cntx-20221231

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, 2022


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

Commission file number 001-40654

CONTEXT THERAPEUTICS INC.

(Exact name of registrant as specified in its charter)


Delaware			86-3738787
(State of other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification Number)

2001 Market Street, Suite 3915, Unit #15

Philadelphia, Pennsylvania 19103

(Address of principal executive offices, including zip)

(267) 225-7416

(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	CNTX	The Nasdaq Stock Market LLC

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 and post such files). Yes ☒ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting 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 Act). Yes ☐ No ☒

As of June 30, 2022 (the last business day of the registrant's most recently completed second fiscal quarter), the aggregate market value of the registrant's common stock held by non-affiliates was approximately $31.8 million based on the last reported sale price of the registrant's common stock on The Nasdaq Stock Market on June 30, 2022.

As of March 17, 2023, the registrant had 15,966,053 shares of common stock, $0.001 par value per share, outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive Proxy Statement for its 2023 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission pursuant to Regulation 14A not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K are incorporated by reference in Part III, Items 10-14 of this Annual Report on Form 10-K.


EXPLANATORY NOTE

On April 23, 2021, we completed a reverse triangular merger, resulting in Context Therapeutics Inc. becoming the sole holder of 100% of the membership interests in Context Therapeutics LLC. In connection with the merger, all of the common units, preferred units and all options, warrants or other rights to purchase common or preferred units of Context Therapeutics LLC converted into common stock, preferred stock and all options, warrants or other rights to purchase common or preferred stock of Context Therapeutics Inc. (the “reorganization”).

TABLE OF CONTENTS


Risk Factor Summary			ii
Note Regarding Forward-Looking Statements			iv
Market, Industry and Other Data			vii

Part I
Item 1. Business			1
Item 1A. Risk Factors			17
Item 1B. Unresolved Staff Comments			52
Item 2. Properties			52
Item 3. Legal Proceedings			52
Item 4. Mine Safety Disclosures			52
Part II
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			64
Item 8. Financial Statements and Supplementary Data			65
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures			86
Item 9A. Controls and Procedures			86
Item 9B. Other Information			87
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections			87
Part III
Item 10. Directors, Executive Officers and Corporate Governance			88
Item 11. Executive Compensation			88
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			88
Item 13. Certain Relationships and Related Transactions, and Director Independence			88
Item 14. Principal Accountant Fees and Services			88
Part IV
Item 15. Exhibits and Financial Statement Schedules			89
Item 16. Form 10-K Summary			92
Signatures			93

_________________________

Unless the context otherwise requires, all references in this Form 10-K to "Context," the "Company," "we," "us," and "our" refer to Context Therapeutics Inc. and its subsidiaries.

_________________________

Trademark Notice

This Form 10-K contains references to our trademarks and to trademarks belonging to other entities. Context Therapeutics® is a registered trademark of Context in the United States. All other trademarks, trade names and service marks appearing in this Form 10-K are the property of their respective owners. We do not intend our use or display of other companies' trade names or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

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RISK FACTOR SUMMARY

The risk factors summarized below could materially harm our business, operating results and/or financial condition, impair our future prospects and/or cause the price of our common stock to decline. For more information, see “Item 1A. Risk Factors” in this Annual Report on Form 10-K for the year ended December 31, 2022. Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to, the following:

Risks Related to Our Business and Industry

•We have never been profitable and may never achieve or maintain profitability.

•If we are unable to raise substantial additional capital on acceptable terms, or at all, we may be forced to delay, reduce or eliminate some or all of our research programs, product development activities and commercialization efforts.

•We have a limited operating history, which makes it difficult to evaluate our current business and future prospects and may increase the risk of your investment.

•We may expend our limited resources pursuing particular research programs or product candidates that may be less successful or profitable than other programs or product candidates.

•Our business may be adversely affected by the ongoing coronavirus pandemic.

•Fluctuating foreign exchange rates could increase our operating expenses and adversely affect our results of operations.

Risks Related to our Product Candidates

•Our business is dependent on the successful development, regulatory approval and commercialization of our therapeutic product candidate, CTIM-76, which is in the early stages of development.

•Results of preclinical studies, early clinical trials or analyses may not be indicative of results obtained in later trials.

•Interim “top-line” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data.

•Any product candidate may cause serious adverse events or undesirable side effects, which may delay or prevent marketing approval, or, if approved, require it to be taken off the market, require it to include safety warnings or otherwise limit its sales.

•The success of our business depends primarily upon our ability to identify, develop and commercialize products using our proprietary technologies.

•We have decided to discontinue and explore strategic options for our ONA-XR program; however, there can be no assurance that we will be successful in entering into or consummating a transaction or that any such transaction will yield additional value for stockholders.

