1018-00005 · Penterra Pharmaceuticals Corp · Memoranda & Analysis

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CALDERWOOD & HARKNESS LLP 1120 Avenue of the Americas, 32nd Floor New York, New York 10036

PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT

MEMORANDUM

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 with Penterra's planned supplemental New Drug Application ("sNDA") seeking approval for a new indication — the treatment of moderate-to-severe chronic plaque psoriasis in adults who are candidates for systemic therapy or phototherapy. On July 28, 2022, FDA granted Penterra's request for a deferral of the pediatric study completion deadline, permitting Penterra to defer the submission of pediatric study results until eighteen months after FDA approval of the adult psoriasis indication.

This memorandum analyzes the scope and implications of the deferral, outlines Penterra's ongoing obligations under the deferral and the Written Request, and identifies the actions that Penterra must continue to undertake even during any period of engagement dormancy or programmatic pause in the sNDA effort. The memorandum also addresses the pediatric exclusivity incentive available to Penterra upon successful completion of the required pediatric study, the interaction between the deferral and the postmarketing requirements framework, and the coordination that will be required among Penterra's various outside advisors as the pediatric study obligation matures.

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 inadequate response or intolerance to one or more disease-modifying antirheumatic drugs ("DMARDs"). The RA indication has been the foundation of velonatib's commercial success since launch, and the product has established a significant market presence in the JAK inhibitor class.

Penterra is now pursuing an sNDA in the form of an Efficacy Supplement (Type 10) to add a new indication for velonatib: the treatment of moderate-to-severe chronic plaque psoriasis in adults who are candidates for systemic therapy or phototherapy. The proposed dosing regimen for the psoriasis indication is velonatib 10 mg administered orally once daily. The sNDA will rely on a clinical data package generated through the CLARION clinical development program, which is described more fully below.

Calderwood & Harkness LLP was engaged as outside FDA regulatory counsel for the sNDA effort on July 7, 2022, under Matter No. 1018-00005. Our engagement encompasses regulatory strategy, FDA communications, and advice on all aspects of the pediatric study obligation addressed in this memorandum.

B. Clinical Program Overview

Penterra's clinical development program for velonatib in chronic plaque psoriasis — designated the CLARION program — consists of three clinical studies, two of which have been completed as of the date of this memorandum:

CLARION-1 (Phase II Dose-Ranging Study). CLARION-1 was a randomized, double-blind, placebo-controlled, dose-ranging study enrolling 287 patients with moderate-to-severe chronic plaque psoriasis. The study was completed in September 2020. CLARION-1 evaluated multiple dose levels of velonatib and identified the 10 mg once-daily dose as the optimal dose for further development. The primary efficacy endpoint — the proportion of patients achieving at least a 75% improvement from baseline in the Psoriasis Area and Severity Index ("PASI-75") at Week 12 — was met at the 10 mg dose, with 68.2% of velonatib-treated patients achieving PASI-75 compared to 12.4% of placebo-treated patients (p < 0.001). The safety profile observed in CLARION-1 was generally consistent with the known safety profile of velonatib from the RA indication.

CLARION-2 (Phase III Pivotal Study #1). CLARION-2 was a randomized, double-blind, placebo-controlled, Phase III pivotal study enrolling 742 patients with moderate-to-severe chronic plaque psoriasis. The study was completed in April 2022 and met both co-primary endpoints. The proportion of patients achieving PASI-75 at Week 16 was 71.5% in the velonatib 10 mg group compared to 9.1% in the placebo group (p < 0.001). The proportion of patients achieving a Static Physician's Global Assessment ("sPGA") score of 0 or 1 (clear or almost clear) at Week 16 was 58.3% in the velonatib 10 mg group compared to 5.7% in the placebo group (p < 0.001). CLARION-2 provides the first of two adequate and well-controlled studies required to support the sNDA.

CLARION-3 (Phase III Confirmatory Study). CLARION-3 is a randomized, double-blind, Phase III confirmatory study enrolling 698 patients with moderate-to-severe chronic plaque psoriasis. As of the date of this memorandum, CLARION-3 remains ongoing. Top-line data from CLARION-3 are expected in the fourth quarter of 2022. The study evaluates co-primary endpoints of PASI-90 at Week 16 and sPGA 0/1 at Week 16. Importantly, CLARION-3 includes an active comparator arm using an adalimumab biosimilar, providing a head-to-head comparison that is expected to differentiate velonatib in the psoriasis treatment landscape.

It is important to note that the three CLARION studies constitute the adult clinical data package for the sNDA. The pediatric study obligation arising from the Written Request is a separate requirement that is not part of the adult clinical data package and is subject to its own timeline as described in this memorandum.

C. Type B Pre-sNDA Meeting

On May 4, 2022, Penterra held a Type B Pre-NDA/BLA meeting with FDA (Meeting ID: FDA-2022-M-1743). The meeting was conducted with the Division of Dermatology and Dentistry within the Office of Immunology and Inflammation at the Center for Drug Evaluation and Research ("CDER"). The purpose of the meeting was to discuss the clinical, nonclinical, and chemistry, manufacturing, and controls ("CMC") data package supporting the planned sNDA for the psoriasis indication, as well as the proposed regulatory strategy for the submission.

During the meeting, FDA's review division noted the pediatric study expectation under PREA for a new indication sNDA and indicated that a Written Request would be forthcoming. FDA representatives stated that the adolescent population (ages 12–17) would be the relevant pediatric subpopulation for clinical plaque psoriasis, consistent with the Agency's general approach to pediatric study requirements in dermatology indications. FDA further indicated that it would not require studies in children under the age of 12 at this time, given the disease prevalence, the mechanism of action, and the availability of age-appropriate dosage forms.

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. This requirement is intended to ensure that pediatric patients have access to properly studied, safe, and effective medications and that labeling for approved drugs includes adequate pediatric use information.

A "relevant pediatric subpopulation" is defined to include any pediatric age group — neonates, infants, children, and adolescents — for which the drug's indication is clinically relevant. For chronic plaque psoriasis, FDA has identified the relevant pediatric subpopulation as adolescents ages 12 through 17. This determination is consistent with the epidemiology of moderate-to-severe chronic plaque psoriasis, which is relatively uncommon in younger children but represents a meaningful disease burden in the adolescent population.

Notably, FDA did not request studies in children under the age of 12. This approach is consistent with FDA guidance recognizing that the disease condition and proposed mechanism of action of JAK inhibitors are most directly relevant to the adolescent subpopulation for plaque psoriasis, and that the oral tablet dosage form is generally appropriate for patients in the 12-to-17-year age range without the need for a pediatric-specific formulation.

B. Waivers. Under 21 U.S.C. § 355c(a)(4), FDA may grant a full or partial waiver of the pediatric study requirement if one or more of the following conditions is met:

(i) Necessary studies are impossible or highly impracticable because, for example, the number of patients in the relevant pediatric subpopulation is so small that it would be infeasible to conduct adequate and well-controlled studies;

(ii) There is evidence strongly suggesting that the drug would be ineffective or unsafe in the pediatric population;

(iii) The drug does not represent a meaningful therapeutic benefit over existing treatments for pediatric patients and is not likely to be used in a substantial number of pediatric patients; or

(iv) The applicant can demonstrate that reasonable attempts to produce a pediatric formulation necessary for the relevant age group have failed.

