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Item 1A. Risk Factors

2024-05-07 compared with 2023-11-13 · 461 added, 813 removed, 903 unchanged (59% of the section changed)

We face many risks and uncertainties, as more fully described in this section under the heading “Risk Factors.”

Some of these risks and uncertainties are summarized below.

The summary below does not contain all of the information that may be important to you, and you should read this summary together with the more detailed discussion of these risks and uncertainties contained in “Risk Factors.”

Risks Related to Our Business and Industry

We have incurred significant net losses since our inception in 2014 and anticipate that we will continue to incur significant net losses for the foreseeable future.

We have identified conditions and events that raise substantial doubt about our ability to continue as a going concern.

We will need substantial additional capital to develop and commercialize mavodelpar and any future product candidates and implement our operating plan.

If we fail to complete additional financings, we may be forced to delay, reduce or eliminate our product development programs or commercialization efforts.

We currently depend entirely on the success of mavodelpar, which is our only product candidate.

If we are unable to advance mavodelpar through clinical development, obtain regulatory approvals, and ultimately commercialize mavodelpar, or experience significant delays in doing so, our business will be materially harmed.

Our clinical trials may fail to adequately demonstrate the safety and efficacy of mavodelpar, which could prevent or delay regulatory approval and commercialization.

Preclinical and clinical drug development is a lengthy and expensive process with uncertain outcomes, and results of earlier studies and trials may not be predictive of future trial results.

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.

Any delays in the commencement or completion, or termination or suspension, of our clinical trials could result in increased costs to us, delay or limit our ability to generate revenue, and adversely affect our commercial prospects.

The regulatory approval process is lengthy, expensive and uncertain, and we may be unable to obtain regulatory approval for our product candidates under applicable regulatory requirements.

The denial or delay of any such approval would delay commercialization of our product candidates and adversely impact our ability to generate revenue, our business and our results of operations.

If the market opportunities for mavodelpar and any future product candidates are smaller than we believe they are, or we face substantial competition in our markets, our future revenue may be adversely affected, and our business may suffer.

We may not be successful in our efforts to expand our pipeline by identifying additional indications for which to investigate mavodelpar in the future.

We may expend our limited resources to pursue a

particular indication or formulation for mavodelpar and fail to capitalize on product candidates, indications or formulations that may be more profitable or for which there is a greater likelihood of success.

We currently have no marketing and sales organization.

If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell mavodelpar and any future product candidates, we may not be able to generate product revenues.

Risks Related to Our Reliance on Third Parties

We depend on the vTv License Agreement, and termination of this license could result in the loss of significant rights, which would harm our business.

We rely on third parties to conduct, supervise, and monitor our clinical trials.

If these third parties do not successfully carry out their contractual duties, meet rigorously enforced regulatory requirements, or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize mavodelpar.

We rely completely on third parties to manufacture our preclinical and clinical drug supplies and we intend to rely on third parties to produce commercial supplies of mavodelpar and any future product candidates, if approved, and these third parties may fail to obtain and maintain regulatory approval for their facilities, fail to provide us with sufficient quantities of drug product or fail to do so at acceptable quality levels or prices.

Risks Related to Our Intellectual Property

Our success depends on our ability to obtain and maintain sufficient intellectual property protection for mavodelpar, any future product candidates, and other proprietary technologies.

We face many risks and uncertainties, as more fully described in this section under the heading “Risk Factors.” Some of these risks and uncertainties are summarized below.

• We have incurred significant net losses since our inception in 2014 and anticipate that we will continue to incur net losses for the foreseeable future.

• Our activities to evaluate and pursue potential strategic alternatives may not result in any definitive transaction or enhance stockholder value.

• If we fail to achieve the expected financial and operational benefits of our recent cash preservation activities, our business and financial results may be harmed.

• We cannot ensure that patent rights relating to inventions described and claimed in our pending patent applications will issue or that patents based on our patent applications will not be challenged and rendered invalid and/or unenforceable.

If the scope of any patent protection we obtain is not sufficiently broad, or if we lose any of our patent protection and/or other market exclusivity, our ability to prevent our competitors from commercializing similar or identical product candidates may be adversely affected.

We may not be able to protect our intellectual property rights throughout the world.

If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties, such as the vTv License Agreement, or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.

We may be involved in lawsuits to protect or enforce our patents or the patents of our licensors, which could be expensive, time-consuming, and unsuccessful.

Further, our issued patents could be found invalid or unenforceable if challenged in court, and we may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.

Risks Related to Ownership of Our Common Stock

• If we fail to satisfy applicable listing standards, our common stock may be delisted from the Nasdaq Global Market.

• Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

An investment in shares of our common stock involves a high degree of risk.

You should carefully consider the risks described below, as well as the other information in this Quarterly Report on Form 10-Q, including our consolidated financial statements and the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations”

before deciding whether to purchase, hold or sell shares of our common stock.

The occurrence of any of the risks described below could harm our business, financial condition, results of operations, growth prospects, and/or stock price or cause our actual results to differ materially from those contained in forward-looking statements we have made in this Quarterly Report on Form 10-Q and those we may make from time to time.

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Risks Related to Our Business and Industry

We have incurred significant net losses since our inception in 2014 and anticipate that we will continue to incur significant net losses for the foreseeable future.

We have identified conditions and events that raise substantial doubt about our ability to continue as a going concern.*

We are a clinical-stage pharmaceutical company founded in 2014, and our operations to date have focused primarily on raising capital, establishing and protecting our intellectual property portfolio, organizing and staffing our company, business planning, and conducting preclinical and clinical development of, and manufacturing development for, our only product candidate, mavodelpar.

Additionally, as an organization, we have not yet demonstrated an ability to successfully complete clinical development, obtain regulatory approvals, manufacture a commercial-scale product, or conduct sales and marketing activities necessary for successful commercialization.

As we build our capabilities and expand our organization, we have not yet demonstrated an ability to overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the pharmaceutical area.

We have incurred significant net losses since our inception in 2014 and anticipate that we will continue to incur net losses for the foreseeable future.*

We are a pharmaceutical company founded in 2014.

Prior to the recent suspension of our development activities for mavodelpar announced on December 14, 2023, our operations focused primarily on raising capital,

establishing and protecting our intellectual property portfolio, organizing and staffing our company, business planning, and conducting preclinical and clinical development of, and manufacturing development for, our only product candidate, mavodelpar.

As an organization, we have not yet demonstrated an ability to successfully complete clinical development, obtain regulatory approvals, manufacture a commercial-scale product, or conduct sales and marketing activities necessary for successful commercialization.

Further, we have not yet demonstrated an ability to overcome many of the risks and uncertainties frequently encountered by companies in new and rapidly evolving fields, particularly in the pharmaceutical area.

Consequently, any predictions about our future performance may not be as accurate as they would be if we had a history of successfully developing and commercializing pharmaceutical products.

Investment in pharmaceutical 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 effectiveness in the targeted indication 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 to date, and we continue to incur significant research and development and other expenses related to our ongoing operations.

We have no products approved for commercial sale and have not generated any revenue to date, and we continue to incur expenses related to our ongoing operations.

As a result, we are not profitable and have incurred significant net losses since our inception.

If mavodelpar is not successfully developed and approved in the United States or Europe, we may never generate any revenue.

For the nine months ended September 30, 2023 and 2022, we reported a net loss of $53.8 million and $38.4 million, respectively.

As of September 30, 2023, we had an accumulated deficit of $190.5 million.

We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we continue our clinical development of, and seek regulatory approvals for, mavodelpar and any future product candidates.

We may never generate any revenue.

For the three months ended March 31, 2024 and 2023, we reported a net loss of $8.4 million and $15.1 million, respectively.

As of March 31, 2024, we had an accumulated deficit of $226.9 million.

We expect to continue to incur significant losses for the foreseeable future.

We may 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 revenues.

Our prior net losses and expected future net losses have had and will continue to have an adverse effect on our stockholders’

equity and working capital.

Because of the numerous risks and uncertainties associated with drug development, we are unable to accurately predict the timing or amount of increased expenses, or when, if at all, we will be able to achieve profitability.

The uncertainties around our ability to obtain additional funding raise substantial doubt regarding our ability to continue as a going concern for a period of twelve months following the date that these consolidated financial statements were issued.

See Note 1 of Notes to Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for a detailed discussion.

We will need substantial additional capital to develop and commercialize mavodelpar and any future product candidates and implement our operating plan.

If we fail to complete additional financings, we may be forced to delay, reduce or eliminate our product development programs or commercialization efforts.*

Our prior net losses and expected future net losses have had and will continue to have an adverse effect on our stockholders’ equity and working capital.

Because of the numerous risks and uncertainties associated with our business, we are unable to accurately predict the timing or amount of increased expenses, or when, if at all, we will be able to achieve profitability.

Our activities to evaluate and pursue potential strategic alternatives may not result in any definitive transaction or enhance stockholder value.

Following the suspension of development activities of our only product candidate, mavodelpar, we have begun evaluating and exploring a variety of strategic alternatives focused on maximizing stockholder value, including, but not limited to, a merger, sale, other business combination, a strategic partnership with one or more parties, or the licensing, sale or divestiture of our assets.

Our ability to successfully execute on a strategic alternative is dependent on a number of factors and we may not be able to execute upon a transaction or other strategic alternative upon favorable terms within an advantageous timeframe and recognize significant value for these assets, if at all.

Additionally, the negotiation and consummation of a transaction or other strategic alternative may be costly and time-consuming.

Any executed strategic alternative may not result in anticipated savings or other economic benefits, could result in total costs and expenses that are greater than expected, could make it more difficult to attract and retain qualified personnel and may disrupt our operations, each of which could have a material adverse effect on our business.

The current market price of our common stock may reflect a market assumption that a strategic alternative will occur, and a failure to complete a strategic alternative could result in negative investor perceptions and could cause a decline in the market price of our common stock, which could adversely affect our ability to access the equity and financial markets, as well as our ability to explore and enter into different strategic alternatives.

There can be no certainty that any strategic alternative will be completed, be on attractive terms, enhance stockholder value or deliver the anticipated benefits, and successful integration or execution of the strategic alternatives will be subject to additional risks.

In addition, potential strategic alternatives that require stockholder approval may not be approved by our stockholders.

If we do not successfully consummate a strategic alternative, our Board of Directors may decide to pursue a dissolution and liquidation of our company.

In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such liquidation, the amount of cash that will need to be reserved for commitments and contingent liabilities.

Depending on these factors, the

amount available for distribution to our common stockholders could be as low as $0.00 and result in a total loss of investment to our stockholders.

If we fail to achieve the expected financial and operational benefits of our recent cash preservation activities, our business and financial results may be harmed.

Following the suspension of development activities of our only product candidate, mavodelpar, we implemented a reduction in workforce in December 2023 and February 2024, which resulted in approximately $4.1 million in severance and continuation of benefit expenses.

The estimates of the costs we expect to incur, and the successful implementation of the restructuring activities pursuant to the cash preservation activities, are subject to a number of assumptions, risks and uncertainties, and actual results may differ from the above-described estimates.

We may also incur additional costs not currently contemplated due to events that may occur as a result of, or that are associated with, the cash preservation activities.

Restructuring activities may also result in a loss of continuity, accumulated knowledge and inefficiency during transitional periods and thereafter.

In addition, restructurings can require a significant amount of time and focus from management and other employees, which may divert attention from our core business activities.

As a result of the negative data from our STRIDE clinical study and the reductions in our workforce that we implemented in December 2023 and February 2024, we may not be successful in retaining key employees.

If we are unable to retain our remaining staff, our ability to identify and evaluate and pursue strategic alternatives and consummate any strategic alternative will be seriously jeopardized.

We implemented a reduction in workforce in December 2023 and February 2024, and currently have eight full-time employees remaining.

Our cash preservation activities may yield unintended consequences, such as attrition beyond our reductions in workforce and reduced employee morale which may cause our remaining employees to seek alternate employment.

Competition among biotechnology companies for qualified employees is intense.

Following the suspension of development activities for mavodelpar, our ability to retain our key employees is critical to our ability to effectively manage our resources to consummate a potential strategic transaction.

In addition, as a result of the workforce reductions, we face an increased risk of employment litigation.

If we pursue further development of any other product candidates, we will need substantial additional capital to develop and commercialize such product candidates and implement any such operating plan.

If we fail to raise additional capital, we may be unable to begin or forced to delay, reduce or eliminate any product development programs or commercialization efforts.*

Our operations have consumed substantial amounts of cash since our inception.

We expect to continue to spend substantial amounts of capital to continue the clinical development of, and seek regulatory approval for, mavodelpar and any future product candidates.

We will require significant additional amounts of capital in order to prepare for commercialization, and, if approved, to launch and commercialize mavodelpar.

As of September 30, 2023, we had cash, cash equivalents and short-term investments of $125.6 million.

Based on our current operating plan, we believe that our cash, cash equivalents and short-term investments as of September 30, 2023, will be sufficient to fund operations through the potential submission of a new drug application for mavodelpar for the treatment of PMM in the United States anticipated in the first half of 2024.

In December 2023, we suspended the development activities of our only product candidate, mavodelpar, and implemented cash preservation activities, including substantial workforce reductions.

However, if we pursue further development of any future product candidates, we will require significant additional amounts of capital in order to prepare for commercialization, and, if approved, to launch and commercialize such product candidates.

As of March 31, 2024, we had cash, cash equivalents and short-term investments of $82.8 million.

Based on our current operating plan, we believe that our cash, cash equivalents and short-term investments as of March 31, 2024 will enable us to fund our operating expenses and capital expenditure requirements through at least the next 12 months.

However, changing circumstances may cause us to consume capital significantly faster than we currently anticipate, and we may need to spend more money than currently expected because of circumstances beyond our control.

Our future capital requirements will depend on many factors, including:

the scope, progress, results and costs of clinical trials and preclinical studies for mavodelpar;

• the success of our activities to evaluate and pursue strategic alternatives;

• the scope, progress, results and costs of clinical trials and preclinical studies for any product candidates;

• the scope, prioritization and number of our research and indications we pursue;

the costs and timing of manufacturing for our product candidate, mavodelpar;

the costs, timing, and outcome of regulatory review of mavodelpar;

the timing and amount of the milestone or other payments we must make to vTv Therapeutics and any future licensors;

• the costs and timing of manufacturing for any product candidates;

• the costs, timing, and outcome of regulatory review of any product candidates;

• the timing and amount of any future milestone or other payments to licensors;

• the terms and timing of establishing and maintaining collaborations, licenses and other similar arrangements;

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• our ability to achieve sufficient market acceptance, coverage and adequate reimbursement from third-party payors and adequate market share and revenue for any approved products;

the costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory approvals to market our product candidate.

In any event, we will require additional capital for the further development and commercialization of mavodelpar and any future product candidates and may need to raise additional funds sooner if we choose to expand more rapidly than we presently anticipate.

• the costs of establishing or contracting for sales and marketing capabilities if we obtain regulatory approvals to market any product candidates.

In any event, we will require additional capital for the development and commercialization of any product candidates.

In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans.

Until such time as we can generate significant revenue from sales of our product candidate, if ever, we expect to finance our operations through public or private equity offerings or debt financings, credit or loan facilities, collaborations, strategic alliances, licensing arrangements or a combination of one or more of these funding sources.

Until such time as we can generate significant revenue from sales of any product candidates, if ever, we expect to finance our operations through public or private equity offerings or debt financings, credit or loan facilities, collaborations, strategic alliances, licensing arrangements or a combination of one or more of these funding sources.

Additional funds may not be available to us on acceptable terms or at all.

In May 2022, we entered into the 2022 ATM Facility with Leerink under which we could offer and sell, from time to time, at our sole discretion, up to $20.0 million in shares of our common stock.

As of September 30, 2023,

the remaining capacity under the 2022 ATM Facility was approximately $18.8 million in shares of common stock.

In November 2023, we terminated the 2022 ATM Facility.

In May 2023, we completed a public offering in which we sold an aggregate of 7,906,250 shares of common stock, which included the full exercise of the underwriters’

option to purchase an additional 1,031,250 shares of common stock, at a price of $8.00 per share.

Total net proceeds from this offering, after deducting underwriting discounts and commissions and offering expenses, were approximately $58.9 million.

Also, in May 2023, we completed the Private Placement in which we sold an aggregate of 625,000 shares of common stock to Abingworth, a holder of more than 5% of our common stock, at a price of $8.00 per share.

Total net proceeds from the Private Placement, after deducting advisor fees and other estimated fees and expenses, were approximately $4.7 million.

In November 2023, we entered into the 2023 ATM Facility with Leerink under which we may offer and sell, from time to time, at our sole discretion, up to $100.0 million in shares of our common stock.

We have not yet sold any shares of our common stock under the 2023 ATM Facility.

Our ability to raise additional funds may be adversely impacted by potential worsening global economic conditions and disruptions to, and volatility in, the credit and financial markets in the United States and worldwide, including those resulting from armed conflicts, infectious diseases, bank failures, actual or perceived changes in interest rates and economic inflation.

If we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly delay, scale back, or discontinue the development or commercialization of mavodelpar or other research and development initiatives.

We also could be required to seek collaborators for mavodelpar and any future product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to mavodelpar and any future product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves.

We currently depend entirely on the success of mavodelpar, which is our only product candidate.

We currently only have one product candidate, mavodelpar, and our business and future success depends entirely on our ability to develop, obtain regulatory approval for, and then successfully commercialize, mavodelpar, which is currently in clinical development in patients with PMM and patients with LC-FAOD.

This may make an investment in our company riskier than similar companies that have multiple product candidates in active development that may be able to better sustain failure of a lead product candidate.

The success of mavodelpar will depend on several factors, including the following:

successful enrollment in our ongoing and planned clinical trials and completion of such clinical trials with favorable results and passing applicable good clinical practice (GCP) inspections;

acceptance by the FDA and EMA of data from our STRIDE, STRIDE AHEAD, or future clinical trials in patients with PMM;

demonstration of a positive risk/benefit profile for mavodelpar in the relevant patient population, to the satisfaction of applicable regulatory authorities;

meeting chemistry, manufacturing and controls (CMC) requirements and passing applicable good manufacturing practice (GMP) inspections;

We also could be required to seek collaborators for any product candidates at an earlier stage than otherwise would be desirable or on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to product candidates in markets where we otherwise would seek to pursue development or commercialization ourselves .

We are not currently pursuing further clinical development of our only product candidate, mavodelpar.

If we or a third party pursues further development of mavodelpar or any future product candidates and are unable to advance such product candidates through clinical development, obtain regulatory approvals, and ultimately commercialize such product candidates, or experience significant delays in doing so, our business will be materially harmed.

We are not currently pursuing further clinical development of our only product candidate, mavodelpar.

The success of mavodelpar, if further development is pursued, and any future product candidates will depend on several factors, including the following:

• successful enrollment in any future clinical trials and completion of such clinical trials with favorable results and passing applicable good clinical practice (GCP) inspections;

• acceptance by the U.S.

Food and Drug Administration (FDA) and European Medicines Agency (EMA) of data from such future clinical trials;

• demonstration of a positive risk/benefit profile for such product candidate in the relevant patient population, to the satisfaction of applicable regulatory authorities;

• meeting chemistry, manufacturing and controls (CMC) requirements and passing applicable good manufacturing practice inspections;

• the outcome, timing, and cost of meeting regulatory requirements established by the FDA, EMA, and other comparable foreign regulatory authorities;

receipt of marketing approvals from applicable regulatory authorities, including one or more NDA from the FDA and marketing authorizations from the European Commission (based on the opinion of the Committee for Medicinal Products for Human Use (CHMP) of the EMA, and maintaining such approvals);

• receipt of marketing approvals from applicable regulatory authorities, including one or more new drug application (NDA) from the FDA and marketing authorizations from the European Commission (based on the opinion of the Committee for Medicinal Products for Human Use (CHMP) of the EMA, and maintaining such approvals);

• establishing commercial manufacturing relationships and receiving/importing commercial supplies approved by the FDA and other regulatory authorities from any future third-party manufacturer;

establishing sales, marketing, and distribution capabilities and commercializing mavodelpar, if approved, whether alone or in collaboration with others;

• establishing sales, marketing, and distribution capabilities and commercializing such product candidate, if approved, whether alone or in collaboration with others;

• acceptance, if and when approved, by patients, the medical community and third-party payors;

• obtaining and maintaining third-party coverage and adequate reimbursement;

establishing and maintaining patent and trade secret protection and regulatory exclusivity for mavodelpar;

maintaining an acceptable risk/benefit safety profile of mavodelpar following approval;

maintaining and growing an organization of people who can develop and commercialize mavodelpar.

If we do not achieve one or more of these factors, many of which are beyond our control, in a timely manner or at all, we could experience significant delays or an inability to develop, obtain regulatory approvals or commercialize mavodelpar.

Even if regulatory approvals are obtained, we may never be able to successfully commercialize mavodelpar.

In addition, we will need to transition at some point from a company with a development focus to a company capable of supporting commercial activities.

• establishing and maintaining patent and trade secret protection and regulatory exclusivity for such product candidate;

• maintaining an acceptable risk/benefit safety profile of such product candidate following approval;

• maintaining and growing an organization of people who can develop and commercialize such product candidate.

If we or a third party does not achieve one or more of these factors, many of which are beyond our control, in a timely manner or at all, we or a third party could experience significant delays or an inability to develop, obtain regulatory approvals or commercialize any product candidates.

Even if regulatory approvals are obtained, we or a third party may never be able to successfully commercialize any product candidates.

