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Item 1A. Risk Factors

2026-03-25 compared with 2025-03-19 · 244 added, 182 removed, 672 unchanged (39% of the section changed)

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Risks Related to Our Financial Position and Capital Needs

We have identified conditions that raise substantial doubt about our ability to continue as a going concern and we may need substantial additional capital in the future in order to fund our business.

Our consolidated financial statements as of and for the year ended December 31, 2024 have been prepared on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.

We have incurred significant losses since our inception and we expect that we will continue to incur losses in the near term as we aim to successfully execute our business plan, which includes the commercialization of PRGN-2012.

Based on our balance of cash, cash equivalents and short-term investments of $97.9 million at December 31, 2024 and forecasted negative cash flows from operating activities and purchases of property, plant and equipment, there is substantial doubt about our ability to continue as a going concern within one year after the date that these financial statements are issued.

The forecasted negative cash flows used in our going concern analysis do not include the potential revenue from PRGN-2012 for the treatment of adults with RRP, which is considered outside of our direct control, as the BLA (which was accepted by the FDA in February 2025 under a priority review with a PDUFA target action date set for August 27, 2025) has not yet been approved.

Our ability to fund our operations is dependent upon the FDA's approval of our BLA and the successful commercialization of PRGN-2012 with revenues sufficient to support our cost structure.

In addition, we may decide, or be required to raise additional capital.

This additional capital could be raised through a combination of non-dilutive financings (including debt financings, collaborations, strategic alliances, monetization of assets, marketing, distribution or licensing arrangements), and/or dilutive financings (including equity and/or debt financings with an equity component).

There can be no assurance that new financings or other transactions will be available to us on commercially acceptable terms, or at all, and such financings may adversely affect the holdings or rights of our stockholders and may cause significant dilution to existing stockholders.

Further, the doubt regarding our potential ability to continue as a going concern may adversely affect our ability to obtain new financing on reasonable terms or at all.

Also, any collaborations, strategic alliances, monetization of non-core assets or marketing, distribution or licensing arrangement may require us to give up some or all of our rights to a product or technology, which in some cases may be at less than the full potential value of such rights.

If we are unable to successfully commercialize

PRGN-2012 or obtain additional capital, we will assess our capital resources and may be required to delay, reduce the scope of, or eliminate some or all of our operations, which may include research and development, clinical trials and preparing for commercial readiness, or seeking bankruptcy protection.

This may have a material adverse effect on our business, financial condition, results of operations and ability to operate as a going concern.

The accompanying audited financial statements do not include any adjustments that might be necessary if we are not able to continue as a going concern.

Additionally, if we are unable to continue as a going concern, our stockholders may lose some or all of their investment in us.

See also “Notes to Condensed Consolidated Financial Statements - Note 1 appearing elsewhere in this Annual Report for additional discussion of our liquidity and ability to continue as a going concern.

We have a limited number of shares of common stock available for future issuance which could adversely affect our ability to raise capital or consummate strategic transactions.

We are currently authorized to issue 400,000,000 shares of common stock under our amended and restated certificate of incorporation.

As of February 15, 2025, we have issued 294,042,973 shares of common stock, approximately 28,463,388 shares of common stock were committed for issuance giving effect to the assumed exercise of all outstanding options and vesting of restricted stock units and performance stock units and approximately 70,222,215 shares of common stock initially underlying the Series A Preferred Stock and 52,666,669 shares of common stock initially underlying the Warrants.

The exercisability of the Series A Preferred Stock and the Warrants is contingent upon us obtaining stockholder approval to increase the number of authorized shares of common stock.

Due to the limited number of authorized shares common stock available for future issuance, we may not be able to raise additional equity capital, complete a merger or other business combination, unless we increase the number of shares we are authorized to issue.

We would need to seek stockholder approval to increase the number of our authorized shares of common stock, and we can provide no assurance that we would succeed in amending our amended and restated certificate of incorporation to increase the number of shares of common stock we are authorized to issue which could negatively impact our business, prospects and results of operations.

Our strategic prioritization and streamlining of resources undertaken to extend our cash runway and focus more of our capital resources on PRGN-2012 might not achieve our intended outcome.

On August 6, 2024, we publicly announced a strategic prioritization of our clinical portfolio and streamlining of resources, including a reduction of over 20% of our work force, to focus on potential commercialization of PRGN-2012 for the treatment of RRP.

In connection with the implementation of our strategic prioritization and streamlining of resources, we recorded non-cash impairment charges to goodwill and other assets of approximately $32.9 million, net of tax, in the second quarter of 2024 and we also recorded a charge related to employee severance and termination benefits of $2.1 million, which were paid in the third quarter of 2024.

We may continue to incur additional expenses not currently contemplated due to events associated with strategic prioritization and streamlining of resources;

for example, the reduction in force may have a future impact on other areas of our liabilities and obligations, which could result in losses in future periods.

The reduction in force may result in unintended consequences and costs, such as the loss of institutional knowledge and expertise, attrition beyond the intended number of employees, and decreased morale among our remaining employees.

In addition, while positions have been eliminated, certain functions necessary to our operations remain, and we might not successfully distribute the duties and obligations of our terminated employees among our remaining employees.

The reduction in workforce could also make it difficult for us to pursue, or prevent us from pursuing, new opportunities and initiatives due to insufficient personnel, or require us to incur additional and unanticipated costs to hire new personnel to pursue such opportunities or initiatives.

Moreover, we may not realize, in full or in part, the anticipated benefits and savings from this strategic prioritization and streamlining of resources due to unforeseen difficulties, delays or unexpected costs.

If we are unable to realize the anticipated benefits from the strategic prioritization and streamlining of resources, or if we experience significant adverse consequences from such actions, our business, financial condition and results of operations may be materially adversely affected.

In addition, we may need to undertake additional workforce reductions or restructuring activities in the future.

We are substantially dependent on the commercial success of Papzimeos

To date, we have invested substantial efforts and financial resources in the research, development and commercialization of Papzimeos and our product candidates.

Our near-term prospects, including our ability to develop our product candidates and generate revenue, and our future growth are substantially dependent on the commercial success of Papzimeos.

Although we received approval from the U.S.

Food and Drug Administration, or FDA, we are pursing regulatory approval from the European Commission, and are preparing to file for approval from other foreign regulatory bodies, for Papzimeos for the treatment of RRP in adults, we can provide no assurances that we will obtain regulatory approval in any jurisdiction other than the U.S., which could have an adverse impact on our results of operations.

In addition, the successful commercialization of Papzimeos will depend on a number of factors and involves risk, including some of the risks identified in these “Risk Factors.” One or

more of these risks, many of which are beyond our control, could cause significant delays or an inability to successfully commercialize Papzimeos.

We have a history of net losses, and we may not achieve or maintain profitability.

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We expect to incur losses and negative cash flows from operating activities for the foreseeable future.

We anticipate that our expenses will increase substantially as we continue to advance the preclinical and clinical development of our existing product candidates and our research programs as well as prepare commercial capabilities for our lead product candidate, and there is a significant risk that our product candidates will fail to demonstrate adequate efficacy or an acceptable safety profile, obtain regulatory approval, or become commercially viable.

A significant period of time could pass before commercialization of our various product candidates or before the execution of contractual relationships providing for up-front

payments, milestones or royalties sufficient to achieve profitability.

On August 14, 2025, we received FDA approval for Papzimeos for adults with RRP.

We anticipate that our expenses will increase substantially as we commercialize Papzimeos, continue to advance the preclinical and clinical development of our existing product candidates and continue our research activities, and there is a significant risk that our product candidates will fail to demonstrate adequate efficacy or an acceptable safety profile, obtain regulatory approval, or become commercially viable.

As we commercialize Papzimeos and if we obtain regulatory approval of Papzimeos in other jurisdictions or indications or for our other product candidates, we expect we will incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution.

We have and are devoting substantial resources to the commercial infrastructure for Papzimeos and have not yet achieved significant product revenue.

A significant period of time could pass before Papzimeos generates significant product revenue, or commercialization of our various product candidates or before the execution of contractual relationships providing for up-front payments, milestones or royalties sufficient to achieve profitability.

As a result, our expenses may exceed revenues for the foreseeable future, and we may not achieve profitability.

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

We expect to continue to spend substantial amounts to continue the preclinical and clinical development of our current and future programs and commercialization.

We expect to continue to spend substantial amounts to commercialize Papzimeos, continue the preclinical and clinical development of our current and future programs and commercialize other product candidates.

We expect our future capital requirements will be substantial and will depend on many factors, including:

• the timing, receipt, and amount of sales of Papzimeos;

• progress in our research and development programs, as well as the magnitude of these programs;

• capital expenditures related to building out our manufacturing capabilities and preparing for commercial readiness;

• capital expenditures related to building out our manufacturing capabilities, further commercialization of Papzimeos and preparing for commercial readiness for product candidates;

• the timing of potential regulatory approval of products;

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• the costs associated with legal activities, including litigation, arising in the course of our business activities and our ability to prevail in any such legal disputes.

We raised approximately $30.9 million in net proceeds in an offering of equity securities in August 2024 and approximately $78.5 million in net proceeds in an offering of equity securities in December 2024 and we entered into a Loan Agreement (as defined below) that provides for a 5-year senior secured term loan facility of up to $125.0 million in September 2025.

If future financings involve the issuance of equity securities, our existing shareholders would suffer further dilution.