Penterra did not seek a waiver of the pediatric study requirement for velonatib in the adolescent psoriasis population. This decision was appropriate and well-founded: the adolescent plaque psoriasis population is clinically relevant and of sufficient size to permit a meaningful clinical study; there is no evidence suggesting that velonatib would be ineffective or unsafe in adolescents; velonatib may represent a meaningful therapeutic benefit over existing treatments in the adolescent psoriasis population, where treatment options remain limited; and the existing 10 mg oral tablet formulation is appropriate for patients ages 12 through 17 without modification. Accordingly, no waiver basis was identified, and seeking a waiver would have been unlikely to succeed and could have undermined Penterra's credibility with the review division.

C. Deferrals. Under 21 U.S.C. § 355c(a)(3), FDA may grant a deferral of the requirement to submit pediatric study data with the sNDA if one or more of the following conditions is present:

(i) The drug or biological product is ready for approval for use in adults before pediatric studies are complete;

(ii) Pediatric studies should be delayed until additional safety or effectiveness data have been collected in the adult population; or

(iii) There is another appropriate reason for deferral.

A deferral postpones the deadline for submitting the results of the required pediatric studies but does not eliminate or reduce the underlying obligation to conduct those studies. The deferral mechanism recognizes that in many cases, it is scientifically appropriate and in the interest of public health to approve a drug for the adult population while pediatric studies are ongoing or planned, rather than delaying adult approval until the pediatric data are available.

Under the provisions of the FDA Reauthorization Act of 2012 ("FDARA"), Section 505B(a) of the Federal Food, Drug, and Cosmetic Act ("FD&C Act"), FDA is required to specify in any deferral grant a date by which the deferred pediatric studies must be completed and the results submitted to the Agency. This deadline is mandatory and enforceable. The applicant is expected to comply with the specified timeline and to provide periodic progress updates to FDA throughout the deferral period.

It is critical that Penterra understand and internalize this fundamental distinction: a deferral is not a waiver. The obligation to conduct and complete the pediatric study remains in full force, and the deferral merely adjusts the timing for performance. Failure to meet the deferred deadline will be treated as non-compliance with a regulatory obligation.

D. Consequences of Non-Compliance

Under Section 505B(d) of the FD&C Act, once the adult indication is approved, the deferred pediatric study is treated as a postmarketing requirement ("PMR"). Postmarketing requirements are binding regulatory obligations, and failure to comply with a PMR can result in significant consequences for the applicant, including but not limited to:

• Civil monetary penalties under Section 303(f) of the FD&C Act for failure to submit required reports or complete required postmarketing studies;

• FDA enforcement correspondence, including Warning Letters or Untitled Letters, that may be publicly disclosed;

• Adverse labeling consequences, including the potential for FDA to require modifications to the product labeling or to issue safety communications relating to the lack of pediatric data; and

• Public disclosure of non-compliance, as FDA publicly tracks the status of all PMRs and PMCs (postmarketing commitments) on its website, and the status of Penterra's compliance would be visible to investors, competitors, healthcare providers, and the public.

These consequences underscore the importance of treating the deferral deadline as a firm regulatory commitment and planning accordingly.

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 division during the May 4, 2022 Type B Pre-sNDA meeting and was consistent with FDA's standard approach to pediatric study requirements for new dermatology indications.

B. Study Parameters Specified in the Written Request

The Written Request specifies the following parameters for the required pediatric study:

Population. The study must enroll adolescents ages 12 through 17 with moderate-to-severe chronic plaque psoriasis, defined as patients with a body surface area ("BSA") involvement of 10% or greater, a PASI score of 12 or higher, and a sPGA score of 3 or higher. These inclusion criteria are generally consistent with the criteria used in the CLARION adult studies and are standard for moderate-to-severe plaque psoriasis clinical trials.

Study Design. The study must be a randomized, double-blind, placebo-controlled trial with a 16-week treatment period. This design mirrors the fundamental structure of the CLARION-2 and CLARION-3 pivotal studies in the adult population and will permit comparison of treatment effects across age groups.

Minimum Enrollment. The Written Request specifies a minimum enrollment of 80 patients. This sample size is intended to provide adequate statistical power to detect a clinically meaningful treatment difference between velonatib and placebo in the adolescent population, while recognizing the practical challenges of enrolling adolescent patients in dermatology clinical trials.

Dosing. The study should evaluate velonatib 10 mg administered orally once daily. However, the Written Request also indicates that Penterra should propose weight-based dosing adjustments in the study protocol for lower body-weight adolescents. This is a standard FDA expectation for pediatric studies, recognizing that body weight variability in adolescents may affect drug exposure and safety.

Primary Endpoint. The primary efficacy endpoint is the proportion of patients achieving PASI-75 at Week 16, which is consistent with the primary endpoint used in the CLARION adult program and is a well-validated measure of treatment response in plaque psoriasis.

Pharmacokinetic Sub-Study. The Written Request requires a population pharmacokinetic ("PK") analysis to characterize velonatib exposure in the adolescent population and to support dose selection. This analysis will be important both for confirming that the proposed dosing regimen achieves adequate and safe drug exposure in adolescents and for informing any weight-based dosing recommendations that may ultimately be reflected in the product labeling.

Safety Extension. A 52-week open-label safety extension is required following the 16-week placebo-controlled treatment period. This extension phase is standard for pediatric studies of immunomodulatory agents and will provide long-term safety data in the adolescent population, including evaluation of growth and development parameters, immunogenicity, and any potential effects on the adolescent immune system.

C. Pediatric Exclusivity Incentive

Under 21 U.S.C. § 355a, the successful completion of pediatric studies conducted in response to a Written Request may qualify the applicant for six months of pediatric exclusivity. Pediatric exclusivity, when granted, extends all existing market exclusivity periods and Orange Book-listed patent protections for the drug product by an additional six months. This extension applies across all approved indications — not only the indication for which the pediatric study was conducted — and therefore has the potential to provide significant commercial value.

Penterra currently holds two Orange Book-listed patents for velonatib:

• U.S. Patent No. 10,412,XXX — a compound patent covering the velonatib hydrochloride active pharmaceutical ingredient, with a current expiration date of February 2034; and

• U.S. Patent No. 10,891,XXX — a formulation patent covering the velonatib oral tablet dosage form, with a current expiration date of August 2036.

If Penterra obtains pediatric exclusivity, these expiration dates would each be extended by six months — to approximately August 2034 and February 2037, respectively. Given that velonatib's fiscal year 2022 U.S. net sales are approximately $1.47 billion, the incremental revenue attributable to an additional six months of market exclusivity and patent protection is substantial. The pediatric exclusivity incentive should therefore be a significant factor in Penterra's strategic planning for the pediatric study.

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. It would be inappropriate to delay adult approval — and the resulting patient access to velonatib for chronic plaque psoriasis — while the pediatric study is conducted; and

(ii) The adult safety and efficacy data should be fully characterized and analyzed, including the complete results of the CLARION-3 confirmatory trial, before designing and initiating the pediatric study. The adult data will inform dose selection, safety monitoring requirements, and inclusion/exclusion criteria for the pediatric protocol.

Calderwood & Harkness reviewed and provided comments on the deferral request prior to its submission to FDA. Our review focused on ensuring that the deferral request was consistent with the statutory deferral criteria, that the supporting rationale was adequately articulated, and that the request did not contain language that could be construed as a voluntary commitment to a timeline more aggressive than required by law.

