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Item 1A. Risk Factors

2026-03-17 compared with 2025-03-20 · 793 added, 715 removed, 754 unchanged (67% of the section changed)

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financial results, and future growth prospects.

These disclosures reflect our beliefs and opinions as to factors that could materially and adversely affect us and

our securities in the future.

References to past events are provided by way of example only and are not intended to be a complete listing

or a representation as to whether such factors have occurred in the past or their likelihood of occurring in the future.

FACTOR SUMMARY

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include, but are not limited to the following:

may not be able to successfully manufacture or commercialize ZEVASKYN ® and the revenue that we generate from its sales,

if any, may be limited.

financial performance depends on the commercial success of ZEVASKYN ® and we have limited experience as a commercial-stage

may encounter challenges with engaging or coordinating with qualified treatment centers needed for the ongoing commercialization

of ZEVASKYN ® .

cell and gene therapy product candidates are based on proprietary methodologies, which makes it difficult to predict the time and

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products have evolved and may continue to change in the future.

we do not obtain the necessary U.S.

or worldwide regulatory approvals to commercialize pz-cel, we will not be able to sell pz-cel.

if we receive regulatory approval for pz-cel, our lead drug candidate, we may not be able to successfully manufacture or commercialize

the product and the revenue that we generate from its sales, if any, may be limited.

may encounter substantial delays in our clinical studies, or we may fail to demonstrate safety and efficacy to the satisfaction of

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could experience production problems in our manufacturing facility that result in delays in our development or commercialization

We might also experience delays in manufacturing if any of our vendors, contract laboratories or suppliers are found to

be out of compliance with current Good Manufacturing Practice.

We may also experience delays in manufacturing if any of our vendors, contract laboratories or suppliers are found to be

out of compliance with cGMP.

we fail to comply with applicable regulations, the relevant regulatory authority may require remedial measures that may be costly

or time-consuming to implement and that may include the suspension of a clinical trial or commercial sales or the closure of a manufacturing

widespread outbreak of an illness, communicable disease, or any other public health crisis could adversely affect our business, results

of operations and financial condition.

expect to rely on third parties, and these third parties may not perform satisfactorily.

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our trade secrets in court, and intellectual property litigation could cause us to spend substantial resources.

Third-parties

may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be

uncertain and could harm our business.

parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would

be uncertain and could harm our business.

may be subject to claims asserting that our employees, consultants or advisors have wrongfully used or disclosed alleged trade secrets

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cause dilution to our existing stockholders, restrict our operations or require us to relinquish proprietary rights.

of data security or unauthorized disclosures of personal information could effect our business or make us subject to liability.

of data security or unauthorized disclosures of personal information could affect our business or make us subject to liability.

Related to the Commercialization of ZEVASKYN ® and our Ability to Generate Revenue

are in the early stages of commercializing ZEVASKYN ® and our limited operating history as a commercial-stage company makes

it difficult to predict the long-term success of our business.

received FDA approval for ZEVASKYN ® in 2025, and we are currently in our first full year of commercial sales.

we have limited historical experience operating as a commercial-stage company and limited data on which to base our expectations

regarding future revenues, gross margins, operating expenses, and cash flows.

Transitioning from a clinical-stage company to a

commercial-stage organization requires us to develop, refine, and scale capabilities across sales, marketing, patient services,

manufacturing, distribution, compliance, and financial reporting.

These activities require significant management attention and

financial resources and may present challenges that we have not previously encountered.

If we are unable to effectively manage this

transition, execute our commercial strategy, or appropriately align our cost structure with revenues, our business, financial

condition, cash flow, results of operations, and growth prospects could be adversely affected.

financial performance depends on the commercial success of ZEVASKYN ® and we have limited experience as a commercial-stage

As such, we may not be able to successfully commercialize ZEVASKYN ® and the revenue that we generate from its

sales, if any, may be limited.

ability to generate significant revenue from product sales depends on ZEVASKYN ® ’s successful commercialization.

Successful commercialization requires success in many areas, including, but not limited to:

patients who have been diagnosed with RDEB and wish to begin receiving treatment;

and maintaining relationships with qualified treatment centers who will be treating the patients who receive ZEVASKYN ® ;

our manufacturing capabilities and supply chain operations in the coordination and delivery of ZEVASKYN ® to patients

at with qualified treatment centers;

pricing, contracting and reimbursement processes;

post-marketing commitments imposed by regulatory authorities, such as patient registries;

of sales, marketing and distribution support;

working capital and cash flows associated with product commercialization;

and retaining employees with relevant commercial, sales, and marketing expertise.

the patient demand is not as significant as we estimate, or the reasonably predicted population for treatment is narrowed by competition,

physician choice, or treatment guidelines, or for any other reason, we may not generate significant revenue from the sale of ZEVASKYN ® .

commercial success of ZEVASKYN ® will depend upon the extent of market acceptance by physicians, patients, payors, and

other stakeholders.

degree of market acceptance of ZEVASKYN ® depends on several factors, many of which are outside our control, including:

perceived clinical efficacy, safety profile and overall benefit-risk profile of ZEVASKYN ® compared to alternative

convenience and ease of administration, including patients’ willingness and ability to travel to qualified treatment centers

within our network;

the complexity of manufacturing ZEVASKYN ® , the perception or possibility that issues may continue to arise in the

supply of product, which could delay treatment;

ability to address any competing products and technological and market developments;

ability to educate physicians and other healthcare providers regarding the appropriate use of ZEVASKYN ® ;

access and affordability;

of ZEVASKYN ® in clinical guidelines or treatment pathways;

effectiveness of our sales and marketing efforts;

of coverage and reimbursement from government and other third-party payers.

ZEVASKYN ® does not achieve broad market acceptance, we may not generate sufficient revenues to achieve or sustain profitability.

revenues currently depend on sales of ZEVASKYN ® , which increases our exposure to risks associated with a single product.

ZEVASKYN ® is our only approved product, our revenues depend highly on its commercial success.

Any adverse development

affecting ZEVASKYN ® , including safety concerns, regulatory actions, supply disruptions, competitive pressures,

unfavorable clinical data, or changes in reimbursement, could materially and adversely affect our business, financial condition,

cash flow, and results of operations.

We do not expect to have additional commercial products in the near term, and we may not be

able to successfully develop or acquire additional products.

may encounter challenges with engaging or coordinating with qualified treatment centers needed for the ongoing commercialization of ZEVASKYN ® .

commercial strategy is to engage epidermolysis bullosa centers of excellence as qualified treatment centers for the collection of patient

biopsy and administration of the drug product once manufactured.

To ensure that the qualified treatment centers are prepared to collect

biopsies and to ship them to our product in accordance with our specifications and regulatory requirements, we train and conduct quality

assessments of each center as part of engagement.

These qualified treatment centers are the first and last points on our complex supply

chain to reach patients in the commercial setting.

We may encounter challenges or delays in engaging and interacting with our qualified

treatment centers, and such challenges could impact a qualified treatment centers’ willingness and ability to administer ZEVASKYN ® .

we may fail to manage the logistics of collecting and shipping patient material to the manufacturing site and shipping the drug product

back to the patient.

Logistical and shipment delays and problems caused by us, our third-party vendors, or other factors not in our control,

such as weather, could prevent or delay the manufacture of or delivery of ZEVASKYN ® to patients.

If our qualified treatment

centers fail to perform satisfactorily, we may suffer reputational, operational, or business harm.

Additionally, delays with treatment

at the qualified treatment centers due to, for instance, the patient’s schedule or health condition or such center’s capacity,

or due to the need for multiple biopsies, could result in a patient becoming medically ineligible for our treatment or selecting an alternative

treatment, the drug product becoming unusable, or loss of medical coverage, which would have a material adverse effect on commercial

These delays may also affect our relationship with our qualified treatment center network.

Any failure in our engagement or interaction

with our qualified treatment centers due to delays in treatment or complications related to manufacturing, among other things, may limit

patient access to our therapies and, accordingly, have a material adverse effect on our commercial forecasts and business.

we are required to maintain a complex chain of identity and chain of custody with respect to patient material as it moves through the

manufacturing process, from the qualified treatment center to the manufacturing facility, and back to the patient.

Failure to maintain

chain of identity and chain of custody could result in adverse patient outcomes, loss of product, or regulatory action.

manufacturing, testing and delivery of ZEVASKYN ® present significant challenges for us, and we may not be able to produce

ZEVASKYN ® at the quality, quantities, or timing needed to support commercialization.

manufacturing of ZEVASKYN ® is complex and requires significant expertise.

