What changed in this filing

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Item 1. Business

2026-02-26 compared with 2025-02-27 · 216 added, 214 removed, 1137 unchanged (27% of the section changed)

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in July 2021.

In December 2021 and January 2024, the FDA approved an expansion of ZYNRELEF's indication.

ZYNRELEF is approved for small-to-medium open abdominal, lower extremity total joint arthroplasty, soft tissue and orthopedic surgical procedures including foot and ankle, and other procedures in which direct exposure to articular cartilage is avoided.

In September 2024, the FDA approved our Prior Approval Supplement Application for ZYNRELEF Vial Access Needle ("VAN"), which will replace the current vented vial spike.

In March 2022, the Centers for Medicare and Medicaid Services (“CMS”) approved a 3-year transitional pass-through status of ZYNRELEF, which became effective on April 1, 2022, for separate reimbursement outside of the surgical bundle payment in the Hospital Outpatient Department (“HOPD”) setting of care.

In addition, in December 2022, H.R.

2617, the omnibus spending bill was approved by Congress, which includes the Non-Opioids Prevent Addiction in the Nation (NOPAIN) Act which directs CMS to provide separate Medicare reimbursement for non-opioid treatments that are used to manage pain during surgeries conducted in hospital outpatient departments or in ambulatory surgical centers.

In each of December 2021 and January 2024, the FDA approved an expansion of ZYNRELEF's indication.

ZYNRELEF is approved for use in adults for postsurgical analgesia for up to 72 hours after soft tissue and orthopedic surgical procedures including foot and ankle, and other orthopedic surgical procedures in which direct exposure to articular cartilage is avoided.

In September 2024, the FDA approved the prior approval supplement ("PAS") application for ZYNRELEF Vial Access Needle ("VAN"), which is replacing the current vented vial spike.

Through March 31, 2025, ZYNRELEF was reimbursed outside of the surgical bundle payment in the Hospital Outpatient Department ("HOPD") setting of care through pass-through status granted by the Centers for Medicare and Medicaid Services ("CMS").

Effective April 1, 2025, ZYNRELEF is reimbursed through inclusion in the Non-Opioids Prevent Addiction in the Nation ("NOPAIN") Act, which directs CMS to provide separate Medicare reimbursement for non-opioid treatments that are used to manage pain during surgeries conducted in hospital outpatient departments or in ambulatory surgical centers.

To qualify, the non-opioid treatment must demonstrate the ability to replace, reduce, or avoid intraoperative or postoperative opioid use or the quantity of opioids prescribed in a clinical trial or through data published in a peer-reviewed journal.

The hospital outpatient prospective payment system and ambulatory surgical center proposed rule for calendar year 2025 includes ZYNRELEF as a qualifying non-opioid requiring CMS to provide separate Medicare reimbursement in both the hospital outpatient department and ambulatory surgical center settings from January 1, 2025, through December 31, 2027.

APONVIE is the first and only intravenous (“IV”) formulation of a substance P/neurokinin-1 (“NK1”) receptor antagonist indicated for postoperative nausea and vomiting (“PONV”).

Delivered via single 30-second IV injection, APONVIE has demonstrated rapid achievement of therapeutic drug levels ideally suited for the surgical setting.

Effective October 1, 2025, CMS has approved a new permanent Healthcare Common Procedure Coding System J-code for ZYNRELEF.

ZYNRELEF will continue to qualify under the Non-Opioid Policy for Pain Relief with the J-code and will be reimbursed outside the surgical supply package for Medicare, aligning with the policy goals to remove financial barriers to qualifying non-opioid pain management options.

APONVIE is the first and only intravenous formulation of aprepitant, a substance P/neurokinin-1 ("NK1") receptor antagonist indicated for postoperative nausea and vomiting ("PONV") in adults.

Delivered via a single 30-second intravenous ("IV") injection, APONVIE has demonstrated rapid achievement of therapeutic drug levels ideally suited for the surgical setting.

APONVIE was approved by the FDA in September 2022 and became commercially available in the U.S.

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CMS granted pass-through payment status for APONVIE, effective April 1, 2023.

In 2025, APONVIE was included in the Fifth Consensus Guidelines for the Management of Postoperative Nausea and Vomiting as published in Anesthesia and Analgesia.

Oncology Care Product Portfolio

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CINVANTI is the first IV formulation to directly deliver aprepitant, the active ingredient in EMEND® capsules.

Aprepitant (including its prodrug, fosaprepitant) is the only single-agent NK1 receptor antagonist to significantly reduce nausea and vomiting in both the acute phase (0–24 hours after chemotherapy) and the delayed phase (24–120 hours after chemotherapy).

CINVANTI is the first and only IV formulation of an NK1 receptor antagonist indicated for the prevention of acute and delayed nausea and vomiting associated with Highly Emetogenic Cancer (“HEC”) and nausea and vomiting associated with moderately emetogenic chemotherapy ("MEC") that is free of synthetic surfactants, including polysorbate 80.

Aprepitant (including its prodrug, fosaprepitant) is a single-agent NK1 receptor antagonist to significantly reduce nausea and vomiting in both the acute phase (0–24 hours after chemotherapy) and the delayed phase (24–120 hours after chemotherapy).

CINVANTI is the first and only IV formulation of an NK1 receptor antagonist indicated for the prevention of acute and delayed nausea and vomiting associated with Highly Emetogenic Cancer ("HEC") and nausea and vomiting associated with Moderately Emetogenic Cancer ("MEC") that is free of synthetic surfactants, including polysorbate 80.

CINVANTI, in combination with other antiemetic agents, is indicated in adults for the prevention of acute and delayed nausea and vomiting associated with initial and repeat courses of HEC including high-dose cisplatin as a single-dose regimen, delayed nausea and vomiting associated with initial and repeat courses of MEC as a single-dose regimen, and nausea and vomiting associated with initial and repeat courses of MEC as a 3-day regimen.

NK1 receptor antagonists are typically used in combination with 5-hydroxytryptamine type 3 (“5-HT3”) receptor antagonists.

NK1 receptor antagonists are typically used in combination with 5-hydroxytryptamine ("5-HT3") receptor antagonists.

The only other injectable NK1 receptor antagonist currently approved in the U.S.

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When administered, the polymers undergo controlled hydrolysis, resulting in a controlled, sustained release of the pharmacological agent encapsulated within the Biochronomer-based composition.

Furthermore, our Biochronomer Technology is designed to permit more than

one pharmacological agent to be incorporated, such that multimodal therapy can be delivered with a single administration.

Furthermore, our Biochronomer Technology is designed to permit more than one pharmacological agent to be incorporated, such that multimodal therapy can be delivered with a single administration.

Sales and Marketing

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and potentially other products in development for postoperative pain management that reach the U.S.

APONVIE competes in the PONV prevention market with generic ondansetron, the current standard of care, generic aprepitant, and BARHEMSYS® (amisulpride, marketed by Eagle Pharmaceuticals, Inc.);

APONVIE competes in the PONV prevention market with generic ondansetron, the current standard of care, generic oral aprepitant, and BARHEMSYS® (amisulpride, marketed by Eagle Pharmaceuticals, Inc.);

TAK-951 (a peptide agonist under development (PH2) by Takeda Pharmaceutical Company Limited for PONV and not approved anywhere globally for any use);

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Some of the critical materials and components used in manufacturing our Products are sourced from single suppliers.

An interruption in the supply of a key material could significantly delay our research and development process or increase our expenses for commercialization or development of our Products.

An interruption in the supply of a key material could significantly delay or increase our expenses for commercialization or development of our Products.

Specialized materials must often be manufactured for the first time for use in drug delivery technologies, or materials may be used in the technologies in a manner that is different from their customary commercial uses.

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Granted patents include claims covering the product composition, methods of use and methods of preparation.

Our existing patents may not cover future products,

additional patents may not be issued and current patents, or patents issued in the future, may not provide meaningful protection or prove to be of commercial benefit.

Our existing patents may not cover future products, additional patents may not be issued and current patents, or patents issued in the future, may not provide meaningful protection or prove to be of commercial benefit.

We have filed a number of U.S.

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patents and an additional 107 issued (or registered) foreign patents.

The patents on the bioerodible technologies expire in April 2026.

The patent on the bioerodible technologies expires in April 2026.

CINVANTI is covered by 13 patents issued in the U.S.

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Foreign patents covering CINVANTI have expiration dates ranging from September 2035 to February 2036.

SUSTOL is covered by 18 patents issued (or registered) in foreign countries including France, Germany, Hong Kong, Ireland, Italy, Japan, Spain, Sweden, Switzerland, Taiwan, and the United Kingdom.

Foreign patents covering SUSTOL expire in September 2025.

ZYNRELEF is protected by 17 patents issued in the U.S.

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Likewise, if we receive approvals to market and distribute any such products abroad, they would also be subject to extensive foreign government regulation.

Compliance with these regulations has not had a material effect on our capital

expenditures, earnings, or competitive position to date, but new regulations or amendments to existing regulations to make them more stringent could have such an effect in the future.

Compliance with these regulations has not had a material effect on our capital expenditures, earnings, or competitive position to date, but new regulations or amendments to existing regulations to make them more stringent could have such an effect in the future.

We cannot estimate the expenses we may incur to comply with potential new laws or changes to existing laws, or the other potential effects these laws may have on our business.

