Overview

Stemline Therapeutics (STML) was incorporated under the laws of the State of Delaware in August 2003. Stemline Therapeutics is a clinical stage biopharmaceutical company focused on discovering, acquiring, developing and potentially commercializing innovative oncology therapeutics that target difficult to treat cancers. The company's clinical pipeline includes: SL-401, SL-801, and SL-701.¹

SL-401 pivotal data; plans for registration and potential commercialization: SL-401 has completed a pivotal trial in patients with blastic plasmacytoid dendritic cell neoplasm, or BPDCN, and has successfully met the primary endpoint of the trial. SL-401 is a targeted therapy directed to the interleukin-3 receptor-a, or CD123. SL-401 was granted breakthrough therapy designation, or BTD, by the U.S. Food and Drug Administration, or FDA, for the treatment of patients with BPDCN. Based on the trial results and other data, the company expect to complete submission of a rolling Biologics License Application, or BLA, with the FDA in the first half of 2018. If successful, SL-401 would be the first drug ever approved for this indication, and pre-launch activities are underway in preparation for this potential outcome.

SL-401 additional clinical activities: SL-401 is also being assessed in additional indications, including in Phase 1/2 clinical trials of chronic myelomonocytic leukemia, or CMML, myelofibrosis, or MF, acute myeloid leukemia, or AML, and multiple myeloma. Preliminary data from some of these programs were presented at the 2017 American Society of Hematology, or ASH, Annual Meeting and Exposition, and further updates are expected this year.

Additional clinical-stage candidates: SL-801 is a novel, oral, small molecule, reversible inhibitor of Exportin-1, or XPO1, a nuclear transport protein involved in a variety of cancers. SL-801 is being assessed in a Phase 1 dose escalation trial of patients with advanced solid tumors. Preliminary data were presented at the European Society of Medical Oncology, or ESMO, Annual Congress 2017, and further updates are expected this year as dose escalation continues. SL-701, an immunotherapeutic, has completed a Phase 2 trial of patients with relapsed/refractory glioblastoma, or GBM. Data were presented at the 2017 Society for Neuro-Oncology, or SNO, meeting, and further updates are expected this year.

Management

Stemline Therapeutics is led by a team with extensive experience in the biopharmaceutical industry including:

• Ivan Bergstein, M.D. — Chairman, Chief Executive Officer and President. Dr. Bergstein is Chief Executive Officer and Founder of Stemline Therapeutics. Dr. Bergstein has managed the company’s evolution from early-stage research and development to current late clinical stage. Prior to founding Stemline, Dr. Bergstein was Medical Director of Access Oncology, Inc., a clinical stage oncology-focused biotechnology company where he was a key member of a small team responsible for the acquisition and development of the company’s clinical stage assets and ultimately the sale of the company to Keryx Biopharmaceuticals, Inc. (Nasdaq: KERX). Previously, he was a senior biopharmaceuticals analyst at a Wall Street-based firm that advised funds on investment opportunities in public companies with late clinical stage assets. He received a BA in mathematics from the University of Pennsylvania and was elected to the Pi Mu Epsilon National Mathematics Honor Society, and then received an MD from the Mount Sinai School of Medicine where he was elected to the Alpha Omega Alpha Honor Medical Society, received the Merck Award for Clinical Excellence, and subsequently completed an internship in general surgery. He then became the Jerome A. Urban Post-Doctoral Research Fellow at the Cornell University Medical College where he studied and published work relating to Wnt genes in human breast cancer. He then completed an internal medicine residency and hematology-oncology fellowship at the New York Presbyterian Hospital — Weill Medical College of Cornell University where he studied and published work on gene therapy manipulations of the sonic hedgehog pathway.
• Kenneth Hoberman — Chief Operating Officer. Mr. Hoberman has extensive financial, accounting, investor relations, corporate governance and business development experience including M&A, strategic alliances and partnerships both domestic and international. His operational expertise includes regulatory oversight, human resources, manufacturing and clinical development. He was previously Vice President of Corporate and Business Development of Keryx Biopharmaceuticals, Inc. (Nasdaq: KERX), where he was instrumental in the success of the company. He also helped secure multiple sources of capital including over $200 million in equity investments through public and private offerings. He also initiated and executed a $100 million strategic alliance and originated, negotiated and closed dozens of licensing and operational contracts, helping to grow the company’s market capitalization to over $1 billion. He also led the team that originated, in-licensed, and developed Auryxia™ which was approved by the FDA in September 2014. He is on the Board of Directors of TG Therapeutics, Inc. (Nasdaq: TGTX). He received a B.S.B.A. in Finance from Boston University and completed post-baccalaureate studies at Columbia University.
• David Gionco — Vice President of Finance and Chief Accounting Officer. Mr. Gionco was previously Vice President, Chief Financial Officer and Chief Accounting Officer of Savient Pharmaceuticals, Inc. where he oversaw the finance function for the organization and was instrumental in helping to grow the company, raising over $350 million. Prior to this, Mr. Gionco held audit, corporate accounting, financial planning, finance and controller roles at companies including Merck & Co., Inc. (“Merck”) and, previously, Medco Health Solutions, Inc., which was acquired by Merck during his tenure. At Merck, Mr. Gionco held various financial and accounting positions of increasing responsibility. Mr. Gionco also held senior financial positions at Progenics Pharmaceuticals, Inc. (Nasdaq: PGNX) and Odyssey Pharmaceuticals, Inc. (a subsidiary of Pliva, Inc., now Teva Pharmaceutical Industries Ltd. (NYSE: TEVA)). Mr. Gionco previously had 7 years of financial auditing experience with a major public accounting firm. Mr. Gionco holds a B.S. in Accounting from Fairleigh Dickinson University and an MBA in Finance from Rutgers University. Mr. Gionco is a Certified Public Accountant in the State of New York.

Strategy

The company's goal is to build a leading biopharmaceutical company focused on improving the lives of patients by developing and commercializing innovative therapeutics for difficult to treat cancers. The fundamental components of its business strategy to achieve this goal include the following:

• Develop and potentially commercialize SL-401. SL-401 has been granted breakthrough therapy designation, or BTD, by the FDA for the treatment of blastic plasmacytoid dendritic cell neoplasm, or BPDCN. Stemline Therapeutics has completed a pivotal Phase 2 trial of SL-401 in patients with BPDCN and the trial has met its primary endpoint. The company plan to complete submission of a biologics license application, or BLA, in the first half of 2018. In anticipation of success, which the company cannot guarantee, Stemline Therapeutics is currently building out a commercial infrastructure to market and sell SL-401, if it attains marketing approval.
• Develop SL-401 in additional indications. Stemline Therapeutics is also assessing SL-401 in additional indications including in Phase 1/2 trial of patients with chronic myelomonocytic leukemia, or CMML, and myelofibrosis, or MF. SL-401 is also being assessed in Phase 1/2 trials of other indications including acute myeloid leukemia, or AML, and multiple myeloma, as a single agent and in combination with other therapies.
• Develop SL-801 in multiple cancer types. Stemline Therapeutics is advancing SL-801 through a Phase 1 trial in adult patients with advanced solid tumors. Patients are currently enrolling in this dose escalation study and receiving SL-801 as a single agent.
• Develop SL-701 in brain cancer. Stemline Therapeutics has completed a Phase 2 trial of SL-701 in adult patients with second-line glioblastoma multiforme, or GBM. Patients received SL-701 alone or in combination with bevacizumab, with immunostimulants. Data are being analyzed and the company expect to provide updates for the program later this year.

SL-401

Overview

SL-401 is a novel targeted therapy directed to the interleukin-3 receptor-a, or CD123, a target present on a wide range of malignancies. SL-401 was granted breakthrough therapy designation, or BTD, by the U.S. Food and Drug Administration, or FDA, for the treatment of patients with blastic plasmacytoid dendritic cell neoplasm, or BPDCN. SL-401 has completed a pivotal Phase 2 trial in patients with BPDCN and has met the primary endpoint of the trial. Based on these and other data, the company expect to complete submission of a rolling Biologics License Application, or BLA, with the FDA in the first half of 2018. If successful, SL-401 would be the first drug ever approved for this indication. Pre-launch activities are underway in preparation for this potential outcome.

In parallel, Stemline Therapeutics is also conducting additional development activities. SL-401 is being assessed in Phase 1/2 clinical trials of other indications including chronic myelomonocytic leukemia, or CMML, and myelofibrosis, or MF, acute myeloid leukemia, or AML, and multiple myeloma. Preliminary data from some of these programs were presented at the 2017 American Society of Hematology, or ASH, Annual Meeting and Exposition, and further updates are expected this year. Factors that may impact next steps for SL-401 in these additional indications include enrollment trends, adverse events, safety and efficacy results, regulatory paths, commercial landscape, and other medical, business, and practical considerations.

SL-401 design and mechanism of action

SL-401 is a novel targeted therapy directed to the IL-3R (CD123). SL-401 is comprised of human IL-3 recombinantly fused to a truncated diphtheria toxin, or DT, payload engineered such that IL-3 replaces the native DT receptor-binding domain. In this way, the IL-3 domain of SL-401 directs the cytotoxic DT payload to cells expressing CD123. Upon internalization, SL-401 irreversibly inhibits protein synthesis and induces apoptosis of the target cell. Given this novel mechanism of action, there is a potential to develop SL-401 as a single agent and in combination with other therapies.

