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Item 1. Business

2025-03-17 compared with 2024-03-22 · 298 added, 416 removed, 622 unchanged (53% of the section changed)

Prior to July 11, 2022, we were a blank check company registered under the laws of the Cayman Islands and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

On July 11, 2022, we completed the Business Combination pursuant to the Business Combination Agreement dated January 18, 2022, that we entered into with PKLP.

On July 11, 2022, we completed the Business Combination pursuant to the Business Combination Agreement, that we entered into with PKLP.

Upon the completion of the Business Combination, we changed our name to “ProKidney Corp.” and the business of PKLP became our business.

We are a clinical-stage biotechnology company with a transformative proprietary cell therapy platform that has the potential to treat multiple chronic kidney diseases using a patient’s own cells isolated from the patient intended for treatment.

Our approach seeks to redefine the treatment of chronic kidney disease (“CKD”), shifting the emphasis away from management of kidney failure to the preservation, if not improvement, of kidney function.

Our lead product candidate, rilparencel, which we sometimes refer to as REACT®, is designed to preserve kidney function in a CKD patient’s diseased kidneys.

REACT is a product that includes autologous Selected Renal Cells (“SRC”) prepared from a patient’s own (autologous) kidney cells.

SRC are formulated into a product for reinjection into the patient’s kidney using a minimally invasive outpatient procedure that might be repeatable, if necessary.

Because REACT is a personalized treatment composed of cells prepared from a patient’s own kidney, there is no need for treatment with immunosuppressive therapies that are required during a patient’s lifetime when a patient receives a kidney transplant from another (allogeneic) donor.

We are currently conducting a global Phase 3 development program and multiple Phase 2 clinical trials for REACT in subjects with moderate to severe diabetic kidney disease (“DKD”).

We also completed a Phase 1 clinical trial for REACT in subjects with CKD due to congenital anomalies of the kidney and urinary tract (“CAKUT”) for which the last subject visit occurred in January 2023 and the clinical study report was submitted to the FDA in December 2023.

REACT has, to date, been generally well tolerated by subjects with moderate to severe CKD in Phase 1 and 2 clinical testing.

We are a clinical-stage biotechnology company with a transformative proprietary cell therapy platform that has the potential to treat multiple chronic kidney diseases using cells isolated from the patient intended for treatment.

Our approach seeks to redefine the treatment of chronic kidney disease (“CKD”), shifting the emphasis away from management of kidney failure to the preservation of kidney function.

Our lead product candidate, rilparencel, is designed to preserve kidney function in a CKD patient’s diseased kidneys.

Rilparencel is a product that includes autologous Selected Renal Cells (“SRC”) prepared from a patient’s own (autologous) kidney cells.

The SRC are formulated rilparencel for reinjection into the patient’s kidneys using a minimally invasive outpatient procedure that is repeatable, if necessary.

Because rilparencel is a personalized product composed of cells prepared from a patient’s own kidney, there is no need for treatment with immunosuppressive therapies that are required during a patient’s lifetime when a patient receives a kidney transplant from another, allogeneic donor.

We are currently conducting a Phase 3 clinical study and an ongoing Phase 2 clinical study for rilparencel in subjects with moderate to severe CKD and diabetes.

Rilparencel has received regenerative medicine advanced therapy (“RMAT”) designation from the United States Food and Drug Administration (the “FDA”).

We also completed a Phase 1 clinical trial for rilparencel in subjects with CKD due to congenital anomalies of the kidney and urinary tract (“CAKUT”) for which the last subject visit occurred in January 2023 and the clinical study report was submitted to the FDA in December 2023.

Rilparencel has, to date, been generally well tolerated by subjects with moderate to severe CKD in Phase 1 and 2 clinical testing.

Our patented technology includes multiple breakthroughs in the manufacturing and medical delivery of cellular therapy products.

While it has long been accepted that the body contains cells with regenerative power, our technology prepares key progenitor cells, or SRC, by expanding a patient’s own kidney cells for reinjection into the same patient in an attempt to preserve or improve kidney function that is being lost due to chronic diseases.

Our technology works by expanding and selecting kidney cells of a patient in an attempt to preserve kidney function that is being lost due to chronic diseases.

Our process begins when a small piece or biopsy of a patient’s diseased kidney is sent to our manufacturing facility.

We are able to process cells taken from the biopsy and select specific cells with a regenerative capacity.

We are able to process cells taken from the biopsy and select specific cells with a reparative capacity.

These SRC are formulated into a personalized product for reinjection into the damaged kidney(s).

To date, clinical studies suggest that REACT has the capacity to, for a time, positively impact kidney function as reflected by stabilizing the estimated glomerular filtration rate (“eGFR”) or attenuating the rate of eGFR decline in patients with CKD caused by type 2 diabetes.

We are initially pursuing the development of REACT in the United States for use in patients with moderate to severe CKD caused by type 2 diabetes.

We estimate that approximately 36-37 million adults, representing approximately 14% of the U.S.

To date, clinical studies suggest that rilparencel has the capacity to, for a time, positively impact kidney function as reflected by stabilizing the estimated glomerular filtration rate (“eGFR”) or attenuating the rate of eGFR decline in patients with CKD and diabetes.

We are initially pursuing the development of rilparencel in the United States for use in patients with moderate to severe CKD and type 2 diabetes.

We estimate that approximately 36 million - 37 million adults, representing approximately 14% of the U.S.

adult population, currently suffer from CKD.

Chronic kidney disease is segmented into five CKD stages, from mild (CKD stage 1) to severe (CKD stage 5 or kidney failure).

With respect to those patients with stage 3b and 4 CKD caused primarily by diabetes, we estimate that approximately 1.2 to 1.8 million patients could be eligible for treatment with REACT in the United States.

The phase 3 developmental program includes other countries in North America, Europe, Latin and South America, and Asia Pacific.

We currently operate a manufacturing facility that has been designed to comply with FDA and European Medicines Agency (“EMA”) quality standards and to produce REACT treatments from biopsied material.

This facility, based in Winston-Salem, North Carolina, in the United States, has a potential capacity sufficient to supply our global Phase 3 program as well as the first stage of a potential commercial launch, should REACT receive regulatory approval.

We are leveraging our cell therapy technology to develop product candidates designed to stop or delay kidney failure in CKD from diabetes and CAKUT.

With respect to those patients with stage 3b or 4 CKD and diabetes, we estimate that approximately 1.2 million to 1.8 million patients could be eligible for treatment with rilparencel in the United States.

The Phase 3 study includes other countries in North America, Latin America, and Asia Pacific.

We currently operate a manufacturing facility that has been designed to comply with FDA and European Medicines Agency (“EMA”) quality standards and to produce rilparencel treatments from biopsied material.

Our manufacturing site, based in Winston-Salem, North Carolina, in the United States, has a potential capacity sufficient to supply our Phase 3 study as well as a potential commercial launch, should rilparencel receive regulatory approval.

We are leveraging our cell therapy technology to develop product candidates designed to stop or delay kidney failure in CKD.

The following table summarizes our current clinical study pipeline:

REACT is an investigational therapy that is a mixture of kidney cells prepared from the participant’s own kidney tissue.

Rilparencel is an investigational product that includes a mixture of kidney cells prepared from the participant’s own kidney tissue.

