What changed in this filing

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Item 1A. Risk Factors

2025-03-03 compared with 2024-02-29 · 173 added, 188 removed, 978 unchanged (27% of the section changed)

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The following list of risk factors is not exhaustive.

Please read the information in the section captioned “Risk Factors” for a more thorough description of these and other risks.

Please read the information in this section captioned “1A.

Risk Factors” for a more thorough description of these and other risks.

Risks Related to Our Financial Position and Need for Additional Capital

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• We may not obtain or maintain orphan drug designation or exclusivity for our product candidates.

• Disruptions at the FDA and other government agencies could prevent new products from being developed or commercialized in a timely manner, or negatively impact the approval of an NDA, BLA or similar application.

Risks Related to Our Intellectual Property

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• Because we do not expect to pay dividends on our common shares in the foreseeable future, capital appreciation, if any, would be your sole source of gain.

• The trading price of our common shares may be volatile and may fluctuate.

• The trading price of our common shares has been and may continue to be volatile.

• If we are or become a passive foreign investment company, there could be adverse U.S.

federal income tax consequences to U.S.

• We are a British Virgin Islands ("BVI") business company limited by shares, and the rights of shareholders are more limited under BVI law than under U.S.

It may be difficult to enforce a U.S.

or foreign judgment against us, our directors and our officers outside the United States.

Risks Related to Our Financial Position and Need for Additional Capital

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Our business and results of operations could be adversely affected by changes in national or global economic conditions.

These conditions include, but are not limited to, high levels of, and rising, inflation, high and rising interest rates, any volatility in the capital markets, energy availability and costs, the negative impacts from pandemics and public health crises (including any lingering or recurring adverse impacts from COVID-19), negative impacts resulting from the military conflict between Russia and the Ukraine, and the effects of governmental initiatives to manage economic conditions.

These conditions include, but are not limited to, volatility in inflation and interest rates, volatility in the capital markets, energy availability and costs, the negative impacts from pandemics and public health crises, negative impacts resulting from the military conflict between Russia and Ukraine, geopolitical and trade tensions between the U.S.

and China or other geopolitical events, potential protectionist trade policies adopted by the U.S.

and other governments, and the effects of governmental initiatives to manage economic conditions.

Impacts of such conditions could be passed on to our business in the form of higher costs for labor and materials, higher investigator fees, possible reductions in pharmaceutical industry-wide spending on research and development and acquisitions and higher costs of capital.

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We are only in the preliminary stages of most of these activities and, in some cases, have not yet commenced certain of these activities.

We may never succeed in any or all of these activities and, even if we do, we may never generate sufficient revenue to achieve profitability.

We may never succeed in commercializing any of our product candidates and, even if we do, we may never generate sufficient revenue to achieve profitability.

Because of the numerous risks and uncertainties associated with product development, we are unable to accurately predict the timing or amount of expenses or when, or if, we will obtain marketing approval to commercialize any of our product candidates.

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Identifying potential product candidates and conducting preclinical studies and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain regulatory approval and achieve product sales.

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue to develop our product candidates.

We will require additional capital to complete our planned clinical development programs for our current product candidates to seek regulatory approval.

Our expenses have increased and we expect our expenses to continue to increase in connection with our ongoing activities, particularly as we continue to develop our product candidates.

Our expenses could increase beyond our current expectations if the FDA requires us to perform clinical trials and other studies in addition to those that we currently anticipate.

If we receive regulatory approval for any of our product candidates, we may incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution.

In addition, our product candidates, if approved, may not achieve commercial success.

Our revenue, if any, will be derived from sales of products that we do

not expect to be commercially available for a number of years, if at all.

Our revenue, if any, will be derived from sales of products that we do not expect to be commercially available for a number of years, if at all.

Additionally, if we obtain marketing approval for our product candidates, we expect to incur significant expenses related to manufacturing, marketing, sales and distribution and, with respect to certain of our product candidates, the payment of milestone and royalty fees.

Furthermore, we expect to incur additional costs associated with operating as a public company.

As of December 31, 2024, we had cash, cash equivalents and marketable securities of $486.0 million, excluding restricted cash of $3.4 million.

We expect that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operating expenses, financial commitments and other cash requirements for at least 12 months from the date of filing of this report.

We expect that our existing cash, cash equivalents and marketable securities will be sufficient to fund our planned operating and financial commitments and other cash requirements for at least 12 months from the date of filing of this report.

This estimate is based on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we expect.

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We will require additional capital to complete our planned clinical development programs for our current product candidates to seek regulatory approval.

If we receive regulatory approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, sales, marketing and distribution.

Any additional capital-raising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and commercialize our current and future product candidates, if approved.

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Debt financing, if available, could result in increased fixed payment obligations and may involve agreements that include restrictive covenants, such as limitations on our ability to incur additional debt, make capital expenditures, acquire, sell or license intellectual property rights or declare dividends, and other operating restrictions that could hurt our ability to conduct our business.

to our intellectual property future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.

Further, if we raise additional capital through collaborations, strategic alliances, or marketing, distribution, licensing or funding arrangements with third parties, we may have to relinquish valuable rights to our intellectual property future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us.

Credit risk with respect to our investments or the financial institutions at which we deposit funds could adversely affect us.

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If any financial institution with which we have a banking relationship were to be placed into receivership or become insolvent in the future, we may be unable to access, temporarily or over a longer-term, or we may lose, a portion of our funds on deposit with that institution.

For example, on March 10, 2023 and March 12, 2023, Silicon Valley Bank and Signature Bank, respectively, were placed into receivership with the FDIC, which resulted in all funds held at those banks being temporarily inaccessible by their customers.

While we have no relationship with the financial institutions above, any delay in our ability to access our cash, cash equivalents and investments, or the loss of some or all of such funds, could result in us not being able to pay our employees, vendors or others on a timely basis, or at all, and could hinder us from being able to enter into commercial arrangements that could be advantageous to us.

Conversely, if any of our counterparties are impacted by any banking failures, that could impact their ability to transact with us.

Any delay in our ability to access our cash, cash equivalents and investments, or the loss of some or all of such funds, could result in us not being able to pay our employees, vendors or others on a timely basis, or at all, and could hinder us from being able to enter into commercial arrangements that could be advantageous to us.

Conversely, if any of

our counterparties are impacted by any banking failures, that could impact their ability to transact with us.

Any of the foregoing could adversely impact, possibly materially, our business and operations.

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Biotechnology product development is a highly speculative undertaking and involves a substantial degree of risk.

We do not have any products that have received regulatory approval, and therefore we have never generated any revenue from product sales, and we may never be able to develop product candidates that receive regulatory approval or are successfully

commercialized after regulatory approval is received.

Consequently, the revenue-generating potential of our business is unproven and uncertain.

We expect that a substantial portion of our efforts and expenses over the next few years will be devoted to the development of our product candidates;

specifically, completion of our Phase 3 clinical trials of troriluzole in OCD, execution of clinical trials for BHV-7000, including Phase 2/3 studies in epilepsy and bipolar disorder and a Phase 2 study in MDD, completion of a Phase 2/3 clinical trial of troriluzole in glioblastoma, execution of clinical trials for BHV-2000, including a Phase 3 clinical trial in SMA and a Phase 2 clinical trial in metabolic disorders, initiation of a Phase 1 clinical trial for BHV-1300 in immune mediated diseases, and initiation of a Phase 2/3 clinical trial for BHV-8000 in Parkinson's Disease.

specifically, completion of our Phase 3 clinical trials of troriluzole in OCD, completion of clinical trials for BHV-7000, including Phase 2/3 studies in epilepsy and a Phase 2 study in MDD, completion of a Phase 2/3 clinical trial of troriluzole in glioblastoma, execution of a Phase 2 clinical trial for BHV-2000 in metabolic disorders, completion of Phase 2 studies for BHV-2100 in pain and migraine, initiation of a Phase 2/3 clinical trial for BHV-8000 in Parkinson's Disease, completion of Phase 1 clinical trials for BHV-1300, BHV-1400, BHV-1600, BHV-1510, and initiation of Phase 1 clinical trials for BHV-1310 and BHV-1530.