In addition, we will need to transition at some point from a company with a historical development focus to a company capable of supporting commercial activities.

We may not be successful in such a transition.

Accordingly, we may not be able to generate sufficient revenue through the sale of mavodelpar to continue our business.

Our clinical trials may fail to adequately demonstrate the safety and efficacy of mavodelpar, which could prevent or delay regulatory approval and commercialization.*

Before obtaining regulatory approvals for the commercial sale of a product candidate, we must demonstrate through lengthy, complex, and expensive preclinical testing and clinical trials that a product candidate is both safe and effective for use in each target indication.

Clinical trials often fail to demonstrate safety and efficacy of the product candidate studied for the target indication.

Most product candidates that commence clinical trials are never approved by regulatory authorities for commercialization.

Further, we have used patient reported outcomes in our clinical trials, including our Phase 1b study of mavodelpar in PMM, such as the MFIS, the BPI, and the 36-Item Short Form Health Survey that assesses the general health of patients.

Such patient reported outcomes are based on subjective patient feedback and can be inherently difficult to evaluate.

Such patient reported outcomes can be influenced by factors outside of our control and can vary widely from day to day for a particular patient, and from patient-to-patient and site-to-site within a clinical trial.

It is possible that the FDA or other regulatory agencies will not accept such patient reported outcomes, and any such non-acceptance may require changes to existing trial protocols or the conduct of additional clinical trials.

Moreover, our ongoing pivotal STRIDE study and our completed Phase 1b studies in patients with PMM and LC-FAOD utilize a 12MWT as an assessment of endurance and exercise tolerance in patients rather than the six-minute walk test (6MWT) which is more commonly used.

Preclinical and clinical drug development is a lengthy and expensive process with uncertain outcomes, and results of earlier studies and trials may not be predictive of future trial results.*

Preclinical and clinical testing is expensive and can take many years to complete, and its outcome is inherently uncertain.

A failure of one or more preclinical or clinical trials can occur at any stage of testing.

The results of preclinical studies and early clinical trials of mavodelpar may not be predictive of the results of

later-stage clinical trials.

In addition, product candidates in later stages of clinical trials may fail to show a positive risk/benefit profile despite having progressed through preclinical studies and initial clinical trials.

Also, because there are no approved drugs for PMM and only one approved product, a caloric supplement, for LC-FAOD, there are no regulatory precedents by which we can be guided with respect to regulatory endpoints.

As such, we cannot be certain that our ongoing and planned clinical trials will be successful.

Many companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to the inability to enroll patients in rare disease clinical trials and the lack of efficacy or safety profiles, notwithstanding promising results in earlier trials.

Moreover, preclinical and clinical data is often susceptible to varying interpretations and analyses.

Our completed clinical trials have involved a limited number of patients and clinical trial sites and have been open-label or uncontrolled trials.

We may face significant setbacks as we expand the number of patients and clinical sites, potentially affecting the efficiency of trial execution and the consistency of trial data, which may delay or prevent regulatory approval of mavodelpar.

Any safety concerns observed in any one of our clinical trials in our targeted indications could limit the prospects for regulatory approval of mavodelpar in those and other indications, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Further, if patients drop out of our clinical trials, miss scheduled doses or follow-up visits, or otherwise fail to follow clinical trial protocols, the integrity of data from our clinical trials may be compromised or not accepted by the FDA, EMA or other regulatory authorities, which would represent a significant setback for the applicable program.

If we encounter difficulties enrolling patients in our clinical trials, our clinical development activities could be delayed or otherwise adversely affected.*

We may not be able to initiate or continue our clinical trials for mavodelpar and any future product candidates if we are unable to identify and enroll a sufficient number of eligible patients to participate in these trials as required by the FDA, EMA and comparable foreign regulatory authorities.

Patient enrollment, a significant factor in the timing of clinical trials, is affected by many factors including the size and nature of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the clinical trial, the design of the clinical trial, competing clinical trials, and clinicians’

and patients’

perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.

In particular, each clinical indication for which we are evaluating mavodelpar is a rare genetic disease with limited patient populations from which to draw participants in clinical trials.

We will be required to identify and enroll a sufficient number of patients with the disease under investigation for our clinical trials of mavodelpar.

Potential patients may not be adequately diagnosed or identified with the diseases which we are targeting or may not meet the entry criteria for our clinical trials.

Additionally, other pharmaceutical companies with more resources and greater experience in drug development and commercialization are targeting similar genetic mitochondrial diseases we are targeting and may do so with respect to additional indications we target in the future.

Any recruiting of clinical trial patients by competitors from the patient populations we are targeting in our ongoing or future clinical trials may delay or make it more difficult to fully enroll our clinical trials.

Our inability to enroll a sufficient number of patients for any of our current or future clinical trials would result in significant delays or may require us to abandon one or more clinical trials altogether.

In addition, we rely on CROs and clinical trial sites to ensure proper and timely conduct of our clinical trials and, while we have agreements governing their services, we will have limited influence over their actual performance.

We are unable to predict with confidence the likelihood or duration of such patient enrollment delays and difficulties.

If patient enrollment is delayed for an extended period of time, our clinical trials could be delayed or otherwise adversely affected.

Before we can initiate clinical trials for mavodelpar or any future product candidates, we must submit the results of preclinical studies to the FDA or comparable foreign regulatory authorities, along with other information, including information about CMC, and our proposed clinical trial protocol, as part of an investigational new drug application or similar regulatory filing under which we must receive authorization to proceed with clinical development.

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

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

In addition, we may rely in part on preclinical, clinical and quality data generated by CROs and other third parties for regulatory submissions for mavodelpar and any future product candidates.

While we have or will have agreements governing these third parties’

services, we have limited influence over their actual performance.

If these third parties do not make data available to us, or, if applicable, do not make regulatory submissions in a timely manner, in each case pursuant to our agreements with them, our development programs may be significantly delayed, and we may need to conduct additional clinical trials or collect additional data independently.

In either case, our development costs would increase.

We do not know whether our current or any future clinical trials will begin on time, need to be redesigned, enroll an adequate number of patients, or be completed on schedule, if at all.

The commencement and completion of clinical trials can be delayed for a number of reasons, including delays related to:

obtaining regulatory authorizations to commence a clinical trial or reaching a consensus with regulatory authorities on clinical trial design or implementation;

any failure or delay in reaching an agreement with CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;

obtaining approval from one or more institutional review boards (IRBs) or Ethics Committees (ECs);

IRBs or ECs refusing to approve, suspending or terminating the clinical trial at an investigational site, precluding enrollment of additional subjects, or withdrawing their approval of the clinical trial;

changes to clinical trial protocols;

selection of clinical endpoints that require prolonged periods of clinical observation or analysis of the resulting data;

sites deviating from clinical trial protocol or dropping out of a clinical trial;

the FDA or comparable foreign regulatory authorities’

failure to accept our proposed manufacturing processes and suppliers and/or requirement to provide additional information regarding our manufacturing processes before providing marketing authorization;

manufacturing sufficient quantities of mavodelpar or any future product candidates or obtaining sufficient quantities of combination therapies for use in clinical trials;

subjects failing to enroll or remain in our trials at the rate we expect, or failing to return for post-treatment follow-up;

subjects choosing an alternative treatment for the indications for which we are developing mavodelpar and any future product candidates, or participating in competing clinical trials;

lack of adequate funding to continue our clinical trials;

subjects experiencing severe or unexpected drug-related adverse effects;

occurrence of serious adverse events (SAEs) in clinical trials of the same class of agents conducted by other companies;

inability to establish confirmatory evidence with the regulatory agencies where only a single arm trial is feasible to conduct in certain rare disease populations;

a facility manufacturing mavodelpar or any of its 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 (cGMP) regulations or other applicable requirements, or infections or cross-contaminations of mavodelpar in the manufacturing process;

any changes to our manufacturing process, suppliers or formulation that may be necessary or desired;

third-party vendors not performing manufacturing and distribution services in a timely manner or to sufficient quality standards;

supply chain disruptions such as scarcity of raw materials used to manufacture mavodelpar;

impact of possible trade disputes with countries where mavodelpar or its ingredients are manufactured;

third-party clinical investigators losing the licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or consistent with the clinical trial protocol, GCP or other regulatory requirements;

third-party contractors not performing data collection or analysis in a timely or accurate manner;

third-party contractors becoming 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.

We could encounter delays if a clinical trial is suspended or terminated by us, by the IRBs or ECs of the institutions in which such trials are being conducted or by the FDA or comparable foreign regulatory authorities.

Such authorities may impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or comparable foreign regulatory authorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefit from using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial.

Currently, the FDA and other foreign regulatory agencies have placed a class-wide requirement on all PPAR agonists asking sponsors to complete the two-year rat and mouse carcinogenicity studies before conducting studies longer than six-months in duration.

As a result, it may take longer to enroll patients in the long-term safety trial, which could adversely affect the timing of our regulatory submissions for marketing approval.

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 IRBs for reexamination, which may impact the costs, timing, or successful completion of a clinical trial.

Further, conducting clinical trials in foreign countries, which we are doing for mavodelpar and expect to do for any future product candidates, presents additional risks that may delay completion of our clinical trials.

These risks include the failure of enrolled patients in foreign countries to adhere to clinical protocol as a result of differences in healthcare services or cultural customs, managing additional administrative burdens associated with foreign regulatory schemes, as well as political and economic risks relevant to such foreign countries.

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

Under certain

circumstances, we may be required to report some of these relationships to the FDA or comparable foreign regulatory authorities.

The FDA or comparable foreign regulatory authority may conclude that a financial relationship between us and a principal investigator has created a conflict of interest or otherwise affected interpretation of the trial.

The FDA or comparable foreign regulatory authority may therefore question the integrity of the data generated at the applicable clinical trial site and the utility of the clinical trial itself may be jeopardized.

This could result in a delay in approval, or rejection, of our marketing applications by the FDA or comparable foreign regulatory authority, as the case may be, and may ultimately lead to the denial of marketing approval of mavodelpar.

If we experience delays in the completion of, or termination of, any clinical trial of mavodelpar or any future product candidates, the commercial prospect of mavodelpar or any future product candidates will be harmed, and our ability to generate product revenue will be delayed.

Moreover, any delays in completing our clinical trials will increase our costs, slow down our product candidate development and approval process and jeopardize our ability to commence product sales and generate revenue.

In addition, many of the factors that cause, or lead to, termination or suspension of, or a delay in the commencement or completion of, clinical trials may also ultimately lead to the denial of regulatory approval of mavodelpar or any future product candidates.

Further, delays to our clinical trials that occur as a result could shorten any period during which we may have the exclusive right to commercialize mavodelpar and our competitors may be able to bring products to market before we do, and the commercial viability of mavodelpar could be significantly reduced.

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

Use of mavodelpar or any future product candidates could be associated with side effects, adverse events or other properties that could delay or prevent regulatory approval or result in significant negative consequences following marketing approval, if any.

As is the case with pharmaceuticals generally, it is likely that there may be side effects and adverse events associated with the use of mavodelpar and any future product candidates.

Results of our clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

Undesirable side effects caused by mavodelpar and any future product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities.

If drug-related SAEs are observed, our trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval for mavodelpar for any or all targeted indications.

Accordingly, we may not be able to generate sufficient revenue through the sale of any product candidates to continue our business.

Use of any product candidates could be associated with side effects, adverse events or other properties that could delay or prevent regulatory approval or result in significant negative consequences following marketing approval, if any.

As is the case with pharmaceuticals generally, it is likely that there may be side effects and adverse events associated with the use of any product candidates.

We are not currently pursuing further clinical development of our only product candidate, mavodelpar.

However, if we or a third party decides to pursue further development of mavodelpar or any future product candidates, results of such clinical trials could reveal a high and unacceptable severity and prevalence of side effects or unexpected characteristics.

Undesirable side effects caused by such product candidates could cause us or regulatory authorities to interrupt, delay or halt clinical trials and could result in a more restrictive label or the delay or denial of regulatory approval by the FDA or other comparable foreign authorities.

If drug-related serious adverse events are observed, such trials could be suspended or terminated, and the FDA or comparable foreign regulatory authorities could order us to cease further development of or deny approval for such product candidates for any or all targeted indications.

The drug-related side effects could affect patient recruitment or the ability of enrolled patients to complete the trial or result in potential product liability claims.

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

Additionally, if mavodelpar and any future product candidates receive marketing approval, and we or others later identify undesirable side effects caused by such product candidate, a number of potentially significant negative consequences could result, including:

Additionally, if any product candidates receive marketing approval, and we or others later identify undesirable side effects caused by such product candidate, a number of potentially significant negative consequences could result, including:

• we may be forced to suspend marketing of that product, or decide to remove the product from the marketplace;

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• the product may become less competitive, and our reputation may suffer.

Any of these events could prevent us from achieving or maintaining market acceptance of mavodelpar and any future product candidates, if approved, and could significantly harm our business, results of operations, and prospects.

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

The regulatory approval process is lengthy, expensive and uncertain, and we may be unable to obtain regulatory approval for our product candidates under applicable regulatory requirements.

The denial or delay of any such approval would delay commercialization of our product candidates and adversely impact our ability to generate revenue, our business and our results of operations.*

The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing, and distribution of mavodelpar is subject to extensive regulation by the FDA in the United States and by comparable foreign regulatory authorities in foreign markets.

In the United States, we are not permitted to market mavodelpar and any future product candidates until we receive regulatory approval from the FDA.

The denial or delay of any such approval would delay commercialization of our or any third party’s product candidates and adversely impact our ability to generate revenue, our business and our results of operations.

The clinical development, manufacturing, labeling, storage, record-keeping, advertising, promotion, import, export, marketing, and distribution of any product candidates is subject to extensive regulation by the FDA in the United States and by comparable foreign regulatory authorities in foreign markets.

In the United States, we are not permitted to market any product candidates until we receive regulatory approval from the FDA.

The process of obtaining regulatory approval is expensive, often takes many years following the commencement of clinical trials and can vary substantially based upon the type, complexity, and novelty of the product candidates involved, as well as the target indications and patient population.

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Despite the time and expense invested in clinical development of product candidates, regulatory approval is never guaranteed.

Neither we nor any future collaborator is permitted to market mavodelpar and any future product candidates in the United States until we receive approval of an NDA from the FDA.

Neither we nor any future collaborator is permitted to market any product candidates in the United States until we receive approval of an NDA from the FDA.

We have not previously submitted an NDA to the FDA, or similar drug approval filings to comparable foreign authorities.

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Results from nonclinical studies and clinical trials can be interpreted in different ways.

Even if we believe the nonclinical or clinical data for mavodelpar are promising, such data may not be sufficient to support approval by the FDA and comparable foreign regulatory authorities.

The FDA or comparable foreign regulatory authorities, as the case may be, may also require us to conduct additional preclinical studies or clinical trials for mavodelpar and any future product candidates either prior to or post-approval, or may object to elements of our clinical development program.

Mavodelpar and any future product candidates could fail to receive regulatory approval for many reasons, including the following:

serious and unexpected drug-related side effects may be experienced by participants in our clinical trials or by people using drugs similar to or in the same class as mavodelpar and any future product candidates;

Even if we believe the nonclinical or clinical data for any product candidates are promising, such data may not be sufficient to support approval by the FDA and comparable foreign regulatory authorities.

The FDA or comparable foreign regulatory authorities, as the case may be, may also require us to conduct additional preclinical studies or clinical trials for any product candidates either prior to or post-approval, or may object to elements of our clinical development program.

Any product candidates could fail to receive regulatory approval for many reasons, including the following:

• serious and unexpected drug-related side effects may be experienced by participants in any future clinical trials or by people using drugs similar to or in the same class as such product candidates;

• 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;

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• the results of clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval;

we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

• we may be unable to demonstrate that a product candidate’s clinical and other benefits outweigh its safety risks;

• 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 mavodelpar, and any future product candidates may not be sufficient to satisfy the FDA or comparable foreign regulatory authorities to support the submission of an NDA or other comparable submissions in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere;

• the data collected from clinical trials of such product candidates may not be sufficient to satisfy the FDA or comparable foreign regulatory authorities to support the submission of an NDA or other comparable submissions in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere;

• the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies;

• the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.

Any of the above events could prevent us from achieving market approval of mavodelpar or any future product candidates and could substantially increase the costs of commercializing mavodelpar or any future product candidates.

The demand for mavodelpar or any future product candidates could also be negatively impacted by any adverse effects of a competitor’s product or treatment.

Any of the above events could prevent us from achieving market approval of any product candidates and could substantially increase the costs of commercializing such product candidates.

The demand for any product candidates could also be negatively impacted by any adverse effects of a competitor’s product or treatment.

Of the large number of drugs in development, only a small percentage successfully complete the FDA or foreign regulatory approval processes and are commercialized.

The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market mavodelpar and any future product candidates, which would significantly harm our business, financial condition, results of operations and prospects.

Even if we eventually complete clinical trials and receive approval of an NDA or foreign marketing application for mavodelpar and any future product candidates, the FDA or comparable foreign regulatory authority may grant approval contingent on the performance of costly additional clinical trials, including Phase 4 clinical trials, and/or the implementation of a risk evaluation and mitigation strategy (REMS) which may be required to ensure safe use of the drug after approval.

The lengthy approval process as well as the unpredictability of future clinical trial results may result in our failing to obtain regulatory approval to market any product candidates, which would significantly harm our business, financial condition, results of operations and prospects.

Even if we eventually complete clinical trials and receive approval of an NDA or foreign marketing application for any product candidates, the FDA or comparable foreign regulatory authority may grant approval contingent on the performance of costly additional clinical trials, including Phase 4 clinical trials, and/or the implementation of a REMS which may be required to ensure safe use of the drug after approval.

The FDA or the comparable foreign regulatory authority also may approve a product candidate for a more limited indication or patient population than we originally requested, and the FDA or comparable foreign regulatory authority may not approve the labeling that we believe is necessary or desirable for the successful commercialization of a product.

Any delay in obtaining, or inability to obtain, applicable regulatory approval would delay or prevent commercialization of that product candidate and would materially adversely impact our business and prospects.

Our business has been and could continue to be adversely affected by the COVID-19 pandemic in regions where we or third parties on which we rely have significant manufacturing facilities, clinical trial sites or other business operations.

The COVID-19 pandemic could adversely affect our operations, as well as the business or operations of our manufacturers, CROs, or other third parties with whom we conduct business.*

Our business has been and could continue to be adversely affected by the COVID-19 pandemic and we may experience ongoing disruptions that could severely impact our business and clinical trials.

Our clinical trials have been, and may in the future be, affected by the COVID-19 pandemic.

For example, as a result of the COVID-19 pandemic, our Phase 1b study of mavodelpar in patients with PMM was closed early and we temporarily paused enrollment in our other Phase 1b studies.

In particular, we have and could continue to

experience slowdown of patient enrollment and patient scheduled visits in all of our ongoing and future clinical trials.

If patient enrollment is delayed for an extended period of time, our ongoing and planned clinical trials could be delayed or otherwise adversely affected.

Similarly, our ability to recruit and retain principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19, may be adversely impacted.

In addition, we may encounter a shortage in supplies of, or in delays in shipping, our study drug or other components of the clinical trial vital for successful conduct of the trial.

Further, the successful conduct of our clinical trials depends on retrieving laboratory data from patients.

Any failure by the laboratories with which we work to send us such data could impair the progress of such clinical trials.

These events could delay our clinical trials, increase the cost of completing our clinical trials, and negatively impact the integrity, reliability, or robustness of the data from our clinical trials.

We cannot predict future disruptions which may occur due to COVID-19.

We continue to monitor the status of COVID-19 and will adjust our strategy accordingly in order to mitigate the impact on our business operations.

Preliminary, interim and topline 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 interim, topline, or preliminary data from our clinical trials, including from our studies of mavodelpar in patients with PMM and LC-FAOD, which is based on a preliminary analysis 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 study or trial.

We are not currently pursuing further clinical development of our only product candidate, mavodelpar.

However, if we or a third party decides to pursue further development of mavodelpar or of any future product candidates, we may publicly disclose, from time to time, interim, topline, or preliminary data from such clinical trials, which is based on a preliminary analysis 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

study or 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.

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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 the material or otherwise appropriate information to include in our disclosure, and any information we determine not to disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product, product candidate, or our business.

If the interim, topline, 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, mavodelpar and any future product candidates may be harmed, which could harm our business, operating results, prospects, or financial condition.

If the size of the market opportunities in each of our target indications for mavodelpar and any future product candidates is smaller than we anticipate, we may not be able to achieve profitability and growth.

We focus our clinical development of mavodelpar on therapies for adult patients with genetic mitochondrial diseases with relatively small patient populations.

Given the relatively small number of patients who have the diseases that we

are targeting and intend to target with mavodelpar, it is critical to our ability to grow and become profitable that we continue to successfully identify patients with these rare genetic mitochondrial diseases.

In addition, our estimates of the patient populations for our target indications have been derived from a variety of sources, including the scientific literature, payor claims data, surveys of clinics, patient foundations, and market research, and may prove to be incorrect.

Further, new studies may change the estimated incidence or prevalence of these diseases.

The number of patients may turn out to be lower than expected.

The effort to identify patients with diseases we seek to treat is in early stages, and we cannot accurately predict the number of patients for whom treatment might be possible.

In addition, the potentially addressable patient population for PMM and LC-FAOD may be limited or may not be amenable to treatment with mavodelpar, if approved.

Further, even if we obtain significant market share for mavodelpar in PMM or LC-FAOD, we may never achieve profitability despite obtaining such significant market share, as other pharmaceutical companies with more resources and greater experience in drug development and commercialization are or may be targeting this same genetic mitochondrial disease.