The initial kidney tissue is obtained by a standard kidney biopsy performed by a specially trained physician.

From this tissue, certain kidney cells, which are thought to be important for healing the kidney, are grown and multiplied in a highly specialized laboratory facility.

After several weeks, when sufficient cells are available, the REACT preparation of cells is sent back to the clinical trial site where it can be injected directly into the participant’s own kidneys.

It is believed that these SRC may help a diseased kidney stabilize or improve function over time, thereby potentially delaying the need for dialysis or transplantation by preserving kidney function.

Clinical studies suggest that REACT can impact kidney function positively by stabilizing eGFR, or attenuating the rate of eGFR decline, in patients with CKD caused by type 2 diabetes.

We have developed a cryopreserved version of REACT that allows for long-term product preservation to be used in our Phase 3 trials of REACT (called REGEN-006 and REGEN-016), as well as our Phase 2 trial of REACT (called REGEN-007), treating patients with CKD caused by type 2 diabetes.

In addition to the cryopreserved formulation of REACT, we used a gelatin-based hydrogel formulation in our Phase 2 trials (called RMCL-002 and REGEN-003) and Phase 1 trial in congenital anomalies of the kidney and urinary tract (“CAKUT”) (called REGEN-004).

The cryopreserved version of REACT typically allows for preparation of up to 5-10 doses from a single biopsy sample.

We have two preclinical programs (called REACT/Gen and REACT/Universal) where we plan to use genetically modified bioactive kidney cell populations to provide regenerative effects to a diseased kidney.

The preclinical programs seek to create “universal donor” cell populations where gene editing is used to generate novel kidney cell populations that do not generate an immune response and so can be administered as an “off-the-shelf” product.

From this tissue, certain kidney cells, which are thought to heal the kidney, are grown and multiplied in a highly specialized manufacturing facility.

After several weeks, when sufficient cells are available, they are formulated in rilparencel and sent back to the clinical trial site for injection directly into the participant’s own kidneys.

It is believed that rilparencel may help a diseased kidney stabilize or improve function over time, thereby potentially delaying the need for dialysis or transplantation by preserving kidney function.

Clinical studies suggest that rilparencel can impact kidney function positively, as shown by by its stabilization of eGFR, or attenuation of the rate of eGFR decline, in patients with CKD and diabetes.

We have developed a cryopreserved version of rilparencel that allows for long-term product preservation to be used in our Phase 3 trial of rilparencel (called PROACT 1 or REGEN-006), as well as our Phase 2 trial of rilparencel (called REGEN-007).

In addition to the cryopreserved formulation of rilparencel, we used a gelatin-based hydrogel formulation in our Phase 2 trials (called RMCL-002 and REGEN-003) and Phase 1 trial in CAKUT (called REGEN-004).

Our Team and Corporate History

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Since our founding, we have expanded our team to incorporate additional expertise as needed to pursue our goal of becoming a fully integrated biopharmaceutical company.

We have assembled key management team members with expertise in kidney disease, cell therapy, development, regulatory affairs, operations, quality, manufacturing and commercial.

We have assembled key management team members with expertise in kidney disease, cell therapy, development, regulatory affairs, operations, quality and manufacturing.

ProKidney LLC, formerly, a wholly owned subsidiary of PKLP (“ProKidney Bermuda”), was formed in December 2018 as a Bermuda limited liability company and was founded by a group of investors in the pharmaceutical industry.

ProKidney (formerly known as RegenMed (Cayman) Ltd.

ProKidney (formerly known as inRegen and, prior to that, RegenMed (Cayman) Ltd.

(d/b/a inRegen)) (“ProKidney-KY”) was duly incorporated under the Companies Act (as amended) of the Cayman Islands (the “Cayman Islands Companies Act”) on December 21, 2015, as an exempted company.

In 2020, ProKidney-KY’s name was changed from RegenMed (Cayman) Ltd.

to ProKidney.

ProKidney, LLC

(formerly known as Twin City Bio LLC) (“ProKidney-US”) changed its name from Twin City Bio LLC to ProKidney, LLC.

to inRegen and subsequently changed to ProKidney.

ProKidney, LLC (formerly known as Twin City Bio LLC) (“ProKidney-US”) changed its name from Twin City Bio LLC to ProKidney, LLC.

ProKidney-US is a Delaware limited liability company formed on December 18, 2015.

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Key components of our business strategy include the following:

Obtain regulatory approval for, and successfully commercialize, REACT, initially as a treatment for patients with CKD caused by type 2 diabetes.

We intend to continue to pursue the clinical development of REACT through a global Phase 3 clinical development program that has been reviewed by both the EMA and the FDA.

We activated the first site for our first Phase 3 clinical trial, REGEN-006 (which we also call “PROACT 1”), in the fourth quarter of 2021 with the first Informed Consent Form signed and the first subject randomized into the trial in the first quarter of 2022.

The Company plans to submit protocol amendments for this study to regulatory agencies in early 2024 and anticipates resuming enrollment of subjects during the first half of 2024.

Our second Phase 3 trial, REGEN-016 (which we also call “PROACT 2”), is expected to have site activations throughout 2024.

Enrollment for REGEN-016 is anticipated to begin in the second half of 2024.

A long-term follow-up trial, REGEN-008, for subjects who received REACT as part of our trials, launched in the fourth quarter of 2023.

Obtain regulatory approval for, and successfully commercialize, rilparencel, initially as a treatment for patients with CKD and diabetes.

We intend to continue to pursue the clinical development of rilparencel through our Phase 3 REGEN-006 trial that has been reviewed by the FDA.

We activated the first site for our ongoing REGEN-006 (which we also call “PROACT 1”), in the fourth quarter of 2021 with the first Informed Consent Form signed and the first subject randomized into the trial in the first quarter of 2022.

We believe that PROACT 1 could be sufficient to support a potential Biologics License Application (“BLA”) submission.

Further, we believe that the accelerated approval pathway is available to rilparencel and that we could consider eGFR slope as a surrogate endpoint for accelerated approval.

We are continuing to engage with the FDA, under our RMAT designation, to further define the details supporting this accelerated pathway.

In addition to PROACT 1, we are also sponsoring a long-term follow-up trial, REGEN-008, for subjects who received rilparencel as part of our trials.

This study was launched in the fourth quarter of 2023.

Maintain and continually refine our sophisticated internal expertise in manufacturing our products.

We have developed and built a manufacturing facility, intended to be operated in compliance with current good manufacturing practices (“cGMPs”), in which we manufacture rilparencel for clinical trials and plan to continue to develop for purposes of the eventual commercial manufacturing process, assuming receipt of necessary regulatory approvals.

Our current manufacturing facility is capable of manufacturing product for our ongoing clinical trials and could serve as our commercial launch facility.

We anticipate expanding our manufacturing footprint within our existing premises to meet demand for rilparencel upon commercialization.

Discover and develop additional product candidates for the treatment of kidney diseases utilizing our cell therapy approach.

Our team has extensive experience in discovery research and deep expertise in kidney disease.

While executing its primary mission to develop and commercialize REACT, our team will investigate additional disease pathways associated with kidney disease, identify key targets for intervention and generate product candidates against these targets.

