What changed in this filing

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Item 1A. Risk Factors

2026-02-24 compared with 2025-02-25 · 592 added, 736 removed, 631 unchanged (68% of the section changed)

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We may not be able to continue to commercialize ARCALYST or be successful in commercializing any future products, potentially impairing the commercial potential for our current and future products to generate any revenue.

Since our commercial launch of ARCALYST, we have focused on establishing and expanding our internal capabilities, including but not limited to, sales, marketing, distribution, access and patient support services as well as contracting with third parties to perform certain services.

Since our commercial launch of ARCALYST, we have focused on establishing and expanding our sales, marketing, distribution, access and payor and patient support services capabilities as well as contracting with third parties to perform certain services.

Each aspect of commercialization on its own can be complex, expensive and time consuming, and, collectively, the required effort for coordination is intensive.

While we have realized revenues from such efforts, there is no guarantee that we will be able to maintain the trajectory of growth or significant and sustained revenues in the long-term.

While we have realized revenues from such efforts, there is no guarantee that we will be able to maintain the trajectory of growth or significant and sustained revenues in the future.

In addition, our continued commercialization of ARCALYST or successful commercialization of any of our current or future product candidates, if approved, could be materially adversely impacted by a number of foreseen and unforeseen factors, including:

● any delays in our ability to produce sufficient quantities of ARCALYST, or any of our future products, at an acceptable cost or quality, including such delays arising out of quality assurance concerns or changes in regulatory guidance, or those caused by our reliance on our third party manufacturers;

● any delays in our ability to produce sufficient quantities of ARCALYST, or any of our future products, at an acceptable cost or quality, including delays arising out of quality assurance concerns or changes in regulatory guidance, or those caused by our reliance on our third party manufacturers;

● our inability to recruit, train and retain adequate numbers of effective sales, marketing, access and payor and patient support personnel;

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● the lack of complementary products to be supported by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines;

● our inability to equip customer-facing personnel with effective materials, including medical and sales literature to help them educate physicians and other healthcare professionals regarding applicable diseases relevant to ARCALYST or any of our future products;

● an absence or reduction in strong scientific-based relationships to drive disease awareness and education;

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● our inability to provide acceptable evidence of safety and efficacy;

● our inability to enable our products to be viewed as the product of choice within any indications for which they are approved;

● the prevalence and severity of side effects associated with any future product;

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● the convenience and ease of administration of our products relative to alternative therapies, if any;

● alternative therapies that use the same or different mechanism of action for treating patients with recurrent pericarditis or other indications that our future products may treat;

● our inability or delay in gaining or maintaining reimbursement and broad patient access at a price that reflects the value of ARCALYST or any of our future products;

● our inability to address product labeling or product insert requirements, including any changes mandated by regulatory authorities after initial approval;

● limitations on the content or form of the consumer and/or prescriber-facing marketing materials that we may use;

● any delays in the ongoing technology transfer of the process for manufacturing ARCALYST drug substance;

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● publications of scientific literature, consensus papers and treatment guidelines unfavorable to the administration of our products and product candidates and/or the positioning of the class of drugs to which each of our products and product candidates belongs;

● our inability to develop or obtain and sustain sufficient operational functions and infrastructure to support our commercial activities;

● our inability to establish and maintain patent and trade secret protection or regulatory exclusivity for our products;

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We rely on a select network of third party specialty pharmacies to market and sell ARCALYST that may not meet our or our patients’ needs.

We rely on a select network of third party specialty pharmacies to distribute ARCALYST and expect to use a similar strategy for our current and future product candidates, if approved.

We rely on a select network of third party specialty pharmacies to distribute ARCALYST in the United States, which is the only country where it is currently approved for sale.

We expect to use a similar strategy to sell and distribute our current and future product candidates, if approved.

We rely on such specialty pharmacies to effectively distribute products in a timely manner, provide certain patient support services, manage prescription intake, collect accurate patient and inventory data and collect payments from payors.

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The successful commercialization of our current and future products, if any, will depend in part on the extent to which third party payors, including governmental authorities and private health insurers, provide funding, establish and maintain favorable coverage and pricing policies and set adequate reimbursement levels.

Our ability to continue to commercialize ARCALYST in its approved indications or any of our future products, if any, particularly in orphan or rare disease indications, will depend in part on the availability of favorable coverage, the adequacy of reimbursement (including affordability of patient cost-sharing obligations) for ARCALYST or the future product and alternative treatments from third party payors (e.g., governmental authorities, private health insurers and other organizations).

Our ability to continue to commercialize ARCALYST in its approved indications or our future products, if any, particularly in orphan or rare disease indications, will depend in part on the availability of favorable coverage and adequate reimbursement (including affordability of patient cost-sharing obligations) for ARCALYST or the future product and associated treatments from third party payors (e.g., governmental authorities, private health insurers and other organizations).

We currently enjoy largely favorable coverage and reimbursement from third party payors for ARCALYST in the approved recurrent pericarditis indication and seek to maintain such favorable coverage and reimbursement.

We cannot be certain we will continue to effectively execute our coverage and reimbursement strategy in the markets we pursue, which could limit the future commercial potential of ARCALYST in the approved recurrent pericarditis indication or any of our product candidates, if approved.

Governmental authorities, private health insurers and other third party payors have attempted to control costs through a number of efforts, including by delaying the time to reimbursement, by restricting the breadth of coverage, implementing utilization management controls such as requiring prior authorization, limiting the amount of reimbursement for particular products and increasing the proportion of the cost for which the patient is responsible.

There may be significant delays in obtaining reimbursement for newly approved products or product indications, coverage may be limited to a subset of the patient population for which the treatment is approved by the FDA or similar regulatory authorities outside the United States including health technology assessment bodies in the EU and United Kingdom, and reimbursement rates may vary according to the use of the product and the clinical setting in which it is used.

Governmental authorities, private health insurers and other third party payors have attempted to control costs through a number of efforts, including by delaying the time to reimbursement;

restricting the breadth of coverage;

implementing utilization management controls such as requiring prior authorization;

limiting the amount of reimbursement for a particular product;

restricting the prices that manufacturers may charge for their products and increasing the proportion of the cost for which the patient is responsible.

Additional future government action to control costs is likely.

There may be significant delays in obtaining reimbursement for newly approved products or product indications;

coverage may be limited to a subset of the patient population for which the treatment is approved by the FDA or by similar regulatory authorities outside the United States including health technology assessment bodies in the European Union (the “EU”) and the UK;

and reimbursement rates may vary according to the use of the product and the clinical setting in which it is used.

Coverage and reimbursement barriers by payors may materially impact the demand for, or the price at which we can sell, ARCALYST and any product candidate for which we obtain marketing approval, if any.

If coverage and reimbursement are not available, or available only at limited levels, or if such coverage will require patient out-of-pocket costs that are unacceptably high, our ability to successfully commercialize ARCALYST or any of the product candidates

for which we obtain marketing approval may be adversely affected.

If coverage and reimbursement are not available, or available at limited levels, or if such coverage will require patient out-of-pocket costs that are unacceptably high, our ability to successfully commercialize ARCALYST or any of the product candidates for which we obtain marketing approval may be adversely affected.

Moreover, any coverage or reimbursement that may be obtained may be decreased or eliminated in the future.

For example, in January 2023, one of the large private health insurers that currently covers ARCALYST placed ARCALYST on its exclusion list for the CAPS indication, which could create hurdles for new patients seeking coverage for their prescriptions in all indications.

In addition, obtaining and maintaining favorable coverage and adequate reimbursement may require us to offer pricing concessions to third party payors.

We may also be unable to adequately satisfy a third party payor’s value/benefit assessment on an ongoing basis.

It is possible that third party payors will select low-cost clinical comparators that serve as benchmarks for determining relative value, including biosimilars and lower costs brands with or without the same approved indication.

The result of such a change would be a more challenging value/benefit assessment and the potential for a worse relative outcome, including such payors refusing to provide coverage and reimbursement entirely, or finding the evidence not sufficiently compelling to support our desired pricing and reimbursement.

Similarly, payors may implement coverage criteria that further restrict the use of ARCALYST or any of our product candidates, if approved, beyond the approved label, which could adversely affect their commercial potential, including, for example, situations where a patient must be proven to not adequately respond to the lower-cost comparator before the payer will cover the use of ARCALYST or any of our product candidates, if approved.

We may be unable to sustain any favorable coverage and reimbursement on an ongoing basis.

Third party payors may also revisit their previously established coverage policies from time to time including their assessment of the relative value/benefit provided by a drug product compared to clinical alternatives, such as any competitive products with the same or similar indications and biosimilars.

It is possible that a third party payor may consider our products and product candidates, if approved, as substitutable and only be willing to cover the cost of the alternative product.

Even if we show improved efficacy, safety or improved convenience of administration with ARCALYST or any of our product candidates, if approved, pricing of competitive products may limit the amount we will be able to charge.

Third party payors often introduce more challenging price negotiation methodologies when competitors exist or enter into the market.

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

In some cases, when new competitor biosimilar products enter the market, there are mandatory price reductions for the innovator product.

In other cases, payors employ “therapeutic category” price referencing and seek to lower the reimbursement levels for all treatment in the respective therapeutic category.

Additionally, new competitor brand drugs can trigger therapeutic category reviews in the interest of modifying coverage and/or reimbursement levels.

The potential of third party payors to introduce more challenging price negotiation methodologies could have a negative impact on our ability to continue to commercialize ARCALYST or successfully commercialize any of our product candidates, if approved.

Third party payors may also employ challenging price negotiation tactics in the event of a proposed price increase of our current and future products.

See “ Risk Factors—Risks Related to Commercialization – It may be difficult for us to realize the benefit of increasing the price of certain of our commercialized products.

We may face significant challenges in satisfying and sustaining favorable coverage and reimbursement for ARCALYST or any of our product candidates, if approved as third-party payors conduct value/benefit assessments.

Payors may adopt stricter coverage criteria or select lower-cost clinical comparators, including biosimilars or competitive products (with the same or similar indications), as benchmarks for making value/benefit assessments.

These actions could require patients to use alternative therapies before coverage is granted, limit pricing flexibility or even result in the denial or revocation of reimbursement.

Even if we demonstrate improved efficacy, safety or convenience, competitive pricing and therapeutic category reviews may trigger aggressive pricing and coverage negotiations.

Payors may also consider our products substitutable and agree to only cover the cost of an alternative product, or may remove the product from their formulary.

In some cases, new competitors or biosimilars may trigger mandatory price cuts for the innovator product or broader price referencing aimed at lowering reimbursement rates for all treatments in the respective treatment category.

These dynamics could significantly reduce our ability to achieve our desired pricing, limit our commercial potential and/or prevent us from realizing an appropriate return on investment.

Ultimately, the evolving strategies of third-party payors to control costs and manage therapeutic categories could negatively impact our ability to continue commercializing ARCALYST or successfully launch any of our product candidates, if approved.

It may be difficult for us to realize the benefit of increasing the price of certain of our commercialized products.

We have and may continue to periodically increase the price of ARCALYST and may implement similar pricing practices for future products, if approved, and may be unable to realize commercial benefits from such price increases due to unfavorable actions that third party payors (including governmental authorities and private health insurers) may take in response.

Even if price increases lie below contractual price protection clauses, payors may request price concessions in exchange for covering our products or may opt to change coverage or reimbursement policies with respect to such products.

Even if price increases lie below contractual price protection clauses, payors may request

price concessions in exchange for covering our products or may opt to change coverage or reimbursement policies with respect to such products.

If we cannot successfully negotiate with such payors, we may be forced to provide significant price concessions or, if we fail to arrive at a satisfactory resolution, lose favorable coverage or reimbursement for patients served by such payor.

In such an event, patients may have difficulty obtaining access to, or affording, such products and we may see materially negative impacts on our business operations.

We are also required to provide discounts or rebates under government healthcare programs or to certain government and private purchases in order to obtain coverage under federal healthcare programs.

In addition, price increases that outpace inflation may also trigger additional rebate obligations, including under the Medicaid Drug Rebate Program.

In addition, the current presidential administration has taken and will likely continue to take action to limit or reduce the price of drugs and biologics.

The full scope and nature of such actions, and what biopharmaceutical companies must do, remains uncertain, but any future required compliance could impede our ability to implement price increases with certain payors and purchasers.

Any price concessions will reduce our overall revenue generation and may impair the benefit of any price increases we may take.

Price concessions that reduce our product revenue may require us to rely on potentially dilutive capital-raising efforts to fund our operations, which may impact the price of our ordinary shares.

Even comparatively

small discounts, if aggregated across payors, may cause materially lower revenue generation in the long-term, which may offset the increased revenue we hoped to realize through a price increase.

Further, granting price concessions to one or more payors may limit our ability to negotiate prices with other payors or in other territories.

Payors, including governmental payors, negotiate drug prices by reference to the prices we have set with other payors.

Should payors become aware of price concessions that we have granted, they may request similar concessions.

If enough payors request and receive price concessions, our ability to generate revenue may be materially impacted, harming our business, financial condition and results of operations.

Further, this may limit our ability to secure acceptable prices in potential new territories, which may materially limit our overall commercial growth.

A limitation on our ability to commercialize in new and existing territories may also reduce our access to the patient populations we seek to serve, harming our ability to deliver therapeutics to patients with unmet medical need.

In the event that we cannot successfully negotiate with payors requesting price concessions in connection with a price increase or otherwise, such payors may choose to not cover our current and future products at all or may impose onerous reimbursement policies that limit patient access.

Even comparatively small discounts, if aggregated across payors, may cause materially lower revenue generation in the long-term, which may offset the increased revenue we hoped to realize through a price increase.

In the event that we cannot successfully negotiate with payors requesting price concessions in connection with a price increase or otherwise, such payors may choose to end coverage or impose onerous reimbursement policies.

We cannot assure you that current payor coverage and reimbursement policies for ARCALYST will continue.

The loss of any payor, especially a large payor, or limitations on access to our drugs affecting a sizeable number of patients may materially harm our ability to generate revenue and execute on our commercial strategy.

Further, as a company targeting patients with significant unmet medical need, the loss of access to our products may materially harm our targeted patient populations who cannot source adequate alternative therapies.

We are also required to provide discounts or rebates under government healthcare programs or to certain government and private purchases in order to obtain coverage under federal healthcare programs.

In addition, price increases that outpace inflation may also trigger additional rebate obligations, including under the Medicaid Drug Rebate Program.

Some payors, including governmental payors, negotiate drug prices by reference to the prices we have set with other payors.

Granting price concessions to one or more payors (including government payors) may limit our ability to negotiate prices with other payors or in other territories.

Further, this may limit our ability to secure acceptable prices in potential new territories, which may materially limit our overall commercial growth.

The incidence and prevalence for target patient populations of our products or product candidates have not been established with precision.

If the market opportunities for our products and product candidates are smaller than we estimate, or if any approval that we obtain is based on a narrower definition of our targeted patient population, our revenue and ability to achieve profitability may be materially adversely affected.

If the market opportunities for our products and product candidates are smaller than we estimate, or if any approval that we obtain is based on a narrower definition of our targeted patient population, our revenue and ability to sustain profitability may be materially adversely affected.

The precise incidence and prevalence for all the conditions we aim to address with our programs are not known with specificity.

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and patients, pricing, access and reimbursement.

The number of addressable patients in the United States and other major markets outside of the United States may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business.

The number of addressable patients in the United States, the country where substantially all ARCALYST sales occur, and other major markets outside of the United States may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our products or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our results of operations and our business.

Further, even if we obtain significant market share for our product candidates, because the potential target populations are small for many of our approved and targeted indications, we may never achieve significant and sustained profitability.

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International reference pricing has the potential to impact price cut decisions in individual countries and the countries that reference the pricing of certain other individual countries.

Within the United States, the current presidential administration has sought and is likely to continue to seek to implement “most favored nation” pricing for drugs and biologics covered under government programs.

For example, proposed Medicare Part B and Part D pilot models that, if finalized as proposed, would replace existing inflation-based Medicare rebates with rebates determined on the basis of international prices, for drugs and patients subject to the model.

If “most favored nation” pricing is implemented, payment for our products could be adversely affected.

Drug importation and cross-border trade, both sanctioned and unsanctioned, occurs when a pharmaceutical product from a market where the official price is set lower is shipped and made commercially available in a market where the official price is set higher.

Any future relaxation of laws that presently restrict or limit drug importation or cross-border trade, including in the United States, could have a material negative impact on our ability to commercialize ARCALYST or any of our product candidates, if approved.

As a result of the foregoing, we may not be able to achieve or sustain favorable pricing for ARCALYST or any of our product candidates, if approved, and adequate reimbursement, which may hinder our ability to recoup our investment in such drugs.

For more information, see “ Risk Factors – General Risk Factors – Enacted and future healthcare legislation may have a material adverse effect on our business and results of operations .”

Product liability lawsuits against us could cause us to incur substantial liabilities and could limit commercialization of ARCALYST and any product candidates that we may develop, if approved.

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Regardless of merit or eventual outcome, liability claims may result in:

● decreased demand for any products we commercialize;

● decreased demand for any approved products;

● injury to our reputation and significant negative media attention;

● regulatory investigations that could require costly recalls or product modifications;

● regulatory investigations that could require costly recalls or product modifications (or withdrawal of the product from the market);

● difficulty in enrolling participants in clinical trials or withdrawal of clinical trial participants;

● significant costs to defend the related litigation;

● substantial monetary awards to trial participants;

● loss of potential revenue;

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Any future growth outside of the United States would be subject to additional regulatory burdens and other risks and uncertainties.

We are currently only authorized to market ARCALYST, our sole product, for the treatment of recurrent pericarditis in the United States, where we derive substantially all of our revenue.

Our future growth may depend, in part, on our ability to commercialize our current and future products in markets outside of the United States either on our own or through collaborations with third parties.

We continue to evaluate the opportunities for the development and commercialization of our product candidates in certain markets outside of the United States, including through our Managed Access Program and collaborations with third parties, including Huadong.

We continue to evaluate the opportunities for the development and commercialization of our product candidates in certain markets outside of the United States, including through our Named Patient Program, Managed Access Program and collaborations with third parties, including Huadong.

We and our collaborators are not permitted to market or promote any of our product candidates before we receive regulatory approval from the applicable regulatory authority in that market, and we may never receive such regulatory approval for any of our product candidates.

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● our ability to obtain reimbursement for our product candidates in such markets;

● price negotiations that delay commercialization;

● our inability to directly control commercial activities because we may rely on third parties;

● the burden of complying with complex and changing regulatory, tax, accounting and legal requirements of such countries;

● exposure to increased regulatory risk, including those arising under the FCPA (as defined below);

● exposure to increased regulatory risk, including those arising under the United States Foreign Corrupt Practices Act (the “FCPA”), the UK Economic Crime and Corporate Transparency Act 2023 or similar foreign regulations;

● different medical practices and customs in such countries affecting acceptance in the marketplace;

● import or export licensing requirements;

● tariffs, taxes and other restrictions on international trade;

● longer accounts receivable collection times;

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If reimbursement of our products is unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, our business could be harmed, possibly materially.

We may also be subject to burdensome pricing requirements.

See “ Risk Factors – Risks Related to Commercialization –Evolving health policy and associated legislative changes related to coverage and reimbursement aimed at lowering healthcare expenditures could impact the commercialization of our product candidates.

Pharmaceutical pricing has been, and likely will continue to be, a central component of these efforts.”

We are subject to ongoing obligations, regulatory requirements and continued regulatory review, which may result in significant additional expense.

Additionally, our current and future products could be subject to unfavorable regulatory changes and other restrictions and market withdrawal, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products .

We are subject to ongoing regulatory requirements for a number of our activities, including manufacturing, packaging, labeling, storage, distribution, advertising, promotion, sampling, record-keeping, adverse event reporting, conduct of post-marketing trials and submission of safety, efficacy and other post-market information for our products in the United States.

Our business and operations are subject to extensive healthcare regulation and enforcement by various government entities, and our failure to strictly adhere to these regulatory requirements could have a detrimental impact on our business.

Such obligations, along with continued regulatory review, may result in significant additional expense.

In addition, approvals may come with potentially burdensome conditions.

Furthermore, if we seek and receive approval from regulatory authorities outside of the United States for products or any of our product candidates in the future, we will be subject to such authorities’ requirements, which may be more stringent than our obligations in the United States.

See “ Business – Government Regulation – BLA Review and Approval ” and “ Business – Government Regulation – Post-Approval Requirements ”

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

If we fail to comply with such requirements;

We also will be required to report certain adverse reactions, production and quality problems, inadequate efficacy and other issues, if any, to applicable regulatory authorities on an ongoing basis.

In addition, the identification of new safety issues could lead to new labeling or restrictions on the patient population or use of our products, diminishing the addressable market or sales or both or removal of the drug from the market.

Such conditions, requirements or events may prove to be expensive and burdensome, and the reporting of such may cause the price of our Class A ordinary shares to decrease.

See “ Business – Government Regulation”.

If we fail to comply with regulatory requirements;

if a regulatory agency discovers previously unknown problems with any of our current or future products, such as adverse events of unanticipated severity or frequency;

if problems arise with the facility where a product is manufactured;

or if a regulatory agency disagrees with the promotion, marketing or labeling of a product, such regulatory agency may impose restrictions on that product or us, including requiring suspension of sales and withdrawal of the product from the market.

If we discover previously unknown problems with a product or product candidate, including adverse events of unanticipated severity or frequency, or with our manufacturing processes;

fail to comply with regulatory requirements;

or a regulatory agency or enforcement authority disagrees with the promotion, marketing or labeling of our products, such regulatory agency or enforcement authority may, among other things:

or if a regulatory agency disagrees with the promotion, marketing or labeling of a product, such regulatory agency may:

● issue warning letters;

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● suspend or withdraw regulatory approval;

● require us to suspend sales or withdraw a product from the market;

● suspend any of our ongoing clinical trials;

● impose civil, criminal and administrative penalties, damages, disgorgement or monetary fines;

● exclude us from participating in Medicare, Medicaid or other governmental healthcare programs;

● refuse to approve pending applications or supplements to approved applications submitted by us;

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If regulatory sanctions are applied or if regulatory approval is withdrawn, the value of our company and our operating results will be adversely affected.

If there are changes in the application of legislation or regulatory policies, or if problems are discovered with a product or the manufacture of a product, or if we or one of our distributors, licensees, co-marketers or other third parties operating on our behalf fails to comply with regulatory requirements, regulatory authorities could impose fines on us, impose restrictions on such product or its manufacture or require us to recall or remove such product from the market, in addition to withdrawing our marketing authorizations, or requiring us to conduct additional clinical trials, change our product labeling or submit additional applications for marketing authorization.

If any of these events occur, our ability to sell an affected product may be impaired, and we may incur substantial additional expense to comply with such regulatory requirements.

The policies of the FDA and other regulatory authorities may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates or require significant changes to the manufacturing, sales and distribution of any of our products.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States, Europe or in other jurisdictions.

In addition, if we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may be subject to potentially significant enforcement actions.

Our business operations are subject to extensive healthcare regulation and enforcement by various government entities, and our failure to strictly adhere to these regulatory requirements could have a detrimental impact on our business.

If we or third parties acting on our behalf are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third parties are not able to maintain regulatory compliance, we may be subject to potentially significant enforcement actions.

The development and marketing of pharmaceutical products and related arrangements with healthcare professionals, third party payors, patients and other third parties in the healthcare industry are subject to a wide range of healthcare laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute our current and future products.

See “ Business – Government Regulation ”.

Given the broad scope and evolving government interpretation and enforcement of these laws, our business activities could be subject to challenge under one or more of such laws.

We have entered into consulting and advisory board agreements with physicians and other healthcare professionals and could be adversely affected if regulatory authorities determine our financial relationships with such prescribers violate applicable laws or create a conflict of interest.

For example, investigators for our clinical trials may serve as scientific advisors or consultants to us from time to time and receive compensation in connection with such services.

Given the broad scope, evolving interpretation and unpredictable enforcement of these laws, our business activities could be subject to challenge in the future.

For example, investigators for our clinical trials may serve as scientific advisors, speakers, advisory board members or consultants to us from time to time and receive compensation in connection with such services.

Regulatory authorities may conclude that a financial relationship between us and a principal investigator or a clinical trial site has created a conflict of interest or otherwise affected interpretation of a study.

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Furthermore, investigators for our clinical trials may become debarred by regulatory authorities, which may impact the integrity of our studies and the utility of the clinical trial itself may be jeopardized.

Ensuring that our business arrangements with third parties comply with applicable healthcare laws and regulations may involve substantial costs.

Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the

operation of our business.

If our operations, including activities conducted by our sales team, were to be found to be in violation of any of these laws or any other governmental regulations that may apply to us, we may be subject to the imposition of civil, criminal and administrative penalties, damages, disgorgement, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, individual imprisonment, contractual damages, reputational harm, diminished profits and future earnings, additional reporting requirements or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

Further, defending against any such actions can be costly, time consuming and may require significant personnel resources.

Therefore, even if we are successful in defending against any such actions that may be brought against us, our business may be impaired.

Further, the development of our marketing and sales capabilities has required, and will continue to require, significant financial and management resources.

Our direct sales and marketing efforts may not be successful or may be limited by future government policies or initiatives.

For example, the FDA stated in September 2025 that it intends to more aggressively enforce requirements for direct-to-consumer drug advertising and sent a significant number of warning or untitled letters to pharmaceutical companies alleging deceptive prescription drug advertising, which represents a dramatic increase in FDA actions as compared to prior years.

The current administration’s focus on pharmaceutical advertising heightens the risk that we may, in the future, receive a warning or enforcement action related to our advertising and marketing practices, which could adversely affect our business.

Risks Related to Product Development

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We base our projections about the future development and potential approval of our product candidates on indirect data from other companies and the results of our preclinical and clinical trials, but ultimate success is uncertain and involves significant risk.

We cannot be certain that any of our product candidates will be successful in their clinical trials.

We also cannot be certain that they will receive regulatory approval, even after completing a successful pivotal clinical trial.

We may also choose to cease development of a product candidate prior to conducting a pivotal trial for any reason, including capital conservation purposes.

We cannot be certain that any of our product candidates will be successful in their clinical trials or will receive regulatory approval.

Further, we may choose to cease development of a product candidate prior to conducting a pivotal trial for any reason, including capital conservation purposes.

We may also choose not to commercialize a product candidate that has completed a pivotal trial or received regulatory approval for a number of reasons, including commercial viability.

Such decisions may be for a particular indication or be for the product candidate entirely.

In the event that a product candidate is unsuccessful in its clinical trials, fails to receive regulatory approval or is unviable for another reason, our business may be materially harmed by limiting our ability to recoup our development expenses through a successful commercial launch.

Such decisions may be for a particular indication or for the product candidate entirely.

In the event that a product candidate is unsuccessful in its clinical trials, fails to receive regulatory approval, is deprioritized for strategic reasons or is non-viable for another reason, our business may be materially harmed by limiting our ability to recoup our development expenses through a successful commercial launch.

Each of our product candidates requires substantial preclinical or clinical development and manufacturing support as part of our product development strategy.

