1. Introduction and Purpose

The purpose of this policy is to document the requirements and responsibilities associated with identifying and managing financial conflicts of interest (FCOI), and to comply with federal regulations, including, but not limited to, the Public Health Service (PHS) Financial Conflict of Interest regulations (42 CFR Part 50, Subpart F) and the National Institutes of Health (NIH) Policy on Financial Conflict of Interest as they pertain to companies that receive PHS funding for research. This policy applies to all individuals who are responsible for the design, conduct or reporting of NIH-funded research projects by the Company, its sub-recipients, and affiliates.

 

2. Policy Statement

It is the policy of Lynthera to identify, manage, and, when appropriate, eliminate financial conflicts of interest in research. A financial conflict of interest exists when an individual’s financial interests or those of their family members, as defined in Section 3 below, could directly and significantly affect the design, conduct, or reporting of NIH-funded research.

 

3. Definitions

For purposes of this policy, the following terms are defined:

"Company" means Lynthera Corporation or any of its subsidiaries.

"Disclosure of Significant Financial Interests" means an Investigator's disclosure of significant financial interests to the Company.

"Financial Conflict of Interest or FCOI" means a significant financial interest that could directly and significantly affect the design, conduct, or reporting of NIH-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, including but not limited to salary or other payments for services (e.g., consulting fees or honoraria); equity interests (e.g., stocks, stock options or other ownership interests); and intellectual property rights (e.g., patents, copyrights, and royalties from such rights).

"Financial Official" means the Company designated official responsible for reviewing FCOI disclosures.

"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.

"Immediate Family" means an Investigator's spouse and dependent children.

"Institution" means 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" means 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" 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 or consultants.

"NIH" means National Institutes of Health wholly, and any of its institutes (e.g., National Eye Institute).

"PD/PI" means a project director or principal Investigator of a NIH-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, 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.

"Regulations" means federal regulations, including, but not limited to, the Public Health Service (PHS) Financial Conflict of Interest regulations (42 CFR Part 50, Subpart F) and the National Institutes of Health (NIH) Policy on Financial Conflict of Interest as they pertain to companies that receive PHS funding for research.

"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 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 Company'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 Company'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 NIH-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.

4. Examples of an SFI include:

   1. the Investigator (or spouse/child/dependent) has a Significant Financial Interest in an entity that sponsors their research project;

   2. the Investigator (or spouse/child/dependent) has a Significant Financial Interest in an entity that produces products (equipment, software, compounds, drugs, devices, etc.) or services used in their research project;

   3. the Investigator (or spouse/child/dependent) has a Significant Financial Interest in an entity that develops product or services their research project intends to evaluate or develop; or

   4. the Investigator (or spouse/child/dependent) has a Significant Financial Interest in an entity with whom they are consulting in an area that overlaps with or is the main subject of his/her research.

"Significant Financial Interest Disclosure Form (SFIDF)" means Company form by which required person provides an itemized disclosure statement with regard to SFI categories. The form is submitted to the Financial Official upon assignment of work sponsored by a federal, state, or local government grant, yearly thereafter er, and when any occurrences of a new SFI arises. Training is required to be completed upon first submission, and every three years unless further education is required.

"Small Business Innovation Research or SBIR" 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.

 

4. Training

This policy shall be distributed by paper copy and email in all new employee hiring packages and an annual compliance notification circulated on the first day of each fiscal year. The relevant federal regulations include, but are not limited to:

(i) 42 CFR Part 50, Subpart F (https://www.ecfr.gov/current/title-42/chapter-I/subchapter-D/part-50/subpart-F);

(ii) National Institutes of Health (NIH) Policy on Financial Conflict of Interest (https://grants.nih.gov/grants/policy/coi/index.htm); and

(iii) FCOI Training (https://grants.nih.gov/grants/policy/coi/fcoi-training.htm).

The FCOI Training was designed by NIH to provide training on what constitutes financial conflict of interest. This course is required for Investigators involved with an NIH project subject to the Regulations. Upon completion of the training, a certificate of completion must be submitted to the Financial Official.

All Investigators must complete training on this policy and the NIH FCOI regulations:

(i) prior to engaging in NIH-funded research;

(ii) at least every three (3) years thereafter; or

(iii) immediately as deemed necessary by the Company due to changes in the FCOI policy, non-compliance of the Investigator/Key Personnel or new to the Company.

