10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2018

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission File Number: 001-33004

Acer Therapeutics Inc.

(Exact name of registrant as specified in its charter)

Delaware	One Gateway Center, Suite 351 300 Washington Street	32-0426967
(State or other jurisdiction of	Newton, MA 02458	(I.R.S. Employer
Incorporation or organization)	(Address of principal executive	Identification No.)
	offices and zip code)

(844) 902-6100

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes  ☑  No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   ☑ Yes    ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No ☑

As of October 31, 2018, there were 10,052,988 shares of the issuer’s Common Stock outstanding.

ACER THERAPEUTICS INC.

For the three and nine months ended September 30, 2018

INDEX

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	1
	Condensed Consolidated Statements of Operations: For the three and nine months ended September 30, 2018 and 2017	2
	Condensed Consolidated Statements of Cash Flows: For the nine months ended September 30, 2018 and 2017	3
	Notes to Condensed Consolidated Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	21
Item 1A.	Risk Factors	21
Item 6.	Exhibits	54
Signatures		55

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

ACER THERAPEUTICS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30,			December 31,
	2018			2017
Assets
Current assets:
Cash and cash equivalents	$	46,185,410		$	15,644,355
Prepaid expenses		1,144,094			881,887
Total current assets		47,329,504			16,526,242
Property and equipment, net		131,288			62,984
Other assets:
Goodwill		7,647,267			7,647,267
In-process research and development		118,600			118,600
Other non-current assets		34,028			13,648
Total assets	$	55,260,687		$	24,368,741
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	595,438		$	95,873
Accrued expenses		1,559,519			1,937,331
Total liabilities		2,154,957			2,033,204
Commitments (Note 5)
Stockholders’ equity:
Preferred stock, $0.0001 par value at September 30, 2018 and no par    value at December 31, 2017; authorized 10,000,000 shares;    none issued and outstanding		—			—
Common stock, $0.0001 par value at September 30, 2018 and $0.01 par   value at December 31, 2017; authorized 150,000,000 shares; 10,052,988   and 7,497,433 shares issued and outstanding at September 30, 2018   and December 31, 2017, respectively		1,005			74,974
Additional paid-in capital		91,440,982			47,812,215
Accumulated deficit		(38,336,257	)		(25,551,652	)
Total stockholders’ equity		53,105,730			22,335,537
Total liabilities and stockholders’ equity	$	55,260,687		$	24,368,741

See notes to unaudited condensed consolidated financial statements.

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ACER THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2018			2017			2018			2017
Operating expenses:
Research and development	$	2,377,916		$	2,057,421		$	7,140,046		$	6,948,816
General and administrative		1,729,446			1,302,401			5,874,423			2,792,424
Total operating expenses		4,107,362			3,359,822			13,014,469			9,741,240
Loss from operations		(4,107,362	)		(3,359,822	)		(13,014,469	)		(9,741,240	)
Other income (expense):
Interest income		138,671			2,993			205,916			4,819
Interest expense		—			(120,229	)		—			(242,982	)
Loss on disposal of asset		—			(967	)		—			(967	)
Foreign currency transaction gain		3,180			—			23,948			—
Total other income (expense), net		141,851			(118,203	)		229,864			(239,130	)
Net loss	$	(3,965,511	)	$	(3,478,025	)	$	(12,784,605	)	$	(9,980,370	)
Net loss per share - basic and diluted	$	(0.43	)	$	(1.09	)	$	(1.59	)	$	(3.69	)
Weighted average common shares outstanding - basic and diluted		9,136,321			3,199,796			8,049,732			2,702,678

See notes to unaudited condensed consolidated financial statements.

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ACER THERAPEUTICS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

(Unaudited)

	Nine Months Ended September 30,
	2018			2017
Cash flows from operating activities:
Net loss	$	(12,784,605	)	$	(9,980,370	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense		—			242,982
Share-based compensation		931,517			136,617
Depreciation		16,624			2,711
Loss on disposal of property and equipment		—			967
Write-off of deferred financing costs		—			1,901
Changes in operating assets and liabilities
Prepaid expenses		(262,207	)		(291,703	)
Accounts payable		499,566			156,029
Accrued expenses		(377,813	)		(157,890	)
Other non-current assets		(20,380	)		—
Net cash used in operating activities		(11,997,298	)		(9,888,756	)
Cash flows from investing activities:
Cash acquired in Merger, net of payment in lieu of fractional shares		—			1,030,123
Purchase of property and equipment		(84,928	)		(2,523	)
Net cash (used in) provided by investing activities		(84,928	)		1,027,600
Cash flows from financing activities:
Proceeds from the issuance of common stock, net of issuance costs		42,623,281			10,000,000
Deferred financing costs		—			(68,530	)
Proceeds from convertible notes payable		—			5,500,000
Net cash provided by financing activities		42,623,281			15,431,470
Net increase in cash and cash equivalents		30,541,055			6,570,314
Cash and cash equivalents, beginning of period		15,644,355			1,834,018
Cash and cash equivalents, end of period	$	46,185,410		$	8,404,332
Supplemental non-cash financing transactions:
Accretion of issuance costs on Series A Convertible Redeemable    Preferred stock	$	—		$	51,943
Accretion of issuance costs on Series B Convertible Redeemable    Preferred stock	$	—		$	127,780
Conversion of Series A Convertible Redeemable Preferred stock to   common stock	$	—		$	4,166,164
Conversion of Series B Convertible Redeemable Preferred stock to   common stock	$	—		$	8,149,995
Conversion of convertible notes payable and accrued interest to common stock	$	—		$	5,674,452
Issuance of common stock in Merger (Note 1)	$	—		$	6,978,916

See notes to unaudited condensed consolidated financial statements.

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ACER THERAPEUTICS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018

(Unaudited)

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Business

Acer Therapeutics Inc., a Delaware corporation (the “Company”), formerly known as Opexa Therapeutics, Inc. (the “Registrant”), is a pharmaceutical company focused on the acquisition, development, and commercialization of therapies for patients with serious rare and ultra-rare diseases with critical unmet medical need. The Company’s late-stage clinical pipeline includes two candidates for severe genetic disorders: EDSIVO™ (celiprolol) for vascular Ehlers-Danlos syndrome (“vEDS”), and ACER-001 (a fully taste-masked, immediate release formulation of sodium phenylbutyrate) for urea cycle disorders (“UCD”) and Maple Syrup Urine Disease (“MSUD”). There are no FDA-approved drugs for vEDS and MSUD and limited options for UCD, which collectively impact approximately 7,000 patients in the United States. The Company’s products have clinical proof-of-concept and mechanistic differentiation, and it intends to seek approval for them in the U.S. by using the regulatory pathway established under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act, or FFDCA, that allows an applicant to rely at least in part on third-party data for approval, which may expedite the preparation, submission, and approval of a marketing application.

Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company has not generated any product revenue to date and may never generate any product revenue in the future.

Merger and Reverse Stock Split

On September 19, 2017, the Registrant completed its business combination with Acer Therapeutics Inc., a Delaware corporation (“Private Acer”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of June 30, 2017, by and among the Registrant, Opexa Merger Sub, Inc. (“Merger Sub”) and Private Acer (the “Merger Agreement”), pursuant to which Merger Sub merged with and into Private Acer, with Private Acer surviving as a wholly-owned subsidiary of the Registrant (the “Merger”). This transaction was approved by the Registrant’s stockholders at a special meeting of its stockholders on September 19, 2017. Also on September 19, 2017, in connection with, and prior to the completion of, the Merger, the Registrant effected a 1-for-10.355527 reverse stock split of its then outstanding common stock (the “Reverse Split”) and immediately following the Merger, the Registrant changed its name to “Acer Therapeutics Inc.” pursuant to amendments to its certificate of formation filed with the Texas Secretary of State on September 19, 2017. All share numbers have been adjusted to reflect the Reverse Split.

Following the completion of the Merger, the business conducted by the Registrant became primarily the business conducted by Private Acer, which is a pharmaceutical company that acquires, develops and intends to commercialize therapies for patients with serious rare and ultra-rare diseases with critical unmet medical need.

Delaware Reincorporation and Subsidiary Merger

On May 15, 2018, the Company changed its state of incorporation from the State of Texas to the State of Delaware (the “Reincorporation”) pursuant to a plan of conversion, dated May 15, 2018.  The Company filed the following instruments on May 15, 2018 to effect the Reincorporation:  (i) a certificate of conversion with the Texas Secretary of State; (ii) a certificate of conversion with the Delaware Secretary of State; and (iii) a certificate of incorporation with the Delaware Secretary of State.  Pursuant to the plan of conversion, the Company also adopted new bylaws, which became effective with the Reincorporation.  The Reincorporation was approved by the Company’s stockholders at its annual meeting on May 14, 2018.  Immediately following the Reincorporation, the Company eliminated its holding company structure by merging its wholly-owned subsidiary Private Acer with and into the Company (the “Subsidiary Merger”).  The Company was the surviving corporation in connection with the Subsidiary Merger.  As the Delaware certificate of incorporation used the placeholder name of “Acer Reincorporation, Inc.” due to “Acer Therapeutics Inc.” already being in existence in Delaware as Private Acer, in connection with the Subsidiary Merger the Company changed its name to “Acer Therapeutics Inc.” pursuant to a certificate of ownership and merger filed with the Delaware Secretary of State on May 15, 2018. As a result of the reincorporation, the par value of the Company’s common stock was reduced to $0.0001 from $0.01.

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Basis of Presentation

Accounting principles generally accepted in the United States (GAAP) require that a company whose security holders retain the majority voting interest in the combined business be treated as the acquirer for financial reporting purposes. Accordingly, the Merger was accounted for as a reverse acquisition whereby Private Acer was treated as the acquirer for accounting and financial reporting purposes. Private Acer was incorporated on December 26, 2013, as part of a reorganization whereby Acer Therapeutics, LLC was converted into a corporation organized under the laws of the State of Delaware.

The accompanying condensed consolidated financial statements are of (i) Private Acer up to September 18, 2017, (ii) the Registrant and its wholly-owned subsidiary Private Acer for the period beginning on September 19, 2017, and (iii) the Registrant for the period beginning on May 15, 2018.

All intercompany balances and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in conformity with GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). The accompanying condensed consolidated financial statements for the three and nine months ended September 30, 2018, have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial position as of September 30, 2018, the results of operations for the three and nine months ended September 30, 2018 and 2017, and the cash flows for the nine months ended September 30, 2018 and 2017. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other future annual or interim period. The condensed consolidated balance sheet as of December 31, 2017 included herein was derived from the audited consolidated financial statements as of that date. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its 2017 Annual Report on Form 10-K.

2. SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described in Note 2, “Significant Accounting Policies,” in its 2017 Annual Report on Form 10-K.

Share-Based Compensation

The Company records share-based payments at fair value. The measurement date for compensation expense related to employee awards is generally the date of the grant. The measurement date for compensation expense related to nonemployee awards is generally the date that the performance of the awards is completed and, until such time, the fair value of the awards is remeasured at the end of each reporting period. Accordingly, the ultimate expense is not fixed until such awards are vested. The fair value of awards, net of expected forfeitures, is recognized as an expense in the statement of operations over the requisite service period, which is generally the vesting period. The fair value of options is calculated using the Black-Scholes option pricing model. This option valuation model requires the use of assumptions including, among others, the volatility of stock price, the expected term of the option, and the risk-free interest rate.

The following assumptions were used to estimate the fair value of stock options granted during the nine-month period ending September 30, 2018 and 2017 using the Black-Scholes option pricing model:

	2018	2017
Risk-free interest rate	2.35% - 2.98%	1.83%
Expected life (years)	6.25	5.75
Volatility	60%	60%
Dividend rate	0%	0%

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Use of Estimates

The Company’s accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the condensed financial statements and reported amounts of revenues and expenses during the reporting period. Estimates having relatively higher significance include the accounting for acquisitions, stock-based compensation, and income taxes. Actual results could differ from those estimates and changes in estimates may occur.

Basic and Diluted Net Loss per Common Share

Basic and diluted net loss per common share is computed by dividing net loss in each period by the weighted average number of shares of common stock outstanding during such period. For the periods presented, common stock equivalents, consisting of options, convertible redeemable preferred stock and warrants, were not included in the calculation of the diluted loss per share because to do so would be anti-dilutive.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes new accounting and disclosure requirements for leases. FASB ASU No. 2016-02 requires lessees to classify most leases as either finance or operating leases and to initially recognize a lease liability and right-of-use asset. Entities may elect to account for certain short-term leases (with a term of one year or less) using a method similar to the current operating lease model. The statements of operations will include, for finance leases, separate recognition of interest on the lease liability and amortization of the right-of-use asset and for operating leases, a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. While the Company is in the early stages of its implementation process for FASB ASU No. 2016-02 and has not yet determined its impact on its consolidated financial position or results of operations, these leases would potentially be required to be presented on the balance sheet in accordance with the requirements of FASB ASU No. 2016-02, which is effective for annual reporting periods beginning after December 15, 2018, including interim periods therein, with early adoption permitted. FASB ASU No. 2016-02 must be applied using a modified retrospective approach, which requires the recognition and measurement of leases at the beginning of the earliest period presented, with certain practical expedients available.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350).  This ASU eliminates step 2 from the goodwill impairment test by comparing the fair value of a reporting unit with the carrying amount of the reporting unit.  If the carrying amount exceeds the fair value, an impairment charge for the excess is recorded. The amendments of this ASU are effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.  The Company is currently evaluating the impact of the adoption of this ASU on the consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting. The purpose of this amendment is to address aspects of the accounting for nonemployee share-based payment transactions. The amendments in this ASU are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company does not believe that this guidance will have a material impact on its consolidated results of operations, financial position or disclosures.

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
Computer hardware and software	$	46,564		$	16,555
Leasehold improvements		7,648			7,968
Furniture and fixtures		97,742			42,503
Subtotal property and equipment, gross		151,954			67,026
Less accumulated depreciation		(20,666	)		(4,042	)
Property and equipment, net	$	131,288		$	62,984

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4. ACCRUED EXPENSES

Accrued expenses consisted of the following at September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Accrued license fees	$	791,820	$	817,578
Accrued pre-commercial costs		—		341,159
Accrued consulting		205,290		102,156
Accrued contract research		137,318		99,140
Accrued miscellaneous expenses		51,394		73,348
Accrued contract manufacturing		91,363		218,108
Accrued audit and tax		142,715		111,250
Accrued legal		139,619		174,592
	$	1,559,519	$	1,937,331

5. COMMITMENTS

Litigation

From time to time, the Company may become involved in litigation or proceedings relating to claims arising from the ordinary course of business.

On September 27, 2017, Piper Jaffray & Co. (“Piper”) filed a lawsuit against Private Acer, Piper Jaffray & Co. v. Acer Therapeutics Inc., Index No. 656055/2017, in the Supreme Court of the State of New York, County of New York. The complaint alleges that Private Acer breached its obligations to Piper pursuant to an August 30, 2016 engagement letter between the parties and an April 28, 2017 addendum thereto by failing to pay Piper (i) a fee of $1,097,207 in connection with the financing which closed on September 19, 2017 for aggregate consideration of approximately $15.7 million and (ii) $67,496 in reimbursement for expenses incurred by Piper pursuant to the engagement letter.  On November 10, 2017, Private Acer filed an answer and counterclaim in the lawsuit, denying Piper breach of contract allegation, asserting several defenses, and bringing several counterclaims, including claims for breach of contract and breach of the duty of good faith and fair dealing.  Piper filed a reply to the counterclaims denying the essential allegations, and discovery has commenced. The Company has not recorded a liability as of September 30, 2018, because a potential loss is not probable or reasonably estimable given the preliminary nature of the proceedings.

Newton Lease

The Company entered into a Lease Agreement effective March 6, 2018 (the “Newton Lease”) with Commonwealth Development LLC, as trustee of the Gateway Realty Trust (the “Newton Landlord”). Pursuant to the Newton Lease, the Company has leased certain premises consisting of 2,760 square feet of office space located at One Gateway Center, Suite 351, 300 Washington Street, Newton, Massachusetts (the “Newton Premises”) to serve as its corporate headquarters. The term of the Newton Lease commences on October 1, 2018 and expires on September 30, 2021.

The Newton Lease provides for base rent as follows:

Month of Term Under Newton Lease	Monthly Base Rent
1 to 12	$ 8,480
13 to 24	$ 8,710
25 to 36	$ 8,940

The Company’s remaining commitment for rent under the Newton Lease is $313,560. In addition, the Company is required to share in certain taxes and operating expenses of the Newton Premises.

Bend Lease

The Company entered into a Triple Net Lease (the “Bend Lease”) effective April 1, 2018 with Eastern Western Corp. (the “Bend Landlord”). Pursuant to the Bend Lease, the Company has leased certain premises consisting of 2,288 square feet of office space located at 1000 NW Wall Street, Suite 220, Bend, Oregon (the “Bend Premises”) to serve as a satellite facility. The term of the Bend Lease commenced on April 1, 2018 and expires on March 31, 2021 (the “Bend Term”). The Company has an option to extend

7

the Bend Term for up to two additional periods of three years and a right of first refusal to lease an additional suite in the same building.

The Bend Lease provides for base rent as follows:

Month of Term Under Bend Lease	Monthly Base Rent
1 to 12	$ 4,004
13 to 24	$ 4,124
25 to 36	$ 4,248

The Company’s remaining commitment at September 30, 2018 for rent under the Bend Lease is $124,488. In addition, the Company is required to share in certain taxes and operating expenses of the Bend Premises.

License Agreement

On August 3, 2016, Private Acer entered into an agreement with Assistance Publique—Hôpitaux de Paris, Hôpital Européen Georges Pompidou (“AP-HP”) whereby the Company acquired the exclusive worldwide rights to access and use pivotal clinical trial data from a multicenter, prospective, randomized, open trial related to the use of celiprolol for the treatment of vEDS patients. The Company is using this data to support its submission of a new drug application (“NDA”) for EDSIVOTM for the treatment of vEDS. The agreement requires the Company to make certain upfront payments to AP-HP, reimburse certain of AP-HP’s costs, make payments upon achievement of defined milestones and pay low single digit percent royalties on net sales of celiprolol over the royalty term.

On September 19, 2018, the Company entered into a License Agreement for Development and Exploitation with AP-HP to acquire the exclusive worldwide intellectual property rights to three European patent applications relating to certain uses of celiprolol including (i) the optimal dose of celiprolol in treating vEDS patients, (ii) the use of celiprolol during pregnancy and (iii) the use of celiprolol to treat kyphoscoliotic Ehlers-Danlos syndrome (type VI).  Pursuant to the agreement, the Company will reimburse AP-HP for certain costs and will pay annual maintenance fee payments.  Subject to a minimum royalty amount, the Company will also pay royalty payments on annual net sales of celiprolol during the royalty term in the low single digit percent range, depending upon whether there is a valid claim of a licensed patent. Under the agreement, the Company will control and pay the costs of ongoing patent prosecution and maintenance for the licensed applications. The term of the agreement expires on a country-by-country basis upon the later of (a) 15 years after the first commercial sale of celiprolol in any country in which there is no valid claim of a licensed patent, and (b) upon the last to occur of (i) expiration or invalidation of the last valid claim in any country, (ii) expiration of the supplementary protection certificates granted to celiprolol and (iii) expiration of the market exclusivity period conferred by obtaining an AMM orpheline (orphan Marketing Authorization), a PUMA (Paediatric Use Marketing Authorization) or U.S. FDA orphan drug designation. The Company may terminate the agreement in its sole discretion upon written notice to AP-HP, and AP-HP may terminate the agreement in the event the Company fails to make the required payments after notice and opportunity to cure.  Additionally, the agreement will terminate if the Company terminates clinical development, marketing approval is withdrawn by the health or regulatory authorities in all countries, the Company ceases to do business or there is a procedure of winding-up by court decision against the Company. The Company subsequently filed three U.S. patent applications on this subject matter in October 2018.

On April 4, 2014, Private Acer obtained exclusive rights to patents and certain other intellectual property relating to ACER-001 and preclinical and clinical data, through an exclusive license agreement with Baylor College of Medicine (“BCM”). Under the terms of the agreement, as amended, the Company has worldwide exclusive rights to develop, manufacture, use, sell and import products incorporating the licensed intellectual property. The license agreement requires the Company to make upfront and annual payments to BCM, reimburse certain of BCM’s legal costs, make payments upon achievement of defined milestones, and pay royalties on net sales of any developed product over the royalty term.

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6. STOCKHOLDERS’ EQUITY

Underwritten Public Offering

On August 3, 2018, the Company completed an underwritten public offering of 2,555,555 shares of common stock, including 333,333 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares to cover over-allotments, at a public offering price of $18.00 per share. The Company received aggregate net proceeds of approximately $42.7 million, after deducting underwriting discounts, commissions and offering-related expenses of approximately $3.3 million.

2018 Stock Incentive Plan

The Company’s 2018 Stock Incentive Plan (the “2018 Plan”), adopted on May 14, 2018, provides for the grant of up to 500,000 shares of common stock as stock options, restricted stock, stock appreciation rights, restricted stock units, performance-based awards and cash-based awards that may be settled in cash, stock or other property to employees, executive officers, directors, and consultants.  

In addition to the 500,000 shares, the total number of shares reserved for issuance under the 2018 Plan also consists of the sum of the number of shares subject to outstanding awards under the Company’s 2010 Stock Incentive Plan, as amended and restated (the “2010 Plan”), and the 2013 Stock Incentive Plan, as amended (the “2013 Plan”), as of the effective date of the 2018 Plan that are subsequently forfeited or terminated for any reason prior to being exercised or settled, plus the number of shares subject to vesting restrictions under the 2010 Plan and the 2013 Plan on the effective date of the 2018 Plan that are subsequently forfeited, plus the number of shares reserved but not issued or subject to outstanding grants under the 2010 Plan and the 2013 Plan as of the effective date of the 2018 Plan, up to a maximum of 635,170 shares in aggregate. In addition, the number of shares that have been authorized for issuance under the 2018 Plan is automatically increased on the first day of each fiscal year beginning on January 1, 2019, and ending on (and including) January 1, 2028, in an amount equal to the lesser of (i) 4% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, or (ii) another amount (including zero) determined by the Company’s Board. Any shares subject to awards granted under the 2018 Plan that are forfeited or terminated before being exercised or settled, or are not delivered to the participant because such award is settled in cash, will again become available for issuance under the 2018 Plan. Shares withheld to satisfy the grant, exercise price or tax withholding obligation related to an award will again become available for issuance under the 2018 Plan.  

The 2018 Plan is administered by the Company’s Board, which may in turn delegate authority to administer the plan to a committee such as the Compensation Committee, referred to herein as the 2018 Plan administrator. Subject to the terms of the 2018 Plan, the 2018 Plan administrator will determine recipients, the number of shares or amount of cash subject to awards to be granted, whether an option is to be an incentive stock options or non-incentive stock options and the terms and conditions of the stock awards, including the period of their exercisability and vesting. Subject to the limitations set forth below, the 2018 Plan administrator will also determine the exercise price of options granted under the 2018 Plan. The 2018 Plan expressly provides that, without the approval of the stockholders, the 2018 Plan administrator does not have the authority to reduce the exercise price of any outstanding stock options or stock appreciation rights under the 2018 Plan (except in connection with certain corporate transactions, such as stock splits, certain dividends, recapitalizations, reorganizations, mergers, spin-offs and the like), or cancel any outstanding underwater stock options or stock appreciation rights in exchange for cash or new stock awards under the 2018 Plan.

Option awards are generally granted with an exercise price equal to the fair value of the common stock at the date of grant and have contractual terms of 10 years. Stock options granted to executive officers and employees generally vest over a four-year period, with 25% vesting on the one-year anniversary of the grant date and the remaining 75% vesting quarterly over the remaining three years, assuming continued service, and with vesting acceleration in full immediately prior to a change in control.  At September 30, 2018, 372,072 shares of common stock remained available for the grant of future awards under the 2018 Plan.

2013 Stock Incentive Plan

Private Acer’s 2013 Plan, as amended, which was assumed by the Company in connection with the Merger, provides for the issuance of up to 165,000 shares of common stock as incentive or non-qualified stock options and/or restricted common stock to employees, officers, directors, consultants and advisers. Option awards are generally granted with an exercise price equal to the fair value of the common stock at the date of grant and have contractual terms of 10 years. At September 30, 2018, all shares available under the 2013 Plan were subject to outstanding equity awards, and the Company does not intend to make any new awards under the 2013 Plan.

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2010 Stock Incentive Plan

The Company’s 2010 Plan provides for the grant of up to 470,170 shares of common stock as incentive or non-qualified stock options, stock appreciation rights, restricted stock units and/or restricted common stock to employees, officers, directors, consultants and advisers. Option awards are generally granted with an exercise price equal to the fair value of the common stock at the date of grant and have contractual terms of 10 years. At September 30, 2018, all shares available under the 2010 Plan were subject to outstanding equity awards, and the Company does not intend to make any new awards under the 2010 Plan. 

A summary of option activity under the 2018 Plan, 2013 Plan and 2010 Plan for the nine months ended September 30, 2018, is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in millions)
Options outstanding at December 31, 2017		463,600	$	11.23	9.5
Granted		287,500	$	21.13
Options outstanding at September 30, 2018		751,100	$	15.02	9.0	$	11.9
Options exercisable at September 30, 2018		170,947	$	4.32	7.7	$	4.5

At September 30, 2018, there was approximately $5.2 million of unrecognized compensation expense related to the share-based compensation arrangements granted under all plans and the average remaining vesting period was 3.4 years. The weighted average grant date fair value of options granted during the nine months ended September 30, 2018 was $12.36. The amount of stock-based compensation expense recorded to research and development and to general and administrative is detailed in table below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Stock-based compensation
Research and development	$	179,930	$	99,847	$	515,584	$	118,233
General and administrative		172,786		6,151		415,933		18,384
	$	352,716	$	105,998	$	931,517	$	136,617

Warrants

A summary of warrant activity for the nine months ended September 30, 2018is presented below:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contract Term (# years)		Intrinsic Value
Outstanding and exercisable at December 31, 2017		317,630		$	123.61	0.54			—
Canceled/forfeited		(306,656	)	$	135.58
Outstanding and exercisable at September 30, 2018		10,974		$	124.27		0.02		—

On January 23, 2018, all outstanding and unexercised Series J warrants to purchase an aggregate of 2,942 shares of common stock expired. On January 29, 2018, all outstanding and unexercised Series K warrants to purchase an aggregate of 2,262 shares of common stock expired. On April 9, 2018, all outstanding and unexercised Series M warrants to purchase an aggregate of 301,452 shares of common stock expired.

7. NET LOSS PER SHARE

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted net loss per share is the same as basic net loss per common share, since the effects of potentially dilutive securities are antidilutive.

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As of September 30, 2018 and 2017, the number of shares of common stock underlying potentially dilutive securities are comprised of:

	September 30,
	2018		2017
Warrants		10,974		317,630
Options to purchase common stock		751,100		165,000
Total		762,074		482,630

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition is as of September 30, 2018.  Our results of operations and cash flows should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto included elsewhere in this report and the audited consolidated financial statements and the notes thereto included in our Form 10-K for the year ended December 31, 2017.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements which are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements contained in this report, other than statements of historical fact, constitute “forward-looking statements.” The words “expects,” “believes,” “hopes,” “anticipates,” “estimates,” “may,” “could,” “intends,” “exploring,” “evaluating,” “progressing,” “proceeding” and similar expressions are intended to identify forward-looking statements.

These forward-looking statements do not constitute guarantees of future performance. Investors are cautioned that statements which are not strictly historical statements, including, without limitation, statements regarding current or future financial payments, costs, returns, royalties, performance and position, plans and objectives for future operations, plans and objectives for product development, plans and objectives for present and future clinical trials and results of such trials, plans and objectives for regulatory approval, litigation, intellectual property, product development, manufacturing plans and performance, management’s initiatives and strategies, and the development of our product candidates, including EDSIVO™ (celiprolol) and ACER-001, constitute forward-looking statements. Such forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. These risks and uncertainties include, but are not limited to, those risks discussed in “Risk Factors,” as well as, without limitation, risks associated with:

• the strategies, prospects, plans, expectations and objectives of management for future operations, including the anticipated timing of filings;

• the progress, scope or duration of the development of product candidates or programs;

• the benefits that may be derived from product candidates or the commercial or market opportunity in any target indication;

• our ability to protect our intellectual property rights;

• our anticipated operations, financial position, costs or expenses;

• statements regarding future economic conditions or performance;

• statements concerning proposed new products, services or developments;

• the expected benefits of and potential value created by the September 19, 2017 merger with Acer Therapeutics Inc., a Delaware corporation (the “Merger”), for our stockholders; and

• statements of belief and any statement of assumptions underlying any of the foregoing.

These forward-looking statements speak only as of the date made. We assume no obligation or undertaking to update any forward-looking statements to reflect any changes in expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. You should, however, review additional disclosures we make in the reports we file with the Securities and Exchange Commission, or SEC.

Overview

We are a pharmaceutical company focused on the acquisition, development, and commercialization of therapies for patients with serious rare and ultra-rare diseases with critical unmet medical need. Our late-stage clinical pipeline includes two candidates for severe genetic disorders: EDSIVO™ (celiprolol) for vascular Ehlers-Danlos syndrome, or vEDS, and ACER-001 (a fully taste-masked, immediate release formulation of sodium phenylbutyrate) for urea cycle disorders, or UCD, and Maple Syrup Urine Disease, or MSUD. There are no FDA-approved drugs for vEDS and MSUD and limited options for UCD, which collectively impact approximately 7,000 patients in the United States. Our products have clinical proof-of-concept and mechanistic differentiation, and we intend to seek approval for them in the United States by using the regulatory pathway established under section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or FFDCA, that allows an applicant to rely at least in part on third-party data for approval, which may expedite the preparation, submission, and approval of a marketing application.

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Merger and Reverse Stock Split

On September 19, 2017, Acer Therapeutics Inc., a Texas corporation, formerly known as Opexa Therapeutics, Inc. (the “Registrant”), completed its business combination with Acer Therapeutics Inc., a Delaware corporation (“Private Acer”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of June 30, 2017, by and among the Registrant, Opexa Merger Sub, Inc. (“Merger Sub”) and Private Acer (the “Merger Agreement”), pursuant to which Merger Sub merged with and into Private Acer, with Private Acer surviving as a wholly-owned subsidiary of the Registrant (the “Merger”). This transaction was approved by the Registrant’s stockholders at a special meeting of its stockholders on September 19, 2017. Also on September 19, 2017, in connection with, and prior to the completion of, the Merger, the Registrant effected a 1-for-10.355527 reverse stock split of its then outstanding common stock (the “Reverse Split”) and immediately following the Merger, the Registrant changed its name to “Acer Therapeutics Inc.” pursuant to amendments to its certificate of formation filed with the Texas Secretary of State on September 19, 2017. All share numbers in this report have been adjusted to reflect the Reverse Split.

Following the completion of the Merger, the business conducted by the Registrant became primarily the business conducted by Private Acer, which is a pharmaceutical company that acquires, develops and intends to commercialize therapies for patients with serious rare and ultra-rare diseases with critical unmet medical need.

For accounting and financial reporting purposes, Private Acer was considered to have acquired the Registrant in the Merger. Private Acer was incorporated on December 26, 2013, as part of a reorganization whereby Acer Therapeutics, LLC was converted into a corporation organized under the laws of the State of Delaware.

Delaware Reincorporation and Subsidiary Merger

On May 15, 2018, we changed our state of incorporation from the State of Texas to the State of Delaware (the “Reincorporation”) pursuant to a plan of conversion, dated May 15, 2018.  We filed the following instruments on May 15, 2018 to effect the Reincorporation:  (i) a certificate of conversion with the Texas Secretary of State; (ii) a certificate of conversion with the Delaware Secretary of State; and (iii) a certificate of incorporation with the Delaware Secretary of State.  Pursuant to the plan of conversion, we also adopted new bylaws, which became effective with the Reincorporation.  The Reincorporation was approved by our stockholders at our annual meeting on May 14, 2018.  Immediately following the Reincorporation, we eliminated our holding company structure by merging our wholly-owned subsidiary Private Acer with and into the Company (the “Subsidiary Merger”).  The Company was the surviving corporation in connection with the Subsidiary Merger.  As the Delaware certificate of incorporation used the placeholder name of “Acer Reincorporation, Inc.” due to “Acer Therapeutics Inc.” already being in existence in Delaware as Private Acer, in connection with the Subsidiary Merger the Company changed its name to “Acer Therapeutics Inc.” pursuant to a certificate of ownership and merger filed with the Delaware Secretary of State on May 15, 2018. As a result of the reincorporation, the par value of our common stock was reduced to $0.0001 from $0.01.

Revenue

We have no products approved for commercial sale and have not generated any revenue from product sales.

In the future, we may generate revenue by entering into licensing arrangements or strategic alliances. To the extent we enter into any license arrangements or strategic alliances, we expect that any revenue we generate will fluctuate from quarter-to-quarter as a result of the timing of achievement of pre-clinical, clinical, regulatory and commercialization milestones, if at all, the timing and amount of payments relating to such milestones, as well as the extent to which any products are approved and successfully commercialized.

If our product candidates are not developed in a timely manner, if regulatory approval is not obtained for them, or if such product candidates are not commercialized, our ability to generate future revenue, and our results of operations and financial position, would be adversely affected.

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Research and Development Expenses

Research and development expenses consist of costs associated with the development of our product candidates. Our research and development expenses include:

• employee-related expenses, including salaries, benefits, and stock-based compensation;

• external research and development expenses incurred under arrangements with third parties, such as contract research organizations, contract manufacturing organizations, consultants, and our scientific advisors; and

• license fees.

We expense research and development costs as incurred. We account for nonrefundable advance payments for goods and services that will be used in future research and development activities as expenses when the service has been performed or when the goods have been received.

At any time, we are working on multiple programs, primarily within our therapeutic areas of focus. Our internal resources, employees, and infrastructure are not directly tied to any one research or drug discovery project and are typically deployed across multiple projects. As such, we do not generate meaningful information regarding the costs incurred for these early stage research and drug discovery programs on a specific project basis. However, we are currently spending the vast majority of our research and development resources on our two lead development programs.

Since Private Acer’s inception in December 2013, we have spent a total of approximately $23.2 million in research and development expenses through September 30, 2018. Of the approximately $23.2 million in research and development expenses, approximately $20.3 million is directly related to EDSIVO^TM and approximately $2.6 million is directly related to ACER-001. Other research and development costs, such as travel costs, have not been identified as directly attributable to a specific research and development project.

We expect our research and development expenses to increase for the foreseeable future as we continue to conduct our ongoing regulatory activities, initiate new preclinical and clinical trials, and build upon our pipeline. The process of conducting clinical trials and pre-clinical studies necessary to obtain regulatory approval, preparing to seek regulatory approval, and preparing for commercialization in the event of regulatory approval, is costly and time-consuming. We may never succeed in achieving marketing approval for any of our product candidates.

Successful development of product candidates is highly uncertain and may not result in approved products. Completion dates and completion costs can vary significantly for each product candidate and are difficult to predict. We anticipate we will make determinations as to which programs to pursue and how much funding to direct to each program on an ongoing basis in response to our ability to enter into new strategic alliances with respect to each program or potential product candidate, the scientific and clinical success of each product candidate, the timing and ability to obtain regulatory approval for our product candidates (if any), and ongoing assessments as to each product candidate’s commercial potential. We will need to raise additional capital and may seek to do so through public or private equity or debt financings, government or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements or a combination of these approaches. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements as and when needed would have a negative impact on our financial condition and our ability to develop our product candidates and pursue regulatory approval.

General and Administrative Expenses

General and administrative expenses consist primarily of employee-related expenses, including salaries, benefits, and stock-based compensation; as well as professional fees for legal, business consulting, auditing, and tax services. We expect that general and administrative expenses will increase in the future as we expand our operating activities. Additionally, in support of our submission of a new drug application (“NDA”) for EDSIVO^TM for the treatment of vEDS, we expect to begin to incur significant expenses associated with preparing for the commercial launch, if approved by the FDA, of EDSIVO^TM, or “pre-commercial” costs.

We expect to incur significant additional costs associated with being a publicly-traded company. These increases will likely include additional employees-related expenses, legal fees, costs associated with Sarbanes-Oxley compliance, accounting fees, and directors’ and officers’ liability insurance premiums.

Other income (expense), net

Other income (expense), net consists primarily of interest income and expense, and various income or expense items of a non-recurring nature. We earn interest income from interest-bearing accounts and money market funds for cash and cash equivalents.

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Interest expense has historically been comprised of interest and other related non-cash charges incurred under convertible notes payable with our investors. Additionally, we record as part of other income (expense), net, transactional gains and losses on foreign currency denominated assets and liabilities when they are revalued each period due to changes in underlying exchange rates.

Critical Accounting Polices and Estimates

This management’s discussion and analysis of financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these condensed consolidated financial statements requires our management to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses. On an ongoing basis, we evaluate these estimates and judgments. We base our estimates on historical experience and on various assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially from these estimates. We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving our judgments and estimates. There have been no material changes to our critical accounting policies during the nine months ended September 30, 2018. Please refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the fiscal year ended December 31, 2017 for a discussion of our critical accounting policies and significant judgments and estimates.

Business Combinations

Assets acquired and liabilities assumed as part of a business acquisition are generally recorded at their fair value at the date of acquisition. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. Accounting for business acquisitions may require management to make judgments and estimates as to fair value of consideration transferred. This judgment and determination may affect the amount of consideration paid that is allocable to assets and liabilities acquired in the business purchase transaction.

Goodwill

Goodwill represents the excess of cost over fair value of net assets acquired in the Merger and in our prior acquisition of Anchor Therapeutics, Inc. (“Anchor”). We evaluate the recoverability of goodwill annually or more frequently, if events or changes in circumstances indicate that the carrying value of goodwill might be impaired. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. This step serves as the basis for determining whether it is necessary to perform the two-step goodwill impairment test. If we determine it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we will perform the two-step test. The two-step test first compares the fair value of the reporting unit to its carrying value. If the fair value exceeds the carrying value, no impairment exists, and the second step is not performed. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded as part of the second step of the test, to the extent that the implied fair value of the reporting unit goodwill is less than the carrying value.

We review intangible assets annually to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment. If the carrying value of an asset exceeds its undiscounted cash flows, we write down the carrying value of the intangible asset to its fair value in the period identified.

In-process Research and Development

In-process research and development (“IPRD”) represents the value of the three G-protein-coupled receptor targets (the “Targets”) from the GPCR Target Pools of Anchor that we obtained the rights to in the March 20, 2015, acquisition of Anchor by Private Acer. IPRD was recorded at fair value in conjunction with the Anchor acquisition during 2015 and is an indefinite-lived intangible asset. As such, it is tested at least annually for impairment.

Stock-Based Compensation

We account for stock-based compensation expense related to stock options granted to employees and members of our board of directors under our 2018 Stock Incentive Plan, 2013 Stock Incentive Plan, as amended, and our 2010 Stock Incentive Plan, as amended and restated, by estimating the fair value of each stock option or award on the date of grant using the Black-Scholes model. We recognize stock-based compensation expense on a straight-line basis over the vesting term.

