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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
Commission file number 001-36177
GlycoMimetics, Inc.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of
incorporation or organization)
9708 Medical Center Drive
Rockville, Maryland
(Address of principal executive offices)
06-1686563
(IRS Employer
Identification No.)
20850
(Zip Code)
Registrant’s telephone number, including area code: (240) 243-1201
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class:
Common Stock, $0.001 par value
Trading Symbol:
GLYC
Name of Each Exchange on which Registered
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 Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit
such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company
or emerging growth company. See 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
Non-accelerated Filer
☐
☒
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 ☒
As of June 30, 2021, the last business day of the registrant’s last completed second quarter, the aggregate market value of the Common Stock held
by non-affiliates of the registrant was approximately $117.5 million based on the closing price of the registrant’s Common Stock, as reported by the
Nasdaq Global Market, on such date.
At February 28, 2022, 52,313,894 shares of GlycoMimetics, Inc.’s Common Stock, $0.001 par value per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of GlycoMimetics, Inc.’s definitive proxy statement, to be filed pursuant to Regulation 14A under the Securities Exchange Act of 1934,
for its 2022 Annual Meeting of Stockholders are incorporated by reference in Part III of this Form 10-K.
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Annual Report on Form 10-K, or this Annual Report, contains 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, or the Exchange Act, that involve substantial risks and uncertainties. The forward-looking statements are
contained principally in Part I, Item 1. “Business,” Part I, Item 1A. “Risk Factors,” and Part II, Item 7. “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” but are also contained elsewhere in this
Annual Report. In some cases, you can identify forward-looking statements by the words “may,” “might,” “will,” “could,”
“would,” “should,” “expect,” “intend,” “plan,” “objective,” “anticipate,” “believe,” “estimate,” “predict,” “project,”
“potential,” “continue” and “ongoing,” or the negative of these terms, or other comparable terminology intended to identify
statements about the future. These statements involve known and unknown risks, uncertainties and other factors that may
cause our actual results, levels of activity, performance or achievements to be materially different from the information
expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each
forward-looking statement contained in this Annual Report, we caution you that these statements are based on a
combination of facts and factors currently known by us and our expectations of the future, about which we cannot be
certain. Forward-looking statements include statements about:
● our plans to develop and commercialize our glycomimetic drug candidates;
● our and our collaborators’ ongoing and planned clinical trials for our drug candidates uproleselan and GMI-
1359, including the timing of initiation of and enrollment in the trials, the timing of availability of data from
the trials and the anticipated results of the trials;
● the timing of and our ability to obtain and maintain regulatory approvals for our drug candidates;
● the clinical utility of our drug candidates;
● our commercialization, marketing and manufacturing capabilities and strategy;
● our intellectual property position;
● our ability to identify additional drug candidates with significant commercial potential that are consistent with
our commercial objectives;
● our estimates regarding future revenues, expenses and needs for additional financing; and
● our beliefs that our capital resources will be sufficient to meet our anticipated cash requirements into the
second quarter of 2023.
You should refer to Item 1A. “Risk Factors” section of this Annual Report for a discussion of important factors that
may cause our actual results to differ materially from those expressed or implied by our forward-looking statements. As a
result of these factors, we cannot assure you that the forward-looking statements in this Annual Report will prove to be
accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of
the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation
or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all.
We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. You should, therefore, not rely on these forward-looking statements
as representing our views as of any date subsequent to the date of this Annual Report.
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RISK FACTOR SUMMARY
Our business is subject to numerous risks. You should carefully consider the following risks, as well as general
economic and business risks, and all of the other information contained in this Annual Report, together with any other
documents we file with the SEC. Any of the following risks could have a material adverse effect on our business, operating
results and financial condition and cause the trading price of our common stock to decline.
Among these important risks are the following:
● We have incurred significant losses since our inception. We expect to continue to incur losses over the next
several years and may never achieve or maintain profitability.
● We will need substantial additional funding to pursue our business objectives. If we are unable to raise capital
when needed, we may not be able to continue as a going concern and could be forced to delay, reduce or
eliminate our drug development programs or potential commercialization efforts.
● Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to
relinquish rights to our drug candidates.
● We have only one drug candidate in a late-stage clinical trial. If we or our collaborators are unable to
commercialize our drug candidates or experience significant delays in doing so, our business will be materially
harmed.
● Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. We may incur
additional costs or experience delays in completing, or ultimately be unable to complete, the development and
commercialization of our drug candidates.
● Our business could be adversely affected by the effects of health epidemics or pandemics, including the ongoing
COVID-19 pandemic, in regions where we or third parties on whom we rely have significant manufacturing
facilities, clinical trial sites or other business operations.
● If serious adverse or unacceptable side effects are identified during the development of our drug candidates, we
may need to abandon or limit the development of some of our drug candidates.
● We may expend our limited resources to pursue a particular drug candidate or indication and fail to capitalize on
drug candidates or indications that may be more profitable or for which there is a greater likelihood of success.
● Our success depends in part on current and future collaborations. If we are unable to maintain any of these
collaborations, or if these collaborations are not successful, our business could be adversely affected.
● We expect to rely on third parties to conduct our future clinical trials for drug candidates, and those third parties
may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.
● We contract with third parties for the manufacturing of our drug candidates for preclinical and clinical testing
and expect to continue to do so for commercialization. This reliance on third parties increases the risk that we
will not have sufficient quantities of our drug candidates or drugs, or such quantities at an acceptable cost, which
could delay, prevent or impair our development or commercialization efforts.
● We, or our third-party manufacturers, may be unable to successfully scale-up manufacturing of our drug
candidates in sufficient quality and quantity, which would delay or prevent us from conducting our ongoing and
planned clinical trials and developing our drug candidates.
● Even if any of our drug candidates receives marketing approval, it may fail to achieve the degree of market
acceptance by physicians, patients, third-party payors and others in the medical community necessary for
commercial success.
● We face substantial competition, which may result in others discovering, developing or commercializing drugs
before or more successfully than we do.
● If we are unable to obtain and maintain patent protection for our drug candidates, or if the scope of the patent
protection obtained is not sufficiently broad, our competitors could develop and commercialize drug candidates
similar or identical to ours, and our ability to successfully commercialize our drug candidates may be impaired.
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● If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would
be harmed.
● If we or our collaborators are not able to obtain, or if there are delays in obtaining, required regulatory
approvals, we or they will not be able to commercialize our drug candidates and our ability to generate revenue
will be materially impaired.
● Even though we have obtained Orphan Drug designation for several of our drug candidates, we may not be able
to obtain orphan drug marketing exclusivity for these or any of our other drug candidates.
● The FDA fast track designation and additional Breakthrough Therapy designation for uproleselan may not
actually lead to a faster development or regulatory review or approval process.
● Failure to obtain marketing approval in international jurisdictions would prevent our drug candidates from being
marketed abroad.
● A variety of risks associated with developing and marketing our drug candidates internationally could hurt our
business.
● Any drug candidate for which we obtain marketing approval could be subject to post-marketing restrictions or
recall or withdrawal from the market, and we may therefore be subject to penalties if we fail to comply with
regulatory requirements or if we experience unanticipated problems with our drug candidates, when and if any
of them are approved.
● Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval
of and commercialize our drug candidates and affect the prices we may obtain.
● Governments outside the United States tend to impose strict price controls, which may adversely affect our
revenue, if any.
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PART I
TABLE OF CONTENTS
Page
BUSINESS
ITEM 1.
ITEM 1A. RISK FACTORS
ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 2.
ITEM 3.
ITEM 4. MINE SAFETY DISCLOSURES
PROPERTIES
LEGAL PROCEEDINGS
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
ITEM 6.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
[RESERVED]
RESULTS OF OPERATIONS
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8.
ITEM 9.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9B. OTHER INFORMATION
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 16. FORM 10-K SUMMARY
SIGNATURES
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PART I
ITEM 1.
BUSINESS
Company Overview
We are a clinical-stage biotechnology company focused on the discovery and development of novel glycomimetic
drugs to address unmet medical needs resulting from diseases in which carbohydrate biology plays a key role. We are
developing a pipeline of proprietary glycomimetics, which are small molecules that mimic the structure of carbohydrates
involved in important biological processes, to inhibit disease-related functions of carbohydrates such as the roles they play
in inflammation, cancer and infection. We believe this represents an innovative approach to drug discovery to treat a wide
range of diseases. We are focusing our efforts on drug candidates for diseases that we believe will qualify for Orphan Drug
designation.
Our proprietary glycomimetics platform is based on our expertise in carbohydrate chemistry and our understanding
of the role carbohydrates play in key biological processes. Most human proteins are modified by the addition of complex
carbohydrate structures to the surface of such proteins, which affects the functions of the proteins and their interactions
with other molecules. Our research and development efforts have focused on drug candidates targeting selectins, which are
proteins that serve as adhesion molecules and bind to carbohydrates that are involved in the inflammatory component and
progression of a wide range of diseases, including hematologic disorders, cancer and cardiovascular disease. For example,
we believe that members of the selectin family play a key role in tumor metastasis and resistance to chemotherapy.
Inhibiting specific carbohydrates from binding to selectins has long been viewed as a potentially attractive approach for
therapeutic intervention. The ability to successfully develop drug-like carbohydrate compounds that inhibit binding with
selectins, known as selectin antagonists, has historically been limited by their potency and the complexities of carbohydrate
chemistry. We believe our expertise in the rational design of potent glycomimetic antagonists with drug-like properties and
in carbohydrate chemistry enables us to identify highly effective selectin antagonists and other glycomimetics that may
inhibit the disease-related functions of certain carbohydrates in order to develop novel drug candidates to address orphan
diseases with high unmet medical need.
Overview of Our Drug Candidates
Our current drug candidates are summarized below. We have retained the worldwide development and
commercialization rights to each of our drug candidates, except with respect to uproleselan and GMI-1687, for which we
have exclusively licensed development and commercialization rights to Apollomics (Hong Kong) Limited, or Apollomics,
in Mainland China, Hong Kong, Macau and Taiwan, collectively referred to as Greater China.
Uproleselan
We are developing uproleselan, a specific E-selectin inhibitor, to be used in combination with chemotherapy to treat
patients with acute myeloid leukemia, or AML, a life-threatening hematologic cancer, and potentially other hematologic
cancers. Uproleselan has been granted Breakthrough Therapy designation by the U.S. Food and Drug Administration, or
FDA, for the treatment of adults with relapsed or refractory AML. In addition, uproleselan has received Orphan Drug
designation from the FDA and the European Commission for the treatment of AML.
E-selectin plays a critical role in binding cancer cells within vascular niches in the bone marrow, which prevents the
cells from entering circulation where they can be more readily killed by chemotherapy. In animal studies, uproleselan
mobilized AML cancer cells out of the bone marrow, making them more sensitive to chemotherapy. In these studies, tumor
burden was significantly reduced in the animals treated with a combination of chemotherapy and uproleselan as compared
to animals treated with chemotherapy alone. In addition, the combination of uproleselan with chemotherapy resulted in
improved survival rates for the treated animals compared to chemotherapy alone. In other animal studies, uproleselan
appeared to also protect normal cells from some of the side effects of chemotherapy. Common side effects of chemotherapy
include bone marrow toxicity resulting in neutropenia, which is an abnormally low number of neutrophils, the white blood
cells that serve as the primary defense against infection, and mucositis, which is the inflammation and sloughing of the
mucous membranes lining the digestive tract. Animals treated with uproleselan and chemotherapy had less severe
neutropenia and mucositis and lower bone marrow toxicity as compared to animals treated with chemotherapy alone. We
believe that treatment with uproleselan results in lower bone marrow toxicity due to its inhibition of E-selectin, which
inhibition makes stem cells in the bone marrow divide less frequently, thereby protecting them from chemotherapy agents
that target rapidly dividing cells.
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We completed an initial Phase 1 trial in healthy volunteers for uproleselan and in 2017 we completed enrollment in a
Phase 1/2 clinical trial in patients with either relapsed/refractory or de novo/secondary AML. Final efficacy and safety data
from this Phase 1/2 trial were published in the journal BLOOD in September 2021, with scientists highlighting an enhanced
depth of response following addition of uproleselan to salvage therapy, as indicated by the high remission rates observed in
the trial compared to historical experience with salvage chemotherapy alone and 69% rate of minimal residual disease, or
MRD, negativity in evaluable trial participants with relapsed/refractory AML.
In 2018, we dosed the first patient in a Phase 3 clinical trial to evaluate uproleselan in adults with relapsed/refractory
AML. In November 2021, we completed enrollment in this Phase 3 clinical trial and expect to report top-line data from this
pivotal trial after year-end 2022.
In May 2018, we signed a Cooperative Research and Development Agreement, or CRADA, with the NCI, part of the
National Institutes of Health. Under the terms of the CRADA, we are collaborating with both the NCI and the Alliance for
Clinical Trials in Oncology to conduct a randomized, controlled clinical trial evaluating the addition of uproleselan to a
standard cytarabine/daunorubicin chemotherapy regimen (7&3) in older adults with previously untreated AML who are
eligible for intensive chemotherapy. The first patient in this Phase 2/3 NCI-sponsored trial was dosed in April 2019.
Completion of enrollment of the Phase 2 portion, which occurred in December 2021, sets the stage for a planned interim
analysis that will evaluate event-free survival and whether the pre-specified threshold for continuing to Phase 3 has been
met. The trial may also provide support for regulatory filings if the results of the planned interim analysis are positive.
GMI-1359
We are also developing a drug candidate, GMI-1359, that simultaneously targets both E-selectin and a chemokine
receptor known as CXCR4. Since E-selectin and CXCR4 are implicated in the retention of cancer cells in the bone and
bone marrow, we believe that targeting both E-selectin and CXCR4 with a single compound could improve efficacy in the
treatment of cancers that affect the bone and bone marrow, including solid tumors that have a propensity to metastasize to
bone. Following a Phase 1 randomized, double-blind, placebo-controlled, single-dose escalation trial of GMI-1359 in
healthy volunteers, we conducted a Phase 1b trial of GMI-1359 at Duke University Cancer Center in hormone receptor
positive, or HR+, breast cancer patients whose tumors had spread to bone. The goal of this dose escalation trial was to
evaluate safety, pharmacokinetics (PK) and pharmacodynamics (PD). Interim data from this Phase 1b study were presented
at the American Association of Cancer Research (AACR) 2021 Annual Meeting, with clear evidence of dual antagonism
on both E-selectin and CXCR4, key PD markers of biologic activity, being observed for participants treated with GMI-
1359. Based on activity levels observed in the trial, we are evaluating potential indications for future development where
these overlapping functions play key roles, as well as the funding requirement for any potential development opportunities.
Most recently, at the 63rd American Society of Hematology (ASH) Annual Meeting and Exposition in 2021, we
presented preclinical data showing that FLT3 inhibitors, such as quizartinib and sorafenib, upregulate the expression of E-
selectin ligands and CXCR4, thereby increasing adhesion to protective niches in the bone marrow microenvironment and
inducing chemoresistance. Using cells from a relapsed AML patient treated with a FLT3 inhibitor in a murine model, the
addition of GMI-1359 to quizartinib broke chemoresistance, which led to a significant reduction in leukemic burden and a
statistically significant doubling of median survival time from 79 to 158 days (p<0.0001).
In January 2020, the FDA granted GMI-1359 Orphan Drug designation and Rare Pediatric Disease designation for
the treatment of osteosarcoma, a rare cancer affecting approximately 900 adolescents each year in the United States.
GMI-1687
We have rationally designed an innovative antagonist of E-selectin, GMI-1687, that could be suitable for
subcutaneous administration. Initially developed as a potential life-cycle extension to uproleselan, when given by
subcutaneous injection in animal models, GMI-1687 has been observed to have equivalent activity to uproleselan, but at an
approximately 1,000-fold lower dose. We believe that GMI-1687 could be developed to broaden the clinical usefulness of
an E-selectin antagonist to conditions where outpatient treatment is preferred or required.
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In September 2020 at the virtual meeting of the Foundation for Sickle Cell Disease Research, or FSCDR, we gave an
oral presentation on an abstract containing data on GMI-1687, which included data from a preclinical model showing the
drug candidate’s potential as a subcutaneously administered treatment for vaso-occlusive crisis, or VOC, a common
complication of sickle cell disease, or SCD. We are currently conducting activities and studies with GMI-1687 to support
our planned submission in the first half of 2022 of an investigational new drug application, or IND, to the FDA.
Galectin Antagonists
Galectin-3 is a carbohydrate-binding protein whose expression has been shown to play a central role in fibrosis and
cancer. Galectin-3 has been linked to a number of biologic processes including inflammation, aberrant cell activation and
proliferation (macrophages, neutrophils, and mast cells), fibrogenesis and ultimately, organ dysfunction. Experimental data
have implicated galectin-3 in a variety of diseases across a number of organ systems, including liver, kidney, lung, eye and
heart. Current research also indicates that galectin-3 has important roles in modulating the immune and inflammatory
response to cancer that contributes to neoplastic transformation, tumor cell survival, angiogenesis and metastasis.
Applying our understanding of carbohydrate biology and chemistry, we have rationally designed several high-
potency, selective, small-molecule glycomimetic antagonists of galectin-3, including a potential candidate that has
demonstrated oral bioavailability. In our preclinical studies, our galectin-3 antagonists have augmented antitumor activity
of checkpoint inhibitors and prevented fibrosis following organ damage, which we believe makes them promising
therapeutic targets for further evaluation and development.
Our Strategy
Our goal is to be the leader in the discovery, development and commercialization of novel glycomimetic drugs to
address unmet medical needs resulting from diseases in which carbohydrate biology plays a key role. Leveraging the
potentially broad applicability of our proprietary glycomimetics platform, our initial focus is to internally develop and
advance orphan drug candidates targeted at hematologic cancers and other diseases, and to out-license any drug candidates
we may develop that are targeted at larger market opportunities. The key elements of our strategy are to:
● Complete clinical development of and obtain regulatory approval for uproleselan for the treatment of adults
with relapsed/refractory AML. Building on positive Phase 1/2 clinical trial results, we recently completed
enrollment in a randomized, double-blind, placebo-controlled Phase 3 clinical trial to evaluate uproleselan in
adults with relapsed/refractory AML. Trial design was aligned with guidance received from the FDA. In this
single pivotal trial, we enrolled 388 adult patients with relapsed or refractory AML at centers in the United
States, Canada, Europe and Australia. Based on discussions with our external statisticians, we expect to report
preliminary data from the trial after year-end 2022. If the results from this Phase 3 clinical trial are positive, we
plan to apply for regulatory approval from the FDA and potentially the European Medicines Agency, or EMA.
● Explore the potential use of uproleselan in other AML patient populations through third-party
collaborations. We are currently collaborating with the National Cancer Institute (NCI) on a Phase 2/3 clinical
trial of uproleselan in previously untreated older adults with AML who are fit for intensive chemotherapy.
Under the terms of our collaboration, the NCI may fund additional research, including clinical trials of pediatric
patients with AML as well as preclinical experiments and clinical trials evaluating alternative chemotherapy
regimens.
● Expand the potential use of our E-selectin inhibitors (uproleselan and GMI-1687) in other select territories
through out-licensing arrangements. In January 2020, we entered into an exclusive collaboration and license
agreement with Apollomics for the development and commercialization of uproleselan and GMI-1687 in
Greater China. Apollomics will be responsible at its cost for clinical development and commercialization of
uproleselan in Greater China, and will work with us to advance the preclinical and clinical development of GMI-
1687. We have also entered into separate agreements to provide clinical and commercial supplies of uproleselan
and GMI-1687 to Apollomics, and we retain all rights for both compounds in the rest of the world.
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● Advance the development of GMI-1687 for the treatment of acute VOC and hematologic malignancies. We
plan to develop our selectin inhibitors for the treatment of acute VOC in patients with SCD and as a life-cycle
extension to uproleselan in additional hematologic malignancies. We are currently conducting IND-enabling
activities with GMI-1687 to support our planned submission of an IND for the treatment of acute VOC to the
FDA in the first half of 2022.
● Seek to advance the clinical development of GMI-1359 for the treatment of cancers that affect the bone and
bone marrow. We have recently ended a Phase 1b trial of GMI-1359 in HR+ breast cancer patients whose
tumors have spread to bone to evaluate dose escalation as well as safety, PK and PD markers of biologic activity.
Based on activity levels observed in the trial, we are evaluating potential indications for future development
where these overlapping functions of CXCR4 and e-selectin play key roles, as well as the funding requirement
for any potential development opportunities.
● Apply our insights and our glycomimetics platform to other carbohydrate targets beyond selectins. We have
identified additional opportunities where carbohydrates play critical roles in disease processes and where we
believe we can apply our platform to create targeted glycomimetic drugs. We have designed inhibitors that
specifically block the binding of galectin-3 to carbohydrate structures. We have identified a highly potent
galectin-3 compound that could be administered orally and plan to conduct additional preclinical studies to
further characterize the effects of galectin-3 inhibitors on inflammation and fibrosis, as well as immune
processes.
Our Platform
Our proprietary glycomimetics platform is based on our expertise in carbohydrate chemistry and our understanding
of the role carbohydrates play in key biological processes. Carbohydrate structures on cell surfaces are responsible for
complex carbohydrate-protein binding interactions. Inhibiting these binding interactions affects the functions of these
proteins and their interactions with other molecules. We believe our expertise enables us to design specific glycomimetic
molecules that can mimic carbohydrate structures and thereby inhibit their disease-related functions.
Our initial focus is on selectin antagonists, which we believe have the potential to address unmet medical needs in a
number of orphan and large market opportunities. Selectins have been shown to play a key role in a wide range of diseases,
including hematologic disorders, inflammatory diseases, infection, cancer and cardiovascular disease.
Our initial drug design efforts are focused on a naturally occurring, three-dimensional complex carbohydrate core
structure known as the Lewis structure. This core structure is naturally modified in a variety of ways to form many different
functional carbohydrates. These variations determine the biological functions of the carbohydrates, including functions
related to conditions defined above. Accordingly, we believe that this structure provides the foundation for the design of
glycomimetic drug candidates that could be used to address a variety of diseases.
Once we identify a carbohydrate structure involved in a disease pathway, we design molecules that mimic that
carbohydrate structure and inhibit its disease-related functions by binding to the carbohydrate’s target receptor, thereby
blocking the binding by the native carbohydrate itself. For example, one of the naturally modified Lewis structures binds to
selectins, which play a key role in adhesion of AML blasts to the vasculature of the bone marrow. Uproleselan mimics that
carbohydrate structure and accordingly binds to selectins, which we believe thereby inhibits the adhesion of AML blasts
and renders them more susceptible to killing with cytotoxic chemotherapies. In addition, our glycomimetic molecules are
designed to have greater affinity to the carbohydrate’s target receptor than does the native carbohydrate. This means that
the glycomimetic molecules possess stronger intermolecular forces between themselves and the target receptors, and thus
“outcompete” the native carbohydrates in binding to the relevant target receptors, thereby inhibiting their disease-related
functions. Using our glycomimetics platform, we have designed and synthesized a proprietary library of these structures
targeting different biological processes.
Our glycomimetics platform includes intellectual property, know-how, expertise, proprietary biological information
and biochemical assays, all of which support the rational design of potent glycomimetic compounds. These include:
● Know-how to successfully mimic the Lewis structure, which is common to a number of functional
carbohydrates.
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● Use of empirical methods to determine critical interactions between variations of a particular functional
carbohydrate and its target molecule.
● Application of the empirically determined bioactive structure of the functional carbohydrate for docking into the
binding area of the crystal structure of the target molecule.
● Expertise in stabilizing the bioactive core of glycomimetic compounds and increasing the number of interaction
contact points to improve affinity.
● Experience and technology in synthetic organic chemistry required for the specialized synthesis of
carbohydrates and their modifications.
● Proprietary assays to determine the binding characteristics, inhibitory activity and biological activity of
glycomimetic compounds.
Our Pipeline
We have discovered our drug candidates internally through a rational drug design approach that couples our expertise
in carbohydrate chemistry with our knowledge of carbohydrate biology. We are actively developing glycomimetic drug
candidates based on this expertise. Our drug candidates and their target indications and development status are summarized
in the chart below.
Uproleselan —Targeting the Bone Marrow Microenvironment to Treat Hematologic Cancers
We are developing uproleselan, a specific E-selectin antagonist, to be used adjunctively with standard chemotherapy
to treat AML and other hematologic cancers. We believe that uproleselan may be used as first-line treatment for elderly
patients with AML or for patients with relapsed or refractory AML. Uproleselan targets interactions between cancer cells
and the bone marrow microenvironment. In preclinical studies, combining uproleselan with chemotherapy made cancer
cells more sensitive to chemotherapy. In other preclinical studies, uproleselan also reduced some of the toxic effects of
chemotherapy, including neutropenia and mucositis, on normal cells.
Uproleselan received Orphan Drug designation from the FDA in 2015 for the treatment of patients with AML. In
2016, uproleselan received Fast Track designation from the FDA for the treatment of adult patients with relapsed or
refractory AML and elderly patients aged 60 years or older with AML. In 2017, uproleselan received Breakthrough
Therapy designation from the FDA for the treatment of adult patients with relapsed or refractory AML. In 2017, the
European Commission, based on a favorable recommendation from the EMA Committee for Orphan Medicinal Products,
granted Orphan Designation for uproleselan for the treatment of patients with AML. In January 2021, the China National
Medical Products Administration Center for Drug Evaluation granted Breakthrough Therapy designation to uproleselan for
the treatment of relapsed/refractory AML.
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Acute Myeloid Leukemia
AML, a hematologic cancer that is characterized by the rapid growth of abnormal white blood cells that accumulate
in the bone marrow and interfere with the production of normal blood cells, is a relatively rare disease, but one that
accounts for the largest number of annual deaths from leukemia in the United States. According to the Surveillance,
Epidemiology, and End Results Program managed by the NCI, there were an estimated 20,240 new cases of AML
diagnosed in 2021 in the United States. AML caused an estimated 11,400 deaths in 2021 in the United States.
AML is more commonly present in elderly patients, with a median age at diagnosis of 68 years old according to the
NCI. In a review published in the Journal of Clinical Oncology, the median overall survival of patients 60 years old or
older was nine months. The overall five-year relative survival rate for all AML patients from 2011 to 2017 was 29.5%.
Relative survival is a statistical measure of net survival that is calculated by comparing observed survival with expected
survival from a comparable set of people who do not have AML, in order to measure the excess mortality that is associated
with the AML diagnosis.
A number of published studies indicate that only some AML patients who receive chemotherapy achieve a complete
response, which is defined as the disappearance of all signs of AML, and that most patients with a complete response will
eventually relapse. Patients who do not enter remission are referred to as refractory, meaning that they are resistant to the
chemotherapy treatment.
We believe there is a need for new treatment options for elderly patients with AML, as well as those AML patients
who relapse or develop refractory disease. Most AML patients with relapsed or refractory disease have limited established
treatment options and, accordingly, may be referred for participation in clinical studies of potential new therapies. For
patients who elect not to participate or are unable to participate, treatment options typically include chemotherapy
regimens, hypomethylating agents and supportive care. Further, many elderly patients with AML are too frail to undergo
chemotherapy as a result of other medical conditions, and may only be able to tolerate pain comfort or control measures.
Without treatment, however, AML is uniformly fatal.
Role of E-selectin in AML
E-selectin has been shown to play important roles in the progression of AML and its contribution to cell extrinsic
chemoresistance. This has been observed in several studies, which have shown that levels of E-selectin correlate with
tumor infiltration and relapse in AML. We therefore believe that our E-selectin antagonist, uproleselan, has the potential to
improve the current treatment of patients with AML.
Uproleselan Preclinical Development
Leukemia cells can bind to E-selectin in the bone marrow where they are relatively protected from the effects of
chemotherapy. This phenomenon is now known as environment-mediated drug resistance, or EMDR. We believe that E-
selectin inhibition disrupts the cell adhesion involved in EMDR and mobilizes blasts out of the bone marrow and into the
bloodstream, making them more susceptible to chemotherapy. We believe that this mechanism of action may allow
uproleselan to improve chemotherapy response rates, duration of remission and, ultimately, survival in patients with
hematologic cancers such as AML.
In one in vivo study in a mouse model of AML, combining uproleselan with chemotherapy, mobilized AML blast
cells and significantly reduced tumor burden as compared to treatment with chemotherapy alone. In an in vitro study, AML
cells once bound to E-selectin were more resistant to chemotherapy. In a related study, when treated with uproleselan, the
resistance of such cells to chemotherapy was reduced. Tumor cells of patients who have relapsed AML, when tested in the
laboratory, bound significantly higher levels of E-selectin than tumor cells of patients at initial diagnosis. Additional
preclinical studies in mouse models of AML, in which E-selectin was observed to be upregulated, suggest that AML cells
binding to E-selectin have increased chemo-resistance. This is due to the induction of tumor cell survival signaling
pathways as a consequence of E-selectin binding. This effect within the bone marrow microenvironment is unique to E-
selectin as compared to other vascular adhesion molecules and can be blocked by uproleselan. The results of these
preclinical studies were published in the journal Nature Communications in April 2020, and we believe the findings
provide important information about how treatment with uproleselan may improve sensitivity to chemotherapy.
As uproleselan disrupts the interactions between cancer cells and bone marrow microenvironment, its mechanism of
action is not limited to a single tumor type. In addition to our studies in AML, we have also tested the drug candidate
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in other cancer models. In in vivo studies involving animal models of multiple myeloma, chronic myelogenous leukemia
and acute lymphoblastic leukemia, uproleselan, as an adjunct to standard-of-care chemotherapy, decreased tumor burden
and improved survival over chemotherapy alone.
In addition to its anti-tumor effects, uproleselan, in animal models, has shown protection against some of the
toxicities of chemotherapy. In particular, animals treated with uproleselan in combination with chemotherapy had less
severe neutropenia and mucositis and lower bone marrow toxicity as compared to animals treated with chemotherapy
alone. We believe that treatment with uproleselan results in lower bone marrow toxicity due to its inhibition of E-selectin,
thereby making hematopoietic stem cells divide less frequently and protecting them from chemotherapy agents that target
rapidly dividing cells. Hematopoietic stem cells are blood cells that give rise to all other types of blood cells and are
heavily concentrated in the bone marrow. Based on these reductions in some of the toxicities of chemotherapy, we are
evaluating these effects as secondary efficacy endpoints in our clinical trials.
Expanding the Utility of E-selectin antagonists
At the 2018 annual ASH meeting, we reported on the preclinical development of a highly potent antagonist of E-
selectin, GMI-1687, which demonstrated significant activity in animal models previously reported for uproleselan but at an
approximately 1,000-fold lower dose. This level of activity was obtained following injections under the skin and could
alleviate the need for intravenous infusions. Based on these compound characteristics, we believe GMI-1687 could
potentially be used in outpatient settings where an E-selectin antagonist has therapeutic relevance. We are currently
conducting IND-enabling studies of GMI-1687 and plan to file an IND in the first half of 2022.
In 2020, we reported on expanded preclinical studies with GMI-1687 in which the subcutaneous administration of
GMI-1687 was effective in restoring blood flow in occluded blood vessels in two mouse models of SCD. We believe that
these data support our planned development of GMI-1687 for subcutaneous use and self-administration with the potential
for use in the early intervention of VOC.
Uproleselan Clinical Trials
In 2014, we completed a Phase 1 trial of uproleselan in healthy volunteers. The single-site Phase 1 trial was a
randomized, double-blind, placebo-controlled, single ascending intravenous dose trial. In the trial, we evaluated the safety,
tolerability and PK of uproleselan. Twenty-eight healthy adult subjects were enrolled in cohorts to receive study drug at
three dose levels. In the trial, we observed that the subjects tolerated uproleselan well, and that the PK for uproleselan was
consistent with what was predicted based on preclinical data.
In 2015, we commenced a multinational Phase 1/2, open-label trial of uproleselan as an adjunct to standard
chemotherapy in patients with AML. This trial in males and females with AML was conducted at a number of academic
institutions in the United States, Ireland and Australia. The trial consisted of two parts. In the Phase 1 portion, escalation
testing was performed to determine a recommended uproleselan dose in combination with standard chemotherapy to be
used in the Phase 2 portion. In the Phase 2 portion of the trial, dose expansion was performed at the recommended dose of
10 mg/kg uproleselan in combination with standard chemotherapy. The primary objective of the trial was to evaluate the
safety of uproleselan in combination with chemotherapy. Secondary objectives were to characterize PK and PD and to
observe anti-leukemic activity. A total of 19 patients with relapsed or refractory AML were enrolled and dosed with a
single cycle of treatment with uproleselan and chemotherapy in the Phase 1 portion of the trial. In the Phase 2 portion, one
cohort of 25 patients over 60 years of age with newly diagnosed AML and a second cohort of 47 patients with relapsed or
refractory AML were enrolled. Unlike in the Phase 1 portion, some of the patients in the Phase 2 portion were eligible to
receive multiple cycles of uproleselan with chemotherapy.
In December 2018, we presented final efficacy and correlative results from the Phase 1/2 trial at the annual ASH
meeting. Key highlights from the Phase 1/2 clinical data include the following:
● Relapsed/Refractory (R/R) AML Cohort: There were 66 patients in the R/R cohort, of which 54 were in the
recommended Phase 2 dose (RP2D) group. At the RP2D, CR (complete remission)/CRi (complete remission
with incomplete blood count recovery) rate was 41%, median overall survival, or OS, was 8.8 months (95% CI
5.7-11.4) and 69% of evaluable patients (11/16) achieved minimal residual disease, or MRD, negativity as
assessed by either flow and/or DNA-based methods such as reverse transcription polymerase chain reaction (RT-
PCR). OS will be the primary outcome measure in our ongoing Phase 3 trial in relapsed/refractory AML
patients. In historical controls, OS of approximately 5.2-5.4 months has been observed in this population with
this treatment approach. If we are able to achieve OS results in the Phase 3 trial comparable to those observed
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in the Phase 1/2 clinical trial, it could be a significant improvement over the results observed in these historical
controls.
● Newly Diagnosed AML Cohort: At the RP2D, CR/CRi rate was 72%, median overall survival was 12.6 months
(95% CI 9.9-not reached), event-free survival (EFS) was 9.2 months (95% CI 3.0-12.6) and 56% of evaluable
patients (5 out of 9) achieved MRD negativity as assessed by either flow and/or DNA-based methods such as
RT-PCR. Of note, the EFS data (primary outcome measure for the interim analysis in the NCI-sponsored clinical
trial in newly diagnosed AML patients) compares favorably to a range of 2.0-6.5 months for EFS in historical
controls, which generally included lower risk patient populations than those treated in our Phase 1/2 trial.
● An analysis of E-selectin ligand expression on leukemic cells demonstrated that detectable levels were present
on leukemic blasts for every patient tested, providing clinical evidence of biological relevance of the E-selectin
ligand in this disease setting. In bone marrow samples, leukemic stem cell expression of E-selectin ligand
correlated with leukemic blast E-selectin ligand expression (p<0.0001), consistent with the hypothesis that E-
selectin-mediated interactions are a mechanism of chemoresistance. Additionally, investigators assessed the
association between baseline E-selectin ligand expression on leukemic blasts and clinical outcomes using a log-
rank test. In the R/R cohort of patients treated with uproleselan and evaluated for E-selectin ligand expression at
baseline, this analysis demonstrated that ≥10% E-selectin ligand expression was correlated with prolonged
survival (p<0.01) compared to <10% E-selectin ligand expression. We believe this observation is important
because in patients not treated with uproleselan the scientific literature has instead observed that high levels of
E-selectin ligand correlated with a worse clinical prognosis. The addition of uproleselan in our study appears to
have reversed this trend toward worsened prognosis, and we believe this result may be achieved through the
restoration of chemosensitivity.
Based on these results, we are conducting a randomized, double-blind, placebo-controlled Phase 3 clinical trial to
evaluate uproleselan in individuals with relapsed/refractory AML, with a trial design aligned with guidance received from
the FDA. The primary efficacy endpoint is overall survival, and the FDA has advised us that data on overall survival will
not need to be censored for transplant in the primary efficacy analysis, meaning that patients who proceed to transplant will
continue to be included as part of the survival analysis.
All patients are being treated with standard chemotherapy of either MEC (mitoxantrone, etoposide and cytarabine) or
FAI (fludarabine, cytarabine and idarubicin), with approximately half of the patients randomized to receive uproleselan in
addition to chemotherapy. Patients receiving uproleselan are dosed for one day prior to initiation of chemotherapy, twice a
day through the chemotherapy regimen, and then for two days after the end of chemotherapy, which was the same schedule
as in the Phase 2 portion of the Phase 1/2 trial. The dose regimen is fixed, rather than weight-based, which we believe
simplifies administration, and we are offering up to three cycles of consolidation therapy in both arms of the trial for
patients who achieve remission. We believe that multiple cycles of treatment in patients who respond may drive an even
deeper response in patients treated with uproleselan. If this is the case, it could lengthen the duration of remission with
potential for additional benefit on survival. Key secondary endpoints of the Phase 3 trial include the incidence of severe
mucositis and remission rate, which will be assessed in a hierarchical fashion to provide supportive data.
Enrollment in this pivotal trial began in the fourth quarter of 2018, and we completed enrollment of the trial with a
total of 388 patients in November 2021 at centers in the United States, Canada, Europe and Australia. Based on discussions
with our external statisticians who are overseeing the results from the trial, we expect to report preliminary data from this
trial after year-end 2022.
In 2018, we signed a CRADA with the NCI. Under the terms of the CRADA, we are collaborating with both the NCI
and the Alliance for Clinical Trials in Oncology to conduct a Phase 2/3 randomized, controlled clinical trial testing the
addition of uproleselan to a standard cytarabine/daunorubicin chemotherapy regimen (7&3) in older adults with previously
untreated AML who are fit for intensive chemotherapy. Following completion of enrollment of the Phase 2 portion of the
study, which occurred in December 2021, there will be an interim analysis of EFS. The full trial is expected to enroll
approximately 670 patients with a primary endpoint is overall survival, which is defined as the time from the date of
randomization to death from any cause. Under the terms of the CRADA, the NCI may also fund additional research,
including clinical trials involving pediatric patients with AML as well as preclinical experiments and clinical trials
evaluating alternative populations and chemotherapy regimens. We will supply uproleselan as well as
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provide financial support to augment data analysis and monitoring for the Phase 2/3 program. Completion of enrollment
now sets the stage for a planned evaluation of the Phase 2 portion of the trial to determine whether the prespecified
threshold for continuing to Phase 3 has been met based on EFS results.
Uproleselan is also being studied in multiple investigator-sponsored trials (ISTs). In May 2021, clinicians at the
Washington University School of Medicine in St. Louis dosed the first patient in a Phase 2 IST evaluating uproleselan as a
prophylactic agent to reduce gastrointestinal (GI) toxicities and improve clinical outcomes in patients receiving high-dose
melphalan in autologous hematopoietic cell transplantation (auto-HCT) for multiple myeloma. Up to 50 patients will be
enrolled, and we anticipate a preliminary/interim data readout from the trial in 2022.
In July 2021, clinicians at the University of California (UC) Davis Comprehensive Cancer Center initiated dosing of
the first patient in a clinical study of uproleselan combined with venetoclax and azacitidine for the treatment of older or
unfit patients with treatment-naïve AML. The goal of the two-part IST is first to determine a recommended Phase 2 dose,
and then to explore efficacy in a dose expansion cohort. We are providing uproleselan for the IST. Up to 31 patients will be
enrolled, and a preliminary/interim readout is expected in 2022.
In July 2021, clinicians at the University of Texas MD Anderson Cancer Center treated the first patient in a Phase
1b/2 study evaluating uproleselan, added to cladribine plus low dose cytarabine, in patients with treated secondary AML
(ts-AML). Considered a distinct high-risk subset of AML with an adverse prognosis, ts-AML is defined as AML arising
from a previously treated antecedent myeloid neoplasm (myelodysplastic syndrome or myeloproliferative neoplasm).We
are providing uproleselan for the IST. The Phase 1b/2 single-arm trial is enrolling patients 18 years or older, with a
diagnosis of ts-AML who have not received therapy for their AML. Clinicians plan to enroll approximately 25 patients in
the trial and a preliminary/interim readout is expected in 2022.
In November 2021, clinicians at the University of Michigan initiated dosing of the first patient in a clinical study of
uproleselan in patients with severe COVID-19 pneumonia. Soluble E-selectin is a significant biomarker for acute
respiratory distress syndrome (ARDS). Soluble E-selectin also has pro-inflammatory properties further releasing cytokines
and promoting its synthesis and the continued influx of neutrophils. The goal of the study is to evaluate the safety of
uproleselan in this patient population to determine if treatment with E-selectin inhibitors can reduce the progression of
ARDS. Clinicians plan to enroll approximately 15 patients in the trial and a preliminary/interim readout is expected in
2022.
GMI-1359 - Drug Candidate Targeting E-selectin and CXCR4
The chemokine CXCR4 has emerged as an important pro-inflammatory cytokine that is involved in cell migration
throughout the body. Like E-selectin, tumor cells may also use the CXCR4 cellular pathway, contributing to
chemoresistance, metastatic disease and ultimately decreased survival. We are developing GMI-1359 that simultaneously
targets both E-selectin and CXCR4. Since E-selectin and CXCR4 are implicated in keeping cancer cells in the bone
marrow, we believe that targeting both E-selectin and CXCR4 with a single compound could improve efficacy in the
treatment of cancers that affect the bone marrow, such as hematologic cancers, including AML and multiple myeloma,
metastases of certain solid tumors, such as breast and prostate cancer, and primary tumors of the bone such as
osteosarcoma, a rare cancer affecting about 900 adolescents a year in the United States, as compared to targeting CXCR4
alone.
Leukemic cells and circulating tumor cells derived from adenocarcinomas home to and are retained in the bone
marrow via defined sinusoidal vascular gateways that express E-selectin and soluble mediators such as C-X-C motif
chemokine 12 (CXCL12, also known as stem cell-derived factor 1). This homing and retention occurs through an
interaction with E-selectin ligands and the chemokine receptor for CXCL12, CXCR4, which is expressed on tumor cells.
