HCW Biologics Inc. 10-K

Item 1. Business. Overview HCW Biologics Inc. (“HCWB” or the “Company”) is a clinical-stage biopharmaceutical company developing proprietary immunotherapies to treat diseases promoted by chronic inflammation, especially age-related and senescence-associated diseases. Our immunotherapeutics represent a new class of drug that we believe has the potential to fundamentally change the treatment of cancer and many other diseases and conditions that are promoted by chronic inflammation — and in doing so, improve patients’ quality of life and possibly extend longevity. While chronic inflammation is possible at any age, it is more common as we age. In this case, the condition is known as inflammaging. The induction and retention of low-grade inflammation in an aging human body is mainly the result of the accumulation of non-proliferative but metabolically active senescent cells, which can also be caused by persistent activation of immune cells. Chronic inflammation, including inflammaging, is believed to be a significant contributing factor to the cause for senescence-associated diseases and conditions that diminish health span, including many types of cancer, autoimmune diseases, and neurodegenerative diseases, as well as indications that impact quality-of-life that are not life-threatening. Senescence is a physiologic process important in promoting wound healing, tissue homeostasis, regeneration, embryogenesis, fibrosis regulation, and tumorigenesis suppression. However, accumulation of senescent cells with Senescence-Associated Phenotype (“SASP”) proinflammatory factors has been implicated as a major source of chronic sterile inflammation leading to many aging-related pathologies. SASP factors, including proinflammatory cytokines, chemokines, and proteinases, drive an inflammation cycle. Senescence is considered a stress response and can be induced by a wide range of intrinsic and extrinsic insults. Over time, these insults cause normal tissue cells to enter a senescent state of irreversible growth arrest accompanied by the release of SASP factors. The inflammation cycle promoted by SASP factors also activates immune cells. Similar to senescent cells, prolonged activation of immune cells promote the release of highly proinflammatory cytokines. Unresolved activation of immune cells leads to chronic low-grade inflammation, which perpetuates this cycle. Studies have shown that strategies to reduce or eliminate senescent cells can delay, prevent, and improve age-related dysfunctions, including cancer. Unfortunately, to date, there has been limited clinical success in targeting senescent cell accumulation or aberrant inflammasome activity using small molecule-based approaches. Preclinical research and preliminary results from first-in-human clinical trials indicate that our immunotherapeutic approach may achieve success for cancer indications, and many other age-related diseases and conditions. We believe our lead product candidates represent a novel immunotherapeutic approach and a clinically promising new class of senotherapeutic drugs for the treatment of age-related diseases. The Company has developed two different drug discovery and development platforms, our legacy TOBI™ (Tissue factOr-Based fusIon) platform and our newly developed targeted platform technology – the T-cell Receptor β Chain constant region (“TRBC”) platform: • The TOBI platform is designed to engineer multi-functional fusion protein molecules and protein complexes. It employs a Tissue Factor (“TF”) scaffold that can be packaged with multiple protein targets, including cytokines, chemokines, ligands, receptors, and single-chain antibodies. • The Company invented its second-generation platform, the TRBC platform, to create novel immunotherapeutics designed to treat diseases, including cancer, as well as improve quality-of-life conditions. The immunotherapeutics created using the TRBC platform include multi-specific cytokines, targeted second-generation immune checkpoint inhibitors, and immune-cell engagers, which have the capabilities to activate subsets of immune cells that specifically target cancerous or infected cells. As of July 13, 2024, the Company, Dr. Wong, Altor BioScience, LLC, NantCell, Inc. and ImmunityBio, Inc. (collectively, Altor BioScience, LLC, NantCell, Inc. and ImmunityBio Inc. will be referred to herein as “ImmunityBio”), entered into a Settlement Agreement that is described in Part I, Item 3. – “Legal Proceedings” below. The Settlement Agreement eliminated the uncertainty of the outcome of the previously disclosed Arbitration proceedings and provided clarity for the future direction and emphasis of our clinical development strategy. The settlement involved intellectual property the Company developed based on our proprietary TOBI TM drug discovery platform and its unique Tissue-Factor scaffold used to create protein-fusion molecules. 3 Our clinical development program is based on a few select lead product candidates which will be evaluated in Company-sponsored clinical trials in autoimmune disorders, solid tumors and quality-of-life conditions. We have a large portfolio of non-core programs and assets and, for these, we anticipate that clinical development will be conducted through licensing agreements and other business development transactions. HCWB has an experienced team led by Dr. Hing C. Wong, our Founder and CEO, who discovered and developed the immunotherapeutic Anktiva® (also known as ALT-803, an IL-15 agonist receptor) through pivotal trials. This blockbuster immunotherapeutic treatment for cancer was sold to ImmunityBio, Inc. in 2017 in a $1.0 billion acquisition. Anktiva® was approved by the U.S. Food and Drug Administration (“FDA”) for a bladder cancer indication in 2024. Clinical-Stage Compounds HCW9302: Novel Immunotherapeutics for T reg Expansion HCW9302 is an injectable, first-in-kind interleukin 2 (“IL-2”) fusion protein complex constructed using the Company’s proprietary TOBI platform technology. Its mechanism of action involves binding to IL-2αβγ receptors predominantly expressed on regulatory T (“T reg ”) cells, thereby activating and expanding T reg cells that can suppress unwanted immune and inflammatory responses. The FDA recently cleared us to initiate a Phase 1 clinical study using HCW9302 to treat alopecia areata. Our strategy is to expand to other indications upon successful completion of the Phase 1 study. HCW9302 is a fusion protein molecule that contains two IL-2 domains linked by an extracellular tissue factor domain. IL-2 signaling is essential for homeostasis of T reg cells. Unfortunately, recombinant IL-2 has an unfavorable pharmacokinetic profile and induces cytokine release syndrome limiting its therapeutic use. HCW9302 provides a potential solution to this problem. It is designed to have the therapeutic advantages of IL-2 while being well tolerated. In our preclinical and non-human primate studies, we found that HCW9302 exhibited a longer serum half-life with an approximately 1,000-fold higher affinity for the IL2Rα than IL-2. In addition, preclinical studies have shown HCW9302 can be administered at a dosing range that expanded and activated T reg cells but not CD4 + effector T cells. CD4 + effector T cells (also known as helper T cells) are crucial for immune responses, but under certain conditions, their excessive activation can lead to negative effects like inflammation, tissue damage, and autoimmune reactions, particularly when they become dysregulated and target self-antigens, contributing to conditions like multiple sclerosis, rheumatoid arthritis, and inflammatory bowel disease. We believe our preclinical studies in relevant animal models of dermatological conditions, graft rejection, atherosclerosis, diabetes, and neurodegenerative diseases as well as IND-enabling studies conducted in non-human primates support the clinical development of HCW9302 as a potential therapeutic agent for treatment of autoimmune and proinflammatory diseases. HCW9201 + HCW9206: Novel Immunotherapeutic for Memory-Like Natural Killer Cell On December 24, 2020, the Company entered into an exclusive worldwide license with Wugen, Inc. (“Wugen”) for ex vivo rights for two of its proprietary molecules. Wugen is evaluating natural killer (“NK”) cell therapy generated using HCW9206 in combination with HCW9201 in clinical trials in cancer indications. HCW9206 has a unique design consisting of a multi-functional compound constructed with three powerful cytokines: IL-7, IL-15, and IL-21. It is designed to stimulate T cell proliferation and activation, enhance NK cell cytotoxicity, and improve overall immune surveillance against pathogens or tumors. HCW9201 + HCW9206, known as WU-NK-101, is Wugen’s lead memory NK cell therapy product and is comprised of cells optimized for anti-cancer function. WU-NK-101 cells possess a unique cytokine-induced memory-like phenotype that supports enhanced anti-tumor activity, robust trafficking, superior proliferation capacity, and metabolic flexibility, all of which contribute to treatment resilience in the adverse tumor microenvironment. Wugen is currently evaluating WU-NK-101 in a Phase 1 open-label study designed to characterize the safety, tolerability, and preliminary anti-tumor activity of WU-NK-101 in combination with cetuximab in patients with advanced and/or metastatic colorectal cancer (Cohort 1), and in patients with advanced and/or metastatic squamous cell carcinoma of head and neck (Cohort 2). The overall study will be comprised of two phases, a Dose Escalation Phase, and a Cohort Expansion Phase. The Company retained the in vivo rights to HCW9201 and HCW9206, as well as the manufacturing rights. Wugen obtains clinical supply from the Company under the provisions of a development supply agreement. 4 Clinical-Stage Compound Awaiting Completion of Supply Agreement with ImmunityBio HCW9218: Novel Bifunctional Immunotherapeutic with TGF-β Trap HCW9218 is a clinical-stage bifunctional molecule that is designed to impact senescence by reducing senescent cells (i.e., senescent-cell-reducing effect) and eliminating the proinflammatory factors they secrete (i.e., senomorphic effect). Subcutaneous administration of HCW9218 activates NK cells, innate lymphoid group-1, and CD8 + T cells, and neutralizes TGF-β. In the Settlement Agreement reached with ImmunityBio on July 13, 2024, the Company agreed to transfer rights to develop HCW9218 for cancer indications to ImmunityBio. HCW Biologics retained exclusive rights to develop treatments for all other age-related diseases other than cancer using HCW9218. In future clinical development, we will be able to use the HCW9218 Recommended Phase 2 Dose (“RP2D”) and other learnings based on findings in the Phase 1 and Phase 1b cancer studies, which wrapped up at the beginning of 2024. These studies include: • A single-center Investigator-sponsored Phase 1 clinical trial was initiated in May 2022 and patient enrollment, dosing and the safety-evaluation period for this study were completed in February 2024. In this study, the Masonic Cancer Center, University of Minnesota (“UMN”) evaluated HCW9218 in patients with solid tumor cancers that progressed after at least two lines of standard-of-care treatment. Dr. Melissa A. Geller, M.D., M.S., Professor and Division Director of Gynecologic Oncology in the Department of Obstetrics, Gynecology and Women’s Health at UMN, served as a Principal Investigator of this trial. At the time that the Phase 1 study was completed in February, over 70% of patients with ovarian cancer (5/7) showed evidence of stable disease. • A multi-center Company-sponsored Phase 1b/2 clinical trial was initiated in October 2022 and patient enrollment, dosing and the safety-evaluation period for the Phase 1b portion of the study were completed in February 2024. In this study, 15 patients have received at least one dose of HCW9218 and completed the 28-day safety evaluation period, with no dose-limiting toxicities (“DLTs”). At the time that the Phase 1b portion of the study was completed in February 2024, 13% (2/15) of patients who participated in the study showed evidence of stable disease. The Company had the non-exclusive rights to develop HCW9218 treatment for ovarian cancer in a neoadjuvant setting, based on a Phase 2 clinical study sponsored by the University of Pittsburgh Medical Center (“UPMC”). Under the terms of the Settlement Agreement, UPMC had until year end of 2024 to launch this study, but failed to do so. Thus, the Company terminated this study. Under the Settlement Agreement, the Company agreed to transfer the HCW9218 master cell line to ImmunityBio. In turn, ImmunityBio agreed to enter into a supply agreement with the Company by the end of January 2025 to ensure the Company had adequate clinical supply of HCW9218 available to carry on clinical studies. As of the reporting date, a draft of the supply agreement has not been provided by ImmunityBio. Until the supply agreement is in place, any plans for our further development of HCW9218 must be delayed. Preclinical Compounds HCW11-006: Multi-Functional Immune Cell Stimulator This product candidate is the subject of the exclusive worldwide license agreement the Company entered with WY Biotech Co., Ltd. (“WY Biotech”), a China-based company specializing in the early-stage development of recombinant protein drugs and gene/cell therapies, on November 17, 2024 (the “WY Biotech License”). Under the WY Biotech License, WY Biotech has rights to in vivo applications for HCW11-006. The Company retains ex vivo rights. Under the terms of the WY Biotech license agreement, the Company has an “opt-in right” for United States, Canada, Central America, and South America markets for no cost, that may be exercised after the completion of a Phase 1 trial in China. WY Biotech is responsible for all of the costs for the Phase 1 clinical study. HCW11-006 was constructed using the TRBC drug development platform. It combines several different immune functional domains on our new protein scaffold platform as part of our Class I portfolio. Our preclinical studies demonstrated that this multi-functional product candidate is highly effective at inducing CD8 + T cell and NK cell responses without triggering unwanted side effects in human immune cell and animal models. HCW11-006 also exhibited anti-tumor efficacy in relevant solid tumor animal models. We believe it has the potential to be one of the most potent immunostimulatory agents we have developed during our team members’ 30 years of biotech research. Additional studies are being conducted to verify that HCW11-006 should combine well with other therapies, including immune checkpoint inhibitors, immune cell engagers, therapeutic antibodies, and CAR-T therapies, which the Company is conducting with world leaders in these areas. The Company and collaborators intend to share their findings in a pivotal scientific paper published in a top-tier peer-reviewed journal. 5 Other Preclinical Programs Our future clinical development will focus on our T-cell Receptor β Chain constant region (“TRBC”) drug discovery and development platform. The Company has constructed over 50 compounds using the TRBC platform, which we group into three different classes, as defined by their construction and potential mechanism of action. We are in the process of selecting lead compounds for each program, and then to determine from the compounds selected which ones we will develop on our own and those we will develop with a partner through out-licensing arrangements or other business development transactions. The table below summarizes our preclinical programs by classes: Preclinical TRBC-Based Molecules Drug Development Programs Classes Description of Programs I Multi-functional immune cell stimulators • HCW11-006 is the selected lead product candidate for this class. • Potent immunostimulatory agent to use in combination with standard-of-care therapy. • Preclinical studies in human immune cells animal models demonstrate HCW11-006 is highly effective at inducing CD8 + T cell and NK cell responses without triggering unwanted side effects. • HCW11-006 also exhibits anti-tumor efficacy in relevant solid tumor animal models. • Prioritized for development through exclusive, worldwide license with WY Biotech. II Second-generation immune checkpoint inhibitors • We have a group of compounds in this class and are currently assessing them in order to identify the strongest candidate for clinical development. • Developing a second-generation Keytruda® for oncology & other senescence associated indications. • Prioritized for in-house development. III Multi-specific targeting fusions and immune cell engagers • Class III TRBC Molecules are second-generation immune-cell engagers capable of targeting tissue factor and other cell-surface antigens associated with diseased cells. These drugs work by recruiting and activating T-cells or NK cells, types of white blood cell, to recognize and attack cancer cells. • Our first compound in this class is HCW11-018, and we are collaborating with others to develop versions with different targeting capabilities. • The size and scale of the GLP preclinical and clinical studies required for the development of Class III Molecules is more appropriate for well-capitalized Big Pharma. • Prioritized for development through licensing with Big Pharma. Clinical Development Strategy Our goal is to develop transformative immunotherapies to lengthen health span by disrupting the link between cellular senescence, chronic inflammation, and age-related diseases and conditions. Based on human-data read-out from clinical studies and extensive preclinical research, we believe that our data point toward the possibility we have created a new class of immunotherapeutics for cancer and other age-related diseases, and beyond therapies that to slow down or reverse the effects of aging itself. 