PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT
MEMORANDUM
To: Special Committee of the Board of Directors of Penterra Pharmaceuticals Corp.
Diane Prescott, Chair James Okafor Dr. Helen Ng
From: Sophie Tremblay and Daniel Obi, Calderwood & Harkness LLP
Date: July 25, 2023
Re: Regulatory Due Diligence — Caliston BioSciences, Inc. (Project Coriander)
C&H Matter No.: 1025-00006
Classification: For the exclusive use of the Special Committee and its advisors; not to be shared with Dr. Marcus Hale, Angela Whitmore, Raymond Tusk, or any other recused individual pursuant to the Independence Protocol dated June 2, 2023.
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I. Executive Summary
This memorandum summarizes the findings of Calderwood & Harkness LLP ("C&H") from its regulatory due diligence review of Caliston BioSciences, Inc. ("Caliston" or the "Company"), a privately held, Delaware-incorporated, clinical-stage biopharmaceutical company with principal offices at 88 Harbor Point Road, Cambridge, MA 02142. This memorandum has been prepared at the request of, and is addressed to, the Special Committee of the Board of Directors (the "Special Committee") of Penterra Pharmaceuticals Corp. ("Penterra" or the "Acquiror"; NYSE: PPHR) in connection with Penterra's proposed acquisition of 100% of the outstanding equity of Caliston (the "Transaction").
Transaction Overview. As currently contemplated, the Transaction would be structured as a one-step merger in which a newly formed, wholly owned subsidiary of Penterra would merge with and into Caliston, with Caliston surviving as a wholly owned subsidiary of Penterra. The aggregate equity value of the Transaction is $925 million, to be paid as approximately 75% cash and 25% Penterra common stock, plus an additional $125 million in contingent value rights ("CVRs") payable to former Caliston stockholders upon the achievement of a specified milestone — specifically, FDA approval of Caliston's lead clinical candidate, CLT-4019, on or before December 31, 2026. The maximum aggregate transaction value, inclusive of the CVR milestone payment, is approximately $1.05 billion.
Scope of Review. Our regulatory due diligence review has focused on the following areas: (i) the status and history of the Company's Investigational New Drug Application ("IND") for CLT-4019 and all related FDA correspondence; (ii) the design, enrollment status, and regulatory compliance of the ongoing Phase 2b clinical trial of CLT-4019; (iii) Data Safety Monitoring Board ("DSMB") reports, meeting minutes, and recommendations; (iv) the anticipated regulatory pathway from Phase 2b through potential New Drug Application ("NDA") submission and approval; (v) the regulatory profiles of Caliston's two preclinical-stage pipeline candidates, CLT-5227 and CLT-6034; and (vi) the regulatory implications of a change of control of the Company, including IND transfer procedures, Hart-Scott-Rodino ("HSR") Act filing requirements, and related matters.
Overall Assessment. Based on our review, the regulatory profile of Caliston is generally consistent with expectations for a clinical-stage oncology company operating at the Phase 2b stage of clinical development. Caliston has maintained its IND in good standing, has not been subject to any clinical holds, warning letters, Form 483 observations, or untitled letters from the U.S. Food and Drug Administration (the "FDA"), and appears to have conducted its clinical program in general compliance with FDA regulations and applicable Good Clinical Practice ("GCP") standards. Certain risks and open items have been identified and are discussed in detail in Section IX of this memorandum. Most notably, Phase 2b topline data for CLT-4019 are not yet available and are expected in Q4 2023; the Transaction valuation and the CVR milestone are predicated in significant part on positive clinical results from this trial.
Materials Reviewed. In preparing this memorandum, we have reviewed documents and materials produced by Whitfield Graves LLP (lead partner: Kenneth Pratt), outside regulatory counsel to Caliston, in response to the C&H due diligence request list dated June 9, 2023. Access to the electronic data room (hosted by Crestline Solutions; project name "Coriander") was provided beginning June 28, 2023, and we have reviewed all documents posted to the data room through the cutoff date of July 22, 2023. In addition, we have reviewed Caliston management presentation materials from July 19, 2023, as presented by Dr. Nadia Sorensen, Chief Executive Officer, and Dr. Raj Malhotra, Chief Scientific Officer, to the Special Committee and its advisors. We have not independently verified the accuracy or completeness of the materials provided in the data room and have relied upon the representations of Caliston's management and counsel as to the completeness of the document production.
Independent Auditor. Caliston's independent auditor is Brentmoor Advisors LLP, with offices at 125 Summer Street, Suite 800, Boston, MA 02110. We have not reviewed or relied upon any audit workpapers of Brentmoor Advisors LLP in connection with this regulatory due diligence review; financial and accounting diligence is addressed separately in the financial due diligence workstream.
This memorandum should be read in conjunction with the Legal Due Diligence Report (dated July 14, 2023), the intellectual Property Diligence Memorandum (dated July 21, 2023), and the forthcoming Memorandum on Antitrust / HSR Act Analysis (expected August 10, 2023).
II. Company Overview — Regulatory Profile
Corporate Background. Caliston BioSciences, Inc. was founded in 2017 and is incorporated under the laws of the State of Delaware. The Company's Employer Identification Number is 84-4219063. Its registered agent is Pemberton Industries, 251 Little Falls Drive, Wilmington, DE 19808. Caliston's principal offices and laboratory facilities are located at 88 Harbor Point Road, Cambridge, MA 02142.
Therapeutic Focus. Caliston is focused on the discovery and development of novel kinase inhibitors for the treatment of solid tumors, with a primary emphasis on oncology indications. The Company's research programs are directed at developing small-molecule therapeutics that target specific kinase pathways implicated in tumor cell proliferation and resistance to existing therapies.
Lead Clinical Asset — CLT-4019. Caliston's most advanced product candidate is CLT-4019, a selective CDK4/6 (cyclin-dependent kinase 4 and 6) inhibitor being developed for the treatment of hormone receptor-positive, human epidermal growth factor receptor 2-negative ("HR+/HER2–") metastatic breast cancer. CLT-4019 is currently the subject of an active IND (IND No. 158429) and is being evaluated in an ongoing Phase 2b clinical trial, as described in detail in Sections III and IV of this memorandum. CLT-4019 represents the primary driver of the Transaction valuation and is the subject of the CVR milestone.