If we raise debt financing, we may be subject to restrictive covenants that limit our ability to conduct our business.

If we raise further debt financing, we may be subject to additional restrictive covenants that limit our ability to conduct our business.

We may not be able to raise sufficient additional funds on terms that are favorable to us, if at all.

If we fail to raise sufficient funds and continue to incur losses, our ability to fund our operations, take advantage of strategic opportunities, develop product candidates or technologies, commercialize or otherwise respond to competitive pressures could be significantly limited.

If this happens, we may be forced to delay or terminate research or development programs or the commercialization of product candidates resulting from our technologies, curtail or cease operations or obtain funds through strategic transactions or other collaborative and licensing arrangements that may require us to relinquish commercial rights, or grant licenses on terms that are not favorable to us.

If this happens, we may be forced to delay or terminate research or development programs or the commercialization of our product and product candidates resulting from our technologies, curtail or cease operations or obtain funds through strategic transactions or other collaborative and licensing arrangements that may require us to relinquish commercial rights, or grant licenses on terms that are not favorable to us.

In addition, raising funds in the current macroeconomic and geopolitical environment may present additional challenges.

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If adequate funds are not available, we will not be able to successfully execute our business plan or continue our business.

Our level of indebtedness and debt service obligations could adversely affect our financial condition and may make it more difficult for us to fund our operations.

On September 3, 2025, we and certain of our subsidiaries party thereto as guarantors entered into a Loan Agreement (the “Loan Agreement”) with BioPharma Credit Investments V (Master) LP and BPCR Limited Partnership as the lenders thereunder (the “Lenders”) and BioPharma Credit PLC as the collateral agent, each of which are investment entities managed by Pharmakon Advisors, LP.

The Loan Agreement provides for a 5-year senior secured term loan facility of up to $125.0 million, composed of two committed tranches:

(i) an initial tranche in an aggregate principal amount of $100.0 million, which was funded on September 3, 2025;

and (ii) a delayed draw tranche in an aggregate principal amount of $25.0 million, which is available, subject to certain conditions, until June 29, 2027 (such tranches, collectively, the “Term Loans”).

The Term Loans mature on September 3, 2030 (the “Maturity Date”).

The Term Loans bear interest at Term SOFR (three-month tenor), subject to a 3.75% floor, plus 6.50%, payable quarterly.

The Term Loans amortize in eight equal quarterly installments beginning on September 29, 2028 through the Maturity Date.

The Term Loans may be voluntarily prepaid in whole (but not in part), and are subject to make-whole, prepayment premium and exit fees, and must be prepaid upon a Change in Control (as defined in the Loan Agreement).

Our indebtedness could also have important negative consequences for our security holders and our business, results of operations and financial condition, including:

• we will need to repay the indebtedness by making payments of interest and principal, which will reduce the amount of cash available to finance our operations, our research and development efforts and other general corporate activities;

• our failure to comply with the obligations of our affirmative and restrictive covenants in the Loan Agreement could result in an event of default that, if not cured or waived, would permit the Lenders to accelerate our obligation to repay this indebtedness, and the Lenders could seek to enforce their security interest in the assets securing such indebtedness;

• we may be more vulnerable to downturns in our business, our industry or the economy in general.

In addition, we may borrow additional capital in the future to fund clinical development and our future growth, including pursuant to the Loan Agreement or potentially pursuant to new arrangements with different lenders.

To the extent additional debt is added to our current debt levels, the risks described above could increase.

Failure of the U.S.

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federal government to shut down for periods of time.

Generally, if effective legislation to fund government operations and manage the level of federal debt is not

enacted, the federal government may suspend its investments for certain government accounts, among other available options, in order to prioritize payments on its obligations.

Generally, if effective legislation to fund government operations and manage the level of federal debt is not enacted, the federal government may suspend its investments for certain government accounts, among other available options, in order to prioritize payments on its obligations.

A failure by the U.S.

Congress to pass spending bills or address the debt ceiling at any point in the future would increase the risk of default by the U.S.

Congress to pass spending bills or address the debt

ceiling at any point in the future would increase the risk of default by the U.S.

on its obligations, the risk of a lowering of the U.S.

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and globally.

Twice in the past decade, by the appropriations legislation deadline Congress failed to pass a new appropriations bill or continuing resolution to temporarily extend funding, resulting in U.S.

government shutdowns that caused federal agencies to halt non-essential operations and may have negative consequences for us:

For example, over the last several years, the U.S.

government has shut down several times, including for 43 days beginning in October 2025, and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical employees and stop critical activities.

If a prolonged government shutdown or other disruption occurs again in the future, it may have negative consequences for us, including:

• devaluation in any U.S.

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Risks Related to the Discovery and Development of Our Product Candidates

Our business is dependent on our ability to advance our current and future product candidates through clinical trials, obtain marketing approval, and ultimately commercialize them.

We are early in our development efforts.

We initiated our first clinical trial for our lead programs in October 2018 and currently have a pipeline of clinical and preclinical programs.

Our ability to generate product revenues, which we do not expect will occur until a product candidate is approved by FDA, if ever, will depend heavily on the successful development and eventual commercialization of some or all of these product candidates, and any future product candidates we develop, which may never occur.

We are heavily dependent on the successful commercialization of Papzimeos in the U.S.

and other jurisdictions, where we may obtain regulatory approval, and our ability to advance our current and future product candidates through clinical trials, obtain marketing approval, and ultimately commercialize them.

We currently have one product approved for commercial sale, Papzimeos, which was approved by the FDA on August 14, 2025, for adults with RRP and are otherwise early in our development efforts.

We initiated our first clinical trial for our lead programs in October 2018 and, other than Papzimeos, currently have a pipeline of clinical and preclinical programs.

Our ability to generate product revenues, will depend heavily on the successful commercialization of Papzimeos in the United States and in other jurisdictions, if approved.

as well as the successful development and eventual commercialization of some or all of our existing product candidates, and any future product candidates we develop, which may never occur.

Our current and future product candidates will require additional preclinical or clinical development, management of clinical, preclinical and manufacturing activities, marketing approval in the United States and other jurisdictions, coverage from pricing and reimbursement authorities, sufficient cGMP manufacturing supply for both preclinical and clinical development and commercial production, building of a commercial organization and substantial investment, and significant marketing efforts before we generate any revenues from product sales.

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• receipt and maintenance of timely marketing approvals from applicable regulatory authorities;

• the build up of a commercialization organization and successful launch of commercial sales of our product candidates, if approved;

• the ongoing build up of our commercialization organization and successful launch of commercial sales of our product

candidates, if approved;

• the prevalence, duration and severity of potential side effects or other safety issues experienced with our product candidates, if approved;

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• acceptance of the benefits and uses of our product candidates, if approved, by patients, the medical community, and third-party payers;

• maintenance of a continued acceptable safety, tolerability and efficacy profile of the product candidates following approval;

• maintenance of a continued acceptable safety, tolerability and efficacy profile of product candidates following approval;

• our compliance with any post-approval requirements imposed on our products, such as postmarketing studies, a REMS, or additional requirements that might limit the promotion, advertising, distribution or sales of our products or make the products cost prohibitive;

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If we are not able to generate sufficient revenue through the sale of any current or future product candidate, we may not be able to continue our business operations or achieve profitability.

The market opportunities for our product candidates may be smaller than we estimate.

Our projections of both the number of people who have the diseases we are targeting, as well as the subset of people with these diseases who are in a position to receive our product candidates, and who have the potential to benefit from treatment with our product candidates, are based on our own estimates.

The market opportunities for our product and product candidates may be smaller than we estimate.

Our projections of both the number of people who have the diseases we are targeting, as well as the subset of people with these diseases who are in a position to receive our product and product candidates, and who have the potential to benefit from treatment with our product and product candidates, are based on our own estimates.

These estimates may be inaccurate or based on imprecise data.

We do not have verifiable internal marketing data regarding the potential size of the commercial market for any of our product candidates, nor have we obtained current independent marketing surveys to verify the potential size of the commercial markets for our current product candidates or any future product candidates.

Since our current product candidates and any future product candidates will represent novel approaches to treating various conditions, it may be difficult, in any event, to accurately estimate the potential revenues from these product candidates.

For example, our estimates of the number of people who have recurrent respiratory papillomatosis, or RRP, the target indication for PRGN-2012, is based on our own internal estimates including, commissioned research which reviewed a variety of sources, including scientific literature, surveys of treating physicians, analogous products based on disease severity, prevalent population and efficacy of therapy and other forms of market research.

We do not have verifiable internal marketing data regarding the potential size of the commercial market for any of our product and product candidates, nor have we obtained current independent marketing surveys to verify the potential size of the commercial markets for our current product and product candidates or any future product candidates.

Since our current product and product candidates and any future product candidates represent novel approaches to treating various conditions, it may be difficult, in any event, to accurately estimate the potential revenues from product and product candidates.

For example, our estimates of the number of people who have recurrent respiratory papillomatosis, or RRP, the indication for Papzimeos, is based on our own internal estimates including, commissioned research which reviewed a variety of sources, including scientific literature, surveys of treating physicians, analogous products based on disease severity, prevalent population and efficacy of therapy and other forms of market research.

These estimates may be inaccurate or based on imprecise data.

As RRP is a rare disease and there are currently no approved therapeutics for RRP, limited research is available regarding its prevalence and severity and the market opportunity for a therapeutic.

In addition, the addressable market opportunity for PRGN-2012 will depend on, among other things, the final labeling for PRGN-2012 as agreed with the U.S.

