to justify maintenance of market exclusivity. During the period of market exclusivity, MAs can only be granted to “similar medicinal products” for the same therapeutic indication if it can be established that: (i) the new medicinal product, although similar to the authorized product, is safer, more effective or otherwise clinically superior; (ii) the MA holder for the authorized product consents to a second orphan medicinal product application; or (iii) the MA holder for the authorized product cannot supply enough orphan medicinal product. A “similar medicinal product” is defined as a medicinal product containing a similar active substance or substances as contained in an authorized orphan medicinal product, and which is intended for the same therapeutic indication.

An equivalent regime is in place in the United Kingdom. Under the United Kingdom’s regime, there is no pre-MA orphan designation and instead a decision is made at the point of the MA grant.

Rare pediatric disease priority review voucher program

Under the Rare Pediatric Disease Priority Review Voucher program, the FDA may award a priority review voucher to the sponsor of an approved marketing application for a product that treats or prevents a rare pediatric disease. The voucher entitles the sponsor to priority review of one subsequent marketing application.

A voucher may be awarded only for an approved rare pediatric disease product application. A rare pediatric disease product application is an NDA or BLA for a product that treats or prevents a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years; in general, the disease must affect fewer than 200,000 such individuals in the U.S.; the NDA or BLA must be deemed eligible for priority review; the NDA or BLA must not seek approval for a different adult indication (i.e., for a different disease/condition); the product must not contain an active ingredient that has been previously approved by the FDA; and the NDA or BLA must rely on clinical data derived from studies examining a pediatric population such that the approved product can be adequately labeled for the pediatric population. Before NDA or BLA approval, the FDA may designate a product in development as a product for a rare pediatric disease, but such designation is not required to receive a voucher.

To receive a rare pediatric disease priority review voucher, a sponsor must notify FDA, upon submission of the NDA or BLA, of its intent to request a voucher. If FDA determines that the NDA or BLA is a rare pediatric disease product application, and if the NDA or BLA is approved, FDA will award the sponsor of the NDA or BLA a voucher upon approval of the NDA or BLA. FDA may revoke a rare pediatric disease priority review voucher if the product for which it was awarded is not marketed in the U.S. within 365 days of the product’s approval.48

~~The~~To ~~voucher,~~receive ~~which~~a israre ~~transferable~~pediatric todisease ~~another~~priority ~~sponsor~~review voucher, ~~may~~a besponsor ~~submitted~~must ~~with~~notify athe ~~subsequent~~FDA, upon submission of the NDA or BLA, ~~and~~of ~~entitles~~its intent ~~the~~to ~~holder~~request toa ~~priority review~~voucher. ofIf the ~~accompanying~~FDA determines that the NDA or BLA. ~~The~~is ~~sponsor~~a ~~submitting~~rare ~~the~~pediatric ~~priority~~disease ~~review~~product ~~voucher~~application, ~~must~~and ~~notify~~if ~~FDA~~the NDA ofor ~~its~~BLA ~~intent~~is toapproved, ~~submit~~the FDA will award the ~~voucher~~ ~~with~~sponsor of the NDA or BLA ata ~~least~~voucher 90upon ~~days~~approval ~~prior to submission~~ of the NDA or BLA. ~~and~~The ~~must~~FDA ~~pay~~may revoke a ~~priority~~rare ~~review~~pediatric ~~user~~disease ~~fee~~priority inreview ~~addition to~~voucher ~~any~~if ~~other~~the ~~required~~product ~~user~~for ~~fee.~~which ~~FDA~~it ~~must~~was ~~take~~awarded ~~action~~is onnot anmarketed ~~NDA~~in orthe ~~BLA~~U.S. ~~under priority review~~ within 365 ~~six~~days ~~months~~ of ~~receipt of~~ the ~~NDA~~product’s ~~or BLA~~approval.

The voucher, which is transferable to another sponsor, may be submitted with a subsequent NDA or BLA and entitles the holder to priority review of the accompanying NDA or BLA. The sponsor submitting the priority review voucher must notify the FDA of its intent to submit the voucher with the NDA or BLA at least 90 days prior to submission of the NDA or BLA and must pay a priority review user fee in addition to any other required user fee. The FDA must take action on an NDA or BLA under priority review within six months of receipt of the NDA or BLA.

The Rare Pediatric Disease Priority Review Voucher program was reauthorized in the Creating Hope Reauthorization Act in December 2020, allowing a product that is designated as a product for a rare pediatric disease prior to October 1, 2020 to be eligible to receive a rare pediatric disease priority review voucher upon approval of a qualifying NDA or BLA prior to October 1, 2026.

Pediatric Exclusivity

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

In both the European Union and United Kingdom, all MAAs for new medicines must include the results of studies described in an agreed pediatric investigation plan (“PIP”), unless a deferral or a waiver applies. Irrespective of whether the results are successful, if the PIP is satisfactorily performed with the results submitted, the applicant is entitled to receive a six-month extension to their supplementary protection certificate, as an extension of the exclusivity for a basic patent. In respect of orphan medicinal products, the orphan market exclusivity period of 10 years is extended cumulatively to 12 years if the PIP requirement is satisfied.

United States Patent Term Restoration and Extension and Marketing Exclusivity

In the United States, a patent claiming a new drug product, its method of use or its method of manufacture may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent extension of up to five years for patent term lost during product development and FDA regulatory review. Assuming grant of the patent for which the extension is sought, the restoration period for a patent covering a product is typically one-half the time between the effective date of the IND and the submission date of the NDA, plus the time between the submission date of the NDA and the ultimate approval date, except that the review period is reduced by any time during which the applicant failed to exercise due diligence. Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date in the United States. Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent for which extension is sought. A patent that covers multiple products for which approval is sought can only be extended in connection with one of the approvals. The USPTO reviews and approves the application for any patent term extension in consultation with the FDA.

Marketing exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (“ANDA”), or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement. The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original active agent. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Marketing exclusivity provisions under the FDCA also can delay the submission or the approval of certain applications. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (ANDA), or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right of reference to all the data required for approval. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement. The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs for drugs containing the original active agent. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Biosimilars And Exclusivity

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or, collectively, the ACA, which was signed into law in March 2010, included a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”). The BPCIA established a regulatory scheme authorizing the FDA to approve biosimilars and interchangeable biosimilars. A biosimilar is a biological product that is highly similar to an existing FDA-licensed “reference product.” The FDA has issued multiple guidance documents outlining an approach to review and approval of biosimilars. Under the BPCIA, a manufacturer may submit an application for licensure of a biologic product that is “biosimilar to” or “interchangeable with” a previously approved biological product or “reference product.” In order for the FDA to approve a biosimilar product, it must find that there are no clinically meaningful differences between the reference product and proposed biosimilar product in terms of safety, purity and potency. For the FDA to approve a biosimilar product as interchangeable with a reference product, the agency must find that the biosimilar product can be expected to produce the same clinical results as the reference product, and (for products administered multiple times) that the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date of approval of the reference product. The FDA may not approve a biosimilar product until 12 years from the date on which the reference product was approved. Even if a product is considered to be a reference product eligible for exclusivity, another company could market a competing version of that product if the FDA approves a full BLA for such product containing the sponsor’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of their product. The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products. At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law. Since the passage of the BPCIA, many states have passed laws or amendments to laws, including laws governing pharmacy practices, which are state regulated, to regulate the use of biosimilars.

Regulation of companion diagnostic tests

Although we do not believe that a companion diagnostic test will be required for the safe and effective use of our product candidates, the FDA may disagree and require use of a companion diagnostic to identify appropriate patient populations for our products. Under the FDCA, in vitro diagnostics, including companion diagnostics, are regulated as medical devices. In the United States, the FDCA and its implementing regulations, and other federal and state statutes and regulations govern, among other things, medical device design and development, preclinical and clinical testing, premarket clearance or approval, registration and listing, manufacturing, labeling, storage, advertising and promotion, sales and distribution, export and import, and post-market surveillance. Unless an exemption applies, diagnostic tests require marketing clearance or approval from the FDA prior to commercial distribution. In August 2014, the FDA issued final guidance clarifying the requirements that will apply to approval of therapeutic products and in vitro companion diagnostics. According to the guidance, for novel drugs, a companion diagnostic device and its corresponding therapeutic should be approved or cleared contemporaneously by the FDA for the use indicated in the therapeutic product’s labeling. Approval or clearance of the companion diagnostic device will ensure that the device has been adequately evaluated and has adequate performance characteristics in the intended population.

Reimbursement

~~Potential~~Significant ~~sales~~uncertainty ofexists ~~any~~regarding ~~of our product candidates, if approved, will depend, at least in part, on~~ the ~~extent~~coverage ~~to which such products will be covered by third-party payors, such as government health care programs, commercial insurance~~ and ~~managed~~reimbursement ~~healthcare~~status ~~organizations.~~of ~~These~~products ~~third-party payors are increasingly managing access and using restrictive measures to contain costs. If a third-party payor decides to provide coverage for an~~ approved ~~drug~~by ~~product,~~the ~~patient~~FDA ~~access~~ and ~~reimbursement is not certain. Further, one payor’s determination to provide coverage for a drug product does not assure that~~ other ~~payors~~government ~~will also provide coverage for the drug product~~authorities. ~~Decreases in third-party reimbursement~~ orSales aof ~~decision~~TZIELD byand apotential ~~third-party~~sales ~~payor~~of toany ~~not~~of ~~cover~~our a product ~~candidate~~candidates, if approved, ~~could~~will ~~reduce~~depend, ~~utilization~~at ofleast ~~our~~in ~~products~~part, ~~and have a material adverse effect~~ on ~~our~~the ~~sales,~~extent ~~results~~to ofwhich such ~~operations~~products ~~and~~will ~~financial~~be ~~condition.~~covered ~~Adequate~~by 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~~payers.

Within the United States, third party payors include government health care programs such as Medicare and Medicaid and private health insurance. These third-party payers are increasingly challenging the price and examining the cost-effectiveness of new products and services in addition to their safety and efficacy. To obtain or maintain coverage and reimbursement for TZIELD or any other approved drug product, we may need to collect real world evidence and conduct pharmacoeconomic studies to demonstrate the medical necessity and cost-effectiveness of our product. These studies will be in addition to the studies required to obtain or maintain regulatory approvals. If third-party payers do not consider a product to be cost-effective compared to other available therapies, they may not cover the product or, if they do, the level of payment may not be sufficient to allow sale of a product at a profit.

Third-party payers are also increasingly managing patient access to drug products and using restrictive measures to contain costs. If a third-party payer decides to provide coverage for an approved drug product, patient access and reimbursement is not certain. Further, one payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage for the drug product. Decreases in third-party reimbursement or a decision by a third-party payer to not cover TZIELD or our product candidates, if approved, could reduce utilization of our products, and have a material adverse effect on our sales, results of operations and financial condition. We may need to provide discounts to purchasers to encourage purchasing of our products and rebates to third party payors to increase the possibility of favorable coverage and adequate cost sharing thresholds for patients and may need to provide additional concessions or enter into value-based arrangements that link payment to the efficacy of TZIELD. 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.

We are required to provide discounts or rebates on TZIELD under government healthcare programs or to certain government and private purchasers in order to obtain coverage under federal health care programs such as Medicaid. Participation in such programs may require us to track and report certain drug prices. We may be subject to fines and other penalties if we fail to report such prices accurately.

In addition, 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 country. For example, the European Union provides options for its member states to restrict the range of medicinal products for human use. A member state may approve a specific price for the medicinal product, or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market. There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the European Union do not follow price structures of the U.S. and generally tend to be significantly lower.

In addition, the United States government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our future revenues and results of operations.

Within the United States, if we obtain appropriate marketing approval in the future to market for any of our current product candidates, we may be required to provide discounts or rebates under government healthcare programs or to certain government and private purchasers in order to obtain coverage under federal health care programs such as Medicaid. Participation in such programs may require us to track and report certain drug prices. We may be subject to fines and other penalties if we fail to report such prices accurately.

Healthcare Laws and Regulations

Sales of TZIELD and potential sales of our product candidates, if approved, ~~or any other future product candidate~~ will be subject to healthcare regulation and enforcement by the federal government and the states and foreign governments in which we might conduct our business. In the United States, our business operations and any current or future arrangements with healthcare professionals ~~(including principal investigators)~~, third-party ~~payors~~payers, health care providers, patients and other customers may be subject to various federal and state fraud and abuse and other healthcare laws and regulations that may affect our current or future manufacturing, sales, marketing, scientific, educational or other business activities. The healthcare laws and regulations that may affect our ability to operate include the following:

●

The federal anti-kickback statute makes it illegal for any person or entity to knowingly and willfully, directly or indirectly, solicit, receive, offer, or pay any remuneration that is in exchange for or to induce the referral of business, including the purchase, order, lease of any good, facility, item or service for which payment may be made under a federal healthcare program, such as Medicare or Medicaid. The term “remuneration” has been broadly interpreted to include anything of value. A person or entity need not have actual knowledge of the federal anti-kickback statute or specific intent to violate it in order to have committed a violation.

● Federal false claims and false statement laws, including the federal civil False Claims Act (“FCA”), prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. Actions under the FCA may be brought by the Attorney General or by private individuals in the name of the federal government. The federal civil monetary penalties laws impose civil fines for, among other things, the offering or transfer or remuneration to a Medicare or state healthcare program beneficiary, if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies.

● The United States federal Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information on certain types of entities, which include many healthcare providers and health plans with which we interact.

	●	Federal false claims and false statement laws, including the federal civil False Claims Act (“FCA”), prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent. Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payors if they are deemed to “cause” the submission of false or fraudulent claims. Actions under the FCA may be brought by the Attorney General or by private individuals in the name of the federal government.

	●	The federal civil monetary penalties laws impose civil fines for, among other things, the offering or transfer or remuneration to a Medicare or state healthcare program beneficiary, if the person knows or should know it is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of services reimbursable by Medicare or a state health care program, unless an exception applies.

●

The United States federal Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), which prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters and which also imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information on certain types of entities, which include many healthcare providers and health plans with which we interact.

	●	The Federal Food, Drug, and Cosmetic Act, which among other things, strictly regulates drug product and medical device marketing, prohibits manufacturers from marketing such products prior to approval or for unapproved indications and regulates the distribution of samples.

	●	Federal laws, including the Medicaid Drug Rebate Program, that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs.

●

The so-called “federal sunshine” law, which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with physicians, teaching hospitals, and additional categories of healthcare practitioners to the federal government for re-disclosure to the public.

Also, many states have similar laws and regulations, such as anti-kickback and false claims laws that may be broader in scope and may apply to claims reimbursed by private payors as well as government programs or regardless of reimbursement. Additionally, we may be subject to state laws that require pharmaceutical companies to comply with the federal government’s and/or pharmaceutical industry’s voluntary compliance guidelines, impose specific restrictions on interactions between pharmaceutical companies and healthcare providers or require pharmaceutical companies to report information related to payments and other transfers of value to physicians and other healthcare providers or to report pricing or marketing expenditures, as well as state laws governing the privacy and security of health information, many of which differ from each other in significant ways and often are not preempted by HIPAA. Many of these laws and regulations also contain ambiguous requirements or require administrative guidance for implementation.

Our current or future activities may also be subject to state and federal and state consumer protection and unfair competition laws. ~~and~~We ~~federal~~must ~~and~~comply with state, ~~licensing~~domestic ~~requirements~~ and ~~regulations~~international laws that ~~apply~~require the registration of manufacturers and wholesale distributors of pharmaceutical products in a state, including, in relation to the ~~manufacture,~~United ~~sale~~States, ~~warehousing~~in certain states, manufacturers and ~~distribution~~distributors who ship products into the state even if such manufacturers or distributors have no place of ~~pharmaceutical~~business within the state. Some states also impose requirements ~~products~~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.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. Federal and state enforcement bodies have recently increased their scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Because of the breadth of these laws, the narrowness of available statutory exceptions and safe harbors and the lack of clear guidance on the application of these laws to certain activities, it is possible that governmental authorities ~~will~~could possibly conclude that our business practices do not comply with current or future statutes, regulations or case law ~~involving~~ involving applicable fraud and abuse or other healthcare laws and regulations.

Violation of these laws can subject us to significant civil, criminal and administrative penalties, damages, fines, imprisonment, disgorgement, exclusion from government funded healthcare programs, such as Medicare and Medicaid, reputational harm, additional oversight and reporting obligations if we become subject to a corporate integrity agreement or similar settlement to resolve allegations of non-compliance with these laws and the curtailment or restructuring of our operations. If any of the physicians or other healthcare providers or entities with whom we expect to do business is found not to be in compliance with applicable laws, they may be subject to similar actions, penalties and sanctions. Ensuring business arrangements comply with applicable healthcare laws, as well as responding to possible investigations by government authorities, can be time- and resource-consuming and can divert a company’s attention from its business.

Additionally, to the extent that our product is sold in a foreign country, we may be subject to similar foreign laws, including fraud and abuse laws, laws requiring the implementation of corporate compliance programs and laws requiring the reporting of payments or other transfers of value to healthcare professionals and entities.

Segments and Geographic Information

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. We view our operations and manage our business in one operating and reporting segment.

In October 2021, we incorporated Provention Bio Limited, a wholly-owned private limited subsidiary, in the United Kingdom. We incorporated this subsidiary to facilitate the potential future submission of an MAA for teplizumab, to the MHRA.

Human Capital

Employees

As of ~~February~~March 2120, ~~2022~~2023, we had 82174 full-time employees which are located throughout the United States. While we lease office space for our principal executive offices in Red Bank, NJ, our employees work remotely. None of our employees are represented by a labor ~~union~~ union or covered by a collective bargaining agreement, and we believe our relationship with our employees is good. Additionally, we utilize independent contractors and other third parties to assist with various aspects of our drug and product development.

We provide salaries and benefits that are competitive based on compensation information from independent compensation consultants. A portion of the compensation for almost all of our employees is performance-based. Performance-based compensation takes into account both individual and Company-wide performance. In addition, a portion of performance-based compensation consists of equity incentives. The split between base salary and performance-based compensation is tailored to each employee’s job function and level. In addition, we provide nationally competitive benefits, including healthcare, a 401(k) program and a technology allowance.

We are committed to the well-being of our employees and recognize that a remote workforce especially values the ability to balance work with other aspects of their lives. As a virtual company, we embrace variable work schedules for our employees. We also allow part-time arrangements and flexible work schedules.

We provide professional development and advancement opportunities for our employees that include internal training, skills building and opportunities for internal advancement.

Diversity and Inclusion

We seek to provide a collaborative and inclusive workplace where all employees feel empowered to do their best work and contribute to our mission. We are an equal opportunity employer and strictly prohibit and do not tolerate discrimination against employees, including based on race, creed, color, religion, national origin, citizenship status, age, gender, military and veteran status and sexual orientation. We also prohibit any form of harassment or abuse in the workplace.

We are focused on maintaining a diverse and inclusive work environment. Among other factors in hiring, we consider geographic, gender, age, racial and ethnic diversity. Currently, women represent 38% of our C-suite team, and 17% of our board of directors. We expect to continue implementing initiatives to enhance our workforce diversity, advance the development of diverse talent and ensure diverse succession plans both in our employee workforce and on our board of directors.53

We are focused on maintaining a diverse and inclusive work environment. Among other factors in hiring, we consider geographic, gender, age, racial and ethnic diversity. Currently, women represent 38% of our C-suite team, and 33% of our board of directors. We expect to continue implementing initiatives to enhance our workforce diversity, advance the development of diverse talent and ensure diverse succession plans both in our employee workforce and on our board of directors.

Our Corporate Information

We are a Delaware corporation formed on October 4, 2016. Our principal executive offices are located at 55 Broad Street, 2nd Floor, Red Bank, New Jersey 07701. Our phone number is (908) 336-0360 and our web address is http://www.proventionbio.com. Information contained in or accessible through our web site is not, and should not be deemed to be, incorporated by reference in, or considered part of, this Annual Report on Form 10-K.

Available Information

We make available free of charge through our website our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act. We make these reports available through our website as soon as reasonably practicable after we electronically file such reports with, or furnish such reports to, the SEC. ~~You can review our electronically filed reports and other information that we file with the SEC on the SEC’s web site at http://www.sec.gov.~~ We also make available, free of charge on our website, the reports filed with the SEC by our executive officers, ~~directors~~ directors and 10% stockholders pursuant to Section 16 under the Exchange Act as soon as reasonably practicable after copies of those filings are provided to us by those persons. The information contained on, or that can be accessed through, our website is not a part of or incorporated by reference in this Annual Report on Form 10-K.

ITEM 1A. RISK FACTORS

Certain factors may have a material adverse effect on our business, financial condition and results of operations, and you should carefully consider them. Accordingly, in evaluating our business, we encourage you to consider the following discussion of risk factors in its entirety, in addition to other information contained in this Annual Report on Form 10-K, as well as our other public filings with the SEC. The risks and uncertainties described below are those we currently believe to be material, but they are not the only ones we face. If any of the following risks, or any other risks and uncertainties that we have not yet identified or that we currently consider not to be material, actually occur or become material risks, our business and financial condition could be materially and adversely affected.

Risks Related to ~~Our~~our ~~Business~~Pending Transaction with Sanofi

We ~~are~~may anot ~~clinical~~be ~~stage~~able ~~biopharmaceutical~~to ~~company~~complete the pending transaction with aSanofi ~~limited~~within ~~operating~~the ~~history~~time frame we anticipate, or at all, which could have an adverse effect on our business, financial results and/or operations.

WeOn ~~are~~March a12, ~~clinical-stage~~2023, ~~biopharmaceutical~~we ~~company~~entered ~~formed~~into inthe ~~October~~Merger ~~2016~~Agreement with Sanofi and ~~have~~Sanofi’s indirect wholly owned acquisition subsidiary under which Sanofi is to acquire the Company in a ~~limited~~cash ~~operating~~transaction ~~history.~~for Wean doapproximate ~~not~~total ~~lease~~equity orvalue ~~own~~of ~~any~~$2.9 billion. Pursuant to the Merger ~~laboratory~~Agreement, ~~space~~and upon the terms and wesubject ~~have~~to ~~historically~~the ~~had~~conditions thereof, Sanofi’s acquisition subsidiary will commence a ~~remote~~tender ~~work~~offer to ~~environment~~purchase ~~for~~all of our ~~employees~~issued and outstanding shares of common stock in exchange for $25.00 Weper ~~outsource~~share, ~~most~~to the seller in cash, without interest and less applicable withholding of ~~our~~taxes. ~~manufacturing~~If certain conditions are satisfied and the tender offer closes, Sanofi would acquire ~~clinical~~any ~~trial~~remaining ~~operations~~shares asof ~~well~~our ascommon ~~certain~~stock ~~other~~by ~~functions~~a merger of Sanofi’s acquisition subsidiary with and into us.

WeThe ~~have~~completion ~~acquired~~of orthe transaction is subject to the conditions set forth in~~-licensed~~ ~~four~~the ~~clinical~~Merger ~~stage~~Agreement, ~~assets~~including (1) that there be validly tendered, and anot ~~late~~properly ~~stage~~withdrawn, ~~preclinical~~prior ~~enteroviral~~to ~~vaccine~~the ~~platform.~~expiration ~~Marketing~~of ~~approval~~ the tender offer, that number of shares of our ~~product~~common ~~candidates~~stock ~~will~~that, ~~require~~together ~~extensive~~with the ~~clinical~~number ~~testing~~of ~~data~~shares toof ~~support~~our ~~safety~~common ~~and~~stock, ~~efficacy~~if ~~requirements~~any, asthen ~~well~~owned asbeneficially ~~pharmaceutical development,~~by ~~manufacturing~~Sanofi and ~~preclinical~~its ~~data~~acquisition subsidiary (together with their wholly-owned subsidiaries), ~~all~~represents at least a majority of ~~which~~the ~~are~~shares ~~needed~~of ~~for~~our ~~regulatory~~common ~~approval~~stock outstanding as of the consummation of the tender offer, ~~and~~(2) the ~~requirements~~expiration ~~may~~or beearly ~~different in~~termination ~~different~~of ~~jurisdictions~~the inapplicable ~~which~~waiting weperiod ~~intend~~(or toany ~~launch~~extension ~~our~~thereof) ~~products.~~under ~~The~~the ~~likelihood~~Hart-Scott-Rodino Antitrust Improvements Act of ~~success~~1976, (3) the accuracy of certain of our ~~business~~representations ~~plan~~and ~~must~~warranties bein ~~considered~~the Merger Agreement, (4) our incompliance ~~light~~with ofcertain covenants contained in the ~~challenges~~Merger Agreement, ~~substantial~~subject ~~expenses,~~to ~~difficulties~~qualifications, ~~complications~~(5) ~~and~~the ~~delays~~absence ~~frequently~~of ~~encountered~~a “Company Material Adverse Effect” (as defined in ~~connection~~the ~~with~~Merger ~~developing~~ Agreement), and ~~expanding~~(6) ~~early-stage~~other ~~businesses~~customary ~~and~~conditions. In addition, the ~~regulatory~~Merger ~~and~~Agreement ~~competitive~~may be ~~environment~~terminated under certain specified circumstances, including, but not limited to, a change in ~~which~~the werecommendation ~~operate.~~of ~~Biopharmaceutical~~our ~~product~~Board ~~development~~of Directors isor a ~~highly~~termination ~~speculative~~of ~~undertaking,~~the ~~involves~~Merger Agreement by us to enter into an agreement for a ~~substantial~~Superior ~~degree~~Proposal of(as ~~risk,~~defined ~~and~~in isthe Merger Agreement). As a ~~capital-intensive~~result, ~~business~~we cannot assure you that the transaction with Sanofi will be completed, or that, if completed, it will be on the terms set forth in the Merger Agreement or within the expected time frame.

~~Accordingly,~~If ~~you~~the ~~should~~transaction ~~consider~~is ~~our~~not ~~prospects~~completed inwithin ~~light~~the ofexpected ~~the~~time ~~costs,~~frame ~~uncertainties~~or at all, ~~delays~~we ~~and~~may ~~difficulties~~be ~~frequently~~subject ~~encountered~~to bya ~~companies~~number inof material risks. The price of our common stock may decline to the ~~early~~extent ~~stages~~that current market prices of ~~development,~~our ~~especially~~common ~~clinical-stage~~stock ~~biopharmaceutical~~reflect ~~companies~~a ~~such~~market asassumption ~~ours~~that the transaction will be completed. ~~Potential~~We ~~investors~~could ~~should~~be ~~carefully~~required to pay Sanofi a termination fee of $100.0 million if the Merger Agreement is terminated under ~~consider~~specific circumstances described in the ~~risks~~Merger Agreement. The failure to complete the transaction also may result in negative publicity and ~~uncertainties~~negatively ~~that~~affect aour ~~company~~relationship with aour ~~limited~~stockholders, ~~operating~~employees, ~~history~~collaborators, ~~will~~customers, ~~face.~~CROs, InCMOs, ~~particular~~other vendors, weregulators and other business partners. We may ~~not~~also be ~~able~~required to: devote significant time and resources to litigation related to any failure to complete the merger or related to any enforcement proceeding commenced against us to perform our obligations under the Merger Agreement.

● successfully implement or execute our current business plan; ● successfully start and complete clinical trials and obtain regulatory approval for the marketing of our product candidates; ● successfully contract for the manufacture of our clinical drug products and establish a commercial drug supply; ● secure market exclusivity and/or adequate intellectual property protection for our product candidates; ● attract and retain an experienced management and advisory team; ● raise sufficient funds in the capital markets to effectuate our business plan, including clinical development, regulatory approval and related milestones, and commercialization for our product candidates; ● successfully recruit and retain a fully functional launch ready commercial organization; ● successfully launch teplizumab in the United States; ● successfully execute our teplizumab launch plan for the At-Risk indication, including raising awareness and expanding screening to identify patients At-Risk of developing clinical T1D; and ● successfully establish strategic partnerships to launch teplizumab outside the United States

If we cannot successfully execute any one of the foregoing, our business may not succeed, and your investment will be adversely affected.

WeThe ~~expect~~pendency toof ~~incur~~the ~~substantial~~proposed ~~expenses~~transaction ~~and~~with ~~may~~Sanofi ~~never~~could ~~become~~adversely ~~profitable~~affect our results of operations, financial results and/or bebusiness generally, ~~able~~including our ability to ~~sustain~~retain ~~profitability~~and hire key personnel and maintain our relationships with collaborators, customers, CROs, CMOs, other vendors and other business partners.

