On January 26, 2021 commenting on 2020 results, Vas Narasimhan, CEO of Novartis, said: "Novartis reported a solid performance in 2020 across our strategic priorities, despite the challenges of COVID-19 (Press release, Novartis, JAN 26, 2021, View Source [SID1234574282]). Operationally, we grew sales and continued to improve core operating margins for Innovative Medicines. We advanced our next wave of medicines achieving a number of new approvals highlighted by Kesimpta in the US, Leqvio and Zolgensma in the EU and progressed our broad and deep mid-stage pipeline of first-in-class medicines. Looking ahead, we are confident that the progress we have made on our strategic priorities as a focused medicines company, will result in top and bottom line growth through 2025."

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1 Refers to continuing operations as defined on page 43 of the Condensed Financial Report, excludes Alcon, includes the businesses of Innovative Medicines and Sandoz, as well as the continuing corporate functions.
2 Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 55 of the Condensed Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.
3 Please see detailed guidance assumptions on page 8 including the forecast assumption that we see a continuation of the return to normal global healthcare systems including prescription dynamics by mid 2021. In addition, we assume that no Gilenya and no Sandostatin LAR generics enter in 2021 in the US.

Strategy update

During 2020, we continued focusing Novartis as a leading medicines company powered by advanced therapy platforms and data science. We are now uniquely positioned with scale and diversification across therapeutic areas and we continue to execute on our five strategic priorities: embrace operational excellence, deliver transformative innovation, go big on data and digital, build trust with society, and build a new culture by unleashing the power of our people.

Operationally, solid sales growth, improved gross margins, productivity including lower spend drove double-digit growth in core operating income. Innovative Medicines core margin increased by 2.2 percentage points (cc) to 35% of sales, and we expect this margin to improve to high 30’s in the mid-term. Sales in China grew double-digit and we expect to double our China business by 2024 compared to 2019 sales.

In 2020, we continued to advance transformative innovation for patients, including treatments for hyperlipidemia and multiple sclerosis. We received 26 approvals for new treatments as well as new indications for existing treatments in the US, the EU, Japan and China. Additionally we submitted regulatory filings for several major drugs, including Leqvio, Kesimpta and Entresto (HFpEF). Novartis has an industry-leading pipeline that includes more than 40 assets in full development, including molecules that are being tested in more than one disease. As such, our pipeline remains rich including many near to mid-term catalysts and we expect to maintain innovation momentum.

We made significant progress to solidify our culture journey towards an inspired, curious and unbossed organization. More than three years ago, Novartis started a digital transformation, from R&D efforts to next generation customer engagement. The Novartis digital strategy and its execution are well on track with a strong focus on scaling our efforts. As a result we are bringing our Digital Function and Novartis Business Services together to build a new organization called Customer & Technology Solutions (CTS), effective February 1, 2021. CTS aims to further improve internal and external customer experience. Novartis made significant strides in building trust with society and issued the healthcare industry’s first sustainability bond linked to access to medicines and committed to carbon neutral emissions by 2030. Significant improvements recognized by third party ESG rating agencies.

COVID-19 update

The COVID-19 situation continues to evolve and is taking differing courses across the multitude of geographies in which Novartis operates. We continue to take strong actions to help address the pandemic. Our primary concerns remain the health and safety of our associates and patients.

During the year, there have been COVID-19 related lockdowns in several geographies negatively impacting certain therapeutic areas, most notably in: ophthalmology, dermatology and the Sandoz retail business. However, our operations remain stable and cash collections continue to be according to our normal trade terms, with days sales outstanding at normal levels. Novartis remains well positioned to meet its ongoing financial obligations and has sufficient liquidity to support our normal business activities. At present, drug development operations are continuing with manageable disruptions (please see Innovation Review Section of the Condensed Financial Report for further information), with our range of digital technologies allowing us to proactively manage our clinical trials portfolio and rapidly mitigate any disruptions.

Novartis launched a first-of-its-kind not-for-profit portfolio of 15 medicines from the Sandoz Division for symptomatic treatment of COVID-19. The portfolio addresses urgent unmet needs and is sold at no profit to governments in up to 79 eligible low and lower middle income countries. We continue to work closely with third parties to fight the COVID-19 pandemic. Novartis is also undertaking drug discovery efforts to develop the first oral medicines for COVID-19 and other coronaviruses. We are investigating two potential medicines, DFV890 and MAS825, in early stage development focused on the immune response. In October, we announced a collaboration with Molecular Partners to develop, manufacture and commercialize Molecular Partners’ anti-COVID-19 DARPin program, potential medicines for the prevention and treatment of COVID-19.

Financials

In order to comply with International Financial Reporting Standards (IFRS), Novartis has separated the Group’s reported financial data into "continuing" and "discontinued" operations. The results of the Alcon business in 2019 are reported as discontinued operations. See page 43 and Notes 2, 3 and 10 in the Condensed Financial Report for a full explanation.

The commentary below focuses on continuing operations including the businesses of Innovative Medicines and Sandoz, as well as the continuing Corporate functions. We also provide information on discontinued operations.

Continuing operations fourth quarter

Net sales were USD 12.8 billion (+3%, +1% cc) in the fourth quarter driven by volume growth of 6 percentage points, offset by price erosion of 2 percentage points and the negative impact from generic competition of 3 percentage points.

Operating income was USD 2.6 billion (+45%, +51% cc) mainly due to lower impairments, lower legal charges and income from contingent receivables.

Net income was USD 2.1 billion (+86%, +93% cc) driven by higher operating income and benefiting from lower taxes. EPS was USD 0.92 (+84%, +93% cc), growing in line with net income.

Core operating income was USD 3.5 billion (+1%, +2% cc) mainly driven by higher sales. Core operating income margin was 27.4% of net sales, decreasing by 0.5 percentage points (+0.4 percentage points cc).

Core net income was USD 3.0 billion (+2%, +3% cc) mainly driven by growth in core operating income. Core EPS was USD 1.34 (+2%, +3% cc), growing in line with core net income.

