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Item 1. Business

2026-03-30 compared with 2025-03-27 · 1589 added, 1462 removed, 164 unchanged (95% of the section changed)

Our objective is to develop

and commercialize our product candidates to treat diseases where the innate immune system is dysfunctional causing or contributing to

the patient’s disease.

Innate immune dysfunction can occur for a variety of reasons including genetics, lifestyle, and other factors.

However, age plays a significant role in the development of immune dysfunction.

Innate immune dysfunction can be seen in cancer where

Natural Killer (“NK”) cells are impaired and facilitate a tumor’s evasion of the immune system and subsequent disease

Chronic inflammation is implicated in neurologic and metabolic diseases where it impairs the innate immune system.

focus continue to be treatment of cancer with INKmune and Alzheimer’s Disease (“AD”) and Treatment Resistant Depression

(“TRD”) with XPro1595.

We have added CORDStrom, a pooled, human umbilical cord mesenchymal stem cell (“HucMSC”)

product to treat recessive dystrophic epidermolysis bullosa (“RDEB”), a pediatric orphan disease caused by mutations in the

COL7A1 gene that results in a debilitating disease of skin blistering, dysphagia and failure to thrive with chronic wound problems that

often results in fatal squamous cell carcinoma.

XPro1595 (“XPro”),

targets Alzheimer’s Disease and TRD.

XPro for AD has completed Phase I trials and a Phase II trial has completed enrollment of patients

at clinical sites in the United Kingdom, EU, Australia and Canada.

Patients are currently being treated with XPro for Early AD as part

of that clinical trial.

TRD is being prepared for Phase II trials.

We expect to start a pivotal global registration trial in patients

with AD after the results of the Phase II trial have been analyzed.

The INKmune program is in an open label Phase II trial in metastatic

castrate resistant prostate cancer (“mCRPC”).

CORDStrom for the treatment of children with RDEB has completed a pivotal blinded

randomized cross-over trial.

The data will be submitted for a marketing authorization (“BLA”) in the US in the next 12-18

The overall principal components

of our business strategy to achieve these objectives are to:

Pursue a registration strategy for CORDStrom in RDEB that maximizes the value of the therapy and expand the CORDStrom platform;

Pursue development strategies and regulatory approval pathways that allow the treatment of neurodegenerative diseases in patients with our lead product candidate, XPro;

Pursue development strategies and regulatory approval pathways that allow the treatment cancer with our lead oncology platform, INKmune;

Adopt a product development strategy that solidifies our existing intellectual property (“IP”) to prevent competition and expand our IP suite into related immunotherapeutic areas;

Provide clear value propositions to third-party payers, such as managed care companies or government programs like Medicare, to merit reimbursement for our product candidates;

Collaborate with other pharmaceutical companies with respect to, among other things, our XPro, CORDStrom and INKmune product platforms.

Pursue development and

regulatory approval pathways.

We believe INKmune and XPro may be approvable under pathways that are potentially shorter than those

typically available for drug products based on novel active ingredients, including as an orphan drug under the Orphan Drug Act and approval

under the Food and Drug Administration (the “FDA”) Accelerated Approval Program (see the section entitled “Government

Regulation”).

We have not yet had a discussion with the United Kingdom Medicines and Healthcare Products Regulatory Agency (“MHRA”)

and/or FDA regarding such designation, but plan to do so in the future.

We believe the INKmune program to treat castration resistant prostate

cancer may qualify for orphan status.

We believe that it would take a minimum of six months to receive Orphan Drug status once we

apply for application and a minimum of 12 months to receive a designation once we submit an application.

We might never have these discussions,

submit applications under the Orphan Drug Act or the FDA Accelerated Approval Program or have these applications approved if we do.

have received Orphan Drug Designation (“ODD”) and Rare Pediatric Disease Designation (“RPDD”) for CORDStrom to

treat patients with epidermolysis bullosa (“EB”).

We plan to file for Biologics License Application (“BLA”), an

approval document for full approval of CORDStrom with the FDA in late 2025 or early 2026.

We also plan to file for Marketing Authorization

Application in the EU and United Kingdom in 2026 with CORDStrom for RDEB.

Likewise, we plan to apply for an accelerated approval pathway

for the use of XPro to treat patients with AD in 2025.

Adopt a two-pronged patent

We are pursuing a two-pronged product development strategy that will seek to solidify our existing IP to prevent competition

and expand our IP suite into related therapeutic areas.

We are confident that our core in-licensed IP (see the section entitled “Intellectual

Property”) and IP generated by the Company will allow us both freedom-to-operate and provide robust protection from outside competition

across all of our drug platforms.

We will continue to invest in expanding our patent suite.

We will also seek to further strengthen our

IP position by looking to in-license IP related to our focus on the innate immune system.

All of our products are biologic products eligible

for Biologic Exclusivity after first approval.

In the US, Biologic Exclusivity currently allows for 12 years of marketing exclusivity.

Provide clear value propositions

to third-party payors to merit reimbursement for our product candidates .

We are designing our clinical development programs to demonstrate

compelling, competitive advantages to patients and prescribers, and to demonstrate value propositions to third-party payors.

the use of INKmune patients with a high risk of tumor progression and death from tumor should safely prolong survival, improve the patient’s

quality of life and decrease the total cost of care for patients with these lethal malignancies.

For example, cancer patients relapse

Each relapse requires a complex treatment regimen that has decreasing benefits.

Treatment with INKmune as an out-patient may

provide a more durable remission and limit the need for treatment-associated hospitalizations.

At the patient level, we believe INKmune,

if approved, should improve survival and quality of life.

At the payor level, we believe INKmune, if approved, should provide more predictable

costs and outcomes.

Additional therapies are need for treatment of Alzheimer’s disease are needed for medical, societal and economic

The cost of Alzheimer’s disease to the government is large and growing.

Recently approved therapies that target amyloid

have a modest impact on disease progression and are difficult to use due to side-effects in some patients.

The cost of AD to families

and care givers is real and burdensome.

We believe treatment of dementia patients with XPro, including Alzheimer’s disease, may

provide a strategy to alter the costly dynamic of this disease in society today.

RDEB is a lethal and debilitating disease in children

that requires life-long care-giver and medical support.

Available therapies for the diseases focus on wound closure.

Itch, a clinical

symptom that occurs in all children with RDEB, is considered by patients to be the most important symptom with no therapy.

CORDStrom decreases

itch considerably and safely, improves quality of life and may improve wound healing.

Collaborate to maximize

the value of our technology .

We believe there are two reasons for us to enter collaborations with other companies.

The first is the

further development of INKmune, XPro and CORDStrom by either providing additional innovations to the product, including combination therapy

strategies, and/or providing resources to improve the speed and breadth of the development process.

The second is to optimize the commercialization

of our products either globally or regionally.

The ideal partner will benefit us in both ways.

We have leveraged our unique

capabilities to optimize clinical application of cell medicines by developing CORDStrom for the treatment of RDEB.

We believe that we

have developed a way to manufacture human mesenchymal stromal cells for the medical research and biotech community that offers large

volumes of high-quality, human umbilical cord mesenchymal stromal cells with minimal batch-to-batch variability.

We have established

a reliable supply of human umbilical cords based on our agreement with the Anthony Nolan Cord Blood Bank in the United Kingdom and plan

to seek additional supplies from US sources in the future.

We have developed a validated manufacturing process that reliably produces

clinical grade (“cGMP”) quality mesenchymal stromal cells that we call CORDStrom.

The manufacturing process is currently

performed by INmune Bio staff at a contract manufacturing site under the direction of Mark Lowdell, the Company’s CSO.

CORDStrom for a multicenter academic clinical trial in in children with RDEB.

This pivotal trial was sponsored by the Great Ormond Street

Children’s Hospital (“GOSH”) in London treating children with intermediate and severe- RDEB.

The results of the pivotal

trial show that CORDStrom therapy decreases itch and pain and improves clinical scores in patients with RDEB.

We have entered an exclusive

global license with GOSH for the clinical data.

The Company plans to combine the clinical data and manufacturing process into a regulatory

dossier that seeks marketing authorization in the US via a BLA and in the United Kingdom and EU by MAA in 2026 or earlier if possible.

The program has received an ODD and RPD and may be eligible for a Priority Review Voucher if product approval occurs by September 26,

The Company plans to seek scientific advice from the FDA, MHRA and EMA on the program during 2025 in preparation for regulatory

The regulatory path for therapeutic applications of the mesenchymal stem/stromal cell products is well established and similar

to the regulatory approval process for other cellular medicines.

We will only be responsible for regulatory compliance related to manufacturing

of the mesenchymal stromal cells when the product is being developed by a third party.

When developing a therapeutic product for the

Company’s commercial portfolio, the Company will be responsible for all aspects of the regulatory process.

CORDStrom is a patent-pending

cell medicine comprising aseptic, allogeneic, pooled HucMSCs in suspension for injection or infusion.

The CORDStrom platform leverages,

among other things, proprietary screening, pooling and expansion techniques to create off-the-shelf, allogeneic, pooled HucMSCs as medicines

to treat complex inflammatory diseases.

CORDStrom products are designed to provide high-quality, off-the-shelf, batch-to-batch consistent,

scalable, cGMP manufactured, potent cellular medicines that can be produced at low cost and with repeatable specification independent

of donor characteristics.

Initially developed at the INKmune manufacturing facilities utilizing United Kingdom academic grant funding,

CORDStrom is a mesenchymal stromal cell (“MSC”) product platform that shows promise as a first systemic therapy for potentially

treating RDEB and many other debilitating conditions.

While the first generation CORDStrom product is agnostic to disease indication,

the platform enables creation of indication-specific products, which can be tuned for optimization of anti-inflammatory, immunomodulatory,

homing, and other characteristics.

The CORDStrom product platform

shares many similarities, including reagents, and procedures, with the Company’s INKmune oncology product, enabling the Company

to leverage economies of scale, experienced staff, and other resources to strategically manufacture both products in a rotational campaign

with resource and environmental efficiencies.

Overview of Immunotherapy for Cancer

The immune system has two

parts, innate and adaptive.

The innate immune system is the body’s first line of defense against an infection, providing immediate,

non-specific responses to eliminate harmful cells in the body.

Components of the innate immune system include cytokines, chemokines, macrophages,

neutrophils and NK cells, among others.

The adaptive immune system

is often initially triggered by the innate immune system, mounts a delayed response against diseased cells and plays a role protecting

against re-infection.

An adaptive immune response is highly specific to a pathogen or antigen and is developed or learned from prior exposure.

Key components of the adaptive immune system include antibodies which bind to antigens and mark them for destruction by other immune cells,

B-cells which produce these antibodies upon exposure to antigens, and T-cells which attack and eliminate the diseased cells.

The biopharmaceutical industry

has made significant advances in harnessing specific components of innate and adaptive immune systems for therapeutic use.

Some of these

approaches are summarized below.

Necrosis Factor alpha (“TNF”) is the focus of XPro and INB03.

TNF biology has four elements that include two cytokines, soluble

TNF and trans-membrane TNF (“sTNF” and “tmTNF,” respectively), and two receptors, TNF Receptor 1 and 2 (“TNFR1”

and “TNFR2”).

The biology of TNF ligation of TNFR varies dramatically based on what elements of the TNF system that are used.

sTNF binding to TNFR1 is responsible for inflammation and cell death while sTNF binding to TNFR2 promotes proliferation of regulatory

T cells (“Treg”).

In patients with advanced cancers, increased sTNF is not favorable to long-term survival because it promotes

epithelial-mesenchymal transformation and metastasis while making the tumor microenvironment more immunosuppressive promoting resistance

In the CNS, sTNF promotes neuronal cell death, demyelination and synaptic pruning while tmTNF promotes nerve cell survival,

improves synaptic function and stimulates remyelination.

In brief, sTNF is the “bad” TNF and tmTNF is the “good”

In patients with cancer, infection or neurologic disease, blockade of tmTNF function has negative consequences such as immunosuppression,

increased infection, synaptic dysfunction and demyelination.

One of the early applications

of immunotherapy is the use of cytokines, including interferons and interleukin-2 (“IL-2”).

Interferons are molecules that

inhibit the growth and replication of diseased cells and stimulate innate immune cells to attack them.

They have been used as standard

of care for hepatitis B and C and multiple sclerosis, and to a lesser extent, as treatment for certain cancers, including chronic myeloid

leukemia, cutaneous T-cell lymphoma, myeloma and non-Hodgkin’s lymphoma.

However, the use of interferons has generally decreased

over the years due to serious adverse events ( e.g.

, flu-like symptoms and dramatic weight loss) and introduction of new therapies

with higher efficacy, better safety profiles and more convenient administration although Alpha-interferon remains the treatment of choice

for some hematological conditions such as polycythemia.

IL-2 activates T-cells and NK cells to attack diseased cells.

IL-2 has been used

to treat select cancers, but due to its relatively poor safety profile, physicians often only resort to this therapy for the most advanced

Antibody therapy.

Antibodies exist in three formats:

monoclonals (“mAbs”), oligo/polyclonal and antibody-drug conjugates.

mAbs represent an

effective therapeutic modality and are important to the treatment paradigm of various diseases.

Drug manufacturers have leveraged mAbs’

ability to induce an antibody-dependent cell-mediated cytotoxicity, or ADCC effect to develop better treatments that prolong survival

and quality of life of patients.

In addition, mAbs designed to inhibit specific checkpoints in the immune system have overcome in vivo

immune suppression and the resulting immune responses have led to profound therapeutic benefit in some patients.

However, the degree of

efficacy of these therapies is heavily reliant on the immune system of patients, many of whom are severely immuno-compromised.

mAbs are manufactured through a complex process that requires purification of cell products created from a cell line.

Polyspecific antibodies,

for example bi-specific antibodies, are able to target more than one antigen.

These are often used to bring and effector T cell in contact

with a target cell.

Antibody drug conjugates are mAbs attached to a toxin, chemotherapy or radio therapy that delivers the cancer killing

payload directly to the cancer.

Dendritic Cell Therapies.

This approach is designed to indirectly stimulate a patient’s T-cells by leveraging the role of dendritic cells in presenting antigens

Cancer vaccines are the most common application of dendritic cells.

FDA-approved dendritic cell therapies such as PROVENGE,

which entails collecting monocytes from the patient, maturing them into dendritic cells, “loading” ex vivo with the

patient’s cancer antigens, and then re-infusing in the patient.

Currently, this process is cumbersome and expensive, and again,

relies on an intact and effective immune system of the patient.

There are additional ongoing preclinical studies and clinical trials being

conducted by our competitors aimed at addressing certain of the limitations associated with this approach.

To date, current clinical results

of dendritic cell therapies have been mixed.

CAR-T and TCR Therapies.

T-cells recognize diseased cells by receptors engaging with antigens that are present on or inside the diseased cells.

CAR-T therapy entails

genetically engineering T-cells to express synthetic CARs that direct T-cells to antigens on the surface of cancer cells.

modifies T-cells to express high-affinity tumor specific TCRs that recognize intra-cellular antigens that must be presented on the surface

of target cells.

In early clinical trials, CAR-T and TCR therapies have demonstrated impressive anti-tumor activity in a narrow spectrum

of hematologic cancers and garnered significant attention by research institutions and biopharmaceutical companies.

We believe a key limitation

of adaptive autologous immunotherapy is the need to retrieve non-compromised immune cells from a cancer patient which requires a complex

and costly manufacturing process to develop the therapy.

The complexity of this personalized process is reflected in the price of the

two approved therapies.

CAR-T therapies - tisagenlecleucel and axicabtagene ciloleucel for advanced leukemia and lymphoma respectively.

The cost of a single therapy is many hundreds of thousands of dollars.

As a consequence of this need to harvest active T-cells, current

Phase I clinical trials for autologous CAR-T cell therapy in large part enroll patients from highly selected, often relatively early-stage

disease in a narrow spectrum of cancers, including bulky hematological cancers.

In addition, Phase I clinical trials of CAR-T cell immunotherapy

have reported severe adverse toxicities of cytokine release syndrome and neurotoxicity, requiring hospitalization, pre-conditioning and,

in some instances, intensive care unit admission following side effects associated with cytokine release syndrome.

As a result, though

our competitors continue to develop their CAR-T and TCR product candidates with the goal of addressing certain of the limitations associated

with these approaches, we believe these serious challenges may limit their potential and use in a variety of indications, including solid

Checkpoint Inhibitors.

Immune cells express proteins that are immune checkpoints that control and down-regulate the immune response.

These are best defined

in T lymphocytes and include PD-1, CTLA-4, TIM-3 and LAG3.

Tumor cells express the ligands to these receptors.

When T cells bind the ligand

to these proteins on the tumor cells, the T cell is turned off and does not attempt to attack the tumor cell.

Thus, checkpoint inhibitors

(“CPI”) are part of the complex strategy used by the tumor to evade the patient’s immune system and are responsible

for resistance to immunotherapy.

Biopharmaceutical companies have successfully developed CPI that block the receptor/ligand interaction

to promote the adaptive immune response to the tumor.

Six CPI are currently approved, pembrolizumab, nivolumab, atezolizumab, avelumab,

durvalumab, and ipilimumab for a wide variety of solid tumors including melanoma, lung, bladder, gastric cancers and others.

are in development and more tumor types will be added to the list of sensitive tumors over the next years.

CPI have become the backbone

of cancer therapy and are expected to be the best -selling class of drugs in the future.

cells typically represent approximately 2% to 13% of circulating lymphocytes and are a critical component of the immune system responsible

for innate immunity.

Unlike adaptive immune cells, they are ever present and ready to attack, having the inherent ability to detect and

eliminate diseased cells without the need for antigen presentation, which is why they are called “natural killers.”

NK cells bind to stress ligands

expressed by the diseased cells and directly eliminate them.

This binding induces NK cells to release cytokines, including interferons

and GM-CSF, which are integral in recruiting additional innate and adaptive immune responses by the host.

NK cells also represent a critical

effector cell for ADCC, whereby target cells bound with human antibodies, whether made by the patient’s body or administered, are

selectively destroyed by the NK cells.

Our Innate Immune Dominant-Negative

TNF (“DN-TNF”) product candidate

XPro1595, XPro or Pegipanermin

was originally licensed from Xencor.

XPro neutralizes sTNF in the

brain without affecting tmTNF or TNF receptors.

Soluble TNF is a cause of the destructive neuroinflammation in the brain are microglial

and astroglial cells (“glial cells”).

Glial cell are two of four cells in the neural unit that also includes oligodendrocytes

and nerve cells.

Activated microglial cells are considered the resident macrophages of the brain.

The primary role of microglial cells

is to protect the neural unit from infection.

When innate immune dysfunction causes chronic inflammation, activated microglial cells produce

soluble TNF that activates astrocytes.

Activated glial cells cause nerve cell and oligodrocyte dysfunction that results in synaptic pruning,

nerve cell death and demyelination of neurons.

These pathologies contribute, in part, to neurodegenerative diseases such as AD, Parkinson’s

disease, ALS, MS, Huntington’s disease, glaucoma and TBI (traumatic brain injury) may contribute to neuropsychiatric diseases such

as depression, bi-polar disease, sleep disorders, autism, schizophrenia and PTSD.

In the setting of AD, microglial activation causes synaptic

dysfunction and nerve cell death that contributes to cognitive decline and the behavioral manifestations of AD including depression, aggressiveness,

sleep disorders, hallucinations and anhedonia.

Elimination of microglial activation should reverse these symptoms.

Because soluble TNF

is the apex cytokine in the inflammatory cytokine cascade, neutralization of soluble TNF with XPro should prevent glial activation and

normalizes function of the neural unit.

The Company has completed

a Phase I trial using XPro to reverse neuroinflammation in patients with Alzheimer’s disease.

The trial was performed in Australia

and was partially funded by a $1M USD Part-the-Cloud Award from the Alzheimer’s Association.

The clinical trial was the first in

the Company’s development program for the treatment of dementia.

The open label, dose escalation trial in patients with Alzheimer’s

disease with biomarkers of peripheral inflammation (one of CRP>1.5mg/L, HgbA1c>6.0, ESR>10sec or have ApoE4) treats the patients

with XPro as a once-a-week subcutaneous injection for 3 months.

AD patients with one biomarker of inflammation are classified as having

AD with neuroinflammation (“Adi”).

The company estimates this group of patients includes at least 40% of patients with AD.

Patients have multiple biomarkers of neuroinflammation tested before and during therapy including soluble biomarkers in blood and cerebral

spinal fluid, behavioral biomarkers (neuropsychiatric symptoms of AD), EEG and neuroimaging biomarkers using MRI.

The primary goal of

this short, open label study was to demonstrate that treatment with XPro decreases neuroinflammation safely and to define the dose of

XPro to use in the Phase II trial.

The Company has enrolled a

global blinded randomized Phase II trial in ADi patients with Early AD in Australia, Canada, the United Kingdom, Spain, France, Germany,

Poland, the Czech Republic, and Slovakia.

Early AD is patients that have Mild Cognitive Impairment or mild AD.

There is an Expanded Access

Scheme in patients who completed the Phase I trial in Australia that can request XPro of which two patients from the Phase I remain on

the drug as of this writing.

The goal of the Phase II trial will be to demonstrate the prolonged control of neuroinflammation in patients

with dementia will help control cognitive decline.

The Phase I trial enrolled 18 patients at three

dose cohorts of 0.3, 0.6 and 1.0mg/kg given once a week as subcutaneous injection for three months.

Patients in the 1.0mg/kg group were

offered extended use of the drug for up to 12 months.

Three patients remained on XPro for 12 months.

Preliminary data was presented in

a webinar on 13 July 2020.

Additional data was presented on January 21, 2021CSF cytokine/chemokines were measured in 9 patients before

and after 12 weeks of weekly therapy with XPro using a panel from OLINK Target 48 Cytokine (Figure below).

In the 6 patients in the 1mg/kg

per week dose, only one cytokine and chemokine, interferon gamma (“INFg”) did not change in the CSF of patients, the remainder

all decreased on average of 15%.

The data analyzed provides evidence that XPro decreases neuroinflammation in patients with Alzheimer’s

We believe these data support

the use of XPro to treat other diseases where neuroinflammation is a part of the pathophysiology of the disease.

The company studied the

consequences of decreasing neuroinflammation in the 6 patients from target dose group (XPro 1mg/kg for 12 weeks) be looking at the CSF

proteome using technology for Proteome Sciences using their TMT Calibrator™ platform.

A large data set of proteins were identified.