While executing its primary mission to develop and commercialize rilparencel, our team will investigate additional disease pathways associated with kidney disease, identify key targets for intervention and generate product candidates against these targets.

We may also in-license from, collaborate with, or acquire third parties to develop product candidates that we, based on our understanding of kidney diseases and pathways, believe are promising therapeutics.

Maintain and continually refine our sophisticated internal expertise in manufacturing our products .

We have developed and built a manufacturing facility, intended to be operated in compliance with current good manufacturing practices (“cGMP”), in which we manufacture REACT for clinical trials and plan to continue to develop for purposes of the eventual commercial manufacturing process, assuming receipt of necessary regulatory approvals.

Our current manufacturing facility is capable of manufacturing product for our Phase 3 clinical trials and could serve as our commercial launch facility.

We anticipate expanding our manufacturing footprint to meet demand for REACT upon commercialization.

Kidney Disease Overview

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data from the 2018 National Health and Nutritional Examination Survey, we expect the aggregate CKD population in the United States and European Union to grow from approximately 70 million in 2020 to approximately 80 million in 2030 and approximately 93 million in 2040.

The most common causes of CKD among adults are diabetes, hypertension, and glomerular disease, and in the pediatric population, CAKUT.

In the United States, it is believed that approximately 3.2 million patients per year suffer from stage 3b or 4 CKD and 1.2 to 1.8 million of those patients could be eligible for treatment with REACT.

The most common causes of CKD among adults are diabetes, hypertension, and glomerular disease.

Our Approach:

Working to Preserve Kidney Function through Autologous Cell Therapy

Autologous cell therapy refers to the prevention or treatment of human disease by administering a person’s own cells that have been selected, multiplied and formulated outside the body and subsequently injected into the body of the patient from whom the cells were derived.

Autologous cell therapy refers to the prevention or treatment of human disease by administering a person’s own cells that have been expanded, selected and formulated outside the body and subsequently injected into the body of the patient from whom the cells were derived.

We believe that our technology has the potential to preserve kidney function by using a patient’s own SRC.

REACT is an autologous homologous cell admixture, which means it is made from expanded SRC obtained from each individual subject’s own kidney biopsy tissue.

Preparing REACT begins when a biopsy of the diseased kidney is sent to our laboratory where the kidney cells are expanded and SRC selected.

We are able to identify the patient’s own healthy progenitor cells and formulate them into a personalized product.

Rilparencel is an autologous cell therapy.

It includes a homologous cell mixture, SRC prepared from each individual subject’s own kidney biopsy tissue.

Preparing rilparencel begins when a biopsy of the diseased kidney is sent to our laboratory where the kidney cells are expanded and SRC selected.

SRC are formulated into a cryopreserved product at a concentration of approximately 100 x 10 6 cells/mL and shipped frozen to the clinical site where they can be injected into the cortex of the damaged kidney of the patient.

Due to one severe bleed that occurred during an early REACT injection procedure, we switched to the use of a noncutting needle design for the REACT procedure.

Based on preclinical studies, when the manufactured REACT product is injected into the cortex of the diseased kidney, the product’s progenitor cells rapidly distribute throughout the kidney and integrate into the damaged nephrons and interstitium.

To date, clinical studies suggest that treatment with REACT in patients with CKD caused by type 2 diabetes may positively impact kidney function by stabilizing eGFR or attenuating the rate of eGFR decline.

Other improvements observed with preclinical and clinical REACT treatment include metabolic, as well as filtration benefits, stabilization and/or reduction in UACR, increased kidney cortical thickness, improved hemoglobin levels, and improvements in calcium phosphate and vitamin D3.

Mechanism of Action of REACT

Engraftment of SRC is believed to provide the molecular and mechanistic basis for activation of endogenous renal repair mechanisms that are still active in the chronically diseased kidney.

Non-clinical studies in multiple animal models of CKD have demonstrated that SRC injected directly into the kidney cortex were capable of effecting a regenerative response in multiple locations of the nephron through direct engraftment or tissue replacement and through a putative paracrine mechanism involving the effect of secreted factors.

Due to one severe bleed that occurred during an early rilparencel injection procedure, we switched to the use of a noncutting needle design for the rilparencel procedure.

In non-clinical studies, SRCs injected into the cortex of a diseased kidney were found to

distribute from the injection site to throughout the kidney, with localization in the peritubular, juxta-tubular and intratubular regions.

To date, clinical studies suggest that treatment with rilparencel in patients with CKD and type 2 diabetes may positively impact kidney function, shown by a stabilization in eGFR or attenuations in the rate of eGFR decline.

Other improvements observed with non-clinical and clinical SRC treatment include metabolic, as well as filtration benefits, stabilization and/or reduction in urinary albumin-creatinine ratio (“UACR”), increased kidney cortical thickness, improved hemoglobin levels, and improvements in calcium phosphate and vitamin D3.

Mechanism of Action of Rilparencel

SRC, injected into the kidney cortex, are believed to provide a molecular and mechanistic basis for activation of endogenous renal repair mechanisms that are still active in the chronically diseased kidney.

Non-clinical studies in multiple animal models of CKD have demonstrated that SRC injected directly into the kidney cortex could affect a reparative response in multiple locations of the nephron through direct cell-cell communication utilizing putative autocrine/paracrine mechanisms involving secreted factors.

In animal models of CKD, treatment with SRC preserved kidney function, reduced proteinuria and provided a significant survival benefit.

Additionally, there is evidence from preclinical models suggesting that injected SRC may augment other important kidney functions related to bone and mineral metabolism and hematopoiesis.

Additionally, there is evidence from non-clinical models suggesting that injected SRC may augment other important kidney functions related to bone and mineral metabolism and hematopoiesis.

In animal models of CKD, SRC have been shown to minimize the development of osteoclastic bone resorption, which is characteristically due to secondary hyperparathyroidism in CKD, and improve cellularity in marrow related to red blood cell production.

Our Product Candidate

REACT is currently in Phase 3 development, as well as ongoing Phase 2 clinical trials, for the treatment of moderate to severe CKD caused by type 2 diabetes.

These trials are planned to be conducted at approximately 150 clinical sites based in the United States, Europe, Asia and Latin America.

To date, clinical studies in participants with CKD caused by type 2 diabetes suggest that treatment with REACT may delay or prevent renal replacement therapy (“RRT”) by stabilizing eGFR.

Other potential improvements observed with REACT in earlier studies include stabilization in UACR, increased kidney cortical thickness, improvement in serum bicarbonate, and stabilization of hemoglobin levels.

The potential benefits of REACT will be evaluated in the phase 3 program which includes two adequate and controlled clinical trials.

The ongoing clinical development program utilizes a percutaneous injection method into the kidney that is conducted using conscious sedation in an outpatient same-day procedure.

Rilparencel is currently in Phase 3 development, as well as an ongoing Phase 2 clinical trial, for the treatment of moderate to severe CKD and diabetes.

We plan to conduct our Phase 3 study, PROACT 1, at approximately 75 clinical sites based in the United States, Asia and Latin America.

To date, clinical studies in participants with CKD and diabetes suggest that treatment with rilparencel may delay or prevent renal replacement therapy (“RRT”) by stabilizing eGFR.