Preclinical Pipeline. In addition to CLT-4019, Caliston has two preclinical-stage candidates in its pipeline:
• CLT-5227: A next-generation kinase inhibitor targeting a differentiated mechanism of action in non-small cell lung cancer ("NSCLC"). CLT-5227 is in late preclinical development, with IND-enabling studies underway.
• CLT-6034: An early-stage preclinical candidate directed at a novel kinase target in colorectal cancer. CLT-6034 is at the lead optimization stage.
Neither CLT-5227 nor CLT-6034 has an active IND, and there have been no formal FDA interactions to date with respect to either preclinical candidate. The regulatory status of these pipeline programs is discussed further in Section V.
Commercial Stage and Financial Profile. Caliston is a pre-commercial company. It reported total revenue of $0 for the fiscal year ended December 31, 2022 ("FY2022"), and a net cash burn of approximately $78.4 million for the same period, driven principally by clinical trial expenses, research and development activities, and general and administrative costs. As of March 31, 2023, the Company reported cash and cash equivalents of approximately $112.6 million, providing an estimated cash runway through Q1 2025 based on current operating assumptions and projected expenditures, assuming no additional financing events.
Headcount. As of the engagement date, Caliston had approximately 94 full-time employees, including approximately 52 in research and development functions, 18 in clinical operations and regulatory affairs, and 24 in general and administrative roles.
Capitalization History. Caliston has raised approximately $347 million in total equity financing across four rounds: a Seed round, Series A, Series B, and Series C. The most recent financing event was the Series C round, which closed in October 2021 at a post-money valuation of approximately $680 million. Investors in the Series C round included Cascade Ventures, Helios Capital Partners, and the Caliston Employee Equity Plan trust. A detailed capitalization table and analysis of Caliston's equity structure is set forth in the Legal Due Diligence Report dated July 14, 2023.
III. IND Status — CLT-4019 (IND 158429)
A. IND Filing and Acceptance
Caliston filed an Investigational New Drug Application for CLT-4019 with the FDA's Center for Drug Evaluation and Research ("CDER"), Division of Oncology Products, in March 2020. The IND was assigned number 158429.
The IND submission included a comprehensive package of preclinical data, including pharmacology and toxicology studies conducted in both rodent and non-rodent species, as well as in vitro activity and selectivity data demonstrating CLT-4019's mechanism of action as a selective CDK4/6 inhibitor. The preclinical toxicology data included single-dose and repeat-dose toxicity studies, genotoxicity assessments, and safety pharmacology evaluations, all of which supported the proposed starting dose and dose-escalation schema set forth in the initial clinical protocol.
The Chemistry, Manufacturing, and Controls ("CMC") section of the initial IND package described the drug substance synthesis process, analytical methods, specifications, and stability data, as well as information regarding the drug product formulation (oral capsule) and proposed clinical supply manufacturing arrangements. At the time of the initial IND filing, drug substance manufacturing was conducted by Caliston at its Cambridge, MA laboratory facility, with drug product manufacturing performed by a contract manufacturing organization, Andover Pharma Solutions, Inc. ("Andover"), located in Wilmington, NC.
The initial IND package also included a proposed Phase 1 clinical protocol (Protocol CLT-4019-001), which contemplated an open-label, dose-escalation study in patients with advanced solid tumors to assess safety, tolerability, pharmacokinetics, and preliminary efficacy. The protocol included a standard 3+3 dose-escalation design with planned expansion cohorts at the recommended Phase 2 dose.
The FDA's 30-day review period for IND 158429 expired without the imposition of a clinical hold, and the IND became effective in April 2020. Caliston was thus permitted to initiate clinical studies of CLT-4019 in human subjects.
B. IND Amendments and Supplements
Since the initial IND filing, Caliston has filed a number of amendments and supplements to IND 158429, as summarized below:
Annual IND Reports. Caliston has filed annual IND reports for IND 158429 covering calendar years 2020, 2021, and 2022, as required by 21 C.F.R. § 312.33. Each annual report included a summary of the status of ongoing and completed studies, a summary of the most frequent and most serious adverse experiences, updates to the investigator's brochure, and other information as required by regulation. Based on our review of the data room materials, each annual report appears to have been filed in a timely manner within 60 days of the IND anniversary date.
Protocol Amendments. Caliston has filed several protocol amendments to IND 158429, reflecting the transition from the Phase 1 dose-escalation study (Protocol CLT-4019-001) to the current Phase 2b expansion study (Protocol CLT-4019-002). The Phase 2b protocol was filed as a new protocol under the existing IND in accordance with 21 C.F.R. § 312.30. Subsequent amendments to Protocol CLT-4019-002 have included modifications to the statistical analysis plan, adjustments to inclusion/exclusion criteria to broaden the eligible patient population, and minor revisions to the schedule of assessments. All protocol amendments reviewed in the data room appear to have been submitted to the FDA prior to implementation, as required.
CMC Supplements. Caliston has filed CMC supplements to IND 158429 reflecting two principal changes to the manufacturing program:
(i) Change in Drug Substance Manufacturing Site. In Q2 2021, Caliston transitioned drug substance manufacturing from its internal Cambridge laboratory to a contract manufacturing organization, Millbrook Chemical Sciences, LLC ("Millbrook"), located in Research Triangle Park, NC. A CMC supplement was filed to reflect this change, including updated manufacturing process descriptions, analytical data from the new site, and comparability data demonstrating equivalence of drug substance produced at the new site.
(ii) Formulation Refinements. In late 2021, Caliston refined the drug product formulation to improve bioavailability and patient convenience, transitioning from an oral capsule to a film-coated oral tablet. The CMC supplement included updated dissolution and stability data for the reformulated drug product, as well as a bioequivalence bridging study conducted in healthy volunteers to support the formulation change. The reformulated tablet is the form currently used in the Phase 2b trial.
IND Safety Reports. Caliston has filed IND Safety Reports (15-day reports) as required by 21 C.F.R. § 312.32 in connection with serious adverse events ("SAEs") observed during clinical studies of CLT-4019. Based on our review, a total of fourteen (14) IND Safety Reports have been filed since the IND's inception. The SAEs reported include events of Grade 3 and Grade 4 neutropenia (5 reports), Grade 3 hepatotoxicity as evidenced by elevated alanine aminotransferase ("ALT") and aspartate aminotransferase ("AST") levels (3 reports), Grade 3 fatigue (2 reports), febrile neutropenia (2 reports), and thromboembolic events (2 reports). All events were characterized as expected based on the known pharmacological profile of CDK4/6 inhibitors and were consistent with the class effects described in the investigator's brochure. None of these safety reports resulted in the imposition of a clinical hold or a request for additional safety data from the FDA. The DSMB's assessment of the overall safety profile is discussed further in Section IV.D.