WeOur ~~expect~~efforts to ~~incur~~complete the transaction could cause substantial ~~expenses~~disruptions ~~without~~in, ~~corresponding~~and ~~revenues~~create ~~unless~~uncertainty surrounding, our business, which may materially adversely affect our results of operation and ~~until~~our webusiness. ~~are~~Uncertainty ~~able~~as to ~~obtain~~whether ~~regulatory~~the ~~approval~~transaction ~~and~~will ~~successfully~~be completed may ~~commercialize~~affect our ~~product~~ability ~~candidates.~~to Werecruit ~~expect~~prospective toemployees ~~incur~~or ~~significant~~to ~~expense~~retain toand ~~complete~~motivate ~~our~~existing ~~clinical~~employees. ~~programs~~Employee ~~for~~retention ~~our~~may ~~product~~be ~~candidates~~particularly inchallenging while the ~~United~~transaction ~~States~~is ~~and~~pending ~~elsewhere.~~because Weemployees may ~~never~~experience beuncertainty ~~able~~about totheir ~~obtain~~roles ~~regulatory~~following ~~approval~~consummation ~~for~~ of the ~~marketing~~transaction. A substantial amount of our ~~product~~management’s ~~candidates~~and ~~in any~~employees’ ~~indication~~attention inis being directed toward the ~~United~~completion of ~~States~~the ortransaction ~~internationally~~and thus is being diverted from our day-to-day operations. ~~Even~~Uncertainty ifas weto ~~are~~our ~~able~~future could adversely affect our business and our relationship with collaborators, customers, CROs, CMOs, other vendors, regulators and other business partners. Changes to ~~commercialize~~or termination of existing business relationships could adversely affect our ~~product~~results ~~candidates~~of operations and financial condition, weas ~~may~~well as ~~not~~the market price of our common stock. The adverse effects of the pendency of the transaction could be ~~able~~exacerbated by any delays in tocompletion ~~generate~~of ~~significant~~the ~~revenues~~transaction or ~~ever~~termination ~~achieve~~of ~~profitability~~the Merger Agreement.

WeWhile ~~expect~~the toproposed ~~incur~~transaction ~~significant~~with ~~research~~Sanofi ~~and~~is development expenses as we advance clinical trials for our product candidates as well as significant costs to build out our commercial infrastructure and conduct pre-commercial activities for teplizumab as we prepare for potential commercialization. As a resultpending, we ~~expect to incur substantial losses for the foreseeable future, and these losses will be increasing. We~~ are ~~uncertain when~~subject ~~or if we will be able~~ to ~~achieve~~business oruncertainties ~~sustain profitability. If we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Failure to become~~ and ~~remain~~contractual ~~profitable~~restrictions ~~may~~that ~~impair~~could ~~our ability to sustain operations and adversely~~disrupt ~~affect~~ our business ~~and our ability to raise capital~~.

The Merger Agreement includes restrictions on the conduct of our business prior to the completion of the merger, generally requiring us to use commercially reasonable efforts to carry on our business in the ordinary course. Without limiting the generality of the foregoing, we are subject to a variety of specified restrictions, including that we may not, among other things and subject to certain exceptions and aggregate limitations, incur additional indebtedness, issue additional shares of our common stock outside of our equity incentive plans, repurchase our common stock, pay dividends, acquire assets, securities or property, dispose of businesses or assets, enter into material contracts or make certain additional capital expenditures. We may find that these and other contractual restrictions in the Merger Agreement delay or prevent us from responding, or limit our ability to respond, effectively to competitive pressures, industry developments and future business opportunities that may arise during such period, even if our management believes they may be advisable. If any of these effects were to occur, it could materially and adversely impact our operating results, financial position, cash flows and/or the price of our common stock.

The Merger Agreement requires us to pay a termination fee to Sanofi if certain circumstances occur, which could require us to use available cash that would have otherwise been available for general corporate purposes.

If the Merger Agreement is terminated under certain circumstances, including termination by us in order to accept and enter into a definitive agreement with respect to a Superior Proposal (as defined in the Merger Agreement), we will be required to pay Sanofi a termination fee of $100.0 million by wire transfer of immediately available funds. If the Merger Agreement is terminated under such circumstances, we may be required to pay such termination fee using available cash that would have otherwise been available for general corporate purposes and other uses. For these and other reasons, termination of the Merger Agreement could materially and adversely affect our business operations and financial condition, which in turn would materially and adversely affect the price of our common stock.

Shareholder litigation could prevent or delay the closing of the proposed transaction with Sanofi or otherwise negatively impact our business, operating results and/or financial condition.

We may incur costs in connection with the defense or settlement of any future shareholder litigation in connection with the proposed transaction with Sanofi. Future shareholder litigation may adversely affect our ability to complete the proposed transaction with Sanofi. We could incur significant costs in connection with any such litigation lawsuits, including costs associated with the indemnification of obligations to our directors. Furthermore, one of the conditions to the closing of the transaction is the absence of any governmental order or law preventing the transaction or making the consummation of the transaction illegal. Consequently, if a plaintiff were to secure injunctive or other relief prohibiting, delaying or otherwise adversely affecting our ability to complete the proposed transaction, then such injunctive or other relief may prevent the proposed transaction from becoming effective within the expected time frame or at all.

We have incurred, and will continue to incur, direct and indirect costs as a result of the proposed transaction with Sanofi.

We have incurred, and will continue to incur, significant costs and expenses, including fees for professional services and other transaction costs, in connection with the pending transaction with Sanofi. We must pay substantially all of these costs and expenses whether or not the transaction is completed. There are a number of factors beyond our control that could affect the total amount or the timing of these costs and expenses.

Risks Related to Our Business

We are a commercial-stage biopharmaceutical company with a limited operating history, and we are dependent on the commercial success of TZIELD. We expect to incur substantial expenses and may never become profitable or be able to sustain profitability.

We are a commercial-stage biopharmaceutical company formed in October 2016 and have a limited operating history. We do not lease or own any laboratory space and we have historically had a remote work environment for our employees. We outsource most of our manufacturing and clinical trial operations as well as certain other functions.

We have acquired or in-licensed TZIELD, which was recently approved by the FDA for its first commercial indication and which we are studying in a Phase III trial for use in newly diagnosed T1D as well as our three clinical stage assets (PRV-3279, ordesekimab and PRV-101). We have obtained FDA approval for TZIELD to delay the onset of Stage 3 T1D in adults and pediatric patients aged 8 years and older with Stage 2 T1D. We have not obtained any other marketing approvals for TZIELD or our product candidates. We launched TZIELD in the U.S. after FDA approval on November 17, 2022 and therefore do not have a long history operating as a commercial company. We continue our process of transitioning from a company with a research and development focus to a company with commercial activities and we may not be successful in executing this transition. We have not yet demonstrated our ability to consistently and effectively manufacture at commercial scale, or arrange for a third party to do so on our behalf, or conduct sales, marketing and distribution activities necessary for successful product commercialization. Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history.

The commercial success of TZIELD will depend on a number of factors, including our ability to:

	●	maintain commercial manufacturing arrangements with CMOs and establish redundancies in our manufacturing arrangements to protect against any supply chain issues that may arise;
	●	produce, through a validated process, sufficient quantities and inventory of TZIELD to meet commercial demand;
	●	maintain and, if needed, expand our commercial infrastructure with internal sales, distribution and marketing capabilities sufficient to generate and support commercial sales of TZIELD;
	●	leverage Sanofi’s expertise, capabilities and commercial resources under the Sanofi Co-Promotion Agreement;
	●	secure widespread acceptance of our product from physicians, health care payors, patients and the medical community;
	●	raise awareness and expand screening to identify patients with Stage 2 T1D;
	●	obtain and maintain coverage and adequate reimbursement of TZIELD by governmental authorities, private health insurers, managed care organizations and other third-party payers;
	●	maintain compliance with ongoing FDA labeling, packaging, storage, advertising, promotion, recordkeeping, and safety requirements and other laws and regulations that apply to us and our commercial activities;
	●	successfully complete the post-marketing requirements specified in the FDA approval letter for TZIELD;
	●	manage our growth and spending as costs and expenses increase due to commercialization; and
	●	establish and maintain strategic partnerships for the commercialization of TZIELD in countries outside the United States, and such collaborators’ ability to obtain regulatory and reimbursement approvals in such countries.

If we cannot successfully execute any one of the foregoing, or our ongoing clinical trials for our product candidates do not read out positively or support regulatory approvals, our business may not succeed, and your investment will be adversely affected. Additionally, we will need to continue investing substantial financial and management resources to complete these tasks, and we expect to incur substantial losses for the foreseeable future, and these losses will be increasing. We are uncertain when or if we will be able to achieve or sustain profitability. If we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Failure to become and remain profitable may impair our ability to sustain operations and adversely affect our business and our ability to raise capital.

Marketing approval of TZIELD for additional indications or in other jurisdictions, as well as obtaining marketing approval of our product candidates, will require extensive clinical testing data to support safety and efficacy requirements, as well as pharmaceutical development, manufacturing and preclinical data, all of which are needed for regulatory approval, and the requirements may be different in different jurisdictions in which we intend to launch our products. If we obtain marketing approvals in the jurisdictions in which we intend to launch our products, we will then have to secure pricing and reimbursement approvals prior to product launch. The likelihood of success of our business plan must be considered in light of the challenges, substantial expenses, difficulties, complications and delays frequently encountered in connection with developing and expanding early-stage businesses and the regulatory and competitive environment in which we operate. Biopharmaceutical product development is a highly speculative undertaking, involves a substantial degree of risk, and is a capital-intensive business.

TZIELD may cause undesirable side effects that could limit its commercial potential.

TZIELD is associated with adverse reactions, which may require patients to discontinue treatment. The labeling for TZIELD includes warnings and precautions for cytokine release syndrome, serious infections, lymphopenia, and hypersensitivity reactions. If we or others identify previously unknown side effects, in particular if they are severe, or if known side effects are more frequent or severe than in the past, then:

	●	sales of TZIELD may be modest;
	●	regulatory approvals for TZIELD may be restricted or withdrawn;

	●	we may decide to, or be required to, send product warning letters or field alerts to physicians, pharmacists and hospitals;
	●	additional non-clinical or clinical studies or changes to manufacturing processes, specifications and/or facilities may be required;
	●	changes in labeling or changes to distribution processes, including the imposition of a Risk Evaluation and Mitigation Strategy (“REMS”), may be required;
	●	our reputation in the marketplace may suffer; and
	●	government investigations or lawsuits, including class action suits, may be brought against us.

Any of the above occurrences would harm or prevent sales, increase our expenses and impair our ability to successfully commercialize TZIELD. Furthermore, TZIELD may be commercially used in a wider population and in a less rigorously controlled environment than in clinical studies or may be prescribed by physicians for off-label uses, which could result in adverse reactions being reported that are different than what was observed in clinical trials. If this were to occur, regulatory authorities, healthcare practitioners, third-party payers or patients may perceive or conclude that the use of TZIELD is associated with previously unknown serious adverse effects, undermining our commercialization efforts.

We need to raise additional funding. If we are unable to raise sufficient capital when needed, we could be forced to delay, reduce or eliminate certain, or all of our product development programs or commercialization efforts.

We expect our operating costs to be substantial as we incur costs to support our commercialization efforts for ~~teplizumab~~TZIELD, including costs ~~related~~ related to the continued buildout of an internal commercial infrastructure, and our ongoing and planned clinical trials for ~~teplizumab~~TZIELD and our ~~other~~ product candidates. We will operate at a loss for the foreseeable future oreven ~~until~~as ~~such~~we ~~time~~continue asto webuild TZIELD’s nascent market and pursue, obtain ~~regulatory~~pricing ~~approval~~and reimbursement approvals for , and work to execute a successful commercial launch of ~~teplizumab, if ever~~TZIELD. For the years ended December 31, ~~2021~~2022 and ~~2020~~2021, we had a net loss of $~~114~~113.46 million and $98114.64 million, respectively, and as of December 31, ~~2021~~2022, we had an accumulated deficit of $~~292~~405.~~1 million~~6 ~~and $127~~million.1 ~~million~~We inhad cash, cash equivalents and marketable securities of $165.0 Wemillion ~~believe~~as ~~our~~of ~~current~~December ~~cash~~31, ~~cash~~2022. ~~equivalents~~We ~~and marketable~~expect ~~securities,~~to ~~will~~continue ~~be sufficient~~ to ~~fund~~incur ~~current~~significant ~~operating~~expenses ~~requirements~~and ~~for~~increasing atoperating ~~least~~losses over the next 12several ~~months~~years ~~from~~and ~~the~~our ~~issuance~~net oflosses ~~the~~may fluctuate ~~financial~~significantly ~~statements~~from ~~included~~quarter into ~~this~~quarter ~~report.~~and Weyear ~~have~~to ~~based~~year. ~~this~~On ~~estimate~~February on2, ~~assumptions~~2023, ~~that~~we ~~may~~drew ~~prove~~an toadditional be$40.0 ~~wrong~~million ~~and~~from ~~our~~the ~~available~~second tranche ~~capital~~of ~~resources~~the ~~could~~Hercules beLSA ~~consumed~~following ~~faster~~FDA ~~than~~approval weof ~~currently~~TZIELD, ~~expect.~~for ~~However,~~net ifproceeds ~~our~~of ~~teplizumab~~approximately ~~BLA~~$38.9 ~~resubmission~~million. isAlso, on February 10, 2023, ~~approved~~Sanofi, wein ~~will~~accordance ~~need~~with ~~additional~~the ~~capital~~Sanofi toSecurities ~~fund~~Purchase ~~increases~~Agreement in(defined ~~costs~~below), ~~related~~purchased to2,712,497 ~~commercialization~~shares ~~and~~of ~~payment~~our common stock at a purchase price of ~~any~~approximately ~~potential~~$12.90 ~~milestones~~per ~~triggered~~share, ~~under~~for ~~our~~a ~~current~~total ~~agreements,~~investment ~~including~~of ~~with~~$35.0 ~~MacroGenics~~million.

We dobelieve, ~~not~~based ~~have~~on ~~any~~our ~~prospective~~current ~~credit~~operating ~~facilities~~plans, aswhich ainclude ~~source~~commercialization of ~~future~~TZIELD ~~funds~~and ~~apart~~advancement ~~from~~of ~~the~~our ~~available~~clinical ~~capacity~~product candidates, ~~under~~and ~~our~~other ~~2021~~factors ~~ATM~~described ~~Program~~above, ~~(as~~that ~~defined~~our ~~below)~~cash, ~~and~~cash ~~there~~equivalents ~~can~~and bemarketable nosecurities ~~assurance~~on ~~that~~hand, we will be ~~able~~sufficient to ~~raise~~fund ~~sufficient additional~~current ~~capital~~operating onrequirements ~~acceptable~~for ~~terms or~~ at ~~all.~~least Wethe ~~may~~next ~~seek~~12 ~~additional~~months ~~capital~~from ~~through~~the aissuance ~~combination~~ of ~~private~~the ~~equity~~financial ~~offerings,~~statements ~~public~~included ~~equity offerings,~~within ~~debt~~this ~~financings~~Annual ~~and~~Report on ~~strategic~~Form ~~collaborations~~10-K. If we ~~raise~~do ~~additional~~not ~~funds~~otherwise ~~through~~raise ~~the~~additional ~~issuance of equity or convertible debt securities~~capital, ~~the~~we ~~percentage ownership of our stockholders could be significantly diluted, and these newly issued securities~~ may ~~have~~encounter ~~rights, preferences~~near-term orliquidity ~~privileges senior to those of existing stockholders~~needs. ~~Debt~~Factors ~~financing, if obtained, may involve agreements~~ that ~~include covenants~~could ~~limiting or restricting~~ impact our ~~ability~~cash torunway ~~take specific actions~~include, ~~such~~but asare ~~incurring~~not ~~additional~~limited ~~debt~~to, ~~could~~the ~~increase~~success ~~our expenses~~ and ~~could~~uptake ~~require~~of ~~that~~ our ~~assets~~commercial ~~secure~~launch ~~such~~of ~~debt.~~TZIELD ~~Moreover,~~and ~~any~~expenses ~~debt~~related weto ~~incur~~the continued ~~must~~commercialization beof ~~repaid~~TZIELD, ~~regardless~~including ofcosts ~~our~~to ~~operating~~continue ~~results.~~the ~~If we~~build ~~choose~~out tothe ~~pursue~~Company’s ~~additional~~commercial ~~indications~~infrastructure and~~/or~~ ~~geographies~~commercial sales ~~for~~activities ~~our~~(including ~~product~~the ~~candidates,~~Sanofi inCo-~~license~~Promotion ~~or acquire additional development assets~~Agreement), ormanufacturing ~~otherwise~~activities ~~expand~~for ~~more~~TZIELD ~~rapidly~~and ~~than~~the wemilestone ~~presently~~payments ~~anticipate,~~due ~~we may also need~~ to MacroGenics ~~raise~~upon ~~additional~~FDA ~~capital~~approval ~~sooner~~of ~~than expected~~TZIELD.

IfWe do not have any prospective credit facilities as a source of future funds apart from the available capacity under our 2021 ATM Program and the Hercules LSA and there can be no assurance that we ~~are~~will ~~unable~~be able to raise sufficient additional capital ~~when required or~~ on acceptable terms, weor at all. We may ~~need~~seek toadditional ~~significantly~~capital ~~delay~~through a combination of private equity offerings, ~~scale~~public ~~back~~equity orofferings, ~~discontinue~~debt financings and ~~the~~strategic ~~development~~collaborations. orIf ~~commercialization~~we raise additional funds through the issuance of ~~one~~equity or ~~more~~convertible debt securities, the percentage ownership of our ~~product~~stockholders ~~candidates~~could orbe ~~cease~~significantly ~~operations~~diluted, ~~altogether~~and these newly issued securities may have rights, preferences or ~~relinquish~~privileges senior to those of existing stockholders. Debt financing, if obtained, may involve agreements that include covenants limiting or ~~license~~restricting onour ~~unfavorable~~ability ~~terms~~to take specific actions, such as incurring additional debt, could increase our ~~rights~~expenses and could require that our assets secure such debt. Moreover, any debt we incur must be repaid regardless of our operating results. If we choose to ~~technologies~~pursue additional indications and/or ~~any~~geographies ~~future~~for TZIELD or our product candidates, ~~that~~in-license weor acquire additional development assets, or otherwise ~~would~~expand ~~seek~~more rapidly than we presently anticipate, we may also need to ~~develop~~raise oradditional ~~commercialize~~capital sooner than expected.

If we are unable to raise additional capital when required or on acceptable terms, we may need to significantly delay, scale back or discontinue the development or commercialization of TZIELD or one or more of our product candidates or cease operations altogether, or relinquish or license on unfavorable terms, our rights to technologies or any future product candidates that we otherwise would seek to develop or commercialize.

Our forecast of the period of time through which our financial resources will adequately support our operations is a forward-looking statement and involves risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this Risk Factors section. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect.

55Our debt agreement with Hercules contains milestones that must be achieved in order to draw down on our debt facility and operating and financial covenants that restrict our business and financing activities, and is subject to acceleration in specified circumstances, which may result in Hercules taking possession of any collateral.

The third tranche of term loans under the Hercules LSA (the “Third Tranche”), in an amount up to $10.0 million, may only be drawn if the Second Tranche has been borrowed, subject to the achievement of (i) at least $70.0 million in new net cash proceeds from various equity issuances (including convertible debt) and business development transactions on or prior to December 15, 2023 and (ii) achievement of specified cumulative net product revenue related to TZIELD on or prior to November 30, 2023, provided that certain customary borrowing conditions have been satisfied. The fourth tranche of term loans under the Hercules LSA (the “Fourth Tranche”), in an amount up to $35.0 million (less the actual funded amount, if any, of the Third Tranche), may be drawn, subject to the achievement of specified trailing six-month net product revenue for any six-month period following the Closing Date and on or prior to September 30, 2024 (the “Performance Milestone”), with the drawing of the Fourth Tranche to occur on or prior to the earlier of (x) December 15, 2024 and (y) ninety (90) days following the achievement of the Performance Milestone, provided that certain customary borrowing conditions have been satisfied. The fifth tranche of term loans under the Hercules LSA, in an amount up to $25.0 million, is available solely at the discretion of the Lenders. Each of the remaining tranches may be borrowed in multiple drawings.

The Hercules LSA requires that, commencing on January 1, 2023, the Company maintain, at all times, unrestricted cash, cash equivalents and liquid funds held in accounts subject to a control agreement in favor of Hercules (“Liquidity”) in an amount not less than 50.0% of the aggregate outstanding amount of the term loans plus the aggregate amount of the Company’s accounts payable that remain unpaid 120 days after their respective due dates; provided that, upon (x) achievement of an Approval Milestone, which occurred on November 17, 2022, and (y) the effectiveness of the Performance Covenant (as defined in the Hercules LSA), the minimum Liquidity required to be maintained by the Company will be an amount not less than the greater of (A) $20,000,000 and (B) 25% of the aggregate outstanding amount of the aggregate outstanding amount of the term loans plus the aggregate amount of the Company’s accounts payable that remain unpaid 120 days after their respective due dates. In addition, if the Company draws Tranche 2, Tranche 3 and Tranche 4 of term loans, the Company is required to maintain minimum 6-month trailing revenue amounts, measured monthly commencing with the delivery of financial statements for the period ending June 30, 2024, as set forth in the Hercules LSA, provided that such minimum revenue covenant will be waived at any time in which the Company maintains (a) at least $550.0 million of market capitalization and minimum Liquidity of not less than 50.0% of the aggregate outstanding amount of the term loans or (b) minimum Liquidity of not less than 85.0% of the aggregate outstanding amount of the term loans. In addition, the Hercules LSA includes customary representations and warranties and other covenants associated with a secured term loan facility for similarly situated companies.

We maintain our cash at financial institutions, often in balances that exceed federally insured limits.

We regularly maintain cash balances at multiple third-party financial institutions, including Silicon Valley Bank (“SVB”), in excess of the Federal Deposit Insurance Corporation (“FDIC”), insurance limits. If such banking institutions were to fail, we could lose all or a portion of those amounts held in excess of such insurance limitations. For example, the FDIC took control of SVB, where we held certain of our cash and cash equivalents, on March 10, 2023. The Federal Reserve subsequently announced that account holders would be made whole, and we were able to move substantially all of our cash and cash equivalents to another financial institution. However, the FDIC may not make all account holders whole in the event of future bank failures. In addition, even if account holders are ultimately made whole with respect to a future bank failure, account holders’ access to their accounts and assets held in their accounts may be substantially delayed. Any material loss that we may experience in the future or inability for a material time period to access our cash and cash equivalents could have an adverse effect on our ability to pay our operational expenses or make other payments, which could adversely affect our business.

We may not be able to correctly estimate or control our future operating expenses, which could lead to cash shortfalls.

Our operating expenses may fluctuate significantly in the future as a result of a variety of factors, many of which are outside of our control. These factors include:

● the success of our development and commercialization strategy; ● the time, resources, and expense required to develop and conduct clinical trials and seek regulatory approvals ~~for~~(including ~~our~~supplemental ~~product candidates; ● the cost of preparing~~approvals), ~~filing, prosecuting, defending,~~ and ~~enforcing~~pricing ~~patent claims~~ and ~~other~~reimbursement ~~patent related costs~~approvals, ~~including~~for ~~litigation~~TZIELD ~~costs~~ and ~~the results of such litigation; ● the cost of manufacturing and maintaining sufficient inventories of~~ our ~~products to meet anticipated demand; ● any~~ product ~~liability or other lawsuits related to our product~~ candidates ~~and the costs associated with defending them or the results of such lawsuits~~; ● the ~~cost~~time, ofresources, ~~defending against securities litigation including stock-drop litigation~~ and ~~related~~expense ~~derivative~~required ~~law suits; ● the cost of growing our ongoing development operations and establishing commercialization operations; ● the cost~~ to ~~attract~~maintain ~~and~~compliance ~~retain personnel~~ with ~~the~~ongoing ~~skills~~regulatory ~~required for effective operations~~requirements; ~~● the costs associated with being a public company; and ● the costs associated with commercialization.~~

Any material increases in our operating expenses will have a material impact on our financial condition and business operations. In addition, if we are unable to correctly estimate or control our future operating expenses, we may need to raise additional capital, delay or cease development of one or more of our product candidates, which could have a material adverse effect on our business, operating results and prospects.58

	●	the cost of preparing, filing, prosecuting, defending, and enforcing patent claims and other patent related costs, including litigation costs and the results of such litigation;
	●	the cost of manufacturing and maintaining sufficient inventories of TZIELD and our product candidates to meet anticipated demand;
	●	any product liability or other lawsuits related to TZIELD or our product candidates and the costs associated with defending them or the results of such lawsuits;
	●	the cost of defending against securities litigation including stock-drop litigation and related derivative lawsuits;
	●	the cost of growing our ongoing development operations and establishing commercialization operations, including sales, marketing and distribution capabilities;
	●	the cost to attract and retain personnel with the skills required for effective operations;
	●	the costs associated with being a public company; and
	●	the costs associated with commercialization.

Any material increases in our operating expenses will have a material impact on our financial condition and business operations. In addition, if we are unable to correctly estimate or control our future operating expenses, we may need to raise additional capital, delay or cease development or commercialization of TZIELD or one or more of our product candidates, which could have a material adverse effect on our business, operating results and prospects.

Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization

~~Our BLA resubmission in February 2022~~Clinical ~~and~~drug ~~our~~development ~~regulatory~~involves ~~efforts~~a ~~may not successfully address to the FDA’s satisfaction~~risky, ~~the~~lengthy ~~deficiencies identified~~and byexpensive ~~the~~process ~~FDA~~with inan ~~the~~uncertain ~~July~~outcome. ~~2021~~Although ~~CRL,~~prior ~~including~~pre-clinical ~~deficiencies related to the demonstration of PK comparability of our planned commercial product~~ and ~~drug product used in historical~~ clinical ~~trials as well as other~~ ~~product~~studies, ~~quality~~data ~~requirements. If we are not able to satisfy the FDA’s requests~~ and ~~requirements,~~analysis ~~including~~may ~~by,~~support ~~as requested by the FDA in~~ our ~~January~~belief ~~2022 Type B meeting, including~~ in the ~~BLA~~potential ~~resubmission~~of anour ~~adjusted dosing regimen for the planned commercial~~ product tocandidates, ~~match~~ the ~~exposure~~results of ~~clinical~~our ~~material~~ongoing ~~used in prior~~ clinical trials ~~with safety justifications to the~~ ~~FDA’s~~for ~~satisfaction,~~them we may not be ~~successful~~positive inor ~~obtaining~~supportive ~~approval~~ of ~~teplizumab~~our ~~for~~beliefs. ~~the~~We ~~at-risk~~may ~~patient indication~~incur inadditional ~~the~~costs ~~near-term,~~ or atexperience ~~all.~~delays ~~Additionally~~in completing, ifor weultimately be ~~are~~unable ~~not able~~ to ~~address~~complete, the ~~FDA’s~~development ~~PK comparability~~ and ~~other requirements~~commercialization ~~and obtain approval for teplizumab for the delay~~ of ~~clinical~~TZIELD ~~T1D~~ in ~~at-risk individuals, we may be required to conduct~~ additional ~~research,~~indications ~~analysis~~ or ~~clinical~~any ~~trials~~of ~~before~~our weother ~~can~~product ~~submit~~candidates, which acould ~~BLA~~negatively ~~for~~and ~~teplizumab~~materially inimpact aour ~~newly diagnosed patient indication~~business.

