Enlivex Therapeutics Ltd. announced a strategic reprioritization plan. The Company plans to increase its existing focus on inflammatory and autoimmune indications. The Company, since its inception, considered the inherent properties of Allocetra as a new, highly-differentiated modality for immune resolution across a wide variety of inflammatory and auto-immune indications with unmet medical needs that received strong interest from large pharma, physicians and patients.

In addition to the ongoing Phase II trial of Allocetra in patients with sepsis, the Company has initiated a clinical program in osteoarthritis, a degenerative disease with low grade inflammation, and an indication with a substantial unmet medical need that potentially represents a multibillion commercial market. Within the osteoarthritis program, the Company recently dosed the first patient in a Phase I/II investigator-initiated clinical trial enrolling patients with severe knee osteoarthritis who had been scheduled for knee replacement surgeries and are offered to inject Allocetra locally into the diseased knee as a potential alternative for pain resolution and knee functionality in lieu of replacement surgery. The Company is planning, in addition to this Phase I/II trial, to initiate a randomized, controlled Phase II clinical trial in patients with moderate knee osteoarthritis in early 2024.

That clinical trial is expected to enroll 120-150 patients and would be double-blinded, controlled and statistically powered to evaluate efficacy as well as safety, and potentially allow the Company to design and initiate a Phase III registrational trial upon its completion. The Company?s revised strategy is targeted at obtaining topline data readouts from two advanced-stage clinical indications by mid-2025 ? (a) a randomized, controlled Phase II trial in 120 patients with sepsis with a targeted topline data readout by the end of First Quarter 2024, and (b) a randomized, controlled Phase II trial in 120-150 patients with moderate knee osteoarthritis, with a targeted topline data readout by the end of Second Quarter 2025; as well as a targeted topline data readout by the end of Third Quarter 2024 from the Phase I/II investigator-initiated clinical trial in 12 patients with severe knee osteoarthritis who had been scheduled for knee replacement surgeries.

In the two ongoing oncology clinical trials, 15 patients with advanced malignancies of different origins that were heavily pre-treated with multiple lines of therapy prior to the study, were treated with repeat doses of Allocetra given intravenously or intraperitoneally. Most patients received monotherapy treatment and lower doses of Allocetra. Results demonstrated tolerability and safety, allowing the program to proceed to assess the efficacy of Allocetra in solid tumor indications in combination with other therapies and at higher doses.

Pursuant to the strategic reprioritization plan, and in light of the new guidelines and regulatory initiatives set by the FDA for drug development in oncology that may result in longer clinical development cycles as foundations for regulatory approvals, the Company will cease the internal clinical development of various oncology indications and plans to seek external collaborations or out-licensing opportunities for its oncology assets. As a result of the Company?s reprioritization of its clinical indications and focus on the inflammatory and auto-immune verticals, the Company intends to reduce its workforce by approximately 50%. The workforce reductions and the savings associated with the reclassification of the oncology indications as candidates for external collaborations or out-licensing opportunities in lieu of internal development are expected to result in a substantial extension of the Company?s cash runway through the end of 2025.

The revised, extended cash runway is expected to support the timeline for the topline data readouts of the two advanced-stage, randomized, controlled Phase II clinical trials in sepsis and osteoarthritis. The initiation of the clinical program in osteoarthritis followed preclinical evidence of the potential applicability of Allocetra?s mechanism of action to resolve chronic low grade inflammation of joints with osteoarthritis, as well as a substantial recovery in a case of a 70-year old patient who suffered for many years from vanishing bone disease (Gorham-Stout syndrome), which is a rare disease characterized by destruction of osseous matrix and proliferation of vascular structures, resulting in complete destruction and absorption of the patient?s shoulder joint. Despite exhaustive therapeutic attempts, the patient?s disease remained refractory to treatment and continued to deteriorate, with continuous production of synovial fluid, necessitating permanent drainage of the shoulder and, as a consequence, requiring extended hospitalization for a duration of nine months prior to compassionate treatment with Allocetra to the shoulder joint.

Following five intra-articular Allocetra injections, substantial improvement was documented in multiple clinical parameters, including pain and inflammatory cytokines, and the patient was successfully discharged from the hospital. At a two-year follow-up, the improvement in the afflicted shoulder was maintained and no subsequent hospital re-admissions were required.