Risks Related to Our Organization, Structure and Operations

•Our reliance on a central team consisting of a limited number of employees and consultants who provide various administrative, research and development, and other services across our organization presents operational challenges that may adversely affect our business.

•Our future success depends on our ability to retain our executive officers, and other key executives and to attract, retain and motivate qualified personnel.

Risks Related to Our Reliance on Third Parties

•We expect to, and do, depend on collaborations with third parties for certain research, development and commercialization activities, and to rely on third parties to conduct, supervise and monitor our clinical trials and some aspects of our research and preclinical testing, as well as for the manufacturing process of product candidates. If any such collaborations or services by such third parties are not successful or not performed in a satisfactory manner, it may harm our business and prospects, and we may not be able to obtain regulatory approval or commercialize product candidates, or such approval or commercialization may be delayed, and our business may be substantially harmed.

•In connection with our plan to cease development of ONA-XR, we may become involved in disagreements or disputes with our licensees, licensors and other counterparties relating to the development and/or commercialization of ONA-XR, which may be time consuming, costly and could harm our efforts to pursue strategic options for ONA-XR.

Risks Related to Government Regulation

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•The FDA regulatory approval process is lengthy and time-consuming, and we may experience significant delays in the clinical development and regulatory approval of our current and any future product candidates.

•We expect that CTIM-76 will be regulated as biological products, or biologics, and therefore they may be subject to competition sooner than anticipated.

•The FDA may disagree with our regulatory plan and we may fail to obtain regulatory approval of any product candidate.

•Obtaining and maintaining regulatory approval of a product candidate in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of such product candidate in other jurisdictions.

•Even if we obtain regulatory approval of a product candidate, the product may not gain market acceptance among physicians, patients, hospitals, cancer treatment centers and others in the medical community.

•Coverage and reimbursement may be limited or unavailable in certain market segments for a product candidate, which could make it difficult for us to sell such product candidate, if approved, profitably.

Risks Related to Intellectual Property

•Patents and patent applications involve highly complex legal and factual questions, which, if determined adversely to us, could negatively impact our business position.

•Our ability to compete effectively in our markets may decline if we do not adequately protect our proprietary rights, and our proprietary rights do not necessarily address all potential threats to our competitive advantages.

•If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.

•We may not be able to protect our intellectual property rights throughout the world.

•Third parties may assert claims against us alleging infringement of their patents and proprietary rights, or we may need to become involved in lawsuits to defend or enforce our patents, either of which could result in substantial costs or loss of productivity, delay or prevent the development and commercialization of our current and any future product candidates, prohibit our use of proprietary technology or sale of potential products or put our patents and other proprietary rights at risk.

Risks Related to the Market for Our Common Stock

•Our common stock may be volatile or may decline regardless of our operating performance.

•We may not be able to regain and maintain compliance with the continued listing requirements of The Nasdaq Stock Market.

•We may issue debt and equity securities, which are senior to our common stock as to distributions and in liquidation, which could materially adversely affect the market price of our common stock.

•We may fail to maintain effective internal control over financial reporting and effective disclosure controls and procedures. If we fail to remediate any material weaknesses, we may not be able to report our financial results accurately or to prevent fraud, which could materially adversely affect the market price of our common stock.

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

iii

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NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-K contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. The forward-looking statements are contained principally in, but not limited to, the sections entitled “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business.” These statements relate to future events or to our future financial performance and 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 any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

•the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results;

•the timing, progress and results of preclinical studies and clinical trials for CTIM-76 and other product candidates we may develop, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available, and our research and development programs;

•the timing, scope and likelihood of U.S. and foreign regulatory filings and approvals, including timing of Investigational New Drug applications and final U.S. Food and Drug Administration (“FDA”) approval of CTIM-76 and any other future product candidates;

•our ability to develop and advance CTIM-76 and any other future product candidates, and successfully complete, clinical studies;

•our manufacturing, commercialization, and marketing capabilities, implementations thereof, and strategy;

•our plans relating to commercializing our product candidates, if approved, including the geographic areas of focus, sales strategy, and our ability to grow a sales team;

•our intent to explore strategic options for onapristone extended release (“ONA-XR”);

•any disagreements or disputes with our licensees, licensors and other counterparties relating to the development and/or commercialization of ONA-XR, which may be time consuming, costly and could harm our efforts to pursue strategic options for ONA-XR;

•the impact of the COVID-19 pandemic and other economic uncertainties on our business and operations, including clinical trials, manufacturing suppliers, collaborators, use of contract research organizations and employees;

•the need to hire additional personnel and our ability to attract and retain such personnel;

•the size of the market opportunity for our product candidates, including our estimates of the number of patients who suffer from the diseases we are targeting;

•our competitive position and the success of competing therapies that are or may become available;

•the beneficial characteristics, safety, efficacy and therapeutic effects of our product candidates;

•our ability to obtain and maintain regulatory approval of our product candidates;