B. FDA's Deferral Grant

By letter dated July 28, 2022, FDA granted Penterra's deferral request in full. The deferral grant letter sets forth the following terms and conditions:

Submission Deadline. The results of the deferred pediatric study must be submitted to FDA no later than eighteen (18) months after the date of approval of the adult psoriasis indication — that is, eighteen months after FDA's approval of the sNDA for velonatib in moderate-to-severe chronic plaque psoriasis in adults. The 18-month clock does not begin to run until the adult indication is approved by FDA. Accordingly, if the adult sNDA approval is delayed for any reason, the deadline for pediatric study submission is correspondingly delayed.

Annual Reporting. Penterra must submit annual progress reports on the status of the deferred pediatric study to FDA. These reports are due within 60 days of the anniversary of the deferral grant date. Because the deferral was granted on July 28, 2022, the anniversary date falls on July 28 of each subsequent year, and the 60-day reporting window means that reports are due by September 26 of each year during the deferral period. This obligation begins in 2023 and continues until the pediatric study results are submitted and the PMR obligation is fulfilled.

Study Initiation Expectation. FDA's deferral letter also states that the Agency expects the pediatric study protocol to be submitted as an IND amendment within six (6) months of approval of the adult indication. While this expectation is not framed as a binding legal deadline in the same manner as the 18-month submission deadline, it represents a clear regulatory expectation that Penterra should treat seriously. Failure to submit a protocol within this window could prompt FDA inquiry and could be viewed as a signal of non-compliance.

C. Interaction with Postmarketing Requirements

Under Section 505B(d) of the FD&C Act, deferred pediatric studies are converted to formal postmarketing requirements upon approval of the adult indication. This conversion is automatic and occurs by operation of law; no additional action by Penterra or by FDA is required for the conversion to take effect.

Because the adult psoriasis indication has not yet been approved as of the date of this memorandum, the deferred pediatric study does not yet appear in FDA's PMR tracking system. The deferral is, however, documented in FDA's regulatory records and is associated with NDA No. 215-847. Upon approval of the sNDA, the deferred study will be automatically converted to a PMR, and FDA will assign a formal PMR number.

Once converted to a PMR, Penterra will be subject to FDA's PMR reporting requirements as set forth in 21 C.F.R. § 314.81(b)(2)(vii), which require the submission of annual status reports describing the progress of the required postmarketing study. These PMR annual status reports are separate from, and in addition to, the annual progress reports required under the deferral letter during the pre-approval period. In practice, the two reporting obligations will merge upon approval: the deferral annual reporting obligation will be subsumed into the PMR annual reporting framework, and Penterra will report on the status of the pediatric study through the PMR mechanism.

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 in the regulatory process.

First Annual Report Due Date. The first annual progress report is due by September 26, 2023, which is 60 days after the first anniversary of the July 28, 2022 deferral grant date. Penterra must submit this report on time regardless of any changes to the sNDA timeline, the status of the CLARION-3 confirmatory trial, or the status of the engagement with outside counsel.

Content of Annual Reports. The annual progress reports should describe the status of the deferred pediatric study, including any relevant developments, planning activities, and milestones. Even if no study activities have commenced — which is expected to be the case for the first report, given that the adult program is still ongoing — the report must be submitted and should provide substantive information regarding the overall program trajectory. Specifically, Penterra should include in each annual report:

• The current status of the adult clinical program, including results from CLARION-3 (when available), any changes to the adult sNDA submission timeline, and any redesigned study plans;

• The anticipated timeline for submission of the adult sNDA;

• The planned timeline for initiating pediatric study protocol development, including any pre-study activities such as site identification, formulation assessment, or engagement with clinical research organizations;

• A description of any barriers or challenges to initiating the pediatric study, including scientific, clinical, operational, or regulatory barriers; and

• Any relevant developments in the competitive landscape, FDA guidance, or clinical knowledge base that may affect the pediatric study design.

The annual reports need not be lengthy, but they should be substantive and responsive to FDA's information needs. A mere placeholder submission stating that no progress has been made is unlikely to satisfy FDA's expectations and could prompt Agency follow-up.

B. Written Request Expiration Risk

Under 21 U.S.C. § 355c(d)(4) and relevant FDA guidance, a Written Request may be deemed withdrawn if the applicant fails to respond within certain timeframes or fails to submit required progress reports. The withdrawal of a Written Request would have significant implications for Penterra, as it would eliminate the opportunity to obtain pediatric exclusivity — the six-month extension of existing market exclusivity and patent protections — upon completion of the pediatric study.

Penterra should monitor all FDA communications regarding the status of the Written Request, particularly during any period in which the sNDA effort is paused or dormant. Any communication from FDA suggesting that the Written Request may be at risk of withdrawal — whether through formal correspondence, email, or informal communication — should be immediately flagged to outside counsel for assessment and response.

The risk of Written Request withdrawal is heightened during periods of programmatic inactivity. FDA may interpret a prolonged absence of progress on the pediatric study — or a failure to submit timely annual reports — as an indication that the applicant is no longer pursuing the Written Request, which could trigger the withdrawal process. Continued engagement through annual reporting and responsive communication with FDA is therefore essential to preserving the Written Request and the associated pediatric exclusivity incentive.

C. IND Amendment for Pediatric Protocol

As noted above, FDA expects the pediatric study protocol to be submitted as an IND amendment within six months of approval of the adult indication. This expectation, while not a strict legal deadline enforceable through civil penalties, represents a meaningful regulatory commitment and should be treated as a planning target.

To meet this six-month window, Penterra will need to undertake a number of pre-study activities in advance of adult approval. These activities include, but are not limited to:

• Drafting and finalizing the pediatric study protocol, including the randomization scheme, dosing regimen (with weight-based adjustments), primary and secondary endpoint definitions, statistical analysis plan, and safety monitoring plan;

• Designing the population PK sub-study, including sampling strategy, bioanalytical method development, and population PK modeling approach;

• Conducting a pediatric formulation assessment to confirm that the existing 10 mg oral tablet is appropriate for adolescents ages 12 through 17 without modification, or to develop a weight-adjusted dosing approach if needed;

• Identifying and qualifying clinical trial sites with experience in adolescent dermatology research and access to the target patient population;

• Preparing and submitting Institutional Review Board ("IRB") and ethics committee applications for all participating sites; and

• Engaging a clinical research organization ("CRO"), if needed, to support study operations.

Penterra's VP, Quality & CMC, Janet Ling, should be consulted regarding any CMC considerations for age-appropriate formulation. It is our understanding that the existing 10 mg oral tablet may be suitable for adolescents ages 12 through 17 without modification, given the typical body weight range and swallowing ability in this age group. However, this assessment should be formally documented, and any weight-based dosing recommendations should be incorporated into the protocol.

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 confirmatory trial does not meet its primary endpoints and a redesigned confirmatory study is required before the sNDA can be submitted.

In any such scenario, it is important that Penterra understand and act upon the following principles:

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 Regulatory Affairs department must continue to prepare and submit these reports on schedule, even during any period in which the sNDA effort is paused or the outside counsel engagement is inactive. Failure to submit annual reports could jeopardize both the deferral and the Written Request.

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 progress of the overall program and to assess whether the applicant is making adequate progress toward fulfilling its obligations. If FDA perceives undue delay in the adult program — particularly if the delay extends over multiple years without a clear path forward — the Agency could initiate discussions about the status of the deferral and the Written Request.

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 compliance with its terms. However, a protracted delay in the adult program could complicate the commercial calculus underlying the pediatric exclusivity benefit. If adult approval is significantly delayed, the remaining patent terms at the time of pediatric exclusivity eligibility may be shorter, potentially reducing the commercial value of the six-month extension. Penterra's commercial and business development teams should monitor this dynamic and incorporate it into ongoing portfolio planning.