Interrupting E-selectin-mediated cell activation, adhesion and homing and CXCR4-mediated homing and cell migration
and retention may be synergistic and could have therapeutic benefit in many malignancies with unmet medical need. We
believe the use of an E-selectin/CXCR4 dual antagonist as an adjunct to chemotherapy and possibly immunotherapy could
improve response and remission rates, remission duration, and, ultimately, survival, particularly in malignancies where
bone involvement is a primary hallmark of cancer growth and metastasis.
In one in vivo mouse model of bone metastatic prostate carcinoma, combining GMI-1359 with docetaxel
significantly reduced tumor burden and attenuated bone destruction compared to docetaxel alone. In two mouse models of
primary osteosarcoma, administration of GMI-1359 resulted in inhibition of both tumor growth and spread to the lung.
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These results were presented during the 2015 and 2018 meetings of the American Association of Cancer Research. In both
mouse models, GMI-1359 showed single agent activity.
GMI-1359 has completed a Phase 1 single-dose escalation trial in healthy volunteers. In this trial, volunteer
participants received a single injection of GMI-1359, after which they were evaluated for safety, tolerability, PK and PD.
This randomized, double-blind, placebo-controlled, dose-escalation trial was conducted at a single site in the United States.
GMI-1359 was generally well tolerated in this trial, with no subjects experiencing serious adverse events. We initiated a
Phase 1b trial of GMI-1359 in the fourth quarter of 2019 at the Duke University Cancer Center in HR+ breast cancer
patients whose tumors have spread to bone. The trial evaluated safety and PK and PD markers of biologic activity in these
patients. The first patient was dosed in January 2020, and the trial ended in the fourth quarter of 2021. Evidence of on-
target effects of GMI-1359 was observed in patients, including CD34+ mobilization and decreased soluble E-selectin levels
following drug dosing. This data was presented during the 2021 meeting of the American Association of Cancer Research.
In January 2020, the FDA granted GMI-1359 Orphan Drug designation and Rare Pediatric Disease designation for the
treatment of osteosarcoma. Based on activity levels observed in the trial, we are evaluating potential indications for future
development where these overlapping functions play key roles, as well as the funding requirement for any potential
development opportunities.
GMI-1687
We have rationally designed an innovative antagonist of E-selectin, GMI-1687, that could be suitable for
subcutaneous administration. Initially developed as a potential life-cycle extension to uproleselan, when given by
subcutaneous injection in animal models, GMI-1687 has been observed to have equivalent activity to uproleselan, but at an
approximately 1,000-fold lower dose. We believe that GMI-1687 could be developed to broaden the clinical usefulness of
an E-selectin antagonist to conditions where outpatient treatment is preferred or required.
In September 2020 at the virtual meeting of the FSCDR, we gave an oral presentation on an abstract containing data
on GMI-1687, which included data from a preclinical model showing the drug candidate’s potential as a subcutaneously
administered treatment for VOC, a common complication of SCD. We are currently conducting activities and studies with
GMI-1687 to support our planned submission of an IND to the FDA in the first half of 2022.
Galectin Inhibitors
Using our glycomimetics platform, we have designed galectin-3 inhibitors that specifically block the binding of
galectin-3 to carbohydrate structures. Galectin-3 is a protein that is known to play critical roles in many pathological
processes, including fibrosis, checkpoints in T-cell exhaustion during cancer immunotherapy, chemotherapy resistance and
cardiovascular disease. We continue to optimize these compounds and conduct additional preclinical experiments to further
characterize the effects of our galectin-3 inhibitors on immune processes, fibrotic-associated disease progression and to
determine if these compounds can be orally bioavailable. One such compound, GMI-2093, has been observed to be 30%
bioavailable through oral administration. Another compound, GMI-1757, is a dual antagonist of both E-selectin and
galectin-3 and inhibited thrombus formation in a vena cava model and fibrosis in a corneal neovascularization model.
These results were presented at ASH in 2018.
Our Collaboration and License Agreement with Apollomics for Uproleselan and GMI-1687
In January 2020, we entered into an exclusive collaboration and license agreement with Apollomics for the
development and commercialization of uproleselan and GMI-1687 for all fields and all uses in Greater China. Apollomics
will be responsible for all clinical development and commercialization activities in Greater China. We and Apollomics will
also collaborate to advance the preclinical and clinical development of GMI-1687. As part of the agreement, we received
an upfront cash payment of $9.0 million and will be eligible to receive potential milestone payments totaling
approximately $180.0 million based on the achievement of specified development, regulatory and commercial milestones,
as well as tiered royalties ranging from the high single digits to 15% based on net sales. In September 2020, we received a
non-refundable $1.0 million development milestone payment upon acceptance by Chinese regulatory authorities of a Phase
3 bridging study design to support registration in China. Apollomics will be responsible for all costs related to
development, regulatory approvals and commercialization in Greater China for
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uproleselan and GMI-1687. We retain all rights for both compounds in the rest of the world and have agreed to supply
uproleselan and GMI-1687 to Apollomics pursuant to clinical and commercial supply agreements.
In June 2020, we entered into a clinical supply agreement with Apollomics under which we will manufacture and
supply uproleselan product to Apollomics at agreed upon prices. Apollomics has the option to begin manufacture after
appropriate material transfer requirements are met.
In September 2020, the China National Medical Products Administration (NMPA) Center for Drug Evaluation (CDE)
granted IND approval for uproleselan (also referred to as APL-106), enabling the initiation of a Phase 1 PK and tolerability
study. The IND approval also includes acceptance of a Phase 3 bridging study of APL-106 in combination with
chemotherapy in relapsed/refractory AML. In January 2021, APL-106 was granted Breakthrough Therapy designation from
the China NMPA CDE for the treatment of relapsed/refractory acute myeloid leukemia. In March 2021, Apollomics
enrolled the first patient in the Phase 1 study.
We and Apollomics have established a joint development committee to oversee activities under the collaboration and
license agreement. The collaboration and license agreement will terminate on a region-by-region basis upon the expiration
of the royalty term for each region, unless earlier terminated by either party. Either party may terminate the collaboration
and license agreement upon prior written notice, subject to specified conditions, including uncured material breach, or upon
bankruptcy or insolvency of the other party. Apollomics may terminate the collaboration and license agreement upon prior
written notice for any reason.
Intellectual Property
We strive to protect the intellectual property that we believe is important to our business, including seeking and
maintaining patent protection intended to cover the composition of matter of our drug candidates and their methods of use.
We have issued patents which cover uproleselan and methods of use that are expected to expire between 2032 and 2033. In
addition, we have several pending patent applications covering uproleselan and/or methods of using it, the last expiring of
which, if issued, currently would be predicted to expire in 2041. We also have an issued patent covering GMI-1359 and
methods of use that is expected to expire in 2036. In addition, we have several pending patent applications covering GMI-
1359 and/or methods of using it, the last expiring of which, if issued, currently would be predicted to expire in 2041. We
also have an issued patent covering GMI-1687 that is expected to expire in 2037. In addition, we have several pending
patent applications covering GMI-1687 and/or methods of using it, the last expiring of which, if issued, currently would be
predicted to expire in 2041. We also have several pending patent applications directed to our lead galectin antagonist
compounds and their methods of use, the last of which, if issued, currently would be predicted to expire in 2041. We also
rely on trade secret protection for our confidential and proprietary information and careful monitoring of such information
to protect aspects of our business.
Our success will depend significantly on our ability to obtain and maintain patent and other proprietary protection
for commercially important inventions and know-how related to our business, defend and enforce our patents, preserve the
confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and other proprietary
rights of third parties. We also rely on know-how and continuing technological innovation to develop, strengthen and
maintain our proprietary position in the field of glycomimetics.
A third party may hold intellectual property, including patent rights that are important or necessary to the
development of our drug candidates. It may be necessary for us to use the patented or proprietary technology of third
parties to commercialize our drug candidates, in which case we would be required to obtain a license from these third
parties. If we are not able to obtain such a license, or are not able to obtain such a license on commercially reasonable
terms, our business could be materially harmed.
We plan to continue to expand our intellectual property estate by filing patent applications directed to additional
glycomimetic compounds and their derivatives, compositions and formulations containing them and methods of using
them. Additionally, we will seek patent protection in the United States and internationally for novel compositions of matter
covering the compounds and their use in a variety of therapies.
The patent positions of biotechnology companies like us are generally uncertain and involve complex legal, scientific
and factual questions. In addition, the coverage claimed in a patent application can be significantly reduced before the
patent is issued, and its scope can be reinterpreted after issuance, including where a reissue application is filed in relation to
an issued patent to correct issues or errors arising during prosecution that may render claims of the issued patent either
wholly or partially invalid or unenforceable. Consequently, we do not know whether any of our drug
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candidates will be protectable or remain protected by enforceable patents. We cannot predict whether the patent
applications we are currently pursuing will issue as patents in any particular jurisdiction or whether the claims of any issued
patents will provide sufficient proprietary protection from competitors. Any patents that we hold may be challenged,
circumvented or invalidated by third parties.
Because patent applications in the United States and certain other jurisdictions are maintained in secrecy for 18
months, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we
cannot be certain of the priority of inventions covered by pending patent applications. Moreover, we may have to
participate in interference proceedings declared by the U.S. Patent and Trademark Office, or USPTO, or a foreign patent
office to determine priority of invention or in post-grant challenge proceedings, such as oppositions, that challenge priority
of invention or other features of patentability. Such proceedings could result in substantial cost, even if the eventual
outcome is favorable to us.
Manufacturing
We do not have any manufacturing facilities or personnel. We currently rely, and expect to continue to rely, on third
parties for the manufacturing of our drug candidates for preclinical and clinical testing, as well as for commercial
manufacturing if our drug candidates receive marketing approval. We anticipate continuing to manage process
development, scale-up and manufacturing under contracts with third parties. For uproleselan, we expect a significant
increase in manufacturing as we prepare for potential regulatory filings for marketing approval.
All of our drug candidates are small molecules and are manufactured in reliable and reproducible synthetic processes
from readily available starting materials. The chemistry does not require unusual equipment in the manufacturing process.
We expect to continue to develop drug candidates that can be produced cost-effectively at contract manufacturing facilities.
Commercialization
We have not yet established a sales, marketing or drug distribution infrastructure. We generally expect to retain
commercial rights in the United States for our current drug candidates, all of which are still in preclinical or clinical
development. We believe that it will be possible for us to access the U.S. market for those drug candidates through a
focused, specialized, key account sales force. With respect to uproleselan and GMI-1687, we have granted Apollomics
exclusive commercialization rights in Greater China, and we may grant similar rights to third parties for our drug
candidates in other jurisdictions around the world.
Subject to receiving marketing approvals, we expect to commence commercialization activities by building or
outsourcing a focused sales, marketing and key account management organization in the United States to sell our drugs. We
believe that such an organization will be able to target the community of physicians who are the key specialists in treating
the patient populations for which our drug candidates are being developed. Outside the United States, we expect to enter
into distribution and other marketing arrangements with third parties for any of our drug candidates that obtain marketing
approval.
We also plan to build a marketing and sales management organization to create and implement marketing strategies
for any drugs that we market through our own sales organization and to oversee and support our sales force. The
responsibilities of the marketing organization would include developing educational initiatives with respect to approved
drugs and establishing relationships with thought leaders in relevant fields of medicine.
Competition
The key competitive factors affecting the success of all of our drug candidates, if approved, are likely to be their
safety, efficacy, convenience, price, the level of generic competition and the availability of coverage and reimbursement
from government and other third-party payors.
As the treatment landscape for AML changes, there is substantial risk that uproleselan might not provide additional
benefit over other existing therapies. A key consideration in the treatment of relapsed/refractory AML patients is the
patient’s suitability for intensive salvage chemotherapy. The patient population being studied in our ongoing Phase 3
clinical trial of uproleselan includes AML patients deemed able to tolerate salvage chemotherapy. While there is no
commonly accepted single standard approach for salvage chemotherapy, existing options for the treatment of
relapsed/refractory AML patients who can tolerate salvage chemotherapy include cytarabine-based combinations. In
addition, we are aware of several other products and product candidates that are commercially available or are in
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development as potential treatment options for AML patients. Some of the patient populations being studied for these
product candidates in development overlap with the patient population being studied in our Phase 3 clinical trial of
uproleselan. The existence of established treatment options and the development of competing therapies for
relapsed/refractory AML patients could negatively impact our ability to successfully commercialize uproleselan.
The following therapies have been approved by the FDA for the treatment of AML:
● RYDAPT® (midostaurin), an oral prescription medicine commercialized by Novartis to be used in combination
with certain chemotherapy medicines to treat adults with newly diagnosed AML who have a defect in a gene
called FLT3;
● IDHIFA® (enasidenib), a prescription medicine commercialized by Celgene intended to treat people with AML
with an isocitrate dehydrogenase-2 (IDH2) mutation whose disease has come back or has not improved after
previous treatments;
● VYXEOSTM (daunorubicin and cytarabine), commercialized by Jazz Pharmaceuticals, which is indicated for the
treatment of adults with newly-diagnosed therapy-related AML (t-AML) or AML with myelodysplasia-related
changes (AML-MRC);
● MYLOTARGTM (gemtuzumab ozogamicin), commercialized by Pfizer, which is indicated for the treatment for
the treatment of newly-diagnosed CD33-positive AML in adults (in combination with daunorubicin and
cytarabine) and for treatment of relapsed or refractory CD33-positive AML in adults and in pediatric patients
aged 2 years and older as a stand-alone treatment;
● TIBSOVO® (ivosidenib), a prescription medicine commercialized by Agios intended to treat people with AML
with an isocitrate dehydrogenase-1 (IDH1) mutation whose disease has come back or has not improved after
previous treatments;
● XOSPATA® (gilteritinib), an oral prescription medicine commercialized by Astellas intended to treat people
with AML with a FLT3 gene mutation whose disease has come back or has not improved after previous
treatments;
● DAURISMO (glasdigib), an oral prescription medicine commercialized by Pfizer to be used in combination
with low-dose cytarabine, for the treatment of newly-diagnosed AML in adult patients who are ≥75 years old or
who have comorbidities that preclude use of intensive induction chemotherapy;
● VENCLEXTA® (venetoclax), an oral prescription medicine commercialized by AbbVie/Genentech to be used
in combination with azacitidine, or decitabine, or low-dose cytarabine to treat adults with newly-diagnosed
AML who are either 75 years of age or older, or have other medical conditions that prevent the use of standard
chemotherapy; and
● ONUREG® (Azacitidine), an oral prescription medicine for continued treatment of adult patients with AML
who achieved CR or CRi following intensive induction chemotherapy and are not able to complete intensive
curative therapy.
While many chemotherapies and targeted therapies, either approved or in development for hematologic malignancies,
will likely be complementary to uproleselan, there are also therapies in development that could be directly competitive with
uproleselan. In particular, Pfizer has recently initiated Phase 1 development of an E-selectin antibody (PF-07209326).
While the initial target indication for this biologic is SCD, it is possible Pfizer could expand development to AML and
other hematologic malignancies. Additionally, there are a number of CXCR4 antagonists in clinical development that target
the bone marrow microenvironment in order to mobilize and sensitize cancer cells to chemotherapy or other therapies,
including candidates developed by Sanofi-Aventis (Mozobil), Bristol Myers Squibb (BMS-936564), NOXXON Pharma
(NOX-A12), Eli Lilly (LY2510924) and BioLine RX (BL-8040).
Many of the companies against which we are competing, or against which we may compete in the future, have
significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing,
conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do. Mergers and
acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated
among a smaller number of our competitors. Smaller or early stage companies may also prove to be significant
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competitors, particularly through collaborative arrangements with large and established companies. These competitors also
compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial
sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our
programs.
Government Regulation and Product Approval
Government authorities in the United States, at the federal, state and local levels, and in other countries, extensively
regulate, among other things, the research, development, testing, manufacture, packaging, storage, recordkeeping, labeling,
advertising, promotion, distribution, marketing, import and export of pharmaceutical products, such as those we are
developing. The processes for obtaining regulatory approvals in the United States and in foreign countries, along with
subsequent compliance with applicable statutes and regulations, require the expenditure of substantial time and financial
resources.
United States Government Regulation
In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and its
implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate
federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources.
Failure to comply with the applicable United States requirements at any time during the drug development process,
approval process or after approval, may subject an applicant to a variety of administrative or judicial sanctions, such as the
FDA’s refusal to approve pending new drug applications, or NDAs, withdrawal of an approval, imposition of a clinical
hold, issuance of warning or untitled letters, product recalls, product seizures, total or partial suspension of production or
distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.
The process required by the FDA before a drug may be marketed in the United States generally involves:
● completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s
good laboratory practice, or GLP, regulations;
● submission to the FDA of an IND, which must become effective before human clinical trials may begin;
● approval by an independent institutional review board, or IRB, at each clinical site before each trial may be
initiated;
● performance of human clinical trials, including adequate and well-controlled clinical trials, in accordance with
good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug for each indication;
● submission to the FDA of an NDA;
● satisfactory completion of an FDA advisory committee review, if applicable;
● satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the product is
produced to assess compliance with current good manufacturing practices, or cGMP, and to assure that the
facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity, as well
as satisfactory completion of an FDA inspection of selected clinical sites to determine GCP compliance; and
● FDA review and approval of the NDA.
Preclinical Studies
Preclinical studies include laboratory evaluation of product chemistry, toxicity and formulation, as well as animal
studies to assess potential safety and efficacy. An IND sponsor must submit the results of the preclinical studies, together
with manufacturing information, analytical data and any available clinical data or literature, among other things, to the
FDA as part of an IND. Some preclinical testing may continue even 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 clinical trial on a clinical hold. In such a case, the IND sponsor and the
FDA must resolve any outstanding concerns before the clinical trial can begin. As a result, submission of an IND may not
result in the FDA allowing clinical trials to commence.
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Clinical Trials
Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of
qualified investigators in accordance with GCP requirements, which include the requirement that all research subjects
provide their informed consent in writing for their participation in any clinical trial. Clinical trials are conducted under
protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety and the
effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be
submitted to the FDA as part of the IND. In addition, an IRB at each institution participating in the clinical trial must
review and approve the plan for any clinical trial before it commences at that institution, and the IRB must continue to
oversee the clinical trial while it is being conducted. Information about certain clinical trials must be submitted within
specific timeframes to the National Institutes of Health, or NIH, for public dissemination on their ClinicalTrials.gov
website.
Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined. In Phase
1, the drug is initially introduced into healthy human subjects or patients with the target disease or condition and tested for
safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an initial indication of its
effectiveness. In Phase 2, the drug typically is administered to a limited patient population to identify possible adverse
effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine
dosage tolerance and optimal dosage. In Phase 3, the drug is administered to an expanded patient population, generally at
geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate
the safety and efficacy of the product for approval, to establish the overall risk-benefit profile of the product and to provide
adequate information for the labeling of the product.
Progress reports detailing the results of the clinical trials must be submitted, at least annually, to the FDA, and more
frequently if serious adverse events occur. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully
within any specified period, or at all. Furthermore, the FDA or the sponsor may suspend or terminate a clinical trial at any
time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk.
Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being
conducted in accordance with the IRB’s requirements, or if the drug has been associated with unexpected serious harm to
patients.
A sponsor may request a Special Protocol Assessment, or SPA, the purpose of which is to reach agreement with the
FDA on the Phase 3 clinical trial protocol design and analysis that will form the primary basis of an efficacy claim.
According to the FDA’s published guidance on the SPA process, a sponsor that meets the prerequisites may make a specific
request for an SPA and provide information regarding the design and size of the proposed clinical trial. The FDA is
supposed to evaluate the protocol within 45 days of the request to assess whether the protocol design and planned analysis
of the trial are acceptable to support regulatory approval of the product candidate with respect to effectiveness of the
indication studied, and that evaluation may result in discussions and a request for additional information. An SPA request
must be made before the proposed trial begins, and all open issues must be resolved before the trial begins for an SPA to be
approved. If a written agreement is reached, it will be documented in an SPA letter or the minutes of a meeting between the
sponsor and the FDA and made part of the administrative record.
Even if the FDA agrees to the design, execution and analyses proposed in protocols reviewed under the SPA process,
the FDA may revoke or alter its agreement under the following circumstances:
● public health concerns emerge that were unrecognized at the time of the protocol assessment, or the director of
the review division determines that a substantial scientific issue essential to determining safety or efficacy has
been identified after testing has begun;
● a sponsor fails to follow a protocol that was agreed upon with the FDA; or
● the relevant data, assumptions, or information provided by the sponsor in a request for SPA change are found to
be false statements or misstatements, or are found to omit relevant facts.
A documented SPA may be modified, and such modification will be deemed binding on the FDA review division,
except under the circumstances described above, if the FDA and the sponsor agree in writing to modify the protocol and
such modification is intended to improve the study. An SPA, however, does not guarantee that a trial will be successful.
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Marketing Approval
Assuming successful completion of the required clinical testing, the results of the preclinical and clinical studies,
together with detailed information relating to the product’s chemistry, manufacture, controls and proposed labeling, among
other things, are submitted to the FDA as part of an NDA requesting approval to market the product for one or more
indications. In most cases, the submission of an NDA is subject to a substantial application user fee. Under the Prescription
Drug User Fee Act, or PDUFA, guidelines that are currently in effect, the FDA has agreed to certain performance goals
regarding the timing of its review of an application.
In addition, under the Pediatric Research Equity Act, an NDA or supplement to an NDA must contain data that are
adequate to assess the safety and effectiveness of the drug for the claimed indications in all relevant pediatric
subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and
effective. The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all
pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data
requirements. Unless otherwise required by regulation, the pediatric data requirements do not apply to products with
orphan designation.
The FDA also may require submission of a risk evaluation and mitigation strategy, or REMS, plan to mitigate any
identified or suspected serious risks. The REMS plan could include medication guides, physician communication plans,
assessment plans and elements to assure safe use, such as restricted distribution methods, patient registries or other risk
minimization tools.
The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them
for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request
additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the
additional information. The resubmitted application is also subject to review before the FDA accepts it for filing. Once the
submission is accepted for filing, the FDA begins an in-depth substantive review. The FDA reviews an NDA to determine,
among other things, whether the drug is safe and effective and whether the facility in which it is manufactured, processed,
packaged or held meets standards designed to assure the product’s continued safety, quality and purity.
The FDA typically refers questions regarding novel drugs to an external advisory committee. An advisory committee
is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a
recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by
the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.
Before approving an NDA, the FDA typically will inspect the facility or facilities where the product is manufactured.
The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in
compliance with cGMP requirements and adequate to assure consistent production of the product within required
specifications. Additionally, before approving an NDA, the FDA will typically inspect one or more clinical trial sites to
assure compliance with GCP.
The testing and approval process for an NDA requires substantial time, effort and financial resources, and could take
several years to complete. Data obtained from preclinical and clinical testing are not always conclusive and may be
susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant
approval of an NDA on a timely basis, or at all.
After evaluating the NDA and all related information, including the advisory committee recommendation, if any, and
inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval letter, or, in
some cases, a complete response letter. A complete response letter generally contains a statement of specific conditions that
must be met in order to secure final approval of the NDA and may require additional clinical or preclinical testing in order
for the FDA to reconsider the application. Even with submission of this additional information, the FDA ultimately may
decide that the application does not satisfy the regulatory criteria for approval. If and when those conditions have been met
to the FDA’s satisfaction, the FDA will typically issue an approval letter. An approval letter authorizes commercial
marketing of the drug with specific prescribing information for specific indications.
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Special FDA Expedited Review and Approval Programs
The FDA has various programs, including fast track designation, accelerated approval, priority review, and
breakthrough therapy designation, which are intended to expedite or simplify the process for the development and the FDA
review of drugs that are intended for the treatment of serious or life threatening diseases or conditions and demonstrate the
potential to address unmet medical needs. The purpose of these programs is to provide important new drugs to patients
earlier than under standard FDA review procedures.
To be eligible for a fast track designation, the FDA must determine, based on the request of a sponsor, that a product
is intended to treat a serious or life-threatening disease or condition and demonstrates the potential to address an unmet
medical need. 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. The
FDA may review sections of the NDA for a fast track product on a rolling basis before the complete application is
submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept
sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon
submission of the first section of the NDA.
The FDA may give a priority review designation to drugs that offer major advances in treatment, or provide a
treatment where no adequate therapy exists. A priority review means that the goal for the FDA to review an application is
six months, rather than the standard review of ten months under current PDUFA guidelines. These six and ten month
review periods are measured from the “filing” date rather than the receipt date for NDAs for new molecular entities, which
typically adds approximately two months to the timeline for review and decision from the date of submission. Most
products that are eligible for fast track designation are also likely to be considered appropriate to receive a priority review.
In addition, products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that
provide meaningful therapeutic benefit over existing treatments may be eligible for accelerated approval and may be
approved on the basis of adequate and well-controlled clinical trials establishing that the drug product has an effect on a
surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier
than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality
or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of
alternative treatments. As a condition of approval, the FDA may require a sponsor of a drug receiving accelerated approval
to perform post-marketing studies to verify and describe the predicted effect on irreversible morbidity or mortality or other
clinical endpoint, and the drug may be subject to accelerated withdrawal procedures.
A sponsor can also request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy
is defined as a drug that is intended, alone or in combination with one or more other drugs, to treat a serious or life-
threatening disease or condition, and preliminary clinical evidence indicates that the drug may demonstrate substantial
improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects
observed early in clinical development. Drugs designated as breakthrough therapies are also eligible for accelerated
approval. The FDA must take certain actions, such as holding timely meetings and providing advice, intended to expedite
the development and review of an application for approval of a breakthrough therapy.
Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer
meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. We
may explore some of these opportunities for our product candidates as appropriate.
Post-Approval Requirements
Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by
the FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and
distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most
changes to the approved product, such as adding new indications, manufacturing changes or other labeling claims, are
subject to further testing requirements and prior FDA review and approval. There also are continuing annual user fee
requirements for any marketed products, as well as application fees for supplemental applications with clinical data.
Even if the FDA approves a product, it may limit the approved indications for use of the product, require that
contraindications, warnings or precautions be included in the product labeling, including a boxed warning, require that
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post-approval studies, including Phase 4 clinical trials, be conducted to further assess a drug’s safety after approval, require
testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including
distribution restrictions or other risk management mechanisms under a REMS, which can materially affect the potential
market and profitability of the product. The FDA may prevent or limit further marketing of a product based on the results
of post-marketing studies or surveillance programs.
In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are
required to register their establishments with the FDA and state agencies, and are subject to periodic unannounced
inspections by the FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturing
process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also
require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements
upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must
continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.
Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and
standards is not maintained or if problems occur after the product reaches the market.
Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity
or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory
revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to
assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential
consequences include, among other things:
● restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the
market or product recalls;
● fines, warning letters or holds on post-approval clinical trials;
● refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of
product license approvals;
● product seizure or detention, or refusal to permit the import or export of products; or
● injunctions or the imposition of civil or criminal penalties.
The FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market.
Although physicians, in the practice of medicine, may prescribe approved drugs for unapproved indications,
pharmaceutical companies generally are required to promote their drug products only for the approved indications and in
accordance with the provisions of the approved label. 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. However, physicians may, in their independent medical judgment, prescribe
legally available products for off-label uses. The FDA does not regulate the behavior of physicians in their choice of
treatments but the FDA does restrict manufacturer’s communications on the subject of off-label use of their products.
In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing
Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level, and sets minimum standards
for the registration and regulation of drug distributors by the states. Both the PDMA and state laws limit the distribution of
prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.
Federal and State Fraud and Abuse, Data Privacy and Security, and Transparency Laws and Regulations
In addition to FDA restrictions on marketing of pharmaceutical products, federal and state healthcare laws and
regulations restrict business practices in the biopharmaceutical industry. These laws include, but are not limited to, anti-
kickback and false claims laws and regulations, data privacy and security, and transparency 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 or
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recommending the purchase, lease or order of any item or service reimbursable under Medicare, Medicaid or other federal
healthcare programs. The term “remuneration” has been broadly interpreted to include anything of value. The Anti-
Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and
prescribers, purchasers and formulary managers on the other. Although there are a number of statutory exemptions and
regulatory safe harbors protecting some common activities from prosecution, the exemptions and safe harbors are drawn
narrowly and require strict compliance in order to offer protection. Practices that involve remuneration that may be alleged
to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an
exemption or safe harbor. Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of
an arrangement involving remuneration is to induce referrals of federal healthcare covered business, the statute has been
violated.
The reach of the federal Anti-Kickback Statute was also broadened by the Patient Protection and Affordable Care Act
of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively PPACA, which, among
other things, amended the intent requirement of the federal Anti-Kickback Statute such that a person or entity no longer
needs to have actual knowledge of this statute or specific intent to violate it in order to have committed a violation. In
addition, PPACA provides that the government may assert that a claim including items or services resulting from a
violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False
Claims Act or the civil monetary penalties statute, which imposes penalties against any person or entity who is determined
to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for
an item or service that was not provided as claimed or is false or fraudulent.
Federal 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, using or
causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. A
claim includes “any request or demand” for money or property presented to the U.S. government. Pharmaceutical and other
healthcare companies have been prosecuted under these laws for, among other things, allegedly providing free product to
customers with the expectation that the customers would bill federal programs for the product. Companies also have been
prosecuted for causing false claims to be submitted because of the companies’ marketing of products for unapproved, and
thus non-reimbursable, uses. The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created
additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing a scheme to
defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying,
concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection
with the delivery of or payment for healthcare benefits, items or services. Also, many states have similar fraud and abuse
statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several
states, apply regardless of the payor.
In addition, we may be subject to data privacy and security regulation by both the federal government and the states
in which we conduct our business. HIPAA, as amended by the Health Information Technology for Economic and Clinical
Health Act, or HITECH, and their respective implementing regulations, including the Final HIPAA Omnibus Rule
published on January 25, 2013, imposes specified requirements on certain types of individuals and entities relating to the
privacy, security and transmission of individually identifiable health information. Among other things, HITECH makes
HIPAA’s security standards directly applicable to “business associates,” defined as independent contractors or agents of
covered entities that create, receive, maintain or transmit protected health information in connection with providing a
service for or on behalf of a covered entity. HITECH also increased the civil and criminal penalties that may be imposed
against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to
file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees
and costs associated with pursuing federal civil actions. In addition, state laws govern the privacy and security of health
information in certain circumstances, many of which are not pre-empted by HIPAA, differ from each other in significant
ways and may not have the same effect, thus complicating compliance efforts.
The federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and
medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program,
with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related
to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists
and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners) and
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teaching hospitals, and applicable manufacturers and applicable group purchasing organizations to report annually to CMS
ownership and investment interests held by the physicians and their immediate family members.
We may also be subject to state laws that require pharmaceutical companies to comply with the pharmaceutical
industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government,
as well as state laws that require drug manufacturers to report information related to payments and other transfers of value
to physicians and other healthcare providers or marketing expenditures.
Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, it is
possible that some of our business activities could be subject to challenge under one or more of such laws. If our operations
are found to be in violation of any of the federal and state laws described above or any other governmental regulations that
apply to us, we may be subject to penalties, including administrative, criminal and significant civil monetary penalties,
damages, fines, disgorgement, imprisonment, additional reporting requirements and oversight if we become subject to a
corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual
damages, reputational harm, diminished profits and future earnings, disgorgement, exclusion from participation in
government healthcare programs and the curtailment or restructuring of our operations, any of which could adversely affect
our ability to operate our business and our results of operations. To the extent that any of our products are sold in a foreign
country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-
marketing requirements, including safety surveillance, anti-fraud and abuse laws and implementation of corporate
compliance programs and reporting of payments or transfers of value to healthcare professionals.
Coverage and Reimbursement
The future commercial success of our drug candidates or any of our collaborators’ ability to commercialize any
approved drug candidates successfully will depend in part on the extent to which governmental payor programs at the
federal and state levels, including Medicare and Medicaid, private health insurers and other third-party payors provide
coverage for and establish adequate reimbursement levels for our drug candidates. Government health administration
authorities, private health insurers and other organizations generally decide which drugs they will pay for and establish
reimbursement levels for healthcare. In particular, in the United States, private health insurers and other third-party payors
often provide reimbursement for products and services based on the level at which the government, through the Medicare
or Medicaid programs, provides reimbursement for such treatments. In the United States, the European Union, or EU, and
other potentially significant markets for our drug candidates, government authorities and third party payors are increasingly
attempting to limit or regulate the price of medical products and services, particularly for new and innovative products and
therapies, which often has resulted in average selling prices lower than they would otherwise be. Further, the increased
emphasis on managed healthcare in the United States and on country and regional pricing and reimbursement controls in
the EU will put additional pressure on product pricing, reimbursement and usage, which may adversely affect our future
product sales and results of operations. These pressures can arise from rules and practices of managed care groups, judicial
decisions and laws and regulations related to Medicare, Medicaid and healthcare reform, pharmaceutical coverage and
reimbursement policies and pricing in general.
Third-party payors are increasingly imposing additional requirements and restrictions on coverage and limiting
reimbursement levels for medical products. For example, federal and state governments reimburse covered prescription
drugs at varying rates generally below average wholesale price. These restrictions and limitations influence the purchase of
healthcare services and products. Third-party payors may limit coverage to specific drug products on an approved list, or
formulary, which might not include all of the FDA-approved drug products for a particular indication. Third-party payors
are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and
services, in addition to their safety and efficacy. We may need to conduct expensive pharmacoeconomic studies in order to
demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain the
FDA approvals. Our drug candidates may not be considered medically necessary or cost-effective. A payor’s decision to
provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Further, one
payor’s determination to provide coverage for a drug product does not assure that other payors will also provide coverage
for the drug product. Adequate third-party reimbursement may not be available to enable us to maintain price levels
sufficient to realize an appropriate return on our investment in drug development. Legislative proposals to reform
healthcare or reduce costs under government insurance programs may result in lower reimbursement for our drugs and drug
candidates or exclusion of our drugs and drug candidates from coverage. The cost containment measures that healthcare
payors and providers are instituting and any healthcare reform could significantly reduce our
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revenues from the sale of any approved drug candidates. We cannot provide any assurances that we will be able to obtain
and maintain third party coverage or adequate reimbursement for our drug candidates in whole or in part.
Impact of Healthcare Reform on our Business
The United States and some foreign jurisdictions are considering enacting or have enacted a number of additional
legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our
products profitably. Among policy makers and payors in the United States and elsewhere, there is significant interest in
promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and
expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts, which
include major legislative initiatives to reduce the cost of care through changes in the healthcare system, including limits on
the pricing, coverage, and reimbursement of pharmaceutical and biopharmaceutical products, especially under government-
funded health care programs, and increased governmental control of drug pricing.
There have been several U.S. government initiatives over the past few years to fund and incentivize certain
comparative effectiveness research, including creation of the Patient-Centered Outcomes Research Institute under PPACA.
Although the results of the comparative effectiveness studies are not intended to mandate coverage policies for public or
private payors, it is not clear what effect, if any, the research will have on the sales of any product, if any such product or
the condition that it is intended to treat is the subject of a study. It is also possible that comparative effectiveness research
demonstrating benefits in a competitor’s product could adversely affect the sales of our product candidates. If third-party
payors do not consider our drug candidates to be cost-effective compared to other available therapies, they may not cover
our drug candidates, once approved, as a benefit under their plans or, if they do, the level of payment may not be sufficient
to allow us to sell our drugs on a profitable basis. PPACA became law in March 2010 and substantially changed the way
healthcare is financed by both governmental and private insurers. Among other measures that may have an impact on our
business, PPACA established an annual, nondeductible fee on any entity that manufactures or imports specified branded
prescription drugs and biologic agents; a new Medicare Part D coverage gap discount program; and a new formula that
increases the rebates a manufacturer must pay under the Medicaid Drug Rebate Program. Additionally, PPACA extends
manufacturers’ Medicaid rebate liability, expands eligibility criteria for Medicaid programs, and expands entities eligible
for discounts under the Public Health Service pharmaceutical pricing program. There remain judicial and Congressional
challenges to certain aspects of PPACA, as well as efforts by the executive branch at various times to repeal or replace
certain aspects of the PPACA.
Since January 2017, two Executive Orders were signed that were designed to delay the implementation of any certain
provisions of the PPACA or otherwise circumvent some of the requirements for health insurance mandated by the PPACA.
Concurrently, Congress has considered legislation that would repeal or repeal and replace all or part of the PPACA. While
Congress has not passed comprehensive repeal legislation, two bills affecting the implementation of certain taxes under the
PPACA have been signed into law. The Tax Cuts and Jobs Act of 2017 includes a provision repealing, effective January 1,
2019, the tax-based shared responsibility payment imposed by the PPACA on certain individuals who fail to maintain
qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”. In addition, the
2020 federal spending package permanently eliminated, effective January 1, 2020, the PPACA-mandated “Cadillac” tax on
high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the
health insurer tax. The Bipartisan Budget Act of 2018, or the BBA, among other things, amended the ACA, effective
January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical
manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly
referred to as the “donut hole.” For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on
procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed
by Congress. Thus, the ACA will remain in effect in its current form. Further, prior to the U.S. Supreme Court ruling, on
January 28, 2021, President Biden issued an executive order to initiate a special enrollment period for purposes of
obtaining health insurance coverage through the ACA marketplace. The executive order also instructs certain governmental
agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others,
reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create
unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA. It is unclear how any
such challenges and healthcare reform measures of the Biden administration will impact ACA and our business.
In addition, there has been increasing legislative and enforcement interest in the United States with respect to
specialty drug pricing practices. Specifically, there have been several recent U.S. Congressional inquiries and proposed
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federal and proposed and enacted state legislation designed to, among other things, bring more transparency to drug
pricing, review the relationship between pricing and manufacturer patient programs, and reform government program
reimbursement methodologies for drugs. At the federal level, the Trump administration used several means to propose
implementing drug pricing reform, including through federal budget proposals, executive orders and policy initiatives. For
example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related
to prescription drug pricing that seek to implement several of the administration’s proposals. As a result, the FDA released
a final rule and guidance on September 24, 2020, providing guidance for states to build and submit importation plans for
drugs from Canada. Further, on November 20, 2020, the U.S. Department of Health and Human Services finalized a
regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under
Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law. The
implementation of the rule has been delayed by the Biden administration from January 1, 2022 to January 1, 2023 in
response to ongoing litigation. The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as
well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers, the
implementation of which have also been delayed pending review by the Biden administration until January 1, 2023. On
November 20, 2020, the Centers for Medicare & Medicaid Services, or CMS, issued an interim final rule implementing
President Trump’s Most Favored Nation executive order, which would tie Medicare Part B payments for certain physician-
administered drugs to the lowest price paid in other economically advanced countries. As a result of litigation challenging
the Most Favored Nation model, on December 27, 2021, CMS published a final rule that rescinded the Most Favored
Nation model interim final rule. In July 2021, the Biden administration released an executive order, “Promoting
Competition in the American Economy,” with multiple provisions aimed at prescription drugs. In response to Biden’s
executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines
principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue to
advance these principles. No legislation or administrative actions have been finalized to implement these principles. In
addition, Congress is considering drug pricing as part of other reform initiatives. At the state level, legislatures are
increasingly passing legislation and implementing regulations designed to control pharmaceutical and biological product
pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and
marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other
countries and bulk purchasing.
As a result of PPACA, Medicare payments are increasingly tied to quality of care and value measures, and reporting
of related data by providers such as physicians and hospitals. So called “value based reimbursement” measures may present
challenges as well as potential opportunities for biopharmaceutical manufacturers. Medicare incentives for providers
meeting certain quality measures may ultimately prove beneficial for manufacturers that are able to establish that their
products may help providers to meet such measures. However, manufacturers’ ability to market their drug products based
on quality or value is highly regulated and not always permissible. In addition, the potentially decreased Medicare
reimbursement to those providers that fail to adequately comply with quality reporting requirements could translate to
decreased resources available to purchase products and may negatively impact marketing or utilization of our drug
candidates if they are approved for marketing. We cannot predict at this time what impact, if any, the longer-term shift
towards value based reimbursement will have on any of our drug candidates in either the Medicare program, or in any other
third party payor programs that may similarly tie payment to provider quality.
In addition, other legislative changes have been proposed and adopted since PPACA was enacted. In August 2011,
the President signed into law the Budget Control Act of 2011, as amended, which, among other things, created the Joint
Select Committee on Deficit Reduction to recommend proposals in spending reductions to Congress. The Joint Select
Committee on Deficit Reduction did not achieve its targeted deficit reduction of at least $1.2 trillion for the years 2013
through 2021, triggering the legislation’s automatic reductions to several government programs. These reductions include
aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which began in 2013 and, following
passage of the Bipartisan Budget Act of 2015, will continue through 2031, except for a temporary suspension from May 1,
2020 through March 31, 2022 due to the COVID-19 pandemic, unless additional Congressional action is taken. Under
current legislation, the actual reduction in Medicare payments will vary from 1% in 2022 to up to 3% in the final fiscal year
of this sequester. On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which
eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single
source and innovator multiple source drugs, beginning January 1, 2024. In January 2013, President Obama signed into law
the American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several providers
and increased the statute of limitations period for the government to recover
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overpayments to providers from three to five years. Additional legislative proposals to reform healthcare and government
insurance programs, along with the trend toward managed healthcare in the United States, could influence the purchase of
medicines and reduce reimbursement and/or coverage of our product candidates, if approved.
Exclusivity and Approval of Competing Products
Hatch-Waxman Patent Listing
In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims
that cover the applicant’s product or a method of using the 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
competitors in support of approval of an abbreviated new drug application, or ANDA, or 505(b)(2) NDA. Generally, an
ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths, dosage form
and route of administration as the listed drug and has been shown to be bioequivalent through in vitro or in vivo testing or
otherwise to the listed drug. ANDA applicants are not required to conduct or submit results of preclinical or clinical tests to
prove the safety or efficacy of their drug product, other than the requirement for bioequivalence testing. 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. 505(b)(2) NDAs generally are submitted for changes to a previously
approved drug product, such as a new dosage form or indication.