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Section 505(b)(2) Applications

Some of our product candidates may be eligible for submission of applications for approval under the FDA’s Section 505(b)(2) approval process, which provides an alternate path to FDA approval for new or improved formulations or new uses of previously approved products.

formulations or new uses of previously approved products.

Section 505(b)(2) was enacted as part of the Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, and allows approval of NDAs that rely, at least in part, on studies that were not conducted by or for the applicant and to which the applicant has not obtained a right of reference.

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Commercial success of our Products will depend, in part, on the availability of coverage and reimbursement from third-party payors at the federal, state and private levels.

Government payor programs, including Medicare and Medicaid, private health care insurance companies and managed care plans have attempted to control costs by limiting coverage and the amount of reimbursement for particular procedures or drug treatments.

Government payor programs, including Medicare and Medicaid, private healthcare insurance companies and managed care plans have attempted to control costs by limiting coverage and the amount of reimbursement for particular procedures or drug treatments.

Congress and state legislatures, from time to time, propose and adopt initiatives aimed at cost containment.

Ongoing federal and state government initiatives directed at lowering the total cost of health care will likely continue to focus on health care reform, the cost of prescription pharmaceuticals and on the reform of the Medicare and Medicaid payment systems.

Ongoing federal and state government initiatives directed at lowering the total cost of healthcare will likely continue to focus on healthcare reform, the cost of prescription pharmaceuticals and on the reform of the Medicare and Medicaid payment systems.

Examples of how limits on drug coverage and reimbursement in the U.S.

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• reforming drug importation laws.

Some third-party payors also require pre-approval of coverage for new drug therapies before they will reimburse health care providers that use such therapies.

Some third-party payors also require pre-approval of coverage for new drug therapies before they will reimburse healthcare providers that use such therapies.

While we cannot predict whether any proposed cost-containment measures will be adopted or otherwise implemented in the future, the announcement or adoption of these proposals could have a material adverse effect on our ability to obtain adequate prices for our current and future products and to operate profitably.

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Anti-kickback, Fraud and Abuse and False Claims Regulation

We are subject to health care fraud and abuse regulation and enforcement by both the federal government and the states in which we conduct our business.

We are subject to healthcare fraud and abuse regulation and enforcement by both the federal government and the states in which we conduct our business.

Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of our Products.

Arrangements with third-party payors and customers may expose us to applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our Products.

Regulations under applicable federal and state healthcare laws and regulations include the federal health care programs’ Anti-Kickback Law, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral or purchase of any good or service for which payment may be made under federal health care programs such as the Medicare and Medicaid programs.

Regulations under applicable federal and state healthcare laws and regulations include the federal healthcare programs’ Anti-Kickback Law, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral or purchase of any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs.

Remuneration has been broadly defined to include anything of value, including cash, improper discounts, and free or reduced-price items and services.

Many states have similar laws that apply to their state health care programs as well as private payors.

In addition, the False Claims Act (“FCA”) imposes liability on persons who, among other things, present or cause to be presented false or fraudulent claims for payment by a federal health care program.

Many states have similar laws that apply to their state healthcare programs as well as private payors.

In addition, the False Claims Act ("FCA") imposes liability on persons who, among other things, present or cause to be presented false or fraudulent claims for payment by a federal healthcare program.

The FCA has been used to prosecute persons submitting claims for payment that are inaccurate or fraudulent, that are for services not provided as claimed, or for services that are not medically necessary.

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The risk of being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations.

Moreover, recent health care reform legislation has strengthened many of these laws.

For example, the Patient Protection and Affordable Care Act (“PPACA”), among other things, amends the intent requirement of the federal anti-kickback and criminal health care fraud statutes to clarify that a person or entity does not need to have actual knowledge of this statute or specific intent to violate it.

Various healthcare reform legislation have strengthened many of these laws.

For example, the Patient Protection and Affordable Care Act ("PPACA"), among other things, amends the intent requirement of the federal anti-kickback and criminal healthcare fraud statutes to clarify that a person or entity does not need to have actual knowledge of this statute or specific intent to violate it.

In addition, PPACA provides that a claim including items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the false claims statutes.

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Federal and State Sunshine Laws

We must comply with federal and state “sunshine” laws, now known as Open Payments that require transparency regarding financial arrangements with health care providers.

We must comply with federal and state "sunshine" laws, now known as Open Payments that require transparency regarding financial arrangements with healthcare providers.

This would include the reporting and disclosure requirements imposed by the PPACA on drug manufacturers regarding any "payment or transfer of value" made or distributed to physicians and teaching hospitals.

Failure to submit required information can result in civil monetary penalties.

A number of states have laws that require the implementation of commercial compliance programs, impose restrictions on drug manufacturer marketing practices and/or require pharmaceutical companies to track and report payments, gifts and other benefits provided to physicians and other health care professionals and entities.

Foreign Corrupt Practices Act

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We are required to comply, as applicable, with numerous federal and state laws, including state security breach notification laws, state health and personal information privacy laws and federal and state consumer protection laws, and to govern the collection, use and disclosure of personal information.

For example, the California Consumer Privacy Act (“CCPA”) became effective on January 1, 2020 and gave California residents expanded rights to access and request deletion of their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used.

Additionally, the California Privacy Rights Act, a ballot measure that was approved by California voters on November 3, 2020 and became operative on January 1, 2023, amends and expands the CCPA and its accompanying obligations, including through yet-to-be-finalized implementing regulations from a new enforcement agency, the California Privacy Protection Agency.

Other states, such as Virginia and Colorado, have also passed comprehensive data privacy and security laws, and similar laws are being considered in several other states, as well as the federal and local levels.

Other countries also have developed, or are developing, laws governing the collection, use and transmission of personal information, such as the General Data Protection Regulation in the EU that became effective in May 2018 and the Personal Information Protection and Electronic Documents Act that became effective in Canada in April 2000.

For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act of 2020 (collectively, the “CCPA”), gives California residents expanded rights to access and request deletion of their personal information, opt out of certain personal information sharing and receive detailed information about how their personal information is used.

Other states have also passed comprehensive data privacy and security laws, and similar laws are being considered in several other states, as well as the federal and local levels.

Other countries also have developed, or are developing, laws governing the collection, use and transmission of personal information, such as the General Data Protection Regulation in the European Union and its United Kingdom equivalent thereof (collectively, the "GDPR") and the Personal Information Protection and Electronic Documents Act ("PIPEDA") in Canada.

In addition, most healthcare providers who utilize our Products or who may utilize other products we may sell in the future are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology and Clinical Health Act, and its implementing regulations (collectively, "HIPAA").

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Violations of these laws could subject us to strict liability, fines or liability to third parties.

There are a number of proposed and pending rules and regulations relating to climate-related disclosures to which we may be subject if such rules become effective and survive pending legal challenges.

For example on March 6, 2024, the U.S.

Securities and Exchange Commission (the "SEC") adopted a final rule requiring public companies to include various climate-related disclosures in certain documents filed with the SEC, including climate-related financial statement metrics, greenhouse gas emissions and climate related targets and goals, and management's role in managing material climate-related risks.

A number of state legislators and regulators have adopted or are currently considering proposing or adopting other rules, regulations, directives, initiatives and laws requiring climate-related disclosures or limiting (or affirmatively requiring) certain climate-related conduct, including California laws S.B.

261, and A.B.

The Company is monitoring the status of such regulations.

We are subject to a variety of financial disclosure and securities trading regulations as a public company in the U.S., including laws relating to the oversight activities of the SEC and the regulations of The Nasdaq Capital Market, on which our shares are traded.

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Drug development is a complex endeavor that requires deep expertise and experience across a broad array of disciplines.

Pharmaceutical companies both large and small compete for a limited number of qualified applicants to fill specialized positions, which continued in 2024, with heavy competition for talent.

Pharmaceutical companies both large and small compete for a limited number of qualified applicants to fill specialized positions with heavy competition for talent.

To attract qualified applicants, we offer a total rewards package consisting of base salary and cash bonus incentive targets aligned with the applicable market norms and long term equity compensation.

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We also monitor employee compliance with applicable laws and regulations through a third-party ethics and compliance hotline system that facilitates anonymous internal and external reporting of complaints or concerns.

We did not receive any complaints during 2024.

We are committed to the safety, health and security of our employees.

We believe a hazard-free environment is critical for the success of our business.

Throughout our operations, we strive to ensure that all our employees have

access to safe workplaces that allow them to succeed in their jobs.

Throughout our operations, we strive to ensure that all our employees have access to safe workplaces that allow them to succeed in their jobs.

Our experience and continuing focus on workplace safety has enabled us to preserve business continuity without sacrificing our commitment to keeping our colleagues safe.

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• We have a history of losses, we expect to generate losses in the near future, and we may never achieve or maintain profitability.

• Additional capital will be needed in the future to enable us to implement our business plan, and we may be unable to raise capital, which would force us to limit or cease our operations.

• Additional capital may be needed in the future to enable us to implement our business plan, and we may be unable to raise capital, which would force us to limit or cease our operations.

• Provisions contained in our debt instruments limit our ability to incur additional indebtedness.

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• Security breaches and other disruptions could compromise our information and expose us to liability, which would cause our business and reputation to suffer.

