CEND BUSINESS Overview Cend Therapeutics, Inc. (formerly DrugCendR, Inc.) is a Delaware corporation, formed in October 2015 ("Cend" or "the Company") and based in San Diego, California. Cend is focused on a tumor microen

Cend Therapeutics, Inc. (formerly DrugCendR, Inc.) is a Delaware corporation, formed in October 2015 ("Cend" or "the Company") and based in San

Diego, California. Cend is focused on a tumor microenvironment ("TME")-modifying approach to enable more effective treatment for a range of solid tumor cancers. Cend is advancing a pipeline of product and partnering opportunities based on the

CendR Platform to potentially improve outcomes for patients with a range of solid tumor cancers that are currently poorly treated, representing high unmet medical needs.

Many solid tumor cancers, including pancreatic ductal adenocarcinoma ("PDAC"), gastric cancers and many other solid tumor cancers are surrounded by

dense fibrotic tissue, or stroma. This limits the efficacy of current chemotherapies for these cancers. Emerging immunotherapy treatments, including checkpoint inhibitors, adoptive cell therapies such as chimeric antigen receptor T ("CAR-T")

cells, as well as nucleic acid-based therapies, such as short interfering RNA ("siRNA"), antisense, and messenger RNAs ("mRNAs") face particular challenges in penetrating solid tumors. Many tumors also exhibit an immunosuppressive tumor

immuno-microenvironment, which suppresses patients' immune systems' ability to fight their cancer and can limit effectiveness of immunotherapies. These factors negatively impact the ability of many therapeutic agents, including immunotherapies,

to effectively treat these cancers.

To address the tumor stroma's role as a primary impediment to effective treatment, Cend's approach activates a natural transport system that

normally brings nutrients into a tissue under emergency situations such as an injury. Cancers highjack this system to promote their own growth. Cend's lead investigational drug, CEND-1 (an internalizing R-G-D or iRGD peptide) activates this

transport system in a tumor-specific manner (Sugahara, Science, 2010). This results in tumors taking up systemically administered anticancer drugs as if

they were nutrients. As a result, more drug accumulates in the tumor than would accumulate without CEND-1, while normal tissues are not affected. Moreover, the drugs penetrate tumor cells further away from blood vessels with CEND-1 than without.

The overall result is enhanced anticancer activity without an increase in side effects. Anticancer drugs can be coupled or conjugated to CEND-1 or other CendR peptides in Cend's portfolio, but can be also simply given together with CEND-1. Cend

believes that the co-administration option is an advantage because it is not necessary to create a new chemical entity with its attendant regulatory hurdles, providing a potentially faster-to-clinic and potentially faster-to-market product

opportunity for a range of solid tumor cancers and for co-administration with a range of therapies.

Clinical progress with other approaches to address delivery to highly fibrotic tumors, such as PEGylated hyaluronidase and hedgehog inhibitors, has been

limited by toxicity and side effects. CEND-1 has demonstrated favorable safety/tolerability and activity in clinical trials to enhance delivery of standard-of-care chemotherapy for PDAC. Cend and its collaborators have also amassed non-clinical

data demonstrating enhanced delivery of a range of emerging anticancer therapies, including immunotherapies, and RNA-based therapeutics. CEND-1's cancer-targeted delivery may enable such emerging treatment modalities to potentially more

effectively treat a range of solid tumor cancers.

Patients in Cend's PDAC Phase 1b clinical trial received CEND-1 plus standard gemcitabine/nab-paclitaxel (Abraxane) therapy. CEND-1 was well tolerated

and the combination generated a promising response rate as well as encouraging progression-free and overall survival results. Preliminary clinical results were presented at the European Society for Molecular Oncology meeting in 2020 and provided

clinical validation of safety/tolerability and clinical utility. Full results from that study have been accepted for publication in a major medical journal in the third quarter of 2022. Cend and its collaborators have initiated a randomized Phase

2 trial in first-line ("1L"), metastatic PDAC ("mPDAC") with CEND-1/gemcitabine/nab-paclitaxel versus placebo/gemcitabine/nab-paclitaxel. Enrollment has begun and the first patients have initiated treatment in the Phase 2b trial.

Over 20 scientific papers from laboratories all over the world provide non-clinical validation for Cend's technology and suggest that CEND-1 can enhance

antitumor activity of a variety of therapeutics in a variety of solid tumor types. The drugs that have been targeted to tumors in preclinical tumor models include siRNA, antisense, microRNAs, immunostimulatory oligonucleotides, chemotherapeutics,

kinase inhibitors, antibodies, nanoparticle drugs, cytokines and even adoptive cell immunotherapies, indicating the potential broad applicability of CEND's technology. Cend believes that the CendR Platform holds potential to improve the efficacy

of a broad range of cancer therapies.

