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Item 1. Business

2024-08-13 compared with 2023-07-31 · 1303 added, 1168 removed, 397 unchanged (86% of the section changed)

We are a biotechnology company focused on developing

cellular therapies for cancer, diabetes, and malignant ascites based upon a proprietary cellulose-based live cell encapsulation technology

known as “Cell-in-a-Box®.” The Cell-in-a-Box® technology is intended to be used as a platform upon which therapies

for several types of cancer, including LAPC, will be developed.

cellular therapies for cancer based upon a proprietary cellulose-based live cell encapsulation technology known as “Cell-in-a-Box®.”

The Cell-in-a-Box® technology is intended to be used as a platform upon which therapies for several types of cancer, including LAPC,

will be developed.

The current generation of our product candidate is referred to as “CypCaps™.”

During the year ended April 30, 2024, we determined

that research and development in the treatment of diabetes would no longer be pursued.

On August 15, 2022, we entered into a Cooperation

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reconstituted board of directors (the “Board”).

The Board then formed a Business Review Committee to evaluate, investigate

and review our business, affairs, strategy, management and operations and in its sole discretion, to make recommendations to our management

and Board with respect thereto.

The Business Review Committee is also reviewing many of the risks relative to our business.

the Board is reviewing risks associated with our development programs and our relationship with SG Austria Pte.

Ltd (“SG Austria”),

including that all licensed patents have expired, that know-how relating to our Cell-in-a-Box® technology solely resides with SG Austria,

and that the incentives of SG Austria and its management may not be currently aligned with ours.

The Board has curtailed spending on our

programs, including pre-clinical and clinical activities, until the review by the Business Review Committee and the Board is complete

and the Board has determined the actions and plans to be implemented.

The Business Review Committee’s recommendations will include

potentially seeking a new framework for our relationship with SG Austria and its subsidiaries.

If we are unsuccessful in seeking an acceptable

new framework, we will reevaluate whether we should continue those programs which are dependent on SG Austria, including our development

programs for locally advanced, inoperable, non-metastatic pancreatic cancer (“LAPC”), diabetes and malignant ascites.

issues involving SG Austria have delayed our timeline for addressing the FDA clinical hold for its planned clinical trial in LAPC and

could result in other delays or termination of the development activities.

In addition, the curtailment of spending on our programs pending

the review by the Business Review Committee and the Board may cause additional delays.

On November 17, 2023, the Board formed the Strategic Scientific Committee

(the “Scientific Committee”), chaired by Dr.

Michael Abecassis.

The Scientific Committee and our independent consultants are

reviewing many of the risks relative to our business.

In addition, the Board is reviewing risks associated with our development programs

and our relationship with SG Austria Pte.

Ltd (“SG Austria”), including that all licensed patents have expired and that know-how

relating to our Cell-in-a-Box® technology solely resides with SG Austria.

The Board has reduced spending on our programs, including

pre-clinical and clinical activities, until the review by the Scientific Committee and the Board is complete and the Board has determined

the actions and plans to be implemented.

The Scientific Committee’s recommendations will include potentially seeking a new framework

for our relationship with SG Austria and its subsidiaries.

We are reevaluating those programs which are dependent on SG Austria and the

Food and Drug Administration’s (the “FDA”) acceptance of its technologies, including our development programs for

locally advanced, inoperable, non-metastatic pancreatic cancer (“LAPC”).

Our reevaluation for addressing the FDA concerns

has resulted in delays stemming from the review of the non-clinical package provided by SG Austria and changes to the FDA review process.

The Cell-in-a-Box® encapsulation technology

potentially enables genetically engineered live human cells to be used as a means to produce various biologically active molecules.

technology is intended to result in the formation of pinhead-sized cellulose-based porous capsules in which genetically modified live

human cells can be encapsulated and maintained.

In a laboratory setting, this proprietary live cell encapsulation technology has been

shown to create a micro-environment in which encapsulated cells survive and flourish.

They are protected from environmental challenges,

such as the sheer forces associated with bioreactors and passage through catheters and needles, which we believe enables greater cell

growth and production of the active molecules.

The capsules are largely composed of cellulose (cotton) and are bioinert.

is designed to present genetically engineered live human cells to targeted tissues.

The technology is intended to result in the formation

of pinhead-sized cellulose-based porous capsules in which genetically modified live human cells can be encapsulated, grown to confluence

and maintained in a cryopreserved (frozen) state until shortly before they are injected into an appropriate patient.

In a laboratory setting,

this proprietary live cell encapsulation technology has been shown to create a micro-environment in which encapsulated cells survive and

Encapsulated cells are protected from environmental challenges, such as the shear forces associated with bioreactors and passage

through catheters and needles, which we believe enables greater cell growth and production of the active molecules.

The capsules are largely

composed of cellulose (cotton) and are bioinert.

During the past year, SG Austria has generated data and reports to support submission

to the FDA concerning the safety of the microcapsules.

We have been developing therapies for pancreatic

and other solid cancerous tumors by using genetically engineered live human cells that we believe are capable of converting a cancer prodrug

into its cancer-killing form.

We encapsulate those cells using the Cell-in-a-Box® technology and place those capsules in the body

as close as possible to the tumor.

In this way, we believe that when a cancer prodrug is administered to a patient with a particular type

of cancer that may be affected by the prodrug, the killing of the patient’s cancerous tumor may be optimized.

We have also been developing a way to delay the

production and accumulation of malignant ascites that results from many types of abdominal cancerous tumors.

Our potential therapy for

malignant ascites involves using the same encapsulated cells we employ for pancreatic cancer but placing the encapsulated cells in the

peritoneal cavity of a patient and administering ifosfamide intravenously.

We have also been developing a potential therapy

for Type 1 diabetes and insulin-dependent Type 2 diabetes.

Our product candidate for the treatment of diabetes consists of encapsulated

genetically modified insulin-producing cells.

The encapsulation will be done using the Cell-in-a-Box® technology.

Implanting these

encapsulated cells in the body is designed to have them function as a bio-artificial pancreas for purposes of insulin production.

In addition to the two cancer programs discussed

above, we have been working on ways to exploit the benefits of the Cell-in-a-Box® technology to develop therapies for cancer that

involve prodrugs based upon certain constituents of the Cannabis plant.

However, until the FDA allows us to commence our clinical trial

in LAPC and we are able to validate our Cell-in-a-Box® encapsulation technology in a clinical trial, we are not spending any further

resources developing our Cannabis Program.

Finally, we have been developing a potential therapy

for Type 1 diabetes and insulin-dependent Type 2 diabetes.

Our product candidate for the treatment of diabetes consists of encapsulated

genetically modified insulin-producing cells.

The encapsulation will be done using the Cell-in-a-Box® technology.

Implanting these

encapsulated cells in the body is designed to have them function as a bio-artificial pancreas for purposes of insulin production.

Until the Business Review Committee completes

tumors by using genetically engineered live human cells that we believe are capable of converting a cancer prodrug into its cancer-killing

We encapsulate those cells using the Cell-in-a-Box® technology and place those capsules in the body as close as possible to

In this way, we believe that when a cancer prodrug is administered to a patient with a particular type of cancer that may be

affected by the resulting active drug, the killing of the patient’s cancerous tumor may be optimized both by enhanced potency and

limited exposure away from the target tumor.

We believe that the prodrug/activator technology is well suited to address the shift from

cure/enhanced survival to creating a zone of clearance around blood vessels adjacent to tumor.

This zone of clearance improves the probability

of successful surgical resection of LAPC, which has been shown to improve survival.

In addition to reengaging SG Austria, the Company

is also identifying alternative approaches to expand the prodrug/activator technology for cancer treatment.

These discussions may expand

our prodrug/activation options to use highly toxic cancer-killing drugs in tightly controlled perivascular spaces.

Until the Strategic Scientific Committee completes

its evaluation of our programs and we enter into a new framework for its relationship with SG Austria, spending on our development programs

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has requested that we:

· Provide additional sequencing data and genetic

stability studies;

· Conduct a stability study on our final formulated

product candidate as well as the cells from our Master Cell Bank (“MCB”);

· Evaluate the compatibility of the delivery devices

(the prefilled syringe and the microcatheter used to implant the CypCaps™) with our product candidate for pancreatic cancer;

· Provide additional detailed description of the

manufacturing process of our product candidate for pancreatic cancer;

· Provide additional product release specifications

for our encapsulated cells;

· Demonstrate comparability between the 1st and

2nd generation of our product candidate for pancreatic cancer and ensure adequate and consistent product performance and safety between

the two generations;

· Conduct a biocompatibility assessment using the

capsules material;

· Address specified insufficiencies in the Chemistry,

Manufacturing and Controls information in the cross-referenced Drug Master File;

· Conduct an additional nonclinical study in a

large animal (such as a pig) to assess the safety, activity, and distribution of the product candidate for pancreatic cancer;

· Revise the Investigators Brochure to include

any additional preclinical studies conducted in response to the clinical hold and remove any statements not supported by the data we generated.

Provide additional sequencing data and genetic stability studies;

Conduct a stability study on our final formulated product candidate as well as the cells from our Master Cell Bank (“MCB”);

Evaluate the compatibility of the delivery devices (the prefilled syringe and the microcatheter used to implant the CypCaps™) with our product candidate for pancreatic cancer;

Provide additional detailed description of the manufacturing process of our product candidate for pancreatic cancer;

Provide additional product release specifications for our encapsulated cells;

Demonstrate comparability between the 1st and 2nd generation of our product candidate for pancreatic cancer and ensure adequate and consistent product performance and safety between the two generations;

Conduct a biocompatibility assessment using the capsules material;

Address specified insufficiencies in the Chemistry, Manufacturing and Controls information in the cross-referenced Drug Master File;

Conduct an additional nonclinical study in animals to assess the safety, activity,

and distribution of the product candidate for pancreatic cancer;

Revise the Investigators Brochure to include any additional preclinical studies conducted in response to the clinical hold and remove any statements not supported by the data we generated.

The FDA also requested that we address the following

issues as an amendment to our IND:

· Provide a Certificate of Analysis for pc3/2B1

plasmid that includes tests for assessing purity, safety, and potency;

· Perform qualification studies for the drug substance

filling step to ensure that the product candidate for pancreatic cancer remains sterile and stable during the filling process;

· Submit an updated batch analysis for the product

candidate for the specific lot that will be used for manufacturing all future product candidates;

· Provide additional details for the methodology

for the Resorufin (CYP2B1) potency and the PrestoBlue cell metabolic assays;

· Provide a few examples of common microcatheters

that fit the specifications in our Angiography Procedure Manual;

· Clarify the language in our Pharmacy Manual regarding

proper use of the syringe fill with the product candidate for pancreatic cancer;

· Provide a discussion with data for trial of the

potential for cellular and humoral immune reactivity against the heterologous rat CYP2B1 protein and potential for induction of autoimmune-mediated

toxicities in our study population.

Provide a Certificate of Analysis for pc3/2B1 plasmid that includes tests for assessing purity, safety, and potency;

Perform qualification studies for the drug substance filling step to ensure that the product candidate for pancreatic cancer remains sterile and stable during the filling process;

Submit an updated batch analysis for the product candidate for the specific lot that will be used for manufacturing all future product candidates;

Provide additional details for the methodology for the Resorufin (CYP2B1) potency and the PrestoBlue cell metabolic assays;

Provide a few examples of common microcatheters that fit the specifications in our Angiography Procedure Manual;

Clarify the language in our Pharmacy Manual regarding proper use of the syringe fill with the product candidate for pancreatic cancer;

Provide a discussion with data for trial of the potential for cellular and humoral immune reactivity against the heterologous rat CYP2B1 protein and potential for induction of autoimmune-mediated toxicities in our study population.

We assembled a scientific and regulatory team

of experts to address the FDA requests.

to address the FDA requests.

That team has been working diligently to complete the items requested by the FDA.

We are in the

latter stages of conducting the studies and providing the information requested by the FDA.

We have completed the pilot study of two pigs

and are evaluating the preliminary data before it commences the larger study of 90 pigs.

The following provides a detailed summary of our

activities to have the clinical hold lifted:

· Additional Regulatory Expertise Added to IND

In addition to ‌our existing team of regulatory experts, we retained Biologics Consulting to perform a regulatory “Gap

Analysis” and to assist us with our resubmission of the IND.

Biologics Consulting is a full-service regulatory and product development

consulting firm for biologics, pharmaceuticals and medical devices and has personnel with extensive FDA experience.

· Stability Studies on Our Clinical Trial Product

Candidate for Pancreatic Cancer .

Stability Studies on Our Clinical Trial Product Candidate for Pancreatic Cancer .

We have successfully completed the required product stability studies.

The timepoints were 3, 6,

9, 12, 18 and 24 months of our product candidate for pancreatic cancer being stored frozen at -80C.

These studies included container closure

integrity testing for certain timepoints.

The timepoints were 3, 6, 9, 12, 18 and 24 months of our product candidate for pancreatic cancer being stored frozen at -80C.

These studies included container closure integrity testing for certain timepoints.

Additional Studies Requested by the FDA .

We have successfully completed various additional studies requested by the FDA, including a stability study on the cells from our MCB

used to make our CypCaps™.

We are already at the 36-month stability timepoint for the cells from our MCB.

We are also collating

existing information on the reproducibility and quality of the filling of the MCB cells into vials ready for CypCaps™ manufacturing.

· Determination of the Exact Sequence of the

Cytochrome P450 2B1 Gene .

We have completed the determination of the exact sequence of the cytochrome P450 2B1 gene inserted at the

site previously identified on chromosome 9 using state-of-the-art nanopore sequencing.

This is a cutting edge, unique and scalable technology

that permits real-time analysis of long DNA fragments.

We have successfully completed various additional studies requested by the FDA, including a stability study on the cells from our MCB used to make our CypCaps™.

Determination of the Exact Sequence of the Cytochrome P450 2B1 Gene .

We have completed the determination of the exact sequence of the cytochrome P450 2B1 gene inserted at the site previously identified on chromosome 9 using state-of-the-art nanopore sequencing.

This is a cutting edge, unique and scalable technology that permits real-time analysis of long DNA fragments.

The result of this analysis of the sequence data confirmed that the genes are intact.

· Confirmation of the Exact Sequence of the

Cytochrome P450 2B1 Gene Insert .

An additional, more detailed analysis of the integration site of the cytochrome P450 2B1 gene from

the augmented HEK293 cell clone that is used in our CypCaps™ was found to be intact.

In this new study, we were able to confirm

the previously determined structure of the integrated transgene sequence using more data points.

These studies also set the stage for

a next step analysis to determine the genetic stability of the cytochrome P450 2B1 gene at the DNA level after multiple rounds of cell

This new study has been completed in which our original Research Cell Bank (“RCB”) cells were compared with cells

from the MCB.

The analysis confirmed that the cytochrome P450 2B1 and the surrounding sequence has remained stable with no changes detected

at the DNA level.

Confirmation of the Exact Sequence of the Cytochrome P450 2B1 Gene Insert .

An additional, more detailed analysis of the integration site of the cytochrome P450 2B1 gene from the augmented HEK293 cell clone that is used in our CypCaps™ was found to be intact.

In this new study, we were able to confirm the previously determined structure of the integrated transgene sequence using more data points.

These studies also set the stage for a next step analysis to determine the genetic stability of the cytochrome P450 2B1 gene at the DNA level after multiple rounds of cell growth.

This new study has been completed in which our original Research Cell Bank (“RCB”) cells were compared with cells from the MCB.

The analysis confirmed that the cytochrome P450 2B1 and the surrounding sequence has remained stable with no changes detected at the DNA level.

Biocompatibility Studies .

involved with 10 biocompatibility studies requested by the FDA, eight of which have been completed successfully.

The remaining studies

are underway or about to start.

The Acute Systemic Toxicity Study of Empty Cellulose Sulphate Capsules in Mice is underway.

The Skin Sensitization

Study of Empty Cellulose Sulphate Capsules in Guinea Pigs is about to start.

These last two studies ‌should be completed well before

the pig study (see below) is completed.

We have been involved with 10 biocompatibility studies requested by the FDA, eight of which have been completed successfully.

To enable the biocompatibility studies to be performed, we had Austrianova Singapore Pte.

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Systemic Toxicity Testing .

the potential toxicity of the capsule component of our product candidate for pancreatic cancer‌ and determined there is no evidence

of toxicity in any of the parameters examined.

We evaluated the potential toxicity of the capsule component of our product candidate for pancreatic cancer‌ and determined there is no evidence of toxicity in any of the parameters examined.

The study also confirmed previous data that shows our capsule material is bioinert.

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This testing is underway.

We are developing and optimizing two reproducible methods for testing and confirming the physical stability

and integrity of our CypCaps™ under extreme pressure.

These studies required the acquisition of new equipment by Austrianova as

well as validation and integration into Austrianova’s Quality Control laboratory.

We are developing and optimizing two reproducible methods for testing and confirming the physical stability and integrity of our CypCaps™ under extreme pressure.

These studies required the acquisition of new equipment by Austrianova as well as validation and integration into Austrianova’s Quality Control laboratory.

Break Force and Glide Testing .

in the process of developing a protocol to measure whether the syringe, attached to the catheter when used to expel the capsules, will

still have a break and glide force that is within the specifications we have established.

We are setting the specifications based on the

syringe/plunger manufacturer’s measured break and glide forces, or alternatively, accepted ranges for glide forces routinely used

in the clinic.

· Capsules Compatibility with the Syringe and

Other Components of the Microcatheter Delivery System .

We are in the process of showing that CypCaps™ are not in any way adversely

affected by the catheters used by interventional radiologists to deliver them into a patient.

Compatibility data is being generated to

demonstrate that the quality of the CypCaps™ is maintained after passage through the planned microcatheter systems.

· CypCaps Capsules and Cell Viability after

Exposure to Contrast Medium .

We have commenced testing to show that exposure of CypCaps™ to the contrast medium interventional

radiologists ‌used to implant the CypCaps™ in a patient has no adverse effect on CypCaps™.

Contrast medium is used to

visualize the blood vessels during implantation.

We are in the process of developing a protocol to measure whether the syringe, attached to the catheter when used to expel the capsules, will still have a break and glide force that is within the specifications we have established.

We are setting the specifications based on the syringe/plunger manufacturer’s measured break and glide forces, or alternatively, accepted ranges for glide forces routinely used in the clinic.

Capsules Compatibility with the Syringe and Other Components of the Microcatheter Delivery System .

We are in the process of showing that CypCaps™ are not in any way adversely affected by the catheters used by interventional radiologists to deliver them into a patient.

Compatibility data is being generated to demonstrate that the quality of the CypCaps™ is maintained after passage through the planned microcatheter systems.

CypCaps Capsules and Cell Viability after Exposure to Contrast Medium .

We have commenced testing to show that exposure of CypCaps™ to the contrast medium interventional radiologists ‌used to implant the CypCaps™ in a patient has no adverse effect on CypCaps™.

Contrast medium is used to visualize the blood vessels during implantation.

Master Drug File Information .

is providing additional detailed confidential information on the manufacturing process, including information on the improvements and

advancements made to our product candidate for pancreatic cancer since the last clinical trials were conducted with respect to reproducibility

Austrianova is providing additional detailed confidential information on the manufacturing process, including information on the improvements and advancements made to our product candidate for pancreatic cancer since the last clinical trials were conducted with respect to reproducibility and safety.

