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Item 1. Business

2026-02-26 compared with 2025-02-27 · 195 added, 212 removed, 314 unchanged (56% of the section changed)

We are a clinical-stage biopharmaceutical company focused on developing novel small and large molecule product candidates for immuno-inflammatory diseases.

Our proprietary KINect drug discovery platform combined with our preclinical development capabilities allows us to identify and advance potential product candidates that we may develop independently or in collaboration with third parties.

In addition to identifying and developing our novel product candidates, we are pursuing strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our novel product candidates.

We also provide contract research services to third parties enabled by our early-stage research and development expertise.

We are a clinical-stage biopharmaceutical company focused on discovering and developing novel small and large molecule product candidates for immuno-inflammatory diseases.

Our proprietary KINect drug discovery platform coupled with our integrated discovery approach to small and large molecules enables us to identify and advance product candidates designed to have superior target affinity, specificity and potency.

We are seeking to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our novel product candidates.

We are dedicated to developing a pipeline of novel product candidates to address the needs of patients with immuno-inflammatory diseases who lack satisfactory treatment options .

Our approach to achieve this goal includes the following key elements:

● Research and development expertise.

Our team of scientists and professionals has extensive experience in cell and molecular biology, biochemistry, enzymology, biomarker development, immunology, in vivo efficacy models, structure-based drug design (“SBDD”), and medicinal chemistry.

In addition, our team has broad experience in clinical development and strategy across atopic, respiratory and immunologic diseases.

Our approach to achieving this goal includes the following key elements:

● Leverage discovery, research and development expertise.

We have state-of-the-art capabilities and expertise in small molecule and antibody development, including cell and molecular biology, biochemistry, enzymology, biomarker development, immunology, translational research, in vivo efficacy models, structure-based drug design (“SBDD”), and bioanalytical, computational, and medicinal chemistry.

In addition, our team of scientists and professionals has broad experience in clinical development and strategy across atopic, respiratory, inflammatory and immunologic diseases.

● Develop innovative biologic product candidates targeting validated pathways.

We are advancing biologics programs focused on well-characterized pathways in immuno-inflammatory diseases.

We are advancing biologics programs comprising monoclonal and multispecific antibodies targeting well-characterized pathways in immuno-inflammatory diseases.

Our approach leverages established biological targets while incorporating novel mechanisms and dual-targeting strategies to potentially enhance therapeutic outcomes.

The biologics market has grown significantly, with monoclonal antibodies representing a major segment of U.S.

The biologics market has grown significantly, with monoclonal and bispecific antibodies representing a major segment of U.S.

Food and Drug Administration (“FDA”) approved therapeutics.

Our biologics pipeline includes bosakitug (ATI-045), an anti-thymic stromal lymphopoietin (“TSLP”) monoclonal antibody which has unique differentiation demonstrated by its slow dissociation rate, high residence time and high potency.

TSLP is a key mediator in various inflammatory conditions, making it an attractive therapeutic target.

We are also advancing ATI-052, a novel bispecific antibody that simultaneously targets both TSLP and interleukin-4 receptor (“IL4R”), potentially offering enhanced efficacy through dual pathway inhibition.

By pursuing both traditional monoclonal antibodies and innovative bispecific approaches, we aim to develop differentiated biological therapies that address significant unmet needs in immuno-inflammatory diseases.

● Create small molecule medicines through kinome innovation.

We are exploring the kinome, a subset of the human genome that consists of a collection of 518 protein kinases, one of the largest of all human gene families, responsible for signal transduction controlling cellular responses.

Classified into eight major groups based on their structural similarity to each other, kinases are key regulators of cell function in many cell processes.

Our biologics pipeline includes bosakitug (ATI-045), an anti-thymic stromal lymphopoietin (“TSLP”) monoclonal antibody which has unique differentiation demonstrated by its low dissociation rate, long residence time and high potency.

TSLP, a master regulator of type 2 (“Th2”) immune responses, is a broadly active key mediator in various inflammatory conditions, making it an attractive therapeutic target.

We are also advancing ATI-052, a novel bispecific antibody that simultaneously targets both TSLP and interleukin-4 receptor (“IL-4R a ”), which blocks signaling of both IL-4 and IL-13, potentially offering enhanced efficacy through dual pathway inhibition.

By pursuing both traditional monoclonal antibodies and innovative multispecific approaches, we aim to develop differentiated biological therapies that address significant unmet needs in immuno-inflammatory diseases.

● Create small molecule medicines through kinome innovation utilizing our proprietary KINect platform.

We are exploring the kinome, a subset of the human genome and one of the largest of all human gene families, responsible for signal transduction controlling cellular responses.

Kinases are key regulators of cell function in many cell processes.

By transferring phosphates to other molecules, kinases can induce a cellular response to environmental cues.

Dysregulation and/or activating/blocking mutations in kinases can disrupt normal cell signaling and lead to diseases ranging from autoimmune diseases to diabetes and cancer, making them important targets for drug development.

Dysregulation and/or activating/blocking mutations in kinases can disrupt normal cell signaling and lead to diseases including autoimmune, cardiovascular, inflammatory, and metabolic disorders, making them important targets for drug development.

There are over 80 kinase inhibitors approved by the FDA on the market;

however, these drugs only target a small fraction of the kinome, with many clinically relevant kinase targets lacking validated inhibitors.

In 2023, the kinase inhibitors market was valued at over $57 billion.

We’re focused on novel approaches toward the design and development of kinase inhibitors that target key enzymes involved in chronic inflammation, autoimmune disease, and the regulation of cancer growth, survival and metastasis.

We are developing ATI-2138, a highly potent, oral small molecule covalent IL2-inducible tyrosine kinase (“ITK”) and Janus kinase (“JAK”) 3 inhibitor for autoimmune diseases.

In addition, we are also progressing to candidate selection a second generation ITK selective inhibitor designed to eliminate crossover on JAK3.

● Identify additional product candidates through our KINect drug discovery platform.

In 2025, the kinase inhibitors market was valued at over $67 billion and is expected to grow to over $94 billion by 2030.

Our proprietary KINect platform enables us to identify potential small molecule product candidates through a unique combination of our proprietary chemical library of kinase inhibitors, our novel approach to inhibitor modalities, our expertise in SBDD and our custom kinase assays.

The KINect platform is designed with the goal of expanding the druggable kinome, solving class challenges including affinity and selectivity, and providing a faster path to high quality inhibitor assets.

We are focused on novel approaches toward the design and development of kinase inhibitors that target key enzymes involved in chronic inflammation and autoimmune disease.

For example, we are developing a portfolio of highly potent, oral small molecule covalent inhibitors of IL-2-inducible tyrosine kinase (“ITK”).

These include ATI-2138, an ITK and Janus

kinase (“JAK”) 3 dual inhibitor, and JAK-sparing ITK inhibitors, including ATI-9494.

● Broaden our drug development pipeline internally and externally.

A key element of our strategy is to build and expand our pipeline of product candidates.

To build our pipeline, we may seek to in-license or acquire additional product candidates, in addition to developing assets in-house.

● Pursue strategic alternatives for our product candidates.

We intend to pursue strategic alternatives, including identifying and consummating transactions with third-party partners, to further develop, obtain marketing approval for and/or commercialize our product candidates.

We may seek to in-license or acquire additional product candidates, in addition to developing assets in-house.

● Identify and consummate transactions with third-party partners for our product candidates.

We intend to identify and consummate transactions with third-party partners to further develop, obtain marketing approval for and/or commercialize our product candidates.

Our Key Product Candidate Pipeline

Our pipeline of key product candidates is summarized in the table below.

* This trial is sponsored and conducted by Chia Tai Tianqing Pharmaceutical Group, Co., Ltd.

(“CTTQ”) or its affiliates.

Bosakitug, an Investigational, Novel Anti-TSLP Monoclonal Antibody

Bosakitug (ATI-045) is an investigational, novel, humanized anti-TSLP monoclonal antibody that specifically binds to human TSLP with high affinity and long residence time, blocking its interaction with the receptor complex and disrupting signal transduction.

This mechanism prevents a broad range of immune cells targeted by TSLP from releasing proinflammatory cytokines.

Bosakitug (ATI-045) is an investigational, novel, humanized anti-TSLP monoclonal antibody that specifically binds to human TSLP, blocking its interaction with the receptor complex and disrupting signal transduction.

