Financial Conflict of Interest Policy

Overview

This Financial Conflict of Interest Policy (this “Policy”) describes certain legal obligations applicable to Investigators’ disclosure of potential financial conflicts of interest (“FCOI”). The purpose of this policy is to comply with applicable law and to ensure the objectivity of the research conducted by Cytonus Therapeutics, Inc., doing business as Cytonus (“Cytonus”), its employees, contractors, and consultants.

Cytonus requires that each employee, investigator, sub-recipient, subgrantee, and collaborator affiliated with grants or contracts funded by the National Institute of Health (NIH) or other US government programs, be in compliance with 42 CFR 50, Subpart F, “Responsibility of Applicants for Promoting Objectivity in Research for which Public Health Service (PHS) Funding is Sought” and 45 CFR 94 regarding grants and cooperative agreements. Cytonus holds the same values as NIH regarding the criticality of preserving the public’s faith that all research, including NIH-funded research, is conducted without bias and with the highest scientific and ethical standards.

Definitions

The following definitions apply to this Policy:

Disclosure of significant financial interests: An Investigator’s disclosure of significant financial interests to an Institution.

Financial conflict of interest (FCOI): A significant financial interest that could directly and significantly affect the design, conduct, or reporting of PHS-funded research.

FCOI report: An Institution’s report of a financial conflict of interest to a PHS Awarding Component.

Financial interest: Anything of monetary value, whether or not the value is readily ascertainable.

HHS: The United States Department of Health and Human Services, and any components of the Department to which the authority involved may be delegated.

Institution: Any domestic or foreign, public or private, entity or organization (excluding a Federal agency) that is applying for, or that receives, PHS research funding.

Institutional responsibilities: An Investigator’s professional responsibilities on behalf of the Institution, and as defined by the Institution in its policy on financial conflicts of interest, which may include for example: activities such as research, research consultation, teaching, professional practice, institutional committee memberships, and service on panels such as Institutional Review Boards or Data and Safety Monitoring Boards.

Investigator: The project director or principal Investigator and any other person, regardless of title or position, who is responsible for the design, conduct, or reporting of research funded by the PHS, or proposed for such funding, which may include, for example, collaborators or consultants.

Manage: Taking action to address a financial conflict of interest, which can include reducing or eliminating the financial conflict of interest, to ensure, to the extent possible, that the design, conduct, and reporting of research will be free from bias.

PD/PI: A project director or principal Investigator of a PHS-funded research project; the PD/PI is included in the definitions of senior/key personnel and Investigator under this subpart.

PHS: The Public Health Service of the U.S. Department of Health and Human Services, and any components of the PHS to which the authority involved may be delegated, including the National Institutes of Health (NIH).

PHS Awarding Component: The organizational unit of the PHS that funds the research that is subject to this subpart.

Public Health Service Act (PHS Act): The statute codified at 42 U.S.C. 201 et seq.

Research: A systematic investigation, study or experiment designed to develop or contribute to generalizable knowledge relating broadly to public health, including behavioral and social-sciences research. The term encompasses basic and applied research (e.g., a published article, book or book chapter) and product development (e.g., a diagnostic test or drug). As used in this subpart, the term includes any such activity for which research funding is available from a PHS Awarding Component through a grant or cooperative agreement, whether authorized under the PHS Act or other statutory authority, such as a research grant, career development award, center grant, individual fellowship award, infrastructure award, institutional training grant, program project, or research resources award.

Senior/key personnel: The PD/PI and any other person identified as senior/key personnel by the Institution in the grant application, progress report, or any other report submitted to the PHS by the Institution under this subpart.

Significant financial interest (SFI):

