Purple Biotech Ltd 20-F for FY2021

Purple Biotech Ltd. (PPBT)

20-F 2022-03-09 For: 2021-12-31

Added on April 10, 2026

About this 20-F

Purple Biotech Ltd filed this 20-F on March 9, 2022, covering the fiscal year ended December 31, 2021 (FY2021).

Headline figures

Fiscal year ended December 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net income: $18.38M; down 34.3% from net income of $28M a year earlier

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Title of class	Trading Symbols	Name of each exchange on which registered

American Depositary Shares, each representing 10 Ordinary Shares ⁽¹⁾	PPBT	NASDAQ Capital Market

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3.	KEY INFORMATION	1
ITEM 4.	INFORMATION ON THE COMPANY	42
ITEM 4A.	UNRESOLVED STAFF COMMENTS	70
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	70
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	78
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	98
ITEM 8.	FINANCIAL INFORMATION	100
ITEM 9.	THE OFFER AND LISTING	103
ITEM 10.	ADDITIONAL INFORMATION	103
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	116
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	117
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	119
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	119
ITEM 15.	CONTROLS AND PROCEDURES	119
ITEM 16.	[RESERVED]	120
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	120
ITEM 16B.	CODE OF ETHICS	120
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	120
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.	121
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	121
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT	121
ITEM 16G.	CORPORATE GOVERNANCE	121
ITEM 16H.	MINE SAFETY DISCLOSURE	122
ITEM 16I.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	122
ITEM 17.	FINANCIAL STATEMENTS	123
ITEM 18.	FINANCIAL STATEMENTS	123
ITEM 19.	EXHIBITS	123

	●	“TyrNovo” refers to TyrNovo Ltd., the majority owned subsidiary of Purple Biotech,

	●	“FameWave” refers to FameWave Ltd., the wholly owned subsidiary of Purple Biotech,

	●	“FameWave Transaction” refers to our acquisition of FameWave in January 2020.

	●	the terms “dollar”, “US$” or “$” refer to U.S. dollars, the lawful currency of the United States of America,

	●	“Securities Act” refers to the Securities Act of 1933, as amended,

	●	“SEC” refers to the United States Securities and Exchange Commission,

“API”		Active Pharmaceutical Ingredient – any substance or mixture of substances intended to be used in the manufacture of a drug product and that, when used in the production of a drug product, becomes one active ingredient in the drug product.

“approved product”		A product that has been approved for marketing by a regulatory authority.

“BLA”		Biologics License Application – A request for permission to market a new biological product.

“cGMP”		Current Good Manufacturing Practice – minimum requirements of the FDA and other regulatory authorities for the methods, facilities, and controls used in the manufacturing, processing, and packing of a drug product that is intended for human use to ensure that the product is safe for use and has the ingredients and strength that it claims to have.

“Clinical”		Pertaining to human studies.

“CMC”		Chemistry, manufacturing, and controls.

“Consensi”		An FDA approved fixed-dose combination drug treatment intended for the treatment of osteoarthritis pain and for hypertension.

“EGFR”		Epidermal Growth Factor Receptor (EGFR; ErbB-1; HER1 in humans) is a transmembrane protein that is a receptor for members of the epidermal growth factor family (EGF family) of extracellular protein ligands.

“FDA”		United States Food and Drug Administration.

“Formulation”		All the active and inactive materials contained in a final medical product.

“IND”		Investigational New Drug (Application) – an application to test an experimental drug in human beings and that requires clearance by the FDA for clinical trials to be initiated.

“NDA”		New Drug Application - an application submitted to the FDA to approve marketing a new drug.

“PDX”		An animal model in which patient-derived tumor tissue at low passage are implanted in animals, used to conserve original tumor characteristics and to provide relevant predictive insights into clinical outcomes when evaluating new cancer therapies.

“Pharmacokinetics”, “PK”		The study of the absorption, distribution, metabolism and excretion of a drug from the body; the pharmacokinetic indices provide, among other things, information on the extent and time of the patient’s exposure to the material. It is the study of how the body affects the drug.