No Clinical Holds. Based on our review of all FDA correspondence in the data room and representations made by Caliston management and Whitfield Graves LLP, no clinical holds have been imposed on IND 158429 at any time since its filing. The IND has remained in active and good standing throughout the clinical development program.
C. FDA Correspondence Summary
We have reviewed the complete set of FDA correspondence related to IND 158429 produced in the data room. The key interactions between Caliston and the FDA are summarized below:
Pre-IND Meeting (Type B). Prior to the March 2020 IND filing, Caliston requested and was granted a Pre-IND meeting (Type B) with the Division of Oncology Products. The meeting was held in November 2019 and addressed the adequacy of the nonclinical data package, the proposed clinical development plan, and the initial clinical protocol. Based on the meeting minutes produced in the data room, the FDA provided generally favorable guidance, concurring with the adequacy of the nonclinical toxicology package to support first-in-human dosing and providing feedback on the proposed starting dose calculation methodology. The FDA recommended certain additional pharmacokinetic analyses, which Caliston incorporated into the IND submission.
End-of-Phase 1 Meeting (Type B). Following completion of the Phase 1 dose-escalation study and identification of the recommended Phase 2 dose, Caliston requested and obtained an End-of-Phase 1 meeting (Type B) with the FDA. This meeting was held in September 2021. At this meeting, the FDA provided concurrence with several key elements of the proposed Phase 2b trial design, including: (a) the selection of progression-free survival ("PFS") as the primary endpoint; (b) the proposed patient population of HR+/HER2– metastatic breast cancer patients who have progressed on at least one prior line of endocrine therapy; and (c) the open-label, randomized study design with a standard-of-care comparator arm. The FDA also provided feedback on the proposed statistical analysis plan and sample size calculations. Caliston incorporated the FDA's recommendations into Protocol CLT-4019-002.
General FDA Correspondence. Our review of the data room identified approximately twenty-three (23) individual pieces of correspondence between Caliston and the FDA related to IND 158429, in addition to the formal meeting packages and meeting minutes described above. These include routine information requests from the FDA regarding CMC updates, responses to FDA queries regarding specific safety reports, and acknowledgment letters related to protocol amendments and annual reports. All correspondence items appear to have been responded to by Caliston in a timely manner. A summary table of all FDA correspondence, organized by date, type, subject matter, and status, is attached hereto as Appendix C.
Outstanding Items. As of the data room cutoff date of July 22, 2023, we have identified one (1) open FDA correspondence item: an information request from the FDA dated June 30, 2023, requesting additional stability data for the reformulated tablet drug product at the 24-month time point. According to Caliston management, a response to this request is in preparation and is expected to be submitted to the FDA by August 15, 2023. This item does not appear to present a material risk to the continued conduct of the Phase 2b trial or the overall regulatory strategy for CLT-4019, but we recommend that Penterra confirm the timely filing of this response as part of its pre-closing diligence.
No Enforcement Actions. Based on our review and representations made by Caliston's management and outside counsel, no FDA warning letters, Form 483 observations, untitled letters, or other enforcement actions have been issued to Caliston or any of its facilities at any time. Similarly, there are no pending FDA investigations or inspections of which Caliston management is aware.
IV. Phase 2b Clinical Trial — CLT-4019
A. Trial Design
The ongoing Phase 2b clinical trial of CLT-4019 is being conducted pursuant to Protocol CLT-4019-002 (as amended). Key design parameters of the trial are as follows:
Indication. HR+/HER2– metastatic breast cancer in adult patients who have progressed on at least one prior line of endocrine-based therapy in the metastatic setting.
Study Type. Phase 2b, multicenter, randomized, open-label, active-controlled clinical trial.
Primary Endpoint. Progression-free survival ("PFS"), defined as the time from randomization to the earliest date of disease progression (per RECIST v1.1 criteria as assessed by blinded independent central review) or death from any cause.
Key Secondary Endpoints. The key secondary endpoints of the trial include: (i) overall response rate ("ORR"), defined as the proportion of patients achieving a confirmed complete response or partial response per RECIST v1.1 criteria; (ii) duration of response ("DOR"), defined as the time from first documented response to disease progression or death; and (iii) overall survival ("OS"), defined as the time from randomization to death from any cause. Exploratory endpoints include pharmacokinetic parameters, patient-reported outcomes, and biomarker analyses.
Comparator Arm. Patients are randomized in a 2:1 ratio to receive either CLT-4019 (oral tablet, 200 mg once daily on a 28-day cycle) in combination with physician's choice endocrine therapy (letrozole or fulvestrant) or physician's choice endocrine therapy alone (letrozole or fulvestrant) as the active comparator. The comparator arm reflects the current standard of care for the target patient population in the second-line and later-line metastatic setting.
Target Enrollment. The trial is designed to enroll approximately 330 patients across both arms (approximately 220 in the CLT-4019 arm and 110 in the comparator arm), based on statistical power calculations assuming a hazard ratio of 0.65 for PFS, 80% power, and a one-sided alpha of 0.025.
Clinical Sites. The trial is being conducted at approximately 48 clinical sites, with the majority located in the United States (34 sites) and additional sites in Canada (6 sites), the United Kingdom (4 sites), and Germany (4 sites).
ClinicalTrials.gov Registration. The trial is registered on ClinicalTrials.gov under identifier NCT04827651. The registration record was reviewed and appears to be current and consistent with the protocol on file with the FDA.
B. Enrollment Status
Current Enrollment. As reported in the Caliston management presentation dated July 19, 2023, the Phase 2b trial has enrolled approximately 312 of the target 330 patients, representing approximately 95% of the planned enrollment. Caliston management indicated that full enrollment is expected to be achieved by the end of August 2023.
Enrollment Timeline and Delays. Enrollment in the Phase 2b trial commenced in February 2022. The trial experienced a moderate enrollment delay of approximately six to eight weeks during Q3 2022, attributed primarily to slower-than-anticipated patient recruitment at certain ex-U.S. sites, particularly in the United Kingdom. Caliston management addressed this delay by activating additional trial sites in the United States and Germany and by implementing enhanced site engagement and patient referral strategies. Following these corrective measures, enrollment pace accelerated in Q4 2022 and has remained on or ahead of the revised enrollment trajectory since that time.