However, Austrianova has not changed the overall physical characteristics of CypCaps™ between the 1st and 2nd generations.

· Additional Documentation Requested by the

We are in the process of updating our IND submission documentation, including our discussion on immunological aspects of our

treatment for LAPC.

· Pig Study .

We have commenced a study in

pigs to address biocompatibility and long-term implantation and dispersion of CypCaps™.

The study has two phases:

(i) a pilot study

and (ii) a 90-pig study.

The first phase has been completed and we are evaluating preliminary data.

We believe this study

should complement the positive data already available from the previous human clinical trials showing the safety of CypCaps™ implantation

in human patients.

The second phase of the pig study may be delayed as a result of supply chain problems, production delays at Austrianova,

and to our curtailment of spending pending review of our programs by the Business Review Committee and the reconstituted Board, including

seeking a new framework for its relationship with SG Austria and its subsidiaries.

Submission of Data to

We are in the process of providing these data to the FDA.

The clinical hold did not reflect any deficiencies of the clinical

trial proposed.

We seek to resolve these non-clinical issues to enable FDA review of a new clinical protocol that reflects the standard

of care for LAPC.

History of the Business

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We are a biotechnology

company focused on developing and preparing to commercialize cellular therapies for cancer, diabetes, and malignant ascites using our

live cell encapsulation technology.

company focused on developing and preparing to commercialize cellular therapies for cancer using our live cell encapsulation technology.

This resulted from entering into the following agreements.

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expiration of the last valid claim of the licensed patent rights.

Bavarian Nordic/GSF and

Bio Blue Bird amended the Bavarian Nordic License Agreement in December 2006 (“First Amendment to Bavarian Nordic/GSF License Agreement”)

to reflect that:

Bavarian Nordic/GSF

and Bio Blue Bird amended the Bavarian Nordic License Agreement in December 2006 (“First Amendment to Bavarian Nordic/GSF License

Agreement”) to reflect that:

(i) the license granted was exclusive;

(ii) a royalty rate increased from 3% to 4.5%;

(iii) Bio Blue Bird assumed the

patent prosecution expenses for the existing patents;

and (iv) to make clear that the license will survive as a license granted by one

of the licensors if the other licensor rejects performance under the Bavarian Nordic License Agreement due to any actions or declarations

of insolvency.

In June 2013, we acquired

from Austrianova an exclusive, worldwide license to use the Cell-in-a-Box® technology and trademark for the development of a

therapy for Type 1 and insulin-dependent Type 2 diabetes (“Diabetes Licensing Agreement”).

This allows us to develop a therapy

to treat diabetes through encapsulation of a human cell line that has been genetically modified to produce, store and release insulin

in response to the levels of blood sugar in the human body.

In October 2014, we entered

into an exclusive, worldwide license agreement with the UTS (“Melligen Cell License Agreement”) in Australia to use insulin-producing

genetically engineered human liver cells developed by UTS to treat Type 1 diabetes and insulin-dependent Type 2 diabetes.

named “Melligen,” were tested by UTS in mice and shown to produce insulin in direct proportion to the amount of glucose in

their surroundings.

In those studies, when Melligen cells were transplanted into immunosuppressed diabetic mice, the blood glucose levels

of the mice became normal.

In other words, the Melligen cells reportedly reversed the diabetic condition.

In December 2014, we

acquired from Austrianova an exclusive, worldwide license to use the Cell-in-a-Box® technology and trademark in combination with

genetically modified non-stem cell lines which are designed to activate cannabinoid prodrug molecules for development of therapies for

diseases and their related symptoms using of the Cell-in-a-Box® technology and trademark (“Cannabis Licensing Agreement”).

This allows us to develop a therapy to treat cancer and other diseases and symptoms through encapsulation of genetically modified cells

designed to convert cannabinoids to their active form using the Cell-in-a-Box® technology and trademark.

In July 2016, we entered

into a Binding Memorandum of Understanding with Austrianova (“Austrianova MOU”).

Pursuant to the Austrianova MOU, Austrianova

will actively work with us to seek an investment partner or partners who will finance clinical trials and further develop products for

our therapy for cancer, in exchange for which we, Austrianova and any future investment partner will each receive a portion of the net

revenue from the sale of cancer products.

(iii) Bio Blue

Bird assumed the patent prosecution expenses for the existing patents;

and (iv) to make clear that the license will survive as a license

granted by one of the licensors if the other licensor rejects performance under the Bavarian Nordic License Agreement due to any actions

or declarations of insolvency.

In October 2016, Bavarian

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into a series of binding term sheet amendments (“Binding Term Sheet Amendments”).

The Binding Term Sheet Amendments provide

that our obligation to make milestone payments to Austrianova is eliminated in their entirety under the:

(i) Cannabis License Agreement;

and (ii) the Diabetes License Agreement, as amended.

The Binding Term Sheet Amendments also provide that our obligation to make milestone

payments to SG Austria for therapies for cancer be eliminated in their entirety.

In addition, the Binding Term Sheet Amendments also provides

that the scope of the Diabetes License Agreement is expanded to include all cell types and cell lines of any kind or description now or

later identified, including, but not limited to, primary cells, mortal cells, immortal cells and stem cells at all stages of differentiation

and from any source specifically designed to produce insulin for the treatment of diabetes.

In addition, one of the

Binding Term Sheet Amendments provides that we will have a 5-year right of first refusal from August 30, 2017 in the event that Austrianova

chooses to sell, transfer or assign at any time during this period the Cell-in-a-Box® technology, tradename and Associated Technologies

(defined below), intellectual property, trade secrets and know-how, which includes the right to purchase any manufacturing facility used

for the Cell-in-a-Box® encapsulation process and a non-exclusive license to use the special cellulose sulfate utilized with the

Cell-in-a-Box® encapsulation process (collectively, “Associated Technologies”);

provided, however, that the Associated

Technologies subject to the right of first refusal do not include Bac-in-a-Box® (which is used to encapsulate bacteria).

Additionally,

for a period of one year from August 30, 2017 one of the Binding Term Sheet Amendments provides that Austrianova will not solicit, negotiate

or entertain any inquiry regarding the potential acquisition of the Cell-in-a-Box® and its Associated Technologies.

The Binding Term Sheet

Amendments further provide that:

(i) the royalty payments on gross sales as specified in the SG Austria APA, the Cannabis License Agreement

and the Diabetes License Agreement are changed to 4%;

and (ii) the royalty payments on amounts received by us from sublicensees on sublicensees’

gross sales under the same agreements are changed to 20% of the amount received us from our sublicensees, provided, however, that

in the event the amounts received by us from sublicensees is 4% or less of sublicensees’ gross sales, Austrianova will receive 50%

of what we receive (up to 2%) and then additionally 20% of any amount we receive over that 4%.

The Binding Term Sheet Amendments provides

that our obligation to make milestone payments to SG Austria for therapies for cancer be eliminated in their entirety.

One of the Binding Term

Sheet Amendments requires that we pay $900,000 to Austrianova ratably over a nine-month period in the amount of two $50,000 payments each

month during the nine-month period on the days of the month to be agreed upon between the parties, with a cure period of 20 calendar days

after receipt by us of written notice from Austrianova that we have failed to pay timely a monthly payment.

As of April 30, 2020, the

$900,000 amount has been paid in full.

The Binding Term Sheet Amendments also provide that Austrianova receives 50% of any other financial

and non-financial consideration received from our sublicensees of the Cell-in-a-Box® technology.

Impact of the COVID-19 Pandemic on Operations

In March 2020, the World

Health Organization declared an outbreak of COVID-19 as a pandemic, and the world’s economies have experienced pronounced effects.

Despite the multiple COVID-19 vaccines globally, there remains uncertainty around the extent and duration of disruption and any future

related financial impact cannot reasonably be estimated at this time.

COVID-19 has caused and may continue to cause significant, industry-wide

delays in clinical trials.

Although we are not yet in a clinical trial, we have filed an IND with the FDA to commence a clinical trial

in LAPC, and this clinical trial may experience delays relating to COVID-19 once commenced, including but not limited to:

(i) delays or

difficulties in enrolling patients in our clinical trial if the FDA allows us to go forward with the trial;

(ii) delays or difficulties

in clinical site activation, including difficulties in recruiting clinical site investigators and clinical site personnel;

in clinical sites receiving the supplies and materials needed to conduct the clinical trial, including interruption in global shipping

that may affect the transport of our clinical trial product;

(iv) changes in local regulations as part of a response to COVID-19 which

may require us to change the ways in which its clinical trial is to be conducted, which may result in unexpected costs, or to discontinue

the clinical trial altogether;

(v) diversion of healthcare resources away from the conduct of clinical trials, including the diversion

of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trial;

(vi) interruption of key

clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state

governments, employers and others, or interruption of clinical trial subject visits and study procedures, the occurrence of which could

affect the integrity of clinical trial data;

(vii) risk that participants enrolled in our clinical trials will acquire COVID-19 while

the clinical trial is ongoing, which could impact the results of the clinical trial, including by increasing the number of observed adverse

(viii) delays in necessary interactions with local regulators, ethics committees, and other important agencies and contractors

due to limitations in employee resources or forced furlough of government employees;

(ix) limitations in employee resources that would

otherwise be focused on the conduct of our clinical trial because of sickness of employees or their families or the desire of employees

to avoid contact with large groups of people;

(x) refusal of the FDA to accept data from clinical trials in affected geographies;

(xi) interruption or delays to our clinical trial activities.

Many of these potential delays may be exacerbated by the impact of COVID-19

in foreign countries where we are conducting these preclinical studies, including India, Europe, Singapore and Thailand.

Further, the various

precautionary measures taken by many governmental authorities around the world in order to limit the spread of COVID-19 has had and may

continue to have an adverse effect on the global markets and global economy, including on the availability and pricing of employees, resources,

materials, manufacturing and delivery efforts and other aspects of the global economy.

COVID-19 could materially disrupt our business

and operations, hamper its ability to raise additional funds or sell securities, continue to slow down the overall economy, curtail consumer

spending, interrupt our supply chain, and make it hard to adequately staff our operations.

Sheet Amendments required us to pay $900,000 to Austrianova.

The Binding Term Sheet Amendments also provide that Austrianova receives

50% of any other financial and non-financial consideration received from our sublicensees of the Cell-in-a-Box® technology.

Market Opportunity

and Competitive Landscape

The three areas we are

developing for live cell encapsulation-based therapies are cancer, diabetes and malignant ascites.

We are developing for

live cell encapsulation-based therapies for cancer.

The Cell-in-a-Box ® capsules

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storage of encapsulated cells and shipment of encapsulated cells over long distances.

We believe our live cell

encapsulation technology may have significant new advantages and opportunities for us in numerous and developing ways.

We believe our live

cell encapsulation technology may have new opportunities for us in numerous and developing ways.

Cancerous diseases may be treated by placing encapsulated drug-converting cells that convert a chemotherapy prodrug near the cancerous tumor;

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Increased efficacy of a chemotherapy prodrug may allow for lower doses of the prodrug to be given to a patient, significantly reducing or even eliminating side effects from the chemotherapy;

Encapsulating genetically modified live cells has the potential for the treatment of systemic diseases of various types, including diabetes;

Multi-layered trade secret protection and marketing exclusivity for our technology exists and is being expanded;

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increasing in most industrialized countries.

The American Cancer Society estimates that in 2022 there will be 62,210 people in the U.S.

diagnosed with pancreatic cancer.

It also estimates 48,830 patients with pancreatic cancer will die in 2022.

Pancreatic cancer accounts

for about 3% of all cancers in the U.S.

The American Cancer Society estimated that in 2023 there were 64,000 people in the U.S.

with pancreatic cancer.

It also estimated 51,000 patients with pancreatic cancer died in 2023.

Pancreatic cancer accounts for about 3%

of all cancers in the U.S.

and about 7% of all cancer deaths.

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institutions and cancer centers all trying to improve the outcome for pancreatic cancer patients.

For example, in a single patient case

report published June 2022 in the New England Journal of Medicine, a study funded by the Providence Portland Medical Foundation in conjunction

with the Earle A.

Chiles Research Institute reported objective regression of metastatic pancreatic cancer using genetically-engineered

autologous T cells.

There are several drugs already available and in the pipelines of pharmaceutical companies worldwide, not the least

of which is the combination of the drugs of Abraxane ® and gemcitabine.

This is the primary FDA-approved combination

of drugs for treating advanced pancreatic cancer.

In Europe and in the U.S., the 4-drug combination FOLFIRINOX has also found use as a

first-line treatment for advanced pancreatic cancer.

Some of our competitive strengths include the Orphan Drug Designation we have been

granted by the FDA and the European Medicines Agency for our pancreatic cancer therapy, our trade secrets, the patents we are seeking

and the licensing agreements we have that are described in this Report.

Yet many of our competitors have substantially greater financial

and marketing resources than we do.

They also have stronger name recognition, better brand loyalty and long-standing relationships with

customers and suppliers.

Our future success will be dependent upon our ability to compete.

We believe our product

candidate for pancreatic cancer has already shown promise through the completion of a Phase 1/2 and a Phase 2 clinical trial in advanced,

inoperable pancreatic cancer carried out in Europe by Bavarian Nordic in 1998 – 1999 and 2000, respectively.

We have a number of competitors

developing Cannabis -based treatments for cancer.

In February 2021, Jazz Pharmaceuticals Public Limited Company (“Jazz”),

a neuroscience and oncology focused company, acquired GW Pharmaceuticals, PLC for $7.2 billion.

Jazz now has two approved cannabinoid

extract-based products:

Epidiolex ® (CBD) oral solution for the treatment of seizures associated with Lennox-Gastaut

syndrome, Dravet syndrome or tuberous sclerosis complex, and Sativex ® (THC/CBD) oromucosal spray for the treatment

of severe multiple sclerosis spasticity.

Sativex ® is currently being studied in conjunction with the Brain Tumour

Charity and the UK National Health Service to examine effectiveness in the treatment of recurrent glioblastoma brain tumor when used alongside

the chemotherapeutic agent temozolomide.

Jazz’s pipeline indications include:

neonatal hypoxic-ischemic encephalopathy, neuropsychiatry

targets, autism spectrum disorders, epilepsy, spasticity and undisclosed targets.

Cannabis Science, Inc.

(“CBIS”) has a number

of indications in its product development pipeline, all pre-clinical, the most advanced being for the treatment of oxidative stress, psychosis/anxiety,

PTSD, and sleep deprivation.

CBIS also has plans to develop treatments for Stage 4 lung cancer and pancreatic cancer.

CNBX Pharmaceuticals

(previously Cannabics Pharmaceuticals, Inc.) (“CNBX”) has a primary research focus on the development of cannabinoid

therapies for the treatment of cancer, mainly cancers of the gastrointestinal tract, skin, breast and prostate.

CNBX’s other Cannabis -based

areas of research include Alzheimer’s disease, mental health conditions, and auto-immune diseases.

Cannabotech Ltd.

(“Cannabotech”),

an Israeli company, in collaboration with Haifa University, is studying an improved method for killing pancreatic and colon cancer cells

using a botanical drug based on an extract of the Cyathus striatus fungus and a cannabinoid extract.

Cannabotech is also

developing therapies for breast, lung and prostate cancers.

In contrast to the work

being done by these companies, we plan to focus on developing specific therapies based on chosen molecules rather than using Cannabis extracts.

We intend to use the Cell-in-a-Box ® technology in combination with genetically-modified cell lines designed to activate

cannabinoid molecules for the targeted treatment of diseases and their related symptoms.

The Centers for Disease

Control and Prevention estimates that in 2022 a total of 37.3 million people in the U.S.

have been diagnosed with diabetes (11.3% of the

population) and another 8.5 million people (23.0% of adults) are undiagnosed.

The diabetes market is estimated in the tens of billions

of dollars, and it continues to grow.

The field of diabetes cell therapy development

is very competitive.

There are numerous companies developing cell-based therapies for diabetes.

These competitors include companies such

as ViaCyte, Inc.

which has two stem cell-based product candidates in Phase 1/2 clinical trials for type 1 diabetes:

PEC-Direct, which

is a pouch that is “open” to the surrounding vasculature and requires the use of immunosuppressive drugs, and PEC-Encap, which

is a pouch that contains the implanted cells and prevents contact with the vasculature and immune cells but still allows passage of nutrients

and proteins to travel between the cells inside the device and blood vessels which grow along the outside of the device.

reported to generally prevent immune rejection and immune sensitization.

Conceptually, PEC-Encap has similarities with Cell-in-a-Box®.

Other companies developing some form of encapsulation-based diabetes therapy include Vertex Pharmaceuticals Inc., Defymed, Diatranz Otsuka

Limited, Seraxis, Inc., Unicyte AG, Sernova Corp., Betalin Therapeutics Ltd., Novo Nordisk, Beta-O2 Technologies Ltd., Eli Lilly &

in collaboration with Sigilon Therapeutics, Inc.

and the Diabetes Research Institute Foundation.

Although such competition exists in the diabetes

space, we believe these other companies are developing encapsulation-based therapies using materials and methodologies that produce capsules

or devices that are far less robust than ours or that are associated with other problems, such as extremely short shelf-life of the product

and/or fibrotic overgrowth of their encapsulation products when implanted in the body.

We believe these properties are not characteristic

of the Cell-in-a-Box® capsules.

Our product candidate for diabetes has shown promise.

Completed research studies have resulted

in positive responses in animal models using the Melligen cells.

We believe we are in a strong competitive position considering our unique

encapsulation technology and the genetically modified cells that we have the exclusive worldwide license to use in most industrialized

Malignant ascites occurs when cancer cells irritate

the peritoneum causing an overproduction of ascitic fluid which causes the abdomen to swell as fluid accumulates.

It is more likely to

develop in patients who have ovarian, uterine, cervical, colorectal, stomach, pancreatic, breast and liver cancers.

In most patients,

development of malignant ascites is a sign of advanced disease and poor prognosis.

Malignant ascites can result in impairment to the quality

of life of a cancer patient.

In addition to abdominal distention, pain and difficulty breathing, it may also cause nausea, vomiting, early

satiety, lower extremity edema, weight gain and reduced mobility.

These symptoms can interfere with a patient’s ability to eat,

to walk and to perform daily activities.

They also reduce a patient’s ability to withstand anti-cancer therapies, potentially reducing

We are developing a therapy to delay the production

and accumulation of malignant ascites using our cancer therapy (i.e., ifosfamide converting encapsulated live cells).

Preclinical studies

are underway in Germany, and, if successful, we plan to seek FDA approval to conduct a Phase 1 study.

Typical treatments for malignant

ascites include paracentesis, percutaneously implanted catheters, peritoneal ports and peritoneovenous shunts.

These treatments can be

painful, ineffective and expensive.

There is currently no available treatment that delays the production and accumulation of malignant

ascites fluid, and we know of no competitors in this area.

There are several drugs already available

and in the pipelines of pharmaceutical companies worldwide, not the least of which is the combination of the drugs of Abraxane ® and

This is the primary FDA-approved combination of drugs for treating advanced pancreatic cancer.

In Europe and in the U.S.,

the 4-drug combination FOLFIRINOX has also found use as a first-line treatment for advanced pancreatic cancer.