Other potential improvements observed with rilparencel in earlier studies include stabilization in UACR, increased kidney cortical thickness, improvement in serum bicarbonate, and stabilization of hemoglobin levels.

The potential benefits of rilparencel will be evaluated in the Phase 3 study.

The ongoing clinical development program utilizes an image-guided percutaneous injection method into the kidney that is conducted using conscious sedation in an outpatient same-day procedure.

The procedure appears to be generally well tolerated with the most commonly observed procedure related events including nausea, vomiting, fever, and hematuria with kidney biopsy.

In the RMCL-002

trial, which used a different formulation of the REACT product and a different procedure from that presently used in our Phase 3 trials, one participant experienced serious adverse events that included scarring or fibrosis and a decrease in kidney function.

In the RMCL-002 trial, which used a different formulation of the rilparencel product and a different procedure method from that presently used in our Phase 3 trials, one participant experienced serious adverse events that included scarring or fibrosis and a decrease in

kidney function.

A second participant experienced decreased kidney blood flow observed on contrast-enhanced computerized tomography (“CT”) imaging and a decrease in kidney function.

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Pharmacological therapy may include the administration of any or all of the following:

angiotensin converting enzyme inhibitors and/or angiotensin receptor blockers, sodium-glucose cotransporter-2 (SGLT-2) inhibitors, nonsteroidal mineralocorticoid receptor antagonists, insulin and/or anti-diabetic agents for glycemic control and lipid lowering therapy.

angiotensin converting enzyme (“ACE”) inhibitors or angiotensin receptor blockers (“ARB”), sodium-glucose cotransporter-2 (SGLT-2) inhibitors, nonsteroidal mineralocorticoid receptor antagonists (“nsMRAs”), insulin and/or other anti-diabetic agents for glycemic control and lipid lowering therapy.

When a patient reaches ESRD, RRT in the form of kidney dialysis or transplantation is generally required to prolong life.

The vast majority of dialysis patients in the United States and certain other developed countries receive dialysis primarily in the form of hemodialysis, peritoneal dialysis or home hemodialysis.

The vast majority of dialysis patients in the United States and certain other developed countries receive dialysis primarily in the form of center hemodialysis, peritoneal dialysis or home hemodialysis.

Dialysis removes toxins that accumulate in the absence of normally functioning kidneys;

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If a patient can secure a kidney for transplantation, long-term immunosuppressive therapy is required to prevent rejection.

Use of immunosuppresants results in a higher incidence of infection and, over the long term, some types of cancer.

Use of immunosuppressants results in a higher incidence of infection and, over the long term, some types of cancer.

And while xenotransplantation might be a promising alternative approach in the future to bridge the gap between the supply and demand of human organs, tissues, and cells, immunological barriers are limiting factors in clinical xenotransplantation at the current time.

While patients continue to lose kidney function while on existing therapies, the cost of CKD treatment is high and the rates of CKD and ESRD, along with the associated expenditures, are expected to continue to rise.

A major source of healthcare expenditure in the United States, the annual Medicare spend on beneficiaries with CKD is approximately $86 billion.

Medicare spend on beneficiaries with ESRD is approximately $52 billion, with Medicare Advantage comprising approximately $18 billion, with total annual cost per patient on dialysis exceeding $95,000.

A major source of healthcare expenditure in the United States, the annual Medicare fee-for-service (“FFS”) spending for all beneficiaries with CKD was $86.1 billion in 2021, or 22.6% of total spend, and patients with ESRD accounted for $52.3 billion of spend.

ESRD only affects 1% of Medicare beneficiaries but historically has accounted for approximately 7% of Medicare spending, and dialysis treatments account for a large part of the economic burden.

Per-person per-year (“PPPY”) expenditures in 2021 for all dialysis ESRD patients on Medicare averaged $82,167.

On the private insurance side, dialysis is significantly more expensive than Medicare.

Mean spending in the first 12 months after a patient started dialysis based on an analysis from 2015-2017 was $238,126 for private insurance compared to $80,509 for FFS Medicare.

Clinical Development

Our completed clinical trials and currently ongoing clinical trials of REACT are summarized below;

the name of the product candidate tested in the trials was changed after completion of some of the trials from Neo-Kidney Augment (“NKA”) to REACT.

Our completed clinical trials and currently ongoing clinical trials of rilparencel are summarized below;

the name of the product candidate tested in the trials was changed after completion of some of the trials from Neo-Kidney Augment (“NKA”) to REACT or rilparencel.

The summary below also includes interim results which are based on a preliminary analysis of then available data, the results, related findings and conclusions of which are subject to change following a more comprehensive review of the data related to the specific trial.

In particular, we announced ad hoc interim results from our ongoing RMCL-002 Phase 2 clinical trial in November 2023.

We submitted final results from our completed REGEN-003 Phase 2 clinical trial and REGEN-004 Phase 1

clinical trial to the FDA in late 2023.

We have initiated enrollment of REGEN-006 Phase 3 clinical trial and the REGEN-016 Phase 3 clinical trial is expected to commence in 2024.

In particular, we announced interim results from our ongoing REGEN-007 Phase 2 clinical trial in June 2024.

Interim results from clinical trials that we may complete are not necessarily indicative of results from future data and are subject to the risk that one or more of the clinical outcomes may materially change as more patient data become available.

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

CKD Caused by Diabetes

Phase 1 Clinical Development (TNG-CL010 and TNG-CL011)

TNG-CL010 was an open-label safety and delivery optimization study of REACT (formerly known as NKA) conducted in Sweden in subjects with CKD.

CKD and Diabetes or CAKUT

Phase 1 Clinical Development (TNG-CL010, TNG-CL011, REGEN-004 and REGEN-015)

TNG-CL010 was an open-label safety and delivery optimization study of rilparencel (formerly known as NKA) conducted in Sweden in subjects with CKD.

TNG-CL010 commenced in April 2013 and completed in December 2014.

TNG-CL011 was also an open-label safety and delivery optimization study of REACT in subjects with CKD caused by type 2 diabetes and CKD conducted in the United States.

TNG-CL011 was also an open-label safety and delivery optimization study of rilparencel in subjects with CKD and type 2 diabetes and CKD conducted in the United States.

TNG-CL011 commenced with first subject enrolled in February 2014 and completed in December 2014.

The primary objective of these trials was to assess the safety and delivery of REACT when injected into one kidney.

Six subjects from Sweden (TNG-CL010) and one from the United States with CKD caused by type 2 diabetes, ranging in age from 53-70 years, eGFR levels between 19-34 (average 25 +/- 2, Cystatin C) and iohexol clearance of 15-39 (average 26 +/- 3), were enrolled.

One subject with CKD caused by type 2 diabetes was enrolled in TNG-CL011.

The results from the Phase 1 trials indicate that REACT was well tolerated when administered to the kidney, with no adverse events from REACT.

When the decline of kidney function pre-and post- injection were compared, the subjects receiving REACT in this Phase 1 trial had an imputed delay in dialysis of approximately 1.5 years beyond the standard of care based on a reduced rate of decline in eGFR from pre-injection baseline.

The primary objective of these trials was to assess the safety and delivery of rilparencel when injected into one kidney.

