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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, 2024
Commission file number 001-36177
GlycoMimetics, Inc.
(Exact name of Registrant as specified in its charter)
Delaware
06-1686563
(State or other jurisdiction of
incorporation or organization)
(IRS Employer
Identification No.)
P.O. Box 65
Monrovia, Maryland
21770
(Address of principal executive offices)
(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:
Trading Symbol:
Name of Each Exchange on which Registered
Common Stock, $0.001 par value
GLYC
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
☐
Accelerated Filer
☐
Non-accelerated Filer
☒
Smaller Reporting Company
☒
Emerging Growth Company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive‐based compensation received by any
of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D‐1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of June 30, 2024, 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 $17.5 million based on the closing price of the registrant’s Common Stock, as reported by the Nasdaq Capital Market, on such date.
At February 7, 2025, 64,513,862 shares of GlycoMimetics, Inc.’s Common Stock, $0.001 par value per share, were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
None.
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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 consummate the proposed merger, or the Merger, between us and Crescent Biopharma, Inc.
●
the sufficiency of our cash resources to continue operating through consummation of the Merger;
●
our ability to maintain compliance with Nasdaq listing standards;
●
our plans to potentially explore other strategic alternatives or to dissolve or liquidate the Company if the
Merger is not consummated;
●
the clinical utility of our drug candidates;
●
our potential commercialization, marketing and manufacturing capabilities and strategy if we resume the
development of our drug candidates;
●
our intellectual property position;
●
our ability to identify additional drug candidates; and
●
our estimates regarding needs for additional financing.
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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SELECTED RISKS AFFECTING OUR BUSINESS
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:
●
Failure to complete, or delays in completing, the potential Merger could materially and adversely affect our
results of operations, business, financial results and/or common stock price.
●
If the Merger is not completed, our stock price may decline significantly.
●
Even if we complete the Merger, the combined company will need to raise additional capital by issuing equity
securities or additional debt or through licensing arrangements, which may cause significant dilution to the
combined company’s stockholders or restrict the combined company’s operations.
●
Our stockholders will experience significant dilution as a consequence of the Merger and related transactions.
●
We may fail to realize all of the anticipated benefits of the Merger and may be exposed to other operational and
financial risks.
●
Our ability to consummate the Merger will depend on our ability to retain our employees required to
consummate such transaction.
●
If we are unable to consummate the Merger with Crescent, our board of directors may decide to pursue a
dissolution and liquidation. In such an event, the amount of cash available for distribution to our stockholders
will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved
for commitments and contingent liabilities.
●
If we fail to comply or regain compliance with Nasdaq’s continued listing standards prior to the consummation
of the Merger, our common stock may be delisted and the price of our common stock, our ability to access the
capital markets and our financial condition could be negatively impacted.
●
We have incurred significant losses since our inception. We expect to continue to incur losses and may never
achieve or maintain profitability.
●
If we decide to resume development of our drug candidates, we would need substantial additional funding. If we
were unable to raise that capital when needed, we may not be able to continue as a going concern and could be
forced to delay, reduce or eliminate 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.
●
If we were to resume development activities, we would need to conduct additional clinical trials. All of our other
drug candidates other than uproleselan were in earlier stages or clinical trials or in preclinical development.
●
Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. Should we
resume development of our drug candidates, we may incur additional costs or experience delays in completing,
or ultimately be unable to complete, the development and commercialization of our drug candidates.
●
Should we resume development of our drug candidates, serious adverse or unacceptable side effects could be
identified, in which case we would need to abandon or limit their development.
●
If we were to resume development 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.
●
Should we resume development activities, our success would depend in part on collaborations. If we are unable
to maintain any of these collaborations, or if these collaborations are not successful, our business could
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be adversely affected.
●
Should we resume development of our drug candidates, we would expect to rely on third parties to conduct
additional clinical trials for our drug candidates, and those third parties may not perform satisfactorily, including
failing to meet deadlines for the completion of such trials.
●
We previously contracted with third parties for the manufacturing of our drug candidates for preclinical and
clinical testing, and if we were to resume development activities and pursue commercialization, we would
expect to continue to do so. This reliance on third parties increases the risk that we would not have sufficient
quantities of our drug candidates or drugs, or such quantities at an acceptable cost, which could delay, prevent or
impair our potential development or commercialization efforts.
●
Should we resume development of drug candidates, if any of those drug candidates were to receive marketing
approval, it may still fail to achieve the degree of market acceptance by physicians, patients, third-party payors
and others in the medical community necessary for commercial success.
●
Should we resume drug development, we would face substantial competition, which may result in others
discovering, developing or commercializing drugs before or more successfully than we do.
●
Should we resume drug development activities but 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.
●
If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would
be harmed.
●
Should we resume development of our drug candidates but we or our collaborators are not able to obtain, or if
there are delays in obtaining, required regulatory approvals, we or they would not be able to commercialize our
drug candidates and our ability to generate revenue would be materially impaired.
●
If our information technology systems or data, or those of third parties upon which we rely, are or were
compromised, we could experience adverse consequences resulting from such compromise, including, but not
limited to, regulatory investigations or actions; litigation; fines and penalties; a disruption of our business
operations, including our clinical trials; reputational harm; loss of revenue and profits; and other adverse
consequences.
●
Unfavorable global economic conditions could adversely affect our business, financial condition or results of
operations.
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PART I
1
ITEM 1. BUSINESS
1
ITEM 1A.RISK FACTORS
18
ITEM 1B.UNRESOLVED STAFF COMMENTS
51
ITEM 1C.CYBERSECURITY
51
ITEM 2. PROPERTIES
52
ITEM 3. LEGAL PROCEEDINGS
53
ITEM 4. MINE SAFETY DISCLOSURES
53
PART II
53
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
53
ITEM 6. [RESERVED]
53
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
54
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
59
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
59
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
60
ITEM 9A.CONTROLS AND PROCEDURES
60
ITEM 9B.OTHER INFORMATION
60
ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
60
PART III
61
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
61
ITEM 11. EXECUTIVE COMPENSATION
65
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
72
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
76
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
77
PART IV
77
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
77
ITEM 16. FORM 10-K SUMMARY
81
SIGNATURES
82
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PART I
ITEM 1.
BUSINESS
Introduction
We are a biotechnology company that was previously 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 cancers and inflammation. Our previous lead
glycomimetic drug candidate, uproleselan, is a specific E-selectin antagonist that we were 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.
We conducted a randomized, double-blind, placebo-controlled Phase 3 pivotal clinical trial to evaluate uproleselan in
individuals with relapsed/refractory (R/R) AML. In the second quarter of 2024, we reported results from the Phase 3 trial
showing that uproleselan combined with chemotherapy did not achieve a statistically significant improvement in overall
survival in the intent to treat (ITT) population versus chemotherapy alone. We have concluded, following subsequent
feedback from the U.S. Food and Drug Administration, that the regulatory path forward for uproleselan for the treatment of
relapsed and refractory acute myeloid leukemia would require an additional clinical trial. In July 2024, we announced a
streamlined operating plan that included the exploration of strategic alternatives focused on maximizing shareholder value
and a corporate restructuring that included a reduction in our workforce by 26 employees, or approximately 80% of our
headcount. At this time, we do not intend to continue development of uproleselan or any other drug candidates.
Following the strategic review, on October 28, 2024, we, Gemini Merger Sub Corp., a Delaware corporation and our
wholly-owned subsidiary (“First Merger Sub”), Gemini Merger Sub II, LLC, a Delaware limited liability company and our
wholly-owned subsidiary (“Second Merger Sub” and, together with First Merger Sub, “Merger Subs”), and Crescent
Biopharma, Inc., a Delaware corporation (“Crescent”), entered into an Agreement and Plan of Merger and Reorganization
(the “Merger Agreement”), pursuant to which, among other matters, and subject to the satisfaction or waiver of the
conditions set forth in the Merger Agreement, (i) First Merger Sub will merge with and into Crescent, with Crescent
continuing as our wholly owned subsidiary and the surviving corporation of the merger (the “First Merger”) and (ii)
immediately following the First Merger and as part of the same overall transaction as the First Merger, Crescent will merge
with and into Second Merger Sub (the “Second Merger” and, together with the First Merger, the “Merger”).
Pursuant to the exchange ratio formula in the Merger Agreement, and based on our capitalization as of September 30,
2024 and Crescent’s capitalization as of October 28, 2024 (the date the Merger Agreement was executed), upon the closing
of the Merger (and prior to closing of the Private Placement described below), on a pro forma basis and based upon the
number of shares of our common stock expected to be issued in the Merger, pre-Merger Crescent stockholders will own
approximately 86.21% of the combined company and pre-Merger GlycoMimetics stockholders will own approximately
13.79% of the combined company. After giving further effect to the Private Placement, the pre-Merger Crescent
stockholders (inclusive of those investors participating in the Private Placement) are expected to own approximately 96.9%
of the combined company and our pre-Merger stockholders are expected to own approximately 3.1% of the combined
company. The exchange ratio may be further adjusted as described in the Merger Agreement. We and Crescent have agreed
to customary representations, warranties and covenants in the Merger Agreement and the consummation of the Merger is
subject to customary closing conditions, including, among other things, approval by our stockholders and the Crescent
stockholders of the transaction, Nasdaq and SEC approvals, and completion of a concurrent private placement of at least
$100 million (as described below).
Additionally, in connection with the Merger, we will establish the terms of a new series of preferred stock designated
as Series A Non-Voting Convertible Preferred Stock, par value $0.001 per share (the “Series A Preferred Stock”). Holders
of the Series A Preferred Stock will be entitled to receive dividends on shares of Series A Preferred Stock equal to, on an
as-if-converted-to-GlycoMimetics common stock basis, and in the same form as dividends actually paid on shares of the
GlycoMimetics common stock. Except as otherwise required by the Certificate of Designation or law, the Series A
Preferred Stock will not have voting rights. The Certificate of Designation will provide however that for so long at least
30% of the Series A Preferred Stock remains issued and outstanding, the holders of Series A Preferred Stock exclusively
and voting together as a separate class on an as-converted to common stock basis, shall be entitled to
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elect two (2) directors (the “Preferred Directors”); and the holders of record of the shares of common stock and of any other
class or series of voting stock (including the Series A Preferred Stock), exclusively and voting together as a single class on
an as-converted to common stock basis, shall be entitled to elect the balance of the total number of directors.
Upon completion of the Merger, we plan to operate under the name Crescent Biopharma, Inc. The Merger is
expected to close in the second quarter of 2025, subject to certain closing conditions, including, among other things,
approval by the stockholders of each company and the satisfaction of customary closing conditions. The Merger is intended
to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal
Revenue Code of 1986, as amended. Following the Merger, the current business of Crescent will become the primary
business of our company.
Concurrently with the execution and delivery of the Merger Agreement, certain institutional and accredited investors
have entered into a securities purchase agreement with us, pursuant to which they have agreed, subject to the terms and
conditions of such agreements, to purchase, immediately following the consummation of the Merger, shares of our common
stock and pre-funded warrants for an aggregate purchase price of approximately $200.0 million in a private placement (the
“Private Placement”). The closing of the Private Placement is conditioned on the satisfaction or waiver of the conditions set
forth in the Merger Agreement (in addition to other customary closing conditions) and is expected to occur immediately
following the closing of the Merger.
Concurrently with the execution of the Merger Agreement, our directors and officers and certain stockholders of
Crescent (solely in their respective capacities as Crescent stockholders) holding approximately 98% of the outstanding
shares of Crescent capital stock have entered into support agreements to vote all of their shares in favor of the adoption and
approval of the Merger.
Our future operations are highly dependent on the success of the Merger and there can be no assurances that the
Merger will be successfully consummated. In the event that we do not complete the Merger, we may explore strategic
alternatives, including, without limitation, another strategic transaction and/or pursue a dissolution and liquidation of our
business.
Our Historical Platform and Drug Candidates
Our proprietary glycomimetics platform was 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 prior research and development efforts 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 enabled 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.
The status of our drug candidates is summarized below. We are no longer actively pursuing the development of any
of these drug candidates. We 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. Although those agreements remain in force, Apollomics has announced
its intention to wind down its clinical development program and we do not anticipate those agreements to continue
following consummation of the Merger.
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Uproleselan
We were previously developing uproleselan, a specific E-selectin antagonist, 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 received Orphan Drug designation from the FDA in 2015 for treatment of patients with AML. In 2016,
uproleselan received Fast Track designation from the FDA for 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 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 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 treatment of relapsed/refractory
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; this
inhibition makes stem cells in the bone marrow divide less frequently, thereby protecting them from chemotherapy agents
that target rapidly dividing cells.
In 2018, we dosed the first patient in a Phase 3 clinical trial to evaluate uproleselan in adults with relapsed/refractory
AML. In 2021, we completed enrollment of 388 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 FDA.
In September 2022, we submitted a request to the FDA to amend the protocol for the trial to conduct an interim
analysis and have the findings reviewed by the trial’s Independent Data Monitoring Committee, or IDMC, as blinded
pooled survival data showed patients living longer than expected based on the historical benchmarks used to design the
trial. The statistical plan agreed to with the FDA was for the IDMC to review efficacy and safety data at 80% of survival
events, which was reached at the end of 2022. When designing the interim analysis, we amended the protocol to create the
opportunity to achieve unblinding at approximately 80% of survival events while maintaining the statistical integrity of the
final analysis should the IDMC recommend the trial continue to the final overall events trigger. The interim analysis plan
required a high statistical threshold to be met for the IDMC to recommend unblinding, reserving approximately 95% of the
trial’s statistical power for the final analysis. In February 2023, the IDMC reviewed the interim utility analysis and
recommended that the pivotal Phase 3 clinical trial continue to the originally planned final overall survival events trigger.
In May 2024, we reported topline results from the Phase 3 trial, in which uproleselan combined with chemotherapy
did not achieve a statistically significant improvement in overall survival in the intent to treat, or ITT, population versus
chemotherapy alone. In June 2024, we announced comprehensive results of the Phase 3 trial. Following the announcement
of the data from the Phase 3 trial, we requested and held a meeting with the FDA to discuss whether any of the results
summarized above could serve as a basis for a submission for regulatory approval. Based on the feedback received, we
concluded that any potential regulatory path for uproleselan in this patient population would require an additional clinical
trial, the conduct of which would require capital resources beyond those available to us. The decision
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to not conduct an additional clinical trial did not relate to any safety or medical issues or negative regulatory feedback
related to our programs.
We 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
evaluating the addition of uproleselan to a standard chemotherapy regimen in older adults with previously untreated AML
who are eligible for intensive chemotherapy. On October 29, 2024, we announced data from the Phase 2 portion of the trial
showing no statistically significant improvement in event-free survival, or EFS, for patients receiving uproleselan in
combination with chemotherapy versus chemotherapy alone.
GMI-1687
We 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, GMI-1687 was being developed to broaden
the clinical usefulness of an E-selectin antagonist to conditions where outpatient treatment is preferred or required. As
described below, we have entered into a collaboration with Apollomics (Hong Kong) Limited for the development of GMI-
1687, as well as uproleselan, in Mainland China, Hong Kong, Macau and Taiwan, also known as Greater China, but we are
not otherwise actively developing GMI-1687.
Our Collaboration with Apollomics for Uproleselan and GMI-1687
In 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. We and Apollomics were also
collaborating to advance the preclinical and clinical development of GMI-1687. In December 2024 Apollomics announced
that its Phase 3 bridging trial of uproleselan did not demonstrate favorable benefit and that Apollomics would be winding
down the program. We do not expect the collaboration and license agreement to remain in effect following the
consummation of the Merger, and do not anticipate having any material ongoing obligations under the agreement for
supplying drug for any trials being conducted by Apollomics.
Under the terms of the exclusive collaboration and license agreement, which currently remains in effect, we are
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. Apollomics will be responsible for all costs related to development, regulatory approvals and
commercialization in Greater China for 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.
We have also 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 2020, the China National Medical Products Administration, or NMPA, Center for Drug Evaluation, or 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 included 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 January 2024, Apollomics
announced the completion of enrollment in the Phase 3 bridging study. A total of 140 adult patients across 20 sites in
Greater China with primary refractory AML or relapsed AML (first or second untreated relapse) and eligible to receive
induction chemotherapy were randomized to receive either uproleselan combined with chemotherapy or placebo plus
chemotherapy. The primary endpoint for the Phase 3 bridging study is overall survival. Secondary outcome measures
include the rate and duration of remission and whether uproleselan can reduce the rate of oral mucositis, a chemotherapy-
related side effect.
We and Apollomics 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
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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. As noted above, in December 2024 Apollomics announced that its
Phase 3 bridging trial of uproleselan did not demonstrate favorable benefit and that Apollomics would be winding down the
program. We do not expect the collaboration and license agreement to remain in effect following the consummation of the
Merger, and do not anticipate having any material ongoing obligations under the agreement for supplying drug for any
trials being conducted by Apollomics.
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 2039. 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 two issued patents covering GMI-1687 that
are 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 it 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 2042. We have also relied on trade secret protection for our
confidential and proprietary information and careful monitoring of such information to protect aspects of our business, as
well as know-how and continuing technological innovation to develop, strengthen and maintain our proprietary position in
the field of glycomimetics.
If we were to resume our historical business of drug development, our success would 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 confidentiality of our trade secrets and operate without
infringing valid and enforceable patents and other proprietary rights of third parties.
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.
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 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 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.
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Manufacturing
We do not have any manufacturing facilities or personnel. We relied on third parties for the manufacturing of our
drug candidates for preclinical and clinical testing, as well as for potential commercial manufacturing.
In January 2024, we entered into a project agreement with Patheon Manufacturing Services LLC, part of Thermo
Fisher Scientific, or Patheon, for manufacture and supply of uproleselan for commercial sale. Pursuant to the agreement,
Patheon was to manufacture commercial supplies of injectable uproleselan from active pharmaceutical ingredients we
supply, and was also to be responsible for supplying the other required raw materials and other supportive manufacturing
services such as quality control testing for raw materials, packaging components and finished product. The initial term of
the agreement is through year-end 2026; however, following our decision to cease the development and potential
commercialization of uproleselan we have paused all activities under this project agreement and expect that it may be
terminated following the consummation of the Merger with Crescent.
Commercialization
Prior to entering into the agreement with Crescent for the Merger, we had not yet established a sales, marketing or
drug distribution infrastructure. We generally retained commercial rights in the United States for our drug candidates. If we
were to resume drug development activities, then subject to receiving marketing approvals, we believe that it would be
possible for us to access the U.S. market for those drug candidates through a focused, specialized, key account sales force.
We believe that such an organization would be able to target the community of physicians who are the key specialists in
treating the patient populations for which our drug candidates were being developed. With respect to uproleselan and GMI-
1687, we granted Apollomics exclusive commercialization rights in Greater China. We would expect to enter into
distribution and other marketing arrangements with third parties for any other drug candidates that obtain marketing
approval outside the United States.
Competition
The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense
competition and a strong emphasis on proprietary products. While we believe that our technology, knowledge, experience
and scientific resources have in the past provided us with competitive advantages, we would face potential competition
from many different sources, including large pharmaceutical and biotechnology companies, specialty pharmaceutical and
generic drug companies, and medical technology companies, in the event that we resume our drug development activities.
Any product candidates that we successfully develop and commercialize would compete with existing therapies and new
therapies that may become available in the future.
If we resume our development activities and seek any regulatory approvals and pursue commercialization, we believe
that the key competitive factors affecting success of our drug candidates are likely to be their safety, efficacy, convenience,
price, generic competition, and availability of coverage and reimbursement from government and other third-party payors.
Many of the companies against which we would compete 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 would 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,
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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.
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
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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.
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.
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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.
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 10 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. Such products
may be approved on the basis of adequate and well-controlled clinical trials establishing that the drug product
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has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. Alternatively, the approval may be
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. Approvals may also take 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
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
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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 Drug Supply Chain Security Act
and state laws that 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 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.
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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, 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 (or other business associates) that create, receive, maintain or transmit
protected health information in connection with providing a service for or on behalf of a covered entity, and their covered
subcontractors. HITECH also increased the civil and criminal penalties that may be imposed against covered entities,
business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for
damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated
with pursuing federal civil actions. 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 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 significant penalties, including administrative, criminal and 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
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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 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
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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. The PPACA 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 have been 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 its enactment, there have been judicial, administrative, executive, and Congressional legislative challenges to
certain aspects of the PPACA. For example, in August 2022, the Inflation Reduction Act of 2022, or IRA was signed into
law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in
PPACA marketplaces through plan year 2025. The IRA also eliminates the "donut hole" under the Medicare Part D
program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a new
manufacturer discount program. It is unclear how any such challenges and additional reform measures of the second Trump
administration will impact the PPACA.
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
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. For example, the IRA, among other things (i) directs the U.S. Department of
Health and Human Services, or HHS, to negotiate the price of certain high-expenditure, single-source drugs that have been
on the market for at least seven years and covered under Medicare, known as the Medicare Drug Price Negotiation
Program, and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace
inflation. These provisions began to take effect progressively in fiscal year 2023. In August 2024, HHS announced the
agreed-upon prices of the first 10 drugs that were subject to price negotiations, although the Medicare Drug Price
Negotiation Program is currently subject to legal challenges. On January 17, 2025, HHS selected fifteen additional drugs
covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products will become
subject to the Medicare Drug Price Negotiation Program.
Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in
rights under the Bayh-Dole Act was announced. On December 8, 2023, the National Institute of Standards and Technology
published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which
for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.
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. For example, on January 5, 2024, the FDA approved
Florida’s Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare
programs. It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be
subject to legal challenges in the United States or Canada. Other states have also submitted SIP proposals that are pending
review by the FDA. Any such approved importation plans, when implemented, may result in lower drug prices for products
covered by those programs.
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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.
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
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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.
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.
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
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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 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
In July 2024, in connection with our streamlined operating plan, we announced a corporate restructuring that
included a reduction in our workforce by 26 employees, or approximately 80% of our headcount. We substantially
completed the reduction in the third quarter of 2024.
As of January 31, 2025, we had four full-time employees, all of whom are 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.
Prior to our corporate restructuring and the ceasing of our drug development activities, our human capital resources
objectives included, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new
employees. The principal purposes of our equity incentive plans were to attract, retain and reward high performing
employees through the granting of equity-based compensation awards in order to motivate employees to perform to the best
of their abilities and achieve our objectives.
Corporate Information
We were incorporated under the laws of the State of Delaware in 2003. Our executive officers and employees work
remotely, and our mailing address is P.O. Box 65, Monrovia, Maryland 21770, and 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 Proposed Merger with Crescent
Failure to complete, or delays in completing, the potential merger, announced on October 29, 2024, could materially
and adversely affect our results of operations, business, financial results and/or common stock price.
On October 28, 2024, we entered into the Merger Agreement, pursuant to which, among other matters, and subject
to the satisfaction or waiver of the conditions set forth in the Merger Agreement, First Merger Sub will merge with and into
Crescent. Upon consummation of the First Merger, First Merger Sub will cease to exist and the Crescent will become our
wholly owned subsidiary. Immediately following the First Merger and as part of the same overall transaction as the First
Merger, Crescent will merge with and into Second Merger Sub with Second Merger Sub being the surviving entity of the
Second Merger. Consummation of the Merger is subject to certain closing conditions, a number of which are not within our
control. Any failure to satisfy these required conditions to closing may prevent, delay or otherwise materially adversely
affect the completion of the transaction. We cannot predict with certainty whether or when any of the required closing
conditions will be satisfied or if another uncertainty may arise and cannot assure you that we will be able to successfully
consummate the Merger as currently contemplated under the Merger Agreement or at all.
Our efforts to complete the Merger could cause substantial disruptions and uncertainty, which may materially
adversely affect our results of operations and business. Uncertainty as to whether the Merger will be completed in a timely
manner or at all may affect our ability to retain and motivate our remaining employees. Uncertainty as to whether the
Merger will be completed in a timely manner or at all could adversely affect our relationships with collaborators, suppliers,
vendors, regulators and other business partners. The adverse effects of the pendency of the transaction could be exacerbated
by any delays in completion of the transaction or termination of the Merger Agreement.
If the conditions to the Merger are not satisfied or waived, the Merger may not occur.
Even if the Merger is approved by our stockholders, specified conditions must be satisfied or, to the extent
permitted by applicable law, waived to complete the Merger. We cannot assure you that all of the conditions to the
consummation of the Merger will be satisfied or waived. If the conditions are not satisfied or waived, the Merger may not
occur or the closing may be delayed.
The exchange ratio for the Merger will not change or otherwise be adjusted based on the market price of GlycoMimetics
common stock.