Some of our competitive

strengths include the Orphan Drug Designation we have been granted by the FDA and the European Medicines Agency for our pancreatic cancer

Yet many of our competitors have substantially greater financial and marketing resources than we do.

They also have stronger

name recognition, better brand loyalty and long-standing relationships with customers and suppliers.

Our future success will be dependent

upon our ability to compete.

Material Agreements

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Addendum and the Clarification Agreement.

The Third Addendum requires us to make the following payments for the purchased assets;

The Third Addendum required us to make the following payments for the purchased assets;

payments were timely made in full under the payment deadlines set forth in the Third Addendum:

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have entered a manufacturing agreement with SG Austria for the manufacture of the pancreatic cancer clinical trial product to treat LAPC.

The Manufacturing Framework Agreement requires us to pay Austrianova a one-time manufacturing setup fee in the amount of $647,000, of

The Manufacturing Framework Agreement required us to pay Austrianova a one-time manufacturing setup fee in the amount of $647,000, of

which 50% is required to be paid on the effective date of the Manufacturing Framework Agreement and 50% is required to be paid three months

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increases according to the annual inflation rate in the country in which the encapsulated cell products are manufactured.

We placed and

have received an order to produce 400 vials for our clinical trial to treat LAPC.

Austrianova has been paid the full amount for the order.

The Third Addendum also requires us to make future

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“History of the Business.”

Diabetes Licensing

Under the Diabetes Licensing Agreement, we are

required to make a payment of $2,000,000 in two equal payments of $1,000,000 each.

We made our first $1,000,000 payment on October 30,

Our second payment of $1,000,000 was made on February 25, 2014.

The Diabetes Licensing Agreement requires us to

pay Austrianova, pursuant to a manufacturing agreement to be entered between the parties, a one-time manufacturing setup fee in the amount

of approximately $600,000, of which 50% is required to be paid on the signing of a manufacturing agreement for a product and 50% is required

to be paid three months later.

In addition, the Diabetes Licensing Agreement requires us to pay a manufacturing production fee, which

is to be defined in the manufacturing agreement, for producing the final encapsulated cell product of approximately $600.00 per vial of

300 capsules after production, with a minimum purchased batch size of 400 vials of any Cell-in-a-Box® encapsulation-based product.

All costs for encapsulated cell products will be subject to an annual increase equal to the published rate of inflation in the country

of manufacture of the vials.

The Diabetes Licensing Agreement requires us to

make future royalty and milestone payments as follows:

Ten percent royalty of gross sales of all products we sell;

Twenty percent royalty of the amount received by us from a sub-licensee on its gross sales;

Milestone payments of $100,000 within 30 days of beginning the first pre-clinical experiments using the encapsulated cells;

$500,000 within 30 days after enrollment of the first human patient in the first clinical trial;

$800,000 within 30 days after enrollment of the first human patient in the first Phase 3 clinical trial and;

$1,000,000 within 90 days after having a NDA or a BLA approved by the FDA or a MAA approved by the EMA in Europe, or its equivalent based on the country in which it is accepted for each product.

The license under the Diabetes Licensing Agreement,

as amended, may be terminated and all rights will revert to Austrianova if any of the following milestone events do not occur within the

following timeframes, subject to all the necessary and required research having been successful and the relevant product being sufficiently

prepared to enter a clinical trial:

If we fail to enter a research program with the technology in the scope of the license providing a total funding equal to or greater than $400,000 within three years of June 25, 2013, the effective date of the Diabetes Licensing Agreement (we have met this requirement);

If we fail to enter a clinical trial or its equivalent for a product within seven years of the effective date of the Diabetes Licensing Agreement.

In May 2018, we entered into amendments to the

Diabetes Licensing Agreement.

For a full description of these amendments, see Item 1.

“History of the Business.”

Cannabis Licensing

Pursuant to the Cannabis Licensing Agreement,

we acquired from Austrianova an exclusive worldwide license to use the Cell-in-a-Box® trademark and its associated technology

with genetically modified non-stem cell lines which are designed to activate cannabinoids to develop therapies involving Cannabis with

a right to sublicense.

Under the Cannabis Licensing Agreement, we are

required to pay Austrianova an initial upfront payment of $2,000,000 (“Upfront Payment”).

We have the right to make periodic

monthly partial payments of the Upfront Payment in amounts to be agreed upon between the parties prior to each such payment being made.

Under the Cannabis Licensing Agreement, the Upfront Payment must be paid in full by no later than June 30, 2015.

The parties amended the

Cannabis Licensing Agreement twice pursuant to which the balance of the Upfront Payment is to be paid by June 30, 2016.

We have paid the

Upfront Payment of $2,000,000 in full.

The Cannabis Licensing Agreement requires us to

pay Austrianova, pursuant to a manufacturing agreement to be entered between the parties, a one-time manufacturing setup fee in the amount

of $800,000, of which 50% is required to be paid on the signing of a manufacturing agreement for a product and 50% is required to be paid

three months later.

In addition, the Cannabis Licensing Agreement requires us to pay a manufacturing production fee, which is to be defined

in the manufacturing agreement, for producing the final encapsulated cell product of $800 per vial of 300 capsules after production with

a minimum purchased batch size of 400 vials of any Cell-in-a-Box® product.

All costs for encapsulated cell products, the manufacturing

setup fee and the manufacturing production fee will be subject to annual increases, in accordance with the inflation rate in the country

in which the encapsulated cell products are manufactured.

The Cannabis Licensing Agreement requires us to

make future royalty and milestone payments as follows:

Ten percent royalty of the gross sale of all products sold by us;

Twenty percent royalty of the amount received by us from a sublicense on its gross sales;

Milestone payments of $100,000 within 30 days of beginning the first pre-clinical experiments using the encapsulated cells;

$500,000 within 30 days after enrollment of the first human patient in the first clinical trial;

$800,000 within 30 days after enrollment of the first human patient in the first Phase 3 clinical trial;

and $1,000,000 within 90 days after having a NDA or a BLA approved by the FDA or a MAA approved by the EMA or its equivalent based on the country in which it is accepted for each product.

The license under the Cannabis Licensing Agreement,

as amended, may be terminated and all rights will revert to Austrianova if any of the following milestone events do not occur within the

following timeframes:

If we do not enter a research program involving the scope of the license within three years of December 1, 2014, the effective date of the Cannabis Licensing Agreement (we have met this requirement);

If we do not enter a clinical trial or its equivalent for a product within 7 years of the effective date of the Cannabis Licensing Agreement.

In May 2018, we entered into amendments to the

Cannabis Licensing Agreement.

For a full description of these amendments, see Item 1.

“History of the Business.”

Melligen Cell License

The Melligen Cell License Agreement requires that

we pay royalty, milestone and patent costs to UTS as follows:

Six percent of gross exploitation revenue on product sales;

Twenty-five percent of gross revenues if the product is sublicensed by us;

Milestone payments of AU$ 50,000 at the successful conclusion of a preclinical study, AU$ 100,000 at the successful conclusion of a Phase 1 clinical trial, AU$ 450,000 at the successful conclusion of a Phase 2 clinical trial, and AU$ 3,000,000 at the successful conclusion of a Phase 3 clinical trial;

Patent costs of fifteen percent of the costs paid by UTS to prosecute and maintain patents related to the licensed intellectual property.

In the event of a default under the Melligen Cell

License Agreement, the non-defaulting party may immediately terminate the agreement by notice in writing to the defaulting party if:

the default has continued for not less than 14 days or occurred more than 14 days earlier and has not been remedied;

(ii) the non-defaulting

party serves upon the defaulting party notice in writing requiring the default to be remedied within 30 days of such notice, or such greater

number of days as the non-defaulting party may in its discretion allow, and (iii) the defaulting party has failed to comply with the notice

referred to in (ii) above.

The Melligen Cell License Agreement was amended

in April 2016 to change the name of the licensee to our current name and clarify certain ambiguities in the agreement.

We are required

to pay the Melligen cell patent prosecution costs and to pay to UTS a patent administration fee equal to 15% of all amounts paid by UTS

to prosecute and maintain patents related to the Melligen cells.

In August 2017, we entered into the Binding Term

Sheet pursuant to which the parties reached an agreement to amend certain provisions in the SG Austria APA, the Diabetes Licensing Agreement

and the Cannabis Licensing Agreement.

In May 2018, we entered into agreements with SG

Austria and Austrianova to amend certain provisions of the SG Austria APA, the Diabetes Licensing Agreement and the Cannabis Licensing

Agreement pursuant to the Binding Term Sheet.

For a full description of these amendments, see Item 1.

“History of the Business.”

Sources and Availability

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The entire encapsulation

process relating to the encapsulation of the cells for the oncology and diabetes-based therapies we are developing is to be carried out

by Austrianova.

Austrianova is the sole source of our product candidates.

Austrianova is responsible for acquiring all of the necessary

raw materials used in this process, including the cellulose sulfate necessary for encapsulating the live cells, a process proprietary

to Austrianova.

Austrianova from time to time has experienced significant supply chain delays, and we believe Austrinova may also be experiencing

liquidity issues as well.

If Austrianova is unwilling or unable to perform such manufacturing for us, we may not be able to locate a replacement

manufacturer for our product candidates.

Patents, Intellectual Property and Trade Secrets

process relating to the encapsulation of the cells for the oncology is to be carried out by Austrianova.

Austrianova is the sole source

of our product candidates.

Austrianova is responsible for acquiring all of the necessary raw materials used in this process, including

the cellulose sulfate necessary for encapsulating the live cells, a process proprietary to Austrianova.

Austrianova from time to time

has experienced significant supply chain delays, and we believe Austrianova may also be experiencing liquidity issues as well.

If Austrianova

is unwilling or unable to perform such manufacturing for us, we may not be able to locate a replacement manufacturer for our product candidates.

Intellectual Property and Trade Secrets

Intellectual property and patent protection are

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product candidates as needed.

We license technology and trademarks relating to three areas:

We license technology and trademarks relating to two areas:

(i) live cell encapsulation with cells that

express cytochrome P450 where the capsule is permeable to prodrug molecules and the cells are retained within the capsules;

(ii) treatment

of solid cancerous tumors and (ii) encapsulation of cells for producing retroviral particles for gene therapy.

We also have exclusive

licensing rights to patents, trademarks and know-how using Cell-in-a-Box® technology in the diabetes field and in the treatment of

diseases and related conditions using cannabinoids.

express cytochrome P450 where the capsule is permeable to prodrug molecules and the cells are retained within the capsules and (ii) treatment

of solid cancerous tumors.

Litigation may be required to protect our product

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All of our research and development (“R&D”) work is handled by our consultants.

Reverse Stock Split

Effective July 12, 2021, we filed a Certificate

of Change with the Nevada Secretary of State that authorized a 1:1500 reverse stock split of our common stock.

The reverse stock split

resulted in reducing the authorized number of shares of our common stock from 50 billion to 33,333,334 with a par value of $0.0001 per

Any fractional shares resulting from the reverse stock split were rounded up to the next whole share.

All warrants, option, share

and per share information in this Quarterly Report gives retroactive effect to such 1:1500 reverse stock split.

Our Corporate Information

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In 2013, we restructured our operations to focus on biotechnology.

The restructuring resulted in us focusing our efforts developing a

novel, effective and safe way to treat cancer and diabetes.

The restructuring resulted in us focusing our efforts to develop a

novel, effective and safe way to treat cancer.

In January 2015, we changed our name from Nuvilex, Inc.

to PharmaCyte Biotech,

to reflect the nature of our current business.

to PharmaCyte Biotech, Inc.

reflect the nature of our current business.

Our corporate headquarters are located at 3960

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to which we post copies of our press releases as well as additional information about us.

Our filings with the SEC are available free

of charge through our website as soon as reasonably practicable after being electronically filed with or furnished to the SEC.

contained in our website is not a part of, nor incorporated by reference into, this Report or our other filings with the SEC, and should

not be relied upon.

Our filings with the Commission are available

free of charge through our website as soon as reasonably practicable after being electronically filed with or furnished to the Commission.

Information contained in our website is not a part of, nor incorporated by reference into, this Report or our other filings with the Commission,

and should not be relied upon.

Government Regulation and Product Approval

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in other countries will also be the subject of extensive regulation, although there can be important differences with the U.S.

of obtaining regulatory marketing approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes

and regulations will require the expenditure of substantial time and financial resources and may not be successful.

of obtaining regulatory marketing approvals and the subsequent compliance with applicable federal, state, local and foreign statutes and

regulations will require the expenditure of substantial time and financial resources and may not be successful.

Regulatory approval, when obtained, may be limited

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products and biologics are also subject to other federal, state and local statutes and regulations.

A failure to comply with any requirements

during the product development, approval, or post-approval periods, may lead to administrative or judicial sanctions.

These sanctions

could include the imposition by the FDA or by an Institutional Review Board (“IRB”) of a hold on clinical trials, refusal

to approve pending marketing applications or supplements, withdrawal of approval, warning letters, product recalls, product seizures,

total or partial suspension of production or distribution, injunctions, fines, civil penalties or criminal prosecution.

A failure to comply with any applicable

requirements during the product development, approval, or post-approval periods, may lead to administrative or judicial sanctions.

sanctions could include, among other things, the imposition by the FDA or by an Institutional Review Board (“IRB”) of a hold

on clinical trials, FDA refusal to approve pending marketing applications or supplements, withdrawal of previously granted approval, warning

letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties

or criminal prosecution.

The steps required before a new drug or biologic

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generally include:

· completion of preclinical studies and formulation

studies in compliance with the FDA’s Good Laboratory Practices (“GLP”), protocols and regulations;

· satisfactory completion of an FDA inspection

of the manufacturing facilities at which the investigational product candidate is produced to assess compliance with cGMP and proof that

the facilities, methods and controls are adequate;

· submission to the FDA of an IND to support human

clinical testing in the U.S.;

· approval by an IRB at each clinical site before

a trial may be initiated at that site;

· performance of adequate and well-controlled clinical

trials in accordance with federal regulations and with Good Clinical Practices (“GCP”) to establish the safety and efficacy

of the investigational product candidate for each target indication;

· Submission to the FDA of a New Drug Application

(“NDA”) or a drug or Biologics License Application (“BLA”) for a biologic such as the therapies we are developing;

· satisfactory completion of an FDA Advisory Committee

review, if applicable;

completion of preclinical studies and formulation studies in compliance with the FDA’s Good Laboratory Practices (“GLP”), protocols and regulations;

submission to the FDA of an IND to support human clinical testing in the U.S.;

approval by an IRB at each clinical site before a trial may be initiated at that site;

performance of adequate and well-controlled clinical trials in accordance with Good Clinical Practices (“GCP”) and other clinical-trial related regulations to evaluate the safety and efficacy of the investigational product candidate for each target indication;

submission to the FDA of a New Drug Application (“NDA”) for a drug or Biologics License Application (“BLA”) for a biologic for marketing approval, including payment of application user fees

satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the investigational product candidate is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the product candidate’s identity, strength, quality and purity;

potential FDA audit of the clinical trial sites to assure compliance with GCP and the integrity of the clinical data submitted in support of the NDA or BLA;

satisfactory completion of an FDA Advisory Committee review, if applicable;

FDA review and approval of the NDA or BLA.

Clinical Development

Before a drug or biologic product may be given

to humans, it must undergo preclinical testing.

Preclinical tests include laboratory evaluation of a product candidate’s chemical

and biological activities and animal studies to assess potential safety and efficacy in humans.

The results of these studies must be submitted

to the FDA as part of an IND which must be reviewed by the FDA for safety and other considerations before testing can begin in humans.

Before a drug or biological product candidate

may be tested in human subjects, it must undergo preclinical testing.

Preclinical tests generally include laboratory evaluations of a

product candidate’s chemical and biological activities, formulation and stability, as well as studies to evaluate toxicity in animals

and potential for other adverse events, which support subsequent clinical testing and rationale for subsequent therapeutic use.

The Consolidated Appropriations Act for 2023,

signed into law on December 29, 2022, (P.L.

117-328) amended both the FDCA and PHSA to specify that nonclinical testing for drugs and

biologics, respectively, may, but is not required to, include in vivo animal testing.

According to the amended language, a sponsor

may fulfill nonclinical testing requirements by completing various in vitro assays (e.g., cell-based assays, organ chips, or microphysiological

systems), in silico studies (i.e., computer modeling), other human or non-human biology-based tests (e.g., bioprinting), or in

vivo animal tests.

The results of these studies must be submitted, together with manufacturing information, analytical data, any available

clinical data or literature and a proposed clinical protocol, to the FDA as part of an IND which must be reviewed by the FDA for safety

and other considerations and become effective before testing can begin in humans.

Some long-term nonclinical testing, such as animal tests

of reproductive adverse events and carcinogenicity, may continue after an IND for an investigational drug or biologic candidate is submitted

to the FDA and human clinical trials have been initiated.

An IND is a request for authorization from the

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This authorization is required before interstate shipping and administration

can commence of any new drug or biologic product destined for use in humans in the U.S.

A 30-day waiting period after the submission of

each IND is required before commencement of clinical testing in humans.

If the FDA has neither commented on nor questioned the IND within

this 30-day period after submission of the IND, the clinical trial proposed in the IND may begin.

A clinical trial involves the administration

of the investigational product candidate to patients under the supervision of qualified investigators following GCP standards.

These international

standards are meant to protect the rights and health of patients and to define the roles of clinical trial sponsors, administrators and

A clinical trial is conducted under protocols that detail the parameters to be used in monitoring safety, and the efficacy criteria

to be evaluated.

can commence for any drug or biologic product candidate destined for use in humans in the U.S.

A 30-day waiting period after the submission

of each IND is required before commencement of clinical testing in humans.

An IND automatically becomes effective 30 days after receipt

by the FDA, unless before that time the FDA raises concerns or questions related to one or more proposed clinical trials and places the

clinical trial on a clinical hold.

In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical

trial can begin.

As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.

Clinical holds may

also be imposed by the FDA at any time before or during studies due to safety concerns or non-compliance.

A clinical trial involves the administration of

the investigational product candidate to patients under the supervision of qualified investigators following GCP standards, which include

the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial (unless

the consent requirement has been waived by an IRB) along with the requirement to ensure that the data and results reported fom the clinical

trials are credible and accurate.

GCP requirements are meant to protect the rights and health of patients and to define the roles of clinical

trial sponsors, administrators and monitors.

A clinical trial is conducted under a protocol that details, among other things, the objectives

of the trial, the criteria for determining subject eligibility, the dosing plan, the parameters to be used in monitoring safety, the procedure

for timely reporting of adverse events, and the efficacy criteria to be evaluated.

Each protocol involving testing on U.S.

patients and subsequent protocol amendments must be submitted to the FDA as part

The product candidates in our pipeline are at

various stages of preclinical development.

The path to regulatory approval includes three phases of clinical trials in which we collect

data to support an application to regulatory agencies to allow us to ultimately market a product for treatment of a specified disease.

There are many difficulties and uncertainties inherent in research and development of new products, and these can conceivably result in

a high rate of failure.

To bring a drug or biologic from the discovery phase to regulatory approval, and ultimately to market, takes years

and the costs to do so are significant.

Failure can occur at any point in the process, including after the product is approved, based

on post-marketing factors.

New product candidates that appear promising in development may fail to reach the market or may have only limited

commercial success because of efficacy or safety concerns, inability to obtain necessary regulatory approvals, limited scope of approved

uses, reimbursement challenges, difficulty or excessive costs of manufacture, alternative therapies or infringement of the patents or

intellectual property rights of others.