Free cash flow from continuing operations amounted to USD 3.3 billion (-4%) compared to USD 3.5 billion in the prior year quarter, as higher cash flows from operating activities were more than offset by increased net investment for intangible assets.

Innovative Medicines net sales were USD 10.2 billion (+3%, +1% cc) with volume contributing 6 percentage points to growth, pricing had a negative impact of 1 percentage point and generic competition had a negative impact of 4 percentage points mainly due to Afinitor and Exjade. Pharmaceuticals BU sales grew 2% (cc) driven by strong growth from Entresto, Cosentyx and Zolgensma. Growth was partly offset by declines in Established Medicines and mature Ophthalmology brands. Oncology BU sales were broadly in line with prior year (+1% cc). Strong performance of Promacta/Revolade, Jakavi, Tafinlar + Mekinist, Kymriah, Adakveo and Kisqali was offset by generic competition, mainly for Exjade and Afinitor. The COVID-19 pandemic continued to negatively impact dermatology and ophthalmology.

Sandoz net sales were USD 2.5 billion (+2%, 0% cc) with a volume increase of 3 percentage points. There was a negative price effect of 3 percentage points, despite the benefit from off-contract sales in the US. Global sales of Biopharmaceuticals grew 16% (cc), driven by continued strong growth in Europe.

Continuing operations full year

Net sales were USD 48.7 billion (+3%, +3% cc) in the full year mainly driven by Entresto, Zolgensma and Cosentyx. Volume contributed 9 percentage points to sales growth, partly offset by price erosion of 3 percentage points and the negative impact from generic competition of 3 percentage points.

Operating income was USD 10.2 billion (+12%, +19% cc) mainly driven by higher sales and productivity including lower spend.

Net income was USD 8.1 billion (+13%, +20% cc) mainly driven by higher operating income. EPS was USD 3.55 (+14%, +21% cc), growing faster than net income and benefiting from lower weighted average number of shares outstanding.

Core operating income was USD 15.4 billion (+9%, +13% cc) mainly driven by higher sales, improved gross margin and productivity including lower spend. Core operating income margin was 31.7% of net sales, increasing by 2.0 percentage points (+2.8 percentage points cc).

Core net income was USD 13.2 billion (+9%, +12% cc) mainly driven by growth in core operating income. Core EPS was USD 5.78 (+9%, +13% cc), growing faster than core net income and benefiting from lower weighted average number of shares outstanding.

Free cash flow from continuing operations amounted to USD 11.7 billion (-10%) compared to USD 12.9 billion in 2019, as higher operating income adjusted for non-cash items was more than offset by payments related to legal matters and lower divestment proceeds.

Innovative Medicines net sales were USD 39.0 billion (+3%, +4% cc) with volume contributing 10 percentage points to growth, pricing a negative 3 percentage points and generic competition had a negative impact of 3 percentage points. Pharmaceuticals BU grew 5% (cc) driven by Entresto (+44% cc), Zolgensma (reaching USD 0.9 billion), Cosentyx (+13% cc) and Ilaris (+31% cc). Growth was partly offset by declines in Gilenya, and lower demand for Lucentis due to COVID-19. Other Ophthalmology products were also impacted by both COVID-19 and generic competition. Oncology BU grew 3% (cc) driven by Promacta/Revolade (+23% cc), Jakavi (+20% cc), Kisqali (+45% cc), Tafinlar + Mekinist (+16% cc) and Piqray (reaching USD 0.3 billion), partly offset by generic competition mainly on Afinitor and Exjade.

Sandoz net sales were USD 9.6 billion (-1%, 0% cc) with volume growth of 2 percentage points despite the negative impact of COVID-19 mainly on the retail business. There was a negative price effect of 2 percentage points, despite the benefit from off-contract sales and favorable revenue deduction adjustments. Sales in Europe grew 2% (cc), while sales in the US declined 14%, due to the continued volume decline in oral solids including partnership terminations. Global sales of Biopharmaceuticals grew 19% (cc) to USD 1.9 billion, driven by continued double-digit growth across all regions.

Discontinued operations

Discontinued operations include the business of Alcon and certain corporate costs directly attributable to Alcon up to the spin-off date. As the Alcon spin-off was completed on April 9, 2019, the prior year included three months of operating results of the divested business.

In 2020, there were no operational activities related to discontinued operations. In the full year of 2019, discontinued operations net sales were USD 1.8 billion, operating income amounted to USD 71 million and net income from discontinued operations was USD 4.6 billion, including the non-taxable non-cash net gain on distribution of Alcon Inc. to Novartis AG shareholders which amounted to USD 4.7 billion. For further details see Note 2 "Distribution of Alcon Inc. to Novartis AG shareholders", Note 3 "Significant transactions – Completion of the spin-off of the Alcon business through a dividend in kind distribution to Novartis AG shareholders" and Note 10 "Discontinued operations" in the Condensed Financial Report.

Total Group full year

For the total Group, net income amounted to USD 8.1 billion compared to USD 11.7 billion in the prior year, including the non-taxable non-cash net gain on distribution of Alcon Inc. which amounted to USD 4.7 billion. Basic earnings per share was USD 3.55 compared to USD 5.12 in prior year. Cash flow from operating activities for the total Group amounted to USD 13.6 billion and free cash flow to USD 11.7 billion.