1. A financial interest consisting of one or more of the following interests of the Investigator (and those of the Investigator’s spouse and dependent children) that reasonably appears to be related to the Investigator’s institutional responsibilities:
   1. With regard to any publicly traded entity, a significant financial interest exists if the value of any remuneration received from the entity in the twelve months preceding the disclosure and the value of any equity interest in the entity as of the date of disclosure, when aggregated, exceeds $5,000. For purposes of this definition, remuneration includes salary and any payment for services not otherwise identified as salary (e.g., consulting fees, honoraria, paid authorship); equity interest includes any stock, stock option, or other ownership interest, as determined through reference to public prices or other reasonable measures of fair market value;
   2. With regard to any non-publicly traded entity, a significant financial interest exists if the value of any remuneration received from the entity in the twelve months preceding the disclosure, when aggregated, exceeds $5,000, or when the Investigator (or the Investigator’s spouse or dependent children) holds any equity interest (e.g., stock, stock option, or other ownership interest); or
   3. Intellectual property rights and interests (e.g., patents, copyrights), upon receipt of income related to such rights and interests.
2. Investigators also must disclose the occurrence of any reimbursed or sponsored travel (i.e., that which is paid on behalf of the Investigator and not reimbursed to the Investigator so that the exact monetary value may not be readily available), related to their institutional responsibilities; provided, however, that this disclosure requirement does not apply to travel that is reimbursed or sponsored by a Federal, state, or local government agency, an Institution of higher education as defined at 20 U.S.C. 1001(a), an academic teaching hospital, a medical center, or a research institute that is affiliated with an Institution of higher education. The Institution’s FCOI policy will specify the details of this disclosure, which will include, at a minimum, the purpose of the trip, the identity of the sponsor/organizer, the destination, and the duration. In accordance with the Institution’s FCOI policy, the institutional official(s) will determine if further information is needed, including a determination or disclosure of monetary value, in order to determine whether the travel constitutes an FCOI with the PHS-funded research.
3. The term significant financial interest does not include the following types of financial interests: salary, royalties, or other remuneration paid by the Institution to the Investigator if the Investigator is currently employed or otherwise appointed by the Institution, including intellectual property rights assigned to the Institution and agreements to share in royalties related to such rights; any ownership interest in the Institution held by the Investigator, if the Institution is a commercial or for-profit organization; income from investment vehicles, such as mutual funds and retirement accounts, as long as the Investigator does not directly control the investment decisions made in these vehicles; income from seminars, lectures, or teaching engagements sponsored by a Federal, state, or local government agency, an Institution of higher education as defined at 20 U.S.C. 1001(a), an academic teaching hospital, a medical center, or a research institute that is affiliated with an Institution of higher education; or income from service on advisory committees or review panels for a Federal, state, or local government agency, an Institution of higher education as defined at 20 U.S.C. 1001(a), an academic teaching hospital, a medical center, or a research institute that is affiliated with an Institution of higher education.

Small Business Innovation Research (SBIR) Program: The extramural research program for small businesses that is established by the Awarding Components of the Public Health Service and certain other Federal agencies under Public Law 97-219, the Small Business Innovation Development Act, as amended. For purposes of this subpart, the term SBIR Program also includes the Small Business Technology Transfer (STTR) Program, which was established by Public Law 102-564.

Training

The NIH Financial Conflict of Interest tutorial was designed by the National Institutes of Health (NIH) to provide education on what constitutes financial conflict of interest. This course is required for any individual meeting the definition of Investigator. As of September 2021, the course is accessible at:

 https://grants.nih.gov/grants/policy/coi/tutorial2018/story_html5.html

Upon completion of the training, the certificate of completion must be submitted to Cytonus’s Institutional Official (or designee) for record retention.

Each Investigator must complete training on this Policy, the investigator’s responsibilities regarding disclosure and the PHS regulations prior to engaging in research funded by PHS, and at least every four (4) years thereafter.  They must also complete training within a reasonable period of time as determined by the Institutional Official in the event that this Policy is substantively amended in a manner that affects the requirements of Investigators, if the investigator is new to the institution, or if it is determined that the Investigator has not complied with this policy or with a management plan related to their activities.

Disclosure of Significant Financial Interests

All Investigators are required to disclose their outside financial interests as defined above to the Institution Official on an annual and on an ad hoc basis, as described below.  The Institutional Official is responsible for the distribution, receipt, processing, review, and retention of disclosure forms.

Annual Disclosures

All Investigators must disclose their Significant Financial Interests, and those of the Investigator’s spouse and dependent children, that are related to the investigator’s institutional responsibilities to the Institution, through the Institutional Official, on an annual basis. 

Ad hoc Disclosures

In addition to annual disclosure, certain situations require ad hoc disclosure.  All Investigators must disclose their Significant Financial Interests to the Institution, through the Institutional Official, within thirty (30) days of their initial appointment or employment.

Prior to entering into PHS-sponsored projects or applications for PHS-sponsored projects, where the Investigator has a Significant Financial Interest, the Investigator must affirm the currency of the annual disclosure or submit to the Institutional Official an ad hoc updated disclosure of his or her Significant Financial Interests with the outside entity.  The Institution will not submit a research proposal unless the Investigator(s) have submitted such ad hoc disclosures.

