CABA

In addition, for certain RESET TM trials, we do not know the doses to be evaluated in pivotal trials or, if licensed, commercially.
For instance, subjects in our CAAR T clinical trials have been infused with our proposed therapies, and may possess strongly activating soluble antibodies, which are not present in oncology patients, and when they interact with our infused product candidates, could result in potential adverse side effects, such as CRS or ICANS, which have been observed in our clinical trials.
In our clinical trials and clinical trials of other similarly designed cellular immunotherapies to treat cancer, there have been life threatening events related to ICANS and/or CRS requiring intense medical intervention, such as intubation or medications to support blood pressure, and in several cases in clinical trials of other similarly situated clinical trials and of other similarly designed immunotherapies to treat cancer resulted in death.
We have observed events of CRS and ICANS in our ongoing rese-cel REstoring SElf-Tolerance, or RESET, trial.
Although we have completed multiple preclinical studies designed to screen for toxicity caused by unintended off-target recognition by the cell binding domain of the DSG3 CAAR, MuSK CAAR and rese-cel and intend to screen future CAR candidates not yet tested in patients through preclinical studies, our product candidates may still recognize and react with one or more proteins unrelated to the intended surface immunoglobin target protein to which it is designed to link.
We performed similar preclinical studies for rese-cel and did not observe any confirmed off target activity for rese-cel.
We implemented a preconditioning regimen in the DesCAARTes TM trial where certain subjects were pre-treated with IVIg and cyclophosphamide, and other patients were pre-treated with IVIg, cyclophosphamide, and fludarabine prior to DSG3-CAART infusion, have included planned dosing cohorts in the MusCAARTes TM trial where subjects were pre-treated with fludarabine and cyclophosphamide prior to MuSK-CAART infusion, and we have incorporated a lymphodepleting preconditioning regimen of fludarabine and cyclophosphamide in our RESET TM clinical trials.
We are evaluating rese-cel without preconditioning in our RESET-PV ® trial in patients with mPV and mcPV, as well as in a subset of patients enrolled in our RESET-SLE TM trial.
We are not actively enrolling patients in the MusCAARTes TM trial at this time.
Subjects in our RESET TM trials, except for our RESET-PV ® trial and a subset of patients enrolled in our RESET-SLE TM trial, will be treated with a standard preconditioning regimen consisting of fludarabine and cyclophosphamide prior to rese-cel infusion.
Because rese-cel is the first CAR T product candidate that we are testing in the clinic, we may experience preliminary complications surrounding trial design, protocol establishment and execution, establishing trial protocols, patient recruitment and enrollment, quality and supply of clinical doses, or safety issues.
Additionally, a failure of our rese-cel RESET TM clinical trial could influence physicians’ and regulators’ opinions with regard to the viability of our CABA ® platform more broadly, particularly if treatment-related side effects are observed.
If treatment-related side effects are observed with the administration of rese-cel, or if they are viewed as less safe, potent or pure than other therapies, our ability to develop other CAR T cell therapies may be significantly harmed.
These regulatory authorities could change their position, including, on the acceptability of our trial designs or selection of comparator or clinical endpoints, which may require us to complete additional clinical trials or impose stricter approval conditions than we currently expect.
If the FDA disagrees with, or subsequently revises or withdraws its prior feedback regarding our clinical endpoints or how to measure clinically meaningful significance, then even if we meet clinical endpoints we may be prevented or delayed in obtaining marketing approval for such product candidates.
Our registrational trials may rely on a single-arm design and an external control; if regulatory authorities determine that the external control is unsuitable, we may be unable to obtain approval on our anticipated timelines, or at all.
We plan to conduct registrational trials using an open-label, single-arm design with an external comparator(s) rather than a blinded, randomized controlled trial.
As a result, data generated from these studies may be subject to heightened FDA scrutiny regarding potential bias, confounding variables, and the overall reliability of treatment-effect estimates.
In externally controlled trials, outcomes for patients who receive the investigational therapy according to the trial protocol are compared with outcomes from individuals who did not receive the investigational therapy and who are external to the trial.
External controls may be historical (from an earlier time period) or concurrent (collected during the same time period in a different setting), and may be derived from real‑world data sources such as patient registries, electronic health records, or medical claims.
For example, in our RESET-Myositis ® program for rese-cel, we intend to conduct a single-arm registrational trial in patients with dermatomyositis or antisynthetase syndrome evaluating a 16-week primary endpoint—defined as achievement of a moderate or major Total Improvement Score while off immunomodulators and on no or low‑dose steroids—and we intend to rely on a retrospective analysis of a myositis patient registry to estimate control response rates.
Use of a registry dataset introduces risks, including whether the dataset is sufficiently comparable to our trial population and whether key clinical and demographic variables are assessed consistently.