As a result, our business currently depends heavily on the successful development, regulatory approval and, if approved, commercialization of these product candidates.

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For example, in September 2021, we reported negative topline results from our Phase 3 clinical trial evaluating verdiperstat compared to placebo for the treatment of participants with MSA.

In September 2022, we reported negative topline results from the Phase 2/3 HEALEY ALS Platform trial evaluating verdiperstat compared to placebo for the treatment of participants with ALS.

In September 2022, we reported negative

topline results from the Phase 2/3 HEALEY ALS Platform trial evaluating verdiperstat compared to placebo for the treatment of participants with ALS.

At this time, we have no plans to continue development of verdiperstat in ALS, and we are evaluating whether or not to pursue any additional clinical trials evaluating verdiperstat in other disease indications.

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We have limited experience in drug discovery and drug development.

Because we in-licensed some of our investigational agents from other companies, including BHV-2000 from BMS and BHV-5000, we were not involved in and had no control over the preclinical and clinical development of these product candidates prior to entering into these in-license agreements.

Because we in-licensed some of our investigational agents from other companies, including BHV-2000 from BMS, we were not involved in and had no control over the preclinical and clinical development of these product candidates prior to entering into these in-license agreements.

In addition, we are relying on the other companies from which we licensed our investigational agents to have conducted such research and development in accordance with the applicable protocol, legal, regulatory and scientific standards, accurately reported the results of all clinical trials conducted prior to our acquisition of the applicable product candidate, and correctly collected and interpreted the data from these studies and trials.

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Clinical trials may be delayed, suspended or terminated for many reasons, which will increase our expenses and delay the time it takes to develop our product candidates.

We may experience delays in our ongoing or future preclinical studies or clinical trials, and we do not know whether future preclinical studies or clinical trials need to be redesigned, enroll an adequate number of patients on time or begin or be completed on schedule, if at all.

We may experience delays in our ongoing or future preclinical studies or clinical trials, and we do not know whether future preclinical studies or clinical trials will need to be redesigned, enroll an adequate number of patients on time or begin or be completed on schedule, if at all.

The commencement and completion of clinical trials for our clinical product candidates may be delayed, suspended or terminated as a result of many factors, including:

• the FDA or other regulators disagreeing as to the design, protocol or implementation of our clinical trials;

• the delay or refusal of regulators (including the FDA) or institutional review boards (“IRBs”) to authorize us to commence a clinical trial;

• regulators (including the FDA), IRBs, ethics committees of the institutions at which trials are being conducted or the data safety monitoring board for such trials requiring that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements (including the FDA’s current Good Clinical Practice (“GCP”) regulations) or our clinical protocols, safety concerns, adverse side effects, or lack of adequate funding to continue the clinical trial, among others;

• the delay or refusal of regulators (including the FDA) or IRBs to authorize us to commence a clinical trial;

• regulators (including the FDA), IRBs, ethics committees of the institutions at which trials are being conducted or the data safety monitoring board for such trials requiring that we or our investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements (including the FDA’s current GCP regulations) or our clinical protocols, safety concerns, adverse side effects, or lack of adequate funding to continue the clinical trial, among others;

• changes in regulatory requirements, policies and guidelines;

• delays or failure to reach agreement on acceptable terms with prospective clinical research organization (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

among different CROs and trial sites;

delays in patient enrollment and variability in the number and types of patients available for clinical trials;

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Based on feedback received from the FDA, we incorporated trial design modifications that include utilization of a modified SARA scale.

However, notwithstanding the feedback that we have received from the FDA, there remains substantial risk that the FDA or any foreign regulatory agency may nevertheless conclude that

results obtained using the modified SARA scale would not be an adequate basis for approval.

However, notwithstanding the feedback that we have received from the FDA, there remains substantial risk that the FDA or any foreign regulatory agency may nevertheless conclude that results obtained using the modified SARA scale would not be an adequate basis for approval.

In addition, in our Phase 3 clinical trial ("Study BHV4157-206") evaluating the efficacy and safety of troriluzole in adult patients with SCA, the primary endpoint, change from baseline to week 48 on the modified SARA scale, did not reach statistical significance in the overall SCA population as there was less than expected disease progression over the course of the study.

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In July 2023, the FDA informed us that it would not review the recently submitted NDA application for troriluzole given that the study's primary endpoint was not met and thus, would not permit a substantive review.

In September 2024, we announced positive topline results from pivotal Study BHV4157-206-RWE (NCT06529146) demonstrating the efficacy of troriluzole on the mean change from baseline in the f-SARA after 3 years of treatment.

Study BHV4157-206-RWE was designed, in discussion with the FDA, to assess the effectiveness of troriluzole in SCA after 3 years of treatment as measured by the change from baseline in the f-SARA.

The study achieved the primary endpoint and showed statistically significant improvements on the f-SARA at years 1 and 2 and 3 and we submitted an NDA to the FDA in the fourth quarter of 2024 for all of SCA.

In October 2023, the EMA informed us that our MAA for troriluzole (Dazluma) in the treatment of SCA has been validated and is now under review by EMA's CHMP.

In the fourth quarter of 2024, we completed a clarification meeting with the CHMP Rapporteurs.

The MAA documents were subsequently updated with a broader indication to include all SCA genotypes, in light of the new positive BHV4157-206-RWE study data.

We generally plan to seek regulatory approval to commercialize our product candidates in the United States, the EU and other key global markets, which requires compliance with numerous and varying regulatory requirements of such other countries regarding safety, efficacy, chemistry, manufacturing and controls, clinical trials, commercial sales, pricing and distribution of our product candidates.

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If we fail to obtain approval in any jurisdiction, the geographic market for our product candidates could be limited.

Moreover, even if we were to obtain approval to market any product candidate we develop, regulatory authorities may approve any of our product candidates for fewer or more limited indications than we request, may not approve the price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

Any of the foregoing scenarios could

materially harm the commercial prospects for our product candidates.

price we intend to charge for our products, may grant approval contingent on the performance of costly post-marketing clinical trials, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates.

Our product candidates may fail to demonstrate safety and efficacy in clinical trials, or may cause serious adverse or unacceptable side effects that could prevent or delay regulatory approval and commercialization, limit the commercial profile of an approved label, increase our costs, necessitate the abandonment or limitation of the development of some of our product candidates or result in significant negative consequences following marketing approval, if any.

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Occurrence of serious treatment-related side effects could impede subject recruitment and clinical trial enrollment or the ability of enrolled patients to complete the trial, delay the clinical trial, and prevent receipt of regulatory approval from the FDA and other regulators.

They could also adversely affect physician or

patient acceptance of our product candidates or result in potential product liability claims.

They could also adversely affect physician or patient acceptance of our product candidates or result in potential product liability claims.

Any of these occurrences may harm our business, financial condition and prospects significantly.

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We are exposed to potential product liability and professional indemnity risks that are inherent in the research, development, manufacturing, marketing, and use of pharmaceutical products.

The current and future use of product candidates by us in clinical trials, and the sale of any approved products in the future, may expose us to liability claims.

The current and future use of product

candidates by us in clinical trials, and the sale of any approved products in the future, may expose us to liability claims.

These claims might be made by patients that use the product, healthcare providers, pharmaceutical companies, or others selling such products.

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Physicians and patients may not comply with any warnings that identify known potential adverse effects or identify patients who should not use our product candidates.

Although we maintain product liability insurance coverage, such insurance may not be adequate to cover

all our liabilities.

We may need to increase our insurance coverage each time we commence a clinical trial and if we successfully commercialize any product candidate.

Although we maintain product liability insurance coverage, such insurance may not be adequate to cover all our liabilities.

We routinely review our insurance coverage in consideration of our ongoing clinical trials and anticipated commercial operations.

As the expense of insurance coverage is increasing, we may not be able to maintain insurance coverage at a reasonable cost or in an amount adequate to satisfy any liability that may arise.

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If serious adverse events or other undesirable side effects are identified during the use of our product candidates in trials, it may adversely affect our development of such product candidates.

Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt nonclinical studies and clinical trials, or could make it more difficult for us to enroll patients in our clinical trials.

Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt preclinical studies and clinical trials, or could make it more difficult for us to enroll patients in our clinical trials.

If serious adverse events or other undesirable side effects or unexpected characteristics of our product candidates are observed in investigator-sponsored trials, further clinical development of such product candidate may be delayed or we may not be able to continue development of such product candidate at all, and the occurrence of these events could have a material adverse effect on our business.

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Factors that may affect our ability to commercialize our product candidates on our own include:

recruiting and retaining adequate numbers of effective sales and marketing personnel, obtaining access to or persuading adequate numbers of physicians to prescribe our product candidates, and other

unforeseen costs associated with creating an independent sales and marketing organization.

recruiting and retaining adequate numbers of effective sales and marketing personnel, obtaining access to or persuading adequate numbers of physicians to prescribe our product candidates, and other unforeseen costs associated with creating an independent sales and marketing organization.

Developing a sales and marketing organization requires significant investment, is time-consuming and could delay the launch of our product candidates.

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If we continue to pursue these indications, we would face substantial competition from companies that develop or sell products that treat OCD.

With respect to BHV-5000, which we are developing for the treatment of neuropsychiatric conditions the market size and competition will depend on each indication.

Many of the companies which we are competing with or which we may compete with in the future have significantly greater financial resources and expertise in

research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do.

Many of the companies which we are competing with or which we may compete with in the future have significantly greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals and marketing approved drugs than we do.

These third parties compete with us in recruiting and retaining qualified scientific and management personnel, establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Mergers and acquisitions in the biopharmaceutical industry could result in even more resources being concentrated among our competitors.

Mergers and acquisitions in the biopharmaceutical industry have resulted in and could in the future result in even more resources being concentrated among our competitors.

Competition may further increase as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in the biopharmaceutical industry.

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Our ability to achieve acceptable levels of coverage and reimbursement for products by third-party payors will have an effect on our ability to successfully commercialize our product candidates, if approved, and attract additional collaboration partners to invest in the development of our product candidates.

Assuming we obtain coverage

for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.

Assuming we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.

We cannot be sure that coverage and adequate reimbursement in the United States, the EU or elsewhere will be available for any product that we may develop, and any reimbursement that becomes available may be decreased or eliminated in the future.

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Even if we show improved efficacy or improved convenience of administration with our product candidates, pricing of existing drugs may limit the amount we will be able to charge for our product candidates, once approved.

These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in product development.

These payors may deny or revoke the reimbursement status of a given product or establish prices for new or

existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in product development.

There is significant uncertainty related to the insurance coverage and reimbursement of newly approved products.

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As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Furthermore, rules and regulations regarding reimbursement change frequently, in some cases at short notice, and we believe that changes in these rules and regulations are likely.

Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such

organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates.

We expect to experience pricing pressures in connection with the sale of any of our product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes.

Furthermore, rules and regulations regarding reimbursement change frequently, in some cases at short notice, and we believe that further changes in these rules and regulations are likely.

Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our product candidates, if approved.

We expect to experience pricing pressures in connection with the sale of any of our approved product candidates due to the trend toward managed healthcare, the increasing influence of health maintenance organizations and additional legislative changes.

The downward pressure on healthcare costs in general, particularly prescription drugs and surgical procedures and other treatments, has become very intense.

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Even if we obtain regulatory approval for any of our product candidates, they will be subject to extensive and ongoing regulatory requirements for manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promoting, sampling and record-keeping.

These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with current good manufacturing practices (“cGMP”) regulations and GCPs, for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize such products.

These requirements include submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP regulations and GCPs, for any clinical trials that we conduct post-approval, all of which may result in significant expense and limit our ability to commercialize such products.

In addition, any regulatory approvals that we receive for our product candidates may also be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product candidate.

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Even if any of our product candidates receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payors and others in the medical community necessary for commercial success.

Even if the FDA approves the marketing of any product candidates that we develop, physicians,

patients, third-party payors or the medical community may not accept or use them.

Even if the FDA approves the marketing of any product candidates that we develop, physicians, patients, third-party payors or the medical community may not accept or use them.

Efforts to educate the medical community and third-party payors on the benefits of our product candidates may require significant resources and may not be successful.

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The FDA may not approve an ANDA for a generic product until any applicable period of non-patent exclusivity for the reference listed drug has expired.

Federal Food, Drug, and Cosmetic Act (the “FDCA”) provides a period of five years of non-patent exclusivity for a new drug containing a new chemical element (“NCE”).

The FDCA provides a period of five years of non-patent exclusivity for a new drug containing a new chemical element (“NCE”).

Specifically, in cases where such exclusivity has been granted, an ANDA may not be submitted to the FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification that a patent covering the reference listed drug is either invalid or will not be infringed by the generic product, in which case the applicant may submit its application four years following approval of the reference listed drug.

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Manufacturers may seek to launch these generic products following the expiration of the applicable marketing exclusivity period, even if we still have patent protection for our product.

Competition that our products may face from generic versions of our products could materially and adversely impact our future revenue, profitability and cash flows and substantially limit our ability to obtain a

return on the investments we have made in those product candidates.

Risks Related to Our Dependence on Third Parties

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Once we have established contractual relationships with such third-parties, we will have only limited control over their actual performance of these activities.

We and our CROs and other vendors are required to comply with cGMP, GCP and good laboratory practices (“GLP”), which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the EU and any comparable foreign regulatory authorities for all of our product candidates in preclinical and clinical development.

We and our CROs and other vendors are required to comply with cGMP, GCP and GLP, which are regulations and guidelines enforced by the FDA, the Competent Authorities of the Member States of the EU and any comparable foreign regulatory authorities for all of our product candidates in preclinical and clinical development.

Regulatory authorities enforce these regulations through periodic inspections of trial sponsors, principal investigators, clinical trial sites and other contractors.

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Our failure to comply with these requirements may require us to repeat clinical trials, which would delay the regulatory approval process.

While we will have agreements governing their activities, we are not, and will not be able to control whether or not our CROs devote sufficient time and resources to our future preclinical and clinical

These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials, or other drug development activities which could harm our business.

While we will have agreements governing their activities, we are not, and will not be, able to control whether or not our CROs devote sufficient time and resources to our future preclinical and clinical programs.

These CROs may also have

relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials, or other drug development activities which could harm our business.

If our CROs do not successfully carry out their contractual duties or obligations, or fail to meet expected deadlines, or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for any other reason, our clinical trials may be extended, delayed or terminated, the clinical data generated in our clinical trials may be deemed unreliable, and we may not be able to obtain regulatory approval for, or successfully commercialize any product candidate that we develop.

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Our ability to develop our product candidates depends and our ability to commercially supply our products will depend, in part, on our ability to successfully obtain the active pharmaceutical ingredients (“APIs”) and other substances and materials used in our product candidates from third parties and to have finished products manufactured by third parties in accordance with regulatory requirements and in sufficient quantities for preclinical and clinical testing and commercialization.

If we fail to develop and

maintain supply relationships with these third parties, we may be unable to continue to develop or commercialize our product candidates.

If we fail to develop and maintain supply relationships with these third parties, we may be unable to continue to develop or commercialize our product candidates.

In addition, our results of operations and cash flows could be adversely impacted by any inability to obtain favorable terms from our suppliers, including any acceleration of payment terms to our suppliers and/or the imposition of more restrictive credit terms and other contractual requirements.

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Further, if the safety of any product or product candidate or component is compromised due to a failure to adhere to applicable laws and regulatory requirements, or for other reasons, we may not be able to successfully commercialize or obtain regulatory approval for the affected product or product candidate, and we may be held liable for injuries sustained as a result.

Any of these factors could cause a delay or

termination of preclinical studies, clinical trials or regulatory submissions or approvals of our product candidates, and could entail higher costs or result in our being unable to effectively commercialize our approved products on a timely basis, or at all.