The clinical success of our current and future product candidates depends upon several factors, including, but not limited to, the following:

● submission to and authorization to proceed with clinical trials by the FDA under INDs and CTAs to applicable authorities outside of the United States for our product candidates to commence planned clinical trials or future clinical trials;

● successful completion of nonclinical studies, including toxicology studies, pharmacological, and biodistribution studies, as conducted, where applicable, under GLP;

● submission to and authorization to proceed with clinical trials by the FDA under INDs and CTAs to applicable authorities outside of the United States;

● successful completion of required nonclinical studies, including toxicology studies, pharmacological and biodistribution studies, as conducted, where applicable, under GLP;

● successful site activation for, enrollment in and completion of clinical trials, including the ability of our CROs to successfully conduct such trials within our planned budget and timing parameters without adversely impacting our trials, and our ability to successfully oversee CRO activities;

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● as applicable, acceptance of pediatric study plans by regulatory authorities, and the follow through of any pediatric study commitments, such as development of pediatric formulations, if required;

● establishment and maintenance of arrangements with third party manufacturers, as applicable, for continued clinical supply and commercial manufacturing;

● successful development of our manufacturing processes and transfer to third party CDMO facilities to support our development and commercialization activities in a manner compliant with all regulatory requirements;

● successful manufacture of sufficient supply of our product candidates within approved specifications for purity, efficacy and cGMP requirements from our facility and from our CDMOs or other sole-source manufacturers in order to meet clinical or commercial demand, as applicable, for ourselves and for our partners;

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If we do not accomplish one or more of these factors in a timely manner or at all we could experience significant delays in, or an inability to, timely or successfully commercialize our product candidates.

Failure to generate sufficient revenue from the commercialization of our current and future products, whether as a result of failing to obtain regulatory approvals or unsuccessfully commercializing such products may harm our ability to continue our operations by limiting our potential commercial prospects.

In such an instance, we may need to seek capital elsewhere.

See “ Risk Factors – General Risk Factors – We have a history of operating losses and may require substantial additional financing in the future.”

Clinical drug development is a lengthy and expensive process with uncertain timelines and outcomes.

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Before obtaining marketing approval from regulatory authorities for the sale of our product candidates, we must conduct extensive clinical trials to demonstrate the safety and efficacy of our product candidates in humans.

Commencing a clinical trial is subject to acceptance by the FDA of an IND or IND amendments, acceptance by competent authorities of the EU member states of a CTA under the CTR or acceptance by other applicable regulatory authorities.

Clinical testing is expensive, time consuming and uncertain as to the outcome.

See “ Business – Government Regulation” for more information on the regulations governing our clinical trials and product development.

Not all of our clinical trials have been conducted as initially planned or completed on our initial projected schedule, and, accordingly, we cannot guarantee that any of our current or future clinical trials will be conducted as initially planned or completed on our initial projected schedule, if at all.

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Failing to achieve desired efficacy or identifying of a novel safety hazard in turn represents an inability to successfully recoup such expense via a potential commercialization of the product candidate, if approved.

Sufficient inability to recoup clinical trial expenses via successful development could pose material risks to our business.

See “ Risk Factors – Risks Related to Product Development – If we are unable to advance our product candidates in clinical development and obtain regulatory approval, or experience significant delays in doing so, our business may be significantly harmed.

authorities, and finalizing the trial design based on discussions with the FDA, competent authorities of the EU member states or other applicable regulatory authorities.

We have and may in the future receive feedback or guidance from regulatory authorities on our clinical trial design and protocols and, even after we incorporate such feedback or guidance from these regulatory authorities, such regulatory authorities may impose other requirements for our clinical trials;

disagree that we have satisfied their requirements to commence our clinical trials;

disagree with our interpretation of data from the relevant preclinical studies, clinical trials or CMC data;

or disagree or change their position on the acceptability of our trial designs, including the proposed dosing level or schedule, treatment duration, our definitions of the patient populations or the clinical endpoints selected.

Any of the foregoing may require us to complete additional preclinical studies, clinical trials, CMC development, other studies or impose stricter approval conditions than we currently expect.

Commencing our planned clinical trials is also subject to approval by an institutional review board (an “IRB”), an ethics committee and/or other applicable committees for each clinical trial site before a trial may be initiated, which approval could be delayed, rejected or suspended.

IRBs, regulatory authorities or other applicable safety committees may impose a suspension or termination of our clinical trials even after approval and initiation of trial sites due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by regulatory authorities, unforeseen safety issues or adverse side effects that arise in the trial, or failure to demonstrate a benefit from using a drug, any of which could result in the imposition of a clinical hold, as well as changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

Successful completion of our clinical trials is a prerequisite to submitting a BLA or certain supplemental BLAs (“sBLA”) to the FDA, an MAA to the European Medicines Agency (the “EMA”) or national competent authorities of the EU member states, or other applicable regulatory authorities in other countries for each product candidate and, consequently, is a prerequisite to us obtaining approval and initiating commercial marketing of our current and any future product candidates.

A failure of one or more of our current or future clinical trials can occur at any stage of testing, and our clinical trials may not be successful.

We have experienced and may continue to experience delays in our ongoing clinical trials, and we do not know whether planned clinical trials will begin on time, be allowed by regulatory authorities, require redesign, have timely site activation and participant enrollment or be completed on schedule, if at all.

Events that have and may in the future delay or prevent commencement or successful completion of clinical development of our product candidates as planned and on schedule, if at all, include but are not limited to:

● inability to generate sufficient preclinical, toxicology or other in vivo or in vitro data to support the initiation of human clinical trials;

● delays or failure in reaching a consensus with regulatory agencies on trial design or implementation, including the appropriate dosage levels, frequency of dosing, or treatment period in clinical trials;

● delays or failure in reaching agreement on acceptable terms with prospective CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;

● difficulties in obtaining required IRB, ethics committee approval or positive opinion at each clinical trial site;

● delays or failure in obtaining regulatory approval to commence a trial, or imposition of a clinical hold by regulatory authorities;

● difficulty in identifying and enrolling suitable participants in a particular trial, including due to competition from other companies’ clinical trials for a particular indication, which may reduce the power of a clinical trial to detect statistically significant results;

● amendments to clinical trial protocols impacting study criteria, endpoints or design, including amendments that either we initiate or are requested by regulatory authorities;

● difficulty collaborating with patient groups and investigators;

● failure by our CROs, medical institutions, or other third parties we contract with in connection with our clinical trials to adhere to clinical trial requirements or to perform their obligations in a timely manner or in compliance with all applicable laws and regulations, including the FCPA;

● failure to perform in accordance with GCPs or applicable comparable regulatory guidelines in other countries;

● participants not completing a clinical trial or not returning for post-treatment follow-up, including as a result of trial demands on participants;

● clinical trial sites withdrawing from or being unable to conduct activities, or participants withdrawing from clinical trials, including as a result of a pandemic or other outbreak of disease and global conflict;

● participants experiencing serious adverse events or undesirable side effects or being exposed to unacceptable health risks;

● participants failing to experience confirmed pre-specified events during the clinical trial within an expected timeframe, if at all;

● safety issues, including occurrence of adverse events associated with a product candidate, that are viewed to outweigh its potential benefits;

● changes in regulatory requirements, policies and guidance that require amending or submitting new clinical protocols;

● the cost of clinical trials being greater than we anticipate;

● strategic decisions regarding clinical study priority for capital preservation purposes;

● failure by us, our CROs, or other third parties with whom we contract to properly collect, analyze, and/or assess clinical data, including the performance of assays, analyses and other activities;

● clinical trials of our product candidates producing negative, inconclusive or uncompetitive results, which may result in us deciding, or regulatory authorities requiring us, to conduct additional clinical trials or modify or cease development programs for our product candidates;

● failure to replicate safety, efficacy or other data from earlier preclinical studies and clinical trials conducted by us or third parties, including the companies from whom we have licensed or acquired or may in the future license or acquire our product candidates, in our later clinical trials;

● the occurrence of adverse or other events not observed in earlier studies ;

● suspensions or terminations of our clinical trials by us or the IRBs of the institutions in which our clinical trials are being conducted, the Data Safety Monitoring Board for such trials or the FDA or comparable regulatory authorities;

● failure of manufacturers, or us, to produce sufficient quantities of or phase-appropriate supplies of our product candidates for use in our clinical trials in accordance with applicable cGMP requirements and regulations or applicable comparable regulatory guidelines in other countries;

● delays in manufacturing, testing, releasing, validating or importing/exporting sufficient stable quantities of our product candidates for use in clinical trials or the inability to do any of the foregoing either as a result of quality assurance or due to our reliance on third party manufacturers;

● disruptions to our business operations, including our manufacturing operations, and the business operations of our third party manufacturers, CROs upon whom we rely to conduct our clinical trials, or other third parties with whom we conduct business or otherwise engage, as well as disruptions in supply chain distribution in the countries in which we conduct our clinical trials, our manufacturers produce our product candidates or we otherwise conduct business or engage with other third parties, now or in the future.

Delays in the commencement or completion of our planned and ongoing clinical trials have occurred and may continue to occur.

Consequences of delays have increased and may in the future increase our costs of developing our product candidates, slow down the development and approval of our product candidates, delay or jeopardize our ability to commence product sales and generate revenue, if any, from our product candidates and harm their commercial prospects.

In addition, many of the factors that cause, or lead to, difficulties and delays in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates or us deciding to modify or cease development of our product candidates.

Clinical trial delays could also shorten any periods during which our products have patent protection or shorten any periods during which we have the exclusive right to commercialize our product candidates and may allow our competitors to bring products to market before we do, which could impair our ability to obtain orphan exclusivity for our products that potentially qualify for this designation and to successfully commercialize our product candidates, and may harm our business and results of operations.

Any inability to successfully complete preclinical and clinical development could result in additional costs to us or impair our ability to generate revenue and harm our business, financial condition and prospects significantly.

Furthermore, clinical trials must be conducted in accordance with the laws, rules and regulations, guidelines and other requirements of the FDA, EU national competent authorities, the EMA, the UK Medicines and Healthcare products Regulatory Agency (the “MHRA”) and other applicable regulatory authorities outside of those jurisdictions and are subject to oversight by these regulatory authorities and IRBs or ethics committees at the medical institutions where such clinical trials are conducted.

Further, conducting global clinical trials , as we do for certain of our product candidates, may require that we coordinate among the legal requirements and guidelines of regulatory authorities across a number of jurisdictions, including the United States, the EU, the United Kingdom and countries outside of those jurisdictions, which could require that we amend clinical trial protocols or determine not to conduct a trial in one or more jurisdictions or to run separate trials in various jurisdictions due to the inability, cost or delay in harmonizing divergent requests from such regulatory authorities, all of which could increase costs.

In addition, clinical trials that are conducted in countries outside the United States, the EU and the United Kingdom may subject us to risks associated with the engagement of non-United States, non-EU and non-United Kingdom CROs who are unknown to the FDA, the EMA or the EU national component authorities or the MHRA and may have different standards of diagnosis, screening and medical care.

Such trial sites may also incur risks associated with further delays and expenses as a result of increased shipment costs (including as a result of local quality release or in-country testing of a product candidate supply produced in a different jurisdiction for our clinical trials) and political and economic risks relevant to such countries outside the United States, the EU and the United Kingdom.

In addition, the FDA’s and other regulatory authorities’ policies with respect to clinical trials may change and additional government regulations may be enacted.

Factors that have and may in the future delay or prevent commencement or successful completion of clinical development of our product candidates as planned and on schedule, if at all, include but are not limited to:

● insufficient preclinical, toxicology or other data to support initiation of human trials;

● disagreements with regulatory agencies regarding trial design or implementation, including the appropriate dose levels, frequency of dosing, treatment period or endpoints in clinical trials;

● delays or failure in reaching agreement on acceptable terms with prospective CROs and clinical trial sites;

● difficulties obtaining IRB or ethics committee approval at each clinical trial site;

● delays or failure in obtaining regulatory approval to commence a clinical trial or the imposition of a clinical hold by regulators;

● difficulties in enrolling suitable participants due to competition from other clinical trials in the particular indication;

● clinical trial protocol amendments impacting study criteria, endpoints or design, including amendments that either we initiate or are requested by regulatory authorities;

● difficulty collaborating with patient groups and/or investigators;

● CROs, clinical trial sites or applicable third parties failing to adhere to clinical trial requirements or comply with applicable law;

● CROs, clinical trial sites or applicable third parties failing to conform to GCPs;

● participants not completing a clinical trial or not returning for post-treatment follow-up;

● clinical trial sites withdrawing from a trial or being unable to conduct activities or participants withdrawing from clinical trials;

● participants experiencing serious adverse events, undesirable side effects or unacceptable health risks;

● participants failing to experience confirmed pre-specified events during the clinical trial within the expected timeframe, if at all;

● safety concerns outweighing potential benefits;

● regulatory changes requiring protocol amendments or new submissions;

● failure by us, our CROs or other third parties with whom we contract to timely and properly collect, analyze and/or assess clinical data;

● higher than expected clinical trial or clinical product manufacturing costs;

● strategic clinical trial reprioritization;

● errors in collecting, analyzing and assessing clinical data;

● clinical trials producing negative, inconclusive or uncompetitive results;

● failures to replicate safety, efficacy or other data from earlier preclinical studies and clinical trials conducted by us or third parties, including the trials of companies from whom we have licensed or acquired assets;

● the occurrence of unforeseen adverse events;

● trial suspensions or terminations by us, IRBs, DSMBs, DMCs, or regulators;

● insufficient production of product candidates meeting cGMP standards;

● manufacturing or supply chain delays;

● operational disruptions affecting us, our CROs or our CDMOs and other third parties we rely on to conduct our clinical trials.

Delays in the commencement or completion of our clinical trials have occurred and may occur in the future.

Consequences of delays have increased and may in the future increase our costs of developing our product candidates, delay the development and approval of our product candidates or delay or jeopardize our ability to commence product sales and generate revenue.

In addition, many of the factors that cause, or lead to, difficulties and delays in the commencement or completion of clinical trials may also lead to the denial of regulatory approval of our product candidates or us deciding to modify or cease development of our product candidates.

Clinical trial delays could also shorten any periods during which we have patent protection or have the exclusive right to commercialize our product candidates, and may allow our competitors to bring products to market before we do, which could impair our ability to obtain orphan exclusivity for our products that potentially qualify for this designation and to successfully commercialize our product candidates.

Clinical trials must be conducted in accordance with a number of national and international rules and regulations in the jurisdictions where such clinical trials are conducted.

See “ Business – Government Regulations ”.

Further, conducting global clinical trials , as we do for certain of our product candidates, requires that we coordinate among the legal requirements and guidelines of regulatory authorities across a number of jurisdictions, including the United States, the EU, the UK and countries outside of those jurisdictions, which could require that we amend clinical trial protocols, terminate a trial in one or more jurisdictions or run separate trials in various jurisdictions due to the inability, cost or delay in harmonizing divergent requests from such regulatory authorities, all of which could increase costs.

In addition, clinical trials that are conducted in countries outside the United States, the EU and the UK may subject us to risks associated with the engagement of CROs who are unknown to the FDA, the EMA or the EU national component authorities or the MHRA and may have different standards of diagnosis, screening and medical care.

Many foreign regulatory authorities have similar approval requirements.

In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted.

In addition, clinical trial rules and regulations may change.

Such changes may require us to dedicate time, resources and capital to comply and, if we are unable to do so effectively or on a timely basis, our development plans may be impacted and our business may suffer material harm.

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● the availability and nature of competing clinical trials;

● the availability of standard of care or new drugs approved for the indication the clinical trial is investigating;

● the availability of standard of care and/or new or existing drugs approved for the indication we are investigating;

● failure to obtain, maintain and/or timely amend participant consents;

● our ability to recruit clinical trial investigators with applicable competencies and experience;

● the risk that participants enrolled in clinical trials will withdraw from the trials before completion of their treatment or follow-up period (in either case including as a result of trial demands on participants among other things);

● participants withdrawing from trials before completing their treatment or follow-up period;

● clinicians’ and participants’ perceptions as to the safety and potential advantages of the product candidate being studied in relation to other available therapies;

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The process of finding and enrolling participants may prove costly, especially since we are looking to identify a subset of the participants eligible for our studies from a relatively small patient population for many of the diseases we are studying.

If participants are unable or unwilling to participate in our clinical trials for any reason, or we experience difficulties in participant enrollment for any other reason, our costs may significantly increase and the timeline for recruiting participants, conducting trials and obtaining regulatory approval of our product candidates may be significantly delayed or prevented, the commercial prospects of our product candidates may be harmed, and our ability to commence product sales and generate product revenue from any of these product candidates, if approved, could be delayed or prevented.

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

Our products and product candidates may cause undesirable side effects or have other safety risks that could delay or prevent their regulatory approval, limit the commercial profile of an approved label or result in significant negative consequences, including withdrawal of approval, following any potential marketing approval.

Treatment with our products and product candidates may produce undesirable side effects or adverse reactions or events.

Undesirable side effects caused by our product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in more restrictive labels or the delay or denial of regulatory approvals by regulatory authorities.

Our products and product candidates modulate the immune system and carry risks associated with immunosuppression, including the risk of serious infections and other potential serious health risks.

If the results of our clinical trials, including clinical trials evaluating our current products in new indications, or clinical trials conducted by collaboration partners, reveal an unacceptable severity and prevalence of certain side effects, the FDA or applicable regulatory authority outside of the United States may suspend or terminate our clinical trials, or not authorize us to initiate further trials.

Encountering difficulties in participant enrollment could cause our costs to significantly increase, and our clinical trials may be significantly delayed.

Such occurrences may also delay or prevent any potential regulatory approval and commercialization, harming our business, financial condition and prospects significantly.

Undesirable side effects or adverse reactions caused by any of our product candidates may be identified that could delay or prevent their marketing approval or limit their use.

Undesirable side effects or adverse reactions caused by our product candidates could cause our CROs, an IRB or regulatory authorities to interrupt, delay or halt an ongoing clinical trial and could result in the delay or denial of marketing approval by the FDA or comparable foreign regulatory authorities.

Even if approved, such events could lead to restrictions to the product’s label that could materially limit our ability to successfully commercialize the product.

For example, many of our assets modulate the immune system and carry risks associated with immunosuppression, such as serious infections or malignancy.

In addition, if other molecules in the same or related class being developed or commercialized by third parties show the same or similar side effects as those we observed in our trials but to a greater degree or report new previously-unreported side effects, it could have an impact on the entire class of molecules, and the applicable regulatory authority may modify, suspend, or terminate our clinical trials;

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or even suspend commercialization of any products or product candidates, as applicable, that contain a molecule within such class.

Further, third parties may have rights to independently develop and commercialize our current and future products and product candidates, which may increase the likelihood of adverse safety results.

For example, Regeneron retains worldwide rights to develop and commercialize ARCALYST for local administration to the eye and ear and oncology, and Huadong holds rights to develop and commercialize ARCALYST in the Huadong Territory.

The development of our product candidates and, if approved, commercialization of our products for new indications or new patient populations by these third parties may increase the possibility of uncovering adverse safety results not previously discovered during our own clinical development process or United States commercialization.

Such effects, if uncovered by such third parties, may lead to regulatory authorities ordering us to cease further development of, deny or withdraw any approval of any of our products or product candidates, or require onerous label changes, for any or all targeted indications.

In addition, the compassionate use of our products and product candidates, or evaluation of our products and product candidates by third parties via scientific collaborations (e.g., our collaborative study agreement exploring ARCALYST as a treatment for cardiac sarcoidosis) or investigator initiated studies could increase the possibility of generating adverse safety results that impact our commercialization of such products or our development of such product candidates.

Such adverse safety results, when reported to regulatory authorities, may negatively impact the safety profile of the drug studied as a class effect and could result in the imposition of clinical holds on all clinical trials involving such product candidate regardless of the indication studied.

Further, clinical trials by their nature utilize a sample of the potential patient population.

Certain rare and severe side effects associated with our products or product candidates may only be uncovered after use by a significantly larger number of patients, including patients with different demographic characteristics than those that participated in our clinical trials.

The development of our product candidates and, if approved, commercialization of our products for new indications or new patient populations by Regeneron or Huadong (each having certain rights to develop and commercialize ARCALYST) may increase the possibility of uncovering adverse safety results not previously discovered during our own clinical development process or United States commercialization.

Compassionate use of our products and product candidates, or evaluation of our products and product candidates by third parties or scientific collaborations could also uncover undesirable side effects or adverse safety results that negatively impact our clinical trials.

If any of our product candidates is associated with undesirable side effects or adverse reactions, we may choose to halt or limit development of that product candidate to certain uses or subpopulations in which the undesirable side effects or adverse reactions are less prevalent, less severe or more acceptable from a risk-benefit perspective.

In addition, clinical trials by their nature utilize a sample of the potential patient population.

However, with a limited number of participants and limited duration of exposure, rare and severe side effects of our product candidates may only be uncovered when a significantly larger number of patients are exposed to the product.

If we or others later identify undesirable side effects caused by our products or product candidates, if approved, a number of potentially significant negative consequences could result, including but not limited to:

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● regulatory authorities may require the addition of labeling statements, specific warnings, contraindications or field alerts to prescribers and pharmacies;

● we may be required to create a registry or a REMS plan or similar risk management measures, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare professionals or other elements to assure safe use;

● we may be required to create a registry or a REMS or similar risk management measures;

● we may be required to change the way the product is administered, conduct additional clinical trials or change the labeling of the product;

● we may be subject to limitations on how we promote the product, or sales of the product may decrease significantly;

● we could be sued and held liable for harm caused to patients;

● the product may become less competitive;

● our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product or product candidate, if approved, and could significantly harm our business, results of operations and prospects.

Interim, preliminary, and “top-line” data from our clinical trials that we announce or publish from time to time may change as more participant data become available following the release of the interim data;

preliminary data are subject to audit and verification procedures, and deeper analysis of the data beyond the topline data may provide more color and context to the data, all of which could result in material or other changes that are reflected in the final data.

From time to time, we may disclose interim data from our preclinical studies or clinical trials, which are based on an interim analysis of then-available data from ongoing studies or trials.

Interim data from our preclinical studies and clinical trials are subject to the risk that one or more of the clinical observations may materially change as participant enrollment continues and more participant data become available from the particular study or trial.

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

Adverse differences between interim data and final data could significantly harm the development of our product candidates and our business prospects with respect thereto.

Further, from time to time we may announce or publish topline or preliminary data from our preclinical studies or clinical trials, which are based on a preliminary analysis of data from a completed study.

Preliminary and topline data from our clinical trials are subject to change following a more comprehensive review of the data from the particular clinical trial.

We also make assumptions, estimations, calculations and conclusions as part of our preliminary analyses of the data, and we may not have received, or had the opportunity to evaluate fully and carefully, all of the data.

As a result, preliminary and topline data remain subject to audit and verification procedures that may result in the final data being different from the preliminary data we previously announced or published.

● we may be subject to limitations on how we promote the product.

Any of these events could prevent us from achieving or maintaining market acceptance of the particular product or product candidate, and could significantly harm our business, results of operations and prospects.

Interim, preliminary and “top-line” data from our clinical trials may differ from final data.

From time to time we may announce or publish interim, topline or preliminary data from our preclinical studies or clinical trials, which are based on an interim or preliminary analysis of the then available data from an in-progress or completed study, as applicable.

Such data may be subject to change following a more comprehensive review of the data from the particular clinical trial.

Interim data may change, and such change may be material, as participant enrollment continues or patients continue on treatment in the study.

For preliminary or topline data, we also make assumptions, estimations, calculations and conclusions as part of our preliminary analyses, and, as a result, such data remain subject to audit and verification procedures that may result in the final data being different from the data we previously announced or published.

Interim data should be viewed with caution until final data are available.

Third parties, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate and our business prospects.

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Regulatory approval processes are lengthy, time consuming and inherently unpredictable.

If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for our current or future product candidates or if we fail or otherwise cease to advance their development, we will be delayed in commercializing or will not be able to commercialize, our current or future product candidates and our ability to generate additional revenue will be materially impaired.

Before we can commercialize any of our current or future product candidates, we must obtain marketing approval from regulatory authorities.

If we cannot obtain, or if there are delays in obtaining, required regulatory approvals for our current or future product candidates or if we fail or otherwise cease to advance their development, we will be delayed in commercializing, or will not be able to commercialize, our current or future product candidates.

Before commercializing any product, we must obtain marketing approval from regulatory authorities to sell the applicable product.

We may not be able to receive approval to market any of our current or future product candidates from regulatory authorities in our desired indications in any jurisdiction, and it is possible that none of our product candidates or any product candidates we may seek to develop in the future will ever obtain regulatory approval.

We may need to rely on third party CROs and regulatory consultants to assist us in this process.

Securing regulatory approval requires the submission of extensive preclinical and clinical data and supporting information to the various regulatory authorities for each therapeutic indication to establish a product candidate’s safety and efficacy.

Securing regulatory approval also requires the submission of information about the biologic manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authorities, who may deny approval based on the results of such submissions and inspections.

Our current or future product candidates may not be effective, may be only moderately effective or may prove to have undesirable or unintended side effects, toxicities or other characteristics that may preclude our obtaining marketing approval or prevent or limit commercial use.

The FDA and other regulatory authorities have substantial discretion in the approval process, including determining when or whether regulatory approval will be obtained for a product candidate.

Even if we believe the data collected from clinical trials are promising, such data may not be sufficient to support approval by the FDA or any other regulatory authority or such authorities may request additional information that may be difficult to generate or provide.

Further, following approval, the FDA may conduct additional inspections and, based on the results of such inspections, deem the inspected manufacturing facilities to be deficient, suspending our ability to manufacture our product candidates until we can secure satisfactory alternative manufacturing facilities.

In addition to the United States, we may seek regulatory approval to commercialize our product candidates in other jurisdictions.

While the scope of regulatory approval is similar in many countries, to obtain separate regulatory approval in multiple countries will require us to comply with numerous and varying regulatory requirements of each such country or jurisdiction regarding safety and efficacy and governing, among other things, clinical trials, commercial sales, pricing and distribution, and we cannot predict success in any such jurisdictions.

The process of obtaining regulatory approvals, both in the United States and in other countries, is time consuming, expensive, may take many years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved.

Changes in legislation, regulation or policy governing the development, approval and marketing of biological products may cause delays in our plans for submitting marketing applications and obtaining approvals for such applications, or we may be unable to obtain marketing approvals.

For instance, comprehensive proposals have been made for the complete overhaul of the existing EU pharmaceutical legislation, in the context of the Pharmaceutical Strategy for Europe initiative, launched by the European Commission in November 2020.

The European Commission’s proposal for revision of several legislative instruments related to medicinal products (potentially reducing the duration of regulatory data protection, revising eligibility for expedited pathways, etc.) was published in April 2023.

The proposed revisions received a positive first reading of the European Parliament and European Council has yet to consider the legislative proposal.

It is unlikely that the new law will be adopted through the EU legislative process before 2026.

When adopted, the new law may have a significant impact on the biopharmaceutical industry in the long-term.

Regulatory authorities have substantial discretion in the approval process and may refuse to accept any application or may decide that our data are insufficient for approval and require additional preclinical studies or clinical or other trials for our current or future product candidates.