CD123 is normally expressed on certain maturing hematopoietic cells, including maturing myeloid cells, B cells, plasmacytoid dendritic cells, or pDCs, mast cells, basophils and eosinophils, and appears to be involved in cell maturation, differentiation, and survival. CD123 does not appear to be expressed to a significant degree on normal hematopoietic stem cells.

CD123 is expressed on multiple malignancies including BPDCN, AML, certain myeloproliferative neoplasms, or MPNs, myelodysplastic syndrome, or MDS, chronic myeloid leukemia, or CML, B-cell acute lymphoid leukemia, or B-ALL, hairy cell leukemia, Hodgkin’s and certain non-Hodgkin’s lymphomas. In addition to expression on tumor bulk, CD123 expression has been reported on the cancer stem cells, or CSCs, of certain hematologic cancers including AML, CML, MDS, and potentially T-cell ALL. In addition, elevated CD123 expression has been correlated with poor prognosis in certain hematologic cancers (Vergez in Haematologica, 2011, Testa in Biomarker Research, 2014).

Notably, CD123+ pDCs, which are the cell of origin for BPDCN, have also been reported in the microenvironment of certain tumors including multiple myeloma, CMML and other MPNs, and some solid tumors where they could play a tumor-promoting role (and preclinically, have been shown to be tumor-promoting in myeloma). CD123+ pDCs have also been implicated in the pathogenesis of certain autoimmune diseases, including scleroderma and cutaneous lupus, and is a potential therapeutic target for these conditions.

SL-401 preclinical activity

SL-401 has demonstrated preclinical in vitro and in vivo activity against a wide range of hematologic cancer types. In AML, SL-401 is highly active against both leukemia blasts (i.e., tumor bulk) and CSCs of a variety of human leukemia cell lines and primary leukemia cells from patients. In particular, SL-401 demonstrated potent cytotoxicity against leukemic cells in vitro in a dose-dependent fashion with concentrations that inhibit the growth of fifty percent (50%) of cells, or an IC50, in the low picomolar range. Notably, normal bone marrow stem cells were relatively insensitive to SL-401. SL-401 also exhibited anti-CSC activity. In particular, SL-401 inhibited AML colony formation, an assay for stem cell activity, compared with normal human bone marrow. As further validation of an anti-CSC effect, SL-401 reduced the incorporation and growth (i.e., tumorigenicity) of AML cells, relative to normal human bone marrow, when treated ex vivo and reimplanted into immunodeficient mice indicating activity at the level of the CSC. In addition, SL-401 prolonged the survival of mice implanted with human leukemia xenografts compared with untreated mice.

In addition, SL-401 demonstrated high potency against BPDCN cells from patients, with an IC50 in the femtomolar (10-15 molar) range. SL-401 has also demonstrated preclinical activity against additional CD123+ malignancies including chronic eosinophilic leukemia, where it produced IC50 values in the low single-digit picomolar (10-12 molar) range. SL-401 has also shown potent in vitro anti-leukemia activity against CML tumor bulk and CML CSCs, and increased survival in mouse models of human CML taken from patients who were resistant to tyrosine kinase inhibitors, or TKIs. SL-401 has also been shown to possess a synergistic anti-CML effect when used in combination with certain TKIs. SL-401 has also demonstrated in vitro anti-tumor activity against several lymphoid cancer types, including lymphoid leukemia (e.g., T cell acute lymphoid leukemia, or T-ALL), Hodgkin’s and non-Hodgkin’s lymphoma, and multiple myeloma, or MM. SL-401 appears to have both a direct as well as an indirect anti-MM effect, the latter seemingly caused by SL-401’s ability to target IL-3R+ hyperproliferative plasmacytoid dendritic cells, or pDC, (the cell of origin of BPDCN) that may provide a novel immune-associated growth stimulus to their neighboring MM cells. This is notable for several reasons including the drug’s novel mechanism of anti-MM action as well as linking MM and BPDCN via a common cell type (pDC), and the CD123 target. SL-401 has also been shown to have a synergistic effect against MM in preclinical systems when combined with existing therapies including pomalidomide (Pomalyst®), lenalidomide (Revlimid®) and bortezomib (Velcade®). Neighboring pDCs have been reported in the microenvironment of additional tumor types including chronic myelomonocytic leukemia, or CMML.

Phase 1/2 clinical trial of SL-401 in BPDCN

SL-401 was initially evaluated in an investigator sponsored Phase 1/2 clinical trial in patients with advanced hematologic cancers; a trial which has since completed. In this trial, SL-401 administered intravenously over a single, five-day cycle demonstrated anti-tumor activity, including complete responses, or CRs, largely in BPDCN, but also in relapsed/refractory, or r/r, AML with common adverse reactions being transaminitis, thrombocytopenia, fever and chills, and capillary leak syndrome (Frankel et al. Blood 124, 2014; ASH 2013 Poster #2682; ASCO 2013 Poster #7029; ASH 2015 Poster #3795). The company then conducted a corporate-sponsored pivotal trial of SL-401 in BPDCN.

Pivotal Phase 2 clinical trial of SL-401 in BPDCN

On October 31, 2017, the company announced that the pivotal Phase 2 trial of SL-401 in BPDCN met its primary endpoint.

The pivotal Phase 2 trial of SL-401 in BPDCN was a multicenter, open label, non-randomized, single arm clinical trial. The company believe this trial is the largest multicenter prospective study ever conducted in BPDCN. The trial enrolled 45 BPDCN (32 first-line, 13 relapsed/refractory) patients at 7 sites in the U.S. Patients received SL-401 dosed intravenously on days 1-5 of a 21-day cycle for multiple consecutive cycles. The trial consisted of 3 Stages: Stage 1 (lead-in, dose escalation), Stage 2 (expansion), and Stage 3 (pivotal, confirmatory). To ensure ongoing patient access to SL-401, Stemline Therapeutics is currently enrolling both first-line and relapsed/refractory BPDCN patients in an additional cohort, Stage 4.

In December 2017, the company presented detailed data from the pivotal trial at the 2017 American Society of Hematology, or ASH, Annual Meeting and Exposition, in Atlanta, GA. Based on results from Stage 1, which included patients with BPDCN or acute myeloid leukemia, SL-401 dosed at 12 mcg/kg/day was selected for use in subsequent Stages for BPDCN. The most common treatment-related adverse events, or TRAEs, with SL-401 at 12 mcg/kg/day in BPDCN (Stages 1, 2, and 3) (n=42) were alanine aminotransferase increase (52%), aspartate aminotransferase increase (50%), hypoalbuminemia (50%), and thrombocytopenia (38%). TRAEs included capillary leak syndrome, or CLS, (19%), which was grade 5 in 2.4% (1/42) of BPDCN patients at 12 mcg/kg/day, 2.0% (3/153) of all patients across all trial indications at all doses, and 0.8% (1/119) of patients across all trial indications at 12 mcg/kg/day. After the ASH presentation, and as reflected here, the company obtained additional information that led to one fewer grade 5 CLS event than previously reported at ASH. In first-line BPDCN patients who received SL-401 at 12 mcg/kg/day, the overall response rate, or ORR, was 90% (26/29) with a 72% (21/29) rate of CR + CRc + CRi (CR = complete response; CRc = clinical complete response: absence of gross disease with minimal residual skin abnormality; CRi = CR with incomplete hematologic recovery) by investigator assessment. 45% (13/29) of these patients were bridged to stem cell transplant, or SCT, following remission on SL-401. In relapsed/refractory BPDCN patients (all of whom received SL-401 at 12 mcg/kg/day in Stages 1 and 2; n=13), there was a 69% (9/13) ORR and a 38% (5/13) CR + CRc + CRi rate.

Stage 3 of the Phase 2 trial was designed to provide the pivotal, confirmatory evidence of efficacy of SL-401 in BPDCN. In Stage 3, 13 first-line BPDCN patients were enrolled and received SL-401 at 12 mcg/kg/day. Stage 3 met its primary endpoint, with a CR + CRc rate of 54% (7/13) (95% Confidence Interval: 25.1, 80.8) by investigator assessment. The lower bound of the 95% confidence interval of the primary endpoint exceeded the pre-specified 10% rate. ORR was 77% (10/13). 46% (6/13) of patients were bridged to SCT following remission on SL-401. 86% (6/7) of complete responders were relapse-free at 5+ to 8+ months, ongoing as of the presentation.

Regulatory, biologics license application (BLA), and potential commercialization of SL-401 in BPDCN

SL-401 was granted breakthrough therapy designation, or BTD, by the FDA in August 2016. SL-401 was also awarded Orphan Drug status by the FDA for the treatment of AML in February 2011 and for BPDCN in June 2013. The European Medicines Agency, or EMA, awarded Orphan Drug status to SL-401 for the treatment of AML in September 2015 and for BPDCN in November 2015.