6 We have constructed second-generation immunotherapeutics that we believe could represent a new class of drugs with the potential to fundamentally transform the treatment of diseases and conditions promoted by chronic inflammation, especially those related to aging – enhancing health span through the treatment for indications that enhance quality-of-life and extending longevity by developing treatments for indications for which there are no known cures. The future of the Company’s clinical development will be primarily based on the molecules we have constructed with the TRBC drug development platform. These compounds offer the potential to treat oncology, autoimmune diseases, infectious diseases, and chronic inflammatory conditions, offering broader therapeutic targets and more adaptable solutions compared to the Company’s TOBI platform. The TRBC platform’s flexibility and capacity to bind multiple targets allow for more precise and potentially more effective treatments. By targeting specific cell-surface antigens, these novel therapeutics can improve patient clinical outcomes, offering potential benefits across a wider range of indications. The Company will select molecules for in-house development and those which are strong candidates to be developed with a partner through a licensing agreement. In settling the Arbitration with ImmunityBio, the Company removed uncertainty regarding our rights to TOBI-based molecules. With this clarity, we forged a new path for our clinical development for molecules created with the TOBI platform. We will continue to develop HCW9302, our lead product candidate, for which the FDA recently cleared us to initiate a Phase 1 clinical study in alopecia areata. Our strategy is to expand to other indications upon successful completion of the Phase 1 study. We are less certain about the path forward for HCW9218, now a Phase 2 compound. We have exclusive rights to develop HCW9218 for non-oncology indications, but due to uncertainty of clinical supply from the sole source, ImmunityBio, it might not be practical for the Company to pursue clinical development of HCW9218. The TOBI platform will not be used to develop any new compounds for future clinical development. Out-Licensing, Cooperative Agreements and Strategic Collaborations We continue to pursue our strategy of out-licensing certain rights outside of our focus areas, as further discussed under “—Out-License Programs.” The Company continues to evaluate its portfolio to identify compounds which may be good candidates for licensing or other collaborations, where it will be to our advantage to leverage the expertise and financial strength of a partner in the development of a compound or market. We signed our first out-license agreement at the end of 2020, when we entered into an exclusive worldwide license (the “Wugen License”) with Wugen, a company that specializes in cell-based therapies for cancer. Wugen licensed limited rights to develop, manufacture, and commercialize cell-based therapy treatments for cancer based on two of our internally-developed, multi-cytokine fusion protein molecules, HCW9201 and HCW9206. Wugen has created an off-the-shelf NK-cell treatment called WU-NK-101 based on the licensed molecules. On November 17, 2024, HCW Biologics entered into an exclusive worldwide license agreement with WY Biotech for the rights to develop and commercialize in vivo applications of one of HCWB’s preclinical product candidates, HCW11-006. WY Biotech Co., Ltd. is a China-based company specializing in the early-stage development of recombinant protein drugs and gene/cell therapies. HCW Biologics has a payment-free, milestone-free, and royalty-free option to recapture the development and commercialization rights of this molecule for in vivo applications in the United States, Canada, Central America, and South America (“Opt-in Territory”) after the conclusion of the Phase 1 clinical trial. WY Biotech is financially responsible for all costs associated with research and development, manufacturing, clinical development, regulatory approval, and commercialization for the molecule As reported in the Company’s Form 8-K filed with the SEC on March 19, 2025, on March 18, 2025, the Company and WY Biotech agreed to amend the WY Biotech License Agreement. The Company has now completed extensive preclinical studies that further support our belief in the potential for HCW11-006 for both an in vivo and ex vivo therapy. The in vivo therapy is licensed by WY Biotech, however, the Company retained all rights to the ex vivo therapy and applications as a reagent in cell-based therapy treatments, including cell-based therapies, such as CAR-T therapies. The Company considers WY Biotech License provisions for the Opt-In Right to take over the development of HCW11-006 for the Americas markets to be an important feature of the WY Biotech License. We believe our right to recapture this market is a potentially high value opportunity. Further, we will be able to base our decision to opt-in on the human-data read-out from a Phase 1 clinical trial, which will mitigate our development risks and provide valuable clinical information about the potential for the indications we will use for Phase 2 clinical studies. 7 HCW Biologics Clinical Development Pipeline The clinical development progress of our lead immunotherapeutic programs is summarized in the table below: HCW Biologics Pipeline 1. As a result of the Settlement Agreement and Release HCWB entered into with ImmunityBio on July 13, 2024, the Company retains perpetual, exclusive worldwide rights to develop immunotherapeutic treatments based on HCW9218 for aging-related diseases other than cancer. Our ability to continue development of HCW9218 depends on a supply agreement with ImmunityBio, who controls the master cell bank. ImmunityBio is obligated under the terms of the Settlement Agreement to enter into a supply agreement with the Company not later than January 2025. As of the reporting date, we have not received a draft of the supply agreement. 2. WY Biotech holds the exclusive worldwide license rights to HCW11-006 for in vivo applications. 3. Wugen holds an exclusive worldwide license for the ex vivo rights for two of our molecules, HCW9201 and HCW9206, with rights limited to the development of cell-based therapy treatments for cancer using the licensed molecules. Wugen’s lead clinical program, WU-NK-101, is based on molecules licensed from our Company. We have retained all other rights to HCW9201 and HCW9206, including, but not limited to, manufacturing rights and treatment based on subcutaneous injection. HCW9302: Novel Immunotherapeutic for T reg Expansion On January 28, 2025, the Company obtained clearance of its IND from the FDA to initiate a first-in-human Phase 1 dose escalation clinical trial to evaluate one of its lead drug candidates, HCW9302, in patients with moderate-to-severe alopecia areata, a common autoimmune disease in humans that currently has no curative FDA approved treatments. This will be a Phase 1, open-label, multi-center Company-sponsored trial with competitive enrollment. The study involves dose escalation to determine the toxicity profile of HCW9302 and to designate a dose level for the Phase 2 expansion phase, or the Recommended Phase 2 Dose (“RP2D”). Up to five dose levels will be evaluated. A stepped-down dose level will be provided in the event that unacceptable toxicity is encountered at the planned initial dose level. In the first stage of the study, HCW9302 will be administered subcutaneously in a single dose. Depending on the results of the single ascending dose stage, a multi-dose study of HCW9302 administered subcutaneously every 28 days for four consecutive treatments will be considered. 8 With the start of the first-in-human clinical trial for HCW9302 in alopecia areata, we are one step closer to advancing a potentially transformative immunotherapeutic treatment of autoimmune diseases. This trial is a milestone for our Company, and the beginning of clinical development of treatments for quality-of-life indications. While not life-threatening, alopecia areata has no cure and diminishes the quality of life for those suffering with this disease. Existing treatments may provide some relief of symptoms, but there are often dangerous side effects. If this Phase 1 study is successful, we intend to rapidly expand clinical development of HCW9302 in Phase 2 studies in patients with other autoimmune diseases and serious inflammatory conditions, including other dermatological conditions, graft rejection, and neurodegenerative diseases. 9 Our Approach We believe we have an innovative strategy to treat age-related diseases. Our unique approach is to utilize our internally-developed drug discovery platforms to create novel multi-functional immunotherapeutics to rejuvenate the immune system. With our platform technologies, we have generated product candidates that are designed to direct the immune system against solid tumors, therapy-induced senescence and the adverse side effects triggered by existing standard-of-care treatments for solid tumors and hematological cancers. We have developed product candidates that are designed to direct the immune system against inflammation allowing for the potential to treat a wide variety of autoimmune and proinflammatory diseases. Our approach is to develop immunotherapies that reduce or eliminate the main drivers of chronic inflammation by addressing the underlying development and sustainment of these processes, as depicted in the image below: The Science of Chronic Inflammation While inflammation is part of the normal repair response for healing, when it becomes prolonged and persists, it is damaging and destructive. Several common molecular pathways have been identified that are associated with chronic low-grade inflammation, especially common as we age. Our view is that there are two primary underlying processes that drive chronic inflammation: accumulation of senescent cells and persistent activation of immune cells . Both of these processes generate pro-inflammatory factors that drive senescence. The induction and retention of low-grade inflammation in an aging human body is mainly the result of the accumulation of non-proliferative but metabolically active senescent cells, which can also be caused by persistent activation of immune cells. These two elements share common mechanisms in promoting secretion of pro-inflammatory proteins and in many cases interact to drive senescence, and thus, inflammaging. Our novel approach is to reduce senescent cells and eliminate the pro-inflammatory factors they secrete systemically through multiple pathways. We believe our novel immunotherapeutic approach has the potential to fundamentally change the treatment of age-related diseases. 10 Senescent cells remain metabolically active and can influence tissue hemostasis, disease, and aging through their SASP factors. Senescence is considered to be a physiologic process and is important in promoting wound healing, tissue homeostasis, regeneration, and regulation of fibrosis. Senescence also plays a role in tumor suppression. The accumulation of senescent cells, due to the aging of our immune cells, drives aging and age-related diseases and conditions. The SASP factors can trigger chronic inflammatory responses and consequently augment chronic inflammatory conditions to promote tumor growth. The connection between senescence and aging was initially based on the observation that senescent cells accumulate in aged tissue. The use of transgenic models has enabled the detection of senescent cells systematically in many age-related disorders. Studies have demonstrated that senescent cells play an adverse role in age-related disorders. By leveraging our immunology expertise, we are developing potentially transformative immunotherapy candidates that use T reg cell expansion and senescent cell reduction to address chronic inflammation linked especially to age-related diseases. Our approach is to develop immunotherapies that reduce or eliminate the main drivers of chronic inflammation by addressing the underlying development and sustainment of these processes. Using our drug discovery platforms, we have created over 50 molecules, all of which can be administered by subcutaneous injection as well as used in adoptive cell therapy approaches. These modular and tunable technologies have allowed us to generate a novel pipeline of internally developed product candidates we believe are capable of activating and targeting desired immune responses and blocking unwanted immunosuppressive activities. Chronic Inflammation with Aging: Inflammaging Inflammaging is a state of chronic inflammation believed to develop with advancing age. Accumulation of senescent cells, along with the SASP factors they secrete, has been implicated as a major source of chronic sterile inflammation leading to many age-related pathologies. Demographically, the world is rapidly growing older and more prone to inflammaging. All countries face major challenges to ensure that their health and social systems are ready to make the most of this demographic shift. According to the World Health Organization, in 2020, the number of people aged 60 years and older outnumbered children younger than 5 years. By 2030, 1 in 6 people in the world will be aged 60 years or over. In 2020, the population aged 60 years and over was estimated to be 1.4 billion people. By 2050, the world’s population of people aged 60 years and older is expected to double to 2.1 billion people. As we grow older, a series of complex changes ripple through our immune system. Rising levels of inflammatory factors lead to unresolved, degenerative immune responses. Mounting evidence suggests that this inflammation undermines many bodily systems, accelerates biological aging and contributes to age-related diseases, such as cancer, cardiovascular disease, diabetes, and neurodegenerative disease. Senescence: SASP Factors Secreted by Senescent Cells Trigger Chronic Inflammatory Responses Cellular senescence is a biological condition resulting from the impact of stressors, such as chemotherapy, radiation, and pollutants, on human cells. These stressors reduce natural human cell cytotoxicity, leading to the accumulation of senescent cells and SASP factors. Considered harmful to neighboring cells, secreted SASP factors also activate a type of protein molecule called inflammasomes that accelerate the increasingly persistent cycle of inflammation. As we age, senescent cells accumulate, and SASP factors increase, leading to low-grade, chronic inflammation and age-related diseases. At HCW Biologics, our proprietary immunotherapy platforms rejuvenate the immune system, allowing it to reduce accumulated senescent cells and silence activated inflammasomes. This disrupts the link between aging and chronic diseases. 11 Persistently Activated Immune Cells: Inflammatory Factors They Secreted Trigger Chronic Inflammatory Responses Immune cells defend against infection or tissue injury. These activated immune cells persist as we age, even in the absence of infection, and regulate the release of pro-inflammatory factors. As inflammatory factor levels increase, this fuels a feedback cycle of inflammasome activation and leads to the persistent, low-grade body-wide inflammation associated with many age-related diseases. 12 Our Strategy Our strategy includes the following key components: Focus on diseases with no known FDA-approved treatments. • Diseases to be targeted include cancer indications, neurodegenerative diseases as well as quality-of-life indications. • Indications that will be included in our clinical development are promoted by chronic inflammation, especially inflammaging. Focus on an autoimmune indication for the initial indication for clinical development for our lead product candidate, HCW9302. • The Company received clearance of its IND from the FDA to initiate a first-in-human Phase 1 dose escalation clinical trial to evaluate one of its lead drug candidates, HCW9302, in patients with moderate-to-severe alopecia areata, a common autoimmune disease in humans that currently has no curative FDA-approved treatments. • The Company intends to include up to five clinical sites in this study. Negotiations with clinical sites are currently underway, and the Company estimates the lead site may open and initiate late in the second quarter of 2025 or early in the third quarter of 2025. Once RP2D and safety is established in a successful Phase 1 study, expand to other carefully selected indications in Phase 2. • The Company will refine potential expanded indications for Phase 2 clinical studies during Phase 1, conducting further preclinical research with support from Phase 1 clinical data from ancillary studies as well as human data read-outs. • For HCW9302, we are focused on autoimmune diseases, including alopecia areata, and inflammatory conditions, such as other dermatological conditions, graft rejection, and neurodegenerative diseases. Continue to build our relationships with leading clinical research centers. • We believe we can reduce risks related to low patient recruitment and enrollment by continuing to build our relationships with clinical sites who specialize in indications that are being studied in clinical trials. • We intend to work with the strongest principal investigators who have a passion for the underlying science and search for breakthrough therapeutics. These investigators tend to have gravitas at their institutions and the broader scientific and medical communities. We find they can often be advocates for HCW Biologics and our clinical studies. Balance clinical development of our proprietary molecules between a few in-house development programs and licensing programs with larger biotech companies and big pharma for other molecules. • For in-house development, we will focus on HCW9302 and second-generation immune checkpoint inhibitors. After the completion of Phase 1 studies in China, the Company may also elect to exercise our Opt-In Right per the WY Biotech License Agreement, and add HCW11-006 to our in-house development programs for the Americas market. • We plan to begin actively seeking a partner for the development of the Company’s T-Cell Engager and other Immune Cell Engagers in Q2 2025. • We will continually assess candidates for clinical development for licensing. The Company has created over 50 compounds using the TRBC platform which it owns, many of which show bioactivity and potential for development for the treatment of diseases linked to inflammation and aging, such as cancer. 13 Our Programs The Company created two novel drug discovery platforms, using two distinctly different scaffolds to anchor the composition of immunotherapeutic fusions. This results in the creation of molecules with different mechanisms of action, which opens up different pathways for treatment of diseases promoted by chronic inflammation. Our Proprietary T-Cell Receptor β Chain Constant Region Drug Discovery and Development Platform HCW Biologics invented the TRBC drug discovery and development platform, a second-generation drug discovery technology platform, to create immunotherapeutics that activate immune responses and specifically target cancerous or infected cells. The platform utilizes the TRBC protein as a scaffold to build multi-chain chimeric polypeptides, which include target-binding domains and affinity domains, enabling the targeting of specific antigens. We believe these polypeptides stimulate immune cells, modulating immune functions and signaling pathways. Molecules created with the TRBC platform integrate multiple protein targets, such as cytokines, single-chain antibodies, and ligands, into a single fusion complex designed to engage immunostimulatory functions and modulate various signaling pathways. This flexible, adaptable platform has facilitated the development of a groundbreaking pipeline of internally developed product candidates. This versatile scaffold enables the creation of multiple classes of immunotherapeutic compounds: Class I: Multi-Functional Immune Cell Stimulators – Multifunctional, cytokine-based immunotherapeutic compounds. Class II: Second-Generation Immune Checkpoint Inhibitors – Multifunctional immunotherapeutic fusions which improve the performance of immune checkpoint inhibitors. Class III: Multi-Specific Targeting Fusions and Enhanced Immune Cell Engagers – Constructs with immune-cell engagers targeting cell-surface antigens associated with diseased cells. T-Cell Receptor β Chain Constant Region (“ TRBC”) Drug Discovery and Development Platform 14 Our Proprietary Tissue factOr-Based fusIon Development Platform Our proprietary TOBI™ development platform is a proprietary immunotherapeutic drug design and discovery platform which enables us to construct multi-domain cytokine-based immunotherapeutics using a Tissue-Factor (“TF”) scaffold. The domains of TOBI-based molecules are discrete and can be “turned on” and “turned off.” We have evaluated HCW9218, a TOBI-based molecule, in two Phase 1/1b clinical trials and have generated human data that shows that this molecule is capable of achieving the desired immune responses against solid tumors, including ovarian and pancreatic cancer. Based on other research, we believe that other TOBI-based molecules could activate the designed immune responses against other diseases or infected cells by blocking unwanted autoimmune or inflammatory activities. Based on a TF scaffold that serves as the “backbone” for the construction of fusion molecules, the TOBI platform packs multiple protein targets, including cytokines, single-chain antibodies, and ligands, into a fusion molecule. These molecules are capable of engaging immunostimulatory functions and addressing many signaling pathways simultaneously. Some of these fusion protein complexes have ex vivo as well as in vivo applications. TOBI also provides a scalable approach for generating large-scale current Good Manufacturing Practice (“cGMP”)-grade heteromeric fusion protein complexes to support clinical applications. The TOBI discovery platform was featured in an article authored by the Company and published in July 2021 in the peer-reviewed journal Cancer Immunology Research , “ A ‘Prime and Expand’ Strategy Using the Multifunctional Fusion Proteins to Generate Memory-Like NK cells for Cell Therapy,” Shrestha N, et al., July 2024. The reference to our paper does not constitute incorporation by reference of the information contained in the paper. For information about the bi-specific TOBI fusion, HCW9302, and its effects on T reg responses in an inflammatory disease, see Frontiers in Immunology , “A Novel Interleukin-2-Based Fusion Molecule, HCW9302, Differentially Promotes Regulatory T Cell Expansion to Treat Atherosclerosis in Mice,” Zhu, X., et al., January 2023. The reference to our paper does not constitute incorporation by reference of the information contained in the paper. Autoimmune and Proinflammatory Diseases HCW9302 HCW9302 is our leading clinical-stage drug candidate designed to address chronic inflammatory responses and associated tissue destruction typical of autoimmune disease. Thus, we selected an autoimmune disease as the gateway indication for the clinical development of HCW9302. HCW9302 is designed to activate and expand T reg cells, suppressing the persistently activated immune cells, inflammasome-bearing cells and their inflammatory factors. Preclinical studies show it has a 1,000-fold higher affinity for IL2Rα than IL-2, with a longer serum half-life. It is well tolerated, effectively expanding T reg cells without activating CD4 + effector T cells (“T eff ” cells). 