Uncertainties in the approval process of the regulatory agencies can result in delays in product

launches and lost market opportunities.

Consequently, it is exceedingly difficult to predict which products will ultimately be submitted

for approval, which have the highest likelihood of obtaining approval and which will be commercially viable and generate profits.

results in preclinical or clinical studies may not be an accurate predictor of the ultimate safety or effectiveness of a product candidate.

subsequent protocol amendments must be submitted to the FDA as part of the IND.

In addition, an IRB representing each institution

that is participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution,

and the IRB must thereafter conduct a continuing review and re-approve the trial at least annually.

The IRB must review and approve, among

other things, the trial protocol and informed consent information to be provided to clinical trial subjects.

An IRB must operate in compliance

with FDA regulations.

Information about certain clinical trials, including details of the

protocol and eventually study results, also must be submitted within specific time frames to the National Institutes of Health, or NIH,

for public dissemination on the ClinicalTrials.gov data registry.

Information related to the product, patient population, phase of investigation,

study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial.

Sponsors are also obligated to disclose the results of their clinical trials after completion.

Disclosure of the results of these trials

can be delayed in some cases for up to two years after the date of completion of the trial.

Failure to timely register a covered clinical

study or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant

party from receiving future grant funds from the federal government.

Department of Health and Human Services' Final Rule and

NIH's complementary policy on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and the government

has begun enforcing those requirements against non-compliant clinical trial sponsors.

Human clinical trials are typically conducted

in three sequential phases that may overlap or be combined:

Phase 1 Clinical Trial :

A Phase 1 clinical

trial begins when a regulatory agency, such as the FDA, allows initiation of the clinical investigation of a new product candidate.

clinical trial studies a product candidate’s safety profile and may include a preliminary determination of a product candidate’s

safe dosage range.

The Phase 1 clinical trial can also determine how a drug is absorbed, distributed, metabolized and excreted by the

body and, therefore, the potential duration of its action.

The product candidate

is initially introduced into health human subjects and tested for safety, and such trials typically include a preliminary determination

of a product candidate’s safe dosage range.

A Phase 1 clinical trial also determines how a drug is absorbed, distributed, metabolized

and excreted by the body and, therefore, the potential duration of its action.

In the case of some products for severe or life-threatening

diseases, such as cancer, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial

human testing is often conducted in patients.

Phase 2 Clinical Trial :

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these patients can have a specific targeted disease.

An initial evaluation of the

product candidate’s effectiveness on patients is performed.

Additional information on the product candidate’s safety and dosage

range is obtained.

For many diseases, a Phase 2 clinical trial can include up to several hundred patients.

The product candidate is administered

to such patients to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific

indications and to determine dosage tolerance and optimal dosage.

Phase 2 clinical trials are typically well-controlled and closely monitored.

Phase 3 Clinical Trial :

A Phase 3 clinical

trial is typically rigorously controlled, conducted in multiple centers and involves a larger target patient population that can consist

of from several hundred to thousands of patients (depending on the disease being studied) to ensure that study results are statistically

During a Phase 3 clinical trial, physicians monitor patients to determine efficacy and to gather further information on safety.

A Phase 3 clinical trial is designed to generate all the clinical data necessary to apply for marketing approval to a regulatory agency.

The decision to terminate development of an investigational

product candidate may be made by either a health authority body, such as the FDA, by IRB/ethics committees, or by the sponsor for various

The FDA may order the temporary or permanent discontinuation of a clinical trial at any time, or impose other sanctions, if it

believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents an unacceptable risk to

the patients enrolled in the trial.

In some cases, a clinical trial is overseen by an independent group of qualified experts organized

by the trial sponsor, or the clinical monitoring board.

This group provides authorization for whether a trial may move forward at designated

These decisions are based on the limited access to data from the ongoing trial.

The suspension or termination of development

can occur during any phase of a clinical trial if it is determined that the patients are being exposed to an unacceptable health risk.

There are also requirements for the registration of an ongoing clinical trial of a product candidate on public registries and the disclosure

of certain information pertaining to the trial, as well as clinical trial results after completion.

Such trials are

undertaken with an expanded patient population to further evaluate dosage, clinical efficacy and safety in an expanded patient population,

often at geographically dispersed clinical study sites.

These studies are intended to establish the overall risk-benefit ratio of the

product candidate and provide, if appropriate, an adequate basis for product labeling.

These trials may include comparisons with placebo

and/or other comparator treatments.

The duration of treatment is often extended to mimic the actual use of a product during marketing.

Post-approval trials, sometimes referred to as

Phase 4 clinical trials, may be conducted after initial marketing approval.

These trials are used to gain additional experience from the

treatment of patients in the intended therapeutic indication.

In certain instances, the FDA may mandate the performance of Phase 4 clinical

trials as a condition of approval of an NDA or BLA.

Congress also recently amended the FDCA, as part

of the Consolidated Appropriations Act for 2023, in order to require sponsors of a Phase 3 clinical trial, or other “pivotal study”

of a new drug or biologic to support marketing authorization, to design and submit a diversity action plan for such clinical trial.

action plan must include the sponsor’s diversity goals for enrollment, as well as a rationale for the goals and a description of

how the sponsor will meet them.

Sponsors must submit a diversity action plan to the FDA by the time the sponsor submits the relevant clinical

trial protocol to the agency for review.

The FDA may grant a waiver for some or all of the requirements for a diversity action plan.

is unknown at this time how the diversity action plan may affect Phase 3 trial planning and timing or what specific information FDA will

expect in such plans, but if the FDA objects to a sponsor’s diversity action plan, it may delay trial initiation.

Progress reports detailing the results of the

clinical trials must be submitted at least annually to the FDA and more frequently if serious adverse events occur.

The decision to terminate

development of an investigational product candidate may be made by either a health authority body, such as the FDA, by IRB/ethics committees,

or by the sponsor for various reasons.

The FDA may order the temporary or permanent discontinuation of a clinical trial at any time, or

impose other sanctions, if it believes that the clinical trial either is not being conducted in accordance with FDA requirements or presents

an unacceptable risk to the patients enrolled in the trial.

Similarly, an IRB can suspend or terminate approval of a clinical trial at

its institution if the clinical trial is not being conducted in accordance with the clinical protocol, GCP, or other IRB requirements

or if the product candidate has been associated with unexpected serious harm to patients.In some cases, a clinical trial is overseen by

an independent group of qualified experts organized by the trial sponsor, known as a data safety monitoring board (or DSMB).

provides authorization for whether a trial may move forward at designated checkpoints based on access that only the group maintains to

available data from the study.

A sponsor may be able to request a special protocol

assessment (“SPA”), the purpose of which is to reach agreement with the FDA on the Phase 3 clinical trial protocol design

and analysis that will form the primary basis of an efficacy claim.

A sponsor meeting the regulatory criteria may make a specific request

for a SPA and provide information regarding the design and size of the proposed clinical trial.

A SPA request must be made before the

proposed trial begins.

assessment (“SPA”), the purpose of which is to reach agreement with the FDA on the Phase 3 trial protocol design, clinical

endpoints and statistical analysis that will form the primary basis of an efficacy claim.

A sponsor meeting the regulatory criteria may

make a specific request for a SPA and provide information regarding the design and size of the proposed clinical trial.

A SPA request

must be made before the proposed trial begins.

All open issues must be resolved before the trial begins.

If a written agreement is reached, it will be documented

and made part of the record.

The agreement will be binding on the FDA and may not be changed by the sponsor or the FDA after the trial

begins, except with the written agreement of the sponsor and the FDA or if the FDA determines that a substantial scientific issue essential

to determining the safety or efficacy of the product candidate was identified after the testing began.

A SPA is not binding if new circumstances

arise, and there is no guarantee that a study will ultimately be adequate to support an approval even if the study is subject to a SPA.

If a written agreement is reached,

it will be documented and made part of the administrative record.

The agreement will be binding on the FDA and may not be changed by the

sponsor or the FDA after the trial begins, except with the written agreement of the sponsor and the FDA or if the FDA determines that

a substantial scientific issue essential to determining the safety or efficacy of the product candidate was identified after the testing

A SPA is not binding if new circumstances arise, such as if the FDA identifies, after the clinical trial begins, new information

that may cause the scientific community and the agency to question or reject the assumptions supporting the SPA, or if the sponsor fails

to follow the protocol that was agreed upon with the FDA, and there is no guarantee that a study trial will ultimately be adequate to

support an approval even if the study is subject to a SPA.

Having a SPA does not guarantee that a product candidate will receive FDA approval.

Assuming successful completion of all required

testing in accordance with all applicable regulatory requirements, detailed investigational product candidate information is submitted

to the FDA in the form of an NDA or BLA to request regulatory approval for the product in the specified indication.

Concurrent with clinical trials, companies usually

complete additional nonclinical studies and must also develop additional information about the physical characteristics of the drug or

biological product and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things,

the manufacturer must develop methods for testing the identity, strength, quality, potency and purity of the final drug or biological

For biological products in particular, the PHSA emphasizes the importance of manufacturing control for products whose attributes

cannot be precisely defined in order to help reduce the risk of the introduction of adventitious agents.

Additionally, appropriate packaging

must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable

deterioration over its shelf life.

Assuming successful completion of all required testing in accordance with all applicable regulatory

requirements, detailed investigational product candidate information is submitted to the FDA in the form of an NDA or BLA to request regulatory

approval for the product in the specified indication.

New Drug Applications and Biologic Licensing

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and clinical trials, including negative or ambiguous results as well as positive findings, together with detailed information relating

to the product’s chemistry, manufacturing and controls, as well as the proposed labeling for the product, among other things.

can come from company-sponsored clinical trials intended to test the safety and effectiveness of a product, or from several alternative

sources, including studies initiated by investigators.

To support marketing approval, the data submitted must be sufficient in quality

and quantity to establish the safety and effectiveness of the investigational product candidate to the satisfaction of the FDA.

to the product’s chemistry, manufacturing and controls, as well as proposed labeling, among other things.

Data can come from company-sponsored

clinical trials intended to test the safety and effectiveness of a product, or from several alternative sources, including studies initiated

by investigators.

To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety

and effectiveness of the investigational product candidate to the satisfaction of the FDA.

In most cases, the NDA, in the case of a drug,

or BLA, in the case of a biologic, must be accompanied by a substantial user fee.

There may be some instances in which the user fee is

The FDA will initially review the NDA or BLA for completeness before it accepts the application for filing.

The FDA has 60 days

from its receipt of an NDA or BLA to determine whether the application will be accepted for filing based on the agency’s threshold

determination that it is sufficiently complete to permit substantive review.

After the NDA or BLA submission is accepted for filing, the

FDA begins an in-depth review.

These fees are typically adjusted annually, but exemptions

and waivers may be available under certain, narrow circumstances.

The FDA will initially review the NDA or BLA for completeness before

it accepts the application for filing.

The FDA has 60 days from its receipt of an NDA or BLA to determine whether the application will

be accepted for filing based on the agency’s threshold determination that it is sufficiently complete to permit substantive review.

The FDA may request additional information rather than accept an NDA or BLA for filing, in which case, the application must be resubmitted

with the requested information.

The resubmitted application is also subject to review before the FDA accepts it for filing.

After the NDA or BLA submission is accepted for

filing, the FDA begins an in-depth review.

The FDA has agreed to certain performance goals in the review of NDAs and BLAs.

During a normal review

cycle, a product is given an FDA action or Prescription Drug User Fee Act (“PDUFA”) date within 12 months of the submission

if the submission is accepted.

The FDA can extend this review by three months to consider certain late-submitted information or information

intended to clarify information already provided in the submission.

The FDA reviews the NDA or BLA to determine, among other things, whether

the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMP

The FDA may refer applications for novel product candidates which present difficult questions of safety or efficacy to an advisory

This is typically a panel that includes clinicians and other experts for review, evaluation and a recommendation as to whether

the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but

it considers such recommendations carefully when making decisions.

Under the goals

and policies agreed to by the FDA under the Prescription Drug User Fee Act (“PDUFA”), for original NDAs and BLAs, the FDA

has ten months from the filing date in which to complete its initial review of a standard application and respond to the applicant, and

six months from the filing date for an application with "priority review." For all BLAs and new molecular entity (“NME”)

NDAs, the ten and six-month time periods run from the filing date;

for all other original applications, the ten and six-month time periods

run from the submission date.

However, the FDA can extend such review periods by three months to consider new information or in the case

of a clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.

The FDA reviews the NDA or BLA to determine, among

other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in

accordance with cGMP standards.

The FDA may refer applications for novel product candidates which present difficult questions of safety

or efficacy to an advisory committee.

This is typically a panel of independent experts, including clinicians and other scientific experts,

that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.

FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Before approving an NDA or a BLA, the FDA will

inspect the facilities at which the product is manufactured.

The FDA will not approve the product candidate unless it determines that

the manufacturing processes and facilities follow cGMP requirements and are adequate to assure consistent production of the product within

required specifications.

Manufacturers of human cellular or tissue-based biologics also must comply with the FDA’s Good Tissue Practices

(“GTP”), as applicable, and with the general biological product standards.

typically inspect the facilities at which the product is manufactured.

The FDA will not approve the product candidate unless it determines

that the manufacturing processes and facilities substantially comply with cGMP requirements and are adequate to assure consistent production

of the product within required specifications.

Manufacturers of human cellular or tissue-based biologics also must comply with the FDA’s

Good Tissue Practices (“GTP”), as applicable, and with the general biological product standards.

The FDA also may inspect

the sponsor and one or more clinical trial sites to assure compliance with GCP requirements and the integrity of the clinical data submitted

FDA also may require the development of a risk

evaluation and mitigation strategy (“REMS”) if it determines that a REMS is necessary to ensure that the benefits of the drug

outweigh its risks and to assure the safe use of the drug or biological product.

The REMS could include medication guides, physician communication

plans, assessment plans and/or elements to assure safe use, such as restricted distribution methods, patient registries, or other risk

minimization tools.

The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis.

the FDA concludes a REMS is needed, the sponsor of the NDA or BLA must submit a proposed REMS.

The FDA will not approve a BLA without

a REMS, if required.

Under the Pediatric Research Equity Act as amended

(“PREA”), a NDA, BLA, or supplement to an NDA or BLA must contain data that are adequate to assess the safety and efficacy

of the product candidate for the claimed indications in all relevant pediatric populations and to support dosing and administration for

each pediatric population for which the product is safe and effective.

The FDA may grant deferrals for submission of pediatric data or

full or partial waivers from such requirements.

Under the law, a sponsor who is planning to submit a marketing application for a product

that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration must submit

an initial Pediatric Study Plan (“PSP”) within sixty days of an end-of-Phase 2 meeting or, if there is no such meeting, as

early as practicable before the initiation of the Phase 3 or Phase 2/3 clinical trial.

The initial PSP must include an outline of the

pediatric study or studies that the sponsor plans to conduct, including trial objectives and design, age groups, relevant endpoints and

statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments

or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.

The FDA and the

sponsor must reach an agreement on the PSP.

A sponsor can submit amendments to an agreed upon initial PSP at any time if changes to the

pediatric plan need to be considered based on data collected from pre-clinical studies, early phase clinical trials or other clinical

development programs.

After the FDA evaluates the NDA or BLA and the

sponsor company’s manufacturing facilities, it issues either an approval letter or a complete response letter.

A complete response

letter generally outlines the deficiencies in the submission and may require substantial additional testing or information for the FDA

to reconsider the application.

If, or when, those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of

the NDA or BLA, the FDA will issue an approval letter.

Notwithstanding the submission of any requested additional information, the FDA

ultimately may decide that the application does not satisfy the regulatory criteria for approval.

The time to final marketing approval can vary

from months to years, depending on several variables.

These variables can include such things as the disease type, the strength and complexity

of the data presented, the novelty of the target or compound, risk-management approval and whether multiple rounds of review are required

for the agency to evaluate the submission.

After evaluating the NDA or BLA and all related information, including the advisory committee

recommendation, if any, and inspection reports regarding the manufacturing facilities and clinical trial sites, the FDA may issue an approval

letter, or, in some cases, a complete response letter.

A complete response letter generally contains a statement of specific conditions

that must be met in order to secure final approval of the NDA or BLA and may require additional clinical or preclinical testing in order

for FDA to reconsider the application.

Even with submission of this additional information, the FDA ultimately may decide that the application

does not satisfy the regulatory criteria for approval.

If and when those conditions have been met to the FDA’s satisfaction, the

FDA will typically issue an approval letter.

An approval letter authorizes commercial marketing of the drug or biologic with specific

prescribing information, which may include contraindications, warnings or precautions, for certain indications.

After approval, some types

of changes to the approved product, such as adding new indications and additional labeling claims, are subject to further testing requirements

and FDA review and approval.

product manufacturing facilities, it issues either an approval letter or a complete response letter.

An approval letter authorizes commercial

marketing of the product with specific prescribing information for specific indications.

A complete response letter indicates that the

review cycle of the application is complete and the application will not be approved in its present form.

A complete response letter generally

outlines the deficiencies in the submission and may require substantial additional testing or information, which may include data from

further preclinical studies or clinical trials, for the FDA to reconsider the application.

If and when those deficiencies have been addressed

to the FDA’s satisfaction in a resubmission of the NDA or BLA, the FDA will issue an approval letter.

Notwithstanding the submission

of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for

If a product receives regulatory approval from

the FDA, the approval is limited to the conditions of use (e.g., patient population, indication) described in the application.

depending on the specific risks to be addressed, the FDA may require that contraindications, warnings or precautions be included in the

product labeling, require that post-approval trials, including Phase 4 clinical trials, be conducted to further assess a product’s

safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions,

including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential

market and profitability of the product.

The FDA may prevent or limit further marketing of a product based on the results of post-marketing

trials or surveillance programs.

After approval, some types of changes to the approved product, such as adding new indications, manufacturing

changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

FDA Review and Approval Process for Combination

A combination product is a product composed of

a combination of two or more FDA-regulated product constituent parts or products, e.g., drug-device or biologic-device.

Such products

often raise regulatory, policy and review management challenges because they integrate constituent parts that are regulated under different

types of regulatory requirements and by different FDA Centers, namely, the Center for Drug Evaluation and Research, or CDER, the Center

for Devices and Radiological Health, or CDRH, or the Center for Biologics Evaluation and Research, or CBER.

Differences in regulatory

pathways for each constituent part can impact the regulatory processes for all aspects of product development and management, including

preclinical testing, clinical investigation, marketing applications, manufacturing and quality control, adverse event reporting, promotion

and advertising, and post-approval modifications.

Specifically, under regulations issued by the FDA, a combination product may be:

a product comprised of two or more regulated constituent parts that are physically, chemically, or otherwise combined or mixed and produced as a single entity;

two or more separate products packaged together in a single package or as a unit and comprised of drug and device products;

a drug, biologic, or device packaged separately that according to its investigational plan or proposed labeling is intended for use only with an approved individually specified drug, biologic, or device where both are required to achieve the intended use, indication, or effect and where upon approval of the proposed product the labeling of the approved product would need to be changed, e.g., to reflect a change in intended use, dosage form, strength, route of administration, or significant change in dose;

any investigational drug, biologic, or device packaged separately that according to its proposed labeling is for use only with another individually specified investigational drug, biologic, or device where both are required to achieve the intended use, indication, or effect.