•our plans relating to the further development of our product candidates, including additional indications we may pursue;

•existing regulations and regulatory developments in the United States, Europe and other jurisdictions;

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•our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering CTIM-76, ONA-XR, and other product candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

•our continued reliance on third parties to conduct and support clinical trials of our product candidates, and for the manufacture of our product candidates for preclinical studies and clinical trials;

•our ability to obtain, and negotiate favorable terms of, collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates;

•the pricing and reimbursement of CTIM-76 and other product candidates we may develop, if approved;

•the rate and degree of market acceptance and clinical utility of CTIM-76 and other product candidates we may develop;

•our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•our current plans to seek additional capital in the future through equity and/or debt financings, partnerships, collaborations, licensing agreements or other strategic arrangements, or other sources and the availability of such future sources of capital;

•our financial performance;

•the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements;

•the impact of laws and regulations;

•our expectations regarding the period during which we will qualify as an emerging growth company under the JOBS Act;

•our anticipated use of our existing cash and cash equivalents; and

•other risks and uncertainties, including those listed under the caption “Risk Factors”.

In some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the heading “Risk Factors” and elsewhere in this Form 10-K. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. As a result, you should not place undue reliance on forward-looking statements.

This Form 10-K also contains certain data and information which we obtained from various government and private publications or third parties. Although we believe that the publications, information, data and reports are reliable, we have not independently verified the data. Statistical data in these publications includes projections that are based on a number of assumptions. If any one or more of the assumptions underlying the market data is later found to be incorrect, actual results may differ from the projections based on these assumptions. Scientific and clinical data presented herein are – by definition prior to completion of the clinical trial and a clinical study report – preliminary in nature and subject to further quality checks including customary source data verification.

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The forward-looking statements made in this Form 10-K relate only to events or information as of the date of the Form 10-K (or any earlier date indicated in such statement). Although we are a public company and have ongoing disclosure obligations under United States federal securities laws, we do not intend to update or otherwise revise the forward-looking statements in this Form 10-K, whether as a result of new information, future events or otherwise.

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MARKET, INDUSTRY AND OTHER DATA

This Annual Report on Form 10-K contains estimates, projections, market research and other information concerning our industry, our business, markets for our product candidates, the size of those markets, and the prevalence of certain medical conditions. Unless otherwise expressly stated, we obtain this information from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources as well as from our own internal estimates and research and from publications, research, surveys and studies conducted by third parties on our behalf. Information that is based on estimates, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances that are reflected in this information. As a result, you are cautioned not to give undue weight to such information.

vii

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PART I.

Item 1. Business

Overview

We are a biopharmaceutical company dedicated to improving the lives of patients living with solid tumors. Profound advancements in oncology drug development have expanded the treatment options available to cancer patients, yet the need for additional treatment options exists.

Our preclinical program, CTIM-76, is an anti-CD3 x anti-Claudin 6 (“CLDN6”) antigen bispecific monoclonal antibody (“bsAb”) that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6. CLDN6 is a tight junction membrane protein target expressed in multiple solid tumors, including ovarian, lung, and testicular, and absent from or expressed at low levels in healthy adult tissues.

On March 22, 2023, we announced a portfolio prioritization and capital allocation strategy, including discontinuing the development of ONA-XR and focusing on the development of CTIM-76. Based upon the challenging market conditions for emerging companies, the increasingly competitive landscape for breast cancer treatments, recent study findings, and other factors, we decided to cease development and explore strategic options for ONA-XR. As a result, we will no longer primarily focus on female cancers.

Recent advances in the treatment of metastatic breast cancer point toward a more competitive environment in the coming years, such as promising Phase 3 clinical data for emerging product candidates, including Enhertu and capivasertib. Additionally, in the ongoing Phase 2 OATH trial evaluating ONA-XR in combination with anastrozole, elevated liver function tests (“LFTs”) were identified in three patients, including in one patient who discontinued treatment, although none of the elevated LFTs were considered serious adverse events. We determined that significant incremental program costs and delays were likely to be required to analyze and potentially mitigate future LFT abnormalities. By ceasing development of ONA-XR, we expect to have sufficient cash and cash equivalents to fund our operations into late 2024.

Beyond these product candidates, we continue to evaluate opportunities to expand our pipeline. We believe our team and capabilities position us to be a leader in developing novel therapies targeting solid tumors. Collectively, our management team has experience identifying and characterizing the mechanisms that drive cancer initiation and subsequent relapse in various cancer indications and who have been associated with the development of products such as Kisqali (ribociclib), Arimidex (anastrozole), and Afinitor (everolimus) to treat such cancers. We retain full worldwide development and commercialization rights to certain CTIM-76 patents in the field of bispecific antibodies and we retain worldwide development and commercialization rights for ONA-XR outside of Greater China.