• Changes in government policies, laws, and regulations and with respect to the government workforce may have a negative impact on our business and the markets in which we operate.

• Changes in government policies, laws, and regulations may have a negative impact on our business and the markets in which we operate.

• If we are unable to adequately protect or enforce our intellectual property rights, we may lose valuable assets or incur costly litigation to protect our rights.

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• Our certificate of incorporation, our bylaws and Delaware law contain provisions that could discourage another company from acquiring us and may prevent attempts by our stockholders to replace or remove our current management.

• Future utilization of net operating loss carryforwards or research and development credit carryforwards may be impaired due to recent changes in ownership.

• Future utilization of net operating loss carryforwards or research and development credit carryforwards may be impaired due to changes in ownership.

• Actions of activist stockholders could impact the pursuit of our business strategies, cause us to incur substantial costs, divert our management’s attention and resources, and adversely affect our business, results of operations, liquidity, financial condition, and the trading price of our common stock.

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• the scope of our approved Product labels, including any expanded indications;

• the perception of physicians and other members of the health care community of the safety and efficacy and cost-competitiveness relative to that of competing products;

• our ability to maintain successful sales, marketing and educational programs for certain physicians and other health care providers;

• the perception of physicians and other members of the healthcare community of the safety and efficacy and cost-competitiveness relative to that of competing products;

• our ability to maintain successful sales, marketing and educational programs for certain physicians and other healthcare providers;

• our ability to raise patient and physician awareness of the risks associated with using opioids for postoperative pain management and encourage physicians to consider utilizing a non-opioid alternative;

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If we are unable to establish and maintain adequate sales, marketing and distribution capabilities, whether independently or with third parties, we may not be able to generate product revenue and our business and results of operations will suffer.

Our internal sales and marketing organization is not currently structured or staffed to launch products on an international level and, therefore, we may not be able to successfully commercialize our Products outside of the U.S.

Currently, we only have approval to market and sell our Products in the U.S and do not have current plans to expand to international markets.

Furthermore, our internal sales and marketing organization is not currently structured or staffed to launch products on an international level and, therefore, we may not be able to successfully commercialize our Products outside of the U.S.

In order to commercialize our Products in jurisdictions other than the U.S., we would be required to obtain separate marketing approvals and comply with numerous and varying regulatory requirements in each foreign country.

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The continuing efforts of the U.S.

government, insurance companies, managed care organizations and other payors of health care costs to contain or reduce costs of health care may adversely affect our ability to generate adequate revenues and gross margins to make our Products commercially viable.

government, insurance companies, managed care organizations and other payors of healthcare costs to contain or reduce costs of healthcare may adversely affect our ability to generate adequate revenues and gross margins to make our Products commercially viable.

Our ability to commercialize our Products successfully will depend in part on the extent to which governmental authorities, private health insurers and other organizations establish appropriate reimbursement levels for the cost of such products and related treatments and for what uses reimbursement will be provided.

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If our Products do not receive adequate reimbursement, our revenue could be severely limited.

In the U.S., given recent federal and state government initiatives directed at lowering the total cost of health care, the U.S.

Congress and state legislatures will likely continue to focus on health care reform, reducing the cost of prescription pharmaceuticals and reforming the Medicare and Medicaid systems.

For example, the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, “PPACA”) encourages comparative effectiveness research.

Any adverse findings for our Products from such research may negatively impact reimbursement available for our Products.

Similarly, the SUPPORT Act, which was signed into law on October 24, 2018, established policies to encourage the prevention and treatment of opioid addiction and the development of non-opioid pain management treatments.

In the U.S., given federal and state government initiatives directed at lowering the total cost of healthcare, the U.S.

Congress and state legislatures has continued to focus on healthcare reform, to reduce the cost of prescription pharmaceuticals and reforming the Medicare and Medicaid systems.

The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the "PPACA") has resulted in sweeping changes to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose taxes and fees on the health industry and impose additional health policy reforms.

Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the PPACA.

The One Big Beautiful Bill Act ("OBBBA") has enacted, among others, changes to enrollment and eligibility requirements for Medicaid and premium tax credits, which has resulted in less coverage in the PPACA’s health insurance marketplace (“Marketplace”).

Further, CMS recently proposed two mandatory payment model pilots, the Guarding U.S.

Medicare Against Rising Drug Costs (GUARD) Model, focused on Part D drugs, and Global Benchmark for Efficient Drug Pricing (GLOBE), focused on Part B drugs, which will require pharmaceutical companies to pay additional rebates on certain medicines, whose U.S.

net-of-discount prices exceed those in certain other countries.

The SUPPORT Act of 2018, established policies to encourage the prevention and treatment of opioid addiction and the development of non-opioid pain management treatments.

Due to the SUPPORT Act, Medicare pays separately for certain non-opioid pain management drugs in ambulatory surgical centers ("ASC") but not in the hospital outpatient setting ("OPPS").

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As of January 1, 2025, Medicare has implemented this new payment methodology, which remains in effect through December 31, 2027.

For 2025, ZYNRELEF is included in this new policy, effective April 1, which means continued separate Medicare payment in the OPPS and ASC settings.

ZYNRELEF is included in this new policy, as of April 1 2025, which means continued separate Medicare payment in the OPPS and ASC settings.

While this change may improve access to ZYNRELEF, it may also lead to greater competition.

In March 2021, Congress enacted the American Rescue Plan Act of 2021, which removed the statutory cap on rebates that manufacturers pay to state Medicaid programs pursuant to the Medicaid Drug Rebate Program.

The Infrastructure Investment and Jobs Act, signed into law on November 15, 2021, also included a provision requiring drug manufacturers to pay CMS a refund for certain amounts of Part B drugs that are discarded from a single-dose container or single-use package.

The American Rescue Plan Act of 2021, removed the statutory cap on rebates that manufacturers pay to state Medicaid programs pursuant to the Medicaid Drug Rebate Program.

The Infrastructure Investment and Jobs Act of 2021 also included a provision requiring drug manufacturers to pay CMS a refund for certain amounts of Part B drugs that are discarded from a single-dose container or single-use package.

Under the law, and a CMS Proposed Rule issued in July 2022, this refund program became effective on January 1, 2023.

Neither of these pieces of legislation have had a material impact on the Company, through December 31, 2024.

Further, the Inflation Reduction Act of 2022 (“IRA”), signed into law in August 2022, includes various provisions intended to address drug-pricing issues (such as provisions empowering the federal government to negotiate the

price of some high-cost, single-source Medicare Part B and Part D drugs (with the new pricing to take effect in January 2026 or thereafter) and requiring rebates for certain Part B and Part D drugs if their price increases outpace inflation).

Although it is too early to assess the impact of these provisions on our Products, our Products would be unlikely to be selected for price negotiation given their low Medicare expenditures relative to other drugs.

However, Medicare inflation rebates may impact our product pricing or increase our rebate obligations, though no material impact has been observed thus far through December 31, 2024.

Such legislation did not have a material impact on the Company, through December 31, 2025.

Further, the Inflation Reduction Act of 2022 ("IRA"), includes various provisions intended to address drug-pricing issues which requires manufacturers to engage in the drug price negotiation program with Medicare or face steep penalties if they don’t agree to provide their drug at the government-set price subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation;

establishes an out-of-pocket maximum for beneficiaries in Part D;

and replaces the Part D coverage gap discount program with a new discounting program.

If any of our Products are subject to price negotiations, it could, among other things, lead to lower revenues prior to the expiry of intellectual property protections.

In addition, developments in Medicare hospital outpatient reimbursement for 340B-acquired drugs may further drive 340B hospital business for Heron.

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Becerra et al, since January 1, 2023, the Medicare Part B hospital outpatient payment rate for 340B-acquired drugs has returned to being at the same rate as the rate for non-340B hospitals, Average Selling Price (ASP) + 6% methodology.

As evidenced by developments such as these, low prices of our Products in the U.S.

and foreign jurisdictions may have a negative impact on the prices of our Products in the U.S.

For example, if legislation is passed or regulations are adopted that tie the prices of U.S.

pharmaceuticals to the cost of pharmaceuticals in other countries, then this could lower the potential price of the product in the U.S., thereby limiting the revenue we would be able to generate from it.

Economic pressure on state budgets may result in states increasingly seeking to achieve budget savings through mechanisms that limit coverage or payment for drugs.

However, pursuant to Executive Order 14273, Lowering Drug Prices by Once Again Putting Americans First , CMS announced that it will conduct a new mandatory Medicare OPPS Drug Acquisition Cost Survey from January 1, 2026, through March 31, 2026.

CMS has stated that this survey will inform potential changes to payment policy beginning with the calendar year 2027 OPPS/ASC proposed rule.

These actions indicate that future adjustments to Medicare payment rates for 340B‑acquired drugs may be under consideration, which could affect reimbursement dynamics for the Company’s products purchased under the 340B program in hospital outpatient settings.

We expect that other healthcare reform measures that may be adopted in the future may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on drug prices, which may affect prices of our Products in the future.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to price our Products at what we consider to be a fair or competitive price, generate revenue, attain profitability, or commercialize our product candidates, if approved.

Moreover, economic pressure on state budgets have resulted in states increasingly seeking to achieve budget savings through mechanisms that limit coverage or payment for drugs.