In addition, all Investigators must submit to the Institutional Official an ad hoc disclosure of any Significant Financial Interest they acquire or discover during the year within thirty (30) days of discovering or acquiring the Significant Financial Interest.

Travel

Investigators must also disclose sponsored travel related to their institutional responsibilities, as defined above in the definition of Financial Interest and Significant Financial Interest.  Such disclosures must include, at a minimum, the purpose of the trip, the identity of the sponsor/organizer, the destination, the duration, and, if known, the monetary value.  The Institutional Official will determine if additional information is needed (e.g., the monetary value if not already disclosed) to determine whether the travel constitutes Financial Conflict of Interest with the Investigator’s research.

All Cytonus employees that meet the definition of Investigator are required to complete the disclosure form annually, even if they have no financial interest to report.

Review of Disclosure Forms

The Institutional Official shall review all Disclosure Forms to determine whether each Significant Financial Interest relates to PHS-funded research and whether a Financial Conflict of Interest exists. This review will occur prior to Cytonus’s expenditure of any funds under a PHS-funded research project, and in the course of a PHS-funded research project, within 60 days of an Investigator’s disclosure of a new Significant Financial Interest or discovery of a Significant Financial Interest that was not timely disclosed by an Investigator.

A Significant Financial Interest is related to PHS-funded research when the Intuitional Official reasonably determines that the Significant Financial Interest could be affected by the PHS-funded research or is in an entity whose financial interest could be affected by the research. A Financial Conflict of Interest exists when the Institutional Official reasonably determines that a Significant Financial Interest could directly and significantly affect the design, conduct, or reporting of the proposed sponsored project.

FCOI Management

If the Institutional Official determines that a Cytonus or subrecipient Investigator has a potential Financial Conflict of Interest, then the Institutional Official will determine what conditions or restrictions, if any, should be imposed by the institution to eliminate, reduce, or manage actual or potential conflicts of interest.

Prior to submitting a proposal that involves disclosure of Significant Financial Interests or after a new Significant Financial Interest has been discovered or acquired, the Investigator should discuss with the Institutional Officer proposed measures that will be taken to manage, reduce, or eliminate any actual or potential conflict of interest presented by a Significant Financial Interest (e.g., public disclosure of significant financial interests; review of research protocol by independent reviewers; monitoring of research by independent reviewers; and/or modification of the research plan).

Following review of the Disclosure Forms for each Investigator on a particular proposal, the Institutional Officer may impose additional conditions or restrictions (e.g., modification of the research plan; disqualification from participation in all or a portion of the research funded; divestiture of significant financial interests; and/or severance of relationships that create actual or potential conflict of interest). The Institutional Official will require that a plan for reducing or eliminating conflicts of interest be incorporated into a memorandum of understanding between Cytonus and the Investigator, providing a management plan on an on-going basis until completion of the PHS-funded research project.

Reporting to PHS

Cytonus’s designated Institutional Official will review all disclosures and evaluate whether they contain any FCOI. If no FCOI is found, the disclosure forms will be kept on file. If an FCOI is identified, the disclosure of the FCOI will be reported through the eRA Commons FCOI module. If any interests are identified as conflicting subsequent to the initial report, they must be reported to Cytonus within 30 days. Cytonus will then report it to the PHS awarding component that has issued the award within 60 days. Each Investigator must submit an updated disclosure of an SFI not less than annually. 

In the event of non-compliance with reporting and/or management of a financial conflict of interest involving a PHS-sponsored clinical research project whose purpose is to evaluate the safety or effectiveness of a drug, medical device, or treatment as required by this Policy, the investigator must disclose the financial conflicts of interest in each public presentation of the results of the affected PHS-sponsored research and request an addendum to previously published presentations.

Cytonus will provide to the PHS Awarding Component an FCOI report as outlined in the regulations:

Initial Report: Prior to expenditure of any funds under the NIH- or PHS-funded research project, Cytonus will provide a FCOI report regarding any SFI found to be a FCOI. Cytonus will also provide a FCOI report within 60 calendar days from the date of a new SFI disclosure determined to be a FCOI, a new Investigator with an identified FCOI becomes engaged in the project, or when Cytonus identifies a FCOI not previously disclosed. The report will include information mandated by PHS guidelines, including Grant/Contract Number and its Principal Investigator, the Name of Investigator with the FCOI, the nature of the FCOI and its value (or relevant description in cases where value cannot be readily defined), a description of how FCOI relates to PHS-funded research and the basis for the determination that the financial interest conflicts with such research, and key elements of the FCOI action plan.