This mechanism prevents immune cells targeted by TSLP from releasing proinflammatory cytokines.

Bosakitug has potential best-in-class properties, including a very high affinity to TSLP, very high potency, an extremely low dissociation rate from TSLP leading to long residence time and enhanced neutralization activity, and a half-life that can potentially support an extended dosing interval.

The high affinity and low dissociation observed with bosakitug may be the result of unique biparatopic binding to both the N- and C-terminus of TSLP.

Bosakitug has the potential to treat a variety of atopic, immunologic and respiratory diseases.

We exclusively license global rights (excluding Greater China) to bosakitug from Biosion, Inc.

We exclusively license global rights (excluding Mainland China, Macau, Hong Kong and Taiwan (“Greater China”)) to bosakitug from Biosion, Inc.

In a Phase 2a, single-arm, proof-of-concept trial in 22 U.S.

patients with moderate to severe atopic dermatitis conducted by Biosion, bosakitug demonstrated a positive pharmacodynamic, safety and efficacy profile, with 94% of patients achieving a 75% improvement in the Eczema Area and Severity Index (“EASI”), 65% of patients achieving EASI-90, and 88% of patients achieving an Investigator’s Global Assessment (“IGA”) score of 0 or 1 (clear or almost clear skin), at week 26 (n=17).

Bosakitug was generally well-tolerated with no serious adverse events reported.

patients with moderate to severe atopic dermatitis conducted by Biosion, 94% of patients receiving bosakitug achieved at least a 75% improvement in the Eczema Area and Severity Index (“EASI”), 65% of patients achieved EASI-90, and 88% of patients achieved an Investigator’s Global Assessment (“IGA”) score of 0 or 1 (clear or almost clear skin), at week 26 (n=17).

Bosakitug demonstrated a strong pharmacodynamic profile and was generally well-tolerated with no serious adverse events reported.

The most common treatment-emergent adverse event was headache (22.7% of patients).

Grade 1 injection site reactions, primarily tenderness, occurred in 47.6% of patients.

We plan to initiate a Phase 2b trial of bosakitug in patients with moderate to severe atopic dermatitis in the first half of 2025.

Bosakitug is also currently being evaluated in multiple Phase 2 trials in severe asthma, chronic rhinosinusitis with nasal polyps (“CRSwNP”) and moderate to severe chronic obstructive pulmonary disease (“COPD”) in China by CTTQ.

In June 2025, we initiated a Phase 2 trial to investigate the efficacy, safety, tolerability, pharmacokinetics (“PK”) and pharmacodynamics (“PD”) of bosakitug compared to placebo in approximately 96 patients with moderate to severe

atopic dermatitis.

The primary endpoint is percent change from baseline in EASI at week 24.

Secondary endpoints at week 24 include EASI response (EASI-50, EASI-75, EASI-90), validated IGA response, body surface area (“BSA”) response, and Peak Pruritus Numerical Rating Scale (“PP-NRS”) score, relative to baseline.

We expect to announce top-line data in the second half of 2026.

Bosakitug is also currently being studied in severe asthma, chronic rhinosinusitis with nasal polyps and moderate to severe chronic obstructive pulmonary disease in China by CTTQ.

CTTQ licenses bosakitug from Biosion in Greater China.

We anticipate data from the severe asthma trial and CRSwNP trial in the first half of 2025, which we expect will inform our internal development programs.

Our clinical focus for bosakitug will remain on dermatological immuno-inflammatory indications and further global (excluding Greater China) development in respiratory indications will be dependent on entering into potential partnerships.

ATI-2138, an Investigational, Oral Covalent ITK/JAK3 Inhibitor

ATI-2138 is an investigational oral covalent inhibitor of ITK and JAK3 for the potential treatment of T cell-mediated autoimmune diseases.

The ITK/JAK3 compound interrupts T cell signaling through the combined inhibition of ITK/JAK3 pathways in lymphocytes.

In September 2023, we announced positive results from our two-week Phase 1 placebo-controlled, randomized, multiple ascending dose (“MAD”) trial of ATI-2138.

The trial was designed to investigate the safety, tolerability, pharmacokinetics (“PK”) and pharmacodynamics (“PD”) of ATI-2138 in healthy volunteers.

The trial enrolled 60 healthy volunteers across 6 dosing cohorts ranging from 10 to 80 mg of total daily doses, with eight volunteers receiving ATI-2138 and two volunteers receiving placebo in each arm.

Data from the trial demonstrated that ATI-2138 was generally well tolerated at all doses tested and had dose proportional PK.

Additionally, ATI-2138 demonstrated a dose-dependent inhibition of both ITK and JAK3 exploratory PD biomarkers, with near maximal inhibition achieved at the 30 mg total daily dose.

No serious adverse events were reported.

We are conducting a Phase 2a open-label trial to investigate the safety, tolerability, PK, efficacy, and PD of ATI-2138 administered over 12 weeks in approximately 15 patients in the United States with moderate to severe atopic dermatitis.

The primary endpoints are safety related parameters.

Secondary endpoints include EASI response (EASI-50, EASI-75, EASI-90), validated IGA response, body surface area response and other pertinent efficacy related measures.

We expect to announce top-line data in the first half of 2025.

We are also exploring the potential of ATI-2138 in additional indications that are relevant to the mechanism of action, including alopecia areata and vitiligo.

ATI-052, an Investigational, Novel Anti-TSLP and Anti-IL4R Bispecific Antibody

ATI-052 is a humanized anti-TSLP and anti-IL4R bispecific antibody that blocks both the upstream TSLP receptor signal transduction and downstream IL4R activation thereby inhibiting this central proinflammatory pathway.

ATI-052 utilizes the same TSLP as bosakitug but is engineered to bind more tightly to the neonatal Fc receptor (“FcRn”), potentially extending its half-life.

ATI-2138 is a highly potent and selective novel investigational dual inhibitor of ITK and JAK3 for the potential treatment of T cell-mediated autoimmune diseases.

The unique dual pharmacology of ATI-2138 regulates T cell development and function both upstream (ITK) and downstream (JAK3), which may provide a more potent and complete anti-inflammatory response.

In July 2025, we announced positive top-line results from our open-label, single-arm Phase 2a trial of ATI-2138 in patients with moderate to severe atopic dermatitis.

The trial met the primary and key secondary endpoints.

The trial was designed to investigate the safety, tolerability, PK, efficacy, and PD of 10 mg of ATI-2138 administered twice daily (“BID”) for 12 weeks.

The trial enrolled 14 patients in the United States, with 12 patients completing treatment and up to 10 patients available for the per protocol analysis.

The primary endpoints were safety related parameters and the secondary endpoints included PD and efficacy related measures.

No meaningful safety findings were observed, and ATI-2138 was very well tolerated.

We observed consistent and rapid improvement across the efficacy assessments, with a mean and median improvement in EASI score at week 12 of 61% and 77%, respectively.

Excluding one patient determined to be a statistical molecular outlier by more than four standard deviations who demonstrated systemic findings inconsistent with atopic dermatitis alone including significant non-lesional inflammation and who was not fully compliant with study drug administration, the mean and median improvement in EASI score at week 12 was 77% and 82%, respectively.

At week 12, 63% of patients experienced a greater than or equal to 4-point improvement (which is considered a clinically meaningful response) in PP-NRS.

Additional clinical results presented at the European Academy of Dermatology and Venerology conference in September 2025 further clarified the rapid improvements across efficacy measures, including week 4 decreases of 64% in BSA response (p<0.001), 77% in EASI score (p<0.001), and 45% in PP-NRS (p<0.01).

These results were sustained through end of treatment at week 12.

ATI-2138 demonstrated near complete and sustained inhibition and occupancy of ITK ranging from approximately 90% at peak to 60% to 70% at trough, and a high level of inhibition of JAK3.

Proteome and transcriptome lesional skin tap strip analyses showed significant ATI-2138-dependent reduction of multiple inflammatory pathways associated with ITK, including strong downregulation of Th2, Th17, and T cell receptor (“TCR”) pathways, along with the Th1 pathway and fibrosis-related markers.

The decreases in inflammatory and fibrosis-related markers positively and strongly correlated with improvements in clinical scores.