We may not be successful in our efforts to expand our pipeline by identifying additional indications for which to investigate mavodelpar in the future.

We may expend our limited resources to pursue a particular indication or formulation for mavodelpar and fail to capitalize on product candidates, indications or formulations that may be more profitable or for which there is a greater likelihood of success.

Because we have limited financial and managerial resources, we are focused on specific indications for mavodelpar.

As a result, we may fail to generate additional clinical development opportunities for mavodelpar for a number of reasons, including, mavodelpar may in certain indications, on further study, be shown to have harmful side effects, limited to no efficacy, or other characteristics that suggest it is unlikely to receive marketing approval and achieve market acceptance in such additional indications.

While our initial focus is to advance mavodelpar for PMM to regulatory approval, we may plan to conduct several clinical trials for mavodelpar in parallel over the next several years, including multiple clinical trials in PMM and LC-FAOD, which may make our decision as to which additional indications to focus on more difficult.

As a result, we may forego or delay pursuit of opportunities with other indications that could have had greater commercial potential or likelihood of success.

However, we may focus on or pursue one or more of our target indications over other potential indications and such development efforts may not be successful, which would cause us to delay the clinical development and approval of mavodelpar.

Furthermore, research programs to identify additional indications for mavodelpar require substantial technical, financial, and human resources.

We are pursuing a tablet formulation for mavodelpar and may pursue additional formulations.

However, we may not successfully develop these additional formulations for chemistry-related, stability-related, or other reasons.

Our resource allocation decisions may cause us to fail to capitalize on viable commercial products or profitable market opportunities.

Our spending on current and future research and development programs for specific indications may not yield any commercially viable products.

Additionally, we may pursue additional in-licenses or acquisitions of development-stage assets or programs, which entails additional risk to us.

Identifying, selecting and acquiring promising product candidates requires substantial technical, financial, and human resources expertise.

Efforts to do so may not result in the actual acquisition or license of a particular product candidate, potentially resulting in a diversion of our management’s time and the expenditure of our resources with no resulting benefit.

For example, if we are unable to identify programs that ultimately result in approved products, we may spend material amounts of our capital and other resources evaluating, acquiring and developing products that ultimately do not provide a return on our investment.

If the interim, topline, 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, any product candidates may be harmed, which could harm our business, operating results, prospects, or financial condition.

Obtaining and maintaining regulatory approval for a product candidate in one jurisdiction does not mean that we will be successful in obtaining regulatory approval for that product candidate in other jurisdictions.

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 for a product candidate, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing and promotion of the product candidate in those countries.

Obtaining and maintaining regulatory approval for a product candidate in one jurisdiction does not guarantee that we will be able to obtain or maintain regulatory approval in any other jurisdiction, while a failure or delay in obtaining regulatory approval in one jurisdiction may have a negative effect on the regulatory approval process in others.

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 many 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 mavodelpar is also subject to approval.

We expect to submit a MAA to the EMA for approval of mavodelpar in the European Union (EU) for the treatment of PMM and other clinical indications if data support registration.

As with the FDA, obtaining an MAA, issued by the European Commission, based on the opinion of the CHMP of the EMA, is a similarly lengthy and expensive process.

Regulatory authorities in jurisdictions outside of the United States and the EU also have requirements for approval for product candidates with which we must comply prior to marketing in those jurisdictions.

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 mavodelpar in certain countries.

If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of mavodelpar will be harmed, which would adversely affect our business, prospects, financial condition, and results of operations.

As with the FDA, obtaining a Marketing Authorization Application, issued by the European Commission, based on the opinion of the CHMP of the EMA, is a similarly lengthy and expensive process.

Regulatory authorities in jurisdictions outside of the United States and the European Union (EU) also have requirements for approval for product candidates with which we must comply prior to marketing in those jurisdictions.

If we fail to comply with the regulatory requirements in international markets and/or receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of any product candidates will be harmed, which would adversely affect our business, prospects, financial condition, and results of operations.

We currently have no marketing and sales organization.

If we are unable to establish marketing and sales capabilities or enter into agreements with third parties to market and sell any product candidates, we may not be able to generate product revenues.

We currently do not have a commercial organization for the marketing, sales, and distribution of pharmaceutical products.

To commercialize mavodelpar and any future product candidates, we must build our marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services.

We intend to build a highly specialized commercial organization to support the commercialization of mavodelpar, if approved, in the United States and the EU.

The establishment and development of our own sales force or the establishment of a contract sales force to market mavodelpar and any future product candidates will be expensive and time-consuming and could delay any commercial launch.

We are not currently pursuing further clinical development of our only product

candidate, mavodelpar.

However, if we or a third party decides to pursue further development of mavodelpar or any future product candidate, which obtains approval for marketing, we will have to build our marketing, sales, distribution, managerial and other non-technical capabilities or make arrangements with third parties to perform these services.

The establishment and development of our own sales force or the establishment of a contract sales force to market any product candidates will be expensive and time-consuming and could delay any commercial launch.

Moreover, we may not be able to successfully develop this capability.

We will have to compete with other pharmaceutical and biotechnology companies to recruit, hire, train, and retain marketing and sales personnel.

We also face competition in our search for third parties to assist us with the sales and marketing efforts of mavodelpar.

To the extent we rely on third parties to commercialize mavodelpar, if approved, we may have little or no control over the marketing and sales efforts of such third parties and our revenues from product sales may be lower than if we had commercialized mavodelpar and any future product candidates ourselves.

In the event we are unable to develop our own marketing and sales force or collaborate with a third-party marketing and sales organization, we would not be able to commercialize mavodelpar or any future product candidates.

If we receive regulatory approval for mavodelpar and any future product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with any product.

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

The FDA may also require us to adopt a 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.

We will also face competition in our search for third parties to assist us with the sales and marketing efforts of any product candidates.

To the extent we rely on third parties to commercialize such product candidates, if approved, we may have little or no control over the marketing and sales efforts of such third parties and our revenues from product sales may be lower than if we had commercialized such product candidates ourselves.

In the event we are unable to develop our own marketing and sales force or collaborate with a third-party marketing and sales organization, we would not be able to commercialize any product candidates.

If we receive regulatory approval for any product candidates, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense, and we may be subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with any product.

We are not currently pursuing further clinical development of our only product candidate, mavodelpar.

However, if we or a third party decides to pursue further development of mavodelpar or any future product candidates, any regulatory approvals received may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including post-market studies or clinical trials, and surveillance to monitor safety and effectiveness.

The FDA may also require us to adopt a risk evaluation and mitigation strategy (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.

We or our collaborators may also be required to adopt a REMS or engage in similar actions, such as patient education, certification of health care professionals, or specific monitoring, if we or others later identify undesirable side effects caused by any product that we develop alone or with collaborators.

In addition, if the FDA or a comparable foreign regulatory authority approves a product candidate, the manufacturing, quality control, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export, and recordkeeping for the approved product will be subject to extensive and ongoing regulatory requirements.

The FDA and comparable foreign regulatory authorities also require submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with cGMP requirements and GCP for any clinical trials that we conduct post-approval.

The FDA and comparable foreign regulatory authorities also require submissions of safety and other post-marketing information and reports, registration, as well as continued compliance with current good manufacturing practice (cGMP) requirements and GCP for any clinical trials that we conduct post-approval.

Later discovery of previously unknown problems with a product candidate, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

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• seize or detain products, refuse to permit the import or export of products, or require us to initiate a product recall.

The occurrence of any event or penalty described above may inhibit our ability to commercialize mavodelpar and any future product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity.

The occurrence of any event or penalty described above may inhibit our ability to commercialize any product candidates and generate revenue and could require us to expend significant time and resources in response and could generate negative publicity.

Advertising and promotion of any product candidate that obtains approval in the United States will be heavily scrutinized by the FDA, the U.S.

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Any actual or alleged failure to comply with labeling and promotion requirements may result in fines, warning letters, mandates to corrective information to healthcare practitioners, injunctions, or civil or criminal penalties.

The FDA’s and other regulatory authorities’

policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval for mavodelpar and any future product candidates.

approval that we may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition, and results of operations.

The FDA’s and other regulatory authorities’ policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval for any product candidates.

If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition, and results of operations.

Disruptions at FDA and other U.S.

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If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Even if we obtain regulatory approval for mavodelpar and any future product candidates, mavodelpar and any future product candidates may not gain market acceptance among physicians, patients, healthcare payors and others in the medical community.

Mavodelpar and any future product candidates may not be commercially successful.

The commercial success of mavodelpar or any future product candidates, if approved, will depend significantly on the broad adoption and use of such product by physicians and patients for approved indications.

The degree of market acceptance of mavodelpar or any future products, if approved, will depend on a number of factors, including:

Even if we obtain regulatory approval for any product candidates, such product candidates may not gain market acceptance among physicians, patients, healthcare payors and others in the medical community.

We are not currently pursuing further clinical development of our only product candidate, mavodelpar.

However, if we or a third party decides to pursue further development of mavodelpar or any other product candidates that obtain regulatory approval, such product candidates may not be commercially successful.

The commercial success of such product candidates, if approved, will depend significantly on the broad adoption and use of such product by physicians and patients for approved indications.

The degree of market acceptance of such future products, if approved, will depend on a number of factors, including:

• the clinical indications for which such product candidate is approved;

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• the effectiveness of our sales and marketing efforts and those of any collaboration or distribution partner on whom we rely for sales in foreign jurisdictions.

If mavodelpar and any future product candidate is approved but fails to achieve market acceptance among physicians, patients, healthcare payors or others in the medical community, we will not be able to generate significant revenues, which would have a material adverse effect on our business, prospects, financial condition, and results of operations.

In addition, even if mavodelpar and any future product candidate gains acceptance, the markets for the treatment of patients with our target indications may not be as significant as we estimate.

If mavodelpar and any future product candidate is approved for marketing, and we are found to have improperly promoted off-label uses, we may become subject to prohibitions on the sale or marketing of mavodelpar and any future product candidates, significant fines, penalties, sanctions, or product liability claims, and our image and reputation within the industry and marketplace could be harmed.

The FDA, DOJ, and comparable foreign authorities strictly regulate the marketing and promotional claims that are made about pharmaceutical products, such as mavodelpar, if approved.

In particular, a product may not be promoted for uses or indications that are not approved by the FDA or comparable foreign authorities as reflected in the product’s approved labeling.

However, if we receive marketing approval for mavodelpar and any future product candidates, physicians can prescribe such product to their patients in a manner that is inconsistent with the approved label in their independent professional judgment.

If any product candidate is approved but fails to achieve market acceptance among physicians, patients, healthcare payors or others in the medical community, we will not be able to generate significant revenues, which would have a material adverse effect on our business, prospects, financial condition, and results of operations.

In addition, even if a product candidate gains acceptance, the markets for the treatment of patients with indications we may pursue may not be as significant as we estimate.

If any product candidate is approved for marketing, and we are found to have improperly promoted off-label uses, we may become subject to prohibitions on the sale or marketing of such product candidate, significant fines, penalties, sanctions, or product liability claims, and our image and reputation within the industry and marketplace could be harmed.

The FDA, DOJ, and comparable foreign authorities strictly regulate the marketing and promotional claims that are made about pharmaceutical products, if approved.

In particular, a product may not be promoted for uses or indications that are not approved by the FDA or comparable foreign authorities as reflected in the product’s approved labeling.

However, if we receive marketing approval for any product candidates, physicians can prescribe such product to their patients in a manner that is inconsistent with the approved label in their independent professional judgment.

If we are found to have promoted such off-label uses, we may receive warning letters from the FDA and comparable foreign authorities and become subject to significant liability, which would materially harm our business.

The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion.

If we become the target of such an investigation or prosecution based on our marketing and promotional practices, we could face similar sanctions, which would materially harm our business.

In addition, management’s attention could be diverted from our business operations, significant legal expenses could be incurred, and our reputation could be damaged.

If we become the target of such an investigation or prosecution based on our marketing and promotional practices, we could face

similar sanctions, which would materially harm our business.

In addition, management’s attention could be diverted from our business operations, significant legal expenses could be incurred, and our reputation could be damaged.

The FDA and other U.S.

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If we are deemed by the FDA, DOJ, or other U.S.

and foreign governmental authorities to have engaged in the promotion of mavodelpar or any future product candidate for off-label use, we could be subject to certain prohibitions or other restrictions on the sale or marketing and other operations or significant fines and penalties, and the imposition of these sanctions could also affect our reputation and position within the industry.

Coverage and reimbursement may be limited or unavailable in certain market segments for mavodelpar and any future product candidates, which could make it difficult for us to sell mavodelpar and any future product candidates profitably.

Successful sales of mavodelpar and any future product candidates, if approved, depend on the availability of coverage and adequate reimbursement from third-party payors.

and foreign governmental authorities to have engaged in the promotion of any product candidate for off-label use, we could be subject to certain prohibitions or other restrictions on the sale or marketing and other operations or significant fines and penalties, and the imposition of these sanctions could also affect our reputation and position within the industry.

Coverage and reimbursement may be limited or unavailable in certain market segments for any product candidates, which could make it difficult for us to sell such product candidates profitably.

Successful sales of any product candidates, if approved, depend on the availability of coverage and adequate reimbursement from third-party payors.

Patients who are prescribed medicine for the treatment of their conditions generally rely on third-party payors to reimburse all or part of the costs associated with their prescription drugs.

Coverage and adequate reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance, and we may not obtain such coverage or adequate reimbursement.

Moreover, we focus our clinical development of mavodelpar on therapies for patients with genetic mitochondrial diseases with relatively small patient populations.

As a result, we must rely on obtaining appropriate coverage and reimbursement for these populations.

Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which drugs they will cover and the amount of reimbursement they will provide.

Reimbursement by a third-party payor may depend upon a number of factors, including, but not limited to, the third-party payor’s determination that use of a product is:

• a covered benefit under its health plan;

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Assuming we obtain coverage for a given product, the resulting reimbursement payment rates might not be adequate or may require co-payments that patients find unacceptably high.

Patients are unlikely to use mavodelpar or any future product candidate unless coverage is provided, and reimbursement is adequate to cover a significant portion of the cost.

Additionally, the reimbursement rates and coverage amounts may be affected by the approved label for mavodelpar or any future product candidate.

Patients are unlikely to use a product candidate unless coverage is provided, and reimbursement is adequate to cover a significant portion of the cost.

Additionally, the reimbursement rates and coverage amounts may be affected by the approved label for such product candidate.

If coverage and reimbursement of our future products are unavailable or limited in scope or amount, or if pricing is set at unsatisfactory levels, we may be unable to achieve or sustain profitability.

In addition, the market for mavodelpar and any future product candidates will depend significantly on access to third-party payors’

drug formularies or lists of medications for which third-party payors provide coverage and reimbursement.

In addition, the market for any product candidates will depend significantly on access to third-party payors’ drug formularies or lists of medications for which third-party payors provide coverage and reimbursement.

The industry competition to be included in such formularies often leads to downward pricing pressures on pharmaceutical companies.

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In the United States, no uniform policy of coverage and reimbursement for drug products exists among third-party payors.

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare determinations.

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own reimbursement rates, but also have their own methods and approval process apart from Medicare

determinations.

Therefore, coverage and reimbursement for drug 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 mavodelpar and any future product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained.

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 any product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be obtained.

Coverage policies and third-party payor reimbursement rates may change at any time.

Therefore, even if favorable coverage and reimbursement status is attained, less favorable coverage policies and reimbursement rates may be implemented in the future.

We intend to seek approval to market mavodelpar in the United States and in selected foreign jurisdictions.

If we obtain approval in one or more foreign jurisdictions for mavodelpar, we will be subject to rules and regulations in those jurisdictions.

If we obtain approval in one or more foreign jurisdictions for a product candidate, we will be subject to rules and regulations in those jurisdictions.

In some foreign countries, including those in the EU, the pricing of prescription pharmaceuticals and biologics is subject to governmental control.

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In addition, market acceptance and sales of a product will depend significantly on the availability of coverage and adequate reimbursement from third-party payors for a product and may be affected by existing and future health care reform measures.

Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and cost for us to obtain marketing approval for and commercialize mavodelpar and any future product candidates and may affect the prices we may set.*

In the United States and some foreign jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes to the healthcare system, including cost-containment measures that may reduce or limit coverage and reimbursement for newly approved drugs and affect our ability to profitably

sell any product candidates for which we obtain marketing approval.

Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and cost for us to obtain marketing approval for and commercialize any product candidates and may affect the prices we may set.*

In particular, there have been and continue to be a number of initiatives at the U.S.

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By way of example, on June 17, 2021, the U.S.

Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate”

was repealed by Congress.

Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (the IRA) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.

The IRA also eliminates the “donut hole”

under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a newly established manufacturer discount program.

It is possible that the Affordable Care Act will be subject to judicial or Congressional challenges in the future.

It is unclear how any such challenges and the healthcare reform measures of the Biden administration will impact the Affordable Care Act and our business.

Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

Further, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (IRA) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.

The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and creating a newly established manufacturer discount program.

The IRA has been subject to judicial challenges claiming that certain provisions of IRA are unconstitutional.

It is unclear how any such challenges and the healthcare reform measures of the Biden administration will impact the Affordable Care Act, IRA and our business.

In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.

On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included aggregate reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, including the Infrastructure Investments and Jobs Act and Consolidated Appropriations Act of 2023, will remain in effect until 2032.

Additionally, on March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.

Additionally, the American Rescue Plan Act of 2021 eliminated the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.

In addition, on January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, reduced Medicare payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

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Such scrutiny has resulted in several recent congressional inquiries, presidential executive orders and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.

At the federal level, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,”

with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform and sets out a variety of potential legislative policies that Congress could pursue as well as potential administrative actions HHS can take to advance these principles.

At the federal level, in July 2021, the Biden administration released an executive order, “Promoting Competition in the American Economy,” with multiple provisions aimed at prescription drugs.

In addition, the IRA, among other things, (1) directs HHS to negotiate the price of certain high-cost, single-source drugs and biologics covered under Medicare and (2) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.

The IRA permits HHS to implement many of these provisions

through guidance, as opposed to regulation, for the initial years.

The IRA permits HHS to implement many of these provisions through guidance, as opposed to regulation, for the initial years.

These provisions will take effect progressively starting in fiscal year 2023.

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It is currently unclear how the IRA will be implemented but is likely to have a significant impact on the pharmaceutical industry.

Under the IRA, certain categories of drugs are excluded from price negotiations, including drugs that receive orphan drug designation as the only FDA-approved indication.

While we have obtained orphan drug designation for mavodelpar, if we seek additional indications, or fail to maintain our orphan drug status, we may become subject to the price negotiation process.

This could reduce the ultimate price that we receive for mavodelpar, which could negatively affect our business, results of operations, financial conditions, and prospects.

Further, in response to the Biden administration’s October 2022 executive order, on February 14, 2023, HHS released a report outlining three new models for testing by the Center for Medicare and Medicaid Innovation which will be evaluated on their ability to lower the cost of drugs, promote accessibility, and improve quality of care.

It is unclear whether the models will be utilized in any health reform measures in the future.

Further, on December 7, 2023, the Biden administration announced an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act.

On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.

While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.

At the state level, individual states in the United States have also increasingly passed legislation and implemented 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.

For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare programs.

It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the United States or Canada.

Other states have also submitted SIP proposals that are pending review by the FDA.

Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs.

Legally mandated price controls on payment amounts by third-party payors or other restrictions could harm our business, results of operations, financial condition, and prospects.

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We cannot predict the likelihood, nature, or extent of health reform initiatives that may arise from future legislation or administrative action.

We expect that the Affordable Care Act and other healthcare reform measures, including those that may be adopted in the future may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product.

We expect that the Affordable Care Act and other healthcare reform measures, including those that may be adopted in the future may result in additional reductions in Medicare and other

healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on the price that we receive for any approved product.

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

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize mavodelpar, if approved.

A variety of risks associated with marketing mavodelpar and any future product candidates internationally could materially adversely affect our business.

We plan to seek regulatory approval for mavodelpar and any future product candidates internationally and, accordingly, we expect that we will be subject to additional risks related to operating in foreign countries if we obtain the necessary approvals, including:

differing regulatory requirements in foreign countries, including differing reimbursement, pricing and insurance regimes, including as a result of Brexit;

the potential for so-called parallel importing, which is what happens when a local seller, faced with high or higher local prices, opts to import goods from a foreign market (with low or lower prices) rather than buying them locally;

unexpected changes in tariffs, trade barriers, price and exchange controls, and other regulatory requirements;

economic weakness, including inflation, bank failures, or political instability in particular foreign economies and markets;

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

foreign taxes, including withholding of payroll taxes;

foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country;

difficulties staffing and managing foreign operations;

workforce uncertainty in countries where labor unrest is more common than in the United States;

potential liability under the U.S.

Foreign Corrupt Practices Act of 1977 (FCPA) or comparable foreign regulations;

challenges enforcing our contractual and intellectual property rights, especially in those foreign countries that do not respect and protect intellectual property rights to the same extent as the United States;

production shortages resulting from any events affecting raw material supply or manufacturing capabilities internationally;

business interruptions resulting from geo-political actions, including war and terrorism.

These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations.

If we fail to develop and commercialize additional product candidates, we may be unable to grow our business.

We may seek to in-license or acquire late preclinical or development-stage product candidates that have the potential to complement our existing portfolio.