As RRP is a rare disease and there are currently no approved therapeutics for RRP other than Papzimeos, limited research is available regarding its prevalence and severity and the market opportunity for a therapeutic.

In addition, the addressable market opportunity for Papzimeos will depend on, among other things, the labeling for Papzimeos as agreed with the U.S.

Food and Drug Administration or comparable regulatory authorities in other jurisdictions, acceptance by the medical community and patient access and drug pricing and reimbursement.

In addition, the prevalence of RRP could be reduced as a result of the increased use of vaccines like Gardasil.

The number of patients in the addressable markets may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our product candidate or new patients may become increasingly difficult to identify or gain access to, all of which could materially adversely affect our business, financial condition, results of operations and prospects.

The number of patients in the addressable markets may turn out to be lower than expected, patients may not be otherwise amenable to treatment with our product or product candidate or new patients may become increasingly difficult to identify or gain access to, all of which could materially adversely affect our business, financial condition, results of operations and prospects.

The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time-consuming, and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be materially harmed.

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There can be no assurance that we will not experience problems or delays in developing new product candidates and that such problems or delays will not cause unanticipated costs, or that any such development problems can be solved.

We also may experience unanticipated problems or delays in expanding our manufacturing capacity, which may delay or prevent the completion of clinical trials and the commercialization of product candidates on a timely or profitable basis, if at all.

We also may experience unanticipated problems or delays in expanding our manufacturing capacity, which may delay or prevent the completion of clinical trials and the commercialization of our product and product candidates on a timely or profitable basis, if at all.

For example, we, a collaborator, or another group may uncover a previously unknown risk with any of our product candidates, which may prolong the period of observation required for obtaining regulatory approval, may necessitate additional clinical testing, or may otherwise result in a change in the requirements for approval of any of our product candidates.

For example, although Papzimeos has been approved by the FDA for the treatment of adults with RRP, we may be unable to obtain approval for Papzimeos in any jurisdiction outside the United States, including in the European Union.

In addition, the clinical trial requirements of the FDA, European Medicines Agency, or EMA, and other regulatory authorities and the criteria these regulators use when evaluating product candidates vary substantially according to the type, complexity, novelty, and intended use and market of such product candidates.

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Clinical trials with gene therapies have encountered a multitude of significant technical problems in the past, including unintended integration with host DNA leading to serious adverse events, poor levels of protein expression, transient protein expression, viral overload, immune reactions to either viral capsids utilized to deliver DNA, DNA itself, proteins expressed or cells transfected with DNA.

There can be no assurance that our development efforts will be timely or successful, that we or our collaborators will receive the regulatory approvals necessary to initiate clinical trials, where applicable, or that we will ever be able to successfully commercialize a product candidate enabled by our technologies.

There can be no assurance that our development efforts will be timely or successful, that we or our collaborators will receive the regulatory approvals necessary to initiate clinical trials, where applicable, or that we will be able to successfully commercialize a product candidate other than Papzimeos enabled by our technologies.

To the extent that we utilize viral constructs or other systems to deliver gene therapies and the same or similar delivery systems demonstrate unanticipated and/or unacceptable side effects in preclinical or clinical trials conducted by ourselves or others, we may be forced to, or elect to, discontinue development of such product candidates.

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The timing of clinical trials depends on the ability to recruit patients to participate as well as completion of required follow-up periods.

If patients are unwilling to participate in our clinical studies for any number of reasons, such as because of negative publicity from

adverse events related to the biotechnology or gene therapy fields, the timeline for recruiting patients, conducting clinical trials and obtaining regulatory approval may be delayed.

If patients are unwilling to participate in our clinical studies for any number of reasons, such as because of negative publicity from adverse events related to the biotechnology or gene therapy fields, the timeline for recruiting patients, conducting clinical trials and obtaining regulatory approval may be delayed.

Additionally, any shelter-in-place orders from local, state, or federal governments or clinical trial site policies resulting from pandemics may impact our ability to enroll patients in clinical trials.

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

Cell and gene therapies are novel, complex, and difficult to manufacture.

The manufacturing processes that we use to produce our product candidates for human therapeutics are complex, novel and have not been validated for commercial use.

Papzimeos and our product candidates are novel, complex, and difficult to manufacture.

The manufacturing processes that we use to produce our product and product candidates for human therapeutics are complex and novel.

Several factors could cause production interruptions, including equipment malfunctions, facility contamination, raw material shortages or contamination, natural disasters, disruption in utility services, human error, or disruptions in the operations of our suppliers.

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As a result, assays of the finished product may not be sufficient to ensure that the product will perform in the intended manner.

Accordingly, it is necessary to employ multiple steps to control our manufacturing process to assure that the product candidate is made strictly and consistently in compliance with the process.

Accordingly, it is necessary to employ multiple steps to control our manufacturing process to assure that the product or product candidate is made strictly and consistently in compliance with the process.

Problems with the manufacturing process, even minor deviations from the normal process, could result in product defects or manufacturing failures that result in lot failures, product recalls, product liability claims, or insufficient inventory.

We have developed our proprietary electroporation device, UltraPorator, to permit the rapid and cost-effective manufacturing of our UltraCAR-T therapies, but we may face challenges in the production and implementation of this device, which may, in turn, adversely impact the therapeutic candidates.

We have developed our proprietary electroporation device, UltraPorator, to permit the rapid and cost-effective manufacturing of our

UltraCAR-T therapies, but we may face challenges in the production and implementation of this device, which may, in turn, adversely impact the therapeutic candidates.

We may encounter problems achieving adequate quantities and quality of clinical-grade materials that meet FDA, EMA, or other applicable standards or specifications with consistent and acceptable production yields and costs.

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Differences between preliminary or interim data and final data could significantly harm our business prospects and may cause the trading price of our common stock to fluctuate significantly.

Our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, delay or prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences.

Our product and our product candidates may cause undesirable side effects or have other properties that could halt their clinical development, delay or prevent their regulatory approval, limit their commercial potential, or result in significant negative consequences.

There have been several significant adverse side effects in gene therapy treatments in the past, including reported cases of leukemia and death seen in other trials.

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If a similar effect occurs with our product candidates, we may decide or be required to halt or delay further clinical development of our product candidates.

Additionally, if any of our product candidates receive marketing approval, the FDA could require us to adopt a REMS to ensure that the benefits outweigh its risks, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to healthcare practitioners, and provider certification.

Such requirements could prevent us from achieving or maintaining market acceptance of our product candidates and could significantly harm our business, prospects, financial condition, and results of operations.

Additionally, for Papzimeos or if any of our other product candidates receive marketing approval, the FDA could require us to adopt a REMS to ensure that the benefits outweigh its risks, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to healthcare practitioners, and provider certification.

Such requirements could prevent us from achieving or maintaining market acceptance of our product or product candidates and could significantly harm our business, prospects, financial condition, and results of operations.

Even if we complete the necessary clinical trials, we cannot be certain when, or if, we will obtain regulatory approval to commercialize a product candidate, and the approval may be for a narrower indication than we seek.

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Any of the foregoing scenarios could materially harm the commercial prospects for our product candidates and materially and adversely affect our business, financial condition, results of operations, and prospects.

We have chosen to prioritize development of certain of our product candidates.

We have chosen to prioritize commercialization of Papzimeos and the selective development of certain of our product candidates.

We may expend our limited resources on product candidates or indications that do not yield a successful product and fail to capitalize on other opportunities for which there may be a greater likelihood of success or may be more profitable.

Because we have limited resources, we are required to strategically prioritize our application of resources to particular development efforts, as we have done in our strategic reprioritization that we announced on August 2024, to focus on the potential commercialization of PRGN-2012 for the treatment of RRP.

As part of the strategic prioritization, we decided to minimize UltraCAR-T spend, and have paused enrollment in PRGN-3005 and PRGN-3007 UltraCAR-T clinical trials.

We have also reduced our focus on preclinical programs, while continuing select projects we believe could provide future near-term

validation of our technology platforms.

We have also shutdown our ActoBio subsidiary operations.

There is no assurance that PRGN-2012 will successfully be commercialized and be profitable and by deprioritizing the other programs and product candidates, we may be failing to capitalize on opportunities for which there may be a greater likelihood of success or be more profitable, and our revenues, financial condition, and results of operations may be adversely affected.

Risks Related to the Commercialization of Product Candidates and Other Legal Compliance Matters

Even if a current or future product candidate receives marketing approval, it may fail to achieve the degree of market acceptance by physicians, patients, third-party payers, and others in the medical community necessary for commercial success.

Ethical, social, and legal concerns about gene and cell therapies could result in additional regulations restricting or prohibiting our product candidates.

Even with the requisite approvals from the FDA in the United States, the EMA in the European Union, and other regulatory authorities internationally, the commercial success of our product candidates will depend, in part, on their acceptance by physicians, patients, and healthcare payers as medically necessary, cost-effective, and safe.

Public perception may be influenced by claims that gene and cell therapies are unsafe, and any product candidate that we commercialize may not gain acceptance by physicians, patients, healthcare payers, and others in the medical community.

In particular, our success will depend upon appropriate physicians prescribing treatments that involve the use of our product candidates in lieu of, or in addition to, existing treatments they are already familiar with and for which greater clinical data may be available.

Because we have limited resources, we are required to strategically prioritize our application of resources to particular development efforts, including the commercialization of Papzimeos for the treatment of RRP.

