Affimed (AFMD) Risk Factors

Our innate cell engager product candidates in development are based on our fit-for-purpose ROCK platform and are capable of recruiting NK cells and / or macrophages. Regulatory approval of our product candidates is less certain than the approval of drugs that do not employ such novel technologies or methods of action. We intend to work closely with the FDA, the EMA and other regulatory authorities to perform the requisite scientific analyses and evaluation of our methods to obtain regulatory approval for our product candidates. For example, final assays and specifications of our product candidates have yet to be developed, and the FDA, EMA or other regulatory authorities may require additional analyses to evaluate different aspects of our product quality. It is possible that the validation process may take time and resources, may require independent third-party analyses, or may not be accepted by the FDA, the EMA or other regulatory authorities. Delays or failure to obtain regulatory approval of any of the product candidates that we are developing would adversely affect our business.

In addition to the risks and uncertainties discussed elsewhere in this Annual Report, the results of our previous clinical studies may not be predictive of future results, our progress in trials for one product candidate may not be indicative of progress in trials for other product candidates and the results of our current and planned clinical studies may not satisfy the requirements of the FDA, the EMA or other non-U.S. regulatory authorities. We currently have no products approved for sale and we cannot guarantee that we will ever have marketable products. Clinical failure can occur at any stage of clinical development. Clinical studies may produce negative or inconclusive results, and we or any of our current and future collaborators may decide, or regulators may require us, to conduct additional clinical or preclinical testing. We will be required to demonstrate with substantial evidence through well-controlled clinical studies that our product candidates are safe and effective for use in a diverse population before we can seek regulatory approvals for their commercial sale. Success in early clinical trials does not mean that future larger registration clinical studies will be successful, because product candidates in later-stage clinical studies may fail to demonstrate sufficient safety and efficacy to the satisfaction of the FDA and non-U.S. regulatory authorities despite having progressed through initial clinical studies. Product candidates that have shown promising results in early clinical studies may still suffer significant setbacks in subsequent registration clinical studies. Similarly, the outcome of preclinical testing and early clinical studies may not be predictive of the success of later clinical studies, and interim results of a clinical study do not necessarily predict final results. Progress in trials of one product candidate does not indicate that we will make similar progress in additional trials for that product candidate or in trials for our other product candidates. A number of companies in the pharmaceutical industry, including those with greater resources and experience than us, have suffered significant setbacks in advanced clinical studies, even after obtaining promising results in earlier clinical studies. In addition, the design of a clinical study can determine whether its results will support approval of a product and flaws in the design of a clinical study may not become apparent until the clinical study is well advanced. We may be unable to design and execute a clinical study to support regulatory approval. 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 changes in trial protocols, differences in size and type of the patient populations, adherence to the dosing regimen and other trial protocols and the rate of dropout among clinical study participants. We do not know whether any phase 2, phase 3 or other clinical studies we or any of our collaborators may conduct will demonstrate consistent or adequate efficacy and safety to obtain regulatory approval to market our product candidates. Furthermore, changes in combination therapies that we utilize in our clinical trials may create variability between results of early-stage clinical trials and later clinical trials. For example, to date we have generated data for acimtamig combined with allogeneic NK cells in CD30+ lymphomas utilizing a NK cell product from MD Anderson Cancer Center. The NK cell used in the phase 1/2 trial is a freshly prepared, cbNK cell (cord-blood derived) that is precomplexed with acimtamig. However, in November 2022, we announced a collaboration with Artiva to advance a separate development of the combination of acimtamig and AlloNK into a potential registration enabling study, LuminICE-203. While AlloNK is also an allogeneic, cord blood-derived NK cell, there are differences as compared to the NK cell used in our phase 1/2 study, including the fact that AlloNK is cryopreserved and is manufactured and activated in different ways than the MDACC cbNK cell used in the phase 1/2 trial. Further, rather than precomplexing acimatmig with AlloNK, we co-administer acimtamig with AlloNK. In January 2023, we announced that the FDA issued a written response to our pre-IND meeting request for the LuminICE-203 study. In May 2023, we announced the FDA clearance of our IND application for the clinical study evaluating the combination of acimtamig and AlloNK in patients with R/R classical HL ("cHL") and CD30+ PTCL. We initiated enrollment into the study in October 2023. Further, our product candidates may not be approved even if they achieve their primary endpoints in phase 3 clinical studies or registration trials. The FDA, the EMA or other non-U.S. regulatory authorities may disagree with our trial design and our interpretation of data from preclinical and clinical studies. In addition, any of these regulatory authorities may change requirements for the approval of a product candidate even after reviewing and providing comments or advice on a protocol for a clinical study. In addition, any of these regulatory authorities may also approve a product candidate for fewer or more limited indications than we request or may grant approval contingent on the performance of costly post-marketing clinical studies. The FDA, the EMA or other non-U.S. regulatory authorities may not accept the labeling claims that we believe would be necessary or desirable for the successful commercialization of our product candidates.