Even with the relevant experience and expertise,

manufacturing cell therapy products often leads to difficulties in production, particularly in scaling out and validating initial production,

managing the transition from clinical manufacturing to commercial manufacturing, and ensuring that the product meets required specifications.

These problems include difficulties with production costs and yields, quality control, quality assurance testing, operator error, scarcity

of qualified manufacturing and quality control testing personnel, shortages of any production raw materials as well as compliance with

strictly enforced federal, state and foreign regulations.

are susceptible to production interruptions that may impede our ability to manufacture cell and gene therapy products and produce an

adequate product supply to support commercialization of ZEVASKYN ® .

Several factors could cause production interruptions,

including equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, public health emergencies,

disruption in utility services, human error, or disruptions in the operations of our suppliers.

ZEVASKYN ® and product

candidates are biologic drugs requiring processing steps that are more complex than those required for most chemical pharmaceuticals.

We characterize our processes and products, and perform testing to ensure the safety, quality and efficacy of each product produced.

While we take significant measures to fully understand and characterize each product, the steps we take may not be sufficient to ensure

that a given lot will perform in the intended manner.

example, we manufactured a full batch of ZEVASKYN ® following patient biopsy collection in August 2025 that, despite being

a bonafide drug product, could not be released because a rapid sterility assay, mandated by the FDA as a release assay during the final

stage of the BLA review, initially yielded a false positive result for sterility.

Although we resumed biopsy collection in November 2025

upon completion of assay optimization and the necessary regulatory submission for its implementation, this false positive caused a manufacturing

rejection, which caused a delay in our launch of ZEVASKYN ® .

Additional or similar issues associated with manufacturing

and testing can have an adverse impact on our business, financial condition, cash flow, and results of operations.

are several risks specific to the manufacturing process for ZEVASKYN ® that require close attention.

As an autologous product

there are challenges associated with viability of biopsies as an incoming material.

Due to variables such as the fragility of RDEB skin

and site of the biopsy, initiation of autologous keratinocyte growth and expansion can be challenging or may be extended beyond the scheduled

Another concern during manufacturing is the slowing of cell proliferation, resulting in extended manufacturing time.

If pre-release

criteria are not met, the production process must be stopped, and a new biopsy must be obtained.

If release criteria are out of range,

epidermal sheets must be discarded and the manufacturing process must be repeated.

rely on third-party suppliers for our manufacturing of ZEVASKYN ® , and supply interruptions could disrupt commercialization.

reliance on third-party suppliers for the manufacturing of ZEVASKYN ® exposes us to risks, including manufacturing delays

or disruptions, quality control failures, regulatory compliance issues, capacity constraints, and financial instability of suppliers.

Any interruption in the manufacture or supply of ZEVASKYN ® could impair our ability to meet demand and adversely affect

our commercial efforts.

currently do not have a backup manufacturer to supply manufacturing material for ZEVASKYN ® .

An alternative manufacturer

would need to be qualified through regulatory filings, which could result in production delays.

Regulatory authorities also may require

additional clinical trials if a new supplier is relied upon for commercial production.

Accordingly, identifying and contracting with

alternative manufacturer or supplier would significantly affect our ability to meet demand for ZEVASKYN ® .

Post-marketing

requirements and ongoing regulatory obligations could restrict or delay commercialization.

FDA approval, we remain subject to ongoing regulatory obligations, including post-marketing requirements, pharmacovigilance reporting,

quality system regulation compliance, and potential FDA inspections.

If we fail to comply with these requirements, the FDA may impose

sanctions, including warning letters or other enforcement actions, fines, product recalls or withdrawals, restrictions on marketing,

or suspension or withdrawal of approval.

In addition, previously unknown adverse events may be identified after broader commercial use,

which could result in changes to the labeling of ZEVASKYN ® , restrictions on its use, or withdrawal from the market.

commercialization efforts may expose us to increased risk of product liability and other litigation.

commercialization of ZEVASKYN ® exposes us to the risk of product liability claims and other litigation, including claims

related to adverse events, off-label promotion, false advertising, pricing, or reimbursement practices.

Even if we are successful in

defending ourselves against such claims, litigation could be costly, time-consuming, and damaging to our reputation.

If we are unable

to obtain or maintain adequate insurance coverage on acceptable terms, our financial condition could be adversely affected.

commercial success depends in part on our ability to protect and enforce our intellectual property rights relating to ZEVASKYN ® .

ability to maintain market exclusivity for ZEVASKYN ® depends on our intellectual property portfolio and regulatory exclusivities.

If our patents are challenged, invalidated, circumvented or expire earlier than expected, or if we are unable to enforce our intellectual

property rights effectively, competitors may develop and commercialize competing products more rapidly than anticipated, which could

significantly harm our commercial prospects.

products and product candidates may face competition sooner than anticipated.

12-year exclusivity granted to ZEVASKYN ® may not adequately protect us from biosimilar or other product competition.

may also be changes in regulatory exclusivity policies.

For example, there have been efforts to decrease the biologic period of exclusivity

to a shorter timeframe.

Future proposed budgets, international trade agreements and other arrangements or proposals may affect periods

of exclusivity.

If another company pursues approval of a product that is biosimilar to ZEVASKYN ® or any other biologic

product for which we receive FDA approval, we may need to pursue costly and time-consuming patent infringement actions, which may include

certain statutorily specified regulatory steps before an infringement action may be brought.

Biosimilar applicants may also be able to

bring an action for declaratory judgment concerning our patents, requiring that we spend time and money defending the action.

related to manufacturing

could experience production problems in our manufacturing facilities that result in delays in our development or commercialization programs

or otherwise adversely affect our business.

are susceptible to production interruptions that may impede our ability to manufacture cell and gene therapy products and produce an

adequate product supply to support commercialization or clinical trials.

Several factors could cause production interruptions, including

equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, public health emergencies,

disruption in utility services, human error, or disruptions in the operations of our suppliers.

Our product candidates are biologic drugs

requiring processing steps that are more complex than those required for most chemical pharmaceuticals.

We characterize our processes

and products, and perform testing to ensure the safety, quality and efficacy of each product produced.

While we take significant measures

to fully understand and characterize each product, the steps we take may not be sufficient to ensure that a given lot will perform in

the intended manner.

employ multiple steps to control our manufacturing process to ensure that the products or product candidate is made strictly and consistently

in compliance with the process.

Problems with the manufacturing process, including even minor deviations from the normal process, could

result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims, or insufficient

We may encounter problems achieving adequate quantities and quality of clinical grade materials that meet FDA, EU or other

applicable standards or specifications with consistent and acceptable production yields and costs.

In addition, the FDA, EMA and other

foreign regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing

the results of applicable tests at any time.

Under some circumstances, the FDA, EMA or other foreign regulatory authorities may require

that we not distribute a lot until the agency authorizes its release.

Slight deviations in the manufacturing process, including those

affecting quality attributes and stability, may result in unacceptable changes in the product that could result in lot failures or product

recalls for approved and marketed products.

failures or product recalls could cause us to delay sales, product launches, or clinical trials, which could be costly to us and

otherwise harm our business, financial condition, cash flow, results of operations and prospects.

We also may encounter problems

hiring and retaining the experienced scientific, quality control and manufacturing personnel needed to operate our manufacturing

process, which could result in delays in our production or difficulties in maintaining compliance with applicable regulatory

requirements.

Any problems in our manufacturing process or facilities could make us a less attractive collaborator for potential

partners, including qualified treatment centers for ZEVASKYN ® , larger pharmaceutical companies, and academic research

institutions, which could limit our access to additional attractive development programs.

Problems in our manufacturing process

including in internal and external facilities providing supply necessary for manufacturing or challenges with procuring supplies,

such as due to global trade policies, also could restrict our ability to meet customer or clinical trial supply demand, and as well

as market demand for ZEVASKYN ® or any future product candidates for which we may receive marketing

we or any of our vendors, contract laboratories or suppliers are found to be out of compliance with cGMP or other regulations, we may

experience delays or disruptions in manufacturing while we implement corrective actions or work with these third parties to remedy the

violation or while we work to identify suitable replacement vendors, contract laboratories or suppliers.

maintain regulatory approval for commercial manufacturing, we will need to continue to ensure that all our processes, methods and equipment

are compliant with cGMP and perform extensive audits of vendors, contract laboratories and suppliers.