15 In a dose toxicity study in non-human primates, we established that HCW9302 induced T reg cell proliferation and accumulation at a dose level with no observed adverse events. For this study, HCW9302 was administered monthly via subcutaneous injection for six months. Findings from this IND-enabling study contributed to the development of the clinical strategies for HCW9302 in autoimmune disease indications. Alopecia Areata On January 28, 2025, the Company obtained clearance from the FDA to evaluate HCW9302 in a Phase 1 clinical trial in patients with alopecia areata (“alopecia”). In preclinical studies using an alopecia murine model, treatment with HCW9302 protected mice from disease, reducing pathogenic immune cell populations in the skin and skin-draining lymph nodes. HCW9302 treatment also led to a protective shift in T reg : T eff balance, with T reg cells dominating in the skin leading to suppression of unwanted autoimmune activity. These findings suggest HCW9302-induced T reg expansion can alter the course of alopecia areata and promote tolerance, warranting further studies in human patients. Alopecia is characterized by hair loss in localized areas, the entire scalp, or, in some cases, the whole body. It occurs when the immune system mistakenly attacks hair follicles, leading to hair loss without causing permanent damage to the follicles. Patients often experience recurring episodes of hair loss throughout their lives. While not life threatening, alopecia areata can have a significant negative impact on patients’ quality of life and psychological health. Existing approved treatments may provide some relief of symptoms, but there are often dangerous side effects. Alopecia is one of the most prevalent autoimmune diseases in the world, affecting approximately 1 in 1,000 people, with a lifetime incidence of 2% worldwide, or 160 million people. According to the National Alopecia Areata Foundation, about 7 million people in the United States have alopecia areata. The condition primarily affects individuals under the age of 30, occurring at similar rates in both males and females. Many insurance plans may not fully cover alopecia areata treatments, leading to significant out-of-pocket expenses. More extensive hair loss usually requires more intensive treatment, leading to higher costs. Hair transplants are considered among the most expensive treatment options, with costs ranging from $7,400 to $25,000 depending on the procedure and the clinic. Patients report even higher costs due to the need for medications like Janus kinase (“JAK”) inhibitors which can reach upwards of $50,000 annually. JAK inhibitors have boxed warnings in their labeling due to an increased risk of serious heart-related events, cancer, blood clots, and death. (See StatsPearls, National Library of Medicine of National Institutes of Health, National Alopecia Areata Foundation.) Potential Phase 2 Expanded Indications The goals of the Phase 1 clinical trial are to assess whether the safety profile is acceptable to conduct further studies and establish a RP2D that can increase T reg cells activity in patients participating in the study. If we achieve the Phase 1 study objectives, the Company plans to progress the clinical development of HCW9302 in patients with alopecia areata as well as other autoimmune diseases and inflammatory conditions, including other dermatologic diseases, organ transplant rejection and neurodegenerative diseases. 16 Organ Transplant Rejection Through collaborative research, the Company has performed some preclinical research using HCW9302 in organ transplant rejection. According to the United Network for Organ Sharing, in 2023, there were a record-breaking 46,632 organ transplants performed in the United States. This includes both deceased and living donors. Graft rejection in organ transplantation refers to the phenomenon where the recipient's immune system identifies the transplanted organ as foreign tissue and attacks it, leading to damage and potential failure of the transplanted organ, essentially rejecting it from the body. This is a major complication following organ transplantation and occurs due to differences in the recipient's immune system compared to the donor's tissue antigens. Chronic transplant rejection may develop months or years after organ or tissue transplantation. This condition involves chronic inflammation and immune responses against the transplanted graft, leading to complications and symptoms that vary depending on the transplanted organ. Neurodegenerative Diseases The Company’s preclinical work in neurodegenerative diseases to date has focused on Alzheimer’s Disease. According to the Alzheimer’s Association, for the United States, health care and long-term care costs for people living with dementia are projected to reach $360 billion in 2024 and nearly $1 trillion in 2050. Further statistics from the Alzheimer’s Association offer a partial explanation for these staggering costs. Again, these are statistics just for the United States. • An estimated 6.9 million Americans aged 65 and older are living with Alzheimer's in 2024. Seventy-three percent are age 75 or older. • Almost two-thirds of Americans with Alzheimer's are women. • About 1 in 9 people aged 65 and older (10.9%) has Alzheimer's. • Alzheimer's disease was the fifth-leading cause of death among people aged 65 and older in 2021. • By 2050, the number of Americans with Alzheimer’s is projected to rise to nearly 13 million. Cancer Indications Class II TRBC Molecules: Second-Generation Immune Checkpoint Inhibitor The Company is currently conducting preclinical studies in relevant animal models to identify the strongest candidate in the group of TRBC Molecules classified as second-generation immune checkpoint inhibitors. Several immune checkpoint inhibitors have been approved for the treatment of a limited number of cancer indications. While immune checkpoint inhibitors are considered a breakthrough therapy that has revolutionized the way cancer is treated, the response rates among patients remains stubbornly low in many of the most common cancer indications. There are several clinical studies underway for therapeutics to be used in combination with immune checkpoint inhibitors to broaden the number of indications and improve response rates. Our focused indications are pancreatic and ovarian cancer. This market is dominated by a few companies, predominantly Merck & Co. and its product, Keytruda®. Leading immune checkpoint inhibitors face a patent cliff in the next few years. The opportunity presented by the patent expiry of approved immune checkpoint inhibitors lies in the potential for increased competition and availability of generic or biosimilar versions of these drugs which may result in a loss of market exclusivity and revenue as competition. It may also incentivize innovation and the development of new formulations, combinations, or delivery methods to maintain market share and competitive advantage. Pancreatic Cancer Pancreatic cancer, as one of most fatal malignancies, remains a critical issue in the global burden of disease. This cancer has the highest mortality rate of all major cancers. In the U.S., pancreatic cancer is currently the third leading cause of cancer-related death after lung and colon and expected to become the second leading cause of cancer-related death by 2030. In the U.S. alone, an estimated 66,440 Americans were diagnosed with pancreatic cancer and more than 51,750 died from the disease in 2024. For all stages combined, the five-year relative survival rate is 13%. For the small percentage (15%) of people diagnosed with local disease, the five-year survival rate is only 44%. Survival is higher when pancreatic cancer is detected early. Early diagnoses is difficult because there are few signs or symptoms before it has spread outside of the pancreas. 17 China, the United States, and Japan had the highest number of pancreatic cancer cases in 2022. There were approximately 500,000 new cases and 470,000 deaths in 2022. The table below shows the new cases and the ASR/100,000. Age-standardized rates (“ASR”) are a summary measure of the rate of disease that a population would have if it had a standard age structure. Country New Cases of Pancreatic Cancer ASR/100,000 World 510,992 4.7 China 118,672 4.4 United States 60,127 8.6 Japan 47,627 9.8 (See: World Journal of Gastronomy, American Cancer Society, National Cancer Institute, World Cancer Research Fund.) Ovarian Cancer Ovarian cancer is one of the leading causes of cancer deaths among women and the deadliest of gynecologic cancers. Although risk of developing and dying from ovarian cancer is almost twice as high in developed countries, the actual burden (number of cases) is much higher in less developed countries due to population sizes. For example, China has the largest number of diagnoses per year (34,575), followed by India (26,934), then the United States. In the United States, ovarian cancer accounts for 2.5% of cancers in women. In the United States, while ovarian cancer is the 11th most common cancer among women, it is the fifth leading cause of cancer-related death among women. Worldwide, ovarian cancer is the seventh most common cancer in women. It is estimated that by 2035, the incidence of ovarian cancer will increase by 55% to 371,000 worldwide, and deaths will increase by 67% to 254,000 worldwide. Treatment for ovarian cancer usually involves a combination of surgery and chemotherapy. This cancer mainly develops in older women. About half of the women who are diagnosed with ovarian cancer are aged 63 years or older. The most important risk factor for ovarian cancer other than age is a family history of breast or ovarian cancer. This includes those with inherited gene changes like BRCA1, BRCA2, and Lynch syndrome. Ovarian cancer survival rates vary widely. The latest five-year survival rates largely fall between 30% and 50% and in general have begun to improve over the last 20 years. In the United States, the relative five-year survival rate for ovarian cancer is 50.8%. Overall, survival rates fall well below that of other cancers. (See: World Ovarian Cancer Coalition, American Cancer Society and Center for Disease Control and Prevention.) Class I TRBC Molecules: Multi-Functional Immune Cell Stimulators Class I TRBC Molecules combine several different immune functional domains on the TRBC scaffold. The Company has conducted preclinical studies that demonstrate that this multi-functional group of molecules is highly effective at inducing CD8 + T cell and NK cell responses without triggering unwanted side effects in human immune cells animal models. HCW11-006 also exhibits anti-tumor efficacy in relevant solid tumor animal models. In addition to HCW11-006, the Company is investigating various structures with different combinations of cytokines in our quest to identify lead product candidate(s) in this group of molecules. We anticipate the completion of our efficacy assessment in mice and safety profiling in a small study in non-human primates before the end of 2025. Results of these studies are expected to show the optimal construction for lead product candidates. 18 Example of Class I TRBC Molecule Second-Generation Multi-Functional Immune Cell Stimulator HCW 11-002 HCW11-002 is a Class I TRBC molecule that contains the same immune moieties as HCW9218, and it has demonstrated its promising capabilities in stimulating immune cells in preclinical studies. Based on this potential, the Company is considering accelerating the development of HCW11-002 for senescence-associated indications. Senescence-Associated Diseases The Class I TRBC Molecules have potential for the treatment of senescence-associated indications, such as bronchopulmonary dysplasia (“BPD”), chronic deep wrinkles and senile lentigo (age spots) removal. BPD is a form of chronic lung disease that causes long-term breathing problems in premature babies. The condition often results in poor growth and development. An estimated 10,000 to 15,000 babies in the United States develop BPD each year. There is no known cure for BPD, which involves high morality and morbidities. Aesthetics treatments represent a large and growing market due to the aging population. For example, the global botulinum toxin market was valued at $6.4 billion (USD) in 2022 and growing at a CAGR of 11.50% from 2022 to 2030. The market is expected to reach $15.2 billion (USD) by 2030. (See: Global Growth Report, Fortune Business Insights.) Class III TRBC Molecules: Immune Cell Engagers Class III TRBC Molecules are second-generation immune-cell engagers capable of targeting tissue factor and other cell-surface antigens associated with diseased cells. Class III TRBC Molecules are part of a new class of therapeutic treatments based on the development of immune-cell engagers. Among these are T-cell targeted molecules — antibodies engineered to redirect T cells to recognize and kill cancer cells — that are being developed to treat cancer and tackle issues that could potentially lead to treatment that is more effective and safer for cancer patients. Recent deal activity indicates that the pharmaceutical industry and the biotech industry have recognized the benefits of Enhanced Immune Cell Engagers, in particular T-Cell Engagers. Recent notable deals in the immune cell engager space include AbbVie partnering with Xilio Therapeutics to develop antibody-based immunotherapies, with AbbVie paying a significant upfront payment of $52 million; Candid Therapeutics making multiple collaborations to discover and develop new T-cell engagers, including a deal with Nona Bioscience (“Nona”) where Nona could potentially receive up to $320 million in milestone payments; and GSK acquiring CMG1A46, a clinical-stage dual CD19 and CD20-targeted T-cell engager from Chimagen for $300 million upfront. 19 Even though immune-cell engagers have great potential, there are major challenges in the clinical development. The complexity and scale of the GLP preclinical and clinical studies required for the development of Class III Molecules is more appropriate for well-capitalized pharmaceutical companies or a larger biotech company. Companies that undertake this challenge must deal with managing potential severe toxicities, among other obstacles. Further complications arise from potential off-target effects and patient selection for optimal treatment outcomes. In light of recent transactions coupled with the challenges of clinical development, we plan to take advantage of industry interest in this breakthrough drug strategy. We intend to develop these molecules through corporate partnering and out-licensing arrangements. Out-License Programs We have created over 50 immunotherapeutic molecules with our proprietary drug discovery and development platforms. We use out-licensing as a strategy for financing as well as clinical development of selected programs, molecules or markets. We expect out-licensing to provide non-dilutive financing to bolster resources available to fund our core markets and programs and possibly commercialize molecules, with the hope that our licensees achieve success through our licenses. Wugen Inc. We established our first out-license arrangement in December 2020, when the Company entered into the Wugen License, an exclusive worldwide license agreement with Wugen for rights to develop cell therapy-based treatments using two of our internally-developed fusion protein molecules and improvements thereto, including clinical-stage and preclinical stage fusion molecules, HCW9201 and HCW9206, respectively. We believe these molecules are capable of generating highly activated cells in a short time frame and large-scale NK cell expansion without relying on feeder cells. Wugen has exercised its right to sublicense their rights for Greater China. As licensor, we have limited information rights to clinical data which we are required to treat as nonpublic confidential information. As licensee, Wugen, a private company, determines when and if clinical data read-outs are disclosed to the public. We retain manufacturing rights and other rights, including regulatory T cell-based cellular therapy and injectable rights, for licensed molecules under the terms of the Wugen License. On June 18, 2021, we entered into a master services agreement with Wugen for the supply of materials for clinical development of licensed products. Thereafter, each purchase transaction must be accompanied by a statement-of-work. We plan to enter into a commercialization supply agreement when Wugen enters its commercial stage. According to the terms of the Wugen License, Wugen will fund all future clinical development and commercialization activities for any indications utilizing the licensed molecules for cell-based therapy as covered by the Wugen License. In addition to an upfront fee which consisted of a significant equity ownership position in Wugen’s common stock, we have the opportunity to receive additional payments for development and commercialization milestones as well as single-digit royalties. WY Biotech Co., Ltd. On November 17, 2024, HCW Biologics entered into an exclusive, worldwide License, Research, and Co-Development Agreement (the “WY Biotech License Agreement”) with WY Biotech Co., Ltd. (the “WY Biotech”) for in vivo applications of one of the Company’s preclinical, proprietary molecules, HCW11-006. Upon the completion of a Phase 1 clinical trial in any jurisdiction, the Company has an “Opt-In Right,” which gives the Company the option to assume all control and responsibility for the development, manufacture and commercialization of HCW11-006 for in vivo applications in the Opt-In Territory. The “Opt-In Territory” is North America, South America, and Central America. Upon the completion of the exercise of the Opt-In Right, the Company would be responsible for all costs associated with research and development, manufacturing, clinical development, regulatory approval, and commercialization for the licensed molecule in the Opt-In Territory. As reported in the Company’s Form 8-K filed with the SEC on March 19, 2025, on March 18, 2025, the Company and WY Biotech agreed to amend the WY Biotech License Agreement. The Company has now completed extensive preclinical studies that further support our belief in the potential for HCW11-006 for both an in vivo and ex vivo therapy. The in vivo therapy is licensed by WY Biotech, however, the Company retained all rights to the ex vivo therapy and applications as a reagent in cell-based therapy treatments, including cell-based therapies, such as CAR-T therapies. The Company considers WY Biotech License provisions for the Opt-In Right to take over the development of HCW11-006 for the Americas markets to be an important feature of the WY Biotech License. We believe our right to recapture this market is a potentially high value opportunity. Further, we will be able to base our decision to opt-in on the human-data read-out from a Phase 1 clinical trial, which will mitigate our development risks and provide valuable clinical information about the potential for the indications we will use for Phase 2 clinical studies. 