If the FDA disagrees with, or subsequently revises or withdraws its prior feedback regarding the suitability of our trial design, analytical methods, or the external control dataset, the FDA may require additional data, extended follow-up, alternative endpoints, or a randomized controlled trial.
Any of these outcomes could substantially delay or prevent regulatory approval.
The FDA has highlighted multiple risks associated with the use of external controls, including the potential for confounding and bias arising from, among other factors: temporal changes in standard of care; geographic differences in treatment practices or access to care; heterogeneity in diagnostic criteria; differences in prognostic indicators; variations in background therapies; differing clinical characteristics and responses to standard of care among patients with different disease subtypes; differing assessment schedules or endpoint definitions; missing data; and selection bias in the external dataset.
The FDA also generally expects patient-level access to external datasets and robust, pre-specified statistical analysis plans.
Even with such plans, as well as propensity methods and sensitivity analyses, these approaches may insufficiently mitigate confounding and bias in the view of the FDA.
If our external control dataset, its pre-specification, or our planned analyses are viewed as inadequate, the FDA may determine that our single-arm registrational trial does not constitute an “adequate and well‑controlled” investigation under applicable regulations, and may make such determination even where we believe that we have previously aligned with the FDA on the design of the registrational trial.
The FDA may also determine that any patient registry we use—including the myositis registry supporting our RESET-Myositis ® cohort—is unsuitable as an external control.
In March 2026, FDA noted that concerns with the use of a registry include potential differences between the enrolled study population and registry population for the RESET-Myositis ® cohort (e.g. diagnosis classification and refractory definition) and missing data as well as other criteria established by FDA guidance for industry, and that such details are needed in order to assess suitability of the proposed registry as an external control.
In addition, FDA has recently issued Complete Response Letters or changed its feedback to sponsors in pre-BLA meetings citing concerns with external controls such as potential bias and design flaws, including eligibility criteria, endpoints, and timing of assessments not being closely aligned between trial population and the external dataset.
If the FDA reaches similar conclusions in our case, it could reject our comparative analyses, request confirmatory data, or require a randomized trial, resulting in significant delays, increased costs, or failure to obtain approval.
Even if our clinical data and statistical analyses comparing our data to an external control—such as a myositis registry—demonstrate favorable evidence of the investigational candidate’s effectiveness, the FDA may still determine that such evidence is insufficient to support approval.
This could occur for a variety of reasons, including unfavorable interpretation of comparative analyses, perceived differences between the clinical and external datasets, questions regarding the adequacy of our sensitivity analyses, or concerns about the absence of additional control sources.
Similarly, while we believe rese-cel has a similar overall design to the construct used for the patients in the Nature Medicine, Lancet, Annals of Rheumatic Diseases, and Rheumatology publications, those studies involved a small number of patients, and a different product candidate, and the initial clinical results observed in those studies may not be predictive of clinical trial results with rese-cel or any of our other product candidates.
Additionally, because those studies are not our own, we may not have access to accurate follow-up information or peer-reviewed results.
Whether or not it obtains FDA approval for a product, an applicant must obtain the necessary approvals by the comparable foreign regulatory authorities before commencing clinical trials or marketing of the product in those countries or jurisdictions.
For example, the process governing approval of medicinal products in the European Union generally follows the same lines as in the United States but can differ in significant ways.
It entails the satisfactory completion of preclinical studies and adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication.
It also requires the submission of a marketing authorization application to the EMA (for products within the scope of the centralized marketing authorization procedure) and the granting of a marketing authorization by the European Commission before the product can be marketed and sold in the European Union.

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Gone since FY2024

In addition, we do not know the doses to be evaluated in pivotal trials or, if licensed, commercially.
For instance, subjects in our CAAR T clinical trials will be infused with our proposed therapies, and may possess strongly activating soluble antibodies, which are not present in oncology patients, and when they interact with our infused product candidates, could result in potential adverse side effects, such as CRS or ICANS.
In our clinical trials and other similarly designed cellular immunotherapies to treat cancer, there have been life threatening events related to ICANS and CRS requiring intense medical intervention, such as intubation or medications to support blood pressure, and in several cases, resulted in death.
We have observed events of CRS and ICANS in our ongoing rese-cel REstoring SElf-Tolerance, or RESET TM , trial.
Although we have completed multiple preclinical studies designed to screen for toxicity caused by unintended off-target recognition by the cell binding domain of the DSG3 CAAR, MuSK CAAR and rese-cel and intend to screen future CAR and CAAR candidates not yet tested in patients through preclinical studies, our product candidates may still recognize and react with one or more proteins unrelated to the intended surface immunoglobin target protein to which it is designed to link.
We performed similar preclinical studies for the MuSK CAAR and rese-cel and did not observe any confirmed off target activity for MuSK-CAART or rese-cel.