The company believe that the results of this pivotal trial of SL-401 in BPDCN could support marketing approval, and the company plan to include such results as part of a Biologics License Application, or BLA, that seeks U.S. marketing approval. Stemline Therapeutics is pursuing a rolling BLA submission and believe that such a submission could be completed in the first half of 2018. If successful, the company project marketing approval could be attained in the second half of 2018, or soon thereafter. Later this year, the company anticipate feedback from the European Medicines Agency, or EMA, regarding a potential regulatory filing.

Stemline’s commercial group continues to build out its infrastructure and optimize launch readiness within the BPDCN market. The organization is focused on preparing the market, the product, and the organization for the successful launch of SL-401 should it be approved. In December 2017, the company launched its BPDCN disease awareness campaign at the American Society of Hematology, or ASH, Annual Meeting. One of the campaign’s primary goals is to try to ensure that multidisciplinary healthcare professionals, including hematologist-oncologists, dermatologists, pathologists, and allied healthcare professionals are appropriately testing for CD123 to bring the diagnosis of BPDCN to the forefront and to limit misdiagnoses and underdiagnoses. The campaign highlights the importance of CD123 as a key diagnostic marker for correct patient diagnosis. Access to SL-401, should it be approved, remains a top priority within its managed care group with key success criteria identified as removing hurdles to product access and reimbursement. Stemline Therapeutics is setting up a formal patient assistance program and 501(c)(3) foundation support for those that require assistance. Marketing, sales and medical affairs efforts are focused on scaling up to a “right size” staffing model with continued refinement to launch strategies and tactics for launch effectiveness.

SL-401 Clinical Trials in Additional Indications

Chronic myelomonocytic leukemia, or CMML, and Myelofibrosis, or MF

SL-401 is being assessed in a Phase 1/2 clinical trial in advanced myeloproliferative neoplasms, or MPN, focused on chronic myelomonocytic leukemia, or CMML, and myelofibrosis, or MF. This trial consists of a lead-in, dose escalation stage, 3x3 design (Stage 1) in which patients receive SL-401 as a daily intravenous infusion at 7, 9, or 12 mcg/kg/day for days 1-3 of a 21-day cycle. Stage 1 was followed by an expansion stage (Stage 2) enrolling MPN patients at the dose (12 mcg/kg/day) determined by Stage 1.

As reported at the 2017 ASH annual meeting in December 2017, 24 patients with advanced MPN (11 relapsed/refractory CMML; 12 relapsed/refractory MF) received SL-401 in Stages 1 and 2. In Stage 1, 12 mcg/kg/day was the highest tested dose for MPN, and a maximum tolerated dose, or MTD, was not reached. Stage 1 (n=9 patients) completed enrollment, and Stage 2 (n=15 patients) is ongoing. Median age was 69 years (range: 43-81); 54% were male. 71% (17/24) of patients had splenomegaly by physical examination. In Stage 1, no dose limiting toxicities, or DLT, were identified and a MTD was not reached. In Stages 1 and 2, the most common treatment-related adverse events, or TRAEs, included hypoalbuminemia (33%), thrombocytopenia (33%), and fatigue (29%). Most common TRAEs (grade 3 or higher), include thrombocytopenia (24%) and anemia (19%). Capillary leak was reported in 24% (5/21) evaluable patients: 4 cases were grades 1-2 and 1 case was grade 3.

In relapsed/refractory CMML, 71% (5/7) of patients with baseline splenomegaly had a >50% reduction in spleen size by physical examination. One relapsed/refractory CMML patient had a CR (14+ months on treatment) comprised of a bone marrow CR, or BMCR, and a 100% spleen reduction (5 to 0 cm, or not palpable).

In relapsed/refractory MF, 50% (5/10) of patients with baseline splenomegaly had spleen reductions of >25% (range: 29-100%) by physical exam, including 3 patients (30%) with spleen reductions >35%. Notably, 2 out of 3 patients had baseline thrombocytopenia: 1 patient with platelets <100K/microliter and 1 patient with platelets <50K/microliter.

The company continue patient enrollment and follow-up in the trial. Based on the results to date, the company believe SL-401’s favorable tolerability and preliminary signs of activity support continued development and evaluation of possible registration-directed trial designs. Updates relating to this trial are expected later this year, including decisions regarding next steps for SL-401 in one or more of these indications. Factors that may impact next steps include enrollment trends, overall safety and efficacy results, regulatory paths, commercial landscape, and other medical, business, and practical considerations.

AML in complete remission with minimal residual disease, or MRD

SL-401 is being assessed in a Phase 1/2 clinical trial in AML in complete remission with minimal residual disease, or MRD. This trial consists of a lead-in, dose escalation stage, 3x3 design (Stage 1) in which patients received SL-401 as a daily intravenous infusion at 7, 9, or 12 mcg/kg/day for days 1-5 of a 21 or 28-day cycle. Stage 1 was followed by an expansion stage (Stage 2) enrolling AML patients in complete remission with MRD at the dose (12 mcg/kg/day) determined in Stage 1.

As reported at the 2017 ASH annual meeting in December 2017, 16 AML patients in complete remission with high risk of relapse including MRD received SL-401 in Stages 1 and 2, including 14 patients in first CR and two patients in second CR. In Stage 1, 12 mcg/kg/day was the highest tested dose for this trial; a maximum tolerated dose, or MTD, was not reached. Stage 1 (n=9 patients) has completed enrollment and enrollment in Stage 2 with SL-401 at 12 mcg/kg/day is ongoing. No DLTs or MTD were identified in Stage 1. The most common TRAEs in Stages 1 and 2 include hypoalbuminemia (44%), ALT increase (38%), AST increase (38%), and thrombocytopenia (38%). The most common TRAEs, grade 3 or higher, included ALT increase (31%), AST increase (25%), and thrombocytopenia (19%). Five patients were relapse-free for over 5 months (range 5+ to 14+), including 1 patient who went to stem cell transplant, or SCT, after 3+ months on SL-401, 2 patients (8+ and 14+ months on SL-401) following allogeneic SCT.

The company continue patient enrollment and follow-up in the trial, including for MRD alterations and response duration. Given preclinical data indicating potential synergies between SL-401 and azacitidine in AML and high-risk MDS, and the ongoing clinical trial assessing the combination of SL-401 and azacitidine in AML, Stemline Therapeutics is also considering a transition to combination therapy in this indication. Further updates are expected later this year. Factors that may impact next steps include enrollment trends, overall safety and efficacy results, regulatory paths, commercial landscape, and other medical, business, and practical considerations.

Multiple myeloma

SL-401, in combination with pomalidomide and dexamethasone, is being assessed in a Phase 1/2 clinical trial in relapsed/refractory multiple myeloma. In previous studies, plasmacytoid dendritic cells, or pDCs, the cells which when malignant become BPDCN, were found to be present in the bone marrow microenvironment of patients with multiple myeloma (Chauhan in Cancer Cell, 2009). These CD123+ pDCs were also found to possess growth-promoting interactions with their neighboring myeloma cells, as well as additional interactions with immune effector T cells and natural killer, or NK, cells in the myeloma bone marrow milieu (Ray in Leukemia, 2015). In preclinical studies, SL-401 has been shown to possess an anti-myeloma effect both directly against myeloma cells as well as indirectly via inhibition of surrounding pDCs, a potentially novel immune-associated mechanism (Chauhan in Journal of Clinical Oncology, 2013; Chauhan in Journal of Clinical Oncology, 2014; Chauhan et al. Blood 2015). SL-401 has also demonstrated synergy with several standard anti-myeloma agents, including pomalidomide, in preclinical studies of myeloma (Ray in Blood, 2014). This trial has a lead-in dose escalation stage (Stage 1) and an expansion stage (Stage 2) designed to enroll patients at the dose and regimen determined by Stage 1. The main objectives of the clinical study are to determine safety, potential signals of anti-pDC activity, and potential signals of clinical activity with SL-401 in combination with other agents. The trial is currently open to enroll patients in Stage 1, and the company plan to consider the information from this trial, moving forward, to inform key elements of a combination regimen to align administration schedules with available agents. The company believe that this potential anti-pDC mechanism may have ramifications not only relating to myeloma but also other indications including certain MPNs as well as some solid tumors and autoimmune diseases.

Updates relating to this trial are expected later this year, including decisions regarding next steps for SL-401 in this indication. Factors that may impact next steps include enrollment trends, overall safety and efficacy results, regulatory paths, commercial landscape, and other medical, business, and practical considerations.

Potential SL-401 Indications

Blastic plasmacytoid dendritic cell neoplasm (BPDCN)

BPDCN is an aggressive hematologic cancer that carries a poor prognosis. BPDCN had been previously classified as blastic NK cell lymphoma, agranular CD4+/CD56+ hematodermic neoplasm, and plasmacytoid dendritic cell cancer. In 2008, this disease was renamed BPDCN by the World Health Organization, or WHO, due to its derivation from plasmacytoid dendritic cells, which are specialized immune cells. BPDCN is a rare malignancy most commonly affects middle-aged and older patients and is approximately three times more common in men than women. This malignancy typically presents with skin lesions, as well as bone marrow involvement. BPDCN growth in the bone marrow results in decreased blood cell counts, which can lead to serious infections, fatigue, bleeding, and death. Although BPDCN responses have been reported with various combination chemotherapy regimens, overall prognosis remains poor. There are currently no approved therapies for BPDCN, and an optimal therapeutic regimen for BPDCN has not yet been established.