The FDA’s Office of Combination Products,

or OCP, was established to provide prompt determination of the FDA Center with primary jurisdiction over the review and regulation of

a combination product;

ensure timely and effective premarket review by overseeing the timeliness of and coordinating reviews involving

more than one center;

ensure consistent and appropriate post-market regulation;

resolve disputes regarding review timeliness;

and review/revise

agreements, guidance and practices specific to the assignment of combination products.

OCP determines which Center will have primary

jurisdiction for the combination product, referred to as the Lead Center, based on the combination product’s “primary mode

of action,” or PMOA.

A mode of action is the means by which a product achieves an intended therapeutic effect or action.

is the mode of action that provides the most important therapeutic action of the combination product, or the mode of action expected to

make the greatest contribution to the overall intended therapeutic effects of the combination product.

The Lead Center has primary responsibility

for the review and regulation of a combination product;

however a second Center is often involved in the review process, especially to

provide input regarding the “secondary” component(s).

In most instances, the Lead Center applies its usual regulatory pathway.

For example, a drug-biologic combination product assigned to CDER will typically be reviewed under an NDA, while a drug-biologic combination

product assigned to CBER is typically reviewed under through a BLA.

Often it is difficult for OCP to determine with

reasonable certainty the most important therapeutic action of the combination product.

In those difficult cases, OCP will consider consistency

with other combination products raising similar types of safety and effectiveness questions, or which Center has the most expertise to

evaluate the most significant safety and effectiveness questions raised by the combination product.

A sponsor may use a voluntary formal

process, known as a Request for Designation, when the product classification is unclear or in dispute, to obtain a binding decision as

to which Center will regulate the combination product.

If the sponsor objects to that decision, the sponsor may request that OCP reconsider

its decision.

Combination products are subject to FDA user fees

based on the type of application submitted for the product’s premarket approval or clearance.

For example, a combination product

for which an NDA is submitted is subject to the NDA fee under PDUFA.

Since a combination product incorporates two or

more constituent parts that have different regulatory requirements, a combination product manufacturer must comply with all cGMP requirements

that apply to each constituent part.

The FDA has issued a combination product cGMP regulation, along with final guidance, describing two

approaches a combination product manufacturer may follow to demonstrate compliance.

Under these two options, the manufacturer demonstrates

compliance with:

(1) All cGMP regulations applicable to each separate regulated constituent part included in the combination product;

or (2) either the drug cGMP or the QSR (if there is a device constituent part), as well as with specified provisions from the other of

these two sets of requirements (also called the “streamlined approach”).

Post Approval Regulations

After regulatory approval of a drug or biologic

is obtained, a company is required to comply with certain post-approval requirements.

For example, as a condition of approval of an NDA

or BLA, the FDA may require post-marketing testing, including a Phase 4 clinical trial and surveillance to further assess and monitor

is obtained, a company is required to comply with pervasive and continuing FDA requirements.

For example, as a condition of approval of

an NDA or BLA, the FDA may require post-marketing testing, including a Phase 4 clinical trial and surveillance to further assess and monitor

the product’s safety and effectiveness after commercialization has begun.

Also, as a holder of an approved NDA or BLA, a company

is required to:

(i) report adverse reactions and production problems to the FDA;

(ii) provide updated safety and efficacy information;

and (iii) comply with requirements concerning advertising and promotional labeling for any of its products.

Also, quality control and

manufacturing procedures must continue to conform to cGMP standards after approval to assure and preserve the long-term stability of the

drug or biological product.

The FDA periodically inspects manufacturing facilities to assess compliance with cGMP standards, which imposes

extensive procedural and substantive record keeping requirements.

Also, changes to the manufacturing process are strictly regulated, and,

depending on the significance of the change, may require prior FDA approval before being implemented.

In addition, FDA regulations require

investigation and correction of any deviations from cGMP standards and impose reporting and documentation requirements upon a company

and any third-party manufacturers that a company may decide to use.

Manufacturers must continue to expend time, money and effort in production

In addition, NDA and BLA holders are subject to regulations

governing, among other things, monitoring and recordkeeping activities, reporting of adverse experiences with the product, product sampling

and distribution restrictions, complying with promotion and advertising requirements, which include restrictions on promoting drugs for

unapproved uses or patient populations (i.e., “off-label use”) and limitations on industry-sponsored scientific and educational

activities.If there are any modifications to the product, including changes in indications, labeling or manufacturing processes or facilities,

the applicant may be required to submit and obtain FDA approval of a new NDA/BLA or an NDA/BLA supplement, which may require the applicant

to develop additional data or conduct additional nonclinical studies and clinical trials.

The FDA may also place other conditions on approvals

including the requirement for a REMS to assure the safe use of the product.

A REMS could include medication guides, physician communication

plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products.

Product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following initial marketing.

FDA regulations also require drug and biologic

manufacturers to implement and maintain quality control and manufacturing procedures that conform to cGMP standards to assure and preserve

the long-term stability of the approved product.

The FDA periodically inspects The cGMP regulations include requirements relating to organization

of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process

controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged

Manufacturers and other entities involved in the production and distribution of approved drugs or biologics are required to

register their establishments with the FDA and certain state agencies, and such facilities are subject to periodic unannounced or scheduled

inspections by the FDA and certain state agencies to assess compliance with cGMP standards.

In addition, FDA regulations require investigation

and correction of any deviations from cGMP standards and impose reporting and documentation requirements upon a company and any third-party

manufacturers that a company may decide to use.

Accordingly, manufacturers must continue to expend time, money and effort in production

and quality control to maintain compliance with cGMP standards and other aspects of regulatory compliance.

Disclosure of Clinical Trial Information

A sponsor of a clinical trial of certain FDA-regulated

products, including prescription drugs and biologics, is required to register and disclose certain clinical trial information on a public

Information related to the product, patient population, phase of investigation, study sites and investigator involved, and other

aspects of the clinical trial are made public as part of the registration.

A sponsor is also obligated to disclose the results of a clinical

trial after completion.

Disclosure of the results can be delayed until the product or new indication being studied has been approved.

Competitors may use this publicly available information to gain knowledge regarding the design and progress of our development programs.

Future inspections by the FDA

and other regulatory agencies may identify compliance issues at the facilities of our CMOs that may disrupt production or distribution

or require substantial resources to correct.

In addition, the discovery of conditions that violate these rules, including failure to conform

to cGMPs, could result in enforcement actions, and the discovery of problems with a product after approval may result in restrictions

on a product, manufacturer or holder of an approved NDA or BLA, including voluntary recall and regulatory sanctions as described below.

Once an approval of a drug or biologic is granted,

the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after

the product reaches the market.

Later discovery of previously unknown problems with a product, including adverse events of unanticipated

severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions

to the approved labeling to add new safety information, imposition of post-market surveillance studies or clinical trials to assess new

safety risks, or imposition of distribution or other restrictions under a REMS program.

Other potential consequences include, among other

restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials;

refusal of the FDA to approve pending NDAs/BLAs or supplements to approved NDAs/BLAs, or suspension or revocation of product approvals;

product seizure or detention, or refusal to permit the import or export of products;

injunctions or the imposition of civil or criminal penalties;

consent decrees, corporate integrity agreements, debarment or exclusion from federal healthcare programs;

mandated modification of promotional materials and labeling and the issuance of corrective information.

In addition, the distribution of prescription

pharmaceutical and biological products is subject to the Prescription Drug Marketing Act (“PDMA”) which regulates the distribution

of drugs and drug samples at the federal level, and sets minimum standards for the registration and regulation of drug distributors by

Both the PDMA and state laws limit the distribution of prescription product samples and impose requirements to ensure accountability

in distribution.

The Drug Supply Chain Security Act (“DSCSA”) was enacted with the aim of building an electronic system to

identify and trace certain prescription drugs distributed in the U.S., including most biological products.

The DSCSA mandates phased-in

and resource-intensive obligations for pharmaceutical manufacturers, wholesale distributors and dispensers over a 10-year period, which

culminated in November 2023.

Most recently, the FDA announced a one-year stabilization period to November 2024, giving entities subject

to the DSCSA additional time to finalize interoperable tracking systems and to ensure supply chain continuity.

From time to time, new

legislation and regulations may be implemented that could significantly change the statutory provisions governing the approval, manufacturing

and marketing of products regulated by the FDA.

For example, FDA released proposed regulations in February 2022 to amend the national

standards for licensing of wholesale drug distributors by the states;

establish new minimum standards for state licensing third-party

logistics providers;

and create a federal system for licensure for use in the absence of a state program, each of which is mandated by

It is impossible to predict whether further legislative or regulatory changes will be enacted, or FDA regulations, guidance or interpretations

changed or what the impact of such changes, if any, may be.

Advertising and Promotion

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involving the internet.

A product cannot be commercially promoted before it is approved.

After approval, product promotion can include

only those claims relating to safety and effectiveness that are consistent with the labeling approved by the FDA.

Healthcare providers

are permitted to prescribe drugs or biologics for “off-label” uses (uses not approved by the FDA and therefore not described

in the drug’s labeling) because the FDA does not regulate the practice of medicine.

However, FDA regulations impose stringent restrictions

on manufacturers’ communications regarding off label uses.

Broadly speaking, a manufacturer may not promote a product for off-label

use, but may engage in non-promotional, balanced communication regarding off-label use under specified conditions.

Failure to comply with

applicable FDA requirements and restrictions in this area may subject a company to adverse publicity and enforcement action by the FDA,

Department of Justice (“DOJ”), the Office of the Inspector General of Health & Human Services (“HHS”)

A drug or biological product cannot be commercially promoted for any indication before it is approved for such

After approval, product promotion can include only those claims relating to safety and effectiveness that are consistent with

the labeling approved by the FDA.

Healthcare providers are legally permitted to prescribe drugs or biologics for “off-label”

uses (uses not approved by the FDA and therefore not described in the approved labeling for the drug or biologic) because the FDA does

not regulate the practice of medicine.

However, FDA regulations impose stringent restrictions on manufacturers’ communications regarding

off-label uses.

Broadly speaking, a manufacturer may not promote a product for any off-label use, but may engage in non-promotional, balanced

communication to licensed healthcare professionals regarding off-label use under specified conditions.

Failure to comply with applicable

FDA requirements and restrictions in this area may subject a company to adverse publicity and enforcement action by the FDA, the U.S.

Department of Justice (“DOJ”), the U.S.

Department of Health and Human Services Office of Inspector General (“HHS-OIG”)

and state authorities.

This could subject a company to a range of penalties that could have a significant commercial impact, including

civil and criminal fines and/or agreements that materially restrict the manner in which a company promotes or distributes drug and biologics.

Patent Extension and Marketing Exclusivity

The Biologics Price Competition and Innovation

Act (“BPCIA”) amended the PHSA to authorize the FDA to approve similar versions of innovative biologics, commonly known as

A competitor seeking approval of a biosimilar must file an application to establish its product as highly like an approved

innovator biologic, among other requirements.

The BPCIA bars the FDA from approving biosimilar applications for 12 years after an innovator

biological product receives initial marketing approval.

Such enforcement action may lead to a range of penalties that could have a significant commercial impact, including

civil and criminal fines and/or agreements that materially restrict the manner in which a company promotes or distributes its approved

drug and biological products.

Patent Extension

Depending upon the timing, duration and specifics

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regulatory review.

It is calculated as half of the testing phase (the time between the IND submission becoming effective and the NDA,

BLA or premarket approval (“PMA”) submission) and all the review phase (the time between NDA, BLA or PMA submission and approval)

up to a maximum extension of five years.

The time can be shortened if the FDA determines that the applicant did not pursue approval with

due diligence.

Only one patent applicable to an approved product is eligible for the extension, and the application for the extension

must be submitted prior to the expiration of the patent.

Patent and Trademark Office (“USPTO”), in consultation with

the FDA, reviews and approves the application for any patent term extension.

Similar provisions are available in Europe and other foreign

jurisdictions to extend the term of a patent that covers an approved drug, biologic or medical device.

In the future, if any of our product

candidates receive FDA approval, we expect to apply for patent term extension on patents covering those products that may be eligible

for such patent term restoration.

It is calculated as half of the period of time comprising the testing phase (the time between the IND becoming effective

and the NDA or BLA submission date) plus all the FDA review phase (the time between NDA or BLA submission and approval dates), up to a

maximum extension of five years.

The time can be shortened if the FDA determines that the applicant did not pursue approval with due diligence.

Only one patent applicable to an approved product is eligible for the extension, and the application for the extension must be submitted

prior to the expiration of the patent.

Patent and Trademark Office (“USPTO”), in consultation with the FDA, reviews

and approves the application for any patent term extension.

Similar provisions are available in Europe and

other foreign jurisdictions to extend the term of a patent that covers an approved drug, biologic or medical device.

In the future, if

any of our product candidates receive FDA approval, we expect to apply for patent term extension on patents covering those products that

may be eligible for such patent term restoration.

Pediatric Exclusivity

Pediatric exclusivity is a type of non-patent

marketing exclusivity available in the U.S.

and, if granted, it provides for the attachment of an additional six months of marketing protection

to the term of any existing regulatory exclusivity or listed patents.

This six-month exclusivity may be granted if a sponsor submits pediatric

data that fairly respond to a Written Request from the FDA for such data.

The data do not need to show the product to be effective in

the pediatric population studied;

rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional

protection is granted.

If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits,

whatever statutory or regulatory periods of exclusivity or patent protection cover the product are extended by six months.

not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.

The issuance of a Written Request by the FDA does not require the sponsor to undertake the described studies.

Reference Product Exclusivity for Biological

March 2010, the Patient Protection and Affordable

Care Act was enacted in the U.S.

and included the Biologics Price Competition and Innovation Act of 2009, or the BPCIA.

The BPCIA amended

the PHSA to create an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed

reference biological product.

Since that time, the FDA has approved numerous biosimilar products, issued several guidance documents outlining

its approach to reviewing and approving biosimilars and interchangeable biosimilar, and created a public database that contains information

on all FDA-licensed biological products, including biosimilars, called the Purple Book.

A biosimilar product is defined as one that is

highly similar to a reference product notwithstanding minor differences in clinically inactive components and for which there are no clinically

meaningful differences between the biological product and the reference product in terms of the safety, purity and potency of the product.

An interchangeable product is a biosimilar product that can be expected to produce the same clinical results as the reference product

in any given patient and, for products administered multiple times to an individual, that the product and the reference product may be

alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative

to exclusive use of the reference biological product without such alternation or switch.

Upon licensure by the FDA, an interchangeable

biosimilar may be substituted for the reference product without the intervention of the healthcare provider who prescribed the reference

The biosimilar applicant must demonstrate that

the product is biosimilar based on data from (1) analytical studies showing that the biosimilar product is highly similar to the

reference product;

(2) animal studies (including toxicity);

and (3) one or more clinical studies to demonstrate safety, purity

and potency in one or more appropriate conditions of use for which the reference product is approved.

In addition, the applicant must

show that the biosimilar and reference products have the same mechanism of action for the conditions of use on the label, route of administration,

dosage and strength, and the production facility must meet standards designed to assure product safety, purity and potency.

A reference biological product is granted 12 years

of market exclusivity from the time of first licensure of the product, and the first approved interchangeable biologic product will be

granted an exclusivity period of up to one year after it is first commercially marketed.

As part of the Consolidated Appropriations Act

for 2023, Congress amended the PHSA in order to permit multiple interchangeable products approved on the same day to receive and benefit

from this one-year exclusivity period.

If pediatric studies are performed and accepted by the FDA as responsive to a Written Request, the 12-year exclusivity period will be

extended for an additional six months.

In addition, the FDA will not accept an application for a biosimilar or interchangeable product

based on the reference biological product until four years after the date of first licensure of the reference product.

“First licensure”

typically means the initial date the particular product at issue was licensed in the U.S.

Date of first licensure does not include the

date of licensure of (and a new period of exclusivity is not available for) a supplement for the reference product for a subsequent application

filed by the same sponsor or manufacturer of the reference product (or licensor, predecessor in interest or other related entity) for

a change that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or

strength or for a modification to the structure of the biological product that does not result in a change in safety, purity or potency.

Therefore, one must determine whether a new product includes a modification to the structure of a previously licensed product that results

in a change in safety, purity or potency to assess whether the licensure of the new product is a first licensure that triggers its own

period of exclusivity.

Whether a subsequent application, if approved, warrants exclusivity as the “first licensure” of a biological

product is determined on a case-by-case basis with data submitted by the sponsor.

The BPCIA is complex and is still being interpreted

and implemented by the FDA and by federal judges.

In addition, recent government proposals have sought to reduce the 12-year reference

product exclusivity period.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the

subject of recent litigation.

As a result, the ultimate impact, implementation and meaning of the BPCIA continues to be subject to uncertainty.

Foreign Corrupt Practices Act

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In Europe, and throughout the world, other countries have enacted anti-bribery laws and/or regulations similar

European and Other International Government

In addition to regulations in the U.S., we will

be subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales

and distribution of our product candidates.

There is no guarantee that a potential treatment will receive marketing approval or that decisions

on marketing approvals or treatment indications will be consistent across geographic areas.

Whether or not we obtain FDA approval for

a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical

trials or marketing of the product in those countries.

Some countries outside of the U.S.

have a similar process to that of the FDA in

that such countries require the submission of a clinical trial application (“CTA”) much like the IND prior to the commencement

of human clinical trials.

In Europe, for example, a CTA must typically be submitted to each country’s national health authority

and an independent ethics committee, much like the FDA and an IRB.

Once the CTA is approved in accordance with a country’s requirements,

a clinical trial may proceed in that particular country.

In the EEA, the EU Clinical Trial Regulation (“CTR”) enables sponsors

since 31 January 2022 to submit one CTA via a single online platform, the Clinical Trials Information System (CTIS), to obtain approval

for a clinical trial in several EEA countries.

To obtain regulatory approval to commercialize

a new drug or biologic under the European Union regulatory systems, we must submit a marketing authorization application (“MAA”)

with the European Medicines Agency, or “EMA”, the EEA authority in charge of medicinal products, or with a national drug approval

National and European Union marketing authorization procedures are similar to FDA approval procedures.

While the requirements governing the conduct of

clinical trials are broadly harmonized across the EEA, in particular due to the CTR, the regulatory regimes applicable to pricing and

reimbursement vary from country to country.

Internationally, clinical trials are generally required to be conducted in accordance with

GCP standards, applicable regulatory requirements of each jurisdiction and the medical ethics principles that have their origin in the

Declaration of Helsinki.

Orphan Drug Status

In accordance with laws and regulations pertaining

to regulatory agencies, a sponsor may request that the regulatory agencies designate a drug or biologic intended to treat a “Rare

Disease or Condition” as an “Orphan Drug.” For example, in the U.S., a “Rare Disease or Condition” is defined

as one which affects less than 200,000 people in the U.S., or which affects more than 200,000 people but for which the cost of developing

and making available the product is not expected to be recovered from sales of the product in the U.S.

Upon the approval of the first

NDA or BLA for a drug or biologic designated as an Orphan Drug for a specified indication, the sponsor of that NDA or BLA is entitled

to 7 years of exclusive marketing rights in the U.S.

for the drug or biologic for the particular indication unless the sponsor cannot

assure the availability of sufficient quantities to meet the needs of persons with the disease.

