Contract analysis

I. ISSUE The U.S. Food and Drug Administration ("FDA") has issued a Written Request under the Pediatric Research Equity Act ("PREA"), 21 U.S.C. § 355c, requiring Penterra Pharmaceuticals Corp. ("Penterra" or "PPC") to conduct clinical studies of velonatib hydrochloride (VELONATIB®) in pediatric patients ages 12 through 17 with moderate-to-severe chronic plaque psoriasis. The Written Request was issued in connection w

II. BACKGROUND A. The Drug and Proposed Indication Velonatib hydrochloride, marketed under the brand name VELONATIB®, is a selective Janus kinase 1 (JAK-1) inhibitor administered as oral tablets in two dosage strengths: 5 mg and 10 mg. Velonatib was originally approved by FDA on June 14, 2019, under NDA No. 215-847, for the treatment of moderate-to-severe rheumatoid arthritis ("RA") in adults who have had an inadequa

III. LEGAL FRAMEWORK — PEDIATRIC RESEARCH EQUITY ACT A. General PREA Requirements Under PREA, codified at 21 U.S.C. § 355c(a)(2), an applicant submitting a supplemental new drug application for a new indication is required to submit with the application assessments of the safety and effectiveness of the drug for the claimed indication in all relevant pediatric subpopulations for which the indication is applicable. Th

IV. THE WRITTEN REQUEST A. Issuance. On June 3, 2022, FDA issued a Written Request to Penterra for a pediatric clinical study of velonatib in adolescents ages 12 through 17 with moderate-to-severe chronic plaque psoriasis. The Written Request was issued pursuant to 21 U.S.C. § 355a and was directed to Penterra's Regulatory Affairs department. The Written Request followed the indications provided by the review divisio

V. THE DEFERRAL A. Penterra's Deferral Request Following receipt of the Written Request on June 3, 2022, Penterra prepared and submitted a deferral request to FDA. The deferral request cited two principal grounds for the deferral: (i) The drug is ready for approval for use in adults (pending successful results from the confirmatory CLARION-3 trial) before any pediatric study could be designed, enrolled, and completed

VI. ONGOING OBLIGATIONS A. Annual Progress Reports Regardless of the status of the adult sNDA — whether the sNDA has been submitted, is under review, has been approved, or has not yet been submitted — the deferral letter requires Penterra to submit annual progress reports to FDA on the status of the deferred pediatric study. This obligation attaches to the deferral itself and is not contingent on any other milestone

VII. IMPLICATIONS OF ENGAGEMENT DORMANCY Although this memorandum is dated September 8, 2022 — before the completion and read-out of CLARION-3 and any potential disruption to the sNDA timeline — this section is intended to address forward-looking obligations that will apply if, for any reason, the sNDA effort enters a period of dormancy or is placed on hold. Such a scenario could arise if, for example, the CLARION-3

1. Annual Reports Remain Due. The obligation to submit annual progress reports to FDA by September 26 of each year does not depend on whether the adult sNDA has been filed, whether the engagement with outside counsel is active, or whether the adult clinical program is progressing on its original timeline. This obligation arises from the deferral grant letter and runs independently of the sNDA process. Penterra's Regu

2. The Deferral Does Not Expire Due to sNDA Delay. A delay in the submission of the adult sNDA does not, in and of itself, cause the deferral to expire. The 18-month clock for submission of pediatric study results does not begin running until the adult indication is approved, and the deferral remains in effect during the pendency of the adult regulatory process. However, FDA retains the authority to inquire about the

3. Pediatric Exclusivity Timeline. The six-month pediatric exclusivity benefit under 21 U.S.C. § 355a is tied to the successful completion of the pediatric study in accordance with the terms of the Written Request. Delays in the adult program do not directly affect the availability of the exclusivity incentive, which remains available as long as the Written Request is in effect and the pediatric study is completed in

VIII. COORDINATION WITH OTHER ADVISORS The pediatric study obligation and associated regulatory strategy will require coordination among several of Penterra's outside advisors. We set forth below the key coordination points for each. A. Callendar Baines Group LLC Callendar Baines Group LLC ("CBG") is retained by Penterra to provide clinical development consulting and advisory services. CBG's engagement is led by Dr.

IX. RECOMMENDATIONS Based on our analysis of the Written Request, the deferral, and the applicable legal framework, we offer the following recommendations:

1. Calendar Annual Report Deadlines. Penterra Regulatory Affairs, under the direction of Dr. Karen Hessler, should immediately calendar the annual progress report due dates — September 26 of each year, beginning September 26, 2023 — and establish an internal reminder and workflow process to ensure timely preparation and submission of these reports. The reminder process should be designed to function independently of

2. Calderwood & Harkness Review of Annual Reports. Calderwood & Harkness is available to review draft annual progress reports prior to their submission to FDA. We strongly recommend that Penterra provide draft reports to us for review in advance of each submission to ensure that the content is consistent with the terms of the deferral, does not inadvertently create new regulatory commitments or concede timelines more

3. Monitor Written Request Status. Penterra should actively monitor all FDA correspondence and communications regarding the Written Request and the deferral. Any communication from FDA suggesting that the Written Request may be at risk of withdrawal, modification, or reclassification should be immediately flagged to outside counsel for assessment. The loss of the Written Request would eliminate the opportunity for pe

4. Pre-Study Planning Upon Reactivation. Upon reactivation of the sNDA effort — anticipated upon the availability of data from a redesigned confirmatory study, if needed — the team should reassess the pediatric study timeline and protocol in light of: • Any new FDA guidance on pediatric studies in dermatology indications or for JAK inhibitor products issued during the dormancy period; • Updated adult safety data from

5. Initiate Pediatric Protocol Development in Advance. If CLARION-3R (or any redesigned confirmatory trial) yields positive results and the sNDA is submitted and approved, the 18-month clock for submission of pediatric study results will begin running on the date of approval. To avoid being behind on this timeline, Penterra should begin pre-study activities — including clinical trial site identification, protocol dra

6. Pediatric Exclusivity Strategy. Penterra should engage Whitfield & Grange to conduct a comprehensive evaluation of the commercial value of the six-month pediatric exclusivity extension across the full velonatib franchise, including both the existing RA indication and the proposed psoriasis indication. This analysis should quantify the incremental revenue attributable to the six-month extension of patent protection

X. CONCLUSION The deferral obtained on July 28, 2022, provides Penterra with meaningful flexibility to pursue and obtain approval of the adult psoriasis indication before initiating the pediatric study required by FDA's Written Request. However, the deferral does not eliminate the underlying obligation to conduct the pediatric study, and it imposes its own set of ongoing obligations — most notably, the requirement to