Applying the exchange ratio based on GlycoMimetics’ capitalization as of September 30, 2024 and Crescent’s
capitalization as of October 28, 2024 (the date the Merger Agreement was executed), our current securityholders are
expected to own approximately 3% of the aggregate number of shares of the combined company's capital stock following
the Merger (on a fully-diluted basis), subject to certain assumptions, including, but not limited to, GlycoMimetics' net cash
as of closing being equal to $1.8 million. In the event GlycoMimetics' net cash is below $1.725 million, the exchange ratio
will be adjusted such that the number of shares issued to Crescent's pre-closing securityholders will be increased, and our
stockholders will own a smaller percentage of the combined company following the consummation of the Merger.
Any changes in the market price of our stock before the completion of the First Merger will not affect the number
of shares our stockholders will be entitled to receive pursuant to the Merger Agreement. Therefore, if before the completion
of the First Merger, the market price of our common stock increases from the market price on the date of the Merger
Agreement, then our stockholders could receive merger consideration with substantially more value for their shares than
the parties had negotiated when they established the exchange ratio. Similarly, if before the completion of the First Merger,
the market price of our common stock declines from the market price on the date of the Merger Agreement, then our
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stockholders could receive merger consideration with substantially lower value. The Merger Agreement does not include a
price-based termination right.
If the Merger is not completed, our stock price may decline significantly.
The market price of our common stock is subject to significant fluctuations. Market prices for securities of
pharmaceutical, biotechnology and other life science companies have historically been particularly volatile. In addition, the
market price of our common stock will likely be volatile based on whether stockholders and other investors believe that we
can complete the Merger or otherwise raise additional capital to support our operations if the Merger is not consummated
and another strategic transaction cannot be identified, negotiated and consummated in a timely manner, if at all. The
volatility of the market price of our common stock has been and may be exacerbated by low trading volume. Additional
factors that may cause the market price of our common stock to fluctuate include:
•
announcements of the results of our clinical trials, discussions with regulators, and regulatory approvals
decisions;
•
the entry into, or termination of, key agreements, including commercial partner agreements;
•
announcements by commercial partners or competitors of new commercial products, clinical progress or lack
thereof, significant contracts, commercial relationships or capital commitments;
•
the loss of key employees;
•
future sales of common stock;
•
general and industry-specific economic conditions; and
•
period-to-period fluctuations in financial results.
Moreover, the stock markets in general have experienced substantial volatility that has often been unrelated to the
operating performance of individual companies. These broad market fluctuations may also adversely affect the trading
price of our common stock. In the past, following periods of volatility in the market price of a company’s securities,
stockholders have often instituted class action securities litigation against such companies.
Even if we complete the Merger, the combined company will need to raise additional capital by issuing equity securities
or additional debt or through licensing arrangements, which may cause significant dilution to the combined company’s
stockholders or restrict the combined company’s operations.
On October 28, 2024, we entered into the Private Placement with certain investors pursuant to which the investors
agreed to purchase, in the aggregate, $200.0 million in shares of our common stock and pre-funded warrants immediately
following the closing of the Merger. The closing of the Private Placement is conditioned upon the satisfaction or waiver of
the conditions to the closing of the Merger as well as certain other conditions. Our shares of common stock and pre-funded
warrants to be issued in the Private Placement will result in dilution to all securityholders of the combined company.
Additional financing may not be available to the combined company when it is needed or may not be available on
favorable terms. To the extent that the combined company raises additional capital by issuing equity securities, such
financing will cause additional dilution to all securityholders of the combined company. It is also possible that the terms of
any new equity securities may have preferences over the combined company’s common stock. Any debt financing the
combined company enters into may involve covenants that restrict its operations. These restrictive covenants may include
limitations on additional borrowing and specific restrictions on the use of the combined company’s assets, as well as
prohibitions on its ability to create liens, pay dividends, redeem its stock or make investments. In addition, if the combined
company raises additional funds through licensing arrangements, it may be necessary to grant licenses on terms that are not
favorable to the combined company.
Some of our directors and executive officers have interests in the Merger that are different from yours and that may
influence them to support or approve the Merger without regard to your interests.
Our directors and executive officers may have interests in the Merger that are different from, or in addition to, the
interests of our other stockholders generally. These interests with respect to our directors and executive officers may
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include, among others, retention bonus payments, extension of exercisability periods of previously issued stock option
grants, severance payments if employment is terminated in a qualifying termination in connection with the Merger and
rights to continued indemnification, expense advancement and insurance coverage.
Our board of directors was aware of and considered those interests, among other matters, in reaching their decisions
to approve and adopt the Merger Agreement, approve the Merger, and recommend the approval of the Merger Agreement
to our stockholders. These interests, among other factors, may have influenced the directors and executive officers of each
company to support or approve the Merger.
Certain provisions of the Merger Agreement may discourage third parties from submitting competing proposals,
including proposals that may be superior to the transactions contemplated by the Merger Agreement.
While the Merger Agreement is in effect, each party is generally prohibited from, among other things, soliciting,
initiating or knowingly encouraging, inducing or facilitating the communication, making, submission or announcement of
any acquisition proposal or acquisition inquiry. In addition, our current directors and executive officers have entered into
support agreements pursuant to the terms of the Merger Agreement, and as an inducement to GlycoMimetics willingness to
enter into the Merger Agreement, by which they have agreed to vote all of their shares of our capital stock in favor of the
Merger Agreement and the transactions contemplated thereby and against any competing proposals, subject to certain
limited exceptions. These provisions could discourage a potential competing acquirer from considering or proposing an
acquisition or merger, even if it were prepared to pay consideration with a higher value than that implied by the merger
consideration in the combination.
Our stockholders will experience significant dilution as a consequence of the Merger and related transactions.
The ownership of current stockholders of our company is expected to decrease from 100% of our common stock
to approximately 3% of the combined company following the Merger and related private placement financing. This
reduced ownership interest in the combined company will significantly reduce the influence that our current stockholders
will have on the management of the combined company.
If the combined company is unable to realize the full strategic and financial benefits currently anticipated from the
Merger, our stockholders will have experienced substantial dilution of their ownership interests without receiving any
commensurate benefit, or only receiving part of the commensurate benefit to the extent the combined company is able to
realize only part of the strategic and financial benefits currently anticipated from the Merger.
We may fail to realize all of the anticipated benefits of the Merger and may be exposed to other operational and
financial risks.
The consummation of our proposed Merger with Crescent will require significant time on the part of the
Company, and the diversion of the Company’s attention may disrupt our business.
Our ability to realize the anticipated benefits of the Merger are highly uncertain. Any anticipated benefits will
depend on a number of factors, including our ability to integrate our business with that of Crescent and our ability to
generate future value for the stockholders of the combined company. The expected benefits may not be achieved within the
anticipated time frame, or at all.
The consummation of the Merger may also require more time or greater cash resources than we anticipate and
expose us to other operational and financial risks, including:
●
increased near-term and long-term expenditures;
●
exposure to unknown liabilities;
●
higher than expected acquisition or integration costs;
●
incurrence of substantial debt or dilutive issuances of equity securities to fund future operations;
●
write-downs of assets or goodwill or incurrence of non-recurring, impairment or other charges;
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●
increased amortization expenses;
●
difficulty and cost in combining Crescent’s operations with ours;
●
impairment of relationships with key suppliers or customers due to changes in management and
ownership;
●
inability to retain employees; and
●
possibility of future litigation.
If we are unable to consummate the Merger with Crescent, our board of directors may decide to pursue a dissolution
and liquidation. In such an event, the amount of cash available for distribution to our stockholders will depend heavily
on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and
contingent liabilities.
There can be no assurance that we will be able to complete the proposed Merger with Crescent. If the Merger is
not completed, our board of directors may decide to pursue a dissolution and liquidation. In such an event, the amount of
cash available for distribution to our stockholders will depend heavily on the timing of such decision and, with the passage
of time the amount of cash available for distribution will be reduced as we continue to fund our operations. In addition, if
our board of directors were to approve and recommend, and our stockholders were to approve, a dissolution and
liquidation, we would be required under Delaware corporate law to pay our outstanding obligations, as well as to make
reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to our
stockholders.
As a result of this requirement, a portion of our assets may need to be reserved pending the resolution of such
obligations and the timing of any such resolution is uncertain. In addition, we may be subject to litigation or other claims
related to a dissolution and liquidation. If a dissolution and liquidation were pursued, our board of directors, in consultation
with our advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve.
Accordingly, holders of our common stock could lose all or a significant portion of their investment in the event of a
liquidation, dissolution or winding up. A liquidation would be a lengthy and uncertain process with no assurance of any
value ever being returned to our stockholders.
We may become involved in litigation, including securities class action litigation, that could divert management’s
attention and harm our business, and insurance coverage may not be sufficient to cover all costs and damages.
In the past, litigation, including securities class action litigation, has often followed certain significant business
transactions, such as the sale of a company or announcement of any other strategic transaction, or the announcement of
negative events, such as negative results from clinical trials. These events may also result in investigations by the SEC. We
may be exposed to such litigation, even if no wrongdoing occurred. Litigation is usually expensive, uncertain, and diverts
management’s attention and resources, which could adversely affect our business and cash resources and our ability to
consummate the Merger with Crescent.
If we fail to comply or regain compliance with Nasdaq’s continued listing standards prior to the consummation of the
Merger, our common stock may be delisted and the price of our common stock, our ability to consummate the Merger,
our access the capital markets and our financial condition could be negatively impacted.
Our common stock was previously listed on the Nasdaq Global Market, and we were required to meet certain listing
requirements, including with respect to minimum closing bid prices, market value of publicly held shares, stockholders’
equity and market value of listed securities.
In June 2024, we received notice from the Listing Qualifications Department of The Nasdaq Stock Market, or
Nasdaq, that we were not in compliance with the minimum bid price requirement for continued listing on the Nasdaq
Global Market. Pursuant to Nasdaq listing rules, we were provided an initial compliance period until December 18, 2024 to
regain compliance. In order to qualify for additional time to regain compliance, we transferred the listing of our common
stock from the Nasdaq Global Market to the Nasdaq Capital Market, which became effective as of December 20, 2024. In
connection with that transfer, on December 19, 2024, we received notice from Nasdaq that we had been
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granted an additional 180 calendar days, or until June 16, 2025, to regain compliance with the minimum closing bid price
requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2).
If necessary to regain compliance with Nasdaq listing standards, we may, subject to approval of our board of
directors and stockholders, implement a reverse stock split. However, there can be no assurance that a reverse stock split, or
any other alternatives we may consider to regain compliance with the minimum bid price requirement, would be approved
or would result in a sustained higher stock price that would allow us to meet the Nasdaq stock price listing requirements. In
addition, pursuant to the terms of the Merger Agreement we are required to use commercially reasonable efforts to
maintain our listing on Nasdaq until the effective time of the First Merger.
Separately, Nasdaq listing rules requires companies listed on the Nasdaq Capital Market to maintain a stockholders’
equity of at least $2.5 million. As of December 31, 2024, we had stockholders’ equity of $5.3 million. As a result of our
expected decrease in stockholders’ equity prior to the Merger due to continued net losses, there can be no assurance that we
will be able to maintain the minimum required stockholders’ equity under the Nasdaq continued listing standards.
Risks Related to Our Financial Position and Capital Needs
We have incurred significant losses since our inception. We expect to continue to incur losses and may never achieve or
maintain profitability.
We have incurred significant losses since our inception and, as of December 31, 2024, we had an accumulated deficit
of $494.4 million. In recent years, we have financed our operations primarily with proceeds from public offerings of our
common stock.
We have devoted substantially all of our financial resources and efforts to research and development, including
preclinical studies and clinical trials. However, we have not completed development of any drugs, and in July 2024,
following the announcement of the data from our Phase 3 pivotal trial and our discussions with the FDA, we announced
that we would initiate a review of strategic alternatives focused on maximizing stockholder value. We also reduced our
workforce by approximately 80% in order to conserve our cash resources as part of a streamlined operating plan while we
undertook our strategic review. Following the strategic review, we entered into an acquisition agreement with Crescent to
consummate the proposed Merger.
In connection with the termination of our clinical programs, our research and development expenses have decreased.
We expect to continue to incur costs and expenditures in connection with the merger process. Based on our current
operating plan, which includes the ceasing of our clinical development programs, we expect that our current cash and cash
equivalents will fund our operations until the closing of the Merger; however, we have based this estimate on assumptions
that may prove to be wrong, and we could use our capital resources sooner than we expect. There can be no assurance that
the proposed Merger with Crescent, or any other course of action, business arrangement or transaction, or series of
transactions, will be pursued, successfully consummated or lead to increased stockholder value. If we are unable to close
the Merger or raise additional capital, we will need to eliminate some or all of our operations or liquidate our company.
We expect to continue to incur significant expenses in connection with our ongoing activities, including continuing to
operate as a public company. If we were to resume clinical development activities in the future, we would expect to incur
significant additional expenses and operating losses.
To become and remain profitable, we must succeed in developing and eventually commercializing drugs that
generate significant revenue. This would 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. If we were to resume our development programs, we may never succeed in these
activities and, even if we did, we may never generate revenue that is significant enough to achieve profitability.
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Even if we 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.
If we decide to resume development of our drug candidates, we would need substantial additional funding. If we were
unable to raise that capital when needed, we may not be able to continue as a going concern and could be forced to
delay, reduce or eliminate drug development programs or potential commercialization efforts.
If we were to resume development of drug candidates, our capital requirements would depend on many factors,
including:
●
the scope, progress, results and costs of preclinical development, laboratory testing and clinical trials;
●
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.
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, drug
candidates, if approved, may not achieve commercial success. Accordingly, if we were to resume development activities,
our ability to fund our operations would be dependent upon management’s plans, which could include raising additional
capital through a combination of equity and debt financings, collaborations and strategic alliances. However, 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 could 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. 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.
Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish
rights to our drug candidates.
If we were to resume our development activities, we would expect to finance our cash needs through a combination
of equity offerings, debt financings and license and development agreements until such time, if ever, as we could generate
substantial commercial revenues. To the extent that we raise additional capital through the sale of equity or convertible debt
securities, your ownership interest would 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 were to 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
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commercialization efforts or grant rights to third parties to develop and market drug candidates that we would otherwise
prefer to develop and market ourselves.
Risks Related to the Discovery and Development of Our Drug Candidates
Should we resume development of our drug candidates, our focus on discovering and developing novel glycomimetic
drugs and our approach to discovering and developing drugs may never lead to marketable drugs.
A key element of our prior development strategy was 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 past 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 resulted in a pipeline of
glycomimetic drug candidates, we were unable to successfully progress those drug candidates through clinical trials. If we
were to resume our development activities, the 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.
If we were to resume development activities, we would need to conduct additional clinical trials. All of our other drug
candidates other than uproleselan were in earlier stages of clinical trials or in preclinical development.
Uproleselan is our only drug candidate that was recently in a Phase 2 or Phase 3 clinical trial. In the second quarter of
2024, we announced results of our pivotal Phase 3 clinical trial of uproleselan in R/R AML. The study of uproleselan
combined with chemotherapy did not meet its primary endpoint of overall survival in the intent to treat population.
Following the announcement of the data from the Phase 3 trial, we requested and held a meeting with the FDA to discuss
whether any of the results summarized above could serve as a basis for a submission for regulatory approval. Based on the
feedback received, we concluded that any potential regulatory path for uproleselan in this patient population would require
an additional clinical trial, the conduct of which would require capital resources beyond those available to us.
Our other drug candidates were in earlier stages of 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 even
if we were to resume our development activities, we may never be able to develop a marketable drug. As a company, we
have no experience in submitting and obtaining FDA approval for an NDA. We previously 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. If we were to resume development, our ability
to generate revenue from our other drug candidates, would depend heavily on their successful development and eventual
commercialization. The success of those drug candidates would 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;
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●
protecting our rights in our intellectual property portfolio; and
●
maintaining a continued acceptable safety profile of the drugs following approval.
Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. Should we resume
development of our drug candidates, 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. For
example, in May 2024, we announced results of our pivotal Phase 3 clinical trial of uproleselan in R/R AML. Even though
we observed favorable results in earlier trials of uproleselan, uproleselan combined with chemotherapy did not meet the
primary endpoint of overall survival in the intent to treat population in our Phase 3 trial. 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.
If we were to resume development activities, 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 as we have done with respect to uproleselan following the
Phase 3 pivotal clinical trial;
●
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.
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Our drug development costs would also increase if we experience delays in testing or marketing approvals.
Preclinical studies or clinical trials may not begin as planned, could need to be restructured or may not 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.
Should we resume development of our drug candidates, serious adverse or unacceptable side effects could be identified,
in which case we would need to abandon or limit their development.
If we were to resume the development of our drug candidates and those 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.
If we were to resume development 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.
Even if we resume our drug development activities, we would have limited financial and management resources and
as a result would need to 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 could cause us to fail to capitalize on viable commercial drugs or
profitable market opportunities. Our spending on 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
Should we resume development activities, our success would depend in part on collaborations. If we are unable to
maintain any of these collaborations, or if these collaborations are not successful, our business could be adversely
affected.
Even before our decision to cease development activities, we had limited capabilities for drug development and do
not have any capabilities for sales, marketing or distribution. If we were to resume drug development, we expect that we
would need to engage collaborators to support our operations. We cannot assure you that 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;
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●
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;
●
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 2020, our former collaborator 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
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commercialization activities, we may not be able to further develop our drug candidates or bring them to market, which
would impair our business prospects.
Should we resume development of our drug candidates, we would expect to rely on third parties to conduct additional
clinical trials for our drug candidates, and those third parties may not perform satisfactorily, including failing to meet
deadlines for the completion of such trials.
We previously engaged a third-party contract research organization, or CRO, to conduct our clinical trials for
uproleselan. If we were to resume clinical development, we would expect to engage CROs with respect to any further
clinical trials of uproleselan or any of our other drug candidates that may progress to clinical development. We would also
expect 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 would reduce our control over these
activities, but would not relieve us of our responsibilities. For example, we would 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 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 any further clinical trials that we
were to conduct. 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 previously contracted with third parties for the manufacturing of our drug candidates for preclinical and clinical
testing, and if we were to resume development activities and pursue commercialization, we would expect to continue to
do so. This reliance on third parties increases the risk that we would not have sufficient quantities of our drug
candidates or drugs, or such quantities at an acceptable cost, which could delay, prevent or impair our potential
development or commercialization efforts.
We do not have any manufacturing facilities or personnel. We have in the past relied on third parties for the
manufacturing of our drug candidates for preclinical and clinical testing, as well as for potential commercial manufacture.
If we were to resume our drug development activities, we would need to re-engage those third parties. Our reliance on third
parties would increase 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 clinical trials or our other
potential development or commercialization efforts.
We would 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. For example,
in January 2024 we entered into an agreement with Patheon Manufacturing Services LLC, or Patheon, for manufacture and
supply of uproleselan for commercial sale. Pursuant to the agreement, Patheon was to manufacture commercial quantities
of injectable uproleselan from active pharmaceutical ingredient we were to supply.
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If we were to resume our development activities, 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. If our 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 dependence upon others for the manufacturing of our drug candidates or drugs may adversely affect our ability
to commercialize any drugs that receive marketing approval on a timely and competitive basis.
Risks Related to the Potential Commercialization of Drug Candidates
Should we resume development of drug candidates, if any of those drug candidates were to receive marketing approval,
it may still 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 do not intend to continue development of uproleselan or any of our other product candidates. However, should
we decide to resume development activities and 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, even if
approved for commercial sale, would 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;
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●
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.
Should we resume development of our drug candidates, we would need to establish sales, marketing and distribution
capabilities for our drug candidates and may not be successful in commercializing those drug candidates if approved.
Even prior to our decision to cease drug development and commercialization activities, we did not have a sales or
marketing infrastructure and had no experience in the sale, marketing or distribution of pharmaceutical drugs. If we were to
resume development, we would need to establish a sales and marketing organization to market or co-promote any drugs
that achieve marketing approval. There are risks involved with establishing 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.
Other factors that could inhibit our efforts to commercialize 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 our failure to educate adequate numbers of
physicians on the benefits of any future drugs;
●
the lack of complementary drugs to be offered by sales personnel, which could put us at a competitive
disadvantage relative to companies with more products; and
●
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 therefore enter into
arrangements with third parties to perform these services, our revenue and our profitability, if any, would likely 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 would 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. Even if we were to resume drug
development, in the event that we do not establish sales, marketing and distribution capabilities successfully, either on our
own or in collaboration with third parties, we would not be successful in commercializing our drug candidates.
Even if we were to resume drug development, we would 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 have faced competition with respect
to our drug candidates, and should we resume drug development we would 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 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. To the extent that competitive drugs or drug candidates developed by others
are successful in treating our target indications, it would reduce the market opportunity for our drug candidates.
Many of the companies 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
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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 would 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 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
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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;
●
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 have carried clinical trial insurance coverage in an amount that we believe was sufficient in relation to our
clinical trials that were conducted in the United States and in foreign countries where we had sites. The use of our drug
candidates in clinical trials may result in liability claims for which our insurance would not be adequate to cover all
liabilities that we may incur. In addition, if we were to resume drug development activities, 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.
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Risks Related to Our Intellectual Property
Should we resume drug development activities but 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.
If we elect to resume our drug development activities, our success would 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 have
in the past sought to protect our proprietary position by filing patent applications in the United States and abroad related to
our drug candidates and would need to maintain our intellectual property rights should we decide to further pursue the
development of any of those 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 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 USPTO 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 if we were to continue the development of our drug candidates.
However, the Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the
prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a
material adverse effect on our business and financial condition.
Moreover, 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.
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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 should we elect to resume such activities. 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.
If we were to resume drug development, our commercial success would depend 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 USPTO. 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 operations. Claims
that we have misappropriated the confidential information or trade secrets of third parties could have a similar negative
impact on our business.
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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 current and former employees were previously employed at universities or other biotechnology or
pharmaceutical companies. Although we have tried 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
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 potential 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 have also relied on trade secrets, including unpatented
know-how, technology and other proprietary information, to maintain our historical competitive position. For example, our
platform was 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 have sought 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 have also entered into confidentiality and
invention or patent assignment agreements with our current and former 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
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our trade secrets were to be disclosed to or independently developed by a competitor, our competitive position would be
harmed.
Risks Related to Regulatory Approval of Our Drug Candidates and Other Legal Compliance Matters
Should we resume development of our drug candidates but we or our collaborators are not able to obtain, or if there are
delays in obtaining, required regulatory approvals, we or they would not be able to commercialize our drug candidates
and our ability to generate revenue would be materially impaired.
In the event that we resume development of our drug candidates, the activities associated with their development and
commercialization, including their design, testing, manufacture, safety, efficacy, recordkeeping, labeling, storage, approval,
advertising, promotion, sale and distribution, would be 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 would 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 would 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 resume development activities but 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 previously 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 should we resume their
development.
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 previously obtained Orphan Drug
designation from the FDA for some of our drug candidates. 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
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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.
Even though we have obtained 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.
Even if we were to resume the development of uproleselan, 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 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 previously obtained a fast track designation from the FDA for uproleselan to treat AML and
breakthrough therapy designation for uproleselan to treat AML, even if we were to continue to advance uproleselan toward
potential regulatory approval, 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 obtain regulatory approval.
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. If we resume development
activities, 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.
Should we resume drug development activities, a variety of risks associated with developing and marketing our drug
candidates internationally could hurt our business.
If we were to continue the development of our drug candidates, we or our collaborators may seek regulatory approval
for 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;
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●
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;
●
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.
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;
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●
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;
●
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 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;
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●
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 and covered
subcontractors 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;
●
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.
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Even if we were to resume drug development activities, 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 enacted and proposed legislative and
regulatory 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. The Patient Protection and Affordable Care Act, as
amended by the Health Care and Education Reconciliation Act, or collectively the PPACA, is 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. The PPACA, among other
things, increased the minimum level of Medicaid rebates payable by manufacturers of brand name drugs; required
collection of rebates for drugs paid by Medicaid managed care organizations; required manufacturers to participate in a
coverage gap discount program, under which they must agree to offer point-of-sale discounts off negotiated prices of
applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s
outpatient drugs to be covered under Medicare Part D; imposed a non-deductible annual fee on pharmaceutical
manufacturers or importers who sell certain “branded prescription drugs” to specified federal government programs,
implemented a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are
calculated for drugs that are inhaled, infused, instilled, implanted, or injected; expanded the types of entities eligible for the
340B drug discount program; expanded eligibility criteria for Medicaid programs; created a new Patient-Centered
Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research,
along with funding for such research; and established a Center for Medicare Innovation at CMS to test innovative payment
and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending.