Any of these factors could cause a delay or termination of preclinical studies, clinical trials or regulatory

submissions or approvals of our product candidates, and could entail higher costs or result in our being unable to effectively commercialize our approved products on a timely basis, or at all.

We may rely on certain third parties as the sole source of the materials they supply or the finished products they manufacture.

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If the FDA or a comparable foreign regulatory agency does not approve these facilities for the supply or manufacture of our product candidates, or if it withdraws its approval in the future, we may need to find alternative supply or manufacturing facilities, which would negatively impact our ability to develop, obtain regulatory approval of or market our product candidates, if approved.

We expect to continue to depend on third-party contract suppliers and manufacturers for the

foreseeable future, but supply and manufacturing arrangements do not guarantee that a contract supplier or manufacturer will provide services adequate for our needs.

We expect to continue to depend on third-party contract suppliers and manufacturers for the foreseeable future, but supply and manufacturing arrangements do not guarantee that a contract supplier or manufacturer will provide services adequate for our needs.

We and our contract suppliers and manufacturers may attempt to improve production processes, certain aspects of which are complex and unique, and we may encounter difficulties with new or existing processes.

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As we prepare for later-stage clinical trials and potential commercialization, we will need to take steps to increase the scale of production of our product candidates, which may include transferring production to new third-party suppliers or manufacturers.

In order to conduct larger or late-stage scale clinical trials for our product candidates and supply sufficient commercial quantities of the resulting drug product and its components, if that product candidate is approved for sale, our contract manufacturers and suppliers will need to produce our product candidates in larger

quantities, more cost effectively and, in certain cases, at higher yields than they currently achieve.

We, or our manufacturers, may be unable to successfully increase the manufacturing capacity for any of our product candidates in a timely or cost-effective manner, or at all.

We, or our manufacturers, may be unable to successfully increase the manufacturing capacity for any of our product candidates in a timely or cost-effective

manner, or at all.

In addition, quality issues may arise during scale-up activities because of the inherent properties of a product candidate itself or of a product candidate in combination with other components added during the manufacturing and packaging process, or during shipping and storage of the APIs or the finished product.

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In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us.

Whether we reach a definitive agreement for a collaboration will depend, among other things, upon our assessment of the collaborator’s resources and expertise, the terms and conditions of the proposed

collaboration and the proposed collaborator’s evaluation of a number of factors.

Those factors may include the design or results of clinical trials, the likelihood of approval by regulatory authorities, the potential market for the subject product candidate, the costs and complexities of manufacturing and delivering such product candidate to patients, competing or alternative products, the existence of uncertainty with respect to our ownership of technology, which can exist if there is a challenge to such ownership without regard to the merits of the challenge, and industry and market conditions generally.

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We are subject to federal, state, local, international and transnational laws and regulations, including the operating, quality and security standards of the FDA, the U.S.

Department of

Health and Human Services (“HHS”), and other regulatory authorities such as the EMA, and in the future, any changes to such laws and regulations could adversely affect us.

In particular, changes in the FDA’s regulation of drug discovery and development or manufacturing processes could adversely affect our results of operations and financial condition.

Department of Health and Human Services (“HHS”), and other regulatory authorities such as the EMA, and in the future, any changes to such laws and regulations could adversely affect us.

In particular, changes in the FDA’s

regulation of drug discovery and development or manufacturing processes could adversely affect our results of operations and financial condition.

We may be required to register for permits and/or licenses with the FDA, HHS, or other regulatory authorities such as the EMA, and there can be no assurance that we will be able to maintain or renew existing permits, licenses or other regulatory approvals or obtain, without significant delay, future permits, licenses or other approvals needed for the operation of our business.

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For example, in March 2010, the Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (together, the "ACA") was enacted, which substantially changed the way healthcare is financed by both governmental and private insurers.

In addition, other federal health reform measures have been proposed and adopted in the United States since the ACA was enacted.

These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011 (known as Medicare sequestration) and subsequent extensions, which began in 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2032 unless additional Congressional action is taken.

Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.

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HHS moved 30% of Medicare payments to alternative payment models tied to the quality or value of services in 2016.

Additionally, HHS had set a goal of moving 50% of Medicare payments into these alternative payment models by the end of 2018, but in 2019, it discontinued this performance goal and replaced it with a new developmental goal to increase the percentage of Medicare health care dollars tied to APMs incorporating downside risk, with a target of 40% for fiscal year 2021.

Additionally, HHS has set a developmental goal to increase the percentage of Medicare health care dollars tied to APMs incorporating downside risk, with a target of 55% for fiscal year 2024 and 60% for fiscal year 2025.

We expect that additional U.S.

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congressional inquiries and proposed and enacted state and federal legislation designed to, among other things, bring more transparency to drug pricing, review the relationship between pricing and manufacturer patient programs, reduce the costs of drugs under Medicare and reform government program reimbursement methodologies for drug products.

HHS has already started the process of soliciting feedback on some of

these measures and, at the same time, is immediately implementing others under its existing authority.

For example, in September 2018, CMS announced it will allow Medicare Advantage Plans the option to use step therapy for Part B drugs beginning January 1, 2019, and in May 2019, CMS finalized a new rule that would require direct-to-consumer television advertisements of prescription drugs and biological products, for which payment is available through or under Medicare or Medicaid, to include in the advertisement the Wholesale Acquisition Cost, or list price, of that drug or biological product.

However, this rule was struck down by a federal court before it went into effect.

Although some of these and other proposals will require authorization through additional legislation to become effective, members of Congress and the Biden Administration have stated that they will continue to seek new legislative and administrative measures to control drug costs.

In response to an Executive Order from President Biden, the Secretary of HHS issued a comprehensive plan for addressing high drug prices that describes a number of legislative approaches and identifies administrative tools to address the high cost of drugs.

In late 2021, Democrats included drug pricing reform provisions reflecting elements of the plan in a broader spending package—such as capping Medicare Part D patients’ out-of-pocket costs, establishing penalties for drug prices that increase faster than inflation in Medicare, and authorizing the federal government to negotiate prices on certain select, high-cost drugs under Medicare Parts B and D.

HHS has already started the process of soliciting feedback on some of these measures and, at the same time, is immediately implementing others under its existing authority.

The IRA, enacted in August 2022, among other things directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

These provisions have started to take effect progressively starting in fiscal year 2023, although the Medicare drug price negation program is currently subject to legal challenges.

The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

HHS has issued and will continue to issue and update guidance as these programs are implemented.

In January 2025, President Trump revoked several Biden-era executive orders which included efforts to lower the cost of prescription drugs for people on Medicare and Medicaid, increasing protections for Medicaid enrollees and enhancing the Affordable Care Act.

Notably, Biden’s Executive Order 14087, which ordered the testing of three new Medicare and Medicaid pricing negotiation models, was revoked.

It is currently unclear how the IRA will be implemented, but it could have a significant impact on companies in the pharmaceutical industry that are within its scope.

The Company does not currently have any drugs that are impacted by the IRA.

At the state level, legislatures are increasingly 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.

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This could reduce the ultimate demand for our products or put pressure on our product pricing, which could negatively affect our business, results of operations, financial condition and prospects.

On May 30, 2018, the Trickett Wendler, Frank Mongiello, Jordan McLinn, and Matthew Bellina Right to Try Act of 2017 was signed into law.

The law, among other things, provides a federal framework for patients to access certain investigational new drug products that have completed a Phase 1 clinical trial.

Under certain circumstances, eligible patients can seek treatment without enrolling in clinical trials and without obtaining FDA approval under the FDA expanded access program.

Further, the Supreme Court struck down the Chevron doctrine in June 2024 in Loper Bright Enterprises v.

Raimondo and Relentless Inc.

Department of Commerce .

The Chevron doctrine gave deference to regulatory agencies in litigation against the FDA and other agencies.

As a result, more companies may bring lawsuits against the FDA to challenge longstanding decisions and policies of the FDA, which could undermine the FDA’s authority, lead to uncertainties in the industry and disrupt the FDA’s normal operations, which could delay the FDA’s review of our applications.

In the EU, similar political, economic and regulatory developments may affect our ability to profitably commercialize any of our product candidates, if approved.