Acute myeloid leukemia (AML)

AML is a hematologic cancer characterized by dysregulated maturation of myeloid cells and failure of the bone marrow to properly function. AML is the most common type of acute leukemia in adults. Approximately 21,350 new AML cases occur annually in the United States, and approximately 27,500 new cases occur annually in Europe. The average age of an AML patient is 67 years. The one-year survival rate for AML after first relapse is approximately 20%. Current first-line treatments for AML include chemotherapy drugs such as cytarabine in combination with an anthracycline such as daunorubicin. In certain circumstances, allogeneic stem cell transplantation is also used. In second-line AML, typical therapies include additional chemotherapy, often cytarabine again at various dosages and regimens. Despite a moderate to high proportion of patients obtaining a CR with first- and second-line chemotherapy, many of these responding patients still unfortunately have a high relapse rate and poor OS and thus are in need for additional measures for longer term benefit.

Myeloproliferative Neoplasms (MPN)

A number of other rare hematologic diseases, each qualifying as an unmet medical need, express IL-3R including certain myeloproliferative syndromes, or MPNs, such as mastocytosis, clonal eosinophilic disorders, myelofibrosis, and chronic myelomonocytic leukemia. For a majority of patients with these conditions, there is no effective, disease modifying therapy.

Chronic myelomonocytic leukemia. CMML is characterized by increased numbers of monocytes and immature blood cells (blasts) in the peripheral blood and bone marrow, as well as abnormal appearing cells (dysplasia) in at least one type of blood cell. CMML features characteristics of both MDS as well as a myeloproliferative disorder, or MPD. In the United States, the incidence of CMML is approximately 1,500 individuals per year. The median age at diagnosis of 65 to 70 years. One of the most common symptoms of CMML is splenomegaly, found in approximately half of cases. Other less frequent symptoms consist of anemia, fever, weight loss, night sweats, infection, bleeding, synovitis, lymphadenopathy, skin rashes, pleural effusion, pericardial effusion and peritoneal effusion. CMML can transform into AML in about 15%-20% of cases. Most cases are dealt with as supportive rather than curative because most therapies do not effectively increase survival. Supportive measures include blood transfusions and growth factors such as erythropoietic and granulocyte-stimulating factor. Reasons for more definitive treatment include the presence of fevers, chills, weight loss, symptomatic organ involvement, increasing blood counts, leukostasis, blood clotting, and/or progressive decreasing blood cell counts. The demethylating agents azacitidine (Vidaza®) and decitabine (Dacogen®) are FDA approved to treat CMML. High dose chemotherapy followed by bone marrow transplantation is also employed to treat CMML, and may provide long term benefit.

Myelofibrosis. Primary myelofibrosis, or PMF, is characterized by the proliferation of an abnormal clone of hematopoietic progenitor cells in the bone marrow and other sites, which results in fibrosis, or the replacement of the bone marrow with collagenous connective tissue fibers that, in turn, causes decreased blood cell counts. In the United States, the incidence of PMF is approximately 3,500 individuals per year. Median age at diagnosis is 66 years. About 30% of affected patients are less than 60 years of age. Manifestations include decreased blood cell counts, splenomegaly that is commonly painful, and increased immature white blood cells and basophils in the peripheral blood. The one known treatment of potential long-term benefit is high-dose chemotherapy followed by allogeneic stem cell transplantation. Other treatment options are largely supportive, and do not alter the course of the disorder. These options may include administration of folic acid, allopurinol, and/or blood cell transfusions. Corticosteroids, alpha-interferon and/or hydroxyurea are also used. Splenectomy is sometimes considered as a treatment option for patients with PMF in whom massive splenomegaly is contributing to anemia because of hypersplenism, particularly if there is a heavy requirement for blood transfusions. Ruxolitinib (Jakafi®) has received regulatory approval in the United States and elsewhere for the treatment for PMFs, and has been associated with symptomatic improvement and increased overall survival, but its overall benefits can be short lived. Lenalidomide (Revlimid®) and thalidomide (Thalomid®) may also be used in its treatment, although peripheral neuropathy can develop with long term use.

Multiple myeloma (MM)

MM is a hematologic malignancy that is characterized by the dysfunction of plasma cells, which are white blood cells that produce antibodies. During MM, malignant plasma cells overproduce abnormal monoclonal antibodies and can interfere with normal blood cell function in the bone marrow leading to immunodeficiency. Other common clinical manifestations of advanced MM include osteolytic bone lesions and renal disease. The bone marrow, or BM, microenvironment confers growth, survival, and drug resistance of MM cells, and it has recently been shown that plasmacytoid dendritic cells, or pDCs, which express high levels of IL-3R, are significantly increased in the BM of patients with MM and promote MM proliferation. Approximately 30,000 new cases of MM are reported annually in the United States (National Institute of Health, National Cancer Institute, 2016) and approximately 33,000 new MM cases are reported annually in Europe. The median age at diagnosis is 69 years. Patients who are transplant eligible have five-year survival rates of over 70%, while for elderly transplant-ineligible patients the rate is approximately 50%. Despite FDA approved therapies for MM, including thalidomide (Thalomid®), lenalidomide (Revlimid®), bortezomib (Velcade®), dexamethasone (Decadron®), carfilzomib (Krypolis®), pomalidomide (Pomalyst®), daratumaumab (Darzalex®), ixazomib (Ninlaro®), elotuzumab (Empliciti®), and panobinostat (Farydak®), many patients relapse from the disease.

Hairy cell leukemia (HCL)

HCL is an uncommon hematological malignancy characterized by a clonal accumulation of abnormal B lymphocytes. Approximately 1,500 new cases of HCL occur annually in the United States. The median age at diagnosis is approximately 52 years with male predominance. Although there are FDA approved therapies for HCL, including cladribine, pentostatin, and interferon-alpha, there is no permanent cure for the disease and the relapsed/refractory setting represents an area of unmet medical need.

Myelodysplastic syndrome (MDS)

MDS is a group of hematologic malignancies characterized by dysfunction of the blood and bone marrow, resulting in decreased peripheral blood counts and, at times, evolution into AML. Approximately 16,000 new cases of MDS are reported annually in the United States and approximately 30,000 new MDS cases are reported annually in Europe. MDS occurs most commonly in males 70 years or older. Five-year survival rates for MDS patients vary significantly depending on disease severity and prognosis and range from approximately 60% for low-risk patients, to 25% for intermediate-risk patients. Virtually all high-risk MDS patients die within five years. Treatment paradigms for MDS patients vary depending on disease classification and risk category. Current first-line treatments include azacitidine (Vidaza®), decitabine (Dacogen®), lenalidomide (Thalomid®), growth factors such as erythropoietic and granulocyte-stimulating factor, chemotherapy, and stem cell transplantation in certain cases. The company believe that a large number of patients either do not respond or relapse following first-line treatment, and there are no approved therapies and limited effective treatment options in this high-risk setting.

Chronic Myeloid Leukemia (CML)

Chronic myeloid leukemia, or CML, is a hematopoietic stem cell disease resulting in impaired bone marrow function. Approximately 8,950 new cases are reported annually in the United States and approximately 10,000 new cases are reported annually in Europe. The five-year OS rate for CML patients is 62%. When CML advances to an accelerated or blastic phase, the median OS is approximately one year. In patients who have failed or are intolerant to tyrosine kinase inhibitors, or TKIs, a relapsed or refractory setting, the median OS is four to 11 months. Current first-line treatments for CML include TKIs such as: imatinib (Gleevec®), nilotinib (Tasigna®), dasatinib (Sprycel®) and ponatinib (Iclusig®). In cases of relapse, second and third-line treatments include a TKI not previously used in that patient. In certain circumstances, interferon or bone marrow transplantation is also used.

Hodgkin’s lymphoma (HL)

Hodgkin’s lymphoma, or HL, is a cancer of the lymphatic system that commonly affects lymph nodes in the neck or the area between the lungs and behind the breastbone. Approximately 8,250 new HL cases occur annually in the United States (National Institute of Health, National Cancer Institute, 2016) and approximately 19,000 cases occur annually in Europe (World Health Organization, International Agency for Research on Cancer). The disease has four subtypes, including nodular sclerosis, lymphocyte-rich, mixed cellularity, and lymphocyte-depleted HL, all of which produce increased numbers of a unique cell type called “Reed-Sternberg” cells. These cells are considered to be the clonal tumor cells of HL and are known to express the IL-3R. Although combination chemotherapy and/or radiation therapy are effective at combating this disease, 20-30% of patients relapse after initial treatment or have primary refractory disease. Of these patients, those who do not obtain CR prior to transplantation, or who relapse after second line therapy, have few effective therapeutic options. In 2015, brentuximab vedotin (Adcentris®) received regulatory approval in the United States and elsewhere for the treatment of relapsed or refractory HL. In addition, immunotherapies are approved for third-line patients.

