FCOI Policy — BDH Pharma

BDH Pharma, LLC Financial Conflict of Interest Policy

PURPOSE

The primary goal of this policy is to promote objectivity in research by establishing standards that provide a reasonable expectation that the design, conduct, and reporting of research funded under NIH grants or cooperative agreements will be free from bias resulting from Investigator financial conflicts of interest. BDH Pharma, LLC (“BDH Pharma”) conducts research and development activities which are often supported by small business grants from federal agencies. The purpose of this Financial Conflict of Interest (FCOI) policy is to document and define our standards and procedures for identifying and managing financial conflicts of interests to safeguard the integrity of research conducted by BDH Pharma and our subawardees and contractors.

This policy has been developed to comply with the following regulations:

- Title 42 Code of Federal Regulations (CFR), Part 50, Subpart F, Responsibility of Applicants for Promoting Objectivity in Research for Which PHS Funding is Sought.

- Title 45 Code of Federal Regulations (CFR), Part 94, Responsible Prospective Contractors.

This policy will be publicly available on the BDH Pharma website at: https://www.bdhpharma.com/fcoipolicy

GENERAL POLICY

Under the Public Health Service (PHS) and National Science Foundation (NSF) final rules on Objectivity in Research (Federal Register, July 11, 1995 and modified in the Federal Register on August 25, 2011), each investigator is required to complete appropriate training as required under this policy; and disclose a listing of his/her significant financial interests, as well as those of his/her spouse and dependent children, that would reasonably appear to be affected by the research proposed for funding by the PHS or the NSF. If, after review of these disclosures, it is determined that the reported financial interests could directly and significantly affect the design, conduct, or reporting of the research, BDH Pharma will report the existence of such conflicting interests to the sponsor and act to protect the resulting research from bias owing to the conflict of interest. This policy statement is intended to satisfy current Federal rules for disclosure with regard to projects funded by the PHS or the NSF.

SCOPE

This policy applies to all personnel, including all Members and full-time, part-time, temporary, and contract employees of BDH Pharma, who are participating in, or planning to participate in, the design, conduct, or reporting of Public Health Service (“PHS”) funded research and research proposals. This policy does not apply to research and development conducted under Phase I Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) awards.

For federally-supported research projects involving subawardees or contractors (collectively “subrecipients”), the subrecipient institutions are required to provide written assurance that a FCOI policy is in effect that is compliant with all applicable federal regulations, or that the subrecipient will conform to and abide by BDH Pharma FCOI policy and procedures.

DEFINITIONS

Disclosure means an Investigator's disclosure of significant financial interests to the Company.

Financial Conflict of Interest (FCOI) means a Significant Financial Interest that could directly and significantly affect the design, conduct, or reporting of PHS-funded research.

FCOI Report means the Company's report of a Financial Conflict of Interest to a PHS Awarding Component.

Financial Interest means anything of monetary value, whether or not the value is readily ascertainable. HHS means the United States Department of Health and Human Services, and any components of the Department to which the authority involved may be delegated.

Company Responsibilities means an Investigator's professional responsibilities on behalf of the Company, and as defined by the Company in its policy on financial conflicts of interest, which may include for example: activities such as research, research consultation, training, professional practice, and service on panels.

Investigator means 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, subcontractors, or consultants.

Manage means 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.

Member means any person executing the Company Operating Agreement, or thereafter admitted to the Company as a Member as provided in the Company Operating Agreement.

PD/PI means 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 means 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 means the organizational unit of the PHS that funds the research that is subject to this subpart.

Public Health Service Act or PHS Act means the statute codified at 42 U.S.C. 201 et seq.

Research means a systematic investigation, study or experiment designed to develop or contribute to generalizable knowledge relating broadly to public health. The term encompasses basic and applied research and product development. 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, Company training grant, program project, or research resources award.

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

Significant Financial Interest means:

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 Company responsibilities:

(i) 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;

(ii) 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 a management or governance position; or

(iii) Intellectual property rights and interests (e.g., patents, copyrights), upon receipt of income related to such rights and interests.

2) Travel:

(i) 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 Company responsibilities;

(ii) 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 Institute 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 Institute of higher education.

(iii) BDH Pharma’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. BDH Pharma 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) Exclusions: The term Significant Financial Interest does not include the following types of financial interests:

(i) salary, royalties, or other remuneration paid by BDH Pharma to the Investigator if the Investigator is currently employed or otherwise appointed by BDH Pharma, including intellectual property rights assigned to BDH Pharma and agreements to share in royalties related to such rights;

(ii) 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;

(iii) income from seminars, lectures, or teaching engagements sponsored by a Federal, state, or local government agency, an Institute 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 Institute of higher education; or

(iv) income from service on advisory committees or review panels for a Federal, state, or local government agency, an Institute 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 Institute of higher education.