In addition to continuing pressure on prices and cost containment measures, legislative developments at the EU or member state level may result in significant additional requirements or obstacles that may increase our operating costs.

In addition to continuing pressure on prices and cost containment measures,

legislative developments at the EU or member state level may result in significant additional requirements or obstacles that may increase our operating costs.

The delivery of healthcare in the EU, including the establishment and operation of health services and the pricing and reimbursement of medicines, is almost exclusively a matter for national, rather than EU, law and policy.

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similar to the U.S.

federal Anti-Kickback

Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”) enacted as part of the American Recovery and Reinvestment Act of 2009, and its implementing regulations, and as amended again by the Modifications to the HIPAA Privacy, Security, Enforcement and Breach Notification Rules Under HITECH and the Genetic Information Nondiscrimination Act;

Other Modifications to the HIPAA Rules, commonly referred to as the Final HIPAA Omnibus Rule, published in January 2013, which imposes certain obligations, including mandatory contractual terms, on covered entities subject to HIPAA (i.e., health plans, healthcare clearinghouses and certain healthcare providers), as well as their business associates that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health information, to safeguard the privacy, security and transmission of individually identifiable health information from any unauthorized use or disclosure;

Other Modifications to the HIPAA Rules, commonly referred

to as the Final HIPAA Omnibus Rule, published in January 2013, which imposes certain obligations, including mandatory contractual terms, on covered entities subject to HIPAA (i.e., health plans, healthcare clearinghouses and certain healthcare providers), as well as their business associates that perform certain services for or on their behalf involving the use or disclosure of individually identifiable health information, to safeguard the privacy, security and transmission of individually identifiable health information from any unauthorized use or disclosure;

• the FDCA, which prohibits, among other things, the adulteration or misbranding of drugs, biologics and medical devices;

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federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources;

• state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and

other remuneration and items of value provided to healthcare professionals and entities;

• state laws and regulations that require drug manufacturers to file reports relating to pricing and marketing information, which requires tracking gifts and other remuneration and items of value provided to healthcare professionals and entities;

• state and local laws that require the registration of pharmaceutical sales representatives;

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Regulatory authorities in some jurisdictions, including the United States and the EU, may designate drugs for relatively small patient populations as orphan drugs.

Under the Orphan Drug Act, the FDA may designate a product as an orphan drug

if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States.

Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States.

Generally, if a product with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing exclusivity, which precludes the FDA or the EMA from approving another marketing application for the same drug for the same indication during that time period.

The applicable period is seven years in the United States and ten years in the EU.

The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified.

The European exclusivity period can be reduced to six years if a drug no longer meets the criteria for orphan drug designation or if the drug is

sufficiently profitable so that market exclusivity is no longer justified.

Orphan drug exclusivity may be lost if the FDA or the EMA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

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Moreover, because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve over time as new guidance becomes available.

This evolution may result

in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices.

This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to our disclosure and governance practices.

If we fail to address and comply with these regulations and any subsequent changes, we may be subject to penalty and our business may be harmed.

Disruptions at the FDA and other government agencies could hinder their ability to hire and retain key leadership and other personnel, prevent new products from being developed or commercialized in a timely manner, or otherwise prevent those agencies from performing normal business functions, which could negatively impact our business and the approval of an NDA, BLA or similar application.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including the ability to hire and retain key personnel, including senior leadership, government budget and funding levels and related government shutdowns, the ability to accept the payment of user fees, and statutory, regulatory, and policy changes.

Average review times at the agency have fluctuated in recent years as a result.

In addition, government funding of the FDA and other government agencies on which our operations may rely is subject to the impacts of political events, which are inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which could adversely affect our business.

For example, over the last several years, the U.S.

government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA and other government employees and stop critical activities.

If a prolonged government shutdown occurs in the future, it could significantly impact the ability of the FDA to timely review and process our submissions.

In addition, FDA-regulated industries, such as ours, face substantial uncertainty in regard to the regulatory environment we will face as we proceed with research and development efforts under the new presidential Administration in the U.S.

For example, recent personnel reduction measures have significantly impacted and could continue to impact the FDA’s ability to hire and retain key personnel, which could result in delays or limitations on our ability to obtain guidance from the FDA on our product candidates in development and obtain the requisite regulatory approvals in the future.

Moreover, the new Administration has proposed action to freeze or reduce the budget of the NIH as relates to its funding for medical research, which could in turn decrease the ability of facilities that rely on NIH funding to enroll and conduct clinical trials or increase the costs to us of conducting clinical trials.

State governments may attempt to address or react to changes at the federal level with changes to their own regulatory frameworks in a manner that is adverse to our operations.

If we become negatively impacted by future governmental orders, regulations, policies or guidance, there could be a material adverse effect on us and our business.

Changes to legislation or regulations in the British Virgin Islands could lead to increased costs for us to comply with additional regulatory and reporting requirements.

As the global regulatory and tax environment evolves, we may be subject to new or different statutory and regulatory requirements.

For example, on January 1, 2019, the Economic Substance (Companies and Limited Partnerships) Act, 2018 of the British Virgin Islands (the “Economic Substance Act”) came into force and was amended on October 1, 2019 and June 29, 2021 and remains subject to further amendments, additional regulations and guidance on interpretation from the regulator.

For example, on January 1, 2019, the Economic Substance (Companies and Limited Partnerships) Act, 2018

of the British Virgin Islands (the “Economic Substance Act”) came into force and was amended on October 1, 2019 and June 29, 2021 and remains subject to further amendments, additional regulations and guidance on interpretation from the regulator.

We strive to conduct our business in a manner that is in compliance with the Economic Substance Act.

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In the biopharmaceutical industry, a substantial portion of an innovative product’s commercial value is usually realized during the period in which the product has market exclusivity.

A product’s market exclusivity is

generally determined by two forms of intellectual property:

A product’s market exclusivity is generally determined by two forms of intellectual property:

patent rights held by the innovator company and any regulatory forms of exclusivity to which the innovative drug is entitled.

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The FDA cannot approve an ANDA until after the innovator’s listed patents expire unless there is a successful patent challenge.

However, after the innovator has marketed its product for four years, a generic manufacturer may file an ANDA and allege that one or more of the patents listed in the Orange Book under an innovator’s NDA is either invalid or not infringed (a Paragraph IV certification).

However, after the innovator has marketed its product for four years, a generic manufacturer may file an ANDA and allege that one or more of the patents listed in the Orange Book under an

innovator’s NDA is either invalid or not infringed (a Paragraph IV certification).

The innovator then must decide whether to file a patent infringement suit against the generic manufacturer.

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Biologic products

healthcare legislation enacted in 2010 created an approval pathway for biosimilar versions of innovative biological products that did not previously exist.

The ACA created an approval pathway for biosimilar versions of innovative biological products that did not previously exist.

Prior to that time, innovative biologics had essentially unlimited regulatory exclusivity.

Under the new regulatory mechanism, the FDA can approve products that are similar to (but not generic copies of) innovative biologics on the basis of less extensive data than is required by a full Biologics License Application

After an innovator has marketed its product for four years, any manufacturer may file an application for approval of a “biosimilar” version of the innovator product.

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A typical route used by innovator companies to obtain marketing authorization of pharmaceutical products in the EU is through the “centralized procedure.” A company seeking to market an innovative pharmaceutical product through the centralized procedure must file a complete set of safety data and efficacy data as part of a MAA with the EMA.

EMA evaluates the MAA, it provides a recommendation to the EC and the EC then approves or denies the MAA.

After the EMA evaluates the MAA, it provides a recommendation to the EC and the EC then approves or denies the MAA.

It is also possible for new chemical products to obtain marketing authorization in the EU through a “mutual recognition procedure,” in which an application is made to a single member state, and if the member state approves the pharmaceutical product under a national procedure, then the applicant may submit that approval to the mutual recognition procedure of some or all other member states.

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In certain EU countries, this process can take place simultaneously while the product is marketed but in other EU countries, this process must be completed before the company can market the new product.

The pricing and reimbursement procedure can take months and sometimes years to complete.