We are exploring the potential of ATI-2138 in additional indications that are relevant to the dual pharmacology and mechanism of action, including certain alopecias and other inflammatory disorders.

ATI-052, an Investigational, Novel Anti-TSLP and Anti-IL-4R a Bispecific Antibody

ATI-052 is an investigational, novel, humanized anti-TSLP and anti-IL-4R a bispecific antibody that exhibits high binding affinity to and dual blockage of both the upstream TSLP receptor signal transduction and downstream IL-4R a activation thereby inhibiting this central proinflammatory pathway.

ATI-052 binds TSLP, which sits at the top of the inflammatory cascade;

by targeting IL-4R a , it blocks downstream signaling of both IL-4 and IL-13, two anti-inflammatory cytokines, which are critical components of Th2-mediated immunity and play a crucial role in the pathogenesis of inflammation and allergic diseases.

ATI-052 utilizes the same TSLP antigen-binding fragment (“Fab”) as bosakitug but is engineered to bind more tightly to the neonatal Fc receptor (“FcRn”), potentially extending its half-life.

In addition, the AQQ mutation in the Fc limits effector functionality, reducing off-target binding and potential toxicity.

ATI-052 has the potential to treat a variety of atopic, immunologic and respiratory diseases.

We plan to submit an Investigational New Drug (“IND”) application for ATI-052 in the first quarter of 2025.

If the IND is allowed, we plan to initiate a Phase 1 single ascending dose and MAD trial of ATI-052.

Other Investigational Product Candidates

Lepzacitinib, an Investigational Topical “Soft” JAK 1/3 Inhibitor

Lepzacitinib (ATI-1777) is an investigational topical “soft” JAK 1/3 inhibitor for the potential treatment of atopic dermatitis and potentially other dermatologic conditions.

“Soft” JAK inhibitors are designed to be topically applied and active in the skin, but rapidly metabolized and inactivated when they enter the bloodstream, which may result in low systemic exposure.

In January 2024, we announced positive top-line results from our Phase 2b multicenter, randomized, double-blind, vehicle-controlled, parallel-group trial of lepzacitinib in patients with mild to severe atopic dermatitis.

The trial was designed to evaluate the efficacy, safety, tolerability and PK of multiple concentrations (0.5%, 1% and 2%) of twice daily (“BID”) treatment with lepzacitinib and a single concentration (2%) of once daily (“QD”) treatment with lepzacitinib.

The trial randomized 250 patients with mild, moderate or severe atopic dermatitis, including adults and children as young as 12 years old, across 30 clinical trial sites in the United States.

The trial met the primary efficacy endpoint, the percent

change from baseline in EASI score at week 4, with statistical significance for patients treated with lepzacitinib 2% BID compared to patients treated with vehicle (69.7% versus 58.7% in the pooled vehicle group, p=0.035).

In addition, a PK analysis showed minimal levels of exposure to lepzacitinib.

The mean steady state trough drug levels at week 4 were 0.319 ng/mL, representing 0.7% of IC50 for JAK 1/3 inhibition in whole blood.

In total, 97% of lepzacitinib plasma samples from dosed patients had concentrations below 1/10th of the IC50, and six samples (from five lepzacitinib treated patients) of 764 samples analyzed had concentrations above 1/4 of the IC50.

No meaningful safety findings were observed and lepzacitinib was well tolerated.

We are currently seeking a global development and commercialization partner for this program (excluding Greater China).

In 2022, we granted Pediatrix Therapeutics, Inc.

exclusive rights to develop and commercialize lepzacitinib in Greater China.

Zunsemetinib, an Investigational Oral MK2 Inhibitor

Zunsemetinib (ATI-450) is an investigational oral, novel, small molecule selective inhibitor of the mitogen-activated protein kinase-activated protein kinase 2 (“MK2”) signaling pathway for the potential treatment of metastatic breast cancer (“MBC”) and pancreatic ductal adenocarcinoma (“PDAC”).

Phosphorylated MK2 is upregulated in primary tumors and metastatic bone lesions from MBC patients.

MK2 is responsible for the production of a subset of critical pro-tumorigenic factors secreted by the stromal microenvironment to support tumor growth and metastasis.

Additionally, MK2 drives both metastatic and chemotherapy induced bone loss in MBC patients through, at least in part, its role in RANKL biology and osteoclast production and activation.

In preclinical studies, zunsemetinib has been demonstrated to impact murine models of MBC through inhibition of tumor growth and metastasis along with bone preservation.

Phosphorylated MK2 is highly expressed in PDAC tissue and expression levels are directly associated with poor outcomes in patients with PDAC.

The current first and second line standard of care for PDAC patients is FOLFIRINOX combination chemotherapy.

Irinotecan and its metabolite, SN-38, are the main drivers of cancer cell apoptosis associated with FOLFIRINOX.

The effectiveness of FOLFIRINOX is limited by pro-survival resistance mechanisms that are driven through SN-38 activation of the MK2 pathway and phosphorylation of two direct MK2 substrates, HSP-27 and Beclin-1.

In both patient derived xenografts and in the autochthonous genetic KPPC model of PDAC in mice, zunsemetinib has demonstrated that it blocks phosphorylation and activation of HSP-27, induces tumor cell killing and enhances the efficacy of FIRINOX (a version of FOLFIRINOX used in murine models).

We plan to support Washington University in St.

Louis in its investigator-initiated Phase 1b/2 trials of zunsemetinib in patients with MBC and PDAC.

Discovery Programs and KINect Drug Discovery Platform

We conduct small molecule drug discovery and preclinical development research through KINect, our proprietary drug discovery platform, which we acquired as part of our acquisition of Confluence Life Sciences, Inc.

(now known as Aclaris Life Sciences, Inc.) (“Confluence”), in 2017.

Our KINect platform enables us to identify potential small molecule product candidates through a unique combination of our proprietary chemical library of kinase inhibitors, our novel approaches to inhibitor modalities, our expertise in SBDD, and our custom kinase assays.

Our focus has been on difficult to drug kinase targets that exhibit some level of clinical, genetic and/or pharmacological disease validation.

We exclusively license global rights (excluding Greater China) to ATI-052 from Biosion.

In January 2026, we announced positive interim results from our Phase 1a single ascending dose (“SAD”) and multiple ascending dose (“MAD”) portion of our first-in-human study evaluating ATI-052 in healthy volunteers.

randomized, blinded, placebo-controlled study enrolled 48 participants across four SAD cohorts (receiving single doses of 30, 120, 360, or 720 mg or placebo) and two MAD cohorts (receiving five doses of 240 or 480 mg or placebo administered every seven days).

ATI-052 demonstrated a favorable safety and tolerability profile across all dose levels, with treatment-emergent adverse events (“TEAEs”) being predominantly Grade 1 in severity.

The most common TEAE was mild, self-resolving injection site redness, and notably, no conjunctivitis was observed in any cohort.

No Grade 3 TEAEs related to study drug, serious adverse events, or discontinuations due to adverse events occurred.

The PK profile showed dose proportionality across the pharmacologic dose range with an effective half-life of at least 26 days.

PD results demonstrated robust target engagement with concentration-dependent inhibition of IL-4 and TSLP stimulated CCL17/TARC at all doses tested.

At 360 mg, ATI-052 achieved complete and sustained inhibition through week three, with near complete inhibition of TSLP stimulated CCL17/TARC observed at least six weeks after administration.

These combined PK and PD characteristics support the potential for dosing intervals of up to every three months.

We expect to announce complete top-line results from the SAD and MAD cohorts in the second quarter of 2026.

Based on these positive results, we initiated a Phase 1b proof-of-concept trial in atopic dermatitis in January 2026 and a Phase 1b proof-of-concept trial in asthma in February 2026, with top-line data from both studies expected in the second half of 2026.

We plan to initiate a Phase 2b program for ATI-052 with asthma and atopic dermatitis as potential first indications, in the second half of 2026.

ATI-9494, an Investigational, Oral Covalent ITK Inhibitor, and Other JAK-Sparing ITK Inhibitors

We are developing ATI-9494, a highly potent, oral, covalent, investigational dual inhibitor of ITK and Resting Lymphocyte Kinase (TXK), and other covalent JAK-sparing ITK inhibitors with differentiated pharmacological properties and selectivity profiles.

These inhibitors have the potential to differentially modulate T cell biology across a broad range of disease indications with extended half-lives and potential best-in-class potency, ITK occupancy, and ITK activation at low doses.