RNA-based therapies, including antisense, siRNA, microRNA and mRNA have faced particular delivery issues for solid tumor cancer applications. These

drugs also encounter issues in non-specific binding to serum proteins as well as degradation by nucleases. Once taken up by cells, they may also become sequestered in endosomes that, in some cases, may keep them from reaching their targeted

intracellular compartments in adequate concentrations. Cend's Tumor-Penetrating Nanocomplex, or TPN technology platform utilized the same tumor-targeted tissue penetrating capabilities that CEND-1 has demonstrated in the clinic to enable

effective delivery of nucleic acid-based drugs into solid tumors. In TPNs, these targeting moieties are combined with other elements to form nanocomplexes that self-assemble with RNA-based drugs to encapsulate them to protect from undesired serum

protein binding and/or degradation. The TPN platform includes endosome-release moieties that can be employed for applications where release from such endosomes will enhance activity in other cellular compartments. TPN technology has been shown to

enhance tumor-targeted delivery of constructs such as siRNA to the G12D mutant of K-Ras, which drives approximately 90% of PDAC, as well as other RNA-based drugs targeted to high interest anticancer tumor targets. With alternative CendR targeting

moieties, it has also been used by Cend and its collaborators to deliver RNA-based drugs to immunomodulatory genes selectively targeting certain immune cells.

In 2021, Cend entered a license and collaboration agreement with a major pharmaceutical company in China, Qilu Pharmaceutical Co., Ltd., in which Qilu

gained rights to CEND-1 for development and commercialization in Greater China. Under terms of the agreement, Cend received $10 million in up-front license fees and is eligible to receive development and commercial milestone payments up to $100

million and $125 million, respectively, tiered royalties on net sales in the Qilu territory ranging from 10% to 15%, and tiered sublicensing revenues ranging from 12% to 35%. The parties also have an active collaboration in which Qilu provides

funding for development and regulatory activities within China.

To fully exploit the CendR Platform , Cend anticipates that it will enter into additional partnerships that may include significant upfront licensing

fee, milestone and royalty revenues as well as research and development funding for Cend. In some circumstances, Cend may elect to enter joint venture or other strategic relationships with partners who possess complementary assets or

capabilities. This approach enables Cend stakeholders to participate in broad application of Cend's technology in a capital-efficient business model.

CEND-1 is an investigational drug that modifies the TME. It is targeted to tumor vasculature by its affinity for alpha-v integrins that are selectively expressed in tumor, but not healthy tissue vasculature. CEND-1 is a cyclic internalizing RGD ("iRGD") peptide that, once bound to these

integrins, is cleaved by proteases expressed in tumors to release a peptide fragment, called a CendR fragment, which binds to a second receptor, called neuropilin-1, to activate a novel uptake pathway that allows anticancer drugs to more

selectively penetrate solid tumors. The ability of CEND-1and iRGD peptides to modify the TME to enhance delivery and efficacy of co-administered drugs has been demonstrated in models of a range of solid tumors. Results from Cend, collaborators

and research groups around the world have been the subject of over 200 scientific publications.

Clinical development

CEND-1 Phase 1b Data

Cend conducted its Phase 1b clinical trial on 29 evaluable first-line metastatic pancreatic ductal adenocarcinoma patients. The safety profile of CEND-1

combination regimen was similar to standard of care ("SoC") alone. CEND-1 was shown to be well-tolerated with no-dose limiting toxicities. Favorable pharmacokinetic profile with median circulating half-life of ~2 hours. An Objective Response Rate

("ORR") of fifty nine percent was observed, including a rare complete response, which compares favorably to the twenty three percent ORR observed in the "MPACT" clinical trial that served as the basis for approval of nab-paclitaxel for use in

combination with gemcitabine for the treatment of first line, metastatic pancreatic ductal adenocarcinoma. The Disease Control Rate (partial and complete responses plus stable disease) of over seventy nine percent was observed, which compares

favorably to forty eight percent observed in the MPACT trial. Reduction in the level of circulating tumor biomarker CA19-1 was observed in ninety six percent of patients versus sixty one percent in the MPACT trial. Median progression-free

survival of nearly ten months was observed and compares favorably to less than six months in the MPACT trial. Median overall survival of over thirteen months was observed and compares favorably to less than nine months in the MPACT trial.

Target Market and Customers.

Cend's initial target market for its drug delivery technology is expected to be the pancreatic cancer market, initially the enhancement of gemcitabine

and nab-paclitaxel combination chemotherapy with potential to expand for combination with other chemotherapy regimens as well as targeted therapies and immunotherapies. In terms of patient population, the potential market for CEND-1 includes

62,210 new pancreatic cancer patients per year in the U.S., as reported by the American Cancer Society, and 496,000 new cases per year and 466,000 deaths per year due to pancreatic cancer worldwide, as reported by the International Agency for

Production and Marketing Plan.

CEND-1 is manufactured via relationships with CDMO partners, who Cend believes possess sufficient scale and experience to cost-effectively address

projected commercial demand.

Cend plans to commercialize via standard distribution relationships by itself or via partnerships to bring its products to cancer patients around the

Research and Development

Cend believes that there are many opportunities to leverage its expertise to develop new treatments for significant unmet medical needs. Cend will also

continue to seek research and development synergies across all its programs and indications. Cend's research and development accrued expenses were $65 thousand and $174 thousand in the years ended December 31, 2020 and 2021, respectively. Cend's

research and development expenses were $1.3 million and $3.2 million in the three months ended March 31, 2022 and 2021, respectively.