Throughout the EU, all products for which marketing authorizations have been filed after October/November 2005 are subject to an “8+2+1” regime.

The pricing and reimbursement

procedure can take months and sometimes years to complete.

Throughout the EU, all products for which marketing authorizations have been filed are subject to an “8+2+1” regime.

Eight years after the innovator has received its first community authorization for a medicinal product, a generic company may file a MAA for that product with the health authorities.

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In Japan, medicines of new chemical entities are generally afforded eight years of data exclusivity for approved indications and dosage.

pharmaceutical products are enforceable.

Patents on pharmaceutical products are enforceable.

Generic copies can receive regulatory approval after data exclusivity and patent expirations.

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If we are unable to obtain licenses from third parties on commercially reasonable terms or lose our rights to such licensed intellectual property, or if our rights are determined to be narrower than we understand them to be, we may not be able to continue developing or commercializing our product candidates.

We are a party to a number of license agreements under which we are granted rights to intellectual property that are important to our business, including, for example, an agreement with ALS Biopharma and Fox Chase Chemical Diversity Center, Inc., pursuant to which we were assigned intellectual property rights relating to troriluzole, a license agreement with Yale University, pursuant to which we were granted certain patent rights to develop and commercialize riluzole-based products, another license agreement with Yale University pursuant to which we acquired exclusive, worldwide rights to Yale's intellectual property directed to its MoDE platform, a license agreement with Highlightll, pursuant to which we were granted exclusive rights to develop and commercialize Highlightll’s brain penetrant dual TYK2/JAK1 inhibitor program, a license agreement with Bristol-Myers Squibb, pursuant to which we were granted exclusive rights to develop and commercialize taldefgrobep alfa, license agreements with AstraZeneca, pursuant to which we were granted exclusive licenses relating to BHV-5500 and verdiperstat, a license agreement with AstraZeneca, pursuant to which we were granted an exclusive license to BHV-2200, and a license agreement with KU Leuven, pursuant to which we were granted an exclusive license to develop and commercialize the TRPM3 antagonist platform.

We are a party to a number of license agreements under which we are granted rights to intellectual property that are important to our business, including, for example, an agreement with ALS Biopharma and Fox Chase Chemical Diversity Center, Inc., pursuant to which we were assigned intellectual property rights relating to troriluzole, a license agreement with Yale University, pursuant to which we were granted certain patent rights to develop and commercialize riluzole-based products, another license agreement with Yale University pursuant to which we acquired exclusive, worldwide rights to Yale's intellectual property directed to its MoDE platform, a license agreement with Highlightll, pursuant to which we were granted exclusive rights to develop and commercialize Highlightll’s brain penetrant dual TYK2/JAK1 inhibitor program, a license agreement with Bristol-Myers Squibb, pursuant to which we were granted exclusive rights to develop and commercialize taldefgrobep alfa, and a license agreement with KU Leuven, pursuant to which we were granted an exclusive license to develop and commercialize the TRPM3 antagonist platform.

We may enter into additional license agreements in the future.

Our existing license agreements impose, and we expect that future license agreements will impose on us, various development, regulatory and/or commercial

diligence obligations, payment of milestones and/or royalties and other obligations, such as non-compete periods for certain collaboration targets and rights of first negotiation for development of certain programs.

Our existing license agreements impose, and we expect that future license agreements will impose on us, various development, regulatory and/or commercial diligence obligations, payment of milestones and/or royalties and other obligations, such as non-compete periods for certain collaboration targets and rights of first negotiation for development of certain programs.

Typically, in our licenses, we have control over the filing, prosecution, maintenance and enforcement of the licensed intellectual property.

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If we fail to comply with any of our obligations under a current or future license agreement, the licensor may allege that we have breached our license agreement, and may seek to terminate our license.

Termination of any of our current or future licenses could result in our loss of the right to use the licensed intellectual property, which could materially adversely affect our ability to develop, manufacture or commercialize a product candidate or product, if approved, as well as harm our competitive business position and our business prospects.

as harm our competitive business position and our business prospects.

Under some license agreements, termination may also result in the transfer of or granting of rights under certain of our intellectual property and information related to the product candidate being developed under the license, such as regulatory information.

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The Hatch-Waxman Amendments permit a patent term extension of up to five years for a patent covering an approved product as compensation for effective patent term lost during product development and the FDA regulatory review process, subject to a statutory maximum of fourteen (14) years from the regulatory approval and an additional six months of pediatric exclusivity if available.

Similar regulations regarding patent term extensions, or supplementary protection

certificates, are available in some countries such as the EU, United Kingdom, Japan and Korea.

Similar regulations regarding patent term extensions, or supplementary protection certificates, are available in some countries such as the EU, United Kingdom, Japan and Korea.

However, we may not receive a patent term restoration, a supplementary protection certificate or extension if we fail to satisfy applicable requirements.

Moreover, the length of the extension could be less than we request.

If we are unable to obtain a patent term restoration, a supplementary protection certificate or extension, or the term is less than we request, the period during which we can enforce our patent rights for that product will be shortened and our competitors may obtain approval to market competing products sooner.

may obtain approval to market competing products sooner.

As a result, our revenue from applicable products could be reduced.

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There is a risk that third parties may choose to engage in litigation with us to enforce or to otherwise assert their patent rights against us.

Even if we believe such claims are without merit, a court of competent jurisdiction could hold that these third-party patents are valid, enforceable and infringed, and the holders of any such patents may be able to block our ability to commercialize such product candidate unless we obtained a license under the applicable patents, or until

such patents expire or are finally determined to be invalid or unenforceable.

Similarly, if any third-party patents were held by a court of competent jurisdiction to cover aspects of our technology, such as our compositions, formulations, or methods of treatment, prevention or use, the holders of any such patents may be able to block our ability to develop and commercialize the applicable product candidate unless we obtained a license.

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During the course of any intellectual property litigation, there could be public announcements of the results of hearings, rulings on motions or other interim proceedings in the litigation.

If securities analysts or

investors regard these announcements as negative, the perceived value of our product candidates, programs or intellectual property could be diminished and the market price of our common stock could decline.

If securities analysts or investors regard these announcements as negative, the perceived value of our product candidates, programs or intellectual property could be diminished and the market price of our common stock could decline.

Such announcements could also harm our reputation or the market for our future products, which could have a material adverse effect on our business.

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(ii) government action is necessary to meet public health or safety needs;

or (iii) government action is necessary to meet requirements

for public use under federal regulations (also referred to as “march-in rights”).

or (iii) government action is necessary to meet requirements for public use under federal regulations (also referred to as “march-in rights”).

• We rely on trade secrets, including unpatented know-how, technology and other proprietary information, to maintain our competitive position.

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The competition for qualified personnel in the biopharmaceutical field is intense, and our future success depends upon our ability to attract, retain and motivate highly-skilled scientific, technical and managerial employees.

We face competition for personnel from other companies, universities, public and private research institutions and other

organizations.

We face competition for personnel from other companies, universities, public and private research institutions and other organizations.

If our recruitment and retention efforts are unsuccessful in the future, it may be difficult for us to implement business strategy, which could harm our business.

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This type of breach of our cybersecurity may compromise our confidential information or our financial information and adversely affect our business, reputation, financial condition, results of operations or result in legal proceedings.

Additionally, the collection, use, disclosure, transfer, or other processing of personal data regarding individuals in the EU, including date concerning health, is subject to the EU General Data Protection Regulation, or GDPR, which became effective on May 25, 2018.

The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing data concerning health and other sensitive data, obtaining consent of the individuals to whom the personal data relates to process their personal data, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing

notification of data breaches, and taking certain measures when engaging third-party processors.

The GDPR also imposes strict rules on the transfer of personal data to countries outside the EU, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global turnover, whichever is greater.

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laws governing international business activities, including U.S.

economic sanctions, export controls and anti-corruption laws, including the Foreign Corrupt Practices Act (the "FCPA"), compliance with which is expensive and difficult, particularly in countries in which corruption is a recognized problem.

economic sanctions, export controls and anti-corruption laws, including the FCPA, compliance with which is expensive and difficult, particularly in countries in which corruption is a recognized problem.