Our current and future product candidates could be delayed in receiving, or fail to receive, regulatory approval or we may fail or cease to advance their development for many reasons, including the following:

● regulatory authorities may disagree with the number, design or implementation of our clinical trials to support further development or approval;

● we may be unable to demonstrate to the satisfaction of regulatory authorities that a product candidate is safe and effective for its proposed indication or that its clinical and other benefits outweigh its safety risks;

● regulatory authorities could require us to collect additional data or conduct additional clinical trials, which could include a requirement to compare our products or product candidates to other therapies for the treatment of the same indication;

● regulatory authorities, following the discovery of adverse safety signals or side effects from approved therapeutics or therapeutics in development in the same or related class as our products or product candidates, could require us to collect additional data or conduct additional clinical trials;

● the results of clinical trials may produce negative, inconclusive or uncompetitive results, which may result in us deciding, or regulatory authorities requiring us, to conduct additional clinical trials or to modify or cease development programs for our product candidates;

● the results of clinical trials may not meet the primary or secondary endpoints of the applicable trial or the level of statistical significance required by regulatory authorities;

● regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

● the data collected from clinical trials of our product candidates may not be sufficient to support the submission of a BLA, sBLA, MAA or other submission or to obtain regulatory approval in the United States, Europe or elsewhere;

● the number of participants required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be slower than we anticipate, participants may drop out of these clinical trials at a higher rate than we anticipate or we may fail to recruit suitable participants for a trial;

● our third party contractors may fail to comply with data quality and regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

● regulatory authorities may believe that we have not sufficiently demonstrated our ability to manufacture our candidates to the requisite level of quality standards, including that such material is sufficiently comparable to material used in previous clinical trials, or they may fail to approve our manufacturing processes or facilities, or the manufacturing processes or facilities of third party manufacturers with which we contract for clinical and commercial supplies;

● regulatory authorities may conclude that on-site inspections and data audits have not sufficiently demonstrated the quality and integrity of the clinical trial conduct and of data submitted to regulatory authorities in support of our new product approvals and marketing applications;

● the supply or quality of our product candidates or other materials necessary to conduct clinical trials of our product candidates may be insufficient or inadequate;

● our product candidates may have undesirable side effects, toxicities or other unexpected characteristics, causing us or our investigators, regulatory authorities or IRBs to reject, suspend or terminate the clinical trials;

● the policies, regulations and guidelines of regulatory authorities regarding the development, approval and marketing of biologic products may significantly change, including in the United States, as a result of the

2025 change in presidential administration, which may render our clinical data, biologic manufacturing process and other supporting information insufficient for approval or restrict us from marketing our product candidates in the manner in which we anticipate.

In addition, even if we were to obtain approval for one or more of our current or future product candidates, regulatory authorities may approve such product candidates for fewer indications or more limited patient populations than we request.

Furthermore, regulatory authorities or payers may not approve the price we intend to charge, may grant approval contingent on the performance of costly postmarketing clinical trials, may impose certain postmarketing requirements that impose limits on our marketing and distribution activities, or may approve a product candidate with a label that does not include the labeling claims necessary or desirable for the successful commercialization of that product candidate.

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

If we experience delays in obtaining approval or if we fail to obtain approval of or to advance our current or future product candidates, the commercial prospects for our product candidates may be harmed and our ability to generate additional revenue will be materially impaired.

Approval requires the submission of extensive preclinical and clinical data and supporting information to demonstrate safety and efficacy, plus detailed manufacturing information and facility inspections.

Biologic manufacturing involves living systems and highly specialized processes that are very complex and obtaining approval for such facilities is uncertain.

Authorities may deny approval based on these submissions or inspections.

Further, our product candidates may prove ineffective, only moderately effective or exhibit side effects or toxicities or other characteristics that may preclude our obtaining marketing approval or that prevent approval or limit commercial use.

Regulatory agencies have broad discretion in the approval process and may determine our data are insufficient or request additional information or conduct additional inspections.

Even trial results that we believe are promising may not meet approval standards, and

generating extra data could be difficult to generate or provide and require significant additional expense.

Following approval of a product for sale, the FDA may inspect manufacturing facilities and suspend manufacturing if deficiencies are found, requiring alternative approved sites.

These risks could significantly delay or prevent commercialization.

We may seek regulatory approval for our product candidates outside the United States.

While requirements are similar across jurisdictions, obtaining approval in multiple countries requires compliance with varying regulatory requirements for safety, efficacy, clinical trials, sales, pricing and distribution, and success cannot be assured.

The approval process in the United States and in other jurisdictions is lengthy, costly and uncertain, often taking years, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved.

Legislative or policy changes may delay submissions or approvals.

Regulatory authorities have broad discretion in the approval process and may reject applications, deem data insufficient or require additional or clinical studies.

Delays or failures in obtaining regulatory approval may occur for reasons including:

● disagreements on trial design or implementation;

● inability to demonstrate to the regulatory authorities safety or efficacy or that the clinical benefits of the product outweigh its safety risks;

● regulatory authorities requiring additional data or clinical trials, including trials to compare our products to other therapies;

● adverse safety signals or side effects from approved therapeutics or therapeutics in development in the same or related class as our products or product candidates, could require us to collect additional data or conduct additional clinical trials;

● negative or inconclusive or uncompetitive trial results, resulting in us deciding to, or regulatory authorities requiring us to, conduct additional clinical trials or to modify or cease development programs;

● clinical trials failing to meet their applicable primary or secondary endpoints, or the level of statistical significance required by regulatory authorities;

● regulatory authorities disagreeing with our interpretation of data from our preclinical studies or clinical trials;

● clinical trials generating insufficient data to support BLA, sBLA, New Drug Application, MAA or other filings;

● inability to recruit and retain sufficient numbers of suitable participants for our clinical trials;

● CRO noncompliance with data or regulatory requirements;

● regulatory authorities determine we have not sufficiently demonstrated our ability to manufacture our candidates to the requisite level of quality standards;

● inadequate supply or quality of trial materials;

● undesirable side effects, toxicities or unexpected characteristics, causing trial suspension or termination by us, site investigators, IRBs or regulatory authorities;

● regulatory policy changes.

Even if a product candidate is approved, regulatory authorities may limit indications or the patient populations approved to use the drug, impose postmarketing requirements, reject proposed pricing, make approval contingent on the performance of costly postmarketing clinical trials, approve a label that does not include the labeling claims necessary or desirable for the successful commercialization of our product or otherwise impose restrictions or requirements that may require significant additional expense or create substantial limitations on our product candidates’ commercial potential.

Our products, current product candidates and any of our future product candidates regulated as biologics in the United States may face biosimilar competition sooner than anticipated.

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However, the 12 year exclusivity period does not attach to the approval of an sBLA, potentially creating the opportunity for biosimilar competition, subject to any Orphan Drug exclusivity under the United States Orphan Drug Act.

See “ Risk Factors — Risks Related to Marketing Approval and Regulatory Matte rs — We may seek Orphan Drug designation for our product candidates in the United States, as well as for any of our product candidates in the EU, and we may be unsuccessful, or may be unable to maintain the benefits associated with Orphan Drug designation, including the potential for market exclusivity, for any product candidate for which we obtain Orphan Drug designation.” If we obtain FDA approval for any of our other biological product candidates, we expect any such product candidates to qualify for the 12 year period of exclusivity under the BPCIA.

However, there is a risk that this exclusivity could be shortened due to Congressional action or otherwise, or that the FDA will not consider any such approved product candidates to be reference products for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated.

Even if we obtain marketing authorization of our current or future product candidates in a major pharmaceutical market such as the United States, or the EU, we may not seek or obtain approval or commercialize our current products or product candidates in other markets, which would limit our ability to realize their full market potential.

If we obtain FDA approval for any of our other biological product candidates, we expect any such product candidates to qualify for the 12 year period of exclusivity under the BPCIA (such period may be shortened due to future regulatory changes).

In addition, the FDA may not consider any of our approved product candidates to be reference products for competing products that were submitted for regulatory approval.

If any competitor products were to enter the market, the sales of our approved products may be negatively impacted.

If we obtain marketing authorization of our current or future product candidates in a major pharmaceutical market, we may not seek or obtain approval or commercialize our current products or product candidates in other markets, which would limit our ability to realize their full market potential.

In order to market any products in a country or territory, we must establish and comply with numerous and varying regulatory requirements of such country or territory regarding safety and efficacy.

Regulatory requirements can vary widely from country to country, and clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not mean that regulatory approval will be

obtained in any other country.

Regulatory requirements can vary widely from country to country, and clinical trials conducted in one country may not be accepted by regulatory authorities in other countries.

Further, regulatory approval in one country does not mean that regulatory approval will be obtained in any other country.

Approval procedures vary among countries and can involve additional product testing and validation, additional administrative review periods and additional preclinical studies or clinical trials, which would be costly and time consuming and could delay or prevent the introduction of our current or future product candidates, or ARCALYST, in those countries.

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We may seek Orphan Drug designation for our product candidates in the United States, as well as for any of our product candidates in the EU, and we may be unsuccessful, or may be unable to maintain the benefits associated with Orphan Drug designation, including the potential for market exclusivity, for any product candidate for which we obtain Orphan Drug designation.

We have received Orphan Drug exclusivity and designation in the United States for ARCALYST for the treatment of pericarditis.

Regulatory authorities in some jurisdictions, including the United States and the EU, may designate drugs or biologics intended to treat small patient populations as Orphan Drug products, which are subject to a number of region-specific (e.g., tax credits, user fee exemptions and potential market exclusivity) rules and regulations.

See “ Business – Government Regulation ” for more information on applicable rules and regulations.

We have received Orphan Drug exclusivity in the United States for ARCALYST for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and pediatric patients 12 years and older.

We have received Orphan Drug designation in the United States for KPL-387 for the treatment of recurrent pericarditis.

In addition, we have received Orphan Drug designation in the EU for ARCALYST for the treatment of idiopathic pericarditis.

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Even if we obtain Orphan Drug designation for certain product candidates for a particular orphan indication in the United States or the EU, we may not be the first to obtain marketing approval for such orphan indication due to the uncertainties associated with developing pharmaceutical products.

In such case, subject to applicable laws in those jurisdictions, Orphan Drug exclusivity may no longer be available for our product candidates, if approved, unless we can show a significant benefit over the already approved orphan drug.

In such cases, subject to applicable laws in those jurisdictions, Orphan Drug exclusivity may no longer be available for our product candidates, if approved, unless we can show a significant safety or efficacy advantage over the already approved orphan drug.

Moreover, in the event our drug is deemed similar to the first approved orphan drug, we may be denied regulatory approval for our drug in such orphan indication for the duration of the Orphan Drug exclusivity period.

See “ Business – Government Regulation – Orphan Drug Designation ” and “ Business – Government Regulation – Regulatory Framework in the European Union – Orphan Medicinal Products ” for more information on applicable rules and regulations.

Further, in order to maintain Orphan Drug exclusivity in the EU, we must demonstrate that our product or product candidate has a significant benefit over other satisfactory methods.

If we are unable to do so, Orphan Drug exclusivity can be withdrawn.

In connection with the FDA’s approval of ARCALYST in the recurrent pericarditis indication, we received seven years of Orphan Drug exclusivity for ARCALYST for the treatment of recurrent pericarditis and reduction in risk of recurrence in adults and pediatric patients 12 years and older.

Even if we obtain Orphan Drug exclusivity for any of our product candidates, that exclusivity may not effectively protect those product candidates from competition because different drugs can be approved for the same disease or condition.

Even after an Orphan Drug is approved, the FDA can subsequently approve a later application for the same drug for the same disease or condition if the FDA concludes that the later drug is clinically superior in that it is shown to be safer in a substantial portion of the target populations, more effective or makes a major contribution to patient care.

We may also receive seven years of Orphan Drug exclusivity for KPL-387 in the same indication, should we receive FDA approval to market and commercialize the drug and satisfy the other requirements for such exclusivity.

Even if Orphan Drug exclusivity is obtained, that exclusivity may not effectively protect those product candidates from competition because different drugs can be approved for the same disease or condition.

Even after an Orphan Drug is approved, the FDA can subsequently approve a later application for the same drug for the same disease or condition if the FDA concludes that the later drug is clinically superior because of safety, efficacy or some other contribution to patient care.

In addition, a 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 designation.

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Foreign regulatory authorities may also make the same determination.

Orphan Drug designation neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

Orphan Drug designation also neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage in the regulatory review or approval process.

We may seek Breakthrough Therapy designation or Fast Track designation by the FDA, for one or more of our product candidates, which we may not receive.

Such designation may not lead to a faster development or regulatory review or approval process and does not increase the likelihood that our product candidates will receive marketing approval.

We may seek Breakthrough Therapy or Fast Track designation for one or more of our product candidates, which, if granted, offers the potential for a rolling review of a BLA if a number of conditions are met, which would allow data to be submitted and reviewed as they become available rather than waiting for the full data package to

become available to be submitted.

Rolling review is often faster than the FDA’s standard review process.

See “ Business – Government Regulation – Expedited Review and Approval ” for more information on applicable rules and regulations.

The FDA has broad discretion whether or not to grant Fast Track and Breakthrough Therapy designations, and even if we believe a particular product candidate is eligible for such designations, we cannot be certain that the FDA would decide to grant them.

Even if we obtain such designations for one or more of our product candidates, we may not experience a faster development process, review or approval compared to non-expedited FDA review procedures.

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Although product candidates receiving Fast Track and Breakthrough Therapy designation are generally eligible for the FDA’s priority review procedures, receiving such designations does not guarantee that the BLA for such product candidates will receive priority review.

See “ Business – Government Regulation ” for more information on applicable rules and regulations.

We may seek a PRIME designation from the EMA, a conditional MA or other designations, schemes or tools for one or more of our product candidates, which we may not receive.

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We may seek a PRIME (Priority Medicines) designation from the EMA, a conditional MA or other designations, schemes or tools for one or more of our product candidates, each of which offer incentives similar to a United States Breakthrough Therapy designation.

See “ Business – Government Regulation – Regulatory Framework in the European Union – PRIME Designation” and “ Business – Government Regulation – Regulatory Framework in the European Union – Marketing Authorization ” for more information on the applicable rules and regulations.

See “ Business – Government Regulation ” for more information on the applicable rules and regulations.

Even if we believe one of our product candidates is eligible for PRIME, the EMA may disagree and instead determine not to make such designation.

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The regulatory authorities in the EU have broad discretion whether to grant such an accelerated assessment, conditional marketing authorization or marketing authorization under exceptional circumstances, and, even if such assessment or authorization is granted, we may not experience a faster development process, review or authorization compared to conventional procedures.

Moreover, the removal or threat of removal of such marketing authorizations may create uncertainty or delay in the clinical development of our product candidates and threaten the commercialization prospects of our products and product candidates, if approved.

Moreover, the removal or threat of removal of such marketing authorizations may create uncertainty or delay in our clinical development plans or threaten our product candidates’ commercial prospects.

Such an occurrence could materially impact our business, financial condition and results of operations.

Due to the recent change in presidential administration, we face substantial uncertainty regarding potential regulatory developments in the United States that may adversely affect our business.

We face substantial uncertainty regarding the potential for changes in the regulatory environment in the United States following the change in presidential administration in January 2025.

While many of the Trump Administration’s proposed policies appear to be focused on deregulation, the new administration and federal government could adopt legislation, regulation or policies that adversely affect our business, including by making it more difficult to continue to market ARCALYST or by creating a more challenging and costly environment to pursue the development and commercialization of our current or future product candidates.

We face substantial uncertainty regarding potential regulatory developments in the United States that may adversely affect our business.

The current presidential administration and federal government could adopt legislation, regulation orders or policies that adversely affect our business, including by making it more difficult to continue to market ARCALYST or by creating a more challenging and costly environment to pursue the development and commercialization of our current or future product candidates.

For example, the federal government, including the FDA, may implement legislative, regulatory or policy changes regarding the standards for approving biologic products that we may be unable to satisfy or changes regarding the marketing of approved biologics that may limit or prohibit the advertising and promotion of ARCALYST and, if approved, our current or future product candidates.

The impending uncertainty could present new challenges or potential opportunities as we navigate the clinical development and approval process for our product candidates.

Additionally, because one objective of the current Trump administration appears to be to decrease spending in the federal government, the FDA could face staff reductions, which could impact the FDA’s ability to engage in routine regulatory and oversight activities and result in delays or limitations on our ability to proceed with clinical development programs and obtain regulatory approvals.

It is difficult to predict how executive actions that may be taken by the Trump administration may affect the FDA’s ability to exercise its regulatory authority.

If such executive actions impose constraints on the FDA’s ability to engage in routine oversight and product review activities in the normal course, our business may be negatively impacted.

The current presidential administration has also undertaken significant efforts to reduce the size and spending of the federal government, including at the FDA.

A significant reduction in the FDA’s workforce or the FDA’s budget, or other disruptions at the FDA, could materially impact the FDA’s ability to engage in a variety of activities that may affect our business, including routine regulatory and oversight activities.

The current administration has substantially reduced the FDA’s workforce and may make further reductions, which may lead to disruptions and delays in the FDA’s review and oversight of our product candidates and impact the FDA’s ability to provide timely feedback on our development programs.

Further, reductions in workforce in divisions of the FDA responsible for overseeing the importation of pharmaceutical goods may delay our manufacturing timelines.

Additionally, reductions in the FDA’s

review or inspection divisions could extend review timelines, delay or prevent pre-approval inspections and limit opportunities for FDA feedback on pending applications.

Any of these actions may delay or limit our ability to obtain FDA approval and commercialize our product candidates, including our ability to obtain regulatory approval for the technology transfer of ARCALYST drug substance manufacturing to Samsung.

Furthermore, the current administration has discussed several changes to the reach and oversight of the FDA, which could affect its relationship with the pharmaceutical industry, transparency in decision making and ultimately the cost and availability of prescription drugs.

Risks Related to Manufacturing and Our Reliance on Third Parties

We contract with third parties for manufacturing our commercial supply of ARCALYST and clinical supply for our product candidates and for certain research and other preclinical development, which is highly regulated and complex, and expect that we will continue to do so in the future.

We contract with third parties for manufacturing our commercial supply of ARCALYST and clinical supply for our product candidates and for certain research and other preclinical development.

This reliance on third parties increases the risk that we may not have sufficient quantities of ARCALYST or our product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our research and development or commercialization efforts.

We do not currently own or operate any late-stage or commercial manufacturing facilities.

Although we have built a development and manufacturing facility to produce drug substance to support certain research, preclinical and other clinical development for our product candidates, we rely, and expect to continue to rely, on third parties for the manufacture of our late-stage product candidates and certain early-stage product candidates for the majority of our clinical development efforts;

We rely, and expect to continue to rely, on third parties for the manufacture of our late-stage product candidates and certain early-stage product candidates for the majority of our clinical development efforts;

the commercial manufacture of our current and future products;

and labeling and packaging activities for our current and future products.

We rely on these third parties to produce, package and ship our products and product candidates at sufficient quality and quantity to support our and our collaboration partners’ commercialization and research and development efforts.

The manufacture of our current and future products and product candidates is highly regulated, complex and difficult, requiring a multi-step and controlled process, and even minor problems or deviations could result in ARCALYST or our product candidates failing to meet approved specifications, failed batches or other failures, such as defective products or manufacturing failures.

Due to the highly technical requirements of manufacturing our current and future products and product candidates and the strict quality and control specifications, we and our third party providers may be unable to manufacture or supply ARCALYST or our product candidates despite our and their efforts.

Failure to produce sufficient quantities of our products and product candidates could delay their development, result in supply shortages for our patients, result in lost revenue, if any, and diminish our potential profitability, as applicable, which may lead to lawsuits or could delay the introduction of our product candidates to the market.

Our reliance increases the risk that we will have insufficient quantities of ARCALYST and our product candidates or that ARCALYST and our product candidates are not produced at an acceptable cost or quality, or not in a timely manner due to, for example, deviations in operations or manufacturing facility control, or production interruptions caused by equipment failure and an inability to source adequate replacement parts and equipment, which could delay, prevent or impair our commercialization or research and development efforts.

From time to time, we have identified events in the ARCALYST manufacturing process that prevented distribution of ARCALYST material as planned, though this has yet to materially impact our ability to source sufficient ARCALYST material to cover our needs.

If, in the future, we are unable to source sufficient finished material, we may stock out or otherwise be unable to meet patient demand for ARCALYST, adversely affecting our business, results of operations and financial condition.

In addition, equipment used in the ARCALYST manufacturing process may no longer be supported by vendors in the event of equipment failure.

We rely on these third parties to produce, package and ship our products and product candidates at sufficient quality and quantity and in a timely manner in order to support our and our collaboration partners’ commercialization and research and development efforts.

The manufacture of our current and future products and product candidates is highly regulated, complex and difficult, requiring a multi-step and controlled process, and even minor problems or deviations could result in failed batches, reduced process yields or products that do not meet quality and specification requirements.

As a result, we and our third party providers may be unable to manufacture sufficient supply of ARCALYST or our product candidates despite our and our CDMOs’ best efforts.

Failure to produce sufficient quantities of our products and product candidates that comply with all specifications could delay their development, result in supply shortages for our patients, result in lost revenue and diminish our potential profitability.

This may lead to lawsuits or delay the introduction of our product candidates to the market.

Our reliance on third-party CDMOs increases the risk that we will have insufficient quantities of ARCALYST and our product candidates, or that such products may not be produced at acceptable cost, quality or in a timely manner due to, for example, deviations in operations or manufacturing facility control, or production interruptions caused by equipment failure and an inability to source adequate replacement parts and equipment.

Any of these could impair commercialization or clinical development efforts.

From time to time, we have identified events in the ARCALYST manufacturing process that have prevented the distribution of ARCALYST material as planned, though these events have not materially impacted our ability to supply ARCALYST.

If we cannot source sufficient quality finished material in the future, we may stock out, fail to meet patient demand or be forced to effect a recall, any which could adversely affect our business and financial condition.

Further, equipment used in the ARCALYST manufacturing process may no longer be supported by vendors in the event of equipment failure.

Such equipment may also not be repaired, replaced or qualified in a timely manner.

Further, reagents used for the analytical testing of ARCALYST have and may in the future become outdated, requiring qualification before new reagents may be used.

These issues may be exacerbated by increased clinical or commercial demand by us or our collaboration partners, or if we decide to develop ARCALYST in one or more additional indications or in additional territories.

We may be unable to adequately address current and future issues with the ARCALYST manufacturing process, which could prevent additional finished material from being distributed in a timely manner or within specifications.

If we are unable to source additional commercial supply of ARCALYST, if needed, we may be unable to

adequately meet patient demand for ARCALYST or may be required to effect a recall, any of which would adversely affect our business, results of operations and financial condition.

Reagents for analytical testing have and may in the future become outdated and may require qualification before new reagents may be used.

These risks may increase with higher clinical or commercial demand or if we expand ARCALYST to new indications or territories.

Regeneron is the sole manufacturer of ARCALYST drug substance and will remain so until we complete the technology transfer of the manufacturing process for ARCALYST drug substance to Samsung.

Regeneron is not obligated to accept our forecasts or purchase orders that are not in line with accepted forecasts and Regeneron may not have sufficient manufacturing capacity to meet our commercial or clinical demand for ARCALYST (including increased demand arising from our need to replace material lost to manufacturing issues).

Regeneron, in turn, relies upon CDMOs or other third parties to conduct fill/finish operations for ARCALYST.

In the event that a particular batch of ARCALYST fails to meet specifications, whatever the cause, we are nonetheless obligated to pay for such material pursuant to the terms of the Supply Agreement.

Regeneron not obligated to accept our forecasts or purchase orders in certain circumstances and Regeneron may not have sufficient manufacturing capacity to meet our commercial or clinical demand for ARCALYST (including increased demand arising from our need to replace material lost to manufacturing issues).

Regeneron, in turn, relies upon other third parties to conduct fill/finish operations for ARCALYST.

In the event that a particular batch of ARCALYST fails to meet specifications, whatever the cause, we are nonetheless obligated to pay for such material pursuant to the terms of the

Supply Agreement.

Further, we rely on a third party CDMO to package and label ARCALYST.

Our reliance on Regeneron (including its respective CDMOs) and our other CDMO as our sole manufacturers and/or service providers means that we do not have control over ARCALYST manufacturing operations and scheduling, which may impact our ability to meet commercial or clinical demand for ARCALYST.

We may also be subject to unexpected costs arising from any manufacturing or supply chain disruptions, which may materially impact our business, results of operations and financial condition.

Many of these risks may still be present after successful completion of the technology transfer of ARCALYST drug substance manufacturing and there is no guarantee that such technology transfer will materially diminish our ARCALYST manufacturing risk profile.

We have qualified or engaged, as applicable, CDMOs to produce our clinical product candidates.

Our reliance on Regeneron (including its respective CDMOs) and our other CDMOs as our sole manufacturers and/or service providers means that we do not have direct control over ARCALYST manufacturing operations and scheduling, which may impact our ability to meet commercial or clinical demand for ARCALYST.

We may also be subject to unexpected costs arising from any manufacturing or supply chain disruptions.

Many of these risks may still be present after successful completion of the technology transfer of ARCALYST drug substance manufacturing to Samsung and there is no guarantee that such technology transfer will materially diminish our ARCALYST manufacturing risk profile.

In addition, given the lead times we must provide to Regeneron and Samsung with respect to the commercial supply of ARCALYST, we must place purchase orders in advance based on projected demand.

Such projections involve risks and uncertainties.

We, Regeneron or Samsung may be unable to swiftly accommodate for unforeseen increases in commercial demand due to manufacturing capacity limitations.

We may also be required to estimate and order safety stock as part of our planned technology transfer of the manufacturing process for ARCALYST drug substance, which will be subject to a number of the same risks and uncertainties.

As a result, we may have too little ARCALYST inventory to meet actual demand or may pay for ARCALYST supply that we will be unable to sell.

We have also contracted with CDMOs to produce our clinical product candidates.

While we have manufacturing capabilities to support early development for our product candidates, we and our CDMOs may not be able to produce sufficient quantities of our product candidates or produce them at an acceptable quality, including as a result of global supply chain issues, which could delay, prevent or impair our development or commercialization efforts and increase costs.

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If our current supplier of drug substance and drug product for ARCALYST cannot produce sufficient quantities to satisfy our needs and Huadong’s needs, then this may have an adverse impact on our and Huadong’s business and operations.

A failure by our CDMOs to supply sufficient quantities of drug supply may cause us to breach our contractual obligations, triggering potential penalties, including termination of the agreement, if we fail to adequately cure such breach.

If we make manufacturing or formulation changes to our products or product candidates or change manufacturers or manufacturing processes, we may be unsuccessful in producing products or product candidates comparable to existing commercial supply or those used in prior clinical trials.

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In addition, as we plan to produce clinical trial and commercial material at a CDMO, the CDMO may be required to adopt different manufacturing protocols or processes.

For example, in March 2023, Regeneron formally initiated a technology transfer with respect to the manufacturing process for ARCALYST drug substance.

Our replacement CDMO, Samsung, will utilize a modified manufacturing process from that used by Regeneron, which could require lengthy development, regulatory review and approval.

For more information see “ Risk Factors — Risks Related to Manufacturing and Our Reliance on Third Parties — We are conducting a technology transfer with respect to the manufacturing process of ARCALYST drug substance from Regeneron to Samsung and the analytical testing methods of ARCALYST drug substance and drug product to new CTLs.

Such technology transfer will be subject to significant risks and uncertainties.

The facilities used by our CDMOs to manufacture, label and package ARCALYST and our current and future product candidates may be inspected by regulatory authorities in connection with the submission of our MAs to, and review by, regulatory authorities or based on their work for other clinical trial sponsors.

While we provide oversight of such activities, we do not and will not control the manufacturing process of, and will be completely dependent on, our CDMOs for compliance with cGMPs and other regulatory requirements in connection with the manufacturing, labeling, and packaging of current and future products and product candidates.

If our CDMOs cannot successfully perform such functions in conformity with our specifications and the strict regulatory requirements of regulatory authorities, they will not be able to secure or maintain regulatory approval for their facilities.