Q4 key growth drivers

Underpinning our financial results in the quarter is a continued focus on key growth drivers including:

Entresto (USD 716 million, +35% cc) sustained strong growth with increased patient share across markets, driven by demand as the essential first choice therapy for rEF heart failure.
Cosentyx (USD 1 109 million, +13% cc) saw continued growth despite lower new patient starts across the market in dermatology and rheumatology due to COVID-19.
Promacta/Revolade (USD 471 million, +23% cc) grew across all regions, driven by increased use in chronic immune thrombocytopenia and as first-line treatment for severe aplastic anemia in the US.
Jakavi (USD 376 million, +24% cc) growth was driven by strong demand in the myelofibrosis and polycythemia vera indications.
Zolgensma (USD 254 million, +33% cc) growth was driven by expansion outside the US, including reimbursement in the EU and Japan, despite COVID-19 impacts.
Tafinlar + Mekinist (USD 408 million, +13% cc) continued to show solid growth driven by demand in adjuvant melanoma as well as NSCLC.
Kymriah (USD 141 million, +42% cc) grew strongly in Europe, US and Japan. Coverage continued to expand, with more than 290 qualified treatment centers and 27 countries having coverage for at least one indication.
Mayzent (USD 57 million) continued to grow steadily, fulfilling an important unmet medical need in patients showing signs of progression.
Adakveo (USD 34 million) US launch continued to progress well, with more than 600 accounts purchasing Adakveo to date.
Kisqali (USD 184 million, +18% cc) continued strong growth across most geographies, benefiting from the ongoing impact of positive overall survival data.
Piqray (USD 84 million, +25% cc) continued growth in the US supported by further uptake of PIK3CA mutation testing. Piqray is now approved in more than 50 countries, including the US and EU member states.
Beovu (USD 37 million) launch roll-out continued, with approval now in 57 countries.
Biopharmaceuticals (USD 514 million, +16% cc) driven by continued strong growth in Europe.
Emerging Growth Markets* Overall, sales grew 4% (cc), with strong growth in China (+14% cc) to USD 659 million.
*All markets except the US, Canada, Western Europe, Japan, Australia and New Zealand

R&D update – key developments from the fourth quarter

New approvals and regulatory update

Leqvio Received EC approval for the treatment of adults with hypercholesterolemia or mixed dyslipidemia. Leqvio is the first and only approved small-interfering RNA (siRNA) low-density lipoprotein cholesterol (LDL-C) lowering treatment in Europe. Novartis received a CRL from the FDA due to unresolved facility inspection-related conditions at a third-party manufacturing facility in Europe. The FDA has not raised any concerns related to the efficacy or safety of inclisiran. Response to CRL planned to be submitted Q2 – Q3 2021.
Adakveo

Received EC approval for the prevention of recurrent vaso-occlusive crises (VOCs), or pain crises, in patients with sickle cell disease. Adakveo is the first targeted sickle cell disease therapy for the prevention of VOCs in Europe.
Entresto

FDA Cardiovascular and Renal Drugs Advisory Committee (CRDAC) voted 12 to 1 to support the use of Entresto in treatment of patients with heart failure with preserved ejection fraction (HFpEF). PDUFA date is in Q1 2021.
Iptacopan
(LNP023)

EMA granted orphan drug designation for iptacopan (LNP023) in IgA nephropathy (IgAN), an inflammatory kidney disease leading to deteriorating kidney function in mainly young adults.

FDA granted Rare Pediatric Disease Designation1 in C3G, a rare renal disease affecting young patients with a poor prognosis and significant unmet need. Additionally, Breakthrough Therapy Designation was granted in paroxysmal nocturnal hemoglobinuria, a life-threatening blood disorder.
Ligelizumab
(QGE031) FDA granted Breakthrough Therapy designation for chronic spontaneous urticaria, an unpredictable and severe disease of the skin with limited approved therapies.
1 FDA grants the rare pediatric designation for serious or life-threatening diseases primarily affecting individuals aged 18 years or younger and impacting fewer than 200,000 people

Results from ongoing trials and other highlights

Beovu

Phase III KESTREL study in diabetic macular edema (DME) met its primary endpoint, with Beovu 6mg demonstrating non-inferiority to aflibercept 2mg in change in best-corrected visual acuity at year one. Beovu demonstrated an overall well-tolerated safety profile. Novartis announced positive topline results from another pivotal phase III study in DME, KITE, in September 2020. Submission planned for H1 2021.
Asciminib
(ABL001)

Phase III ASCEMBL data in Philadelphia chromosome-positive chronic myeloid leukemia in chronic phase, presented at the American Society of Hematology (ASH) (Free ASH Whitepaper), showed that at 24 week the investigational STAMP inhibitor asciminib nearly doubled the major molecular response rate compared to bosutinib (25.5% versus 13.2%), in patients resistant to, or intolerant of, at least two prior tyrosine kinase inhibitor therapies.
Kisqali Phase III MONALEESA-7 trial demonstrated nearly five years of median overall survival in in pre- and perimenopausal women with HR+/HER2- metastatic breast cancer. After a median of 53.5 months follow-up, median OS for patients taking Kisqali in combination with endocrine therapy was 58.7 months versus 48.0 months for endocrine therapy alone.

Data presented at the San Antonio Breast Cancer Symposium demonstrated that Kisqali delivers consistent efficacy across the main HR+/HER2- intrinsic subtypes. Ad hoc exploratory analysis showed that Kisqali plus endocrine therapy consistently provided significant progression-free survival benefit across three of four subtypes of HR+/HER2- metastatic breast cancer.
Kymriah Phase II investigational ELARA study interim analysis, presented at the American Society of Hematology (ASH) (Free ASH Whitepaper), demonstrated that Kymriah led to a complete response in 65% of patients with relapsed or refractory follicular lymphoma and an overall response rate of 83% after at least three months.

Phase II JULIET trial 40 months follow-up analysis demonstrated that the two-year progression-free survival rate was 33% in patients with relapsed or refractory diffuse large B-cell lymphoma.
Jakavi Phase III REACH3 study, presented at the American Society of Hematology (ASH) (Free ASH Whitepaper), met its primary endpoint with Jakavi significantly improving outcomes in patients with steroid-refractory/dependent chronic graft-versus-host disease compared to best available therapy (BAT). Patients treated with Jakavi achieved significantly greater overall response rate compared to BAT (49.7% versus 25.6%) at week 24.
Cosentyx

Phase IIIb ULTIMATE trial demonstrated significant treatment response of Cosentyx on synovitis in psoriatic arthritis versus placebo at week 12, with improvements seen as early as week 1. Safety profile was consistent with previous studies. Data was presented at the American College of Rheumatology.