As part of the strategic prioritization, we decided to minimize spending on our UltraCAR-T programs, and have paused enrollment in PRGN-3005 and PRGN-3007 UltraCAR-T clinical trials.

We have also reduced our focus on preclinical programs, while continuing select projects we believe could provide future near-term validation of our technology platforms.

We have also shut down our ActoBio subsidiary operations.

Though we have started to commercialize Papzimeos, there is no assurance that Papzimeos will be profitable and by deprioritizing the other programs and product candidates, we may be failing to capitalize on opportunities for which there may be a greater likelihood of success or be more profitable, and our revenues, financial condition, and results of operations may be adversely affected.

We may seek designation for our AdenoVerse platform technology as a designated platform technology, but we might not receive such designation, and even if we do, such designation may not lead to a faster regulatory review or approval process.

We may seek designation for our AdenoVerse platform technology as a designated platform technology.

Under FDORA, a platform technology incorporated within or utilized by a drug or biological product is eligible for designation as a designated platform technology if:

(1) the platform technology is incorporated in, or utilized by, a drug approved under an NDA or BLA;

(2) preliminary evidence submitted by the sponsor of the approved or licensed drug, or a sponsor that has been granted a right of reference to data submitted in the application for such drug, demonstrates that the platform technology has the potential to be incorporated in, or utilized by, more than one drug without an adverse effect on quality, manufacturing, or safety;

and (3) data or information submitted by the applicable person indicates that incorporation or utilization of the platform technology has a reasonable likelihood to bring significant efficiencies to the drug development or manufacturing process and to the review process.

A sponsor may request the FDA to designate a platform technology as a designated platform technology concurrently with, or at any time after, submission of an IND application for a drug that incorporates or utilizes the platform technology that is the subject of the request.

If so designated, the FDA may expedite the development and review of any subsequent original NDA or BLA for a drug that uses or incorporates the platform technology.

Even if we believe our AdenoVerse platform technology meets the criteria for such designation, the FDA may disagree and instead determine not to grant such designation.

In addition, the receipt of such designation for a platform technology does not ensure that a drug will be developed more quickly or receive a faster FDA review or approval process.

Moreover, the FDA may revoke a designation if the FDA determines that a designated platform technology no longer meets the criteria for such designation.

For example, in July 2025, the FDA revoked Sarepta Therapeutics’ platform technology designation for AAVrh74 given new safety information that suggested the preliminary evidence on which the designation was based was insufficient to demonstrate that its platform technology had the potential to be incorporated in, or utilized by, more than one drug without an adverse effect on safety.

Risks Related to the Commercialization of our Product and Product Candidates and Other Legal Compliance Matters

Our product and product candidates may fail to achieve the degree of market acceptance by physicians, patients, third-party payers, and others in the medical community necessary for commercial success.

Ethical, social, and legal concerns about gene and cell therapies could result in additional regulations restricting or prohibiting our product and product candidates.

Even with the requisite approvals from the FDA in the United States, the EMA in the European Union, and other regulatory authorities internationally, the commercial success of Papzimeos and of our product candidates will depend, in part, on their acceptance by physicians, patients, and healthcare payers as medically necessary, cost-effective, and safe.

Public perception may be influenced by claims that gene and cell therapies are unsafe, and Papzimeos and any product candidate that we commercialize may not gain acceptance by physicians, patients, healthcare payers, and others in the medical community.

In particular, our success will depend upon appropriate physicians prescribing treatments that involve the use of our product and product candidates in lieu of, or in addition to, existing treatments they are already familiar with and for which greater clinical data may be available.

If these products do not achieve an adequate level of acceptance, we may not generate significant product revenue to make the products profitable.

Failure by us to maintain a manufacturing supply chain to appropriately and adequately supply Papzimeos for commercial and future clinical uses would adversely affect our ability to commercialize Papzimeos and our business and business prospects could be severely harmed.

The manufacture of Papzimeos must comply with applicable regulatory standards for commercial uses and current and potential future clinical trials.

The process of manufacturing Papzimeos is complex and subject to several risks, including:

• the ability to consistently manufacture and attain sufficient production yields with acceptable quality control and quality assurance to meet market demand for our commercialization of Papzimeos, as well as the needs for continuing clinical trials;

• our ability to maintain existing commercial supply agreements and to establish additional or alternative supply agreements if necessary, including our ability to successfully transfer manufacturing technology and attain regulatory approval at any such additional or alternative suppliers;

• supply chain issues, including the timely availability of product and management of shelf-life, including raw materials, active pharmaceutical ingredient, or API, and drug product and other supplies, and the cost of procuring the foregoing, any of which may be impacted by a number of factors, including the effects of macroeconomic or other global conditions, such as increased tariffs, renegotiation of existing international trade agreements, escalating trade tensions and other trade restrictions;

• shortage of qualified personnel internally or at any of our third party suppliers;

• our ability to safeguard our manufacturing facilities from harm by physical or cyber threats;

• ongoing compliance with regulatory requirements, which vary in each country.

As a result of these and other risks, we may be unable to maintain a manufacturing infrastructure and supply chain capable of providing Papzimeos for commercial use, which could delay or adversely affect our product commercialization efforts;

result in lost sales;

delay or result in a cessation of our current or potential future clinical trials;

delay or preclude potential future regulatory approvals of Papzimeos in other jurisdictions or indications;

and could cause financial and reputational harm.

We rely on third parties for certain aspects of the manufacture of our product, and we expect to continue to do so for the foreseeable future.

This reliance on third parties increases the risk that we will not have sufficient quantities of our product or that such quantities may not be available at an acceptable cost, which could delay, prevent or impair our development or potential future commercialization efforts.

While we currently use our internal cGMP manufacturing capabilities in Germantown, Maryland for the commercial manufacturing of Papzimeos bulk drug substance, we rely, and expect to continue to rely, on third parties for certain aspects of commercial manufacture, packaging and distribution.

This reliance on third parties increases the risk that we will not have sufficient quantities of our product on a timely basis or at all, or that such quantities will be available at an acceptable cost or quality, which could delay, prevent or impair our development ongoing commercialization efforts.

We rely on third-party manufacturers, which entails additional risks, including:

• failure of third-party manufacturers to comply with regulatory requirements and maintain quality assurance;

• failure of third-party manufacturers to perform the manufacturing process adequately;

• breach of supply agreements by the third-party manufacturers;

• failure to supply components, intermediates, services, or product according to our specifications;

• failure to supply components, intermediates, services, or product according to our schedule or at all;

• misappropriation or disclosure of our proprietary information, including our trade secrets and know-how;

• termination or non-renewal of agreements by third-party manufacturers at times that are costly or inconvenient for us.

For example, our third party vendors have, from time to time, experienced a number of deviations with respect to the production of our product.

Although such incidents have not.

to date, had a material impact on our commercialization efforts, developments of this type, or other failures by our third party vendors, could adversely impact our business.

Third-party manufacturers may not be able to comply with current good manufacturing processes, or cGMP, regulations or similar regulatory requirements inside or outside the United States.

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

If our manufacturers are unable to comply with cGMP regulation or similar regulatory requirements outside the United States or if the FDA or other regulatory authorities do not approve their facility upon a pre-approval inspection, our therapeutic candidates may not be approved or may be delayed in obtaining approval.

In addition, there are a limited number of manufacturers that operate under cGMP regulations and similar regulatory requirements outside the United States that might be capable of manufacturing our product, and our product candidates if and when approved.

Therefore, our product and any future products that we may develop may compete with other products for access to manufacturing facilities.

Any failure to gain access to these limited manufacturing facilities could severely impact the commercialization of our product or the clinical development, marketing approval and potential future commercialization of our product candidates.

Furthermore, if we breach or are perceived to breach our contractual obligations or otherwise default under our agreements with third parties, or if we otherwise have contractual disputes with such third parties, it may lead to adverse outcomes, including potential delays, unforeseen expenses, or the termination of those contracts.

We do not currently have a second source for certain required materials used for the manufacture of finished product and we are dependent upon certain third parties for certain steps in our manufacture and distribution process for Papzimeos.

If our current manufacturers cannot perform as agreed, we may be required to replace such manufacturers and we may be unable to replace them on a timely basis or at all.

Our current and anticipated future dependence upon others for the manufacture of Papzimeos and our product candidates could delay, prevent or impair our development and both our current and potential future commercialization efforts.

Delays in obtaining regulatory approval of manufacturing processes and facilities or disruptions in manufacturing processes may delay or disrupt our commercialization efforts.

Before we can begin to commercially manufacture our product candidates for human therapeutics, we must obtain regulatory approval from the FDA for the applicable manufacturing process and facility.

Before we can begin to commercially manufacture our additional product candidates for human therapeutics, we must obtain regulatory approval from the FDA for the applicable manufacturing process and facility.

This will likely require the manufacturing facility to pass a pre-approval inspection by the FDA.

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In order to obtain FDA approval, we will need to ensure that all of the processes, methods, and equipment are compliant with cGMP and perform extensive audits of vendors, contract laboratories, and suppliers.

While we currently expect to use our internal cGMP manufacturing capabilities in Germantown, Maryland for the commercial manufacturing of our lead product candidate, PRGN 2012, we may rely on third parties to commercially manufacture our other product candidates.

While we currently use our internal cGMP manufacturing capabilities in Germantown, Maryland for the commercial manufacturing of Papzimeos, we may rely on third parties to commercially manufacture our other product candidates.