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We account for stock options issued to non-employees by valuing the award using an option pricing model and re-measuring such awards to the current fair value until the awards are vested or a performance commitment has otherwise been reached.

Research and Development

Research and development costs are expensed as incurred and include compensation and related benefits, license fees and outside contracted research and manufacturing consultants. We often make nonrefundable advance payments for goods and services that will be used in future research and development activities. These payments are capitalized and recorded as an expense in the period that we receive the goods or when the services are performed.

Clinical Trial and Pre-Clinical Study Accruals

We make estimates of accrued expenses as of each balance sheet date in our consolidated financial statements based on certain facts and circumstances at that time. Our accrued expenses for pre-clinical studies and clinical trials are based on estimates of costs incurred for services provided by contract research organizations (“CRO”), manufacturing organizations, and for other trial-related activities. Payments under our agreements with external service providers depend on a number of factors such as site initiation, patient screening, enrollment, delivery of reports, and other events. In accruing for these activities, we obtain information from various sources and estimate the level of effort or expense allocated to each period. Adjustments to our research and development expenses may be necessary in future periods as our estimates change. As these activities are generally material to our overall financial statements, subsequent changes in estimates may result in a material change in our accruals.

Results of Operations

Comparison of the three months ended September 30, 2018 and 2017

The following table summarizes our results of operations for the three months ended September 30, 2018 and 2017:

	Three Months Ended September 30,
	2018			2017			$ Change			% Change
Research and development	$	2,377,916		$	2,057,421		$	320,495			16	%
General and administrative		1,729,446			1,302,401			427,045			33	%
Other income (expense), net		141,851			(118,203	)		260,054			(220	)%
Net loss		(3,965,511	)		(3,478,025	)		(487,486	)		14	%

Research and Development Expenses

Research and development expense was approximately $2.4 million during the three months ended September 30, 2018, as compared to approximately $2.1 million during the three months ended September 30, 2017. This increase of approximately $0.3 million was principally due to an increase in spending for employee-related costs and regulatory consulting, partially offset by a decrease in contract research and manufacturing services, all relating to EDSIVO^TM.  Research and development expense for the three months ended September 30, 2018, was comprised of approximately $2.2 million related to EDSIVO^TM, and $0.2 million related to ACER-001. Research and development expense for the three months ended September 30, 2017, was comprised of approximately $1.9 million related to EDSIVO^TM and approximately $0.1 million related to ACER-001.  Other research and development costs that have not been identified as directly attributable to a specific research and development project make up the balance of spending in this category.

General and Administrative Expenses

General and administrative expense was approximately $1.7 million for the three months ended September 30, 2018 as compared to approximately $1.3 million for the three months ended September 30, 2017. This increase of approximately $0.4 million was primarily due to an increase in employee-related costs, and pre-commercial costs, partially offset by lower legal and consulting related expenses.

Other Income (Expense), Net

Other income, net of approximately $0.1 million during the three months ended September 30, 2018, was primarily attributable to interest income and foreign exchange transaction gains. Other expense, net of approximately $0.1 million during the three months ended September 30, 2017, was primarily attributable to interest expense on convertible promissory notes payable.

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Comparison of the ninemonths ended September 30, 2018 and 2017

The following table summarizes our results of operations for the nine months ended September 30, 2018 and 2017:

	Nine Months Ended September 30,
	2018			2017			$ Change			% Change
Research and development	$	7,140,046		$	6,948,816		$	191,230			3	%
General and administrative		5,874,423			2,792,424			3,081,999			110	%
Other income (expense), net		229,864			(239,130	)		468,994			(196	)%
Net loss		(12,784,605	)		(9,980,370	)		(2,804,235	)		28	%

Research and Development Expenses

Research and development expense was approximately $7.1 million during the nine months ended September 30, 2018, as compared to approximately $6.9 million during the nine months ended September 30, 2017. This net increase of approximately $0.2 million was principally due to an increase in spending for employee-related costs and regulatory consulting, offset by reductions in spending for contract research and manufacturing services, all relating to EDSIVO^TM. Research and development expense for the nine months ended September 30, 2018, was comprised of approximately $6.7 million related to EDSIVO^TM, and approximately $0.3 million related to ACER-001. Research and development expense for the nine months ended September 30, 2017, was comprised of approximately $6.5 million related to EDSIVO^TM and approximately $0.3 million related to ACER-001.  Other research and development costs that have not been identified as directly attributable to a specific research and development project make up the balance of spending in this category.

General and Administrative Expenses

General and administrative expense was approximately $5.9 million for the nine months ended September 30, 2018 as compared to approximately $2.8 million for the nine months ended September 30, 2017. This increase of approximately $3.1 million was primarily due to an increase in employee-related costs and pre-commercial costs, slightly offset by a decrease in legal expenses.

Other Income (Expense), Net

Other income, net of approximately $0.2 million during the nine months ended September 30, 2018 was primarily attributable to interest income and foreign exchange transaction gains. Other expense, net of approximately $0.2 million during the nine months ended September 30, 2017 was primarily attributable to interest expense on convertible promissory notes payable.

Liquidity and Capital Resources

We have never been profitable and have incurred operating losses in each year since inception. From inception to September 30, 2018, we have raised net cash proceeds of approximately $81.7 million, primarily from common stock offerings, private placements of convertible preferred stock, and debt financings. On August 3, 2018, we completed an underwritten public offering of 2,555,555 shares of common stock, including 333,333 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares to cover over-allotments, at a public offering price of $18.00 per share. We received aggregate net proceeds of approximately $42.7 million, after deducting underwriting discounts, commissions and offering-related expenses of approximately $3.3 million. As of September 30, 2018, we had approximately $46.2 million in cash and cash equivalents. Our net loss was approximately $4.0 million and $12.8 million for the three and nine months ended September 30, 2018, respectively. As of September 30, 2018, we had an accumulated deficit of approximately $38.3 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development programs and from general and administrative costs associated with our operations.  

The following table shows a summary of our cash flows for the nine months ended September 30, 2018, and 2017:

	Nine Months Ended September 30,
	2018			2017
Net cash (used in) provided by:
Operating activities	$	(11,997,298	)	$	(9,888,756	)
Investing activities		(84,928	)		1,027,600
Financing activities		42,623,281			15,431,470
Net increase in cash and cash    equivalents	$	30,541,055		$	6,570,314

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Operating Activities

Cash used in operating activities was approximately $12.0 million for the nine months ended September 30, 2018, as compared to approximately $9.9 million for the nine months ended September 30, 2017. The increase of approximately $2.1 million was principally the result of an increase in net loss due to increased operating expense adjusted for non-cash items such as stock based compensation.

Investing Activities

Net cash used in investing activities during the nine months ended September 30, 2018, related to nominal purchases of computer equipment, and furniture and equipment. Net cash provided by investing activities during the nine months ended September 30, 2017, related to cash acquired in the Merger.

Financing Activities

Net cash provided by financing activities during the nine months ended September 30, 2018, consisted of approximately $42.7 of net proceeds from our offering of common stock in August 2018 offset by approximately $0.1 million of offering costs related to our December 2018 offering. Net cash provided by financing activities during the nine months ended September 30, 2017 consisted of $10.0 million from the issuance of common stock and $5.5 million from the issuance of convertible notes payable (which, together with $ 0.2million of accrued interest, was converted into common stock).

Future Capital Requirements

We have not generated any revenue from product sales. We do not know when, or if, we will generate any revenue from product sales. We do not expect to generate any revenue from product sales unless and until we obtain regulatory approval for and commercialize any of our product candidates. At the same time, we expect our expenses to increase in connection with our ongoing development and manufacturing activities, particularly as we continue the research, development, manufacture and clinical trials of, and seek regulatory approval for, our product candidates. In addition, subject to obtaining regulatory approval of any of our product candidates and thereafter successfully commercializing any such product candidates, we anticipate that we will need substantial additional funding in connection with our continuing operations.

As of September 30, 2018, we had approximately $46.2 million in cash and cash equivalents. Based on available resources, we believe that our cash and cash equivalents currently on hand are sufficient to fund our currently anticipated operating and capital requirements into the first half of 2020.

Our future capital requirements are difficult to forecast and will depend on many factors, including but not limited to:

• the number of programs we pursue;

• the costs associated with filing, outcome, and timing of regulatory approvals;

• the cost and timing of hiring new employees to support our continued growth;

• the costs and timing of having clinical supplies of our product candidates manufactured;

• the initiation and progress of pre-clinical studies and clinical trials for our product candidates;

• the terms and timing of any strategic alliance, licensing and other arrangements that we may establish;

• our ability to obtain adequate levels of financing to meet our operating plan; and

• the costs involved in patent filing, prosecution, and enforcement.

We expect our research and development expenses to substantially increase in connection with our ongoing activities, particularly as we advance our product candidates in or towards clinical development or potential regulatory approval. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our development, regulatory and commercialization efforts. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial condition and our ability to develop and potentially commercialize (if approved) our product candidates.

We expect to incur significant expenses and increasing operating losses for at least the next two years as we initiate and continue the clinical development of, seek regulatory approval for, and potentially commercialize (if approved) our product candidates and add personnel necessary to operate as a public company with an advanced clinical pipeline of product candidates. In addition, operating as a publicly-traded company involves the hiring of additional financial and other personnel, upgrading financial

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information systems, and incurring costs associated with operating as a public company. We expect that our operating losses will fluctuate significantly from quarter-to-quarter and year-to-year due to the timing of clinical development programs, efforts to achieve regulatory approval and planning for potential commercialization (if approved) of our product candidates.

Until we can generate a sufficient amount of revenue to finance our cash requirements, which would require us to obtain regulatory approval for and successfully commercialize one or more of our product candidates, we expect to finance our future cash needs primarily through the issuance of additional equity and potentially through borrowing and strategic alliances with partner companies. We do not maintain any external lines of credit or have any sources of debt or equity capital committed for funding, other than the legacy sales agreement entered into on March 25, 2016 between the Registrant and IFS Securities, Inc. (doing business as Brinson Patrick, a division of IFS Securities, Inc.). This agreement provides a facility for the offer and sale of shares of common stock from time to time depending upon market demand, in transactions deemed to be an “at-the-market” (“ATM”) offering. We will need to keep current our shelf registration statement and the offering prospectus relating to the ATM facility, in addition to providing certain periodic deliverables under the sales agreement, in order to use such facility. To the extent that we raise additional capital through the issuance of additional equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of existing stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise additional funds through marketing and distribution arrangements or other collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or pursuit of regulatory approval efforts or grant rights to develop and market product candidates to third parties that we would otherwise prefer to develop and, if applicable, market ourselves.

Contractual Commitments

License Agreements

In August 2016, Private Acer entered into an agreement with Assistance Publique—Hôpitaux de Paris, Hôpital Européen Georges Pompidou (“AP-HP”) whereby we acquired the exclusive worldwide rights to access and use pivotal clinical trial data from a multicenter, prospective, randomized, open trial related to the use of celiprolol for the treatment of vEDS patients. We are using this pivotal clinical data to support our NDA filing for EDSIVO^TM for the treatment of vEDS. The agreement requires us to make certain upfront payments to AP-HP, reimburse certain of AP-HP’s costs, make payments upon achievement of defined milestones and pay low single digit percent royalties on net sales of celiprolol over the royalty term.

In September 2018, we entered into an additional agreement with AP-HP to acquire the exclusive worldwide intellectual property rights to three European patent applications relating to certain uses of celiprolol including i) the use of celiprolol during pregnancy, (ii) the optimal dose of celiprolol in treating vascular Ehlers-Danlos syndrome (“vEDS”) patients and (iii) the use of celiprolol to treat kyphoscoliotic Ehlers-Danlos syndrome (type VI). Pursuant to the agreement, we will reimburse AP-HP for certain costs and will pay annual maintenance fee payments. Subject to a minimum royalty amount, we will also pay royalty payments on annual net sales of celiprolol during the royalty term in the low single digit percent range, depending upon whether there is a valid claim of a licensed patent. Under the agreement, we will control and pay the costs of ongoing patent prosecution and maintenance for the licensed applications. The term of the agreement expires on a country-by-country basis upon the later of (a) 15 years after the first commercial sale of celiprolol in any country in which there is no valid claim of a licensed patent, and (b) upon the last to occur of (i) expiration or invalidation of the last valid claim in any country, (ii) expiration of the supplementary protection certificates granted to celiprolol and (iii) expiration of the market exclusivity period conferred by obtaining an AMM orpheline (orphan Marketing Authorization), a PUMA (Paediatric Use Marketing Authorization) or U.S. FDA orphan drug designation. We may terminate the agreement in our sole discretion upon written notice to AP-HP, and AP-HP may terminate the agreement in the event we fail to make the required payments after notice and opportunity to cure. Additionally, the agreement will terminate if we terminate clinical development, marketing approval is withdrawn by the health or regulatory authorities in all countries, we cease to do business or there is a procedure of winding-up by court decision against us. We subsequently filed three U.S. patent applications on this subject matter in October 2018.

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In April 2014, we obtained exclusive rights to patents and certain other intellectual property relating to ACER-001 and preclinical and clinical data, through an exclusive license agreement with Baylor College of Medicine (“BCM”). Under the terms of the agreement, as amended, we have worldwide exclusive rights to develop, manufacture, use, sell and import products incorporating the licensed intellectual property. The license agreement requires us to make upfront and annual payments to BCM, reimburse certain of BCM’s legal costs, make payments upon achievement of defined milestones, and pay royalties on net sales of any developed product over the royalty term.

Off-Balance Sheet Arrangements

We have not entered into any off-balance sheet arrangements and do not have any holdings in variable interest entities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit to the SEC under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified by the SEC’s rules and forms, and that information is accumulated and communicated to our management, including our principal executive officer and principal financial officer (whom we refer to in this periodic report as our Certifying Officers), as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Certifying Officers, the effectiveness of our disclosure controls and procedures as of September 30, 2018, pursuant to Rule 13a-15(b) under the Securities Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of September 30, 2018, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.  

From time to time, the Company may become involved in litigation or proceedings relating to claims arising from the ordinary course of business.

See Note 5 to our unaudited condensed consolidated financial statements included in this report for a description of our litigation with Piper Jaffray & Co.

Item 1A. Risk Factors.  

Investing in our securities involves a high degree of risk.  You should consider the following risk factors, as well as other information contained or incorporated by reference in this report, before deciding to invest in our securities.  The following factors affect our business, our intellectual property, the industry in which we operate and our securities.  The risks and uncertainties described below are not the only ones we face.  Additional risks and uncertainties not presently known or which we consider immaterial as of the date hereof may also have an adverse effect on our business.  If any of the matters discussed in the following risk factors were to occur, our business, financial condition, results of operations, cash flows or prospects could be materially adversely affected, the market price of our securities could decline and you could lose all or part of your investment in our securities.

Risks Related to Our Business and Financial Condition

We have a limited operating history and have incurred significant losses since our inception and anticipate that we will continue to incur losses for the foreseeable future and may never achieve or maintain profitability. The absence of any commercial sales and our limited operating history make it difficult to assess our future viability.

We are a development-stage pharmaceutical company with a limited operating history. On September 19, 2017, we completed the reverse merger, or the Merger, with Acer Therapeutics Inc., a Delaware corporation, or Private Acer, in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of June 30, 2017, by and among Private Acer, ourselves and Opexa Merger Sub, Inc. Also, on September 19, 2017, in connection with, and prior to the completion of, the Merger, we effected a 1-for-10.355527 reverse stock split of our common stock and changed our name to “Acer Therapeutics Inc.” On May 15, 2018, we changed our state of incorporation from the State of Texas to the State of Delaware pursuant to a plan of conversion.  We also eliminated our holding company structure by merging our wholly-owned subsidiary Private Acer with and into the parent company, with the parent company being the surviving entity.  

Pharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. We are focused principally on repurposing and/or reformulating existing drugs for rare and ultra-rare orphan diseases with significant unmet medical need. We are not profitable and Private Acer had incurred losses in each year since its inception in 2013. We have only a limited operating history upon which you can evaluate our business and prospects. In addition, we have limited experience and have not yet demonstrated an ability to successfully overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the specialty pharmaceutical industry. We have not generated any revenue to date. We continue to incur significant research and development and other expenses related to our ongoing operations. Our net loss for the year ended December 31, 2017, was $14.2 million and our net loss for the nine months ended September 30, 2018 was $12.8 million. As of September 30, 2018, we had an accumulated deficit of $38.3 million. We expect to continue to incur losses for the foreseeable future as we continue our development of, and seek marketing approvals for, our product candidates.

We have devoted substantially all of our financial resources to identify, acquire, and develop our product candidates, including providing general and administrative support for our operations. To date, we have financed our operations primarily through the sale of equity securities and convertible promissory notes. The amount of our future net losses will depend, in part, on the rate of our future expenditures and our ability to obtain funding through equity or debt financings, strategic collaborations, or grants. Pharmaceutical product development is a highly speculative undertaking and involves a substantial degree of risk. We expect losses to increase as we conduct clinical trials and continue to develop our product candidates. We expect to invest significant funds into the research and development of our current product candidates to determine the potential to advance these product candidates to regulatory approval. We may also invest in acquiring or in-licensing additional product candidates to expand our pipeline.

If we obtain regulatory approval to market a product candidate, our future revenue will depend upon the size of any markets in which our product candidates may receive approval and our ability to achieve sufficient market acceptance, pricing, reimbursement from third-party payors, and adequate market share for our product candidates in those markets. Even if we obtain adequate market share for our product candidates, because the potential markets in which our product candidates may ultimately receive regulatory approval could be very small, we may never become profitable despite obtaining such market share and acceptance of our products.

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We expect to continue to incur significant expenses and increasing operating losses for the foreseeable future, and our expenses will increase substantially if and as we:

• continue the clinical development of our product candidates;

• continue efforts to discover new product candidates;

• undertake the manufacturing of our product candidates or increase volumes manufactured by third parties;

• advance our programs into larger, more expensive clinical trials;

• initiate additional pre-clinical, clinical, or other trials or studies for our product candidates;

• seek regulatory and marketing approvals and reimbursement for our product candidates;

• establish a sales, marketing and distribution infrastructure to commercialize any products for which we may obtain marketing approval and market for ourselves;

• seek to identify, assess, acquire and/or develop other product candidates;

• make milestone, royalty or other payments under third-party license agreements;

• seek to maintain, protect and expand our intellectual property portfolio;

• seek to attract and retain skilled personnel; and

• experience any delays or encounter issues with the development and potential for regulatory approval of our clinical candidates such as safety issues, clinical trial enrollment delays, longer follow-up for planned studies, additional major studies or supportive studies necessary to support marketing approval.

Further, the net losses we incur will fluctuate significantly from quarter to quarter and year to year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.

We currently have no source of product sales revenue and may never be profitable.

We have not generated any revenues from commercial sales of any of our current product candidates, EDSIVO^TM (for vascular Ehlers-Danlos syndrome, or vEDS) and ACER-001 (for urea cycle disorders, or UCD, and Maple Syrup Urine Disease, or MSUD). Our ability to generate product revenue depends upon our ability to successfully identify, develop and commercialize these product candidates or other product candidates that we may develop, in-license or acquire in the future. Our ability to generate future product revenue from our current or future product candidates also depends on a number of additional factors, including our ability to:

• successfully complete research and clinical development of current and future product candidates;

• establish and maintain supply and manufacturing relationships with third parties, and ensure adequate and legally compliant manufacturing of product candidates;

• obtain regulatory approval from relevant regulatory authorities in jurisdictions where we intend to market our product candidates;

• launch and commercialize future product candidates for which we obtain marketing approval, if any, and if launched independently, successfully establish a sales force and medical affairs, marketing and distribution infrastructure;

• obtain coverage and adequate product reimbursement from third-party payors, including government payors;

• achieve market acceptance for our approved products, if any;

• establish, maintain and protect our intellectual property rights; and

• attract, hire and retain qualified personnel.

In addition, because of the numerous risks and uncertainties associated with clinical product development, including that our product candidates may not successfully advance through development or achieve regulatory approval, we are unable to predict the timing or amount of any potential future product sales revenues. Our expenses also could increase beyond expectations if we decide to or are required by the United States Food and Drug Administration, or FDA, or comparable foreign regulatory authorities, to perform studies or trials in addition to those that we currently anticipate. Even if we complete the development and regulatory processes described above, we anticipate incurring significant costs associated with launching and commercializing these products.

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We may require additional financing to obtain marketing approval and commercialize our product candidates, and a failure to obtain this necessary capital when needed on acceptable terms, or at all, could force us to delay, limit, reduce or terminate our product development, other operations or commercialization efforts.

Since our inception, substantially all of our resources have been dedicated to the clinical development of our product candidates. As of September 30, 2018, we had an accumulated deficit of $38.3 million, cash and cash equivalents of $46.2 million and current liabilities aggregating to $2.0 million. During the quarter ended September 30, 2018, we received approximately $42.7 million in aggregate net proceeds upon completing an underwritten public offering of common stock on August 3, 2018. Based on available resources, we believe that our cash and cash equivalents currently on hand are sufficient to fund our anticipated operating and capital requirements into the first half of 2020.

We believe that we will continue to expend substantial resources for the foreseeable future on the completion of clinical development and regulatory preparedness of our product candidates, preparations for a commercial launch of our product candidates, if approved, and development of any other current or future product candidates we may choose to further develop. These expenditures will include costs associated with research and development, conducting preclinical studies and clinical trials, obtaining marketing approvals, and manufacturing and supply as well as marketing and selling any products approved for sale. In addition, other unanticipated costs may arise. Because the outcome of any drug development process is highly uncertain, we cannot reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of our current product candidates, if approved, or future product candidates, if any.

Our operating plan may change as a result of factors currently unknown to us, and we may need to seek additional funds sooner than planned, through public or private equity or debt financings or other sources, such as strategic collaborations. Such financing may result in dilution to stockholders, imposition of debt covenants and repayment obligations, or other restrictions that may adversely affect our business. In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Our future capital requirements depend on many factors, including:

• the scope, progress, results, and costs of researching and developing our current product candidates, future product candidates and conducting preclinical and clinical trials;

• the cost of seeking regulatory and marketing approvals and reimbursement for our product candidates;

• the cost of commercialization activities if our current product candidates and future product candidates are approved for sale, including marketing, sales and distribution costs, and preparedness of our corporate infrastructure;

• the cost of manufacturing current product candidates and future product candidates that we obtain approval for and successfully commercialize;

• our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such agreements;

• the number and characteristics of any additional product candidates we may develop or acquire;

• any product liability or other lawsuits related to our products or commenced against us;

• the expenses needed to attract and retain skilled personnel;

• the costs associated with being a public company;

• the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing our intellectual property rights, including litigation costs and the outcome of such litigation; and

• the timing, receipt and amount of sales of, or royalties on, any future approved products, if any.

Additional funds may not be available when we need them, on terms that are acceptable to us, or at all. If adequate funds are not available to us on a timely basis, we may be required to:

• delay, limit, reduce or terminate preclinical studies, clinical trials or other development activities for our current product candidates or future product candidates, if any;

• delay, limit, reduce or terminate our research and development activities; or

• delay, limit, reduce or terminate our establishment of sales and marketing capabilities or other activities that may be necessary to commercialize our future product candidates.

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We have incurred, and expect to continue to incur, increased costs and risks as a result of being a public company.

As a public company, we are required to comply with the Sarbanes-Oxley Act of 2002, or SOX, as well as rules and regulations implemented by the SEC and The Nasdaq Stock Market, or Nasdaq. Changes in the laws and regulations affecting public companies, including the provisions of SOX and rules adopted by the SEC and by Nasdaq, have resulted in, and will continue to result in, increased costs as we respond to their requirements. Given the risks inherent in the design and operation of internal controls over financial reporting, the effectiveness of our internal controls over financial reporting is uncertain. If our internal controls are not designed or operating effectively, we may not be able to conclude an evaluation of our internal control over financial reporting as required or we or our independent registered public accounting firm may determine that our internal control over financial reporting was not effective. We currently have a very limited workforce, and it may be difficult to adhere to appropriate internal controls over financial reporting or disclosure controls with such limited staffing. In addition, our independent registered public accounting firm may either disclaim an opinion as it relates to management’s assessment of the effectiveness of our internal controls or may issue an adverse opinion on the effectiveness of our internal controls over financial reporting, especially in light of the fact that we currently have a very limited workforce. Investors may lose confidence in the reliability of our financial statements, which could cause the market price of our common stock to decline and which could affect our ability to run our business effectively. New rules could also make it more difficult or more costly for us to obtain certain types of insurance, including directors’ and officers’ liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the coverage that is the same or similar to our current coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees and as executive officers. We cannot predict or estimate the total amount of the costs we may incur or the timing of such costs to comply with these rules and regulations.

Under the corporate governance standards of Nasdaq, a majority of our board of directors and each member of our Audit and Compensation Committees must be an independent director. If any vacancies on our Board or Audit or Compensation Committees occur that need to be filled by independent directors, we may encounter difficulty in attracting qualified persons to serve on our Board and, in particular, our Audit Committee. If we fail to attract and retain the required number of independent directors, we may be subject to SEC enforcement proceedings and delisting of our common stock from the Nasdaq Capital Market.

If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired.

We are subject to the reporting requirements of the Exchange Act, SOX and Nasdaq rules and regulations. SOX requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal controls over financial reporting in our Annual Report on Form 10-K filing for that year, as required by Section 404 of SOX. As a private company, Private Acer had never been required to test its internal controls within a specified period. This will require that we incur substantial internal costs to continue to expand our accounting and finance functions and that we expend significant management efforts. We may experience difficulty in meeting these reporting requirements in a timely manner.

Although we are committed to continuing to improve our internal control processes, and although we will continue to diligently and vigorously review our internal controls over financial reporting, we cannot be certain that, in the future, a material weakness or significant deficiency will not exist or otherwise be discovered. We may discover weaknesses in our system of internal financial and accounting controls and procedures that could result in a material misstatement of our financial statements. Our internal control over financial reporting will not prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

If we are not able to comply with the requirements of Section 404 of SOX, or if we are unable to maintain proper and effective internal controls, we may not be able to produce timely and accurate financial statements. If that were to happen, the market price of our common stock could decline and we could be subject to sanctions or investigations by Nasdaq, the SEC, or other regulatory authorities.

Any acquisitions that we make could disrupt our business and harm our financial condition.

We expect to evaluate potential strategic acquisitions of complementary businesses, products or technologies worldwide. We may also consider joint ventures, licensing and other collaborative projects. We may not be able to identify appropriate acquisition candidates or strategic partners, or successfully negotiate, finance or integrate acquisitions of any businesses, products or technologies. Furthermore, the integration of any acquisition and management of any collaborative project may divert our management’s time and resources from our core business and disrupt our operations. As a company, we have limited experience with acquiring other companies, or with acquiring products outside of the United States. Any cash acquisition we pursue would potentially

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divert the cash we have on our balance sheet from our present clinical development programs. Any stock acquisitions would dilute our stockholders’ ownership.

Funding from our ATM facility may be limited or unavailable.

We will need to keep current our shelf registration statement and an offering prospectus relating to the ATM facility with Brinson Patrick (now a division of IFS Securities, Inc.) in order to use the program to sell shares of our common stock, as well as provide certain periodic deliverables required by the sales agreement for the facility. The number of shares and price at which we may be able to sell shares under our ATM facility may be limited due to market conditions and other factors beyond our control.

Our auditors have expressed doubt in their audited financial report in respect of our 2017 fiscal year about our ability to continue as a going concern.

In their audited financial report in respect of our 2017 fiscal year, our independent registered public accounting firm included in its report an emphasis-of-a-matter indicating that the recurring losses from our operations raised a substantial doubt as to our ability to continue as a going concern. As of September 30, 2018, we had an accumulated deficit of $38.3 million, cash and cash equivalents of $46.2 million and current liabilities aggregating $2.0 million. During the quarter ended September 30, 2018, we completed an underwritten public offering of 2,555,555 shares of common stock at a public offering price of $18.00 per share and received aggregate net proceeds of approximately $42.7 million, after deducting underwriting discounts, commissions and offering-related expenses of approximately $3.3 million. Based on available resources, we believe that our cash and cash equivalents currently on hand, including the proceeds from this offering, will be sufficient to fund our anticipated operating and capital requirements into the first half of 2020. We expect to continue to incur losses for the foreseeable future as we continue our development of and seek marketing approvals for, our product candidates. We have historically relied on raising capital to finance our operations and may continue to do so in the future. While mitigated by the recent financing, it is also possible that the opinion of our independent registered public accounting firm on our audited financial report in respect of future years may include a similar going concern qualification.

Risks Related to the Clinical Development and Marketing Approval of Our Product Candidates

The marketing approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain marketing approval for our product candidates, our business will be substantially harmed.

None of our current product candidates have gained marketing approval in our target indications for sale in the United States or any other country, and we cannot guarantee that we will ever have marketable products. Our business is substantially dependent on our ability to complete the development of, obtain marketing approval for, and successfully commercialize our product candidates in a timely manner. We cannot commercialize our product candidates in the United States without first obtaining approval from the FDA to market each product candidate. Similarly, we cannot commercialize our product candidates outside of the United States without obtaining regulatory approval from comparable foreign regulatory authorities. Our product candidates could fail to receive marketing approval for many reasons, including the following:

• the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of any clinical trials we conduct or rely upon for regulatory approval;

• the FDA or comparable foreign regulatory authorities may find the human subject protections for our clinical trials inadequate and place a clinical hold on an Investigational New Drug Application, or IND, at the time of its submission precluding commencement of any trials or a clinical hold on one or more clinical trials at any time during the conduct of our clinical trials;

• the FDA could determine that we cannot rely on Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or FFDCA, for any or all of our product candidates;

• we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that a product candidate is safe and effective for its proposed indication;

• the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

• we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

• the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

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• the FDA could determine that we have identified the wrong reference listed drug or drugs or that approval of our 505(b)(2) application for any of our product candidates is blocked by patent or non-patent exclusivity of the reference listed drug or drugs;

• the data collected from clinical trials of our product candidates may not be sufficient to support the submission of an application to obtain marketing approval in the United States or elsewhere;

• the FDA or comparable foreign regulatory authorities may find inadequate the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and

• the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner that would delay marketing approval.

Before obtaining marketing approval for the commercial sale of any drug product for a target indication, we must demonstrate in preclinical studies and well-controlled clinical trials and, to the satisfaction of the applicable regulatory authorities, that the product is safe and effective for its intended use and that the manufacturing facilities, processes, and controls are adequate to preserve the drug’s identity, strength, quality and purity. In the United States, it is necessary to submit and obtain approval of a New Drug Application, or NDA, from the FDA. An NDA must include extensive preclinical and clinical data and supporting information to establish the product safety and efficacy for each desired indication. The NDA must also include significant information regarding the chemistry, manufacturing, and controls for the product. After the submission but before approval of the NDA, the manufacturing facilities used to manufacture a product candidate must be inspected by the FDA to ensure compliance with the applicable Current Good Manufacturing Practice, or cGMP, requirements. The FDA and the Competent Authorities of the Member States of the European Economic Area, or EEA, and comparable foreign regulatory authorities, may also inspect our clinical trial sites and audit clinical study data to ensure that our studies are properly conducted in accordance with the IND regulations, human subject protection regulations, and current good clinical practice, or cGCP.

Obtaining approval of an NDA is a lengthy, expensive and uncertain process, and approval may not be obtained. Upon submission of an NDA, the FDA must make an initial determination that the application is sufficiently complete to accept the submission for filing. We cannot be certain that any submissions will be accepted for filing and reviewed by the FDA, or ultimately be approved. If the application is not accepted for review, the FDA may require that we conduct additional clinical studies or preclinical testing, or take other actions before it will reconsider our application. If the FDA requires additional studies or data, we would incur increased costs and delays in the marketing approval process, which may require us to expend more resources than we have available. In addition, the FDA may not consider any additional information to be complete or sufficient to support the filing or approval of the NDA.

Regulatory authorities outside of the United States, such as in Europe and Japan and in emerging markets, also have requirements for approval of drugs for commercial sale with which we must comply prior to marketing in those areas. Regulatory requirements can vary widely from country to country and could delay or prevent the introduction of our product candidates. Clinical trials conducted in one country may not be accepted or the results may not be found adequate by regulatory authorities in other countries, and obtaining regulatory approval in one country does not mean that regulatory approval will be obtained in any other country. However, the failure to obtain regulatory approval in one jurisdiction could have a negative impact on our ability to obtain approval in a different jurisdiction. Approval processes vary among countries and can involve additional product candidate testing and validation and additional administrative review periods. Seeking foreign regulatory approval could require additional non-clinical studies or clinical trials, which could be costly and time-consuming. Foreign regulatory approval may include all of the risks associated with obtaining FDA approval. For all of these reasons, we may not obtain foreign regulatory approvals on a timely basis, if at all.

The process to develop, obtain marketing approval for, and commercialize product candidates is long, complex and costly, both inside and outside of the United States, and approval is never guaranteed. The time required to obtain approval by the FDA and comparable foreign authorities is unpredictable but typically takes many years following the commencement of clinical trials and depends upon numerous factors, including the substantial discretion of the regulatory authorities. In addition, approval policies, regulations, or the type and amount of clinical data necessary to gain approval may change during the course of a product candidate’s clinical development and may vary among jurisdictions. Even if our product candidates were to successfully obtain approval from regulatory authorities, any such approval might significantly limit the approved indications for use, including more limited patient populations, require that precautions, warnings or contraindications be included on the product labeling, including black box warnings, require expensive and time-consuming post-approval clinical studies, risk evaluation and mitigation strategies or surveillance as conditions of approval, or, through the product label, the approval may limit the claims that we may make, which may impede the successful commercialization of our product candidates. Following any approval for commercial sale of our product candidates, certain changes to the product, such as changes in manufacturing processes and additional labeling claims, as well as new safety information, may require new studies and will be subject to additional FDA notification, or review and approval. Also, marketing approval for any of our product candidates may be withdrawn. If we are unable to obtain marketing approval for our product candidates in one or more jurisdictions, or any approval contains significant limitations, our ability to market to our full target market will be reduced and our ability to realize the full market potential of our product candidates will be impaired. Furthermore, we

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may not be able to obtain sufficient funding or generate sufficient revenue and cash flows to continue or complete the development of any of our current or future product candidates.

If we are unable to obtain approval under Section 505(b)(2) of the FFDCA or if we are required to generate additional data related to safety or efficacy in order to obtain approval under Section 505(b)(2), we may be unable to meet our anticipated development and commercialization timelines.

Our current strategy for seeking marketing authorization in the United States for our product candidates relies primarily on Section 505(b)(2) of the FFDCA, which permits use of a marketing application, referred to as a 505(b)(2) application, where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use. The FDA interprets this to mean that an applicant may rely for approval on such data as that found in published literature or the FDA’s finding of safety or effectiveness, or both, of a previously approved drug product owned by a third party. There is no assurance that the FDA would find third-party data relied upon by us in a 505(b)(2) application sufficient or adequate to support approval, and the FDA may require us to generate additional data to support the safety and efficacy of our product candidates. Consequently, we may need to conduct substantial new research and development activities beyond those we currently plan to conduct. Such additional new research and development activities would be costly and time-consuming and there is no assurance that such data generated from such additional activities would be sufficient to obtain approval.

If the data to be relied upon in a 505(b)(2) application are related to drug products previously approved by the FDA and covered by patents that are listed in the FDA’s Orange Book, we would be required to submit with our 505(b)(2) application a Paragraph IV Certification in which we must certify that we do not infringe the listed patents or that such patents are invalid or unenforceable, and provide notice to the patent owner or the holder of the approved NDA. The patent owner or NDA holder would have 45 days from receipt of the notification of our Paragraph IV Certification to initiate a patent infringement action against us. If an infringement action is initiated, the approval of our NDA would be subject to a stay of up to 30 months or more while we defend against such a suit. Approval of our product candidates under Section 505(b)(2) may, therefore, be delayed until patent exclusivity expires or until we successfully challenge the applicability of those patents to our product candidates. Alternatively, we may elect to generate sufficient clinical data so that we would no longer need to rely on third-party data, which would be costly and time-consuming and there would be no assurance that such data generated from such additional activities would be sufficient to obtain approval.

We may not be able to obtain shortened review of our applications, and the FDA may not agree that our product candidates qualify for marketing approval. If we are required to generate additional data to support approval, we may be unable to meet anticipated or reasonable development and commercialization timelines, may be unable to generate the additional data at a reasonable cost, or at all, and may be unable to obtain marketing approval of our product candidates. If the FDA changes its interpretation of Section 505(b)(2) allowing reliance on data in a previously approved drug application owned by a third party, or there is a change in the law affecting Section 505(b)(2), this could delay or even prevent the FDA from approving any Section 505(b)(2) application that we submit.

Marketing approval may be substantially delayed or may not be obtained for one or all of our product candidates if regulatory authorities require additional or more time-consuming studies to assess the safety and efficacy of our product candidates.

We may be unable to initiate or complete development of our product candidates on schedule, if at all. The completion of the studies for our product candidates will require us to obtain substantial additional funding beyond our current resources. In addition, regulatory authorities may require additional or more time-consuming studies to assess the safety or efficacy of our product candidates than we are currently planning. We may not be able to obtain adequate funding to complete the necessary steps for approval for any or all of our product candidates. Additional delays may result if the FDA, an FDA Advisory Committee (if one is convened to review our NDA) or other regulatory authority indicates that a product candidate should not be approved or there should be restrictions on approval, such as the requirement for a REMS, to ensure the safe use of the drug. Delays in marketing approval or rejections of applications for marketing approval in the United States or other markets may result from many factors, including:

• the FDA’s or comparable foreign regulatory authorities’ disagreement with the design or implementation of our clinical trials;

• regulatory requests for additional analyses, reports, data, non-clinical and preclinical studies and clinical trials;

• regulatory questions or disagreement by the FDA or comparable regulatory authorities regarding interpretations of data and results and the emergence of new information regarding our current or future product candidates or the field of research;

• unfavorable or inconclusive results of clinical trials and supportive non-clinical studies, including unfavorable results regarding safety or efficacy of our product candidates during clinical trials;

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• failure to meet the level of statistical significance required for approval;

• inability to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

• lack of adequate funding to commence or continue our clinical trials due to unforeseen costs or other business decisions;

• regulatory authorities may find inadequate the manufacturing processes or facilities of the third-party manufacturers with which we contract for clinical and commercial supplies;

• we may have insufficient funds to pay the significant user fees required by the FDA upon the filing of an NDA; and

• the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner that would delay marketing approval.

The lengthy and unpredictable approval process, as well as the unpredictability of future clinical trial results, may result in our failure to obtain marketing approval to market our other product candidates, which would significantly harm our business, results of operations and prospects.

Clinical drug development involves a lengthy and expensive process with an uncertain outcome.

Clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain. The FDA and comparable foreign regulatory authorities have substantial discretion in the approval process and determining when or whether marketing approval will be obtained for our current product candidates. Even if we believe the data collected from clinical trials of our current product candidates are promising, such data may not be sufficient to support approval by the FDA or comparable foreign authorities. Our future clinical trial results may not be successful.

It is impossible to predict the extent to which the clinical trial process may be affected by legislative and regulatory developments. Due to these and other factors, our current product candidates or future product candidates could take a significantly longer time to gain marketing approval than expected or may never gain marketing approval. This could delay or eliminate any potential product revenue by delaying or terminating the potential commercialization of our current product candidates.

Preclinical trials must also be conducted in accordance with FDA and comparable foreign authorities’ legal requirements, regulations or guidelines, including current Good Laboratory Practice, or cGLP, an international standard meant to harmonize the conduct and quality of nonclinical studies and the archiving and reporting of findings. Preclinical studies including long-term toxicity studies and carcinogenicity studies in experimental animals may result in findings that may require further evaluation, which could affect the risk-benefit evaluation of clinical development, or which may even lead the regulatory agencies to delay, prohibit the initiation of or halt clinical trials or delay or deny marketing authorization applications. Failure to adhere to the applicable cGLP standards or misconduct during the course of preclinical trials may invalidate the data and require one or more studies to be repeated or additional testing to be conducted.

Clinical trials must also be conducted in accordance with FDA and comparable foreign authorities’ legal requirements, regulations or guidelines, including human subject protection requirements and GCP. Clinical trials are subject to further oversight by these governmental agencies and Institutional Review Boards, or IRBs, at the medical institutions where the clinical trials are conducted. In addition, clinical trials must be conducted with supplies of our current product candidates produced under cGMP and other requirements. Our clinical trials are conducted at multiple sites, including some sites in countries outside the United States and the European Union, which may subject us to further delays and expenses as a result of increased shipment costs, additional regulatory requirements and the engagement of foreign and non-EU clinical research organizations, as well as expose us to risks associated with clinical investigators who are unknown to the FDA or the European regulatory authorities, and with different standards of diagnosis, screening and medical care.

The commencement and completion of clinical trials for our current product candidates may be delayed, suspended or terminated as a result of many factors, including but not limited to:

• the delay or refusal of regulators or IRBs to authorize us to commence a clinical trial at a prospective trial site and changes in regulatory requirements, policies and guidelines;

• the FDA or comparable foreign regulatory authorities disagreeing as to the design or implementation of our clinical trials;

• failure to reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

• delays in patient enrollment and variability in the number and types of patients available for clinical trials;

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• the inability to enroll a sufficient number of patients in trials to ensure adequate statistical power to detect statistically significant treatment effects;

• lower than anticipated retention rates of patients and volunteers in clinical trials;

• clinical sites deviating from trial protocol or dropping out of a trial;

• adding new clinical trial sites;

• negative or inconclusive results, which may require us to conduct additional preclinical or clinical trials or to abandon projects that we expect to be promising;

• safety or tolerability concerns could cause us to suspend or terminate a trial if we find that the participants are being exposed to unacceptable health risks;

• regulators or IRBs requiring that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements;

• our third-party research and manufacturing contractors failing to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

• difficulty in maintaining contact with patients after treatment, resulting in incomplete data;

• delays in establishing the appropriate dosage levels;

• the quality or stability of our current product candidates falling below acceptable standards;

• the inability to produce or obtain sufficient quantities of our current product candidates to complete clinical trials; and

• exceeding budgeted costs due to difficulty in predicting accurately the costs associated with clinical trials.

Patient enrollment is a significant factor in the timing of clinical trials and is affected by many factors, including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the design of the clinical trial, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the drug being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are investigating.

There are significant requirements imposed on us and on clinical investigators who conduct clinical trials that we sponsor. Although we are responsible for selecting qualified clinical investigators, providing them with the information they need to conduct the clinical trial properly, ensuring proper monitoring of the clinical trial, and ensuring that the clinical trial is conducted in accordance with the general investigational plan and protocols contained in the IND, we cannot ensure the clinical investigators will maintain compliance with all regulatory requirements at all times. The pharmaceutical industry has experienced cases where clinical investigators have been found to incorrectly record data, omit data, or even falsify data. We cannot ensure that the clinical investigators in our trials will not make mistakes or otherwise compromise the integrity or validity of data, any of which would have a significant negative effect on our ability to obtain marketing approval, our business, and our financial condition.

We could encounter delays if a clinical trial is suspended or terminated by us, by the IRBs of the institutions in which such trial is being conducted, by the data safety monitoring board, or DSMB, for such trial, or by the FDA or comparable foreign regulatory authorities. We or such authorities may impose a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or comparable foreign regulatory authorities resulting in the imposition of a clinical hold, safety issues or adverse side effects, failure to demonstrate a benefit from using the drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. If we experience delays in the completion or termination of any clinical trial of our current product candidates, the commercial prospects of our current product candidates will be harmed, and our ability to generate product revenues from our product candidates will be delayed. In addition, any delays in completing our clinical trials will increase our costs, slow our development and approval process and jeopardize our ability to commence product sales and generate revenues. Many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of our product candidates.

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Any of these occurrences could materially adversely affect our business, financial condition, results of operations, and prospects. In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of marketing approval of our current product candidates. Significant clinical trial delays could also allow our competitors to bring products to market before we are able to do so, shorten any periods during which we have the exclusive right to commercialize our current product candidates and impair our ability to commercialize our current product candidates, which may harm our business, financial condition, results of operations, and prospects.

Clinical failure can occur at any stage of clinical development. Because the results of earlier clinical trials are not necessarily predictive of future results, any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive marketing approval.

Clinical failure can occur at any stage of our clinical development. The results of preclinical studies and early clinical trials of our product candidates may not be predictive of the results of later-stage clinical trials. Product candidates in later stages of clinical trials may fail to show the desired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. Clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional clinical or preclinical testing. Data obtained from tests are susceptible to varying interpretations, and regulators may not interpret our data as favorably as we do, which may delay, limit or prevent marketing approval. In addition, the design of a clinical trial can determine whether our results will support approval of a product or approval of a product for desired indications, and flaws or shortcomings in the design of a clinical trial may not become apparent until the clinical trial is well advanced. We have not yet conducted any clinical trials, we have limited experience in designing clinical trials and thus may be unable to design and execute a clinical trial to support marketing approval for our desired indications. Further, clinical trials of potential products often reveal that it is not practical or feasible to continue development efforts. If one of our product candidates is found to be unsafe or lack efficacy, we will not be able to obtain marketing approval for it and our business would be harmed. For example, if the results of our clinical trials of our product candidates do not achieve pre-specified endpoints or we are unable to provide primary or secondary endpoint measurements deemed acceptable by the FDA or comparable foreign regulators or if we are unable to demonstrate an acceptable level of safety relative to the efficacy associated with our proposed indications, the prospects for approval of our product candidates would be materially and adversely affected. A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in Phase 2 and Phase 3 clinical trials, even after seeing promising results in earlier clinical trials.

In some instances, there can be significant variability in safety and/or efficacy results between different trials of the same product candidate due to numerous factors, including differences in trial protocols and design, the size and type of the patient population, adherence to the dosing regimen and the rate of dropout among clinical trial participants. We do not know whether any clinical trials we may conduct will demonstrate consistent and/or adequate efficacy and safety to obtain marketing approval for our product candidates.

As an organization, we have not yet completed any clinical trial and may be unable to do so efficiently or at all for our current product candidates or any product candidate we develop.

We intend to conduct clinical trials of our product candidates. The conduct of clinical trials and the submission of a successful NDA is a complicated process. As an organization, we have not completed a clinical trial before, and we have limited experience in preparing and submitting regulatory filings. Consequently, we may be unable to successfully and efficiently execute and complete necessary clinical trials in a way that leads to NDA submission and approval of our current product candidates or for any other product candidate we develop. We may require more time and incur greater costs than anticipated and may not succeed in obtaining marketing approval of the product candidates we develop. Failure to commence or complete, or delays in, our planned clinical trials would prevent us from or delay us in commercializing our current product candidates or any other product candidate we develop.

Our product candidates may cause undesirable adverse effects or have other properties that could delay or prevent their marketing approval, limit the commercial profile of an approved label, or result in significant negative consequences following marketing approval, if obtained.

Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or other comparable foreign authorities. If any of our current product candidates or any other product candidate we develop is associated with serious adverse, undesirable or unacceptable side effects, we may need to abandon such candidate’s development or limit development to certain uses or subpopulations in which such side effects are less prevalent, less severe or more acceptable from a risk-benefit perspective. Many compounds that initially showed promise in early-stage or clinical testing have later been found to cause side effects that prevented further development of the compound. Results of our trials could reveal a high and unacceptable prevalence of these or other side effects. In such an event, our trials could be suspended or terminated and the FDA or comparable foreign regulatory

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authorities could order us to cease further development of or deny approval of our product candidates for any or all targeted indications. The drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims.

If our product candidates receive marketing approval, and we or others later identify undesirable side effects caused by such products, a number of potentially significant negative consequences could result, including:

• regulatory authorities may withdraw approvals of such product;

• we may be required to recall a product or change the way such product is administered to patients;

• additional restrictions may be imposed on the marketing of the particular product or the manufacturing process for the product or any component thereof;

• regulatory authorities may require the addition of labeling statements, such as a precaution, “black box” warning or other warnings or a contraindication;

• we or our collaborators may be required to implement a REMS or create a medication guide outlining the risks of such side effect for distribution to patients;

• we or our collaborators could be sued and held liable for harm caused to patients;

• the product may become less competitive; and

• our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of our product candidates, if approved, and could materially adversely affect our business, financial condition, results of operations and prospects.

Even if we receive marketing approval for our product candidates, such approved products will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense. Additionally, our product candidates, if approved, could be subject to labeling and other restrictions, and we may be subject to penalties and legal sanctions if we fail to comply with regulatory requirements or experience unanticipated problems with our approved products.

If the FDA approves any of our product candidates, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion and recordkeeping for the product will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP regulations and GCP for any clinical trials that we conduct post-approval. Any marketing approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor safety and efficacy.

Later discovery of previously unknown problems with an approved product, including adverse events of unanticipated severity or frequency, or with manufacturing operations or processes, or failure to comply with regulatory requirements, or evidence of acts that raise questions about the integrity of data supporting the product approval, may result in, among other things:

• restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls;

• fines, warning letters, or holds on clinical trials;

• refusal by the FDA to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of product approvals;

• product seizure or detention, or refusal to permit the import or export of products; and

• injunctions or the imposition of civil or criminal penalties.

The FDA’s policies may change and additional government regulations may be enacted that could prevent, limit or delay marketing approval, manufacturing or commercialization of our product candidates. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or we are not able to maintain regulatory compliance, we may lose any marketing approval that may have been obtained and we may not achieve or sustain profitability, which would adversely affect our business.

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Agencies such as the FDA and national competition regulators in European countries regulate the promotion and uses of drugs not consistent with approved product labeling requirements. If we are found to have improperly promoted our current product candidates for uses beyond those that are approved, we may become subject to significant liability.

Regulatory authorities such as the FDA and national competition agencies in Europe strictly regulate the promotional claims that may be made about prescription products, such as EDSIVO^TM or ACER-001, if approved. In particular, a product may not be promoted for uses that are not approved by the FDA or comparable foreign regulatory authorities as reflected in the product’s approved labeling, known as “off-label” use, nor may it be promoted prior to obtaining marketing approval. If we receive marketing approval for our product candidates for our proposed indications, physicians may nevertheless use our products for their patients in a manner that is inconsistent with the approved label if the physicians personally believe in their professional medical judgment it could be used in such manner. Although physicians may prescribe legally available drugs for off-label uses, manufacturers may not market or promote such off-label uses.

In addition, the FDA requires that promotional claims not be “false or misleading” as such terms are defined in the FDA’s regulations. For example, the FDA requires substantial evidence, which generally consists of two adequate and well-controlled head-to-head clinical trials, for a company to make a claim that its product is superior to another product in terms of safety or effectiveness. Generally, unless we perform clinical trials meeting that standard comparing our product candidates to competitive products and these claims are approved in our product labeling, we will not be able promote our current product candidates as superior to other products. If we are found to have made such claims we may become subject to significant liability. In the United States, the federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in improper promotion. The FDA has also requested that companies enter into consent decrees or corporate integrity agreements. The FDA could also seek permanent injunctions under which specified promotional conduct is monitored, changed or curtailed.

Our current and future relationships with healthcare professionals, investigators, consultants, collaborators, actual customers, potential customers and third-party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, physician payment transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to sanctions.

Healthcare providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any drug candidates for which we obtain marketing approval. Our current and future arrangements with healthcare professionals, investigators, consultants, collaborators, actual customers, potential customers and third-party payors may expose us to broadly applicable fraud and abuse and other healthcare laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act, that may constrain the business or financial arrangements and relationships through which we sell, market and distribute any drug candidates for which we obtain marketing approval. In addition, we may be subject to physician payment transparency laws and patient privacy and security regulation by the federal government and by the U.S. states and foreign jurisdictions in which we conduct our business. The applicable federal, state and foreign healthcare laws that may affect our ability to operate include the following:

• the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or service, for which payment may be made, in whole or in part, under federal and state healthcare programs such as Medicare and Medicaid;

• federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government;

• the civil monetary penalties statute, which imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent;

• the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payor (e.g., public or private), knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false statements in connection with the delivery of, or payment for, healthcare benefits, items or services relating to healthcare matters;

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• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and its implementing regulations, which impose obligations on covered entities, including healthcare providers, health plans, and healthcare clearinghouses, as well as their respective business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;

• the federal Open Payments program, created under Section 6002 of the Patient Protection and Affordable Care Act, or the Affordable Care Act, and its implementing regulations, which imposed annual reporting requirements for manufacturers of drugs, devices, biologicals and medical supplies for certain payments and “transfers of value” provided to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members, where failure to submit timely, accurately and completely the required information for all covered payments, transfers of value and ownership or investment interests may result in civil monetary penalties; and

• analogous state and foreign laws, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Further, the Affordable Care Act, among other things, amended the intent requirement of the federal Anti-Kickback Statute and certain criminal statutes governing healthcare fraud. A person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it. In addition, the Affordable Care Act provided that the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act.

Efforts to ensure that our future business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. It is possible that governmental authorities will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable fraud and abuse or other healthcare laws. If our operations are found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, including, without limitation, damages, fines, imprisonment, exclusion from participation in government healthcare programs, such as Medicare and Medicaid, and the curtailment or restructuring of our operations, which could significantly harm our business. If any of the physicians or other healthcare providers or entities with whom we expect to do business, including our current and future collaborators, if any, are found not to be in compliance with applicable laws, those persons or entities may be subject to criminal, civil or administrative sanctions, including exclusion from participation in government healthcare programs, which could also affect our business.

The impact of recent healthcare reform legislation and other changes in the healthcare industry and healthcare spending on us is currently unknown, and may adversely affect our business model.

In the United States and some foreign jurisdictions, legislative and regulatory changes and proposed changes regarding the healthcare system could prevent or delay marketing approval of our drug candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any drug candidates for which we obtain marketing approval.

Our revenue prospects could be affected by changes in healthcare spending and policy in the United States and abroad. We operate in a highly regulated industry and new laws and judicial decisions, or new interpretations of existing laws or decisions, related to healthcare availability, the method of delivery or payment for healthcare products and services could negatively impact our business, financial condition, results of operations and prospects. There is significant interest in promoting healthcare reform, as evidenced by the enactment in the United States of the Affordable Care Act. Among other things, the Affordable Care Act contains provisions that may reduce the profitability of drug products, including, for example, revising the methodology by which rebates owed by manufacturers for covered outpatient drugs under the Medicaid Drug Rebate Program are calculated, extending the Medicaid Drug Rebate Program to utilization of prescriptions of individuals enrolled in Medicaid managed care plans, imposing mandatory discounts for certain Medicare Part D beneficiaries, and subjecting drug manufacturers to payment of an annual fee.

We expect that the Affordable Care Act, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or commercialize our drugs.

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It is likely that federal and state legislatures within the United States and foreign governments will continue to consider changes to existing healthcare legislation including the Affordable Care Act. We cannot predict the reform initiatives that may be adopted in the future or whether initiatives that have been adopted will be repealed or modified. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect:

• the demand for any drug products for which we may obtain marketing approval;

• our ability to set a price that we believe is fair for our products;

• our ability to obtain coverage and reimbursement approval for a product;

• our ability to generate revenues and achieve or maintain profitability; and

• the level of taxes that we are required to pay.

If we fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on our business, financial condition or results of operations.

Our research and development activities and our third-party manufacturers’ and suppliers’ activities involve the controlled storage, use, and disposal of hazardous materials, including the components of our product candidates and other hazardous compounds. We and our manufacturers and suppliers are subject to laws and regulations governing the use, manufacture, storage, handling, and disposal of these hazardous materials. In some cases, these hazardous materials and various wastes resulting from their use are stored at our and our manufacturers’ facilities pending their use and disposal. We cannot eliminate the risk of contamination, which could cause an interruption of our commercialization efforts, research and development efforts and business operations, environmental damage resulting in costly clean-up and liabilities under applicable laws and regulations governing the use, storage, handling, and disposal of these materials and specified waste products. Although we believe that the safety procedures utilized by us and our third-party manufacturers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials. In such an event, we may be held liable for any resulting damages and such liability could exceed our resources and state or federal or other applicable authorities may curtail our use of specified materials and/or interrupt our business operations. Furthermore, environmental laws and regulations are complex, change frequently, and have tended to become more stringent. We cannot predict the impact of such changes and cannot be certain of our future compliance. We do not currently carry biological or hazardous waste insurance coverage.

Other Risks Related to Our Business

If we fail to attract and retain key management and scientific personnel, we may be unable to successfully develop or commercialize our product candidates.

Our success as a specialty pharmaceutical company depends on our continued ability to attract, retain and motivate highly qualified management and scientific and clinical personnel. The loss of the services of any of our senior management could delay or prevent obtaining marketing approval or commercialization of our product candidates.

We may not be able to attract or retain qualified management and scientific personnel in the future due to the intense competition for a limited number of qualified personnel among specialty pharmaceutical businesses, and other pharmaceutical, biotechnology and other businesses. Our failure to attract, hire, integrate and retain qualified personnel could impair our ability to achieve our business objectives.

We will need to expand our organization and we may experience difficulties in managing this growth, which could disrupt our operations.

As of September 30, 2018, we had 19 full-time employees and no part-time employees, in addition to a number of consultants or independent contractors working with us. As our development and commercialization plans and strategies develop, we expect to need additional managerial, operational, sales, marketing, financial, legal and other resources. Our management may need to divert a significant amount of our attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. As we advance our product candidates through clinical trials, we will need to expand our development, regulatory, manufacturing, marketing and sales capabilities or contract with third parties to provide these capabilities for us. As our operations expand, we expect that we will need to manage additional relationships with such third parties, as well as additional collaborators and suppliers.

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We may not be able to effectively manage the expansion of our operations, which may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss of employees, and reduced productivity among remaining employees. Our expected growth could require significant capital expenditures and may divert financial resources from other projects, such as the development of additional product candidates. If our management is unable to effectively manage our growth, our expenses may increase more than expected, our ability to generate and/or grow revenue could be reduced and we may not be able to implement our business strategy. Our future financial performance and our ability to commercialize product candidates and compete effectively will depend, in part, on our ability to effectively manage any future growth.

We may not be able to win government, academic institution or non-profit contracts or grants.

From time to time, we may apply for contracts or grants from government agencies, non-profit entities and academic institutions. Such contracts or grants can be highly attractive because they provide capital to fund the ongoing development of our product candidates without diluting our stockholders. However, there is often significant competition for these contracts or grants. Entities offering contracts or grants may have requirements to apply for or to otherwise be eligible for certain contracts or grants that our competitors may be able to satisfy that we cannot. In addition, such entities may make arbitrary decisions as to whether to offer contracts or make grants, to whom the contracts or grants may or will be awarded and the size of the contracts or grants to each awardee. Even if we are able to satisfy the award requirements, there is no guarantee that we will be a successful awardee. Therefore, we may not be able to win any contracts or grants in a timely manner, if at all.

If a successful product liability claim or series of claims is brought against us for uninsured liabilities or in excess of insured liabilities, we could be forced to pay substantial damage awards.

The use of any of our product candidates in clinical trials, and the sale of any approved products, may expose us to product liability claims. We currently maintain product liability insurance coverage in amounts we consider to be reasonable for our stage of development. We intend to monitor the amount of coverage we maintain as the size and design of our clinical trials evolve, and if we are successful in obtaining approval to commercialize any of our product candidates, and adjust the amount of coverage we maintain accordingly. However, there is no assurance that such insurance coverage will fully protect us against some or all of the claims to which we might become subject. We might not be able to maintain adequate insurance coverage at a reasonable cost or in sufficient amounts or scope to protect us against potential losses. In the event a claim is brought against us, we might be required to pay legal and other expenses to defend the claim, as well as uncovered damages awards resulting from a claim brought successfully against us.

Furthermore, whether or not we are ultimately successful in defending any such claims, we might be required to direct financial and managerial resources to such defense and adverse publicity could result, all of which could harm our business.

Our employees, independent contractors, investigators, contract research organizations, consultants, collaborators and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading.

We are exposed to the risk that our employees and other third parties may engage in fraudulent conduct or other illegal activity. Misconduct by employees and other third parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violate FDA regulations, including those laws requiring the reporting of true, complete and accurate information to the FDA, manufacturing standards, federal and state healthcare fraud and abuse laws and regulations, or laws that require the reporting of financial information or data accurately. In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws intended to prevent fraud, kickbacks, self-dealing and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements. Activities subject to these laws also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. It is not always possible to identify and deter employee and other third-party misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws. If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate.

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Our internal computer systems, or those of our development collaborators, third-party clinical research organizations or other contractors or consultants, may fail or suffer cybersecurity or other security breaches, which could result in a material disruption of our product development programs.

Despite the implementation of security measures, our internal computer systems and those of our current and any future CROs and other contractors, consultants and collaborators are vulnerable to cybersecurity breaches and damage from computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures. While we have not experienced any such material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations. For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our marketing approval efforts and significantly increase our costs to recover or reproduce the data. Likewise, we intend to rely on third parties to manufacture our product candidates and conduct clinical trials, and similar events relating to their computer systems could also have a material adverse effect on our business. To the extent that any disruption or cybersecurity or other security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidates could be delayed.

We are involved in litigation that may be expensive and time consuming, and if resolved adversely, could harm our business, financial condition, or results of operations.

As described in Note 5 to our unaudited condensed consolidated financial statements included in this report, Piper Jaffray & Co. has filed a lawsuit against Private Acer alleging breach of contract. Defending against this lawsuit may be costly and may significantly divert the time and attention of our management from our operations. There can be no assurance that a favorable outcome will be obtained. A negative outcome, whether by final judgment or an unfavorable settlement, could result in payment of significant monetary damages and could adversely affect our financial condition and results of operations.

Risks Related to Commercialization of Our Product Candidates

Our product candidate EDSIVO^TM has not been approved for any indication in the United States, which may result in greater research and development expenses, regulatory issues that could delay or prevent approval, or discovery of unknown or unanticipated adverse effects.

EDSIVO^TM is a repurposing of celiprolol for the treatment of vEDS. An NDA for this drug for the treatment of hypertension was submitted to the FDA in 1987, however, the NDA was withdrawn prior to review. Celiprolol has, however, been approved in Europe for the treatment of hypertension since 1984. Regulatory approval of EDSIVO^TM may be more expensive and take longer than for other, more well-known or extensively studied pharmaceutical product candidates due to our and regulatory agencies’ lack of experience with celiprolol. The novelty of this product candidate may lengthen the regulatory review process, require us to conduct additional studies or clinical trials, increase our development costs, lead to changes in regulatory positions and interpretations, delay or prevent approval and commercialization of our product candidates or lead to significant post-approval limitations or restrictions. There is also an increased risk that we may discover previously unknown or unanticipated adverse effects during our clinical trials and beyond. Any such events could adversely impact our business prospects, financial condition and results of operations.

Even if we obtain the required regulatory approvals in the United States and other territories, the commercial success of our product candidates will depend on market awareness and acceptance of our product candidates.

Even if we obtain marketing approval for our current product candidates or any other product candidates that we may develop or acquire in the future, the products may not gain market acceptance among physicians, key opinion leaders, healthcare payors, patients and the medical community. Market acceptance of any approved products depends on a number of factors, including:

• the timing of market introduction;

• the efficacy and safety of the product, as demonstrated in clinical trials;

• the clinical indications for which the product is approved and the label approved by regulatory authorities for use with the product, including any precautions, warnings or contraindications that may be required on the label;

• acceptance by physicians, key opinion leaders and patients of the product as a safe and effective treatment;

• the cost, safety and efficacy of treatment in relation to alternative treatments;

• the availability of coverage and adequate reimbursement and pricing by third-party payors and government authorities;

• the number and clinical profile of competing products;

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• the growth of drug markets in our various indications;

• relative convenience and ease of administration;

• marketing and distribution support;

• the prevalence and severity of adverse side effects; and

• the effectiveness of our sales and marketing efforts.

Market acceptance is critical to our ability to generate revenue. Any product candidate, if approved and commercialized, may be accepted in only limited capacities or not at all. If any approved products are not accepted by the market to the extent that we expect, we may not be able to generate revenue and our business would suffer.

If the market opportunities for our product candidates are smaller than we believe they are, then our revenues may be adversely affected and our business may suffer.

The diseases that our current and future product candidates are being developed to address are rare. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidates, and our assumptions relating to pricing are based on estimates. Given the small number of patients who have the diseases that we are targeting, our eligible patient population and pricing estimates may differ significantly from the actual market addressable by our product candidates.

Currently, most reported estimates of the prevalence of vEDS, UCD and MSUD are based on studies of small subsets of the population of specific geographic areas, which are then extrapolated to estimate the prevalence of the diseases in the broader world population. It is difficult to precisely measure the incidence or prevalence of vEDS in any population. Studies estimate the prevalence of vEDS as ranging from approximately 1 in 90,000 to 1 in 250,000. In 2017, we commissioned a patient-finder study that phenotypically identified 4,169 vEDS patients in the United States from an analysis of a commercially available patient claims database, with data of over 180 million unique patient lives. Based on that information, we estimate the prevalence of phenotypically-defined vEDS in the United States could be greater than 1 in 45,000. Studies indicate that MSUD affects an estimated 1 in 185,000 infants worldwide. Approximately 3,000 patients suffer from MSUD worldwide, of whom approximately 800 are located in the United States. It is estimated that vEDS, UCD and MSUD collectively impact approximately 7,000 patients in the United States. As new studies are performed the estimated prevalence of these diseases may change. The number of patients may turn out to be lower than expected. There can be no assurance that the prevalence of vEDS, UCD or MSUD in the study populations accurately reflect the prevalence of these diseases in the broader world population. If our estimates of the prevalence of vEDS, UCD or MSUD or of the number of patients who may benefit from treatment with EDSIVO^TM or ACER-001 prove to be incorrect, the market opportunities for our product candidates may be smaller than we believe they are, our prospects for generating revenue may be adversely affected and our business may suffer. Likewise, the potentially addressable patient population for each of our product candidates may be limited or may not be amenable to treatment with our product candidates, and new patients may become increasingly difficult to identify or gain access to, which would adversely affect our business, financial condition, results of operations and prospects.

We currently have limited marketing and sales experience. If we are unable to establish sales and marketing capabilities or enter into agreements with third parties to market and sell ourproduct candidates, we may be unable to generate any revenue.

We have never commercialized a product candidate, and we currently have no marketing and sales organization. To the extent our product candidates are approved for marketing, if we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell our product candidates, we may not be able to effectively market and sell our product candidates or generate product revenue.

We have never commercialized a product candidate, and we currently do not have marketing, sales or distribution capabilities for our product candidates. In order to commercialize any of our products that receive marketing approval, we would have to build marketing, sales, medical affairs, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services, and we may not be successful in doing so. In the event of successful development of our product candidates, if we elect to build a targeted specialty sales force, such an effort would be expensive and time consuming. Any failure or delay in the development of our internal sales, marketing and distribution capabilities would adversely impact the commercialization of these products. We may choose to collaborate with third parties that have their own sales forces and established distribution systems, in lieu of or to augment any sales force and distribution systems we may create. If we are unable to enter into collaborations with third parties for the commercialization of approved products, if any, on acceptable terms or at all, or if any such collaborator does not devote sufficient resources to the commercialization of our product or otherwise fails in commercialization efforts, we may not be able to successfully commercialize our product candidates if we receive marketing approval. If we are not successful in commercializing our product candidates, either on our own or through collaborations with one or more third parties, our future revenue will be materially and adversely impacted.

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If we fail to enter into strategic relationships or collaborations, our business, financial condition, commercialization prospects and results of operations may be materially adversely affected.

Our product development programs and the potential commercialization of our current product candidates will require substantial additional cash to fund expenses. Therefore, in addition to financing the development of our product candidates through additional equity financings or through debt financings, we may decide to enter into collaborations with pharmaceutical or biopharmaceutical companies for the development and potential commercialization of our product candidates.

We face significant competition in seeking appropriate collaborators. Collaborations are complex and time-consuming to negotiate and document. We may also be restricted under existing and future collaboration agreements from entering into agreements on certain terms with other potential collaborators. We may not be able to negotiate collaborations on acceptable terms, or at all. If that were to occur, we may have to curtail the development of a particular product, reduce or delay one or more of our development programs, delay our potential commercialization or reduce the scope of our sales or marketing activities, or increase our expenditures and undertake development or commercialization activities at our own expense. If we elect to increase our expenditures to fund development or commercialization activities on our own, we may need to obtain additional capital, which may not be available to us on acceptable terms or at all. If we do not have sufficient funds, we will not be able to bring our product candidates to market and generate product revenue. If we do enter into a collaboration agreement, it could be subject to the following risks, each of which may materially harm our business, commercialization prospects and financial condition:

• we may not be able to control the amount or timing of resources that the collaborator devotes to the product development program;

• the collaborator may experience financial difficulties and thus not commit sufficient financial resources to the product development program;

• we may be required to relinquish important rights such as marketing, distribution and intellectual property rights;

• a collaborator could move forward with a competing product developed either independently or in collaboration with third parties, including our competitors; or

• business combinations or significant changes in a collaborator’s business strategy may adversely affect our willingness to complete our obligations under any arrangement.

Coverage and reimbursement may be limited or unavailable in certain market segments for our product candidates, which could make it difficult for us to sell our products profitably.

There is significant uncertainty related to third-party coverage and reimbursement of newly approved pharmaceuticals. Market acceptance and sales of any approved product candidates will depend significantly on the availability of coverage and adequate reimbursement from third-party payors and may be affected by existing and future healthcare reform measures. Patients who are prescribed treatments for their conditions and providers performing the prescribed services generally rely on third-party payors to reimburse all or part of the associated healthcare costs. Government authorities and third-party payors, such as private health insurers, health maintenance organizations, and government payors like Medicare and Medicaid, decide which drugs they will pay for and establish reimbursement levels. Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for drugs and products. Coverage and reimbursement may not be available for any product that we commercialize and, even if coverage is provided, the level of reimbursement may not be satisfactory. Inadequate reimbursement levels may adversely affect the demand for, or the price of, any drug candidate for which we obtain marketing approval.

Reimbursement by a third-party payor may depend upon a number of factors, including the third-party payor’s determination that use of a product is, among other things:

• a covered benefit under its health plan;

• safe, effective and medically necessary;

• appropriate for the specific patient;

• cost-effective; and

• neither experimental nor investigational.

Obtaining coverage and adequate reimbursement approval for a product from a government or other third-party payor is a time consuming and costly process that could require us to conduct expensive pharmacoeconomic studies and provide supporting scientific, clinical and cost-effectiveness data for the use of our products to the payor. We may not be able to provide data sufficient to gain acceptance with respect to coverage and adequate reimbursement. In addition to examining the medical necessity and cost-effectiveness of new products, coverage may be limited to specific drug products on an approved list, or formulary, which might not include all of the FDA-approved drug products for a particular indication. There may also be formulary placements that result in

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lower reimbursement levels and higher cost-sharing borne by patients, any of which could have an adverse effect on our revenues and profits. Moreover, a third-party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. Additionally, coverage and reimbursement for drug products can differ significantly from payor to payor. One third-party payor’s decision to cover a particular drug product does not ensure that other payors will also provide coverage for the drug product, or even if coverage is available, establish an adequate reimbursement rate. In addition, pricing of orphan and rare disease drug treatments is under increased pressure given the overall health care cost climate generally, and pricing of pharmaceutical products specifically.

We cannot be sure that coverage or adequate reimbursement will be available for any of our product candidates. Also, we cannot be sure that reimbursement amounts will not reduce the demand for, or the price of, our products. If reimbursement is not available or is available only to limited levels, we may not be able to commercialize certain of our products. In the United States, third-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement of new drugs. Third-party payors are increasingly challenging the prices charged for medical products and services, examining the medical necessity and reviewing the cost-effectiveness of drug products and medical services and questioning safety and efficacy. As a result, significant uncertainty exists as to whether and how much third-party payors will reimburse patients for their use of newly approved drugs, which in turn will put pressure on the pricing of drugs. Additionally, emphasis on managed care in the United States has increased and we expect will continue to increase the pressure on drug pricing. If third-party payors do not consider our products to be cost-effective compared to other available therapies, they may not cover the products for which we receive FDA approval or, if they do, the level of payment may not be sufficient to allow us to sell our products at a profit.

Coverage policies, third-party reimbursement rates and drug pricing regulation may change at any time, and there is the potential for significant movement in these areas in the foreseeable future. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive marketing approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

We face substantial competition, which may result in others discovering, developing or commercializing products before, or more successfully, than we do.

The life sciences industry is highly competitive, and we face significant competition from many pharmaceutical, biopharmaceutical and biotechnology companies that are generally developing and marketing therapeutic products. Such competition may include large pharmaceutical and biotechnology companies, specialty pharmaceutical and generic companies and medical technology companies. Our future success depends on our ability to demonstrate and maintain a competitive advantage with respect to the design, development and commercialization of our product candidates for the treatment of orphan and ultraorphan diseases for which there is a small patient population in the United States. A drug designated an orphan drug may receive up to seven years of exclusive marketing in the United States for that indication. Our objective is to design, develop and commercialize product candidates by repurposing or reformulating existing drugs for orphan diseases with significant unmet medical need.

Many of our potential competitors have significantly greater financial, manufacturing, marketing, development, technical and human resources than we do. Large pharmaceutical and biotechnology companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting patients and in manufacturing clinical products. These companies also have significantly greater research and marketing capabilities than we do and may also have products that have been approved or are in late stages of development, and have collaborative arrangements in our target markets with leading companies and research institutions. Established companies may also invest heavily to accelerate discovery and development of compounds that could make the product candidates that we develop obsolete. As a result of all of these factors, the obtaining of orphan drug designation for our product candidates is essential to our viability since our competitors may, among other things:

• have greater name and brand recognition, financial and human resources;

• develop and commercialize products that are safer, more effective, less expensive, or more convenient or easier to administer;

• obtain quicker marketing approval;

• establish superior proprietary positions;

• have access to more manufacturing capacity;

• implement more effective approaches to sales and marketing; or

• form more advantageous strategic alliances.

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Should any of these events occur, our business, financial condition, results of operations, and prospects could be materially adversely affected. If we are not able to compete effectively against potential competitors, our business will not grow and our financial condition and operations will suffer.

We believe that our ability to successfully compete will depend on our ability to obtain orphan drug designation as well as:

• our ability to design and successfully execute appropriate clinical trials;

• our ability to recruit and enroll patients for our clinical trials;

• the results of our clinical trials and the efficacy and safety of our product candidates;

• the speed at which we develop our product candidates;

• achieving and maintaining compliance with regulatory requirements applicable to our business;

• the timing and scope of regulatory approvals, including labeling;

• adequate levels of reimbursement under private and governmental health insurance plans, including Medicare and Medicaid;

• our ability to protect intellectual property rights related to our product candidates;

• our ability to commercialize and market any of our product candidates that may receive marketing approval;

• our ability to manufacture and sell commercial quantities of any approved product candidates to the market;

• acceptance of our product candidates by physicians, other healthcare providers and patients; and

• the cost of treatment in relation to alternative therapies.

If our competitors are able to obtain orphan drug exclusivity for their products that are the same drug as our product candidates, we may not be able to have competing products approved by the applicable regulatory authority for a significant period of time or benefit from that exclusivity.

We have orphan drug exclusivity designation in the United States for EDSIVO^TM for vEDS and ACER-001 for MSUD. We expect to seek orphan drug exclusivity from the European Medicines Agency, or the EMA, for ACER-001 for MSUD, however, there can be no assurance that we will be successful. If we are unable to maintain our current orphan drug exclusivity or are unable to secure orphan status in Europe for ACER-001 for MSUD, it may have a material negative effect on our business.

Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, that product is entitled to a period of marketing exclusivity, which precludes the applicable regulatory authority from approving another marketing application for the same drug for the same indication for that time period. The applicable period is seven years in the United States and ten years in the European Union. The exclusivity period in the European Union can be reduced to six years if the product no longer meets the criteria for orphan drug designation or if its commercialization is sufficiently profitable so that market exclusivity is no longer justified. Orphan drug exclusivity may be lost if the FDA or the EMA determines that the request for designation was materially defective or if the manufacturer is unable to ensure sufficient quantity of the product to meet the needs of patients with the rare disease or condition. Maintaining and/or obtaining orphan drug exclusivity for EDSIVO^TM and ACER-001 may be important to the product candidate’s success. Even if we obtain orphan drug exclusivity, we may not be able to maintain it. For example, if a competitive product that treats the same disease as our product candidate is shown to be clinically superior to our product candidate, any orphan drug exclusivity we have obtained will not block the approval of such competitive product and we may effectively lose what had previously been orphan drug exclusivity. Orphan drug exclusivity for EDSIVO^TM or ACER-001 also will not bar the FDA from approving another celiprolol drug product or a sodium phenylbutyrate, or NaPB product, for another indication. In the United States, reforms to the Orphan Drug Act, if enacted, could also materially affect our ability to maintain orphan drug exclusivity for EDSIVO^TM for vEDS and ACER-001 for MSUD.

Price controls may be imposed in foreign markets, which may adversely affect our future profitability.

In some countries, particularly member states of the European Union, the pricing of prescription drugs is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after receipt of marketing approval for a product. In addition, there can be considerable pressure by governments and other stakeholders on prices and reimbursement levels, including as part of cost containment measures. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. Reference pricing used by various European Union member states and parallel distribution, or arbitrage between low-priced and high-priced member states, can further reduce prices. In some countries, we may be required to conduct a clinical trial or other studies that compare the cost-effectiveness of our product candidates to other available therapies in order to obtain or maintain reimbursement or pricing

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approval. Publication of discounts by third-party payors or authorities may lead to further pressure on the prices or reimbursement levels within the country of publication and other countries. If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be adversely affected.