For example, individual states in the U.S.

have become increasingly active in implementing regulations through state Pharmacy Drug Review Boards designed to contain drug pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures.

State Medicaid programs are increasingly asking manufacturers to pay supplemental rebates and requiring prior authorization by the state program for use of any drug for which supplemental rebates are not being paid.

Further, the trend toward managed health care in the U.S., which could significantly influence the purchase of health care services and products, may result in lower prices for our Products.

While we cannot predict whether any legislative or regulatory proposals affecting our business will be adopted, the announcement or adoption of these proposals could have a material and adverse effect on our potential revenues and gross margins.

Regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

In addition, the trend toward managed healthcare in the U.S., which could significantly influence the purchase of healthcare services and products, may result in lower prices for our Products.

Further, executive orders were signed to implement Most Favored Nation drug pricing policies designed to align certain prescription drug prices in the U.S.

to lower prices available in other countries.

Investigations are being conducted to examine price differentials and consider policy approaches for implementation, including through administrative action.

If such Most Favored Nation policies are implemented, changes to drug pricing are expected to affect the profitability of pharmaceutical and biotech companies in the U.S.

as well as in other countries, as a price referencing policy to the U.S.

market could make it commercially unviable to commercialize a drug product in a price constrained market.

The details of the proposed policies are unclear and the final terms and impact remain uncertain, and may pose long-term risks to our business and our future commercialization plans of our Products and

product candidates.

In addition, the Fair Prescription Drug Prices for Americans Act was re-introduced in May 2025 and proposes to cap the retail list price of prescription drugs and biological products in the United States at the average retail list price for such product among certain countries.

Finally, in December 2025, the BIOSECURE Act was signed into law as part of the National Defense Authorization Act, which restricts U.S.

government agencies from purchasing or obtaining certain biotechnology equipment or services from “biotechnology companies of concern” (“BCC”);

entering, extending or renewing a contract with any entity using biotechnology equipment or services provided by a BCC to perform a government contract;

or granting government funds or loans for such biotechnology equipment or services provided by a BCC.

The BIOSECURE ACT may have significant implications for U.S.

companies with government contracts that obtain biotechnology equipment or services from a BCC, including contracts with the Department of Veterans Affairs, and any related impact on reimbursement under Medicaid and Medicare Part B.

While we do not currently anticipate any material impact from the BIOSECURE Act, evolving regulatory requirements may introduce additional operational and contracting obligations over time.

While we cannot predict the impact of such legislative or regulatory changes on our business, the announcement or adoption of these proposals could have a material and adverse effect on our potential revenues and gross margins.

If we fail to comply with our reporting and payment obligations under U.S.

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If we and our contract manufacturers fail to achieve and maintain high manufacturing standards in compliance with cGMP, or fail to scale up manufacturing processes in a timely manner, we may experience manufacturing errors resulting in defective products that could be harmful to patients, product recalls or withdrawals, delays or interruptions of production or failures in product testing or delivery, delay or prevention of filing or approval of marketing applications for our product candidates, cost overruns or other problems that could seriously harm our business.

For instance, our third party suppliers and contract manufacturers have produced drug products that do not meet our specifications and quality standards.

We have, and may in the future, be required to take inventory write-offs and incur other charges and expenses for products that fail to meet specifications, undertake costly remediation efforts, experience delays that affect our operations and commercialization plans or seek more costly manufacturing alternatives.

Not complying with FDA or foreign regulatory requirements could result in an enforcement action, such as a product recall, or prevent commercialization of our product candidates and delay our business development activities.

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Our Products may be in competition with other products for access to the facilities of third parties and, consequently, could be subject to manufacturing delays if our contractors give other companies’ products greater priority than ours.

Additionally, our contractors might be required by government regulation or government authority to prioritize production of other products, such as priority-rated orders pursuant to the U.S.

Government Department of Defense Operation Warp Speed under the Health Resources Priority and Allocations System regulation.

Additionally, our contractors might be required by government regulation or government authority to prioritize production of other products.

For this and other reasons, our third-party contract manufacturers may not be able to manufacture our Products in a cost-effective or timely manner.

If not manufactured in a timely manner, the manufacture of any of our Products or their submission for regulatory approval could be delayed, and our ability to deliver products to market on a timely basis could be impaired.

manufactured in a timely manner, the manufacture of any of our Products or their submission for regulatory approval could be delayed, and our ability to deliver products to market on a timely basis could be impaired.

This could increase our costs, cause us to lose revenue or market share and damage our reputation.

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Some of the critical materials and components used in manufacturing our Products are, or might be, sourced from single suppliers.

An interruption in the supply of a key material could significantly delay our research and development process or increase our expenses for commercialization or development products.

Specialized materials must often be manufactured for the first time for use in drug delivery technologies, or materials may be used in the technologies in a manner different from their customary commercial uses.

An interruption in the supply of a key material could significantly delay or increase our expenses for commercialization or development products.

Specialized materials must often be manufactured for the first time for use in drug delivery technologies, or materials may be used in these technologies in a manner different from their customary commercial uses.

The quality of materials can be critical to the performance of a drug delivery technology, so a reliable source that provides a consistent supply of materials is important.

Materials or components needed for our drug delivery technologies may be difficult to obtain on commercially reasonable terms, particularly when relatively small quantities are required or if the materials traditionally have not been used in pharmaceutical products.

Our reliance on a single vendor for certain components used in the manufacturing of our Products also subjects our business to risk associated with the geographic areas in which those single vendors reside, which could include natural or man-made disasters, including severe weather, epidemics, pandemics, acts of war or terrorism, armed conflict, geopolitical instability or resource shortages.

Such adverse events could cause global supply chain interruptions that could increase our costs and, to the extent such interruptions impair our ability to have sufficient inventory, cause us to lose revenue or market share.

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If we are able to find a replacement supplier, we would need to evaluate and qualify such replacement vendor and its ability to meet quality and compliance standards.

Any change in suppliers or the manufacturing process could require additional regulatory approval and result in operational delays.

Some of our suppliers may experience disruption to their respective supply chains due to the adverse events or conditions, including the effects of a pandemic or disease outbreak, the imposition of tariffs and other trade protective measures, rising geopolitical tensions, armed conflict or other factors, which could delay, prevent or impair our development or commercialization efforts.

We obtain certain critical materials and components used in manufacturing our Products from third-party suppliers whose operations might be directly or indirectly affected by adverse events or conditions, including the effects of a pandemic or disease outbreak, the imposition of tariffs and other trade protective measures, rising geopolitical tensions, armed conflict or other factors (including, without limitation, adverse weather conditions, political instability, war, civil unrest, economic instability, outbreaks of disease, or other public health emergencies and the impact of any such U.S.

or foreign government response and public fears regarding any of the foregoing).

For example, in particular, in recent years, tensions between mainland China and Taiwan have further escalated, with China accelerating the development of military capabilities and threatening the use of military force to gain control over Taiwan in certain circumstances.

Similarly, the ongoing armed conflict between Russia and Ukraine remains unpredictable and could escalate into a broader armed conflict and additional economic sanctions by the U.S., the United Nations or other countries against Russia.

Any change in suppliers or the manufacturing process for our Products could require additional regulatory approval and result in operational delays.

Some of our suppliers may experience disruption to their respective supply chains due to the adverse events or conditions, including the effects of a pandemic or disease outbreak, the imposition of tariffs and other trade protective measures, rising geopolitical tensions, armed conflict, regulatory and policy changes or other factors, which could delay, prevent or impair our development or commercialization efforts.

We obtain certain critical materials and components used in manufacturing our Products from third-party suppliers whose operations might be directly or indirectly affected by adverse events or conditions, including the effects of a pandemic or disease outbreak, the imposition of tariffs and other trade protective measures, rising geopolitical tensions and political instability, armed conflict, regulatory or policy changes, adverse weather conditions and public fears regarding any of the foregoing.

For example, the increase in tariffs between the U.S.

and certain countries has escalated geopolitical tensions and may significantly disrupt the global markets and supply chains.

Tensions between mainland China and Taiwan have further escalated, with China accelerating the development of military capabilities and threatening the use of military force to gain control over Taiwan in certain circumstances.

Similarly, geopolitical conflicts in Russia and Ukraine, the Middle East, South America and elsewhere remain unpredictable and could escalate into a broader armed conflict and additional economic sanctions or countermeasures by the affected countries or others, which could exacerbate market and economic instability.

If we are unable to obtain these critical materials and components in sufficient quantities and in a timely manner, the manufacture, development, testing and clinical study of our Products might be delayed or infeasible, which could significantly harm our business.

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We have, or may have, significant inventory levels of drug products, and we may increase those inventory levels as we continue to commercialize our Products.

We determine inventory levels of drug products based on a variety of estimates, including timing of regulatory approval of our drug products, market demand for our drug products and those of our competitors, entrance of competing drug products, introduction of new, or changes in interpretations of, pharmaceutical regulations, and changes in healthcare provider and insurer reimbursement policies.

pharmaceutical regulations, and changes in healthcare provider and insurer reimbursement policies.

These estimates are inherently difficult to make and may be inaccurate.

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Currently, palonosetron is the only 5-HT3receptor antagonist other than SUSTOL that is approved for the prevention of delayed CINV associated with MEC regimens.