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. Priya Sundaram, Managing Director, and Dr. Neil Oxborough, Principal Consultant. CBG has been involved in the design and oversight of the CLARION clinical program and has deep familiarity with the velonatib clinical data package.

When the time comes for pediatric protocol development, CBG should be actively involved in the following areas: (i) dose selection for the adolescent population, informed by the population PK analysis from the adult program and any relevant pharmacometric modeling; (ii) design of the population PK sub-study required by the Written Request, including sampling strategy and bioanalytical considerations; (iii) clinical trial site feasibility assessment, including identification of sites with pediatric dermatology clinical trial capabilities and access to the target adolescent patient population; and (iv) overall study design refinement, including endpoint selection, statistical analysis plan, and safety monitoring strategy.

B. Whitfield & Grange LLP

Whitfield & Grange LLP ("W&G") serves as Penterra's patent prosecution and intellectual property strategy counsel. The engagement is led by Dr. Eleanor Cassidy and Brian Takata. W&G handles all patent prosecution and Orange Book listing strategy for velonatib and is familiar with the full velonatib patent portfolio.

W&G should be consulted regarding the pediatric exclusivity implications of the Written Request and the deferred pediatric study. Specifically, W&G should advise on: (i) the timing and process for requesting the six-month pediatric exclusivity extension upon successful completion of the pediatric study and submission of the study report to FDA; (ii) the interaction between pediatric exclusivity and the existing Orange Book-listed patents, including the compound patent (U.S. Patent No. 10,412,XXX, expiring February 2034) and the formulation patent (U.S. Patent No. 10,891,XXX, expiring August 2036); and (iii) the scope of any additional intellectual property protections that may be available in connection with the pediatric indication.

Additionally, we note that a provisional patent application was filed by W&G in August 2022 (U.S. Provisional Application No. 63/XXX,XXX) for a method-of-treatment patent relating to velonatib in chronic plaque psoriasis. Depending on how the claims in the eventual non-provisional application are drafted, this patent may also cover the use of velonatib in adolescent patients with plaque psoriasis. W&G should evaluate whether the claims should be drafted broadly enough to encompass the pediatric indication and to maximize the scope of patent protection that would benefit from the six-month pediatric exclusivity extension.

C. Thornfield Lewis LLP

Thornfield Lewis LLP serves as Penterra's independent auditor. The engagement is led by Richard Croydon, CPA, Engagement Partner. Although Thornfield Lewis is not involved in the regulatory strategy for velonatib, the firm should be apprised of the pediatric study obligation and the associated deferral, as these may affect Penterra's pipeline disclosure in SEC filings, including Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.

The deferred pediatric study represents a contingent obligation that could have financial statement implications depending on cost estimates for the study and the probability of completion. Penterra's finance and accounting team should work with Thornfield Lewis to determine whether the pediatric study obligation requires disclosure as a contingent liability or a pipeline commitment, and to ensure that Penterra's public filings accurately reflect the status of the pediatric study obligation and the associated commercial opportunities (including pediatric exclusivity).

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 the status of the sNDA effort or the engagement with outside counsel, and should include escalation procedures in the event that the responsible personnel change or the organizational structure is modified. We recommend that an internal reminder be set for no later than August 1 of each year to allow adequate time for preparation, internal review, and submission.

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 aggressive than required, and accurately reflects the status of the program. Even during any period of engagement dormancy, Penterra should contact Calderwood & Harkness to arrange for review of the annual report at least 30 days before the submission deadline.

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 pediatric exclusivity and would represent a significant adverse event for Penterra's velonatib franchise. Penterra's Regulatory Affairs team should designate a specific individual to serve as the point of contact for all Written Request-related communications and to maintain a complete file of all FDA correspondence on this matter.

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 the CLARION program, including any new safety signals, labeling changes, or risk management requirements that may have arisen;

• The competitive landscape, including any pediatric labeling approvals obtained by competitor products in the psoriasis space (e.g., biologics or other JAK inhibitors that may have obtained pediatric indications during the intervening period);

• Any changes in FDA's Division of Dermatology and Dentistry review practices, staffing, or regulatory standards that could affect the pediatric study review; and

• Any developments in the broader regulatory environment, including changes to PREA, FDARA, or the pediatric exclusivity statute that could affect Penterra's rights or obligations.

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 drafting and finalization, IRB submissions, CRO selection, population PK modeling, and formulation assessment — sufficiently in advance of the anticipated adult approval date. We recommend that Penterra begin protocol development no later than six months before the anticipated date of adult sNDA submission. This will provide adequate lead time for protocol development and regulatory review, so that the pediatric IND amendment can be submitted to FDA within the six-month window expected by the Agency after adult approval.

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 and market exclusivity, taking into account projected sales volumes, pricing, generic competition timelines, and biosimilar entry risks. The results of this analysis should inform Penterra's cost-benefit assessment of the pediatric study investment and should be factored into management-level decisions regarding the prioritization of the pediatric study within Penterra's broader clinical development portfolio.

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 submit annual progress reports to FDA by September 26 of each year.

These annual reporting requirements are ongoing and must be met regardless of the status of the adult sNDA, the status of the CLARION-3 confirmatory trial, or the status of the engagement with outside counsel. Failure to submit timely annual reports could jeopardize both the deferral and the Written Request, and could result in the loss of the pediatric exclusivity incentive.

The pediatric exclusivity incentive — six months of additional market exclusivity and patent protection across the entire velonatib franchise — provides meaningful commercial upside and should be a significant factor in Penterra's strategic planning for the pediatric study. Given velonatib's current annual U.S. net sales of approximately $1.47 billion, the value of this incentive is substantial and warrants proactive planning and investment.

Calderwood & Harkness remains available to assist with all aspects of the pediatric study obligation as it matures, including review of annual progress reports, drafting and review of FDA correspondence, coordination with CBG on pediatric protocol development, and strategic advice on the timing and execution of the pediatric study program upon reactivation of the sNDA effort. We look forward to continuing our work with Penterra on this important regulatory matter.

This memorandum is privileged and confidential. It constitutes an attorney-client communication and attorney work product, and is prepared in connection with the provision of legal advice to Penterra Pharmaceuticals Corp. The contents of this memorandum should not be disclosed to any third party without prior consultation with Calderwood & Harkness LLP. Disclosure to third parties may result in waiver of applicable privileges.

Please do not hesitate to contact us with any questions.