We have a limited history of conducting large-scale or pivotal clinical studies, and no history commercializing pharmaceutical products, which may make it difficult to evaluate the prospects for our future viability. Our operations to date have been limited to financing and staffing our company, developing our technology and developing acimtamig, AFM24, AFM28 and, previously, our other product candidates. We have not yet demonstrated an ability to successfully complete a large-scale or pivotal clinical study, obtain marketing approval, manufacture a commercial scale product or conduct sales and marketing activities necessary for successful product commercialization. Consequently, predictions about our future success or viability may not be as accurate as they could be if we had a history of successfully developing and commercializing pharmaceutical products. If clinical studies for our product candidates are prolonged, delayed or stopped, we may be unable to obtain regulatory approval and commercialize our product candidates on a timely basis, which would require us to incur additional costs and delay or restrict our receipt of any product revenue. There have been significant developments in the highly dynamic field of immuno-oncology such as the earlier availability of product candidates, or earlier approval of drugs for the same indications as our product candidates, which led us to adapt our clinical programs accordingly. For example, in the past, the marketing authorization of anti-PD-1 antibodies in Hodgkin Lymphoma ("HL") resulted in delays in clinical study initiation and/or patient recruitment for our phase 2a investigator sponsored trial of acimtamig in HL. Certain clinical studies of our product candidates are sponsored by academic sites, which are known as investigator sponsored trials ("ISTs"). By definition, the financing, design, and conduct of such studies are under the responsibility of the academic site sponsor. Therefore, we have limited control over these studies, and we do not have control over the timing and reporting of the data from these trials. In addition, we may have limited information about ISTs while they are being conducted, including the timing of planned trial initiation, the status of patient recruitment, changes to trial design, and clinical study results. At this stage, we cannot assure you of the safety or tolerability of acimtamig, AFM24, AFM28 mono- and/or combination therapy or of their ability to demonstrate efficacy in humans. The commencement of planned clinical studies could be substantially delayed or prevented by several factors, including: - further discussions with the FDA, the EMA, or other regulatory agencies regarding the scope or design of our clinical studies;- the limited number of, and competition for, suitable sites to conduct our clinical studies, many of which may already be engaged in other clinical study programs, including some that may be for the same indication as our product candidates;- approval of drugs for the same indications as our product candidates;- any delay or failure to obtain regulatory approval or agreement to commence a clinical study in any of the countries where enrollment is planned;- inability to obtain sufficient funds required for a clinical study;- clinical holds on, or other regulatory objections to, a new or ongoing clinical study;- delay or failure in the testing, validation, manufacture and delivery of sufficient supplies of product candidate for our clinical studies;- delays related to the impact of a widespread outbreak of an illness or communicable disease or any other public health crisis, similar to the recent COVID-19 pandemic;- delay or failure to reach agreement on acceptable clinical study agreement terms with prospective sites or clinical research organizations ("CROs") the terms of which can be subject to extensive negotiation and may vary significantly among different sites or CROs; and - delay or failure to obtain institutional review board ("IRB") or ethics committee approval to conduct a clinical study at a prospective site. The completion of our clinical studies has been and could in the future be substantially delayed or prevented by several factors, including: - slower than expected rates of patient recruitment and enrollment, due to factors including, but not limited to, the availability of other drugs to treat potential patients, the unwillingness of patients to participate in low-dose groups of dose-ranging studies and lack of recruitment by clinical study sites;- delays relating to adding new clinical study sites;- failure of patients to complete the clinical study or return for post-treatment follow-up;- failure of our collaborators to provide us with