A protocol amendment was filed with the FDA in November 2022 to revise the enrollment projections and to add four additional clinical sites to the trial. This amendment was reported to the FDA as a non-substantive amendment and did not alter the primary endpoint, sample size, or key statistical parameters of the trial.
Geographic Distribution. Of the approximately 312 patients enrolled as of the July 19, 2023 management presentation, approximately 242 patients (78%) were enrolled at U.S. sites, approximately 32 patients (10%) at Canadian sites, approximately 22 patients (7%) at U.K. sites, and approximately 16 patients (5%) at German sites.
Topline Data Timeline. Caliston management has represented that topline PFS data from the Phase 2b trial are expected in Q4 2023, subject to the achievement of the pre-specified number of PFS events required for the primary analysis. The Company's statistical analysis plan provides for the primary PFS analysis to be conducted after approximately 210 PFS events have been observed. Caliston's biostatistics team estimates, based on current data maturity, that this event threshold is likely to be reached in October or November 2023.
C. Clinical Trial Compliance
GCP Compliance. Based on our review of the data room materials, Caliston maintains a clinical quality management system ("CQMS") that appears to be consistent with ICH E6(R2) Good Clinical Practice guidelines and applicable FDA regulations. The CQMS documentation reviewed includes standard operating procedures ("SOPs") for protocol conduct, data management, adverse event reporting, study monitoring, and deviation management. The Company's clinical operations team, led by Dr. Evan Whitmore, Head of Clinical Development, oversees GCP compliance across all trial sites.
IRB / Ethics Committee Approvals. Our review confirmed that Institutional Review Board ("IRB") or independent Ethics Committee ("EC") approvals have been obtained for all 48 clinical sites participating in the Phase 2b trial. For U.S. sites, the trial is conducted under the oversight of a central IRB, Crestline & Co. (formerly Western Institutional Review Board), with initial approval granted in January 2022 and continuing review approvals obtained annually thereafter. For ex-U.S. sites, approvals were obtained from the relevant national and local ethics committees in each jurisdiction. All IRB/EC approval documentation was available for review in the data room.
Informed Consent Procedures. The informed consent form ("ICF") used in the Phase 2b trial was reviewed and appears to comply with the requirements of 21 C.F.R. Part 50 (for U.S. sites) and applicable local regulations for ex-U.S. sites. The Harborline Management Consulting disclosures regarding the investigational nature of CLT-4019, known risks and potential benefits, alternative treatments, and the voluntary nature of participation. Caliston has represented that all enrolled patients have provided written informed consent prior to the performance of any study-specific procedures.
CRO Monitoring Reports. The Phase 2b trial is being monitored by Meridian Clinical Research Services, LLC ("Meridian"), a contract research organization retained by Caliston to provide clinical monitoring, data management, and biostatistical services. Meridian's monitoring plan includes routine on-site monitoring visits (approximately every six to eight weeks per site), remote monitoring of data queries and electronic case report forms, and centralized statistical monitoring for data anomalies. We reviewed a sample of fifteen (15) monitoring visit reports from Meridian spanning the period from February 2022 through June 2023. The monitoring reports reviewed reflected generally positive findings, with all sites demonstrating adequate compliance with the protocol and applicable regulatory requirements. Minor findings and observations were documented at several sites, including: incomplete documentation of concomitant medication records (2 sites), delays in data entry into the electronic data capture system (3 sites), and minor deviations from the schedule of assessments (1 site). In each case, corrective actions were implemented by the site and documented in follow-up monitoring reports. No critical or major findings were identified in the sample of monitoring reports reviewed.
Adverse Event Reporting. Caliston's SOPs for adverse event ("AE") and serious adverse event ("SAE") reporting appear to comply with the requirements of 21 C.F.R. § 312.32 and ICH E2A guidelines. The data room materials include evidence that SAEs are reported to the FDA, to Meridian, and to all participating investigators within the required timeframes. Based on our review of the safety database summary provided in the data room, the Phase 2b trial has recorded a total of approximately 47 SAEs across both treatment arms as of the data room cutoff date. The most common SAEs in the CLT-4019 arm included neutropenia (Grade 3/4), fatigue (Grade 3), and elevated hepatic transaminases (Grade 3). The overall SAE rate in the CLT-4019 arm appears to be consistent with the known safety profile of the CDK4/6 inhibitor class and is within the range observed in the Phase 1 study.
Data Integrity. Caliston utilizes an electronic data capture ("EDC") system (Penmark Data Systems) for the collection and management of clinical trial data. Source document verification ("SDV") is performed by Meridian monitors during on-site visits, with a target SDV rate of 100% for key efficacy endpoints and at least 20% for other data points. Based on the monitoring reports reviewed, the SDV targets appear to be met across the trial sites. The data management plan and database lock procedures were reviewed and appear to be consistent with industry standards for a Phase 2b oncology trial.
D. DSMB Reports
DSMB Composition. An independent Data Safety Monitoring Board has been established for the Phase 2b trial of CLT-4019. The DSMB is composed of five members, including three oncologists with expertise in breast cancer, one biostatistician, and one clinical pharmacologist. All DSMB members are independent of Caliston and have no financial interest in the Company or the outcome of the trial. The DSMB operates under the oversight of an independent statistical center at the Harvard T.H. Chan School of Public Health, which provides unblinded data analyses to the DSMB.
DSMB Meetings. As of the data room cutoff date, the DSMB has convened a total of five (5) scheduled meetings since the initiation of the Phase 2b trial in February 2022. Meetings have been held approximately every four to six months, with the most recent scheduled meeting occurring on June 8, 2023. No ad hoc or emergency DSMB meetings have been convened.
DSMB Charter. We reviewed the DSMB charter, which was finalized in January 2022 prior to the enrollment of the first patient. The charter defines the DSMB's responsibilities, meeting procedures, and decision-making framework. The charter includes the following key provisions:
• Stopping Rules: The charter specifies pre-defined statistical stopping boundaries for both efficacy (early evidence of overwhelming benefit) and futility (low probability of demonstrating a statistically significant PFS benefit). The stopping rules are based on the Lan-DeMets alpha-spending function with O'Brien-Fleming boundaries.
• Futility Analysis: A formal interim futility analysis was pre-specified to occur after approximately 50% of the target PFS events (approximately 105 events) had been observed. Based on the DSMB meeting minutes, this futility analysis was conducted at the fourth DSMB meeting in February 2023 and the DSMB recommended continuation of the trial without modification.