While we review the compliance history and performance of our CDMOs and have the ability to audit their compliance and performance, we have no direct control

over the ability of our CDMOs to maintain adequate quality control, quality assurance and qualified personnel other than through quality monitoring in accordance with our agreements with the CDMOs.

If regulatory authorities do not approve these facilities for the manufacturing, labeling and packaging of our product candidates or if they withdraw any such approval in the future, we may need to find alternative facilities or CDMOs, which would significantly impact our ability to develop, obtain regulatory approval for or market ARCALYST or our current or future product candidates, if approved.

Further, our failure, or the failure of our third party CDMOs, to comply with applicable regulations could result in sanctions being imposed on us, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures or recalls of products or product candidates, if approved, operating restrictions and criminal prosecutions, any of which could significantly and adversely affect our business and supplies of our products or product candidates.

Many additional factors could cause production interruptions at our facilities or at the facilities of our third party providers, as well as disruptions in travel, shipping or delivery capabilities into and within the countries in which we or our manufacturers produce ARCALYST or our product candidates or disruptions to production capabilities, including due to the impact of natural disasters, accidents, boycotts, labor disputes, political and economic instability, such as acts of terrorism or war and an epidemic, pandemic or other outbreak of disease.

The occurrence of any such event could adversely affect our ability to satisfy the required supply for any of ARCALYST or our product candidates or successfully complete preclinical and clinical development, which would result in additional costs to us or impair our ability to generate revenue and would harm our business, financial condition and prospects significantly.

With respect to ARCALYST, Samsung will utilize a modified manufacturing process from that used by Regeneron, which could require lengthy development, regulatory review and approval.

Facilities used by our CDMOs to manufacture, label and package ARCALYST and our product candidates may be inspected by regulatory authorities in connection with MA submissions or based on work for other sponsors.

While we oversee these CDMO activities, we do not control their manufacturing operations and rely entirely on CDMOs for compliance with cGMP and other regulatory requirements in connection with manufacturing, labeling and packaging operations.

If our CDMOs fail to meet product specifications or regulatory standards, they will not be able to secure or maintain regulatory approval to operate their facilities.

Although we have the contractual right to review compliance history and audit their performance, we lack direct control over CDMO operations, quality systems and personnel.

Failure to obtain facility approval or the subsequent loss or withdrawal of facility approval could require us to identify alternative CDMOs, significantly impacting development timelines, regulatory approval outcomes or commercialization ability.

Failure by us or CDMOs to comply with regulations could result in sanctions, including clinical holds, fines, injunctions, civil penalties, delays, suspension or withdrawal of approvals, license revocation, seizures, recalls, operating restrictions or criminal penalties, any of which could materially affect our business and product supply.

Other factors that may adversely affect manufacturing operations include natural disasters;

labor disputes;

political and economic instability, such as acts of terrorism or war;

changes in importation or exportation

requirements and policy;

increased tariffs and/or taxes;

disruptions at relevant government agencies, including the FDA, overseeing the importation of goods;

or an epidemic, pandemic or other outbreak of disease.

The occurrence of any such event could adversely affect our clinical and commercial supply, which would result in additional costs, impair our ability to generate revenue or otherwise harm our business, financial condition and prospects significantly.

Supply chain issues related to important ancillary products may also adversely affect our business.

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If we encounter shortages of such placebo, our clinical trials may be substantially delayed unless and until we can source suitable replacements.

Our products and product candidates may also compete with other product candidates and approved products for access to and capacity within manufacturing, packaging, and labeling facilities.

There are a limited number of CDMOs that operate under cGMP regulations and that might be capable of performing such functions for us.

Furthermore, given the limited capacity at such CDMOs and the long lead times needed to reserve capacity, CDMOs may require monetary commitments in connection with such reservations as well as fees for changes or cancellations or additional fees to accommodate expediting of manufacturing, packaging, and labeling .

Our products and product candidates may also compete with other product candidates and approved products for access to and capacity within the limited number of cGMP-compliant CDMOs that operate manufacturing, packaging and labeling facilities.

For our product candidates, we may wait to reserve capacity until we can be informed by data from the clinical trials of our product candidates, which may take several months.

Any significant delay in the supply of clinical materials for our product candidates could considerably delay conducting our clinical trials and potential regulatory approval of our product candidates.

Alternatively, we may project when we may need additional clinical material for our product candidates and reserve capacity “at-risk” prior to our product candidates having generated data from their then current clinical trials.

In addition, given the lead times we must provide to Regeneron or Samsung, following the technology transfer of ARCALYST drug substance manufacturing, with respect to the commercial supply of ARCALYST, we must place purchase orders based on projected demand.

Such projections involve risks and uncertainties.

For example, we may be unable to swiftly accommodate for unforeseen increases in commercial demand for ARCALYST given the lead times we must provide to Regeneron and limitations on Regeneron’s manufacturing capacity for ARCALYST.

These risks may result in additional costs or delays in manufacturing clinical materials for our product candidates when and if we actually need them and commercial materials for ARCALYST and may result in having too little or too much of our product candidates or ARCALYST in inventory to meet actual demand.

Any performance failure on the part of our existing or future CDMOs could delay, as applicable, clinical development or marketing approval or commercialization efforts for our current and future products.

Any significant delay in the supply of clinical materials could considerably delay our clinical development efforts.

Furthermore, given the limited capacity at many CDMOs and the long lead times needed to reserve capacity, CDMOs may require monetary commitments in connection with such reservations as well as fees for changes or cancellations or expedited operations.

Any CDMO manufacturing failure could delay or prevent, as applicable, clinical development, marketing approval or commercialization efforts for our current and future products.

If our current CDMOs cannot perform as agreed, we may be required to replace them.

Although we believe that there are several potential alternative CDMOs who could provide the services we currently contract for, we may incur added costs and delays in identifying and qualifying any such replacement.

Although we believe that there are several potential alternative CDMOs, we may incur added costs and delays in identifying and qualifying any such replacement.

In addition, we may not be able to establish new agreements on acceptable terms, if at all, with such alternative manufacturers.

Further, establishing replacement CDMOs for ARCALYST or our product candidates, if required, is unlikely to be accomplished in a timely or cost-effective manner, if at all.

Furthermore, despite our efforts, we may be unable to procure a replacement contractor or do so on commercially reasonable terms, which could have a material adverse impact upon our business, results of operations and financial condition.

If we or our CDMOs are able to find a replacement contractor, such replacement contractor would need to be qualified and may require additional regulatory approval, which could result in further delay.

Failing to procure a replacement CDMO on commercially reasonable terms could have a material adverse impact upon our business, results of operations and financial condition.

We are conducting a technology transfer with respect to the manufacturing process of ARCALYST drug substance from Regeneron to Samsung and the analytical testing methods of ARCALYST drug substance and drug product to new CTLs.

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In March 2023, Regeneron, our sole supplier of ARCALYST drug substance, initiated a technology transfer related to the manufacturing process of ARCALYST drug substance and the analytical testing methods of ARCALYST drug substance and drug product.

Since then, we have worked to qualify Samsung who will serve as the new manufacturer of ARCALYST drug substance and new CTLs who will serve as the new testing labs of ARCALYST drug substance and drug product.

We have also contracted with Samsung to document the technology transfer and enable the commercial manufacturing of ARCALYST drug substance should the technology transfer succeed.

Since then, we have worked to qualify Samsung as the new manufacturer of ARCALYST drug substance, and new CTLs who will serve as the new testing labs of ARCALYST drug substance and drug product.

We have also contracted with Samsung to document the technology transfer and enable commercial manufacturing, if successful.

Pharmaceutical development, manufacture and analytical testing requires significant expertise and capital investment, and the manufacture and testing of biologics, in particular, can be complex and difficult.

While we have selected Samsung as our replacement CDMO and have selected replacement CTLs, we are still in the early stages of the technology transfer process and still must determine whether Samsung and such CTLs can meet our requirements regarding production costs and yields, process controls, quality control, quality assurance, data integrity and cGMP compliance, among other factors.

We would also need to source sufficient raw materials to facilitate new manufacturing and analytical testing, which may be affected by supply chain disruptions, materials shortages or an inability to negotiate satisfactory terms with suppliers.

The technology transfer process is a time-consuming and difficult task that may require significant time and focus from our management and technical teams.

Further, because of the complexities of this process, the technology transfer may be subject to substantial delay, which could materially harm our business and operations.

Because Samsung will be manufacturing ARCALYST drug substance at a new manufacturing site and with a potentially different manufacturing process, and such CTLs will be testing ARCALYST drug substance and drug product at new testing sites and potentially with different testing methods, we expect that the FDA will need to approve such changes before we are able to complete the technology transfer.

While we have selected Samsung as our replacement CDMO and have selected replacement CTLs, we are still in the technology transfer process, which is a time-consuming and difficult task that may require significant time and focus from our management and technical teams.

Further, because of the complexities of this process, the technology transfer may be subject to substantial delay.

We have yet to receive final regulatory approval to proceed.

Such final approval may be substantially delayed due to the complexity of the technology transfer and related processes, an inability to successfully complete validating Samsung as a CDMO and our new CTLs, disruptions at the FDA and other factors.

Such a delay could materially harm our business and operations.

In addition to the need to successfully complete the technology transfer of ARCALYST drug substance manufacturing to Samsung, the facility at which Samsung will manufacture ARCALYST will require approval by the FDA prior to the sale of ARCALYST manufactured at such facility.

The FDA generally requires that any replacement CDMO be able to manufacture drug substance at sufficient levels of comparability with the materials produced by the original manufacturer.

We are still in the process of confirming comparability between the drug substance produced by Samsung and the drug substance produced by Regeneron.

Failure to provide sufficient evidence of comparability may result in the FDA requesting a bioequivalence or pharmacokinetic study, which would delay our expected technology transfer timeline.

Even if such study were to be performed, there is no guarantee that the FDA would accept our findings and approve any new facilities for the manufacture of ARCALYST drug substance.

In addition, because the Samsung manufacturing facility is located in South Korea, unlike Regeneron’s United States-based manufacturing facility, we may face new risks arising from tariffs, import/export restrictions, customs proceedings, product being lost or damaged during international shipping, differing regulations, supply chain interruptions and other risks inherent to international operations.

We cannot guarantee that the FDA will approve the Samsung facility.

Further, because the Samsung manufacturing facility is located in South Korea, unlike Regeneron’s United States-based manufacturing facility, we may face new risks arising from tariffs, import/export restrictions, customs proceedings, product being lost or damaged during international shipping, differing regulations, supply chain interruptions and other risks inherent to international operations.

These risks, should they occur, could increase our costs and affect our ability to meet clinical and commercial demand for ARCALYST, which could materially impact our business, financial condition and results of operations.

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During such time, Regeneron will remain subject to many of the risks described elsewhere in this “ Risk Factors ” section, including the risk that it is unable to manufacture sufficient quantities of ARCALYST and at sufficient quality to meet ours and our patients’ and collaborators’ needs.

Further, because we expect the timeline for any successful technology transfer to extend beyond Regeneron’s contractual obligations, our ability to meet patient demand will depend significantly on whether we can secure sufficient safety stock from Regeneron, negotiate continued ARCALYST drug substance manufacture by Regeneron beyond its contractual obligations or some combination thereof.

Purchasing significant amounts of safety stock would require substantial upfront capital investment and, if the technology transfer process is delayed beyond our expectation, such safety stock may expire or be depleted before Samsung can begin manufacturing ARCALYST drug substance.

Further, because we expect the timeline for any successful technology transfer to extend beyond Regeneron’s contractual obligations, meeting patient demand will depend significantly on securing sufficient safety stock from Regeneron, negotiating continued ARCALYST drug substance manufacture by Regeneron beyond its contractual obligations or some combination thereof.

Purchasing safety stock requires significant upfront investment and such stock may expire or run out before completion of the technology transfer.

Regeneron may also disagree with our forecasted safety stock requirements and manufacture less ARCALYST drug substance than we request, exposing us to risks if the technology transfer process is significantly delayed.

Any arrangement that we negotiate with Regeneron to manufacture ARCALYST beyond their contractual obligations may not be on as favorable terms as our current relationship, which could materially increase our costs and as a result negatively impact our financial condition and results of operations.

A failure to secure sufficient safety stock or negotiate satisfactory manufacturing terms with Regeneron could result in supply shortages for our patients and collaborators while we work to complete the technology transfer.

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We expect that Samsung will be our sole source manufacturer of ARCALYST drug substance following such qualification.

Such technology transfer will be subject to significant risks and uncertainties.

” Further, we have historically outsourced all ARCALYST packaging and labeling activities to a single CDMO and expect to do so for any future approved products.

Our ability to continue to commercialize ARCALYST, to develop our product candidates, and to ultimately supply our commercial products in quantities sufficient to meet market demand, depends in part on our ability to obtain the drug substance and drug product for ARCALYST and these product candidates and package and label such drugs, as applicable, in each case in accordance with regulatory requirements and in sufficient quantities for commercialization and clinical testing.

Successful completion of a technology transfer of the manufacturing process for ARCALYST drug substance will be integral to our ability to meet such requirements.

With respect to ARCALYST, we do not currently have arrangements in place for a redundant or second-source manufacturer of drug substance or drug product, or a redundant or second-source packager and labeler, in the event any of our current vendors cease or have a substantial delay in their operations or stop offering us sufficient quantities of these materials for any reason, as applicable.

With respect to abiprubart, KPL-387 and KPL-1161, while we anticipate having more than one source for drug substance now or in the future, as applicable, such sources are nonetheless limited and subject to similar risks as our other products and product candidates.

We are not certain that our suppliers will be able to meet our demand for our products and product candidates, because of the nature of our agreements with those suppliers, our limited experience with those suppliers or our relative importance as a customer to those suppliers given their manufacturing capacity constraints.

It may be difficult for us to assess their ability to timely meet our demand in the future based on past performance.

While our suppliers have

generally met our demand on a timely basis in the past, they may subordinate our needs in the future to their other customers.

We do not currently have arrangements in place for a redundant or second-source manufacturer of ARCALYST drug substance or drug product, or a redundant or second-source packager and labeler, in the event any of our current vendors cease or have a substantial delay in their operations or stop offering us sufficient quantities of these materials for any reason, as applicable.

In addition to manufacturing our products and product candidates in the quantities that we believe would be required to meet anticipated market demand, our third party manufacturers may need to increase manufacturing capacity and, in some cases, alternative sources of commercial supply may need to be secured, which could involve significant challenges and may require additional regulatory approvals.

In addition, the development of commercial-scale manufacturing capabilities may require us and our third party manufacturers to invest substantial additional funds and hire and retain the technical personnel who have the necessary manufacturing experience.

Neither we nor our third party manufacturers may successfully complete any required increase to existing manufacturing capacity in a timely manner, or at all.

Moreover, our ability to progress our preclinical and clinical programs or successfully commercialize our products could be materially and adversely impacted if any of the third party suppliers upon which we rely for raw materials and preclinical and clinical stage product candidate and commercial stage product supply were to experience a significant business challenge, disruption or failure due to issues such as financial difficulties or bankruptcy, issues relating to other customers such as regulatory or quality compliance issues, or other financial, legal, regulatory or reputational issues.

In addition, the development of commercial

materials and preclinical and clinical stage product candidate and commercial stage product supply were to experience a significant business challenge, disruption or failure due to issues such as financial difficulties or bankruptcy, issues relating to other customers such as regulatory or quality compliance issues, or other financial, legal, regulatory or reputational issues.

Additionally, any damage to or destruction of our manufacturing facilities or equipment or those of our third party manufacturers’ or suppliers’ facilities or equipment may significantly impair our ability to manufacture our products and product candidates on a timely basis.

In addition to the above, we have entered into, and may, in the future, enter into collaboration and other agreements requiring us to provide commercial or clinical drug supply to third party partners.

A failure by our CDMOs to supply sufficient quantities of drug supply may cause us to breach our contractual obligations, triggering potential penalties under our agreements, including termination of such agreements, if we fail to adequately cure such breach.

Establishing additional or replacement suppliers for the drug substance and drug product used in ARCALYST or our product candidates, if required, is unlikely to be accomplished quickly and can take several years, if at all.

Furthermore, despite our efforts, we may be unable to procure a replacement supplier or do so on commercially reasonable terms, which could have a material adverse impact upon our business.

If we or our CDMOs are able to find a replacement supplier, such replacement supplier would need to be qualified and may require additional regulatory approval, which could result in further delay.

While we and our CDMOs may seek to maintain adequate inventory of the drug substance and drug product used in ARCALYST or our product candidates, any interruption or delay in the supply of components or materials, or our inability to obtain such drug substance and drug product from alternate sources of comparable quality at acceptable prices in a timely manner could impede, delay, limit or prevent our development or commercialization efforts, which could harm our business, results of operations, financial condition and prospects.

Certain of the materials required in the manufacture and the formulation of our products and product candidates are derived from biological sources.

Such materials are difficult to procure and may be subject to contamination or recall.

Access to and supply of sufficient quantities of raw materials which meet the technical specifications for the production process is challenging, and often limited to single-source suppliers.

Finding an alternative supplier could take a significant amount of time and involve significant expense due to the nature of the products and the need to obtain regulatory approvals.

If we or our manufacturers are unable to purchase the materials necessary for the manufacture of ARCALYST or our product candidates on acceptable terms, in a timely manner, at sufficient quality levels, or in adequate quantities, if at all, our ability to produce sufficient quantities of such drugs for clinical or commercial requirements would be negatively impacted.

A material shortage, contamination, recall or restriction on the use of certain biologically derived substances or any other material used in the manufacture of our products and product candidates could adversely impact or disrupt manufacturing, which would increase costs and impair our ability to generate revenue from the sale of ARCALYST or our product candidates, if approved.

Access to and supply of sufficient quantities of raw materials which meet the technical specifications for the production process is challenging and often limited to single

Our business involves the use of hazardous materials, and we and our third party manufacturers and suppliers must comply with environmental laws and regulations, which can be expensive and restrict how we do business.

Our research and development activities and our third party manufacturers’ and suppliers’ activities involve the controlled storage, use and disposal of hazardous materials owned by us, including the components of ARCALYST or our product candidates and other hazardous compounds.

Our business involves the controlled storage, use and disposal of hazardous materials owned by us.

We and our manufacturers and suppliers are subject to laws and regulations governing the use, manufacture, storage, handling and disposal of these hazardous materials.

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Although we believe that our safety procedures and the safety procedures utilized by our third party manufacturers and suppliers for handling and disposing of these materials generally comply with the standards prescribed by these laws and regulations, we cannot guarantee that this is the case or eliminate the risk of accidental contamination or injury from these materials.

In such an event, we may be held liable for any resulting damages and such liability could exceed our resources, and state or federal or other applicable authorities may curtail our use of certain materials or interrupt our business operations.

In such an event, we may be held liable for any resulting damages and such liability could exceed our resources, and state, federal or other applicable authorities may curtail our use of certain materials or interrupt our business operations.

Furthermore, environmental laws and regulations are complex, change frequently and have tended to become more stringent.

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We do not currently carry biological or hazardous waste insurance coverage.

We rely, and expect to continue to rely, on third parties, including independent investigators and CROs, to activate sites, conduct and otherwise support our research activities, preclinical studies, clinical trials and other trials for our product candidates.

We rely, and expect to continue to rely, on third parties to support our research activities, preclinical studies, clinical trials and other trials for our product candidates.

If these third parties do not successfully carry out their contractual duties, comply with regulatory requirements or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our product candidates, and our business could be substantially harmed.

We rely on medical institutions, clinical investigators, contract laboratories and other third parties, such as CROs, to activate sites, conduct or otherwise support our preclinical studies and clinical trials for our product candidates properly and on time.

We also rely on third parties to conduct other research related to our product candidates.

We expect to rely heavily on these parties for such site activation, execution of and otherwise supporting clinical trials for our product candidates.

While we have agreements governing their activities and we review the compliance history and performance of our CROs as well as have the ability to audit such activities, we have no direct control over their activities and have limited influence over their actual performance other than through quality monitoring in accordance with our agreements with the CROs.

The third parties with whom we contract for execution of our preclinical studies and our clinical trials play a significant role in the conduct of these studies and trials and the subsequent collection and analysis of data.

Except for restrictions imposed by our contracts with such third parties, we have limited ability to control the amount or timing of resources that they devote to our programs.

Although we rely on these third parties to conduct our preclinical studies and clinical trials in accordance with applicable GLP or GCP requirements, we remain responsible for ensuring that each of our clinical trials is conducted in accordance with the applicable protocol, legal and regulatory requirements and scientific standards, and our reliance on these third parties does not and will not relieve us of our regulatory responsibilities.

We rely and expect to continue to rely on medical institutions, clinical investigators, contract laboratories and other third parties, such as CROs, to conduct research, activate sites, conduct or otherwise support our preclinical studies and clinical trials for our product candidates.

While we have certain contractual rights to oversee, review and audit our CROs, we have no direct control over their activities and performance.

Our CROs play a significant role in the conduct of our studies and trials and the subsequent collection and analysis of data.

Except for restrictions imposed by our contracts with such third parties, we have limited ability to control their conduct and compliance with applicable protocol, legal and regulatory requirements.

For any violations of laws and regulations during the conduct of our preclinical studies or clinical trials, we could be subject to warning letters or enforcement actions that may include civil penalties and criminal prosecution.

We and our CROs are required to comply with regulations, including GCPs, for conducting, monitoring, recording and reporting the results of clinical trials to ensure that the data and results are scientifically credible and accurate, and that the trial participants are adequately informed of the potential risks of participating in clinical trials and their rights are protected.

If we or our CROs fail to comply with applicable GCPs, the clinical data generated in our clinical trials may be deemed unreliable, and regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

In addition, our clinical trials must be conducted with product candidates produced under cGMPs or similar foreign regulations.

Our failure or the failure of our CROs to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process and could also subject us to enforcement action.

We also are required to register certain clinical trials and post the results of completed

clinical trials on a government-sponsored database within certain timeframes.

Failure to do so when required can result in fines, adverse publicity and civil and criminal sanctions.

Although we have and intend to continue to design the clinical trials for our product candidates, CROs will activate sites and conduct and oversee all of the clinical trials together with the various clinical trial sites that we engage to conduct the studies.

If we or our CROs fail to comply with applicable GCPs, the clinical data generated in our

clinical trials may be deemed unreliable, and regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

In addition, our clinical trials must be conducted with product candidates produced under cGMPs.

Although CROs may perform the services we request, we are responsible for ensuring that our CROs comply with GCPs or other regulatory requirements in providing their services and will be responsible for failing to meet these requirements.

Failure to comply with applicable regulations may require us to repeat clinical trials, which would delay the regulatory approval process and could also subject us to enforcement action.

Although we design the clinical trials for our product candidates, we rely on CROs to activate sites and conduct and oversee such trials.

As a result, many important aspects of our development programs for our product candidates, including their conduct and timing, will be outside of our direct control.

Our reliance on third parties to activate sites and conduct future clinical trials will also result in less direct control over the management of data developed through clinical trials than would be the case if we were relying entirely upon our own staff.

Communicating with outside parties can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.

Outside parties may:

Communicating with CROs can also be challenging, potentially leading to mistakes as well as difficulties in coordinating activities.

● have staffing difficulties;

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● form relationships with other entities, some of which may be our competitors.

These factors may materially adversely affect the willingness or ability of third parties to activate sites and conduct and oversee our clinical trials and may subject us to unexpected cost increases that are beyond our control.

If the CROs, their subcontractors or the clinical trial sites do not perform clinical trials in a satisfactory manner, breach their obligations to us or fail to comply with regulatory requirements, the development, regulatory approval and commercialization of our product candidates may be delayed or unsuccessful.

In addition, if we are unable to rely on clinical data collected by our CROs, their subcontractors or the clinical trial sites, we could be required to repeat, extend the duration of or increase the size of any clinical trials we conduct, and this could significantly delay commercialization and require significantly greater expenditures.

Further, if our CROs, their subcontractors or the clinical trial sites fail to devote sufficient resources to the development of our product candidates, or if their performance is substandard, it may delay or compromise the prospects for approval and commercialization of our product candidates.

In addition, the use of third party service providers requires us to disclose our proprietary information to these parties, which could increase the risk that this information is misappropriated.

If the third parties conducting our preclinical studies or our clinical trials do not perform their contractual duties or obligations, experience significant business challenges, disruptions or failures, do not meet expected deadlines, terminate their agreements with us or need to be replaced, or if the quality or accuracy of the data they obtain is compromised due to their failure to adhere to our protocols or to GCPs, or for any other reason, we may need to enter into new arrangements with alternative third parties.

These factors may materially adversely affect the willingness or ability of third parties to activate sites and conduct and oversee our clinical trials.

If the CROs, their subcontractors or the clinical trial sites do not perform clinical trials in a satisfactory manner, do not devote sufficient resources to a trial, breach their obligations to us or fail to comply with regulatory requirements, the development, regulatory approval and commercialization of our product candidates may be delayed or unsuccessful.

If the third parties conducting our preclinical studies or our clinical trials do not perform their contractual duties, encounter any of the risks discussed above or choose to terminate their agreements with us, we may need to enter into new arrangements with alternative third parties.

This could be difficult, costly or impossible, and our preclinical studies or clinical trials may need to be extended, delayed, terminated or repeated.

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ARCALYST currently faces competition in its CAPS and DIRA indications and is facing potential future competition in its recurrent pericarditis indication.

KPL-387 is being developed for recurrent pericarditis and we believe, if commercialized, would likely face additional competition from drugs that may offer either more convenient dosing methods or frequencies than what is currently available.

We have not yet announced an indication for KPL-1161, but expect that it will compete with a number of drugs that inhibit IL-1 or other mechanisms.

Competition may come from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide, each of whom may market and sell drugs or biologics or pursue the development of therapies in the fields in which we are interested.

KPL-387 is being developed for recurrent pericarditis and we believe, if commercialized, would likely face additional competition from drugs that may offer, among other things, more convenient dosing methods or frequencies than what is currently available.

We have not yet announced an indication(s) for KPL-1161, but expect that

it will compete with a number of drugs that inhibit IL-1 or other mechanisms.

Competition may come from a range of pharmaceutical and biotechnology companies, each of whom may market and sell drugs or biologics or pursue the development of therapies in the fields in which we are interested.

Some of these competitive products and therapies are based on scientific approaches that are the same as or similar to our approach, and others are based on entirely different approaches.

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See “ Business – Competition ” for a list of our principal competition.

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

Mergers and acquisitions in the pharmaceutical and biotechnology industries may result in even more resources being concentrated among a smaller number of our competitors.

Many of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, clinical trials, obtaining regulatory approvals and marketing approved products than we do.

Mergers and acquisitions in the pharmaceutical and biotechnology industries may further concentrate resources among a smaller number of our competitors.

Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

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

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

Further, a competitor conducting a clinical trial in a rare disease indication for which we market a product may reduce the number of patients on our commercial therapy by recruiting such patients to be trial participants.

Our competitors also may obtain FDA or other regulatory approval and/or marketing exclusivity for their products more rapidly than we may obtain for ours, which could result in our competitors establishing a strong market position before we are able to enter the market.

Our competitors may also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites, trial participant enrollment and technologies complementary to our programs.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize products that are safer, are more effective, have fewer or less severe side effects, are more convenient or are less expensive than ours.

Clinical trials in a rare disease indication for which we market a product may reduce the number of patients on our commercial therapy by recruiting such patients to be trial participants.

Our competitors also may obtain FDA or other regulatory approval and/or marketing exclusivity for their products before us, establishing a strong market position before we are able to enter the market.