The ANDA or 505(b)(2) NDA applicant is required to certify to the FDA concerning any patents listed for the
approved product in the FDA’s Orange Book, except for patents covering methods of use for which the ANDA applicant is
not seeking approval. Specifically, the applicant must certify with respect to each patent that:
● the required patent information has not been filed;
● 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
● the listed patent is invalid, unenforceable or will not be infringed by the new product.
Generally, the ANDA or 505(b)(2) NDA cannot be approved until all listed patents have expired, except when the
ANDA or 505(b)(2) NDA applicant challenges a listed drug. A certification that the proposed product will not infringe the
already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV
certification. If the applicant does not challenge the listed patents or indicate that it is not seeking approval of a patented
method of use, the ANDA or 505(b)(2) NDA application will not be approved until all the listed patents claiming the
referenced product have expired.
If the ANDA or 505(b)(2) NDA 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 application 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 after the receipt of notice of the
Paragraph IV certification automatically prevents the FDA from approving the ANDA or 505(b)(2) NDA 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.
Hatch-Waxman Non-Patent Exclusivity
Market and data exclusivity provisions under the FDCA also can delay the submission or the approval of certain
applications for competing products. The FDCA provides a five-year period of non-patent data exclusivity within the
United States to the first applicant to gain approval of an NDA for a new chemical entity. A drug is a new chemical entity if
the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion
responsible for the activity of the drug substance. During the exclusivity period, the FDA may not accept for review an
ANDA or a 505(b)(2) NDA submitted by another company that contains the previously approved active moiety. However,
an ANDA or 505(b)(2) NDA may be submitted after four years if it contains a certification of patent invalidity or
noninfringement.
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The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an
existing NDA or 505(b)(2) NDA if new clinical investigations, other than bioavailability studies, that were conducted or
sponsored by the applicant, are deemed by the FDA to be essential to the approval of the application or supplement. Three-
year exclusivity may be awarded for changes to a previously approved drug product, such as new indications, dosages,
strengths or dosage forms of an existing drug. This three-year exclusivity covers only the conditions of use associated with
the new clinical investigations and, as a general matter, does not prohibit the FDA from approving ANDAs or 505(b)(2)
NDAs for generic versions of the original, unmodified drug product. 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.
Orphan Drug Exclusivity
Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biological product intended to treat
a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the
United States, or more than 200,000 individuals in the United States and for which there is no reasonable expectation that
the cost of developing and making a drug or biological product available in the United States for this type of disease or
condition will be recovered from sales of the product. Orphan designation must be requested before submitting an NDA or
biologics license application. Orphan designation does not convey any advantage in or shorten the duration of the
regulatory review and approval process. We have received Orphan Drug designation for uproleselan and GMI-1359, as well
as for our prior drug candidate rivipansel, and we intend to seek Orphan Drug designation and exclusivity for our other
drug candidates whenever it is available.
If a product that has orphan designation subsequently receives the first FDA approval for such drug for the disease or
condition for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA
may not approve any other applications to market the same drug or biological product for the same indication for seven
years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan exclusivity.
Competitors, however, may receive approval of different products for the indication for which the orphan product has
exclusivity or obtain approval for the same product but for a different indication for which the orphan product has
exclusivity. If a drug or biological product designated as an orphan product receives marketing approval for an indication
broader than what is designated, it may not be entitled to orphan product exclusivity. Orphan drug status in the EU has
similar, but not identical, benefits.
Pediatric Exclusivity
Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides
for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity,
including the non-patent and orphan drug exclusivity periods described above. This six-month exclusivity may be granted
if an NDA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data. The data do
not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to
fairly respond to the FDA’s request, the additional protection is granted. If reports of requested pediatric studies are
submitted to and accepted by FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity
or Orange Book listed patent protection cover the drug are extended by six months. This is not a patent term extension, but
it effectively extends the regulatory period during which the FDA cannot approve an ANDA or 505(b)(2) application
owing to regulatory exclusivity or listed patents. If any of our drug candidates is approved, we anticipate seeking pediatric
exclusivity when it is appropriate.
Foreign Regulation
In order to market any product outside of the United States, we would need to comply with numerous and varying
regulatory requirements of other countries regarding safety and efficacy and governing, among other things, clinical trials,
marketing authorization, commercial sales and distribution of our drug candidates. For example, in the EU, we must obtain
authorization of a clinical trial application, or CTA, in each member state in which we intend to conduct a clinical trial.
Whether or not we obtain FDA approval for a drug, we would need to obtain the necessary approvals by the comparable
regulatory authorities of foreign countries before we can commence clinical trials or marketing of the drug in those
countries. The approval process varies from country to country and can involve additional product testing and additional
administrative review periods. The time required to obtain approval in other countries might differ from and be longer than
that required to obtain FDA approval. Regulatory approval in one country does not ensure regulatory
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approval in another, but a failure or delay in obtaining regulatory approval in one country may negatively impact the
regulatory process in others.
Employees and Human Capital Resources
As of December 31, 2021, we had 52 employees, all of whom are full-time and located in the United States. None of
our employees is represented by a labor union or covered by a collective bargaining agreement. We consider our
relationship with our employees to be good.
Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and
integrating our existing and new employees. The principal purposes of our equity incentive plans are to attract, retain and
reward high performing employees through the granting of equity-based compensation awards in order to increase
shareholder value and the success of our company by motivating employees to perform to the best of their abilities and
achieve our company objectives. We monitor our compensation, benefits, and exit interview data and make changes as
needed to enable the ongoing recruitment and selection of talented new employees, as well as to retain existing talent. Our
Core Values underpin our mission on how we build our drug development pipeline, and how we establish relationships with
employees, patients, healthcare providers, researchers and stakeholders.
Legal Proceedings
We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened
legal proceeding against us that we believe could have a material adverse effect on our business, operating results or
financial condition.
Corporate Information
We were incorporated under the laws of the State of Delaware in April 2003 and commenced operations in May
2003. Our principal executive offices are located at 9708 Medical Center Drive, Rockville, Maryland 20850. Our telephone
number is (240) 243-1201.
“GlycoMimetics,” the GlycoMimetics logo and other trademarks or service marks of GlycoMimetics, Inc. appearing
in this Annual Report are the property of GlycoMimetics, Inc. This Annual Report contains additional trade names,
trademarks and service marks of others, which are the property of their respective owners.
Available Information
Our internet website address is www.glycomimetics.com. In addition to the information contained in this Annual
Report, information about us can be found on our website. Our website and information included in or linked to our
website are not part of this Annual Report.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to
those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, are
available free of charge through our website as soon as reasonably practicable after they are electronically filed with or
furnished to the Securities and Exchange Commission, or SEC. Additionally the SEC maintains an internet site that
contains reports, proxy and information statements and other information. The address of the SEC’s website is
www.sec.gov.
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ITEM 1A. RISK FACTORS
Our business is subject to numerous risks. You should carefully consider the following risks, as well as general economic
and business risks, and all of the other information contained in this Annual Report, together with any other documents we
file with the SEC. Any of the following risks could have a material adverse effect on our business, operating results and
financial condition and cause the trading price of our common stock to decline.
Risks Related to Our Financial Position and Capital Needs
We have incurred significant losses since our inception. We expect to continue to incur losses over the next several
years and may never achieve or maintain profitability.
We have incurred significant losses since our inception in 2003 and, as of December 31, 2021, we had an
accumulated deficit of $372.9 million. In recent years, we have financed our operations with proceeds from registered
public offerings of our common stock and upfront and milestone payments under our license and collaboration agreements.
We have devoted substantially all of our financial resources and efforts to research and development, including
preclinical studies and clinical trials. We are still in the early stages of development of our drug candidates, and we have
not completed development of any drugs. We expect to continue to incur significant expenses and operating losses over the
next several years. Our net losses may fluctuate significantly from quarter to quarter and year to year. We anticipate that our
expenses will increase substantially and our negative cash flows from operating activities will continue over the next 12
months and beyond as we:
● conduct our ongoing clinical trials and initiate additional clinical trials of our drug candidates, including the
completion of our planned Phase 3 clinical trial of uproleselan;
● continue the research and preclinical development of our drug candidates;
● seek to discover and develop additional drug candidates;
● seek regulatory approvals for any drug candidates that successfully complete clinical trials;
● ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing
capabilities to commercialize any drugs for which we may obtain regulatory approval;
● maintain, expand and protect our intellectual property portfolio;
● hire additional clinical, quality control, regulatory and scientific personnel;
● add operational, financial and management information systems and personnel, including personnel to support
our drug development and planned future commercialization efforts; and
● incur legal, accounting, insurance and other expenses in operating as public company.
To become and remain profitable, we must succeed in developing and eventually commercializing drugs that
generate significant revenue. This will require us to be successful in a range of challenging activities, including completing
preclinical testing and clinical trials of our drug candidates, obtaining regulatory approval for these drug candidates and
manufacturing and commercializing any drugs for which we may obtain regulatory approval, as well as discovering
additional drug candidates. We are only in the preliminary stages of most of these activities. We may never succeed in these
activities and, even if we do, may never generate revenue that is significant enough to achieve profitability.
In the case of uproleselan and GMI-1687, our ability to generate revenue is partially dependent upon the achievement
of development, regulatory and commercial milestones and sales sufficient to generate royalties under our license
agreement with Apollomics, and the achievement of such milestones is largely out of our control. If Apollomics fails, or
chooses not to continue, to further develop, to seek regulatory approval for or to commercialize uproleselan in Greater
China, our ability to generate revenue with respect to uproleselan may be significantly reduced or eliminated.
Because of the numerous risks and uncertainties associated with drug development, we are unable to accurately
predict the timing or amount of increased expenses or when, or if, we will be able to achieve profitability. If we are
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required by regulatory authorities to perform studies in addition to those currently expected, or if there are any delays in
completing our clinical trials or the development of any of our drug candidates, our expenses could increase.
Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual
basis. Our failure to become and remain profitable would depress the value of our company and could impair our ability to
raise capital, expand our business, maintain our research and development efforts or even continue our operations. A
decline in the value of our company could also result in significant harm to our financial position and adversely affect our
stock price.
We will need substantial additional funding to pursue our business objectives. If we are unable to raise capital
when needed, we may not be able to continue as a going concern and could be forced to delay, reduce or eliminate our
drug development programs or potential commercialization efforts.
We believe that our cash and cash equivalents as of December 31, 2021 will enable us to fund our operating expenses
and capital expenditure requirements into the second quarter of 2023. However, we will need to obtain substantial
additional funding in connection with our continuing operations. Our future capital requirements will depend on many
factors, including:
● the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials for our
drug candidates;
● the number and development requirements of other drug candidates that we may pursue;
● the costs, timing and outcome of regulatory review of our drug candidates;
● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales
and distribution, for any of our drug candidates for which we receive marketing approval;
● the revenue, if any, received from commercial sales of our drug candidates for which we receive marketing
approval;
● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our
intellectual property rights and defending any intellectual property-related claims; and
● the extent to which we acquire or in-license other drug candidates and technologies.
Our management must periodically evaluate whether there are conditions or events, considered in the aggregate, that
raise substantial doubt about our ability to continue as a going concern. Based on our current cash position, our ongoing
significant operating losses and the fact that we do not have any committed sources of revenue or cash flows other than
potential payments from our license and collaboration agreements, management believes that, given our current cash
position, there is substantial doubt about our ability to continue as a going concern beyond the date that is one year from the
date that the financial statements included in this Annual Report were issued.
Identifying potential drug candidates and conducting preclinical testing and clinical trials is a time-consuming,
expensive and uncertain process that takes years to complete, and we or any current or future collaborators may never
generate the necessary data or results required to obtain regulatory approval and achieve product sales. In addition, our
drug candidates, if approved, may not achieve commercial success. Our commercial revenue, if any, will be derived from
the sale of drugs that we do not expect to be commercially available for several years, if at all. Accordingly, our ability to
fund our operations is dependent upon management’s plans, which include raising additional capital in the near term
primarily through a combination of equity and debt financings, collaborations and strategic alliances. There can be no
assurances that new financings or other transactions will be available to us on commercially acceptable terms, or at all. Our
ability to raise additional capital may also be adversely impacted by global economic conditions and disruptions to and
volatility in the credit and financial markets in the United States and worldwide resulting from the ongoing COVID-19
pandemic. If we are unable to raise capital to fund our operations when needed or on attractive terms, we could be forced to
delay, reduce the scope of or eliminate our research and development programs or any future commercialization efforts,
which would have a material adverse effect on our business, financial condition, results of operations and ability to operate
as a going concern.
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Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to
relinquish rights to our drug candidates.
Until such time, if ever, as we can generate substantial revenue from the sale of our drugs, we expect to finance our
cash needs through a combination of equity offerings, debt financings and license and development agreements. We do not
currently have any committed external source of funds other than possible milestone payments and possible royalties under
our license agreement with Apollomics. 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 these securities may include liquidation
or other preferences that could adversely affect your rights as a common stockholder. Debt financing and preferred equity
financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific
actions, such as incurring additional debt, making capital expenditures or declaring dividends.
If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing
arrangements with third parties, we may be required to relinquish valuable rights to our research programs or drug
candidates or grant licenses on terms that may not be favorable to us or that may be at less than the full potential value of
such rights. If we are unable to raise additional funds through equity or debt financings or other arrangements with third
parties when needed, we may be required to delay, limit, reduce or terminate our drug development or future
commercialization efforts or grant rights to third parties to develop and market drug candidates that we would otherwise
prefer to develop and market ourselves.
Our operating history may make it difficult for you to evaluate the success of our business to date and to assess
our future viability.
We commenced operations in 2003, and our operations to date have been largely focused on raising capital,
developing our expertise in carbohydrate chemistry and knowledge of carbohydrate biology, identifying potential drug
candidates, undertaking preclinical studies and conducting clinical trials. We have not yet demonstrated our ability to
successfully complete later stage clinical trials, obtain regulatory approvals, manufacture a commercial scale drug, or
arrange for a third party to do so on our behalf, or conduct sales and marketing activities necessary for successful
commercialization.
We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in
achieving our business objectives. We will need to transition at some point from a company with a research and
development focus to a company capable of supporting commercial activities. We may not be successful in such a
transition.
We expect our financial condition and operating results to continue to fluctuate significantly from quarter to quarter
and year to year due to a variety of factors, many of which are beyond our control. Accordingly, you should not rely upon
the results of any quarterly or annual periods as indications of future operating performance
Our ability to use net operating losses to offset future taxable income may be subject to limitations.
As of December 31, 2021, we had federal and state net operating loss carryforwards of $290.0 million, research and
development tax credit carryforwards of $10.3 million and $37.7 million of orphan drug tax credit carryforwards. The
federal and state net operating loss carryforwards will begin to expire, if not utilized, beginning in 2026, the research and
development tax credits in 2023 and the orphan drug tax credit in 2033. These net operating loss and tax credit
carryforwards could expire unused and be unavailable to offset future income tax liabilities. Under federal income tax laws,
federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of
such federal net operating losses is limited. In addition, under Section 382 of the Internal Revenue Code of 1986, as
amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally
defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to
use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or
taxes may be limited. We could experience ownership changes in the future that would limit our ability to use our net
operating loss carryforwards.
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Risks Related to the Discovery and Development of Our Drug Candidates
Our research and development is focused on discovering and developing novel glycomimetic drugs, and we are
taking an innovative approach to discovering and developing drugs, which may never lead to marketable drugs.
A key element of our strategy is to use and expand our platform to build a pipeline of novel glycomimetic drug
candidates and progress these drug candidates through clinical development for the treatment of a variety of diseases. The
discovery of therapeutic drugs based on molecules that mimic the structure of carbohydrates is an emerging field, and the
scientific discoveries that form the basis for our efforts to discover and develop drug candidates are relatively new. The
scientific evidence to support the feasibility of developing drug candidates based on these discoveries is both preliminary
and limited. Although our research and development efforts to date have resulted in a pipeline of glycomimetic drug
candidates, we may not be able to develop drug candidates that are safe and effective. Even if we are successful in
continuing to build our pipeline, the potential drug candidates that we identify may not be suitable for clinical development,
including as a result of being shown to have harmful side effects or other characteristics that indicate that they are unlikely
to be drugs that will receive marketing approval and achieve market acceptance. If we do not successfully develop and
commercialize drug candidates based upon our glycomimetics platform, we will not be able to obtain product revenue in
future periods, which likely would result in significant harm to our financial position and adversely affect our stock price.
We have only one drug candidate in a late-stage clinical trial. All of our other drug candidates are still in Phase 1
clinical trials or in preclinical development. If we or our collaborators are unable to commercialize our drug candidates
or experience significant delays in doing so, our business will be materially harmed.
Uproleselan is our only drug candidate that is in a Phase 2 or Phase 3 clinical trial. Our other drug candidates are still
in Phase 1 clinical trials or in preclinical development. We have not completed the development of any drug candidates, we
currently generate no revenue from the sale of any drugs and we may never be able to develop a marketable drug. We have
invested substantially all of our efforts and financial resources in the development of our glycomimetics platform, the
identification of potential drug candidates using that platform and the development of our drug candidates. Our ability to
generate revenue from our other drug candidates, which we do not expect to occur for many years, if ever, will depend
heavily on their successful development and eventual commercialization. The success of those drug candidates will depend
on several factors, including:
● successful completion of preclinical studies and clinical trials;
● receipt of marketing approvals from applicable regulatory authorities;
● obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our drug candidates;
● making arrangements with third-party manufacturers for, or establishing, commercial manufacturing
capabilities;
● launching commercial sales of the drugs, if and when approved, whether alone or in collaboration with others;
● acceptance of the drugs, if and when approved, by patients, the medical community and third-party payors;
● effectively competing with other therapies;
● obtaining and maintaining healthcare coverage and adequate reimbursement;
● protecting our rights in our intellectual property portfolio; and
● maintaining a continued acceptable safety profile of the drugs following approval.
If we do not achieve one or more of these factors in a timely manner or at all, we could experience significant delays
or an inability to successfully commercialize our drug candidates, which would materially harm our business.
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Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. We may incur
additional costs or experience delays in completing, or ultimately be unable to complete, the development and
commercialization of our drug candidates.
The risk of failure of our drug candidates is high. It is impossible to predict when or if any of our drug candidates
will prove safe or effective in humans or will receive regulatory approval. Before obtaining marketing approval from
regulatory authorities for the sale of any drug candidate, we or a collaborator must complete preclinical development and
then conduct extensive clinical trials to demonstrate the safety and efficacy of the drug candidate 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 development. The outcome of preclinical testing and early
clinical trials may not be predictive of the success of later clinical trials, and interim results of a clinical trial do not
necessarily predict final results. In addition, changes in patient treatment options over time may make the relevance of
historical control data for a given indication less relevant to the drug candidate being studied, which could impact the
success of the trial or, even if successful, the desirability of a successful drug candidate versus other available treatment
options. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many
companies that have believed their drug candidates performed satisfactorily in preclinical studies and clinical trials have
nonetheless failed to obtain marketing approval of their drugs.
We or our current or future collaborators may experience numerous unforeseen events during, or as a result of,
clinical trials that could delay or prevent our or their ability to receive marketing approval or commercialize our drug
candidates, including:
● regulators or institutional review boards may not authorize us or our investigators to commence a clinical trial or
conduct a clinical trial at a prospective trial site;
● we may experience delays in reaching, or fail to reach, agreement on acceptable clinical trial contracts or
clinical trial protocols with prospective trial sites;
● clinical trials of our drug candidates may produce negative or inconclusive results, including failure to
demonstrate statistical significance, and we may decide, or regulators may require us, to conduct additional
clinical trials or abandon drug development programs;
● the number of patients required for clinical trials of our drug candidates may be larger than we anticipate,
enrollment in these clinical trials may be slower than we anticipate or participants may drop out of these clinical
trials at a higher rate than we anticipate;
● our third-party contractors may fail to comply with regulatory requirements or meet their contractual obligations
to us in a timely manner, or at all;
● regulators or institutional review boards may require that we or our investigators suspend or terminate clinical
research for various reasons, including noncompliance with regulatory requirements or a finding that the
participants are being exposed to unacceptable health risks;
● the cost of clinical trials of our drug candidates may be greater than we anticipate;
● the supply or quality of our drug candidates or other materials necessary to conduct clinical trials of our drug
candidates may be insufficient or inadequate; and
● our drug candidates may have undesirable side effects or other unexpected characteristics, causing us or our
investigators, regulators or institutional review boards to suspend or terminate the trials.
If we are required to conduct additional clinical trials or other testing of our drug candidates beyond those that we
currently contemplate, if we are unable to successfully complete clinical trials of our drug candidates or other testing, if the
results of these clinical trials or tests are not positive or are only modestly positive or if there are safety concerns, we may:
● be delayed in obtaining marketing approval for our drug candidates;
● not obtain marketing approval at all;
● obtain approval for indications or patient populations that are not as broad as intended or desired;
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● obtain approval with labeling that includes significant use or distribution restrictions or safety warnings;
● be subject to additional post-marketing testing requirements; or
● have the drug removed from the market after obtaining marketing approval.
Our drug development costs will also increase if we experience delays in testing or marketing approvals. We do not
know whether any of our preclinical studies or clinical trials will begin as planned, will need to be restructured or will be
completed on schedule, or at all. Significant preclinical study or clinical trial delays also could shorten any periods during
which we may have the exclusive right to commercialize our drug candidates or allow our competitors to bring drugs to
market before we do, and thereby impair our ability to successfully commercialize our drug candidates.
Our business could be adversely affected by the effects of health epidemics or pandemics, including the ongoing
COVID-19 pandemic, in regions where we or third parties on whom we rely have significant manufacturing facilities,
clinical trial sites or other business operations.
Our business could be adversely affected by health epidemics or pandemics in regions where we have concentrations
of clinical trial sites or other business operations, and could cause significant disruption in the operations of third-party
collaborators, manufacturers and CROs upon whom we rely.
In response to the ongoing COVID-19 pandemic, in 2020 we implemented a work-from-home policy for most of our
employees, and we have recently adopted a hybrid home-office work policy. The effects of our policy may negatively
impact productivity, disrupt our business and delay our clinical programs and timelines, the magnitude of which will
depend, in part, on the length and severity of the restrictions and other limitations on our ability to conduct our business in
the ordinary course. These and similar, and perhaps more severe, disruptions in our operations could negatively impact our
business, operating results and financial condition.
Quarantines, shelter-in-place, stay-at-home, executive and similar government orders—or the perception that such
orders, shutdowns or other restrictions on the conduct of business operations could occur—related to COVID-19 or other
infectious diseases, could impact personnel at third-party manufacturing facilities in the United States and other countries,
or the availability or cost of materials, which would disrupt our supply chain. For example, any manufacturing supply
interruption of uproleselan, which is currently manufactured at facilities in Switzerland and China, could adversely affect
our ability to conduct ongoing and future clinical trials of uproleselan.
In addition, our clinical trials may be affected by the COVID-19 pandemic due to prioritization of hospital resources
toward the COVID-19 pandemic. Some patients may not be able to comply with clinical trial protocols if quarantines
impede patient movement or interrupt healthcare services. Similarly, the pandemic may impact our ability to recruit and
retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to
COVID-19 and adversely impact our clinical trial operations.
The spread of COVID-19, which has caused a broad impact globally, may materially affect us economically. While
the potential economic impact brought by, and the duration of, the COVID-19 pandemic may be difficult to assess or
predict, a further prolonged pandemic could result in significant disruption of global financial markets, reducing our ability
to access capital, which could in the future negatively affect our liquidity.
The global pandemic of COVID-19 continues to rapidly evolve. The ultimate impact of the COVID-19 pandemic or
a similar health epidemic is highly uncertain and subject to change. We do not yet know the full extent of potential delays
or impacts on our business, our clinical trials, healthcare systems or the global economy as a whole. However, these effects
could have a material impact on our operations, and we will continue to monitor the situation closely.
If serious adverse or unacceptable side effects are identified during the development of our drug candidates, we
may need to abandon or limit the development of some of our drug candidates.
If our drug candidates are associated with undesirable side effects in clinical trials or have characteristics that are
unexpected, we may need to abandon their development or limit their development to more narrow uses or subpopulations
in which the undesirable side effects or other characteristics are less prevalent, less severe or more acceptable from a risk-
benefit perspective. Many drug candidates that initially showed promise in early stage testing have later been found to
cause side effects that prevented their further development.
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We may expend our limited resources to pursue a particular drug candidate or indication and fail to capitalize on
drug candidates or indications that may be more profitable or for which there is a greater likelihood of success.
Because we have limited financial and management resources, we focus on a limited number of research programs
and drug candidates. As a result, we may forego or delay pursuit of opportunities with other drug candidates or for other
indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to
capitalize on viable commercial drugs or profitable market opportunities. Our spending on current and future research and
development programs and drug candidates for specific indications may not yield any commercially viable drugs. If we do
not accurately evaluate the commercial potential or target market for a particular drug candidate, we may relinquish
valuable rights to that drug candidate through collaboration, licensing or other arrangements in cases in which it would
have been more advantageous for us to retain sole development and commercialization rights.
Risks Related to Our Dependence on Third Parties
Our success depends in part on current and future collaborations. If we are unable to maintain any of these
collaborations, or if these collaborations are not successful, our business could be adversely affected.
We have limited capabilities for drug development and do not yet have any capabilities for sales, marketing or distribution.
We cannot assure you that our current or future collaborators will develop our drug candidates in a timely manner, or at all,
or, if regulatory approval for a drug candidate is achieved, that such collaborator will successfully commercialize the
candidate.
Any collaborations we might enter into may pose a number of risks, including:
● collaborators have significant discretion in determining the efforts and resources that they will apply to these
collaborations;
● collaborators may not perform their obligations as expected;
● collaborators may not pursue the commercialization of any drug candidates that achieve regulatory approval or
may elect not to pursue, continue or renew development or commercialization of drug candidates based on
clinical trial results, changes in such collaborators’ strategic focus or available funding or external factors, such
as an acquisition, that divert resources or create competing priorities;
● collaborators may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical
trial or abandon a drug candidate, repeat or conduct new clinical trials or require a new formulation of a drug
candidate for clinical testing;
● collaborators could experience delays in initiating or conducting clinical trials for any number of reasons;
● collaborators could independently develop, or develop with third parties, drugs that compete directly or
indirectly with our drugs or drug candidates if such collaborators believe that competitive products are more
likely to be successfully developed or can be commercialized under terms that are more economically attractive
than ours;
● drug candidates discovered in collaboration with us may be viewed by our collaborators as competitive with
their own drug candidates or drugs, which may cause such collaborators to cease to devote resources to the
commercialization of our drug candidates;
● a collaborator with marketing and distribution rights to one or more of our drug candidates that achieve
regulatory approval may not commit sufficient resources to the marketing and distribution of such drug or drugs;
● disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the
preferred course of development, might cause delays or termination of the research, development or
commercialization of drug candidates, might lead to additional responsibilities for us with respect to drug
candidates or might result in litigation or arbitration, any of which would be time consuming and expensive;
● collaborators may not properly maintain or defend our or their intellectual property rights or may use our or their
proprietary information in such a way as to invite litigation that could jeopardize or invalidate such intellectual
property or proprietary information or expose us to potential litigation;
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● collaborators may infringe the intellectual property rights of third parties, which may expose us to litigation and
potential liability; and
● collaborations may be terminated for the convenience of the collaborator and, if terminated, we could be
required to raise additional capital to pursue further development or commercialization of the applicable drug
candidates.
If any collaborations we might enter into do not result in the successful development and commercialization of drugs,
or if one of our collaborators terminates its agreement with us, we may not receive any future research funding or milestone
or royalty payments under the collaboration. For example, in February 2020, Pfizer terminated its license agreement with
us for the worldwide development and commercialization of our prior drug candidate rivipansel, thereby eliminating our
right to receive any future development or commercialization milestones or royalty payments for sales of that drug
candidate. In addition, even if we are eligible to receive any such payments from a collaborator, they could be substantially
delayed. If we do not receive the funding we expect under these agreements, the development of our drug candidates could
be delayed and we may need additional resources to develop our drug candidates. All of the risks relating to drug
development, regulatory approval and commercialization described in this report also apply to the activities of our
collaborators.
If a current or future collaborator of ours is involved in a business combination, the collaborator might deemphasize
or terminate development or commercialization of any drug candidate licensed to it by us. If one of our collaborators
terminates its agreement with us, we may find it more difficult to attract new collaborators and our reputation in the
business and financial communities could be adversely affected. We may in the future determine to collaborate with
pharmaceutical and biotechnology companies for their development and potential commercialization of our drug
candidates. We face significant competition in seeking appropriate collaborators. Our ability to reach a definitive agreement
for a collaboration will depend, among other things, upon our assessment of a collaborator’s resources and expertise, the
terms and conditions of the proposed collaboration and the proposed collaborator’s evaluation of a number of factors. If we
are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to
curtail the development of a drug candidate, reduce or delay its development or one or more of our other development
programs, delay its potential commercialization or reduce the scope of any sales or marketing activities or increase our
expenditures and undertake development or commercialization activities at our own expense. If we elect to fund and
undertake development or commercialization activities on our own, we may need to obtain additional expertise and
additional capital, which may not be available to us on acceptable terms or at all. If we fail to enter into collaborations and
do not have sufficient funds or expertise to undertake the necessary development and commercialization activities, we may
not be able to further develop our drug candidates or bring them to market, which would impair our business prospects.
We expect to rely on third parties to conduct our future clinical trials for drug candidates, and those third parties
may not perform satisfactorily, including failing to meet deadlines for the completion of such trials.
We have engaged a third-party contract research organization, or CRO, to conduct our ongoing and planned clinical
trials for uproleselan and expect to engage CROs with respect to any of our other drug candidates that may progress to
clinical development. We expect to continue to rely on third parties, such as CROs, clinical data management
organizations, medical institutions and clinical investigators, to conduct those clinical trials. Agreements with such third
parties might terminate for a variety of reasons, including a failure to perform by the third parties. If we need to enter into
alternative arrangements, that would delay our drug development activities.
Our reliance on these third parties for research and development activities will reduce our control over these
activities, but will not relieve us of our responsibilities. For example, we will remain responsible for ensuring that each of
our clinical trials is conducted in accordance with the general investigational plan and protocols for the trial. Moreover, the
FDA requires us to comply with standards, commonly referred to as good clinical practices, or GCPs, for conducting,
recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that
the rights, integrity and confidentiality of trial participants are protected. We also are required to register ongoing clinical
trials and post the results of completed clinical trials on a government-sponsored database, ClinicalTrials.gov, within
specified timeframes. Failure to do so can result in fines, adverse publicity and significant civil and criminal sanctions.
Furthermore, these third parties may also have relationships with other entities, some of which may be our
competitors. If these third parties do not successfully carry out their contractual duties, meet expected deadlines or
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conduct our clinical trials in accordance with regulatory requirements or our stated protocols, we will not be able to obtain,
or may be delayed in obtaining, marketing approvals for our drug candidates and will not be able to, or may be delayed in
our efforts to, successfully commercialize our drug candidates.
We also expect to rely on other third parties to store and distribute drug supplies for our clinical trials. Any
performance failure on the part of our distributors could delay clinical development or marketing approval of our drug
candidates or commercialization of our drugs, producing additional losses and depriving us of potential revenue.
We contract with third parties for the manufacturing of our drug candidates for preclinical and clinical testing
and expect to continue to do so for commercialization. This reliance on third parties increases the risk that we will not
have sufficient quantities of our drug candidates or drugs, or such quantities at an acceptable cost, which could delay,
prevent or impair our development or commercialization efforts.
We do not have any manufacturing facilities or personnel. We rely, and expect to continue to rely, on third parties for
the manufacturing of our drug candidates for preclinical and clinical testing, as well as for commercial manufacture if any
of our drug candidates receives marketing approval. Disruption to our supply arrangements may arise from unforeseeable
events that impact such third parties, including the ongoing COVID-19 pandemic. Our reliance on third parties increases
the risk that we will not have sufficient quantities of our drug candidates or drugs, or such quantities at an acceptable cost
or quality, which could delay, prevent or impair our ability to timely conduct our clinical trials or our other development or
commercialization efforts.
We also expect to rely on third-party manufacturers or third-party collaborators for the manufacturing of commercial
supply of any other drug candidates for which we or our collaborators obtain marketing approval. We may be unable to
establish any agreements with third-party manufacturers or to do so on acceptable terms. Even if we are able to establish
agreements with third-party manufacturers, reliance on third-party manufacturers entails additional risks, including:
● reliance on the third party for regulatory compliance and quality assurance;
● the possible breach of the manufacturing agreement by the third party;
● the possible misappropriation of our proprietary information, including our trade secrets and know-how; and
● the possible termination or non-renewal of the agreement by the third party at a time that is costly or
inconvenient for us.
Third-party manufacturers may not be able to comply with current good manufacturing practices, or cGMP,
regulations or similar regulatory requirements outside the United States. Our failure, or the failure of our third-party
manufacturers, to comply with applicable regulations could result in sanctions being imposed on us, including clinical
holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or
recalls of drug candidates or drugs, operating restrictions and criminal prosecutions, any of which could significantly and
adversely affect supplies of our drugs.
In addition, in the event that any of our third-party manufacturers fails to comply with such requirements or to
perform its obligations to us in relation to quality, timing or otherwise, or if our supply of components or other materials
becomes limited or interrupted for other reasons, we may be forced to manufacture the materials ourselves, for which we
currently do not have the capabilities or resources, or enter into an agreement with another third party, which we may not
be able to do on commercially reasonable terms, if at all. We do not currently have arrangements in place for redundant
supply or a second source for bulk drug substance. If our current contract manufacturers cannot perform as agreed, we may
be required to replace such manufacturers and we may incur added costs and delays in identifying and qualifying any such
replacement. Any replacement of our manufacturers could require significant effort and expertise because there may be a
limited number of qualified replacements. If we are required to change manufacturers for any reason, we will be required to
verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all
applicable regulations and guidelines. The delays associated with the verification of a new manufacturer could negatively
affect our ability to develop our drug candidates in a timely manner or within budget.
Our current and anticipated future dependence upon others for the manufacturing of our drug candidates or drugs
may adversely affect our future profit margins and our ability to commercialize any drugs that receive marketing approval
on a timely and competitive basis.
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We, or our third-party manufacturers, may be unable to successfully scale-up manufacturing of our drug
candidates in sufficient quality and quantity, which would delay or prevent us from conducting our ongoing and
planned clinical trials and developing our drug candidates.
In order to conduct our ongoing and planned clinical trials of our drug candidates, we will need to manufacture them
in large quantities. We, or our manufacturing partners, may be unable to successfully increase the manufacturing capacity
for any of our drug candidates in a timely or cost-effective manner, or at all. In addition, quality issues may arise during
scale-up activities. If we or our manufacturing partners are unable to successfully scale up the manufacture of our drug
candidates in sufficient quality and quantity, the development, testing and clinical trials of that drug candidate may be
delayed or become infeasible, and marketing approval or commercial launch of any resulting drug may be delayed or not
obtained, which could significantly harm our business.
Risks Related to the Commercialization of Our Drug Candidates
Even if any of our drug candidates receives marketing approval, it may fail to achieve the degree of market
acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial
success.
If any of our drug candidates receives marketing approval, it may nonetheless fail to gain sufficient market
acceptance by physicians, patients, third-party payors and others in the medical community. If our drug candidates do not
achieve an adequate level of acceptance, we may not generate significant revenue from drug sales and we may not become
profitable. The degree of market acceptance of our drug candidates, if approved for commercial sale, will depend on a
number of factors, including:
● the efficacy and potential advantages compared to alternative treatments;
● our ability to offer our drugs for sale at competitive prices;
● the convenience and ease of administration compared to alternative treatments;
● the willingness of the target patient population to try new therapies and of physicians to prescribe these
therapies;
● the strength of marketing and distribution support;
● the availability of third-party coverage and adequate reimbursement;
● the prevalence and severity of any side effects; and
● any restrictions on the use of our drugs together with other medications.
If we are unable to establish sales, marketing and distribution capabilities for our drug candidates, we may not be
successful in commercializing those drug candidates if and when they are approved.
We do not have a sales or marketing infrastructure and have no experience in the sale, marketing or distribution of
pharmaceutical drugs. To achieve commercial success for any drug candidate for which we may obtain marketing approval,
we will need to establish a sales and marketing organization to market or co-promote such drugs. There are risks involved
with establishing our own sales, marketing and distribution capabilities. For example, recruiting and training a sales force is
expensive and time consuming and could delay any product launch. If the commercial launch of a drug candidate for which
we recruit a sales force and establish marketing capabilities is delayed or does not occur for any reason, we would have
prematurely or unnecessarily incurred these commercialization expenses. This may be costly, and our investment would be
lost if we cannot retain or reposition our sales and marketing personnel.
Factors that may inhibit our efforts to commercialize our drugs on our own include:
● our inability to recruit, train and retain adequate numbers of effective sales and marketing personnel;
● the inability of sales personnel to obtain access to physicians or persuade adequate numbers of physicians to
prescribe any future drugs;
● the lack of complementary drugs to be offered by sales personnel, which may put us at a competitive
disadvantage relative to companies with more products; and
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● unforeseen costs and expenses associated with creating an independent sales and marketing organization.
If we are unable to establish our own sales, marketing and distribution capabilities and enter into arrangements with
third parties to perform these services, our revenue and our profitability, if any, are likely to be lower than if we were to
sell, market and distribute any drugs that we develop ourselves. In addition, we may not be successful in entering into
arrangements with third parties to sell, market and distribute our drug candidates 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 drugs 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 drug candidates.
We face substantial competition, which may result in others discovering, developing or commercializing drugs
before or more successfully than we do.
The development and commercialization of new drugs is highly competitive. We face competition with respect to our
current drug candidates, and we will face competition with respect to any drug candidates that we may seek to develop or
commercialize in the future, from major pharmaceutical companies, specialty pharmaceutical companies, biotechnology
companies, academic institutions, governmental agencies and public and private research institutions. Should any
competitors’ drug candidates receive regulatory or marketing approval prior to ours, they may establish a strong market
position and be difficult to displace or diminish the need for our drug candidates.
The key competitive factors affecting the success of all of our drug candidates, if approved, are likely to be their
safety, efficacy, convenience, price, the level of generic competition and the availability of coverage and reimbursement
from government and other third-party payors. As described above under “Business—Competition,” we expect that our
drug candidates will compete with approved therapies and those currently in development by other companies. To the
extent that competitive drugs or drug candidates developed by others are successful in treating our target indications, it
could reduce the market opportunity for our drug candidates.
Many of the companies against which we are competing, or against which we may compete in the future, have
significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing,
conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do. Mergers and
acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated
among a smaller number of our competitors. Smaller or early stage companies may also prove to be significant
competitors, particularly through collaborative arrangements with large and established companies. These competitors also
compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial
sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our
programs.
Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize drugs that
are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any drugs
that we may develop. Our competitors also may obtain FDA or other regulatory approval for their drugs more rapidly than
we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are
able to enter the market.
In addition, because we have no patents with respect to our glycomimetics platform, our competitors may use our
methods, or acquire similar expertise, in order to develop glycomimetic drug candidates and progress these drug candidates
through clinical development and commercialization, which could impair our ability to successfully commercialize our
drug candidates or otherwise limit our commercial opportunities.
Even if we or our collaborators are able to commercialize any of our drug candidates, the drugs may become
subject to unfavorable pricing regulations or third-party coverage and reimbursement policies.
Our and our collaborators’ ability to commercialize any of our drug candidates successfully will depend, in part, on
the extent to which coverage and adequate reimbursement for these drugs and related treatments will be available from
government payor programs at the federal and state levels authorities, including Medicare and Medicaid, private health
insurers, managed care plans and other organizations. Government authorities and third-party payors, such as private health
insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement
levels. A primary trend in the U.S. healthcare industry and elsewhere is cost containment. Government authorities and
third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement
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for particular medications. Increasingly, third-party payors are requiring that drug companies provide them with
predetermined discounts from list prices and are challenging the prices charged for drugs. Coverage and reimbursement
may not be available for any drug that we or our collaborators commercialize and, even if these are available, the level of
reimbursement may not be satisfactory. Inadequate reimbursement levels may adversely affect the demand for, or the price
of, any drug candidate for which we or our collaborators obtain marketing approval. Obtaining and maintaining adequate
reimbursement for our drugs may be difficult. We may be required to conduct expensive pharmacoeconomic studies to
justify coverage and reimbursement or the level of reimbursement relative to other therapies. If coverage and adequate
reimbursement are not available or reimbursement is available only to limited levels, we or our collaborators may not be
able to successfully commercialize any drug candidates for which marketing approval is obtained.
There may be significant delays in obtaining coverage and reimbursement for newly approved drugs, and coverage
may be more limited than the indications for which the drug is approved by the FDA or similar regulatory authorities
outside the United States. Moreover, eligibility for coverage and reimbursement does not imply that a drug will be paid for
in all cases or at a rate that covers our costs, including research, development, manufacture, sale and distribution expenses.
Interim reimbursement levels for new drugs, if applicable, may also not be sufficient to cover our costs and may not be
made permanent. Reimbursement rates may vary according to the use of the drug and the clinical setting in which it is used,
may be based on reimbursement levels already set for lower cost drugs and may be incorporated into existing payments for
other services. Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare
programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries
where they may be sold at lower prices than in the United States. Third-party payors often rely upon Medicare coverage
policy and payment limitations in setting their own reimbursement policies. However, one payor’s determination to provide
coverage for a drug does not assure that other payors will also provide coverage for the drug. Our or our collaborators’
inability to promptly obtain coverage and adequate reimbursement rates from both government-funded and private payors
for any approved drugs that we develop could adversely affect our operating results, our ability to raise capital needed to
commercialize drugs and our overall financial condition.
