Financial Conflict of Interest Policy

Last updated: November 28th, 2020

Purpose 
The purpose of this policy is to document the requirements and responsibilities associated with identifying and managing financial conflicts of interest to safeguard the integrity of research performed by investigators at Adecto Pharmaceuticals, Inc. and to comply with federal regulations. This policy has been developed to address and comply with the specific federal agency requirements defined in the 2011 Revised Financial Conflict of Interest (FCOI) Regulation, Promoting Objectivity in Research (42 CFR part 50 subpart F). This has been developed to promote objectivity in research by establishing standards that provide a reasonable expectation to ensure the design, conduct and reporting of research funded under Public Health Service (PHS) and National Institutes of Health (NIH) grants or cooperative agreements will be free from bias resulting from Investigator financial conflicts of interest.  


Summary of Process 
Significant Financial Interests (SFI) (please see below for definition) will be disclosed by any Investigator requesting government-sponsored or company-sponsored funds for a research project or by an Investigator when a Significant Financial Interest arises during the course of research. Regardless of whether a SFI exists, all Investigators and key personnel are required to submit SFI disclosure annually. It is the Principal Investigator's responsibility to ensure that those with financial interests in research are identified and that they make the required disclosures. The FCOI Disclosure Form and supporting materials are forwarded to Adecto’s President or Chief Sciencitic Officer (CSO) for review. The President and/or CSO will be responsible for evaluating and instituting a plan for managing any disclosed financial interests, for producing institutional reports and other required reports to external sponsors and governmental agencies, and for the general administration and enforcement of this policy. Advance approval by Adecto’s President or CSO is required prior to engaging in government-sponsored research. A SFI review must be completed before any expenses are incurred under an award. Annual updates are required of all Investigators and key personnel participating in research. Any Investigator who has acquired a new or increased financial interest during the course of a research project will report it immediately to the President or CSO. Annual updates and newly acquired interests are reported using the FCOI Disclosure Form.    


Key Definitions
The following definitions are key in understanding the federal regulations of FCOI. A complete list of official definitions can be found in 42 CFR 50.603.   


Institution – any domestic or foreign, public or private, entity or organization (excluding a Federal agency) applying for or receiving NIH research funding.   


Investigator – a project director (PD) or principal investigator (PI) or any other person, regardless of title or position, who is or will be responsible for the design, conduct, or reporting of research funded by the NIH, which may include, for example, collaborators or consultants.   


Institutional responsibilities – an Investigator's professional responsibilities on behalf of and as defined by the Institution, including but not limited to, activities such as research, research consultation, teaching, professional practice, institutional committee memberships, and service on panels.   


Financial interest – anything of monetary value, whether or not the value is readily ascertainable.   


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


Manage – take action to address a FCOI, which can include reducing or eliminating the FCOI, to ensure, to the extent possible, that the design, conduct, and reporting of research will be free from bias.   


Senior/Key Personnel – PD/PI or any other person identified as senior/key personnel by the Institution in the grant application, progress report, or any other report submitted to the NIH.   


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:   


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; 


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 


iii. Upon receipt of income related to intellectual property rights and interests (e.g. patents, copyrights).  

 
2. Investigators must also 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 excluded sources provided in the regulation. For example, if the PI travels to a scientific seminar but does not pay or receive reimbursement by the Company directly (i.e. the travel was paid for by a third party/sponsor), the PI is required to disclose basic information to the Company relating to the trip, such as purpose of the trip, identity of the payer/sponsor, destination and duration. The Company is required to determine if additional information is required (e.g. monetary value) and whether the travel constitutes a FCOI with NIH-funded research.   


3. The term significant financial interest does not include the following types of financial interests:

   
i. salary, royalties, or other remuneration paid by the Institution to the Investigator if the Investigator is currently employed or otherwise appointed by the Institution; 


ii. intellectual property rights assigned to the Institution and agreements to share in royalties related to such rights; 


iii. any ownership interest in the Institution held by the Investigator, if the Institution is a commercial or for-profit organization; 


iv. 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;   


v. 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 


vi. income from service on advisory committees or review panels for a federal, state or local government agency, Institution of higher education as defied 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.   


Training
The NIH Financial Conflict of Interest tutorial was designed by the NIH to provide training on what constitutes financial conflict of interest. This course is required for anyone involved with an NIH funded project, which includes all Investigators, consultants and employees of Adecto Pharmaceuticals engaged in NIH-funded research or its compliance. The course is available at http://grants.nih.gov/grants/policy/coi/tutorial2011/fcoi.htm. Upon completion, a certificate of completion must be turned to Adecto’s President or CSO. Employee’s must retain a copy for their records. This training is required prior to engaging in research relating to any NIH-funded grant or as deemed necessary by the Company due to changes in the FCOI policy, non-compliance of the Investigator/Key Personnel or new employment at the Company. The FCOI training will be taken at least every four (4) years.