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Our product candidates are shown in the table below:

(1) Tyligand Biosciences Ltd licensed rights to ONA-XR in China, HK, Macau

Our Product Pipeline and Development

CLDN6xCD3 bispecific antibody program: CTIM-76

Our preclinical program, CTIM-76, is an anti-Claudin 6 x anti-CD3 (“CLDN6xCD3”) bsAb that is intended to redirect T-cell-mediated lysis toward malignant cells expressing CLDN6. CLDN6 is a tight junction membrane protein target that has high prevalence across many cancers, including ovarian, lung and testicular, and absent from or expressed at low levels in healthy adult tissues. Due to this prevalence, we, along with several other pharmaceutical companies, including BioNTech SE (“BioNTech”) and Amgen Inc. (“Amgen”), are developing anti-CLDN6 antibodies and/or bispecific antibodies. The structural complexity of CLDN6 and its similarity to proteins expressed on healthy tissue, particularly Claudin 3 (“CLDN3”), Claudin 4 (“CLDN4”), and Claudin 9 (“CLDN9”), make selectivity a key development challenge that must be addressed. CTIM-76 investigational new drug (“IND”)-enabling studies are ongoing, with an IND filing to support human clinical trials expected in the first quarter of 2024.

PR antagonist program: ONA-XR

Prior to the portfolio prioritization and capital allocation strategy announced on March 22, 2023, we were primarily focused on developing treatments for female cancers. Currently, there are no approved therapies that selectively target progesterone receptor positive (“PR+”) cancers. Preclinical and clinical data suggest that ONA-XR has anticancer activity by inhibiting PR binding to chromatin, downregulating cancer stem cell mobilization and blocking immune evasion. ONA-XR was most recently being evaluated in two key Phase 2 trials (OATH and SMILE), and one Phase 1b/2 trial (ELONA) in women with metastatic breast and endometrial cancers. These trials are intended to establish safety, pharmacokinetics, pharmacodynamics, and anti-tumor activity at the recommended Phase 2 dose of ONA-XR to guide potential advancement in Phase 3 development. We are exploring strategic options for ONA-XR. Below is a description of the clinical trials to evaluate ONA-XR, which we expect to wind down promptly on an orderly basis:

•OATH trial: Phase 2 IST in collaboration with Jefferson Health to evaluate ONA-XR in combination with Arimidex (anastrozole) in PR+ endometrial cancer.

•ELONA trial: Phase 1b/2 trial in partnership with The Menarini Group ("Menarini”) to evaluate ONA-XR in combination with ORSERDUTM (elacestrant), Menarini’s selective estrogen receptor degrader, in patients with locally advanced or metastatic breast cancer who have received prior treatment with a cyclin-dependent kinase 4/6 (“CDK4/6”) inhibitor.

•SMILE trial: Phase 2 IST in collaboration with Wisconsin Oncology Network (WON) to evaluate ONA-XR in combination with Faslodex (fulvestrant) in second line (“2L”) or third line (3L) metastatic breast cancer. This trial is intended to evaluate potential ONA-XR plus Faslodex drug synergy after treatment failure of CDK4/6 and/or PIK3α inhibitors. As part of the trial, a pharmacokinetic and pharmacodynamic

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(PK/PD) sub-study is also intended to evaluate the uptake of radiolabeled progesterone (F-FFNP) via positron emission tomography (PET) imaging in breast tumors to determine target engagement.

•Additional ISTs: Two other academic initiated trials are also ongoing, including a Phase 2 IST initiated by Memorial Sloan Kettering Cancer Center (“MSK”) to evaluate ONA-XR in combination with Arimidex in recurrent granulosa cell tumors (“GCT”) of the ovary.

Other preclinical programs

In addition to our product candidates, we are leveraging our knowledge in solid tumors and female cancers to pursue discovery stage research programs. We continue to evaluate new opportunities to expand our pipeline.

CLDN6xCD3 bispecific antibody program: CTIM-76

Background CLDN6

CLDN6 is an oncofetal tight junction protein involved in the cell-to-cell adhesion of epithelial and endothelial cell sheets. Although epigenetically silenced in healthy adult human tissues, CLDN6 expression has been found in ovarian, gastric, pediatric, and other cancer tissues and can lead to a poor prognosis. Monoclonal antibody (MAb) discovery against CLDN6 has been encumbered by the high homology of endogenously expressed CLDN9, which varies from CLDN6 by only three amino acids in the extracellular domain.

Proposed mechanism of action

Rationale for bispecific antibody

Cytotoxic T cells are considered to be the most potent effector cells of the immune system. As a consequence, broad T cell activation can lead to significant and sometimes lethal side effects. Therefore, to harness the potential of cytotoxic T cells, therapeutic strategies seek to pair T cell activation with drug targets that are restricted to cancer tissue so as to avoid unwanted toxicity. CLDN6 expression is restricted to various cancer types (i.e., a tumor specific antigen or TSA), making it an ideal target to help T cells recognize and eliminate cancer cells. Recently, a class of bispecific antibodies (TSAxCD3) with a native immunoglobulin format has emerged that can efficiently trigger T cell–mediated killing of tumor cells by linking a T cell to a tumor cell and activating the CD3/t cell receptor complex, as shown above.