Early analysis of the data focusing on 26 AD related proteins demonstrated changes in inflammation, neuronal and synaptic proteins caused

by decreasing neuroinflammation after treatment with XPro (Figure below).

The proteome also demonstrated a clear dose response with a

greater number of proteins being affected by the target dose compared to low dose XPro therapy (0.3 vs 1.0 mg/kg/week for 12 weeks) (Figure

The CSF proteome data is only partially analyzed.

Additional data may result from these ongoing analytics.

The results of the Phase I

study demonstrated that XPro safely decreases neuroinflammation in patients with AD and elevated neuroinflammation with biomarkers of

peripheral inflammation or are ApoE4 positive when given for at least 3 months at the 1mg/kg once a week dose.

Decreasing neuroinflammation

with XPro appears to decrease neurodegeneration and improve synaptic function and promote remyelination.

The effect of XPro on the biology

and immunology of the brain in patients with AD suggest XPro therapy in patients with peripheral biomarkers of inflammation or ApoE4 allele(s)

may impact cognitive decline.

Although there were anecdotes of improved cognitive function in patients receiving the target dose of XPro,

this cannot be verified because the trial was not a blinded, randomized trial.

The impact on cognition of controlling neuroinflammation

with XPro will be studied in the Phase II program which is a blinded randomized, placebo controlled clinical trial.

AD02 is the ongoing blinded

randomized global Phase II trial in patients with early AD enrolled 208 patients in a 2:1 ratio (XPro:placebo) at 1mg/kg once a week.

The trial enrolled the last patient in November 2024.

Patients are treated for 6 months of therapy.

The primary end-point is Early/Mild

Alzheimer’s Cognitive Composite (“EMACC”), a sensitive cognitive end-point validated for use in patients with early

Secondary cognitive (CDR-SB and NPI) and functional (GAS, ADCS-ADL) end-points will be measured.

Exploratory structural and function

biomarkers of brain function and structural integrity using EEG and MRI DTI will be used in some or all patients.

Top line cognitive data,

EMACC, will be presented around June of 2025.

All additional cognitive, functional, neuroimaging and biomarker data will be presented

approximately 8 weeks later.

Effective therapy for TRD

is a large unmet need.

Twenty percent of patients with a Major Depressive Disorder have TRD.

Once third of TRD patients have peripheral

biomarkers to inflammation (elevated CRP).

This is a large patient population.

The role of TNF and anti-TNF therapeutics was explored

in a small open label clinical trial by Prof.

Andrew Miller, MD of Emory University whereby it was demonstrated that patients which have

elevated TNF levels responded to treatment with infliximab (Miller, 2011).

The blinded, randomized Phase

II trial will use biomarkers of peripheral inflammation to select patients with TRD for enrollment.

Patients will be treated for 6 weeks.

Primary endpoints include both clinical and neuroimaging measures.

XPro, is delivered as a subcutaneous

injection, similar to an insulin treatment or anti-obesity GLP-1 drugs, is given once a week.

More frequent treatment cannot be ruled

out for future indications.

Because this is a simple subcutaneous injection similar to an insulin injection (the therapy patients give

themselves for treatment of Type 1 diabetes mellitus), we expect patients to administer the therapy by themselves or caregivers and not

require expensive or logistically challenging clinic visits to receive the therapy.

Release of XPro drug supply

GMP DN-TNF product (XPro)

used in the oncology Phase I, AD Phase I and COVID-19 Phase II trial were manufactured by Lonza at a site in New Hampshire.

of Lonza DN-TNF product is limited but allowed completion of the Phase I study in Alzheimer’s disease and support of patients in

the extension study for 12 months.

New batches of XPro have been produced for ongoing clinical trials.

The Company engaged KBI Biopharma

to manufacture 6 lots of XPro at the Boulder, Colorado facility using the original master cell bank and updated manufacturing process.

One lot has been converted into drug product using the US fill/finish facility of Vetter Pharma.

Half of the first lot is frozen as drug

substance at -80C with a plan to convert to drug product as clinical supplies are needed to support the AD and TRD Phase II trials.

unfrozen drug product is being used in the ongoing AD02 AD trial.

The remainder of the original fermentation runs is frozen as a cell

paste with a plan to process to drug substance.

The company expects to convert the drug substance to drug product during 2025.

processing to drug product and fill/finish to drug product of the cell paste will occur in 2025 as needed to support the clinical trials.

We plan to use a two-step approach to improve the yield of the drug substance from the fermentation process.

The Company is working on

the yield of the drug product using the existing E.coli-based system.

A second program is focused on down-stream process improvements

in the drug manufacturing program.

Once the new strain and process is validated and functional, we will perform a manufacturing campaign

drug for future clinical trials.

In the future, the Company may consider a strain change to improve yield of the fermentation step further.

The decision for strain improvements and strain change will be made in the future as clinical development programs proceed.

Interaction with Regulatory Authorities Regarding

XPro Development

We have completed a Phase

I trial with DN-TNF in oncology.

At this time we do not plan additional clinical trials with DN-TNF in oncology.

A Phase II trial with

XPro in patients with Alzheimer’s disease is underway.

Dosing of patients in the Phase II trial will complete in May 2025.

I trial with XPro in patients with Alzheimer’s disease was performed in Australia under the regulatory authority of the TGA using

the Clinical Trials Exemption (“CTX”) scheme.

Our first interaction with the regulatory body occurred in March 2018.

received approval to initiate the Phase I trial in patients with advanced solid tumors on May 21, 2018.

The second interaction with

the regulatory body occurred in March 2019.

The Company received approval to initiate the Phase I trial with XPro in patients with

Alzheimer’s disease in May 2019 and received authorization to start the Phase II trial in patients with mild AD on January 5, 2022.

Our first interaction with the FDA occurred in July 2020 as part of the Phase II Quellor program to treat respiratory failure in patients

hospitalized with COVID-19 infection.

The newly manufactured XPro is being used to support the Phase II AD trial, the TRD Phase II trial

and the Expanded Access Scheme.

XPro Regulatory Strategy

Drugs from the DN-TNF platform

will be developed using adequately powered, well designed studies with the goal to demonstrate a meaningful clinical benefit to patients.

Beyond Phase I, these will most often be blinded, randomized clinical trials using validated end-points that have been authorized by a

regulatory authority – the FDA, TGA, MHRA, EMA, Health Canada, etc.

Currently, all planned studies will be performed in North America,

Australia, EU and/or the United Kingdom.

Because there are no therapies similar to XPro approved in any market, we plan to take advantage

of the regulatory opportunities afforded to therapies that treat markets with a high unmet need.

In the U.S., this includes Orphan Drug

Designation and expedited programs for approval including Accelerated Approval, Breakthrough Therapy Designation, Fast Track Designation,

and priority review (see the section entitled “Government Regulation”).

We cannot predict which, if any, of these programs

we will benefit from without further discussions with the FDA, EMA and other competent regulatory authorities.

Immunotherapy for Treatment of Alzheimer’s Disease

XPro is being developed for

the treatment of Alzheimer’s disease.

Microglial activation and neuroinflammation are important causes of the synaptic dysfunction

and nerve cell death that causes cognitive decline in patient with dementia and Alzheimer’s disease.

The relationship between β

amyloid plaques and tau neurofibrillary tangles, the traditional targets in AD drug development and neuroinflammation is complex.

targeting plaques and tangles will have limited benefit.

Targeting neuroinflammation, the common pathway leading to synaptic dysfunction

and nerve cell death, may be an effective treatment strategy.

Substantial pre-clinical data supports the use of XPro in murine models

Substantial indirect data supports use of XPro in humans including a decreased risk of AD in patients treated with non-selective

TNF inhibitors for rheumatoid arthritis and treatment using direct injection into paraspinous venous plexus.

Because of different mechanism

of action of XPro compared to the non-selective TNF inhibitors, we expect a lower risk of immunosuppression and demyelinating complications

such as multiple sclerosis (“MS”).

The Company reported preliminary data on July 13, 2020 and January 21, 2021 supporting

the use of XPro to decrease neuroinflammation in patients with Alzheimer’s disease and biomarkers of peripheral inflammation (see

We completed enrollment of

patients into an open label, biomarker directed, Phase I clinical trial in Australia that approaches AD as an immunologic disease.

with dementia with the diagnosis of AD with biomarkers of chronic inflammation that includes at least one of a hs-CRP>1.5 mg/L, a ESR>10

mm/h, a HbgA1C>6.0% or are ApoE4 positive were treated with XPro for 12 weeks.

Three dosing cohorts were preformed – 0.3, 0.6

and 1.0 mg per week as a subcutaneous injection.

Patients had multiple inflammatory biomarkers test before therapy, at 6 weeks and at

Biomarkers were reported in blood and cerebral spinal fluid.

Experient biomarkers including MRI measures of white matter tract

neuroinflammation, axonal quality and axon myelin, and MRI measures of gray matter quality were included.

Cognitive end-points were not

the focus of the Phase 1 clinical trial because of the wide range of disease severity enrolled and lack of a placebo group.

Patients enrolled

in the Phase I trial had MMSE ranging from 24 to 12.

This wide range of disease severity at the time of enrollment and the lack of a blinded

concurrent control group did not allow for determination of cognitive benefit beyond several anecdotal reports.

The first patient was

enrolled in the low dose 0.3mg/kg/week cohort in the last week of November 2019.

The Safety Review Committee met by teleconference on

January 7, 2020, to review the course of the patients in the first cohort and voted to open the second cohort, 1.0mg/kg/week, to enrollment.

The first patients were enrolled in the cohort the second week of February 2020.

Based on preliminary data released on July 13, 2020,

and January 21, 2021, we closed after completion of a 0.6mg/kg treatment group.

We canceled plans to treat patients with 3.0mg/kg.

data from the Phase I trial informed the design of the Phase II trials described above.

Mindful, the blinded randomized placebo control

trial in patients with Early AD began enrollment in 2022.

The final patient was enrolled in the trial in November 2024.

Top line cognition

data will be available June 2025.

Patient enrollment criteria included one inflammatory biomarker plus and MMSE between 27 and 22.

the 6 month trial, patients received XPro or placebo once-a-week by subcutaneous injection.

Two-thirds of the patients were randomized

Overall, 56% and 44% of the 208 patients had mild AD and MCI, respectively.

XPro Registration Studies and/or Partnering

We plan to aggressively pursue

an efficient registration strategy using XPro to improve the lives of patients with ADi.

We define ADi as Alzheimer’s disease with

biomarkers of inflammation.

We believe ADi is not the only indication for XPro in neurodegenerative and neuropsychiatric diseases.

plan to pursue other indications in neurodegenerative diseases as resources become available.

We have received NIMH funding to support

a Phase II TRD program that will start patient enrollment during 2025.

We have an active partnering position as it relates to XPro development

in neurodegenerative and neuropsychiatric diseases, although limited partnering discussions are underway at this time.

There are two partnering

opportunities with this novel immunotherapy for the treatment of neurologic and psychiatric diseases.

The first is a traditional partnership

focused on the developing the drug for all neurodegenerative and neuropsychiatric applications.

The second is a more focused partnership

developing XPro as part of a combination therapy for a company’s existing therapy.

After completion of proof-of-concept Phase II

studies, we will decide what the most efficient registration strategy is available to the company with XPro.

Our NK cell Directed Product Candidate

INKmune is our product candidate that converts the patient’s resting

NK cells into cancer memory like NK cells, an essential step to allow them to participate in the immune control of the patient’s

We have shown this works ex vivo in human tissue cell cultures, and we believe that this will work in vivo which is the purpose

of our planned clinical trials.

Cancers grow and relapse because

they evade the immune system.

In many cancers, NK cells are the most important cell for the elimination of residual disease that causes

cancer relapse.

NK cells target cells based on a series of complex antigens on the cancer cell surface that signal the NK cells to activate

and kill the cancer cell.

NK cells develop a memory like NK cell phenotype to enhance killing of cancer cells.

This phenotype requires

multiple simultaneous signals to be delivered to the NK cells.

A cocktail of three cytokines, IL12, IL15 and IL18 can be used to convert

a resting NK cell to cytokine induced memory like NK cells (“CIML”) [Fehneger 2016] or by INKmune priming with INB16 (TpNK

– tumor primed NK cells).

Although the intracellular biology of these two strategies has yet to be worked out, they do not appear

to be identical.

In summary, INKmune converts resting NK cells into tumor killing memory like NK cells that function well in the hostile

environment of the TME.

(Figure 1 below).

The ability of NK cells to

kill tumor cells depends on the strength and duration of the cell-cell interaction.

This is called avidity.

The higher the avidity the

greater the tumor cell killing.

Cytokine stimulation may increase avidity of NK binding to some cancer cells whereas, in all experiments

to date, INKmune priming enhances NK binding to all cancer cells tested.

The relative increase in avidity to specific cancer cells is

cytokine specific;

as shown below, IL15 increases NK avidity for the ovarian cancer line SKOV-3 whereas IL2 has a limited effect.

primed NK cells lyse SKOV-3 cells whereas IL2 primed NK do not.

INKmune primed NK (TpNK) showed the highest avidity for the tumor cells

and the highest level of cytotoxicity.

It is likely that the use of multiple cytokines will achieve the same level of avidity and cytotoxicity

as INKmune but studies with multiple cytokines have not yet been performed (Figure below).

We have demonstrated TpNK killing of many tumor types in laboratory studies.

Tumor priming is effective regardless of the source of the NK cells (normal volunteers or patients with cancer) and in many types of tumors

– both cell lines and primary tumors from patients.

The principle of TpNK killing has also been demonstrated in two Phase I trials

in patient with acute myelogenous leukemia (“AML”).

These trials were not supported by us and used a first-generation personalized

cell therapy product and treatment strategy that is different from the INKmune product and treatment strategy.

In these trials, haplo-identical

NK cells obtained from a first degree relative by leukapheresis were primed ex-vivo using a lysate of the parent cell line from which

we derived INB16 - INKmune.

Once the TpNK therapy has been produced and passed quality testing, the patient received conditioning therapy

with chemotherapy (cyclophosphamide and fludarabine), the primed haplo-identical NK cells were given to patients by intravenous infusion.

Two Phase I clinical trials have been performed using that first-generation adoptive cell therapy treatment strategy.

An investigator-initiated

trial performed at the Royal Free Hospital in London 2009 was funded by a United Kingdom charity.

Fifteen patients with relapsed, high-risk

AML were enrolled in the trial.

Because of drop-out due to disease progression, delays in product production and complications of conditioning

therapy, only 7 of the fifteen patients were treated with the TpNK cell product.

Four of seven patients showed clear benefit from the

treatment with the TpNK product with prolonged relapse free remission and, in one patient, conversion of a partial remission to full remission.

None of the remissions were durable;

all patients ultimately died from disease progression.

The safety of the product was found to be

a combination of toxicity from the chemotherapy/radiotherapy conditioning regimen and the TpNK therapy.

In general, the complications

were well tolerated although did require medical intervention including prolonged periods of aplasia in two heavily pretreated patients

that resolved with supportive care.

The results of this study have been published in a medical journal (PLoS One.

2015 Jun 10;10(6):e0123416.

10.1371/journal.pone.0123416.

eCollection 2015).

In 2013, a second open label, multi-center trial was performed in the US using the

same product and procedures but targeting a slightly different patient population.

In the second trial, 12 patients in first remission

with AML were treated with the haplo-identical TpNK product produced using the first generation ex-vivo priming process.

After conditioning

with chemotherapy alone, the patients received TpNK in three dosing cohorts – 3x10^5, 1x10^6 or 3x10^6 TpNK per kilogram.

were followed for safety and relapse free survival.

This trial confirmed the safety of the TpNK treatment in patients with AML and reinforced

many of the efficacy findings seen in the first trial with none of the previously experienced side effects.

Patients benefited from haplo-identical

TpNK therapy with prolonged relapse free survival including two patients that remain in remission more than 42 months after treatment.

This trial has been published.

(Biol Blood Marrow Transplant.

S1083-8791(18)30132-0.

10.1016/j.bbmt.2018.03.019.)

The results of the laboratory and Phase I studies provide evidence that our strategy for treating residual disease is sensible but unproven.

Because INKmune primes NK cells to target naturally occurring antigens,

we believe INKmune can be used to treat a wide variety of cancers including hematologic malignancy (AML, MM, CML, high risk MDS) and solid

tumors (renal, prostate, breast, ovarian, pancreas and lung).

We expect the list of INKmune sensitive tumors to continue to expand.

The primary role for INKmune

will be an immunotherapy targeting residual disease in patients after debulking cancer therapies such as cytotoxic chemotherapy and surgery.

At this time, we plan to give INKmune as monotherapy.

We do not rule out the possibility of using INKmune as part of combination therapy

in the future.

We do not expect to need to modify INKmune to treat these additional types of cancer, because we believe INKmune is a universal

cancer therapy where “one size fits all”.

We believe for INKmune to receive regulatory approval for each cancer indication,

clinical trials will need to be performed which demonstrate its safety and effectiveness as a treatment for each such cancer.

the difficulty and cost of achieving these labels extensions will decline with each successive approval, if and when achieved.

if INKmune is proven to be effective therapy in patients with castration resistant prostate cancer, we will need to perform separate pivotal

trials for approval in lung, prostate or renal cancer.

Three step process to preparation for INKmune

human clinical trials:

INKmune GMP scale-up for Phase I/II clinical

The working cell banks and

individual INKmune product to be used in the patients for the clinical trial have been produced at the Centre for Cell, Gene & Tissue

Therapeutics at Royal Free Hospital / University College London to full cGMP (MHRA MIA(IMP)11149).

All manufacturing has been under the

direction of Professor Mark Lowdell.

The Company can produce enough INKmune to complete its Phase I clinical trial in men with metastatic

castrate resistant prostate cancer (“mCRPC”).

We have validated storage of INKmune for up over 3 years in vapor phase nitrogen

and have a fully scalable, closed system manufacturing process in validation which can produce up to 6 patient doses per week during phase

I and II trials.

At intermediate scale we can manufacture 40 doses per week in a single 15-liter bioreactor.

Importantly, we have validated

the storage of INKmune at -80 o C for up to 27 days which greatly facilitates the delivery and local storage of the drug for

clinical trials and post commercialization use.

In contrast, as far as we know all other NK cell therapies and T cell therapies require

complex shipping of drug products in vapor phase nitrogen below -150 o C and specialized arrangements for ongoing storage at

the clinical sites.

We may need additional INKmune for future clinical trials.

Interaction with Regulatory Authorities Regarding

INKmune Development

The INKmune Phase I studies in high-risk MDS were performed in the United

Kingdom and Greece.

We met with the Medicines and Healthcare Products Regulatory Agency (“MHRA”), the United Kingdom version

of the FDA as part of a Scientific Advice Meetings in preparation for submitting the CTA for our first planned program.

During March 2024,

the Company decided to terminate further enrollment in the MDS trial due to recruitment difficulties in the European trial sites.

INKmune Product Development Path Proposed Phase

I Study in patients with high-risk MDS

During 2021, we initiated

an open label Phase I cancer study in patients with high-risk myelodysplastic syndrome (“MDS”).

The first patient was enrolled

in the first quarter of 2021.

In the Phase I trial, we planned to treat patients with detectable residual disease in bone marrow and/or

peripheral blood (<15% blasts by conventional tests) with intravenous infusions of INKmune and monitored for changes in peripheral

blood NK activation, NK function and changes in residual blast counts in blood and bone marrow.

We and others have previously shown that

MDS patients with inadequate NK function have statistically significantly poorer prognosis than matched patients with normal levels of

NK function (Tsirogianni et al 2019) and we have shown in laboratory experiments that the functional activity of NK cells from MDS patients

can be enhanced by exposure to INKmune.

Moreover, INKmune-primed NK cells are not inhibited by the hypoxic conditions of the diseased

bone marrow microenvironment.

The first patient was treated in the second quarter of 2021.

part of the first cohort, received 1x10^8 INKmune cells on day 1,8 and 15 as an in-patient.

The patient did not require any type of conditioning

therapy or cytokine support.

The patient tolerated the three infusions without any problems.

The patient underwent intensive monitoring

over 120 days.

There are 4 observations from this first patient.

The patient has dramatically increased the number of activated, “memory-like”

NK cells in circulation.

Memory-like NK cells (mlNK) are activated NK cells with a unique cell surface protein phenotype and which show

enhanced lysis of tumor cell in vitro.

Post treatment with INKmune, elevated levels of mlNK cells were present in the patients in the

peripheral blood for more than 119 days when trial follow-up ceased.

The patient mlNK actively kill NK resistant cancer targets in vitro.

Finally, the patient had a significant clinical improvement with a reduction of his ECOG score from 2 to 0 and a significant reduction

in blood product support.

Three compassionate use cases have also been treated.

Two were young patients

with AML who had failed previous hematopoietic stem cell transplants (“HSCT”).

The first compassionate-treatment patient showed

such improved neutrophil and platelet counts that she was discharged from hospital for the first time in six months.

The second patient

treated compassionately had failed two high risk HSCT and entered the course of INKmune therapy with high percentage of blasts in his

His blood NK cells responded in differentiation into mlNK as hoped but it is too early to determine if INKmune has provide

any clinical benefit.

Due to market opportunities, the Company closed the high-risk MDS trial to focus on solid tumors.

The Company plans

to put all of its INKmune development efforts into the on-going US Phase I/II trial in men with mCRPC.

INKmune Registration Studies and/or Partnering

During March 2023 the Company

opened an Investigational New Drug (“IND”) application for a Phase I/II trial of INKmune in mCPRC.

The clinical trial is an

open label Phase I/II trial in men with metastatic castrate resistant prostate cancer.

The trial has a modified Baysian design that allows

for a 3 patient Phase I for each dose level followed by a 6 patient Phase II trial.

All patients will receive 3 infusions of INKmune on

days 1, 8 and 15.

The three doses of INKmune at low, medium and high dose of INKmune is 1x10^8, 3x10^8 or 5 x10^8 cells per infusion respectively.

INKmune infusions are given as an out-patient with the use of pre-medication or additional cytokines.

Patients are carefully monitored

for 6 months after the first dose of INKmune.

There are four goals of the trial – determine safety in the target population;

efficacy, anti-tumor effects and select a dose for the pivotal trial.

Immunologic efficacy is determined by an increase in the numbers

of memory like NK cells in the circulation of the patient and how long that increase lasts.

In general, we are expecting the number of

mlNK to double and to persist in the circulation of the patient for more than 120 days.