We expect to file an IND application for ATI-9494 in the second half of 2026.

Discovery and Preclinical Programs

We conduct small molecule drug discovery through KINect, our proprietary drug discovery platform.

We also engage in discovery efforts for novel, injectable, multi-specific antibodies.

Through our integrated discovery approach, we can progress product candidates from concept through lead optimization, employing robust screening cascades and protein characterization techniques to identify molecules with desired therapeutic properties.

Our KINect platform allows us to address challenges associated with difficult to drug kinases including selectivity and biochemical efficiency, through a unique combination of our proprietary chemical library of kinase inhibitors, our novel approaches to inhibitor modalities, our expertise in SBDD, and our custom kinase assays.

Our approach involves the following mechanisms:

(1) reversible and irreversible covalent inhibitors, (2) molecular glue/complex targeted inhibitors and (3) targeted protein degraders.

These novel approaches are currently being utilized to prosecute additional validated, difficult to drug kinase targets with the goal of demonstrating potential platform utility.

Reversible and Irreversible Covalent Inhibitors:

(1) reversible and irreversible covalent inhibitors, (2) molecular glue/complex targeted inhibitors, (3) tissue specific inhibitors, and (4) targeted protein degraders.

These novel approaches are currently being utilized to prosecute additional validated, difficult to drug kinase targets with the goal of demonstrating broad target utility.

Our small molecule discovery efforts center on targeting kinases that play pivotal roles in various inflammatory and autoimmune pathways.

Reversible and Irreversible Covalent Inhibitors (small molecules inhibiting kinases by forming irreversible bonds with a cysteine at the active site):

Central to the KINect platform is our novel chemical library of several hundred compounds specifically designed to target non-catalytic cysteine residues near the adenosine triphosphate (“ATP”) binding site of more than 300 kinases.

Furthermore, using state-of-the-art drug modeling software, we are able to elaborate the structure of viable drug-like compounds culled from our library and extensive in silico libraries to optimize reversible binding to the target kinase and allow them to selectively form a covalent bond with the cysteine residue near the ATP site on the specific kinase target.

This approach delivers inhibitors exhibiting enhanced potency, selectivity and

biochemical efficiency thereby allowing pharmacological access to ‘hard to drug’ kinases.

This approach delivers inhibitors exhibiting enhanced potency, selectivity and biochemical efficiency thereby allowing pharmacological access to ‘hard to drug’ kinases.

We then assess the function of the newly created compounds with physiologically relevant custom assays that effectively translate to human diseases.

Molecular Glue/Complex Targeted Inhibitors:

In cells, protein kinases function in the context of multicomponent signalosome complexes.

Molecular Glue/Complex Targeted Inhibitors (small molecules that stabilize kinases in an inactive confirmation or ready them for degradation):

Targeting kinase complexes with small molecule drugs designed to either stabilize (molecular glue) and/or generate inactive complexes provides several potential advantages over those designed against a single protein target including:

(1) utilizing a more physiological translatable complex as the target, (2) providing novel protein interfaces devoid of competing endogenous ligands to target, and (3) identifying new chemical matter and modalities for difficult to drug kinase targets.

As such, we have identified target complexes of interest and have initiated discovery programs against these targets.

Targeted Protein Degraders:

modalities for difficult to drug kinase targets.

Tissue Specific Inhibitors (small molecules that inhibit kinases in target tissues with minimal systemic exposure):

Target-specific inhibitors are drugs, often small molecules, designed to block specific proteins (like kinases) or pathways driving diseases including immunologic and inflammatory disorders.

We believe that such inhibitors provide a unique opportunity to target certain diseases with highly specific compounds which may allow us to overcome potential systemic safety concerns and raise the efficacy ceiling.

Targeted Protein Degraders (small molecules that trigger the degradation of specific proteins by the ubiquitin/proteasome pathway):

We believe targeted protein degraders represent a powerful approach to develop drugs against biologically important but difficult to drug proteins including kinases.

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We are exploring selective degraders of kinase targets with multiple biological functions in addition to the catalytic activity.

This integrated drug discovery engine allows us to rapidly progress potential product candidates from idea to IND.

We believe this platform can generate inhibitors with fit-for purpose mechanisms ranging from reversible, to reversible-covalent to irreversible-covalent kinase and kinase complex inhibitors along with targeted protein degraders.

We are actively progressing several discovery programs focused on delivering the next wave of small molecule product candidates from our KINect platform.

Our discovery efforts center on targeting kinases that play pivotal roles in various inflammatory, autoimmune, and oncology pathways.

In addition to our small molecule discovery efforts, we maintain capabilities in biologics discovery to complement our therapeutic portfolio.

Through our integrated discovery platform, we can progress biologics candidates from concept through lead optimization, employing robust screening cascades and protein characterization techniques to identify molecules with desired therapeutic properties.

Our discovery efforts to develop multi-specific antibodies are focused on generating antibodies with superior target affinity, specificity, and potency utilizing combinations of (a) two or more clinically validated targets with non-overlapping biology, (b) clinically validated targets with novel biology, and/or (c) synergistic target combinations in an effort to address shortcomings of single drug administration.

This complementary approach to our small molecule programs enables us to pursue optimal therapeutic modalities for each target and indication of interest.

For example, we are progressing several bispecific antibodies utilizing the bosakitug anti-TSLP binding region paired with binding fragments targeting other undisclosed cytokine signaling pathways.

We intend to evaluate both internal and external development options, including strategic partnerships, for these assets.

Other Investigational Product Candidates

Lepzacitinib, an Investigational Topical “Soft” JAK 1/3 Inhibitor

Lepzacitinib (ATI-1777) is an investigational topical “soft” JAK 1/3 inhibitor for the potential treatment of atopic dermatitis and potentially other dermatologic conditions.

We are currently seeking a global development and commercialization partner for this program (excluding Greater China).

In 2022, we granted Pediatrix Therapeutics, Inc.

(“Pediatrix”) exclusive rights to develop and commercialize lepzacitinib in Greater China.

Manufacturing and Supply

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Our product candidates, if approved, will compete with existing treatments and new treatments that may become available in the future.

With respect to bosakitug, we are aware of a number of companies with monoclonal antibodies also targeting the TSLP ligand, and one company targeting the TSLP receptor, including Amgen and AstraZenaca (tezepelumab), KeyMed Biosciences (CM-326), Uniquity Bio (solrikitug), Windward Bio (WIN378), Tavotek Biotherapeutics (TAVO101), GlaxoSmithKline (“GSK”) (GSK5784283), and UpStream Bio (verekutig).

As a potential treatment for atopic dermatitis, there are several different types of therapies in the atopic dermatitis market, such as biologics, oral and topical corticosteroids, oral and topical calcineurin inhibitors, oral mycophenolate products, JAK inhibitors, other oral antibiotics and antihistamines and phototherapy.

With respect to bosakitug, we are aware of a number of companies with monoclonal antibodies also targeting the TSLP ligand, and one company targeting the TSLP receptor, including Amgen and AstraZeneca (Tezepelumab, AMG-104), KeyMed Biosciences (CM326), Uniquity Bio (solrikitug), Windward Bio and Harbour BioMed and Kelun-Biotech (WIN378/HBM9378), GlaxoSmithKline (“GSK”) (GSK5784283), Generate Biomedicines (GB-0895), Qyuns

Therapeutics (QX008N), and UpStream Bio (verekutig).

With respect to ATI-052, our primary competitors include those developing multi-specific antibodies designed to inhibit both TSLP and IL-4Rα activity, such as Innovent Biologics (IBI3002) and Pfizer (PF-07275315).

Competitors for ATI-052 may also include those developing or commercializing multi-specific antibodies targeting two or more of TSLP, IL-4, and IL-13.

For example, we are aware of Regeneron Pharmaceuticals and Sanofi (dupilumab), Sanofi (lunsekimig), Pfizer (PF-07264660), and KeyMed Biosciences (CM512).

With respect to bosakitug and ATI-052 as a potential treatment for atopic dermatitis, there are several different types of therapies in the atopic dermatitis market, such as biologics, oral and topical corticosteroids, oral and topical calcineurin inhibitors, oral mycophenolate products, JAK inhibitors, other oral antibiotics and antihistamines and phototherapy.