Six subjects from Sweden (TNG-CL010) and one from the United States with CKD and type 2 diabetes, ranging in age from 53-70 years, eGFR levels between 19-34 (average 25 +/- 2, Cystatin C) and iohexol clearance of 15-39 (average 26 +/- 3), were enrolled.

One subject with CKD and type 2 diabetes was enrolled in TNG-CL011.

The results from the Phase 1 trials indicate that rilparencel was well tolerated when administered to the kidney, with no adverse events from rilparencel.

When the decline of kidney function pre-and post- injection were compared, the subjects receiving rilparencel in this Phase 1 trial had an imputed delay in dialysis of approximately 1.5 years beyond the standard of care based on a reduced rate of decline in eGFR from pre-injection baseline.

Cortical thickness increased in the injected kidney from an average of 14 mm at time of injection to approximately 16 mm after one year.

Kidney function was preserved following the REACT injection by iohexol clearance and based on the subjects’ ACRs.

Subjects with a baseline anemia (n = 3 of 7) showed improved hemoglobin levels after REACT injection, and the remaining subjects maintained normal levels during the study.

Antihypertensive medication was reduced in three of six subjects during the first six months following injection with REACT.

The data from TNG-CL011 were accepted by FDA as part of a clinical data package submitted to progress to Phase 2.

Kidney function was preserved following the rilparencel injection by iohexol clearance and based on the subjects’ ACRs.

Subjects with a baseline anemia (n = 3 of 7) showed improved hemoglobin levels after rilparencel injection, and the remaining subjects maintained normal levels during the study.

Antihypertensive medication was reduced in three of six subjects during the first six months following injection with rilparencel.

The data from TNG-CL011 was accepted by FDA as part of a clinical data package submitted to progress to Phase 2.

Phase 2 Clinical Development (RMCL-001, RMCL-002, REGEN-003, and REGEN-007)

RMCL-001 is a Phase 2, open-label safety and efficacy study of REACT in subjects with CKD caused by type 2 diabetes.

RMCL-001 was a Phase 2, open-label safety and efficacy study of rilparencel in subjects with CKD and type 2 diabetes.

The study commenced in May 2016 and ended in May 2017.

The primary objective of this study was to assess the safety and efficacy of a second REACT injection using a minimally invasive percutaneous procedure that was done under conscious sedation as a same-day outpatient procedure.

The primary objective of this study was to assess the safety and efficacy of a second rilparencel injection using a minimally invasive percutaneous procedure that was done under conscious sedation as a same-day outpatient procedure.

A single subject with an eGFR of 14 ml/min/1.73m 2 was enrolled from the Phase 1 study (TNG-CL011) described above.

The second dose of REACT was manufactured from cryopreserved kidney cells obtained from the Phase 1 kidney biopsy.

The second dose of rilparencel was manufactured from cryopreserved kidney cells obtained from the Phase 1 kidney biopsy.

The subject was administered a dose of 3x10 6 cells/g-KW est .

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The study was terminated by the sponsor of the clinical trial after this subject went onto dialysis and resources were diverted to study RMCL-002.

RMCL-002 is a Phase 2, prospective, randomized, double-arm, deferred treatment, open-label, repeat dose, safety and efficacy study of REACT in subjects with type 2 diabetes and CKD.

RMCL-002 was a Phase 2, prospective, randomized, double-arm, deferred treatment, open-label, repeat dose, safety and efficacy study of rilparencel in subjects with type 2 diabetes and CKD.

The first subject was enrolled in this study in February 2017, and all subjects have completed follow-up.

The primary objective of this study was to assess the safety and efficacy of up to two REACT injections given six months apart (up to four weeks after target date) in patients with CKD caused by type 2 diabetes with eGFRs between 20 and 50 ml/min/1.73m 2 , with both doses delivered into the biopsied kidney using an outpatient, minimally invasive, percutaneous approach under conscious sedation completed in less than 90 minutes.

Patients received two doses of REACT of 3x10 6 cells/g-KW est each.

The primary objective of this study was to assess the safety and efficacy of up to two rilparencel injections given six months (+ 4 weeks) apart in patients with CKD and type 2 diabetes with eGFRs between 20 and 50 ml/min/1.73m 2 , with both doses

delivered into the biopsied kidney using an outpatient, minimally invasive, percutaneous approach under conscious sedation completed in less than 90 minutes.

Patients received two doses of rilparencel of 3x10 6 cells/g-KW est each.

Patients were randomized (1:1) to the active treatment group and the deferred treatment group (i.e., the control group) following kidney biopsy.

Subjects in the active treatment group received their first REACT injection as soon as the REACT product was manufactured and shipped to the clinical site.

Subjects in the active treatment group received their first rilparencel injection as soon as the rilparencel product was manufactured and shipped to the clinical site.

After six months (up to four weeks after target date), a second injection was given, as appropriate.

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The deferred treatment group allowed assessment of the rate of change in kidney function and co-morbidities in a nonexposed group compared to the active treatment arm.

During this time, they received contemporaneous, standard-of-care

therapy for CKD while undergoing follow-up evaluations every three months, similar to subjects in the active treatment group.

After 12 months, subjects from the deferred treatment group received up to two REACT injections given six months apart (+/- four weeks of the target date), as appropriate.

Consequently, the study design included a randomized control group receiving standard-of-care treatment for the first 12 months and a randomized, active treatment group receiving up to two REACT injections and follow-up evaluations during the same period of time.

During this time, they received contemporaneous, standard-of-care therapy for CKD while undergoing follow-up evaluations every three months, similar to subjects in the active treatment group.

After 12 months, subjects from the deferred treatment group received up to two rilparencel injections given six months apart (+/- four weeks of the target date), as appropriate.

Consequently, the study design included a randomized control group receiving standard-of-care treatment for the first 12 months and a randomized, active treatment group receiving up to two rilparencel injections and follow-up evaluations during the same period of time.

The aggregate number of subjects enrolled in the Phase 2 clinical trial was 83.

Upon withdrawal and/or replacement of 2 subjects, 81 subjects were enrolled as of December 2020, of which 41 subjects were enrolled into the active treatment group and 42 subjects were enrolled into the deferred treatment group.

We anticipate final results for safety and efficacy to be available in the first half of 2024.

The rate of progression of kidney function for the active treatment group, assessed via pre-randomized serial measurements of eGFR over 24 months after the last REACT injection, will be compared to that of the deferred treatment group.

In addition, each subject’s baseline rate of eGFR decline, derived from historical and clinical data, will be compared to the individual subject’s rate of eGFR decline through 24 months following the final REACT injection.

The rate of progression of kidney function of subjects, if any, who received a single REACT injection may be compared against that of subjects who received two REACT injections.

Patients were followed for 24 months after their last REACT injection in part 1 of the trial.

Upon withdrawal and/or replacement of two subjects, 81 subjects were enrolled as of December 2020, of which 41 subjects were enrolled into the active treatment group and 42 subjects were enrolled into the deferred treatment group.

The final results for safety and efficacy were presented at the 61 st ERA Congress in May 2024.

The rate of progression of kidney function for the active treatment group, assessed via pre-randomized serial measurements of eGFR over 24 months after the last rilparencel injection, was compared to that of the deferred treatment group.