If we decide to pursue the development and commercialization of any additional product candidates, we may be required to invest significant resources to acquire or in-license the rights to such product candidates or to conduct drug discovery activities.

We do not currently have the necessary drug discovery personnel or expertise adequate to discover and develop an additional product candidate on our own.

Any other product candidates will require additional, time-consuming development efforts, and significant financial resources, prior to commercial sale, including preclinical studies, extensive clinical trials, and approval by the FDA and applicable 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/or effective for approval by regulatory authorities.

In addition, we may not be able to acquire, discover, or develop any additional product candidates, and any additional product candidates we may develop may not be approved, manufactured, or produced economically, successfully commercialized or widely accepted in the marketplace, or be more effective than other commercially available alternatives.

Research programs to identify new product candidates require substantial technical, financial, and human resources whether or not we ultimately identify any candidates.

If we are unable to develop or commercialize any other product candidates, our business and prospects will suffer.

We face significant competition from other biotechnology and pharmaceutical companies, and our operating results will suffer if we fail to compete effectively.*

The pharmaceutical industry is characterized by intense competition and rapid innovation.

Although we believe that we hold a leading position in our focus on rare genetic mitochondrial diseases, our competitors may be able to develop other compounds or drugs that are able to achieve similar or better results.

Our potential competitors include major multinational pharmaceutical companies, established and start-up biotechnology companies, specialty pharmaceutical companies and universities and other research institutions.

Many of our competitors have substantially greater financial, technical and other resources, such as larger research and development staff and experienced marketing and manufacturing organizations and well-established sales forces.

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

Mergers and acquisitions in the biotechnology and pharmaceutical industries may result in even more resources being concentrated in our competitors.

may increase further as a result of advances in the commercial applicability of technologies and greater availability of capital for investment in these industries.

Our competitors may succeed in developing, acquiring or licensing on an exclusive basis drug products that are more effective or less costly than mavodelpar.

We believe the key competitive factors that will affect the development and commercial success of mavodelpar are efficacy, safety and tolerability profile, reliability, convenience of dosing, price and reimbursement.

There are no approved therapies indicated for the treatment of PMM in any country.

In September 2023, CymaBay Therapeutics, Inc.

announced positive topline results from its Phase 3 pivotal RESPONSE study.

The 52-weeks plus study evaluated the long-term safety and efficacy of seladelpar, a selective PPARδ

agonist in patients with primary biliary cholangitis.

Astellas Pharma Inc.

is conducting a Phase 2/3 clinical trial of up to 52-weeks plus a long-term safety study with bocidelpar, a selective PPARδ

In addition, Stealth BioTherapeutics Corp., Abliva AB, Tisento Therapeutics Inc., Khondrion B.V.

and Minovia Therapeutics are also developing therapies for patients with mitochondrial disease.

There is one product approved in the United States for LC-FAOD.

In June 2020, a new form of medium chain triglyceride (MCT) oil called DOJOLVI® (triheptanoin) was approved and indicated in the United States as a source of calories for patients with LC-FAOD.

We are not aware of any drug interventional studies underway or currently announced for LC-FAOD.

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

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

We believe the key competitive factors affecting the success of mavodelpar are likely to be efficacy, safety, and convenience.

Even though we have obtained orphan drug designation for mavodelpar for the treatment of PMM and LC-FAOD in the United States and LCHAD and MELAS in the EU, we may not be able to obtain or maintain the benefits associated with orphan drug status, including market exclusivity.*

Regulatory authorities in some jurisdictions, including the United States and the EU, may designate drugs for relatively small patient populations as orphan drugs.

Under the Orphan Drug Act, the FDA may designate a drug as an orphan drug if it is intended to treat a rare genetic mitochondrial disease or condition, which is generally defined as a patient population of fewer than 200,000 people in the United States, or a patient population of greater than 200,000 people in the United States, but for which there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States.

In the EU, the criteria for designating an “orphan medicinal product”

are similar in principle to those in the United States.

A medicinal product may be designated as orphan if (1) it is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition;

(2) either (a) such condition affects no more than five in 10,000 persons in the EU when the application is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the EU to justify investment;

and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized for marketing in the EU, or if such a method exists, the product will be of significant benefit to those affected by the condition.

Generally, if a drug with an orphan drug designation subsequently receives the first marketing approval for the indication for which it has such designation, the drug may be entitled to a period of marketing exclusivity, which precludes the FDA or the European Commission from approving another marketing application for the same drug for the same indication for that time period.

Another drug may receive marketing approval prior to mavodelpar.

The applicable period is seven years in the United States and ten years in the EU, which may be extended by six months and two years, respectively, in the case of product candidates that have complied with the respective regulatory agency’s agreed upon pediatric investigation plan.

The exclusivity period in the EU can be reduced to six years if, at the end of the fifth year, it is established that a drug no longer meets the criteria for

orphan drug designation or if the drug is sufficiently profitable so that market exclusivity is no longer justified.

Orphan drug exclusivity may be lost if the FDA determines that the request for designation was materially defective or if the manufacturer is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare genetic mitochondrial disease or condition.

In addition, even after a drug is granted orphan exclusivity and approved, the FDA and the European Commission can subsequently approve another drug containing a similar active substance or substances, and which is intended to treat the same condition before the expiration of the seven-year (or ten-year in the EU) exclusivity period if the FDA or European Commission concludes that the later drug is safer, more effective or otherwise clinically superior.

In addition, if an orphan designated product receives marketing approval for an indication broader than or different from what is designated, such product may not be entitled to orphan exclusivity.

Even though the FDA has granted orphan drug designation to mavodelpar for the treatment of PMM and LC-FAOD in the United States and LCHAD and MELAS in the EU, if we receive approval for mavodelpar for a modified or different indication, our current orphan designations may not provide us with exclusivity.

Moreover, if adopted in the form proposed, the recent European Commission proposals to revise the existing EU laws governing authorization of medicinal products may result in a decrease in data and market exclusivity for our product candidates in the EU.

Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review or approval process.

Also, regulatory approval for any product candidate may be withdrawn, and other product candidates may obtain approval before us and receive orphan drug exclusivity, which could block us from entering the market.

Even if we obtain orphan drug exclusivity for mavodelpar, that exclusivity may not effectively protect us from competition because different drugs can be approved for the same condition before the expiration of the orphan drug exclusivity period.

A Fast Track designation by the FDA may not actually lead to a faster development or regulatory review or approval process for mavodelpar in any designated indication.

If a product candidate is intended for the treatment of a serious or life-threatening condition and the product candidate demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply for Fast Track designation.

The FDA has broad discretion whether or not to grant this designation, so even if we believe a particular product candidate is eligible for this designation for other indications, we cannot assure you that the FDA would decide to grant it.

Even though we have received Fast Track designation for mavodelpar for the treatment of patients with PMM and LC-FAOD due to LCHAD deficiency, one of the predominant LC-FAOD genotypes, we may not experience a faster development process, review or approval.

The FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our development program.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize any product candidates, if approved.

We may form or seek strategic alliances or enter into additional licensing arrangements in the future, and we may not realize the benefits of such alliances or licensing arrangements.

We may form or seek strategic alliances, create joint ventures or collaborations or enter into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts with respect to mavodelpar and any future product candidates that we may develop.

We intend to establish commercial partnerships outside of the United States and key European markets.

We may form or seek strategic alliances, create joint ventures or collaborations or enter into additional licensing arrangements with third parties for the development and commercialization of product candidates we may choose to develop.

We may also establish commercial partnerships outside of the United States and key European markets.

Any of these relationships may require us to incur non-recurring and other charges, increase our near-and long-term expenditures, issue securities that dilute our existing stockholders, or disrupt our management and business.

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Following a strategic transaction or license, we may not achieve the revenues or cash flows that justifies such transaction.

Any delays in entering into new strategic partnership agreements related to mavodelpar could

delay the development and commercialization of mavodelpar in certain geographies for certain indications, which would harm our business prospects, financial condition, and results of operations.

We are highly dependent on our key personnel, and if we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.*

Our ability to compete in the highly competitive biotechnology and pharmaceuticals industries depends upon our ability to attract and retain highly qualified managerial, scientific, and medical personnel.

We are highly dependent on our management, scientific, and medical personnel.

The loss of the services of any of our executive officers or other key employees and our inability to find suitable replacements could potentially harm our business, prospects, financial condition or results of operations.

We conduct our operations in Irvine, California and Sandwich, United Kingdom (UK) as well as remotely as a hybrid office/virtual organization.

These regions serve as the headquarters to many other biotechnology and pharmaceutical companies and academic and research institutions.

Competition for skilled personnel in our market is intense and may limit our ability to hire and retain highly qualified personnel on acceptable terms or at all.

The withdrawal of the UK from the EU may also negatively affect our ability to attract and retain employees, particularly those from the EU.

To induce valuable employees to remain at our company, in addition to salary and cash incentives, we have provided stock options and restricted stock units that vest over time and performance-based restricted stock units that vest upon satisfaction of certain performance-based conditions.

The value to employees such stock options, restricted stock units and performance-based restricted stock units may be significantly affected by movements in our stock price that are beyond our control and may at any time be insufficient to counteract more lucrative offers from other companies.

Despite our efforts to retain valuable employees, members of our management, scientific, and development teams may terminate their employment with us on short notice.

Although we have employment agreements and/or offer letters with our key employees, these arrangements provide for at-will employment, which means that any of our employees could leave our employment at any time, with or without notice.

We do not maintain “key man”

insurance policies on the lives of these individuals or the lives of any of our other employees.

Our success also depends on our ability to continue to attract, retain and motivate highly skilled junior, mid-level, and senior managers as well as junior, mid-level, and senior scientific and medical personnel.

Many of the other biotechnology and pharmaceutical companies that we compete against for qualified personnel have greater financial and other resources, different risk profiles, and a longer history in the industry than we do.

They may also provide more diverse opportunities and better chances for career advancement.

Some of these characteristics are more appealing to high quality candidates than what we can offer.

If we are unable to continue to attract and retain high quality personnel, the rate and success at which we can discover, develop and commercialize product candidates will be limited.

We will need to grow the size of our organization, and we may experience difficulties in managing this growth.*

As of September 30, 2023, we had 55 employees.

As our development and commercialization plans and strategies develop, we expect to need additional development, managerial, operational, financial, sales, marketing, and other personnel.

Future growth would impose significant added responsibilities on members of management, including:

identifying, recruiting, integrating, maintaining, and motivating additional employees;

managing our internal development efforts effectively, including the clinical and regulatory review process for mavodelpar and any future product candidates, while complying with our contractual obligations to contractors and other third parties;

improving our operational, financial and management controls, reporting systems and procedures.

Our future financial performance and our ability to commercialize mavodelpar will depend, in part, on our ability to effectively manage any future growth, and our management may also have to divert a disproportionate amount of its attention away from day-to-day activities in order to devote a substantial amount of time to managing these growth activities.

To date, we have used the services of outside vendors to perform tasks including clinical trial management, manufacturing, statistics and analysis, regulatory affairs, formulation development, and other drug development functions.

Our growth strategy may also entail expanding our group of contractors or consultants to implement these tasks going forward.

Because we rely on numerous consultants, effectively outsourcing many key functions of our business, we will need to be able to effectively manage these consultants to ensure that they successfully carry out their contractual obligations and meet expected deadlines.

However, if we are unable to effectively manage our outsourced activities or if the quality or accuracy of the services provided by consultants is compromised for any reason, our clinical trials may be extended, delayed, or terminated, and we may not be able to obtain regulatory approval for mavodelpar and any future product candidates or otherwise advance our business.

We may not be able to manage our existing consultants or find other competent outside contractors and consultants on economically reasonable terms, or at all.

If we are not able to effectively expand our organization by hiring new employees and expanding our groups of consultants and contractors, we may not be able to successfully implement the tasks necessary to further develop and commercialize mavodelpar and any future product candidates and, accordingly, may not achieve our research, development and commercialization goals.

Any delays in entering into new strategic partnership agreements could delay the development and commercialization of such product candidates, which would harm our business prospects, financial condition, and results of operations.

Our employees, independent contractors, principal investigators, CROs, consultants, and vendors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements.

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Activities subject to these laws also involve the improper use of information obtained in the course of patient recruitment for clinical trials.

If we obtain regulatory approval for mavodelpar and begin commercializing those products in the United States, the EU and other countries or jurisdictions, our potential exposure under the laws of such countries and jurisdictions will increase significantly, and our costs associated with compliance with such laws are also likely to increase.

If we obtain regulatory approval for a product candidate and begin commercializing such product in the United States, the EU and other countries or jurisdictions, our potential exposure under the laws of such countries and jurisdictions will increase significantly, and our costs associated with compliance with such laws are also likely to increase.

If any such actions are instituted against us, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs and equivalent foreign healthcare programs, 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, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations.

Our relationships with customers, healthcare providers, and third-party payors may be subject, directly or indirectly, to federal, state and comparable foreign healthcare fraud and abuse laws, false claims laws, and

other healthcare laws and regulations.

If we or our employees, independent contractors, consultants, commercial partners, or vendors violate these laws, we could face substantial penalties.

Our relationships with customers, healthcare providers, and third-party payors may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, and other healthcare laws and regulations.

These laws may impact, among other things, our clinical research program, as well as our proposed and future sales, marketing, and education programs.

These laws may impact, among other things, any future clinical research programs, as well as our proposed and future sales, marketing, and education programs.

In particular, the promotion, sales and marketing of healthcare items and services is subject to extensive laws and regulations designed to prevent fraud, kickbacks, self-dealing, and other abusive practices.

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• the federal Anti-Kickback Statute, which 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, the purchasing, leasing, ordering or arranging for the purchase, lease, or order of any item or service reimbursable under Medicare, Medicaid or other federal healthcare programs.

The term “remuneration”

has been broadly interpreted to include anything of value.

The term “remuneration” has been broadly interpreted to include anything of value.

Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly.

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Similar to 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 in order to have committed a violation;

HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their respective implementing regulations, which impose requirements on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information as well as their covered subcontractors;

the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the

Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments or other transfers of value made to physicians, (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and purse practitioners), and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members.

• HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH), and their respective implementing regulations, which impose requirements on certain healthcare providers, health plans, and healthcare clearinghouses, known as covered entities, and their respective business associates that perform services for them that involve the use, or disclosure of, individually identifiable health information as well as their covered subcontractors;

• the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologicals and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) to report annually to CMS information related to payments or other transfers of value made to physicians, (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and purse practitioners), and teaching hospitals, as well as ownership and investment interests held by such physicians and their immediate family members.

We may also be subject to state and foreign equivalents of each of the healthcare laws described above, among others, some of which may be broader in scope.

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anti-kickback and false claims laws and regulations that may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers, or that apply regardless of payor;

laws and regulations that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government;

laws and regulations that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers, marketing expenditures, or drug pricing;

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If we or our employees, independent contractors, consultants, commercial partners and vendors violate these laws and regulations, we may be subject to investigations, enforcement actions and/or significant penalties, including the imposition of significant civil, criminal and administrative penalties, damages, disgorgement, monetary fines, imprisonment, possible exclusion from participation in Medicare, Medicaid and other healthcare programs, contractual damages, reputational harm, 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 regulations, and curtailment of our operations, any of which could adversely affect our ability to operate our business and our results of operations.

In addition, the approval and commercialization of mavodelpar outside the United States will also likely subject us to foreign equivalents of the healthcare laws and regulations mentioned above, among other foreign laws and regulations.

We are subject to stringent and evolving U.S.

and foreign laws, regulations, rules, contractual obligations, policies and other obligations related to data privacy and security.

Our actual or perceived failure to comply with such obligations could lead to regulatory investigations or actions;

In addition, any approval and commercialization of any product candidates outside the United States will also likely subject us to foreign equivalents of the healthcare laws and regulations mentioned above, among other foreign laws and regulations.

We (and the third parties with whom we work) are subject to stringent and evolving U.S.

and foreign laws, regulations, and rules, industry standards, contractual obligations, policies and other obligations related to data privacy and security.

Our actual or perceived failure to comply with such obligations (or such failure by the third parties with whom we work) could lead to regulatory investigations or actions;

litigation (including class claims) and mass arbitration demands;

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and other adverse business consequences.*

In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, processing) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and sensitive third-party data (collectively, sensitive data).

Our data processing activities subject us to numerous data privacy and security obligations, such as

various laws, regulations, guidance, industry standards, external and internal privacy and security policies, contractual requirements, and other obligations, relating to data privacy and security.

In the ordinary course of business, we collect, receive, store, process, generate, use, transfer, disclose, make accessible, protect, secure, dispose of, transmit, and share (collectively, process) personal data and other sensitive information, including proprietary and confidential business data, trade secrets, intellectual property, data we collect about trial participants in connection with clinical trials, and sensitive third-party data (collectively, sensitive data).

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

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

In addition, we may obtain health data from third parties (including research institutions from which we obtain clinical trial data) that is subject to privacy and security requirements under HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH), and their respective implementing regulations.

In addition, we may obtain health data from third parties (including research institutions from which we obtain clinical trial data) that is subject to privacy and security requirements under HIPAA, as amended by HITECH, and their respective implementing regulations.

Depending on the facts and circumstances, we could be subject to civil, criminal, and administrative penalties if we knowingly obtain, use, or disclose individually identifiable protected health information in a manner that is not authorized or permitted by HIPAA.

In addition, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (CPRA) (collectively, the CCPA), applies to personal information of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights, including those noted below.

The CCPA provides for administrative fines of up to $7,500 per violation and allows private litigants affected by certain data breaches to recover significant statutory damages.

Although the CCPA exempts some data processed in the context of clinical trials, the CCPA increases compliance costs and potential liability with respect to other personal data we maintain about California residents.

Further, the CPRA expanded the CCPA’s requirements, including by adding a new right for individuals to correct their personal information and establishing a new regulatory agency to implement and enforce the law.

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

These state laws and the CCPA provide individuals with certain rights concerning their personal information, including the right to access, correct, or delete certain personal information, and opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.

In the past few years, numerous U.S.

states—including California, Virginia, Colorado, Connecticut, and Utah—have enacted comprehensive privacy laws that impose certain obligations on covered businesses, including providing specific disclosures in privacy notices and affording residents with certain rights concerning their personal data.

As applicable, such rights may include the right to access, correct, or delete certain personal data, and to opt-out of certain data processing activities, such as targeted advertising, profiling, and automated decision-making.

The exercise of these rights may impact our business and ability to provide our products and services.

Certain states also impose stricter requirements for processing certain personal data, including sensitive information, such as conducting data privacy impact assessments.

These state laws allow for statutory fines for noncompliance.

For example, the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (CPRA) (collectively, the CCPA), applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.

The CCPA provides for fines of up to $7,500 per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages.

Similar laws are being considered in several other states, as well as at the federal and local levels, and we expect more states to pass similar laws in the future.

While these states, like the CCPA, also exempt some data processed in the context of clinical trials, these developments may further complicate compliance efforts, and increase legal risk and compliance costs for us and the third parties upon whom we rely.

Outside the United States, an increasing number of laws, regulations, and industry standards govern data privacy and security.

For example, the European Union’s General Data Protection Regulation (EU GDPR), the United Kingdom’s GDPR (UK GDPR), Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA), Australia’s Privacy Act, and New Zealand’s Privacy Act, impose strict requirements for processing personal data.

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

For example, under the EU GDPR and UK GDPR, companies may face temporary or definitive bans on data processing and other corrective actions, fines of up to 20 million euros or 17.5 million pounds, respectively, or 4% of annual global revenue, in each case, whichever is greater, or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.

In addition, we may be unable to transfer personal data from Europe and other jurisdictions to the United States or other countries due to data localization requirements or limitations on cross-border data flows.

In the ordinary course of business, we may transfer personal data from Europe and other jurisdictions to the United States or other countries.

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

In particular, the European Economic Area (EEA) and the UK have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws they generally believe are inadequate.

In particular, the European Economic Area (EEA) and the United Kingdom (UK) have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws they generally believe are inadequate.

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

Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA and UK’s standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.

Data Privacy Framework and the UK extension thereto (which allows for transfers for relevant U.S.-based organizations who self-certify compliance and participate in the Framework), these mechanisms are subject to legal challenges, and

there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.

If there is no lawful manner for us to transfer personal data from the EEA and the UK or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the European Commission’s Standard Contractual Clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.

Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework and/or extension thereto), these mechanisms are subject to potential legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the United States.

If there is no lawful manner for us to transfer personal data from the EEA, the UK, or other jurisdictions to the United States, or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions (such as Europe) at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

These challenges and risks concerning cross-border transfers of personal data out of the EEA and UK to recipients in other jurisdictions, notably recipients in the United States, may be of particular significance to us and our operations as the majority of the trials we conduct take place in locations outside the United States, with a large number occurring in the EEA or UK.

Furthermore, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activities groups.

Some European regulators have ordered certain companies to suspend or permanently cease certain transfers of personal data out of Europe for allegedly violating the GDPR’s cross-border data transfer limitations.

In addition to data privacy and security laws, we are also bound by contractual obligations related to data privacy and security, and our efforts to comply with such obligations may not be successful.

Our employees and personnel may use generative artificial intelligence (AI) technologies to perform their work, and the disclosure and use of personal information in generative AI technologies is subject to various privacy laws and other privacy or legal obligations (such as copyright infringement).

Our employees and personnel may use generative artificial intelligence (AI) technologies to perform their work, and the disclosure and use of personal data in generative AI technologies is subject to various privacy laws and other privacy or legal obligations (such as copyright infringement).

Governments have passed and are likely to pass additional laws regulating generative AI.