Anti-tumor effects will be monitored by serial

testing of blood prostatic surface antigen level (blood PSA), prostate-specific membrane antigen

nuclear medicine scan ( PMSA scan with piflufolastat F18;

Pylarify®) and circulating tumor DNA.

The Company enrolled the first

patient in the open label low, medium and high dose Phase I cohorts in DEC23, JUN24 and OCT24 respectively.

All patients in the phase

I dose escalation part of the trial have now been treated and the final patient in the Phase II cohorts is expected to be enrolled in

1H25 with data lock 2H25.

As an open label trial, there may be opportunities to see patient data during 2025.

Other solid cancers are

of interest including nasopharyngeal cancer (“NPC”) which is a known target for NK cells and an important unmet clinical need

in emerging markets such as mainland China.

Renal cell carcinoma is also a known target for INKmune.

We may seek to partner or sell INKmune.

Although our development strategy is focused on North America and Europe, we believe INKmune will also be attractive for markets on the

Pacific Rim, South Asia and South America, but will wait for partners to help with the development in those regions, however, at this

time, we are not negotiating with any potential partners.

Importantly, we have published

data demonstrating INKmune efficacy at priming allogeneic NK cells ex-vivo (described above) and this includes priming of NK cells differentiated

from cord-blood derived hematopoietic stem cells (Domogala et al Cytotherapy 2017:

Numerous companies are developing

therapeutic strategies using cord blood derived NK cell products and one or more may wish to partner with us to potentiate their product

by co-incubation or co-administration with INKmune.

We are also aware of companies developing cytokine primed NK cells (CIML) for the

treatment of cancer.

We believe tumor primed NK cells are superior to ex vivo or in vivo cytokine strategies.

Challenges in the Market for Our Product Candidates

The market for new oncology

therapies is competitive, complicated, and rapidly evolving.

We will be competing with companies that are older, larger, better financed

and have greater experience.

There are two types of drug companies – development companies and commercial companies.

companies take the risk of developing new products to proof-of-concept.

Once proof-of-concept has been achieved, if the drug provides

clinical benefit, the product is usually acquired by a commercial company, which completes the drug’s clinical development and markets

We are a development company which will seek to develop products such as INKmune from the bench to the bedside to demonstrate

proof-of-concept.

The goal for us is to successfully develop such products to the point where they are attractive targets for potential

partners/acquirers.

According to a recent Markets

and Markets report, the immunotherapy market is growing rapidly at an annual rate of over 13%.

Recently, the market is biased towards

T cell-based immunotherapies including bi-specific antibody therapies, checkpoint inhibitors and CAR-T cell-based therapies.

substantial numbers of clinical trials that are focused on the adaptive immune system versus clinical trials that are focused on the innate

immune system for the treatment of cancer.

Our challenge will be to educate partners on the value of NK cell-based therapeutic strategies.

The need to educate people of the importance of INB03 is equally challenging.

At the academic and investor level, there is little recognition

of the role MUC4 plays in causing resistance to immunotherapy.

The concept of adding a drug to modify the immunosuppressive environment

of the TME to allow immunotherapy to be effective is also new.

We will be responsible for educating them on the importance of MUC4 expression,

TAM, MDSC and why INB03 may be an important addition to the oncologist’s armamentarium.

We believe educating investors and partners

about new therapeutic opportunities is an easier task than trying to differentiate our company from the many other cancer immunotherapy

We plan to use a combination of publication, presentation and investor relations to discuss INKmune and INB03 and to educate

the clinical, biopharma and investor community on the value of these novel therapeutic approaches.

DN-TNF Competition

To our knowledge, there are

no other companies developing a therapy to treat patients with MUC4+HER2+ tumors.

This set of biomarkers predicts a tumor that will be

resistant to therapy.

We believe MUC4 expression means that patient will be resistant to first line trastuzumab based immunotherapy and

will be resistant to CPI.

INB03 is a unique category of cancer therapies.

It is does not kill cancer cells.

INB03 modulates the immunology

of the TME to make existing therapies more effective.

The advantage of this strategy is that it can be used prospectively, and it does

not add toxicity to existing therapy.

INKmune Competition

Our industry is highly competitive

and subject to rapid and significant technological change.

Our potential competitors include large pharmaceutical and biotechnology companies,

specialty pharmaceutical and generic drug companies, academic institutions, government agencies and research institutions.

that key competitive factors that will affect the development and commercial success of our product candidates are efficacy, safety, tolerability,

reliability, price, and reimbursement level.

Many of our potential competitors, including many of the organizations named below, have

substantially greater financial, technical, and human resources than we do and significantly greater experience in the discovery and development

of product candidates, obtaining FDA and other regulatory approvals of products and the commercialization of those products.

our competitors may be more successful than us in obtaining FDA approval for and achieving widespread market acceptance of their drugs.

Our competitors’ drugs may be more effective, or more effectively marketed and sold, than any drug we may commercialize and may

render our product candidates obsolete or non-competitive before we can recover the expenses of developing and commercializing any of

our product candidates.

We anticipate that we will face intense and increasing competition as new drugs enter the market and advanced

technologies become available.

Further, the development of new treatment methods for the conditions we are targeting could render our

drugs non-competitive or obsolete.

INKmune is an immunotherapy

that harnesses the biology of NK cells for the treatment of cancer.

There is a long list of immunotherapy strategies for the treatment

of cancer and the immunotherapy for cancer market is growing rapidly.

There are at least three ways to classify immunotherapy for cancer.

The list below classifies immunotherapy strategies beginning with those that are most closely related to INKmune:

Companies in the NK cell therapy business;

Companies in the personalized immune-oncology business;

Companies in the precision immuno-oncology business.

We are not aware of any approved

treatments that are classified as NK cell therapies.

We are aware of public companies in the NK cell therapy business such as Century

Therapeutics, Immunity Bio, Nkarta, Fate Therapeutics, Glycostem and others.

These companies are developing products that involve replacing

or supplementing NK cells of the patient for the treatment cancer.

Their products require extensive ex-vivo cell manipulations which,

with respect to Century Therapeutics and Fate Therapeutics, may include gene therapy.

The next larger group of companies are in the personalized

immuno-oncology business with products focused on T cell activation strategies.

The most popular are the CAR-T cell therapies which are

a patient specific ex-vivo gene therapy approach.

CAR-T therapy has become wildly popular of late and includes many private companies,

public companies such as Bluebird, Juno Therapeutics and Mustang Bio as well as established companies such as Novartis and Gilead.

many of the companies, CAR-T cell therapies is their only business.

For the latter two, CAR-T cell therapies is a newly in-licensed program

with marketing authorization in the US.

Finally, the precision immune-oncology category also includes companies with anti-cancer antibody

products and the newer “check-point” inhibitors.

Antibody therapies are all about “illuminating” the cancer to

the innate immune system (NK cells).

Monoclonal antibodies were the original immunotherapy that drove the growth of well-known biopharma

companies including Genentech/Roche, Amgen, Merck and others.

Each of these products is disease specific (ie:

treat only HER2+ breast

Modern therapeutic antibodies are much more complicated bi-specific and tri-specific antibodies that attempt to connect the cancer

with activated T-cells of the adaptive immune system.

Check-point inhibitors are currently the most rapidly expanding product category

in immuno-oncology.

These CTLA-4 (ipilimumab) and PD-1 inhibitors (pembrolizumab and nivolumab) specifically block a mechanism that shields

cancers from T-cell killing.

The two companies in this business are Merck (pembrolizumab) and GSK (ipilimumab and nivolumab).

many others trying to join this promising therapeutic area including large companies such as BMS and Roche.

There are several FDA approved

drugs that improve the ability of the innate immune system (NK-cells) to treat cancer including mono-clonal antibody therapies (for example:

Avastin® and Herceptin® marketed by Roche/Genentech);

and “check-point” inhibitors (Yervoy® and

Opdivo®, BMS, Keytruda®, Merck and others).

There is a large amount of development activity in the immune checkpoint inhibitor

field from both pharmaceutical giants including AstraZeneca, Merck & Co, Pfizer, Merck KGaA, Roche, GSK, Novartis and Amgen and many

start-ups, small companies and university spin-offs which have emerged in the past two years.

Examples (in alphabetical order) include

Agenus, Alligator Bioscience, Ambrx, AnaptysBio, argenx, Bioceros, BioNovion, Cellerant Therapeutics, Checkpoint Therapeutics, Compugen,

CureTech, Enumeral, Five Prime Therapeutics, Genmab, GITR, ImmuNext, IOmet Pharma, iTeos Therapeutics, Jounce Therapeutics, KAHR Medical,

Multimeric Biotherapeutics, Nativis, Orega Biotech, Pelican Therapeutics, Pieris Pharmaceuticals, Prima BioMed, Redx Pharma, Sorrento

Therapeutics, Tesaro, TG Therapeutics, Theravectys and ToleroTech active in the field.

The list of companies with poly-specific antibodies

that attempt to link the cancer with a cytotoxic T cell is long, includes both private and public companies (Amgen, Xencor, F-Star, Merus

and many others).

Finally, two CAR-T cell therapies were recently approved for the treatment of ALL – Kymriah™ (Novartis)

and Yescarta™ (Gilead).

We expect additional drugs to gain marketing authorization in the immune-oncology space.

To our knowledge, there are

no innate immune check-point inhibitors in development that have the unique characteristics of INB03 that neutralize sTNF to:

the proliferation of MDSC;

ii) decreasing local and systemic immunosuppression caused by MDSC by stopping production of immunosuppressive

cytokines and iii) improving NK/DC cross-talk to recruit the adaptive immune system to fight the cancer.

Company Overview

Bio is a clinical-stage biotechnology company dedicated to developing and commercializing a pipeline of product candidates designed to

reprogram the innate immune system.

Our mission is to address a broad range of diseases where chronic inflammation and immune dysfunction

are primary drivers of pathology.

CORDStrom™ for RDEB Our primary focus is the treatment of Recessive Dystrophic Epidermolysis Bullosa (RDEB)

using CORDStrom, our proprietary, pooled, human umbilical cord-derived mesenchymal stromal cell platform.

RDEB is a devastating pediatric

orphan disease caused by mutations in the COL7A1 gene.

This genetic deficiency leads to systemic complications, including highly

debilitating skin blistering, chronic non-healing wounds, dysphagia, and failure to thrive.

Over time, the chronic inflammatory environment

associated with RDEB often progresses to fatal squamous cell carcinoma.

RDEB is a systemic disease with no approved systemic treatments.

The only approved products to date are topical and do not address the systemic issues of the disease, which is the focus of CORDStrom.

CORDStrom has recently completed a pivotal, blinded, randomized cross-over

Based on these data, the Company is transitioning toward regulatory submission and commercialization.

We intend to file a Marketing

Authorization Application (MAA) in the United Kingdom in July 2026 and the European Union (EU) in September 2026, followed by a Biologics

License Application (BLA) with the U.S.

Food and Drug Administration (FDA) targeted for December 2026.

Neuroin flammation

and Oncology Pipelines In addition to our lead rare

disease program, the Company is advancing two other clinical-stage platforms:

A next-generation protein therapeutic that targets neuroinflammation by selectively

neutralizing soluble TNF.

XPro has completed Phase I and Phase II clinical trials for the

treatment of Alzheimer’s Disease (AD), with enrollment spanning clinical sites in the

United Kingdom, the European Union, Australia, and Canada.

A novel natural killer (NK) cell-priming platform designed to harness the patient’s

own innate immune system to eliminate cancer cells.

The INKmune program is currently nearing

the completion of an open-label Phase II trial for the treatment of metastatic castrate-resistant

prostate cancer (mCRPC).

targe ting the innate immune system across these distinct therapeutic areas, INmune Bio aims to deliver disease-modifying treatments

for patients with high unmet medical needs.

developed by INmune Bio circa 2020, represents a breakthrough in mesenchymal stromal cell technology.

The CORDStrom platform

leverages, among other things, proprietary screening, pooling and expansion techniques to create off-the-shelf, allogeneic, pooled

human umbilical cord - derived mesenchymal stromal cells as medicines to treat complex inflammatory diseases.

manufactured in the United Kingdom under the direction of Mark Lowdell, the Company’s CSO, using a supply of human umbilical

CORDStrom products are designed to provide high-quality, off-the-shelf, batch-to-batch consistent, scalable, cGMP

manufactured, potent cellular medicines that can be produced at low cost and with repeatable specification.

Initially developed at

the INKmune manufacturing facilities utilizing United Kingdom academic grant funding, CORDStrom is a product platform that shows

promise as a therapy for RDEB and many other debilitating conditions.

While the first generation CORDStrom product is agnostic to

indication, the platform enables creation of indication-specific products, which can be tuned for optimization of anti-inflammatory,

immunomodulatory, wound healing, and other characteristics.

Children with RDEB have skin that is damaged by even the smallest amount of friction which causes severe blistering, deep wounds, and

It is caused by a fault in a gene that makes collagen, a protein that holds the skin layers together.

There are limited options

available for treatment, none that adequately meet the needs of patients, and the condition gets worse over time with many children reliant

on a wheelchair as they move into their teenage years.

Many of those with an RDEB diagnosis will also go on to develop aggressive life-threatening

skin cancer in adulthood caused by the accumulated damage to their skin.

The Company estimates roughly 2,000 people suffer from RDEB in

the US, United Kingdom and EU representing a large unmet opportunity to potentially provide routine clinical care to these children.

From 2020 until mid-2024, the Company supplied CORDStrom as an investigational medical product to the Great Ormond Street Children’s

Hospital (“GOSH”), London, and Birmingham Children’s Hospital in connection with the MissionEB study, which was primarily

funded by a grant from the National Institute for Health and Care Research (“NIHR”) and Cure EB in the United Kingdom.

Bio was compensated for CORDStrom used in the trial and was not a sponsor of the MissionEB study.

The investigators recently concluded

the double blinded, randomized, placebo-controlled arm of the study, which evaluated the safety and efficacy of CORDStrom in 30 pediatric

patients (less than 16 years old) in the United Kingdom with intermediate and severe RDEB using a novel cross-over clinical trial design.

Patients were randomized to CORDStrom or placebo arms and received two intravenous infusions two weeks apart and then followed for 9 months.

Each child then crossed over to the other arm and received two doses of placebo or CORDStrom two weeks apart with a further 9-month follow-up.

patients were treated as day-cases and no CORDStrom related serious adverse events were reported through the study.

Top-line results

showed the treatment was easily administered, well tolerated and there were beneficial effects across all types of patients receiving

CORDStrom with respect to Itch Man Scale, iscorEB clinician score and iscorEB skin involvement.

Most notably, CORDStrom significantly

reduced itch scores as measured by the Itch Man Scale.

In patients with the most severe disease activity, CORDStrom reduced itch at 3

months and led to a sustained reduction of over 27% at 6 months.

These results demonstrate a clinically meaningful reduction in itch

severity sustained over time.

Intermediate group patients showed a broader range of improvements, including reduced skin involvement

and less pain as well as large reduction in itch.

The younger patients (less than 10 years old) showed improvements in skin score,

indicating better skin integrity and reduced disease activity.

Interviews with patients and caregivers on completing follow up strongly

support the clinical benefits of the therapy;

both caregivers and patients were able to correctly identify which treatment had been CORDStrom

and which had been placebo.

Those who completed the study are asking to continue on therapy, which the Company intends to pursue as an

open-label study.

analysis of the data by the Company noted an improvement in pain of the patients compared to placebo as follows:

addition, further analysis of the data by the Company showed an improvement of wellbeing compared to placebo as follows:

The Mission EB data form the basis of a license that was entered into

between INmune Bio and GOSH, whereby the Company gains exclusive access to the clinical study data for commercial uses in exchange for

payment of an initiation milestone of approximately $0.3 million which the Company paid during July 2025 and a single development milestone

of up to 6 million pounds (approximately $8.1 million at December 31, 2025) due on receipt of first marketing authorization from the FDA,

European Medicines Agencies (“EMA”), or the United Kingdom’s Medicines and Healthcare products Regulatory Agency (“MHRA”),

which has not occurred yet.

reviewing results of the Mission EB study, the Company initiated a Type C meeting with the FDA to obtain CMC and regulatory feedback and

submitted information, data and requests for Rare Pediatric Disease and Orphan Drug Designations (RPDD/ODD).

The FDA granted RPDD to the Company’s CORDStrom product on December

CORDStrom remains eligible to receive a Priority Review Voucher (PRV) if approved by the FDA on or prior to September 30, 2029,

assuming the PRV program is not extended.

If granted, a PRV can be redeemed to receive priority review for a different product.

Alternatively,

a PRV may be transferred or sold to another organization.

FDA granted ODD to the Company’s CORDStrom product on January 6, 2025.

Benefits of ODD include certain tax credits and eligibility

for select grants, waiver of FDA user fees, including the BLA application fees, access to frequent meetings with the FDA for efficient

drug development, and eligibility for seven (7) years of market exclusivity post approval.

Company plans to prepare for and hold a pre-BLA meeting to discuss particulars of its planned BLA submission, with intent to submit a

BLA this year seeking approval of CORDStrom for treatment of RDEB.

Concurrently, the Company will also seek to submit MAAs to the EU and

United Kingdom in 2026.

We believe our XPro platform can be used as a CNS (“central nervous

system”) therapy to target glial activation to prevent progression of AD along with other inflammatory diseases.

The primary focus

of the Company’s development efforts for XPro is AD.

In each case, we believe neutralizing soluble Tumor Necrosis Factor (“sTNF”)

is a cornerstone to the treatment of neuroinflammation and immune dysfunction in these diseases.

We believe the dominant negative tumor necrosis factor (“DN-TNF”)

platform can be used to treat selected neurodegenerative diseases by reducing neuroinflammation without immunosuppression.

believes the core pathology of cognitive decline is a combination of neurodegeneration and synaptic dysfunction.

Neurodegeneration is

nerve cell death that may include demyelination.

Synaptic dysfunction means the connections between nerve cells cease to work efficiently

and may decrease in number.

The combination of neurodegeneration and synaptic dysfunction causes cognitive decline and behavioral changes

associated with AD.

XPro completed a Phase I trial treating patients with Alzheimer’s disease that was partially funded by a Part-the-Clouds

Award from the Alzheimer’s Association.

We believe XPro targets activated microglia and astrocytes of the brain that produce sTNF

that promotes nerve cell loss, synaptic dysfunction and prevents myelin repair - key elements in the development of dementia.

models, elimination of sTNF prevents nerve cell dysfunction, reverses synaptic pruning and promotes myelin repair.

The Phase I trial in

patients with biomarkers of inflammation with AD has been completed.

The open label, dose escalation trial was designed to demonstrate

that XPro can safely decrease neuroinflammation in patients with AD and biomarkers of inflammation.

The goal of the Phase 1 trial was

to demonstrate safety in the target population (patients with AD), demonstrate target engagement by showing XPro got into the brain in

therapeutically relevant concentrations and reduced neuroinflammation) and identify the best dose for phase 2.

XPro got into the brain

( Figure 1a ) and dose dependently decreased biomarker of neuroinflammation in the CSF ( Figure 1b ) with patients treated with

the highest dose (1mg/kg/week dose) having the greatest reduction in neuroinflammation.

A broad analysis of proteomic changes following

treatment of XPro revealed significant changes in CSF proteins related to CNS neuronal function, immune/inflammatory response, Cytoskeletal,

metabolic processes, and dendritic spine morphogenesis and synaptic plasticity.

Of note, XPro reduced neuronal injury markers Visinin-like

protein-1 (91%) and Neurofilament light (84%), improved measures of synaptic function as evinced by a 222% increase in Contactin 2 and

a 56% decrease neurogranin.

Finally, XPro significantly reduced CSL levels of p-Tau217 (43%) and pTau181 (2%) after 3 months of therapy

( Figure 1c ).

(A) XPro gets into the brain

at therapeutically relevant concentrations.

XPro neutralizes 99.9% of sTNF when drug levels exceed two logs.

(B) XPro dose dependently

reduces CSF inflammation in the brain.

CSF composite – a composite score of change of all cytokines measured in the OLINK Target

48 Cytokine panel.

The Phase II study, also known

as AD-02 and MINDFuL, was a multicenter, randomized, double-blind, placebo-controlled clinical trial evaluating the safety, tolerability,

and efficacy of XPro in individuals with early Alzheimer’s disease with biomarkers of inflammation.

The primary goal of AD02 was

to determine if XPro could affect cognition following 6 months of treatment.

Participants with a diagnosis of early AD (mild cognitive

impairment or mild AD) were randomized in a 2:1 (XPro:Placebo) ratio to receive either 1.0 mg/kg of XPro or placebo via weekly subcutaneous

injections for 6 months.

An enrichment strategy mirroring to the successful strategy used in the Phase I trial was used to align the mechanism

of the drug with the patients AD pathology.

Eligibility required the presence of at least one

inflammatory biomarker—either high-sensitivity C-reactive protein (hsCRP > 1.5 mg/L), erythrocyte sedimentation rate (ESR >

10 mm/h), hemoglobin A1c (HbA1c > 6.0% DCCT), or at least one APOE4 allele.

The primary endpoint was the Early and Mild Alzheimer’s

Cognitive Composite (EMACC), with secondary endpoints of Clinical Dementia Rating Scale – Sum of Boxes (CDR-SB), Everyday Cognition

Scale (E-Cog), Neuropsychiatric Inventory (NPI-12), ADCS-ADL, and biomarkers such as pTau-217 and GFAP.

MRI-based neuroinflammation and

brain volumetrics are also evaluated.

The AD program had sites in Australia, Canada, the United Kingdom, France, Germany, Spain, Czech

Republic and Slovakia.

Full enrollment in the Phase

II AD trial occurred in late 2024 with 208 patients enrolled and top-line data was received during June 2025.

In the Phase 2 MINDFuL trial

of XPro in patients with early Alzheimer’s Disease (AD) with biomarkers of inflammation, the modified intent-to-treat (mITT)

population (n=200) did not meet the primary and key secondary endpoints ( figure 1 ).

Efficacy, Demographics and Safety data are

Phase 2 Study Results – mITT population Primary

and Key Secondary Endpoints, Change From Baseline

As these graphs depict, the primary

and secondary endpoints in this trial were not met as no decline in the placebo groups were observed.

A trend was observed in NPI that

favored XPro over placebo.

For reference, A higher EMACC score =better, A lower CDR and NPI score is better.