Potential means an opportunity with a reasonable likelihood of occurring.

Small Business Innovation Research (SBIR) Program means 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 REQUIREMENTS

BDH Pharma and all participating subawardees and contractors are required to complete training related to Financial Conflict of Interest (FOCI) prior to engaging in research related to any PHS funding. If any conflicts of interest are found or known, they are required to be disclosed. FCOI training must be updated no less than every four (4) years or as designated based on specific grant requirements or project role. Training will include information on the Company’s policy, Investigator’s disclosure responsibilities, and Federal regulation. Immediate training will be required if BDH Pharma revises this policy in a manner that affects the Investigator, when an Investigator is new to BDH Pharma, or as a result of a finding of noncompliance with this policy or a management plan.

BDH Pharma FCOI training is conducted through the NIH Financial Conflict of Interest Tutorial available through the National Institutes of Health (NIH) (https://grants.nih.gov/grants/policy/coi/tutorial2018/story_html5.html), which was designed to provide education training on what constitutes financial conflict of interest. Upon completion of the training tutorial, a certificate completion is generated, which must be turned in to the Chief Administrative Officer (CAO).

DISCLOSURE REPORTING

An Investigator will disclose any situation in which the Investigator has, or may have, a real or potential Significant Financial Interest as defined and provided herein. Research should not be undertaken where a Significant Financial Interest is present until a determination and approval has been made pursuant to this policy.

Disclosure must be made:

(i) no later than at the time of application for PHS funded research.

(ii) annually to BDH Pharma. If no Significant Financial Interest is present a Disclosure must still be submitted that states “none”. The date such annual Disclosure is due shall be set by the Members and disseminated in a timely manner.

(iii) whenever a new or potential Significant Financial Interest arises or when a significant change occurs concerning an existing Disclosure.

(iv) within thirty (30) days of discovery or acquiring a new Significant Financial Interest.

(v) as part of the new hire employment process.

REVIEW and MONITORING

Prior to the expenditure of any funds under PHS funded research, the Chief Administrative Officer (BDH Pharma’s designated FCOI official) shall solicit and review all SFI Disclosures; evaluate if any SFIs relate to PHS funded research (i.e. SFI could be affected by the PHS funded research, or is in an entity whose financial interest could be affected by the research); determine if an FCOI exists (if the SFI could directly and significantly affect the design, conduct, or reporting of the PHS funded research); and develop and implement management plans, as needed to manage FCOIs.

The Chief Administrative Officer shall seek input from the Investigator and recommend a suitable Management Plan to eliminate or manage the FCOI consistent with the objectives of this policy. The Management Plan shall provide for its periodic review and updating at least annually. In the event that there is no reasonable way to manage a FCOI, then the Investigator may be prohibited from participating in the related Research until such a time as the FCOI is eliminated. Final review and determination must be completed prior to the expenditure of any PHS funds for the applicable Research.

Examples of conditions or restrictions that might be imposed to manage a financial conflict of interest include, but are not limited to:

1) Public disclosure of financial conflicts of interest (e.g., when presenting or publishing the research);

2) For research projects involving human subjects research, disclosure of financial conflicts of interest directly to participants;

3) Appointment of an independent monitor capable of taking measures to protect the design, conduct, and reporting of the research against bias resulting from the financial conflict of interest;

4) Modification of the research plan;

5) Change of personnel or personnel responsibilities, or disqualification of personnel from participation in all or a portion of the research;

6) Reduction or elimination of the financial interest (e.g. sale of an equity interest); or

7) Severance of relationships that create financial conflicts.

The Chief Administrative Officer shall review SFI Disclosures, determine if they are a FCOI, and implement a management plan when required for an Investigator who is new to participating in the research project or for an existing Investigator who discloses a new SFI.

The Chief Administrative Officer shall review SFI Disclosures, determine if they are a FCOI, and implement a management plan within sixty (60) days whenever the BDH Pharma identifies an SFI that was not disclosed timely by an Investigator or not previously reviewed by BDH Pharma.

ENFORCEMENT and REMEDIES for NONCOMPLIANCE

Violations of BDH Pharma policies, including the failure to avoid a prohibited activity or disclose a Significant Financial Interest in a timely manner, will be dealt with in accordance with applicable policies and procedures that may include disciplinary actions up to and including termination of employment.