The cGMP requirements govern quality

control of the manufacturing process and documentation policies and procedures.

Complying with cGMP requires us to spend time, money

and effort in production, record keeping and quality control to assure that the product meets applicable specifications and other requirements.

If we fail to comply with these requirements, we will be subject to possible regulatory action and may not be permitted to sell ZEVASKYN ® .

may rely on third parties to conduct aspects of our product manufacturing, and these third parties may not perform satisfactorily.

also may rely on third parties to produce certain materials for our product candidates and, therefore, we cannot control every aspect

of their activities.

and our third-party suppliers, laboratories, and manufacturers may be unable to comply with our specifications, cGMP requirements and

with other FDA, state, and foreign regulatory requirements.

control of production processes can lead to the introduction of adventitious agents or other contaminants, or to inadvertent changes

in the properties or stability of a product candidate that may not be detectable in final product testing.

If we or our contract manufacturers

cannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or other

regulatory authorities, we or our contract manufacturers will not be able to secure or maintain regulatory approval for such manufacturing

Any such deviations may also require remedial measures that may be costly and/or time-consuming for us or a third party to

implement and may include the temporary or permanent suspension of a clinical trial or commercial sales or the temporary or permanent

closure of a facility.

Any such remedial measures imposed upon or by us or third parties with whom we contract could materially harm

our business.

Any delays in obtaining products or product candidates that comply with the applicable regulatory requirements may result

in delays to our sales of ZEVASKYN ® as well as clinical trials, product approvals, and commercialization for our other

product candidates.

It may also require that we conduct additional studies.

any inspection or audit by regulatory authorities identifies a failure to comply with applicable regulations, or if a violation of product

specifications or applicable regulations occurs independent of such an inspection or audit, the relevant regulatory authority may require

remedial measures that may be costly or time-consuming to implement and that may include the temporary or permanent suspension of a clinical

trial or commercial sales or the temporary or permanent closure of a manufacturing facility.

authorities may inspect or audit the manufacturing facilities for our products and product candidates at any time.

Any such remedial

measures imposed upon us could materially harm our business, financial condition, cash flow, results of operations and prospects.

we fail to comply with applicable cGMP regulations, FDA and foreign regulatory authorities could impose regulatory sanctions

including, among other things, refusal to approve a pending application for a new product candidate or suspension or revocation of a

pre-existing approval.

Such an occurrence may cause our business, financial condition, cash flow, results of operations and

prospects to be materially harmed.

Additionally, if supply from our facility is interrupted, there could be a significant disruption

in commercial supply of any of our product candidates for which we obtain marketing approval, and in clinical supply for our product

we, our collaborators, or any third-party manufacturers we engage fail to comply with environmental, health and safety laws and regulations,

we could become subject to fines or penalties or incur costs that could harm our business.

our collaborators, and any third-party manufacturers we engage are subject to numerous environmental, health and safety laws and regulations,

including those governing laboratory procedures and the generation, handling, use, storage, treatment, manufacture, transportation and

disposal of, and exposure to, hazardous materials and wastes, as well as laws and regulations relating to occupational health and safety.

Our operations involve the use of hazardous and flammable materials, including chemicals and biologic materials.

Our operations also

produce hazardous waste products.

We generally contract with third parties for the disposal of these materials and wastes.

eliminate the risk of contamination or injury from these materials.

In the event of contamination or injury resulting from our use of

hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.

We also could incur

significant costs associated with civil or criminal fines and penalties.

we maintain general liability insurance and workers’ compensation insurance for certain costs and expenses that we may incur due

to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide

adequate coverage against potential liabilities.

We do not maintain insurance for environmental liability or toxic tort claims that may

be asserted against us in connection with our storage or disposal of biologic and hazardous materials.

addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations,

which have tended to become more stringent over time.

These current or future laws and regulations may impair our research, development,

or production efforts.

Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions

or liabilities, which could harm our business, financial condition, cash flow, results of operations and prospects.

may be unable to successfully develop, market, or commercialize our products or our product candidates without establishing new relationships

and maintaining current relationships and our ability to successfully commercialize, and market our product candidates could be limited

if a number of these existing relationships are terminated.

strategy for the research, development and commercialization of our potential pharmaceutical products may require us to enter into various

arrangements with corporate and academic collaborators, licensors, licensees and others, in addition to our existing relationships with

other parties.

Specifically, we may seek to joint venture, sublicense or enter into other marketing arrangements with parties that have

an established marketing capability, or we may choose to pursue the commercialization of such products on our own.

We may, however, be

unable to establish such additional collaborative arrangements, license agreements, or marketing agreements as we may deem necessary

to develop, commercialize and market our potential pharmaceutical products on acceptable terms.

Furthermore, since we maintain and establish

arrangements or relationships with third parties, our business may depend upon the successful performance by these third parties of their

responsibilities under those arrangements and relationships.

If we are unwilling or unable to perform our obligations under any license

or collaboration arrangement, a third party may have the right to terminate such arrangement with us.

are subject to extensive governmental regulation, which increases our cost of doing business and may affect our ability to commercialize

any new products that we may develop.

FDA and comparable agencies in foreign countries impose substantial requirements upon the introduction of pharmaceutical products through

lengthy and detailed laboratory, preclinical and clinical testing procedures and other costly and time-consuming procedures to establish

safety and efficacy.

All of our drugs and drug candidates require receipt and maintenance of governmental approvals for commercialization.

Preclinical and clinical trials and manufacturing of our drug candidates will be subject to the rigorous testing and approval processes

of the FDA and corresponding foreign regulatory authorities.

Satisfaction of these requirements typically takes a significant number

of years and can vary substantially based upon the type, complexity, and novelty of the product.

to the time-consuming and uncertain nature of the drug candidate development process and the governmental approval process described

above, we cannot be certain when we, independently or with our collaborative partners, might submit a BLA for FDA or other regulatory

Further, our ability to commence and/or complete development projects will be subject to our ability to raise enough funds to

pay for the development costs of these projects.

Government regulation also affects the manufacturing and marketing of pharmaceutical

Government regulations may delay marketing of our potential drugs for a considerable or indefinite period of time, impose costly

procedural requirements upon our activities and furnish a competitive advantage to larger companies or companies more experienced in

regulatory affairs.

Delays in obtaining governmental regulatory approval could adversely affect our marketing as well as our ability

to generate significant revenues from commercial sales.

drug candidates may not receive FDA or other regulatory approvals on a timely basis or at all.

Moreover, if regulatory approval of a

drug candidate is granted, such approval may impose limitations on the indicated use for which such drug may be marketed.

obtain initial regulatory approvals for our drug candidates, our drugs and our manufacturing facilities would be subject to continual

review and periodic inspection, and later discovery of previously unknown problems with a drug, manufacturer or facility may result in

restrictions on the marketing or manufacture of such drug, including withdrawal of the drug from the market.

The FDA and other regulatory

authorities stringently apply regulatory standards and failure to comply with regulatory standards can, among other things, result in

fines, denial or withdrawal of regulatory approvals, product recalls or seizures, operating restrictions, and criminal prosecution.

may incur substantial product liability expenses due to the use or misuse of our products for which we may be unable to obtain insurance

business exposes us to potential liability risks that are inherent in the testing, manufacturing, and marketing of pharmaceutical products.

These risks expand with commercialization and we may face substantial liability for damages in the event of adverse side effects, including

injury or death, or product defects identified with any of our products that are marketed to the public or product candidates that are

used in clinical tests.

Product liability actions can also have regulatory consequences, including the withdrawal of clinical trial participants

and potential termination of clinical trial sites or entire clinical programs, and the initiation of investigations, and enforcement

actions by regulators, product recalls, withdrawals, revocation of approvals, labeling, marketing, or promotional restrictions.

liability insurance for the biotechnology industry is generally expensive, if available at all, and as a result, we may be unable to

obtain insurance coverage at acceptable costs or in a sufficient amount in the future, if at all.

We may be unable to satisfy any claims

for which we may be held liable as a result of the use or misuse of products which we developed, manufactured, or sold and any such product

liability claim could adversely affect our business, operating results, or financial condition.

competition may limit our ability to successfully develop and market commercial products.

biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change.

competitors in the U.S.

and elsewhere are numerous and include, among others, major multinational pharmaceutical and chemical companies,

specialized biotechnology firms and universities and other research institutions.