We implemented a preconditioning regimen in the DesCAARTes TM trial where certain subjects were pre-treated with IVIg and cyclophosphamide, and other patients were pre-treated with IVIg, cyclophosphamide, and fludarabine prior to DSG3-CAART infusion, have included planned dosing cohorts in the MusCAARTes TM trial where subjects are pre-treated with fludarabine and cyclophosphamide prior to MuSK-CAART infusion, and we have incorporated a lymphodepleting preconditioning regimen of fludarabine and cyclophosphamide in our RESET TM clinical trials.
We are evaluating rese-cel without preconditioning in our RESET-PV TM trial in patients with mPV and mcPV.
We will continue to evaluate emerging data from the MusCAARTes TM trial on an ongoing basis, as well as other relevant clinical trials in autoimmune disease, and may make additional modifications, as appropriate.
Subjects in our RESET TM trials, except for our RESET-PV TM trial, will be treated with a standard preconditioning regimen consisting of fludarabine and cyclophosphamide prior to rese-cel infusion.
Because rese-cel, DSG3-CAART and MuSK-CAART are the first three product candidates that we are testing in the clinic, we may experience preliminary complications surrounding trial design, protocol establishment and execution, establishing trial protocols, patient recruitment and enrollment, quality and supply of clinical doses, or safety issues.
Additionally, a failure of our clinical trials of DSG3-CAART, MuSK-CAART or rese-cel RESET TM trials could influence physicians’ and regulators’ opinions with regard to the viability of our CABA ® platform more broadly, particularly if treatment-related side effects are observed.
If treatment-related side effects are observed with the administration of DSG3-CAART, MuSK-CAART or rese-cel, or if they are viewed as less safe, potent or pure than other therapies, our ability to develop other CAAR T or CAR T cell therapies may be significantly harmed.
These regulatory authorities could change their position, including, on the acceptability of our trial designs or the clinical endpoints selected, which may require us to complete additional clinical trials or impose stricter approval conditions than we currently expect.
Similarly, while we believe rese-cel has a similar overall design to the construct used for the patients in the Nature Medicine, Lancet, Annals of Rheumatic Diseases, and Rheumatology publications, those studies involved a small number of patients, and a different product candidate, and the initial clinical results observed in those studies may not be predictive of clinical trial results with rese-cel or any of our other product candidates, additionally, because those studies are not our own, we may not have access to accurate follow-up information or peer-reviewed results.
Whether or not it obtains FDA approval for a product, an applicant will need to obtain the necessary approvals by the comparable foreign regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions.
For example, the process governing approval of medicinal products in the European Union generally follows the same lines as in the United States but can differ in significant ways as well.
It entails satisfactory completion of preclinical studies and adequate and well-controlled clinical trials to establish the safety and efficacy of the product for each proposed indication.
It also requires the submission to the relevant competent authorities of a marketing authorization application and granting of a marketing authorization by these authorities before the product can be marketed and sold in the European Union.
Our DesCAARTes TM trial, MusCAARTes TM trial, and RESET TM trials in SLE, myositis, SSc, gMG, MS and PV are designed as open-label trials.
For example, patients may use social media channels to report an alleged adverse event during a clinical trial.
When such disclosures occur, there is a risk that we fail to monitor and comply with applicable adverse event reporting obligations, or we may not be able to defend our business or the public’s legitimate interests in the face of the political and market pressures generated by social media due to restrictions on what we may say about our investigational products.
If any of these events were to occur or we otherwise fail to comply with applicable regulations, we could incur liability, face regulatory actions, or incur other harm to our business.