SUSTOL is indicated in combination with other antiemetics in adults for the prevention of acute and delayed nausea and vomiting associated with initial and repeat courses of moderately emetogenic chemotherapy (MEC) or anthracycline and cyclophosphamide (AC) combination chemotherapy regimens, which is considered to be a HEC regimen by the NCCN and ASCO.

SUSTOL is indicated in combination

with other antiemetics in adults for the prevention of acute and delayed nausea and vomiting associated with initial and repeat courses of moderately emetogenic chemotherapy (MEC) or anthracycline and cyclophosphamide (AC) combination chemotherapy regimens, which is considered to be a HEC regimen by the NCCN and ASCO.

No other 5-HT3 receptor antagonist is specifically approved for the prevention of delayed CINV associated with a HEC regimen.

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In an effort to remain competitive in the marketplace, we can determine, from time to time, to change our pricing or marketing strategies for our approved Products, including by altering the amount or availability of discounts or rebates for any of our approved Products.

Any such changes could have short-term or long-term negative impacts on

our revenues, which would cause our business and results of operations to suffer.

Any such changes could have short-term or long-term negative impacts on our revenues, which would cause our business and results of operations to suffer.

Price increases or changes to our marketing strategies may also negatively affect our reputation and our ability to secure and maintain reimbursement coverage for our approved Products, which could result in decreased demand and cause our business and results of operations to suffer.

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As a result, topline data should be viewed with caution until the final data are available.

disclose interim data from our clinical trials.

We may also disclose interim data from our clinical trials.

Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.

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Our ability to complete our clinical trials in a timely fashion depends in large part on a number of key factors, including protocol design, regulatory and IRB approval, the rate of patient enrollment in clinical trials and compliance with extensive cGCP.

In addition, because we fund the development of our Products and product candidates, we may not be able to continue to fund all such development efforts to completion or to provide the support necessary to perform the

clinical trials, obtain regulatory approvals, or market any approved products.

If our drug delivery technologies or product development efforts fail to result in the successful development and commercialization of our Products and product candidates, or if our new Products do not perform as anticipated, such events could materially and adversely affect our business, financial condition, cash flows and results of operations.

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If we lose key members of our senior management team, we may not be able to find suitable replacements and our business may be harmed as a result.

If we fail to adequately address any of the issues referred to above, it could

adversely impact our ability to recruit and retain our skilled employees which may result in a material adverse effect on our business, operating results and financial condition.

If we fail to adequately address any of the issues referred to above, it could adversely impact our ability to recruit and retain our skilled employees which may result in a material adverse effect on our business, operating results and financial condition.

Our business strategy may include acquisitions of other businesses, products or product licenses.

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Any significant unrecoverable losses could seriously impair our operations and financial condition.

Further, the recent geo-political conflicts have created extreme volatility in the global financial markets and are expected to have further global economic consequences, including continued disruptions of the global supply chain and energy markets and heightened volatility of commodity prices.

Any such instability or disruption may have adverse consequences on us or the third parties on whom we rely, including as a result of a general downturn in global economic conditions, deterioration in the credit or equity markets, or more direct impacts on operational matters.

This conflict may also give rise to or amplify the other risks described herein including risks relating to cybersecurity, global economic conditions, and supply chains, which could adversely affect our business, operations and financial condition and results.

Further, recent geo-political conflicts have created extreme volatility in the global financial markets and are expected to have further global economic consequences, including continued disruptions of the global supply chain and energy markets and heightened volatility of commodity prices.

Any such instability or disruption may have adverse consequences on us or the third parties on whom we rely, including as a result of a general downturn in global economic conditions, changes in government regulations, deterioration in the credit or equity markets, or more direct impacts on operational matters.

This conflict may also give rise to or amplify the other risks described herein including risks relating to cybersecurity, global economic conditions, government regulations and supply chains, which could adversely affect our business, operations and financial condition and results.

Our potential international expansion of our business may expose us to new business, regulatory, political, operational, financial and economic risks associated with such expansion and could adversely affect our business, financial condition, results of operations and growth.

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• financial risks, such as longer payment cycles, difficulty in collecting from international customers, pricing and insurance regimes, unexpected changes in tariffs, trade barriers, and exposure to foreign currency exchange rate fluctuations and controls, which could result in increased operating expenses and reduced revenue, and the effect of local and regional financial crises;

• conflicting and changing laws and regulations such as export and import restrictions;

• conflicting and changing laws and regulations, including tariffs and export and import restrictions;

• compliance with tax, employment, immigration and labor laws for employees living or traveling abroad;

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We have incurred substantial expenses in our efforts to develop and commercialize our Products and we may never generate sufficient revenue to become profitable or to sustain profitability.

Additional capital will be needed in the future to enable us to implement our business plan, and we may be unable to raise capital, which would force us to limit or cease our operations.

As of December 31, 2024, we had cash, cash equivalents and short-term investments of $59.3 million and indebtedness under our Senior Convertible Notes and Working Capital Facility totaling $175.5 million.

We expect that we will need to refinance, or otherwise satisfy, our current indebtedness of $175.5 million to fully fund our current business plan and meet all of our commitments.

Historically, we have financed our operations, including technology and product research and development, primarily through sales of our common stock, product sales and debt financings.

Additional capital may be needed in the future to enable us to implement our business plan, and we may be unable to raise capital, which would force us to limit or cease our operations.

As of December 31, 2025, we had cash, cash equivalents and short-term investments of $46.6 million and indebtedness under our Working Capital Facility Agreement, dated August 9, 2023 with Hercules Capital, Inc., as administrative agent, collateral agent, and lender, as amended (the “Working Capital Facility Agreement”) and our senior unsecured convertible notes due 2031 (the "2031 Convertible Notes") totaling $147.1 million.

Historically, we have financed our operations, including technology and product research and development, primarily through Product sales and equity and debt financings.

Our capital requirements and liquidity going forward will depend on numerous factors, including but not limited to:

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• the unanticipated delays due to manufacturing difficulties, supply constraints or changes in the regulatory environment, including as a result of geopolitical uncertainty, or other factors;

• the impact of the $150.0 million in aggregate principal amount of the Senior Convertible Notes (as defined below) that are outstanding and will mature on May 26, 2026, unless earlier converted, redeemed or repurchased;

• the impact of the $25.5 million in aggregate principal amount of the Working Capital Facility (as defined below) that is outstanding and will mature on the earlier of earlier of (a) September 1, 2027 and (b) to the extent that any of the Senior Convertible Notes remain outstanding on such date, (i) May 12, 2026 or (ii) in the event that the maturity date of any of the Senior Convertible Notes is extended, prior to May 12, 2026, to August 11, 2026 or later, the date that is ninety-one days prior to the maturity date of such further extended Senior Convertible Notes;

• general market conditions.

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These restrictive covenants may include, among other things, limitations on borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens, pay dividends, redeem capital stock or make investments.

For example, under a working capital facility agreement that we entered into with Hercules Capital, Inc.

as administrative agent and collateral agent, and the lenders party thereto (the "Working Capital Facility Agreement" and the facility thereunder, the "Working Capital Facility"), we are required to hold cash of no less than $8.5 million, if our market capitalization is less than $400 million.

The Working Capital Facility Agreement also contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain exceptions.

Our outstanding senior unsecured convertible notes due 2026, (the "Senior Convertible Notes") also impose certain negative covenants on the Company, including on the incurrence of certain indebtedness, the creation of certain liens and selling royalty interests in Company assets.

In the event that additional funds are obtained through arrangements with collaborative partners, these arrangements may require us to relinquish rights to some of our technologies, product candidates or Products on terms that are not favorable to us or require us to enter into a collaboration arrangement that we would otherwise seek to develop and commercialize ourselves.

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Provisions contained in our debt instruments limit our ability to incur additional indebtedness.

The terms of our Senior Convertible Notes require us to seek approval from the holders of such notes before taking certain actions, including incurring certain additional indebtedness, modifying the terms of certain existing indebtedness, creating liens or selling royalty interests in Company assets.

Our Senior Convertible Notes also contain provisions that trigger events of default on any default of our financial obligations under certain material contracts we may enter into.

As a result, we may not be able to raise funds through the issuance of debt or selling of royalty interests in the future, which could impair our ability to finance our business obligations or pursue business expansion initiatives.

Our Working Capital Facility Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness, and dividends and other distributions, subject to certain

Our 2031 Convertible Notes also contain provisions that trigger events of default for incurring certain additional indebtedness or any default of our obligations under certain material agreements we may enter into.

As a result, we may not be able to raise funds through the issuance of additional debt in the future, which could impair our ability to finance our business obligations or pursue business expansion initiatives.

We could be exposed to significant product liability claims that could be time-consuming and costly to defend, divert management attention and adversely impact our ability to obtain and maintain insurance coverage.

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We rely on independent third parties to provide certain services to us.

We structure our relationships with these outside services providers in a manner that we believe results in an independent contractor relationship, not an employee relationship.

An independent contractor is generally distinguished from an employee by his or her degree of autonomy and independence in providing services.

A high degree of autonomy and independence is generally indicative of an independent contractor relationship, while a high degree of control is generally indicative of an employment relationship.

We structure our relationships with these outside service providers in a manner that we believe results in an independent contractor relationship, not an employee relationship based on their degree of autonomy and independence in providing certain services.