In Europe, this exclusivity is 10 years.

However, Orphan Drug status for an approved indication does not prevent another company from seeking approval of a drug that has other

labeled indications that are not under orphan or other exclusivities.

An Orphan Drug may also be eligible for federal income tax credits

for costs associated with the disease state, the strength and complexity of the data presented, the novelty of the target or compound,

the risk-management approval and whether multiple rounds of review are required for the agency to evaluate the submission.

guarantee that a potential treatment will receive marketing approval or that decisions on marketing approvals or treatment indications

will be consistent across geographic areas.

Our product candidate for pancreatic cancer received Orphan Drug status in the U.S.

Unlike the U.S., in the European Union, to benefit from market exclusivity, a medicine must maintain its orphan designation at

the time of marketing authorization in addition to when the designation is applied.

Special FDA Expedited Review and Approval Programs

The FDA has various programs, including fast track

designation, accelerated approval, priority review, and breakthrough therapy designation, which are intended to expedite or simplify the

process for the development and FDA review of drugs or biologics that are intended for the treatment of serious or life-threatening diseases

or conditions and demonstrate the potential to address unmet medical needs.

The purpose of these programs is to provide important new

drugs or biologics to patients earlier than under standard FDA review procedures.

Under the Orphan Drug Act, the FDA may grant orphan

drug designation to a drug intended to treat a rare disease or condition, which is generally a disease or condition that affects less

than 200,000 individuals in the U.S., or more than 200,000 individuals and for which the cost of developing and making available the product

is not reasonably expected to be recovered from sales of the product in the U.S.

Orphan drug designation must be requested before submitting

an NDA or BLA.

After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed

publicly by the FDA.

The benefits of orphan drug designation include research and development tax credits and exemption from FDA prescription

drug user fees.

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

Upon the approval of the first NDA or BLA for

a drug or biologic designated as an Orphan Drug for a specified indication, the sponsor of that NDA or BLA is entitled to seven years

of exclusive marketing rights in the U.S.

for the drug or biologic for the particular indication, during which time the FDA may not approve

any other applications to market the same drug for the same indication, except in very limited circumstances.

However, Orphan Drug exclusivity

for an approved indication does not prevent the approval of a different drug for the same rare disease or condition, nor does it block

the approval of the same drug for different conditions.

Additionally, if a drug designated as an orphan product receives marketing approval

for an indication broader than what was designated, it may not be entitled to orphan drug exclusivity.

Orphan drug exclusivity could block

the approval of one of our products for seven years if a competitor obtains approval of the same drug as defined by the FDA for treatment

of the same indication.

Recent court cases have challenged FDA’s

approach to determining the scope of orphan drug exclusivity;

however, at this time the agency continues to apply its long-standing interpretation

of the governing regulations and has stated that it does not plan to change any orphan drug implementing regulations.

Our product candidate for pancreatic cancer received

Orphan Drug status in the U.S.

and European Union.

Fast Track, Breakthrough Therapy and Priority

Review Designations

The FDA is authorized to grant designations, including

fast track designation, priority review designation, and breakthrough therapy designation, to certain drugs or biologics intended for

the treatment of a serious or life-threatening disease or condition and demonstrate the potential to address an unmet medical need.

designation programs are intended to expedite the process for the development and review of such products, and ultimately, to provide

important new drugs or biologics to patients earlier than under standard FDA review procedures.

To be eligible for a fast-track designation, the

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or safety factors.

The FDA may review sections of the NDA or BLA for a fast-track product on a rolling basis before the complete application

is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA or BLA, the FDA agrees to accept sections

of the NDA or BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first

section of the NDA or BLA.

Fast track designation provides opportunities for more frequent interactions with the FDA review team to expedite development

and review of the product.

In addition, the FDA may review sections of the NDA or BLA for a fast-track product on a rolling basis before

the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA or BLA, the FDA

agrees to accept sections of the NDA or BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees

upon submission of the first section of the NDA or BLA.

The FDA may give a priority review designation

to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists.

A priority review means that

the goal for the FDA to review an application is six months, rather than the standard review of ten months under current PDUFA guidelines.

Under the new PDUFA agreement, these six and ten-month review periods are measured from the “filing” date rather than the

receipt date for NDAs for new molecular entities, which typically adds approximately two months to the timeline for review and decision

from the date of submission.

Most products that are eligible for fast-track designation are also likely to be considered appropriate to

receive a priority review.

In addition, products tested for their safety

and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments

may be eligible for accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing

that the drug product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint

that can be measured earlier than irreversible morbidity or mortality, or IMM, that is reasonably likely to predict an effect on irreversible

morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability

or lack of alternative treatments.

As a condition of approval, the FDA may require a sponsor of a drug receiving accelerated approval

to perform post-marketing studies to verify and describe the predicted effect on IMM or other clinical endpoint, and the drug may be subject

to accelerated withdrawal procedures.

Moreover, under the provisions of the Food and

Drug Administration Safety and Innovation Act, or FDASIA, passed in July 2012, a sponsor can request designation of a product candidate

as a “breakthrough therapy.” A breakthrough therapy is defined as a drug that is intended, alone or in combination with one

or more other drugs, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence indicates that the

drug may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial

treatment effects observed early in clinical development.

Drugs designated as breakthrough therapies are also eligible for accelerated

The FDA must take certain actions, such as holding timely meetings and providing advice, intended to expedite the development

and review of an application for approval of a breakthrough therapy.

to a drug or biologic that that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.

The FDA determines at the time that the marketing application is submitted, on a case-by-case basis, whether the proposed drug or biologic

represents a significant improvement in treatment, prevention or diagnosis of disease when compared with other available therapies.

improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction

of a treatment-limiting drug reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes,

or evidence of safety and effectiveness in a new subpopulation.

A priority review designation means that the goal for the FDA to take

action on an NME NDA or original BLA submission within six months after the filing date, rather than the standard review period of ten

months under current PDUFA guidelines.

Finally, under the provisions of the Food and

Drug Administration Safety and Innovation Act, or FDASIA, enacted in July 2012, a sponsor can request designation of a product candidate

as a “breakthrough therapy.” A breakthrough therapy is defined as a drug or biologic that is intended, alone or in combination

with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition, and preliminary clinical evidence

indicates that the drug or biologic may demonstrate substantial improvement over existing therapies on one or more clinically significant

endpoints, such as substantial treatment effects observed early in clinical development.

Drugs or biologics designated as breakthrough

therapies may also eligible for accelerated approval.

The FDA must take certain actions with respect to breakthrough therapies, such as

holding timely meetings and providing advice, which are intended to expedite the development and review of an application for approval

of a breakthrough therapy.

Even if a product qualifies for one or more of

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for FDA review or approval will not be shortened.

We may explore some of these opportunities for our product candidates as appropriate.

Furthermore, fast track designation, breakthrough therapy designation and priority review

do not change the standards for approval and may not ultimately expedite the development or approval process.

We may explore some of these

opportunities for our product candidates as appropriate.

Accelerated Approval Pathway

The FDA may grant accelerated approval to a drug

for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based

upon a determination that the drug or biologic has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit.

The FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that

can be measured earlier than an effect on IMM, and that is reasonably likely to predict an effect on IMM or other clinical benefit, considering

or biologic that is intended to treat a serious or life-threatening condition and that provides meaningful therapeutic advantage to patients

over existing treatments based upon adequate and well-controlled clinical trials establishing that the drug or biologic has an effect

on a surrogate endpoint that is reasonably likely to predict clinical benefit.

The FDA may also grant accelerated approval for such a

drug or biologic when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible

morbidity or mortality(“IMM”) and that is reasonably likely to predict an effect on IMM or other clinical benefit, considering

the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.

Drugs granted accelerated

approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

Drugs or biologics granted

accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

For the purposes of accelerated approval, a surrogate

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An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely

to predict the clinical benefit of a drug, such as an effect on IMM.

The FDA has limited experience with accelerated approvals based on

intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval where the therapeutic

to predict the clinical benefit of a drug or biologic, such as an effect on IMM.

The FDA has limited experience with accelerated approvals

based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval where the therapeutic

effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding

that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a drug.

that the therapeutic effect is reasonably likely to predict the ultimate long-term clinical benefit of a drug or biologic.

The accelerated approval pathway is most often

used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical

benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly.

Thus, accelerated approval has

been used extensively in the development and approval of drugs for treatment of a variety of cancers in which the goal of therapy is generally

to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large trials to

demonstrate a clinical or survival benefit.

benefit of a drug or biologic, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly.

Thus, accelerated

approval has been used extensively in the development and approval of drugs or biologics for treatment of a variety of cancers in which

the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy

and sometimes large trials to demonstrate a clinical or survival benefit.

The accelerated approval pathway is usually contingent

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requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint.

to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow the FDA to withdraw

the drug from the market on an expedited basis.

All promotional materials for drug candidates approved under accelerated regulations are

subject to prior review by the FDA.

Under a centralized procedure in the European

Union, the maximum timeframe for the evaluation of a MAA is 210 days (excluding “clock stops,” when additional written or

oral information is to be provided by the applicant in response to questions asked by the Committee for Medicinal Products for Human Use

Accelerated evaluation might be granted by the CHMP in exceptional cases, for example, when a medicinal product

is expected to be of a major public health interest, which takes into consideration:

(i) the seriousness of the disease (e.g., heavy disabling

or life-threatening diseases) to be treated;

(ii) the absence or insufficiency of an appropriate alternative therapeutic approach;

(iii) anticipation of high therapeutic benefit.

In this circumstance, the EMA ensures that the opinion of the CHMP is given within 150

addition, as part of the Consolidated Appropriations Act for 2023, Congress provided FDA additional statutory authority to mitigate potential

risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.

Under these recent amendments

to the FDCA, the agency may require a sponsor of a product granted accelerated approval to have a confirmatory trial underway prior to

The sponsor must also submit progress reports on a confirmatory trial every six months until the trial is complete, and such

reports will be published on FDA’s website.

Failure to conduct required post-approval studies, or to confirm a clinical benefit

during post-marketing studies, allows the FDA to withdraw approval of the drug or biologic.

Congress also recently amended the FDCA to

give the agency the option of using expedited procedures to withdraw product approval if the sponsor’s confirmatory trial fails

to verify the claimed clinical benefits of the product.

All promotional materials for drug candidates

approved under accelerated regulations are subject to prior review by the FDA.

Regulation Outside of the U.S.

In addition to regulations in the U.S., we will

be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our products outside

Whether or not we obtain FDA approval for a product candidate, we must obtain approval from the comparable regulatory authorities

of foreign countries or economic areas, such as the 27-member European Union, before we may commence clinical trials or market products

in those countries or areas.

With the United Kingdom withdrawal from the European Union on January 31, 2020, UK licensing decisions were

transferred from EMA to The Medicines and Healthcare Products Regulatory Agency, or MHRA, the UK Regulatory Body.

For a period of three

years following January 1, 2021, the UK continued to adopt decisions taken by the European Commission on the approval of new marketing

authorizations.

However, companies will be required to submit an identical application to the MHRA upon the Committee for Medicinal Products

for Human Use, or CHMP, positive opinion of the application.

The MHRA will then wait for the European Commission decision on approval.

The approval process and requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary greatly

between countries and jurisdictions and can involve additional testing and additional administrative review periods.

The time required

to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval.

approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory

approval in one country or jurisdiction may negatively impact the regulatory process in others.

European Union drug development, review

In the European Union, our product candidates

also may be subject to extensive regulatory requirements.

As in the U.S., medicinal products can be marketed only if marketing authorization

from the competent regulatory agencies has been obtained.

Similar to the U.S., the various phases of preclinical and clinical research

in the European Union are subject to significant regulatory controls.

The Clinical Trials Directive 2001/20/EC, the

Directive 2005/28/EC on GCP, and the related national implementing provisions of the individual EU Member States previously governed the

system for the approval of clinical trials in the European Union.

Under this system, an applicant had to obtain prior approval from the

competent national authority of the EU Member States in which the clinical trial is to be conducted.

Furthermore, the applicant could

only start a clinical trial at a specific study site after the competent ethics committee has issued a favorable opinion.

In 2014, the new Clinical Trials Regulation, (EU)

No 536/2014, Clinical Trials Regulation, was adopted and it became effective on January 31, 2022.

The Clinical Trials Regulation is directly

applicable in all of the EU Member States, as it repealed the Clinical Trials Directive 2001/20/EC.

The extent to which ongoing clinical

trials will be governed by the Clinical Trials Regulation depends on when the Clinical Trials Regulation became applicable and on the

duration of the individual clinical trial.

If a clinical trial continues for more than three years from the day on which the Clinical

Trials Regulation became applicable, the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

The Clinical Trials Regulation aims to simplify

and streamline the approval of clinical trials in the European Union.

The main characteristics of the regulation include:

a streamlined

application procedure via a single entry point, the “EU portal” or Clinical Trial Information System, or CTIS;

of documents to be prepared and submitted for the application as well as simplified reporting procedures for clinical trial sponsors;

and a harmonized procedure for the assessment of applications for clinical trials, which is divided in two parts.

Part I is assessed by

the competent authorities of all EU Member States in which an application for authorization of a clinical trial has been submitted (Member

States concerned).

Part II is assessed separately by each Member State concerned.

Strict deadlines have been established for the assessment

of clinical trial applications.

The role of the relevant ethics committees in the assessment procedure will continue to be governed by

the national law of the concerned EU Member State.

However, overall related timelines will be defined by the Clinical Trials Regulation.

Use of the CTIS became mandatory for new clinical trial application submissions as of February 1, 2023.

To obtain a marketing authorization of a drug

in the European Union, we may submit marketing authorization applications, or MAA, either under the so-called centralized or national

authorization procedures.

Centralized procedure

The centralized procedure provides for the grant

of a single marketing authorization following a favorable opinion by the European Medicines Agency, or EMA, that is valid in all EU member

states, as well as Iceland, Liechtenstein and Norway.

The centralized procedure is compulsory for medicines produced by specified biotechnological

processes, products designated as orphan medicinal products, advanced-therapy medicines (such as gene-therapy, somatic cell-therapy or

tissue-engineered medicines) and products with a new active substance indicated for the treatment of specified diseases, such as HIV/AIDS,

cancer, diabetes, neurodegenerative disorders or autoimmune diseases and other immune dysfunctions and viral diseases.

The centralized

procedure is optional for products that represent a significant therapeutic, scientific or technical innovation, or whose authorization

would be in the interest of public health.

Under the centralized procedure the maximum timeframe for the evaluation of an MAA by the EMA

is 210 days, excluding clock stops, when additional written or oral information is to be provided by the applicant in response to questions

asked by the CHMP.

Accelerated assessment might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be

of a major public health interest, particularly from the point of view of therapeutic innovation.

The timeframe for the evaluation of

an MAA under the accelerated assessment procedure is of 150 days, excluding stop-clocks.

National authorization procedures

There are also two other possible routes to authorize

medicinal products in several EU countries, which are available for investigational medicinal products that fall outside the scope of

the centralized procedure:

Decentralized procedure.

Using the decentralized procedure, an applicant may apply for simultaneous authorization in more than one EU country of medicinal products that have not yet been authorized in any EU country and that do not fall within the mandatory scope of the centralized procedure.

Mutual recognition procedure.

In the mutual recognition procedure, a medicine is first authorized in one EU Member State, in accordance with the national procedures of that country.

Following this, further marketing authorizations can be sought from other EU countries in a procedure whereby the countries concerned agree to recognize the validity of the original, national marketing authorization.

Under the above-described procedures, before granting

the marketing authorization, the EMA or the competent authorities of the Member States of the EEA make an assessment of the risk-benefit

balance of the product on the basis of scientific criteria concerning its quality, safety and efficacy.

Conditional approval

In specific circumstances, EU legislation (Article 14(7) Regulation

(EC) No 726/2004 and Regulation (EC) No 507/2006 on Conditional Marketing Authorizations for Medicinal Products for Human Use) enables

applicants to obtain a conditional marketing authorization prior to obtaining the comprehensive clinical data required for an application

for a full marketing authorization.

Such conditional approvals may be granted for product candidates (including medicines designated as

orphan medicinal products) if (1) the risk-benefit balance of the product candidate is positive, (2) it is likely that the applicant

will be in a position to provide the required comprehensive clinical trial data, (3) the product fulfills unmet medical needs and

(4) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk

inherent in the fact that additional data are still required.

A conditional marketing authorization may contain specific obligations to

be fulfilled by the marketing authorization holder, including obligations with respect to the completion of ongoing or new studies, and

with respect to the collection of pharmacovigilance data.

Conditional marketing authorizations are valid for one year, and may be

renewed annually, if the risk-benefit balance remains positive, and after an assessment of the need for additional or modified conditions

or specific obligations.

The timelines for the centralized procedure described above also apply with respect to the review by the CHMP

of applications for a conditional marketing authorization.

Pediatric studies

Prior to obtaining a marketing authorization in

the European Union, applicants have to demonstrate compliance with all measures included in an EMA-approved Pediatric Investigation Plan,

or PIP, covering all subsets of the pediatric population, unless the EMA has granted a product-specific waiver, a class waiver, or a deferral

for one or more of the measures included in the PIP.

The respective requirements for all marketing authorization procedures are set forth

in Regulation (EC) No 1901/2006, which is referred to as the Pediatric Regulation.

This requirement also applies when a company wants

to add a new indication, pharmaceutical form or route of administration for a medicine that is already authorized.

The Pediatric Committee

of the EMA, or PDCO, may grant deferrals for some medicines, allowing a company to delay development of the medicine in children until

there is enough information to demonstrate its effectiveness and safety in adults.

The PDCO may also grant waivers when development of

a medicine in children is not needed or is not appropriate, such as for diseases that only affect the elderly population.

Before a marketing authorization application can

be filed, or an existing marketing authorization can be amended, the EMA determines that companies actually comply with the agreed studies

and measures listed in each relevant PIP.

European Union regulatory exclusivity

In the European Union, new products authorized

for marketing (i.e., reference products) qualify for eight years of data exclusivity and an additional two years of market exclusivity

upon marketing authorization.

The data exclusivity period prevents generic or biosimilar applicants from relying on the pre-clinical and

clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization

in the European Union during a period of eight years from the date on which the reference product was first authorized in the European

The market exclusivity period prevents a successful generic or biosimilar applicant from commercializing its product in the EU

until ten years have elapsed from the initial authorization of the reference product in the EU.

The ten-year market exclusivity period

can be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains

an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to their authorization, are

held to bring a significant clinical benefit in comparison with existing therapies.

European Union orphan designation and exclusivity

The criteria for designating an orphan medicinal

product in the European Union, are similar in principle to those in the U.S.

Under Article 3 of Regulation (EC) 141/2000, a medicinal

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

debilitating condition;

(2) either (a) such condition affects no more than five in 10,000 persons in the European Union when the application

is made, or (b) the product, without the benefits derived from orphan status, would not generate sufficient return in the European Union

to justify investment;

and (3) there exists no satisfactory method of diagnosis, prevention or treatment of such condition authorized

for marketing in the European Union, or if such a method exists, the product will be of significant benefit to those affected by the condition,

as defined in Regulation (EC) 847/2000.