In addition, each subject’s baseline rate of eGFR decline, derived from historical and clinical data, was compared to the individual subject’s rate of eGFR decline through 24 months following the final rilparencel injection.

Patients were followed for 24 months after their last rilparencel injection in part 1 of the trial.

An open label extension portion of the study (part 2) was added in February 2021 to follow all subjects for an additional 3 years.

Visits will be conducted at 3-month intervals to give a total of 5 years (part 1 + part 2) of follow-up after the last REACT injection.

Updated interim data from the study were released in November 2023 and included data from the 83 patients enrolled.

The interim dataset revealed a safety profile in line with previously reported data from earlier Phase 1 and Phase 2 trials, with tolerability similar to that of a routine kidney biopsy.

Overall, the updated trial data demonstrated REACT’s potential for kidney function preservation in patients with advanced CKD caused by type 2 diabetes, with the most notable potential benefit shown in patients who had the highest risk of kidney failure (CKD Stage 4 with moderate to severe albuminuria).

We expect to provide final results for safety and efficacy of RMCL-002 Phase 2 study in the first half of 2024.

Results from interim data may not be indicative of results from future data.

REGEN-003 is a completed Phase 2, prospective open-label, single-arm, safety and tolerability study of REACT in subjects with CKD caused by type 2 diabetes, specifically those with high-risk late Stage 4 DKD.

Visits will be conducted at 3-month intervals to give a total of 5 years (part 1 + part 2) of follow-up after the last rilparencel injection.

The final results indicated a safety profile in line with previously reported data from earlier Phase 1 and Phase 2 trials, with tolerability similar to that of a routine kidney biopsy.

Overall, the trial data demonstrated rilparencel’s potential for kidney function preservation in patients with advanced CKD and type 2 diabetes, with the most notable potential benefit shown in patients who had the highest risk of kidney failure (CKD Stage 4 with moderate to severe albuminuria).

REGEN-003 is a completed Phase 2, prospective open-label, single-arm, safety and tolerability study of rilparencel in subjects with CKD and type 2 diabetes, specifically those with high-risk late Stage 4 CKD.

This study enrolled its first patient in March 2018.

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Clinical study results were submitted to the FDA on September 8, 2023.

The primary objective of this study was to assess the safety and efficacy of up to two REACT injections given six months apart (up to four weeks after target date) in patients with CKD caused by type 2 diabetes and with eGFRs between 14 and 20 ml/min/1.73m 2 and delivered into the biopsied kidney using a minimally invasive percutaneous approach that can be delivered under conscious sedation in less than 90 minutes.

Subjects have an eGFR of between 14—20 ml/min/1.73m 2 .

Subjects receive up to two doses of REACT of 3x10 6 cells/g-KW est each.

This study enrolled a total of ten adults (5 men and 5 women).

Following a percutaneous kidney biopsy and ex vivo expansion of SRC that form REACT, the REACT product was injected into the cortex of the biopsied kidney with CT image guidance.

Nine participants received two doses of the REACT product at 6-month intervals;

The primary objective of this study was to assess the safety and efficacy of up to two rilparencel injections given six months apart (up to four weeks after target date) in patients with CKD and type 2 diabetes and with eGFRs between 14 and 20 ml/min/1.73m 2 .

Subjects received up to two doses of rilparencel of 3x10 6 cells/g-KW est each delivered into the biopsied kidney using a minimally invasive percutaneous approach.

This study enrolled a total of ten adults (five men and five women).

Following a percutaneous kidney biopsy and ex vivo expansion of SRC that form rilparencel, the rilparencel product was injected into the cortex of the biopsied kidney with CT image guidance.

Nine participants received two doses of the rilparencel product at six-month intervals;

one participant received only one injection.

A 6-month observation period pre-trial was required to establish a patient’s “own” baseline and rate of CKD progression.

A six-month observation period pre-trial was required to establish a patient’s “own” baseline and rate of CKD progression.

There were no cell product-related serious adverse events reported.

Serious renal-linked adverse events related to the REACT procedure were reported in three participants, including acute kidney injury, CKD progression, renal arteriovenous fistula and hematomas, each of which required observation without transfusion or angiographic interventions.

Serious renal-linked adverse events related to the rilparencel procedure were reported in three participants, including acute kidney injury, CKD progression, renal arteriovenous fistula and hematomas, each of which required observation without transfusion or angiographic interventions.

At the final analysis, median time to dialysis was 19.4 months (interquartile range 13.3-27.9).

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One patient died due to complications related to COVID, and an additional subject died due to a myocardial infarction approximately 18 months after enrollment.

The results from this study suggest that REACT has the potential to delay dialysis in high-risk Stage 4 and Stage 5 DKD patients.

REGEN-007 is an ongoing Phase 2, prospective, randomized, open-label, repeat dose, two cohort, safety and efficacy study of REACT in subjects with type 1 or 2 diabetes and CKD.

The primary objective of Cohort 1 is to assess the safety and efficacy of up to two REACT injections given three months apart (up to 60 days after target date) in patients with CKD caused by type 1 and 2 diabetes with eGFRs between 20 and 50

ml/min/1.73m 2 and delivered into biopsied and non-biopsied contralateral kidneys using a minimally invasive percutaneous approach.

Additionally, the primary objective of Cohort 2 is to administer a single REACT injection followed by monitoring and a potential administration of a second REACT injection delivered into the non-biopsied contralateral kidney triggered by a 20% decrease in eGFR and/or a 30% increase in urinary albumin-creatinine ratio (UACR) delivered within approximately 60 days of the trigger being met.

In previous Phase 2 studies we injected REACT into the same kidney twice.

Based on a generally favorable safety profile observed in previous studies, in REGEN-007 we are now proceeding with the injection of REACT into both kidneys.

We expect the data generated by REGEN-007 will enable us to better understand the impact of REACT on kidney function from injections in both kidneys, which is the dosing regimen for our phase 3 study.

By injecting both kidneys, patients have maximal exposure to REACT cells, with the potential to impact a greater proportion of kidney mass.

The results from this study suggest that rilparencel has the potential to delay dialysis in high-risk Stage 4 and Stage 5 CKD patients.

REGEN-007 is an ongoing Phase 2, prospective, randomized, open-label, repeat dose, two group, safety and efficacy study of rilparencel in subjects with type 1 or 2 diabetes and CKD.

The primary objective of Group 1 is to assess the safety and efficacy of up to two rilparencel injections given three months apart (up to 60 days after target date) in patients with CKD and type 1 and 2 diabetes with eGFRs between 20 and 50 ml/min/1.73m 2 and delivered into biopsied and non-biopsied contralateral kidneys using a minimally invasive percutaneous approach.

Additionally, the primary objective of Group 2 is to administer a single rilparencel injection followed by monitoring and a potential administration of a second rilparencel injection delivered into the non-biopsied contralateral kidney triggered by a 20% decrease in eGFR and/or a 30% increase in urinary albumin-creatinine ratio (UACR) delivered within approximately 60 days of the trigger being met.

In previous Phase 2 studies we injected rilparencel into the same kidney twice.

Based on a generally favorable safety profile observed in previous studies, in REGEN-007 we are now proceeding with the injection of rilparencel into both kidneys.