Many of our competitors have and employ greater financial

and other resources, including larger research and development, marketing, and manufacturing organizations.

As a result, our competitors

may successfully develop technologies and drugs that are more effective or less costly than any that we have or are developing, which

could render our technology and future products obsolete and noncompetitive.

addition, some of our competitors have greater experience than we do in conducting preclinical and clinical trials and obtaining FDA

and other regulatory approvals.

Accordingly, our competitors may succeed in obtaining FDA or other regulatory approvals for drug candidates

more rapidly than we can.

Companies that complete clinical trials, obtain required regulatory agency approvals, and commence commercial

sale of their drugs before their competitors may achieve a significant competitive advantage.

Drugs resulting from our research and development

efforts or from our joint efforts with collaborative partners therefore may not be commercially competitive with our competitors’

existing products or products under development.

reform measures could hinder or prevent our product candidates’ commercial success.

government-adopted reform measures could adversely affect the pricing of healthcare products and services in the U.S.

or internationally

and the amount of reimbursement available from governmental agencies or other third-party payors.

The continuing efforts of the U.S.

and foreign governments, insurance companies, managed care organizations and other payors of health care services to contain or reduce

health care costs may adversely affect our ability to set prices for our products which we believe are fair, restrict coverage and reimbursement,

or require payment of increased rebates and our ability to generate revenues and achieve and maintain profitability.

laws, regulations and judicial decisions, or new interpretations of existing laws, regulations, and decisions, which relate to healthcare

availability, methods of delivery or payment for products and services, or sales, marketing, or pricing, may limit our potential revenue,

and we may need to revise our research and development programs.

The pricing and reimbursement environment may change in the future and

become more challenging due to several reasons including new healthcare legislation or regulation and fiscal challenges faced by government

health administration authorities.

Specifically, in both the U.S.

and some foreign jurisdictions, there have been a number of legislative

and regulatory proposals to change the health care system in ways that could affect our ability to sell our products profitably.

also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative

or executive action, either in the United States or abroad.

may be subject, directly or indirectly, to federal, state, and foreign healthcare laws and regulations, including fraud and abuse laws,

false claims laws and health information privacy and security laws.

If we are unable to comply, or have not fully complied, with such

laws, we could face substantial penalties.

we obtain FDA approval for any of our product candidates and begin commercializing those products in the United States, our operations

will be directly, or indirectly through our prescribers, customers, and purchasers, subject to various federal and state laws and regulations,

including, without limitation, the federal Anti-Kickback Statute, the federal civil and criminal false claims act, the civil monetary

penalties statute, HIPAA, and the Physician Payments Sunshine Act and regulations.

These laws are further described in the U.S.

Products Development Process section of this annual report.

These laws will impact, among other things, our proposed sales, marketing,

and educational programs.

In addition, we may be subject to data privacy laws by both the federal government and the states in which

we conduct our business.

Failure to comply with these laws could result in penalties, including civil and criminal penalties, damages,

fines, the curtailment or restructuring of operations, the exclusion from participation in federal and state healthcare programs, debarment

from government contracting or refusal of orders under existing contracts, corporate integrity agreements or consent decrees, disgorgement,

contractual damages, reputational harm, diminished profits and future earnings, and imprisonment.

Furthermore, efforts to ensure that

business activities and business arrangements comply with applicable healthcare laws and regulations can be costly.

Comparable laws and

regulations apply internationally.

are subject to extensive laws and regulations related to data privacy, and our failure to comply with these laws and regulations could

harm our business.

foreign, federal, and state laws and regulations govern collection, dissemination, use and confidentiality of personally identifiable

health information, including state privacy and confidentiality laws (including state laws requiring disclosure of breaches), HIPAA and

the European Union’s General Data Protection Regulation (“GDPR”).

These laws and regulations are increasing in complexity

and number and may change frequently and sometimes conflict.

establishes a set of national privacy and security standards for the protection of individually identifiable health information, including

protected health information (“PHI”), by health plans, certain healthcare clearinghouses and healthcare providers that submit

certain covered transactions electronically, or covered entities, and their “business associates,” which are persons or entities

that perform certain services for, or on behalf of, a covered entity that involve creating, receiving, maintaining or transmitting PHI.

While we are not currently a covered entity or business associate under HIPAA, we may receive identifiable information from these entities.

Failure to protect this information properly could subject us to HIPAA’s criminal penalties, which may include fines up to $250,000

per violation and/or imprisonment.

imposes numerous requirements on entities that process personal data in the context of an establishment in the European Economic Area

(“EEA”) or that process the personal data of data subjects who are located in the EEA.

These requirements include, for example,

establishing a basis for processing, providing notice to data subjects, developing procedures to vindicate expanded data subject rights,

implementing appropriate technical and organizational measures to safeguard personal data, and complying with restrictions on the cross-border

transfer of personal data from the EEA to countries that the European Union does not consider to have in place adequate data protection

legislation, such as the United States.

GDPR additionally establishes heightened obligations for entities that process “special

categories” of personal data, such as health data.

Nearly all clinical trials involve the processing of these “special categories”

of personal data, and thus processing of personal data collected during the course of clinical trials is subject to heightened protections

California adopted the California Consumer Privacy Act of 2018 (“CCPA”), which went into effect in January 2020.

has been characterized as the first “GDPR-like” privacy statute to be enacted in the United States because it mirrors a number

of the key provisions of the GDPR.

The CCPA establishes a new privacy framework for covered businesses in the State of California, by

creating an expanded definition of personal information, establishing new data privacy rights for consumers imposing special rules on

the collection of consumer data from minors, and creating a new and potentially severe statutory damages framework for violations of

the CCPA and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches.

legislative and regulatory landscape for privacy and data security continues to evolve, and there has been an increasing focus on privacy

and data security issues which may affect our business.

Failure to comply with current and future laws and regulations could result in

government enforcement actions (including the imposition of significant penalties), criminal and/or civil liability for us and our officers

and directors, private litigation and/or adverse publicity that negatively affects our business.

toward managed health care, health technology assessment, and downward price pressures on medical products and services may limit our

ability to profitably sell any drugs that we may develop.

prices for pharmaceutical products or reduced profitability may result from:

third-party-payors’

increasing challenges to the prices charged for medical products and services, including by limiting coverage and reimbursement and

requiring payment of increased manufacturer rebates;

trend toward managed health care in the U.S.

and the concurrent growth of Health Maintenance Organizations (“HMOs”) and

similar organizations that can control or significantly influence the purchase of healthcare services and products;

federal, and foreign legislative proposals to control drug prices, reform healthcare or reduce government insurance programs.

cost containment measures that healthcare providers are instituting, including practice protocols and guidelines and clinical pathways,

and the effect of any healthcare reform, could limit our ability to profitably sell any drugs that we may successfully develop.

any future legislation or regulation, if any, relating to the healthcare industry or third-party coverage and reimbursement, may cause

our business to suffer.

Changes in and uncertainty surrounding U.S.

trade policy could have

a material adverse impact on our business, financial condition, cash flow, and results of operations.

The ongoing trade tensions between the U.S.

jurisdictions have resulted in multiple rounds of tariffs and anticipated tariffs affecting a wide range of products and jurisdictions

and has indicated an intention to continue developing new trade policies, including with respect to the pharmaceutical industry.

certain foreign governments have announced or implemented retaliatory tariffs and other protectionist measures.

These developments have

created a dynamic and unpredictable trade landscape, which may adversely affect our business, results of operations, financial conditions

and prospects.

Current or future tariffs or other trade restrictions

may result in increased research and development expenses, including with respect to increased costs associated with raw materials, laboratory

equipment, and research materials and components.

In addition, such tariffs may increase our supply chain complexity and could also potentially

disrupt our existing supply chain.

Unlike consumer goods, pharmaceuticals face unique regulatory constraints that make rapid supply chain

adjustments particularly difficult and costly.

Tariffs and trade restrictions affecting the import of materials necessary for manufacturing

or clinical trials could result in manufacturing delays for ZEVASKYN ® or hinder our ability to establish cost-effective

production capabilities, as well as in delays to our development timelines for our pre-clinical product candidates, negatively affecting

our growth prospects.

Increased development costs and extended development timelines could place us at a competitive disadvantage compared

to companies operating in regions with more favorable trade relationships and could reduce investor confidence, negatively impacting our

ability to secure additional financing on favorable terms or at all.