There have been amendments and judicial and Congressional challenges to certain aspects of PPACA. For example,
in 2022, the Inflation Reduction Act of 2022, or IRA, was signed into law, which among other things, extends enhanced
subsidies for individuals purchasing health insurance coverage in PPACA marketplaces through plan year 2025. The IRA
also eliminates the "donut hole" under the Medicare Part D program beginning in 2025 by significantly lowering the
beneficiary maximum out-of-pocket cost and creating a new manufacturer discount program. It is possible that the PPACA
will be subject to judicial or Congressional challenges in the future. It is unclear how any such challenges and additional
reform measures of the second Trump administration will impact the PPACA. 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.
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
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. For example, the
IRA, among other things (i) directs HHS to negotiate the price of certain high-expenditure, single-source drugs that have
been on the market for at least seven years and covered under Medicare, known as the Medicare Drug Price Negotiation
Program, and (ii) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace
inflation. These provisions began to take effect progressively in fiscal year 2023. In August 2024,
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HHS announced the agreed-upon prices of the first 10 drugs that were subject to price negotiations, although the Medicare
Drug Price Negotiation Program is currently subject to legal challenges. On January 17, 2025, HHS selected fifteen
additional drugs covered under Part D for price negotiation in 2025. Each year thereafter more Part B and Part D products
will become subject to the Medicare Drug Price Negotiation Program.
Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in
rights under the Bayh-Dole Act was announced. On December 8, 2023, the National Institute of Standards and Technology
published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which
for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework. 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
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, from the potential commercialization of drug candidates.
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, to the extent that we seek to commercialize drugs.
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 prior
operations involved the use of hazardous and flammable materials, including chemicals and biological materials. Our prior
operations also produced hazardous waste products. We have generally contracted 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 have historically maintained 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, to the extent we resume significant drug development activities, 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.
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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 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.
If our information technology systems or data, or those of third parties upon which we rely, are or were compromised,
we could experience adverse consequences resulting from such compromise, including, but not limited to, regulatory
investigations or actions; litigation; fines and penalties; a disruption of our business operations, including our clinical
trials; reputational harm; loss of revenue and profits; and other adverse consequences.
In the ordinary course of our business, we and the third parties upon which we have relied collect, receive, store,
process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively,
process) proprietary, confidential, and sensitive data, including personal data (such as health-related data), intellectual
property, and trade secrets. We have also relied upon third parties, such as service providers, for our data processing–related
activities and have shared or received sensitive data with or from third parties. To the extent we resume our drug
development activities, we will be increasingly dependent on information technology systems and infrastructure, including
mobile technologies, to operate our business. Cyberattacks, malicious internet-based activity, and online and offline fraud
are prevalent and continue to increase. These threats are becoming increasingly difficult to detect. These threats come from
a variety of sources, including traditional computer “hackers,” threat actors, personnel (such as through theft or misuse),
sophisticated nation states, and nation-state-supported actors. Some actors now engage and are expected to continue to
engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with
military conflicts and defense activities.
During times of war and other major conflicts, we and the third parties upon which we may rely could be
vulnerable to a heightened risk of these attacks, including cyber-attacks that could materially disrupt our systems and
operations, supply chain, and ability to operate clinical trials and develop our drug candidates. We and the third parties
upon which we may rely could also be subject to a variety of evolving threats, including but not limited to social-
engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and
phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat
intrusions), denial-of-service attacks (such as credential stuffing), personnel misconduct or error, ransomware attacks,
supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information
technology assets, adware, attacks enhanced or facilitated by artificial intelligence (AI), telecommunications failures,
earthquakes, fires, floods, and other similar threats. Ransomware attacks, including those perpetrated by organized criminal
threat actors, nation-states, and nation-state-supported actors, are becoming increasingly prevalent and severe and can lead
to significant interruptions in our operations, loss of data and income, reputational harm, and diversion of funds. Extortion
payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such
payments due to, for example, applicable laws or regulations prohibiting such payments.
If we resume our drug development activities, we expect that we would need to rely on third parties and
technologies to operate critical business systems to process sensitive information in a variety of contexts, including,
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without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, employee
email, content delivery to customers, and other functions. We would also rely on CROs and CMOs. Our ability to monitor
these third parties’ information security practices is limited, and these third parties may not have adequate information
security measures in place. If the third parties we may rely upon experience a security incident or other interruption, we
could experience adverse consequences. While we may be entitled to damages if the third parties we rely upon fail to
satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may
be unable to recover such award. Similarly, supply-chain attacks have increased in frequency and severity, and we cannot
guarantee that third parties and infrastructure in our potential supply chain or our third-party partners’ supply chains have
not been compromised or that they do not contain exploitable defects or bugs that could result in a breach of or disruption
to our information technology systems or the third-party information technology systems that would support us and our
services.
Remote work has also increased risks to our information technology systems and data, as our current and former
employees have utilized network connections, computers and devices outside our premises or network, including working
at home, while in transit and in public locations. Future or past business transactions could expose us to additional
cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or
integrated entities’ systems and technologies. Furthermore, we may discover security issues that were not found during due
diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information
technology environment and security program.
While we previously implemented security measures designed to protect against security incidents, there can be
no assurance that these measures will be effective. We have taken steps designed to detect, mitigate, and remediate
vulnerabilities in our information systems (such as our hardware and/or software, including that of third parties upon which
we have relied). We may not, however, have detected and remediated all such vulnerabilities on a timely basis. We may
experience further delays in developing and deploying remedial measures and patches designed to address identified
vulnerabilities. Vulnerabilities could be exploited and result in a security incident.
Any of the previously identified or similar threats could cause a security incident. A security incident could result
in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or
access to data. A security incident could disrupt our ability (and that of third parties upon whom we rely) to conduct our
business. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our
regulatory approval efforts and significantly increase our costs to recover or reproduce the data. We may expend significant
resources or modify our business activities (including our clinical trial activities) in an effort to protect against security
incidents. Certain data privacy and security obligations may require us to implement and maintain specific security
measures, industry-standard or reasonable security measures to protect our information technology systems and data.
Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents,
including affected individuals, customers, regulators, and investors. Such disclosures are costly, and the disclosures or the
failure to comply with such requirements could lead to adverse consequences. If we (or a third party upon whom we rely)
experience a security incident or are perceived to have experienced a security incident, we may experience adverse
consequences. These consequences may include government enforcement actions (for example, investigations, fines,
penalties, audits, and inspections); interruptions in our operations, including disruption of our development programs, if
any; additional reporting requirements and/or oversight; interruptions or restrictions on processing sensitive data (which
could result in delays in obtaining, or our inability to obtain, regulatory approvals and significantly increase our costs to
recover or reproduce the data); litigation (including class claims); indemnification obligations; negative publicity;
reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including
availability of data); financial loss; and other similar harms. Security incidents and attendant consequences may negatively
impact our ability to grow and operate our business.
Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that
limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data
privacy and security obligations. Additionally, we cannot be sure that our insurance coverage will be adequate or sufficient
to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue
to be available on commercially reasonable terms or at all, or that such coverage will pay future claims.
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In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive information about
us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and
could be used to undermine our competitive advantage or market position. Additionally, sensitive information of ours could
be leaked, disclosed, or revealed as a result of or in connection with use of generative AI technologies by our employees,
personnel or vendors.
We and the third parties with whom we have worked are subject to stringent and changing U.S. and foreign laws,
regulations, rules, contractual obligations, industry standards, policies and other obligations related to data privacy and
security. Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or
actions; litigation (including class claims) and mass arbitration; fines and penalties; disruptions of our business
operations; reputational harm; loss of revenue and profits; and other adverse business impacts.
In the ordinary course of our business, we have processed personal data and other sensitive data, including
proprietary and confidential business data, trade secrets, intellectual property, clinical trial participant data, and other
sensitive third-party data. The data processing activities related to our work subject us and the third parties with whom we
have worked to numerous data privacy and security obligations, such as federal, state, local and foreign laws, regulations,
guidance, industry standards, external and internal privacy and security policies, contracts, and other obligations governing
the processing and security of personal data. These obligations may change, are subject to differing interpretations and may
be inconsistent among jurisdictions or conflict. The global data protection landscape is rapidly evolving, and
implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. This
evolution may create uncertainty in our business; affect our (or the third parties upon which we rely) ability to operate in
certain jurisdictions or to collect, store, transfer, use and share personal data; necessitate the acceptance of more onerous
obligations in our contracts; result in liability; or impose additional costs on us. These obligations may necessitate changes
to our information technologies, systems, and practices and to those of any third parties that process personal data on our
behalf.
Outside the U.S., an increasing number of laws, regulations, and industry standards apply to data privacy and
security. For example, the European Union’s General Data Protection Regulation (GDPR) (EU) 2016/679, or the EU GDPR
and the United Kingdom’s GDPR (UK GDPR), or collectively GDPR, impose strict requirements on the processing of
personal data. Under the GDPR, government regulators may impose temporary or definitive bans on data processing, as
well as fines in the event of violations. Under the GDPR, companies may face temporary or definitive bans on data
processing and other corrective actions; fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling
under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater; or private litigation related to
processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to
represent their interests.
We may transfer personal data from Europe and other jurisdictions to the United States or other countries. Europe
and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other
countries. In particular, the European Economic Area (EEA) and the UK have significantly restricted the transfer of
personal data to the United States and other countries whose privacy laws it generally believes are inadequate. Other
jurisdictions have adopted or may adopt similarly stringent data localization and cross-border data transfer laws. Although
there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the U.S. in
compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement /
Addendum, and the EU-U.S. Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant
U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to
legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to
the U.S. If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the
U.S., or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse
consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business
or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory
actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties,
and injunctions against our processing or transferring of personal data necessary to operate our business. Some EEA
regulators have prevented companies from transferring personal data out of the EEA for allegedly violating the GDPR’s
cross-border data transfer limitations.
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In the United States, federal, state, and local governments have enacted numerous data privacy and security laws,
including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal
Trade Commission Act), and other similar laws (e.g., wiretapping laws). For example, HIPAA, as amended by HITECH,
imposes specific requirements relating to the privacy, security, and transmission of individually identifiable health data. See
the risk factor captioned “Our 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.”
Numerous U.S. states have also enacted comprehensive privacy laws that impose certain obligations on covered
businesses, including providing specific disclosures in privacy notices and affording residents with certain rights
concerning their personal data. As applicable, such rights may include the right to access, correct, or delete certain personal
data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-
making. The exercise of these rights may impact our business and ability to provide our products and services. Certain
states also impose stricter requirements for processing certain personal data, including sensitive information, such as
conducting data privacy impact assessments. These state laws allow for statutory fines for noncompliance. For example, the
California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020, or CPRA, collectively
CCPA, applies to personal data of consumers, business representatives, and employees who are California residents. These
obligations include, but are not limited to, providing specific disclosures in privacy notices and honoring requests of such
individuals certain rights related to their personal data. The CCPA provide for fines of up to $7,500 per intentional violation
and allows private litigants affected by certain data breaches to recover significant statutory damages. While the CCPA and
other comprehensive state privacy laws contain limited exceptions for clinical trial data, these developments may further
complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties upon whom we rely.
Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more
states to pass similar laws in the future.
In addition to data privacy and security laws, we may be contractually subject to industry standards adopted by
industry groups and may become subject to such obligations in the future. We are also bound by other contractual
obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful. For
example, clinical trial participants or research subjects about whom we or our vendors obtain information, as well as the
providers who share this information with us, may contractually limit our ability to use and disclose the information. We
have published privacy policies, marketing materials, and other statements, such as compliance with certain certifications
or self-regulatory principles, regarding data privacy and security. If these policies, materials or statements are found to be
deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to
investigation, enforcement actions by regulators, or other adverse consequences.
Obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing,
becoming increasingly stringent, and creating uncertainty. Additionally, these obligations may be subject to differing
applications and interpretations, which may be inconsistent or conflict among jurisdictions. Preparing for and complying
with these obligations requires us to devote significant resources, which may necessitate changes to our services,
information technologies, systems, and practices and to those of any third parties that process personal data on our behalf.
It is possible that, in the future, we may fail or be perceived to have failed to comply with applicable data privacy
and security obligations. Moreover, despite our best compliance efforts, our personnel or third parties whom we rely on
could fail to comply with such obligations, which could negatively impact our business operations and compliance posture.
If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with data privacy and
security obligations, we could face significant consequences. These consequences may include, but are not limited to,
government enforcement actions; litigation (including class claims) and mass arbitration demands; additional reporting
requirements and/or oversight; bans on processing personal data; orders to destroy or not use personal data; and
imprisonment of company officials. In particular, plaintiffs have become increasingly more active in bringing privacy-
related claims against companies, including class claims and mass arbitration demands. Some of these claims allow for the
recovery of statutory damages on a per violation basis, and, if viable, carry the potential for
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monumental statutory damages, depending on the volume of data and the number of violations. Any of these events could
have a material adverse effect on our reputation, business, or financial condition, including but not limited to: interruptions
or stoppages in our business operations including, as relevant, clinical trials; inability to process personal data or to operate
in certain jurisdictions; limited ability to develop or commercialize uproleselan; expenditure of time and resources to
defend any claim or inquiry; adverse publicity; or revision or restructuring of our operations.
General Risk Factors
Unfavorable global economic conditions could adversely affect our business, financial condition or results of
operations.
Our results of operations could be adversely affected by general conditions in the global economy and in the global
financial markets. A severe or prolonged economic downturn, or additional global financial crises, including related to
health epidemics or armed conflicts and geopolitical tensions around the world, could result in a variety of risks to our
business, including weakened demand for our product candidates, if approved, or our ability to raise additional capital
when needed on acceptable terms, if at all. A weak or declining economy could also strain our suppliers, possibly resulting
in supply disruption. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the
economic climate and financial market conditions could adversely impact our business.
In addition, our available cash and cash equivalents are held in accounts managed by third-party financial institutions
and consist of cash in our operating accounts and cash invested in U.S. Government money market funds. At any point in
time, the funds in our operating accounts may exceed the Federal Deposit Insurance Corporation insurance limits. While
we monitor the cash balances in our operating accounts and adjust the cash balances as appropriate, these cash balances
could be impacted if the underlying financial institutions fail. We can provide no assurances that access to our operating
cash or invested cash and cash equivalents will not be impacted by adverse conditions in the financial markets.
If we fail to comply or regain compliance with Nasdaq’s continued listing standards prior to the consummation of the
Merger, our common stock may be delisted and the price of our common stock, our ability to access the capital markets
and our financial condition could be negatively impacted.
Our common stock was previously listed on the Nasdaq Global Market, and we were required to meet certain listing
requirements, including with respect to minimum closing bid prices, market value of publicly held shares, stockholders’
equity and market value of listed securities.
In June 2024, we received notice from the Listing Qualifications Department of The Nasdaq Stock Market, or
Nasdaq, that we were not in compliance with the minimum bid price requirement for continued listing on the Nasdaq
Global Market. Pursuant to Nasdaq listing rules, we were provided an initial compliance period until December 18, 2024 to
regain compliance. In order to qualify for additional time to regain compliance, we transferred the listing of our common
stock from the Nasdaq Global Market to the Nasdaq Capital Market, which became effective as of December 20, 2024. In
connection with that transfer, on December 19, 2024, we received notice from Nasdaq that we had been granted an
additional 180 calendar days, or until June 16, 2025, to regain compliance with the minimum closing bid price requirement
for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2).
If necessary to regain compliance with Nasdaq listing standards, we may, subject to approval of our board of
directors and stockholders, implement a reverse stock split. However, there can be no assurance that a reverse stock split, or
any other alternatives we may consider to regain compliance with the minimum bid price requirement, would be approved
or would result in a sustained higher stock price that would allow us to meet the Nasdaq stock price listing requirements.
Separately, Nasdaq listing rules requires companies listed on the Nasdaq Capital Market to maintain a stockholders’
equity of at least $2.5 million. As of December 31, 2024, we had stockholders’ equity of $5.3 million. As a result of our
expected decrease in stockholders’ equity prior to the Merger due to continued net losses, there can be no assurance that we
will be able to maintain the minimum required stockholders’ equity under the Nasdaq continued listing standards.
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If we are not able to maintain compliance within the compliance periods allotted by Nasdaq, our common stock could
be delisted, which would have a further material adverse effect on the market price of our common stock and on
stockholder liquidity. We intend to actively monitor the bid price of our common stock and will consider available options
to regain compliance with the listing requirement; however, there can be no assurance that we will be able to regain
compliance with the listing requirement or will otherwise be in compliance with the other Nasdaq listing criteria. If Nasdaq
delists our common stock for failure to meet its listing standards, and our common stock is not eligible for quotation or
listing on another market or exchange, we and our stockholders could face significant negative consequences, including:
●
trading of our common stock being conducted only in the over-the-counter market or on an electronic
bulletin board established for unlisted securities, such as the Pink Sheets or the OTC Bulletin Board, which
could result in limited availability of market quotations for our common stock and increased difficulty of
disposing of shares of common stock;
●
a determination that the common stock is a “penny stock,” which would require brokers trading in the
common stock to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in
the secondary trading market for shares of our common stock;
●
a limited amount of analyst coverage; and
●
a decreased ability to issue additional securities or obtain additional financing in the future.
An active trading market for our common stock may not be sustained.
Although our common stock is listed on The Nasdaq Capital 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:
●
expectations regarding the consummation of the Merger with Crescent;
●
announcements relating to development, regulatory approvals or commercialization of our drug candidates;
●
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;
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●
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, 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 worsening economic conditions and other adverse effects or developments relating to
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 150,000,000 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.
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.
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.
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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.
Provisions in our certificate of incorporation and bylaws that could 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 Capital 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 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 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
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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, and our stock may not appreciate in value.
We have never declared or paid cash dividends on our common stock. We intend to retain all available funds to
continue our operations through the Merger and do not anticipate declaring or paying any cash dividends on our common
stock. Any return to stockholders will therefore be limited to the appreciation of their stock, if any. 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.
Our ability to use net operating loss carryforwards may be subject to limitations.
As of December 31, 2024, we had federal and state net operating loss carryforwards of $351.8 million, research and
development tax credit carryforwards of $10.9 million and $44.1 million of orphan drug tax credit carryforwards. The
federal and state net operating loss carryforwards will begin to expire, if not utilized, beginning in 2025, the research and
development tax credits in 2025 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. The Merger with Crescent, if consummated, could result
in an ownership change that would limit the ability of the combined company to use our net operating loss carryforwards.
ITEM 1B.
UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk management and strategy
We operate in the biopharmaceutical sector, which is a highly regulated sector subject to various cybersecurity risks
that could adversely affect our business, financial condition, and results of operations, including intellectual property theft;
fraud; extortion; harm to employees or customers; disruption of our clinical trials, manufacturing or supply chain; violation
of privacy laws and other litigation and legal risk; and reputational risk. Prior to our decision to streamline our operations,
we implemented and still maintain various information security processes designed to identify, assess and manage material
risks from cybersecurity threats to our critical computer networks, third party hosted services, communications systems,
hardware and software, and our critical data, including clinical trial data, intellectual property, confidential information that
is proprietary, strategic, financial or competitive in nature, and personal data (“Information Systems and Data”).
With the assistance of outside consultants, our Information Technology personnel help identify, assess and manage
cybersecurity threats and risks that could affect our business and Information Systems and Data, and support our efforts to
identify and assess risks from cybersecurity threats by monitoring and evaluating our threat environment. We use various
methods and tools to identify, assess and manage our cybersecurity threats and risks, including, for example, automated
tools, industry reports about cybersecurity risks and threats to our industry, third party threat assessments, and penetration
testing. In addition, we utilize encryption for certain data at rest and maintain certain network security controls, such as
firewalls and virtual private networks. We also conduct monitoring for certain systems and access controls in place for
certain environments and systems, as well as asset management, tracking and disposal associated with onboarding and
offboarding of personnel.
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Depending on the environment, we implement and maintain various technical, physical, and organizational measures,
processes, standards and policies designed to manage and mitigate material risks from cybersecurity threats to our
Information Systems and Data. For example, we have implemented and maintain an incident response plan, and we utilize
automated tools designed to help maintain email security. We also have certain system and password policies for computer
systems managed and controlled by us, and procedures for incident management to address incidents that could impact
subject safety, product quality, and data integrity in relation to our clinical trials and product development. We also
periodically conduct cybersecurity incident tabletop training exercises.
Our assessment and management of material risks from cybersecurity threats is integrated into various aspects of our
overall risk management process. For example, our head of Information Technology evaluates material risks from
cybersecurity threats and reports periodically to our Board of Directors’ Audit Committee, which committee is responsible
for evaluation of our overall enterprise risk. We use third-party service providers to assist us from time to time to identify,
assess, and manage material risks from cybersecurity threats, including, for example, cybersecurity software providers,
penetration testing firms, auditors, and professional services firms, including legal counsel. These relationships enable us
to leverage specialized knowledge and insights, enabling our cybersecurity strategies and processes to remain consistent
with industry best practices.
We rely on third-party service providers to perform a variety of functions throughout our business, such as contract
manufacturing organizations, contract research organizations, suppliers and consultants. We also rely on third parties who
operate a cloud-based infrastructure for our information technology systems. We have in the past conducted quality audits
of certain regulated vendors, which typically include an assessment of such vendor’s information technology systems, and
we may also impose appropriate contractual obligations on certain vendors pertaining to information security. Depending
on the nature of the services provided, the sensitivity of the Information Systems and Data at issue, and the identity of the
provider, our efforts may involve different levels of assessment designed to help identify cybersecurity risks associated
with a provider and impose contractual obligations related to cybersecurity on the provider.
For a description of the risks from cybersecurity threats that may materially affect us and how they may do so, see
our risk factors under Part 1. Item 1A. Risk Factors in this Annual Report on Form 10-K.
Risk Management Personnel
Our Information Technology personnel responsible for cybersecurity risk assessment and management processes are
managed by certain members of our executive management, including our Chief Financial Officer. Together with our
executive management, our Information Technology personnel are responsible for hiring appropriate personnel, helping to
integrate cybersecurity risk considerations into our overall risk management strategy, and communicating key priorities to
relevant personnel.
Governance
Our Board of Directors addresses our cybersecurity risk management as part of its general oversight function. The
Audit Committee of our Board is responsible for overseeing our cybersecurity risk management processes, including
oversight and mitigation of risks from cybersecurity threats.
Our Audit Committee and other members of our executive management, as appropriate, receive periodic reports from
our Chief Financial Officer concerning significant cybersecurity threats and risk and the processes we have implemented to
address them. The Audit Committee also receives various periodic presentations related to cybersecurity threats, risk and
mitigation.
ITEM 2.
PROPERTIES
Our principal offices occupied approximately 30,000 square feet of leased office space in Rockville, Maryland,
pursuant to a lease agreement that expired on January 31, 2025. In anticipation of the consummation of the Merger, we no
longer maintain a physical office or laboratory space, and all remaining employees work remotely.
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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
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 Capital Market under the symbol “GLYC.”
Dividend Policy
We have never declared or paid any dividends on our common stock. We do not anticipate paying cash dividends in the
foreseeable future.
Stockholders
As of February 7, 2025, we had 64,513,862 shares of common stock outstanding held by approximately 20 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.
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.
Overview and Recent Developments
We are a biotechnology company that was previously 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 cancers and inflammation. Our previous lead glycomimetic
drug candidate, uproleselan, is a specific E-selectin antagonist that we were 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. We conducted a randomized, double-blind, placebo-controlled Phase 3 pivotal clinical trial to
evaluate uproleselan in individuals with relapsed/refractory (R/R) AML. In May 2024, we reported topline results from the
Phase 3 trial, in which uproleselan combined with chemotherapy did not achieve a statistically significant improvement in
overall survival in the intent to treat (ITT) population versus chemotherapy alone. In June 2024, we announced
comprehensive results of the Phase 3 trial.
Following the announcement of the data from the Phase 3 trial, we requested and held a meeting with the FDA to
discuss whether any of the results summarized above could serve as a basis for a submission for regulatory approval. Based
on the feedback received, we concluded that any potential regulatory path for uproleselan in this patient population would
require an additional clinical trial, the conduct of which would require capital resources beyond those available to us. The
decision to not conduct an additional clinical trial did not relate to any safety or medical issues or negative regulatory
feedback related to our programs.
In July 2024, following the announcement of the data from our Phase 3 pivotal trial and our discussions with the
FDA, we announced that we would initiate a review of strategic alternatives focused on maximizing stockholder value,
which could include, but are not limited to, a merger, sale, divestiture of assets, licensing, or other strategic transaction. We
also reduced our workforce by approximately 80% in the third quarter of 2024 in order to conserve our cash resources as
part of a streamlined operating plan while we undertook our strategic review.
We also previously 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. On October 29, 2024 we announced data from
the Phase 2 portion of the trial showing no statistically significant improvement in event-free survival (EFS) for patients
receiving uproleselan in combination with chemotherapy versus chemotherapy alone.