We expect the data generated by REGEN-007 will enable us to better understand the impact of rilparencel on kidney function from injections in both kidneys, which is the dosing regimen for our Phase 3 study.

By injecting both kidneys, patients have maximal exposure to rilparencel cells, with the potential to impact a greater proportion of kidney mass.

Further, the number of glomeruli (the filtering units of the kidney) that are amenable to regenerative therapy is effectively doubled when injecting both kidneys.

Subjects will receive up to two injections of REACT of 3x10 6 cells/g-KW est per dose.

Subjects will receive up to two injections of rilparencel of 3x10 6 cells/g-KW est per dose.

The study will enroll subjects between the ages of 30 and 80 with an eGFR >20 and ≤50 mL/min/1.73m 2 .

Subjects will be randomized (1:1) before kidney biopsy into two cohorts.

Cohort 1 will receive the two REACT injections three months apart.

Cohort 2 will receive the first REACT injection, and a trigger, as described below, must be met to qualify for the second REACT injection more than three months after the first dose.

Each of the subjects in cohort 1 will receive the first REACT injection as soon as the REACT product is manufactured and shipped to the clinical site.

Subjects will be randomized (1:1) before kidney biopsy into two groups.

Group 1 will receive the two rilparencel injections three months apart.

Group 2 will receive the first rilparencel injection, and a trigger, as described below, must be met to qualify for the second rilparencel injection more than three months after the first dose.

Each of the subjects in Group 1 will receive the first rilparencel injection as soon as the rilparencel product is manufactured and shipped to the clinical site.

After three months, subjects will receive a second injection, as appropriate.

Subjects in cohort 2 will also receive one REACT injection as soon as the REACT product is manufactured and shipped to the clinical site.

For cohort 2, a second REACT injection will only be administered if a subject meets one or more clinical surrogate marker criteria.

The second REACT injection will be administered to subjects in cohort 2 no less than three months after the first injection, within 30 days (up to four weeks after target date) of meeting the re-dose trigger.

Subjects in Group 2 will also receive one rilparencel injection as soon as the rilparencel product is manufactured and shipped to the clinical site.

For Group 2, a second rilparencel injection will only be administered if a subject meets one or more clinical surrogate marker criteria.

The second rilparencel injection will be administered to subjects in Group 2 no less than three months after the first injection, within 30 days (up to four weeks after target date) of meeting the re-dose trigger.

The re-dose triggers include (1) a 30-day sustained decline in eGFR by at least 20% from baseline and (2) an increase in the baseline UACR of at least 30% greater than 30mg/gram, measured 30 days after the baseline measurement is taken.

For all subjects who receive a second injection, the second injection will be administered in the non-biopsied contralateral kidney.

During this time, subjects in cohort 2 will receive contemporaneous, standard-of-care therapy for CKD while undergoing follow-up evaluations at one, 14 (up to 7 days after target date) and 28 days (up to 7 days after target date) following the first injection, and then at three months (up to 10 days after target date) following the first injection, similar to subjects in cohort 1.

During this time, subjects in Group 2 will receive contemporaneous, standard-of-care therapy for CKD while undergoing follow-up evaluations at one, 14 (up to 7 days after target date) and 28 days (up to 7 days after target date) following the first injection, and then at three months (up to 10 days after target date) following the first injection, similar to subjects in Group 1.

All subjects will continue with long-term follow-up visits at three month intervals for a period of 18 months following the last injection.

In addition, each subject’s baseline rate of kidney decline, based on adequate historical, clinical data obtained 24 months prior to the first REACT injection, will serve as a comparator for monitoring the rate of progression of renal insufficiency over time.

In addition, each subject’s baseline rate of kidney decline, based on adequate historical, clinical data obtained 24 months prior to the first rilparencel injection, will serve as a comparator for monitoring the rate of progression of renal insufficiency over time.

The primary efficacy endpoint of REGEN-007 is attenuation of the rate of kidney function decline as indicated by the change from pre-injection baseline value in total (acute + chronic) slope of eGFR over 18 months.

The primary safety endpoint is treatment-emergent adverse events through 18 months following the last REACT injection.

REGEN-007 is an unblinded study in which cohort 1 patients will receive the same treatment regimen as the patients in our Phase 3 program that are randomized to the active arms.

We believe that REGEN-007 may provide some insights regarding the clinical benefit that could be observed in our Phase 3 program.

We have completed enrollment in REGEN-007 with a total of 53 subjects.

We anticipate reporting interim data from this study reflecting twelve months of follow-up from a limited number of Cohort 1 patients in mid 2024 and full twelve month data for Cohort 1 in the first half of 2025.

The primary safety endpoint is treatment-emergent adverse events through 18 months following the last rilparencel injection.

REGEN-007 is an unblinded study in which Group 1 patients will receive the same treatment regimen as the patients in our Phase 3 program that are randomized to the active arms.

We believe that REGEN-007 may provide insight regarding the clinical benefit that could be observed in our Phase 3 program.

We completed enrollment in REGEN-007 with a total of 53 subjects.

In Group 1, as of May 7, 2024, patients with at least 12 months follow-up after the second injection of rilparencel (n=13) show stabilized kidney function for 18 months (average eGFR change from baseline to 18 months was -1.3 mL/min/1.73m 2 ).

Importantly, similar results were observed in a subset of these patients (n=10) who met key inclusion criteria currently used in our Phase 3 clinical study program (average eGFR change from baseline to 18 months was -0.6 mL/min/1.73m 2 ).

Additional analyses will be performed as Group 1 data matures.

Twenty-five patients received at least one rilparencel injection in Group 2;

12 patients received a second rilparencel injection based on eGFR criteria (n=3) or UACR criteria (n=9).

No rilparencel-related serious adverse events were observed across all patients in the study who received at least one rilparencel injection (n=49).

We anticipate reporting full Group 1 data from this study in the first half of 2025.

Multi-dose study REGEN-015 was a planned Phase 1 open-label study of rilparencel in subjects with CKD and type 1 or type 2 diabetes.

The intended purpose of this study was to evaluate the safety of supplemental rilparencel injections in participants who have previously received rilparencel treatment.

No patient received rilparencel and the study was closed in 2024.

REGEN-004 is a completed Phase 1, prospective, open-label, single-arm, safety, tolerability, and early efficacy study of rilparencel in subjects with CKD from CAKUT.

The primary objective of this study was to assess the safety and efficacy of up to two rilparencel injections given six months (up to four weeks after target date) apart and delivered into the biopsied kidney using a minimally invasive percutaneous approach that can be delivered under conscious sedation in less than 90 minutes in patients with CKD with eGFRs between 14 and 50 ml/min/1.73m2 due to CAKUT.

Five subjects were enrolled in this trial.

Subjects received two doses of rilparencel of 3x10 6 cells/g-KW est .

All five subjects received their first injection, and four subjects received both injections.

The trial concluded in January 2023 with the last patient, last visit.

Small mean decreases from baseline in eGFR were noted at almost all time points during the study.

Results show that the estimated rate (standard error) of eGFR decline was -0.4 (2.28) mL/min/1.73 m 2 per year during the Pre-Injection Period, -2.1 (1.35) mL/min/1.73 m 2 per year during the Post-Second Injection Period, and -1.4 (0.93) mL/min/1.73 m 2 per year during the Post-Injection Period.