Further, our clinical trials may need to compete for participants and trial sites against other drugs in clinical development for the same indication.

We believe the key competitive factors affecting the success of ARCALYST and any product candidates that we successfully develop and commercialize, are their efficacy, safety, convenience, price, the effectiveness of companion diagnostics in guiding the use of related products, market acceptance by prescribers and patients, the level of biosimilar competition and the availability of reimbursement from government and other third party payors.

We believe the key competitive factors affecting the success of ARCALYST and any product candidates that we successfully develop and commercialize, are their efficacy, safety, convenience, price, the effectiveness of companion diagnostics (if any) in guiding the use of related products, market acceptance by prescribers and patients, the level of biosimilar competition and the availability of reimbursement from government and other third party payors.

We may not be successful in executing our growth strategy to identify, discover, develop, in-license or acquire additional product candidates or technologies, and our growth strategy may not deliver the anticipated results or we may refine or otherwise alter our growth strategy.

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We have acquired or in-licensed certain of our existing product candidates, and as part of our strategy we plan to identify new product candidates or technologies that we believe are complementary to our existing portfolio.

We may do this through our internal discovery program, or by acquiring the rights to product candidates and technologies through a variety of transaction types, including in-licensing, strategic transactions, mergers or acquisitions.

If we are unable to identify, discover, develop, in-license or otherwise acquire and integrate product candidates, or their related companies, in accordance with this strategy, our ability to pursue this component of our growth strategy would be limited and we

may need to refine or otherwise alter this strategy.

We may do this through our internal discovery program, or by acquiring the rights to product candidates and technologies from third-parties.

We cannot be certain that we will be successful in such efforts, and even if we are successful in such efforts, we cannot be certain that such discovery or transaction will be on favorable terms, or that, following any such discovery or transaction, we will be able to realize the intended benefits of it.

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We will need to continue to devote a substantial amount of time and personnel to research, develop and commercialize any such in-licensed or acquired product candidate or technology, or integrate any new business, and we may decide to reprioritize our efforts even after having expended resources on a particular prospect.

Our research programs and business development efforts, including businesses or technology acquisitions, collaborations or licensing attempts, may fail to yield additional complementary or successful product candidates for clinical development and commercialization or successful business combinations for a number of reasons, including, but not limited to, the following:

Our research programs and business development efforts may fail to yield additional complementary or successful product candidates for clinical development and commercialization for a number of reasons, including:

● we may be unsuccessful in identifying potential product candidates or businesses with a high probability of success for development progression;

● we may not be able or willing to assemble sufficient resources or expertise to in-license, acquire or discover additional product candidates or acquire businesses or undertake business combinations, collaborations, or other strategic transactions;

● we may not be able to agree to acceptable terms with potential licensors, partners or acquisition targets;

● we may incur substantial liabilities as part of an acquisition or merger that may not be offset by the benefits of the acquired assets or the synergies we hope to realize;

● any product candidates or technologies to which we acquire the rights or that we discover may not allow us to leverage our expertise and our development and commercial infrastructure as currently expected.

If any of these events occurs, we may not be successful in executing our growth strategy to identify, discover, develop, in-license or acquire additional product candidates or technologies or to acquire businesses or undertake business combinations, collaborations, or other strategic transactions, or our growth strategy or strategic transactions may not deliver the anticipated results or we may refine or otherwise alter this strategy.

The consummation or performance of any acquisition, business combination, collaboration or other strategic transaction we may undertake in furtherance of our growth strategy or any refined or otherwise altered strategy, may involve additional risks, such as difficulties in assimilating different workplace cultures;

● insufficient resources or expertise to capitalize on opportunities;

● failure to agree to acceptable terms with potential licensors, partners or acquisition targets;

● incurring substantial liabilities as part of a transaction that outweigh the benefits or synergies we hope to realize;

● being unable to leverage our expertise and development and commercial infrastructure as initially expected.

If any of these events occurs, we may not be successful in executing our growth strategy.

Our growth strategy or strategic transactions may not deliver the anticipated results or we may need to spend significant resources to refine or otherwise alter our strategy.

The consummation or performance of any acquisition, business combination, collaboration or other strategic transaction in furtherance of our growth strategy may involve additional risks, such as difficulties in assimilating different workplace cultures;

retaining personnel and integrating operations, which may be geographically dispersed;

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We have entered into and may seek to enter into collaboration, licensing or other strategic transactions or arrangements to further develop, commercialize or otherwise attempt to realize value from one or more of our products and product candidates instead of developing or commercializing our products and product candidates ourselves.

example, in February 2022, we granted Huadong exclusive rights to develop and commercialize ARCALYST in the Asia Pacific region, excluding Japan.

In August 2022, we entered into a license agreement with Genentech where we granted exclusive worldwide rights to develop and commercialize vixarelimab.

To the extent that we decide to enter into such transactions or arrangements, we may face significant competition in seeking appropriate collaborators, licensees or other strategic partners.

Moreover, these transactions and arrangements are complex and time consuming to negotiate, document, implement and to close or maintain.

We may not be successful in our efforts to establish collaborations, licenses or other strategic transactions or arrangements should we choose to do so.

The terms of any such transactions or arrangements that we may establish may have unfavorable tax consequences for our shareholders in the United States.

Further, granting territory-specific rights for our products and product candidates may reduce their attractiveness for subsequent business development activity.

In addition, our right to grant a sublicense of intellectual property licensed to us under certain of our current agreements requires the consent of the applicable licensor.

We have granted Huadong exclusive rights to develop and commercialize ARCALYST in the Huadong Territory and we have entered into a license agreement with Genentech where we granted exclusive worldwide rights to develop and commercialize vixarelimab.

To the extent that we decide to enter into additional transactions or arrangements, we must spend time and resources to identify appropriate collaborators, licensees or other strategic partners.

Moreover, these transactions and arrangements are complex and time consuming to negotiate, document, implement and close.

Further, the terms of any such transactions or arrangements that we may establish may have unfavorable tax consequences for our shareholders in the United States.

Granting territory-specific rights for our products and product candidates may also reduce their attractiveness for subsequent business development activity.

In addition, our right to grant a sublicense of intellectual property licensed to us under certain of our current agreements requires the consent of the applicable licensor, which may be difficult to obtain.

Any current or future collaborations, licenses or other strategic transactions or arrangements that we enter into may not be successful.

The success of these potential collaborations, license arrangements and other strategic transactions or arrangements may depend heavily on the efforts and activities of our collaborators, sublicensees or other strategic partners.

Their success may depend heavily on the efforts and activities of our collaborators, sublicensees or other strategic partners.

We have experienced collaboration failure in the past and may experience similar failures in the future.

Collaborations, licenses or other strategic transactions or arrangements are subject to numerous risks, which may include risks that the collaborator, licensee or other strategic partner, as applicable:

● may not pursue development and commercialization of the applicable licensed drugs or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in their strategic focus due to their acquisition of competitive products or product candidates or their internal development of competitive products and product candidates, availability of funding or other external factors, such as a business combination that diverts resources or creates competing priorities;

● raise disputes with respect to the ownership or inventorship of any intellectual property developed pursuant to our collaborations or licenses;

● may not properly prosecute, maintain or defend our intellectual property rights or may use our intellectual property or proprietary information in a way that gives rise to actual or threatened litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to potential liability;

● may own or co-own intellectual property covering products that results from our arrangement with them, that is not properly prepared, prosecuted, maintained or defended in a way that could impact that patentability of the intellectual property or validity for any granted patent, which could shorten the term during which we are owed royalties on such intellectual property;

● may own or co-own intellectual property covering products that results from our arrangement with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property, and even if we are able to license such exclusive rights, we may have to enter into a license agreement that includes obligations to make milestone, royalty or other payments under such agreement;

● may not achieve applicable development, regulatory, or commercial milestones, which may materially impact the collaboration revenue that we expect to realize from such relationship;

● raise disputes that cause the delay or termination of the research, development or commercialization of our current or future products and product candidates or that results in costly litigation or arbitration that diverts management attention and resources;

● cause us to be named defendants in lawsuits due to their improper use of the licensed intellectual property and not indemnify us against losses in such lawsuits;

● enforce licensed intellectual property rights against third parties that lead such third parties to challenge the validity or enforceability of the licensed intellectual property and potentially cause the licensed intellectual property to become invalid or rendered unenforceable;

● fail to maintain issued licensed patents that are under their control, or prosecute licensed patent applications in ways that diminish their value, all of which actions may adversely affect our business if our agreements with them terminate and the rights to the licensed intellectual property return to us or an upstream licensor;

may delay, dispute or refuse to pay milestone and royalty payments, which may impact our ability to satisfy upstream payment obligations, if applicable;

● may conduct sales and marketing activities or other operations that may not comply with applicable laws, resulting in civil or criminal proceedings.

● may choose not to pursue or continue development and commercialization of licensed drugs due to clinical trial results, changes in their strategic focus due to their acquisition of competitive products or product candidates or their internal development of competitive products competing priorities, or assets or funding constraints;

● raise disputes with respect to the ownership or inventorship of intellectual property developed pursuant to our collaborations or licenses;

● fail to properly prosecute, maintain or defend our intellectual property rights, or misuse them in ways that gives rise to litigation that could jeopardize or invalidate our intellectual property or proprietary information or expose us to liability;

● develop intellectual property that is not properly prepared, prosecuted, maintained or defended in a way that could impact that patentability of the intellectual property or validity for any granted patent, which could shorten the term during which we are owed royalties;

● may own, co-own or develop intellectual property covering products that results from our arrangement with them without granting us exclusive rights, requiring us to negotiate licenses with milestone, royalty or other payment obligations (which we may be unable to negotiate on acceptable terms or at all);

● fail to achieve development, regulatory or commercial milestones, materially reducing expected collaboration revenue;

● raise disputes that cause the delay or termination of the research, development or commercialization of current or future products and product candidates or that results in costly litigation or arbitration;

● cause us to be named defendants in lawsuits due to their improper use of licensed intellectual property and not indemnify us against losses in such lawsuits;

● enforce licensed intellectual property against third parties that lead such third parties to challenge the validity or enforceability of the licensed intellectual property, potentially invalidating it or rendering it unenforceable;

● fail to maintain licensed patents that are under their control, or prosecute licensed patent applications in ways that diminish their value;

● delay or refuse to pay milestone and royalty payments, which may impact our ability to satisfy upstream payment obligations, if applicable;

● conduct sales, marketing or other operations that may not comply with applicable laws, resulting in civil or criminal proceedings.

In addition, disputes may arise with respect to the ownership of any intellectual property developed pursuant to these arrangements.

These arrangements may also be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable product candidates.

We need to continue to develop our company and expand our scope of operations, and we may encounter difficulties in managing this development and expansion, which could disrupt our operations.

We expect to continue to develop our company and expand the scope of our operations.

To manage our anticipated development and expansion, we must continue to implement and improve our managerial, operational and financial systems and infrastructure, expand our facilities over time and continue to recruit and train qualified personnel.

Also, our executive and senior management teams have and may continue to divert a disproportionate amount of their attention away from their day-to-day activities and devote a substantial amount of time to managing these development and expansion activities.

We may not be able to develop these skills internally or in sufficient time and capacity, which could require us to expend additional resources to acquire them.

Due to our limited resources, certain employees have and may continue to perform activities that are beyond their regular scope of work, and we may not be able to effectively manage the development of our company, expansion of our operations or recruitment and training of qualified personnel.

This may result in weaknesses of our systems and infrastructure;

managerial, operational and financial mistakes;

loss of business opportunities;

loss of employees;

and reduced productivity among remaining employees.

The development of our company and expansion of our operations may lead to significant costs and may divert financial resources from other projects, such as the development of one or more of our product candidates.

If our executive and senior management teams are unable to effectively manage our anticipated development and expansion, our expenses may increase more than expected, our ability to generate revenue could be reduced and we may not be able to implement our business strategy as planned.

Our future financial performance and our ability to commercialize our product candidates, if approved, will depend, in part, on our ability to effectively manage the future development of our company and expansion of our operations.

These arrangements may also be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization on our own or with another collaborator.

Risks Related to Intellectual Property

If we are unable to adequately protect our proprietary technology or obtain and maintain patent protection for our technology and products, if the scope of the patent protection obtained is not sufficiently broad or if the terms of our patents are insufficient to protect our product candidates for an adequate amount of time, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully commercialize our technology and products may be materially impaired.

Our commercial success depends in part on our ability to obtain and maintain proprietary or intellectual property protection in the United States and other countries for our products and product candidates.

We seek to protect our proprietary and intellectual property position by, among other methods, filing patent applications in the United States and abroad related to our proprietary technology, inventions and improvements that are important to our business.

also rely on trade secrets, proprietary know-how and continuing technological innovation to develop and maintain our proprietary or intellectual property position.

Our commercial success depends in part on our ability to obtain and maintain proprietary or intellectual property protection for our products and product candidates.

We seek to do this by, among other methods, filing patent applications in the United States and abroad related to our proprietary technology, inventions and improvements that are

important to our business.

We also rely on trade secrets, proprietary know-how and continuing technological innovation to develop and maintain our proprietary or intellectual property position.

We acquire, in-license and file patent applications directed to our products and product candidates in an effort to establish intellectual property positions directed to their compositions of matter and manufacture as well as uses of these products and product candidates in the treatment of diseases.

Our intellectual property rights include patents and patent applications that we own as well as patents and patent applications that we in-license.

Our intellectual property rights include patents and patent applications that we both own and have in-licensed.

For example, we have a field-specific exclusive license under a license agreement with Regeneron to patent applications and patents relating to ARCALYST and an exclusive license under our license agreement with BIDMC to patent applications and patents related to abiprubart.

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The resolution of any contract interpretation disagreement that may arise could affect the scope of our rights to the relevant intellectual property or technology or affect financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations and prospects.

We or our licensors have not pursued or maintained, and we or our licensees may not pursue or maintain in the future, patent protection for our products or product candidates in every country or territory in which our products or product candidates may be sold, if approved.

In addition, we cannot be sure that any of our pending patent applications or pending trademark applications will issue or that, if issued, they will be in a form that is advantageous to us.

The United States Patent and Trademark Office (the “USPTO”) international patent offices or judicial bodies may deny or significantly narrow claims made under our patent applications and our issued patents may be successfully challenged, may be designed around or may otherwise be of insufficient scope to provide protection for our commercial products.

The United States Patent and Trademark Office (the “USPTO”), international patent offices or judicial bodies may deny or significantly narrow claims made under our patent applications and our issued patents may be successfully challenged or may be of insufficient scope to provide protection for our commercial products.

Additionally, if a patent is granted in one jurisdiction, that does not mean that such a patent, or the claims set forth in that patent, will be granted in a different jurisdiction.

Further, the USPTO, international trademark offices or judicial bodies may deny our trademark applications and, even if published or registered, these trademarks may not effectively protect our brand and goodwill.

As with patents, trademarks also may be successfully opposed or challenged.

The patent position of biotechnology and pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions and has in recent years been the subject of much litigation.

The degree of patent protection we require to successfully commercialize our products and product candidates may be unavailable or severely limited in some cases and may not adequately protect our rights or permit us to gain or keep any competitive advantage.

We cannot provide any assurances that any of our owned or in-licensed patents have, or that any of our owned or in-licensed pending patent applications that mature into issued patents will have, claims with a scope sufficient to protect our current and future products and product candidates.

The patent position of biotechnology and pharmaceutical companies is highly uncertain, involves complex legal and factual issues, and has been the subject of much litigation.

The degree of patent protection we require to commercialize our products may be unavailable or limited, failing to protect our rights or provide any competitive advantage.

We cannot provide any assurances that our owned or in-licensed patents, or pending applications that mature into patents, will have claims broad enough to protect our current and future products and product candidates.

A United States patent covering ARCALYST as a composition of matter expired in 2020 and relevant composition of matter patents issued outside of the United States expired in October 2023.

A United States patent covering methods of using ARCALYST in the treatment of recurrent pericarditis was issued in June 2021 and has a statutory term that expires in 2038, not including any patent term adjustment.

We are unable to obtain composition of matter patents covering amino acid sequences, or corresponding nucleic acid sequences, of KPL-387.

We own a pending patent application covering methods of using KPL-387 in the treatment of recurrent pericarditis.

If issued, patents covering methods of using KPL-387 in treating recurrent pericarditis will have statutory expiration dates in 2046, not including any patent term extensions or adjustments.

The issued composition of matter patents for abiprubart owned by us have statutory expiration dates in 2036, not including any extensions.

The issued composition of matter patents licensed from BIDMC related to abiprubart have statutory expiration dates in 2032, not including any patent term extensions or adjustments.

In the United States, the natural (i.e., statutory) expiration of a patent is generally 20 years after it is filed.

We are unable to obtain composition of matter patents for KPL-387’s amino acid or nucleic acid sequences.

We own a pending patent application covering methods of using KPL-387 in the treatment of recurrent pericarditis, which, if issued, would expire in 2046, not including any patent term extensions or adjustments.

We also own additional patent applications covering various technologies related to our KPL-387 program.

Additionally, we expect to rely on regulatory exclusivity, such as data exclusivity and orphan exclusivity as applicable, for KPL-387.

For example, in the United States, a new biologic product receives 12 years of data exclusivity upon receiving regulatory approval.

In the EU, a new product generally receives eight years of data exclusivity and an additional two years of market exclusivity upon regulatory approval.

See “ Business – Government Regulation ” above for additional information on regulatory exclusivities.

In the United States, the natural (i.e., statutory) expiration of a patent is generally 20 years from the earliest filing date of a non-provisional patent application.

Various extensions and adjustments may be available;

however, the life of a patent, and the protection it affords, is limited.

The actual protection afforded by a patent varies on a product-by-product basis, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

For example, the applicable regulatory exclusivity period is often triggered by the date a product candidate obtains regulatory approval, and we cannot predict with any certainty whether and if so, when, the applicable product would receive regulatory approval in any given jurisdiction.

Furthermore, the type, scope and duration of such exclusivities will

vary on a country-by-country basis depending on the jurisdiction in which a product candidate is approved and the particular regulatory exclusivity for which the product is eligible as of the time of approval in such jurisdiction.

Patents may be eligible for limited patent term extension in the United States under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Act.

Similar patent extensions exist in the EU (supplementary protection certificate) and Japan, subject to the applicable laws in those jurisdictions.

In most countries, including the United States, the patent term is 20 years from the earliest filing date of a non-provisional patent application.

The actual protection afforded by a patent varies on a product-by-product basis, from country to country and depends upon many factors, including the type of patent, the scope of its coverage, the availability of patent term extensions and adjustments, the availability of legal remedies in a particular country and the validity and enforceability of the patent.

Furthermore, the type, scope and duration of any regulatory exclusivities will vary on a country-by-country basis depending on the jurisdiction in which a product candidate is approved and the particular regulatory exclusivity for which the product is eligible as of the time of approval in such

jurisdiction.

In the United States, a patent’s term may be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the USPTO in examining and granting a patent, or may be shortened if a patent is terminally disclaimed over an earlier expiring patent.

In certain countries, the term of a patent that covers a drug product may also be eligible for patent term extension when regulatory approval is granted, provided that the legal requirements are met.

Limited patent term extensions may be available in the United States under the Drug Price Competition and Patent Term Restoration Act of 1984 (referred to as the Hatch-Waxman Act) and under similar laws in the EU and Japan.

In certain countries, the term of a patent that covers a drug product may be eligible for patent term extension when regulatory approval is granted, provided that the legal requirements are met.

We may not receive an extension if we or our licensees fail to apply within applicable deadlines or fail or are unable to apply prior to expiration of relevant patents.

For example, no patent term extension was obtained in the United States following the FDA’s approval of ARCALYST for the treatment of CAPS in 2008, and the deadline for applying for such extension has passed.

Accordingly, patent term extension in the United States based on the FDA’s approval of ARCALYST for CAPS, or any other indication for which the FDA may grant approval in the future, is unavailable.

Further, while patent term extension was awarded for relevant patents in certain European countries following the EMA’s approval of ARCALYST for the treatment of CAPS, in 2012 the marketing authorization for CAPs was withdrawn.

Patent term extensions may no longer be in effect or available, subject to the applicable laws in those countries as well as other factors, such as whether a marketing approval for ARCALYST is reissued and whether such reissuance is prior to the expiration of the patent’s natural 20-year patent term.

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

In addition, the laws of other countries may not protect our rights to the same extent as the laws of the United States.

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Given the amount of time required for the development, testing and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates are commercialized, thereby limiting protection such patent would afford the respective product and any competitive advantage such patent may provide.

In some cases, an in-licensed patent portfolio may have undergone a considerable loss of patent term prior to our initiation of development and commercialization of the product or product candidate.

For example, the patents in the United States and Europe covering ARCALYST as a composition of matter have expired.

We are unable to obtain composition of matter patents covering the amino acid sequences, or corresponding nucleic acid sequences, of KPL-387.

As a result, our owned and in-licensed patent portfolio may not provide adequate and continuing patent protection sufficient to exclude others from commercializing products similar or identical to our product candidates.

In such cases, regulatory exclusivity, such as data exclusivity or orphan exclusivity as applicable, is expected to be relied upon for our or our licensees’ product candidates.

In such cases, regulatory exclusivity, such as data exclusivity or orphan exclusivity (if available) as applicable, is expected to be relied upon for our or our licensees’ products.

The expiration date of regulatory exclusivity is determined on a country-by country-basis if the applicable product is approved in such country and if any applicable regulatory exclusivity applies and is granted.

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Furthermore, the type, scope and duration of such exclusivities will vary on a country-by-country basis depending on the jurisdictions in which a product candidate is approved and the particular regulatory exclusivity for which the product is eligible as of the time of approval.

Other parties may have developed or may develop technologies that may be related or competitive to our own, and such parties may have filed or may file patent applications, or may have received or may receive patents, claiming inventions that may overlap or conflict with those claimed in our patent applications or issued patents, with respect to either the same methods or formulations or the same subject matter, in either case, that we may rely upon to dominate our patent position in the market.

Publications of discoveries in the scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.

Therefore, we cannot know with certainty whether we or our licensors were the first to make the inventions claimed in our owned or licensed patents or pending patent applications, or that we

or our licensors were the first to file for patent protection of such inventions.

Publications of discoveries in scientific literature often lag behind the actual discoveries, and patent applications in the United States and other jurisdictions are typically not published until 18 months after filing, or in some cases not at all.

Therefore, we cannot know with certainty whether we or our licensors were the first to make the inventions claimed in our owned or licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions.

As a result, the issuance, scope, validity, enforceability and commercial value of our patent rights cannot be predicted with any certainty.

In addition, the patent prosecution process is expensive and time consuming, and we or our licensees may not be able to file and prosecute all necessary or desirable patent applications at a reasonable cost or in a timely manner.

Patent prosecution is a lengthy process, during which the scope of the claims initially submitted for examination by the USPTO is often significantly narrowed by the time they issue, if at all.

The claims of our issued patents or patent applications when issued may not cover our product candidates, proposed commercial technologies or the future products that we develop, or even if such patents provide coverage, the coverage obtained may not provide any competitive advantage.

Patent prosecution is a lengthy process and the scope of the claims initially submitted for examination may be significantly narrowed by the time they issue, if at all, potentially losing any competitive advantage we hope to achieve.

Further, it is possible that we will fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection.

Moreover, in some circumstances, we do not have the right to control the preparation, filing and prosecution of patent applications, or to maintain the patents covering technology that we in-license from, or out-license to, third parties.

Therefore, these patents and applications may not be prepared, prosecuted, enforced or maintained in a manner consistent with the best interests of our business.

In the case of our field-limited license from Regeneron, another licensee may have the right to enforce patents covering the product in their field.

As a result, we may need to coordinate prosecution, enforcement or maintenance with another party, and even then, the other party could prosecute, enforce or maintain the patents in a manner adverse to our interests or otherwise put the patents at risk of invalidation.

The strength of patents in the biotechnology and pharmaceutical field involves complex legal and scientific questions and can be uncertain.

The patent applications that we own or license may fail to result in issued patents in the United States or in other countries.

Even if we acquire patent protection that we expect should enable us to maintain a competitive advantage, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable.

The issuance of a patent is not conclusive as to its inventorship, scope, validity, enforceability or term, and our owned and licensed patents may be challenged in the courts or patent offices in the United States and abroad.

For example, we may be subject to a third party submission of prior art to the USPTO challenging the priority of an invention claimed within one of our patents, which submissions may also be made prior to a patent’s issuance, precluding the granting of any of our pending patent applications.

We or our licensees may become involved in contested proceedings challenging our patent rights or the patent rights of others from whom we have obtained licenses to such rights.

For example, patents granted by the USPTO may be subject to third party challenges such as (without limitation) derivation, re-examination, interference, post-grant review or inter partes review proceedings, and patents granted by the European Patent Office may be challenged by any person in an opposition proceeding within nine months from the publication of the grant.

Similar proceedings are available in other jurisdictions, and in some jurisdictions third parties can raise questions of validity with a patent office even before a patent has granted.

In such case, we or our licensees may have to participate in interference or derivation proceedings in the USPTO, to determine which party is entitled to a patent on the disputed invention.

We or our licensees may also become involved in similar opposition proceedings in the European Patent Office or similar offices in other jurisdictions regarding our intellectual property rights with respect to our products, product candidates and technology.

Patent applications we own or license may not result in issued patents in the United States or in other countries.

Even if we acquire patent protection expected to provide a competitive advantage, third parties may challenge the validity, enforceability or scope thereof, potentially narrowing, invalidating or rendering our patents unenforceable.

Issuance of a patent is not conclusive as to its inventorship, scope, validity, enforceability or term, and our owned and licensed patents may be challenged in courts or patent offices, in the United States and abroad.

example, United States patents may face challenges such as derivation, reexamination, interference, post-grant review, or inter partes review proceedings, while European patents may be challenged by any person in an opposition proceeding within nine months from the publication of the grant.

Similar proceedings exist in other jurisdictions, and in some jurisdictions, third parties can raise questions of validity with a patent office even before a patent has granted.

Competitors may claim that they invented the inventions claimed in our issued patents or patent applications prior to the date our inventions were invented, or may file patent applications earlier than us or our licensees, requiring us or our licensees to engage in interference or derivation proceedings at the USPTO or similar opposition actions in Europe or other regions regarding our intellectual property rights for our products, product candidates and technology to determine which party is entitled to the patent on the disputed invention.

Such proceedings can be expensive, time consuming and may divert the efforts of our technical and managerial personnel, which could in turn harm our business, whether or not we receive a determination favorable to us or our licensees.

We may not be able to correctly estimate or control our future operating expenses in relation to such proceedings, which could affect operating expenses.

Our operating expenses may fluctuate significantly in the future as a result of a variety of factors, including the costs of such proceedings.

Since patent applications are confidential for a period of time after filing, we cannot be certain that we, our licensees or our licensors were the first to file any patent application related to our product and product candidates.

Competitors may also contest our patents, if issued, by showing the patent examiner that the invention was not original, was not novel or was obvious.

In litigation, a competitor could claim that our patents, if issued, are not valid or enforceable for a number of reasons.

If a court agrees, rights to those challenged patents may be diminished or lost.

In addition, we may in the future be subject to claims by our, our licensees’ or our licensors’ former employees or consultants asserting an ownership right in our patents or patent applications as a result of the work they performed on our or their behalf, respectively.