AsWe ~~required~~are bypursuing ~~the~~clinical ~~FDA,~~development weof ~~provided~~TZIELD infor ~~the~~use ~~initial~~in ~~BLA~~newly ~~for~~diagnosed ~~the~~T1D ~~at-risk~~patients ~~indication physiochemical~~ and ~~analytical~~have ~~data~~plans for ~~teplizumab supporting~~label ~~the~~expansion ~~comparability~~efforts ~~between the study drug previously manufactured by MacroGenics~~ and ~~Eli Lilly and our to-be-commercialized~~development ~~drug~~in ~~product.~~other ~~In addition to conducting analytical tests to evaluate comparability we also conducted a double-blind~~indications, ~~single low-dose, PK/PD bridging study~~ in ~~healthy~~addition ~~subjects (“Bridging PK/PD Study”)~~ to ~~support~~our ~~the~~ongoing ~~CMC~~clinical ~~comparability~~development ~~assessment~~of ~~between~~our ~~the teplizumab~~other ~~study~~product ~~drug~~candidates. ~~derived~~It ~~from~~is ~~drug~~impossible ~~substance manufactured by Eli Lilly and the~~ to~~-be-commercialized~~ ~~teplizumab~~predict ~~drug product derived~~if ~~from~~or ~~the~~when ~~drug~~any ~~substance~~of ~~manufactured by~~ our ~~contract manufacturing partner, AGC Biologics in connection with the PROTECT Trial. This single low-dose Bridging PK/PD Study was the first time the teplizumab drug~~ product ~~derived~~candidates ~~from~~will ~~the~~prove ~~drug~~safe ~~substance~~or ~~manufactured by~~effective ~~AGC Biologics was used~~ in humans. Weor ~~submitted~~will toreceive ~~the~~regulatory ~~FDA~~approval ~~that~~and wepricing ~~believe~~and ~~the~~reimbursement approval, ~~results~~and of the ~~Bridging~~risk ~~PK/PD~~of ~~Study~~failure ~~suggests~~through ~~that~~ the ~~drug~~ ~~substances~~development ~~manufactured~~process byis ~~AGC Biologics and Eli Lilly are comparable~~high. ~~Comparison~~Before ofobtaining ~~drug~~marketing ~~plasma~~approval ~~concentration~~(or ~~versus~~supplemental ~~time after~~approvals) ~~dosing~~from inregulatory ~~the~~authorities ~~Bridging PK/PD Study shows a lower AUC~~ for the ~~teplizumab~~sale ~~drug~~of ~~product derived from the drug substance manufactured by AGC Biologics. Based on~~ our ~~PK/PD~~product ~~modeling~~candidates, we ~~submitted~~must ~~our~~conduct ~~supporting~~extensive ~~data~~clinical ~~and~~trials ~~analysis~~ to ~~the~~demonstrate ~~FDA to support our belief that~~ the safety ~~lower~~and ~~AUC observed in the PK/PD Bridging Study is not significant enough to impact the~~ efficacy ~~or safety~~ of the ~~to-be-commercialized teplizumab drug~~ product ~~when~~candidates ~~used as proposed~~ in ~~our BLA filing~~humans. ~~However,~~Clinical ontesting ~~July~~is 2expensive, ~~2021, the FDA issued a CRL for our BLA for teplizumab for the delay of clinical T1D in at~~time-~~risk~~consuming ~~individuals.~~and Inuncertain ~~the~~as ~~CRL, the FDA stated that the single, low-dose Bridging PK/PD Study we conducted had failed~~ to ~~show~~outcome. PKWe ~~comparability between~~cannot ~~planned~~guarantee ~~commercial~~that ~~product~~any ~~and historical~~ clinical ~~trial~~trials ~~product and that we~~ will ~~need~~be toconducted ~~establish~~as PKplanned ~~comparability appropriately~~ or ~~provide~~ ~~other~~completed ~~data~~on ~~that~~schedule, ~~adequately~~if ~~justify~~at ~~why~~all. PKA ~~comparability~~failure isof ~~not~~one ~~necessary~~or inmore ~~order~~clinical trials tocan ~~obtain~~occur ~~approval~~at ~~for~~any ~~the~~stage ~~teplizumab~~of ~~BLA for an at-risk indication~~testing.

In September 2021, we announced that we had completed data collection from the PROTECT PK/PD Substudy we conducted with the goal of addressing the FDA’s PK comparability considerations and in November 2021 we announced preliminary top-line data from this substudy. We participated in a Type A meeting with the FDA on November 18, 2021, to discuss data and analysis from the PROTECT PK/PD Substudy data and PD markers that we believe are supportive of comparability and subsequently also had a Type B meeting with the FDA on January 26, 2022. In preliminary comments provided in advance of the January 26th meeting, the FDA noted that our data package does not adequately support PK comparability by itself, because predicted primary PK parameters are indicative of a lower exposure from the AGC Biologics drug substance as compared to the Eli Lilly drug substance. To address this concern, the FDA proposed, and we agreed, to use PK modeling to adjust the 14-day dosing regimen for the planned commercial product to match the exposure of clinical material used in prior clinical trials by ensuring that the 90% confidence intervals for relevant PK parameters fall within the target 80-125% range. On this basis, the FDA agreed that we could proceed to resubmit the BLA.

Our teplizumab BLA resubmission in February 2022 for the At-Risk Indication may not be deemed complete and acceptable for review or ultimately approved by the FDA. Our BLA resubmission and other regulatory efforts may not be successful in addressing, to the FDA’s satisfaction, the deficiencies identified in the FDA’s July 2021 CRL for our original teplizumab BLA for an At-Risk Indication, including product quality and PK comparability considerations. Additionally, our BLA resubmission and our regulatory efforts may not successfully address the FDA’s requests and requirements discussed at our January 2022 Type B meeting. For example, although we included in the BLA resubmission, as requested by the FDA, an adjusted dosing regimen based on PK modeling and clinical data for teplizumab to match exposure of our planned commercial product to drug product used in historical clinical trials, the FDA’s PK comparability concerns may not be addressed to their satisfaction which could result in another CRL for our BLA resubmission. Additionally, as a result of any final resolutions to address the FDA’s considerations related to PK comparability in connection with the teplizumab BLA resubmission for an At-Risk Indication, the FDA may require that we further characterize the teplizumab planned commercial product in the PROTECT Trial, including potentially requiring additional research, analysis, clinical data or clinical trials, to support a regulatory pathway for a newly diagnosed indication of teplizumab.

Ultimately, we may not be successful in our goal to continue to work with the FDA to successfully secure approval of the teplizumab BLA for at-risk patients. We may not be able to address to the FDA’s satisfaction the agency’s concerns relating to PK comparability and other requirements in the short-term or at all. If we fail to address the FDA’s concerns and requirements, our business and operations may be materially and adversely impacted.

We may not be successful in our efforts to develop and obtain regulatory approval for our product candidates. If we are unable to obtain approval for or generate revenues from our product candidates, our ability to create stockholder value will be limited.

Our product candidates are in various stages of clinical development. Our ability to generate product revenue, which we do not expect will occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of our product candidates, which may never occur. For example, our potential product candidates may be shown to have harmful side effects or may have other characteristics that may make the products impractical to manufacture, unmarketable, or unlikely to receive marketing approval. We currently generate no revenue from sales of any product, and we may never be able to develop or commercialize a marketable product.

We will be required to submit our clinical trial protocols and receive approvals from the regulatory authorities before we can commence additional studies with our product candidates. Nonclinical study results for our product candidates, including toxicology studies, may not support the filing of an IND or foreign equivalent for the product candidate.

Moreover, we may not be successful in obtaining acceptance from the regulatory authorities to start our clinical trials. Prior to commencing any clinical trials, we will also have to obtain approval from the ~~Institutional Review Board (“~~IRB”), or Ethics Committee (“EC”) ~~for~~in each of the ~~institutions~~countries atin which we plan to conduct our clinical trials. If we do not obtain or maintain such acceptance, the time in ~~which~~ which we expect to commence and conduct clinical programs for any product candidate will be extended and such extension will increase our expenses and increase our need for additional capital.

Further, there is no guarantee that our clinical trials will be successful or that we will continue clinical development in support of an approval from the regulatory authorities for ~~any~~our ~~indication~~product candidates. Our clinical trial results may show our product candidates to be less effective ~~than~~ than expected or have unacceptable side effects or toxicities. For example, our Phase 2a PRINCE trial did not achieve its primary endpoint of a change in Crohn’s Disease Activity Index Score at week 12 as compared to placebo. We note that most drug candidates never reach the clinical development stage and even those that do commence clinical development have only a small chance of successfully completing clinical development and gaining regulatory approval.

Our business currently depends entirely on the successful development, regulatory approval and commercialization of our product candidates. Our product candidates will require additional preclinical and clinical development, regulatory and marketing approval in multiple jurisdictions, obtaining sufficient manufacturing capacity and expertise for both clinical development and commercial production and substantial investment and significant commercialization efforts before we generate any revenue from product sales.

The success of our current and future product candidates will depend on several factors, including the following:

● successful completion of preclinical and clinical studies with positive results; ● sufficiency of our financial and other resources to complete the necessary preclinical studies and clinical trials; ● entry into collaborations to further the development of our product candidates; ● investigational new drug or clinical trial authorization applications, being cleared such that our product candidates can commence clinical trials; ● successful initiation of enrollment in and completion of clinical trials; ● successful data from our clinical programs that support a finding of safety and effectiveness and an acceptable risk-benefit profile of our product candidates in the intended populations; ● receipt of regulatory and marketing approvals from applicable regulatory authorities; ● establishment of arrangements with third-party manufacturers for clinical supply and commercial manufacturing and, where applicable, commercial manufacturing capabilities; ● successful development of our internal manufacturing processes and transfer, where applicable, from our reliance on CMOs, to our own manufacturing facility, or from our own manufacturing facility to CMOs or the facilities of collaboration partners; ● establishment and maintenance of patent and trade secret protection or regulatory exclusivity for our product candidates; ● commercial launch of our product candidates, if and when approved, whether alone or in collaboration with others, including our ability to recruit and retain commercial talent; ● acceptance of our product candidates and their therapeutic uses, if and when approved, by patients, the medical community and third-party payors; ● effective competition with other therapies and treatment options;

● establishment and maintenance of healthcare coverage and adequate reimbursement from third-party payors and national healthcare systems for any approved products; ● enforcement and defense of intellectual property rights and claims; ● maintenance of a continued acceptable safety profile of the product candidates following approval; and ● achieving desirable medicinal properties for the intended indications.

If we do not succeed in one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to successfully commercialize our product candidates. We cannot assure you that our product candidates will be successfully developed or commercialized. If we are unable to develop, or obtain regulatory approval for, or, if approved, to successfully commercialize our product candidates, it could have a material adverse effect on our business, operating results and prospects.

The outbreak of the novel coronavirus 2019 (COVID-19) has caused delays to our clinical trials. Moreover, the longer the pandemic persists, the more impact it will have on our clinical trial and other business plans and timelines. In addition, this pandemic has caused substantial disruption in the financial markets and may adversely impact economies worldwide, both of which could result in adverse effects on our business, operations and ability to raise capital.

The COVID-19 pandemic continues to drive global uncertainty and has caused, and may continue to cause, delays to the development of certain of our product candidates. Delays in completing our clinical trials are expected to increase our costs, slow our development and approval process and could negatively impact our ability to commence product sales and generate revenues. We have experienced some level of disruption to three of our current or planned clinical trials. For example, in March 2020, we announced a temporary pause in the randomization of patients with newly diagnosed T1D into our global Phase 3 PROTECT study of teplizumab. During the second quarter of 2020, we resumed enrolling patients in the PROTECT study on a country by country and site by site basis and by the end of the third quarter of 2020, all sites were activated, with a majority of the sites actively enrolling patients. We completed target enrollment in the PROTECT study in August 2021 and expect to report top-line results from the PROTECT study in the second half of 2023, subject to change for any potential interruptions related to COVID-19, regulatory decisions, issues or other interruptions. In addition, we, with our development partner Amgen, collectively decided that, to protect the integrity and quality of the PRV-015 Phase 2b trial in gluten free diet NRCD, we would stagger study startup throughout the third quarter of 2020 rather than initiating screening in the second quarter of 2020, as had originally been scheduled. We initiated the Phase 2b trial in August 2020 and the pandemic has caused difficulties and delays in recruitment. As a result of these delays, we now expect to report top-line results from the PROACTIVE study by the end of 2023. Additionally, our plans to initiate the Phase 2a portion of the PREVAIL study in lupus patients were delayed, predominantly due to COVID-19 related impacts on our plans, and we recently initiated the study in January 2022.

Timely enrollment in our clinical trials is dependent upon global clinical trial sites which may be adversely affected by global health matters, such as pandemics. We are currently conducting clinical trials for our product candidates in many countries, including the United States, European Union, the UK and Canada and may expand to other geographies. Many of these regions in which we operate are currently being or may in the future be affected by COVID-19. Some factors from the COVID-19 outbreak that may delay or otherwise adversely affect enrollment in the clinical trials of our product candidates, as well as adversely impact our business generally, include:

● delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff, and delays enrolling patients in our clinical trials or increased rates of patients withdrawing from our clinical trials following enrollment as a result of contracting COVID-19, being forced to quarantine, or not accepting home health visits, particularly for older patients with a higher risk of contracting COVID-19; ● limitations on travel that could interrupt key trial activities, such as clinical trial site initiations and monitoring, domestic and international travel by employees, contractors or patients to clinical trial sites, including any government-imposed travel restrictions or quarantines that may impact the ability or willingness of patients, employees or contractors to travel to our clinical trial sites or secure visas or entry permissions, any of which could delay or adversely impact the conduct or progress of our clinical trials; ● interruption or delays in the operations of the United States Food and Drug Administration and foreign regulatory authorities, which may impact review and approval timelines;

●The outcome ~~interruption~~of preclinical studies and early clinical trials may not be predictive of, orthe ~~delays~~success inof ~~receiving~~later clinical trials, ~~supplies~~and interim results of ~~raw~~a ~~materials~~clinical ~~for~~trial ordo ~~our~~not necessarily predict final results. Further, product candidates ~~from~~in ~~our~~later ~~contract~~stages ~~manufacturing~~of ~~organizations~~clinical ~~due~~trials may fail to ~~staffing~~show ~~shortages,~~the ~~production~~desired ~~slowdowns~~safety orand ~~stoppages~~efficacy profile despite having progressed through pre-clinical studies and ~~disruptions~~initial clinical trials. A number of companies in ~~delivery~~the ~~systems;~~pharmaceutical and ●biotechnology ~~business~~industries ~~disruptions~~have ~~caused~~suffered bysignificant ~~potential~~setbacks ~~workplace~~in advanced clinical trials due to lack of efficacy or adverse safety profiles, ~~laboratory~~notwithstanding ~~and~~promising ~~office~~results ~~closures~~in earlier studies, and anwe cannot ~~increased~~be ~~reliance~~certain onthat ~~employees~~we ~~working~~will ~~from~~not ~~home~~face similar setbacks. Additionally, ~~disruptions~~data submitted to regulators are subject to varying interpretations that could delay, limit or ~~delays~~prevent inagency ~~ongoing~~approval. ~~laboratory~~We ~~experiments~~cannot ~~and~~assure ~~operations~~you that the FDA, EMA, MHRA or ~~travel~~comparable foreign regulatory authorities will view the results as we do or that any future trials of any of TZIELD or our product candidates will achieve positive results or regulatory approvals, ~~and~~or ~~staffing~~be ~~shortages~~successfully commercialized.

~~Additionally,~~The ~~the~~success ~~COVID-19 pandemic, has significantly impacted the FDA’s ability to conducted domestic and foreign inspections. On March 10, 2020, the FDA announced its intention to postpone most inspections~~ of ~~foreign~~our ~~manufacturing~~current ~~facilities~~ and ~~products;~~future ~~and,~~product oncandidates ~~March 18,~~will ~~2020,~~depend ~~the FDA temporarily postponed routine surveillance inspections of domestic manufacturing facilities. Subsequently,~~ on ~~July 10,~~several ~~2020~~factors, ~~the~~including FDA announced its intention to resume certain on-site inspections of domestic manufacturing facilities subject to a risk-based prioritization system. The FDA intends to use this risk-based assessment system to identify the categories of regulatory activity that can occur within a given geographic area, ranging from mission critical inspections to resumption of all regulatory activities. In April 2021 the FDA issued guidance on conducting voluntary remote interactive evaluations of manufacturing and outsourcing facilities as well as facilities involved in non-clinical and clinical research. Regulatory authorities outside the United States may adopt similar restrictions or other policy measures in response to the COVID-19 pandemic. If a prolonged government shutdown occurs, or if global health concerns continue to prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.following:

~~The pandemic~~● ~~has~~successful ~~already~~completion ~~caused~~of ~~significant~~preclinical ~~disruptions~~and inclinical ~~the~~studies with positive results; ● sufficiency of our financial ~~markets,~~and other resources to complete the necessary preclinical and ~~may~~clinical ~~continue~~studies or trials; ● entry into partnerships or collaborations to ~~cause~~further ~~such~~the ~~disruptions~~development of our product candidates; ● investigational new drug or clinical trial authorization applications, ~~which~~being ~~could adversely~~cleared ~~impact~~such that our ~~ability~~product tocandidates ~~raise~~can ~~additional~~commence ~~funds~~clinical ~~through~~trials; ~~public~~● ~~offerings~~successful orinitiation ~~private~~of ~~placements~~enrollment in and ~~may~~completion ~~also~~of ~~impact~~clinical ~~the~~trials; ~~volatility of~~● successful data from our ~~stock~~clinical ~~price~~programs that support a finding of safety and ~~trading~~effectiveness inand an acceptable risk-benefit profile of our ~~stock.~~product ~~Moreover~~candidates in the intended populations; ● receipt of regulatory, itmarketing isand ~~possible~~pricing ~~the~~and ~~pandemic~~reimbursement ~~will~~approvals ~~continue~~from toapplicable ~~significantly~~regulatory ~~impact~~authorities; ~~economies~~● ~~worldwide, which~~establishment ~~could~~of ~~result~~arrangements inwith ~~adverse~~third-party ~~effects~~manufacturers onfor ~~our~~clinical ~~business~~supply and ~~operations.~~commercial ~~The~~manufacturing ~~rapid~~and, where applicable, commercial manufacturing capabilities; ● successful development of our internal manufacturing processes and ~~fluidity~~ oftransfer, ~~the~~where ~~pandemic~~applicable, ~~precludes~~from ~~any~~our ~~prediction~~reliance ason CMOs, to our own manufacturing facility or other CMOs, or from our own manufacturing facility to CMOs or the ~~ultimate~~facilities ~~impact~~of collaboration partners; ● establishment and maintenance of ~~COVID-19.~~patent ~~Additionally~~and trade secret protection or regulatory exclusivity for our product candidates; ● commercial launch of our product candidates, ~~the~~if ~~pandemic~~and ~~could~~when ~~negatively impact~~approved, whether alone or in collaboration with others, including our ability to ~~execute~~recruit aand ~~successful~~retain ~~launch~~commercial talent; ● acceptance of ~~teplizumab~~our ifproduct wecandidates ~~receive~~and ~~marketing~~their ~~approval~~therapeutic uses, ~~which~~if ~~could~~and ~~impact~~when ~~our~~approved, ~~revenue~~by ~~making potential~~patients, the medical community and ~~have~~third-party payers; ● competition with other ~~negative~~therapies ~~material~~and ~~adverse~~treatment ~~impacts~~options, onincluding ~~our~~the ~~business.~~impact ~~The~~of ~~full~~competition ~~extent~~on enrollment of ~~the~~clinical ~~impact~~trials; ● establishment and ~~effects~~maintenance of ~~COVID~~healthcare coverage and adequate reimbursement from third-19party ~~on our~~payers ~~business,~~and ~~operations,~~national ~~liquidity,~~healthcare ~~financial~~systems ~~condition~~for any approved products; ● enforcement and ~~results~~defense of ~~operations~~intellectual ~~remain~~property ~~uncertain~~rights atand ~~this~~claims; ~~time~~● maintenance of a continued acceptable safety profile of the product candidates following approval; and ● achieving desirable medicinal properties for the intended indications.

~~Clinical~~If ~~drug~~we ~~development~~do ~~involves~~not asucceed ~~risky,~~in ~~lengthy~~one ~~and~~or ~~expensive~~more ~~process~~of ~~with~~these anfactors ~~uncertain~~in ~~outcome.~~a ~~Although~~timely ~~prior~~manner ~~pre-clinical~~or ~~and~~at ~~clinical studies~~all, ~~data~~we ~~and~~could ~~analysis~~experience ~~may~~significant ~~support~~delays ~~our~~or ~~belief~~an ininability to ~~the~~successfully ~~potential~~commercialize of our ~~pipeline~~product ofcandidates. ~~products,~~We ~~the~~cannot ~~results~~assure ofyou that our ~~ongoing~~product ~~clinical~~candidates ~~trials for~~will ~~them may not~~ be ~~positive~~successfully developed or ~~supportive of our beliefs~~commercialized. WeIf ~~may~~we ~~encounter~~are ~~substantial~~unable ~~delays~~to indevelop, ~~completing~~or ~~our~~obtain ~~ongoing~~regulatory ~~clinical trials~~approval or ~~starting~~pricing ~~any~~and ~~new~~reimbursement ~~clinical~~approval ~~trials~~for, ~~which in turn may require additional costs~~or, orif ~~we may fail~~ approved, to ~~demonstrate~~successfully ~~adequate safety~~commercialize ~~and~~our ~~efficacy~~product tocandidates, ~~the~~it ~~satisfaction~~could ofhave ~~applicable~~a ~~regulatory~~material ~~authorities~~adverse ~~for~~effect on our ~~product candidates~~business, ~~which~~operating ~~could~~results ~~negatively~~ and ~~materially impact our business~~prospects.

ItThe isongoing ~~impossible~~coronavirus to2019 ~~predict~~(COVID-19) ifpandemic orhas ~~when~~caused ~~any~~delays ofto our ~~product~~clinical ~~candidates~~trials, ~~will~~and ~~prove~~may ~~safe~~continue orto ~~effective~~impact inour ~~humans~~clinical ~~or will receive regulatory approval,~~trial and ~~the~~other ~~risk~~business ofplans ~~failure~~and ~~through the development process is high~~timelines. ~~Before~~Another ~~obtaining~~surge ~~marketing~~in ~~approval~~cases ~~from~~may ~~regulatory~~lead ~~authorities~~to ~~for the~~restrictions ~~sale~~that oflimit our ~~product~~ability ~~candidates, we must conduct extensive clinical trials~~ to ~~demonstrate~~engage ~~the~~healthcare ~~safety~~providers, and ~~efficacy~~therefore impact ofour ~~the~~launch ~~product candidates in humans~~trajectory. ~~Clinical~~In ~~testing is expensive~~addition, ~~time-consuming~~the ~~and~~ongoing ~~uncertain~~pandemic ashas tocaused ~~outcome.~~substantial Wedisruption ~~cannot~~in ~~guarantee~~the ~~that~~financial ~~any clinical trials will~~markets beand ~~conducted~~may asadversely ~~planned~~impact oreconomies ~~completed on schedule~~worldwide, ifboth ~~at all. A failure~~ of ~~one~~which orcould ~~more~~result ~~clinical~~in ~~trials~~adverse ~~can~~effects ~~occur~~on atour ~~any~~business, ~~stage~~operations ofand ~~testing.~~ability to ~~Events~~raise ~~that may prevent successful or timely completion of clinical development include:~~capital.

●The COVID-19 ~~delays~~pandemic inhas ~~reaching~~caused, orand ~~failing~~may continue to ~~reach~~cause, adelays ~~consensus~~to ~~with~~the ~~regulatory~~development ~~agencies~~of oncertain ~~study~~of ~~design;~~our ●product ~~delays~~candidates. Delays in ~~reaching,~~completing our orclinical ~~failing~~trials are expected to ~~reach~~increase our costs, ~~agreement~~slow onour ~~acceptable~~development ~~terms~~and ~~with~~approval aprocess ~~sufficient~~and ~~number~~could ofnegatively ~~prospective~~impact ~~CROs,~~our ability to commence product sales and ~~clinical~~generate ~~trial~~revenues. ~~sites,~~We ~~the~~have ~~terms~~experienced some level of ~~which~~disruption ~~can~~to beeach ~~subject~~of toour ~~extensive~~current ~~negotiation~~trials. ~~and~~We ~~may~~completed target ~~vary~~enrollment ~~significantly~~in ~~among~~the ~~different~~PROTECT ~~CROs~~study in August 2021 and ~~trial~~expect ~~sites;~~to ●report ~~delays~~top-line results in ~~obtaining~~the ~~required~~second ~~IRB~~half of 2023, orsubject ECto change for any potential interruptions related to COVID-19, ~~approval~~regulatory atdecisions ~~each~~or ~~clinical~~issues ~~trial~~or ~~site;~~other ●interruptions. ~~delays~~We ininitiated ~~recruiting~~the aordesekimab Phase ~~sufficient~~2b ~~number~~trial ofin ~~suitable~~gluten ~~patients~~free todiet ~~participate~~NRCD in ~~our~~August ~~clinical~~2020 ~~trials;~~and ●the pandemic has caused difficulties and delays asin recruitment. As a result of ~~the~~these ~~impact~~delays, ofwe ~~the~~now ~~COVID~~expect to report top-19line ~~pandemic~~results onfrom ~~clinical~~the ~~trial~~PROACTIVE ~~recruitment~~study orby ~~other~~the ~~clinical~~end ~~trial~~of ~~activities;~~2023. ●The ~~imposition~~ongoing effects of athe ~~clinical~~COVID-19 pandemic ~~hold~~have byaffected ~~regulatory~~the ~~agencies,~~PREVAIL-2 ~~IRBs~~study enrollment, orprimarily ~~ECs;~~due ●to ~~failure~~resource byconstraints ~~our~~at ~~CROs,~~the ~~other~~clinical ~~third~~site ~~parties~~level orand ussubdued topatient interest ~~adhere~~in toparticipating ~~contractual,~~in clinical ~~trial,~~trials ~~regulatory~~of orimmune ~~legal~~modulatory ~~requirements;~~agents. ●We ~~failure~~now toexpect ~~perform~~top-line inresults ~~accordance~~of ~~with~~ the ~~FDA’s~~PREVAIL-2 ~~GCP~~study orin ~~applicable~~the second ~~regulatory~~half ~~guidelines~~of ~~in other countries;~~2024.

●Timely enrollment ~~delays~~ in ~~the testing, validation, manufacturing and delivery of sufficient quantities of~~ our ~~product candidates to the~~ clinical ~~sites;~~trials ●is ~~delays~~dependent inupon ~~having~~global ~~patients’~~clinical ~~complete~~trial ~~participation~~sites inwhich amay ~~study~~be oradversely ~~return~~affected ~~for~~by ~~post-treatment~~global ~~follow-up;~~health ●matters, such ~~subjects~~as ~~choosing~~pandemics. anWe ~~alternative~~are ~~treatment~~currently ~~for~~conducting ~~the~~clinical ~~indications~~trials for ~~which~~TZIELD weand ~~are developing~~ our product candidates, ~~or participating~~ in ~~competing~~many ~~clinical~~countries, ~~trials;~~including ●the United ~~clinical~~States, ~~study~~the ~~sites~~European orUnion, ~~patients~~the ~~dropping~~United ~~out~~Kingdom ofand aCanada ~~study;~~and ●may ~~delay~~expand ~~or failure~~ to ~~address~~other ~~any~~geographies. ~~patient~~Many ~~safety~~of ~~concerns~~these ~~that~~regions ~~arise~~in ~~during~~which ~~the~~we ~~course~~operate ofmay continue ato ~~trial;~~be ●affected ~~unanticipated~~by ~~costs~~COVID-19, orwhich ~~increases~~may indelay ~~costs~~or ofotherwise ~~clinical~~adversely ~~trials~~affect ofenrollment ~~our~~in ~~product~~the ~~candidates;~~clinical ●trials ~~occurrence~~ of ~~serious~~TZIELD ~~adverse~~and ~~events associated with the~~ our product ~~candidate~~candidates, ~~that~~as ~~are~~well ~~viewed~~as toadversely ~~outweigh~~impact ~~its~~our ~~potential~~supply ~~benefits;~~chain or ●business ~~changes~~operations ~~in regulatory requirements and guidance that require amending or submitting new clinical protocols~~generally.