SL-801

SL-801 is a structurally novel, oral, small molecule, reversible inhibitor of Exportin-1, or XPO1, a nuclear transport protein implicated in a variety of malignancies. SL-801 has demonstrated preclinical in vitro and in vivo antitumor activity against a wide array of solid and hematologic cancers. SL-801’s potential ability to reversibly bind XPO1 may offer the possibility to mitigate side effects and help optimize the therapeutic index. Stemline Therapeutics is currently enrolling patients with advanced solid tumors in a Phase 1 dose escalation trial of single agent SL-801.

XPO1 has been shown to regulate nuclear export of many of the major tumor suppressor proteins and oncogenic cell growth regulators. Overexpression of XPO1 has been reported in many cancer types and is associated with aggressive tumor behavior and poor patient prognosis. Inhibition of XPO1 has been shown to restore tumor suppressor function and proper cell cycle regulation, leading to apoptosis of cancer cells. XPO1 has also been shown to be a clinically validated target in both solid and hematological cancers. SL-801 has demonstrated broad and potent preclinical activity in a wide array of solid and hematologic tumors in both in vitro and in vivo xenograft experiments. In a screen against 240 cancer cell lines, SL-801 possessed strong anti-tumor activity, with 50% growth inhibitory values less than 10 nM in 21.3% of cell lines and less than 100 nM in 95.8% of cell lines. As a single agent, SL-801 also significantly prolonged overall survival and inhibited tumor growth in several mouse xenograft models of human multiple myeloma, as well as in xenograft models of acute lymphoblastic leukemia, non-small cell lung cancer and prostate carcinoma, in well-tolerated single-dose or multi-dose regimens. In contrast to an earlier XPO1 inhibitor not developed by it, leptomycin B, which may bind irreversibly to XPO1 and which caused significant toxicities in Phase 1 trials, preclinical data indicate that SL-801 binding to XPO1 is more reversible than leptomycin B. SL-801’s ability to reversibly bind XPO1 offers the potential to improve the therapeutic index in humans.

In September 2017, the company presented an update on the SL-801 Phase 1 trial in patients with advanced solid tumors at the European Society of Medical Oncology, or ESMO, Annual Congress 2017 in Madrid, Spain. No dose limiting toxicity, or DLT, or maximum tolerated dose, or MTD, was identified. The most common TRAEs, through six dosing cohorts, include nausea (42%), fatigue (29%), diarrhea (21%), vomiting (17%), and decreased appetite (17%). The most common TRAEs, grade 3, were nausea (4%) and diarrhea (4%). There were no TRAEs above grade 3. Through these six dosing cohorts, stable disease, or SD, was reported in 38% (9/24) of patients, with tumor shrinkages (range: 3% to 21%) noted in some heavily pre-treated patients. Dose escalation is ongoing, with the ninth dosing cohort currently enrolling.

SL-701

SL-701 is an immunotherapy designed to direct the immune system to attack targets present on certain malignancies including brain cancer. SL-701 is comprised of 3 short synthetic peptides that correspond to epitopes of targets including IL-13Rα2, EphA2, and survivin; two of these synthetic peptides (IL-13Rα2 and survivin) are mutant and believed to enhance immune activity. The company completed a Phase 2 trial of SL-701 in adult patients with second-line glioblastoma, or GBM.

Several previous investigator-sponsored trials utilizing an earlier version of SL-701 demonstrated clinical activity and manageable safety in adults and children with advanced brain cancers. The company subsequently conducted and completed a corporate-sponsored Phase 2 trial, which consisted of 2 stages (Stage 1 and Stage 2). In Stage 1 of this trial (n=46 patients), SL-701 was administered as a single agent, with the immunostimulants GM-CSF and Imiquimod. In Stage 2 of the trial (n=28 patients), SL-701 was administered in combination with bevacizumab, with the immunostimulant poly-ICLC. Both Stages of the trial have completed enrollment and dosing, and patients are being followed for outcomes including survival. Preliminary data were presented at the Society for Neuro-Oncology, or SNO, meeting in November 2017 demonstrating major responses and durable stable diseases with SL-701 alone and in combination with bevacizumab in second-line GBM with a manageable safety profile. In Stage 1, one patient had a partial response, or PR, of 18+ month duration (ongoing), and there were 15 stable diseases, or SD, 6 of which were at least 5 months duration (range: 5 to 28+ months, ongoing). In Stage 2, 2 patients had complete responses, or CR, and 4 patients had PRs, for an ORR of 21% (6/28). SL-701 was generally well-tolerated. The most common treatment-related adverse events, or TRAEs, were fatigue (22%) and injection site reaction (18%). In Stage 2, the median overall survival, or OS, was 11.7 months with a 48% 12-month OS rate. In addition, analyses indicate that SL-701 generated target-specific CD8+ T-cell responses in some patients experiencing clinical benefit, consistent with its mechanism of action. Data are being analyzed and will be considered when deciding next steps for the program. These steps may include conducting larger studies, including randomized studies, single arm studies, further combination studies with novel agents, (e.g., checkpoint inhibitors), that could be conducted alone or via partnerships, or cessation of the program. If additional studies are conducted, this may entail significant manufacturing campaigns and commitments around SL-701 and certain immunostimulants depending upon the choice and availability of immunostimulants.

SL-701 was awarded Orphan Drug designation from the FDA for the treatment of glioma in January 2015.

Preclinical pipeline

SL-501 and SL-101

The company believe that CD123 is a rapidly emerging target in oncology with potential for broad application in hematologic cancer with promise beyond hematologic cancer in certain solid tumors and autoimmune disease. With this in mind, Stemline Therapeutics is developing a platform of compounds that target CD123, led by its lead clinical stage asset, SL-401. SL-501 and SL-101 are both novel CD123-targeted therapies in preclinical development. SL-501 is a high-affinity variant of SL-401 that has shown potency, in vitro and in vivo, against several hematologic tumor types, including acute myeloid leukemia, or AML, chronic myeloid leukemia, or CML, Hodgkin’s lymphoma, or HL, and Non-Hodgkin’s lymphoma, or NHL. SL-101 is a single chain monoclonal antibody fragment (mAb)-conjugate that binds to CD123 and has shown in vitro and in vivo activity against a variety of hematologic cancers. In addition to oncology opportunities, the company may also choose to evaluate the utility of these CD123- targeted agents in various autoimmune diseases, such as scleroderma and cutaneous lupus, in which the CD123-expressing plasmacytoid dendritic cell, or pDC, the precursor cell of BPDCN, may play a role.

SL-901

SL-901 is a small molecule kinase inhibitor. In December 2017, the company in-licensed this drug candidate from UCB Biopharma Sprl, or UCB. Prior to in-licensing, the agent had shown preclinical activity in several tumors, and was evaluated in a small Phase 1 clinical trial in Europe. Neither a dose limiting toxicity, or DLT, nor a maximum tolerated dose, or MTD, was reached in the trial, and a partial response, or PR, in one patient with advanced lung cancer was reported. Stemline Therapeutics is currently evaluating plans to produce drug supply under good manufacturing practice, or GMP, and conduct necessary non-clinical studies to enable a new regulatory filing to continue clinical dose escalation.

Patents and Proprietary Rights

The company's intellectual property portfolio consists of 40 issued patents and 37 pending applications in the U.S. and worldwide of both in-licensed and Stemline-originated inventions.

The company continually assess its intellectual property strategy in order to fortify its position in its market space. To that end, Stemline Therapeutics is prepared to file additional patent applications in any of the above families should its intellectual property strategy require such filings and/or where the company seek to adapt to competition or seize business opportunities. Further, Stemline Therapeutics is prepared to file patent applications relating to the other products in its pipeline soon after the experimental data necessary for a strong application become available and its cost-benefit analyses justify filing such applications.

In addition to filing and prosecuting patent applications in the United States, the company typically file counterpart patent applications in Europe, Canada, Japan, Australia, and additional countries where the company think such foreign filing is likely to be beneficial.

The company do not know if patents will be issued for all of the patent applications in its portfolio, and there is no assurance that they will be. Furthermore, for patent claims now issued and for claims to be issued in the future, the company do not know if such claims will provide significant proprietary protection to its drug candidates and proprietary technologies or if they will be challenged, circumvented, or invalidated. The company's success will in part depend on its ability to obtain and maintain patents protecting its drug candidates, technologies and inventions, to operate without infringing the proprietary rights of third-parties, and to enforce and defend its patents and ensure others do not infringe on its proprietary rights.

The term of individual patents depends upon the legal term of the patents in the countries in which they are obtained. In most countries in which the company file, the patent term is 20 years from the earliest date of filing a non-provisional patent application. In the United States, a patent’s term may be shortened if a patent is terminally disclaimed over another patent or as a result of delays in patent prosecution by the patentee, and a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S. Patent and Trademark Office in granting a patent.