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If these policies, marketing materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.

Obligations related to data privacy and security (and consumers’

data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty.

Obligations related to data privacy and security (and consumers’ data privacy expectations) are quickly changing, becoming increasingly stringent, and creating uncertainty.

Additionally, these obligations may be subject to differing applications and interpretations, which may be inconsistent or conflict among jurisdictions.

Preparing for and complying with these obligations requires us to devote significant resources and may necessitate changes to our services, information technologies, systems, and practices and to those of any third parties that process sensitive data on our behalf.

We may at times fail (or be perceived to have failed) in our efforts to comply with our data privacy and security obligations.

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

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

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

If we or the third parties with whom we work fail, or are perceived to have failed, to address or comply with applicable data privacy and security obligations, we could face significant consequences.

These consequences may include, but are not limited to, government enforcement actions (e.g., investigations, fines, penalties, audits, inspections, and similar);

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additional reporting requirements and/or oversight;

bans on processing personal data;

bans or restrictions on processing personal data;

and orders to destroy or not use personal data.

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loss of customers;

interruptions or stoppages in our business operations (including clinical trials);

interruptions or stoppages in our business operations (including future clinical trials);

inability to process sensitive data or to operate in certain jurisdictions;

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or revision or restructuring of our operations.

The withdrawal of the UK from the EU may adversely impact our ability to obtain regulatory approvals of our product candidates in the UK, result in restrictions or imposition of taxes and duties for importing our product candidates into the EU or UK, and may require us to incur additional expenses in order to develop, manufacture and commercialize our product candidates in the EU or UK.*

Following the result of a referendum in 2016, the UK left the EU on January 31, 2020, commonly referred to as Brexit.

Pursuant to the formal withdrawal arrangements agreed between the UK and the EU, the UK was subject to a transition period until December 31, 2020 (the Transition Period) during which EU rules continued to apply.

A trade and cooperation agreement (the Trade and Cooperation Agreement) that outlines the future trading relationship between the UK and the EU was agreed on in December 2020, provisionally applied from January 1, 2021 and became formally effective on May 1, 2021.

Since the expiry of the Transition Period, the UK operates under a distinct regulatory regime.

Since January 1, 2021, the EU laws which have been transposed into UK law through secondary legislation continue to be applicable as “retained EU law”.

As there is no general power to amend these regulations, the UK government passed a new Medicines and Medical Devices Act which seeks to address regulatory gaps through implementing regulations and delegated powers covering the fields of human medicines, clinical trials of human medicines, veterinary medicines and medical devices.

The purpose of the Act is to enable the existing UK regulatory frameworks to be updated.

Although regulatory authorities in the UK have indicated that new UK rules will be put in place, detailed proposals are yet to be published.

Significant political and economic uncertainty therefore remains about how much the relationship between the UK and EU will differ as a result of the UK’s withdrawal.

EU pharmaceutical laws have continued to apply to Northern Ireland since the expiry of the Transition Period (as laid out in the Protocol on Ireland and Northern Ireland).

On February 27, 2023, the European Commission and the UK government reached a political agreement in principle, commonly referred to as the “Windsor Framework”.

The purpose of the agreement is to establish a set of joint solutions that would allow goods to be traded between Great Britain and Northern Ireland and between Northern Ireland and Ireland whilst ensuring the integrity of the EU Single Market.

New legislation must be passed by the UK and the EU in order to implement the provisions of the Windsor Framework, including those that relate to medicinal products.

The Windsor Framework provides, however, that medicinal products to be placed on the market in Northern Ireland will be authorized solely in accordance with UK laws.

Since a significant proportion of the regulatory framework in the UK applicable to our business and our product candidates is derived from EU directives and regulations, Brexit, has had, and may continue to have, a material impact upon the regulatory regime with respect to the development, manufacture, importation, approval and commercialization of our product candidates in the UK or the EU.

For example, Great Britain (GB) is no longer covered by the centralized procedures for obtaining EU-wide marketing authorization (MA) from the European Commission (based on the opinion of the CHMP of the EMA), and a separate MA will be required to market our product candidates in GB, including mavodelpar and any future product candidates.

Any delay in obtaining, or an inability to obtain, any marketing approvals in GB, as a result of Brexit or otherwise, would prevent us from commercializing mavodelpar in GB and restrict our ability to generate revenue and achieve and sustain profitability.

While the Trade and Cooperation Agreement provides for the tariff-free trade of medicinal products between the UK and the EU there are additional non-tariff costs to such trade which did not exist prior to the end of the Transition Period, and shipments between the UK and the EU are more likely to be delayed compared to the position prior to Brexit.

Further, should the UK further diverge from the EU from a regulatory perspective in relation to medicinal products, this could lead to a more complex and costly regulatory burden on us.

In addition, while the Trade and Cooperation Agreement provides for mutual recognition of GMP inspections and certificates, it does not provide for contain wholesale mutual recognition of UK and EU pharmaceutical rules and product standards, for example in relation to batch testing and pharmacovigilance, which remain subject to further

bilateral discussions.

Therefore, additional batch testing between the EU and UK markets and other divergent or duplicative regulatory obligations may be required, which could result in additional expense and supply chain delays.

If any of these outcomes occur, we may be forced to restrict or delay efforts to seek regulatory approval in the UK or the EU for mavodelpar and any future product candidates, or incur significant additional expenses to operate our business, which could significantly and materially harm or delay our ability to generate revenues or achieve profitability of our business.

Any further changes in international trade, tariff and import/export regulations as a result of Brexit or otherwise may impose unexpected duty costs or other non-tariff barriers on us.

These developments, or the perception that any of them could occur, may significantly reduce global trade and, in particular, trade between the EU and the UK.

It is also possible that Brexit may negatively affect our ability to attract and retain employees in the UK, particularly those from the EU.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of mavodelpar and any future product candidates.

We face an inherent risk of product liability as a result of the clinical testing of mavodelpar and any future product candidates and will face an even greater risk if we commercialize any products.

If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of any product candidates.

Although we are not currently pursuing further clinical development of our only product candidate, mavodelpar, we face an inherent risk of product liability as a result of the clinical testing of mavodelpar we have conducted and any future clinical testing of mavodelpar and any other product candidates we may conduct.

We will face an even greater risk if we commercialize any products.

For example, we may be sued if mavodelpar or any future product candidates causes or is perceived to cause injury or is found to be otherwise unsuitable during clinical testing, manufacturing, marketing, or sale.

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Claims could also be asserted under state consumer protection acts.

If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of mavodelpar.

If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required to limit commercialization of any product candidates.

Even successful defense would require significant financial and management resources.

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

decreased demand for mavodelpar and any future product candidates;

• decreased demand for any product candidates;

• injury to our reputation;

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• costs to defend the related litigation;

a diversion of management’s time and our resources;

• a diversion of management’s time and our resources;

• substantial monetary awards to trial participants or patients;

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• exhaustion of any available insurance and our capital resources;

the inability to commercialize mavodelpar and any future product candidates;

• the inability to commercialize any product candidates;

• a decline in our share price.

Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop.

We currently carry an aggregate of up to $7.0 million of product liability insurance covering our clinical trials.

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Our insurance policies also have various exclusions, and we may be subject to a product liability claim for which we have no coverage.

We will have to pay any amounts awarded by a court or negotiated in a

settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

We will have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

Our ability to utilize our net operating loss (NOL) carryforwards and certain other tax attributes may be limited.

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To the extent that we continue to generate taxable losses, unused losses will carry forward to offset future taxable income, if any, until such unused losses expire (if at all).

See Note 10, Income Taxes of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for year ended December 31, 2022 for further discussion.

See Note 11, Income Taxes of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2023 for further discussion.

Under federal tax legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act (the Tax Act), as modified by the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), federal NOL carryforwards generated in tax years beginning after December 31, 2017 may be carried forward indefinitely but, in the case of tax years beginning after 2020, may only be used to offset 80% of our taxable income annually.

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operations, the taxation of foreign earnings and the deductibility of expenses under the Tax Act or future tax reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges in the current or future taxable years and could increase our future U.S.

For example, the recently enacted Inflation Reduction Act of 2022 (IRA) includes provisions that will impact the U.S.

For example, the recently enacted IRA includes provisions that will impact the U.S.

federal income taxation of corporations, including imposing a minimum tax on the book income of certain large corporations and an excise tax on certain corporate stock repurchases that would be imposed on the corporation repurchasing such stock.

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For example, the IRS or another tax authority could challenge our allocation of income by tax jurisdiction and the amounts paid between our affiliated companies pursuant to our intercompany arrangements and transfer pricing policies, including amounts paid with respect to our intellectual property development.

Similarly, a tax authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a

taxable nexus, often referred to as a “permanent establishment”

under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions.

Similarly, a tax authority could assert that we are subject to tax in a jurisdiction where we believe we have not established a taxable nexus, often referred to as a “permanent establishment” under international tax treaties, and such an assertion, if successful, could increase our expected tax liability in one or more jurisdictions.

A tax authority may take the position that material income tax liabilities, interest and penalties are payable by us, in which case, we expect that we might contest such assessment.

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For example, on March 10, 2023, Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver.

Subsequently, the FDIC announced that all deposits with SVB are fully insured.

Subsequently, the FDIC announced that all deposits with SVB would be fully insured.

Similarly, on March 12, 2023, Signature Bank Corp.

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were each swept into receivership and on May 1, 2023, First Republic Bank was swept into receivership.

We have moved any cash or other deposits previously held at SVB US (a division of First Citizens Bank) to other financial institutions and all accounts associated with SVB UK (a division of HSBC) were fully transitioned over to HSBC.

We have access to all of our cash and other deposits previously held at SVB.

We do not anticipate any material impact on our financial condition or operations as a result of SVB’s circumstances.

We have moved any cash or other deposits previously held at SVB US (a division of First Citizens Bank) and SVB UK (a division of HSBC) to other financial institutions.

We did not have any material impact on our financial condition or operations as a result of SVB’s circumstances.

Additionally, the failure of a bank, or other adverse conditions in the financial or credit markets impacting financial institutions at which we maintain balances or with which we do business, could adversely impact our liquidity and financial performance.

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or any applicable foreign government in the future or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions or by acquisition in the event of a future failure or liquidity crisis.

In addition, if any of our partners or parties with whom we conduct business are unable to access funds due to the status of their financial institution, such parties’

ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.

In addition, if any of our partners or parties with whom we conduct business are unable to access funds due to the status of their financial institution, such parties’ ability to pay their obligations to us or to enter into new commercial arrangements requiring additional payments to us could be adversely affected.

Investor concerns regarding the U.S.

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Risks Related to Our Reliance on Third Parties

We depend on the vTv License Agreement, and termination of this license could result in the loss of significant rights, which would harm our business.

We are dependent on technology, patents, know-how, and proprietary materials, both our own and licensed from others.

We entered into the vTv License Agreement in December 2017 pursuant to which we were granted an exclusive, worldwide, sublicensable license under vTv Therapeutics intellectual property relating to vTv Therapeutics’

agonist program, to develop, manufacture and commercialize PPARδ

agonists and products containing such PPARδ

agonists, including mavodelpar, or licensed products, for any therapeutic, prophylactic or diagnostic application in humans.

Any termination of this license will result in the loss of significant rights and will restrict our ability to develop and commercialize mavodelpar.

We are generally also subject to all of the same risks with respect to protection of intellectual property that we license, as we are for intellectual property that we own, which are described below under “Risks Related to Our Intellectual Property.”

If we or our licensors fail to adequately protect this intellectual property, our ability to commercialize products could suffer.

We rely on third parties to conduct, supervise, and monitor our clinical trials.

We currently rely on, and intend to continue relying on, third-party CROs in connection with our clinical trials for mavodelpar.

We have in the past and may in the future rely on third parties to conduct, supervise, and monitor our clinical trials.

Although we are not currently pursuing further clinical development of our only product candidate, mavodelpar, we have in the past and may in the future rely on third-party CROs in connection with any future

clinical trials for any product candidates we may choose to develop.

We control or will control only certain aspects of their activities.

Nevertheless, we are responsible for ensuring that each of our clinical trials is conducted in accordance with applicable protocol, legal, regulatory, and scientific standards, and our reliance on our CROs does not relieve us of our regulatory responsibilities.

Nevertheless, we are responsible for ensuring that each of our clinical trials that we have conducted and may conduct in the future is conducted in accordance with applicable protocol, legal, regulatory, and scientific standards, and our reliance on our CROs does not relieve us of our regulatory responsibilities.

We and our CROs are required to comply with GCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in clinical development.

Regulatory authorities enforce these GCPs through periodic inspections of trial sponsors, principal investigators and trial sites.

If we or any of these CROs fail to comply with applicable GCP regulations, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

Upon inspection, such regulatory authorities may determine that our clinical trials do not comply with the GCP regulations.

In addition, our clinical trials must be conducted with drug product produced under cGMP regulations and will require a large number of test subjects.

If we or any of these CROs fail to comply with applicable GCP regulations, the clinical data generated in our future clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials before approving our marketing applications.

Upon inspection, such regulatory authorities may determine that our future clinical trials do not comply with the GCP regulations.

In addition, our future clinical trials must be conducted with drug product produced under cGMP regulations and will require a large number of test subjects.

Our failure or any failure by our CROs to comply with these regulations or to recruit a sufficient number of patients may require us to repeat clinical trials, which would delay the regulatory approval process.

Moreover, our business may be implicated if any of our CROs violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws.

Our CROs are not our employees and, except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient time and resources to our ongoing preclinical, clinical and nonclinical programs.

The CROs on whom we have historically relied and may in the future rely are not our employees and, except for remedies available to us under our agreements with such CROs, we cannot control whether or not they devote sufficient time and resources to our ongoing preclinical, clinical and nonclinical programs.

These CROs may also have relationships with other commercial entities, including our competitors, for whom they may also be conducting clinical trials or other drug development activities, which could affect their performance on our behalf.

If our CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed, or terminated and we may not be able to complete development of, obtain regulatory approval for or successfully commercialize mavodelpar and any future product candidates.

As a result, our financial results and the commercial prospects for mavodelpar and any future product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed.

If such CROs do not successfully carry out their contractual duties or obligations or meet expected deadlines, if they need to be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to the failure to adhere to the relevant clinical protocols or regulatory requirements or for other reasons, our future clinical trials may be extended, delayed, or terminated and we may not be able to complete development of, obtain regulatory approval for or successfully commercialize any product candidates.

As a result, our financial results and the commercial prospects for any product candidates would be harmed, our costs could increase and our ability to generate revenues could be delayed.

Switching or adding CROs involves substantial cost and requires extensive management time and focus.

In addition, there is a natural transition period when a new CRO commences work.

As a result, delays occur, which can materially impact our ability to meet our desired clinical development timelines.

As a result, delays occur, which can materially impact our ability to meet the clinical development timelines we may establish for any product candidates.

Although we carefully manage our relationships with our CROs, we may encounter challenges or delays in the future and these delays or challenges may have a material adverse impact on our business, prospects, financial condition, and results of operations.

In addition, quarantines, shelter-in-place, and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, related to infectious diseases could impact personnel at our CROs, which could disrupt our clinical timelines, which could have a material adverse impact on our business, prospects, financial condition, and results of operations.

approved, and these third parties may fail to obtain and maintain regulatory approval for their facilities, fail to provide us with sufficient quantities of drug product or fail to do so at acceptable quality levels or prices.*

We do not currently have nor do we plan to acquire the infrastructure or capability internally to manufacture our clinical drug supplies for use in the conduct of our clinical trials, and we lack the resources and the capability to manufacture mavodelpar and any future product candidates on a clinical or commercial scale.

Instead, we rely on contract manufacturers for such production.

We do not currently have any long-term agreement with a manufacturer to produce raw materials, active pharmaceutical ingredients (APIs) and the finished products of mavodelpar used in our current product format and we rely on single-source suppliers for clinical supply of API and drug product of mavodelpar.

We intend to enter into agreements for commercial production with third-party suppliers.

Our reliance on third-party suppliers and manufacturers, including single-source suppliers, could harm our ability to develop mavodelpar or commercialize it, if approved.

Further, any delay in identifying and qualifying a manufacturer for commercial production could delay the potential commercialization of mavodelpar and any future product candidates, and, in the event that we do not have sufficient product to complete our clinical trials, it could delay such trials.

The facilities used by our contract manufacturers to manufacture mavodelpar and any future product candidates must be approved by the applicable regulatory authorities, including the FDA, pursuant to inspections that will be conducted after an NDA or comparable foreign regulatory marketing application is submitted.

We currently do not control the manufacturing process of mavodelpar and are completely dependent on our contract manufacturing partners for compliance with the FDA’s cGMP requirements for manufacture of both the active drug substances and finished drug product.

If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the FDA’s strict regulatory requirements, they will not be able to secure or maintain FDA approval for the manufacturing facilities.

We have in the past and may in the future rely completely on third parties to manufacture our preclinical and clinical drug supplies and we may in the future rely on third parties to produce commercial supplies of any product candidates that we may choose to develop, if approved, and these third parties may fail to obtain and maintain regulatory approval for their facilities, fail to provide us with sufficient quantities of drug product or fail to do so at acceptable quality levels or prices.

We are not currently pursuing further clinical development of our only product candidate, mavodelpar.

If we pursue development of other product candidates, we will likely rely on contract manufacturers manufacture our clinical drug supplies for use in the conduct of our clinical trials.

or commercial scale.

Instead, we have historically and may in the future rely on contract manufacturers for such production.

Our reliance on third-party suppliers and manufacturers, including single-source suppliers, could harm our ability to develop any product candidates or commercialize any such product candidates, if approved.

Further, any delay in identifying and qualifying a manufacturer for commercial production could delay the potential commercialization of any such product candidates, and, in the event that we do not have sufficient product to complete our future clinical trials, it could delay such trials.

The facilities used by our contract manufacturers to manufacture any product candidates must be approved by the applicable regulatory authorities, including the FDA, pursuant to inspections that will be conducted after an NDA or comparable foreign regulatory marketing application is submitted.

In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel.

If the FDA or any other applicable regulatory authority does not approve these facilities for the manufacture of mavodelpar or any future product candidates or if it withdraws any such approval in the future, or if our suppliers or contract manufacturers decide they no longer want to supply or manufacture for us, we may need to find alternative manufacturing facilities, in which case we might not be able to identify manufacturers for clinical or commercial supply on acceptable terms, or at all, which would significantly impact our ability to develop, obtain regulatory approval for, or market mavodelpar and any future product candidates.

If the FDA or any other applicable regulatory authority does not approve these facilities for the manufacture any such product candidates or if it withdraws any such approval in the future, or if our suppliers or contract manufacturers decide they no longer want to supply or manufacture for us, we may need to find alternative manufacturing facilities, in which case we might not be able to identify manufacturers for clinical or commercial supply on acceptable terms, or at all, which would significantly impact our ability to develop, obtain regulatory approval for, or market any such product candidates.

In addition, the manufacture of pharmaceutical products is complex and requires significant expertise and capital investment, including the development of advanced manufacturing techniques and process controls.

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These problems include difficulties with production costs and yields, quality control, including stability of the product, quality assurance testing, operator error, shortages of qualified personnel, as well as compliance with strictly enforced federal, state, and foreign regulations.

Furthermore, if contaminants are discovered in our supply of mavodelpar or any future product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

Any stability or other issues relating to the manufacture of mavodelpar may occur in the future.

In addition, quarantines, shelter-in-place, and similar government orders, or the perception that such orders, shutdowns, or other restrictions on the conduct of business operations could occur, related to infectious diseases could impact personnel at our third-party manufacturing facilities upon which we rely, or the availability or cost of materials, which could disrupt the supply chain for our product candidates.

Additionally, our manufacturers may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments.

If our manufacturers were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide our product candidate to patients in clinical trials would be jeopardized.

Any delay or interruption in the supply of clinical trial supplies could delay the completion of clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.

Furthermore, if contaminants are discovered in our supply of any product candidates or in the manufacturing facilities, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

Any stability or other issues relating to the manufacture of any product candidates may occur in the future.

In addition, quarantines, shelter-in-place, and similar government orders, or the perception that such orders, shutdowns, or other restrictions on the conduct of business operations could occur, related to infectious diseases could impact personnel at our third-party manufacturing facilities upon which we may rely in the future, or the availability or cost of materials, which could disrupt the supply chain for our product candidates.

Additionally, the manufacturers whom we may rely on may experience manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments.

If the manufacturers we rely on were to encounter any of these difficulties, or otherwise fail to comply with their contractual obligations, our ability to provide our product candidate to patients in clinical trials would be jeopardized.

Any delay or interruption in the supply of clinical trial supplies could delay the completion of any future clinical trials, increase the costs associated with maintaining clinical trial programs and, depending upon the period of delay, require us to commence new clinical trials at additional expense or terminate clinical trials completely.

If we or our third-party manufacturers use hazardous substances in a manner that causes injury or violates applicable law, we may be liable for damages.

Our research and development activities involve the controlled use of potentially hazardous substances by our third-party manufacturers.

Our manufacturers are subject to federal, state, and local laws and regulations in the United States governing the use, manufacture, storage, handling and disposal of medical, radioactive and hazardous materials.

Although we believe that our manufacturers’

procedures for using, handling, storing and disposing of these materials comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or injury resulting from hazardous materials.

We are not currently pursuing further clinical development of our only product candidate, mavodelpar.

However, our historical research and development activities involved and future activities could involve the controlled use of potentially hazardous substances by our third-party manufacturers.