WeThe ~~could~~pandemic ~~also~~has ~~encounter~~caused ~~delays~~significant ifdisruptions ain ~~clinical~~the ~~trial~~financial ~~is suspended or terminated by us~~markets, byand ~~the~~may ~~IRBs~~continue orto ~~ECs~~cause ofsuch ~~the~~disruptions, ~~institutions in~~ which ~~such~~could adversely ~~trials~~impact ~~are~~our ~~being~~ability ~~conducted,~~to byraise anadditional ~~independent~~funds ~~Safety~~through ~~Review~~public ~~Board~~offerings ~~for~~or ~~such~~private ~~trial~~placements orand bymay ~~the~~also ~~FDA,~~impact ~~MHRA,~~ the ~~competent~~volatility ~~authorities~~ of ~~the~~our ~~European~~stock ~~Union~~price ~~Member~~and ~~States,~~trading orin ~~other~~our ~~regulatory authorities~~stock. ~~Such~~Moreover, ~~authorities~~it ~~may~~is ~~suspend~~possible orthe ~~terminate~~pandemic awill ~~clinical~~continue ~~trial~~to ~~due~~significantly toimpact aeconomies ~~number~~worldwide, ofwhich ~~factors,~~could ~~including~~result ~~failure~~in toadverse ~~conduct~~effects ~~the~~on ~~clinical~~our ~~trial~~business inand ~~accordance~~operations. ~~with~~Additionally, ~~regulatory~~the ~~requirements~~pandemic orcould ~~our~~negatively ~~clinical~~impact ~~protocols,~~our ~~inspection~~ability ofto ~~the~~execute ~~clinical~~a ~~trial~~successful ~~operations~~launch orof ~~trial~~TZIELD, ~~site~~which bycould ~~the~~impact ~~FDA,~~our ~~MHRA,~~revenue ~~the~~making ~~competent~~potential ~~authorities~~and ofhave ~~the~~other ~~European~~negative ~~Union~~material ~~Member~~adverse ~~States, or other~~impacts ~~regulatory~~on ~~authorities~~our ~~resulting~~business. inThe ~~the~~full ~~imposition~~extent of athe ~~clinical~~impact ~~hold,~~and ~~unforeseen~~effects ~~safety~~of ~~issues~~COVID-19 oron ~~adverse~~our ~~side~~business, ~~effects~~operations, ~~failure to demonstrate a benefit from using a drug~~liquidity, ~~changes~~financial incondition ~~governmental~~and results ~~regulations or administrative actions or lack~~ of ~~adequate~~operations ~~funding~~remain touncertain ~~continue~~at ~~the clinical~~this ~~trial~~time.

~~Product~~We ~~development~~are ~~costs~~completely ~~for~~dependent ~~any~~on ofthird ~~our~~parties ~~product candidates will increase if we have delays in testing or approval or if we need~~ to ~~perform~~manufacture ~~more or~~TZIELD ~~larger clinical trials than planned. Additionally, changes in regulatory requirements~~ and ~~policies may occur and we may need to amend study protocols to reflect these changes. Amendments may require us to resubmit~~ our study protocols to the FDA, comparable foreign regulatory authorities, and IRBs/ECs for reexamination, which may impact the costs, timing or successful completion of that study. If we experience delays in completion of, or if we, the FDA or other regulatory authorities, the IRB, the ECs or other reviewing entities, or any of our clinical trial sites suspend or terminate any of our clinical trials of any of our product candidates, ~~its~~with ~~commercial~~no, ~~prospects may be materially harmed and our ability~~ to ~~generate~~limited ~~product~~redundancies ~~revenues will be delayed. Any delays~~ in ~~completing~~ our ~~clinical trials will increase~~supply ~~our~~chain. ~~costs,~~The ~~slow~~commercialization ~~down our development and approval process and jeopardize our ability to commence product sales and generate revenues. Any~~ of ~~these~~TZIELD ~~occurrences may harm our business, financial condition~~ and ~~prospects significantly. In addition, many of~~ the ~~factors that cause, or lead to, termination or suspension of, or a delay in the commencement or completion of,~~ clinical trials ~~may also ultimately lead to the denial~~ of ~~regulatory~~TZIELD ~~approval of our product candidates. In addition, if one or more clinical trials are delayed, our competitors may be able to bring products to market before we do,~~ and ~~the commercial viability of any of~~ our product candidates could be ~~significantly reduced.~~halted, ~~Clinical~~delayed ~~trial delays could also shorten any periods during which we may have the exclusive right to commercialize our product candidates~~ or ~~allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize~~made ~~our~~less ~~product~~profitable ~~candidates.~~if Inthose ~~addition,~~third ~~any~~parties ~~delays~~fail ~~in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability~~ to ~~commence~~provide ~~product~~us ~~sales~~with ~~and~~sufficient ~~generate~~quantities ~~revenues. Any~~ of ~~these~~TZIELD ~~occurrences may significantly harm our business, financial condition and prospects. In addition, many of the factors that cause,~~ or ~~lead~~fail to, ado ~~delay in~~so ~~the~~at ~~commencement~~acceptable quality levels or ~~completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates~~prices.

We do not currently have, nor do we plan to acquire, the capability or infrastructure to manufacture TZIELD and our product candidates. As a result, we are obligated to rely on contract manufacturers for commercial and clinical supply of TZIELD and clinical supplies of our product candidates.

The facilities used by our contract manufacturers to manufacture TZIELD and any future product candidates that may receive marketing approval must be approved by the FDA, the competent authorities of the European Union Member States, MHRA or other regulatory authorities as part of the NDA or BLA submitted to the FDA or equivalent applications to other relevant regulatory authorities. We are completely dependent on our contract manufacturers for compliance with GMPs for manufacture of both active drug substances and finished drug products. These GMP regulations cover all aspects of the manufacturing, testing, quality control and record keeping relating to TZIELD and our product candidates. If our contract manufacturers do not successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA, the competent authorities of the European Union Member States, MHRA or other regulatory authorities, they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. If the FDA, the competent authorities of the European Union Member States, MHRA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of TZIELD or our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain, and maintain regulatory approval for or market TZIELD or any future product candidates that may receive marketing approval.

Our contract manufacturers are subject to ongoing periodic unannounced inspections by the FDA and corresponding state and foreign agencies for compliance with GMPs and similar regulatory requirements. Although we are responsible for oversight of manufacturing of TZIELD and our product candidates, we do not have control over our contract manufacturers’ compliance with these regulations and standards. Failure by any of our contract manufacturers to comply with applicable regulations could result in sanctions being imposed on us, including fines, injunctions, civil penalties, failure to grant approval to market any of our product candidates, delays, suspensions or withdrawals of approvals, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect our business. In addition, although we have audit and certain other oversight rights under our contracts with our contract manufacturers, we do not have control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. Failure by our contract manufacturers to comply with or maintain any of these standards could adversely affect our ability to develop, obtain or maintain regulatory approval for or market TZIELD or our product candidates.

~~The~~If, ~~outcome~~for ofany ~~preclinical~~reason, ~~studies~~these ~~and~~third ~~early~~parties ~~clinical~~are ~~trials~~unable ~~may~~or ~~not~~unwilling beto ~~predictive of the success of later clinical trials~~perform, ~~and~~we ~~interim results~~may ~~of a clinical trial do~~ not ~~necessarily~~be ~~predict~~able ~~final results. Further, product candidates in later stages of clinical trials may fail~~ to ~~show~~terminate ~~the~~our ~~desired~~agreements ~~safety~~with ~~and~~them, ~~efficacy profile despite having progressed through pre-clinical studies and initial clinical~~to ~~trials. A number of companies in~~ the ~~pharmaceutical~~extent ~~and biotechnology industries have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles~~applicable, ~~notwithstanding promising results in earlier studies,~~ and we ~~cannot~~ bemay ~~certain that we will~~ not ~~face~~be ~~similar~~able ~~setbacks. Additionally, data submitted~~ to ~~regulators~~locate ~~are~~alternative ~~subject~~manufacturers ~~to varying interpretations that could delay, limit~~ or ~~prevent~~formulators ~~agency approval. We cannot assure you that the FDA, EMA, MHRA~~ or ~~comparable foreign~~enter ~~regulatory~~into ~~authorities~~favorable ~~will~~agreements ~~view the results as we do, that the views of different regulatory authorities on our study~~with ~~results~~them and ~~data~~we ~~will~~cannot be ~~consistent~~certain ~~with each other or~~ that any ~~future~~such ~~trials~~third ofparties ~~any of our product candidates~~ will ~~achieve positive results. For example, in the European Union, we~~ have ~~initiated~~ the ~~process~~manufacturing ofcapacity ~~seeking scientific advice from the EMA’s Committee for Medicinal Products for Human Use (“CHMP”), with respect~~ to ~~the~~meet ~~regulatory~~future ~~pathway for teplizumab~~requirements. ~~While~~If these ~~the~~manufacturers ~~guidance~~or ~~provided~~any inalternate ~~scientific~~manufacturer ~~advice procedures do not seek to pre-evaluate the results~~ of ~~studies,~~finished ~~the~~drug ~~initial~~product ~~scientific advice~~experiences ~~letter~~any ~~that~~significant wedifficulties ~~received from CHMP~~ in ~~December~~its ~~2020~~respective ~~suggested that an additional confirmatory study would be necessary to~~manufacturing ~~support~~processes afor ~~marketing~~our ~~authorization~~drug ~~application~~substance ~~(“MAA”),~~or ~~for~~finished ~~the~~drug ~~use~~products ofor ~~PRV-031~~should incease ~~at-risk~~doing ~~individuals.~~business ~~We plan to engage~~ with ~~CHMP~~us, towe ~~further~~could ~~elucidate~~experience ~~the~~significant ~~disease-modifying effect of PRV-031 supported by study data~~ interruptions in the ~~context~~supply of ~~clinical~~TZIELD ~~management of~~or ~~T1D, specifically in at-risk individuals. If, however, the EMA determines that~~ our ~~current~~product ~~PRV-031~~candidates ~~data package is insufficient to support an MAA for at-risk individuals and requires additional studies~~ or ~~data,~~may ~~such~~not ~~determination~~be ~~would~~able ~~delay or prevent approval of PRV-031 in the European Union and European Economic Area (“EEA”) for this indication. We have independently engaged with the MHRA~~ to ~~discuss~~create a ~~potential~~supply ~~regulatory~~of ~~path~~TZIELD ~~for~~or ~~PRV-031~~our inproduct ~~the~~candidates ~~United Kingdom.~~at ~~We filed for and received in July 2021 an Innovation Passport for teplizumab in the UK~~all. ~~The Innovation Passport is the mandated entry point to the ILAP in the United Kingdom to facilitate approval of and market~~Were ~~access to an innovative medicine. Additionally,~~ we ~~have engaged the MHRA in a scientific advice procedure~~ to ~~discuss,~~encounter ~~among~~manufacturing ~~other topics~~issues, ~~ILAP.~~our ~~The~~ability discussions with and feedback from the MHRA in the United Kingdom, ILAP partner agencies such as the NICE and the Scottish Medicines Consortium will help us evaluate the possible regulatory and market access paths forward in the UK for teplizumab. On April 20, 2021 we received a scientific advice letter from the MHRA on matters relating to ~~the~~produce ~~therapeutic position, non-clinical and clinical characterization of PRV-031. We have started~~ a ~~preliminary~~sufficient ~~discussion~~supply ~~with MHRA and its ILAP partners in the development~~ of aany ~~TDP and identification~~ of ~~the~~TZIELD ~~relevant~~or ~~toolkits~~our toproduct ~~support~~candidates ~~approval~~might ~~and market access of teplizumab in the~~be ~~United~~negatively ~~Kingdom~~affected. ~~Further~~Our ~~engagement~~inability ~~with~~to ~~the~~coordinate ~~MHRA and its ILAP partners is planned in 2022. There is no guarantee that a similar position would be taken by~~ the ~~EMA~~efforts inof ~~the~~our ~~European~~third-party ~~Union.~~manufacturers, ~~The~~or ~~advice given by~~ the ~~MHRA~~lack ~~makes~~of ~~clear~~capacity ~~that~~available itat ~~is not legally~~our ~~binding with regard to any future MAA for PRV~~third-~~031~~party manufacturers, ~~nor~~could ~~can~~impair itour beability ~~taken~~to assupply ~~indicative of~~ any ~~future agreed position. The MHRA indicated in its letter that it is~~ of ~~the~~TZIELD ~~view that there is an unmet medical need for a treatment that delays~~ or ~~prevents progression~~our toproduct ~~T1D~~candidates in at~~-risk~~ ~~patients~~required levels. ~~The~~Because ~~MHRA did not request another confirmatory study to be carried out, acknowledging that~~of the ~~indication~~significant ~~being~~regulatory ~~sought~~requirements ~~is rare and~~ that we may have difficulties recruiting sufficient numbers of subjects for such a study. However, the MHRA has considered that an MAA may benefit from additional supplementary information on patient preference. Such additional information would ~~seek~~need to ~~strengthen~~satisfy ~~the~~in ~~argument~~order ~~that PRV-031 would benefit the at-risk patients according~~ to ~~the proposed~~qualify ~~label~~a ~~claim.~~new ~~The~~active ~~MHRA~~drug ~~also~~substances ~~considered~~or ~~that~~finished ~~reliance on one pivotal study to obtain a marketing authorization ought to meet~~drug ~~the~~products ~~criteria~~manufacturer, ~~described~~if inwe ~~the~~face ~~EMA/CPMP~~these ~~guidance~~or ~~entitled~~other ~~“Points~~difficulties ~~to consider on application~~ with ~~(i)~~our ~~meta-analyses~~current ~~and (ii) one pivotal study” (CPMP/EWP/2330/99)~~ manufacturers, ~~which~~we ~~for~~could ~~the~~experience ~~time~~significant ~~being, is still relevant to applications made~~ interruptions in the ~~United Kingdom.~~supply Weof ~~also~~TZIELD ~~plan~~or ~~additional engagements with EMA and other European stakeholders in 2022; however, these stakeholders may not agree with~~ our ~~views~~product oncandidates ~~our~~if ~~teplizumab~~we ~~data~~decided ~~package~~to ortransfer ~~our~~the ~~view~~manufacture of ~~the~~TZIELD ~~relevant~~or ~~medical need in at-risk populations and~~ our ~~efforts may~~product ~~not~~candidates ~~lead~~ to ~~favorable positions~~ one or ~~decisions~~more ~~relating~~alternative tomanufacturers orin an ~~approval~~effort ofto ~~teplizumab~~deal bywith the ~~MHRA~~manufacturing ~~or a positive opinion by the EMA and a subsequent marketing authorization by the European Commission~~issues. ~~Even~~Additionally, iffailing ~~PRV-031~~to isobtain ~~approved~~sufficient ~~in United Kingdom and/or in the European~~supply ~~Union,~~of ~~the~~TZIELD ~~MHRA~~ or ~~EMA/European~~our ~~Commission, may limit the indication for which the~~ product ~~may be marketed~~candidates, ~~require~~due ~~extensive~~to ~~warnings~~manufacturing ~~on the product labeling~~ or ~~require~~other ~~expensive and time-consuming additional clinical trials or reporting as conditions of an approval~~issues, ~~amongst other requirements which we~~ may orlead ~~may not be able~~ to ~~comply~~ ~~with.~~regulatory ~~Even~~delays ~~if teplizumab were to be granted a marketing authorization, we could not guarantee that the payers~~ and ~~health technology~~other ~~agencies~~issues inwhich ~~the~~may ~~United Kingdom and the Member States of the European Union would accept the therapeutic value and/or~~negatively ~~cost-effectiveness~~affect ofour ~~teplizumab for it to be adopted for clinical use in the respective national health systems~~business.

WeAny ~~have~~manufacturing ~~conducted~~problem or the loss of a contract manufacturer could be disruptive to our operations and ~~are~~result ~~conducting~~in ~~clinical~~lost ~~trials~~sales. ~~outside~~Additionally, we rely on third parties to supply the ~~United~~raw ~~States~~materials ~~and~~needed ~~anticipate~~to ~~conducting~~manufacture ~~additional~~TZIELD. ~~clinical~~Any ~~trials~~reliance ~~outside~~on suppliers may involve several risks, ~~the~~including ~~United~~a ~~States~~potential inability to obtain critical materials and reduced control over production costs, delivery schedules, reliability and ~~the~~quality. ~~FDA~~Any ~~may~~unanticipated ~~not~~disruption ~~accept~~to ~~data~~a ~~from~~contract ~~such~~manufacturer ~~trials~~caused by problems at suppliers could delay shipment of TZIELD, increase our cost of goods sold and result in lost sales.

We ~~are~~cannot ~~currently~~guarantee ~~conducting~~that ~~clinical trials for~~ our ~~product~~future ~~candidates~~manufacturers ~~in countries outside of the United States~~ and wesuppliers ~~anticipate that we~~ will ~~conduct~~be ~~additional~~able ~~clinical~~to ~~trials~~reduce ~~in countries outside~~ the ~~United~~costs ~~States.~~of ~~Although~~commercial ~~the~~scale ~~FDA~~manufacturing ~~may~~of ~~accept data from clinical trials~~TZIELD ~~conducted~~or ~~outside~~our ~~the~~product ~~United~~candidates ~~States,~~over ~~acceptance of such study data by the FDA is subject to certain conditions~~time. ~~For~~If ~~example,~~ the ~~clinical trial~~commercial-scale ~~must~~manufacturing becosts ~~conducted~~of inTZIELD ~~accordance~~or ~~with~~our ~~GCP~~product ~~requirements~~candidates ~~and~~are ~~the~~higher ~~FDA must be able to validate the data from the clinical trial through~~than anexpected, ~~onsite~~these ~~inspection~~costs ifmay itsignificantly ~~deems~~impact ~~such~~our ~~inspection~~operating ~~necessary~~results. ~~Where~~In ~~data~~order ~~from foreign clinical trials are intended~~ to ~~serve~~reduce ~~as the sole basis for marketing approval in the United States~~costs, ~~the~~we ~~FDA~~may ~~will~~need ~~not approve the application on the basis of foreign data alone unless those data are considered applicable~~ to ~~the~~develop ~~United States patient population~~ and ~~United~~implement process ~~States~~improvements. ~~medical practice~~However, ~~the~~in ~~clinical~~order ~~trials were~~to ~~performed~~do ~~by clinical investigators of recognized competence~~so, ~~and~~we ~~the~~will ~~data is considered valid without the~~ need ~~for an on-site inspection by the FDA or~~, iffrom ~~the~~time ~~FDA considers such an inspection~~ to ~~be necessary~~time, ~~the FDA is able~~ to ~~validate~~notify ~~the data through an on-site inspection~~ or ~~other~~make ~~appropriate~~submissions ~~means.~~with Inregulatory ~~addition~~authorities, and ~~such~~the ~~clinical~~improvements ~~trials~~may ~~would~~ be subject to ~~the~~approval ~~applicable~~by ~~local~~such ~~laws~~regulatory ~~of the foreign jurisdictions where the clinical trials are conducted~~authorities. AWe ~~description~~cannot ofbe ~~any~~sure ~~studies~~that ~~related~~we towill ~~overdosage~~receive isthese ~~also~~necessary approvals ~~required,~~or ~~including~~that ~~information~~these ~~on dialysis,~~approvals ~~antidotes,~~will orbe ~~other~~granted ~~treatments,~~in ifa ~~known~~timely fashion. ~~There~~We ~~can~~also becannot noguarantee ~~assurance~~that ~~the~~we ~~FDA~~ will ~~accept~~be ~~data~~able ~~from~~to ~~clinical~~enhance ~~trials~~and ~~conducted~~optimize ~~outside~~output ofin ~~the~~our ~~United~~commercial ~~States~~manufacturing process. If ~~the~~we ~~FDA~~cannot ~~does~~enhance ~~not~~and ~~accept~~optimize ~~any such data~~output, itwe ~~would~~may ~~likely~~not ~~result in the need for additional clinical trials, which would~~ be ~~costly~~able ~~and~~to ~~time-consuming~~reduce ~~and delay aspects of~~ our ~~development~~costs ~~plan~~over time.

If the contract manufacturers we use fail to comply with their TZIELD contractual obligations to us, or they fail to comply with applicable FDA regulations and requirements, we may be required to enter into new statements of work or other agreements with CMOs and incur additional costs to increase our commercial supply of TZIELD and if we are not able to do so successfully, on commercially reasonable terms and in a timely manner our business may be negatively and materially impacted.

Each of our contract manufacturers for TZIELD is a single source supplier. If any of the contract manufacturers in the supply chain for TZIELD experiences a delay or is unable to deliver the products or components necessary to manufacture the subject product, our ability to produce the affected product would be materially impaired.

Although we believe we currently have adequate supply to support TZIELD clinical and commercial supply demands, and through existing contracts with our CMOs, we have the ability to enter into new statements of work to increase our existing supply as needed, we do not have pre-set ongoing commitments from AGC Biologics for commercial supply of TZIELD or with any other contract manufacturers of our product candidates. Our current agreement with AGC Biologics for the supply of TZIELD as well as agreements with other contract manufacturers operate on a statement of work basis. If we are unable to reach agreement with AGC Biologics on the production of TZIELD for commercial use, or if we are unable to maintain commercial relationships with contract manufacturers, we may not have sufficient supply of TZIELD to fulfill customer orders or sufficient supply for our clinical trials. Identifying, qualifying and transferring manufacturing to secondary sources is a time-consuming and expensive process and there is no guaranty that we would be able to reach an agreement with a secondary source on acceptable terms, which could have a material adverse effect on our sales, results or operations and financial condition.

~~Risks~~Our ~~inherent~~experience inmanufacturing ~~conducting~~TZIELD ~~international~~and ~~clinical~~our ~~trials~~other ~~include~~product candidates is limited, ~~but~~and if the FDA requires any changes to our manufacturing process for our products, we are ~~not~~dependent ~~limited~~on our CMOs and service providers to: timely and compliantly deliver on their contractual obligations. If they fail to do so, this can materially and adversely impact our commercial product supply, product development plans and timelines. Additionally, if we encounter any manufacturing issues, we may experience delays or disruptions to our commercialization of TZIELD or our ongoing product development efforts for our product candidates, including our ongoing and planned clinical trials.

●We have ~~foreign~~limited ~~regulatory~~experience ~~requirements~~manufacturing ~~that~~TZIELD ~~could~~and ~~burden~~we orcurrently ~~limit~~rely ~~our~~on ~~ability~~single-source, third-party manufacturers to ~~conduct~~supply ~~our~~us ~~clinical~~with ~~trials;~~drug substance ●and ~~administrative~~drug ~~burdens~~product. We historically relied upon an existing supply of ~~conducting~~TZIELD drug substance produced by Eli Lilly to manufacture drug product at our third-party manufacturer for use in our clinical trials ~~under~~of ~~multiple~~TZIELD. ~~foreign~~We ~~regulatory~~have ~~schema;~~entered ●into ~~foreign~~agreements ~~currency~~with ~~fluctuations~~our ~~which~~third-party manufacturers ~~could~~to ~~negatively~~manufacture ~~impact~~TZIELD or for our ~~financial~~commercial ~~condition~~and ~~since~~clinical ~~certain~~supply ~~payments~~needs. ~~are~~We ~~paid~~believe insupplies ~~local~~of ~~currencies;~~TZIELD ●sufficient ~~manufacturing,~~to ~~customs,~~supply the ~~shipment~~PROTECT study and ~~storage~~to ~~requirements;~~fulfill ●our ~~cultural~~initial ~~differences~~commercial launch needs in ~~medical~~the ~~practice~~United ~~and~~States, ~~clinical~~have ~~research;~~already been manufactured by our third-party manufacturers and ●have ~~diminished~~the ~~protection~~ability to enter into new statements of ~~intellectual~~work ~~property~~with inour ~~some~~manufacturers ~~countries~~to increase our TZIELD supply.

~~Biologics~~The ~~carry~~FDA ~~unique~~has ~~risks~~included CMC post-marketing requirements for TZIELD that relate to developing improved assays for release and/or ~~uncertainties,~~stability testing ~~which~~and continuing to evaluate the root cause for quality differences that could ~~have~~account for ACG and Lilly PK differences. If our CMOs and vendors fail to support us in successfully executing our CMC and other post-marketing commitments or we are not able to comply with the FDA’s post-marketing commitments, including requirements for a ~~negative~~pediatric ~~impact~~stage on2 ~~future~~study, ~~results~~a registry for long term safety data and delivery of ~~operations~~AGC and Eli Lilly safety data from the PROTECT study that is positive, the FDA could require us to conduct additional studies or require updates to our label, which would require additional time, expenses, and resources and negatively impact the supply of TZIELD for our clinical and commercial needs and our business.

~~The~~Changes ~~successful~~in ~~discovery,~~product ~~development,~~candidate manufacturing ~~and~~or ~~sale~~formulation of biologics is a long, expensive and uncertain process. There are unique risks and uncertainties with biologics. For example, access to and supply of necessary biological materials, such as cell lines, may beresult limited and governmental regulations restrict access to and regulate the transport and use of such materials. In addition, the development, manufacturing and sale of biologics is subject to regulations that are often more complex and extensive than the regulations applicable to other pharmaceutical products. Manufacturing biologics, especially in ~~large~~additional ~~quantities,~~costs is often complex and may require the use of innovative technologies. Such manufacturing also requires facilities specifically designed and validated for this purpose and sophisticated quality assurance and quality control procedures. Biologics are also frequently costly to manufacture because production inputs are derived from living animal or ~~plant material, and some biologics cannot be made synthetically~~delay. In addition, after receiving product approval, the FDA and other regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing the results of applicable tests at any time. Under some circumstances, the FDA and other regulatory authorities may require that we not distribute a lot until the agency authorizes its release. Failure to successfully discover, develop, manufacture and sell biologics could adversely impact our business and results of operations.

IfAs weproduct candidates are ~~not~~developed ~~able~~through preclinical studies to ~~obtain~~late-stage ~~any~~clinical ~~required~~trials ~~regulatory~~towards ~~approvals~~approval ~~for~~and ~~our~~commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation, are altered in an effort to optimize processes. During the course of a development program, sponsors may also change the contract manufacturers used to produce the product candidates. Also, if we, ~~will~~through ~~not~~third-parties, engage in the scale-up of manufacturing, we may encounter unexpected issues relating to the manufacturing process or the quality, purity and stability of the product, and we may be ~~able~~required to ~~commercialize~~refine or alter our manufacturing processes to address these issues. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our product candidates to perform differently and affect the results of clinical trials. Such changes may also require additional testing, notification or approval by the FDA, the competent authorities of the European Union Member States, MHRA or other regulatory authorities. This could delay completion of clinical trials; require the conduct of bridging clinical trials or studies, or the repetition of one or more clinical trials; increase clinical trial costs; delay approval of our product candidates and jeopardize our ability to commence ~~generate~~product ~~revenue~~sales ~~will~~and begenerate ~~limited~~revenue.

