10-K
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-K

 

(Mark One)

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

For the fiscal year ended December 31, 2021

OR

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 001-40353

 

IMPEL NEUROPHARMA, INC.

(Exact name of Registrant as specified in its Charter)

 

 

Delaware

 

26-3058238

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

201 Elliott Avenue West, Suite 260, Seattle, WA

(Address of principal executive offices)

 

98119

(Zip Code)

 

 

Registrant’s telephone number, including area code: (206) 568-1466

 

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, par value $0.001 per share

IMPL

The Nasdaq Stock 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 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, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

 

 

Accelerated filer

 

Non-accelerated filer

 

 

 

Smaller reporting company

 

 

 

 

 

Emerging growth company

 

 

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

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant on June 30, 2021 (the last business day of the Registrant’s second fiscal quarter), based upon the closing price of $8.85 of the Registrant’s common stock as reported on The Nasdaq Global Market, was approximately $39.1 million.

The number of shares of Registrant’s Common Stock outstanding as of March 16, 2022 was 23,148,150.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

Part III incorporates information by reference from the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission pursuant to Regulation 14A, not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K, in connection with the registrant’s 2022 Annual Meeting of Stockholders (the “2022 Proxy Statement”).

 

 


 

Table of Contents

 

 

 

 

Page

PART I

 

 

 

Item 1.

 

Business

3

Item 1A.

 

Risk Factors

37

Item 1B.

 

Unresolved Staff Comments

76

Item 2.

 

Properties

77

Item 3.

 

Legal Proceedings

77

Item 4.

 

Mine Safety Disclosures

77

Part II

 

 

 

Item 5.

 

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

78

Item 6.

 

[Reserved]

78

Item 7.

 

Management's Discussion and Analysis of Financial Condition and Results of Operations

79

Item 7A.

 

Quantitative and Qualitative Disclosures About Market Risk

91

Item 8.

 

Financial Statements and Supplementary Data

92

Item 9.

 

Changes in Disagreements with Accountants on Accounting and Financial Disclosure

119

Item 9A.

 

Controls and Procedures

119

Item 9B.

 

Other Information

119

Item 9C.

 

Disclosures Regarding Foreign Jurisdictions that Prevent Inspections

119

Part III

 

 

 

Item 10.

 

Directors, Executive Officers and Corporate Governance

120

Item 11.

 

Executive Compensation

120

Item 12.

 

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

120

Item 13.

 

Certain Relationships and Related Transactions, and Director Independence

120

Item 14.

 

Principal Accountant Fees and Services

120

Part IV

 

 

 

Item 15

 

Exhibits and Financial Statement Schedules

120

Item 16

 

Form 10-K Summary

122

 

Signatures

123

 

 


 

PART 1

 

Special Note Regarding Forward-Looking Statements

 

This Annual Report on Form 10-K contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. This section should be read in conjunction with our audited consolidated financial statements and related notes included in Part II, Item 8 of this report. The statements contained in this report that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

 

In some cases, you can identify forward-looking statements by such terminology as “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “intend,” “could,” “would,” “project,” “plan,” “expect” and similar expressions that convey uncertainty of future events or outcomes, although not all forward-looking statements contain these words. Forward-looking statements include, but are not limited to, statements about:

 

our ability to successfully execute our commercialization strategy for Trudhesa;
our ability to obtain and maintain regulatory approval of our product candidates, and any related restrictions, limitations or warnings in the label of any approved product;
the timing or likelihood of regulatory filings and approvals;
the size and growth potential of the market for Trudhesa and the markets for our other product candidates, if approved for commercial use, and our ability to serve those markets;
the success, cost and timing of our development activities, preclinical studies and clinical trials;
the number, size and design of clinical trials that regulatory authorities may require to obtain marketing approval;
our plans relating to the future development and manufacturing of our product candidates, including plans for future development of our POD devices and plans to address additional indications for which we may pursue regulatory approval;
future agreements with third parties in connection with preclinical and clinical development as well as the manufacture and commercialization of our product candidates, if approved for commercial use;
our ability to attract customers for any approved products;
the effect of litigation, complaints or adverse publicity on our business;
our ability to expand our sales force to address effectively the new indications, geographies and types of organizations we intend to target;
our ability to forecast and maintain an adequate rate of revenue growth and appropriately plan our expenses;
our liquidity and working capital requirements;
our ability to attract and retain qualified employees and key personnel;
our ability to protect and enhance our brand and intellectual property;
the costs related to defending intellectual property infringement and other claims;
privacy, data security, and data protection laws, actual or perceived privacy or data breaches or other data security incidents, or the loss of data;
future regulatory, judicial, and legislative changes in our industry;
future arrangements with, or investments in, other entities or associations, products, services or technologies;
our estimates regarding expenses, future revenues, capital requirements and needs for additional financing; and the increased expenses and administrative workload associated with being a public company.

 

2


 

These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in this report in Part I, Item 1A — “Risk Factors,” and elsewhere in this report. These statements, like all statements in this report, speak only as of their date, and we undertake no obligation to update or revise these statements in light of future developments. In this report, “we,” “our,” “us,” “Impel,” and “the Company” refer to Impel Neuropharma, Inc.

 

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and although we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted a thorough inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

 

The marks “IMPEL,” “POD,” “Trudhesa,” “IMPELPOD” and the Impel NeuroPharma logo and our other registered or common law trade names, trademarks or service marks appearing in this report are the property of Impel. All other service marks, trademarks and trade names appearing in this report are the property of their respective owners.

 

PART I

Item 1. Business.

 

Overview

 

We are a commercial-stage biopharmaceutical company developing transformative therapies for people suffering from diseases with high unmet medical needs, with an initial focus on the Central Nervous System, or CNS. Our company was founded on the premise that the upper nasal space can be an optimal treatment entry point for CNS and other diseases where rapid vascular absorption can result in superior clinical outcomes. Our strategy is to pair our proprietary POD upper nasal delivery technology with well-established therapeutics or other therapeutics where rapid vascular absorption is preferred to drive therapeutic benefit, improve patient outcomes, reduce drug development risk and expand the commercial opportunity within our target diseases. On September 2, 2021, the FDA approved our NDA for Trudhesa, for the acute treatment of migraine headaches with or without aura in adult patients. We launched Trudhesa in early October 2021. Since 2016, we have identified and advanced several product candidates, including INP105 for the acute treatment of agitation and aggression in patients with Autism Spectrum Disorder, or ASD. Our pipeline of proprietary product candidates also includes INP107 for the treatment of OFF episodes in Parkinson’s Disease, which we are actively looking to partner for future development.

 

We have designed our proprietary POD technology to target the vascular-rich upper nasal space, and to provide rapid absorption, consistent drug biodistribution and ease of use for a patient, provider or caregiver. Our goal with our POD technology is to deliver injection-like clinical outcomes non-invasively. We believe that we are the first company to successfully harness the benefits of delivery to the upper nasal space to improve delivery and the pharmacologic potential of CNS therapies.

 

3


 

The following table summarizes our marketed product and development other product candidates, each of which is wholly owned:

 

https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_0.jpg 

 

POD Technology

 

Using our proprietary POD technology, we have developed devices that deliver therapeutics directly to the upper nasal space. These devices are designed to offer several key benefits compared to traditional nasal delivery systems, including:

 

Rapid Onset. The precise spray plume and biphasic nature of delivery to the upper nasal space allows for superior dose deposition and rapid absorption into the systemic circulation as compared to traditional nasal delivery systems.
Consistent Drug Bioavailability. Metered propellant dosing allows for more consistent blood levels than typically seen with traditional nasal sprays and are equivalent, or superior, to those achieved through IM injections.
Improved Patient-Provider Experience. Our proprietary gas propulsion mechanism eliminates the need for coordination of breathing and enables delivery of a dosing in 1/10th of a second, enabling self- or provider-administration in a manner that improves patient comfort and compliance.
Manufacturability. Separation of propellant and drug within the POD device helps streamline CMC development, as we are not constrained by the limits of co-formulating our therapeutics inside a pressurized propellant canister.
Formulation Versatility. The POD device is versatile and can deliver both liquid and powder formulations in order to potentially address a wide variety of indications across multiple therapeutic areas.
Strong Intellectual Property Position. We believe that we have a strong global intellectual property position relating to Trudhesa and our other product candidates. Our patent portfolio as of February 1, 2022, contained 8 U.S. issued patents and 34 patents issued in ex-U.S. jurisdictions related to Trudhesa, our POD technology, and combination products in development. We also have 13 U.S. pending applications as well as 80 patent applications pending in ex-U.S. jurisdictions. Our patent portfolio is expected to provide patent protection ranging from 2032 to 2040.

 

We believe that our in-house technical and development expertise positions us to address unmet medical needs across multiple therapeutic areas by delivering well-established and novel drugs consistently, rapidly and non-invasively. Our technical and development expertise has allowed us to rapidly identify and develop our product candidates to their current state in under five years. For example, INP105 was advanced from lead candidate selection to development of more than 20 formulations, the completion of five nonclinical studies, and ultimately a proof-of-concept clinical trial, within 16 months. We have tested over 30 small molecules and biologics for suitability of nasal drug administration with our proprietary

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POD technology. This depth of knowledge and experience, along with our proprietary technology, creates a platform for rapid additional pipeline expansion. In addition to our technology and development expertise, our strong intellectual property portfolio protects multiple aspects of our approach to delivering drug to the upper nasal space. We believe that our apparatus, composition of matter and method of use intellectual property can provide strong exclusivity protection to our product candidates.

 

Marketed Product and Our Development Product Candidates

 

Trudhesa (Acute Treatment of Migraine)

 

Trudhesa (formerly known as INP104) is a liquid formulation of DHE administered to the upper nasal space using our proprietary POD technology for the acute treatment of migraine headaches with or without aura in adults. Migraine is a growing market projected to triple in size to over $10 billion by 2028 with the introduction of multiple new product offerings and an expected increase in disease awareness and diagnosis. DHE is widely used as part of a standard of care for treatment of migraines, despite being limited to IV and injection delivery or traditional nasal administration. IV delivery requires administration in physicians’ offices, migraine clinics and hospitals, and traditional nasal administration has been challenged by inconsistent efficacy.

 

In June 2020, we announced the following exploratory efficacy results of our STOP301 trial to evaluate the safety and tolerability of long-term, intermittent use of Trudhesa as an acute treatment of migraine with or without aura in adult patients. In this trial, baseline results prior to trial initiation were based on migraine attacks where patients used their standard acute migraine medication. In the trial:

38% of patients were pain free at two hours after their first dose of Trudhesa.
52% of patients receiving Trudhesa were free of their most bothersome migraine symptom at two hours.
Patients treated with Trudhesa also demonstrated improvement in pain relief: 16% of patients treated with Trudhesa had pain relief within 15 minutes of treatment, and 66% had pain relief within two hours.

 

The exploratory endpoints of the trial also included an assessment of the following long-term outcomes of Trudhesa when patients were treated for six months:

39% of patients treated with Trudhesa remained pain free at two hours through three months of treatment and 35% of patients treated with Trudhesa remained pain free at two hours through six months of treatment.
Patients who received Trudhesa saw a 48% reduction in the frequency of their migraines compared to baseline during the 24-week trial.
93% and 86% of patients achieving pain freedom at two hours after their first dose of Trudhesa did not suffer a relapse in migraine or require a rescue medication at 24 hours and 48 hours, respectively.
Health economic data showed a meaningful reduction in the usage of healthcare resources by patients treated with Trudhesa versus their baseline. Emergency room visits were reduced by approximately 73% and hospitalizations and urgent care visits were reduced by 100%.

 

Although the trial was not powered to determine statistical significance of the exploratory efficacy endpoints, we believe these exploratory endpoints provide important data for evaluating the clinical benefit of Trudhesa and showed consistency with the generally understood benefits of DHE for the acute treatment of migraines. The primary endpoints of the STOP 301 trial were safety and tolerability of long-term, intermittent use. In this trial, Trudhesa was generally well tolerated. There were a total of seven treatment emergent SAEs, none of which were determined by the investigator to be related to Trudhesa or led to withdrawal from the trial. There were also no significant changes to sense of smell, and no significant abnormal findings from nasal endoscopy examinations.

 

In November 2020, we submitted an NDA for Trudhesa for the acute treatment of migraine headaches with or without aura in adult patients. On September 2, 2021, the FDA approved our NDA for Trudhesa for the acute treatment of migraine headaches with or without aura in adult patients.

 

In early October 2021 we successfully executed the commercial launch of Trudhesa in the United States with a specialty sales force of approximately 60 representatives. In the first three months of the launch there were over 4,200 prescriptions of Trudhesa written by over 600 prescribers. Our commercial efforts are currently focused on high value prescribers and early adopters, beginning with 8,000 of the highest volume migraine treatment prescribers. Based on recent migraine treatment product launches, such as ubrogepant and rimegepant, we believe this approach can be successful in accessing the concentrated prescriber bases in migraine. This target base includes approximately 5,600 neurologists and

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2,400 high prescribing primary care physicians and headache specialists who have significant experience with prescribing DHE. These groups make up 34% of the migraine treatment prescriptions, 59% of all acute branded prescriptions and 66% of all DHE prescriptions written in 2021 in the United States. In particular, neurologist prescription productivity has grown an average of approximately 20% per year over the last three years, a growth figure aided by an increase in the number of patients seeking treatment from neurologists and primary care physicians for migraine. We plan to gradually increase the size of our salesforce to approximately 120 representatives allowing us to target an additional 8,000 high prescribing physicians that we believe will enable us to expand coverage to 45% of all migraine treatment prescriptions in the United States. Our commercial infrastructure provides HCP and patient centered distribution, access, promotion, and education. To facilitate early adoption and access, we launched the “Trudhesa Direct” pharmacy partnership and bridge co-pay program. We have listed Trudhesa with a WAC price of $850 for four doses which constitutes one prescription. Importantly, we have secured managed care contracts providing access to Trudhesa for 80% of commercial lives in the United States. With approximately 71% of migraine prescriptions paid by commercial payors, we believe this represents a significant step forward in our commercial efforts and for patients. We have deployed a robust sample program to ensure trial with Trudhesa for patients seeking better treatments and outcomes. Through both our commercial and medical affairs infrastructure we have engaged healthcare practitioners and patients, partnered with national associations and actively supported advocacy groups in the migraine market. These efforts have been, and will continue to be, supplemented with non-personal promotion to all targeted and non-targeted medium value physicians. To capture the maximum commercial opportunity of Trudhesa, we may also selectively seek partners to commercialize the product outside of our target markets, including additional penetration within the broader primary care setting, as well as in geographies outside of the United States.

 

INP105 (Acute Treatment of Agitation and Aggression in Autism Spectrum Disorder)

 

We are currently developing our second product candidate, INP105, as an upper nasal formulation of olanzapine administered using our proprietary POD technology for the treatment of agitation and aggression associated with ASD. ASD is a neurodevelopmental disorder affecting approximately 3.5 million children and adults in the United States and characterized by persistent difficulties in social communication and social interaction, coupled with restricted, repetitive patterns of behavior and higher aggression rates. Agitation and aggression are frequent and difficult to manage symptoms and are associated with negative outcomes for patients with ASD and their caregivers, including decreased quality of life, increased stress levels, and reduced availability of educational and social support. Despite two approved chronic therapies, a survey of parents and caregivers of children and adolescents with ASD found that 68% of these individuals have a history of demonstrating aggression to a caregiver and 49% of these individuals have a history of demonstrating aggression to a non-caregiver. Based on a study of emergency room usage in Canada, which found that 18% of individuals with ASD aged 12 and up had visited the emergency room within the past year, and that approximately 34% of such visits were for mental health issues, we estimate that approximately 220,000 patients with ASD in the United States seek emergency room care due to mental health issues annually. Current treatment strategies include functional behavioral assessment, reinforcement strategies, functional communication training, and the use of second-generation antipsychotics. With an increasing rate of ASD diagnosis, we believe that the development of effective therapeutic and pharmacologic methods for preventing and treating aggression are essential to improving outcomes in this disorder. Currently, there is no approved acute treatment for patients living with ASD once there is onset of agitation leading to aggression, and we believe that INP105 has the potential to be an on-demand therapy in this indication.

 

In a double-blind, placebo-controlled, single ascending dose Phase 1 clinical trial in 40 healthy adults conducted in Australia, we observed similar bioavailability for INP105 compared to equivalent doses of olanzapine delivered through IM administration, as measured by the area under the plasma drug concentration-time curve, or AUC, which reflects the actual body exposure to the drug after administration of a drug dose. The maximum drug concentration, or Cmax, was similar dose for dose to IM injection and the achieved time to maximum drug concentration, or Tmax, was 25-22% faster than that of IM olanzapine.

 

Based on its pharmacokinetic profile and method of administration, we believe INP105, if approved, has the potential to treat acute agitation and aggression events in this under-served population and in patients’ homes, potentially reducing visits to the emergency room and limiting the need to call in reinforcements to help caregivers. We plan to initiate a double-blind, placebo-controlled Phase 2 proof-of-concept clinical trial of INP105 in adolescents with ASD in the United States in the first half of 2022 and expect to report topline results by the end of 2022.

 

INP107 (Treatment of OFF Episodes in Parkinson’s Disease)

 

We have developed the clinical stage combination product INP107 as an upper nasal formulation of carbidopa/levodopa administered using our proprietary POD technology for the treatment of OFF episodes in Parkinson’s Disease, or Parkinson’s. The overall Parkinson’s market is expected to grow to over $8.4 billion by 2026, with emerging treatments for OFF episodes contributing to that growth. Current standard of care for the symptomatic treatment of Parkinson’s is oral levodopa; however when levodopa levels fall below their therapeutic range, patients may lose adequate control of motor symptoms, which are referred to as OFF episodes. Carbidopa is co-administered with levodopa to slow

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levodopa’s rapid metabolism, thereby increasing the amount of levodopa available for the symptoms of Parkinson’s. INP107 is a self- or caregiver-administered, upper nasal therapy candidate designed to provide rapid delivery of levodopa to the brain for the treatment of OFF episodes. In 2019, we completed a Phase 2a clinical trial of INP107, and a levodopa-only formulation, in Australia, which demonstrated an encouraging pharmacokinetic profile in Parkinson’s patients. Based on results of the Phase 2a clinical trial and our focus on the Trudhesa and INP105 programs we are actively looking to partner the INP107 asset for further development.

 

Our Team

 

We have assembled a team of scientific, clinical and business leaders with deep expertise in neuroscience and a track record of building, growing and commercializing new products. Our Chairman and Chief Executive Officer, Adrian Adams, has over 25 years of pharmaceutical experience with an emphasis on commercialization and strategic execution. Our co-founder and Chief Technology and Development Officer, John Hoekman, Ph.D., has over 15 years of experience in investigating upper nasal drug delivery and nose-to -brain delivery, is an inventor of our proprietary POD technology, is widely recognized as a pioneer in upper nasal space drug delivery and has evaluated over 30 CNS targeting compounds with over six different modalities including small molecules, proteins, peptides and antibodies as opportunities for upper nasal space delivery. Our Chief Financial Officer and Chief Business Officer, John Leaman, M.D., has over 15 years of pharmaceutical experience with an emphasis on public company financial oversight, corporate strategy and business development. Our Chief Medical Officer, Stephen Shrewsbury, M.B. ChB., has over 30 years of experience in developing pulmonary and nasal drug delivery and CNS therapies at pharmaceutical companies including GlaxoSmithKline, Chiron Corporation and MAP Pharmaceuticals, where he led the development of Levadex. Our Chief Commercial Officer, Leonard S. Paolillo, has nearly 20 years of experience with various companies in the healthcare and pharmaceutical industries, including Warner Chilcott and Kyowa Kirin. We are supported by our board of directors, scientific advisory boards and a group of leading biotechnology-focused investors, including KKR Iris, Norwest Venture Partners, 5AM Venture Management, LLC, venBio and Vivo Capital.