Tariffs and trade restrictions.

If we are unable to obtain necessary raw materials

or product components in sufficient quantity and in a timely manner due to disruptions in the global supply chain caused by macroeconomic

events and conditions, the development, testing and clinical trials of our product candidates may be delayed or infeasible, and regulatory

approval or commercial launch of any resulting product may be delayed or not obtained, which could significantly harm our business.

The complexity of announced or future tariffs may

also increase the risk that we or our customers or suppliers may be subject to civil or criminal enforcement actions in the United States

or foreign jurisdictions related to compliance with trade regulations.

Foreign governments may also adopt non-tariff measures, such as

procurement preferences or informal disincentives to engage with, purchase from or invest in U.S.

entities, which may limit our ability

to compete internationally and attract non-U.S.

investment, employees, customers and suppliers.

Foreign governments may also take other

retaliatory actions against U.S.

entities, such as decreased intellectual property protection, increased enforcement actions, or delays

in regulatory approvals, which may result in heightened international legal and operational risks.

In addition, the United States and

other governments have imposed and may continue to impose additional sanctions, such as trade restrictions or trade barriers, which could

restrict us from doing business directly or indirectly in or with certain countries or parties and may impose additional costs and complexity

to our business.

related to the discovery and development of our product candidates

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have concentrated our therapeutic product research and development efforts on our cell and gene therapy platform, and our future success

depends on the successful development of this therapeutic approach.

There can be no assurance that any development problems we experience

in the future related to our cell and gene therapy platform will not cause significant delays or unanticipated costs, or that such development

problems can be solved.

We may also experience delays in developing a sustainable, reproducible and commercial-scale manufacturing process

or transferring that process to commercial partners, which may prevent us from completing our clinical studies or commercializing our

products on a timely or profitable basis, if at all.

depends in part on the successful development of this therapeutic approach.

There can be no assurance that any development problems we

experience in the future related to our cell and gene therapy platform will not cause significant delays or unanticipated costs, or that

such development problems can be solved.

We may also experience delays in developing a sustainable, reproducible and commercial-scale

manufacturing process or transferring that process to commercial partners, which may prevent us from completing our clinical studies

or commercializing our products on a timely or profitable basis, if at all.

addition, the clinical study requirements of the FDA, the EMA, and other regulatory agencies and the criteria these regulators use to

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and market of the potential products.

The regulatory approval process for novel product candidates such as ours can be more expensive

and take longer than for other, better known or more extensively studied pharmaceutical or other product candidates.

Given that only

a few gene therapy products have been approved in the Western world, it is not possible to predict how long it will take or how much

it will cost to obtain regulatory approvals for our product candidates in the United States, the EU or other jurisdictions.

by the EMA and the European Commission may not be indicative of what the FDA may require for approval.

The regulatory approval process for novel product candidates can be more expensive and take longer

than for other, better known or more extensively studied pharmaceutical or other product candidates.

Given that only a few gene therapy

products have been approved in the Western world, it is not possible to predict how long it will take or how much it will cost to obtain

regulatory approvals for our product candidates in the United States, the EU or other jurisdictions.

Approvals by the EMA and the European

Commission may not be indicative of what the FDA may require for approval.

ability to successfully develop and commercialize our product candidates will substantially depend upon the availability of reimbursement

funds for the costs of the resulting drugs and related treatments.

acceptance and sales of our product candidates may depend on coverage and reimbursement policies and health care reform measures.

about formulary coverage as well as levels at which government authorities and third-party payors, such as private health insurers and

health maintenance organizations, reimburse patients for the price they pay for our products as well as levels at which these payors

pay directly for our products, where applicable, could affect whether we are able to commercialize these products.

We cannot be sure

that reimbursement will be available for any of these products.

Also, we cannot be sure that coverage or reimbursement amounts will not

reduce the demand for, or the price of, our products.

We have not commenced efforts to have our product candidates reimbursed by the

government or third-party payors.

If coverage and reimbursement are not available or are available only at limited levels, we may not

be able to commercialize our product candidates.

In recent years, officials have made numerous proposals to change the health care system

These proposals include measures that would limit or prohibit payments for certain medical treatments or subject the pricing

of drugs to government control.

In addition, in many foreign countries, particularly the countries of the European Union, the pricing

of prescription drugs is subject to government control.

If our products are or become subject to government regulation that limits or

prohibits payment for our products, or that subjects the price of our products to governmental control, we may not be able to generate

revenue, attain profitability or commercialize our products.

a result of legislative proposals and the trend towards managed health care in the U.S., third-party payors are increasingly attempting

to contain health care costs by limiting both coverage and the level of reimbursement of new drugs.

They may also impose strict prior

authorization requirements and/or refuse to provide any coverage of uses of approved products for medical indications other than those

for which the FDA has granted market approvals.

As a result, significant uncertainty exists as to whether and how much third-party payors

will reimburse patients for their use of newly approved drugs, which in turn will put pressure on the pricing of drugs.

drug candidates are subject to the risks of failure inherent in the development of pharmaceutical products based on new technologies,

and our failure to develop safe and commercially viable drugs would severely limit our ability to become profitable or to achieve significant

may be unable to successfully commercialize our product candidates if some or all of our product candidates are found to be unsafe or

ineffective or otherwise fail to meet applicable regulatory standards or receive necessary regulatory clearances.

Additionally, our product

candidates may be deemed too difficult to develop into commercially viable drugs.

We may encounter difficulty in manufacturing or marketing

our product candidates on a large scale, and proprietary rights of third parties may preclude us from marketing our drug candidates.

Moreover, competitors may be able to market superior or equivalent drugs successfully.

Failure to successfully commercialize our product

candidates would have a material adverse effect on our business.

public perception of gene therapy products may negatively affect demand for, or regulatory approval of, our product candidates.

product candidates involve altering genes, and the clinical and commercial success of our product candidates will depend in part on public

acceptance of the use of gene altering therapies for the treatment of genetic diseases.

Public attitude may be influenced by claims that

gene therapy is unsafe, unethical, or immoral, and, as a result, our product candidates may not gain the acceptance of the public or

the medical community.

Negative public reaction to gene therapy in general could result in greater government regulation and stricter

labeling requirements of gene therapy products, including any of our product candidates, and could cause a decrease in the demand for

any products we may develop.

Adverse public opinion also may adversely affect our ability to enroll patients in clinical trials.

market may not accept any pharmaceutical products that we develop, thereby materially impairing our ability to generate revenue from

such products.

product candidates that we are attempting to develop may compete with drugs manufactured and marketed by other pharmaceutical companies.

The degree of market acceptance of any drugs developed by us will depend on a number of factors, including the establishment and demonstration

of the clinical efficacy and safety of our drug candidates, the potential advantage of our drug candidates over existing therapies and

the reimbursement policies of government and third-party payors.

Physicians, patients, or the medical community in general may not accept

or use any drugs that we may develop independently or with our collaborative partners and if they do not, our business could suffer.

requirements governing cell and gene therapy products have evolved and may continue to change in the future.

For example, the FDA has

established the Office Tissues and Advanced Therapies within CBER to consolidate the review of gene therapy and related products, and

the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its review.

requirements in the United States and in other jurisdictions governing gene therapy products have changed frequently and will continue

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The FDA and EMA have each expressed interest in further regulating gene

For example, the FDA has established the Office Tissues and Advanced Therapies within CBER to consolidate the review of gene

For example, the FDA has established the Office of Tissues and Advanced Therapies within CBER to consolidate the review of gene

therapy and related products, and the Cellular, Tissue and Gene Therapies Advisory Committee to advise CBER on its review.

Over the last

few years, FDA, through CBER, has provided significant guidance regarding the development of gene therapies.

Additionally, the EMA advocates

a risk-based approach to the development of a gene therapy product.

Agencies at both the federal and state level in the United States,

as well as the U.S.

congressional committees and other governments or governing agencies, have also expressed interest in further regulating

the biotechnology industry.

few years, the FDA, through CBER, has provided significant guidance regarding the development of gene therapies.

Additionally, the EMA

advocates a risk-based approach to the development of a gene therapy product.

Agencies at both the federal and state level in the United

States, as well as the U.S.

congressional committees and other governments or governing agencies, have also expressed interest in further

regulating the biotechnology industry.

Such action may delay or prevent commercialization of some, or all, of our product candidates.