Following these outcomes of our clinical trials and regulatory discussions we do not currently intend to continue
development of uproleselan or any of our other drug candidates. We currently do not have any ongoing clinical trials.
The Merger Agreement
Following the strate
gic review described above, on October 28, 2024 we entered into the Merger Agreement with Crescent, a privately
held biotechnology company advancing a pipeline of oncology therapeutics designed to treat solid tumors, pursuant to
which Crescent will become a wholly owned subsidiary of us and we will operate under the name Crescent Biopharma, Inc.
following the Merger. We anticipate that the Merger will close in the late second quarter of 2025, subject to certain closing
conditions, along with the concurrent Private Placement. For additional information about the Merger and the
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concurrent Private Placement, see Note 1 to the financial statements included in this report. Following the Merger, the
current business of Crescent will become the primary business of our company.
Based on our current operating plan, we expect that our current cash and cash equivalents will fund our operations
until the closing of the contemplated Merger, which is subject to approval by our stockholders and the stockholders of
Crescent and other customary closing conditions; however, we have based this estimate on assumptions that may prove to
be wrong, and we could use our capital resources sooner than we expect. If the contemplated Merger and Private Placement
does not close by the second quarter of 2025, the Company may seek other strategic alternatives or liquidate.
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.
Stock-Based Compensation
We have issued 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 previously granted 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 based 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.
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Components of Operating Results
Revenue
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. We do not expect to recognize revenue in the future under any
current license or collaboration agreement.
Research and Development
Research and development expenses have consisted 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 have included activities
related to exploratory efforts, target validation, lead optimization for our earlier programs and our proprietary
glycomimetics platform.
We have not utilized a formal time allocation system to capture expenses on a project-by-project basis because we
were organized and recorded expense by functional department and our employees allocated time to more than one
development project. Accordingly, we have only allocated 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 were deferred and capitalized. The capitalized
amounts are expensed as the related goods are delivered or the services are performed.
General and Administrative
General and administrative expenses have consisted 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.
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:
Year Ended December 31,
Increase/(Decrease)
(dollars in thousands)
2024
2023
Revenue
$
—
$
10
$
(10)
(100)%
Costs and expenses:
Research and development expense
14,260
20,072
(5,812)
(29)%
General and administrative expense
18,249
19,213
(964)
(5)%
Restructuring and asset impairment charges
7,530
—
7,530
100 %
Total costs and expenses
40,039
39,285
754
2 %
Loss from operations
(40,039)
(39,275)
(764)
(2)%
Other income
Gain on sale of asset
1,225
—
1,225
100 %
Interest income
935
2,376
(1,441)
(61)%
Total other income
2,160
2,376
(216)
(9)%
Net loss and comprehensive loss
$
(37,879)
$
(36,899)
$
(980)
(3)%
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57
Revenue
During the years ended December 31, 2024 and 2023, we recognized $0 and $10,000, respectively, in revenue from
our license agreements with Apollomics.
Research and Development Expense
The following table summarizes our research and development expense by functional area:
Year Ended December 31,
Increase/(Decrease)
(dollars in thousands)
2024
2023
Clinical development
$
3,090
$
6,533
$
(3,443)
(53)%
Manufacturing and formulation
4,145
1,702
2,443
144 %
Contract research services, consulting and other costs
1,184
1,792
(608)
(34)%
Laboratory costs
780
1,548
(768)
(50)%
Personnel-related
3,789
7,587
(3,798)
(50)%
Stock-based compensation
1,272
910
362
40 %
Research and development expense
$ 14,260
$ 20,072
$
(5,812)
(29)%
The following table summarizes our research and development expense by drug candidate:
Year Ended December 31,
Increase/(Decrease)
(dollars in thousands)
2024
2023
Uproleselan
$
7,471
$
7,587
$
(116)
(2)%
GMI-1687
313
1,742
(1,429)
(82)%
Other research and development
1,416
2,246
(830)
(37)%
Personnel-related and stock-based compensation
5,060
8,497
(3,437)
(40)%
Research and development expense
$ 14,260
$ 20,072
$
(5,812)
(29)%
Our research and development expense for the year ended December 31, 2024 decreased by $5.8 million compared to
2023 primarily due to our winding down of operations beginning in June 2024 following the results from our clinical trials.
During 2023, we accrued amounts for the expected payments of year-end bonuses to employees; as no bonuses are payable
for the year ended December 31, 2024, we did not recorded any further accruals.
General and Administrative Expense
The following table sets forth the components of our general and administrative expense:
Year Ended December 31,
Increase/(Decrease)
(dollars in thousands)
2024
2023
Personnel-related
$
5,434
$
6,927
$
(1,493)
(22)%
Stock-based compensation
3,426
2,614
812
31 %
Legal, consulting and other professional expenses
8,546
8,526
20
0 %
Other
843
1,146
(303)
(26)%
General and administrative expense
$ 18,249
$ 19,213
$
(964)
(5)%
General and administrative expenses decreased by $1.0 million for the year ended December 31, 2024 as compared
2023. This decrease was primarily due to lower personnel-related expenses, including no bonus accruals for 2024. These
decreases were offset by higher stock-based compensation expenses incurred 2024 as compared to 2023 due to stock
options granted in 2024.
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58
Gain on Sale of Asset
During the year ended December 31, 2024, we sold the rights to one of our prior drug candidates, rivipansel, for cash
proceeds of $1.2 million. As we had previously written down this asset to zero value in prior year, we recorded a $1.2
million gain on sale of asset during the year ended December 31, 2024.
Restructuring and Asset Impairment Charges
During the year ended December 31, 2024 we undertook a reduction of our headcount and incurred $7.0 million of
severance and related expenses. We also recorded $0.5 million of charges related to the restructuring.
Interest Income
During the year ended December 31, 2024, interest income decreased by $1.4 million due to lower invested cash and
cash equivalent balances as compared to the same period in 2023.
Liquidity and Capital Resources
Sources of Liquidity
We historically financed our operations primarily through public offerings and private placements of our capital
stock, including at-the-market equity sales agreements and upfront and milestone payments from our license and
collaboration agreements. As of December 31, 2024, we had $10.7 million in cash and cash equivalents. Based on our
current operating plan, we expect that our current cash and cash equivalents will fund our operations until the closing of the
Merger, which is subject to approval by our stockholders and the stockholders of Crescent and other customary closing
conditions; however, we have based this estimate on assumptions that may prove to be wrong, and we could use our capital
resources sooner than we expect. If we are unable to close the Merger or raise additional capital, we will need to eliminate
some or all of our operations or liquidate our company. The Private Placement is subject to the satisfaction or waiver of the
closing conditions of the Merger and would close immediately following the closing of the Merger.
In March 2022, we filed a shelf registration statement with the SEC, which was declared effective on April 22, 2022.
In April 2022, we entered into an at-the-market sales agreement, or the Sales Agreement, with Cowen and Company. Under
the Sales Agreement, we may sell up to $100.0 million in shares of our common stock. During the years ended December
31, 2023 and 2022, we sold shares of common stock under the Sales Agreement, for aggregate net proceeds of $28.7
million and $4.2 million, respectively, after deducting commissions and offering expenses. There were no shares sold in the
year ended December 31, 2024. As of December 31, 2024, $66.0 million remained available to be sold under the Sales
Agreement, although we have no current plans to sell additional shares under the Sales Agreement prior to the closing of
the Merger, and the shelf registration will expire in April 2025.
We entered into a collaboration and license agreement with Apollomics in 2020 and are potentially eligible to earn
milestone payments and royalties under that agreement. However, our ability to earn milestone payments and potential
royalty payments and their timing will be dependent upon the outcome of Apollomics’ activities and is therefore uncertain.
Funding Requirements
Our primary uses of capital were historically compensation and related expenses, third-party clinical research and
development services, clinical costs, legal and other regulatory expenses and general overhead costs. Now that we have
suspended all of our research and development activities in anticipation of the Merger with Crescent, our operations will be
limited and we expect that our expenses will decrease significantly.
As of December 31, 2024, our only contractual obligation consisted of the remaining rent obligation of $67,000 for
office space that expired at the end of January 2025. Due to the outcome of our Phase 3 clinical trial, we do not anticipate
any funding requirements to arise under our collaboration and license agreement with Apollomics’ or other manufacturing
agreements.
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59
Going Concern
The accompanying financial statements 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 2024, we incurred a net loss of $37.9 million and had
net cash flows used in operating activities of $31.1 million. At December 31, 2024, we had $10.7 million in cash and cash
equivalents and had no committed source of additional funding other than the expected Private Placement. Management
believes that given our current cash position and forecasted negative cash flows from operating activities over the next
twelve months, 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 the closing of the contemplated Merger and Private Placement.
If the contemplated Merger and Private Placement does not close by the second quarter of 2025, the Company may
seek other strategic alternatives or liquidate.
Cash Flows
The following table summarizes our cash flows:
Year Ended December 31,
(in thousands)
2024
2023
Net cash provided by (used in):
Operating activities
$
(31,098)
$
(34,880)
Investing activities
20
(21)
Financing activities
5
28,823
Net change in cash and cash equivalents
$
(31,073)
$
(6,078)
Operating Activities
Net cash used in operating activities was $31.1 million during the year ended December 31, 2024 compared to $34.9
million during the year ended December 31, 2023. The decrease is due to our winding down of operations beginning in
June 2024 following the results from our clinical trials, offset in part by increased costs for our corporate restructuring.
Investing Activities
Net cash provided by investing activities for the year ended December 31, 2024 was from proceeds from the sale of
laboratory equipment net of purchases of computer, office and laboratory equipment. Net cash used in investing activities
for the year ended December 31, 2023 was from the purchases of computer, office and laboratory equipment.
Financing Activities
Net cash provided by financing activities during the year ended December 31, 2024 consisted of proceeds received
from stock option exercises. Net cash provided by financing activities during the year ended December 31, 2023 primarily
consisted of the net proceeds received from sales of our common stock under the Sales Agreement of $28.7 million.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are a smaller reporting company as defined by Item 10 of Regulation S-K and are not required to provide the
information otherwise required under this item.
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.
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60
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
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, 2024, 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, 2024, 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, 2024, 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, 2024
that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.
OTHER INFORMATION
During the fiscal quarter ended December 31, 2024, none of our officers or directors, as defined in Rule 16a-1(f),
adopted, modified or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement," as
those terms are defined in Item 408 of Regulation S-K.
ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
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PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Directors and Executive Officers
The Following table sets forth information regarding our executive officers and directors as of the date of this
Annual Report on Form 10-K.
Name
Age
Position(s)
Executive Officers
Harout Semerjian
54
President and Chief Executive Officer
Brian Hahn
50
Chief Financial Officer and Senior Vice President
Edwin Rock, M.D.
64
Chief Medical Officer and Senior Vice President
Non-Employee Directors
Timothy Pearson (1)(2)
57
Chairman of the Board
Mark Goldberg, M.D. (2)(3)
70
Director
Patricia Andrews (1)
67
Director
Scott Koenig, M.D., Ph.D. (3)
72
Director
Scott Jackson (2)
59
Director
Rachel King
65
Director
Daniel Junius (1)(3)
72
Director
(1) Member of the Audit Committee
(2) Member of the Compensation Committee
(3) Member of the Nominating and Corporate Governance Committee
Executive Officers
Harout Semerjian
Mr. Semerjian has served as our President and Chief Executive Officer and as a member of our Board since August 2021.
Prior to joining our company, he was an independent advisor to private equity firms focused on investments in healthcare
companies. He previously served as president and chief executive officer of Immunomedics, Inc., a pharmaceutical
company, during April and May of 2020. From March 2018 to April 2020, he served as an executive vice president and
chief commercial officer at Ipsen Pharma, where he was accountable for that company’s worldwide commercialization and
portfolio strategy across oncology, neurosciences and rare diseases. From February 2017 to February 2018, he served as
president and head of Ipsen’s Specialty Care International Region & Global Franchises. Mr. Semerjian previously spent 16
years at Novartis Oncology, where he held various worldwide strategic and operational positions, culminating in his last
role as a senior vice president and global head for Ribociclib, accountable for worldwide launch preparations. During his
tenure at Novartis, Mr. Semerjian worked on numerous launches and commercial activities for various therapies, including
Gleevec, Tasigna, Exjade/Jadenu, Promacta, Zometa, and Femara. He has also served as a member of the board of directors
of the Biotechnology Innovation Organization (BIO) since October 2023. Mr. Semerjian holds an M.B.A. from Cornell
University, an M.B.A. from Queen’s University, Canada, and a B.S. in Biology from the Lebanese American University in
Lebanon. The Board believes that Mr. Semerjian’s long-time experience as an executive officer in the pharmaceutical
industry and his significant background in commercialization activities provide a valuable contribution to our Board, in
addition to his role as our Chief Executive Officer.
Brian Hahn
Mr. Hahn has served as our Chief Financial Officer and Senior Vice President since January 2019, our Chief Financial
Officer from 2012 until January 2019, and our Director of Finance and Administration from 2010 to 2012. From 2009 to
2010 he served in the position of Assistant Controller for OpGen, Inc., a biotechnology company, and from 2002 to 2009,
Mr. Hahn served in the position of Executive Director of Finance at MiddleBrook Pharmaceuticals, Inc. (formerly
Advancis Pharmaceutical), a specialty pharmaceutical company. From 1998 to 2001, he was a senior accountant with
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62
Bering Truck Corporation. Mr. Hahn currently serves as Co-Chair of the Biotechnology Industry Organization (BIO)’s
Finance and Tax Committee. In 2015, Mr. Hahn testified on behalf of BIO before the House Subcommittee on Capital
Markets and Government Sponsored Enterprises in support of the Fostering Innovation Act. Mr. Hahn received a B.B.A.
from Shenandoah University and an M.B.A. from the University of Maryland.
Edwin Rock, M.D.
Dr. Rock has served as our Chief Medical Officer and Senior Vice President since September 2022. Prior to joining our
company, Dr. Rock was the Chief Medical Officer at Partner Therapeutics from September 2020 to September 2022.
Previously, he served as the Vice President of Clinical Development at MacroGenics, Inc. from 2017 to September 2020,
where he led that company’s program culminating in FDA approval of its product Margenza. From 2016 to 2017, he served
as Executive Director, Clinical Research at Astex, a subsidiary of Otsuka Pharmaceutical Co., Ltd., having previously
served from 2009 to 2016 as Otsuka’s Senior Director, Global Clinical Development. Earlier in his career he worked in
clinical development for GSK and as a Medical Officer in the FDA’s Office of Oncology Drug Products. Dr. Rock holds a
B.A. in Biology and Economics from Swarthmore College. He earned Ph.D. and M.D. degrees from the Stanford
University School of Medicine before completing his Internal Medicine residency at Brigham and Women’s Hospital and
his Medical Oncology fellowship at the University of Pennsylvania.
Non-Employee Directors
Timothy Pearson
Mr. Pearson has served as a member of our Board since 2014 and as our Chairperson since 2019. Mr. Pearson has served as
the chief executive officer of Carrick Therapeutics, a privately held oncology company, since July 2019. He previously
served as executive vice president and the chief financial officer of TESARO, Inc., an oncology-focused biopharmaceutical
company, from 2014 until its acquisition by GlaxoSmithKline in February 2019. Mr. Pearson was also executive vice
president and chief financial officer of Catalyst Health Solutions, a publicly held pharmacy benefit management company,
from 2011 until its acquisition by SXC Health Solutions in 2012. Prior to joining Catalyst, Mr. Pearson served as the chief
financial officer and executive vice president of MedImmune, Inc. Mr. Pearson also currently serves on the board of Korro
Bio, a public company. He previously served on the board of directors of Ra Pharmaceuticals, Inc., until it was acquired by
UCB in 2020. Mr. Pearson is a Certified Public Accountant and holds dual B.S. degrees in Business Administration from
the University of Delaware and in Accounting from the University of Maryland, University College, as well as an M.S. in
Finance from Loyola College. As a result of Mr. Pearson’s educational background and professional experiences, the Board
believes Mr. Pearson possesses particularly impactful knowledge and experience in accounting and finance; corporate
strategy, leadership of complex organizations and human capital management, all of which strengthen the Board’s
collective qualifications, skills and experience.
Mark Goldberg, M.D.
Dr. Goldberg has served as a member of our Board since 2014. Dr. Goldberg served in a number of capacities of increasing
responsibility at Synageva BioPharma Corp., a biopharmaceutical company, between 2011 and 2015, including as
Executive Vice President, Medical and Regulatory Strategy. Prior to joining Synageva he served in various management
capacities of increasing responsibility at Genzyme Corporation, a biopharmaceutical company, from 1996 to 2011, most
recently as Senior Vice President, Clinical Development and Global Therapeutic Head, Oncology and Personalized Genetic
Health, and as Chairman of Genzyme’s Early Product Development Board. Prior to working at Genzyme, he was a full-
time staff physician at Brigham and Women’s Hospital and the Dana-Farber Cancer Institute. He still holds an appointment
at Brigham and Women’s Hospital. Dr. Goldberg has also been on the faculty of Harvard Medical School since 1987 and
serves as a Lecturer in Medicine (part-time). He is a board-certified medical oncologist and hematologist. Dr. Goldberg
serves on the boards of directors of the public biopharmaceutical companies Blueprint Medicines Corporation and Avacta
Group plc. Within the last five years, he also served on the boards of directors of the public biopharmaceutical companies
Audentes Therapeutics, Inc., ImmunoGen, Inc. and Idera Pharmaceuticals (now known as Aceragen, Inc.). He has also
served as a member of the board of directors of the American Cancer Society since January 2019. Dr. Goldberg received
his A.B. from Harvard College and his M.D. from Harvard Medical School. The Board believes that Dr. Goldberg’s
prestigious medical background and significant clinical experience allow him to make particularly valuable contributions to
our research and development efforts, while his public company board experience provides us with valuable strategic and
operational expertise and leadership skills.
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Patricia Andrews
Ms. Andrews has served as a member of our Board since 2017. Ms. Andrews has served as the chief executive officer of
Sumitomo Pharma Oncology, Inc. (and its predecessor, Boston Biomedical, Inc.), an oncology drug research and
development company, and as an executive officer of its parent company, Sumitomo Pharma Co. Ltd. from 2017 until her
retirement in July 2023. Ms. Andrews joined Boston Biomedical in 2013. From 2008 to 2012, she served as the chief
commercial officer of Incyte Corporation, a publicly held biopharmaceutical company. From 1991 to 2008, Ms. Andrews
served in various roles of increasing responsibility at Pfizer Inc., culminating in her role as a vice president and the general
manager of Pfizer’s U.S. Oncology business unit. Ms. Andrews serves on the board of Oncolytics Biotech, Inc. Ms.
Andrews received her B.A. degree from Brown University and her M.B.A. degree from the University of Michigan. We
believe Ms. Andrews’ qualifications to serve on our Board include her strong leadership and demonstrated management
experience within the pharmaceutical industry, including serving as a chief executive officer and a chief commercial
officer, as well as her in-depth knowledge of operations and commercial strategy.
Scott Koenig, M.D., Ph.D.
Dr. Koenig has served as a member of our Board since 2017. Dr. Koenig is the co-founder of and has been the president
and chief executive officer and a director of MacroGenics, Inc., a publicly held pharmaceutical company, since 2001.
Previously, Dr. Koenig served as a senior vice president at MedImmune, Inc., where he participated in the selection and
maturation of their product pipeline. From 1984 to 1990, he worked in the Laboratory of Immunoregulation at the National
Institute of Allergy and Infectious Diseases at the National Institutes of Health, where he investigated the immune response
to retroviruses and studied the pathogenesis of AIDS. Dr. Koenig served as chairman of the board of directors of Applied
Genetic Technologies Corporation, or AGTC, a publicly held pharmaceutical company, until its acquisition in November
2022. He is also a member of the board of directors of the Biotechnology Innovation Organization (BIO) and the
International Biomedical Research Alliance. Dr. Koenig received his A.B. and Ph.D. from Cornell University and his M.D.
from the University of Texas Health Science Center in Houston. We believe that Dr. Koenig’s deep experience in the
biopharmaceutical industry, specifically in the BioHealth Capital Region of Maryland, Virginia, and Washington, DC, his
service on committees and boards of local institutions and organizations, and his strategic and operational expertise and
leadership skills make him highly qualified to serve as a member of our Board.
Scott Jackson
Mr. Jackson has served as a member of our Board since November 2018. Mr. Jackson served as the chief executive officer
and as a member of the board of directors of Celator Pharmaceuticals, Inc. from 2008 until 2016, when the company was
acquired by Jazz Pharmaceuticals plc. Mr. Jackson has more than 30 years of experience in the pharmaceutical and
biotechnology industries and has held positions of increasing responsibility in sales, marketing and commercial
development at Eli Lilly & Co., SmithKline Beecham, ImClone Systems Inc., Centocor Inc. (a division of Johnson &
Johnson), Eximias Pharmaceutical and YM BioSciences. Mr. Jackson currently serves on the board of directors of
MacroGenics, Inc., and Spero Therapeutics, Inc., and as chairperson of the board of directors of Mural Oncology, plc., all
of which are publicly traded pharmaceutical companies. Mr. Jackson also serves on the board of directors of
Philabundance, a non-profit organization addressing food insecurity in the Philadelphia region. He holds a B.S. in
pharmacy from the Philadelphia College of Pharmacy and Science and an M.B.A. from the University of Notre Dame. We
believe Mr. Jackson’s extensive experience in the pharmaceutical and biotechnology industries, including service as an
executive officer and board member, as well as his management expertise and significant background in business and
commercial development, sales and marketing and clinical development, make him highly qualified to serve as a member
of our Board.
Rachel King
Ms. King co-founded our company and has served as a member of our Board since our inception in 2003. Ms. King served
as our president and chief executive officer from our inception in 2003 until August 2021. Ms. King has served as the
interim president and chief executive officer of the Biotechnology Innovation Organization (BIO) from October 2022 to
March 2024 and has served on its board of directors since 2005, including as chair of the board of BIO from 2013 to 2015.
Previously, Ms. King was an Executive in Residence at New Enterprise Associates (NEA), an investment firm, from 2001
to 2003. From 1999 to 2001, Ms. King served as a senior vice president of Novartis Corporation, a pharmaceutical
company. Before joining Novartis, Ms. King spent 10 years with Genetic Therapy, Inc., a biotechnology company, where
she served in a number of roles as part of the executive team, which included the company’s initial public offering and later
acquisition by Novartis. After the acquisition by Novartis, she served as the chief executive
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officer of Genetic Therapy, which was then a wholly owned subsidiary of Novartis. Ms. King previously worked at Alza
Corporation, a pharmaceutical and medical systems company that was later acquired by Johnson & Johnson, as well as at
Bain and Company, a management consulting firm. Ms. King currently serves on the board of directors of Novavax, Inc., a
publicly traded biotechnology company. Ms. King was appointed by Maryland’s governor as chair of the Maryland Life
Sciences Advisory Board and served in that capacity from 2013 to 2015. She also currently serves on the board of the
University of Maryland BioPark. She received a B.A. from Dartmouth College and an M.B.A. from Harvard Business
School. The Board believes that Ms. King’s detailed knowledge of our company as one of our co-founders and her
experience with biotechnology companies prior to founding our company, in addition to her leadership skills, allow her to
take valuable contributions to the Board.
Daniel Junius
Mr. Junius has served as a member of our Board since 2016. Mr. Junius served as the president and chief executive officer
of ImmunoGen, Inc., formerly a publicly held biotechnology company recently acquired by AbbVie, from 2009 until his
retirement in 2016. He also served as ImmunoGen’s president and chief operating officer and acting chief financial officer
from July 2008 to December 2008, as an executive vice president and the chief financial officer from 2006 to July 2008,
and as a senior vice president and the chief financial officer from 2005 to 2006. Mr. Junius also served as a director of
ImmunoGen from 2008 until June 2018. Before joining ImmunoGen, Mr. Junius was an executive vice president and the
chief financial officer of New England Business Service, Inc., or NEBS, a business-to-business direct marketing company,
from 2002 until its acquisition by Deluxe Corporation in 2004 and a senior vice president and the chief financial officer of
NEBS from 1998 to 2002. Prior to NEBS, he was a vice president and the chief financial officer of Nashua Corporation, a
manufacturer and marketer of specialty imaging paper and label products and services. He joined Nashua Corporation in
1984 and held financial management positions of increasing responsibility before becoming chief financial officer in 1996.