LS Mean Diff (SE):

-0.018 (0.0414), 90% CI:

-0.0860, 0.0509, p-value:

LS Mean Diff (SE):

-0.11 (0.185), 90% CI:

-0.417, 0.195, p-value:

LS Mean Diff (SE):

-0.9 (0.78), 90% CI:

-2.18, 0.39, p-value:

Prespecified subgroups analyses

suggested a signal that favored XPro in a predetermined population of patients that were both amyloid positive and had a higher burden

of inflammation defined by 2 or more biomarkers of inflammation (from hereon referred to as enriched group).

As shown in figure 2, the

mITT placebo group did not decline whereas patients in the enriched group did decline.

Decline in the placebo group is required to test

the ability of a treatment to prevent or slow decline.

Phase 2 Study Results – Placebo group decline in

the mITT and enriched population

Placebo patients in the mITT

did not show decline on the EMACC over the 24 week study.

In the enriched group, placebo patients did decline over 24 weeks.

To evaluate a subgroup after

missing the primary endpoint, we used effect size as the primary metric due to the smaller sample size (n=100).

Effect size, measured

by Cohen’s D, is well-suited for small samples and allows comparisons across different measures (e.g., cognitive tests and biomarkers).

Unlike p-values, which indicate the likelihood of results being due to chance, effect size reflects clinical relevance and is commonly

used for signal detection in Phase 2 studies.

We defined a promising signal

as a minimum effect size of 0.2, where XPro outperformed placebo on multiple endpoints aligned with our hypothesis and the drug’s

mechanism of action.

Results must also be appropriate for the trial’s parameters, meaning the observed effects should align with

the trial’s duration and endpoints.

For example, if a clinical measure typically requires a longer time to show meaningful change

than the trial’s 6-month timeframe, an observed effect on that endpoint would not be considered supportive.

Signal detection was

based on the effect size difference in LS mean change from baseline (MMRM model) between XPro and placebo at 6 months, ensuring results

were meaningful, relevant, and appropriate for the trial’s design and objectives.

Using this method, the enriched

population (50% of the total sample, n=100) showed trends toward improvement with XPro on the primary endpoint (EMACC) and a key secondary

endpoint (NPI) ( Figure 3a ).

With the placebo group showing the expected decline on EMACC over six months, a beneficial effect of

XPro became evident.

EMACC, which measures cognition (higher scores are better), showed an effect size of 0.27, exceeding the company’s

threshold of 0.2, though the p-value of 0.16 fell short of the <0.1 target.

For neuropsychiatric symptoms (NPI), the enriched population

showed a stronger beneficial effect compared to the overall population, with an effect size of -0.23 and a p-value of 0.2.

effect on CDR-SB, which measures cognition and function (lower scores are better).

Within the dose compliant group of patients, there

was an increased benefit seen corresponding to the amount of XPro received during the trial (Figure 3b).

We also evaluated the effect

size of additional endpoints ( Figure 4 ).

Across most endpoints, XPro showed favorable trends, with effect sizes approaching the

0.2 threshold for clinical relevance.

Phase 2 Study Results – Enriched population primary

and key secondary endpoints, change from baseline

The enriched population show

effect size >0.2 favoring XPro on the EMACC and NPI.

, A higher EMACC score =better, A lower CDR and NPI score is better.

Mean Diff (SE):

0.086 (0.0603), 90% CI:

-0.0146, 0.1857, p-value:

LS Mean Diff (SE):

-0.08 (0.307), 90% CI:

-0.593, 0.426,

LS Mean Diff (SE):

-1.6 (1.25), 90% CI:

-3.71, 0.47, p-value:

Phase 2 Study Results – XPro had greater impact

on dose compliant patients

Effect size of XPro across multiple endpoints described

as absolute effect sizes (cohen’s D).

Treatment Emergent Adverse Events (TEAEs):

Safety Analyses Set

TEAE by Maximum Severity

Treatment-Related Serious TEAE

TEAE Leading to Treatment Discontinuation

TEAE Leading to Study Withdrawal

TEAE with Fatal Outcome

The Company believes these findings from the Phase 2 results indicate

that XPro may offer benefits to a readily identified subgroup of Alzheimer’s patients across all ages with biomarker-defined neuroinflammation,

regardless of comorbidities or ApoE4 status and potentially lays the foundation for advancing XPro as a promising treatment for AD.

Company participated in an end-of-phase 2 meeting with the FDA during January 2026.

The minutes from the end-of phase 2 meeting confirmed

regulatory alignment on the Company’s proposed integrated Phase 2b/3 clinical development strategy for XPro in early AD.

The Company intends to pursue

strategic partnership opportunities to support the further development of XPro in neurodegenerative and/or other indications.

does not currently plan to independently advance XPro into later-stage development.

We have demonstrated that INKmune improves the ability of the patient’s

own NK cells to attack their tumor.

INKmune interacts with the patient’s NK cells to convert them from inert resting NK cells into

memory-like NK cells that kill the patient’s cancer cells.

INKmune is designed to be given to patients after their immune system

has recovered after cytotoxic chemotherapy to target the residual disease that remains after treatment with cytotoxic therapy.

INKmune can be used to treat numerous hematologic malignancies and solid tumors including leukemia, multiple myeloma, lymphoma, lung,

ovary, breast, renal and prostate cancer.

The Company sponsored a Phase I trial using INKmune to treat patients with high risk MDS/AML,

a form of leukemia in the UK.

Due to Covid restrictions only one patient completed treatment and follow-up in the Phase I trial for MDS;

a further three AML patients were treated compassionately.

Due to the post-Covid recruitment problems, the Company decided to terminate

further enrollment in the MDS/AML trial in March 2024.

Nonetheless, from the four patients treated and completing follow-up it was determined

that INKmune therapy is safe and promotes development of cancer killing memory-like NK cells that are activated and can kill NK-resistant

cancer cells which can be found in the patient’s circulation for up to 4 months after completion of treatment.

The Company initiated

a separate multicenter Phase I/II trial of INKmune in a metastatic castrate resistant prostate cancer in the US and enrolled the first patient in December 2023.

The Company’s Phase

I/II trial using INKmune to treat patients with metastatic castrate resistant prostate cancer (mCPRC) is an open label trial.

data from the patients will be visible as patients are treated.

The Company plans to report data from each cohort as it becomes available.

The trial was completely enrolled during the fourth quarter of 2025 and top-line data is anticipated approximately 6 months thereafter.

Topline data are divided into immunologic and tumor response variables.

The most important immunologic response variable is related to

memory-like NK cell persistence.

There are 3 important variables to tumor response:

i) blood PSA changes;

ii) change in PSMA-PET scan

and iii) change in circulating tumor DNA (ctDNA).

INKmune is not a hormone-targeting treatment and will not directly reduce PSA levels

but tumor load measured by PSMA-PET and/or ctDNA are expected to decrease with treatment.

We do not expect this 6-month trial to provide

survival data.

Due to capital constraints, the Company does not intend to move INKmune further into development at this time.

Intellectual Property

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and sometimes in Brazil, China and/or Korea.

We currently have in our portfolio fifteen (15) issued patents and thirty (30) pending patent

applications, including both company-owned and in-licensed properties.

The following sections and corresponding tables summarize, for

each of our current therapeutic programs, our pending and granted patent positions, to the extent publicly available, as of the time of

preparing this document:

DN-TNF Platform Technology (Oncology, Central

Nervous System Disorders, Acute and Chronic Peripheral Diseases)

The DN-TNF Platform Technology

covers a variety of dominant negative tumor necrosis factor (“DN-TNF”) variant proteins, including the pegylated DN-TNF protein

variants known as XPro and INB03.

These DN-TNF protein variants can be considered a platform technology for treating the underlying immune

dysfunction associated with many disease manifestations.

Unlike approved anti-TNF therapeutics, DNTNF selectively targets and neutralizes

soluble TNF, and is therefore not immunosuppressive.

Additionally, XPro has been shown to cross the blood brain barrier after peripheral

administration, making it attractive for use in treating CNS disorders.

The following table summarizes current IP covering our DN-TNF

platform technology:

We currently have in our portfolio thirteen (13) issued patents and twenty-seven (27) pending

patent applications, including both company-owned and in-licensed properties.

The following sections and corresponding tables summarize,

for each of our current therapeutic programs, our pending and granted patent positions, to the extent publicly available, as of the time

of preparing this document:

CORDStrom (MSCs)

CORDStrom is a cell suspension

for intravenous infusion or injection comprising aseptic, allogeneic, pooled human umbilical cord derived mesenchymal stromal cells (hucMSCs).

CORDStrom solves certain manufacturing and CMC limitations known to affect mesenchymal stem/stromal cell products, namely, improved batch-to-batch

consistency and scalable manufacturing.

The following table summarizes current IP covering our CORDStrom platform technology:

Subject Matter / Compound

Nominal Patent

CORDStrom compositions and formulations

Use of CORDStrom for treating disease

DN-TNF Platform Technology

The DN-TNF Platform Technology covers a variety of dominant negative

tumor necrosis factor variant proteins, including the pegylated DN-TNF protein variants known as XPro and INB03.

The following table summarizes

current IP covering our DN-TNF platform technology:

Subject Matter / Compound

Nominal Patent

DNTNF compositions and formulations

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Another commercial application of INKmune

includes use as a cytokine-like (“pseudokine”) agent for enhancing NK cell killing specificity, potency, and efficacy of NK

cell -based therapeutics.

INKmune, as a therapeutic, is intended for provision as an I.V.

-infused product containing replication-incompetent

bio substrate units, each of which is adapted to present an aggregate of protein ligands and/or receptors to a patient’s own NK

cells, in vivo .

Upon contacting the patient’s NK cells, INKmune converts resting NK cells into what we call “primed”

NK cells (“pNKs”).

Data suggests that pNKs demonstrate enhanced killing of tumor cells, thus INKmune may indirectly improve

a patient’s own immune response to cancer.

As a pseudokine agent, INKmune can be used to contact the NK cells of an NK cell therapeutic

product in vitro , e.g., during manufacturing, for enhancing characteristics of the NK cell therapeutic and rendering an improved

includes use as a cytokine-like agent for enhancing NK cell killing specificity, potency, and efficacy of NK cell -based therapeutics.

The following table summarizes current IP covering INB-16 / INKmune:

3 unchanged sentences

Use of INKmune for treating disease

CORDStrom (MSCs)

CORDstrom is a cell suspension

for intravenous infusion or injection comprising aseptic, allogeneic, pooled HucMSCs.

CORDStrom solves certain manufacturing and CMC limitations

known to affect mesenchymal stem/stromal cell products, namely, improved batch-to-batch consistency and scalable manufacturing.

filed patent applications directed to CORDStrom including claims covering composition of matter, formulation, and methods of treating

various disease indications.

In addition, we protect manufacturing trade secrets with a series of confidentiality provisions in various

The following table summarizes current IP covering our CORDStrom platform technology:

Subject Matter / Compound

Nominal Patent

CORDStrom compositions and formulations

Use of CORDStrom for treating disease

General IP Disclosures

Our commercial success depends

in part on obtaining and maintaining patent and trade secret protections, where applicable, of our current and future product candidates

and the methods used to manufacture them, as well as successfully defending our patents against third-party challenges.

Our commercial success

depends in part on obtaining and maintaining patent and trade secret protections, where applicable, of our current and future product

candidates and the methods used to manufacture them, as well as successfully defending our patents against third-party challenges.

Our ability to stop third

17 unchanged sentences

filings, and other regular patent prosecution activities.

The designations INMUNE BIO TM , INB16 TM , INKmune TM ,

PSEUDOKINE TM , and XPro TM are trademarks of INmune Bio Inc.

Some or all these trademarks may be protected by applications

pending at the USPTO and other trademark registration authorities globally.

As part of the trademark registration process, we may be required

to submit a statement of use evidencing bona fide use of each mark in commerce.

By nature of being in the biopharmaceutical business,

certain regulatory requirements must be met in connection with certain products and/or services prior to receiving marketing authorization

from a regulatory agency, and thus it may take some time before products and/or services are offered for sale and a statement of use can

be submitted for perfecting trademark registration.

For these reasons, we may be required to obtain extensions of time, or to refile applications,

seeking registration of trademarks.

We cannot guarantee that a given trademark application will be allowed or issued in a respective office

for each jurisdiction.

The designations INMUNE BIO TM ,

CORDStrom TM , INB16 TM , INKmune TM , XPro1595 TM and XPro TM are trademarks of INmune

Some or all these trademarks may be protected by registrations or applications pending at the USPTO and other trademark registration

authorities globally.

As part of the trademark registration process, we may be required to submit a statement of use evidencing bona

fide use of each mark in commerce.

By nature of being in the biopharmaceutical business, certain regulatory requirements must be met

in connection with certain products and/or services prior to receiving marketing authorization from a regulatory agency, and thus it may

take some time before products and/or services are offered for sale and a statement of use can be submitted for perfecting trademark registration.

For these reasons, we may be required to obtain extensions of time, or to refile applications, seeking registration of trademarks.

cannot guarantee that a given trademark application will be allowed or issued in a respective office for each jurisdiction.

IP License Agreements

17 unchanged sentences

this payment.

On July 20, 2018 and October 30, 2020, the parties amended the agreement under which the Company was required achieve

On July 20, 2018 and October 30, 2020, the parties amended the agreement under which the Company was required to achieve

milestones pursuant to the agreement.

73 unchanged sentences

Agreement, we agreed to royalty payments and a percentage of any payments received in exchange for a sub-license.

CORDStrom License Agreement – Clinical Trial Data

On February 6, 2025, the Company and Great Ormond Street Hospital NHS

Foundation Trust (“GOSH”) executed an exclusive commercial use license to clinical trial data associated with the MissionEB

trial (ISRCTN14409785).

The Company owns the intellectual property covering the CORDStrom product, the investigational medicinal product

(“IMP”) used in the MissionEB trial.

In addition, the Company owns IP and maintains trade secret protections covering the

manufacturing of CORDStrom.

With this license to the clinical trial data, the Company intends to prepare applications seeking marketing

authorization of CORDStrom for treatment of pediatric recessive dystrophic epidermolysis bullosa (“RDEB”) in each of the FDA,

EMA, and MHRA.

Terms of the GOSH license include an upfront payment of £250,000 (approximately $0.3 million at February 6, 2025)

and a single milestone payment of up to £6,000,000 (approximately $7.5 million at February 6, 2025) due on the first to occur marketing

authorization to be granted by the FDA, EMA or MHRA.

While these things can be unpredictable, the Company is targeting a first marketing

authorization in 2026, which upon occurrence would render the single milestone obligation due for payment.

In addition to these financial

terms, the Company has agreed to certain patient access obligations, including sponsoring the supply of CORDStrom to United Kingdom patients

enrolled in an open label continuation of the MissionEB trial.

INKmune Research and Development

We expect to use third parties

to conduct our preclinical and clinical trials under the direct supervision of management.

INKmune Manufacturing

We intend to contract with

third parties for the manufacture of our compounds for investigational purposes, for preclinical and clinical testing and for any FDA

approved products for commercial sale.

Pre-clinical and clinical material for the early clinical trials with INKmune has been manufactured

under the direction of Mark Lowdell at a licensed Good Manufacturing Practice (“GMP”) facility.

The master cell bank, working

cell bank and individual product doses were completed in July 2018.

This clinical material is planned for use in the Phase I/II clinical

As we progress in our clinical programs, additional working cell banks and therapeutic product will be produced from the existing

master cell bank.

This process takes approximately 6 months and is not anticipated to delay the initiation or enrollment of the Phase

We may transfer the manufacturing to a different commercial contract manufacturing organization after completion of these

Phase II studies.

Human Mesenchymal Stem

In November 2017 (amended

in October 2022), we entered into a Material Transfer and License Agreement with the Anthony Nolan Cord Blood Bank (“AN”),

the oldest and largest non-directed cord blood bank in the United Kingdom for the supply the starting material for the mesenchymal stem

cells - umbilical cords not used after cord blood harvest.

Mark Lowdell’s research group developed and validated a methodology for

producing large numbers of clinical-grade pooled HucMSC.

We believe we are well positioned to become a preferred manufacturing partner

for companies who need MSC for clinical programs.

Manufacture of HucMSC is performed under the direction of Mark Lowdell in a licensed

GMP facility that is contracted to the Company as part of existing research and development agreements.

The starting material for the

HucMSC product is provided by the AN.

The HucMSC product produced in this facility are fully qualified to be used for either research

or clinical trials.

We have developed a validated manufacturing process that reliably produces contract manufacturer of the clinical grade

(“cGMP”) quality mesenchymal stem cells that we call CORDStrom.

To date, we are supporting one academic clinical trial with

CORDStrom in the United Kingdom treating children with recessive dystrophic erythematous bullosa (“RDEB”), a disfiguring skin

disease in children that is similar to a second-degree burn.

INmune Bio supplied the clinical product for treatment of these patients.

The pivotal trial in RDEB has been completed.

The Company reviewed the clinical data under CDA on October 7, 2024.

A non-binding agreement

was executed with GOSH while the company determined if the clinical data could be used to support marketing authorization of CORDStrom

to treat RDEB in the US.

The Company completed that review and licensed the clinical data from GOSH on February 6, 2025.

The use of CORDStrom

to treat children with RDEB was announced publicly on February 10, 2025.

Currently, we plan to supply CORDStrom to third parties for their

research use and in clinical trials as part of the development process for commercial products.

We may decide to expand this agreement

in the future if the commercial and/or development opportunities warrant such expansion.

At the current time, we expect this program to

be funded by revenues from commercial sales.

The agreement with AN terminates on November 29, 2027.

AN may terminate the license on written

notice to us, if a donor withdraws consent to the continued use of umbilical cord tissue samples that were obtained by AN.

Additionally,

either party may terminate the agreement on 30 days prior written notice to the other if that other party materially breach any term of

the agreement and such breaches (to the extent it is remediable) is not remedied within 30 days of the written request to the other party

Challenges in the Market for Immunotherapy

CORDStrom License Agreement – Clinical

On February 6, 2025, the

Company and Great Ormond Street Hospital NHS Foundation Trust (“GOSH”) executed an exclusive commercial use license to clinical

trial data associated with the MissionEB trial (ISRCTN14409785).

The Company owns the intellectual property covering the CORDStrom product,

the investigational medicinal product (“IMP”) used in the MissionEB trial.

In addition, the Company owns IP and maintains

trade secret protections covering the manufacturing of CORDStrom.

With this license to the clinical trial data, the Company intends to

prepare applications seeking marketing authorization of CORDStrom for treatment of pediatric recessive dystrophic epidermolysis bullosa

(“RDEB”) in each of the FDA, EMA, and MHRA.

Terms of the GOSH license include an upfront payment of £250,000 (approximately

$0.3 million) which the Company paid during 2025 and a single milestone payment of up to £6,000,000 (approximately $8.1 million

at December 31, 2025) due on the first to occur marketing authorization to be granted by the FDA, EMA or MHRA.

Under the license agreement,

the Company was previously obligated to provide CORDStrom for use in the MissionEB clinical study at no cost.

During February 2026, the

MissionEB study was formally closed, and the Company’s obligation to supply CORDStrom in connection with that study has terminated

in accordance with the terms of the license agreement.

As a result, the Company has no remaining contractual product supply obligations

related to the MissionEB study under the license agreement.

The Company intends to provide CORDStrom at no cost for use in a contemplated

follow-on clinical study referred to as “MissionEB II” however, no definitive agreement governing such study has been executed,

and the Company has no present contractual obligation to supply product for MissionEB II.

Government Regulation

The FDA and other federal,

state, local and foreign regulatory agencies impose substantial requirements upon the clinical development, approval, labeling, manufacture,

marketing, and distribution of drug products.

These agencies regulate, among other things, research and development activities and the

testing, approval, manufacture, quality control, safety, effectiveness, labeling, storage, record keeping, advertising and promotion of

our product candidates.

The regulatory approval process is generally lengthy and expensive, with no guarantee of a positive result.

failure to comply with applicable FDA or other requirements may result in civil or criminal penalties, recall or seizure of products,

injunctive relief including partial or total suspension of production, or withdrawal of a product from the market.

Various regulatory authorities

regulate, among other things, the research, manufacture, promotion, and distribution of drugs in the United States under the FDA and other

statutes and implementing regulations.

The process required by the FDA before prescription drug product candidates may be marketed in

the United States generally involves the following:

completion of extensive nonclinical laboratory tests, animal studies and formulation studies, all performed in accordance with the FDA’s Good Laboratory Practice regulations;

submission to the FDA of an investigational new drug application, or IND, which must become effective before human clinical trials may begin;

for some products, performance of adequate and well-controlled human clinical trials in accordance with the FDA’s regulations, including Good Clinical Practices, to establish the safety and efficacy of the product candidate for each proposed indication;

submission to the FDA of a new drug application or NDA;

satisfactory completion of an FDA preapproval inspection of the manufacturing facilities at which the product is produced to assess compliance with current Good Manufacturing Practice, or cGMP, regulations;

FDA review and approval of the NDA prior to any commercial marketing, sale or shipment of the drug.

The testing and approval process

requires substantial time, effort and financial resources, and we cannot be certain that any approvals for our product candidates will

be granted on a timely basis, if at all.

Preclinical tests include

laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate toxicity in animals and other animal

The results of preclinical tests, together with manufacturing information and analytical data, are submitted as part of an IND

Some preclinical testing may continue even after an IND is submitted.

The IND also includes one or more protocols for the

initial clinical trial or trials and an investigator’s brochure.

An IND automatically becomes effective 30 days after receipt by

the FDA, unless the FDA, within the 30-day time period, raises concerns or questions relating to the proposed clinical trials as outlined

in the IND and places the clinical trial on a clinical hold.

In such cases, the IND sponsor and the FDA must resolve any outstanding concerns

or questions before any clinical trials can begin.

Clinical trial holds also may be imposed at any time before or during studies due to

safety concerns or non-compliance with regulatory requirements.

An independent institutional review board, or IRB, at each of the clinical

centers proposing to conduct the clinical trial must review and approve the plan for any clinical trial before it commences at that center.

An IRB considers, among other things, whether the risks to individuals participating in the trials are minimized and are reasonable in

relation to anticipated benefits.

The IRB also approves the consent form signed by the trial participants and must monitor the study until

The FDA offers several regulatory

mechanisms that provide expedited or accelerated approval procedures for selected drugs in the indications on which we are focusing our

These include accelerated approval under Subpart H of the agency’s NDA approval regulations, fast track drug development

procedures and priority review.