The term of a patent that covers an FDA-approved drug or biologic may also be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Act, permits a patent term extension of up to five years beyond the expiration of the patent. The length of the patent term extension is related to the length of time the drug or biologic is under regulatory review. Patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent applicable to an approved drug or biologic may be extended. Similar provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug or biologic. In the future, if and when its pharmaceutical products receive FDA approval, the company expect to apply for patent term extensions on patents covering those products. The company anticipate that some of its issued patents may be eligible for patent term extensions. For more information regarding U.S. patent laws, see “Business — Government Regulation.”

In addition to the patent term extension rights described above, any of its product candidates that receive FDA approval may also be eligible for market exclusivity protection under the Federal Food, Drug and Cosmetic Act or the Biologics Price Competition and Innovation Act of 2009. For more information regarding market exclusivity laws, see “Business — Government Regulation.”

Many pharmaceutical companies, biotechnology companies and academic institutions are competing with it in the field of oncology and filing patent applications potentially relevant to its business. In order to contend with the inevitable possibility of third-party intellectual property conflicts, from time to time, the company review and assess the third-party intellectual property landscape for competitive and other developments that may inform or impact its intellectual property development and commercialization strategies.

From time to time, the company may find it necessary or prudent to obtain licenses from third-party intellectual property holders. Where licenses are readily available at reasonable cost, such licenses are considered a normal cost of doing business. In other instances, however, where a third-party holds relevant intellectual property and is a direct competitor, a license might not be available on commercially reasonable terms or available at all. Accordingly, the company attempt to manage the risk that such third-party intellectual property may pose by conducting, among other measures, freedom-to-operate studies to guide its early-stage research away from areas where Stemline Therapeutics is likely to encounter obstacles in the form of third-party intellectual property. As its programs advance, the company continue to monitor the intellectual property landscape in an effort to assess the advisability of licensing third-party intellectual property or taking other appropriate steps to address such freedom-to-operate or development issues in the manner the company deem in the best interests of the Company.

With respect to third-party intellectual property, it is impossible to establish with certainty that its product candidates or discovery platform will be free of claims by third-party intellectual property holders or whether the company will require licenses from such third-parties. Even with modern databases and on-line search engines, literature searches are imperfect and may fail to identify relevant patents and published applications. Even when a third-party patent is identified, the company may conclude, upon a thorough analysis, that the company do not infringe the patent or that the patent is invalid. If the third-party patent owner disagrees with its conclusion and the company continue with the business activity in question, the company might face patent litigation by the third-party. Alternatively, the company might decide to initiate litigation in an attempt to have a court declare the third-party patent invalid or not infringed by its activity. In either scenario, patent litigation typically is costly and time-consuming, and the outcome is uncertain. The outcome of patent litigation is subject to uncertainties that cannot be quantified in advance, for example, the credibility of expert witnesses who may disagree on technical interpretation of scientific data. Ultimately, in the case of an adverse outcome in litigation, the company could be prevented from commercializing a product or using certain aspects of its discovery platform as a result of patent infringement claims asserted against it and/or face a significant monetary damages award. This could have a material adverse effect on its business.

To protect its competitive position, it may be necessary to enforce its patent rights through litigation against infringing third-parties. Litigation to enforce its own patent rights is subject to the same uncertainties discussed above. In addition, however, litigation involving its patents carries the risk that one or more of its patents will be held invalid (in whole or in part, on a claim-by-claim basis) or held unenforceable. Such an adverse court ruling could allow third-parties to commercialize its products or its platform technology, and then compete directly with it, without payment to it.

Patents and Proprietary Rights Covering Stemline’s Drug Candidates

Stemline Therapeutics has an exclusive worldwide license to SL-401. These patent rights include issued U.S. Patents, 7,763,242, 8,470,307, 9,181,317, and 9,631,006 covering methods of treating AML, BPDCN and MDS that expire in 2027 and 2028, as applicable, as well as six issued foreign patents. There are additional pending U.S. applications directed to methods of using SL-401 to treat other diseases that, if issued, would also expire in 2027. In addition, Stemline Therapeutics has filed foreign patent applications for the method of using SL- 401 to treat various diseases, although there can be no assurances that such patents will be issued. In addition to patent protection, the company also have the exclusivity afforded by the FDA’s orphan designation of SL-401 for the treatment of both AML and BPDCN and by the provisions of the Biologics Price Competition and Innovation Act of 2009. See “Government Regulation — Orphan Drug Designation” and “— U.S. Patent Term Restoration and Marketing Exclusivity—Biologics Price Competition and Innovation Act of 2009.”

Stemline Therapeutics has an exclusive worldwide license (with the exception of Japan, Korea, Taiwan, and China) to patents covering SL-801. These patent rights include issued U.S. Patents 8,084,454 and U.S. Patent 8,415,357 covering composition of matter and uses of SL-801 that expire in 2030 and 2028, respectively, as well as nine issued foreign patents that expire in 2028. The company also have additional pending patent applications directed to SL-801 which if issued, for which there can be no guarantee, would provide additional protection in certain non-U.S. territories and would expire in 2028.

Stemline Therapeutics has an exclusive worldwide license to patents covering the SL-701 component, IL-13Rα2 mutant, a non-exclusive worldwide license to patents covering the SL-701 component, EphA2, and have filed U.S. and foreign patent applications covering the SL-701 component, survivin mutant. This intellectual property consists of an issued U.S. composition of matter patent (U.S. Patent 7,612,162) directed to an immunogenic mutant IL-13Rα2 peptide expiring in 2026, an issued U.S. composition of matter patent (U.S. Patent 8,574,584) directed to an immunogenic EphA2 peptide expiring in 2024, issued U.S. method of use patents (U.S. Patents 8,114,407 and 9,359,402) directed to the use of EphA2 peptide expiring in 2024 and 2025, issued U.S. method of use patent (U.S. Patent 8,859,488) directed to the combined use of IL-13Rα2 mutant and EphA2 peptides expiring in 2026, and pending U.S. and foreign patent applications directed to the use of an immunogenic mutant survivin peptide which, to the extent it issues, would be expected to expire in 2033. The company also have additional pending patent applications directed to methods of using SL-701 components to treat certain diseases which if issued, for which there can be no guarantee, would provide additional protection in the United States and certain non-U.S. territories and would expire in 2025, 2031, or 2033. In addition to patent protection, the company also have the exclusivity afforded by the FDA’s orphan designation of SL-701 for the treatment of glioma and by the provisions of the Biologics Price Competition and Innovation Act of 2009. See “Government Regulation — Orphan Drug Designation” and “— U.S. Patent Term Restoration and Marketing Exclusivity—Biologics Price Competition and Innovation Act of 2009”.

The company also in-licensed or own certain patent rights, which includes issued patents and pending patent applications in the U.S. and abroad, to its preclinical assets.

Patents and Proprietary Rights Covering Cancer Stem Cell, or CSC, Focused Intellectual Property

Stemline Therapeutics has exclusive worldwide rights to early and broad patents and patent applications in the CSC field covering CSC therapeutics, diagnostics, including companion diagnostics, and drug discovery:

• One unexpired patent (U.S. Patent 8,038,998) that covers a method to treat cancer through use of monoclonal antibodies and other antibody-based compounds that target CSCs. Patent protection extends to 2020;
• Two issued patents (U.S. Patents 8,715,945 and 8,846,325) that cover methods to detectcancer through use of monoclonal antibodies and other antibody-based compounds directed to CD44, Frizzled, and, ESA. Patent protection extends to 2018or 2019, as applicable;
• Two pending U.S. patent applications filed in 2007 directed to CSC-directed therapies and regimens, including CSC-directed therapies and regimens for use in combination with companion diagnostics. Patent protection, to the extent it issues, would be expected to extend to 2027;
• A pending patent application that covers oligonucleotide-based oncology therapies, including CSC-targeted therapeutics, which target microRNA. Patent protection, to the extent it issues, would be expected to extend to 2022;
• A family of intellectual property covering methods to treat cancer through use of antibody-based compounds directed to IL-3Rα as well as composition of matter covering IL-3Rα-targeted antibody conjugates, including U.S. Patent 6,733,743; U.S. Patent 7,651,678; U.S. Patent 8,163,279; U.S. Patent 8,852,551; U.S. Patent 8,992,910; U.S. Patent 9,518,119; U.S. Patent 9,873,743; and other pending applications. Patent protection, to the extent it has or may issue, would be expected to extend to 2021 or 2028, as applicable; and
• A pending U.S. patent application covering CSC-focused drug discovery, including a novel high throughput screen to discover compounds that target CSCs. Patent protection, to the extent it issues, would be expected to extend to 2025.

License and Research Agreements

Scott and White Memorial Hospital

Research and License Agreement (SL-401)

In June 2006, the company entered into a research and license agreement with Scott and White Memorial Hospital (Temple, Texas) for SL-401, its biologic targeted therapy directed to the IL-3R. Under the agreement, Scott and White has granted it an exclusive, royalty-bearing, worldwide license under certain patent rights, know-how and materials to research, develop, make, have made, formulate, use, sell, offer to sell and import SL-401, and any products containing or comprising such compound in finished dosage pharmaceutical form, for the diagnosis, prophylaxis and/or treatment of any disease or condition in humans or animals. The patent rights exclusively licensed to it under the agreement are described in more detail above under “Business — Patents and Proprietary Rights.”