Mr. Junius has served on the board of directors and as chair of the audit committee of IDEXX Laboratories, Inc., a publicly
held pet healthcare company, since 2014. Mr. Junius holds a Bachelor of Arts in Political Science from Boston College and
a master’s degree in management from Northwestern University’s Kellogg School of Management. The Board believes that
Mr. Junius’s extensive experience, including service as chief executive officer and chief financial officer of public
companies, in addition to his financial expertise and depth of knowledge of the biopharmaceutical industry, allows him to
make valuable contributions to the Board and to bolster the Board’s overall skills and experience.
BOARD DIVERSITY
While we do not have a formal diversity policy in place, our Nominating and Corporate Governance Committee
considers the diversity of the Board overall with respect to age, disability, gender identity or expression, ethnicity, military
veteran status, national origin, race, religion, sexual orientation, and other backgrounds and experiences. Our Nominating
and Corporate Governance Committee is committed to actively seeking out and will instruct any search firm it engages to
identify, individuals who will contribute to the overall diversity of the Board to be included in the pool of candidates from
which nominees to the Board are selected. Our Board monitors the mix of skills and experience of its directors to help
ensure it has the necessary tools to perform its oversight function effectively. The Board fully appreciates the value of a
diversity of viewpoints, background and experiences as important to the selection of directors to enhance the Board’s
cognitive diversity and quality of dialogue in its discussions.
Board Diversity Matrix (as of February 7, 2025)
Total Number of Directors:
8
Did Not
Female
Male
Non-Binary
Disclose
Part I: Gender Identity
Directors
2
6
Part II: Demographic Background
White
2
6**
** Includes one director who identifies as Middle Eastern.
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65
CODE OF ETHICS
We have adopted a Code of Business Conduct and Ethics, which is applicable to all of our directors, officers and
employees, including our CEO, Chief Financial Officer and other senior financial officers. The Code of Business Conduct
and Ethics provides a framework for sound ethical business decisions and sets forth our expectations on a number of topics,
including conflicts of interest, compliance with laws, use of our assets and business ethics. Our Code of Business Conduct
and Ethics is posted in the “Corporate Governance” section of the “Investors” tab of our website located at
www.glycomimetics.com. If we ever were to amend or waive any provision of the Code of Business Conduct and Ethics
that applies to our principal executive officer, principal financial officer, principal accounting officer or any person
performing similar functions, we intend to satisfy our disclosure obligations, if any, with respect to any such waiver or
amendment by posting such information on our website set forth above rather than by filing a Current Report on Form 8-K.
In the case of a waiver for an executive officer or a director, the disclosure required under applicable Nasdaq listing
standards also will be made available on our website.
Audit Committee and Audit Committee Financial Expert
All members of the Audit Committee are “independent” in accordance with Nasdaq listing standards and SEC
rules applicable to boards of directors in general and audit committee members in particular. The Board has determined that
Ms. Andrews, Mr. Junius and Mr. Pearson each qualify as an “audit committee financial expert” as defined by the
applicable SEC rules and that each member of the Audit Committee is financially sophisticated.
Family Relationships
There are no family relationships among any of our executive officers or directors.
ITEM 11.
EXECUTIVE COMPENSATION
This section discusses the material components of the executive compensation program for our current and former
executive offices who are named in the 2024 Summary Compensation Table below. In 2024, our “named executive
officers” and their positions were as follows:
●
Harout Semerjian, our President and Chief Executive Officer;
●
Brian Hahn, our Chief Financial Officer and Senior Vice President; and
●
Edwin Rock, M.D., our former Chief Medical Officer and Senior Vice President.
2024 Summary Compensation Table
The following table sets forth information concerning the compensation of our named executive officers for the
years presented.
NON-EQUITY
INCENTIVE
OPTION
PLAN
ALL OTHER
SALARY
BONUS
AWARDS
COMPENSATION
COMPENSATION
TOTAL
NAME AND PRINCIPAL POSITION
YEAR
($)
($)(1)
($)(2)
($)(3)
($)(4)
($)
Harout Semerjian
2024
663,941
376,910
1,822,638
—
59,844
2,923,333
President and Chief Executive Officer
2023
638,405
100,000
1,263,328
376,910
10,775
2,389,418
Brian Hahn
2024
479,449
196,004
655,625
—
53,101
1,384,179
Chief Financial Officer and Senior Vice
President
2023
461,009
154,679
477,822
196,004
10,425
1,299,939
Edwin Rock, M.D.
2024
282,988
—
655,625
—
562,707
1,501,320
Chief Medical Officer and Senior Vice
President
2023
466,620
—
474,912
198,779
12,000
1,152,311
(1)
For Mr. Semerjian, the amount for 2023 represents a discretionary bonus awarded, in part, to assist with commuter expenses, the
amount for 2024 represents a retention bonus earned on December 31, 2024. For Mr. Hahn, amounts in this column represent the
remaining 60% of a retention bonus that was paid in August 2023, the amount for 2024 represents a retention bonus earned on
December 31, 2024.
(2)
The amounts reflect the full grant date fair value for stock option awards granted during the indicated year. The grant date fair value
was computed in accordance with ASC Topic 718, Compensation—Stock Compensation, with the performance-based option awards
valued based on the probable achievement level of the performance conditions at the time of grant. Because there was only one
vesting level of the performance-based options, there is no grant date fair value in excess of the amount reported in the table above.
This calculation does not give effect to any estimate of forfeitures related to service-based vesting but assumes that the
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executive will perform the requisite service for the award to vest in full. The assumptions we used in valuing stock options are
described in Note 9 to our audited financial statements included in this Annual Report on Form 10-K. These amounts do not reflect
the actual economic value that will be realized by the named executive officer upon vesting or exercise of the stock options, or the
sale of the common stock underlying the stock options.
(3)
The amounts reflect the portion of each officer’s target bonus paid based on the achievement of pre-specified corporate and/or
individual performance goals.
(4)
Amounts in this column reflect matching contributions under the Company’s 401(k) plan and supplemental compensation for cell
phone expenses as well as vacation accrual payments and in the case of Mr. Hahn, long-term care insurance premiums. For Dr.
Rock only, the amount reported for 2024 also includes severance payments and company reimbursements for COBRA medical and
dental insurance premiums in the aggregate amount of $503,365 and consulting fees of $7,125. See “Former Chief Medical Officer”
below for additional information.
Narrative Disclosure to Summary Compensation Table
2024 Salaries
Our named executive officers receive a base salary to compensate them for services rendered to our company.
The base salary payable to each named executive officer is intended to provide a fixed component of compensation
reflecting the executive’s skill set, experience, role, and responsibilities. The base salaries of our named executive officers
are reviewed from time to time and adjusted when our Board of Directors or compensation committee determines an
adjustment is appropriate.
During 2024, the compensation committee increased the annual base salary for Mr. Semerjian from $640,458 to
$666,076, the annual salary for Mr. Hahn from $462,491 to $480,991, and the annual base salary for Dr. Rock from
$469,040 to $487,802, each effective February 2024, in recognition of the executive’s individual performance and based on
compensation data provided by Alpine.
2024 Bonuses
We seek to motivate and reward our executives for achievements relative to our corporate goals and expectations for
each fiscal year. Each named executive officer has a target bonus opportunity, defined as a percentage of his annual salary.
The following table presents the target bonus of each of our named executive officers for 2024:
TARGET BONUS
NAME
(% OF SALARY)
Harout Semerjian
55
Brian Hahn
40
Edwin Rock, M.D.
40
To reinforce the importance of integrated and collaborative leadership, bonuses for executives other than the Chief
Executive Officer have been based primarily on company performance, but also contain an individual performance
component. Our Chief Executive Officer’s bonus has historically been based exclusively on company performance. In no
event may a bonus awarded to an executive exceed 150% of such executive’s target bonus.
Our corporate performance objectives for 2024 included certain accomplishments in clinical, non-clinical
development, as well as financial and administrative goals. Considering the financial situation of the company, no bonuses
would be paid for 2024 performance.
Retention Bonuses
In January 2022, the Compensation Committee approved a cash retention program for selected employees,
including the Company’s executive officers other than the Chief Executive Officer. Under the program, each participant
had the opportunity to receive an individual cash award up to 1.5 times the amount of such participant’s 2021 annual bonus
target. Of the cash award, 40% was paid in a lump sum in August 2022 to participants who were employed at that time and
the remaining 60% was paid in a lump sum in August 2023. Mr. Hahn is the only named executive officer who was eligible
to participate in the cash retention program. His cash retention award is described in the Summary Compensation Table
above under the “Bonus” column.
In August 2024, the Compensation Committee approved a cash retention program for selected employees,
including the Company’s executive officers. Under the program, each participant had the opportunity to receive an
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individual cash award up to 1.0 time the amount of such participant’s 2023 annual bonus target. The award is payable to
those employed on December 31, 2024. The cash retention award is described in the Summary Compensation Table above
under the “Bonus” column.
Long-Term Incentives
We have historically granted stock options to our named executive officers and in some prior years also awarded
restricted stock units. We award stock options on the date the Compensation Committee approves the grant. We set the
option exercise price and grant date fair value based on the closing price of our common stock on the Nasdaq Capital
Market on the date of grant. We typically grant stock options at the start of employment and annually as part of the
Compensation Committee review process.
In January 2024, in connection with its annual compensation review for 2023, our Compensation Committee granted
options to purchase shares of our common stock to our named executive officers. The shares of common stock subject to
the option grants in the table below vest as to one-fourth of the shares one year after the date of grant, with the balance of
the shares vesting in 36 successive equal monthly installments thereafter, subject to the named executive officer’s service
with us as of each such date. Each option has an exercise price of $3.11 per share, the closing price of our common stock
on the grant date.
Number of Shares
Underlying January 2024
Option Grant
Harout Semerjian
695,000
Brian Hahn
250,000
Edwin Rock, M.D.
250,000
In June 2024, our Compensation Committee granted options to purchase shares of our common stock with service-
based vesting. The performance-based options are scheduled to vest in full upon FDA approval of our product candidate
uproleselan, subject to the recipient’s continued service through the vesting date. Mr. Semerjian was awarded a
performance-based option for an aggregate of 521,250 shares, Mr. Hahn was awarded a performance-based option for
187,500 shares common stock, and Dr. Rock was awarded a performance-based option for an aggregate of 187,500 shares.
Outstanding Equity Awards at End of 2024
The following table provides information about outstanding stock options and restricted stock units held by each of
our named executive officers on December 31, 2024.
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68
EQUITY INCENTIVE
PLAN AWARDS:
NUMBER OF
NUMBER OF
MARKET VLUE
NUMBER OF
NUMBER OF
SECURITIES
SHARES
OF SHARES
SECURITIES
SECURITIES
UNDERLYING
OR UNITS
OR UNITS OF
UNDERLYING
UNDERLYING
UNEXERCISED
OPTION
OF STOCK
STOCK THAT
UNEXERCISED
UNEXERCISED
UNEARNED
EXERCISE
OPTION
THAT HAVVE
HAVE
OPTIONS (#)
OPTIONS (#)
OPTIONS (#)
PRICE
EXPIRATION
NOT VESTED
NOT VESTED (2)
NAME
EXERCISABLE UNEXERCISABLE
UNEXERCISABLE
($)
DATE (1)
(#)
($)
Harout Semerjian
915,333
183,067 (3)
—
2.03
08/02/2031
—
—
549,200 (4)
2.03
08/02/2031
308,802
114,698 (5)
—
1.11
01/20/2032
312,033
339,167 (6)
—
2.55
01/18/2033
—
695,000 (7)
—
3.11
01/12/2034
—
—
521,250 (4)
0.26
06/09/2034
Brian Hahn
61,000
—
—
7.15
01/07/2025
65,000
—
—
5.22
01/06/2026
65,000
—
—
6.33
01/03/2027
65,000
—
—
20.03
01/09/2028
90,000
—
—
10.59
01/16/2029
120,000
—
—
4.72
01/21/2030
67,563
1,437 (8)
—
3.81
01/19/2031
120,094
44,606 (5)
—
1.11
01/20/2032
118,019
128,281 (6)
—
2.55
01/18/2033
—
—
47,700 (4)
1.11
01/20/2032
—
—
—
8,625
2,156 (9)
—
250,000 (7)
—
3.11
01/12/2034
—
—
187,500 (4)
0.26
06/09/2034
Edwin Rock, M.D.
112,500
87,500 (10)
—
0.74
09/01/2032
117,300
127,500 (6)
—
2.55
01/18/2033
—
250,000 (7)
—
3.11
01/12/2034
187,500 (4)
0.26
06/09/2034
(1)
In each case the option expiration date is ten years after the date of grant.
(2)
Market value of restricted stock units that have not vested was determined by multiplying the number of shares by $0.25, the
closing price of our common stock on December 31, 2024.
(3)
These shares will vest monthly through August 3, 2025, in each case subject to the officer’s continued service through the
applicable vesting date.
(4)
This option will vest upon achievement of specified development and commercialization milestones.
(5)
These shares will vest monthly through January 21, 2026, subject to the officer’s continued service through each applicable vesting
date.
(6)
25% of the total shares underlying this option vested on January 19, 2024. The remaining shares will vest monthly through January
19, 2027, subject to the officer’s continued service through each applicable vesting date.
(7)
25% of the total shares underlying this option vested on January 12, 2025. The remaining shares will vest monthly through January
12, 2028, subject to the officer’s continued service through each applicable vesting date.
(8)
These shares will vest monthly through January 20, 2025, subject to the officer’s continued service through each applicable vesting
date.
(9)
The remainder will vest on January 20, 2025, subject to the officer’s continuous service as of that date.
(10) These shares will vest monthly through September 2, 2026, in each case subject to the officer’s continued service through the
applicable vesting date.
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69
Pension Benefits and Nonqualified Deferred Compensation
Our named executive officers did not participate in, or otherwise receive any benefits under, any pension plan or
nonqualified deferred compensation plan sponsored by us during 2024.
Employment Agreements and Potential Payments upon Termination of Employment or upon Change in Control
Pursuant to their employment agreements with us, each named executive officer is eligible for severance benefits
in specified circumstances. Under the terms of the agreements, upon execution and effectiveness of a severance agreement
and release of claims, each such named executive officer will be entitled to severance payments if we terminate such
executive’s employment without cause, or such executive terminates employment with us for good reason.
The following definitions have been adopted in the current employment agreements with our named executive officers:
●
“cause” means that we have determined in our sole discretion that any of the following occurred: (a) the executive
officer’s breach of fiduciary duty or substantial misconduct with respect to our business and affairs, (b) the
executive officer’s neglect of duties or failure to act which can reasonably be expected to materially adversely
affect our business or affairs, (c) the executive officer’s material breach of the employment agreement, or of any
provision of the proprietary information, assignment of inventions, noncompetition and nonsolicitation agreement
to which the executive is a party which, to the extent curable, is not cured within 15 days after written notice
thereof is given to the executive officer, (d) the commission by the executive officer of an act involving moral
turpitude or fraud, (e) the executive officer’s conviction of any felony, or of any misdemeanor involving fraud,
theft, embezzlement, forgery or moral turpitude, (f) other conduct by the executive officer that is materially
harmful to our business or reputation, including but not limited to conduct found to be in violation of our policies
prohibiting harassment or discrimination, or (g) the expiration of the employment agreement;
●
“good reason” means any of the following without the executive officer’s prior written consent: (a) any material
diminution of the executive officer’s duties or responsibilities under the employment agreement (except in each
case in connection with a termination for cause or as a result of the executive officer’s death or disability), or the
assignment to the executive officer of duties or responsibilities that are materially inconsistent with the executive
officer’s then-current position, with the exception of certain situations involving the acquisition of the Company;
(b) a reduction of at least 10% of the executive’s base salary unless pursuant to a salary reduction program
applicable generally to similarly-situated employees; (c) any material breach of the employment agreement by us
which we have not cured within 15 business days after written notice thereof is given to us; or (d) a relocation of
the executive officer from our principal office to a location more than 35 miles from the location of our principal
office, other than on required travel by the executive officer on business or on a temporary basis not to exceed a
period equal to two calendar months; and
●
“change in control” means any of the following: (a) a sale, lease, exchange or other transfer in one transaction or a
series of related transactions of all or substantially all of our assets, other than the transfer of our assets to a
majority-owned subsidiary corporation; (b) a merger or consolidation in which we are not the surviving
corporation, unless the holders of our outstanding voting stock immediately prior to such transaction own,
immediately after such transaction, securities representing at least 50% of the voting power of the corporation or
other entity surviving such transaction; (c) a reverse merger in which we are the surviving corporation but the
shares of our common stock outstanding immediately preceding the merger are converted by virtue of the merger
into other property, whether in the form of securities, cash or otherwise, unless the holders of our outstanding
voting stock immediately prior to such transaction own, immediately after such transaction, securities
representing at least 50% of our voting power; or (d) any transaction or series of related transactions in which in
excess of 50% of our voting power is transferred; provided that, where required to avoid additional taxation under
Section 409A of the Internal Revenue Code, the event that occurs must also be a “change in the ownership or
effective control of a corporation, or a change in the ownership of a substantial portion of the assets of a
corporation” as defined under applicable regulations.
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The following table summarizes the schedule of severance payments each of our named executive officers would
receive in the event of a qualifying termination.
CONTINUATION OF
EMPLOYER PORTION
OF MEDICAL,
ACCELERATION OF
SALARY
DENTAL AND VISION
UNVESTED
TERMINATION SCENARIO
CONTINUATION(1)
BONUS
BENEFIT PREMIUMS EQUITY AWARDS
Prior to or More than 12 Months
Following a Change in Control
Harout Semerjian
18 months
None
18 months
None
Brian Hahn
12 months
None
12 months
None
Edwin Rock, M.D.
12 months
None
12 months
None
Within 12 Months Following a
Change in Control
Harout Semerjian
18 months Target Bonus (2)
18 months
Full Acceleration (3)
Brian Hahn
12 months Target Bonus (2)
12 months
Full Acceleration (3)
Edwin Rock, M.D.
12 months Target Bonus (2)
12 months
Full Acceleration (3)
(1)
If the termination is prior to, or more than 12 months following a change, in control, the executive officer’s salary continuation will
be paid on our regular payroll dates, less applicable withholdings and deductions. If the termination is within 12 months following a
change in control, the executive officer’s salary continuation will be paid in a lump-sum cash payment, less applicable withholdings
and deductions, within 60 days following the change in control termination.
(2)
The executive officer will receive payment of the executive officer’s target bonus award for the 18 months, in the case of Mr.
Semerjian, or 12 months, in the case of Mr. Hahn and Dr. Rock, immediately prior to the executive officer’s change in control
termination, payable in a lump-sum cash payment, less applicable withholdings and deductions, within 60 days following the
change in control termination.
(3)
The executive officer will receive accelerated vesting of all then unvested equity awards that he may have, if any.
Health and Welfare Benefits
Our named executive officers are eligible to participate in all of our employee benefit plans, such as medical,
dental, vision, group life and disability insurance, in each case on the same basis as our other employees.
We also maintain a defined contribution employee retirement plan for our employees, including our named
executive officers. Our 401(k) plan is intended to qualify as a tax-qualified plan under Section 401 of the Internal Revenue
Code so that contributions to our 401(k) plan, and income earned on such contributions, are not taxable to participants until
withdrawn or distributed from the 401(k) plan. Our 401(k) plan provides that each participant may contribute a portion of
his or her pre-tax compensation, up to a statutory limit, which was $22,500 for 2023 and is $23,000 for 2024. Participants
who are at least 50 years old can also make “catch-up” contributions, which was and is up to an additional $7,500 for 2023
and 2024. Under our 401(k) plan, each employee is fully vested in his or her deferred salary contributions. Employee
contributions are held and invested by the plan’s trustee, subject to participants’ ability to give investment directions by
following specified procedures. In 2023, we provided matching contributions of up to 50% of the first 6% of each
employee’s eligible contributions to the 401(k) plan.
We do not provide perquisites or personal benefits to our named executive officers. We do, however, pay the
premiums for term life insurance for all of our employees, including our named executive officers. We previously paid
premiums for long-term care insurance for all of our employees; we no longer do so, although we continue to pay such
premiums for continuing employees for whom we previously did so. Due to his tenure with the Company, Mr. Hahn is the
only named executive officer for whom we continue to pay such long-term care insurance premiums.
Clawbacks
As a public company, if we are required to restate our financial results due to our material noncompliance with any
financial reporting requirements under the federal securities laws as a result of misconduct, the CEO and Chief Financial
Officer may be legally required to reimburse the Company for any bonus or other incentive-based or equity-based
compensation they receive in accordance with the provisions of section 304 of the Sarbanes-Oxley Act of 2002, as
amended. Additionally, we have implemented a Dodd-Frank Act-compliant clawback policy, as required by SEC rules.
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71
Former Chief Medical Officer
Dr. Rock’s position was eliminated in connection with the Workforce Reduction, and he separated from
employment effective August 1, 2024. In connection with Dr. Rock’s separation, we entered into a separation agreement
with Dr. Rock pursuant to which he became eligible to receive the severance payments and benefits under his employment
agreement with the company, which includes his base salary continuation for a period of 12 months and reimbursement for
continued health coverage pursuant to COBRA for up to 12 months. We entered into a separate agreement with Dr. Rock
(the “Consulting Agreement”), effective as of the separation date, pursuant to which Dr. Rock will, at the request of Mr.
Hahn or his designee, provide us with consulting services through January 31, 2025 (the “Consulting Period”). During the
Consulting Period, Dr. Rock will be paid a specified hourly rate, subject to obtaining advance approval from an authorized
representative of GlycoMimetics to provide such consulting services. Dr. Rock’s provision of services under the Consulting
Agreement constituted “Continuous Service” for purposes of continued vesting and exercising of his outstanding equity
awards under GlycoMimetics’ equity incentive plans. The severance payments and benefits paid by the company during
2024 are set forth in the “All Other Compensation” column of the 2024 Summary Compensation Table above.
Policies and Practices Regarding Long-Term Incentive Awards
The GlycoMimetics Compensation Committee and senior management monitor GlycoMimetics’ equity grant
practices to evaluate whether such policies comply with governing regulations and are consistent with good corporate
practices. When making regular annual equity grants, the GlycoMimetics Compensation Committee’s practice is to approve
them at its meeting in January of each year as part of the annual compensation review and after results for the preceding
fiscal year become available. Because the GlycoMimetics Compensation Committee’s regular meeting schedule is
determined in the prior fiscal year, the proximity of any awards to other significant corporate events is coincidental. In
addition, the GlycoMimetics Compensation Committee may make grants at any time during the year it deems appropriate,
including with respect to new hires or transitions or for general retentive or incentive needs. GlycoMimetics attempts to
make equity awards during periods when it do not have material non-public information (“MNPI”) that could
impact GlycoMimetics’ stock price and GlycoMimetics does not time the release of MNPI based on equity grant dates.
During 2024, no stock option grants were made to any of GlycoMimetics’ named executive officers during any
period beginning four business days before the filing or furnishing of a periodic report or current report (other than a
current report on Form 8-K disclosing a material new option award grant under Item 5.02(e) of that form) and ending one
business day after the filing or furnishing of any such report with the SEC.
NON-EMPLOYEE DIRECTOR COMPENSATION
As compensation for serving on our Board of Directors, each director who is not an employee of our company
receives a cash retainer for service on the Board and for service on each committee on which the director is a member. The
compensation of our directors is based on market practice information provided by our independent compensation
consultant. This compensation is periodically reviewed with respect to cash retainers and equity incentives.
The retainers paid to non-employee directors for service on the Board and for service on each committee of the Board
on which the director is a member are as follows:
CHAIRMAN ADDITIONAL
MEMBER ANNUAL SERVICE
ANNUAL SERVICE
RETAINER
RETAINER
Board of Directors
$
40,000
$
30,000
Audit Committee
9,000
9,000
Compensation Committee
6,000
6,000
Nominating and Corporate Governance Committee
4,500
4,500
These retainers are payable in arrears in four equal quarterly installments on the last day of each quarter, provided that
the amount of such payment is prorated for any portion of such quarter that the director is not serving on our Board. We
also reimburse our non-employee directors for reasonable travel and out-of-pocket expenses incurred in connection with
attending our Board and committee meetings.
In March 2023, we amended our non-employee director compensation policy to allow for each director to make an
election to receive all or a portion of the annual cash compensation payable above in the form of fully vested shares of
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common stock. Elections must be delivered before the start of the fiscal year to which the election relates. Elections cannot
be altered with respect to a fiscal year once the fiscal year begins and, once made, such election remains in effect for all
subsequent fiscal years unless and until revised or revoked.
In addition, any new non-employee director receives an option grant to purchase 80,000 shares of common stock
upon becoming a director. This grant will vest in three equal installments on the first, second and third anniversaries of the
grant date. Further, on the date of the 2024 annual meeting of stockholders, each non-employee director that continues to
serve as a non-employee member on our Board will receive an option to purchase 40,000 shares of common stock. The
annual grant to the non-employee director vests on the first full anniversary of the date of grant. The exercise price of
options granted to directors is equal to the closing price of our common stock on the Nasdaq Capital Market the date of
grant.