Such manufacturers are subject to federal, state, and local laws and regulations in the United States governing the use, manufacture, storage, handling and disposal of medical, radioactive and hazardous materials.

Although we believe that the procedures for using, handling, storing and disposing of these materials used by the manufacturers we historically relied on comply with legally prescribed standards, we cannot completely eliminate the risk of contamination or

injury resulting from hazardous materials.

As a result of any such contamination or injury, we may incur liability or local, city, state or federal authorities may curtail the use of these materials and interrupt our business operations.

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Risks Related to Our Intellectual Property

Our success depends on our ability to obtain and maintain sufficient intellectual property protection for mavodelpar, any future product candidates, and other proprietary technologies.*

Our commercial success will depend in part on our ability to obtain and maintain a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to mavodelpar, any future product candidates, and other proprietary technologies we develop.

If we are unable to obtain or maintain patent protection with respect to mavodelpar, any future product candidates, and other proprietary technologies we may develop, our business, financial condition, results of operations, and prospects could be materially harmed.

Our success depends on our ability to obtain and maintain sufficient intellectual property protection for any product candidates and other proprietary technologies.

Our commercial success will depend in part on our ability to obtain and maintain a combination of patents, trade secret protection and confidentiality agreements to protect the intellectual property related to any product candidates and other proprietary technologies we develop.

If we are unable to obtain or maintain patent protection with respect to such product candidates, and other proprietary technologies we may develop, our business, financial condition, results of operations, and prospects could be materially harmed.

We generally seek to protect our products and product candidates and related inventions and improvements that we consider important to our business.

We own a portfolio of U.S.

patent applications for mavodelpar and have licensed rights to a number of U.S.

patents and patent applications for mavodelpar.

Some of our owned and licensed patents and patent applications cover or relate to mavodelpar, including composition of matter, uses to treat particular conditions and methods of manufacturing.

We have developed and continue to expand our patent portfolio for mavodelpar.

We have licensed from vTv Therapeutics eight issued patents in the United States and 19 issued patents in foreign countries covering composition of matter of mavodelpar, among other things, which are expected to expire in 2026, absent any patent term adjustments or extensions.

Additionally, we have licensed four issued patents in the United States, six issued patents in foreign countries, one pending application in the United States, and one pending application in Europe, from vTv Therapeutics covering methods of using mavodelpar, which are expected to expire in 2034, absent any patent term adjustments or extensions.

In addition to the licensed vTv Therapeutics patents and applications relating to mavodelpar, we have filed our own patent applications.

We co-own one pending application in the United States and five pending applications in foreign countries, and own four pending applications in the United States, one pending international patent application, an issued patent in a foreign country, and over 25 pending applications in foreign countries, directed to various methods of use of mavodelpar.

These pending patent applications, if issued, would be expected to expire between 2040 and 2043, absent any patent term adjustments or extensions.

We also own two issued patents in the United States, two pending applications in the United States, and over 25 pending applications in foreign countries directed to methods of manufacturing, and crystalline forms (polymorphs) of mavodelpar.

The issued patents, and pending patent applications if issued, are expected to expire in 2041, absent any patent term adjustments or extensions.

Patents related to mavodelpar may be eligible for patent term extensions in certain jurisdictions, including up to five years in both the United States and the EU, upon approval of

a commercial use of the corresponding product by a regulatory agency in the jurisdiction where the patent was granted.

Pending patent applications cannot be enforced against third parties practicing the technology claimed in such applications unless, and until, patents issue from such applications, and then only to the extent the issued claims cover such technology.

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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.

The degree of future protection for our and our licensors’

proprietary rights is uncertain.

The degree of future protection for our and our licensors’ 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.

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Non-compliance events that could result in abandonment or lapse of a patent or patent application include, but are not limited to, failure to respond to official actions within prescribed time limits, non-payment of fees and failure to properly legalize and submit formal documents.

If such event were to occur, our competitors might be able to enter the

market with similar or identical products or technology earlier than should otherwise have been the case, which would have a material adverse effect on our business, financial condition, results of operations, and prospects.

If such event were to occur, our competitors might be able to enter the market with similar or identical products or technology earlier than should otherwise have been the case, which would have a material adverse effect on our business, financial condition, results of operations, and prospects.

Patent terms may be inadequate to protect our competitive position on our product candidates for an adequate amount of time.

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If we are unable to obtain PTE or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain approval of competing products following our patent expiration and may take advantage of our investment in development and clinical trials by referencing our clinical and preclinical data to launch their product earlier than might otherwise be the case, which could materially adversely affect our business, financial condition, results of operations and prospects.

Furthermore, our patents covering certain components of our product candidates may expire prior to the commercialization of our product candidates or soon thereafter.

As a result, third parties may be able to utilize these components of our products after expiration of these patents.

Even if we or our licensors obtain patents covering our product candidates, when the terms of all patents covering a product expire, our business may become subject to competition from competitive products, including generic products.

Given the amount of time required for the development, testing, and regulatory review and approval of new product candidates, patents protecting such candidates may expire before or shortly after such candidates are commercialized.

Given the amount of time required for the development, testing, and regulatory review and

approval of new product candidates, patents protecting such candidates may expire before or shortly after such candidates are commercialized.

As a result, our owned and licensed patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

For example, we have licensed patents from vTv Therapeutics that cover composition of matter of mavodelpar, which are set to expire in 2026, absent any patent term adjustments or extensions.

If we do not obtain patent term extension for mavodelpar, our business may be materially harmed.

Depending upon the timing, duration, and specifics of any FDA marketing approval of mavodelpar, or any future product candidate we may develop, one or more of patents issuing from our U.S.

patent applications may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Action of 1984 (Hatch-Waxman Amendments).

The Hatch-Waxman Amendments permit a PTE of up to five years as compensation for patent term lost during the FDA regulatory review process.

A patent term extension cannot

extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended.

Similar patent term restoration provisions to compensate for commercialization delay caused by regulatory review are also available in certain foreign jurisdictions, such as in Europe under Supplemental Protection Certificate (SPC).

If we encounter delays in our development efforts, including our clinical trials, the period of time during which we could market mavodelpar and any future product candidates under patent protection would be reduced.

Additionally, we may not receive an extension if we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents, or otherwise fail to satisfy applicable requirements.

Moreover, the applicable time period or the scope of patent protection afforded could be less than we request.

If we are unable to obtain patent term extension or restoration, or the term of any such extension is less than we request, the period during which we will have the right to exclusively market our product will be shortened and our competitors may obtain approval of competing products following our patent expiration, and our revenue may be materially reduced.

Further, if this occurs, our competitors may take advantage of our investment in development and trials by referencing our clinical and preclinical data and launch their product earlier than might otherwise be the case.

We cannot ensure that patent rights relating to inventions described and claimed in our pending patent applications will issue or that patents based on our patent applications will not be challenged and rendered invalid and/or unenforceable.

We have pending U.S., international ( i.e.

, PCT), and other foreign patent applications in our portfolio relating to mavodelpar.

We have pending U.S., international ( i.e ., PCT), and other foreign patent applications and may submit similar patent applications for any future product candidates.

However, we cannot predict:

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• whether the patent applications that we own or in-license will result in issued patents with claims that cover our product candidates or uses thereof.

We cannot be certain that the claims in our pending patent applications directed to our product candidates, as well as technologies relating to our research programs will be considered patentable by the USPTO or by patent offices in foreign countries.

One aspect of the determination of patentability of our inventions depends on the scope and content of the “prior art,”

information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention.

We cannot be certain that the claims in our pending and future patent applications directed to our product candidates, as well as technologies relating to our research programs will be considered patentable by the USPTO or by patent offices in foreign countries.

One aspect of the determination of patentability of our inventions depends on the scope and content of the “prior art,” information that was or is deemed available to a person of skill in the relevant art prior to the priority date of the claimed invention.

There may be prior art of which we are not aware that may affect the patentability of our patent claims or, if issued, affect the validity or enforceability of a patent claim relevant to our business.

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Furthermore, even if they are unchallenged, patents in our portfolio may not adequately exclude third parties from practicing relevant technology or prevent others from designing around our claims.

If the breadth or strength of our intellectual property position with respect to our product candidates is threatened, it could dissuade companies from collaborating with us to develop and threaten our ability to commercialize our

product candidates.

In the event of litigation or administrative proceedings, we cannot be certain that the claims in any of our issued patents will be considered valid by courts in the United States or foreign countries.

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Our defense of derivation proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees.

In addition, the uncertainties associated with such proceedings could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our development programs, license necessary technology from third parties or enter into development or manufacturing partnerships that would help us bring our product candidates to market.

In addition, the

uncertainties associated with such proceedings could have a material adverse effect on our ability to raise the funds necessary to continue any future clinical trials, continue our development programs, license necessary technology from third parties or enter into development or manufacturing partnerships that would help us bring our product candidates to market.

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As a result, the issuance, scope, validity, enforceability, and commercial value of our patent rights are highly uncertain.

Our patent applications may not result in patents being issued which protect mavodelpar, any future product candidates, and other proprietary technologies we may develop or which effectively prevent others from commercializing competitive technologies and products.

Our patent applications may not result in patents being issued which protect any product candidates and other proprietary technologies we may develop or which effectively prevent others from commercializing competitive technologies and products.

Further, no consistent policy regarding the breadth of claims allowed in pharmaceutical patents has emerged to date in the United States and in many jurisdictions outside of the United States.

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We may be subject to a third-party pre-issuance submission of prior art to the USPTO, or become involved in opposition, derivation, revocation, reexamination, post-grant review (PGR) and inter partes review (IPR), or other similar proceedings challenging our owned patent rights.

An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate or render unenforceable, our patent rights, allow third parties to commercialize our product candidates and compete directly with us, without payment to us, or result in our inability to manufacture or commercialize products without infringing third-party patent

Moreover, our patents or the patents of our future licensors may become subject to post-grant challenge proceedings, such as oppositions in a foreign patent office, that challenge our priority of invention or other features of patentability with respect to our patents and patent applications and those of our future licensors.

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In addition, if the breadth or strength of protection provided by our patents and patent applications or the patents and patent applications of our future licensors is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize current or future product candidates.

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our actual or potential future collaborators will be successful in protecting mavodelpar, any future product candidates, and other proprietary technologies and their uses by obtaining, defending and enforcing patents.

The patent application process is subject to numerous risks and uncertainties, and there can be no assurance that we or any of our actual or potential future collaborators will be successful in protecting any product candidates and other proprietary technologies and their uses by obtaining, defending and enforcing patents.

These risks and uncertainties include the following:

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• any successful opposition to any patents owned by or licensed to us could deprive us of rights necessary for the practice of our technologies or the successful commercialization of any products or product candidates that we may develop;

because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we or our licensors were the first to file any patent application related to mavodelpar, any future product candidates, and other proprietary technologies and their uses;

• because patent applications in the United States and most other countries are confidential for a period of time after filing, we cannot be certain that we or our licensors were or will be the first to file any patent application related to any product candidates and other proprietary technologies and their uses;

• an interference proceeding can be provoked by a third party or instituted by the USPTO to determine who was the first to invent any of the subject matter covered by the patent claims of our applications for any application with an effective filing date before March 16, 2013;

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In addition, our ability to obtain and maintain valid and enforceable patents depends on whether the differences between our inventions and the prior art allow our inventions to be patentable over the prior art.

Furthermore, 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.

Furthermore, 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 be certain that we or our licensors were the first to make the inventions claimed in any of our owned or licensed patents or pending patent applications, or that we or our licensors were the first to file for patent protection of such inventions.

Intellectual property rights are uncertain and do not necessarily address all potential threats to our competitive advantage.*

The degree of future protection for our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage.

If we do not adequately protect our intellectual property and proprietary technology, competitors may be able to use mavodelpar, any future product candidates, and other proprietary technologies and erode or negate any competitive advantage we may have, which could have a material adverse effect on our financial condition and results of operations.

others may be able to make compounds that are similar to mavodelpar and any future product candidates but that are not covered by the claims of our patents;

The degree of future protection for our proprietary rights is uncertain and may only afford limited protection and may not adequately protect our rights or permit us to gain or keep our competitive advantage.

If we do not adequately protect our intellectual property and proprietary technology, competitors may be able to erode or negate any competitive advantage we may have, which could have a material adverse effect on our financial condition and results of operations.

• others may be able to make products that are similar to any of our product candidates but that are not covered by the claims of our patents;

• we might not have been the first to make the inventions covered by our pending patent applications;

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patent offices.

We cannot be certain that the claims in our issued patents and pending patent applications covering mavodelpar or any future product candidates will be considered patentable by the USPTO, courts in the United States, or by patent offices and courts in foreign countries.

We cannot be certain that the claims in our issued patents and pending patent applications covering any product candidates will be considered patentable by the USPTO, courts in the United States, or by patent offices and courts in foreign countries.

Furthermore, the laws of some foreign countries do not protect proprietary rights to the same extent or in the same manner as the laws of the United States.

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The strength of patents in the biotechnology and pharmaceutical fields involves complex legal and scientific questions and can be uncertain.

The patent applications that we own or in-license may fail to result in issued patents with claims that cover mavodelpar and any future product candidates in the United States or in foreign countries.

The patent applications that we own or in-license may fail to result in issued patents with claims that cover any product candidates in the United States or in foreign countries.

Even if such patents do successfully issue, third parties may challenge the ownership, validity, enforceability, or scope thereof, which may result in such patents being narrowed, invalidated, or held unenforceable.

Any successful opposition to our patents could deprive us of exclusive rights necessary for the successful commercialization of mavodelpar and any future product candidates.

Furthermore, even if they are unchallenged, our patents may not adequately protect our intellectual property, provide exclusivity for mavodelpar or any future product candidates or prevent others from designing around our claims.

If the breadth or strength of protection provided by the patents we hold with respect to mavodelpar or any future product candidates is threatened, it could dissuade companies from collaborating with us to develop, or threaten our ability to commercialize, mavodelpar or any future product candidates.

Any successful opposition to our patents could deprive us of exclusive rights necessary for the successful commercialization of any product candidates.

Furthermore, even if they are unchallenged, our patents may not adequately protect our intellectual property, provide exclusivity for any product candidates or prevent others from designing around our claims.

If the breadth or strength of protection provided by the patents we hold with respect to any future candidates is threatened, it could dissuade companies from collaborating with us to develop, or threaten our ability to commercialize, any product candidates.

Composition of matter patents for pharmaceutical product candidates, in particular patents with claims covering the molecular structure of the active pharmaceutical ingredient, often provide the strongest form of intellectual property protection for those types of products, as such patents provide protection without regard to any variations in formulation, method of use, or manufacturing process of the product.

While we have an exclusive license to compositions of matter patents covering the molecular structure of mavodelpar, those patents will expire, absent patent term adjustment or extension, before the expiration of any regulatory exclusivity period that we may receive for mavodelpar.

We also own two issued patents in the United States, that are expected to expire in 2041, absent any patent term adjustments or extensions, one pending application in the United States, and 15 pending applications in foreign countries directed to polymorphs of mavodelpar.

We cannot be certain that the claims in our pending patent applications directed to the polymorphs of mavodelpar will be considered patentable 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.

Method of use patents protect the use of a product for the specified method.

This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method.

Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.”

Although off-label prescriptions may infringe or contribute to the infringement of method of

use patents, the practice is common and such infringement is difficult to prevent or prosecute.

Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products “off-label.” Although off-label prescriptions may infringe or contribute to the infringement of method of use patents, the practice is common and such infringement is difficult to prevent or prosecute.

Method of synthesis patents protect the method used to manufacture a product.

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patent law, including provisions that affect the way patent applications will be prosecuted and may also affect patent litigation.

In particular, under the Leahy-Smith Act, the United States transitioned in March 2013 to a “first inventor to file”

system in which, assuming that other requirements of patentability are met, the first inventor to file a patent application will be entitled to the patent regardless of whether a third party was first to invent the claimed invention.

In particular, under the Leahy-Smith Act, the United States transitioned in March 2013 to a “first inventor to file” system in which, assuming that other requirements of patentability are met, the first inventor to file a patent application will be entitled to the patent regardless of whether a third party was first to invent the claimed invention.

A third party that files a patent application in the USPTO after March 2013 but before us could therefore be awarded a patent covering an invention of ours even if we had made the invention before it was made by such third party.

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These include allowing third-party submission of prior art to the USPTO during patent prosecution and additional procedures to attack the validity of a patent by USPTO administered post-grant proceedings, including PGR, IPR, and derivation proceedings.

An adverse determination in any such submission or proceeding could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position.

An adverse determination in

any such submission or proceeding could reduce the scope or enforceability of, or invalidate, our patent rights, which could adversely affect our competitive position.

Because of a lower evidentiary standard in USPTO proceedings compared to the evidentiary standard in United States federal courts necessary to invalidate a patent claim, a third party could potentially provide evidence in a USPTO proceeding sufficient for the USPTO to hold a claim invalid even though the same evidence would be insufficient to invalidate the claim if first presented in a district court action.

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Changes in U.S.

patent law, or patent laws in other countries, could diminish the value of patents in general, thereby impairing our ability to protect mavodelpar, any future product candidates, and other proprietary technologies.

patent law, or patent laws in other countries, could diminish the value of patents in general, thereby impairing our ability to protect any product candidates and other proprietary technologies.

As is the case with other biotechnology and pharmaceutical companies, our success is heavily dependent on intellectual property, particularly on obtaining and enforcing patents.

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For example, the America Invents Act created new administrative post-grant proceedings, including post-grant review, inter partes review, and derivation proceedings that allow third parties to challenge the validity of issued patents.

This applies to all of our U.S.

This applies to all U.S.

patents, even those issued before March 16, 2013.

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In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.

Depending on decisions by the U.S.

Depending on decisions by the

Congress, the federal courts, and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

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This will require us to be cognizant going forward of the time from invention to filing of a patent application.

Since patent applications in the United States and most other countries are confidential for a period of time after filing or until issuance, we cannot be certain that we or our licensors were the first to either (i) file any patent application related to our product candidates and other proprietary technologies we may develop or (ii) invent any of the inventions claimed in our or our licensor’s patents or patent applications.

Even where we have a valid and enforceable patent, we may not be able to exclude others from practicing the claimed invention where the other party can show that they used the invention in commerce before our filing date or the other party benefits from a compulsory license.

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Patents are of national or regional effect.

Filing, prosecuting, and defending patents on mavodelpar, any future product candidates, and other proprietary technologies we develop in all countries throughout the world would be prohibitively expensive.

Filing, prosecuting, and defending patents on any product candidates and other proprietary technologies we develop in all countries throughout the world would be prohibitively expensive.

In addition, the laws of some foreign countries do not protect intellectual property rights in the same manner and to the same extent as laws in the United States.

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Competitors may use our technologies in jurisdictions where we have not obtained patent protection to develop their own products and further, may export otherwise infringing products to territories where we have patent protection, but enforcement of such patent protection is not as strong as that in the United States.

These products may compete with our products and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

These products may compete with our product candidates and our patents or other intellectual property rights may not be effective or sufficient to prevent them from competing.

The requirements for patentability may differ in certain countries.

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The option of a Unitary Patent is a significant change in European patent practice.

As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty.

As the UPC is a new court system, there is no precedent for the court, increasing the

Proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patents at risk of being invalidated or interpreted narrowly, and could provoke third parties to assert claims against us.

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While we will endeavor to try to protect our technologies, products and product candidates with intellectual property rights such as patents, as appropriate, the process of obtaining patents is time consuming, expensive and unpredictable.

Further, geo-political actions in the United States and in foreign countries could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future licensors and the maintenance, enforcement or defense of our issued patents or those of any current or future licensors.

For example, the United States and foreign government actions related to Russia’s invasion of Ukraine may limit or prevent filing, prosecution and maintenance of patent applications in Russia.

Government actions may

also prevent maintenance of issued patents in Russia.

These actions could result in abandonment or lapse of our patents or patent applications, resulting in partial or complete loss of patent rights in Russia.

If such an event were to occur, it could have a material adverse effect on our business.

In addition, a decree was adopted by the Russian government in March 2022, allowing Russian companies and individuals to exploit inventions owned by patentees that have citizenship or nationality in, are registered in, or have predominately primary place of business or profit-making activities in the United States and other countries that Russia has deemed unfriendly without consent or compensation.

Consequently, we would not be able to prevent third parties from practicing our inventions in Russia or from selling or importing products made using our inventions in and into Russia.

Further, geo-political actions in the United States and in foreign countries (such as the Russia and Ukraine conflict) could increase the uncertainties and costs surrounding the prosecution or maintenance of our patent applications or those of any current or future licensors and the maintenance, enforcement or defense of our issued patents or those of any current or future licensors.

Accordingly, our competitive position may be impaired, and our business, financial condition, results of operations and prospects may be adversely affected.

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The failure to name the proper inventors on a patent application can result in the patents issuing thereon being unenforceable.

For example, we may have inventorship disputes arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing mavodelpar or as a result of questions regarding co-ownership of potential joint inventions.

For example, we may have inventorship disputes arise from conflicting views regarding the contributions of different individuals named as inventors, the effects of foreign laws where foreign nationals are involved in the development of the subject matter of the patent, conflicting obligations of third parties involved in developing any product candidates, or as a result of questions regarding co-ownership of potential joint inventions.

Litigation may be necessary to resolve these and other claims challenging inventorship and/or ownership.

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Such claims could have a material adverse effect on our business, financial condition, results of operations, and prospects.

We may not be successful in obtaining or maintaining necessary rights to product components and processes for our development pipeline through acquisitions and in-licenses.