The company must pay Scott and White royalties based on adjusted gross sales, by it or its sublicensees, of products containing the licensed compound for a period of ten years following the first commercial sale of each product in each country. The royalty rates for each product range from the low- to mid-single digits and are tiered based on its annual sales. Stemline Therapeutics has sublicensing rights under the agreement, subject to its paying to Scott and White a percentage of the up-front payments the company receive from a sublicensee.

The company must exercise commercially reasonable efforts to develop and commercialize a licensed product and to achieve certain regulatory milestones within certain periods, subject to extensions based on unforeseen technical, scientific, intellectual property or regulatory issues. If the company fail to comply with its diligence obligations with respect to at least one licensed product, then Scott and White may convert its exclusive license to a non-exclusive license.

The agreement survives until the later of the expiration of the last to expire licensed patent or the date on which the company owe no further payments to Scott and White, after which its license becomes fully paid, irrevocable, perpetual, non-exclusive and royalty-free. The company may terminate the license in whole or on a country-by-country and product-by-product basis upon prior written notice to Scott and White. If either the company or Scott and White breach a material obligation under the agreement, and such obligation is not cured within a specified period of time following written notice from the other party, then the non-breaching party may terminate the agreement upon an additional written notice.

In addition, the agreement provides for Scott and White to conduct a research program with SL-401. In March 2010, the agreement was amended to further the regulatory advancement of SL-401. Stemline Therapeutics has made certain payments to Scott and White for such research services pursuant to the agreement, which to date total approximately $1.0 million in the aggregate. Additionally, Stemline Therapeutics has been granted the exclusive right of reference to its IND for its own regulatory filings. The company may assign the agreement to an affiliate of ours, a purchaser of all or substantially all of its assets or in connection with a merger, change in control or similar transaction by it.

CanBas, Ltd

License for SL-801

On December 26, 2014, the company entered into a license agreement with CanBas, Ltd. for SL-801. SL-801 is a small molecule, reversible inhibitor of XPO1. Under the terms of the agreement, CanBas has granted it an exclusive, royalty-bearing, worldwide (excluding Japan, Korea, China and Taiwan) license, under certain patent rights, know-how and materials to research, develop, make, have made, formulate, use, sell, offer to sell and import SL-801, and any products containing or comprising such compound in finished dosage pharmaceutical form, for the treatment of any disease or condition in humans. The patent rights exclusively licensed to it under the agreement are described in more detail above under “Patents and Proprietary Rights Covering Stemline’s Drug Candidates.”

Stemline Therapeutics is responsible to pay an annual technical advisory fee in December 2018 totaling 110 million Japanese Yen (JPY), if the clinical development continues over this time period. Additionally, the company must pay CanBas tiered royalties based on aggregate net sales, by it or its sublicensees, of products containing the licensed compound until the latest date of a period of ten years following the first commercial sale of each product in each country; the date upon which there are no more valid claims or the expiration or termination of the last regulatory exclusivity period. The royalty rates start in the low single digits and are tiered up based on annual net sales. In the future, the company may also be responsible, based on the achievement of specific clinical-development, regulatory and sales-based commercial milestones, for certain payments to CanBas of up to $86 million. Stemline Therapeutics has sublicensing rights under the agreement, subject to its paying to CanBas a standard royalty percentage of the payments the company receive from a sublicensee.

The company must exercise commercially reasonable efforts to develop and commercialize a licensed product and to achieve certain regulatory milestones within certain periods, subject to extensions based on unforeseen technical, scientific, intellectual property or regulatory issues.

The agreement survives until the later of ten years following the first commercial sale of each product in each country; the date upon which there are no more valid claims; or the expiration or termination of the last regulatory exclusivity period, after which its license becomes fully paid, irrevocable, perpetual, non-exclusive and royalty-free. The company may terminate the license for any or no reason upon 60 days advance written notice to CanBas. If either the company or CanBas breach a material obligation under the agreement, and such obligation is not cured within a specified period of time following written notice from the other party, then the non-breaching party may terminate the agreement upon an additional written notice.

University of Pittsburgh

Exclusive License Agreement to IL-13Rα2 peptide (SL-701 component)

In September 2009, the company entered into an exclusive license agreement with the University of Pittsburgh, or the University, for the composition of matter, and use with other components, of a proprietary immunogenic mutant analog peptide of IL-13Rα2, an active ingredient of SL-701, its brain cancer immunotherapy candidate. Under the agreement, the University grants it an exclusive worldwide license under certain patent rights to make, have made, use, sell and import brain cancer peptide antigen immunotherapies (including SL-701, which has been developed by the University under a separate immunotherapy name designated by the University). The patent rights exclusively licensed to it under the agreement are described in more detail above under “Business — Patents and Proprietary Rights.” The University retains the right to practice the licensed patent rights for non-commercial education and research purposes. The license is also subject to certain retained rights of the United States government. The company's right to grant sublicenses to third parties is subject to the prior written approval of the University, which the University may not unreasonably withhold or delay.

The company paid the University an initial license fee and will pay the University annual license maintenance fees until the first commercial sale of a licensed product. To date, Stemline Therapeutics has paid an aggregate of approximately $0.7 million in fees to the University under the agreement. The company must also pay the University a low-single digit royalty as a percentage of net sales of licensed products by it or its sublicensees, with standard provisions for royalty offsets to the extent the company need to obtain any rights from third-parties to commercialize the licensed products. The company must also pay a minimum annual royalty following the first commercial sale of a licensed product, but only to the extent the minimum annual royalty amount is greater than the annual royalty otherwise due. The company also must pay the University a percentage of non-royalty revenue the company receive from its sublicensees, which decreases if the company enter into the applicable sublicense agreement after a certain clinical milestone has been met. The company also must make certain payments to the University of up to approximately $4.2 million upon the achievement of specific regulatory and commercial milestone events.

The company must use its commercially reasonable best efforts to develop or commercialize a licensed product as soon as practicable, and to continue active, diligent marketing efforts throughout the term of the agreement. The company also must adhere to certain specific regulatory milestones with respect to initiating clinical trials and submitting an application for regulatory approval of a licensed product. If the company fail to meet any such milestone through no fault of its own, the company may negotiate with the University a one-time extension of the applicable dates, subject to paying the University a fee. If the company do not meet the extended milestone dates, then the University may terminate the agreement.

The agreement survives until the expiration of the last to expire licensed patent. The University may terminate the agreement if the company default in the performance of any of its obligations and do not cure the default within a specified period of time after receiving notice from the University, or if the company challenge the validity, enforceability or ownership of the license patent rights anywhere in the world. The University may also terminate the agreement if the company cease to carry out its business or become bankrupt or insolvent. The company may terminate the agreement for any reason upon prior written notice to the University and payment of all amounts due to the University through the date of termination. Any sublicense agreement entered into prior to termination will survive, subject to certain customary conditions. The company may assign the agreement to an affiliate of ours, a purchaser of all or substantially all of its assets or in connection with a merger, change in control or similar transaction by it.

Non-Exclusive License Agreement to EphA2 peptide (SL-701 component)

In March 2012, the company entered into a non-exclusive license agreement with the University for the use of EphA2 epitopes, another active ingredient of SL-701. Under the agreement, the University grants it a non-exclusive worldwide license under certain patent rights to use the EphA2 peptide in or packaged with the IL-13Rα2 peptide, as well as other immunotherapies the company may develop and own or exclusively control, for the diagnosis, treatment or prevention of diseases and tumors of the brain in human patients. The patent rights licensed to it under the agreement are described in more detail above under “Business — Patents and Proprietary Rights.” The University retains the right to practice the licensed patent rights for non-commercial education and research purposes. The license grant is also subject to certain retained rights of the United States government. The company may only grant sublicenses to third parties who are permitted sublicensees under the exclusive IL-13Rα2 peptide license agreement with the University.

The company must pay the University an initial license fee, and will pay the University annual license maintenance fees until the net sales of a licensed product exceed a specified amount. To date, Stemline Therapeutics has paid an aggregate of approximately $0.1 million in fees to the University under the agreement. The company must also pay the University a customary low-single digit royalty for the license as a percentage of net sales of licensed products by it or its sublicensees, with standard provisions for royalty offsets to the extent the company need to obtain any rights from third-parties to commercialize the licensed products. The company must also pay a minimum annual royalty following the first commercial sale of a licensed product, but only to the extent the minimum annual royalty amount is greater than the annual royalty otherwise due.

The company must use its commercially reasonable best efforts to develop or commercialize a licensed product as soon as practicable, and to continue active, diligent marketing efforts throughout the term of the agreement. The company also must adhere to certain specific regulatory milestones with respect to initiating clinical trials and submitting an application for regulatory approval of a licensed product. If the company fail to meet any such milestone by certain specified dates, then the University may terminate the agreement.

The agreement survives until the expiration of the last to expire licensed patent. The University may terminate the agreement if the company default in the performance of any of its obligations and do not cure the default within a specified time period of receiving notice from the University. The University may also terminate the agreement if the company cease to carry out its business or become bankrupt or insolvent. The company may terminate the agreement for any reason upon prior written notice to the University and payment of all amounts due to the University through the date of termination. Any sublicense agreement entered into prior to termination will survive, subject to certain customary conditions. The company may assign the agreement to an affiliate of ours, a purchaser of all or substantially all of its assets or in connection with a merger, change in control or similar transaction by it.