2024 Director Compensation
The following table shows the compensation earned by each of our non-employee directors for the year ended
December 31, 2024:
FEES EARNED OR OPTION AWARDS
Name
PAID IN CASH ($)
($)(1)
TOTAL ($)
Patricia Andrews (2)
49,000
51,600
100,600
Mark Goldberg, M.D. (2)
55,000
51,600
106,600
Scott Jackson
49,000
51,600
100,600
Daniel Junius
62,500
51,600
114,100
Rachel King (2)
40,000
51,600
91,600
Scott Koenig, M.D., Ph.D.
44,500
51,600
96,100
Timothy Pearson
88,000
51,600
139,600
(1)
Reflects the aggregate grant date fair value of options and restricted stock units granted during the fiscal year ended December 31,
2024 calculated in accordance with FASB ASC Topic 718. For a discussion of valuation assumptions, see Note 9 to our audited
consolidated financial statements included in this Annual Report on Form 10-K. These amounts do not reflect the actual economic
value that will be realized by the director upon vesting or exercise of the stock options or the sale of the common stock underlying
the stock options.
(2)
This director elected to receive quarterly retainers for the first and second quarters of 2024, equal to one-half of the amounts
reported in the “Fees Earned or Paid in Cash” column, in the form of unrestricted shares of common stock.
As of December 31, 2024, our non-employee directors held the following restricted stock units and stock options:
Share Subject to Unvested
Share Subject to Outstanding
Restricted Stock Units (#)
Options (#)
Patricia Andrews
—
181,500
Mark Goldberg, M.D.
—
192,500
Scott Jackson
—
170,500
Daniel Junius
—
203,500
Rachel King
24,063
1,534,500
Scott Koenig, M.D., Ph.D.
—
161,000
Timothy Pearson
—
192,500
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table sets forth certain information regarding the ownership of our common stock as of February 7,
2025 by: (i) each director; (ii) each of the executive officers named in the Summary Compensation Table, also called the
named executive officers; (iii) all executive officers and directors as a group; and (iv) all those known by us to be beneficial
owners of more than five percent of our common stock. Except as otherwise noted below, the address for persons listed in
the table is c/o GlycoMimetics, Inc.
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73
This table is based upon information supplied by our named executive officers, directors and principal
stockholders. Unless otherwise indicated in the footnotes to the table and subject to community property laws where
applicable, we believe that each stockholder named in the table has sole voting and investment power with regard to the
shares indicated as being beneficially owned. Applicable percentages are based on 64,513,862 shares of common stock
outstanding on February 7, 2025, adjusted as required by the rules promulgated by the SEC.
Number of
Percent of
Shares
Shares
Beneficially
Beneficially
Beneficial Owner
Owned
Owned
5% Stockholders:
Entities affiliated with Biotechnology Value Fund, L.P. (1)
9,544,262
14.8 %
Entities affiliated with RA Capital Management, L.P. (2)
6,383,000
9.9
Entities affiliated with Adage Capital Management, L.P. (3)
5,091,231
7.9
Entities affiliated with Logos Global Management, L.P. (4)
5,000,000
7.8
Named Executive Officers and Directors:
Harout Semerjian (5)
1,734,919
2.7
Brian Hahn (6)
913,443
1.4
Edwin Rock, M.D. (7)
972,703
1.5
Patricia Andrews (8)
200,108
*
Mark Goldberg, M.D.(9)
199,622
*
Scott Jackson (10)
133,550
*
Daniel Junius (11)
226,750
*
Rachel King (12)
2,122,189
3.3
Scott Koenig, M.D., Ph.D.(13)
157,750
*
Timothy Pearson (14)
177,150
*
All current directors and executive officers as a group (10 persons)(14)
6,870,384
10.7
* Represents beneficial ownership of less than one percent of the outstanding shares of common stock.
1) As reported on a Schedule 13G/A filed by Biotechnology Value Fund, L.P., Mark Lampert and affiliated entities
(collectively, “BVF”) with the SEC on January 29, 2024, which states that BVF had shared voting and dispositive power
with respect to these shares. The principal business address of BVF is 44 Montgomery Street, 40th Floor, San Francisco,
CA 94104.
2) As reported on a Schedule 13G filed by RA Capital Management, L.P. with the SEC on November 6, 2024. RA Capital
Healthcare Fund GP, LLC is the general partner of the Fund. The general partner of RA Capital is RA Capital Management
GP, LLC, of which Dr. Kolchinsky and Mr. Shah are the controlling persons. RA Capital serves as investment adviser for
the Fund and may be deemed a beneficial owner, for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended (“Act”), of any securities of the Issuer held by the Fund. The Fund has delegated to RA Capital the sole power to
vote and the sole power to dispose of all securities held in the Fund’s portfolio, including the shares of the Issuer’s
Common Stock reported herein. Because the Fund has divested voting and investment power over the reported securities it
holds and may not revoke that delegation on less than 61 days’ notice, the Fund disclaims beneficial ownership of the
securities it holds for purposes of Section 13(d) of the Act and therefore disclaims any obligation to report ownership of the
reported securities under Section 13(d) of the Act. As managers of RA Capital, Dr. Kolchinsky and Mr. Shah may be
deemed beneficial owners, for purposes of Section 13(d) of the Act, of any securities of the Issuer beneficially owned by
RA Capital. RA
Capital, Dr. Kolchinsky, and Mr. Shah disclaim beneficial ownership of the securities reported in this Schedule 13G other
than for the purpose of determining their obligations under Section 13(d) of the Act, and the filing of this Schedule 13G
shall not be deemed an admission that either RA Capital, Dr. Kolchinsky, or Mr. Shah is the beneficial owner of such
securities for any other purpose. The principal business address of RA Capital Management, L.P. is 200 Berkeley Street,
18th Floor, Boston MA 02116.
3) As reported on a Schedule 13D filed on November 4, 2024 by Adage Capital Management, (i) Adage Capital
Management, L.P., a Delaware limited partnership ("ACM"), as the investment manager of Adage Capital Partners, L.P., a
Delaware limited partnership ("ACP"), with respect to the shares of Common Stock directly held by ACP; (ii) Robert
Atchinson ("Mr. Atchinson"), as (i) managing member of Adage Capital Advisors, L.L.C., a Delaware limited liability
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74
company ("ACA"), managing member of Adage Capital Partners GP, L.L.C., a Delaware limited liability company
("ACPGP"), general partner of ACP and (ii) managing member of Adage Capital Partners LLC, a Delaware limited
liability company ("ACPLLC"), general partner of ACM, with respect to the shares of Common Stock directly held by
ACP; and (iii) Phillip Gross ("Mr. Gross"), as (i) managing member of ACA, managing member of ACPGP and (ii)
managing member of ACPLLC, general partner of ACM, with respect to the shares of Common Stock directly held by
ACP. The principal business address of Adage Capital Management is 200 Clarendon Street, 52nd floor, Boston, MA
02116.
4) As reported on a schedule 13G filed on November 27, 2024 by Logos Global Management, L.P. Logos Global Master
Fund LP (“Global Fund”), Logos Global Management LP (“Logos Global”), Logos GP LLC (“Logos GP”), Logos Global
Management GP LLC (“Logos Global GP”), and Arsani William (collectively, the “Filers”). Logos Global is the
investment adviser to investment funds, including Global Fund. Logos Global GP is the general partner of Logos Global.
Dr. William is a control person of Logos Global and Logos Global GP.
5) Consists of (a) 25,000 shares of common stock held directly and (b) 1,709,919 shares of common stock underlying
options that are vested and exercisable within 60 days of February 7, 2025.
6) Consists of (a) 70,643 shares of common stock held directly, (b) 834,175 shares of common stock underlying options
that are vested and exercisable within 60 days of February 7, 2025 and (c) 8,625 shares of common stock underlying
restricted stock units that will vest and settle within 60 days of February 7, 2025.
7) Consists of (a) 680,403 shares of common stock held directly and (b) 292,300 shares of common stock underlying
options that are vested and exercisable within 60 days of February 7, 2025.
8) Consists of (a) 58,608 shares of common stock held directly and (b) 141,500 shares of common stock underlying options
that are vested and exercisable within 60 days of February 7, 2025.
9) Consists of (a) 11,497 shares of common stock held by family trusts for which Dr. Goldberg serves as trustee, (b) 20,224
shares of common stock held directly and (c) 167,901 shares of common stock underlying options that are vested and
exercisable within 60 days of February 7, 2025.
10) Consists of (a) 5,250 shares of common stock held directly and (b) 130,500 shares of common stock underlying options
that are vested and exercisable within 60 days of February 7, 2025.
11) Consists of (a) 93,250 shares of common stock held directly and (b) 163,500 shares of common stock underlying
options that are vested and exercisable within 60 days of February 7, 2025.
12) Consists of (a) 487,798 shares of common stock held directly, (b) 1,490,490 shares of common stock underlying
options that are vested and exercisable within 60 days of February 7, 2025, (c) 45,741 shares of common stock held by Ms.
King’s spouse, (d) 90,660 shares of common stock held by family trusts for which Ms. King serves as trustee and (e) 7,500
shares held by a limited liability company for which Ms. King serves as co-manager.
13) Consists of (a) 36,750 shares of common stock held directly and (b) 121,000 shares of common stock underlying
options that are vested and exercisable within 60 days of February 7, 2025.
14) Consists of (a) 24,650 shares of common stock held directly and (b) 152,500 shares of common stock underlying
options that are vested and exercisable within 60 days of February 7, 2025.
15) Consists of (a) 1,657,974 shares of common stock, (b) 5,203,785 shares of common stock underlying options that are
vested and exercisable within 60 days of February 7, 2025 and (c) 8,625 shares of common stock underlying restricted
stock units that will vest and settle within 60 days of February 7, 2025.
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75
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides certain information regarding our equity compensation plans in effect as of
December 31, 2024:
Number of securities
remaining available for
Weighted-average
future issuance under
Number of securities to
exercise
equity compensation
be issued upon exercise
price of outstanding
plans
of outstanding options,
options,
(excluding securities
warrants and rights
warrants and rights
reflected in column (a))
Plan Category
(a)
(b)
(c)
Equity compensation plans approved by security
holders
12,427,973 (1)$
3.50 (2)
4,624,710 (3)
Equity compensation plans not approved by security
holders
2,720,400
2.01
299,108
Total
15,148,373
4,923,818
(1) Includes shares issuable upon exercise of outstanding options and shares issuable upon settlement of outstanding
restricted stock units (“RSUs”) under our Amended and Restated 2013 Equity Incentive Plan (the “2013 Plan”).
(2) Gives effect to outstanding RSUs, which have no exercise price. Excluding the RSUs, the weighted average exercise
price would be $3.55 per share.
(3) Consists of 1,070,346 shares available under the 2013 Plan and 3,554,364 shares available under the 2013 Employee
Stock Purchase Plan (“2013 ESPP”). On January 1 of each year, the number of shares reserved under the 2013 Plan is
automatically increased by 4% of the total number of shares of common stock that are outstanding at that time, or a lesser
number of shares as may be determined by our Board. An additional 2,575,749 shares were added to the number of
available shares under the 2013 Plan, in each case effective January 1, 2024. No shares were added to the reserve under the
2013 ESPP on January 1, 2024.
(4) Represents shares issuable under our Inducement Plan. A description of the Inducement Plan is contained in Note 9 to
our consolidated financial statements included in this Annual Report on Form 10-K.
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76
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
POLICIES AND PROCEDURES FOR RELATED PERSON TRANSACTIONS
We have adopted a related person transaction policy that sets forth our procedures for the identification, review,
consideration and approval or ratification of related person transactions. For purposes of our policy only, a related person
transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships,
in which we and any related person are, were or will be participants in which the amount involved exceeds $120,000.
Transactions involving compensation for services provided to us as an employee or director are not covered by this policy.
A related person is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities,
including any of their immediate family members and any entity owned or controlled by such persons.
Under the policy, if a transaction has been identified as a related person transaction, including any transaction that
was not a related person transaction when originally consummated or any transaction that was not initially identified as a
related person transaction prior to consummation, our management must present information regarding the related person
transaction to our Audit Committee, or, if Audit Committee approval would be inappropriate, to another independent body
of our Board, for review, consideration and approval or ratification. The presentation must include a description of, among
other things, the material facts, the interests, direct and indirect, of the related persons, the benefits to us of the transaction
and whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an
unrelated third party or to or from employees generally. Under the policy, we will collect information that we deem
reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to
identify any existing or potential related-person transactions and to effectuate the terms of the policy. In addition, under our
Code of Business Conduct and Ethics, our employees and directors have an affirmative responsibility to disclose any
transaction or relationship that reasonably could be expected to give rise to a conflict of interest.
In considering related person transactions, our Audit Committee, or other independent body of our Board, will take
into account the relevant available facts and circumstances including, but not limited to:
●
the risks, costs and benefits to us;
●
the impact on a director’s independence in the event that the related person is a director, immediate family
member of a director or an entity with which a director is affiliated;
●
the availability of other sources for comparable services or products; and
●
the terms available to or from, as the case may be, unrelated third parties or to or from employees generally.
The policy requires that, in determining whether to approve, ratify or reject a related person transaction, our Audit
Committee, or other independent body of our Board, must consider, in light of known circumstances, whether the
transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as our Audit Committee, or
other independent body of our Board, determines in the good faith exercise of its discretion.
CERTAIN RELATED PERSON TRANSACTIONS
There have been no transactions since January 1, 2024 to which we have been a participant in which the amount
involved exceeded or will exceed $120,000 (which amount is less than one percent of the average of our total assets at year
end for the last two completed fiscal years), and in which any of our directors, executive officers or holders of more than
5% of our capital stock, or any members of their immediate family, had or will have a direct or indirect material interest,
other than compensation arrangements that are described under “Executive Compensation” and “Non-Employee Director
Compensation.” We have also entered into indemnification agreements with our directors and executive officers.
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77
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table represents aggregate fees billed to the Company for the fiscal years ended December 31, 2024
and 2023 by Ernst & Young LLP, the Company’s principal accountant.
FISCAL YEAR ENDED DECEMBER 31,
2024
2023
(in thousands)
Audit fees
$
835
$
615
All other fees
—
—
$
835
$
615
Audit fees for both years include the aggregate fees billed or incurred for professional services rendered in connection
with the annual audit of our financial statements, reviews of our quarterly financial statements included in our quarterly
reports on Form 10-Q, accounting and financial reporting consultations and services in connection with registration
statements and comfort letters.
All the services of Ernst & Young LLP for the years ended December 31, 2024, and 2023 described above were pre-
approved by the Audit Committee.
AUDIT COMMITTEE PRE-APPROVAL POLICY
The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit services
rendered by the Company’s independent registered public accounting firm, Ernst & Young LLP. The policy generally pre-
approves specified services in the defined categories of audit services, audit-related services and tax services up to
specified amounts. Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the
engagement of the independent auditor or on an individual, explicit, case-by-case basis before the independent auditor is
engaged to provide each service. The pre-approval of services may be delegated to the chairperson of the Audit Committee
or one or more of the committee’s members, but the decision must be reported to the full Audit Committee at its next
scheduled meeting for ratification by the Audit Committee.
The Audit Committee has determined that the rendering of services other than audit services by Ernst & Young LLP
is compatible with maintaining the principal accountant’s independence.
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following documents are filed as part of this Annual Report on Form 10-K:
(1) Financial Statements:
Report of Independent Registered Public Accounting Firm
84
Balance Sheets
85
Statements of Operations and Comprehensive Loss
86
Statements of Stockholders’ Equity
87
Statements of Cash Flows
88
Notes to Financial Statements
89
(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.
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78
(3) Exhibits
Exhibit
Number
Description of Document
2.1(1)
Agreement and Plan of Merger and Reorganization, dated as of October 28, 2024, by and among
GlycoMimetics, Inc., Gemini Merger Sub Corp., Gemini Merger Sub II, LLC and Crescent Biopharma, Inc
3.1(2)
Amended and Restated Certificate of Incorporation of the Registrant.
3.2(3)
Amended and Restated Bylaws of the Registrant.
3.3 (4)
Certificate of Amendment to the Certificate of Incorporation of the Registrant.
3.4 (5)
Certificate of Amendment to the Certificate of Incorporation of the Registrant.
3.5 (6)
Form of Certificate of Designation of Preferences, Rights and Limitations of Series A Non-Voting
Convertible Preferred Stock.
4.1(7)
Specimen stock certificate evidencing shares of Common Stock.
4.2
Description of Certain of Registrant’s Securities.
10.1+(8)
GlycoMimetics, Inc. Amended and Restated 2013 Equity Incentive Plan.
10.2+(9)
Form of Stock Option Grant Notice and Stock Option Agreement under 2013 Equity Incentive Plan.
10.3+(10)
Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Award Agreement under 2013
Equity Incentive Plan.
10.4+(11)
2013 Employee Stock Purchase Plan.
10.5+(12)
GlycoMimetics, Inc. Amended and Restated Inducement Plan.
10.6+(13)
Form of Stock Option Grant Notice and Stock Option Agreement under the GlycoMimetics, Inc.
Inducement Plan.
10.7+(14)
Form of Indemnification Agreement.
10.8+(15)
Executive Employment Agreement, dated as of August 3, 2021, by and between the Registrant and Harout
Semerjian.
10.9+(16)
Retention Agreement, dated as of August 7, 2024, by and between the Registrant and Harout Semerjian.
10.10+(17)
Amended and Restated Executive Employment Agreement, dated as of July 30, 2019, by and between the
Registrant and Brian Hahn.
10.11+(18)
Retention Agreement, dated as of August 7, 2024, by and between the Registrant and Brian Hahn.
10.12+(19)
Executive Employment Agreement, dated as of August 31, 2022, by and between the Registrant and Edwin
Rock, M.D.
10.13+(20)
Separation Agreement, dated as of July 30, 2024, by and between the Registrant and Edwin Rock
10.14+(21)
Consulting Agreement, dated as of July 31, 2024, by and between the Registrant and Edwin Rock.
10.15+(22)
Amended and Restated Non-Employee Director Compensation Policy.
10.16(23)
Lease Agreement, dated July 23, 2014, by and between the Registrant and BMR-Medical Center Drive,
LLC.
10.17(24)
First Amendment to Lease, dated March 24, 2016, by and between the Registrant and BMR-Medical
Center Drive LLC.
10.18(25)
Second Amendment to Lease, dated April 20, 2018, by and between the Registrant and BMR-Medical
Center Drive LLC.
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79
Exhibit
Number
Description of Document
10.19(26)
Third Amendment to Lease, dated April 19, 2023, by and between the Registrant and ARE-Maryland No.
45, LLC.
10.20*(27)
Collaboration and License Agreement, dated January 2, 2020, by and between the Registrant and
Apollomics (Hong Kong) Limited.
10.21(28)
Sales Agreement, dated April 28, 2022 by and between the Registrant and Cowen and Company, LLC.
10.22**(29)
Project Agreement dated January 2, 2024 with Patheon Manufacturing Services LLC, part of Thermo
Fisher Scientific.
10.23 (30)
Form of Crescent Support Agreement.
1.24(31)
Form of GlycoMimetics Support Agreement.
10.25(32)
Form of GlycoMimetics Securities Purchase Agreement.
10.26(33)
Form of Registration Rights Agreement.
10.27(34)
Form of Lock-Up Agreement.
19.1
Insider Trading Policy.
23.1
Consent of Ernst & Young LLP, independent registered public accounting firm.
24.1
Power of Attorney (contained on signature page hereto).
31.1
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.
31.2
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.
32.1ᶺ
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.
97.1(35)
Incentive Compensation Recoupment Policy.
101.INS
Inline XBRL Instance Document-the instance document does not appear in the Interactive Data File as its
XBRL tags are embedded within the Inline XBRL document
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104
Cover Page formatted as Inline XBRL and contained in Exhibit 101
ᶺ
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.
#
Exhibits and/or schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby
undertakes to furnish supplementally copies of any of the omitted exhibits and schedules upon request by the SEC;
provided, however, that the registrant may request confidential treatment pursuant to Rule 24b-2 under the Exchange
Act for any exhibits or schedules so furnished.
+
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.
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80
**
Certain portions of this exhibit (indicated by asterisks) have been omitted pursuant to Item 601(b)(10)(iv) of
Regulation S-K because they are not material and are of the type that the registrant treats as private or confidential.
(1) Previously filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the
Commission on October 29, 2024, and incorporated by reference herein.
(2) 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.
(3) 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.
(4) 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 May 1, 2024, and incorporated by reference herein.
(5) 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 May 1, 2024, and incorporated by reference herein.
(6) 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 October 29, 2024, and incorporated by reference herein.
(7) 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.
(8) 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 May 20, 2022, 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 10.19 to the Registrant’s Annual Report on Form 10-K (File No. 001-36177), filed with the
Commission on March 3, 2022, and incorporated by reference herein.
(13)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.
(14)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.
(15)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.
(16)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 13, 2024, and incorporated by reference herein.
(17)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.
(18)Previously filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q (File No. 001-36177), filed with
the Commission on November 13, 2024, and incorporated by reference herein.
(19)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 9, 2022, and incorporated by reference herein.
(20)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 November 13, 2024, and incorporated by reference herein.
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81
(21)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 November 13, 2024, and incorporated by reference herein.
(22)Previously filed as Exhibit 10.13 to the Registrant’s Annual Report on Form 10-K (File No. 001-36177), filed with the
Commission on March 27, 2024, and incorporated by reference herein.
(23)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.
(24)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.
(25)Previously filed as Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K (File No. 001-36177), filed with the
Commission on March 27, 2024, and incorporated by reference herein.
(26)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 April 21, 2023, and incorporated by reference herein.
(27)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.
(28)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 April 28, 2022, and incorporated by reference herein.
(29)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 March 27, 2024, and incorporated by reference herein.
(30)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 October 29, 2024, and incorporated by reference herein.
(31)Previously filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the
Commission on October 29, 2024, and incorporated by reference herein.
(32)Previously filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the
Commission on October 29, 2024, and incorporated by reference herein.
(33)Previously filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the
Commission on October 29, 2024, and incorporated by reference herein.
(34)Previously filed as Exhibit 10.5 to the Registrant’s Current Report on Form 8-K (File No. 001-36177), filed with the
Commission on October 29, 2024, and incorporated by reference herein.
(35)Previously filed as Exhibit 97.1 to the Registrant’s Annual Report on Form 10-K (File No. 001-36177), filed with the
Commission on March 27, 2024, and incorporated by reference herein.
ITEM 16. FORM 10-K SUMMARY
Not applicable.
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82
SIGNATURES
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.
GLYCOMIMETICS, INC.
By: /s/ Harout Semerjian
Harout Semerjian
President and Chief Executive Officer
February 13, 2025
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
President, Chief Executive Officer and Director
(Principal Executive Officer)
February 13, 2025
/s/ Brian M. Hahn
Brian M. Hahn
Chief Financial Officer
(Principal Financial Officer and Principal Accounting
Officer)
February 13, 2025
/s/ Patricia S. Andrews
Patricia S. Andrews
Director
February 13, 2025
/s/ Mark A. Goldberg, M.D.
Mark A. Goldberg, M.D.
Director
February 13, 2025
/s/ Scott T. Jackson
Scott T. Jackson
Director
February 13, 2025
/s/ Daniel M. Junius
Daniel M. Junius
Director
February 13, 2025
/s/ Rachel K. King
Rachel K. King
Director
February 13, 2025
/s/ Scott Koenig, M.D., Ph.D.
Scott Koenig, M.D., Ph.D.
Director
February 13, 2025
/s/ Timothy Pearson
Timothy Pearson
Director
February 13, 2025
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83
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)
84
Balance Sheets as of December 31, 2024 and 2023
85
Statements of Operations and Comprehensive Loss for the years ended December 31, 2024 and 2023
86
Statements of Stockholders’ Equity for the years ended December 31, 2024 and 2023
87
Statements of Cash Flows for the years ended December 31, 2024 and 2023
88
Notes to Financial Statements
89
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84
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, 2024 and
2023, the related statements of operations and comprehensive loss, stockholders’ equity and cash flows for each of the two
years in the period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period
ended December 31, 2024, 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 incurred recurring losses from operations and has
stated that substantial doubt exists about the Company’s ability to continue as a going concern. 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 Matters
Critical audit matters are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the
financial statements and (2) involved our especially challenging, subjective or complex judgments. We determined that
there are no critical audit matters.
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2011.
Baltimore, Maryland
February 13, 2025
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85
GLYCOMIMETICS, INC.