“Preclinical”		Drug development studies performed outside of a human living organism or cell, using living cells, or appropriate animal models. The studies begin before trials in humans and assess safety, toxicity, and efficacy. Since drug development is dynamic, Preclinical studies are performed throughout the drug development lifecycle.

	●	We are a clinical-stage pharmaceutical company with a history of operating losses. We expect to incur significant additional losses in the future and may never be profitable;

	●	Our limited operating history as a pharmaceutical research and development company makes it difficult to evaluate our business and prospects, and we depend on the success of a limited portfolio of products for our revenue, which could impair our ability to achieve profitability;

	●	We will need to raise additional capital to achieve our strategic objectives of developing and commercializing our therapeutic candidates, as well as to develop, acquire and/or in-license additional therapeutic candidates, and our failure to raise sufficient capital would significantly impair our ability to fund our future operations, develop our therapeutic candidates, seek regulatory approval that is a prerequisite to selling any product, attract development or commercial partners, and retain key personnel;

	●	Our long-term capital requirements are uncertain and subject to numerous risks;

	●	Our clinical trials may fail to demonstrate adequately the safety and efficacy of our therapeutic candidates, which would prevent or delay regulatory approval and commercialization;

	●	Our drug candidates may cause undesirable side effects or have other properties that could halt clinical development, prevent regulatory approval, limit commercial potential, or result in significant negative consequences;

	●	If we and/or our potential commercialization partners are unable to obtain FDA and/or other foreign regulatory authority approval for our therapeutic candidates, we and/or our potential commercialization partners, will be unable to commercialize our therapeutic candidates;

	●	Pre-clinical studies, CMC, and clinical trials may involve a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future results. We and/or our potential commercialization partners will not be able to commercialize our therapeutic candidates without developing CMC satisfactory to regulatory authorities, completing preclinical and clinical studies, and then seeking to obtain regulatory approval, if such trials show that our therapeutic candidates are safe and effective;

	●	If we do not establish collaborations for our oncology therapeutic candidates or any other therapeutic candidates that we may develop or acquire in the future, or otherwise raise substantial additional capital, we will likely need to alter our development and any commercialization plans;

	●	Any collaborative arrangements that we establish may not be successful or we may otherwise not realize the anticipated benefits from these collaborations;

	●	Our current business model is based largely upon the development or acquisition and commercialization of new combination products and new drug candidates that may have not yet been administered to humans or have limited history of treatment with humans. Unexpected difficulties or delays in successfully developing, acquiring or commercializing such combination and new drugs could have an adverse effect on our business, financial condition and results of operations;

	●	We rely mainly on third parties to conduct our chemistry, manufacturing and controls, research and development, preclinical studies and clinical trials, and those third parties may not perform satisfactorily, including, but not limited to, failing to conform with quality standards for our drug candidates, which may endanger our clinical trial participants, recruit clinical trial investigators with the appropriate competencies and experience, recruit suitable candidates for our clinical trials and/or to meet established deadlines for the completion of such studies and trials;

	●	If third parties do not manufacture our current therapeutic candidates or any other therapeutic candidate that we may develop or acquire in the future in sufficient quantities in the required timeframe, at the required quality standards and at an acceptable cost, clinical development and commercialization of our therapeutic candidates could be delayed;

	●	We rely on third-party contract vendors to manufacture and supply us with APIs to be compliant with the International Conference of Harmonization Q7 guidance and applicable laws and regulations, in the quantities we require on a timely basis;

	●	We anticipate continued reliance on third-party manufacturers if we are successful in obtaining marketing approval from the FDA and/or other regulatory agencies for NT219, CM24 or any other therapeutic candidates we may develop or acquire in the future;

	●	We and our third-party manufacturers are, and will be, subject to regulations of the FDA and other foreign regulatory authorities;