The regulations that govern marketing approvals, pricing, coverage and reimbursement for new drugs vary widely
from country to country. Current and future legislation may significantly change the approval requirements in ways that
could involve additional costs and cause delays in obtaining approvals. Some countries require approval of the sale price of
a drug before it can be marketed. In many countries, the pricing review period begins after marketing or licensing approval
is granted. In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental
control even after initial approval is granted. As a result, we or our collaborators might obtain marketing approval for a
drug in a particular country, but then be subject to price regulations that delay commercial launch of the drug, possibly for
lengthy time periods, and negatively impact our ability to generate revenue from the sale of the drug in that country.
Adverse pricing limitations may hinder our ability to recoup our investment in one or more drug candidates, even if our
drug candidates obtain marketing approval.
There can be no assurance that our drug candidates, if they are approved for sale in the United States or in other
countries, will be considered medically reasonable and necessary for a specific indication, that they will be considered cost-
effective by third-party payors, that coverage or an adequate level of reimbursement will be available or that third-party
payors’ reimbursement policies will not adversely affect our ability to sell our drug candidates profitably if they are
approved for sale.
Product liability lawsuits against us could cause us to incur substantial liabilities and to limit commercialization
of any drugs that we may develop.
We face an inherent risk of product liability exposure related to the testing of our drug candidates in human clinical
trials, and will face an even greater risk if we commercially sell any drugs that we may develop. If we cannot successfully
defend ourselves against claims that our drug candidates or drugs caused injuries, we will incur substantial liabilities.
Regardless of merit or eventual outcome, liability claims may result in:
● decreased demand for any drug candidates or drugs that we may develop;
● injury to our reputation and significant negative media attention;
● withdrawal of clinical trial participants;
● significant costs to defend the related litigation;
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● substantial monetary awards paid to trial participants or patients;
● loss of revenue;
● reduced resources of our management to pursue our business strategy; and
● the inability to commercialize any drugs that we may develop.
We carry clinical trial insurance coverage in an amount that we believe is sufficient in relation to our clinical trials
being conducted in the United States and in foreign countries where we have or plan to have sites as part of our clinical
trials for uproleselan. The use of our drug candidates in clinical trials may result in liability claims for which our current
insurance would not be adequate to cover all liabilities that we may incur. In addition, we may need to increase our
insurance coverage as we expand our clinical trials or if we commence commercialization of our drug candidates.
Insurance coverage is increasingly expensive. We may not be able to maintain insurance coverage at a reasonable cost or in
an amount adequate to satisfy any liability that may arise.
Risks Related to Our Intellectual Property
If we are unable to obtain and maintain patent protection for our drug candidates, or if the scope of the patent
protection obtained is not sufficiently broad, our competitors could develop and commercialize drug candidates similar
or identical to ours, and our ability to successfully commercialize our drug candidates may be impaired.
Our success depends in large part on our ability to obtain and maintain patent protection in the United States and
other countries with respect to our drug candidates. We seek to protect our proprietary position by filing patent applications
in the United States and abroad related to our drug candidates.
The patent prosecution process is expensive and time consuming, and we may not be able to file and prosecute all
necessary or desirable patent applications at a reasonable cost or in a timely manner. It is also possible that we will fail to
identify patentable aspects of our research and development output before it is too late to obtain patent protection. We may
not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the rights to
patents licensed to third parties. Therefore, these patents and applications may not be prosecuted and enforced in a manner
consistent with the best interests of our business.
The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex
legal and factual questions and has in recent years been the subject of much litigation. In addition, the laws of foreign
countries may not protect our rights to the same extent as the laws of the United States, or vice versa. For example,
European patent law restricts the patentability of methods of treatment of the human body more than U.S. law does.
Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the
United States and other jurisdictions are typically not published until 18 months after filing or, in some cases, not at all.
Therefore, we cannot know with certainty whether we were the first to make the inventions claimed in our patents or
pending patent applications, or that we were the first to file for patent protection of such inventions. As a result, the
issuance, scope, validity, enforceability and commercial value of our patent rights are highly uncertain. Our pending and
future patent applications may not result in patents being issued that protect our drug candidates, in whole or in part, or
which effectively prevent others from commercializing competitive drug candidates. Changes in either the patent laws or
interpretation of the patent laws in the United States and other countries may diminish the value of our patents or narrow
the scope of our patent protection.
Recent patent reform legislation could increase the uncertainties and costs surrounding the prosecution of our patent
applications and the enforcement or defense of our issued patents. On September 16, 2011, the Leahy-Smith America
Invents Act, or the Leahy-Smith Act, was signed into law. The Leahy-Smith Act includes a number of significant changes
to U.S. patent law. These include provisions that affect the way patent applications are prosecuted and may also affect
patent litigation. The U.S. Patent and Trademark Office recently developed new regulations and procedures to govern
administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith
Act, and in particular, the first to file provisions, became effective on March 16, 2013. Accordingly, it is not clear what, if
any, impact the Leahy-Smith Act will have on the operation of our business. However, the Leahy-Smith Act and its
implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the
enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and
financial condition.
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Moreover, we may be subject to a third-party preissuance submission of prior art to the U.S. Patent and Trademark
Office, or become involved in opposition, derivation, reexamination, inter partes review, post-grant review or interference
proceedings challenging our patent rights or the patent rights of others. An adverse determination in any such submission,
proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our
drug candidates and compete directly with us, without payment to us, or result in our inability to manufacture or
commercialize drugs without infringing third-party patent rights. In addition, if the breadth or strength of protection
provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to
license, develop or commercialize current or future drug candidates.
Even if our patent applications issue as patents, they may not issue in a form that will provide us with any meaningful
protection, prevent competitors from competing with us or otherwise provide us with any competitive advantage. Our
competitors may be able to circumvent our patents by developing similar or alternative drug candidates in a non-infringing
manner.
In addition, the issuance of a patent is not conclusive as to its inventorship, scope, validity or enforceability, and our
patents may be challenged in the courts or patent offices in the United States and abroad. Such challenges may result in loss
of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in
part, which could limit our ability to stop others from using or commercializing similar or identical drug candidates, or
limit the duration of the patent protection of our drug candidates. Given the amount of time required for the development,
testing and regulatory review of new drug candidates, patents protecting such candidates might expire before or shortly
after such candidates are commercialized. As a result, our patent portfolio may not provide us with sufficient rights to
exclude others from commercializing drugs similar or identical to ours.
We may become involved in lawsuits to protect or enforce our patents or other intellectual property, which could
be expensive, time consuming and unsuccessful.
Competitors may infringe our issued patents or other intellectual property. To counter infringement or unauthorized
use, we may be required to file infringement claims, which can be expensive and time consuming. Any claims we assert
against perceived infringers could provoke these parties to assert counterclaims against us alleging that we infringe their
patents. In addition, in a patent infringement proceeding, a court may decide that a patent of ours is invalid or
unenforceable, in whole or in part, construe the patent’s claims narrowly or refuse to stop the other party from using the
technology at issue on the grounds that our patents do not cover the technology. An adverse result in any litigation
proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly.
We may need to license intellectual property from third parties, and such licenses may not be available or may not
be available on commercially reasonable terms.
A third party may hold intellectual property, including patent, rights that are important or necessary to the
development of our drug candidates. It may be necessary for us to use patented or proprietary technology of third parties to
commercialize our drug candidates, in which case we would be required to obtain a license from these third parties on
commercially reasonable terms, or our business could be harmed, possibly materially.
Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the
outcome of which would be uncertain and could have a material adverse effect on the success of our business.
Our commercial success depends upon our ability, and the ability of our collaborators, to develop, manufacture,
market and sell our drug candidates without infringing the proprietary rights of third parties. There is considerable
intellectual property litigation in the biotechnology and pharmaceutical industries. We may become party to, or threatened
with, future adversarial proceedings or litigation regarding intellectual property rights with respect to our drug candidates,
including interference or derivation proceedings before the U.S. Patent and Trademark Office. Third parties may assert
infringement claims against us based on existing patents or patents that may be granted in the future.
If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from
such third party to continue developing and marketing our drug candidates. However, we may not be able to obtain any
required license on commercially reasonable terms or at all. Even if we were able to obtain a license, it could be non-
exclusive, thereby giving our competitors access to the same technologies licensed to us. We could be forced, including by
court order, to cease commercializing the infringing drug. In addition, we could be found liable for monetary damages,
including treble damages and attorneys’ fees if we are found to have willfully infringed a patent. A finding of infringement
could prevent us from commercializing our drug candidates or force us to cease some of our business
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operations. Claims that we have misappropriated the confidential information or trade secrets of third parties could have a
similar negative impact on our business.
We may be subject to claims by third parties asserting that we or our employees have misappropriated their
intellectual property, or claiming ownership of what we regard as our own intellectual property.
Many of our employees were previously employed at universities or other biotechnology or pharmaceutical
companies. Although we try to ensure that our employees do not use the proprietary information or know-how of others in
their work for us, we may be subject to claims that these employees or we have used or disclosed intellectual property,
including trade secrets or other proprietary information, of any such employee’s former employer. Litigation may be
necessary to defend against these claims.
In addition, while it is our policy to require our employees and contractors who may be involved in the development
of intellectual property to execute agreements assigning such intellectual property to us, we may be unsuccessful in
executing such an agreement with each party who in fact develops intellectual property that we regard as our own. Our and
their assignment agreements may not be self-executing or may be breached, and we may be forced to bring claims against
third parties, or defend claims they may bring against us, to determine the ownership of what we regard as our intellectual
property.
If we fail in prosecuting or defending any such claims, in addition to paying monetary damages, we may lose
valuable intellectual property rights or personnel. Even if we are successful in prosecuting or defending against such
claims, litigation could result in substantial costs and be a distraction to management.
Intellectual property litigation could cause us to spend substantial resources and distract our personnel from their
normal responsibilities.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause
us to incur significant expenses, and could distract our technical and management personnel from their normal
responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim
proceedings or developments, and if securities analysts or investors perceive these results to be negative it could have a
substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our
operating losses and reduce the resources available for development activities or any future sales, marketing or distribution
activities. We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.
Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can
because of their greater financial resources. Uncertainties resulting from the initiation and continuation of patent litigation
or other proceedings could compromise our ability to compete in the marketplace.
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be
harmed.
In addition to seeking patents for our drug candidates, we also rely on trade secrets, including unpatented know-how,
technology and other proprietary information, to maintain our competitive position. For example, our platform is based on
trade secrets that consist largely of expertise in carbohydrate chemistry and knowledge of carbohydrate biology. We do not
believe that we can obtain patent protection for our platform. Thus, our competitors may use our methods, or acquire
similar expertise, in order to develop glycomimetic drug candidates and progress these drug candidates through clinical
development and commercialization, which could impair our ability to successfully commercialize our drug candidates.
We seek to protect our trade secrets, in part, by entering into non-disclosure and confidentiality agreements with
parties who have access to them, such as our employees, corporate collaborators, outside scientific collaborators, contract
manufacturers, consultants, advisors and other third parties. We also enter into confidentiality and invention or patent
assignment agreements with our employees and consultants. Despite these efforts, any of these parties may breach the
agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain
adequate remedies for such breaches. Enforcing a claim that a party illegally disclosed or misappropriated a trade secret is
difficult, expensive and time consuming, and the outcome is unpredictable. In addition, some courts inside and outside the
United States are less willing or unwilling to protect trade secrets. If any of our trade secrets were to be lawfully obtained
or independently developed by a competitor, we would have no right to prevent them, or those to whom they communicate
it, from using that technology or information to compete with us. If any of our trade secrets were to be disclosed to or
independently developed by a competitor, our competitive position would be harmed.
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Risks Related to Regulatory Approval of Our Drug Candidates and Other Legal Compliance Matters
If we or our collaborators are not able to obtain, or if there are delays in obtaining, required regulatory approvals,
we or they will not be able to commercialize our drug candidates and our ability to generate revenue will be materially
impaired.
Our drug candidates and the activities associated with their development and commercialization, including their
design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval, advertising, promotion, sale and
distribution, are subject to comprehensive regulation by the FDA and other regulatory agencies in the United States and by
the EMA and similar regulatory authorities outside the United States. Failure to obtain marketing approval for a drug
candidate will prevent us or our collaborators from commercializing the drug candidate. We have not received approval to
market any of our drug candidates from regulatory authorities in any jurisdiction. We have only limited experience in filing
and supporting the applications necessary to gain marketing approvals and expect to rely on third-party CROs to assist us in
this process. Securing marketing approval requires the submission of extensive preclinical and clinical data and supporting
information to regulatory authorities for each therapeutic indication to establish the drug candidate’s safety and efficacy.
Securing marketing approval also requires the submission of information about the product manufacturing process to, and
inspection of manufacturing facilities by, applicable regulatory authorities. Our drug candidates may not be effective, may
be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics
that may preclude our ability to obtain marketing approval or prevent or limit commercial use. If any of our drug candidates
receives marketing approval, the accompanying label may limit the approved use of our drug, which could limit sales of the
drug.
The process of obtaining marketing approvals, both in the United States and abroad, is expensive and may take many
years if additional clinical trials are required, if approval is obtained at all, and can vary substantially based upon a variety
of factors, including the type, complexity and novelty of the drug candidates involved. Changes in marketing approval
policies during the development period, changes in or the enactment of additional statutes or regulations or changes in
regulatory review for each submitted drug application may cause delays in the approval or rejection of an application.
Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application, or may
decide that our data are insufficient for approval and require additional preclinical, clinical or other studies. In addition,
varying interpretations of the data obtained from preclinical and clinical testing could delay, limit or prevent marketing
approval of a drug candidate. Any marketing approval we ultimately obtain may be limited or subject to restrictions or
post-approval commitments that render the approved drug not commercially viable.
If we experience delays in obtaining approval or if we fail to obtain approval of our drug candidates, the commercial
prospects for our drug candidates may be harmed and our ability to generate revenue will be materially impaired.
Even though we have obtained Orphan Drug designation for several of our drug candidates, we may not be able
to obtain orphan drug marketing exclusivity for these or any of our other drug candidates.
Regulatory authorities in some jurisdictions, including the United States and the European Union, or EU, may
designate drugs for relatively small patient populations as orphan drugs. Under the Orphan Drug Act, the FDA may
designate a drug as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as a
patient population of fewer than 200,000 individuals annually in the United States. We have obtained Orphan Drug
designation from the FDA for uproleselan for the treatment of AML, as well as for GMI-1359 for the treatment of
osteosarcoma. However, in order to obtain marketing exclusivity in a particular jurisdiction, we must receive the first
marketing approval of the drug for its intended indication. In addition, the orphan designation does not convey any
advantage in, or shorten the duration of, the regulatory review or approval process.
Generally, if a drug with an orphan designation subsequently receives the first marketing approval for the indication
for which it has such designation, the drug is entitled to a period of marketing exclusivity, which precludes the FDA or the
EMA from approving another marketing application for the same drug for the same indication for that time period. The
applicable period is seven years in the United States and 10 years in the EU. The EU exclusivity period can be reduced to
six years if a drug no longer meets the criteria for orphan designation or if the drug is sufficiently profitable so that market
exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA or the EMA determines that the request
for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the
needs of patients with the rare disease or condition.
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Even if we obtain orphan drug exclusivity for a drug candidate, that exclusivity may not effectively protect the
candidate from competition because different drugs can be approved for the same condition. Even after an orphan drug is
approved, the FDA can subsequently approve another drug with the same active moiety for the same condition if the FDA
concludes that the later drug is clinically superior in that it is shown to be safer, more effective or makes a major
contribution to patient care.
The FDA fast track designation and additional breakthrough therapy designation for uproleselan may not
actually lead to a faster development or regulatory review or approval process.
If a drug is intended for the treatment of a serious or life-threatening disease or condition and the drug demonstrates
the potential to address unmet medical needs for this disease or condition, the drug sponsor may apply for the FDA fast
track designation. If fast track designation is obtained, the FDA may initiate review of sections of a new drug application,
or NDA, before the application is complete. This “rolling review” is available if the applicant provides, and the FDA
approves, a schedule for submission of the individual sections of the application.
Although we have obtained a fast track designation from the FDA for uproleselan to treat AML and breakthrough
therapy designation for uproleselan to treat AML, we may not experience a faster development process, review or approval
compared to conventional FDA procedures. Our fast track designation may be withdrawn by the FDA if it believes that the
designation is no longer supported by data from our clinical development programs. Our fast track designation does not
guarantee that we will qualify for or be able to take advantage of the expedited review procedures or that we will ultimately
obtain regulatory approval of uproleselan.
Failure to obtain marketing approval in international jurisdictions would prevent our drug candidates from being
marketed abroad.
In order to market and sell our drugs in the EU and any other jurisdictions, we or our collaborators must obtain
separate marketing approvals and comply with numerous and varying regulatory requirements. The approval procedure
varies among countries and can involve additional testing. The time required to obtain approval may differ substantially
from that required to obtain FDA approval. The regulatory approval process outside the United States generally includes all
of the risks associated with obtaining FDA approval. In addition, in many countries outside the United States, it is required
that the drug be approved for reimbursement before it can be approved for sale in that country. We or our collaborators may
not obtain approvals from regulatory authorities outside the United States on a timely basis, if at all. Approval by the FDA
does not ensure approval by regulatory authorities in other countries or jurisdictions, and approval by one regulatory
authority outside the United States does not ensure approval by regulatory authorities in other countries or jurisdictions or
by the FDA. However, failure to obtain approval in one jurisdiction may impact our ability to obtain approval elsewhere.
We or our collaborators may not be able to file for marketing approvals and may not receive necessary approvals to
commercialize our drugs in any market.
A variety of risks associated with developing and marketing our drug candidates internationally could hurt our
business.
We or our collaborators may seek regulatory approval for uproleselan and our other drug candidates outside of the
United States and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries
if we obtain the necessary approvals, including:
● differing regulatory requirements in foreign countries;
● the potential for so-called parallel importing, which is what happens when a local seller, faced with high or
higher local prices, opts to import goods from a foreign market with low or lower prices rather than buying them
locally;
● unexpected changes in tariffs, trade barriers, price and exchange controls and other regulatory requirements;
● economic weakness, including inflation or political instability in particular foreign economies and markets;
● compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;
● foreign taxes, including withholding of payroll taxes;
● foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and
other obligations related to doing business in another country;
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● difficulties staffing and managing foreign operations;
● workforce uncertainty in countries where labor unrest is more common than in the United States;
● potential liability under the Foreign Corrupt Practices Act or comparable foreign regulations;
● challenges enforcing our contractual and intellectual property rights, especially in foreign countries that do not
respect and protect intellectual property rights to the same extent as the United States;
● production shortages resulting from any events affecting raw material supply or manufacturing capabilities
abroad; and
● business interruptions resulting from pandemic, epidemic or disease outbreaks or geo-political actions, including
war and terrorism.
Pursuant to the terms of our collaboration and license agreement, Apollomics is responsible for the clinical
development and commercialization of uproleselan and GMI-1687 in Greater China. The continuation of COVID-19 in
China could have a material adverse effect on Apollomics’ ability to develop these drug candidates in a timely manner due
to disruptions in the region, travel restrictions, temporary closures of businesses and suspension of services and supplies.
Any such delay or disruptions in clinical development could result in the delay of any potential milestone payments to us
under the license and collaboration agreement, which could have a material adverse effect on our financial position and
results of operations.
Any drug candidate for which we obtain marketing approval could be subject to post-marketing restrictions or
recall or withdrawal from the market, and we may therefore be subject to penalties if we fail to comply with regulatory
requirements or if we experience unanticipated problems with our drug candidates, when and if any of them are
approved.
Any drug candidate for which we obtain marketing approval, along with manufacturing processes, post-approval
clinical data, labeling, advertising and promotional activities for such drug candidate, will be subject to continual
requirements of and review by the FDA and other regulatory authorities. These requirements include submissions of safety
and other post-marketing information and reports, registration and listing requirements, cGMP requirements relating to
manufacturing, quality control, quality assurance and corresponding maintenance of records and documents, requirements
regarding the distribution of samples to physicians and recordkeeping. Even if marketing approval of a drug candidate is
granted, the approval may be subject to limitations on the indicated uses for which the drug may be marketed or to the
conditions of approval, including the requirement to implement a risk evaluation and mitigation strategy. If any of our drug
candidates receives marketing approval, the accompanying label may limit the approved use of our drug, which could limit
its sales.
The FDA may also impose requirements for costly post-marketing studies or clinical trials and surveillance to
monitor the safety or efficacy of the drug. The FDA closely regulates the post-approval marketing and promotion of drugs
to ensure drugs are marketed only for the approved indications and in accordance with the provisions of the approved
labeling. The FDA imposes stringent restrictions on manufacturers’ communications regarding off-label use, and if we do
not market our drugs for their approved indications, we may be subject to enforcement action for off-label marketing.
Violations of the Federal Food, Drug, and Cosmetic Act relating to the promotion of prescription drugs may lead to
investigations alleging violations of federal and state healthcare fraud and abuse laws, as well as state consumer protection
laws.
In addition, later discovery of previously unknown adverse events or other problems with our drugs, manufacturers
or manufacturing processes, or failure to comply with regulatory requirements, may have negative consequences,
including:
● restrictions on such drugs, manufacturers or manufacturing processes;
● restrictions on the labeling or marketing of a drug;
● restrictions on product distribution or use;
● requirements to conduct post-marketing studies or clinical trials;
● warning letters;
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● recall or withdrawal of the drugs from the market;
● refusal to approve pending applications or supplements to approved applications that we submit;
● clinical holds;
● fines, restitution or disgorgement of revenue or profit;
● suspension or withdrawal of marketing approvals;
● refusal to permit the import or export of our drugs;
● product seizure; or
● injunctions or the imposition of civil or criminal penalties.
Non-compliance with the EU requirements regarding safety monitoring or pharmacovigilance, and with requirements
related to the development of drugs for the pediatric population, can also result in significant financial penalties. Similarly,
failure to comply with the EU’s requirements regarding the protection of personal information can also lead to significant
penalties and sanctions.
Our current and future business and relationships with customers and third-party payors in the United States and
elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency,
health information privacy and security and other healthcare laws and regulations, which could expose us to significant
penalties, including criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens
and diminished profits and future earnings.
Healthcare providers and third-party payors in the United States and elsewhere will play a primary role in the
recommendation and prescription of any drug candidates for which we obtain marketing approval. Our current and future
arrangements with third-party payors and customers may expose us to broadly applicable fraud and abuse and other
healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal False
Claims Act, which may constrain the business or financial arrangements and relationships through which we conduct
clinical research, sell, market and distribute any drugs for which we obtain marketing approval. In addition, we may be
subject to transparency laws and patient data privacy and security regulation by the U.S. federal and state governments and
by governments in foreign jurisdictions in which we conduct our business. The applicable federal, state and foreign
healthcare laws and regulations that may affect our ability to operate include:
● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully
soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or
reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any
good or service, for which payment may be made under federal healthcare programs, such as Medicare and
Medicaid;
● federal civil and criminal false claims laws, including the federal False Claims Act, which impose criminal and
civil penalties, including civil whistleblower or qui tam actions, and civil monetary penalty laws that prohibit
individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including
the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false
statement to avoid, decrease or conceal an obligation to pay money to the federal government;
● the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and
civil liability for executing a scheme to defraud any healthcare benefit program or making false statements
relating to healthcare matters;
● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or
HITECH, and their respective implementing regulations, which impose obligations on covered healthcare
providers, health plans, and healthcare clearinghouses, as well as their business associates that create, receive,
maintain or transmit individually identifiable health information for or on behalf of a covered entity, with
respect to safeguarding the privacy, security and transmission of individually identifiable health information;
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● the federal Open Payments program, pursuant to the Physician Payments Sunshine Act, which requires
manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare,
Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers
for Medicare & Medicaid Services, or CMS, information related to “payments or other transfers of value” made
to physicians, which is defined to include doctors, dentists, optometrists, podiatrists and chiropractors, other
healthcare professionals (such as physician assistants and nurse practitioners) and teaching hospitals, and
applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership
and investment interests held by the physicians and their immediate family members, with disclosure of such
information to be made by CMS on a publicly available website; and
● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may
apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-
governmental third-party payors, including private insurers; state and foreign laws that require pharmaceutical
companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant
compliance guidance promulgated by the federal government or otherwise restrict payments that may be made
to healthcare providers; state and foreign laws that require drug manufacturers to report information related to
payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;
state and local laws requiring the registration of pharmaceutical sales representatives; and state and foreign laws
governing the privacy and security of health information in certain circumstances, many of which differ from
each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and
regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business
practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or
other healthcare laws and regulations. If our operations are found to be in violation of any of these laws or any other
governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties,
including, without limitation, damages, fines, individual imprisonment, additional reporting requirements and oversight if
we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with
these laws, contractual damages, reputational harm, diminished profits and future earnings, disgorgement, exclusion from
participation in government healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of
our operations, which could have a material adverse effect on our business. If any of the physicians or other healthcare
providers or entities with whom we expect to do business, including our collaborators, is found not to be in compliance
with applicable laws, it may be subject to criminal, civil or administrative sanctions, including exclusions from
participation in government healthcare programs, which could also materially affect our business.
Recently enacted and future legislation may increase the difficulty and cost for us to obtain marketing approval of
and commercialize our drug candidates and affect the prices we may obtain.
In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes
and proposed changes regarding the healthcare system that could prevent or delay marketing approval of our drug
candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any drug candidates for which
we obtain marketing approval.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting
changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and expanding access.
In the United States, the pharmaceutical industry has been a particular focus of these efforts, which include major
legislative initiatives to reduce the cost of care through changes in the healthcare system, including limits on the pricing,
coverage, and reimbursement of pharmaceutical and biopharmaceutical products, especially under government-funded
health care programs, and increased governmental control of drug. In March 2010, President Obama signed into law the
Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or
collectively PPACA, a sweeping law intended to broaden access to health insurance, reduce or constrain the growth of
healthcare spending, improve quality of care, enhance remedies against fraud and abuse, add new transparency
requirements for the healthcare and health insurance industries, impose new taxes and fees on the health industry and
impose additional health policy reforms.
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Among the provisions of PPACA of importance to our business and potential drug candidates are:
● an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs
and biologic agents, apportioned among these entities according to their market share in certain government
healthcare programs;
● an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program
to 23.1% and 13.0% of the average manufacturer price for branded and generic drugs, respectively;
● expansion of healthcare fraud and abuse laws, including the False Claims Act and the Anti-Kickback Statute,
new government investigative powers and enhanced penalties for non-compliance;
● a new Medicare Part D coverage gap discount program, in which manufacturers must now agree to offer 70%
point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their
coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D;
● extension of a manufacturer’s Medicaid rebate liability to covered drugs dispensed to individuals who are
enrolled in Medicaid managed care organizations;
● expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid
coverage to additional individuals and by adding new mandatory eligibility categories for certain individuals
with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s
Medicaid rebate liability;
● expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
● the new requirements under the federal Open Payments program and its implementing regulations;
● a new requirement to annually report drug samples that manufacturers and distributors provide to physicians;
and
● a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative
clinical effectiveness research, along with funding for such research.
There remain judicial and Congressional challenges to certain aspects of PPACA, as well as efforts by the Trump
administration to repeal or replace certain aspects of the PPACA. Since January 2017, President Trump has signed two
Executive Orders and other directives designed to delay the implementation of certain provisions of the PPACA or
otherwise circumvent some of the requirements for health insurance mandated by the PPACA. Concurrently, Congress has
considered legislation that would repeal or repeal and replace all or part of the PPACA. While Congress has not passed
comprehensive repeal legislation, several bills affecting the implementation of certain taxes under the ACA have been
signed into law. The Tax Cuts and Jobs Act of 2017, or Tax Act, included a provision which repealed, effective January 1,
2019, the tax-based shared responsibility payment imposed by the PPACA on certain individuals who fail to maintain
qualifying health coverage for all or part of a year that is commonly referred to as the “individual mandate”. In addition, the
2020 federal spending package permanently eliminates, effective January 1, 2020, the ACA-mandated “Cadillac” tax on
high-cost employer-sponsored health coverage and medical device tax and, effective January 1, 2021, also eliminates the
health insurer tax. The Bipartisan Budget Act of 2018, or the BBA, among other things, amended the ACA, effective
January 1, 2019, to increase from 50 percent to 70 percent the point-of-sale discount that is owed by pharmaceutical
manufacturers who participate in Medicare Part D and to close the coverage gap in most Medicare drug plans, commonly
referred to as the “donut hole.” For example, on June 17, 2021, the U.S. Supreme Court dismissed a challenge on
procedural grounds that argued the ACA is unconstitutional in its entirety because the “individual mandate” was repealed
by Congress. Thus, the ACA will remain in effect in its current form. Further, prior to the U.S. Supreme Court ruling, on
January 28, 2021, President Biden issued an executive order to initiate a special enrollment period for purposes of
obtaining health insurance coverage through the ACA marketplace. The executive order also instructs certain governmental
agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others,
reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create
unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the ACA.
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It is unclear how any such challenges and healthcare reform measures of the Biden administration will impact ACA and our
business.
In addition, other legislative changes have been proposed and adopted since PPACA was enacted. These changes
include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which began in 2013, pursuant
to the Budget Control Act of 2011. On March 1, 2013, the President signed an executive order implementing the 2%
Medicare payment reductions, and on April 1, 2013, these reductions went into effect. Pursuant to the Bipartisan Budget
Act of 2015, these reductions will stay in effect through 2031, except for a temporary suspension from May 1, 2020
through March 31, 2022 due to the COVID-19 pandemic, unless additional Congressional action is taken. Under current
legislation, the actual reduction in Medicare payments will vary from 1% in 2022 to up to 3% in the final fiscal year of this
sequester. On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates
the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and
innovator multiple source drugs, beginning January 1, 2024. In January 2013, President Obama signed into law the
American Taxpayer Relief Act of 2012, which, among other things, reduced Medicare payments to several providers and
increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
Additional legislative proposals to reform healthcare and government insurance programs, along with the trend toward
managed healthcare in the United States, could influence the purchase of medicines and reduce reimbursement and/or
coverage of our product candidates, if approved.
Current and future healthcare reform measures may result in more rigorous coverage criteria and in additional
downward pressure on the price that we receive for any approved drug. Any reduction in reimbursement from Medicare or
other government-funded programs may result in a similar reduction in payments from private payors. There has been
increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices.
Specifically, there have been several recent U.S. Congressional inquiries and proposed bills designed to, among other
things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient
programs, and reform government program reimbursement methodologies for drugs. At the federal level, the Trump
administration used several means to propose implementing drug pricing reform, including through federal budget
proposals, executive orders and policy initiatives. For example, on July 24, 2020 and September 13, 2020, the Trump
administration announced several executive orders related to prescription drug pricing that seek to implement several of the
administration’s proposals. As a result, the FDA released a final rule and guidance on September 24, 2020, providing
guidance for states to build and submit importation plans for drugs from Canada. Further, on November 20, 2020, the U.S.
Department of Health and Human Services finalized a regulation removing safe harbor protection for price reductions from
pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless
the price reduction is required by law. The implementation of the rule has been delayed by the Biden administration from
January 1, 2022 to January 1, 2023 in response to ongoing litigation. The rule also creates a new safe harbor for price
reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy
benefit managers and manufacturers, the implementation of which have also been delayed pending review by the Biden
administration until January 1, 2023. On November 20, 2020, the Centers for Medicare & Medicaid Services, or CMS,
issued an interim final rule implementing President Trump’s Most Favored Nation executive order, which would tie
Medicare Part B payments for certain physician-administered drugs to the lowest price paid in other economically
advanced countries. As a result of litigation challenging the Most Favored Nation model, on December 27, 2021, CMS
published a final rule that rescinded the Most Favored Nation model interim final rule. In July 2021, the Biden
administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions
aimed at prescription drugs. In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive
Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential
legislative policies that Congress could pursue to advance these principles. No legislation or administrative actions have
been finalized to implement these principles. In addition, Congress is considering drug pricing as part of other reform
initiatives. At the state level, legislatures are increasingly passing legislation and implementing regulations designed to
control pharmaceutical and biological product pricing. The implementation of cost containment measures or other
healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our drugs.
Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and
promotional activities for drugs. We cannot be sure whether additional legislative changes will be enacted, or whether the
FDA regulations, guidance or interpretations will be changed, or what the impact of such changes on the marketing
approvals of our drug candidates, if any, may be. In addition, increased scrutiny by the U.S. Congress of the FDA’s
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approval process may significantly delay or prevent marketing approval, as well as subject us to more stringent product
labeling and post-marketing testing and other requirements.
Governments outside the United States tend to impose strict price controls, which may adversely affect our
revenue, if any.
In some countries, particularly in the EU, the pricing of prescription pharmaceuticals is subject to governmental
control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt
of marketing approval for a drug. To obtain coverage and reimbursement or pricing approval in some countries, we may be
required to conduct a clinical trial that compares the cost-effectiveness of our drug candidate to other available therapies. If
reimbursement of our drugs is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our
business could be harmed, possibly materially.
If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines
or penalties or incur costs that could harm our business.
We are subject to numerous environmental, health and safety laws and regulations, including those governing
laboratory procedures and the handling, use, storage, treatment and disposal of hazardous materials and wastes. Our
operations involve the use of hazardous and flammable materials, including chemicals and biological materials. Our
operations also produce hazardous waste products. We generally contract with third parties for the disposal of these
materials and wastes. We cannot eliminate the risk of contamination or injury from these materials. In the event of
contamination or injury resulting from our use of hazardous materials, we could be held liable for any resulting damages,
and any liability could exceed our resources. We also could incur significant costs associated with civil or criminal fines
and penalties for failure to comply with such laws and regulations.
Although we maintain workers’ compensation insurance to cover us for costs and expenses we may incur due to
injuries to our employees resulting from the use of hazardous materials, this insurance may not provide adequate coverage
against potential liabilities. We do not maintain insurance for environmental liability or toxic tort claims that may be
asserted against us in connection with our storage or disposal of biological, hazardous or radioactive materials.
In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety
laws and regulations. These current or future laws and regulations may impair our research, development or production
efforts. Our failure to comply with these laws and regulations also may result in substantial fines, penalties or other
sanctions.
Risks Related to Employee Matters and Managing Our Growth
Our future success depends on our ability to retain key executives and to attract, retain and motivate qualified
personnel.
We are highly dependent on the management, research and development, clinical, financial and business
development expertise of Harout Semerjian, our President and Chief Executive Officer; John Magnani, our Senior Vice
President of Research and Chief Scientific Officer; Armand Girard, our Senior Vice President and Chief Business Officer;
and Brian Hahn, our Senior Vice President of Finance and Chief Financial Officer, as well as the other members of our
scientific and clinical teams. In particular, we are dependent upon Dr. Magnani for key expertise in carbohydrate chemistry
and knowledge of carbohydrate biology with respect to our glycomimetics platform, and the loss of his services would
materially impair our future drug discovery efforts. Although we have entered into employment agreements with our
executive officers, each of them may currently terminate their employment with us at any time. We do not maintain “key
person” insurance for any of our executives or employees.
Recruiting and retaining qualified scientific and clinical personnel and, if we progress the development of our drug
pipeline toward scaling up for commercialization, sales and marketing personnel, will also be critical to our success. The
loss of the services of our executive officers or other key employees could impede the achievement of our research,
development and commercialization objectives and seriously harm our ability to successfully implement our business
strategy. Furthermore, replacing executive officers and key employees may be difficult and may take an extended period of
time because of the limited number of individuals in our industry with the breadth of skills and experience required to
successfully develop, gain regulatory approval for and commercialize our drug candidates. Competition to hire qualified
personnel in our industry is intense, and we may be unable to hire, train, retain or motivate these key personnel on
acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar
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personnel. We also experience competition for the hiring of scientific and clinical personnel from universities and research
institutions. In addition, we rely on consultants and advisors, including scientific and clinical advisors, to assist us in
formulating our research and development and commercialization strategy. Our consultants and advisors may have
commitments under consulting or advisory contracts with other entities that may limit their availability to us. If we are
unable to continue to attract and retain high quality personnel, our ability to pursue our growth strategy will be limited.
We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and
distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our
operations.
As our development progresses, we expect to experience significant growth in the number of our employees and the
scope of our operations, particularly in the areas of research, drug development, regulatory affairs and, if any of our drug
candidates receives marketing approval, sales, marketing and distribution. To manage our anticipated future growth, we
must continue to implement and improve our managerial, operational and financial systems, expand our facilities and
continue to recruit and train additional qualified personnel. Due to our limited financial resources and the limited
experience of our management team in managing a company with such anticipated growth, we may not be able to
effectively manage the expansion of our operations or recruit and train additional qualified personnel. The expansion of our
operations may lead to significant costs and may divert our management and business development resources. Any inability
to manage growth could delay the execution of our business plans or disrupt our operations.
Our employees and employees of our collaborators may engage in misconduct or other improper activities,
including non-compliance with regulatory standards and requirements.
We and our collaborators are exposed to the risk of employee fraud or other misconduct. Misconduct by employees
could include intentional failures to comply with the FDA regulations, to provide accurate information to the FDA, to
comply with manufacturing standards we have established, to comply with federal and state healthcare fraud and abuse
laws and regulations, to report financial information or data accurately or to disclose unauthorized activities to us. In
particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and
regulations intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may
restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive
programs and other business arrangements. Employee misconduct could also involve the improper use of individually
identifiable information, including, without limitation, information obtained in the course of clinical trials, which could
result in regulatory sanctions and serious harm to our reputation. We have adopted a code of business conduct and ethics,
but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent
improper activities may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from
governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or
regulations. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our
rights, or any such actions are instituted against any of our collaborators, those actions could have a significant impact on
our business, including the imposition of significant fines or other sanctions and diminished royalties.
General Risks Related to Ownership of Our Common Stock
An active trading market for our common stock may not be sustained.
Although our common stock is listed on The Nasdaq Global Market, we cannot assure you that an active trading
market for our shares will be sustained. If an active market for our common stock is not sustained, it may be difficult for
investors in our common stock to sell shares without depressing the market price for the shares or to sell the shares at all.
The trading price of our common stock has been and is likely to continue to be volatile.
Our stock price from time to time has been volatile. The stock market in general and the market for
biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to the
operating performance of particular companies. As a result of this volatility, investors may not be able to sell their common
stock at or above the price paid for the shares. The market price for our common stock may be influenced by many factors,
including:
● announcements relating to development, regulatory approvals or commercialization of our drug candidates;
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● actual or anticipated variations in our operating results;
● changes in financial estimates by us or by any securities analysts who might cover our stock;
● conditions or trends in our industry;
● changes in laws or other regulatory actions affecting us or our industry, such as drug pricing and reimbursement;
● stock market price and volume fluctuations of comparable companies and, in particular, those that operate in the
biopharmaceutical industry;
● announcements by us or our competitors of significant acquisitions, strategic partnerships or divestitures;
● announcements of investigations or regulatory scrutiny of our operations or lawsuits filed against us;
● capital commitments;
● investors’ general perception of our company and our business;
● disputes concerning our intellectual property or other proprietary rights;
● recruitment or departure of key personnel; and
● sales of our common stock, including sales by our directors and officers or specific stockholders.
In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and
continue to affect the market prices of equity securities of many companies, including recently in connection with the
COVID-19 pandemic, which has resulted in volatile stock prices for many companies notwithstanding the lack of a
fundamental change in their underlying business models or prospects. These fluctuations have often been unrelated or
disproportionate to the operating performance of those companies. Broad market and industry factors, including potentially
worsening economic conditions and other adverse effects or developments relating to the COVID-19 pandemic, political,
regulatory and other market conditions, may negatively affect the market price of shares of our common stock, regardless
of our actual operating performance.
In addition, in the past, stockholders have initiated class action lawsuits against pharmaceutical and biotechnology
companies following periods of volatility in the market prices of these companies’ stock. Such litigation, if instituted
against us, could cause us to incur substantial costs and divert management’s attention and resources from our business.
If equity research analysts do not publish research or reports, or publish unfavorable research or reports, about
us, our business or our market, our stock price and trading volume could decline.
The trading market for our common stock is influenced by the research and reports that equity research analysts
publish about us and our business. We have only limited research coverage by equity research analysts. Equity research
analysts may elect not to initiate or continue to provide research coverage of our common stock, and such lack of research
coverage may adversely affect the market price of our common stock. Even if we have equity research analyst coverage,
we will not have any control over the analysts or the content and opinions included in their reports. The price of our stock
could decline if one or more equity research analysts downgrade our stock or issue other unfavorable commentary or
research. If one or more equity research analysts ceases coverage of our company or fails to publish reports on us regularly,
demand for our stock could decrease, which in turn could cause our stock price or trading volume to decline.
The issuance of additional stock in connection with financings, acquisitions, investments, our stock incentive
plan, our employee stock purchase plan or otherwise will dilute all other stockholders.
Our certificate of incorporation authorizes us to issue up to 100,000,000 shares of common stock and up to 5,000,000
shares of preferred stock with such rights and preferences as may be determined by our board of directors. Subject to
compliance with applicable rules and regulations, we may issue our shares of common stock or securities convertible into
our common stock from time to time in connection with a financing, acquisition, investment, our stock incentive plan, our
employee stock purchase plan or otherwise. Any such issuance could result in substantial dilution to our existing
stockholders and cause the trading price of our common stock to decline.
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If a substantial number of our total outstanding shares are sold into the market, or if the market perceives that
such sales may occur, it could cause the market price of our common stock to drop significantly, even if our business is
doing well.
Sales of a substantial number of shares of our common stock in the public market could occur at any time. If our
stockholders sell, or if the market perceives that our stockholders intend to sell, substantial amounts of our common stock
in the public market, the market price of our common stock could decline significantly. All of our outstanding shares of
common stock are available for sale in the public market, subject only to the restrictions of Rule 144 under the Securities
Act in the case of our affiliates.
In addition, we have filed registration statements on Form S-8 registering the issuance of shares of common stock
subject to options or other equity awards issued or reserved for future issuance under our equity incentive plans. Shares
registered under these registration statements are available for sale in the public market subject to vesting arrangements and
exercise of options, as well as Rule 144 in the case of our affiliates. If these additional shares are sold, or if it is perceived
that they will be sold, in the public market, the trading price of our common stock could decline.