Rapid technological change could make our product candidates obsolete.

Pharmaceutical technologies have undergone rapid and significant change, and we expect that they will continue to do so. As a result, there is significant risk that our product candidates may be rendered obsolete or uneconomical by new discoveries before we recover all or any expenses incurred in connection with their development. If our product candidates are rendered obsolete by advancements in pharmaceutical technologies, our business will suffer.

Government controls and healthcare reform measures could adversely affect our business.

The business and financial condition of pharmaceutical and biotechnology companies are affected by the efforts of governmental and third-party payors to contain or reduce the costs of healthcare. In the United States and in foreign jurisdictions, there have been, and we expect that there will continue to be, a number of legislative and regulatory proposals aimed at changing the healthcare system. For example, in some foreign countries, particularly in Europe, the pricing of prescription pharmaceuticals is subject to governmental control. In these countries, pricing negotiations with governmental authorities can take considerable time after the receipt of marketing approval for a product candidate. To obtain reimbursement or pricing approval in some countries, we may be required to conduct additional clinical trials that compare the cost-effectiveness of any product candidate to other available therapies. If reimbursement of any product candidate is unavailable or limited in scope or amount in a particular country, or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability in such country. In the United States, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, or MMA, changed the way Medicare covers and pays for pharmaceutical products. The legislation established Medicare Part D, which expanded Medicare coverage for outpatient prescription drug purchases by the elderly but provided authority for limiting the number of drugs that will be covered in any therapeutic class. The MMA also introduced a new reimbursement methodology based on average sales prices for physician-administered drugs. Any negotiated prices for any product candidate covered by a Part D prescription drug plan will likely be lower than the prices that might otherwise be obtained outside of the Medicare Part D prescription drug plan. Moreover, while Medicare Part D applies only to drug benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own payment rates. Any reduction in payment under Medicare Part D may result in a similar reduction in payments from non-governmental payors.

The United States and several other jurisdictions are considering, or have already enacted, a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell any product candidate. Among policy-makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access to healthcare. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. There have been, and likely will continue to be, legislative and regulatory proposals at the federal and state levels directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. We cannot predict the initiatives that may be adopted in the future. The continuing efforts of the government, insurance companies, managed care organizations and other payors of healthcare services to contain or reduce costs of healthcare may adversely affect: the demand for any product candidate; the ability to set a price that we believe is fair for any product candidate; our ability to generate revenues and achieve or maintain profitability; the level of taxes that we are required to pay; and the availability of capital.

Risks Related to Third Parties

We rely on third-party suppliers and other third parties for production of our product candidates and our dependence on these third parties may impair the advancement of our research and development programs and the development of our product candidates.

We do not currently own or operate manufacturing facilities for clinical or commercial production of our product candidates. We lack the resources and the capability to manufacture any of our product candidates on a clinical or commercial scale. Instead, we rely on, and expect to continue to rely on, third parties for the supply of raw materials and manufacture of drug supplies necessary to conduct our preclinical studies and clinical trials. Our reliance on third parties may expose us to more risk than if we were to manufacture our current product candidates or other products ourselves. Delays in production by third parties could delay our clinical trials or have an adverse impact on any commercial activities. In addition, the fact that we are dependent on third parties for the manufacture of and formulation of our product candidates means that we are subject to the risk that the products may have manufacturing defects that we have limited ability to prevent or control. Although we oversee these activities to ensure compliance with our quality standards, budgets and timelines, we have had and will continue to have less control over the manufacturing of our product candidates than potentially would be the case if we were to manufacture our product candidates. Further, the third parties we

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deal with could have staffing difficulties, might undergo changes in priorities or may become financially distressed, which would adversely affect the manufacturing and production of our product candidates. In addition, a third party could be acquired by, or enter into an exclusive arrangement with, one of our competitors, which would adversely affect our ability to access the formulations we require.

The facilities used by our current contract manufacturers and any future manufacturers to manufacture our product candidates must be inspected by the FDA after we submit our NDA. We do not control the manufacturing process of, and are completely dependent on, our contract manufacturers for compliance with the regulatory requirements, known as cGMPs, for manufacture of both active drug substances and finished drug products. If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others, the FDA may refuse to approve our NDA. If the FDA or a comparable foreign regulatory authority does not approve our NDA because of concerns about the manufacture of our product candidates or if significant manufacturing issues arise in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop our product candidates, to obtain marketing approval of our NDA or to continue to market our product candidates, if approved. Although we are ultimately responsible for ensuring compliance with these regulatory requirements, we do not have day-to-day control over a contract manufacturing organization, or CMO, or other third-party manufacturer’s compliance with applicable laws and regulations, including cGMPs and other laws and regulations, such as those related to environmental health and safety matters. Any failure to achieve and maintain compliance with these laws, regulations and standards could subject us to the risk that we may have to suspend the manufacturing of our product candidates or that obtained approvals could be revoked, which would adversely affect our business and reputation. In addition, third-party contractors, such as our CMOs, may elect not to continue to work with us due to factors beyond our control. They may also refuse to work with us because of their own financial difficulties, business priorities or other reasons, at a time that is costly or otherwise inconvenient for us. If we were unable to find adequate replacement or another acceptable solution in time, our clinical trials could be delayed or our commercial activities could be harmed.

Problems with the quality of the work of third parties may lead us to seek to terminate our working relationships and use alternative service providers. However, making this change may be costly and may delay clinical trials. In addition, it may be very challenging, and in some cases impossible, to find replacement service providers that can develop and manufacture our drug candidates in an acceptable manner and at an acceptable cost and on a timely basis. The sale of products containing any defects or any delays in the supply of necessary services could adversely affect our business, financial condition, results of operations, and prospects.

Growth in the costs and expenses of components or raw materials may also adversely affect our business, financial condition, results of operations, and prospects. Supply sources could be interrupted from time to time and, if interrupted, supplies may not be resumed (whether in part or in whole) within a reasonable timeframe and at an acceptable cost or at all.

We plan to rely on third parties to conduct clinical trials for our product candidates. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, it may cause delays in commencing and completing clinical trials of our product candidates or we may be unable to obtain marketing approval for or commercialize our product candidates.

Clinical trials must meet applicable FDA and foreign regulatory requirements. We do not have the ability to independently conduct Phase 2 or Phase 3 clinical trials for any of our product candidates. We expect to rely on third parties, such as CROs, medical institutions, clinical investigators and contract laboratories, to conduct all of our clinical trials of our product candidates; however, we remain responsible for ensuring that each of our clinical trials is conducted in accordance with our investigational plan and protocol. Moreover, the FDA and other foreign regulatory authorities require us to comply with IND and human subject protection regulations and current good clinical practice standards, commonly referred to as GCPs, for conducting, monitoring, recording, and reporting the results of clinical trials to ensure that the data and results are scientifically credible and accurate and that the trial subjects are adequately informed of the potential risks of participating in clinical trials. Our reliance on third parties does not relieve us of these responsibilities and requirements. Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites. If we or any of our third-party contractors fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications. There is no assurance that upon inspection by a given regulatory authority, such regulatory authority will determine that any of our clinical trials comply with GCPs. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the marketing approval process.

There are significant requirements imposed on us and on clinical investigators who conduct clinical trials that we sponsor. Although we are responsible for selecting qualified CROs or clinical investigators, providing them with the information they need to conduct the clinical trials properly, ensuring proper monitoring of the clinical trials, and ensuring that the clinical trials are conducted in accordance with the general investigational plan and protocols contained in the IND, we cannot ensure that the CROs or clinical investigators will maintain compliance with all regulatory requirements at all times. The pharmaceutical industry has experienced cases where clinical investigators have been found to incorrectly record data, omit data, or even falsify data. We cannot ensure that the CROs or clinical investigators in our trials will not make mistakes or otherwise compromise the integrity or validity of data, any of which would have a significant negative effect on our ability to obtain marketing approval, our business, and our financial condition.

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We or the third parties we rely on may encounter problems in clinical trials that may cause us or the FDA or foreign regulatory agencies to delay, suspend or terminate our clinical trials at any phase. These problems could include the possibility that we may not be able to manufacture sufficient quantities of materials for use in our clinical trials, conduct clinical trials at our preferred sites, enroll a sufficient number of patients for our clinical trials at one or more sites, or begin or successfully complete clinical trials in a timely fashion, if at all. Furthermore, we, the FDA or foreign regulatory agencies may suspend clinical trials of our product candidates at any time if we or they believe the subjects participating in the trials are being exposed to unacceptable health risks, whether as a result of adverse events occurring in our trials or otherwise, or if we or they find deficiencies in the clinical trial process or conduct of the investigation.

The FDA and foreign regulatory agencies could also require additional clinical trials before or after granting of marketing approval for any products, which would result in increased costs and significant delays in the development and commercialization of such products and could result in the withdrawal of such products from the market after obtaining marketing approval. Our failure to adequately demonstrate the safety and efficacy of a product candidate in clinical development could delay or prevent obtaining marketing approval of the product candidate and, after obtaining marketing approval, data from post-approval studies could result in the product being withdrawn from the market, either of which would likely have a material adverse effect on our business.

Risks Related to Our Intellectual Property

Our proprietary rights may not adequately protect our technologies and product candidates.

Our commercial success will depend in part on our ability to obtain patents and protect our existing patent position as well as our ability to maintain adequate protection of other intellectual property for our technologies, product candidates, and any future products in the United States and other countries. If we do not adequately protect our intellectual property, competitors may be able to use our technologies and erode or negate any competitive advantage we may have, which could harm our business and ability to achieve profitability. The laws of some foreign countries do not protect our proprietary rights to the same extent or in the same manner as U.S. laws, and we may encounter significant problems in protecting and defending our proprietary rights in these countries. We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies, product candidates and any future products are covered by valid and enforceable patents or are effectively maintained as trade secrets.

We apply for patents covering both our technologies and product candidates, as we deem appropriate. However, we may fail to apply for patents on important technologies or product candidates in a timely fashion, or at all. Our existing patents and any future patents we obtain may not be sufficiently broad to prevent others from practicing our technologies or from developing competing products and technologies. We cannot be certain that our patent applications will be approved or that any patents issued will adequately protect our intellectual property.

While we are responsible for and have control over the filing and prosecuting of patent applications and maintaining patents which cover making, using or selling EDSIVO^TM and ACER-001, we may lose any such rights if we decide to allow any licensed patent to lapse. If we fail to appropriately prosecute and maintain patent protection for any of our product candidates, our ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products.

Moreover, the patent positions of pharmaceutical companies are highly uncertain and involve complex legal and factual questions for which important legal principles are evolving and remain unresolved. As a result, the validity and enforceability of patents cannot be predicted with certainty. In addition, we do not know whether:

• we or our licensors were the first to make the inventions covered by each of our issued patents and pending patent applications;

• we or our licensors were the first to file patent applications for these inventions;

• any of the patents that cover our product candidates will be eligible to be listed in the FDA’s compendium of “Approved Drug Products with Therapeutic Equivalence Evaluation,” sometimes referred to as the FDA’s Orange Book;

• others will independently develop similar or alternative technologies or duplicate any of our technologies;

• any of our or our licensors’ pending patent applications will result in issued patents;

• any of our or our licensors’ patents will be valid or enforceable;

• any patents issued to us or our licensors and collaborators will provide us with any competitive advantages, or will be challenged by third parties;

• we will develop additional proprietary technologies that are patentable;

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• the U.S. government will exercise any of its statutory rights to our intellectual property that was developed with government funding; or

• our business may infringe the patents or other proprietary rights of others.

The actual protection afforded by a patent varies based on products or processes, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory related extensions, the availability of legal remedies in a particular country, the validity and enforceability of the patents and our financial ability to enforce our patents and other intellectual property. Our ability to maintain and solidify our proprietary position for our products will depend on our success in obtaining effective claims and enforcing those claims once granted. Our issued patents and those that may issue in the future, or those licensed to us, may be challenged, narrowed, invalidated or circumvented, and the rights granted under any issued patents may not provide us with proprietary protection or competitive advantages against competitors with similar products. Due to the extensive amount of time required for the development, testing and regulatory review of a potential product, it is possible that, before any of our product candidates can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of the patent.

We may also rely on trade secrets to protect some of our technology, especially where we do not believe patent protection is appropriate or obtainable. However, trade secrets are difficult to maintain. While we use reasonable efforts to protect our trade secrets, we or any of our collaborators’ employees, consultants, contractors or scientific and other advisors may unintentionally or willfully disclose our proprietary information to competitors and we may not have adequate remedies in respect of that disclosure. Enforcement of claims that a third party has illegally obtained and is using trade secrets is expensive, time consuming and uncertain. In addition, foreign courts are sometimes less willing than U.S. courts to protect trade secrets. If our competitors independently develop equivalent knowledge, methods and know-how, we would not be able to assert our trade secrets against them and our business could be harmed.

We are a party to license agreements under which we license intellectual property and receive commercialization rights relating to EDSIVO^TM and ACER-001. If we fail to comply with obligations in such agreements or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business; any termination of such agreements would adversely affect our business.

In April 2014, we entered into an agreement with Baylor College of Medicine pursuant to which we obtained an exclusive worldwide license to develop and commercialize NaPB (ACER-001) for treatment of MSUD. In August 2016, we entered into an agreement with Assistance Publique—Hôpitaux de Paris, Hôpital Européen Georges Pompidou, or AP-HP, pursuant to which we obtained an exclusive worldwide right to access and use data from the Ong trial, which we are using to support an NDA filing for EDSIVO^TM for the treatment of vEDS. In September 2018, we entered into an additional agreement with AP-HP pursuant to which we obtained the exclusive worldwide intellectual property rights to three European patent applications relating to certain uses of celiprolol including (i) the optimal dose of celiprolol in treating vEDS patients, (ii) the use of celiprolol during pregnancy and (iii) the use of celiprolol to treat kyphoscoliotic Ehlers-Danlos syndrome (type VI). Under each license agreement, we are subject to commercialization and development diligence obligations, royalty payments and other obligations. If we fail to comply with any of these obligations or otherwise breach any of these license agreements, the licensor may have the right to terminate the license in whole or in part or to terminate the exclusive nature of the license. The loss of the licenses granted to us under our agreements with these licensors or the rights provided therein would prevent us from developing, manufacturing or marketing products covered by the license or subject to supply commitments, and could materially harm our business, financial condition, results of operations and prospects.

We may not be able to protect our intellectual property rights throughout the world.

Filing, prosecuting and defending patents on product candidates in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States can be less extensive than those in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as federal and state laws in the United States. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions. Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement rights are not as strong as those in the United States. These products may compete with our product candidates in jurisdictions where we do not have any issued patents and our patent claims or other intellectual rights may not be effective or sufficient to prevent them from so competing.

Many companies have encountered significant problems in protecting and defending intellectual property rights in foreign jurisdictions. The legal systems of certain countries do not favor the enforcement of patents and other intellectual property protection, which could make it difficult for us to stop the infringement of our patents generally. Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put

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our patents at risk of being invalidated or interpreted narrowly and our patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

The patent protection for our product candidates may expire before we are able to maximize their commercial value, which may subject us to increased competition and reduce or eliminate our opportunity to generate product revenue.

The patents for our product candidates have varying expiration dates and, if these patents expire, we may be subject to increased competition and we may not be able to recover our development costs or market any of our approved products profitably. In some of the larger potential market territories, such as the United States and Europe, patent term extension or restoration may be available to compensate for time taken during aspects of the product’s development and regulatory review. For example, depending on the timing, duration and specifics of FDA marketing approval of our product candidates, if any, one of the U.S. patents covering each of such approved product(s) or the use thereof may be eligible for up to five years of patent term restoration under the Hatch-Waxman Act. The Hatch-Waxman Act allows a maximum of one patent to be extended per FDA-approved product. Patent term extension also may be available in certain foreign countries upon regulatory approval of our product candidates.

Nevertheless, we may not be granted patent term extension either in the United States or in any foreign country because of, for example, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover, the term of extension, as well as the scope of patent protection during any such extension, afforded by the governmental authority could be less than we request. In addition, even though some regulatory authorities may provide some other exclusivity for a product under their own laws and regulations, we may not be able to qualify the product or obtain the exclusive time period. If we are unable to obtain patent term extension/restoration or some other exclusivity, we could be subject to increased competition and our opportunity to establish or maintain product revenue could be substantially reduced or eliminated. Furthermore, we may not have sufficient time to recover our development costs prior to the expiration of our U.S. and foreign patents.

Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

The United States Patent and Trademark Office, or USPTO, and various foreign governmental patent agencies require compliance with a number of procedural, documentary, fee payment and other similar provisions during the patent prosecution process. Periodic maintenance fees, renewal fees, annuity fees and various other governmental fees on any issued patent and/or pending patent applications are due to be paid to the USPTO and foreign patent agencies in several stages over the lifetime of a patent or patent application. We employ an outside firm and rely on our outside counsel to pay these fees. While an inadvertent lapse may sometimes be cured by payment of a late fee or by other means in accordance with the applicable rules, there are many situations in which noncompliance can result in abandonment or lapse of the patent or patent application, resulting in partial or complete loss of patent rights in the relevant jurisdiction. If we fail to maintain the patents and patent applications directed to our product candidates, our competitors might be able to enter the market earlier than should otherwise have been the case, which would have a material adverse effect on our business.

We may become involved in lawsuits to protect our patents or other intellectual property rights, which could be expensive, time-consuming and ultimately unsuccessful.

Competitors may infringe our patents or other intellectual property rights. To counter infringement or unauthorized use, we may be required to file infringement claims, directly or through our licensors, which can be expensive and time consuming. In addition, in an infringement proceeding, a court may decide that a patent of our licensor is not valid or is unenforceable, or may refuse to stop the other party from using the technology at issue on the grounds that our patents do not cover the technology in question. An adverse result in any litigation or defense proceedings could put one or more of the patents we license at risk of being invalidated or interpreted narrowly and could put our licensors’ patent applications at risk of not issuing.

Interference proceedings brought by the USPTO may be necessary to determine the priority of inventions with respect to our patents or the patents of our licensors. An unfavorable outcome could require us to cease using the technology or to attempt to license rights to it from the prevailing party. Our business could be harmed if a prevailing party does not offer us a license on terms that are acceptable to us. Litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distraction of our management and other employees. We may not be able to prevent, alone or with our licensors, misappropriation of our proprietary rights, particularly in countries where the laws may not protect those rights as fully as in the United States. In addition, potential infringers of our intellectual property rights may have substantially more resources than we do to defend their position, which could adversely affect the outcome of any such dispute.

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Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential and proprietary information could be compromised by disclosure during this type of litigation. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

Third-party claims of intellectual property infringement or misappropriation may adversely affect our business and could prevent us from developing or commercializing our product candidates.

Our commercial success depends in part on us not infringing the patents and proprietary rights of third parties. There is a substantial amount of litigation, both within and outside the United States, involving patent and other intellectual property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions, ex-parte review and inter partes reexamination and post-grant review proceedings before the USPTO and corresponding foreign patent offices. Numerous U.S. and foreign issued patents and pending patent applications owned by third parties exist in the fields in which we are developing and may develop our product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our product candidates may be subject to claims of infringement of the patent rights of third parties. If a third party claims that we infringe on their products or technology, we could face a number of issues, including:

• infringement and other intellectual property claims which, with or without merit, can be expensive and time-consuming to litigate and can divert management’s attention from our core business;

• substantial damages for past infringement, which we may have to pay if a court decides that our product infringes on a competitor’s patent;

• a court prohibiting us from selling or licensing our product unless the patent holder licenses the patent to us, which the collaborator would not be required to do;

• if a license is available from a patent holder, we may have to pay substantial royalties or grant cross licenses to our patents; and

• redesigning our processes so they do not infringe, which may not be possible or could require substantial funds and time.

Third parties may assert that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of our product candidates that we failed to identify. For example, applications filed before November 29, 2000 and certain applications filed after that date that will not be filed outside the United States remain confidential until issued as patents. Except for the preceding exceptions, patent applications in the United States and elsewhere are generally published only after a waiting period of approximately 18 months after the earliest filing. Therefore, patent applications covering our product candidates could have been filed by others without the knowledge of us or our licensors. Additionally, pending patent applications which have been published can, subject to certain limitations, be later amended in a manner that could cover our product candidates or the use or manufacture of our product candidates. We may also face a claim of misappropriation if a third party believes that we inappropriately obtained and used trade secrets of such third party. If we are found to have misappropriated a third party’s trade secrets, we may be prevented from further using such trade secrets, limiting our ability to develop our product candidates, and we may be required to pay damages.

If any third-party patents were held by a court of competent jurisdiction to cover aspects of our materials, formulations, methods of manufacture or methods for treatment, the holders of any such patents would be able to block our ability to develop and commercialize the applicable product candidate until such patent expired or unless we obtain a license. These licenses may not be available on acceptable terms, if at all. Even if we were able to obtain a license, the rights may be nonexclusive, which could result in our competitors gaining access to the same intellectual property.

Ultimately, we could be prevented from commercializing a product, or be forced to cease some aspect of our business operations, if, as a result of actual or threatened patent infringement claims, we are unable to enter into licenses on acceptable terms.

Parties making claims against us may obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize one or more of our product candidates. Defending against claims of patent infringement or misappropriation of trade secrets could be costly and time-consuming, regardless of the outcome. Thus, even if we were to ultimately prevail, or to settle at an early stage, such litigation could burden us with substantial unanticipated costs. In addition, litigation or threatened litigation could result in significant demands on the time and attention of our management team, distracting them from the pursuit of other company business. In the event of a successful claim of infringement against us, we may have to pay substantial damages, including treble damages and attorneys’ fees for willful infringement, pay royalties, redesign our infringing products or obtain one or more licenses from third parties, which may be impossible or require substantial time and monetary expenditure. In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to

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continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development collaborations that would help us bring our product candidates to market.

Changes in U.S. patent law could diminish the value of patents in general, thereby impairing our ability to protect our product candidates.

As is the case with other pharmaceutical companies, our success is heavily dependent on intellectual property, particularly on obtaining and enforcing patents and patent rights. Obtaining and enforcing patents and patent rights in the specialty pharmaceutical industry involves both technological and legal complexity, and therefore, is costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing wide-ranging patent reform legislation. Further, several recent U.S. Supreme Court rulings have either narrowed the scope of patent protection available in certain circumstances or weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents and patent rights, once obtained.

For our U.S. patent applications containing a claim not entitled to priority before March 16, 2013, there is a greater level of uncertainty in the patent law. In September 2011, the Leahy-Smith America Invents Act, or the America Invents Act, or AIA, was signed into law. The AIA includes a number of significant changes to U.S. patent law, including provisions that affect the way patent applications will be prosecuted, reviewed after issuance, and may also affect patent litigation. The USPTO is currently developing regulations and procedures to govern administration of the AIA, and many of the substantive changes to patent law associated with the AIA. It is not clear what other, if any, impact the AIA will have on the operation of our business. Moreover, the AIA and its implementation could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of patent rights, all of which could have a material adverse effect on our business and financial condition.

An important change introduced by the AIA is that, as of March 16, 2013, the United States transitioned to a “first-inventor-to-file” system for deciding which party should be granted a patent when two or more patent applications are filed by different parties claiming the same invention. A third party that files a patent application in the USPTO after that date but before a licensor or us could therefore be awarded a patent covering an invention of ours even if said licensor or we had made the invention before it was made by the third party. This will require us to be cognizant going forward of the time from invention to filing of a patent application. Furthermore, our ability to obtain and maintain valid and enforceable patent rights depends on whether the differences between the licensor’s or our technology and the prior art allow our technology to be patentable over the prior art. Since patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that a licensor or we were the first to either (a) file any patent application related to our product candidates or (b) invent any of the inventions claimed in our patents or patent applications.

Among some of the other changes introduced by the AIA are changes that limit where a patentee may file a patent infringement suit and providing opportunities for third parties to challenge any issued patent in the USPTO. This applies to all U.S. patents, even those issued before March 16, 2013. Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal court necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid as unpatentable even though the same evidence may be insufficient to invalidate the claim if first presented in a district court action. Accordingly, a third party may attempt to use the USPTO procedures to invalidate patent rights that would not have been invalidated if first challenged by the third party as a defendant in a district court action.

Depending on decisions by the U.S. Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

Intellectual property rights do not address all potential threats to our competitive advantage.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative:

• Others may be able to make products that are similar to our product candidates but that are not covered by the claims of the patents that we license from others or may license or own in the future.

• Others may independently develop similar or alternative technologies or otherwise circumvent any of our technologies without infringing our intellectual property rights.

• Any of our collaborators might not have been the first to conceive and reduce to practice the inventions covered by the patents or patent applications that we license or will, in the future, own or license.

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• Any of our collaborators might not have been the first to file patent applications covering certain of the patents or patent applications that we license or will, in the future, license.

• Issued patents that have been licensed to us may not provide us with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by our competitors.

• Our competitors might conduct research and development activities in countries where we do not have license rights, or in countries where research and development safe harbor laws exist, and then use the information learned from such activities to develop competitive products for sale in our major commercial markets.

• Ownership of patents or patent applications licensed to us may be challenged by third parties.

• The patents of third parties or pending or future applications of third parties, if issued, may have an adverse effect on our business.

Confidentiality agreements with employees, consultants and others may not adequately prevent disclosure of trade secrets and protect other proprietary information.

We consider proprietary trade secrets and/or confidential know-how and unpatented know-how to be important to our business. We may rely on trade secrets and/or confidential know-how to protect our technology, especially where patent protection is believed by us to be of limited value. However, trade secrets and/or confidential know-how can be difficult to maintain as confidential.

To protect this type of information against disclosure or appropriation by competitors, our policy is to require our employees, consultants, contractors and advisors to enter into confidentiality agreements with us. However, current or former employees, consultants, contractors and advisers may unintentionally or willfully disclose our confidential information to competitors, and confidentiality agreements may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. Enforcing a claim that a third party obtained illegally and is using trade secrets and/or confidential know-how is expensive, time consuming and unpredictable. The enforceability of confidentiality agreements may vary from jurisdiction to jurisdiction.

Failure to obtain or maintain trade secrets and/or confidential know-how trade protection could adversely affect our competitive position. Moreover, our competitors may independently develop substantially equivalent proprietary information and may even apply for patent protection in respect of the same. If successful in obtaining such patent protection, our competitors could limit our use of our trade secrets and/or confidential know-how.

We may need to license certain intellectual property from third parties, and such licenses may not be available or may not be available on commercially reasonable terms.

A third party may hold intellectual property, including patent rights that are important or necessary to the development or commercialization of our product candidates. It may be necessary for us to use the patented or proprietary technology of third parties to commercialize our product candidates, in which case we would be required to obtain a license from these third parties. Such a license may not be available on commercially reasonable terms or at all, which could materially harm our business.

We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information of third parties.

We have received confidential and proprietary information from third parties. In addition, we employ individuals who were previously employed at other biotechnology or pharmaceutical companies. We may be subject to claims that we or our employees, consultants or independent contractors have inadvertently or otherwise improperly used or disclosed confidential information of these third parties or our employees’ former employers.

Further, we may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing our product candidates. We may also be subject to claims that former employees, consultants, independent contractors, collaborators or other third parties have an ownership interest in our patents or other intellectual property. Litigation may be necessary to defend against these and other claims challenging our right to and use of confidential and proprietary information. If we fail in defending any such claims, in addition to paying monetary damages, we may lose our rights therein. Such an outcome could have a material adverse effect on our business.

Even if we are successful in defending against these claims, litigation could result in substantial cost and be a distraction to our management and employees.

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We may be subject to claims challenging the inventorship or ownership of our patents and other intellectual property.

We may also be subject to claims that former employees, collaborators or other third parties have an ownership interest in our patents and other intellectual property. We may be subject to ownership disputes in the future arising, for example, from conflicting obligations of consultants or others who are involved in developing our product candidates. Litigation may be necessary to defend against these and other claims challenging inventorship or ownership. If we fail in defending any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees.

Our reliance on third parties requires us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed.

Because we rely on third parties to assist with research and development and to manufacture our product candidates, we must, at times, share trade secrets with them. We seek to protect our proprietary technology in part by entering into confidentiality agreements and, if applicable, material transfer agreements, consulting agreements or other similar agreements with our advisors, employees, third-party contractors and consultants prior to beginning research or disclosing proprietary information. These agreements typically limit the rights of the third parties to use or disclose our confidential information, including our trade secrets. Despite the contractual provisions employed when working with third parties, the need to share trade secrets and other confidential information increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements. Given that our proprietary position is based, in part, on our know-how and trade secrets, a competitor’s discovery of our trade secrets or other unauthorized use or disclosure would impair our competitive position and may have a material adverse effect on our business.

In addition, these agreements typically restrict the ability of our advisors, employees, third-party contractors and consultants to publish data potentially relating to our trade secrets, although our agreements may contain certain limited publication rights. For example, any academic institution that we may collaborate with in the future will usually expect to be granted rights to publish data arising out of such collaboration, provided that we are notified in advance and given the opportunity to delay publication for a limited time period in order for us to secure patent protection of intellectual property rights arising from the collaboration, in addition to the opportunity to remove confidential or trade secret information from any such publication. In the future we may also conduct joint research and development programs that may require us to share trade secrets under the terms of our research and development or similar agreements. Despite our efforts to protect our trade secrets, our competitors may discover our trade secrets, either through breach of our agreements with third parties, independent development or publication of information by any of our third-party collaborators. A competitor’s discovery of our trade secrets would impair our competitive position and have an adverse impact on our business.

Risks Related to Our Securities

There is currently a limited market for our securities, and any trading market that exists in our securities may be highly illiquid and may not reflect the underlying value of our net assets or business prospects.

Although our common stock is traded on the Nasdaq Capital Market, there is currently a limited market for our securities and there can be no assurance that an active market will ever develop. Investors are cautioned not to rely on the possibility that an active trading market may develop.

Our share price is volatile, and you may not be able to resell your shares at a profit or at all.

The market price of our common stock could be subject to significant fluctuations. The market prices for securities of pharmaceutical and biotechnology companies, and early-stage drug discovery and development companies like ours in particular, have historically been highly volatile and may continue to be highly volatile in the future. The following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of our common stock:

• announcements of significant changes in our business or operations;

• the development status of any of our drug candidates, such as EDSIVO^TM or ACER-001, including clinical study results and determinations by regulatory authorities with respect thereto;

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• the initiation, termination or reduction in the scope of any collaboration arrangements or any disputes or developments regarding such collaborations;

• our inability to obtain additional funding;

• announcements of technological innovations, new commercial products or other material events by our competitors or by us;

• disputes or other developments concerning our proprietary rights;

• changes in, or failure to meet, securities analysts’ or investors’ expectations of our financial performance;

• additions or departures of key personnel;

• discussions of our business, products, financial performance, prospects or stock price by the financial and scientific press and online investor communities;

• public concern as to, and legislative action with respect to, the pricing and availability of prescription drugs or the safety of drugs and drug delivery techniques;

• regulatory developments in the United States and in foreign countries; or

• dilutive effects of sales of shares of common stock by us or our stockholders, and sales of common stock acquired upon exercise or conversion by the holders of options.

Broad market and industry factors, as well as economic and political factors, also may materially adversely affect the market price of our common stock.

We may be or become the target of securities litigation, which is costly and time-consuming to defend.

In the past, following periods of market volatility in the price of a company’s securities or the reporting of unfavorable news, security holders have often instituted class action litigation. This risk is especially relevant for us because pharmaceutical companies have experienced significant stock price volatility in recent years. If we become involved in this type of litigation, regardless of the outcome, we could incur substantial legal costs and our management’s attention could be diverted from the operation of our business, causing our business to suffer.

Our “blank check” preferred stock could be issued to prevent a business combination not desired by management or our majority stockholders.

Our charter authorizes the issuance of “blank check” preferred stock with such designations, rights and preferences as may be determined by our board of directors without stockholder approval. Our preferred stock could be utilized as a method of discouraging, delaying, or preventing a change in control and as a method of preventing stockholders from receiving a premium for their shares in connection with a change of control.

Future sales of our securities could cause dilution, and the sale of such securities, or the perception that such sales may occur, could cause the price of our stock to fall.

Sales of additional shares of our common stock, as well as securities convertible into or exercisable for common stock, could result in substantial dilution to our stockholders and cause the market price of our common stock to decline. An aggregate of 10,052,988 shares of common stock were outstanding as of September 30, 2018. As of such date, another (i) 751,100 shares of common stock were issuable upon exercise of outstanding options and (ii) 10,974 shares of common stock were issuable upon the exercise of outstanding warrants. A substantial majority of the outstanding shares of our common stock and warrants (as well as a substantial majority of the shares of common stock issuable upon exercise of outstanding options and warrants) are freely tradable without restriction or further registration under the Securities Act of 1933.

We may sell additional shares of common stock, as well as securities convertible into or exercisable for common stock, in subsequent public or private offerings. We may also issue additional shares of common stock, as well as securities convertible into or exercisable for common stock, to finance future acquisitions. We will need to raise additional capital in order to initiate or complete additional development activities for some of our product candidates, including ACER-001 in UCD and MSUD, or to pursue additional disease indications for our product candidates, and this may require us to issue a substantial amount of securities (including common stock as well as securities convertible into or exercisable for common stock). There can be no assurance that our capital raising efforts will be able to attract the capital needed to execute on our business plan and sustain our operations. Moreover, we cannot predict the size of future issuances of our common stock, as well as securities convertible into or exercisable for common stock,

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or the effect, if any, that future issuances and sales of our securities will have on the market price of our common stock. Sales of substantial amounts of our common stock, as well as securities convertible into or exercisable for common stock, including shares issued in connection with an acquisition or securing funds to complete any clinical trial plans, or the perception that such sales could occur, may result in substantial dilution and may adversely affect prevailing market prices for our common stock.

We presently do not intend to pay cash dividends on our common stock.

We currently anticipate that no cash dividends will be paid on the common stock in the foreseeable future. While our dividend policy will be based on the operating results and capital needs of the business, it is anticipated that all earnings, if any, will be retained to finance the future expansion of our business.

Our stockholders may experience substantial dilution in the value of their investment if we issue additional shares of our capital stock.

Our charter allows us to issue up to 150,000,000 shares of common stock and to issue and designate the rights of, without stockholder approval, up to 10,000,000 shares of preferred stock. In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same as the price per share paid by other investors, and dilution to our stockholders could result. We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by investors, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by other investors.

We may issue debt and equity securities or securities convertible into equity securities, any of which may be senior to our common stock as to distributions and in liquidation, which could negatively affect the value of our common stock.

In the future, we may attempt to increase our capital resources by entering into debt or debt-like financing that is unsecured or secured by up to all of our assets, or by issuing additional debt or equity securities, which could include issuances of secured or unsecured commercial paper, medium-term notes, senior notes, subordinated notes, guarantees, preferred stock, hybrid securities, or securities convertible into or exchangeable for equity securities. In the event of our liquidation, our lenders and holders of our debt and preferred securities would receive distributions of available assets before distributions to the holders of our common stock. Because our decision to incur debt and issue securities in future offerings may be influenced by market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings or debt financings. Further, market conditions could require us to accept less favorable terms for the issuance of our securities in the future.

Our management has significant flexibility in using the current available cash.

In addition to general corporate purposes (including working capital, research and development, business development and operational purposes), we currently intend to use our available cash, to continue the development of our drug candidates, such as EDSIVO^TM and ACER-001, to seek regulatory approval for EDSIVO™, and to invest in pre-commercial activities for EDSIVO™. We may also use our available cash to acquire or invest in complementary businesses, technologies, product candidates or other intellectual property. Depending on future developments and circumstances, we may use some of our available cash for other purposes which may have the potential to decrease our cash runway. Notwithstanding our current intentions regarding use of our available cash, our management will have significant flexibility with respect to such use. The actual amounts and timing of expenditures will vary significantly depending on a number of factors, including the amount and timing of cash used in our operations and our research and development efforts. Management’s failure to use these funds effectively would have an adverse effect on the value of our common stock and could make it more difficult and costly to raise funds in the future.

Because the Merger resulted in an ownership change under Section 382 of the Internal Revenue Code, our pre-Merger net operating loss carryforwards and certain other tax attributes will be subject to limitation or elimination. The net operating loss carryforwards and certain other tax attributes of Private Acer may also be subject to limitations as a result of ownership changes.

If a corporation undergoes an “ownership change” within the meaning of Section 382 of the Internal Revenue Code, or Section 382, the corporation’s net operating loss carryforwards and certain other tax attributes arising from before the ownership change are subject to limitations on use after the ownership change. In general, an ownership change occurs if there is a cumulative change in the corporation’s equity ownership by certain stockholders that exceeds fifty percentage points by value over a rolling three-year period. Similar rules may apply under state tax laws. The Merger resulted in an ownership change for us and, accordingly, our net operating loss carryforwards and certain other tax attributes will now be subject to limitation and possibly elimination. It is possible that Private Acer’s net operating loss carryforwards and certain other tax attributes may also be subject to limitation as a result of prior shifts in

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equity ownership and/or the Merger. Additional ownership changes in the future could result in additional limitations on our and Private Acer’s net operating loss carryforwards and certain other tax attributes. Consequently, even if we achieve profitability, we may not be able to utilize a material portion of our or Private Acer’s net operating loss carryforwards and certain other tax attributes, which could increase our tax obligations and thus have a material adverse effect on cash flow and results of operations.

Because the ownership of our common stock is highly concentrated, it may prevent stockholders from influencing significant corporate decisions and may result in conflicts of interest that could cause our stock price to decline.

Our executive officers and directors and their affiliates beneficially own or control approximately 46% of the outstanding shares of our common stock. Accordingly, these executive officers, directors and their affiliates will have substantial influence over the outcome of corporate actions requiring stockholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transactions. These stockholders may also delay or prevent a change of control of our company, even if such a change of control would benefit our other stockholders. The significant concentration of stock ownership may adversely affect the trading price of our common stock due to investors’ perception that conflicts of interest may exist or arise.

Anti-takeover provisions in our organizational documents and Delaware law might discourage, delay or prevent an acquisition attempt or change in control of our company that you might consider favorable.

Our certificate of incorporation and bylaws contain provisions that may delay or prevent an acquisition or change in control of our company. Among other things, these provisions:

• authorize the board of directors to issue, without stockholder approval, blank-check preferred stock that, if issued, could operate as a “poison pill” to dilute the stock ownership of a potential hostile acquirer to prevent an acquisition that is not approved by the board of directors;

• establish advance notice requirements for stockholder nominations of directors and for stockholder proposals that can be acted on at stockholder meetings;

• limit who may call stockholder meetings;

• require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

• provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even if less than a quorum;

• require a super-majority of votes to amend certain amendments to our charter as well as to amend our bylaws generally; and

• authorize us to indemnify officers and directors against losses that they may incur in investigations and legal proceedings resulting from their services to us, which may include services in connection with takeover defense measures.

Further, as a Delaware corporation, we are also subject to provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers.  Section 203 generally prohibits us from engaging in a business combination with an interested stockholder subject to certain exceptions.