The United States, European

Union and other jurisdictions may grant orphan drug designation to drugs intended to treat a “rare disease or condition,”

which, in the United States, is generally a disease or condition that affects no more than 200,000 individuals.

In the European Union,

orphan drug designation can be granted if:

the disease is life threatening or chronically debilitating and affects no more than 50 in

100,000 persons in the European Union;

without incentive it is unlikely that the drug would generate sufficient return to justify the

necessary investment;

and no satisfactory method of treatment for the condition exists or, if it does, the new drug will provide a significant

benefit to those affected by the condition.

If a product that has an orphan drug designation subsequently receives the first regulatory

approval for the indication for which it has such designation, the product is entitled to orphan exclusivity, meaning that the applicable

regulatory authority may not approve any other applications to market the same drug for the same indication, except in limited circumstances,

for a period of seven years in the United States and 10 years in the European Union Orphan drug designation does not prevent competitors

from developing or marketing different drugs for the same indication or the same drug for different indications.

Orphan drug designation

must be requested before submitting an NDA.

After orphan drug designation is granted, the identity of the therapeutic agent and its potential

orphan use are publicly disclosed.

Orphan drug designation does not convey an advantage in, or shorten the duration of, the review and

approval process.

However, this designation provides an exemption from marketing and authorization (“NDA”) fees.

We plan to follow a similar

path with INB03 or XPro, although the precise indication cannot be determined until we are farther along in the development process.

Clinical Trials

Phase 1 clinical trials typically

involve the initial introduction of the product candidate into healthy human volunteers.

In Phase 1 clinical trials, the product candidate

is typically tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and pharmacodynamics.

Phase 2 clinical trials are

conducted in a limited patient population to gather evidence about the efficacy of the product candidate for specific, targeted indications;

to determine dosage tolerance and optimal dosage;

and to identify possible adverse effects and safety risks.

Phase 3 clinical trials are

undertaken to evaluate clinical efficacy and to test for safety in an expanded patient population at geographically dispersed clinical

The size of Phase 3 clinical trials depends upon clinical and statistical considerations for the product candidate and disease,

but sometimes can include several thousand patients.

Phase 3 clinical trials are intended to establish the overall risk-benefit ratio

of the product candidate and provide an adequate basis for product labeling.

Clinical trials involve the

administration of the product candidate to human subjects under the supervision of qualified medical investigators according to approved

protocols that detail the objectives of the study, dosing procedures, subject selection and exclusion criteria, and the parameters to

be used to monitor participant safety.

Regulatory procedures differ in each country we will be working in.

For example, in the US, each

protocol is submitted to the FDA as part of the IND for their review and consent before enrolling patients in the clinical trial.

US is not the only place to perform clinical trials.

Most countries have systems in place to allow academics and companies to sponsor

clinical trials of novel therapies in patients.

For financial and technical reasons, the Company will perform the Phase I clinical trials

of our programs in the United Kingdom and Australia.

The US will be included in the Phase II and//or Phase III programs.

such as Europe, Canada, Japan and other Pacific Rim countries may be included in the development program in the future.

The INB03 Phase I trial has

been completed and provided evidence of safety and a pharmacodynamic drug affect, decrease of inflammatory biomarkers, needed to move

the program to a Phase II clinical trial in cancer.

The Phase II clinical trial will combine INB03 with approved second line therapy in

patients with HER2+ breast cancer with or without brain metastasis that have progressed after treatment with TDxd.

This is a combination

trial where the addition of INB03 to approved second line therapy may provide a therapeutic alternative in a disease without any drugs

The Company has not lost interest in combining INB03 with immune checkpoint inhibitors (CPI), but competition for patients is

fierce in this arena.

Our plan is to pursue treatment of tumors that express MUC4 as our lead indication.

Tumors that express MUC4 are

resistant to all forms of immunotherapy due to a combination of increased MDSC in the tumor, decrease tumor macrophage (TAM) phagocytosis,

decreased inflammation in the tumor (a “cold” tumor) and direct effects of MUC4 and soluble TNF on HER2 function.

If combination

therapy with INB03 decreases MUC4 expression and changes the TME to make the “cold” tumor “hot”, then addition

of a CPI will be warranted.

At this time, the combination trial to treat MUC4+ TDxd resistant HER2+ expressing cancer is our most probable

registration strategy for INB03.

This includes the combination of INB03 with trastuzumab antibody drug conjugate therapy TDxd in combination

with a TKI and/or CPI.

Current therapies for TDxd resistant cancers are used on a trial by error approach.

Using MUC4 expression as a

biomarker for to predict resistance may bring a precision medicine approach to this difficult clinical scenario.

Addition of INB03 to

the treatment regimen for treating MUC4+ cancers may convert “cold” tumors to “hot” tumors making the eligible

for treatment with CPI.

The design and successful completion of a Phase II trial is not guarantee of clinical relevance or commercial

There are multiple therapies on the market or in development for the treatment of resistant breast cancer.

The introduction

of TDxd to the clinician’s armamentarium is new and evolving.

The future standard-of-care is not known.

The registration and development

strategy for INB03 is multinational.

The Phase II program may enroll patients in other countries, including the United States after submitting

an Investigational New Drug application, or IND, to the U.S.

Food and Drug Administration, or FDA.

If partnering is successful at any

stage of INB03 development, we expect the partner to influence the development and regulatory decisions needed with moving the drug to

commercialization.

Finally, combination therapy to treat patients resistant to trastuzumab or CPI are not the only oncology application

INB03 can be combined with other immune-oncology therapy to improve efficacy, safety or both.

INB03 can be used as part of

combination therapy with immuno-oncology drugs, paired with tradition therapies such as cytotoxic chemotherapy, kinase inhibitors, cell

therapies or radiation therapy.

The company is pursuing pre-clinical data in some of these areas.

When and if positive developments occur,

we will communicate them to our shareholders.

There are other regulatory venues that will be important for both our products – the

largest and most important is Europe.

In Europe, the European Medicines Agencies (“EMA”) is responsible for authorization

of clinical trials in member states.

In EU, there may be a requirement to get individual country authorization at the same time as EMA

authorization.

The initial development of INB03 and XPro occurred in AUS followed by trials in other regulatory jurisdictions including

The development of INKmune will start in the United Kingdom followed by trials in the US.

XPro is being developed for the treatment

of Alzheimer’s disease under a Part-the-Cloud Award received Feb 2019.

The biomarker directed Phase I trial was performed in AUS

using a regulatory strategy identical to that used for INB03 in cancer.

Regulatory approval to initiate the trial was received on February

XPro treats microglial activation and innate immune dysregulation may be the cause with Alzheimer’s disease in some patients.

To our knowledge, there are few companies using an anti-inflammatory strategy for the treatment of Alzheimer’s disease.

Those companies

include Denali Therapeutics (NASDAQ:

developing DNL747 that targets critical signaling proteins in the TNF pathway that regulate

inflammation and cell death.

Alector (NASDAQ:

ALEC) in partnership with Abbvie is developing AL002 that targets TREM2 on microglial cells.

Gliacure is targeting microglial cells in Alzheimer’s disease with a small molecule candidate GC021109.

Lecanemab (Leqembi™;

Eisai) was approved for the treatment of patients with Early AD in January 2023 This is this the second anti-amyloid drug for the treatment

of early AD to be approved.

Donanemab (Lilly), a third drug anti-amyloid therapy for early AD is expected to be approved 2Q24.

drugs have similar efficacy and safety profiles.

One of the common safety problems is the development of ARIA (Alzheimer’s Related

Imaging Abnormality) that causes a delay or discontinuation of therapy.

ARIA is neuroinflammation related side-effect more common in patients

expressing ApoE4.

The modest efficacy, sub-optimal safety and difficulty of use makes combination therapy for the treatment of early AD

an attractive development and therapeutic strategy.

The Company is following the developments in this area closely.

The Company believes

the anti-amyloid therapies will slowly develop market share, but due to their safety and efficacy profile, there will be demand for safer

and more efficacious therapies that do not target amyloid.

Clinical testing must satisfy

extensive FDA regulations.

Reports detailing the results of the clinical trials must be submitted at least annually to the FDA and safety

reports must be submitted for serious and unexpected adverse events.

Success in early-stage clinical trials does not assure success in

later stage clinical trials.

The FDA, an IRB or we may suspend a clinical trial at any time on various grounds, including a finding that

the research subjects or patients are being exposed to an unacceptable health risk.

New Drug Applications

Assuming successful completion

of the required clinical trials, the results of product development, preclinical studies and clinical trials are submitted to the FDA

as part of an NDA.

An NDA also must contain extensive manufacturing information, as well as proposed labeling for the finished product.

An NDA applicant must develop information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing

the product in accordance with cGMP.

The manufacturing process must be capable of consistently producing quality product within specifications

approved by the FDA.

The manufacturer must develop methods for testing the quality, purity and potency of the final product.

appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product does not undergo

unacceptable deterioration over its shelf life.

Prior to approval, the FDA will conduct an inspection of the manufacturing facilities

to assess compliance with cGMP.

The FDA reviews all NDAs submitted

before it accepts them for filing.

The FDA may request additional information rather than accept an NDA for filing.

In this event, the

NDA must be resubmitted with the additional information and is subject to review before the FDA accepts it for filing.

After an application

is filed, the FDA may refer the NDA to an advisory committee for review, evaluation and recommendation as to whether the application should

be approved and under what conditions.

The FDA is not bound by the recommendation of an advisory committee, but it considers them carefully

when making decisions.

The FDA may deny approval of an NDA if the applicable regulatory criteria are not satisfied.

Data obtained from

clinical trials are not always conclusive and the FDA may interpret data differently than we interpret the same data.

The FDA may issue

a complete response letter, which may require additional clinical or other data or impose other conditions that must be met in order to

secure final approval of the NDA.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases

and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product.

the FDA may require us to conduct Phase 4 testing which involves clinical trials designed to further assess a drug’s safety and

effectiveness after NDA approval and may require surveillance programs to monitor the safety of approved products which have been commercialized.

Once issued, the FDA may withdraw product approval if ongoing regulatory requirements are not met or if safety or efficacy questions are

raised after the product reaches the market.

Post-Approval Requirements

Any products manufactured

or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things,

requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, distribution, and advertising and promotion

of the product.

After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject

to prior FDA review and approval.

There also are continuing, annual user fee requirements for any marketed products and the establishments

at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

Pharmaceutical

manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject

to periodic unannounced inspections by the FDA and certain state agencies for compliance with GMP, which impose certain procedural and

documentation requirements upon us and our third-party manufacturers.

Changes to the manufacturing process are strictly regulated, and,

depending on the significance of the change, may require prior FDA approval before being implemented.

FDA regulations also require investigation

and correction of any deviations from cGMP and impose reporting requirements upon us and any third-party manufacturers that we may decide

Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain

compliance with cGMP and other aspects of regulatory compliance.

If our future suppliers are not able to comply with these requirements,

the FDA may, among other things, halt our clinical trials, require us to recall a product from distribution, or withdraw approval of the

The FDA may withdraw approval

if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with

manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new

safety information;

FDA and other regulatory authorities at federal, state and local levels, as well as in foreign countries, extensively regulate, among

other things, the research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging,

storage, distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring and post-approval reporting

of biologics such as those we are developing.

We, along with third-party contractors, will be required to navigate the various preclinical,

clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies

or seek approval or licensure of our product candidates.

Generally, before a new therapeutic product can be marketed, considerable data

demonstrating a biological product candidate’s quality, safety, purity and potency, or a small molecule drug candidate’s quality,

safety and efficacy, must be obtained, organized into a format specific for each regulatory authority, submitted for review and approved

by the regulatory authority.

For biological product candidates, potency is similar to efficacy and is interpreted to mean the specific

ability or capacity of the product, as indicated by appropriate laboratory tests or by adequately controlled clinical data obtained through

the administration of the product in the manner intended to effect a given result.

to comply with the applicable U.S.

requirements at any time during the product development process, approval process or post-marketing

may subject an applicant to administrative or judicial sanctions.

These sanctions could include, among other actions, the FDA’s

refusal to approve pending applications from the sponsor, withdrawal of an approval, a clinical hold, untitled or warning letters, product

recalls or market withdrawals, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals

of government contracts, restitution, disgorgement and civil or criminal penalties.

Any agency or judicial enforcement action could have

a material adverse effect on our company and our products or product candidates.

Biologics Regulation

the United States, biological products are subject to regulation under the Federal Food, Drug, and Cosmetic Act (the “FDCA”),

the Public Health Service Act (“PHSA”), and other federal, state, local, and foreign statutes and regulations.

of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, and local statutes and regulations requires

the expenditure of substantial time and financial resources.

Failure to comply with the applicable U.S.

requirements at any time during

the product development process, approval process or following approval may subject an applicant to administrative action and judicial

The process required by the FDA before biologic product candidates may be marketed in the United States generally involves

the following:

● completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s

current Good Laboratory Practices (“GLP”) regulation;

● submission to the FDA of an Investigational New Drug Application (“IND”), which must become

effective before clinical trials may begin and must be updated annually or when significant changes are made;

● approval by an independent institutional review board (“IRB”), or ethics committee at each

clinical site before the trial is commenced;

● manufacture of the proposed biologic candidate in accordance with Current Good Manufacturing Practices

● performance of adequate and well-controlled human clinical trials in accordance with Good Clinical Practice

(“GCP”) requirements to establish the safety, purity and potency of the proposed biologic product candidate for its intended

● preparation of and submission to the FDA of a BLA, after completion of all pivotal clinical trials;

● satisfactory completion of an FDA Advisory Committee review, if applicable;

● a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;

● satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities

at which the proposed product is produced to assess compliance with cGMPs, and to assure that the facilities, methods and controls are

adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites

to assess compliance with GCPs;

● FDA review and approval of a BLA to permit commercial marketing of the product for particular indications

for use in the United States.

and Clinical Development

to beginning any clinical trial with a product candidate in the United States, we must submit an IND to the FDA.

An IND is a request for

authorization from the FDA to administer an investigational new drug product to humans.

The central focus of an IND submission is on the

general investigational plan and the protocol or protocols for preclinical studies and clinical trials.

The IND also includes results

of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology and pharmacodynamic characteristics of the product,

chemistry, manufacturing and controls information, and any available human data or literature to support the use of the investigational

In April 2025, the FDA published a roadmap to reduce animal testing in preclinical safety studies, including those required in

INDs, with scientifically validated new approach methodologies.

An IND must become effective before human clinical trials may begin.

IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day period, raises safety concerns

or questions about the proposed clinical trial.

In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA

must resolve any outstanding concerns or questions before the clinical trial can begin.

Submission of an IND therefore may or may not

result in FDA authorization to begin a clinical trial.

addition to the IND submission process, supervision of human gene transfer trials includes evaluation and assessment by an institutional

biosafety committee (“IBC”), a local institutional committee that reviews and oversees research utilizing recombinant or synthetic

nucleic acid molecules at that institution.

The IBC assesses the safety of the research and identifies any potential risk to public health

or the environment and such review may result in some delay before initiation of a clinical trial.

trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in

accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation

in any clinical study.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters

to be used in monitoring safety and the effectiveness criteria to be evaluated.

A separate submission to the existing IND must be made

for each successive clinical trial conducted during product development and for any subsequent protocol amendments.

Furthermore, an independent

IRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent

form before the clinical trial begins at that site, and must monitor the study until completed.

Regulatory authorities, the IRB or the

sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable

health risk or that the trial is unlikely to meet its stated objectives.

Some studies also include oversight by an independent group of

qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether

or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial

if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.

are also requirements governing the reporting of ongoing preclinical studies and clinical trials and clinical study results to public

purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap.

The investigational product is initially introduced into healthy human subjects or patients with

the target disease or condition.

These studies are designed to test the safety, dosage tolerance, absorption, metabolism and distribution

of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence

on effectiveness.

The investigational product is administered to a limited patient population with a specified

disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse

side effects and safety risks.

Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more

expensive Phase 3 clinical trials.

The investigational product is administered to an expanded

patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test

for safety, generally at multiple geographically dispersed clinical trial sites.

These clinical trials are intended to establish the overall

risk/benefit ratio of the investigational product and to provide an adequate basis for product approval.

some cases, the FDA may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more

information about the product.

These so-called Phase 4 studies may be made a condition to approval of the BLA.

Concurrent with clinical

trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the

product candidate, and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things,

must develop methods for testing the identity, strength, quality and purity of the final product, or for biologics, the safety, purity

Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that

the product candidate does not undergo unacceptable deterioration over its shelf life.

sponsor may choose, but is not required, to conduct a foreign clinical study under an IND.

When a foreign clinical study is conducted

under an IND, all IND requirements must be met unless waived.

When the foreign clinical study is not conducted under an IND, the sponsor

must ensure that the study complies with certain FDA regulatory requirements in order to use the study as support for an IND or application

for marketing approval or licensure, including that the study was conducted in accordance with GCP, including review and approval by an

independent ethics committee and use of proper procedures for obtaining informed consent from subjects, and the FDA is able to validate

the data from the study through an onsite inspection if the FDA deems such inspection necessary.

The GCP requirements encompass both ethical

and data integrity standards for clinical studies.

Submission and Review

successful completion of all required testing in accordance with all applicable regulatory requirements, the results of product development,

nonclinical studies and clinical trials are submitted to the FDA as part of a BLA requesting approval to market the product for one or

more indications.

The BLA must include all relevant data available from pertinent preclinical studies and clinical trials, including negative

or ambiguous results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing,

controls, and proposed labeling, among other things.

Data can come from company-sponsored clinical studies intended to test the safety

and effectiveness of the product, or from a number of alternative sources, including studies initiated and sponsored by investigators.

The submission of a BLA requires payment of a substantial application user fee to the FDA, unless a waiver or exemption applies.

addition, under the Pediatric Research Equity Act (“PREA”), a BLA or supplement to a BLA must contain data to assess the safety

and effectiveness of the biological product candidate for the claimed indications in all relevant pediatric subpopulations and to support

dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The Food and Drug Administration

Safety and Innovation Act requires that a sponsor who is planning to submit a marketing application for a biological product that includes

a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial pediatric

study plan within sixty days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA.

Unless otherwise required

by regulation, PREA does not apply to any biological product for an indication for which orphan designation has been granted, except that

the PREA will apply to an original BLA for a new active ingredient that is orphan-designated if the biologic is a molecularly targeted

cancer product intended for the treatment of an adult cancer and is directed at a molecular target that the FDA determines to be substantially

relevant to the growth or progression of a pediatric cancer.

60 days following submission of the application, the FDA reviews a BLA submitted to determine if it is substantially complete before the

agency accepts it for filing.

The FDA may refuse to file any BLA that it deems incomplete or not

properly reviewable at the time of submission and may request additional information.

In this event, the BLA must be resubmitted with

the additional information.

Once a BLA has been accepted for filing, the FDA’s goal is to review standard applications within ten

months after the filing date, or, if the application qualifies for priority review, six months after the FDA accepts the application for

In both standard and priority reviews, the review process may also be extended by FDA requests for additional information or clarification.

The FDA reviews a BLA to determine, among other things, whether a product is safe, pure and potent and the facility in which it is manufactured,

processed, packed or held meets standards designed to assure the product’s continued safety, purity and potency.

The FDA may convene

an advisory committee to provide clinical insight on application review questions.

The FDA is not bound by the recommendations of an advisory

committee, but it considers such recommendations carefully when making decisions .

approving a BLA, the FDA will typically inspect the facility or facilities where the product is manufactured.

The FDA will not approve

an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate

to assure consistent production of the product within required specifications.

Additionally, before approving a BLA, the FDA will typically

inspect one or more clinical sites to assure compliance with GCPs.

If the FDA determines that the application, manufacturing process or

manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing

or information.

Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application

does not satisfy the regulatory criteria for approval.

the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance

will be produced, the FDA may issue an approval letter or a Complete Response letter.

An approval letter authorizes commercial marketing

of the product with specific prescribing information for specific indications.

A Complete Response letter will describe all of the deficiencies

that the FDA has identified in the BLA, except that where the FDA determines that the data supporting the application are inadequate to

support approval, the FDA may issue the Complete Response letter without first conducting required inspections, testing submitted product

lots and/or reviewing proposed labeling.

In issuing the Complete Response letter, the FDA may recommend actions that the applicant might

take to place the BLA in condition for approval, including requests for additional information or clarification.

The FDA may delay or

refuse approval of a BLA if applicable regulatory criteria are not satisfied, require additional testing or information and/or require

post-marketing testing and surveillance to monitor safety or efficacy of a product.

regulatory approval of a product is granted, such approval will be granted for particular indications and may entail limitations on the

indicated uses for which such product may be marketed.

For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation

Strategy (“REMS”) to ensure the benefits of the product outweigh its risks.

A REMS is a safety strategy to manage a known

or potential serious risk associated with a product and to enable patients to have continued access to such medicines by managing their

safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution

methods, patient registries and other risk minimization tools.

The FDA also may condition approval on, among other things, changes to

proposed labeling or the development of adequate controls and specifications.

Once approved, the FDA may withdraw the product approval

if compliance with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace.

The FDA may require one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety

and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing

Development and Review Programs

FDA offers a number of expedited development and review programs for qualifying product candidates.

The fast track program is intended

to expedite or facilitate the process for reviewing new products that meet certain criteria.

Specifically, new products are eligible for

fast track designation if they are intended to treat a serious or life-threatening disease or condition and data demonstrate the potential

to address unmet medical needs for the disease or condition.

Fast track designation applies to the combination of the product and the

specific indication for which it is being studied.

The sponsor of a fast track product has opportunities for more frequent interactions

with the review team during product development and, once a BLA is submitted, the product may be

eligible for priority review.

A fast track product may also be eligible for rolling review, where the FDA may consider for review sections

of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the

sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays

any required user fees upon submission of the first section of the BLA.

Additionally,

products studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated

approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit,

or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict

an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of

the condition and the availability or lack of alternative treatments.

As a condition of accelerated approval, the FDA will generally require

the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible

morbidity or mortality or other clinical benefit.

Under the Food and Drug Omnibus Reform Act of 2022, the FDA may require, as appropriate,

that such studies be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated

Products receiving accelerated approval may be subject to expedited withdrawal procedures if the sponsor fails to conduct the

required post-marketing studies or if such studies fail to verify the predicted clinical benefit.