Presently we have intellectual property rights through licenses from third parties, including vTv Therapeutics, related to mavodelpar.

Because our program may require the use of additional proprietary rights held by third parties, the growth of our business will likely depend in part on our ability to acquire, in-license or use these proprietary rights.

In addition, mavodelpar may require specific formulations to work effectively and efficiently and these rights may be held by others.

We may be unable to acquire or in-license, on reasonable terms, proprietary

rights related to any compositions, formulations, methods of use, processes or other intellectual property rights from third parties that we identify as being necessary for mavodelpar.

We may not be successful in obtaining or maintaining necessary intellectual property rights for our future operations.

Our future operations may require the use of proprietary rights held by third parties and the growth of our business will likely depend in part on our ability to acquire, in-license or use these proprietary rights.

We may be unable to acquire or in-license, on reasonable terms, proprietary rights from third parties that we identify as being necessary for our business.

In such event, we may be required to expend significant time and resources to develop or license replacement technology, which may not be available.

Even if we are able to obtain a license to such proprietary rights, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

The patent protection and patent prosecution for mavodelpar and any future product candidates may be dependent on third parties.*

While we normally seek to obtain the right to control prosecution, maintenance and enforcement of the patents relating to our product candidates, there may be times when the filing and prosecution activities for patents and patent applications relating to our product candidates are controlled by our future licensors or collaboration partners.

The patent protection and patent prosecution for any product candidates may be dependent on third parties.

While we historically have sought to obtain the right to control prosecution, maintenance and enforcement of the patents relating to our product candidates, there may be times when the filing and prosecution activities for patents and patent applications relating to our product candidates are controlled by our future licensors or collaboration partners.

When we obtain licenses from or collaborate with third parties, we may not have the right to control the preparation, filing, and prosecution of patent applications, or to maintain the patents, covering technology that we license from third parties, or such activities, if controlled by us, may require the input of such third parties.

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If any of our future licensors or collaboration partners fail to prosecute, maintain and enforce such patents and patent applications in a manner consistent with the best interests of our business, including by payment of all applicable fees for patents covering our product candidates, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, our ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products.

In addition, even where we have the right to control patent prosecution of patents and patent applications we have licensed to and from third parties, we may still be adversely affected or prejudiced by actions or inactions of our licensees, our future licensors and their counsel that took place prior to the date upon which we assumed control over patent prosecution.

In addition, even where we have the right to control patent prosecution of patents and patent applications we have licensed from third parties, we may still be adversely affected or prejudiced by actions or inactions of our licensors, our future licensors, and their counsel that took place prior to the date upon which we assumed control over patent prosecution.

Moreover, if we do obtain necessary licenses, we will likely have obligations under those licenses, including making royalty and milestone payments, and any failure to satisfy those obligations could give our licensor the right to terminate the license.

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Furthermore, if any licenses terminate, or if the underlying patents fail to provide the intended exclusivity, competitors or other third parties may gain the freedom to seek regulatory approval of, and to market, products identical or similar to ours.

Moreover, our licensors may own or control intellectual property that has not been licensed to us and, as a result, we may be subject to claims, regardless of their merit, that we are infringing or otherwise violating the licensor’s rights.

In addition, while we cannot currently determine the amount of the royalty obligations we would be required to pay on sales of future products, if any, the amounts may be significant.

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Therefore, even if we successfully develop and commercialize products, we may be unable to achieve or maintain profitability.

Our rights to develop and commercialize our technology and product candidates may be subject, in part, to the terms and conditions of licenses granted to us by others.

Our rights to develop and commercialize product candidates may be subject, in part, to the terms and conditions of licenses granted to us by others.

Moreover, some of our owned and in-licensed patents or patent applications in the future may be co-owned with third parties.

If we are unable to obtain an exclusive license to any such third-party co-owners’

interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties,

including our competitors, and our competitors could market competing products and technology.

If we are unable to obtain an exclusive license to any such third-party co-owners’ interest in such patents or patent applications, such co-owners may be able to license their rights to other third parties, including our competitors, and our competitors could market competing products and technology.

In addition, we may need the cooperation of any such co-owners of our patents in order to enforce such patents against third parties, and such cooperation may not be provided to us.

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Any of the foregoing could have a material adverse effect on our competitive position, business, financial condition, results of operations and prospects.

The licensing and acquisition of third-party proprietary rights is a competitive area, and companies, which may be more established, or have greater resources than we do, may also be pursuing strategies to license or acquire third-party proprietary rights that we may consider necessary or attractive in order to commercialize mavodelpar.

More established companies may have a competitive advantage over us due to their size, cash resources and greater clinical development and commercialization capabilities.

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Even if we are able to obtain a license, it may be non-exclusive, thereby giving our competitors access to the same technologies licensed to us.

In that event, we may be required to expend significant time and resources to redesign our technology, product candidates, or the methods for manufacturing them or to develop or license replacement technology, all of which may not be feasible on a technical or commercial basis.

In that event, we may be required to expend significant time and resources to redesign product candidates and technology, or the methods for manufacturing them or to develop or license replacement technology, 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 candidates, 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 technology, manufacturing methods, product candidates, or future methods or products 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.

We cannot provide any assurances that third-party patents do not exist which might be enforced against our technology, manufacturing methods, product candidates, or future methods or products 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.

In addition, companies that perceive us to be a competitor may be unwilling to assign or license rights to us, either on reasonable terms, or at all.

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If we are unable to successfully obtain rights to required third-party intellectual property rights on commercially reasonable terms, our ability to commercialize our products, and our business, financial condition, and prospects for growth, 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 technology and products in the future.

We may enter into license agreements in the future with others to advance our research or allow commercialization of product candidates.

For example, we may collaborate with U.S.

and foreign academic institutions to accelerate our preclinical research or development under written agreements with these institutions.

Typically, these institutions provide us with an option to negotiate an exclusive license to any of the institution’s proprietary rights in technology resulting from the collaboration.

Regardless of such option to negotiate a license, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to us.

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In such an event, we cannot be certain that these patents and patent applications will be prepared, filed, prosecuted, maintained, enforced, and defended in a manner consistent with the best interests of our business.

If our future licensors fail to prosecute, maintain, enforce, and defend such patents or patent applications, or lose rights to those patents or patent applications, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize any of our future product candidates that are subject of such licensed rights could be adversely affected.

If our future licensors fail to prosecute, maintain, enforce, and defend such patents or patent applications, or lose rights to those patents or patent applications, the

rights we have licensed may be reduced or eliminated, and our right to develop and commercialize any of our future product candidates that are subject of such licensed rights could be adversely affected.

Our future licensors may rely on third-party consultants or collaborators or on funds from third parties such that our future licensors are not the sole and exclusive owners of the patents we in-license.

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This could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects.

We are a party to the vTv License Agreement under which we are granted intellectual property rights that are important to our business and our only product candidate, mavodelpar.

If we fail to comply with our obligations under the license agreement, or we are subject to insolvency, the license agreement may be terminated, in which event we would not be able to develop, commercialize or market mavodelpar.

The agreements under which we license intellectual property or technology from third parties are complex, and certain provisions in such agreements may be susceptible to multiple interpretations.

If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our business relationships with our licensors, we could lose license rights that are important to our business.

We may enter into license agreements under which we are granted intellectual property rights that are important to our business and product candidates.

If we fail to comply with our obligations under such license agreements, such license agreements may be terminated.

The agreements under which we may license intellectual property or technology from third parties may be complex, and certain provisions in such agreements may be susceptible to multiple interpretations.

The resolution of any contract interpretation disagreement that may arise could narrow what we believe to be the scope of our rights to the relevant intellectual property or technology, or increase what we believe to be our financial or other obligations under the relevant agreement, either of which could have a material adverse effect on our business, financial condition, results of operations, and prospects.

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• our right to sublicense intellectual property rights to third parties under collaborative development relationships;

our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of mavodelpar, and what activities satisfy those diligence obligations;

• our diligence obligations with respect to the use of the licensed technology in relation to our development and commercialization of any product candidates, and what activities satisfy those diligence obligations;

• the ownership of inventions and know-how resulting from the joint creation or use of intellectual property by our licensors and us and our partners.

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The inability to obtain any third-party license required to develop or commercialize any of our product candidates could cause us to abandon any related efforts, which could seriously harm our business and operations.

Any collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our products.

Any collaboration arrangements that we may enter into in the future may not be successful, which could adversely affect our ability to develop and commercialize our product candidates.

Any future collaborations that we enter into may not be successful.

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• 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 products 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 mavodelpar and any future product candidates;

• collaborators may not pursue development and commercialization of our product candidates 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 any product candidates;

• 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;

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• collaborators may own or co-own intellectual property covering our products 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;

a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

• a collaborator’s sales and marketing activities or other operations may not be in compliance with applicable laws resulting in civil or criminal proceedings.

Third-party claims alleging intellectual property infringement may prevent or delay our drug discovery and development efforts.*

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Numerous U.S.

and foreign issued patents and pending patent applications, which are owned by third parties, exist in the fields in which we are developing mavodelpar.

and foreign issued patents and pending patent applications, which are owned by third parties, may exist in the fields in which we develop any product candidates.

Litigation or other legal proceedings relating to intellectual property claims, with or without merit, is unpredictable and generally expensive and time consuming and, even if resolved in our favor, is likely to divert significant resources from our core business, including distracting our technical and management personnel from their normal responsibilities.

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Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could have a material adverse effect on our ability to compete in the marketplace.

As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that our activities related to mavodelpar may give rise to claims of infringement of the patent rights of others.

As the biotechnology and pharmaceutical industries expand and more patents are issued, the risk increases that any future activities related to any product candidates may give rise to claims of infringement of the patent rights of others.

The biotechnology and pharmaceutical industries have produced a proliferation of patents, and it is not always clear to industry participants, including us, which patents cover various types of products or methods of use.

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We may not be aware of patents that have already issued that a third party might assert are infringed by one of our current or future product candidates.

Nevertheless, we are not aware of any issued patents that will prevent us from marketing mavodelpar.

technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use and sell our products.

Third parties, including our competitors, in both the United States and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent,

limit or otherwise interfere with our ability to make, use and sell our products.

We do not always conduct independent reviews of pending patent applications and patents issued to third parties.

Third parties may assert that we are employing their proprietary technology without authorization.

There may be third-party patents of which we are currently unaware with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of mavodelpar and any future product candidates.

Because patent applications can take many years to issue and may be confidential for 18 months or more after filing, there may be currently pending third-party patent applications which may later result in issued patents that mavodelpar, any future product candidates, and other proprietary technologies may infringe, or which such third parties claim are infringed by the use of our technologies.

Parties making claims against us for infringement or misappropriation of their intellectual property rights may seek and obtain injunctive or other equitable relief, which could effectively block our ability to further develop and commercialize mavodelpar or future product candidates.

Because patent applications can take many years to issue and may be confidential for 18 months or more after filing, there may be currently pending third-party patent applications which may later result in issued patents that any product candidates and other proprietary technologies may infringe, or which such third parties claim are infringed by the use of our technologies.

Defense of these claims, regardless of their merit, could involve substantial expenses and could be a substantial diversion of management and other employee resources from our business.

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• cause development delays;

prevent us from commercializing mavodelpar or any future product candidates until the asserted patent expires or is finally held invalid, unenforceable, or not infringed in a court of law;

• prevent us from commercializing any product candidates until the asserted patent expires or is finally held invalid, unenforceable, or not infringed in a court of law;

• require us to develop non-infringing technology, which may not be possible on a cost-effective basis;

• require us to pay damages to the party whose intellectual property rights we may be found to be infringing, which may include treble damages if we are found to have been willfully infringing such intellectual property;

require us to pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be willfully infringing;

• require us to pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be willfully infringing;

• require us to enter into royalty or license agreements, which may not be available on commercially reasonable terms, or at all, or which might be non-exclusive, which could result in our competitors gaining access to the same technology.

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For example, in the United States, proving invalidity before federal courts requires a showing of clear and convincing evidence to overcome the presumption of validity enjoyed by issued patents.

Even if we are successful in these proceedings, we may incur substantial costs and divert management’s time and attention in pursuing these proceedings, which could have a material adverse effect on us.

If we are unable to avoid infringing the patent rights of others, we may be required to seek a license, which may not be available, defend an infringement action or challenge the validity or enforceability of the patents in court.

Patent litigation is costly and time-consuming.

We may not have sufficient

resources to bring these actions to a successful conclusion.

In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents declared invalid or unenforceable, we may incur substantial monetary damages, encounter significant delays in bringing mavodelpar and any future product candidates to market and be precluded from developing, manufacturing or selling mavodelpar and any future product candidates.

We may not have sufficient resources to bring these actions to a successful conclusion.

In addition, if we do not obtain a license, develop or obtain non-infringing technology, fail to defend an infringement action successfully or have infringed patents

declared invalid or unenforceable, we may incur substantial monetary damages, encounter significant delays in bringing any product candidates to market and be precluded from developing, manufacturing or selling any such product candidates.

We do not always conduct independent reviews of pending patent applications and patents issued to third parties.

We cannot be certain that any of our or our licensors’

patent searches or analyses, including but not limited to the identification of relevant patents, analysis of the scope of relevant patent claims or determination of the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States, Europe and elsewhere that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction, because:

We cannot be certain that any of our or our licensors’ patent searches or analyses, including but not limited to the identification of relevant patents, analysis of the scope of relevant patent claims or determination of the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States, Europe and elsewhere that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction, because:

• some patent applications in the United States may be maintained in secrecy until the patents are issued;

• patent applications in the United States and elsewhere can be pending for many years before issuance, or unintentionally abandoned patents or applications can be revived;

pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies, mavodelpar, and any future product candidates or the use of mavodelpar and any future product candidates;

• pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our technologies and any product candidates or the use of any such product candidates;

• identification of third-party patent rights that may be relevant to our technology is difficult because patent searching is imperfect due to differences in terminology among patents, incomplete databases, and the difficulty in assessing the meaning of patent claims;

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• publications in the scientific literature often lag behind actual discoveries.

Furthermore, the scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history and can involve other factors such as expert opinion.

Our interpretation of the relevance or the scope of claims in a patent or a pending application may be incorrect, which may negatively impact our ability to market our products.

Further, we may incorrectly determine that our technologies, products, or product candidates are not covered by a third-party patent or may incorrectly predict whether a third party’s pending patent application will issue with claims of relevant scope.

Our determination of the expiration date of any patent in the United States or internationally that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our products or product candidates.

Furthermore, we cannot guarantee that any of our patent searches or analyses, including the identification of relevant patents, the scope of patent claims or the expiration of relevant patents, are complete or thorough, nor can we be certain that we have identified each and every third-party patent and pending application in the United States and abroad that is relevant to or necessary for the commercialization of our product candidates in any jurisdiction.

Our competitors may have filed, and may in the future file, patent applications covering technology similar to ours, and others may have or obtain patents or proprietary rights that could limit our ability to make, use, sell, offer for sale or import mavodelpar and future approved products or impair our competitive position.

Our competitors may have filed, and may in the future file, patent applications covering technology similar to ours, and others may have or obtain patents or proprietary rights that could limit our ability to make, use, sell, offer for sale or import future approved products or impair our competitive position.

Numerous third-party U.S.

and foreign issued patents and pending patent applications exist in the fields in which we are developing product candidates.

There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for treatment related to the use or manufacture of mavodelpar and any future product candidates.

Any such patent application may have priority over our patent applications, which could further require us to obtain rights to issued patents covering such technologies.

If another party has filed a U.S.

patent application on inventions similar to ours, we may have to participate in an interference

proceeding declared by the USPTO to determine priority of invention in the United States.

patent application on inventions similar to ours, we may have to participate in an interference proceeding declared by the USPTO to determine priority of invention in the United States.

The costs of these proceedings could be substantial, and it is possible that such efforts would be unsuccessful if, unbeknownst to us, the other party had independently arrived at the same or similar invention prior to our own invention, resulting in a loss of our U.S.

patent position with respect to such inventions.

patent position with

respect to such inventions.

Other countries have similar laws that permit secrecy of patent applications and may be entitled to priority over our applications in such jurisdictions.

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In addition, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our business, results of operations, financial condition and prospects.

fees if we are found to be willfully infringing a third party’s patents, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.

If we are found to infringe a third party’s intellectual property rights, we could be forced, including by court order, to cease developing, manufacturing or commercializing the infringing product candidate or product, we may have to pay substantial damages, including treble damages and attorneys’ fees if we are found to be willfully infringing a third party’s patents, obtain one or more licenses from third parties, pay royalties or redesign our infringing products, which may be impossible or require substantial time and monetary expenditure.

We cannot predict whether any such license would be available at all or whether it would be available on commercially reasonable terms.

Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or allow commercialization of mavodelpar and any future product candidates.

Furthermore, even in the absence of litigation, we may need to obtain licenses from third parties to advance our research or allow commercialization of our product candidates.

We may fail to obtain any of these licenses at a reasonable cost or on reasonable terms, if at all.

In that event, we would be unable to further develop and commercialize mavodelpar and any future product candidates, which could harm our business significantly.

In that event, we would be unable to further develop and commercialize any such product candidates, which could harm our business significantly.

Even if we were able to obtain a license, the rights may be nonexclusive, which may give our competitors access to the same intellectual property.

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Third parties including competitors may infringe, misappropriate or otherwise violate our patents, patents that may issue to us in the future, or the patents of our licensors that are licensed to us.

To stop or prevent

infringement or unauthorized use, we may need to or choose to file infringement claims, which can be expensive and time-consuming.

To stop or prevent infringement or unauthorized use, we may need to or choose to file infringement claims, which can be expensive and time-consuming.

We may not be able to stop or prevent, alone or with our licensors, infringement, misappropriation, or other violation of our intellectual property, particularly in countries where the laws may not protect those rights as fully as in the United States.

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Such a loss of patent protection would have a material adverse impact on our business.

There is also a risk that, even if the validity of our patents is upheld, the court will decide that we do not have the right to stop the other party from using the invention at issue on the grounds that our patent claims do not cover such invention, or decide that the other party’s use of our patented technology falls under the safe harbor to patent infringement under 35 U.S.C.

With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of which we, our future licensors, and the patent examiners are unaware during prosecution.

There is also no assurance that there is not prior art of which we are aware, but which we do not believe affects the validity or enforceability of a claim in our patents and patent applications or the patents and patent applications of our future licensors, which may, nonetheless, ultimately be found to affect the validity or enforceability of a claim.

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 on our technology or platform, or any product candidates that we may develop.

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 we need for our development programs and competitive position.

Such a loss of patent protection would have a material adverse impact on our business, financial condition, results of operations and prospects.

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Our defense of litigation or interference proceedings may fail and, even if successful, may result in substantial costs and distract our management and other employees.

In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to continue our clinical trials, continue our research programs, license necessary technology from third parties, or enter into development or manufacturing partnerships that would help us bring mavodelpar and any future product candidates to market.

In addition, the uncertainties associated with litigation could have a material adverse effect on our ability to raise the funds necessary to commence and continue any future clinical trials and research programs, license necessary technology from third parties, or enter into development or manufacturing partnerships that would help us bring any product candidates to market.

Even if resolved in our favor, litigation or other legal proceedings relating to our intellectual property rights may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities.

In addition, there could be public announcements of the results of hearings, motions, or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.

Such litigation or

proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing, or distribution activities.

We may not have sufficient financial or other resources to conduct such litigation or proceedings adequately.

Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing, or distribution activities.

We may not have sufficient financial or other resources to prevail in such litigation or other legal proceedings.

Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we could because of their greater financial resources.

Uncertainties resulting from the initiation and continuation of patent litigation or other proceedings could compromise our ability to compete in the marketplace.

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It may be difficult to detect infringers who do not advertise the components or methods that are used in connection with their products and services.

Moreover, it may be difficult or impossible to obtain evidence of infringement in a competitor’s or potential competitor’s product or service.

We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded if we were to prevail may not be commercially meaningful.

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In addition, the issuance of a patent does not give us the right to practice the patented invention.

Third parties may have blocking patents that could prevent us from marketing our own patented product(s) and practicing our own patented technologies.

Third parties may have blocking patents that could prevent us from marketing our own patented product and practicing our own patented technology.

Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties.

Because of the expense and uncertainty of litigation, we may not be in a position to enforce our intellectual property rights against third parties and we may conclude that even if a third party is infringing our issued patent, any patents that may be issued as a result of our pending or future patent applications or other intellectual property rights, the risk-adjusted cost of bringing and enforcing such a claim or action may be too high or not in the best interest of our company or our stockholders.

In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to continue our clinical trials, continue our internal research programs, in-license needed technology or other product candidates, or enter into development partnerships that would help us bring our product candidates to market.

In addition, the uncertainties associated with litigation could compromise our ability to raise the funds necessary to continue any future clinical trials, continue our internal research programs, in-license needed technology or other product candidates, or enter into development partnerships that would help us bring our product candidates to market.

In such cases, we may decide that the more prudent course of action is to simply monitor the situation or initiate or seek some other non-litigious action or solution.

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In addition, others may independently discover our trade secrets and proprietary information.

For example, the FDA, as part of its Transparency Initiative, is currently considering whether to make additional information publicly available on a routine basis, including information that we may consider to be trade secrets or other proprietary information, and it is not clear at the present time how the FDA’s disclosure policies may change in the future, if at all.

Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position.

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Trade secrets may be independently developed by others in a manner that could prevent legal recourse by us.

Trade secrets will over time be disseminated within the industry through independent development, the publication of journal articles, and the movement of personnel skilled in the art from company to company or

academic to industry scientific positions.