These anti-takeover provisions and other provisions under Delaware law, our charter and our bylaws could discourage, delay or prevent a transaction involving an acquisition attempt or a change in control of our company, including actions that our stockholders may deem advantageous, or negatively affect the trading price of our common stock. These provisions could also discourage proxy contests and make it more difficult for you and other stockholder to elect directors of your choosing and to cause us to take other corporate actions you desire.

Our certificate of incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is more convenient or favorable for disputes with us or our directors, officers or other employees.

Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for:

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• any derivative action or proceeding brought on our behalf;

• any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders;

• any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law; or

• any action asserting a claim against us governed by the internal affairs doctrine.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to the provisions of our certificate of incorporation described above. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is more convenient or favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and other employees. Alternatively, if a court were to find these provisions of our certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations.

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Item 6. Exhibits

Exhibit No.	Description
10.1*@	License Agreement for Development and Exploitation, dated as of September 19, 2018, by and between Acer Therapeutics Inc. and Assistance Publique – Hôpitaux de Paris.
31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101*	Financial statements from the Quarterly Report on Form 10-Q of the Company as of and for the period ended September 30, 2018, formatted in Extensible Business Reporting Language (XBRL): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Cash Flows; and (iv) Notes to Condensed Consolidated Financial Statements.

* Filed herewith

@ Confidential treatment has been requested with respect to certain portions of this exhibit. Omitted portions have been filed separately with the Securities and Exchange Commission.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ACER THERAPEUTICS INC.
Date: November 9, 2018	By:	/s/  Harry Palmin
		Harry Palmin Chief Operating Officer and Chief Financial Officer (Principal Financial and Accounting Officer)

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EX-10.1

Exhibit 10.1

Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission. Page 1 of 42 LICENSE AGREEMENT FOR DEVELOPMENT AND EXPLOITATION (“Agreement”) VAL No.2018/2016-305/2017-208/01 BETWEEN: The Assistance Publique – Hôpitaux de Paris, a public healthcare establishment whose registered office address is 3, Avenue Victoria, 75004 Paris, represented by its Chief Executive Officer, Mr Martin Hirsch, Represented by: Mrs Florence FAVRELFEUILLADE, Head of the Clinical Research and Innovation Delegation, Carré Historique de l’Hôpital Saint-Louis, 1 avenue Claude Vellefaux, 75010 Paris in accordance with the CEO’s delegation order authorising her to sign this Agreement, hereinafter “AP-HP” AND ACER THERAPEUTICS INC. a Delaware, USA corporation having a place of business at One Gateway Center, Suite 351 (300 Washington Street) Newton, MA 02458 USA., and represented by Christopher Schelling, Founder and Chief Executive Officer, hereinafter the “Licensee”. AP-HP and Licensee may hereinafter be referred to collectively as the “Parties” or individually as a “Party”. WHEREAS THE FOLLOWING HAS BEEN STATED AS PREAMBLE: On August 3rd, 2016, AP-HP and the Licensee entered into an AGREEMENT OF ACCESS AND USE OF CLINICAL TRIAL DATA (“Data CONTRAT DE LICENCE DE DÉVELOPPEMENT ET D’EXPLOITATION (le « Contrat ») VAL N°2018/2016-305/2017-208/01 ENTRE : L’Assistance Publique – Hôpitaux de Paris, établissement public de santé dont le siège social est situé au 3, Avenue Victoria, 75004 Paris, représenté par son Directeur général, M. Martin Hirsch, Représenté par : Mme Florence FAVRELFEUILLADE, Directrice de la délégation de la Recherche Clinique et de l’Innovation, Carré Historique de l’Hôpital Saint-Louis, 1 avenue Claude Vellefaux, 75010 Paris en vertu de la délégation de pouvoir du Directeur Général l’autorisant à conclure le présent Contrat, ci-après « AP-HP » ET ACER THERAPEUTICS INC., société américaine de l’État du Delaware, disposant d’un établissement au One Gateway Center, Suite 351 (300 Washington Street) Newton, MA 02458 États-Unis, et représentée par Christopher Schelling, Fondateur et Chief Executive Officer, ci-après le « Licencié ». L’AP-HP et le Licencié seront ci-après désignés, collectivement, les « Parties » ou, individuellement, une « Partie ». EXPOSÉ PRÉALABLE : Le 3 août 2016, l’AP-HP et le Licencié ont conclu un CONTRAT POUR L’ACCÈS ET L’UTILISATION DE DONNÉES DES ESSAIS CLINIQUES (« Contrat de Données ») référencé Page 1 of 42 Confidential Treatment Requested. Confidential portions of this document have been redacted and have been separately filed with the Commission.

Agreement”) with reference number VAL2016/2015-419 related to the BBEST study on the utilization of celiprolol in vascular Ehlers- Danlos Syndrome patients. AP-HP, through Doctors Michael FRANK, Xavier JEUNEMAITRE, and Alexandra BENACHI hereinafter referred to as the “Inventors”, has identified and selected the Licensee to exclusively license the Licensed Technology (as such term and other capitalized terms are hereinafter defined). AP-HP and Licensee have collaborated in the development of the subject matter of this Agreement and AP-HP is the owner of certain inventions and discoveries relative to the utilization of celiprolol including: - The use of celiprolol during pregnancy - The optimal dose of celiprolol in treating vascular Ehlers-Danlos Syndrome patients - The use of celiprolol to treat Ehlers-Danlos syndrome (type VI). The process and its applications are the subject of the following European patent applications: - No° EP17306888.3, patent application filed on 21 December 2017 entitled “USE OF CELIPROLOL FOR TREATING KYPHOSCOLIOTIC EHLERS-DANLOS SYNDROME”; - - No° EP17306890.9, patent application filed on 21 December 2017 entitled “ METHOD OF PROVIDING CELIPROLOL THERAPY TO A PATIENT”; - No° EP17306889.1, patent application filed on 21 December 2017 entitled “USE OF CELIPROLOL FOR TREATING VASCULAR EHLERS-DANLOS SYNDROME IN WOMEN DURING PREGNANCY AND PERIPARTUM PERIOD”. sous le numéro VAL2016/2015-419 dans le cadre de l’étude BBEST [Beta-Blockers in Ehlers- Danlos Syndrom Treatment] sur l’utilisation du céliprolol pour le traitement des patients atteints du syndrome d’Ehlers-Danlos vasculaire. L’AP-HP, par l’intermédiaire des Médecins Michael FRANK, Xavier JEUNEMAITRE et Alexandra BENACHI, ci-après désignés les « Inventeurs », a identifié et sélectionné le Licencié afin de lui concéder une licence exclusive de la Technologie Licenciée (tel que ce terme et les autres termes commençant par une majuscule sont définis ci-après). L’AP-HP et le Licencié ont collaboré au développement de l’objet du présent Contrat et l’AP-HP est propriétaire de certaines inventions et découvertes relatives à l’utilisation du céliprolol, notamment : - l’utilisation du céliprolol durant la grossesse ; - le dosage optimal du céliprolol pour le traitement des patients atteints du Syndrome d’Ehlers-Danlos vasculaire ; - l’utilisation du céliprolol pour le traitement du syndrome d’Ehlers-Danlos (de type VI). Le procédé et ses applications font l’objet des demandes de brevet européen suivantes : - Demande de brevet en date du 21 décembre 2017, N°EP17306888.3 intitulée « UTILISATION DU CELIPROLOL POUR LE TRAITEMENT DU SYNDROME D’EHLERS-DANLOS DE TYPE CYPHOSCOLIOTIQUE » ; - Demande de brevet en date du 21 décembre 2017, N°EP17306890.9 intitulée « MÉTHODE D’ADMINISTRATION D’UN TRAITEMENT AU CELIPROPOL A UN PATIENT » ; - Demande de brevet en date du 21 décembre 2017, N°EP17306889.1 intitulée « UTILISATION DU CELIPROLOL POUR LE TRAITEMENT DU SYNDROME D’EHLERS-DANLOS VASCULAIRE CHEZ LA FEMME Page 2 of 42

AP-HP is the assignee of the above-referenced patent applications and has been designated as Maître d’oeuvre [« Project manager »] by Coowners for the management and development of the Patents with a view to the Exploitation of the Licensed Technology and entitled to grant a license for the Exploitation of the Licensed Technology. The Licensee, a company whose objective is the development and Exploitation of pharmaceutical products, is interested by the scientific and commercial activities relative to the study, the development, the promotion, the commercialization and the distribution of the Licensed Technology. AP-HP wish to grant the Licensee an exclusive worldwide license to exploit the Licensed Technology in both the private and public domains, which the Licensee agrees to receive. AP-HP and the Licensee have negotiated the terms of this Agreement, which provides the terms and conditions for the research, development and Exploitation of the Licensed Technology. NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS: ARTICLE 1 – DEFINITIONS Throughout the present Agreement, its appendices and its potential amendments and unless otherwise clearly specified, the terms listed below shall be equally understood to refer to both the plural and singular and shall have the following meanings: “Affiliate” shall refer to any corporation, partnership, or other business or legal entity that, directly or indirectly, controls, is controlled by, or is under common control with the concerned Party, including but not limited to those within the meaning of Article L. 233-3 of the code du commerce [“French commercial code”]. PENDANT LA GROSSESSE ET LA PÉRIODE POSTNATALE ». L’AP-HP est le cessionnaire des demandes de brevet susmentionnées et a été désigné en qualité de maître d’oeuvre [« Project manager »] pour la gestion et le développement des brevets en vue de l’Exploitation de la Technologie Licenciée. Il est ainsi habilité à concéder une licence d’Exploitation de la Technologie Licenciée. Le Licencié est une société ayant pour objet le développement et l’Exploitation de produits pharmaceutiques et traite des activités scientifiques et commerciales relatives à l’étude, au développement, à la promotion, à la commercialisation et à la distribution de la Technologie Licenciée. L’AP-HP souhaite accorder au Licencié une licence mondiale exclusive pour exploiter la Technologie Licenciée tant dans le domaine privé que public, et le Licencié accepte de la recevoir. L’AP-HP et le Licencié ont négocié les termes du présent Contrat, lequel prévoit les modalités et les conditions de la recherche, du développement et de l’Exploitation de la Technologie Licenciée. CECI ÉTANT EXPOSÉ, IL A ÉTÉ CONVENU DE CE QUI SUIT : ARTICLE 1 - DÉFINITIONS Aux fins du présent Contrat, de ses annexes et de ses éventuels avenants, et sauf indication contraire précise, les termes figurant ci-dessous s’entendent aussi bien au pluriel qu’au singulier et sont définis comme suit : « Affiliée » désigne toute société de capitaux, société de personnes ou autre entité commerciale ou personne morale qui, directement ou indirectement, contrôle ou est contrôlée par la Partie concernée, ou se trouve sous contrôle commun avec cette dernière, y compris notamment au sens de l’article L. 233-3 du Code de commerce. Page 3 of 42

Any commercial corporation or partnership, under French or foreign law, which, directly or indirectly, through a stake in the capital stock or through another means, but owning at least 50% of the voting rights or of the rights to manage the business affairs of the Licensee, controls the Licensee, is controlled by the Licensee or is under the same control as the Licensee. The rights granted to the Affiliated companies under the terms of the present Agreement only applies to the entities having the quality of Affiliated companies at the time of exercising said rights. If, in the course of the duration of the present Agreement, an entity were to lose the quality of Affiliate, the rights acquired by this entity as an Affiliate automatically disappear, unless otherwise agreed in writing by AP-HP. Nevertheless, the entity will remain subjected to all the obligations pursuant to the Agreement which will remain in force because of its nature, and in particular to duties concerning confidential information. “Co-owners” shall mean: the two other owner of the patent n°EP17306889.1 , known as SATT Paris Saclay and the SATT IDF Innov. “Development Plan” shall mean: provisional schedule of the commercial and technical steps to be carried out by the Licensee to market the Products as provided in Appendix 1, which may be amended from time to time by Licensee. “Development Work” shall mean: the research and development work and studies directly or indirectly performed by the Licensee as provided for in Article 4. “Effective Date”: shall have the meaning set forth in Article 15. “Exploit” or “Exploitation” shall mean: activities of manufacture, sale, distribution, advertising (if authorized), promotion, pharmacovigilance, batch monitoring and, if Toute société commerciale ou de personnes, de droit français ou étranger, qui, directement ou indirectement, par le biais d’une participation dans le capital social ou par un autre moyen, et détenant au moins 50 % des droits de vote ou des droits de diriger l’activité commerciale du Licencié, contrôle ce dernier, est contrôlé par lui ou est placé sous contrôle commun avec lui. Les droits conférés aux sociétés Affiliées aux termes du présent Contrat, ne valent que pour les entités ayant la qualité de sociétés Affiliées au moment de l’exercice desdits droits. Si, pendant la durée du présent Contrat, une entité perd la qualité d’Affiliée, les droits qu’elle aura acquis en sa qualité d’Affiliée s’éteindront de plein droit, sauf accord écrit contraire de l’AP-HP. Néanmoins, l’entité restera soumise à l’ensemble des obligations prévues au Contrat qui demeureront en vigueur du fait de leur nature, et notamment aux obligations concernant des informations confidentielles. « Co-propriétaires » désigne les deux autres détenteurs du brevet n°17306889.1, à savoir la SATT Paris Saclay et la SATT IDF Innov. « Plan de Développement » désigne le calendrier prévisionnel des démarches commerciales et techniques devant être effectuées par le Licencié en vue de la commercialisation des Produits conformément à l’Annexe 1, qui pourra être modifiée par le Licencié le cas échéant. « Travaux de Développement » désigne les études et travaux de recherche et de développement réalisés, directement ou indirectement, par le Licencié conformément à l’Article 4. « Date d’Effet » se réfère aux dispositions prévues à l’Article 15. « Exploiter » ou « Exploitation » désigne les activités de fabrication, de vente, de distribution, de publicité (si elles sont autorisées), de promotion, de pharmacovigilance, de Page 4 of 42

applicable, batch recall as well as the corresponding storage activities. “Field of Application” shall mean: all human therapeutic, prophylactic, and diagnostic uses of celiprolol. “Homologation” shall mean any authorization/ certification/ approval required by the appropriate regulatory authority, in each one of the countries or zones of the Territory, and necessary for the Marketing of a Product, under any regulation statute whatsoever, including in particular but not limited to the marketing of the Product under EC, MA and ATU labels. “Improvement(s)” shall mean: any new invention, modification, enhancement or discovery whether patentable or not, patented or not which broadens the scope of at least one claim of the Patent(s). “Licensed Technology” shall mean: Patents used directly or indirectly by the Licensee, alone or in combination, for the Development Work and/or Exploitation of the Products. “Marketing Authorization (« Autorisation de Mise sur le Marché », AMM ” or New Drug Application, NDA)” shall refer to any marketing authorization required to be approved before commercial sale or use of the Product, granted by the competent healthcare authorities, and related to any Product, in one or several countries making up the Territory. “Marketing” shall mean: the first commercial sale of the Product, in any country in the Territory, made directly or indirectly by the Licensee or its sub-licensee. “Net Sales”: the amount of sales of the Product excluding taxes, invoiced directly or indirectly by Licensee or a permitted sub-licensee to third parties. Only the final amount collected (i.e. surveillance de lots et, le cas échéant, de rappel de lots, ainsi que les activités de stockage correspondantes. « Domaine d’Application » désigne tous les usages thérapeutiques, prophylactiques et diagnostiques du céliprolol chez l'être humain. « Homologation » désigne toute autorisation/certification/approbation requise par l’autorité de régulation compétente, dans chacun(e)s des pays ou des zones du Territoire, et qui sont nécessaires à la Mise sur le Marché du Produit, en vertu de toute loi ou réglementation, y compris notamment pour la commercialisation du Produit sous les labels EC, MA et ATU. « Amélioration(s) » désigne toute nouvelle invention, modification, amélioration ou découverte, qu’elle soit ou non brevetable ou brevetée, et qui étend le périmètre d’au moins une des revendications du ou des Brevet(s). « Technologie Licenciée » désigne : les Brevets utilisés directement ou indirectement par le Licencié, isolément ou en association, pour les Travaux de Développement et/ou l’Exploitation des Produits. « Autorisation de Mise sur le Marché », « AMM » ou « New Drug Application », ou « NDA » désigne toute autorisation de commercialisation dont l’approbation est requise préalablement à la vente ou à l’utilisation commerciale du Produit, accordée par les autorités sanitaires compétentes et relative à un Produit, dans un ou plusieurs des pays constituant le Territoire. « Mise sur le Marché » désigne la première mise sur le marché du Produit, dans l’un des pays du Territoire, réalisée directement ou indirectement par le Licencié ou son sous-Licencié. « Ventes Nettes » désigne le montant des ventes du Produit hors taxes, facturé directement ou indirectement à des tiers par le Licencié ou par un sous-Licencié autorisé. Seul le montant définitif encaissé par le Licencié (i.e. corrigé du montant des remises, rabais, frais de transport et de Page 5 of 42

adjusted for discounts, rebates, transportation, distribution in the limit of 5% of the Net Sales) by Licensee will be taken into consideration in the calculation of Net Sales conducted in accordance with these provisions. The sales carried out under ATU [Autorisation Temporaire d’Utilisation – Temporary Authorization for Use] or RUO [Research Use Only] are also included in the total of the Net Sales. Net Sales for combination products will be calculated by multiplying actual Net Sales of combination products by the fraction A/(A+B), where “A” is the Net Sales of the Product if sold or performed separately, and “B” is the Net Sales of the other product, component, ingredient or service in the Combination Product if sold separately. If, on a country-by-country basis, the other product, component, ingredient or service is not sold separately in said country, Net Sales shall be calculated by multiplying the actual Net Sales of the Combination Product by the fraction A/C where “A” is the is the Net Sales of the Product, if sold separately, and “C” is the Net Sales of the Combination Product. If, on a country-bycountry basis, neither the Product nor the other product, component, ingredient or service in the combination Product is sold separately in said country, Net Sales shall be determined in good faith by the parties. “Patents” shall refer to the following patent applications: • No.° EP17306888.3 entitled “USE OF CELIPROLOL FOR TREATING KYPHOSCOLIOTIC EHLERSDANLOS SYNDROME” (the “kEDS Patent”); • No.° EP17306890.9 entitled “METHOD OF PROVIDING CELIPROLOL THERAPY TO A PATIENT” (the “Dosing Patent”); • No.° EP17306889.1 entitled “USE OF CELIPROLOL FOR TREATING VASCULAR EHLERS-DANLOS SYNDROME IN WOMEN DURING PREGNANCY AND PERIPARTUM PERIOD” (the “Pregnancy Patent”). distribution dans la limite de 5% des Ventes Nettes) sera pris en compte pour le calcul des Ventes Nettes effectué en application des présentes. Les ventes réalisées en vertu d’une ATU [Autorisation Temporaire d’Utilisation] ou d’une RUO [Research Use Only] sont également incluses dans le total des Ventes Nettes. Les Ventes Nettes des produits combinés seront calculées en multipliant les Ventes Nettes réelles des produits combinés par la fraction A/(A+B), « A » désignant les Ventes Nettes du Produit s’il est vendu ou mis en oeuvre séparément, et « B » désignant les Ventes Nettes de l’autre produit, composant, ingrédient ou service compris dans le Produit Combiné s’il est vendu séparément. Si l’autre produit, composant, ingrédient ou service n’est pas vendu séparément dans un pays particulier, les Ventes Nettes devront être calculées en multipliant les Ventes Nettes effectives du Produit Combiné par la fraction A/C, « A » désignant les Ventes Nettes du Produit, s’il est vendu séparément, et « C » désignant les Ventes Nettes du Produit Combiné. Si ni le Produit ni l’autre produit, composant, ingrédient ou service du Produit Combiné ne sont vendus séparément dans un pays particulier, les Ventes Nettes devront être déterminées de bonne foi par les parties. « Brevets » désigne les demandes de brevet suivantes : • N°EP17306888.3 intitulée « UTILISATION DU CELIPROLOL POUR LE TRAITEMENT DU SYNDROME D’'EHLERS-DANLOS DE TYPE CYPHOSCOLIOTIQUE » (le « Brevet cEDS ») ; • N°EP17306890.9 intitulée « MÉTHODE D’ADMINISTRATION D’UN TRAITEMENT AU CELIPROPOL A UN PATIENT » (le « Brevet Dosage ») ; • N°EP17306889.1 intitulée « UTILISATION DU CELIPROLOL POUR LE TRAITEMENT DU SYNDROME D’EHLERS-DANLOS VASCULAIRE CHEZ LA FEMME PENDANT LA GROSSESSE ET LA Page 6 of 42

as well as to any patent application and patent resulting therefrom filed in the European Union, the United States or other countries, including all applications claiming priority therefrom including reissues, divisionals, continuations, continuations in part (to the extent that such continuation in part application claims valid priority to any of the foregoing) and also the supplementary protection certificates related to said patents and their counterparts abroad. “Product” shall mean: any product all, or part, of, which may be used and commercialized in human healthcare in the Field of Application and which could not be developed, manufactured, marketed, used or sold in the absence of a license to exploit all or part of the Patents. “Results” shall refer to the set of results, whether patentable or not, whether patented or not, generated by the Development Work performed by or on behalf of the Licensee. “Stepdown Event” shall have the meaning given in Article 8.5 of this Agreement. “Temporary Authorization for Use (Autorisation Temporaire d’Utilisation, ATU)” shall mean: the authorization necessary for the exceptional use of the Product within the meaning of the provisions of article L 5121-12 of the French Code de la Santé Publique [« Public health code »], without prejudice of the adjustments and specificities peculiar to the national legislations and regulations; more particularly within the meaning of the present Agreement, the ATU term shall refer to both ATU known as « nominative » ones and ATU known as « cohort » ones, including the different name (among which that of PÉRIODE POSTNATALE » (le « Brevet Grossesse »). ainsi que toutes les demandes de brevet déposées au sein de l’Union européenne, aux États-Unis ou dans d’autres pays et les brevets en résultant, y compris toutes les revendications de priorité sur ces demandes, notamment les demandes de redélivrance (reissues), demandes divisionnaires, demandes constituant la « continuation » ou la « continuation in part » d’une demande antérieure (dans la mesure où cette demande constituant la « continuation in part » d’une demande antérieure revendique valablement la priorité sur l’une des demandes ci-dessus), ainsi que les certificats complémentaires de protection relatifs auxdits brevets et à leurs homologues étrangers. « Produit » désigne tout produit pouvant en tout ou partie être utilisé ou commercialisé dans le Domaine d’Application pour les soins de santé des êtres humains, et insusceptible d’être développé, fabriqué, commercialisé, utilisé ou vendu sans licence d’exploitation de tout ou partie des Brevets. « Résultats » désigne la série de résultats, qu’elle soit ou non brevetable ou brevetée, générée par les Travaux de Développement réalisés par le Licencié ou pour son compte. « Cas de Réduction des Redevances » a le sens qui lui est donné à l’Article 8.5 du présent Contrat. « Autorisation Temporaire d’Utilisation » ou « ATU » désigne l’autorisation nécessaire à l’utilisation, à titre exceptionnel, du Produit au sens des dispositions de l’article L 5121-12 du Code de la santé publique, sans préjudice des spécificités propres aux législations et règlementations nationales et des ajustements applicables ; plus précisément, au sens du présent Contrat, le terme ATU désigne à la fois les ATU dites « nominatives » et celles dites « de cohorte » y compris les différentes appellations que ces ATU peuvent recevoir dans des pays autres que la France (notamment celle d’« expérimentation »). Les ventes réalisées en vertu d’une ATU sont également prises en compte Page 7 of 42

experimentation in particular) that these ATU might receive in other countries than France. The sales carried out under ATU are also taken into account in the calculation of the net sales total. “Territory” shall mean: Worldwide “Treatment” shall mean: the therapeutic, diagnostic or prophylactic use of a Product. “Valid Claim” shall mean with respect to any country in the Territory, a claim of an issued and unexpired patent included within the Dosing Patents or the Pregnancy Patents in that country which has not been held unenforceable; unpatentable; or invalid by a decision of a court or other governmental agency of a competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise. For the avoidance of doubt, an issued patent relating to the kEDS Patent shall not constitute a Valid Claim for the purpose of Article 8 of this Agreement. ARTICLE 2 – NATURE, SUBJECT MATTER AND EXTENT OF THE LICENSE 2.1 AP-HP (as maître d’oeuvre [« project manager »]), the assignee and owner of the Licensed Technology, grants to the Licensee, who accepts it, an exclusive, worldwide license to research, develop and Exploit the Product and the Licensed Technology in the Territory and within the Field of Application of the Agreement. 2.2 The Licensee acknowledges that it has had access to information concerning the Licensed Technology, and AP-HP represents that it has made all requisite information concerning the Licensed Technology available to Licensee, said information having enabled the Licensee to fully gauge the content and extent of said Licensed Technology as well as the corresponding license rights granted pour le calcul du total des ventes nettes. « Territoire » désigne le monde entier. « Traitement » désigne l’usage thérapeutique, diagnostique ou prophylactique d’un Produit. « Revendication Valable » désigne, pour tout pays situé sur le Territoire, toute revendication d’un brevet délivré et en cours de validité, figurant dans les Brevets Dosage ou les Brevets Grossesse de ce pays et n’ayant pas été jugée inopposable, non brevetable ou invalide par décision d’une juridiction ou d’un autre organisme administratif compétent(e), insusceptible d’appel ou n’ayant pas fait l’objet d’un appel dans le délai de recours imparti, et n’ayant pas été reconnue comme invalide ou inopposable par le biais d’une re-délivrance (reissue), d’une renonciation ou d’une autre manière. Afin de lever toute ambiguïté, un brevet délivré relatif au brevet cEDS ne constitue pas une Revendication Valable aux fins de l’Article 8 du présent Contrat. ARTICLE 2 – NATURE, OBJET ET PÉRIMÈTRE DE LA LICENCE 2.1 Les Établissements, l’AP-HP (en qualité de maître d’oeuvre), le cessionnaire et le propriétaire de la Technologie Licenciée, accordent au Licencié, qui l’accepte, une licence mondiale exclusive de recherche, de développement et d’Exploitation du Produit et de la Technologie Licenciée, sur le Territoire et dans le Domaine d’Application du Contrat. 2.2 Le Licencié reconnaît avoir eu accès à des informations concernant la Technologie Licenciée, et l’AP-HP déclare avoir mis toutes les informations nécessaires concernant la Technologie Licenciée à la disposition du Licencié, ces informations ayant permis au Licencié de pleinement évaluer le contenu et l’étendue de ladite Technologie Licenciée ainsi que des droits de licence correspondants accordés en vertu des présentes. Page 8 of 42

hereunder. 2.3 AP-HP may however freely use the Licensed Technology for its own research needs or in collaboration with third parties solely for academic research (and not commercial) purposes. ARTICLE 3 – GRANT OF SUB-LICENSES 3.1 The license, such as set out in the abovementioned Article 2.1, gives the Licensee the right to research, develop and Exploit the Licensed Technology and to grant sublicenses. 3.2 Within the meaning of the present Article, “sub-license” shall mean the grant of any right to research, develop and Exploit or right of option to research, develop and Exploit the Licensed Technology and which is granted to third parties by the Licensee. The sub-license rights can be granted to third parties insofar as AP-HP gives its prior written approval not more than fifteen (15) days after the notice from Licensee concerning the identity of the sub-licensee, which approval may not be unreasonably withheld, delayed or conditioned by APHP, and that the terms and conditions of the sub-license agreement are consistent with this Agreement. The Licensee shall be solely responsible for proper execution of the sub-licenses. 3.3 Should the Licensee grant a sub-license as defined in the present Article, the Licensee undertakes to explicitly include the following in the sub-license agreement: 2.3 L’AP-HP peut toutefois utiliser librement la Technologie Licenciée pour ses propres besoins en matière de recherche, ou en collaboration avec un tiers, mais uniquement à des fins de recherche universitaire (et non à des fins commerciales). ARTICLE 3 – CONCESSION DE SOUSLICENCES 3.1 La licence, telle que prévue à l’Article 2.1 ci-dessus, confère au Licencié le droit de développer ou d’Exploiter la Technologie Licenciée ou d’effectuer des recherches sur celle-ci et d’octroyer des souslicences. 3.2 Au sens du présent Article, « souslicence » désigne l’octroi à un tiers par le Licencié de tout droit ou droit d’option de développement et d’Exploitation de la Technologie Licenciée et d’effectuer des recherches sur celle-ci. Les droits de sous-licence peuvent être octroyés à des tiers sous réserve de l’approbation préalable et écrite de l’APHP dans un délai maximum de quinze (15) jours suivant la notification effectuée par le Licencié concernant l’identité du sous- Licencié, l’AP-HP ne pouvant déraisonnablement refuser ni retarder cette approbation, ni la soumettre à des conditions sans motif, et sous réserve que les termes et conditions du contrat de sous-licence ne soient pas contraires au présent Contrat. Le Licencié sera pleinement responsable de la bonne exécution des sous-licences. 3.3 Dans le cas où le Licencié concède une sous-licence au sens du présent Article, ce dernier s’engage à prévoir expressément les éléments suivants dans le contrat de sous-licence : - une limitation de la durée de la sous-licence qui soit compatible Page 9 of 42

- a limitation of the term of the sublicense which is compatible with the term of the present Agreement, and - sub-license clauses which are compatible with all applicable clauses defined in the present Agreement, including but not limited to payment of royalties on Net Sales of Product. In all cases, the Licensee expressly guarantees that it will not grant to its sublicensee( s) the right to grant sub-licenses. 3.4 Within one month of the grant of a sublicense, the Licensee shall provide AP-HP with a copy of the sub-license agreement (appendices included) ratified by the sublicensee and the Licensee. ARTICLE 4 – DEVELOPMENT 4.1 The Licensee shall use commercially reasonable efforts to conduct the Development Work in compliance with all applicable laws and regulations. 4.2 The Licensee shall seek to use commercially reasonable efforts to Exploit the Licensed Technology either directly or indirectly through its sub-licensees. 4.3 Prior to Marketing Authorization of a Product, in the event the Licensee and its sub-licensees cease Development Work for a period of more than six (6) months without being able to reasonably justify said cessation to AP-HP, formal notice may be given to the Licensee to resume said avec la durée du présent Contrat, et - des clauses de sous-licence compatibles avec la totalité des clauses applicables prévues au présent Contrat, y compris notamment en ce qui concerne le paiement de redevances sur les Ventes Nettes du Produit. En tout état de cause, le Licencié garantit expressément qu’il n’accordera pas à son(ses) sous-Licencié(s) le droit d’octroyer des sous-licences. 3.4 Dans le délai d’un mois suivant l’octroi d’une sous-licence, le Licencié devra communiquer à l’AP-HP une copie du contrat de sous-licence (avec ses annexes) ratifiée par le sous-Licencié et le Licencié. ARTICLE 4 – DÉVELOPPEMENT 4.1 Le Licencié devra déployer des efforts raisonnables d’un point de vue commercial pour réaliser les Travaux de Développement conformément à l’ensemble de la législation et de la règlementation applicables. 4.2 Le Licencié devra s’efforcer de déployer des efforts raisonnables d’un point de vue commercial afin d’Exploiter la Technologie Licenciée, directement ou indirectement par l’intermédiaire de ses sous-Licenciés. 4.3 Préalablement à l’Autorisation de Mise sur le Marché d’un Produit, dans le cas où le Licencié et ses sous-Licenciés interrompent les Travaux de Développement pendant une durée de plus de six (6) mois sans être en mesure de justifier raisonnablement cette interruption auprès de l’AP-HP, une mise en demeure pourra être adressée au Licencié l’intimant de reprendre lesdits Travaux de Développement dans les cent quatre-vingts (180) jours suivant la Page 10 of 42

Development Work within one-hundred and eighty (180) days of receipt of said formal notice (“Notice Period”), and the Parties shall consult together in order to assess the reasons for the delay and the means by which the situation may be remedied. In the event the Licensee is unable or unwilling to continue Development Work after the Notice Period, then AP-HP may convert this license in Article 2.1 above to a non-exclusive license by providing written notice to the Licensee. 4.4 The Licensee undertakes to comply with the applicable regulations in force in France and abroad for the Exploitation of the Licensed Technology and to make its commercially reasonable efforts to obtain the authorizations required by the applicable legislation and regulations in the countries where the Licensee plans to market the Products. The Parties agree that Exploitation of the Products in each of the countries of the Territory will have to be done at the latest within twelve (12) months of the obtainment of the Homologation of the Products in the United States. The Licensee shall be responsible for obtaining and maintaining in force, in its own name and at its own cost, any authorizations required by the applicable legislation and regulations in the countries where Exploitation of the Products is planned. 4.5 Within the scope of the clinical studies which may be implemented by or on order of the Licensee, the Licensee undertakes to comply with all the obligations required by the applicable legislation and regulations in the concerned countries. The Licensee shall réception de cette mise en demeure (le « Délai de Mise en Demeure »), et les Parties devront se concerter afin déterminer les raisons du retard et les moyens de remédier à la situation. Dans le cas où le Licencié ne serait pas en mesure ou n’aurait pas l’intention de poursuivre les Travaux de Développement à l’issue du Délai de Mise en Demeure, l’AP-HP pourra transformer par voie de notification écrite adressée au Licencié la licence de l’Article 2.1 ci-dessus en une licence nonexclusive. 4.4 Le Licencié s’engage à respecter la réglementation en vigueur en France et à l’étranger dans le cadre de l’Exploitation de la Technologie Licenciée et à engager des efforts raisonnables d’un point de vue commercial pour obtenir les autorisations requises par la législation et la règlementation applicables dans les pays où le Licencié prévoit de commercialiser les Produits. Les Parties conviennent que l’Exploitation des Produits dans chacun des pays du Territoire devra être réalisée au plus tard dans les douze (12) mois suivant l’obtention de l’Homologation des Produits aux États-Unis. Le Licencié sera responsable de l’obtention et du maintien en vigueur, en son nom et à ses propres frais, de toute autorisation requise par la législation et la règlementation applicables dans les pays où l’Exploitation des Produits est envisagée. 4.5 Dans le cadre des études cliniques qui pourront être menées par le Licencié ou sur son ordre, le Licencié s’engage à respecter l’ensemble des obligations imposées par la législation et la règlementation applicables dans les pays concernés. Le Licencié devra garantir et indemniser l’AP-HP au titre de toute action qui pourrait être engagée par des tiers au sujet de l’Exploitation des Produits, à moins que cette action ne découle d’une faute lourde ou d’une négligence de l’AP-HP, de la violation du Page 11 of 42

indemnify and hold AP-HP harmless with respect to any action which might be brought by third parties with regards to the Exploitation of the Products unless such action arises from AP-HP’s willful misconduct, negligence, breach of this Agreement or failure to comply with applicable laws or regulations, in which case AP-HP shall indemnify and hold Licensee harmless. 4.6 In the event whereby the Exploitation of one or more Products can in no way take place without the acquisition by the Licensee of additional industrial property rights from third parties, the Licensee undertakes to inform AP-HP in writing about the need to acquire said rights while transmitting all the elements making it possible to appreciate this need. ARTICLE 5 - IMPROVEMENTS 5.1 If during the Development Work or the Exploitation of the Licensed Technology, AP-HP, the Inventors or the Licensee makes an Improvement which may be the subject of a new patent application, the applicants of the new patent application shall be defined according to applicable patent laws. If a patent names inventors from both APHP and Licensee, then the Parties undertake to sign a joint ownership agreement governing their rights and obligations with regard to the jointly developed Improvements so that Licensee may Exploit such patent pursuant to Article 5.3 below. présent Contrat ou du non-respect de la législation ou de la réglementation applicables par l’AP-HP, auquel cas l’APHP devra garantir et indemniser le Licencié en conséquence. 4.6 Dans le cas où l’Exploitation d’un ou plusieurs des Produits serait totalement impossible à défaut d’acquisition par le Licencié de droits de propriété industrielle complémentaires auprès de tiers, le Licencié s’engage à informer l’AP-HP par écrit de la nécessité d’acquérir ces droits et à lui communiquer dans le même temps l’ensemble des éléments permettant d’apprécier cette nécessité. ARTICLE 5 – AMÉLIORATIONS 5.1 Si, au cours des Travaux de Développement ou de l’Exploitation de la Technologie Licenciée, l’AP-HP, les Inventeurs ou le Licencié apportent une Amélioration pouvant faire l’objet d’une nouvelle de demande de brevet, les déposants de la nouvelle demande de brevet seront déterminés conformément à la législation applicable en matière de brevets. Si un brevet désigne tant des inventeurs de l’AP-HP que du Licencié, les Parties s’engagent à conclure un règlement de copropriété régissant leurs droits et obligations relatifs aux Améliorations développées conjointement, de sorte que le Licencié puisse Exploiter ce brevet conformément à l’Article 5.3 ci-dessous. 5.2 Toute Amélioration apportée à la Technologie Licenciée exclusivement par des salariés de l’AP-HP et susceptible d’être protégée par un brevet fera l’objet d’un dépôt de demande de brevet au nom de l’AP-HP et aux frais de ce dernier. Cette demande de brevet devra être proposée en priorité au Licencié à des conditions non moins favorables que celle qui sont (ou seront) proposées à un tiers. Page 12 of 42