In addition, the FDA currently requires

as a condition for accelerated approval pre-approval of promotional materials, which could adversely impact the timing of the commercial

launch of the product.

2017, the FDA established a new regenerative medicine advanced therapy (“RMAT”) designation as part of its implementation

of the 21st Century Cures Act (the “Cures Act”).

The RMAT designation program is intended to fulfill the Cures Act requirement

that the FDA facilitate an efficient development program for, and expedite review of, any drug that meets the following criteria:

the drug qualifies as a RMAT, which is defined as a cell therapy, therapeutic tissue engineering product, human cell and tissue product,

or any combination product using such therapies or products, with limited exceptions;

(ii) the drug is intended to treat, modify, reverse,

or cure a serious or life-threatening disease or condition;

and (iii) preliminary clinical evidence indicates that the drug has the potential

to address unmet medical needs for such a disease or condition.

RMAT designation provides all the benefits of breakthrough therapy designation,

including more frequent meetings with the FDA to discuss the development plan for the product candidate and eligibility for rolling review

and priority review.

granted RMAT designation may also be eligible for accelerated approval on the basis of a surrogate or intermediate endpoint reasonably

likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites, including through expansion

to additional sites.

When appropriate, the FDA can permit fulfillment of post-approval requirements for an RMAT that has received accelerated

approval through:

the submission of clinical evidence, preclinical studies, clinical trials, patient registries or other sources of real

world evidence such as electronic health records;

the collection of larger confirmatory datasets;

or post-approval monitoring of all patients

treated with the therapy prior to approval.

product intended to treat a serious or life-threatening disease or condition may also be eligible for breakthrough therapy designation

to expedite its development and review.

A product can receive breakthrough therapy designation if preliminary clinical evidence indicates

that the product, alone or in combination with one or more other drugs or biologics, may demonstrate substantial improvement over existing

therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

The designation includes all of the fast track program features, as well as more intensive FDA interaction and guidance beginning as early

as Phase 1 and an organizational commitment to expedite the development and review of the product, including involvement of senior managers.

marketing application for a biologic submitted to the FDA for approval, including a product with a fast track designation and/or breakthrough

therapy designation, may be eligible for other types of FDA programs intended to expedite the FDA review and approval process, such as

priority review and accelerated approval.

A product is eligible for priority review if there is evidence it has the potential to provide

a significant improvement in the treatment, diagnosis or prevention of a serious disease or condition.

For original BLAs, priority review

designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (as

compared to ten months under standard review).

track designation, breakthrough therapy designation, RMAT designation and priority review do not change the standards for approval but

may expedite the development or approval process.

Even if a product qualifies for one or more of these programs, the FDA may later decide

that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be

Drug Designation and Exclusivity

the Orphan Drug Act of 1983, the FDA may grant orphan drug designation to a product candidate intended to treat a rare disease or condition,

which is generally a disease or condition that affects fewer than 200,000 individuals in the United States, or 200,000 or more individuals

in the United States for which there is no reasonable expectation that the cost of developing and making available in the United States

a drug or biologic for this type of disease or condition will be recovered from sales in the United States for that product candidate.

Orphan drug designation must be requested before submitting a BLA.

After the FDA grants orphan drug designation, the identity of the therapeutic

agent and its potential orphan use are disclosed publicly by the FDA.

The orphan drug designation does not convey any advantage in, or

shorten the duration of, the regulatory review or approval process.

a product that has orphan drug designation subsequently receives the first FDA approval for the disease or condition for which it has

such designation, the product is entitled to orphan drug exclusive approval (or exclusivity), which means that the FDA may not approve

any other applications, including a full BLA, to market the same product for the same approved use or indication for seven years, except

in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity by means of greater effectiveness,

greater safety or providing a major contribution to patient care or if the holder of the orphan drug exclusivity cannot assure the availability

of sufficient quantities of the orphan drug to meet the needs of patients with the same use or indication for which the already-approved

or licensed product was approved or licensed.

Orphan drug exclusivity does not prevent the FDA from approving a different drug or biologic

for the same disease or condition, or the same drug or biologic for a different disease or condition.

Among the other benefits of orphan

drug designation are tax credits for certain research and a waiver of the BLA application fee.

designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader than the indication for which

it received orphan drug designation.

In addition, exclusive marketing rights in the United States may be lost if the FDA later determines

that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product

to meet the needs of patients with the rare disease or condition.

is some uncertainty with respect to the FDA’s interpretation of the scope of orphan drug exclusivity.

Historically, exclusivity

was specific to the orphan indication for which the drug was approved.

As a result, the scope of exclusivity was interpreted as preventing

approval of a competing product.

However, in 2021, the federal court in Catalyst Pharmaceuticals, Inc.

Becerra suggested that orphan

drug exclusivity covers the full scope of the orphan-designated “disease or condition” regardless of whether a drug obtained

approval for a narrower use.

Post-Approval

products manufactured or distributed by us pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including,

among other things, requirements relating to record-keeping, reporting of adverse experiences, periodic reporting, product sampling and

distribution, and advertising and promotion of the product.

As part of the manufacturing process, the manufacturer is required to perform

certain tests on each lot of the product before it is released for distribution.

After a BLA is approved for a biological product, the

product also may be subject to official lot release.

If the product is subject to official release by the FDA, the manufacturer submits

samples of each lot of product to the FDA together with a release protocol showing a summary of the history of manufacture of the lot

and the results of all of the manufacturer’s tests performed on the lot.

The FDA also may perform certain confirmatory tests on

lots of some products before releasing the lots for distribution by the manufacturer.

In addition, the FDA conducts laboratory research

related to the regulatory standards on the safety, purity, and potency or effectiveness of biologics.

After approval, most changes to

the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval.

are continuing user fee requirements, under which the FDA assesses an annual program fee for each product identified in an approved BLA.

Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies,

and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMPs, which impose certain

procedural and documentation requirements upon us and our third-party manufacturers.

Changes to the manufacturing

process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented.

FDA regulations also require investigation and correction of any deviations from cGMPs and impose reporting requirements upon us and any

third-party manufacturers that we may decide to use.

Accordingly, manufacturers must continue to expend time, money and effort in the

area of production and quality control to maintain compliance with cGMPs and other aspects of regulatory compliance.

FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product

reaches the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity

or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved

labeling to add new safety information;

imposition of post-market studies or clinical studies to assess new safety risks;

or imposition of distribution restrictions

or other restrictions under a REMS program.

The FDA closely regulates

the marketing, labeling, advertising and promotion of pharmaceutical products.

A company can make only those claims relating to safety

and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label.

other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

Failure to comply with these requirements

can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties.

Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that differ from

those tested by us and approved by the FDA.

or imposition

of distribution restrictions or other restrictions under a REMS program.

Other potential consequences include, among other things:

● restrictions on the marketing or manufacturing of a product, complete withdrawal of the product from the

market or product recalls;

● fines, warning letters or holds on post-approval clinical studies;

● refusal of the FDA to approve pending applications or supplements to approved applications, or suspension

or revocation of existing product approvals;

● product seizure or detention, or refusal of the FDA to permit the import or export of products;

● consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs;

● mandated modification of promotional materials and labeling and the issuance of corrective information;

● the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications

containing warnings or other safety information about the product;

● injunctions or the imposition of civil or criminal penalties.

FDA closely regulates the marketing, labeling, advertising and promotion of biologics.

A company can make only those claims relating to

safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label.

FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

Failure to comply with these

requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal

Physicians may prescribe legally available products for uses that are not described in the product’s labeling and that

differ from those tested by us and approved by the FDA.

Such off-label uses are common across medical specialties.

Physicians may believe that such

off-label uses are the best treatment for many patients in varied circumstances.

Physicians may believe

that such off-label uses are the best treatment for many patients in varied circumstances.

The FDA does not regulate the behavior of physicians

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their products.

Other Healthcare Laws and Compliance Requirements

Our sales, promotion, medical

education, clinical research and other activities following product approval will be subject to regulation by numerous regulatory and

law enforcement authorities in the United States in addition to FDA, including potentially the Federal Trade Commission, the Department

of Justice, the Centers for Medicare and Medicaid Services, or CMS, other divisions of the U.S.

Department of Health and Human Services

and state and local governments.

Our promotional and scientific/educational programs must comply with the federal Anti-Kickback Statute,

the civil False Claims Act, physician payment transparency laws, privacy laws, security laws, and additional federal and state laws similar

to the foregoing.

The federal Anti-Kickback

Statute prohibits, among other things, the knowing and willing, direct or indirect offer, receipt, solicitation or payment of remuneration

in exchange for or to induce the referral of patients, including the purchase, order or lease of any good, facility, item or service that

would be paid for in whole or part by Medicare, Medicaid or other federal health care programs.

Remuneration has been broadly defined

to include anything of value, including cash, improper discounts, and free or reduced-price items and services.

The federal Anti-Kickback

Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, formulary

managers, and beneficiaries on the other.

Although there are a number of statutory exceptions and regulatory safe harbors protecting some

common activities from prosecution, the exceptions and safe harbors are drawn narrowly.

Practices that involve remuneration that may be

alleged to be intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exception

or safe harbor.

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does

not make the conduct per se illegal under the federal Anti-Kickback Statute.

Instead, the legality of the arrangement will be evaluated

on a case-by-case basis based on a cumulative review of all its facts and circumstances.

Several courts have interpreted the statute’s

intent requirement to mean that if any one purpose of an arrangement involving remuneration is to induce referrals of federal healthcare

covered business, the federal Anti-Kickback Statute has been violated.

The government has enforced the federal Anti-Kickback Statute to

reach large settlements with healthcare companies based on sham research or consulting and other financial arrangements with physicians.

Further, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a

In addition, the government may assert 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 Act.

Many states have similar laws that apply to their

state health care programs as well as private payors.

Federal false claims and false

statement laws, including the federal civil False Claims Act, or FCA, imposes liability on persons or entities that, among other things,

knowingly present or cause to be presented claims that are false or fraudulent or not provided as claimed for payment or approval by a

federal health care program.

The FCA has been used to prosecute persons or entities that “cause” the submission of claims

for payment that are inaccurate or fraudulent, by, for example, providing inaccurate billing or coding information to customers, promoting

a product off-label, submitting claims for services not provided as claimed, or submitting claims for services that were provided but

not medically necessary.

Actions under the FCA may be brought by the Attorney General or as a qui tam action by a private individual in

the name of the government.

Violations of the FCA can result in significant monetary penalties and treble damages.

The federal government

is using the FCA, and the accompanying threat of significant liability, in its investigation and prosecution of pharmaceutical and biotechnology

companies throughout the country, for example, in connection with the promotion of products for unapproved uses and other illegal sales

and marketing practices.

The government has obtained multi-million and multibillion dollar settlements under the FCA in addition to individual

criminal convictions under applicable criminal statutes.

In addition, certain companies that were found to be in violation of the FCA

have been forced to implement extensive corrective action plans, and have often become subject to consent decrees or corporate integrity

agreements, restricting the manner in which they conduct their business.

The federal Health Insurance

Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other things,

knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party

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;

and willfully obstructing a criminal

investigation of a healthcare offense.

Like the federal Anti-Kickback Statute, the Affordable Care Act amended the intent standard for

certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or

specific intent to violate it in order to have committed a violation.

Given the significant size

of actual and potential settlements, we expect that the government will continue to devote substantial resources to investigating healthcare

providers’ and manufacturers’ compliance with applicable fraud and abuse laws.

Also, many states have similar fraud and abuse

statutes or regulations that may be broader in scope and may apply regardless of payor, in addition to items and services reimbursed under

Medicaid and other state programs.

Additionally, to the extent that our products, once commercialized, are sold in a foreign country,

we may be subject to similar foreign laws.

In addition, there has been

a recent trend of increased federal and state regulation of payments made to physicians and other healthcare providers.

The Patient Protection

and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, or collectively, the Affordable Care Act, among

other things, imposed new reporting requirements on certain manufacturers of drugs, devices, biologics and medical supplies for which

payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, for payments

or other transfers of value made by them to physicians and teaching hospitals, as well as ownership and investment interests held by physicians

and Reference Product Exclusivity

Affordable Care Act (“ACA”) includes a subtitle called the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”),

which created an abbreviated approval pathway for biological products that are highly similar, or “biosimilar”, to or interchangeable

with an FDA-approved reference biological product.

The FDA has issued several guidance documents outlining an approach to review and approval

of biosimilars.

Biosimilarity,

which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of

safety, purity, and potency, is generally shown through analytical studies, animal studies, and a clinical study or studies.

Interchangeability

requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the

same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual,

the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety

risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

A product shown to be biosimilar or interchangeable

with an FDA-approved reference biological product may rely in part on the FDA’s previous determination of safety and effectiveness

for the reference product for approval, which can potentially reduce the cost and time required to obtain approval to market the product.

Complexities associated with the larger, and often more complex, structures of biological products,

as well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval

pathway that are still being worked out by the FDA.

FDA has issued guidance documents intended to inform prospective applicants and facilitate the development of proposed biosimilars and

interchangeable biosimilars, as well as to describe the FDA’s interpretation of certain statutory requirements added by the BPCIA.

the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference

product was first licensed by the FDA.

In addition, the approval of a biosimilar product may not be made effective by the FDA until 12

years from the date on which the reference product was first licensed.

During this 12-year period of exclusivity, another company may

still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s

own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product.

The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products.

At this juncture, it is unclear

whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed

by state pharmacy law.

reference biologic is granted twelve years of exclusivity from the time of first licensure of the reference product.

The first biologic

product submitted under the abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity

against other biologics submitted under the abbreviated approval pathway for the lesser of (i) one year after the first commercial marketing,

(ii) 18 months after approval if there is no legal challenge, (iii) 18 months after the resolution in the applicant’s favor of a

lawsuit challenging the biologics’ patents if an application has been submitted, or (iv) 42 months after the application has been

approved if a lawsuit is ongoing within the 42-month period.

biological product can also obtain pediatric market exclusivity in the United States.

Pediatric exclusivity, if granted, adds six months

to existing exclusivity periods and patent terms.

This six-month exclusivity, which runs from the end of other exclusivity protection

or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written

Request” for such a study.

BPCIA is complex and continues to be interpreted and implemented by the FDA.

On December 20, 2020, Congress amended the PHSA as part of

the COVID-19 relief bill to further simplify the biosimilar review process by making it optional to show that conditions of use proposed

in labeling have been previously approved for the reference product, which used to be a requirement of the application.

In addition, government

proposals have sought to reduce the 12-year reference product exclusivity period.

Other aspects of the BPCIA, some of which may impact

the BPCIA exclusivity provisions, have also been the subject of recent litigation.

As a result, the ultimate impact, implementation, and

impact of the BPCIA is subject to significant uncertainty.

As discussed below, the Inflation Reduction Act of 2022 (“IRA”)

is a significant new law that intends to foster generic and biosimilar competition and to lower drug and biologic costs.

Term Extension

the United States, after a BLA is approved, owners of relevant drug patents may apply for up to a five-year patent extension, which permits

patent term restoration as compensation for the patent term lost during the FDA regulatory process.

The allowable patent term extension

is typically calculated as one-half the time between, the latter of the effective date of an IND and issue date of the patent for which

extension is sought, and the submission date of a BLA, plus the time between BLA submission date and the BLA approval date up to a maximum

of five years.

The time can be shortened if the FDA determines that the applicant did not pursue licensure with due diligence.

patent term after the extension may not exceed 14 years from the date of product licensure.

Only one patent applicable to a licensed biological

product is eligible for extension and only those claims covering the product, a method for using it, or a method for manufacturing it

may be extended and the application for the extension must be submitted prior to the expiration of the patent in question.

may not be granted an extension because of, for example, failing to exercise due diligence during the testing phase or regulatory review

process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to

satisfy applicable requirements.

but not all, foreign jurisdictions possess patent term extension or other additional patent exclusivity mechanisms that may be more or

less stringent and comprehensive than those of the United States.

Healthcare Laws and Compliance Requirements

Pharmaceutical

companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and

foreign jurisdictions in which they conduct their business.

Such laws include, without limitation:

the federal Anti-Kickback Statute (“AKS”);

the federal False Claims Act (“FCA”);

the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)

and similar foreign, federal and state fraud, abuse and transparency laws.

AKS prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration,

to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment

may be made under any federal healthcare program.

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

AKS has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand, and prescribers and purchasers on

The government often takes the position that to violate the AKS, only one purpose of the remuneration need be to induce referrals,

even if there are other legitimate purposes for the remuneration.

There are a number of statutory exceptions and regulatory safe harbors

protecting some common commercial activities from AKS prosecution, but they are drawn narrowly and practices that involve remuneration,

such as consulting agreements, for persons in a position to refer or recommend federally reimbursable healthcare business may be alleged

to be intended to induce prescribing, purchasing or recommending, and may be subject to scrutiny if they do not qualify for an exception

or regulatory safe harbor.

Qualifying for a statutory exception or regulatory safe harbor requires satisfying all of the criteria for

the exception or safe harbor.

Our practices may not in all cases meet all of the criteria for protection under a statutory exception or

regulatory safe harbor.

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor

does not make the conduct per se illegal under the AKS, but it does increase the risk of regulatory scrutiny.

Ultimately, the legality

of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances.

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

FCA, which can be enforced through civil whistleblower or qui tam actions, prohibits, among other things, individuals or entities from

knowingly presenting, or causing to be presented, claims for payment of federal government funds, including in federal healthcare programs,

that are false or fraudulent.

Pharmaceutical and other healthcare companies have been prosecuted under these laws for engaging in a variety

of different types of conduct that caused the submission of false claims to federal healthcare programs.

Under the AKS, for example, a

claim resulting from a violation of the AKS is deemed to be a false or fraudulent claim for purposes of the FCA.

created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program,

including private third-party payors, and making false statements relating to healthcare matters.

A person or entity does not need to

have actual knowledge of the healthcare fraud statute implemented under HIPAA or specific intent to violate the statute in order to have

committed a violation.

FDCA addresses, among other things, the design, production, labeling, promotion, manufacturing, and testing of drugs, biologics and medical

devices, and prohibits such acts as the introduction into interstate commerce of adulterated or misbranded drugs or devices.

also prohibits the introduction into interstate commerce of unlicensed or mislabeled biological products.

federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which

payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually

report to the Centers for Medicaid & Medicare Services (“CMS”) information related to payments or other transfers of value

to various healthcare professionals including physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified

nurse anesthetists, certified nurse-midwives, and teaching hospitals, as well as ownership and investment interests held by physicians

and their immediate family members.

Covered manufacturers are required to collect and report detailed payment data and submit legal attestation

to the accuracy of such data to the government each year.

Failure to submit required information may result in civil monetary penalties

of up to an aggregate of $150,000 per year (or up to an aggregate of $1 million per year for “knowing failures”), for all

payments, transfers of value or ownership or investment interests that are not timely, accurately, and completely reported in an annual

Additionally, entities that do not comply with mandatory reporting requirements may be subject to a corporate integrity agreement.

Certain states also mandate implementation of commercial compliance programs, impose restrictions on covered manufacturers’ marketing

practices and/or require the tracking and reporting of gifts, compensation and other remuneration to physicians and other healthcare professionals.

We may also be subject to

data privacy and security regulation by both the federal government and the states in which we conduct our business.

HIPAA, as amended

by the Health Information Technology and Clinical Health Act, or HITECH, and their respective implementing regulations, imposes specified

requirements on certain health care providers, plans and clearinghouses (collectively, “covered entities”) and their “business

associates,” relating to the privacy, security and transmission of individually identifiable health information.

Among other things,

HITECH makes HIPAA’s security standards directly applicable to “business associates,” defined as independent contractors

or agents of covered entities that create, receive, maintain or transmit protected health information in connection with providing a service

for or on behalf of a covered entity.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities,

business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions

in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions.

certain states have their own laws that govern the privacy and security of health information in certain circumstances, many of which

differ from each other and/or HIPAA in significant ways and may not have the same effect, thus complicating compliance efforts.

Coverage and Reimbursement

Sales of pharmaceutical products

depend significantly on the extent to which coverage and adequate reimbursement are provided by third-party payors.

Third-party payors

include state and federal government health care programs, managed care providers, private health insurers and other organizations.

we currently believe that third-party payors will provide coverage and reimbursement for our product candidates, if approved, we cannot

be certain of this.

Third-party payors are increasingly challenging the price, examining the cost-effectiveness, and reducing reimbursement

for medical products and services.

In addition, significant uncertainty exists as to the reimbursement status of newly approved healthcare

Beginning on January 1, 2023, California Assembly Bill 1278 requires California physicians and surgeons

to notify patients of the Open Payments database established under the federal Physician Payments Sunshine Act.

are also subject to federal price reporting laws and federal consumer protection and unfair competition laws.

Federal price reporting

laws require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used

in the calculation of reimbursement and/ or discounts on approved products.

Federal consumer protection and unfair competition laws broadly

regulate marketplace activities and activities that potentially harm consumers.

are also subject to additional similar U.S.

state and foreign law equivalents of each of the above federal laws, which, in some cases,

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

If our operations

are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including,

without limitation, civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs,

such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to

resolve allegations of non-compliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits

and the curtailment or restructuring of our operations.

Privacy and Security

state, federal, and foreign laws govern the collection, dissemination, use, access to, confidentiality and security of personal information,

including health-related information.

In the United States, numerous federal and state laws and regulations, including state data breach

notification laws, state health information privacy laws, and federal and state consumer protection laws and regulations, that govern

the collection, use, disclosure, and protection of health-related and other personal information and could apply to our operations or

the operations of our partners.

For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act

(“HITECH”), and their respective implementing regulations impose data privacy, security, and breach notification obligations

on certain health care providers, health plans, and health care clearinghouses, known as covered entities, as well as their business associates

and their covered subcontractors that perform certain services that involve using, disclosing, creating, receiving, maintaining, or transmitting

individually identifiable protected health information (“PHI”) for or on behalf of such covered entities.

These requirements

imposed by HIPAA and HITECH on covered entities and business associates include entering into agreements that require business associates

protect PHI provided by the covered entity against improper use or disclosure, among other things;

following certain standards for the

privacy of PHI, which limit the disclosure of a patient’s past, present, or future physical or mental health or condition or information

about a patient’s receipt of health care if the information identifies, or could reasonably be used to identify, the individual;

ensuring the confidentiality, integrity, and availability of all PHI created, received, maintained, or transmitted in electronic form,

to identify and protect against reasonably anticipated threats or impermissible uses or disclosures to the security and integrity of such

and reporting of breaches of PHI to individuals and regulators.

that are found to be in violation of HIPAA may be subject to significant civil, criminal, and administrative fines and penalties and/or

additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to

settle allegations of HIPAA non-compliance.