Tax or other regulatory authorities may challenge our characterization of services providers as independent contractors both under existing laws and regulations and under laws and regulations adopted in the future.

We are aware of a number of judicial decisions and legislative proposals that could bring about major reforms in worker classification, including the California legislature’s 2019 passage of California Assembly Bill 5 (“AB 5”).

AB 5 purports to codify a new test for determining worker classification that is widely viewed as expanding the scope of employee relationships and narrowing the scope of independent contractor relationships.

There is limited guidance from the regulatory authorities charged with its enforcement, and there is a significant degree of uncertainty regarding its application.

In addition, AB 5 has been the subject of widespread national discussion and it is possible that other jurisdictions, including New York, may enact similar laws.

As a result, there is significant uncertainty regarding what the state, federal and foreign worker classification regulatory landscape will look like in future years.

The current economic climate indicates that the debate over worker classification will continue for the foreseeable future.

If such regulatory authorities or state, federal or foreign courts were to determine that our services providers are employees and not independent contractors, we would, among other things, be required to withhold income taxes, to withhold and pay Social Security, Medicare and similar taxes, to pay unemployment and other related payroll taxes, and to provide certain employee benefits.

If such regulatory authorities or state, federal or foreign courts were to determine that our service providers are employees and not independent contractors, we would, among other things, be required to withhold income taxes, to withhold and pay Social Security, Medicare and similar taxes, to pay unemployment and other related payroll taxes, and to provide certain employee benefits.

We could also be liable for unpaid past taxes and other costs and subject to penalties.

As a result, any determination that the services providers we characterize as independent contractors are our employees could have a negative impact on our business, financial condition and results of operations.

As a result, any determination that the service providers we characterize as independent contractors are determined to be employees could have a negative impact on our business, financial condition and results of operations.

Changes to existing tax laws, or challenges to our tax positions could adversely affect our business and financial condition.

The tax regimes to which we are subject or under which we operate may be subject to significant change.

There is uncertainty regarding future legislative and regulatory changes and policies related to matters such as taxation and importation, and any such proposed or enacted regulations by the current or a future U.S.

administration, Congress, or taxing authorities in other jurisdictions could materially affect our tax obligations and operating results.

For example, beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures in the year incurred and instead requires taxpayers to capitalize and subsequently amortize such expenditures over five years for research activities conducted in the U.S.

and over 15 years for research activities conducted outside the U.S.

The OBBBA reinstates the option to deduct domestic research and development expenditures in the year incurred, commencing with tax years beginning after December 31, 2024.

Foreign research and development expenditures remain subject to the 15-year capitalization and amortization requirement.

The OBBBA also includes other significant provisions, including tax cut extensions and modifications to the international tax framework.

To the extent that such changes have a negative impact on us, including as a

result of related uncertainty, these changes could adversely impact our business, results of operations and financial position.

In addition, U.S.

federal, state and local tax laws are extremely complex and subject to various interpretations.

Although we believe that our tax estimates and positions are reasonable, there can be no assurance that our tax positions will not be challenged by relevant tax authorities.

If the relevant tax authorities assess additional taxes on us, this could result in adjustments to, or impact the timing or amount of, taxable income, deductions or other tax allocations, which may adversely affect our results of operations and financial position.

The investment of our cash is subject to risks, which may cause losses or adversely affect the liquidity of these investments and our results of operations, liquidity and financial condition.

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These factors could include, among others, events such as liquidity constraints or failures, the ability to perform obligations under various types of financial, credit or liquidity agreements or arrangements, disruptions or instability in the financial services industry or financial markets, or concerns or negative expectations about the prospects for companies in the financial services industry.

These factors could involve financial institutions or financial services industry companies with which we have financial or business relationships, but could also include factors involving financial markets or the financial

services industry generally.

The results of events or concerns that involve one or more of these factors could include a variety of material and adverse impacts on our current and projected business operations and our financial condition and results of operations.

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The manufacturer and manufacturing facilities we use to make any of our drug candidates will also be subject to periodic review and inspection by the FDA.

If a previously unknown problem or problems with a Product

or a manufacturing and laboratory facility used by us is discovered, the FDA or foreign regulatory agency may impose restrictions on that Product or on the manufacturing facility, including requiring us to withdraw the Product from the market.

If a previously unknown problem or problems with a Product or a manufacturing and laboratory facility used by us is discovered, the FDA or foreign regulatory agency may impose restrictions on that Product or on the manufacturing facility, including requiring us to withdraw the Product from the market.

Any changes to an approved product, including the way it is manufactured or promoted, often require FDA approval before the product, as modified, can be marketed.

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These events, including the reporting of adverse safety events, among others, could result in Product recalls, product liability actions related to our Products or withdrawals or additional regulatory controls (including additional regulatory scrutiny and requirements for additional labeling), all of which could have a negative impact on our business, financial condition, cash flows and results of operations.

The pharmaceutical industry is subject to significant regulation and oversight pursuant to anti-kickback laws, false claims statutes and anti-corruption laws, which may result in significant additional expense and limit our

ability to commercialize our Products.

In addition, any failure to comply with these regulations could result in substantial fines or penalties.

We are subject to health care fraud and abuse regulations that are enforced by the federal government and the states in which we conduct our business, as well as foreign jurisdictions in which we may conduct business.

We are subject to healthcare fraud and abuse regulations that are enforced by the federal government and the states in which we conduct our business, as well as foreign jurisdictions in which we may conduct business.

Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of any drug product with marketing approval.

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Restrictions under applicable federal, state and foreign healthcare laws and regulations include, but are not limited to, the following:

• the Federal health care programs’ Anti-Kickback Law, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, lease, order or recommendation of, any good or service for which payment may be made under federal health care programs such as the Medicare and Medicaid programs;

• federal false claims laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal health care programs that are false or fraudulent.

• the Federal healthcare programs’ Anti-Kickback Law, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, lease, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

This false claims liability may attach in the event that a company is found to have knowingly submitted false average sales price, best price or other pricing data to the government or to have unlawfully promoted its drug products;

• the federal Civil Monetary Penalties law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;

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

• federal “sunshine” laws, now known as Open Payments, that require transparency regarding financial arrangements with health care providers, such as the reporting and disclosure requirements imposed by the federal Physician Payments Sunshine Act within PPACA on drug manufacturers regarding any “payment or transfer of value” made or distributed to physicians, other healthcare professionals, and teaching hospitals as well as ownership and investment interests held by such physicians and their family;

• federal "sunshine" laws, now known as Open Payments, that require transparency regarding financial arrangements with healthcare providers, such as the reporting and disclosure requirements imposed by the federal Physician Payments Sunshine Act within PPACA on drug manufacturers regarding any "payment or transfer of value" made or distributed to physicians, other healthcare professionals, and teaching hospitals as well as ownership and investment interests held by such physicians and their family;

• the Drug Supply Chain Security Act (“DSCSA”), which imposes obligations on entities in the commercial product supply chain, including manufacturers, to identify and track prescription drugs as they are distributed in the United States;

• state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers, state transparency laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information, state laws limiting interactions between pharmaceutical manufacturers and members of the healthcare industry, state laws that require pharmaceutical companies to comply with the industry’s voluntary compliance guidelines and the applicable guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources, marketing restrictions and state laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by federal laws, thus complicating compliance efforts;

• increasingly complex standards for complying with foreign laws and regulations, including those of the EU, that may differ substantially from country to country and may conflict with corresponding U.S.

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Moreover, certain health care reform legislation has strengthened many of these laws.

For example, the PPACA, among other things, amends the intent requirement of the federal anti-kickback and criminal health care fraud statutes to clarify that a person or entity does not need to have actual knowledge of this statute or specific intent to violate it.

Moreover, certain healthcare reform legislation has strengthened many of these laws.

For example, the PPACA, among other things, amends the intent requirement of the federal anti-kickback and criminal healthcare fraud statutes to clarify that a person or entity does not need to have actual knowledge of this statute or specific intent to violate it.

some states, such as California, Massachusetts and Vermont, mandate implementation of commercial compliance programs to ensure compliance with these laws.

In addition, a number of states have laws that require pharmaceutical companies to track and report payments, gifts and other benefits provided to physicians and other health care professionals and entities.

The FCPA and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from providing money or anything of value to officials of foreign governments, foreign political parties, or international organizations with the intent to obtain or retain business or seek a business advantage.

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These consequences, could, in turn, have a negative impact on our business, financial condition and results of operations and could cause the market value of our common shares to decline.

Health care reform could increase our expenses and adversely affect the commercial success of our Products.

Healthcare reform could increase our expenses and adversely affect the commercial success of our Products.

and some foreign jurisdictions are considering or have enacted a number of reform proposals to change the healthcare system.

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• the failure of preclinical testing and early clinical trials to predict results of later clinical trials;

• any delay in completion of clinical trials caused by a regional, national or global disturbance where we or our collaborative partners are enrolling patients in clinical studies, such as a pandemic (including COVID-19), terrorist activities, cyberattack, or war, political unrest, a natural or man-made disaster or any other reason or event, resulting in increased costs;

• any delay in completion of clinical trials caused by a regional, national or global disturbance where we or our collaborative partners are enrolling patients in clinical studies, such as global pandemics and other public health emergencies, war, terrorist activities or political unrest, cyberattacks, a natural or man-made disaster or any other reason or event, resulting in increased costs;

• any delay in obtaining advice from the FDA or similar regulatory authorities;

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

We may not obtain regulatory approval for our product candidates in development.