~~The~~We ~~research,~~may ~~testing,~~encounter ~~manufacturing,~~substantial ~~labeling,~~delays packaging, storage, approval, sale, marketing, advertising and promotion, pricing, export, import and distribution of drug products are subject to extensive regulation by the FDA, EMA, MHRA and other regulatory authorities in ~~the~~ ~~United~~completing ~~States, European Union, United Kingdom and other countries, where regulations differ from country to country. We are not permitted to market~~ our ~~product~~ongoing ~~candidates~~clinical astrials ~~prescription pharmaceutical products in the United States until we receive approval of a New Drug Application (“NDA”),~~ or ~~BLA~~starting ~~from the FDA, or in~~ any ~~foreign~~new ~~countries until we receive the requisite approval from such countries. In the United States, the FDA generally requires the completion of~~ clinical trials of each drug to establish its safety and efficacy and extensive pharmaceutical development to ensure its quality before an NDA or a BLA is approved. Regulatory authorities in other jurisdictions impose similar requirements. Of the large number of drugs in development, ~~only~~which ~~a small percentage result~~ in ~~the~~turn ~~submission~~may ~~of an NDA~~require or a BLA to the FDA or other regulatory authorities and even fewer are eventually approved for commercialization. Changes in regulatory approval policies during the development period, changes in or the enactment of additional ~~statutes or regulations~~costs, orwhich ~~changes~~could innegatively regulatory review for a submitted product application may cause delays in the approval or rejection of an application. We have only limited experience in filing the applications necessary to gain regulatory approvals and ~~expect~~materially toimpact rely on consultants and third party CROs with expertise in this area to assist us in this process. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities and grant of manufacturing authorizations and Good Manufacturing Practices (“GMP”) certificates by, the regulatory authorities. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. If our development efforts for our product candidates, including regulatory approval, are not successful for their planned indications, our business ~~will be materially adversely affected~~. ~~Our success depends on the receipt of regulatory approval and the issuance of such regulatory approvals is uncertain and subject to a number of risks, including the following:~~

●Clinical testing ~~the~~is ~~results~~expensive, oftime-consuming ~~our~~and uncertain as to outcome. We cannot guarantee that any clinical trials ~~may~~will ~~not~~ be ~~satisfactory~~conducted as planned or ~~may~~completed ~~not~~on ~~meet~~schedule, ~~the~~if ~~level~~at all. A failure of ~~statistical~~one or more clinical ~~significance~~trials ~~required~~can byoccur ~~the~~at ~~FDA,~~any ~~EMA/European~~stage ~~Commission,~~of ~~MHRA~~testing. Events that may prevent successful or ~~other~~timely ~~regulatory~~completion ~~agencies~~of ~~for~~clinical ~~marketing~~development ~~approval;~~include:

	●	delays in reaching, or failing to reach, a consensus with regulatory agencies on study design;
	●	delays in reaching, or failing to reach, agreement on acceptable terms with a sufficient number of prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

● ~~the~~delays ~~dosing~~in ofobtaining ~~our~~required ~~product~~IRB, ~~candidates~~or EC, approval in athe ~~particular~~country where the clinical trial ~~may~~will ~~not~~ be ~~at an optimal level~~conducted; ● wedelays ~~may~~in berecruiting ~~required~~a tosufficient ~~provide~~number ~~additional~~of ~~analysis~~suitable orpatients ~~data~~to ~~for~~participate ~~already~~in ~~completed~~our clinical ~~studies, or conduct additional studies~~trials; ● ~~the~~delays ~~FDA,~~as ~~EMA,~~a ~~MHRA~~result orof ~~comparable~~the ~~foreign~~impact ~~regulatory~~of ~~authorities~~the ~~may~~COVID-19 ~~require~~pandemic uson toclinical ~~obtain~~trial ~~clearance,~~recruitment ~~CE marking~~ or ~~approval~~other ofclinical ~~companion~~trial ~~diagnostic tests~~activities; ● ~~the~~imposition ~~FDA,~~of ~~EMA,~~a ~~MHRA~~clinical orhold ~~comparable~~by ~~foreign~~ regulatory ~~authorities~~agencies, ~~may~~IRBs, ~~disagree~~or onECs; ~~the~~● ~~design~~failure orby ~~implementation of~~ our ~~clinical trials~~CROs, ~~including~~other ~~the~~third ~~methodology~~parties ~~used~~or inus ~~our~~to ~~studies,~~adhere ~~our~~to ~~chosen endpoints~~contractual, ~~our~~clinical ~~statistical analysis~~trial, regulatory or ~~our~~legal ~~proposed product indication~~requirements; ● ~~our~~ failure to ~~demonstrate~~perform toin ~~the~~accordance ~~satisfaction~~with of the FDA,’s ~~EMA,~~GCP ~~MHRA~~ or ~~comparable~~applicable regulatory ~~authorities~~guidelines ~~that~~in aother ~~product~~countries; ~~candidate~~● isdelays ~~safe~~in ~~and~~the ~~effective~~testing, ~~for~~validation, ~~its~~manufacturing ~~proposed~~and ~~indication;~~delivery ●of wesufficient ~~may~~quantities ~~fail~~of toour ~~demonstrate~~product ~~that~~candidates ato ~~product~~the ~~candidate’s~~ clinical ~~benefits~~sites; ~~outweigh~~● ~~its~~delays ~~safety~~in ~~risks;~~having ●patients’ ~~immunogenicity~~complete ~~might~~participation ~~affect~~in a ~~product~~study ~~candidate~~or ~~efficacy~~return ~~and/or~~for ~~safety~~post-treatment follow-up; ● ~~the~~subjects ~~FDA,~~choosing ~~MHRA,~~an alternative treatment for the ~~competent~~indications ~~authorities~~for ofwhich ~~the~~we ~~European~~are ~~Union~~developing ~~Member~~our ~~States~~product candidates, or ~~comparable~~participating ~~foreign~~in ~~regulatory~~competing ~~authorities~~clinical ~~may~~trials; ~~disagree~~● ~~with~~clinical ~~our~~study ~~interpretation~~sites or patients dropping out of ~~data~~a ~~from~~study; ~~nonclinical~~● ~~studies~~delay or ~~clinical~~failure ~~trials;~~to ●address ~~the~~any ~~FDA,~~patient ~~MHRA,~~safety ~~the~~concerns ~~competent~~that ~~authorities~~arise ofduring the ~~European~~course ~~Union~~of ~~Member~~a ~~States~~trial; or● ~~comparable~~unanticipated ~~foreign~~costs ~~regulatory~~or ~~authorities~~increases ~~may~~in ~~fail~~costs toof ~~approve~~clinical ~~the~~trials ~~manufacturing~~of ~~processes~~our orproduct ~~facilities~~candidates; ● occurrence of ~~third-party~~serious ~~manufacturers~~adverse events associated with ~~whom~~the weproduct ~~contract~~candidate ~~for~~that ~~clinical~~are ~~and~~viewed ~~commercial~~to ~~supplies~~outweigh its potential benefits; or ● ~~there may be~~ changes in ~~the~~regulatory ~~approval~~requirements ~~policies~~and orguidance ~~regulations~~ that ~~render~~require ~~our~~amending ~~nonclinical~~or ~~and~~submitting new clinical ~~data insufficient for approval~~protocols.

~~Additionally,~~We ~~even~~could ifalso weencounter ~~obtain~~delays ~~regulatory~~if ~~approval~~a ~~for~~clinical ~~one~~trial ~~indication, there~~ is nosuspended ~~guarantee~~or weterminated ~~will~~by ~~be able to gain regulatory approval for additional indications. For example~~us, weby ~~intend to initially seek regulatory approval for our CVB vaccine product candidate for~~ the ~~prevention~~IRBs ~~of acute CVB infection. The results of longitudinal studies demonstrating the connection between CVB and T1D~~ or ~~celiac~~ECs ~~disease will be necessary to expand the indicated use~~ of ~~this vaccine to T1D. These studies must be completed and submitted to~~ the ~~FDA,~~countries ~~MHRA~~in orwhich ~~EMA~~such ~~prior to receiving~~trials ~~approval~~are inbeing ~~the United States~~conducted, ~~United~~by ~~Kingdom~~an orindependent ~~European~~Safety ~~Union~~Review toBoard ~~market the CVB vaccine~~ for ~~additional indications~~ such astrial ~~prevention of~~or ~~T1D.~~by ~~Such studies will be costly and time consuming and may not demonstrate to~~ the FDA’s, MHRA’s, ~~or EMA’s satisfaction~~ the ~~connection~~competent ~~between~~authorities ~~the~~of ~~CVB virus and~~ the ~~onset~~European Union ofMember ~~T1D~~States, or ~~celiac~~other ~~disease. Failure or delay in obtaining~~ regulatory ~~approval~~authorities. ~~for~~Such ~~our product~~authorities ~~candidates~~may ~~for~~suspend ~~the foregoing,~~ or ~~any~~terminate ~~other~~a ~~reasons,~~clinical ~~will~~trial ~~prevent~~due orto ~~delay~~a usnumber ~~from~~of ~~commercializing our product candidates~~factors, ~~and~~ ~~our~~including ~~ability~~failure to ~~generate~~conduct ~~revenue~~the ~~will~~clinical betrial ~~materially~~in ~~impaired.~~accordance Wewith ~~cannot~~regulatory ~~guarantee~~requirements ~~that~~or ~~regulators will agree with~~ our ~~assessment~~clinical ofprotocols, ~~the results~~inspection of the clinical ~~trials~~trial weoperations ~~have conducted~~ or ~~intend~~trial tosite ~~conduct~~by in the ~~future~~FDA, orMHRA, ~~that~~the ~~such~~competent ~~future~~authorities ~~trials~~of ~~will~~the beEuropean ~~successful.~~Union ~~The FDA,~~Member ~~EMA~~States, ~~MHRA~~or ~~and~~ other ~~regulators~~regulatory authorities ~~have~~resulting ~~substantial discretion~~ in the ~~approval~~imposition ~~process~~of ~~and~~a ~~may~~clinical ~~refuse~~hold, tounforeseen ~~accept~~safety ~~any~~issues ~~application~~ or ~~may decide~~adverse ~~that~~side ~~our~~effects, ~~data~~failure isto ~~insufficient~~demonstrate a ~~for~~benefit ~~approval~~from ~~and~~using ~~require~~a ~~additional~~drug, ~~clinical~~changes ~~trials,~~in orgovernmental ~~pre-clinical~~regulations or ~~other~~administrative ~~studies.~~actions Inor ~~addition, varying~~lack ~~interpretations~~ of ~~the~~adequate ~~data~~funding ~~obtained~~to ~~from~~continue ~~pre-~~the clinical ~~and clinical testing could delay, limit or prevent regulatory approval of our product candidates~~trial.

~~The~~Product development costs for any of our product candidates will increase if we have delays in testing or approval or if we need to perform more or larger clinical trials than planned. Additionally, changes in regulatory requirements and policies may occur and we may need to amend study protocols to reflect these changes. Amendments may require us to resubmit our study protocols to the FDA, ~~EMA~~comparable foreign regulatory authorities, ~~MHRA~~and IRBs/ECs for reexamination, which may impact the costs, timing or ~~comparable~~successful ~~foreign~~completion of that study. If we experience delays in completion of, or if we, the FDA or other regulatory authorities, ~~could~~the ~~require~~IRB, the ~~clearance~~ECs or other reviewing entities, CEor ~~marking~~any of our clinical trial sites suspend or terminate any of our clinical trials of any of our product candidates, its commercial prospects may be materially harmed and our ability to generate product revenues will be delayed. Any delays in completing our clinical trials will increase our costs, slow down our development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of athese ~~companion~~occurrences ~~diagnostic~~may harm our business, financial condition and prospects significantly. In addition, many of the factors that ~~device~~cause, ~~for~~or ~~teplizumab~~lead asto, termination or suspension of, or a ~~post-marketing~~delay ~~commitment~~in the commencement or ~~otherwise~~completion of, clinical trials may also ultimately lead to the denial of regulatory approval, or pricing and reimbursement approval, of our product candidates. In addition, if one or more clinical trials are delayed, our competitors may be able to bring products to market before we do, and the commercial viability of any of our product candidates could be significantly reduced. Clinical trial delays could also shorten any periods during which we may ~~require~~have the ~~substantial~~exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which could impair our ability to successfully commercialize our product candidates. In addition, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenues. Any of these occurrences may significantly harm our business, financial ~~resources~~condition and ~~could~~prospects. ~~delay~~In addition, many of the factors that cause, or ~~prevent~~lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval, or pricing and reimbursement approval, of ~~teplizumab~~our product candidates.

The FDA has previously communicated that it (i) acknowledges that the diagnosis stage 2 T1D may be well understood to future prescribers of teplizumab, and therefore, specification of autoantibody testing in the labeling may not be required for the safe and effective use of teplizumab and (ii) is continuing to discuss internally the requirement for a companion diagnostic(s) for teplizumab, and given these uncertainties, we should consider seeking additional advice from the agency on the process of companion diagnostic development, as it remains possible it will be required as a post-marketing commitment. Our position is that a companion diagnostic should not be required for the use of teplizumab in at-risk individuals based upon, among other reasons, (i) relevant FDA precedent and guidance, (ii) the fact that the presence of autoantibodies is supportive, but not sufficient, for a diagnoses of stage 2 T1D and (iii) the commercial availability of FDA-cleared tests or Clinical Laboratory Improvement Amendments, licensed laboratory-developed tests to identify T1D, which the teplizumab final label can direct physicians to use.

~~Should~~We ~~the FDA, EMA, MHRA or comparable foreign regulatory authorities disagree with us and require the use of a companion diagnostic, we~~ may ~~face~~ ~~delays~~not orbe ~~obstacles~~successful in ~~obtaining~~our approval for teplizumab, as the FDA or other regulatory authorities may take the position that a companion diagnostic device is required prior to granting approval of teplizumab. In addition, if a companion diagnostic is required, we may be dependent on the cooperation and efforts ~~of third-party collaborators~~ to develop ~~one~~and orobtain ~~more companion diagnostics, which generally require~~ FDA ~~clearance or~~ approval, orfor ~~equivalent~~TZIELD ~~approval in other jurisdictions. We and our potential future collaborators may encounter difficulties in developing, validating or obtaining clearance/approval/CE marking~~ for ~~such~~additional ~~companion diagnostics~~indications. Any delay or failure by us or our potential future collaborators to develop or obtain regulatory clearance, CE marking or approval of such companion diagnostics, if necessary, may delay or prevent approval of teplizumab, PRV-101 or our other product candidates.

~~Even~~The ifFDA weapproved ~~obtain~~TZIELD ~~marketing~~as ~~approval~~a ~~for~~treatment ~~any~~indicated to delay the onset of ~~our~~Stage ~~product~~3 ~~candidates,~~T1D wein ~~will~~adults beand ~~subject~~pediatric topatients aged ~~ongoing~~8 ~~obligations~~years and ~~continued~~older ~~regulatory review,~~with ~~which~~Stage ~~may~~2 ~~result~~T1D. We do not anticipate obtaining FDA approval for TZIELD in ~~significant~~additional indications without additional ~~expense~~clinical data. ~~Additionally,~~Additional ~~our~~clinical ~~product~~trials ~~candidates~~will ~~could~~require betime ~~subject~~and toexpense, ~~labeling~~ and ~~other~~these trials may fail to generate results ~~restrictions~~that ~~and~~demonstrate ~~withdrawal~~to ~~from~~the satisfaction of the ~~market~~FDA that TZIELD is safe and effective in additional indications. Even if we obtain FDA approval for additional indications, we may not be ~~subject~~able to ~~penalties~~obtain ifpricing and reimbursement approval for these indications. If we are ~~fail~~unable to ~~comply~~expand ~~with~~the ~~regulatory~~indications ~~requirements~~for oruse ~~if we~~of ~~experience~~TZIELD, ~~unanticipated~~our ~~problems~~business ~~with~~and ~~our~~prospects ~~product~~could ~~candidates~~be adversely affected.

~~Even~~We ~~if we obtain regulatory approval for any of our product candidates for an indication, the FDA, EMA/European Commission, MHRA or foreign equivalent~~ may ~~still~~never ~~impose~~receive ~~significant restrictions on their indicated uses or marketing or the conditions of~~ approval ~~or impose ongoing requirements for potentially costly and time-consuming patient registries or post-approval studies, including Phase 4 clinical trials, post-market surveillance~~ to ~~monitor~~commercialize ~~safety~~TZIELD ~~and~~outside ~~efficacy~~of ~~and a Risk Evaluation and Mitigation Strategy (“REMS”) or other risk minimization measures. If~~ the ~~FDA concludes a REMS is needed in the~~ United States, the sponsor of the NDA or BLA must submit a proposed REMS; the FDA will not approve the NDA or BLA without an approved REMS, if required. A REMS could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA may also require a REMS for an approved product when new safety information emerges. Any such post-marketing requirements may negatively impact our commercialization plans or require us to raise additional capital to support the execution of such requirements. Additionally, if we face challenges or are unable to comply with post-marketing requirements, we may not be able to maintain marketing approval, or we may decide to abandon the program.

~~Our product~~We ~~candidates~~have ~~will~~not ~~also~~received beregulatory ~~subject~~approval to ~~ongoing~~commercialize ~~regulatory~~TZIELD ~~requirements~~in ~~governing~~ the ~~manufacturing,~~European ~~labeling~~Union, ~~packaging,~~United ~~storage,~~Kingdom or in any other countries outside ~~distribution,~~the ~~safety~~United ~~surveillance,~~States. ~~advertising~~However, ~~promotion,~~the ~~recordkeeping~~regulatory ~~and~~framework ~~reporting~~in ofthese ~~adverse~~countries ~~events~~provides ~~and~~a ~~other~~pathway ~~post-market~~for ~~information.~~an unauthorized medicinal product to be ~~These~~supplied ~~requirements~~in ~~include~~response ~~registration~~to ~~with~~a bona fide unsolicited request of a healthcare professional in order to fulfil the ~~FDA~~special needs of the patient(s) under his/her care, asand ~~well~~this is commonly known as ~~continued~~named ~~compliance~~patient ~~with~~supply. ~~current~~Given ~~GCP~~that ~~regulations~~no ~~for~~authorized ~~any~~methods ~~clinical~~of ~~trials~~treatment are available for ~~that~~Stage 2 of T1D, we ~~conduct~~have ~~post~~relied on the regulatory framework for named-patient supply for early patient access to TZIELD. Obtaining and maintaining regulatory approval, or pricing and ~~any~~reimbursement approval, ~~additional~~of ~~requirements~~our product candidates in ~~other~~one ~~jurisdictions.~~jurisdiction Indoes ~~addition,~~not ~~manufacturers~~guarantee ofthat ~~drug~~we ~~products~~will ~~and~~be able to obtain or maintain equivalent approvals ~~their~~in ~~facilities~~any ~~are~~other ~~subject~~jurisdiction, tobut ~~continual~~a ~~review~~failure ~~and~~or ~~periodic~~delay ~~inspections~~in byobtaining regulatory approval in one jurisdiction may have a negative effect on the ~~FDA~~regulatory approval process in others. Approval procedures vary among jurisdictions and ~~other~~can ~~regulatory~~involve ~~authorities~~requirements ~~for~~and ~~compliance~~administrative ~~with~~review ~~current~~periods ~~GMP~~different ~~requirements~~from ~~relating~~those toin ~~manufacturing,~~the ~~quality~~United ~~control~~States, ~~quality~~including ~~assurance~~additional ~~and~~preclinical ~~corresponding~~studies ~~maintenance~~or ofclinical ~~records~~trials, as clinical trials ~~and~~conducted ~~documents~~in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions.

~~With~~For example, in the European Union, we have initiated the process of seeking scientific advice from the CHMP, with respect to ~~sales~~the regulatory ~~and~~pathway ~~marketing~~for ~~activities~~teplizumab. byWhile usthe orguidance ~~any~~provided ~~future~~in ~~licensor~~scientific advice procedures do not seek to pre-evaluate the results of studies, ~~advertising~~the ~~and~~initial ~~promotional~~scientific ~~materials~~advice ~~must~~letter ~~comply~~that we received from CHMP in December 2020 suggested that an additional confirmatory study would be necessary to support an MAA, for the use of teplizumab in at-risk individuals. We plan to engage with ~~FDA~~CHMP ~~rules~~to further elucidate the disease-modifying effect of teplizumab supported by study data in the context of clinical management of T1D, specifically in ~~addition~~at-risk individuals. If, however, the EMA determines that our current teplizumab data package is insufficient to ~~other~~support ~~applicable~~an ~~federal~~MAA for at-risk individuals and requires additional studies or data, ~~state~~such determination would delay or prevent approval of teplizumab in the European Union and ~~local~~European ~~laws~~Economic Area (“EEA”) for this indication. We have independently engaged with the MHRA to discuss a potential regulatory path for teplizumab in the United ~~States~~Kingdom. We filed for and received ~~similar~~in ~~legal~~July ~~requirements~~2021 an Innovation Passport for teplizumab in ~~other~~the ~~countries~~United Kingdom for the at-risk indication. We ~~may~~The ~~also~~Innovation bePassport ~~subject,~~is ~~directly~~the ormandated ~~indirectly~~entry ~~through~~point ~~our~~to ~~customers~~the ~~and~~ILAP ~~licensors,~~in the United Kingdom to ~~various~~facilitate ~~fraud~~approval of and ~~abuse~~market ~~laws~~access to an innovative medicine. Additionally, ~~including~~we have engaged the MHRA in a scientific advice procedure to discuss, ~~without~~among other topics, ILAP. ~~limitation~~The discussions with and feedback from the MHRA in the United Kingdom, ILAP partner agencies such as the NICE and the Scottish Medicines Consortium will help us evaluate the possible regulatory and market access paths forward in the United ~~States~~Kingdom ~~Anti~~for teplizumab. On April 20, 2021 we received a scientific advice letter from the MHRA on matters relating to the therapeutic position, non-~~Kickback~~clinical and ~~Statute~~clinical characterization of teplizumab. In addition, we have submitted a pediatric investigation plan (“PIP”) to the MHRA. There is no guarantee the MHRA will approve the PIP in a timely manner for regulatory approval. We have started a preliminary discussion with MHRA and its ILAP partners in the development of a TDP and identification of the relevant toolkits to support approval of and market access to teplizumab in the United ~~States~~Kingdom. ~~False~~Further ~~Claims~~engagement ~~Act,~~with the MHRA and its ILAP partners is planned in 2023. There is no guarantee that a similar position ~~state~~would ~~laws~~be taken by the EMA in the European Union. The advice given by the MHRA makes clear that it is not legally binding with regard to any future MAA for teplizumab, ~~which~~nor ~~impact~~can it be taken as indicative of any future agreed position. The MHRA indicated in its letter that it is of the view that there is an unmet medical need for a treatment that delays or prevents progression to T1D in at-risk patients. The MHRA did not request another confirmatory study to be carried out, ~~among~~acknowledging ~~other~~that the indication being ~~things~~sought is rare and that we may have difficulties recruiting sufficient numbers of subjects for such a study. However, ~~our~~the MHRA has considered that an MAA may benefit from additional supplementary information on patient preference. Such additional information would seek to strengthen the argument that teplizumab would benefit the at-risk patients according to the proposed ~~sales,~~label claim. The MHRA also considered that reliance on one pivotal study to obtain a marketing, authorization ought to meet the criteria described in the EMA/CPMP guidance entitled “Points to consider on application with (i) meta-analyses and ~~scientific~~(ii) one pivotal study” (CPMP/~~educational~~EWP/2330/99), ~~grant~~which ~~programs.~~for Ifthe wetime ~~participate~~being, is still relevant to applications made in the United ~~States~~Kingdom. ~~Medicaid~~We ~~Drug~~also plan additional ~~Rebate~~engagements ~~Program~~with EMA and other European stakeholders, including the ~~Federal~~relevant ~~Supply~~European ~~Schedule~~national regulatory authorities, in 2023; however, these stakeholders may not agree with our views on our teplizumab data package or our view of the ~~United~~relevant ~~States~~medical ~~Department~~need in at-risk populations and our efforts may not lead to favorable positions or decisions relating to or an approval of ~~Veterans~~teplizumab ~~Affairs,~~by the MHRA or ~~other~~a ~~government~~positive ~~drug~~opinion ~~programs~~by the EMA and a subsequent marketing authorization by the European Commission. Even if teplizumab is approved in United Kingdom and/or in the European Union, wethe MHRA or EMA/European Commission, may limit the indication for which the ~~will~~product may be ~~subject~~marketed, torequire ~~complex~~extensive ~~laws~~warnings ~~and~~on ~~regulations~~the ~~regarding~~product ~~reporting~~labeling or require expensive and ~~payment~~time-consuming ~~obligations.~~additional clinical ~~All~~trials or reporting as conditions of ~~these~~an ~~activities~~approval, ~~are~~amongst ~~also~~other ~~potentially~~requirements which we may or may not be able to comply ~~subject~~with. Even if teplizumab were to ~~United~~be ~~States~~granted ~~federal~~a ~~and~~marketing ~~state~~authorization, ~~consumer~~we ~~protection~~could ~~and~~not ~~unfair~~guarantee ~~competition~~that ~~laws.~~the ~~Similar~~payers ~~requirements~~and ~~exist~~health technology agencies in ~~many~~the United Kingdom and the Member States of ~~these~~the European Union would accept the therapeutic value and/or ~~areas~~cost-effectiveness of teplizumab for it to be adopted for clinical use in ~~other~~the ~~countries~~respective national health systems.

InThe ~~addition,~~process ~~if any of our product candidates are approved~~ for aobtaining ~~particular~~approval ~~indication,~~of ~~our~~an ~~product~~MAA ~~labeling,~~or ~~advertising~~any ~~and~~other ~~promotion would~~filing befor ~~subject~~approval toin ~~regulatory~~a ~~requirements~~foreign ~~and~~country ~~continuing~~is ~~regulatory~~an ~~review. The FDA~~extensive, ~~MHRA~~lengthy, ~~and~~expensive ~~the competent authorities of the European~~and ~~Union~~uncertain ~~Member~~process ~~States~~and ~~strictly regulate~~ the ~~promotional~~regulatory ~~claims~~authority ~~that~~ may bereject ~~made~~a ~~about~~filing ~~prescription~~or ~~products. In particular~~delay, alimit ~~product~~or ~~may not~~deny bemarketing ~~promoted~~approval for ~~uses~~many ~~that~~reasons. ~~are~~In ~~not~~many jurisdictions ~~approved~~outside by the ~~FDA,~~United ~~MHRA~~States, ~~or the European Commission as reflected in, or in~~ a ~~manner~~product ~~that~~candidate ismust ~~otherwise inconsistent~~be ~~with, the product’s~~ approved ~~labeling.~~for Ifreimbursement webefore ~~receive~~it ~~marketing~~can ~~approval~~be approved for ~~our product candidates~~sale, ~~physicians may~~Failure ~~nevertheless legally prescribe our products~~ to ~~their~~obtain ~~patients~~marketing approval in aother ~~manner~~countries ~~that~~or isany ~~inconsistent~~delay ~~with~~or ~~the~~setback ~~approved~~in ~~label.~~obtaining ~~If we are found to have promoted~~ such ~~off-label~~approval ~~uses,~~would orimpair ~~otherwise inappropriately promoted~~ our ~~products,~~ability ~~we may become subject~~ to ~~significant liability~~develop ~~and~~foreign ~~government~~markets ~~fines.~~for ~~The~~TZIELD ~~FDA~~ and ~~other~~could ~~agencies~~adversely ~~actively~~affect ~~enforce~~our ~~the~~business ~~laws~~ and ~~regulations~~financial ~~prohibiting~~condition. ~~the~~Any ~~promotion~~such ofcomplications ~~off-label uses and false or misleading claims, and a company that is found to have improperly promoted products, including off-label uses,~~ may bereduce ~~subject~~our target tomarket ~~significant sanctions. The federal government has levied large civil~~ and ~~criminal~~delay ~~fines~~or ~~against~~limit ~~companies~~the ~~for~~full ~~alleged~~commercial ~~improper~~potential ~~promotion and has enjoined several companies from engaging in off-label promotion. The FDA has also requested that companies enter into consent decrees~~ of ~~permanent injunctions under which specified promotional conduct is changed or curtailed~~TZIELD.

IfWe wehave orconducted aand ~~regulatory~~are ~~agency~~conducting ~~discovers~~clinical ~~previously~~trials ~~unknown~~outside ~~problems~~the ~~with~~United aStates ~~product,~~and ~~such~~anticipate asconducting ~~adverse~~additional ~~events~~clinical oftrials ~~unanticipated severity or frequency,~~outside ~~problems with~~ the ~~facility~~United ~~where the product is manufactured~~States, orand wethe orFDA ~~our manufacturers fail to comply with applicable regulatory requirements, we~~ may benot ~~subject~~accept todata ~~the~~from ~~following~~such ~~administrative or judicial sanctions:~~trials.