A covered entity or business associate is also liable for civil money penalties for a violation

that is based on an act or omission of any of its agents, which may include a downstream business associate, as determined according to

the federal common law of agency.

HITECH also increased the civil and criminal penalties applicable to covered entities and business associates

and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and

seek attorneys’ fees and costs associated with pursuing federal civil actions.

To the extent that we submit electronic healthcare

claims and payment transactions that do not comply with the electronic data transmission standards established under HIPAA and HITECH,

payments to us may be delayed or denied.

addition, state health information privacy laws, such as California’s Confidentiality of Medical Information Act and Washington’s

My Health My Data Act, govern the privacy and security of health-related information, specifically, may apply even when HIPAA does not

and impose additional requirements.

when HIPAA and state health information privacy laws do not apply, according to the FTC and state attorneys general, violating consumers’

privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or

practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act and state consumer protection laws.

addition, certain state laws, such as the California Consumer Privacy Act of 2018 (“CCPA”), as amended by the California Privacy

Rights Act of 2020, govern the privacy and security of personal information, including health-related information in certain circumstances,

some of which are more stringent than HIPAA in various ways.

Numerous other states have passed similar laws, but many differ from each

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

The CCPA applies to personal data of

consumers, business representatives, and employees, and imposes obligations on certain businesses that do business in California, including

to provide specific disclosures in privacy notices, and affords rights to California residents in relation to their personal information.

Health information falls under the CCPA’s definition of personal information where it identifies, relates to, describes, or is reasonably

capable of being associated with or could reasonably be linked, directly or indirectly, with a particular consumer or household and is

included under a new category of personal information, “sensitive personal information,” which is offered greater protection.

The CCPA and numerous other comprehensive privacy laws that have passed or are being considered in other states, as well as at the federal

and local levels, exempt PHI that is subject to HIPAA;

and others exempt covered entities and business associates subject to HIPAA altogether,

further complicating compliance efforts, and increasing legal risk and compliance costs for us and the third parties upon whom we rely.

Additionally, our use of artificial intelligence, or AI, and machine

learning may be subject to laws and evolving regulations regarding the use of AI and machine learning, controlling for data bias, and

antidiscrimination.

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

Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance

efforts, and can result in investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions

on data processing.

and Reimbursement

the United States and markets in other countries, patients generally rely on third-party payors to reimburse all or part of the costs

associated with their treatment.

Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid,

and commercial payors is critical to new product acceptance.

Our ability to successfully commercialize our product candidates will depend

in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government

health administration authorities, private health insurers and other organizations.

Even if coverage is provided, the approved reimbursement

amount may not be high enough to allow it to establish or maintain pricing sufficient to realize a sufficient return on its investment.

Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications

they will pay for and establish reimbursement levels.

uncertainty exists as to the coverage and reimbursement status of any pharmaceutical or biological product for which we obtain regulatory

Sales of any product, if approved, depend, in part, on the extent to which such product will be covered by third-party payors,

such as federal, state, and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the

level of reimbursement, if any, for such product by third-party payors.

Decisions regarding whether to cover any of our product candidates,

if approved, the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis.

Further, no uniform policy

for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor.

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also

have their own methods and approval process apart from Medicare determinations.

a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and

clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement

will be applied consistently or obtained in the first instance.

Factors payors consider in determining reimbursement are based on whether

the product is:

● a covered benefit under its health plan;

● safe, effective and medically necessary;

● cost-effective;

● neither experimental nor investigational.

payors are increasingly challenging the prices charged for medical products and services, examining the medical necessity and reviewing

the cost effectiveness of pharmaceutical or biological products, medical devices and medical services, in addition to questioning safety

and efficacy.

Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with

existing controls and measures, could further limit sales of any product that receives approval.

Decreases in third-party reimbursement

for any product or a decision by a third-party not to cover a product could reduce physician usage and patient demand for the product.

products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult

because of the higher prices often associated with such drugs.

Additionally, separate reimbursement for the product itself or the treatment

or procedure in which the product is used may not be available, which may impact physician utilization.

In addition, companion diagnostic

tests require coverage and reimbursement separate and apart from the coverage and reimbursement for their companion pharmaceutical or

biological products.

Similar challenges to obtaining coverage and reimbursement, applicable to pharmaceutical or biological products,

will apply to companion diagnostics.

addition, the U.S.

government, state legislatures and foreign governments have continued implementing cost-containment programs, including

price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products.

Adoption of price controls

and cost containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could

further limit our net revenue and results.

We may need to conduct expensive clinical studies to demonstrate the comparative cost-effectiveness

of our products.

The product candidates that we develop may not be considered cost-effective and thus may not be covered or sufficiently

It is time consuming and expensive for us to seek coverage and reimbursement from third-party payors, as each payor will

make its own determination as to whether to cover a product and at what level of reimbursement.

Thus, one payor’s decision to provide

coverage and adequate reimbursement for a product does not assure that another payor will provide coverage or that the reimbursement

levels will be adequate.

Moreover, a payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement

rate will be approved.

Reimbursement may not be available or sufficient to allow us to sell our products on a competitive and profitable

the United States and foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding

the healthcare system that could prevent or delay marketing approval of our investigational medicines, restrict or regulate post-approval

activities and affect our ability to profitably sell any approved products.

The ACA, for example, contains provisions that subject biological

products to potential competition by lower-cost biosimilars and may reduce the profitability of drug products through increased rebates

for drugs reimbursed by Medicaid programs, extension of Medicaid rebates to Medicaid managed care plans, mandatory discounts for certain

Medicare Part D beneficiaries and, annual fees based on pharmaceutical companies’ share of sales to federal health care programs.

Current laws, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria

and in additional downward pressure on the price for any approved products.

the United States, it is unclear whether the ACA will be overturned or further amended.

We cannot predict what effect further changes

to the ACA would have on our business.

Additionally, other federal health reform measures have been proposed and adopted in the United

States since the ACA was enacted, including the Budget Control Act of 2011, which includes provisions to reduce the federal deficit.

Budget Control Act, as amended, resulted in the imposition of 2% reductions in Medicare payments to providers, which began in April 2013

and will remain in effect through 2031 unless additional Congressional action is taken.

In 2021, President Biden signed the American Rescue

Plan Act of 2021 into law, which eliminated the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer

price, for single source and innovator multiple source drugs, beginning in 2024.

These laws and regulations may result in additional reductions

in Medicare and other healthcare funding and otherwise affect the prices we may obtain for any of our product candidates for which we

may obtain regulatory approval or the frequency with which any such product candidate is prescribed or used.

August 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law.

The IRA includes several provisions including provisions that

create a $2,000 out-of-pocket cap for Medicare Part D beneficiaries, impose new manufacturer financial liability on all drugs in Medicare

Part D, allow the U.S.

government to negotiate Medicare Part B and Part D pricing for certain high-cost drugs and biologics without generic

or biosimilar competition, require companies to pay rebates to Medicare for drug prices that increase faster than inflation and delay

the rebate rule that would require pass through of pharmacy benefit manager rebates to beneficiaries.

The effect of IRA on our business

and the healthcare industry in general is not yet known.

there has been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which

have resulted in several Congressional inquiries and proposed bills designed to, among other things, bring more transparency to product

pricing, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies

for products.

In addition, the federal government, state legislatures, and foreign governments have shown significant interest in implementing

cost containment programs, including price-controls and price transparency, restrictions on reimbursement, and requirements for substitution

of generic products for branded prescription drugs to limit the growth of government paid health care costs.

For example, the federal

government has passed legislation requiring pharmaceutical manufacturers to provide rebates and discounts to certain entities and governmental

payors to participate in federal healthcare programs.

The IRA provides CMS

with significant new authorities intended to curb drug costs and to encourage market competition.

For the first time, CMS will be able

to directly negotiate prescription drug prices and to cap out-of-pocket costs.

Each year, CMS will select and negotiate a preset number

of high-spend drugs and biologics that are covered under Medicare Part B and Part D that do not have generic or biosimilar competition.

On August 29, 2023, HHS announced the list of the first ten drugs subject to price negotiations.

These price negotiations occurred in

In January 2025, CMS announced a list of 15 additional Medicare Part D drugs that will be subject to price negotiations.

also provides a new “inflation rebate” covering Medicare patients that took effect in 2023 and is intended to counter certain

price increases in prescriptions drugs.

The inflation rebate provision requires drug manufacturers to pay a rebate to the federal government

if the price for a drug or biologic under Medicare Part B and Part D increases faster than the rate of inflation.

To support biosimilar

competition, beginning in October 2022, qualifying biosimilars may receive a Medicare Part B payment increase for a period of five years.

Separately, if a biologic drug for which no biosimilar exists delays a biosimilar’s market entry beyond two years, CMS will be authorized

to subject the biologics manufacturer to price negotiations intended to ensure fair competition.

Notwithstanding these provisions, the

IRA’s impact on commercialization and competition remains largely uncertain.

addition, net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private

payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices

than in the United States.

Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts

from list prices and are challenging the prices charged for medical products.

We cannot be sure that reimbursement will be available for

any product candidate that we may commercialize and, if reimbursement is available, the level of reimbursement.

In addition, many pharmaceutical

manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price, and best price.

Penalties may apply in some cases when such metrics are not submitted accurately and timely.

Further, these prices for drugs may be reduced

by mandatory discounts or rebates required by government healthcare programs.

in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed.

The requirements governing

drug pricing vary widely from country to country.

For example, the EU provides options for its member states to restrict the range of

medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products

for human use.

To obtain reimbursement or pricing approval, some of these countries may require

the completion of clinical trials that compare the cost effectiveness of a particular product candidate to currently available therapies.

A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls

on the profitability of the company placing the medicinal product on the market.

There can be no assurance that any country that has price

controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any

of our product candidates.

Historically, products launched in the EU do not follow price structures of the United States and generally

prices tend to be significantly lower.

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

There is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving

quality or expanding access.

In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been

significantly affected by federal and state initiatives, including those designed to limit the pricing, coverage, and reimbursement of

pharmaceutical and biopharmaceutical products, especially under government-funded health care programs, and increased governmental control

of drug pricing.

ACA, which was enacted in March 2010, substantially changed the way healthcare is financed by both governmental and private insurers in

the United States, and significantly affected the pharmaceutical industry.

The ACA contains a number of provisions of particular import

to the pharmaceutical and biotechnology industries, including, but not limited to, those governing enrollment in federal healthcare programs,

a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled,

infused, instilled, implanted or injected, and annual fees based on pharmaceutical companies’ share of sales to federal health care

Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and we expect there

will be additional challenges and amendments to the ACA in the future.

For example, the IRA, among other things, extends enhanced subsidies

for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

The IRA also eliminates the “donut

hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and

creating a new manufacturer discount program.

legislative changes have been proposed and adopted since the ACA was enacted, including automatic aggregate reductions of Medicare payments

to providers of on average 2% per fiscal year as part of the federal budget sequestration under the Budget Control Act of 2011.

reductions went into effect in April 2013 and, due to subsequent legislative amendments, will remain in effect until 2032 unless additional

action is taken by Congress.

In addition, the Bipartisan Budget Act of 2018, among other things, amended the Medicare Act (as amended

by the ACA) to increase the point-of-sale discounts that manufacturers must agree to offer under the Medicare Part D coverage discount

program from 50% to 70% off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as

a condition for the manufacturer’s outpatient drugs being covered under Medicare Part D.

there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products,

which has resulted in several Congressional inquiries and proposed and enacted federal and state measures designed to, among other things,

reduce the cost of prescription drugs, bring more transparency to product pricing, review the relationship between pricing and manufacturer

patient programs, and reform government program reimbursement methodologies for drug products.

For example, in May 2019, CMS adopted a

final rule allowing Medicare Advantage Plans the option to use step therapy for Part B drugs, permitting Medicare Part D plans to apply

certain utilization controls to new starts of five of the six protected class drugs, and requiring the Explanation of Benefits for Part

D beneficiaries to disclose drug price increases and lower cost therapeutic alternatives, which went into effect on January 1, 2021.

May 2025, the Trump Administration renewed the idea of international reference pricing through an executive order entitled “Delivering

Most-Favored-Nation Prescription Drug Pricing to American Patients,” which, among other things, directs the HHS and other agencies

to communicate most-favored-nation price targets to pharmaceutical manufacturers to bring prices for U.S.

patients in line with comparably

developed nations and to facilitate direct-to-consumer purchasing programs.

The HHS subsequently issued guidance indicating the MFN target

price will be the lowest price paid in an Organization for Economic Co-operation and Development country with a gross domestic product

(“GDP”) per capita of at least 60% of the U.S.

GDP per capital.

In addition, in December 2025, CMS proposed new drug payment

models to lower drug prices for Medicare beneficiaries;

under the models, CMS would explore potential adjustments to Medicare drug inflation

rebate calculations by comparison to international drug pricing information.

It is currently unclear whether and to what extent these

measures will be implemented and what impact any such implementation would have on our business.

Notwithstanding

the IRA, continued legislative and enforcement interest exists in the United States with respect to specialty drug pricing practices.

Specifically, we expect government authorities to continue pushing for transparency to drug pricing, reducing the cost of prescription

drugs under Medicare, reviewing the relationship between pricing and manufacturer patient programs, and reforming government program reimbursement

methodologies for drugs.

Individual states in the United States have also become increasingly active in passing legislation and implementing

regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts,

restrictions on certain drug access and marketing cost disclosure and transparency measures, and designed to encourage importation from

other countries and bulk purchasing.

Legally mandated price controls on payment amounts by third-party payors or other restrictions could

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

In addition, 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.

This could reduce the ultimate demand for its drugs or put pressure on its drug

pricing, which could negatively affect our business, financial condition, results of operations and prospects.

Other Government Regulation Outside

of the United States

addition to regulations in the United States, we are subject to a variety of regulations in other jurisdictions governing, among other

things, research and development, clinical trials, testing, manufacturing, safety, efficacy, quality control, labeling, packaging, storage,

record keeping, distribution, reporting, export and import, advertising, marketing and other promotional practices involving biological

products as well as authorization, approval as well as post-approval monitoring and reporting of our products.

Because biologically sourced

raw materials are subject to unique contamination risks, their use may be restricted in some countries.

or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior

to the commencement of clinical trials or marketing of the product in those countries.

Certain countries outside of the United States

have a similar process that requires the submission of a clinical trial application much like the IND prior to the commencement of human

clinical trials.

requirements and process governing the conduct of clinical trials, including requirements to conduct additional clinical trials, product

licensing, safety reporting, post-authorization requirements, marketing and promotion, interactions with healthcare professionals, pricing

and reimbursement may vary widely from country to country.

No action can be taken to market any product in a country until an appropriate

approval application has been approved by the regulatory authorities in that country.

The current approval process varies from country

to country, and the time spent in gaining approval varies from that required for FDA approval.

In certain countries, the sales price of

a product must also be approved.

The pricing review period often begins after market approval is granted.

Even if a product is approved

by a regulatory authority, satisfactory prices may not be approved for such product, which would make launch of such products commercially

unfeasible in such countries.

Regulation in the European Union

European Data Laws

processing of personal data, including health-related personal data in the European Economic Area (“EEA”) is mainly governed

by the provisions of the European General Data Protection Regulation (EU) 2016/679 (“GDPR”), and related data protection laws

in individual EEA countries.

In the United Kingdom (“UK”), the processing of personal data is mainly governed by the GDPR

as incorporated into UK law pursuant to the European Union (Withdrawal) Act 2018 (the “UK GDPR”).

The GDPR and UK GDPR impose

a number of strict obligations and requirements for the processing, including collecting, analyzing and transferring, of personal data

of individuals in the EEA or in the UK, in particular with respect to health data from clinical trials and adverse event reporting.

GDPR and UK GDPR include requirements relating to the legal basis of the processing (such as consent of the individuals to whom the personal

data relates), the information provided to the individuals prior to processing their personal data, the personal data breaches which may

have to be notified to the national data protection authorities and data subjects, the measures to be taken when engaging processors,

and obligations relating to the security and confidentiality of the personal data.

EEA countries may also impose additional requirements

in relation to the processing of health, genetic and biometric data through their national legislation.

addition, the GDPR imposes specific restrictions on the transfer of personal data to countries outside of the EEA that are not considered

by the European Commission (“EC”) to provide an adequate level of data protection.

Appropriate safeguards are required to

enable such transfers.

Among the appropriate safeguards that can be used, the data exporter may use the standard contractual clauses (“SCCs”).

When relying on the appropriate safeguards, data exporters, with the assistance of the data importers, are also required to conduct a

transfer risk assessment to verify if anything in the law and/or practices of the third country may impinge on the effectiveness of the

safeguards in the context of the transfer at stake and, if so, to identify and adopt supplementary measures that are necessary to bring

the level of protection of the data transferred to the EU standard of essential equivalence.

Where no supplementary measure is suitable,

the data exporter should avoid, suspend or terminate the transfer.

With regard to the transfer of data from the EEA to the United States,

on July 10, 2023, the EC adopted its adequacy decision for the EU-US Data Privacy Framework.

On the basis of the new adequacy decision,

personal data can flow from the EEA to U.S.

companies participating in the framework.

regard to the transfer of data from the EEA to the UK, based on the EC’s adequacy decision of June 28, 2021 and subsequent renewals, personal

data may continue to flow freely from the EEA to the UK on the basis that the UK is deemed to provide an adequate level of data protection

until December 27, 2031.

The adequacy decisions will automatically expire unless renewed.

respect to transfers from the UK to other countries, these transfers are also subject to specific transfer rules under the UK regime.

These UK international transfer rules broadly mirror the EU GDPR rules.

February 2, 2022, the UK Secretary of State laid before the UK Parliament the international data transfer agreement (“IDTA”)

and the international data transfer addendum to the EC’s standard contractual clauses for international data transfers (“UK

Addendum”) and a document setting out transitional provisions.

The IDTA and UK Addendum came into force on March 21, 2022 and are

the primary UK-approved mechanisms for putting in place appropriate safeguards for UK restricted transfers, subject to transitional arrangements

for legacy SCCs.

Regarding transfers from the UK to the EEA, the UK Information Commissioner’s Office (“ICO”) guidance

indicates that organizations do not need new arrangements.

With regard to the transfer of personal data from the UK to the United States,

the UK government has adopted an adequacy decision for the UK Extension to the EU-US Data Privacy Framework, the UK-US Data Bridge, which

came into force on October 12, 2023.

The UK-US Data Bridge recognizes the United States as offering an adequate level of data protection

where the recipient is a U.S.

organization certified to the EU-US Data Privacy Framework and participating in the UK Extension to the

EU-US Data Privacy Framework.

to comply with the requirements of the GDPR or UK GDPR and the related national data protection laws of the EEA countries may result in

significant monetary fines for noncompliance of up to €20 million or £17.5 million (as applicable), 4% of the total worldwide

annual turnover (for higher-tier infringements).

This is enforced by ICO and is entirely separate from fines under EU GDPR.

violations of national laws can trigger additional, administrative penalties, investigations, corrective orders, temporary or definitive

bans, and, in some jurisdictions, a number of criminal offenses for organizations and, in certain cases, their directors and officers,

as well as civil liability claims from individuals whose personal data was processed.

Marketing Authorization

In the EEA, after completion of all required clinical testing, pharmaceutical

products may only be placed on the market after obtaining a marketing authorization (“MA”).

To obtain an MA of a drug under

EU regulatory systems, an applicant can submit an MAA through, amongst others, a centralized or decentralized procedure.

protection authorities from the different EEA countries may still implement certain variations, enforce the GDPR and national data protection

laws differently, and introduce additional national regulations and guidelines, which adds to the complexity of processing personal data

To be used or sold in the UK, a drug must have an effective MA granted

by the MHRA under the Human Medicines Regulations 2012 (SI 2012/1916), as amended.

MA applications are submitted electronically via the

MHRA Submissions Portal.

Under the MHRA’s national assessment procedure, the MHRA generally aims to reach a decision within 210

“clock-on” days, excluding any “clock-stops” while the applicant prepares responses to MHRA questions.

August 30, 2023, the MHRA published detailed guidance on its recently announced new International Recognition Procedure (“IRP”)

The IRP applies since January 1, 2024, and replaces existing EU reliance procedures to apply for authorizations from seven international

regulators (e.g.

Health Canada, Swiss Medic, FDA, EMA, among others).

The IRP allows medicinal products approved in other jurisdictions

that meet certain criteria to undergo a fast-tracked MHRA review to obtain and/or update a MA in the UK.

Applicants can submit initial

MAAs to the IRP but the procedure can also be used throughout the lifecycle of a product for post-authorization procedures including line

extensions, variations and renewals.

Authorization Procedure

centralized procedure provides for the grant of a single MA that is issued by the EC following the scientific assessment of the application

by the EMA that is valid for all EU member states as well as in the three additional EEA member states (Norway, Iceland, and Liechtenstein).

The centralized procedure is compulsory for specific medicinal products, including for medicines developed by means of certain biotechnological

processes, products designated as orphan medicinal products, advanced therapy medicinal products (gene therapy, somatic cell therapy,

or tissue engineered medicines) and medicinal products with a new active substance indicated for the treatment of certain diseases (HIV/AIDS,

cancer, neurodegenerative disorders, diabetes, auto-immune diseases and other immune dysfunctions, and viral diseases).

For medicinal

products containing a new active substance not yet authorized in the EEA before May 20, 2004 and indicated for the treatment of other

diseases, medicinal products that constitute significant therapeutic, scientific or technical innovations or for which the grant of a

MA through the centralized procedure would be in the interest of public health at EU level, an applicant may voluntarily submit an application

for a MA through the centralized procedure.

Under the centralized procedure, the Committee for Medicinal Products

for Human Use (“CHMP”) is responsible for conducting the initial assessment of a drug.

The CHMP is also responsible for several

post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing MA.

Under the centralized

procedure, the timeframe for the evaluation of an MAA by the EMA’s CHMP is, in principle, 210 days from receipt of a valid MAA.

However, this timeline excludes clock stops, when additional written or oral information is to be provided by the applicant in response

to questions asked by the CHMP, so the overall process typically takes a year or more, unless the application is eligible for an accelerated

Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a

major public health interest, particularly from the point of view of therapeutic innovation.