Cosentyx received EC approval for a new 300mg autoinjector and pre-filled syringe, which enable the 300mg dose to be administered in a single injection.
Leqvio Pooled post-hoc analyses from Phase III ORION-9, -10 and -11 trials, showed that Leqvio consistently reduced low-density lipoprotein cholesterol by approximately 51% in both male and female adult patients and in three age categories (−51.3% <65 years; −49.9% ≥65 years to <75 years; −51.0% ≥75 years).
Aimovig

Phase IV HER-MES trial met its primary and secondary endpoints, demonstrating superiority against topiramate in treating patients with episodic and chronic migraine. Aimovig had less discontinuation over the course of the 24-week treatment phase and a greater proportion of patients achieving at least 50% reduction in their monthly migraine days.
Tislelizumab In January, announced expansion of Oncology portfolio, by in-licensing a late-stage anti-PD1 antibody, tislelizumab, from BeiGene for monotherapy and potential proprietary combinations. Novartis secured development and commercialization rights in North America, Europe and Japan. Tislelizumab is already approved for patients with classical Hodgkin’s lymphoma and metastatic urothelial carcinoma in China and has 15 registration-enabling clinical trials underway in non-small cell lung cancer and other solid tumors. (Subject to closing conditions; closing expected H1 2021).
Capital structure and net debt

Retaining a good balance between investment in the business, a strong capital structure and attractive shareholder returns remains a priority.

In 2020, Novartis repurchased a total of 32.6 million shares for USD 2.9 billion on the SIX Swiss Exchange second trading line, including 8.0 million shares (USD 0.7 billion) bought back under the up to USD 2.5 billion share buyback announced in November 2020 and 24.6 million shares (USD 2.2 billion) to mitigate dilution related to participation plans of associates. In addition, 1.7 million shares (USD 0.2 billion) were repurchased from associates. In the same period, 26.1 million shares (for an equity value of USD 1.5 billion) were delivered as a result of options exercised and share deliveries related to participation plans of associates. Consequently, the total number of shares outstanding decreased by 8.2 million versus December 31, 2019. These treasury share transactions resulted in a decrease in equity of USD 1.6 billion and a net cash outflow of USD 2.1 billion including the benefit from net option proceeds.

As of December 31, 2020, the net debt increased to USD 24.5 billion compared to USD 15.9 billion at December 31, 2019. The increase was mainly driven by the acquisition of The Medicines Company for USD 9.6 billion, the USD 7.0 billion annual dividend payment and net cash outflow for treasury share transactions of USD 2.1 billion, partly offset by USD 11.7 billion free cash flow during 2020.

As of Q4 2020, the long-term credit rating for the company is A1 with Moody’s Investors Service and AA- with S&P Global Ratings.

The Group has not experienced liquidity or cash flow disruptions during 2020 due to the COVID-19 pandemic. We are confident that Novartis is well positioned to meet its ongoing financial obligations and has sufficient liquidity to support our normal business activities.

2021 outlook

Barring unforeseen events

Continuing operations (Excluding Alcon from both 2019 and 2020)

Net Sales Expected to grow low to mid single digit (cc)

From a divisional perspective, we expect net sales performance (cc) in 2021 to be as follows:
Innovative Medicines: expected to grow mid single digit
Sandoz: expected to be broadly in line with prior year
Core operating income Expected to grow mid single digit, ahead of sales (cc)
Our guidance assumes that we see a return to normal global healthcare systems including prescription dynamics by mid 2021. In addition, we assume that no Gilenya and no Sandostatin LAR generics enter in 2021 in the US.

Foreign exchange impact
If late-January exchange rates prevail for the remainder of 2021, the foreign exchange impact for the year would be positive 3 to 4 percentage points on net sales and positive 3 percentage points on core operating income. The estimated impact of exchange rates on our results is provided monthly on our website.

Annual General Meeting

Dividend proposal
The Novartis Board of Directors proposes a dividend payment of CHF 3.00 per share for 2020, up 1.7% from CHF 2.95 per share in the prior year, representing the 24th consecutive dividend increase since the creation of Novartis in December 1996. Shareholders will vote on this proposal at the 2021 Annual General Meeting.

Reduction of Share Capital
The Novartis Board of Directors proposes to cancel 32 640 000 shares (repurchased under the eighth share repurchase program in 2020) and to reduce the share capital accordingly by CHF 16 320 000, from CHF 1 233 530 460 to CHF 1 217 210 460.

Further Share Repurchases
The Novartis Board of Directors proposes that shareholders authorize the Board of Directors to repurchase shares as deemed appropriate from time to time up to a maximum of CHF 10 billion between the Annual General Meeting 2021 and the Annual General Meeting 2024.

Re-elections of the Chairman and the members of the Board of Directors
The Novartis Board of Directors proposes the re-election of Joerg Reinhardt (also as Chairman), Nancy C. Andrews, Ton Buechner, Patrice Bula, Elizabeth Doherty, Ann Fudge, Bridgette Heller, Frans van Houten, Simon Moroney, Andreas von Planta, Charles L. Sawyers, Enrico Vanni, and William T. Winters as members of the Board of Directors.

Following his appointment as Dean of Harvard Business School as of January 1, 2021, Srikant Datar has decided not to seek another term of office. The Board of Directors and the Executive Committee of Novartis congratulate Srikant Datar to his appointment and thank him for his outstanding contributions to the company.

Re-elections and elections to the Compensation Committee
The Novartis Board of Directors proposes the re-election of Patrice Bula, Bridgette Heller, Enrico Vanni, and William T. Winters and the election of Simon Moroney as members of the Compensation Committee. The Board of Directors intends to designate Simon Moroney as Chairman of the Compensation Committee, subject to his election as a member of the Compensation Committee.

Executive Committee Novartis

The newly formed Customer & Technology Solutions (CTS), effective February 1, 2021, will be led by Robert Weltevreden. Chief Digital Officer, Bertrand Bodson, had previously indicated that his next aspiration is towards leading a global business. Therefore, he will step down from the Novartis Executive Committee on February 1, 2021. Vas Narasimhan would like to thank Bertrand for his role as architect of our digital transformation, exceptional leadership and lasting impact in setting up the Digital Function.