Non-Exclusive License Agreement to use and reference certain data, information and regulatory filings (SL-701)

In March 2012, the company entered into a non-exclusive license agreement with the University. Pursuant to the agreement, the company acquired a non-exclusive, worldwide license to use and reference certain know-how, information and data that is contained in the INDs covering the clinical trials of SL-701 that were conducted by the University for the development, manufacture, regulatory approval and commercialization of pharmaceutical products. The company may grant sublicenses in conjunction with a sublicense to a permitted sublicensee under the exclusive IL-13Rα2 peptide license agreement with the University.

The company paid the University an initial license fee, as well as payments following a regulatory milestone. To date, Stemline Therapeutics has paid an aggregate of approximately $27,500 in fees to the University under the agreement. The company also must pay the University a percentage of non-royalty revenue the company receive from its sublicensees. The company must use its commercially reasonable best efforts to develop or commercialize a product derived from the use of the licensed data or information as soon as practicable. The company also must adhere to a specific regulatory milestone with respect to submitting an application for regulatory approval that incorporates the licensed data or information, and if the company fail to meet the milestone, the University may terminate the agreement unless Stemline Therapeutics has pre-paid the milestone payment listed above.

The term of the license agreement is 20 years, and the University may terminate the agreement earlier  if the company default in the performance of any of its obligations and do not cure the default within a specified time period, (ii) upon the termination of the exclusive IL-13Rα2 peptide license agreement with the University, or (iii) if the company cease to carry out its business or become bankrupt or insolvent. The company may terminate the agreement at any time prior to incorporating or referencing the data or University INDs, after a specified number of days following written notice. The company may assign the agreement to an affiliate of ours, a purchaser of all or substantially all of its assets or in connection with a merger, change in control or similar transaction by it.

Cambridge University Technical Services Limited

Exclusive Patent and Non-Exclusive Know-How License Agreement (Platform Technology)

In September 2004, the company entered into a license agreement with Cambridge University Technical Services Limited, or CUTS, relating to its StemScreen® platform technology. Under the agreement, the company acquired an exclusive, royalty-bearing, worldwide license under patent rights owned by CUTS to develop, manufacture, have manufactured, use, sell, offer to sell, market, have marketed, import, have imported, export and have exported products covered by the patent rights, including a platform technology to discover and screen for compounds that target CSCs. The patent rights exclusively licensed to it under the agreement are described in more detail above under “Business — Patents and Proprietary Rights.” The license is subject to certain rights retained by CUTS for academic research and teaching. The company also acquired a non-exclusive, worldwide license to know-how related to the licensed patent rights. The agreement provides it with full sublicensing rights. Under the agreement, the company paid an upfront license fee and are obligated to make milestone payments of up to an aggregate of $1.7 million upon specified regulatory events, as well as pay royalties of less than 1% on sales of licensed products. CUTS may terminate the agreement, including its rights to the platform technology, for specified cause or upon certain events involving its bankruptcy or insolvency.

Competition

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. Additionally, there has been an increase in development of therapeutics targeting ultra orphan and rare oncologic indications, its main area of focus. While the company believe that its scientific knowledge, technology, and development experience provide it with competitive advantages, the company face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions. Any product candidates that the company successfully develop and commercialize will compete with existing therapies and new therapies that may become available in the future.

There are several biopharmaceutical companies whose primary focus appears to be developing therapies against CSCs, including Verastem, Inc., OncoMed Pharmaceuticals, Inc., Sumitomo Dainippon Pharma Co. Ltd., Bionomics Limited and Stemcentrx, Inc. (an AbbVie, Inc., company). There are also several biopharmaceutical companies that do not appear to be primarily focused on CSCs, but may be developing at least one CSC-directed compound. These companies include Astellas Pharma US, Inc., Boehringer Ingelheim GmbH, Geron Corp., GlaxoSmithKline plc, Ignyta, Inc., Macrogenics Inc., Micromet, Inc. (an Amgen, Inc. company), Pfizer Inc., Roche Holding AG, Sanofi U.S. LLC, and others. Additionally, there are a number of companies working to develop new treatments for hematologic cancers, which may compete with SL-401 and SL-801, including AbbVie, Inc., Ambit Biosciences Corporation (a Daiichi Sankyo company), Amgen, Inc., Astex Pharmaceuticals (now an Otsuka Pharmaceutical company), Celator Pharmaceuticals, Inc., Celgene Corporation, Cellectis, Cyclacel Pharmaceuticals, Inc., Eisai Co. Ltd., Genzyme Corporation (a Sanofi company), Immunogen, Inc., Janssen Pharmaceutical Companies of Johnson and Johnson, Karyopharm Therapeutics, Inc., Novartis AG, Seattle Genetics, Inc., and Sunesis Pharmaceuticals, Inc., among others. There are also a number of drugs used for the treatment of brain cancer that may compete with SL-701, including, Avastin® (Roche Holding AG), Gliadel® (Eisai Co. Ltd.), and Temodar® (Merck & Co., Inc.). There are a number of companies working to develop brain cancer therapeutics with programs in clinical testing, including Agenus Inc., Bristol-Myers Squibb, Inc., Cortice Biosciences, Inc., Celldex Therapeutics, Inc., CytRx Corporation, GenSpera, Inc., GlaxoSmithKline plc., ImmunoCellular Therapeutics, Ltd., Northwest Biotherapeutics, Inc., Novartis AG, Roche Holding AG and others.

Many of its competitors have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved products than the company do. Mergers and acquisitions in the pharmaceutical, biotechnology and diagnostic industries may result in even more resources being concentrated among a smaller number of its competitors. These competitors also compete with it in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, its programs. Small or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

The key competitive factors affecting the success of all of its product candidates, if approved, are likely to be their efficacy, safety, convenience, price, the level of generic competition and the availability of reimbursement from government and other third-party payors.

The company's commercial opportunity could be reduced or eliminated if its competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that the company may develop. The company's competitors also may obtain FDA or other regulatory approval for their products more rapidly than the company may obtain approval for ours, which could result in its competitors establishing a strong market position before Stemline Therapeutics is able to enter the market. Also, if its competitors receive marketing approval for a product for which it has an orphan designation, the company may not be able to receive marketing approval for one of its products for the same indication unless it demonstrates clinical superiority to such product. The company's ability to compete may be affected in many cases by insurers or other third-party payors seeking to encourage the use of generic products. If its therapeutic product candidates are approved, the company expect that they will be priced at a significant premium over any competitive generic products.

The most common methods of treating patients with cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy and targeted drug therapy. These therapies are numerous and varied in their design, therapeutic application and mechanism of action. As a result, they may provide significant competition for any of its product candidates for which the company obtain market approval. In addition to currently marketed oncology therapies, there are also a number of products in late stage clinical development to treat cancer. These products in development may provide efficacy, safety, convenience and other benefits that are not provided by currently marketed therapies. As a result, they may provide significant competition for any of its product candidates for which the company obtain market approval.

Competition for SL-401

There are a number of companies working to develop new treatments for AML and other hematologic cancers, including Agios, Inc., Ambit Biosciences Corporation (now a Daiichi Sankyo company), Astex Pharmaceuticals (an Otsuka Pharmaceutical company), Boehringer Ingelheim, Celator Pharmaceuticals, Inc. (a Jazz Pharmaceuticals company), Celgene Corporation, Cellectis, Cyclacel Pharmaceuticals, Inc., Eisai Co. Ltd., Epizyme, Inc., Genzyme Corporation (a Sanofi company), Immunogen, Inc., Janssen Pharmaceutical Companies of Johnson and Johnson, Seattle Genetics, Inc., and Sunesis Pharmaceuticals, Inc., among others.

Competition for SL-801

Karyopharm Therapeutics is the only company, to its knowledge, that currently has XPO1 inhibitors in clinical development. Karyopharm’s selinexor is being evaluated in a number of clinical trials in both solid and hematologic cancers, with the most advanced clinical programs in AML, multiple myeloma and diffuse large B-Cell lymphoma, or DLBCL. Karyopharm has also advanced a second generation compound, KPT-8602, into clinical trials in relapsed/refractory multiple myeloma.

Competition for SL-701

There are a limited number of drugs used for the treatment of brain cancer, including Temodar® (Merck & Co., Inc.), nitrosoureas including Gliadel® (Eisai Co., Inc.), and Avastin® (Roche Holding AG). There are a number of companies working to develop brain cancer therapeutics with programs in clinical testing including Agenus Inc., Bristol-Myers Squibb, Inc., Cortice Biosciences, Inc., Celldex Therapeutics, Inc., CytRx Corporation, GenSpera, Inc., GlaxoSmithKline plc., ImmunoCellular Therapeutics, Ltd., Northwest Biotherapeutics, Inc., Novartis AG, Roche Holding AG and others.

References

1. ^ https://fintel.io/doc/sec-stml-stemline-therapeutics-10k-2018-march-16-17974