Provisions in our corporate charter documents and under Delaware law may prevent or frustrate attempts by our
stockholders to change our management and hinder efforts to acquire a controlling interest in us, and the market price
of our common stock may be lower as a result.
There are provisions in our certificate of incorporation and bylaws that may make it difficult for a third party to
acquire, or attempt to acquire, control of our company, even if a change in control was considered favorable by some or all
of our stockholders. For example, our board of directors has the authority to issue up to 5,000,000 shares of preferred stock.
The board of directors can fix the price, rights, preferences, privileges and restrictions of the preferred stock without any
further vote or action by our stockholders. The issuance of shares of preferred stock may delay or prevent a change in
control transaction. As a result, the market price of our common stock and the voting and other rights of our stockholders
may be adversely affected. An issuance of shares of preferred stock may result in the loss of voting control to other
stockholders.
Our charter documents also contain other provisions that could have an anti-takeover effect, including:
● only one of our three classes of directors is elected each year;
● stockholders are not entitled to remove directors other than by a 66 2/3% vote and only for cause;
● stockholders are not permitted to take actions by written consent;
● stockholders cannot call a special meeting of stockholders; and
● stockholders must give advance notice to nominate directors or submit proposals for consideration at
stockholder meetings.
In addition, we are subject to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law,
which regulates corporate acquisitions by prohibiting Delaware corporations from engaging in specified business
combinations with particular stockholders of those companies. These provisions could discourage potential acquisition
proposals and could delay or prevent a change in control transaction. They could also have the effect of discouraging others
from making tender offers for our common stock, including transactions that may be in your best interests. These
provisions may also prevent changes in our management or limit the price that investors are willing to pay for our stock.
Our certificate of incorporation also provides that the Court of Chancery of the State of Delaware will be the
exclusive forum for substantially all disputes between us and our stockholders.
If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements
on a timely basis could be impaired.
We are subject to the reporting requirements of the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of
2002, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations of The
Nasdaq Global Market. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure
controls and procedures and internal control over financial reporting and perform system and process evaluation and testing
of our internal control over financial reporting to allow management to report on the effectiveness of our internal
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control over financial reporting. This requires that we incur substantial additional professional fees and internal costs to
expand our accounting and finance functions and that we expend significant management efforts.
We may in the future discover areas of our internal financial and accounting controls and procedures that need
improvement. Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control
system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control
system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can
provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of
fraud will be detected.
If we are unable to maintain proper and effective internal controls in the future, we may not be able to produce timely
and accurate financial statements, and we may conclude that our internal controls over financial reporting are not effective.
If that were to happen, the market price of our stock could decline and we could be subject to sanctions or investigations by
Nasdaq, the SEC or other regulatory authorities.
We do not anticipate paying any cash dividends on our common stock in the foreseeable future and our stock may
not appreciate in value.
We have not declared or paid cash dividends on our common stock to date. We currently intend to retain our future
earnings, if any, to fund the development and growth of our business. In addition, the terms of any future debt agreements
may preclude us from paying dividends. There is no guarantee that shares of our common stock will appreciate in value or
that the price at which our stockholders have purchased their shares will be able to be maintained.
We incur increased costs and demands upon management as a result of being a public company.
As a public company listed in the United States, we incur, and will continue to incur now that we have ceased to be
an “emerging growth company,” significant legal, accounting and other costs. These costs could negatively affect our
financial results. In addition, changing laws, regulations and standards relating to corporate governance and public
disclosure, including regulations implemented by the SEC and Nasdaq, may increase legal and financial compliance costs
and make some activities more time-consuming. These laws, regulations and standards are subject to varying
interpretations and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory
and governing bodies.
We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may
result in increased general and administrative expenses and a diversion of management’s time and attention from revenue-
generating activities to compliance activities. If we do not comply with new laws, regulations and standards, regulatory
authorities may initiate legal proceedings against us and our business may be harmed.
Failure to comply with these rules might also make it more difficult for us to obtain some types of insurance,
including director and officer liability insurance, and we might be forced to accept reduced policy limits and coverage or
incur substantially higher costs to obtain the same or similar coverage. The impact of these events could also make it more
difficult for us to attract and retain qualified persons to serve on our board of directors, on committees of our board of
directors or as members of senior management.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2.
PROPERTIES
Our principal offices occupy approximately 42,000 square feet of leased office space in Rockville, Maryland,
pursuant to a lease agreement that expires in October 2023. We believe that our properties are generally in good condition,
well maintained, suitable and adequate to carry on our business. We believe our capital resources are sufficient to lease any
additional facilities required to meet our expected growth needs.
ITEM 3.
LEGAL PROCEEDINGS
From time to time, we are subject to litigation and claims arising in the ordinary course of business. We are not
currently a party to any material legal proceedings and we are not aware of any pending or threatened legal proceeding
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against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial
condition.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
Market Information for Common Stock
Our common stock is listed on The Nasdaq Global Market under the symbol “GLYC.”
Dividend Policy
We have never declared or paid any dividends on our common stock. We anticipate that we will retain all of our future
earnings, if any, for use in the operation and expansion of our business and do not anticipate paying cash dividends in the
foreseeable future.
Stockholders
As of February 28, 2022, we had 52,313,894 shares of common stock outstanding held by 24 holders of record. The
actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial
owners but whose shares are held in street name by brokers and other nominees. This number of holders of record also does
not include stockholders whose shares may be held in trust by other entities.
Performance Graph
The following graph compares the five-year cumulative total return of our common stock with the Nasdaq Composite
Index (U.S.) and the Nasdaq Biotechnology Index. The comparison assumes a $100 investment on December 31, 2016 in
our common stock, the stocks comprising the Nasdaq Composite Index, and the stocks comprising the Nasdaq
Biotechnology Index, and assumes reinvestment of the full amount of all dividends, if any. Historical stockholder return is
not necessarily indicative of the performance to be expected for any future periods.
Among GlycoMimetics, Inc., the Nasdaq Composite Index and the Nasdaq Biotechnology Index
Comparison of Cumulative Total Return
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The performance graph shall not be deemed to be incorporated by reference by means of any general statement
incorporating by reference this Form 10-K into any filing under the Securities Act of 1933, as amended or the Exchange
Act, except to the extent that we specifically incorporate such information by reference, and shall not otherwise be deemed
filed under such acts.
Recent Sales of Unregistered Securities
None.
Purchases of Equity Securities by the Issuer and Affiliated Parties
None.
ITEM 6.
[RESERVED]
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
You should read the following discussion and analysis of our financial condition and results of operations together
with our consolidated financial statements and the related notes and other financial information included elsewhere in this
Annual Report. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual
Report, including information with respect to our plans and strategy for our business, includes forward-looking statements
that involve risks and uncertainties. You should review Item 1A. “Risk Factors” and “Special Note Regarding Forward-
Looking Statements” in this Annual Report for a discussion of important factors that could cause actual results to differ
materially from the results described in or implied by the forward-looking statements contained in the following discussion
and analysis.
For the discussion of our financial condition and results of operations and cash flows for the year ended
December 31, 2020 compared to the year ended December 31, 2019, please refer to Part II, Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the
year ended December 31, 2020 filed with the SEC on March 2, 2021.
Overview
We are a clinical-stage biotechnology company focused on the discovery and development of novel glycomimetic
drugs to address unmet medical needs resulting from diseases in which carbohydrate biology plays a key role. We are
developing a pipeline of proprietary glycomimetics, which are small molecules that mimic the structure of carbohydrates
involved in important biological processes, to inhibit disease-related functions of carbohydrates such as the roles they play
in inflammation, cancer and infection. We believe this represents an innovative approach to drug discovery to treat a wide
range of diseases. We are focusing our efforts on drug candidates for diseases that we believe will qualify for orphan drug
designation.
Our proprietary glycomimetics platform is based on our expertise in carbohydrate chemistry and our understanding
of the role carbohydrates play in key biological processes. Most human proteins are modified by the addition of complex
carbohydrate structures to the surface of such proteins, which affects the functions of the proteins and their interactions
with other molecules. Our initial research and development efforts have focused on drug candidates targeting selectins,
which are proteins that serve as adhesion molecules and bind to carbohydrates that are involved in the inflammatory
component and progression of a wide range of diseases, including hematologic disorders, cancer and cardiovascular
disease. For example, we believe that members of the selectin family play a key role in tumor metastasis and resistance to
chemotherapy. Inhibiting specific carbohydrates from binding to selectins has long been viewed as a potentially attractive
approach for therapeutic intervention. The ability to successfully develop drug-like carbohydrate compounds that inhibit
binding with selectins, known as selectin antagonists, has historically been limited by their potency and the complexities of
carbohydrate chemistry. We believe our expertise in the rational design of potent glycomimetic antagonists with drug-like
properties and in carbohydrate chemistry enables us to identify highly effective selectin antagonists and other
glycomimetics that may inhibit the disease-related functions of certain carbohydrates in order to develop novel drug
candidates to address orphan diseases with high unmet medical need.
Our lead glycomimetic drug candidate, uproleselan, is a specific E-selectin inhibitor that we are developing to be
used in combination with chemotherapy to treat patients with acute myeloid leukemia, or AML, a life-threatening
hematologic cancer, and potentially other hematologic cancers. In 2021, we completed enrollment of patients in a
randomized, double-blind, placebo-controlled Phase 3 pivotal clinical trial to evaluate uproleselan in individuals with
relapsed/refractory AML, the design of which was based on guidance received from the U.S. Food and Drug
Administration, or FDA. Based on discussions with our external statisticians for the trial, we expect to report preliminary
data from the trial after year end 2022.
We have also entered into a Cooperative Research and Development Agreement, or CRADA, with the National
Cancer Institute, or NCI, part of the National Institutes of Health, to conduct a Phase 2/3 randomized, controlled clinical
trial testing the addition of uproleselan to a standard chemotherapy regimen. Enrollment of the Phase 2 portion was
completed in December 2021. There will be a planned interim analysis that will evaluate event-free survival and whether
the pre-specified threshold for continuing to Phase 3 has been met. The trial may also provide support for regulatory filings,
if the results of the planned interim analysis are positive.
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Uproleselan is also being studied in multiple investigator-sponsored trials, with data readouts from these trial
expected in 2022.
We have rationally designed an innovative antagonist of E-selectin, GMI-1687, that could be a subcutaneously
administered treatment. Initially developed as a potential life-cycle extension to uproleselan, we believe that GMI-1687
could be developed to broaden the clinical usefulness of an E-selectin antagonist to conditions where outpatient treatment is
preferred or required. We are currently conducting preclinical activities and studies with GMI-1687 to support our planned
submission of an investigational new drug application, or IND, to the FDA in the first half of 2022.
We are also developing a drug candidate, GMI-1359, that simultaneously targets both E-selectin and a chemokine
receptor known as CXCR4. In the fourth quarter of 2021, we ended a Phase 1b trial of GMI-1359 in hormone receptor
positive breast cancer patients whose tumors have spread to bone. We are also advancing other preclinical-stage programs,
including small-molecule glycomimetic compounds that inhibit the protein galectin-3, that could be an orally administered
treatment, which we believe may have potential to be used for the treatment of fibrosis, cancer and cardiovascular disease.
We have financed our operations primarily through private placements of our securities, up-front and milestone
payments under our license and collaboration agreements and the net proceeds from public offerings of common stock,
including sales of common stock under at-the-market sales facilities with Cowen and Company LLC, or Cowen. We have
no approved drugs currently available for sale, and substantially all of our revenue to date has been revenue from up-front
and milestone payments under license and collaboration agreements.
Since inception, we have incurred significant operating losses. We had an accumulated deficit of $372.9 million as of
December 31, 2021 and we expect to continue to incur significant expenses and operating losses over at least the next
several years. Our net losses may fluctuate significantly from quarter to quarter and year to year, depending on the timing
of our clinical trials and our expenditures on other research and development activities. We anticipate that our expenses will
increase substantially as we:
● initiate and conduct our planned clinical trials of uproleselan and GMI-1687, including fulfilling our funding
and supply commitments related to the ongoing clinical trials of uproleselan;
● conduct NDA-enabling activities related to manufacture, toxicology and clinical pharmacology for our product
candidates;
● manufacture additional uproleselan drug supplies for validation and prepare for commercialization;
● seek to discover and develop additional drug candidates;
● seek regulatory approvals for any drug candidates that successfully complete clinical trials;
● ultimately establish a sales, marketing and distribution infrastructure and scale up external manufacturing
capabilities to commercialize any drug candidates for which we may obtain regulatory approval;
● maintain, expand and protect our intellectual property portfolio;
● hire additional clinical, quality control, regulatory and scientific personnel;
● maintain sufficient level of insurance including product liability and directors, officers and corporate liability
insurance policies; and
● add operational, financial and management information systems and personnel, including personnel to support
our drug development and potential future commercialization efforts.
To fund further operations, we will need to raise capital. We may obtain additional financing in the future through the
issuance of our common stock, through other equity or debt financings, potentially including the use of our at-the-market
sales facility with Cowen, or through collaborations or partnerships with other companies. We may not be able to raise
additional capital on terms acceptable to us, or at all, and any failure to raise capital as and when needed could compromise
our ability to execute on our business plan. For example, the current global COVID-19 pandemic presents material
uncertainty and its disruption of the capital markets may have a material adverse impact on our ability to raise additional
capital if we decide to do so. Although it is difficult to predict future liquidity requirements, we believe that our existing
cash and cash equivalents will be sufficient to fund our operations into the second quarter of 2023 without
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giving effect to potential business development opportunities, such as upfront or milestone payments under license and
collaboration agreements, or additional financing activities including the potential sale of common stock. However, our
ability to successfully transition to profitability will be dependent upon achieving a level of revenues adequate to support
our cost structure. We cannot assure you that we will ever be profitable or generate positive cash flow from operating
activities.
Impact of COVID-19 on Our Business
The imposition of “lockdown,” “social distancing” and “shelter in place” directives by state and federal governments
in the United States as well as governments in other regions of the world in response to the COVID-19 pandemic, including
in locations in which our Phase 3 clinical trial of uproleselan is being conducted, resulted in slowed clinical site initiation,
patient recruitment and enrollment rates early in the pandemic. Enrollment rates returned to forecasted rates from the
beginning of the lockdowns and we completed enrollment in November 2021. However, we cannot at this time fully assess
the effect of the COVID-19 pandemic on our completion of the clinical trial. We continue to closely monitor the COVID-
19 situation and any potential impact to our planned activities.
We have also implemented business continuity plans designed to address and mitigate the impact of the COVID-19
pandemic on our employees and our business. While to date we have experienced limited impacts beyond the earlier delays
in recruitment in our ongoing uproleselan Phase 3 clinical trial, given the global economic slowdown, the overall disruption
of global healthcare systems and the other risks and uncertainties associated with the pandemic, our business, financial
condition, results of operations and growth prospects could be materially adversely affected. We continue to closely
monitor the COVID-19 situation as we evolve our business continuity plans and response strategy. In March 2020, our
workforce transitioned to working remotely in accordance with federal and state declarations. We have reopened our offices
pursuant to a hybrid return to office policy with a focus on employee safety and optimal work environment.
Our Collaboration and License Agreements
Apollomics
In January 2020, we entered into an exclusive collaboration and license agreement with Apollomics (Hong Kong)
Limited, or Apollomics, for the development and commercialization of uproleselan and GMI-1687 in Mainland China,
Hong Kong, Macau and Taiwan, also known as Greater China. Under the terms of the agreement, Apollomics will be
responsible for clinical development and commercialization in Greater China. We will also collaborate with Apollomics to
advance the preclinical and clinical development of GMI-1687. We received an upfront cash payment of $9.0 million and
in September 2020 received a $1.0 million development milestone payment. Subject to the terms of the agreement, we will
be eligible to receive potential further milestone payments totaling approximately $179.0 million, as well as tiered royalties
ranging from the high single digits to 15%, as a percentage of net sales. Apollomics will be responsible for all costs related
to development, regulatory approvals, and commercialization activities for uproleselan and GMI-1687 in Greater China,
and we and Apollomics expect to enter into clinical and commercial supply agreements with respect to our provision of
uproleselan and GMI-1687 to Apollomics. We retain all rights for both compounds in the rest of the world.
In September 2020, the China National Medical Products Administration (NMPA) Center for Drug Evaluation (CDE)
granted IND approval for uproleselan (also known as APL-106), enabling the initiation of a Phase 1 pharmacokinetics and
tolerability study and a planned Phase 3 bridging study of APL-106 in combination with chemotherapy in
relapsed/refractory AML. In January 2021, APL-106 was granted Breakthrough Therapy Designation from the China
NMPA CDE for the treatment of relapsed/refractory AML. In March 2021, Apollomics enrolled the first patient in the
Phase 1 study.
In June 2020, we entered into a clinical supply agreement with Apollomics under which we will manufacture and
supply uproleselan product to Apollomics at agreed upon prices. Apollomics has the option to begin manufacture after
appropriate material transfer requirements are met. During the year ended December 31, 2021, we recognized $1.1 million
in revenue from the sale of clinical supplies to Apollomics under the clinical supply agreement.
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Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our
financial statements, which have been prepared in accordance with generally accepted accounting principles in the United
States, or GAAP. The preparation of these financial statements requires us to make estimates, judgments and assumptions
that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the dates of the
balance sheets and the reported amounts of revenue and expenses during the reporting periods. In accordance with GAAP,
we base our estimates on historical experience and on various other assumptions that we believe are reasonable under the
circumstances at the time such estimates are made. Actual results may differ materially from our estimates and judgments
under different assumptions or conditions. We periodically review our estimates in light of changes in circumstances, facts
and experience. The effects of material revisions in estimates are reflected in our financial statements prospectively from
the date of the change in estimate.
We define our critical accounting policies as those accounting principles generally accepted in the United States that
require us to make subjective estimates and judgments about matters that are uncertain and are likely to have a material
impact on our financial condition and results of operations, as well as the specific manner in which we apply those
principles. While our significant accounting policies are more fully described in Note 3 to our financial statements
appearing elsewhere in this Annual Report, we believe the following are the critical accounting policies used in the
preparation of our financial statements that require significant judgments and estimates.
Revenue Recognition
We apply Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with Customers, to all
contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance,
collaboration agreements and financial instruments. Under Topic 606, an entity recognizes revenue when its customer
obtains control of promised goods and services, in an amount that reflects the consideration which the entity expects to
receive in exchange for those goods and services. To determine revenue recognition for an arrangement that an entity
determines is within the scope of Topic 606, we perform the following five steps: (i) identify the contract(s) with the
customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the
transaction price to the performance obligation in the contract; and (v) recognize revenue when (or as) we satisfy a
performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the
consideration we are entitled to in exchange for the goods or services we transfer to the customer. At contract inception,
once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each
contract and identify, as a performance obligation, and assess whether each promised good or service is distinct. We then
recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or
as) the performance obligation is satisfied.
We enter into licensing agreements which are within the scope of Topic 606, under which we license certain of our
product candidates’ rights to third parties. The terms of these arrangements typically include payment of one or more of the
following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments; and
royalties on net sales of the licensed product. In determining the appropriate amount of revenue to be recognized as we
fulfill our obligation under our agreements, we perform the five steps described above. As part of the accounting for these
arrangements, we must develop assumptions that require judgment to determine the stand-alone selling price, which may
include forecasted revenues, development timelines, reimbursement of personnel costs, discount rates and probabilities of
technical and regulatory success.
Licensing of Intellectual Property: If the license to our intellectual property is determined to be distinct from the
other performance obligations identified in the arrangement, we will recognize revenue from non-refundable, up-front fees
allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the
license. For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined
performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in
time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-
refundable, up-front-fees. We evaluate the measure of progress each reporting period, and, if necessary, adjust the measure
of performance and related revenue recognition.
Milestone Payments: At the inception of each arrangement that includes development milestone payments, we
evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the
transaction price using the most likely amount method. If it is probable that a significant revenue reversal will not occur,
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the associated milestone value is included in the transaction price. Milestone payments that are not within our control or the
licensee’s control, such as regulatory approvals, are not considered probable of being achieved until those approvals are
received. The transaction price is then allocated to each performance obligation on a relative stand-alone selling price basis,
for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each
subsequent reporting period, we re-evaluate the probability of achievement of such development milestones and any related
constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a
cumulative catch-up basis, which would affect license, collaboration and other revenues and earnings in their period of
adjustment.
Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of
sales, for which the license is deemed to be the predominant item to which royalties relate, we recognize revenue at the
later of (i) when the related sales occur, or (ii) when the performance obligation to which some of all of the royalty has
been allocated has been satisfied (or partially satisfied). To date, we have not recognized any royalty revenue from our
license agreements.
Manufacturing and Supply: Our agreements may include providing clinical and commercial manufacturing products
to the counterparties. The services are generally determined to be distinct from the other promises or performance
obligations identified in the arrangement. We recognize the transaction price allocated to these services as revenue at a
point in time when transfer of control of the related products to the customer occurs.
Stock-Based Compensation
We issue stock-based compensation awards to our employees and non-employee directors, including stock options.
We measure stock-based compensation expense related to these awards based on the fair value of the award, utilizing the
Black-Scholes-Merton option pricing model, on the date of grant and recognize stock-based compensation expense on a
straight-line basis over the requisite service period of the awards, which generally equals the vesting period. We account for
forfeitures as they occur. We grant stock options with exercise prices equal to the estimated fair value of our common stock
on the date of grant. The Black-Scholes-Merton option pricing model requires the input of various assumptions that require
management to apply judgment and make assumptions and estimates, including:
Risk-Free Interest Rate—The risk-free interest rate assumption is based on observed interest rates for constant
maturity U.S. Treasury securities consistent with the expected life of our employee stock options.
Expected Term—The expected life represents the period of time the stock options are expected to be outstanding
and is based on the simplified method. Under the simplified method, the expected life of an option is presumed to be the
midpoint between the vesting date and the end of the contractual term. We used the simplified method due to the lack of
sufficient historical exercise data to provide a reasonable basis upon which to otherwise estimate the expected life of the
stock options.
Expected Volatility— Volatility is a measure of the amount by which a financial variable such as share price has
fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. We base the expected
volatility on the historical volatility of our publicly traded common stock.
Expected Dividend Yield—We have assumed no dividend yield because we do not expect to pay dividends in the
future, which is consistent with our history of not paying dividends.
Accruals for Clinical Trial Expenses
Clinical trial costs primarily consist of expenses incurred under agreements with contract research organizations
(CROs), investigative sites, laboratory testing expenses, data management and consultants that conduct our clinical trials.
Clinical trial expenses are a significant component of research and development expenses, and we outsource a significant
portion of these clinical trial activities to third parties. The accrual for site and patient costs includes inputs such as
estimates of patient enrollment, patient cycles incurred, clinical site activations, estimated project duration and other pass-
through costs. These inputs are required to be estimated due to a lag in receiving the actual clinical information from third
parties. Payments for these activities are based on the terms of the individual arrangements, which may differ from the
pattern of costs incurred, and are reflected on the balance sheets as prepaid assets or accrued expenses. These third-party
agreements are generally cancellable, and related costs are recorded as research and development expenses as incurred.
Except for payments made in advance of services, clinical trial costs are expensed as incurred. Non-refundable advance
clinical payments for goods or services that will be used or rendered for future research and development
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activities are recorded as a prepaid asset and recognized as expense as the related goods are delivered or the related services
are performed. When evaluating the adequacy of the accrued expenses, management assessments include: (i) an evaluation
by the project manager of the work that has been completed during the period; (ii) measurement of progress prepared
internally and/or provided by the third-party service provider; (iii) analyses of data that justify the progress; and (iv) our
judgment. Significant judgments and estimates may be made in determining the accrued balances at the end of any
reporting period. Actual results could differ from the estimates made. Our historical clinical accrual estimates have not
been materially different from the actual costs. Clinical trial accruals that are due longer than one year are classified as
noncurrent accrued expenses.
Components of Operating Results
Revenue
To date, we have not generated any revenue from the sale of our drug candidates and do not expect to generate any
revenue from the sale of drugs in the near future. Substantially all of our historical revenue consisted of upfront and
milestone payments under license and collaboration agreements.
Research and Development
Research and development expenses consist of expenses incurred in performing research and development activities,
including compensation and benefits for full-time research and development employees, facilities expenses, overhead
expenses, cost of laboratory supplies, clinical trial and related clinical manufacturing expenses, fees paid to CROs and
other consultants and other outside expenses. Other preclinical research and platform programs include activities related to
exploratory efforts, target validation, lead optimization for our earlier programs and our proprietary glycomimetics
platform. Our research and development expenses relate primarily to the development of uproleselan and our other drug
candidates.
We do not currently utilize a formal time allocation system to capture expenses on a project-by-project basis because
we are organized and record expense by functional department and our employees may allocate time to more than one
development project. Accordingly, we only allocate a portion of our research and development expenses by functional area
and by drug candidate.
Research and development costs are expensed as incurred. Non-refundable advance payments for goods or services
to be received in the future for use in research and development activities are deferred and capitalized. The capitalized
amounts are expensed as the related goods are delivered or the services are performed.
Research and development activities are central to our business model. Drug candidates in later stages of clinical
development generally have higher development costs than those in earlier stages of clinical development, primarily due to
the increased size and duration of later stage clinical trials. We expect our research and development expenses to increase
over the next several years as we seek to progress uproleselan, GMI-1687 and our other drug candidates into and through
clinical development. However, it is difficult to determine with certainty the duration and completion costs of our current or
future preclinical studies and clinical trials of our drug candidates, or if, when or to what extent we will generate revenues
from the commercialization and sale of any of our drug candidates that obtain regulatory approval. We may never succeed
in achieving regulatory approval for any of our drug candidates.
The duration, costs and timing of clinical trials and development of our drug candidates will depend on a variety of
factors that include:
● per patient trial costs;
● the number of patients that participate in the trials;
● the number of sites included in the trials;
● the countries in which the trial is conducted;
● the length of time required to enroll eligible patients;
● the number of doses that patients receive;
● the drop-out or discontinuation rates of patients;
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● potential additional safety monitoring or other studies requested by regulatory agencies;
● the duration of patient follow-up; and
● the safety and efficacy profile of the drug candidate.
In addition, the probability of success for each drug candidate will depend on numerous factors, including
competition, manufacturing capability and commercial viability. We will determine which programs to pursue and how
much to fund each program in response to the scientific and clinical success of each drug candidate, as well as an
assessment of each drug candidate’s commercial potential.
General and Administrative
General and administrative expenses consist primarily of salaries and other related costs, including stock-based
compensation, for personnel in executive, finance, accounting, business development and human resources functions. Other
significant costs include facility costs not otherwise included in research and development expenses, legal fees relating to
patent and corporate matters and fees for accounting and consulting services. We anticipate that our general and
administrative expenses will increase in the future as we start to build upon our commercialization efforts for uproleselan
and continue to support our research and development activities.
Interest Income
Other income consists of interest income earned on our cash and cash equivalents.
Results of Operations
The following table sets forth our results of operations:
(dollars in thousands)
Revenue
Costs and expenses:
Research and development expense
General and administrative expense
Total costs and expenses
Loss from operations
Interest income
Net loss and comprehensive loss
Revenue
Year Ended
December 31,
2021
1,160
$
2020
$ 10,163
$
47,492
17,115
64,607
(63,447)
20
$ (63,427)
44,929
16,743
61,672
(51,509)
482
$ (51,027)
$
Increase/(Decrease)
(9,003)
(89)%
2,563
372
2,935
(11,938)
(462)
(12,400)
6 %
2 %
5 %
23 %
(96)%
24 %
During the year ended December 2021 and 2020, revenue was $1.2 million and $10.2 million, respectively, all of
which was the result of payments received under our license and collaboration agreement with Apollomics for the
development and commercialization of uproleselan and GMI-1687 in Greater China. During the year ended December 31,
2021, we recognized $1.1 million in revenue from the sale of clinical supplies to Apollomics under a clinical supply
agreement. In January 2020, we recognized $9.0 million in revenue from an upfront milestone payment, and in September
2020, we recognized a $1.0 million clinical development milestone payment.
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Research and Development Expense
The following table summarizes our research and development expense by functional area:
(dollars in thousands)
Clinical development
Manufacturing and formulation
Contract research services, consulting and other costs
Laboratory costs
Personnel-related
Stock-based compensation
Research and development expense
Year Ended
December 31,
2021
$ 19,689
12,307
2,163
2,140
8,978
2,215
$ 47,492
2020
$ 18,321
9,221
1,907
2,066
10,467
2,947
$ 44,929
The following table summarizes our research and development expense by drug candidate:
(dollars in thousands)
Uproleselan
GMI-1359
Other research and development
Personnel-related and stock-based compensation
Research and development expense
Year Ended
December 31,
2021
$ 29,781
555
5,963
11,193
$ 47,492
2020
$ 27,189
467
3,859
13,414
$ 44,929
Increase/(Decrease)
1,368
3,086
256
74
(1,489)
(732)
2,563
7 %
33 %
13 %
4 %
(14)%
(25)%
6 %
Increase/(Decrease)
2,592
88
2,104
(2,221)
2,563
10 %
19 %
55 %
(17)%
6 %
$
$
$
$
Our research and development expense for the year ended December 31, 2021 increased by $2.6 million compared to
the year ended December 31, 2020 primarily due to:
● increased clinical trial and development costs related to our ongoing global Phase 3 clinical trial of uproleselan in
individuals with relapsed/refractory AML;
● increased manufacturing costs for the uproleselan validation batches; and
● increased costs for toxicity studies of GMI-1687 included in other research and development in the drug candidate
summary table above.
These increases were partially offset by:
● decreased personnel-related and stock-based compensation due to a lower number of research and development
employees.
General and Administrative Expense
The following table sets forth the components of our general and administrative expense:
(dollars in thousands)
Personnel-related
Stock-based compensation
Legal, consulting and other professional expenses
Other
General and administrative expense
Year Ended
December 31,
2021
$ 5,788
3,872
6,652
803
$ 17,115
2020
$ 6,275
3,955
5,819
694
$ 16,743
$
$
Increase/(Decrease)
(487)
(83)
833
109
372
(8)%
(2)%
14 %
16 %
2 %
General and administrative expense increased for the year ended December 31, 2021 by $372,000, or 2%, compared
to 2020. Personnel-related expenses decreased due to a reversal of accruals for performance and retention bonuses that our
prior Chief Executive Officer was eligible to receive but which were forfeited upon her cessation of
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service in that role in 2021. These decreases were offset by higher recruiting, consulting and legal expenses incurred in the
year ended December 31, 2021 as compared to 2020.
Interest Income
During the year ended December 31, 2021, interest income decreased by $462,000, compared to the same period in
2020, due to lower average cash balances and lower interest rates on those balances.
Liquidity and Capital Resources
Sources of Liquidity
We have historically financed our operations primarily through public offerings and private placements of our capital
stock, including sales agreements with Cowen, and upfront and milestone payments from our license and collaboration
agreements. As of December 31, 2021, we had $90.3 million in cash and cash equivalents.
In October 2020, we filed a prospectus supplement to a shelf registration statement that we filed in May 2019 and
entered into an at-the-market sales agreement, or the 2020 Sales Agreement, with Cowen. Under the 2020 Sales
Agreement, we may sell up to $100.0 million of our common stock registered under the shelf registration statement that we
filed in May 2019. During the year ended December 31, 2020, we sold 1,024,760 shares of common stock under the 2020
Sales Agreement at a weighted average price of $3.74 per share, for aggregate net proceeds of $3.7 million, after deducting
commissions and offering expenses. During the year ended December 31, 2021, we sold an additional 3,092,603 shares of
common stock under the 2020 Sales Agreement at a weighted average price of $3.57 per share, for aggregate net proceeds
of $10.7 million, after deducting commissions and offering expenses. As of December 31, 2021, we have approximately
$85.1 million remaining available to be sold under the terms of the 2020 Sales Agreement. Subsequent to December 31,
2021, there have been no additional sales under the 2020 Sales Agreement.
We entered into a collaboration and license agreement with Apollomics in January 2020 and are potentially eligible
to earn milestone payments and royalties under that agreement. In January 2020, Apollomics made an upfront payment to
us of $9.0 million. We also received a non-refundable payment of $1.0 million in September 2020 as a clinical development
milestone payment. Our ability to earn additional milestone payments and potential royalty payments and their timing will
be dependent upon the outcome of Apollomics’ activities and is therefore uncertain at this time.
Funding Requirements
Our primary uses of capital are, and we expect will continue to be, compensation and related expenses, third-party
clinical research and development services, laboratory and related supplies, clinical costs, legal and other regulatory
expenses and general overhead costs.
As of December 31, 2021, our significant contractual obligations consisted solely of rent obligations under a non-
cancelable lease, as amended, for our current office space in Rockville, Maryland, which has a term through October 2023.
Total remaining obligations under this lease as of December 31, 2021 were $2.0 million. We have no other fixed long-term
obligations and we do not have significant capital expenditure requirements.
We have also entered into various agreements for services with third-party vendors, including agreements to conduct
clinical trials, to manufacture products, and for consulting and other contracted services. These agreements include
cancellable terms and we accrue the costs of these agreements based on estimates of work completed to date.
The successful development of any of our drug candidates is highly uncertain. As such, at this time, we cannot
reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the remainder of
the development of uproleselan or our other drug candidates. We are also unable to predict when, if ever, material net cash
inflows will commence from uproleselan or our other drug candidates. This is due to the numerous risks and uncertainties
associated with developing drugs, including the uncertainty of:
●
●
successful enrollment in, and completion of, clinical trials;
receipt of marketing approvals from applicable regulatory authorities;
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●
●
●
●
establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;
obtaining and maintaining patent and trade secret protection and regulatory exclusivity for drug candidates;
launching commercial sales of drugs, if and when approved, whether alone or in collaboration with others; and
obtaining and maintaining healthcare coverage and adequate reimbursement.
A change in the outcome of any of these variables with respect to the development of any of our drug candidates
would significantly change the costs and timing associated with the development of that drug candidate. Because our drug
candidates are in various stages of clinical and preclinical development and the outcome of these efforts is uncertain, we
cannot estimate the actual amounts necessary to successfully complete the development and commercialization of our drug
candidates or whether, or when, we may achieve profitability. Until such time, if ever, as we can generate substantial
product revenues, we expect to finance our cash needs through a combination of equity or debt financings and collaboration
arrangements, including our existing license agreement with Apollomics. Except for amounts that we may sell under our
2020 Sales Agreement with Cowen, and Apollomics’ conditional obligations to make milestone and royalty payments to us
under our license agreement, we do not have any committed external source of liquidity.
To the extent that we raise additional capital through the future sale of equity or debt, the ownership interest of our
stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely
affect the rights of our existing common stockholders. If we raise additional funds through the issuance of convertible debt
securities, these securities could contain covenants that would restrict our operations.
We may require additional capital beyond our currently anticipated amounts. Additional capital may not be available
on reasonable terms, or at all. If we raise additional funds through collaboration arrangements in the future, we may have to
relinquish valuable rights to our drug candidates or grant licenses on terms that may not be favorable to us. If we are unable
to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or
terminate our drug development or future commercialization efforts or grant rights to develop and market drug candidates
that we would otherwise prefer to develop and market ourselves.
Going Concern
The accompanying financial statements included in this Annual Report have been prepared assuming that we will
continue as a going concern within one year after the date that the financial statements are issued. During 2021, we
incurred a net loss of $63.4 million and had net cash flows used in operating activities of $57.5 million. At December 31,
2021, we had $90.3 million in cash and cash equivalents and had no committed source of additional funding from either
debt or equity financings. Management believes that given our current cash position and forecasted negative cash flows
from operating activities over the next twelve months as we continue our product development activities, including the
completion of our planned Phase 3 clinical trial of uproleselan, there is substantial doubt about our ability to continue as a
going concern beyond the date that is one year from the date that these financial statements are issued, without obtaining
additional financing or entering into another form of non-equity or debt arrangement.
Outlook
Based on our research and development plans and our timing expectations related to the progress of our programs,
we expect that our existing cash and cash equivalents will enable us to fund our operating expenses and capital expenditure
requirements into the second quarter of 2023. We have based this estimate on assumptions that may prove to be wrong, and
we could use our capital resources sooner than we expect. Additionally, the process of testing drug candidates in clinical
trials is costly, and the timing of progress in these trials is uncertain.
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Cash Flows
The following table summarizes our cash flows:
(in thousands)
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
Net change in cash and cash equivalents
Year Ended December 31,
2021
2020
$ (57,489) $ (39,242)
(68)
18,144
$ (46,780) $ (21,166)
(15)
10,724
In assessing cash used in operating activities, we consider several principal factors: (i) net loss for the period; (ii)
adjustments for non-cash charges including stock-based compensation expense and depreciation and amortization of
property and equipment; and (iii) the extent to which receivables, accounts payable and other liabilities, or other working
capital components increase or decrease.
Operating Activities
Net cash used in operating activities was $57.5 million during the year ended December 31, 2021 compared to $39.2
million during the year ended December 31, 2020. For the years ended December 31, 2021 and 2020, we received $1.1
million and $10.2 million, respectively, in revenue under our agreements with Apollomics for the development and
commercialization of uproleselan and GMI-1687 in Greater China. For the year ended December 31, 2021, there was
increased spending in clinical development and manufacturing expenses as a result of ongoing costs associated with our
uproleselan clinical development programs in our global Phase 3 clinical trial and the NCI-sponsored Phase 2/3 trial.
Investing Activities
Net cash used in investing activities, consisting of purchases of scientific equipment and computers, was $15,000 for
the year ended December 31, 2021 compared to $68,000 during the year ended December 31, 2020.
Financing Activities
Net cash provided by financing activities of $10.7 million and $18.1 million during the years ended December 31,
2021 and 2020, respectively, consisted primarily of the net proceeds received from our at-the-market facility with Cowen.
During the year ended December 31, 2020, we also received $319,000 in proceeds from stock option exercises.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The market risk inherent in our financial instruments and in our financial position represents the potential loss arising
from adverse changes in interest rates. As of December 31, 2021 and 2020, we had cash and cash equivalents of $90.3
million and $137.0 million, respectively. We generally hold our cash in interest-bearing money market accounts. Our
primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest
rates. Due to the short-term maturities of our cash equivalents and the low risk profile of our investments, an immediate
100 basis point change in interest rates would not have a material effect on the fair market value of our cash equivalents.
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and related financial statement schedules required to be filed are listed in Part IV, Item 15 of
this Form 10-K.
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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ITEM 9A.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the supervision of and with the participation of our management, including our chief executive officer, who is
our principal executive officer, and our chief financial officer, who is our principal financial officer, we conducted an
evaluation of the effectiveness of our disclosure controls and procedures as of December 31, 2021, the end of the period
covered by this Annual Report. The term “disclosure controls and procedures,” as set forth in Rules 13a-15(e) and 15d-
15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures
of a company that are designed to provide reasonable assurance that information required to be disclosed by a company in
the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms promulgated by the SEC. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports
that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including
its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required
disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in
evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure
controls and procedures as of December 31, 2021, our chief executive officer and chief financial officer concluded that, as
of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Report on Internal Control over Financial Reporting and Attestation Report of the Registered Public
Accounting Firm
Our management is responsible for establishing and maintaining an adequate system of internal control over financial
reporting, as defined in the Exchange Act Rule 13a-15(f). Management conducted an assessment of our internal control
over financial reporting based on the original framework established in 2013 by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control—Integrated Framework. Based on the assessment,
management concluded that, as of December 31, 2021, our internal control over financial reporting was effective.
This Annual Report does not include an attestation report of our registered public accounting firm regarding the
effectiveness of internal control over financial reporting as required by Section 404(b) of the Sarbanes-Oxley Act of 2002.
Management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC
that permit smaller reporting companies to provide only management’s report in this Annual Report.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting identified in connection with the evaluation
required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended December 31, 2021
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
We will file a definitive proxy statement for our 2022 annual meeting of stockholders, or the 2022 Proxy Statement,
with the SEC, pursuant to Regulation 14A, not later than 120 days after the end of our fiscal year. Accordingly, certain
information required by Part III has been omitted under General Instruction G(3) to Form 10-K. Only those sections of the
2022 Proxy Statement that specifically address the items set forth herein are incorporated by reference.
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by Item 10 is hereby incorporated by reference to the relevant information to be included in
the 2022 Proxy Statement under the captions “Information Regarding the Board of Directors and Corporate Governance,”
“Election of Directors” and “Executive Officers.”
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 is hereby incorporated by reference to the relevant information to be included in
the 2022 Proxy Statement under the captions “Executive Compensation” and “Non-Employee Director Compensation.”
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
The information required by Item 12 is hereby incorporated by reference to the relevant information to be included in
the 2022 Proxy Statement under the captions “Security Ownership of Certain Beneficial Owners and Management” and
“Securities Authorized for Issuance under Equity Compensation Plans.”
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
The information required by Item 13 is hereby incorporated by reference to the relevant information to be included in
the 2022 Proxy Statement under the captions “Transactions with Related Persons” and “Independence of the Board of
Directors.”
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
The information required by Item 14 is hereby incorporated by reference to the relevant information to be included in
the 2022 Proxy Statement under the caption “Ratification of Selection of Independent Auditors.”
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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Annual Report on Form 10-K:
(1) Financial Statements:
PART IV
Report of Ernst & Young LLP, Independent Registered Public Accounting Firm
Balance Sheets
Statements of Operations and Comprehensive Loss
Statements of Stockholders’ Equity
Statements of Cash Flows
Notes to Financial Statements
73
75
76
77
78
79
(2) Financial Statement Schedules:
All financial statement schedules have been omitted because they are not applicable, not required or the
information required is shown in the financial statements or the notes thereto.
(3) Exhibits
Exhibit
Number
3.1(1)
3.2(2)
4.1(3)
4.2(4)
Description of Document
Amended and Restated Certificate of Incorporation.
Amended and Restated Bylaws.
Specimen stock certificate evidencing shares of Common Stock.
Description of Certain of Registrant’s Securities.
10.1+(5)
2003 Stock Incentive Plan, as amended.
10.2+(6)
Form of Incentive Stock Option Agreement under 2003 Stock Incentive Plan.