Although we generally require all of our employees and consultants and any other partners or collaborators who have access to our proprietary know-how, information or technology to assign or grant similar rights to their inventions to us, we cannot be certain that we, our licensees’ or our licensors have executed such agreements with all parties who may have contributed to our intellectual property, nor can we be certain that our agreements with such parties will be upheld in the face of a potential challenge, or that they will not be breached, for which we may not have an adequate remedy.

An adverse determination in any such submission or proceeding may result in loss of exclusivity or freedom to operate or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our or our licensees’ ability to stop others from using or commercializing similar or identical technology and products, without payment to us, could limit the duration of the patent protection covering our technology, product and product candidates, or could reduce the period of time during which our licensees are obligated to make royalty payments to us for the sale of licensed products.

We may also face future claims from former employees or consultants of ours, our licensees or licensors asserting an ownership right in our patents or patent applications based on work they performed on our or their behalf.

Although we generally require employees, consultants and collaborators with access to proprietary information to assign invention rights to us, we cannot be certain that we, our licensees’ or our licensors have executed such agreements with all parties who may have contributed to our intellectual property, nor can we be certain that these agreements will withstand challenges or that they will not be breached, for which remedies may be inadequate.

An adverse determination in any such proceeding may result in loss of exclusivity or freedom to operate, or in patent claims being narrowed, invalidated or held unenforceable, in whole or in part, which could limit our or our licensees’ ability to prevent others from using or commercializing similar or identical technology and products, without payment to us, shorten patent protection periods for our technology, products and product candidates or reduce the period of time during which our licensees are obligated to make royalty payments to us.

Such challenges may also result in our inability to manufacture or commercialize our product and product candidates without infringing third party patent rights.

In addition, if the breadth or strength of protection provided by our patents and patent applications is threatened, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

Even if they are unchallenged, our issued patents and our pending patent applications, if issued, may not provide us or our licensees with any meaningful protection or prevent competitors from designing around our patent claims to circumvent our owned or licensed patents by developing similar or alternative technologies or products in a non-infringing manner.

For example, a third party may develop a competitive drug that provides benefits similar to our product, or one or more of our product candidates, but that has a different composition that falls outside the scope of our patent protection.

If the patent protection provided by the patents and patent applications we hold or pursue with respect to our product or product candidates is not sufficiently broad to impede such competition, or if the breadth, strength or term (including any extensions or adjustments) of protection provided by the patents and patent applications we hold or pursue with respect to our product candidates or any future product candidates is successfully challenged, our or our licensees’ ability to successfully commercialize our product or product candidates could be negatively affected, which would harm our business.

Further, if we encounter delays in our clinical trials, the period of time during which we could market our product candidates or any future product candidates under patent protection would be reduced.

If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our assets.

Under any such license, if granted, we would most likely be subject to various payment obligations.

However, we may be unable to secure such license to the third party’s intellectual property on acceptable terms Even if we are successful against any contests or other claims of infringement, we may spend significant time and resources to do so.

Further, if the scope or strength of our patents and patent applications is threatened, it could deter companies from collaborating with us to license, develop or commercialize current or future product candidates since they may view our intellectual property as having reduced commercial value.

Further, any public announcement about the start, progress or outcome of any patent or exclusivity disputes or proceedings, in any country, may trigger significant volatility in our stock price.

Even if unchallenged, issued patents may not provide any meaningful protection or prevent competitors from designing around the patent claims by developing similar or alternative non-infringing technologies or products.

For example, a competitor could create a drug that provides benefits similar to our product, or one or more of our product candidates, but has a different composition that falls outside the scope of our patent protection.

If our patents lack sufficient breadth or term, or are successfully challenged, commercialization of our products could be negatively affected, harming our business.

Licensing of intellectual property is of critical importance to our business and involves complex legal, business and scientific issues.

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Additionally, our current licensing and acquisition agreements contain limitations and restrictions that could limit or adversely affect our ability to develop and commercialize other products in the future.

We are party to agreements granting us the rights to develop and commercialize ARCALYST, abiprubart and vixarelimab .

Each of these agreements requires us to use commercially reasonable efforts to develop and commercialize such drugs, make timely milestone and other payments, provide certain information regarding our activities with respect to such drugs and indemnify the other party with respect to our development and commercialization activities under the terms of the agreements.

These agreements and any future such agreements that we enter into impose a variety of obligations and related consequences.

Further, disputes may arise between us and any of these counterparties regarding such obligations under, or the intellectual property subject to, such agreements, including:

We are party to agreements granting us the rights to develop and commercialize certain of our products and product candidates, including ARCALYST.

Each of these agreements requires us to use commercially reasonable efforts

to develop and commercialize such drugs, make timely milestone and other payments, provide certain information regarding our activities with respect to such drugs and indemnify the other party with respect to our development and commercialization activities, among others.

Disputes may arise between us and any of these counterparties regarding obligations under, or the intellectual property subject to, such agreements, including:

● our diligence obligations to develop and commercialize the licensed technology, and what activities satisfy those diligence obligations;

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● whether our use of the licensed technology is within the scope of the rights granted to us or otherwise consistent with the agreement;

● our obligations to make milestone, royalty or other payments under those agreements;

● milestone, royalty or other payment obligations;

● other parties’ performance being maintained under these agreements;

● whether and the extent to which our technology and processes infringe on intellectual property of the licensor that is not subject to the agreement;

● whether and the extent to which our technology and processes infringe on intellectual property of the licensor not subject to the agreement;

● our right to sublicense patents and other rights to third parties;

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These or other disputes over our obligations or intellectual property that we have in-licensed, out-licensed or acquired may prevent or impair our ability to maintain our current arrangements on acceptable terms, or may impair the value of the arrangement to us.

Any such dispute could have an adverse effect on our business.

If we fail, or our sublicensees cause us to fail, to meet our obligations under our agreements in a material respect, the respective licensor/seller would have the right to terminate the respective agreement.

We then not only would have to return the licensed technology, but we may also be required to grant the licensor rights to any intellectual property controlled by us and developed during the period the agreement was in force that relate to the applicable licensed technology.

This means that the licensor/seller for each of these agreements could effectively take control of the development and commercialization of our product and product candidates after an uncured, material breach of the agreement by us.

If we or our sublicensees materially fail to meet our obligations under our agreements, licensors may terminate the respective agreement, requiring us to return licensed technology and possibly grant rights to our intellectual property controlled by us and developed during the period the agreement was in force that relate to the applicable licensed technology.

This means that the licensor/seller for each of these agreements could effectively take control of the development and commercialization of our assets following an uncured, material breach of the agreement by us.

This would also be the case if we voluntarily elected to terminate the relevant agreement, which we have the right to do under each of these agreements.

While we would expect to exercise our rights and remedies available to us in the event we fail, or our sublicensees cause us to fail, to meet our obligations under these agreements in any material respect, including seeking to cure any breach by us or our sublicensees, and otherwise seek to preserve our rights under the technology licensed to or acquired by us, we may not be able to do so in a timely manner, at an acceptable cost or at all.

Any uncured, material breach under the in-licenses could result in our loss of exclusive rights and may lead to a complete termination of our product development and any commercialization efforts for our product and each of our product candidates.

Termination of one of these agreements for any reason, and the related discontinuation of the development or commercialization of a product or product candidate could impair our ability to raise additional capital, generate revenue and may significantly harm our business, financial condition and prospects.

Additionally, under the Regeneron Agreement, Regeneron retains worldwide rights to develop and commercialize ARCALYST for local administration to the eye and ear and oncology and the right to develop and commercialize ARCALYST for all applications in the Middle East and North Africa.

Any uncured, material breach could result in loss of exclusivity and termination of product development and commercialization efforts for our product and each of our product candidates, harming our business and prospects.

Additionally, under the Regeneron Agreement, Regeneron retains worldwide rights to develop and commercialize ARCALYST for local administration to the eye and ear and oncology.

The development of ARCALYST in other fields could increase the possibility of identifying adverse safety results that may impact the commercialization of ARCALYST for the treatment of recurrent pericarditis in our territory.

We have also entered into agreements to grant to others licenses under our owned intellectual property and sublicenses under intellectual property that we license from others for those third parties to develop and commercialize ARCALYST and vixarelimab, including the ARCALYST Huadong Collaboration Agreement and the Genentech License Agreement.

Under each of these agreements, our licensees have certain responsibilities to develop and commercialize the applicable licensed drugs, make timely milestone and royalty payments, provide to us certain information regarding their activities and indemnify us with respect to their development and commercialization activities under the terms of the agreements.

Additionally, under the Genentech License Agreement, we granted Genentech the first right to file, prosecute, maintain, defend, enforce and extend the life of the patents that we own and licensed to Genentech.

These collaborations may be subject to a number of risks, including those listed under “ —Risks

Related to Competition, Executing our Strategy and Managing Growth – We have entered into and may seek to enter into collaboration, licensing or other strategic transactions or arrangements to further develop, commercialize or otherwise attempt to realize value from one or more of our products and product candidates, and any such transactions or arrangements that we enter into may not be successful or be on favorable terms, which could adversely affect our ability to develop, commercialize or attempt to realize value from our products and product candidates” above.

We have also granted sub-licenses for others to develop ARCALYST and vixarelimab.

Licensees must develop and commercialize drugs, make timely milestone and royalty payments, share information and indemnify us.

Finally, certain of our agreements may limit or delay our ability to consummate certain transactions, may impact the value of those transactions, or may limit our ability to pursue certain activities.

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If the claims of any of these patents are asserted against us, we do not believe our proposed activities related to abiprubart would be found to infringe any valid claim of these patents.

While we may decide to initiate proceedings to challenge the validity of these or other patents in the future, we may be unsuccessful, and courts or patent offices in the United States and abroad could uphold the validity of any such patent.

If we were to challenge the validity of any issued United States patent in court, we would need to overcome a statutory presumption of validity that attaches to every United States patent.

This means that in order to prevail, we would have to present clear and convincing evidence as to the invalidity of the patent’s claims.

In order to avoid infringing these or any other third party patents, we may find it necessary or prudent to obtain licenses to such patents from such third party intellectual property holders.

However, we may be unable to secure such licenses or otherwise acquire or in-license any compositions, methods of use processes or other intellectual property rights from third parties that we identify as necessary for our current or future product candidates.

The licensing or acquisition of third party intellectual property rights is a competitive area, and several more established companies may also pursue strategies to license or acquire third party intellectual property rights that we may consider attractive or necessary.

These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities.

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

We also may be unable to license or acquire third party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all.

If we are unable to successfully obtain rights to required third party intellectual property or maintain the existing intellectual property rights we have, we may have to cease development of the relevant program or product candidate, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Since our products and product candidates treat or are being developed to treat indications that are competitive and of strong interest to pharmaceutical and biotechnology companies, we will likely seek to file additional patent applications and may have additional patents granted in the future, based on our future research and development efforts.

Furthermore, because patent applications can take many years to issue and may be confidential for 18 months or more after filing, and because pending patent claims can be revised before issuance, there may be applications of third parties now pending which may later result in issued patents that may be infringed by the manufacture, use or sale of our products or product candidates.

Because patent applications can take many years to issue and may be confidential for 18 months or more after filing, and because pending patent claims can be revised before issuance, there may be applications of third parties now pending which may later result in issued patents that may be infringed by the manufacture, use or sale of our products or product candidates.

Regardless of when filed, we may fail to identify relevant third party patents or patent applications, or we may incorrectly conclude that a third party patent is invalid or not infringed by our product candidates or activities.

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If a patent infringement suit were threatened or brought against us, we could be forced to stop or delay research, development, manufacturing or sales of the product candidate that is the subject of the actual or threatened suit.

Contested proceedings challenging the validity of third party patents may be unsuccessful, and courts or patent offices in the United States and abroad could uphold the validity of any such patent.

In order to avoid infringing third party patents, we may find it necessary or prudent to obtain licenses to such patents from such third party intellectual property holders.

However, we may be unable to secure such licenses or otherwise acquire or in-license any intellectual property rights from third parties that we identify as necessary for our current or future product candidates.

These established companies may have a competitive advantage over us due to their size, capital resources and greater clinical development and commercialization capabilities.

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

We also may be unable to license or acquire third party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all.

Without such a license, we may cease developing or commercializing the infringing technology, product or product candidate, or be forced to redesign it and/or to cease some aspect of our business operations, which could have a material adverse effect on our business.

If we are found to infringe a third party’s intellectual property rights, we could be required to obtain a license from such third party to continue developing and marketing our product candidates and technology.

Under any such license, we would most likely be required to pay various types of fees, milestones, royalties or other amounts.

Under any such

license, we would most likely be required to pay various types of fees, milestones, royalties or other amounts.

However, we may not be able to obtain any required license on commercially reasonable terms, or at all.

Even if we were able to obtain such a license, it could be granted on non-exclusive terms, thereby providing our competitors and other third parties access to the same technologies licensed to us.

Without such a license, we could be forced, including by court order, to cease developing and commercializing the infringing technology or product candidate, or forced to redesign it, or to cease some aspect of our business operations.

In addition, we could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have willfully infringed such third party patent rights.

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An adverse result in any litigation proceeding could put one or more of our patents, whether owned or in-licensed, at risk of being invalidated or interpreted narrowly.

If a defendant were to prevail on a legal assertion of invalidity or unenforceability of our patents covering our product or one of our product candidates, we or our licensees

would lose at least part, and perhaps all, of the patent protection covering such product candidate.

If a defendant were to prevail on a legal assertion of invalidity or unenforceability of our patents covering our product or one of our product candidates, we or our licensees would lose at least part, and perhaps all, of the patent protection covering such product candidate.

Competing products may also be sold in other countries in which our patent coverage might not exist or be as strong.

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Litigation or other legal proceedings relating to intellectual property claims, with or without merit, is unpredictable and generally expensive and time consuming and is likely to divert significant resources from our core business, including distracting our technical and management personnel from their normal responsibilities.

Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our Class A ordinary shares.

Class A ordinary shares.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.

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We may not be able to effectively enforce our intellectual property rights throughout the world.

Filing, prosecuting and defending patents on our product and product candidates in all countries throughout the world would be prohibitively expensive.

The requirements for patentability may differ in certain countries, particularly in developing countries.

Moreover, our ability to protect and enforce our intellectual property rights may be adversely

affected by unforeseen changes in intellectual property laws outside of the United States.

In addition, the patent laws of some such countries do not afford intellectual property protection to the same extent as the laws of the United States.

Many companies have encountered significant problems in protecting and defending intellectual property rights in certain jurisdictions outside of the United States.

Varying filing dates in international countries may also permit intervening third parties to allege priority to patent applications claiming certain technology.

The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property rights.

This could make it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights.

For example, many countries outside of the United States have compulsory licensing laws under which a patent owner must grant licenses to third parties.

In addition, many countries limit the enforceability of patents against certain parties, including government agencies or government contractors.

Consequently, we or our licensees may not be able to prevent third parties from practicing inventions covered by our patents, whether owned or in-licensed, in all countries outside the United States.

Competitors may use our or their technologies in jurisdictions where we or they have not obtained patent protection, or where we or they have obtained patent protection, but such jurisdictions do not favor the enforcement of patents, and other intellectual property rights, to develop their own products and, further, may export otherwise infringing products to territories where we have patent protection, if our or our licensees’ ability to enforce our patents to stop infringing activities is inadequate.

These products may compete with our products and product candidates or the products and product candidates that we have out-licensed, and our or our licensees’ patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

Proceedings to enforce our patent rights, whether owned or in-licensed, in jurisdictions outside of the United States, whether or not successful, could result in substantial costs and divert our efforts and resources from other aspects of our business.

Furthermore, while we intend to pursue protection for our intellectual property rights in the major markets for our product and product candidates, we cannot ensure that we or our licensees will be able to initiate or maintain similar efforts in all jurisdictions in which we or they may wish to market our or our out-licensed products and product candidates.

Accordingly, our or our licensees’ efforts to protect our intellectual property rights in such countries may be inadequate.

In addition, changes in the law and legal decisions by courts in the United States and other countries may affect the ability to obtain and enforce adequate intellectual property protection for our technology.

Filing, prosecuting and defending patents in all countries throughout the world would be prohibitively expensive.

Patentability requirements vary by country, especially in developing regions.

Our ability to protect and enforce intellectual property may be adversely affected by changes in foreign intellectual property laws, which often provide less protection than United States intellectual property law.

Many companies face significant challenges in protecting and defending intellectual property outside the United States.

Further, some countries’ legal systems do not favor the enforcement of patents and other intellectual property rights, particularly for United States-based companies, making it difficult for us to stop the infringement of our patents or the misappropriation of our other intellectual property rights.

For example, compulsory licensing laws in many countries require patent owners to grant licenses to third-parties, and some jurisdictions limit enforceability against certain parties, including government agencies or government contractors.

As a result, we or our licensees may be unable to prevent third parties from practicing inventions covered by our patents abroad in countries outside the United States.

Competitors may use our technologies to develop competing products in jurisdictions where we have not obtained patent protection, or where we have obtained patent protection, but such jurisdictions do not favor the enforcement of patents, or other intellectual property rights.

In such cases, our intellectual property rights may not be effective or sufficient to prevent them from competing with us, impacting our results of operation and financial condition.

Proceedings to enforce our patent rights, even if successful, can be expensive and time-consuming.

Furthermore, we cannot ensure that we or our licensees will be able to initiate or maintain protective actions in all jurisdictions in which we or they may wish to commercialize products.

In addition, changes in the law and legal

decisions by courts in the United States and other countries may affect the ability to obtain and enforce adequate intellectual property protection for our technology.

In addition, geo-political actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future licensors and the maintenance, enforcement or defense of our issued patents or those of any current or future licensors.

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2023), that obviousness-type double patent analysis for a patent that has received patent term adjustment must be based on the expiration date of the patent after the patent term adjustment has been added, may negatively impact the term of certain United States patents.

Finally , Europe’s Unitary Patent system and Unified Patent Court (the “UPC”) may present uncertainties for our ability to protect and enforce our patent rights against competitors in Europe.

In 2012, the European Patent Package (the “EU Patent Package”), regulations were passed with the goal of providing a single pan-European Unitary Patent system and a new UPC, for litigation involving European patents.

Implementation of the EU Patent Package occurred in June 2023.

Under the UPC, all European patents, including those issued prior to ratification of the European Patent Package, by default automatically fall under the jurisdiction of the UPC.

Finally , Europe’s Unitary Patent system and Unified Patent Court (the “UPC”) and European Patent Package regulations (the “EU Patent Package”) may present uncertainties for our ability to protect and enforce our patent rights against competitors in Europe.

The UPC provides our competitors with a new forum to centrally revoke our European patents and allow for the possibility of a competitor to obtain pan-European injunctions.

Under the EU Patent Package we will have the right to opt our patents out of the UPC over the first seven years of the court’s existence, but doing so may preclude us from realizing the benefits of the new unified court.

Under the EU Patent Package we will have the right to opt our patents out of the UPC for a limited time, but doing so may preclude us from realizing the benefits of the new unified court.

Depending on future actions by governmental authorities, including legislative bodies, administrative authorities and court systems, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents, or may weaken the patent rights of existing patents in certain situations or to enforce our existing patents and patents that we might obtain in the future.

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If we are unable to protect the confidentiality of our trade secrets, our business and competitive position may be harmed.

In addition to the protection afforded by patents, we may rely upon unpatented trade secret protection, unpatented know-how and continuing technological innovation to develop and maintain our competitive position.

Although we seek to protect our proprietary technology and processes, in part, by entering into confidentiality agreements with our collaborators, scientific advisors, contractors, employees, independent contractors and consultants, and invention assignment agreements with our independent contractors, consultants, scientific advisors and employees, we may be unable to prevent the unauthorized disclosure or use of our technical know-how or other trade secrets by the parties to these agreements.

Moreover, we cannot guarantee that we have entered into such agreements with each party that may have or have had access to our confidential information or proprietary technology and processes.

Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective.

If any of the collaborators, scientific advisors, employees, contractors and consultants who are parties to these agreements breaches or violates the terms of any of these agreements, we may not have adequate remedies for any such breach or violation (e.g., in countries that do not favor the enforcement of intellectual property rights), and we could lose our trade secrets as a result.

Moreover, if confidential information that is licensed or disclosed to us by our partners, collaborators or others is inadvertently disclosed or subject to a breach or violation, we may be exposed to liability to the owner of that confidential information.

Enforcing a claim that a third party illegally obtained and is using our trade secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable.

In addition, courts outside the United States are sometimes less willing to protect trade secrets.

In addition to patent protection, we may rely on trade secrets, know-how or technological innovation to develop and maintain our competitive position.

We seek to protect proprietary technology through confidentiality and invention assignment agreements with collaborators, advisors, contractors, employees and consultants, as applicable, but unauthorized disclosure or use of our technical knowhow or other trade secrets may still occur.

Further, we cannot guarantee such agreements exist with every party who had access to our confidential information or proprietary technology.

We also seek to protect our proprietary information and technologies by maintaining physical security of our premises and physical and electronic security of our information technology systems.

Monitoring unauthorized use and disclosure is difficult, and we cannot guarantee that the steps we have taken to protect our proprietary technologies will

be effective.

We may lack adequate remedies to address any violation of these agreements or our security, especially in jurisdictions that do not favor the enforcement of intellectual property rights, resulting in loss of exclusivity.

Moreover, if confidential information licensed or disclosed to us by our partners, collaborators or others is inadvertently disclosed or subject to a breach or violation, we may face liability to the owner of such information.

We cannot be certain that the steps we have taken will prevent unauthorized use or unauthorized reverse engineering of our technology.

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The steps we have taken to protect our proprietary rights may not be adequate to prevent misappropriation of our intellectual property.

We also seek to preserve the integrity and confidentiality of our data and other confidential information by maintaining physical security of our premises and physical and electronic security of our information technology systems.

While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached.

Detecting the disclosure or misappropriation of confidential information and enforcing a claim that a party illegally disclosed or misappropriated confidential information is difficult, expensive and time consuming, and the outcome is unpredictable.

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In addition, our confidential information may otherwise become known or be independently discovered by competitors, in which case we would have no right to prevent them, or those to whom they communicate it, from using that technology or information to compete with us.

We may in the future rely on trade secret protection, which would be subject to the risks identified above with respect to confidential information.

We may in the future rely on trade secret protection, which would be subject to the risks identified above with respect to confidential information, particularly outside the United States where courts may be less willing to protect trade secrets.

Our trade secrets could otherwise become known or be independently discovered by our competitors.

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Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our business, financial condition, results of operations and prospects.

We have not yet registered trademarks for a commercial trade name for our product candidates in the United States or jurisdictions outside of the United States and failure to secure such registrations could adversely affect our business.

Although the trademark ARCALYST has been registered by Regeneron (and we have permission to use it pursuant to the Regeneron License Agreement), we have not yet registered trademarks for a commercial trade name for some of our product candidates in the United States or any jurisdiction outside of the United States.

During trademark registration proceedings, we may receive rejections.

Although we are given an opportunity to respond to those rejections, we may be unable to overcome such rejections.

In addition, in the USPTO and in comparable agencies in many jurisdictions outside of the United States, third parties are given an opportunity to oppose pending trademark applications and to seek to cancel registered trademarks.

Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings.

Moreover, any name we propose to use with our product candidates in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark.

The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names.

If the FDA objects to any of our proposed proprietary product names, we may be required to expend significant additional resources in an effort to identify a suitable substitute name that would qualify under applicable trademark laws, not infringe the existing rights of third parties and be acceptable to the FDA.

General Risk Factors

We have a history of operating losses and may require substantial additional financing in the future.

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

Our ability to generate product revenue sufficient to sustain our organization will depend heavily on a number of factors, including the continued commercialization of ARCALYST, the development and eventual commercialization of one or more of our current or future product candidates, if approved, and the management of our costs consistent with our current operating plan.

Our future capital expenditures are expected to be substantial, and we may incur operating losses in the future if we encounter greater than expected expenses as we:

● support our sales, marketing and distribution capabilities, infrastructure and organization to commercialize ARCALYST and any product candidates for which we may obtain marketing approval;

● conduct new and ongoing research and pre-clinical and clinical development of our product candidates that may or may not ever be approved or successful in the future, including our planned Phase 2/3 clinical trial of KPL-387 in recurrent pericarditis, our ongoing Phase 1 clinical trial of KPL-387 in normal healthy volunteers and our pre-clinical investigations of KPL-1161;

● manufacture our products and product candidates for clinical or commercial use, increase our manufacturing capabilities, add additional manufacturers or suppliers and perform activities related to our technology transfer of the process for manufacturing ARCALYST drug substance;

Biopharmaceutical product development is highly speculative and involves significant risk.

Generating sufficient product revenue to sustain our organization will depend on a number of factors, including the continued ARCALYST commercialization, the development, approval and eventual commercialization of one or more of our current or future product candidates and the management of our costs consistent with our current operating plan.

capital expenditure s are expected to b e substantial, and we may incur operating losses in the future if expenses exceed expectations as we:

● support product development, sales, marketing and distribution capabilities, infrastructure and organization to commercialize ARCALYST and any future approved products;

● conduct research and development activities, including our Phase 2/3 clinical trial of KPL-387 in recurrent pericarditis, our ongoing Phase 1 clinical trial of KPL-387 in normal healthy volunteers, our pre-clinical investigations of KPL-1161 and prepare for our planned Phase 1 clinical trial of KPL-1161 in normal healthy volunteers;

● manufacture products and product candidates for clinical or commercial use, expand our manufacturing capabilities, identify and qualify additional or alternative manufacturers and suppliers and manage the technology transfer for ARCALYST drug substance manufacturing;

● seek regulatory and marketing approvals for our product candidates that successfully complete clinical trials, if any;

● identify, assess and study new or expanded indications for our products and product candidates and/or new or alternative dosing levels, dosing frequencies or administrations of our products and product candidates;

● make milestone or other payments under any current or future license, acquisition, collaboration or other strategic transaction agreement;

● make milestone or other payments under any current or future license, acquisition, collaboration or other strategic transaction agreements;

● seek to identify, assess and study new or expanded indications for our products or product candidates, new or alternative dosing levels and frequency for our products or product candidates or new or alternative administration of our products or product candidates, including method, mode or delivery device;

● seek to identify, assess, acquire or develop additional product candidates;

● address litigation arising out of, but not limited to, product liability claims, intellectual property disputes, disputes arising from our collaboration and license agreements and employment-related disputes;

● address any litigation, including product liability suits, employment-relate disputes, intellectual property disputes and disputes arising out of our collaboration and license agreements;

● enter into licensing, acquisition, collaboration or other strategic transaction agreements;

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● seek to attract and retain skilled personnel;

● create additional infrastructure to support our product development and commercialization efforts;

● experience delays or encounter issues with any of the above, including but not limited to failed trials, complex results, safety issues, regulatory challenges that require longer follow-up of existing trials, additional major trials, additional supportive trials in order to pursue marketing approval, a pandemic or other outbreak of disease or disruptions to the national or global economy.

● manage delays or issues with the foregoing, such as failed trials, complex or inconclusive results, safety concerns, regulatory challenges that require longer follow-up of existing trials, additional major trials, additional supportive trials in order to pursue marketing approval, pandemics or economic disruptions.

Further, our financial results may fluctuate significantly from quarter-to-quarter and year-to-year, such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.

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If we are unable to raise capital when needed on acceptable terms, if at all, we may be forced to delay, limit, reduce or cease one or more of our product development plans, research and development programs for our product candidates or commercialization efforts.

We also may be unable to expand our operations or otherwise capitalize on our business opportunities or may be

required to relinquish rights to our product candidates or products.

We also may be unable to expand our operations or otherwise capitalize on our business opportunities or may be required to relinquish rights to our product candidates or products.