	●	The manufacture of our drug candidates is complex, and we may encounter difficulties in production, particularly with respect to process development or scaling-up of our manufacturing capabilities. If we, or any of our third-party manufacturers, encounter such difficulties, our ability to supply drugs for clinical trials or our products (if approved) for patients on a timely basis could be materially delayed or adversely affected. In addition, this may cause an increase in costs that could result in our inability to maintain a commercially viable cost structure;

	●	Pre-clinical studies and clinical trials may involve a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not be predictive of future results;

	●	We may depend on a partner to conduct clinical trials with CM24, and we may enter into future collaboration agreements with collaboration partners to develop and conduct clinical trials with, obtain regulatory approvals for, and to market and sell our therapeutic candidates. If such collaboration fails to perform as expected, our clinical trials and/or development plans will be delayed, and we will be required to seek other partners, which we may not be able to engage in a timely manner, if at all, and which may delay our development plans and therefore the potential for us to generate future revenue from our therapeutic candidates would be significantly reduced and our business would be significantly harmed;

	●	Because CM24 and NT219, each, represents a novel approach to the treatment of disease, there are many uncertainties regarding the development, the production, the market acceptance, third-party reimbursement coverage and the commercial potential of CM24 and NT219;

	●	The COVID-19 outbreak may adversely affect the development of our drug candidates, our ability to raise substantial additional capital and the results of our operations and financial condition;

	●	Our oncology therapeutic candidates, if approved, or any other therapeutic candidates that may be approved for marketing in the future, might not be purchased or used, and our revenues and profits will not develop or increase;

	●	Legal proceedings, third-party claims of intellectual property infringement and other legal challenges may require us to spend substantial time and money and could prevent us from, or delay us in, developing or commercializing our therapeutic candidates. An adverse result in any infringement claims or other legal challenges could have a material adverse effect on our business, results of operations and on our financial condition; and

	●	We may be unable to adequately protect or enforce our rights to intellectual property, causing us to lose valuable rights. Loss of any of our intellectual rights may lead us to lose market share and could have an adverse effect on our business, results of operations and financial condition.

	●	the costs of seeking out and acquiring or engaging in-licensing or similar transactions for other oncological candidates;

	●	our ability to successfully complete the required CMC development for our oncology therapeutic candidates or any other therapeutic candidates that we may acquire, in-license, or develop in the future;

	●	our ability to successfully out-license or commercialize our oncology therapeutic candidates, or any other therapeutic candidates that we may acquire, in-license, or develop in the future, including securing commercialization agreements with third parties and favorable pricing and market share;

	●	the progress, success, and cost of our preclinical and/or clinical trials and research and development programs;

	●	the costs, timing and outcome of regulatory review and obtaining and maintaining regulatory approval of our oncology therapeutic candidates or any other therapeutic candidates that we may acquire, in-license, or develop in the future and addressing regulatory and other issues that may arise post-approval for such oncology therapeutic candidates;

	●	the costs of obtaining and enforcing our issued patents and defending intellectual property-related claims;

	●	our consumption of available resources more rapidly than currently anticipated, resulting in the need for additional funding sooner than anticipated;

	●	our ability to obtain recommendations and publish studies regarding the efficacy and/or safety of our oncology therapeutic candidates or any other therapeutic candidates that we may acquire or develop in the future that may be published by government agencies, professional organizations, academic or medical journals or other key opinion leaders; and

	●	sufficient coverage and reimbursement by third-party payers for our therapeutic candidates.

	●	delays in manufacturing the drug substance and drug product for preclinical studies and clinical trials;

	●	delays in manufacturing the drug substance and drug product following NDA or BLA approval, if we receive such approval at all;

	●	delays in receiving import or other government approvals to ensure appropriate drug supply, and shortages of combination drugs used in our clinical studies.