These regulatory

review agencies, committees and advisory groups and the new requirements and guidelines they promulgate may lengthen the regulatory review

process, require us to perform additional or larger studies, increase our development costs, lead to changes in regulatory positions

and interpretations, delay or prevent approval and commercialization of these treatment candidates or lead to significant post-approval

studies, limitations, or restrictions.

As we advance our product candidates, we will be required to consult with these regulatory and

advisory groups and comply with applicable requirements and guidelines.

If we fail to do so, we may be required to delay or discontinue

development of our product candidates.

Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval necessary

to bring a potential product to market could decrease our ability to generate sufficient product revenue to maintain our business.

These regulatory review agencies, committees and advisory groups and the new requirements and guidelines they promulgate may lengthen

the regulatory review process, require us to perform additional or larger studies, increase our development costs, lead to changes in

regulatory positions and interpretations, delay or prevent approval and commercialization of these treatment candidates or lead to significant

post-approval studies, limitations, or restrictions.

As we advance our product candidates, we will be required to consult with these

regulatory and advisory groups and comply with applicable requirements and guidelines.

If we fail to do so, we may be required to delay

or discontinue development of our product candidates.

Delay or failure to obtain, or unexpected costs in obtaining, the regulatory approval

necessary to bring a potential product to market could decrease our ability to generate sufficient product revenue to maintain our business.

may encounter substantial delays in our clinical studies, such as clinical holds, or we may fail to demonstrate safety and efficacy to

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and uncertain as to outcome.

This is especially true for rare and/or complicated diseases.

This is especially true for rare or complicated diseases.

We cannot guarantee that any clinical studies

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of our product candidates and our ability to generate revenue, which would have an adverse effect on our business.

For example, in September

2019, we received a clinical hold letter in connection with our phase 3 clinical trial for pz-cel stating that the FDA would not provide

approval for us to begin our planned phase 3 clinical trial for pz-cel until we submitted additional data points on transport stability

of pz-cel to clinical sites.

Although the FDA removed the clinical hold in December 2019 and provided clearance for us to proceed with

our planned phase 3 clinical trial, we may encounter similar delays in our clinical studies in the future.

delays relating to any preclinical or clinical trials also could shorten any periods during which we may have the exclusive right to

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If any of the foregoing were to occur,

our business, financial condition, results of operations, and prospects will be materially harmed.

our business, financial condition, cash flow, results of operations, and prospects will be materially harmed.

may find it difficult to enroll patients in our clinical studies, which could delay or prevent clinical studies of our product candidates.

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of our technology or termination of the clinical studies altogether.

may not be able to identify, recruit or enroll a sufficient number of patients, or those with required or desired characteristics to

achieve diversity in a study, to complete our clinical studies in a timely manner.

may not be able to identify, recruit or enroll enough patients, or those with required or desired characteristics to achieve diversity

in a study, to complete our clinical studies in a timely manner.

Patient enrollment is affected by factors including:

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the ability to establish or manage relationships with treatment centers, contract research organizations and physicians.

we have difficulty enrolling a sufficient number of patients to conduct our clinical studies as planned our development costs may increase,

the time for completion of clinical trials may increase, we may need to delay, limit or terminate ongoing or planned clinical studies,

any of which would have an adverse effect on our business.

we have difficulty enrolling enough patients to conduct our clinical studies as planned our development costs may increase, the time

for completion of clinical trials may increase, we may need to delay, limit or terminate ongoing or planned clinical studies, any of

which would have an adverse effect on our business.

products or product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory

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not be eligible to receive priority review vouchers.

of our product candidates have received orphan drug designation from the FDA, there is no guarantee that we will be able to maintain

this designation, receive this designation for any of our other product candidates, or receive or maintain any corresponding benefits,

including periods of exclusivity.

orphan drug designation provides certain advantages, it neither shortens the development time or regulatory review time of a product

is no guarantee that we will be able to obtain or maintain orphan drug designation for our product candidates or receive or maintain

any corresponding benefits, including periods of exclusivity.

orphan drug designation provides certain advantages, it neither shortens the development time nor the regulatory review time of a product

candidate nor gives the product candidate any advantage in the regulatory review or approval process.

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a sufficient quantity of the product to meet the needs of patients with the rare disease or condition.

if we obtain orphan exclusivity for any of our current or future product candidates, that exclusivity may not effectively protect the

product from competition as different products can be approved for the same condition or products that are the same as ours can be approved

for different conditions.

Even after an orphan product is approved, the FDA or comparable foreign regulatory authorities can also subsequently

approve a product containing the same principal molecular features for the same condition if the FDA concludes that the later product

is clinically superior.

The FDA may further grant orphan drug designation to multiple sponsors for the same compound or active molecule

and for the same indication.

If another sponsor receives FDA or comparable foreign regulatory authority approval for such product before

we do, we would be prevented from launching our product for the orphan indication for a period of at least seven years unless we can

demonstrate clinical superiority.

FDA’s thinking around sameness with respect to gene therapies, and thus the circumstances when

clinical superiority would need to be shown, is evolving.

While the agency has issued guidance on the topic, certain decisions may need

to be made on a case by case basis, given the novelty of the technology.

Moreover, third-party payors may reimburse for products off-label

even if not indicated for the orphan condition.

if we obtain orphan exclusivity for any of our current or future product candidates, that exclusivity may not effectively protect

the product from competition as different products can be approved for the same condition or products that are the same as ours can

be approved for different conditions.

Even after an orphan product is approved, the FDA or comparable foreign regulatory authorities

can also subsequently approve a product containing the same principal molecular features for the same condition if the FDA concludes

that the later product is clinically superior.

The FDA may further grant orphan drug designation to multiple sponsors for the same

compound or active molecule and for the same indication.

If another sponsor receives FDA or comparable foreign regulatory authority

approval for such product before we do, we would be prevented from launching our product for the orphan indication for a period of

at least seven years unless we can demonstrate clinical superiority.

The FDA’s thinking around sameness with respect to gene

therapies, and thus the circumstances when clinical superiority would need to be shown, is evolving.

While the agency has issued

guidance on the topic, certain decisions may need to be made on a case by case basis, given the novelty of the technology.

third-party payors may reimburse for products off-label even if not indicated for the orphan condition.

if we obtain regulatory approval for a product candidate, our products will remain subject to regulatory scrutiny.

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compliance with post-approval regulations may have a negative effect on our operating results and financial condition.

Complete Response Letter related to our Biologics License Application for pz-cel for the treatment of patients with recessive dystrophic

epidermolysis bullosa may impair our ability to successfully commercialize pz-cel.

April 2024, we received a CRL related to our BLA for pz-cel for the treatment of patients with RDEB.

In the CRL, the FDA noted that

certain additional information needed to satisfy CMC requirements must be satisfactorily resolved before the application can be approved.

In August 2024, we completed a Type A Meeting with the FDA to discuss our forthcoming resubmission of our BLA and in October 2024,

we resubmitted our BLA.

The FDA notified the Company in November 2024 that the BLA was accepted for review, with an assigned PDUFA

target action date of April 29, 2025.

A delay in receiving approval of the BLA could shorten any periods during which we may have the

exclusive right to commercialize our pz-cel or allow our competitors to bring products to market before we do.

This may impair our ability

to successfully commercialize pz-cel.

If any of the foregoing were to occur, our business, financial condition, results of operations,

and prospects will be materially harmed.

related to manufacturing

could experience production problems in our manufacturing facilities that result in delays in our development or commercialization programs

or otherwise adversely affect our business.

are susceptible to production interruptions that may impede our ability to manufacture cell and gene therapy products and produce an

adequate product supply to support clinical trials and potentially future commercialization.

Several factors could cause production interruptions,

including equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, public health emergencies

such as the COVID-19 pandemic, disruption in utility services, human error, or disruptions in the operations of our suppliers.

and product candidates are biologic drugs requiring processing steps that are more complex than those required for most chemical pharmaceuticals.

We characterize our processes and products, and perform testing to ensure the safety, quality and efficacy of each product produced.

While we take significant measures to fully understand and characterize each product, the steps we take may not be sufficient to ensure

that a given lot will perform in the intended manner.

are several risks specific to the manufacturing process for pz-cel which require close attention.

As an autologous product there are

challenges associated with viability of biopsies as an incoming material.