 

Our Strategy

 

Our goal is to deliver transformative therapies, harnessing the benefits of delivery to the upper nasal space, to patients suffering from CNS diseases and other diseases with high unmet medical needs. The key tenets of our strategy to accomplish this goal include:

 

Successfully commercialize Trudhesa for the acute treatment of migraine. In early October 2021 we successfully executed the commercial launch of Trudhesa in the United States with a specialty sales force of approximately 60 representatives. In the first three months of the launch there were over 4,200 prescriptions of Trudhesa written by over 600 prescribers. Our commercial efforts are currently focused on high value prescribers and early adopters, beginning with 8,000 of the highest volume migraine treatment prescribers. Based on recent migraine treatment product launches, such as ubrogepant and rimegepant, we believe this approach can be successful in accessing the concentrated prescriber bases in migraine. This target base includes approximately 5,600 neurologists and 2,400 high prescribing primary care physicians and headache specialists who have significant experience with prescribing DHE. These groups make up 34% of the migraine treatment prescriptions, 59% of all acute branded prescriptions and 66% of all DHE prescriptions written in 2021 in the United States. In particular, neurologist prescription productivity has grown on average by approximately 20% per year over the last three years, a growth figure aided by an increase in the number of patients seeking treatment from neurologists and primary care physicians for migraine. We plan to gradually increase the size of our salesforce to approximately 120 representatives allowing us to target an additional 8,000 high prescribing physicians that we believe will enable us to expand coverage to 45% of all migraine treatment prescriptions in the United States. These efforts have been, and will continue to be, supplemented with non-personal promotion to all targeted and non-targeted medium value physicians. To capture the maximum commercial opportunity of Trudhesa, we may also selectively seek partners to commercialize the product outside of our target markets, including additional penetration within the broader primary care setting, as well as in geographies outside of the United States.
Rapidly advance INP105 through clinical development for the acute treatment of agitation and aggression associated with ASD. We believe INP105 has the potential to become a first-line on-demand therapy for the safe and rapid treatment of agitation and aggression events in patients with ASD. Based on the positive clinical data generated to date, INP105’s rapid onset of action and non-invasive delivery, we believe it is well positioned to expand the treatment setting beyond the emergency department to administration in in-patient treatment facilities and patients’ homes by parents or caregivers. We believe INP105 has the potential to reduce emergency room visits for the approximately 220,000 ASD patients in the United States that we estimate seek care due to mental health issues annually. We anticipate initiating a double-blind, placebo-controlled Phase 2 proof-of-concept clinical trial of INP105 as an acute treatment of agitation and aggression associated with ASD in adolescents and young adults in the United States in the first half of 2022 and anticipate reporting topline results by the end of 2022.

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Maximize the therapeutic and commercial potential of our proprietary POD technology platform. Based on the unique characteristics and versatility of our proprietary POD technology, and expertise with developing novel drug formulations, we believe we are positioned to address multiple therapeutic areas with unmet medical needs. Our current strategy is to pair proven therapeutics with our proprietary POD technology and, thus, reduce risk by capitalizing on these therapeutics’ known safety, efficacy and commercialization history. We also intend to pair our proprietary POD technology with new chemical entities. While our initial focus is to address CNS diseases, we intend to explore the broader therapeutic utility of our POD technology in diseases where rapid vascular absorption can result in superior clinical outcomes. In doing so, we may elect to enter into collaborations for third-party product candidates for which we believe that our technologies and expertise may be valuable.
Expand applications of our existing product candidates. Our goal is to maximize the commercial potential of our existing product candidates by exploring additional indications. For example, in the case of INP105, in addition to patients with ASD, we believe the product candidate has potential utility as an acute treatment of agitation and aggression associated with bipolar disorder and schizophrenia. We plan to selectively pursue development in follow-on indications and in-patient populations where our product candidates can deliver meaningful clinical impact, and we have a clear clinical and regulatory approval pathway and that we believe we can commercialize successfully, if approved.
Independently develop and commercialize product candidates in indications and geographies where we believe we can maximize value. Given the potential of our POD technology and product candidates to treat a wide range of diseases, we believe that it will be important to maintain in-house discipline with respect to our development and commercialization efforts. We have a disciplined strategy to maximize the value of our pipeline by retaining development and commercialization rights to those product candidates, indications and geographies that we believe we can ultimately commercialize successfully on our own if they are approved. We plan to collaborate on product candidates that we believe have promising utility in disease areas or patient populations that are better served by the resources or specific expertise of other biopharmaceutical companies.

 

Our Technology

 

We have developed upper nasal space devices to enable differentiated clinical profiles for our product candidates. These devices utilize our proprietary POD technology propellant and a biphasic spray that creates a precise plume or stream of drug to initially reach the vascular-rich upper nasal space and then a second puff of propellant to further distribute drug across the upper nasal space. Two of our devices are depicted below.

 

 

https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_1.jpg 

We have designed our proprietary POD technology to target the vascular-rich upper nasal space, and to provide rapid absorption, consistent drug biodistribution and ease of use for a patient, provider or caregiver. Our goal with our POD technology is to deliver injection-like clinical outcomes non-invasively. We believe that we are the first company to successfully harness the benefits of delivery to the upper nasal space to improve the therapeutic potential of CNS therapies. Traditional nasal pumps have suffered from high variability and low overall absorption. These characteristics have generally limited the nasal route of administration to local treatment of allergies or nasal inflammation. We have pioneered research into systemic drug delivery through the upper nasal spacey, the anatomy of which is depicted in the picture below, to the CNS. We have demonstrated with multiple molecules that targeting the upper nasal space could improve the bioavailability and biodistribution of drugs into the systemic circulation. The upper nasal space is more permeable, has a higher density of vasculature and has a reduced clearance rate compared to the lower nasal space. These advantages of the upper nasal space may allow for a better consistency in dosing and uptake as well as the potential for faster time to onset of action. We have spent years developing device technologies and drug formulations to take advantage of this route of administration. We currently pair our technologies with established therapeutics approved through other routes of administration to create

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drug-device combination product candidates with the potential to address significant unmet medical needs and broaden the addressable patient population within our initial indications. This technology also offers potential to expand into other therapeutic areas.

 

As demonstrated in the figures below, compared to traditional nasal pumps, which have a diffuse aerosol spray, the POD technology creates a soft focused stream which consistently delivers drug to the upper nasal space. The figure on the top left shows a demonstrative spray pattern of DHE in our proprietary POD technology. The figure on the top right shows a demonstrative spray pattern of DHE in a traditional nasal pump. The figure on the bottom left shows the different route to the CNS as a result of upper nasal space delivery.

 

POD Technology Traditional Nasal Pump

https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_2.jpg 

 

 

https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_3.jpg 

Potential Advantages of Upper Nasal Space Delivery

 

 

Rapid uptake into the blood stream

 

Decreased dripping and swallowing

 

Consistent dosing and distribution

 

 

 

 

Our proprietary POD technology is designed to offer a number of key benefits compared to traditional nasal delivery systems. These features include:

Dose Consistency. Consistent dosing is critical to producing predictable and reproducible clinical outcomes. Unlike existing nasal delivery systems, which rely solely on mechanical pressure to deliver the drug into the nasal space, our proprietary POD technology utilizes hydrofluoroalkane, or HFA, gas as a propellant to expel the drug from our device into the upper nasal space, allowing us to achieve dose consistency within a 15% standard deviation of the mean consistent with guidance from the FDA.
Biphasic Spray. The POD devices deliver drugs through a biphasic spray, which consists of a first phase that delivers the drug to the upper nasal space and then a second phase that further distributes the drug across the mucosa of the upper nasal space.
Narrow Plume Geometry. Traditional nasal delivery systems create a wide aerosol plume that is typically unable to get through the two-to-three millimeter wide nasal valve and into the upper nasal space, which creates variability in the absorption of the drug. The POD devices use a proprietary drug flow path and nozzle to create a narrow spray plume that can deliver drug past the nasal valve and into the upper nasal space.
Reduces Human Error. Conventional nasal spray devices rely on the user to breathe in through their nasal passages while the dose is being administered. This can be challenging for patients to perform synchronously and consistently. The POD device uses HFA gas to expel drug into the upper nasal space. The HFA gas is

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metered out in a consistent manner regardless of how much force the user applies to actuate the device. The HFA gas is then able to consistently expel the drug with less chance for user error. These features allow the POD devices to be used independently of patients’ breathing coordination, which may lead to more consistent drug absorption.
Separated Drug and Propellant. In our product candidates, the drug formulation and propellant are maintained in separated compartments of the device until delivery of the dose. This separation of the drug and propellant allows us to formulate our product candidates without being constrained by the limits of formulating inside a pressurized propellant canister. We are developing POD devices for both liquid and powder drug formulations, and we believe that these devices can deliver a wide range of total dose.

 

We have developed unique POD devices for each of nonclinical development, early clinical trials, pivotal studies and commercialization. We have spent years developing these nonclinical devices and methods to create a robust early development process. With each of our product candidates, we have done extensive nonclinical testing to assess safety and expected clinical performance. Our proprietary POD technology allows for rapid decision making when advancing product candidates into clinical development by testing a variety of doses and formulations. With our proprietary POD technology, we have evaluated in a nonclinical setting multiple additional candidates that could be developed further in the future.

 

In addition to our proprietary POD technology, we have expertise in developing proprietary upper nasal formulations that further improve the product profile. The flexibility of our proprietary POD technology to deliver both liquid and powder formulations allows us to develop the most appropriate formulation for the patient, indication and dosing regimen. We evaluate each molecule in early development with the goal of making the simplest robust formulation using inactive ingredients present in FDA-approved drug products. Our proprietary POD technology is not reliant on breath coordination and our nasal drug formulations do not need to achieve a specific particle size range like pulmonary delivery products, which allows for more flexibility in the manufacturing process. Our expertise in upper nasal formulation allows us to select therapeutics that are already in wide use and regarded as safe in other delivery formats, for our product candidate pipeline. We believe we can also pair our proprietary POD technology with new chemical entities.

 

We believe that we have the ability to use our proprietary POD technology and upper nasal formulation expertise to produce product candidates that allow for convenient, non-invasive administration with the potential for injection-like clinical outcomes. Given their ease of administration, our product candidates can be self- or caregiver-administered outside of traditional patient care settings, thus expanding patient access. Additionally, our separation of propellant and drug in the POD device allows for reduced CMC risks. The unique characteristics of our product candidates have the potential to address unmet needs across multiple CNS diseases.

 

We have issued patent claims covering certain devices and methods of drug delivery, as well as pending patent applications directed to certain other embodiments of our device, drug formulations and methods of using our current product candidates. We believe that this apparatus, composition of matter and method of use intellectual property can provide strong exclusivity protection to our product candidates. Our existing solely owned patent portfolio is expected to provide patent protection ranging from 2032 to 2040, unless we receive patent term adjustment or patent term extension, or both.

 

Marketed Product and Our Development Product Candidates

 

Trudhesa for the Acute Treatment of Migraine

 

Trudhesa is a liquid formulation of DHE administered using our proprietary POD technology to the upper nasal space for the acute treatment of migraine headaches with or without aura in adult patients. Trudhesa was previously known as INP104. DHE is widely used as part of a standard of care for the acute treatment of migraines but is generally limited to IV and injection delivery administered in physicians’ offices, migraine clinics and hospitals, or nasal delivery to the lower nasal space. In June 2020, we announced positive results from our 360-patient STOP 301 trial to evaluate the safety and tolerability of long-term, intermittent use of Trudhesa, and in November 2020, we submitted an NDA for Trudhesa for the acute treatment of migraine headaches with or without aura in adult patients. On September 2, 2021, the FDA approved our NDA for Trudhesa. Trudhesa is not indicated for the preventive treatment of migraine or the management of hemiplegic or basilar migraine.

 

Disease Overview and Market Opportunity

 

Migraine is a chronic and debilitating disorder characterized by recurrent attacks generally lasting four to 72 hours with multiple symptoms, including typically one-sided, pulsating headaches of moderate to severe pain intensity that are associated with nausea or vomiting, sound sensitivity, smell sensitivity and light sensitivity. Migraines are often preceded

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by transient neurological warning symptoms, known as auras, which typically involve visual disturbances such as flashing lights but may also involve numbness or tingling in parts of the body. Migraines are both widespread and disabling.

 

The State of U.S. Health, 1990-2016 Study rates migraine as the fifth leading cause of years lived with disability in 2016. Based on market research commissioned by us, we believe that approximately 31 million individuals in the United States suffer from migraine attacks. Most sufferers experience migraine attacks once or twice per month and over 1.2 million emergency room visits per year are for acute treatment of migraine attacks. Migraine is a growing market projected to triple in size to over $10 billion by 2028 with the introduction of multiple new product offerings and an expected rise in disease awareness and diagnosis. Additionally, with the approvals of monoclonal antibodies against calcitonin gene-related peptide for migraine prevention and the approvals of new therapies for the acute treatment of migraine, such as oral gepants and lasmiditan, the awareness of migraine and its impact, and treatment options are expected to continue to grow. Of the approximately 18 million diagnosed migraine patients, approximately 12 million are not on active treatment. Of the six million patients diagnosed and on prescription treatment, up to 79% of the patients are willing to try another medication for the acute treatment of migraine. Further, in a 2017 survey of nearly 4,000 U.S. patients using oral acute prescription medication for migraine, 96% said they were dissatisfied with at least one aspect of their treatment, 48% said they can still have pain two hours after taking medication and 38% said their headache returns within 24 hours of getting relief.

 

Acute Treatment of Migraine and Limitation of Other Approved Treatments

 

Until the recent approval of the gepants and lasmiditan drugs, there has been limited innovation in the acute treatment of migraine since the introduction of triptans in 1992. Additional pharmacologic agents used for the acute treatment of migraine include analgesics, non-steroidal anti-inflammatory drugs, anti-emetics and ergots. The migraine market has steadily increased from approximately 20 million prescriptions in 2017 to approximately 30 million prescriptions in 2021, while triptans’ share of the migraine market has steadily decreased from approximately 97% in 2017 to 75% in 2021. While triptans remain the most common prescribed therapy for migraines, they possess four major limitations that result in an unmet need for migraine patients:

Unmet Need for Efficacy. Approximately 30% to 40% of migraine patients do not fully respond to triptans, and alternatives, including gepant and lasmiditan drugs, are limited. Triptans have also been shown to be more efficacious when taken early in a migraine attack, but those patients who wait or delay treatment may not experience the full benefit of triptan therapy.
Need for More Rapid Onset. While triptans have improved the treatment of migraine, their onset of pain relief is relatively slow. Historically, estimated onset of significant pain relief with oral triptans occurs between one and three hours after dosing.
Need for Longer Duration of Effect. Published studies cite that the recurrence within 24 hours of an effectively treated migraine is a common reason given for dissatisfaction with triptans.
Opportunity for Improved Tolerability Profile. Triptans can be associated with the following side effects: dizziness, dry mouth, feeling heavy in one's face, arms, legs, and chest, feeling sleepy, flushing, muscle weakness and nausea.

 

The recent approvals of gepant and ditan drugs have introduced new migraine treatment options into the market. While these oral medications are generally an improvement over triptans, there remains a significant unmet need. As oral medications, these products have relatively low efficacy and persistence rates. Further, ditans have significant potential side effects, including potential driving impairment, sleepiness and dizziness. In a recent survey of neurologists and headache specialists, a substantial majority of surveyed physicians agreed that the association between migraine and gastrointestinal disorders is important in the acute treatment of migraine, as it may result in lowered efficacy due to lack of proper absorption. In the same survey, these physicians generally agreed that an upper nasal delivery would have the potential to provide fast and consistent relief.

 

DHE is an acute therapy and an alternative to existing treatments that has been used for more than 60 years to safely and effectively treat migraine. DHE is widely used as part of a standard of care for treatment of migraines, despite being limited to IV and injection delivery or traditional nasal administration. IV and injection delivery require administration in physicians’ offices, migraine clinics and hospitals, and traditional nasal administration has been challenged by inconsistent efficacy. The AUC of DHE in the first two hours of exposure, or AUC0-2hr, is thought to be critical for achievement of pain relief in acute migraine. Many headache specialists consider DHE to be the current standard of care for the treatment of status migrainosus, which is a condition characterized by debilitating migraines that last more than 72 hours. Unlike triptans, DHE is known to bind to multiple receptors theorized to be implicated in migraine onset and duration. DHE also offers fast-onset efficacy, with continued protection from a single dose at any point during an attack. DHE overcomes many of the limitations of other existing treatments but in its current methods of administration present a number of limitations resulting in unmet needs for migraine patients, including:

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Need for More Convenient and Consistent Dosing. DHE is available for administration both intravenously and nasally. Intravenous administration of DHE requires the supervision of a healthcare provider and is typically performed in a headache clinic or hospital setting, requiring the patient to travel while suffering with the migraine. DHE administrated nasally with traditional, lower space devices may lead to inconsistent dosing and slower speed of effect and pain relief.
Opportunity for an Improved Tolerability Profile Compared to Intravenous Administration. One of the common side effects of conventional DHE administered intravenously is nausea, which is thought to be due to the high Cmax. Patients who receive DHE intravenously are usually administered an anti-nausea medication beforehand.

 

A survey of neurologists commissioned by us found that most neurologists are familiar with DHE and its mechanism of action as an acute therapy for migraine, and nearly all are interested in a new DHE delivery system.

 

Our Solution: Trudhesa

 

We believe Trudhesa has the potential to be a preferred therapy for the acute treatment of migraines. Trudhesa delivers DHE to the richly-vascularized upper nasal space, offering the potential for rapid and consistent biodistribution without injection. We believe that Trudhesa provides patients with the following benefits when compared to existing migraine therapeutics:

Rapid Onset. The delivery of DHE through our POD technology may offer rapid onset of pain relief similar to IV DHE and investigational pulmonary inhaled DHE (MAP0004). As observed in our completed studies, Trudhesa administration resulted in a total plasma exposure of DHE in the first two hours of dosing (at 1595 pg*h/mL) similar to that seen after MAP0004 dosing (1447 pg*h/mL).
Long-lasting. DHE has been shown to interact with multiple receptors theorized to be implicated in migraine onset and duration. The durability of effect, as observed in our exploratory efficacy analyses by lower migraine recurrence with Trudhesa (7% at 24 hours and 14% at 48 hours for all migraine attacks, weeks 1 -24) versus triptans (45%), is likely attributable to longer-lasting effect at receptors such as 5-HT1B and 5HT-1D. In our Phase 1 clinical trial, Trudhesa was observed to have similar blood levels of DHE compared to IV DHE from measurements at 30-minutes through 48-hour.
Broad Target Population. Based on historical DHE use, Trudhesa, like other forms of DHE, may provide a higher response rate than triptans and has the potential to treat patients who have not previously responded to triptans. Similar to other forms of DHE, Trudhesa may also be effective against patients who suffer from morning migraine, severe and prolonged migraine, menstrual migraine or have cluster headache. Migraine treatment with DHE has also demonstrated efficacy, independent of when the migraine treatment is initiated, based on DHE reversing central sensitization, while triptans are ineffective once the migraine becomes centralized.
Convenient and Consistent Delivery. Trudhesa is non-injectable, with the DHE dose delivered in 3/10ths of a second with minimal coordination from the patient. Trudhesa has demonstrated more consistent blood levels than traditional nasal spray, yielding improved blood levels and a lower coefficient of variance with doses. Further, in our STOP 301 trial, 84% of trial participants agreed or strongly agreed with the statement that Trudhesa was “easy to use” and preferred it over their current therapy.
Low Incidence of Side Effects. Nausea and vomiting related to DHE therapy are linked to the high Cmax related to IV administration. In our completed clinical trials, Trudhesa has shown to be generally well-tolerated with few instances of nausea and vomiting. In fact, it was self-reported in less than 1% of the 6,332 doses of Trudhesa administered over the full duration of the STOP 301 trial.
Reducing the Need for Additional Healthcare Resources for Acute Treatment of Migraines. EAER data from our STOP 301 trial showed a significant reduction in the usage of healthcare resources by patients treated with Trudhesa versus their baseline. By reducing the need for emergency room visits for patients with migraines, Trudhesa has the potential to improve patients’ quality of life and reduce resource strain on healthcare facilities.
 

STOP 301 Trial Results

 

Our STOP 301 trial conducted in the United States evaluated the safety and tolerability of long-term, intermittent use of Trudhesa in 354 patients for 24 weeks, with 74% of patients completing the treatment period, with a subset of 73 patients continuing for up to a total of 52 weeks, with 90% of continuing patients completing this extended treatment period. In total, 5,273 migraines were treated over the first 48 weeks and approximately 5,650 migraines were treated over the full trial, with 6,332 doses of Trudhesa administered in total. We completed the trial and announced positive top-line data in June 2020, and we submitted data from this trial, along with the Phase 1 pharmacokinetic trial (STOP 101), in our NDA submission in November 2020. Both STOP 101 and STOP 301 results have been peer reviewed and published in the journal Headache.

12


 

 

The STOP 301 trial consisted of a four-week screening period, a 24-week treatment period for all participants, a 28-week treatment period extension with a sufficient number of participants to ensure 150 and 50 evaluable data sets in the 24 and 52 week periods, respectively, and a two-week post-treatment follow-up period for all participants. This was an outpatient trial in patients who currently suffer a minimum of two migraines per month. During the trial, participants were instructed on how to self-administer Trudhesa. The primary endpoints of the clinical trial were:

treatment emergent adverse events, or TEAEs;
change in nasal mucosa as measured by focused, endoscopic nasal exams conducted by an ear, nose and throat physician following the Nasal Examination Manual; and
change in olfactory function as assessed by the University of Pennsylvania Smell Identification Test.

 

In the trial, Trudhesa was generally well-tolerated. There were seven SAEs among five patients (1.4%) over the 52-week study. Three patients had one SAE each, consisting of one event each of ovarian mass, intestinal obstruction and miscarriage. Two patients had more than one SAE: one patient with pulmonary embolism and visual impairment and one patient with clavicle and rib fractures. None of the SAEs were nasal-related and none of the SAEs were determined by the trial investigator to be related to Trudhesa or led to withdrawal from the trial. There were also no clinically significant changes in olfactory function, and no abnormal findings from endoscopy examinations. There were no serious Trudhesa-related TEAEs, and the majority of Trudhesa-related TEAEs were mild and transient, with the most frequent during the entire 52-week study period being nasal congestion (reported by 17.8% of patients), nausea (6.8%), nasal discomfort (6.8%), abnormal olfactory test (6.8%) and vomiting (2.7%). There were no cardiac adverse events and the discontinuation rate due to adverse events was only 6.8%. While the 28 -week trial extension was initiated to gather additional data on long term use of Trudhesa up to 52 weeks, ultimately the extension was unnecessary per trial protocol due to lack of safety signals in the 24-week cohort.

 

Exploratory efficacy measures were captured consisting of reporting in an electronic diary the time of onset of a migraine and associated symptoms, such as nausea, vomiting, sound sensitivity, smell sensitivity and light sensitivity. After taking a dose of Trudhesa, questions about the severity of, and relief from, all symptoms were repeated at 15 minutes, 30 minutes and 1, 2, 8, 24 and 48 hours post dosing. Patients were also required to undergo periodic evaluation using Migraine Disability Assessment, or MIDAS, and Headache Impact Test, or HIT-6, questionnaires.

 

The trial evaluated the acute treatment effects of Trudhesa against the patient’s best previous migraine treatment and the long-term effects of Trudhesa utilized by patients for 24 weeks as exploratory efficacy endpoints. While not conducted with a parallel control group and not powered for statistical significance, on their first dose of Trudhesa, 38% of patients reported being pain free at two hours. This effect remained consistent with long-term administration as 39% of all patients treated with Trudhesa through 12 weeks had pain freedom at two hours (2,559 total migraines), and 35% of all patients treated with Trudhesa through 24 weeks had pain freedom at two hours (1,736 total migraines). Trudhesa was also associated with a reduction in pain symptoms, as 52% of patients receiving Trudhesa were free of their most bothersome migraine symptom at two hours. Further, as shown in the figure below, 16% of patients who were treated with Trudhesa had pain relief within 15 minutes and 66% of patients had pain relief within 2 hours (N=354).

 

 

https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_4.jpg 

 

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The long-term nature of the STOP301 trial also provided notable long-term data on the continued administration of Trudhesa in an exploratory efficacy analysis conducted as part of the trial. As reflected in the figure below, patients treated with Trudhesa reported a 48% reduction in the frequency of their migraines over baseline during the 24-week trial.

 

 

https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_5.jpg 

 

 

Pain freedom was consistent across multiple attacks throughout the 52-week treatment period, with between 31%-39% of patients in each measurement period achieving pain freedom at two hours. Additionally, 93% and 86% of patients achieving pain freedom at two hours on Trudhesa did not suffer a relapse in migraine or require a rescue medication at 24 hours and 48 hours, respectively throughout the 24 weeks.

 

EAER data also showed a meaningful reduction in the usage of healthcare resources by patients treated with Trudhesa versus their baseline. Specifically, emergency room visits were reduced by approximately 73% and hospitalizations and urgent care visits were reduced by 100%.

 

Phase 1 Clinical Trial Results

 

We completed a randomized three-way crossover pivotal Phase 1 clinical trial in the fourth quarter of 2017. Thirty-six healthy volunteers in Australia were randomized, and 27 were included in the evaluation of pharmacokinetic measures and comparative bioavailability. Migranal and Trudhesa were self-administered by the trial participants. Migranal is an FDA-approved nasal spray product using the same liquid formulation of DHE, but delivered with a traditional nasal spray to the lower nasal space. The primary endpoint was to compare the bioavailability of DHE following single dose administration of 1.45 mg Trudhesa, 1mg IV DHE as a “safety bridge” and 2mg Migranal as an “efficacy bridge”. Pharmacokinetic measures, which refers to the movement of drug through the body, were recorded from baseline through 48 hours, with measures taken at 5, 10, 20, 30, 40 50 and 60 minutes within the first hour, and then at 3, 4, 8, 12, 24, 36 and 48 hours. Secondary endpoints were to evaluate the safety and tolerability of single doses of Trudhesa and to assess plasma concentrations of 8’-hydroxy-dihydroergotamine, the primary metabolite of DHE.

 

Despite containing approximately 28% less DHE per dose than Migranal, Trudhesa achieved blood levels comparable to IV DHE from 30 minutes, which quickly separated from Migranal blood levels at five minutes, achieved Tmax more rapidly, achieved a four-fold increase in Cmax and a three-fold increase in AUC. After 20 minutes, Trudhesa reached 93% of it’s Cmax and sustained DHE levels similar to those seen with IV dosing from 30 minutes through to 48 hours. The following figure shows the pharmacokinetic measurements of DHE with Trudhesa, IV DHE and Migranal for the first four hours after dosing.

 

 

14


 

https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_6.jpg 

 

Unlike standard bioequivalence studies, the intent of this trial was to investigate whether Cmax, AUC and Tmax of Trudhesa lay between the 90% confidence intervals of IV DHE and Migranal. This would permit a “scientific bridge” to the FDA’s findings of safety data for the IV product, with higher blood levels, and to the FDA’s efficacy findings for Migranal, with lower blood levels. As the following table indicates, Trudhesa met the preplanned statistical endpoints to satisfy this recommendation from the FDA with statistical power in excess of 95% on all endpoints. Our proprietary POD technology demonstrated more consistent dosing than a traditional nasal spray as seen with the lower coefficient of variance measures of plasma levels compared to Migranal as highlighted in the table below.

 

DHE Pharmacokinetics (STOP 101 – PK population (n=27))

 

 

Migranal

Trudhesa

D.H.E.45 IV

 

(2mg)

(1.45mg)

(1mg)

 

 

AUC0-inf (pg*hr/ml) [%CV]

2,208

[67%]

 

6,153

[44%]

 

7,490

[15%]

 

Cmax (pg/ml) [%CV]

329

[79%]

1,281

[53%]

14,620

[34%]

Tmax, median (min)

4740

 

30

 

               5

AUC0-2 (hr*pg/ml)

429

 

1,595

 

3,019

 

 

Trudhesa was generally well-tolerated, with no participants experiencing serious adverse events that were drug related. The most common treatment-related adverse events observed for Trudhesa included drowsiness, headaches and muscle soreness. Participants of this trial were surveyed on preference in administration, and Trudhesa was preferred three to one over Migranal. Trudhesa was noted to have less dripping, less post-nasal drip, was viewed as easier to use and over two-thirds of the volunteers were “quite satisfied” or “very satisfied” with nasal delivery experience with our proprietary POD technology.

 

Optimized DHE delivery has been shown to yield rapid and sustained clinical benefit in pain relief and pain freedom in the acute treatment of migraines. AUC0-2hr is thought to be critical for achievement of pain relief. In a pharmacokinetic clinical trial of MAP0004, an investigational pulmonary inhaled DHE product that has not been approved by the FDA, an AUC0-2hr of 1,447 pg*hr/mL was observed.

 

Commercialization Strategy for Trudhesa

 

In early October 2021 we successfully executed the commercial launch of Trudhesa in the United States with a specialty sales force of approximately 60 representatives. In the first three months of the launch there were over 4,200 prescriptions of Trudhesa written by over 600 prescribers. Our commercial efforts are currently focused on high value prescribers and early adopters, beginning with 8,000 of the highest volume migraine treatment prescribers. Based on recent migraine treatment product launches, such as ubrogepant and rimegepant, we believe this approach can be successful in accessing the concentrated prescriber bases in migraine. This target base includes approximately 5,600 neurologists and 2,400 high prescribing primary care physicians and headache specialists who have significant experience with prescribing DHE. These groups make up 34% of the migraine treatment prescriptions, 59% of all acute branded prescriptions and 66% of all DHE prescriptions written in 2021 in the United States. In particular, neurologist prescription productivity has grown an average of approximately 20% per year over the last three years, a growth figure aided by an increase in the number of patients seeking treatment from neurologists and primary care physicians for migraine. We plan to gradually increase the size of our salesforce to approximately 120 representatives allowing us to target an additional 8,000 high prescribing

15


 

physicians that we believe will enable us to expand coverage to 45% of all migraine treatment prescriptions in the United States. Through both our commercial and medical affairs infrastructure we have engaged healthcare practitioners and patients, partnered with national associations and actively supported advocacy groups in the migraine market. These efforts have been, and will continue to be, supplemented with non-personal promotion to all targeted and non-targeted medium value physicians. To capture the maximum commercial opportunity of Trudhesa, we may also selectively seek partners to commercialize the product outside of our target markets, including additional penetration within the broader primary care setting, as well as in geographies outside of the United States.

 

INP105 for the Acute Treatment of Agitation and Aggression associated with Autism Spectrum Disorder

 

We are currently developing INP105 as an upper nasal formulation of olanzapine administered using our proprietary POD technology for the acute treatment of agitation and aggression associated with Autism Spectrum Disorder, or ASD. ASD is a neurodevelopmental disorder characterized by persistent difficulties in social communication and social interaction, coupled with restricted, repetitive patterns of behavior or interest. Research indicates that aggression rates may be higher in individuals with ASD compared to those with other developmental disabilities. Agitation and aggression are frequent and difficult to manage symptoms, and associated with negative outcomes for patients with ASD and their caregivers, including decreased quality of life, increased stress levels, and reduced availability of educational and social support. Based on a study of emergency room usage in Canada, which found that 18% of individuals with ASD aged 12 and up had visited the emergency room within the past year, and that approximately 34% of such visits were for mental health issues, we estimate that approximately 220,000 patients with ASD in the United States seek emergency room care due to mental health issues annually. In addition to patients with ASD, we believe there is potential utility to expand the label for INP105 for the acute treatment of agitation and aggression associated with bipolar disorder and schizophrenia.

 

We are developing INP105 as a potential acute treatment option for agitation and aggression events in this under-served population. We believe INP105 is well positioned to expand the treatment setting beyond the emergency room to new settings, such as inpatient treatment facilities and also into patients’ homes. Following additional discussion with the FDA, we anticipate initiating a double-blind, placebo-controlled Phase 2 safety and efficacy trial (CALM 201) of a single dose of INP105 in adolescents with ASD in the United States

 

Disease Overview and Market Opportunity

 

ASD is characterized by marked impairment in social and communicative functioning combined with restricted interests and repetitive behaviors. In March 2020, the CDC released its biennial update of autism’s estimated prevalence among the nation’s children, stating that 1 in 54 children had a diagnosis of ASD by age 8 in 2016, a nearly 10 percent increase over 2014 when the estimate was 1 in 59. ASD is a serious neurodevelopmental disorder that currently affects approximately 3.5 million children and adults in the US. There is no single known cause, but it is hypothesized that genetic factors may play a role. There is no cure approved for ASD.

 

While there is no cure, intensive early treatment consisting of both psychotherapy and pharmacological treatment can make a big difference in the lives of many children. Approximately 58% of patients with ASD receive some kind of pharmacological treatment which targets non-core associated symptoms such as hyperactivity, agitation, aggression and self-injury.

 

We believe the potential value of INP105 would be in treating the approximately 1.5 million children and adolescent patients who receive pharmacological treatments for their ASD-related conditions, and in approximately 40% of such patients that exhibit agitation or aggression. There is a tremendous support from doctors, behavioral therapists, parents and payors to provide the caregivers of individuals with ASD the tools to manage the agitative and aggressive behaviors at home to avoid emergency department visits and hospitalization. ASD children have nine times more emergency department visits compared to non-ASD children due to psychiatric crises. Externalizing behaviors including aggression are the leading cause for these visits. Emergency department visits are associated with traumatic experience for the patient, loss of productivity for the parent and economic burden for the healthcare system. We believe INP105 has the potential to reduce emergency room visits for the approximately 220,000 ASD patients in the United States that we estimate seek care due to mental health issues annually.

 

Agitation Associated with Autism Spectrum Disorder

 

Individuals with ASD have a high incidence of mood lability, self-injurious behavior and aggressiveness toward others. Approximately 50-70% of individuals with ASD exhibit psychological behaviors as reported by parents and caregivers, such as agitation, with a high prevalence of anxiety, attention-deficit/hyperactivity disorder and depression. Market research sponsored by us indicates approximately 40% of ASD patients had demonstrated agitation or aggression.

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The Aberrant Behavior Checklist, or ABC, scale measured the emotional, social, irritability, agitation, speech, and behavioral symptoms of autism. The ABC-I (irritability, agitation, and crying) subscale includes symptoms of aggression towards others, deliberate self-injuriousness, temper tantrums, screams, and quickly changing moods. The ABC-I subscale has been used as a key primary measurement for efficacy assessment supporting the approval of a chronic treatment of risperidone and aripiprazole for the treatment of irritability in children and adolescents with ASD. It is one of several scales that is being used to explore its utility in assessment of efficacy in the forthcoming CALM 201 trial.

 

Aggression Associated with Autism Spectrum Disorder

 

Aggressive behaviors in ASD are the primary cause of residential placement and are associated with greater functional impairment and more intensive medical interventions. Additionally, aggressive behaviors in children with ASD are a frequent source of parental concern and are known to increase family stress, financial strain and demands on caregivers. Prevalence estimates of aggression in children with ASD vary based on the definitions used, but some have estimated that the prevalence of aggression in ASD may be up to 78.5%. Because of the variable nature of aggressive behavior, researchers have defined aggression in many different ways. Aggression is generally characterized as behavior that is threatening or likely to cause harm and may be verbal (e.g., threatening or cursing at another person) or physical (e.g., hitting, biting, or throwing objects at another person). A person can demonstrate one form of aggressive behavior or many, with variable frequency, intensity, and duration.

 

According to the ABC scale, aggression is a symptom categorized under the irritability, agitation, and crying subscale (ABC-I), and there are approved daily oral preventative products for irritability in ASD. However, recent studies have identified that irritability and aggression can be dissected. While DSM-V-defined argumentative and defiant behavior is associated with externalizing problems, angry/irritable symptoms predicted internalizing problems. It is important to distinguish between agitative mood (internal) and acts of hostility or aggression (external), as their mechanisms may be different, suggesting aggression may need to be treated differently compared to irritable symptoms. Aggression is also a major cause of morbidity in subjects with ASD.

 

Current Agitation and Aggression Treatment Approaches and Their Limitations

 

The goal in treating agitation and aggression is to rapidly de-escalate the patient in crisis while ensuring no harm comes to the patient and the providers. Antipsychotics are currently the standard of care for the acute treatment of agitation and aggression in schizophrenia and bipolar I disorder but also have widespread utility, along with Behavioral Therapy, in treating agitation and aggression in ASD. Some atypical antipsychotics, such as olanzapine, have been shown to have fewer side effects and better adherence than traditional antipsychotics prescribed for the same indications, but they are either given as oral treatment (which may take significant time to reach effective blood levels of the drug) or by IM injection which may be traumatic to both patient and HCP and if administered involuntarily, may reduce trust and cooperation.

 

The side effect profile of a chronic daily oral treatment and issues with efficacy in acute settings are the biggest unmet needs in the treatment of agitation and aggression of children and adolescent patients with ASD. We commissioned a market research survey of 64 ASD providers asking about the greatest unmet needs for treatment of agitation and/or aggression associated with autism, and respondents indicated a need for faster acting, easier to administer treatments with fewer side effects for adolescents and young adults with ASD-associated agitation and aggression.

 

Our Solution: INP105

 

INP105 utilizes our proprietary POD technology to deliver olanzapine to the richly-vascularized upper nasal space. We believe that INP105 could be well positioned to disrupt the landscape in the acute treatment of ASD by rapidly delivering a preferred and widely used drug, olanzapine, in a non-invasive manner. We believe INP105 may provide the first viable treatment option that allows patients and providers the ability to treat agitation and aggression in patients with ASD before it escalates to the point of danger to the family/caregiver and patient him/herself, which may require police and/or emergency medical care intervention and/or hospital admission.

 

We are evaluating INP105 for its potential to provide the following specific benefits when compared to existing therapies acutely treating agitation and aggression in patients with ASD:

Olanzapine for Agitation and Aggression. Olanzapine is a preferred drug to treat agitation and aggression events generally. Specifically, IM olanzapine can have a faster onset of action, greater efficacy and fewer adverse effects than other atypical antipsychotics and other types of drugs, especially when orally administered.

17


 

Rapid Onset of Action. In the SNAP 101 clinical trial, the delivery of olanzapine through our proprietary POD technology has demonstrated shorter time to peak blood level at five minutes compared to IM olanzapine, while achieving equivalent Cmax and AUC at equivalent doses.
Non-invasive Delivery. Our proprietary POD technology delivered olanzapine with a pharmacokinetic profile similar to IM administration. Providing a non-invasive therapy helps secure the patient-caregiver trust and improve overall outcome for the patient by enabling the provider to intervene earlier during a period of agitation and/or aggression. INP105 utilizes our proprietary POD technology to deliver olanzapine to the upper nasal space in less than a 3/10th of a second with the push of a button. We believe it is well positioned to expand the treatment setting beyond the emergency department to administration in in-patient treatment facilities and patients’ homes by parents or caregivers.
Manageable Tolerability Profile. Our single ascending dose trial in healthy volunteers tested three doses of olanzapine (5mg, 10mg, and 15mg), was generally well-tolerated both systemically and locally with no serious adverse events. We intend to study the 5mg dose in adolescents with ASD.
Potential to avoid side effects associated with chronic treatment. In our single ascending dose trial in healthy volunteers, INP105 demonstrated a more rapid rate of olanzapine absorption as compared to the currently approved IM olanzapine and the oral disintegrating tablet treatment, which may allow some patients to reduce their chronic medication use.

 

INP105 is intended to fulfill a major need for caregivers of ASD patients and is designed to be suitable for use in the home, in in-patient treatment facilities and, if necessary, in the emergency room.

 

INP105 Clinical Development Program

 

We have completed a dose ranging Phase 1b safety and pharmacokinetics trial with INP105 in healthy adults in Australia. We have also completed the formulation development and scale-up work with 12 months of stability data. We anticipate initiating a Phase 2 proof-of-concept trial (CALM 201) in adolescents with ASD in the United States in the first half of 2022, with initial results expected by the end of 2022. We expect to enroll approximately 24 subjects in this study, using a single dose (5mg) of INP105 at onset of agitation. The primary endpoint will be safety, with secondary efficacy endpoints measured using the Agitation Calmness Evaluation Scale, or ACES and numerous other scales to assess their potential utility. In this study we will be using the same dry powder POD device that was used successfully in the Phase 1b study.

 

Phase 1b Clinical Trial Results

 

We conducted a randomized, double-blind, single ascending dose Phase 1b trial that evaluated INP105 (5mg, 10mg and 15mg), IM olanzapine (5mg and 10mg), olanzapine (10mg) orally disintegrating tablets, or ODT, and placebo in 40 healthy volunteers in Australia (SNAP 101). The study was conducted in the second half of 2018 and the results from this study have been fully published. Thirty-seven evaluable subjects self-administered INP105. The primary endpoints were the safety and tolerability and pharmacokinetic profile of three single-ascending doses of INP105. Secondary endpoints evaluated the pharmacodynamic effects, which refers to the effect of drugs on the body, of three single-ascending doses of INP105 as compared to those of placebo, IM and ODT olanzapine. Pharmacokinetic timepoints were recorded at baseline through 120 hours, with measures taken at 5, 10, 15, 20, 30, 45, and 60 minutes within the first hour and pharmacodynamic effects were measured with Visual Analog Scale, or VAS, the Digit Symbol Substitution Test, or DSST, and the ACES.

 

As shown in the table below, the adverse events observed in the Phase 1b trial were similar to the side effects generally observed with olanzapine, with the most common adverse events being dizziness, light-headedness and hypotension. The frequency of these adverse events with administration through our proprietary POD technology was similar compared to IM or ODT administration of olanzapine, and we observed no serious adverse events.

 

 

18


 

 

 

 

 

 

 

Olanzapine

 

 

 

 

 

 

Placebo

 

 

Olanzapine

Olanzapine

ODT

POD-OLZ

POD-OLZ

POD-OLZ

POD-

 

 

5 mg IM

10 mg IM

10 mg

5 mg

10 mg

15 mg

Placebo

 

 

n=20

n=2

n=18

n=10

n=9

n=8

n=10

No. with at least 2 TEAEs in any group (n=)

 

18

 

2

 

15

 

8

 

6

 

6

 

1

 (%)

(90%)

 

(100%)

 

(83%)

 

(80%)

 

(67%)

 

(75%)

 

(10%)

Dizziness

4

 

1

 

0

 

1

 

2

 

0

 

0

 

(20%)

 

(50%)

 

 

 

(10%)

 

(22%)

 

 

 

 

Postural dizziness

6

 

1

 

8

 

2

 

1

 

1

 

0

 

(30%)

 

(50%)

 

(44%)

 

(20%)

 

(11%)

 

(13%)

 

 

Fatigue

0

 

0

 

 0

 

2

 

0

 

0

 

0

 

 

 

 

 

 

 

(20%)

 

 

 

 

 

 

Headache

 2

 

 0

 

 6

 

1

 

0

 

1

 

0

 

(10%)

 

 

 

(33%)

 

(10%)

 

 

 

(13%)

 

 

Hypotension

1

 

2

 

2

 

0

 

2

 

0

 

0

 

(5%)

 

(100%)

 

(11%)

 

 

 

(22%)

 

 

 

 

Nasal congestion

 0

 

0

 

0

 

0

 

1

 

 2

 

0

 

 

 

 

 

 

 

 

 

(11%)

 

(25%)

 

 

Nausea

 0

 

0

 

2

 

0

 

1

 

 0

 

0

 

 

 

 

 

(11%)

 

 

 

(11%)

 

 

 

 

Orthostatic hypotension

 3

 

 0

 

0

 

1

 

0

 

2

 

 0

 

(15%)

 

 

 

 

 

(10%)

 

 

 

(25%)

 

 

Orthostatic tachycardia

2

 

0

 

0

 

1

 

0

 

0

 

0

 

(20%)

 

 

 

 

 

(10%)

 

 

 

 

 

 

Restlessness

0

 

0

 

2

 

0

 

1

 

1

 

 0

 

 

 

 

 

(11%)

 

 

 

(11%)

 

(13%)

 

 

Rhinorrhea

1

 

 0

 

0

 

1

 

0

 

0

 

0

 

(5%)

 

 

 

 

 

(10%)

 

 

 

 

 

 

 

Key pharmacokinetic and pharmacodynamic observations are provided in the figures below. INP105 achieved similar bioavailability compared to equivalent doses of IM olanzapine as measured by AUC and Cmax, and INP105 achieved peak blood concentration more rapidly than IM olanzapine. Olanzapine ODT was significantly slower to achieve Tmax (2 hours) and had a lower overall Cmax and AUC. After 60 minutes, INP105 achieved similar bioavailability compared to equivalent doses of IM olanzapine 120 minutes after dosing. Data from two patients were excluded due to non-matching plasma levels pursuant to clinical trial procedure.

 

https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_7.jpg 

 

 

 

19


 

https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_8.jpg 

 

To measure pharmacodynamic effects of INP105 subjects were assessed using the DSST, ACES and VAS. As can be seen in the three graphs below, INP105 generally had a dose dependent effect on each of these pharmacodynamic measures similar to IM olanzapine over the first 2-hours post dosing, which further supports the novel and unique profile of INP105 to provide rapid onset of effect non-invasively.

 

ACES is a 9-point scale that evaluates levels of agitation/calmness. An increase in ACES score represents a reduction in agitation and an increased tranquil or calm state. Although these healthy subjects were not in an agitated state before dose administration, the decrease in score indicates a transition into a more tranquil or calm state. The ACES results from our INP105-101 trial in the figure below showed that INP105 had a rapid onset of calming effect by 30 minutes at all doses, similar to IM olanzapine and greater effect than placebo.

 

Mean Change in ACES in First 2 Hours (and 95% Confidence Intervals) (SNAP 101)

 

https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_9.jpg 

 

The DSST test is a measure of change in cognitive function. Atypical antipsychotic drugs would be expected to result in a negative change from baseline. The DSST results from our INP105-101 trial in the figure below showed that INP105 had a similar fast onset of effect compared to both IM olanzapine and a faster onset of effect than both olanzapine ODT and placebo.

 

Mean change in DSST in first 2 hours (and 95% Confidence Intervals) (SNAP 101)

 

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https://cdn.kscope.io/6f5cfb10c580459e8a750c1b0c517ebb-img179583945_10.jpg 

 

 

Patients self-reported the VAS on three scales of 0-100 mm (a) feeling drowsy to alert, (b) foggy to clear-headed and (c) lethargic to energetic at baseline and at various times after dosing. A reduction, or negative change, in score from baseline in each measure indicates an increase in feelings of drowsiness, foggy-headedness and lethargy, respectively. The VAS results from our INP105-101 trial in the figure below showed that INP105 had a similar effect as IM olanzapine and a greater effect than olanzapine ODT and placebo in the first 2 hours.

 

Mean change in VAS in first 2 hours (and 95% Confidence Intervals) (SNAP 101)

 

 

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Commercialization Strategy for INP105

 

If approved, we believe we can successfully commercialize INP105 in the United States with a targeted, specialty sales force. We would intend to leverage the commercial and medical affairs infrastructure we would have in place for Trudhesa for the acute treatment of migraine if approved. We plan to work with national autism associations, as well as inpatient treatment facilities to update treatment guidelines to include INP105 in treatment plans to supplement behavior therapy plans for treating agitation and aggression in ASD. We plan to educate healthcare practitioners and patients, partner with national associations and actively support advocacy groups in the autism market.

 

INP107 for the Treatment of OFF Episodes in Parkinson’s Disease

 

We are currently developing INP107 as an upper nasal formulation of carbidopa/levodopa, administered using our proprietary POD technology, for the treatment of OFF episodes in Parkinson’s. Current standard of care for the symptomatic treatment of Parkinson’s is oral levodopa, but when levodopa levels fall below their therapeutic range, patients may lose adequate control of motor symptoms, which are referred to as OFF episodes. Carbidopa is co-administered with levodopa to slow levodopa’s rapid metabolism thereby increasing the amount available for the symptoms of Parkinson’s. INP107 is a non-invasive, self- or caregiver-administered, investigational upper nasal therapy designed to provide rapid delivery of levodopa to the brain for the treatment of OFF episodes. We have conducted a Phase 2a clinical trial with one dose of INP107 in Australia, and based on the trial results and the prioritization of the Trudhesa and INP105 programs we have decided to actively look for a development partner for INP107 development moving forward.

 

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Disease Overview and Market Opportunity

 

Parkinson’s is a progressive neurodegenerative disorder that results from the gradual death of certain dopamine producing neurons that aid in regulating motor control, among other functions. As the disease progresses, motor function gradually worsens until a patient is no longer able to perform normal daily tasks such as eating, bathing and dressing. In order to compensate for the loss of dopamine, patients are typically treated with oral carbidopa/levodopa therapy. However, as the disease progresses, dopamine levels fluctuate because of variable responses to oral treatment and insufficient levels of dopamine in the brain, causing OFF episodes.

 

Parkinson’s is the second most common neurodegenerative disorder worldwide and over one million people in the United States currently suffer from Parkinson’s. Its prevalence increases with age. It is estimated that over 350,000 Parkinson’s patients in the United States deal with OFF episodes on a daily basis. The overall Parkinson’s market is expected to grow to over $8.4 billion by 2026, with emerging treatments for OFF episodes contributing to that growth.

 

Current Parkinson’s Treatment Approaches and Inherent Limitations

 

There is no cure or disease-modifying treatment currently available for Parkinson’s. Current treatment strategies are focused on the management and reduction of the major symptoms of the disease and related disabilities. These therapies either aim to supplement dopamine levels in the brain, mimic the effect of dopamine in the brain by stimulating dopamine receptors or prevent the enzymatic breakdown of dopamine.

 

The standard of care regimen for symptomatic treatment of Parkinson’s is the oral administration of levodopa, which was the first drug approved specifically for Parkinson’s over 50 years ago. Levodopa remains the most efficacious and widely used treatment for Parkinson’s. Levodopa improves motor function as long as its levels in the brain remain within an individual’s therapeutic range.

 

Variations in levodopa concentrations outside of the therapeutic range are the determining factor for motor fluctuations. When levels are below the therapeutic range, patients do not experience adequate control of motor symptoms, which are referred to as OFF episodes. If levodopa levels exceed the therapeutic range, patients typically experience involuntary movements, which are referred to as dyskinesia. Using currently available oral treatment options, it is extremely challenging for physicians to create a customized patient-specific regimen that consistently maintains levodopa levels within a patient’s therapeutic range due to both the inherent nature of the levodopa chemical structure as well as the physiologic manifestations of the disease in patients.

 

The limitations to the use of oral levodopa include:

 

Delayed and Variable Levodopa Clinical Effect. Levodopa blood levels are patient-specific and occasion-specific, but generally have peak blood levels at 1 to 2 hours after dosing. This delayed onset and variability lead to difficulties in planning levodopa dosing and frequently cause patients to be out of their therapeutic window. This variability is a significant contributor to the unreliability of oral levodopa and highlights the challenge that patients face every day in not knowing when their medication will take effect, if at all.
Reduced Absorption and Food Effect. Levodopa must be actively absorbed through the gastrointestinal, or GI, tract into the bloodstream and competes with food for active transport. GI transport is frequently slowed by meals, decreasing the amount of levodopa that can be absorbed when it is given orally near mealtime. The frequency with which levodopa is administered throughout the day complicates dosing, as patients have difficulty planning meals around their complex oral dose regimens in order to minimize the impact on their levodopa absorption.
Challenges with Swallowing. Parkinson’s patients frequently have difficulty swallowing oral medications.

 

As a result of these challenges, more than 90% of Parkinson’s patients experience at least one OFF episode per day. Nearly 65% of Parkinson’s patients are OFF for two or more hours per day and 20% are OFF for more than four hours per day. Nearly half the patients experiencing OFF indicate the need to avoid or stop activities they can perform while ON. The average disability rating was almost twice when patients described their state as OFF when compared to being ON.

 

There is a lack of available therapies to address these OFF episodes. Injectable apomorphine has been used as a non-selective dopamine agonist and is effective in rapidly reducing OFF time, but its route of administration and significant nausea and vomiting hinder its utilization. Recently approved Inbrija, pulmonary inhaled levodopa, is indicated for the intermittent treatment of OFF episodes in Parkinson’s patients currently being treated with another form of

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carbidopa/levodopa. Clinical data in support of Inbrija indicate peak clinical effect, reversal of OFF, at 30 minutes after dosing.

 

Limitations of OFF treatments in Parkinson’s, which have resulted in unmet needs for Parkinson’s patients, include:

Route of Administration. Injectable apomorphine is invasive and challenging for a patient in an OFF episode to administer. Inhaled levodopa requires strong pulmonary function and a 30-second inhalation process. Oral levodopa, due to its route of administration, has significant GI delays and may have variability in absorption.
Requires a Baseline of Carbidopa/Levodopa. Inhaled levodopa must be used as an adjunct to oral carbidopa/levodopa to achieve maximum impact due to the high metabolism of levodopa absent a decarboxylase inhibitor (such as carbidopa).

 

Our Solution: INP107

 

We are developing INP107 as a self- or caregiver- administered, upper nasal carbidopa/levodopa therapy. Co-administration of carbidopa with levodopa increases amounts of levodopa available in the CNS to be converted to dopamine by limiting peripheral conversion of levodopa in the blood. Additionally, reducing peripheral conversion to dopamine helps to avoid side effects such as nausea and low blood pressure.

 

We believe that INP107 has the potential to provide the following advantages:

 

Rapid Onset and Pronounced Effect. Based on our initial PK and PD data, INP107 provided an encouraging bioavailability profile.
Self or Caregiver Administration. INP107 utilizes our proprietary POD technology to deliver carbidopa/levodopa to the upper nasal space with a propellant, which would enable either self or caregiver administration.
Delivery Without Breathing Coordination. INP107 is designed to deliver carbidopa/levodopa in a spray of 3/10ths of a second with no breathing coordination required.
Potential Treatment of Morning OFF. We have designed INP107 to potentially be utilized without oral or baseline administration of carbidopa, which could facilitate use for morning OFF episodes when the patients do not have any levodopa or carbidopa in their system.
Alternative to Oral Carbidopa/Levodopa Dosing. INP107 could be used to replace oral dosing and allow patients to better titrate their dosing due to its rapid uptake and without having to worry about food effects.

 

INP107 Clinical Development Program

 

We have completed a Phase 2a safety, tolerability and pharmacokinetics/pharmacodynamics trial in Parkinson’s patients testing INP107 and a levodopa-only formulation. The next phase of the program will be to initiate a Phase 1 pharmacokinetic and tolerability trial in Australia or the United States in 2022 to inform dose selection for further clinical development of INP107.

 

INP107 Clinical Results

 

Our Phase 2a clinical trial, completed in 2019, was a randomized, double-blind, placebo controlled, trial to evaluate the safety, tolerability and pharmacokinetics/pharmacodynamics of both a levodopa-only formulation pretreated with an oral decarboxylase inhibitor and INP107 (7mg carbidopa/70mg levodopa combination) in the absence of an oral decarboxylase inhibitor in PD patients during an OFF episode. The trial enrolled 32 patients in Australia who were randomized into one of four cohorts, all versus a placebo. Three cohorts consisted of a levodopa-only formulation and the fourth cohort consisted of INP107.

 

Patients in this trial were required to be levodopa responsive, to stop taking all Parkinson’s medications the evening before they arrived in clinic and were then confirmed to be in an OFF episode the morning of trial intervention. Once confirmed to be in an OFF episode, patients were randomized to either placebo or active treatment. Blood draws were completed at 4, 9, 14, 29, 44, 59, 89 and 119 minutes after dosing.

 

The primary endpoint of the trial was safety and tolerability over the immediate 240 minutes following dosing and over seven days of follow-up. In this trial, INP107 was generally well tolerated, with no serious adverse events reported. Secondary endpoints included evaluating the pharmacokinetic profile of levodopa and the pharmacodynamic effect of

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INP107 in the 120 minutes following dosing. The latter was measured by trained assessors using the Movement Disorder Society—Unified Parkinson’s Disease Rating Scale Part 3. Trial results showing levodopa and carbidopa plasma concentrations over time are shown in the figure below.

 

Levodopa and Carbidopa Plasma Concentrations Over Time from

 

INP107 Phase 2a Interim Analysis

 

 

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Plasma levels of carbidopa and levodopa were observed to increase over time throughout the duration of blood draws and were significantly higher than placebo after the first five minutes. However, despite this increase in plasma levels, there was no significant improvement in the UPDRS Part III motor scores between INP107 and placebo. Based on this result, we intend to further develop the formulation to improve the overall plasma absorption and speed of absorption before advancing into further clinical development.

 

Manufacturing

 

All of our manufacturing processes are outsourced to third parties with oversight by our internal managers. We rely on third-party manufacturers to comply with cGMP and produce sufficient quantities of drug product for use in clinical trials and Trudhesa sales. We intend to continue this practice for any future clinical trials and commercialization of INP105 and INP107 and for any other potential product candidates for which we retain significant development and commercialization rights.

 

The active pharmaceutical ingredient and drug formulation of Trudhesa has been developed and manufactured by a CMO located in Europe. Our CMO has extensive experience manufacturing the liquid formulation of dihydroergotamine mesylate under cGMP and has the capacity to manufacture at commercial scale. This CMO has manufactured Migranal, a drug that uses the same primary container and formulation as Trudhesa, for over 20 years. The DHE batches used in the pivotal Phase 1 clinical trial, our registration lots, and our STOP 301 trial were all produced by the same manufacturer, and on the same manufacturing lines that have been used for commercial launch of Trudhesa.

 

The Trudhesa POD device is manufactured by third-party CMOs. This device has been used for the pivotal Phase 1 clinical trial, our registration lots, and our STOP 301 trial and is the device used for commercial launch of Trudhesa. The plastic component manufacturing and sub-assembly, valve manufacture, canister manufacture and canister fill with final assembly are each performed by a different third-party CMO. Each have extensive experience with medical-grade clinical and commercial scale device manufacture under cGMP. We used the same assembly group through all stages of development and have utilized the same assembly lines and validated processes through the NDA approval and submission process and for commercial production.

 

The INP105 and INP107 product candidates are both powder drug formulations. They have both utilized the clinical stage POD device for initial clinical trials and are both expected to transition to a commercial stage POD device for pivotal studies and commercialization. The development work on the commercial stage device for INP105 is ongoing, while the formulation has been developed and produced at commercial scale with 12 months of stability data. Both of these drug

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formulations have been developed with our powder formulation CMO. This CMO has the capability to produce these formulations at all scales of development including through commercialization.

 

Competition

 

The pharmaceutical industry is highly competitive. There are many pharmaceutical companies, biotechnology companies, public and private universities, government agencies and research organizations actively engaged in research and development of product candidates which may target the same markets as our product candidates. We expect any future product candidates we develop to compete on the basis of, among other things, product efficacy and safety, time to market, price, extent of adverse side effects experienced and convenience of administration and drug delivery.

 

For our marketed product and development product candidates, we are aware of the following competing efforts:

Trudhesa. Approved acute treatments for migraine include triptans, ditans, oral calcitonin gene-related peptides antagonists or gepants, lasmiditan and alternative formulations of DHE, such as Migranal, which is administered intranasally. Some of these competitors are also developing product candidates that utilize alternative routes of administration, including Biohaven Pharmaceuticals, Inc., Amneal Pharmaceuticals, Inc., Satsuma Pharmaceuticals, Inc. and Zosano Pharma Corporation, whose product candidates use nasal pumps, other nasal drug delivery or alternative delivery technologies.
INP105. While there are no FDA-approved acute treatments for agitation and aggression in ASD, commonly prescribed treatments include mostly atypical (second generation) antipsychotics. These can include risperdone (Risperdal), olanzapine (Zyprexa), quetiapine (Seroquel), aripiprazole (Abilify), ziprasidone (Geodon) and others.
INP107. Approved treatments for the symptoms of OFF episodes in Parkinson’s include carbidopa/levodopa (both short and long-acting oral forms), MAO-B inhibitors, COM-T inhibitors, dopamine agonists, amantadine such as Gocovri, apomorphine and inhaled levodopa, such as Inbrija. In addition, there are several product candidates under development by pharmaceutical companies such as Eli Lilly & Co., Intec Pharma Ltd. and AbbVie Inc. Some of these product candidates also utilize alternative routes of administration, such as Sunovion Pharmaceuticals, Inc., whose product candidate uses a sublingual film, and Acorda Therapeutics, Inc. whose product candidate uses a dry powder inhaler.