●We are ~~restrictions~~currently onconducting ~~the~~clinical ~~marketing~~trials orfor ~~manufacturing~~TZIELD ofand ~~the~~our product; ●candidates ~~withdrawal~~in countries outside of the ~~product~~United ~~from~~States and we anticipate that we will conduct additional clinical trials in countries outside the ~~market;~~United ●States. ~~voluntary~~Although orthe ~~mandatory~~FDA ~~product~~may ~~recalls;~~accept ●data ~~restrictions~~from ofclinical trials conducted outside the ~~labeling~~United States, acceptance of asuch ~~product;~~study ●data ~~restrictions~~by onthe ~~product~~FDA ~~distribution~~is orsubject ~~use~~to ●certain conditions. For example, the clinical trial must be conducted in accordance with GCP requirements, and the FDA must be able to ~~conduct~~validate ~~post-marketing~~the ~~studies~~data orfrom the clinical trial through an onsite inspection if it deems such inspection necessary. Where data from foreign clinical trials; ●are ~~issuance~~intended ofto ~~warning~~serve as ~~letters~~the orsole ~~untitled~~basis ~~letters;~~for ●marketing ~~injunctions~~approval orin the ~~imposition~~United States, the FDA will not approve the application on the basis of ~~civil~~foreign ordata alone ~~criminal~~unless ~~penalties~~those ordata ~~monetary~~are ~~fines,~~considered ~~restitution~~applicable to the United States patient population and United States medical practice, orthe ~~disgorgement~~clinical trials were performed by clinical investigators of ~~profit~~recognized orcompetence, ~~revenues;~~and ●the ~~suspension~~data is considered valid without the need for an on-site inspection by the FDA or, ~~withdrawal~~if the FDA considers such an inspection to be necessary, ~~variation~~the orFDA ~~revocation~~is ofable ~~regulatory~~to ~~approval;~~validate ●the ~~suspension~~data through an on-site inspection or ~~termination~~other ofappropriate ~~any~~means. ~~ongoing~~In addition, such clinical trials; ●would ~~refusal~~be subject to ~~approve~~the ~~pending~~applicable ~~applications~~local orlaws ~~supplements~~of tothe ~~approved~~foreign jurisdictions ~~applications~~where ~~filed~~the byclinical ~~us;~~trials ●are ~~suspension~~conducted. orA ~~imposition~~description of ~~restrictions~~any onstudies ~~operations~~related to overdosage is also required, including information ~~costly~~on ~~new~~dialysis, ~~manufacturing~~antidotes, ~~requirements;~~ or ●other ~~product~~treatments, ~~seizure~~if orknown. ~~detention~~There orcan ~~refusal~~be tono ~~permit~~assurance the ~~import~~FDA orwill ~~export~~accept data from clinical trials conducted outside of ~~product~~the United States. If the FDA does not accept any such data, it would likely result in the need for additional clinical trials, which would be costly and time-consuming and delay aspects of our development plan.

~~The~~Risks ~~occurrence~~inherent of any event or penalty described above may inhibit our ability to commercialize our product candidates and generate revenue. Any government investigation of alleged violations of law could require us to expend significant time and resources in ~~response~~conducting ~~and~~international ~~could generate~~clinical ~~negative~~trials ~~publicity. Adverse regulatory action~~include, ~~whether~~but ~~pre-~~are ornot ~~post-approval,~~limited ~~can also potentially lead~~ to ~~product liability claims and increase our product liability exposure.~~:

~~Even though~~● weforeign ~~apply~~regulatory ~~for~~requirements ~~orphan~~that ~~drug~~could ~~designation~~burden ~~for~~or alimit ~~product~~our ~~candidate,~~ability weto ~~may~~conduct ~~not~~our beclinical ~~able~~trials; to● ~~obtain~~administrative ~~such~~burdens ~~designation~~of orconducting ~~obtain~~clinical ~~orphan drug~~trials ~~marketing~~under ~~exclusivity.~~multiple ~~Even~~foreign ifregulatory weschema; ~~obtain~~● ~~orphan~~foreign ~~drug~~currency ~~marketing~~fluctuations ~~exclusivity~~which could negatively impact our financial condition since certain payments are paid in local currencies; ● manufacturing, itcustoms, ~~may~~shipment ~~not~~and ~~effectively~~storage ~~protect~~requirements; ~~the~~● ~~product~~cultural ~~from competition~~differences in medical practice and clinical research; and ● diminished protection of intellectual property in some countries.

~~Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition,~~Biologics ~~which~~carry isunique ~~generally~~risks ~~a disease or condition that affects fewer than 200,000 individuals in the United States or for which there is no reasonable expectation that the cost of developing~~ and making a drug available in the United States for this type of disease or condition will be recovered from sales of the product. Orphan drug designation must be requested before submitting an NDA or a BLA. After the FDA grants orphan drug designationuncertainties, 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 regulatory review and approval process. In addition to the potential period of exclusivity, orphan designation makes a company eligible for grant funding to defray costs of clinical trial expenses, tax credits for clinical research expenses and potential exemption from the FDA application user fee. If a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which itcould ~~has~~have such designation, the product is entitled to orphan drug exclusivity, which means the FDA may not approve any other applications to market the same drug for the same indication for seven years, except in limited circumstances, such as (i) the drug’s orphan designation is revoked; (ii) its marketing approval is withdrawn; (iii) the orphan exclusivity holder consents to the approval of another applicant’s product; (iv) the orphan exclusivity holder is unable to assure the availability of a ~~sufficient~~negative ~~quantity~~impact ofon ~~drug;~~future orresults ~~(v) a showing~~ of ~~clinical superiority to the product with orphan exclusivity by a competitor product~~operations. If a drug designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan drug exclusivity. There can be no assurance that we will receive orphan drug designation for any of our product candidates in the indications for which we think they might qualify, if we elect to seek such applications.

WeThe ~~have~~successful ~~obtained~~discovery, ~~orphan~~development, ~~drug~~manufacturing ~~designation~~and ~~from~~sale ~~the~~of ~~FDA~~biologics ~~for~~is ~~teplizumab~~a ~~for~~long, ~~the~~expensive ~~treatment~~and ofuncertain ~~newly~~process. ~~diagnosed~~There ~~T1D,~~are ~~however,~~unique ~~there~~risks and isuncertainties ~~no guarantee~~with ~~that~~biologics. ~~the~~For ~~FDA~~example, ~~the~~access ~~European~~to ~~Commission~~and orsupply ~~comparable~~of ~~foreign~~necessary ~~regulatory~~biological ~~authorities~~materials, ~~will~~such ~~grant~~as ~~any~~cell ~~future~~lines, ~~application~~may ~~for~~be limited ~~orphan~~and ~~drug~~governmental ~~designation~~regulations ~~for~~restrict ~~any~~access ofto ~~our~~and ~~other~~regulate ~~product~~the ~~candidates,~~transport ~~including~~and ~~teplizumab~~use ~~for~~of ~~the~~such ~~use~~materials. inIn ~~at-risk~~addition, ~~individuals~~the development, ~~which~~manufacturing ~~would~~and ~~make~~sale usof ~~ineligible~~biologics ~~for~~is ~~the~~subject ~~additional~~to ~~exclusivity~~regulations that are often more complex and extensive than the regulations applicable to other ~~benefits~~pharmaceutical products. ofManufacturing ~~orphan~~biologics, ~~drug~~especially ~~designation~~in large quantities, is often complex and may ~~also~~require ~~impact~~the ~~our ability~~use toof ~~obtain~~innovative ~~benefits~~technologies. Such ~~under~~manufacturing ~~other~~also ~~incentive~~requires ~~programs,~~facilities ~~such~~specifically asdesigned ~~the~~and ~~rare~~validated ~~pediatric~~for ~~disease~~this ~~priority~~purpose ~~review~~and ~~voucher~~sophisticated ~~program.~~quality ~~For~~assurance ~~example,~~and wequality ~~applied~~control ~~for~~procedures. ~~orphan~~Biologics ~~drug~~are ~~designation~~also offrequently ~~teplizumab~~costly ~~for~~to ~~the~~manufacture ~~use~~because inproduction ~~at-risk~~inputs ~~individuals~~are ~~which~~derived ~~was~~from ~~denied~~living animal byor ~~the~~plant ~~FDA’s OOPD~~material, inand ~~February~~some ~~2021.~~biologics Wecannot ~~believe~~be ~~current~~made ~~data~~synthetically ~~suggests~~by ~~that~~a ~~there~~chemical ~~may~~process. beIn anaddition, ~~initial~~after ~~undiagnosed~~receiving ~~prevalence approaching~~product ~~165~~approval,~~000-200,000~~ ~~Stage~~the 2FDA ~~T1D~~and ~~subjects~~other inregulatory ~~all~~authorities ~~age~~may ~~groups,~~require ~~however,~~us weto ~~believe~~submit ~~the~~samples ~~diagnosed~~of ~~prevalence~~any ~~for~~lot ~~Stage~~of 2any ~~T1D~~approved ~~subjects~~product istogether with ~~less~~the ~~than~~protocols ~~200,000,~~showing ~~which,~~the weresults ~~believe~~of ~~could~~applicable ~~have~~tests ~~met~~at any time. Under some circumstances, the FDA’s ~~criteria~~and ~~for~~other ~~orphan~~regulatory ~~drug designation.~~authorities Wemay ~~currently~~require dothat we not ~~have~~distribute ~~plans~~a tolot ~~take~~until ~~any~~the ~~additional~~agency ~~steps~~authorizes its release. Failure to ~~address~~successfully ~~OOPD’s~~discover, ~~positions~~develop, manufacture and sell biologics could adversely impact our business and results of operations.

~~Even~~If if we ~~obtain~~are ~~orphan~~not ~~drug~~able ~~exclusivity~~to ~~for~~obtain ~~teplizumab~~any ~~for~~required ~~the~~regulatory ~~treatment~~approvals ~~of newly-diagnosed T1D in the United States, the FDA can still approve other drugs that have a different active ingredient~~ for ~~use~~our inproduct ~~treating the same indication. Furthermore~~candidates, ~~the~~we ~~FDA~~will ~~can~~not ~~waive~~be ~~orphan drug~~able ~~exclusivity if we are unable~~ to ~~manufacture~~commercialize ~~sufficient~~our ~~supply of teplizumab or if the FDA finds that a subsequent applicant for~~product ~~newly-diagnosed~~candidates ~~T1D~~and ~~demonstrates~~our ~~clinical~~ability ~~superiority~~ to ~~teplizumab.~~generate ~~Accordingly,~~revenue ~~orphan~~from ~~drug~~these ~~exclusivity~~products ~~for~~will abe ~~product may not effectively protect the product from competition~~limited.

~~Although~~The research, wetesting, ~~may~~manufacturing, ~~apply~~labeling, ~~for~~packaging, ~~rare~~storage, ~~pediatric~~approval, sale, marketing, advertising and promotion, pricing, ~~disease~~export, ~~designation~~import ~~for~~and distribution of drug products are subject to extensive regulation by the FDA, EMA, MHRA and other regulatory authorities in the United States, European Union, United Kingdom and other countries, where regulations differ from country to country. We are not permitted to market our product candidates, as prescription pharmaceutical products in the United States until we receive ~~may~~approval ~~not~~of bean ~~able~~NDA, toor ~~obtain~~BLA from the FDA, or in any foreign countries until we receive the requisite approval from such ~~designation~~countries. In the United States, the FDA generally requires the completion of clinical trials of each drug to establish its safety and ~~rare~~efficacy ~~pediatric~~and ~~disease~~extensive ~~designation~~pharmaceutical development to ensure its quality before an NDA or a BLA is approved. Regulatory ~~does~~authorities ~~not~~in ~~guarantee~~other ~~that~~jurisdictions impose similar requirements. Of the large number of drugs in development, only a small percentage result in the submission of an NDA or a BLA to the FDA or other regulatory authorities and even fewer are eventually approved for commercialization. Changes in regulatory approval policies during the ~~product~~development ~~will~~period, ~~qualify~~changes in or the enactment of additional statutes or regulations, or changes in regulatory review for a ~~priority~~submitted ~~review~~product ~~voucher~~application ~~upon~~may cause delays in the approval or rejection of an application. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting information to regulatory authorities for each therapeutic indication to establish the product candidate’s safety and efficacy. Securing marketing approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities and grant of manufacturing authorizations by the regulatory authorities. Our product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use. If our development efforts for our product candidates, including regulatory approval, are not successful for their planned indications, our business will be materially adversely affected. Our success depends on the receipt of regulatory approval and the issuance of such regulatory approvals is uncertain and subject to a number of risks, including the following:

~~Under~~● the ~~Rare~~results ~~Pediatric~~of ~~Disease Priority~~our ~~Review~~clinical ~~Voucher~~trials ~~program,~~may ~~upon~~not be satisfactory or may not meet the ~~approval~~level of astatistical ~~qualifying~~or ~~BLA~~clinical significance required by the FDA, EMA/European Commission, MHRA or ~~NDA~~other regulatory agencies for marketing approval; ● the ~~treatment~~dosing of our product candidates in a ~~rare~~particular ~~pediatric~~clinical ~~disease,~~trial ~~the~~may ~~sponsor of~~not ~~such~~be at an ~~application~~optimal ~~would~~level; ● we may be ~~awarded~~required ato ~~rare~~provide ~~pediatric~~additional ~~disease~~analysis ~~priority~~or ~~review~~data ~~voucher~~for ~~that~~already ~~can~~completed beclinical ~~used~~studies, or conduct additional studies; ● the FDA, EMA, MHRA or comparable foreign regulatory authorities may require us to obtain ~~priority~~clearance, ~~review~~CE ~~for a~~marking ~~subsequent~~or ~~BLA~~approval orof ~~NDA.~~companion Ondiagnostic ~~December~~tests; 27● the FDA, ~~2020~~EMA, ~~the~~MHRA ~~Creating~~or ~~Hope~~comparable ~~Reauthorization~~foreign ~~Act~~regulatory ~~extended~~authorities may disagree on the ~~Rare~~design ~~Pediatric~~or ~~Disease~~implementation ~~Priority~~of ~~Review Voucher~~our ~~Program~~clinical trials, ~~and~~including ~~after~~the ~~September~~methodology 30used in our studies, ~~2024~~our chosen endpoints, our statistical analysis, or our proposed product indication; ● our failure to demonstrate to the satisfaction of the FDA, ~~may~~EMA, ~~only~~MHRA ~~award~~or comparable regulatory authorities that a ~~voucher~~product candidate is safe and effective for anits ~~approved~~proposed ~~rare~~indication; ~~pediatric~~● ~~disease~~we may fail to demonstrate that a product ~~application if~~candidate’s ~~the~~clinical ~~sponsor~~benefits ~~has~~outweigh ~~rare~~its ~~pediatric~~safety ~~disease~~risks; ~~designation~~● ~~for~~immunogenicity might affect a product candidate efficacy and/or safety; ● the ~~drug~~FDA, ~~and~~MHRA, ~~that~~the ~~designation~~competent ~~was~~authorities ~~granted~~of bythe ~~September~~European ~~30,~~Union ~~2024.~~Member ~~After~~States ~~September 30~~or comparable foreign regulatory authorities may disagree with our interpretation of data from nonclinical studies or clinical trials; ● the FDA, ~~2026~~MHRA, the ~~FDA~~competent authorities of the European Union Member States or comparable foreign regulatory authorities may ~~not~~fail ~~award~~to ~~any~~approve ~~rare~~the ~~pediatric~~manufacturing ~~disease~~processes ~~priority~~or ~~review~~facilities ~~vouchers~~of third-party manufacturers with whom we contract for clinical and commercial supplies; or ● there may be changes in the approval policies or regulations that render our nonclinical and clinical data insufficient for approval.

We submitted a request for rare pediatric disease designation for teplizumab for the use in at-risk individuals, however, the FDA sent a second deficiency letter for our application in October 2021. In its letter, the FDA’s Office of OOPD, noted that they believe the At-Risk Stage 2 population is greater than 200,000 subjects in the United States and we have one year from the date of the deficiency letter (or any approved extension thereof) to provide arguments otherwise, or our request for Rare Pediatric Disease designation will be considered voluntarily withdrawn. We currently do not have plans to take any additional steps to address OOPD’s positions.

There is no guarantee that the FDA will grant any future requests for Rare Pediatric Disease designation for any of our product candidates, including teplizumab for the use in at-risk individuals. Moreover, even if we obtain rare pediatric disease designation, there is no guarantee that we will qualify for a rare pediatric disease priority review voucher upon FDA approval of the NDA or BLA for a rare pediatric disease. Rare pediatric disease designation does not lead to faster development or regulatory review of the product, or increase the likelihood that it will receive marketing approval.

Although we may pursue expedited regulatory approval pathways for a product candidate, it may not qualify for expedited development or, if it does qualify for expedited development, it may not actually lead to a faster development or regulatory review or approval process.

Although we believe there may be an opportunity to accelerate the development of certain of our product candidates through one or more of the FDA’s or EMA’s expedited programs, such as fast track, breakthrough therapy, accelerated approval or priority review, we cannot be assured that any of our other product candidates will qualify for such programs.

For example, in the United States, a drug may be eligible for designation as a breakthrough therapy if the drug is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. Although breakthrough designation or access to any other expedited program may expedite the development or approval process, it does not change the standards for approval. If we apply for breakthrough therapy designation or any other expedited program for our product candidates, the FDA may determine that our proposed target indication or other aspects of our clinical development plans do not qualify for such expedited program. Even if we are successful in obtaining a breakthrough therapy designation or access to any other expedited program, we may not experience faster development timelines or achieve faster review or approval compared to conventional FDA procedures. For example, the time required to identify and resolve issues relating to chemistry, manufacturing and controls, the acquisition of a sufficient supply of our product for clinical trial purposes or the need to conduct additional preclinical or clinical studies may delay approval by the FDA, even if the product candidate qualifies for a breakthrough therapy designation or access to any other expedited program. Access to an expedited program may also be withdrawn by the FDA if it believes that the designation is no longer supported by data from our clinical development program. Additionally, qualification for any expedited review procedure does not ensure that we will ultimately obtain regulatory approval for such product candidate.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of our product candidates in other jurisdictions.

Obtaining and maintaining regulatory approval of our product candidates in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, but a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from those in the United States, including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In many jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval.

~~Obtaining~~Additionally, ~~foreign~~even if we obtain regulatory ~~approvals~~approval ~~and~~for ~~compliance~~one ~~with~~indication, ~~foreign~~there is no guarantee we will be able to gain regulatory ~~requirements~~approval ~~could~~for ~~result~~additional indications. For example, we intend to initially seek regulatory approval for our CVB vaccine product candidate for the prevention of acute CVB infection. The results of longitudinal studies demonstrating the connection between CVB and T1D or celiac disease will be necessary to expand the indicated use of this vaccine to T1D. These studies must be completed and submitted to the FDA, MHRA or EMA prior to receiving approval in ~~significant~~the ~~delays~~United States, ~~difficulties~~United Kingdom or European Union to market the CVB vaccine for additional indications such as prevention of T1D. Such studies will be costly and time consuming and may not demonstrate to the FDA’s, MHRA’s or EMA’s satisfaction ~~costs~~the ~~for~~connection usbetween the CVB virus and ~~could~~the onset of T1D or celiac disease. Failure or delay in obtaining regulatory approval for our product candidates for the foregoing, or any other reasons, will prevent ~~the~~or ~~introduction~~delay ofus from commercializing our ~~products~~product incandidates, ~~certain~~and our ~~countries~~ability to generate revenue from these candidates will be materially impaired. IfWe cannot guarantee that regulators will agree with our assessment of the results of the clinical trials we ~~fail~~have conducted or intend to ~~comply~~conduct ~~with~~in the ~~regulatory~~future or that such future trials ~~requirements~~will be successful. The FDA, EMA, MHRA and other regulators have substantial discretion in ~~international~~the ~~markets~~approval process and/ ormay refuse to ~~receive~~accept any ~~applicable~~application ~~marketing~~or ~~approvals,~~may decide that our ~~target~~data ~~market~~is ~~will~~insufficient befor ~~reduced~~approval and ~~our~~require ~~ability~~additional clinical trials, or pre-clinical or other tostudies. ~~realize~~In addition, varying interpretations of the ~~full~~data ~~market~~obtained ~~potential~~from pre-clinical and clinical testing could delay, limit or prevent regulatory approval of our product candidates ~~will be harmed~~.

~~Current~~In addition, after receiving regulatory approval of our product candidates and/or ~~future~~any ~~legislation~~additional ~~may~~indications, ~~increase~~prior to commercialization, payers and health technology agencies will assess the ~~difficulty~~therapeutic value and/or cost-effectiveness for usthe product candidates and/or additional indications before such product candidates can be adopted for clinical use in the respective national health systems and this is referred to ~~obtain~~as ~~marketing~~pricing and reimbursement approval ofthroughout this document. Without such pricing and ~~commercialize~~reimbursement ~~our~~approvals, the commercialization and market access of the product candidates would be significantly impacted. We cannot guarantee that pricing and reimbursement approval would be obtained.

InWe ~~the~~are ~~United~~subject ~~States~~to ongoing obligations and ~~some~~continued ~~foreign~~regulatory ~~jurisdictions~~review, ~~there~~which ~~have~~may ~~been~~result ain ~~number~~significant ofadditional ~~legislative~~expense. ~~and~~If ~~regulatory~~we ~~changes~~fail to ~~and~~comply ~~proposed~~with ~~changes regarding~~these ~~the~~requirements ~~healthcare~~or ~~system~~if ~~that~~we ~~could~~experience ~~prevent~~unanticipated orproblems ~~delay~~with ~~marketing~~TZIELD, ~~approval~~the ~~for~~FDA ~~our~~could ~~product~~impose ~~candidates,~~labeling ~~restrict~~and other restrictions or ~~regulate~~require ~~post-approval activities~~TZIELD ~~and~~be ~~affect~~withdrawn ~~our~~from ~~ability~~the tomarket ~~profitably~~and ~~sell~~we ~~our~~may ~~product~~be ~~candidates~~subject to penalties.

~~Legislative~~TZIELD, and ~~regulatory~~any ~~proposals~~other ~~have~~product ~~been~~candidate ~~made~~for towhich ~~expand~~we ~~post-~~obtain marketing approval, will be subject to ongoing regulatory requirements ~~and~~governing the ~~restrict~~manufacturing, ~~sales~~labeling, ~~and~~packaging, ~~promotional~~storage, ~~activities~~distribution, ~~for~~safety ~~pharmaceutical~~surveillance, advertising, promotion, recordkeeping and reporting ~~products~~of adverse events and other post-market information. WeThese dorequirements ~~not~~include ~~know~~submissions ~~whether~~of ~~additional~~safety ~~legislative~~and ~~changes~~other ~~will~~post bemarketing ~~enacted~~information and reports, orregistration ~~whether~~and ~~the~~listing ~~FDA~~requirements, ~~regulations~~cGMP requirements relating to quality control, ~~guidance~~quality orassurance ~~interpretations~~and corresponding ~~will~~maintenance beof ~~changed~~records and documents, orrequirements ~~what~~regarding the ~~impact~~distribution of ~~such~~samples ~~changes~~to onphysicians ~~the~~and ~~marketing~~recordkeeping. ~~approvals~~Even if marketing approval of ~~our~~a product ~~candidates,~~candidate ifis ~~any~~granted, the approval may be. Insubject ~~addition, increased~~to ~~scrutiny~~limitations byon the ~~United~~indicated ~~States~~uses ~~Congress~~for ~~(“Congress”)~~which of the ~~FDA’s~~product ~~approval process~~ may be ~~significantly~~marketed ~~delay~~ or ~~prevent~~to ~~marketing~~the conditions of approval, asor ~~well~~contain asrequirements ~~subject~~for uscostly post marketing testing and surveillance to ~~more~~monitor ~~stringent~~the safety ~~product~~or ~~labeling~~efficacy ~~and~~of ~~post-marketing~~the ~~testing~~product, ~~and~~including ~~other~~the ~~requirements~~imposition of a REMS.

~~The~~With ~~FDA’s~~respect ~~and~~to ~~other regulatory authorities’ policies may change~~TZIELD, ~~and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates. We also cannot predict~~ the ~~likelihood,~~FDA ~~nature,~~has orimposed ~~extent~~CMC ofand ~~adverse government~~clinical ~~regulation~~post-marketing ~~that may arise from pending or future legislation or administrative action~~requirements, ~~either~~including inrequirements ~~the~~to ~~United~~conduct ~~States~~an ~~or abroad.~~open-label ~~For~~study ~~example,~~to onassess ~~March~~safety ~~27, 2020, Congress enacted the Coronavirus Aid, Relief,~~ and ~~Economic~~pharmacokinetics ~~Security~~of ~~Act~~TZIELD ~~(“CARES Act”)~~ in ~~response~~ topediatric ~~the~~patients ~~COVID-19~~ages ~~pandemic.~~0 ~~Among~~to ~~other~~8 ~~provisions,~~years ~~the CARES Act made a number~~ of ~~changes to the Federal Food~~age, ~~Drug,~~conduct ~~and~~an ~~Cosmetic~~observational registry ~~Act~~study ~~(“FDCA”)~~to ~~aimed~~assess ~~at preventing drug shortages. Similarly,~~ the ~~FDA~~long-term ~~has~~safety ~~issued a number~~ of ~~guidance~~TZIELD ~~documents~~in ~~describing the~~patients ~~agency’s expectations for how drug manufacturers should comply~~ with ~~various~~Stage ~~FDA~~2 ~~requirements during the pandemic~~TID, ~~including with respect to conducting clinical trials, distributing drug samples,~~ and ~~reporting~~provide ~~post-marketing~~comparative ~~adverse~~safety ~~events.~~data ~~Moreover,~~on asthe acommercial ~~result~~formulation of ~~the~~TZIELD ~~COVID-19~~versus ~~pandemic,~~the ~~there~~clinical ~~has~~trial ~~been~~product ~~increasing~~form political and regulatory scrutiny of drug supply chains, resulting in proposed and enacted legislative and executive actions, including Executive Orders, to incentivize or compel drug manufacturing operations to relocate to the ~~United~~PROTECT ~~States. It is not clear how these changes~~ and ~~proposals~~PROTECT ~~could~~Extension ~~impact our business~~studies. If we ~~are~~face ~~slow~~challenges or are unable to ~~adapt to~~comply ~~changes~~with inpost-marketing ~~existing~~ requirements ~~or the adoption of new requirements or policies~~, ~~or if~~ we ~~are~~may not be able to maintain ~~regulatory compliance, we may lose any~~ marketing approval ~~that we may have obtained~~, ~~and~~or we may ~~not~~decide ~~achieve~~to orabandon ~~sustain~~the ~~profitability~~program.

~~Healthcare~~If ~~reform~~we ~~and~~or ~~other~~a ~~governmental~~regulatory ~~and~~agency ~~private~~discovers ~~payor~~previously ~~initiatives~~unknown ~~may~~problems ~~have~~with ana product, such as adverse ~~effect~~events ~~upon~~of unanticipated severity or frequency, problems ~~and~~with ~~could~~the ~~prevent~~facility where the product is manufactured or product quality, or we or our ~~product~~manufacturers ~~candidates’~~fail to comply with applicable ~~commercial~~regulatory ~~success~~requirements, ifwe ~~approved.~~may be subject to the following administrative or judicial sanctions:

~~The United~~● ~~States~~restrictions ~~government~~on ~~and~~the ~~individual~~marketing ~~states have been aggressively pursuing healthcare reform designed to impact delivery of, and/~~or ~~payment~~ ~~for,~~manufacturing ~~healthcare, which include initiatives intended to reduce the cost~~ of ~~healthcare. For example, in March 2010,~~ the ~~United States~~product; ~~Congress~~● ~~enacted~~withdrawal ~~the~~of ~~Patient Protection and Affordable Care Act, as modified by~~ the ~~Health~~product ~~Care~~from ~~and Education Reconciliation Act (~~the ~~“ACA”), which, among other things, expanded healthcare coverage through Medicaid expansion and the implementation of the individual health insurance mandate~~market; ~~included~~● ~~changes~~voluntary toor ~~the~~mandatory ~~coverage~~product ~~and reimbursement of drug products under government healthcare programs~~recalls; ~~imposed~~● anrestrictions ~~annual fee on manufacturers~~ of branded drugs; and expanded government enforcement authority. We face uncertainties because there have been, and may be additional, federal legislative and administrative efforts to repeal, substantially modify or invalidate some or all of the ~~provisions~~labeling of the ACA. For example, tax reform legislation was enacted at the end of 2017 that eliminated the tax penalty for individuals who do not maintain sufficient health insurance coverage beginning in 2019. The ACA has also been subject to judicial challenge. The case Texas v. Azar, which challenges the constitutionality of the ACA, including provisions that are unrelated to healthcare reform but were enacted as part of the ACA, was argued before the Supreme Court in November 2020. The Supreme Court dismissed this challenge to the ACA on June 17, 2021 and, therefore, all of the ACA but the individual mandate to buy health insurance currently remains in effect. Further, prior to the U.S. Supreme Court ruling on January 28, 2021, President Biden issued an executive order that initiated a ~~special~~product; ~~enrollment~~● ~~period~~restrictions ~~for purposes of obtaining health insurance coverage through the ACA marketplace, which began~~ on ~~February~~product ~~15,~~distribution ~~2021~~or ~~and~~use ~~remained~~● open until August 15, 2021. The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, ~~and policies that create unnecessary barriers~~ to ~~obtaining access~~conduct topost-marketing ~~health~~studies ~~insurance coverage through Medicaid~~ or ~~the~~clinical ~~ACA.~~trials; ~~The~~● ~~ACA~~issuance ~~remains subject to legislative efforts to repeal, modify or delay the implementation~~ of ~~the~~warning ~~law.~~letters ~~However, if the ACA is repealed~~ or ~~modified,~~untitled or if implementation of certain aspects of the ACA are delayed, any such repeal, modification or delay may materially adversely affect our business, strategies, prospects, operating results or financial condition. We are unable to predict the full impact of any repeal, modification or delay in the implementation of the ACA on us at this time.letters;

In addition, the expansion of the 340B Drug Discount Program through the ACA has increased the number of “covered entity” purchasers who are eligible for significant discounts on branded drugs. Additionally, the Health Resources and Services Administration has interpreted the 340B Drug Discount Program law to require manufacturers to extend these discounts to contract pharmacies that have arrangements with covered entities. Several drug manufacturers have commenced litigation, which remains ongoing, challenging the legality of contract pharmacy arrangements under the 340B Drug Discount Program. The resolution of the litigation may affect the way in which manufacturers are required to extend the 340B Drug Discount Program prices to covered entities, including through contract pharmacies. There also are ongoing challenges regarding the implementation of the 340B Drug Discount Program administrative dispute resolution process, which is, in part, intended to resolve claims by covered entities that they have been overcharged for covered outpatient drugs by manufacturers, and claims by manufacturers regarding covered entity compliance with program requirements. The nature of the current administrative dispute resolution process, and the outcomes of these court cases, may have a material adverse impact on our revenue should we participate in the 340B Drug Discount Program after receiving approval for our product candidates.