• Safety Thresholds: The charter specifies safety monitoring thresholds for specific adverse events of special interest, including Grade 4 neutropenia, hepatotoxicity (ALT/AST > 10x ULN), cardiac events, and thromboembolic events. If the incidence of any of these events exceeds pre-specified thresholds, the DSMB may recommend dose modification, enhanced safety monitoring, or suspension of enrollment.
DSMB Recommendations. At each of the five scheduled meetings held to date, the DSMB has recommended that the trial continue without modification. Specifically:
• Meeting 1 (May 2022): Recommended continuation. Early safety data reviewed; no concerns identified.
• Meeting 2 (September 2022): Recommended continuation. Enrollment pace and safety data reviewed. No safety signals exceeding charter thresholds.
• Meeting 3 (January 2023): Recommended continuation. Cumulative safety data reviewed. The DSMB noted an emerging trend of Grade 3 neutropenia in the CLT-4019 arm but concluded that the incidence was within the expected range for the drug class and did not warrant protocol modification.
• Meeting 4 (February 2023 — Interim Futility Analysis): Recommended continuation. The futility boundary was not crossed. The DSMB concluded that there was no basis for recommending termination of the trial for futility.
• Meeting 5 (June 2023): Recommended continuation. Updated safety data reviewed. The DSMB reviewed reports of two cases of Grade 3 hepatotoxicity (ALT > 5x ULN) that had occurred since the previous meeting and concluded that these events were manageable and did not represent a new safety signal.
A summary table of all DSMB meetings is set forth in Appendix D.
Overall Safety Profile. Based on the DSMB's assessments and Caliston's safety database summary, the overall safety profile of CLT-4019 as observed in the Phase 2b trial is characterized by the following known adverse events:
• Neutropenia: The most common adverse event of clinical significance. Grade 3 neutropenia has been observed in approximately 22% of patients in the CLT-4019 arm, and Grade 4 neutropenia in approximately 5%. These rates are consistent with the class effect observed with other approved CDK4/6 inhibitors (e.g., palbociclib, ribociclib, abemaciclib).
• Hepatotoxicity: Grade 3 elevations in ALT and/or AST (> 5x ULN) have been observed in approximately 7% of patients in the CLT-4019 arm. Events have generally been reversible upon dose interruption or reduction. No cases of drug-induced liver injury meeting Hy's Law criteria have been reported to date.
• Fatigue: Grade 2 fatigue has been reported in approximately 30% of patients, and Grade 3 fatigue in approximately 8%.
• Thromboembolic Events: Two cases of deep vein thrombosis and one case of pulmonary embolism have been reported in the CLT-4019 arm. The DSMB has assessed these events and concluded that a causal relationship to CLT-4019 cannot be established at this time, given the underlying risk profile of the patient population.
• Other: Other adverse events observed include nausea (Grade 1–2, approximately 25%), diarrhea (Grade 1–2, approximately 18%), and rash (Grade 1–2, approximately 12%).
The DSMB has not recommended any protocol modifications, dose adjustments, or enhanced safety monitoring beyond those already specified in the protocol and DSMB charter.
V. Preclinical Pipeline — CLT-5227 and CLT-6034
CLT-5227
CLT-5227 is a next-generation kinase inhibitor designed to target a differentiated kinase pathway implicated in non-small cell lung cancer ("NSCLC"). The compound is currently in late preclinical development. As described in the management presentation, Caliston has completed in vitro and in vivo proof-of-concept studies demonstrating anti-tumor activity in NSCLC xenograft models. IND-enabling toxicology studies are currently underway, including 28-day repeat-dose toxicity studies in rodent and non-rodent species and genotoxicity evaluations. Caliston management has indicated that it anticipates completing IND-enabling studies and filing an IND for CLT-5227 in mid-2024, with the potential to initiate a Phase 1 dose-escalation study in the second half of 2024.
No FDA interactions have occurred to date with respect to CLT-5227. Caliston has not yet requested a Pre-IND meeting for this candidate, although management indicated during the July 19, 2023 presentation that such a meeting may be sought in Q1 2024 in advance of the anticipated IND filing.
CLT-6034
CLT-6034 is an early-stage preclinical candidate targeting a novel kinase implicated in colorectal cancer. CLT-6034 is at the lead optimization stage, and the Company has characterized the compound's kinase selectivity profile and is conducting preliminary in vitro efficacy and pharmacokinetic assessments. Based on the current stage of development, an IND filing for CLT-6034 is not anticipated before late 2025 or early 2026 at the earliest.
As with CLT-5227, no FDA interactions have occurred to date with respect to CLT-6034, and no IND-enabling studies have commenced.
Regulatory Pathway Considerations Post-Acquisition
From a regulatory perspective, the acquisition of Caliston by Penterra would not, in and of itself, alter the regulatory pathway for either CLT-5227 or CLT-6034. As neither candidate has an active IND, there are no IND transfer requirements applicable to these programs. However, Penterra should consider the resource requirements and internal regulatory capabilities needed to advance these preclinical programs to the clinical stage, including preparation and submission of Pre-IND meeting requests, IND applications, and clinical protocols. We recommend that Penterra assess, as part of its integration planning, whether Caliston's existing regulatory affairs staff and infrastructure are sufficient to support the parallel advancement of three clinical or near-clinical programs post-closing.
VI. Anticipated Regulatory Pathway to NDA Filing
A. Phase 2b to Phase 3 Transition
Potential Pathways. The regulatory pathway from Phase 2b to potential NDA approval for CLT-4019 will depend in significant part on the Phase 2b topline data expected in Q4 2023. Based on our discussions with Caliston management and our review of the regulatory strategy documents in the data room, Caliston has identified two principal pathways:
(i) Traditional Pathway (Phase 3 Registrational Trial): If the Phase 2b data demonstrate a statistically significant and clinically meaningful improvement in PFS, Caliston anticipates requesting an End-of-Phase 2 meeting with the FDA to align on the design of a Phase 3 registrational trial. The Phase 3 trial would be designed as a confirmatory, double-blind, randomized, controlled study of CLT-4019 in the target population, with PFS or OS as the primary endpoint, depending on FDA guidance. This is the pathway most consistent with the current clinical development plan.