Though our agreements with third parties typically restrict the ability of our employees, outside scientific collaborators, CROs, third-party manufacturers, consultants, advisors, potential partners, and other third parties, to publish data potentially relating to our trade secrets, our agreements may contain certain limited publication rights.

If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent such competitor from using that technology or information to compete with us, which could harm our competitive position.

Because from time to time we expect to rely on third parties in the development, manufacture, and distribution of our products and provision of our services, we must, at times, share trade secrets with them.

Because from time to time we expect to rely on third parties in the development, manufacture, and distribution of our products and provision of our

services, we must, at times, share trade secrets with them.

Despite employing the contractual and other security precautions described above, the need to share trade secrets increases the risk that such trade secrets become known by our competitors, are inadvertently incorporated into the technology of others, or are disclosed or used in violation of these agreements.

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If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our current or future trademarks or trade names may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks, and we may be unable to obtain future trademarks or trade names that we intend to use.

Trademarks or trade names that we intend to use may be challenged, infringed, circumvented or declared generic or determined to be infringing on other marks, and we may be unable to obtain alternative trademarks or trade names.

We may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers in our markets of interest.

At times, competitors may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion.

In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations

of our registered or unregistered trademarks or trade names.

In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names.

During trademark registration proceedings, we may receive rejections of our applications by the USPTO or in other foreign jurisdictions.

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Opposition or cancellation proceedings may be filed against our trademarks, and our trademarks may not survive such proceedings.

Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected.

Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to

compete effectively and our business may be adversely affected.

We may license our trademarks and trade names to third parties, such as distributors.

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Our efforts to enforce or protect our proprietary rights related to trademarks, trade names, trade secrets, domain names, copyrights, or other intellectual property may be ineffective and could result in substantial costs and diversion of resources and could adversely affect our financial condition or results of operations.

Moreover, any name we have proposed to use with mavodelpar in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark.

Moreover, any name we propose to use with any product candidates in the United States must be approved by the FDA, regardless of whether we have registered it, or applied to register it, as a trademark.

The FDA typically conducts a review of proposed product names, including an evaluation of potential for confusion with other product names.

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Risks Related to Ownership of Our Common Stock

If we fail to satisfy applicable listing standards, our common stock may be delisted from the Nasdaq Global Market.

Our ability to publicly or privately sell equity securities and the liquidity of our common stock could be adversely affected if we are delisted from The Nasdaq Global Market or if we are unable to transfer our listing to another stock market.

The continued listing requirements of The Nasdaq Global Market include minimums for market value of listed securities, closing prices and stockholders’ equity.

Currently, our stock trades above these minimum requirements, but we cannot assure that our stock will continue to meet these minimum requirements.

If our common stock is delisted by Nasdaq, it could lead to a number of negative implications, including an adverse effect on the price of our common stock, increased volatility in our common stock, reduced liquidity in our common stock, the loss of federal preemption of state securities laws and greater difficulty in obtaining financing.

In addition, delisting of our common stock could deter broker-dealers from making a market in or otherwise seeking or generating interest in our common stock, could result in a loss of current or future coverage by certain sell-side analysts and might deter certain institutions and persons from investing in our securities at all.

Delisting could also cause a loss of confidence of our customers, collaborators, vendors, suppliers and employees, which could harm our business and future prospects.

If our common stock is delisted by Nasdaq, the price of our common stock may decline, and although our common stock may be eligible to trade on the OTC Bulletin Board, another over-the-counter quotation system, or on the pink sheets, an investor may find it more difficult to dispose of their common stock or obtain accurate quotations as to the market value of our common stock.

Further, if we are delisted, we would incur additional costs under state blue sky laws in connection with any sales of our securities.

These requirements could severely limit the market liquidity of our common stock and the ability of our stockholders to sell our common stock in the secondary market.

An active, liquid and orderly trading market for our common stock may not be sustained.

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The trading price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control, including limited trading volume.

In addition to the factors discussed in this “Risk Factors”

section and elsewhere in this Quarterly Report on Form 10-Q, these factors include:

the commencement, enrollment or results of our ongoing and planned clinical trials of mavodelpar or any future clinical trials we may conduct for any future product candidates, or changes in the development status of mavodelpar or any future product candidates;

acceptance by the FDA and EMA of data from our ongoing pivotal STRIDE study or any future clinical trials we conduct;

any delay in our regulatory filings for mavodelpar and any future product candidates;

For example, the market price of our common stock declined significantly as a result of the announcement we made on December 14, 2023, regarding the topline results from our pivotal STRIDE study and a decision to suspend all mavodelpar development activities.

In addition to the factors discussed in this “Risk Factors” section and elsewhere in this Quarterly Report on Form 10-Q, these factors include:

• the commencement, enrollment or results of any future clinical trials we may conduct for any product candidates;

• acceptance by the FDA and EMA of data from any future clinical trials we conduct;

• any delay in our regulatory filings for any product candidates;

• adverse results or delays in clinical trials or preclinical studies;

• our decision to initiate a clinical trial, not to initiate a clinical trial, or to terminate an existing clinical trial;

adverse regulatory decisions, including failure to receive regulatory approval for mavodelpar and any future product candidates;

changes in laws or regulations applicable to mavodelpar and any future product candidates, including but not limited to clinical trial requirements for approvals;

our failure to commercialize mavodelpar and any future product candidates;

the failure to obtain coverage and adequate reimbursement of mavodelpar and any future product candidates, if approved;

• announcements of significant changes in our business or operations, including the decision not to pursue one or more drug development programs;

• adverse regulatory decisions, including failure to receive regulatory approval for any product candidates;

• changes in laws or regulations applicable to any product candidates, including but not limited to clinical trial requirements for approvals;

• our failure to commercialize any product candidates;

• the failure to obtain coverage and adequate reimbursement of any product candidates, if approved;

• changes in the structure of healthcare payment systems;

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• additions or departures of key scientific or management personnel;

unanticipated serious safety concerns related to the use of mavodelpar and any future product candidates;

• unanticipated serious safety concerns related to the use of any product candidates;

• introduction of new products or services offered by us or our competitors, or the release or publication of clinical trial results from competing product candidates;

• announcements of significant acquisitions, strategic partnerships, joint ventures or capital commitments by us or our competitors;

the size and growth, if any, of the markets for patients with PMM and LC-FAOD, and other rare genetic mitochondrial diseases that we may target;

• the size and growth, if any, of the markets for patients with diseases that we may target;

• publication of research reports about us or our industry or positive or negative recommendations or withdrawal of research coverage by securities analysts;

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In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities.

This risk is especially relevant for us because pharmaceutical companies have

experienced significant stock price volatility in recent years.

If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

This risk is especially relevant for us because pharmaceutical companies have experienced significant stock price volatility in recent years.

If we face such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm our business.

Our principal stockholders and management own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.

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This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders.

Our business could face adverse consequences as a result of the actions of activist stockholders.

We are and may in the future be subject to unsolicited attempts to gain control of our company, proxy contests, and other forms of stockholder activism.

For example, we have received unsolicited proposals from stockholders to acquire all outstanding shares of our common stock.

Our Board of Directors will carefully review and evaluate each proposal in consultation with our independent financial and legal advisors.

Our business could be adversely affected because responding to an unsolicited offer, proxy contest or other actions by activist stockholders can be costly and time-consuming, disruptive to our operations and divert the attention of management and our employees from the execution of our potential strategic alternatives.

In addition, actual or perceived uncertainties as to our future direction caused by activist activities may cause or appear to cause instability, potentially making it more difficult to retain qualified personnel and collaborators or leading to the loss of collaboration opportunities, and if individuals are elected to our Board of Directors with a specific agenda, it may adversely affect our ability to effectively and timely implement our strategic plans.

Activist stockholder activities may also cause significant fluctuations in our stock price based on temporary or speculative market perceptions, or other factors that do not necessarily reflect the fundamental underlying value of our business.

Finally, we might experience a significant increase in legal fees and administrative and associated costs incurred in connection with responding to an unsolicited offer, proxy contest or related action.

These actions could also negatively affect the price of our common stock.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.

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We are an emerging growth company and a smaller reporting company, and the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.*

We are an “emerging growth company”

as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act).

disclosure in this Quarterly Report on Form 10-Q, not being required to have our internal control over financial reporting audited by our independent registered public accounting firm under Section 404 of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the JOBS Act).

For as long as we continue to be an emerging growth company, we may take advantage of certain exemptions from various public company reporting requirements, including being permitted to provide only two years of audited financial statements, in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in this Quarterly Report on Form 10-Q, not being required to have our internal control over financial reporting audited by our independent registered public accounting firm under Section 404 of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We may take advantage of these exemptions until December 31, 2026 or until we are no longer an emerging growth company, whichever is earlier.

We will cease to be an emerging growth company prior to the end of such five-year period if certain earlier events occur, including if we become a “large accelerated filer”

as defined in Rule 12b-2 under the Exchange Act, our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period.

We will cease to be an emerging growth company prior to the end of such five-year period if certain earlier events occur, including if we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non-convertible debt in any three-year period.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies.

We have elected to use this extended

transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

We are also a “smaller reporting company”

as defined in the Exchange Act.

We have elected to use this extended transition period under the JOBS Act until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act.

We are also a “smaller reporting company” as defined in the Exchange Act.

We may continue to be a smaller reporting company even after we are no longer an emerging growth company, which would allow us to take advantage of many of the same exemptions available to emerging growth companies, including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation.

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Our internal control over financial reporting will not prevent or detect all errors and all fraud.

A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met.

Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud will be detected.

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As a public company, we have incurred and will continue to incur significant legal, accounting, and other expenses that we did not incur as a private company.

We are subject to the reporting requirements of the Exchange Act, which require, among other things, that we file with the SEC annual, quarterly, and current reports with respect to our business and financial condition.

We are subject to the reporting requirements of the Exchange Act, which requires, among other things, that we file with the SEC annual, quarterly, and current reports with respect to our business and financial condition.

In addition, the Sarbanes-Oxley Act, as well as rules subsequently adopted by the SEC and Nasdaq to implement provisions of the Sarbanes-Oxley Act, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices.

Further, in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was enacted.

There are significant corporate governance and executive compensation related provisions in the Dodd-Frank Act that require the SEC to adopt additional rules and regulations in these areas such as “say on pay”

and proxy access.

Emerging growth companies and smaller reporting companies are exempted from certain of these requirements, but we may be required to implement these requirements sooner than budgeted or planned and thereby incur unexpected expenses.

Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

Stockholder activism, the current political environment and the current high level of government

intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact the manner in which we operate our business in ways we cannot currently anticipate.

We expect the rules and regulations applicable to public companies to continue to substantially increase our legal and financial compliance costs and to make some activities more time-consuming and costly.

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These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

As of November 9, 2023, there were 33,311,787 shares of our common stock outstanding.

As of March 31, 2024, there were 33,420,808 shares of our common stock outstanding.

In addition, shares of common stock that are either subject to outstanding options, restricted stock units or performance-based restricted stock units or reserved for future issuance under our employee benefit plans will become eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, and Rule 144 and Rule 701 under the Securities Act of 1933, as amended (the Securities Act).

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Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.*

We expect that we will need significant additional capital in the future to continue our planned operations, including conducting clinical trials, commercialization efforts, expanded research and development activities, and costs associated with operating a public company.

We are not currently pursuing further clinical development of our only product candidate, mavodelpar.

If we resume such development or pursue development of any product candidates in the future, we expect that we will need significant additional capital.

To raise capital, we may sell common stock, convertible securities or other equity securities in one or more transactions at prices and in a manner we determine from time to time.

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Such sales may also result in material dilution to our existing stockholders, and new investors could gain rights, preferences and privileges senior to the holders of our common stock.

As of September 30, 2023, the remaining capacity under the 2022 ATM Facility was approximately $18.8 million in shares of common stock.

In November 2023, we terminated the 2022 ATM Facility.

In November 2023, we entered into the 2023 ATM Facility with Leerink under which we may offer and sell, from time to time, at our sole discretion, up to $100.0 million in shares of our common stock.

We have not yet sold any shares of our common stock under the 2023 ATM Facility.

Pursuant to our 2021 Equity Incentive Plan (the 2021 Plan), our management is authorized to grant stock options and other stock awards to our employees, directors and consultants.

Additionally, the number of shares of our common stock reserved for issuance under our 2021 Plan will automatically increase on January 1 of each year through and including January 1, 2031, by 5% of the total number of shares of our capital stock outstanding on December 31 of the preceding calendar year, or a lesser number of shares determined by our board of directors.

December 31 of the preceding calendar year, or a lesser number of shares determined by our Board of Directors.

In addition, pursuant to our 2021 Employee Stock Purchase Plan, the number of shares of our common stock reserved for issuance will automatically increase on January 1 of each calendar year through and including January 1, 2031, by the lesser of (i) 1% of the total number of shares of our common stock outstanding on the last day of the calendar month before the date of the automatic increase, and (ii) 729,174 shares;

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In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporate Law, which may prohibit certain business combinations with stockholders owning 15% or more of our outstanding voting stock.

These anti-takeover provisions and other provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for stockholders or potential acquirors to obtain control of our board of directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer, or proxy contest involving our company.

These anti-takeover provisions and other provisions in our amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult for

stockholders or potential acquirors to obtain control of our Board of Directors or initiate actions that are opposed by the then-current board of directors and could also delay or impede a merger, tender offer, or proxy contest involving our company.

These provisions could also discourage proxy contests and make it more difficult for you and other stockholders to elect directors of your choosing or cause us to take other corporate actions you desire.

Any delay or prevention of a change of control transaction or changes in our Board of Directors could cause the market price of our common stock to decline.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’

ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our amended and restated certificate of incorporation and amended and restated bylaws provide that the Court of Chancery of the State of Delaware is the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law:

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(v) any action or proceeding as to which the Delaware General Corporation Law confers jurisdiction to the Court of Chancery of the State of Delaware;

and (vi) any action asserting a claim against us or any of our directors, officers, or other employees governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject to the court’s having personal jurisdiction over the indispensable parties named as defendants.

These provisions would not apply to suits brought to enforce a duty or liability created by the Exchange Act.

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Accordingly, both state and federal courts have jurisdiction to entertain such claims.

To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by

different courts, among other considerations, our amended and restated certificate of incorporation and our amended and restated bylaws provide that the federal district courts of the United States of America are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, including all causes of action asserted against any defendant named in such complaint.

To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or contrary rulings by different courts, among other considerations, our amended and restated certificate of incorporation and our amended and restated bylaws provide that the federal district courts of the United States of America are the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act, including all causes of action asserted against any defendant named in such complaint.

While the Delaware courts have determined that such choice of forum provisions are facially valid and several state trial courts have enforced such provisions and required that suits asserting Securities Act claims be filed in federal court, there is no guarantee that courts of appeal will affirm the enforceability of such provisions and a stockholder may nevertheless seek to bring a claim in a venue other than those designated in the exclusive forum provisions.

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If a court were to find either exclusive forum provision in our amended and restated certificate of incorporation and our amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with litigating Securities Act claims in state court, or both state and federal court, which could seriously harm our business, financial condition, results of operations, and prospects.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers and other employees.

If a court were to find either exclusive forum provision contained in our amended and restated certificate of incorporation or amended and restated bylaws to be inapplicable or unenforceable in an action, we may incur further significant additional costs associated with resolving the dispute in other jurisdictions, all of which could seriously harm our business.

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Customs regulations, and various economic and trade sanctions regulations administered by the U.S.

Treasury Department’s Office of Foreign Assets Controls, and anti-corruption and anti-money laundering laws and regulations, including the FCPA, the U.S.

domestic bribery statute contained in 18 U.S.C.

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Business disruptions could seriously harm our future revenues and financial condition and increase our costs and expenses.

Our operations, and those of our CROs and other contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured.

Our operations, and those of our contractors and consultants, could be subject to earthquakes, power shortages, telecommunications failures, water shortages, floods, hurricanes, typhoons, fires, extreme weather conditions, medical epidemics and other natural or man-made disasters or business interruptions, for which we are predominantly self-insured.

The occurrence of any of these business disruptions could seriously harm our operations and financial condition and increase our costs and expenses.

We rely on third-party manufacturers to produce mavodelpar.

Our ability to obtain clinical supplies of mavodelpar and any future product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption.

We are not currently pursuing further clinical development of our only product candidate, mavodelpar.

If we resume such development or pursue development of other product candidates, our ability to obtain clinical supplies of mavodelpar and any future product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption.

Our corporate headquarters is located in California near major earthquake faults and fire zones.

The ultimate impact on us, our suppliers and our general infrastructure of being located near major earthquake faults and fire zones and being consolidated in certain geographical areas is unknown, but our operations and financial condition could suffer in the event of a major earthquake, fire or other natural disaster.

If our information technology systems or data, or those of third parties upon which we rely, are or were compromised, we could experience adverse consequences resulting from such compromise, including but not limited to regulatory investigations or actions;

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;

fines and penalties;

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loss of revenue or profits;

loss of customers or sales;

and other adverse consequences.*

In the ordinary course of our business, we and the third parties upon which we rely process sensitive data, and, as a result, we and the third parties upon which we rely face a variety of evolving threats, including but not limited to ransomware attacks, which could cause security incidents.

Cyberattacks, malicious internet-based activity, online and offline fraud, and other similar activities threaten the confidentiality, integrity, and availability of our sensitive data and information technology systems, and those of the third parties upon which we rely.

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.

In the ordinary course of our business, we and the third parties with whom we work process sensitive data, and, as a result, we and the third parties with whom we work face a variety of evolving threats that could cause security incidents.

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 which we rely, 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.

Further, the loss of clinical trial data from completed or ongoing clinical trials could result in delays in, or cancellations of any regulatory approval or clearance efforts and significantly increase our costs to recover or reproduce the data, and subsequently commercialize the product.

During times of war and other major conflicts, we and the third parties 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 are not currently pursuing further clinical development of our only product candidate, mavodelpar.

If we resume such development or pursue development of other product candidates, any loss of clinical trial data from completed or ongoing clinical trials could result in delays in, or cancellations of any regulatory approval or clearance efforts and significantly increase our costs to recover or reproduce the data, and subsequently commercialize any of our products.

Additionally, theft of our intellectual property or proprietary business information could require substantial expenditures to remedy.

We and the third-parties upon which we rely 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 attacks, 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, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, and other similar threats.

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 attacks, 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, telecommunications failures, earthquakes, fires, floods, attacks enhanced or facilitated by AI, 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.

Remote work has become more common and has increased risks to our

information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.

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.

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

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.

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We also rely on third-party service providers to provide other products, services, parts, or otherwise to operate our business.

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 our third-party service providers experience a security incident or other interruption, we could experience adverse consequences.

While we may be entitled to damages if our third-party service providers 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 our third-party partners’

supply chains have not been compromised.

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 upon whom we rely.

A security incident or other interruption could disrupt our ability (and that of third parties upon whom we rely) to provide our products.

We may expend significant resources or modify our business activities (including our clinical trial activities) to try to protect against security incidents.

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 the third parties with whom we work 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 our third-party partners’ supply chains have not been compromised.

A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our products.

We may expend significant resources or modify our business activities (including any future 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.

While we have implemented security measures designed to protect against security incidents, there can be no assurance that these measures will be effective.

We take steps to detect and remediate vulnerabilities, but we may not be able to detect and remediate all vulnerabilities because the threats and techniques used to exploit the vulnerability change frequently and are often sophisticated in nature.

Therefore, such vulnerabilities could be exploited but may not be detected until after a security incident has occurred.

Unremediated high risk or critical vulnerabilities pose material risks to our business.

Further, we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.

Applicable data privacy and security obligations may require us to notify relevant stakeholders of security incidents.

Such disclosures are costly, and the disclosures or the failure to comply with such requirements could lead to adverse consequences.

If we (or a third party upon whom we rely) experience a security incident or are perceived to have experienced a security incident, we may experience adverse consequences such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);

We take steps to detect, mitigate, and remediate vulnerabilities in our systems (such as our hardware and/or software, including that of third parties with whom we work).

We may not, however, detect and remediate all such vulnerabilities including on a timely basis.

Further, we, and the third parties with whom we work, 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.

Applicable data privacy and security obligations may require us to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents, or to implement other requirements, such as providing credit monitoring.

Such disclosures and compliance with such requirements are costly, and the disclosures or the failure to comply with such 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 adverse consequences such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);

additional reporting requirements and/or oversight;

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monetary fund diversions;

diversion of management attention;

interruptions in our operations (including availability of data);

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and other similar harms.

Security incidents and attendant consequences may prevent or cause customers to stop using our products or services, deter new

customers from using our products or services, the development and commercialization of mavodelpar could be delayed, and negatively impact our ability to grow and operate our business.

Security incidents and attendant consequences may prevent or cause customers to stop using our products or services, deter new customers from using our products or services, the development and commercialization of any product candidates could be delayed, and negatively impact our ability to grow and operate our business.

Likewise, we rely on third parties to conduct clinical trials, and similar incidents relating to their information technology systems or data could also have a material adverse effect on our business.

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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 of the Company could be leaked, disclosed, or revealed as a result of or in connection with our employee’s, personnel’s, or vendor’s use of generative AI technologies.

Additionally, sensitive data of the Company could be leaked, disclosed, or revealed as a result of or in connection with our employees’, personnel’s, or vendors’ use of generative AI technologies.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

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If one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price may decline.

If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which might cause our stock price and trading volume to decline.

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

What changed 10-Q

Item 1A. Risk Factors