~~Beyond~~● ~~the~~injunctions ~~ACA,~~or ~~in 2020 and early 2021,~~ the ~~United~~imposition ~~States Department~~ of ~~Health~~civil ~~and~~or ~~Human~~criminal ~~Services~~penalties ~~has issued various rules that affect pricing~~ or ~~payment~~monetary ~~for drug products. For example~~fines, ~~effective January 2023~~restitution, ~~revisions~~or todisgorgement the federal anti-kickback statute would remove protection for traditional Medicare Part D discounts offered by pharmaceutical manufacturers to pharmacy benefit managers and health plans. Additional healthcare reform efforts have sought to address certain issues related to the COVID-19 pandemic, including an expansion of ~~telehealth~~profit ~~coverage under Medicare and accelerated~~ or ~~advanced~~revenues; ~~Medicare~~● ~~payments to healthcare providers. Some of these changes have been and may continue to be subject to legal challenge. For example~~suspension, ~~courts have temporarily enjoined a new “most favored nation” payment model for select drugs covered under Medicare Part B that was to take effect on January 1~~withdrawal, ~~2021~~variation ~~and~~or ~~would~~revocation limit payment based on international drug price. On January 13, 2021, in a separate lawsuit brought by industry groups, the government defendants entered a joint motion to stay litigation on the condition that the government would not appeal the preliminary injunction granted in the U.S. District Court for the Northern District of California and that performance for any final regulation stemming from the most favored nation payment model interim final rule shall not commence earlier than sixty (60) days after publication of that regulation in the Federal Register. In addition, there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several United States Congressional inquiries, hearings and proposed and enacted federal legislation and rules, as well as Executive Orders and regulatory ~~actions,~~approval; ~~designed~~● ~~to,~~suspension ~~among other things, reduce~~ or ~~limit~~termination ~~the prices~~ of ~~drugs~~any ~~and~~ongoing ~~make~~clinical ~~them~~trials; ~~more affordable~~● ~~for~~refusal ~~patients, such as by tying the prices that Medicare reimburses for physician-administered drugs~~ to ~~the~~approve ~~prices~~pending ofapplications ~~drugs in~~or ~~other~~supplements ~~countries, reform the structure and financing of Medicare Part D pharmaceutical benefits, including through increasing manufacturer contributions~~ to ~~offset~~approved ~~Medicare~~applications ~~beneficiary~~filed ~~costs, bring more transparency to drug pricing rationale and methodologies (including, for example,~~ by ~~requiring~~us; ~~manufacturers~~● tosuspension ~~disclose~~or ~~planned~~imposition ~~drug price increases and the rationales for such increases), implement data collection and reporting under Section 204~~ of ~~Title~~restrictions IIon ~~of Division BB of the Consolidated Appropriations Act~~operations, 2021, which requires, among other things, health plans and issuers to disclose rebates, fees, and other remuneration provided by drug manufacturers related to certain pharmaceutical products, enable the government to negotiate prices for drugs covered under Medicare, including ~~H.R.~~costly 3 which passed the House, revise rules associated with the calculation of Medicaid Average Manufacturer Price and Best Price, including the removal of the current statutory 100% of Average Manufacturer Price per-unit cap on Medicaid rebate liability effective as of January 1, 2024 under the American Rescue Plan Act of 2021, which may significantly affect the amount of rebates paid on prescription drugs under Medicaid and the prices that are required to be charged to covered entities under the 340B Drug Discount Program, create new ~~anti-kickback~~manufacturing ~~statute safe~~requirements; harbors applicable to certain point-of-sale discounts to patients and fixed-fee administrative fee payment arrangements with pharmacy benefit managers, each of which are currently stayed, and facilitate the importation of certain lower-cost drugs from other countries. The nature and scope of health care reform under the Biden administration remains uncertain, although President Biden supported reforms to lower drug prices during his campaign for the presidency. Adoption of new healthcare reform legislation at the federal or ~~state~~ ~~level~~● ~~could~~product ~~affect~~seizure ~~demand for,~~ or ~~pricing~~detention ~~of, our products~~ or ~~product~~refusal ~~candidates~~to ifpermit ~~approved for sale. We cannot predict, however,~~ the ~~ultimate~~import ~~content, timing~~ or ~~effect~~export of ~~any healthcare reform legislation or action, or its impact on us, and healthcare reform could increase compliance costs and may adversely affect our future business and financial results~~product.

~~In addition, other legislative~~With ~~changes~~respect ~~have~~to ~~been~~sales ~~adopted that could have an adverse effect upon,~~ and ~~could~~marketing ~~prevent,~~activities ~~our~~by ~~products’~~us or ~~product~~any ~~candidates’ commercial~~future ~~success. More broadly~~licensor, ~~the~~advertising ~~Budget~~and ~~Control~~promotional ~~Act~~materials ofmust ~~2011,~~comply aswith ~~amended,~~FDA ~~or the Budget Control Act, includes provisions intended~~rules ~~to reduce the federal deficit, including reductions~~ in ~~Medicare~~addition ~~payments~~ to ~~providers~~other ~~through~~applicable ~~2030 (except May 1~~federal, ~~2020~~state toand ~~March 31,~~local ~~2022).~~laws ~~Any~~in ~~significant~~the ~~spending~~United ~~reductions~~States ~~affecting~~and ~~Medicare,~~similar ~~Medicaid~~legal orrequirements in other ~~publicly funded or subsidized health programs,~~countries. orSee ~~any~~“Risk ~~significant~~Factors ~~taxes~~- orRisks ~~fees~~Related ~~imposed as part of any broader deficit reduction effort or legislative replacement~~ to ~~the~~Product ~~Budget Control Act~~Development, orRegulatory ~~otherwise~~Approval, ~~could~~Manufacturing ~~have~~and ~~an adverse impact on our anticipated product revenues~~Commercialization.”

If we market any of our product candidates or commercial products, in a manner that violates healthcare laws, we may be subject to civil or criminal penalties.

The occurrence of any event or penalty described above may inhibit our ability to commercialize TZIELD, or any other product candidates for which we obtain marketing approval, and generate revenue. Any government investigation of alleged violations of law could require us to expend significant time and resources in response and could generate negative publicity. Adverse regulatory action, whether pre- or post-approval, can also potentially lead to product liability claims and increase our product liability exposure.

Even though we may apply for orphan drug designation for TZIELD in additional indications or for our other product candidates, we may not be able to obtain such designation or obtain orphan drug marketing exclusivity. Even if we obtain orphan drug marketing exclusivity, it may not effectively protect the product from competition.

Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug 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 for which there is no reasonable expectation that the cost of developing and making a drug available in the United States for this type of disease or condition will be recovered from sales of the product. Orphan drug designation must be requested before submitting an NDA or a BLA. After the FDA grants orphan drug 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 regulatory review and approval process. In addition to the potential period of exclusivity, orphan designation makes a company eligible for grant funding to defray costs of clinical trial expenses, tax credits for clinical research expenses and potential exemption from the FDA application user fee. 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 drug exclusivity, which means the FDA may not approve any other applications to market the same drug for the same indication for seven years, except in limited circumstances, such as (i) the drug’s orphan designation is revoked; (ii) its marketing approval is withdrawn; (iii) the orphan exclusivity holder consents to the approval of another applicant’s product; (iv) the orphan exclusivity holder is unable to assure the availability of a sufficient quantity of drug; or (v) a showing of clinical superiority to the product with orphan exclusivity by a competitor product. If a drug designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan drug exclusivity. There can be no assurance that we will receive orphan drug designation for any of our product candidates in the indications for which we think they might qualify, if we elect to seek such applications.

We have obtained orphan drug designation from the FDA for TZIELD for the treatment of newly diagnosed T1D, however, there is no guarantee that the FDA, the European Commission or comparable foreign regulatory authorities will grant any future application for orphan drug designation for any of our other product candidates, which would make us ineligible for the additional exclusivity and other benefits of orphan drug designation, and may also impact our ability to obtain benefits under other incentive programs, such as the rare pediatric disease priority review voucher program. For example, we applied for, but did not receive, orphan drug designation or exclusivity for TZIELD for the use in individuals with Stage 2 T1D.

Even if we obtain orphan drug exclusivity for TZIELD for the treatment of newly diagnosed T1D in the United States, the FDA can still approve other drugs that have a different active ingredient for use in treating the same indication. Furthermore, the FDA can waive orphan drug exclusivity if we are unable to manufacture sufficient supply of TZIELD or if the FDA finds that a subsequent applicant for newly diagnosed T1D demonstrates clinical superiority to TZIELD. Accordingly, orphan drug exclusivity for a product may not effectively protect the product from competition.

InAlthough ~~addition~~we tomay ~~governmental~~apply efforts in the United States, foreign jurisdictions as well as private health insurers and managed care plans are likely to continue challenging manufacturers’ ability to obtain reimbursement, as well as the level of reimbursement, for ~~pharmaceuticals and~~rare ~~other~~pediatric ~~healthcare-related~~disease ~~products~~designation ~~and services. These cost-control initiatives could significantly decrease the available coverage and the price we might establish~~ for our ~~products,~~product which would have an adverse effect on our financial results. The pricing and reimbursement of medicinal products in the European Union and the UK is subject to strict governmental control. Pricing and reimbursement negotiations with governmental authorities are complex and may take significant amounts of time. To obtain reimbursement and/or pricing approval in the European Union Member States and/or the UKcandidates, we may not be ~~required~~able to ~~conduct~~obtain ~~studies or otherwise provide data demonstrating the cost effectiveness of our products compared with other available established therapies. The conduct of~~ such ~~studies could also result in delays in the commercialization of our products. Additionally~~designation, ~~cost-control initiatives, increasingly based on affordability~~ and ~~accessibility,~~rare aspediatric ~~well~~disease asdesignation ~~post-marketing~~does ~~assessment~~not ofguarantee ~~the~~that ~~product’s added value as compared to existing treatments, could decrease~~ the ~~price of~~NDA ~~our products~~ or ~~the~~BLA ~~indications~~ for ~~which we are able to obtain reimbursement, which would result in lower revenues to us. New legislative and policy initiatives in~~ the ~~European~~product ~~Union,~~will ~~aimed~~qualify atfor ~~increasing~~a ~~accessibility~~priority ~~and~~review ~~affordability~~voucher ~~of medicinal products, and the increased~~upon ~~cooperation between the European Union Member States may further impact the price and reimbursement status of our products in the future~~approval.

IfUnder wethe ~~fail~~Rare toPediatric ~~successfully~~Disease ~~commercialize~~Priority ~~any~~Review Voucher program, upon the approval of ~~our~~a ~~product~~qualifying ~~candidates~~BLA or NDA for the treatment of a rare pediatric disease, wethe ~~may~~sponsor ~~need~~of such an application would be awarded a rare pediatric disease priority review voucher that can be used to ~~acquire~~obtain ~~additional~~priority review for a subsequent BLA or NDA. On December 27, 2020, the Creating Hope Reauthorization Act extended the Rare Pediatric Disease Priority Review Voucher Program, and after September 30, 2024, the FDA may only award a voucher for an approved rare pediatric disease product ~~candidates~~application if the sponsor has rare pediatric disease designation for the drug, and ~~our~~that ~~business~~designation was granted ~~will~~by beSeptember ~~adversely~~30, ~~affected~~2024. After September 30, 2026, the FDA may not award any rare pediatric disease priority review vouchers.

We ~~have~~submitted ~~never~~a ~~developed~~request ~~and obtained approval~~ for, ~~any~~but ~~product~~did ~~candidates or commercialized any product candidates. We have limited product candidates and do~~ not ~~have any other compounds in pre-clinical testing~~receive, ~~lead~~rare ~~optimization~~pediatric ordisease ~~lead~~designation ~~identification~~for ~~stages~~TZIELD ~~beyond~~for ~~our~~the ~~product candidates.~~use Wein ~~cannot~~individuals bewith ~~certain~~Stage ~~that~~2 ~~any of our product candidates will prove to be sufficiently effective and safe to meet applicable~~T1D. ~~regulatory~~Because ~~standards for any indication. If~~ we ~~fail~~received toFDA ~~successfully obtain regulatory~~ approval orfor ~~commercialize any of~~ our ~~product~~BLA ~~candidates~~ for ~~their targeted indications~~TZIELD, ~~whether~~any asfuture ~~stand-alone~~applications ~~therapies~~for orTZIELD inas ~~combination~~a ~~with~~monotherapy ~~other~~will ~~therapeutic~~be ~~agents,~~ineligible ~~and~~for ~~if we are unable~~rare topediatric ~~acquire~~disease ~~additional~~designation ~~product~~or ~~candidates~~a inrare ~~the~~pediatric ~~future,~~disease ~~our~~priority ~~business~~review ~~will be adversely affected~~voucher.

~~Even~~There ifis weno ~~receive~~guarantee ~~regulatory~~that ~~approval~~the FDA will grant any future requests for rare pediatric disease designation for any of our product candidates. Moreover, even if we ~~may~~obtain ~~not~~rare bepediatric ~~able~~disease designation, there is no guarantee that we will qualify for a rare pediatric disease priority review voucher upon FDA approval of the NDA or BLA for a rare pediatric disease. Rare pediatric disease designation does not lead to ~~successfully~~faster ~~commercialize~~development or regulatory review of the product, ~~and~~ or increase the ~~revenue~~likelihood that weit ~~generate~~will ~~from~~receive ~~its~~marketing ~~sales,~~approval ifor pricing ~~any,~~and ~~may~~reimbursement ~~be limited~~approval.

IfAlthough ~~approved~~we ~~for~~may ~~marketing,~~pursue ~~the~~expedited ~~commercial~~regulatory ~~success~~approval ofpathways ~~our~~for ~~product~~TZIELD ~~candidates~~in ~~will~~additional ~~depend~~indications ~~upon~~or ~~each~~for our product’s ~~acceptance~~candidates, bythey ~~the~~may ~~medical~~not ~~community,~~qualify ~~including~~for ~~physicians,~~expedited ~~patients~~development ~~and~~or, ~~health~~if ~~care~~they ~~payors.~~do ~~The~~qualify ~~degree~~for ofexpedited ~~market~~development, ~~acceptance~~it ~~for~~may ~~any~~not ofactually ~~our~~lead ~~product~~to ~~candidates~~a ~~will~~faster development ~~depend~~or onregulatory areview ~~number~~or ofapproval ~~factors, including:~~process.

●Although we ~~demonstration~~believe ofthere ~~clinical~~may ~~safety~~be ~~and~~an ~~efficacy;~~opportunity ● relative convenience, dosing burden and ease of administration; ● the prevalence and severity of any adverse events and the overall safety profile; ● the clinical indications for which our products are approved; ● the acceptance of physicians to ~~include~~accelerate ~~T1D screening in routine patient medical care; ●~~ the ~~willingness~~development of ~~physicians~~TZIELD to prescribe our product candidates, and the target patient population to try new therapies; ● the willingness of physicians and patients to accept 14 consecutive days of IV therapy; ● efficacy of our product candidates compared to future competing products or therapies; ● the introduction of any new products that may in ~~the~~additional ~~future become available targeting~~ indications ~~for which our product candidates may be approved; ● new procedures~~ or ~~therapies~~certain ~~that may reduce the incidences~~ of ~~any of the indications in which~~ our product candidates through ~~may~~one ~~show utility; ● pricing and cost-effectiveness; ● the inclusion~~ or ~~omission~~more of ~~our product candidates in applicable therapeutic and vaccine guidelines; ●~~ the ~~effectiveness~~FDA’s ~~of our own~~ or ~~any future collaborators~~EMA’s ~~sales~~expedited ~~and marketing strategies; ● limitations or warnings contained in approved labeling from regulatory authorities~~programs, ~~including~~such ~~any~~as ~~interactions~~fast ~~of our products with other medicines patients are taking; ● our ability to obtain and maintain sufficient third-party coverage or reimbursement from government health care programs~~track, ~~including~~breakthrough ~~Medicare and Medicaid~~therapy, ~~private~~accelerated ~~health insurers and other third-party payors~~ approval or topriority ~~receive~~review, ~~the~~we ~~necessary~~cannot ~~pricing~~be ~~approvals~~assured ~~from~~that ~~government~~any ~~bodies regulating the pricing and usage~~ of ~~therapeutics;~~our ~~and~~products ●will ~~the~~qualify ~~willingness~~for ofsuch ~~patients to pay out-of-pocket in the absence of third-party coverage or reimbursement or government pricing approvals~~programs.

For example, in the United States, a drug may be eligible for designation as a breakthrough therapy if the drug is intended, alone or in combination with one or more other drugs, to treat a serious or life-threatening condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. Although breakthrough designation or access to any other expedited program may expedite the development or approval process, it does not change the standards for approval. If we apply for breakthrough therapy designation or any other expedited program for TZIELD in additional indications or our product candidates, the FDA may determine that our proposed target indication or other aspects of our clinical development plans do not qualify for such expedited program. Even if we are successful in obtaining a breakthrough therapy designation or access to any other expedited program, we may not experience faster development timelines or achieve faster review or approval compared to conventional FDA procedures. For example, the time required to identify and resolve issues relating to chemistry, manufacturing and controls, the acquisition of a sufficient supply of our product for clinical trial purposes or the need to conduct additional preclinical or clinical studies may delay approval by the FDA, even if the product qualifies for a breakthrough therapy designation or access to any other expedited program. Access to an expedited program may also be withdrawn by the FDA if it believes that the designation is no longer supported by data from our clinical development program. Additionally, qualification for any expedited review procedure does not ensure that we will ultimately obtain regulatory approval for such product.

IfCurrent ~~any~~and offuture ~~our~~changes ~~product~~related ~~candidates~~to ~~are~~regulation ~~approved,~~of ~~but~~TZIELD door ~~not~~our ~~achieve~~product ancandidates ~~adequate~~by ~~level~~the ofFDA ~~acceptance~~or bysimilar ~~physicians,~~foreign ~~health~~regulatory ~~care~~authority ~~payors,~~may ~~and~~increase ~~patients,~~the wedifficulty ~~may not generate sufficient revenue~~ and wecost ~~may~~for ~~not~~us ~~be able~~ to ~~achieve~~obtain ormarketing ~~sustain~~approval ~~profitability.~~of ~~Our~~or ~~efforts~~commercialize ~~to educate the medical community and third-party payors on the benefits of~~ our ~~product candidates may require significant resources and may never be successful~~products.

In ~~addition, even if we obtain regulatory approvals,~~ the ~~timing~~United orStates ~~scope~~and ofsome ~~any~~foreign ~~approvals may prohibit or reduce our ability to commercialize our product candidates successfully. For example~~jurisdictions, ifthere ~~the~~have ~~approval~~been ~~process~~a ~~takes~~number ~~too~~of ~~long,~~legislative weand ~~may~~regulatory ~~miss~~changes ~~market opportunities~~ and ~~give~~proposed ~~other~~changes ~~companies~~regarding the ~~ability~~healthcare tosystem ~~develop~~that ~~competing~~could ~~products~~prevent or ~~establish~~delay ~~market~~marketing ~~dominance. Any regulatory~~ approval wefor ~~ultimately obtain may be limited or subject to restrictions or post-approval commitments that render~~ our product candidates ~~not commercially viable. For example~~, ~~regulatory~~ ~~authorities~~restrict ~~may approve any of our product candidates for fewer~~ or ~~more~~regulate ~~limited indications than we request, may grant~~ post-approval ~~contingent~~activities onand ~~the~~affect ~~performance of costly post-marketing clinical trials, or may approve any of~~ our ~~product~~ability candidates with a label that does not include the labeling claims necessary or desirable for the successful commercialization for that indication. Further, the FDA or comparable foreign regulatory authorities may place conditions on approvals or require risk management plans or a REMS, to ~~assure the~~profitably ~~safe~~sell ~~use~~TZIELD ofand ~~the~~any ~~drug.~~other ~~Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of our~~ product candidates. ~~Moreover, product approvals may be withdrawn~~ for ~~non-compliance~~which ~~with~~we ~~regulatory~~obtain ~~standards or if problems occur following the initial~~ marketing ~~of the product~~approval. ~~Any of the foregoing scenarios could materially harm the commercial success of our product candidates.~~

WeLegislative ~~currently~~and regulatory proposals have abeen ~~limited~~made ~~commercial~~to ~~organization~~expand post-approval requirements and restrict sales and promotional activities for pharmaceutical products. IfWe wedo ~~are~~not ~~unable~~know towhether ~~establish~~additional ~~satisfactory~~legislative ~~sales~~changes ~~and~~will ~~commercial~~be ~~support~~enacted, ~~and~~or ~~marketing~~whether the FDA regulations, guidance or interpretations ~~capabilities~~will be changed, weor ~~may~~what ~~not~~the ~~successfully~~impact ~~commercialize~~of such changes on the marketing approval of TZIELD, if any, may be. In addition, increased scrutiny by the United States Congress (“Congress”) of ~~our~~the FDA’s approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product ~~candidates~~labeling and post-marketing testing and other requirements.

WeThe ~~have~~FDA’s ~~been~~and ~~gradually~~other ~~building~~regulatory ~~our~~authorities’ ~~commercial~~policies ~~infrastructure~~may change, and atadditional ~~present~~government regulations may be enacted that could prevent, welimit ~~have~~or ~~only~~delay ~~limited~~regulatory ~~sales~~approval ~~personnel~~of our product candidates. InWe ~~order~~also tocannot ~~commercialize~~predict the likelihood, nature, or extent of adverse ~~products~~government regulation that ~~are~~may ~~approved~~arise ~~for~~from ~~commercial~~pending ~~sales~~or future legislation or administrative action, weeither ~~must~~in ~~develop~~the ~~our~~United ~~own~~States ~~sales~~or ~~infrastructure~~abroad. For Ifexample, weon ~~are~~March ~~not~~27, ~~successful~~2020, ~~recruiting~~Congress ~~sales personnel~~enacted orthe Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) in response ~~building~~to ~~our~~the ~~sales~~COVID-19 pandemic. Among other provisions, the CARES Act made a number of changes to the FDCA aimed at preventing drug shortages. Similarly, the FDA has issued a number of guidance documents describing the agency’s expectations for how drug manufacturers should comply with various FDA requirements during the pandemic, including with respect to conducting clinical trials, distributing drug samples, and reporting post-marketing ~~infrastructure~~adverse events. Moreover, as a result of the COVID-19 pandemic, there has been increasing political and regulatory scrutiny of drug supply chains, resulting in proposed and enacted legislative and executive actions, including Executive Orders, to incentivize or compel drug manufacturing operations to relocate to the United States,. It is not clear how these changes and proposals could impact our business. If we ~~will~~are ~~have~~slow ~~difficulty~~or ~~successfully~~unable ~~commercializing~~to adapt to ~~our~~changes ~~product~~in ~~candidates~~existing requirements or the adoption of new requirements or policies, ~~which~~or ~~would~~if ~~adversely~~we ~~affect~~are ~~our~~not ~~business~~able to maintain regulatory compliance, we ~~operating~~may ~~results~~lose any marketing approval that we may have obtained, and ~~financial~~we ~~condition~~may not achieve or sustain profitability.

IfHealthcare wereform ~~are~~and ~~unable~~other togovernmental ~~establish~~and aprivate ~~satisfactory~~payor ~~sales~~initiatives ~~infrastructure, we~~ may ~~not~~have ~~realize~~an aadverse ~~positive~~effect ~~return on this investment. In addition~~upon, we ~~will have to compete with established~~ and ~~well-funded~~could ~~pharmaceutical and biotechnology companies to recruit~~prevent, ~~hire,~~commercial ~~train~~success ~~and retain~~of ~~sales~~TZIELD ~~personnel.~~and ~~Factors~~any ~~that~~other ~~may inhibit our efforts to commercialize our~~ product candidates ~~without~~for ~~strategic~~which ~~partners~~we orobtain ~~licensees include:~~marketing approval.

●The United ~~our~~States ~~inability~~government ~~to recruit~~ and ~~retain~~individual ~~adequate~~states ~~numbers~~have ofbeen ~~effective~~aggressively ~~sales,~~pursuing ~~market~~healthcare ~~access,~~reform ~~patient~~that ~~services,~~would ~~medical~~impact ~~affairs and other key commercial personnel; ●~~ the ~~inability~~delivery of, ~~sales personnel to obtain access to~~ and/or payment ~~persuade~~for, ~~adequate numbers of physicians to prescribe any of our product candidates; ● the lack of complementary products to be offered by sales personnel~~healthcare, which ~~may~~include ~~put~~initiatives usintended ~~at a competitive disadvantage relative~~ to ~~companies~~reduce ~~with~~the ~~more~~cost ~~extensive~~of ~~product~~healthcare ~~lines;~~generally and ●drug ~~unforeseen costs and expenses associated with creating an independent commercial organization~~specifically.

WeFor ~~may~~example, ~~enter~~in ~~into~~March ~~collaborations~~2010, ~~with~~the ~~third~~United ~~parties~~States ~~for~~Congress enacted the ~~research~~Patient Protection and Affordable Care Act, ~~development~~as modified by the Health Care and Education Reconciliation Act (the “ACA”), which, among other things, expanded healthcare coverage through Medicaid expansion and ~~commercialization~~the implementation of ~~certain~~the individual health insurance mandate; included changes to the coverage and reimbursement of drug products under government healthcare programs; required manufacturers to provide discounts on Medicare Part D brand name prescription drugs sold to Medicare beneficiaries in the ~~product~~Medicare ~~candidates~~Part D coverage gap (i.e., the so-called “donut hole”); imposed an annual wefee ~~may~~on ~~develop~~manufacturers of branded drugs; and expanded government enforcement authority. IfSince ~~any~~its ~~such~~enactment, ~~collaborations~~there ~~are~~have ~~not~~been ~~successful~~and likely will be judicial, weadministrative, ~~may~~executive, and legislative challenges to certain aspects of the ACA. For example, tax reform legislation was enacted at the end of 2017 that eliminates the tax penalty for individuals who do not bemaintain ~~able~~sufficient health insurance coverage beginning in 2019 (the so-called “individual mandate”). More recently, in June 2021, the U.S. Supreme Court dismissed the latest judicial challenge to ~~capitalize~~the ACA brought by several states without specifically ruling on the ~~market~~constitutionality ~~potential~~ of ~~those~~the ~~product~~ACA. Changes ~~candidates~~resulting from any successful challenges or other future modifications may have a material impact on our business.