Whenever a financial conflict of interest is not identified or managed in a timely manner including failure by the Investigator to disclose a significant financial interest that is determined by BDH Pharma to constitute a financial conflict of interest; failure by BDH Pharma to review or manage such a financial conflict of interest; or failure by the Investigator to comply with a financial conflict of interest management plan, BDH Pharma shall, within 120 days of the determination of noncompliance, complete a retrospective review of the Investigator's activities and the PHS funded research project to determine whether any PHS funded research, or portion thereof, conducted during the time period of the noncompliance, was biased in the design, conduct, or reporting of such research.

BDH Pharma is required to document the retrospective review; such documentation shall include, but not necessarily be limited to, all of the following key elements:

(a) Project number

(b) Project title

(d) Name of the Investigator with the FCOI

(e) Name of the entity with which the Investigator has a financial conflict of interest

(f) Reason(s) for the retrospective review

(g) Findings of the review

(h) Conclusions of the review

Based on the results of the retrospective review, BDH Pharma shall update the previously submitted FCOI report, specifying the actions that will be taken to manage the financial conflict of interest going forward. If bias is found, BDH Pharma is required to notify the PHS Awarding Component promptly and submit a mitigation report to the PHS Awarding Component. The mitigation report must include, at a minimum, the key elements documented in the retrospective review above and a description of the impact of the bias on the research project and BDH Pharma’s plan of action or actions taken to eliminate or mitigate the effect of the bias (e.g., impact on the research project; extent of harm done, including any qualitative and quantitative data to support any actual or future harm; analysis of whether the research project is salvageable). Thereafter, BDH Pharma will submit FCOI reports annually. Depending on the nature of the financial conflict of interest, BDH Pharma may determine that additional interim measures are necessary with regard to the Investigator's participation in the PHS funded research project between the date that the financial conflict of interest or the Investigator's noncompliance is determined and the completion of BDH Pharma’s retrospective review.

Clinical Research: In any case in which the HHS determines that a PHS funded project of clinical research whose purpose is to evaluate the safety or effectiveness of a drug, medical device, or treatment has been designed, conducted, or reported by an Investigator with a FCOI that was not managed or reported by BDH Pharma as required by this policy, BDH Pharma shall require the Investigator involved to disclose the FCOI in each public presentation of the results of the research and to request an addendum to previously published presentations.

REPORTING REQUIREMENTS

BDH Pharma, through its Members, shall provide annual and revised reports of FCOI to PHS/National Institutes of Health (NIH) per the applicable regulations:

(a) Prior to the expenditure of funds;

(b) within sixty days of identification for an Investigator who is newly participating in the project;

(d) at least annually (at the same time as when the Company is required to submit the annual progress report, multi-year progress report, if applicable, or at time of extension) to provide the status of the FCOI and any changes to the management plan, if applicable, until the completion of the project;

(e) following a retrospective review to update a previously submitted report, if appropriate.

BDH Pharma, through its Members, shall notify PHS/NIH if bias is found in the design, conduct, or reporting of PHS/NIH funded Research including whether Investigator failure to comply with this FCOI policy or management plan appears to have caused such bias. In the event bias is found, Company will submit a Mitigation report in accordance with the regulation. The mitigation report must include, at a minimum, a description of the impact of the bias on the research project and the Company's plan of action or actions taken to eliminate or mitigate the effect of the bias (e.g., impact on the research project; extent of harm done, including any qualitative and quantitative data to support any actual or future harm; analysis of whether the research project is salvageable).

FCOI records shall be maintained for at least three (3) years from the date of submission of the final expenditure reports for the pertinent PHS/NIH funding or longer as required by other policy or regulation.

SUBRECIPIENTS

Subrecipients Company, through its Members, shall require subrecipient compliance with pertinent FCOI requirements as mandated by PHS regulation:

1) If applicable, obtain a certification from the subrecipient that its FCOI policy complies with the regulation.

2) If applicable, include in the written subrecipient agreement a requirement for the subrecipient to report identified FCOIs for its Investigators in a time frame that allows BDH Pharma to report identified FCOIs to PHS/NIH as required by the regulation.

3) Alternatively, if applicable, include in the written agreement a requirement to solicit and review subrecipient Investigator disclosures that enable BDH Pharma to identify, manage, and report identified FCOIs to PHS/NIH.

PUBLIC ACCESSIBILITY

BDH Pharma shall post this FCOI policy on their public website, as required by the regulation.

FCOI Informational requests by the public concerning identified FCOIs held by senior/key personnel should be made to the Chief Administrative Officer. The Chief Administrative Officer shall respond to requests for FCOI information within five (5) business days with minimum reporting elements as provided for under applicable regulations. Information concerning the significant financial interests of senior/key personnel shall remain available, for responses to written requests, for at least three years from the date that the information was most recently updated.