10.3+(7)
Form of Nonqualified Stock Option Agreement under 2003 Stock Incentive Plan.
10.4+(8)
2013 Equity Incentive Plan.
10.5+(9)
Form of Stock Option Grant Notice and Stock Option Agreement under 2013 Equity Incentive Plan.
10.6+(10)
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under 2013
Equity Incentive Plan.
10.7+(11)
2013 Employee Stock Purchase Plan.
10.8+(12)
Form of Indemnification Agreement.
10.9+(13)
Executive Employment Agreement, dated as of August 3, 2021, by and between the Registrant and Harout
Semerjian.
10.10+(14) Amended and Restated Executive Employment Agreement, dated as of July 30, 2019, by and between the
Registrant and Brian Hahn.
10.11+(15) Amended and Restated Executive Employment Agreement, dated as of July 30, 2019, by and between the
Registrant and John Magnani.
10.12+(16) Amended and Restated Executive Employment Agreement, dated as of July 30, 2019, by and between the
Registrant and Armand Girard.
10.13+
10.14+
Consulting Agreement, dated as of August 31, 2021, by and between the Registrant and Rachel King.
Amended and Restated Non-Employee Director Compensation Policy.
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Exhibit
Number
10.15(17)
Lease Agreement, dated July 23, 2014, by and between the Registrant and BMR-Medical Center Drive,
LLC.
Description of Document
10.16(18)
Sales Agreement, dated October 7, 2020 by and between the Registrant and Cowen and Company, LLC.
10.17(19)
First Amendment to Lease, dated March 24, 2016, by and between the Registrant and BMR-Medical
Center Drive LLC.
10.18*(20)
Collaboration and License Agreement, dated January 2, 2020, by and between the Registrant and
Apollomics (Hong Kong) Limited.
10.19+
GlycoMimetics, Inc. Amended and Restated Inducement Plan dated as of January 21, 2022.
10.20+(21)
Form of Stock Option Grant Notice and Stock Option Agreement under the GlycoMimetics, Inc.
Inducement Plan.
23.1
24.1
31.1
31.2
32.1ᶺ
Consent of Ernst & Young LLP, independent registered public accounting firm.
Power of Attorney (contained on signature page hereto).
Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under
the Securities Exchange Act of 1934, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of
2002.
Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) promulgated under
the Securities Exchange Act of 1934, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of
2002.
Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) and
15d-14(b) promulgated under the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350, as adopted
pursuant to section 906 of The Sarbanes-Oxley Act of 2002.
101.INS
XBRL Instance Document (the instance document does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document)
101.SCH
Inline XBRL Taxonomy Extension Schema Document
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104
ᶺ
+
*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
These certifications are being furnished solely to accompany this Annual Report pursuant to 18 U.S.C. Section 1350,
and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to
be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless
of any general incorporation language in such filing.
Indicates management contract or compensatory plan.
Certain portions of this exhibit (indicated by asterisks) have been omitted because they are not material and would
likely cause competitive harm to the registrant if publicly disclosed.
(1) Previously filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the
Commission on January 15, 2014, and incorporated by reference herein.
(2) Previously filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the
Commission on January 15, 2014, and incorporated by reference herein.
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(3) Previously filed as Exhibit 4.2 to Amendment No. 2 to the Registrant’s Registration Statement on Form S-1
(File No. 333-191567), filed with the Commission on October 31, 2013, and incorporated by reference herein.
(4) Previously filed as Exhibit 4.2 to the Registrant’s Annual Report on Form 10-K (File No. 001-36177), filed with the
Commission on February 28, 2020, and incorporated by reference herein.
(5) Previously filed as Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1 (File No. 333-191567), filed
with the Commission on October 4, 2013, and incorporated by reference herein.
(6) Previously filed as Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1 (File No. 333-191567), filed
with the Commission on October 4, 2013, and incorporated by reference herein.
(7) Previously filed as Exhibit 10.10 to the Registrant’s Registration Statement on Form S-1 (File No. 333-191567), filed
with the Commission on October 4, 2013, and incorporated by reference herein.
(8) Previously filed as Exhibit 10.11 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1
(File No. 333-191567), filed with the Commission on October 28, 2013, and incorporated by reference herein.
(9) Previously filed as Exhibit 10.12 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1
(File No. 333-191567), filed with the Commission on October 28, 2013, and incorporated by reference herein.
(10) Previously filed as Exhibit 10.13 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1
(File No. 333-191567), filed with the Commission on October 28, 2013, and incorporated by reference herein.
(11) Previously filed as Exhibit 10.14 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1
(File No. 333-191567), filed with the Commission on October 28, 2013, and incorporated by reference herein.
(12) Previously filed as Exhibit 10.15 to Amendment No. 1 to the Registrant’s Registration Statement on Form S-1
(File No. 333-191567), filed with the Commission on October 28, 2013, and incorporated by reference herein.
(13) Previously filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36177), filed with
the Commission on November 2, 2021, and incorporated by reference herein.
(14) Previously filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36177), filed with
the Commission on August 1, 2019, and incorporated by reference herein.
(15) Previously filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36177), filed with
the Commission on August 1, 2019, and incorporated by reference herein.
(16) Previously filed as Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36177), filed with
the Commission on August 1, 2019, and incorporated by reference herein.
(17) Previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the
Commission on July 28, 2014, and incorporated by reference herein.
(18) Previously filed as Exhibit 1.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the
Commission on October 7, 2020, and incorporated by reference herein.
(19) Previously filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the
Commission on March 29, 2016, and incorporated by reference herein.
(20) Previously filed as Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K (File No. 001-36177), filed with the
Commission on February 28, 2020, and incorporated by reference herein.
(21) Previously filed as Exhibit 10.22 to the Registrant’s Annual Report on Form 10-K (File No. 001-36177), filed with the
Commission on February 28, 2020, and incorporated by reference herein.
ITEM 16. FORM 10-K SUMMARY
Not applicable.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SIGNATURES
GLYCOMIMETICS, INC.
By: /s/ Harout Semerjian
Harout Semerjian
President and Chief Executive Officer
March 3, 2022
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints
Harout Semerjian and Brian M. Hahn, jointly and severally, as his or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this Annual
Report on Form 10-K of GlycoMimetics, Inc., and any or all amendments thereto, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises
hereby ratifying and confirming all that said attorneys-in-fact and agents, or his, her or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Harout Semerjian
Harout Semerjian
/s/ Brian M. Hahn
Brian M. Hahn
/s/ Patricia S. Andrews
Patricia S. Andrews
/s/ Mark A. Goldberg, M.D.
Mark A. Goldberg M.D.
/s/ Scott T. Jackson
Scott T. Jackson
/s/ Daniel M. Junius
Daniel M. Junius
/s/ Rachel K. King
Rachel K. King
/s/ Scott Koenig, M.D., Ph.D.
Scott Koenig, M.D., Ph.D.
/s/ Timothy Pearson
Timothy Pearson
President, Chief Executive Officer and Director
(Principal Executive Officer)
Chief Financial Officer
(Principal Financial Officer and Principal Accounting
Officer)
Director
Director
Director
Director
Director
Director
Director
71
March 3, 2022
March 3, 2022
March 3, 2022
March 3, 2022
March 3, 2022
March 3, 2022
March 3, 2022
March 3, 2022
March 3, 2022
Table of Contents
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)
Balance Sheets as of December 31, 2021 and 2020
Statements of Operations and Comprehensive Loss for the years ended December 31, 2021, 2020 and 2019
Statements of Stockholders’ Equity for the years ended December 31, 2021, 2020 and 2019
Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019
Notes to Financial Statements
73
75
76
77
78
79
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Report of Independent Registered Public Accounting Firm
To the Shareholders and the Board of Directors of GlycoMimetics, Inc.
Opinion on the Financial Statements
We have audited the accompanying balance sheets of GlycoMimetics, Inc. (the Company) as of December 31, 2021 and
2020, the related statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the
three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial
statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the
Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in
the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.
The Company's Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.
As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations and has
stated that substantial doubt exists about the Company’s ability to continue as a going concern without obtaining additional
funding or entering into another form of non-equity or debt arrangement. Management's evaluation of the events and
conditions and management’s plans regarding these matters are also described in Note 2. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion
on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and
Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement,
whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control
over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test
basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the
accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements
that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex
judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial
statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the account or disclosure to which it relates.
Accrued Clinical Trial Expenses
Description of the
Matter
As discussed in Note 3 to the financial statements, the Company records costs for clinical trial
activities based upon estimates of costs incurred through the balance sheet date that have yet
to be invoiced by the contract research organizations, investigative sites, and other consultants.
The Company’s accrued expenses of $8.7 million at December 31, 2021 include accrued
clinical trial expenses, and the Company’s research and development costs and
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How We Addressed
the Matter in Our
Audit
expenses of $47.5 million for the year ended December 31, 2021 include 2021 clinical trial
expenses.
Auditing the Company’s accruals for clinical trials was challenging due to the multiple sources
of information used to evaluate the Company’s estimated accruals. In addition, in certain
circumstances, the determination of the work that has been completed and measurement of
progress during the reporting period required judgment because the timing and pattern of
vendor invoicing may not correspond to the level of services provided and there may be delays
in receiving clinical information from investigative sites and other consultants.
To evaluate the accrual for clinical expenses, our audit procedures included, among others,
reading certain contracts with contract research organizations and clinical study sites to
evaluate financial and certain other contractual terms, testing the completeness and accuracy
of the underlying data used in the estimates, and evaluating the significant assumptions. For
example, we evaluated patient enrollment, patient cycles incurred, clinical site activations,
estimated project duration, and other pass-through costs, that are used by management to
estimate the recorded accruals. We assessed the reasonableness of the significant assumptions.
For example, we corroborated the progress of clinical trials with the Company’s clinical team
and inspected information from third parties related to active patient sites and currently
enrolled patients. We also examined subsequent invoices from the service providers and cash
disbursements to the service providers, to the extent such invoices were received, or payments
were made prior to the date that the financial statements were issued.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2011.
Baltimore, Maryland
March 3, 2022
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GLYCOMIMETICS, INC.
Balance Sheets
Assets
Current assets:
Cash and cash equivalents
Prepaid expenses and other current assets
Total current assets
Property and equipment, net
Prepaid research and development expenses
Deposits
Operating lease right-of-use asset
Total assets
Liabilities & stockholders’ equity
Current liabilities:
Accounts payable
Accrued expenses
Lease liabilities
Total current liabilities
Noncurrent accrued expenses
Lease liabilities, net of current portion
Total liabilities
Stockholders’ equity:
Preferred stock; $0.001 par value; 5,000,000 shares authorized, no shares issued
and outstanding at December 31, 2021 and December 31, 2020
Common stock; $0.001 par value; 100,000,000 shares authorized; 52,313,894
shares issued and outstanding at December 31, 2021; 49,017,622 shares issued
and outstanding at December 31, 2020
Additional paid-in capital
Accumulated deficit
Total stockholders’ equity
Total liabilities and stockholders’ equity
See accompanying notes.
75
December 31,
2021
2020
$
$
$
90,254,890
533,804
90,788,694
368,842
1,560,607
52,320
1,576,185
94,346,648
$ 137,035,017
1,238,328
138,273,345
620,673
1,560,607
52,320
2,325,224
$ 142,832,169
$
2,107,615
8,715,368
1,001,407
11,824,390
—
918,607
12,742,997
2,089,939
9,439,881
898,549
12,428,369
264,329
1,920,015
14,612,713
—
—
52,314
454,448,327
(372,896,990)
81,603,651
94,346,648
$
49,018
437,639,991
(309,469,553)
128,219,456
$ 142,832,169
Table of Contents
GLYCOMIMETICS, INC.
Statements of Operations and Comprehensive Loss
Revenue from collaboration and license agreements
Costs and expenses:
Research and development expense
General and administrative expense
Total costs and expenses
Loss from operations
Interest income
Net loss and comprehensive loss
Basic and diluted net loss per common share
Basic and diluted weighted-average number of common shares
outstanding
See accompanying notes.
76
Year Ended December 31,
2021
2020
2019
$
1,159,767 $ 10,162,935 $
—
47,491,567
17,115,405
64,606,972
(63,447,205)
19,768
44,929,198
16,743,127
61,672,325
(51,509,390)
482,487
47,029,264
14,360,038
61,389,302
(61,389,302)
3,497,391
$ (63,427,437) $ (51,026,903) $ (57,891,911)
(1.34)
$
(1.12) $
(1.23) $
51,453,204
45,721,139
43,254,782
Table of Contents
GLYCOMIMETICS, INC.
Statements of Stockholders’ Equity
Balance at December 31, 2018
Exercise of options and vesting of restricted stock
units
Stock-based compensation
Net loss
Balance at December 31, 2019
Issuance of common stock, net of issuance costs
Exercise of options and vesting of restricted stock
units
Stock-based compensation
Net loss
Balance at December 31, 2020
Issuance of common stock, net of issuance costs
Exercise of options and vesting of restricted stock
units
Stock-based compensation
Net loss
Common Stock
Shares
43,160,751
Amount
$ 43,159
Additional
Paid-In
Capital
$ 405,972,075
Accumulated
Deficit
Total
Stockholders’
Equity
$ (200,550,739) $ 205,464,495
306,182
—
—
43,466,933
5,161,502
306
—
—
43,465
5,163
389,187
—
—
390
—
—
412,607
6,215,090
—
412,599,772
17,819,554
318,907
6,901,758
49,017,622
3,092,603
49,018
3,092
437,639,991
10,696,225
—
—
(57,891,911)
(258,442,650)
—
412,913
6,215,090
(57,891,911)
154,200,587
17,824,717
—
—
—
319,297
6,901,758
(51,026,903)
$ (309,469,553) $ 128,219,456
10,699,317
(51,026,903)
—
203,669
—
—
204
—
—
24,825
6,087,286
—
—
25,029
6,087,286
(63,427,437)
$ (372,896,990) $ 81,603,651
(63,427,437)
—
Balance at December 31, 2021
52,313,894
$ 52,314
$ 454,448,327
See accompanying notes.
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Table of Contents
GLYCOMIMETICS, INC.
Statements of Cash Flows
Operating activities
Net loss
Adjustments to reconcile net loss to net cash used in operating
activities:
Depreciation
Loss on disposal of assets
Non-cash lease expense
Stock-based compensation
Changes in assets and liabilities:
Prepaid expenses and other current assets
Accounts payable
Accrued expenses
Lease liabilities
Net cash used in operating activities
Investing activities
Purchases of property and equipment
Net cash used in investing activities
Financing activities
Proceeds from issuance of common stock, net of issuance costs
Proceeds from exercise of stock options
Net cash provided by financing activities
Net change in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
See accompanying notes.
78
2021
Year Ended December 31,
2020
2019
$ (63,427,437)
$ (51,026,903)
$ (57,891,911)
264,600
2,174
749,039
6,087,286
270,754
—
680,845
6,901,758
279,234
—
620,068
6,215,090
704,524
17,676
(988,842)
(898,550)
(57,489,530)
3,087,994
654,279
993,420
(804,078)
(39,241,931)
(2,059,260)
(1,227,919)
2,709,986
(629,427)
(51,984,139)
(14,943)
(14,943)
(68,507)
(68,507)
(144,928)
(144,928)
10,699,317
25,029
10,724,346
(46,780,127)
137,035,017
$ 90,254,890
17,824,717
319,297
18,144,014
(21,166,424)
158,201,441
$ 137,035,017
—
412,913
412,913
(51,716,154)
209,917,595
$ 158,201,441
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GLYCOMIMETICS, INC.
Notes to Financial Statements
1. Description of the Business
GlycoMimetics, Inc. (the Company), a Delaware corporation headquartered in Rockville, Maryland, was
incorporated in 2003. The Company is a clinical stage biotechnology company focused on the discovery and development
of novel glycomimetic drugs to address unmet medical needs resulting from diseases in which carbohydrate biology plays a
key role. Glycomimetics are molecules that mimic the structure of carbohydrates involved in important biological
processes. Using its expertise in carbohydrate chemistry and knowledge of carbohydrate biology, the Company is
developing a pipeline of proprietary glycomimetics that inhibit disease-related functions of carbohydrates, such as the roles
they play in inflammation, cancer and infection.
2. Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going
concern within one year after the date that the financial statements are issued. During 2021, the Company incurred a net
loss of $63.4 million and had net cash flows used in operating activities of $57.5 million. At December 31, 2021, the
Company had $90.3 million in cash and cash equivalents and had no committed source of additional funding from either
debt or equity financings. Management believes that given the Company’s current cash position and forecasted negative
cash flows from operating activities over the next twelve months, including the completion of its planned Phase 3 clinical
trial of uproleselan, there is substantial doubt about its ability to continue as a going concern after the date that is one year
from the date that these financial statements are issued, without obtaining additional financing or entering into another form
of non-equity or debt arrangement.
The Company’s ability to fund its operations is dependent upon management’s plans, which include raising
additional capital in the near term primarily through a combination of equity and debt financings, collaborations, strategic
alliances and marketing, distribution or licensing arrangements and in the longer term, from revenue related to product
sales, to the extent its product candidates receive marketing approval and can be commercialized. There can be no
assurances that new financings or other transactions will be available to us on commercially acceptable terms, or at all.
Also, any collaborations, strategic alliances and marketing, distribution or licensing arrangements may require the
Company to give up some or all of its rights to a product or technology, which in some cases may be at less than the full
potential value of such rights. If the Company is unable to obtain additional capital, the Company will assess its capital
resources and may be required to delay, reduce the scope of or eliminate some or all of our operations, which may have a
material adverse effect on our business, financial condition, results of operations and ability to operate as a going concern.
The financial statements do not include any adjustments that might be necessary if the Company is not able to
continue as a going concern.
3. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements were prepared based on the accrual method of accounting in accordance with
U.S. generally accepted accounting principles (GAAP).
Segment Information
Operating segments are defined as components of an enterprise about which separate discrete information is available
for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and
in assessing performance. The Company views its operations and manages its business in one segment, which is the
identification and development of glycomimetic compounds.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting periods. Although actual
results could differ from those estimates, management does not believe that such differences would be material.
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Cash and Cash Equivalents
Cash and cash equivalents consist of investment in money market funds with commercial banks and financial
institutions. The Company considers all investments in highly liquid financial instruments with an original maturity of three
months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at amortized cost, plus accrued
interest, which approximates fair value.
Fair Value Measurements
The Company’s financial instruments include cash and cash equivalents. The fair values of the financial instruments
approximated their carrying values at December 31, 2021 and 2020, due to their short-term maturities. The Company
accounts for recurring and nonrecurring fair value measurements in accordance with ASC 820, Fair Value Measurements.
ASC 820 defines fair value, establishes a fair value hierarchy for assets and liabilities measured at fair value, and requires
expanded disclosures about fair value measurements. The ASC hierarchy ranks the quality of reliability of inputs, or
assumptions, used in the determination of fair value, and requires assets and liabilities carried at fair value to be classified
and disclosed in one of the following three categories:
● Level 1—Fair value is determined by using unadjusted quoted prices that are available in active markets for
identical assets and liabilities.
● Level 2—Fair value is determined by using inputs, other than Level 1 quoted prices, that are directly and
indirectly observable. Inputs can include quoted prices for similar assets and liabilities in active markets or
quoted prices for identical assets and liabilities in inactive markets. Related inputs can also include those used in
valuation or other pricing models that can be corroborated by observable market data.
● Level 3—Fair value is determined by inputs that are unobservable and not corroborated by market data. Use of
these inputs involves significant and subjective judgments to be made by a reporting entity. In instances where
the determination of the fair value measurement is based on inputs from different levels of fair value hierarchy,
the fair value measurement will fall within the lowest level input that is significant to the fair value measurement
in its entirety.
The Company periodically evaluates financial assets and liabilities subject to fair value measurements to determine
the appropriate level at which to classify them each reporting period. This determination requires the Company to make
subjective judgments as to the significance of inputs used in determining fair value and where such inputs lie within the
ASC 820 hierarchy.
The Company had no assets or liabilities that were measured using quoted prices for similar assets and liabilities or
significant unobservable inputs (Level 2 and Level 3 assets and liabilities, respectively) either on a recurring or non-
recurring basis as of December 31, 2021 and 2020. The carrying value of cash held in money market funds of
approximately $88.3 million and $135.0 million as of December 31, 2021 and 2020, respectively, is included in cash and
cash equivalents and approximates market values based on quoted market prices (Level 1 inputs). The Company did not
transfer any assets measured at fair value on a recurring basis between levels during the years ended December 31, 2021
and 2020.
Concentration of Credit Risk
Credit risk represents the risk that the Company would incur a loss if counterparties failed to perform pursuant to the
terms of their agreements. Financial instruments that potentially expose the Company to concentrations of credit risk
consist primarily of cash and cash equivalents. Cash and cash equivalents consist of investment in money market funds
with major financial institutions in the United States. These deposits and funds may be redeemed upon demand and,
therefore, bear minimal risk. The Company does not anticipate any losses on such balances.
Property and Equipment
Property and equipment are recorded at cost and depreciated on a straight-line basis over estimated useful lives
ranging from three to seven years. Upon retirement or disposition of assets, the costs and related accumulated depreciation
are removed from the accounts and any resulting gain or loss is included in the results of operations. Expenditures for
repairs and maintenance are charged to operations as incurred; major replacements that extend the
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useful life are capitalized. Depreciation and amortization are computed using the straight-line method over the following
estimated useful lives:
Furniture and fixtures
Laboratory equipment
Office equipment
Computer equipment
Leasehold improvements
Impairment of Long-Lived Assets
ESTIMATED USEFUL LIVES
7 years
5 years
5 years
5 years
Shorter of lease term or useful life
The Company periodically assesses the recoverability of the carrying value of its long-lived assets in accordance with
the provisions of ASC 360, Property, Plant, and Equipment. ASC 360 requires that long-lived assets and certain
identifiable intangible assets be reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of
the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If the carrying
value exceeds the sum of undiscounted cash flows, the Company then determines the fair value of the underlying asset.
Any impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the
estimated fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value,
less costs to sell. As of December 31, 2021 and 2020, the Company determined that there were no impaired assets and it
had no assets held for sale.
Revenue Recognition
The Company applies Accounting Standards Codification, or ASC, Topic 606, Revenue from Contracts with
Customers (Topic 606), to all contracts with customers, except for contracts that are within the scope of other standards,
such as leases, insurance, collaboration arrangements and financial instruments. Under Topic 606, an entity recognizes
revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which
the entity expects to receive in exchange for those goods and services. To determine revenue recognition for arrangements
that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the
contract(s) with the customer(s); (ii) identify the performance obligations in the contract; (iii) determine the transaction
price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or
as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is
probable that the entity will collect the consideration it is entitled to in exchange for the goods and services it transfers to
the customer. At contract inception, the Company assesses the goods or services promised within each contract that falls
under the scope of Topic 606, determines those that are performance obligations and assesses whether each promised good
or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the
respective performance obligation when (or as) the performance obligation is satisfied.
The Company enters into licensing agreements which are within the scope of Topic 606, under which it licenses
certain of its drug candidates’ rights to third parties. The terms of these arrangements typically include payment of one or
more of the following: non-refundable, up-front license fees; development, regulatory and commercial milestone payments;
and royalties on net sales of the licensed product, if and when earned. See Note 11 for additional information regarding the
Company’s license agreements.
In determining the appropriate amount of revenue to be recognized as it fulfills its obligation under each of its
agreements, the Company performs the five steps under Topic 606 described above. As part of the accounting for these
arrangements, the Company must develop assumptions that require judgment to determine the stand-alone selling price,
which may include forecasted revenues, development timelines, reimbursement of personnel costs, discount rates and
probabilities of technical and regulatory success.
Licensing of Intellectual Property: If the license to the Company’s intellectual property is determined to be distinct
from the other performance obligations identified in the arrangement, the Company recognizes revenue from non-
refundable, up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to
use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to
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assess the nature of the combined performance obligation to determine whether the combined performance obligation is
satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of
recognizing revenue from non-refundable, up-front fees. The Company evaluates the measure of progress each reporting
period, and, if necessary, adjusts the measure of performance and related revenue recognition.
Milestone Payments: At the inception of each arrangement that includes development milestone payments, the
Company evaluates whether the milestones are considered probable of being reached and estimates the amount to be
included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal
will not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within
the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved
until those approvals are received. The transaction price is then allocated to each performance obligation on a relative
stand-alone selling price basis, for which the Company recognizes revenue as or when the performance obligations under
the contract are satisfied. At the end of each subsequent reporting period, the Company re-evaluates the probability of
achievement of such development milestones and any related constraint and, if necessary, adjusts its estimate of the overall
transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect license,
collaboration and other revenues and earnings in their period of adjustment.
Royalties: For arrangements that include sales-based royalties, including milestone payments based on the level of
sales, and for which the license is deemed to be the predominant item to which royalties relate, the Company recognizes
revenue at the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the
royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty
revenue from its license agreements.
Manufacturing and Supply: The obligations under the Company’s agreements may include clinical and commercial
manufacturing products to be provided by the Company to the counterparty. The services are generally determined to be
distinct from the other promises or performance obligations identified in the arrangement. The Company recognizes the
transaction price allocated to these services as revenue at a point in time when transfer of control of the related products to
the customer occurs.
Research and Development Costs
Except for payments made in advance of services, research and development costs are expensed as incurred. For
payments made in advance, the Company recognizes research and development expense as the services are rendered.
Research and development costs primarily consist of salaries and related expenses for personnel, laboratory supplies and
raw materials, sponsored research, depreciation of laboratory facilities and leasehold improvements, and utilities costs
related to research space. Other research and development expenses include fees paid to consultants and outside service
providers including clinical research organizations and clinical manufacturing organizations.
Accruals for Clinical Trial Expenses
Clinical trial costs primarily consist of expenses incurred under agreements with contract research organizations
(CROs), investigative sites, laboratory testing expenses, data management and consultants that conduct the Company's
clinical trials. Clinical trial expenses are a significant component of research and development expenses, and the Company
outsources a significant portion of these clinical trial activities to third parties. The accrual for site and patient costs
includes inputs such as estimates of patient enrollment, patient cycles incurred, clinical site activations, estimated project
duration and other pass-through costs. These inputs are required to be estimated due to a lag in receiving the actual clinical
information from third parties. Payments for these activities are based on the terms of the individual arrangements, which
may differ from the pattern of costs incurred, and are reflected on the balance sheets as a prepaid asset or accrued expenses.
These third-party agreements are generally cancellable, and related costs are recorded as research and development
expenses as incurred. Except for payments made in advance of services, clinical trial costs are expensed as incurred. Non-
refundable advance clinical payments for goods or services that will be used or rendered for future research and
development activities are recorded as a prepaid asset and recognized as expense as the related goods are delivered or the
related services are performed. When evaluating the adequacy of the accrued expenses, management assessments include:
(i) an evaluation by the project manager of the work that has been completed during the period; (ii) measurement of
progress prepared internally and/or provided by the third-party service provider; (iii) analyses of data that justify the
progress; and (iv) the Company’s judgment. Significant judgments and estimates may be made in determining the accrued
balances at the end of any reporting period. Actual results could differ from the estimates made.
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The Company’s historical clinical accrual estimates have not been materially different from the actual costs. Clinical trial
accruals that are due longer than one year are classified as noncurrent accrued expenses.
Stock-Based Compensation
Stock-based payments are accounted for in accordance with the provisions of ASC 718, Compensation—Stock
Compensation. The fair value of stock-based payments is estimated, on the date of grant, using the Black-Scholes-Merton
model. The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period
of the option. The Company has elected to account for forfeitures as they occur.
The Company has elected to use the Black-Scholes-Merton option pricing model to value any options granted. The
Company will reconsider use of the Black-Scholes-Merton model if additional information becomes available in the future
that indicates another model would be more appropriate or if grants issued in future periods have characteristics that
prevent their value from being reasonably estimated using this model.
A discussion of management’s methodology for developing some of the assumptions used in the valuation model
follows:
Expected Dividend Yield—The Company has never declared or paid dividends and has no plans to do so in the foreseeable
future.
Expected Volatility—Volatility is a measure of the amount by which a financial variable such as share price has fluctuated
(historical volatility) or is expected to fluctuate (expected volatility) during a period. Effective January 1, 2020, the
Company bases the expected volatility on the historical volatility of the Company’s publicly traded common stock. Prior to
January 1, 2020, the Company utilized the historical volatilities of a peer group (e.g., several public entities of similar size,
complexity, and stage of development), along with the Company’s historical volatility since its initial public offering, to
determine its expected volatility.
Risk-Free Interest Rate—This is the U.S. Treasury rate for the week of each option grant during the year, having a term that
most closely resembles the expected life of the option.
Expected Term—This is a period of time that the options granted are expected to remain unexercised. Options granted have
a maximum term of 10 years. The Company estimates the expected life of the option term to be 6.25 years. The Company
uses a simplified method to calculate the average expected term.
Income Taxes
The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income
Taxes. Deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases
of assets and liabilities and the financial reporting amounts at each year-end based on enacted tax laws and statutory tax
rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is
established when necessary to reduce deferred tax assets to the amount expected to be realized.
The Company accounts for uncertain tax positions pursuant to ASC 740. Financial statement recognition of a tax
position taken or expected to be taken in a tax return is determined based on a more-likely-than-not threshold of that tax
position being sustained. If the tax position meets this threshold, the benefit to be recognized is measured as the tax benefit
having the highest likelihood of being realized upon ultimate settlement with the taxing authority. The Company recognizes
interest accrued related to unrecognized tax benefits and penalties in the provision for income taxes.
Comprehensive Loss
Comprehensive loss comprises net loss and other changes in equity that are excluded from net loss. For the years
ended December 31, 2021, 2020 and 2019, the Company’s net loss was equal to comprehensive loss and, accordingly, no
additional disclosure is presented.
Adopted Accounting Standards
In December 2019, the FASB issued ASU 2019-12. ASU 2019-12 removes certain exceptions for recognizing
deferred taxes for investments, performing intra-period allocation and calculating income taxes in interim periods. The
ASU also adds guidance to reduce complexity in certain areas, including deferred taxes for goodwill and allocating taxes
for members of a consolidated group. ASU 2019-12 was effective for all entities for fiscal years beginning after
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December 15, 2020. As of January 1, 2021, the Company adopted the standard, which did not have a material impact on
the Company's financial statements.
Accounting Standards Not Yet Adopted
With the exception of the new standard discussed above, there have been no new accounting pronouncements that
have significance, or potential significance, to the Company’s financial statements.
4. Net Loss Per Share of Common Stock
Basic net loss per common share is determined by dividing net loss by the weighted-average number of common
shares outstanding during the period, without consideration of common stock equivalents. Diluted net loss per share is
computed by dividing net loss by the weighted-average number of common stock equivalents outstanding for the period.
The treasury stock method is used to determine the dilutive effect of the Company’s stock options and restricted stock units
(RSUs).
The following potentially dilutive securities outstanding have been excluded from the computation of diluted
weighted-average common shares outstanding, as they would be anti-dilutive:
Stock options and restricted stock units
5. Prepaid Expenses and Other Current Assets
2021
7,908,122
2020
6,143,594
2019
5,106,493
The following is a summary of the Company’s prepaid expenses and other current assets at December 31:
Prepaid research and development expenses
Other prepaid expenses
Other receivables
Prepaid expenses and other current assets
6. Property and Equipment
Property and equipment, net consisted of the following at December 31:
Furniture and fixtures
Laboratory equipment
Office equipment
Computer equipment
Leasehold improvements
Property and equipment
Less accumulated depreciation
Property and equipment, net
2021
273,396
259,061
1,347
533,804
2021
345,712
1,406,346
17,762
305,784
616,133
2,691,737
(2,322,895)
368,842
2020
965,504
270,675
2,149
1,238,328
2020
345,712
1,446,596
16,755
327,776
616,133
2,752,972
(2,132,299)
620,673
$
$
$
$
$
$
$
$
Depreciation of property and equipment totaled $264,600, $270,754 and $279,234 for the years ended December 31,
2021, 2020 and 2019, respectively.
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7. Accrued Expenses
The following is a summary of the Company’s accrued expenses at December 31:
Accrued research and development expenses
Accrued bonuses
Accrued consulting and other professional fees
Accrued employee benefits
Other accrued expenses
Accrued expenses
8. Operating Leases
2021
5,824,365
2,152,302
299,607
348,752
90,342
8,715,368
$
$
2020
5,114,420
3,341,184
194,760
569,048
220,469
9,439,881
$
$
At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on
the circumstances present. The Company determines a lease exists if the contract conveys the right to control an identified
asset for a period of time in exchange for consideration. Control is considered to exist when the lessee has the right to
obtain substantially all of the economic benefits from the use of an identified asset as well as direct the right to use of that
asset. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets, lease liabilities
and, if applicable, long-term lease liabilities. The Company has elected not to recognize on the balance sheet leases with
terms of one year or less on the lease commencement date. If a contract is considered to be a lease, the Company
recognizes a lease liability based on the present value of the future lease payments over the expected lease term, with an
offsetting entry to recognize a right-of-use asset. The Company has also elected to use the practical expedient and account
for each lease component and related non-lease component as one single component. The lease component results in a
right-of-use asset being recorded on the balance sheet and amortized as lease expense on a straight-line basis.
The interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the
appropriate incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a term similar to
the term of the lease for which the rate is estimated. Certain adjustments to the right-of-use asset may be required for items
such as initial direct costs paid or incentives received.
The Company leases office and research space in Rockville, Maryland under an operating lease with a term from
June 15, 2015 through October 31, 2023 (the Lease) that is subject to annual rent increases. The Company has the right to
sublease or assign all or a portion of the premises, subject to the conditions set forth in the Lease. The Lease may be
terminated early by either the landlord or the Company in certain circumstances. In connection with the Lease, the
Company received rent abatement as a lease incentive in the initial year of the Lease.
In March 2016, the Company amended the Lease (the Lease Amendment) to lease additional space as of June 1,
2016. In May 2016, the Company also paid a security deposit of $52,320 to be held until the expiration or termination of
the Company’s obligations under the Lease. The term of the Lease Amendment for the additional space continues through
October 31, 2023, the same date as for the premises originally leased under the Lease, subject to the Company’s renewal
option set forth in the Lease.
The Company identified and applied the following significant assumptions in recognizing the right-of-use asset and
corresponding liability for the Lease and Lease Amendment:
● Lease term – The lease term includes both the noncancelable period and, when applicable, cancelable option
periods where failure to exercise such option would result in an economic penalty. The Company’s renewal
option to extend is not reasonably certain of being exercised as of December 31, 2021.
● Incremental borrowing rate – As the Company’s lease does not provide an implicit rate, the Company used an
incremental borrowing rate (IBR), which is the rate incurred to borrow on a collateralized basis over a term
similar to the term of the lease for which the rate is estimated. The Company determined the IBR to be 8% based
on an estimated rate that considered the Company’s credit risk in the United States for a collateralized
borrowing and lease term similar to the Lease.
As of December 31, 2021 the weighted-average remaining lease term was 1.8 years. There were no additional
operating leases entered into during the year ended December 31, 2021.
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The components of lease expense and related cash flows were as follows:
Operating lease cost
Variable lease cost
Total operating lease cost
$
Year Ended December 31,
2020
927,957 $
593,973
2019
927,957
465,028
$ 1,418,828 $ 1,521,930 $ 1,392,985
2021
927,957 $
490,871
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases
$ 1,077,469 $ 1,051,190 $
941,089
Maturities of lease liability due under these lease agreements as of December 31, 2021 were as follows:
2022
2023
Thereafter
Total
Present value adjustment
Present value of lease payments
9. Stockholders’ Equity
Common Stock
At-The-Market Equity Offerings
Operating Lease
Obligation
$
$
1,104,356
940,840
—
2,045,196
(125,182)
1,920,014
On September 28, 2017, the Company entered into an at-the-market sales agreement (the 2017 Sales Agreement)
with Cowen and Company, LLC (Cowen) to sell up to $100.0 million of the Company’s common stock registered under a
shelf registration statement filed with the U.S. Securities and Exchange Commission in September 2017. During the year
ended December 31, 2020, the Company issued and sold 4,136,742 shares of common stock under the 2017 Sales
Agreement at a weighted average price per share of $3.52, for aggregate net proceeds of $14.1 million, after deducting
commissions and offering expenses. There were no shares sold under the 2017 Sales Agreement during the year ended
December 31, 2019. The shelf registration statement, under which the shares that could be sold under the 2017 Sales
Agreement were registered, expired on October 6, 2020.
On October 7, 2020, the Company filed a prospectus supplement to a shelf registration statement that it filed in May
2019 and entered into a new at-the-market sales agreement (the 2020 Sales Agreement) with Cowen. Under the 2020 Sales
Agreement, the Company may sell up to $100.0 million of the Company’s common stock registered under the shelf
registration statement that was filed in May 2019. The 2020 Sales Agreement replaced the 2017 Sales Agreement between
the Company and Cowen, and the $100.0 million that may be sold under the 2020 Sales Agreement excludes any amounts
that were sold under the 2017 Sales Agreement. During the year ended December 31, 2020, the Company issued and sold
1,024,760 shares of common stock under the 2020 Sales Agreement at a weighted average price per share of $3.74, for
aggregate net proceeds of $3.7 million, after deducting commissions and offering expenses.
During the year ended December 31, 2021, the Company issued and sold an additional 3,092,603 shares of common
stock under the 2020 Sales Agreement at a weighted average price per share of $3.57, for aggregate net proceeds of $10.7
million, after deducting commissions and offering expenses. As of December 31, 2021, approximately $85.1 million
remained available to be sold under the terms of the 2020 Sales Agreement. Subsequent to December 31, 2021 and through
the date these financial statements were issued, there have been no additional sales under the 2020 Sales Agreement.
2003 Stock Incentive Plan
The 2003 Stock Incentive Plan (the 2003 Plan) provided for the grant of incentives and nonqualified stock options
and restricted stock awards. The exercise price for incentive stock options must be at least equal to the fair value of the
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common stock on the grant date. Unless otherwise stated in a stock option agreement, 25% of the shares subject to an
option grant will vest upon the first anniversary of the vesting start date and thereafter at the rate of one forty-eighth of the
option shares per month as of the first day of each month after the first anniversary. Upon termination of employment by
reasons other than death, cause, or disability, any vested options shall terminate 60 days after the termination date. Stock
options terminate 10 years from the date of grant. The 2003 Plan expired on May 21, 2013.
A summary of the Company’s stock option activity under the 2003 Plan for the year ended December 31, 2021 is as
follows:
Outstanding as of December 31, 2020
Options exercised
Options forfeited
Outstanding, Vested and Exercisable as of
December 31, 2021
OUTSTANDING
OPTIONS
WEIGHTED-
AVERAGE
EXERCISE
PRICE
WEIGHTED-
AVERAGE
REMAINING
CONTRACTUAL
AGGREGATE
INTRINSIC
VALUE
(IN
TERM (YEARS) THOUSANDS)
97,250
(3,785)
$
—
93,465
1.96
1.12
—
2.00
1.3
0.3
$
—
During 2021, 2020 and 2019 the Company issued 3,785, 285,087 and 284,743 shares of common stock, respectively,
in conjunction with exercises of stock options granted under the 2003 Plan. The Company received cash proceeds from the
exercise of these stock options of $4,239, $319,297 and $318,912 during 2021, 2020 and 2019, respectively. Total intrinsic
value of the options exercised during the years ended December 31, 2021, 2020 and 2019 was $8,668, $921,168 and
$924,688, respectively.
As of December 31, 2021, the options under the 2003 Plan were fully expensed and all options outstanding under the
2003 Plan were fully vested. There were no options granted under the 2003 Plan in 2021, 2020 and 2019.
2013 Equity Incentive Plan
The Company’s board of directors adopted, and its stockholders approved, its 2013 Equity Incentive Plan (the 2013
Plan) effective on January 9, 2014. The 2013 Plan provides for the grant of incentive stock options within the meaning of
Section 422 of the Internal Revenue Code (the Code), to the Company’s employees and its parent and subsidiary
corporations’ employees, and for the grant of nonstatutory stock options, restricted stock awards, restricted stock unit
awards, stock appreciation rights, performance stock awards and other forms of stock compensation to its employees,
including officers, consultants and directors. The 2013 Plan also provides for the grant of performance cash awards to the
Company’s employees, consultants and directors. Unless otherwise stated in a stock option agreement, 25% of the shares
subject to an option grant will typically vest upon the first anniversary of the vesting start date and thereafter at the rate of
one forty-eighth of the option shares per month as of the first day of each month after the first anniversary. Upon
termination of employment by reasons other than death, cause, or disability, any vested options shall terminate 90 days
after the termination date, unless otherwise set forth in a stock option agreement. Stock options generally terminate 10
years from the date of grant.
Authorized Shares
The maximum number of shares of common stock that may be issued under the 2013 Plan was 1,000,000 shares, plus
any shares subject to stock options or similar awards granted under the 2003 Plan that expire or terminate without having
been exercised in full or are forfeited to or repurchased by the Company. The number of shares of common stock reserved
for issuance under the 2013 Plan will automatically increase on January 1 of each year, beginning on January 1, 2015 and
ending on January 1, 2023, by 3% of the total number of shares of common stock outstanding on December 31 of the
preceding calendar year, or a lesser number of shares as may be determined by the Company’s board of directors. The
maximum number of shares that may be issued pursuant to exercise of incentive stock options under the 2013 Plan is
20,000,000.
Shares issued under the 2013 Plan may be authorized but unissued or reacquired shares of common stock. Shares
subject to stock awards granted under the 2013 Plan that expire or terminate without being exercised in full, or that are paid
out in cash rather than in shares, will not reduce the number of shares available for issuance under the 2013 Plan.
Additionally, shares issued pursuant to stock awards under the 2013 Plan that the Company repurchases or that are
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forfeited, as well as shares reacquired by the Company as consideration for the exercise or purchase price of a stock award
or to satisfy tax withholding obligations related to a stock award, will become available for future grant under the 2013
Plan.