If we, any of our vendors, contract laboratories or suppliers is found to be out of compliance with cGMP, we may experience delays or disruptions in manufacturing while we work with these third parties to remedy the violation(s) or while we work to identify suitable replacement vendors.

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If we fail to comply with these requirements, we would be subject to possible regulatory action that could adversely affect our business, results of operations, financial condition, and cash flows, including the inability to sell any products that we may develop.

Even if we receive marketing approval of a product candidate, we will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense.

Even after we receive marketing approval, we remain subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense.

If we fail to comply or experience unanticipated problems with our products, we may be subject to administrative and judicial enforcement, including monetary penalties, for non-compliance and our approved products, if any, could be deemed misbranded or adulterated and prohibited from continued distribution.

Even if we obtain regulatory approval for our product candidates, these candidates will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, and submission of safety and other postmarket information.

Regulatory approvals also may be subject to a REMS, 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 postmarketing testing, including Phase 4 clinical trials, and surveillance to monitor the quality, safety and efficacy of the product.

Papzimeos and other product candidates we obtain regulatory approval for, will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, record-keeping, and submission of safety and other postmarket information.

For example, the holder of an approved BLA is obligated to monitor and report adverse events and any failure of a product to meet the specifications in the BLA.

The FDA guidance advises that patients treated with some types of gene therapy undergo follow-up observations for potential adverse events for as long as 15 years.

The holder of an approved BLA also must submit new or supplemental applications and obtain FDA approval for certain changes to the approved product,

product labeling or manufacturing process.

The holder of an approved BLA also must submit new or supplemental applications and obtain FDA approval for certain changes to the approved product, product labeling or manufacturing process.

Advertising and promotional materials must comply with FDA rules and are subject to FDA review, in addition to other potentially applicable federal and state laws.

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We do not have control over third-party manufacturers' compliance with these regulations and standards, but we may ultimately be responsible for any of their failures.

If we fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory authority may take a range of adverse actions, including, among other things, issuing a warning letter, imposing monetary penalties, restricting or suspending manufacturing, or causing us to withdraw the product from the market.

If we fail to comply with applicable regulatory requirements for Papzimeos or following approval of any of our product candidates, a regulatory authority may take a range of adverse actions, including, among other things, issuing a warning letter, imposing monetary penalties, restricting or suspending manufacturing, or causing us to withdraw the product from the market.

In addition, the FDA's policies, and those of equivalent foreign regulatory agencies, may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates.

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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 materially and adversely affect our business, financial condition, results of operations, and prospects.

Obtaining and maintaining marketing approval of our current and future product candidates in one jurisdiction does not mean that we will be successful in obtaining and maintaining marketing approval of our current and future product candidates in other jurisdictions.

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

For example, even if the FDA grants marketing approval of 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 marketing approval of our product and current and future product candidates in one jurisdiction does not mean that we will be successful in obtaining and maintaining marketing approval of our product and current and future product candidates in other jurisdictions.

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

For example, even if the FDA grants marketing approval of a product candidate, as for Papzimeos, comparable regulatory authorities in foreign jurisdictions must also approve the manufacturing, marketing, and promotion of the product candidate in those countries.

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 conducted in one jurisdiction may not be accepted by regulatory authorities in other jurisdictions.

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We may also submit marketing applications in other countries.

For example, we have submitted a MAA for zopapogene imadenovec-drba for the treatment of adults with RRP to the EMA in November 2025.

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

Obtaining foreign marketing approvals and compliance with foreign regulatory requirements could result in significant delays, difficulties and costs for us and could delay or prevent the introduction of our products in certain countries.

If we fail to comply with the regulatory requirements in international markets or fail to receive applicable marketing approvals, our target market will be reduced and our ability to realize the full market potential of our product candidates will be harmed.

As a company, we have never commercialized a product, we currently have no active sales force and we may lack the necessary expertise, personnel and resources to successfully commercialize our product candidates.

As a company, we have never commercialized a product for any indication.

Even if we receive regulatory approval for one or more of our product candidates from the FDA or comparable regulatory authorities, we will need to develop robust internal sales, marketing and distribution capabilities to commercialize such products, which will be expensive and time-consuming, or enter into collaborations with third parties to perform these services.

Although we have begun developing our commercial infrastructure in anticipation of the potential commercialization of PRGN-2012, these efforts are in an early stage and we currently have no active sales force.

We have limited experience as a commercial company and the sales, marketing, and distribution of Papzimeos or any future approved products may be unsuccessful or less successful than anticipated..

Though we have obtained regulatory approval from the FDA for Papzimeos, as a company, we have no prior experience commercializing a product for any indication.

The success of our commercialization efforts is difficult to predict and subject to the effective execution of our business plan, including, among other things, the continued development of our internal and contracted sales, marketing, manufacturing, and distribution capabilities and our ability to navigate the significant expenses and risks involved with the development and management of such capabilities.

Further, given our lack of experience commercializing products, we do not have a track record of successfully executing a commercial launch.

There is a risk that we underestimate the level of demand for a product, which could require us to change a manufacturing process to increase production yields and changes to a manufacturing process are time consuming and subject to regulatory, financial, and operational risks.

If we are unsuccessful in accomplishing our objectives and executing on our business plan, or if our commercialization efforts do not develop as planned, we may not be able to successfully commercialize Papzimeos and any

future approved products, we may require significant additional capital and financial resources, we may not achieve or maintain profitability, and we may not be able to compete against more established companies in our industry.

Although we have been developing our commercial infrastructure for the commercialization of Papzimeos, we have chosen to utilize a contracted sales force.

We may choose, in the future, to develop our own sales force for Papzimeos or other product candidates.

There are costs and risks involved with establishing our own sales, marketing and distribution capabilities.

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We must also compete with other biotechnology companies to recruit, hire, train and retain marketing and sales personnel.

Alternatively, we may wish to establish collaborations with third parties to maximize the potential of our product candidates in jurisdictions in which a product candidate has been approved.

Alternatively, we may wish to establish collaborations with third parties to maximize the potential of Papzimeos or our product candidates in jurisdictions in which Papzimeos or a product candidate has been approved.

Our industry is characterized by intense competition.

we may not be successful in entering into such commercialization arrangements with third parties on favorable terms, or at all.

Therefore, we may not be successful in entering into such commercialization arrangements with third parties on favorable terms, or at all.

In addition, we may have limited control over such third parties, and any of them may fail to devote the necessary resources and attention to sell, market and distribute our products effectively.

There can be no assurance that we will be able to develop the necessary commercial infrastructure and capabilities to successfully commercialize PRGN-2012 or our other product candidates or be able to establish or maintain relationships with third parties necessary to perform these services.

There can be no assurance that we will be able to develop the necessary commercial infrastructure and capabilities to successfully commercialize Papzimeos or our other product candidates or be able to establish or maintain relationships with third parties necessary to perform these services.

As a result, we may not successfully commercialize any product in any jurisdiction.

The successful commercialization of our product candidates will depend in part on the extent to which third-party payers, including governmental authorities and private health insurers, provide coverage and adequate reimbursement levels, as well as implement pricing policies favorable for our product candidates.

Failure to obtain or maintain coverage and adequate reimbursement for our product candidates, if approved, could limit our ability to market those products and decrease our ability to generate revenue.

The availability of coverage and adequacy of reimbursement by third-party payers, including managed care plans, governmental healthcare programs, such as Medicare and Medicaid and private health insurers is essential for most patients to be able to afford medical services and pharmaceutical products such as our product candidates that receive FDA approval.

Our ability to achieve acceptable levels of coverage and reimbursement for our product candidates or procedures using our product candidates by third-party payers will have an effect on our ability to successfully commercialize our product candidates.

Obtaining coverage and adequate reimbursement for our product candidates may be particularly difficult because of the higher prices often associated with drugs administered under the supervision of a physician.

Separate reimbursement for the product itself or the treatment or procedure in which our product candidate is used may not be available.

A decision by a third-party payer not to cover or not to separately reimburse for our product candidates or procedures using our product candidates could reduce physician utilization of our products once approved.

Assuming there is coverage for our product candidates, or procedures using our product candidates by a third-party payer, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.

We cannot be sure that coverage and reimbursement in the United States, the European Union, or elsewhere will be available for our current or future product candidates, or for any procedures using such product candidates, and any reimbursement that may become available may not be adequate or may be decreased or eliminated in the future.

The successful commercialization of our product and product candidates will depend in part on the extent to which third-party payers, including governmental authorities and private health insurers, provide coverage and adequate reimbursement levels, as well as implement pricing policies favorable for our product and product candidates.

Failure to obtain or maintain coverage and adequate reimbursement for our product and product candidates, if approved, could limit our ability to market those products and decrease our ability to generate revenue.

Our ability to achieve acceptable levels of coverage and reimbursement for our product and product candidates or procedures using our product and product candidates by third-party payers will have an effect on our ability to successfully commercialize our product and product candidates.

Obtaining coverage and adequate reimbursement for our product and product candidates may be particularly difficult because of the higher prices often associated with drugs administered under the supervision of a physician.

Separate reimbursement for the product itself or the treatment or procedure in which our product or product candidate is used may not be available.

A decision by a third-party payer not to cover or not to separately reimburse for our product or product candidates or procedures using our product or product candidates could reduce physician utilization of our products once approved.

Assuming there is coverage for our product and product candidates, or procedures using our product or product candidates by a third-party payer, the resulting reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.