 

5. Disclosure, Review and Monitoring

Using a Significant Financial Interests Disclosure Form (SFIDF) provided by the Company, all Investigators are required to disclose their Significant Financial Interests (SFI) s (and those of the Investigator’s spouse and dependent children) related to the Investigator’s institutional responsibilities that meets or exceeds the regulatory definition of SFI:

(i) no later than at the time of application for NIH-funded research;

(ii) at least annually during the period of award; and

(iii) within 30 days of discovering or acquiring a new SFI.

The Company designated official responsible for reviewing FCOI disclosures ("Financial Official") will solicit and review the SFIDF of the Investigator (and those of the Investigator’s spouse and dependent children) related to an Investigator’s institutional responsibilities. The disclosure must include the Investigator’s name, title, the name of the entity in which the financial interest is held, the nature of the financial interest, and the approximate dollar value or a range of dollar values.

It is the Investigator’s responsibility to ensure those with financial interests in research are identified and make the required disclosures in conjunction with submission of a research proposal.

An Investigator's significant financial interest is related to NIH-funded research when the Company, through its designated official(s), reasonably determines that the significant financial interest: could be affected by the NIH-funded research; or is in an entity whose financial interest could be affected by the research. The Company may involve the Investigator in the designated official(s)'s determination of whether a significant financial interest is related to the NIH-funded research. A financial conflict of interest exists when the Company, through its designated official(s), reasonably determines that the significant financial interest could directly and significantly affect the design, conduct, or reporting of the NIH-funded research.

The Financial Official will review all SFIDF to determine if any financial interests constitute an FCOI with NIH-funded research. If an FCOI exists, the designated official will develop and implement a management plan to manage, reduce or eliminate the FCOI. Such management plan will be provided to the NIH for review and approval. In some instances, an FCOI may be deemed unmanageable, and in these cases, the Investigator may be required to divest themselves of the financial interest or be disqualified from participation in the NIH-funded research.

No expenditures on a PHS award will be permitted until the Investigator has complied with the Disclosure requirements of this Policy and has agreed, in writing, to comply with any plans determined by the COIC/designated official necessary to manage the Conflict of Interest.

Whenever, in the course of an ongoing NIH-funded research project, an Investigator who is new to participating in the research project discloses a significant financial interest or an existing Investigator discloses a new significant financial interest to the Company, the Financial Official shall, within sixty (60) days: review the disclosure of the significant financial interest; determine whether it is related to NIH-funded research; determine whether a financial conflict of interest exists; and, if so, implement, on at least an interim basis, a management plan that shall specify the actions that have been, and will be, taken to manage such financial conflict of interest. Depending on the nature of the significant financial interest, the Company may determine that additional interim measures are necessary with regard to the Investigator's participation in the NIH-funded research project between the date of disclosure and the completion of the Company's review.

 

6. Reporting

Prior to the Company's expenditure of any funds under a NIH-funded research project, the Company shall provide to NIH an FCOI report regarding any Investigator's significant financial interest found by the Company to be conflicting and ensure that the Company has implemented a management plan in accordance with this subpart. In cases in which the Company identifies a financial conflict of interest and eliminates it prior to the expenditure of PHS-awarded funds, the Company shall not submit an FCOI report to NIH.

The Financial Official will report all FCOI to the NIH within ten (10) days of notification. Additionally, any Investigator who acquires a new or increased SFI shall promptly submit a new SFIDF within thirty (30) days of discovering or acquiring the new SFI. All Investigators shall provide annual SFIDFs or more frequently if required by a Management Plan.  It is the Principal Investigator’s responsibility to ensure that any newly acquired Investigator on a research project submits the required SFIDF to the Financial Official. The Financial Official must report to NIH any FCOIs within ten (10) days of notification of new SFIs identified by the PI on either notification report, or annual report, and immediately upon review and determination of any bias found with the design, conduct, or reporting of NIH-funded research and to include the requirement to submit a Mitigation Report in accordance with the Regulations, and including the following NIH FCOI reporting items:

(i) The name of the Investigator with the FCOI;

(ii) The name of the entity with which the Investigator has an FCOI;

(iii) The nature of the Significant Financial Interest (SFI);

(iv) The value of the financial interest;

(v) Description of how the financial interest relates to the NIH-funded research and why the Company determined that the financial interest conflicts with such research;

(vi) Description of the key elements of the Company’s management plan, including other required information.