5.2 Any Improvement made to the Licensed Technology solely by AP-HP employees, and likely to be protected by patent will be subject to the filing of a patent application in the name of AP-HP and at its own cost. This patent application shall be first offered to the Licensee on terms no less favorable than are or will be offered to any third party. The Licensee shall then have three (3) months to exercise its right of first refusal. If Licensee declines to exercise its right of first refusal, or does not reply to AP-HP within this three (3) month period, AP-HP will have the right to offer such rights to a third party. If Licensee elects to exercise its right of first refusal with respect to any new patent application, such patent application shall be included as part of the Licensed Technology and the Parties shall negotiate in good faith an amendment to this Agreement. However, if AP-HP is not interested in filing any patent application disclosing the Improvement, it shall promptly inform the Licensee in writing forthwith, and the Licensee shall have the right to file such a patent application in its own name and at its own cost, and AP-HP shall, and cause the Inventors, AP-HP’s employees and agents to assist Licensee in the preparation, filing, prosecution and enforcement of any such patent applications and patent(s) issuing therefrom. 5.3 Any Improvement made to a Product resulting from work jointly financed by the Parties or in which they will have jointly taken part and likely to be protected by patent will be subject to the filing of a jointly owned patent application. Licensee shall have the sole right and responsibility to file the patent application and shall beforehand inform AP-HP so that AP-HP Le Licencié disposera alors d’un délai de trois (3) mois pour exercer son droit de préemption. Si le Licencié refuse d’exercer son droit de préemption, ou ne répond pas à l’AP-HP dans ce délai de trois (3) mois, l’AP-HP sera en droit de proposer les mêmes droits à un tiers. Si le Licencié décide d’exercer son droit de préemption sur une nouvelle demande de brevet, cette demande de brevet devra être ajoutée à la définition de la Technologie Licenciée et les Parties devront négocier de bonne foi un avenant au présent Contrat. Cependant, si l’AP-HP ne souhaite déposer aucune demande de brevet divulguant l’Amélioration, il devra en informer le Licencié par écrit et sans délai et le Licencié sera en droit de déposer cette demande de brevet en son propre nom et à ses propres frais, et l’AP-HP devra apporter son assistance au Licencié et faire en sorte que les Inventeurs, les salariés et représentants de l’AP-HP assistent ce dernier pour la préparation, le dépôt, l’examen et la mise en oeuvre de cette demande de brevet et du(des) brevet(s) qui en résulte(nt). 5.3 Toute Amélioration apportée au Produit résultant de travaux cofinancés par les Parties ou auxquels elles auront participé conjointement et susceptible d’être protégée par un brevet fera l’objet du dépôt d’une demande de brevet en copropriété. Le Licencié aura le droit et la responsabilité exclusives de procéder au dépôt de la demande de brevet et devra en informer préalablement l’AP-HP afin que l’AP-HP soit en mesure de donner son avis au sujet de la propriété de cette nouvelle demande. Eu égard à la désignation de co-inventeurs dans une demande de Brevet, l’une des Parties pourra informer l’autre par écrit et sans délai qu’elle n’est pas intéressée par le dépôt d’une telle demande. L’autre partie sera alors en mesure de procéder au Page 13 of 42

may be able to give their position as regards its advice regarding the ownership of this new application. With respect to Patents naming joint inventors, one of the Parties may inform the other in writing forthwith that it is not interested in such a filing. The latter shall then be in a position to proceed with the filing of such a patent application in its own name and at its own cost. The joint patents resulting from the Improvements jointly financed by the Parties or in which they have jointly taken part shall automatically fall within the scope of the subject matter of the present Agreement. This contribution shall be formally acknowledged by the signature of an amendment to the present Agreement which shall specify the terms and conditions of license and exploitation of the new patent. 5.4 Any Improvement made to the Licensed Technology or Product made solely by or on behalf of the Licensee and all Results thereof shall be owned by the Licensee. 5.5 Each Party shall obtain the signature of its inventors on any document required for said patent filings. ARTICLE 6 – REGISTRATION OF THE PRODUCTS The Licensee shall file in its own name and/or in the name of its sub-licensee(s), at its own cost or at said sub-licensee(s)’ cost, and in accordance with the regulation in force, country by country, the files for AMM or NDA or Homologation of the Product. The Licensee and/or its sub-licensee(s) shall be the owners of said AMMs or NDA or Homologation of the Product. dépôt d’une telle demande de brevet en son propre nom et à ses frais. Les brevets en propriété conjointe résultant des Améliorations cofinancées par les Parties ou auxquelles elles auront participé conjointement entreront automatiquement dans le champ d’application du présent Contrat. Cette contribution devra être formellement constatée par la conclusion d’un avenant au présent Contrat qui devra préciser les modalités et conditions de la licence et de l’exploitation du nouveau brevet. 5.4 Toute Amélioration de la Technologie Licenciée ou du Produit exclusivement réalisée par le Licencié ou pour son compte, ainsi que l’ensemble des Résultats y afférents, appartiendront au Licencié. 5.5 Chacune des Parties devra obtenir la signature de ses inventeurs sur chacun des documents nécessaires auxdits dépôts de demandes de brevet. ARTICLE 6 – INSCRIPTION DES PRODUITS Le Licencié devra déposer en son propre nom et/ou au nom de son/ses sous-Licencié(s), à ses propres frais ou à ceux dudit/desdits sous- Licencié(s), conformément à la réglementation en vigueur, pays par pays, les dossiers de demande d’AMM, de NDA ou d’Homologation du Produit. Le Licencié et/ou son/ses sous-Licencié(s) sera(ont) le(s) titulaire(s) desdites AMM, NDA ou Homologation du Produit. La fabrication et l’Exploitation des Produits se fera sous la responsabilité pleine et entière et sous le contrôle complet et absolu du Licencié. ARTICLE 7 - COMMERCIALISATION 7.1 Le Licencié devra déployer des efforts raisonnables d’un point de vuePage 14 of 42

Manufacture and Exploitation of Products shall occur under the absolute and full responsibility, control and liability of the Licensee. ARTICLE 7 - COMMERCIALIZATION 7.1 The Licensee shall use commercially reasonable efforts to Exploit a Product. 7.2 The Licensee shall be solely responsible for the manufacture of the Products, and for its policy of promotion, distribution and commercialization of the Products. The Licensee must obtain AP-HP's prior agreement to any promotional use of its name, its trademarks or any other distinctive sign of AP-HP, in accordance with the conditions set out in Article 23 below. This Agreement does not transfer or convey rights of either Party’s trade names or trademarks to the other Party. As a result, any written or verbal citation of the trade names and/or trademarks of one or the other of the Parties in any type of public communications, activities or events whatsoever, and particularly in any activity likely to be considered as having a direct or indirect promotional nature will remain, in any given case, subject to the prior express written authorization of the cited Party. 7.3 The Licensee guarantees compliance with this Article 7 and shall ensure, in this context, that the provisions of the present commercial pour Exploiter chaque Produit. 7.2 Le Licencié sera exclusivement responsable de la fabrication des Produits et de sa politique de promotion, de distribution et de commercialisation des Produits. Le Licencié doit obtenir l’accord préalable de l’AP-HP pour tout usage publicitaire de son nom, de ses marques ou de tous autres signes distinctifs de l’AP-HP, conformément aux conditions prévues à l’Article 23 ci-dessous. Le présent Contrat n’opère aucun transfert ou transmission des droits des noms commerciaux ou des marques de l’une des Parties au profit de l’autre Partie. Par conséquent, toute mention écrite ou orale des noms commerciaux et/ou des marques de l’une ou l’autre des Parties dans le cadre de tous types de communications, d’activités ou d’évènements publics quels qu’ils soient, et notamment dans le cadre de toutes activités susceptibles d’être considérées comme présentant un caractère publicitaire direct ou indirect, demeurera, dans tous les cas, soumise à l’autorisation préalable écrite et expresse de la Partie citée. 7.3 Le Licencié se porte fort du respect du présent Article 7 et devra veiller, à cet égard, à ce que les stipulations du présent Article soient incorporées dans tous les contrats de sous-licence qu’il pourra conclure. ARTICLE 8 –CONDITIONS FINANCIÈRES 8.1 En contrepartie des droits relatifs à des licences concédées en vertu du présent Contrat, le Licencié s’engage à : rembourser à l’AP-HP l’ensemble des frais de propriété intellectuelle et de prototypage engagés avant la date de signature du présent Contrat, Page 15 of 42

Article are included in any sub-licensing agreements into which it enters. ARTICLE 8 – FINANCIAL CONDITIONS 8.1 As consideration for the license rights granted under the present Agreement, the Licensee undertakes to: reimburse AP-HP for all the industrial property and prototyping costs incurred prior to the date of the signature of the present Agreement which are approximately [ *** ] Euros [ *** ] as set out in Article 8.2 of this Agreement, pay all taxes and annual fees related to the Patents from the date of signature of the present Agreement onwards, together with all other charges invoiced by the Initial Agency and/or its representatives for activities approved by Licensee occurring after the date of this Agreement, provide the funding required for the Exploitation of the Products, and pay AP-HP royalties for Exploitation of the Products pursuant to Article 8.4. 8.2 Industrial property The Licensee shall reimburse AP-HP for all the sums incurred by the latter for the filing prior to the date of the signature of the present Agreement, extension and maintenance of the Patents, in France and Europe which are approximately [ *** ] Euros [ *** ]. qui s’élèvent à environ [ *** ] euros comme indiqué à l’Article 8.2 du présent Contrat ; payer l’ensemble des impôts et taxes et frais annuels liés aux Brevets à compter de la date de signature du présent Contrat, ainsi que tous les autres frais facturés par le Premier Cabinet de Conseil et/ou ses représentants au titre des prestations approuvées par le Licencié et exécutées postérieurement à la date du présent Contrat ; fournir le financement nécessaire à l’Exploitation des Produits ; et payer à l’AP-HP les redevances d’Exploitation des Produits conformément à l’Article 8.4. 8.2 Propriété industrielle Le Licencié devra rembourser à l’AP-HP l’ensemble des sommes engagées par ce dernier au titre du dépôt, antérieur à la date de signature du présent Contrat, du renouvellement et du maintien en vigueur des Brevets, en France et en Europe, qui s’élèvent à environ [ *** ] euros. L’AP-HP devra envoyer au Licencié une facture au titre des frais engagés jusqu’à la signature du présent Contrat. Le Licencié devra payer ces frais à l’AP-HP dès réception de la facture adressée par ce dernier dans les trente (30) jours suivant la signature du présent Contrat. Toutes les factures devront être adressées par l’AP-HP au Licencié par courriel aux adresses suivantes, que ce dernier pourra, le cas échéant, mettre à jour par écrit : ap@acertx.com 8.3 Sommes forfaitaires et frais de maintien en vigueur Page 16 of 42 [ *** ] = Confidential material redacted and filed separately with the Commission.

AP-HP shall send to the Licensee a bill of the costs incurred up to the signature of the present Agreement. Said costs shall be paid to AP-HP on receipt of an invoice addressed by AP-HP to the Licensee within thirty (30) days of the signature of the present Agreement. All invoices shall be submitted by AP-HP to the Licensee via email to the following email addresses, which Licensee may update from time to time in writing: ap@acertx.com 8.3 Lump sums and Maintenance Fees As consideration for the exclusive rights granted under the present Agreement, the Licensee undertakes to: pay an amount of [ *** ] Euros [ *** ] exclusive of taxes to APHP within thirty (30) days of signature of the present Agreement; provide the funding required for execution of the Development Plan referenced in Appendix 1; pay an amount of [ *** ] Euros [ *** ] exclusive of taxes to APHP on each of the 1st, 2nd and 3rd anniversary date of this Agreement; and Therefore a potential total of [ *** ] Euros [ *** ] for lump sum payments regarding the Patents is contemplated by this Section 8.3. The above-mentioned sums are payable within thirty (30) days of notice of the applicable step. En contrepartie des droits d’exclusivité accordés en vertu du présent Contrat, le Licencié s’engage à : payer une somme de [ *** ] euros hors taxes au profit de l’AP-HP dans les trente (30) jours suivant la signature du présent Contrat ; fournir le financement nécessaire à la réalisation des Travaux de Développement indiqués en Annexe 1 ; payer une somme de [ *** ] euros hors taxes au profit de l’AP-HP à la date de chacun des 1er, 2ème et 3ème anniversaires du présent Contrat ; et par conséquent, le paiement d’une somme forfaitaire totale de [ *** ] euros relative aux Brevets est prévue par le présent Article 8.3. Les sommes susmentionnées sont exigibles dans les trente (30) jours suivant la notification de l’étape concernée. Toutes les factures devront être adressées par l’AP-HP au Licencié par courriel aux adresses suivantes, que ce dernier pourra, le cas échéant, mettre à jour par avis écrit : ap@acertx.com En tout état de cause l’AP-HP conservera irrévocablement la propriété de ces sommes une fois versées, sauf résiliation du présent Contrat par le Licencié en cas de manquement au présent Contrat ou de fraude scientifique de la part de l’AP-HP ou de non-respect de la législation ou de la règlementation applicables par ce dernier. Page 17 of 42 [ *** ] = Confidential material redacted and filed separately with the Commission.

All invoices shall be submitted by AP-HP to the Licensee via email to the following email addresses, which Licensee may update from time to time in writing: ap@acertx.com These sums when paid to AP-HP shall remain the property of AP-HP in any case and definitively unless this Agreement is terminated by Licensee for AP-HP’s breach of this Agreement, failure to comply with applicable laws and regulations, or scientific misconduct. 8.4 Royalties (a) As additional consideration for the rights granted under the present Agreement, the Licensee undertakes to pay AP-HP a royalty based on the annual Net Sales by the Licensee or any sub-licensee of any Product directed to vascular Ehlers-Danlos Syndrome (“vEDS”). (b) For the avoidance of doubt and given the rarity of Kyphoscoliotic Ehlers- Danlos, issued patents relating to the kEDS Patent shall not be included for the purpose of determining a Valid Claim in the table reproduced in Appendix 3, but royalties on Net Sales in a country may include Net Sales potentially attributable to kEDS. (c) This royalty is set to as the table reproduced in Appendix 3 and article 8.4 Redevances (a) A titre de rémunération supplémentaire des droits accordés en vertu du présent Contrat, le Licencié s’engage à payer à l’AP-HP une redevance calculée sur les Ventes Nettes annuelles générées par le Licencié ou tout sous-Licencié de tout Produit destiné [à traiter] le Syndrome d’Ehlers-Danlos vasculaire (« vEDS »). (b) Afin de lever toute ambiguïté et compte tenu de la rareté du Syndrome d’Ehlers-Danlos de type Cyphoscoliotique, les brevets délivrés relatifs au Brevet cEDS ne sont pas pris en compte afin de déterminer une Revendication Valable dans le tableau reproduit à l’Annexe 3, mais les redevances sur les Ventes Nettes réalisées dans un pays peuvent comprendre les Ventes Nettes potentiellement attribuables au Brevet cEDS. (c) Cette redevance est calculée comme indiqué dans le tableau reproduit à l’Annexe 3 et à l’Article 8.5 : (d) Afin de lever toute ambiguïté, le calendrier de paiement des redevances dues dans les pays où il existe une Revendication Valable doit être mesuré sur les années indiquées à compter de la Date d'Entrée en Vigueur, et non à compter de l'année durant laquelle une Revendication Valable a été initialement délivrée. Les redevances seront exigibles pour tout Produit, pays par pays, dans chaque pays du Territoire, à compter de la date de Mise sur le Marché d’un Produit destiné à traiter le Syndrome d’Ehlers-Danlos vasculaire. 8.5 En cas de survenance de l’un ou de plusieurs des trois évènements suivants (un « Cas de Réduction des Redevances »), les redevances Page 18 of 42

8.5 (d) For the avoidance of doubt, the schedule of royalties in countries where a Valid Claim exists shall be measured in years shown from the Effective Date, and not from the year in which a Valid Claim first issues. Royalties shall be due for any Product and on a country-by-country basis in each one of the countries of the Territory, from the date of first Marketing of a Product directed to vascular Ehlers- Danlos syndrome. 8.5 Upon occurrence of one or more the following three events (a “Stepdown Event”), the following modifications of the royalties will occur: a. At the date on which there is no longer Valid Claim granted in such country, no further royalty will be due for this country b. The date a third party obtain more than [ *** ] of the market (as measured by prescriptions) for celiprolol used for indications related to vascular Ehlers- Danlos Syndrome, the royalty will be reduced by [ *** ] in this country. c. Until the latest expiration of any “market exclusivity” period conferred by the obtainment of an Orphan designation, NDA, PUMA, or pursuant to the U.S. FDA orphan drug designation as codified in 21 C.F. R. 316, the royalty will be reduced by [ *** ] in such country. seront modifiées comme suit : a. A la date à laquelle il n’existe plus de Revendication Valable acceptée dans un pays, aucune autre redevance ne sera plus exigible pour ce pays. b. A la date à laquelle un tiers obtient plus de [ *** ] des parts du marché (mesurées en fonction des prescriptions médicales) du céliprolol utilisé [pour le traitement du Syndrome d’Ehlers-Danlos vasculaire, les redevances seront réduites de [ *** ] pour ce pays. c. A compter de la dernière expiration d’une période « d’exclusivité commerciale » résultant de l’obtention d’une désignation de médicament orphelin, d’une NDA, d’une PUMA (« Paediatric Use Marketing Authorization » – Autorisation de mise sur le marché en vue d'un usage pédiatrique) ou d’une désignation de médicament orphelin conférée par l’Agence américaine des produits alimentaires et médicamenteux (US FDA – Food and Drug Administration) telle que prévue à la partie 316 du titre 21 du Code des règlements fédéraux américain (Code of federal regulations), les redevances seront réduites de [ *** ] pour ce pays. 8.6 Le Licencié sera seul responsable du paiement des redevances et de toutes autres sommes dues à AP-HP en vertu des présentes, y compris sur le chiffre d’affaires des sous-Licenciés. 8.7 Le paiement des droits, frais, redevances et autres sommes susmentionnées devra être effectué comme suit : Un relevé des Ventes Nettes de tout Produit ou de toute autre opération financière, au 31 décembre de chaque année, certifié exact par le Directeur Financier (« DF ») du Licencié, devra être communiqué par le Licencié à l’AP-HP au plus tard le 31 mars de l’année suivante, [ *** ] = Confidential material redacted and filed separately with the Commission. Page 19 of 42

8.6 The Licensee shall be solely responsible for payment of the royalties and any other sums due to AP-HP hereunder, including revenues from sub-licensees. 8.7 Payment of the rights, costs, royalties and other above-mentioned revenues shall be performed as follows: Statement of the Net Sales of any Product or of any other financial transaction, as of December 31 of each year and certified to be true by the Chief Financial Officer (“CFO”) of the Licensee, shall be sent by Licensee to AP-HP no later than March 31 of the following year, even in the absence of sales or of transaction during the year in question. After acceptance of this statement by APHP, the sums due for the year in question shall be paid within forty-five (45) days of receipt of the invoices issued by AP-HP. All the sums payable by the Licensee to AP-HP by virtue of the present Agreement must be addressed to: Office de Transfert de Technologie et de Partenariats Industriels Délégation Régionale à la Recherche Clinique Hôpital Saint-Louis – Bâtiment Lugol - Porte 22 1, avenue Claude Vellefaux 75475 Paris Cedex 10 and paid, being made out to “Monsieur Le Trésorier Payeur Général près l’AP-HP”, to the account of the name of “Trésorerie même en l’absence de vente ou d’opération au cours de l’année en question. Lorsque l’AP-HP aura approuvé ce relevé, les sommes exigibles au titre de l’année en question devront être payées dans les quarante-cinq (45) jours suivant la réception des factures émises par l’APHP. Le paiement de toutes les sommes dues par le Licencié au profit d’AP-HP en vertu du présent Contrat doit être effectué à l’adresse suivante : Office de Transfert de Technologie et de Partenariats Industriels Délégation Régionale à la Recherche Clinique Hôpital Saint-Louis – Bâtiment Lugol - Porte 22 1, avenue Claude Vellefaux 75475 Paris Cedex 10 à l’attention de « Monsieur Le Trésorier Payeur Général près l’AP-HP », sur le compte ouvert au nom de la « Trésorerie Générale de l'Assistance Publique- Hôpitaux de Paris » auprès de la Banque de France sous le numéro suivant : [ *** ] Toute somme non payée par le Licencié dans les délais susmentionnés donnera lieu, par défaut, à des intérêts de retard calculés prorata temporis selon les règles applicables aux Établissements Publics (soit, à la date de signature, le taux d’intérêt légal en vigueur majoré de deux (2) points). Le cas échéant, les sommes dues seront majorées des frais légaux et notamment de la TVA au taux en vigueur. 8.8 Les sommes dues à l’AP-HP aux termes du présent Article 8 devront être payées en euros par le Licencié. Si le Licencié[ *** ] = Confidential material redacted and filed separately with the Commission. Page 20 of 42

Générale de l'Assistance Publique- Hôpitaux de Paris” at the Banque de France with the account number: [ *** ] Any amount not paid by the Licensee within the aforementioned timeframes will give rise to default interest calculated prorata temporis according to the rules applicable to French Public Establishments (namely, at the date of signature, the legal interest rate in force plus two (2) points). If applicable, the amounts payable will be increased by the legal fees and in particular the VAT at the rate in force. 8.8 The sums due to AP-HP under the present Article 8 shall be paid by the Licensee in Euros. If the Licensee makes Net Sales in a currency other than the Euro, the amount of the payment due to AP-HP shall be calculated in these currencies and converted into Euros at the average rate in force at the Banque de France over the last three months before the closing date of the statement of annual accounts of the Licensee. 8.9 The Licensee shall notify AP-HP of the occurrence of these Stepdown Events, without delay after the day of their occurrence. The above-mentioned sums are payable pursuant to Section 8.7. ARTICLE 9 – ACCOUNTING 9.1 The Licensee undertakes to keep specific books of account, and to ensure that its Affiliates and their sub-licensees do likewise, concerning the sums received for the Exploitation of the Licensed Technology. The books of account shall contain all data required for accurate evaluation of the commercial transactions performed to calculate the sums due to APréalise des Ventes Nettes dans une devise autre que l’euro, le montant du paiement dû à l’AP-HP devra être calculé dans cette devise et converti en euros au taux de change moyen en vigueur déterminé par la Banque de France sur les trois derniers mois précédant la date de clôture des comptes annuels du Licencié. 8.9 Le Licencié devra aviser l’AP-HP de la survenance de ces Cas de Réduction des Redevances, sans délai suivant le jour de leur survenance. Les sommes susmentionnées sont payables en vertu de l’Article 8.7. ARTICLE 9 – COMPTABILITE 9.1 Le Licencié s’engage à tenir, et à veiller à ce que ses Affiliées et leurs souscessionnaires tiennent, des livres de comptes spécifiques concernant les sommes perçues au titre de l’Exploitation de la Technologie Licenciée. Les livres de comptes devront contenir toutes les données nécessaires à l’évaluation des opérations commerciales exécutées aux fins de calcul des sommes dues à l’APHP. 9.2 Ces états comptables spécifiques devront être mis à la disposition de l’AP-HP chaque année sur demande écrite de l’APHP au titre des trois (3) années suivant l’année civile à laquelle ils se rapportent. Sur demande écrite de l’AP-HP, dans la limite d’une fois par an au maximum, le Licencié autorisera un expert-comptable indépendant choisi par l’AP-HP à auditer lesdits comptes afin de vérifier l’exactitude du calcul des sommes dues à l’AP-HP. Les frais et honoraires de l’expert-comptable seront à la charge de l’AP-HP, hormis en cas de différence supérieure ou égale à 5% entre le calcul réalisé par l’expert-comptable des sommes dues à l’AP-HP et celles déclarées par le Licencié. Dans ce dernier[ *** ] = Confidential material redacted and filed separately with the Commission. Page 21 of 42

HP. 9.2 These specific accounting statements shall be made available to AP-HP each year pursuant to AP-HP’s written request for the three (3) following years after the calendar year to which they relate. On written request by AP-HP, but limited to once a year at the most, the Licensee shall authorize an independent certified public accountant chosen by AP-HP to audit said accounting statements with a view to checking the accuracy of the calculation of the sums due to AP-HP. The accountant's costs and fees shall be borne by AP-HP, except when calculation by this accountant of the sums due to AP-HP differs by 5% or more from that stated by the Licensee. In the latter case, the Licensee shall bear all the costs and fees incurred by the audit. Said accountant shall proceed to auditing in compliance with the provisions of the present Article 9. The appointed accountant shall be sworn to professional confidentiality. 9.3 The provisions of the present Article 9 shall remain in force throughout the term of the present Agreement and for three (3) years after its expiration or termination. ARTICLE 10 – INDUSTRIAL PROPERTY 10.1 Throughout the term of the present Agreement, the Licensee shall be responsible for managing files and bearing costs related to the procedures for filing applications, grant, examination, extension, maintenance in force and defense of the Patents in the country in which they are filed or granted, throughout cas, le Licencié supportera la totalité des frais et honoraires exposés dans le cadre de cet audit. L’expert-comptable procédera à l’audit dans le respect des stipulations du présent Article 9. L’expertcomptable désigné devra être assermenté et tenu au secret professionnel 9.3 Les stipulations du présent Article 9 demeureront en vigueur pendant toute la durée du présent Contrat et pendant un délai supplémentaire de trois (3) ans suivant l’expiration ou la résiliation des présentes. ARTICLE 10 – PROPRIÉTÉ INDUSTRIELLE 10.1 Pendant toute la durée du présent Contrat, le Licencié sera responsable de la gestion des dossier et supportera les coûts afférents aux procédures de dépôt des demandes d’enregistrement, de délivrance, d’examen, de renouvellement, de maintien en vigueur et de défense des Brevets dans les pays où ils sont déposés ou délivrés, pendant toute la durée du présent Contrat, par l’intermédiaire du cabinet de conseil en propriété industrielle initialement désigné par l’AP-HP pour procéder au dépôt des Brevets à la date de mise en oeuvre du présent Contrat, ci-après désigné le « Premier Cabinet de Conseil ». 10.2 Le Premier Cabinet de Conseil, ainsi que les représentants étrangers du Premier Cabinet de Conseil, pourront être remplacés à l’entière discrétion du Licencié et à ses frais après avoir obtenu l’accord de l’AP-HP, cet accord ne devant pas être déraisonnablement refusé, soumis à condition ou retardé. A défaut de réponse de l’AP-HP dans un délai de trente (30) jours suivant la réception de la notification, l’AP-HP (pour son compte et pour le compte des copropriétaires) sera réputé avoir approuvé le remplacement. Toutefois, préalablement à tout remplacement, le Premier Cabinet de Conseil, conformément aux directives écrites du Licencié, devra veiller à la Page 22 of 42

the term of the present Agreement via the patent attorney agency initially appointed by AP-HP to file the Patents at the date of implementation of the present Agreement and hereinafter referred to as the “Initial Agency”. 10.2 The Initial Agency and any foreign representatives of the Initial Agency may be replaced at the Licensee’s sole discretion and at its own cost after obtaining the consent of AP-HP which shall not be unreasonably withheld, conditioned or delayed. Should AP-HP fail to respond within thirty (30) days of receipt of the notification, AP-HP (on behalf of itself and the co-owners) shall be deemed to have approved the replacement. However, prior to any replacement, the Initial Agency, pursuant to Licensee’s written instructions, shall ensure the coordination of the examination and of the follow-up of the procedures in all the countries in which the Patents have been subjected to filing. 10.3 The Licensee undertakes to put AP-HP in copy of any writing of the state of progress of all procedures relating to the Patents and shall require its correspondents to send a systematic copy of any document relating to the Patents to the Initial Agency. 10.4 After entry into force of the present Agreement, the Initial Agency and/or its foreign representatives in charge of the Patents shall charge the Licensee directly for the industrial property costs related to the Patents for legal services requested by Licensee. coordination de l’examen et du suivi des procédures dans tous les pays où les Brevets ont fait l’objet d’un dépôt. 10.3 Le Licencié s’engage à mettre l’AP-HP en copie de tous les écrits relatifs à l’état d’avancement de toutes les procédures relatives aux Brevets et devra demander à ses correspondants d’adresser systématiquement au Premier Cabinet de Conseil une copie de tous les documents relatifs aux Brevets. 10.4 A compter de l’entrée en vigueur du présent Contrat, le Premier Cabinet de Conseil et/ou ses représentants étrangers responsables des Brevets devra(ont) facturer directement au Licencié les frais de propriété industrielle concernant les Brevets au titre des prestations de services juridiques demandées par le Licencié. 10.5 Si le Licencié ne souhaite pas poursuivre les procédures de dépôt des demandes d’enregistrement, de renouvellement, de délivrance, de maintien de vigueur ou de défense d’un ou de plusieurs Brevets dans un pays donné, il en informera l’AP-HP via un service de messagerie international avec un préavis d’au moins deux (2) mois avant la date d’échéance correspondante (en ce compris toute prorogation de délai possible) de sorte que l’AP-HP puisse, s’il le souhaite, poursuivre à ses propres frais les procédures de dépôt des demandes de renouvellement, de délivrance ou de maintien de vigueur et de défense des Brevets dans le pays en question, en France ou à l’étranger. Si le Licencié refuse de poursuivre une quelconque demande d’enregistrement, le Licencié n’aura alors plus aucun droit d’exploitation sur ces Brevets dans les pays en question, et n’aura droit à aucun remboursement de frais de propriété industrielle déjà exposés au titre de ces Brevets. Toute modification du territoire devra être déterminée par l’AP-HP et le Licencié sous forme d’avenant au présent Page 23 of 42

10.5 If the Licensee does not wish to pursue the procedures for filing, extension, grant, maintenance in force or defense of the one or more of the Patents in a given country, it will so inform AP-HP by global courier requested at least two (2) months before the associated due date (including any available extensions of time) so that AP-HP can, if it so wishes, pursue the procedures for extension, grant or maintenance in force and defense of the Patents at its own cost, in this country, in France or abroad. If Licensee declines to pursue any application, then Licensee shall no longer have any right to exploit such applicable Patents in the countries in question, and shall not be entitled to any reimbursement of industrial property costs already incurred with respect to said Patents. An amendment to the territory will be established between AP-HP and the Licensee as modification to the present Agreement. ARTICLE 11 – INFRINGEMENT AP-HP and the Licensee shall promptly inform each other of: (a) any act of infringement of the Patents by a third party; or (b) allegations that the Products infringe the rights of any third party patents. Licensee shall have the sole right to enforce all Patents against any threatened, alleged or actual infringement. AP-HP shall cooperate (and cause its employees and agents to cooperate) (including joining or being named as a necessary party thereto) in any infringement enforcement and defence litigation conducted by Licensee in its sole discretion. ARTICLE 12 – WARRANTY - Contrat. ARTICLE 11 – CONTREFAÇON L’AP-HP et le Licencié devront s’informer mutuellement sans délai de (a) tout acte de contrefaçon des Brevets commis par un tiers et (b) de toute allégation selon laquelle les Produits enfreindraient les droits de tiers relatifs à leurs brevets. Le Licencié est seul habilité à faire faire valoir l’ensemble des Brevets en cas de contrefaçon potentielle, alléguée ou constatée. L’AP-HP devra collaborer (et faire en sorte que ses salariés et mandataires collaborent) (y compris en qualité d’intervenant (necessary party) volontaire ou forcé) à toute action en contrefaçon ou procédure contentieuse de défense engagée par le Licencié à son entière discrétion. ARTICLE 12 – GARANTIE - INDEMNISATION 12.1 L’AP-HP déclare et garantit au Licencié qu’elle détient la totalité des droits sur la Technologie Licenciée et sur les inventions protégées par les Brevets. 12.2 L’AP-HP déclare et garantit au Licencié qu’elle est pleinement habilitée à lui concéder les droits concédés en vertu du présent Contrat, et que la conclusion et l’exécution du présent Contrat n’entraineront la violation d’aucun contrat auquel elle est partie, ni d’aucune obligation à laquelle elle est tenue, ni aucun manquement à ceux-ci. 12.3 Aucune des stipulations du présent Contrat ne peut être interprétée comme constituant : - une garantie de la part de l’AP-HP des Inventeurs concernant la délivrance, la validité ou le périmètre de l’un quelconque des Brevets dans tout pays du Territoire, - une garantie de l’absence de contrefaçon, actuelle ou future, des brevets de tiers ou de tous autres droits de Page 24 of 42

INDEMNIFICATION 12.1 AP-HP each state and warrant to the Licensee that it owns all rights in and to the Licensed Technology and the inventions covered by the Patents. 12.2 AP-HP each state and warrant to the Licensee that it is fully authorized to grant to it rights granted by the present Agreement and that entering into and performing this Agreement shall not cause a breach or default in any other agreement or obligation to which it is a party. 12.3 Nothing in the present Agreement shall be construed as: - constituting a warranty from AP-HP or the Inventors as to the grant, validity or scope of any of the Patents any country in the Territory, - constituting a warranty of the absence of current or future infringement of third party patents or of any other third party intellectual property rights, - constituting a warranty of the innocuousness, performance or fitness of the Licensed Technology for a given purpose. No other warranty, of any kind whatsoever, express or implied, is granted by AP-HP to the Licensee. The Licensee, its Affiliates and its sublicensees shall bear sole responsibility for the possible hazards, risks and perils concerning performance of the present Agreement and of its sub-licensees and the potential legal flaws in one or more of the Patents. propriété intellectuelle de tiers, - une garantie de l’innocuité, de l’efficacité ou de l’adéquation de la Technologie Licenciée à un usage particulier. Aucune autre garantie de quelque nature que ce soit, expresse ou tacite, n’est accordée par les l’AP-HP au profit du Licencié. Le Licencié, ses Affiliées et sous- Licenciés seront les responsables exclusifs au titre des éventuels dangers, risques et périls relatifs à l’exécution du présent Contrat et des sous-licences y afférentes ainsi qu’en cas d'éventuels vices juridiques affectant un ou plusieurs des Brevets. En cas de rejet ou d’annulation d’un ou plusieurs Brevets, d’invention dépendante de ces Brevets et/ou de tout Savoir-Faire portant sur un brevet dominant antérieur, l’AP-HP ne sera pas tenue de restituer les sommes déjà versées par le Licencié, ni de réduire le montant des sommes dues jusqu’à la date du prononcé d’une décision de justice définitive, ni de verser d’éventuels dommages-intérêts au Licencié, à ses Affiliées et/ou sous- Licenciés en réparation du préjudice causé par ce rejet, cette annulation ou cette dépendance. 12.4 Le Licencié, ses Affiliées et leurs sous- Licenciés devront indemniser l’AP-HP et les membres de son personnel au titre de toutes procédures qui pourraient être engagées à leur encontre en raison de dommages corporels ou de dommages matériels résultant de la possession et de l’utilisation de la Technologie Licenciée et de l’Exploitation du Produit par le Licencié, ses Affiliées ou leurs sous- Licenciés, hormis dans la mesure où ces procédures sont fondées sur des allégations de faute intentionnelle, de fraude scientifique, de négligence, de nonPage 25 of 42

In the event of rejection, cancellation of one or more Patents, dependence of said Patents on dominating prior patent, AP-HP shall not be obliged to return sums already paid by the Licensee or to reduce the amount of the sums due until such time as a final judicial decision is made or to pay any potential damages to the Licensee, its Affiliates and/or its sub-licensees in compensation for the prejudice caused by said rejection, cancellation or dependence. 12.4 The Licensee, its Affiliates and their sublicensees shall indemnify AP-HP and the members of its staff against any proceedings which might be brought against them by reason of personal injury or material damage resulting from possession and use of the Licensed Technology and Exploitation of the Product by the Licensee, its Affiliates or their sub-licensees except to the extent that such proceedings allege the wilful misconduct, scientific misconduct, negligence, failure to comply with applicable laws or regulations, or breach of this Agreement, in which case AP-HP shall indemnify and hold Licensee harmless. 12.5 The Licensee shall ensure that it has adequate insurance to cover reasonable risks given the nature of its business. 12.6 The Licensee shall be solely and fully liable for any breach or fault committed by itself towards a sub-licensee, without possibility of calling AP-HP in warranty in this respect unless AP-HP has contributed to such liability in which case AP-HP shall be liable for its contribution to such liability. respect de la législation ou de la réglementation ou de violation du présent Contrat, auquel cas l’AP-HP devra indemniser et garantir le Licencié. 12.5 Le Licencié devra veiller à disposer des assurances qui conviennent pour couvrir les risques raisonnables liés à la nature de ses activités. 12.6 Le Licencié sera tenu exclusivement et pleinement responsable en cas de violation ou de faute qu’il commettrait vis-à-vis d’un sous-Licencié, sans possibilité d’appeler l’AP-HP en garantie à moins que l’AP-HP n’ait contribué au fait générateur donnant lieu à cette responsabilité, auquel cas l’AP-HP sera responsable de sa contribution audit dommage. 12.7 Le Licencié devra indemniser l’AP-HP au titre de toutes procédures engagées à l’encontre de ce dernier sur le fondement d’une faute commise par le Licencié, ses Affiliées ou leurs sous-Licenciés en l’absence de toute participation active ou par fourniture de moyens de l’AP-HP à la commission de l’infraction ou à la réalisation du dommage fondant la décision de justice, dès lors que l’AP-HP aura pleinement respecté les stipulations du présent Contrat et l’ensemble de la législation et de la réglementation applicables. Le Licencié se porte fort de la ratification et du respect par ses Affiliées et/ou sous- Licenciés des stipulations des Articles 12.4 et 12.6 du présent Contrat. 12.8 Le Licencié garantit à l’AP-HP qu’il paiera toutes les sommes non contestées dues au titre des opérations commerciales, des contrats de cession de droits ou de sous-licence. Le Licencié assumera seul la responsabilité de toutes actions engagées à l’encontre de son sous-Licencié fondées sur une demande de recouvrement des sommes dues au Licencié et assujetties Page 26 of 42

12.7 The Licensee shall indemnify AP-HP against any proceedings instituted against the latter on the basis of a fault committed by the Licensee, its Affiliates or their sublicensees in the absence of AP-HP active or contributory involvement in the performance of the infraction or damage on which the court's decision is grounded, and so long as AP-HP has remained in full compliance with the terms of this Agreement and all applicable laws and regulations. The Licensee is guaranteeing the ratification of and compliance with the provisions of Articles 12.4 and 12.6 of the present Agreement by its Affiliates and/or its sub-licensees. 12.8 The Licensee warrants to AP-HP that it shall pay all undisputed sums due for commercial transactions, rights transfer or sub-license agreements. The Licensee shall be solely responsible for the actions brought against its sub-licensee asserting a claim to recover the sums due to the Licensee and subject to the financial conditions set out in Article 8 and 9 of the present agreement in favour of AP-HP. 12.9 Notwithstanding the provisions of this Article 12, Licensee shall have no liability for actions alleging scientific misconduct by AP-HP or the Inventors. ARTICLE 13 – CONFIDENTIALITY 13.1 Each Party agrees to maintain confidential aux conditions financières prévues aux Articles 8 et 9 du présent Contrat en faveur de l’AP-HP. 12.9 Nonobstant les stipulations du présent Article 12, le Licencié n’encourra aucune responsabilité en cas d’actions fondées sur des allégations de fraude scientifique à l’encontre de l’AP-HP ou des Inventeurs. ARTICLE 13 – CONFIDENTIALITÉ 13.1 Chacune des Parties s’engage à respecter le caractère confidentiel et s’interdit de communiquer ou de divulguer à quiconque, sans l’accord écrit préalable de l’autre Partie, les informations de toute nature dont elle pourrait avoir connaissance dans le cadre de l’exécution du présent Contrat et notamment toutes les informations confidentielles relatives aux Travaux de Développement et/ou aux Améliorations qu’elle pourrait recueillir en vertu des présentes (ci-après les « Informations Confidentielles »). 13.2 Les Informations Confidentielles ne comprennent pas les informations qui : - faisaient partie du domaine public à la date de leur communication ou ont été par la suite mises à la disposition du public par un tiers de bonne foi, ou - étaient déjà connues de la Partie réceptrice à la date d’entrée en vigueur des présentes, à moins que lesdites Informations n’aient été reçues de l’une des Parties aux présentes, - doivent être divulguée en vertu d’une ordonnance judiciaire, ou - ont été reçues de la part d’un tiers autorisé à divulguer lesdites Informations Confidentielles. 13.3 Pendant la durée du présent Contrat, les Page 27 of 42

and not to communicate or disclose to anyone without the prior written agreement of the other Party the information of any kind of which it might be informed during the performance of the present Agreement and in particular all confidential information relating to the Development Work and/or the Improvements it might receive hereunder (hereinafter referred to as “Confidential Information”). 13.2 Confidential Information shall not include information which: - was part of the public domain at the date of its communication or was made available to the public by a third party in good faith subsequently, or - was already known to the receiving Party at the date of entry into force hereof, unless said Information had been received from one of the Parties hereto, - is required to be disclosed by a judicial order, or - was received from a third party with the right to disclose said Confidential Information. 13.3 Throughout the term of this Agreement, both Parties undertake to maintain the confidentiality of the Licensed Technology, the Results and analysis of the Development Work, on the understanding however that transmission of certain items of this Confidential Information in the three following circumstances shall not be considered as a breach, by a Party, of its undertaking of confidentiality: - if transmission of the Confidential Information to the competent public authorities is required for the obtainment of the Homologation of the Licensed Technology by the Parties s’engagent à préserver la confidentialité de la Technologie Licenciée, des Résultats et des analyses des Travaux de Développement, étant entendu, toutefois, que la transmission de certains éléments de ces Informations dans les trois cas suivants n’est pas considérée comme une violation de son engagement de confidentialité par une Partie : - la transmission des Informations aux autorités publiques compétentes est nécessaire pour l’obtention de l’Homologation de la Technologie Licenciée par le Licencié - les Informations sont divulguées avec l’accord écrit préalable de la Partie divulgatrice - les Informations sont contenues dans un nouveau dépôt de demande de brevet comme convenu à l’Article 5 du présent Contrat. En tout état de cause, il incombe à la Partie réceptrice de démontrer que l’information ne constitue pas une Information Confidentielle. 13.4 Chaque Partie s’engage à ne pas déposer de demande de brevet ou autres titres de propriété industrielle comportant des Informations Confidentielles de l’autre Partie sans avoir obtenu l’accord écrit préalable de cette dernière, et en particulier s’agissant des stipulations de l’Article 5 du présent Contrat, cet accord ne devra pas être refusé déraisonnablement. 13.5 Le Licencié sera autorisé à divulguer les Informations Confidentielles à des tiers (y compris ses sociétés Affiliées et ses sous- Licenciés), dans la mesure où la divulgation de ces Informations Confidentielles est utile ou nécessaire au Licencié pour le développement ou Page 28 of 42