(ii) Accelerated Approval Pathway: If the Phase 2b data demonstrate a particularly compelling PFS benefit or a high overall response rate, Caliston may explore the possibility of seeking accelerated approval under 21 C.F.R. Part 314, Subpart H, on the basis of the Phase 2b data alone, utilizing ORR or PFS as a surrogate or intermediate clinical endpoint reasonably likely to predict clinical benefit. This pathway would require FDA agreement and would be contingent upon the strength of the Phase 2b data and the demonstration of an unmet medical need in the target population.
End-of-Phase 2 Meeting. Caliston anticipates requesting an End-of-Phase 2 meeting (Type B) with the FDA promptly following the availability of topline Phase 2b data. Based on the expected Q4 2023 topline readout, the End-of-Phase 2 meeting is anticipated to occur in Q1 or Q2 2024. The objectives of this meeting would include: (a) presenting the Phase 2b topline efficacy and safety data; (b) discussing the proposed Phase 3 registrational trial design, endpoints, and patient population; (c) discussing whether accelerated approval may be feasible; and (d) aligning on any additional nonclinical or CMC data needed to support an NDA submission.
Special Designations. Caliston management has indicated that it intends to evaluate, following the Phase 2b data readout, whether to submit applications for one or more special FDA designations, including:
• Breakthrough Therapy Designation ("BTD"): Under Section 506(a) of the Federal Food, Drug, and Cosmetic Act, a drug may be eligible for BTD if preliminary clinical evidence indicates that it may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. If the Phase 2b data are sufficiently compelling, CLT-4019 may be eligible for BTD, which would entitle Caliston (or Penterra, post-acquisition) to intensive FDA guidance, organizational commitment, and the potential for rolling NDA review.
• Fast Track Designation: CLT-4019 may be eligible for Fast Track designation, which is available for drugs intended to treat serious or life-threatening conditions and that demonstrate the potential to address unmet medical needs. Fast Track designation would facilitate more frequent FDA interactions and potentially allow for a rolling NDA submission.
• Accelerated Approval: As noted above, if the Phase 2b data support the use of a surrogate endpoint, Caliston may seek accelerated approval, which would require a commitment to conduct a confirmatory post-marketing study.
Caliston has not yet applied for any of these designations. Whether any designation is ultimately obtained will depend on the Phase 2b data and FDA's assessment of the clinical evidence.
B. NDA Filing and Review Timeline
Estimated NDA Submission Timeline. The timeline for NDA submission for CLT-4019 depends on the regulatory pathway pursued:
• Traditional Pathway (Phase 3 Required): Assuming positive Phase 2b data in Q4 2023, an End-of-Phase 2 meeting in Q1–Q2 2024, initiation of a Phase 3 trial in H2 2024, and a Phase 3 trial duration of approximately 18–24 months, the earliest anticipated NDA submission date would be in the second half of 2026, assuming a rolling submission is available. This timeline assumes no material delays in Phase 3 enrollment, trial conduct, or data analysis.
• Accelerated Approval Pathway (Phase 2b Data Sufficient): If the FDA agrees that the Phase 2b data are sufficient to support an NDA filing under the accelerated approval pathway, an NDA submission could potentially be made as early as Q3 or Q4 2024, following preparation of the complete NDA submission package.
Standard vs. Priority Review. Under the Prescription Drug User Fee Act ("PDUFA"), the FDA's target review timeframe for a standard NDA review is 10 months from the date of filing, and for a priority review is 6 months from the date of filing. Priority review is available for applications for drugs that, if approved, would be a significant improvement in safety or effectiveness of the treatment, diagnosis, or prevention of a serious condition. Given the competitive landscape in the CDK4/6 inhibitor space, the availability of priority review for CLT-4019 is uncertain and would depend on the differentiation of the clinical data relative to existing approved therapies.
CVR Milestone Assessment. The CVR milestone requires FDA approval of CLT-4019 on or before December 31, 2026. Based on our assessment:
• Under the traditional pathway (Phase 3 required), achieving FDA approval by December 31, 2026 would be extremely challenging and would require that the Phase 3 trial be completed in an accelerated timeframe, that a rolling NDA submission be utilized, and that FDA grant priority review. Even under optimistic assumptions, this timeline leaves very limited margin for delays at any stage of the development and review process.
• Under the accelerated approval pathway, achieving FDA approval by December 31, 2026 is more plausible, particularly if an NDA were submitted in late 2024 and the FDA completed its review within the standard or priority review timeframes. However, this pathway is contingent on FDA agreement that the Phase 2b data are sufficient for accelerated approval, which is by no means assured.
We note that the regulatory risk associated with the CVR timeline is allocated to the former Caliston stockholders under the proposed CVR structure, as the CVR payment is contingent upon the achievement of the approval milestone. However, the Special Committee should carefully consider the achievability of the CVR milestone in evaluating the overall Transaction economics and in negotiating the "commercially reasonable efforts" or "diligent efforts" obligations that Penterra would undertake with respect to continued development of CLT-4019 under the CVR Agreement.
PDUFA Date Assumptions. For modeling purposes, PDUFA dates are assumed as follows: (i) under the traditional pathway with standard review, approximately Q2–Q3 2027; (ii) under the traditional pathway with priority review, approximately Q4 2026–Q1 2027; (iii) under the accelerated approval pathway with standard review, approximately Q3–Q4 2025; and (iv) under the accelerated approval pathway with priority review, approximately Q2–Q3 2025. These estimates are subject to significant uncertainty and are provided for planning purposes only.
C. Post-Approval Considerations
Post-Marketing Requirements. If CLT-4019 is approved, whether via the traditional or accelerated approval pathway, the FDA may impose post-marketing requirements ("PMRs") or commitments ("PMCs") as a condition of approval. These may include Phase 4 (post-marketing) studies to further evaluate long-term safety, efficacy in specific subpopulations, or other clinical questions identified during the review process. If accelerated approval is obtained, the FDA would require a confirmatory post-marketing trial (typically a Phase 3 study) to verify the clinical benefit of CLT-4019, and failure to complete such a trial in a timely manner could result in withdrawal of the approval under the FDA's authority pursuant to Section 506(c) of the Federal Food, Drug, and Cosmetic Act, as amended by the Accelerated Approval Integrity Act of 2023.
REMS Considerations. Based on the safety profile of CLT-4019 observed to date, it is possible that the FDA may require a Risk Evaluation and Mitigation Strategy ("REMS") as a condition of approval. The known risks of neutropenia, hepatotoxicity, and thromboembolic events may warrant enhanced safety communications to prescribers, periodic safety assessments, or other risk mitigation elements. We note that the currently approved CDK4/6 inhibitors (palbociclib, ribociclib, and abemaciclib) are not subject to REMS programs, which may weigh against an FDA determination that a REMS is necessary for CLT-4019. However, the ultimate REMS determination will depend on the full safety database available at the time of NDA review.