There are also several prescription, non-prescription and over-the-counter topical products, including PDE4 inhibitors, utilized to treat atopic dermatitis.

These types of drugs are produced and sold, or are

approved for marketing, by large pharmaceutical companies, including AbbVie (upadacitinib), Incyte (ruxolitinib), LEO Pharma A/S (delgocitinib), Pfizer (crisaborole;

abrocitinib), Eli Lilly (lebrikizumab), Dermavant Sciences (tapinarof), and Regeneron Pharmaceuticals and Sanofi (dupilumab).

In addition, we are aware of a number of companies, including large pharmaceutical companies, such as Amgen (rocatinlimab), Eli Lilly (ucenprubart), LEO Pharma A/S (tralokinumab), Pfizer (PF-07264660;

PF-07275315), KeyMed Biosciences (stapokibart), and Tavotek Biotherapeutics (TAVO101) developing and conducting clinical trials for investigational product candidates that could compete with bosakitug in each case if approved, for the treatment of atopic dermatitis.

With respect to bosakitug as a potential treatment for asthma, existing therapeutics for asthma include controller medications, reliever medications and more recently, biologics from Genentech and Novartis (omalizumab), Sanofi and Regeneron (dupilumab), GSK (mepolizumab), and AstraZeneca (benralizumab), with other products in development, including by UpStream Bio (verekutig), Amgen and AstraZeneca (tezepelumab), KeyMed Biosciences (CM-326), Uniquity Bio (solrikitug), Sanofi (rilzabrutinib), GSK (GSK5784283), and Windward Bio (WIN378).

Existing therapeutics for CRSwNP include topical corticosteroids, nasal saline irrigations and more recently, biologics from Genentech and Novartis (omalizumab), Sanofi and Regeneron (dupilumab), and GSK (mepolizumab).

Companies such as GSK, KeyMed Biosciences, and Upstream Bio are also developing potential therapeutics for CRSwNP.

Existing therapeutics for COPD include inhaled steroids, bronchodilator inhalers, and recently, a biologic by Sanofi and Regeneron (dupilumab).

Amgen and AstraZeneca (tezepelumab) are also conducting clinical trials in COPD.

These types of drugs are produced and sold, or are approved for marketing, by large pharmaceutical companies, including AbbVie (upadacitinib), Incyte (ruxolitinib), LEO Pharma A/S (delgocitinib, tralokinumab), Pfizer (crisaborole;

abrocitinib), Eli Lilly (lebrikizumab), Dermavant Sciences (tapinarof), Galderma (nemolizumab), and Regeneron Pharmaceuticals and Sanofi (dupilumab).

In addition, we are aware of a number of companies developing and conducting clinical trials for investigational product candidates that could compete with bosakitug and ATI-052 in each case if approved, for the treatment of atopic dermatitis.

With respect to ATI-052 as a potential treatment for asthma, existing therapeutics for asthma include controller medications, reliever medications, as well as biologics from Genentech and Novartis (omalizumab), Sanofi and Regeneron (dupilumab), GSK (mepolizumab, depemokimab), Amgen and AstraZeneca (tezepelumab), and AstraZeneca (benralizumab), with other products in development.

With respect to ATI-2138, there are several companies that are developing or have approved drugs that target either ITK or JAK that could compete with ATI-2138, if approved.

For example, Corvus Pharmaceuticals is currently developing a selective, covalent inhibitor of ITK (soquelitinib), including in atopic dermatitis.

In addition, Pfizer's ritlecitinib is reported to inhibit ITK and is approved for alopecia areata and is being developed for vitiligo, Crohn’s disease and ulcerative colitis.

In addition to these companies, Janssen Pharmaceuticals and AbbVie are co-marketing a small molecule inhibitor of the kinase BTK (ibrutinib) that has also been reported to inhibit ITK.

Several companies are developing or have commercialized JAK inhibitors that may compete with ATI-2138, if approved, including Pfizer (tofacitinib, abrocitinib, and ritlecitinib), Eli Lilly/Incyte (baricitinib), and AbbVie (upadacitinib).

For example, Corvus Pharmaceuticals is currently developing a selective, covalent inhibitor of ITK (soquelitinib).

In addition, several companies are developing or have commercialized JAK inhibitors that may compete with ATI-2138, if approved, including Pfizer (tofacitinib, abrocitinib, and ritlecitinib), Eli Lilly (baricitinib), AbbVie (upadacitinib), and Sun Pharmaceutical (deuruxolitinib).

The commercial opportunity for our product candidates, if approved, could be reduced or eliminated if our competitors develop and commercialize drugs that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any drug we may develop.

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Patent and Trademark Office (“USPTO”) and its foreign counterparts.

With respect to our TSLP monoclonal antibody development program, we exclusively license pending applications in the United States, European Union, Japan and South Korea directed to TSLP monoclonal antibodies, including bosakitug, which, if issued, would naturally expire in 2040, subject to any applicable patent term adjustment or extension that may be available in a particular country.

We also exclusively license a pending provisional application directed to methods of using TSLP monoclonal antibodies for the treatment of atopic dermatitis, which, if issued, would

naturally expire in 2045, subject to any applicable patent term adjustment or extension that may be available in a particular country.

With respect to our ITK inhibitor development program, we own numerous issued patents and pending applications in the United States and foreign countries directed to novel inhibitors of ITK, including ATI-2138, and methods of use that expire, or would expire, between 2035 and 2044, subject to any applicable patent term adjustment or extension that may be available in a particular country.

For example, we own one U.S.

With respect to our TSLP monoclonal antibody development program, we exclusively license an issued patent and pending applications in the United States, European Union, Japan and South Korea directed to TSLP monoclonal

antibodies, including bosakitug.

Our issued U.S.

patent expires in 2043 with its patent term adjustment, and the pending applications in the United States and foreign countries, if issued, would naturally expire in 2040, subject to any applicable patent term adjustment or extension that may be available in a particular country.

We also exclusively license a pending international patent application filed under the Patent Cooperation Treaty (“PCT”) directed to methods of using TSLP monoclonal antibodies for the treatment of atopic dermatitis, which, if issued, would naturally expire in 2045, subject to any applicable patent term adjustment or extension that may be available in a particular country.

With respect to our ITK inhibitor development program, we own numerous issued patents and pending applications in the United States and foreign countries directed to novel inhibitors of ITK, including ATI-2138 and ATI-9494, and methods of use that expire, or would expire, between 2035 and 2046, subject to any applicable patent term adjustment or extension that may be available in a particular country.

For example, we own multiple U.S.

patent and pending U.S., European Union and other foreign country applications directed to ATI-2138 and analogs thereof and methods of using the same, which, if issued, would expire in 2039, subject to any applicable adjustment or extension.

We also own a pending international patent application filed under the Patent Cooperation Treaty (“PCT”) directed to methods of using ATI-2138, which if issued, would expire in 2043, subject to any applicable adjustment or extension.

We also own pending PCT applications directed to crystal forms of ATI-2138 and to methods of synthesizing such ITK inhibitors, including ATI-2138, which if issued, would each expire in 2044, subject to any applicable adjustment or extension.

With respect to our bispecific antibody development program, we exclusively license a pending PCT application directed to such bispecific antibodies, including ATI-052, which, if issued, would naturally expire in 2043, subject to any applicable patent term adjustment or extension that may be available in a particular country.

With respect to our “soft” JAK inhibitor development program, we own numerous issued patents and pending applications in the United States and foreign countries to novel “soft” JAK inhibitors, various methods of use and synthesis that expire, or would expire, between 2038 and 2044, subject to any applicable patent term adjustment or extension that may be available in a particular country.

For example, we own issued patents in the United States and China, as well as pending applications in the United States and foreign countries directed to various novel inhibitors of JAK1 and/or JAK3, including lepzacitinib, and methods of using the same, which, if issued, would expire in 2038, subject to any applicable adjustment or extension.

We also own pending applications in the United States and foreign countries directed to crystal forms of lepzacitinib and directed to methods of using lepzacitinib and topical formulations, which, if issued, would expire in 2041 and 2042, respectively, subject to any applicable adjustment or extension.

We also own a pending PCT application directed to methods of synthesizing such novel inhibitors of JAK1 and/or JAK3, including lepzacitinib, which, if issued, would expire in 2044, subject to any applicable adjustment or extension.