Sean Morrissey, Associate Calderwood & Harkness LLP 1120 Avenue of the Americas, 32nd Floor New York, NY 10036 Tel: (212) 555-4812

Email: s.morrissey@calderwoodharkness.com

Christopher Aiken, Associate Calderwood & Harkness LLP 1120 Avenue of the Americas, 32nd Floor New York, NY 10036 Tel: (212) 555-4837

Email: c.aiken@calderwoodharkness.com

TO:	Dr. Karen Hessler, SVP, Regulatory Affairs, Penterra Pharmaceuticals Corp.
CC:	Lisa Moritani, Esq., General Counsel & Corporate Secretary, Penterra Pharmaceuticals Corp.
FROM:	Sean Morrissey, Associate, Calderwood & Harkness LLP; Christopher Aiken, Associate, Calderwood & Harkness LLP
DATE:	September 8, 2022
RE:	Pediatric Study Requirements and Deferral — Velonatib (NDA No. 215-847) sNDA for Chronic Plaque Psoriasis
Matter No.:	1018-00005

CALDERWOOD & HARKNESS LLP 1120 Avenue of the Americas, 32nd Floor New York, New York 10036
PRIVILEGED & CONFIDENTIAL — ATTORNEY-CLIENT COMMUNICATION ATTORNEY WORK PRODUCT
MEMORANDUM
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 with Penterra's planned supplemental New Drug Application ("sNDA") seeking approval for a new indication — the treatment of moderate-to-severe chronic plaque psoriasis in adults who are candidates for systemic therapy or phototherapy. On July 28, 2022, FDA granted Penterra's request for a deferral of the pediatric study completion deadline, permitting Penterra to defer the submission of pediatric study results until eighteen months after FDA approval of the adult psoriasis indication.
This memorandum analyzes the scope and implications of the deferral, outlines Penterra's ongoing obligations under the deferral and the Written Request, and identifies the actions that Penterra must continue to undertake even during any period of engagement dormancy or programmatic pause in the sNDA effort. The memorandum also addresses the pediatric exclusivity incentive available to Penterra upon successful completion of the required pediatric study, the interaction between the deferral and the postmarketing requirements framework, and the coordination that will be required among Penterra's various outside advisors as the pediatric study obligation matures.
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 inadequate response or intolerance to one or more disease-modifying antirheumatic drugs ("DMARDs"). The RA indication has been the foundation of velonatib's commercial success since launch, and the product has established a significant market presence in the JAK inhibitor class.
Penterra is now pursuing an sNDA in the form of an Efficacy Supplement (Type 10) to add a new indication for velonatib: the treatment of moderate-to-severe chronic plaque psoriasis in adults who are candidates for systemic therapy or phototherapy. The proposed dosing regimen for the psoriasis indication is velonatib 10 mg administered orally once daily. The sNDA will rely on a clinical data package generated through the CLARION clinical development program, which is described more fully below.
Calderwood & Harkness LLP was engaged as outside FDA regulatory counsel for the sNDA effort on July 7, 2022, under Matter No. 1018-00005. Our engagement encompasses regulatory strategy, FDA communications, and advice on all aspects of the pediatric study obligation addressed in this memorandum.
B. Clinical Program Overview
Penterra's clinical development program for velonatib in chronic plaque psoriasis — designated the CLARION program — consists of three clinical studies, two of which have been completed as of the date of this memorandum:
CLARION-1 (Phase II Dose-Ranging Study). CLARION-1 was a randomized, double-blind, placebo-controlled, dose-ranging study enrolling 287 patients with moderate-to-severe chronic plaque psoriasis. The study was completed in September 2020. CLARION-1 evaluated multiple dose levels of velonatib and identified the 10 mg once-daily dose as the optimal dose for further development. The primary efficacy endpoint — the proportion of patients achieving at least a 75% improvement from baseline in the Psoriasis Area and Severity Index ("PASI-75") at Week 12 — was met at the 10 mg dose, with 68.2% of velonatib-treated patients achieving PASI-75 compared to 12.4% of placebo-treated patients (p < 0.001). The safety profile observed in CLARION-1 was generally consistent with the known safety profile of velonatib from the RA indication.
CLARION-2 (Phase III Pivotal Study #1). CLARION-2 was a randomized, double-blind, placebo-controlled, Phase III pivotal study enrolling 742 patients with moderate-to-severe chronic plaque psoriasis. The study was completed in April 2022 and met both co-primary endpoints. The proportion of patients achieving PASI-75 at Week 16 was 71.5% in the velonatib 10 mg group compared to 9.1% in the placebo group (p < 0.001). The proportion of patients achieving a Static Physician's Global Assessment ("sPGA") score of 0 or 1 (clear or almost clear) at Week 16 was 58.3% in the velonatib 10 mg group compared to 5.7% in the placebo group (p < 0.001). CLARION-2 provides the first of two adequate and well-controlled studies required to support the sNDA.
CLARION-3 (Phase III Confirmatory Study). CLARION-3 is a randomized, double-blind, Phase III confirmatory study enrolling 698 patients with moderate-to-severe chronic plaque psoriasis. As of the date of this memorandum, CLARION-3 remains ongoing. Top-line data from CLARION-3 are expected in the fourth quarter of 2022. The study evaluates co-primary endpoints of PASI-90 at Week 16 and sPGA 0/1 at Week 16. Importantly, CLARION-3 includes an active comparator arm using an adalimumab biosimilar, providing a head-to-head comparison that is expected to differentiate velonatib in the psoriasis treatment landscape.
It is important to note that the three CLARION studies constitute the adult clinical data package for the sNDA. The pediatric study obligation arising from the Written Request is a separate requirement that is not part of the adult clinical data package and is subject to its own timeline as described in this memorandum.
C. Type B Pre-sNDA Meeting
On May 4, 2022, Penterra held a Type B Pre-NDA/BLA meeting with FDA (Meeting ID: FDA-2022-M-1743). The meeting was conducted with the Division of Dermatology and Dentistry within the Office of Immunology and Inflammation at the Center for Drug Evaluation and Research ("CDER"). The purpose of the meeting was to discuss the clinical, nonclinical, and chemistry, manufacturing, and controls ("CMC") data package supporting the planned sNDA for the psoriasis indication, as well as the proposed regulatory strategy for the submission.
During the meeting, FDA's review division noted the pediatric study expectation under PREA for a new indication sNDA and indicated that a Written Request would be forthcoming. FDA representatives stated that the adolescent population (ages 12–17) would be the relevant pediatric subpopulation for clinical plaque psoriasis, consistent with the Agency's general approach to pediatric study requirements in dermatology indications. FDA further indicated that it would not require studies in children under the age of 12 at this time, given the disease prevalence, the mechanism of action, and the availability of age-appropriate dosage forms.
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. This requirement is intended to ensure that pediatric patients have access to properly studied, safe, and effective medications and that labeling for approved drugs includes adequate pediatric use information.
A "relevant pediatric subpopulation" is defined to include any pediatric age group — neonates, infants, children, and adolescents — for which the drug's indication is clinically relevant. For chronic plaque psoriasis, FDA has identified the relevant pediatric subpopulation as adolescents ages 12 through 17. This determination is consistent with the epidemiology of moderate-to-severe chronic plaque psoriasis, which is relatively uncommon in younger children but represents a meaningful disease burden in the adolescent population.
Notably, FDA did not request studies in children under the age of 12. This approach is consistent with FDA guidance recognizing that the disease condition and proposed mechanism of action of JAK inhibitors are most directly relevant to the adolescent subpopulation for plaque psoriasis, and that the oral tablet dosage form is generally appropriate for patients in the 12-to-17-year age range without the need for a pediatric-specific formulation.
B. Waivers. Under 21 U.S.C. § 355c(a)(4), FDA may grant a full or partial waiver of the pediatric study requirement if one or more of the following conditions is met:
(i) Necessary studies are impossible or highly impracticable because, for example, the number of patients in the relevant pediatric subpopulation is so small that it would be infeasible to conduct adequate and well-controlled studies;
(ii) There is evidence strongly suggesting that the drug would be ineffective or unsafe in the pediatric population;
(iii) The drug does not represent a meaningful therapeutic benefit over existing treatments for pediatric patients and is not likely to be used in a substantial number of pediatric patients; or
(iv) The applicant can demonstrate that reasonable attempts to produce a pediatric formulation necessary for the relevant age group have failed.