1 Continuing operations include the businesses of Innovative Medicines and Sandoz Division as well as the continuing corporate functions and discontinued operations include the business of Alcon. See page 43 of the Condensed Financial Report for full explanation.
2 Constant currencies (cc), core results and free cash flow are non-IFRS measures. An explanation of non-IFRS measures can be found on page 55 of the Condensed Financial Report. Unless otherwise noted, all growth rates in this Release refer to same period in prior year.

On January 26, 2021 ISA Pharmaceuticals B.V. reported that the first patient has been dosed with its lead product ISA101b in a Phase II trial conducted and sponsored by UPMC Hillman Cancer Center, the University of Pittsburgh, PA, and supported by Merck Sharp & Dohme Corp and ISA Pharmaceuticals B.V (Press release, ISA Pharmaceuticals, JAN 26, 2021, View Source [SID1234574281]).

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The study in previously untreated patients with intermediate-risk head and neck cancer associated with human papilloma virus subtype 16 (HPV-16) will evaluate the efficacy of ISA101b and pembrolizumab (Keytruda) in combination with cisplatin and radiotherapy. The principal investigator is Robert L. Ferris MD, PhD, Director of UPMC Hillman Cancer Center in Pittsburgh and Associate Vice Chancellor for Cancer Research at the University of Pittsburgh School of Medicine. Dr. Ferris is a paid member of the US Scientific Advisory Board for the Merck Sharp & Dohme Corp. This study was supported in part by a research grant from the Investigator-Initiated Studies Program of Merck Sharp & Dohme Corp.

The investigator-initiated, single-arm, open-label ‘Phase II Study Evaluating HPV-16 vaccination (ISA101b) and Pembrolizumab plus Cisplatin Chemoradiotherapy for Intermediate Risk HPV-16 associated Head and Neck Squamous Cell Carcinoma’ aims to enroll 50 patients with end of enrollment expected in late 2022.

The primary endpoint of the trial is 2-year progression-free survival (PFS) in patients with newly diagnosed, local-regionally advanced, intermediate risk HPV-associated head and neck cancer.

"For head and neck cancer patients at risk for tumor recurrence, chemo- and radiation therapy are being combined with PD-1 immune checkpoint inhibitors," said Dr. Ferris. "We seek to leverage the effect of immunotherapy to enhance T cell specific immune responses against HPV, to provide for a more profound and durable anti-tumor effect. To explore this, we have chosen the synthetic long peptide (SLP) therapeutic HPV immunotherapy ISA101b. ISA Pharmaceuticals has demonstrated that HPV, as the predominant cause of this type of cancer, harbours powerful antigens against which virus-specific T cells will mount an attack on the cancer, and we will attempt to enhance this benefit using anti-PD1 pembrolizimab."

"Currently immunotherapies combined with additional treatments are emerging as the most promising approach in oncology," said Prof. Cornelis Melief, Chief Scientific Officer of ISA Pharmaceuticals. "Consistent with this, we have demonstrated in multiple trials that ISA101b is highly synergistic with various complementary cancer treatments. Our product has shown very promising results in Phase II combination trials with standard chemotherapy1 and the checkpoint inhibitor nivolumab2. This new trial will provide valuable insights into the effect of immunomodulation in the early stage adjuvant setting, in addition to our ongoing randomized Phase II ISA101b trial with cemiplimab in late stage oropharyngeal cancer. We very much look forward to the results."

On January 25, 2021 BridgeBio Pharma, Inc. (Nasdaq: BBIO) (the "Company," "we" or "BridgeBio") announced today the pricing of $650 million aggregate principal amount of 2.25% convertible senior notes due 2029 (the "notes") in a private offering (the "offering") to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The offering was upsized from the previously announced offering of $400 million aggregate principal amount of notes. In connection with the offering, the Company granted the initial purchasers an option to purchase up to an additional $97.5 million aggregate principal amount of notes. The sale of the notes is expected to close on January 28, 2021, subject to customary closing conditions.

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The notes will bear interest at a rate of 2.25% per year, payable semi-annually in arrears on February 1 and August 1 of each year, beginning August 1, 2021. The notes will mature on February 1, 2029, unless earlier converted, redeemed or repurchased. Prior to November 1, 2028, the notes will be convertible only upon satisfaction of certain conditions and during certain periods. Thereafter, the notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The notes will be convertible at the option of the holders, subject to certain conditions and during certain periods, into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, with the form of consideration determined at the Company’s election.

The conversion rate will initially be 10.3050 shares of the Company’s common stock per $1,000 principal amount of notes (equivalent to an initial conversion price of approximately $97.04 per share of the Company’s common stock). The initial conversion price of the notes represents a premium of approximately 47.5% over the last reported sale price of the Company’s common stock of $65.79 per share on January 25, 2021.

The Company may not redeem the notes prior to February 6, 2026. On or after February 6, 2026 and on or before the 41st scheduled trading day immediately before the maturity date of the notes, the Company may redeem for cash all or any portion of the notes, at its option at any time, and from time to time, if the last reported sale price of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption at a redemption price equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest to, but excluding, the redemption date.

Holders of the notes will have the right to require the Company to repurchase all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain events.

When issued, the notes will be the Company’s senior unsecured obligations and will rank senior in right of payment to any of the Company’s unsecured indebtedness that is expressly subordinated in right of payment to the notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated (including the Company’s 2.50% Convertible Senior Notes due 2027); effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.

In connection with the pricing of the notes, the Company entered into privately negotiated capped call transactions with certain of the initial purchasers and/or their respective affiliates and certain other financial institutions (the "option counterparties"). These capped call transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction of potential dilution and/or offset of cash payments subject to a cap. The cap price of the capped call transactions will initially be $131.58 per share, which represents a premium of 100% over the last reported sale price of the Company’s common stock of $65.79 per share on January 25, 2021, and is subject to certain adjustments under the terms of the capped call transactions.