With respect to our MK2 signaling pathway inhibitor development program, we own numerous issued patents and pending applications to novel MK2 pathway inhibitors, including zunsemetinib, and various methods of use that expire, or would expire, between 2031 and 2041, subject to any applicable patent term adjustment or extension that may be available in a particular country.

For example, we own two issued U.S.

patents and issued patents in the European Union and Japan directed to zunsemetinib and analogs thereof and certain methods of using the same.

patents expire in 2034 and any claims that may issue from the pending applications expire in 2034, subject to any applicable adjustment or extension.

We own a pending patent application in the United States directed to methods of treating various cancers, such as breast cancer and pancreatic cancer, by orally administering zunsemetinib, which, if issued, would expire in 2041, subject to any applicable adjustment or extension.

Further, we own one U.S.

patent and a pending patent application in the United States directed to certain methods of manufacturing zunsemetinib, as well as pending applications in the United States and Japan to crystal forms of zunsemetinib, which, if issued, would each expire in 2041, subject to any applicable adjustment or extension.

We also exclusively license from Washington University pending applications in the United States and the European Union directed to methods of treating pancreatic cancer with MK2 inhibitors, including zunsemetinib, which, if issued, would expire in 2041, subject to any applicable adjustment or extension.

We also own a pending PCT application directed to methods of using ATI-2138, which if issued, would expire in 2043, subject to any applicable adjustment or extension.

We also own pending PCT applications directed to crystal forms of ATI-2138 and to methods of synthesizing such ITK inhibitors, including ATI-2138, which if issued, would expire in 2044, and to methods of using ATI-2138 for treating atopic dermatitis, which if issued, would expire in 2045, in each case subject to any applicable adjustment or extension.

We also own provisional applications on novel JAK-sparing inhibitors of ITK, including ATI-9494, which if issued, would expire in 2046.

With respect to our bispecific antibody development program, we exclusively license pending applications in the United States, Europe and other foreign countries directed to such bispecific antibodies, including ATI-052, which, if issued, would naturally expire in 2043, subject to any applicable patent term adjustment or extension that may be available in a particular country.

Patents extend for varying periods according to the date of patent filing or grant and the legal term of patents in various countries where patent protection is obtained.

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however, unlike in the United States, the European patent is not subject to patent term adjustments.

The European Union does have a compensation program similar to patent term extension called supplementary patent certificate that would effectively extend patent protection for up to five years.

The European Union does have a compensation program similar to patent term extension called supplementary protection certificate that would effectively extend patent protection for up to five years.

We also use other forms of protection, such as trademark, copyright, and/or trade secret protection, to protect our intellectual property, particularly where we do not believe patent protection is appropriate or obtainable.

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Exclusive License Agreement with Biosion

In November 2024, we entered into an exclusive license agreement (the “Biosion Agreement”) with Biosion, pursuant to which we received exclusive rights to develop, manufacture and commercialize bosakitug and ATI-052 worldwide, excluding Mainland China, Macau, Hong Kong and Taiwan (“Greater China”).

In connection with the Biosion Agreement, we also entered into a collaboration agreement (the “CTTQ Agreement”) with Biosion and CTTQ, a licensee of bosakitug in Greater China.

Under the Biosion Agreement and CTTQ Agreement, we agreed to pay, in the aggregate, $30.0 million in upfront cash consideration, plus $4.5 million for the reimbursement of certain development costs.

In connection with the Biosion Agreement, we also entered into a collaboration agreement (the “CTTQ Agreement”, and together with the Biosion Agreement, the “Biosion Agreements”) with Biosion and CTTQ, a licensee of bosakitug in Greater China.

Under the Biosion Agreements, we paid, in the aggregate, $30.0 million in upfront cash consideration, $4.5 million for the reimbursement of certain development costs, plus $6.2 million for the reimbursement of certain development costs and drug product material.

We also issued warrants in the aggregate to purchase 14,281,985 shares of our common stock with an exercise price of $0.00001 per share.

The warrants are immediately exercisable, subject to any required overseas direct investment filings, and terminate when exercised in full.

We also agreed to pay, in the aggregate (i) $6.2 million for reimbursement of certain development costs and drug product material, (ii) up to $125 million upon the achievement of specified regulatory milestones beginning with product approval, (iii) up to $795 million upon the achievement of specified sales milestones, (iv) a tiered low-to-mid single digit royalty based upon a percentage of annual net sales, subject to specified reductions, and (v) a portion of any sublicense consideration received from granting sublicense or similar rights under any of the rights or licenses granted to us.

We also agreed to pay, in the aggregate (i) up to $125 million upon the achievement of specified regulatory milestones beginning with product approval, (ii) up to $795 million upon the achievement of specified sales milestones, (iii) a tiered low-to-mid single digit royalty based upon a percentage of annual net sales, subject to specified reductions, and (iv) a portion of any sublicense consideration received from granting sublicense or similar rights under any of the rights or licenses granted to us.

Agreement and Plan of Merger with Confluence

In August 2017, we entered into an Agreement and Plan of Merger (the “Confluence Agreement”) with Confluence, Aclaris Life Sciences, Inc., our wholly-owned subsidiary (“Merger Sub”), and Fortis Advisors LLC, as representative of the former equity holders of Confluence.

Pursuant to the terms of the Confluence Agreement, the Merger Sub merged with and into Confluence, with Confluence surviving as our wholly-owned subsidiary, resulting in our acquisition of 100% of the outstanding shares of Confluence.

As part of the Confluence acquisition we acquired our investigational product candidates zunsemetinib, lepzacitinib and ATI-2138.

In 2017, we entered into an Agreement and Plan of Merger (the “Confluence Agreement”) with Confluence, Aclaris Life Sciences, Inc., our wholly owned subsidiary (“Merger Sub”), and Fortis Advisors LLC, as representative of the former equity holders of Confluence.

Pursuant to the terms of the Confluence Agreement, Merger Sub merged with and into Confluence, with Confluence surviving as our wholly owned subsidiary, resulting in our acquisition of 100% of the outstanding shares of Confluence.

As part of the Confluence acquisition we acquired, among others, our investigational product candidates lepzacitinib and ATI-2138.

Under the Confluence Agreement, we agreed to pay the former Confluence equity holders aggregate remaining contingent consideration of up to $75.0 million based upon the achievement of specified regulatory and commercial milestones set forth in the Confluence Agreement.

In addition, we have agreed to pay the former Confluence equity holders future royalty payments calculated as a low single-digit percentage of annual net sales, subject to specified reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale of such product.

In addition, we agreed to pay the former Confluence equity holders future royalty payments calculated as a low single-digit percentage of annual net sales, subject to specified reductions, limitations and other adjustments, until the date that all of the patent rights for that product have expired, as determined on a country-by-country and product-by-product basis or, in specified circumstances, ten years from the first commercial sale of such product.

In addition to the payments described above, if we sell, license or transfer any of the intellectual property acquired from Confluence pursuant to the Confluence Agreement to a third party, we will be obligated to pay the former Confluence equity holders a portion of any consideration received from such sale, license, or transfer in specified circumstances.

Government Regulation and Product Approval

Governmental authorities in the United States, at the federal, state and local level, and analogous authorities in other countries extensively regulate, among other things, the research, development, testing, manufacture, safety surveillance, efficacy, quality control, labeling, packaging, distribution, record keeping, promotion, storage, advertising, distribution, marketing, sale, export and import, and the reporting of safety and other post-market information of products

such as the ones we are developing.

A drug or biological product candidate must be approved by the FDA before it may be legally promoted in the United States and by comparable foreign regulatory authorities before marketing in other jurisdictions.

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Drugs and biologics also are subject to other federal, state, local and foreign statutes and regulations.

The process required by the FDA before new drug and biologic product candidates may be marketed in the United States generally involves the following:

The process required by the FDA before new drug and biologic product candidates may be marketed in the United States

generally involves the following:

● completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice (“GLP”) regulations;

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Each protocol must be submitted to the FDA as part of the IND, and progress reports detailing the status of the clinical trials must be submitted to the FDA annually, as well as safety reporting.

An IRB for each site participating in the clinical trial

must review and approve the protocol before the clinical trial commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to each research subject or the subject’s legal representative, monitor the study until completed and otherwise comply with IRB regulations.