Stock Options
A summary of the Company’s stock option activity under the 2013 Plan for the year ended December 31, 2021 is as
follows:
Outstanding as of December 31, 2020
Options granted
Options exercised
Options forfeited
Outstanding as of December 31, 2021
Vested or expected to vest as of December 31, 2021
Exercisable as of December 31, 2021
$
OUTSTANDING
OPTIONS
5,753,211
898,100
—
(995,854)
5,655,457
5,655,457
4,118,394
WEIGHTED-
AVERAGE
EXERCISE
PRICE
WEIGHTED-
AVERAGE
REMAINING
CONTRACTUAL
AGGREGATE
INTRINSIC
VALUE
(IN
TERM (YEARS) THOUSANDS)
8.93
3.70
—
7.89
8.30
8.30
9.43
6.6
6.0
6.0
5.1
$
—
—
—
As of December 31, 2021, there was $4,936,519 of total unrecognized compensation expense related to unvested
options that will be recognized over a weighted-average period of approximately 2.0 years. The total fair value of options
that vested in the years ended December 31, 2021, 2020 and 2019 was $5,936,641, $7,347,548 and $6,159,610,
respectively. There were no options exercised under the 2013 Plan during the years ended December 31, 2021 or 2020.
During the year ended December 31, 2019, the Company received cash of $94,001 and issued 16,606 shares of common
stock in conjunction with exercises of stock options granted under the 2013 Plan. The intrinsic value of the options
exercised for the year ended December 31, 2019 was $97,429.
Restricted Stock Units (RSUs)
A restricted stock unit (RSU) is a stock award that entitles the holder to receive shares of the Company’s common
stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s common stock on the
date of grant. In January 2021, the Company awarded RSUs under the 2013 Plan to all of its employees. The RSUs granted
vest over four years in equal installments on each anniversary of the grant date. In September 2019, the Company granted
an aggregate of 332,106 RSUs with service conditions to the Company’s non-executive employees. The RSUs granted in
September 2019 vested over a two-year period, with one-third vesting on the first anniversary of the date of grant and the
remaining two-thirds vesting on the second anniversary of the date of grant, provided that the employee remained
employed with the Company at the applicable vesting date. Compensation expense is recognized on a straight-line basis.
As of December 31, 2021, there was $943,458 of total unrecognized compensation expense associated with these RSU
grants that will be recognized over a weighted-average period of approximately 3.0 years.
The following is a summary of RSU activity for the 2013 Plan for the year ended December 31, 2021:
Unvested at December 31, 2020
Granted
Forfeited
Vested
Unvested at December 31, 2021
Inducement Plan
Number of Shares
Underlying RSUs
Weighted-Average
Grant Date
Fair Value
$
192,533
444,613
(101,754)
(189,792)
345,600
4.53
3.72
3.84
4.53
3.70
In January 2020, the Company’s board of directors adopted the GlycoMimetics, Inc. Inducement Plan (the
Inducement Plan). The Inducement Plan provides for the grant of nonstatutory stock options, restricted stock awards,
restricted stock unit awards, stock appreciation rights and other forms of stock awards to individuals not previously an
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employee or director of the Company as an inducement for such individuals to join the Company. Unless otherwise stated
in an applicable stock option agreement, one-fourth of the shares subject to an option grant under the Inducement Plan will
typically vest upon the first anniversary of the vesting start date, with the balance of the shares vesting in a series of thirty-
six successive equal monthly installments as of the first day of each month measured from the first anniversary of the
vesting start date, subject to the new employee’s continued service with the Company through the applicable vesting dates.
Upon termination of employment by reasons other than death, cause or disability, any vested options will terminate 90 days
after the termination date, unless otherwise set forth in a stock option agreement. Stock options generally terminate 10
years from the date of grant. There were 500,000 shares of common stock reserved under the Inducement Plan at its
adoption date. In August 2021, the Company’s board of directors adopted an amendment to the Inducement Plan to
increase the number of shares reserved to 2,000,000 shares, and in January 2022 the Company’s board of directors adopted
an amendment to the Inducement Plan to further increase the number of shares reserved to 3,000,000 shares.
.
A summary of the Company’s stock option activity under the Inducement Plan for the year ended December 31, 2021
is as follows:
Outstanding as of December 31, 2020
Options granted
Options exercised
Options forfeited
Outstanding as of December 31, 2021
Vested or expected to vest as of December 31, 2021
Exercisable as of December 31, 2021
OUTSTANDING
OPTIONS
$
100,600
1,747,600
(10,092)
(24,508)
1,813,600
1,264,400
22,879
WEIGHTED-
AVERAGE
EXERCISE
PRICE
WEIGHTED-
AVERAGE
REMAINING
CONTRACTUAL
AGGREGATE
INTRINSIC
VALUE
(IN
TERM (YEARS) THOUSANDS)
3.09
2.02
2.06
2.06
2.08
2.10
3.58
9.5
9.6
9.6
8.6
$
—
—
—
As of December 31, 2021, there was $1,672,270 of total unrecognized compensation expense related to unvested
options under the Inducement Plan that will be recognized over a weighted-average period of approximately 3.6 years. In
August 2021, the Company granted stock options to purchase an aggregate of 1,647,600 shares to its new Chief Executive
Officer under the Inducement Plan. This consisted of (a) an option to purchase 1,098,400 shares, subject to vesting as to
25% of the underlying shares on August 3, 2022 and as to the remaining underlying shares in equal monthly installments
over 36 months thereafter, subject to the officer’s continued service through each such vesting date, and (b) an option to
purchase 549,200 shares that is subject to performance vesting conditions and will vest upon achievement of milestones as
follows: (i) one-half of the shares will vest upon FDA approval of uproleselan in patients with relapsed/refractory acute
myeloid leukemia and (ii) one-half of the shares will vest upon the first commercial sale of uproleselan in the United States
or abroad. The maximum fair value of $798,053 associated with the performance-based option is excluded from the
unrecognized compensation expense under the Inducement Plan as the completion of the performance milestones are not
probable as of December 31, 2021. The Company will reevaluate at the end of each reporting period the probability that the
performance conditions will be achieved and record any compensation cost at that time.
The total fair value of options that vested in the year ended December 31, 2021 was $73,334. During the year ended
December 31, 2021, the Company received cash of $20,790 and issued 10,092 shares of common stock in conjunction with
exercises of stock options granted under the Inducement Plan. The intrinsic value of the options exercised for the year
ended December 31, 2021 was $1,944. There were no options vested or exercised under the Inducement Plan during the
year ended December 31, 2020.
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The weighted-average fair value of the options granted under all equity incentive plans during the years ended
December 31, 2021, 2020 and 2019 was $1.85, $3.17 and $7.17 per share, respectively, applying the Black-Scholes-Merton
option pricing model utilizing the following weighted-average assumptions:
Expected term
Expected volatility
Risk-free interest rate
Expected dividend yield
2021
6.25 years
84.19%
0.78%
0%
2020
6.25 years
84.40%
1.41%
0%
2019
6.25 years
71.15%
2.54%
0%
Total stock-based compensation expense associated with stock options and RSUs was classified as follows on the
statement of operations for the years ended December 31:
Research and development expense
General and administrative expense
Total stock-based compensation expense
10. Income Taxes
2021
2,214,848
3,872,438
6,087,286
$
$
2020
2,946,952
3,954,806
6,901,758
$
$
2019
2,402,242
3,812,848
6,215,090
$
$
The components of the gross deferred tax asset and related valuation allowance at December 31 were as follows:
Deferred income tax assets:
Net operating loss carryforward
Capitalized start-up costs
Patent amortization
Research and orphan drug credits
Stock-based compensation
Operating lease liabilities
Accrued bonus
Other
Gross deferred income tax assets
Valuation allowance
Net deferred income tax assets
Deferred income tax liabilities:
Operating lease right-of-use assets
Property and equipment
Gross deferred income tax liabilities
Net deferred income tax asset/(liability)
2021
2020
$
$
79,788,146
920,516
73,480
47,976,370
7,102,947
528,340
592,260
209,580
137,191,639
(136,613,829)
577,810
(433,727)
(144,083)
(577,810)
$
— $
63,830,866
1,114,309
88,949
42,008,797
6,778,569
775,598
919,410
283,751
115,800,249
(115,016,323)
783,926
(639,843)
(144,083)
(783,926)
—
Based on the Company’s operating history and management’s expectation regarding future profitability, management
believes the Company’s deferred tax assets will not be realizable under ASC 740, Income Taxes. Accordingly, a full
valuation allowance has been established as of December 31, 2021 and 2020.
As of December 31, 2021, the Company had $290.0 million of U.S. Federal and state net operating losses, $10.3
million of research and development tax credits and $37.7 million of orphan drug tax credits available to carry forward. A
portion of the net operating loss carryforwards will begin to expire in 2026, the research and development tax credits in
2023 and the orphan drug tax credit in 2033. Under current federal income tax laws, federal net operating losses incurred in
2018 and in future years may be carried forward, indefinitely, but the deductibility of such federal net operating losses is
limited.
The Company’s tax attributes, including net operating losses and credits, are subject to any ownership changes as
defined under Internal Revenue Code Sections 382 and 383. A change in ownership could affect the Company’s ability
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to utilize its net operating losses and credits. As of December 31, 2021, the Company does not believe that an ownership
change has occurred. Any future ownership changes may cause a limitation on the Company’s ability to utilize existing tax
attributes.
The Company files income tax returns in the U.S. federal jurisdiction and in the State of Maryland. The Company’s
federal income tax returns for tax years 2003 and after remain subject to examination by the U.S. Internal Revenue Service
due to tax attributes available to be carried forward to open or future tax years. The Company’s Maryland income tax
returns for the tax years 2006 and thereafter remain subject to examination by the Comptroller of Maryland. In addition, all
of the net operating losses, research and development tax credit and orphan drug credit carryforwards that may be used in
future years are still subject to adjustment.
The Company did not have unrecognized tax benefits as of December 31, 2021 and 2020, and does not anticipate this
to change significantly over the next 12 months. The Company will recognize interest and penalties accrued on any
unrecognized tax benefits as a component of income tax expense. Reconciliations between the statutory federal income tax
rate and the effective income tax rate of income tax expense is as follows as of December 31:
U.S. Federal statutory tax rate
State taxes
Research credit
Orphan drug credit
Other
Change in valuation allowance
Provision for income taxes
11. Research and License Agreements
Apollomics
2021
2020
2019
21.0 %
5.9
0.9
6.6
(0.3)
(34.1)
— %
21.0 %
5.7
0.7
9.8
0.4
(37.6)
— %
21.0 %
5.7
0.8
8.8
(0.1)
(36.2)
— %
In January 2020, the Company entered into a collaboration and license agreement (the Agreement) with Apollomics
(Hong Kong), Limited (Apollomics) for the development, manufacture and commercialization of products derived from
two of the Company’s compounds, GMI-1271 and GMI-1687 (the Products) for therapeutic and prophylactic uses (the
Field) in China, Taiwan, Hong Kong and Macau (the Territory). Under the terms of the Agreement, the Company granted
Apollomics:
● an exclusive license, with the right to sublicense, to develop, manufacture and have manufactured, distribute,
market, promote, sell, have sold, offer for sale, import, label, package and otherwise the Products in the Field in
the Territory; and
● a non-exclusive license to conduct preclinical research with respect to Products in the Field outside of the
Territory for the purposes of developing such Products for use in the Territory.
In June 2020, the Company and Apollomics entered into a clinical supply agreement pursuant to which the Company
will manufacture and supply the Products at agreed upon prices. Apollomics has the option to begin manufacture of the
Products after appropriate material transfer requirements are met. During the year ended December 30, 2021, the Company
recognized $1.1 million as revenue from the sale of clinical supplies to Apollomics.
The Company evaluated the Agreement under the provisions of ASC 606 and identified two performance
obligations under this revenue arrangement: the (i) delivery of functional licenses and (ii) manufacture and supply of the
Products. The initial transaction price consists of a $9.0 million non-refundable up-front payment which was allocated to
the delivered functional licenses and recognized in full as revenue in the first quarter of 2020 given that the performance
obligation was satisfied upon inception. The Agreement contains various forms of variable consideration, including (i) up
to $75.0 million in development milestones based on achievement of certain clinical and regulatory events, (ii) up to $105.0
million of sales-based commercial milestones based on achievement of certain annual net sales targets, (iii) sales-based
royalties at specified percentages of net sales ranging from the high single digits to 15%, and (iv) manufacture and supply
of clinical and commercial Products. The Company has fully constrained the development milestone consideration using
the most likely amount method and will recognize that revenue when it is probable that recognition
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of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods, and as
such have been excluded from the transaction price. In September 2020, the Company received a non-refundable $1.0
million development milestone payment upon acceptance by Chinese regulatory authorities of a Phase 3 bridging study
design to support registration in China. The Company recognized this $1.0 million payment as revenue in the quarter ended
September 30, 2020. The Company did not recognize any milestone revenue under the Agreement for the year ended
December 31, 2021.
The Company will recognize revenue related to the sales-based commercial and royalty milestones and royalties at
the later of (i) when the related sales occur or (ii) when the performance obligation to which some or all of the royalty has
been allocated has been satisfied (or partially satisfied), as they were determined to relate predominantly to the licenses
granted to Apollomics and, therefore, have been excluded from the transaction price. Lastly, the Company has determined
that the consideration for the manufacturing and supply is all variable and is fully constrained. Variable consideration
allocated to manufacturing and supply will be recognized at a point in time when the Product is delivered and when the title
to the Product is transferred to the customer pursuant to the agreement. The Company reassesses the transaction price in
each reporting period and upon the occurrence of a change in circumstances or final resolution of any particular event.
12. Employee Benefit Plan
The Company has a defined contribution plan under the Internal Revenue Code Section 401(k). This plan covers
substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of
their annual compensation on a pre-tax basis. For the years ended December 31, 2021, 2020 and 2019, the Company
matched 50% up to the first 6% of employee contributions. All matching contributions have been paid by the Company.
The Company’s matching contributions vest in full immediately. The total Company matching contributions were
approximately $270,000, $252,000 and $219,000 for the years ended December 31, 2021, 2020 and 2019, respectively.
13. Risks and Uncertainties
COVID-19
In March 2020, the World Health Organization declared the novel coronavirus disease 2019, or COVID-19, outbreak
a pandemic. In order to mitigate the spread of COVID-19, governments have imposed unprecedented restrictions on
business operations, travel and gatherings, resulting in a global economic downturn and other adverse economic and
societal impacts. The COVID-19 pandemic has also overwhelmed or otherwise led to changes in the operations of many
healthcare facilities.
The impact of the COVID-19 pandemic on the Company’s business and financial performance is uncertain and
depends on various factors, including the duration of the pandemic, government restrictions and other actions, including
relief measures and mass vaccination efforts, implemented to address the impact of the pandemic, and resulting impacts on
the financial markets and overall economy. The imposition of “lockdown,” “social distancing” and “shelter in place”
directives by state and federal governments in the United States as well as governments in other regions of the world in
response to the COVID-19 pandemic, including in locations in which its Phase 3 clinical trial of uproleselan is being
conducted, resulted in slowed clinical site initiation, patient recruitment and enrollment rates early in the pandemic.
Enrollment rates have returned to forecasted levels since the lockdowns. However, COVID-19 infection rates continue to
fluctuate, particularly with the emergence of variants, which could negatively affect completion of the trial. The Company
is unable to determine the extent of the impact of the pandemic on its operations and financial condition going forward.
These developments are highly uncertain and unpredictable, and may materially adversely affect the Company’s financial
position and results of operations. The Company continues to closely monitor the COVID-19 situation and any potential
impact to its planned activities.
92
CONSULTING AGREEMENT
Exhibit 10.13
THIS CONSULTING AGREEMENT (the “Agreement”) by and between GlycoMimetics, Inc.
(“Client”) and Rachel K. King, an individual (“Consultant”) is effective as of August 31, 2021 (the “Effective
Date”).
RECITALS
WHEREAS the parties desire for the Client to engage Consultant to perform the services described herein
and for Consultant to provide such services on the terms and conditions described herein; and
WHEREAS, the parties desire to use Consultant’s independent skill and expertise pursuant to this
Agreement as an independent contractor;
NOW THEREFORE, in consideration of the promises and mutual agreements contained herein, the parties
hereto, intending to be legally bound, agree as follows:
1.
Engagement of Services. Consultant agrees to provide consulting services to include, among
other things, strategic business advice, assistance with executive transitions and other services upon request of the
Chief Executive Officer (“Executive”) of the Client. Consultant agrees to exercise the highest degree of
professionalism and utilize her expertise and creative talents in performing these services. Consultant agrees to
make herself available to perform such consulting services throughout the Consulting Period, up to 20 hours per
week throughout the Consulting Period, and to be reasonably available to meet with the Client at its offices or
otherwise.
2.
Compensation. In consideration for the services rendered pursuant to this Agreement and for the
assignment of certain of Consultant’s right, title and interest pursuant hereto, Client will pay Consultant a
consulting fee of $23,304.17 per month for services rendered during the Consulting Period to be paid by the 15th
calendar day of each applicable month during the Consulting Period.
3.
Ownership of Work Product. Consultant hereby irrevocably assigns, grants and conveys to
Client all right, title and interest now existing or that may exist in the future in and to any document, development,
work product, know-how, design, processes, invention, technique, trade secret, or idea, and all intellectual
property rights related thereto, that is created by Consultant, to which Consultant contributes, or which relates to
Consultant’s services provided pursuant to this Agreement (the “Work Product”), including all copyrights,
trademarks and other intellectual property rights (including but not limited to patent rights) relating thereto.
Consultant agrees that any and all Work Product shall be and remain the property of Client. Consultant will
immediately disclose to the Client all Work Product. Consultant agrees to execute, at Client’s request and
expense, all documents and other instruments necessary or desirable to confirm such assignment. In the event that
Consultant does not, for any reason, execute such documents within a reasonable time of Client’s request,
Consultant hereby irrevocably appoints Client as Consultant’s attorney-in-fact for the purpose of executing such
documents on Consultant’s behalf, which appointment is coupled with an interest. Consultant
shall not attempt to register any works created by Consultant pursuant to this Agreement at the U.S. Copyright
Office, the U.S. Patent & Trademark Office, or any foreign copyright, patent, or trademark registry. Consultant
retains no rights in the Work Product and agrees not to challenge Client’s ownership of the rights embodied in the
Work Product. Consultant further agrees to assist Client in every proper way to enforce Client’s rights relating to
the Work Product in any and all countries, including, but not limited to, executing, verifying and delivering such
documents and performing such other acts (including appearing as a witness) as Client may reasonably request for
use in obtaining, perfecting, evidencing, sustaining and enforcing Client’s rights relating to the Work Product.
4.
Artist’s, Moral, and Other Rights. If Consultant has any rights, including without limitation
“artist’s rights” or “moral rights,” in the Work Product which cannot be assigned (the “Non-Assignable Rights”),
Consultant agrees to waive enforcement worldwide of such rights against Client. In the event that Consultant has
any such rights that cannot be assigned or waived Consultant hereby grants to Client a royalty-free, paid-up,
exclusive, worldwide, irrevocable, perpetual license under the Non-Assignable Rights to (i) use, make, sell, offer
to sell, have made, and further sublicense the Work Product, and (ii) reproduce, distribute, create derivative works
of, publicly perform and publicly display the Work Product in any medium or format, whether now known or later
developed.
5.
Representations and Warranties. Consultant represents and warrants that: (a) Consultant has the
full right and authority to enter into this Agreement and perform her obligations hereunder; (b) Consultant has the
right and unrestricted ability to assign the Work Product to Client as set forth in Sections 4 and 5 (including
without limitation the right to assign any Work Product created by Consultant’s employees or contractors); (c) the
Work Product has not heretofore been published in its entirety; and (d) the Work Product will not infringe upon
any copyright, patent, trademark, right of publicity or privacy, or any other proprietary right of any person,
whether contractual, statutory or common law. Consultant agrees to indemnify Client from any and all damages,
costs, claims, expenses or other liability (including reasonable attorneys’ fees) arising from or relating to the
breach or alleged breach by Consultant of the representations and warranties set forth in this Section 5.
6.
Independent Contractor Relationship. Consultant is an independent contractor and not an
employee of the Client. Nothing in this Agreement is intended to, or should be construed to, create a partnership,
agency, joint venture or employment relationship. The manner and means by which Consultant chooses to
complete the consulting services are in Consultant’s sole discretion and control. In completing the consulting
services, Consultant agrees to provide her own equipment, tools and other materials at her own expense.
Consultant is not authorized to represent that she is an agent, employee, or legal representative of the Client, but
may disclose that she is a member of the Board of Directors, independent of this Agreement. Consultant is not
authorized to make any representation, contract, or commitment on behalf of Client or incur any liabilities or
obligations of any kind in the name of or on behalf of the Client. Consultant shall be free at all times to arrange
the time and manner of performance of the consulting services. Consultant is not required to maintain any
schedule of duties or assignments. Consultant is also not required to provide reports to the Client. In addition to
all other obligations contained herein, Consultant agrees: (a) to proceed with diligence and promptness and
hereby warrants that such services shall be performed in accordance with the
2
highest professional standards in the field to the satisfaction of the Client; and (b) to comply, at Consultant’s own
expense, with the provisions of all state, local, and federal laws, regulations, ordinances, requirements and codes
which are applicable to the performance of the services hereunder.
7.
Consultant’s Responsibilities. As an independent contractor, the mode, manner, method and
means used by Consultant in the performance of services shall be of Consultant’s selection and under the sole
control and direction of Consultant. Consultant shall be responsible for all risks incurred in the operation of
Consultant’s business and shall enjoy all the benefits thereof. Any persons employed by or subcontracting with
Consultant to perform any part of Consultant’s obligations hereunder shall be under the sole control and direction
of Consultant and Consultant shall be solely responsible for all liabilities and expenses thereof. The Client shall
have no right or authority with respect to the selection, control, direction, or compensation of such persons.
8.
Tax Treatment. Consultant and the Client agree that the Client will treat Consultant as an
independent contractor for purposes of all tax laws (local, state and federal) and file forms consistent with that
status. Consultant agrees, as an independent contractor, that neither she nor her employees are entitled to
unemployment benefits in the event this Agreement terminates, or workers’ compensation benefits in the event
that Consultant, or any employee of Consultant, is injured in any manner while performing obligations under this
Agreement. Consultant will be solely responsible to pay any and all local, state, and/or federal income, social
security and unemployment taxes for Consultant and her employees. The Client will not withhold any taxes or
prepare W-2 Forms for Consultant, but will provide Consultant with a Form 1099, if required by law. Consultant
is solely responsible for, and will timely file, all tax returns and payments required to be filed with, or made to,
any federal, state or local tax authority with respect to the performance of services and receipt of fees under this
Agreement. Consultant is solely responsible for, and must maintain adequate records of, expenses incurred in the
course of performing services under this Agreement, except as provided herein. No part of Consultant’s
compensation will be subject to withholding by Client for the payment of any social security, federal, state or any
other employee payroll taxes. Client will regularly report amounts paid to Consultant with the appropriate taxing
authorities, as required by law.
9.
No Employee Benefits. Consultant acknowledges and agrees that neither she nor anyone acting
on her behalf shall receive any employee benefits of any kind from the Client as a result of this Agreement.
Consultant (and Consultant’s agents, employees, and subcontractors) is excluded from participating in any fringe
benefit plans or programs as a result of the performance of services under this Agreement, without regard to
Consultant’s independent contractor status. In addition, Consultant (on behalf of herself and on behalf of
Consultant’s agents, employees, and contractors) waives any and all rights, if any, to participation in any of the
Client’s fringe benefit plans or programs including, but not limited to, health, sickness, accident or dental
coverage, life insurance, disability benefits, severance, accidental death and dismemberment coverage,
unemployment insurance coverage, workers’ compensation coverage, and pension or 401(k) benefit(s) provided
by the Client to its employees. Notwithstanding the foregoing, this Agreement does not amend or abrogate in any
manner any benefit continuation or conversion rights provided by the provision of a benefit plan or by law arising
out of Consultant’s previous employment relationship with Client.
3
10.
Expenses and Liabilities. Consultant agrees that as an independent contractor, she is solely
responsible for all expenses (and profits/losses) she incurs in connection with the performance of services.
Consultant understands that she will not be reimbursed for any supplies, equipment, or operating costs, nor will
these costs of doing business be defrayed in any way by the Client. In addition, the Client does not guarantee to
Consultant that fees derived from Consultant’s business will exceed Consultant’s costs.
11.
Non-Exclusivity. The Client reserves the right to engage other consultants to perform services,
without giving Consultant a right of first refusal or any other exclusive rights. Consultant reserves the right to
perform services for other persons, provided that the performance of such services do not conflict or interfere with
services provided pursuant to or obligations under this Agreement.
12.
No Conflict of Interest. During the term of this Agreement, unless written permission is given by
the Executive, Consultant will not accept work, enter into a contract, or provide services to any third party that
provides products or services which compete with the products or services provided by the Client nor may
Consultant enter into any agreement or perform any services which would conflict or interfere with the services
provided pursuant to or the obligations under this Agreement. Consultant warrants that there is no other contract
or duty on her part that prevents or impedes Consultant’s performance under this Agreement. Consultant agrees to
indemnify Client from any and all loss or liability incurred by reason of the alleged breach by Consultant of any
services agreement with any third party.
13.
No Solicitation. During the Consulting Period, and for a period of one (1) year thereafter,
Consultant will not, directly or indirectly (whether for compensation or without compensation) (i) recruit, solicit
or induce, or attempt to induce, any employee, consultant, or contractor of the Client to terminate their
employment, contractual or other relationship with the Client; or (ii) solicit the business of any client or customer
of Client other than as expressly directed to by the Client.
14.
Confidential Information. Consultant agrees to hold Client’s Confidential Information (as
defined below) in strict confidence and not to disclose such Confidential Information to any third parties.
Consultant also agrees not to use any of Client’s Confidential Information for any purpose other than
performance of Consultant’s services hereunder. “Confidential Information” as used in this Agreement shall
mean all information disclosed by Client to Consultant, or otherwise, regarding Client or its business obtained by
Consultant pursuant to services provided under this Agreement that is not generally known in the Client’s trade or
industry and shall include, without limitation, (a) concepts and ideas relating to the development and distribution
of content in any medium or to the current, future and proposed products or services of Client or its subsidiaries or
affiliates; (b) trade secrets, drawings, inventions, know-how, software programs, and software source documents;
(c) information regarding plans for research, development, new service offerings or products, marketing and
selling, business plans, business forecasts, budgets and unpublished financial statements, licenses and distribution
arrangements, prices and costs, suppliers and customers; and (d) any information regarding the skills and
compensation of employees, contractors or other agents of the Client or its subsidiaries or affiliates. Confidential
Information also includes proprietary or confidential information of any third party who may disclose such
information to Client or Consultant in the
4
course of Client’s business. Consultant’s obligations set forth in this Section shall not apply with respect to any
portion of the Confidential Information that Consultant can document by competent proof that such portion: (i) is
in the public domain through no fault of Consultant; (ii) has been rightfully independently communicated to
Consultant free of any obligation of confidence; or (iii) was developed by Consultant independently of and
without reference to any information communicated to Consultant by Client. In addition, Consultant may disclose
Client’s Confidential Information in response to a valid order by a court or other governmental body, as otherwise
required by law. All Confidential Information furnished to Consultant by Client is the sole and exclusive property
of Client or its suppliers or customers. Upon request by Client, Consultant agrees to promptly deliver to Client
the original and any copies of such Confidential Information. Notwithstanding the foregoing or anything to the
contrary in this Agreement or any other agreement between Client and Consultant, nothing in this Agreement
shall limit Consultant’s right to discuss Consultant’s engagement with the Client or report possible violations of
law or regulation with the Equal Employment Opportunity Commission, United States Department of Labor, the
National Labor Relations Board, the Securities and Exchange Commission, or other federal government agency or
similar state or local agency or to discuss the terms and conditions of Consultant’s engagement with others to the
extent expressly permitted by applicable provisions of law or regulation, including but not limited to
"whistleblower" statutes or other similar provisions that protect such disclosure. Further, notwithstanding the
foregoing, pursuant to 18 U.S.C. Section 1833(b), Consultant shall not be held criminally or civilly liable under
any Federal or State trade secret law for the disclosure of a trade secret that: (1) is made in confidence to a
Federal, State, or local government official, either directly or indirectly, or to an attorney, and solely for the
purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document
filed in a lawsuit or other proceeding, if such filing is made under seal.
15.
Term and Termination.
15.1 Term. The term of this Agreement and the “Consulting Period” is for twelve (12) months
from the Effective Date set forth above; provided, however, that the Consulting Period may be renewed and
extended by the mutual written agreement of Consultant and an authorized officer of Client.
15.2 Effect of Termination. Upon any termination or expiration of this Agreement, Consultant
(i) shall immediately discontinue all use of Client’s Confidential Information delivered under this Agreement; (ii)
shall delete any such Client Confidential Information from Consultant’s computer storage or any other media,
including, but not limited to, online and off-line libraries; and (iii) shall return to Client, or, at Client’s option,
destroy, all copies of such Confidential Information then in Consultant’s possession.
15.3
Survival. The rights and obligations contained in Sections 3-6, 8-9, 13-14, 15.3 and 16-24
will survive any termination or expiration of this Agreement.
16.
Indemnification. Consultant shall indemnify and hold harmless the Client and its officers,
directors, agents, owners, and employees, for any claims brought or liabilities imposed against the Client by
Consultant or any of her employees or by any other party (including private parties, governmental bodies and
courts), including claims related to worker’s compensation,
5
wage and hour laws, employment taxes, and benefits, and whether relating to Consultant’s status as an
independent contractor, the status of her personnel, or any other matters involving the acts or omissions of
Consultant and her personnel. Indemnification shall be for any and all losses and damages, including costs and
attorneys’ fees.
17.
Insurance. Consultant will obtain for herself and her personnel before providing services, at her
own expense, General Liability (GL) insurance coverage for consulting services performed under this Agreement
and (if available under state law) worker’s compensation coverage.
18.
Successors and Assigns. Consultant may not subcontract or otherwise delegate her obligations
under this Agreement without Client’s prior written consent. Client may assign this Agreement. Subject to the
foregoing, this Agreement will be for the benefit of Client’s successors and assigns and will be binding on
Consultant’s subcontractors or delegates.
19.
Notices. Any notice required or permitted by this Agreement shall be in writing and shall be
delivered as follows with notice deemed given as indicated: (i) by overnight courier upon written verification of
receipt; or (ii) by telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission.
Notice shall be sent to the addresses set forth below or such other address as either party may specify in writing.
20.
Governing Law. This Agreement shall be governed in all respects by the laws of the State of
Maryland, as such laws are applied to agreements entered into and to be performed entirely within Maryland
between Maryland residents. Any suit involving this Agreement shall be brought in a court sitting in Maryland.
The parties agree that venue shall be proper in such courts, and that such courts will have personal jurisdiction
over them.
21.
Severability. Should any provisions of this Agreement be held by a court of law to be illegal,
invalid or unenforceable, the legality, validity and enforceability of the remaining provisions of this Agreement
shall not be affected or impaired thereby.
22. Waiver. The waiver by Client of a breach of any provision of this Agreement by Consultant shall
not operate or be construed as a waiver of any other or subsequent breach by Consultant.
23.
Injunctive Relief for Breach. Consultant’s obligations under this Agreement are of a unique
character that gives them particular value; breach of any of such obligations will result in irreparable and
continuing damage to Client for which there will be no adequate remedy at law; and, in the event of such breach,
Client will be entitled to injunctive relief and/or a decree for specific performance, and such other and further
relief as may be proper (including monetary damages if appropriate and attorney’s fees).
24.
Entire Agreement. This Agreement constitutes the entire understanding of the parties relating to
the subject matter and supersedes any previous oral or written communications, representations, understanding, or
agreement between the parties concerning such subject matter. This Agreement shall not be changed, modified,
supplemented or amended except by express written agreement signed by Consultant and the Client. The parties
have entered into separate agreements related to Consultant’s previous employment relationship with
6
GlycoMimetics, Inc. These separate agreements govern the previous employment relationship between Consultant
and GlycoMimetics, Inc., have or may have provisions that survive termination of Consultant’s relationship with
Client under this Agreement, may be amended or superseded without regard to this Agreement, and are
enforceable according to their terms without regard to the enforcement provision of this Agreement.
[The remainder of this page is intentionally blank. Signature page follows.]
7
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date first written
above.
“CLIENT”
GLYCOMIMETICS, INC.
By:
/s/ Brian Hahn
“CONSULTANT”
RACHEL K. KING
/s/ Rachel K. King
Name (print): Brian Hahn
Name (print): Rachel King
Title:
Telephone:
Fax:
Chief Financial Officer and
Senior Vice President
(301) 417-4254
(240) 599-7656
Address:
Tel:
Fax:
8009 Spring Road
Cabin John, MD 20818
(202) 256-6991
N/A
GLYCOMIMETICS, INC.
AMENDED AND RESTATED
NON-EMPLOYEE DIRECTOR COMPENSATION POLICY
Exhibit 10.14
Each member of the Board of Directors (the “Board”) who is not also serving as an employee of GlycoMimetics, Inc. (the
“Company”) or any of its subsidiaries (each such member, an “Eligible Director”) will receive the compensation
described in this Amended and Restated Non-Employee Director Compensation Policy for his or her Board service. This
policy may be amended at any time in the sole discretion of the Board or the Compensation Committee of the Board.
Annual Cash Compensation
The annual cash compensation amount set forth below is payable in equal quarterly installments, payable in arrears on the
last day of each fiscal quarter in which the service occurred. If an Eligible Director joins the Board or a committee of the
Board at a time other than effective as of the first day of a fiscal quarter, each annual retainer set forth below will be pro-
rated based on days served in the applicable fiscal year, with the pro-rated amount paid for the first fiscal quarter in which
the Eligible Director provides the service, and regular full quarterly payments thereafter. All annual cash fees are vested
upon payment.
1. Annual Board Service Retainer:
a.
b.
All Eligible Directors: $40,000
Chair of the Board Service Retainer (in addition to Eligible Director Service Retainer): $30,000
2. Annual Committee (Non-Chair) Member Service Retainer:
a. Member of the Audit Committee: $9,000
b. Member of the Compensation Committee: $6,000
c. Member of the Nominating and Corporate Governance Committee: $4,500
3. Annual Committee Chair Service Retainer:
a.
b.
c.
Chair of the Audit Committee: $18,000
Chair of the Compensation Committee: $12,000
Chair of the Nominating and Corporate Governance Committee: $9,000
Equity Compensation
The equity compensation set forth below will be granted under the GlycoMimetics, Inc. 2013 Equity Incentive Plan (the
“Plan”). Any stock options granted under this policy will be nonstatutory stock options, with an exercise price per share
equal to 100% of the Fair Market Value (as defined in the Plan) of the underlying Common Stock on the date of grant, and
a term of ten years from the date of grant (subject to earlier termination in connection with a termination of service as
provided in the Plan).
1.
Initial Grant: On the date of an Eligible Director’s initial election to the Board (or if such date is not a market trading
day, the first market trading day thereafter), the Eligible Director will be automatically, and without further action by the
Board or Compensation Committee of the Board, granted a stock option for 42,000 shares of Common Stock. The shares
subject to each stock option
will vest in three equal installments on the first, second and third anniversary of the date of grant, subject to the Eligible
Director’s Continuous Service (as defined in the Plan) at each vesting date.
2.
Annual Grant: On the date of each annual stockholder meeting of the Company, each Eligible Director who
continues to serve as a non-employee member of the Board will be automatically, and without further action by the Board
or Compensation Committee of the Board, granted a stock option for 21,000 shares of Common Stock (or an equivalent
award of equity in such form as the Board or Compensation Committee of the Board shall determine). The shares subject
to each stock option or other equity award granted hereunder will vest in full on the first anniversary of the applicable
annual stockholder meeting, subject to the Eligible Director’s Continuous Service (as defined in the Plan) as of such
vesting date.
GLYCOMIMETICS, INC.
AMENDED AND RESTATED
INDUCEMENT PLAN
Exhibit 10.19
1.
GENERAL.
(a)
Eligible Stock Award Recipients. The only persons eligible to receive grants of Stock Awards
under this Plan are individuals who satisfy the standards for inducement grants under Nasdaq Marketplace Rule
5635(c)(4) and the related guidance under Nasdaq IM 5635-1 – that is, generally, a person not previously an
employee or director of the Company, or following a bona fide period of non-employment, as an inducement
material to the individual’s entering into employment with the Company. Such eligible individuals are referred to
in this Plan as “Eligible Employees”. These grants will be approved by either the Compensation Committee or a
majority of the Company’s “Independent Directors” (as such term is defined by Nasdaq for purposes of Nasdaq
Marketplace Rule 5635(c)(4)). We refer to Nasdaq Marketplace Rule 5635(c)(4) and the related guidance under
Nasdaq IM 5635-1 as the “Inducement Award Rules”.
(b)
Available Stock Awards. The Plan provides for the grant of the following Stock Awards: (i)
Nonstatutory Stock Options, (ii) Stock Appreciation Rights (iii) Restricted Stock Awards, (iv) Restricted Stock
Unit Awards, and (v) Other Stock Awards. As provided in Section 2(a), Stock Awards may be granted only by
either the Compensation Committee or a majority of the Independent Directors as required by the Inducement
Award Rules. Incentive Stock Options may not be granted under this Plan.
(c)
General Purpose. The Company, by means of the Plan, seeks to secure and retain the services of
one or more Eligible Employees, to provide incentives for such persons to exert maximum efforts for the success
of the Company and any Affiliate, and to provide a means by which such persons may be given an opportunity to
benefit from increases in value of the Common Stock through the granting of Stock Awards.
2.
ADMINISTRATION.
(a)
Administration. The Compensation Committee shall administer the Plan. Stock Awards may
only be granted by either: (i) the Compensation Committee as composed solely of Independent Directors, (ii)
another Committee composed solely of Independent Directors and constituting a majority of the Company’s
Independent Directors, or (iii) at the Board level by a majority of the Company’s Independent Directors, with non-
Independent Directors abstaining. Subject to the foregoing Stock Award approval requirements and the other
constraints of the Inducement Award Rules, the Compensation Committee may delegate some of its powers of
administration of the Plan to another Committee, as provided in Section 2(c) (and references in this Plan to the
Compensation Committee will thereafter be to the applicable Committee).
(b)
Powers of Compensation Committee. The Compensation Committee will have the power,
subject to, and within the limitations of, the express provisions of the Plan and the Inducement Award Rules,
including:
As approved by the Compensation Committee
January 21, 2022
1.
(i)
To determine: (A) which Eligible Employees will be granted Stock Awards; (B) when and
how each Stock Award will be granted; (C) what type of Stock Award will be granted; (D) the provisions of each
Stock Award (which need not be identical), including when a person will be permitted to exercise or otherwise
receive cash or Common Stock under the Stock Award; (E) the number of shares of Common Stock subject to, or
the cash value of, a Stock Award; and (F) the Fair Market Value applicable to a Stock Award; provided, however,
that Stock Awards may only be granted by either (1) the Compensation Committee as composed solely of
Independent Directors, (2) another Committee composed solely of Independent Directors constituting a majority
of the Company’s Independent Directors, or (3) at the Board level by a majority of the Company's Independent
Directors, with non-Independent Directors abstaining.
(ii)
To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for administration of the Plan and Stock Awards. The Compensation
Committee, in the exercise of these powers, may correct any defect, omission or inconsistency in the Plan or in
any Stock Award Agreement, in a manner and to the extent it will deem necessary or expedient to make the Plan
or Stock Award fully effective.
(iii)
To settle all controversies regarding the Plan and Stock Awards granted under it.
(iv)
To accelerate, in whole or in part, the time at which a Stock Award may be exercised or vest
(or at which cash or shares of Common Stock may be issued).
(v)
To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan or a
Stock Award Agreement, suspension or termination of the Plan will not materially impair a Participant’s rights
under his or her then-outstanding Stock Award without his or her written consent except as provided in Section
2(b)(viii) below.
(vi)
To amend the Plan in any respect the Compensation Committee deems necessary or
advisable consistent with the Inducement Award Rules, including, without limitation, by adopting amendments
relating to certain nonqualified deferred compensation under Section 409A of the Code and/or to make the Plan or
Stock Awards granted under the Plan exempt from or compliant with the requirements for nonqualified deferred
compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law, and subject to
any stockholder approval required under the Inducement Award Rules in connection with such amendment of the
Plan. Except as otherwise provided in the Plan or a Stock Award Agreement, no amendment of the Plan will
materially impair a Participant’s rights under an outstanding Stock Award without the Participant’s written
consent.
(vii)
To approve forms of Stock Award Agreements for use under the Plan.
(viii) To amend the terms of any one or more Stock Awards, including, but not limited to,
amendments to provide terms more favorable to the Participant than previously provided in the Stock Award
Agreement, subject to any specified limits in the Plan that are not subject to Compensation Committee discretion,
and subject to any stockholder approval required under the Inducement Award Rules in connection with such
amendment of a Stock Award;
As approved by the Compensation Committee
January 21, 2022
2.
provided however, that a Participant’s rights under any Stock Award will not be impaired by any such amendment
unless (A) the Company requests the consent of the affected Participant, and (B) such Participant consents in
writing. Notwithstanding the foregoing, (1) a Participant’s rights will not be deemed to have been impaired by any
such amendment if the Compensation Committee, in its sole discretion, determines that the amendment, taken as a
whole, does not materially impair the Participant’s rights, and (2) subject to the limitations of applicable law, if
any, the Compensation Committee may amend the terms of any one or more Stock Awards without the affected
Participant’s consent (A) to clarify the manner of exemption from, or to bring the Stock Award into compliance
with, Section 409A of the Code or (B) to comply with other applicable laws or listing requirements, including the
Inducement Award Rules.
(ix)
Generally, to exercise such powers and to perform such acts as the Compensation
Committee deems necessary or expedient to promote the best interests of the Company and that are not in conflict
with the provisions of the Plan or Stock Awards.