 

Many of our competitors, either alone or with strategic partners, have substantially greater financial, technical and human resources than we do. Accordingly, our competitors may be more successful than us in obtaining approval for treatments and achieving widespread market acceptance, rendering our treatments obsolete or non-competitive. Accelerated merger and acquisition activity in the biotechnology and pharmaceutical industries may result in even more resources being concentrated among a smaller number of our competitors. These companies also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials and acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Our commercial opportunity could be substantially limited in the event that our competitors develop and commercialize product candidates that are more effective, safer, less toxic, more convenient or less expensive than our comparable product candidates. In geographies that are critical to our commercial success, competitors may also obtain regulatory approvals before us, resulting in our competitors building a strong market position in advance of the entry of our product candidates. We believe the factors determining the success of our programs will be the efficacy, safety and convenience of our product candidates.

 

Intellectual Property

 

We strive to protect and enhance the proprietary technology, inventions, and improvements that are commercially important to our business, including seeking, maintaining, and defending patent rights, whether developed internally or licensed from third parties. Our policy is to seek to protect our proprietary position by, among other methods, pursuing and obtaining patent protection in the United States and in jurisdictions outside of the United States related to our proprietary technology, inventions, improvements, platforms and product candidates that are important to the development and implementation of our business. Our patent portfolio is intended to cover, but is not limited to, our POD technology, our product candidates and components thereof, their methods of use and processes for their manufacture, and any other inventions that are commercially important to our business. We expect to rely on data exclusivity, market exclusivity, patent term adjustment and patent term extensions when available. Our commercial success may depend in part on our ability to obtain and maintain patent and other proprietary protection for our technology, inventions, and improvements; to maintain our licenses to use intellectual property owned or controlled by third parties; to defend and enforce our proprietary rights, including our patents; to defend against and challenge the assertion by third parties of their purported intellectual property

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rights; and to operate without the unauthorized infringement on the valid and enforceable patents and other proprietary rights of third parties.

 

We believe that we have a strong global intellectual property position relating to our POD device, Trudhesa and our other product candidates. Our patent portfolio as of February 1, 2022 contained 8 U.S. issued patents and 34 patents issued in ex-U.S. jurisdictions including Australia, Brazil, Canada, China, Switzerland, Germany, France, Great Britain, Japan, and Russia and 13 U.S. pending applications as well as 80 patent applications pending in ex-U.S. jurisdictions including Australia, Brazil, Canada, China, Europe, Hong Kong, Israel, India, Japan, Korea, Mexico, New Zealand, Russia, South Africa and one pending international patent application owned solely by us.

 

Trudhesa is covered by five patent families: three of the families include claims relating to the POD device used for delivery of DHE to the upper nasal cavity; the other two families include claims relating to methods of delivering DHE to the upper nasal cavity. As of February 1, 2022, from the three device patent families, five U.S. patents have issued, 29 patents have issued in ex-U.S. jurisdictions including Australia, Brazil, Canada, China, Switzerland, Germany, France, Great Britain, Japan, and Russia, and 22 applications were pending in the U.S., Brazil, Canada, Europe, Israel, India, Japan, Korea, Mexico, New Zealand, and South Africa. These patent families have been listed on the FDA Orange Book. As of February 1, 2022, from the two method of use patent families, one U.S. Patent has issued, two applications were pending in the U.S., and 10 applications were pending in ex-U.S. jurisdictions including Australia, Brazil, Canada, China, Europe, India, Japan, Hong Kong, Korea, and Russia and there is one pending international patent application. Our issued patents, and any patents that may issue from our pending patent applications, are expected to expire between 2032 and 2039, absent any patent term adjustments or extensions.

 

Our INP105 product candidate is covered by three patent families: two of the families include claims relating to the POD device used for delivery of olanzapine to the upper nasal cavity; one patent family includes composition of matter claims covering our dry powder formulation and claims directed to methods of delivering olanzapine to the upper nasal cavity. As of February 1, 2022, from the two device patent families, two U.S. patents have issued, 11 patents have issued in ex-U.S. jurisdictions including Australia, Canada, China, Switzerland, Germany, France, Great Britain, Japan, and Russia, and 22 applications were pending in the U.S., Australia, Brazil, Canada, Chile, China, Europe, India, Israel, Japan, Korea, New Zealand, Singapore, and South Africa. As of February 1, 2022, in the composition of matter and method of use patent family, 16 applications were pending in the U.S. and ex-U.S. jurisdictions including Australia, Brazil, Canada, China, Europe, Hong Kong, India, Japan and Korea. Our issued patents, and any patents that may issue from our pending patent applications, are expected to expire between 2032 and 2039, absent any patent term adjustments or extensions.

 

Our INP107 product candidate is covered by three patent families: two of the families include claims relating to the POD device used for delivery of a combination of levodopa and carbidopa to the upper nasal space; one patent family includes composition of matter claims covering our dry powder formulation and claims directed to methods of delivering a levodopa/carbidopa combination to the upper nasal space. As of December 31, 2021, from the two device patent families, two U.S. patents have issued, 11 patents have issued in ex-US jurisdictions including Australia, Canada, China, Switzerland, Germany, France, Great Britain, Japan, and Russia, and 11 applications were pending in the U.S., Australia, Brazil, Canada, Europe, India, Israel, New Zealand, and Singapore. As of December 31, 2021, one application was pending in the U.S. in the composition of matter and method of use patent family and four applications were pending in China, Europe, Japan, and Korea. Our issued patents, and any patents that may issue from our pending patent applications, are expected to expire between 2032 and 2039, absent any patent term adjustments or extensions.

 

In addition, we have exclusively licensed a patent portfolio that as of December 31, 2021 contained two U.S. issued patents and nine patents issued in ex-U.S. jurisdictions including Canada, Italy, Great Britain, France, Spain, and Germany. This patent portfolio includes claims relating to a circumferential aerosol device for delivering drugs including to the olfactory epithelium and brain. Our issued patents that have been licensed are expected to expire between 2029 and 2031, absent any patent term adjustments or extensions. None of our licensed patents are material to our current pipeline product candidates.

 

We continually assess and refine our intellectual property strategy as we develop new platform technologies and product candidates. To that end, we are prepared to file additional patent applications if our intellectual property strategy requires such filings, or where we seek to adapt to competition or seize business opportunities. Further, we are prepared to file patent applications, as we consider appropriate under the circumstances, relating to the new technologies that we develop. In addition to filing and prosecuting patent applications in the United States, we often file counterpart patent applications in Europe and in additional countries where we believe such foreign filing is likely to be beneficial.

 

The term of individual patents depends upon the laws of the countries in which they are obtained. In most countries in which we file, the patent term is 20 years from the earliest date of filing of a non-provisional patent application. However,

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the term of U.S. patents may be extended for delays incurred encountered during prosecution that are caused by the USPTO or due to compliance with FDA requirements. For example, the Hatch-Waxman Act permits a patent term extension for FDA-approved drugs of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug is under regulatory review. Patent extension cannot extend the remaining term of a patent beyond five years, nor beyond a total of 14 years from the date of product approval, and only one patent applicable to an approved drug may be extended. Similar provisions are available in Europe and other jurisdictions to extend the term of a patent that covers an approved drug. In the future, if and when our pharmaceutical product candidates receive FDA approval, we expect to apply for patent term extensions on patents covering those product candidates. We intend to seek patent term extensions of our issued patents in any jurisdiction where these are available; however, there is no guarantee that the applicable authorities, including the USPTO and FDA, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions. Our currently issued patents, including those owned and exclusively licensed, will likely expire on dates ranging from 2029 to 2036. If patents are issued on our pending patent applications, including those owned and exclusively licensed, the resulting patents are projected to expire on dates ranging from 2032 to 2040, unless we receive patent term adjustment or patent term extension, or both. However, the actual protection afforded by a patent varies on a product-by-product basis, from country-to-country, and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

 

The patent positions of companies like ours are generally uncertain and involve complex legal and factual questions. No consistent policy regarding the scope of claims allowable in patents in the field of CNS diseases has emerged in the United States. The patent situation outside of the United States is even more uncertain. Changes in the patent laws and rules, either by legislation, judicial decisions, or regulatory interpretation in the United States and other countries may diminish our ability to protect our inventions and enforce our intellectual property rights, and more generally could affect the value of our intellectual property. In particular, our ability to stop third parties from making, using, selling, offering to sell, or importing any of our patented inventions, either directly or indirectly, will depend in part on our success in obtaining, defending, and enforcing patent claims that cover our technology, inventions, and improvements. With respect to both licensed and company-owned intellectual property, we cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications filed by us in the future, nor can we be sure that any of our existing patents or any patents that may be granted to us in the future will be commercially useful in protecting our platforms and product candidates and the methods used to manufacture those platforms and product candidates.

 

Our issued patents and those that may issue in the future may be challenged, invalidated, or circumvented, which could limit our ability to stop competitors from marketing related platforms or product candidates or limit the length of the term of patent protection that we may have for our POD device and product candidates. In addition, the rights granted under any issued patents may not provide us with protection or competitive advantages against competitors with similar technology. Furthermore, our competitors may independently develop similar technologies. For these reasons, we may have competition for our POD device and product candidates. Moreover, because of the extensive time required for development, testing and regulatory review of a potential product, it is possible that, before any particular product candidate can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent. For this and more comprehensive risks related to our proprietary technology, inventions, improvements, platforms and product candidates, please see the section titled “Risk Factors—Risks Related to Intellectual Property.”

 

Moreover, even our issued patents do not guarantee us the right to practice our technology in relation to the commercialization of our platform’s product candidates. Third parties may have, or may obtain, blocking patents that could be used to prevent us from commercializing our POD device and product candidates and practicing our proprietary technology.

 

We own trademark registrations and pending applications for use in connection with Trudhesa and our other product candidates in several jurisdictions, including the United States. The IMPEL mark is registered in Austria, Canada, China, the European Union, India, Japan, South Korea, United Kingdom, and the United States, and we own a pending application in Mexico. The IMPEL mark in simplified Chinese characters mark is registered in China. The IMPEL mark with the Impel NeuroPharma logo is registered in Australia. The Impel NeuroPharma logo is registered in Australia, China, the European Union, India, Japan, Mexico, South Korea, United Kingdom, and the United States, and we own a pending application in Canada. The POD mark is registered in Australia, the European Union, India, United Kingdom, and the United States. The IMPELPOD mark is registered in China, Japan, Mexico, and South Korea, and we own pending applications in Canada and Mexico. The Trudhesa mark is registered in Australia, China, the European Union, India, Japan, South Korea, and the United Kingdom, and we own pending applications in Canada, Mexico, and the United States. We own pending applications for the TULIFTA mark and the Trudhesa logo in the United States.

 

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It is our policy to require our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all confidential information concerning our business or financial affairs developed or made known to the individual during the course of the individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of employees, the agreements provide that all inventions conceived by the individual, and which are related to our current or planned business or research and development or made during normal working hours, on our premises or using our equipment or proprietary information, are our exclusive property. In many cases our confidentiality and other agreements with consultants, outside scientific collaborators, sponsored researchers and other advisors require them to assign or grant us licenses to inventions they invent as a result of the work or services they render under such agreements or grant us an option to negotiate a license to use such inventions.

 

We also seek to preserve the integrity and confidentiality of our proprietary technology and processes by maintaining physical security of our premises and physical and electronic security of our information technology systems. Although we have confidence in these individuals, organizations, and systems, agreements or security measures may be breached and we may not have adequate remedies for any breach. To the extent that our employees, contractors, consultants, collaborators, and advisors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting inventions.

 

Government Regulation

 

Government authorities in the United States, at the federal, state and local level, and in other countries and jurisdictions extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products. The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources.

 

FDA Approval Process

 

In the United States, pharmaceutical products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act, or FDCA, and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products and medical devices. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as a clinical hold, FDA refusal to approve a pending NDA, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution.

 

Pharmaceutical product development for a new product or certain changes to an approved product in the United States typically involves preclinical laboratory and animal tests, the submission to the FDA of an investigational new drug application, or IND, which must become effective before clinical testing may commence, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug for each indication for which FDA approval is sought. Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease.

 

Preclinical tests include laboratory evaluation of product chemistry, formulation, and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the product. The conduct of the preclinical tests must comply with federal regulations and requirements, including good laboratory practices. The results of preclinical testing are submitted to the FDA as part of an IND along with other information, including information about product CMC, and a proposed clinical trial protocol. Long-term preclinical tests, such as animal tests of reproductive toxicity and carcinogenicity, may continue after the IND is submitted. 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.

 

Clinical trials involve the administration of the investigational new drug to healthy volunteers or patients under the supervision of a qualified investigator. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with good clinical practices, or GCPs, which are standards meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators, and monitors; as well as (iii) under protocols detailing the

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objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to the FDA as part of the IND.

 

The FDA may order the temporary, or permanent, discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to the clinical trial patients. The study protocol and informed consent information for patients in clinical trials must also be submitted to an IRB for approval. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements, or may impose other conditions.

 

Clinical trials to support NDAs for marketing approval are typically conducted in three sequential phases, but the phases may overlap. In Phase 1, the initial introduction of the drug into healthy human subjects or patients, the drug is tested to assess metabolism, pharmacokinetics, pharmacological actions, side effects associated with increasing doses, and, if possible, early evidence on effectiveness. Phase 2 usually involves trials in a limited patient population to determine the effectiveness of the drug for a particular indication, dosage tolerance, and optimum dosage, and to identify common adverse effects and safety risks. If a compound demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to obtain the additional information about clinical efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the drug and to provide adequate information for the labeling of the drug. In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the efficacy of the drug. A single Phase 3 trial may be sufficient in rare instances, including (1) where the study is a large multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (2) when in conjunction with other confirmatory evidence.

 

The manufacturer of an investigational drug in a Phase 2 or 3 clinical trial for a serious or life-threatening disease is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for expanded access.

 

After completion of the required clinical testing, an NDA is prepared and submitted to the FDA. FDA approval of the NDA is required before marketing of the product may begin in the United States. The NDA must include the results of all preclinical, clinical, and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture, and controls. The cost of preparing and submitting an NDA is substantial. The submission of most NDAs is additionally subject to a substantial application user fee, currently exceeding $3,117,000 for Fiscal Year 2022. The manufacturer or sponsor under an approved NDA is also subject to an annual program fee, currently exceeding $369,000 for each prescription drug product for Fiscal Year 2022. These fees are typically increased annually.

 

The FDA has 60 days from its receipt of an NDA to determine whether the application will be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review. Once the submission is accepted for filing, the FDA begins an in-depth review. The FDA has agreed to certain performance goals in the review of NDAs. Most applications for standard review drug products that are not new molecular entities, or NMEs, are reviewed within ten months of the date of submission of the NDA to the FDA; most applications for priority review drugs that are not NMEs are reviewed within six months of the date of submission of the NDA to the FDA. Priority review can be applied to drugs that the FDA determines offer major advances in treatment or provide a treatment where no adequate therapy exists. The review process for both standard and priority review may be extended by the FDA for three additional months to consider certain late-submitted information, or information intended to clarify information already provided in the submission.

 

The FDA may also refer applications for novel drug products, or drug products that present difficult questions of safety or efficacy, to an advisory committee—typically a panel that includes clinicians and other experts—for review, evaluation, and a recommendation as to whether the application should be approved. The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendations.

 

Before approving an NDA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will generally inspect the facility or the facilities at which the drug is manufactured. The FDA will not approve the product unless compliance with cGMP is satisfactory and the NDA contains data that provide substantial evidence that the drug is safe and effective in the indication studied.

 

After the FDA evaluates the NDA and the manufacturing facilities, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing, or information, in order for the FDA to reconsider the application. If, or when, those deficiencies have

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been addressed to the FDA’s satisfaction in a resubmission of the NDA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included.

 

An approval letter authorizes commercial marketing of the drug with specific prescribing information for specific indications. As a condition of NDA approval, the FDA may require a risk evaluation and mitigation strategy, or REMS, to help ensure that the benefits of the drug outweigh the potential risks. REMS can include medication guides, communication plans for healthcare professionals, and elements to assure safe use, or ETASU. ETASU can include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring, and the use of patient registries. The requirement for a REMS can materially affect the potential market and profitability of the drug. Moreover, product approval may require substantial post-approval testing and surveillance to monitor the drug’s safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained, or problems are identified following initial marketing. No REMS was required for Trudhesa.

 

Changes to some of the conditions established in an approved application, including changes in indications, labeling, or manufacturing processes or facilities, require submission and FDA approval of a new NDA or NDA supplement before the change can be implemented. An NDA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing NDA supplements as it does in reviewing NDAs.

 

Section 505(b)(2) New Drug Applications

 

An alternative to the 505(b)(1) NDA pathway described above is an NDA submitted under Section 505(b)(2) of the FDCA, which enables the applicant to rely, in part, on the FDA’s prior findings in approving a similar product or published literature in support of its application.

 

505(b)(2) NDAs often provide an alternate path to FDA approval for modified formulations, new routes of administration, or new uses of previously approved products.

 

Section 505(b)(2) permits the submission of an NDA where at least some of the safety and efficacy information required for approval comes from studies not conducted by, or for, the applicant and for which the applicant has not obtained a right of reference. If the Section 505(b)(2) applicant can establish that reliance on the FDA’s prior findings of safety or effectiveness is scientifically appropriate, it may eliminate the need to conduct certain preclinical or clinical studies of the new product. The FDA may also require companies to perform additional studies or measurements to support the change from the approved product. The FDA may then approve the new product candidate for all, or some, of the indications for which the referenced product has been approved, as well as for any new indication sought by the Section 505(b)(2) applicant. The Trudhesa NDA was filed under Section 505(b)(2) and referred to both the approved IV DHE product (D.H.E. 45) and Migranal.

 

Fast Track Designation and Accelerated Approval

 

The FDA is required to facilitate the development, and expedite the review, of drugs that are intended for the treatment of a serious or life-threatening disease or condition for which there is no effective treatment, and which demonstrate the potential to address unmet medical needs for the condition. Under the Fast Track program, the sponsor of a new drug candidate may request that the FDA designate the drug candidate for a specific indication as a Fast Track drug concurrent with, or after, the filing of the IND for the drug candidate. The FDA must determine if the drug candidate qualifies for Fast Track Designation within 60 days of receipt of the sponsor’s request.

 

Under the Fast Track program, the FDA may grant Fast Track Designation for a drug if it is intended, whether alone or in combination with one or more other drugs, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition. The FDA will determine that a product will fill an unmet medical need if it will provide a therapy where none exists or provide a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.

 

If a submission is granted Fast Track Designation, the sponsor may engage in more frequent interactions with the FDA, and the FDA may initiate review of sections of the NDA before the application is complete. This rolling review is available if the applicant provides, and the FDA approves, a schedule for the submission of the remaining information and the applicant pays applicable user fees. However, the FDA’s time period goal for reviewing an application does not begin until the last section of the NDA is submitted. Additionally, Fast Track Designation may be withdrawn by the FDA if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

 

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The FDA may grant accelerated approval to a drug for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon adequate and well-controlled clinical trials establishing that the drug has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. The FDA may also grant accelerated approval for such a condition when the drug has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. Drugs granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

 

A drug candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post-approval trials, or confirm a clinical benefit during post-marketing trials, will allow the FDA to withdraw the drug from the market on an expedited basis. All promotional materials for drug candidates approved under accelerated regulations are subject to prior review by the FDA.

 

Disclosure of Clinical Trial Information

 

Sponsors of clinical trials of FDA-regulated products, including drugs, are required to register and disclose certain clinical trial information on ClinicalTrials.gov. Information related to the product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed in certain circumstances for up to two years after the date of completion of the trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs.

 

Pediatric Information

 

Under the Pediatric Research Equity Act, NDAs or supplements to NDAs 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 drug is safe and effective. The FDA may grant full or partial waivers or deferrals for submission of data.

 

The Best Pharmaceuticals for Children Act, or BPCA, provides NDA holders a six-month extension of any exclusivity—patent or nonpatent—for a drug if certain conditions are met. Conditions for exclusivity include the FDA’s determination that information relating to the use of a new drug in the pediatric population may produce health benefits in that population, the FDA making a written request for pediatric studies, and the applicant agreeing to perform, and reporting on, the requested studies within the statutory timeframe. Applications under the BPCA are treated as priority applications, with all of the benefits that designation confers.

 

Post-Approval Requirements

 

Once an NDA is approved, a product will be subject to certain post-approval requirements. For instance, the FDA closely regulates the post-approval marketing and promotion of drugs, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities and promotional activities involving the internet. Drugs may be marketed only for the approved indications and in accordance with the provisions of the approved labeling.

 

Adverse event reporting and submission of periodic reports is required following FDA approval of an NDA. The FDA also may require post-marketing testing, known as Phase 4 testing, REMS, and surveillance to monitor the effects of an approved product, or the FDA may place conditions on an approval that could restrict the distribution or use of the product. In addition, quality control, drug manufacture, packaging, and labeling procedures must continue to conform to cGMP after approval. Drug manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMP. Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality-control to maintain compliance with cGMP. Regulatory authorities may withdraw product approvals or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems are subsequently discovered.

 

The FDA strictly regulates marketing, labeling, advertising and promotion of drugs that are placed on the market. Advertising and promotion of drugs must be in compliance with the FDCA and its implementing regulations and only for the

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approved indications and in a manner consistent with the approved labeling. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability, including investigation by federal and state authorities.

 

The Hatch-Waxman Act

 

Orange Book Listing

 

In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent whose claims cover the applicant’s product. Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of approval of an Abbreviated New Drug Application, or ANDA. An ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown through bioequivalence testing to be therapeutically equivalent to the listed drug. Other than the requirement for bioequivalence testing, ANDA applicants are not required to conduct, or submit results of, pre-clinical or clinical tests to prove the safety or effectiveness of their drug product. Drugs approved in this way are commonly referred to as “generic equivalents” to the listed drug and can often be substituted by pharmacists under prescriptions written for the original listed drug.

 

The ANDA applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book. Specifically, the applicant must certify that (i) the required patent information has not been filed; (ii) the listed patent has expired; the listed patent has not expired but will expire on a particular date and approval is sought after patent expiration; or (iv) the listed patent is invalid or will not be infringed by the new product. The ANDA applicant may also elect to submit a statement certifying that its proposed ANDA label does not contain (or carve out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent. If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired. A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification. If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the ANDA applicant.

 

The ANDA application also will not be approved until any applicable non-patent exclusivity listed in the OrangeBook for the referenced product has expired.

 

To the extent that a Section 505(b)(2) applicant is relying on the FDA’s prior findings of safety or effectiveness for an already approved product, the applicant is required to certify to the FDA concerning any patents listed for the approved product in the Orange Book to the same extent that an ANDA applicant would. Thus, approval of a 505(b)(2) NDA can be stalled until all the listed patents claiming the referenced product have expired, until any non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the Orange Book for the referenced product has expired, and, in the case of a Paragraph IV certification and subsequent patent infringement suit, until the earlier of 30 months, settlement of the lawsuit or a decision in the infringement case that is favorable to the Section 505(b)(2) applicant.

 

Exclusivity

 

Upon NDA approval of a new chemical entity, which is a drug that contains no active moiety that has been approved by the FDA in any other NDA, that drug receives five years of marketing exclusivity during which the FDA cannot receive any ANDA seeking approval of a generic version of that drug. An ANDA may be submitted one year before NCE exclusivity expires if a Paragraph IV certification is filed. If there is no listed patent in the Orange Book, there may not be a Paragraph IV certification, and, thus, no ANDA may be filed before the expiration of the exclusivity period. Certain changes to a drug, such as the addition of a new indication to the package insert, can be the subject of a three-year period of exclusivity if the application contains reports of new clinical investigations (other than bioavailability studies) conducted or sponsored by the sponsor that were essential to approval of the application. FDA cannot approve an ANDA for a generic drug that includes the change during the exclusivity period.

 

The FDCA alternatively provides three years of marketing exclusivity for an NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are

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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 modification for which the drug received approval on the basis of the new clinical investigations and does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs for drugs containing the active agent for the original indication or condition of use. 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.

 

Patent Term Extension

 

After NDA approval, owners of relevant drug patents may apply for up to a five-year patent extension. The allowable patent term extension is calculated as half of the drug’s testing phase (the time between IND application and NDA submission) and all of the review phase (the time between NDA submission and approval up to a maximum of five years). The time can be shortened if the FDA determines that the applicant did not pursue approval with due diligence. The total patent term after the extension may not exceed 14 years, and only one patent can be extended. For patents that might expire during the application phase, the patent owner may request an interim patent extension. An interim patent extension increases the patent term by one year and may be renewed up to four times. For each interim patent extension granted, the post-approval patent extension is reduced by one year. The director of the United States Patent and Trademark Office must determine that approval of the drug covered by the patent for which a patent extension is being sought is likely. Interim patent extensions are not available for a drug for which an NDA has not been submitted.

 

Combination Products

 

A combination product is a product comprising (i) two or more regulated components, i.e., drug/device, biologic/device, drug/biologic, or drug/device/biologic, that are physically, chemically, or otherwise combined or mixed and produced as a single entity; (ii) two or more separate products packaged together in a single package or as a unit and comprising drug and device products, device and biological products, or biological and drug products; (iii) a drug, device, or biological product packaged separately that according to its investigational plan or proposed labeling is intended for use only with an approved individually specified drug, device, or biological product where both are required to achieve the intended use, indication, or effect and where upon approval of the proposed product the labeling of the approved product would need to be changed, for example, to reflect a change in intended use, dosage form, strength, route of administration, or significant change in dose; or (iv) any investigational drug, device, or biological product packaged separately that according to its proposed labeling is for use only with another individually specified investigational drug, device, or biological product where both are required to achieve the intended use, indication, or effect.

 

The FDA is divided into various branches, or Centers, by product type. Different Centers typically review drug, biologic, or device applications. In order to review an application for a combination product, the FDA must decide which Center should be responsible for the review. FDA regulations require that the FDA determine the combination product’s primary mode of action, which is the single mode of a combination product that provides the most important therapeutic action of the combination product. The Center that regulates that portion of the product becomes the lead evaluator. When evaluating an application, a lead Center may consult other Centers but still retain complete reviewing authority, or it may collaborate with another Center, by which the Center assigns review of a specific section of the application to another Center, delegating its review authority for that section. Typically, an applicant submits a single marketing application to the Center selected to be the lead evaluator, although separate applications for each constituent part may be submitted to the applicable Centers. One reason to submit multiple evaluations is if the applicant wishes to receive some benefit that accrues only from approval under a particular type of application, like new drug product exclusivity. If multiple applications are submitted, each may be evaluated by a different lead Center.

 

In a drug/device combination product, where the device component is a prefilled drug delivery device, the primary mode of action is typically a drug mode of action with the Center for Drug Evaluation and Research, or CDER, as the lead Center. CDER would review the NDA in consultation with the Center for Devices and Radiological Health (CDRH) on device-specific issues. For co-packaged or single-entity combination products, such as pre-filled drug-delivery devices, there are two ways to comply with cGMP requirements. Manufacturers can either (i) demonstrate compliance with all cGMP regulations applicable to each of the constituent parts in the combination product or (ii) in the case of drug-device combination products, demonstrate compliance with either the drug cGMP regulations or the device QSR and also demonstrate compliance with additional provisions from the other of these two sets of cGMP requirements, as specified in the combination products regulations.

 

Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA, which may include any of the following sanctions: warning or untitled letters, fines, injunctions, civil or criminal penalties, recall or seizure

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of current or future products, operating restrictions, partial suspension or total shutdown of production, refusal or denial of submissions for new products, or withdrawal of clearance, authorization, or approval.

 

Other Healthcare Laws

 

In addition to FDA restrictions on marketing of pharmaceutical products, several other types of state and federal laws have been applied to restrict certain general business and marketing practices in the pharmaceutical industry. These laws include anti-kickback statutes, false claims, transparency, and health information privacy laws and other healthcare laws and regulations.

 

The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid, or other federally financed healthcare programs. The Affordable Care Act, or ACA, amended the intent element of the federal statute so that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to commit a violation. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers, among others, on the other. Although there are a number of statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor.

 

Federal civil and criminal false claims laws, including the federal civil False Claims Act, prohibit any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to have a false claim paid. This includes claims made to programs where the federal government reimburses, such as Medicare and Medicaid, as well as programs where the federal government is a direct purchaser, such as when it purchases off the Federal Supply Schedule. Pharmaceutical and other healthcare companies have been prosecuted under these laws for, among other things, allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. In addition, certain marketing practices, including off-label promotion, may also violate false claims laws. Additionally, the ACA amended the federal Anti-Kickback Statute such that a violation of that statute can serve as a basis for liability under the federal False Claims Act. Most states also have statutes or regulations similar to the federal Anti-Kickback Statute and civil False Claims Act, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

 

Other federal statutes pertaining to healthcare fraud and abuse include the civil monetary penalties statute, which prohibits, among other things, the offer or payment of remuneration to a Medicaid or Medicare beneficiary that the offeror or payor knows or should know is likely to influence the beneficiary to order a receive a reimbursable item or service from a particular supplier, and the additional federal criminal statutes created by the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which prohibits, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or obtain by means of false or fraudulent pretenses, representations or promises any money or property owned by or under the control of any healthcare benefit program in connection with the delivery of or payment for healthcare benefits, items or services.

 

In addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their respective implementing regulations, including the Final Omnibus Rule published on January 25, 2013, impose obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates that perform certain services involving the storage, use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information. HITECH increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, many state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, and often are not preempted by HIPAA.

 

Further, pursuant to the ACA, the CMS has issued a final rule that requires manufacturers of prescription drugs to collect and annually report information on certain payments or transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Beginning calendar year 2021, manufacturers must collect information regarding payments and other transfers of value to physician assistants, nurse practitioners clinical nurse specialists, certified registered nurse anesthetists and anesthesiologist assistants, and certified nurse-midwives for reporting

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in 2022. The reported data is made available in searchable form on a public website on an annual basis. Failure to submit required information may result in civil monetary penalties.

 

In addition, several states now require prescription drug companies to report certain expenses relating to the marketing and promotion of drug products and to report gifts and payments to individual healthcare practitioners in these states. Other states prohibit various marketing-related activities, such as the provision of certain kinds of gifts or meals. Still other states require the posting of information relating to clinical studies and their outcomes. Some states require the reporting of certain pricing information, including information pertaining to and justifying price increases, or prohibit prescription drug price gouging. In addition, certain states require pharmaceutical companies to implement compliance programs or marketing codes. Certain states and local jurisdictions also require the registration of pharmaceutical sales representatives. Compliance with these laws is difficult and time consuming, and companies that do not comply with these state laws face civil penalties.

 

Efforts to ensure that business arrangements with third parties comply with applicable healthcare laws and regulations involve substantial costs. If a drug company’s operations are found to be in violation of any such requirements, it may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of its operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other federal or state government healthcare programs, including Medicare and Medicaid, integrity oversight and reporting obligations, imprisonment, and reputational harm. Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated. Any action for an alleged or suspected violation can cause a drug company to incur significant legal expenses and divert management’s attention from the operation of the business, even if such action is successfully defended.

 

Reimbursement

 

The regulations that govern pricing and reimbursement for new drugs and therapeutic biologics vary widely from country to country. Some countries require approval of the sale price of a drug or therapeutic biologic before it can be marketed. In many countries, the pricing review period begins after marketing approval is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted. As a result, a drug company can obtain regulatory approval for a product in a particular country, but then be subject to price regulations that delay commercial launch of that product.

 

A drug company’s ability to commercialize any products successfully will also depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government authorities, private health insurers and other organizations. Even if one or more products are successfully brought to the market, these products may not be considered cost-effective, and the amount reimbursed for such products may be insufficient to allow them to be sold on a competitive basis. Increasingly, third-party payors who reimburse patients or healthcare providers, such as government and private insurance plans, are requiring that drug companies provide them with predetermined discounts from list prices, and are seeking to reduce the prices charged or the amounts reimbursed for pharmaceutical products.

 

Significant delays can occur in obtaining reimbursement for newly-approved drugs or therapeutic biologics, and coverage may be more limited than the purposes for which the drug or therapeutic biologic is approved by the FDA or similar foreign regulatory authorities. Moreover, eligibility for reimbursement does not imply that any drug or therapeutic biologic will be reimbursed in all cases or at a rate that covers a drug company’s costs, including research, development, manufacture, sale and distribution.

 

Interim reimbursement levels for new drugs or therapeutic biologics, if applicable, may also be insufficient to cover a drug company’s costs and may not be made permanent. Reimbursement rates may be based on payments allowed for lower cost drugs or therapeutic biologics that are already reimbursed, may be incorporated into existing payments for other services and may reflect budgetary constraints or imperfections in Medicare data. Net prices for drugs or therapeutic biologics may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs or therapeutic biologics from countries where they may be sold at lower prices than in the United States. Further, no uniform policy for coverage and reimbursement exists in the United States. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations. Therefore, coverage and reimbursement can differ significantly from payor to payor.

 

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U.S. Healthcare Reform

 

Healthcare reforms that have been adopted, and that may be adopted in the future, could result in further reductions in coverage and levels of reimbursement for pharmaceutical products, increases in rebates payable under U.S. government rebate programs and additional downward pressure on pharmaceutical product prices. On September 9, 2021, the Biden administration published a wide-ranging list of policy proposals, most of which would need to be carried out by Congress, to reduce drug prices and drug payment. The HHS plan includes, among other reform measures, proposals to lower prescription drug prices, including by allowing Medicare to negotiate prices and disincentivizing price increases, and to support market changes that strengthen supply chains, promote biosimilars and generic drugs, and increase price transparency. Many similar proposals, including the plans to give Medicare Part D authority to negotiate drug prices, require drug manufacturers to pay rebates on drugs whose prices increase greater than the rate of inflation, and cap out-of-pocket costs, have already been included in policy statements and legislation currently being considered by Congress. It is unclear to what extent these and other statutory, regulatory, and administrative initiatives will be enacted and implemented

 

Employees and Human Capital Resources

 

Employees

 

As of December 31, 2021, we had 129 full-time employees and four full-time contract employees. Of these employees, 16 have an M.D. or a Ph.D. From time to time, we also retain consultants to support our organization. As of December 31, 2021, we had 12 consultants. None of our employees are represented by a labor union or covered by collective bargaining agreements, and we believe our relationship with our employees is good.

 

Diversity and Inclusion

 

We are committed to creating and maintaining a workplace free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law. Our management team and employees are expected to exhibit and promote honest, ethical and respectful conduct in the workplace.

 

Competitive Pay & Benefits

 

We strive to provide pay, comprehensive benefits and services that help meet the varying needs of our employees. Our total rewards package includes competitive pay; comprehensive healthcare benefits package for employees. In addition, we offer every full-time employee, both exempt and non-exempt, the benefit of equity ownership in the company through stock option grants.

 

Employee Development & Training

 

We focus on attracting, retaining, and cultivating talented individuals. We emphasize employee development and training by providing access to a wide range of online and instructor led development and continual learning programs. Employees are encouraged to attend scientific, clinical and technological meetings and conferences and have access to broad resources they need to be successful.

 

Corporate Information

 

We were incorporated under the laws of the State of Delaware in 2008. Our principal executive offices are located at 201 Elliott Avenue West, Suite 260, Seattle, WA 98119, and our telephone number is (206) 568-1466. Our website address is https://impelnp.com. The information contained on, or that can be accessed through, our website is not part of, and is not incorporated by reference into, this prospectus. Investors should not rely on any such information in deciding whether to purchase our common stock.

 

Available Information

 

We make available free of charge on 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 as soon as reasonably practicable after we electronically file or furnish such materials to the Securities and Exchange Commission, or SEC. The reports are also available at www.sec.gov

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Item 1A. Risk Factors.

 

You should carefully consider the following risk factors, in addition to the other information contained in this Annual Report on Form 10-K, including the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and our consolidated financial statements and related notes. If any of the events described in the following risk factors and the risks described elsewhere in this report occurs, our business, operating results and financial condition could be seriously harmed. This report also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this report.

 

Summary Risk Factors

 

Our business is subject to numerous risks and uncertainties, including those highlighted in the section of this report captioned “Risk Factors.” The following is a summary of the principal risks we face:

 

The development and commercialization of pharmaceutical products is subject to extensive regulation, and we may not obtain regulatory approvals for INP105, INP107 or any other additional product candidates.
Our future commercial success depends upon attaining significant market acceptance of our product candidates, if approved, among physicians, patients, health care payors and others in the medical community necessary for commercial success.
We are a commercial-stage pharmaceutical company with a limited operating history and have incurred net losses since our inception. We anticipate that we will continue to incur substantial operating losses for the foreseeable future and we may never achieve or sustain profitability.
We will require substantial additional financing to achieve our goals, and a failure to obtain this necessary capital when needed could force us to delay, limit, reduce or terminate our product development or commercialization efforts.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates on unfavorable terms to us.
Clinical failure may occur at any stage of clinical development, and we may never succeed in developing and commercializing additional marketable product candidates or generating additional product revenue.
Delays in the commencement, enrollment or completion of clinical trials of our product candidates, or in the acceptance of foreign clinical trial data, could result in increased costs to us as well as a delay or failure in obtaining regulatory approval, or prevent us from commercializing our additional product candidates on a timely basis, or at all.
The ongoing COVID-19 pandemic, or similar public health crises, could have a material adverse impact on our business, financial condition and results of operations, including through disruption to our planned clinical trials, supply chains, business operations and commercialization efforts for Trudhesa and our other product candidates.
We rely entirely on third parties for the manufacturing of product candidates that we develop for nonclinical studies and clinical trials and expect to continue to do so for commercialization. If we encounter difficulties in negotiating manufacturing and supply agreements with third-party manufacturers and suppliers of our POD device and the active ingredients in Trudhesa, INP105, and INP107, our ability to commercialize our product candidates, if approved, would be impaired.
If we are not able to obtain and enforce patent protection for our technologies or product candidates, development and commercialization of our technology and product candidates may be adversely affected.
We may encounter difficulties in managing our growth and expanding our operations successfully.
If we fail to attract and retain senior management and key scientific personnel, we may be unable to successfully develop and commercialize our product candidates.
The market price of our common stock may be volatile, which could result in substantial losses for investors.

 

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Risks Related to Our Financial Position and Need for Additional Capital

 

We are a commercial-stage biopharmaceutical company and have incurred net losses since our inception. We anticipate that we will continue to incur substantial operating losses for the foreseeable future and we may never achieve or sustain profitability.

 

We are a commercial-stage biopharmaceutical company formed in 2008. Since inception, we have devoted substantially all of our financial resources to research and development, including our clinical and nonclinical development activities. To date, we have financed our operations primarily through the sale and issuance of redeemable convertible preferred stock, convertible notes and warrants, common stock offerings, debt financings and royalty financings.

 

We have incurred significant net losses since our inception. Our net losses were $76.5 million and $45.8 million for the years ended December 31, 2021 and 2020, respectively. As of December 31, 2021, we had an accumulated deficit of $214.8 million. We cannot predict when or whether we will become profitable and we may never be able to develop or commercialize our product candidates. Our losses have resulted principally from costs incurred in our product candidate discovery and development activities. We expect to incur net losses for the foreseeable future.

 

Our financial position will depend, in part, on the rate of our future expenditures and our ability to obtain funding through equity or debt financings, strategic collaborations, or additional grants. If we are required by the FDA, or any equivalent foreign regulatory authority, to perform clinical trials or studies in addition to those we currently expect to conduct, including if foreign clinical trial data are not accepted by the FDA, or if there are any delays in completing the clinical trials of our product candidates, our expenses could increase substantially. Although we have recently received approval for Trudhesa, the resulting revenue from its commercialization may not enable us to achieve profitability. Even if we obtain regulatory approval to market additional product candidates, our future revenues will depend upon the size of any markets in which our product candidates have received approval, and our ability to achieve sufficient market acceptance, reimbursement from third-party payors and adequate market share for our product candidates in those markets.

 

We expect our expenses and net losses to increase significantly as we continue to commercialize Trudhesa, continue our development of, and seek regulatory approvals for, our other product candidates, and begin to commercialize other approved products as well as hire additional personnel, protect our intellectual property and incur additional costs associated with operating as a public company. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing of our clinical studies and trials, associated manufacturing needs, commercialization activities if our other product candidates are approved and our expenditures on other research and development activities.