An IRB for each site participating in the clinical trial must review and approve the protocol before the clinical trial commences at that institution and must also approve the information regarding the trial and the consent form that must be provided to each research subject or the subject’s legal representative, monitor the study until completed and otherwise comply with IRB regulations.

Clinical trials are typically conducted in three sequential phases that may overlap or be combined:

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If a drug or biological product candidate is found to be potentially effective and to have an acceptable safety profile in Phase 2 clinical trials, the clinical trial program will be expanded to Phase 3 clinical trials to further evaluate dosage, to provide substantial evidence of efficacy, or purity and potency, and to further test for safety in an expanded patient population at geographically dispersed clinical trial sites.

These trials are intended to establish the overall risk-benefit ratio of the drug or biological product candidate and provide an adequate basis for product approval and labeling claims.

These trials are intended

to establish the overall risk-benefit ratio of the drug or biological product candidate and provide an adequate basis for product approval and labeling claims.

Phase 4 clinical trials are conducted after approval to gain additional experience from the treatment of patients in the intended therapeutic indication and to document a clinical benefit in the case of drugs or biologics approved under accelerated approval regulations, or when otherwise requested by the FDA in the form of post-market requirements or commitments.

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The FDA reviews all NDAs and BLAs submitted for a period of 60 days to ensure that they are sufficiently complete for substantive review before it accepts them for filing.

It may request additional information rather than accept

an NDA or BLA for filing.

It may request additional information rather than accept an NDA or BLA for filing.

In this event, the NDA or BLA must be resubmitted with the additional information.

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A drug or biological product candidate representing a significant improvement in treatment, prevention or diagnosis of disease may receive priority review.

A priority review designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on the NDA or BLA from ten months to six months from filing of the NDA or BLA.

A priority review

designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on the NDA or BLA from ten months to six months from filing of the NDA or BLA.

After the FDA evaluates the NDA or BLA and conducts inspections of manufacturing facilities where the drug or biological product candidate and/or its active pharmaceutical ingredient will be produced, it may issue an approval letter or a Complete Response Letter.

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The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

However, physicians may, in their independent medical judgment, prescribe legally available products for off-label uses.

However, physicians may, in their independent medical judgment,

prescribe legally available products for off-label uses.

The FDA does not regulate the behavior of physicians in their choice of treatments, but the FDA does restrict sponsor communications on the subject of off-label use.

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The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) created an abbreviated approval pathway in the PHSA for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.

Biosimilarity, which requires that there be no clinically meaningful differences between the biological

product and the reference product in terms of safety, purity, and potency, can be shown through, as applicable, analytical studies, animal studies, and a clinical study or studies.

Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, can be shown through, as applicable, analytical studies, animal studies, and a clinical study or studies.

Interchangeability means that a product is biosimilar to the reference product and can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

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Other Health Care Laws

Health care providers, physicians and third-party payors in the United States and elsewhere will play a primary role in the recommendation and prescription of any of our product candidates for which marketing approval is obtained.

Our potential third-party partners’ arrangements with third-party payors, health care professionals and customers may expose them to broadly applicable fraud and abuse and other health care laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal civil False Claims Act, that may constrain the business or financial arrangements and relationships through which they sell, market and distribute any product candidates for which marketing approval is obtained.

Our current and future activities, as well as our potential third-party partners’ activities, may, directly or indirectly, expose us and them to broadly applicable fraud and abuse and other health care laws and regulations, including, without limitation, the federal Anti-Kickback Statute and the federal civil False Claims Act, that may constrain the business or financial arrangements and relationships through which any products for which marketing approval is obtained is sold, marketed and distributed.

In addition, we and our potential third-party partners may be subject to transparency laws and patient privacy regulation by the federal government and by the U.S.

states and foreign jurisdictions in which we or they conduct business.

The federal Anti-Kickback Statute makes it illegal for any person or entity, including a prescription drug manufacturer (or a party acting on its behalf) to knowingly and willfully, directly or indirectly, solicit, receive, offer, or pay any remuneration that is intended to induce the referral of business, including the purchase, order, or lease of any good, facility, item or service for which payment may be made under a federal health care program, such as Medicare or Medicaid.

good, facility, item or service for which payment may be made under a federal health care program, such as Medicare or Medicaid.

The term “remuneration” has been broadly interpreted to include anything of value.

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Several courts have interpreted the statute’s intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal health care covered business, the Anti-Kickback Statute has been violated.

Violations of this law are punishable by up to ten years in prison, and can also result in criminal fines, civil monetary penalties, administrative penalties and exclusion from participation in federal health care programs.

Additionally, the intent standard under the Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “Affordable Care Act”), to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation.

In addition, the Affordable Care Act codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act.

Federal false claims and false statement laws, including the federal civil False Claims Act, prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent or not provided as claimed.

Federal false claims and false statement laws, including the federal civil False Claims Act, prohibit, among other things, any person or entity from knowingly presenting, or causing to be presented, for payment to, or approval by, federal programs, including Medicare and Medicaid, claims for items or services, including drugs, that are false or fraudulent or not provided as claimed.

Entities can be held liable under these laws if they are deemed to “cause” the submission of false or fraudulent claims by, for example, providing inaccurate billing or coding information to customers, promoting a product off-label, or for providing medically unnecessary services or items.

In addition, activities relating to the sale and marketing of products are subject to scrutiny under this law.

Penalties for federal civil False Claims Act violations may include up to three times the actual damages sustained by the government, plus mandatory civil penalties for each separate false claim, the potential for exclusion from participation in federal health care programs, and, although the federal civil False Claims Act is a civil statute, False Claims Act violations may also implicate various federal criminal statutes.

In addition, activities relating to the sale and marketing of products are subject to scrutiny under such laws.

The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) prohibits among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services.

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For example, the Affordable Care Act imposed, among other things, annual reporting requirements to the Centers for Medicare & Medicaid Services (“CMS”) for covered manufacturers for certain payments and other transfers of value provided to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other health care professionals (such as physician assistants and nurse practitioners) and teaching hospitals, as well as information regarding ownership and investment interests held by physicians and their immediate family members.

Failure to submit timely, accurately and completely the required information for all payments, transfers of value and ownership or investment interests may result in civil monetary penalties for “knowing failures.” Certain states also mandate implementation of compliance programs, impose restrictions on drug manufacturer marketing practices, require registration of certain employees engaged in marketing activities in the location, and/or require the tracking and reporting of gifts, compensation and other remuneration to health care professionals, including physicians.

We have developed a comprehensive compliance program that establishes internal controls to facilitate adherence to the rules and program requirements to which we are subject.

Although the development and implementation of compliance programs designed to establish internal controls and facilitate compliance can mitigate the risk of investigation, prosecution, and penalties assessed for violations of these laws, or any other laws that may apply to us, the risks cannot be entirely eliminated.

If our operations are found to be in violation of any such laws or any other governmental regulations, we may be subject to significant penalties, including, without limitation, administrative, civil, and criminal penalties, damages, fines, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits and future earnings, the curtailment or restructuring of our operations, exclusion from participation in federal and state health care programs, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and individual imprisonment, any of which could adversely affect our ability to operate our business and our financial results.

Certain states also mandate implementation of compliance programs, impose restrictions on drug manufacturer marketing practices, require registration of certain employees engaged in marketing activities in the location, and/or require the tracking and reporting of gifts, compensation and other remuneration to health care professionals, including physicians.

We may also be subject to data privacy and security regulation by both the federal government and the states in which we conduct our business.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and their implementing regulations, including the final omnibus rule published on January 25, 2013, mandates, among other things, the adoption of uniform standards for the electronic exchange of information in common health care transactions, as well as standards relating to the privacy and security of individually identifiable health information, which require the adoption of administrative, physical and technical safeguards to protect such information.

Among other things, HITECH makes HIPAA’s security standards directly applicable to “business associates,” namely independent contractors or agents of HIPAA covered entities that create, receive or obtain protected health information in connection with providing a service for or on behalf of a covered entity and their subcontractors that use, disclose, access, or otherwise process protected health information.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities and business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorneys’ fees and costs associated with pursuing federal civil actions.

In addition, certain state laws govern the privacy and security of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each

other in significant ways and may not have the same effect, thus complicating compliance efforts.

Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties.