Events that may prevent successful or timely completion of clinical development include: • inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of clinical trials; • delays in sufficiently developing, characterizing or controlling a manufacturing process suitable for clinical trials; • delays in developing suitable assays for screening patients for eligibility for clinical trials with respect to certain product candidates; • delays in reaching a consensus with the FDA and other regulatory agencies on trial design; • delays in reaching agreement on acceptable terms with prospective CMOs, CROs and clinical study sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CMOs, CROs and clinical trial sites; • delays in obtaining required institutional review board, or IRB, approval at each clinical trial site; • imposition of a temporary or permanent clinical hold by regulatory agencies for a number of reasons, including after review of an IND submission or amendment, or equivalent application or amendment; as a result of a new safety finding that presents unreasonable risk to clinical trial participants; a negative finding from an inspection of our clinical study operations or study sites; developments on trials conducted by competitors for related technology or by those that rely on a similar construct, design and/or third-party research that raise FDA or other foreign regulatory authorities concerns about risk to patients of the technology or construct broadly, and/or negative public perception of the same; or if FDA or other foreign regulatory authorities find that the investigational protocol or plan is clearly deficient to meet its stated objectives; • delays in recruiting eligible patients to participate in our clinical trials, including pediatric patients who need parental consent; • delays in treating one or more patients, once enrolled, due to a patient’s inability to accommodate parts of the complex study procedures schedule; • difficulty collaborating with patient groups and investigators; • failure by our CROs, other third parties or us to adhere to clinical trial requirements and the potential termination of ongoing agreements with our CROs; • limitations on our recourse in our CRO relationship with Penn as compared to a CRO that is not an academic institution; • failure to perform in accordance with the FDA’s Good Clinical Practice, or GCP, requirements or applicable regulatory guidelines in other countries; • transfer of manufacturing processes to any new CMO or our own manufacturing facilities or any other development or commercialization partner for the manufacture of product candidates; • delays in having patients complete participation in a trial or return for post-treatment follow-up; • patients dropping out of a trial; • 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 trials of our product candidates being greater than we anticipate; • clinical trials of our product candidates producing negative or inconclusive results, which may result in our deciding, or regulators requiring us, to conduct additional clinical trials or abandon product development programs; • delays or failure to secure supply agreements with suitable raw material suppliers, or any failures by suppliers to meet our quantity or quality requirements for necessary raw materials; and • delays in manufacturing or inability to manufacture sufficient clinical supply (for example, due to capacity constraints, supply interruption, or the need to engineer the process to meet higher dose requirements), testing, releasing, validating or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing.
For our RESET TM , DSG3-CAART, MuSK-CAART and other planned clinical trials, we expect to continue to contract with academic medical centers and hospitals experienced in the assessment and management of toxicities arising during clinical trials.
We also expect the centers using rese-cel, DSG3-CAART, MuSK-CAART and our other product candidates, if licensed, on a commercial basis could have similar difficulty in managing adverse events.
Our DesCAARTes TM trial, our MusCAARTes TM trial, our RESET TM trials in SLE, myositis, SSc, gMG, PV and MS and any additional expected clinical trials for each of our product candidates will enroll a limited number of patients.
Since the number of patients that we plan to dose in our MusCAARTes TM trial, our RESET TM trials in SLE, myositis, SSc, gMG, PV and MS is small, and the number of patients in clinical trials for any future product candidates may be small, the results from such clinical trials, once completed, may be less reliable than results achieved in larger clinical trials, which may hinder our efforts to obtain regulatory approval for our product candidates.
In our RESET-PV TM trial, RESET-MS TM and our MusCAARTes TM trial, we plan to evaluate the toxicity profile of our product candidates and establish the recommended dose for the next clinical trial.
The preliminary results of clinical trials with smaller sample sizes, such as our DesCAARTes TM trial, our MusCAARTes TM trial and our RESET TM trials, as well as any clinical trials for future product candidates, can be disproportionately influenced by various biases associated with the conduct of small clinical trials, such as the potential failure of the smaller sample size to accurately depict the features of the broader patient population, which limits the ability to generalize the results across a broader community, thus making the clinical trial results less reliable than clinical trials with a larger number of patients.
If we conduct any future clinical trials of DSG3-CAART, MuSK-CAART, or rese-cel, we may not achieve a statistically significant result or the same level of statistical significance, if any, that we might have anticipated based on the results observed in our DesCAARTes TM trial, our MusCAARTes TM trial, and RESET TM trials, respectively.
Although we are the first and only company developing CAAR T drug candidates, we are one of several developing CAR T drug candidates for the treatment of autoimmune diseases where B cells may play a role in initiating or maintaining disease.
Specifically, while rituximab is the first drug to have received regulatory approval in the United States in over 60 years for the treatment of PV, the target indication for DSG3-CAART, and the indication we are evaluating in the RESET-PV TM study, we are aware that multiple biopharmaceutical companies have therapies in clinical development.
We are also aware of other biopharmaceutical companies developing therapies for MuSK MG, SLE, myositis, SSc, gMG and MS.
While we do not expect these product candidates to be directly competitive to our product candidates, even if we obtain regulatory approval of our product candidates, the availability and price of these other products could limit the demand and the price we are able to charge for our product candidates.
One of our core strategies is to pursue clinical development of additional product candidates beyond rese-cel, DSG3-CAART and MuSK-CAART.
We are highly dependent on our management, scientific, and medical personnel, including our Chief Executive Officer and President, our Scientific Advisory Board members, our President, Science and Technology, our Chief Medical Officer, and our Chief Financial Officer.
As of December 31, 2024, we had 160 full-time employees and two part-time employees.
Our operations, Penn’s operations, WuXi's operations and those of any CMOs, CROs and other contractors and consultants that we may engage could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured.
Additionally, the effect of global financial and economic conditions and geopolitical events, including the presidential transition in the United States, events or changes related thereto or political unrest or otherwise, or similar events, may have an impact on our business.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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