Due to variables such as the fragility of RDEB skin and site

of the biopsy, initiation of autologous keratinocyte growth and expansion can be challenging or may be extended beyond the scheduled

Another concern during manufacturing is the slowing of cell proliferation, resulting in extended manufacturing time.

If pre-release

criteria are not met, the production process must be stopped, and a new biopsy must be obtained.

If release criteria are out of range,

epidermal sheets must be discarded and the manufacturing process must be repeated.

currently do not have a backup manufacturer to supply clinical trial material for pz-cel.

An alternative manufacturer would need to be

qualified, through regulatory filings, which could result in delays to our clinical trial timeline.

The regulatory authorities also may

require additional clinical trials if a new manufacturer is relied upon for commercial production.

Switching manufacturers may involve

substantial costs and could result in a delay in our desired clinical and commercial timelines.

we employ multiple steps to control our manufacturing process to assure that the products or product candidate is made strictly and consistently

in compliance with the process.

Problems with the manufacturing process, including even minor deviations from the normal process, could

result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims, or insufficient

We may encounter problems achieving adequate quantities and quality of clinical grade materials that meet FDA, EU or other

applicable standards or specifications with consistent and acceptable production yields and costs.

In addition, the FDA, EMA and other

foreign regulatory authorities may require us to submit samples of any lot of any approved product together with the protocols showing

the results of applicable tests at any time.

Under some circumstances, the FDA, EMA or other foreign regulatory authorities may require

that we not distribute a lot until the agency authorizes its release.

Slight deviations in the manufacturing process, including those

affecting quality attributes and stability, may result in unacceptable changes in the product that could result in lot failures or product

recalls for approved and marketed products.

failures or product recalls could cause us to delay product launches or clinical trials, which could be costly to us and otherwise harm

our business, financial condition, results of operations and prospects.

We also may encounter problems hiring and retaining the experienced

scientific, quality control and manufacturing personnel needed to operate our manufacturing process, which could result in delays in

our production or difficulties in maintaining compliance with applicable regulatory requirements.

Any problems in our manufacturing process

or facilities could make us a less attractive collaborator for potential partners, including larger pharmaceutical companies and academic

research institutions, which could limit our access to additional attractive development programs.

Problems in our manufacturing process

including in internal and external facilities providing supply necessary for manufacturing or challenges with procuring supplies, such

as due to global trade policies, also could restrict our ability to meet clinical trial supply demand, and eventually market demand for

any product candidates for which we may receive marketing approval.

Disruptions in our manufacturing process may delay or disrupt our

commercialization efforts.

we or any of our vendors, contract laboratories or suppliers are found to be out of compliance with cGMP, we may experience delays or

disruptions in manufacturing while we implement corrective actions or work with these third parties to remedy the violation or while

we work to identify suitable replacement vendors, contract laboratories or suppliers.

obtain regulatory approval for commercial manufacturing, we will need to continue to ensure that all of our processes, methods and equipment

are compliant with cGMP and perform extensive audits of vendors, contract laboratories and suppliers.

The cGMP requirements govern quality

control of the manufacturing process and documentation policies and procedures.

Complying with cGMP requires us to expend time, money

and effort in production, record keeping and quality control to assure that the product meets applicable specifications and other requirements.

If we fail to comply with these requirements, we would be subject to possible regulatory action and may not be permitted to sell any

products that we may develop.

may rely on third parties to conduct aspects of our product manufacturing, and these third parties may not perform satisfactorily.

may rely on third parties to produce certain materials for our product candidates and, therefore, we can control only certain aspects

of their activities.

and our third-party suppliers, laboratories, and manufacturers may be unable to comply with our specifications, cGMP requirements and

with other FDA, state, and foreign regulatory requirements.

Poor control of production processes can lead to the introduction of adventitious

agents or other contaminants, or to inadvertent changes in the properties or stability of a product candidate that may not be detectable

in final product testing.

If we or our contract manufacturers cannot successfully manufacture material that conforms to our specifications

and the strict regulatory requirements of the FDA or other regulatory authorities, we or our contract manufacturers will not be able

to secure or maintain regulatory approval for their manufacturing facilities.

Any such deviations may also require remedial measures

that may be costly and/or time-consuming for us or a third party to implement and may include the temporary or permanent suspension of

a clinical trial or commercial sales or the temporary or permanent closure of a facility.

Any such remedial measures imposed upon or

by us or third parties with whom we contract could materially harm our business.

Any delays in obtaining products or product candidates

that comply with the applicable regulatory requirements may result in delays to clinical trials, product approvals, and commercialization.

It may also require that we conduct additional studies.

have manufacturing agreements with third parties that provide for, among other things, production of product candidates for our current

and future early-stage clinical trials.

Under certain circumstances, the other party is entitled to terminate its arrangement with us.

If we need to enter into alternative arrangements, it could delay our product development activities.

Our reliance on third parties for

certain manufacturing activities will reduce our control over these activities but will not relieve us of our responsibility to ensure

compliance with all required regulations.

If a third party does not successfully carry out its contractual duties, meet expected deadlines

or manufacture our product candidates in accordance with regulatory requirements, or if there are disagreements between us and any such

third party, we will not be able to complete, or may be delayed in completing, the preclinical studies required to support future IND

submissions and the clinical trials required for approval of our product candidates.

In such instances, we may need to enter into an

appropriate replacement third-party relationship, which may not be readily available or on acceptable terms, which would cause additional

delay or increased expense prior to the approval of our product candidates and would thereby have a material adverse effect on our business,

financial condition, results of operations and prospects.

addition, if the FDA or a comparable foreign regulatory authority does not approve our or a third party’s facilities for the manufacture

of our product candidates or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities,

which would significantly impact our ability to develop, obtain and maintain regulatory approval for or market our product candidates,

Any new manufacturers would need to either obtain or develop the necessary manufacturing know-how, and obtain the necessary

equipment and materials, which may take substantial time and investment.

We must also receive FDA approval for the use of any new manufacturers

for commercial supply.

We may not succeed in our efforts to establish manufacturing relationships or other alternative arrangements for

any of our product candidates, components, and programs.

For example, our product candidates may compete with other products and product

candidates for access to manufacturing facilities.

There are a limited number of manufacturers that operate under cGMP regulations and

that are both capable of manufacturing for us and willing to do so.

manufacture of biologic products requires significant expertise and capital investment, including the development of advanced manufacturing

techniques and process controls.

Manufacturers of therapeutics often encounter difficulties in production, particularly in scaling up

initial production.

These problems include difficulties with production costs and yields, quality control, including stability of the

product candidate and quality assurance testing, shortages of qualified personnel, and compliance with strictly enforced federal, state,

and foreign regulations.

If we or our manufacturers were to encounter any of these difficulties and were unable to perform as agreed,

our ability to provide product candidates to patients in our clinical trials and for commercial use, if approved, would be jeopardized.

reliance on these third parties entails risks to which we would not be subject if we manufactured the product candidates ourselves, including:

control for certain aspects of manufacturing activities;

control over the protection of our trade secrets and know-how from misappropriation or inadvertent disclosure;

to negotiate manufacturing agreements with third parties under commercially reasonable terms;

on the third party for regulatory compliance and quality assurance;

or nonrenewal of manufacturing and service agreements with third parties in a manner or at a time that is costly or damaging to us;

to the operations of our third-party manufacturers and service providers caused by conditions unrelated to our business or operations,

including the bankruptcy of the manufacturer or service provider.

of these events could lead to clinical trial delays or failure to obtain regulatory approval or impact our ability to successfully commercialize

future product candidates.

Some of these events could be the basis for FDA action or action of equivalent competent authorities in foreign

jurisdictions, including injunction, recall, seizure or total or partial suspension of product manufacturing.

Failure to comply with

ongoing regulatory requirements could cause us to suspend production or put in place costly or time-consuming remedial measures.

any inspection or audit by regulatory authorities identifies a failure to comply with applicable regulations, or if a violation of product

specifications or applicable regulations occurs independent of such an inspection or audit, the relevant regulatory authority may require

remedial measures that may be costly or time-consuming to implement and that may include the temporary or permanent suspension of a clinical

trial or commercial sales or the temporary or permanent closure of a manufacturing facility.

authorities may inspect or audit the manufacturing facilities for our products and product candidates at any time.

Any such remedial

measures imposed upon us could materially harm our business, financial condition, results of operations and prospects.