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) and their implementing regulations, among other things, imposes standards relating to the privacy and security of individually identifiable health information on HIPAA covered entities, which include certain healthcare providers, healthcare clearing houses and health plans, and individuals and entities that provide services on their behalf that involve individually identifiable health information, known as business associates, as well as their covered subcontractors.

In addition, certain state laws govern the privacy and security of health information in certain circumstances, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

Failure to comply with these laws, where applicable, can result in the imposition of significant penalties, including, without limitation, administrative, civil, and criminal penalties, damages, fines, disgorgement, imprisonment, contractual damages, reputational harm, diminished profits and future earnings, the curtailment or restructuring of our operations, exclusion from participation in federal and state health care programs, additional reporting requirements and oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws and individual imprisonment.

Health Care Reform

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For example, in March 2010, the Affordable Care Act was passed, which has had, and is expected to continue to have, a significant impact on the health care industry.

The Affordable Care Act was designed to expand coverage for the uninsured and at the same time contain overall health care costs.

The Affordable Care Act was designed to, among other things, expand coverage for the uninsured and at the same time contain overall health care costs.

There have been executive branch, judicial and Congressional challenges and amendments to certain aspects of the Affordable Care Act.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.

The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program.

It is possible that the Affordable Care Act will be subject to additional challenges and amendments in the future.

It is unclear how such challenges and any additional health care reform measures of the second Trump administration will impact the Affordable Care Act and our business.

For example, on July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”), was signed into law, which narrowed access to Affordable Care Act marketplace exchange enrollment and declined to extend the Affordable Care Act enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance.

The OBBBA also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program.

Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired Affordable Care Act subsidies.

We expect that additional United States federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the federal government will pay for healthcare products and services.

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.

For example, in August 2011, President Obama signed into law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in spending reductions.

The Joint Select Committee on Deficit Reduction did not achieve a targeted deficit reduction of at least $1.2 trillion for fiscal years 2012 through 2021, triggering the legislation’s automatic reduction to several government programs.

This includes aggregate reductions in Medicare payments to providers of 2% per fiscal year, which went into effect beginning on April 1, 2013 and, due to subsequent legislative amendments to the statute, will stay in effect through 2032 unless additional Congressional action is taken.

Legislative and regulatory proposals have been made to expand post-approval requirements and restrict sales and promotional activities for drug and biologic products.

For example, the IRA, among other things, (1) directs the Department of Health and Human Services (“HHS”) to negotiate the price of certain single-source drugs and biologics that have been on the market for at least 7 years covered under Medicare (the “Medicare Drug Price Negotiation Program”) and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions took effect progressively starting in fiscal year 2023, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges.

On August 15, 2024, HHS announced the agreed-upon prices of the first ten drugs that were subject to price negotiations, which take effect in January 2026.

HHS will select up to fifteen additional products covered under Part D for negotiation in 2025.

Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program.

On December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act.

On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.

While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.

The effect of reducing prices and reimbursement for certain of our product candidates, if approved, could significantly impact our business and consolidated results of operations.

In addition, the IRA may meaningfully influence our pharmaceutical industry business strategies.

In particular, it may reduce the attractiveness of investment in small molecule and biologic innovation.

For example, in August 2011, the Budget Control Act of 2011, among other things, included aggregate reductions in Medicare payments to providers of 2% per fiscal year, which began in 2013 and will stay in effect through 2032 unless additional Congressional action is taken.

The current administration is pursuing policies to reduce regulations and expenditures across government agencies including at the U.S.

Department of Health and Human Services (“HHS”), the FDA, CMS and related agencies.

These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.

For example, the current administration has announced agreements with several pharmaceutical companies that require the drug manufacturers to offer, through a direct-to-consumer platform, U.S.

patients and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues.

Other recent actions, for example, include (1) directing agencies to reduce agency workforce and cut programs;

(2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program and establishing Most-Favored-Nation pricing for pharmaceutical products;

(3) imposing tariffs on imported pharmaceutical products;

and (4) as part of the Make America Healthy Again Commission’s Strategy Report released in September 2025, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.

Additionally, the current administration recently called on Congress to enact “The Great Healthcare Plan,” to codify and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on pharmacy benefit manager

payment methodologies, among other things.

These actions and policies may significantly reduce U.S.

drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks.

In June 2024, in Loper Bright Enterprises v.

Raimondo , the United States Supreme Court greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our or our potential partners’ operations.

Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program.

At the state level, legislatures have become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

For example, on January 5, 2024, the FDA approved Florida’s proposal to import certain drugs from Canada for specific state healthcare programs.

It is unclear if and how this program will be implemented and whether it will be subject challenges in the United States or Canada.

Other states have also submitted proposals that are pending review by the FDA.

Any such approved importation plans, if implemented, may result in lower drug prices for products covered by those programs.

The Affordable Care Act, the IRA, as well as other federal and state health care reform measures that have been and may be adopted in the future, could harm our future revenue.

Any such importation plans, if implemented, may result in lower drug prices for products covered by those programs.

Existing and future federal and state health care reform measures could harm our future revenue.

Additional legislative actions may be taken in the future which may change current regulations, guidance and interpretations.

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The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification.

The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA or Section 505(b)(2) application until the earliest of 30 months, expiration of the patent, settlement of the lawsuit, and a decision in the infringement case that is favorable to the ANDA or Section 505(b)(2) applicant.

the ANDA or Section 505(b)(2) applicant.

This prohibition is generally referred to as the 30-month stay.

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In the United States, after NDA approval or BLA licensure, owners of relevant drug patents may apply for up to a five-year patent extension, which provides patent term restoration as compensation for the patent term lost during the FDA regulatory review process for the first permitted commercial marketing of a drug product.

The Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”), permits a patent term extension of up

to five years beyond the expiration of the patent.

The Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”), permits a patent term extension of up to five years beyond the expiration of the patent.

The allowable patent term extension is calculated as half of the drug’s testing phase, which is the time between the IND submission becoming effective and the NDA or BLA submission, and all of the review phase, which is the time between NDA or BLA submission and approval, up to a maximum extension of five years.

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Similar provisions are available in the European Union and other foreign jurisdictions to extend the term of a patent that covers an approved drug.

For example, in Japan, it may be possible to extend the patent term for up to five years and in the European Union, it may be possible to obtain a supplementary patent certificate that would effectively extend patent protection for up to five years.

For example, in Japan, it may be possible to extend the patent term for up to five years and in the European Union, it may be possible to obtain a supplementary protection certificate that would effectively extend patent protection for up to five years.

Coverage and Reimbursement

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Our product candidates, if approved, may not be considered cost effective, and government and third-party private health insurance coverage and reimbursement may not be available to patients or sufficient to allow our potential third-party partners to sell our product candidates, if approved, on a competitive and profitable basis.

For example, the IRA, among other things, (1) directs HHS to negotiate the price of certain single-source drugs and biologics that have been on the market for at least 7 years covered under Medicare, and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

Our results of operations could be adversely affected by the Affordable Care Act, the IRA and by other health care reforms that may be enacted or adopted in the future, particularly in light of the recent U.S.

Presidential and Congressional elections.

Further, the containment of healthcare costs also has become a priority of federal, state and foreign governments and the prices of drugs have been a focus in this effort.

For example, HHS imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis.

HHS has also been empowered to negotiate the price of certain single-source drugs that have been on the market for at least seven (7) years covered under Medicare as part of the Medicare Drug Price Negotiation Program.

Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price Negotiation Program.

Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis.

In addition, increasing emphasis on managed care in the United States will continue to put pressure on the pricing of pharmaceutical products.

Cost control initiatives could decrease the price that our potential third-party partners could receive for any of our product candidates, if approved, and could adversely affect our profitability.

Cost control initiatives could decrease the price that our potential third-party partners could receive for any of

our product candidates, if approved, and could adversely affect our profitability.

We cannot predict how pending and future health care legislation will impact our business, and any changes in coverage and reimbursement that further restricts coverage of our product candidates could harm our business.

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As of December 31, 2025, we had 73 total employees, of which 69 were full-time employees.

All of our employees are located in the United States.

None of our employees are represented by a labor union or covered by a collective bargaining agreement.

We consider our relationship with our employees to be good.

In addition to our employees, we engage consultants and independent contractors to provide flexibility in support of our business execution and objectives.

Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and new employees, advisors and consultants.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business