Procedures
A. Identification of Persons Required to Disclose a Significant Financial Interest - It will be the responsibility of the Principal Investigator of a Research project to identify all Investigators who have a SFI requiring disclosure under this policy and to ensure that a SFI Disclosure Form is prepared and submitted. In addition, the Principal Investigator will be responsible for ensuring that annual updates and disclosures of new or increased financial interests are disclosed.  

 
B. Submission and Review of Financial Conflict of Interest Disclosure Form - Every individual having a SFI requiring disclosure under this policy will prepare a fully-completed SFI Disclosure Form that will be submitted to Adecto’s President or CSO. An initial review of the SFI Disclosure Form will be conducted by the President or CSO to determine whether a potential for conflict of interest exists. If it is determined that there is a potential conflict of interest, then steps will be taken to determine what measures are needed to address the SFI identified in the FCOI Disclosure Form. A management plan may be required to outline the terms, conditions and restrictions, if any, to ensure compliance with this policy. The management plan may require one or more of the following actions to be taken in order to manage, reduce or eliminate any actual or potential conflict of interest:    

 

  • Public disclosure of significant financial interests 

  • Review of research protocols by independent reviewers

  • Monitoring of research by independent reviewers

  • Modification of research plan 

  • Disqualification from participation in all or a portion of the funded research  

  • Divesture of significant financial interests 

  • Severance of relationships that create actual or potential conflicts


All management plans are required to be signed by the Investigator and by Adecto’s President or CSO. Compliance of the management plan will be monitored by the President or CSO.   


C. Annual Reporting and Newly Acquired Significant Financial Interests – All Investigators will provide annual FCOI disclosure reports or more frequently if required by the management plan. Any Investigator who acquires a new or increased SFI will promptly submit a new FCOI Disclosure Form within 30 days of discovering or acquiring the new SFI. It is the Principal Investigator’s responsibility to ensure that any newly acquired Investigator on a research project submits the required FCOI disclosure report to the President or CSO.   


D. Violations of Conflict of Interest Policy – Disclosure of SFI is essential for Adecto Pharmaceuticals to implement its FCOI policy. Thus, Investigators are expected to comply fully and promptly with this policy. 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 President or CSO will determine the sanctions or disciplinary proceedings needed to be taken against the violating individual, implement a mitigation plan and further require that the Investigator disclose the FCOI in each public presentation of the results of the research, and to remedy previously published presentations with an FCOI disclosure addendum. The employee may be subject to employment discipline including, without limitation, suspension or termination of employment. In addition, Adecto Pharmaceuticals, Inc. will follow Federal 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.    


E. Record Keeping – Records of Investigator FCOI Disclosure forms, and of actions taken to manage actual or potential conflicts of interest, will be retained by the President and/or CSO for three (3) years from the date the final expenditure report is submitted to the NIH, or as required by 45 CFR 74.53(b) and 92.42(b) for different situations.    


F. Sub-recipient Requirements – 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 Adecto’s President or CSO 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.    


G. Federal Reporting – Adecto’s President or CSO is responsible for the reporting disposition of matters involving disclosures of SFI in accordance with applicable federal requirements. The following reports are required by the NIH:   


i. Initial report – prior to the Company’s expenditure of any funds under a NIH-funded research project, the Company must provide to the NIH a FCOI report regarding any Investigator SFI found by the Company to have a financial conflict of interest in accordance with the regulation;


ii. During on-going NIH-funded research projects – the Company will submit an FCOI report within 60 days after its determination that a new FCOI exists. If a FCOI was not disclosed timely, the Company will submit a FCOI report to the NIH within 60 days of the discovery, as well as complete a retrospective review within 120 days of discovery of noncompliance; 

 
iii. Annual FCOI report – For any FCOI previously reported to the NIH, the Company will provide an annual FCOI report addressing the status of the FCOI and any changes to its related management plan.     


H. Public Accessibility - As required by PHS regulation, this FCOI policy is being made accessible on Adecto Pharmaceuticals’ web site (www.adectopharma.com). If a PHS-funded Investigator holds a financial interest that is determined to constitute a FCOI, as required by PHS regulation, this will also be posted on the web site, and:

  • include at least the minimum elements required by the regulation

  • be updated within sixty (60) days of a newly identified FCOI            

  • be updated annually and remain available for three (3) years