The Company has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to the Company’s common stock concurrently with or shortly after the pricing of the notes and/or purchase shares of the Company’s common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of the Company’s common stock, the notes or the Company’s 2.50% Convertible Senior Notes due 2027 at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Company’s common stock and/or purchasing or selling the Company’s common stock or other securities of the Company in secondary market transactions from time to time prior to maturity of the notes (and are likely to do so following any conversion of the notes, any redemption date or any repurchase of the notes by the Company on any fundamental change repurchase date or otherwise, in each case, if the Company exercises the relevant election under the capped call transactions). This activity could also cause or avoid an increase or a decrease in the market price of the Company’s common stock or the notes, which could affect the ability of holders to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of the notes, it could affect the number of shares of the Company’s common stock, if any, and value of the consideration that holders will receive upon conversion of the notes.

Further, if any such capped call transactions fail to become effective, whether or not the offering of notes is completed, the option counterparties or their respective affiliates may unwind their hedge positions with respect to the Company’s common stock, which could adversely affect the value of the Company’s common stock and, if the notes have been issued, the value of the notes.

The Company estimates that the net proceeds from the offering of notes will be approximately $635 million (or approximately $731 million if the initial purchasers exercise their option to purchase additional notes in full), after deducting the initial purchasers’ discounts and estimated offering expenses payable by the Company. The Company intends to use $53.3 million of the net proceeds from the offering of the notes to pay the cost of the capped call transactions, and approximately $50 million of the net proceeds from the offering to repurchase shares of its common stock concurrently with the closing of the offering from certain purchasers of the notes in privately negotiated transactions entered into through one or more of the initial purchasers or an affiliate thereof concurrently with the pricing of the notes (such transactions, the "share repurchases"). The agreed to purchase price per share of the Company’s common stock in such share repurchases is equal to the last reported sale price of the Company’s common stock of $65.79 per share on the Nasdaq Global Select Market on January 25, 2021. The share repurchases could increase (or reduce the size of any decrease in) the market price of the Company’s common stock. If the initial purchasers exercise their option to purchase additional notes in full, the Company expects to use approximately $8.0 million of the net proceeds from the sale of such additional notes to enter into additional capped call transactions. The Company intends to use the remainder of the net proceeds from the offering for general corporate purposes, which may include research and development and clinical development costs to support the advancement of the Company’s drug candidates, including the continued growth of the Company’s commercial and medical affairs capabilities, the conduct of clinical trials and preclinical research and development activities; working capital; capital expenditures; repayment of outstanding indebtedness; general and administrative expenses; and other general corporate purposes. The Company may also use net proceeds to fund potential acquisitions of, or investments in, complementary businesses, products, services and technologies. The Company has not entered into any agreements or commitments with respect to any material acquisitions or investments at this time that would be financed with any of the net proceeds from the offering of notes. From time to time, to maintain or increase the Company’s ownership position in its subsidiaries, the Company may make additional investments in or purchase equity in its subsidiaries. These expectations and intentions are subject to change.

The notes and the shares of common stock issuable upon conversion of the notes, if any, are not being registered under the Securities Act, or the securities laws of any other jurisdiction. The notes and the shares of common stock issuable upon conversion of the notes, if any, may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration requirements of the Securities Act and any applicable state securities laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

On January 25, 2021 BridgeBio Pharma, Inc. (Nasdaq: BBIO) (the "Company," "we" or "BridgeBio") reported that it intends to offer, subject to market conditions and other factors, $400 million aggregate principal amount of convertible senior notes due 2029 (the "notes") in a private offering (the "offering") to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act") (Press release, BridgeBio, JAN 25, 2021, View Source [SID1234576238]). In connection with the offering, the Company expects to grant the initial purchasers an option to purchase up to an additional $60 million aggregate principal amount of notes.

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The final terms of the notes, including the initial conversion rate, interest rate and certain other terms, will be determined at the time of pricing. The notes will bear interest semi-annually and will mature on February 1, 2029, unless earlier converted, redeemed or repurchased. Prior to November 1, 2028, the notes will be convertible only upon satisfaction of certain conditions and during certain periods. Thereafter, the notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The notes will be convertible at the option of the holders, subject to certain conditions and during certain periods, into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, with the form of consideration determined at the Company’s election.

The Company may not redeem the notes prior to February 6, 2026. On or after February 6, 2026 and on or before the 41st scheduled trading day immediately before the maturity date of the notes, the Company may redeem for cash all or any portion of the notes, at its option at any time, and from time to time, if the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. Holders of the notes will have the right to require the Company to repurchase all or a portion of their notes at 100% of their principal amount, plus any accrued and unpaid interest, upon the occurrence of certain events.

When issued, the notes will be the Company’s senior unsecured obligations and will rank senior in right of payment to any of the Company’s unsecured indebtedness that is expressly subordinated in right of payment to the notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated (including the Company’s 2.50% Convertible Senior Notes due 2027); effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.

In connection with the pricing of the notes, the Company expects to enter into privately negotiated capped call transactions with one or more of the initial purchasers and/or their respective affiliates or other financial institutions (the "option counterparties"). These capped call transactions are expected generally to reduce the potential dilution to the Company’s common stock upon any conversion of the notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted notes, as the case may be, with such reduction of potential dilution and/or offset of cash payments subject to a cap.

The Company has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into various derivative transactions with respect to the Company’s common stock concurrently with or shortly after the pricing of the notes and/or purchase shares of the Company’s common stock concurrently with or shortly after the pricing of the notes. This activity could increase (or reduce the size of any decrease in) the market price of the Company’s common stock, the notes or the Company’s 2.50% Convertible Senior Notes due 2027 at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to the Company’s common stock and/or purchasing or selling the Company’s common stock or other securities of the Company in secondary market transactions following the pricing of the notes and prior to maturity of the notes (and are likely to do so following any conversion of the notes, any redemption date or any repurchase of the notes by the Company on any fundamental change repurchase date or otherwise, in each case, if the Company exercises the relevant election under the capped call transactions). This activity could also cause or avoid an increase or a decrease in the market price of the Company’s common stock or the notes, which could affect the ability of holders to convert the notes and, to the extent the activity occurs during any observation period related to a conversion of the notes, it could affect the number of shares of the Company’s common stock, if any, and value of the consideration that holders will receive upon conversion of the notes.