	●	delays in obtaining institutional review board (human ethics committee) and other regulatory approvals to commence a clinical trial;

	●	negative or inconclusive results from preclinical and/or clinical trials;

	●	the FDA or other foreign regulatory authorities may disagree with the number, design, size, conduct or implementation of our clinical studies and may not approve initiation of certain clinical trials;

	●	the clinical trials may be delayed or not completed due to the failure to recruit suitable candidates or if there is a lower rate of suitable candidates than anticipated or if there is a delay in recruiting suitable candidates;

	●	an inability to monitor patients adequately during or after treatment;

	●	problems with investigator or patient compliance with the trial protocols;

	●	a therapeutic candidate may not prove safe or efficacious;

	●	there may be unexpected or even serious adverse events and side effects from the use of a therapeutic candidate;

	●	the results with respect to any therapeutic candidate may not confirm the positive results from earlier preclinical studies or clinical trials;

	●	the results may not meet the level of statistical significance required by the FDA or other foreign regulatory authorities;

	●	the results will leave only limited and/or restrictive uses, including the inclusion of warnings and contraindications, which could significantly limit the marketability and profitability of the therapeutic candidate;

	●	our drug candidates may not be reimbursed under different healthcare programs such as Medicare, Medicaid or private health insurance programs;

	●	changes to the current regulatory requirements related to clinical trials which can delay, hinder or lead to unexpected costs in connection with our receiving the applicable regulatory approvals; and

	●	we may not be able to control the amount and timing of resources that our collaborators may devote to our drug product or therapeutic candidates;

	●	we may be held liable should a collaborator fail to comply with applicable laws, rules, or regulations when performing services for us;

	●	our collaborators may experience financial difficulties or changes in business focus;

	●	our collaborators may experience quality or regulatory issues that negatively affect our therapeutic candidates;

	●	our collaborators may fail to secure adequate commercial supplies in a timely manner for our drug products upon marketing approval, if at all;

	●	we may suffer losses due to our collaborators’ failure to perform their duties and we may not be able to be reimbursed by our collaborators for such losses;

	●	our collaborators may have a shortage of qualified personnel;

	●	we may be required to relinquish important rights, such as local trademark, marketing and distribution rights;

	●	business combinations or significant changes in a collaborator’s business strategy may adversely affect a collaborator’s willingness or ability to complete its obligations under any arrangement;

	●	under certain circumstances, a collaborator could move forward with a competing therapeutic candidate developed either independently or in collaboration with others, including our competitors; and

	●	collaborative arrangements are often terminated or allowed to expire, which could delay and increase the cost of development of our therapeutic candidates.

	●	refusal to approve pending applications or supplements to approved applications that we or our potential commercialization partners submit;

	●	voluntary or mandatory recall;

	●	refusal to permit the import or export of our therapeutic candidates;

	●	product seizure or detentions;

	●	injunctions or the imposition of civil or criminal penalties and fines; or

	●	adverse publicity or changes to the drug’s labeling.

	●	delays in reaching a consensus with regulatory agencies on study design;

	●	delays in reaching agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical study sites;

	●	the departure of a principal investigator from a clinical site, which could cause delays in conducting the clinical trial at a particular clinical site;

	●	the shortage of staff in the clinical sites;

	●	imposition of a temporary or permanent clinical hold by regulatory agencies;

	●	delays in recruiting suitable patients to participate in clinical studies for NT219, CM24 or future drug candidates;

	●	failure by us or our CROs, or third parties, to adhere to clinical study requirements;

	●	failure to perform in accordance with the FDA’s cGCPs, requirements, or applicable regulatory guidelines in other countries;

	●	patients dropping out of a study;

	●	occurrence of adverse events associated with the product candidate that are viewed to outweigh its potential benefits;

	●	changes in regulatory requirements and guidance that require amending or submitting new clinical protocols;

	●	changes in the standard of care on which a clinical development plan was based, which may require new or additional trials;

	●	the cost of clinical studies of CM24 and NT219 being greater than we anticipate;

	●	clinical studies of CM24, NT219 and/or future drug candidates producing negative or inconclusive results, which may result in us deciding, or regulators requiring, conduct of additional clinical studies or abandon product development programs; and

	●	delays in manufacturing, testing, release, validating, or import/export of sufficient stable quantities of CM24, NT219,and/or future drug candidates or approved drugs for use in clinical studies or the inability to do any of the foregoing, including any quality issues associated with contract manufacturers.