We cannot be sure that coverage and reimbursement in the United States, the European Union, or elsewhere will be available for our product or current or future product candidates, or for any procedures using such product or product candidates, and any reimbursement that may become available may not be adequate or may be decreased or eliminated in the future.

There is significant uncertainty related to the insurance coverage and reimbursement of newly-approved products.

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Some third-party payers may require pre-approval of coverage for new or innovative devices or drug therapies before they will reimburse healthcare providers who use such therapies.

We cannot predict at this time what third-party payers will decide with respect to the coverage and reimbursement for our product candidates.

We cannot predict at this time what third-party payers will decide with respect to the coverage and reimbursement for our product or product candidates.

No uniform policy for coverage and reimbursement for products exist among third-party payers in the United States.

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Legislative and regulatory proposals and enactments to reform health care insurance programs could significantly influence the manner in which our product candidates, if approved, are prescribed and purchased.

For example, the Affordable Care Act has changed the way health care is paid for by both governmental and private insurers, including increased

rebates owed by manufacturers under the Medicaid Drug Rebate Program, annual fees and taxes on manufacturers of certain branded prescription drugs, the requirement that manufacturers participate in a discount program for certain outpatient drugs under Medicare Part D and the expansion of the number of hospitals eligible for discounts under Section 340B of the Public Health Service Act.

For example, the Affordable Care Act has changed the way health care is paid for by both governmental and private insurers, including increased rebates owed by manufacturers under the Medicaid Drug Rebate Program, annual fees and taxes on manufacturers of certain branded prescription drugs, the requirement that manufacturers participate in a discount program for certain outpatient drugs under Medicare Part D and the expansion of the number of hospitals eligible for discounts under Section 340B of the Public Health Service Act.

In addition, the Tax Act eliminated the tax-based shared responsibility payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Code, commonly referred to as the "individual mandate," effective January 1, 2019.

Further, the Bipartisan Budget Act of 2018, among other things, amended the Medicare statute to reduce the coverage gap in most Medicare drug plans, commonly known as the "donut hole," by raising the required manufacturer point-of-sale discount from 50 percent to 70 percent off the negotiated price effective as of January 1, 2019.

Significant developments that may adversely affect pricing in the United States include proposed drug pricing and Medicare reforms by Congress and regulatory changes to Medicare Part B and Medicare Part D, additional changes to the Affordable Care Act under the Trump Administration and trends in the practices of managed care groups and institutional and governmental purchasers, including consolidation of our customers.

The pharmaceutical industry faces uncertainty regarding the continuation of Medicare's current drug pricing methodology.

For example, on November 27, 2020 the Centers for Medicare & Medicaid Services ("CMS"), published an Interim Final Rule ("IFR") that would have imposed a mandatory Most Favored Nation ("MFN") pricing model on the fifty single-source drugs and biologics (including biosimilars) with the highest annual Medicare Part B spending for seven years, beginning January 1, 2021.

The MFN model would have ultimately based payment for each of the fifty drugs on the lowest-available, gross domestic product ("GDP")-adjusted drug price available in any Organization for Economic Co-operation and Development country that meets minimum GDP requirements.

Pharmaceutical and biotechnology industry organizations as well as several patient support groups filed litigation to enjoin implementation of the IFR.

On December 28, 2020, the United States District Court for the Northern District of California imposed a nationwide preliminary injunction on implementation of the IFR pending CMS's completion of regulatory notice-and-comment rulemaking by CMS.

On December 29, 2021, CMS published a final rule that rescinded the IFR, effective February 28, 2022, to address the procedural issues acknowledged in the preliminary injunction.

Although the IFR as published will not go into effect, CMS could propose future pharmaceutical pricing changes similar to the IFR, albeit with the required notice and opportunity for stakeholders to participate in the regulatory process.

On November 19, 2021, the United States House of Representatives passed the Build Back Better Act, which includes several provisions aimed at lowering prescription drug costs and reducing spending by the federal government and private payers by, among other things, allowing the United States federal government to negotiate prices for certain high-cost drugs covered under Medicare, imposing rebates on manufacturers of single-source drugs and biologics covered by Medicare Part B and nearly all drugs covered under Part D, if drug prices increase faster than the rate of inflation, based on the Consumer Price Index for All Urban Consumers ("CPI-U").

We are actively monitoring legislative developments to understand the likelihood of enactment and how such legislation would impact our business and operations, if enacted.

On August 16, 2022, the Inflation Reduction Act of 2022, was signed into law, which among other things, includes prescription drug provisions that have significant implications for the pharmaceutical industry and beneficiaries, including extending enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025, allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries.

Significant developments that may adversely affect pricing in the United States include proposed drug pricing and Medicare reforms by Congress and regulatory changes to Medicare Part B and Medicare Part D, additional changes to the Affordable Care Act under the current Administration and trends in the practices of managed care groups and institutional and governmental purchasers, including consolidation of our customers.

The Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), which was signed into law in March 2020 and is designed to provide financial support and resources to individuals and businesses affected by the COVID-19 pandemic, suspended the 2 percent Medicare sequester from May 1, 2020 through December 31, 2020, and extended the sequester by one year, through 2030.On August 16, 2022, the Inflation Reduction Act of 2022, was signed into law, which among other things, includes prescription drug provisions that have significant implications for the pharmaceutical industry and beneficiaries, including extending enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025, allowing the federal government to negotiate a maximum fair price for certain high-priced single source Medicare drugs, imposing penalties and excise tax for manufacturers that fail to comply with the drug price negotiation requirements, requiring inflation rebates for all Medicare Part B and Part D drugs, with limited exceptions, if their drug prices increase faster than inflation, and redesigning Medicare Part D to reduce out-of-pocket prescription drug costs for beneficiaries.

On August 29, 2023, the Department of Health and Human Services announced the list of the first ten drugs that will be subject to price negotiations, although the drug price negotiation program is currently subject to legal challenges.

For that and other reasons, it is currently unclear how the IRA will be effectuated.

In December 2023, the Biden administration released a proposed framework that for the first time proposed that a drug's price can be a factor in determining that the drug is not accessible to the public and, therefore, that the government could exercise "march-in rights" and license it to a third party to manufacture.

We cannot predict whether the Trump administration will finalize the draft framework or if the government will propose other drug pricing policy changes.

If pursued and finalized these policies could reduce prices and reimbursement for certain of our products and could significantly impact our business and consolidated results of operations.

For example, on July 4, 2025, the annual reconciliation bill, the “One Big Beautiful Bill Act” (“OBBBA”), was signed into law which is expected to reduce Medicaid spending and enrollment by implementing work requirements for some beneficiaries, capping state-directed payments, reducing federal funding, and limiting provider taxes used to fund the program.

OBBBA also narrows access to ACA marketplace exchange enrollment and declines to extend the ACA enhanced advanced premium tax credits, set to expire at the end of 2025, which, among other provisions in the law, are anticipated to reduce the number of Americans with health insurance.

The current administration is pursuing policies to reduce regulations and expenditures across the U.S.

government, including at HHS, the FDA, CMS and related agencies.

These actions, presently directed by executive orders or memoranda from the Office of Management and Budget, may propose policy changes that create additional uncertainty for our business.

Some these actions include (1) directing agencies to reduce workforce and make program cuts, (2) rescinding a Biden administration executive order tasking the Center for Medicare and Medicaid Innovation, or CMMI, to consider new payment and healthcare models to limit drug spending, (3) eliminating the Biden administration’s executive order that directed HHS to establish an AI task force, developing a strategic plan directing HHS and other agencies to lower prescription drug costs for Medicare through a variety of initiatives, including by improving upon the Medicare Drug Price Negotiation Program, (4) directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing prices across hospitals and health plans;

(5) imposing tariffs on imported pharmaceutical product;

(6) directing certain federal agencies to enforce existing law regarding hospital and price plan transparency and by standardizing prices across hospitals and health plans;

and (7) as part of the Make America Healthy Again (MAHA) Commission’s recent Strategy Report, working cross government agencies to increase enforcement on direct-to-consumer pharmaceutical advertising.

For example, on April 15, 2025, outlining several

actions the Secretary of HHS must take to optimize healthcare regulations that will provide access to prescription drugs at lower costs;

on May 5, 2025, aiming to promote domestic production of critical medicines;

and on May 12, 2025, aiming to establish a “most favored nation” drug pricing policy that would tie US drug prices to the prices paid for drugs in other countries.

Since the May 12, 2025 “most favored nation” executive order, the Trump administration has continued to exert pressure on drug manufacturers to implement “most favored nation” pricing and has suggested that it may impose significant tariffs on pharmaceuticals if such pricing is not implemented.

These actions and policies may significantly reduce U.S.

drug prices, potentially impacting manufacturers’ global pricing strategies and profitability, while increasing their operational costs and compliance risks.

Additionally, the U.S.

Supreme Court’s recent Loper Bright decision described above could result in additional legal challenges to current regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA.

Congress may introduce and ultimately pass healthcare-related legislation that could impact the drug approval process and make changes to the Medicare Drug Price Negotiation Program.

There is also significant economic pressure on state budgets that may result in states increasingly seeking to achieve budget savings through mechanisms that limit coverage or payment for certain drugs.

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• analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to items or services reimbursed by non-governmental third-party payers, including private insurers;

state and foreign

laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers in those jurisdictions;

state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry's voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers in those jurisdictions;

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

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The United Kingdom has transposed the GDPR into domestic law with a United Kingdom version of the GDPR, or the U.K.