Penterra did not seek a waiver of the pediatric study requirement for velonatib in the adolescent psoriasis population. This decision was appropriate and well-founded: the adolescent plaque psoriasis population is clinically relevant and of sufficient size to permit a meaningful clinical study; there is no evidence suggesting that velonatib would be ineffective or unsafe in adolescents; velonatib may represent a meaningful therapeutic benefit over existing treatments in the adolescent psoriasis population, where treatment options remain limited; and the existing 10 mg oral tablet formulation is appropriate for patients ages 12 through 17 without modification. Accordingly, no waiver basis was identified, and seeking a waiver would have been unlikely to succeed and could have undermined Penterra's credibility with the review division.
C. Deferrals. Under 21 U.S.C. § 355c(a)(3), FDA may grant a deferral of the requirement to submit pediatric study data with the sNDA if one or more of the following conditions is present:
(i) The drug or biological product is ready for approval for use in adults before pediatric studies are complete;
(ii) Pediatric studies should be delayed until additional safety or effectiveness data have been collected in the adult population; or
(iii) There is another appropriate reason for deferral.
A deferral postpones the deadline for submitting the results of the required pediatric studies but does not eliminate or reduce the underlying obligation to conduct those studies. The deferral mechanism recognizes that in many cases, it is scientifically appropriate and in the interest of public health to approve a drug for the adult population while pediatric studies are ongoing or planned, rather than delaying adult approval until the pediatric data are available.
Under the provisions of the FDA Reauthorization Act of 2012 ("FDARA"), Section 505B(a) of the Federal Food, Drug, and Cosmetic Act ("FD&C Act"), FDA is required to specify in any deferral grant a date by which the deferred pediatric studies must be completed and the results submitted to the Agency. This deadline is mandatory and enforceable. The applicant is expected to comply with the specified timeline and to provide periodic progress updates to FDA throughout the deferral period.
It is critical that Penterra understand and internalize this fundamental distinction: a deferral is not a waiver. The obligation to conduct and complete the pediatric study remains in full force, and the deferral merely adjusts the timing for performance. Failure to meet the deferred deadline will be treated as non-compliance with a regulatory obligation.
D. Consequences of Non-Compliance
Under Section 505B(d) of the FD&C Act, once the adult indication is approved, the deferred pediatric study is treated as a postmarketing requirement ("PMR"). Postmarketing requirements are binding regulatory obligations, and failure to comply with a PMR can result in significant consequences for the applicant, including but not limited to:
• Civil monetary penalties under Section 303(f) of the FD&C Act for failure to submit required reports or complete required postmarketing studies;
• FDA enforcement correspondence, including Warning Letters or Untitled Letters, that may be publicly disclosed;
• Adverse labeling consequences, including the potential for FDA to require modifications to the product labeling or to issue safety communications relating to the lack of pediatric data; and
• Public disclosure of non-compliance, as FDA publicly tracks the status of all PMRs and PMCs (postmarketing commitments) on its website, and the status of Penterra's compliance would be visible to investors, competitors, healthcare providers, and the public.
These consequences underscore the importance of treating the deferral deadline as a firm regulatory commitment and planning accordingly.
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 division during the May 4, 2022 Type B Pre-sNDA meeting and was consistent with FDA's standard approach to pediatric study requirements for new dermatology indications.
B. Study Parameters Specified in the Written Request
The Written Request specifies the following parameters for the required pediatric study:
Population. The study must enroll adolescents ages 12 through 17 with moderate-to-severe chronic plaque psoriasis, defined as patients with a body surface area ("BSA") involvement of 10% or greater, a PASI score of 12 or higher, and a sPGA score of 3 or higher. These inclusion criteria are generally consistent with the criteria used in the CLARION adult studies and are standard for moderate-to-severe plaque psoriasis clinical trials.
Study Design. The study must be a randomized, double-blind, placebo-controlled trial with a 16-week treatment period. This design mirrors the fundamental structure of the CLARION-2 and CLARION-3 pivotal studies in the adult population and will permit comparison of treatment effects across age groups.
Minimum Enrollment. The Written Request specifies a minimum enrollment of 80 patients. This sample size is intended to provide adequate statistical power to detect a clinically meaningful treatment difference between velonatib and placebo in the adolescent population, while recognizing the practical challenges of enrolling adolescent patients in dermatology clinical trials.
Dosing. The study should evaluate velonatib 10 mg administered orally once daily. However, the Written Request also indicates that Penterra should propose weight-based dosing adjustments in the study protocol for lower body-weight adolescents. This is a standard FDA expectation for pediatric studies, recognizing that body weight variability in adolescents may affect drug exposure and safety.
Primary Endpoint. The primary efficacy endpoint is the proportion of patients achieving PASI-75 at Week 16, which is consistent with the primary endpoint used in the CLARION adult program and is a well-validated measure of treatment response in plaque psoriasis.
Pharmacokinetic Sub-Study. The Written Request requires a population pharmacokinetic ("PK") analysis to characterize velonatib exposure in the adolescent population and to support dose selection. This analysis will be important both for confirming that the proposed dosing regimen achieves adequate and safe drug exposure in adolescents and for informing any weight-based dosing recommendations that may ultimately be reflected in the product labeling.
Safety Extension. A 52-week open-label safety extension is required following the 16-week placebo-controlled treatment period. This extension phase is standard for pediatric studies of immunomodulatory agents and will provide long-term safety data in the adolescent population, including evaluation of growth and development parameters, immunogenicity, and any potential effects on the adolescent immune system.
C. Pediatric Exclusivity Incentive
Under 21 U.S.C. § 355a, the successful completion of pediatric studies conducted in response to a Written Request may qualify the applicant for six months of pediatric exclusivity. Pediatric exclusivity, when granted, extends all existing market exclusivity periods and Orange Book-listed patent protections for the drug product by an additional six months. This extension applies across all approved indications — not only the indication for which the pediatric study was conducted — and therefore has the potential to provide significant commercial value.
Penterra currently holds two Orange Book-listed patents for velonatib:
• U.S. Patent No. 10,412,XXX — a compound patent covering the velonatib hydrochloride active pharmaceutical ingredient, with a current expiration date of February 2034; and
• U.S. Patent No. 10,891,XXX — a formulation patent covering the velonatib oral tablet dosage form, with a current expiration date of August 2036.
If Penterra obtains pediatric exclusivity, these expiration dates would each be extended by six months — to approximately August 2034 and February 2037, respectively. Given that velonatib's fiscal year 2022 U.S. net sales are approximately $1.47 billion, the incremental revenue attributable to an additional six months of market exclusivity and patent protection is substantial. The pediatric exclusivity incentive should therefore be a significant factor in Penterra's strategic planning for the pediatric study.
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. It would be inappropriate to delay adult approval — and the resulting patient access to velonatib for chronic plaque psoriasis — while the pediatric study is conducted; and
(ii) The adult safety and efficacy data should be fully characterized and analyzed, including the complete results of the CLARION-3 confirmatory trial, before designing and initiating the pediatric study. The adult data will inform dose selection, safety monitoring requirements, and inclusion/exclusion criteria for the pediatric protocol.
Calderwood & Harkness reviewed and provided comments on the deferral request prior to its submission to FDA. Our review focused on ensuring that the deferral request was consistent with the statutory deferral criteria, that the supporting rationale was adequately articulated, and that the request did not contain language that could be construed as a voluntary commitment to a timeline more aggressive than required by law.
B. FDA's Deferral Grant
By letter dated July 28, 2022, FDA granted Penterra's deferral request in full. The deferral grant letter sets forth the following terms and conditions:
Submission Deadline. The results of the deferred pediatric study must be submitted to FDA no later than eighteen (18) months after the date of approval of the adult psoriasis indication — that is, eighteen months after FDA's approval of the sNDA for velonatib in moderate-to-severe chronic plaque psoriasis in adults. The 18-month clock does not begin to run until the adult indication is approved by FDA. Accordingly, if the adult sNDA approval is delayed for any reason, the deadline for pediatric study submission is correspondingly delayed.