Balance Sheets
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
10,720,178
$
41,792,830
Prepaid expenses and other current assets
371,276
1,997,904
Total current assets
11,091,454
43,790,734
Prepaid research and development expenses
—
603,737
Operating lease right-of-use asset
—
767,828
Other assets
—
154,176
Total assets
$
11,091,454
$
45,316,475
Liabilities & stockholders’ equity
Current liabilities:
Accounts payable
$
329,304
$
868,115
Accrued expenses
5,381,744
5,225,557
Lease liabilities
66,844
741,558
Total current liabilities
5,777,892
6,835,230
Lease liabilities, net of current portion
—
66,844
Total liabilities
5,777,892
6,902,074
Stockholders’ equity:
Preferred stock; $0.001 par value; 5,000,000 shares authorized, no shares issued
and outstanding at December 31, 2024 and December 31, 2023
—
—
Common stock; $0.001 par value; 150,000,000 shares authorized at December
31, 2024; 100,000,000 shares authorized at December 31, 2023; 64,483,958
shares issued and outstanding at December 31, 2024; 64,393,744 shares issued
and outstanding at December 31, 2023
64,484
64,394
Additional paid-in capital
499,613,448
494,835,219
Accumulated deficit
(494,364,370)
(456,485,212)
Total stockholders’ equity
5,313,562
38,414,401
Total liabilities and stockholders’ equity
$
11,091,454
$
45,316,475
See accompanying notes.
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86
GLYCOMIMETICS, INC.
Statements of Operations and Comprehensive Loss
Year Ended December 31,
2024
2023
Revenue from collaboration and license agreements
$
—
$
10,000
Costs and expenses:
Research and development expense
14,259,756
20,071,656
General and administrative expense
18,249,318
19,213,637
Restructuring and asset impairment charges
7,530,304
—
Total costs and expenses
40,039,378
39,285,293
Loss from operations
(40,039,378)
(39,275,293)
Other income
Gain on sale of asset
1,224,945
—
Interest income
935,275
2,375,873
Total other income
2,160,220
2,375,873
Net loss and comprehensive loss
$ (37,879,158) $ (36,899,420)
Basic and diluted net loss per common share
$
(0.59) $
(0.58)
Basic and diluted weighted-average number of common shares outstanding
64,477,249
63,342,465
See accompanying notes.
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87
GLYCOMIMETICS, INC.
Statements of Stockholders’ Equity
Additional
Total
Common Stock
Paid-In
Accumulated
Stockholders’
Shares
Amount
Capital
Deficit
Equity
Balance at December 31, 2022
54,377,798 $ 54,378 $ 462,461,251 $ (419,585,792)$ 42,929,837
Issuance of common stock, net of issuance costs
9,822,930
9,823
28,697,188
— 28,707,011
Issuance of common stock for services
24,001
24
35,976
—
36,000
Exercise of options and vesting of restricted stock units
169,015
169
116,328
—
116,497
Stock-based compensation
—
3,524,476
3,524,476
Net loss
—
—
—
(36,899,420) (36,899,420)
Balance at December 31, 2023
64,393,744
64,394
494,835,219
(456,485,212)
38,414,401
Issuance of common stock for services
28,383
28
75,347
—
75,375
Exercise of options and vesting of restricted stock units
61,831
62
5,336
—
5,398
Stock-based compensation
—
—
4,697,546
—
4,697,546
Net loss
—
—
—
(37,879,158) (37,879,158)
Balance at December 31, 2024
64,483,958 $ 64,484 $ 499,613,448 $ (494,364,370)$
5,313,562
See accompanying notes.
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88
GLYCOMIMETICS, INC.
Statements of Cash Flows
Year Ended December 31,
2024
2023
Operating activities
Net loss
$ (37,879,158)
$ (36,899,420)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation
35,174
153,301
Loss on disposal of property and equipment
46,654
8,627
Asset impairment
365,179
—
Non-cash lease expense
402,649
856,238
Issuance of common stock for services
75,375
36,000
Stock-based compensation
4,697,546
3,524,476
Changes in assets and liabilities:
Prepaid expenses and other assets
1,678,948
846,182
Prepaid research and development expenses
603,737
(553,737)
Accounts payable
(538,811)
(102,076)
Accrued expenses
156,187
(1,766,449)
Lease liabilities
(741,558)
(983,045)
Net cash used in operating activities
(31,098,078)
(34,879,903)
Investing activities
Purchases of property and equipment
(9,972)
(21,394)
Proceeds from sales of property and equipment
30,000
—
Net cash provided by (used in) investing activities
20,028
(21,394)
Financing activities
Proceeds from issuance of common stock, net of issuance costs
—
28,707,011
Proceeds from exercise of stock options
5,398
116,497
Net cash provided by financing activities
5,398
28,823,508
Net change in cash and cash equivalents
(31,072,652)
(6,077,789)
Cash and cash equivalents, beginning of period
41,792,830
47,870,619
Cash and cash equivalents, end of period
$ 10,720,178
$ 41,792,830
See accompanying notes.
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89
GLYCOMIMETICS, INC.
Notes to Financial Statements
1. Description of the Business
GlycoMimetics, Inc. (the Company), a Delaware corporation, was incorporated in 2003. The Company was
previously 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 cancers and inflammation. In July 2024, following feedback from the U.S. Food and Drug Administration
(FDA), the Company determined that the regulatory path forward for its lead product candidate, uproleselan, for the
treatment of relapsed and refractory acute myeloid leukemia would require an additional clinical trial. The decision to not
conduct an additional clinical trial did not relate to any safety or medical issues or negative regulatory feedback related to
the Company’s programs. In order to conserve its cash resources, in July 2024 the Company reduced its workforce by
approximately 80%. The Company also initiated a strategic review of its business in an effort to maximize shareholder
value.
Following the strategic review, on October 28, 2024 the Company entered into an Agreement and Plan of Merger
and Reorganization (the Merger Agreement) with Crescent Biopharma, Inc., a Delaware corporation (Crescent), pursuant to
which Crescent will become a wholly owned subsidiary of the Company (the Merger). Upon completion of the Merger, the
Company plans to operate under the name Crescent Biopharma, Inc. The Merger is expected to close in the second quarter
of 2025, subject to certain closing conditions, including, among other things, approval by the stockholders of each company
and the satisfaction of customary closing conditions.
Concurrently with the execution and delivery of the Merger Agreement, certain institutional and accredited investors
have entered into a securities purchase agreement (the Purchase Agreement) with the Company, pursuant to which they
have agreed, subject to the terms and conditions of such agreements, to purchase, immediately following the consummation
of the Merger, shares of the Company’s common stock and pre-funded warrants (together, the PIPE Securities) for an
aggregate purchase price of approximately $200.0 million in a private placement (the Private Placement). The closing of
the Private Placement is conditioned on the satisfaction or waiver of the conditions set forth in the Merger Agreement (in
addition to other customary closing conditions) and is expected to occur immediately following the closing of the Merger.
Pursuant to the exchange ratio formula set forth in the Merger Agreement, upon the closing of the Merger (but prior
to closing of the Private Placement described below), on a pro forma basis and based upon the number of shares of
common stock of the Company expected to be issued in the Merger, pre-Merger Crescent stockholders will own
approximately 86.2% of the combined company and pre-Merger stockholders of the Company will own approximately
13.8% of the combined company. After giving further effect to the Private Placement, the pre-Merger Crescent
stockholders (inclusive of those investors participating in the Private Placement) are expected to own approximately 96.9%
of the combined company and the pre-Merger stockholders of the Company are expected to own approximately 3.1% of the
combined company. The exchange ratio will be adjusted to the extent that the Company’s net cash at closing of the Merger
is less than $1.0 million and will be based on the amount of proceeds actually received by the Company in the Private
Placement.
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 2024, the Company incurred a net
loss of $37.9 million and had net cash flows used in operating activities of $31.1 million. At December 31, 2024, the
Company had $10.7 million in cash and cash equivalents and had no committed source of additional funding other than the
expected Private Placement. Management believes that given the Company’s current cash position and forecasted negative
cash flows from operating activities over the next twelve months, 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 the closing of
the contemplated Merger and Private Placement.
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If the contemplated Merger and Private Placement does not close by the second quarter of 2025, the Company may
seek other strategic alternatives or liquidate.
The accompanying 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).
Restructuring Charges
The Company recognizes restructuring charges related to reorganization plans that have been implemented by
management. In connection with these activities, the Company records restructuring charges, as applicable, at fair value
for:
●
contractual or other employee termination benefits provided that the obligations result from services already
rendered based on rights that vest or accumulate when the payment of benefits becomes probable and the amount
can be reasonably estimated;
●
one-time employee termination benefits to the employees provided that management has committed to a plan of
termination, the plan identifies the employees and their expected termination dates, the detail of termination
benefits are complete, and it is unlikely that changes to the plan will be made or the plan will be withdrawn;
●
contract termination costs when the Company cancels a contract in accordance with its terms; and
●
costs to be incurred over the remaining contract term without economic benefit to the Company at the cease-use
date.
For one-time employee terminations benefits, the Company recognizes the liability in full on the communication date
when future services are not required or amortizes the liability ratably over the service period, if required. The fair value of
termination benefits reflects the Company’s estimate of expected utilization of certain Company-funded post-employment
benefits.
As described in Note 13, during the year ended December 31, 2024, the Company incurred severance charges of $7.0
million in connection with a corporate restructuring, including a reduction in headcount.
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. The Company’s chief operating
decision maker is the president and chief executive officer.
The Company has not generated any product revenue since inception. The Company has no ongoing operations, is
not actively performing any research and development, and is preserving cash until the contemplated Merger and Private
Placement. If the contemplated Merger and Placement does not close by the second quarter of 2025, the Company may
seek other strategic alternatives or liquidate. As of December 31, 2024, the Company had no material assets besides cash
and cash equivalents and only had six employees.
The accounting policies of the Company’s single reportable segment are the same as those described in Note 3.
The chief operating decision maker assesses performance and decides how to allocate resources based on net income
(loss) that is reported on the statement of operations and comprehensive loss as net income (loss). The segment-
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91
level financial information is the same as the financial information presented in the statement of operations and
comprehensive loss.
The measure of segment assets is reported on the balance sheet as total assets.
Net income (loss) is used to monitor budget versus actual results. The monitoring of budgeted versus actual results
are used in assessing performance of the segment.
The Company does not have intra-entity sales or transfers.
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 expenses during the reporting periods. Although actual results could differ
from those estimates, management does not believe that such differences would be material.
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, 2024 and 2023, 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, 2024 and 2023. The carrying value of cash held in money market funds of
approximately $8.3 million and $38.8 million as of December 31, 2024 and 2023, 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, 2024 and 2023.
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92
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. The Company maintains its cash balances with financial institutions in
federally insured accounts and has cash balances in excess of the insurance limits. Cash equivalents consist of investment
in United States government money market funds with major financial institutions. These deposits and funds may be
redeemed upon demand and the Company does not anticipate any losses on such balances. The Company has not
experienced any losses to date and believes that it is not exposed to any significant credit risk on cash and cash equivalents.
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.
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. The Company bases the expected
volatility on the historical volatility of the Company’s publicly traded common stock.
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
recorded 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
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93
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, 2024 and 2023, the Company’s net loss was equal to comprehensive loss and, accordingly, no
additional disclosure is presented.
Recently Adopted Accounting Pronouncements
In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU)
2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to provide
enhanced segment disclosures. The standard will require disclosures about significant segment expenses and other segment
items and identifying the Chief Operating Decision Maker and how they use the reported segment profitability measures to
assess segment performance and allocate resources. These enhanced disclosures are required for all entities on an interim
and annual basis, even if they have only a single reportable segment. The standard is effective for years beginning after
December 15, 2023, and interim periods within annual periods beginning after December 15, 2024 and early adoption is
permitted. The Company adopted this standard for the year ended December 31, 2024 and the primary impact of which was
the additional segment disclosures included in Note 3.
Recent Accounting Pronouncements
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax
Disclosures, which is intended to provide enhancements to annual income tax disclosures. The standard will require more
detailed information in the rate reconciliation table and for income taxes paid, among other enhancements. The standard is
effective for years beginning after December 15, 2024 and early adoption is permitted. The Company is evaluating this
standard to determine if adoption will have a material impact on the Company’s financial statements.
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—
Expense Disaggregation Disclosures (Subtopic 220-40), which requires disclosure, in the notes to the financial statements,
of specified information about certain costs and expenses. This ASU is effective for public entities for annual reporting
periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The
Company is currently evaluating the impact ASU 2024-03 will have on its consolidated 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:
2024
2023
Stock options and RSUs
15,043,815
10,981,357
5. Prepaid Expenses and Other Current Assets
The following is a summary of the Company’s prepaid expenses and other current assets at December 31:
2024
2023
Prepaid research and development expenses
$
—
$
1,420,642
Other prepaid expenses
234,696
401,442
Other assets
136,580
175,820
Prepaid expenses and other current assets
$
371,276
$
1,997,904
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94
6. Accrued Expenses
The following is a summary of the Company’s accrued expenses at December 31:
2024
2023
Accrued research and development expenses
$
51,306
$
1,824,689
Accrued bonuses
—
2,561,913
Accrued consulting and other professional fees
790,250
439,192
Accrued employee benefits
3,825
399,763
Accrued retention
1,049,105
—
Accrued severance
3,487,258
—
Accrued expenses
$
5,381,744
$
5,225,557
7. Operating Leases
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 leased office and research space in Rockville, Maryland under an operating lease that was subject to
annual rent increases (the Lease). The Company paid a security deposit of $52,320 to be held until the expiration or
termination of the Company’s obligations under the Lease. In April 2023, the Company and its landlord entered into an
amendment to the Lease (the Lease Amendment). Pursuant to the Lease Amendment, the Company and the landlord agreed
that the lease term for a portion of the premises, consisting of approximately 30,000 square feet, would be extended from
November 1, 2023 to January 31, 2025. However, pursuant to the Company’s strategic review and restructuring plan
adopted during the year ended December 31, 2024, the Company abandoned the leased space and determined that its right-
of-use-asset was fully impaired. As a result, the Company recognized an impairment charge of $0.4 million, during the year
ended December 31, 2024, representing the carrying value of the right-of-use asset. The Company’s lease of the remaining
premises, consisting of approximately 12,000 square feet, expired on October 31, 2023. There were no additional operating
leases as of the year ended December 31, 2024.
The components of lease expense and related cash flows were as follows:
Year Ended December 31,
2024
2023
Operating lease cost
$
450,274
$
944,963
Variable lease cost
516,344
602,416
Total operating lease cost
$
966,618
$
1,547,379
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases
$
789,183
$
1,017,770
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95
Maturities of lease liability due under these lease agreements as of December 31, 2024 were as follows:
Operating Lease
Obligation
2025
$
67,401
Thereafter
—
Total
67,401
Present value adjustment
(557)
Present value of lease payments
$
66,844
Supplemental information related to leases were as follows:
December 31,
December 31,
Operating Leases
2024
2023
Weighted-average remaining lease term (in years)
0.1
1.1
Weighted-average incremental borrowing rate
10.0%
10.0%
Year Ended December 31,
2024
2023
Right-of-use assets obtained in exchange for operating lease obligations
$
-
$
872,892
8. Stockholders’ Equity
Common Stock
During the year ended December 31, 2024, the Company’s board of directors adopted, and its stockholders approved,
an increase in the total authorized shares of common stock from 100,000,000 to 150,000,000 shares with a par value of
$0.001 per share.
At-The-Market Equity Offerings
In March 2022, the Company filed a shelf registration statement with the SEC, which was declared effective on April
22, 2022. On April 28, 2022, the Company entered into an at-the-market sales agreement (the Sales Agreement) with
Cowen and Company, LLC. Under the Sales Agreement, the Company may sell up to $100.0 million worth of shares of
common stock. During the year ended December 31, 2023, the Company issued and sold 9,822,930 shares of common
stock under the Sales Agreement at a weighted average price per share of $3.01, for aggregate net proceeds of $28.7
million, after deducting commissions and offering expenses. There were no shares issued under the 2022 Sales Agreement
during the year ended December 31, 2024. As of December 31, 2024, approximately $66.0 million remained available to
be sold under the terms of the Sales Agreement. The shelf registration statement will expire on April 28, 2025.
9. Stock-based Compensation
2013 Equity Incentive Plan
The Company’s board of directors adopted, and its stockholders approved, its 2013 Equity Incentive Plan effective in
January 2014, and the 2013 Equity Incentive Plan was amended and restated by approval of the board of directors in April
2022 and by approval of the stockholders in May 2022 (as so amended and restated, the 2013 Plan). 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 (RSUs), 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
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96
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 originally
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. Upon the amendment
and restatement of the 2013 Plan in May 2022, the existing share reserve was increased by 2,619,622. Beginning on
January 1, 2023 and ending on (and including) January 1, 2029, the maximum number of shares of common stock that may
be issued under the 2013 Plan will cumulatively be increased by 4% of the number of shares of common stock issued and
outstanding on the immediately preceding December 31, or such lesser number of shares as determined by the board of
directors or the compensation committee thereof. The maximum number of shares that may be issued pursuant to exercise
of incentive stock options under the 2013 Plan is 20,000,000. As of December 31, 2024, the total number of shares reserved
for issuance under the 2013 Plan was 14,257,627 shares, of which 1,070,346 shares were available for future grants.
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
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, 2024 is as
follows:
WEIGHTED-
AGGREGATE
WEIGHTED-
AVERAGE
INTRINSIC
AVERAGE
REMAINING
VALUE
OUTSTANDING
EXERCISE
CONTRACTUAL
(IN
OPTIONS
PRICE
TERM (YEARS) THOUSANDS)
Outstanding as of December 31, 2023
8,273,800
$
5.29
6.3
Options granted
5,756,875
1.85
Options exercised
(3,250)
1.66
Options forfeited
(1,722,543)
6.58
Outstanding as of December 31, 2024
12,304,882
3.50
7.4
$
—
Vested or expected to vest as of December 31, 2024
6,561,952
5.06
6.0
—
Exercisable as of December 31, 2024
6,024,978
5.33
5.7
—
As of December 31, 2024, there was $915,970 of total unrecognized compensation expense related to unvested
options that will be recognized over a weighted-average period of approximately 0.3 years. The total fair value of options
that vested in the years ended December 31, 2024 and 2023 was $2,919,122 and $1,710,938, respectively. During 2024, the
Company issued 3,250 shares of common stock in conjunction with exercises of stock options granted under the 2013 Plan
and received $5,398 in cash proceeds from the exercise of these stock options. During 2023, the Company issued 100,960
shares of common stock in conjunction with exercises of stock options granted under the 2013 Plan and received $116,497
in cash proceeds from the exercise of these stock options. Total intrinsic value of the options exercised during the years
ended December 31, 2024 and 2023 was $4,091 and $82,300, respectively.
The Company has granted stock options to purchase an aggregate of 2,459,275 shares to certain employees under
the 2013 Plan, the vesting of which is subject to performance vesting conditions relating to the achievement of specified
regulatory or commercial milestones. The maximum fair value of $650,266 associated with performance-based options
granted under the 2013 Plan has been excluded from compensation expense as the completion of the performance
milestones was not deemed to be probable as of December 31, 2024.
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97
Restricted Stock Units (RSUs)
An 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, provided that the employee remains employed by the
Company at the applicable vesting date. Compensation expense is recognized on a straight-line basis. As of December 31,
2024, there was $9,541 of total unrecognized compensation expense associated with these RSU grants that will be
recognized entirely in the first quarter of 2025.
The following is a summary of RSU activity for the 2013 Plan for the year ended December 31, 2024:
Weighted-Average
Number of Shares
Grant Date
Underlying RSUs
Fair Value
Unvested at December 31, 2023
117,157
$
3.81
Forfeited
(58,581)
3.81
Vested
(10,443)
3.81
Unvested at December 31, 2024
48,133
3.81
Issuance of Shares to Directors in Lieu of Cash Compensation
In March 2023, the Company’s board of directors amended the Company’s Non-Employee Director Compensation
Policy to include an election to receive unrestricted shares of common stock in lieu of quarterly board and committee
retainer cash payments. The number of shares to be issued to an electing director is determined on the last day of each
fiscal quarter by dividing the dollar amount of the compensation to be paid for such quarter that is subject to the election by
the closing price of a share of common stock on the last trading day of the fiscal quarter, rounded up to the nearest whole
share. Non-employee directors who made such an election received 13,127 shares of common stock in lieu of cash
compensation earned for the quarter ended March 31, 2024. All shares of common stock issued pursuant to such an election
were fully vested upon issuance and are classified as “Other Awards” under the 2013 Plan.
In June 2024, the Non-Employee Director Compensation Policy was amended to allow a director to revoke his or her
annual election to receive unrestricted shares of common stock in lieu of quarterly board and committee retainer cash
payments. The decision to amend the policy followed a significant decline in the market value of the Company’s common
stock in May 2024. Without the ability of the directors to revoke the prior elections, the Company would have been
obligated to issue a significantly greater number of shares than in prior quarters in lieu of the fixed cash retainer payments.
Each of the directors who previously elected to receive unrestricted shares of common stock in lieu of quarterly board and
committee retainer cash payments for 2024 revoked their elections in June 2024, and as a result there were no additional
shares issued subsequent to March 31, 2024.
Inducement Plan
The Company’s board of directors previously adopted the GlycoMimetics, Inc. Inducement Plan (as amended to date,
the Inducement Plan). The Inducement Plan provides for the grant of nonstatutory stock options, restricted stock awards,
RSU awards, stock appreciation rights and other forms of stock awards to individuals not previously an 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. The Inducement Plan was amended by the board of directors on multiple occasions to increase
the number of shares reserved for issuance to 3,000,000 shares as of December 31, 2024. As of December 31, 2024, there
were 299,108 shares available for future grants under the Inducement Plan.
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98
A summary of the Company’s stock option activity under the Inducement Plan for the year ended December 31, 2024
is as follows:
WEIGHTED-
AGGREGATE
WEIGHTED-
AVERAGE
INTRINSIC
AVERAGE
REMAINING
VALUE
OUTSTANDING
EXERCISE
CONTRACTUAL
(IN
OPTIONS
PRICE
TERM (YEARS) THOUSANDS)
Outstanding as of December 31, 2023
2,590,400
$
1.97
8.0
Options granted
130,000
3.20
Options forfeited
(29,600)
3.85
Outstanding as of December 31, 2024
2,690,800
2.01
7.1
$
—
Vested or expected to vest as of December 31, 2024
1,610,833
1.96
6.9
—
Exercisable as of December 31, 2024
1,452,908
1.95
7.0
—
As of December 31, 2024, there was $235,087 of total unrecognized compensation expense related to unvested
options under the Inducement Plan that will be recognized over a weighted-average period of approximately 0.3 years.
There were no options exercised under the Inducement Plan during the years ended December 31, 2024 or 2023. The total
fair value of options that vested in the years ended December 31, 2024 and 2023 was $919,184 and $601,586, respectively.
The Company has granted stock options to purchase an aggregate of 584,200 shares to certain newly hired employees
under the Inducement Plan which options are subject to performance-based conditions. The maximum fair value of
$825,353 associated with the performance-based options is excluded from the unrecognized compensation expense under
the Inducement Plan as the completion of the performance milestones was not probable as of December 31, 2024.
The weighted-average fair value of the options granted under all equity incentive plans during the years ended
December 31, 2024 and 2023 was $1.49 and $1.96 per share, respectively, applying the Black-Scholes-Merton option
pricing model utilizing the following weighted-average assumptions:
2024
2023
Expected term
6.25 years
6.25 years
Expected volatility
101.79%
78.36%
Risk-free interest rate
4.17%
3.60%
Expected dividend yield
0%
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:
2024
2023
Research and development expense
$
1,271,655
$
909,981
General and administrative expense
3,425,891
2,614,495
Total stock-based compensation expense
$
4,697,546
$
3,524,476
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99
10. Income Taxes
The components of the gross deferred tax asset and related valuation allowance at December 31 were as follows:
2024
2023
Deferred income tax assets:
Net operating loss carryforward
$
96,811,786
$
88,746,869
Research and orphan drug credits
54,937,994
53,152,849
Capitalized research costs
11,861,613
10,748,355
Capitalized start-up costs
339,138
532,931
Patent amortization
27,071
42,541
Stock-based compensation
6,699,628
7,324,617
Accrued bonus
25,356
704,974
Operating lease liabilities
18,394
222,452
Other
1,303
87,097
Gross deferred income tax assets
170,722,283
161,562,685
Valuation allowance
(170,722,283)
(161,351,398)
Net deferred income tax assets
—
211,287
Deferred income tax liabilities:
Operating lease right-of-use assets
—
(211,287)
Gross deferred income tax liabilities
—
(211,287)
Net deferred income tax asset/(liability)
$
—
$
—
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 was recorded as of December 31, 2024 and 2023.