 

To become and remain profitable, we must expand the market for Trudhesa, successfully develop our product candidates, obtain regulatory approval for them, and manufacture, market and sell those product candidates for which we may obtain regulatory approval. We may not succeed in these activities and we may never generate revenue from product sales that are significant enough to achieve profitability. Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business for any reason, including as a result of the COVID-19 pandemic. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital. Our failure to become or remain profitable would depress our market value and could impair our ability to raise capital, expand our business, discover or develop other product candidates or continue our operations.

 

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

 

As of December 31, 2021, we had $88.2 million of cash and cash equivalents. We believe that we will continue to expend substantial resources for the foreseeable future as we prepare for the commercialization of Trudhesa, develop additional product candidates, continue clinical trials for our existing product candidates and pursue commercialization of our product candidates, if approved. In addition, other unanticipated costs may arise. Because the outcome of our planned and anticipated clinical trials are highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our product candidates. Our costs will increase if we suffer any delays in our planned clinical trials for our current product candidates. We expect to incur additional costs associated with operating as a public company, hiring additional personnel and potentially expanding our facilities.

 

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We believe our existing cash and cash equivalents of approximately $88.2 million as of December 31, 2021 along with proceeds received from the Revenue Interest Financing Agreement and borrowings under the Oaktree Loan and Security Agreement in March 2022, will fund our projected operating requirements into 2024. Our forecast of the period of time through which our financial reserves 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. For further details regarding the terms of the March 2022 transactions, see “Management’s Discussion and Analysis—Liquidity and Capital Resources—Sources of Liquidity.” 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.

 

Our future capital requirements will depend on many factors, including:

the cost of commercialization activities for Trudhesa, or any other approved product, including marketing, sales and distribution costs;
the timing of, and the costs involved in, obtaining regulatory approvals for our product candidates if clinical trials are successful;
the scope, progress, results and costs of developing and advancing our product candidates through clinical trials and researching and discovering new product candidates;
our ability to establish and maintain strategic partnerships, licensing or other arrangements and the financial terms of such agreements;
the cost of manufacturing our product candidates for clinical trials in preparation for regulatory approval and in preparation for commercialization;
our ability to generate revenue from approved product candidates, if any; and
the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, including litigation costs and the outcome of such litigation.

 

We will need to raise additional funds to address our goals. Additional funds may not be available when we need them on terms that are acceptable to us, or at all. Until we can generate sufficient revenue to finance our cash requirements, which we may never do, we expect to finance our future cash needs through a combination of public or private equity offerings, debt financings, collaborations, strategic alliances, licensing arrangements, and other marketing or distribution arrangements. If adequate funds are not available to us on a timely basis, we may be required to delay, limit, reduce or terminate nonclinical studies, clinical trials or other development activities for one or more of our product candidates or delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to continue to commercialize Trudhesa and our other product candidates if approved.

 

Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates on unfavorable terms to our business.

 

We may seek additional capital through a variety of means, including through private and public equity offerings and debt financings. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of such equity or convertible debt securities may include liquidation or other preferences that are senior to or otherwise adversely affect your rights as a stockholder. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take certain actions, such as incurring additional debt, making capital expenditures, declaring dividends or encumbering our assets to secure future indebtedness. For example, our loan agreement with Oaktree is secured by a lien on substantially all of our assets, and our revenue interest financing agreement Oaktree is secured by accounts receivable arising from net sales of Trudhesa and our intellectual property relating to Trudhesa. If we raise additional funds through strategic partnerships or royalty monetization agreements with third parties, we may have to relinquish valuable rights to our technologies or product candidates, or grant licenses on terms that are not favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or commercialization efforts for our product candidates, or grant rights to third parties to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

 

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Our quarterly operating results may fluctuate significantly or may fall below the expectations of investors or securities analysts, each of which may cause our stock price to fluctuate or decline.

 

We expect our operating results to be subject to quarterly fluctuations. Our net loss and other operating results will be affected by numerous factors, including:

variation in the level of expense related to the commercialization of Trudhesa or any other product candidates that receives regulatory approval, and quarterly fluctuations in product sales or Trudhesa or any other product candidates that receives regulatory approval;
variations in the level of expense related to the ongoing development of our product candidates or future development programs;
results of nonclinical and clinical trials, or the addition or termination of clinical trials or funding support by us, or existing or future collaborators or licensing partners;
our execution of any additional collaboration, licensing or similar arrangements, and the timing of payments we may make or receive under existing or future arrangements or the termination or modification of any such existing or future arrangements;
any intellectual property infringement lawsuit or opposition, interference or cancellation proceeding in which we may become involved;
strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments or changes in business strategy;
if any of our product candidates receive regulatory approval, the terms of such approval and market acceptance and demand for such product candidates;
regulatory developments affecting our product candidates or those of our competitors; and
changes in general market and economic conditions.

 

If our quarterly operating results fall below the expectations of investors or securities analysts, the price of our common stock could decline substantially. Furthermore, any quarterly fluctuations in our operating results may, in turn, cause the price of our common stock to fluctuate substantially. We believe that quarterly comparisons of our financial results should not be relied upon as an indication of our future performance.

 

Risks Related to Commercialization of Trudhesa and Our Other Product Candidates

 

Our future commercial success depends upon attaining significant market acceptance of Trudhesa and our other product candidates, if approved, among physicians, patients, health care payors and others in the medical community necessary for commercial success.

 

Trudhesa, and any other product candidates for which we receive regulatory approval in the future may not gain market acceptance among physicians, health care payors, patients and the medical community. There are several approved acute treatments for migraine currently on the market, including triptans, calcitonin gene-related peptides antagonists, or gepants, lasmiditan and alternative formulations of DHE, such as Migranal, which is also administered intranasally. All of these will be competitive with Trudhesa and our level of market acceptance of Trudhesa for the acute treatment for migraine may be lower than we expect. Market acceptance of Trudhesa or any other approved product candidates depends on a number of factors, including:

the efficacy and safety of our product candidates;
perceived advantages of our product candidates over alternative treatments, such as oral, IM and IV formulations;
the indications for which the product candidates are approved and the labeling approved by regulatory authorities for use with the product candidates, including any warnings, limitations or contraindications contained in a product’s approved labeling;
acceptance by physicians and patients of the product candidate as a safe and effective treatment;
the cost, safety and efficacy of treatment in relation to alternative treatments, including generic versions of the product candidates;

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the extent to which our product candidates are included on formularies of hospitals and managed care organizations;
the availability of coverage and adequate reimbursement and pricing by third-party payors and government authorities for the product candidates;
relative convenience and ease of administration of the product candidates;
the prevalence and severity of adverse side effects;
the timing of market introduction of competitive products;
restrictions on the distribution of our product candidates;
the effectiveness of our sales and marketing efforts;
unfavorable publicity relating to our product candidates; and
the approval of other new therapies for the same indications.

 

Market acceptance is critical to our ability to generate significant revenue and become profitable. Trudhesa and any other product candidate that is approved and commercialized, may be accepted in only limited capacities or not at all. If Trudhesa or any other approved product candidates are not accepted by the market to the extent that we expect, we may not be able to generate significant revenue and our business would suffer.

 

The market for Trudhesa and our other product candidates may not be as large as we expect.

 

Our estimates of the potential market opportunity for Trudhesa and our other product candidates include several key assumptions based on our industry knowledge, industry publications, third-party research reports and other surveys, including surveys commissioned by us. These assumptions include the size of our target populations, the prevalence and incidence of each of our target indications, the number of patients receiving current treatment, the percentage of patients unsatisfied with the current treatments, the number of diagnosed but untreated patients, the compliance and adherence of patients in our target populations, the number of treatment centers and prescribing physicians and the percentage of payer acceptance. While we believe that our internal assumptions are reasonable, if any of these assumptions proves to be inaccurate, then the actual market for our product candidates could be smaller than our estimates of our potential market opportunity. If the actual market for any of our product candidates is smaller than we expect, our product revenue may be limited, and it may be more difficult for us to achieve or maintain profitability.

 

In addition, the FDA has required labeling restrictions on the patients and uses of Trudhesa and we anticipate may require similar labeling restrictions on our other product candidates that may be approved by the FDA, including but not limited to contraindications for use in certain populations. For example, upper nasal space drug delivery may not be appropriate for use by patients with certain pre-existing conditions, such as chronic rhinitis with or without nasal polyposis or anatomical nasal obstruction.

 

If we are unable to maintain and expand commercial distribution capabilities, we may not be successful in commercializing our product candidates if and when they are approved.

 

We intend to expand our sales and marketing infrastructure for Trudhesa to further penetrate the migraine acute treatment with Trudhesa or by marketing our other product candidates in the United States, if and when they are approved. There are risks involved with establishing our own sales, marketing and distribution capabilities and entering into arrangements with third parties to perform these services. For example, recruiting and retaining a sales force is expensive and time consuming and challenges could impact the trajectory and performance of a product.

 

Factors that may inhibit our efforts to commercialize Trudhesa and our other product candidates, if approved, on our own include:

our inability to recruit, train and retain adequate numbers of effective sales, marketing, reimbursement, customer service, medical affairs, and other support personnel;
the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to prescribe any product candidates;
the inability of reimbursement professionals to negotiate arrangements for formulary access, reimbursement and other acceptance by payors for our product candidates;

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restricted or closed distribution channels that make it difficult to distribute our product candidates to segments of the patient population;
the lack of complementary product candidates 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 commercialization organization.

 

In addition, we may not be successful in entering into arrangements with third parties to sell, market and distribute our product candidates outside of the United States or may be unable to do so on terms that are favorable to us. We likely will have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our product candidates effectively. If we do not establish sales, marketing and distribution capabilities successfully, either on our own or in collaboration with third parties, we will not be successful in commercializing our product candidates.

 

Problems related to large-scale commercial manufacturing could cause delays in product launches, an increase in costs or shortages of product candidates.

 

Manufacturing finished drug products, especially in large quantities, is complex. The commercialization of Trudhesa requires several manufacturing steps and involves complex techniques to assure quality and sufficient quantity, especially as the manufacturing scale increases. Additionally, if our other product candidates receive regulatory approval, they will also require several manufacturing steps and may involve complex techniques to assure quality and sufficient quantity, especially as the manufacturing scale increases. Trudhesa and our other product candidates will need to be made consistently and in compliance with a clearly defined manufacturing process pursuant to FDA regulations. Accordingly, it will be essential to be able to validate and control the manufacturing process to assure that it is reproducible. Slight deviations anywhere in the manufacturing process, including obtaining materials, filling, labeling, packaging, storage, shipping, quality control and testing, may result in lot failures, delay in the release of lots, product recalls or spoilage. Success rates can vary dramatically at different stages of the manufacturing process, which can lower yields and increase costs. We may experience deviations in the manufacturing process that may take significant time and resources to resolve and, if unresolved, may affect manufacturing output and cause us to fail to satisfy contractual commitments, lead to delays in our clinical trials or result in litigation or regulatory action. Such actions would hinder our ability to meet contractual obligations and could cause material adverse consequences for our business.

 

Reimbursement for any approved products may be limited or unavailable, which could make it difficult for us to sell our product candidates profitably.

 

In both domestic and foreign markets, sales of Trudhesa and our other product candidates, if approved, will depend, in part, on the extent to which the costs of our product candidates will be covered by third-party payors, such as government health care programs, commercial insurance and managed health care organizations. These third-party payors decide which drugs will be covered and establish reimbursement levels for those drugs. The containment of health care costs has become a priority of foreign and domestic governments as well as private third-party payors. The prices of drugs have been a focus in this effort. Governments and private third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications, which could affect our ability to sell our product candidates profitably. Cost-control initiatives could cause us to decrease the price we might establish for product candidates, which could result in lower than anticipated product revenues.

 

Reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is:

a covered benefit under its health plan;
safe, effective and medically necessary;
appropriate for the specific patient;
cost-effective relative to other alternatives, including generic products; and
neither experimental nor investigational.

 

Adverse pricing limitations may hinder our ability to recoup our investment in our existing and any future product candidates, even if such product candidates obtain marketing approval.

 

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Obtaining coverage and reimbursement approval for a product from a government or other third-party payor is a time-consuming and costly process that could require us to provide supporting scientific, clinical and cost-effectiveness data for the use of our product candidates to the payor. Further, there is significant uncertainty related to third-party payor coverage and reimbursement of newly approved product candidates, including our product candidates if they are approved. We may not be able to provide data sufficient to gain acceptance with respect to coverage and reimbursement. We cannot be sure that coverage or adequate reimbursement will be available for any of our product candidates. Also, we cannot be sure that reimbursement amounts will not reduce the demand for, or the price of, Trudhesa and our other product candidates. If reimbursement is not available or is available only to limited levels, we may not be able to successfully commercialize certain of our product candidates. In addition, in the United States, third-party payors are increasingly attempting to contain health care costs by limiting both coverage and the level of reimbursement of new product candidates. As a result, significant uncertainty exists as to whether and how much third-party payors will reimburse patients for their use of newly approved product candidates, which in turn will put pressure on pricing.

 

Price controls may be imposed in foreign markets, which may adversely affect our future profitability.

 

In some countries, including member states of the European Union, the pricing of prescription drugs is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt of marketing approval for a product. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various European Union member states and other countries and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. In some countries, we may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing approval. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If reimbursement of our product candidates is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be adversely affected.

 

We face substantial competition, which may result in others discovering, developing or commercializing product candidates before, or more successfully, than we do.

 

The development and commercialization of new and improved pharmaceutical products is highly competitive. There are many pharmaceutical companies, biotechnology companies, public and private universities, government agencies and research organizations actively engaged in research and development of product candidates which may target the same markets as our product candidates. Our future success depends on our ability to demonstrate and maintain a competitive advantage with respect to the design, development and commercialization of our product candidates within those markets. We expect any future product candidates we develop and commercialize on our own or with our strategic partners, if approved, to compete with existing and leading products in the market on the basis of, among other things, product efficacy and safety, time to market, price, extent of adverse side effects experienced and convenience of administration and drug delivery.

 

For our product candidates, we are aware of the following competing efforts:

Trudhesa. Approved acute treatments for migraine include triptans, gepants, lasmiditan and alternative formulations of DHE, such as Migranal, which is administered intranasally. Some of these competitor products have been launched. Some of these competitors are also developing product candidates that utilize alternative routes of administration, including Biohaven Pharmaceuticals, Inc., Amneal Pharmaceuticals, Inc., Satsuma Pharmaceuticals, Inc. and Zosano Pharma Corporation, whose product candidates use nasal pumps or other drug delivery technologies.
INP105. While there are no FDA-approved acute treatments for agitation and aggression in ASD, commonly prescribed treatments include mostly atypical (second generation) antipsychotics. These can include risperdone (Risperdal), olanzapine (Zyprexa), quetiapine (Seroquel), aripiprazole (Abilify), ziprasidone (Geodon) and others.
INP107. Approved treatments for the symptoms of OFF episodes in Parkinson’s include carbidopa/levodopa (both short and long-acting oral forms), MAO-B inhibitors, COM-T inhibitors, dopamine agonists, amantadine such as Gocovri, apomorphine and inhaled levodopa, such as Inbrija. In addition, there are several product candidates under development by pharmaceutical companies such as Eli Lilly & Co., Intec Pharma Ltd. and AbbVie Inc. Some of these product candidates also utilize alternative routes of administration, such as Sunovion Pharmaceuticals, Inc., whose product candidate uses a sublingual film, and Acorda Therapeutics, Inc. whose product candidate uses a dry powder inhaler.

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One or more of our competitors may utilize their expertise in other methods of pharmaceutical drug delivery to develop and obtain approval for upper nasal space delivery products that may compete with our product candidates. These competitors may include Aegis, Optinose and other smaller pharmaceutical companies. Many of our competitors have significantly greater financial, technical, manufacturing, marketing, sales and supply resources or experience than we have had to date. Our ability to compete effectively will depend, in part, on the timing and scope of regulatory approvals for these product candidates, the availability and cost of manufacturing, marketing and sales capabilities, price, reimbursement coverage and patent position, the safety and effectiveness of our product candidates, the ease with which our product candidates can be administered and the extent to which patients accept relatively new routes of administration. Competing products could present superior treatment alternatives, including by being more effective, safer, less expensive or marketed and sold more effectively than any product candidates we may develop. Competitive products may reduce the demand and price for any product candidates we develop, making them obsolete or noncompetitive before we recover the expense of developing and commercializing such product. Our competitors could also recruit our employees, which could negatively impact our level of expertise and our ability to execute our business plan.

 

We rely entirely on third parties for the manufacturing of Trudhesa and our other product candidates that we develop for nonclinical studies and clinical trials and expect to continue to do so for commercialized products. If we encounter difficulties in negotiating manufacturing and supply agreements with third-party manufacturers and suppliers of our POD device and the active ingredients in Trudhesa and INP105, our ability to commercialize our other product candidates, if approved, would be impaired.

 

We do not own any manufacturing facilities and have limited experience in drug development and commercial manufacturing. We currently rely, and expect to continue to rely, on a limited number of experienced personnel and contract manufacturing organizations, or CMOs, and suppliers, including in some cases single-source suppliers, who assist in the production, assembly, test, validation, supply, storage and distribution of our drug-device combination product candidates in our clinical trials, and we do not control their activities. While we have developmental and commercial supply agreements in place with some of our key suppliers, we may not be able to obtain terms that are favorable to us or enter into commercial manufacturing and supply agreements at all with other necessary third parties. If we are unable to enter into such agreements on commercially reasonable terms, our ability to commercialize Trudhesa and our other product candidates, if approved, would be impaired, and our business, financial condition and results of operations would be materially adversely affected.

 

If and when product sales for Trudhesa, or other product candidates, if approved, grow, Trudhesa and our other product candidates will require production processes to be scaled up. We will be dependent on external manufacturers and suppliers to ensure that their manufacturing processes can be scaled up adequately such that we are able to supply the market. If any of our key suppliers are unable or unwilling to scale up production, our product candidates would be impaired, and our business, financial condition and results of operations would be materially adversely affected.

 

Additionally, we currently have no plans to build our own clinical or commercial scale manufacturing facility. Should any of our product candidates receive approval, we would lack the resources and expertise to manufacture and test, on a commercial scale, the technical performance of our POD device and the active ingredients, and would need to incur significant expense to develop and acquire such expertise internally or partner with a third-party who possesses such expertise.

 

We rely on third parties to conduct nonclinical studies and clinical trials, and if they do not properly and successfully perform their obligations to do so, we may not be able to obtain regulatory approvals for our product candidates.

 

We rely on CROs and other third parties to assist in managing, monitoring and otherwise carrying out nonclinical and clinical trials for our product candidates. We compete with many other companies for the resources of these third parties. Any disruption in supply from any supplier or manufacturing location, including on account of the COVID-19 pandemic, could lead to supply delays or interruptions which would damage our business, financial condition, results of operations and prospects. Further, the third parties on whom we rely generally may terminate their engagements at any time. Having to enter into alternative arrangements would delay development and commercialization of our product candidates.

 

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The FDA and comparable foreign regulatory authorities require compliance with regulations and standards, including GCP, for designing, conducting, monitoring, recording, analyzing, and reporting the results of clinical trials to assure that the data and results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected. Although we rely on third parties to conduct many of our clinical trials, they are not our employees, and we are responsible for ensuring that each of these clinical trials is conducted in accordance with our general investigational plan, protocol and other requirements. Our reliance on these third parties for clinical research and development activities will reduce our control over these activities but will not relieve us of our responsibilities.

 

If these third parties do not successfully carry out their duties under their agreements, if the quality or accuracy of the data they obtain is compromised due to their failure to adhere to clinical trial protocols or to regulatory requirements, or if they otherwise fail to comply with clinical trial protocols or meet expected deadlines, the clinical trials of our product candidates may not meet regulatory requirements. If clinical trials do not meet regulatory requirements or if these third parties need to be replaced, our nonclinical development activities or clinical trials may be extended, delayed, suspended or terminated. If any of these events occur, we may not be able to obtain regulatory approval of our product candidates on a timely basis, or at all.

 

If we encounter issues with our CMOs or suppliers, we may need to qualify alternative manufacturers or suppliers, which could impair our ability to sufficiently and timely manufacture and supply product candidates.