Pediatric Study Requirements. Under the Pediatric Research Equity Act ("PREA"), an NDA submission for CLT-4019 would generally be required to include assessments of safety and efficacy in pediatric populations, unless a waiver or deferral is obtained. Given that HR+/HER2– metastatic breast cancer is predominantly an adult disease, Caliston would likely be eligible for a full or partial waiver of pediatric study requirements. We recommend that this issue be addressed with the FDA at the End-of-Phase 2 meeting.
VII. Change-of-Control Regulatory Considerations
A. FDA Regulatory Impact of Change of Control
IND Transfer. Under 21 C.F.R. § 312.70, when there is a change in the sponsor of an IND, the new sponsor must submit appropriate amendments to the IND to reflect the change. The transfer of IND sponsorship from Caliston to Penterra (or to a Penterra subsidiary, as applicable) upon consummation of the Transaction is a procedural matter and does not require FDA pre-approval. However, the transfer must be documented through an amendment to IND 158429, which should include: (a) a statement from the new sponsor accepting responsibility for the IND; (b) updated contact information for the new sponsor, including the name of the authorized representative and the IND safety contact; and (c) any changes to the manufacturing or distribution arrangements for the investigational drug product.
We recommend that the IND transfer amendment be prepared in advance of closing and submitted to the FDA promptly following the closing of the Transaction to ensure continuity of the regulatory record and to avoid any gap in IND compliance. We note that, as a practical matter, the IND transfer does not interrupt the conduct of the ongoing Phase 2b trial, provided that the new sponsor assumes all obligations under the IND and continues to comply with applicable regulations.
Continuity of Clinical Trial Operations. A change of control of the IND sponsor does not, in itself, require cessation or modification of ongoing clinical trials, provided that the new sponsor assumes all regulatory obligations and the trial continues to be conducted in accordance with the approved protocol, GCP requirements, and applicable regulations. However, the successful continuity of the CLT-4019 clinical program post-acquisition will depend in significant part on the retention of key regulatory and clinical development personnel. In this regard, we highlight the following individuals:
• Dr. Nadia Sorensen, CEO: Dr. Sorensen has served as the primary point of contact with the FDA and has led Caliston's regulatory strategy for CLT-4019. Under the proposed ancillary agreements, Dr. Sorensen would be subject to a 2-year non-compete and a 1-year consulting arrangement with Penterra. Her continued availability during the critical transition period is important to regulatory continuity.
• Dr. Raj Malhotra, CSO: Dr. Malhotra has overseen the nonclinical and translational aspects of the CLT-4019 program and has played a key role in IND-related interactions with the FDA. As of the date of this memorandum, Dr. Malhotra's retention has not been specifically addressed in the definitive transaction agreements.
• Dr. Evan Whitmore, Head of Clinical Development: Dr. Whitmore leads the clinical operations team responsible for the conduct of the Phase 2b trial and oversees the relationship with Meridian Clinical Research Services, the trial CRO. Dr. Whitmore's retention has similarly not been addressed in the definitive transaction agreements.
We recommend that Penterra negotiate appropriate retention and transition arrangements for Dr. Malhotra and Dr. Whitmore as part of the definitive transaction documentation.
CMC Implications. We have reviewed the key manufacturing agreements relevant to CLT-4019, including the drug substance manufacturing agreement with Millbrook Chemical Sciences, LLC and the drug product manufacturing agreement with Andover Pharma Solutions, Inc. Both agreements contain change-of-control provisions. The Millbrook agreement provides that Millbrook may terminate the agreement upon 180 days' written notice if a change of control of Caliston occurs, unless Millbrook provides written consent (not to be unreasonably withheld). The Andover agreement provides that any assignment of the agreement in connection with a change of control requires Andover's prior written consent, which may be withheld in its sole discretion. We recommend that Penterra obtain written consents from both Millbrook and Andover prior to or promptly following closing to ensure continuity of the clinical supply chain for CLT-4019. This issue is also addressed in the Legal Due Diligence Report dated July 14, 2023.
B. HSR Act Filing
A detailed analysis of the antitrust and HSR Act implications of the Transaction is being prepared by C&H and will be provided to the Special Committee in a separate Memorandum on Antitrust / HSR Act Analysis, which is expected to be dated August 10, 2023. For purposes of this memorandum, we note the following:
Given the aggregate transaction value of $925 million (exclusive of the CVR), an HSR Act filing will be required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Both Penterra and Caliston will be required to file premerger notification forms with the Federal Trade Commission ("FTC") and the Antitrust Division of the U.S. Department of Justice ("DOJ"). The parties may not consummate the Transaction until the applicable HSR waiting period (30 calendar days from the filing date, subject to extension in the event of a Second Request) has expired or been terminated.
HSR Act clearance is a condition to closing under the proposed merger agreement. We do not anticipate significant antitrust concerns arising from the Transaction, given that Caliston is a pre-commercial company with no approved products and that the relevant product market (CDK4/6 inhibitors for HR+/HER2– metastatic breast cancer) is served by multiple approved competitors. However, we will provide a more detailed analysis in the forthcoming antitrust memorandum.
C. State Pharmacy and Licensing Matters
Caliston is a pre-commercial company and does not currently hold any state pharmacy licenses, wholesale drug distributor licenses, or registrations with the U.S. Drug Enforcement Administration ("DEA"). CLT-4019 is not a controlled substance, and the Company's current activities do not require any state or federal licenses beyond the IND. Accordingly, no state pharmacy or licensing approvals are implicated by the change of control at this stage of the Company's development. If and when CLT-4019 receives FDA approval and Penterra seeks to commercialize the product, the applicable state and federal licensing requirements will need to be assessed at that time.
D. International Regulatory Considerations
As noted in Section IV.A, the Phase 2b trial of CLT-4019 is being conducted at clinical sites in Canada, the United Kingdom, and Germany, in addition to the United States. We have reviewed the applicable regulatory filings and authorizations for the conduct of clinical trials in these jurisdictions:
• Canada: A Clinical Trial Application ("CTA") was filed with Health Canada, and authorization to conduct the trial was received. Health Canada's Clinical Trials Database listing was reviewed and confirmed.