As of December 31, 2024, the Company had $351.8 million of U.S. Federal and state net operating losses, $10.9
million of research and development tax credits and $44.1 million of orphan drug tax credits available to carry forward. A
portion of the net operating loss carryforwards will begin to expire in 2025, the research and development tax credits in
2025 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 to
utilize its net operating losses and credits. As of December 31, 2024, the Company does not believe that an ownership
change has occurred. Any future ownership changes, such as the consummation of the Merger, 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 the State of Maryland is the only
significant state jurisdiction. The Company’s federal income tax returns for tax years 2005 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 2007 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 is not currently
under examination from any taxing authorities.
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100
The Company did not have unrecognized tax benefits as of December 31, 2024 and 2023, 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:
2024
2023
U.S. Federal statutory tax rate
21.0 %
21.0 %
State taxes
5.9
6.3
Research credit
0.4
0.7
Orphan drug credit
4.1
4.1
Stock-based compensation
(5.1)
2.3
Executive compensation
(1.2)
(0.1)
Other
(0.4)
(3.5)
Change in valuation allowance
(24.7)
(30.8)
Provision for income taxes
— %
— %
11. License and Collaboration Agreements
Apollomics
In 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.
The Company did not recognize any milestone revenue under the Agreement for the years ended December 31, 2024
or 2023.
The Company and Apollomics also entered into a clinical supply agreement pursuant to which the Company agreed to
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. The Company did not recognize any revenue under the
clinical supplies agreement during the years ended December 31, 2024 or 2023.
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, 2024, 2023 and 2022, 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 $211,000 and $248,000 for the years ended December 31, 2024 and 2023, respectively.
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101
13. Restructuring and Asset Impairment Charges
In July 2024, the Company’s Board of Directors approved a streamlined operating plan that included a reduction in
the Company’s workforce by 26 employees, or approximately 80% of its headcount.
Employees affected by the reduction in force are entitled to receive severance payments and Company-funded
medical insurance for a specific time. During the year ended December 31, 2024, the Company recognized $7.0 million of
charges for severance and related benefits.
The following is a summary of the activity for accrued severance costs for the year ended December 31, 2024:
2024
Severance accrual, January 1
$
—
Charges
7,026,614
Cash payments
(3,539,356)
Severance accrual, December 31
$
3,487,258
The accrued severance liability of $3.5 million is payable within the next twelve months and has been included in
accrued expenses on the balance sheet as of December 31, 2024.
The Company also completed an evaluation of the impact of the restructuring on the carrying value of its long-lived
assets. Our evaluation determined that indicators of impairment were present within right-of-use assets and property and
equipment. Where impairment indicators existed the Company evaluated the identified asset group and separately
compared the estimated undiscounted cash flow for each asset group to the net book value of the related long-term asset.
The Company calculated the amount of the impairment by developing a fair value estimate of the asset group that was
compared to the carrying value.
The Company recorded $0.4 million of impairment charges related to its facility operating lease and accelerated
depreciation on property and equipment during the year ended December 31, 2024.
Exhibit 4.2
DESCRIPTION OF CERTAIN OF REGISTRANT’S SECURITIES
General
The following is a summary of information concerning the capital stock of GlycoMimetics, Inc. The summaries and descriptions below
do not purport to be complete statements of the relevant provisions of our amended and restated certificate of incorporation (our “restated
certificate”) and amended and restated bylaws (our “restated bylaws”), and are entirely qualified by these documents.
Authorized Capital Stock
Our restated certificate authorizes us to issue up to 150,000,000 shares of common stock, $0.001 par value per share, and 5,000,000
shares of preferred stock, $0.001 par value per share. Our board of directors may establish the rights and preferences of the preferred
stock from time to time.
Description of Common Stock
Voting Rights
Each holder of our common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including
the election of directors. Under the restated certificate and our restated bylaws, our stockholders do not have cumulative voting rights.
Because of this, the holders of a majority of the shares of our common stock entitled to vote in any election of directors can elect all of
the directors standing for election, if they should so choose.
Dividends
Subject to preferences that may be applicable to any then-outstanding shares of preferred stock, holders of common stock are entitled to
receive ratably those dividends, if any, as may be declared from time to time by the board of directors out of legally available funds.
Liquidation
In the event of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets
legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any
liquidation preference granted to the holders of any then-outstanding shares of preferred stock.
Rights and Preferences
Holders of common stock have no preemptive, conversion or subscription rights and there are no redemption or sinking fund provisions
applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to, and may be
adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate in the future.
Description of Preferred Stock
Our board of directors has the authority, without further action by our stockholders, to issue up to 5,000,000 shares of preferred stock in
one or more series, to establish from time to time the number of shares to be included in each such series, to fix the rights, preferences
and privileges of the shares of each wholly unissued series and any qualifications, limitations or restrictions thereon, and to increase or
decrease the number of shares of any such series, but not below the number of shares of such series then outstanding.
Our board of directors may authorize the issuance of preferred stock with voting or conversion rights that could adversely affect the
voting power or other rights of the holders of our common stock. The purpose of authorizing our board of directors to issue preferred
stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The
issuance of preferred stock, while providing flexibility in connection with possible acquisitions and other corporate purposes, could,
among other things, have the effect of delaying, deferring or preventing a change in control of us and may adversely affect the market
price of our common stock and the voting and other rights of the holders of our common stock. It is not possible to state the actual effect
of the issuance of any shares of preferred stock on the rights of holders of common stock until the board of directors determines the
specific rights attached to that preferred stock.
In connection with the proposed merger between us and Crescent Biopharma, Inc., our board of directors is expected to designate shares
of our preferred stock, to be designated as the Series A Preferred Stock.
Holders of the Series A Preferred Stock will be entitled to receive dividends equal to, on an as-if-converted-to-our common stock basis,
and in the same form as dividends actually paid on shares of our common stock. Except as otherwise required by law, the Series A
Preferred Stock will not have voting rights. However, as long as any shares of Series A Preferred Stock are outstanding, we will not,
without the affirmative vote of the holders of a majority of the then outstanding shares of the Series A Preferred Stock, (a) alter or change
adversely the powers, preferences or rights given to the s Series A Preferred Stock, (b) alter or amend the certificate of designation of the
Series A Preferred Stock, (c) amend our restate certificate or restated bylaws in any manner that adversely affects any rights of the
holders of the Series A Preferred Stock, (d) file any articles of amendment, certificate of designations, preferences, limitations and
relative rights of any series of Preferred Stock (as defined in the certificate of designation for the Series A Preferred Stock), if such action
would adversely alter or change the preferences, rights, privileges or powers of, or restrictions provided for the benefit of the Series A
Preferred Stock, (e) issue further shares of the Series A Preferred Stock or increase or decrease (other than by conversion) the number of
authorized shares of the Series A Preferred Stock, (f) at any time while at least 30% of the originally issued Series A Preferred Stock
remains issued and outstanding, consummate either (A) a Fundamental Transaction (as defined in the certificate of designation of the
Series A Preferred Stock) or (B) any merger or consolidation or other business combination in which our stockholders immediately
before such transaction do not hold at least a majority of our capital stock immediately after such transaction, (g) increase the authorized
number of directors constituting our board of directors or change the number of votes entitled to be cast by any director or directors on
any matter or (h) enter into any agreement with respect to any of the foregoing. The Series A Preferred Stock will not have a preference
upon our liquidation, dissolution or winding-up.
At all times when at least 30% of the originally issued Series A Preferred Stock will remain issued and outstanding, (i) the holders of
Series A Preferred Stock, exclusively and voting together as a separate class on an as-converted to common stock basis, shall be entitled
to elect two (2) directors (the “Preferred Directors”); and (ii) the holders of our common stock and of any other class or series of voting
stock (including the Series A Preferred Stock), exclusively and voting together as a single class on an as-converted to Common Stock
basis, shall be entitled to elect the balance of the total number of directors. Any Preferred Director may be removed without cause only
by the affirmative vote of the holders of a majority of the Series A Preferred Stock. Each Preferred Director shall be entitled to three (3)
votes on each matter presented to our board of directors.
Subject to certain limitations and the completion of certain steps in connection with the proposed merger with Crescent, each share of
Series A Preferred Stock then outstanding shall be convertible, at any time and from time to time, at the option of the holder of the Series
A Preferred Stock, into a number of shares equal to 1,000 shares of common stock.
Anti-Takeover Provisions
Our restated certificate provides for our board of directors to be divided into three classes with staggered three-year terms. Only one class
of directors is elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective
three-year terms. Because our stockholders do not have cumulative voting rights, stockholders holding a majority of the shares of
common stock outstanding are able to elect all of our directors. The restated certificate and the restated bylaws also provide that directors
may be removed by the stockholders only for cause upon the vote of 66 2/3% or more of our outstanding common stock. Furthermore,
the authorized number of directors may be changed only by resolution of the board of directors, and vacancies and newly created
directorships on the board of directors may, except as otherwise required by law or determined by the board, only be filled by a majority
vote of the directors then serving on the board, even though less than a quorum.
The restated certificate and restated bylaws provide that all stockholder actions must be effected at a duly called meeting of stockholders
and eliminate the right of stockholders to act by written consent without a meeting. Our restated bylaws also provide that only our
chairman of the board, chief executive officer or the board of directors pursuant to a resolution adopted by a majority of the total number
of authorized directors may call a special meeting of stockholders.
The restated bylaws provide that stockholders seeking to present proposals before a meeting of stockholders to nominate candidates for
election as directors at a meeting of stockholders must provide timely advance notice in writing, and specify requirements as to the form
and content of a stockholder’s notice.
The restated certificate and restated bylaws provide that the stockholders cannot amend many of the provisions described above except
by a vote of 66 2/3% or more of our outstanding common stock.
The combination of these provisions makes it more difficult for our existing stockholders to replace our board of directors as well as for
another party to obtain control of us by replacing our board of directors. Since our board of directors has the power to retain and
discharge our officers, these provisions could also make it more difficult for existing stockholders or another party to effect a change in
management. In addition, the authorization of undesignated preferred stock makes it possible for our board of directors to issue preferred
stock with voting or other rights or preferences that could impede the success of any attempt to change our control.
These provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its policies
and to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to reduce our
vulnerability to hostile takeovers and to discourage certain tactics that may be used in proxy fights. However, such provisions could have
the effect of discouraging others from making tender offers for our shares and may have the effect of delaying changes in our control or
management. As a consequence, these provisions may also inhibit fluctuations in the market price of our stock that could result from
actual or rumored takeover attempts. We believe that the benefits of these provisions, including increased protection of our potential
ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure our company, outweigh the
disadvantages of discouraging takeover proposals, because negotiation of takeover proposals could result in an improvement of their
terms.
Choice of Forum
The restated certificate provides that the Court of Chancery of the State of Delaware will be the exclusive forum for:
●
any derivative action or proceeding brought on our behalf;
●
any action asserting a breach of fiduciary duty;
●
any action asserting a claim against us arising pursuant to the Delaware General Corporation Law, the restated certificate or the
restated bylaws; or
●
any action asserting a claim against us that is governed by the internal affairs doctrine.
The enforceability of similar choice of forum provisions in other companies’ certificates of incorporation has been challenged in legal
proceedings, and it is possible that, in connection with any action, a court could find the choice of forum provisions contained in our
restated certificate to be inapplicable or unenforceable in such action.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Equiniti (formerly known as the American Stock Transfer & Trust Company).
The transfer agent’s address is 48 Wall Street, 23rd floor, New York, NY 10043.
Nasdaq Global Market Listing
Our common stock is listed on the Nasdaq Capital Market under the symbol “GLYC.”
1.
Revised September 2020
Exhibit 19.1
GLYCOMIMETICS, INC.
INSIDER TRADING AND WINDOW PERIOD POLICY
(Revised September 2020)
I.
INTRODUCTION
This policy determines acceptable transactions in the securities of GLYCOMIMETICS, INC. (the
“Company”) by our employees, directors and consultants. During the course of your employment, directorship or
consultancy with the Company, you may receive “material” (discussed below) information that is not yet publicly
available about the Company or about other publicly-traded companies with which the Company has business
dealings (“inside information”). Because of your access to this inside information, you may be in a position to
profit financially by buying or selling, or in some other way dealing, in the Company’s stock, or stock of another
publicly-traded company, or to disclose such information to a third party who does so profit (a “tippee”).
II.
INSIDER TRADING POLICY
A. Securities Transactions
Use of inside information by someone for personal gain, or to pass on, or “tip,” the inside information to
someone who uses it for personal gain, is illegal, regardless of the quantity of shares, and is therefore prohibited.
You can be held liable both for your own transactions and for transactions effected by a tippee, or even a tippee of
a tippee. Furthermore, it is important that the appearance of insider trading in securities be avoided. The only
exception is that transactions directly with the Company, e.g., option exercises for cash or purchases under the
Company’s employee stock purchase plan, are permitted. However, the subsequent sale (including the sale of
shares in a cashless exercise program) or other disposition of such stock is fully subject to these restrictions.
B. Inside Information
As a practical matter, it is sometimes difficult to determine whether you possess inside information. The
key to determining whether nonpublic information you possess about a public company is inside information is
whether dissemination of the information would likely affect the market price of the company’s stock or would
likely be considered important, or “material,” by investors who are considering trading in that company’s stock.
Certainly, if the information makes you want to trade, it would probably have the same effect on others.
Remember, both positive and negative information can be material. If you possess inside information, you may
not trade in a company’s stock, advise anyone else to do so or communicate the information to anyone else until
you know that the information has been publicly disseminated. This means that in some circumstances, you may
have to forego a proposed transaction in a company’s securities even if you planned to execute the transaction
prior to learning of the inside information and even though you believe you may suffer an economic loss or
sacrifice an anticipated profit by
2.
Revised September 2020
waiting. “Trading” includes engaging in short sales, transactions in put or call options, hedging transactions and
other inherently speculative transactions.
Although by no means an all-inclusive list, information about the following items may be considered to be
inside information until it is publicly disseminated:
(a)
financial results or forecasts;
(b)
communications with government agencies;
(c)
strategic plans;
(d)
discovery and development of new drug candidates;
(e)
scientific, clinical or regulatory results;
(f)
acquisitions or dispositions of assets, divisions, companies, etc.;
(g)
pending public or private sales of debt or equity securities;
(h)
declaration of stock splits, dividends or changes in dividend policy;
(i)
major contract awards or cancellations;
(j)
top management or control changes;
(k)
possible tender offers or proxy fights;
(l)
significant writeoffs;
(m)
significant litigation;
(n)
impending bankruptcy;
(o)
gain or loss of a significant collaboration agreement or other contracts with partners, customers or
suppliers;
(p)
pricing changes or discount policies;
(q)
corporate partner relationships; and
(r)
notice of issuance of patents.
For information to be considered publicly disseminated, it must be widely disclosed through a press
release or SEC filing, and a sufficient amount of time must have passed to allow the information to be fully
disclosed. Generally speaking, information will be considered publicly disseminated after two full trading days
have elapsed since the date of public disclosure of the information. For example, if an announcement of inside
information of which you were aware was made prior to trading on Wednesday, then you may execute a
transaction in the
3.
Revised September 2020
Company’s securities on Friday. If an announcement of inside information of which you were aware was made
after the market closes on Wednesday, then you may execute a transaction in the Company’s securities the
following Monday.
C. Online Communications
You may not participate in chat rooms or other electronic discussion groups or contribute to blogs, bulletin
boards or social media forums (including Facebook, Instagram, Twitter, etc.) on the Internet concerning the
activities of the Company or other companies with which the Company does business, even if you do so
anonymously, unless doing so is part of your job responsibilities and you have explicit authorization from the
individual designated by the Company’s board of directors as the Clearing Officer (as defined below).
III.
STOCK TRADING BY DIRECTORS, OFFICERS AND OTHER EMPLOYEES
Because the officers and directors and certain members of management of the Company are the most
visible to the public and are most likely, in the view of the public, to possess inside information about the
Company, we require them to do more than refrain from insider trading and require that they notify, and receive
approval from, a Clearing Officer (as defined below) prior to engaging in transactions in the Company’s stock and
observe other restrictions designed to minimize the risk of apparent or actual insider trading. We also require that
employees limit their transactions in the Company’s stock to defined time periods following public dissemination
of quarterly and annual financial results.
A. Covered Insiders
The provisions outlined in this stock trading policy apply to all directors and employees of the Company.
Generally, any entities or family members whose trading activities are controlled or influenced by any of such
persons should be considered to be subject to the same restrictions.
B. Window Period
Generally, except as set forth in this paragraph B and in paragraphs C, D and G of this policy, directors and
employees may buy or sell securities of the Company only during a “window period” that opens after two full
trading days have elapsed after the public dissemination of the Company’s annual or quarterly financial results
and closes on the last trading day one week before the end of the quarter. This window period may be closed early
or may not open if, in the judgment of the Company’s Chief Executive Officer or Chief Financial Officer, there
exists undisclosed material information that would make trades inappropriate. It is important to note that the fact
that the window period has closed early or has not opened should be considered inside information. An employee
or director who believes that special circumstances require him or her to trade outside the window period should
consult with the Company’s Clearing Officer (as defined below). Permission to trade outside the window period
will be granted only where the circumstances are extenuating and there appears to be no significant risk that the
trade may subsequently be questioned.
C. Exceptions to Window Period
4.
Revised September 2020
1. Option Exercises. Directors and employees may exercise options for cash granted under the
Company’s stock option plans without restriction to any particular period. However, the subsequent sale of the
stock (including sales of stock in a cashless exercise) acquired upon the exercise of options is subject to all
provisions of this policy.
2. 10b5-1 Automatic Trading Programs. In addition, purchases or sales of the Company’s
securities made pursuant to, and in compliance with, a written plan established by a director or employee that
meets the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) (a “Trading Plan”) may be made without restriction to any particular period provided that (i) the Trading
Plan was established in good faith, in compliance with the requirements of Rule 10b5-1, at the time when such
individual was not in possession of inside information about the Company and the Company had not imposed any
trading blackout period, (ii) the Trading Plan was reviewed by the Company prior to establishment, solely to
confirm compliance with this policy and the securities laws and (iii) the Trading Plan allows for the cancellation
of a transaction and/or suspension of such Trading Plan upon notice and request by the Company to the individual
if any proposed trade (a) fails to comply with applicable laws (e.g., exceeding the number of shares that may be
sold under Rule 144) or (b) would create material adverse consequences for the Company. The Company must be
notified of the establishment of any such Trading Plan, any amendments to such Trading Plan and the termination
of such Trading Plan.
D. Pre-Clearance and Advance Notice of Transactions
In addition to the requirements of paragraph B above, officers and directors may not engage in any
transaction in the Company’s securities, including any purchase or sale in the open market, loan, or other transfer
of beneficial ownership without first obtaining pre-clearance of the transaction from the Company’s Chief
Financial Officer or his designee (each, a “Clearing Officer”). The Clearing Officer will then determine whether
the transaction may proceed and, if so, will direct the Compliance Coordinator (as identified in the Company’s
Section 16 Compliance Program) to assist in complying with the reporting requirements under Section 16(a) of
the Exchange Act, if any. Pre-cleared transactions not completed within 72 hours shall require new pre-clearance
under the provisions of this paragraph. The Company may, at its discretion, shorten such period of time.
Advance notice of gifts or an intent to exercise an outstanding stock option shall be given to a Clearing
Officer. To the extent possible, advance notice of upcoming transactions to be effected pursuant to an established
Trading Plan under Section III.C.2 above shall also be given to a Clearing Officer. Upon completion of any
transaction, the officer or director or other member of management must immediately notify the Compliance
Coordinator and any other individuals identified in Section 3 of the Company’s Section 16 Compliance Program
so that the Company may assist in any Section 16 reporting obligations.
E. Prohibition of Speculative or Short-term Trading
No employee or director may engage in short sales, transactions in put or call options, hedging
transactions, margin accounts or other inherently speculative transactions with respect to the Company’s stock at
any time.
5.
Revised September 2020
F. Short-Swing Trading/Control Stock/Section 16 Reports
Officers and directors subject to the reporting obligations under Section 16 of the Exchange Act should
take care not to violate the prohibition on short-swing trading (Section 16(b) of the Exchange Act) and the
restrictions on sales by control persons (Rule 144 under the Securities Act of 1933, as amended), and should file
all appropriate Section 16(a) reports (Forms 3, 4 and 5), which are enumerated and described in the Company’s
Section 16 Compliance Program, and any notices of sale required by Rule 144.
G. Prohibition of Trading During Pension Fund Blackouts
In accordance with Regulation BTR under the Exchange Act, no director or executive officer of the
Company shall, directly or indirectly, purchase, sell or otherwise acquire or transfer any equity security of the
Company (other than an exempt security) during any “blackout period’’ (as defined in Regulation BTR) with
respect to such equity security, if such director or executive officer acquires or previously acquired such equity
security in connection with his or her service or employment as a director or executive officer. This prohibition
shall not apply to any transactions that are specifically exempted from Section 306(a)(1) of the Sarbanes-Oxley
Act of 2002 (as set forth in Regulation BTR), including but not limited to, purchases or sales of the Company’s
securities made pursuant to, and in compliance with, a Trading Plan; compensatory grants or awards of equity
securities pursuant to a plan that, by its terms, permits executive officers and directors to receive automatic grants
or awards and specifies the terms of the grants and awards; acquisitions or dispositions of equity securities
involving a bona fide gift or by will or the laws of descent or pursuant to a domestic relations order; etc. The
Company shall timely notify each director and executive officer of any blackout periods in accordance with the
provisions of Regulation BTR.
IV.
Duration of Policy’s Applicability
If you are in possession of inside information when your employment or directorship with the Company
terminates, you may not transact in the Company’s stock or the stock of other public companies engaged in
business transactions with the Company until such time as such information has been publicly disseminated or is
no longer material.
V.
Penalties
Anyone who effects transactions in the Company’s stock or the stock of other public companies engaged
in business transactions with the Company (or provides inside information to enable others to do so) on the basis
of inside information is subject to both civil liability and criminal penalties, as well as disciplinary action by the
Company. An employee, director or consultant who has questions about this policy should contact his or her own
attorney or the Clearing Officer of the Company.
6.
Revised September 2020
GLYCOMIMETICS, INC.
INSIDER TRADING AND WINDOW PERIOD POLICY
CERTIFICATION
To: GLYCOMIMETICS, INC.
I, , have received and read a copy of the GLYCOMIMETICS, INC.
Insider Trading and Window Period Policy. I hereby agree to comply with the specific requirements of the policy
in all respects during my employment or other service relationship with GLYCOMIMETICS, INC.. I
understand that this policy constitutes a material term of my employment or other service relationship with
GLYCOMIMETICS, INC. (or a subsidiary thereof) and that my failure to comply in all respects with the policy
is a basis for termination for cause.
(Signature)
(Name)
(Date)
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. 333-206166) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(2)
Registration Statement (Form S-8 No. 333-209814) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(3)
Registration Statement (Form S-8 No. 333-216366) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(4)
Registration Statement (Form S-8 No. 333-223462) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(5)
Registration Statement (Form S-8 No. 333-230117) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(6)
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.,
(7)
Registration Statement (Form S-8 No. 333-253788) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc.,
(8)
Registration Statement (Form S-8 No. 333-263257) pertaining to the 2013 Equity Incentive
Plan, 2013 Employee Stock Purchase Plan, and Inducement Plan of GlycoMimetics, Inc.,
(9)
Registration Statement (Form S-8 No. 333-270941) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc., and
(10) Registration Statement (Form S-8 No. 333-278265) pertaining to the 2013 Equity Incentive
Plan and 2013 Employee Stock Purchase Plan of GlycoMimetics, Inc., and
(11) Registration Statement (Form S-3 No. 333-263297) of GlycoMimetics, Inc.
of our report dated February 13, 2025, 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,
2024.
/s/ Ernst & Young LLP
Baltimore, Maryland
February 13, 2025
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.
I have reviewed this annual report on Form 10-K of GlycoMimetics, Inc. (the “registrant”);
2.
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;
3.
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;
4.
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 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: February 13, 2025
/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.
I have reviewed this annual report on Form 10-K of GlycoMimetics, Inc. (the “registrant”);
2.
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;
3.
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;
4.
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 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: February 13, 2025
/s/ Brian M. Hahn
Brian M. Hahn
Chief Financial Officer and Senior Vice President
(principal financial officer)
EXHIBIT 32.1
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
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 knowledge:
1.
The Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (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
2.
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 13th day of February 2025.
/s/ Harout Semerjian
/s/ Brian M. Hahn
Harout Semerjian
Brian M. Hahn
President & Chief Executive Officer
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.