 

We currently depend on third parties to manufacture and supply our POD device, the active pharmaceutical ingredients and final formulations in our product candidates. Although we could obtain each of these components from other third-party suppliers, we would need to qualify and obtain FDA approval for another contract manufacturer or supplier as an alternative source for each such component, which could be costly and cause significant delays. Each of our current manufacturing and supply agreements include limitations on our ability to utilize alternative manufacturers or suppliers during the terms of the agreements, which impairs our ability to prepare in advance for any future manufacturing and supply shortages or quality issues.

 

In addition, some of our suppliers conduct their manufacturing operations for us at a single facility. Unless and until we qualify additional facilities, we may face limitations in our ability to respond to manufacturing and supply issues. For example, if regulatory, manufacturing or other problems require one of these manufacturers or suppliers to discontinue production at their respective facility, or if the equipment used for the production of our POD device or the active ingredients in these facilities is significantly damaged or destroyed by fire, flood, earthquake, power loss or similar events, the ability of such manufacturer or supplier to provide components or the active pharmaceutical ingredients needed for our product candidates, or to manufacture our product candidates may be significantly impaired. In the event that these parties suffer a temporary or protracted loss at their facility of our equipment, we would still be required to obtain FDA approval to qualify a new manufacturer or supplier, as applicable, as an alternate manufacturer or source for the respective component before any components manufactured by such manufacturer or by such supplier could be sold or used. To do so, we would need to verify, such as through a manufacturing comparability study, that any new manufacturing process will produce our product candidates according to the specifications previously submitted to the FDA or another regulatory authority. The delays associated with the verification of a new CMO could negatively affect our ability to develop product candidates or commercialize any of our approved products in a timely manner or within budget. Furthermore, a CMO may possess technology related to the manufacture of our product candidate that such CMO owns independently. This would increase our reliance on such CMO or require us to obtain a license from such CMO in order to have another CMO manufacture the product candidates. In addition, changes in manufacturers often involve changes in manufacturing procedures and processes, which could require that we conduct bridging studies before implementing the change for our clinical supply for use in clinical trials or for commercial supply of any approved product. We may be unsuccessful in demonstrating the comparability of supplies before and after a manufacturing change, which could require the conduct of additional clinical trials and result in a delay or disruption in our clinical development plan or our ability to commercialize any approved product.

 

Any production shortfall that impairs the supply of our POD device or the active ingredients or any of these components could negatively impact our ability to complete clinical trials, obtain regulatory approval and commercialize our product candidates. If our product candidates receive approval, a product shortfall could have a material adverse effect on our business, financial condition and results of operations and adversely affect our ability to satisfy demand for our product candidates, which could materially and adversely affect our product sales and operating results.

 

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If third-party manufacturers, wholesalers and distributors fail to perform as expected, or fail to devote sufficient time and resources to our product candidates, our clinical development may be delayed, our costs may be higher than expected or our product candidates may fail to be approved.

 

Our reliance on third-party manufacturers, wholesalers and distributors exposes us to the following risks, any of which could delay FDA approval of our product candidates and commercialization of our product candidates, result in higher costs, or deprive us of potential product revenues:

our CMOs, or other third parties we rely on, may encounter difficulties in achieving the volume of production needed to satisfy commercial demand, may experience technical issues that impact quality or compliance with applicable and strictly enforced regulations governing the manufacture of pharmaceutical products, and may experience shortages of qualified personnel to adequately staff production operations;
our wholesalers and distributors could become unable to sell and deliver our product candidates for regulatory, compliance and other reasons;
our CMOs, wholesalers and distributors could breach or default on their agreements with us to meet our requirements for commercialization of our product candidates;
our CMOs, wholesalers and distributors may not perform as agreed or may not remain in business for the time required to successfully produce, store, sell and distribute our product candidates and we may incur additional cost;
our CMOs, wholesalers and distributors may misappropriate our proprietary information; and
if our CMOs, wholesalers and distributors were to terminate our arrangements or fail to meet their contractual obligations, we may be forced to delay our commercial programs.

 

For example, we identified increased levels of impurities in some drug vials of certain drug lots used in our Trudhesa STOP 301 trial. Vials from those drug lots were removed from the trial and we conducted a root cause investigation, identifying the likely root cause as long stoppages in the production of two lots. If we encounter similar issues in connection with our commercial manufacturing of Trudhesa, we may face delays and shortages in production of Trudhesa, impacting our ability to fill prescriptions, and may face further scrutiny from the SEC.

 

Our reliance on third parties reduces our control over our product candidate development activities but does not relieve us of our responsibility to ensure compliance with all required legal, regulatory and scientific standards. For example, the FDA and other regulatory authorities require that our product candidates and any products that we may eventually commercialize be manufactured according to cGMP and QSR, and similar foreign standards. Any failure by our third-party manufacturers to comply with cGMP or QSR or maintain a compliance status acceptable to the FDA or other regulatory authorities or failure to scale up manufacturing processes, including any failure to deliver sufficient quantities of product candidates in a timely manner, could lead to a delay in, or failure to obtain, regulatory approval of any of our product candidates. In addition, our third-party manufacturers will be subject to periodic inspections by the FDA and other regulatory authorities, and failure to comply with cGMP or QSR could be the basis for the FDA to issue a warning or untitled letter, withdraw approvals for product candidates previously granted to us, or take other regulatory or legal action, including request a recall or seize product candidates, total or partial suspension of production, suspension of clinical trials, refusal to approve pending applications or supplemental applications, detention of product, refusal to permit the import or export of product candidates, injunction, imposing civil penalties or pursuing criminal prosecution.

 

Additionally, as we scale up manufacturing of our product candidates and conduct required stability testing, issues may arise involving product-packaging and third-party equipment malfunctions. These issues may require refinement or resolution in order to proceed with commercial marketing of our product candidates. In addition, quality issues may arise during scale-up and validation of commercial manufacturing processes. Any issues in our product or delivery devices could result in increased scrutiny by regulatory authorities, delays in our regulatory approval process, increases in our operating expenses, or failure to obtain or maintain approval for our product candidates.

 

We may not be successful in establishing and maintaining strategic partnerships, which could adversely affect our ability to develop and commercialize product candidates, negatively impacting our operating results.

 

We continue to strategically evaluate and, as deemed appropriate, we may enter into partnerships in the future when strategically attractive, including potentially with major biotechnology or pharmaceutical companies, although there is no guarantee we will be able to enter into these agreements if we elect to do so. We face significant competition in seeking appropriate partners for our product candidates, and the negotiation process is time-consuming and complex. In order for us to successfully identify and work with partners, potential partners must view our product candidates as economically

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valuable in markets they determine to be attractive in light of the terms that we are seeking and other available product candidates for licensing by other companies. Even if we are successful in our efforts to establish strategic partnerships, the terms that we agree upon may not be favorable to us, and we may not be able to maintain such strategic partnerships if, for example, development or approval of a product candidate is delayed or sales of an approved product are disappointing. Any delay in entering into strategic partnership agreements related to our product candidates could delay the development and commercialization of such candidates and reduce their competitiveness even if they reach the market. In addition, we have little control over such third parties, and any of them may fail to devote the necessary resources and attention to sell and market our product candidates effectively or create sufficient sales.

 

If we fail to establish and maintain strategic partnerships related to our product candidates, we will bear all of the risk and costs related to the development of any such candidate, and we may need to seek additional financing, hire additional employees and otherwise develop expertise, such as regulatory expertise, for which we have not budgeted. This could negatively affect the development of any unpartnered product candidate.

 

Risks Related to Regulatory Review and Approval of Our Product Candidates

 

The development and commercialization of pharmaceutical products is subject to extensive regulation, and we may not obtain regulatory approvals for INP105, INP107 or any other product candidates.

 

The clinical development, manufacturing, labeling, packaging, storage, recordkeeping, advertising, promotion, export, import, marketing, distribution, adverse event reporting, including the submission of safety and other post-marketing information and reports, and other possible activities relating to INP105 and INP 107, our furthest advanced product candidates under clinical development, as well as any other product candidate that we may develop in the future, are subject to extensive regulation. Marketing approval of drugs in the United States requires the submission of an NDA to the FDA, and we are not permitted to market any product candidate in the United States until we obtain approval from the FDA of the NDA for that product. An NDA must be supported by extensive clinical and preclinical data, as well as extensive information regarding pharmacology, CMC, and current good manufacturing practices, or cGMP, at the manufacturing facilities. Further, our product candidates must be approved by comparable regulatory authorities in other jurisdictions where we intend to market our product candidates prior to commercialization.

 

FDA approval of an NDA is not guaranteed, and review and approval is an expensive and uncertain process that may take several years. Of the large number of drugs in development in the United States, only a small percentage will successfully complete the FDA regulatory approval process and will be commercialized. Accordingly, there can be no assurance that any of our other product candidates will receive regulatory approval in the United States, or other jurisdictions. The FDA also has substantial discretion in the approval process. The number and types of preclinical studies and clinical trials that will be required for NDA approval varies depending on the product candidate, the disease or the condition that the product candidate is designed to treat and the regulations applicable to any particular product candidate. We intend to seek FDA approval for our product candidates through the Section 505(b)(2) regulatory pathway. If the FDA does not agree that the 505(b)(2) regulatory pathway is appropriate or scientifically justified for one or more of our product candidates, we may need to conduct additional clinical trials, provide additional data and information and meet additional standards for regulatory approval.

 

Clinical trial failure may result from a multitude of factors including flaws in trial design, dose selection, placebo effect, patient enrollment criteria and failure to demonstrate favorable safety or efficacy traits, and failure in clinical trials can occur at any stage. Companies in the pharmaceutical industry frequently suffer setbacks in the advancement of clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. Based upon negative or inconclusive results, we may decide, or regulators may require us, to conduct additional clinical trials or preclinical studies. In addition, data obtained from clinical trials are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may further delay, limit or prevent marketing approval.

 

The FDA could delay, limit or deny approval of a product candidate for many reasons, including because the FDA:

may not deem our product candidate to be safe and effective;
determines that the product candidate does not have an acceptable benefit-risk profile;
determines in the case of an NDA seeking accelerated approval that the NDA does not provide evidence that the product candidate represents a meaningful advantage over available therapies;
determines that the objective response rate, or ORR, and duration of response are not clinically meaningful;

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may not agree that the data collected from preclinical studies and clinical trials are acceptable or sufficient to support the submission of an NDA or other submission or to obtain regulatory approval, and may impose requirements for additional preclinical studies or clinical trials;
may determine that adverse events experienced by participants in our clinical trials represent an unacceptable level of risk;
may determine that population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval;
may disagree regarding the formulation, labeling and/or the specifications;
may not approve the manufacturing processes associated with our product candidate or may determine that a manufacturing facility does not have an acceptable compliance status;
may conclude there are CMC issues that preclude approval of the NDA;
may conclude that the drug substance or drug product manufacturing process is not in a state of control or does not meet cGMPs or all the regulatory requirements;
may not be able to timely conduct the necessary pre-approval inspection or devote sufficient resources to NDA review on a timely basis due to the COVID-19 pandemic;
may change approval policies or adopt new regulations; or
may not accept a file for submission due to, among other reasons, the content or formatting of the submission.

 

We have only obtained FDA approval for Trudhesa to date. This relative lack of experience may impede our ability to obtain FDA approval in a timely manner, if at all, for our subsequent clinical product candidates. If we experience delays in obtaining approval or if we fail to obtain approval of INP105, our commercial prospects will be harmed and our ability to generate revenues will be materially impaired which would adversely affect our business, prospects, financial condition and results of operations.

 

Clinical failure may occur at any stage of clinical development, and we may never succeed in developing marketable product candidates or generating product revenue.

 

Before obtaining marketing approval from regulatory authorities for the sale of any product candidate, we must complete preclinical development and then conduct clinical trials to demonstrate the safety and efficacy of our product candidates in humans. Clinical testing is expensive, difficult to design and implement, can take many years to complete and is uncertain as to outcome. A failure of one or more clinical trials can occur at any stage of testing.

 

Although the active ingredients in our other product candidate, INP105, are approved and commonly used as treatment for agitation associated with ASD, they have not previously been approved or demonstrated to be safe for repeat intermittent use over an extended period of time using an upper nasal space drug delivery. Any future NDA submissions may propose to bridge Listed Drugs, or LDs, for which we have conducted a comparative bioavailability study. The approval of Trudhesa or our prior clinical results for our product candidates are not necessarily indicative of our ability to bridge to LD for future product candidates, as there can be significant variability in results between different clinical trials due to numerous factors, including the pharmacokinetics or pharmacodynamics of different drugs, changes in trial procedures, differences in the size and type of patient populations, including across geographies, changes in and adherence to the clinical trial protocols, and the rate of dropout among clinical trial participants. If we are not able to establish a bridge between a product candidate and each LD upon which they rely to demonstrate that such reliance is justified, we may be required to show safety and efficacy through one or more clinical trials. In addition, the long-term safety studies we are conducting or plan to conduct may reveal safety concerns, including with regard to nasal mucosa or olfactory function. If either or both of these outcomes occur, we may be prevented or delayed in obtaining marketing approval.

 

We may be required to perform additional or unanticipated clinical trials to obtain approval or be subject to additional post-marketing testing requirements to maintain regulatory approval. In addition, regulatory authorities may withdraw their approval of a product or impose restrictions on our distribution, such as in the form of a Risk Evaluation and Mitigation Strategy, or REMS. The failure to obtain timely regulatory approval of product candidates, any product marketing limitations or a product withdrawal would materially and adversely affect our business, results of operations and financial condition.

 

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Delays in the commencement, enrollment or completion of clinical trials of our product candidates could result in increased costs to us as well as a delay or failure in obtaining regulatory approval, or prevent us from commercializing our future product candidates on a timely basis, or at all.

 

We anticipate the initiation of a Phase 2 trial of a double-blind placebo-controlled single dose of INP105 study in adolescents with ASD in the first half of 2022. Any of our future clinical trials may not be conducted as planned or completed on schedule, if at all. A failure of one or more clinical trials can occur at any stage. Events that may prevent successful or timely commencement, enrollment or completion of clinical development include:

delays by us in reaching a consensus with regulatory agencies on trial design;
delays in reaching agreement on acceptable terms with prospective clinical research organizations, or CROs, and clinical trial sites;
delays in obtaining required Institutional Review Board, or IRB, approval at each clinical trial site;
delays in recruiting suitable patients to participate in clinical trials;
the effects of COVID-19 on our ability to recruit and retain patients, including as a result of potential heightened exposure to COVID-19, prioritization of hospital resources toward the outbreak and unwillingness by patients to enroll or comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services;
imposition of a clinical hold by regulatory agencies for any reason, including safety concerns or after an inspection of clinical operations or trial sites;
failure by CROs, other third parties or us to adhere to clinical trial requirements;
failure to perform clinical trials in accordance with the FDA’s good clinical practices, or GCP, or applicable regulatory guidelines in other countries;
delays in the testing, validation, manufacturing and delivery of the product candidates to the clinical sites;
delays caused by patients not completing participation in a trial or not returning for post-treatment follow-up, which we have experienced and believe may be caused by patients experiencing reduced symptoms or incidences of disease;
clinical trial sites or patients dropping out of a trial;
delays or interruptions to supply or failure to ensure compliance with cGMP or quality standards of our product candidates or the other product candidates in a combination product trial or other materials necessary to conduct clinical trials of our product candidates;
occurrence of adverse events in clinical trials that are associated with the product candidates that are viewed to outweigh their potential benefits; or
changes in regulatory requirements and guidance that require amending or submitting new clinical protocols.

 

Delays, including delays caused by any of the above factors, can be costly and could negatively affect our ability to complete a clinical trial. If we are not able to successfully complete clinical trials, we will not be able to obtain regulatory approval and will not be able to commercialize our product candidates.

 

If we are not able to use the 505(b)(2) regulatory approval pathway for regulatory approval of any of our other product candidates or if the FDA requires additional clinical or nonclinical data to support an NDA under Section 505(b)(2) than we have previously anticipated, it will likely take significantly longer, cost significantly more and be significantly more complicated to gain FDA approval for our product candidates, and in any case may not be successful.

 

We intend to seek FDA approval for product candidates through the Section 505(b)(2) regulatory pathway. The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Amendments, added Section 505(b)(2) to the Federal Food, Drug, and Cosmetic Act, or the FDCA. In general, Section 505(b)(2) allows a 505(b)(2) applicant to rely on the FDA’s finding of safety or effectiveness for an LD only to the extent that the proposed product in the 505(b)(2) application shares common characteristics with the LD. The 505(b)(2) application must include sufficient data to support differences between the LD and the proposed drug in the 505(b)(2) application. If the FDA does not agree that the 505(b)(2) regulatory pathway is appropriate or scientifically justified for one or more of our product candidates, we may need to conduct additional clinical trials, provide additional data and information and meet additional

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standards for regulatory approval. For example, the FDA may not agree that we have provided a scientific bridge, through, for example, comparative bioavailability data, to demonstrate that reliance on the prior findings of safety or efficacy for an LD is justified. If we are unable to pursue a Section 505(b)(2) pathway, the time and financial resources required to obtain FDA approval for our product candidates would likely increase substantially. Moreover, the inability to pursue the Section 505(b)(2) regulatory pathway could result in new competitive products reaching the market before our product candidates, which could materially adversely impact our competitive position and prospects.

 

Even though Trudhesa was approved through the Section 505(b)(2) regulatory pathway, we cannot assure you that nonclinical studies or clinical trials that we have conducted or that we currently anticipate conducting will be sufficient for approval or that we will receive the requisite or timely approvals for commercialization of any other product candidate. Although the Section 505(b)(2) pathway allows us to rely in part on the FDA’s prior findings of safety or efficacy for approved LDs or on published literature, the FDA may determine that prior findings by the FDA or the published literature that we believe supports the safety or efficacy of one or more of our product candidates is insufficient or not applicable to our application or that additional studies will need to be conducted. To the extent that we are relying on the Section 505(b)(2) regulatory pathway based on the approval of an LD for a similar indication, the FDA may require that we include in the labeling of such our other product candidates, if approved, some or all of the safety information that is included in the labeling of the approved LD. Our approved labeling for Trudhesa includes the safety information included in the labeling of the approved LD used for our Trudhesa NDA, as well as the efficacy information for the LD, including a Black Box Warning. Moreover, even if our product candidates are approved through the Section 505(b)(2) regulatory pathway, the approval may be subject to limitations on the indicated uses for which the products may be marketed or to other conditions of approval, or may contain requirements for costly post-marketing testing and surveillance to monitor the safety or efficacy of the products.

 

The ongoing COVID-19 pandemic, or similar public health crises, could have a material adverse impact on our business, financial condition and results of operations, including through disruption to our planned clinical trials, supply chains, business operations and commercialization efforts, or through delay in the FDA’s approval of our product candidates.

 

The ongoing COVID-19 global pandemic and government measures taken in response have also had a significant impact, both direct and indirect, on businesses and commerce, as worker shortages have occurred, supply chains have been disrupted, facilities and production have been suspended, and demand for certain goods and services, such as medical services and supplies, has spiked, while demand for other goods and services, such as travel, has fallen. The extent to which COVID-19 impacts our business and operating results will depend on future developments that are highly uncertain and cannot be accurately predicted, including new information that may emerge concerning COVID-19, potential waves or cycles of the pandemic or new virus variants, and the actions to contain the virus or treat its impact. For example, ineffective or uncoordinated vaccine deployment in the future or other responses to COVID-19, the emergence of more virulent or infectious variants of the virus, or limitations on vaccine availability could risk increasing the duration and severity of the pandemic, which could have various negative impacts on our business, the extent of which we cannot fully predict.

 

Site initiation, participant recruitment and enrollment, participant dosing, distribution of clinical trial materials, study monitoring and data analysis for our planned clinical trials may be delayed due to changes in hospital or university policies, federal, state or local regulations, prioritization of hospital resources toward pandemic efforts, or other reasons related to the pandemic. Additionally, some participants and clinical investigators may not be able to comply with clinical trial protocols. For example, quarantines or other travel limitations (whether voluntary or required) may impede participant movement, affect sponsor access to study sites, or interrupt healthcare services, and we may be unable to conduct our planned clinical trials. If the global effort to control the spread of COVID-19 and treat COVID-19 patients is impeded for an extended period of time, we risk a delay in activating sites and enrolling subjects as previously projected. Any such delays to our planned clinical trials for our current product candidates could impact the use and sufficiency o