Further, if any such capped call transactions fail to become effective, whether or not the offering of notes is completed, the option counterparties or their respective affiliates may unwind their hedge positions with respect to the Company’s common stock, which could adversely affect the value of the Company’s common stock and, if the notes have been issued, the value of the notes.

The Company intends to use a portion of the net proceeds from the offering of the notes to pay the cost of the capped call transactions, and up to approximately $50 million of the net proceeds from the offering to repurchase shares of its common stock from certain purchasers of the notes in privately negotiated transactions effected through one or more of the initial purchasers or an affiliate thereof concurrently with the pricing of the notes (such transactions, the "share repurchases"). If the initial purchasers exercise their option to purchase additional notes, the Company expects to use a portion of the net proceeds from the sale of such additional notes to enter into additional capped call transactions.

The Company intends to use the remainder of the net proceeds from the offering for general corporate purposes, which may include research and development and clinical development costs to support the advancement of the Company’s drug candidates, including the continued growth of the Company’s commercial and medical affairs capabilities, the conduct of clinical trials and preclinical research and development activities; working capital; capital expenditures; repayment of outstanding indebtedness; general and administrative expenses; and other general corporate purposes. The Company may also use net proceeds to fund potential acquisitions of, or investments in, complementary businesses, products, services and technologies. The Company has not entered into any agreements or commitments with respect to any material acquisitions or investments at this time that would be financed with any of the net proceeds from the offering of notes. From time to time, to maintain or increase the Company’s ownership position in its subsidiaries, the Company may make additional investments in or purchase equity in its subsidiaries. These expectations and intentions are subject to change.

The Company expects the purchase price per share of its common stock in the share repurchases to equal the last reported sale price per share of its common stock on the Nasdaq Global Select Market as of the date of the pricing of the notes. The share repurchases could increase (or reduce the size of any decrease in) the market price of the Company’s common stock prior to, concurrently with or shortly after the pricing of the notes, and could result in a higher effective conversion price for the notes.

The notes and the shares of common stock issuable upon conversion of the notes, if any, are not being registered under the Securities Act, or the securities laws of any other jurisdiction. The notes and the shares of common stock issuable upon conversion of the notes, if any, may not be offered or sold in the United States except in transactions exempt from, or not subject to, the registration requirements of the Securities Act and any applicable state securities laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

On January 25, 2021 BioVaxys Technology Corp. (CSE: BIOV) (FRA: 5LB) (OTC: LMNGF) ("BioVaxys" or "Company") reported to provide a corporate update on recent advancements of its vaccine platforms, and viral diagnostic and corporate objectives for 2021 (Press release, BioVaxys Technology, JAN 25, 2021, View Source [SID1234575050]). BioVaxys is pleased to announce that it has commenced the clinical development program for BVX-0918A, its haptenized tumor antigen vaccine for ovarian cancer. The Company plans to seek a compassionate use approval in the European Union ("EU") for Stage III & Stage IV ovarian cancer, followed by submitting an IND in the US. BioVaxys is in discussions with its designated Contract Manufacturing Organization ("CMO") and anticipates the execution of a manufacturing contract in 1Q21. The Company plans to submit its Clinical Trial Application ("CTA") for BVX-0918A with the European Medicines Agency ("EMEA") later this year.

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There are significant unmet therapeutic needs for ovarian cancer treatment. Over 240,000 women are currently diagnosed with ovarian cancer worldwide, and over 140,200 succumbed to the disease. Ovarian cancer is the leading cause of death from gynecologic malignancy in the United States. An estimated 21,750 new cases of ovarian cancer are expected in the United States in 2020 with 13,940 deaths. The case-to-fatality ratio is nearly three times that of breast cancer and makes ovarian cancer the deadliest gynecologic malignancy in developed countries. Like other cancers, the stage of disease is inversely proportional to survival. The 5-year relative survival rate in all stages of the disease is approximately 45%. However, ovarian cancer is usually asymptomatic in the early stages (Stage I and Stage II), and therefore about 80% of patients are diagnosed with advanced stage disease (stages III and IV). The 5-year survival rate for stage III and IV patients is approximately 29%.[1]

BioVaxys has developed its vaccine technology platforms based on the established immunological concept that modifying tumor or viral antigens with simple chemicals called haptens makes them more visible to the immune system. The process of haptenization "teaches" a patient’s immune system to recognize and make target proteins more ‘visible’ as foreign, thereby stimulating an immune response. In Phase I and Phase II clinical studies previously conducted by BioVaxys, co-founder and Chief Medical Officer, David Berd MD, using an earlier generation of the BioVaxys cancer vaccine on nearly 500 patients with melanoma or ovarian cancer, the haptenized cell platform showed significant clinical promise. BioVaxys Founder, President & Chief Operating Officer Ken Kovan says: "The autologous approach may have advantages over other approaches, such as those involving a search for specific antigens. Because autologous tumor cells by definition have the patient’s unique set of antigens already on them, the challenge is to increase the immune system’s ability to recognize the ovarian tumor cells as foreign, breaking the "self-tolerance". A way to achieve this is by the use of a hapten, which is the foundation for the BioVaxys’ haptenized protein vaccine platform."

BioVaxys intends to develop its vaccine together with a "checkpoint inhibitor" that reduces or decreases the cellular function of an immune checkpoint gene or gene product. Checkpoint inhibitors are a type of drug that blocks proteins called ‘checkpoints’ that are made by some types of immune system cells, such as T cells and some cancer cells. These checkpoints help keep immune responses from being too strong, but also can sometimes keep T cells from killing cancer cells. When these checkpoints are blocked, T cells can more effectively kill cancer cells. BioVaxys’ focus is on combinations of immune checkpoint inhibitors with its haptenized tumor antigen vaccine—primarily anti-CTLA4, anti-PD1, or PDL1 checkpoint antibodies—for treatment of ovarian cancer and other solid tumors. BioVaxys’ rationale is that there is (1) a persistent unmet clinical need because the majority of ovarian cancer patients do not benefit from anti-checkpoint monotherapy; (2) evidence that not all patients make immune responses to their tumors; (3) evidence that immune responses to autologous tumor antigens can be induced by patient-specific vaccines; and (4) clinical evidence from the pre-checkpoint era that suggests survival can be positively impacted by such patient-specific vaccines.