• United Kingdom: A Clinical Trial Authorization was obtained from the Medicines and Healthcare products Regulatory Agency ("MHRA") prior to the initiation of trial activities at U.K. sites.
• Germany: A Clinical Trial Application was submitted to and approved by the Bundesinstitut für Arzneimittel und Medizinprodukte ("BfArM"), along with favorable opinions from the relevant local ethics committees.
Each of these jurisdictions has its own requirements regarding notification of a change of control or change in the sponsor of a clinical trial. We recommend that Penterra, in coordination with local regulatory counsel in each jurisdiction, assess the specific notification requirements and timelines applicable to the IND/CTA sponsor change and ensure that all required notifications are filed promptly following closing. In general, these requirements are procedural and notification-based, similar to the FDA IND transfer process, and do not require prior regulatory approval.
Caliston does not hold any marketing authorizations or product licenses in any ex-U.S. jurisdiction, as CLT-4019 has not yet been approved for commercial sale in any market.
VIII. Intellectual Property — Regulatory Exclusivity Considerations
A comprehensive analysis of Caliston's intellectual property portfolio, including patent claims, prosecution history, freedom-to-operate, and third-party intellectual property risks, is set forth in the separate intellectual Property Diligence Memorandum dated July 21, 2023, prepared by C&H's intellectual property practice group. This Section VIII addresses the regulatory exclusivity dimensions of Caliston's intellectual property position as they relate to the anticipated NDA approval pathway for CLT-4019.
New Chemical Entity (NCE) Exclusivity. Upon approval of an NDA for CLT-4019, the compound would be eligible for five (5) years of NCE exclusivity under the Hatch-Waxman Act (21 U.S.C. § 355(j)(5)(F)(ii)), provided that CLT-4019 contains an active moiety that has not been previously approved by the FDA. Based on our review, CLT-4019 appears to contain a novel active moiety that has not been the subject of any prior NDA approval, and NCE exclusivity is therefore expected to be available. NCE exclusivity would prevent the FDA from accepting an abbreviated new drug application ("ANDA") or a 505(b)(2) application referencing CLT-4019 for a period of five years from the date of NDA approval.
Orphan Drug Exclusivity. Orphan Drug designation and exclusivity under the Orphan Drug Act (21 U.S.C. § 360bb) are generally available for drugs intended to treat rare diseases or conditions affecting fewer than 200,000 persons in the United States. HR+/HER2– metastatic breast cancer does not appear to meet the prevalence threshold for orphan drug designation, and Caliston has not applied for or obtained Orphan Drug designation for CLT-4019. Accordingly, orphan drug exclusivity is not anticipated to be available for this indication.
Pediatric Exclusivity. If Caliston (or Penterra, post-acquisition) conducts pediatric studies of CLT-4019 in accordance with an FDA-issued Written Request, the Company may be eligible for a six-month extension of any existing marketing exclusivity and certain patent protections under the Pediatric Exclusivity provisions of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 355a). As noted in Section VI.C above, a full or partial PREA waiver is likely given the adult-predominant nature of the indication, which may limit the likelihood of an FDA Written Request. This issue should be discussed with the FDA at the appropriate time.
Patent Term Extension (Hatch-Waxman). Under 35 U.S.C. § 156, the holder of a patent claiming CLT-4019 (or a method of using CLT-4019) may be eligible for a patent term extension to compensate for the period of regulatory review during which the patent was in force but the product could not be marketed. The patent term extension is generally equal to one-half of the clinical testing period plus the full regulatory review period, subject to a maximum extension of five years and a total effective patent life post-approval of not more than 14 years. The eligibility of specific Caliston patents for patent term extension is addressed in the intellectual Property Diligence Memorandum.
Orange Book Listing. Upon NDA approval, Caliston (or Penterra) would be required to submit patent information for listing in the FDA's Approved Drug Products with Therapeutic Equivalence Evaluations (the "Orange Book"), in accordance with 21 U.S.C. § 355(b)(1). Eligible patents include those claiming the active ingredient, the drug product (formulation or composition), and approved methods of use. We recommend that Penterra develop an Orange Book listing strategy in advance of NDA approval to ensure that all eligible patents are listed promptly upon approval, thereby maximizing the scope of patent protection available against potential ANDA filers.
IX. Risk Factors and Open Items
A. Clinical Risk
Phase 2b Topline Data Uncertainty. The most significant risk factor identified in this regulatory due diligence review is the inherent uncertainty associated with the Phase 2b topline data for CLT-4019, which are expected in Q4 2023 but are not yet available as of the date of this memorandum. The Transaction valuation of $925 million in base consideration, together with the $125 million CVR milestone, is predicated in substantial part on the expectation that CLT-4019 will demonstrate a statistically significant and clinically meaningful improvement in PFS relative to the standard-of-care comparator arm. There can be no assurance that the Phase 2b data will meet this threshold. In the event that the Phase 2b trial fails to achieve its primary endpoint or produces equivocal results, the anticipated regulatory pathway for CLT-4019 would be materially impacted, and the value of the Transaction to Penterra would be significantly reduced.
Clinical Hold Risk. Although no clinical holds have been imposed on IND 158429 to date, the FDA retains the authority to impose a clinical hold at any time if safety signals emerge from ongoing clinical trial data, DSMB reviews, or IND Safety Reports. The known adverse events of CLT-4019, including neutropenia and hepatotoxicity, are class-related risks associated with CDK4/6 inhibitors. While these events have been manageable to date and the DSMB has consistently recommended continuation of the trial, there is an inherent risk that the accumulation of additional safety data could result in a safety signal that triggers FDA action.
Enrollment Delay Risk. Although the Phase 2b trial is substantially enrolled (approximately 95% of target enrollment as of July 19, 2023), any unexpected delays in achieving full enrollment or in reaching the pre-specified number of PFS events for the primary analysis could postpone the availability of topline data beyond Q4 2023, with cascading effects on the regulatory timeline and the achievability of the CVR milestone.
B. Regulatory Risk
Phase 3 Design Uncertainty. Even assuming positive Phase 2b data, the FDA may not concur with Caliston's proposed Phase 3 registrational trial design and may require modifications to the study design, endpoints, patient population, sample size, or duration that could extend the development timeline and increase costs. The FDA may also require additional nonclinical studies or CMC data to support the Phase 3 program or NDA submission.
Accelerated Approval Risk. If Caliston (or Penterra) pursues accelerated approval on the basis of the Phase 2b data, there are several attendant risks. First, the FDA may dec