Annual Reporting. Penterra must submit annual progress reports on the status of the deferred pediatric study to FDA. These reports are due within 60 days of the anniversary of the deferral grant date. Because the deferral was granted on July 28, 2022, the anniversary date falls on July 28 of each subsequent year, and the 60-day reporting window means that reports are due by September 26 of each year during the deferral period. This obligation begins in 2023 and continues until the pediatric study results are submitted and the PMR obligation is fulfilled.
Study Initiation Expectation. FDA's deferral letter also states that the Agency expects the pediatric study protocol to be submitted as an IND amendment within six (6) months of approval of the adult indication. While this expectation is not framed as a binding legal deadline in the same manner as the 18-month submission deadline, it represents a clear regulatory expectation that Penterra should treat seriously. Failure to submit a protocol within this window could prompt FDA inquiry and could be viewed as a signal of non-compliance.
C. Interaction with Postmarketing Requirements
Under Section 505B(d) of the FD&C Act, deferred pediatric studies are converted to formal postmarketing requirements upon approval of the adult indication. This conversion is automatic and occurs by operation of law; no additional action by Penterra or by FDA is required for the conversion to take effect.
Because the adult psoriasis indication has not yet been approved as of the date of this memorandum, the deferred pediatric study does not yet appear in FDA's PMR tracking system. The deferral is, however, documented in FDA's regulatory records and is associated with NDA No. 215-847. Upon approval of the sNDA, the deferred study will be automatically converted to a PMR, and FDA will assign a formal PMR number.
Once converted to a PMR, Penterra will be subject to FDA's PMR reporting requirements as set forth in 21 C.F.R. § 314.81(b)(2)(vii), which require the submission of annual status reports describing the progress of the required postmarketing study. These PMR annual status reports are separate from, and in addition to, the annual progress reports required under the deferral letter during the pre-approval period. In practice, the two reporting obligations will merge upon approval: the deferral annual reporting obligation will be subsumed into the PMR annual reporting framework, and Penterra will report on the status of the pediatric study through the PMR mechanism.
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 in the regulatory process.
First Annual Report Due Date. The first annual progress report is due by September 26, 2023, which is 60 days after the first anniversary of the July 28, 2022 deferral grant date. Penterra must submit this report on time regardless of any changes to the sNDA timeline, the status of the CLARION-3 confirmatory trial, or the status of the engagement with outside counsel.
Content of Annual Reports. The annual progress reports should describe the status of the deferred pediatric study, including any relevant developments, planning activities, and milestones. Even if no study activities have commenced — which is expected to be the case for the first report, given that the adult program is still ongoing — the report must be submitted and should provide substantive information regarding the overall program trajectory. Specifically, Penterra should include in each annual report:
• The current status of the adult clinical program, including results from CLARION-3 (when available), any changes to the adult sNDA submission timeline, and any redesigned study plans;
• The anticipated timeline for submission of the adult sNDA;
• The planned timeline for initiating pediatric study protocol development, including any pre-study activities such as site identification, formulation assessment, or engagement with clinical research organizations;
• A description of any barriers or challenges to initiating the pediatric study, including scientific, clinical, operational, or regulatory barriers; and
• Any relevant developments in the competitive landscape, FDA guidance, or clinical knowledge base that may affect the pediatric study design.
The annual reports need not be lengthy, but they should be substantive and responsive to FDA's information needs. A mere placeholder submission stating that no progress has been made is unlikely to satisfy FDA's expectations and could prompt Agency follow-up.
B. Written Request Expiration Risk
Under 21 U.S.C. § 355c(d)(4) and relevant FDA guidance, a Written Request may be deemed withdrawn if the applicant fails to respond within certain timeframes or fails to submit required progress reports. The withdrawal of a Written Request would have significant implications for Penterra, as it would eliminate the opportunity to obtain pediatric exclusivity — the six-month extension of existing market exclusivity and patent protections — upon completion of the pediatric study.
Penterra should monitor all FDA communications regarding the status of the Written Request, particularly during any period in which the sNDA effort is paused or dormant. Any communication from FDA suggesting that the Written Request may be at risk of withdrawal — whether through formal correspondence, email, or informal communication — should be immediately flagged to outside counsel for assessment and response.
The risk of Written Request withdrawal is heightened during periods of programmatic inactivity. FDA may interpret a prolonged absence of progress on the pediatric study — or a failure to submit timely annual reports — as an indication that the applicant is no longer pursuing the Written Request, which could trigger the withdrawal process. Continued engagement through annual reporting and responsive communication with FDA is therefore essential to preserving the Written Request and the associated pediatric exclusivity incentive.
C. IND Amendment for Pediatric Protocol
As noted above, FDA expects the pediatric study protocol to be submitted as an IND amendment within six months of approval of the adult indication. This expectation, while not a strict legal deadline enforceable through civil penalties, represents a meaningful regulatory commitment and should be treated as a planning target.
To meet this six-month window, Penterra will need to undertake a number of pre-study activities in advance of adult approval. These activities include, but are not limited to:
• Drafting and finalizing the pediatric study protocol, including the randomization scheme, dosing regimen (with weight-based adjustments), primary and secondary endpoint definitions, statistical analysis plan, and safety monitoring plan;
• Designing the population PK sub-study, including sampling strategy, bioanalytical method development, and population PK modeling approach;
• Conducting a pediatric formulation assessment to confirm that the existing 10 mg oral tablet is appropriate for adolescents ages 12 through 17 without modification, or to develop a weight-adjusted dosing approach if needed;
• Identifying and qualifying clinical trial sites with experience in adolescent dermatology research and access to the target patient population;
• Preparing and submitting Institutional Review Board ("IRB") and ethics committee applications for all participating sites; and
• Engaging a clinical research organization ("CRO"), if needed, to support study operations.
Penterra's VP, Quality & CMC, Janet Ling, should be consulted regarding any CMC considerations for age-appropriate formulation. It is our understanding that the existing 10 mg oral tablet may be suitable for adolescents ages 12 through 17 without modification, given the typical body weight range and swallowing ability in this age group. However, this assessment should be formally documented, and any weight-based dosing recommendations should be incorporated into the protocol.
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 confirmatory trial does not meet its primary endpoints and a redesigned confirmatory study is required before the sNDA can be submitted.
In any such scenario, it is important that Penterra understand and act upon the following principles:
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 Regulatory Affairs department must continue to prepare and submit these reports on schedule, even during any period in which the sNDA effort is paused or the outside counsel engagement is inactive. Failure to submit annual reports could jeopardize both the deferral and the Written Request.
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 progress of the overall program and to assess whether the applicant is making adequate progress toward fulfilling its obligations. If FDA perceives undue delay in the adult program — particularly if the delay extends over multiple years without a clear path forward — the Agency could initiate discussions about the status of the deferral and the Written Request.
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 compliance with its terms. However, a protracted delay in the adult program could complicate the commercial calculus underlying the pediatric exclusivity benefit. If adult approval is significantly delayed, the remaining patent terms at the time of pediatric exclusivity eligibility may be shorter, potentially reducing the commercial value of the six-month extension. Penterra's commercial and business development teams should monitor this dynamic and incorporate it into ongoing portfolio planning.