(x)
To adopt such procedures and sub-plans as are necessary or appropriate to permit
participation in the Plan by Eligible Employees who are foreign nationals or employed outside the United States
(provided that Compensation Committee approval will not be necessary for immaterial modifications to the Plan
or any Stock Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction).
(c)
Delegation to Committee.
(i)
General. Subject to the Stock Award approval requirements set forth in Section 2(a), the
Compensation Committee may delegate some or all of the administration of the Plan to a Committee but only to
the extent that such delegation is consistent with the Inducement Award Rules. If administration is delegated to a
Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore
possessed by the Compensation Committee that have been delegated to the Committee, including the power to
delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise, subject,
however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Compensation Committee. The Compensation Committee may retain the authority to concurrently
administer the Plan with the Committee and may, at any time, re-vest in the Compensation Committee some or all
of the powers previously delegated.
(d)
Effect of Compensation Committee’s Decision. All determinations, interpretations and
constructions made by the Compensation Committee in good faith will not be subject to review by any person and
will be final, binding and conclusive on all persons.
(e)
Cancellation and Re-Grant of Stock Awards. Neither the Compensation Committee nor any
Committee will have the authority to: (i) reduce the exercise price or strike price of any outstanding Options or
SARs under the Plan, or (ii) cancel any outstanding Options or SARs that have an exercise price or strike price
greater than the current Fair Market Value in exchange for cash or other Stock Awards under the Plan, unless the
stockholders of the Company have approved such an action within twelve months prior to such an event.
As approved by the Compensation Committee
January 21, 2022
3.
3.
SHARES SUBJECT TO THE PLAN.
(a)
Share Reserve. Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate
number of shares of Common Stock that may be issued pursuant to Stock Awards from and after the Effective
Date will not exceed 3,000,000 shares (the “Share Reserve”). For clarity, the Share Reserve is a limitation on the
number of shares of Common Stock that may be issued under the Plan. Accordingly, this Section 3(a) does not
limit the granting of Stock Awards except as provided in Section 7(a). Shares may be issued in connection with a
merger or acquisition as permitted by NASDAQ Listing Rule 5635(c) or, if applicable, NYSE Listed Company
Manual Section 303A.08, AMEX Company Guide Section 711 or other applicable rule, and such issuance will not
reduce the number of shares available for issuance under the Plan.
(b)
Reversion of Shares to the Share Reserve. If a Stock Award or any portion thereof (i) expires or
otherwise terminates without all of the shares covered by such Stock Award having been issued or (ii) is settled in
cash (i.e., the Participant receives cash rather than stock), such expiration, termination or settlement will not
reduce (or otherwise offset) the number of shares of Common Stock that may be available for issuance under the
Plan. If any shares of Common Stock issued pursuant to a Stock Award are forfeited back to or repurchased by
the Company because of the failure to meet a contingency or condition required to vest such shares in the
Participant, then the shares that are forfeited or repurchased will revert to and again become available for issuance
under the Plan. Any shares reacquired by the Company in satisfaction of tax withholding obligations on a Stock
Award or as consideration for the exercise or purchase price of a Stock Award will again become available for
issuance under the Plan.
(c)
Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or
reacquired Common Stock, including shares repurchased by the Company on the open market or otherwise.
4.
ELIGIBILITY.
Stock Awards may be granted to Eligible Employees; provided, however, that Stock Awards may not be
granted to Eligible Employees who are providing Continuous Service only to any “parent” of the Company, as
such term is defined in Rule 405 of the Securities Act, unless (i) the stock underlying such Stock Awards is treated
as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted
pursuant to a corporate transaction such as a spin off transaction), (ii) the Company, in consultation with its legal
counsel, has determined that such Stock Awards are otherwise exempt from Section 409A of the Code, or (iii) the
Company, in consultation with its legal counsel, has determined that such Stock Awards comply with the
distribution requirements of Section 409A of the Code.
5.
PROVISIONS RELATING TO OPTIONS AND STOCK APPRECIATION RIGHTS.
Each Option or SAR will be in such form and will contain such terms and conditions as the Compensation
Committee deems appropriate. The provisions of separate Options or SARs need not be identical; provided,
however, that each Stock Award Agreement will conform to
As approved by the Compensation Committee
January 21, 2022
4.
(through incorporation of provisions hereof by reference in the applicable Stock Award Agreement or otherwise)
the substance of each of the following provisions:
(a)
Term. No Option or SAR will be exercisable after the expiration of ten years from the date of its
grant or such shorter period specified in the Stock Award Agreement.
(b)
Exercise Price. The exercise or strike price of each Option or SAR will be not less than 100% of
the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Stock Award is granted.
Each SAR will be denominated in shares of Common Stock equivalents.
(c)
Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the
exercise of an Option may be paid, to the extent permitted by applicable law and as determined by the
Compensation Committee in its sole discretion, by any combination of the methods of payment set forth below.
The Compensation Committee will have the authority to grant Options that do not permit all of the following
methods of payment (or that otherwise restrict the ability to use certain methods) and to grant Options that require
the consent of the Company to use a particular method of payment. The permitted methods of payment are as
follows:
(i)
by cash, check, bank draft or money order payable to the Company;
(ii)
pursuant to a program developed under Regulation T as promulgated by the Federal
Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or
check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the
Company from the sales proceeds;
(iii)
by delivery to the Company (either by actual delivery or attestation) of shares of Common
Stock;
(iv)
by a “net exercise” arrangement pursuant to which the Company will reduce the number of
shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value
that does not exceed the aggregate exercise price; provided, however, that the Company will accept a cash or other
payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied
by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject
to an Option and will not be exercisable thereafter to the extent that (A) shares issuable upon exercise are reduced
to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of
such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or
(v)
in any other form of legal consideration that may be acceptable to the Compensation
Committee and specified in the applicable Stock Award Agreement.
(d)
Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide
written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right
Agreement evidencing such SAR. The appreciation
As approved by the Compensation Committee
January 21, 2022
5.
distribution payable on the exercise of a SAR will be not greater than an amount equal to the excess of (A) the
aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of Common Stock
equal to the number of Common Stock equivalents in which the Participant is vested under such SAR, and with
respect to which the Participant is exercising the SAR on such date, over (B) the aggregate strike price of the
number of Common Stock equivalents with respect to which the Participant is exercising the SAR on such date.
The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any
other form of consideration, as determined by the Compensation Committee and contained in the Stock Award
Agreement evidencing such SAR.
(e)
Transferability of Options and SARs. The Compensation Committee may, in its sole discretion,
impose such limitations on the transferability of Options and SARs as the Compensation Committee will
determine. In the absence of such a determination by the Compensation Committee to the contrary, the following
restrictions on the transferability of Options and SARs will apply:
(i)
Restrictions on Transfer. An Option or SAR will not be transferable except by will or by
the laws of descent and distribution (or pursuant to subsections (ii) and (iii) below), and will be exercisable during
the lifetime of the Participant only by the Participant. The Compensation Committee may permit transfer of the
Option or SAR in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly
provided herein, neither an Option nor a SAR may be transferred for consideration.
(ii)
Domestic Relations Orders. Subject to the approval of the Compensation Committee or a
duly authorized Officer, an Option or SAR may be transferred pursuant to the terms of a domestic relations order,
official marital settlement agreement or other divorce or separation instrument.
(iii)
Beneficiary Designation. Subject to the approval of the Compensation Committee or a
duly authorized Officer, a Participant may, by delivering written notice to the Company, in a form approved by the
Company (or the designated broker), designate a third party who, on the death of the Participant, will thereafter be
entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such
exercise. In the absence of such a designation, the executor or administrator of the Participant’s estate will be
entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such
exercise. However, the Company may prohibit designation of a beneficiary at any time, including due to any
conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws.
(f)
Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR
may vest and become exercisable in periodic installments that may or may not be equal. The Option or SAR may
be subject to such other terms and conditions on the time or times when it may or may not be exercised (which
may be based on the satisfaction of performance goals or other criteria) as the Compensation Committee may
deem appropriate. The vesting provisions of individual Options or SARs may vary. The provisions of this
Section 5(f) are subject to any Option or SAR provisions governing the minimum number of shares of Common
Stock as to which an Option or SAR may be exercised.
As approved by the Compensation Committee
January 21, 2022
6.
(g)
Termination of Continuous Service. Except as otherwise provided in the applicable Stock Award
Agreement or other agreement between the Participant and the Company, if a Participant’s Continuous Service
terminates (other than for Cause and other than upon the Participant’s death or Disability), the Participant may
exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Stock Award as
of the date of termination of Continuous Service) within the period of time ending on the earlier of (i) the date
three months following the termination of the Participant’s Continuous Service (or such longer or shorter period
specified in the applicable Stock Award Agreement), and (ii) the expiration of the term of the Option or SAR as
set forth in the Stock Award Agreement. If, after termination of Continuous Service, the Participant does not
exercise his or her Option or SAR (as applicable) within the applicable time frame, the Option or SAR will
terminate.
(h)
Extension of Termination Date. If the exercise of an Option or SAR following the termination of
the Participant’s Continuous Service (other than for Cause and other than upon the Participant’s death or
Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate
the registration requirements under the Securities Act, then the Option or SAR will terminate on the earlier of (i)
the expiration of a total period of time (that need not be consecutive) equal to the applicable post termination
exercise period after the termination of the Participant’s Continuous Service during which the exercise of the
Option or SAR would not be in violation of such registration requirements, and (ii) the expiration of the term of
the Option or SAR as set forth in the applicable Stock Award Agreement. In addition, unless otherwise provided
in a Participant’s Stock Award Agreement, if the sale of any Common Stock received on exercise of an Option or
SAR following the termination of the Participant’s Continuous Service (other than for Cause) would violate the
Company’s insider trading policy, then the Option or SAR will terminate on the earlier of (i) the expiration of a
period of months (that need not be consecutive) equal to the applicable post-termination exercise period after the
termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon
exercise of the Option or SAR would not be in violation of the Company’s insider trading policy, or (ii) the
expiration of the term of the Option or SAR as set forth in the applicable Stock Award Agreement.
(i)
Disability of Participant. Except as otherwise provided in the applicable Stock Award Agreement
or other agreement between the Participant and the Company, if a Participant’s Continuous Service terminates as a
result of the Participant’s Disability, the Participant may exercise his or her Option or SAR (to the extent that the
Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but
only within such period of time ending on the earlier of (i) the date 12 months following such termination of
Continuous Service (or such longer or shorter period specified in the Stock Award Agreement), and (ii) the
expiration of the term of the Option or SAR as set forth in the Stock Award Agreement. If, after termination of
Continuous Service, the Participant does not exercise his or her Option or SAR within the applicable time frame,
the Option or SAR (as applicable) will terminate.
(j)
Death of Participant. Except as otherwise provided in the applicable Stock Award Agreement or
other agreement between the Participant and the Company, if (i) a Participant’s Continuous Service terminates as
a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Stock
Award Agreement for
As approved by the Compensation Committee
January 21, 2022
7.
exercisability after the termination of the Participant’s Continuous Service for a reason other than death, then the
Option or SAR may be exercised (to the extent the Participant was entitled to exercise such Option or SAR as of
the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Option or SAR by
bequest or inheritance or by a person designated to exercise the Option or SAR upon the Participant’s death, but
only within the period ending on the earlier of (i) the date 18 months following the date of death (or such longer or
shorter period specified in the Stock Award Agreement), and (ii) the expiration of the term of such Option or SAR
as set forth in the Stock Award Agreement. If, after the Participant’s death, the Option or SAR is not exercised
within the applicable time frame, the Option or SAR will terminate.
(k)
Termination for Cause. Except as explicitly provided otherwise in a Participant’s Stock Award
Agreement or other individual written agreement between the Company or any Affiliate and the Participant, if a
Participant’s Continuous Service is terminated for Cause, the Option or SAR will terminate immediately upon
such Participant’s termination of Continuous Service, and the Participant will be prohibited from exercising his or
her Option or SAR from and after the date of such termination of Continuous Service.
(l)
Non-Exempt Employees. If an Option or SAR is granted to an Eligible Employee who is a non-
exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, the Option or SAR will not
be first exercisable for any shares of Common Stock until at least six (6) months following the date of grant of the
Option or SAR (although the Stock Award may vest prior to such date). Consistent with the provisions of the
Worker Economic Opportunity Act, (i) if such non-exempt Employee dies or suffers a Disability, (ii) upon a
Corporate Transaction in which such Option or SAR is not assumed, continued, or substituted, (iii) upon a Change
in Control, or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s Stock Award
Agreement in another agreement between the Participant and the Company, or, if no such definition, in
accordance with the Company's then current employment policies and guidelines), the vested portion of any
Options and SARs may be exercised earlier than six months following the date of grant. The foregoing provision
is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or
vesting of an Option or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or
required for compliance with the Worker Economic Opportunity Act to ensure that any income derived by a non-
exempt employee in connection with the exercise, vesting or issuance of any shares under any other Stock Award
will be exempt from the employee’s regular rate of pay, the provisions of this Section 5(l) will apply to all Stock
Awards and are hereby incorporated by reference into such Stock Award Agreements.
6.
PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS AND SARS.
(a)
Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will
contain such terms and conditions as the Compensation Committee will deem appropriate. To the extent
consistent with the Company’s bylaws, at the Compensation Committee’s election, shares of Common Stock may
be (x) held in book entry form subject to the Company’s instructions until any restrictions relating to the
Restricted Stock Award lapse; or (y) evidenced by a certificate, which certificate will be held in such form and
manner as determined by the Compensation Committee. The terms and conditions of Restricted Stock
As approved by the Compensation Committee
January 21, 2022
8.
Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock
Award Agreements need not be identical. Each Restricted Stock Award Agreement will conform to (through
incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the
following provisions:
(i)
Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash,
check, bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C)
any other form of legal consideration (including future services) that may be acceptable to the Compensation
Committee, in its sole discretion, and permissible under applicable law.
(ii)
Vesting. Shares of Common Stock awarded under the Restricted Stock Award Agreement
may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the
Compensation Committee.
(iii)
Termination of Participant’s Continuous Service. If a Participant’s Continuous Service
terminates, the Company may receive through a forfeiture condition or a repurchase right any or all of the shares
of Common Stock held by the Participant as of the date of termination of Continuous Service under the terms of
the Restricted Stock Award Agreement.
(iv)
Transferability. Rights to acquire shares of Common Stock under the Restricted Stock
Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in
the Restricted Stock Award Agreement, as the Compensation Committee will determine in its sole discretion, so
long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the
Restricted Stock Award Agreement.
(v)
Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on
Restricted Stock will be subject to the same vesting and forfeiture restrictions as apply to the shares subject to the
Restricted Stock Award to which they relate.
(b)
Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such
form and will contain such terms and conditions as the Compensation Committee will deem appropriate. The
terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms
and conditions of separate Restricted Stock Unit Award Agreements need not be identical. Each Restricted Stock
Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the
Agreement or otherwise) the substance of each of the following provisions:
(i)
Consideration. At the time of grant of a Restricted Stock Unit Award, the Compensation
Committee will determine the consideration, if any, to be paid by the Participant upon delivery of each share of
Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the
Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of
legal consideration that may be acceptable to the Compensation Committee, in its sole discretion, and permissible
under applicable law.
As approved by the Compensation Committee
January 21, 2022
9.
(ii)
Vesting. At the time of the grant of a Restricted Stock Unit Award, the Compensation
Committee may impose such restrictions on or conditions to the vesting of the Restricted Stock Unit Award as it,
in its sole discretion, deems appropriate.
(iii)
Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of
Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as
determined by the Compensation Committee and contained in the Restricted Stock Unit Award Agreement.
(iv)
Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the
Compensation Committee, as it deems appropriate, may impose such restrictions or conditions that delay the
delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a
time after the vesting of such Restricted Stock Unit Award.
(v)
Dividend Equivalents. Dividend equivalents may be credited in respect of shares of
Common Stock covered by a Restricted Stock Unit Award, as determined by the Compensation Committee and
contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Compensation Committee,
such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted
Stock Unit Award in such manner as determined by the Compensation Committee. Any additional shares covered
by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the
same terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.
(vi)
Termination of Participant’s Continuous Service. Except as otherwise provided in the
applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not
vested will be forfeited upon the Participant’s termination of Continuous Service.
(c)
Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or
otherwise based on, Common Stock, including the appreciation in value thereof (e.g., options or stock rights with
an exercise price or strike price less than 100% of the Fair Market Value of the Common Stock at the time of
grant) may be granted either alone or in addition to Stock Awards provided for under Section 5 and the preceding
provisions of this Section 6. Subject to the provisions of the Plan, the Compensation Committee will have sole
and complete authority to determine the persons to whom and the time or times at which such Other Stock Awards
will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to
such Other Stock Awards and all other terms and conditions of such Other Stock Awards.
7.
COVENANTS OF THE COMPANY.
(a)
Availability of Shares. The Company will keep available at all times the number of shares of
Common Stock reasonably required to satisfy then-outstanding Stock Awards.
As approved by the Compensation Committee
January 21, 2022
10.
(b)
Securities Law Compliance. The Company will seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue
and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that this undertaking
will not require the Company to register under the Securities Act the Plan, any Stock Award or any Common
Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts and at a reasonable cost,
the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the
Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will
be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards
unless and until such authority is obtained. A Participant will not be eligible for the grant of a Stock Award or the
subsequent issuance of cash or Common Stock pursuant to the Stock Award if such grant or issuance would be in
violation of any applicable securities law.
(c)
No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to
any Participant to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the
Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or
expiration of a Stock Award or a possible period in which the Stock Award may not be exercised. The Company
has no duty or obligation to minimize the tax consequences of a Stock Award to the holder of such Stock Award.
8.
MISCELLANEOUS.
(a)
Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common
Stock pursuant to Stock Awards will constitute general funds of the Company.
(b)
Corporate Action Constituting Grant of Stock Awards. Corporate action constituting a grant by
the Company of a Stock Award to any Participant will be deemed completed as of the date of such corporate
action, unless otherwise determined by the Compensation Committee, regardless of when the instrument,
certificate, or letter evidencing the Stock Award is communicated to, or actually received or accepted by, the
Participant. In the event that the corporate records (e.g., Compensation Committee consents, resolutions or
minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting
schedule or number of shares) that are inconsistent with those in the Stock Award Agreement or related grant
documents as a result of a clerical error in the papering of the Stock Award Agreement or related grant documents,
the corporate records will control and the Participant will have no legally binding right to the incorrect term in the
Stock Award Agreement or related grant documents.
(c)
Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares of Common Stock subject to a Stock Award unless and until (i) such
Participant has satisfied all requirements for exercise of, or the issuance of shares under, the Stock Award pursuant
to its terms, and (ii) the issuance of the Common Stock subject to such Stock Award has been entered into the
books and records of the Company.
As approved by the Compensation Committee
January 21, 2022
11.
(d)
No Employment or Other Service Rights. Nothing in the Plan, any Stock Award Agreement or
any other instrument executed thereunder or in connection with any Stock Award granted pursuant thereto will
confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at
the time the Stock Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the
employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a
Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law
of the state in which the Company or the Affiliate is incorporated, as the case may be.
(e)
Change in Time Commitment. In the event a Participant’s regular level of time commitment in
the performance of his or her services for the Company and any Affiliates is reduced (for example, and without
limitation, if the Participant is an Employee of the Company and the Employee has a change in status from a full-
time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Stock
Award to the Participant, the Compensation Committee has the right in its sole discretion to (x) make a
corresponding reduction in the number of shares or cash amount subject to any portion of such Stock Award that
is scheduled to vest or become payable after the date of such change in time commitment, and (y) in lieu of or in
combination with such a reduction, extend the vesting or payment schedule applicable to such Stock Award. In the
event of any such reduction, the Participant will have no right with respect to any portion of the Stock Award that
is so reduced.
(f)
Investment Assurances. The Company may require a Participant, as a condition of exercising or
acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to
the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser
representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and
business matters and that he or she is capable of evaluating, alone or together with the purchaser representative,
the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company
stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own
account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing
requirements, and any assurances given pursuant to such requirements, will be inoperative if (A) the issuance of
the shares upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a
then currently effective registration statement under the Securities Act, or (B) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not be met in the circumstances
under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to
comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the
Common Stock.
(g) Withholding Obligations. Unless prohibited by the terms of a Stock Award Agreement, the
Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation relating to a
Stock Award by any of the following means or by a combination of such means: (i) causing the Participant to
tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or
otherwise
As approved by the Compensation Committee
January 21, 2022
12.
issuable to the Participant in connection with the Stock Award; provided, however, that no shares of Common
Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such
lesser amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting
purposes); (iii) withholding cash from a Stock Award settled in cash; (iv) withholding payment from any amounts
otherwise payable to the Participant; or (v) by such other method as may be set forth in the Stock Award
Agreement.
(h)
Electronic Delivery. Any reference herein to a “written” agreement or document will include any
agreement or document delivered electronically, filed publicly at www.sec.gov (or any successor website thereto)
or posted on the Company’s intranet (or other shared electronic medium controlled by the Company to which the
Participant has access).
(i)
Deferrals. To the extent permitted by applicable law, the Compensation Committee, in its sole
discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting
or settlement of all or a portion of any Stock Award may be deferred and may establish programs and procedures
for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with
Section 409A of the Code. Consistent with Section 409A of the Code, the Compensation Committee may provide
for distributions while a Participant is still an employee or otherwise providing services to the Company. The
Compensation Committee is authorized to make deferrals of Stock Awards and determine when, and in what
annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s
termination of Continuous Service, and implement such other terms and conditions consistent with the provisions
of the Plan and in accordance with applicable law.
(j)
Compliance with Section 409A. Unless otherwise expressly provided for in a Stock Award
Agreement, the Plan and Stock Award Agreements will be interpreted to the greatest extent possible in a manner
that makes the Plan and the Stock Awards granted hereunder exempt from Section 409A of the Code, and, to the
extent not so exempt, in compliance with Section 409A of the Code. If the Compensation Committee determines
that any Stock Award granted hereunder is not exempt from and is therefore subject to Section 409A of the Code,
the Stock Award Agreement evidencing such Stock Award will incorporate the terms and conditions necessary to
avoid the consequences specified in Section 409A(a)(1) of the Code, and to the extent a Stock Award Agreement
is silent on terms necessary for compliance, such terms are hereby incorporated by reference into the Stock Award
Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Stock Award Agreement
specifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding a
Stock Award that constitutes “deferred compensation” under Section 409A of the Code is a “specified employee”
for purposes of Section 409A of the Code, no distribution or payment of any amount that is due because of a
“separation from service” (as defined in Section 409A of the Code without regard to alternative definitions
thereunder) will be issued or paid before the date that is six months following the date of such Participant’s
“separation from service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can
be made in a manner that complies with Section 409A of the Code, and any amounts so deferred will be paid in a
lump sum on the day after such six month period elapses, with the balance paid thereafter on the original
schedule.
As approved by the Compensation Committee
January 21, 2022
13.
(k)
Clawback/Recovery. All Stock Awards granted under the Plan will be subject to recoupment in
accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of
any national securities exchange or association on which the Company’s securities are listed or as is otherwise
required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition,
the Compensation Committee may impose such other clawback, recovery or recoupment provisions in a Stock
Award Agreement as the Compensation Committee determines necessary or appropriate, including but not limited
to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon
the occurrence of Cause. No recovery of compensation under such a clawback policy will be an event giving rise
to a right to resign for “good reason” or “constructive termination” (or similar term) under any agreement with the
Company.
9.
ADJUSTMENTS UPON CHANGES IN COMMON STOCK; OTHER CORPORATE EVENTS.
(a)
Capitalization Adjustments. In the event of a Capitalization Adjustment, the Compensation
Committee will appropriately and proportionately adjust: (i) the class(es) and maximum number of securities
subject to the Plan pursuant to Section 3(a) and (ii) the class(es) and number of securities and price per share of
stock subject to outstanding Stock Awards. The Compensation Committee will make such adjustments, and its
determination will be final, binding and conclusive.
(b)
Dissolution or Liquidation. Except as otherwise provided in the Stock Award Agreement, in the
event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards
consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the
Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or
liquidation, and the shares of Common Stock subject to the Company’s repurchase rights or subject to a forfeiture
condition may be repurchased or reacquired by the Company notwithstanding the fact that the holder of such
Stock Award is providing Continuous Service; provided, however, that the Compensation Committee may, in its
sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/or no longer subject to
repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the
dissolution or liquidation is completed but contingent on its completion.
(c)
Corporate Transaction. The following provisions will apply to Stock Awards in the event of a
Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award or any other
written agreement between the Company or any Affiliate and the Participant or unless otherwise expressly
provided by the Compensation Committee at the time of grant of a Stock Award. In the event of a Corporate
Transaction, then, notwithstanding any other provision of the Plan, the Compensation Committee will take one or
more of the following actions with respect to Stock Awards, contingent upon the closing or completion of the
Corporate Transaction:
(i)
arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring
corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock award for
the Stock Award (including, but not limited to, an award to
As approved by the Compensation Committee
January 21, 2022
14.
acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);
(ii)
arrange for the assignment of any reacquisition or repurchase rights held by the Company in
respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or acquiring
corporation (or the surviving or acquiring corporation’s parent company);
(iii)
accelerate the vesting, in whole or in part, of the Stock Award (and, if applicable, the time
at which the Stock Award may be exercised) to a date prior to the effective time of such Corporate Transaction as
the Compensation Committee will determine (or, if the Compensation Committee will not determine such a date,
to the date that is five days prior to the effective date of the Corporate Transaction), with such Stock Award
terminating if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction;
(iv)
arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by
the Company with respect to the Stock Award;
(v)
cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not
exercised prior to the effective time of the Corporate Transaction, in exchange for such cash consideration, if any,
as the Compensation Committee, in its sole discretion, may consider appropriate; and
(vi)
make a payment, in such form as may be determined by the Compensation Committee
equal to the excess, if any, of (A) the value of the property the Participant would have received upon the exercise
of the Stock Award immediately prior to the effective time of the Corporate Transaction, over (B) any exercise
price payable by such holder in connection with such exercise.
The Compensation Committee need not take the same action or actions with respect to all Stock Awards or
portions thereof or with respect to all Participants. The Compensation Committee may take different actions with
respect to the vested and unvested portions of a Stock Award.
(d)
Change in Control. A Stock Award may be subject to additional acceleration of vesting and
exercisability upon or after a Change in Control as may be provided in the Stock Award Agreement for such Stock
Award or as may be provided in any other written agreement between the Company or any Affiliate and the
Participant, but in the absence of such provision, no such acceleration will occur.
10.
PLAN TERM; EARLIER TERMINATION OR SUSPENSION OF THE PLAN.
The Compensation Committee may suspend or terminate the Plan at any time. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.
11.
EFFECTIVE DATE OF PLAN.
The Plan will become effective on the Effective Date.
As approved by the Compensation Committee
January 21, 2022
15.
12.
CHOICE OF LAW.
The law of the State of Delaware will govern all questions concerning the construction, validity and
interpretation of the Plan, without regard to that state’s conflict of laws rules.
DEFINITIONS. As used in the Plan, the following definitions will apply to the capitalized terms
13.
indicated below:
(a)
“Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as
such terms are defined in Rule 405 of the Securities Act. The Compensation Committee will have the authority to
determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition.
(b)
(c)
(d)
(e)
“Award” means a Stock Award.
“Award Agreement” means a Stock Award Agreement.
“Board” means the Board of Directors of the Company.
“Capital Stock” means each and every class of common stock of the Company, regardless of the
number of votes per share.
(f)
“Capitalization Adjustment” means any change that is made in, or other events that occur with
respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without
the receipt of consideration by the Company through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock
split, reverse stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate
structure or any similar equity restructuring transaction, as that term is used in Statement of Financial Accounting
Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding the
foregoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization
Adjustment.
(g)
“Cause” will have the meaning ascribed to such term in any written agreement between the
Participant and the Company defining such term and, in the absence of such agreement, such term means, with
respect to a Participant, the occurrence of any of the following events: (i) such Participant’s conviction of any
felony or any crime involving fraud; (ii) such Participant’s participation (whether by affirmative act or omission)
in a fraud or felonious act against the Company and/or its Affiliates; (iii) conduct by such Participant which, based
upon a good faith and reasonable factual investigation by the Company (or, if such Participant is an Officer, by the
Board or Compensation Committee), demonstrates such Participant’s unfitness to serve; (iv) such Participant’s
violation of any statutory or fiduciary duty, or duty of loyalty owed to the Company and/or its Affiliates and
which has a material adverse effect on the Company and/or its Affiliates; (v) such Participant’s violation of state
or federal law in connection with such Participant’s performance of such Participant’s job which has a material
adverse effect on the Company and/or its Affiliates; (vi) breach of any material term of any contract between such
Participant and the Company and/or its Affiliates; and (vii) such Participant’s violation of any
As approved by the Compensation Committee
January 21, 2022
16.
material Company policy. Notwithstanding the foregoing, such Participant’s death or Disability shall not
constitute Cause as set forth herein. The determination that a termination of the Participant’s Continuous Service
is either for Cause or without Cause will be made by the Board or Compensation Committee, as applicable, in its
sole and exclusive judgment and discretion. Any determination by the Company that the Continuous Service of a
Participant was terminated with or without Cause for the purposes of outstanding Stock Awards held by such
Participant will have no effect upon any determination of the rights or obligations of the Company or such
Participant for any other purpose.
(h)
“Change in Control” means the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events:
(i)
any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the
Company representing more than 50% of the combined voting power of the Company’s then outstanding
securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a
Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company
directly from the Company, (B) on account of the acquisition of securities of the Company by an investor, any
affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series
of related transactions the primary purpose of which is to obtain financing for the Company through the issuance
of equity securities, (C) on account of the acquisition of securities of the Company by any individual who is, on
the Effective Date, either an executive officer or a Director (either, a “Registration Investor”) and/or any entity in
which a Registration Investor has a direct or indirect interest (whether in the form of voting rights or participation
in profits or capital contributions) of more than 50% (collectively, the “Registration Entities” ) or on account of
the Registration Entities continuing to hold shares that come to represent more than 50% of the combined voting
power of the Company’s then outstanding securities as a result of the conversion of any class of the Company’s
securities into another class of the Company’s securities having a different number of votes per share pursuant to
the conversion provisions set forth in the Company’s Amended and Restated Certificate of Incorporation; or (D)
solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the
designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition
of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by
the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting
securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then
outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a
Change in Control will be deemed to occur;
(ii)
there is consummated a merger, consolidation or similar transaction involving (directly or
indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar
transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either
(A) outstanding voting securities representing more than 50% of the combined outstanding voting power of the
surviving Entity in such merger, consolidation or similar transaction or (B) more than 50% of the combined
outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar
As approved by the Compensation Committee
January 21, 2022
17.
transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such transaction; provided, however, that a merger, consolidation
or similar transaction will not constitute a Change in Control under this prong of the definition if the outstanding
voting securities representing more than 50% of the combined voting power of the surviving Entity or its parent
are owned by the Registration Entities;
(iii)
there is consummated a sale, lease, exclusive license or other disposition of all or
substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or
other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an
Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned
by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding
voting securities of the Company immediately prior to such sale, lease, license or other disposition; provided,
however, that a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated
assets of the Company and its Subsidiaries will not constitute a Change in Control under this prong of the
definition if the outstanding voting securities representing more than 50% of the combined voting power of the
acquiring Entity or its parent are owned by the Registration Entities; or
(iv)
individuals who, on the date the Plan is adopted by the Compensation Committee, are
members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the
members of the Board; provided, however, that if the appointment or election (or nomination for election) of any
new Board member was approved or recommended by a majority vote of the members of the Incumbent Board
then still in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent
Board.
Notwithstanding the foregoing definition or any other provision of this Plan, the term Change in Control
will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the
domicile of the Company and the definition of Change in Control (or any analogous term) in an individual written
agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with
respect to Stock Awards subject to such agreement; provided, however, that if no definition of Change in Control
or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply.
(i)
“Code” means the Internal Revenue Code of 1986, as amended, including any applicable
regulations and guidance thereunder.
(j)
“Committee” means a committee of one or more Directors to whom authority has been delegated
by the Compensation Committee in accordance with Section 2(c). Authority to grant Awards may only be deleted
to a Committee comprised of a majority of the Company’s Independent Directors.
(k)
“Common Stock” means, as of the Effective Date, the common stock of the Company, having 1
vote per share.
As approved by the Compensation Committee
January 21, 2022
18.
(l)
“Company” means GlycoMimetics, Inc., a Delaware corporation.
(m)
“Compensation Committee” means the Compensation Committee of the Board as composed solely
of Independent Directors.
(n)
“Consultant” means any person, including an advisor, who is (i) engaged by the Company or an
Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a
member of the board of directors of an Affiliate and is compensated for such services. However, service solely as
a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for
purposes of the Plan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a
Form S-8 Registration Statement under the Securities Act is available to register either the offer or the sale of the
Company’s securities to such person.
(o)
“Continuous Service” means that the Participant’s service with the Company or an Affiliate,
whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in
which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a
change in the entity for which the Participant renders such service, provided that there is no interruption or
termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s
Continuous Service ; provided, however, that if the Entity for which a Participant is rendering services ceases to
qualify as an Affiliate, as determined by the Compensation Committee, in its sole discretion, such Participant’s
Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate.
To the extent permitted by law, the Compensation Committee or the chief executive officer of the Company, in
that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case
of (i) any leave of absence approved by the Compensation Committee or chief executive officer, including sick
leave, military leave or any other personal leave, or (ii) transfers between the Company, an Affiliate, or their
successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes
of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in
the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise
required by law.
(p)
“Corporate Transaction” means the consummation, in a single transaction or in a series of related
transactions, of any one or more of the following events:
(i)
a sale or other disposition of all or substantially all, as determined by the Compensation
Committee, in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;
(ii)
a sale or other disposition of at least 90% of the outstanding securities of the Company;
(iii)
a merger, consolidation or similar transaction following which the Company is not the
surviving corporation; or
As approved by the Compensation Committee
January 21, 2022
19.
(iv)
a merger, consolidation or similar transaction following which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately preceding the merger,
consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar
transaction into other property, whether in the form of securities, cash or otherwise.
(q)
“Director” means a member of the Board.
(r)
“Disability” means, with respect to a Participant, the inability of such Participant to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment that can be
expected to result in death or that has lasted or can be expected to last for a continuous period of not less than 12
months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by the
Compensation Committee on the basis of such medical evidence as the Compensation Committee deems
warranted under the circumstances.
(s)
“Effective Date” means January 22, 2020, the date the Compensation Committee approved the
Plan.
(t)
“Eligible Employee” has the meaning set forth in Section 1(a).
(u)
“Employee” means any person employed by the Company or an Affiliate. However, service solely
as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for
purposes of the Plan.
(v)
“Entity” means a corporation, partnership, limited liability company or other entity.
(w)
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
(x)
“Exchange Act Person” means any natural person, Entity or “group” (within the meaning of
Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company
or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the
Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or
any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to a registered public
offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity
or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is
the Owner, directly or indirectly, of securities of the Company representing more than 50% of the combined
voting power of the Company’s then outstanding securities.
(y)
“Fair Market Value” means, as of any date, the value of the Common Stock determined as
follows:
As approved by the Compensation Committee
January 21, 2022
20.
(i)
If the Common Stock is listed on any established stock exchange or traded on any
established market, the Fair Market Value of a share of Common Stock will be, unless otherwise determined by
the Compensation Committee, the closing sales price for such stock as quoted on such exchange or market (or
the exchange or market with the greatest volume of trading in the Common Stock) on the date of determination,
as reported in a source the Compensation Committee deems reliable.
(ii)
Unless otherwise provided by the Compensation Committee, if there is no closing sales
price for the Common Stock on the date of determination, then the Fair Market Value will be the closing selling
price on the last preceding date for which such quotation exists.
(iii)
In the absence of such markets for the Common Stock, the Fair Market Value will be
determined by the Compensation Committee in good faith and in a manner that complies with Sections 409A of
the Code.
(z)
“Incentive Stock Option” means an option that is intended to be, and qualifies as, an “incentive
stock option” within the meaning of Section 422 of the Code.
(aa)
“Independent Director” has the meaning set forth in Section 1(a).
(bb)
“Inducement Award Rules” has the meaning set forth in Section 1(a).
(cc)
“Non-Employee Director” means a Director who either (i) is not a current employee or officer of
the Company or an Affiliate, does not receive compensation, either directly or indirectly, from the Company or an
Affiliate for services rendered as a consultant or in any capacity other than as a Director (except for an amount as
to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the
Securities Act (“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure
would be required under Item 404(a) of Regulation S-K, and is not engaged in a business relationship for which
disclosure would be required pursuant to Item 404(b) of Regulation S-K; or (ii) is otherwise considered a “non-
employee director” for purposes of Rule 16b-3.
(dd)
“Nonstatutory Stock Option” means any option granted pursuant to Section 5 of the Plan that does
not qualify as an Incentive Stock Option.
(ee)
the Exchange Act.
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of
(ff)
pursuant to the Plan.
“Option” means a Nonstatutory Stock Option to purchase shares of Common Stock granted
(gg)
“Option Agreement” means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and
conditions of the Plan.
(hh)
“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.
As approved by the Compensation Committee
January 21, 2022
21.
“Other Stock Award” means an award based in whole or in part by reference to the Common Stock
(ii)
which is granted pursuant to the terms and conditions of Section 6(c).
(jj)
“Other Stock Award Agreement” means a written agreement between the Company and a holder
of an Other Stock Award evidencing the terms and conditions of an Other Stock Award grant. Each Other Stock
Award Agreement will be subject to the terms and conditions of the Plan.
(kk)
“Own,” “Owned,” “Owner,” “Ownership” means a person or Entity will be deemed to “Own,” to
have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity,
directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares
voting power, which includes the power to vote or to direct the voting, with respect to such securities.
(ll)
“Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.
(mm) “Plan” means this GlycoMimetics, Inc. Inducement Plan.
(nn)
“Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant
to the terms and conditions of Section 6(a).
(oo)
“Restricted Stock Award Agreement” means a written agreement between the Company and a
holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award grant. Each
Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.
(pp)
“Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted
pursuant to the terms and conditions of Section 6(b).
(qq)
“Restricted Stock Unit Award Agreement” means a written agreement between the Company and a
holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award
grant. Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan.
(rr)
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule
16b-3, as in effect from time to time.
(ss)
“Securities Act” means the Securities Act of 1933, as amended.
(tt)
“Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock
that is granted pursuant to the terms and conditions of Section 5.
(uu)
“Stock Appreciation Right Agreement” means a written agreement between the Company and a
holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant.
Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.
As approved by the Compensation Committee
January 21, 2022
22.
(vv)
“Stock Award” means any right to receive Common Stock granted under the Plan, including a
Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Stock Appreciation Right
or any Other Stock Award.
(ww)
“Stock Award Agreement” means a written agreement between the Company and a Participant
evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement will be subject to the
terms and conditions of the Plan.
(xx)
“Subsidiary” means, with respect to the Company, (i) any corporation of which more than 50% of
the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have
or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly,
Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company
has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of
more than 50%.
As approved by the Compensation Committee
January 21, 2022
23.
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1) Registration Statement (Form S-8 No. 333-193317) pertaining to the 2003 Stock Incentive
Plan, as amended, 2013 Equity Incentive Plan and 2013 Employee Stock Purchase Plan of
GlycoMimetics, Inc.,
(2) Registration Statement (Form S-8 No. 333-206166) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(3) Registration Statement (Form S-8 No. 333-209814) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(4) Registration Statement (Form S-8 No. 333-216366) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(5) Registration Statement (Form S-8 No. 333-223462) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(6) Registration Statement (Form S-8 No. 333-230117) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(7) Registration Statement (Form S-3 No. 333-231577) of GlycoMimetics, Inc.,
(8) Registration Statement (Form S-8 No. 333-236754) pertaining to the 2013 Equity Incentive
Plan, 2013 Employee Stock Purchase Plan, and Inducement Plan of GlycoMimetics, Inc.; and
(9) Registration Statement (Form S-8 No. 333-253788) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.
of our report dated March 3, 2022, with respect to the financial statements of GlycoMimetics, Inc.
included in this Annual Report (Form 10-K) of GlycoMimetics, Inc. for the year ended December 31,
2021.
/s/ Ernst & Young LLP
Baltimore, Maryland
March 3, 2022
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Harout Semerjian, certify that:
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of GlycoMimetics, Inc. (the “registrant”);
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: March 3, 2022
/s/ Harout Semerjian
Harout Semerjian
President & Chief Executive Officer
(principal executive officer)
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Brian M. Hahn, certify that:
1.
2.
3.
4.
I have reviewed this annual report on Form 10-K of GlycoMimetics, Inc. (the “registrant”);
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of,
and for, the periods presented in this report;
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report
our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred
during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control
over financial reporting; and
5.
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of
directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant’s internal control over financial reporting.
Date: March 3, 2022
/s/ Brian M. Hahn
Brian M. Hahn
Chief Financial Officer and Senior Vice President
(principal financial officer)
CERTIFICATIONS OF
PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
EXHIBIT 32.1
Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. §1350), Harout
Semerjian, Chief Executive Officer of GlycoMimetics, Inc. (the “Company”), and Brian M. Hahn, Chief Financial
Officer and Senior Vice President of the Company, each hereby certifies that, to the best of his or her knowledge:
1.
2.
The Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “Annual
Report”), to which this Certification is attached as Exhibit 32.1, fully complies with the requirements of
Section 13(a) or Section 15(d) of the Exchange Act, and
The information contained in the Annual Report fairly presents, in all material respects, the financial
condition of the Company as of the end of the period covered by the Annual Report and results of
operations of the Company for the periods covered by the Annual Report.
In Witness Whereof, the undersigned have set their hands hereto as of the 3rd day of March 2022.
/s/ Harout Semerjian
Harout Semerjian
President & Chief Executive Officer
/s/ Brian M. Hahn
Brian M. Hahn
Chief Financial Officer and Senior Vice President
* This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and
Exchange Commission and is not to be incorporated by reference into any filing of GlycoMimetics, Inc. under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or
after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing.