LB PHARMACEUTICALS INC 10-K

10-K Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31 , 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-42831 LB Pharmaceuticals Inc (Exact name of Registrant as specified in its Charter) Delaware 81-1854347 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) One Pennsylvania Plaza , Suite 1025 New York , NY 10119 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: ( 212 ) 605-0300 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $0.0001 par value LBRX The Nasdaq Stock Market LLC Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☒ Emerging growth company ☒ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The registrant was not a public company as of the last business day of its most recently completed second fiscal quarter and therefore cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates as of such date. The registrant’s Common Stock began trading on the Nasdaq Global Market on September 11, 2025. The number of shares of Registrant’s Common Stock outstanding as of March 23, 2026 was 28,674,827 . DOCUMENTS INCORPORATED BY REFERENCE Part III incorporates certain information by reference from the registrant’s proxy statement for the 2026 Annual Meeting of Shareholders. Such proxy statement will be filed no later than 120 days after the close of the registrant’s fiscal year ended December 31, 2025. Table of Contents Table of C ontents Page PART I Item 1. Business 3 Item 1A. Risk Factors 61 Item 1B. Unresolved Staff Comments 120 Item 1C. Cybersecurity 120 Item 2. Properties 121 Item 3. Legal Proceedings 122 Item 4. Mine Safety Disclosures 122 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 123 Item 6. [Reserved] 124 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 125 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 137 Item 8. Financial Statements and Supplementary Data 137 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 137 Item 9A. Controls and Procedures 137 Item 9B. Other Information 138 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 138 PART III Item 10. Directors, Executive Officers and Corporate Governance 139 Item 11. Executive Compensation 139 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 139 Item 13. Certain Relationships and Related Transactions, and Director Independence 139 Item 14. Principal Accounting Fees and Services 139 PART IV Item 15. Exhibits, Financial Statement Schedules 140 Item 16. Form 10-K Summary 143 i Table of Contents SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains express or implied forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are based on our management’s belief and assumptions and on information currently available to our management. Although we believe that the expectations reflected in these forward-looking statements are reasonable, these statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements in this Annual Report on Form 10-K include, but are not limited to, statements about: • the initiation, timing, progress, potential registrational quality, and results of our research and development programs, preclinical studies, any clinical trials, Investigational New Drug, or IND, and other regulatory submissions; • the ability of our approach to reproducibly predict treatment outcomes for LB-102 amongst identified patient populations and achieve clinical success; • the timing of and costs involved in obtaining and maintaining regulatory approval of LB-102 and any future product candidates that we may identify or develop; • the beneficial characteristics, including potential safety, efficacy, and therapeutic effects, of LB-102; • our ability to efficiently and cost-effectively conduct our current and future clinical trials, including our plan to incorporate improvements to enhance commercial scalability of our drug product manufacturing; • our ability to obtain funding for our operations necessary to complete further development and commercialization of LB-102, if approved; • our ability to maintain existing, and establish new, strategic collaborations, licensing, or other arrangements, including our ability to comply with our financial obligations pursuant to the terms of such agreements; • the timing and likelihood of the achievement of milestones pursuant to our existing collaboration and licensing agreements; • our ability to identify and develop LB-102 for treatment of additional indications; • the performance of our third-party service providers, including our suppliers and manufacturers; • the ability of our third-party manufacturers to increase the scale of its production of our product candidate, and/or increase the product yield of its manufacturing; • the rate and degree of market acceptance and clinical utility for LB-102 and any other product candidates we may develop; • the effects of competition with respect to LB-102 or any of our future product candidates, as well as innovations by current and future competitors in our industry; • our estimates regarding the potential market opportunities and the number of patients for LB-102 and any future product candidates, if approved for commercial use; • the implementation of our strategic plans for our business, LB-102, and any future product candidates we may develop; • our intellectual property position, including the scope of protection we are able to establish, maintain, defend and enforce for intellectual property rights covering LB-102 and any future product candidates we may develop; • our ability to attract and retain key scientific or management personnel; • regulatory and legal developments in the United States and foreign countries; • our ability to attract and retain employees and collaborators with development, regulatory, and commercialization expertise; 1 Table of Contents • the accuracy of our estimates regarding future expenses, future revenue, capital requirements, and need for additional financing; • the period over which we estimate our existing cash, cash equivalents and marketable securities will be sufficient to fund our future operating expenses and capital expenditure requirements; • our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act; and • other risks and uncertainties, including those listed under the caption “Risk Factors.” In some cases, forward-looking statements can be identified by terminology such as “may,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continue,” or the negative of these terms or other comparable terminology. These statements are only predictions. Investors should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from those implied or projected by forward-looking statements include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this Annual Report on Form 10-K. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. Investors should read this Annual Report on Form 10-K, the documents that we reference in this Annual Report on Form 10-K and the other documents that we file with the Securities and Exchange Commission, or SEC, with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. Investors should therefore not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Annual Report on Form 10-K. In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Annual Report on Form 10-K, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. SPECIAL NOTE REGARDING COMPANY REFERENCES Throughout this Annual Report on Form 10-K, the “Company,” “we,” “us” and “our” refer to LB Pharmaceuticals Inc. SPECIAL NOTE REGARDING TRADEMARKS All trademarks, trade names and service marks appearing in this Annual Report on Form 10-K are the property of their respective owners. 2 Table of Contents PART I It em 1. Business. Overview We are a late-stage biopharmaceutical company developing novel therapies for the treatment of a wide range of neuropsychiatric disorders including schizophrenia, bipolar depression, adjunctive treatment of major depressive disorder and other diseases. We are building a pipeline that leverages the broad therapeutic potential of our lead product candidate, LB-102, which we believe has the potential to be the first benzamide antipsychotic drug approved for neuropsychiatric disorders in the United States. LB-102 is currently in late-stage clinical development for schizophrenia and bipolar depression. We are also planning to conduct a Phase 2 clinical trial evaluating LB-102 as an adjunctive treatment in major depressive disorder, or MDD. LB-102 is a new chemical entity and a methylated derivative of amisulpride, a second-generation antipsychotic drug approved in over 50 countries, not including the United States, because the development and regulatory requirements of the U.S. Food and Drug Administration, or FDA, for amisulpride were incompatible with patent coverage on the drug. Amisulpride is a generic drug that has been extensively used in clinical practice following its initial approval in France in the 1980s, generating at least two million monthly prescriptions in 2023 in a subset of 16 continental European countries. Among these European prescriptions for amisulpride, our data suggest that approximately 60% are for schizophrenia and schizoaffective disorders, approximately 20% are for mood disorders, approximately 14% are for anxiety, and the remainder are for a variety of other indications. We designed LB-102 to address the limitations of amisulpride with the aim to create a product candidate with the potential for a differentiated therapeutic profile and strong intellectual property protection. We believe LB-102’s mechanism of action, data from our recently completed Phase 2 trial (NOVA-1) of LB-102 in acute schizophrenia, and the heritage of clinical experience with amisulpride support the continued development of LB-102 in both psychosis and mood disorders. In the future, additional expansion opportunities for LB-102 may include predominantly negative symptoms of schizophrenia, Alzheimer’s disease psychosis and agitation, as well as other neuropsychiatric diseases. We believe that LB-102, if approved, can become a mainstay of psychiatric practice by offering a potentially attractive alternative to branded and generic therapeutics for the treatment of schizophrenia, bipolar depression, adjunctive MDD and other neuropsychiatric diseases, given the compelling balance of clinical activity and tolerability observed to date. The U.S. market for branded antipsychotic drugs was approximately $12 billion as of 2024. Antipsychotics that have expanded beyond schizophrenia and into mood disorder indications have realized substantial increases in revenue. Despite the widespread use of generic antipsychotic drugs, several of these branded drugs each generate U.S. sales in excess of $1 billion annually. Additionally, while available therapeutics to treat schizophrenia, bipolar depression, and MDD demonstrate clinical benefit, a significant unmet need remains for a treatment that delivers a more favorable risk–benefit profile by balancing tolerability with rapid onset and sustained, clinically meaningful efficacy with once-daily dosing. This includes addressing persistent residual symptoms—across both psychosis and mood disorders—that continue to impair functioning despite available therapies, underscoring the opportunity for improvement in the management of these conditions. Our current pipeline is summarized below: * Subject to positive Phase 3 data. 3 Table of Contents Our Strategy Our strategy is to develop LB-102 for the treatment of schizophrenia and mood disorders initially and subsequently for other neuropsychiatric disorders in the United States and internationally. Key elements of our strategy include: • Achieve regulatory approval for LB-102 for the treatment of schizophrenia . The regulatory pathway for antipsychotic drug development in schizophrenia is well-established and provides precedent for regulatory approval requirements. Based on recent positive feedback from the FDA, our current strategy is to utilize our recently completed Phase 2 trial in acute schizophrenia as one of two adequate and well-controlled trials required for FDA approval. In this Phase 2 trial, treatment with LB-102 resulted in a statistically significant decrease in symptoms related to schizophrenia as measured by the change in total PANSS score after four weeks of treatment in all doses of LB-102 evaluated in the trial and demonstrated potential for a class leading tolerability profile among D2 antagonists and partial agonists. In this trial, treatment with LB-102 also resulted in significant improvements in negative symptoms as well as cognitive performance. These results have informed the design of our Phase 3 trial, which we initiated in March of 2026, as well as our planned open label extension trial which we expect to initiate in the second quarter of 2026. • Advance LB-102 as a potential multidimensional treatment for patients with schizophrenia. We believe LB-102 has the potential to treat a broad range of patients living with schizophrenia by addressing positive, negative, and cognitive symptom domains of the disease. In parallel with our ongoing Phase 3 trial and planned open-label extension trial for LB-102, we plan to further evaluate our clinical development strategy for other unmet needs within schizophrenia, including the potential treatment of predominantly negative symptoms of the disease as well as cognitive impairment associated with schizophrenia. 80% of people with schizophrenia have cognitive impairment of some kind, and up to 60% may experience predominantly, clinically relevant negative symptoms that require treatment. There are no approved treatments for these symptom domains of schizophrenia in the United States. Based on our own clinical results and the breadth of third-party data, we believe LB-102 has the potential to become a widely used treatment for schizophrenia. • Expand development of LB-102 into bipolar depression, adjunctive MDD and other neuropsychiatric disorders . Based on the extensive body of third-party research that has been conducted on amisulpride and a non-racemic form of the drug as well as our data with LB-102 in schizophrenia, we believe there is significant opportunity in the clinical development and commercial potential of LB-102 in mood disorders and other psychosis-related indications. We are therefore leveraging our expertise in neuropsychiatry and the unique mechanism of action of LB-102 for further development in bipolar depression and adjunctive MDD. We believe the mechanism of LB-102, preclinical and clinical data for amisulpride and a non-racemic version of amisulpride, as well as our Phase 2 clinical trial results of LB-102 in acute schizophrenia, support development of LB-102 in bipolar depression and adjunctive MDD. We believe these data also support the potential of LB-102 to benefit people living with other neuropsychiatric diseases such as predominantly negative symptoms of schizophrenia and Alzheimer’s disease psychosis and agitation. We continue to assess other mood disorders and neuropsychiatric diseases for potential future development. • Extend the life-cycle and global reach of LB-102 by advancing alternate formulations . We are investigating alternate long-acting injectable, or LAI, formulations of LB-102. We believe that such formulations have the potential to provide improved clinical results and treatment adherence for patients compared to oral formulations, for which compliance may be lower. We believe that the success of the 50 mg dose in our schizophrenia Phase 2 trial affords the opportunity to develop an LAI. Additionally, we believe that an LAI formulation of LB-102, if approved, could have additional advantages, including extending the commercial protection for LB-102, potentially providing a better alternative to the currently limited option set of approved LAI antipsychotic drugs for other neuropsychiatric disorders, such as bipolar disorder, and potentially enhancing LB-102’s competitive positioning outside of the United States. • Maximize the commercial opportunity of LB-102 . We currently own global rights to LB-102 and intend to retain commercialization rights in the United States. If approved for schizophrenia, we expect to commercialize the oral formulation of LB-102 in jurisdictions where amisulpride is unavailable as a generic, and we expect to commercialize an LAI form of LB-102 worldwide. If approved for bipolar depression, we expect to commercialize both the oral and LAI forms of LB-102 worldwide. If approved for adjunctive MDD, we expect to commercialize the oral form of LB-102 worldwide. We expect to expand our team and develop internal resources to support the potential commercialization of LB-102. Additionally, we may 4 Table of Contents opportunistically evaluate potential commercial collaborations outside of the United States to maximize the value of LB-102. Our Pipeline Programs LB-102: An Investigational Antipsychotic—and Potentially the First Benzamide Approved for Schizophrenia in the United States Schizophrenia Our lead product candidate, LB‑102, is a Phase 3 oral small molecule in development for the treatment of schizophrenia. LB-102 is designed to address the multidimensional symptom domains of schizophrenia — positive, negative, and cognitive — and has the potential to be the first benzamide approved for neuropsychiatric disorders in the United States. Our ongoing Phase 3 trial (NOVA-2) is enrolling individuals with acute schizophrenia, defined as a sudden and severe worsening of psychotic symptoms such as hallucinations, delusions, and other positive symptoms. Schizophrenia is a chronic, severe, complex, and debilitating psychiatric disorder that affects approximately 1% of the U.S. population and is a leading cause of disability. Symptoms are divided into three categories: (i) psychotic or positive symptoms, which include delusions, hallucinations, and thought disorder; (ii) negative symptoms, which include lack of motivation, interest, or enjoyment in daily activities, withdrawal from social life, and difficulty showing emotions; and (iii) cognitive symptoms, which encompass problems with attention, concentration, and memory. The disease is associated with increased mortality, with approximately 5% of schizophrenia patients dying by suicide, and average overall life expectancy decreasing by as much as 29 years compared to the general population. There is currently no cure for schizophrenia, which means the disease must be managed with life-long therapy, increasing the importance of therapies that have a good balance of safety and efficacy as well as dosing ease which can improve compliance rates. In January 2025, we announced positive data from our four-week placebo-controlled, double-blinded, Phase 2 trial in the United States, which assessed the safety and efficacy of LB-102 in patients with acute schizophrenia. Results from the trial demonstrated (i) statistically significant clinical activity at all LB-102 doses tested with sustained significant benefit versus placebo as early as the first week after starting treatment; (ii) a compelling average change in overall symptoms (effect size); (iii) a potentially class-leading tolerability profile among D 2 /D 3 antagonists and partial agonists; and (iv) a potentially differentiated impact on cognitive performance as measured by the CogState Computerized Schizophrenia Battery of Tests. The trial achieved its primary endpoint of change in the Positive and Negative Syndrome Scale, or PANSS, a 30-item scale that measures the severity of schizophrenia symptoms, from baseline to Week 4. The change in PANSS score has been used as the primary endpoint in registrational trials of antipsychotic drugs, as it provides a comparative measure against baseline; a higher change from baseline can suggest greater improvement in patient symptoms. A statistically significant decrease in symptoms was observed for all three dose cohorts (50 mg, 75 mg, and 100 mg) compared to placebo. Additionally, our Phase 2 trial data showed a statistically significant impact on negative symptoms versus placebo at the 50 mg dose even though the inclusion criteria enriched for patients experiencing predominantly positive symptoms of schizophrenia. An exploratory post-hoc analysis of our Phase 2 data on the treatment effect in patients with negative symptoms at baseline (i.e., those patients with a PANSS Negative Subscore greater than or equal to 24) yielded similar results with a statistically significant impact on negative symptoms versus placebo at the 50 mg dose. LB-102 was generally well tolerated in the clinical trial, with adverse events being mostly transient and mild to moderate in severity. If replicated in our Phase 3 trial, we believe this tolerability profile characterized by low rates of extrapyramidal symptoms, or EPS (including akathisia), minimal sedation, few gastrointestinal side effects, and no orthostasis has the potential to be class-leading among D 2 /D 3 antagonists and partial agonists. EPS (including akathisia) comprises a group of movement disorders including involuntary movements, muscle stiffness, and tremors, that, together with sedation, can be burdensome to patients and can result in discontinuation of treatments. The impact of LB-102 on cognitive performance was also evaluated as an exploratory endpoint in this trial. After four weeks of treatment with LB-102, a robust, dose-dependent, and significant treatment effect size was identified in a post-hoc analysis in the completer population for all doses of LB-102 compared with placebo. We designed our Phase 2 acute schizophrenia trial to be potentially registrational by including a large sample size (n=359), robust statistical analyses, as well as numerous sensitivity analyses. Based on positive end-of-Phase 2 feedback from the FDA, as well as historical precedent, we believe that our Phase 2 acute schizophrenia trial may serve as one of two pivotal trials required for approval of a new drug application, or NDA, in the United States. As a result, we believe there is a viable path to approval of LB-102 in the United States for the treatment of schizophrenia with a single, six-week Phase 3 trial 5 Table of Contents alongside other NDA-enabling studies. However, there is no guarantee that our Phase 2 trial will serve as one of the two pivotal trials required for FDA approval, and in such case, we may be required to conduct an additional pivotal trial in acute schizophrenia. The adequacy of our Phase 2 trial to support registration will be a matter of review by the FDA at the time of NDA submission and will depend on the totality of the data included in our submission, including the results of our planned Phase 3 trial. We initiated a six-week Phase 3 trial of LB-102 in patients with schizophrenia in March 2026. Our Phase 3 trial is designed to be a three-arm, inpatient, double-blinded, placebo-controlled, oral once-daily dose of LB-102 in patients with schizophrenia experiencing an acute worsening of psychotic symptoms, with a six-week treatment duration. We are evaluating the effects of 50 mg LB-102 or 100 mg LB-102 versus placebo in this trial, and patients are being randomized in a 1:1:1 ratio across the three arms of the trial. The sample size is expected to be approximately 460 patients, and we are conducting this trial at approximately 25 sites in the United States. The primary endpoint of the trial is change from baseline in PANSS total score at Day 42. We expect to report topline data from this Phase 3 trial in the second half of 2027 and, if positive, meet with the FDA to discuss the potential for submission of an NDA. Mood Disorders In addition to our clinical development program in schizophrenia, we plan to leverage our expertise in neuropsychiatry and the unique mechanism of action of LB-102 to develop our product candidate in other indications, starting with bipolar depression and adjunctive treatment of MDD. Most people living with bipolar depression experience dramatic shifts in mood, energy, and behavior, alternating between manic and depressive states. It is estimated that approximately 40 million people live with bipolar disorder worldwide and 2.8%, or approximately seven million Americans, experience bipolar disorder in a year. Our initial Phase 2 trial in bipolar 1 depression will explore the utility of LB-102 in controlling the depressive symptoms of the disease. We initiated this potentially registrational Phase 2 trial in bipolar 1 depression in January 2026 and expect to report topline data in the first quarter of 2028. MDD is characterized by persistent depressed mood and loss of interest. It can significantly impair how individuals feel, think, and behave, with substantial impacts on daily functioning and quality of life. It is a common and serious mood disorder and the leading cause of disability worldwide, impacting 280 million people globally and approximately 20 million people in the United States. While some patients achieve an initial or adequate response with currently available therapies, a large proportion experience clinically meaningful residual symptoms and tolerability limitations. For patients with inadequate response to therapy, a second medication is frequently added to the existing medication regimen, often targeting complementary neurochemical pathways with a goal of achieving broader and more durable symptom control. We are planning a Phase 2 trial that will evaluate LB-102 as an adjunctive therapy in MDD. We plan to initiate this trial in early 2027 and expect to report topline data in the first half of 2029. We believe LB-102’s strong and selective antagonism of the D2, D3, and 5HT7 receptors makes it well suited for treating bipolar depression, providing potential control of psychosis and mania through its effects on D2 and potential for antidepressive and pro-cognitive effects through its antagonism of 5HT7 and D3. This receptor binding profile also supports the development of LB-102 as a potential treatment for adjunctive MDD. Moreover, at low doses, LB-102 and amisulpride have selectivity for pre-synaptic autoreceptors that serves to increase dopamine signaling which is underactive in depression. We believe this mechanistic profile supports the potential for efficacy for both depressive and residual symptoms such as anhedonia and cognitive impairment, which remain key unmet needs in the treatment of both bipolar depression and MDD. Our Phase 2 trial of LB-102 in acute schizophrenia demonstrated strong antipsychotic activity and also suggests opportunities for potential differentiation in bipolar depression and adjunctive MDD given the observed tolerability profile which is characterized by low rates of EPS (including akathisia), minimal sedation, few gastrointestinal side effects, and lack of orthostasis as well as the positive impacts on negative symptoms and cognitive performance observed in the trial. Amisulpride is approved for the treatment of dysthymia, a form of persistent depression, in certain countries outside of the United States and has been shown to be as effective as certain approved agents for MDD and dysthymia. We believe that results in dysthymia and MDD provide strong scientific and clinical rationale for development of LB-102 in the treatment of mood disorders including depressive episodes associated with bipolar disorder or bipolar depression and adjunctive MDD because episodes of major depression, whether unipolar (as in MDD) or bipolar (as in bipolar depression), are typically characterized by a similar imbalance in the neurotransmitters serotonin, noradrenaline, and dopamine, regardless 6 Table of Contents of the underlying pathophysiology of the disease. There is wide use of amisulpride in mood disorders with approximately 20% of at least two million monthly prescriptions per year in a select group of European countries including Germany, France, Italy, Spain, and several others written for mood disorders. Among these approximately two million prescriptions approximately 3.4% were written for bipolar disorder and approximately16.2% were written for depression. A non-racemic form of amisulpride also showed antidepressant activity in two independent third-party, placebo-controlled bipolar depression trials with an approximately 17- to 18-point reduction in Montgomery–Åsberg Depression Rating Scale, or MADRS, from baseline observed across these studies. Our Phase 2 trial for bipolar depression and our planned Phase 2 trial in adjunctive MDD are designed to compare a fixed-flexible dose of LB-102 versus placebo. This trial design allows us to evaluate two doses of LB-102 in one arm of the trial, thereby increasing the chances for a patient to derive clinical benefit from treatment with LB-102, while retaining the advantages of a two-arm trial, which is known to mitigate the risk of a high placebo rate. Additionally, flexible dose trials typically have better signal detection than fixed dose trials for depression, as flexible dose trials lower the magnitude of symptom reduction with placebo. We believe LB-102 has the potential to provide improved tolerability and clinical activity in bipolar depression and adjunctive MDD compared to currently available treatments worldwide, which are associated with troubling adverse events and insufficient efficacy for certain symptoms, including anhedonia and cognitive deficits associated with these diseases. LAI Formulation We are also developing a long-acting injectable, or LAI, formulation of LB-102, which may improve compliance, a common issue in patients with schizophrenia and bipolar disorder. We believe an effective LAI form of LB-102 has the potential to benefit patients worldwide, as relatively few approved agents are available as long-acting formulations and there are no benzamide class LAIs currently available or in development worldwide. The American Psychiatric Association recommends injectable formulations in circumstances where doing so will improve adherence, decrease mortality, reduce hospitalization risk, and decrease treatment discontinuation rates. We have commenced LAI formulation development and expect to continue these efforts in 2026. LB-102 Background: Leveraging a Proven Mechanism with Third-Party Efficacious Data to Bolster Development for a Broad Range of Indications LB-102 is a novel, patent-protected benzamide antipsychotic drug that we designed to improve upon the clinical profile of amisulpride and address its limitations. Amisulpride is one of the most effective and commonly used antipsychotic drugs currently approved outside the United States. Amisulpride was ranked as the second most effective antipsychotic drug, after clozapine, in the 2019 Lancet meta-analysis of clinical trials on antipsychotic drugs. In this meta-analysis, amisulpride was ranked the most effective antipsychotic drug in treating positive symptoms and the third most effective in addressing negative symptoms of schizophrenia. Despite amisulpride’s efficacy and tolerability profile, it has not received regulatory approval in the United States for the treatment of any neuropsychiatric disorders, including schizophrenia, because the development and regulatory requirements of the FDA were incompatible with patent coverage on the drug. The methylation we incorporated into LB-102 was designed to improve the tolerability and efficacy profile of amisulpride by addressing its shortcomings, such as limited blood-brain barrier, or BBB, permeability and dosing frequency. Enhanced BBB permeability was expected to improve the potency of the molecule with respect to dopamine receptor binding and enable the use of lower doses compared with amisulpride. The use of lower doses was hypothesized to improve the tolerability profile. We also aimed to create a new chemical entity with strong composition of matter intellectual property protection. We believe that LB-102 addresses these design goals, and we aimed to demonstrate in our clinical trials that LB-102’s improved BBB penetration would confer benefits over amisulpride and other antipsychotic drugs, including lower dosing levels, a wider therapeutic window, improved tolerability, and once-daily dosing. Use of lower doses may also improve the feasibility of developing an LAI formulation. We also designed LB-102 to retain the distinct CNS receptor binding profile of amisulpride which we believe underlies its favorable clinical profile compared with other antipsychotics. We conducted preclinical head-to-head studies with amisulpride to assess whether the clinical development path of amisulpride may provide a risk-mitigated path for our development of LB-102. These studies compared amisulpride to LB-102 in animal models of schizophrenia demonstrated that LB-102 had equivalent or better results than similar doses of amisulpride and that LB-102 bound similarly to the dopamine D2 and D3 receptors, with a Ki (inhibition constant) of 0.82 nM compared to amisulpride’s reported Ki of 1.1 nM, and had a similar affinity for the 5-HT7 receptor with a Ki of 31 nM compared to amisulpride’s reported Ki of 44 nM. Our Phase 1 trials in healthy volunteers showed that LB-102 was generally well-tolerated, and in our Phase 1b imaging trial, we observed that LB-102 achieved a level of dopamine receptor occupancy in the brain of approximately 70% (50 mg dose) and approximately 80% (100 mg dose) under steady-state 7 Table of Contents conditions; typically, 60% to 80% dopamine receptor occupancy is the target range for efficacy in treating schizophrenia. The dopamine receptor occupancy levels seen in the imaging trial at 50 mg of LB-102 are approximately equivalent to those observed with 300 to 400 mg of amisulpride. By dosing LB-102 at a lower level, we are aiming to decrease side effects common to amisulpride and other antipsychotic drugs currently used to treat schizophrenia. We believe that fewer side effects of a drug may lead to stronger adherence, continued use of the drug, and therefore, better efficacy results and long-term control of the disease. Because each relapse of psychotic symptoms can result in a functional deterioration from which the patient does not fully recover, long-term control of the disease is a key treatment goal. While our ongoing Phase 3 trial is designed to investigate LB-102 as a treatment for people experiencing the acute phase, or positive symptoms, of schizophrenia, we believe LB-102 also has potential to address predominantly negative symptoms, an indication with significantly fewer treatment options as well as Cognitive Impairment Associated with Schizophrenia, or CIAS, an indication for which there are no approved therapies. We believe that our data with LB-102 as well as data previously generated with amisulpride support the further investigation of LB-102 in these settings and that, if positive, such data have the potential to further differentiate LB-102 from other drugs available for schizophrenia. Amisulpride demonstrated a statistically significant benefit versus placebo in three independent third-party placebo-controlled trials in patients with predominantly negative symptoms with treatment durations ranging from six weeks to six months. Additionally, our Phase 2 trial data showed a statistically significant impact on negative symptoms versus placebo at the 50 mg dose even though the inclusion criteria enriched for patients experiencing predominantly positive symptoms of schizophrenia. An exploratory post-hoc analysis of our Phase 2 data on the treatment effect in patients with negative symptoms at baseline (i.e., those patients with a PANSS Negative Subscore greater than or equal to 24) yielded similar results with a statistically significant impact on negative symptoms versus placebo at the 50 mg dose. We find these results highly encouraging and plan to explore options to advance LB-102 in this indication. For example, we have developed a synopsis for a Phase 2 trial in patients with predominantly negative symptoms of schizophrenia and expect to seek regulatory guidance on the design of this trial in 2026 to establish a clinical registration path in this setting. We also expect to generate additional negative symptoms data in our ongoing Phase 3 trial and our open label extension trial. Given the robust, dose dependent effects on cognitive performance that we observed in our Phase 2 trial, we also plan to further explore the impact of LB-102 on cognitive performance in patients with schizophrenia both clinically and pre-clinically. For example, concurrently with our Phase 3 trial in patients with acute schizophrenia, we expect to initiate an open label trial in patients with stable schizophrenia that will enroll both patients who participated in the Phase 3 trial as well as patients who did not. Although the primary objective of this trial is to collect the requisite safety data required for an NDA submission, we also expect to collect efficacy data in certain subsets of patients enrolled in this trial. Efficacy measures will include periodic assessments of cognitive performance as well as open label assessments of improvements in positive and negative symptoms, including in patients with prominent negative symptoms at enrollment in the trial. Although we do not expect data from this open label trial to lead to product label claims without additional randomized clinical trials, we believe these data have the potential to further support the differentiation of LB-102 and expect these data to provide publishable valuable insights as we consider further investigating LB-102 as a potential treatment for CIAS as well as in patients with predominantly negative symptoms of schizophrenia or treatment-resistant schizophrenia. Following the potential approval for the treatment of schizophrenia, we may also consider conducting another Phase 3 trial in schizophrenia where LB-102 is used as an adjunctive therapy. Development of LB-102: Improving Upon Amisulpride Amisulpride Overview Amisulpride is a dopamine receptor antagonist originally developed in France in the 1980s and is approved in more than 50 countries worldwide (not including the United States) for the treatment of schizophrenia and, in certain countries outside of the United States, for the treatment of dysthymia, a form of depression, and predominantly negative symptoms of schizophrenia. In 2000, Sanofi S.A., the manufacturer of Solian, the branded version of amisulpride, announced it would not pursue approval for schizophrenia in the United States because the development and regulatory requirements of the FDA were incompatible with its patent coverage on the drug. 8 Table of Contents Amisulpride in Treating Schizophrenia In multiple third-party studies comparing multiple components of clinical efficacy of antipsychotic drugs on schizophrenia, amisulpride consistently scored at or near the top. For example, a 2019 Lancet meta-analysis of clinical trials, which included over 54,000 subjects and 32 medications, found that amisulpride had the highest efficacy as measured by effect on positive symptoms and was second only to clozapine at reducing overall symptoms of schizophrenia. This analysis also found that amisulpride was 20% more effective at reducing overall symptoms of schizophrenia compared to risperidone, which is a first-line treatment for schizophrenia in the United States. A 2020 Lancet Psychiatry report of a head-to-head long-term study showed amisulpride to have greater reduction in PANSS total score from baseline compared to first-line treatments of aripiprazole and olanzapine. In addition, a 2018 systematic review and meta-analysis across 21 randomized, controlled third-party trials showed that in their analysis across these trials, amisulpride was the only antipsychotic drug that outperformed placebo in the treatment of patients who suffer from predominantly negative symptoms. In 2024, Cobenfy was approved for use in schizophrenia. A 2025 third-party study in European Neuropsychopharmacology highlighted that its overall treatment effect on symptoms was 0.56 using an approach similar to that which was used in the 2019 Lancet meta-analysis. In the table below, we have included the treatment effect of Cobenfy together with those antipsychotic drugs reviewed in the 2019 Lancet meta-analysis for comparison purposes. This table shows how amisulpride’s effect size compares with Cobenfy’s and the other approved schizophrenia drugs. Amisulpride’s effect size was greater than that of Cobenfy for the treatment of schizophrenia. EUFEST, a European clinical trial published in 2005 in which 498 first-episode schizophrenia patients were randomized to receive haloperidol, amisulpride, olanzapine, quetiapine, or ziprasidone over 12 months, evaluated the primary endpoint of all-cause discontinuation rate, which is the number of patients who stopped taking their medications for any reason. Besides olanzapine, amisulpride had the lowest all-cause discontinuation rate over 12 months out of all drugs evaluated in this head-to-head comparison, supporting a favorable tolerability profile. 9 Table of Contents Amisulpride had a low discontinuation rate in the head-to-head EUFEST trial. Amisulpride has also been shown to have a relatively low rates of EPS (11%), long-term weight gain, and cardiovascular risk compared with other second-generation antipsychotic drugs. In a 2014 head-to-head meta-analysis conducted by a third party comparing weight gain among antipsychotics, amisulpride had lower weight gain compared with other antipsychotic drugs across various outcome measures including body weight gain (in kg). The results comparing weight gain for amisulpride with that of other antipsychotics are highlighted in the chart below. FGA = first generation antipsychotics; SGA = second generation antipsychotics; st= number of studies Amisulpride had a lower weight gain compared with other antipsychotic drugs. 10 Table of Contents Additionally, in a third-party head-to-head trial completed in 2002 that compared long-term weight gain of amisulpride over six months to that of olanzapine, amisulpride weight gain exceeded that of olanzapine over the first 30 days of the study, and plateaued at approximately 1 kg, whereas weight gain with olanzapine continued to increase throughout the six-month period reaching a weight gain of approximately 5 kg, as shown in the graph below: Amisulpride had lower weight gain than olanzapine in a third-party head-to-head trial . In addition, pharmacovigilance data on amisulpride from the United Kingdom covering 16,000 patient exposure years had 8 incidences of QT prolongation with all 8 events occurring in patients concurrently taking clozapine, a drug known to prolong the QT interval. According to market research in 2024, amisulpride continues to be widely used in Europe. Among a select group of European countries including Germany, France, Italy, Spain, and several others, there were at least two million monthly prescriptions per year for amisulpride. Among these European prescriptions for amisulpride, our data suggest that approximately 60% are for schizophrenia and schizoaffective disorders (a mental health condition that includes symptoms of both schizophrenia and mood disorders), approximately 20% are for mood disorders, approximately 14% are for anxiety, and the remainder are for a variety of other indications. Amisulpride has also been studied for the treatment of predominantly negative symptoms of schizophrenia in three independent placebo-controlled trials conducted by third parties. A trial conducted in 1995 evaluated two doses of amisulpride, 100 and 300 mg per day, versus placebo for six weeks of treatment. In this trial, the two amisulpride-treated arms showed a reduction in the Scale for the Assessment of Negative Symptoms, or SANS, of approximately 39 to 45 points compared with a reduction of 22 points in the placebo arm (p = less than 0.02). P refers to “p-value,” the conventional method for determining the statistical significance of a result, which represents the probability that random chance caused the result (e.g., a p-value = 0.01 means that there is a 1% probability that the difference between the control group and the treatment group is purely due to random chance). Generally, a p-value less than 0.05 is considered statistically significant. The SANS scale is a 25-item scale that assesses negative symptoms across five domains: affective blunting, alogia, avolition-apathy, anhedonia-asociality, and attentional impairment. A trial conducted in 1999 evaluated two doses of amisulpride, 50 and 100 mg per day, versus placebo for 12 weeks of treatment. In this trial, the two amisulpride-treated arms showed a reduction in SANS of approximately 25 points compared with a reduction of 13 points in the placebo arm (p = 0.0002). A trial conducted in 1997 evaluated 100 mg per day of amisulpride versus placebo for 6 months of treatment. In this trial, the amisulpride-treated arm showed a reduction in SANS of approximately 34 points compared with a reduction of 17 points in the placebo arm (p = less than 0.0005). 11 Table of Contents Amisulpride in Treating Mood Disorders Amisulpride has been studied extensively in mood disorders. A 2002 head-to-head trial conducted by a third party found amisulpride to show similar reductions in mean MADRS scores as paroxetine (Paxil), a commonly used antidepressant and a 2001 head-to-head trial conducted by a third party found amisulpride to show higher reduction in mean MADRS scores compared to sertraline (Zoloft), a commonly used antidepressant, in treating dysthymia, as shown below: Amisulpride was demonstrated to be as effective as paroxetine and more effective than sertraline in third-party head-to-head trials . Amisulpride has also been shown to be effective versus placebo, such as in a 1999 head-to-head trial conducted by a third party in dysthymia and major depression, which showed amisulpride and another study drug each leading to a statistically significant improvement over placebo on MADRS. 12 Table of Contents Amisulpride had an approximately 4.8-point MADRS delta versus placebo in a randomized controlled third-party trial in patients with MDD . A non-racemic version of amisulpride was studied in bipolar depression. In a 2022 placebo-controlled proof-of-concept trial conducted by a third party in 341 patients across U.S., European, and Japanese clinical sites, non-racemic amisulpride demonstrated meaningful improvement over placebo on the MADRS in treating bipolar depression. Although the trial did not meet its primary endpoint, which was defined as MADRS delta versus placebo in United States and European patients, when results were analyzed for all patients across all geographies, a statistically significant benefit versus placebo in favor of non-racemic amisulpride was noted with a 3.4 to 3.7-point MADRS delta versus placebo and an approximately 18-point reduction in MADRS versus baseline in each of the two treatment arms. The mean reduction from baseline in the placebo arm in this trial was 14.3 points. Non-racemic amisulpride demonstrated anti-depressant activity in two independent placebo controlled trials . The placebo rate observed in this trial was higher than the average placebo rate from a recent set of bipolar depression trials, which was an approximately 12-point reduction in MADRS from baseline. We believe that the high placebo rate in this trial was in part a result of poor trial design and conduct. A Phase 3 trial was subsequently initiated by the third party with non-racemic amisulpride and though the trial was terminated prior to completion, results from 82 patients enrolled in the trial were reported. These results showed a 4.0 to 6.4-point MADRS delta versus placebo and an approximately 14 to 17-point reduction in MADRS versus baseline in the two treatment arms. Amisulpride and the non-racemic form studied in these two trials have been shown to be substantially similar in pre-clinical models. It is widely recognized that episodes of major depression whether unipolar (as in MDD) or bipolar (as in bipolar depression) are characterized by a similar imbalance in the neurotransmitters serotonin, noradrenaline, and dopamine, regardless of the underlying pathophysiology of the disease. Additionally, third party prescription data which we analyzed suggests that in 13 Table of Contents 2023, there were at least two million monthly prescriptions of amisulpride in a subset of 16 continental European countries with considerable use in depression (approximately 16.2% of prescriptions) and approximately 3.4% of prescriptions were written for bipolar disorder despite the absence of an approval for this indication. LB-102 is Designed to Improve Upon Amisulpride and Address its Limitations While amisulpride is a clinically effective and well-tolerated drug, it has low BBB permeability that limits the amount of drug that can reach its desired target. As reported in a 2014 third-party study of 30 psychiatric drugs tested in an in vitro assay to estimate BBB permeability, amisulpride was the least effective at crossing a model of the BBB. This low permeability is one of the main factors that lead to high dosing of amisulpride, compared to other antipsychotic drugs, to achieve clinically meaningful BBB penetration. The recommended dose of amisulpride for acute schizophrenia ranges from 400 mg to 800 mg per day, which may be increased up to 1,200 mg per day. By comparison, clinically effective doses of other antipsychotic drugs with similar affinities for dopamine receptors are often much lower (e.g., 1.5 mg of Vraylar and 4 mg of Rexulti). The high doses of amisulpride increase systemic exposure to the drug, contribute to some of its side effects, and limit its ability to be formulated into an LAI – there are currently no LAIs approved among the benzamide class of antipsychotics. Another drawback of amisulpride is that it is typically dosed twice-daily, which can lead to lower adherence relative to therapies with less frequent dosing schedules. Lower adherence can, in turn, lead to less efficacy of a drug in treating schizophrenia which can result in relapses. LB-102 for the Treatment of Schizophrenia LB-102 Overview LB‑102 is a patented small molecule with potential to be the first benzamide in the U.S. for the treatment of neuropsychiatric disorders. It was designed to optimize the therapeutic potential of selective D2/D3/5‑HT7 antagonism through improved CNS exposure, lower required doses, and once‑daily administration. While amisulpride has demonstrated strong efficacy and favorable tolerability, its clinical use has been constrained by limited blood–brain barrier penetration and the need for high systemic doses to achieve adequate receptor engagement. LB-102 incorporates a targeted structural optimization intended to enhance blood–brain barrier permeability while preserving the desired receptor selectivity that underlies the clinical benefits observed with amisulpride. Improved CNS penetration enables LB-102 to achieve effective dopamine receptor engagement at substantially lower doses than amisulpride, reducing systemic exposure and supporting a once‑daily dosing schedule with potential to improve tolerability and adherence. The following chart shows the molecular structures of amisulpride and LB‑102, illustrating the targeted structural modification incorporated into LB‑102. LB-102 is a methylated and patented derivative of amisulpride. In Vitro Receptor Binding of LB-102 In vitro binding of LB-102 to target central nervous system, or CNS, receptors was found to be similar to that of amisulpride. LB-102 bound most strongly to the dopamine D 2 and D 3 receptors, with a K i of 0.82 nM (compared to amisulpride’s reported K i of 1.1 nM), and had a similar affinity for the 5-HT7 receptor with a K i of 31 nM (compared to 14 Table of Contents amisulpride’s reported K i of 44 nM). Compared to other commonly prescribed antipsychotic drugs, both LB-102 and amisulpride have weaker binding to other off-target CNS receptors that are commonly associated with adverse side effects such as anxiety, weight gain, or metabolic syndrome such as 5HT2C. In Vivo Activity of LB-102 is Similar to Amisulpride We evaluated LB-102 in the Locomotor Activity, or LMA, rat model of hyperactivity, often used to predict clinical activity in treating positive symptoms of schizophrenia. In the LMA, rats dosed with amphetamine alone displayed hypermobility, while rats additionally dosed with antipsychotic drugs showed more normal, calmer activity. LB-102 had equivalent or better results than similar doses of amisulpride in the LMA model of hyperactivity. In our head-to-head preclinical rat model of cognition, the Novel Object Recognition model, and in a mouse model of stereotypy or excessive repetition, the Apomorphine Induced Climbing model, we observed that the effects of treatment with LB-102 were statistically indistinguishable from that of amisulpride. Brain Penetration and Dopamine Receptor Occupancy of LB-102 The ability of LB-102 to cross the BBB was estimated using a standard in vitro membrane permeability assay. In this assay, the permeability of LB-102 was approximately 200-fold greater than that of amisulpride. An in vivo head-to-head study in mice using positron emission tomography, or PET, demonstrated that at a dose of 100 mg/kg of both LB-102 and amisulpride, LB-102 had greater dopamine receptor occupancy in the brain than amisulpride, as shown below. We believe these results supported dosing LB-102 at much lower levels than amisulpride to achieve the desired effect on symptoms of schizophrenia. LB-102 reduced the binding of a dopamine receptor PET ligand in the brain by two-fold compared to amisulpride. More faint luminescence represents greater dopamine receptor occupancy. %ID/g represents the percent injected dose per gram. 15 Table of Contents Schizophrenia Overview and Disease Background Schizophrenia is a chronic, severe, complex, and debilitating psychiatric disorder that affects approximately 1% of the U.S. population and is a leading cause of disability. Symptoms of schizophrenia are typically grouped into three categories: • Psychotic or positive symptoms , such as hallucinations, delusions, thought disorder, and movement disorder; • Negative symptoms , such as loss of motivation, interest, or enjoyment in daily activities, withdrawal from social life, and difficulty in showing emotions; and • Cognitive symptoms , such as problems in attention, concentration, and memory. While antipsychotic drugs are commonly used to treat schizophrenia, there is currently no cure for schizophrenia, which means the disease must be managed with life-long therapy, increasing the importance of therapies that can improve compliance rates and dosing challenges. Schizophrenia is typically diagnosed in the late teen years to early thirties and tends to emerge earlier in males than in females. The estimated average potential life expectancy for individuals living with schizophrenia in the United States is reduced by as much as 29 years in comparison to the general population. This significant reduction is believed to be due to multiple factors, including a high rate of other comorbidities and an increased risk of accidental death and suicide. An estimated 5% of people with acute schizophrenia die by suicide, which is a rate approximately 350 times higher than the general population. The progression of schizophrenia usually follows a typical pattern. The prodromal phase refers to the early stage of the disease where subtle changes in behavior and cognitive function occur but before psychotic symptoms, such as hallucinations or delusions. This is the stage when the first warning signs of the disease can be identified. The prodromal phase ends when the patient experiences the first active phase which is characterized by positive symptoms, including hallucination, delusions, and disordered thinking. Recent studies have shown that if treated properly early in the course of their illness, most patients recover from this first episode and have a substantial reduction, or even remission of psychotic symptoms. While in this “stable” phase after recovery from an acute episode, it is estimated that 13% to 48% of patients continue to have residual symptoms. At this point, the patient may experience cycles of active disease, characterized by positive symptoms, and periods of stability, potentially with persistent negative symptoms. A meta-study showed that 55% of people with schizophrenia required hospitalization over an average follow-up of seven years after their first episode. With each relapse, the disease worsens, and the patient typically is unable to recover to the same level of health as prior to the active episode. Over years of experiencing these cycles, most patients deteriorate, experiencing worsening symptoms and health outcomes. A therapy that reduces the number of relapses a patient experiences has the potential to provide a significant and life-long benefit. The figure below depicts a graphic illustration of these phases. 16 Table of Contents Pathophysiology of Schizophrenia One of the main hypotheses for the pathophysiology leading to schizophrenia is an imbalance in neurochemical signaling in the brain, including serotonin, dopamine, and glutamate. Specifically, schizophrenia is associated with an imbalance of dopaminergic pathways at the D 2 receptor subtype. Increased dopamine activity in certain parts of the brain can contribute to positive symptoms of schizophrenia. In contrast, reduced dopamine activity in other parts of the brain may cause negative and cognitive symptoms. Detailed understanding of the specific changes in dopamine signaling that lead to schizophrenia is limited by the relative inaccessibility of methods to assess signaling pathways in the brain, the heterogeneity of psychological responses, and the lack of highly translatable animal models. Since the 1970s, clinical trials with haloperidol, risperidone, and olanzapine, among others, have conclusively demonstrated that antagonism of the dopamine D 2 receptor can improve symptoms of schizophrenia. Schizophrenia with Predominantly Negative Symptoms Negative symptoms are a core component of schizophrenia and are distinct from positive symptoms. They account for a large part of the long-term morbidity and poor functional outcomes. It is estimated that up to 60% of people with schizophrenia may have predominantly negative symptoms that are clinically relevant and require treatment equating to approximately 1.3 million people in the United States. In a meta-analysis for 20 placebo-controlled trials of second-generation antipsychotic drugs, 62% of patients were experiencing predominantly negative symptoms and after six weeks of treatment. Negative symptoms are linked to worse functional outcomes in occupational and academic performance, household integration, social functioning, participation in activities and quality of life. People living with negative symptoms of schizophrenia are considered to have a higher burden of illness, which may be partially attributed to the limited number of effective treatment options for this population. To date, there are no FDA approved treatments for predominantly negative symptoms of schizophrenia. Cognitive Impairment Associated with Schizophrenia, or CIAS CIAS, which encompass problems with attention, concentration, and memory, is a major burden for patients and negatively impacts many aspects of a patient’s life. Cognitive impairment is a core feature and leading cause of functional disability in schizophrenia and other neuropsychiatric disorders. Antipsychotic drugs are the standard-of-care treatment for schizophrenia but typically only address positive symptoms. So far there are no approved pharmacotherapies for the treatment of CIAS. More than 80% of people with schizophrenia have cognitive symptoms of some kind, equating to approximately 1.8 million patients in the United States. Limitations of Current Treatments for Schizophrenia Antipsychotic drugs are commonly classified as first-or second-generation drugs. First-generation antipsychotic drugs function primarily as antagonists or partial agonists of dopamine receptors. These drugs, some of which were discovered in the 1950s, primarily address positive symptoms of schizophrenia. Current literature suggests a high correlation between dopamine receptor binding and clinical potency; typically, 60% to 80% dopamine receptor occupancy is the target range for efficacy in treating schizophrenia. Second-generation antipsychotic drugs are typically dual serotonin and dopamine antagonists. The multimodal mechanism of action of these drugs allows them to treat symptoms of schizophrenia with a lower incidence of EPS. More recently, additional mechanisms have entered clinical practice, including M1/M4 muscarinic agonists, representing a mechanistically different approach. However, their clinical role will depend on real-world experience with tolerability, durability of effect, ease of switching and simplicity of dosing. Existing antipsychotic drugs fall short of the ideal profile, as most currently approved medications have significant side effects, primarily address positive symptoms of schizophrenia, and are often not effective in treating negative and cognitive symptoms. Negative symptoms are a core component of the disease, and it is estimated that up to 60% of patients may experience clinically relevant negative symptoms that require treatment. Negative symptom severity has been linked to worse functional outcomes in areas such as impaired occupational and academic performance, social functioning, and quality of life. Despite the prevalence and seriousness of this component of schizophrenia, there are few treatment options that effectively address negative symptoms. Additionally, cognitive impairment affects approximately 80% of schizophrenia patients. There are currently no approved drugs for cognitive impairment. 17 Table of Contents Both first- and second-generation antipsychotic drugs are often associated with sedation leading to cognitive dulling, dry mouth, constipation, EPS including akathisia (inability to remain still), and sexual dysfunction. Some side effects are severe or even life-threatening, such as dystonia, a form of EPS (involuntary muscular contraction), tardive dyskinesia (movement disorder that causes involuntary facial tics), and weight gain, which can lead to hyperlipidemia (high levels of lipids in the blood) and cardiac arrhythmias (abnormal heart rhythms). The combination of side effect profile, as well as poor efficacy and tolerability, results in approximately half of all schizophrenia patients not adequately responding to current antipsychotic drugs. High rates of failure in achieving a clinically meaningful response with existing therapeutics, the evolution of patient symptoms over time, inconvenient dosing regimens and significant side effects cause patients with schizophrenia to switch medications or layer on additional antipsychotic drugs frequently. Aside from suboptimal efficacy and tolerability, some current therapies also accompany inconvenient administration profiles, such as twice-a-day dosing or the need to be taken with food. Together, these limitations lead to significant issues with patient adherence. One study showed that one-third of patients admitted to the hospital after their first psychotic episode of schizophrenia were non-adherent to their treatment six months after discharge. A multitude of studies have shown the serious outcomes that accompany non-adherence to medication, including impairment, hospitalization, higher risk of suicide, longer time to remission, poorer prognosis, loss of job, dangerous behavior, arrest, violence, drug and alcohol consumption, psychiatric emergences, poor mental performance, and low satisfaction with life. Interruptions in treatment as short as one to 10 days has been associated with an increased risk of hospitalization. Nearly 50% of all schizophrenia patients fail to respond adequately to existing therapies, many of which have limited efficacy against the range of symptoms associated with the disease. Most antipsychotic drugs are associated with significant side effects that drive high rates of treatment discontinuation. Approximately 74% of schizophrenia patients discontinue their medications within 18 months of starting treatment due to their perceived lack of efficacy or burdensome side effects. Since these medications only treat symptoms of schizophrenia and cannot eliminate the underlying pathology, their discontinuation results in symptom recurrence. As a result of these high rates of discontinuation, there is a significant amount of switching therapeutic treatments. Taken together, the limitations of currently available antipsychotic therapies highlight the need for new treatment options capable of delivering rapid and sustained symptom control while improving long‑term tolerability, adherence, and real‑world effectiveness. Beyond managing positive symptoms, there remains a substantial unmet need for therapies that can meaningfully address the negative and cognitive symptoms that are highly prevalent in schizophrenia and strongly associated with functional disability and reduced quality of life. In the table below, we show the efficacy and side effect profiles of branded antipsychotic drugs approved for treatment of schizophrenia in the United States based on the approved labels. Drug Mechanism of Action Baseline PANSS Reduction in PANSS vs. Baseline Placebo-Corrected Reduction in PANSS Notable Lab Findings and Side Effects Recommended Dosage Dosing Frequency Caplyta Dopamine Receptor Antagonist 88.1 (Trial 1) 90.0 (Trial 2) 13.2 (Trial 1) 14.5 (Trial 2) 5.8 (Trial 1) 4.2 (Trial 2) Sedation (24%), dry mouth (6%); EPS (6.7%) 42 mg Once-daily Cobenfy M1/M4 Muscarinic Receptor Agonist 98.2 (Trial 1) 96.9 (Trial 2) 21.2 (Trial 1) 20.6 (Trial 2) 9.6 (Trial 1) 8.4 (Trial 2) Nausea (19%), dyspepsia (18%), constipation (17%), vomiting (15%), hypertension (11%), EPS (non-akathisia, 2%) Up to 125 mg/30 mg Twice-daily, 1 hour before or at least 2 hours after meals Rexulti Dopamine Receptor Partial Agonist 94.7 (Trial 1) 95.0 (Trial 2) 19.7 (Trial 1) 20.0 (Trial 2) 7.6 (Trial 1) 6.5 (Trial 2) Akathisia (6%), weight increase (4%), diarrhea (3%), dyspepsia (3%), tremor (3%), blood creatinine phosphokinase increase (2%); sedation (2%) 4 mg Once-daily 18 Table of Contents Drug Mechanism of Action Baseline PANSS Reduction in PANSS vs. Baseline Placebo-Corrected Reduction in PANSS Notable Lab Findings and Side Effects Recommended Dosage Dosing Frequency Vraylar Dopamine Receptor Partial Agonist 97.1 – 96.7 (Trial 1) 96.1 – 95.7 (Trial 2) 96.3 (Trial 3) 19.4 – 22.3 (Trial 1) 20.2 – 23.0 (Trial 2) 22.8 – 25.9 (Trial 3) 7.6 – 10.4 (Trial 1) 6.0 – 8.8 (Trial 2) 6.8 – 9.9 (Trial 3) EPS (15-19%)*, akathisia (9-13%) 1.5 - 6 mg Once-daily Note: Characteristics of antipsychotic drugs approved for the treatment of schizophrenia. PANSS is a measure of symptoms in schizophrenia patients including positive and negative symptoms, and general psychopathology, and reduction in PANSS v. baseline is a measure of efficacy of antipsychotic drugs. The change in PANSS score has been used as the primary endpoint in registrational trials of antipsychotic drugs, as it provides a comparative measure against baseline; a higher change from baseline can suggest greater improvement in patient symptoms. As this assessment requires patients or raters to undertake a questionnaire regarding symptoms at protocol specified timepoints in the trial, it is, however, inherently subjective, which can increase the variability of clinical results across clinical trials and creates a significant degree of uncertainty in determining overall clinical benefit. Caplyta efficacy data is based on four-week data from one Phase 2 trial and one Phase 3 trial (n=335; n=450). Cobenfy data is based on five-week data from two Phase 3 trials (n=236; n=234). Rexulti data is based on six-week data from two Phase 3 trials (n=674 total). Vraylar data is based on six-week data from three Phase 3 trials (n=1,655 total). Akathisia is a form of EPS but is reported separately in a number of product labels. Because of the fragility of the patient population and high rates of non-adherence, tolerability and ease of use is an important factor for schizophrenia medications. Studies have shown that medication-related obesity, distress related to weight gain, and cognitive impairment are associated with increased rates of non-adherence. Caplyta, Rexulti and Vraylar all contain warnings in their labels regarding metabolic changes, including weight gain. Somnolence, or sedation, are among the most frequent adverse events observed with Caplyta. Despite the burdensome side effects associated with these antipsychotic drugs, they are still commonly used, with patients frequently switching between different medications in search of the right balance of tolerability and efficacy. We believe a medication with an improved tolerability profile, rapid onset and sustained efficacy, including with respect to negative symptoms or cognition, or both, have the potential to provide a much-needed alternative to currently available therapies. We also believe a simple administration profile, once-daily dosing with no food effect, would provide a significant advantage as it has the potential to improve patient adherence and, therefore, improve long-term outcomes. Additionally, an LAI has the potential to further simplify the patient experience and improve medication adherence. Currently, there are no LAIs available for Caplyta, Cobenfy, Rexulti or Vraylar although several are in development. In addition, there are no LAIs among the benzamide class of antipsychotic drugs currently available or in development worldwide. Despite the availability of several generic and branded treatments for schizophrenia, there remains a significant unmet need. Only 20% of people with schizophrenia report favorable treatment outcomes. The remaining population experiences numerous psychotic episodes, chronic symptoms and a poor response to antipsychotic drugs. Additionally, patients who experience predominantly negative symptoms and those with treatment-resistant schizophrenia live with a significant disease burden that cannot be sufficiently alleviated with currently available treatments. There are no approved therapies in the U.S. for the treatment of predominantly negative symptoms of schizophrenia or cognitive impairment associated with schizophrenia. We believe a treatment that is effective, tolerable, supports adherence in a fragile population and can address negative and residual symptoms could become a mainstay of schizophrenia treatment. We believe LB-102 has the potential to meet this profile. LB-102 Clinical Data Completed Phase 1 Trial of LB-102 in Healthy Volunteers We conducted a Phase 1, randomized, placebo-controlled, double-blinded clinical trial in the United States to evaluate the safety, tolerability, and pharmacokinetics of oral administration of LB-102 in 64 healthy volunteers after submitting an IND in October 2019 and receiving approval to proceed in December 2019. In the single ascending dose, or SAD, portion 19 Table of Contents of this trial, cohorts of six volunteers received doses ranging from 10 mg up to 200 mg. In the multiple ascending dose, or MAD, portion of this trial, cohorts of six volunteers received doses of 50 mg to 100 mg twice-daily for one week. In total, 48 volunteers were dosed with LB-102. In September 2020, we announced the clinical results of this Phase 1 trial. The half-life of LB-102 was slightly greater than 12 hours, and maximum drug levels were observed approximately three hours after administration. We observed the plasma exposure of 50 mg of LB-102 to be 1,648 ng*h/mL. In a previous third-party study of amisulpride, plasma exposure was reported at 667 ng*h/mL. The chart below shows the pharmacokinetic profile of LB-102 in healthy volunteers from the SAD portion of this trial. Pharmacokinetics of LB-102 in healthy volunteers. Analyses of the MAD portion of the trial demonstrated that peak-trough concentrations of LB-102 plateaued before dosing on Day 4. LB-102 accumulated moderately after multiple doses but less than what has been reported for amisulpride. Exposure to LB-102 increased in a dose-proportional manner. In this Phase 1 trial, LB-102 was generally well-tolerated. All treatment emergent adverse effects, or TEAEs, were either mild or moderate. TEAEs included events typically associated with dopamine antagonists. At doses higher than those studied in our Phase 2 trial and higher than those which we are evaluating in our Phase 3 trial, moderate dystonia and QT prolongation, which is a measure of delayed repolarization of the Q and the T waves in electrocardiogram, were observed. Consistent with other antipsychotic drugs that act as dopamine antagonists, use of LB-102 resulted in elevated serum prolactin levels. Subjects with moderate dystonia were treated with either Benadryl or Cogentin. At 50 mg and 100 mg QD, two of the doses evaluated in our Phase 2 trial (and the doses being evaluated in our Phase 3 trial) we observed no adverse events associated with QT prolongation, sedation, weight gain or EPS in our Phase 1 trial. Prolactin elevation, a common laboratory finding of most antipsychotic drugs that act as dopamine antagonists that is believed to be the result of inhibition of dopamine receptors in the pituitary, was observed at all those doses. 20 Table of Contents QT prolongation refers to the lengthening of the QT interval in an electrocardiogram, during which interval, the heart recovers from one heartbeat and is preparing for the next heartbeat. The QT interval is a vulnerable phase in the electric cycle of the heart, and prolongation of this interval may lead to serious side effects. Amisulpride has been associated with QT prolongation. Although the mechanism linking amisulpride to this adverse event is not known, amisulpride is a weak inhibitor of human ether-a-go-go-related gene (hERG) potassium channels, and it has been shown that QT prolongation is dependent on amisulpride systemic exposure. At therapeutic doses of amisulpride up to 1,200 mg/day, literature reports of cardiac toxicity due to QT prolongation are extremely rare. Completed Phase 1b PET Imaging Trial We conducted a Phase 1b dopamine receptor occupancy trial of LB-102 in the United States using PET imaging to assess dopamine receptor occupancy in the brains of healthy volunteers. In this trial, the ability of LB-102 to bind to dopamine receptors was measured directly by displacement of the dopamine receptor PET ligand 11 C-raclopride. This trial enrolled four cohorts of healthy volunteers dosing from 50 mg to 100 mg per day. The first three cohorts in this trial received a single dose of LB-102; in the fourth cohort, volunteers were dosed once-daily for four days. Of the four healthy volunteers in the fourth cohort, two received one daily dose of 50 mg, and two received one daily dose of 100 mg, each over four days. We announced data from our Phase 1b trial in December 2021. We observed that single doses of LB-102 led to a linear, dose-dependent dopamine receptor occupancy that achieved maximal levels at approximately eight hours post-dose and persisted for at least 24 hours, as shown in the figure below. Based on results from our 50 mg single-dose cohort, we measured dopamine receptor occupancy at 48 hours for the 75 mg single-dose cohort. These results and the previously observed plasma half-life of approximately 12 hours supported our decision to develop LB-102 for once-daily dosing. For cohorts one, two, and three, single doses of LB-102 led to dose-dependent dopamine receptor occupancy. We evaluated dopamine receptor occupancy under steady-state conditions in our fourth dose cohort. We observed that the receptor occupancy following the Day 4 dose was relatively consistent over 24 hours in all four volunteers. Under steady-state conditions, at the 50 mg dose of LB-102, the average receptor occupancy was approximately 70%, and at the 100 mg dose, it was approximately 80%. Previous reports analyzing receptor occupancy of multiple antipsychotic drugs have found that occupancies of 60% to 80% correlate with maximum efficacy and tolerability in the treatment of schizophrenia. Receptor occupancy above 80% can be associated with an increased risk of EPS. The following chart depicts the dopamine receptor occupancy in the fourth cohort of our Phase 1b trial. 21 Table of Contents Dopamine receptor occupancy following repeat dosing of LB-102. S1 and S2 indicate Subject #1 and Subject #2, respectively. Dopamine receptor occupancy persisted over 24 hours after the final dose of LB-102 was administered under steady-state conditions and yielded a consistent engagement of dopamine receptors not always observed in other antipsychotic drugs. Completed Phase 2 NOVA-1 Trial of LB-102 in Acute Schizophrenia Clinical Trial Design Based on the positive results of our Phase 1 trial, we conducted a four-week in-patient, double-blind, randomized, placebo-controlled Phase 2 trial of LB-102 in acute schizophrenia patients and total PANSS scores between 80 and 120, who have shown good response to previous antipsychotic drugs other than clozapine in the prior 12 months. The Phase 2 trial enrolled 359 participants at 25 clinical trial sites in the United States, who were randomized 3:3:1:3 across four cohorts, three doses of LB-102 and placebo (n=108). Prior to initiating dosing, patients underwent a seven-day wash-out period, a length of time that an enrolled patient may not receive any treatment before they begin the trial. Because we were able to achieve 70% receptor occupancy under steady-state conditions with a once-daily dose of 50 mg of LB-102, we chose to advance this as the lowest dose in our Phase 2 trial (n=107 participants) while exploring the potential of higher doses at 75 mg (n=108 participants) and 100 mg (n=36 participants). Based on previous results, we believed that there was a potential for the 100 mg dose to result in receptor occupancy above 80%. As a result, we chose to limit the number of participants enrolled at this dose level while maintaining enough patients to provide insight into the therapeutic potential of this dose. Participants in each cohort received once-daily doses for four weeks. All patients started at the planned dose level without titration. The primary endpoint of this trial was efficacy of the 50 mg and 75 mg doses of LB-102 compared to the placebo, as measured by change from baseline in PANSS total score at four weeks. The secondary endpoints included change from baseline in the Clinical Global Impression-Severity, or CGI-S (which measures the severity of schizophrenia) as measured by clinicians, and change from baseline on the PANSS subscale and Marder factor scores at four weeks. The 100 mg dose cohort was exploratory and was intended to characterize safety at the higher dose. However, we analyzed the 100 mg cohort with the same statistical rigor, including sensitivity analyses, applied to the 50 and 75 mg cohorts. We also evaluated the safety and pharmacodynamics of LB-102. 22 Table of Contents The following depicts our Phase 2 NOVA-1 trial design: The topline results from the trial were announced in January 2025. Based on the design of this clinical trial, the results discussed below, and positive feedback from FDA as part of our end-of-Phase 2 interaction, we believe this Phase 2 trial may serve as one of two adequate well-controlled clinical trials of LB-102 required for approval. In addition to our 6-week Phase 3 trial, the design of which we shared with the FDA as part of our end-of-Phase 2 interaction, we anticipate the FDA will require 1,500 patient exposures to support an approval in schizophrenia. We expect to accrue these patient exposures through the Phase 3 and long-term OLE trials, the supportive Phase 1 trials and trials in other indications. Demographics and Patient Characteristics Of the 359 participants enrolled in our Phase 2 trial, 81% (n=290) were male and the average age was 39.1 years. Participants were diagnosed with schizophrenia a minimum of two years prior to enrollment in the trial with an average time since diagnosis of 15.8 years. The baseline PANSS scores were balanced across all four cohorts with mean measurements of 93.8, 93.9, 93.6 and 93.9 for the placebo, 50 mg, 75 mg and 100 mg cohorts, respectively. Patients with schizophrenia during an acute symptomatic episode is measured as 80 to 120 on the PANSS scale. If a patient drops below 80, they are no longer considered to be in the acute phase of the disease. There were several psychiatric and neurological disorders diagnosed in greater than 5% of the participant population prior to the trial including insomnia (74.1%), anxiety (58.8%), depression (32.9%), agitation (30.1%), and headache (40.1%). We also used the CGI-S total score to measure the severity of schizophrenia in participants at baseline and weekly for the four weeks of the trial. Using the CGI-S, the investigator rated the participants’ severity of illness, including behavior, symptoms, and function, over the past week on a scale of one to seven, with seven being the most severe. All participants were categorized at least as moderately ill, or a 4 on the CGI-S scale, with the majority of participants (range of 61.1% to 70.4% across the four cohorts) categorized as being markedly ill, or a 5 on the CGI-S scale, at baseline. CGI-S Scores at baseline. 23 Table of Contents Efficacy Results Primary Endpoint The clinical trial achieved the primary endpoint of change from baseline in PANSS total score at four weeks. The least squares mean change from baseline at Week 4 was a 14.3-point decrease and 14.0-point decrease in PANSS score for the 50 mg and 75 mg cohorts, respectively. The exploratory 100 mg cohort showed a 16.1-point decrease in PANSS total score at Week 4. The placebo cohort had a 9.3-point decrease in PANSS total score. We included a number of measures in this Phase 2 trial to reduce the risk of an elevated placebo rate including consistent, frequent, and close engagement with clinical sites, the use of a third-party vendor to help identify and exclude professional patients from the trial, and a centralized review of PANSS ratings to ensure consistency and quality control throughout the trial. When adjusted for placebo-response, the 50 mg cohort achieved a five-point decrease (p=0.0009) and the 75 mg cohort achieved a 4.7-point decrease (p=0.0022) in PANSS total score. Despite the highest dose cohort being exploratory and not sized to detect a statistically significant difference, the 100 mg cohort demonstrated a 6.8-point decrease (nominal p=0.0017) in PANSS total score when adjusted for placebo, which did achieve statistical significance. Least square (LS) mean change from baseline in PANSS total score. The decrease in PANSS total score was observed as early as the first measurement on Day 8 with improvement seen through Week 4 across all three dose cohorts. Improvements in PANSS were statistically significant versus placebo at each timepoint measured throughout the study for all doses of LB-102. 24 Table of Contents Change in PANSS total score from baseline over time. At Week 4, the 50 mg, 75 mg, and 100 mg groups showed effect sizes of 0.61, 0.41, and 0.83, respectively, as highlighted in the table below. Effect size is calculated by taking the difference in average observed PANSS change among completers between two groups (an active treatment arm and placebo) and dividing it by a single measure of variability that combines both groups’ spreads—also called the observed pooled standard deviation. The observed pooled standard deviation averages how much individual patients’ score changes scatter around their group’s mean. Clinicians value effect size because it conveys not just how large the average PANSS improvement is, but also how consistently patients respond. Even if two treatments reduce PANSS by the same amount on average, the one with less scatter (i.e., a lower observed pooled standard deviation) will have a higher effect size—and gives a clinician more confidence that a higher proportion of patients will see that same benefit. Dose of LB-102 Effect Size versus Placebo 50 mg 0.61 75 mg 0.41 100 mg 0.83 Effect Size versus Placebo in our Phase 2 trial. We also calculated effect size versus placebo based on all patients with at least one post-baseline PANSS assessment combining both observed and imputed data and yielding effect sizes of 0.50 at 50 mg, 0.45 at 75 mg, and 0.64 at 100 mg. Secondary Endpoints Within this trial, responders were defined as those who had a 20% or greater reduction in PANSS score at Week 4 (floor-adjusted). The three dose cohorts achieved a responder rate of 57.1% (p=0.0257), 53.6% (p=0.0213), and 78.3% (p=0.0014) for the 50 mg, 75 mg, and 100 mg dose cohorts, respectively, compared to a responder rate of 38.7% for the placebo cohort. We also assessed response to treatment with LB-102 using PANSS subscales for positive and negative symptoms, respectively. Looking specifically at positive symptom response, we observed a 4.8-point decrease (p=0.0051), 4.9-point decrease (p=0.0039), and 5.3-point decrease (p=0.0120) in the PANSS positive subscale for the 50 mg, 75 mg, and 100 mg dose cohorts, respectively, compared to a 3.1-point decrease in the placebo cohort. When looking at the negative symptom PANSS subscale, we observed a 2.2-point decrease (p=0.0116), 1.7-point decrease (p=0.1633), and 1.8-point decrease (p=0.2632) in the 50 mg, 75 mg, and 100 mg dose cohorts, respectively, compared to a 1.1-point decrease in the placebo cohort. 25 Table of Contents LS Mean change in PANSS total score from baseline to Week 4 in positive subscale. LS Mean change in PANSS score from baseline to Week 4 in negative subscale. We also conducted an exploratory post-hoc analysis of our Phase 2 data on the treatment effect in patients with negative symptoms at baseline (i.e., those patients with a PANSS Negative Subscore greater than or equal to 24). In patients with negative symptoms at baseline, the LS Mean change in negative symptom scores at Week 4 was -1.6 (placebo), -3.4 (50 mg, Δ -1.7, p=0.0045 versus placebo; effect size=0.67), -2.6 (75 mg, Δ -1.00, p=0.1501, effect size=0.34), and -3.3 (100 mg, Δ -1.70, p=0.0658, effect size=0.60). Across all analyses, the effect on negative symptoms was seen at the first measurement at week 1 and continued through Week 4. Using the CGI-S scale, participants in all three dose cohorts demonstrated an improvement in total scores from baseline to Week 4. We observed a 0.72-point decrease (p=0.0008), 0.67-point decrease (0.0048), and 0.84-point decrease (0.0026) in the 50 mg, 75 mg, and 100 mg dose cohorts, respectively, compared to a 0.39-point decrease in the placebo cohort. With these changes, the majority of participants shifted from markedly ill (CGI-S of 5) at baseline to moderately ill (CGI-S of 4, range of 45.8% to 65.2% of participants across all three dose cohorts) or mildly ill (CGI-S of 3, range of 17.4% to 25.3% of participants across all three dose cohorts). A small number of participants (0% to 2.2% across all three dose cohorts) achieved a CGI-S score of 2, which is considered borderline mentally ill. 26 Table of Contents LS mean change in CGI-S total score from baseline to Week 4. Shift in CGI-S Score from baseline (shadowed colors) to Week 4 (solid colors). We also evaluated the PANSS Marder factor, a way to analyze the PANSS data to identify responses in different dimensions of schizophrenia, including positive symptoms, disorganized thought, uncontrolled hostility/excitement, negative symptoms and anxiety/depression. PANSS Marder is a way to group the 30 individual items of the PANSS into five broader categories or dimensions. This factor structure is widely used in clinical trials and research to assess and analyze symptoms of schizophrenia. Statistically significant reductions were seen from baseline to Week 4 for all three dose cohorts for positive symptoms, disorganized thought and uncontrolled hostility/excitement. Numerical reductions, which did not reach statistical significance, were observed from baseline to Week 4 for all three dose cohorts for negative symptoms and anxiety/depression. These findings are depicted below: 27 Table of Contents Change in PANSS Scores from baseline to Week 4 for each of the five Marder factors; * P<0.05, ** P<0.01 versus placebo. Safety and Tolerability Results In the Phase 2 trial, LB-102 was generally well tolerated. Safety was assessed through TEAEs, and EPS was assessed through TEAEs as well as the Simpson-Angus Scale, or SAS, the Barnes Akathisia Rating Scale, or BARS, and the Abnormal Involuntary Movement Scale, or AIMS. The majority of TEAEs were mostly transient and mild to moderate in severity. TEAEs were defined as any adverse event that began on or after the first dose of trial medication, or any pre-existing condition that reappeared during the treatment period and up to 14 days following the last dose. TEAEs were reported in 56% (placebo), 69% (50 mg), 57% (75 mg), and 75% (100 mg) of participants. The most commonly reported TEAEs were psychiatric neurological conditions that many participants were experiencing at the time of enrollment. Weight increase was the only TEAE to occur in at least 5% of the total population and at a rate at least twice that observed with placebo (LB-102 50 mg at 12.1%; LB-102 75 mg at 7.4%; LB-102 100 mg at 8.3%; placebo at 3.7%). This TEAE includes any weight increase without a threshold. Over the course of the trial, we observed approximately 1.6 kg placebo-adjusted weight gain on a last observation carried forward basis. Despite the weight gain observed in the four-week trial, no clinically meaningful signal in metabolic parameters such as cholesterol, LDL, HDL, triglycerides or fasting glucose were observed. The discontinuation rate reached approximately 18% during the treatment period (four weeks) and approximately 27% when taking into account up to 14 days following the last dose. The most common comorbid medical conditions at baseline were insomnia (74.1%), anxiety (58.8%), headache (40.1%), depression (32.9%), and agitation (30.1%). Comorbid conditions at study entry enriched the reporting of TEAEs in our trial. Because TEAEs were defined as any adverse event that began on or after the first dose of trial medication, or any pre-existing condition that reappeared during the treatment period and up to 14 days following the last dose, the rates of certain AEs, such as insomnia, appear elevated in both placebo and LB-102 patients. Change from baseline to Week 4 in SAS, AIMS, and BARS demonstrated no difference between treatment arms and placebo and there were no reports of orthostasis among patients treated with LB-102 in the trial. The following table summarizes the adverse events from the trial: Adverse Events 50 mg (N=107) 75 mg (N=108) 100 mg (N=36) Placebo (N=108) Insomnia 27 (25.2%) 23 (21.3%) 14 (38.9%) 24 (22.2%) Headache 12 (11.2%) 9 (8.3%) 2 (5.6%) 10 (9.3%) Anxiety 10 (9.3%) 9 (8.3%) 4 (11.1%) 9 (8.3%) Agitation 11 (10.3%) 6 (5.6%) 4 (11.1%) 10 (9.3%) Weight increase 13 (12.1%) 8 (7.4%) 3 (8.3%) 4 (3.7%) Hyperprolactinemia 11 (10.3%) 8 (7.4%) 6 (16.7%) 0 Blood creatine phosphokinase increased 4 (3.7%) 1 (0.9%) 2 (5.6%) 3 (2.8%) Alanine aminotransferase increased 3 (2.8%) 1 (0.9%) 2 (5.6%) 1 (0.9%) Somnolence 1 (0.9%) 4 (3.7%) 2 (5.6%) 0 Constipation 4 (3.7%) 1 (0.9%) 2 (5.6%) 0 TEAEs reported in 5% or more of patients in any cohort. 28 Table of Contents Ten participants reported TEAEs leading to withdrawal, including two in each of the placebo and 50 mg cohorts as well as three in each of the 75 mg and 100 mg cohorts. There were five reported serious adverse events, or SAEs, overall with two SAEs in the placebo cohort (psychotic disorder and death), one SAE in the 50 mg cohort (suicidal ideation – deemed possibly related to treatment), one SAE in the 75 mg cohort (dystonia – deemed possibly related to treatment) and one SAE in the 100 mg cohort (psychotic disorder – deemed not related to treatment). The incidence of TEAEs was similar across groups, with most events being mild or moderate. Because of the frequency of certain adverse events associated with schizophrenia medications, we identified adverse events of special interest, such as EPS (including akathisia), sedation, adverse events associated with a prolactin increase, and QT interval corrected for heart rate, or QTcF, prolongation. These adverse events are depicted in the tables below. EPS Number of subjects (% of treatment group) Preferred Term 50 mg (N=107) 75 mg (N=108) 100 mg (N=36) Placebo (N=108) Dystonia 0 3 (2.8%) 1 (2.8%) 1 (0.9%) Akathisia 1 (0.9%) 2 (1.8%) 0 1 (0.9%) Extrapyramidal disorder 0 1 (0.9%) 1 (2.8%) 2 (1.9%) Total EPS 1 (1.0%) 6 (5.6%) 2 (5.6%) 4 (3.7%) AEs Related to Prolactin Increase Number of subjects (% of treatment group) Preferred Term 50 mg (N=107) 75 mg (N=108) 100 mg (N=36) Placebo (N=108) Galactorrhea 2 (1.9%) 1 (0.9%) 0 0 Breast enlargement 0 0 1 (2.8%) 0 Erectile dysfunction 0 0 1 (2.8%) 0 Total related to Prolactin 2 (1.9%) 1 (0.9%) 2 (5.6%) 0 Sedation Number of subjects (% of treatment group) Preferred Term 50 mg (N=107) 75 mg (N=108) 100 mg (N=36) Placebo (N=108) Sedation 0 1 (0.9%) 0 0 QTcF Prolongation QTcF from Baseline at Day 28 (ms) 50 mg (N=107) 75 mg (N=108) 100 mg (N=36) Placebo (N=108) Baseline 393.4 394.7 390 393.5 Day 28 4.9 4.3 5.4 1.2 Stopping criteria were not met at any dose level. Exploratory Endpoints We also included a measure of cognitive performance as an exploratory endpoint in our Phase 2 trial. This analysis utilized the CogState Computerized Schizophrenia Battery of Tests, a well validated measure of cognitive ability in subjects with schizophrenia. Patients had one practice session during the screening visit and completed the actual test on the first day of treatment (Day 1), the baseline assessment, and again on the last day of treatment (Day 28), the final assessment. The CogState battery of tests utilized in our Phase 2 trial consisted of five tests designed to evaluate psychomotor function, memory, attention, working memory, and executive function. Test completion rate, one measure of quality control, was 29 Table of Contents greater than or equal to 99% for each test across baseline and Day 28 visits. The test performance pass rate, another metric of quality control where data for a complete test is compared to expected rates of performance, was generally high for each test, with rates ranging from 92.4 to 99.4%. As part of our analysis of this data and consistent with other published literature utilizing the same CogState battery of tests, we conducted a post-hoc analysis in which we computed a global composite effect size, or overall improvement in cognitive performance, versus placebo. The analysis was completed in all patients who completed the planned 4 weeks of treatment and completed all scheduled cognition and PANSS assessments and did not enrich for patients with higher levels of cognitive impairment at baseline. After 4 weeks of treatment with LB-102, a robust, dose-dependent, and significant treatment effect size was identified in the completer population for all doses of LB-102 compared with placebo. Results of this analysis are highlighted in the table below. Dose Effect Size versus Placebo p-value n 50 mg 0.26 0.0476 90 75 mg 0.41 0.0027 83 100 mg 0.66 0.0018 23 A limitation of interpreting improvements in cognitive performance in the setting of treatment for acute schizophrenia is the potential that improvements in schizophrenia symptoms lead to improvements in cognitive performance. To examine the extent to which drug-related improvement in general cognitive performance was an indirect consequence of the effect of LB-102 on total schizophrenia symptoms (PANSS total score), and consistent with other therapeutics that have evaluated global cognitive performance in acute schizophrenia, we conducted a post hoc linear regression analysis comparing changes in global cognitive performance with changes in PANSS total score following treatment with LB-102. This analysis demonstrated a weak (near-zero) correlation between these measures suggesting that improvements in cognitive performance observed in our Phase 2 trial were unlikely to have been driven by improvements in schizophrenia symptoms. To further explore this, we also conducted a post-hoc mediation analysis that was designed to assess whether the improvement in cognitive performance, as measured by the Global Cognition composite score, was a direct effect of LB-102 or an indirect consequence of the effect of LB-102 on total schizophrenia symptoms. Results of the analysis demonstrated that the cognitive benefit was primarily, and statistically significantly, a direct effect of LB‑102. We believe that the magnitude of improvement in cognitive performance observed in this trial, the dose-dependent effect, and the post hoc linear regression and mediation analyses all support the further evaluation of the potential cognitive impacts of LB-102 in schizophrenia including in patients who have been stabilized with respect to positive symptoms of the disease. We are encouraged by the improvements observed in cognitive performance in this trial and intend to further investigate the effects of LB-102 on cognition in schizophrenia, bipolar depression, and adjunctive MDD. Improvements in cognitive performance, if replicated in our subsequent clinical trials, have the potential to further support the differentiation of LB-102. Phase 3 NOVA-2 Trial of LB-102 in Acute Schizophrenia and Planned Additional NDA-Enabling Studies We initiated a six-week Phase 3 trial (NOVA-2) of LB-102 in participants with acute schizophrenia in March 2026, which we believe, if positive, may be sufficient to support a regulatory approval application along with our Phase 2 trial and other NDA-enabling activities. The Phase 3 trial is a three-arm, inpatient, double-blinded, placebo-controlled, oral once-daily dose of LB-102 in patients with acute schizophrenia, with a six-week treatment duration. To better inform potential future commercial use of LB-102, we are studying the effects of two doses, 50 mg LB-102 or 100 mg LB-102, versus placebo in this trial, and patients will be randomized in a 1:1:1 ratio across the three arms of the trial. All patients will start at their assigned dose level without titration. The sample size will be approximately 460 patients. We designed our Phase 3 to leverage the operational framework of our Phase 2 trial. We are conducting this trial entirely in the United States at approximately 25 sites, a similar number of sites as were utilized in our Phase 2 acute schizophrenia trial and there is a significant overlap between the sites utilized in our Phase 2 trial and those we are utilizing in the Phase 3 trial. The primary endpoint of the trial is change from baseline in total PANSS score at Day 42. To mitigate the risk of an elevated placebo response in this trial, we are employing the same strategies which proved effective in our Phase 2 acute schizophrenia trial including consistent, frequent, and close engagement with clinical sites, the use of two third-party vendors (including the one used in our Phase 2 trial) to help identify and exclude professional patients from the trial, and a centralized review of PANSS ratings to ensure consistency and quality control throughout the trial. Secondary endpoints include CGI-S, PANSS positive and negative subscales, Marder factor scores, the Personal and Social Performance Scale, or PSP, and cognition as well as safety and tolerability. We believe that the 6-week duration of this Phase 3 trial has the 30 Table of Contents potential to further improve PANSS reductions observed following treatment with LB-102 given that in our Phase 2 trial, the PANSS score in the LB-102 treated arms declined at a faster rate than placebo through the 28-day duration of our Phase 2 trial. We expect to report topline data from the trial in the second half of 2027. Concurrently with the Phase 3 trial we expect to run an outpatient, open label trial (NOVA-3) to accrue the requisite safety population required to support NDA submission as well as other clinical and non-clinical studies typically required by FDA at the time of approval. To support approval, the safety population must include at least 1,500 cumulative patient exposures to LB-102, including at least 100 patients with greater than or equal to one year of exposure and 300 patients with greater than or equal to six months of exposure. As a result, we expect to enroll approximately 900 patients in our planned open label safety trial. If our Phase 3 trial is positive, we plan to hold a pre-NDA meeting with the FDA in the first quarter of 2028 to seek agreement from FDA on the suitability of our data to support an NDA submission for the treatment of schizophrenia with potential for submission of such NDA thereafter. LB-102 for the Treatment of Mood Disorders: Bipolar Depression and MDD Beyond the potential advantages in treating schizophrenia, we believe there is significant potential for LB-102 as a treatment for mood disorders. It is widely recognized that episodes of major depression whether unipolar (as in MDD) or bipolar (as in bipolar depression) are characterized by a similar imbalance in the neurotransmitters serotonin, noradrenaline, and dopamine, regardless of the underlying pathophysiology of the disease. Based on existing third-party data investigating amisulpride and a non-racemic form of the drug as a treatment for several types of depression, including bipolar depression, and the approval of amisulpride in multiple countries outside of the United States for the treatment of dysthymia, a form of persistent depression, we have identified bipolar depression and adjunctive treatment for MDD as our next development opportunities for LB-102. We believe LB-102’s strong and selective antagonism of the D 2 , D 3 , and 5HT7 receptors makes it well suited for treating bipolar depression, providing potential control of psychosis and mania through its effects on D 2 and potential for antidepressive and pro-cognitive effects through its antagonism of 5HT7 and D 3 . This receptor binding profile also supports the development of LB-102 as a potential treatment for adjunctive MDD. Moreover, at low doses, LB-102 and amisulpride have selectivity for pre-synaptic autoreceptors that serves to increase dopamine signaling which is underactive in depression. We believe this mechanistic profile supports the potential for efficacy for both depressive and residual symptoms such as anhedonia and cognitive impairment, which remain key unmet needs in the treatment of both bipolar depression and MDD. Results from our Phase 2 trial of LB-102 in acute schizophrenia further support the potential differentiation of LB-102 in bipolar depression and adjunctive MDD where burdensome side effects and residual symptoms of anhedonia and cognitive impairment remain significant unmet needs. In this trial, LB-102 demonstrated strong antipsychotic activity, robust effects on negative symptoms and cognitive performance and a favorable tolerability profile, characterized by low rates of EPS (including akathisia), minimal sedation, and few gastrointestinal side effects. Amisulpride is approved for the treatment of dysthymia, a form of depression, in certain countries outside of the United States and has been shown to be as effective as certain approved agents for MDD and dysthymia. We believe that results in dysthymia and MDD provide strong scientific and clinical rationale for development of LB-102 in the treatment of depressive episodes associated with bipolar disorder or bipolar depression as well as adjunctive MDD. Additionally, among the five antipsychotics currently approved for schizophrenia and MDD or treatment resistant depression that were also studied in late-stage bipolar depression trials (quetiapine, cariprazine, aripiprazole, lumateperone, and olanzapine), four out of five, or 80%, generated positive data for the treatment of bipolar depression. There is also widespread use of amisulpride in mood disorders, with approximately 20% of the at least two million monthly prescriptions in Europe written for mood disorder indications, with approximately 3.4% of prescriptions in Europe written for bipolar disorder and 16.2% for depression. A non-racemic form of amisulpride showed strong antidepressant activity in two independent third-party, placebo-controlled bipolar depression trials with an approximately 17 to 18-point reduction in MADRS from baseline observed in each trial. The non-racemic form of amisulpride has been shown to be substantially similar to amisulpride in preclinical models. We believe that the approval of amisulpride in the United Kingdom for the treatment of psychosis and mania 31 Table of Contents serves as additional supportive evidence for the broader utility of LB-102 to treat neuropsychiatric disorders such as bipolar depression. Our ongoing Phase 2 trial for bipolar depression is designed to compare a fixed-flexible dose of LB-102 with placebo. This trial design allows us to evaluate two doses of LB-102 in one arm of the trial, thereby increasing the chances for a patient to derive clinical benefit from treatment with LB-102, while retaining the advantages of a two-arm trial, which is known to mitigate the risk of a high placebo rate. Flexible dose trials typically have better signal detection than fixed dose trials for depression. A third-party study from 2003 examined if the dosing schedule (either a fixed dose or a flexible dose), in an antidepressant clinical trial affects the frequency with which antidepressants show statistical superiority over placebo. In flexible dose trials, 59.6% (34/57) of the antidepressant treatment arms were statistically significant compared to placebo. In contrast, in the fixed dose trials, only 31.4% (11/35) of the antidepressant treatment arms were statistically significant compared to placebo. These data suggest a significantly lower magnitude of symptom reduction with placebo in flexible dose trials compared to fixed dose trials. We believe LB-102 has the potential to provide improved tolerability and clinical activity in bipolar depression and adjunctive MDD compared to currently available treatments worldwide, which are associated with troubling adverse events and insufficient efficacy for certain symptoms, including anhedonia and cognitive impairment associated with the diseases. Bipolar Depression Overview and Disease Background People living with bipolar depression experience extreme shifts in mood, energy, and behavior, alternating between manic and depressive states. There are two types of bipolar disorder, distinguished as bipolar 1 and 2, which are characterized by chronically occurring episodes of mania or hypomania alternating with depression. To be diagnosed with bipolar 1 disorder, a person must experience a manic episode defined as a distinct period of persistently elevated or irritable mood with increased activity or energy lasting for at least seven days or requiring hospitalization. The manic episode may be preceded or followed by a hypomanic or major depressive episode. A bipolar 2 disorder diagnosis is based on experiencing hypomanic episode and major depressive episode without a manic episode. Manic episodes are markedly more severe than hypomanic episodes. People experiencing a manic episode may have a highly inflated sense of self-worth or self-esteem, talk quickly and rapidly shift from one idea to the next, have trouble concentrating, be easily distracted, have a decreased need for sleep, engage in reckless or risk-taking behavior and have a fixed or mistaken grandiose or persecutory belief. During a depressive episode, a person may experience poor concentration, feelings of excessive guilt or low self-worth, hopelessness about the future, thoughts of dying or suicide, disrupted sleep, changes in appetite or weight and feeling very tired or low in energy. Approximately 60% of patients with bipolar depression have cognitive deficits or anhedonia. For those living with bipolar disorder, an estimated 82.9% have serious impairment due to the disease, the highest percent of serious impairment among all mood disorders, indicating there is significant need for new and better treatment options. Limitations of Current Treatments for Bipolar Depression Worldwide, it is estimated that 40 million people live with bipolar disorder. In the United States, an estimated 2.8%, or approximately seven million people, experience bipolar disorder in a given year. Stigma and discrimination against people with bipolar disorder are widespread, which can undermine access to treatment. Although with proper treatment, recovery is possible. Mood stabilizers and antipsychotic drugs which are the mainstay for treatment of bipolar disorder, have been shown to help manage periods of acute mania as well as depression. Based on third-party market research conducted for us, an important advantage of certain antipsychotic drugs in the treatment of bipolar depression is the ability to control depressive symptoms while preventing the emergence of mania. Antidepressants, such as selective serotonin reuptake inhibitors, can be effective in controlling depressive symptoms but also carry a risk of triggering manic events and therefore are typically reserved for later lines of therapy. This market research, together with an advisory board that we held, also highlight unmet needs in the treatment of bipolar depression in areas of anhedonia and cognition. These unmet needs include fewer adverse events, better efficacy, including improvements in cognition and anhedonia, improved compliance to treatment, and a desire for therapies with novel mechanisms of action. Bipolar depression patients have higher baseline levels of function than schizophrenia patients and as a result the adverse events such as EPS and sedation which are commonly associated with current approved therapeutics can be particularly challenging for these patients. 32 Table of Contents Phase 2 ILLUMINATE-1 Trial of LB-102 in Bipolar 1 Depression We initiated a Phase 2 trial (ILLUMINATE-1) of LB-102 in participants with depressive episodes associated with bipolar 1 disorder or bipolar depression in February of 2026, which we believe, if positive, could potentially support a regulatory approval for the treatment of bipolar depression as a monotherapy along with an additional Phase 3 trial. We plan to report topline data for this trial in the first quarter of 2028 and, subject to positive results from the trial, meet with the FDA to discuss trial results at an end-of-Phase 2 meeting thereafter. The Phase 2 trial is an outpatient, two-arm, double-blinded, placebo-controlled trial, testing an oral, once-daily fixed-flexible dose of LB-102 in patients with depressive episodes associated with bipolar 1 disorder, with six-week treatment duration. We plan to enroll approximately 320 patients and conduct this trial entirely in the United States at approximately 30 sites. Patients are being randomized in a 1:1 ratio to LB-102 or placebo. Across most atypical antipsychotics, bipolar depression doses are usually approximately 50% lower than schizophrenia doses to keep D 2 receptor occupancy at a level that lowers the potential for EPS (including akathisia) yet high enough for antidepressant benefit. This is the dosing model that was used by Vraylar and Latuda, both of which are approved for schizophrenia and bipolar depression. In contrast, Caplyta, another drug approved for use in both schizophrenia and bipolar depression, utilized the same dose in both indications, in part because of its low rates of EPS. In selecting doses for our Phase 2 trial, we are blending these two paradigms. We are initiating all patients on half the lowest dose used in our acute schizophrenia trial (25 mg). Importantly, we believe that results of our Phase 2 schizophrenia trial, which demonstrated <1% EPS (including akathisia) and no sedation or orthostasis even at 50 mg, provide us an opportunity to explore that dose in bipolar depression. This is similar to Caplyta, which obtained approval for a single dose across both indications. Our Phase 2 ILLUMINATE-1 trial design of LB-102 in bipolar 1 depression is as follows: As shown above in our Phase 2 trial, all patients randomized to receive LB-102 are beginning treatment at 25 mg for the first three weeks of the trial. At the end of Week 3, if a patient has not improved based on a protocol guided set of specific items in the Clinical Global Impression-Bipolar Illness, or CGI-BP, scale and the patient is tolerating the drug, the dose of LB-102 will be increased in this patient to 50 mg for the remaining three weeks of the trial, subject to an allowance for up to one dose reduction for safety reasons. This trial design allows us to evaluate two doses of LB-102 in a single arm of the trial, thereby increasing the chances for a patient to derive clinical benefit from treatment with LB-102, while retaining the advantages of a two-arm trial, which is known to mitigate the risk of a high placebo rate. The primary endpoint is MADRS-10 and will compare all LB-102 treated patients regardless of the dose received versus placebo. Secondary endpoints will include MADRS-6, CGI-BP-S, cognitive performance, anhedonia, as well as safety and tolerability, utilizing specific scales dedicated to the measurement of anhedonia and cognitive performance. We have designed this trial to highlight what we believe will be differentiating attributes of LB-102 in bipolar depression. Specifically, we are targeting competitive MADRS-10 versus other approved agents, improved tolerability as evidenced by lower rates of sedation and gastrointestinal side effects compared with other approved agents, a rate of EPS (including akathisia) consistent with what we observed in our schizophrenia Phase 2 trial, and the potential to demonstrate improvements in anhedonia and cognition versus placebo, which we believe could address important unmet needs in this disease. Flexible dose trials typically have better signal detection than fixed dose trials for depression. A third-party study from 2003 examined if the dosing schedule (either a fixed dose or a flexible dose), in an antidepressant clinical trial affects the frequency with which antidepressants show statistical superiority over placebo. In flexible dose trials, 59.6% (34/57) of the antidepressant treatment arms were statistically significant compared to placebo. In contrast, in the fixed dose trials, only 31.4% (11/35) of the antidepressant treatment arms were statistically significant compared to placebo. These data suggest a significantly lower magnitude of symptom reduction with placebo in flexible dose trials compared to fixed dose trials. To further reduce the potential for an elevated placebo rate, we are employing many of the same strategies which proved effective in our Phase 2 acute schizophrenia trial including consistent, frequent, and close engagement with clinical sites, the use of two third-party vendors (including the one used in our Phase 2 trial) to help identify and exclude 33 Table of Contents professional patients from the trial, and a centralized review of MADRS ratings to ensure consistency and quality control throughout the trial. We are also utilizing remote structured assessments to enhance enrollment precision in our clinical trial, which has been shown to reduce placebo response rates. Following a successful Phase 2 trial, we believe that a single additional Phase 3 trial could support an approval for LB-102 as a monotherapy to treat bipolar depression. We expect an additional Phase 3 trial to be required to support approval as an adjunctive therapy for bipolar depression. Following a successful Phase 2 trial, we may also consider conducting two Phase 3 trials in bipolar depression, one as a monotherapy and one as an adjunctive therapy in combination with mood stabilizers, a commonly used treatment for bipolar depression. Based on historical precedent, we expect to be able to utilize the safety dataset that we generate from clinical trials across all indications to support a potential approval for LB-102 in bipolar depression as the doses utilized in our bipolar depression trial will be similar to those utilized in our other clinical trials. As a result, the ability to leverage the safety data set generated as part of the schizophrenia development program has potential to streamline the cost and timeline to approval for bipolar depression. Major Depressive Disorder Overview and Disease Background MDD is a common and serious mood disorder and the leading cause of disability worldwide, impacting 280 million people globally and approximately 20 million people in the United States. MDD is characterized by persistent depressed mood and loss of interest. It can significantly impair how individuals feel, think and behave, with substantial impacts on daily functioning and quality of life. While some patients achieve an initial or adequate response with currently available therapies, a large proportion experience clinically meaningful residual symptoms and tolerability limitations. MDD can lead to lost work productivity and increased morbidity and mortality due to direct effects (e.g., increased risk of suicide, reduced functional behaviors and interpersonal relationships) and indirect effects (e.g., increased prevalence of diabetes) of the disease. Over 10 million people in the U.S. reported experiencing a MDD episode with “severe impairment” that resulted in an inability to manage to home, work, have relationships with others or have a social life Limitations of Current Treatments for MDD With currently available treatments, approximately 60% of patients experience two or more residual symptoms and 45%-70% experience cognitive dysfunction and/or anhedonia. It is estimated that of the approximately 20 million adults in the U.S. that have been diagnosed with MDD, approximately 60%, or approximately 12 million receive drug therapy. While some patients achieve an initial or adequate response with currently available therapies, a large proportion experience clinically meaningful residual symptoms and tolerability limitations. With currently available treatments, approximately 60% of patients experience two or more residual symptoms and 45%-70% experience cognitive dysfunction and/or anhedonia (e.g., reduced capacity to experience pleasure or interest in previously enjoyed activities). For patients with inadequate response to therapy, a second medication is frequently added to the existing medication regime, often targeting complementary neurochemical pathways with a goal of achieving broader and more durable symptom control. Of the 12 million patients receiving drug therapy, approximately 50% require second-line treatment, with 70% of that group requiring third-line treatment. With approximately six million patients requiring second-line treatment and four million requiring third-line treatment, there is a large addressable patient population whose needs are not met by the currently available therapies. Phase 2 Trial of LB-102 in Adjunctive MDD We intend to initiate a Phase 2 clinical trial of LB-102 as an adjunctive treatment MDD. The planned Phase 2 trial is expected to be a multi-center, randomized, double-blind, placebo-controlled trial with fixed- and flexible-doses and is designed to evaluate the efficacy and safety of two doses of LB-102 (15 mg and 25 mg given once daily) for the treatment of patients with MDD experiencing inadequate response after 1-2 prior trials with standard antidepressant therapy. Our Phase 2 trial design of LB-102 in adjunctive MDD is as follows: 34 Table of Contents The two-arm, six-week, outpatient trial is expected to enroll approximately 380 patients with MDD at approximately 50 sites in the U.S. and Europe. Patients will be randomized 1:1 to receive either LB-102 or placebo in addition to standard antidepressant therapy. The primary endpoint is the Montgomery–Åsberg Depression Rating Scale (MADRS)-10 at week six. The primary statistical analysis will compare results from all patients receiving LB-102, regardless of dose, with placebo. Secondary endpoints include Clinical Global Impression-Improvement/Clinical Global Impression-Severity, anhedonia, function, cognition, safety and tolerability. The Company believes LB-102 has potential for a favorable benefit–risk profile as an adjunctive treatment for major depressive disorder as compared to currently available antipsychotic therapies based on its strong mechanistic rationale, validating clinical and real-world experience with amisulpride and supportive results from its previously completed Phase 2 schizophrenia trial. We plan to initiate this trial in early 2027 and expect to report topline data in the first half of 2029. Future Development Opportunities of LB-102 Potential Additional Indications for LB-102 In addition to schizophrenia, bipolar depression and adjunctive MDD, we are exploring the possibility of testing LB-102 in other neuropsychiatric disorders such as predominantly negative symptoms of schizophrenia, Alzheimer’s disease psychosis and agitation, as well as other neuropsychiatric diseases We are assessing LB-102 as a potential treatment for psychosis and agitation in Alzheimer’s disease. A third-party clinical trial published in 2018 in The Lancet studying the efficacy of amisulpride in treating elderly patients with very late-onset schizophrenia-like psychosis showed that over 12 weeks, there was a statistically significant 7.7-point improvement in the BPRS (Brief Psychiatric Rating Scale, a prior iteration of the PANSS) for amisulpride as compared to placebo. Importantly, amisulpride was well-tolerated in this vulnerable elderly population, where the average age in this trial was 81. Another third-party clinical trial, published in 2017, explored dose levels of off-label use of amisulpride in treating older people with Alzheimer’s disease-related psychosis. The clinical trial showed a reduction in symptoms was associated with amisulpride concentration and D 2 /D 3 occupancy. To further investigate the potential of LB-102 in Alzheimer’s disease, we will need to conduct a Phase 1 trial to evaluate the pharmacokinetics and safety of LB-102 in a healthy elderly population (aged 65 and older). It is estimated that approximately 40% of the approximately seven million Americans with Alzheimer’s disease experience psychosis or agitation. While our current schizophrenia clinical program is designed to investigate LB-102 as a treatment for people experiencing the acute phase, or positive symptoms, of schizophrenia, we believe LB-102 also has potential to address predominantly negative symptoms based on the results from our Phase 2 trial and clinical experience to date with amisulpride, an indication with significantly fewer treatment options. Amisulpride demonstrated a statistically significant benefit versus placebo in three independent third-party placebo-controlled trials in patients with predominantly negative symptoms with treatment durations ranging from six weeks to six months. We are also encouraged by the magnitude of improvement in cognitive performance we have observed to date in our schizophrenia trials and are also assessing the potential to study LB-102 as a treatment for cognitive impairment of schizophrenia, an indication for which there are no approved therapies. In both negative symptoms of schizophrenia and CIAS, we will need to study LB-102 in patients who have been stabilized with respect to the positive symptoms of their disease. 35 Table of Contents Potential New Formulations of LB-102 We are also developing an LAI formulation of LB-102, which may improve treatment adherence, a common issue in patients with schizophrenia and bipolar disorder. LB-102’s consistent dopamine receptor engagement over 24 hours and the lower administered dose may allow LB-102 to be administered as an LAI. We believe an effective LAI form of LB-102 has the potential to benefit patients worldwide, as relatively few approved agents are available as long-acting formulations. The American Psychiatric Association recommends injectable formulations in circumstances where doing so will improve adherence, decrease mortality, reduce hospitalization risk, and decrease treatment discontinuation rates. We believe LAI formulations can have additional benefits in treating symptoms of schizophrenia, such as consistent drug exposure, which is potentially beneficial compared to orally dosed antipsychotic drugs, as it relieves the requirement for patients or their care partners to rely on often self-enforced daily oral dosing to maintain efficacy. The latest guidance from the American Psychiatric Association calls for the use of LAI with patients who have a history of poor adherence. Using LAI antipsychotic drugs to treat schizophrenia patients may decrease mortality risk, reduce hospitalization risk, and decrease rates of treatment discontinuation. We believe such a formulation of LB-102 would potentially benefit patients both in the United States and globally. We have commenced LAI formulation development and expect to continue these efforts in 2026. We believe that the success of the 50 mg dose in our Phase 2 acute schizophrenia trial affords the opportunity to develop an LAI. Market Opportunity The United States market for branded antipsychotic drugs in 2024 was approximately $12 billion, where despite the widespread use of generic drugs, several branded antipsychotic drugs each generate sales in excess of $1 billion per year. The chart below depicts the market share of branded antipsychotic drugs in the United States for 2024 in terms of revenue. United States market for branded antipsychotic drugs – 2024. Among the schizophrenia drugs with greater than $1 billion in sales, all have approvals in additional indications beyond schizophrenia, such as mood disorders. In addition, these drugs generally received their initial approval in schizophrenia prior to their approvals in mood disorders. It is well recognized that in the United States, antipsychotic drugs have higher prices than antidepressants, such as the selective serotonin reuptake inhibitors. Vraylar, Abilify, Rexulti, and Caplyta are approved in the United States for the treatment of schizophrenia and adjunctive MDD in adults. Beyond schizophrenia and MDD, Vraylar, and Caplyta are approved for the treatment of bipolar depression. The high incidence of schizophrenia, inadequate clinical response, and side effects from current therapeutics lead to a discontinuation rate of 74% within 18 months of treatment and present a clear market opportunity for more effective schizophrenia drugs that are well-tolerated. Switching treatment is also common in bipolar depression. For example, market research that we conducted suggests that approximately 61% of bipolar depression patients have switched therapies at least once. 36 Table of Contents Several factors, including new diagnoses, inadequate responses, and high discontinuation rates contribute to a significant market opportunity for effective schizophrenia drugs. Additionally, data from 2023 show that despite limited marketing efforts, there were at least two million monthly prescriptions per year for amisulpride in the European Union. We believe that amisulpride’s continued use as an agent for the treatment of schizophrenia outside of the United States over the past 25 years supports the significant commercial potential of LB-102, if approved. License and Other Agreements Royalty Agreements In July 2016, we entered into several Royalty Participation Agreements, or the Original Royalty Agreements, with certain of our existing investors, co-founders, former and current directors, and former and current executive officers, including Zachary Prensky, Andrew Vaino, Ph.D., and Marc Panoff, for royalties payable, in the aggregate, of up to 5.0% of future commercial worldwide sales of LB-102. In this transaction, we received $0.2 million in cash in exchange for the certificate holders receiving convertible notes with a face value of $0.2 million, shares of our common stock and the future royalties provided for in the Original Royalty Agreements. The future royalty payments provided for in the Original Royalty Agreements had an expiration date of December 31, 2037. The royalties were transferable upon surrender of the royalty certificate accompanied by written and notarized instructions of the transfer, provided that the certificate holder could not transfer to any individual or entity (i) to which it was unlawful for us to make such payments or (ii) that owned, controlled or possessed voting rights in the aggregate of more than 10% of our common stock. We had the option to purchase all issued and outstanding royalty certificates under the Original Royalty Agreements by way of a tender offer to all such holders, which would become binding at such time as the holders of two-thirds of all outstanding royalty interests agreed in writing to accept such tender offer. In August 2023, contemporaneously with the closing of the Series C financing, we entered into several Amended and Restated Royalty Agreements to remove the expiration date and modify royalties payable to certificate holders in the aggregate amount of up to 2.75% of net sales of LB-102 through December 31, 2035 and increasing to up to 3.25% of net sales in 2036 and thereafter. Net sales are defined in these agreements as the gross payments received on total commercial sales of LB-102 less certain standard deductions, whether received by us or any licensee of LB-102. None of the proceeds from the Series C financing were allocated to the certificate holders as the investors in the Series C financing are not parties to the Original Royalty Agreements or the Amended and Restated Royalty Agreements. Each certificate holder has the same rights and obligations as the other holders except with respect to its individual royalty amount that may come due from us if we generate any revenue from future sales of LB-102. The certificate holders may not transfer rights under the applicable Amended and Restated Royalty Agreement to any individual, entity, corporation, partnership or any other such organization without our written consent, which shall not be unreasonably withheld. We may purchase all issued and outstanding royalty certificates under the Amended and Restated Royalty Agreements by way of a tender offer to all such 37 Table of Contents holders, which will become binding at such time as the holders of two-thirds of all outstanding royalty interests thereunder agree in writing to accept such tender offer. Intellectual Property Overview We strive to protect and enhance the proprietary technology, inventions and improvements that are commercially important to our business, including by seeking, maintaining, enforcing and defending patent rights. Our policy is to seek to protect our proprietary position by, among other methods, filing patent applications in the United States and in jurisdictions outside of the United States related to our proprietary technology, inventions, improvements, and product candidate that are important to the development and implementation of our business. We also rely, in part, on trade secrets and know-how relating to our proprietary technology and product candidate, continuing innovation, and in-licensing opportunities to develop, strengthen and maintain our proprietary position in the field of precision psychiatry and neuropsychiatric drug development; however, trade secrets are difficult to protect and provide us with only limited protection. Our commercial success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our technology, inventions and improvements, to preserve the confidentiality of our trade secrets, and defend and enforce our proprietary rights, including any patents that we own or may obtain in the future. Intellectual property rights may not address all potential threats to our competitive advantage. As of March 1, 2026, we owned approximately 51 patents and pending patent applications in the United States and foreign jurisdictions, including seven issued U.S. patents and 14 issued foreign patents. The issued patents, or patents that may be issued from the pending patent applications, are expected to expire between 2037 and 2047, without taking into account potentially available patent term adjustments or extensions in the United States and other countries, and assuming payment of all appropriate maintenance, renewal, and annuity fees. We expect the patent term adjustment or extension to be up to five years. Forty-three of the patents and pending patent applications relate directly to LB-102. Additionally, we own two U.S. patents that are directed to open-ring derivative compounds of LB-102. The two U.S. patents claim open-ring derivative compounds of LB-102 as compositions of matter and methods of using these derivative compounds in the treatment of schizophrenia and other mental illnesses. In addition, there are two patent applications pending in Hong Kong, one patent issued in China, and one patent application pending in China, the European patent office, and Taiwan, respectively, that are directed to uses of the R-enantiomer of LB-102. These patent applications cover methods of using the R-enantiomer of LB-102 in treating schizophrenia and other mental illnesses, such as depression, bipolar disorder, Tourette’s syndrome, schizoaffective disorder, Parkinson’s psychosis, Alzheimer’s psychosis, oppositional defiant disorder, personality disorder, childhood schizophrenia, dysthymia, treatment resistant schizophrenia, chronic fatigue syndrome, and predominantly negative symptoms of schizophrenia. Product Candidate Patent Portfolio LB-102 As of March 1, 2026, we owned approximately 43 patents and pending patent applications in the United States and foreign jurisdictions relating to LB-102, including five issued U.S. patents and thirteen issued foreign patents, three pending U.S. patent applications, twenty pending foreign applications, and two pending Patent Cooperation Treaty, or PCT, applications. 38 Table of Contents We own all of the following patents and pending patent applications directed to LB-102, which are summarized below: Indication(s) Subject Matter Projected Expiration Date* Issued or Pending Patent Applications/ Jurisdiction Schizophrenia and other mental illnesses Composition of Matter and Method of Treatment 2037 Respectively, one patent issued in each of the following: Australia, Brazil, EPO, Indonesia, Japan, Republic of Korea, and Singapore, two patents issued in China, Hong Kong, and Malaysia, and five patents issued in the United States; one patent application pending in each of the following: Australia, Brazil, Malaysia, New Zealand, and the United States; and two patent applications pending in Singapore. Method of Treatment 2042 Respectively, one patent application pending in each of the following: Australia, Brazil, Canada, China, EPO, Japan, Republic of Korea, Malaysia, New Zealand, Singapore, and the United States; and two patent applications pending in Hong Kong Method of Treatment (Poor Cognition) 2044 One PCT application pending; and one application pending in Taiwan. Method of Treatment 2046 One PCT application pending; one patent application pending in Taiwan; and one provisional application pending in the United States. Composition of Matter 2047 One provisional patent application pending in the United States * Projected expiration dates are based on issued patents or patents that may be issued from pending patent applications, and do not take into account possible patent term adjustments, extensions, or terminal disclaimers and assumes payment of all appropriate maintenance, renewal, and annuity fees. With respect to LB-102, our U.S. and foreign patents and pending patent applications cover claims directed to composition of matter, and method of treating schizophrenia and other mental illnesses such as depression, bipolar disorder, Tourette’s syndrome, schizoaffective disorder, Parkinson’s psychosis, Alzheimer’s psychosis, oppositional defiant disorder, personality disorder, childhood schizophrenia, dysthymia, resistant schizophrenia, and chronic fatigue syndrome. The issued patents covering the composition of matter of LB-102 and method of treating schizophrenia are expected to expire in 2037, and any patents that may be issued from the pending patent applications are expected to expire between 2037 and 2047, in each case, without taking into account any possible patent term adjustment or extensions or terminal disclaimers and assuming payment of all appropriate maintenance, renewal, and annuity fees. Our foreign patents and pending patent applications are filed in foreign jurisdictions including Australia, Brazil, Canada, China, Europe, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, New Zealand, Singapore, and Taiwan. Intellectual Property Protection We continue to assess the extent to which we may seek additional patent protection related to our product candidate. The term of individual patents depends upon the date of filing of the patent application, date of patent issuance and the legal term of the patents in the countries in which they are obtained. In the United States, the patent term is 20 years from the earliest date of filing of the first non-provisional application to which priority is claimed. Outside of the United States, for patent applications first filed in the United States, the duration of patents varies in accordance with applicable local law, but typically is also 20 years from the earliest non-provisional filing date. In the United States, the patent term may be lengthened by a 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 a patent with an earlier expiration date. Moreover, in the context of approved products, there may be additional exclusivity for the patents covering 39 Table of Contents such approved products. In the United States, the term of a patent that covers an FDA-approved drug may also be eligible for a patent term extension of up to five years under the Hatch-Waxman Act, which is designed to compensate for the period of the patent term lost during the FDA regulatory review process. The length of the patent term extension is calculated based on the length of time it takes for regulatory review. There are specific limitations to a patent term extension under the Hatch-Waxman Act. The extension cannot exceed the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to an approved drug may be extended and only those patents with claims covering the approved drug, a method for using it, or a method for manufacturing it may be extended. A patent term extension provided for under the Hatch-Waxman Act is available only for the first approved use of the drug, and thus, no extension is available if a product is approved for a subsequent use. Moreover, a patent can only be extended once, and thus, if a single patent is applicable to multiple products, it can only be extended based on one product. Similar provisions are available in Europe and certain other foreign jurisdictions to extend the term of a patent that covers an approved drug. We intend to pursue, in the normal course of business and when possible, additional patent protection for future compositions including solid state forms, methods of use, processes, composition, method of use, process, dosing, and formulations of our product candidate(s) we develop and commercialize. We may also pursue patent protection with respect to manufacturing and other technologies. To expand market exclusivity, we intend to strategically obtain or license additional intellectual property related to a current or contemplated product candidate. In some instances, we submit patent applications to the USPTO as provisional patent applications. Corresponding non-provisional patent applications must be filed within 12 months of the provisional application filing date. Claims of the corresponding non-provisional application may be entitled to the benefit of the earlier provisional application filing date(s), and the patent term of the finally issued patent is calculated from the later non-provisional application filing date. Provisional applications for patents were designed to provide a lower-cost first patent filing in the United States. This system allows us to obtain an early priority date, add material disclosure to the patent application(s) during the 12-month period, obtain a later start to the patent term and to delay prosecution costs. The PCT system allows a single application to be filed within 12 months of the original priority date of the patent application, and to designate all of the PCT member states in which national or regional patent applications can later be pursued based on the international patent application filed under the PCT. The PCT searching authority performs a patentability search and issues a non-binding patentability opinion which can be used to evaluate the chances of success for the national or regional applications prior to having to incur the filing fees and prosecution costs. Although a PCT application does not result in the issuance of a patent, it allows the applicant to seek protection in any of the member states through national/regional-phase applications. At the end of the period of two and a half years from the first priority date of the patent application, separate patent applications can be pursued in any of the PCT member states either by direct national filing or, in some cases by filing through a regional patent organization, such as the European Patent Office. The PCT system delays expenses, allows a limited evaluation of the chances of success for national/regional patent applications and enables substantial savings when applications are abandoned within the first two and a half years of filing. We intend to file U.S. non-provisional applications and PCT applications that claim the benefit of the priority date of our earlier filed provisional applications, when applicable. For all patent applications, we determine claiming strategy on a case-by-case basis. Advice of counsel, country-specific patent laws, our business model and commercial needs are always considered. We may file patent applications containing claims for protection of all useful applications of our proprietary product candidate, as well as all new uses we discover for our existing product candidate, assuming these are strategically valuable. We continuously reassess the number and type of patent applications in our portfolio, as well as the pending and issued patent claims, to help ensure that maximum coverage and value are obtained for our processes, and compositions, given existing patent office rules and regulations. In addition, claims may be modified during patent prosecution, to the extent allowed, to meet our intellectual property and business needs. There can be no assurance that we will be able to obtain, maintain, enforce, and defend all patents and other intellectual property rights necessary to conduct our business. The patents we currently own, possibly in-license in the future, or patents that issue from our owned patent applications, if any, may be challenged by third parties, may not effectively prevent third parties from commercializing competitive technologies or may not otherwise provide us with a competitive advantage. For more information regarding the risks related to our intellectual property, see the section titled “Risk Factors—Risks Related to Intellectual Property, Collaboration and Related Agreements.” 40 Table of Contents Sales, Marketing, and Commercialization While we have hired a Chief Commercial Officer to lead the development of our commercial strategy, we do not currently have a commercial organization for the marketing, sales, market access and distribution of prescription pharmaceutical products. We intend to build our global commercialization capabilities internally over time, such that we are able to commercialize any product candidate for which we may obtain regulatory approval. We expect to manage future sales, marketing, market access and distribution through internal resources and third-party relationships. In addition, we will opportunistically explore commercialization partnerships, particularly with entities that have strong capabilities in geographies outside of the United States. As our current and future product candidates progress through clinical development and regulatory review, our commercial plans may change. Clinical data, the size of the development programs, the size of our target markets, the size of the requisite commercial infrastructure, the competitive landscape, and manufacturing needs may all influence our future commercialization strategies. Manufacturing We do not own or operate, and currently have no plans to establish, any manufacturing facilities. We have engaged, and expect to continue to rely on, well-established third-party Contract Development and Manufacturing Organizations, or CDMOs, to produce and supply our product candidates for use in our preclinical studies and clinical trials. Because we are responsible for ensuring all aspects of our product candidates’ compliance and quality but rely on third-party contract manufacturers and analytical testing laboratories, we must employ personnel with extensive technical, manufacturing, analytical, and quality experience to oversee our contract manufacturing and testing activities, and to compile manufacturing and quality information for our regulatory submissions. We believe our current manufacturers have the scale, systems, and experience to supply our currently planned clinical trials. Additionally, we intend to rely on third-party CDMOs for later-stage development and commercial manufacturing, if our product candidates receive marketing approval. As our lead product candidates advance through clinical development, we expect to enter into longer-term commercial supply agreements to fulfill and secure our production needs. Key starting material is manufactured by a limited number of CDMOs. The final drug substance is manufactured at a single CDMO. In the event it is necessary or advisable to acquire supplies from an alternative supplier, we might not be able to obtain them on commercially reasonable terms, if at all. It could also require significant time and expense to redesign our manufacturing processes to work with another company. If we need to change manufacturers during the clinical or development stage for product candidates or after commercialization for our product candidates, if approved, the FDA and corresponding foreign regulatory agencies must approve these new manufacturers in advance, which will involve testing and additional inspections to ensure compliance with FDA regulations and standards and may require significant lead times and delay. To adequately meet our projected commercial manufacturing needs, our CDMOs will need to scale-up production, or we will need to secure additional suppliers. Processes for producing drug substances and drug product for commercial supply must be developed, with the goal of achieving reliable, reproducible, and cost-effective production. We believe the drug substance and drug product processes for our current product candidates can be appropriately scaled. Competition The biopharmaceutical industry is characterized by rapid innovation and intense competition. While we believe that our lead product candidate, LB-102, offers a potentially attractive alternative to generic and branded therapeutics treating neuropsychiatric diseases, should it be approved for marketing, today we face competition from multiple biopharmaceutical and biotechnology companies that are similarly working to develop therapeutics targeting schizophrenia, as well as from academic institutions, governmental agencies, and public and private research institutions. Many of our potential competitors, either alone or with collaboration partners, have significantly greater financial resources than we do, as well as equal or greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products, and the commercialization of those products. Accordingly, our potential competitors may be more successful than we are in achieving regulatory approvals and commercializing their neuropsychiatric products. We anticipate that we will face intense and increasing competition from existing, approved drugs, if LB-102 becomes a commercial product, as well as new drugs entering the market in the future and emerging technologies that become available. We believe the key competitive factors affecting the success of our product candidate, LB-102, that we are developing to address schizophrenia, bipolar depression, and adjunctive MDD, if approved, are likely to be efficacy, safety, frequency 41 Table of Contents of dosing, convenience, price, the level of generic competition, and the availability of reimbursement from government and other third-party payors. Patients with schizophrenia have historically been treated with a variety of antipsychotic drugs and, accordingly, we believe LB-102, if approved, would compete with several currently approved therapeutics, including: clozapine (marketed by HLS Therapeutics, Inc.); quetiapine (marketed by AstraZeneca plc); aripiprazole (marketed by Otsuka Pharmaceutical Co. Ltd.); risperidone (marketed by Janssen Pharmaceuticals, Inc.); olanzapine (marketed by Eli Lilly & Company Ltd.); haloperidol (marketed by Janssen Pharmaceuticals, Inc.); Latuda (marketed by Sumitomo Pharma America, Inc.); Invega (marketed by Janssen Pharmaceuticals, Inc.); Rexulti (marketed by Otsuka Pharmaceutical Co. Ltd and H. Lundbeck A/S); Vraylar (marketed by AbbVie Inc.); Caplyta (marketed by Janssen Pharmaceuticals, Inc.); iloperidone (marketed by Vanda Pharmaceuticals Inc.); Uzedy (marketed by Teva Pharmaceutical Industries Limited); Lybalvi (marketed by Alkermes, Inc.); and Cobenfy (marketed by Bristol-Myers Squibb Company, Inc.). We are also aware of several companies developing compounds for the treatment of schizophrenia, including Alto Neuroscience Inc., Minerva Neurosciences, Inc., MapLight Therapeutics, Inc., Neurocrine Biosciences, Inc., Reviva Pharmaceuticals Holdings, Inc., and Acadia Pharmaceuticals Inc., as well as other earlier stage competitors. In bipolar depression, we believe LB-102, if approved, would compete with several currently approved therapeutics, including: Vraylar (marketed by AbbVie Inc.); Caplyta (marketed by Janssen Pharmaceuticals, Inc.); quetiapine/quetiapineXR (marketed by AstraZeneca plc); Latuda (marketed by Sumitomo Pharma America, Inc.); and seroquel. We are also aware of several companies developing compounds for the treatment of bipolar depression, including Alto Neuroscience Inc., Neurocrine Biosciences, Inc., NRx Pharmaceuticals, Inc., and Xenon Pharmaceuticals Inc., as well as other earlier stage competitors. In the adjunctive treatment of MDD, we believe LB-102, if approved, would compete with several currently approved therapeutics, including: Vraylar (marketed by AbbVie Inc.); Caplyta (marketed by Janssen Pharmaceuticals, Inc.); Rexulti (marketed by Otsuka Pharmaceutical Co. Ltd and H. Lundbeck A/S); aripiprazole (marketed by Otsuka Pharmaceutical Co. Ltd.); and quetiapine/quetiapineXR (marketed by AstraZeneca plc). We are also aware of several companies developing compounds for the adjunctive treatment of MDD, including Neurocrine Biosciences, Axsome Therapeutics, Inc., Neumora, Helus Pharma, as well as other earlier stage competitors. Government Regulation Government authorities in the United States, at the federal, state and, local level, and other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, marketing, and export and import of human drug products. We, along with any third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory authorities of the countries in which we wish to conduct studies or seek approval of our product candidates. The process of obtaining regulatory approvals and ensuring compliance with applicable federal, state, local, and foreign statutes, regulations and requirements both during development and post-approval requires the expenditure of substantial time and financial resources. U.S. Drug Development Process In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act of 1938, or the FDCA, and its implementing regulations. A new drug must be approved by the FDA through the NDA process before it may be legally marketed in the United States. Failure to comply with the applicable U.S. requirements at any time during the product development or approval process, or after approval, may subject an applicant to administrative or judicial sanctions brought by the FDA and the Department of Justice, or DOJ, or other governmental entities. The process required by the FDA before a drug may be marketed in the United States generally involves the following: • completion of preclinical laboratory tests, animal studies and formulation studies in accordance with FDA’s GLP regulations and other applicable requirements; • submission to the FDA of an IND, which must become effective before human clinical trials may begin; • approval by an IRB or ethics committee before each clinical trial may be initiated; 42 Table of Contents • performance of adequate and well-controlled human clinical trials in accordance with GCPs to evaluate the safety and efficacy of the proposed drug for its intended use; • preparation of and submission to the FDA of an NDA; • a determination by the FDA within 60 days of its receipt of an NDA to file the application for review; • satisfactory completion of an FDA advisory committee review, if applicable; • satisfactory completion of FDA inspections of the manufacturing facility or facilities at which the drug is produced to assess readiness for commercial manufacturing and conformance to the manufacturing-related elements of the application, to conduct a data integrity audit, and to assess compliance with current cGMP regulations to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity, and a potential inspection of selected clinical investigation sites to assess compliance with GCPs; and • FDA review and approval of the NDA. Preclinical Studies and IND Application Once a product candidate is identified for development, it enters the preclinical development stage. The preclinical developmental stage generally involves laboratory evaluations of chemistry, formulation, and stability, as well as studies to evaluate the product candidate’s toxicity, in an effort to support subsequent clinical testing. Such toxicity studies generally involve the use of animals, although an NDA applicant may fulfill nonclinical testing requirements by completing various in vitro assays (e.g., cell-based assays, organ chips, or microphysiological systems), in silico studies (i.e., computer modeling), other human or non-human biology-based tests (e.g., bioprinting), or in vivo animal tests. Prior to beginning the first clinical trial with a product candidate in the United States, the product’s developer, also referred to as the IND sponsor, must submit the results of preclinical testing, together with manufacturing information and analytical data, to the FDA as part of an IND. An IND is a request for authorization from the FDA to administer an investigational drug product to humans and must become effective before human clinical trials may begin. In addition to including the results of these nonclinical studies, the IND will also include a general investigational plan and a study protocol, detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated, if the trial protocol includes an efficacy evaluation. The IND may also include any available human data or literature to support the use of the product candidate. Additional nonclinical testing may continue even after the IND is submitted. The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, places the IND on clinical hold. In such case, the IND sponsor and the FDA must resolve any outstanding concerns or questions before the clinical trial can begin. Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial. Clinical holds also may be imposed by the FDA at any time after initiation of clinical trials due to safety concerns about ongoing or proposed clinical trials or non-compliance with specific FDA requirements, and the trials may not begin or continue until the FDA notifies the sponsor that the hold has been lifted. A clinical hold may affect one or more specific studies or all studies conducted under an active IND. Human Clinical Trials in Support of an NDA All clinical trials must be conducted under the supervision of one or more qualified investigators, generally physicians not employed by or under the trial sponsor’s control, in accordance with GCPs, which include, among other things, the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial. Clinical trials must be conducted under protocols detailing, among other things, the objectives of the trial, dosing procedures, research subject selection and exclusion criteria, and the safety and effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the IND, and a separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent material amendments to a protocol. While the IND is active, progress reports summarizing the results of the clinical trials and nonclinical studies performed since the last progress report, among other information, must be submitted at least annually to the FDA. Sponsors also must submit written IND safety reports to the FDA and investigators in a timely matter for serious and unexpected suspected adverse events, findings from other studies suggesting a significant risk to humans exposed to the same or similar drugs, findings from animal or in vitro testing suggesting a significant risk to humans, and any clinically 43 Table of Contents important increased incidence of a serious suspected adverse reaction compared to that listed in the protocol or investigator brochure. Furthermore, an IRB must review and approve the protocol before a clinical trial commences and must also approve the information regarding the trial and the consent form that must be signed by each research subject or the research subject’s legal representative, monitor the study until completed, and otherwise comply with IRB regulations. Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives. In addition, some clinical trials also include oversight by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or committee. Depending on its charter, this group may determine whether a trial may move forward at designated check points based on access to certain data from the trial. There are also requirements governing the reporting of ongoing clinical studies and clinical trial results to public registries, including clinicaltrials.gov. Human clinical trials are typically conducted in three sequential phases that may overlap or be combined: • Phase 1: The product candidate is initially introduced into healthy human subjects or patients and tested for safety, dosage tolerance, absorption, metabolism, excretion, distribution and elimination, and, if possible, to gain an early indication of its effectiveness. • Phase 2: The product candidate is administered to a limited patient population with a specified disease or condition to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product candidate for specific targeted diseases, and to determine dosage tolerance and optimal dosage. • Phase 3: The product candidate is administered to an expanded patient population to further evaluate dosage, to provide substantial evidence of efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites. These clinical trials are intended to establish the overall risk-benefit ratio of the product candidate and provide an adequate basis for product labeling. In some cases, the FDA may require, or sponsors may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the product. These post-marketing clinical trials, sometimes referred to as Phase 4 studies, may be used to gain additional experience from the treatment of patients in the intended therapeutic indication. In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of an NDA. A pivotal trial is a clinical trial that adequately meets regulatory agency requirements for the evaluation of a product candidate’s efficacy and safety such that it can be used to justify the approval of the product. Generally, pivotal trials are also Phase 3 trials but they may be Phase 2 trials if the trial design provides a reliable assessment of clinical benefit, particularly in situations where there is an unmet medical need. During the development of a new drug, sponsors are given opportunities to meet with the FDA at certain points. These points may be prior to submission of an IND, at the end of Phase 2, and before an NDA is submitted. Meetings at other times may be requested. These meetings can provide an opportunity for the sponsor to share information about the data gathered to date, for the FDA to provide advice, and for the sponsor and the FDA to reach alignment on the next phase of development. Concurrent with clinical trials, companies usually complete additional nonclinical studies and must also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the product and, among other things, the manufacturer must develop methods for testing the identity, strength, quality, and purity of the finished drug product. In addition, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product does not undergo unacceptable deterioration over its shelf life. Disclosure of Clinical Trial Information Sponsors of clinical trials of certain FDA-regulated products, including prescription drugs, are required to register and disclose certain clinical trial information on a public registry maintained by the U.S. National Institutes of Health, or NIH. In particular, information related to the product, patient population, phase of investigation, study sites and investigators 44 Table of Contents and other aspects of the clinical trial is made public as part of the registration of the clinical trial. Competitors may use this publicly available information to gain knowledge regarding the progress of development programs. Although sponsors are also obligated to disclose the results of their clinical trials after completion, disclosure of the results can be delayed in some cases for up to two years after the date of completion of the trial. Failure to timely register a covered clinical study or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government. U.S. Review and Approval Process Assuming successful completion of the required clinical testing, the results of nonclinical studies and clinical trials, along with detailed descriptions of the manufacturing process, analytical tests conducted on the chemistry of the drug, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product. The submission of an NDA is subject to the payment of a substantial user fee, unless a waiver or exemption applies. An annual program fee is also assessed on sponsors of approved prescription drug products. FDA adjusts these user and annual program fees on an annual basis. The FDA conducts a preliminary review of all NDAs within the first 60 days after submission, before accepting them for filing, to determine whether they are sufficiently complete to permit substantive review. The FDA may request additional information rather than accept an NDA for filing. In this event, the NDA must be resubmitted with the additional information. The resubmitted application also is subject to review before the FDA accepts it for filing. Once filed, the FDA reviews an NDA to determine, among other things, whether a product is safe and effective for its intended use and whether it is being manufactured in accordance with cGMP requirements to assure and preserve the product’s identity, strength, quality, and purity. Under the Prescription Drug User Fee Act, or PDUFA, policies that are currently in effect, the FDA has a goal of ten months from the filing date to complete its initial review of a standard application for a drug that is a new molecular entity, and six months from the filing date for an NDA that has been granted priority review. The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification and the sponsor’s process to respond to such inquiries. The FDA likely will re-analyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the review process. The FDA also may require the development of a risk evaluation and mitigation strategy, or REMS, if it determines that a REMS is necessary to ensure that the benefits of the drug outweigh its risks and to assure the safe use of the product. The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS. The FDA will not approve the NDA without an approved REMS, if required. A REMS can include medication guides, physician communication plans, and/or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. The FDA may refer an application for a novel drug to an advisory committee. An advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making product approval and risk mitigation decisions. Before approving an NDA, the FDA will typically inspect the facility or facilities where the product is manufactured. The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, the FDA may inspect one or more clinical trial sites to assure that the clinical trials were conducted in compliance with GCP regulations and to assure the integrity of the clinical data submitted to the FDA. To ensure cGMP and GCP compliance by its employees and third-party contractors, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production and quality control. After the FDA completes its evaluation of the NDA and any inspections or advisory committee consultations, the agency will issue either an approval letter or a Complete Response Letter, or CRL, to the NDA applicant. An approval letter authorizes commercial marketing of the drug for specific indications for use. A CRL indicates that the review cycle of the application is complete, and the application will not be approved in its present form. A CRL usually describes the specific deficiencies in the NDA identified by the FDA. Such deficiencies may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical trials or other significant and time-consuming requirements related to 45 Table of Contents nonclinical studies or manufacturing. If a CRL is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies that the FDA has identified in the letter, or withdraw the application. If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the NDA, the agency will issue an approval letter to the applicant. The FDA has committed to reviewing such resubmissions in response to an issued CRL in either two or six months depending on the type of information included. Even if such additional data and information are submitted, however, the FDA may ultimately decide that the NDA does not satisfy the regulatory criteria for approval. If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product. In addition, the FDA may require a sponsor to conduct Phase 4 testing, which involves clinical trials designed to further assess a drug’s safety and effectiveness after NDA approval, and may require testing and surveillance programs to monitor the safety of approved products which have been commercialized. The FDA may also place other conditions on approval including the requirement for a risk evaluation and mitigation strategy, or REMS, to assure the safe use of the drug. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. In addition, the Pediatric Research Equity Act, or PREA, requires a sponsor to conduct pediatric clinical trials for most drugs; specifically, in relation to applications for a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration. Under PREA, original NDAs and supplements thereto must contain a pediatric assessment unless the sponsor has received a deferral or waiver. Sponsors must also submit Pediatric Study Plans, or PSPs, to the agency for review within sixty days of an end-of-Phase 2 meeting or, if there is no such meeting, as early as practicable before the initiation of the Phase 3 or Phase 2/3 clinical trial. The initial PSP must include an outline of the pediatric trial or trials that the sponsor plans to conduct, including trial objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric trials along with supporting information. The FDA and the sponsor must reach an agreement on the PSP. A sponsor can submit amendments to an agreed upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from nonclinical studies, early phase clinical trials or other clinical development programs. The required assessment must evaluate the safety and effectiveness of the product for the claimed indications in all relevant pediatric subpopulations and support dosing and administration for each pediatric subpopulation for which the product is safe and effective, unless a waiver or deferral has been granted. The FDA may defer, on its own initiative or upon the sponsor’s request, submission of the pediatric assessments for some or all pediatric subpopulations until a specified date after approval. A deferral may be granted for several reasons, including a finding that the drug is ready for approval for use in adults before pediatric clinical trials are complete or that additional safety or effectiveness data needs to be collected before the pediatric clinical trials begin. The FDA must send a PREA non-compliance letter to any sponsor that fails to submit the required assessment, fails to keep a deferral current or fails to submit a request for approval of a pediatric formulation. The agency publicly posts such PREA non-compliance letters and sponsor’s response. Fast Track, Breakthrough Therapy, Priority Review Designations The FDA offers a number of programs intended to expedite the development or review of a marketing application for an investigational drug. For example, the Fast Track designation program is intended to expedite or facilitate the process for developing and reviewing product candidates that are intended to treat a serious or life-threatening disease or condition and demonstrate the potential to address unmet medical needs for the disease or condition. Fast Track designation applies to the combination of the product candidate and the specific indication for which it is being studied. The sponsor of a Fast Track product candidate has opportunities for more frequent interactions with the applicable FDA review team during development and, once an NDA is submitted, the application may be eligible for priority review. An NDA for a Fast Track product candidate may also be eligible for rolling review, where the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, the FDA agrees to accept sections of the NDA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the NDA. A product candidate intended to treat a serious or life-threatening disease or condition may also be eligible for Breakthrough Therapy designation to expedite its development and review. A product candidate can receive Breakthrough Therapy designation if preliminary clinical evidence indicates that the product candidate, alone or in combination with one or more other drugs, may demonstrate substantial improvement over existing therapies on one or more clinically significant 46 Table of Contents endpoints, such as substantial treatment effects observed early in clinical development. The designation includes all of the Fast Track program features, as well as more intensive FDA interaction and guidance beginning as early as Phase 1 and an organizational commitment to expedite the development and review of the product candidate, including involvement of senior managers. In addition, an NDA may be eligible for priority review if the product candidate is designed to treat a serious condition, and if approved, would provide a significant improvement in safety or efficacy compared to available therapies for such disease or condition. The FDA will attempt to direct additional resources to the evaluation of a NDA designated for priority review in an effort to facilitate the review. For new-molecular-entity NDAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date, as compared to ten months for review of new-molecular-entity NDAs under its current PDUFA review goals. Fast Track designation, Breakthrough Therapy designation, and priority review do not change the standards for approval, but they may expedite the development or approval process. Even if a product candidate qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened. Post-Approval Requirements Following approval of a new drug, the manufacturer and the approved product are subject to pervasive and continuing regulation by the FDA, including, among other things, requirements relating to monitoring and record-keeping, reporting of adverse experiences with the product, periodic reporting, product sampling and distribution, and advertising and promotion of the product. After approval, most changes to the approved product, such as adding new indications, certain manufacturing changes and additional labeling claims, are subject to further FDA review and approval. Certain modifications may require the NDA sponsor to develop additional data or conduct additional nonclinical studies and clinical trials. There also are continuing, annual program fees for any marketed products. Drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with the FDA and certain state agencies, and are subject to periodic unannounced inspections by the FDA and certain state agencies to assess compliance with cGMP requirements and other laws. The cGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged products. In addition, changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP requirements and impose reporting requirements on the NDA applicant and any third-party manufacturers involved in producing the approved drug product. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain compliance with cGMPs and other aspects of quality control and quality assurance. The FDA may withdraw approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of requirements for post-market studies or clinical studies to assess new safety risks; or imposition of distribution restrictions or other restrictions under a REMS. Other potential consequences include, among other things: • restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls; • mandated modification of promotional materials or labeling and the issuance of corrective information; • the issuance of safety alerts, Dear Healthcare Provider letters, press releases and other communications containing warnings or other safety information about the product; • fines, warning letters, or untitled letters; • clinical holds on ongoing or planned clinical studies; 47 Table of Contents • refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of product approvals; • product seizure or detention, or refusal to permit the import or export of products; • consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs; or • injunctions or the imposition of civil or criminal penalties. The FDA closely regulates the marketing, labeling, advertising and promotion of prescription drug products following approval. A company can make only those claims relating to safety and efficacy that are approved by the FDA and in accordance with the provisions of the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, e.g., unapproved uses or unapproved patient populations. Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil and criminal penalties. Although physicians may prescribe, in their independent professional medical judgment, legally available products for uses that are not described in the product’s labeling and that differ from those tested by us and approved by the FDA, manufacturers may not market or promote such uses. Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances. The FDA does not regulate the behavior of physicians in their choice of treatments. Manufacturers may also share truthful and not misleading information about their products that is otherwise consistent with a product’s FDA-approved labeling, which helps to support well-informed clinical decision-making by physicians and other health care professionals. In addition, national distribution of pharmaceutical products is subject to the Drug Supply Chain Security Act. Marketing and Data Exclusivity Orange Book Listing In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims covering the applicant’s product or method of using the product. Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of approval of an ANDA. An ANDA provides for marketing of a drug product that has the same active ingredients in the same strengths and dosage form as the listed drug and has been shown to be bioequivalent to the listed drug. Other than the requirement for bioequivalence testing, ANDA applicants are not required to conduct, or submit results of, nonclinical or clinical tests to prove the safety or effectiveness of their drug product. Drugs approved in this way are commonly referred to as generic equivalents to the listed drug and can often be substituted by pharmacists under prescriptions written for the original listed drug. The ANDA applicant is required to certify to the FDA concerning any patents listed for the approved product in the FDA’s Orange Book. Specifically, the applicant must certify that: (i) the required patent information has not been filed; (ii) the listed patent has expired; (iii) the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or (iv) the listed patent is invalid or will not be infringed by the new product. The ANDA applicant may also elect to submit a Section VIII statement certifying that its proposed ANDA labeling does not contain (or carves out) any language regarding the patented method-of-use rather than certify to a listed method-of-use patent. If the applicant does not challenge the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired. A certification that the new product will not infringe the already approved product’s listed patents, or that such patents are invalid, is called a Paragraph IV certification. If the ANDA applicant has provided a Paragraph IV certification to the FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been received by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days of the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, or a decision in the infringement case that is favorable to the ANDA applicant. An applicant submitting an NDA under Section 505(b)(2) of the FD&C Act, also called a 505(b)(2) NDA, which permits the filing of an NDA where at least some of the information required for approval comes from studies not conducted by, 48 Table of Contents or for, the applicant and for which the applicant has not obtained a right of reference, is required to certify to the FDA regarding any patents listed in the Orange Book for the approved product it references to the same extent that an ANDA applicant would. Exclusivity Regulatory exclusivity provisions under the FDCA can delay the submission or the approval of certain marketing applications that seek to reference an FDA-approved product. The FDCA provides a five-year period of non-patent data exclusivity within the United States to the first applicant to obtain approval of an NDA for a new chemical entity. A drug is a new chemical entity if the FDA has not previously approved any other new drug containing the same active moiety, which is the molecule or ion responsible for the action of the drug substance. During the exclusivity period, the FDA may not accept for review an ANDA, or file a 505(b)(2) NDA, for another version of such drug where the applicant does not own or have a legal right of reference to such data required for approval. However, an application may be submitted after four years if it contains a Paragraph IV certification. The FDCA alternatively provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA, or supplement to an existing NDA, if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application, for example new indications, dosages or strengths of an existing drug. This three-year exclusivity covers only the modification for which the drug received approval on the basis of the new clinical investigations and does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs referencing the approved application for drugs containing the active agent for the original indication or condition of use. Five-year and three-year exclusivity will not delay the submission or approval of a full NDA that does not reference the approved application. However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness. Pediatric exclusivity is another type of marketing exclusivity available in the United States. If granted, pediatric exclusivity provides for the attachment of an additional six months of marketing exclusivity to the term of any existing regulatory exclusivity or listed patents. This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application. A product candidate may be eligible for this six-month period of exclusivity if the NDA sponsor conducts clinical trials in children and submits information requested in writing by the FDA, referred to as a Written Request, relating to the use of the product’s active moiety in children. The issuance of a Written Request does not require the sponsor to undertake the described clinical trials. In addition, the clinical trial data do not need to show the product to be effective in the pediatric population studied; rather, the additional protection is granted if the pediatric clinical trial is deemed to have fairly responded to the FDA’s Written Request. Although the FDA may issue a Written Request for studies on either approved or unapproved indications, it may only do so where it determines that information relating to that use of a product candidate in a pediatric population, or part of the pediatric population, may produce health benefits in that population. Other U.S. Healthcare Laws and Compliance Requirements In the United States, our current and future operations are subject to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, the Centers for Medicare & Medicaid Services, or CMS, other divisions of the U.S. Department of Health and Human Services, or HHS, ( e.g. , the Office of Inspector General, the Office for Civil Rights), the U.S. DOJ and individual U.S. Attorney offices within the DOJ, the Federal Trade Commission, or FTC, and state and local governments. For example, our business practices, including our clinical research program and any future sales, marketing and scientific/educational grant programs may be required to comply with the anti-fraud and abuse laws the false claims laws, transparency requirements, and similar state laws, each as amended, as applicable. The federal Anti-Kickback Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any item or service reimbursable, in whole or in part, under Medicare, Medicaid or other federal healthcare programs. The term remuneration has been interpreted broadly to include anything of value. In addition, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. Rather, if “one purpose” of the remuneration is to induce referrals, the federal Anti-Kickback Statute is violated. The federal Anti-Kickback Statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand and prescribers, purchasers, 49 Table of Contents and formulary managers on the other. There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution. The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor. Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the Anti-Kickback Statute. Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances. Our future practices may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor. The civil monetary penalties statute imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to, among others, a federal healthcare program that the person knows or should know is for a medical or other item or service that was not provided as claimed or is false or fraudulent. The federal false claims laws, including the FCA, impose significant penalties and can be enforced by private citizens through civil qui tam actions, prohibit, any person or entity from, among other things, knowingly presenting, or causing to be presented, a false or fraudulent claim for payment to, or approval by, the federal government, including federal healthcare programs such as Medicare and Medicaid, or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government. A claim includes “any request or demand” for money or property presented to the U.S. government. For instance, historically, pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. Other companies have been prosecuted for causing false claims to be submitted because of the companies’ marketing of the product for unapproved, off-label, and thus generally non-reimbursable, uses. In addition, a claim that includes items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the FCA. The federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, created additional federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under the control or custody of, any healthcare benefit program, including private third-party payors, willfully obstructing a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services. Like the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. In addition, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, imposes certain requirements on covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates and covered subcontractors that receive or obtain protected health information in connection with providing a service on behalf of a covered entity relating to the privacy, security and transmission of individually identifiable health information. Additionally, the federal Physician Payments Sunshine Act, or the Sunshine Act, and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report information annually to CMS related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (such as physician assistants and nurse practitioners), and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members. Failure to report accurately could result in penalties. In addition, many states also govern the reporting of payments or other transfers of value, many which differ from each other in significant ways, are often not pre-empted, and may have a more prohibitive effect than the Sunshine Act, thus further complicating compliance efforts. Also, many states have similar, and typically more prohibitive, fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor. To distribute pharmaceutical products commercially in the future, should FDA approval be granted to any of our product candidates, we must comply with state laws that require the registration of manufacturers and wholesale distributors of drug products in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers or distributors have no place of business within the state. Several states have enacted legislation 50 Table of Contents requiring pharmaceutical and biotechnology companies to establish marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data to pharmaceutical and biotechnology companies for use in sales and marketing, and to prohibit certain other sales and marketing practices. Ensuring business arrangements with third parties comply with applicable healthcare laws and regulations is a costly endeavor. If our operations are found to be in violation of any of the federal and state healthcare laws described above or any other current or future governmental regulations that apply to us, we may be subject to significant penalties, including without limitation, civil, criminal and/or administrative penalties, damages, fines, disgorgement, individual imprisonment, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private “qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow us to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business and our results of operations. Coverage, Pricing, and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any product candidates for which we may obtain regulatory approval. In the United States and markets in other countries, sales of any products for which we receive regulatory approval for commercial sale will depend, in part, on the extent to which third-party payors provide coverage, and establish adequate reimbursement levels for such products. In the United States, third-party payors include federal and state healthcare programs, private managed care providers, health insurers and other organizations. The process for determining whether a third-party payor will provide coverage for a product may be separate from the process for setting the price of a product or for establishing the reimbursement rate that such a payor will pay for the product. Third-party payors may limit coverage to specific products on an approved list, or also known as a formulary, which might not include all of the FDA-approved products for a particular indication. Third-party payors are increasingly challenging the price, examining the medical necessity and reviewing the cost-effectiveness of medical products, therapies and services, in addition to questioning their safety and efficacy. We may need to conduct expensive pharmaco-economic studies to demonstrate the medical necessity and cost-effectiveness of our products, in addition to the costs required to obtain the FDA approvals. Our product candidates may not be considered medically necessary or cost-effective. A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. In addition, one payor’s determination to provide coverage for a product does not ensure that other payors will also provide coverage for the product. Further, obtaining reimbursement for our product may be particularly difficult because of the higher prices often associated with branded drugs and drugs administered under the supervision of physicians. Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development. Under currently applicable U.S. law, certain products not usually self-administered (including injectable drugs) may be eligible for coverage under Medicare through Medicare Part B. Medicare Part B is part of original Medicare, the federal health care program that provides health care benefits to the aged and disabled, and covers outpatient services and supplies, including certain biopharmaceutical products, that are medically necessary to treat a beneficiary’s health condition. As a condition of receiving Medicare Part B reimbursement for a manufacturer’s eligible drugs, the manufacturer is required to participate in other government healthcare programs, including the Medicaid Drug Rebate Program and the 340B Drug Pricing Program. The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with HHS as a condition for states to receive federal matching funds for the manufacturer’s outpatient drugs furnished to Medicaid patients. Under the 340B Drug Pricing Program, the manufacturer must extend discounts to entities that participate in the program. Additionally, the containment of healthcare costs has become a priority of federal, state and foreign governments. For example, HHS imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis. HHS has also been empowered to negotiate the price of certain single-source drugs that have been on the market for at least seven (7) years covered under Medicare as part of the Medicare Drug Price Negotiation Program. Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price 51 Table of Contents Negotiation Program. Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis. Different pricing and reimbursement schemes exist in other countries. In the EU, governments influence the price of pharmaceutical products through their pricing and reimbursement rules and control of national health care systems that fund a large part of the cost of those products to consumers. Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed. To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost-effectiveness of a particular product candidate to currently available therapies. Other EU member states allow companies to fix their own prices for medicines, but monitor and control company profits. In addition, in some countries, cross-border imports from low-priced markets exert commercial pressure on pricing within a country. The marketability of any product candidates for which we receive regulatory approval for commercial sale in any country or region may suffer if the government and third-party payors fail to provide adequate coverage and reimbursement. The downward pressure on the rise in healthcare costs in general and pharmaceutical products in particular has become intense. As a result, in the European Union, increasingly high barriers are being erected to the entry of new products. In the United States, the emphasis on managed care, the increasing influence of health maintenance organizations, and additional legislative changes has increased and we expect will continue to increase the pressure on product pricing. In addition, coverage policies and third-party reimbursement rates may change at any time. Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future. Healthcare Reform in the U.S. and Potential Changes to Healthcare Laws In the United States, there have been, and continue to be, legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities, and affect the profitable sale of product candidates that obtain marketing approval. The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could prevent, limit or delay marketing approval of our product candidate. Moreover, among policy makers and payors in the United States, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. The pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives. The United States and many foreign jurisdictions have enacted or proposed legislative and regulatory changes affecting the healthcare system that could prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our ability to profitably sell any product for which we obtain marketing approval. The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010, or, collectively, the ACA, includes measures that have significantly changed the way healthcare is financed by both governmental and private insurers. There have been judicial, executive and congressional challenges and amendments to certain aspects of the ACA. For example, on July 4, 2025, the One Big Beautiful Bill Act, or the OBBBA, was signed into law, which narrowed access to ACA marketplace exchange enrollment and declined to extend the ACA enhanced advanced premium tax credits that expired at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance. The OBBBA also is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program. Congress is considering proposed legislation intended to further reduce healthcare costs with alternatives to replace the expired ACA subsidies. We expect that additional U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that the U.S. federal government will pay for healthcare products and services, which could result in reduced demand for our product candidates or additional pricing pressures. Other legislative changes have been proposed and adopted in the United States since the ACA was enacted. These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year, which began in 2013 and will remain in effect until 2032 unless additional Congressional action is taken. The current administration is pursuing policies to reduce regulations and expenditures across government agencies including at HHS, the FDA, CMS and related agencies. These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business. For example, the current administration has 52 Table of Contents announced agreements with several pharmaceutical companies that require the drug manufacturers to offer, through a direct-to-consumer platform (TrumpRx), U.S. patients and Medicaid programs prescription drug Most-Favored Nation pricing equal to or lower than those paid in other developed nations, with additional mandates for direct-to-patient discounts and repatriation of foreign revenues. Other recent actions, for example, include (1) directing agencies to reduce agency workforce and cut programs; (2) directing HHS and other agencies to lower prescription drug costs through a variety of initiatives; (3) imposing tariffs on imported pharmaceutical products; and (4) as part of the Make America Healthy Again Commission’s Strategy Report released in September 2025, working across government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising. Additionally, the current administration recently called on Congress to enact "The Great Healthcare Plan," to codify and expand Most-Favored Nation pricing, lower government subsidies to private insurance companies, increase healthcare price transparency, expand pharmaceutical drugs available for over-the-counter purchase, and enact restrictions on pharmacy benefit manager payment methodologies, among other things. These actions and policies may significantly reduce U.S. drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks. In June 2024, the U.S. Supreme Court’s Loper Bright decision greatly reduced judicial deference to regulatory agencies, which could increase successful legal challenges to federal regulations affecting our operations. Congress may introduce and ultimately pass health care related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program. Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. We expect that the healthcare reform measures that have been adopted and may be adopted in the future may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product and could seriously harm our future revenues. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our products, if approved. Foreign Government Regulation To market any product outside of the United States, we would need to comply with numerous and varying regulatory requirements of other countries governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of our products. Whether or not we obtain FDA approval of a product candidate, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries. Approval by one regulatory authority does not ensure approval by regulatory authorities in other jurisdictions. The approval process varies from country to country, can involve additional testing beyond that required by FDA, and may be longer or shorter than that required for FDA approval. The requirements governing the conduct of clinical trials, product licensing, pricing, promotion, and reimbursement vary greatly from country to country. Failure to comply with applicable foreign regulatory requirements, may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution. Clinical Trials in the EU Similarly to the United States, the various phases of non-clinical and clinical research in the European Union, or EU are subject to significant regulatory controls. Non-clinical studies are performed to demonstrate the health or environmental safety of new chemical or biological substances. Non-clinical studies must be conducted in compliance with the principles of good laboratory practice, GLP, as set forth in Directive 2004/10/EC. These GLP standards reflect the Organization for Economic Co-operation and Development requirements. 53 Table of Contents Clinical trials of medicinal products in the EU must be conducted in accordance with the Clinical Trials Regulation (EU) No 536/2014, and national regulations and the International Conference on Harmonization, guidelines on GCPs, as well as the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki. EU Review and Approval process In the EU, medicinal products can only be commercialized after a related marketing authorization, or MA, has been granted. To obtain an MA for a product in the EU, an applicant must submit a Marketing Authorization Application, or MAA, either under a centralized procedure administered by the European Medicines Agency, or EMA, or one of the procedures administered by the competent authorities of EU Member States (decentralized procedure, national procedure or mutual recognition procedure). An MA may be granted only to an applicant established in the EU. The centralized procedure provides for the grant of a single MA by the European Commission that is valid throughout the EEA (which is comprised of the 27 EU Member States plus Norway, Iceland and Liechtenstein). Pursuant to Regulation (EC) No 726/2004, the centralized procedure is compulsory for specific products, including for (i) medicinal products derived from biotechnological processes, (ii) products designated as orphan medicinal products, (iii) advanced therapy medicinal products, or ATMPs, and (iv) products with a new active substance indicated for the treatment of HIV/AIDS, cancer, neurodegenerative diseases, diabetes, auto-immune and other immune dysfunctions and viral diseases. For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, authorization through the centralized procedure is optional on related approval. Under the centralized procedure, the EMA’s Committee for Medicinal Products for Human Use, or CHMP, conducts the initial assessment of a product. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing MA. The maximum timeframe for the evaluation of an MAA under the centralized procedure is 210 days, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. The decentralized MA procedure requires a separate application to, and leads to separate approval by, the competent authorities of each EU Member State in which the product is to be marketed. This application is identical to the application that would be submitted to the EMA for authorization through the centralized procedure. The reference EU Member State prepares a draft assessment and drafts of the related materials within 120 days after receipt of a valid application. The resulting assessment report is submitted to the concerned EU Member States who, within 90 days of receipt, must decide whether to approve the assessment report and related materials. If a concerned EU Member State cannot approve the assessment report and related materials due to concerns relating to a potential serious risk to public health, disputed elements may be referred to the Heads of Medicines Agencies’ Coordination Group for Mutual Recognition and Decentralised Procedures—Human, or CMDh, for review. The subsequent decision of the European Commission is binding on all EU Member States. The mutual recognition procedure allows companies that have a medicinal product already authorized in one EU Member State to apply for this authorization to be recognized by the competent authorities in other EU Member States. Like the decentralized procedure, the mutual recognition procedure is based on the acceptance by the competent authorities of the EU Member States of the MA of a medicinal product by the competent authorities of other EU Member States. The holder of a national MA may submit an application to the competent authority of an EU Member State requesting that this authority recognize the MA delivered by the competent authority of another EU Member State. An MA has, in principle, an initial validity of five years. The MA may be renewed after five years on the basis of a re-evaluation of the risk-benefit balance by the EMA or by the competent authority of the EU Member State in which the original MA was granted. To support the application, the MA holder must provide the EMA or the competent authority with a consolidated version of the Common Technical Document providing up-to-date data concerning the quality, safety and efficacy of the product, including all variations introduced since the MA was granted, at least nine months before the MA ceases to be valid. The European Commission or the competent authorities of the EU Member States may decide on justified grounds relating to pharmacovigilance, to proceed with one further five year renewal period for the MA. Once subsequently definitively renewed, the MA shall be valid for an unlimited period. Any authorization which is not followed by the actual placing of the medicinal product on the EU market (for a centralized MA) or on the market of the authorizing EU Member State within three years after authorization ceases to be valid (the so-called sunset clause). 54 Table of Contents Accelerated and Abbreviated Pathways in the EU Innovative products that target an unmet medical need and are expected to be of major public health interest may be eligible for a number of expedited development and review programs, such as the Priority Medicines, or PRIME, scheme, which provides incentives similar to the breakthrough therapy designation in the U.S. PRIME is a voluntary scheme aimed at enhancing the EMA’s support for the development of medicinal products that target unmet medical needs. Eligible products must target conditions for which there is an unmet medical need (there is no satisfactory method of diagnosis, prevention or treatment in the EU or, if there is, the new medicinal product will bring a major therapeutic advantage) and they must demonstrate the potential to address the unmet medical need by introducing new methods of therapy or improving existing ones. Benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and potentially accelerated MAA assessment once a dossier has been submitted. Accelerated assessment may be granted by the CHMP in exceptional cases, when a medicinal product targeting an unmet medical need is expected to be of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation. If the CHMP accepts a request for accelerated assessment, the time limit of 210 days will be reduced to 150 days (excluding clock stops). The CHMP can, however, revert to the standard time limit for the centralized procedure if it considers that it is no longer appropriate to conduct an accelerated assessment. In the EU, a “conditional” MA may be granted in cases where all the required safety and efficacy data are not yet available. The European Commission may grant a conditional MA for a medicinal product if it is demonstrated that all of the following criteria are met: (i) the benefit-risk balance of the medicinal product is positive; (ii) it is likely that the applicant will be able to provide comprehensive data post-authorization; (iii) the medicinal product fulfils an unmet medical need; and (iv) the benefit of the immediate availability to patients of the medicinal product is greater than the risk inherent in the fact that additional data are still required. The conditional MA is subject to conditions to be fulfilled for generating the missing data or ensuring increased safety measures. It is valid for one year and must be renewed annually until all related conditions have been fulfilled. Once any pending studies are provided, the conditional MA can be converted into a traditional MA. However, if the conditions are not fulfilled within the timeframe set by the EMA and approved by the European Commission, the MA will cease to be renewed. An MA may also be granted “under exceptional circumstances” where the applicant can show that it is unable to provide comprehensive data on efficacy and safety under normal conditions of use even after the product has been authorized and subject to specific procedures being introduced. These circumstances may arise in particular when the intended indications are very rare and, in the state of scientific knowledge at that time, it is not possible to provide comprehensive information, or when generating data may be contrary to generally accepted ethical principles. Like a conditional MA, an MA granted in exceptional circumstances is reserved to medicinal products intended to be authorized for treatment of rare diseases or unmet medical needs for which the applicant does not hold a complete data set that is required for the grant of a standard MA. However, unlike the conditional MA, an applicant for authorization in exceptional circumstances is not subsequently required to provide the missing data. Although the MA “under exceptional circumstances” is granted definitively, the risk-benefit balance of the medicinal product is reviewed annually, and the MA will be withdrawn if the risk-benefit ratio is no longer favorable. Pediatric Development In the EU, Regulation (EC) No 1901/2006 provides that all MAAs for new medicinal products have to include the results of trials conducted in the pediatric population, in compliance with a pediatric investigation plan, or PIP, agreed with the EMA’s Pediatric Committee, or PDCO. The PIP sets out the timing and measures proposed to generate data to support a pediatric indication of the medicinal product for which MA is being sought. The PDCO can grant a deferral of the obligation to implement some or all of the measures provided in the PIP until there are sufficient data to demonstrate the efficacy and safety of the product in adults. Further, the obligation to provide pediatric clinical trial data can be waived by the PDCO when these data are not needed or appropriate because the product is likely to be ineffective or unsafe in children, the disease or condition for which the product is intended occurs only in adult populations, or when the product does not represent a significant therapeutic benefit over existing treatments for pediatric patients. Once the MA is obtained in all EU Member States and study results are included in the product information, even when negative, the product is eligible for a six-month extension to the Supplementary Protection Certificate, or SPC, if any is in effect at the time of authorization or, in the case of orphan medicinal products, a two-year extension of orphan market exclusivity. 55 Table of Contents Data and Market Exclusivity in the EU The EU provides opportunities for data and market exclusivity related to MAs. Upon receiving an MA, innovative medicinal products are generally entitled to receive eight years of data exclusivity and 10 years of market exclusivity. Data exclusivity, if granted, prevents regulatory authorities in the EU from referencing the innovator’s data to assess a generic application or biosimilar application for eight years from the date of authorization of the innovative product, after which a generic or biosimilar MAA can be submitted, and the innovator’s data may be referenced. The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU until 10 years have elapsed from the initial MA of the reference product in the EU. The overall ten-year period may, occasionally, be extended for a further year to a maximum of 11 years if, during the first eight years of those ten years, the MA holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are held to bring a significant clinical benefit in comparison with existing therapies. However, there is no guarantee that a product will be considered by the EU’s regulatory authorities to be a new chemical/biological entity, and products may not qualify for data exclusivity. In April 2023, the European Commission issued a proposal to revise and replace the existing general pharmaceutical legislation, which was supported in large part by the European Parliament in April 2024. Additional procedural steps remain in the European legislative process and the proposed legislation is not expected to be adopted until at least 2026. If adopted and implemented as currently proposed, these legislative revisions will significantly change several aspects of drug development and approval in the EU. Post-authorization Requirements in the EU Where an MA is granted in relation to a medicinal product in the EU, the holder of the MA is required to comply with a range of regulatory requirements applicable to the manufacturing, marketing, promotion and sale of medicinal products. Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the European Commission and/or the competent regulatory authorities of the individual EU Member States. The holder of an MA must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance who is responsible for oversight of that system. Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports, or PSURs. All new MAAs must include a risk management plan, or RMP, describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product. The regulatory authorities may also impose specific obligations as a condition of the MA. Such risk- minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies. In the EU, the advertising and promotion of medicinal products are subject to both EU and EU Member States’ laws governing promotion of medicinal products, interactions with physicians and other healthcare professionals, misleading and comparative advertising and unfair commercial practices. General requirements for advertising and promotion of medicinal products, such as direct-to-consumer advertising of prescription medicinal products are established in EU law. However, the details are governed by regulations in individual EU Member States and can differ from one country to another. Interactions between pharmaceutical companies and health care professionals are also governed by strict laws, such as national anti-bribery laws of European countries, national sunshine rules, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct. Pricing, Coverage and Reimbursement in the EU In the EU, pricing and reimbursement schemes vary widely from country to country. For example, some countries provide that products may be marketed only after an agreement on reimbursement price has been reached. Such pricing negotiations with governmental authorities can take considerable time after receipt of marketing approval for a product. Political, economic and regulatory developments may further complicate pricing negotiations, and pricing negotiations may continue after reimbursement has been obtained. In addition, the EU provides options for its Member States to restrict the range of products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. EU Member States may approve a specific price for a product, may adopt a system of direct or indirect controls on the profitability of the company placing the product on the market. Other EU Member States allow companies to fix their own prices for products but monitor and control prescription volumes and issue guidance to 56 Table of Contents physicians to limit prescriptions. In addition, some EU Member States may require the completion of additional studies that compare the cost-effectiveness of a particular medicinal product candidate to currently available therapies. This Health Technology Assessment, or HTA, process is the procedure according to which the assessment of the public health impact, therapeutic impact and the economic and societal impact of use of a given medicinal product in the national healthcare systems of the individual country is conducted. The outcome of HTA regarding specific medicinal products will often influence the pricing and reimbursement status granted to these medicinal products by the competent authorities of individual EU Member States. The Foreign Corrupt Practices Act The FCPA prohibits any U.S. individual or business from paying, offering, or authorizing payment or offering of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the foreign entity to assist the individual or business in obtaining or retaining business. United States authorities that enforce the FCPA, including the DOJ, deem most health care professionals and other employees of foreign hospitals, clinics, research facilities and medical schools in countries with public health care or public education systems to be “foreign officials” under the FCPA. The FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring the company to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system of internal accounting controls for international operations. Additional Regulation In addition to the foregoing, state, federal, and foreign laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business. These and other laws govern our use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations. If our operations result in contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines. We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations. Data Privacy and Security Numerous state, federal, and foreign laws, regulations, standards, and other obligations govern the collection, use, access to, confidentiality, security, and other processing of personal information, including clinical trial data, and apply, or could apply in the future, to our operations or the operations of our partners. In the United States, numerous federal and state laws and regulations, including data breach notification laws, health information privacy and security laws, and consumer protection laws and regulations, govern the collection, use, disclosure, protection, and other processing of personal information. Further, as we collect personal data from individuals outside of the United States, through clinical trials or otherwise, we are and could become subject to foreign laws, such as the GDPR, which govern the privacy and security of personal data, including health-related data. Our use of artificial intelligence (including machine learning) may also be subject to evolving laws and regulations, including those related to controlling for data bias and anti-discrimination. Privacy and security laws, regulations and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in investigations, proceedings, or actions that may lead to significant civil and/or criminal penalties and restrictions on data processing. Employees and Human Capital Resources As of December 31, 2025, we had 27 total full-time employees. Of our 27 employees, three hold Ph.D. and/or M.D. degrees and 15 were engaged in research and development. None of our employees are subject to a collective bargaining agreement. We consider our relationship with our employees to be good. We recognize that our continued ability to attract, retain, and motivate exceptional employees is vital to ensuring our long-term competitive advantage. Our employees are critical to our long-term success and are essential to helping us meet our goals. Our human capital resources objectives include, as applicable, identifying, recruiting, retaining, incentivizing, and integrating our existing and additional employees. The principal purposes of our equity incentive plans are to attract, retain, 57 Table of Contents and motivate selected employees, consultants, and directors through the granting of stock-based compensation awards and cash-based performance bonus awards. Properties and Facilities Our principal office is located at One Pennsylvania Plaza, Suite 1025, New York, NY 10119, where we lease approximately 8,900 square feet of office space under a lease that will expire in 2032. In November 2025, we entered into an amendment of the lease for an additional 4,600 square feet of office space that will commence upon the delivery of the additional space in 2026 and will expire in 2032. We believe that our existing facility and the expansion are adequate to meet our current needs, and that suitable additional alternative spaces will be available in the future on commercially reasonable terms. Corporate Information We were incorporated under the laws of the State of Delaware in September 2015 under the name “LB Pharmaceuticals Inc.” Our principal executive office is located at One Pennsylvania Plaza, Suite 1025, New York, NY 10119. Our telephone number is (212) 605-0300. We completed our initial public offering in September 2025 and our common stock is listed on the Nasdaq Global Market under the symbol “LBRX.” Available Information Our website address is lbpharma.us and our investor relations website address is https://ir.lbpharma.us. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Exchange Act are available free of charge on our investor relations website as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. The SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC’s website is www.sec.gov. Further corporate governance information, including our corporate governance guidelines and board committee charters, is also available on our investor relations website under the heading “Corporate Governance.” The contents of our websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 58 Table of Contents RISK FACTORS SUMMARY Our business is subject to numerous risks and uncertainties and are subject to change based on various factors, including those highlighted in the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. These risks include, but are not limited to, the following: • We are a clinical-stage biopharmaceutical company with a limited operating history and no history of commercializing products, which may make it difficult to evaluate our approach to the discovery and development of our product candidate and the prospects for our future viability. • We have incurred substantial losses since our inception. We anticipate incurring substantial and increasing losses for the foreseeable future and may never achieve or maintain profitability. • We will require substantial additional financing to achieve our goals, and failure to obtain additional capital when needed, or on acceptable terms to us, could cause us to delay, limit, reduce, or terminate our product development or future commercialization efforts. • We have concentrated our research and development efforts on the treatment of psychiatric and neurological conditions, a field that faces certain challenges in drug development. • The obligations from our royalty agreements may be a drain on our cash resources or may cause us to incur debt obligations to satisfy the payment obligations. • Preclinical and clinical development involves a lengthy and expensive process, with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial or real-world results. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our current product candidate or any future product candidates. • Even if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming, and uncertain and may prevent us or any future collaboration partners from obtaining approvals for the commercialization of our product candidate. • Even if our product candidate receives regulatory approval, it may fail to achieve the degree of market acceptance by physicians, patients, and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or become profitable. • The successful commercialization of our product candidate, if approved, will depend in part on the extent to which governmental authorities and health insurers establish coverage, adequate reimbursement levels, and favorable pricing policies. Failure to obtain or maintain coverage and adequate reimbursement for our product candidate could limit our ability to market those products and decrease our ability to generate revenue. • Our business depends on the success of our product candidate. If we are ultimately unable to successfully commercialize our product candidate, or experience significant delays in doing so, our business will be materially harmed. • We rely on, and intend to continue to rely on, our internal clinical development expertise to conduct our current and future clinical trials. This model includes internal teams and systems as well as external vendors and CROs to comprise a full clinical trial team. If our clinical trial team does not comply with applicable regulatory requirements, meet expected deadlines, or run trials effectively, our development programs and our ability to seek or obtain regulatory approval for or commercialize our product candidate may be delayed. • Competitive products may reduce or eliminate the commercial opportunity for our product candidate for our current or future indications. If our competitors develop technologies or product candidates more rapidly than we do, or their technologies are more effective or safer than ours, our ability to develop and successfully commercialize our current products may be adversely affected. • We are dependent on the services of our management and other clinical and scientific personnel, and if we are not able to retain these individuals or recruit additional management or clinical and scientific personnel, our business will suffer. 59 Table of Contents • If we are unable to obtain and maintain sufficient intellectual property protection for our technologies, and product candidate and any future product candidates we may develop, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors or other third parties could develop and commercialize products similar or identical to ours, and our ability to successfully develop and commercialize our product candidate may be adversely affected. • Patent terms may be inadequate to protect our competitive position on our product candidate for a sufficient amount of time. • We rely on third-party manufacturers and suppliers to supply our product candidate. The loss of our third-party manufacturers or suppliers, or their failure to comply with applicable regulatory requirements or to supply sufficient quantities at acceptable quality levels or prices, within acceptable timeframes, or at all, would materially and adversely affect our business. The material and other risks summarized above should be read together with the text of the full risk factors and in the other information set forth in this Annual Report on Form 10-K, including our condensed financial statements and the related notes, as well as in other documents that we file with the SEC. If any such material and other risks and uncertainties actually occur, our business, prospects, financial condition and results of operations could be materially and adversely affected. The risks summarized above or described in full are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial may also materially adversely affect our business, prospects, financial condition and results of operations. 60 Table of Contents Item 1A. Ri sk Factors. Investing in our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this Annual Report on Form 10-K, including our financial statements and their related notes included elsewhere herein and the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” before making an investment decision. If any of the following risks actually occurs, our business, prospects, operating results, and financial condition could suffer materially, the trading price of our common stock could decline, and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial also may materially and adversely affect our business, prospects, operating results, and financial condition. Risks Related to Our Limited Operating History, Financial Position, and Need for Capital We are a clinical-stage biopharmaceutical company with a limited operating history and no history of commercializing products, which may make it difficult to evaluate our approach to the discovery and development of our product candidate and the prospects for our future viability. We are a clinical-stage biopharmaceutical company with a limited operating history. We were formed in 2015 and our operations to date have been limited to organizing, staffing, and financing our company, conducting research and development activities, conducting clinical trials for our product candidate, and establishing our intellectual property portfolio. If we are successful in achieving regulatory approval for our product candidate in the future, we will eventually need to transition from a company with a development focus to a company capable of supporting commercial activities. We may not be successful in such a transition. Our approach to the discovery and development of our product candidate is unproven, and we do not know whether we will be able to develop any product candidate that succeeds in clinical development or products of commercial value. Moreover, as an organization, we have not yet demonstrated an ability to obtain regulatory approvals, manufacture a commercial-scale product or arrange for a third party to do so on our behalf, conduct sales and marketing activities necessary for successful product commercialization, or generate revenues. We may encounter unforeseen expenses, difficulties, complications, delays, and other known or unknown factors in achieving our business objectives. Accordingly, you should consider our prospects in light of the costs, uncertainties, delays, and difficulties frequently encountered by companies in clinical development, especially clinical-stage biopharmaceutical companies such as ours. Any predictions you make about our future success or viability may not be as accurate as they could be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products. We have incurred substantial losses since our inception. We anticipate incurring substantial and increasing losses for the foreseeable future and may never achieve or maintain profitability. Investment in biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant risk that any potential product candidate will fail to demonstrate adequate efficacy or an acceptable safety profile, gain regulatory approval, and become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales to date. As a result, we are not profitable, have incurred substantial losses in each period since our inception, and we expect to incur significant losses for the foreseeable future. For the year ended December 31, 2025, our net loss was approximately $25.2 million. As of December 31, 2025, we had an accumulated deficit of approximately $129.5 million. Substantially all of our losses have resulted from expenses incurred in connection with the development of our pipeline, research and development, clinical trial costs, and from general and administrative costs associated with our operations. We expect to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our development of our product candidate. We anticipate that our expenses will increase substantially if, and as, we: • conduct further clinical trials for LB-102 in patients with schizophrenia and bipolar depression, and initiate clinical development of LB-102 in adjunctive MDD, and other neuropsychiatric indications, and advance our preclinical programs into the clinic; 61 Table of Contents • identify additional product candidates and acquire rights from third parties to those product candidates through licenses or other acquisitions, and conduct development activities, including preclinical studies and clinical trials; • procure the manufacturing of preclinical, clinical, and commercial supply of our current and future product candidates; • seek regulatory approvals for our product candidate or any future product candidates; • commercialize our current product candidate or any future product candidates, if approved; • take steps toward our goal of being an integrated biopharmaceutical company capable of supporting commercial activities, including establishing sales, marketing and distribution infrastructure; • attract, hire, and retain qualified clinical, scientific, operations, and management personnel; • add and maintain operational, financial, and information management systems; • protect, maintain, enforce, and defend our rights in our intellectual property portfolio; • defend against third-party interference, infringement, and other intellectual property claims, if any; • address any competing therapies and market developments; • experience any delays in our preclinical studies or clinical trials and regulatory approval for our product candidate due to macroeconomic conditions, geopolitical conflicts, or other global events, including any health epidemics and their residual effects; and • incur additional costs, including legal, accounting, and other expenses, associated with operating as a public company. We have no product candidates approved for commercial sale and have not generated any revenue from the sale of products. Our ability to become and remain profitable depends on our ability to generate revenue. We do not expect to generate significant revenue, if any, unless and until we, either alone or with a collaborator, are able to obtain regulatory approval for, and successfully commercialize, our product candidate for its initial and potential additional indications, or any other product candidates we may develop in the future. Successful commercialization will require achievement of many key milestones, including demonstrating each product candidate’s safety and efficacy in clinical trials, obtaining regulatory approval for these product candidates, manufacturing, marketing, and selling those products for which we, or any of our future collaborators, may obtain regulatory approval, satisfying any post-marketing requirements, and obtaining reimbursement for our products from private insurance or government payors. Because of the uncertainties and risks associated with these activities, we are unable to accurately and precisely predict the timing and amount of revenues, the extent of any further losses, or if or when we might achieve profitability. We and any future collaborators may never succeed in these activities and, even if we do, or any future collaborators do, we may never generate revenues that are large enough for us to achieve profitability. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Additionally, our expenses could increase if we are required by the FDA or any comparable foreign regulatory authority to perform clinical trials in addition to those currently expected, or if there are any delays in completing our clinical trials or in the nonclinical or manufacturing-related activities associated with the development of our product candidate. Even if we succeed in commercializing LB-102, we expect to incur substantial development costs and other expenditures to develop and market additional product candidates. We may also encounter unforeseen expenses, difficulties, complications, delays, and other unknown factors that may adversely affect our business. The size of our future net losses will depend, in part, on the rate of future growth of our expenses and our ability to generate revenue or raise additional capital. Our prior losses and expected future losses have had and will continue to have an adverse effect on our stockholders’ equity and our working capital. Our failure to become and remain profitable may depress the market price of our common stock and could impair our ability to raise capital, expand our business, diversify our product offerings, or continue our operations. If we continue to suffer losses as we have in the past, you may not receive any return on your investment and may lose your entire investment. 62 Table of Contents We will require substantial additional financing to achieve our goals, and failure to obtain additional capital when needed, or on acceptable terms to us, could cause us to delay, limit, reduce, or terminate our product development or future commercialization efforts. Our operations have consumed substantial amounts of cash since our inception. We expect to continue to spend substantial amounts of cash to conduct further research and development, preclinical studies, and clinical trials of our current and any future product candidates, to seek regulatory approvals for our product candidate, and to launch and commercialize any products if we receive regulatory approval. As of December 31, 2025, we had $295.2 million of cash, cash equivalents and marketable securities. Based upon our current operating plan, we believe that our existing cash, cash equivalents and marketable securities will enable us to fund our operating expenses and capital expenditure requirements for at least the next 12 months. Our future capital requirements and the period for which our existing resources will support our operations may vary significantly from what we expect, and we will, in any event, require additional capital in order to complete clinical development of our current program. Our monthly spending levels will vary based on new and ongoing development and corporate activities. Because the length of time and activities associated with development of our programs and product candidate are highly uncertain, we are unable to estimate the actual funds we will require for development and any approved marketing and future commercialization activities, if any. Our future capital requirements will depend on many factors, including: • the scope, timing, progress, costs, and results of discovery, preclinical development, and clinical trials for our current or future product candidates; • the number of clinical trials required for regulatory approval of our current or future product candidates, which may differ between the United States and other countries or regions; • the costs, timing, and outcome of regulatory review of any of our current or future product candidates; • the costs associated with acquiring or licensing additional product candidates, technologies, or assets, including the timing and amount of any milestones, royalties, or other payments due in connection with our acquisitions and licenses; • the cost of manufacturing clinical and commercial supplies and any other activities related thereto of our current or future product candidates; • the costs and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights; • our ability to maintain existing, and establish new, strategic collaborations or other arrangements and the financial terms of any such agreements, including the timing and amount of any future milestone, royalty, or other payments due under any such agreement; • the costs and timing of future commercialization activities, including manufacturing, marketing, sales, and distribution, for any product candidate for which we receive marketing approval; • the revenue, if any, received from commercial sales of the product candidate(s) for which we receive marketing approval; • expenses to attract, hire, and retain skilled personnel for us to grow as an organization and achieve our business objectives; • the costs of operating as a public company; • our ability to establish a commercially viable pricing structure and obtain approval for coverage and adequate reimbursement from third-party and government payors for any products that receive marketing approval; • our ability to mitigate the impact of adverse macroeconomic conditions or geopolitical events, including any health epidemics and their residual effects, the ongoing conflicts between Ukraine and Russia, bank failures, or inflation and increased interest rates, on our preclinical and clinical development or operations; • the effect of competing technological and market developments; and • the extent to which we acquire or invest in businesses, products, and technologies. 63 Table of Contents We will require substantial additional capital to achieve our business objectives. Additional funds may not be available on a timely basis, on favorable terms or at all, and such funds, if raised, may not be sufficient to enable us to continue to implement our long-term business strategy. Market volatility resulting from adverse macroeconomic conditions or geopolitical events, including the ongoing war between Ukraine and Russia and unrest in the Middle East, bank failures, inflation, increased interest rates, or other factors, may further adversely impact our ability to access capital as and when needed. Until such time, if ever, as we can generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings, or other capital sources, including potential collaborations, licenses, and other similar arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock. Any future debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, selling or licensing our assets, making capital expenditures, declaring dividends, or encumbering our assets to secure future indebtedness. Such restrictions could adversely impact our ability to conduct our operations and execute our business plan. If we raise additional funds through future collaborations, licenses, and other similar arrangements, we may have to relinquish valuable rights to our future revenue streams or product candidates, or grant licenses on terms that may not be favorable to us and/or that may reduce the value of our common stock. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed or on terms acceptable to us, we would be required to delay, limit, reduce, or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We have concentrated our research and development efforts on the treatment of psychiatric and neurological conditions, a field that faces certain challenges in drug development. We have focused our research and development efforts on the treatment of psychiatric and neurological conditions. Efforts by biotechnology and pharmaceutical companies in this field have faced certain challenges in drug development. In particular, clinical trials focused on many neuroscience diseases, such as schizophrenia, bipolar depression and adjunctive MDD, rely on subjective patient-reported outcomes as key endpoints. This makes these trials more difficult to evaluate than indications with more objective endpoints. Furthermore, these indications are often subject to a higher placebo effect, which may make it more challenging to isolate the beneficial effects of our product candidate. While a product candidate may show clinical activity or therapeutic benefit, a high placebo effect in a clinical trial will make it difficult to ascertain that benefit or to show a statistically significant effect of the product candidate as compared to the control arm, which may ultimately cause a clinical trial to fail or otherwise not translate to actual clinical benefit. Moreover, the risk for this higher placebo effect can increase from successful completion of a Phase 2 trial to a Phase 3 trial, as there is clinical evidence of therapeutic benefit to which patients would already be aware of. There can be no guarantee that we will successfully overcome these challenges in our ongoing or any future clinical trials of our product candidate or that we will not encounter other challenges in the development of our product candidate. In addition, negative investor perception of our clinical trial results due to a high placebo effect may adversely affect our stock price. For example, certain of our primary or secondary endpoints in our clinical trials, including our completed Phase 2 trial of LB-102 in patients with acute schizophrenia, involve subjective assessments by physicians and/or patients, which can increase the uncertainty of clinical trial outcomes. The primary endpoint of our Phase 3 acute schizophrenia trial is to evaluate the efficacy of LB-102 compared to the placebo, as measured by change from baseline in PANSS total score at six weeks, which requires patients and raters to undertake a questionnaire regarding symptoms at protocol specified timepoints in the trial. This and other assessments are inherently subjective, which can increase the variability of clinical results across clinical trials and create a significant degree of uncertainty in determining overall clinical benefit. Accordingly, these subjective assessments can complicate clinical trial design, adversely impact the ability of a study to show a statistically significant improvement, and generally adversely impact a clinical development program by introducing additional uncertainties. The obligations from our royalty agreements may be a drain on our cash resources or may cause us to incur debt obligations to satisfy the payment obligations. In August 2023, contemporaneously with the closing of our Series C financing, we entered into several amended and restated royalty participation agreements, or the Amended and Restated Royalty Agreements, with certain of our existing investors, co-founders, former and current directors, and former and current executive officers, including Zachary Prensky, 64 Table of Contents Andrew Vaino, Ph.D., and Marc Panoff, none of whom were new investors of our Series C preferred stock. We received no consideration as part of the Amended and Restated Royalty Agreements. Pursuant to the Amended and Restated Royalty Agreements, we are obligated to pay royalties to all of the holders in an aggregate amount up to 2.75% of net sales arising from LB-102 worldwide through December 31, 2035. Thereafter, we are obligated to pay royalties to such holders in an aggregate amount up to 3.25% in perpetuity. Net sales are defined in these agreements as the gross payments received on total commercial sales of LB-102 less certain standard deductions, whether received by us or any licensee of LB-102. See the section titled “Royalty Agreements” elsewhere in this Annual Report on Form 10-K for additional information regarding these agreements. In order to satisfy our obligations to make these payments, if and when they are triggered, we may need to issue equity or convertible debt securities that may cause dilution to our stockholders, or we may use our existing cash and cash equivalents or incur debt obligations to satisfy the payment obligations in cash, which may adversely affect our financial position. In addition, these obligations may impede our ability to raise money in future public offerings of debt or equity securities, to obtain a third-party line of credit, or to license, sell or otherwise monetize our rights in LB-102. Risks Related to Product Candidate Development and Commercialization Preclinical and clinical development involves a lengthy and expensive process, with an uncertain outcome, and results of earlier studies and trials may not be predictive of future trial or real-world results. We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our current product candidate or any future product candidates. LB-102 is in clinical development and its risk of failure is high. It is impossible to predict when or if our product candidate will receive regulatory approval. To obtain the requisite regulatory approvals to commercialize our product candidate, we must demonstrate through lengthy, complex, and expensive clinical trials that our product candidate is safe and effective in patient populations for the relevant indication(s) for use. Preclinical and clinical testing can take many years to complete, and its outcome is inherently uncertain. There is typically a high rate of failure of product candidates proceeding through clinical trials, and failure can occur at any time during the preclinical study or clinical trial process, despite promising preclinical or clinical results. The results of preclinical studies and early clinical trials of our product candidate may not be predictive of the results of later-stage clinical trials, and results in one indication may not be predictive of results to be expected for the same product candidate in another indication. Differences in trial design between early-stage clinical trials and later-stage clinical trials make it difficult to extrapolate the results of earlier clinical trials to later clinical trials. A number of companies in the biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or unfavorable safety profiles, notwithstanding promising results in earlier trials. For example, emraclidine was previously being developed by Cerevel Therapeutics Holdings, Inc. for the indication of schizophrenia and ceased development due to, among other reasons, not achieving a statistically significant outcome for the primary endpoint in two completed six-week clinical trials. Moreover, preclinical and clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates achieved promising results have nonetheless failed to obtain marketing approval of such product candidates or, upon commercialization, achieve or maintain positive real-world results. We may be unable to establish clinical endpoints that applicable regulatory authorities would consider clinically meaningful. Commencing any future clinical trials is subject to finalizing the trial protocol and submitting an IND, or amendments to an existing IND to the FDA or a similar application to initiate a clinical study to a comparable foreign regulatory authority. Even after we make our submission, the FDA or comparable foreign regulatory authorities could disagree that we have satisfied their requirements to commence our clinical trials or disagree with our study design, which may require us to complete additional preclinical studies (including additional carcinogenicity studies in animal models) or amend our protocols or impose stricter conditions on the commencement of clinical trials, which may lead to delays and increase the costs of our preclinical and clinical development programs. The FDA also has the authority to require a panel of experts, referred to as an Advisory Committee, to deliberate on the adequacy of the safety and efficacy data to support approval. The opinion of such an Advisory Committee, although not binding on the FDA, could have a significant impact on our ability to obtain approval of our product candidate in the future. Similar decisions may also be made by foreign regulatory authorities and have a similar impact. Most product candidates that commence clinical trials are never approved as commercial products and there can be no assurance that any of our current or future clinical trials will ultimately be successful or support the approval of our current or any future product candidates. 65 Table of Contents We expect to continue to rely on our clinical trial sites and clinical trial teams to ensure the proper and timely conduct of our clinical trials, including the participant enrollment process, and we have limited influence over their performance. In addition, we may in the future enter into collaboration agreements pursuant to which our collaborator would be responsible for clinical development. We or our collaborators may experience delays in initiating or completing clinical trials due to unforeseen events or otherwise, which could delay or prevent our ability to receive marketing approval or commercialize our current and any future product candidates, including: • regulators, such as the FDA or comparable foreign regulatory authorities, Institutional Review Boards, or IRBs, or ethics committees may impose additional requirements before permitting us to initiate a clinical trial, may not authorize us or our investigators to commence or conduct a clinical trial at a prospective trial site, may not allow us to amend trial protocols, or regulators may disagree as to the design or implementation of our clinical trials and require that we modify or amend our clinical trial protocols or statistical analysis plans; • we may experience delays in reaching, or fail to reach, agreement on acceptable terms with contract research organizations, or CROs, or with individual clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among trial sites; • delays in identifying, recruiting, and training suitable clinical investigators; • IRBs refusing to approve, suspending, or terminating the trial at an investigational site, precluding enrollment of additional patients, or withdrawing their approval of the trial; • changes or amendments to the clinical trial protocol; • clinical trial sites may deviate from the trial protocol, fail to ensure the integrity of the data being collected at the site, or drop out of a trial; • failure by any of our third-party contractors to perform in accordance with good clinical practices, or GCP, requirements or applicable regulatory rules and guidelines in other countries; • the number of participants required for clinical trials may be larger than we anticipate, we may experience difficulty in finding and enrolling sufficient qualified patients for our trials, enrollment in clinical trials may be slower than we anticipate, or participants may drop out or fail to return for post-treatment follow-up at a higher rate than we anticipate; • patients may fail to enroll or remain in our trials at the rate we expect, or fail to return for post-treatment follow-up, including patients failing to remain in our trials; • patients choosing an alternative product for the indications for which we are developing our product candidate, or participating in competing clinical trials; • the cost of clinical trials may be greater than we anticipate; • the quality or quantity of data relating to our product candidate or other materials necessary to conduct our clinical trials may be inadequate to initiate or complete a given clinical trial; • we may experience difficulties in manufacturing, or fail to manufacture, sufficient quantities of our product candidate for use in clinical trials; • patients experiencing severe or serious unexpected drug-related adverse effects; • reports from clinical testing conducted by other companies of other therapies in the same class of agents that could be considered similar to our product candidate may raise safety, tolerability, or efficacy concerns about our product candidate; • we may lack adequate funding to initiate or continue one or more of our clinical trials; • a facility manufacturing our product candidate or any of their components being ordered by the FDA or comparable foreign regulatory authorities to temporarily or permanently shut down due to violations of current good manufacturing practice, or cGMP, regulations or other applicable requirements, or cross-contaminations of product candidates in the manufacturing process; • changes to our manufacturing processes may be necessary or desired; 66 Table of Contents • clinical investigators may lose the licenses or permits necessary to perform our clinical trials and may fail to perform our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCPs, or other regulatory requirements; • third-party contractors being unwilling or unable to satisfy their contractual obligations to us in a timely or accurate manner; • third-party contractors could become debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or all of the data produced by such contractors in support of our marketing applications; and • clinical trials of our product candidate may fail to show appropriate safety, tolerability, or efficacy, may produce negative or inconclusive results, or may otherwise fail to improve on the existing standard of care, and we may decide, or regulators may require us, to conduct additional clinical trials or we may decide to abandon product development programs. Clinical trials must be conducted in accordance with the FDA and other applicable regulatory authorities’ legal requirements, regulations, and guidelines, and remain subject to oversight by these governmental agencies as well as ethics committees or IRBs responsible for overseeing the conduct of clinical trials and ensuring the welfare of patients participating in the research. We could encounter delays if a clinical trial is suspended or terminated by us, the IRBs of the institutions in which such trials are being conducted, the FDA or comparable foreign regulatory authorities, or the Data Safety Monitoring Board, for such trial. A suspension or termination may be imposed due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical trial protocols, adverse findings from inspection of the clinical trial operations or trial site by the FDA or comparable foreign regulatory authorities, unforeseen safety issues or adverse side effects, failure to establish or achieve clinically meaningful trial endpoints, changes in governmental regulations or administrative actions, or lack of adequate funding to continue the clinical trial. In addition, changes in regulatory requirements and policies may occur, and we may need to amend clinical trial protocols to comply with these changes. Amendments may require us to resubmit our clinical trial protocols to regulators or to IRBs for reexamination, which may impact the costs, timing, or successful completion of a clinical trial. Clinical trials may also be delayed or terminated as a result of ambiguous or negative interim results. Many of the factors that cause, or lead to, a delay in the commencement or completion of, or the termination or suspension of, clinical trials may also ultimately lead to the denial of regulatory approval of our product candidate. Further, the FDA may disagree with our interpretation of data from clinical trials, or may change the requirements for approval even after it has reviewed and commented on the design for our clinical trials. We may, in the future, conduct preclinical and clinical research in collaboration with other academic, pharmaceutical, and biotechnology entities in which we combine our development efforts with those of our collaborators. Such collaborations may be subject to additional delays because of the management of the trials, contract negotiations, and the need to obtain agreement from multiple parties, which may increase our future costs and expenses. Our product development costs will increase if we experience delays in clinical testing or marketing approvals. We do not know whether any of our clinical trials will begin as planned, will need to be restructured, or will be completed on schedule, or at all. Significant clinical trial delays also could shorten any periods during which we may have the exclusive right to commercialize our product candidate and may allow our competitors to bring products to market before we do, potentially impairing our ability to successfully commercialize our product candidate, if approved. Any delays or increase in costs in our clinical development programs may harm our business, financial condition, results of operations, and prospects. Even if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time-consuming, and uncertain and may prevent us or any future collaboration partners from obtaining approvals for the commercialization of our product candidate. Any product candidate we may develop and the activities associated with their development and commercialization, including their design, testing, manufacture, recordkeeping, labeling, storage, approval, advertising, promotion, import, export, marketing, and distribution, are subject to comprehensive regulation by the FDA and other regulatory authorities in the United States and by comparable foreign regulatory authorities. Failure to obtain marketing approval for a product candidate will prevent us from commercializing the product candidate in a given jurisdiction. We have not received 67 Table of Contents approval to market any product candidates from regulatory authorities in any jurisdiction and none of the product candidates we may seek to develop in the future may ever obtain regulatory approval. We have no experience in filing and supporting the applications necessary to gain marketing approvals. Although we believe that we have the capabilities to conduct preclinical studies and clinical trials and complete these applications using our internal resources and the necessary personnel we intend to hire in the future, we selectively employ and may in the future rely on CRO or 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 the product candidate’s safety and efficacy. The FDA may also not agree with our determination that our Phase 2 acute schizophrenia trial may serve as one of the two pivotal trials required for approval of an NDA in the United States. Securing regulatory approval also requires the submission of information about the product manufacturing process to, and inspection of manufacturing facilities by, the relevant regulatory authority. Any product candidates we develop 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 ability to obtain marketing approval for such product candidates or prevent or limit future commercial use. The process of obtaining marketing approvals, both in the United States and abroad, is expensive, often takes many years following the commencement of clinical trials, 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, as well as the target indications and patient populations. Changes in marketing approval policies during the development period, changes in or the enactment of additional statutes or regulations, or changes in regulatory review for each submitted product application, may cause delays in the approval or rejection of an application. Prior to obtaining approval to commercialize a product candidate in the U.S. or abroad, we must demonstrate with substantial evidence from adequate and well-controlled clinical trials, and to the satisfaction of the FDA or comparable foreign regulatory authorities, that such product candidates are safe and effective for their intended uses. The FDA and comparable foreign regulatory authorities have substantial discretion in the approval process and may delay, limit, or deny approval of a product candidate for many reasons, or may decide that our data are insufficient for approval and require additional preclinical, clinical, or other studies. In addition, varying interpretations of the data obtained from preclinical and clinical testing could delay, limit, or prevent marketing approval of a product candidate. Despite the time and expense invested in clinical development of product candidates, regulatory approval of a product candidate is never guaranteed. Of the large number of drugs in development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized. With respect to foreign markets, approval procedures vary among countries and, in addition to the foregoing risks, may involve additional product testing, administrative review periods, and agreements with pricing authorities. Even if we eventually complete clinical trials and receive approval of an NDA or comparable foreign marketing application for our product candidate, the FDA or comparable foreign regulatory authority may grant approval contingent on the performance of costly additional clinical trials and/or the implementation of REMS, which may be required because the FDA believes it is necessary to ensure safe use of the product after approval. If we experience delays in obtaining approval or if we fail to obtain approval of any product candidates we may develop, the commercial prospects for those product candidates, including for other indications, may be harmed, and our ability to generate revenues will be materially impaired. Even if our product candidate receives regulatory approval, it may fail to achieve the degree of market acceptance by physicians, patients, and others in the medical community necessary for commercial success, in which case we may not generate significant revenues or become profitable. We have never commercialized a product candidate for any indication. Even if our product candidate is approved by the appropriate regulatory authorities for marketing and sale, our product candidate may not gain acceptance among physicians, patients, third-party payors, and others in the medical community. If our product candidate for which we obtain regulatory approval does not gain an adequate level of market acceptance, we may not generate sufficient product revenue or become profitable. Further, the number of patients that our product candidate is designed to treat may be smaller than expected. 68 Table of Contents The degree of market acceptance of our product candidate, if approved and commercialized, will depend on a number of factors, some of which are beyond our control, including: • the pricing and cost-effectiveness of our product candidate, as well as the ease of administration, time burden, and market acceptance; • the safety, efficacy, and tolerability of our product candidate; • acceptance of our approach to precision psychiatry by patients, the medical community, and third-party payors; • changes in the standard of care for targeted indications and the reluctance of physicians to switch their patients’ current standard of care; • the reluctance of patients to switch from their existing therapy regardless of the safety and efficacy of newer products; • the clinical indications for which our product is approved and the scope of efficacy/safety claims that we may make for the product; • any restrictions on the use of our product, and the prevalence and severity of any adverse effects; • any distribution and use restrictions imposed by the FDA as part of a mandatory REMS with respect to such product candidate or to which we agree under a voluntary risk management plan; • the availability of adequate coverage and reimbursement by third parties, such as insurance companies and other healthcare payors, and by government healthcare programs, including Medicare and Medicaid; • the willingness of patients to pay all, or a portion of, out-of-pocket costs associated with our products in the absence of sufficient third-party coverage and adequate reimbursement; • the extent and strength of our marketing and distribution of such product candidate; • the timing of market introduction of such product candidate, as well as competitive products; • our ability to offer our product candidate for sale at competitive prices; • the competitiveness of existing approved therapies; • adverse publicity about our product or favorable publicity about competitive products; and • potential product liability claims. In addition, our lead product candidate, LB-102, is an N -methylated version of amisulpride, a drug already approved in certain parts of Europe for the treatment of schizophrenia, predominantly negative symptoms of schizophrenia and dysthymia. While we are developing LB-102 for acute schizophrenia initially in the United States and potentially in other jurisdictions where amisulpride is not approved, we currently plan to develop LB-102 to treat bipolar depression and adjunctive MDD globally and if there is a recall, safety concern, or adverse regulatory action with respect to amisulpride in Europe, it could prevent us from achieving or maintaining market acceptance of LB-102 or otherwise adversely affect our ability to successfully commercialize LB-102. Furthermore, although LB-102 is structurally similar to amisulpride, which is an approved product in many countries outside of the United States, there can be no assurance that our ongoing and future clinical trials will show similar results with respect to safety and/or efficacy. Our efforts to educate the medical community and third-party payors about the benefits of our product candidate may require significant resources and may never be successful. Even if our product candidate, if approved, is safe and effective for its approved indications, physicians and patients may not immediately be receptive to such product candidate and may be slow to adopt it as an accepted treatment for the approved indications. If our current or future product candidates are approved, but do not achieve an adequate level of acceptance among physicians, patients, and third-party payors, we may not generate meaningful revenue from our product candidate and may never become profitable. We may find it difficult to enroll patients in our clinical trials. If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected. Patient enrollment is a significant factor in the timing of clinical trials, and the timing of our clinical trials depends, in part, on the speed at which we can recruit and enroll patients to participate in our trials, as well as completion of required 69 Table of Contents follow-up periods. We may not be able to initiate or continue clinical trials for our product candidate if we are unable to identify and enroll a sufficient number of eligible patients to participate in these trials to such trial’s conclusion as required by the FDA or comparable foreign regulatory authorities. Patient enrollment is affected by many factors including the size and nature of the patient population, competing clinical trials in the same or similar indications or at the same trial site, the severity of the disease or condition under investigation, the availability and efficacy of approved drugs and diagnostics for the disease or condition under investigation, the number and location of clinical sites, the proximity of patients to clinical sites, willingness of patients to participate in a decentralized clinical trial that may involve remote monitoring technologies, the inclusion and exclusion criteria for the trial, perceived risks and benefits of the product candidate under study, the design of the clinical trial, continued enrollment of prospective patients by clinical trial sites, the risk that enrolled patients will not complete a clinical trial, our ability to recruit clinical trial investigators with the appropriate competencies and experience, efforts to facilitate timely enrollment in clinical trials, patient referral practices of physicians, the ability to monitor patients adequately during and after treatment, competing clinical trials, and clinicians’ and patients’ perceptions as to the potential advantages and risks of the product candidate being studied in relation to other available therapies, including any new products that may be approved for, or any product candidates under investigation for, the indications we are investigating. Clinical trial recruitment and enrollment activities may also be delayed as a result of macro-factors such as public health emergencies or pandemics, natural disasters, acts of terror or war, or staffing shortages. We will be required to identify and enroll a sufficient number of patients for each of our clinical trials. We may not be able to initiate or continue clinical trials if we are unable to locate a sufficient number of eligible patients to participate in the clinical trials required by the FDA or comparable foreign regulatory authorities. In addition, the process of finding eligible patients may prove costly. Historically, clinical trials in acute schizophrenia, bipolar depression, and adjunctive MDD have experienced significant participant withdrawals or discontinuations. There is no guarantee that our estimated withdrawal rate in any of our clinical trials will be accurate, and if we experience a withdrawal rate larger than expected, this may compromise the quality of our data. Withdrawal of participants from our clinical trials, including participants in any control groups, may compromise the quality of our data. Even if we are able to enroll a sufficient number of participants in our clinical trials, we may have difficulty maintaining enrollment of such patients, and delays in enrollment may result in increased costs or may affect the timing or outcome of our clinical trials. Any of these conditions may negatively impact our ability to complete such trials or include results from such trials in regulatory submissions, which could adversely affect our ability to advance the development of our product candidate. Additionally, participants with neuropsychiatric disorders, including schizophrenia, constitute a vulnerable patient population and may withdraw from the clinical trial if they are not experiencing improvement in their underlying disease or condition or if they experience other difficulties or issues relating to their underlying disease or condition or otherwise. Further, other biopharmaceutical companies targeting these same diseases are recruiting clinical trial patients from similar patient populations, which may make it more difficult to fully enroll any clinical trials. Our inability to enroll a sufficient number of patients for any of our future clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether. In addition, we expect to rely on clinical trial sites to ensure proper and timely conduct of our future clinical trials and, while we intend to enter into agreements governing their services, we will have limited influence over their actual performance. We cannot assure you that our assumptions used in determining expected clinical trial timelines are correct or that we will not experience delays in enrollment, which would result in the delay of completion of such trials beyond our expected timelines. Use of our product candidate could be associated with adverse side effects, adverse events, or other safety risks, which could delay or preclude the candidate’s approval, cause us to suspend or discontinue clinical trials, cause us to abandon the product candidate, limit the commercial profile of any future approved product, or result in other significant negative consequences that could severely harm our business, prospects, operating results, and financial condition. Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics related to our product candidate. Undesirable side effects caused by our product candidate could cause us, the IRB, or regulatory authorities to interrupt, delay, or halt clinical trials or cause the delay or denial of regulatory approval by the FDA or comparable foreign regulatory authorities, or, if such product candidate is approved, result in a more restrictive label and other post-approval requirements. Any treatment-related side effects could also affect patient 70 Table of Contents recruitment or the ability of enrolled patients to complete the trial or could result in potential product liability claims. Any of these occurrences may harm our business, financial condition, and prospects significantly. If our product candidate is associated with undesirable side effects or has unexpected characteristics in clinical trials, we may need to interrupt, delay, or abandon their development or limit development to more narrow uses or subpopulations in which the undesirable side effects or other characteristics are less prevalent, less severe, or more acceptable from a risk-benefit perspective. To date, treatment emergent adverse events, or TEAEs, from our Phase 1 and Phase 2 trials were generally mild or moderate. TEAEs included events typically associated with dopamine antagonists. In the Phase 2 trial the most frequently occurring TEAEs were insomnia, headache, anxiety and agitation. Low rates of adverse events associated with EPS and modest increases in QT prolongation were observed. Consistent with other antipsychotics, use of LB-102 resulted in elevated serum prolactin levels, but these elevations were associated with very few adverse events associated with that increase. In our Phase 2 acute schizophrenia trial, 10 participants reported TEAEs leading to withdrawal, including two in each of the placebo and 50 mg cohorts, as well as three in each of the 75 mg and 100 mg cohorts. There were five reported serious adverse events, or SAEs, overall with two SAEs in the placebo cohort (psychotic disorder and death), one SAE in the 50 mg cohort (suicidal ideation—deemed possibly related to treatment), one SAE in the 75 mg cohort (dystonia—deemed possibly related to treatment) and one SAE in the 100 mg cohort (psychotic disorder—deemed not related to treatment). The incidence of TEAEs was similar across groups, with most events being mild or moderate. Patients in our ongoing and planned clinical trials may in the future suffer significant adverse events or other side effects not observed in our preclinical studies or previous clinical trials. Even if such side effects do not preclude the product candidate from obtaining or maintaining regulatory approval, undesirable side effects may inhibit market acceptance due to tolerability concerns as compared to other available therapies. Any of these developments could materially harm our business, financial condition, and prospects. Additionally, if our product candidate receives regulatory approval, and we or others later identify undesirable side effects caused by such product, a number of potentially significant negative consequences could result. For example, the FDA could require us to adopt a Risk Evaluation and Mitigation Strategy, or REMS, to ensure that the benefits of treatment with such product candidate outweigh the risks for each potential patient, which may include, among other things, a communication plan to health care practitioners, patient education, extensive patient monitoring, or distribution systems and processes that are highly controlled, restrictive, and more costly than what is typical for the industry. Other potentially significant negative consequences associated with post-marketing identification of adverse events or other safety risks include: • we may be required to suspend marketing of a product, or we may decide to remove such product from the marketplace; • regulatory authorities may withdraw or modify their approvals of a product; • regulatory authorities may require additional warnings or new contraindications on the label, or may limit access of a product to selective specialized centers with additional safety reporting and with requirements that patients be geographically close to these centers for all or part of their treatment; • we may be required to create a medication guide outlining the risks of a product for patients, or to conduct post-marketing studies; • we may be required to change the way a product is distributed or administered; • we could be subject to fines, injunctions, or the imposition of criminal or civil penalties, or be sued and held liable for harm caused to subjects or patients; and • a product may become less competitive, and our reputation may suffer. In addition, participants with neuropsychiatric disorders, including schizophrenia, bipolar depression and major depressive disorder, constitute a vulnerable patient population, and any adverse side effects or adverse events may be exacerbated in such patient population. Any of these events could diminish the usage or otherwise limit the commercial success of our product candidate and prevent us from achieving or maintaining market acceptance of our product candidate, if approved by the FDA or other regulatory authorities. 71 Table of Contents We have never commercialized a product candidate and may experience delays or unexpected difficulties in obtaining, or fail to obtain, regulatory approval for our product candidate. We have never obtained regulatory approval for, or commercialized, a drug product in the United States or elsewhere. Our clinical trial results may not support regulatory approval. In addition, our product candidate could fail to receive regulatory approval for many reasons, including the following: • the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials, such as our determination that our Phase 2 acute schizophrenia trial may serve as one of the two pivotal trials required for approval of an NDA in the United States; • we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidate is safe and effective for any of their proposed indications; • we may have negative or ambiguous results from our clinical trials, or results may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; • the population studied in the clinical trial may not be sufficiently broad or representative to assure safety in the full population for which we seek approval; • regulatory authorities may not accept clinical data from trials that are conducted at clinical facilities or in countries where the standard of care is potentially different from that of their own country; • serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by individuals using drugs similar to our product candidate; • the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of our product candidate may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of an NDA, or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere, and such authorities may impose requirements for additional preclinical studies or clinical trials; • such authorities may disagree with us regarding the formulation, labeling, and/or release/stability specifications of our product candidate; • approval may be granted only for indications that are significantly more limited than those sought by us, and/or may include significant restrictions on distribution and use; • regulatory authorities may not accept a submission due to, among other reasons, the content or formatting of the submission; and • the FDA or comparable foreign regulatory authorities may find deficiencies in or fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies. In addition, our lead product candidate, LB-102, is an N -methylated version of amisulpride, a drug already approved in certain parts of Europe for the treatment of schizophrenia, predominantly negative symptoms of schizophrenia and dysthymia. While we are developing LB-102 for acute schizophrenia initially in the United States and potentially in other jurisdictions where amisulpride is not approved, we currently plan to develop LB-102 to treat bipolar depression and adjunctive MDD globally and if there is a recall, safety concern, or adverse regulatory action with respect to amisulpride in Europe, it could adversely affect our ability to obtain regulatory approval for LB-102. Finally, the FDA and comparable foreign regulatory authorities may change their approval policies and new regulations may be enacted, which could delay or prevent our ability to obtain approval. If our product candidate fails to achieve regulatory approval due to the above factors, or otherwise, any such failure would adversely affect our business, results of operations, and financial condition. In addition, difficulties in obtaining approval of a product candidate in any of the initial indications for which we are developing it could adversely affect our efforts to seek approval from regulatory authorities for other indications. 72 Table of Contents Interim, “top-line,” and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. From time to time, we may publicly disclose preliminary or top-line data from our preclinical studies and clinical trials, which are based on preliminary analyses of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular preclinical study or clinical trial. We also make assumptions, estimations, calculations, and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data. As a result, the top-line or preliminary results that we report may differ from future results of the same studies or trials, or different conclusions or considerations may qualify such results, once additional data have been received and fully evaluated. Top-line and preliminary data also remain subject to audit and verification procedures that may result in the final data being materially different from the top-line or preliminary data we previously published. As a result, top-line and preliminary data should be viewed with caution until the final data are available. From time to time, we may also disclose interim data from our preclinical studies and clinical trials. Interim data from clinical trials that we may complete are subject to the risk that one or more of the clinical outcomes may materially change as participant enrollment continues and more participant data become available or as participants from our clinical trials continue other treatments for their disease. Adverse differences between interim data and final data could significantly harm our business prospects. Further, others, 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 or product and could adversely affect the success of our business. In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure. If the interim, top-line or preliminary data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidate may be harmed, which could harm our business, financial condition, results of operations, and prospects. Further, disclosure of interim, top-line, or preliminary data by us or by our competitors could result in volatility in the price of our common stock. Furthermore, if we fail to replicate the positive results from our preclinical studies or clinical trials in our future clinical trials, we may be unable to successfully develop, obtain regulatory approval for, and commercialize our current or future product candidates. If we fail to develop and commercialize our current product candidate for additional indications or fail to discover, develop, and commercialize other product candidates, we may be unable to grow our business and our ability to achieve our strategic objectives would be impaired. Although the development and commercialization of our current product candidate for the treatment of schizophrenia, bipolar depression and adjunctive MDD is our primary focus, as part of our longer-term growth strategy, we plan to evaluate our current product candidates in other indications (such as negative symptoms of schizophrenia, Alzheimer’s disease psychosis and agitation, and other neuropsychiatric diseases) and develop other product candidates. We intend to evaluate internal opportunities from our current product candidate or other potential product candidates and also may choose to in-license or acquire other product candidates as well as commercial products to treat patients suffering from other disorders with significant unmet medical needs and limited treatment options. These other potential product candidates will require additional, time-consuming development efforts prior to commercial sale, including preclinical studies, clinical trials, and approval by the FDA and/or comparable foreign regulatory authorities. All product candidates are prone to the risks of failure that are inherent in pharmaceutical product development, including the possibility that the product candidate will not be shown to be sufficiently safe and effective for approval by regulatory authorities. In addition, we cannot assure you that any such products, if approved, will be manufactured or produced economically, successfully commercialized, or widely accepted in the marketplace, or be more effective than other commercially available alternatives. 73 Table of Contents Research programs to identify product candidates require substantial technical, financial, and human resources, whether or not any product candidates are ultimately identified. Our research programs may initially show promise in identifying potential product candidates, yet fail to yield product candidates for clinical development for many reasons, including the following: • the research methodology used may not be successful in identifying potential product candidates; • competitors may develop alternatives that render our product candidate(s) obsolete; • product candidates that we develop may nevertheless be covered by third parties’ patents or other exclusive rights; • a product candidate may, on further study, be shown to have harmful side effects or other characteristics that indicate it is unlikely to be effective or otherwise does not meet applicable regulatory criteria; • a product candidate may not be capable of being produced in commercial quantities at an acceptable cost, or at all; and • a product candidate may not be accepted as safe and effective by patients, the medical community, or third-party payors. If we are unsuccessful in identifying and developing additional product candidates, our potential for growth and achieving our strategic objectives may be impaired. We may expend our resources to pursue a particular product candidate or indication and forgo the opportunity to capitalize on product candidates or indications that may ultimately be more profitable or for which there is a greater likelihood of success. Because we have limited financial and managerial resources, we intend to focus on developing product candidate for specific indications that we identify as most likely to succeed, in terms of both their potential for regulatory approval and commercialization. As a result, we may forego or delay pursuit of opportunities with other product candidates or for other indications that may prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities. Our spending on research and development programs and product candidate for specific indications may not yield any commercially viable product candidate. If we do not accurately evaluate the commercial potential or target market for a particular product candidate, we may relinquish valuable rights to that product candidate through collaboration, licensing, or other royalty arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights to the product candidate. Obtaining and maintaining regulatory approval of LB-102 or any future product candidates we may develop in one jurisdiction does not mean that we will be successful in obtaining regulatory approval of such product candidate in other jurisdictions. We may seek regulatory approval for LB-102 or any future product candidates we may develop outside the United States. Foreign regulatory authorities have requirements for approval of product candidates with which we must comply prior to marketing in those jurisdictions. Obtaining and maintaining regulatory approval of LB-102 or any future product candidates we may develop in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction. However, a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others. For example, even if the FDA grants marketing approval of a product candidate, comparable regulatory authorities in foreign jurisdictions also must approve the manufacturing, marketing, and promotion of the product candidate in those jurisdictions. Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the United States, including additional preclinical studies or clinical trials, as clinical trials conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions. In addition, in some jurisdictions outside the United States, a product candidate must be approved for reimbursement before it can be approved for sale in that jurisdiction. In some cases, the price that we intend to charge for our products is also subject to approval. Obtaining foreign regulatory approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties, and costs for us and could delay or prevent the introduction of our products in certain countries. If we 74 Table of Contents fail to comply with the regulatory requirements in international markets and/or receive and maintain applicable marketing approvals, or if regulatory approvals in international markets are delayed, our target market will be reduced and our ability to realize the full market potential of our product candidate will be harmed, which could adversely affect our business, results of operations, and financial condition. The successful commercialization of our product candidate, if approved, will depend in part on the extent to which governmental authorities and health insurers establish coverage, adequate reimbursement levels, and favorable pricing policies. Failure to obtain or maintain coverage and adequate reimbursement for our product candidate could limit our ability to market those products and decrease our ability to generate revenue. The availability of coverage and the adequacy of reimbursement by governmental healthcare programs such as Medicare and Medicaid, private health insurers, and other third-party payors are essential for most patients to be able to afford prescription medications such as our product candidate, if approved. Our ability to achieve coverage and acceptable levels of reimbursement for our product by third-party payors will have an effect on our ability to successfully commercialize the product and any future products we may successfully develop. Even if we obtain coverage for a given product by a third-party payor, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high. We cannot be sure that coverage and reimbursement in the United States, the European Union, or the EU, or elsewhere will be available for any product that we may develop, and any reimbursement that may become available may be decreased or eliminated in the future. Third-party payors increasingly are challenging prices charged for pharmaceutical products and services, and many third-party payors may refuse to provide coverage and reimbursement for particular drugs when an equivalent generic drug or a less expensive therapy is available. It is possible that a third-party payor may consider our product candidate as substitutable and only offer to reimburse patients for the less expensive product. These payors may deny or revoke the reimbursement status of a given product or establish prices for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in product development. If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize our products, if approved, and may not be able to obtain a satisfactory financial return on products that we may develop. There is significant uncertainty related to third-party payor coverage and reimbursement of newly approved products. Regulatory approvals, pricing, and reimbursement for new drug products vary widely from country to country. In the United States, third-party payors, including private and governmental payors, such as the Medicare and Medicaid programs, play an important role in determining the extent to which new drugs will be covered. Some third-party payors may require pre-approval of coverage for new or innovative drug therapies before they will reimburse healthcare providers who use such therapies. It is difficult to predict at this time what third-party payors will decide with respect to the coverage and reimbursement for our products, if approved. Obtaining and maintaining reimbursement status is time-consuming, costly, and uncertain. The Medicare and Medicaid programs increasingly are used as models for how private payors and other governmental payors develop their coverage and reimbursement policies for drugs. However, no uniform policy for coverage and reimbursement for products exists among third-party payors in the United States. Therefore, coverage and reimbursement for products can differ significantly from payor to payor. As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our products to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance. Furthermore, rules and regulations regarding reimbursement change frequently, in some cases at short notice, and we believe that changes in these rules and regulations are likely. Under currently applicable U.S. law, certain products not usually self-administered (including injectable drugs) may be eligible for coverage under Medicare through Medicare Part B. Medicare Part B is part of original Medicare, the federal health care program that provides health care benefits to the aged and disabled, and covers outpatient services and supplies, including certain biopharmaceutical products, that are medically necessary to treat a beneficiary’s health condition. As a condition of receiving Medicare Part B reimbursement for a manufacturer’s eligible drugs, the manufacturer is required to participate in other government healthcare programs, including the Medicaid Drug Rebate Program and the 340B Drug Pricing Program. The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the U.S. Department of Health and Human Services, or HHS, as a condition for states to receive federal matching funds for the manufacturer’s outpatient drugs furnished to Medicaid patients. Under the 340B Drug Pricing Program, the manufacturer must extend discounts to entities that participate in the program. 75 Table of Contents Additionally, the containment of healthcare costs has become a priority of federal, state and foreign governments. For example, the U.S. Department of Health and Human Services, or HHS, imposes rebates on many Medicare Part B and Medicare Part D products to penalize price increases that outpace inflation on an annual basis. HHS has also been empowered to negotiate the price of certain single-source drugs that have been on the market for at least seven (7) years covered under Medicare as part of the Medicare Drug Price Negotiation Program. Each year up to twenty (20) products will be selected by HHS for the Medicare Drug Price Negotiation Program. Products subject to the Medicare Drug Price Negotiation Program are expected to experience a significant reduction in reimbursement from the Medicare program on a per unit basis. Outside the United States, international operations are generally subject to extensive governmental price controls and other market regulations, and we believe the increasing emphasis on cost-containment initiatives in Europe and other countries has and will continue to put pressure on the pricing and usage of pharmaceutical products. In many countries, the prices of medicinal products are subject to varying price control mechanisms as part of national health systems. Other countries allow companies to fix their own prices for medical products but monitor and control company profits. Additional foreign price controls or other changes in pricing regulation could restrict the amount that we are able to charge for our product candidate, if approved. Accordingly, in markets outside the United States, the reimbursement for our product candidate may be reduced compared with the United States and may be insufficient to generate commercially reasonable revenue and profits. See “—EU drug marketing and reimbursement regulations may materially affect our ability to market and receive coverage for our products in the EU member states” below for further discussion of risks related to foreign marketing and reimbursement regulations. Moreover, increasing efforts by governmental and third-party payors in the United States and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products. We expect to experience pricing pressures in connection with the sale of our product candidate, if approved for marketing, due to the trend toward managed healthcare, the increasing influence of health maintenance organizations, and additional legislative changes. The downward pressure on healthcare costs in general, particularly prescription drugs and other treatments, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products. Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay. As product candidates are developed through pre-clinical to late-stage clinical trials towards approval and commercialization, it is common that various aspects of the development program, such as manufacturing methods and formulation (including raw materials and starting materials), are altered in an effort to optimize processes and results. Such changes carry the risk that they will not achieve these intended objectives. Any of these changes could cause our product candidate to perform differently and affect the results of planned clinical trials or future clinical trials to be conducted with the altered materials. Such changes may also require additional testing, notification to the FDA or comparable foreign regulatory authorities or approval from the FDA or comparable foreign regulatory authorities. This could delay completion of clinical trials, require the conduct of bridging clinical trials or the repetition of one or more clinical trials, increase clinical trial costs, delay approval of our product candidate and/or jeopardize our ability to commence product sales and generate revenue. We may conduct certain of our clinical trials for our product candidate outside of the United States in the future. However, the FDA may not accept data from such trials, in which case our development plans may be delayed, which could materially harm our business. Although we currently conduct all of our clinical trials in the United States, in the future we may conduct one or more of our clinical trials for our product candidate outside the United States. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of these data is subject to certain conditions imposed by the FDA. For example, to accept data from a clinical trial that was conducted only at sites outside of the United States and not subject to an IND, the FDA requires such clinical trial to have been conducted in accordance with GCPs, and the FDA must be able to validate the data from the clinical trial through an on-site inspection if the FDA deems such inspection necessary. In cases where data from foreign clinical trials are intended to serve as the sole basis for marketing approval in the United States, the FDA will generally not approve the application on the basis of foreign data alone unless (i) the data are applicable to the U.S. population and U.S. medical practice; (ii) the trials were performed by clinical investigators of recognized competence and pursuant to GCP regulations; and (iii) the data may be considered valid without the need for an on-site inspection by the FDA, or if the FDA considers such inspection to be necessary, the FDA is able to validate the data through an on-site inspection or other appropriate means. For studies not subject to an IND, the FDA generally does 76 Table of Contents not review clinical protocols for the studies, and therefore there is an additional potential risk that the FDA could determine that the study design, protocol, and/or results from a non-U.S. clinical trial were inadequate for the purposes we intend, which could require us to conduct additional clinical trials. Many foreign regulatory authorities have similar requirements for clinical data gathered outside of their respective jurisdictions. In addition, such foreign trials would be subject to the applicable local laws of the foreign jurisdictions where the trials are conducted. There can be no assurance the FDA or any comparable foreign regulatory authority will accept data from clinical trials conducted outside of the United States or the relevant jurisdiction. If the FDA or any comparable foreign regulatory authority does not accept data from our clinical trials of our product candidate, it may result in the need for additional clinical trials, which would be costly and time-consuming and could delay or permanently halt our development of our product candidate. Risks Related to Our Business and Operations Neuroscience drug development is a field that has seen limited success. The ability to successfully develop drugs in this field is difficult and is subject to a number of unique challenges. Drug development in the field of brain diseases, neuropsychiatric disorders and neurodegenerative diseases in particular, has seen limited success historically. Developing a successful product candidate for treatment of these brain diseases is difficult and subjects us to a number of unique challenges, including obtaining regulatory approval from the FDA and other regulatory authorities who have only a limited set of precedents to rely on. We intend to work closely with the FDA and comparable foreign regulatory authorities to perform the requisite scientific analyses and evaluation in an effort to obtain regulatory approval for our product candidate; however, the process of developing our product candidate may be more complex and time-consuming relative to other more well-known approaches to drug development. We cannot be certain that our approach will lead to the development of a product candidate that effectively and safely addresses the underlying brain diseases. Moreover, given the history of clinical failures in this field, future clinical or regulatory failures by us or others may result in further negative perception of the likelihood of success in this field, which may significantly and adversely affect the market price of our common stock. Our business depends on the success of our product candidate. If we are ultimately unable to successfully commercialize our product candidate, or experience significant delays in doing so, our business will be materially harmed. We currently have no products approved for commercial sale or for which regulatory approval to market has been sought. We have invested a significant portion of our efforts and financial resources in the development of our product candidate, which is still in clinical development, and expect that we will continue to invest heavily in such product candidate, as well as in any future product candidates we may develop. Our business and our ability to generate revenue, which we do not expect will occur for many years, if ever, are substantially dependent on our ability to develop, obtain regulatory approval for, and then successfully commercialize LB-102, which may never occur. If approved for marketing by applicable regulatory authorities, our ability to generate revenue from our product candidate will depend on our ability to: • achieve market acceptance of our future approved product by patients, the medical community, and third-party payors; • create market demand for our approved product through our own marketing and sales activities, and any other arrangements to promote the approved product that we may otherwise establish in the future; • receive regulatory approval for the targeted patient populations and efficacy/safety claims that are necessary or desirable for successful marketing; • price our product competitively such that third-party and government reimbursement permits broad product adoption; • manufacture our product candidate through contract development and manufacturing organizations, or CDMOs, in sufficient quantities and at acceptable quality and manufacturing cost to meet commercial demand at launch and thereafter; 77 Table of Contents • establish and maintain agreements with wholesalers, distributors, pharmacies, and group purchasing organizations on commercially reasonable terms; • obtain, maintain, protect, and enforce patent and other intellectual property protection and regulatory exclusivity for our product, if approved; • maintain compliance with applicable laws, regulations, and guidance specific to commercialization including interactions with health care professionals, patient advocacy groups, and communication of health care economic information to payors and formularies; and • assure that our product candidate, if approved, will be used as directed and that additional unexpected safety risks will not arise. We rely on, and intend to continue to rely on, our internal clinical development expertise to conduct our current and future clinical trials. This model includes internal teams and systems as well as external vendors and CROs to comprise a full clinical trial team. If our clinical trial team does not comply with applicable regulatory requirements, meet expected deadlines, or run trials effectively, our development programs and our ability to seek or obtain regulatory approval for or commercialize our product candidate may be delayed. We conduct much of our clinical trial work (e.g., clinical and medical monitoring, data management, and project management) with CROs as well as utilizing internal personnel to augment and oversee our CROs. Although we believe that our CROs currently have the capabilities to conduct clinical trials in collaboration with our internal staff, we may need to rely on additional third party CROs to conduct clinical trials if our internal and existing CRO capabilities cannot scale as we work to progress LB-102 through development, as we potentially expand our product candidate portfolio, or if we do not have sufficient personnel to support our clinical program. Our failure or the failure of any CROs we may employ to conduct the trials in compliance with FDA regulations could result in a delay or failure in obtaining FDA approval and could require us to repeat any preclinical studies or clinical trials we or the CRO administered. Further, as part of our engagement with CROs, we have to negotiate budgets and contracts with them and/or each trial site, which may result in delays to our development timelines and increased costs. If any of our relationships with CROs and/or trial sites terminate, we may not be able to enter into arrangements with alternative trial sites or do so on commercially reasonable terms. Switching or adding additional trial sites can also involve additional costs and requires time and focus of our clinical trial operations management team. Competitive products may reduce or eliminate the commercial opportunity for our product candidate for our current or future indications. If our competitors develop technologies or product candidates more rapidly than we do, or their technologies are more effective or safer than ours, our ability to develop and successfully commercialize our current products may be adversely affected. The biopharmaceutical industry is characterized by rapid innovation and intense competition. While we believe that our clinical program provides us with competitive advantages, we face competition from multiple biopharmaceutical and biotechnology companies that are similarly working to develop therapeutics targeting neuropsychiatry and, central nervous system, or CNS, disorders, as well as from academic institutions, governmental agencies, and public and private research institutions. Many of our potential competitors, either alone or with collaboration partners, have significantly greater financial resources than we do, as well as equal or greater experience in the discovery and development of product candidates, obtaining FDA and other regulatory approvals of products, and the commercialization of those products. Accordingly, our potential competitors may be more successful than we are in achieving regulatory approvals and commercializing their products. We anticipate that we will face intense and increasing competition from existing, approved drugs, as well as new drugs entering the market and emerging technologies that become available. We are developing LB-102 for the treatment of schizophrenia, bipolar depression, and adjunctive MDD. While there remains significant unmet need in these indications, we believe LB-102, if approved, may face competition from product candidates also being developed for treatment of schizophrenia, bipolar depression, and adjunctive MDD. We believe the key competitive factors affecting the success of our product candidate that we develop to address schizophrenia, bipolar depression, adjunctive MDD, and other CNS disorders, if approved, are likely to be efficacy, safety, convenience, price, the level of generic competition, and the availability of reimbursement from government and other 78 Table of Contents third-party payors. Our profitability and financial position will suffer if our product candidate receives regulatory approval but cannot compete effectively in the marketplace. We will need to grow our organization, and we may experience difficulties in managing our growth and expanding our operations, which could adversely affect our business. As of December 31, 2025, we had 27 employees. As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we expect to expand our employee base for managerial, operational, financial, and other resources. In addition, we have limited experience in manufacturing and commercialization. As our product candidate enters and advances through clinical trials, we will need to expand our development and regulatory capabilities and contract with other organizations to provide manufacturing and other capabilities for us. In the future, we expect to have to manage additional relationships with collaborators or partners, suppliers and other organizations. Our ability to manage our operations and future growth will require us to continue to improve our operational, financial, and management controls, reporting systems and procedures, which may lead to significant costs and may divert management attention. We may not be able to implement improvements to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems and controls. Our inability to successfully manage our growth and expand our operations could adversely affect our business, financial condition, results of operations, and prospects. We are dependent on the services of our management and other clinical and scientific personnel, and if we are not able to retain these individuals or recruit additional management or clinical and scientific personnel, our business will suffer. Our success depends in part on our continued ability to attract, retain, and motivate highly qualified management, clinical, and scientific personnel. We are highly dependent upon our Chief Executive Officer, Heather Turner, and other members of our management team. The loss of services of any of these individuals could delay or prevent the successful development and commercialization of our product candidate. Although we have executed employment agreements or offer letters with each member of our senior management team, these agreements are terminable at will with or without notice and, therefore, we may not be able to retain their services as expected. Additionally, in light of our insourced clinical trial model, we are heavily reliant on the expertise of our clinical trial team, and the loss of even a small number of those employees could have a significant adverse impact on our ability to conduct our clinical trials in a compliant and timely manner. Additionally, as we expand our clinical trial operations, or if we experience turnover within our clinical trial team, even if we are able to recruit qualified personnel to support our insourced clinical trial model, the onboarding and integration process takes time and can result in delays to our clinical development timeline. We will need to expand and effectively manage our managerial, operational, financial, and other resources in order to successfully pursue our clinical development and commercialization efforts. We may not be successful in maintaining our company culture and continuing to attract or retain qualified management and scientific and clinical personnel in the future due to the intense competition for qualified personnel among biopharmaceutical, biotechnology, and other businesses, particularly in the greater New York Area. If we are not able to attract and grow our headcount with the appropriate personnel or integrate, retain, and motivate necessary personnel to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital, and our ability to implement our business strategy. Our employees, independent contractors, consultants, commercial partners, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements. We are exposed to the risk of employee fraud or other illegal activity by our current and any future employees, independent contractors, consultants, commercial partners, CROs, CDMOs, and vendors. Misconduct by these parties could include intentional, reckless, and/or negligent conduct that fails to comply with FDA or other regulations, provide true, complete and accurate information to the FDA, European Medicines Agency, and other comparable foreign regulatory authorities, comply with manufacturing standards we may establish, comply with healthcare fraud and abuse laws and regulations, report financial information or data accurately, or disclose unauthorized activities to us. If we obtain FDA approval of our 79 Table of Contents product candidate and begin commercializing the product in the United States, our potential exposure under these laws will increase significantly, and our costs associated with compliance with these laws are likely to increase. In particular, sales, marketing, and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, kickbacks, self-dealing, and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs, and other business arrangements. Employee misconduct could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory sanctions and serious harm to our reputation. Additionally, we are subject to the risk that a person could allege such fraud or other misconduct, even if none occurred. It is not always possible to identify and deter employee misconduct, and 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 such laws or regulations. 