As a result, these laws may preclude us from developing, manufacturing or selling certain product candidates outside of the United States, which could limit our growth potential and increase our development costs.

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Violations of U.S.

sanctions, export controls and anti-corruption laws, or allegations of such acts, could damage our reputation and subject us to civil or criminal investigations in the United States and in other jurisdictions and related shareholder lawsuits, could lead to substantial civil and criminal, monetary and nonmonetary penalties and could cause us to incur significant legal and investigatory fees which could adversely affect our business, consolidated financial condition and results of operations.

We expect to expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

As our clinical development progresses, we expect to experience growth in the number of our employees and the scope of our operations, particularly in the areas of clinical operations, regulatory affairs and, if any of our product candidates receives marketing approval, sales, marketing and distribution.

To manage our anticipated future growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel.

Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel.

economic sanctions, export controls and anti-corruption laws, or allegations of such acts, could damage our reputation and subject us to civil or criminal investigations in the United States and in other jurisdictions and related shareholder lawsuits, could lead to substantial civil and criminal, monetary and nonmonetary penalties and could cause us to incur significant legal and investigatory fees which could adversely affect our business, consolidated financial condition and results of operations.

We have expanded and expect to further expand our development and regulatory capabilities and potentially implement sales, marketing and distribution capabilities, and as a result, we may encounter difficulties in managing our growth, which could disrupt our operations.

As our clinical development progresses, we have experienced and expect to continue to experience growth in the number of our employees and the scope of our operations, particularly in the areas of clinical operations, regulatory affairs and, if any of our product candidates receives marketing approval, sales, marketing and distribution.

To manage our growth, we must continue to implement and improve our managerial, operational and financial systems, expand our facilities and continue to recruit and train additional qualified personnel.

Due to our limited financial resources and the limited experience of our management team in managing a company with such growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel.

The expansion of our operations may lead to significant costs and may divert our management and business development resources.

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We are exposed to the risk that our employees, independent contractors, consultants, commercial collaborators, principal investigators, CROs and vendors may engage in fraudulent conduct or other illegal activity.

Misconduct by these parties could include intentional, reckless or negligent conduct or unauthorized activities that violates (1) the laws and regulations of the FDA, the EMA and other similar regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities, (2) manufacturing standards, (3) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and abroad and (4) laws that require the true, complete and accurate reporting of financial information or data.

In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and

other abusive practices.

true, complete and accurate information to such authorities, (2) manufacturing standards, (3) federal and state data privacy, security, fraud and abuse and other healthcare laws and regulations in the United States and abroad and (4) laws that require the true, complete and accurate reporting of financial information or data.

In particular, sales, marketing and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.

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We may be subject to securities litigation, which is expensive and could divert management attention.

Our share price may be volatile, and in the past companies that have experienced volatility in the market price of their shares have been subject to securities class action litigation.

Our share price has been and may continue to be volatile, and in the past companies that have experienced volatility in the market price of their shares have been subject to securities class action litigation.

This risk is especially relevant for us because biotechnology companies have experienced significant share price volatility in recent years.

Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business.

Any lawsuit to which we are a party, with or without merit, may result in an unfavorable judgment.

We also may decide to settle lawsuits on unfavorable terms.

Any such negative outcome could result in payments of substantial damages or fines, damage to our reputation or adverse changes to our offerings or business practices.

Defending against litigation is costly and time-consuming, and could divert our management’s attention and resources.

Furthermore, during the course of litigation, there could be negative public announcements of the results of hearings, motions or other interim proceedings or developments, which could have a negative effect on the market price of our common shares.

Any of the foregoing could seriously harm our business.

Risks Related to Ownership of Our Common Shares

An active trading market for our common shares may not be sustained, or be liquid enough for investors to resell our common shares quickly or at the market price.

Our common shares began trading on the NYSE on October 4, 2022.

Although trading in our common shares has developed, we cannot assure you that an active trading market will be sustained or that any trading

market will continue to be liquid.

If an active market for our common shares is not sustained, it may be difficult for our shareholders to sell shares without depressing the market price for the shares or to sell their shares at all.

An inactive market may also impair our ability to raise capital to continue to fund operations by selling our common shares and may impair our ability to acquire other companies or technologies by using our common shares as consideration.

The trading price of our common shares has in the past been and could in the future be volatile and fluctuate due to factors beyond our control, and purchasers of our common shares could incur substantial losses.

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• publication of research reports or comments by securities or industry analysts;

• failure to attract or retain of key personnel;

• failure to attract or retain key personnel;

• sales of our common shares, including sales by our directors and officers or specific shareholders;

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• other factors described in this “Risk Factors” section and elsewhere in this Annual Report on Form 10-K.

These and other market and industry factors may cause the market price and demand for our securities to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from selling their common shares at or above the price paid for the shares and may otherwise negatively affect the liquidity of our common shares.

Some companies that have experienced volatility in the trading price of their shares have been the subject of securities class action litigation.

Any lawsuit to which we are a party, with or without merit, may result in an unfavorable judgment.

We also may decide to settle lawsuits on unfavorable terms.

Any such negative outcome could result in payments of substantial damages or fines, damage to our reputation or adverse changes to our offerings or business practices.

Defending against litigation is costly and time-consuming, and could divert our management’s attention and resources.

These and other market and industry factors have caused and may in the future cause the market price and demand for our securities to fluctuate substantially, regardless of our actual operating performance, which may limit or prevent investors from selling their common shares at or above the price paid for the shares and may otherwise negatively affect the liquidity of our common shares.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, the price of our common shares and our trading volume could decline.

The trading market for our common shares will depend in part on the research and reports that securities or industry analysts publish about us or our business.

Equity research analysts may elect not to initiate, and our current equity research analysts may not elect to continue to provide research coverage of our

common shares, and such lack of research coverage may adversely affect the market price of our common shares.

Even if we do have equity research analyst coverage, we will not have any control over the analysts or the content and opinions included in their reports.

The trading market for our common shares depends in part on the research and reports that securities or industry analysts publish about us or our business.

Equity research analysts may elect not to initiate, and our current equity research analysts may not elect to continue to provide research coverage of our common shares, and such lack of research coverage may adversely affect the market price of our common shares.

We do not have any control over the analysts or the content and opinions included in their reports.

The price of our shares could decline if one or more equity research analysts downgrade our shares or issue other unfavorable commentary or research.

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• limit the ability of members to requisition and convene general meetings of members;

our members without shareholder approval, which could be used to institute a shareholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our Board.

• authorize our Board to issue preferred shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preferred shares without any further vote or action by our members without shareholder approval, which could be used to institute a shareholder rights plan, or so-called “poison pill,” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by our Board.

Any provision of our Amended Memorandum and Articles of Association or BVI law that has the effect of delaying or deterring a change of control could limit the opportunity for our shareholders to receive a premium for their common shares, and could also affect the price that some investors are willing to pay for our common shares.

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Accordingly, investors cannot rely on dividend income from our common shares and any returns on an investment in our common shares will likely depend entirely upon any future appreciation in the price of our common shares.

Effective December 31, 2023, we are a large accelerated filer and no longer qualify as a smaller reporting company or emerging growth company, which will increase our costs and demands on management.

Based on the Company’s public float as of June 30, 2023, we became a “large accelerated filer” and lost “emerging growth company” status on December 31, 2023.

Additionally, due to the Company’s public float as of June 30, 2023, we no longer qualify as a “smaller reporting company.” However, we are not required to reflect the change in our “smaller reporting company” status, or comply with the associated increased

disclosure obligations, until our quarterly report for the three-month period ended March 31, 2024.

Due to this upcoming transition, we are devoting significant time and efforts to implement and comply with the additional standards, rules and regulations that will apply to us upon becoming a large accelerated filer and losing our smaller reporting company and emerging growth company status, diverting such time from the day-to-day conduct of our business operations.

Compliance with the additional requirements of being a large accelerated filer have increased our legal, accounting and financial compliance costs as of year-end, and these costs will continue to increase.