Any of these occurrences could materially affect our business, financial condition and results of operations.

Financing our activities also carries risk.

Financing our operations and activities also carries risk.

The sale of additional equity or convertible securities would dilute all of our shareholders.

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The incurrence of indebtedness would result in increased fixed payment obligations, and we may be required to agree to certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire, sell or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business.

Obtaining funds through licensing, collaboration or other strategic transactions or arrangements with third parties may require us to relinquish rights to some of our technologies, product candidates or future revenue streams, or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

Obtaining funds through licensing, collaboration or other strategic transactions or arrangements may require us to relinquish rights to some of our technologies, product candidates or future revenue streams, or otherwise agree to terms unfavorable to us, any of which may have a material adverse effect on our business, operating results and prospects.

If we raise funds through research grants, we may be subject to certain requirements, which may limit our ability to use the funds or require us to share information from our research and development.

If we fail to comply with reporting and payment obligations under the MDRP or other governmental pricing programs, we could be subject to additional reimbursement requirements, penalties, sanctions and fines, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

We participate in governmental programs that impose extensive drug price reporting and payment obligations on pharmaceutical manufacturers, including the Medicaid Drug Rebate Program (the “MDRP”), the Federal Supply Schedule (the “FSS”) and the PHS 340B Drug Pricing Program.

If we fail to comply with reporting and payment obligations under the MDRP or other governmental pricing and price reporting programs, we could be subject to additional reimbursement requirements and penalties or sanctions, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

In the United States, we participate in and/or report pricing and other data in connection with the Medicaid Drug Rebate Program (the “MDRP”), Medicare Part B, the Federal Supply Schedule (the “FSS”), the PHS 340B Drug Pricing Program and a number of other federal and state government programs.

For example, we have certain price and data reporting obligations under the MDRP and we have obligations to report the average sales price under the Medicare program.

Under the MDRP, we are required to pay a rebate to each state Medicaid program for quantities of our products that are dispensed to Medicaid beneficiaries and paid for by a state Medicaid program as a condition of having federal funds being made available to the states for our products under Medicaid and for payment to be available for our products under Medicare Part B.

Those rebates are based on pricing data reported by us on a monthly and quarterly basis to CMS.

If we are found to have violated the requirements of such programs, we may become subject to penalties or other enforcement mechanisms, which could have a material adverse effect on our business.

Pricing and rebate calculations vary across products and programs, are complex, and are often subject to interpretation by us, governmental or regulatory agencies and the courts, which can change and evolve over time.

Such pricing calculations and reporting, along with any necessary restatements and recalculations, could increase our costs for complying with the laws and regulations governing the MDRP and other governmental programs, and under the MDRP could result in an overage or undercharge in Medicaid rebate liability for past quarters.

Price recalculations under the MDRP also may affect the ceiling price at which we are required to offer products under the 340B program.

For example, starting in 2026, “average sales price” regulatory changes related to “bona fide service fees” and the mandatory submission of reasonable assumptions may increase the complexity and compliance burden around Medicare Part B reporting.

In addition, as the result of the Inflation Reduction Act of 2022, the “average manufacturer prices” we report under the MDRP will also be used to compute rebates under Medicare Part D triggered by price increases that outpace inflation.

Such pricing calculations and reporting, along with any necessary restatements and recalculations, could increase our costs for complying with the laws and regulations governing the MDRP and other governmental programs, our rebate liability or the ceiling price at which we are required to offer products under the 340B program.

Civil monetary penalties can be applied if we are found to have knowingly submitted any false price or product information to the government, if we fail to submit the required price data on a timely basis, or if we are found to have charged 340B covered entities more than the statutorily mandated ceiling price.

CMS could also terminate our Medicaid drug rebate agreement, in which case federal payments may not be available under Medicaid or Medicare Part B, if applicable, for our covered outpatient drugs.

Pursuant to the IRA, the AMP figures we report will also be used to compute rebates under Medicare Part D triggered by price increases that outpace inflation.

The Centers for Medicare & Medicaid Services could also terminate our Medicaid drug rebate agreement, in which case federal payments may not be available under Medicaid or Medicare Part B, if applicable, for our covered outpatient drugs.

We cannot assure you that our submissions will not be found to be incomplete or incorrect.

Enacted and future healthcare legislation may have a material adverse effect on our business and results of operations.

In the United States, the United Kingdom, the EU and other jurisdictions, there have been and we expect there will continue to be a number of legislative and regulatory initiatives and proposed changes to the healthcare system that could affect our operations.

See “ Business – Government Regulation – Healthcare Reform and Potential Changes to Healthcare Laws ” for more information on such initiatives and changes in the United States and the EU.

We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States, the United Kingdom, the EU or elsewhere.

For example, such actions may result in changes to governmental policies and regulations that affect our operations and business, including our clinical trials, regulatory approval, pharmaceutical pricing and reimbursement.

If we or any third party we may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third party are not able to maintain regulatory compliance, our product candidates may lose any regulatory approval that may have been obtained which may have a material impact on our business and operations.

Our information technology systems, or those of our third party CDMOs, CROs, specialty pharmacies, third party logistics providers and other contractors, consultants and service providers, may fail or suffer cyberattacks or security breaches, which could result in a material disruption of our or such third party’s business or operations, impede our development programs for our product candidates or materially impact our ability to commercialize our products.

Despite the implementation of security measures, our information technology systems and those of our third party CDMOs, CROs, specialty pharmacies, third party logistics providers and other contractors, consultants and service providers are vulnerable to attack, damage or interruption from viruses and malware (e.g., ransomware), malicious code, theft, natural disasters, terrorism, war, telecommunication and electrical failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee misuse, human error, fraud, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization.

Attacks upon information technology systems are increasing in their frequency, levels of persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise.

In addition, potential future legislative, regulatory or policy changes by the current presidential administration may introduce additional uncertainty for our business.

These could include changes to the level of scrutiny applied by the Health Resources and Services Administration to enforce non-compliance with the 340B Drug Pricing Program, new price restrictions or price reporting requirements on products we sell to Medicaid, Medicare or other government purchasers, or other regulatory changes impacting reimbursement or competitive dynamics in multisource markets.

For example, federal agencies are developing new drug pricing pilot programs under Medicare Part B and Part D that, if finalized as proposed, would replace existing inflation-based Medicare rebates with rebates determined on the basis of international prices, for drugs and patients subject to the model.

Any such changes could significantly impact our business and operations.

Increasingly, states are enacting legislation requiring manufacturers to report drug pricing information.

States, however, have not always clearly defined their reporting requirements, which may result in manufacturers inadvertently failing to properly disclose the required pricing information.

Complying with federal and state programs and future changes to these programs can be complex and cost-and resource-intensive, and could have a material adverse effect on our business, prospects, operating results and financial condition.

Current and future healthcare legislation or executive or administrative action may have a material adverse effect on our business and results of operations.

In the United States, the UK, the EU and other jurisdictions, there have been and we expect there will continue to be a number of executive, legislative and regulatory initiatives and proposed changes to healthcare systems, drug pricing and reimbursement policies that could affect our operations.

Within the United States, federal and state governments have been active in proposing and implementing health care reform.

Drug pricing and payment reform has been an ongoing focus for reform.

Recent examples include federal legislation that eliminated a statutory cap on Medicaid drug rebate program rebates effective January 1, 2024.

As another example, the IRA includes a number of changes intended to address rising prescription drug prices in Medicare Parts B and D, with varying implementation dates.

These changes include caps on Medicare Part D out-of-pocket costs, Medicare Part B and Part D drug price inflation rebates, a new Medicare Part D manufacturer discount drug program (replacing the prior Medicare Part D coverage gap discount program) and a drug price negotiation program for certain high spend Medicare Part B and D drugs (with the first set of negotiated Medicare maximum fair prices going into effect in 2026).

The IRA has had a significant impact on the pharmaceutical industry and that impact is anticipated to continue.

Beyond the IRA, changes to Medicaid effective in 2024 eliminated the Medicaid rebate cap and changes to certain Medicare price reporting requirements for drugs beginning in 2026 will likely increase the administrative and compliance burden for manufacturers.

In addition, recent legislation expanded the orphan drug exclusion in Medicare drug price negotiation program.

Under the current United States presidential administration, there have been significant and wide-ranging reforms to federal policy and the federal government.

Drug pricing and reimbursement reform have been a particular area of focus.

For example, an Executive Order was issued in April 2025 with multiple directives aimed at lowering drug prices, including refining the Medicare drug price negotiation program established by the IRA;

accelerating competition for high-cost prescription drugs by accelerating approval of generics and biosimilars and facilitating the process for re-classifying prescription drugs as over-the-counter drugs, and increasing drug importation.

In May 2025, another Executive Order was issued that directed government agencies and officials to identify most-favored nation pricing targets for prescription drugs (and looked to pharmaceutical manufacturers to make significant progress towards delivering target prices to patients), prevent foreign countries from disproportionately shifting the cost of global pharmaceutical research and development to the United States and facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers to sell their products to patients at the most-favored-nation price.

In the wake of the Executive Orders and related executive initiatives, a number of pharmaceutical manufacturers have announced direct-to-consumer offerings with discounted prices and/or reached agreement with the federal government regarding pricing for drugs, including prices for Medicaid drugs and newly launched products.

A website sponsored by the federal government has also been launched to offer pharmaceutical direct-to-consumer channels.

Federal agencies are developing new drug pricing pilot programs, such as a Medicaid model which would authorize the federal government to negotiate Medicaid supplemental rebates with participating manufacturers on behalf of state Medicaid programs, in exchange for standardized coverage criteria for participating manufacturer drugs, and the proposed Medicare Part B and Part D pilot models that, if finalized as proposed would replace existing inflation-based Medicare rebates with rebates determined on the basis of international prices, for drugs and patients subject to the model.

Other healthcare reform efforts or actions may affect access to healthcare coverage or the funding of health care benefits, although the full impact of such efforts or actions cannot be predicted with certainty.

For example, the Congressional Budget Office has estimated that Medicaid provisions in the 2025 budget reconciliation legislation, including restrictions in eligibility and funding for Medicaid, as well as changes to the healthcare marketplace such as the elimination of certain subsidies, will increase the number of uninsured patients.

Additionally, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices.

Specifically, there have been several recent Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug and biologic pricing, reduce the cost of prescription drugs and biologics under Medicare, review the relationship between pricing and manufacturer patient programs and reform government program reimbursement methodologies for drugs and biologics.

Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical product pricing, including price constraints, restrictions on copayment assistance by pharmaceutical manufacturers, value-based pricing, marketing cost disclosure and other transparency measures, and, in some cases, measures designed to encourage importation from other countries and bulk purchasing.

Healthcare reform efforts have been and may continue to be subject to scrutiny, legal challenge and subsequent amendment, creating further uncertainty.

Other government actions could have an adverse effect upon, and could prevent, our products’ commercial success.

For example, the current presidential administration’s announced tariff on branded or patented drugs may increase the cost of drug products that are imported from abroad or manufactured using products or materials imported from abroad.

The timeline for implementation of this tariff has not yet been finalized.

As another example, the Budget Control Act of 2011, as amended, resulted in the imposition of reductions in Medicare (but not Medicaid) payments to providers in 2013 and remains in effect through 2032 unless additional Congressional action is taken.

Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented and/or any significant taxes or fees that may be imposed on us could have an adverse impact on our results of operations.

The nature and extent of future healthcare or other reforms remain unpredictable.

There is ongoing uncertainty regarding the nature and impact of executive, administrative or congressional actions and potential litigation.

We also cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or executive or administrative action, either in the United States, the UK, EU or elsewhere.

Government policies and regulations may change, affecting our operations and business, including clinical trials, regulatory approval, pharmaceutical pricing and reimbursement.

If we or third parties upon whom we rely fail to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we or such third party are not able to maintain regulatory compliance, our product candidates may lose any regulatory approval that may have been obtained which may have a material impact on our business and operations.

Our information technology systems, or those of our third party CDMOs, CROs, specialty pharmacies, third party logistics providers and other contractors, consultants and service providers, may fail or suffer cyberattacks or security incidents, which could result in a material disruption of our or such third party’s business or operations, impede our development programs for our product candidates or materially impact our ability to commercialize our products.

Despite the implementation of security measures, our information technology systems and those of our third-party CDMOs, CROs, specialty pharmacies, logistics providers and other contractors, consultants and service providers remain vulnerable to attack, damage or interruption from malware (e.g., ransomware), viruses, theft, natural disasters, terrorism, war, telecommunication and power failures, hacking, cyberattacks, phishing attacks and other social engineering schemes, employee misuse, human error, fraud, denial or degradation of service attacks, nation-state and nation-state-supported actors or unauthorized access or use by persons within our organization, or persons with access to systems inside our organization.

Attacks upon information technology systems are increasing in frequency, persistence, sophistication and intensity, and are being conducted by sophisticated and organized groups and individuals with a wide range of motives and expertise.

Technologies such as artificial intelligence and machine learning are additionally being used to create more sophisticated attacks on targets, including targeted social engineering attempts.

We may also face increased cybersecurity risks due to our reliance on internet technology and the number of our employees, such as our commercial field force, who are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities.

Employees may also fail to comply with our cybersecurity protocols, exposing us to vulnerabilities despite our safeguards.

Furthermore, because the techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.

Employees may fail to follow cybersecurity protocols, exposing us to vulnerabilities or undermining the safeguards we have put in place.

Techniques to gain unauthorized access to, or to sabotage, systems

change frequently and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.

In addition, because we have outsourced elements of our information technology infrastructure to vendors, such vendors may or could have access to our confidential information.

A breach at a CDMO, CRO, contractor, consultant, service provider or other third party with which we engage may increase our exposure by allowing criminals to exploit our relationship with such persons.

Such security breaches may remain undetected for an extended period.

Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.

We and certain of our service providers are from time to time subject to cyberattacks and security incidents.

While we do not believe that we have experienced any current or past significant system failure, accident or security breach that has materially affected or would be reasonably likely to materially affect us, including our business strategy, results of operations or financial condition to date, if such an event were to occur and cause interruptions in our business and operations or those of our third party CDMOs, CROs, specialty pharmacies, third party logistics providers and other contractors, consultants and service providers, the costs associated with the investigation, remediation and potential notification of a breach to counter-parties and data subjects could be material.

A breach could result in a material disruption of our or such third party’s business or operations.

For example, the loss of clinical trial data for our product candidates could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

To the extent that any disruption or security breach results in a loss of or damage to our data or applications or inappropriate disclosure or theft of confidential or proprietary information, the further development of our product candidates could be delayed.

A cyberattack on a CDMO, CRO, contractor, consultant, service provider or other third party could also increase exposure by allowing criminals to exploit our relationship with such persons.

Such security incidents may remain undetected for an extended period.

Even if identified, we may be unable to adequately investigate or remediate incidents or cyberattacks due to attackers increasingly using tools and techniques that are designed to circumvent controls, avoid detection and remove or obfuscate forensic evidence.

We and certain of our service providers experience periodic cyberattacks and security incidents.

While we do not believe that we have experienced any current or past significant system failure, accident or security incident that has materially affected or would be reasonably likely to materially affect us, a significant event could disrupt our operations or if such an event were to occur and cause interruptions in our business and operations or those of our third party CDMOs, CROs, specialty pharmacies, third party logistics providers and other contractors, consultants and service providers, the costs associated with the investigation, remediation and potential notification of a cyberattack to counter-parties and data subjects could be material.

A cyberattack could result in a material disruption of our or such third party’s business or operations.

For example, the loss of clinical trial data could delay regulatory approvals and significantly increase costs necessary to recover or reproduce the data.

To the extent that any disruption or security incident results in a loss of or damage to, inappropriate disclosure of or theft of confidential or proprietary information, the further development of our product candidates could be delayed and such proprietary information may be made available to other parties and thereby decrease the value of such information.

Further, disruptions to our or our third party providers’ infrastructure may inhibit our ability to commercialize ARCALYST through, among other things, interruptions in our logistics fulfillment, loss of patient and prescriber information, interruptions in our ability to communicate with the third party providers upon which we rely and impairments in our ability to service our patients and address their concerns.

Any of these events could adversely impact our business and ability to generate product revenue.

Although we maintain cybersecurity insurance coverage, it may not be adequate to cover all liabilities that we may incur from cyberattacks or security breaches and is subject to deductibles and coverage limitations.

Any such event could adversely affect our business and revenue.

Although we maintain cybersecurity insurance, coverage may be inadequate and subject to deductibles and limitations.

Actual or perceived failures to comply with applicable data protection, privacy and security laws, regulations, standards and other requirements could adversely affect our business, results of operations and financial condition.

We are or in the future may be subject to data privacy and protection laws, regulations, policies and contractual obligations that govern the collection, transmission, storage, processing and use of personal information or personal data.

The regulatory framework for data privacy and security worldwide is continuously evolving and developing and, as a

result, interpretation and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future.

We are subject to data privacy and protection laws, regulations, policies and contractual obligations governing the collection, transmission, storage, processing and use of personal information and data.

The global regulatory framework for data privacy and security is evolving, and interpretation and enforcement practices are likely to remain uncertain.

This evolution may affect our ability to operate in certain jurisdictions;

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The cost of compliance with these laws, regulations and standards is high and is likely to increase in the future.

Any failure or perceived failure by us to comply with federal, state or foreign laws or regulations, our internal policies and procedures or our contracts governing our processing of personal information could result in negative publicity, government investigations and enforcement actions, claims by third parties and damage to our reputation, any of which could have a material adverse effect on our business, results of operation, and financial condition.

For example, most healthcare professionals, including research institutions from which we obtain patient health information, are subject to privacy and security regulations promulgated under HIPAA.

We do not believe that we are currently acting as a covered entity or business associate under HIPAA and thus are not subject to its requirements or penalties.

However, any person may be prosecuted under HIPAA’s criminal provisions either directly or under aiding-and-abetting or conspiracy principles.

Consequently, depending on the facts and circumstances, we could face substantial criminal penalties if we knowingly receive individually identifiable health information from a HIPAA-covered healthcare professional or research institution that has not satisfied HIPAA’s requirements for disclosure of individually identifiable health information.

In addition, we may maintain sensitive personally identifiable information, including health information, that we receive throughout the clinical trial process, in the course of our research collaborations, directly from individuals (or their healthcare professionals) who enroll in our patient support program and directly from individuals who consent to be included in our marketing database.

As such, we may be subject to state laws requiring notification of affected individuals and state regulatory authorities in the event of a breach of personal information, which is a broader class of information than the health information protected by HIPAA.

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

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

Certain states have also adopted comparable privacy and security laws and regulations governing the privacy, processing and protection of personal information.

For example, the California Consumer Privacy Act, as amended by the California Privacy Rights Act (together, the “CCPA”) gives California residents expanded rights to access, correct, and delete their personal information, opt out of certain personal information sharing, receive detailed information about how their personal information is used and also imposes limitations on data uses, new audit requirements for higher risk data and opt outs for certain uses of sensitive data.

The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that has increased the likelihood of, and the risks associated with data breach litigation.

Further, the California Privacy Rights Act created a California data protection agency authorized to enforce the CCPA and issue substantive regulations, which could result in increased privacy and information security enforcement.

Similar laws have been passed in other states and are continuing to be proposed at the state and federal level, reflecting a trend toward more stringent privacy legislation in the United States.

The Washington My Health My Data Act, which is applicable to companies doing business in Washington or targeting products or services to consumers in Washington, imposes disclosure and consent requirements, among other things, with respect to broadly defined consumer health data, and is enforceable through consumer class actions.

Additional compliance investment and potential business process changes may also be required.

Furthermore, the Federal Trade Commission (“FTC”) and many state Attorneys General continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive.

For example, according to the FTC, failing to take appropriate steps to keep consumers’ personal information secure can constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.

The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.

Our clinical trial programs outside the United States may implicate international data protection laws, including the GDPR, and legislation of EU member states and EEA countries implementing it.

The GDPR imposes strict

requirements for processing the personal data of individuals within the EEA.

In addition, some of the personal data we process in respect of clinical trial participants is special category or sensitive personal data under the GDPR, and subject to additional compliance obligations and to local law derogations.

Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.

In addition to fines, a breach of the GDPR may result in regulatory investigations, reputational damage, orders to cease or change our data processing activities, enforcement notices, assessment notices (for a compulsory audit) and/ or civil claims (including class actions).Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EU and the United States remains uncertain.

Any failure or perceived failure by us to comply with applicable laws, internal policies or contractual obligations with respect to processing personal information could result in negative publicity, government investigations, enforcement actions, third-party claims and reputational harm, any of which could materially affect our business, results of operations and financial condition.

In the United States, most healthcare professionals and research institutions from which we obtain patient health information are subject to HIPAA.

We may obtain health information from third parties, such as research institutions with which we collaborate, that are subject to privacy and security requirements under HIPAA.

While we are generally not directly subject to HIPAA, other than potentially with respect to providing certain employee benefits, we could be subject to criminal penalties for knowingly obtaining or disclosing protected health information maintained by a HIPAA covered entity in a manner noncompliant with HIPAA.

In the event that we are subject to or affected by HIPAA, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.

The United States Federal Trade Commission (“FTC”) and many state Attorneys General continue to enforce federal and state consumer protection laws governing the collection, use, dissemination and security practices of personal information as it considers failing to appropriately secure consumers’ personal information to be unfair acts or practices under the Federal Trade Commission Act.

The FTC expects a company’s data security measures to be

reasonable and appropriate in light of the sensitivity and volume of consumer information held by the company, the size and complexity of its business and the cost to improve security and reduce vulnerabilities.

Our clinical trial programs and other operations outside the United States may implicate international data protection laws, including the European Union General Data Protection Regulation 2016/679 (“GDPR”), the UK GDPR and the Swiss Federal Act on Data Protection (the “DPA”).

The GDPR imposes strict requirements for processing EEA residents’ personal data within the EEA and considers some of the personal data we process in respect of clinical trial participant personal data to fall under special categories requiring additional compliance obligations and to local law derogations.

Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines.

GDPR noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.

In addition to fines, a breach of the GDPR may also result in regulatory investigations, reputational damage, orders to cease or change our data processing activities, enforcement notices, audits and/ or civil claims (including class actions).

The UK maintains similar legislation known as the UK GDPR.

The GDPR regulates transfers of personal data subject to the GDPR to third countries with inadequate personal data protection, including the United States.

Because we operate clinical trials in the EU and our operations are substantially centered into the United States, we face additional risk when transferring personal data.

Case law from the Court of Justice of the European Union (“CJEU”) states that reliance on the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism) alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.

We currently rely on the EU standard contractual clauses and the United Kingdom Addendum to the EU standard contractual clauses, as applicable, to transfer personal data outside the EEA and the United Kingdom, including to the United States, with respect to both intragroup and third party transfers.

Following a period of legal complexity and uncertainty regarding international personal data transfers, particularly to the United States, we expect the regulatory guidance and enforcement landscape to continue to develop, in relation to transfers to the United States and elsewhere.

As a result, we may have to make certain operational changes and we will have to implement revised standard contractual clauses and other relevant documentation for existing data transfers within required time frames.

Further, following the withdrawal of the United Kingdom from the EU on January 31, 2020, and the expiration of the transition period, from January 1, 2021, companies have had to comply with the GDPR and also the United Kingdom GDPR, which, together with the amended UK Data Protection Act 2018, retains the GDPR in UK national law.

The United Kingdom GDPR mirrors the fines under the GDPR, e.g., fines up to the greater of €20 million (£17.5 million) or 4% of global turnover.

As we continue to expand into other foreign countries and jurisdictions, we may be subject to additional laws and regulations that may affect how we conduct business.

The Swiss Federal Act on Data Protection (the “DPA”) also applies to the collection and processing of personal data by companies located in Switzerland, or in certain circumstances, by companies located outside of Switzerland.

The DPA may lead to an increase in our costs of compliance, risk of noncompliance and penalties for noncompliance as we potentially expand our footprint in Switzerland.

Failure or perceived failure to comply with the GDPR, the United Kingdom GDPR, the DPA and other countries’ privacy or data security-related laws, rules or regulations could result in significant regulatory penalties and fines, affect our compliance with contracts entered into with our partners and collaborators, and could have an adverse effect on our reputation, business and financial condition.

Furthermore, certain health privacy laws, data breach notification laws, consumer protection laws and genetic testing laws may apply directly to our operations or those of our collaborators and may impose restrictions on our collection, use and dissemination of individuals’ health information.

We currently rely on standard contractual clauses to transfer personal data outside the EEA and the UK, including to the United States, with respect to both intragroup and third party transfers.

We expect the regulatory guidance and enforcement landscape to continue to develop and may need to make certain operational changes (including revised standard contractual clauses and other relevant documentation for existing data transfers that are necessary to run our organization.

Failure or perceived failure to comply with the GDPR, the UK GDPR, the DPA and other countries’ privacy or data security-related laws, rules or regulations could result in significant regulatory penalties and fines, affect our compliance with contracts entered into with our partners and collaborators, and could have an adverse effect on our reputation, business and financial condition.

In addition to the above, we are also subject to other laws and regulations, such as health privacy laws, data breach notification laws, consumer protection laws and genetic testing laws that may apply directly to our operations or those of our collaborators and may impose restrictions on our collection, use and dissemination of individuals’ health information.

Moreover, patients about whom we or our collaborators obtain health information, as well as the providers who share this information with us, may have statutory or contractual rights that limit our ability to use and disclose the information.

We may be required to expend significant capital and other resources to ensure ongoing compliance with applicable privacy and data security laws.

Claims that we have violated individuals’ privacy rights or breached our contractual obligations, even if we are not found liable, could be expensive and time consuming to defend and could result in adverse publicity that could harm our business.

Although we work to comply with applicable laws, regulations and standards, our contractual obligations and other legal obligations, these requirements are evolving and may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply.

Compliance will require significant expenditures of capital and time and any claims that we have violated individuals’ privacy rights or breached our contractual obligations or applicable law could result in expensive and time-consuming litigation.

Although we work to comply with our legal and contractual obligations, these requirements may be modified, interpreted and applied in an inconsistent manner from one jurisdiction to another, and may conflict with one another or other legal obligations with which we must comply.

In addition, we make public statements about our use, collection, disclosure and other processing of personal data through our privacy policies and information provided on our website.

Although we endeavor to comply

with our public statements and documentation, we may at times fail to do so or be alleged to have failed to do so.

If we or our third party CDMOs, CROs or other contractors, consultants or service providers fail to comply, or are perceived to have failed to comply, with applicable regulatory requirements, applicable policies or notices relating to privacy or data protection, contractual or other obligations to third parties, or any other legal obligations, laws, rules, regulations and standards relating to privacy or data protection, we could be subject to a range of regulatory actions that could affect our or our contractors’ ability to develop and commercialize our product candidates and could harm or prevent sales of any affected products that we are able to commercialize, or could substantially increase the costs and expenses of developing, commercializing and marketing our products.

Any threatened or actual government investigation or enforcement action, litigation, claims or other proceedings could also generate adverse publicity, harm our reputation, result in significant liability and require that we devote substantial resources that could otherwise be used in other aspects of our business.

We or our third party-contractors may fail or be alleged to have failed to comply with such statements or any other obligations we have with respect to personal information, privacy or data protection.

Such failures or alleged failures could result in government investigations or enforcement actions, litigation, claims or other proceedings that could generate adverse publicity, harm our reputation, negatively impact our ability to commercialize and market products and product candidates, result in significant liability and require that we devote substantial resources that could otherwise be used in other aspects of our business.