Licensee - if the Confidential Information is disclosed with the prior, written approval of the disclosing Party - if the Confidential Information is contained within a new filing of a patent application as agreed in Article 5 of the present Agreement. In any case, the onus is on the receiving Party to prove that the information is not Confidential Information. 13.4 Each Party undertakes not to file a patent application or other industrial property titles featuring the other Party's Confidential Information without having obtained the latter's prior written approval and in particular with respect to the provisions of Article 5 of the present Agreement, such approval not to be unreasonably withheld. 13.5 The Licensee shall have the right to disclose the Confidential Information to third parties (including its Affiliated companies and its sub-licensees), in as much as disclosure of this Confidential Information is useful or necessary for the Licensee to research, develop or Exploit the Licensed Technology granted hereunder, as long as the third party to which this Confidential Information is transmitted is bound by a similar duty of confidentiality as that set out above. 13.6 The Parties undertake to take all reasonably required measures to satisfy their obligations under the present Article 13. 13.7 The present duty of confidentiality shall l’Exploitation de la Technologie Licenciée accordée en vertu des présentes ou pour effectuer des recherches sur celleci, sous réserve que le tiers auquel ces Informations Confidentielles sont transmises soit tenu par une obligation de confidentialité similaire à celle prévue cidessus. 13.6 Les Parties s’engagent à adopter toutes les mesures raisonnablement nécessaires pour satisfaire à leurs obligations aux termes du présent Article 13. 13.7 La présente obligation de confidentialité s’appliquera aussi longtemps que l’Information Confidentielle n’est pas manifestement tombée dans le domaine public pendant la durée du présent Contrat et pendant un délai de cinq (5) ans à compter de son expiration ou de sa résiliation, quel qu’en soit le motif. 13.8 Les administrateurs, mandataires sociaux, salariés, représentants et consultants du Licencié sont soumis aux obligations découlant du présent Article 13. Chaque Partie s’engage à limiter la divulgation des Informations Confidentielles reçues de l’autre Partie aux seuls membres de son personnel participant à l’exécution du présent Contrat. 13.9 Les stipulations du présent Article ne s’opposent pas : - à l’obligation faite aux chercheurs de chacune des Parties au présent Contrat de soumettre un rapport d’activité à leur organisme de contrôle, cette communication ne constitue pas une divulgation au sens de la législation en matière de propriété industrielle ; - aux examens oraux des chercheurs dont l’activité scientifique est liée à l’objet du présent Contrat ; lesdits examens devront être réalisés dans des conditions garantissant la confidentialité des Résultats et des informations soumises Page 29 of 42

hold as long as the Confidential Information is not manifestly in the public domain during the term of the present Agreement and for five (5) years following its expiration or termination for whatever reason. 13.8 The administrateurs [« directors »], mandataires sociaux [« corporate officers »], employees, agents and consultants of the Licensee shall be subject to the obligations under the present Article 13. Each Party undertakes to limit the disclosure of the Confidential Information received from the other Party to the sole members of its staff involved in the performance of the present Agreement. 13.9 The provisions of the present Article shall not preclude: - the obligation placed on the researchers of each of the Parties to the present Agreement to submit an activity report to their supervisory body; this communication shall not constitute a disclosure as defined in the legislation on industrial property, - viva voce examinations of researchers whose scientific activity is related to the subject matter of the present Agreement; said examinations shall be conducted under circumstances guaranteeing the confidentiality of the Results and information under the confidentiality duties no less stringent that those set forth in Article 13.1 of the present Agreement. 13.10 It is understood that the present Agreement shall not constitute a derogation to the exclusive ownership of each one of the Parties on its names and trademarks. As a result, any written or verbal citation of the names and/or trademarks of one of the Parties in any public communications, activities or events whatsoever, and particularly in any activity likely to be considered as having a direct or indirect promotional nature will remain, in any aux obligations de confidentialité et non moins strictes que celles prévues à l’Article 13.1 du présent Contrat. 13.10 Il est entendu que le présent Contrat ne constitue par une dérogation à la propriété exclusive de chacune des Parties de ses noms et ses marques de commerce. En conséquence, toute mention écrite ou orale des noms et/ou marques de commerce de l’une des Parties dans le cadre de toutes communications publiques, activités ou évènements quelconques, et notamment dans le cadre de toute activité susceptible d’être considérée comme ayant un caractère publicitaire direct ou indirect, demeurera, en tout état de cause, soumise à l’autorisation préalable expresse de la Partie citée. ARTICLE 14 – ACQUISITION DE PRODUITS PAR L’AP-HP À titre de contrepartie partielle de la licence concédée au profit du Licencié, il est convenu que si l’AP-HP souhaite acquérir des Produits uniquement à des fins d’utilisation commerciale, et non à des fins de revente, les conditions tarifaires suivantes s’appliqueront : il est expressément convenu que le prix proposé par le Licencié à l’AP-HP pour l’acquisition d’un Produit ne sera pas supérieur au prix proposé par le Licencié à tout acquéreur d’un Produit à des conditions similaires (par exemple, en termes de quantité), en ce compris les rabais, le cas échéant. ARTICLE 15 – DUREE DU CONTRAT Le présent Contrat entrera en vigueur le 19 Septembre 2018. Il demeurera en vigueur, à moins qu’il ne fasse l’objet d’une résiliation anticipée conformément aux termes et conditions des présentes, jusqu’à la survenance du dernier des trois évènements suivants (qui peuvent se cumuler) : 1- expiration ou annulation de la dernière Revendication Valable dans un Page 30 of 42

given case, subjected to the prior express authorization of the cited Party. ARTICLE 14 – ACQUISITION OF PRODUCTS BY AP-HP As partial consideration for the license granted to the Licensee, it is agreed that if AP-HP wishes to acquire the Product for commercial use only, and not for resale, the following pricing conditions shall apply: it is expressly agreed that the price offered by the Licensee for acquisition of Product by AP-HP shall be no higher than the price that is offered by the Licensee to any purchaser of Product on similar terms (for example, quantity), including discounts, if applicable. ARTICLE 15 – TERM The present Agreement shall come into force on the September 19th, 2018 It shall continue in force unless terminated earlier in accordance with the terms and conditions hereof, until the last to occur of the following three events which may be combined: 1- expiration or invalidation of the last Valid Claim in any country, 2- expiration of the Supplementary Protection Certificates granted to the Product, or 3- expiration of the “market exclusivity” period conferred by the obtainment of an AMM orpheline [« orphan Marketing Authorization »], a PUMA [« Paediatric Use Marketing Authorization »], or U.S. FDA orphan drug designation as codified in 21 C.F. R. 316. pays quelconque, 2- expiration du Certificat Complémentaire de Protection accordée au Produit, ou 3- expiration de la période « d’exclusivité commerciale » conférée par l’obtention d’une AMM d’un médicament orphelin [« Autorisation de Mise sur le Marché d’un médicament orphelin »], d’une PUMA [« Paediatric Use Marketing Authorization » – Autorisation de mise sur le marché en vue d'un usage pédiatrique], ou d’une désignation de médicament orphelin conférée par l’Agence américaine des produits alimentaires et médicamenteux (US FDA – Food and Drug Administration) telle que prévue à la partie 316 du titre 21 du Code des règlements fédéraux américain (Code of federal regulations). et pendant un délai de quinze (15) ans à compter de la Mise sur le Marché dans un quelconque pays du Territoire dans lequel il n’existe pas de Revendication Valable. Passé ce délai, la licence concédée en vertu de l’Article 2.1 du présent Contrat sera résiliée. Le présent Contrat pourra ensuite être renouvelé par voie d’avenant si les Parties en conviennent d’un commun accord par écrit. Les stipulations ci-dessous demeureront en vigueur après l’expiration ou la résiliation du présent Contrat selon les modalités suivantes : les stipulations liées au droit de propriété sur les Résultats demeureront en vigueur après la résiliation ou l’expiration du présent Contrat, l’Article 9 demeurera en vigueur pendant un délai de trois (3) ans Page 31 of 42

and for a period of fifteen (15) years after the Marketing for any countries of the Territory in which there is no Valid Claim. Thereafter, the license granted under this Article 2.1 of this Agreement will be terminated. This Agreement may then be renewed through amendment if mutually agreed by the Parties in writing. The following provisions shall survive expiration or termination of the present Agreement as follows: the provisions related to the ownership of the Results shall remain in force and survive termination or expiration of this Agreement, Article 9 shall remain in force for three (3) years in compliance with the period provided for in said article, the provisions of Articles 1, 2, 3, 11, 12, 13 and 24 shall survive termination or expiration of this Agreement. ARTICLE 16 – TERMINATION OF THE AGREEMENT 16.1 The present Agreement may be terminated by right by AP-HP in the following event: The Licensee is unable to make conformément aux délais prévus par ledit article, les stipulations des Articles 1, 2, 3, 11, 12, 13 et 24 demeureront en vigueur après la résiliation ou l’expiration du présent Contrat. ARTICLE 16 – RESILIATION DU CONTRAT 16.1 Le présent Contrat sera résilié de plein droit à l’initiative de l’AP-HP dans le cas suivant : Le Licencié n’est pas en mesure d’effectuer les paiements exigés aux termes des présentes et ne parvient pas à y remédier dans les soixante (60) jours suivant la réception de la notification écrite adressée par APHP. 16.2 Le présent Contrat sera résilié en cas d’arrêt du développement clinique par le Licencié ou de retrait de l’autorisation de mise sur le marché par les autorités sanitaires ou de régulation dans tous les pays du Territoire. 16.3 Le présent Contrat sera résilié en cas de cessation d’activité du Licencié ou de procédure de liquidation judiciaire à son encontre, sous réserves des dispositions de l’Article L. 622-13 du Code du commerce ou de dispositions législatives américaines analogues. 16.4 Le Licencié peut résilier le présent Contrat, à son entière discrétion, moyennant un préavis écrit de trente (30) jours adressé à l’AP-HP. 16.5 En cas de : (a) résiliation du présent Contrat par le Licencié, ou (b) par l’APHP pour un manquement auquel le Licencié n’a pas remédié, le Licencié s’engage à ne plus utiliser les Brevets et/ou à ce que les Brevets ne soient plus utilisés ainsi qu’à transférer Page 32 of 42

the payments required under the terms and conditions hereof and fails to cure within sixty (60) days after receipt of written notice by AP-HP. 16.2 The present Agreement shall be terminated in case of termination of clinical development by Licensee or withdrawal of marketing approval by the health or regulatory authorities in all countries within the Territory. 16.3 The present Agreement shall be terminated in case of cessation of business or procedure of winding-up by court decision against the Licensee, subject to the provisions of Article L. 622-13 of the Code du commerce [« French commercial code »] or analogous U.S. laws. 16.4 The present Agreement may be terminated by Licensee in its sole discretion upon thirty (30) days written notice to AP-HP. 16.5 In the event of: (a) termination of the present Agreement by the Licensee, or (b) termination by AP-HP for an uncured breach by the Licensee, the Licensee undertakes to no longer use the Patents and/or to no longer have the Patents used as well as to immediately hand over management of the Patents to AP-HP. Termination pursuant to this Section shall be effective three (3) months after written notification by AP-HP to Licensee of the allegations of material breach by certified mail with return receipt requested unless Licensee cures such alleged material breach within such three (3) month period. 16.6 Exercise of this termination shall not release the terminated Party from any contractual obligations until the time at which termination comes into effect. immédiatement la gestion des Brevets à l’AP-HP. Une résiliation effectuée en vertu du présent Article entrera en vigueur trois (3) mois après la notification écrite adressée par l’AP-HP au Licencié par courrier recommandé avec accusé de réception au titre d’un manquement contractuel important allégué, à moins que le Licencié n’y remédie dans un délai de trois (3) mois. 16.6 L’exercice de ce droit de résiliation par l’une des Parties ne libère pas l’autre Partie de ses obligations contractuelles avant l’entrée en vigueur de la résiliation. La résiliation ou l’expiration du présent Contrat n’entrainera pas la résiliation ou l’expiration du Contrat sur l’Accès et l’Utilisation des Données Relatives aux Essais Cliniques ou de tout contrat de sous-licence qui demeureront pleinement en vigueur et produiront tous leurs effets entre l’AP-HP et chaque sous-Licencié. 16.7 A compter de la résiliation du présent Contrat, à la demande du Licencié ou de son(ses) sous-Licencié(s) existant(s) alors, l’AP-HP devra octroyer une licence directe sur la Technologie Licenciée en faveur de ce(s) sous-Licencié(s) dans les mêmes conditions que celles applicables au Licencié dans le cadre de la Technologie Licenciée ; sous réserve que: (a) ce(s)sous-Licencié(s) ai(en)t, à tous égards importants, respecté les conditions applicables aux sous-Licenciés aux termes du présent Contrat et (b) ce(s) sous-Licencié(s) n’ai(en)t pas provoqué un manquement ayant donné lieu à une résiliation au titre d’un manquement contractuel important non corrigé par le Licencié. ARTICLE 17 – INCESSIBILITÉ DU CONTRAT 17.1 Le présent Contrat lie les Parties, leurs ayants droits et cessionnaires. Page 33 of 42

Termination or expiration of this Agreement shall not cause termination or expiration of the Agreement of Access and Use of Clinical Trial Data Agreement or any sub-license agreement which will continue in full force and effect between AP-HP and each sub-licensee. 16.7 Upon any termination of this Agreement, at the request of the Licensee or its thenexisting sub-licensee(s), AP-HP shall grant a direct license under the Licensed Technology to such sub-licensee(s) on the same terms applicable to the Licensee in connection with such Licensed Technology; provided, that: (a) such Sublicensee( s) has, in all material respects, complied with the terms applicable to sublicensees under this Agreement and (b) such sub-licensee(s) did not cause a breach that gave rise to a termination for uncured material breach by the Licensee. ARTICLE 17 – NON-ASSIGNABILITY OF THE AGREEMENT 17.1 The present Agreement shall be binding on the Parties, their successors and assignees. 17.2 Except in the case of the merger with a third party or acquisition by a third party of all or substantially all of Licensee’s assets or stock, in light of the intuitu personae [“personal”] nature of the present Agreement between AP-HP and the Licensee, the Licensee may not assign all or part of its rights and obligations under the present Agreement to a third party without prior written agreement of AP-HP. 17.3 It is already understood that any company to which the Licensee's rights and 17.2 Exception faite d’une fusion avec un tiers ou d’une acquisition par un tiers de la totalité ou de la quasi-totalité des actifs ou actions du Licencié, compte tenu de la nature intuitu personae du présent Contrat conclu entre l’AP-HP et le Licencié, le Licencié ne peut céder tout ou partie de ses droits et obligations en vertu du présent Contrat au profit d’un tiers sans l’accord écrit préalable de AP-HP. 17.3 Il est d’ores et déjà entendu que toute société au profit de laquelle les droits et obligations du Licencié peuvent être cédés, sera tenue aux mêmes obligations que le Licencié aux termes du présent Contrat. A la demande écrite de l’une des Parties, un avenant au présent Contrat conclu entre l’AP-HP et toute société au profit de laquelle les droits et obligations du Licencié peuvent être cédés pourra être signé afin de stipuler le changement d’identité du titulaire de la licence et de confirmer les obligations respectives de chaque Partie impliquée conformément au présent Contrat. ARTICLE 18 – FORCE MAJEURE Chaque Partie est dispensée d’exécuter les obligations mises à sa charge, n’est pas tenue responsable envers l’autre Partie et n’est pas tenue de lui payer de dommages et intérêts lorsque son inexécution est due à un cas de force majeure, comme cela est admis par la jurisprudence. ARTICLE 19 – INDEPENDENCE DES COCONTRACTANTS – INTÉGRALITÉ DE L'ACCORD 19.1 Le présent Contrat exprime l’intégralité des obligations des Parties quant à l’objet des présentes. Le présent Contrat ne doit en aucun cas être interprété comme créant une société de personnes ou une société de fait entre les Parties et chacune d’entre elles est considérée comme un Page 34 of 42

obligations may be assigned, will be bound by the same obligations as the Licensee under the present Agreement. At either Party’s written request, an amendment to the present Agreement between AP-HP and any company to which the Licensee's rights and obligations may be assigned may be executed to stipulate the change of identity of the license holder and confirming each involved Party's respective obligations in compliance with this Agreement. ARTICLE 18 – FORCE MAJEURE Each Party shall be excused from not performing its obligations and shall be neither held responsible nor liable to pay damages to the other Party when non-performance is due to a case of force majeure as admitted by French courts’ case-law. ARTICLE 19 – INDEPENDENT COCONTRACTORS – AGREEMENT ENTIRETY 19.1 The present Agreement expresses the entirety of the obligations of the Parties as to the subject matter hereof. The present Agreement shall in no case be construed as creating a partnership or société de fait [“de facto company”] between the Parties and each one of them shall be considered as an independent co-contractor. 19.2 The present Agreement shall only be amended by amendment signed by the representatives of the contracting Parties, duly authorized for this purpose. ARTICLE 20 – VOIDNESS – INVALIDITY OF A CLAUSE 20.1 The annulment in full or in part of the titles of industrial property relating to the Patents and to the Improvements shall have no cocontractant indépendant. 19.2 Le présent Contrat ne peut être modifié que par voie d’avenant signé par les représentants des Parties contractantes, dûment habilité à cet effet. ARTICLE 20 – NULLITÉ – NULLITÉ D'UNE CLAUSE 20.1 La nullité totale ou partielle des titres de propriété industrielle relatifs aux Brevets et aux Améliorations n’a aucun effet, et ce quel qu’il soit, sur les clauses du présent Contrat. 20.2 Si une ou plusieurs stipulations du présent Contrat est(sont) jugée(s) nulle(s) ou déclarée(s) comme telle(s) aux termes d’une quelconque loi ou règle– et notamment en vertu du droit de l’Union européenne – ou si une quelconque juridiction compétente rend une décision définitive en ce sens, les Parties devront immédiatement modifier lesdites stipulations comme cela est exigé, en accord, dans la mesure du possible, avec l’accord de volonté [des Parties] existant au moment de la conclusion du présent Contrat. Les autres stipulations du présent Contrat demeureront pleinement en vigueur. ARTICLE 21 – NOTIFICATIONS Toute communication ou notification à l’attention des Parties est envoyée par voie de courrier électronique, puis confirmée par courrier recommandé avec accusé de réception aux adresses indiquées ci-dessous, tant que la Partie n’a pas été avisée par écrit d’un changement d’adresse : Pour l’AP-HP : Office de Transfert de Technologie et de Partenariats Industriels Délégation Régionale à la Recherche Clinique Hôpital Saint-Louis – Bâtiment Lugol - Page 35 of 42

effect whatsoever on the clauses of the present Agreement. 20.2 If one or several provisions of the present Agreement are held to be invalid or declared as such under any law or rule – and particularly under the law of the European Union - or if any competent jurisdiction so determines in a final decision, the Parties shall amend said provisions as required forthwith in line, whenever possible, with the existing meeting of minds at the time of signature of the present Agreement. The other provisions of the present Agreement shall continue in force to their full extent. ARTICLE 21 – NOTICES Any communication or notice for the attention of the Parties shall be given by e-mail and then confirmed by certified mail with return receipt requested at the addresses set out below, as long as the Party has not been notified in writing of a change of address: For AP-HP : Office de Transfert de Technologie et de Partenariats Industriels Délégation Régionale à la Recherche Clinique Hôpital Saint-Louis – Bâtiment Lugol - Porte 22 1, avenue Claude Vellefaux 75475 Paris Cedex 10 For THE LICENSEE: ACER THERAPEUTICS INC. One Gateway Center, Suite 351 (300 Washington Street) Newton, MA 02458. USA Attention: CEO Porte 22 1, avenue Claude Vellefaux 75475 Paris Cedex 10 Pour LE LICENCIÉ : ACER THERAPEUTICS INC. One Gateway Center, Suite 351 (300 Washington Street) Newton, MA 02458. Etats-Unis A l’attention du : Président Directeur Général (CEO) ARTICLE 22 – RENONCIATION - FORMALITES 22.1 Si, en cas de violation par l’une ou l’autre des Parties des obligations mises à sa charge aux termes du présent Contrat, la Partie non-défaillante n’exerce pas ses droits nés de ladite violation, le défaut d’exercice de ces droits ne pourra pas être interprété comme constituant une renonciation à leur exercice ultérieur ou à leur exercice pour une autre violation similaire commise par la Partie défaillante des obligations mises à sa charge aux termes du présent Contrat. 22.2 L’AP-HP s’engage à signer tous les documents, pouvoirs et autres documents nécessaires à la transmission des droits accordés au Licencié en vertu du présent Contrat, y compris tous les droits relatifs à des brevets. ARTICLE 23 – MENTION DE L’AP-HP – UTILISATION DU LOGO DE L’AP-HP 23.1 Le Licencié s’interdit d’utiliser, que ce soit à l’écrit ou à l’oral, le nom, les marques ou autres signes distinctifs de l’AP-HP ou de l’un quelconque de ses salariés ou préposés (y compris sous forme contractée ou abrégée), ou copiant [ceux de] l’AP-HP ou de l’un quelconque de ses salariés ou préposés, pour l’exploitation et la distribution des Produits, notamment à des fins Page 36 of 42

ARTICLE 22 – WAIVER OF RIGHTS – REGISTRATION 22.1 If, in the event of violation by one or other of the Parties of its obligations under the present Agreement, the Party not in breach does not exercise its rights resulting from said violation, non-exercising its rights shall not be construed as a waiver of exercising said rights in the future or in the event of further similar violation by the breaching Party of its obligations under the present Agreement. 22.2 AP-HP undertakes to sign all documents, powers and other documents required to convey the rights granted to Licensee under this Agreement, including all patent rights. ARTICLE 23 – REFERENCE TO AP-HP – USE OF AP-HP'S LOGO 23.1 The Licensee shall undertake not to use in writing or orally the name, trademarks or other distinctive sign, including those in a contracted or abbreviated format or which imitate AP-HP or any of its staff or officers for exploitation and distribution of the Products, in particular for promotional purposes, and regardless of the medium used (video, poster, press file, promotional brochure, etc.) without the prior written consent of AP-HP. It is understood that, if AP-HP gives its written consent to the use of its name or logo, it may suspend at any time this authorization. In any event, and even if AP-HP has given its authorization to the use planned by the Licensee, the distinctive signs, trade publicitaires, et ce indépendamment du support utilisé (vidéo, poster, dossier de presse, brochure publicitaire, etc.) sans l’accord écrit préalable de l’AP-HP. Il est entendu que, si l’AP-HP donne son autorisation écrite pour l’utilisation de son nom ou de son logo, elle pourra suspendre à tout moment cette autorisation. En tout état de cause, et même si l’AP-HP a donné son autorisation pour l’utilisation prévue par le Licencié, les signes distinctifs, noms commerciaux, noms de sociétés immatriculées, marques, images, logos, ou signes figuratifs appartenant à l’AP-HP ne pourront être utilisés par le Licencié d’une manière qui, en raison de la forme et/ou du contexte de l’utilisation, pourrait être interprétée comme une garantie accordée par l’AP-HP sur les Produits, produits combinés, services combinés et services, ou sur un quelconque produit ou service du Licencié. 23.2 Le Licencié devra veiller à ce que ses sous-Licenciés et distributeurs potentiels soient tenus aux mêmes obligations. Les stipulations du présent Article 23 demeureront en vigueur, nonobstant l’expiration ou la résiliation du présent Contrat. ARTICLE 24 – DROIT APPLICABLE – LITIGES Le présent Contrat a été rédigé et négocié en anglais et traduit en français. Il est régi par le droit français. La version française du présent Contrat est réputée faire foi. Toutefois, les Parties reconnaissent que pendant toute la durée des pourparlers, la version anglaise a servi de base aux négociations orales et écrites, avant que la traduction en français ne soit finalement réalisée. En cas de difficultés relatives à l’interprétation ou Page 37 of 42

names, registered company names, marks, images, logos or figurative signs belonging to AP-HP shall not be used by the Licensee in a way which, because of the form and/or the context used, may be interpreted as some warranty granted by the AP-HP towards the Products, combined products, combined services and services, or towards any product or service whatsoever of the Licensee. 23.2 The Licensee shall ensure that its potential sub-licensees and distributors shall owe the same obligations. The provisions of the present Article 23 will remain in force notwithstanding the expiration or termination of the present Agreement. ARTICLE 24 – LAW GOVERNING THE AGREEMENT – DISPUTES This Agreement has been written and negotiated in English and translated to French, and is subject to French law. The French version of the present Agreement shall be considered by the Parties as the official one. However, the Parties acknowledge that during the entire negotiation period, the English version served as the basis of oral as well as written negotiations, before the French translation was finally made. If difficulties arise regarding the interpretation or performance of this Agreement, the Parties undertake to resolve them amicably to the extent possible. The emergence of a dispute shall be embodied by notice given by one Party to the other Party by global courier, setting out the reasons for the dispute. If not fully resolved, the dispute shall be settled by the courts of Paris. In Paris, on the , in two (2) à l’exécution du présent Contrat, les Parties s’engagent à les résoudre à l’amiable, dans la mesure du possible. La naissance d’un litige donnera lieu à l’envoi d’une Partie à l’autre, via un service de messagerie international, d’une notification exposant les raisons du litige. S’il n’est pas entièrement résolu, le litige sera tranché par les tribunaux de Paris. Paris, le , en deux (2) exemplaires de signature originaux. Liste des annexes au Contrat devant être considérées comme faisant partie intégrante de celui-ci : • Annexe 1 : Calendrier et description [du Plan de Développement • Annexe 2 : Liste des inventeurs pour chaque Brevet • Annexe 3 : Tableau des Paiements Page 38 of 42

original counterparts. List of the appendices to the Agreement to be considered as an integral part thereof: • Appendix 1: Schedule for and description of the Development Plan • Appendix 2: List of inventors by Patent • Appendix 3 : Payment Table On behalf of AP-HP The Chief Executive Officer of AP-HP and, by Delegation, the Director of the DRCI /s/ Florence Favrel-Feuillade Florence FAVREL-FEUILLADE On behalf of ACER, the Licensee CEO of Acer Therapeutics Inc. /s/ Chris Schelling Christopher SCHELLING Acer legal review: /s/ Donald Joseph 9/19/2018 Pour le compte de l’AP-HP Le Directeur Général de l’AP-HP et, par Délégation, le Directeur de la DRCI /s/ Florence Favrel-Feuillade Florence FAVREL-FEUILLADE Pour le compte d’ACER, le Licencié Directeur Général Acer Therapeutics Inc. /s/ Chris Schelling Christopher SCHELLING Page 39 of 42

Appendix 1 / Annexe 1 Schedule for and description of the Development Plan (Confidential) / Calendrier et description du Plan de Développement (Confidentiel) Page 40 of 42 edsivo tm (celiprolol) r&d plan for veds q2’16 q3’16 q4’16 q1’17 q2’17 q3’17 q4’17 q1’18 q2’18 q3’18 q4’18 ap-hp license acer database development / data collection top-line data type c meeting with fda manufacture and initiation of stability studies non-clinical studies to support nda pre-nda meeting finalize csr and decision to file nda preparation nda filing estimated fda approval programme r&d d’edviso tm (celiprolol) pour veds t2 t3 t4 t1 t2 t3 t4 t1 t2 t3 t4 2019 2019 2016 2016 2016 2017 2018 licence ap-hp developpement de la base de donnees acer/collecte de donnees donnees a top-line reunion de type c avec la fda preparation et lancement d’etudes de stabilite etudes non-cliniques etayant la nda reunion prealable nda finalization rec (rapport d’etude Clinique) & decision de proceder au depot preparation nda depot nda approbation estimee de la fda

Appendix 2 / Annexe 2 List of inventors by Patent / Liste des inventeurs pour chaque Brevet Patent number / Numéro Patent / Brevet Inventors / Inventeurs Inventors affiliation / Affiliation des Inventeurs No° EP17306889.1 USE OF CELIPROLOL FOR TREATING VASCULAR EHLERSDANLOS SYNDROME IN WOMEN DURING PREGNANCY AND PERIPARTUM PERIOD / UTILISATION DU CELIPROLOL POUR LE TRAITEMENT DU SYNDROME D’EHLERS-DANLOS VASCULAIRE CHEZ LA FEMME PENDANT LA GROSSESSE ET LA PÉRIODE POSTNATALE Dr. Michael Frank AP-HP Prof. Xavier Jeunemaitre AP-HP, Université Paris Descartes Prof. Alexandra Benachi AP-HP Université Paris 11 No.° EP17306890.9 METHOD OF PROVIDING CELIPROLOL THERAPY TO A PATIENT / METHODE D’ADMINISTRATION D’UN TRAITEMENT AU CELIPROPOL A UN PATIENT Dr.Michael Frank AP-HP No.° EP17306888.3 USE OF CELIPROLOL FOR TREATING KYPHOSCOLIOTIC EHLERS DANLOS SYNDROME / UTILISATION DU CELIPROLOL POUR LE TRAITEMENT DU SYNDROME D’EHLERS-DANLOS DE TYPE CYPHOSCOLIOTIQUE Dr.Michael Frank AP-HP Page 41 of 42

[ *** ] = Confidential material redacted and filed separately with the Commission. Page 42 of 42 Appendix 3 / Annexe 3 Table of payments / Tableau des paiements ACER Payments to AP-HP Paiements ACER à AP-HP Year 1 Année 1 Year 2 Année 2 Year 3 Année 3 Year 4 Année 4 Year 5 Année 5 Year 6 Année 6 Year 7 Année 7 Year 8 and + Année 8 et + Independently of Valid Claims on the Territory / Indépendamment des Revendication Valables sur le Territoire (i) Minimum Royalties / (i) Redevances Minimales [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] If there is no Valid Claim, the greater of: (i) or (ii) / En l’absence de Revendication Valable, le montant le plus élevé entre : (i) et (ii) (ii) Percentage of Net Sales / (ii) Pourcentage des Ventes Nettes [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] If there is a Valid Claim, the greater of: (i) or (iii) / En cas de Revendication Valable, le montant le plus élevé entre : (i) et (iii) (iii) Percentage of Net Sales / (iii) Pourcentage des Ventes Nettes [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ] [ *** ]

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Chris Schelling, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Acer Therapeutics Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2018	By:	/s/ Chris Schelling
		Chris Schelling         President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT

I, Harry Palmin, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Acer Therapeutics Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2018	By:	/s/ Harry Palmin
		Harry Palmin         Chief Operating Officer and Chief Financial Officer (Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Acer Therapeutics Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2018 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Chris Schelling, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2018	By:	/s/ Chris Schelling
		Chris Schelling  President and Chief Executive Officer (Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Acer Therapeutics Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2018 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Harry Palmin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, to the best of my knowledge, that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 9, 2018	By:	/s/ Harry Palmin
		Harry Palmin Chief Operating Officer and Chief Financial Officer (Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Oct. 31, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	Acer Therapeutics Inc.
Entity Central Index Key	0001069308
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Trading Symbol	ACER
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		10,052,988
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018

XML

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 46,185,410	$ 15,644,355
Prepaid expenses	1,144,094	881,887
Total current assets	47,329,504	16,526,242
Property and equipment, net	131,288	62,984
Other assets:
Goodwill	7,647,267	7,647,267
In-process research and development	118,600	118,600
Other non-current assets	34,028	13,648
Total assets	55,260,687	24,368,741
Current liabilities:
Accounts payable	595,438	95,873
Accrued expenses	1,559,519	1,937,331
Total liabilities	2,154,957	2,033,204
Commitments (Note 5)
Stockholders’ equity:
Preferred stock, $0.0001 par value at September 30, 2018 and no par value at December 31, 2017; authorized 10,000,000 shares; none issued and outstanding	0	0
Common stock, $0.0001 par value at September 30, 2018 and $0.01 par value at December 31, 2017; authorized 150,000,000 shares; 10,052,988 and 7,497,433 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	1,005	74,974
Additional paid-in capital	91,440,982	47,812,215
Accumulated deficit	(38,336,257)	(25,551,652)
Total stockholders’ equity	53,105,730	22,335,537
Total liabilities and stockholders’ equity	$ 55,260,687	$ 24,368,741

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Preferred stock, no par value	$ 0.0001	$ 0
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.01
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	10,052,988	7,497,433
Common stock, shares outstanding	10,052,988	7,497,433

XML

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Operating expenses:
Research and development	$ 2,377,916	$ 2,057,421	$ 7,140,046	$ 6,948,816
General and administrative	1,729,446	1,302,401	5,874,423	2,792,424
Total operating expenses	4,107,362	3,359,822	13,014,469	9,741,240
Loss from operations	(4,107,362)	(3,359,822)	(13,014,469)	(9,741,240)
Other income (expense):
Interest income	138,671	2,993	205,916	4,819
Interest expense	0	(120,229)	0	(242,982)
Loss on disposal of asset	0	(967)	0	(967)
Foreign currency transaction gain	3,180	0	23,948	0
Total other income (expense), net	141,851	(118,203)	229,864	(239,130)
Net loss	$ (3,965,511)	$ (3,478,025)	$ (12,784,605)	$ (9,980,370)
Net loss per share - basic and diluted	$ (0.43)	$ (1.09)	$ (1.59)	$ (3.69)
Weighted average common shares outstanding - basic and diluted	9,136,321	3,199,796	8,049,732	2,702,678

XML

Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net loss	$ (12,784,605)	$ (9,980,370)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense		242,982
Share-based compensation	931,517	136,617
Depreciation	16,624	2,711
Loss on disposal of property and equipment		967
Write-off of deferred financing costs		1,901
Changes in operating assets and liabilities
Prepaid expenses	(262,207)	(291,703)
Accounts payable	499,566	156,029
Accrued expenses	(377,813)	(157,890)
Other non-current assets	(20,380)
Net cash used in operating activities	(11,997,298)	(9,888,756)
Cash flows from investing activities:
Cash acquired in Merger, net of payment in lieu of fractional shares		1,030,123
Purchase of property and equipment	(84,928)	(2,523)
Net cash (used in) provided by investing activities	(84,928)	1,027,600
Cash flows from financing activities:
Proceeds from the issuance of common stock, net of issuance costs	42,623,281	10,000,000
Deferred financing costs		(68,530)
Proceeds from convertible notes payable		5,500,000
Net cash provided by financing activities	42,623,281	15,431,470
Net increase in cash and cash equivalents	30,541,055	6,570,314
Cash and cash equivalents, beginning of period	15,644,355	1,834,018
Cash and cash equivalents, end of period	$ 46,185,410	8,404,332
Supplemental non-cash financing transactions:
Accretion of issuance costs on Series A Convertible Redeemable Preferred stock		51,943
Accretion of issuance costs on Series B Convertible Redeemable Preferred stock		127,780
Conversion of Series A Convertible Redeemable Preferred stock to common stock		4,166,164
Conversion of Series B Convertible Redeemable Preferred stock to common stock		8,149,995
Conversion of convertible notes payable and accrued interest to common stock		5,674,452
Issuance of common stock in Merger (Note 1)		$ 6,978,916

XML

Nature of Operations and Basis of Presentation

9 Months Ended

Sep. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Nature of Operations and Basis of Presentation

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Business

Acer Therapeutics Inc., a Delaware corporation (the “Company”), formerly known as Opexa Therapeutics, Inc. (the “Registrant”), is a pharmaceutical company focused on the acquisition, development, and commercialization of therapies for patients with serious rare and ultra-rare diseases with critical unmet medical need. The Company’s late-stage clinical pipeline includes two candidates for severe genetic disorders: EDSIVO™ (celiprolol) for vascular Ehlers-Danlos syndrome (“vEDS”), and ACER-001 (a fully taste-masked, immediate release formulation of sodium phenylbutyrate) for urea cycle disorders (“UCD”) and Maple Syrup Urine Disease (“MSUD”). There are no FDA-approved drugs for vEDS and MSUD and limited options for UCD, which collectively impact approximately 7,000 patients in the United States. The Company’s products have clinical proof-of-concept and mechanistic differentiation, and it intends to seek approval for them in the U.S. by using the regulatory pathway established under section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act, or FFDCA, that allows an applicant to rely at least in part on third-party data for approval, which may expedite the preparation, submission, and approval of a marketing application.

Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company has not generated any product revenue to date and may never generate any product revenue in the future.

Merger and Reverse Stock Split

On September 19, 2017, the Registrant completed its business combination with Acer Therapeutics Inc., a Delaware corporation (“Private Acer”), in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of June 30, 2017, by and among the Registrant, Opexa Merger Sub, Inc. (“Merger Sub”) and Private Acer (the “Merger Agreement”), pursuant to which Merger Sub merged with and into Private Acer, with Private Acer surviving as a wholly-owned subsidiary of the Registrant (the “Merger”). This transaction was approved by the Registrant’s stockholders at a special meeting of its stockholders on September 19, 2017. Also on September 19, 2017, in connection with, and prior to the completion of, the Merger, the Registrant effected a 1-for-10.355527 reverse stock split of its then outstanding common stock (the “Reverse Split”) and immediately following the Merger, the Registrant changed its name to “Acer Therapeutics Inc.” pursuant to amendments to its certificate of formation filed with the Texas Secretary of State on September 19, 2017. All share numbers have been adjusted to reflect the Reverse Split.