20 Manufacturing For TOBI Molecules, we have established internally developed large scale manufacturing processes for producing these fusion molecules from Chinese hamster ovary (“CHO”) cells in a cGMP-compliant setting. We have a long-standing relationship with a contract manufacturing organization, EirGenix, Inc. (“EirGenix”), a third-party global contract development and cGMP manufacturer of biologics, for the manufacture of our internally-developed molecules. By the end of 2019, we successfully launched cGMP production with manufacturing runs of clinical grade materials adequate for support of our clinical trials. As of December 31, 2024, we have successfully completed cGMP production of five of our molecules (HCW9101, HCW9201, HCW9206, HCW9218, and HCW9302). The production campaigns include the sufficient quantities of clinical grade materials required to complete the Phase 1 / 2 clinical trials we have planned during 2025 and 2026 for HCW9302. We currently rely on EirGenix and other third-party manufacturers for the cGMP production of sufficient quantities of our drug product candidates for our clinical trials. Our management team and other internal personnel have extensive cGMP manufacturing experience which allows for seamless technology transfer of our proprietary manufacturing methods, as well as the ability to manage the manufacturing and development processes conducted by third-party manufacturers. Our agreements with third-party manufacturers include confidentiality and intellectual property provisions as well as routine quality audits. However, we currently obtain our products from these manufacturers on a per project basis and do not have long-term supply arrangements in place. Should any of these manufacturers become unavailable to us for any reason, we believe that there are a number of potential alternative contract manufacturers available to us on commercially reasonable terms to meet our future production requirements, although we may incur some delay and cost in qualifying and re-establishing the manufacturing processes at an alternative facility. We endeavor to mitigate this risk by maintaining an inventory of clinical material that is adequate to complete the clinical trials we expect to initiate in the next 12 months. On August 15, 2022, we purchased a 36,000 square foot building located in Miramar, Florida that is intended to serve as our new headquarters. After refitting this building, we expect to have the capabilities for cGMP clinical drug manufacturing, storage, distribution, and quality testing. We expect to relocate to this building and complete validation of the facility in the first half of 2026. We have the flexibility to complete the buildout of the manufacturing facility on a longer schedule, should we choose to delay completion. In the meantime, we will continue to manufacture clinical-grade material with third-party manufacturers. Our staff has expertise in building and running cGMP manufacturing facilities for immunotherapeutics. In addition, our manufacturing process is wholly-owned and developed by us, so we do not expect to be reliant on a third-party for manufacturing expertise or processes. Intellectual Property Overview We strive to protect and enhance internally-developed technology, inventions, and improvements that are commercially important to the development of our business, including seeking, maintaining, and defending patent rights, for our internally-developed molecules and manufacturing processes. We also rely on trade secrets relating to our technology platform and on know-how, continuing technological innovation to develop, strengthen, and maintain our proprietary position in the field of inflammaging and the diseases it promotes that may be important for the development of our business. As with other biotechnology and pharmaceutical companies, our ability to secure and maintain intellectual property protection for our product candidates, future products, and other internally-developed technologies will depend on our success in obtaining effective patent coverage and enforcing those patents if granted. However, we cannot guarantee that our pending patent applications, and any patent applications that we may in the future file, will result in the issuance of patents, or that any issued patents we have obtained or may obtain will provide sufficient proprietary protection from competitors. Any issued patents that we obtain may be challenged, invalidated, or circumvented by third parties. In addition to patents, we also rely on trade secrets, know-how and continuing technological innovation to develop and maintain our competitive position. We seek to protect our internally-developed technology, in part, through confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and potential collaborators. We also rely on trade secrets relating to our manufacturing process and on know-how, continuing technological innovation and in-licensing opportunities to develop, strengthen, and maintain our proprietary position in the field of inflammaging that may be important for the development of our business. We additionally may rely on regulatory protection afforded through data exclusivity, market exclusivity, and patent term extensions, where available. 21 Internally-Developed Intellectual Property TOBI Platform and TOBI-Based Molecules As of December 31, 2024, the United States Patent and Trademark Office (the “USPTO”) has granted ten patents, including fundamental patents that protect the underlying technology for our two lead product candidates, HCW9218 and HCW9302, as well as patents that protect the underlying technology and use of the molecule HCW9206, which is licensed to Wugen, conveying rights to develop cell-based therapies for cancer. In respect of Wugen, we retain all other rights to HCW9206, including manufacturing rights. As part of a confidential Settlement Agreement with ImmunityBio, Inc. in 2024, the Company assigned certain patents and patent applications to ImmunityBio, Inc., yet the Company retained a world-wide exclusive license in respect of the use of TOBI molecules outside of oncology indications. Licensed patents that protect the underlying technology for proprietary molecules include: • The USPTO granted U.S. Patent No. 11,401,324 to HCW Biologics on August 2, 2022. This patent contains claims for immunotherapeutic single-chain chimeric polypeptides comprising two target-binding domains on a scaffold made of a soluble tissue factor domain, supporting our lead drug candidate, HCW9302. • The USPTO granted U.S. Patent No. 11,518,792 to HCW Biologics on December 6, 2022. This patent contains composition claims for immunotherapeutic multi-chain chimeric polypeptides, supporting our lead drug candidate, HCW9218. As of December 31, 2024, in addition to a license to ten issued U.S. patents, we have a license to four issued Japanese patents, two issued Australian patents, one issued Singaporean patent, one issued Taiwanese patent, and 124 pending patent applications worldwide, including 20 pending U.S. utility patent applications, one pending provisional U.S. patent application, three pending Patent Cooperation Treaty (“PCT”) applications, nine Hong Kong applications, and 91 total pending non-U.S. national phase patent applications and Taiwanese patent applications. HCW Biologics owns 13 pending patent applications worldwide including one pending U.S. utility patent application, two pending provisional U.S. patent applications, one Hong Kong application, and nine total pending non-U.S. national phase patent applications and Taiwanese patent applications. Our policy is to file patent applications to protect technology, inventions and improvements to inventions that are commercially important to the development of our business. We seek United States and foreign patent protection for a variety of technologies, including: our internally-developed platform, specific chimeric polypeptides developed using our platform, methods of using the chimeric polypeptides both in vivo and in cellular therapy to treat various conditions, methods for treating diseases of interest, and methods for manufacturing our products. We also intend to seek patent protection or rely upon trade secret rights to protect other technologies that may be used in combination with our products in the development of novel products or methods of use. We seek protection, in part, through confidentiality and proprietary information agreements. Our intellectual property portfolio is continually evolving during prosecution of our applications. We own or license multiple families of patent applications that are directed to our TOBI platform technology and our single-chain and multi-chain chimeric polypeptides and methods of use of these polypeptides alone and in combination. Single-Chain Chimeric Polypeptides Licensed Patent Family This family includes licensed patents and patent applications with claims directed to compositions of various single-chain chimeric polypeptides created using the TOBI platform. These licensed applications also include methods of use and manufacture thereof and methods of promoting the activation and proliferation of NK cells or T cells using our single-chain chimeric polypeptides. As of December 31, 2024, this family, which includes HCW9302, includes U.S. Patent Nos. 11,401,324, 11,987,619, and 12,018,071, one pending U.S. utility patent application, one issued Japanese patent, and 13 pending patent applications filed in Europe, Australia, Canada, Israel, New Zealand, Japan, South Korea, China, Singapore, Hong Kong and Taiwan. The earliest predicted expiration date of any patent issuing from a patent application in this family is 2039. Multi-Chain Chimeric Polypeptides Licensed Patent Family This family includes licensed patents and patent applications with claims directed to compositions of various multi-chain chimeric polypeptides created using the TOBI platform. These licensed applications also include methods of use and manufacture thereof and methods of promoting the activation and proliferation of NK cells or T cells using our multi-chain chimeric polypeptides. As of December 31, 2024, this family, which includes claims encompassing HCW9218, HCW9201, HCW9206, HCW9228, HCW9207, and HCW9212, includes U.S. Patent Nos. 11,518,792 and 11,884,712, six pending U.S. utility patent applications, one issued Japanese patent, one issued Australian patent, one issued Singaporean patent, one issued Taiwanese patent, and 12 pending patent applications filed in Europe, Australia, Canada, Israel, Japan, New Zealand, South Korea, China, Singapore, Hong Kong and Taiwan. The earliest predicted expiration date of any patent issuing from a patent application in this family is 2039. 22 With respect to HCW9218, as of December 31, 2024, the composition is claimed in U.S. Patent No. 11,518,792, four patents issued in Australia, Singapore, Japan and Taiwan, and eight pending patent applications filed in Europe, Canada, Israel, Japan, New Zealand, South Korea, China, and Hong Kong. With respect to HCW9201, December 31, 2024, the composition is claimed in one allowed U.S. utility patent application, one issued Singaporean patent, one issued Japanese patent and ten pending patent applications filed in Europe, Canada, Israel, Japan, New Zealand, South Korea, China, Singapore, Hong Kong and Taiwan. Wugen has obtained an exclusive license to these patent applications limited to use of the licensed chimeric polypeptides in manufacturing certain cellular therapy products. With respect to HCW9206, December 31, 2024, the composition is claimed in U.S. Patent No. 11,884,712 , one issued Singaporean patent, one issued Japanese patent and 11 pending patent applications filed in Europe, Australia, Canada, Israel, Japan, New Zealand, South Korea, China, Singapore, Hong Kong and Taiwan. Wugen has obtained an exclusive license to these patent applications limited to use of the licensed polypeptides in manufacturing certain cellular therapy products. Methods of Culturing and Methods of Expansion and Proliferation These two families include licensed patents and patent applications with claims directed to methods of promoting the activation and proliferation of NK cells through the use of our single-chain or multi-chain chimeric polypeptides for ex vivo cell therapy use. As of December 2024, these two families, which include methods of using HCW9201 and HCW9206, include U.S. Patent No. 11,730,762, U.S. Patent No. 11,738,052, two pending U.S. utility patent applications, one issued Australian patent, one issued Japanese patent, and 16 pending patent applications filed in Europe, Australia, Canada, Israel, Japan, South Korea, Singapore, Hong Kong and China. The earliest predicted expiration date of any patent issuing from a patent application in the first of these two families is 2039. The earliest predicted expiration date of any patent issuing from a patent application in the second of these two families is 2040. Wugen has obtained an exclusive license to these two patent families limited to use in manufacturing certain cellular therapy products. Treating Age Related Disorders These four families include licensed patent and patent applications with claims directed to methods of killing or reducing the number of senescent cells in a subject using our single-chain or multi-chain chimeric polypeptides. As of December 2024, these four families, which include methods of using HCW9218, HCW9228 and HCW9302, include U.S. Patent Nos. 11,672,826, 12,024,545, and 12,115,191, four pending U.S. utility patent applications, one issued Japanese patent, and 33 pending patent applications filed in Europe, Australia, Canada, Israel, Japan, Hong Kong, South Korea, New Zealand, Singapore, and China. The earliest predicted expiration date of any patent issuing from a patent application in the first of these three families is 2039. The earliest predicted expiration date of any patent issuing from a patent application in the second of these families is 2041. The earliest predicted expiration date of any patent issuing from a patent application in the third of these families is 2040. The earliest predicted expiration date of any patent issuing from a patent application in the fourth of these families is 2042. Methods of Activating Regulatory T Cells This family includes patent applications with claims directed to methods of promoting the activation and proliferation of Regulatory T cells through the use of our single-chain or multi-chain chimeric polypeptides for ex vivo cell therapy use. As of December 2024, this family, which includes methods of using HCW9213 and HCW9302, includes one pending U.S. utility patent application and 10 pending patent applications filed in Australia, New Zealand, Singapore, Israel, Europe, Canada, Japan, China, Hong Kong, and South Korea. The earliest predicted expiration date of any patent issuing from a patent application in this family of applications is 2041. Antibodies This family includes patent applications with claims directed to anti-CD26 scFv antibodies. As of December 2024, this family, which includes composition claims for HCW9106, includes one pending U.S. utility patent application and six pending patent applications filed in Australia, Canada, Europe, China, Hong Kong, and Japan. The earliest predicted expiration date of any patent issuing from a patent application in this family of applications is 2041. 23 The various methods of use of our chimeric polypeptides covered in our portfolio include: ex vivo cellular therapy use; in vivo or injectable use; methods of inducing differentiation of an immune cell into a memory or memory-like immune cell (in vitro or in vivo); methods of stimulating an immune cell (in vitro or in vivo); and methods of inducing or increasing proliferation of an immune cell (in vitro or in vivo). Indications covered in the portfolio broadly include cancers, including solid tumors and hematological cancers; age-related diseases; and infectious diseases. We are also pursuing innovative combinations of use with our chimeric polypeptides and antibodies, which include both known and internally-developed antibodies. Patents that may issue from these HCW Biologics Inc. owned or licensed applications are generally expected to expire between the years 2039 to 2041, subject to possible patent term adjustment and/or extension. The term of individual future patents may vary based on the countries in which they are obtained. Generally, patents issued from applications filed in the United States are effective for 20 years from the earliest effective non-provisional filing date. In certain cases, a patent term can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory review period. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of a U.S. patent, though the total patent term, including any extension, must not exceed 14 years following FDA approval. A U.S. patent can only be extended once, such that, if a single patent is applicable to multiple products, it can only be extended based on one product. The term of patents outside of the United States varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective national filing date. Similar patent term extension provisions are available in Europe and other foreign jurisdictions to extend the term of a patent covering an approved drug. When possible, we expect to apply for patent term extensions for future patents covering our product candidates and their methods of use. New Chimeric Polypeptide Platform As of December 31, 2024, HCW Biologics has filed two provisional patent applications related to a new chimeric polypeptide platform. The new chimeric polypeptide platform will be useful in the generation of polypeptides with therapeutic potential (e.g., useful in the field of inflammaging). Trademarks We have two registered U.S. trademarks and two pending U.S. trademark applications for our corporate name and corporate logo. We have an International Registration for the mark HCW BIOLOGICS for pharmaceutical research and development services, among other related services, in Class 42 and four national trademark applications pending therefrom with two registrations issued in the European Union and Japan. In the future, we intend to file applications for trademark registrations in connection with our Company, our product candidates, and other technologies in various jurisdictions, including the United States as the products are further developed. Trade Secret Protection Finally, we may rely, in some circumstances, on trade secrets to protect our technology. We seek to protect our internally-developed technology and processes, in part, by entering into confidentiality agreements with our employees, consultants, scientific advisors, and contractors. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. In addition to the above, we have established expertise and development capabilities focused in the areas of preclinical research and development, manufacturing and manufacturing process development, quality control, quality assurance, regulatory affairs, and clinical trial design and implementation. We believe that our focus and expertise will help us develop products based on our internally-developed intellectual property. Contracts and Agreements Wugen Exclusive Worldwide License Agreement In December 2020, we entered into an exclusive worldwide license agreement with Wugen, for rights to use certain HCWB fusion protein molecules to develop, manufacture, and commercialize their cellular therapy products. The term of the agreement will expire on a product-by-product and country-by-country basis, upon the later of (i) the expiration of the last-to-expire valid patent claim or (ii) ten (10) years from the first commercial sale of such product. 