Upon request, the CHMP can reduce the time

frame to 150 days if the applicant provides sufficient justification for an accelerated assessment.

The CHMP will provide a positive opinion

regarding the application only if it meets certain quality, safety and efficacy requirements.

This opinion is then transmitted to the

EC, which has the ultimate authority for granting MA within 67 days after receipt of the CHMP opinion.

Decentralized

Authorization Procedure

that fall outside the mandatory scope of the centralized procedure have three routes to authorization:

(i) they can be authorized under

the centralized procedure if they concern a significant therapeutic, scientific or technical innovation, or if their authorization would

be in the interest of public health;

(ii) they can be authorized under a decentralized procedure where an applicant applies for simultaneous

authorization in more than one EU member state;

or (iii) they can be authorized in an EU member state in accordance with that state’s

national procedures and then be authorized in other EU countries by a procedure whereby the countries concerned agree to recognize the

validity of the original, national MA (mutual recognition procedure).

The decentralized procedure permits companies to file identical MAAs

for a medicinal product to the competent authorities in various EU member states simultaneously if such medicinal product has not received

marketing approval in any EU member state before.

This procedure is available for pharmaceutical products not falling within the mandatory

scope of the centralized procedure.

The competent authority of a single EU member state, the reference member state, is appointed to review

the application and provide an assessment report.

The competent authorities of the other EU member states, the concerned member states,

are subsequently required to grant a MA for their territories on the basis of this assessment.

The only exception to this is where the

competent authority of an EU member state considers that there are concerns of potential serious risk to public health, the disputed points

are subject to a dispute resolution mechanism and may eventually be referred to the EC, whose decision is binding for all EU member states.

Management Plan

new MAAs must include a Risk Management Plan (“RMP”) describing the risk management system that the company will put in place

and documenting measures to prevent or minimize the risks associated with the product.

RMPs are continually modified and updated throughout

the lifetime of the medicine as new information becomes available.

An updated RMP must be submitted:

(i) at the request of EMA or a national

competent authority, or (ii) whenever the risk-management system is modified, especially as the result of new information being received

that may lead to a significant change to the benefit-risk profile or as a result of an important pharmacovigilance or risk-minimization

milestone being reached.

The regulatory authorities may also impose specific obligations as a condition of the MA.

Since October 20, 2023,

all RMPs for centrally authorized products are published by the EMA, subject only to limited redactions.

Validity Period

have an initial duration of five years.

After these five years, the authorization may subsequently be renewed on the basis of a reevaluation

of the risk-benefit balance.

Once renewed, the MA is valid for an unlimited period unless the EC or the national competent authority decides,

on justified grounds relating to pharmacovigilance, to proceed with only one additional five-year renewal.

Applications for renewal must

be made to the EMA at least nine months before the five-year period expires.

authorization which is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market

of the authorizing member state within three years after authorization ceases to be valid.

the UK, the period of three years during which the drug has not been marketed in Great Britain will be restarted from the date of conversion

to a Great Britain MA.

Following Windsor Framework changes, which became effective January 1, 2025, European Commission Union authorizations

are no longer valid in Northern Ireland and centrally authorized products are instead authorized by the MHRA under UK-wide marketing authorizations;

existing licenses for product licensed by the MHRA that covers Great Britain only become geographically valid UK-wide while retaining

their license number/prefix.

the other hand, for the EU, in the case the drug has been marketed in the UK, the placing on the UK market before the end of the period

starting when the UK left the EU on January 31, 2020 and ending on December 31, 2020 (the “Brexit Transition Period”) will

be taken into account.

If, after the end of the Brexit Transition Period, the drug is not placed on any other market of the remaining

member states of the EU, the three year period will start running from the last date the drug was placed on the UK market before the end

of the Brexit Transition Period.

Therapy Medicinal Products

the EU, medicinal products, including advanced therapy medicinal products (“ATMPs”) are subject to extensive pre-and post-market

regulation by regulatory authorities at both the EU and national levels.

ATMPs comprise gene therapy products, somatic cell therapy products

and tissue engineered products, which are genes, cells or tissues that have undergone substantial manipulation and that are administered

to human beings in order to cure, diagnose or prevent diseases or regenerate, repair or replace a human tissue.

Pursuant to Regulation

(EC) No 1394/2007, the Committee for Advanced Therapies (“CAT”) is responsible in conjunction

with the CHMP for the evaluation of ATMPs.

The CHMP and CAT are also responsible for providing guidelines on ATMPs.

These guidelines provide

additional guidance on the factors that the EMA will consider in relation to the development and evaluation of ATMPs and include, among

other things, the preclinical studies required to characterize ATMPs.

Although such guidelines are not legally binding, compliance with

them is often necessary to gain and maintain approval for product candidates.

addition to the mandatory RMP, the holder of a MA for an ATMP must put in place and maintain a system to ensure that each individual product

and its starting and raw materials, including all substances coming into contact with the cells or tissues it may contain, can be traced

through the sourcing, manufacturing, packaging, storage, transport and delivery to the relevant healthcare institution where the product

and Market Exclusivity

in the United States, it may be possible to obtain a period of market and / or data exclusivity in the EU that would have the effect of

postponing the entry into the marketplace of a competitor’s generic, hybrid or biosimilar product (even if the pharmaceutical product

has already received a MA) and prohibiting another applicant from relying on the MA holder’s pharmacological, toxicological and

clinical data in support of another MA for the purposes of submitting an application, obtaining MA or placing the product on the market.

Innovative medicinal products, referred to as New Chemical Entities (“NCEs”) approved in the EU qualify for eight years of

data exclusivity and 10 years of marketing exclusivity.

additional non-cumulative one-year period of marketing exclusivity is possible if during the data exclusivity period (the first eight

years of the 10-year marketing exclusivity period), the MA holder obtains an authorization for one or more new therapeutic indications

that are deemed to bring a significant clinical benefit compared to existing therapies.

data exclusivity period begins on the date of the product’s first MA in the EU.

After eight years, a generic product application

may be submitted, and generic companies may rely on the MA holder’s data.

However, a generic product cannot launch until two years

later (or a total of 10 years after the first MA in the EU of the innovator product), or three years later (or a total of 11 years after

the first MA in the EU of the innovator product) if the MA holder obtains MA for a new indication with significant clinical benefit within

the eight-year data exclusivity period.

Additionally, another noncumulative one-year period of data exclusivity can be added to the eight

years of data exclusivity where an application is made for a new indication for a well-established substance, provided that significant

pre-clinical or clinical studies were carried out in relation to the new indication.

Another year of data exclusivity may be added to

the eight years, where a change of classification of a pharmaceutical product has been authorized on the basis of significant pre-trial

tests or clinical trials (when examining an application by another applicant for or holder of market authorization for a change of classification

of the same substance the competent authority will not refer to the results of those tests or trials for one year after the initial change

was authorized).

may not be granted data exclusivity since there is no guarantee that a product will be considered by the EU’s regulatory authorities

to include a NCE.

Even if a compound is considered to be a NCE and the MA applicant is able to gain the prescribed period of data exclusivity,

another company nevertheless could also market another version of the medicinal product if such company can complete a full MAA with their

own complete database of pharmaceutical tests, preclinical studies and clinical trials and obtain MA of its product.

April 26, 2023, the EC submitted a proposal for the reform of the European pharmaceutical legislation and negotiations are still ongoing.

The timing for finalization of these negotiations and entry into force are unclear.

current drafts envisage:

● a shortening of the periods of data exclusivity from eight to six years (with transferrable vouchers for

an additional year of market protection as an incentive for the development of new antibiotics),

● earlier regulatory guidance and extension of market exclusivity for orphan medicines (depending on certain

● four-year data exclusivity for additional indications of existing products, and

● rules governing the availability of products (including shortage prevention plans and some supply obligations

for manufacturers).

Designation and Exclusivity

criteria for designating an orphan medicinal product in the EU are similar in principle to those in the United States.

The EMA grants

orphan drug designation if the medicinal product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically

debilitating condition affecting no more than five in 10,000 persons in the EU (prevalence criterion).

In addition, orphan drug designation

can be granted if, for economic reasons, the medicinal product would be unlikely to be developed without incentives and if there is no

other satisfactory method approved in the EU of diagnosing, preventing, or treating the condition, or if such a method exists, the proposed

medicinal product is a significant benefit to patients affected by the condition.

An application for orphan drug designation (which is

not a MA, as not all orphan-designated medicines reach the authorization application stage) must be submitted first before an application

for MA of the medicinal product is submitted.

The applicant will receive a fee reduction for the MAA if the orphan drug designation has

been granted, but not if the designation is still pending at the time the MA is submitted, and sponsors must submit an annual report to

EMA summarizing the status of development of the medicine.

Orphan drug designation does not convey any advantage in, or shorten the duration

of, the regulatory review and approval process.

Designated orphan medicines are eligible for conditional MA.

EMA’s Committee for Orphan Medicinal Products (“COMP”) reassesses the orphan drug designation of a product in parallel

with the review for a MA;

for a product to benefit from market exclusivity it must maintain its orphan drug designation at the time of

MA review by the EMA and approval by the EC.

Additionally, any MA granted for an orphan medicinal product must only cover the therapeutic

indication(s) that are covered by the orphan drug designation.

Upon the grant of a MA, orphan drug designation provides up to ten years

of market exclusivity in the orphan indication.

the 10-year period of market exclusivity, with a limited number of exceptions, the regulatory authorities of the EU member states and

the EMA may not accept applications for MA, accept an application to extend an existing MA or grant a MA for other similar medicinal products

for the same therapeutic indication.

A similar medicinal product is defined as a medicinal product containing a similar active substance

or substances as contained in a currently authorized orphan medicinal product, and which is intended for the same therapeutic indication.

An orphan medicinal product can also obtain an additional two years of market exclusivity for an orphan-designated condition when the

results of specific studies are reflected in the Summary of Product Characteristics (“SmPC”) addressing the pediatric population

and completed in accordance with a fully compliant Pediatric Investigation Plan (“PIP”).

No extension to any supplementary

protection certificate can be granted on the basis of pediatric studies for orphan indications.

10-year market exclusivity may be reduced to six years if, at the end of the fifth year, it is established that the product no longer

meets the criteria for orphan designation, i.e.

the condition prevalence or financial returns criteria under Article 3 of Regulation (EC)

141/2000 on orphan medicinal products.

When the period of orphan market exclusivity for an indication ends, the orphan drug designation

for that indication expires as well.

Orphan exclusivity runs in parallel with normal rules on data exclusivity and market protection.

Additionally, a MA may be granted to a similar medicinal product (orphan or not) for the same or overlapping indication subject to certain

requirements.

the UK, following the post-Brexit transition period, a system for incentivizing the development of orphan medicines was introduced.

the requirements for orphan designation largely replicate the requirements in the EU and the benefit of market exclusivity has been retained.

Products with an orphan designation in the EU can be considered for an orphan MA in Great Britain, and marketing authorizations granted

for products that fulfil UK orphan criteria are valid UK-wide regardless of whether there is an EU orphan designation.

The MHRA will review

applications for orphan designation at the time of a MA, and will offer incentives, such as market exclusivity and full or partial refunds

for MA fees to encourage the development of medicines in rare diseases.

Separately, the MHRA has

stated that it is considering updating its licensing framework for orphan medicines, with a draft framework expected by spring 2026.

the EU, companies developing a new medicinal product are obligated to study their product in children and must therefore submit a PIP,

together with a request for agreement to the EMA.

The EMA issues a decision on the PIP based on an opinion of the EMA’s Pediatric

Companies must conduct pediatric clinical trials in accordance with the PIP approved by the EMA, unless a deferral (e.g.

enough information to demonstrate its effectiveness and safety in adults is available) or waiver (e.g.

because the relevant disease or

condition occurs only in adults) has been granted by the EMA.

The MAA for the medicinal product must include the results of all pediatric

clinical trials performed and details of all information collected in compliance with the approved PIP, unless a waiver or a deferral

has been granted, in which case the pediatric clinical trials may be completed at a later date.

Medicinal products that are granted a

MA on the basis of the pediatric clinical trials conducted in accordance with the approved PIP are eligible for a six month extension

of the protection under a supplementary protection certificate (if any is in effect at the time of approval) or, in the case of orphan

medicinal products, a two year extension of the orphan market exclusivity.

This pediatric reward is subject to specific conditions and

is not automatically available when data in compliance with the approved PIP are developed and submitted.

An approved PIP is also required

when a MA holder wants to add a new indication, medicinal form or route of administration for a medicine that is already authorized and

covered by intellectual property rights.

the UK, the MHRA has published guidance on the procedures for UK Pediatric Investigation Plans which, where possible, mirror the submission

format and requirements of the EU system.

From January 1, 2025, EU pediatric requirements are addressed via Windsor Framework categorization:

for Category 2 products, both UK and EU pediatric requirements apply, and an EU-agreed PIP must also be in place (unless waived).

March 2016, the EMA launched an initiative to facilitate development of product candidates in indications, often rare, for which few or

no therapies currently exist.

The Priority Medicines (“PRIME”) scheme is intended to encourage drug development in areas of

unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized

Products from small-and medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies

on the basis of compelling non-clinical data and tolerability data from initial clinical trials.

Many benefits accrue to sponsors of product

candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions

on clinical trial designs and other development program elements, and potentially accelerated MAA assessment once a dossier has been submitted.

Importantly, once a candidate medicine has been selected for the PRIME scheme, a dedicated contact point and rapporteur from the CHMP

or from CAT are appointed facilitating increased understanding of the product at EMA’s Committee level.

A kick-off meeting with

the CHMP/CAT rapporteur initiates these relationships and includes a team of multidisciplinary experts to provide guidance on the overall

development plan and regulatory strategy.

PRIME eligibility does not change the standards for product approval, and there is no assurance

that any such designation or eligibility will result in expedited review or approval.

Post-Approval

to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the

EMA, the EC and/or the competent regulatory authorities of the EU member states.

This oversight applies both before and after grant of

manufacturing licenses and MAs.

It includes control of compliance with EU good manufacturing practices rules, manufacturing authorizations,

pharmacovigilance rules and requirements governing advertising, promotion, sale, and distribution, recordkeeping, importing and exporting

of medicinal products.

by us or by any of our third-party partners, including suppliers, manufacturers and distributors to comply with EU laws and the related

national laws of individual EU member states governing the conduct of clinical trials, manufacturing approval, MA of medicinal products

and marketing of such products, both before and after grant of MA, statutory health insurance, bribery and anti-corruption or other applicable

regulatory requirements may result in administrative, civil or criminal penalties.

penalties could include delays or refusal to authorize the conduct of clinical trials or to grant MA, product withdrawals and recalls,

product seizures, suspension, withdrawal or variation of the MA, total or partial suspension of production, distribution, manufacturing

or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.

holder of a MA for a medicinal product must also comply with EU pharmacovigilance legislation and its related regulations and guidelines,

which entail many requirements for conducting pharmacovigilance, or the assessment and monitoring of the safety of medicinal products.

pharmacovigilance rules can impose on holders of MAs the obligation to conduct a labor intensive collection of data regarding the risks

and benefits of marketed medicinal products and to engage in ongoing assessments of those risks and benefits, including the possible requirement

to conduct additional clinical studies or post-authorization safety studies to obtain further information on a medicine’s safety,

or to measure the effectiveness of risk-management measures, which may be time consuming and expensive and could impact our profitability.

MA holders must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, who

is responsible for oversight of that system.

Key obligations include expedited reporting of suspected serious adverse reactions and submission

of Periodic Safety Update Reports (“PSURs”), in relation to medicinal products for which they hold MAs.

The EMA reviews PSURs

for medicinal products authorized through the centralized procedure.

If the EMA has concerns that the risk benefit profile of a product

has varied, it can adopt an opinion advising that the existing MA for the product be suspended, withdrawn or varied.

The agency can advise

that the MA holder be obliged to conduct post-authorization Phase IV safety studies.

If the EC agrees with the opinion, it can adopt a

decision varying the existing MA.

Failure by the MA holder to fulfill the obligations for which the EC’s decision provides can undermine

the ongoing validity of the MA.

generally, non-compliance with pharmacovigilance obligations can lead to the variation, suspension or withdrawal of the MA for the product

or imposition of financial penalties or other enforcement measures.

manufacturing process for pharmaceutical products in the EU is highly regulated and regulators may shut down manufacturing facilities

that they believe do not comply with regulations.

Manufacturing

requires a manufacturing authorization, and the manufacturing authorization holder must comply with various requirements set out in the

applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive 2003/94/EC (repealed by Directive 2017/1572 on

January 31, 2022), Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice (“GMP”).

These requirements include compliance with EU GMP standards when manufacturing pharmaceutical products and active pharmaceutical ingredients,

including the manufacture of active pharmaceutical ingredients outside of the EU with the intention to import the active pharmaceutical

ingredients into the EU.

Amendments or replacements of at least Directive 2001/83/EC and Regulation (EC) No 726/2004 are part of the reform

proposal for European pharmaceutical legislation.

Similarly, the distribution of pharmaceutical products into and within the EU is subject

to compliance with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for

distribution granted by the competent authorities of the EU member states.

The manufacturer or importer must have a qualified person who

is responsible for certifying that each batch of product has been manufactured in accordance with GMP, before releasing the product for

commercial distribution in the EU or for use in a clinical trial.

Manufacturing facilities are subject to periodic inspections by the

competent authorities for compliance with GMP.

October 27, 2025, the Council of the European Union approved a framework for compulsory licensing of crisis-relevant products (including

medicinal products) in crisis situations.

While the proposal focuses on voluntary agreements with intellectual property rights holders,

it includes rules on compulsory licensing as a measure of last resort upon activation / declaration of a crisis or emergency mode.

European Parliament has not yet voted on the proposal.

and Marketing Regulations

advertising and promotion of our products is also subject to EU laws concerning promotion of medicinal products, interactions with physicians,

misleading and comparative advertising and unfair commercial practices.

In addition, other national legislation of individual EU member

states may apply to the advertising and promotion of medicinal products and may differ from one country to another.

These laws require

that promotional materials and advertising in relation to medicinal products comply with the product’s SmPC as approved by the competent

regulatory authorities.

The SmPC is the document that provides information to physicians concerning the safe and effective use of the

medicinal product.

It forms an intrinsic and integral part of the MA granted for the medicinal product.

Promotion of a medicinal product

that does not comply with the SmPC is considered to constitute off-label promotion.

All advertising and promotional activities for the

product must be consistent with the approved SmPC and therefore all off-label promotion is prohibited.

Direct-to-consumer advertising

of prescription-only medicines is also prohibited in the EU.

Violations of the rules governing the promotion of medicinal products in

the EU could be penalized by administrative measures, fines and imprisonment.

These laws may further limit or restrict the advertising

and promotion of our products to the general public and may also impose limitations on its promotional activities with healthcare professionals.

EU regulation with regards to dispensing, sale and purchase of medicines has generally been preserved in the UK following Brexit, through

the Human Medicines Regulations.

However, organizations wishing to sell medicines online need to register with the MHRA.

Following Brexit,

the requirements to display the common logo no longer apply to UK-based online sellers, except for those established in Northern Ireland.

Anti-Corruption

the EU, interactions between pharmaceutical companies and physicians are also governed by strict laws, regulations, industry self-regulation

codes of conduct and physicians’ codes of professional conduct both at EU level and in the individual EU member states.

The provision

of benefits or advantages to physicians to induce or encourage the prescription, recommendation, endorsement, purchase, supply, order

or use of medicinal products is prohibited in the EU.

The provision of benefits or advantages to physicians is also governed by the national

anti-bribery laws of the EU member states.

Violation of these laws could result in substantial fines and imprisonment.

made to physicians in certain EU member states also must be publicly disclosed.

Moreover, agreements with physicians must often be the

subject of prior notification and approval by the physician’s employer, his/her regulatory professional organization, and/or the

competent authorities of the individual EU member states.

These requirements are provided in the national laws, industry codes, or professional

codes of conduct, applicable in the individual EU member states.

Failure to comply with these requirements could result in reputational

risk, public reprimands, administrative penalties, fines or imprisonment.

In the UK, the pharmaceutical sector is recognized as being

particularly vulnerable to corrupt practices, some of which fall within the scope of the Bribery Act 2010.

Due to the Bribery Act 2010’s

far-reaching territorial application, the potential penalized act does not have to occur in the UK to become within its scope.

act or omission does not take place in the UK, but the person’s act or omission would constitute an offense if carried out there

and the person has a close connection with the UK, an offense will still have been committed.

The Bribery Act 2010 is comprised of four

offenses that cover (i) individuals, companies and partnerships that give, promise or offer bribes, (ii) individuals, companies and partnerships

that request, agree to receive or accept bribes,(iii) individuals, companies and partnerships that bribe foreign public officials and

(iv) companies and partnerships that fail to prevent persons acting on their behalf from paying bribes.

The penalties imposed under the

Bribery Act 2010 depend on the offence committed, harm and culpability and penalties range from unlimited fines to imprisonment for a

maximum term of ten years and in some cases both.

in the UK and Other Markets

UK formally left the EU on January 31, 2020 and EU laws now only apply to the UK in respect of Northern Ireland as laid out in the protocol

on Ireland and Northern Ireland and as amended by the Windsor Framework sets out a long-term set of arrangements for the supply of medicines

into Northern Ireland.

EU and the UK agreed on a trade and cooperation agreement (“TCA”), which includes provisions affecting the life sciences

sector (including on customs and tariffs).

There are some specific provisions concerning pharmaceuticals, including the mutual recognition

of GMP, inspections of manufacturing facilities for medicinal products and GMP issued documents.

The TCA does not, however, contain wholesale

mutual recognition of UK and EU pharmaceutical regulations and product standards.

UK government has adopted the Medicines and Medical Devices Act 2021 (the “MMDA”) to enable the UK’s regulatory frameworks

to be updated following the UK’s departure from the EU.

The MMDA introduces regulation-making, delegated powers covering the fields

of human medicines, clinical trials of human medicines, veterinary medicines and medical devices.

The MHRA has since been consulting on

future regulations for medicines and medical devices in the UK.

other countries outside of the EU, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct

of clinical trials, product licensing, pricing and reimbursement vary from country to country.

In all cases, again, the clinical trials

must be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin

in the Declaration of Helsinki.

we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical

trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Human Capital Resources

14 unchanged sentences

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What changed 10-K

Item 1. Business