BioVaxys also recently completed its preclinical program for its SARS-CoV-2 vaccine candidate, BVX-0320, which included those studies suggested by the U.S. Department of Health and Human Services, Food and Drug Administration ("FDA") Center for Biologics Evaluation and Research "(CBER") in their published guidance on Development and Licensure of Vaccines to Prevent COVID-19.

Source: (1) American Cancer Society, Cancer facts and figures; (2) Cannistra SA. Cancer of the Ovary. N Engl J Med 2004 Dec 9;351(24):2519-29; and (3) McGuire WP, Hoskins WJ, Brady MF, Kucera PR, Partridge EE, Look KY, et al. Cyclophosphamide and cisplatin compared with paclitaxel and cisplatin in patients with stage III and stage IV ovarian cancer. N Engl J Med 1996;334(1):1-6.

The FDA’s non-binding Guidance is intended to assist in the clinical development and licensure of vaccines for the prevention of COVID-19, and reflect the Agency’s current thinking on the issue. Conducted by Charles River Laboratories, Inc. under contract with BioVaxys, the preclinical program which began in September 2020 evaluated the anti-virus immune response elicited by BVX-0320 in a controlled murine model by measuring the development of antibodies to the protein that binds the virus to human cells. Following two injections of BVX-0320 together with the immunological adjuvant, QS21, to 28 mice at four dosage levels, 96.4% developed positive antibody responses detected at week 6. The BioVaxys team also found that its haptenized SARS-CoV-2 s-spike vaccine activated CD4+ helper T-cells and CD8+ killer T-cells that express the activation markers, CD69 and CD25. This result indicates that immunization with BVX-0320 at two different dose levels of 3µg or 10µg stimulated immune system memory ‘helper’ T-cells as well as killer T-cells. CD4+ T-cells are crucial in achieving a regulated effective immune response to viral pathogens, and are central to adaptive immune responses. Generated following an immune response, memory ‘helper’ CD4+ T-cells retain information about the virus, which enables them to respond rapidly after viral exposure. CD8+ T-cells have the capacity to kill cells infected by the virus, thereby stopping viral replication in those cells.

Under a BioVaxys-sponsored research collaboration with The Ohio State University ("OSU") Wexner School of Medicine, the OSU researchers used the available remaining mouse sera from the immune response assay to conduct a Plaque Reduction Neutralization Test, where the endpoint is reduction of plaques by 50%, where it was observed in a pooled sample that BVX-0320 elicited the production of neutralizing antibodies to SARS-CoV-2. Plaques are produced by infection of cultured human cells by a live SARS-CoV-2 virus. OSU is one of the few institutions that has the laboratory capability to study live SARS-CoV-2 virus.

Recently, two new strains of SARS-Cov-2 have been identified in the UK and South Africa – B.1.1.7 and 501Y.V2, respectively. Both strains exhibit a number of mutations, some of them in the spike protein. The mutation of most concern, found in both new strains, is the one in spike protein position 501, one of the key contact points in the receptor binding domain. Experimental data suggest that this mutation, called 501Y, can increase binding of the virus to human cells through the ACE2 receptor. This change could result in more rapid transmission of the virus between individuals and thus more rapid spread of Covid-19. There is also concern that the recent approved vaccines may not be completely effective against these new strains.

The BioVaxys haptenization strategy constitutes a platform technology in that it is adaptable to almost any virus-derived protein. The haptenization of viral proteins imparts BioVaxys with the flexibility of a ‘cassette-type’ approach not possible with other vaccines, where they can "swap in" the appropriate viral antigen(s) for haptenization and the creation of a new vaccine, potentially allowing for faster development timelines relative to other vaccine approaches.

BioVaxys proposes to respond to these potentially dangerous events by modifying its Covid-19 vaccine, BVX-0320. The original version contained the S1 subunit of the spike protein that was dominant in viral isolates at the beginning of the pandemic. A new SARS-CoV-2 vaccine candidate, BVX-0121, is under internal evaluation which would include modifications to address the emerging strains. This would a bivalent or trivalent vaccine containing the original S1 plus the S1 from one or both of the UK and South African strains. The manufacturing process would be similar to that of BVX-0320. BioVaxys plans to collaborate with a pharma partner and jointly seek government funding for the Phase II program.

BioVaxys’ Covid-19 diagnostic, Covid-T, has the potential of detecting differences in T cells responses between the original virus and the two new strains. Current methods of measuring T cell immunity require the drawing of blood from the test subject and a time-consuming and expensive analysis of the blood sample at laboratories possessing specialized equipment. What is needed is a simple, low-cost, easy-to-administer, and accurate tool to test for the presence of T cells against SARS-CoV-2 to identify safe and at-risk populations. Covid-T provides a low-cost, easy-to-administer, and accurate tool to test for the presence of T cells against SARS-CoV-2, and to evaluate the effectiveness of any SARS-CoV-2 vaccine candidate in stimulating T cell immunity. Mass availability of this low cost and easy-to-administer T cell immunity diagnostic would complement antibody testing and various public health risk mitigation strategies.

Subjects would be simultaneously tested for delayed-type hypersensitivity to all three S1 variants. The size of the DTH reactions is compared for each subject. The Company has engaged a global regulatory advisory group, is contracting with an FDA-approved Contract Development and Manufacturing Organization (CDMO) for a cell line, expression system and cloning expertise to source GMP-grade s-1 protein, and is preparing an FDA pre-submission guidance package with delivery to the FDA anticipated shortly. A non-GMP animal toxicity study is scheduled for this March, followed by the proposed Phase I study this summer.

For greater certainty, BioVaxys is not making any express or implied claims that it has the ability to treat the SAR-CoV-2 virus at this time.