	●	the size and nature of the patient population;

	●	the patient eligibility criteria defined in the protocol;

	●	the size of the study population required for analysis of the trial’s endpoints;

	●	the proximity of patients to trial sites;

	●	the design of the trial;

	●	our ability to recruit clinical trial investigators with the appropriate competencies and experience;

	●	competing clinical trials for similar therapies or other new therapeutics;

	●	clinicians’ and patients’ perceptions of the potential advantages and side effects of the product candidate being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are investigating;

	●	our ability to obtain and maintain patient consents;

	●	the risk that patients enrolled in clinical trials will not complete a clinical trial; and

	●	the effect of COVID-19 on the ability of patients to visit the testing sites and the effect of the disease on potential patients who contracted the disease.

	●	collaboration partners have significant discretion in determining the efforts and resources that they will apply to these partnerships;

	●	collaboration partners may have limited supply of products, such as a PD-1 antibody, which we require for the development of our therapeutic candidates;

	●	collaboration partners may not perform their obligations as expected;

	●	collaboration partners may not pursue development of our therapeutic candidates or may elect not to continue or renew development programs, based on clinical trial results, changes in the collaboration partners’ strategic focus or available funding or external factors, such as an acquisition, that divert resources or create competing priorities;

	●	collaboration partners may delay clinical trials, provide insufficient funding for a clinical trial program, stop a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new formulation of a product candidate for clinical testing;

	●	collaboration partners may have or could independently develop, or develop with third parties, products that compete directly or indirectly with our out-licensed therapeutic candidates;

	●	collaboration partners may infringe the intellectual property rights of third parties, which may expose us to litigation and potential liability; and

	●	collaboration agreements may be terminated and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable therapeutic candidates.

	●	the scope of rights granted under the license agreement and other interpretation-related issues;

	●	the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement;

	●	the sublicensing of patent and other rights;

	●	our diligence obligations under the license agreement and what activities satisfy those diligence obligations;

	●	the ownership of inventions and know-how resulting from the creation or use of intellectual property by us, alone or with our licensors and collaborators;

	●	the scope and duration of our payment obligations;

	●	our rights upon termination of such agreement; and

	●	the scope and duration of exclusivity obligations of each party to the agreement.

	●	low market acceptance by physicians, healthcare payers, patients and the medical community as a result of lower demonstrated clinical safety or efficacy compared to other products, prevalence and severity of adverse side effects, or other potential disadvantages relative to alternative treatment methods;

	●	insufficient or unfavorable levels of reimbursement from government or third-party payers, such as insurance companies, health maintenance organizations and other health plan administrators;

	●	infringement on proprietary rights of others for which we or our potential commercialization partners have not received licenses;

	●	incompatibility with other therapeutic candidates;

	●	other potential advantages of alternative treatment methods and competitive forces that may make it more difficult for us to penetrate a particular market segment;

	●	ineffective marketing and distribution support;

	●	lack of cost-effectiveness; or

	●	timing of market introduction of competitive products.

	●	a covered benefit under its health plan;

	●	safe, effective and medically necessary;

	●	appropriate for the specific patient;

	●	cost-effective, including compared to approved alternate therapies; and

	●	neither experimental nor investigational.

	●	the Ethics in Patient Referrals Act of 1989, commonly referred to as the Stark Law, which prohibits physicians from referring Medicare or Medicaid patients for certain designated health services where that physician or family member has a financial relationship with the entity providing the designated health service, unless an exception applies;

	●	federal false claims laws that prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other government healthcare programs that are false or fraudulent;

	●	the so-called federal “Sunshine Act”, which requires certain pharmaceutical and medical device companies to monitor and report certain payments and other transfers of value to physicians and teaching hospitals and ownership or investment interests held by physicians or their immediate family members to CMS for disclosure to the public;

	●	federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; and

	●	state law equivalents of each of the above federal laws, such as anti-kickback, false claims, transparency and reporting laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers, many of which differ from each other in significant ways, thus complicating compliance efforts.