products necessary for us to conduct our combination studies;- safety issues, including severe or unexpected drug-related adverse effects experienced by patients, including possible deaths;- the FDA or other regulatory authorities requiring us to suspend or terminate a clinical study, or requiring us to submit additional data or imposing other requirements before permitting us to continue a clinical study;- lack of efficacy during clinical studies;- errors in trial design or conduct;- termination of our clinical studies by one or more clinical study sites;- inability or unwillingness of patients or clinical investigators to follow our clinical study protocols, including clinical investigators' failure to comply with our clinical study protocols without our notice;- inability to monitor patients adequately during or after treatment by us and/or our CROs; and - the need to repeat or terminate clinical studies as a result of inconclusive or negative results or unforeseen complications in testing. For example, in our clinical studies for acimtamig and AFM24, infusion related reactions ("IRRs") have been a commonly observed treatment-related side effect, in some cases serious. In our phase 1b study evaluating the combination of acimtamig with pembrolizumab, IRRs related to acimtamig were observed in 27 of 30 patients, or 90%, and IRRs of grade 3 or greater were observed in four patients, or 13%. IRRs were also observed in our phase 2 REDIRECT study evaluating acimtamig for the treatment of relapsed / refractory ("R/R") positive peripheral T cell lymphoma ("PTCL"), our phase 1/2a study evaluating NK cells pre-complexed with acimatmig in patients with CD30+ lymphomas, and our phase 1/2a studies evaluating AFM24 in patients with epidermal growth factor receptor ("EGFR")-expressing tumors. While these IRRs have generally been well managed with pre-medication and interventional treatments, the incidence of IRRs has occasionally led to dose reductions and/or patients discontinuing their participation in our clinical trials. As we increase the number of clinical trials for our ICE molecules and study them against new tumor targets, there can be no assurance that IRRs or other side effects will not cause delays or termination of our future clinical studies or development plans. Changes in regulatory requirements and guidance may also occur and we may need to significantly amend clinical study protocols or submit new clinical study protocols to reflect these changes with the appropriate regulatory authorities. In addition, changes in the competitive environment have occurred and may continue to occur. Amendments may require us to renegotiate terms with CROs or resubmit clinical study protocols to IRBs or ethics committees for re-examination, which may impact the costs, timing or successful completion of a clinical study. Our clinical studies may be suspended or terminated at any time by the FDA, the PEI, other regulatory authorities, the IRBs or ethics committees overseeing the clinical study at issue, any of our clinical study sites, or us, due to a number of factors, including: - failure to conduct the clinical study in accordance with regulatory requirements or our clinical protocols;- safety issues or any determination that a clinical study presents unacceptable health risks;- lack of adequate funding to continue the clinical study due to unforeseen costs or other business decisions;- upon a breach or pursuant to the terms of any agreement with, or for any other reason by, current or future collaborators that have responsibility for the clinical development of any of our product candidates; and - availability of a new effective treatment for the respective disease or condition that would be considered to be standard of care by regulatory bodies. Our product development costs will increase if we experience delays in clinical studies or marketing approvals or if we are required to conduct additional clinical studies or other testing of our product candidates. We may be required to obtain additional funding to conduct and complete such clinical studies. We cannot assure you that our clinical studies will begin as planned or be completed on schedule, if at all, or that we will not need to restructure our trials after they have begun. Significant clinical study delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidates or allow our competitors to bring products to market before we do, which may harm our business and results of operations. Any failure or significant delay in completing clinical studies for our product candidates would adversely affect our ability to obtain regulatory approval and our commercial prospects and ability to generate product revenue will be diminished.