Orphan medicinal products are eligible for financial incentives such as reduction of fees or fee

waivers and are, upon grant of a marketing authorization, entitled to ten years of market exclusivity for the approved therapeutic indication.

The application for orphan designation must be submitted before the application for marketing authorization.

The applicant will receive

a fee reduction for the marketing authorization application if the orphan designation has been granted, but not if the designation is

still pending at the time the marketing authorization is submitted.

Orphan designation does not convey any advantage in, or shorten the

duration of, the regulatory review and approval process.

The ten-year market exclusivity in the European

Union may be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for

orphan designation, for example, if the product is sufficiently profitable not to justify maintenance of market exclusivity.

Additionally,

marketing authorization may be granted to a similar product for the same indication at any time if:

the second applicant can establish that its product, although similar, is safer, more effective or otherwise clinically superior;

the applicant consents to a second orphan medicinal product application;

the applicant cannot supply enough orphan medicinal product.

PRIME designation

The EMA grants access to the Priority Medicines,

or PRIME, program to investigational medicines for which it determines there to be preliminary data available showing the potential to

address an unmet medical need and bring a major therapeutic advantage to patients.

As part of the program, the EMA provides early and

enhanced dialogue and support to optimize the development of eligible medicines and speed up their evaluation, aiming to bring promising

treatments to patients sooner.

Periods of authorization and renewals

A marketing authorization is valid for five years

in principle and the marketing authorization may be renewed after five years on the basis of a re-evaluation of the risk-benefit

balance by the EMA or by the competent authority of the authorizing member state.

To this end, the marketing authorization holder must

provide the EMA or the competent authority with a consolidated version of the file in respect of quality, safety and efficacy, including

all variations introduced since the marketing authorization was granted, at least six months before the marketing authorization ceases

Once renewed, the marketing authorization is valid for an unlimited period, unless the European Commission or the competent

authority decides on justified grounds relating to pharmacovigilance, to proceed with one additional five-year renewal.

Any authorization

which is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing

member state within three years after authorization ceases to be valid (the so-called sunset clause).

General Data Protection Regulation

The collection, use, disclosure, transfer, or

other processing of personal data regarding individuals in the European Union, including personal health data, is subject to the European

Union’s General Data Protection Regulation (“ GDPR”), which became effective on May 25, 2018.

The GDPR is wide-ranging

in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health

and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals

regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing

notification of data breaches, and taking certain measures when engaging third-party processors.

The GDPR also imposes strict rules on

the transfer of personal data to countries outside the European Union, including the U.S., and permits data protection authorities to

impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues,

whichever is greater.

The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with

supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.

with the GDPR will be a rigorous and time-intensive process that may increase the cost of doing business or require companies to change

their business practices to ensure full compliance.

In July 2023, the European Commission adopted

an adequacy decision for a new mechanism for transferring data from the European Union to the U.S.

– the EU-U.S.

Data Privacy Framework,

which provides individuals in the European Union with several new rights, including the right to obtain access to their data, or obtain

correction or deletion of incorrect or unlawfully handled data.

The adequacy decision followed the signing of an executive order introducing

new binding safeguards to address the points raised by the Court of Justice of the European Union in its decision on a case known as Schrems

II , which invalidated the previous EU-U.S.

Privacy Shield.

Notably, the new obligations were geared to ensure that data can be accessed

intelligence agencies only to the extent necessary and proportionate and to establish an independent and impartial redress mechanism

to handle complaints from Europeans concerning the collection of their data for national security purposes.

The European Commission will

continually review developments in the U.S.

along with its adequacy decision.

Adequacy decisions can be adapted or even withdrawn in the

event of developments affecting the level of protection in the applicable jurisdiction.

Future actions of European Union data protection

authorities are difficult to predict.

Some customers or other service providers may respond to these evolving laws and regulations by

asking us to make certain privacy or data-related contractual commitments that we are unable or unwilling to make.

This could lead to

the loss of current or prospective customers or other business relationships.

Following the United Kingdom’s withdrawal

from the European Union, the GDPR has been implemented in the United Kingdom (as the U.K.

GDPR sits alongside the amended

United Kingdom Data Protection Act 2018 which implements certain derogations in the EU GDPR into United Kingdom law.

Under the U.K.

companies not established in the United Kingdom but who process personal data in relation to the offering of goods or services to individuals

in the United Kingdom, or to monitor their behavior will be subject to the U.K.

GDPR – the requirements of which are (at this time)

largely aligned with those under the EU GDPR and as such, may lead to similar compliance and operational costs with potential fines of

up to £17.5 million or 4% of global turnover.

On June 28, 2021, the European Commission issued a decision that the United Kingdom

ensures an adequate level of protection for personal data transferred under the EU GDPR from the European Union to the United Kingdom.

In June of 2021, the European Commission issued a decision, which will sunset on June 27, 2025 without further action, that the United

Kingdom ensures an adequate level of protection for personal data transferred under the EU GDPR from the EU to the United Kingdom.

Parliament of the United Kingdom is currently considering the Data Protection and Digital Information Bill to harmonize the 2018 Data

Protection Act, U.K.

GDPR, and the Privacy and Electronic Communications Regulations under one legislative framework.

In addition, as

of January 2024, the Parliament of the United Kingdom is considering the Data Protection and Digital Information Bill to harmonize the

2018 Data Protection Act, the U.K.

GDPR, and the Privacy and Electronic Communications Regulations under one legislative framework.

Rest of the world regulation

For other countries outside of the European Union

and the U.S., such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product

licensing, pricing and reimbursement vary from jurisdiction to jurisdiction.

Additionally, the clinical trials must be conducted in accordance

with cGCP requirements and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration

If we fail to comply with applicable foreign regulatory

requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure

of products, operating restrictions and criminal prosecution.

Healthcare Reform

The United States and many foreign jurisdictions

have enacted or proposed legislative and regulatory changes affecting the healthcare system.

The United States government, state legislatures

and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid

healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded

prescription drugs.

At the state level, legislatures have increasingly

passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement

constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases,

designed to encourage importation from other countries and bulk purchasing.

We expect that additional federal, state and foreign healthcare

reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare

products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or

additional pricing pressures.

Coverage and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status

of any drug products for which we obtain regulatory approval.

and markets in other countries, sales of any products for which

we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement from third-party payors.

payors include government health administrative authorities, managed care providers, private health insurers and other organizations.

The process for determining whether a payor will provide coverage for a drug product may be separate from the process for setting the

price or reimbursement rate that the payor will pay for the drug product.

Third-party payors may limit coverage to specific drug products

on an approved list, or formulary, which might not include all the FDA-approved drugs for a certain indication.

Third-party payors are

increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition

to their safety and efficacy.

We may need to conduct expensive pharmacoeconomic studies to demonstrate the medical necessity and cost-effectiveness

of our product candidates, in addition to the costs required to obtain FDA approvals.

Our product candidates, if approved, may not be

considered medically necessary or cost-effective.

A payor’s decision to provide coverage for a drug product does not imply that

an adequate reimbursement rate will be approved.

Adequate third-party reimbursement may not be available to enable us to maintain price

levels sufficient to realize an appropriate return on our investment in product development.

The FDA’s and other regulatory authorities’

policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our

product candidates.

For example, Congress must reauthorize the FDA’s user fee programs every five years and often makes changes

to those programs in addition to policy or procedural changes that may be negotiated between the FDA and industry stakeholders as part

of this periodic reauthorization process.

Congress most recently reauthorized the user fee programs in September 2022 but without any

substantive policy changes.

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 otherwise may have obtained

and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results

of operations.

As previously mentioned, the primary trend in

healthcare industry and elsewhere is cost containment.

Government authorities and other third-party payors have attempted to

control costs by limiting coverage and the amount of reimbursement for particular medical products and services, implementing reductions

in Medicare and other healthcare funding and applying new payment methodologies.

For example, in March 2010, the Patient Protection and

Affordable Care Act (“ACA”) was enacted, which, among other things, increased the minimum Medicaid rebates owed by most manufacturers

under the Medicaid Drug Rebate Program;

introduced a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate

Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;

extended the Medicaid Drug Rebate Program

to utilization of prescriptions of individuals enrolled in Medicaid managed care plans;

imposed mandatory discounts for certain Medicare

Part D beneficiaries as a condition for manufacturers’ outpatient drugs coverage under Medicare Part D;

and established a Center

for Medicare Innovation at the Centers for Medicare and Medicaid Services (“CMS”) to test innovative payment and service delivery

models to lower Medicare and Medicaid spending.

Legislative and regulatory changes under the ACA

are possible, but it is unknown what form any such changes or any law would take and how or whether it may affect the biopharmaceutical

industry as a whole or our business in the future.

We expect that changes or additions to the ACA, the Medicare and Medicaid programs,

and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation

in individual states, could have a material adverse effect on the healthcare industry in the U.S.

Moreover, there has been heightened governmental

scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries

and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review

the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug

Notably, the Further Consolidated Appropriations Act for 2020 into law (P.L.

116-94), which became law on December 20, 2019,

includes a piece of bipartisan legislation called the Creating and Restoring Equal Access to Equivalent Samples Act of 2019 (the CREATES

The CREATES Act aims to address the concern articulated by both the FDA and others in the industry that some brand manufacturers

have improperly restricted the distribution of their products, including by invoking the existence of a REMS for certain products, to

deny generic and biosimilar product developers access to samples of brand products.

Because generic and biosimilar product developers

need samples to conduct certain comparative testing required by the FDA, some have attributed the inability to timely obtain samples as

a cause of delay in the entry of generic and biosimilar products.

To remedy this concern, the CREATES Act establishes a private cause

of action that permits a generic or biosimilar product developer to sue the brand manufacturer to compel it to furnish the necessary samples

on “commercially reasonable, market-based terms.” Whether and how generic and biosimilar product developments will use this

new pathway, as well as the likely outcome of any legal challenges to provisions of the CREATES Act, remain highly uncertain and its potential

effects on our future commercial products are unknown.

More recently, in August 2022, President Biden

signed into the law the Inflation Reduction Act of 2022, or the IRA.

Among other things, the IRA has multiple provisions that may impact

the prices of drug products that are both sold into the Medicare program and throughout the U.S.

Starting in 2023, a manufacturer of a

drug or biological product covered by Medicare Parts B or D must pay a rebate to the federal government if the drug product’s price

increases faster than the rate of inflation.

This calculation is made on a drug product by drug product basis and the amount of the rebate

owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.

Additionally,

starting in payment year 2026, CMS will negotiate drug prices annually for a select number of single source Part D drugs without generic

or biosimilar competition.

CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028.

a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.

CMS has begun

to implement these new authorities and entered into the first set of agreements with pharmaceutical manufacturers to conduct price negotiations

in October 2023.

However, the IRA’s impact on the pharmaceutical industry in the U.S.

remains uncertain, in part because multiple

large pharmaceutical companies and other stakeholders (e.g., the U.S.

Chamber of Commerce) have initiated federal lawsuits against CMS

arguing the program is unconstitutional for a variety of reasons, among other complaints.

Those lawsuits are currently ongoing.

In addition to the IRA’s drug price negotiation

provisions, President Biden’s Executive Order 14087, issued in October 2022, called for the CMS Innovation Center to prepare and

submit a report to the White House on potential payment and delivery modes that would complement to IRA, lower drug costs, and promote

access to innovative drugs.

In February 2023, CMS published its report which described three potential models focusing on affordability,

accessibility and feasibility of implementation for further testing by the CMS Innovation Center.

As of February 2024, the CMS Innovation

Center continues to test the proposed models and has started to roll out plans for access model testing of certain product types (e.g.,

cell and gene therapies) by states and manufacturers.

At the state level, individual states are increasingly

aggressive in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including

price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency

measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.

For example, in recent years,

several states have formed prescription drug affordability boards (“PDABs”).

Much like the IRA’s drug price negotiation

program, these PDABs have attempted to implement upper payment limits (“UPLs”) on drugs sold in their respective states in

both public and commercial health plans.

For example, in August 2023, Colorado’s PDAB announced a list of five prescription drugs

that would undergo an affordability review.

The effects of these efforts remain uncertain pending the outcomes of several federal lawsuits

challenging state authority to regulate prescription drug payment limits.

In December 2020, the U.S.

Supreme Court held unanimously that

federal law does not preempt the states’ ability to regulate pharmacy benefit managers (“PBMs”) and other members of

the healthcare and pharmaceutical supply chain, an important decision that appears to be leading to further and more aggressive efforts

by states in this area.

The Federal Trade Commission in mid-2022 also launched sweeping investigations into the practices of the PBM industry

that could lead to additional federal and state legislative or regulatory proposals targeting such entities’ operations, pharmacy

networks, or financial arrangements.

Significant efforts to change the PBM industry as it currently exists in the U.S.

may affect the

entire pharmaceutical supply chain and the business of other stakeholders, including biopharmaceutical developers like us.

regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products

and which suppliers will be included in their prescription drug and other healthcare programs.

These measures could reduce the ultimate

demand for our products, once approved, or put pressure on our product pricing.

In the European Union, many member states have

increased the amount of discounts required on pharmaceuticals and these efforts could continue as countries attempt to manage healthcare

expenditures, especially in light of the severe fiscal and debt crises experienced by many countries in the European Union.

pressure on healthcare costs in general, particularly prescription products, has become intense.

As a result, increasingly high barriers

are being erected to the entry of new medicinal products.

Political, economic and regulatory developments may further complicate pricing

negotiations, and pricing negotiations may continue after reimbursement has been obtained.

Reference pricing used by various EU member

states, and parallel trade, i.e., arbitrage between low-priced and high-priced member states, can further reduce prices.

no assurance that any country that has price controls or reimbursement limitations for medicinal products will allow favorable reimbursement

and pricing arrangements for any products, if approved in those countries.

We cannot predict the likelihood, nature or extent

of government regulation that may arise from future legislation or administrative or executive action, either in the U.S.

expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts

that federal and state governments will pay for healthcare products and services.

Moreover, 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, our

therapeutic candidates may lose any marketing approval that may have been obtained and we may not achieve or sustain profitability, which

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

Coverage and Reimbursement

Significant uncertainty exists as to the coverage

and reimbursement status of any drug products for which we obtain regulatory approval.

and markets in other countries, sales

of any products for which we receive regulatory approval for commercial sale will depend in part on the availability of reimbursement

from third-party payors.

Third-party payors include government health administrative authorities, managed care providers, private health

insurers and other organizations.

The process for determining whether a payor will provide coverage for a drug product may be separate

from the process for setting the price or reimbursement rate that the payor will pay for the drug product.

Third-party payors may limit

coverage to specific drug products on an approved list, or formulary, which might not include all the FDA-approved drugs for a certain

Third-party payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical

products and services, in addition to their safety and efficacy.

We may need to conduct expensive pharmacoeconomic studies to demonstrate

the medical necessity and cost-effectiveness of our product candidates, in addition to the costs required to obtain FDA approvals.

product candidates, if approved, may not be considered medically necessary or cost-effective.

A payor’s decision to provide coverage

for a drug product does not imply that an adequate reimbursement rate will be approved.

Adequate third-party reimbursement may not be

available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

Medicare is a federal healthcare program administered

by the federal government that covers individuals aged 65 and over as well as individuals with certain disabilities.

Drugs may be covered

under one or more sections of Medicare depending on the nature of the drug and the conditions associated with and site of administration.

For example, under Part D, Medicare beneficiaries may enroll in prescription drug plans offered by private entities which provide coverage

for outpatient prescription drugs.

Part D plans include both stand-alone prescription drug benefit plans and prescription drug coverage

as a supplement to Medicare Advantage plans.

Unlike Medicare Parts A and B, Part D coverage is not standardized.

Part D prescription drug

plan sponsors are not required to pay for all covered Part D drugs, and each drug plan can develop its own drug formulary that identifies

which drugs it will cover and at what tier or level.

Medicare Part B covers most injectable drugs given

in an in-patient setting and some drugs administered by a licensed medical provider in hospital outpatient departments and doctors’

Medicare Part B is administered by Medicare Administrative Contractors, which generally have the responsibility of making coverage

Subject to certain payment adjustments and limits, Medicare generally pays for a Part B-covered drug based on a percentage

of manufacturer-reported average sales price, which is regularly updated.

Different pricing and reimbursement schemes exist

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monitor and control company profits.

The downward pressure on healthcare costs in general, particularly prescription drugs, has become

more intense.

The downward pressure on healthcare costs in general, and particularly on prescription drugs, has

become more intense.

The marketability of any product for which we

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to additional regulation by various federal, state and local authorities in addition to the FDA, including the CMS, other divisions of

the HHS and its Office of Inspector General, the Office for Civil Rights that has jurisdiction over matters relating to individuals’

privacy and protected health information, the DOJ, individual U.S.

Attorney offices within the DOJ and state and local governments.

Department of Health and Human Services (“HHS”), such as HHS-OIG and the Office for Civil Rights, which has jurisdiction

over matters relating to individuals’ privacy and protected health information, as well as the DOJ, individual U.S.

Attorney offices

within the DOJ and state and local governments.

Although we currently do not have any drug or biological products on the market, our business

activities and current and future arrangements with investigators, healthcare professionals, consultants, third-party payors and customers

may be subject to regulation and enforcement by such federal, as well as state, regulatory and law enforcement authorities.

activities must comply with numerous healthcare laws, including but not limited to, anti-kickback and false claims laws and regulations

as well as data privacy and security laws and regulations, which are described below, as well as state and federal consumer protection

and unfair competition laws.

The federal Anti-Kickback Statute prohibits, among

other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, to induce or

in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable

under Medicare, Medicaid or other federally financed healthcare program.

The Anti-Kickback Statute has been interpreted broadly to proscribe

arrangements and conduct where only one purpose of the remuneration between the parties was to induce or reward referrals.

The term remuneration

has been interpreted broadly to include anything of value.

other things, knowingly and willfully offering, paying, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly,

in cash or in kind, to induce or in return for purchasing, leasing, ordering or arranging for or recommending the purchase, lease or order,

or the referral to another for the furnishing or arranging for the furnishing of any healthcare item or service reimbursable under Medicare,

Medicaid or other federally financed healthcare program.

The Anti-Kickback Statute has been interpreted broadly to proscribe arrangements

and conduct where only one purpose of the remuneration between the parties was to induce or reward referrals.

The term remuneration has

been interpreted broadly to include anything of value.

This statute has been interpreted to apply to arrangements between pharmaceutical

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and regulatory safe harbors protecting some business arrangements from prosecution, the exemptions and safe harbors are drawn narrowly

and practices that involve remuneration intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they

do not qualify for an exemption or safe harbor.

Our practices may not in all cases meet all the criteria for safe harbor protection from

federal Anti-Kickback Statute liability.

Failure to meet all the requirements of an applicable safe harbor or statutory exemption, however,

does not make the arrangement or conduct per se unlawful under the Anti-Kickback Statute;

instead, in such cases, the legality

of the arrangement would be evaluated on a case-by-case basis based on a consideration of all the facts and circumstances to ascertain

the parties’ intent.

Moreover, the intent standard under the Anti-Kickback Statute was amended by the Affordable Care Act to a stricter

and practices that involve remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject

to scrutiny if they do not qualify for an exemption or safe harbor.

