Karma's near-term monetization strategy is to license our core lipid nanoparticle platform, SNIPR, to partners in need of delivery solutions for their therapeutic payloads. For example, in 2021 Karma entered a partnership with Alloy Therapeutics to codevelop up to ten drugs. Alloy will pay Karma $500K up front per drug, with 100% data sharing and a royalty of up to 20%. Alloy has already paid Karma $250K to begin the first project. Longer-term, Karma will license our own Xavine™ therapeutics to larger partners for clinical development. A recent comp for this is Amgen's collaboration deal with EVOQ Therapeutics to discover and develop drugs for autoimmune disorders. Amgen is paying EVOQ $240 million up fronts with a royalty on sales.

To make a tolerogenic vaccine, you need a delivery system that does not activate immune cells (i.e., put them in "attack mode"), which can deliver multiple DNA payloads, and which is stable enough to reach the correct immune cells in the spleen/lymph nodes. When Karma was founded, no such technology existed - viral vectors intrinsically activate immune cells, and lipid nanoparticles were too fragile. To solve this, we built our own lipid nanoparticle gene therapy platform, SNIPR (sub-nanoparticle intracellular payload release). SNIPR's unique chemistry makes them non-immunogenic and extremely stable (months in the fridge, weeks at body temp), and they can deliver multiple DNA payloads at once to induce tolerance in immune cells in vivo.

Karma intends to form a partnership to codevelop our Xavine™ for multiple sclerosis (MS) as soon as possible. The MS Xavine™ is a logical candidate to outlicense because it has well-defined animal models for preclinical proof-of-concept and IND-enabling studies, but is a more complex and crowded market than other target indications (such as myasthenia gravis). Licensing of the MS Xavine™ would yield significant up-front and milestone payments. One or more such deals would support development of Karma’s other Xavines™, including early clinical trials. Karma could hold future products (e.g., Xavines™ for myasthenia gravis and autoimmune encephalitis) for longer, hitting key value inflection points before licensing them on favorable terms.