Annual updates will be submitted to the PHS Awarding Component for the duration of the research project, describing the status of the FCOI, and, as necessary, updates to the action plan or justification that an FCOI no longer exists.

Record Keeping

Cytonus will maintain records of all FCOI related records including training records, SFI disclosures, and records of resulting Cytonus action, for at least three years from the date of submission of the final expenditures report for the applicable funding, or for such other periods of time as may be required under 45 CFR 75.361, if applicable.

To the extent permitted by law, all disclosure forms, conflict management plans, and related information will be confidential.  However, Cytonus may be required to make such information available to the PHS Awarding Component and/or HHS, to a requestor of information concerning financial conflict of interest related to PHS funding, or to additional entities as required. If Cytonus is requested to provide disclosure forms, conflict management plans, and related information to an outside entity, the Investigator will be informed of this disclosure.
 
Financial and other information disclosed in compliance with this policy will be disclosed only on a need-to-know basis as required to perform appropriate review and evaluation required by the policy, except in the case of required public accessibility of identified financial conflicts of interest held by senior/key personnel.

Violations of Conflict-of-Interest Policy

In the event of an Investigator’s failure to comply with this Policy, the Institutional Official may suspend all relevant activities or take other disciplinary action until the matter is resolved or other action deemed appropriate by the Institutional official is implemented.

An Institutional Official’s decision to impose sanctions on an Investigator because of failure to comply with this Policy, or failure to comply with the decision of the Institutional official, will be described in a written explanation of the decision to the investigator, and, where applicable, the IRB, and will notify the individual of the right to appeal the decision. Additionally, Cytonus shall follow federal regulations regarding the notification of the sponsoring agency and/or PHS.

Retrospective Review

If the Institutional Official determines that a Financial Conflict of Interest was not identified or managed in a timely manner (e.g., an Investigator failed to disclose a Significant Financial Interest that is determined to be a Financial Conflict of Interest; an Investigator failed to comply with a management plan for a Financial Conflict of Interest) a committee appointed by the Institutional Official will complete a retrospective review of the Investigator’s activities and the research project to determine whether the research conducted during the period of non-compliance was biased in the design, conduct, or reporting of the research. Documentation of the retrospective review must be in accordance with 42 C.F.R. 50.605 and shall take place within 120 days of the Institutional Official’s determination of noncompliance. The Institutional Official will update any previously submitted report to the PHS or the prime PHS-awardee relating to the research, specifying the actions that will be taken to manage the Financial Conflict of Interest going forward. If bias is found, the report will include a mitigation report in accordance with the PHS regulations, including a description of the impact of the bias on the research project and the plan of action to eliminate or mitigate the effect of the bias.

Subawards

Sub-award recipients must comply with this policy or provide certification that their organization is in compliance with the Federal policy, 2011 Revised Financial Conflict of Interest Regulation, Promoting Objectivity in Research (42 CFR part 50 subpart F) and that their portion of the research project, as detailed in their sub-award agreement, is in compliance with their institutional policies. If a SFI is identified by the sub-award recipient, they are required to notify the CFO of the existence of the conflicting interest within 30 days of the identification of the interest. In addition, the sub-award recipient must certify and assure that any reported conflicting interest has been managed, reduced, or eliminated in accordance with federal regulations. 

Public Accessibility

As required by federal regulations and upon written request, Cytonus will provide to any requestor written information about Financial Conflicts of Interest of an individual who is listed as a Senior or Key Personnel on a PHS award. Requests must be in writing addressed to Cytonus Therapeutics, Inc., 3280 Grey Hawk Court, Carlsbad, CA 92010, and received through the US mail. The request must identify the specific PHS project number and the name of the Investigator for whom information is being requested. The request must include a named recipient and return address with a physical street address (P.O. boxes are not acceptable). Cytonus will note in its written response that the information is current as of the date of the correspondence and is subject to updates at least annually and within 60 days of Cytonus’s identification of a new Financial Conflict of Interest, which must be requested under separate cover by the requestor.

The following information will be provided in response to a properly submitted request: project number, name of the Investigator with a Financial Conflict of Interest; the Investigator’s title and role with respect to the research project; the nature of the Financial Interest; and the value of the Financial Interest (in ranges), or a statement that the interest is one whose valued cannot be readily determined through reference to public prices or other reasonable measure of fair market value.