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CLDN6 expression in cancer versus normal tissue

Source: Cancer RNAseq data from The Cancer Genome Atlas (TCGA); normal tissue RNAseq data from the Genotype-Tissue Expression (GTEx) project.

Preclinical data

CTIM-76 is a Claudin 6 and CD3 bispecific antibody capable of binding to tumor cells expressing Claudin 6 and stimulating intra-tumoral T cells by the CD3 arm that is designed to be activated only upon tumor engagement while silent elsewhere. Claudin 6 is expressed on multiple solid tumors such as ovarian, lung and testicular. As shown below, CTIM-76 exhibits excellent selectivity and specificity for CLDN6. Preclinical studies of CTIM-76 show it effectively maintains a strong tumor binding property and anti-tumor activity attributable to a synergistic effect of both Claudin 6 antibody and CD3 antibody while avoiding systemic immunotoxicity commonly seen with CD3 antibodies as a drug class. CTIM-76 has the potential for convenient dosing and scalable manufacturing to address the significant number of patients who are potentially eligible for CTIM-76 therapy.

An important aspect of CTIM-76 is the ability of the bispecific to preferentially target CLDN6 over related proteins. There is high sequence homology (~95%) between CLDN6 and CLDN9 in the extracellular loops, making the isolation of a CLDN6-specific antibody challenging. As shown below, CTIM-76 preferentially targets CLDN6,

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with minimal activity against CLDN9-expressing cells. Further, no binding was observed to other CLDN family proteins (CLDN3 and CLDN4) that have <85% homology in the extracellular loops.

Study design: K562 cells stably over-expressing CLDN3, CLDN4, CLDN6, or CLDN9 were co-cultured with human T-cells at an E:T ratio of 10:1 for 48 hours. Cytotoxicity was determined by luminescence imaging.

CTIM-76 has the potential for a wide therapeutic window, which is the difference between the dose required for the intended therapeutic effect and the dose required to elicit an unwanted side effect. The therapeutic goal therefore is to maximize cancer cell death through selective immune activation. CTIM-76 was evaluated in preclinical assays to determine the risk of on-/off-target immune system activation. As shown below, preclinical data supports the potential to dose at levels that promote cancer cell killing but have manageable levels of free cytokine production, thereby potentially reducing the risk of cytokine release syndrome. In the assay, cytokine production was evaluated in the exogenous (CLDN6-K562) cell line model at 48 hours. Cytokine production happened well above the concentration of maximal killing (TDCC EC50 = 0.0004 nM), indicating a potentially wide therapeutic window.

Study design: K562 cells stably over-expressing CLDN6 and luciferase were co-cultured with human T cells at an E:T ratio of 10:1 for 48 hours. Cytotoxicity was determined by luminescence imaging.

Comparison of CLDN6 development programs

We have performed head-to-head in vitro studies comparing internally developed CLDN6 monoclonal and bispecific antibodies and those from BioNTech and Xencor, Inc. (“Xencor”). Antibodies for BioNTech and comparative data for Xencor were derived from publicly available reports published independent of us and may differ in material ways from the actual antibody that is in development.

The results presented in the below table have been derived from publicly available reports of preclinical studies run independently of our preclinical results. We have not performed any head-to-head clinical trials comparing any of these other therapies with CTIM-76. As such, the results of these other product candidates may not be comparable to clinical results for CTIM-76. The design of these other studies vary in material ways from the design of the

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preclinical studies for CTIM-76. For further information and to understand these material differences, you should read the relevant reports.

We believe it is useful to compare the in vitro results achieved by BioNTech and Xencor’s product candidates and approaches as a proxy to understand the estimated selectivity differences of these therapies.

Context

Xencor

BioNTech

Program

CTIM-76

XmAb541

BNT211 and BNT142

Antibody Format

Bispecific
CLDN6xCD3

CLDN6
CAR-T, and
CLDN6xCD3 (bi(sFc))

Stage

Preclinical

Phase 1, Phase 1

Status

Active

Selectivity CLDN6:9

>1000x

10x

Other preclinical programs

In addition to our product candidates, we previously leveraged our knowledge in hormone-dependent cancer to pursue discovery stage research programs.

In November 2015, we entered into a patent license agreement, as amended, (the “Drexel License Agreement”) with Drexel University for license rights to patents for certain intellectual property and know-how related to certain Sigma1 technology. As part of a strategic review of our pipeline, we terminated the Drexel License Agreement, effective as of April 27, 2022.