Regulatory approval may also be delayed or revoked or may impose limitations on the indicated uses of a product candidate.

If we are unable to obtain regulatory approval for our product candidates in development, our business will be substantially harmed.

The process for obtaining regulatory approval of a new drug is time-consuming, is subject to unanticipated delays and costs and requires the commitment of substantial resources.

Any product that we or our potential future collaborative partners develop must receive all necessary regulatory agency approvals or clearances before it may be marketed in the U.S.

or other countries.

Human pharmaceutical products are subject to rigorous preclinical and clinical testing and other requirements by the FDA in the U.S.

and similar health authorities in foreign countries.

We may not receive necessary regulatory approvals or clearances to market our product candidates currently in development in the U.S.

or in other jurisdictions, as a result of changes in regulatory policies prior to approval or other events.

Additionally, data obtained from preclinical and clinical activities, or from stability or bioequivalence studies, are susceptible to varying interpretations that could delay, limit or prevent regulatory agency approvals or clearances.

Our product candidates could fail to receive regulatory approval from the FDA or a comparable foreign regulatory authority for many reasons, including:

• disagreement with the design or implementation of our clinical trials;

• failure to demonstrate that the product candidate is safe and effective for its proposed indication;

• failure of clinical trial results to meet the level of statistical significance required for approval;

• the failure of third parties to manage and conduct the trials or perform necessary oversight to meet expected deadlines or to comply with regulatory requirements;

• failure to demonstrate that the product candidate’s clinical and other benefits outweigh its safety risks;

• disagreement with our interpretation of data from preclinical studies or clinical trials;

• the insufficiency of data collected from clinical trials to support the submission and filing of an NDA or other submission or to obtain regulatory approval;

• disapproval of the manufacturing processes or facilities of third-party manufacturers with whom we contract for clinical and commercial supplies;

• changes in approval policies or regulations that render our preclinical and clinical data insufficient for approval.

The FDA or a comparable non-U.S.

regulatory authority may require additional preclinical or clinical data to support approval, such as confirmatory studies and other data or studies to address questions or concerns that may arise during the FDA review process.

Regulatory approval may also be delayed, limited or prevented by other

For example, in 2013, 2018 and 2019, the U.S.

federal government entered shutdowns suspending services deemed non-essential as a result of the failure by Congress to enact regular appropriations.

Our development and commercialization activities could be harmed or delayed by a similar shutdown of the U.S.

federal government in the future, which may significantly delay the FDA’s ability to timely review and process any submissions we have filed or may file or cause other regulatory delays, which could have a negative impact on our business.

Even if granted, regulatory approvals may include significant limitations on the uses for which products may be marketed.

Failure to comply with applicable regulatory requirements can, among other things, result in warning letters, imposition of civil penalties or other monetary payments, delay in approving or refusal to approve a product candidate, suspension or withdrawal of regulatory approval, product recall or seizure, operating restrictions, interruption of clinical trials or manufacturing, injunctions and criminal prosecution.

In addition, the marketing and manufacturing of products are subject to continuing FDA review, and later discovery of previously unknown problems with a product, its manufacture or its marketing may result in the FDA requiring further clinical research or restrictions on the product or the manufacturer, including withdrawal of the product from the market.

Our use of hazardous materials could subject us to liabilities, fines and sanctions.

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We are and may become subject to stringent and evolving laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and security.

Our actual or perceived failure to comply with

such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, and other adverse business consequences.

Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, loss of revenue or profits, and other adverse business consequences.

In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, "processing") personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, sensitive third-party data, business plans, transactions and financial information (collectively, "sensitive data").

Our data processing activities may subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.

data processing activities may subject us to numerous data privacy and security obligations, such as various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations relating to data privacy and security.

In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).

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These developments may further complicate compliance efforts and may increase legal risk and compliance costs for us and the third parties upon whom we rely.

For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, imposes specific requirements relating to the privacy, security, and transmission of individually identifiable health information.

For example, HIPAA imposes specific requirements relating to the privacy, security, and transmission of individually identifiable health information.

Healthcare providers who prescribe our products and from whom we may obtain patient health information are subject to privacy and security requirements under HIPAA.

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Outside the U.S., an increasing number of laws, regulations, and industry standards may govern data privacy and security.

For example, the European Union’s General Data Protection Regulation (“EU GDPR”), the United Kingdom’s GDPR (“UK GDPR”), Canada’s Personal Information Protection and Electronic Documents Act (“PIPEDA”) and Canada’s Anti-Spam Legislation (“CASL”), impose strict requirements for processing personal data.

For example, under the EU GDPR, companies may face temporary or definitive bans on data processing and other corrective actions;

fines of up to 20 million Euros or 4% of annual global revenue, whichever is greater;

or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.

In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the U.S.

or other countries due to data localization requirements or limitations on cross-border data flows.

Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.

In particular, the EEA and the United Kingdom (“UK”) have significantly restricted the transfer of personal data to the U.S.

and other countries whose data privacy and security laws it believes are inadequate.

Other jurisdictions may adopt similarly stringent interpretations of their data localization and cross-border data transfer laws.

Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the U.S.

in compliance with law, such as the EEA and UK’s standard contractual clauses, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the U.S.

If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the U.S., or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense,

increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

Some European regulators have prevented companies from transferring personal data out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.

For example, GDPR imposes strict obligations and restrictions on the ability to collect, analyze and transfer personal data, including health data from clinical trials and adverse event reporting.

In particular, these obligations and restrictions concern, when required, the consent of the individuals to whom the personal data relates, the information provided to the individuals, the transfer of personal data out of the EU or the United Kingdom, security breach notifications, security and confidentiality of the personal data and imposition of substantial potential fines for breaches of the data protection obligations.

In addition, the EU and other jurisdictions have enacted laws restricting the transfer of personal data from the EU and other jurisdictions to the United States due to data localization requirements or limitations on cross-border data flows.

Although there are currently various mechanisms that may be used to transfer personal data from the EU and United Kingdom to the United States in compliance with law, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.

In addition to data privacy and security laws, we may be contractually subject to industry standards adopted by industry groups and may become subject to such obligations in the future.

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Moreover, despite our efforts, our personnel or third parties on whom we rely may fail to comply with such obligations, which could negatively impact our business operations.

If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences, including but not limited to:

If we or the third parties on which we rely fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant

consequences, including but not limited to:

government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);

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In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds.

Extortion payments may alleviate the negative impact of a ransomware

attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.

The increase in remote work has increased risks to our information technology systems and data, as more of our employees utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit and in public locations.

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Similarly, operational changes at government agencies, including actions intended to reduce government spending at agencies that regulate significant parts of our business, such as the FDA and CMS, could have a significant impact on the implementation of laws and regulations that impact our business.

For example, the layoffs and reorganizations at several U.S.

health agencies, including the FDA, the Department of Health and Human Services (the "HHS"), the Centers for Disease Control and Prevention and the National Institutes of Health, are expected to impact the FDA's ability to review and approve new medicines and conduct necessary inspections.

Over the last several years, the U.S.

government has also shut down several times and certain regulatory agencies, such as the FDA and SEC, have had to furlough employees, experience substantial funding cuts and pause or delay critical activities.

In addition, government funding of agencies on which our operations may rely, including those that fund research and development activities, is subject to the political process, which is inherently fluid and unpredictable, and spending allocations may undergo significant changes through congressional budgeting and

appropriations processes.

Such disruptions at the FDA and other agencies may also increase the time necessary for new drugs or modifications to approved drugs to be reviewed and/or approved by necessary government agencies, which would adversely affect our business.

There is also a great degree of uncertainty related to the impact of U.S.

Supreme Court decisions and executive orders on the enforcement and decision-making authority of regulatory agencies, including those in the FDA, which may lead to delays, if not cancellations, of pending and proposed regulations at federal agencies and subject significant regulatory actions by the agencies to presidential supervision and control.

Accordingly, any change in these laws or regulations, changes in their interpretation, or newly enacted laws or regulations and any failure by us to comply with these laws or regulations could require changes to certain of our business practices, negatively impact our operations, cash flow or financial condition, impose additional costs on us or otherwise adversely affect our business.

For example, U.S.

trade policy under the new administration, including potential new or increased tariffs, along with changing trade policies in China, Mexico, the U.K., Canada, and parts of Europe, may impact global trade, create sourcing challenges with respect to raw materials and instruments and increase our costs, potentially harming our business.

Moreover, uncertainty with respect to legislation, regulation and government policy at the federal, state and local levels, including as a result of the change in administration, has introduced new and difficult-to-quantify macroeconomic and geopolitical risks with potentially far-reaching implications.

For example, significant changes to U.S.

trade policy, including potential new or increased tariffs, along with countermeasures by the affected countries, may impact global trade, create sourcing challenges with respect to raw materials and instruments and increase our costs, potentially harming our business.

has imposed increased tariffs on certain countries and other countries have responded by announcing retaliatory tariffs on U.S.

The tariffs have disrupted and may continue to disrupt the global markets and escalate geopolitical tensions between the U.S.

and other countries.