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. Priya Sundaram, Managing Director, and Dr. Neil Oxborough, Principal Consultant. CBG has been involved in the design and oversight of the CLARION clinical program and has deep familiarity with the velonatib clinical data package.
When the time comes for pediatric protocol development, CBG should be actively involved in the following areas: (i) dose selection for the adolescent population, informed by the population PK analysis from the adult program and any relevant pharmacometric modeling; (ii) design of the population PK sub-study required by the Written Request, including sampling strategy and bioanalytical considerations; (iii) clinical trial site feasibility assessment, including identification of sites with pediatric dermatology clinical trial capabilities and access to the target adolescent patient population; and (iv) overall study design refinement, including endpoint selection, statistical analysis plan, and safety monitoring strategy.
B. Whitfield & Grange LLP
Whitfield & Grange LLP ("W&G") serves as Penterra's patent prosecution and intellectual property strategy counsel. The engagement is led by Dr. Eleanor Cassidy and Brian Takata. W&G handles all patent prosecution and Orange Book listing strategy for velonatib and is familiar with the full velonatib patent portfolio.
W&G should be consulted regarding the pediatric exclusivity implications of the Written Request and the deferred pediatric study. Specifically, W&G should advise on: (i) the timing and process for requesting the six-month pediatric exclusivity extension upon successful completion of the pediatric study and submission of the study report to FDA; (ii) the interaction between pediatric exclusivity and the existing Orange Book-listed patents, including the compound patent (U.S. Patent No. 10,412,XXX, expiring February 2034) and the formulation patent (U.S. Patent No. 10,891,XXX, expiring August 2036); and (iii) the scope of any additional intellectual property protections that may be available in connection with the pediatric indication.
Additionally, we note that a provisional patent application was filed by W&G in August 2022 (U.S. Provisional Application No. 63/XXX,XXX) for a method-of-treatment patent relating to velonatib in chronic plaque psoriasis. Depending on how the claims in the eventual non-provisional application are drafted, this patent may also cover the use of velonatib in adolescent patients with plaque psoriasis. W&G should evaluate whether the claims should be drafted broadly enough to encompass the pediatric indication and to maximize the scope of patent protection that would benefit from the six-month pediatric exclusivity extension.
C. Thornfield Lewis LLP
Thornfield Lewis LLP serves as Penterra's independent auditor. The engagement is led by Richard Croydon, CPA, Engagement Partner. Although Thornfield Lewis is not involved in the regulatory strategy for velonatib, the firm should be apprised of the pediatric study obligation and the associated deferral, as these may affect Penterra's pipeline disclosure in SEC filings, including Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q.
The deferred pediatric study represents a contingent obligation that could have financial statement implications depending on cost estimates for the study and the probability of completion. Penterra's finance and accounting team should work with Thornfield Lewis to determine whether the pediatric study obligation requires disclosure as a contingent liability or a pipeline commitment, and to ensure that Penterra's public filings accurately reflect the status of the pediatric study obligation and the associated commercial opportunities (including pediatric exclusivity).
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 the status of the sNDA effort or the engagement with outside counsel, and should include escalation procedures in the event that the responsible personnel change or the organizational structure is modified. We recommend that an internal reminder be set for no later than August 1 of each year to allow adequate time for preparation, internal review, and submission.
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 aggressive than required, and accurately reflects the status of the program. Even during any period of engagement dormancy, Penterra should contact Calderwood & Harkness to arrange for review of the annual report at least 30 days before the submission deadline.
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 pediatric exclusivity and would represent a significant adverse event for Penterra's velonatib franchise. Penterra's Regulatory Affairs team should designate a specific individual to serve as the point of contact for all Written Request-related communications and to maintain a complete file of all FDA correspondence on this matter.
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 the CLARION program, including any new safety signals, labeling changes, or risk management requirements that may have arisen;
• The competitive landscape, including any pediatric labeling approvals obtained by competitor products in the psoriasis space (e.g., biologics or other JAK inhibitors that may have obtained pediatric indications during the intervening period);
• Any changes in FDA's Division of Dermatology and Dentistry review practices, staffing, or regulatory standards that could affect the pediatric study review; and
• Any developments in the broader regulatory environment, including changes to PREA, FDARA, or the pediatric exclusivity statute that could affect Penterra's rights or obligations.
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 drafting and finalization, IRB submissions, CRO selection, population PK modeling, and formulation assessment — sufficiently in advance of the anticipated adult approval date. We recommend that Penterra begin protocol development no later than six months before the anticipated date of adult sNDA submission. This will provide adequate lead time for protocol development and regulatory review, so that the pediatric IND amendment can be submitted to FDA within the six-month window expected by the Agency after adult approval.
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 and market exclusivity, taking into account projected sales volumes, pricing, generic competition timelines, and biosimilar entry risks. The results of this analysis should inform Penterra's cost-benefit assessment of the pediatric study investment and should be factored into management-level decisions regarding the prioritization of the pediatric study within Penterra's broader clinical development portfolio.
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 submit annual progress reports to FDA by September 26 of each year.
These annual reporting requirements are ongoing and must be met regardless of the status of the adult sNDA, the status of the CLARION-3 confirmatory trial, or the status of the engagement with outside counsel. Failure to submit timely annual reports could jeopardize both the deferral and the Written Request, and could result in the loss of the pediatric exclusivity incentive.
The pediatric exclusivity incentive — six months of additional market exclusivity and patent protection across the entire velonatib franchise — provides meaningful commercial upside and should be a significant factor in Penterra's strategic planning for the pediatric study. Given velonatib's current annual U.S. net sales of approximately $1.47 billion, the value of this incentive is substantial and warrants proactive planning and investment.
Calderwood & Harkness remains available to assist with all aspects of the pediatric study obligation as it matures, including review of annual progress reports, drafting and review of FDA correspondence, coordination with CBG on pediatric protocol development, and strategic advice on the timing and execution of the pediatric study program upon reactivation of the sNDA effort. We look forward to continuing our work with Penterra on this important regulatory matter.
This memorandum is privileged and confidential. It constitutes an attorney-client communication and attorney work product, and is prepared in connection with the provision of legal advice to Penterra Pharmaceuticals Corp. The contents of this memorandum should not be disclosed to any third party without prior consultation with Calderwood & Harkness LLP. Disclosure to third parties may result in waiver of applicable privileges.
Please do not hesitate to contact us with any questions.
Sean Morrissey, Associate Calderwood & Harkness LLP 1120 Avenue of the Americas, 32nd Floor New York, NY 10036 Tel: (212) 555-4812
Email: s.morrissey@calderwoodharkness.com
Christopher Aiken, Associate Calderwood & Harkness LLP 1120 Avenue of the Americas, 32nd Floor New York, NY 10036 Tel: (212) 555-4837
Email: c.aiken@calderwoodharkness.com
TO: | Dr. Karen Hessler, SVP, Regulatory Affairs, Penterra Pharmaceuticals Corp.
CC: | Lisa Moritani, Esq., General Counsel & Corporate Secretary, Penterra Pharmaceuticals Corp.
FROM: | Sean Morrissey, Associate, Calderwood & Harkness LLP; Christopher Aiken, Associate, Calderwood & Harkness LLP
DATE: | September 8, 2022
RE: | Pediatric Study Requirements and Deferral — Velonatib (NDA No. 215-847) sNDA for Chronic Plaque Psoriasis
Matter No.: | 1018-00005