Our collaboration and license agreements

Collaboration Agreement with Tyligand Bioscience

In March 2020, we entered into a process development agreement (the “Tyligand Process Development Agreement”) with Tyligand Bioscience (Shanghai) Limited (“Tyligand”) for the development, manufacturing, registration and future commercialization of ONA-XR.

Under the terms of the Tyligand Process Development Agreement, Tyligand was solely responsible for the design and optimization of an improved manufacturing process for ONA-XR. Upon completion of specific performance-based milestones, we and Tyligand entered into a license agreement (the “Tyligand License Agreement”) whereby Tyligand was granted the exclusive right to ONA-XR and is solely responsible for the development and commercialization of ONA-XR in China, Hong Kong and Macau (the “Territory”). We retain rights in the rest of the world to commercialize ONA-XR.

Under the Tyligand Process Development Agreement, we paid Tyligand $0.8 million and issued 111,576 warrants to purchase shares of common stock at an exercise price of $7.17 per share upon successful completion of the manufacturing development plan in 2021. The warrants were cancelled in connection with our initial public offering. In addition, $2.0 million will be payable upon the completion of scale-up of the first cumulative 100 kilograms of the Good Manufacturing Practices (“GMP”)-grade compound and $3.0 million upon our completion of scale-up of the first cumulative 300 kilograms of the GMP-grade compound. In consideration of and upon Tyligand’s successful completion of the development plan, within 30 days at the end of each calendar quarter, we shall pay Tyligand 1% of net sales of finished product utilizing the compound substantially manufactured in accordance with the process and specifications outlined in the Tyligand Process Development Agreement. This agreement terminated in August of 2021, subject to certain surviving and ongoing obligations.

Per the Tyligand License Agreement, Tyligand shall pay us a non-refundable, non-creditable royalty at a rate in the mid-single digits of the net sales of each product in the Territory in each calendar quarter commencing with the first commercial sale of such product in the field in the Territory and ending upon the latest of (i) the sale of a generic product in the Territory and (ii) 15 years after the date of the first commercial sale of product in the Territory.

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Collaboration and Licensing Agreement with Integral Molecular

In April 2021, we entered into a collaboration and licensing agreement with Integral Molecular, Inc. (“Integral”) (the “Integral License Agreement”) for the development of a CLDN6 BsAb for cancer therapy. Under the terms of the Integral License Agreement, we and Integral will develop CLDN6 bispecific antibodies that trigger the activation of T cells and eliminate cancer cells displaying CLND6. We will conduct preclinical and all clinical development, as well as regulatory and commercial activities through exclusive worldwide rights to develop and commercialize the novel CLDN6 candidates. We paid an upfront license fee of $0.3 million and granted 418,559 shares of Series A Stock with a fair market value of approximately $2.8 million. As a part of the Integral License Agreement, Integral will be eligible to receive remaining development and regulatory milestone payments totaling approximately $55 million (of which a $0.5 development milestone was achieved in the second quarter of 2022 and subsequently paid), sales milestone payments totaling up to $130.0 million, and tiered royalties of up to 12% of net sales of certain products developed under the Integral License Agreement. We shall continue to pay royalties on a country-by-country and licensed-by-licensed product basis, until the later of: (i) the expiration of the patent covering such product in such territory, (ii) the expiration of any regulatory exclusivity granted with respect to a product in such territory and (iii) 10 years from the first commercial sale of such product in such country. The Integral License Agreement shall continue in full force and effect, until either (a) royalty payments for all products in all territories have expired or (b)(i) we provide written notice of termination, (ii) during three successive quarters we do not use commercially reasonable efforts to develop a product, (iii) if the agreement is breached or (iv) if a party goes bankrupt. On March 20, 2023, we amended the Integral License Agreement to remove the previously agreed to second milestone payment and to change the amount of the third milestone payment to increase such payment by the amount of the prior second milestone payment and to add payment for third party research funding obtained and used by Integral in connection with the development of CTIM-76.