24 As consideration for the Wugen License, HCWB received shares of Wugen’s common stock, which was equivalent to a 5.6% ownership interest in Wugen as of December 31, 2024. We may receive additional payments in the future, based upon the occurrence of certain development milestones. We will be eligible to receive additional payments for commercialization milestones as well as single-digit royalties for commercial sales once product sales commence. We retained all other rights and use of the licensed molecules outside of Wugen’s right to use the molecules to develop, manufacture, and commercialize cellular therapy products. Wugen’s rights are limited to use of the licensed molecules in cellular therapy products, which are pharmaceutical or biological products, processes or therapies that contain or comprise cells (including without limitation, CIML NK cells or T cells) that have been engineered, modified, or otherwise manipulated ex vivo , but excludes regulatory T cell-based cellular therapy products. Our retained rights include use of the molecules for injectable therapy product, regulatory T cell-based cellular therapy products, and manufacturing rights to the licensed molecules. We oversee manufacturing and supply of these licensed molecules to Wugen, utilizing our internally-developed manufacturing process, under supply agreements with Wugen that have industry-standard terms. Wugen funds all future clinical development and commercialization activities for the cellular therapy treatments developed by Wugen using the licensed molecules. WY Biotech Exclusive Worldwide License Agreement On November 17, 2024, HCW Biologics entered into an exclusive, worldwide License, Research, and Co-Development Agreement (the “WY Biotech License Agreement”) with WY Biotech Co., Ltd. (the “WY Biotech”) for one of the Company’s preclinical, proprietary molecules. As reported in the Company’s Form 8-K filed with the SEC on March 19, 2025, on March 18, 2025, the Company and WY Biotech agreed to amend the WY Biotech License Agreement. The Company has now completed extensive preclinical studies that further support our belief in the potential for HCW11-006 for both an in vivo and ex vivo therapy. The in vivo therapy is licensed by WY Biotech, however, the Company retained all rights to the ex vivo therapy and applications as a reagent in cell-based therapy treatments, including cell-based therapies, such as CAR-T therapies. The Company considers WY Biotech License Agreement provisions for the Opt-In Right to take over the development of HCW11-006 for the Americas markets to be an important feature of the WY Biotech License. We believe our right to recapture this market is a potentially high value opportunity. Further, we will be able to base our decision to opt-in on the human-data read-out from a Phase 1 clinical trial, which will mitigate our development risks and provide valuable clinical information about the potential for the indications we will use for Phase 2 clinical studies. Upon the completion of a Phase 1 clinical trial in any jurisdiction, the Company has an “Opt-In Right,” which gives the Company the option to assume all control and responsibility for the development, manufacture and commercialization of the molecule licensed to WY Biotech in the Opt-In Territory. The “Opt-In Territory” is North America, South America, and Central America. Upon the completion of the exercise of the Opt-In Right, the Company will be responsible for all costs associated with research and development, manufacturing, clinical development, regulatory approval, and commercialization for the licensed molecule in the Opt-In Territory. WY Biotech will pay the Company milestone payments as the licensed molecule advances through clinical trials and the first marketing approval is granted for the first territory in which the WY Biotech retains exclusive rights. Upon commercialization, the Company will receive double-digit royalties on a product-by-product basis in each jurisdiction in which the WY Biotech retains exclusive rights, subject to adjustment in the event the Company exercises the Opt-In Right. In addition, the Company will share a substantial portion of the net proceeds from any future transactions entered into by the WY Biotech, involving an exclusive license for the licensed molecule, an assignment of the WY Biotech License Agreement or the sale of the WY Biotech’s business that would permit the buyer to assume exclusive rights under the WY Biotech License Agreement, excluding transactions in the Greater China market. The Company and WY Biotech have expressed their intent to work cooperatively with respect to the licensed molecule in the development stage, with a global focus for clinical development and partnering. The WY Biotech License Agreement contains various representations, warranties, affirmative and negative covenants, events of default and related remedies as well as other customary provisions. Contract Research Agreements We have certain contract research agreements with contractors that were entered during the two years ended December 31, 2024 for the (i) hybridoma development, (ii) cell line improvement for higher manufacturing productivity, and (iii) research to support pre-clinical studies. In respect of the hybridoma development and cell line improvement agreements, we own all rights to the resulting intellectual property, including the antibodies, sequences, and data. To date, we have received several sequences and hybridomas from the contractors. For certain contractors, we are obligated to pay one future milestone payment upon filing and acceptance of an IND for each respective human antibody or protein from cell line; however, no additional future development or financial obligations are 25 due under these contract research agreements. For certain research collaborations agreements, the resulting research intellectual property may be jointly owned or ownership may be based upon inventorship. In those circumstances, the Company has obtained the exclusive option to an exclusive license for the research intellectual property Competition The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on internally-developed products. We believe that our immunotherapeutic approach, internally-developed technology, expertise, scientific knowledge, track record in successfully developing drugs from bench to commercialization and intellectual property provide us with competitive advantages. We face potential competition from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions, governmental agencies, and public and private research institutions. Any product candidates that we successfully develop and commercialize may compete with existing therapies and new therapies that may become available in the future. Many of the companies we are competing against, or which we may compete against 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 products than we do. In addition, we face a constantly changing competitive landscape because of numerous mergers and acquisitions in the pharmaceutical and biotechnology industry, which will concentrate resources among a smaller number of large pharmaceutical companies. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements and co-development deals with large and established companies. These competitors also compete with us in establishing clinical trial sites and patient registration for clinical trials necessary to advance the clinical development of our product candidates. Although we believe our novel approaches are different from most other existing or investigational therapies across the disease areas where we are focusing our development, we will need to compete (or be combined) with currently approved therapies, and potentially those currently in development if they are approved. We are aware of several marketed and investigational products in our leading disease areas, including but not limited to the products and competitors discussed below. We compete in the segments of the pharmaceutical, biotechnology, and other related markets that develop cancer therapies. There are many other companies that have commercialized or are developing cancer therapies, including large pharmaceutical and biotechnology companies, such as Amgen, AstraZeneca/MedImmune, Bristol Myers Squibb Company, Merck & Co., Novartis Pharmaceuticals, Pfizer, and Genentech, a member of The Roche Group. We face significant competition from pharmaceutical and biotechnology companies that target specific tumor-associated antigens using immune cells or other cytotoxic modalities. These generally include immune cell redirecting therapeutics (e.g., T-cell engagers), adoptive cellular therapies (e.g., CAR-Ts), antibody drug conjugates, targeted radiopharmaceuticals, targeted immunotoxins, and targeted cancer vaccines. Aging-related diseases are becoming a major focus in biopharma, as researchers and companies work to develop treatments for conditions like Alzheimer's. Biotech innovators like Altos Labs and Unity Biotechnology are at the forefront, exploring ways to target aging itself by removing senescent cells and modifying metabolic pathways. In oncology, there's growing interest in using senescence removal to improve the effectiveness of cancer treatments. Big names in pharma like Pfizer, Johnson & Johnson, and Roche are investing heavily in aging research, seeing not only its potential for regenerative therapies but also its enormous market potential. As the global population ages, this field is rapidly advancing and becoming a critical area of growth in healthcare. With respect to our other lead product candidate, HCW9302, there is a growing momentum behind modulating T reg cells as a potential treatment for autoimmune diseases. We are not aware of other competing clinical-stage companies with a first-in-class immunotherapeutic compound for deactivation of persistently activated immune cells, inflammasomes and reduction of inflammatory cytokines they release through the activation of T reg cells. 26 Autoimmune diseases, including alopecia areata, atopic dermatitis, and neurodegenerative disorders, are gaining increasing attention in biopharma. We are initiating clinical development in this area using HCW9302, which recently received IND clearance from FDA for a Phase 1 clinical study for alopecia areata. We are aware of several other companies developing programs that utilize IL-2 for the selective expansion of T reg cells, including Amgen, Coya Therapeutics, Nektar Therapeutics, Genentech, a member of The Roche Group, Merck & Co., Bristol Myers Squibb Company, and Celgene, a subsidiary of Bristol Myers Squibb Company. We are also aware of other companies with research or preclinical-stage programs in this area, including Synthorx, Moderna, and Xencor. We are also aware of other companies with PD-1 or CTLA-4 agonist programs for the treatment of autoimmune diseases and transplant, including Coya Therapeutics, AnaptysBio, Celgene, a subsidiary of Bristol Myers Squibb Company, and Eli Lilly & Company. Additionally, preclinical studies are underway to explore HCW9302’s potential in targeting neurodegenerative diseases. Collaborations are ongoing with various institutions to better understand the biology of HCW9302 in both transplant models and alopecia. Several small and large pharmaceutical companies are currently working on low-dose IL-2 treatments for autoimmune diseases. Moreover, numerous mid- to large-sized biotech companies are seeking partnership opportunities to further explore the potential of HCW9302 in autoimmune diseases. HCW9302 is suitable for both in vivo subcutaneous injection strategies and T reg cell therapy. In addition to alopecia areata, future plans include testing this molecule in transplant models, expanding its potential therapeutic applications. Numerous companies, including Kite Pharma, Novartis, Bluebird Bio, and Autolus Therapeutics, renowned for their CAR-T cell therapies in oncology, are expanding their research to explore the potential of CAR-T therapies in autoimmune diseases. For instance, Kite Pharma and Novartis are investigating CAR-T treatments for autoimmune conditions like multiple sclerosis (MS) and systemic lupus erythematosus. Similarly, Bluebird Bio is exploring CAR-T cell therapy for diseases such as sickle cell disease and beta-thalassemia, which involve autoimmune components. Autolus Therapeutics is also targeting both cancer and autoimmune diseases like multiple myeloma, acute lymphoblastic leukemia, multiple sclerosis, and systemic sclerosis with CAR-T therapies. This trend underscores a burgeoning interest in utilizing CAR-T cell therapy beyond oncology to tackle autoimmune disorders. We could see a reduction or elimination of our commercial opportunity if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any products that we or our collaborators may develop. Our competitors also may obtain FDA or foreign regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we or our collaborators are able to enter the market. Key product features that would affect our ability to effectively compete with other therapeutics include the efficacy, safety, and convenience of our therapeutics, the ease of use and effectiveness of any complementary diagnostics and/or companion diagnostics, and price and levels of reimbursement. We have a novel approach to the treatment of senescence-associated diseases. Bronchopulmonary dysplasia (“BPD”) presents unmet needs, particularly in addressing long-term lung damage and inflammation in premature infants. With growing pharma competition, treatments targeting senescent cell removal from the lungs are emerging as a promising approach to improve lung function and reduce BPD-related complications. Several immune checkpoint inhibitors have been approved for the treatment of a limited number of cancer indications. There are several clinical studies underway for therapeutics to be used in combination with immune checkpoint inhibitors to broaden the number of indications and improve response rates. This market is dominated by a few companies, predominantly Merck & Co. and its product, Keytruda®. Recently, several pharmaceutical companies have been licensing various versions of PD-1 from Greater China and other small biotech firms, further reflecting the growing interest in innovative immune-modulating therapies. The opportunity presented by the patent expiry of approved immune checkpoint inhibitors lies in the potential for increased competition and availability of generic or biosimilar versions of these drugs which may result in a loss of market exclusivity and revenue as competition. It may also incentivize innovation and the development of new formulations, combinations, or delivery methods to maintain market share and competitive advantage. The following list summarizes key immune checkpoint inhibitors along the companies that own these drugs and their patent expiration dates: Product Associated Company Key Patent Expiration Date Pembrolizumab (Keytruda®) Merck & Co 2028 Nivolumab (Opdivo) Bristol Myers Squibb 2028 Atezolizumab (Tecentriq) Genentech (Roche) 2024 Durvalumab (Imfinzi) AstraZeneca 2034 Cemiplimab (Libtayo) Regeneron Pharmaceuticals and Sanofi 2035 Avelumab (Bavencio) Merck KGaA and Pfizer 2024 27 Government Regulation Government authorities in the United States, at the federal, state, and local level, and in other countries and jurisdictions, extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, packaging, storage, recordkeeping, labeling, advertising, promotion, distribution, marketing, post-approval monitoring and reporting, and import and export of pharmaceutical products. The processes for obtaining regulatory approvals in the United States and in foreign countries and jurisdictions, along with subsequent compliance with applicable statutes and regulations and other regulatory authorities, require the expenditure of substantial time and financial resources. FDA Approval Process In the United States, biological products are subject to extensive regulation by the FDA. The Federal Food, Drug, and Cosmetic Act (the “FDC Act”), and other federal and state statutes and regulations, govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products. Biological products used for the prevention, treatment, or cure of a disease or condition of a human being are subject to regulation under the FDC Act, with the exception that the section of the FDC Act which governs the approval of drugs via New Drug Applications (“NDAs”), does not apply to the approval of biologics. In contrast, biologics are approved for marketing under provisions of the Public Health Service Act (“PHSA”), via a Biologics License Application (“BLA”). However, the application process and requirements for approval of BLAs are very similar to those for NDAs. Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as clinical hold, FDA refusal to approve pending BLAs, warning or untitled letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution. Biological product development for a new product in the United States typically involves preclinical laboratory and animal tests, the submission to the FDA of an IND, which must become effective before clinical testing may commence, and adequate and well-controlled clinical trials to establish the safety and effectiveness of the drug or biologic for each indication for which FDA approval is sought. Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease. Preclinical tests include laboratory evaluation of product chemistry, formulation, and toxicity, as well as animal trials to assess the characteristics and potential safety and efficacy of the product. The conduct of the preclinical tests must comply with federal regulations and requirements, including Good Laboratory Practices. The results of preclinical testing are submitted to the FDA as part of an IND along with other information, including information about product chemistry, manufacturing and controls, and a proposed clinical trial protocol. Long-term preclinical tests, such as tests of reproductive toxicity and carcinogenicity in animals, may continue after the IND is submitted. A 30-day waiting period after the submission of each IND is required prior to the commencement of clinical testing in humans. If the FDA has neither commented on nor questioned the IND within this 30-day period, the clinical trial proposed in the IND may begin. Clinical trials involve the administration of the investigational drug or biologic to healthy volunteers or patients under the supervision of a qualified investigator. Clinical trials must be conducted: (i) in compliance with federal regulations; (ii) in compliance with Good Clinical Practice (“GCP”), an international standard meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators, and monitors; as well as (iii) under protocols detailing the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. Each protocol involving testing on U.S. patients and subsequent protocol amendments must be submitted to the FDA as part of the IND. The FDA may order the temporary or permanent discontinuation of a clinical trial at any time, or impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA regulations or presents an unacceptable risk to the clinical trial patients. Imposition of a clinical hold may be full or partial. The study protocol and informed consent information for patients in clinical trials must also be submitted to an institutional review board (“IRB”), for approval. The IRB will also monitor the clinical trial until completed. An IRB may also require the clinical trial at the site to be halted, either temporarily or permanently, for failure to comply with the IRB’s requirements, or may impose other conditions. Additionally, some clinical trials are overseen by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. This group provides authorization for whether a trial may move forward at designated checkpoints based on access to certain data from the trial. Clinical trials to support BLAs for marketing approval are typically conducted in three sequential phases. In Phase 1, the initial introduction of the drug or biologic into patients, the product is tested to assess safety, dosage tolerance, metabolism, pharmacokinetics, pharmacological actions, side effects associated with drug or biologic exposure, and to obtain early evidence of a treatment effect if possible. 