For any SFI that the Company identifies as conflicting subsequent to the Company's initial FCOI report during an ongoing NIH-funded research project (e.g., upon the participation of an Investigator who is new to the research project), the Company shall provide to NIH, within sixty (60) days, an FCOI report regarding the financial conflict of interest and ensure that the Company has implemented a management plan in accordance with this subpart. Where such FCOI report involves an SFI that was not disclosed timely by an Investigator or, for whatever reason, was not previously reviewed or managed by the Company (e.g., was not timely reviewed or reported by a subrecipient), the Company also is required to complete a retrospective review to determine whether any NIH-funded research, or portion thereof, conducted prior to the identification and management of the financial conflict of interest was biased in the design, conduct, or reporting of such research. Additionally, if bias is found, the Company is required to notify NIH promptly and submit a mitigation report to NIH.

For any FCOI previously reported by the Company with regard to an ongoing NIH-funded research project, the Company shall provide to NIH an annual FCOI report that addresses the status of the financial conflict of interest and any changes to the management plan for the duration of the NIH-funded research project. The annual FCOI report shall specify whether the financial conflict is still being managed or explain why the financial conflict of interest no longer exists. The Company shall provide annual FCOI reports to NIH for the duration of the project period (including extensions with or without funds) in the time and manner specified by the PHS Awarding Component.

In addition to the types of financial conflicts of interest as defined in this subpart that must be reported pursuant to this section, the Company may require the reporting of other financial conflicts of interest in its policy on financial conflicts of interest, as the Company deems appropriate.

 

7. Maintenance of Records

The Financial Official will maintain records related to all Investigator disclosures of financial interests, FCOI reviews and management plans, and FCOI training for a period of at least three years from the date of the final expenditures report for the NIH-funded research project.

 

8. Enforcement

Failure to comply with this policy or the NIH FCOI regulations may result in disciplinary action, up to and including termination of employment, termination of research project funding, and referral to appropriate external agencies for investigation.

Whenever a person has violated this policy, including failure to make a required disclosure of financial interests or failure to comply with a requirement of the management plan, the Financial Official shall make recommendations to the CEO regarding the impositions of sanctions or disciplinary proceedings against the violating individual.

In addition, the Company shall follow the Regulations regarding the notification of the sponsoring agency in the event an Investigator has failed to comply with this policy. The federal agency may take its own action as it deems appropriate, including the suspension of the funding for the Investigator until the matter is resolved.

 

9. Subrecipients

Sub-award recipients must comply with this policy or provide certification that their organization is in compliance with the Federal policy (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. Prior to Notification of Award, Company and sub-awards will establish in written agreement which FCOI policy will be followed by which Investigator, and if applicable, certification that the sub-award policy complies with the Regulations, requirement to report identified FCOIs in a timeframe that permits Company to report identified FCOIs to NIH as required by the Regulations, or that Company will solicit and review subrecipient Investigator disclosures to enable identification, management and reporting of FCOIs as required by NIH. If an SFI is identified by the subaward recipient, they are required to notify the Financial Official of the existence of the conflicting interest within thirty (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 the Regulations.

 

10. Public Accessibility

The Company will provide public access to this policy on a publicly accessible page of http://www.lynthera.com. The Financial Official will ensure that any updated versions of this policy are provided for updated posting immediately upon implementation. In addition, an FCOI determined to exist for any Investigator or Senior Key Personnel will be posted to this same webpage in compliance with the Regulations, including the date of posting and:

(i) the minimum elements as provided in the Regulations;

(ii) posting within 5 days of a written request;

(iii) annual updates, unless written requests are made which should continue to be available;

(iv) any updates within 60 days of newly identified FCOI; and

(v) remain available for three years from the date the information was most recently updated.

 

11. Applicability

This policy applies to all NIH-funded research projects in which the Company is the recipient of PHS funds, regardless of the source of the funds (e.g., grants, contracts, or cooperative agreements).

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12. Review and Updates

This policy will be reviewed at least every three years or as needed to ensure compliance with NIH regulations and any changes to PHS funding requirements. Updates to this policy will be communicated to all Investigators and relevant staff.

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If you have any questions regarding this policy, please contact the Financial Official responsible for FCOI disclosures at the Company.