Our practices may not in all cases meet all the criteria for safe

harbor protection from federal Anti-Kickback Statute liability.

Failure to meet all the requirements of an applicable safe harbor or statutory

exemption, however, does not make the arrangement or conduct per se unlawful under the Anti-Kickback Statute;

instead, in such

cases, the legality of the arrangement would be evaluated on a case-by-case basis based on a consideration of all the facts and circumstances

to ascertain the parties’ intent.

Moreover, the intent standard under the Anti-Kickback Statute was amended by the ACA to a stricter

standard such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it to have

committed a violation.

In addition, the Affordable Care Act codified

case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false

or fraudulent claim for purposes of the federal False Claims Act, as discussed below.

The federal Civil Monetary Penalties Law imposes

penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to

a federal health program that the person knows or should know is for an item or service that was not provided as claimed or is false or

The federal False Claims Act prohibits any person

from knowingly presenting, or causing to be presented, a false claim for payment to the federal government or knowingly making, using

or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.

modification made to the Fraud Enforcement and Recovery Act of 2009, a claim includes “any request or demand” for money or

property presented to the U.S.

Pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly

providing free product to customers with the expectation that the customers would bill federal programs for the product.

Other companies

have been prosecuted for causing false claims to be submitted because of the companies’ marketing of the product for unapproved—and

thus non-reimbursable—uses.

In addition, the ACA codified case law that a

claim including items or services resulting from a violation of the federal Anti-Kickback Statute is grounds for the government or a whistleblower

to assert that a claim for payment of items or services resulting from such violation constitutes a false or fraudulent claim for purposes

of the federal False Claims Act, as discussed below.

The federal Civil Monetary Penalties Law imposes fines against any person or entity

that, among other things, is determined to have knowingly presented, or caused to be presented, a claim to a federal healthcare program

that the person knows, or should know, is for an item or service that was not provided as claimed or is false or fraudulent.

The federal civil False Claims Act (“FCA”)

prohibits, among other things, any person from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment

to, or approval by, the federal government, knowingly making, using, or causing to be made or used a false record or statement material

to a false or fraudulent claim to the federal government, or avoiding, decreasing, or concealing an obligation to pay money to the federal

A claim includes “any request or demand” for money or property presented to the U.S.

The FCA has been

used to assert liability on the basis of kickbacks and other improper referrals, improperly reported government pricing metrics such as

Best Price or Average Manufacturer Price, improper use of Medicare provider or supplier numbers when detailing a provider of services,

improper promotion of off-label uses, and allegations as to misrepresentations with respect to products, contract requirements, and services

Intent to deceive is not required to establish liability under the FCA.

Actions under the FCA may be brought by the government

or may be brought by private individuals on behalf of the government, called “qui tam” actions.

If the government decides

to intervene in a qui tam action and prevails in the lawsuit, the individual will share in the proceeds from any fines or settlement funds.

If the government declines to intervene, the individual may pursue the case alone.

The FCA provides for treble damages and a civil penalty

for each false claim, such as an invoice or pharmacy claim for reimbursement, which can aggregate into millions of dollars.

reasons, since 2004, FCA lawsuits against biopharmaceutical companies have increased significantly in volume and breadth, leading to several

substantial civil and criminal settlements regarding certain sales practices and promoting off label uses.

FCA liability may further be

imposed for known Medicare or Medicaid overpayments, for example, overpayments caused by understated rebate amounts that are not refunded

within 60 days of discovering the overpayment, even if the overpayment was not caused by a false or fraudulent act.

In addition, conviction

or civil judgment for violating the FCA may result in exclusion from federal healthcare programs, and suspension and debarment from government

contracts, and refusal of orders under existing government contracts.

The government may further prosecute conduct constituting

a false claim under the criminal False Claims Act.

The criminal False Claims Act prohibits the making or presenting of a claim to the

government knowing such claim to be false, fictitious, or fraudulent and, unlike the civil False Claims Act, requires proof of intent

to submit a false claim.

The Federal Health Insurance Portability and Accountability

Act of 1996 (“HIPAA”) created additional federal criminal statutes that prohibit knowingly and willfully executing a scheme

to defraud any healthcare benefit program, including private third-party payors and knowingly and willfully falsifying, concealing or

covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment

for healthcare benefits, items or services.

Also, many states have additional similar fraud and abuse statutes or regulations that apply

to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the type of payor.

Act of 1996 (“HIPAA”) created additional federal criminal statutes that prohibit, among other things, knowingly and willfully

executing, or attempting to execute, a scheme to defraud payors or to obtain, by means of false or fraudulent pretenses, representations,

or promises, any of the money or property owned by, or under the custody or control of, a healthcare benefit program, including private

third-party payors, in connection with the delivery or payment for healthcare benefits, knowingly and willfully embezzling or stealing

from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully

falsifying, concealing, or covering up by any trick or device a material fact or making any materially false statements in connection

with the delivery of, or payment for, healthcare benefits, items, or services relating to healthcare matters.

Additionally, the ACA amended

the intent requirement of certain of these criminal statutes under HIPAA so that a person or entity no longer needs to have actual knowledge

of the statute, or the specific intent to violate it, to have committed a violation.

In addition, we may be subject to data privacy

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Information Technology for Economic and Clinical Health Act (“HITECH”) and its implementing regulations, imposes requirements

relating to the privacy, security and transmission of individually identifiable health information.

Among other things, HITECH makes HIPAA’s

privacy and security standards directly applicable to “business associates,” such as independent contractors or agents of

covered entities that receive or obtain protected health information with providing a service on behalf of a covered entity.

increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons.

It also gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal

HIPAA laws and seek attorney’s fees and costs associated with pursuing these actions.

In addition, state laws govern the privacy

and security of health information in specified circumstances, many of which differ from each other in significant ways and may not have

the same effect – thus complicating compliance efforts.

We may be subject to other state and federal privacy

laws, including laws that prohibit unfair privacy and security practices and deceptive statements about privacy and security, laws that

place specific requirements on certain types of activities, such as data security and texting, and laws requiring holders of personal

information to maintain safeguards and to take certain actions in response to a data breach.

EEA countries, the United Kingdom, Switzerland

and other jurisdictions have also adopted data protection laws and regulations, which impose significant compliance obligations.

In the EEA, the collection and use of personal

data, including clinical trial data, is governed by the provisions of the General Data Protection Regulation (“GDPR”).

GDPR became effective on May 25, 2018, repealing its predecessor directive and increasing responsibility and liability of pharmaceutical

and medical device companies in relation to the processing of personal data of EU data subjects.

The GDPR, together with national legislation,

regulations and guidelines of the EU member states governing the processing of personal data, impose strict obligations and restrictions

on the ability to collect, use and transfer personal data, including health data from clinical trials and adverse event reporting.

particular, these obligations and restrictions concern the consent of the individuals to whom the personal data relates, the information

provided to the individuals, the transfer of personal data out of the EEA, security breach notifications, security and confidentiality

of the personal data and imposition of substantial potential fines for breaches of the data protection obligations.

The United Kingdom

has retained the GDPR following Brexit and supplemented it by the UK Data Protection Act 2018 (“UK GDPR”).

National or local

data protection laws or regulations may apply in addition to the (UK) GDPR.

Furthermore, European data protection authorities may interpret

the (UK) GDPR and national or local laws differently, and they may impose additional requirements, which add to the complexity of processing

personal data in or from the EEA or United Kingdom.

Guidance on implementation and compliance practices are often updated or otherwise

on covered entities relating to the privacy, security, and transmission of individually identifiable health information, known as protected

health information.

Among other things, HITECH makes HIPAA’s security standards and certain privacy standards directly applicable

to “business associates,” defined as a person or organization, other than a member of a covered entity’s workforce,

that creates, receives, maintains, or transmits protected health information on behalf of a covered entity for a function or activity

regulated by HIPAA.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates

and individuals.

It also gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts

to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing these actions.

We are not a covered

entity or a business associate under HIPAA, however, we are indirectly affected by HIPAA because the protected health information held

by investigators conducting our clinical trials are subject to HIPAA and can only be used for our research consistent with HIPAA requirements

imposed on those investigators.

In addition, other federal and state laws, such as the California Consumer Privacy Act (CCPA), govern

the privacy and security of the personal information of California residents and may, in certain circumstances, apply to health information.

Other states have implemented laws protecting identifiable health and personal information, many of which laws differ from each other

in significant ways and may not be preempted by HIPAA, thus complicating compliance efforts.

The federal Physician Payments Sunshine Act under

the Affordable Care Act and its implementing regulations also require that certain manufacturers of drugs, devices, biologics and medical

supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with certain exceptions,

to report information related to certain payments or other transfers of value made or distributed to physicians, certain other health

care professionals, and teaching hospitals, or to entities or individuals at the request of, or designated on behalf of, the physicians,

health care professionals, and teaching hospitals.

It also requires reporting annually certain ownership and investment interests held

by physicians and their immediate family members and payments or other “transfers of value” made to such physician owners.

Failure to submit timely, accurately and completely the required information may result in civil monetary penalties of up to, as adjusted

in 2021, an aggregate of $189,692 per year and up to an aggregate of $1,264,622 million per year for “knowing failures”.

Manufacturers

were required to begin collecting data on August 1, 2013, and submit reports on aggregate payment data to the government for the first

reporting period of August 1, 2013 to December 31, 2013, by March 31, 2014.

They are also required to report detailed payment data for

the first reporting period and submit legal attestation to the accuracy of such data by June 30, 2014.

Thereafter, manufacturers must

submit reports by the 90th day of each subsequent calendar year.

CMS made all reported data publicly available starting on September 30,

Certain states also mandate implementation of compliance programs, impose additional restrictions on pharmaceutical manufacturer

marketing practices and/ or require the tracking and reporting of gifts, compensation and other remuneration to healthcare providers and

the ACA and its implementing regulations also require manufacturers of drugs, devices, biologics and medical supplies for which payment

is available under Medicare, Medicaid or the Children’s Health Insurance Program, with certain exceptions, to make annual reports

to CMS regarding payments and other transfers of value made to or at the request of covered recipients, such as, but not limited to physicians,

certain advanced non-physician healthcare providers, and teaching hospitals, as well as ownership and investment interests held by physicians

and their immediate family.

Failure to submit timely, accurately and complete information in compliance with the law may result in significant

civil monetary penalties.

CMS makes the reported information publicly available.

Many states have also adopted laws similar to

each of the above federal laws, which may be broader in scope and apply to items or services reimbursed by any third-party payor, including

commercial insurers.

Certain state laws also regulate sponsors’ use of prescriber-identifiable data.

Certain states also require

implementation of commercial compliance programs and compliance with the pharmaceutical industry’s voluntary compliance guidelines

and the applicable compliance guidance promulgated by the federal government, or otherwise restrict payments or the provision of other

items of value that may be made to healthcare providers and other potential referral sources;

impose restrictions on marketing practices;

or require sponsors to track and report information related to payments, gifts, and other items of value to physicians and other healthcare

Furthermore, to distribute products commercially, we must comply with state laws requiring the registration of manufacturers

and wholesale distributors of drug and biological products in a state, including, in certain states, manufacturers and distributors that

ship products into the state even if such manufacturers or distributors have no place of business within the state.

Recently, states have

enacted or are considering legislation intended to make drug prices more transparent and deter significant price increases, typically

as consumer protection laws.

These laws may affect our future sales, marketing, and other promotional activities by imposing administrative

and compliance burdens.

Because of the breadth of these laws and the narrowness

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If our operations are found to be in violation of any of the federal and state laws described above or any other

governmental regulations that apply to us, we may be subject to penalties.

These include criminal and civil monetary penalties, damages,

fines, imprisonment, exclusion from participation in government programs, injunctions, recall or seizure of products, total or partial

suspension of production, denial or withdrawal of pre-marketing product approvals, private “qui tam” actions brought by individual

whistleblowers in the name of the government or refusal to allow us to enter supply contracts and the curtailment or restructuring of

governmental regulations that apply to us, we may be subject to penalties or other enforcement actions.

These include criminal and civil

monetary penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government healthcare programs, corporate

integrity agreements, suspension and debarment from government contracts and non-procurement transactions such as grants, injunctions,

recall or seizure of products, total or partial suspension of production, denial or withdrawal of pre-marketing product approvals, private

“qui tam” actions brought by individual whistleblowers in the name of the government or the curtailment or restructuring of

our operations.

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programs and reporting of payments or transfers of value to healthcare professionals.

Controlled Substances Regulation

Our product candidates involving Cannabis

contain controlled substances, as defined in the federal Controlled Substances Act of 1970 (“CSA”).

The CSA and its implementing

regulations establish a “closed system” of regulations for controlled substances.

The CSA imposes registration, security,

recordkeeping and reporting, storage, manufacturing, distribution, importation and other requirements under the oversight of the U.S.

Drug Enforcement Administration (“DEA”).

The DEA is the federal agency responsible for regulating controlled substances.

requires those individuals or entities that manufacture, import, export, distribute, research, or dispense controlled substances to comply

with the regulatory requirements to prevent the diversion of controlled substances to illicit channels of commerce.

The DEA categorizes

controlled substances into one of five schedules—Schedule I, II, III, IV or V—with varying qualifications for listing in each

Although cannabis is legal in the State of North Carolina, we had to obtain a Schedule I license for our research with our research

university partner (University of Northern Colorado) that relies on federal grants.

Schedule I substances have a high potential for abuse,

have no currently accepted medical use in treatment in the U.S.

and lack accepted safety for use under medical supervision.

used only in federally approved research programs and may not be marketed or sold for dispensing to patients in the U.S.

Pharmaceutical

products having a currently accepted medical use that are otherwise approved for marketing may be listed as Schedule II, III, IV or V

substances, with Schedule I substances presenting the highest potential for abuse and physical or psychological dependence.

substances present the lowest relative potential for abuse and dependence.

The regulatory requirements are more restrictive for Schedule

II substances than Schedule III substances.

For example, all Schedule II drug prescriptions must be signed by a physician, physically

presented to a pharmacist in most situations and cannot be refilled.

Following FDA approval of a drug containing a Schedule I controlled

substance, that substance must be rescheduled as a Schedule II, III, IV or V substance before it can be marketed.

On November 17, 2015,

639, Improving Regulatory Transparency for New Medical Therapies Act, passed through both houses of Congress.

On November 25, 2015,

the bill was signed into law.

The law removes uncertainty associated with timing of the DEA rescheduling process after FDA approval.

Specifically,

it requires DEA to issue an “interim final rule,” pursuant to which a manufacturer may market its product within 90 days of

FDA approval.

The law also preserves the period of orphan marketing exclusivity for the full seven years such that this period only begins

after DEA scheduling.

This contrasts with the previous situation whereby the orphan “clock” began to tick upon FDA approval,

even though the product could not be marketed until DEA scheduling was complete.

Facilities that manufacture, distribute, import

or export any controlled substance must register annually with the DEA.

The DEA registration is specific to the location, activity and

controlled substance schedule.

For example, separate registrations are required for importation and manufacturing activities, and each

registration authorizes which schedules of controlled substances the registrant may handle.

However, certain coincident activities are

permitted without obtaining a separate DEA registration, such as distribution of controlled substances by the manufacturer that produces

The DEA inspects all manufacturing facilities

to review security, recordkeeping, reporting and handling prior to issuing a controlled substance registration.

The specific security

requirements vary by the type of business activity and the schedule and quantity of controlled substances handled.

The most stringent

requirements apply to manufacturers of Schedule I and Schedule II substances.

Required security measures commonly include background checks

on employees and physical control of controlled substances through storage in approved vaults, safes and cages, and through use of alarm

systems and surveillance cameras.

An application for a manufacturing registration as a bulk manufacturer for a Schedule I or II substance

must be published in the Federal Register and is open for 30 days to permit interested persons to submit comments, objections or requests

for a hearing.

A copy of the notice of the Federal Register publication is forwarded by DEA to all those registered, or applicants for

registration, as bulk manufacturers of that substance.

Once registered, manufacturing facilities must

maintain records documenting the manufacture, receipt and distribution of all controlled substances.

Manufacturers must submit periodic

reports to the DEA of the distribution of Schedule I and II controlled substances, Schedule III narcotic substances and other designated

Registrants must also report any controlled substance thefts or significant losses and must obtain authorization to destroy

or dispose of controlled substances.

As with applications for registration as a bulk manufacturer, an application for an importer registration

for a Schedule I or II substance must also be published in the Federal Register, which remains open for 30 days for comments.

of Schedule I and II controlled substances for commercial purposes are generally restricted to substances not already available from a

domestic supplier or where there is not adequate competition among domestic suppliers.

In addition to an importer or exporter registration,

importers and exporters must obtain a permit for every import or export of a Schedule I and II substance or Schedule III, IV and V narcotic,

and submit import or export declarations for Schedule III, IV and V non-narcotics.

In some cases, Schedule III non-narcotic substances

may be subject to the import/export permit requirement, if necessary, to ensure that the U.S.

complies with its obligations under international

drug control treaties.

For drugs manufactured in the U.S., the DEA establishes

annually an aggregate quota for substances within Schedules I and II that may be manufactured or produced in the U.S.

based on the DEA’s

estimate of the quantity needed to meet legitimate medical, scientific research and industrial needs.

This limited aggregate amount of

Cannabis that the DEA allows to be produced in the U.S.

each year is allocated among individual companies, which, in turn, must

annually apply to the DEA for individual manufacturing and procurement quotas.

The quotas apply equally to the manufacturing of the active

pharmaceutical ingredient and production of dosage forms.

The DEA may adjust aggregate production quotas and individual manufacturing

or procurement quotas from time to time during the year, although the DEA has substantial discretion in whether to make such adjustments

for individual companies.

The states also maintain separate controlled substance

laws and regulations, including licensing, recordkeeping, security, distribution and dispensing requirements.

State authorities, including

boards of pharmacy, regulate use of controlled substances in each state.

Failure to maintain compliance with applicable requirements,

particularly as manifested in the loss or diversion of controlled substances, can result in enforcement action that could have a material

adverse effect on our business, operations and financial condition.

The DEA may seek civil penalties, refuse to renew necessary registrations,

or initiate proceedings to revoke those registrations.

In certain circumstances, violations could lead to criminal prosecution.

Smaller Reporting

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in the following geographical areas:

United States:

All foreign countries, in total:

19 unchanged sentences

“Risk Factors—Risks Related to Our Dependence on Third Parties.”

Our Corporate Information

We are a Nevada corporation incorporated in 1996.

In 2013, we restructured our operations to focus on biotechnology.

The restructuring resulted in us focusing our efforts developing a

novel, effective and safe way to treat cancer and diabetes.

In January 2015, we changed our name from Nuvilex, Inc.

to PharmaCyte Biotech,

to reflect the nature of our current business.

Our corporate headquarters are located at 3960

Howard Hughes Parkway, Suite 500, Las Vegas, Nevada 89169.

Our telephone number is (917) 595-2850.

We maintain a website at www.pharmacyte.com

to which we post copies of our press releases as well as additional information about us.

Our filings with the SEC are available free

of charge through our website as soon as reasonably practicable after being electronically filed with or furnished to the SEC.

contained in our website is not a part of, nor incorporated by reference into, this Report or our other filings with the SEC, and should

not be relied upon.

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 1. Business