The extent of the impact of such tariffs and proposed regulations on our business specifically, or on the U.S.

market and global economy generally, are uncertain and unpredictable, and could adversely affect our business, financial condition and results of operations.

Further, the U.S.

may also enact other regulations or policies that affect trade or otherwise impact the pharmaceutical industry by restricting U.S.

pharmaceutical companies from contracting with certain countries for the development, research or manufacturing of pharmaceutical products.

For a discussion on the BIOSECURE Act and related risks, see "Risk Factors - Risks Related to Our Business - If we cannot maintain satisfactory pricing of our Products that is also acceptable to the U.S.

government, insurance companies, managed care organizations and other payors, or arrange for favorable reimbursement policies, our product sales may be adversely affected and our future revenue may suffer."

In addition, the U.S.

Department of Commerce initiated national security investigations into the importation of pharmaceuticals and pharmaceutical ingredients pursuant to Section 232 of the Trade Expansion Act of 1962, which could result in the imposition of new tariffs on imports within the pharmaceutical industry.

Further, the U.S.

announced a 100% tariff on any branded or patented pharmaceuticals imported into the U.S., from drug manufacturers that do not have, or are not in the process of building, a manufacturing facility in the U.S., which has been delayed as negotiations with large drug manufacturers continue.

The terms and effects of such tariffs, if and as they are implemented, and other policy changes are uncertain and could have adverse implications on drug pricing, drug production levels and patient access, and may result in supply chain or other operational disruptions.

Further, if we are required to change our current manufacturing partners or suppliers now or in the future in order to avoid such tariffs, the terms of new agreements that we may enter into may not be favorable to us and related operational disruptions may heighten manufacturing and compliance risks and derail commercialization plans.

Currently, the various tariffs that have been announced and enacted are not expected to have a material impact on the Company.

However, new tariffs or changes in the facts and circumstances impacting the Company could have a material impact to the Company.

Moreover, uncertainty with respect to legislation, regulation and government policy at the federal, state and local levels, has introduced new and difficult-to-quantify macroeconomic and geopolitical risks with potentially far-reaching implications.

There are currently a number of laws and regulations in the U.S.

that have recently been adopted with the change in presidential administration but not yet implemented or have been proposed or are being considered to which we or our customers may become subject, including healthcare reform initiatives and potential spending and tax proposals, but at this time their impact on our business and results of operations remains uncertain.

that have recently been adopted but not yet implemented, have been proposed or are being considered to which we or our customers may become subject, including healthcare reform initiatives and potential spending and tax proposals, but at this time their impact on our business and results of operations remains uncertain.

Changes in legislation, regulation or policy increase the likelihood that we will fail to appropriately adapt to changes in our compliance obligations, particularly when such changes happen abruptly, such as following a change in government.

Any of the foregoing changes could increase our litigation and regulatory exposure, directly impact our results of operations and cash flows, adversely affect our ability to provide our products, or adversely impact the demand for our products.

Any of the foregoing changes could

increase our litigation and regulatory exposure, directly impact our results of operations and cash flows, adversely affect our ability to provide our products, or adversely impact the demand for our Products.

Such changes may also impact our business by creating increased volatility and uncertainty in the markets in which we operate.

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Consequently, we cannot be certain that the patent applications we are pursuing will lead to the issuance of any patent or be free from infringement or other claims from other parties.

Our competitors may also independently develop products similar to

ours or design around or otherwise circumvent patents issued to us or licensed by us.

Our competitors may also independently develop products similar to ours or design around or otherwise circumvent patents issued to us or licensed by us.

In addition, the laws of some foreign countries may not protect our proprietary rights to the same extent as U.S.

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The loss or diminution of our intellectual property rights could result in a decision by our third-party collaborators to terminate their agreements with us.

In addition, these agreements are generally complex and contain provisions that could give rise to legal disputes, including potential disputes concerning ownership of intellectual property and data under collaborations.

collaborations.

Such disputes can lead to lengthy, expensive litigation or arbitration, requiring us to divert management time and resources to such dispute.

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may be less willing to protect trade secrets.

Costly and time-consuming litigation could be necessary to seek to enforce and determine the scope of our

proprietary rights.

Costly and time-consuming litigation could be necessary to seek to enforce and determine the scope of our proprietary rights.

Any failure to enforce or protect our rights could cause us to lose the ability to exclude others from using our technology to develop or sell competing products.

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These legal actions could seek damages and seek to enjoin testing, manufacturing and marketing of the accused product or process.

In addition to potential liability for significant damages, we could be required to redesign affected products or obtain a license to continue to manufacture or market the accused product or process and any license required under any such patent may not be made available to us on acceptable terms, if at all.

In addition to potential liability for significant damages, we could be required to redesign affected products or obtain a license

to continue to manufacture or market the accused product or process and any license required under any such patent may not be made available to us on acceptable terms, if at all.

Competitors may sue us as a way of delaying the introduction of our Products and our product candidates.

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In addition, Section 203 of Delaware General Corporation Law, which is applicable to us, may discourage, delay or prevent a change in control of our Company by prohibiting stockholders owning in excess of 15% of our outstanding voting stock from merging or combining with us, unless certain approvals are obtained.

Future utilization of net operating loss carryforwards or research and development credit carryforwards may be impaired due to recent changes in ownership.

Future utilization of net operating loss carryforwards or research and development credit carryforwards may be impaired due to changes in ownership.

We believe our net operating loss and research and development credit carryforwards, and certain other tax attributes, may be subject to limitation under Section 382 of the Internal Revenue Code of 1986 ("IRC").

As a result, our deferred tax assets, and related valuation allowance, have been reduced for the estimated impact of the net operating loss and research and development credit carryforwards that we currently estimate may expire, unused.

Utilization of our remaining net operating loss and research and development credit carryforwards may still be subject to substantial annual limitations due to ownership change limitations provided by the IRC and similar state provisions for ownership changes after July 31, 2023, including those that may come in conjunction with future equity financings or market trades by our stockholders.

Utilization of our remaining net operating loss and research and development credit carryforwards may still be subject to substantial annual limitations due to ownership change limitations provided by the IRC and similar state provisions for ownership changes after August 2025, including those that may come in conjunction with future equity financings or market trades by our stockholders.

Our Board has adopted a Tax Benefit Preservation Plan, dated August 14, 2025, with Computershare Trust Company, N.A., as rights agent, to act as a deterrent to any person acquiring 4.99% or more of the outstanding shares of our common stock, or any existing 4.99% or greater holder from acquiring any additional shares of our common stock, in each case, without the approval of the Board and thus mitigate the threat that stock ownership changes present to our net operating loss asset.

Actions of activist stockholders could impact the pursuit of our business strategies, cause us to incur substantial costs, divert our management’s attention and resources, and adversely affect our business, results of operations, liquidity, financial condition, and the trading price of our common stock.

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Accordingly, there is no assurance that the actions taken by the Board and our management in seeking to maintain constructive engagement with certain stockholders will be successful in preventing the occurrence of stockholder activist campaigns.

As previously reported, in February 2023, we entered into a Cooperation Agreement, dated February 21, 2023, with two of our stockholders, Rubric Capital Management LP and certain of its affiliates and Velan Capital Investment

Management LP and certain of its affiliates (collectively, the “Investor Group”), regarding certain changes to the composition of the Board, among other items.

As previously reported, in February 2023, we entered into a Cooperation Agreement with two of our stockholders, Rubric Capital Management LP and certain of its affiliates and Velan Capital Investment Management LP and certain of its affiliates (collectively, the "Investor Group"), regarding certain changes to the composition of the Board, among other items.

In August 2025, we entered into a Cooperation Agreement with Rubric Capital Management LP, regarding certain changes to the composition of the Board and other related matters.

Proxy contests have been waged against many companies in the biopharmaceutical industry over the last few years.

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PR OPERTIES .

We have an operating lease for 52,148 square feet of laboratory and office space in San Diego, California, with a lease term that expires on December 31, 2025.

In October 2021, we entered into a sublease agreement to sublet 23,873 square feet of laboratory and office space.

We have an operating lease for 52,148 square feet of laboratory and office space in San Diego, California, which expired on December 31, 2025.

In October 2021, we entered into a sublease agreement to sublet 23,873 square feet of laboratory and office space in San Diego, California.

The space was delivered to the subtenant in March 2022.

The sublease agreement expires on December 31, 2025 and is coterminous with the operating lease for the subleased space.

We have an operating lease for 5,840 square feet of office space in Cary, North Carolina, with a lease term that expires on April 30, 2025.

We also have a short-term operating lease for 9,882 square feet of office space in Cary, North Carolina, with a lease term that expires on August 31, 2025.

As a result of the sublease agreement, our one five-year option to renew this lease on expiration applied only with respect to our remaining 28,275 square feet of laboratory and office space.

We have a short-term operating lease for 9,882 square feet of office space in Cary, North Carolina, which was entered into in December 2025 and will expire on February 28, 2026.

In August 2025, we entered into a lease agreement for 16,837 square feet of office space in Cary, North Carolina, with the lease term expected to commence no later than May 25, 2026 ("lease commencement date") and expire 111 months from the lease commencement date, with the option to extend for one additional period of 84 months upon written notice.

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

What changed 10-K

Item 1. Business