Our future success depends on our ability to retain key executives and senior management;

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Recruiting and retaining qualified corporate, scientific, clinical, regulatory, manufacturing and sales and marketing personnel is also critical to our success.

The failure to recruit, or the loss of the services of our executive officers, senior management or other key employees could impede the achievement of our research, development and commercialization objectives, including with respect to our sales, marketing and distribution capabilities, infrastructure and organization to commercialize products for which we have obtained marketing approval and maintain proper regulatory oversight functions, any of which would seriously harm our ability to successfully implement our business strategy.

Furthermore, replacing executive officers, senior management and key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to successfully develop, gain regulatory approval of and commercialize products.

Changes in our senior management may be disruptive to our business, and, if we are unable to manage an orderly transition of responsibilities, our business may be adversely affected.

Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate these key personnel on acceptable terms given the competition among numerous pharmaceutical and biotechnology companies for similar personnel.

Changes in our senior management may be disruptive to our business, especially if we are unable to manage an orderly transition of responsibilities.

Further, we may be unable to hire, train, retain or motivate these key personnel on acceptable terms due to intense competition among numerous pharmaceutical and biotechnology companies for similar personnel.

We also experience competition for the hiring of corporate, scientific, sales, marketing and clinical personnel from other pharmaceutical companies, universities and research institutions, as applicable.

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For example, our business operations may rely on foreign personnel who require work permits.

Any changes in immigration policies, work permit regulations, or visa requirements could adversely affect our ability to retain skilled employees.

If work permits are denied, revoked, or not renewed, we may face disruptions in its operations, increased costs for hiring and training replacements, and potential delays in project execution.

Any changes in immigration policies, work permit regulations or visa requirements (including the cost to obtain visas) could adversely affect our ability to retain skilled employees.

If work permits are denied, revoked or not renewed, we may face disruptions in our operations, increased costs for hiring and training replacements, and potential delays in project execution.

If we are not able to continue to attract and retain, on acceptable terms, the qualified personnel necessary for the continued development of our business, we may not be able to sustain our operations or growth.

Effective succession planning is also important to our long-term success and ability to operate as a generational company.

As we encounter employee turnover, including turnover of key personnel, we may be unable to timely train or locate replacement personnel in a way that delays our strategic planning and clinical and commercial execution.

As we encounter employee turnover, including turnover of key personnel, we may be unable to timely train or locate replacement personnel in a way that does not delay our strategic planning and clinical and commercial execution.

Our employees, principal investigators, CROs, consultants and other third party service providers may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements and insider trading.

We are exposed to the risk that our employees, principal investigators, CROs, consultants and other third party service providers may engage in fraudulent conduct or other illegal activity.

Misconduct by these parties could include intentional, reckless or negligent conduct that violate the regulations of the FDA and other regulatory authorities, including those laws requiring the reporting of true, complete and accurate information to such authorities;

Our employees, principal investigators, CROs, consultants and other third party service providers may engage in fraudulent conduct or other illegal activity, including intentional, reckless or negligent conduct that violates the regulations of the FDA and other regulatory authorities, including laws related to disclosure of true, complete and accurate information to such authorities;

reporting of clinical data;

healthcare fraud and abuse laws and regulations in the United States and abroad;

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

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

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, including

off-label promotion, sales commission, customer incentive programs and other business arrangements.

Activities subject to these laws also involve the improper use of information obtained in the course of clinical trials or creating fraudulent data in our preclinical studies or clinical trials, which could result in regulatory sanctions and cause serious harm to our reputation.

It is not always possible to identify and deter misconduct by employees and other third parties.

The precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with these laws or regulations.

The precautions we take to detect and prevent this activity may not effectively control such conduct, whether unknown or unmanaged risks or losses or in protecting us from governmental investigations, lawsuits or other adverse actions stemming from a failure to comply with these laws or regulations.

Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

Changes in United States trade policy, including tariffs imposed by the United States and any reciprocal tariffs imposed in response, could materially impact our business and results of operations.

Changes to United States trade policy, including tariffs imposed by the United States on imported goods, as well as reciprocal tariffs that may be imposed by foreign governments, may adversely affect our business and the global macroeconomic environment.

The current presidential administration has imposed or is considering imposing baseline tariffs on all other countries, reciprocal tariffs with certain countries and particularized tariffs on certain types of foreign goods, including pharmaceutical products and components manufactured outside of the United States.

Such tariffs are expected to increase the price of goods imported into the United States, including pharmaceutical products and important products that are ancillary to the administration, processing or testing of pharmaceutical products.

There is substantial uncertainty with respect to what extent new (or modified) tariffs will be imposed in the long-term in the United States and other countries, or the ultimate impact such tariffs will have on us, our industry and the patients we seek to serve.

Further, it is unclear to what extent subsequent trade negotiations between the United States and other countries will reduce or remove previously announced tariffs.

Such unpredictability creates substantial uncertainty and poses significant planning challenges for our operations and our CDMOs’ long term capital investment plans.

Unlike consumer goods, pharmaceuticals face unique regulatory, technology and capacity constraints that make rapid supply chain adjustments particularly difficult and costly.

Should current tariffs hold or be increased we may be unable to identify and qualify alternative sources of supply and our business may be materially and adversely affected.

ARCALYST is currently manufactured in the United States, and we are in the process of moving ARCALYST drug substance manufacturing to Samsung in South Korea.

While we do not expect that the current tariffs will result in a material impact to our overall business, financial condition or results of operations, a significant increase to tariffs on pharmaceutical products imported from South Korea may have a material effect on our business following the completion of such technology transfer.

Unfavorable global economic or operational conditions could adversely affect our business, financial condition or results of operations.

Our results of operations could be adversely affected by general conditions in the global economy and in the global financial markets.

In addition, global credit and financial markets have recently experienced volatility and disruptions, including severely diminished liquidity and credit availability, rising interest rates, declines in consumer confidence, declines in economic growth, increase in unemployment rates and uncertainty about economic stability.

These disruptions could adversely affect our ability to manufacture, market and sell our commercialized products, including ARCALYST, and satisfy the required supply for any of our product candidates or successfully complete preclinical and clinical development of our product candidates, which could require us to incur additional costs, and impair our ability to obtain regulatory approval of our product candidates and generate revenue.

Our results of operations could be adversely affected by general conditions in the global economy and disruptions in global financial markets.

These disruptions could adversely affect our ability to manufacture, market and sell ARCALYST, and satisfy the required supply for any of our product candidates or successfully complete preclinical and clinical development of our product candidates, which could require us to incur additional costs, and impair our ability to obtain regulatory approval of our product candidates and generate revenue.

Doing business internationally involves a number of other risks, including but not limited to:

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● additional potentially relevant third-party patent rights;

● complexities and difficulties in obtaining protection and enforcing our intellectual property;

● difficulties in staffing and managing operations outside of the United States;

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● natural disasters, political and economic instability such as war, terrorism, political unrest, outbreak of disease, labor disputes and boycotts;

● curtailment of trade, and other business restrictions;

● imposition of tariffs, curtailment of trade and other business restrictions;

● certain expenses including, among others, expenses for travel, translation and insurance;

● regulatory and compliance risks that relate to maintaining accurate information and control over clinical activities, sales and other functions that may fall within the purview of the United States Foreign Corrupt Practices Act, its books and records provisions or its antibribery provisions.

Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

The increasing and evolving focus on environmental, social and governance (“ESG”) matters could increase our costs, harm our reputation, adversely impact our access to capital and financial results or otherwise adversely impact our business.

There has been increasing and evolving public focus by investors, patients, environmental activists, the media and governmental and nongovernmental organizations on a variety of ESG matters, such as climate change and diversity, equity and inclusion matters.

We may experience pressure from stakeholders, including our suppliers, employees, patients and shareholders, to set goals or make commitments relating to ESG matters that affect us, including the design and implementation of specific risk mitigation strategic initiatives relating to ESG topics.

We may also receive pushback from other stakeholders regarding our initiatives related to ESG matters.

For example, in January 2025, President Trump signed a number of executive orders focused on DEI matters, which indicate continued scrutiny of such initiatives and may implicate the initiatives of non-governmental entities, including publicly traded companies.

If we do not successfully manage expectations across varied stakeholder interests, it could erode stakeholder trust or impact our reputation, and our financial results may suffer.

In addition, even if we are effective at addressing such concerns, we may experience increased costs as a result of balancing competing interests related to ESG matters and executing upon our ESG goals, which costs may not be offset by any benefit to our reputation, and which could have an adverse impact on our business and financial condition.

Outside of the United States, continued global focus on ESG matters has resulted in the adoption of new laws and regulations, including reporting requirements imposed by the United Kingdom, which will impact the annual reports we are required to file in the United Kingdom as a result of the Redomiciliation.

New reporting requirements may be particularly difficult or expensive to comply with and, if we fail to comply, we may be required to issue financial restatements, suffer harm to our reputation or otherwise have our business be adversely impacted.

Such ESG matters may also impact our suppliers or patients, which may adversely impact our business, financial condition and results of operations.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on ESG matters.

Such ratings are used by some investors to inform their investment or voting decisions.

Unfavorable ESG ratings could lead to negative investor sentiment toward us and/or our industry, which could have a negative impact on our access to and costs of capital.

To the extent ESG matters negatively impact our reputation, we may be affected in a number of ways, including an inability to recruit and retain personnel and a decrease in the trading price of our Class A ordinary shares.

● regulatory and compliance risks that relate to maintaining accurate information and control over clinical activities, sales and other functions that may fall within the purview of the FCPA, its books and records provisions or its antibribery provisions and the application of anti-corruption and anti-bribery laws in applicable jurisdictions.

Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current global economic climate and financial markets conditions could adversely impact our business.

Climate change, and related regulation, may result in increased costs or otherwise negatively impact our operations and harm our business.

The impacts of climate change on the global economy and our industry are rapidly evolving.

Physical impacts of climate change (including but not limited to floods, droughts, more frequent and/or intense storms and wildfires), could negatively impact our business and operations, as well as the business and operations of our third party CDMOs and CROs upon whom we rely.

Physical impacts of climate change (including but not limited to floods, hurricanes, droughts, more frequent and/or intense storms and wildfires), could negatively impact our business and operations, as well as the business and operations of our third party CDMOs and CROs upon whom we rely.

Such events may result in damage or loss of our products and product candidates during their manufacture and shipment, cause delays in clinical development due to trial site disasters or result in losses of critical data, any of which may adversely impact our operations.

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Risks Related to Ownership of Our Ordinary Shares

The concentration of ownership of our Class B ordinary shares, which are held primarily by our executive officers and certain other members of our senior management, and the conversion rights of the holders of our Class A1 ordinary shares, which shares are held primarily by entities affiliated with certain of our directors, and Class B1 ordinary shares, all of which shares are held by entities affiliated with certain of our directors, means that such persons are, and such entities may in the future be, able to influence certain matters submitted to our shareholders for approval, which may have an adverse effect on the price of our Class A ordinary shares and may result in our Class A ordinary shares being undervalued.

The concentration of ownership of our Class B ordinary shares among our senior management, and the conversion rights of our Class A1 and B1 ordinary shares, which are held entirely by entities affiliated with certain of our directors, means that certain matters submitted to our shareholders for approval may be influenced by such persons, which may have an adverse effect on the price of our Class A ordinary shares and may result in our Class A ordinary shares being undervalued.

Each Class A ordinary share is entitled to one vote per Class A ordinary share and each Class B ordinary share is entitled to ten votes per Class B ordinary share.

Our Class A1 ordinary shares and Class B1 ordinary shares have no voting rights.

Our Class A1 ordinary shares and Class B1 ordinary shares have no

voting rights.

As a result, all matters submitted to our shareholders are decided by the vote of holders of our Class A ordinary shares and Class B ordinary shares.

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As a result of this volatility, our shareholders may not be able to sell their Class A ordinary shares at or above the price they paid for their shares.

The market price for our Class A ordinary shares may be influenced by many factors, including:

● our ability to generate revenue through the successful commercialization of our products and product candidates, if approved;

● the size of the market for our products and product candidates, if approved;

● the results of clinical trials for our product candidates or any delays in the commencement, enrollment and the ultimate completion of clinical trials;

● failures in obtaining approval of our product candidates;

● the results and potential impact of competitive products or technologies;

● our ability to manufacture and successfully produce our products and product candidates;

● actual or anticipated changes in estimates as to financial results, capitalization, development timelines or recommendations by securities analysts;

● the level of expenses related to any of our products and product candidates or clinical development programs;

● variations in our financial results or those of companies that are perceived to be similar to us;

● financing or other corporate transactions, or our inability to obtain additional funding;

● failure to meet or exceed the expectations of the investment community;

● regulatory or legal developments in the United States and other countries;

● the recruitment or departure of key personnel;

● developments or disputes concerning patent applications, issued patents or other proprietary rights;

● the results of our efforts to discover, develop, acquire or in-license additional product candidates or from our entering into collaborations or other strategic transaction agreements;

● changes in the structure of healthcare payment systems;

● market conditions in the pharmaceutical and biotechnology sectors;

● general economic, industry and market conditions, including pandemics or other outbreaks of disease and rising inflation rates;

● changes in voting control of, or sales of our shares by, our executive officers and certain other members of our senior management or entities affiliated with certain of our directors that hold our shares;

● the other factors described in this “Risk Factors” section.

The market price for our Class A ordinary shares may be influenced by many factors, as further discussed throughout this “ Risk Factors ” section.

Market conditions are often difficult to predict and there can be no assurance as to the performance of our Class A ordinary shares or that we will not experience any adverse effects that may be material to our consolidated cash flows, results of operations, financial position or our ability to access capital.

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As of December 31, 2025, approximately 2.1 million Class A ordinary shares directly held by our executive officers and directors, inclusive of Class A ordinary shares issuable upon conversion of our Class B, Class A1 and Class B1 ordinary shares, were eligible for resale in the public market to the extent permitted by the provisions of Rule 144 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), and such rule, Rule 144.

In addition, as of December 31, 2024, there were approximately 13.5 million Class A ordinary shares subject to outstanding share options and RSUs under our equity incentive plans that may become eligible for sale in the public market to the extent permitted by the provisions of applicable vesting schedules and Rule 144 and Rule 701 under the Securities Act.

In addition, as of December 31, 2025, there were approximately 12.2 million Class A ordinary shares subject to outstanding share options, PSOs, RSUs and PSUs under our equity incentive plans that may become eligible for sale in the public market to the extent permitted by the provisions of applicable vesting schedules and Rule 144 and Rule 701 under the Securities Act.

A majority of our ordinary shares are held by our executive officers and other members of our senior management team, together with entities affiliated with certain of our directors.

As of December 31, 2025, on an as-converted to Class A ordinary shares basis, these shareholders collectively held approximately 33.9 million of our Class A ordinary shares.

If any of these shareholders sell, convert or transfer, or indicate an intention to sell, convert or

transfer, a substantial amount of their ordinary shares (after certain restrictions on conversion or resale lapse), the market price of our Class A ordinary shares could decline.

If any of these shareholders sell, convert or transfer or indicate an intention to sell, convert or transfer, a substantial amount of their ordinary shares (after certain restrictions on conversion or resale lapse), the market price of our Class A ordinary shares could decline.

Pursuant to our amended and restated investor rights agreement (our “Investors Rights Agreement”), certain shareholders are entitled to certain registration rights with respect our Class A ordinary shares, including Class A ordinary shares issuable upon conversions of our Class B, Class A1 and Class B1 ordinary shares and upon the exercise of certain rights to acquire Class A ordinary shares, or collectively registerable securities, under the Securities Act.

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Risks Related to Our Jurisdiction of Incorporation and Certain Tax Risks

As a result of increased shareholder voting requirements in the United Kingdom relative to Bermuda, we will have less flexibility with respect to our ability to issue new shares.

Prior to the Redomiciliation, our principal holding company was incorporated in Bermuda.

Under Bermuda law, a company’s directors may issue, without shareholder approval, any authorized but unissued common shares.

English law allows our shareholders to authorize the allotment of share capital which can be issued by our board of directors without further shareholder approval, but this authorization must be renewed by the shareholders at least every five years and we cannot guarantee that this authorization will always be approved.

Our articles of association currently authorize, subject to the requirements of the Nasdaq Global Select Market, our board of directors to issue new ordinary or preferred shares (up to a maximum of ten percent (10%) of the issued share capital of the Company) without shareholder approval for a period of 15 months from the date of adoption of the articles of association.

Subsequent authority to issue new ordinary or preference shares can be given by the shareholders of the Company by an ordinary resolution from time to time (i.e., approval from shareholders holding more than 50% of the voting rights), with such authority capable of applying in respect of any period specified in such resolution up to a maximum of five years.

Additionally, subject to specified exceptions, including an opt-out included in our articles of association, English law grants statutory preemptive rights to existing shareholders to subscribe for new issuances of shares for cash.

As a result of increased shareholder voting requirements in the UK relative to the United States, we will have less flexibility with respect to our ability to issue new shares.

Under English law, our shareholders must authorize an allotment of share capital which can be issued by our board of directors without further shareholder approval, but this authorization must be approved by our shareholders via an ordinary resolution from time to time (i.e., approval from shareholders holding more than 50% of the voting rights), with such authority capable of applying in respect of any period specified in such resolution up to a maximum of five years.

At our annual meeting of shareholders in June 2025, our shareholders authorized us to issue new ordinary or preferred shares (up to a maximum of 35% of our outstanding shares on the record date for our 2025 annual meeting) for a period of five years from the date of such meeting.

However, there is no guarantee that any subsequent authorizations will be approved.

In the event that we do not receive such authorization, we would face significant impediments to our business and operations as we would be unable to raise capital through the issuance of equity, use equity as consideration in business development deals or honor our outstanding employee equity awards without seeking shareholder approval in each case.

Such a scenario would materially harm our business due to the administrative and financial costs related thereto.

Additionally, subject to specified exceptions, English law grants statutory preemptive rights to existing shareholders to subscribe for new issuances of shares for cash.

English law requires that this opt-out must be renewed by the shareholders at least every five years, and we cannot guarantee that the opt-out of preemptive rights will always be approved.

A waiver of pre-emption rights under English law requires approval of the shareholders holding at least 75% of the voting rights in an English company.

In the future, our plans may be impeded due to a lack of flexibility that we previously enjoyed in Bermuda, potentially materially affecting our business, financial condition and results of operations.

Our articles of association waive the statutory pre-emption rights in relation to new ordinary or preferred shares issued by the board of directors (up to a maximum of ten percent (10%) of the issued share capital of the Company) for a period of 15 months from the date of adoption of the articles of association.

At our annual meeting of shareholders in June 2025, our shareholders voted to approve such a waiver for a period of five years from the date of such meeting.

If, in the future, we do not receive such a waiver, this would cause a material adverse effect due to the administrative and financial costs related thereto, as a waiver of preemption rights would need to be sought from shareholders in respect of each new issuance of shares, including each instance that an employee would seek to exercise their share options.

While both the general authority to allot and waiver of pre-emption rights could be approved on an annual (or multi-year) basis by shareholders at the annual general meeting, it cannot be guaranteed.

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Our parent company is organized under the laws of England and Wales.

The rights of holders of our ordinary shares are governed by English law and our articles of association, and these may not provide the same rights as shares offered by American or Bermudan companies.

In addition, English law may be subject change in the future in ways that are disadvantageous to United States-based shareholders, which could adversely affect the rights of our investors.

Rights afforded to shareholders under English law differ in certain respects from the rights of shareholders in companies incorporated in the United States or Bermuda.

The rights of holders of our ordinary shares are governed by English law and our articles of association, and these may not provide the same rights as shares offered by American companies.

In addition, English law may be subject to change in the future in ways that are disadvantageous to United States-based shareholders, which could adversely affect the rights of our investors.

Rights afforded to shareholders under English law differ in certain respects from the rights of shareholders in companies incorporated in the United States.

In particular, English law currently significantly limits the circumstances in which the shareholders of English companies may bring derivative actions (i.e., legal actions brought by a shareholder on behalf of a company against a third party).

Under English law, in most cases, only Kiniksa Pharmaceuticals International, plc may be the proper plaintiff for the purposes of maintaining proceedings in respect of wrongful acts committed against it and, generally, neither an individual shareholder, nor any group of shareholders, has any right of action in such circumstances.

Under English law, in most cases, only Kiniksa International may be the proper plaintiff for the purposes of maintaining proceedings in respect of wrongful acts committed against it and, generally, neither an individual shareholder, nor any group of shareholders, has any right of action in such circumstances.

In addition, English law does not afford appraisal rights to dissenting shareholders in the form typically available to shareholders in an American company.

It also may be difficult to enforce foreign civil liabilities against us because of our country of incorporation.

See “ Risk Factors—Risks Related to our Jurisdiction of Incorporation and Certain Tax Risks—United States investors may find it difficult to enforce their civil liabilities against us.

Investors in the United States may find it difficult to enforce their civil liabilities against us.

It may be difficult for U.S.

investors to bring and/or effectively enforce suits against us outside of the United States.

It may be difficult for United States investors to bring and/or effectively enforce suits against us outside of the United States.

We are a public limited company incorporated in England and Wales.

If a judgment is obtained in the U.S.

courts based on civil liability provisions of the U.S.

federal securities laws against us or our directors or officers, it may, depending on the jurisdiction, be difficult to enforce the judgment in the non-U.S.

courts against us.

Accordingly, U.S.

shareholders may be forced to bring legal proceedings against us under English law and in the English courts in order to enforce any claims that they may have against us or our directors and officers.

The enforceability of a U.S.

judgment in the United Kingdom will depend on the particular facts of the case as well as the laws and treaties in effect at the time.

The United States and the United Kingdom do not currently have a treaty providing for reciprocal recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters.

Nevertheless, it may be difficult for U.S.

shareholders to bring an original action in the English courts to enforce liabilities based on the U.S.

federal securities laws against us.

If a judgment is obtained in the United States courts based on civil liability provisions of the United States federal securities laws against us or our directors or officers, it may, depending on the jurisdiction, be difficult to enforce the judgment in the non-United States courts against us.

Accordingly, United States shareholders may be forced to bring legal proceedings against us under English law and in the English courts in order to enforce any claims that they may have against us or our directors and officers.

The enforceability of a United States judgment in the UK will depend on the particular facts of the case as well as the laws and treaties in effect at the time.

The United States and the UK do not currently have a treaty providing for reciprocal recognition and enforcement of judgments (other than arbitration awards) in civil and commercial matters.

Nevertheless, it may be difficult for United States shareholders to bring an original action in the English courts to enforce liabilities based on the United States federal securities laws against us.

We may become subject to unanticipated tax liabilities, including liabilities arising from the reallocation of our taxable income among our subsidiaries.

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It is also possible that taxing authorities in any such jurisdictions could assert that we are subject to greater taxation than we currently anticipate.

Any such tax liability, if greater than our overall effective tax rate, could materially adversely affect our results of operations.

For example, we are currently incorporated under the laws of England and Wales and have subsidiaries in the United States, the United Kingdom, Bermuda, Germany, Switzerland and France.

Any such tax liability could materially adversely affect our results of operations.

For example, we are currently incorporated under the laws of England and Wales and have subsidiaries in the United States, the UK, Switzerland, Germany and France.

If we succeed in growing our business, we expect to conduct increased operations through our subsidiaries in various tax jurisdictions subject to transfer pricing arrangements between us and such subsidiaries.

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While we believe that we operate in compliance with applicable transfer pricing laws and intend to continue to do so, our transfer pricing procedures are not binding on applicable tax authorities.

If tax authorities in any of these countries were to successfully challenge our transfer prices as not reflecting arms’ length transactions, they could require us to adjust our transfer prices and thereby reallocate our income to reflect these revised transfer prices, which could result in a higher tax liability to us.

these revised transfer prices, which could result in a higher tax liability to us.

In addition, if the country from which the income is reallocated does not agree with the reallocation, both countries could tax the same income, resulting in double taxation.

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Changes and uncertainties in the tax system in the countries in which we have operations, could materially adversely affect our financial condition and results of operations, and reduce net returns to our shareholders.

We are unable to predict what tax reform may be proposed or enacted in the future by the United States, United Kingdom, Switzerland or the OECD or what effect such changes would have on our business and results of operations.

We are unable to predict what tax reform may be proposed or enacted in the future by the United States, UK, Switzerland or the OECD or what effect such changes would have on our business and results of operations.

Changes in tax rates, laws, practices, treaties, policies or regulations, or the change in interpretation thereof, could increase our effective tax rate or otherwise affect our financial position, results of operations and financial condition and/or increase the complexity, burden and cost of tax compliance.

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We completed an analysis of the Company’s and its subsidiaries sources of income and character of their assets for United States federal income tax purposes and determined that neither the Company nor any of its subsidiaries would be classified as a PFIC for the taxable year ending December 31, 2025.

We plan to perform an analysis to determine whether the Company or its subsidiaries are expected to be treated as PFICs for the taxable year ending December 31, 2024, and do not believe that the Company or its subsidiaries will be treated as a PFIC for the taxable year ending December 31, 2024.

However, there can be no guarantee that we, or our subsidiaries, will not be treated as a PFIC for any taxable period.

Although we believe that we were not a PFIC for 2025 and do not expect to become a PFIC in 2026, there can be no guarantee that we, or our subsidiaries, will not be treated as a PFIC for any taxable period.

In this regard, the determination of PFIC classification is not made until after the close of the year and it depends on the amount and character of our annual income and assets, which in turn can depend on the interpretation of regulations and authorities, the application of which can be unclear.

A non-United States company will generally be considered as a PFIC for any taxable year if (i) at least 75% of its gross income is passive (including interest income), or (ii) at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income.

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Even if we were not classified as a controlled foreign corporation, certain of our non-United States subsidiaries could be treated as controlled foreign corporations because our group includes one or more United States subsidiaries.

If a United States Holder is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such United States Holder may be treated as a “United States shareholder” (as such term is defined in the Code) with respect to us (if we are classified as a controlled foreign corporation) and each controlled foreign corporation in our group (if any).

If a United States Holder is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our shares, such United States Holder may be treated as a

“United States shareholder” (as such term is defined in the Code) with respect to us (if we are classified as a controlled foreign corporation) and each controlled foreign corporation in our group (if any).

A United States shareholder of a controlled foreign corporation may be required to annually report and include in its United States taxable income its pro rata share of “Subpart F income,” “global intangible low-taxed income,” and investments in United States property by such controlled foreign corporation, regardless of whether such corporation makes any distributions.

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United States Holders should consult their tax advisors regarding the potential application of these rules to any investment in our Class A ordinary shares.

We may encounter unforeseen costs following the Redomiciliation and may not realize meaningful benefits.

In June 2024, we announced the completion of the Redomiciliation pursuant to a scheme of arrangement approved by both the Bermuda Supreme Court and our shareholders.

As part of the Redomiciliation, all of the issued and outstanding shares of our former Bermuda parent company were cancelled and our then-shareholders received ordinary shares in our new United Kingdom parent company on a one-for-one basis.

We determined that Bermuda was no longer the most desirable jurisdiction for us and believed that redomiciling our principal holding company to the United Kingdom was in the best interest of our company and shareholders for a number of reasons, including its more expansive tax treaty with the United States.

However, those determinations were based on a number of key assumptions and we may not realize the benefits we hope to achieve.

If facts substantially deviate from our assumptions, causing us to not realize the benefits we hope to achieve or to encounter unforeseen costs, our business, financial condition and results of operations could be materially harmed.

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

What changed 10-K

Item 1A. Risk Factors