GDPR, which took effect in January 2021, and could expose us to two parallel regimes, each of which potentially authorizes similar fines and other potentially divergent enforcement actions for violations.

GDPR, which took effect in January 2021.

While the U.K.

GDPR currently imposes substantially the same obligations as the GDPR, the UK Data (Use and Access) Act, which received Royal Assent in June 2025 modifies the U.K.

GDPR in a manner that deviates from the GDPR and permits further deviations in the form of regulatory guidance or secondary legislation, creating further risk of divergent parallel regimes, each of which potentially authorizes similar fines and other potentially divergent enforcement actions for violations.

The GDPR and U.K.

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The European Commission has adopted an adequacy decision in favor of the United Kingdom, enabling data transfers from the European Economic Area to the United Kingdom without additional safeguards.

However, the United Kingdom adequacy decision will automatically expire in June 2025 unless the European Commission re-assesses and renews or extends that decision.

We and many other companies may need to implement different or additional measures (such as the recently revised European Commission-approved Standard

Contractual Clauses or the U.K.

However, the United Kingdom adequacy decision will automatically expire in December 2031 unless the European Commission re-assesses and renews or extends that decision.

We and many other companies may need to implement different or additional measures (such as the European Commission-approved Standard Contractual Clauses or the U.K.

Government-approved International Data Transfer Agreement) to establish or maintain legitimate means for the transfer and receipt of personal data from the European Economic Area and the United Kingdom to the United States.

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We plan to engage third parties for clinical trials and/or to obtain necessary permits, licenses, patent registrations, and other regulatory approvals and we can be held liable for the corrupt or other illegal activities of our personnel, agents, or partners, even if we do not explicitly authorize or have prior knowledge of such activities.

In particular, our operations will be subject to FCPA, which prohibits, among other things, United States companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government-owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof.

In particular, our operations will be subject to FCPA, which prohibits, among other things, United States

companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government-owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof.

Recently, the SEC and Department of Justice have increased their FCPA enforcement activities with respect to biotechnology and pharmaceutical companies.

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Violations of these laws and regulations could result in fines, criminal sanctions, including imprisonment, against us, our officers, or our employees, the closing down of facilities, including those of our suppliers and manufacturers, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs, debarment, reputational harm, prohibitions on the conduct of our business, and other consequences.

Any such violations could

also result in prohibitions on our ability to offer our product candidates in one or more countries as well as difficulties in manufacturing or continuing to develop our product candidates, and could materially damage our reputation, our brand, our ability to attract and retain employees and our business, prospects, operating results, and financial condition.

Any such violations could also result in prohibitions on our ability to offer our product candidates in one or more countries as well as difficulties in manufacturing or continuing to develop our product candidates, and could materially damage our reputation, our brand, our ability to attract and retain employees and our business, prospects, operating results, and financial condition.

Risks Related to Our Business Operations and Strategy

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We have previously entered into, and may in the future enter into, collaboration arrangements to develop product candidates enabled by our technologies.

For example, because of our strategic reprioritization of our pipeline to focus on development of our lead program, PRGN-2012, we plan to minimize UltraCAR-T spend and focus on strategic partnerships to further advance such UltraCAR-T programs.

For example, because of our strategic reprioritization of our pipeline to focus on Papzimeos, we have minimized UltraCAR-T spend and instead have focused on strategic partnerships to further advance such UltraCAR-T programs.

We may face significant competition in seeking appropriate partners for our product candidates, and the negotiation process may be time-consuming and complex.

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We may be sued for product liability.

We face an inherent risk of product liability exposure related to the testing of our product candidates in human trials and may face greater risk if we commercialize any products that we develop.

We face an inherent risk of product liability exposure related to the testing of our product candidates in human trials as well as any product liability claims related to the use of Papzimeos.

Product liability claims may be brought against us by subjects enrolled in our trials, patients, healthcare providers or others using, administering, or selling our products.

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If potential losses exceed our insurance coverage, our financial condition would be adversely affected.

In the event of contamination or injury, we could be held liable for damages or be penalized with fines in an amount exceeding our resources.

Clinical trials or regulatory approvals for any of our product candidates could be suspended, which could adversely affect our results of operations and business, including by preventing or limiting the development and commercialization of any product candidates that we may develop.

The livestock products of our Exemplar reporting segment are subject to disease outbreaks that can increase the cost of production and/or reduce production harvests, and the loss of existing livestock would result in the loss of commercial technology.

In the event of contamination or injury, we

could be held liable for damages or be penalized with fines in an amount exceeding our resources.

Clinical trials or regulatory approvals for any of our product or product candidates could be suspended, which could adversely affect our results of operations and business, including by preventing or limiting the development and commercialization of any product or product candidates that we may develop.

The livestock products of Exemplar are subject to disease outbreaks that can increase the cost of production and/or reduce production harvests, and the loss of existing livestock would result in the loss of commercial technology.

Several of the products of our operating subsidiary, Exemplar, are subject to periodic outbreaks of a variety of diseases.

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The economic impact of disease to Exemplar can be significant, as we must incur the cost of preventive measures, such as vaccines and antibiotics, and then if infected, the cost of lost or reduced production.

The markets in which we are developing candidate products using our technologies are highly competitive.

The markets for our product and product candidates are highly competitive.

Competitors and potential competitors may develop products and technologies that make ours obsolete or garner greater market share than ours.

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Our competitors may also 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.

In the area of infectious diseases, our lead product candidate is PRGN-2012, which is based on our AdenoVerse immunotherapy platform, for the treatment of RRP.

In the area of infectious diseases, we have Papzimeos, which is based on our AdenoVerse immunotherapy platform, for the treatment of RRP.

We believe there are competitors in this area, including INOVIO Pharmaceuticals with their investigational DNA vaccine INO-3107 targeting HPV6 and HPV11 antigens.

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To the extent that any of our competitors are more successful with respect to any key competitive factor or we are forced to reduce, or are unable to raise, the price of any products enabled by our technologies in order to remain competitive, our operating results and financial condition could be materially adversely affected.

If we lose key personnel, including key management personnel, or are unable to attract and retain additional personnel, it could delay our product development programs, harm our research and development efforts, and we may be unable to continue to commercialize our product candidates.

Our business involves complex operations and requires a management team and employee workforce that is knowledgeable in the many areas in which we operate.

The loss of any key members of our management, including our Chief Executive Officer, Helen Sabzevari Ph.D., or the failure to attract or retain other key employees who possess the requisite expertise for the conduct of our business, could prevent us from developing and commercializing our product candidates for our target markets and executing on our business strategy.

The loss of any key members of our management, including our Chief Executive Officer, Helen Sabzevari Ph.D., or the failure to attract or retain other key employees who possess the requisite expertise for the conduct of our business, could prevent us from developing and commercializing our product and product candidates for our target markets and executing on our business strategy.

In addition, the loss of any key scientific staff, or the failure to attract or retain other key scientific employees, could prevent us from developing our technologies for our target markets or from further developing and commercializing our products and services offerings to execute on our business strategy.

We may not be able to attract or retain qualified employees in the future due to the intense competition for qualified personnel among biotechnology, synthetic biology and other technology-based businesses, or due to the unavailability of personnel with the qualifications or experience necessary for our business.

not able to attract and retain the necessary personnel to accomplish our business objectives, we may experience staffing constraints that will adversely affect our ability to support our internal research and development programs or meet other demands.

If we are not able to attract and retain the necessary personnel to accomplish our business objectives, we may experience staffing constraints that will adversely affect our ability to support our internal research and development programs or meet other demands.

We have had a number of executive officers depart from our Company over the last several years, and we continually evaluate our leadership structure.

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We rely on various information systems to manage our operations and to store information, including sensitive data such as confidential business information and personally identifiable information.

These systems have been and continue to be vulnerable to interruption or malfunction, including due to events beyond our control, and to unauthorized access, computer hackers, ransomware, viruses, and other security problems.

fraudulent use attempts, phishing attacks, and other security problems.

Failure of these systems or any significant breach of our data security could have an adverse effect on our business and may materially adversely affect our operating results and financial condition.

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The operations of our business could be adversely affected by health epidemics, including, for example, if we are unable to secure necessary supplies, including personal protection equipment for our employees.

We also rely on third parties for various aspects of our business, including developing some of our product candidates.

We also rely on third parties for various

aspects of our business, including developing some of our product candidates.

These third parties may experience similar disruptions or negative impacts to their businesses due to epidemics, which may result in additional delays or otherwise adversely impact our operations.

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A significant outbreak of infectious diseases in the future could result in a widespread health crisis that could adversely affect the economies and financial markets worldwide, resulting in an economic downturn that could impact our business, financial condition and results of operations.

We have international operations and assets and may have additional international operations and assets in the future.

We have international assets and may have international operations and additional international assets in the future.

Our international operations and assets may be subject to various economic, social, and governmental risks.

Our international operations and any future international operations may expose us to risks that could negatively impact our future results.

Our international assets and any future international operations may expose us to risks that could negatively impact our future results.

Our operations may not develop in the same way or at the same rate as might be expected in a country with an economy similar to the United States.

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Future expenses and revenues of our international subsidiaries are expected to be denominated in currencies other than in United States dollars.

Therefore, movements in exchange rates to translate from foreign currencies may have an impact on our reported results of operations, financial position, and cash flows.