Menarini Clinical Trial Collaboration and Supply Agreement

On August 1, 2022, we entered into a Clinical Trial Collaboration and Supply Agreement (the “Menarini Agreement”) with Berlin-Chemie AG - Menarini Group - (“Menarini”). Pursuant to the Menarini Agreement, Menarini agreed to provide, at no cost to us, elacestrant, its nonsteroidal combined selective estrogen receptor modulator and selective estrogen receptor degrader therapy, for use in combination with ONA-XR, in a planned Phase 1/2 clinical trial (the “Menarini Study”). Under the Menarini Agreement, we agreed to sponsor, fund and conduct the Menarini Study. Under the Menarini Agreement, Menarini agreed to manufacture and supply elacestrant at Menarini's cost and for no charge to us for use in the Menarini Study and to provide cell-free nucleic acid analysis of the anonymized blood samples of all Menarini Study patients. We own any data and sample testing results produced in the Menarini Study. We and Menarini jointly own any rights to inventions relating to the combined use of elacestrant and ONA-XR, while Menarini owns certain inventions solely related to elacestrant and we own certain inventions solely related to ONA-XR. We and Menarini formed a joint development committee responsible for coordinating all activities between the parties under the Menarini Agreement. Additionally, had we received a bona-fide third-party offer to sell, divest or license ONA-XR, we would have been required, subject to certain exceptions, to inform Menarini of the receipt of an offer and, if Menarini timely provided proposed terms for such a transaction in writing, we would have been required to consider such terms in good faith. On March 21, 2023, we mutually terminated the Menarini Agreement, and the parties agreed to reasonably cooperate towards an orderly wind-down of the related clinical trial.

Commercialization

We retain full worldwide development and commercialization rights to certain CLDN6 antibody patents in the field of bispecific antibodies and retain worldwide development and commercialization rights for ONA-XR outside of Greater China. We periodically evaluate out-license opportunities for our product candidates, including our current exploration of strategic options for ONA-XR, and seek to identify drug candidates for novel indications and/or patient subpopulations with an oncology focus that we might in-license. Our commercial plans and strategy for any of our programs may change as programs advance, markets change, and we receive more clinical data, and will depend on availability of current and future capital.

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Sales and marketing

We currently have no sales, marketing, or commercial product distribution capabilities, and we may explore partnerships with larger pharmaceutical organizations that already have these capabilities. We intend to build the necessary infrastructure and capabilities over time for the United States, and potentially other regions, following further advancement of a product candidate.

Manufacturing

We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We rely, and expect to continue to rely, on third parties for the manufacture of our current and any future product candidates for preclinical and clinical testing, as well as for commercial manufacture if any product candidate obtains marketing approval. We also rely, and expect to continue to rely, on third parties to package, label, store and distribute our current and any future investigational product candidates, as well as for our commercial products if marketing approval is obtained. We believe that this strategy allows us to maintain a more efficient infrastructure by eliminating the need for us to invest in our own manufacturing facilities, equipment and personnel while also enabling us to focus our expertise and resources on the development of our current and any future product candidates.

To date, we have obtained active pharmaceutical ingredients (“API”) and drug product for our product candidates from several third party contract manufacturers. We continue to develop our supply chain for CTIM-76 and intend to put in place additional framework agreements under which third-party contract manufacturers will generally provide us with necessary quantities of API and drug product on a project-by-project basis based on our development needs.

On November 7, 2022, we entered into a Development and Manufacturing Services Agreement (the “Lonza Development Agreement”), with Lonza Sales AG (“Lonza Sales”) and Lonza AG (collectively, “Lonza”). Under the terms of the Lonza Development Agreement, Lonza will provide services relating to the development and manufacture of CTIM-76 (the “Product”) in accordance with the project plan attached to the Lonza Development Agreement and any other work as may be agreed to between us and Lonza. The Lonza Development Agreement will terminate upon the completion of the agreed upon services, unless earlier terminated by us or Lonza for uncured material breaches, insolvency of the other party, or if a party determines that it is not possible to complete the services for material scientific or material technical reasons.

We can terminate certain services under the Lonza Development Agreement, but in addition to payment for certain non-cancellable commitments, we would be required to pay a cancellation fee, such fee to be determined depending on the timing of such notice prior to the commencement of the related services.

The License Development Agreement requires us to obtain a license from Lonza prior to receipt from Lonza of the Product or in vivo clinical studies or any other commercial use or sale of the Product, which we entered into concurrently with the License Development Agreement, as further described below. Additionally, should we desire to either manufacture the Product itself or have it manufactured by a third party, we would be required to obtain Lonza’s consent (not to be unreasonably withheld, conditioned or delayed) and would need to enter into a separate technology transfer agreement with Lonza for a non-exclusive license to the extent necessary to manufacture, have manufactured and supply the Product at a licensing fee up to £750,000.

The Lonza Development Agreement also contains customary representations, warranties, indemnification and other obligations of us and Lonza.

On November 7, 2022, we entered into a License Agreement (the “Lonza License Agreement”) with Lonza Sales. Under the terms of the Lonza License Agreement, to the extent incorporated into the Product, Lonza granted us a non-exclusive license to use certain proprietary Lonza intellectual property and systems for us to develop, manufacture and commercially exploit the Product.

We shall pay certain royalties and annual payments in respect of the manufacturing and sale of Product, which amounts shall be determined by the party manufacturing the Product and ranges from a potential annual payment of

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up to less than $500,000 and a royalty on net sales from 0% up to a low single digit percentage. The royalty payments and annual payments would be reduced in certain circumstances, including should the valid claims for any such patent rights not exist in the country in which such Product is being sold, and the royalty payments would expire upon the later of the expiration of the licensed patents in the country in which such Product is being sold, the expiration of the licensed patents in the country in which such Product is being manufactured, and 10 years from the first commercial sales of the Product in such country of sale.