28 Phase 2 usually involves trials in a limited patient population to determine the effectiveness of the biologic for a particular indication, determine optimal dose and regimen, and to identify common adverse effects and safety risks. If a compound demonstrates evidence of effectiveness and an acceptable safety profile in Phase 2 evaluations, Phase 3 trials are undertaken to obtain additional information about clinical effects and confirm efficacy and safety in a larger number of patients, typically at geographically dispersed clinical trial sites, to permit the FDA to evaluate the overall benefit-risk relationship of the biologic and to provide adequate information for the labeling of the product. In most cases, the FDA requires two adequate and well-controlled Phase 3 clinical trials to demonstrate the safety and efficacy of the biologic. In rare instances, a single Phase 3 trial may be sufficient when either (1) the trial is a large, multicenter trial demonstrating internal consistency and a statistically very persuasive finding of a clinically meaningful effect on mortality, irreversible morbidity or prevention of a disease with a potentially serious outcome and confirmation of the result in a second trial would be practically or ethically impossible or (2) the single trial is supported by confirmatory evidence. Approval on the basis of a single trial may be subject to a requirement for additional post-approval studies. These phases may overlap or be combined. For example, a Phase 1/2 clinical trial may contain both a dose-escalation stage and a dose-expansion stage, the latter of which may confirm tolerability at the recommended dose for expansion in future clinical trials (as in traditional Phase 1 clinical trials) and provide insight into the anti-tumor effects of the investigational therapy in selected subpopulation(s). Typically, during the development of oncology therapies, all subjects enrolled in Phase 1 clinical trials are disease-affected patients and, as a result, considerably more information on clinical activity may be collected during such trials than during Phase 1 clinical trials for non-oncology therapies. In addition, the manufacturer of an investigational biologic in a Phase 2 or Phase 3 clinical trial for a serious or life-threatening disease is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for expanding access to such investigational drug or biologic. After completion of the required clinical testing, a BLA is prepared and submitted to the FDA. FDA approval of the BLA is required before marketing and distribution of the product may begin in the United States. The BLA must include the results of all preclinical, clinical, and other testing and a compilation of data relating to the product’s pharmacology, chemistry, manufacture, and controls. The cost of preparing and submitting a BLA is substantial. The submission of most BLAs is additionally subject to a substantial application user fee. Under an approved BLA, the applicant is also subject to an annual program fee. These fees typically increase annually. A BLA for a biologic that has been designated as an orphan drug is not subject to an application fee, unless the BLA includes an indication for other than a rare disease or condition. The FDA has 60 days from its receipt of a BLA to determine whether the application will be filed based on the FDA’s determination that it is adequately organized and sufficiently complete to permit substantive review. Once the submission is filed, the FDA begins an in-depth review. The FDA has agreed to certain performance goals to complete the review of BLAs. Most applications are classified as Standard Review products that are reviewed within ten months of the date the FDA files the BLA; applications classified as Priority Review are reviewed within six months of the date the FDA files the BLA. A BLA can be classified for Priority Review when the FDA determines the biologic has the potential to treat a serious or life-threatening condition and, if approved, would be a significant improvement in safety or effectiveness compared to available therapies. The review process for both standard and priority reviews may be extended by the FDA for three or more additional months to consider certain late-submitted information, or information intended to clarify information already provided in the BLA submission. The FDA may also refer applications for novel biologic products, as well as biologic products that present difficult questions of safety or efficacy, to be reviewed by an advisory committee—typically a panel that includes clinicians, statisticians and other experts—for review, evaluation, and a recommendation as to whether the BLA should be approved. The FDA is not bound by the recommendation of an advisory committee, but generally follows such recommendations. Before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP. Additionally, the FDA will inspect the facility or the facilities at which the biologic product is manufactured. The FDA will not approve the product unless compliance with cGMP is satisfactory and the BLA contains data that provide substantial evidence that the drug is safe and effective, or the biologic is safe, pure, potent, and effective, in the respective claimed indication. After the FDA evaluates the BLA and completes any clinical and manufacturing site inspections, it issues either an approval letter or a complete response letter. A complete response letter generally outlines the deficiencies in the BLA submission and may require substantial additional testing, or information, in order for the FDA to reconsider the application for approval. If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA, the FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. An approval letter authorizes commercial marketing and distribution of the biologic with specific prescribing information for specific indications. As a condition of BLA approval, the FDA may require a risk evaluation and mitigation strategy (“REMS”), to help ensure 29 that the benefits of the biologic outweigh the potential risks to patients. A REMS can include medication guides, communication plans for healthcare professionals, and elements to assure a product’s safe use (“ETASU”). An ETASU can include, but is not limited to, special training or certification for prescribing or dispensing the product, dispensing the product only under certain circumstances, special monitoring, and the use of patient-specific registries. The requirement for a REMS can materially affect the potential market and profitability of the product. Moreover, the FDA may require substantial post-approval testing and surveillance to monitor the product’s safety or efficacy. Once granted, product approvals may be withdrawn if compliance with regulatory standards is not maintained or problems are identified following initial marketing. Changes to some of the conditions established in an approved BLA, including changes in indications, product labeling, manufacturing processes or facilities, require submission and FDA approval of a new BLA, or supplement to an approved BLA, before the change can be implemented. A BLA supplement for a new indication typically requires clinical data similar to that in the original application, and the FDA uses the same procedures and actions in reviewing BLA supplements as it does in reviewing original BLAs. Disclosure of Clinical Trial Information Sponsors of clinical trials of FDA regulated products, including biologics, are required to register and disclose certain clinical trial information on the website www.clinicaltrials.gov. Information related to the product, patient population, phase of investigation, study sites and investigators, and other aspects of the clinical trial is then made public as part of the registration. Sponsors are also obligated to discuss the results of their clinical trials after completion. Disclosure of the results of these trials can be delayed in certain circumstances for up to two years after the date of completion of the trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs as well as clinical trial design. Expedited Development and Review Programs Fast Track Designation and Priority Review The FDA is required to facilitate the development, and expedite the review, of drugs or biologic products that are intended for the treatment of a serious or life-threatening disease or condition for which there is no effective treatment and which demonstrate the potential to address unmet medical needs for the condition. Fast track designation may be granted for a product that is intended to treat a serious or life-threatening disease or condition for which there is no effective treatment and preclinical or clinical data demonstrate the potential to address unmet medical needs for the condition. Fast track designation applies to both the product and the specific indication for which it is being studied. The sponsor of an investigational biological product may request that the FDA designate the product candidate for a specific indication as a fast track product concurrent with, or after, the submission of the IND for the product candidate. FDA must determine if the product candidate qualifies for fast track designation within 60 days of receipt of the sponsor’s request. For fast-track products, sponsors may have more frequent interactions with the FDA and the FDA may initiate review of sections of a fast-track product’s BLA before the application is complete. This “rolling review” is available if the FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a fast-track product may be effective. The sponsor must also provide, and the FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees. Fast track designation may be withdrawn if the FDA believes that the designation is no longer supported by data emerging in the clinical trial process. Priority review may be granted for products that are intended to treat a serious or life-threatening condition and, if approved, would provide a significant improvement in safety and effectiveness compared to available therapies. The FDA determines at the time of filing the BLA whether the proposed product would be a significant improvement and therefore receive a priority review designation. The FDA will attempt to direct additional resources to the evaluation of an application designated for priority review in an effort to facilitate the review. Breakthrough Therapy Designation The FDA is also required to expedite the development and review of applications for approval of biologics that are intended to treat a serious or life-threatening disease or condition where preliminary clinical evidence indicates that the biologic may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints. Under the breakthrough therapy program, the sponsor of a new product candidate may request that the FDA designate the product candidate for a specific indication as a breakthrough therapy concurrent with, or after, the filing of the IND for the product candidate. The FDA must determine if the product candidate qualifies for breakthrough therapy designation within 60 days of receipt of the sponsor’s request. 30 The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process, providing timely advice to the product sponsor regarding development and approval, involving more senior staff in the review process, assigning a cross-disciplinary project lead for the review team and taking other steps to design the clinical studies in an efficient manner. Accelerated Approval Accelerated approval may be granted for a product that is intended to treat a serious or life-threatening condition and that generally provides a meaningful therapeutic advantage to patients over existing treatments. A product eligible for accelerated approval may be approved on the basis of either a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. The accelerated approval pathway is most often used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical benefit of a product, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. Thus, accelerated approval has been used extensively in the development and approval of products for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large studies to demonstrate a clinical or survival benefit. The accelerated approval pathway is contingent on a sponsor’s agreement to conduct additional post-approval confirmatory studies to verify and describe the product’s clinical benefit. These confirmatory trials must be completed with due diligence and, in some cases, the FDA may require that the trial be designed, initiated, and/or fully enrolled prior to approval. Failure to conduct required post-approval studies, or to confirm a clinical benefit during post-marketing studies, would allow the FDA to withdraw the product from the market on an expedited basis. All promotional materials for product candidates approved under accelerated regulations are subject to prior review by the FDA. The Food and Drug Omnibus Reform Act (“FDORA”) was enacted, which includes provisions related to the accelerated approval pathway. Pursuant to FDORA, the FDA is authorized to require a post-approval study to be underway prior to approval or within a specified time period following approval. FDORA also requires the FDA to specify conditions of any required post-approval study, which may include milestones such as a target date of study completion and requires sponsors to submit progress reports for required post-approval studies and any conditions required by the FDA not later than 180 days following approval and not less frequently than every 180 days thereafter until completion or termination of the study. FDORA enables the FDA to initiate enforcement action for the failure to conduct with due diligence a required post-approval study, including a failure to meet any required conditions specified by the FDA or to submit timely reports. Regenerative Medicine Advanced Therapy Designation The Regenerative Medicine Advanced Therapy (“RMAT”) designation is an expedited program for the advancement and approval of regenerative medicine products that are intended to treat, modify, reverse, or cure a serious condition and where preliminary clinical evidence indicates the potential to address unmet medical needs for life-threatening diseases or conditions. Similar to Breakthrough Therapy designation, the RMAT allows companies developing regenerative medicine therapies to work earlier, more closely, and frequently with the FDA, and RMAT-designated products may be eligible for priority review and accelerated approval. Regenerative medicine therapies include cell therapies, therapeutic tissue engineering products, human cell and tissue products, and combination products using any such therapies or products, except for those regulated solely under section 361 of the PHSA and Title 21 of the Code of Federal Regulations Part 1271. For product candidates that have received a RMAT designation, interaction and communication between the FDA and the sponsor of the trial can help to identify the most efficient path for clinical development while minimizing the number of patients placed in ineffective control regimens. Pediatric Information Under the Pediatric Research Equity Act (“PREA”), BLAs or supplements to BLAs must contain data to assess the safety and effectiveness of the biological product for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the biological product is safe and effective. The FDA may grant full or partial waivers, or deferrals, for submission of data. Unless otherwise required by regulation, the PREA does not apply to any biological product for an indication for which orphan designation has been granted except that PREA will apply to an original BLA for a new active ingredient that is orphan-designated if the drug is a molecularly targeted cancer product intended for the treatment of an adult cancer and is directed at a molecular target that the FDA determines to be substantially relevant to the growth or progression of a pediatric cancer. 31 The Best Pharmaceuticals for Children Act (“BPCA”) provides a six-month extension of any non-patent exclusivity for a biologic if certain conditions are met. Conditions for exclusivity include the FDA’s determination that information relating to the use of a new biologic in the pediatric population may produce health benefits in that population, FDA making a written request for pediatric studies, and the applicant agreeing to perform, and reporting on, the requested studies within the statutory timeframe. Applications under the BPCA are treated as priority applications. Additional Controls for Biologics To help reduce the increased risk of the introduction of adventitious agents, the PHSA emphasizes the importance of manufacturing controls for products whose attributes cannot be precisely defined. The PHSA also provides authority to the FDA to immediately suspend biologics licenses in situations where there exists a danger to public health, to prepare or procure products in the event of shortages and critical public health needs, and to authorize the creation and enforcement of regulations to prevent the introduction or spread of communicable diseases within the United States. After a BLA is approved, the product may also be subject to official lot release as a condition of approval. As part of the manufacturing process, the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution. If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA together with a release protocol showing a summary of the lot manufacturing history and the results of all of the manufacturer’s tests performed on the lot. The FDA may also perform certain confirmatory tests on lots of some products, such as viral vaccines, before allowing the manufacturer to release the lots for distribution. In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency, and effectiveness of biological products. After approval of a BLA, biologics manufacturers must address any safety issues that arise, are subject to recalls or a halt in manufacturing, and are subject to periodic inspection after approval. Post-Approval Requirements Once a BLA is approved, a product will be subject to certain post-approval requirements. For instance, the FDA closely regulates the post-approval marketing and promotion of biologics, including standards and regulations for direct-to-consumer advertising, off-label promotion, industry-sponsored scientific and educational activities, and promotional activities involving the internet. Biologics may be marketed only for the approved indications and in a manner consistent with the approved labeling. Adverse event reporting and submission of periodic reports are required following the FDA approval of a BLA. The FDA also may require post-marketing testing, known as Phase 4 testing, REMS, and surveillance to monitor the effects of an approved product, or the FDA may place conditions on an approval that could restrict the distribution or use of the product. In addition, quality control, biological product manufacture, packaging, and labeling procedures must continue to conform to cGMP after approval. Biologics manufacturers and certain of their subcontractors are required to register their establishments with the FDA and certain state agencies. Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMPs. Accordingly, manufacturers must continue to expend time, money, and effort in the areas of production and quality control to maintain compliance with cGMPs. Regulatory authorities may withdraw product approvals or request product recalls if a company fails to comply with regulatory standards, if it encounters problems following initial marketing, or if previously unrecognized problems are subsequently discovered. Biosimilars The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) creates an abbreviated approval pathway for biological products shown to be highly similar to or interchangeable with an FDA-licensed reference biological product. Biosimilars are licensed based on the FDA’s findings of safety, purity and potency for a previously-FDA-licensed product called a reference product. There must be no differences in route of administration, dosage form, and strength, and there must be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency in at least one or more conditions of use for which the reference product is approved. Biosimilarity must be shown through analytical trials, animal trials, and a clinical trial or trials, unless the Secretary of U.S. Department of Health and Human Services (“HHS”) waives a required element. A biosimilar product may also meet the higher hurdle of interchangeability such that it can be substituted for a reference product without the intervention of the prescribing health care provider if the sponsor can demonstrate that the biosimilar product can be expected to produce the same clinical results as the reference product and, for products administered multiple times, the biologic and the reference biologic may be switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic. The first biosimilar was approved in 2015, and the first interchangeable product was approved in 2021. Complexities associated with the larger, and often more complex, structures of 32 biological products, as well as the process by which such products are manufactured, pose significant hurdles to biosimilar product implementation, which are still being evaluated by the FDA. A reference product is granted 12 years of exclusivity from the time of first licensure, or BLA approval, of the reference product, and during that 12 years of data exclusivity, no application for a biosimilar relying on the reference product can be submitted for four years. The first biologic product submitted under the biosimilar abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity against a finding of interchangeability for other biologics for the same condition of use for the lesser of (i) one year after first commercial marketing of the first interchangeable biosimilar, (ii) 18 months after the first interchangeable biosimilar is approved if there is no patent challenge, (iii) 18 months after resolution of a lawsuit over the patents of the reference biologic in favor of the first interchangeable biosimilar applicant, or (iv) 42 months after the first interchangeable biosimilar is approved if a patent lawsuit is ongoing within the 42-month period. Other Healthcare Laws In addition to FDA restrictions on marketing of pharmaceutical products, several other types of state and federal laws have been applied to restrict certain general business and marketing practices in the pharmaceutical industry. These laws include anti-kickback, false claims, transparency and health information privacy laws, and other healthcare laws and regulations. The federal Anti-Kickback Statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce, or in return for, purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid, or other federally financed healthcare programs. The Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act, collectively, the ACA, amended the intent element of the federal Anti-Kickback Statute so that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to commit a violation. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers, among others, on the other. Although there are a number of statutory exceptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions, the exceptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception or safe harbor. Additionally, the ACA amended the federal Anti-Kickback Statute such that a violation of that statute can serve as a basis for liability under the federal civil False Claims Act. Federal civil and criminal false claims laws, including the federal civil False Claims Act, prohibit any person or entity from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to have a false claim paid. This includes claims made to programs where the federal government reimburses, such as Medicare and Medicaid, as well as programs where the federal government is a direct purchaser, such as when it purchases off the Federal Supply Schedule. Pharmaceutical and other healthcare companies have been prosecuted under these laws for, among other things, allegedly inflating drug prices they report to pricing services, which in turn are used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. In addition, certain marketing practices, including off-label promotion, may also violate false claims laws. Most states also have statutes or regulations similar to the federal Anti-Kickback Statute and civil False Claims Act, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor. Other federal statutes pertaining to healthcare fraud and abuse include the civil monetary penalties statute, which prohibits, among other things, the offer or payment of remuneration to a Medicaid or Medicare beneficiary that the offeror or payor knows or should know is likely to influence the beneficiary to order or receive a reimbursable item or service from a particular supplier, and the additional federal criminal statutes created by the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which prohibit, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program or obtain by means of false or fraudulent pretenses, representations or promises any money or property owned by or under the control of any healthcare benefit program in connection with the delivery of or payment for healthcare benefits, items or services. 33 In addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”) and their respective implementing regulations, including the Final Omnibus Rule published on January 25, 2013, impose obligations on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, as well as their business associates and their subcontractors that perform certain services involving the storage, use or disclosure of individually identifiable health information, including mandatory contractual terms, with respect to safeguarding the privacy, security, and transmission of individually identifiable health information, and require notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information. HITECH increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions. In addition, many state laws govern the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and may not have the same effect, and often are not preempted by HIPAA. Further, pursuant to the federal Physician Payments Sunshine Act, enacted as part of the ACA, the Centers for Medicare & Medicaid Services (“CMS”), issued a final rule that requires certain manufacturers of approved prescription drugs that are reimbursable under Medicare, Medicaid, or the Children’s Health Insurance Program, with certain exceptions, to collect and annually report information on certain payments or transfers of value to physicians (defined to include doctors, dentists, optometrists, podiatrists, and chiropractors), physician assistants, certain types of advance practice nurses and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. The reported data is made available in searchable form on a public website on an annual basis. Failure to submit required information may result in civil monetary penalties. We may also be subject to analogous state and foreign anti-kickback and false claims laws that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers, or that apply regardless of payor. In addition, several states now require prescription drug companies to report certain expenses relating to the marketing and promotion of drug products and to report gifts and payments to individual healthcare practitioners in these states. Other states prohibit various marketing-related activities, such as the provision of certain kinds of gifts or meals. Further, certain states require the posting of information relating to clinical studies and their outcomes. A growing number of states require the reporting of certain drug pricing information, including information pertaining to and justifying price increases and the price set for newly launched drugs, or to prohibit prescription drug price gouging. In addition, certain states require pharmaceutical companies to implement compliance programs and/or marketing codes. Several additional states are considering similar proposals. Certain states and local jurisdictions also require the registration of pharmaceutical sales representatives. Compliance with these laws is difficult and time consuming, and companies that do not comply with these state laws face civil penalties. Efforts to ensure that business arrangements with third parties comply with applicable state, federal, and foreign healthcare laws and regulations involve substantial costs. If a drug company’s operations are found to be in violation of any such requirements, it may be subject to significant penalties, including civil, criminal and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of its operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other federal or state government healthcare programs, including Medicare and Medicaid, integrity oversight and reporting obligations, imprisonment, and reputational harm. Although effective compliance programs can mitigate the risk of investigation and prosecution for violations of these laws, these risks cannot be entirely eliminated. Any action for an alleged or suspected violation can cause a drug company to incur significant legal expenses and divert management’s attention from the operation of the business, even if such action is successfully defended. Data Privacy and Security Numerous state, federal and foreign laws, govern the collection, dissemination, use, access to, confidentiality, and security of personal information, including health-related information. In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws and regulations that govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners. For example, HIPAA, as amended by HITECH, and their respective implementing regulations, imposes privacy, security and breach notification obligations on certain health care providers, health plans, and health care clearinghouses, known as covered entities, as well as their business associates that perform certain services that involve creating, receiving, maintaining or transmitting individually identifiable health information for or on behalf of such covered entities. Entities that are found to be in violation of HIPAA may be subject to significant civil, criminal and administrative fines and penalties, and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance. Further, entities that knowingly obtain, use, or disclose individually identifiable health 34 information maintained by a HIPAA covered entity in a manner that is not authorized or permitted by HIPAA may be subject to criminal penalties. Even when HIPAA does not apply, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act. In addition, certain state and non-U.S. laws, such as the General Data Protection Regulation (the “GDPR”) govern the privacy and security of personal information, including health-related information, in certain circumstances. Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation. For example, the California Consumer Privacy Act (“CCPA”), which went into effect on January 1, 2020, creates new data privacy obligations for covered companies and provides new privacy rights to California residents. On January 1, 2023, the California Privacy Rights Act (“CPRA”), which substantially amends the CCPA, went into effect. The CCPA and CPRA provide for unlimited civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. Virginia’s Consumer Data Protection Act, which took effect on January 1, 2023, requires businesses subject to the legislation to conduct data protection assessments in certain circumstances and requires opt-in consent from consumers to acquire and process their sensitive personal information, which includes information revealing a consumer’s physical and mental health diagnosis and genetic and biometric information that can identify a consumer. Colorado enacted the Colorado Privacy Act, and Connecticut enacted the Connecticut Data Privacy Act, each of which took effect on July 1, 2023, and Utah enacted the Consumer Privacy Act, which became effective on December 31, 2023, and each of these laws may increase the complexity, variation in requirements, restrictions, and potential legal risks, and could require increased compliance costs and changes in business practices and policies. Other states have also enacted, proposed, or are considering proposing, data privacy laws, which could further complicate compliance efforts, increase our potential liability and adversely affect our business. In Europe, the GDPR went into effect in May 2018 and introduces strict requirements for processing the personal data of individuals within the European Economic Area (“EEA”). Further, recent legal developments in Europe have created complexity and compliance uncertainty regarding certain transfers of personal data from the EEA. For example, on July 16, 2020, the Court of Justice of the European Union invalidated the EU-U.S. Privacy Shield Framework (the “Privacy Shield”) under which personal data could be transferred from the EEA to United States entities who had self-certified under the Privacy Shield scheme. Moreover, it is uncertain whether the standard contractual clauses will also be invalidated by the European courts or legislature. Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater. Additionally, following the United Kingdom’s withdrawal from the European Union and the EEA, companies have to comply with the GDPR and the GDPR as incorporated into United Kingdom national law, the latter regime having the ability to separately fine up to the greater of £17.5 million or 4% of global turnover. The relationship between the United Kingdom and the European Union in relation to certain aspects of data protection law remains unclear, for example around how data can lawfully be transferred between each jurisdiction. Coverage and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any pharmaceutical or biological product for which we obtain regulatory approval. Sales of any product, if approved, depend in part on the extent to which such product will be covered by third-party payors, such as federal, state, and foreign government healthcare programs, commercial insurance, and managed healthcare organizations, and the level of reimbursement, if any, for such product by third-party payors. Decisions regarding whether to cover any of our product candidates, if approved, the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis. Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor. Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations. 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 product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs. Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization. In addition, companion diagnostic tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical or biological products. Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical or biological products, will apply to companion diagnostics. 35 In addition, the U.S. government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement, and requirements for substitution of generic products. Third-party payors are increasingly challenging the prices charged for medical products and services, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical or biological products, medical devices, and medical services, in addition to questioning safety and efficacy. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product that receives approval. Decreases in third-party reimbursement for any product or a decision by a third-party not to cover a product could reduce physician usage and patient demand for the product. United States Healthcare Reform Healthcare reforms that have been adopted, and that may be adopted in the future, could result in further reductions in coverage and levels of reimbursement for pharmaceutical products, increases in rebates payable under U.S. government rebate programs and additional downward pressure on pharmaceutical product prices. Several healthcare reform proposals recently culminated in the enactment of the Inflation Reduction Act (“IRA”) in August 2022, which, among other things, allows HHS to directly negotiate the selling price of a statutorily specified number of drugs and biologics each year that CMS reimburses under Medicare Part B and Part D. The negotiated price may not exceed a statutory ceiling price. Only high-expenditure single-source biologics that have been approved for at least 11 years (7 years for drugs) can be selected by CMS for negotiation, with the negotiated price taking effect two years after the selection year. For 2026, the first year in which negotiated prices become effective, CMS selected 10 high-cost Medicare Part D products in 2023, negotiations began in 2024, and the negotiated maximum fair price for each product has been announced. CMS has selected 15 additional Medicare Part D drugs for negotiated maximum fair pricing in 2027. For 2028, an additional 15 drugs, which may be covered under either Medicare Part B or Part D, will be selected, and for 2029 and subsequent years, 20 Part B or Part D drugs will be selected. A drug or biological product that has an orphan drug designation for only one rare disease or condition will be excluded from the IRA’s price negotiation requirements, but will lose that exclusion if it receives designations for more than one rare disease or condition, or if is approved for an indication that is not within that single designated rare disease or condition, unless such additional designation or such disqualifying approvals are withdrawn by the time CMS evaluates the drug for selection for negotiation. The IRA also imposes rebates on Medicare Part B and Part D drugs whose prices have increased at a rate greater than the rate of inflation, and in November 2024, CMS finalized regulations for these inflation rebates. The IRA also extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025. The IRA permits the Secretary of HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years. Manufacturers that fail to comply with the IRA may be subject to various penalties, including significant civil monetary penalties. These provisions have been and may continue to be subject to legal challenges. For example, the provisions related to the negotiation of selling prices of high-expenditure single-source drugs and biologics have been challenged in multiple lawsuits brought by pharmaceutical manufacturers. Thus, while it is unclear how the IRA will be implemented, it will likely have a significant impact on the biopharmaceutical industry and the pricing of prescription drug products. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical 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. We expect that additional state and federal healthcare reform measures could be adopted in the future. Other Government Regulation Outside of the United States In addition to regulations in the United States, we are subject to a variety of regulations in other jurisdictions governing, among other things, research and development, clinical trials, testing, manufacturing, safety, efficacy, quality control, labeling, packaging, storage, record keeping, distribution, reporting, export and import, advertising, marketing, and other promotional practices involving biological products as well as authorization, approval as well as post-approval monitoring and reporting of our products. Because biologically sourced raw materials are subject to unique contamination risks, their use may be restricted in some countries. Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. Certain countries outside of the United States have a similar process that requires the submission of a clinical trial application (a “CTA”), much like the IND prior to the commencement of human clinical trials. 36 The requirements and process governing the conduct of clinical trials, including requirements to conduct additional clinical trials, product licensing, safety reporting, post-authorization requirements, marketing and promotion, interactions with healthcare professionals, pricing, and reimbursement may vary widely from country to country. No action can be taken to market any product in a country until an appropriate approval application has been approved by the regulatory authorities in that country. The current approval process varies from country to country, and the time spent in gaining approval varies from that required for FDA approval. In certain countries, the sales price of a product must also be approved. The pricing review period often begins after market approval is granted. Even if a product is approved by a regulatory authority, satisfactory prices may not be approved for such product, which would make launch of such products commercially unfeasible in such countries. Regulation in the European Union Drug and Biologic Development Process The conduct of clinical trials is currently governed by the EU Clinical Trials Directive 2001/20/EC (“Clinical Trials Directive”), and will be replaced by the EU Clinical Trials Regulation (EU) No. 536/2014 (“Clinical Trials Regulation”), once the latter comes into effect. The Clinical Trials Regulation introduces a complete overhaul of the existing regulation of clinical trials for medicinal products in the EU. Currently it is not expected to come into force before December 2021. Under the current regime, before a clinical trial can be initiated, it must be approved in each EU Member State where there is a site at which the trial is to be conducted. The approval must be obtained from two separate entities: the National Competent Authority (“NCA”), and one or more Ethics Committees. The NCA of the EU Member States in which the clinical trial will be conducted must authorize the conduct of the trial, and the independent Ethics Committee must grant a positive opinion in relation to the conduct of the clinical trial in the relevant EU Member State before the commencement of the trial. Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be submitted to or approved by the relevant NCA and Ethics Committees. Under the current regime all suspected unexpected serious adverse reactions to the investigated drug that occur during the clinical trial must be reported to the NCA and to the Ethics Committees of the EU Member State where they occur. A more unified procedure will apply under the new Clinical Trials Regulation. A sponsor will be able to submit a single application for approval of a clinical trial through a centralized EU clinical trials portal. One national regulatory authority (the reporting EU Member State proposed by the applicant) will take the lead in validating and evaluating the application and the other regulatory authorities will have limited involvement. If an application is rejected, it may be amended and resubmitted through the EU clinical trials portal. If an approval is issued, the sponsor may start the clinical trial in all concerned Member States. However, a concerned EU Member State may in limited circumstances declare an “opt-out” from an approval and prevent the clinical trial form being conducted in such Member State. The Clinical Trials Regulation also aims to streamline and simplify the rules on safety reporting and introduces enhanced transparency requirements such as mandatory submission of a summary of the clinical trial results to the EU Database. Under both the current regime and the new Clinical Trials Regulation, national laws, regulations, and the applicable Good Clinical Practice and Good Laboratory Practice standards must also be respected during the conduct of the trials, including the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use (“ICH”), guidelines on Good Clinical Practice (“GCP”), and the ethical principles that have their origin in the Declaration of Helsinki. During the development of a medicinal product, the European Medicines Agency (“EMA”), and national regulators within the EU provide the opportunity for dialogue and guidance on the development program, usually in the form of scientific advice. A fee is incurred with each scientific advice procedure. Advice from the EMA is typically provided based on questions concerning, for example, quality (chemistry, manufacturing, and controls testing), nonclinical testing and clinical studies, and pharmacovigilance plans and risk-management programs. Drug Marketing Authorization In the European Union, medicinal products, including advanced therapy medicinal products (“ATMPs”), are subject to extensive pre- and post-market regulation by regulatory authorities at both the European Union and national levels. ATMPs comprise gene therapy products, somatic cell therapy products, and tissue engineered products, which are genes, cells, or tissues that have undergone substantial manipulation and that are administered to human beings in order to cure, diagnose or prevent diseases or regenerate, repair or replace a human tissue. Pursuant to the ATMP Regulation, the Committee on Advanced Therapies (“CAT”), is responsible in conjunction with the Committee for Medicinal Products for Human Use (“CHMP”) for the evaluation of ATMPs. The CHMP and CAT are also responsible for providing guidelines on ATMPs. These guidelines provide additional guidance on the factors that the EMA will consider in relation to the development and evaluation of ATMPs and include, among other things, the preclinical 37 studies required to characterize ATMPs; the manufacturing and control information that should be submitted in a marketing authorization application; and post-approval measures required to monitor patients and evaluate the long-term efficacy and potential adverse reactions of ATMPs. Although such guidelines are not legally binding, compliance with them is often necessary to gain and maintain approval for product candidates. In the European Union and in Iceland, Norway, and Liechtenstein (together the EEA), after completion of all required clinical testing, medicinal products may only be placed on the market after a related Marketing Authorization (“MA”), has been granted. MAs can be obtained through, amongst others, a centralized procedure, which is compulsory for certain medicinal products such as ATMPs. The centralized procedure provides for the grant of a single MA by the European Commission (“EC”), that is valid for all 27 EU Member States and, after respective national implementing decisions, in the three additional EEA Member States (Iceland, Norway, and Liechtenstein). The centralized procedure is compulsory for certain medicinal products, including medicinal products derived from biotechnological processes, orphan medicinal products, ATMPs, and products with a new active substance indicated for the treatment of AIDS, cancer, neurodegenerative disorders, diabetes, autoimmune diseases, and viral diseases. It is optional for medicinal products containing a new active substance not yet authorized in the EEA before May 20, 2004, that constitute significant therapeutic, scientific or technical innovations, or for which the grant of a MA through the centralized procedure would be in the interest of public health at the EU level. The timeframe for the evaluation of an application under the centralized procedure is 210 days, excluding clock stops. Typically, the overall process takes a year or more unless the application is eligible for an accelerated assessment. All new marketing authorization applications must include a Risk Management Plan (“RMP”), describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the MA. RMPs and Periodic Safety Update Reports (“PSURs”) are routinely available to third parties requesting access, subject to limited redactions. Additionally, the holder of a marketing authorization for an ATMP must put in place and maintain a system to ensure that each individual product and its starting and raw materials, including all substances coming into contact with the cells or tissues it may contain, can be traced through the sourcing, manufacturing, packaging, storage, transport, and delivery to the relevant healthcare institution where the product is used. MAs have an initial duration of five years. The authorization may subsequently be renewed for an unlimited period unless the European Commission or the national competent authority grants only a five-year renewal. Data and Market Exclusivity As in the United States, the European Union also provides opportunities for market and/or data exclusivity. For example, New Chemical Entities (“NCE”), approved in the European Union generally qualify for eight years of data exclusivity and ten years of market exclusivity. Data exclusivity is the period during which another applicant cannot rely on the MA holder’s pharmacological, toxicological, and clinical data in support of another MA for the purposes of submitting an application, obtaining marketing authorization or placing the product on the market. But after eight years, a generic or biosimilar product application may be submitted and generic companies may rely on the MA holder’s data. However, even if a generic or biosimilar product is authorized it cannot be placed on the market in the European Union until the expiration of the 10-year market exclusivity period. An additional non-cumulative one-year period of marketing exclusivity is possible if during the data exclusivity period (the first eight years of the 10‑year marketing exclusivity period), the MA holder obtains an authorization for one or more new therapeutic indications that are deemed to bring a significant clinical benefit compared to existing therapies. Products may not be granted data exclusivity since there is no guarantee that a product will be considered by the European Union’s regulatory authorities to include an NCE. Even if a compound is considered to be an NCE and the MA applicant is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another version of the medicinal product if such a company can complete a full marketing authorization application with their own complete database of pharmaceutical tests, preclinical studies, and clinical trials and obtain MA for its product. Post-Approval Regulation Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission, and/or the competent regulatory authorities of the EU Member States. This oversight applies both before and after grant of manufacturing licenses and marketing authorizations. It includes control of 38 compliance with EU good manufacturing practices rules, manufacturing authorizations, pharmacovigilance rules, and requirements governing advertising, promotion, sale, and distribution, recordkeeping, importing, and exporting of medicinal products. Failure by us or by any of our third-party partners, including suppliers, manufacturers, and distributors to comply with EU laws and the related national laws of individual EU Member States governing the conduct of clinical trials, manufacturing approval, marketing authorization of medicinal products, and marketing of such products, both before and after grant of marketing authorization, statutory health insurance, bribery and anti-corruption, or other applicable regulatory requirements may result in administrative, civil, or criminal penalties. These penalties could include delays or refusal to authorize the conduct of clinical trials or to grant marketing authorization, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the marketing authorization, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines, and criminal penalties. The holder of a marketing authorization for a medicinal product must also comply with EU pharmacovigilance legislation and its related regulations and guidelines, which entail many requirements for conducting pharmacovigilance, or the assessment and monitoring of the safety of medicinal products. These pharmacovigilance rules can impose on holders of MAs the obligation to conduct a labor intensive collection of data regarding the risks and benefits of marketed medicinal products and to engage in ongoing assessments of those risks and benefits, including the possible requirement to conduct additional clinical studies or post-authorization safety studies to obtain further information on a medicine’s safety, or to measure the effectiveness of risk-management measures, which may be time consuming and expensive and could impact our profitability. MA holders must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of PSURs in relation to medicinal products for which they hold MAs. The EMA reviews PSURs for medicinal products authorized through the centralized procedure. If the EMA has concerns that the risk benefit profile of a product has varied, it can adopt an opinion advising that the existing MA for the product be suspended, withdrawn or varied. The agency can advise that the MA holder be obliged to conduct post-authorization Phase IV safety studies. If the EC agrees with the opinion, it can adopt a decision varying the existing MA. Failure by the marketing authorization holder to fulfill the obligations for which the EC’s decision provides can undermine the ongoing validity of the MA. More generally, non-compliance with pharmacovigilance obligations can lead to the variation, suspension or withdrawal of the MA for the product or imposition of financial penalties or other enforcement measures. Sales and Marketing Regulations The advertising and promotion of our products is also subject to EU laws concerning promotion of medicinal products, interactions with physicians, misleading and comparative advertising and unfair commercial practices. In addition, other national legislation of individual EU Member States may apply to the advertising and promotion of medicinal products and may differ from one country to another. These laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (“SmPC”) as approved by the competent regulatory authorities. The SmPC is the document that provides information to physicians concerning the safe and effective use of the medicinal product. It forms an intrinsic and integral part of the marketing authorization granted for the medicinal product. Promotion of a medicinal product that does not comply with the SmPC is considered to constitute off-label promotion. All advertising and promotional activities for the product must be consistent with the approved SmPC and therefore all off-label promotion is prohibited. Direct-to-consumer advertising of prescription-only medicines is also prohibited in the European Union. Violations of the rules governing the promotion of medicinal products in the European Union could be penalized by administrative measures, fines, and imprisonment. These laws may further limit or restrict the advertising and promotion of our products to the general public and may also impose limitations on its promotional activities with healthcare professionals. Anti-Corruption Legislation In the EU, interactions between pharmaceutical companies and physicians are also governed by strict laws, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct both at the EU level and in the individual EU Member States. The provision of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order or use of medicinal products is prohibited in the European Union. The provision of benefits or advantages to physicians is also governed by the national anti-bribery laws of the EU Member States. Violation of these laws could result in substantial fines and imprisonment. 39 Payments made to physicians in certain EU Member States also must be publicly disclosed. Moreover, agreements with physicians must often be the subject of prior notification and approval by the physician’s employer, his/her regulatory professional organization, and/or the competent authorities of the individual EU Member States. These requirements are provided in the national laws, industry codes, or professional codes of conduct, applicable in the individual EU Member States. Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment. Other Markets Following the UK’s formal departure from the EU on January 31, 2020, the UK entered a transition period to last until December 31, 2020, during which time EU medicines laws will remain applicable to the UK. After the transition period however, changes may be forthcoming as the terms of the UK and EU’s future relationship are negotiated. The UK Medicines and Healthcare Products Regulatory Agency has proposed that, subject to being approved by the UK Parliament, a centralized MA will automatically convert into a UK MA. However, the draft of the “Medicines and Medical Devices Bill 2019-21” currently discussed in the UK House of Lords does not contain such a provision, but would only authorize the UK government to become active in the field of legislation concerning market authorizations in relation to human medicines. For other countries outside of the European Union, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing, and reimbursement vary from country to country. In all cases, again, the clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions, and criminal prosecution. Human Capital Management Our approach to human capital resource management starts with our mission to discover and develop novel immunotherapies to lengthen health span by disrupting the link between chronic, low-grade inflammation and age-related diseases. Our industry exists in a complex regulatory environment. The unique demands of our industry, together with the challenges of running an enterprise focused on the discovery, development, manufacture and commercialization of innovative medicines, require talent that is highly educated and/or has significant industry experience. Additionally, for certain key functions, we require specific scientific expertise to oversee and conduct R&D activities and the complex manufacturing requirements for biopharmaceutical products. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing and integrating our existing and additional employees. We recognize that attracting, motivating and retaining talent at all levels is vital to our continued success. Our employees are a significant asset and we aim to create an equitable, inclusive and empowering environment in which our employees can grow and advance their careers, with the overall goal of developing, expanding and retaining our workforce to support our current pipeline and future business goals. By focusing on employee retention and engagement, we also improve our ability to support our clinical trials, our pipeline, our platform technologies, business and operations, and also protect the long-term interests of our stockholders. Our success also depends on our ability to attract, engage and retain a diverse group of employees. Our base pay program aims to compensate management and staff members relative to the value of the contributions of their role, which takes into account the skills, knowledge and abilities required to perform each position, as well as the experience brought to the job. We also provide annual incentive programs to reward our management team and staff members in alignment with achievement of Company-wide goals that are established annually and designed to drive aspects of our strategic priorities that support and advance our strategy across our Company. Our management team and staff members are eligible for the grant of equity awards under our long-term incentive program that are designed to align the experience of these staff with that of our stockholders. All management team and staff members also participate in a regular performance measurement process that aligns pay to performance and through which they receive performance and development feedback. Our benefit programs are also generally broad-based, promote health and overall well-being and emphasize saving for retirement. All management team and regular staff members are eligible to participate in the same core health and welfare and retirement savings plans. Other employee benefits include medical plans, health savings plan, dental plans, vacation and sick-pay plans, employee assistance programs, life and accident insurance and short and long-term disability benefits. Our Compensation Committee provides oversight of our compensation plans, policies and programs. 40 As of December 31, 2024, we had 36 full-time employees, 26 of whom were engaged in research, clinical development, manufacturing, and quality control activities, and 10 of whom were engaged in administrative activities. None of our employees are represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good. Corporate Information We are located in Miramar, Florida and were incorporated in the state of Delaware in April 2018. Available Information We make available, free of charge, on or through our website (http://www.hcwbiologics.com), our annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Sections 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after they have been electronically filed with, or furnished to, the SEC. References to website addresses in this report are intended to be inactive textual references only, and none of the information contained on our website is part of this report or incorporated in this report by reference. 41