The research, testing, manufacturing, labeling, approval, selling, marketing and distribution of drug products are subject to extensive regulation by the FDA, the European Medicines Agency (the "EMA"), national competent authorities (the "NCAs") in Europe, including the Paul-Ehrlich-Institute (the "PEI") in Germany, and other non-U.S. regulatory authorities, which establish regulations that differ from country to country. We are not permitted to market our product candidates in the United States or in other countries until we receive approval of a Biologics License Application ("BLA") or Investigational New Drug application ("IND", together with BLAs, the "US Marketing Applications") from the FDA, or marketing authorization application approvals from applicable regulatory authorities outside the United States. Our product candidates are in various stages of development and subject to the risks of failure inherent in drug development. Although we have submitted an IND application for a clinical study evaluating the combination of acimtamig and AlloNK (such study herein referred to as "LuminICE-203"), we continue to have limited experience in conducting and managing the clinical studies necessary to obtain regulatory approval, including by the FDA or the European Commission. Obtaining approval of US Marketing Applications or other marketing authorization applications from regulatory authorities outside the United States can be a lengthy, expensive and uncertain process. In addition, failure to comply with the FDA, the EMA and other non-U.S. regulatory requirements may, either before or after product approval, if any, subject our company to administrative or judicially imposed sanctions, including: - restrictions on our ability to conduct clinical studies, including full or partial clinical holds, or other regulatory objections to ongoing or planned trials;- restrictions on the products, manufacturers, or manufacturing process;- warning letters;- civil and criminal penalties;- injunctions;- suspension or withdrawal of regulatory approvals;- product seizures, detentions or import bans;- voluntary or mandatory product recalls and publicity requirements;- total or partial suspension of production;- imposition of restrictions on operations, including costly new manufacturing requirements; and - refusal to approve pending US Marketing Applications, or supplements thereto, and refusal to approve other marketing authorization applications in other jurisdictions. The FDA, the EMA and other non-U.S. regulatory authorities also have substantial discretion in the drug approval process. The number of preclinical studies and clinical studies that will be required for regulatory approval varies depending on the product candidate, the disease, the medical need or condition that the product candidate is designed to address, and the regulations applicable to any particular drug candidate. Regulatory agencies can delay, limit or deny approval of a product candidate for many reasons, including: - a product candidate may not be deemed safe or effective;- the results may not confirm the positive results from earlier preclinical studies or clinical studies;- regulatory agencies may not find the data from preclinical studies and clinical studies sufficient;- regulatory agencies might not approve or might require changes to our manufacturing processes or facilities; or - regulatory agencies may change their approval policies or adopt new regulations that may have an impact on specific clinical programs. For example, the FDA's Oncology Center of Excellence initiated Project Optimus to reform the dose optimization and dose selection paradigm in oncology drug development and Project FrontRunner to develop a framework for identifying candidate drugs that are appropriate to initially develop for the treatment of early metastatic disease, among other goals. It is unclear how the FDA plans to implement these goals and whether they will have an impact on specific clinical programs. Any delay in obtaining or failure to obtain required approvals could materially adversely affect our ability to generate revenue from the particular product candidate, which likely would result in significant harm to our financial position and adversely impact our share price. Furthermore, any regulatory approval to market a product may be subject to limitations on the indicated uses for which we may market the product. These limitations may limit the size of the market for the product. In addition, even if regulatory approval is granted, pricing and reimbursement may not occur due to a number of factors, including formulary restrictions and health service providers determining that the benefits of a new medicine are insufficient to support reimbursement, among others.