The Lonza License Agreement continues until terminated, and we or Lonza may terminate the Lonza License Agreement for uncured material breaches or insolvency of the other party. We can unilaterally terminate the Lonza License Agreement with prior written notice to Lonza, and Lonza can also unilaterally terminate the Lonza License Agreement upon certain actions by us.

The Lonza License Agreement also contains customary representations, warranties, indemnification and other obligations of us and Lonza.

As we advance our current and any future product candidates through development, we will consider our lack of redundant supply for the API and drug product for each product candidate to protect against any potential supply disruptions.

We generally expect to rely on third parties for the manufacture of any companion diagnostics we may develop.

Competition

The pharmaceutical and biotechnology industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products. While we believe that our technology, the experience of our executive and scientific team, research, clinical capabilities, development experience and scientific knowledge provide us with competitive advantages, we face increasing competition from many different sources, including pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions. Product candidates that we successfully develop and commercialize may compete with existing therapies and new therapies that may become available in the future.

Many of our competitors, either alone or with their collaborators, have significantly greater financial resources, established presence in the market, expertise in research and development, manufacturing, preclinical and clinical testing, obtaining regulatory approvals and reimbursement and marketing approved products than we do. These competitors also compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Additional mergers and acquisitions may result in even more resources being concentrated in our competitors.

Our commercial potential could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than products that we may develop. Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market or make our development more complicated. The key competitive factors affecting the success of all of our programs are likely to be efficacy, safety and convenience.

For CTIM-76, our CLDN6xCD3 bispecific antibody, we are aware of several companies developing antibodies against this target, including Abbvie Inc., Amgen, Astellas Pharma Inc., AstraZeneca plc, BioNTech, Chugai Pharmaceutical Co., Ltd., Daiichi Sankyo Company, Limited (“Daiichi Sankyo”), I-Mab, NovaRock Biotherapeutics Inc., and Xencor. These companies are developing CDLN6 products in naked antibody, bispecific, CAR-T, and mRNA vaccine formats. To our knowledge, Amgen, BioNTech, and Daiichi Sankyo have the only CLDN6 products in clinical trials.

Intellectual property

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We strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to our business, including seeking, maintaining and defending our patent rights. We retain full worldwide development and commercialization rights to certain CLDN6 antibody patents in the field of bispecific antibodies and we own the issued patent and patent applications relating to ONA-XR. Our policy is to seek to protect our proprietary position by, among other methods, filing patent applications in the United States and in jurisdictions outside of the United States directed to our proprietary technology, inventions, improvements and product candidates that are important to the development and implementation of our business. We also rely on trade secrets and know-how relating to our proprietary technology to protect our product candidates and continuing to innovate to develop, strengthen and maintain our proprietary position in the field of oncology. We also plan to rely on data exclusivity, market exclusivity and patent term extensions when available. Our commercial success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our product candidates, technology, inventions and improvements; to preserve the confidentiality of our trade secrets; to defend and enforce our proprietary rights, including any patents that we may own or license in the future; and to operate without infringing on the valid and enforceable patents and other proprietary rights of third parties.

As of March 13, 2023, the Integral patent portfolio for CTIM-76 that we exclusively licensed pursuant to the Integral License Agreement includes one granted U.S. patent, two pending U.S. applications (including one provisional application), and 27 pending foreign applications. The U.S. patent is expected to expire between in 2040, subject to any extensions or disclaimers.

As of March 13, 2023, our patent portfolio with respect to our ONA-XR product candidate consisted of four issued U.S. patents, four pending U.S. patent applications, three unpublished PCT applications, ten granted foreign patents (including one granted Canadian patent, two granted Chinese patents, one granted Japanese patent, four granted Australian patents, one granted Hong Kong patent, and one granted Mexican patent), and 16 pending foreign patent applications (including one Australian application, three Canadian applications, two Chinese applications, three European regional patent applications, three Hong Kong applications,two Japanese applications, and two Korean applications). Our granted U.S. patents, referenced above, have claims directed to our ONA-XR product candidate as pharmaceutical compositions, formulations, related methods of use, and methods of making. These U.S. patents are expected to expire between 2034 and 2036, subject to any extensions or disclaimers.

We also possess substantial know-how and trade secrets relating to the development and commercialization of our product candidates, including related manufacturing processes and technology.

With respect to our current and any future product candidates and processes, we intend to develop and commercialize in the normal course of business, and we intend to pursue patent protection covering, when possible, compositions, methods of use, dosing and formulations. We may also pursue patent protection with respect to manufacturing and drug development processes and technologies.

SEC Form 10-K filed by Context Therapeutics Inc.