Therefore, movements in exchange rates to translate from foreign

currencies may have an impact on our reported results of operations, financial position, and cash flows.

We may pursue strategic acquisitions and investments that could have an adverse impact on our business if they are unsuccessful.

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Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

As of December 31, 2024, we had net operating loss carryforwards of approximately $969.9 million for United States federal income tax purposes available to offset future taxable income, including $757.0 million generated after 2017, United States capital loss carryforwards of $100.9 million, and United States federal and state research and development tax credits of $16.2 million, prior to consideration of annual limitations that may be imposed under Section 382 of the Internal Revenue Code of 1986, as amended, or ("Section 382").

As of December 31, 2025, we had net operating loss carryforwards of approximately $1.12 billion for United States federal income tax purposes available to offset future taxable income, including $911.9 million generated after 2017, United States capital loss carryforwards of $1.4 million, and United States federal and state research and development tax credits of $17.9

million, prior to consideration of annual limitations that may be imposed under Section 382 of the Internal Revenue Code of 1986, as amended, or ("Section 382").

Net operating loss carryforwards generated prior to 2018 will expire if unutilized from 2025 to 2037, and capital loss carryforwards will expire if unutilized from 2025 to 2027.

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Our ability to compete may decline if we do not adequately protect our proprietary technologies or if we lose some of our intellectual property rights through costly litigation or administrative proceedings.

Our success depends in part on our ability to obtain patents and maintain adequate protection of our intellectual property in the United States and abroad for our suite of technologies and product candidates.

We have adopted a strategy of seeking patent protection in the United States and abroad with respect to certain of the technologies used in or relating to our technologies and product pipeline.

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In addition, we seek patents covering specific collaborator's products.

We have also filed patents and patent applications in other jurisdictions, such as Australia, Canada, China, Europe, Hong Kong, India, Israel, Japan, Korea and South Africa.

We have also filed patents and patent applications in other jurisdictions, such as Australia, Canada, China, Europe, Hong Kong, India, Israel, Japan, Korea, Mexico, Oman, Qatar, Saudi Arabia, Singapore, South Africa, Taiwan, and United Arab Emirates.

In the future we may file in these or additional jurisdictions as deemed appropriate for the protection of our technologies.

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Issued patents and patents issuing from pending applications may be challenged, invalidated, or circumvented.

Moreover, the United States Leahy-Smith America Invents Act, enacted in September 2011, brought significant changes to the United States patent system, which include a change to a "first to file" system from a "first to invent" system and changes to the procedures for challenging issued patents and disputing patent applications during the examination process, among other things.

These changes could increase the costs and uncertainties surrounding the prosecution of our patent applications and the enforcement or defense of our patent rights.

Additional uncertainty may result from legal precedent handed down by the United States Court of Appeals for the Federal Circuit and United States Supreme Court as they determine legal issues concerning the scope and construction of patent claims and inconsistent interpretation of patent laws by the lower courts.

Accordingly, we cannot ensure that any of our pending patent applications will result in issued patents, or even if issued, predict the breadth of the claims upheld in our and other companies' patents.

We cannot ensure that any of our pending patent applications will result in issued patents, or even if issued, predict the breadth of the claims upheld in our and other companies' patents.

Given that the degree of future protection for our proprietary rights is uncertain, we cannot ensure that we were the first to invent the inventions covered by our pending patent applications;

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Moreover, our competitors may independently develop equivalent knowledge, methods, and know-how.

Litigation or other proceedings or third-party claims of intellectual property infringement, misappropriation or other violation could require us to spend significant time and money and could prevent us from commercializing our technologies or impact our stock price.

Litigation or other proceedings or third-party claims of intellectual property infringement, misappropriation or other

violation could require us to spend significant time and money and could prevent us from commercializing our technologies or impact our stock price.

Our commercial success also depends in part on not infringing patents and proprietary rights of third parties and not breaching any licenses or other agreements that we have entered into with regard to our technologies, products, and business.

We cannot ensure that patents have not been issued to third parties that could block our or our collaborators' ability to obtain patents or to

operate as we would like.

We cannot ensure that patents have not been issued to third parties that could block our or our collaborators' ability to obtain patents or to operate as we would like.

There may be patents in some countries that, if valid, may block our ability to make, use or sell our products in those countries, or import our products into those countries, if we are unsuccessful in circumventing or acquiring the rights to these patents.

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In addition, we could be found liable for monetary damages, including treble damages and attorneys' fees, if we are found to have willfully infringed a patent or other intellectual property right.

If any of our competitors have filed patent applications or obtained patents that claim inventions also claimed by us, we may have to participate in interference proceedings declared by the USPTO to determine priority of invention and, thus, the right to the patents for these inventions in the United States.

the patents for these inventions in the United States.

These proceedings could result in substantial cost to us even if the outcome is favorable.

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Uncertainties resulting from initiation and continuation of any patent or related litigation could harm our ability to compete.

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.

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.

Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment, and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements.

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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.

Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates.

Enforcing our intellectual property rights may be difficult and unpredictable.

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These agreements also generally provide that inventions conceived by the individual in the course of rendering services to us shall be our exclusive property.

We cannot guarantee that we have entered into such

agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes.

We cannot guarantee that we have entered into such agreements with each party that may have or have had access to our trade secrets or proprietary technology and processes.

Despite these efforts, any of these parties may breach the agreements and disclose our proprietary information, including our trade secrets, and we may not be able to obtain adequate remedies for such breaches.

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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.

Our use of new and evolving technologies, such as artificial intelligence, may present risks and challenges that can impact our business, including by posing cybersecurity and other risks to our confidential and/or proprietary information, including personal information, and as a result we may be exposed to reputational harm and liability.

We may use and integrate artificial intelligence (AI) into our business processes.

Use of this technology presents risks and challenges that could affect our business both in our own development and implementation of AI and through the adoption of commercially available tools.

Use of this technology could pose cybersecurity, data privacy, IT, intellectual property, regulatory, legal, operational, competitive, reputational and other risks and challenges that could affect its adoption, and therefore our business.

Specifically, risks related to accuracy, bias, artificial intelligence hallucinations, discrimination, harmful content, misinformation, fraud, scams, targeted attacks (including model poisoning or data poisoning), surveillance, data leakage, inequality, environmental harms, and other harms may flow from our development, use, or deployment of AI technologies.

The rapid evolution of AI will require the application of significant resources to design, develop, test and maintain such systems to help ensure that AI is implemented in accordance with applicable law and regulation and in a socially responsible manner and to minimize any real or perceived unintended harmful impacts.

If we enable or use solutions that draw controversy due to perceived or actual negative societal impact, we may experience brand or reputational harm, competitive harm or legal liability.

The use of certain AI technology can give rise to intellectual property risks, including by disclosing or otherwise compromising our confidential or proprietary intellectual property and intellectual property infringement, or by undermining our ability to assert or defend ownership rights in intellectual property created with the assistance of AI tools.

Additionally, we expect to see increasing government and supranational regulation related to AI use and ethics, which may also significantly increase the burden and cost of research, development and compliance in this area.

A growing number of legislators and regulators are adopting laws and regulations and have focused enforcement efforts on the adoption of AI, and use of such technologies in compliance with ethical standards and societal expectations.

These developments may increase our compliance burden and costs in connection with use of AI and lead to legal liability if we fail to meet evolving legal standards or if use of such technologies results in harms or other causes of action we did not predict.

Our vendors may incorporate AI tools into their offerings, and the providers of these AI tools may not meet existing or rapidly evolving regulatory or industry standards, including with respect to privacy and data security.

Further, bad actors around the world use increasingly sophisticated methods, including the use of AI, to engage in illegal activities involving the theft and misuse of personal information, confidential information and intellectual property.

Any of these effects could damage our reputation, result in the loss of valuable property and information, cause us to breach applicable laws and regulations, and adversely impact our business.

Risks Related to Our Common Stock

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• impede a merger, consolidation, takeover, or other business combination involving us that other shareholders may desire.

We have engaged in transactions with companies in which Randal J.

Kirk, our Executive Chairman, and his affiliates have an interest.

We have engaged in a variety of transactions, including collaborations and our sale of our non-healthcare assets to TS Biotechnology, with companies in which Mr.

Kirk and affiliates of Mr.

Kirk have a direct or indirect interest.

Kirk serves as the Senior Managing Director and Chairman of Third Security and owns 100 percent of the equity interests of Third Security.

We believe that each of these transactions was on terms no less favorable to us than terms we could have obtained from unaffiliated third parties, and each of these transactions was approved by at least a majority of the disinterested members of the audit committee of our board of directors.

Furthermore, as we execute on these transactions going forward, a conflict may arise between our interests and those of Mr.

Kirk and his affiliates.

Sales of a substantial number of shares of our common stock in the public market could occur at any time.

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• provide for the inability of shareholders to convene a shareholders' meeting without the support of shareholders owning together 25 percent of our common stock;

• provide for the application of Virginia law prohibiting us from entering into a business combination with the beneficial

owner of 10 percent or more of our outstanding voting stock for a period of three years after the 10 percent or greater owner first reached that level of stock ownership, unless we meet certain criteria;

• provide for the application of Virginia law prohibiting us from entering into a business combination with the beneficial owner of 10 percent or more of our outstanding voting stock for a period of three years after the 10 percent or greater owner first reached that level of stock ownership, unless we meet certain criteria;

• allow the authorized number of our directors to be changed only by resolution of our board of directors;

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

What changed 10-K

Item 1A. Risk Factors