Although all of our product candidates have undergone or will undergo safety testing to the extent possible and agreed with health authorities, not all adverse effects of drugs can be predicted or anticipated. Immunotherapy and its mode of action of harnessing the body's immune system, especially with respect to immune cell engagers, is powerful and could lead to serious side effects that we only discover in clinical studies. Unforeseen side effects from any of our product candidates could arise either during clinical development or, if such side effects are rarer, after our product candidates have been approved by regulatory authorities and the approved product has been marketed, resulting in the exposure of additional patients. All of our product candidates are still in clinical or preclinical development. While our phase 1 clinical studies for acimtamig demonstrated a favorable safety profile, the results from ongoing and future trials of acimtamig or other NK cell-engaging bispecific antibodies may not confirm these results. The most frequently observed adverse event for acimtamig is IRRs, in some cases serious. In our phase 1b study evaluating the combination of acimtamig with pembrolizumab, IRRs related to acimtamig were observed in 27 of 30 patients, or 90%, and IRRs of grade 3 or greater were observed in four patients. IRRs were also observed in our phase 2 study evaluating acimtamig for the treatment of R/R PTCL, our phase 1/2a study evaluating NK cells pre-complexed with acimtamig in patients with CD30+ lymphomas, and our phase 1/2a studies evaluating AFM24 in patients with EGFR-expressing tumors. While these IRRs have generally been well managed with pre-medication and interventional treatments, the incidence of IRRs has occasionally led to dose reductions and/or patients discontinuing their participation in our clinical trials. If we increase the number of clinical trials for our ICE molecules and study them against new tumor targets, there can be no assurance that IRRs or other side effects will not cause delays or termination of our future clinical studies or development plans. We are developing our acimtamig candidate for patients with R/R HL and other CD30+ lymphomas, and AFM24 for patients with EGFR+ solid tumor indications, for which other therapies have limited benefit and survival times may be short. Therefore, we expect that certain patients may die during the clinical studies of our product candidates, and it may be difficult to ascertain whether such deaths are attributable to the underlying disease, complications from the disease, our product candidate, or a combination thereof. The results of ongoing and future clinical studies may show that our product candidates cause undesirable or unacceptable side effects, which could interrupt, delay or halt clinical studies, and result in the delay of, or failure to obtain, marketing approval from the FDA, the European Commission and other regulatory authorities, or result in marketing approval from the FDA, the European Commission and other regulatory authorities with restrictive label warnings or potential product liability claims. Treatment-related side effects could also affect patient recruitment or the ability of enrolled subjects to complete the study or make the product candidate less attractive for partnering. In addition, these side effects may not be appropriately recognized or managed by the treating medical staff, particularly outside of our existing or future collaborators as toxicities resulting from cancer immunotherapies are not normally encountered in the general patient population and by medical personnel. The inability to recognize and manage the potential side effects of our product candidates could result in patient deaths. Any of these occurrences may prevent us from achieving or maintaining market acceptance of the affected product candidate and may harm our business, financial condition and prospects significantly. Additionally, if any of our product candidates receives marketing approval and we or others later identify undesirable or unacceptable side effects caused by such products: - regulatory authorities may require us to take our approved product off the market;- regulatory authorities may require the addition of labeling statements, specific warnings, a contraindication or field alerts to physicians and pharmacies;- we may be required to change the way the product is administered, conduct additional clinical studies or change the labeling of the product;- we may be subject to limitations on how we may promote the product;- sales of the product may decrease significantly;- we may be subject to litigation or product liability claims; and - our reputation may suffer. Any of these events could prevent us, our collaborators or our potential future partners from achieving or maintaining market acceptance of the affected product or could substantially increase commercialization costs and expenses, which in turn could delay or prevent us from generating significant revenue from the sale of our products.

We may submit applications for our product candidates under the Accelerated Approval Program. For example, we are currently conducting the LuminICE-203 study, which is investigating acimtamig in combination with AlloNK. We hope that a positive outcome in the LuminICE-203 study may support a future submission under the Accelerated Approval Program. If our product candidates, including acimtamig, are not accepted into the Accelerated Approval Program, we may be required to conduct additional nonclinical and clinical studies and trials beyond those that we currently contemplate, which could increase the expense of obtaining, reduce the likelihood of obtaining and/or delay the timing of obtaining, necessary marketing approval. Even if we receive approvals from the FDA through the Accelerated Approval Program, if any required confirmatory post-marketing trial does not verify clinical benefit, or if we do not comply with rigorous post-marketing requirements, the FDA may seek to withdraw the approval.