Following the completion of the Merger, the business conducted by the Registrant became primarily the business conducted by Private Acer, which is a pharmaceutical company that acquires, develops and intends to commercialize therapies for patients with serious rare and ultra-rare diseases with critical unmet medical need.

Delaware Reincorporation and Subsidiary Merger

On May 15, 2018, the Company changed its state of incorporation from the State of Texas to the State of Delaware (the “Reincorporation”) pursuant to a plan of conversion, dated May 15, 2018.  The Company filed the following instruments on May 15, 2018 to effect the Reincorporation:  (i) a certificate of conversion with the Texas Secretary of State; (ii) a certificate of conversion with the Delaware Secretary of State; and (iii) a certificate of incorporation with the Delaware Secretary of State.  Pursuant to the plan of conversion, the Company also adopted new bylaws, which became effective with the Reincorporation.  The Reincorporation was approved by the Company’s stockholders at its annual meeting on May 14, 2018.  Immediately following the Reincorporation, the Company eliminated its holding company structure by merging its wholly-owned subsidiary Private Acer with and into the Company (the “Subsidiary Merger”).  The Company was the surviving corporation in connection with the Subsidiary Merger.  As the Delaware certificate of incorporation used the placeholder name of “Acer Reincorporation, Inc.” due to “Acer Therapeutics Inc.” already being in existence in Delaware as Private Acer, in connection with the Subsidiary Merger the Company changed its name to “Acer Therapeutics Inc.” pursuant to a certificate of ownership and merger filed with the Delaware Secretary of State on May 15, 2018. As a result of the reincorporation, the par value of the Company’s common stock was reduced to $0.0001 from $0.01.

Basis of Presentation

Accounting principles generally accepted in the United States (GAAP) require that a company whose security holders retain the majority voting interest in the combined business be treated as the acquirer for financial reporting purposes. Accordingly, the Merger was accounted for as a reverse acquisition whereby Private Acer was treated as the acquirer for accounting and financial reporting purposes. Private Acer was incorporated on December 26, 2013, as part of a reorganization whereby Acer Therapeutics, LLC was converted into a corporation organized under the laws of the State of Delaware.

The accompanying condensed consolidated financial statements are of (i) Private Acer up to September 18, 2017, (ii) the Registrant and its wholly-owned subsidiary Private Acer for the period beginning on September 19, 2017, and (iii) the Registrant for the period beginning on May 15, 2018.

All intercompany balances and transactions have been eliminated in consolidation. These condensed consolidated financial statements have been prepared in conformity with GAAP. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (ASC) and Accounting Standards Update (ASU) of the Financial Accounting Standards Board (FASB). The accompanying condensed consolidated financial statements for the three and nine months ended September 30, 2018, have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X. The unaudited condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s financial position as of September 30, 2018, the results of operations for the three and nine months ended September 30, 2018 and 2017, and the cash flows for the nine months ended September 30, 2018 and 2017. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018 or for any other future annual or interim period. The condensed consolidated balance sheet as of December 31, 2017 included herein was derived from the audited consolidated financial statements as of that date. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements included in its 2017 Annual Report on Form 10-K.

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Significant Accounting Polices

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Significant Accounting Polices

2. SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described in Note 2, “Significant Accounting Policies,” in its 2017 Annual Report on Form 10-K.

Share-Based Compensation

The Company records share-based payments at fair value. The measurement date for compensation expense related to employee awards is generally the date of the grant. The measurement date for compensation expense related to nonemployee awards is generally the date that the performance of the awards is completed and, until such time, the fair value of the awards is remeasured at the end of each reporting period. Accordingly, the ultimate expense is not fixed until such awards are vested. The fair value of awards, net of expected forfeitures, is recognized as an expense in the statement of operations over the requisite service period, which is generally the vesting period. The fair value of options is calculated using the Black-Scholes option pricing model. This option valuation model requires the use of assumptions including, among others, the volatility of stock price, the expected term of the option, and the risk-free interest rate.

The following assumptions were used to estimate the fair value of stock options granted during the nine-month period ending September 30, 2018 and 2017 using the Black-Scholes option pricing model:

	2018	2017
Risk-free interest rate	2.35% - 2.98%	1.83%
Expected life (years)	6.25	5.75
Volatility	60%	60%
Dividend rate	0%	0%

Use of Estimates

The Company’s accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the condensed financial statements and reported amounts of revenues and expenses during the reporting period. Estimates having relatively higher significance include the accounting for acquisitions, stock-based compensation, and income taxes. Actual results could differ from those estimates and changes in estimates may occur.

Basic and Diluted Net Loss per Common Share

Basic and diluted net loss per common share is computed by dividing net loss in each period by the weighted average number of shares of common stock outstanding during such period. For the periods presented, common stock equivalents, consisting of options, convertible redeemable preferred stock and warrants, were not included in the calculation of the diluted loss per share because to do so would be anti-dilutive.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes new accounting and disclosure requirements for leases. FASB ASU No. 2016-02 requires lessees to classify most leases as either finance or operating leases and to initially recognize a lease liability and right-of-use asset. Entities may elect to account for certain short-term leases (with a term of one year or less) using a method similar to the current operating lease model. The statements of operations will include, for finance leases, separate recognition of interest on the lease liability and amortization of the right-of-use asset and for operating leases, a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. While the Company is in the early stages of its implementation process for FASB ASU No. 2016-02 and has not yet determined its impact on its consolidated financial position or results of operations, these leases would potentially be required to be presented on the balance sheet in accordance with the requirements of FASB ASU No. 2016-02, which is effective for annual reporting periods beginning after December 15, 2018, including interim periods therein, with early adoption permitted. FASB ASU No. 2016-02 must be applied using a modified retrospective approach, which requires the recognition and measurement of leases at the beginning of the earliest period presented, with certain practical expedients available.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350).  This ASU eliminates step 2 from the goodwill impairment test by comparing the fair value of a reporting unit with the carrying amount of the reporting unit.  If the carrying amount exceeds the fair value, an impairment charge for the excess is recorded. The amendments of this ASU are effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.  The Company is currently evaluating the impact of the adoption of this ASU on the consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting. The purpose of this amendment is to address aspects of the accounting for nonemployee share-based payment transactions. The amendments in this ASU are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company does not believe that this guidance will have a material impact on its consolidated results of operations, financial position or disclosures.

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Property and Equipment

9 Months Ended

Sep. 30, 2018

Property Plant And Equipment [Abstract]

Property and Equipment

3. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
Computer hardware and software	$	46,564		$	16,555
Leasehold improvements		7,648			7,968
Furniture and fixtures		97,742			42,503
Subtotal property and equipment, gross		151,954			67,026
Less accumulated depreciation		(20,666	)		(4,042	)
Property and equipment, net	$	131,288		$	62,984

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Accrued Expenses

9 Months Ended

Sep. 30, 2018

Accounts Payable And Accrued Liabilities Current [Abstract]

Accrued Expenses

4. ACCRUED EXPENSES

Accrued expenses consisted of the following at September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Accrued license fees	$	791,820	$	817,578
Accrued pre-commercial costs		—		341,159
Accrued consulting		205,290		102,156
Accrued contract research		137,318		99,140
Accrued miscellaneous expenses		51,394		73,348
Accrued contract manufacturing		91,363		218,108
Accrued audit and tax		142,715		111,250
Accrued legal		139,619		174,592
	$	1,559,519	$	1,937,331

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Commitments

9 Months Ended

Sep. 30, 2018

Commitments And Contingencies [Abstract]

Commitments

5. COMMITMENTS

Litigation

From time to time, the Company may become involved in litigation or proceedings relating to claims arising from the ordinary course of business.

On September 27, 2017, Piper Jaffray & Co. (“Piper”) filed a lawsuit against Private Acer, Piper Jaffray & Co. v. Acer Therapeutics Inc., Index No. 656055/2017, in the Supreme Court of the State of New York, County of New York. The complaint alleges that Private Acer breached its obligations to Piper pursuant to an August 30, 2016 engagement letter between the parties and an April 28, 2017 addendum thereto by failing to pay Piper (i) a fee of $1,097,207 in connection with the financing which closed on September 19, 2017 for aggregate consideration of approximately $15.7 million and (ii) $67,496 in reimbursement for expenses incurred by Piper pursuant to the engagement letter.  On November 10, 2017, Private Acer filed an answer and counterclaim in the lawsuit, denying Piper breach of contract allegation, asserting several defenses, and bringing several counterclaims, including claims for breach of contract and breach of the duty of good faith and fair dealing.  Piper filed a reply to the counterclaims denying the essential allegations, and discovery has commenced. The Company has not recorded a liability as of September 30, 2018, because a potential loss is not probable or reasonably estimable given the preliminary nature of the proceedings.

Newton Lease

The Company entered into a Lease Agreement effective March 6, 2018 (the “Newton Lease”) with Commonwealth Development LLC, as trustee of the Gateway Realty Trust (the “Newton Landlord”). Pursuant to the Newton Lease, the Company has leased certain premises consisting of 2,760 square feet of office space located at One Gateway Center, Suite 351, 300 Washington Street, Newton, Massachusetts (the “Newton Premises”) to serve as its corporate headquarters. The term of the Newton Lease commences on October 1, 2018 and expires on September 30, 2021.

The Newton Lease provides for base rent as follows:

Month of Term Under Newton Lease	Monthly Base Rent
1 to 12	$ 8,480
13 to 24	$ 8,710
25 to 36	$ 8,940

The Company’s remaining commitment for rent under the Newton Lease is $313,560. In addition, the Company is required to share in certain taxes and operating expenses of the Newton Premises.

Bend Lease

The Company entered into a Triple Net Lease (the “Bend Lease”) effective April 1, 2018 with Eastern Western Corp. (the “Bend Landlord”). Pursuant to the Bend Lease, the Company has leased certain premises consisting of 2,288 square feet of office space located at 1000 NW Wall Street, Suite 220, Bend, Oregon (the “Bend Premises”) to serve as a satellite facility. The term of the Bend Lease commenced on April 1, 2018 and expires on March 31, 2021 (the “Bend Term”). The Company has an option to extend the Bend Term for up to two additional periods of three years and a right of first refusal to lease an additional suite in the same building.

The Bend Lease provides for base rent as follows:

Month of Term Under Bend Lease	Monthly Base Rent
1 to 12	$ 4,004
13 to 24	$ 4,124
25 to 36	$ 4,248

The Company’s remaining commitment at September 30, 2018 for rent under the Bend Lease is $124,488. In addition, the Company is required to share in certain taxes and operating expenses of the Bend Premises.

License Agreement

On August 3, 2016, Private Acer entered into an agreement with Assistance Publique—Hôpitaux de Paris, Hôpital Européen Georges Pompidou (“AP-HP”) whereby the Company acquired the exclusive worldwide rights to access and use pivotal clinical trial data from a multicenter, prospective, randomized, open trial related to the use of celiprolol for the treatment of vEDS patients. The Company is using this data to support its submission of a new drug application (“NDA”) for EDSIVOTM for the treatment of vEDS. The agreement requires the Company to make certain upfront payments to AP-HP, reimburse certain of AP-HP’s costs, make payments upon achievement of defined milestones and pay low single digit percent royalties on net sales of celiprolol over the royalty term.

On September 19, 2018, the Company entered into a License Agreement for Development and Exploitation with AP-HP to acquire the exclusive worldwide intellectual property rights to three European patent applications relating to certain uses of celiprolol including (i) the optimal dose of celiprolol in treating vEDS patients, (ii) the use of celiprolol during pregnancy and (iii) the use of celiprolol to treat kyphoscoliotic Ehlers-Danlos syndrome (type VI).  Pursuant to the agreement, the Company will reimburse AP-HP for certain costs and will pay annual maintenance fee payments.  Subject to a minimum royalty amount, the Company will also pay royalty payments on annual net sales of celiprolol during the royalty term in the low single digit percent range, depending upon whether there is a valid claim of a licensed patent. Under the agreement, the Company will control and pay the costs of ongoing patent prosecution and maintenance for the licensed applications. The term of the agreement expires on a country-by-country basis upon the later of (a) 15 years after the first commercial sale of celiprolol in any country in which there is no valid claim of a licensed patent, and (b) upon the last to occur of (i) expiration or invalidation of the last valid claim in any country, (ii) expiration of the supplementary protection certificates granted to celiprolol and (iii) expiration of the market exclusivity period conferred by obtaining an AMM orpheline (orphan Marketing Authorization), a PUMA (Paediatric Use Marketing Authorization) or U.S. FDA orphan drug designation. The Company may terminate the agreement in its sole discretion upon written notice to AP-HP, and AP-HP may terminate the agreement in the event the Company fails to make the required payments after notice and opportunity to cure.  Additionally, the agreement will terminate if the Company terminates clinical development, marketing approval is withdrawn by the health or regulatory authorities in all countries, the Company ceases to do business or there is a procedure of winding-up by court decision against the Company. The Company subsequently filed three U.S. patent applications on this subject matter in October 2018.

On April 4, 2014, Private Acer obtained exclusive rights to patents and certain other intellectual property relating to ACER-001 and preclinical and clinical data, through an exclusive license agreement with Baylor College of Medicine (“BCM”). Under the terms of the agreement, as amended, the Company has worldwide exclusive rights to develop, manufacture, use, sell and import products incorporating the licensed intellectual property. The license agreement requires the Company to make upfront and annual payments to BCM, reimburse certain of BCM’s legal costs, make payments upon achievement of defined milestones, and pay royalties on net sales of any developed product over the royalty term.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders' Equity

6. STOCKHOLDERS’ EQUITY

Underwritten Public Offering

On August 3, 2018, the Company completed an underwritten public offering of 2,555,555 shares of common stock, including 333,333 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares to cover over-allotments, at a public offering price of $18.00 per share. The Company received aggregate net proceeds of approximately $42.7 million, after deducting underwriting discounts, commissions and offering-related expenses of approximately $3.3 million.

2018 Stock Incentive Plan

The Company’s 2018 Stock Incentive Plan (the “2018 Plan”), adopted on May 14, 2018, provides for the grant of up to 500,000 shares of common stock as stock options, restricted stock, stock appreciation rights, restricted stock units, performance-based awards and cash-based awards that may be settled in cash, stock or other property to employees, executive officers, directors, and consultants.  

In addition to the 500,000 shares, the total number of shares reserved for issuance under the 2018 Plan also consists of the sum of the number of shares subject to outstanding awards under the Company’s 2010 Stock Incentive Plan, as amended and restated (the “2010 Plan”), and the 2013 Stock Incentive Plan, as amended (the “2013 Plan”), as of the effective date of the 2018 Plan that are subsequently forfeited or terminated for any reason prior to being exercised or settled, plus the number of shares subject to vesting restrictions under the 2010 Plan and the 2013 Plan on the effective date of the 2018 Plan that are subsequently forfeited, plus the number of shares reserved but not issued or subject to outstanding grants under the 2010 Plan and the 2013 Plan as of the effective date of the 2018 Plan, up to a maximum of 635,170 shares in aggregate. In addition, the number of shares that have been authorized for issuance under the 2018 Plan is automatically increased on the first day of each fiscal year beginning on January 1, 2019, and ending on (and including) January 1, 2028, in an amount equal to the lesser of (i) 4% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, or (ii) another amount (including zero) determined by the Company’s Board. Any shares subject to awards granted under the 2018 Plan that are forfeited or terminated before being exercised or settled, or are not delivered to the participant because such award is settled in cash, will again become available for issuance under the 2018 Plan. Shares withheld to satisfy the grant, exercise price or tax withholding obligation related to an award will again become available for issuance under the 2018 Plan.  

The 2018 Plan is administered by the Company’s Board, which may in turn delegate authority to administer the plan to a committee such as the Compensation Committee, referred to herein as the 2018 Plan administrator. Subject to the terms of the 2018 Plan, the 2018 Plan administrator will determine recipients, the number of shares or amount of cash subject to awards to be granted, whether an option is to be an incentive stock options or non-incentive stock options and the terms and conditions of the stock awards, including the period of their exercisability and vesting. Subject to the limitations set forth below, the 2018 Plan administrator will also determine the exercise price of options granted under the 2018 Plan. The 2018 Plan expressly provides that, without the approval of the stockholders, the 2018 Plan administrator does not have the authority to reduce the exercise price of any outstanding stock options or stock appreciation rights under the 2018 Plan (except in connection with certain corporate transactions, such as stock splits, certain dividends, recapitalizations, reorganizations, mergers, spin-offs and the like), or cancel any outstanding underwater stock options or stock appreciation rights in exchange for cash or new stock awards under the 2018 Plan.

Option awards are generally granted with an exercise price equal to the fair value of the common stock at the date of grant and have contractual terms of 10 years. Stock options granted to executive officers and employees generally vest over a four-year period, with 25% vesting on the one-year anniversary of the grant date and the remaining 75% vesting quarterly over the remaining three years, assuming continued service, and with vesting acceleration in full immediately prior to a change in control.  At September 30, 2018, 372,072 shares of common stock remained available for the grant of future awards under the 2018 Plan.

2013 Stock Incentive Plan

Private Acer’s 2013 Plan, as amended, which was assumed by the Company in connection with the Merger, provides for the issuance of up to 165,000 shares of common stock as incentive or non-qualified stock options and/or restricted common stock to employees, officers, directors, consultants and advisers. Option awards are generally granted with an exercise price equal to the fair value of the common stock at the date of grant and have contractual terms of 10 years. At September 30, 2018, all shares available under the 2013 Plan were subject to outstanding equity awards, and the Company does not intend to make any new awards under the 2013 Plan.

2010 Stock Incentive Plan

The Company’s 2010 Plan provides for the grant of up to 470,170 shares of common stock as incentive or non-qualified stock options, stock appreciation rights, restricted stock units and/or restricted common stock to employees, officers, directors, consultants and advisers. Option awards are generally granted with an exercise price equal to the fair value of the common stock at the date of grant and have contractual terms of 10 years. At September 30, 2018, all shares available under the 2010 Plan were subject to outstanding equity awards, and the Company does not intend to make any new awards under the 2010 Plan. 

A summary of option activity under the 2018 Plan, 2013 Plan and 2010 Plan for the nine months ended September 30, 2018, is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in millions)
Options outstanding at December 31, 2017		463,600	$	11.23	9.5
Granted		287,500	$	21.13
Options outstanding at September 30, 2018		751,100	$	15.02	9.0	$	11.9
Options exercisable at September 30, 2018		170,947	$	4.32	7.7	$	4.5

At September 30, 2018, there was approximately $5.2 million of unrecognized compensation expense related to the share-based compensation arrangements granted under all plans and the average remaining vesting period was 3.4 years. The weighted average grant date fair value of options granted during the nine months ended September 30, 2018 was $12.36. The amount of stock-based compensation expense recorded to research and development and to general and administrative is detailed in table below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Stock-based compensation
Research and development	$	179,930	$	99,847	$	515,584	$	118,233
General and administrative		172,786		6,151		415,933		18,384
	$	352,716	$	105,998	$	931,517	$	136,617

Warrants

A summary of warrant activity for the nine months ended September 30, 2018is presented below:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contract Term (# years)		Intrinsic Value
Outstanding and exercisable at December 31, 2017		317,630		$	123.61	0.54			—
Canceled/forfeited		(306,656	)	$	135.58
Outstanding and exercisable at September 30, 2018		10,974		$	124.27		0.02		—

On January 23, 2018, all outstanding and unexercised Series J warrants to purchase an aggregate of 2,942 shares of common stock expired. On January 29, 2018, all outstanding and unexercised Series K warrants to purchase an aggregate of 2,262 shares of common stock expired. On April 9, 2018, all outstanding and unexercised Series M warrants to purchase an aggregate of 301,452 shares of common stock expired.

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Net Loss Per Share

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Net Loss Per Share

7. NET LOSS PER SHARE

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding. Diluted net loss per share is computed similarly to basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted net loss per share is the same as basic net loss per common share, since the effects of potentially dilutive securities are antidilutive.

As of September 30, 2018 and 2017, the number of shares of common stock underlying potentially dilutive securities are comprised of:

	September 30,
	2018		2017
Warrants		10,974		317,630
Options to purchase common stock		751,100		165,000
Total		762,074		482,630

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Significant Accounting Polices (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Share-Based Compensation

Share-Based Compensation

The Company records share-based payments at fair value. The measurement date for compensation expense related to employee awards is generally the date of the grant. The measurement date for compensation expense related to nonemployee awards is generally the date that the performance of the awards is completed and, until such time, the fair value of the awards is remeasured at the end of each reporting period. Accordingly, the ultimate expense is not fixed until such awards are vested. The fair value of awards, net of expected forfeitures, is recognized as an expense in the statement of operations over the requisite service period, which is generally the vesting period. The fair value of options is calculated using the Black-Scholes option pricing model. This option valuation model requires the use of assumptions including, among others, the volatility of stock price, the expected term of the option, and the risk-free interest rate.

The following assumptions were used to estimate the fair value of stock options granted during the nine-month period ending September 30, 2018 and 2017 using the Black-Scholes option pricing model:

	2018	2017
Risk-free interest rate	2.35% - 2.98%	1.83%
Expected life (years)	6.25	5.75
Volatility	60%	60%
Dividend rate	0%	0%

Use of Estimates

Use of Estimates

The Company’s accounting principles require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the condensed financial statements and reported amounts of revenues and expenses during the reporting period. Estimates having relatively higher significance include the accounting for acquisitions, stock-based compensation, and income taxes. Actual results could differ from those estimates and changes in estimates may occur.

Basic and Diluted Net Loss per Common Share

Basic and Diluted Net Loss per Common Share

Basic and diluted net loss per common share is computed by dividing net loss in each period by the weighted average number of shares of common stock outstanding during such period. For the periods presented, common stock equivalents, consisting of options, convertible redeemable preferred stock and warrants, were not included in the calculation of the diluted loss per share because to do so would be anti-dilutive.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which establishes new accounting and disclosure requirements for leases. FASB ASU No. 2016-02 requires lessees to classify most leases as either finance or operating leases and to initially recognize a lease liability and right-of-use asset. Entities may elect to account for certain short-term leases (with a term of one year or less) using a method similar to the current operating lease model. The statements of operations will include, for finance leases, separate recognition of interest on the lease liability and amortization of the right-of-use asset and for operating leases, a single lease cost, calculated so that the cost of the lease is allocated over the lease term on a straight-line basis. While the Company is in the early stages of its implementation process for FASB ASU No. 2016-02 and has not yet determined its impact on its consolidated financial position or results of operations, these leases would potentially be required to be presented on the balance sheet in accordance with the requirements of FASB ASU No. 2016-02, which is effective for annual reporting periods beginning after December 15, 2018, including interim periods therein, with early adoption permitted. FASB ASU No. 2016-02 must be applied using a modified retrospective approach, which requires the recognition and measurement of leases at the beginning of the earliest period presented, with certain practical expedients available.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350).  This ASU eliminates step 2 from the goodwill impairment test by comparing the fair value of a reporting unit with the carrying amount of the reporting unit.  If the carrying amount exceeds the fair value, an impairment charge for the excess is recorded. The amendments of this ASU are effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019.  Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.  The Company is currently evaluating the impact of the adoption of this ASU on the consolidated financial statements.

In June 2018, the FASB issued ASU No. 2018-07, Compensation—Stock Compensation (Topic 718) Improvements to Nonemployee Share-Based Payment Accounting. The purpose of this amendment is to address aspects of the accounting for nonemployee share-based payment transactions. The amendments in this ASU are effective for public business entities for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. The Company does not believe that this guidance will have a material impact on its consolidated results of operations, financial position or disclosures.

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Significant Accounting Polices (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Schedule of Estimate Fair Value of Stock Options Granted

The following assumptions were used to estimate the fair value of stock options granted during the nine-month period ending September 30, 2018 and 2017 using the Black-Scholes option pricing model:

	2018	2017
Risk-free interest rate	2.35% - 2.98%	1.83%
Expected life (years)	6.25	5.75
Volatility	60%	60%
Dividend rate	0%	0%

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2018

Property Plant And Equipment [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following at September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
Computer hardware and software	$	46,564		$	16,555
Leasehold improvements		7,648			7,968
Furniture and fixtures		97,742			42,503
Subtotal property and equipment, gross		151,954			67,026
Less accumulated depreciation		(20,666	)		(4,042	)
Property and equipment, net	$	131,288		$	62,984

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Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2018

Accounts Payable And Accrued Liabilities Current [Abstract]

Schedule of Accrued Expenses

Accrued expenses consisted of the following at September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
Accrued license fees	$	791,820	$	817,578
Accrued pre-commercial costs		—		341,159
Accrued consulting		205,290		102,156
Accrued contract research		137,318		99,140
Accrued miscellaneous expenses		51,394		73,348
Accrued contract manufacturing		91,363		218,108
Accrued audit and tax		142,715		111,250
Accrued legal		139,619		174,592
	$	1,559,519	$	1,937,331

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Commitments (Tables)

9 Months Ended

Sep. 30, 2018

Newton Lease

Loss Contingencies [Line Items]

Summary of Lease Base Rent

The Newton Lease provides for base rent as follows:

Month of Term Under Newton Lease	Monthly Base Rent
1 to 12	$ 8,480
13 to 24	$ 8,710
25 to 36	$ 8,940

Bend Lease

Loss Contingencies [Line Items]

Summary of Lease Base Rent

The Bend Lease provides for base rent as follows:

Month of Term Under Bend Lease	Monthly Base Rent
1 to 12	$ 4,004
13 to 24	$ 4,124
25 to 36	$ 4,248

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Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Summary of Option Activity under 2013 Plan and 2010 Plan

A summary of option activity under the 2018 Plan, 2013 Plan and 2010 Plan for the nine months ended September 30, 2018, is as follows:

	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in millions)
Options outstanding at December 31, 2017		463,600	$	11.23	9.5
Granted		287,500	$	21.13
Options outstanding at September 30, 2018		751,100	$	15.02	9.0	$	11.9
Options exercisable at September 30, 2018		170,947	$	4.32	7.7	$	4.5

Summary of Stock-Based Compensation Expense

The amount of stock-based compensation expense recorded to research and development and to general and administrative is detailed in table below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2018		2017		2018		2017
Stock-based compensation
Research and development	$	179,930	$	99,847	$	515,584	$	118,233
General and administrative		172,786		6,151		415,933		18,384
	$	352,716	$	105,998	$	931,517	$	136,617

Summary of Warrant Activity

A summary of warrant activity for the nine months ended September 30, 2018is presented below:

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contract Term (# years)		Intrinsic Value
Outstanding and exercisable at December 31, 2017		317,630		$	123.61	0.54			—
Canceled/forfeited		(306,656	)	$	135.58
Outstanding and exercisable at September 30, 2018		10,974		$	124.27		0.02		—

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Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of Number of Shares of Common Stock Underlying Potentially Dilutive Securities

As of September 30, 2018 and 2017, the number of shares of common stock underlying potentially dilutive securities are comprised of:

	September 30,
	2018		2017
Warrants		10,974		317,630
Options to purchase common stock		751,100		165,000
Total		762,074		482,630

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Nature of Operations and Basis of Presentation - Additional Information (Details)		9 Months Ended
	Sep. 19, 2017	Sep. 30, 2018 Patient $ / shares	May 15, 2018 $ / shares	May 14, 2018 $ / shares	Dec. 31, 2017 $ / shares
Organization Consolidation and Presentation of Financial Statement [Line Items]
Number of patients impacted | Patient		7,000
Common stock, par value		$ 0.0001		$ 0.01	$ 0.01
Merger of Private Acer with Opexa Merger Sub Incorporation
Organization Consolidation and Presentation of Financial Statement [Line Items]
Business combination date of completion	Sep. 19, 2017
Business combination date of agreement	Jun. 30, 2017
Reverse stock split ratio	0.09656678989
Delaware Reincorporation and Subsidiary Merger
Organization Consolidation and Presentation of Financial Statement [Line Items]
State of incorporation description		On May 15, 2018, the Company changed its state of incorporation from the State of Texas to the State of Delaware (the “Reincorporation”) pursuant to a plan of conversion, dated May 15, 2018. The Company filed the following instruments on May 15, 2018 to effect the Reincorporation: (i) a certificate of conversion with the Texas Secretary of State; (ii) a certificate of conversion with the Delaware Secretary of State; and (iii) a certificate of incorporation with the Delaware Secretary of State. Pursuant to the plan of conversion, the Company also adopted new bylaws, which became effective with the Reincorporation. The Reincorporation was approved by the Company’s stockholders at its annual meeting on May 14, 2018. Immediately following the Reincorporation, the Company eliminated its holding company structure by merging its wholly-owned subsidiary Private Acer with and into the Company (the “Subsidiary Merger”). The Company was the surviving corporation in connection with the Subsidiary Merger. As the Delaware certificate of incorporation used the placeholder name of “Acer Reincorporation, Inc.” due to “Acer Therapeutics Inc.” already being in existence in Delaware as Private Acer, in connection with the Subsidiary Merger the Company changed its name to “Acer Therapeutics Inc.” pursuant to a certificate of ownership and merger filed with the Delaware Secretary of State on May 15, 2018. As a result of the reincorporation, the par value of the Company’s common stock was reduced to $0.0001 from $0.01.
Date Of Reincorporation		May 15, 2018
Common stock, par value			$ 0.0001

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Significant Accounting Polices - Schedule of Estimate Fair Value of Stock Options Granted (Details)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Accounting Policies [Abstract]
Risk-free interest rate, minimum	2.35%	1.83%
Risk-free interest rate, maximum	2.98%
Expected life (years)	6 years 3 months	5 years 9 months
Volatility	60.00%	60.00%
Dividend rate	0.00%	0.00%

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Property and Equipment - Schedule of Property and Equipment (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 151,954	$ 67,026
Less accumulated depreciation	(20,666)	(4,042)
Property and equipment, net	131,288	62,984
Computer Hardware and Software
Property Plant And Equipment [Line Items]
Property and equipment, gross	46,564	16,555
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and equipment, gross	7,648	7,968
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property and equipment, gross	$ 97,742	$ 42,503

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Accrued Expenses - Schedule of Accrued Expenses (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Accounts Payable And Accrued Liabilities Current [Abstract]
Accrued license fees	$ 791,820	$ 817,578
Accrued pre-commercial costs		341,159
Accrued consulting	205,290	102,156
Accrued contract research	137,318	99,140
Accrued miscellaneous expenses	51,394	73,348
Accrued contract manufacturing	91,363	218,108
Accrued audit and tax	142,715	111,250
Accrued legal	139,619	174,592
Accrued expenses	$ 1,559,519	$ 1,937,331

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Commitments - Additional Information (Details)			9 Months Ended
	Sep. 19, 2018 Patent	Sep. 27, 2017 USD ($)	Sep. 30, 2018 USD ($) Term	Jun. 30, 2018 USD ($)	Apr. 01, 2018 ft²	Mar. 06, 2018 ft²
Assistance Publique – Hôpitaux de Paris (“AP-HP”) | License Agreement
Loss Contingencies [Line Items]
Date of agreement	Sep. 19, 2018
Number of patent applications | Patent	3
Newton Lease
Loss Contingencies [Line Items]
Lease agreement date			Mar. 06, 2018
Square feet of office space leased | ft²						2,760
Lease commencement date			Oct. 01, 2018
Lease expiration date			Sep. 30, 2021
Remaining commitment for rent			$ 313,560
Bend Lease
Loss Contingencies [Line Items]
Lease agreement date			Apr. 01, 2018
Square feet of office space leased | ft²					2,288
Lease commencement date			Apr. 01, 2018
Lease expiration date			Mar. 31, 2021
Remaining commitment for rent				$ 124,488
Maximum additional periods of option to extend the bend term | Term			2
Option to extend bend term for duration period			3 years
Private Acer | Assistance Publique – Hôpitaux de Paris (“AP-HP”) | License Agreement
Loss Contingencies [Line Items]
Date of agreement			Aug. 03, 2016
Pending Litigation | Piper Jaffray & Co. | Private Acer
Loss Contingencies [Line Items]
Loss contingency payable fees		$ 1,097,207
Loss contingency closing date		Sep. 19, 2017
Financing aggregate consideration		$ 15,700,000
Reimbursement expenses		$ 67,496

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Commitments - Newton Lease Base Rent (Details) - Newton Lease	Sep. 30, 2018 USD ($)
Loss Contingencies [Line Items]
Month of Term Under Newton Lease, 1 to 12	$ 8,480
Month of Term Under Newton Lease, 13 to 24	8,710
Month of Term Under Newton Lease, 25 to 36	$ 8,940

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Commitments - Bend Lease Base Rent (Details) - Bend Lease	Sep. 30, 2018 USD ($)
Loss Contingencies [Line Items]
Month of Term Under Bend Lease, 1 to 12	$ 4,004
Month of Term Under Bend Lease, 13 to 24	4,124
Month of Term Under Bend Lease, 25 to 36	$ 4,248

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Stockholders' Equity - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions							9 Months Ended
	Aug. 03, 2018	May 14, 2018	Apr. 09, 2018	Jan. 29, 2018	Jan. 23, 2018	Sep. 19, 2017	Sep. 30, 2018	Dec. 31, 2017
Stockholders Equity [Line Items]
Stock issued during period, shares, new issues	2,555,555
Public offering price per share	$ 18.00
Proceeds from issuance initial public offering, after deduction underwriting discounts, commissions	$ 42.7
Payments for Underwriting Expense	$ 3.3
Number of share outstanding							751,100	463,600
Unrecognized compensation expense							$ 5.2
Share based compensation arrangement by share based payment award, Average remaining vesting period							3 years 4 months 24 days
Weighted average grant date fair value of options granted							$ 12.36
Series J Warrants
Stockholders Equity [Line Items]
Warants expired for aggregate share of common stock to purrchase					2,942
Series K Warrants
Stockholders Equity [Line Items]
Warants expired for aggregate share of common stock to purrchase				2,262
Series M Warrants
Stockholders Equity [Line Items]
Warants expired for aggregate share of common stock to purrchase			301,452
2018 Stock Incentive Plan
Stockholders Equity [Line Items]
Number of common stock authorized for issuance		500,000
Share-based compensation arrangement by share-based payment award, description							In addition, the number of shares that have been authorized for issuance under the 2018 Plan is automatically increased on the first day of each fiscal year beginning on January 1, 2019, and ending on (and including) January 1, 2028, in an amount equal to the lesser of (i) 4% of the outstanding shares of common stock on the last day of the immediately preceding fiscal year, or (ii) another amount (including zero) determined by the Company’s Board. Any shares subject to awards granted under the 2018 Plan that are forfeited or terminated before being exercised or settled, or are not delivered to the participant because such award is settled in cash, will again become available for issuance under the 2018 Plan. Shares withheld to satisfy the grant, exercise price or tax withholding obligation related to an award will again become available for issuance under the 2018 Plan.
Share-based compensation arrangement by share-based payment award, expiration date							Jan. 01, 2028
Share-based compensation arrangement by share-based payment award, percentage of outstanding our common stock							4.00%
Options contractual term		10 years
Available for the grant of future awards							372,072
2018 Stock Incentive Plan | Executive Officers and Employees
Stockholders Equity [Line Items]
Share-based compensation arrangement by share-based payment award, stock options vesting period		4 years
2018 Stock Incentive Plan | Executive Officers and Employees | One-year Anniversary of the Grant Date
Stockholders Equity [Line Items]
Share-based compensation arrangement by share-based payment award, Vesting percentageShare-based compensation arrangement by share-based payment award, Vesting percentage		25.00%
2018 Stock Incentive Plan | Executive Officers and Employees | Quarterly over Remaining Three Years
Stockholders Equity [Line Items]
Share-based compensation arrangement by share-based payment award, Vesting percentageShare-based compensation arrangement by share-based payment award, Vesting percentage		75.00%
2010 and 2013 Stock Incentive Plan | Maximum
Stockholders Equity [Line Items]
Number of share outstanding		635,170
2013 Stock Incentive Plan
Stockholders Equity [Line Items]
Number of common stock authorized for issuance						165,000
Options contractual term						10 years
2010 Stock Incentive Plan
Stockholders Equity [Line Items]
Number of common stock authorized for issuance						470,170
Options contractual term						10 years
Over-Allotment Option
Stockholders Equity [Line Items]
Stock issued during period, shares, new issues	333,333

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Stockholders' Equity - Summary of Option Activity under 2013 Plan and 2010 Plan (Details) - USD ($) $ / shares in Units, $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Options
Number of Shares, Options outstanding at beginning of period	463,600
Number of Shares, Options granted	287,500
Number of Shares, Options outstanding at end of period	751,100	463,600
Number of Shares, Options exercisable at end of period	170,947
Weighted Average Exercise Price, Options
Weighted Average Exercise Price, Options outstanding at beginning of period	$ 11.23
Weighted Average Exercise Price, Options granted	21.13
Weighted Average Exercise Price, Options outstanding at end of period	15.02	$ 11.23
Weighted Average Exercise Price, Options exercisable at end of period	$ 4.32
Weighted Average Remaining Contract Term, Options
Weighted Average Remaining Contractual Term, Options outstanding at beginning of period	9 years	9 years 6 months
Weighted Average Remaining Contractual Term, Options exercisable at end of period	7 years 8 months 12 days
Aggregate Intrinsic Value, Options outstanding at end of period	$ 11.9
Aggregate Intrinsic Value, Options excersiable at end of period	$ 4.5

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Stockholders' Equity - Summary of Stock-Based Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Stockholders Equity [Line Items]
Stock-based compensation	$ 352,716	$ 105,998	$ 931,517	$ 136,617
Research and Development
Stockholders Equity [Line Items]
Stock-based compensation	179,930	99,847	515,584	118,233
General and Administrative
Stockholders Equity [Line Items]
Stock-based compensation	$ 172,786	$ 6,151	$ 415,933	$ 18,384

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Stockholders' Equity - Summary of Warrant Activity (Details) - Warrants - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Class Of Warrant Or Right [Line Items]
Number of Shares, Outstanding at beginning of period	317,630
Number of Shares, Options Caneled/forfeited	(306,656)
Number of Shares, Outstanding at end of period	10,974	317,630
Weighted Average Exercise Price, Warrants
Weighted Average Exercise Price, Outstanding at beginning of period	$ 123.61
Weighted Average Exercise Price, Options Canceled/forfeited	135.58
Weighted Average Exercise Price, Outstanding at end of period	$ 124.27	$ 123.61
Weighted Average Remaining Contract Term, Warrants
Weighted Average Remaining Contract Term, Outstanding at beginning of period		6 months 14 days
Weighted Average Remaining Contract Term, Exercisable at beginning of period	7 days
Intrinsic Value, Warrants
Intrinsic Value, Outstanding at beginning of period	$ 0
Intrinsic Value, Outstanding at end of period		$ 0
Intrinsic Value, Exercisable at end of period	$ 0

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Net Loss Per Share - Schedule of Number of Shares of Common Stock Underlying Potentially Dilutive Securities (Details) - shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common stock dilutive securities	762,074	482,630
Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common stock dilutive securities	10,974	317,630
Options to purchase common stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Common stock dilutive securities	751,100	165,000