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 material and adverse effect on our business, financial condition, results of operations, and prospects, including the imposition of significant civil, criminal, and administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, integrity oversight and reporting obligations, or reputational harm. Our business entails a significant risk of product liability and our ability to obtain sufficient insurance coverage could adversely affect our business, financial condition, results of operations, and prospects. As we conduct clinical trials of our current or future product candidates, we are exposed to significant product liability risks inherent in the development, testing, manufacturing, and marketing of new treatments. Product liability claims could delay or prevent completion of our development programs. If we succeed in obtaining approval for, and marketing products, such claims or certain adverse event trends could result in an investigation by the FDA, comparable foreign regulatory authorities, or other regulators into the safety and efficacy of our future approved products, our manufacturing processes and facilities, or our marketing programs and potentially a recall of our products or more serious enforcement action, limitations on the approved indications for which they may be used, or suspension or withdrawal of approvals. Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our future approved products, termination of clinical trial sites or entire trial programs, withdrawal of clinical trial participants, injury to our reputation and significant negative media attention, significant costs to defend the related litigation, a diversion of management’s time and our resources from our business operations, substantial monetary awards to trial participants or patients, loss of revenue, the inability to commercialize any products that we may develop, and a decline in our stock price. We may need to obtain higher levels of product liability insurance for later stages of clinical development or marketing our product candidate. Any insurance we may obtain may not provide sufficient coverage against potential liabilities. Furthermore, clinical trial and product liability insurance is becoming increasingly expensive. As a result, we may be unable to obtain sufficient insurance at a reasonable cost to protect us against losses caused by product liability claims that could adversely affect our business, financial condition, results of operations, and prospects. We do not carry insurance for all categories of risk that our business may encounter. Some of the policies we currently maintain include property, general liability, clinical trials, and directors’ and officers’ liability insurance. We do not know, however, if we will be able to maintain insurance with adequate levels of coverage. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our business, financial condition, results of operations, and prospects. If our information technology systems or those of third parties with whom we work, or our data are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions; litigation; fines and penalties; disruptions of our business operations; reputational harm; loss of revenue or profits; and other adverse consequences. In the ordinary course of business, we and the third parties with whom we work, collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share, or collectively, process, personal data and other sensitive information, including proprietary and confidential business information, trade secrets, intellectual property, information we collect about trial participants in connection with clinical trials, and sensitive third-party information, or collectively, sensitive data. As a result, we and the third parties with whom we work face a variety of evolving threats that could cause security incidents. Cyber-attacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and 80 Table of Contents information technology systems, and those of the third parties with whom we work. Such threats are prevalent and continue to rise, are increasingly difficult to detect, and come from a variety of sources, including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, personnel (such as through theft or misuse), sophisticated nation states, and nation-state-supported actors. Some actors now engage and are expected to continue to engage in cyber-attacks, including without limitation nation-state actors for geopolitical reasons and in conjunction with military conflicts and defense activities. During times of war and other major conflicts, we and the third parties upon with whom we work may be vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain, and ability to produce, sell and distribute our services. We and the third parties with whom we work are subject to a variety of evolving threats, including but not limited to social-engineering attacks (including through deep fakes, which may be increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing, credential harvesting, personnel misconduct or error, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by artificial intelligence, or AI, telecommunications failures, earthquakes, fires, floods, and other similar threats. In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds. Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments. It may be difficult and/or costly to detect, investigate, mitigate, contain, and remediate a security incident. Our efforts to do so may not be successful. Actions taken by us or the third parties with whom we work to detect, investigate, mitigate, contain, and remediate a security incident could result in outages, data losses, and disruptions of our business. Threat actors may also gain access to other networks and systems after a compromise of our networks and systems. For example, threat actors may use an initial compromise of one part of our environment (or that of third parties with whom we work) to gain access to other parts of our environment, or leverage a compromise of the relevant networks or systems to gain access to the networks or systems of third parties with whom we work, such as through phishing or supply chain attacks. Remote work has increased risks to our information technology systems and data, as more of our personnel utilize network connections, computers, and devices outside our premises or network, including working at home, while in transit or in public locations. Additionally, future or past business transactions (such as acquisitions or integrations) could expose us to additional cybersecurity risks and vulnerabilities, as our systems could be negatively affected by vulnerabilities present in acquired or integrated entities’ systems and technologies. Furthermore, we may discover security issues that were not found during due diligence of such acquired or integrated entities, and it may be difficult to integrate companies into our information technology environment and security program. In addition, our reliance on third parties could introduce new cybersecurity risks and vulnerabilities, including supply-chain attacks, and other threats to our business operations. We rely on various third parties and technologies to operate critical business systems to process sensitive data in a variety of contexts, including, without limitation, cloud-based infrastructure, data center facilities, encryption and authentication technology, personnel email, and other functions. We also rely on third parties to provide other products, services, parts, or otherwise to operate our business, including with respect to our cybersecurity infrastructure. Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place. If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences. While we may be entitled to damages if such third parties fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award. In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with whom we work have not been compromised. While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective. We may not, however, detect and remediate all such vulnerabilities including on a timely basis. Further, we may experience delays in developing and deploying remedial measures and patches designed to address identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident. 81 Table of Contents Any of the previously identified or similar threats could cause a security incident or other interruption that could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive data or our information technology systems, or those of the third parties with whom we work. A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our services. We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents. Additionally, certain data privacy and security obligations may require us to implement and maintain specific security measures or industry-standard or reasonable security measures to protect our information technology systems and sensitive data. Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders, including affected individuals, regulators, and investors, of security incidents, or take other actions, such as providing credit monitoring and identity theft protection services. Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences. If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; diversion of management attention; interruptions in our operations (including availability of data); financial loss; and other similar harms. Security incidents and attendant material consequences may negatively impact our ability to grow and operate our business. Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations. We cannot be sure that our insurance coverage, if any, will be adequate or sufficient to protect us from or to mitigate liabilities arising out of our privacy and security practices, that such coverage will continue to be available on commercially reasonable terms or at all, or that such coverage will pay future claims. In addition to experiencing a security incident, third parties may gather, collect, or infer sensitive data about us from public sources, data brokers, or other means that reveals competitively sensitive details about our organization and could be used to undermine our competitive advantage or market position. Additionally, sensitive data that we possess could be leaked, disclosed, or revealed as a result of or in connection with our personnel’s or vendors’ use of generative AI technologies. We have identified material weaknesses in our internal control over financial reporting. If we fail to remediate these material weaknesses, or if we experience additional material weaknesses in the future or otherwise fail to maintain effective internal control over financial reporting in the future, we may not be able to accurately or timely report our financial condition or results of operations, which may adversely affect investor confidence in us and, as a result, the value of our common stock. As of December 31, 2025, although we made significant improvement throughout the year, we had limited accounting personnel and other resources with which to address our internal control over financial reporting. In connection with the preparation of our financial statements for the year ended December 31, 2025, material weaknesses were identified in the design and operating effectiveness of our internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Based on our assessment, we did not appropriately design and maintain entity-level controls impacting the control environment, risk assessment, control activities, information and communication and monitoring activities to prevent or detect material misstatements to the financial statements. These material weaknesses relate to: (i) an insufficient number of qualified resources to ensure adequate oversight and accountability over the performance of controls, including: • proper segregation of duties, 82 Table of Contents • controls over the completeness and accuracy of information used in the operation of control activities across substantially all financial statement areas, and • retention of control evidence, and (ii) improper access and a lack of review over user access and user provisioning as it relates to our information technology environment and general controls over information systems that support the financial reporting process. These material weaknesses could result in a misstatement of our accounts or disclosures in our annual or interim financial statements that would not be prevented or detected on a timely basis. These material weaknesses have not been remediated as of the date of this Annual Report on Form 10-K. To remediate the material weaknesses, we continue to hire finance and accounting personnel, as well as improve our financial controls and accounting systems. We continue using the services of a third-party firm to assist in the design and implementation of controls. We intend to continue to take further steps to remediate these material weaknesses through formalizing documentation of policies and procedures and further evolving the accounting processes. The material weaknesses will not be considered remediated until management completes the design and implementation of the measures described above and the controls operate for a sufficient period of time and management has concluded, through testing, that these controls are effective. Although we currently expect to remediate these material weaknesses by December 31, 2026, we cannot assure you that we will be able to successfully do so on this timeline. The measures we have taken to date, and those that we are continuing to design and implement, may not be sufficient to remediate the material weaknesses we have identified or avoid potential future material weaknesses. If the steps we take do not correct these material weaknesses in a timely manner, we will be unable to conclude that we maintain effective internal control over financial reporting. Accordingly, there could continue to be a reasonable possibility that a material misstatement of our financial statements would not be prevented or detected on a timely basis. If we fail to remediate our existing material weaknesses or identify new material weaknesses in our internal control over financial reporting, if we are unable to comply with the disclosure and attestation requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner, if we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to conclude that our internal control over financial reporting is effective when we are no longer an emerging growth company, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected. As a result, we could also become subject to investigations by Nasdaq, the SEC or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation and financial condition or divert financial and management resources from our regular business activities. Our projections regarding the market opportunities for our product candidate may not be accurate, and the actual market for our products may be smaller than we estimate. The precise incidence and prevalence for all the conditions we aim to address with our product candidate are unknown. Our projections of both the number of people who have these diseases, as well as the subset of people with these diseases who have the potential to benefit from treatment with our product candidate, are based on our beliefs and estimates. These estimates have been derived from a variety of sources, including sales of our competitors, scientific literature, surveys of clinics, patient foundations, or market research, and may prove to be incorrect in general, or as to their applicability to our company. Further, new trials may change the estimated incidence or prevalence of these diseases. The total addressable market of our product candidate, if approved, will ultimately depend upon, among other things, the diagnosis criteria included in the final label for our product candidate approved for sale for these indications, if any, the ability of our product candidate to improve on the safety, convenience, cost, and efficacy of competing therapies or therapies in development, acceptance by the medical community and patients, drug pricing, and reimbursement. The number of patients in the United States and other major markets and elsewhere may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our product, if approved, and our product candidate or new patients may become increasingly difficult to identify or gain access to, all of which would adversely affect our business, financial condition, results of operations, and prospects. 83 Table of Contents Our business could be adversely affected by the effects of health pandemics or epidemics, which could cause significant disruptions in our operations and those of our current or future CDMOs, CROs, and other third parties upon whom we rely. Health pandemics or epidemics, have in the past and could again in the future result in quarantines, stay-at-home orders, remote work policies, or other similar events that may disrupt businesses, delay our research and development programs and timelines, negatively impact productivity and increase risks associated with cybersecurity, the future magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations. More specifically, these types of events may negatively impact personnel at third-party manufacturing facilities or the availability or cost of materials, which could disrupt our supply chain. Moreover, our clinical trials may be negatively affected. Clinical site initiation and patient enrollment may be delayed due to prioritization of hospital resources. Some patients may not be able or willing to comply with trial protocols if quarantines impede patient movement or interrupt healthcare services. Our ability to recruit and retain patients, principal investigators, and site staff (who as healthcare providers may have heightened exposure) may be hindered, which would adversely affect our trial operations. Disruptions or restrictions on our ability to travel to monitor data from our trials, or to conduct trials, or the ability of patients enrolled in our trials or staff at trial sites to travel, as well as temporary closures of our trial partners and CDMOs’ facilities, would negatively impact our trial activities. In addition, we rely on independent clinical investigators, CROs, and other third-party service providers to assist us in managing, monitoring, and otherwise carrying out certain of our preclinical studies and clinical trials, including the collection of data from our trials, and the effects of health pandemics or epidemics, may affect their ability to devote sufficient time and resources to our programs or to travel to sites to perform work for us. Similarly, our trials could be delayed and/or disrupted. As a result, the expected timeline for data readouts, including incompleteness in data collection and analysis and other related activities, and certain regulatory filings may be negatively impacted, which would adversely affect our ability to obtain regulatory approval for and to commercialize our product candidate, if approved, increase our operating expenses, and adversely affect our business, financial condition, results of operations, and prospects. In addition, impact on the operations of the FDA or comparable foreign regulatory authorities could negatively affect our planned trials and approval processes. Finally, economic conditions and business activity may be negatively impacted and may not recover as quickly as anticipated. Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties. Our future growth may depend, in part, on our ability to develop and commercialize our product candidate in foreign markets, including in the European Union, United Kingdom and Japan, for which we may rely on collaboration with third parties. We are not permitted to market or promote our product candidate before we receive regulatory approval from the applicable regulatory authority in that foreign market and may never receive such regulatory approval for our product candidate. To obtain separate regulatory approval in many other countries, we must comply with numerous and varying regulatory requirements of such countries regarding safety and efficacy and governing, among other things, clinical trials and commercial sales, pricing, and distribution of our product candidate, and we cannot predict success in these jurisdictions. If we fail to comply with the regulatory requirements in international markets and receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidate will be harmed and our business will be adversely affected. We may not obtain foreign regulatory approvals on a timely basis, if at all. Our failure to obtain approval of our product candidate by regulatory authorities in another country may significantly diminish the commercial prospects of that product candidate and our business, financial condition, results of operations, and prospects could be adversely affected. Moreover, even if we obtain approval of our product candidate and ultimately commercialize our product candidate in foreign markets, we would be subject to the risks and uncertainties, including the burden of complying with complex and changing foreign regulatory, tax, accounting, and legal requirements, and reduced protection of intellectual property rights in some foreign countries. Risks Related to Intellectual Property, Collaborations, and Related Agreements If we are unable to obtain and maintain sufficient intellectual property protection for our technologies, and product candidate and any future product candidates we may develop, or if the scope of the intellectual property protection obtained is not sufficiently broad, our competitors or other third parties could develop and commercialize products similar or identical to ours, and our ability to successfully develop and commercialize our product candidate may be adversely affected. We rely upon a combination of patents, know-how, trade secrets, and confidentiality agreements, to protect the intellectual property related to our technologies, and product candidate and to prevent third parties from copying and surpassing our 84 Table of Contents achievements, thus eroding our competitive position in our market. We may also rely on protection afforded by in-licensed intellectual property rights and proprietary technology of third parties in the future. Our success depends in large part on our ability to obtain and maintain patent protection in the United States and other countries for our product candidate and its uses, as well as our ability to operate without infringing, misappropriating, or otherwise violating the proprietary rights of others. We seek to protect our proprietary position by filing patent applications in the United States and abroad related to our novel discoveries and technologies that are important to our business. Although we own issued patents, our pending and future patent applications may not result in patents being issued. Even if our patent applications result in issued patents, we cannot assure you that such issued patents will afford sufficient protection of our product candidate or its intended uses against competitors, nor can there be any assurance that the patents issued will not be infringed, designed around, invalidated by third parties, or that they will effectively prevent others from commercializing competitive technologies, products, or product candidates. Obtaining and enforcing patents is expensive and time-consuming, and we may not be able to file, prosecute, maintain, enforce, or license all necessary or desirable patent applications or maintain and/or enforce patents that may issue based on our patent applications at a reasonable cost or in a timely manner. We may not be able to obtain or maintain patent applications and patents due to the subject matter claimed in such patent applications and patents being in disclosures in the public domain. It is also possible that we will fail to identify patentable aspects of our research and development results before it is too late to obtain patent protection. Therefore, patents and applications that are relevant to our product candidate may not be prosecuted and enforced in a manner consistent with the best interests of our business. Although we enter into non-disclosure and confidentiality agreements with parties who have access to confidential or patentable aspects of our research and development output, such as our employees, corporate collaborators, outside scientific collaborators, CROs, CDMOs, consultants, advisors, and other third parties, any of these parties may breach these agreements and disclose such results before a patent application is filed, thereby jeopardizing our ability to seek patent protection. Consequently, we may not be able to prevent any third parties from using any of our technologies that are in the public domain to compete with our technologies or product candidate. Composition of matter patents for pharmaceutical product candidates often provide a strong form of intellectual property protection for those types of products, as such patents provide protection without regard to any method of use or preparation. However, we cannot be certain that the claims in any of our patent applications directed to composition of matter of our product candidate will be considered patentable by the United States Patent and Trademark Office, or the USPTO, or by patent offices in foreign countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts in the United States or foreign countries. Further, our issued composition of matter patents covering our pharmaceutical product candidate may expire at such a date that our patents may not prevent competitors from developing, making and marketing a product that is identical to our product candidate after expiration of any applicable regulatory exclusivities. Similarly, patents for pharmaceutical formulations containing pharmaceutical product candidates may provide an additional form of intellectual property protection, as such patents provide protection without regard to any method of use. However, we cannot be certain that the claims in our pending patent applications directed to pharmaceutical formulations containing our product candidate will be considered patentable by the USPTO or by patent offices in foreign countries, or that the claims in any of our issued patents will be considered valid and enforceable by courts in the United States or foreign countries. In addition, we cannot be certain that the claims of such patents, if granted, will be sufficiently broad to effectively prevent competitors from working around our claimed inventions by developing alternative compounds and thereby competing with us without infringing our patent rights. Method of use patents protect the use of a product for the specified method or indication. In the absence of separate composition of matter protection, this type of patent does not prevent a competitor from making and marketing a product that is identical to our product candidate for an indication that is outside of the methods of use claimed in our patents. Moreover, even if competitor products are not approved for use in our patented indications, and our competitors do not actively promote their products for indications that are covered by our patents, clinicians may prescribe these competitor products “off-label.” Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, such infringement is difficult to prevent or prosecute. The patent position of pharmaceutical companies generally is highly uncertain, involves complex legal and factual questions, and has in recent years been the subject of much litigation, resulting in court decisions, including Supreme Court decisions, which have increased uncertainties as to the ability to enforce patent rights in the future. As a result, the issuance, scope, validity, enforceability, and commercial value of any patent rights are highly uncertain. Our pending and future owned and in-licensed patent applications may not result in patents being issued that protect our technologies or product candidate, effectively prevent others from commercializing our technologies or product candidate or otherwise provide 85 Table of Contents any competitive advantage. In fact, patent applications may not issue as patents at all. The coverage claimed in a patent application can also be significantly reduced before the patent is issued, and its scope can be reinterpreted after issuance. In addition, the laws of foreign countries may not protect our rights to the same extent as the laws of the United States, or vice versa. The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we will be successful in protecting our product candidate by obtaining and defending patents. For example, we may not be aware of all third-party intellectual property rights potentially relating to our product candidate or its intended uses, and as a result the impact of such third-party intellectual property rights upon the patentability of our patents and patent applications, as well as the impact of such third-party intellectual property upon our freedom to operate, is highly uncertain. 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 were the first to make the inventions claimed in our patents or pending patent applications, or that we were the first to file for patent protection of such inventions. If a third party can establish that we were not the first to make or the first to file for patent protection of such inventions, our patent applications may not issue as patents and even if issued, may be challenged and invalidated or rendered unenforceable. As a result, the issuance, inventorship, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain. The issuance of a patent is not conclusive as to its inventorship, scope, validity, or enforceability, and our pending patent applications may be challenged in patent offices in the United States and abroad. Even issued patents may later be found invalid or unenforceable or may be modified or revoked in proceedings instituted by third parties before various patent offices or in courts. For example, our pending patent applications may be subject to third-party pre-issuance submissions of prior art to the USPTO, and our issued patents may be subject to post-grant review, proceedings, oppositions, derivations, reexaminations, interferences, inter partes review proceedings, or other similar proceedings, in the United States or elsewhere, challenging our patent rights. Such submissions may also be made prior to a patent’s issuance, precluding the granting of a patent based on one or more of our pending patent applications. An adverse determination in any such challenges may result in loss of exclusivity or in patent claims being narrowed, invalidated, or held unenforceable, in whole or in part, which could limit our ability to stop others from using or commercializing similar or identical technologies and product candidates, or limit the duration of the patent protection of our technologies and product candidate. Such challenges also may result in substantial cost and require significant time from our scientists and management, even if the eventual outcome is favorable to us. Any of the foregoing could impair our competitive position and adversely affect our business, financial condition, results of operations, and prospects. A third party may also claim that our patent rights are invalid or unenforceable in a litigation. We can also be accused of infringement by a third party in a litigation. The outcome following legal assertions of invalidity, unenforceability, or infringement is unpredictable. An adverse result in any legal proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly and could allow third parties to commercialize our products and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize our technology, products, or product candidate without infringing third-party patent rights. In addition, 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. The degree of future protection for our proprietary rights is uncertain. Only limited protection may be available and may not adequately protect our rights or permit us to gain or keep any competitive advantage. Any failure to obtain or maintain patent protection with respect to our product candidate or its uses could adversely affect our business, financial condition, results of operations, and prospects. Issued patents covering our product candidate, or the method of use of our product candidate could be found invalid or unenforceable if challenged in court or before administrative bodies in the United States or abroad. If we initiate legal proceedings against a third party to enforce a patent covering our product candidate, or our other proprietary technologies, the defendant could counterclaim that such patent is invalid or unenforceable. In patent litigation in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, non-enablement, insufficient written description, or failure to claim patent-eligible subject matter. Grounds for an unenforceability assertion could be an allegation that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement, during prosecution. In addition to such 86 Table of Contents counterclaims, third parties may raise claims challenging the validity or enforceability of a patent before administrative bodies in the United States or abroad, even outside the context of litigation. Such mechanisms include re-examination, post-grant review, inter partes review, derivation proceedings, and equivalent proceedings in foreign jurisdictions ( e.g. , opposition proceedings). Such proceedings could result in the revocation of, cancellation of, or amendment to our patent rights in such a way that they no longer cover our product candidate, therapeutic programs, and other proprietary technologies we may develop. The outcome following legal assertions of invalidity and unenforceability is unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art of which we and the patent examiner were unaware during prosecution. If a third party were to prevail on a legal assertion of invalidity or unenforceability, we would lose at least part, and perhaps all, of the patent protection provided to our product candidate, proprietary technologies, or other components of our therapeutic programs, as applicable. Such a loss of patent protection could have a material adverse impact on our business, financial condition, results of operations, and prospects. We may not be successful in obtaining or maintaining necessary rights to third party patents for our product candidate through acquisitions and in-licenses. The growth of our business may depend in part on our ability to acquire, in-license, or use third-party intellectual property and proprietary rights. Other pharmaceutical companies and academic institutions may own patents or may have filed, or be planning to file, patent applications potentially relevant to our business. In order to avoid infringing such patent rights, we may find it necessary or prudent to obtain licenses to such patent rights from such third parties. For example, we may be required by the FDA or comparable foreign regulatory authorities to provide a specific companion diagnostic test or tests with our product candidate, any of which could require us to obtain rights to use patents or know-how owned or controlled by third parties. In addition, with respect to any patent or other intellectual property rights we may co-own with third parties in the future, we may require licenses to such co-owners’ interest to such patent or other intellectual property rights. We may be unable to acquire or in-license any compositions, methods of use, processes, or other third-party intellectual property rights from third parties that we identify as necessary or important to our business operations. In addition, we may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all. Were that to happen, we may need to cease use of the compositions or methods covered by those third-party intellectual property rights and may need to seek to develop alternative approaches that do not infringe, misappropriate, or otherwise violate those intellectual property rights, which may entail additional costs and development delays, even if we were able to develop such alternatives, which may not be feasible. Even if we are able to obtain a license, it may be non-exclusive, which means that our competitors may also receive access to the same technologies licensed to us. In that event, we may be required to expend significant time and resources to develop or license replacement technology. The licensing and acquisition of third-party intellectual property rights is a competitive area, and companies that may be more established or have greater resources than we do may also be pursuing strategies to license or acquire third-party intellectual property rights that we may consider necessary or attractive in order to commercialize our product candidate. More established companies may have a competitive advantage over us due to their size, 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. There can be no assurance that we will be able to successfully complete these types of negotiations and ultimately acquire the rights to the intellectual property related to the products or product candidate that we may seek to develop or market. If we are unable to successfully obtain rights to required third-party intellectual property or to maintain the existing intellectual property rights we have, we may have to abandon development of certain programs and our business, financial condition, results of operations, and prospects could suffer. We may enter into license agreements in the future with others to advance our existing or future research or allow commercialization of our existing or future product candidates. These licenses may not provide exclusive rights to use such intellectual property and technology in all relevant fields of use and in all territories in which we may wish to develop or commercialize our technologies and product candidate in the future. In that event, we may be required to expend significant time and resources to redesign our product candidate, or the methods for manufacturing them, all of which may not be feasible on a technical or commercial basis. If we are unable to do so, we may be unable to develop or commercialize the affected product candidate, which could harm our business, financial condition, results of operations, and prospects significantly. We cannot provide any assurances that third-party patents do not exist which might be enforced against our current manufacturing methods, product candidate, or future methods or product candidates resulting in either an injunction prohibiting our manufacture or future sales, or, with respect to our future sales, an obligation on our part to pay royalties and/or other forms of compensation to third parties, which could be significant. 87 Table of Contents We may form or seek collaborations or strategic alliances, enter into licensing arrangements or other business transactions in the future, and we may not realize the benefits of such transactions. We may enter into licensing arrangements and strategic transactions to acquire and advance new assets or product candidates in the future, including strategic partnerships, in-licensing of product candidates, strategic collaborations, joint ventures, restructurings, divestitures, acquisitions of companies, asset purchases, business combinations, and investments. Any future transactions that we enter into may not be successful. In particular, the success of our collaboration arrangements will depend heavily on the efforts and activities of our collaborators. Collaborations are subject to numerous risks, which may include that: • collaborators have significant discretion in determining the efforts and resources that they will apply to collaborations; • collaborators may not pursue development and commercialization of our product candidate or may elect not to continue or renew development or commercialization programs based on trial or test results, changes in their strategic focus due to the acquisition of competitive products, availability of funding, or other external factors, such as a business combination that diverts resources or creates competing priorities; • collaborators could independently develop, or develop with third parties, products that compete directly or indirectly with our product candidate; • a collaborator with marketing, manufacturing, and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities; • we could grant exclusive rights to our collaborators that would prevent us from collaborating with others; • collaborators may not properly 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; • disputes may arise between us and a collaborator that causes the delay or termination of the research, development or commercialization of our future product candidates or that results in costly litigation or arbitration that diverts management attention and resources; • collaborations may be terminated, and, if terminated, may result in a need for additional capital to pursue further development or commercialization of the applicable future product candidates; • collaborators may own or co-own intellectual property covering our product candidate that results from our collaborating with them, and in such cases, we would not have the exclusive right to develop or commercialize such intellectual property; and • a collaborator’s sales and marketing activities or other operat