WeBeyond ~~may~~the ~~seek~~ACA, ~~additional~~there ~~third-party~~have ~~collaborators~~been ongoing legislative and administrative reform efforts that affect pricing or payment for drug products or the healthcare ~~research,~~industry ~~development,~~more generally. Drug pricing and ~~commercialization~~payment reform was a focus of ~~certain~~the Trump Administration and has been a focus of the Biden ~~product~~Administration. ~~candidates~~For example, federal legislation enacted in 2021 eliminates a statutory cap on Medicaid drug rebate program rebates weeffective ~~may~~January ~~develop~~1, 2024. IfAs weanother ~~enter~~example, ~~into~~in ~~any~~2022, ~~such~~the ~~arrangements~~Inflation ~~with~~Reduction ~~any~~Act ~~third~~(“IRA”) ~~parties~~of 2022 contains various drug pricing and payment provisions. Among other provisions, wethe ~~will~~IRA ~~likely~~imposes ~~have~~a ~~limited~~yearly ~~control~~cap ~~over~~($2,000 in 2025) on out-of-pocket prescription drug costs in Medicare Part D, implements a new Medicare Part D manufacturer discount drug program in 2025; requires manufacturers to pay a rebate to the ~~amount~~federal government if prices for single-source drugs and biologicals covered under Medicare Part B and nearly ~~timing~~all covered drugs under Part D increase faster than the rate of ~~resources~~inflation ~~that~~and, ~~our~~starting ~~collaborators~~in ~~dedicate~~2026, tocreates a drug price negotiation program under which the ~~development~~prices for certain high Medicare spend drugs and biologicals without generic or ~~commercialization~~biosimilar ofcompetition ~~any~~will ~~product~~be limited ~~candidates~~by wea ~~may~~cap ~~seek~~that is defined by reference to, among other things, a specified non-federal average manufacturer price. Such legislative ~~develop~~changes ~~with~~or ~~them~~other changes could affect the market conditions for our products. ~~Our~~We ~~ability~~expect tocontinued ~~generate~~scrutiny ~~revenues~~on drug pricing and government price reporting from ~~these~~Congress, ~~arrangements~~agencies, ~~will~~and ~~depend~~other onbodies. ~~our~~Other ~~collaborators’~~federal ~~abilities~~and state health care initiatives responded to ~~successfully~~the COVID-19 pandemic, increasing funding for certain ~~perform~~services or providing enhanced flexibility in coverage for certain services. Certain initiatives were implemented only for the ~~functions~~duration of ~~assigned~~the topublic ~~them~~health inemergency, ~~these~~which ~~arrangements~~the Biden administration has announced will expire on May 11, 2023. WeThe ~~cannot~~expiration ~~predict~~of the ~~success~~initiatives may adversely affect demand or payment for our product. For example, increased federal Medicaid funding will be phased out on 2023 and state Medicaid programs will resume eligibility redeterminations for individuals receiving Medicaid benefits which could result in a loss of ~~any~~eligibility ~~collaboration~~for ~~that~~a weportion ~~enter~~of ~~into~~the current Medicaid population.

Collaborations pose numerous risks to us, including the following:

● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;

●Some of ~~collaborators~~the ~~may~~health ~~not~~care ~~pursue~~reform ~~development~~changes ~~and~~have ~~commercialization~~been ofand ~~any product candidates we~~ may ~~develop~~continue orto ~~may~~be ~~elect~~subject ~~not~~ to ~~continue~~legal orchallenge. ~~renew~~For ~~development or commercialization programs based on clinical trial results~~example, ~~changes~~courts intemporarily ~~the~~enjoined regulations ~~collaborator’s strategic focus or available funding or external factors such as an acquisition~~ that ~~diverts~~would ~~resources~~implement ~~or creates competing priorities; ● collaborators may delay clinical trials, provide insufficient funding for~~ a ~~clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct~~ new ~~clinical~~“most ~~trials,~~favored ornation” ~~require~~payment amodel ~~new formulation of a product candidate~~ for ~~clinical~~select ~~testing;~~drugs ●covered ~~collaborators~~under ~~could~~Medicare ~~independently~~Part ~~develop, or develop with third parties, products~~ B that ~~compete~~was ~~directly or indirectly with our medicines or product candidates we may develop if the collaborators believe that competitive products are more likely~~ to betake ~~successfully~~effect ~~developed~~on orJanuary ~~can~~1, be2021 ~~commercialized~~and ~~under~~would ~~terms~~limit ~~that~~payment ~~are~~based ~~more~~on ~~economically~~international ~~attractive~~drug ~~than~~price ~~ours; ● collaborators with marketing~~ and ~~distribution~~CMS ~~rights~~subsequently toissued ~~one~~a ornotice of ~~more~~proposed ~~products~~rulemaking ~~may not commit sufficient resources~~ to ~~the~~rescind ~~marketing~~ and ~~distribution~~remove ofthe ~~such~~regulations. ~~product~~As oranother ~~products; ● collaborators may not properly obtain~~example, ~~maintain,~~revisions ~~enforce,~~to orregulations ~~defend~~under ~~our~~the ~~intellectual~~federal ~~property~~anti-kickback statute orwould ~~proprietary~~remove ~~rights~~protection orfor ~~may~~traditional ~~use~~Medicare ~~our~~Part ~~proprietary~~D ~~information~~discounts inoffered ~~such~~by apharmaceutical ~~way~~manufacturers as to ~~invite~~pharmacy ~~litigation~~benefit managers ~~that~~and ~~could~~health ~~jeopardize~~plans. orPursuant ~~invalidate our proprietary information or expose us~~ to ~~potential~~court ~~litigation;~~order, ~~● disputes may arise between~~ the ~~collaborators~~removal ~~and~~was ~~us that result in the delay or termination of the research~~delayed, ~~development, or commercialization of our products or product candidates or that result in costly litigation or arbitration that diverts management attention~~ and ~~resources;~~the ●IRA we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control; ● collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further ~~development~~delayed orimplementation ~~commercialization~~ of the ~~applicable~~rule ~~product~~until January ~~candidates~~1, we2032. ~~may~~As ~~develop;~~another ●example, ~~collaboration~~there ~~partners~~are ~~may~~ongoing ~~engage~~challenges inby ~~fraudulent~~manufacturers orunder ~~illegal activity that violate~~ the ~~regulations~~340B ofDrug ~~the~~Discount ~~FDA~~Program ~~and~~to ~~other regulators, including those laws requiring~~ the ~~reporting~~ application of ~~true,~~340B ~~complete~~discounted ~~and~~pricing ~~accurate information~~ to ~~such~~products ~~regulators,~~dispensed ~~manufacturing~~by ~~standards,~~pharmacies ~~healthcare~~under ~~fraud~~contract ~~and~~with ~~abuse~~health ~~laws~~care ~~and~~providers ~~regulations~~participating in the ~~United~~program as ~~States~~well ~~and~~as ~~internationally or laws that require~~ the ~~true,~~implementation ~~complete and accurate reporting~~ of ~~financial~~the ~~information~~340B orDrug ~~data;~~Discount ~~and~~Program ●administrative ~~collaboration~~dispute ~~agreements~~resolution ~~may~~process ~~not~~for ~~lead~~disputes tobetween ~~development~~manufacturers and or340B ~~commercialization~~health ofcare ~~product candidates in the most efficient manner or at all~~providers. IfThe aresolution ~~present or future collaborator~~ of ~~ours~~these ~~were~~challenges tomay behave ~~involved in~~ a ~~business~~material ~~combination,~~adverse ~~the~~impact ~~continued pursuit and emphasis~~ on our ~~product~~revenue ~~development~~as ora ~~commercialization~~participant in ~~program~~the ~~under~~340B ~~such~~Drug ~~collaboration~~Discount ~~could be delayed, diminished, or terminated~~Program.

IfAdoption ~~our~~of ~~collaborations~~new dohealthcare ~~not~~reform ~~result~~legislation inat the ~~successful~~federal ~~development~~or ~~and~~state ~~commercialization~~level ofcould ~~product~~affect ~~candidates~~demand for, or ifpricing ~~one~~ of ~~our collaborators terminates its agreement with us~~, weTZIELD ~~may~~and ~~not receive~~ any ~~future~~other ~~research~~product candidates ~~funding~~for orwhich ~~milestone~~we orobtain ~~royalty~~marketing ~~payments under the collaboration~~approval. If weWe docannot ~~not~~predict, ~~receive~~however, the ~~funding~~ultimate ~~we expect under these agreements~~content, ~~our~~timing ~~development~~or effect of ~~product~~any ~~candidates could be delayed, and we may~~healthcare ~~need~~reform ~~additional~~legislation ~~resources~~or ~~to develop product candidates. In addition~~action, ifor ~~one of our collaborators terminates~~ its ~~agreement~~impact ~~with~~on us, ~~we may~~and ~~find~~healthcare itreform ~~more~~could ~~difficult~~increase tocompliance ~~find~~costs ~~a suitable replacement collaborator or attract new collaborators,~~ and ~~our~~may ~~development~~adversely ~~programs~~affect ~~may~~our befuture ~~delayed or the perception of us in the~~ business and financial ~~communities could be adversely affected~~results. ~~All of the risks relating to product development, regulatory approval and commercialization described in this Annual Report on Form 10-K apply to the activities of our collaborators.~~

In addition, other legislative changes have been adopted that could have an adverse effect upon, and could prevent, the commercial success of TZIELD and any other product candidates for which we obtain marketing approval. More broadly, the Budget Control Act of 2011, as amended, or the Budget Control Act, includes provisions intended to reduce the federal deficit, including reductions in Medicare payments to providers through 2031. Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs, or any significant taxes or fees imposed as part of any broader deficit reduction effort or legislative replacement to the Budget Control Act, or otherwise, could have an adverse impact on our anticipated product revenues.

In addition to governmental efforts in the United States, foreign jurisdictions as well as private health insurers and managed care plans are likely to continue challenging manufacturers’ ability to obtain reimbursement, as well as the level of reimbursement, for pharmaceuticals and other healthcare-related products and services. These cost-control initiatives could significantly decrease the available coverage and the price we might establish for our products, which would have an adverse effect on our financial results. The pricing and reimbursement of medicinal products in the European Union and the United Kingdom is subject to strict governmental control. Pricing and reimbursement negotiations with governmental authorities are complex and may take significant amounts of time. To obtain reimbursement and/or pricing approval in the European Union Member States and/or the UK, we may be required to conduct studies or otherwise provide data demonstrating the cost effectiveness of our products compared with other available established therapies. The conduct of such studies could also result in delays in the commercialization of our products. Additionally, cost-control initiatives, increasingly based on affordability and accessibility, as well as post-marketing assessment of the product’s added value as compared to existing treatments, could decrease the price of our products or the indications for which we are able to obtain reimbursement, which would result in lower revenues to us. New legislative and policy initiatives in the European Union, aimed at increasing accessibility and affordability of medicinal products, and the increased cooperation between the European Union Member States may further impact the price and reimbursement status of our products in the future. On December 15, 2021, European Union legislatures adopted Regulation (EU) 2021/2282 of the European Parliament and of the Council on health technology assessment and amending Directive 2011/24/EU. The new Regulation will apply starting in January 2025, and will facilitate the greater coordination and cooperation within the European Union of an assessment of the relative clinical effectiveness and relative clinical safety of a new health technology as compared with existing technologies in a health technology assessment.

If we fail to successfully commercialize TZIELD or develop and commercialize any of our product candidates, we may need to acquire additional product candidates and our business will be adversely affected.

We have a limited product pipeline and do not have any other compounds in pre-clinical testing, lead optimization or lead identification stages beyond TZIELD and our product candidates. We cannot be certain that any of our product candidates will prove to be sufficiently effective and safe to meet applicable regulatory standards for any indication. If we fail to successfully commercialize TZIELD or successfully obtain regulatory approval, pricing and reimbursement approval, or commercialize any of our product candidates, whether as stand-alone therapies or in combination with other therapeutic agents, and if we are unable to acquire additional product candidates in the future, our business will be adversely affected.

We may not be able to successfully commercialize TZIELD or any other product candidates for which we obtain marketing approval and the revenue that we generate from its sales, if any, may be limited.

The commercial success of TZIELD and any other product candidates for which we obtain marketing approval depends upon each product’s acceptance by the medical community, including physicians, patients and payers. The degree of market acceptance for TZIELD depends on a number of factors, including:

	●	demonstration of clinical safety and efficacy;
	●	relative convenience, dosing burden and ease of administration;
	●	the prevalence and severity of any adverse events and the overall safety profile;
	●	the clinical indications for which our products are approved;
	●	the acceptance of physicians to include T1D screening in routine patient medical care;
	●	the willingness of physicians to prescribe our products, and the target patient population to try new therapies;
	●	the willingness of physicians and patients to accept 14 consecutive days of IV therapy;
	●	efficacy of our products compared to future competing products or therapies;
	●	the introduction of any new products that may in the future become available targeting indications for which our products are approved;
	●	new procedures or therapies that may reduce the incidences of any of the indications in which our products may show utility;
	●	pricing and cost-effectiveness;
	●	the inclusion or omission of our products in applicable therapeutic and vaccine guidelines;
	●	the effectiveness of our own or any future collaborators’ sales and marketing strategies;
	●	limitations or warnings contained in approved labeling from regulatory authorities, including any interactions of our products with other medicines patients are taking;
	●	our ability to obtain and maintain sufficient third-party coverage or reimbursement from government health care programs, including Medicare and Medicaid, private health insurers and other third-party payers or to receive the necessary pricing approvals from government bodies regulating the pricing and usage of therapeutics; and
	●	the willingness of patients to pay out-of-pocket in the absence of third-party coverage or reimbursement or government pricing approvals.

If TZIELD or any of our product candidates for which we obtain marketing approval do not achieve an adequate level of acceptance by physicians, health care payors, and patients, we may not generate sufficient revenue and we may not be able to achieve or sustain profitability. Our efforts to educate the medical community and third-party payers on the benefits of TZIELD or any other product candidates for which we obtain marketing approval may require significant resources and may never be successful.

In addition, even with regulatory approvals and pricing and reimbursement approvals, the timing or scope of any approvals may prohibit or reduce our ability to successfully commercialize TZIELD or any other product candidates for which we obtain marketing approval. For example, if the approval process takes too long, we may miss market opportunities and give other companies the ability to develop competing products or establish market dominance. Any regulatory approval we ultimately obtain may be limited or subject to restrictions or post-approval commitments that render TZIELD or our product candidates not commercially viable. For example, regulatory authorities may approve TZIELD or our product candidates for fewer or more limited indications than we request, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve our product with a label that does not include the labeling claims necessary or desirable for the successful commercialization for that indication. Further, the FDA or comparable foreign regulatory authorities may place conditions on approvals or require risk management plans or a REMS, to assure the safe use of the drug. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of TZIELD or our product candidates. Moreover, product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following the initial marketing of the product. Any of the foregoing scenarios could materially harm the commercial success of TZIELD or our product candidates.

We currently have hired a commercial organization to support the commercialization of TZIELD. If we are unable to establish and maintain satisfactory sales, commercial support and marketing capabilities, we may not successfully commercialize TZIELD or any other product candidates for which we obtain marketing approval.

We have hired a commercial organization to support the commercialization of TZIELD, including through the support provided by Sanofi under our Co-Promotion Agreement. In order to commercialize additional indications or products that are approved for commercial sales, we may need to expand our commercial infrastructure. If we are not successful recruiting sales personnel or in building our sales and marketing infrastructure in the United States, we will have difficulty successfully commercializing our product candidates for which we obtain marketing approval, which would adversely affect our business, operating results and financial condition.

If we are unable to establish and maintain a satisfactory and successful commercial infrastructure, we may not realize a positive return on this investment. In addition, we will have to compete with established and well-funded pharmaceutical and biotechnology companies to recruit, hire, train and retain sales personnel. Factors that may inhibit our efforts to commercialize TZIELD, or any other product candidates for which we obtain marketing approval, without strategic partners or licensees include:

	●	our inability to recruit and retain adequate numbers of effective sales, market access, patient services, medical affairs and other key commercial personnel;
	●	the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our products;
	●	the inability to secure reimbursement through third-party payers;
	●	the inability to catalyze adequate screening to identify appropriate patients;
	●	the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and
	●	unforeseen costs and expenses associated with creating an independent commercial organization.

We have entered into collaborations with third parties, and in the future may enter into additional collaborations with third parties, for the research, development, and commercialization of TZIELD and certain other product candidates we may develop. If any such collaborations are not successful, we may not be able to capitalize on the market potential of those product candidates.

We may seek additional third-party collaborators for the research, development, and commercialization of TZIELD and certain other product candidates we may develop. For example, in October 2022, we and Genzyme Corporation entered into the Sanofi Co-Promotion Agreement, pursuant to which we appointed Sanofi to co-promote and conduct certain commercialization activities with respect to TZIELD in the United States on a co-exclusive basis for the treatment of the approved indication. In any such arrangements with any third parties, we will likely have limited control over the amount and timing of resources that our collaborators dedicate to the development or commercialization of TZIELD or any other product candidates we may seek to develop with them. Our ability to generate revenues from these arrangements will depend on our collaborators’ abilities to successfully perform the functions assigned to them in these arrangements. We cannot predict the success of any collaboration that we enter into.

Collaborations pose numerous risks to us, including the following:

	●	collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations;
	●	collaborators may not pursue development and commercialization of any product candidates we may develop or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborator’s strategic focus or available funding or external factors such as an acquisition that diverts resources or creates competing priorities;
	●	collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

	●	collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates we may develop if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours;
	●	collaborators with marketing and distribution rights to one or more products may not commit sufficient resources to the marketing and distribution of such product or products;
	●	collaborators may not properly obtain, maintain, enforce, or defend our intellectual property or proprietary rights or may use our proprietary information in such a way as to invite litigation that could jeopardize or invalidate our proprietary information or expose us to potential litigation;
	●	disputes may arise between the collaborators and us that result in the delay or termination of the research, development, or commercialization of our products or product candidates or that result in costly litigation or arbitration that diverts management attention and resources;
	●	we may lose certain valuable rights under circumstances identified in our collaborations, including if we undergo a change of control;
	●	collaborations may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product or product candidates we may develop;
	●	collaboration partners may engage in fraudulent or illegal activity that violate the regulations of the FDA and other regulators, including those laws requiring the reporting of true, complete and accurate information to such regulators, manufacturing standards, healthcare fraud and abuse laws and regulations in the United States and internationally or laws that require the true, complete and accurate reporting of financial information or data; and
	●	collaboration agreements may not lead to development or commercialization of product candidates in the most efficient manner or at all. If a present or future collaborator of ours were to be involved in a business combination, the continued pursuit and emphasis on our product development or commercialization program under such collaboration could be delayed, diminished, or terminated.

If our collaborations, including the Sanofi Co-Promotion Agreement, do not result in the successful development and commercialization of our products, or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone or royalty payments under the collaboration. If we do not receive the funding we expect under these agreements, our development of product candidates could be delayed, and we may need additional resources to develop product candidates. In addition, if one of our collaborators terminates its agreement with us, we may find it more difficult to find a suitable replacement collaborator or attract new collaborators, and our development programs may be delayed or the perception of us in the business and financial communities could be adversely affected. All of the risks relating to product development, regulatory approval and commercialization described in this report apply to the activities of our collaborators.

These relationships, or those like them, may require us to incur non-recurring and other charges, increase our near- and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business. In addition, we could face significant competition in seeking appropriate collaborators, and the negotiation process is time-consuming and complex. Our ability to reach a definitive collaboration agreement will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed collaboration, and the proposed collaborator’s evaluation of several factors. If we license rights to any product candidates, we may not be able to realize the benefit of such transactions if we are unable to successfully integrate them with our existing operations and company culture.

If our Co-Promotion Agreement with Sanofi is terminated, or Sanofi materially breaches its obligations thereunder, our business, prospects, operating results, and financial condition, and our ability to commercialize TZIELD in the time expected, or at all, could be materially harmed.

We are relying on support from Sanofi to commercialize TZIELD. Under the Sanofi Co-Promotion Agreement, Sanofi has committed to making field resources representing more than 100 FTEs available for co-promotion and commercialization activities of TZIELD. As a result, we will rely in part on Sanofi’s sales and marketing organization for TZIELD. If the Sanofi-Co Promotion Agreement were terminated or breached, and we no longer had access to Sanofi’s field resources, we would be required to expend substantially more resources than we have anticipated to support our commercialization efforts. This could require us to either seek additional funding that might not be available on favorable terms or at all, or materially cut back on such activities. Termination of the Sanofi Co-Promotion Agreement would create substantial new and additional risks to the successful commercialization of TZIELD and could materially harm such commercialization.

Amgen has the right to assume control over the activities of our anti-IL-15 mAb product candidate.

Pursuant to the Amgen Agreement, Amgen reserves the right, at any time until 120 days after the delivery of the final data package relating to the Phase 2b PROACTIVE study which we initiated in August 2020, to assume control over all activities with respect to our anti-IL-15 ~~monoclonal~~ ~~antibody (“~~mAb”), product candidate, including pricing and marketing decisions, after the payment of a $150.0 million milestone. There can be no assurance that Amgen’s strategic direction will be in line with ours should it assume control of activities, or that their decisions will have a positive impact on our results of operations. Moreover, we may not realize the full economic benefit of this agreement.

We face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively.

The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change. We have existing competitors and will have potential new competitors in a number of jurisdictions, many of which have or will have substantially greater name recognition, commercial infrastructures and financial, technical and personnel resources than we have. Established competitors may invest heavily to quickly discover and develop novel compounds that could make ~~any~~TZIELD ofor our product candidates obsolete or uneconomical. Any new product that competes with an approved product may need to demonstrate compelling advantages in efficacy, cost, convenience, tolerability and safety to be commercially successful. Other competitive factors, including generic competition, could force us to lower prices or could result in reduced sales. In addition, new products developed by others could emerge as competitors to TZIELD or our product candidates. If we are not able to compete effectively against our current and future competitors, our business will not grow, and our financial condition and operations will suffer.

Our potential competitors both in the United States and throughout the world include companies developing and/or marketing drugs and therapeutic solutions for immune-mediated diseases, including oncological, autoimmune and inflammatory diseases, as well as companies working in our specific fields, including T1D, enteroviral and emerging viral diseases, lupus, and inflammatory bowel diseases, such as CD.

There can be no assurance that TZIELD or our product candidates will be more effective or achieve greater market acceptance than competitive products, or that our competitors will not succeed in developing products and technologies that are more effective than those being developed by by us or that would render our products and technologies less competitive or obsolete. Additionally, there can be no assurance that the development by others of new or improved products will not make TZIELD or our product candidates superfluous or obsolete.

~~Our~~TZIELD and our product candidates may face competition sooner than expected.

We ~~intend~~have toobtained ~~seek~~ data exclusivity ~~or market exclusivity~~ for ~~our~~TZIELD ~~monoclonal antibodies teplizumab~~ and ~~PRV-015,~~intend ~~our~~to ~~DART~~seek ~~molecule~~data ~~PRV-3279 and~~exclusivity ~~our~~or ~~PRV-101~~market ~~CVB~~exclusivity ~~vaccine~~for our product candidates ~~provided under the FDCA, and similar laws in other countries~~. In the United States, we believe that these ~~product~~products ~~candidates~~ will qualify for 12 years of data exclusivity under the ~~Biologics Price Competition and Innovation Act of 2009 (“~~BPCIA”), which was enacted as part of the ACA. Under the BPCIA, an application for a biosimilar product or BLA cannot be submitted to the FDA until four years, or if approved by the FDA, until 12 years, after the original brand product ~~identified~~ identified as the reference product is approved under a BLA. The BPCIA provides an abbreviated pathway for the approval of biosimilar and interchangeable biological products. The abbreviated regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on its similarity to an existing brand product. The law is complex and the processes the FDA establishes to implement the law could have a material adverse effect on the future commercial prospects for our biological ~~product candidates~~products. There is also a risk that Congress could repeal or amend the BPCIA to shorten this exclusivity period, potentially creating the opportunity for biosimilar competition sooner than anticipated after the expiration of our patent protection. Moreover, the extent to which a biosimilar, once approved, will be substituted for any reference product 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.

Our product candidates that are not, or are not considered, biologics that would qualify for exclusivity under the BPCIA may be eligible for market exclusivity as drugs under the FDCA. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. The Ensuring Innovation Act, enacted on April 23, 2021, amended the FDA’s statutory authority for granting such exclusivity to reflect the agency’s existing regulations and longstanding interpretation that award exclusivity based on a drug’s active moiety, as opposed to its active ingredient, which is intended to limit the applicability of this exclusivity, thereby potentially facilitating generic competition. During the exclusivity period, the FDA may not accept for review an abbreviated new drug application (“ANDA”), or a 505(b)(2) NDA, submitted by another company for another version of such drug. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement. The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages, or strengths of an existing drug. This three-year exclusivity covers only the conditions associated with the new clinical investigations and does not prohibit the FDA from approving 505(b)(2) NDAs or ANDAs for drugs containing the original active agent.76

73Our product candidates that are not, or are not considered, biologics that would qualify for exclusivity under the BPCIA may be eligible for market exclusivity as drugs under the FDCA. The FDCA provides a five-year period of non-patent marketing exclusivity within the United States to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. The Ensuring Innovation Act, enacted on April 23, 2021, amended the FDA’s statutory authority for granting such exclusivity to reflect the agency’s existing regulations and longstanding interpretation that award exclusivity based on a drug’s active moiety, as opposed to its active ingredient, which is intended to limit the applicability of this exclusivity, thereby potentially facilitating generic competition. During the exclusivity period, the FDA may not accept for review an ANDA, or a 505(b)(2) NDA, submitted by another company for another version of such drug. However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement. The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example, for new indications, dosages, or strengths of an existing drug. This three-year exclusivity covers only the conditions associated with the new clinical investigations and does not prohibit the FDA from approving 505(b)(2) NDAs or ANDAs for drugs containing the original active agent.

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Even if TZIELD or our product candidates are considered to be reference products eligible for 12 years of exclusivity under the BPCIA or five years of exclusivity under the FDCA, another company could market competing products if the FDA approves a full BLA or full NDA 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 the products. Moreover, an amendment or repeal of the BPCIA could result in a shorter exclusivity period for TZIELD or our product candidates, which would have a material adverse effect on our business.

In addition, the Further Consolidated Appropriations Act, 2020, which incorporated the framework from the Creating and Restoring Equal Access To Equivalent Samples (“CREATES”) legislation, was signed into law as part of the 2019 year-end federal spending package. The legislation purports to promote competition in the market for drugs and biological products by facilitating the timely entry of lower-cost generic and biosimilar versions of those drugs and biological products, including by allowing ANDA, 505(b)(2) NDA or biosimilar developers to obtain access to branded drug and biological product samples. While the full impact of these provisions is unclear at this time and initial litigation brought under this law is pending, its provisions do have the potential to facilitate the development and future approval of biosimilar or generic versions of our products if approved, introducing biosimilar or generic competition that could have a material adverse impact on our business, financial condition and results of operations.

Our future growth depends, in part, on our ability to penetrate international markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.

Our future profitability will depend, in part, on our ability to commercialize TZIELD and our product candidates in international markets for which we intend to rely on collaborations with third parties. If we commercialize ~~any~~TZIELD ofor our product candidates in international markets, we would be subject to additional risks and uncertainties, including:

● our customers’ ability to obtain reimbursement for our ~~product~~products ~~candidates~~ in international markets; ● our inability to directly control commercial activities because we are relying on third parties; ● the burden of complying with complex and changing international regulatory, tax, accounting and legal requirements; ● different medical practices and customs in foreign countries affecting acceptance in the marketplace; ● import or export licensing requirements; ● longer accounts receivable collection times; ● longer lead times for shipping; ● language barriers for technical training; ● reduced protection of intellectual property rights in some foreign countries; ● foreign currency exchange rate fluctuations; and ● the interpretation of contractual provisions governed by foreign laws in the event of a contract dispute.

International sales of our product candidates could also be adversely affected by the imposition of governmental controls, political and economic instability, trade restrictions and changes in tariffs, any of which may adversely affect our results of operations.

If we market any of our product candidates or, if approved, commercial products, in a manner that violates healthcare laws, or if we violate government price reporting laws, we may be subject to civil or criminal penalties.

The marketing and sale of pharmaceutical products are subject to comprehensive governmental regulation within the United States, with similar requirements in other jurisdictions. Numerous federal

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