The commercialization of new drugs is competitive, and Cend may face worldwide competition from major pharmaceutical companies, specialty pharmaceutical

companies, biotechnology companies and ultimately generic companies. Cend's competitors may develop or market therapies that are more effective, safer or less costly than any that Cend is commercializing, or may obtain regulatory or reimbursement

approval for their therapies more rapidly than Cend may obtain approval for those of Cend's.

Strategies that specifically aim at dealing with the stromal barrier in tumors by reducing the synthesis (inhibition of Notch signaling; (e.g. Olive et

al., 2009; Provenzano et al., 2012)) and by increasing the degradation of the stroma (hyaluronidase treatment; Halozyme PEGPH20) would most directly compete with CEND-1, but have failed in the clinic. Cend's technology is based on a different

principle: CEND-1 targets its effects to tumor via affinity for integrins that are selectively expressed on tumor vasculature and initiates an active transport pathway that converts the stromal barrier into a drug conduit without destroying the

surrounding tissue. It can also be used without the need to couple the drug to the targeting agent. Although effective in mouse cancer models, Notch inhibitors appear to have failed in human trials. Cend believes that these matrix remodeling

methods lack the targeting aspect provided by CEND-1.

Tumor-targeted variations of cell-penetrating peptides, such as TAT, are a potential competing technology that does involve tumor targeting2. However, as the cell-penetrating peptide lacks tumor specificity, Cend believes that these compounds are likely to be less specific for tumors than iRGD/CEND-1.

Also, their cell internalization pathway is different from the CendR pathway used by iRGD3, and they have not been shown to possess the ability of the

tumor-penetrating peptides to promote drug penetration without covalent coupling.

Intellectual Property

As of December 31, 2021, Cend had eight issued U.S. patents, seven U.S. patent applications pending, no U.S. trademark registrations and one trademark

applications pending in the United States and other countries. Cend also licenses certain technologies from third parties on an exclusive basis in order to make, use and/or sell certain products in the United States and some foreign

jurisdictions. Cend's material issued U.S. patents generally expire between 2029 and 2030.

Cend's success will significantly depend upon its ability to obtain and maintain patent and other intellectual property and proprietary protection for

Cend's drug candidates in the U.S. and internationally. In addition to trademarks and patents, Cend relies upon unpatented trade secrets, know-how, and continuing technological innovation to develop and maintain Cend's competitive position. Cend

protects its proprietary information, in part, using confidentiality agreements with its commercial partners, collaborators, employees and consultants and invention assignment agreements with its employees. Cend also has confidentiality

agreements or invention assignment agreements with its commercial partners and selected consultants. Despite these measures, any of Cend's intellectual property and proprietary rights could be challenged, invalidated, circumvented, infringed or

misappropriated, or such intellectual property and proprietary rights may not be sufficient to permit Cend to take advantage of current market trends or otherwise to provide competitive advantages. In addition, such confidentiality agreements and

invention assignment agreements can be breached and Cend may not have adequate remedies for any such breach.

SBP Exclusive License Agreement. On December 1, 2015, Cend (then DrugCendR

LLC) entered into an Exclusive License Agreement (the "SBP License Agreement") with the Sanford Burnham Prebys Medical Discovery Institute ("SBP"), a California not-for-profit, public benefit corporation based in San Diego, California. Pursuant

to the SBP License Agreement, SBP licensed to Cend the exclusive right to use certain patents to further Cend's research and development efforts. As partial consideration, Cend paid a license fee, and is obligated to pay SBP a royalty on

sub-license revenues as well as royalty on net sales of identified products as well as development-based milestone payments (as defined therein).

Qilu Exclusive License Agreement. On February 11, 2021 ("Effective Date"),

Cend and Qilu entered into an Exclusive License and Collaboration Agreement ("Qilu Agreement") wherein Cend agreed to license to Qilu, certain patents and other rights relating to CEND-1 exclusively in the territory of the Greater Area of China

(including China, Macau, Hong Kong and Taiwan, each a Region (collectively, the "Territory")). Under the terms of the agreement, Cend received $10 million in up-front license fees and is eligible to receive developmental and commercial milestone

payments up to $100 million and $125 million, respectively, tiered royalties on net sales in the Qilu territory ranging from 10% to 15%, and tiered sublicensing revenues ranging from 12% to 35%.

UC Exclusive Patent License Agreement. On March 9, 2021, Cend entered into

an Exclusive License Agreement (the "UC License Agreement") with the Regents of the University of California ("UC"). Pursuant to the UC License Agreement, UC licensed to Cend the exclusive right to use certain patents to further Cend's research

and development efforts. As partial consideration, Cend paid a license fee, and is obligated to pay UC a royalty on sub-license revenues as well as royalty on net sales of products as well as development-based milestone payments (as defined

MIT Exclusive Patent License Agreement. On October 4, 2021, Cend entered

into an Exclusive License Agreement (the "MIT License Agreement") with the Massachusetts Institute of Technology ("MIT"). Pursuant to the MIT License Agreement, MIT licensed to Cend the exclusive right to use certain patents to further Cend's