These requirements include, but are not limited to:

• compliance with the auditor attestation requirements in the assessment of our internal control over financial reporting;

• compliance with any requirement that is adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements;

• full disclosure obligations regarding executive compensation in our periodic reports and proxy statements;

• compliance with the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Due to the complexity and logistical difficulty of implementing the standards, rules and regulations that apply to a large accelerated filer, there is an increased risk that we may be found to be in non-compliance with such standards, rules and regulations or to have significant deficiencies or material weaknesses in our internal controls over financial reporting.

Any failure to maintain effective disclosure controls and internal control over financial reporting could materially and adversely affect our business, results of operations, and financial condition and could cause a decline in the trading price of our common shares.

We are a BVI business company limited by shares and the holders of our common shares may have fewer protections as a shareholder of our company, because judicial precedent regarding the rights of shareholders is more limited under BVI law than that under U.S.

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The rights of shareholders to take legal action against our directors, actions by minority shareholders and the fiduciary responsibilities of our directors under BVI law are to a large extent governed by the common law of the BVI.

law of the BVI is derived in part from comparatively limited judicial precedent in the BVI as well as from English common law, which has persuasive, but not binding, authority on a court in the BVI.

The common law of the BVI is derived in part from comparatively limited judicial precedent in the BVI as well as from English common law, which has persuasive, but not binding, authority on a court in the BVI.

The rights of our shareholders and the fiduciary responsibilities of our directors under BVI law therefore are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States.

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The circumstances in which any such action may be brought, and the procedures and defenses that may be available in respect to any such action, may result in the rights of shareholders of a BVI business company being more limited than those of shareholders of a company organized in the United States.

Accordingly, shareholders may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred.

Accordingly, shareholders

may have fewer alternatives available to them if they believe that corporate wrongdoing has occurred.

The BVI courts are also unlikely to:

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or (ii) to impose liabilities against us, in original actions brought in the BVI, based on certain civil liability provisions of U.S.

securities laws that are penal in nature or that relate to taxes or similar fiscal or revenue obligations or would be

viewed as contrary to BVI public policy or the proceedings pursuant to which judgment was obtained were contrary to natural justice.

securities laws that are penal in nature or that relate to taxes or similar fiscal or revenue obligations or would be viewed as contrary to BVI public policy or the proceedings pursuant to which judgment was obtained were contrary to natural justice.

There is no statutory recognition in the BVI of judgments obtained in the United States.

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• If the company or a director of the company engages in or proposes to engage in conduct, that contravenes the BVI Act or our Amended Memorandum and Articles of Association, a shareholder may apply to the BVI court for an order directing the company or its director(s) to comply with or restraining the company or a director from engaging in conduct that contravenes the BVI Act or our Amended Memorandum and Articles of Association.

• Under the BVI Act, minority shareholders have a statutory right to bring a derivative action in the name of

and on behalf of the company in circumstances where the company has a cause of action against its directors.

• Under the BVI Act, minority shareholders have a statutory right to bring a derivative action in the name of and on behalf of the company in circumstances where the company has a cause of action against its directors.

This remedy is available at the discretion of the BVI court which will take a number of factors into account before granting or refusing a leave to proceed to the relevant shareholder, including whether such action is in the interests of the company, the cost of such action and whether there are alternative remedies that the shareholder concerned may rely upon.

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(3) acts that infringe on the personal rights of the shareholders, such as the right to vote;

and (4) where the company has not complied with provisions requiring approval of the shareholders, which are more

limited than the rights afforded minority shareholders under the laws of many states in the United States.

and (4) where the company has not complied with provisions requiring approval of the shareholders, which are more limited than the rights afforded minority shareholders under the laws of many states in the United States.

Having regard to the above, the protection available to minority shareholders under BVI law may be more limited than under the laws of some jurisdictions in the United States.

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We may also become subject to income, withholding or other taxes in jurisdictions by reason of our activities and operations, and it is possible that taxing authorities in such jurisdictions could assert that we are subject to greater taxation than we currently anticipate.

Since 2017, the G20/OECD Inclusive Framework has been working on addressing the tax challenges arising from the digitalization of the economy and has proposed a two-pillar tax approach with pillar one referring to the re-allocation of taxing rights, addressing issues such as where tax should be paid and on what basis (i.e., where sustained and significant business is conducted, regardless of a physical presence), and pillar two ensuring a minimum tax to be paid by multinational enterprises.

We are unable to predict when and how the Inclusive Framework agreement will be enacted into law in the countries in which we operate, and it is possible that the implementation of the Inclusive Framework agreement, including the global minimum corporate tax rate, could have a material effect on our liability for corporate taxes and our consolidated effective tax rate when we fall into the scope of the rules.

In particular, the Organization for Economic Co-operation and Development and the G20 Inclusive Framework on Base Erosion and Profit Shifting (the “Inclusive Framework”) has put forth two proposals—Pillar One and Pillar Two—that revise the existing profit allocation and nexus rules and ensure a minimal level of taxation, respectively.

On December 12, 2022, the European Union member states agreed to implement the Inclusive Framework’s global corporate minimum tax rate of 15%, and various countries (both within and outside the European Union) have enacted new law implementing Pillar Two or have draft legislation proposed for adoption.

The OECD continues to release additional guidance on the two-pillar framework, with widespread implementation anticipated in 2024.

We are continuing to evaluate the potential impact on future periods of the Inclusive Framework, pending legislative adoption by individual countries, which could have an adverse impact on our effective tax rate, income tax expense and cash flows.

If we are or become a passive foreign investment company, there could be adverse U.S.

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Our Amended Memorandum and Articles of Association provide that unless we consent in writing to the selection of an alternative forum, the courts of the British Virgin Islands shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or other employee of the Company to the Company or the Company’s members, (iii) any action asserting a claim arising pursuant to any provision of British Virgin Islands law or the Amended Memorandum and Articles of Association, or (iv) any action asserting a claim against the Company governed by the internal affairs doctrine, and that each shareholder consents to the exclusive jurisdiction of the courts of the British Virgin Islands over all such claims or disputes.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over actions brought under the Securities Act or the rules and regulations promulgated thereunder.

Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over

actions brought under the Securities Act or the rules and regulations promulgated thereunder.

Furthermore, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.

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Any person or entity purchasing or otherwise acquiring any of our shares or other securities, whether by transfer, sale, operation of law or otherwise, shall be deemed to have notice of and have irrevocably agreed and consented to these provisions.

action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could have an adverse effect on our business, results of operations and financial condition.

The market price and trading volume of our common shares may be volatile.

The market price of our common shares could fluctuate significantly for many reasons, including in response to the risk factors listed in this Annual Report on Form 10-K or for reasons unrelated to our specific performance, such as reports by industry analysts, investor perceptions, or negative developments for our customers, competitors or suppliers, as well as general economic and industry conditions.

If we are unable to satisfy the requirements of Section 404 of the Sarbanes-Oxley Act, or our internal control over financial reporting is not effective, the reliability of our financial statements may be questioned and our share price may suffer.

Section 404 of the Sarbanes-Oxley Act requires any company subject to the reporting requirements of the U.S.

securities laws to do a comprehensive evaluation of its and its consolidated subsidiaries’ internal control over financial reporting.

To comply with this statute, we are required to document and test our internal control procedures, our management is required to assess and issue a report concerning our internal control over financial reporting, and our independent auditors is required to issue an opinion on the Company’s internal controls over financial reporting.

The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation to meet the detailed standards under the rules.

During the course of its testing, our management may identify material weaknesses or deficiencies which may not be remedied in time to meet the deadline imposed by the Sarbanes-Oxley Act.

If our management cannot favorably assess the effectiveness of our internal control over financial reporting or our auditors identify material weaknesses in our internal controls, investor confidence in our financial results may weaken, and our share price may suffer.

It is possible that a court could find such a choice of forum provision to be inapplicable or unenforceable, and if a court were to find this provision in our Amended Memorandum and Articles of Association to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could have an adverse effect on our business, results of operations and financial condition.

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 1A. Risk Factors