If we fail to

comply with applicable cGMP regulations, FDA and foreign regulatory authorities could impose regulatory sanctions including, among other

things, refusal to approve a pending application for a new product candidate or suspension or revocation of a pre-existing approval.

Such an occurrence may cause our business, financial condition, results of operations and prospects to be materially harmed.

Disruptions at FDA and other government agencies,

such as those that may be caused by funding shortages, could hinder their ability to hire, retain or deploy key leadership and other personnel,

or otherwise prevent new or modified products from being developed, approved, or commercialized in a timely manner or at all, which could

negatively impact our business.

The ability of FDA to review

and approve new products can be affected by a variety of factors, including government budget and funding levels, statutory, regulatory,

and policy changes, FDA’s ability to hire and retain key personnel and accept the payment of user fees, and other events that may

otherwise affect FDA’s ability to perform routine functions.

Average review times at the agency have fluctuated in recent years

Disruptions at FDA and other agencies may also increase the time necessary to meet with and provide feedback to entities

developing drug products, review and/or approve our submissions, conduct inspections, issue regulatory guidance, or otherwise authorize

our actions requiring regulatory approval, which would adversely affect our business.

In addition, government funding of FDA and other

government agencies on which our operations may rely, including those that fund research and development activities, is subject to the

political process, which is inherently fluid and unpredictable.

For example, the executive branch recently established the Department

of Government Efficiency, which implemented a federal government hiring freeze and large-scale layoffs of current federal employees and

also announced additional efforts to reduce federal employee headcount and the size of the federal government.

It is unclear how these executive actions or other

potential actions by the executive branch will have an impact on the regulatory authorities that oversee our business.

These budgetary

pressures may reduce FDA’s ability to perform its responsibilities.

If a significant reorganization or reduction in FDA’s

workforce occurs, FDA’s budget is significantly reduced, or there are other disruptions at FDA and other agencies, more time may

be necessary for biological products, or biologics, or modifications to approved biologics to be reviewed and/or approved by necessary

government agencies, which could increase our costs and would adversely affect our business.

In addition, if the current government shutdown

continues, it could significantly impact the ability of FDA to timely review and process our regulatory submissions, which could have

a material adverse effect on our business.

For example, over the last several years, the United States government has shut down several

times and certain regulatory agencies, such as FDA, have had to furlough critical employees and stop critical activities.

Additionally,

if supply from our facility is interrupted, there could be a significant disruption in commercial supply of any of our product candidates

for which we obtain marketing approval, and in clinical supply for our product candidates.

we, our collaborators, or any third-party manufacturers we engage fail to comply with environmental, health and safety laws and regulations,

we could become subject to fines or penalties or incur costs that could harm our business.

our collaborators, and any third-party manufacturers we engage are subject to numerous environmental, health and safety laws and regulations,

including those governing laboratory procedures and the generation, handling, use, storage, treatment, manufacture, transportation and

disposal of, and exposure to, hazardous materials and wastes, as well as laws and regulations relating to occupational health and safety.

Our operations involve the use of hazardous and flammable materials, including chemicals and biologic materials.

Our operations also

produce hazardous waste products.

We generally contract with third parties for the disposal of these materials and wastes.

eliminate the risk of contamination or injury from these materials.

In the event of contamination or injury resulting from our use of

hazardous materials, we could be held liable for any resulting damages, and any liability could exceed our resources.

We also could incur

significant costs associated with civil or criminal fines and penalties.

we maintain general liability insurance and workers’ compensation insurance for certain costs and expenses that we may incur due

to injuries to our employees resulting from the use of hazardous materials or other work-related injuries, this insurance may not provide

adequate coverage against potential liabilities.

We do not maintain insurance for environmental liability or toxic tort claims that may

be asserted against us in connection with our storage or disposal of biologic and hazardous materials.

addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations,

which have tended to become more stringent over time.

These current or future laws and regulations may impair our research, development,

or production efforts.

Failure to comply with these laws and regulations also may result in substantial fines, penalties or other sanctions

or liabilities, which could harm our business, financial condition, results of operations and prospects.

widespread outbreak of an illness, communicable disease, or any other public health crisis could adversely affect our business, results

of operations and financial condition.

could be negatively impacted by the widespread outbreak of an illness, communicable disease, or any other public health crisis that results

in economic or trade disruptions, including the disruption of global supply chains.

The COVID-19 pandemic negatively impacted the economy

on a global, national, and local level, disrupted global supply chains, and created volatility and disruption of financial markets.

from governmental authorities and companies to reduce the spread of COVID-19 affected economic activity through various containment measures

including, among others, business closures, work stoppages, quarantine and work-from-home guidelines, limiting capacity at public spaces

and events, vaccination requirements, or restrictions of global and regional travel.

Another outbreak of an illness, a communicable disease,

or any other public health crisis, and any resulting impacts, such as an extended period of global supply chain and/or economic disruption,

labor shortages, or government-mandated actions in response to such public health crisis could materially affect our business, results

of operations, access to sources of liquidity, and financial condition.

Congress may introduce and ultimately pass healthcare-related legislation that could impact the drug approval process.

related to our reliance on third-parties

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our trade secrets would impair our competitive position and have an adverse impact on our business.

related to commercializing our product candidates

we do not obtain the necessary U.S.

or worldwide regulatory approvals to commercialize pz-cel, we will not be able to sell pz-cel.

we cannot obtain regulatory approval for pz-cel, we will not be able to generate revenue from this product candidate.

As a result, our

ability to generate revenue from product commercialization may be further delayed.

We cannot assure you that we will receive the approvals

necessary to commercialize pz-cel or any other product candidate we may develop in the future.

In order to obtain FDA approval of pz-cel

or any other product candidate requiring FDA approval, we must successfully complete an FDA BLA review.

Obtaining FDA approval of any

other product candidate generally requires significant research and testing, referred to as preclinical studies, as well as human tests,

referred to as clinical trials.

Satisfaction of the FDA’s regulatory requirements typically takes many years, depends upon the

type, complexity and novelty of the product candidate and requires substantial resources for research, development and testing.

predict whether our research and clinical approaches will result in products that the FDA considers safe for humans and effective for

indicated uses.

The FDA has substantial discretion in the product approval process and may require us to conduct additional preclinical

and clinical testing or to perform post-marketing studies.

The approval process may also be delayed by changes in government regulation,

future legislation or administrative action or changes in FDA policy that occur prior to or during our regulatory review.

in obtaining regulatory approvals may:

commercialization of, and our ability to derive product revenues from, pz-cel or any other product candidate;

costly procedures on us;

any competitive advantages that we may otherwise enjoy.

if we comply with all FDA requests, the FDA may ultimately reject our BLA.

In addition, the FDA could determine that we must test additional

subjects or require that we conduct further studies with more subjects.

We may never obtain regulatory approval for pz-cel, or any other

future potential product candidate.

Failure to obtain FDA approval of any of our product candidates will severely undermine our business

by leaving us without the ability to generate additional accretive revenues.

There is no guarantee that we will ever be able to develop

or acquire other product candidates.

In foreign jurisdictions, we must receive approval from the appropriate regulatory authorities before

we can commercialize any products or product candidates outside the U.S.

Foreign regulatory approval processes generally include all

of the risks and uncertainties associated with the FDA approval procedures described above.

We cannot assure you that we will receive

the approvals necessary to commercialize any product candidate for sale outside the U.S.

if we receive regulatory approval for pz-cel, our lead drug candidate, we may not be able to successfully commercialize the product and

the revenue that we generate from its sales, if any, may be limited.

approved for marketing, the commercial success of pz-cel will depend upon the product’s acceptance by the medical community, including

physicians, patients and healthcare payors.

The degree of market acceptance for our drug candidate will depend on a number of factors,

and perceived efficacy and safety of pz-cel;

convenience, dosing burden and ease of administration;

or perceived advantages or disadvantages over alternative treatments;

post-marketing commitments imposed by regulatory authorities, such as patient registries;

of sales, marketing and distribution support;

of our future products, both in absolute terms and relative to alternative treatments;

effect of current and future healthcare laws on pz-cel;

of coverage and reimbursement from government and other third party payers.

our drug candidate is approved but does not achieve an adequate level of acceptance by physicians, healthcare payors and patients, we

may not generate sufficient revenue and we may not be able to achieve or sustain profitability.

Our efforts to educate the medical community

and third-party payors on the benefits of our drug candidates may require significant resources and may never be successful.