Final results of this study were reported to the FDA in December 2023.

We are not pursuing this indication further at this time.

Phase 3 Clinical Development:

PROACT 1 and PROACT 2 (REGEN-006 and REGEN-016):

We applied for RMAT designation for REACT, which was granted by the FDA on October 28, 2021.

As contemplated by the RMAT designation and as directed by the FDA, we requested a comprehensive, multidisciplinary Type B meeting with the FDA to review the status of preclinical and clinical development and manufacturing of REACT and to discuss the planned clinical program intended to support approval of the product candidate.

REGEN-006 (PROACT 1) and REGEN-016 (PROACT 2):

We applied for Regenerative Medicine Advanced Therapy (“RMAT”) designation for rilparencel, which was granted by the FDA on October 28, 2021.

As contemplated by the RMAT designation and as directed by the FDA, we requested a comprehensive, multidisciplinary Type B meeting with the FDA to review the status of preclinical and clinical development and manufacturing of rilparencel and to discuss the planned clinical program intended to support approval of the product candidate.

The FDA provided detailed written responses to our questions included in the meeting request, and the Type B meeting was held in March 2022.

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renal or cardiovascular death.

In 2024, we completed a comprehensive internal and external review to determine the optimal path to bring rilparencel to patients in the U.S.

with type 2 diabetes and advanced CKD – a market where there is high unmet clinical and economic need.

An important conclusion of this review was that under the provisions of the RMAT designation, we believe rilparencel is eligible for initial FDA approval under an expedited approval pathway based upon successful completion of the ongoing Phase 3 REGEN-006 (PROACT 1) trial, and that the Phase 3 REGEN-016 (PROACT 2) trial is not required for initial U.S.

registration.

Thus, we discontinued REGEN-016 (PROACT 2), which was focused on enrollment outside the U.S.

Subsequently, we had a Type B meeting with the FDA to discuss updates to rilparencel’s registrational trial strategy.

The FDA confirmed that PROACT 1 could be sufficient to support a potential Biologics License Application (“BLA”) submission.

Additionally, the FDA confirmed that the accelerated approval pathway is available to rilparencel and that the Company could consider eGFR slope as a surrogate endpoint for accelerated approval.

We will continue to engage with the FDA, under our RMAT designation, to further define the details supporting this accelerated pathway.

We will continue to advance the U.S.

clinical development program with the benefit of enhanced clarity as to the FDA’s expectations and requirements for a registrational program, including the design of the trials needed for approval, manufacturing assays, and comparability studies, as set forth below.

REGEN-016/PROACT 2:

REGEN-016 (PROACT 2) is a planned Phase 3, randomized, blinded, sham control arm, bi-lateral kidney dose, controlled efficacy study of REACT in subjects with Stages 3b and 4 CKD caused by type 2 diabetes (specifically eGFR between 20 ml and 44 ml min/1.73m 2 with moderate to severe albuminuria (UACR between 300 and 5,000 mg/g)).

This study will be conducted in clinical centers in Europe, Latin America, Asia-Pacific and some United States centers.

The primary objective of this study is to assess the efficacy of up to two REACT injections given three months apart and delivered into biopsied and non-biopsied contralateral kidneys using a minimally invasive percutaneous approach.

Enrolled subjects will be stratified based upon stage of disease and standard of care (e.g., SGLT2 and/or MRA use) and then randomized (1:1) to the treatment group or the “masked” sham control group prior to kidney biopsy.

The total planned enrollment is 600 subjects.

Subjects in the treatment group will receive two injections of REACT of 3x10 6 cells/g-KW est .

The study will enroll subjects between the ages of 30 and 80 years of age with an eGFR >2 0 and <44 mL/min/1.73m 2 .

Each of the subjects in the treatment group will receive the first REACT injection in approximately 14 weeks following kidney biopsy.

After three months, it is intended that a second injection will be given into the contralateral kidney.

In contrast, subjects in the control group will receive two sham injections, the first of which will be administered 12 weeks following sham biopsy, and the second of which will be administered three months after the first sham injection.

During this time, subjects in the control group will receive contemporaneous, standard-of-care therapy for CKD while undergoing follow-up evaluations at the same time intervals as subjects in the treatment group.

All subjects will continue in the study until the global trial end date is announced and an end of study visit is completed.

The primary composite endpoint is the time from first injection to the earliest of:

at least 40% reduction in eGFR, using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days;

eGFR <15 mL/min/1.73m² using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days and/or chronic dialysis, and/or renal transplant;

renal or cardiovascular death.

A recent audit by the Company’s contracted Qualified Person (QP) to evaluate our readiness for release and distribution of REACT in the EU identified certain deficiencies in the documentation of the quality management systems to be addressed prior to release and distribution of product for EU clinical sites.

Manufacturing is therefore paused while we optimize our capabilities to meet EU and global standards for our Phase 3 program and prepare for a transition to commercial manufacturing.

No safety events have necessitated this pause.

We expect PROACT 2 will commence enrollment in the second half of 2024.

REGEN-006/PROACT 1 trial:

REGEN-006 (PROACT 1) is an ongoing Phase 3, randomized, blinded, bi-lateral kidney dose, sham control arm, controlled efficacy study of REACT in subjects with CKD caused by type 2 diabetes.

That study protocol is being amended to focus on a subset of patients with Stage 4 CKD (eGFR between 20 ml and 30 ml min/1.73m 2 ) and late Stage 3b CKD (eGFR between 30 ml and 35 ml min/1.73m 2 ) with accompanying albuminuria.

This study will be conducted in clinical centers in the United States, Canada, Australia, Mexico, Taiwan and the United Kingdom.

In concert with the Company’s pause of manufacturing to optimize its capabilities to meet EU and global standards for its Phase 3 program and prepare for a transition to commercial manufacturing, and based on the interim data from RMCL-002 and feedback from payer and health technology assessment (HTA) experts, the Company is proactively modifying REGEN-006 to increase probability of success.

The Company will modify the eGFR enrollment range from the current range of ≥20 to ≤ 50 ml/min/1.73m2 to a new range of ≥20 to ≤ 35 ml/min/1.73m 2 .

This modification reflects a focus on patients at highest risk of kidney disease progression.

These patients are also of particular interest to payers due to the significant cost burden associated with their medical care.

Based on feedback from clinical sites, the Company also intends to incorporate additional administrative changes to improve operational efficiencies and clinical site engagement.

No safety issues have required any of these protocol changes.

The Company anticipates submitting protocol amendments for this study to regulatory agencies in early 2024 and anticipates resuming enrollment of subjects during the first half of 2024.

The originally planned enrollment of 600 total subjects in this study will be increased to include the approximately 85 subjects already enrolled, for a total target enrollment of approximately 685 patients.

Subjects in the treatment group will receive two injections of REACT of 3x10 6 cells/g-KW est .

REGEN-006 (PROACT 1) is an ongoing Phase 3, randomized, blinded, bi-lateral kidney dose, sham control arm, controlled efficacy study of rilparencel in subjects with CKD and type 2 diabetes.

The related study protocol has been amended to focus on a subset of patients with Stage 4 CKD (eGFR between 20 and 30 mL/min/1.73m 2 ) and late Stage 3b CKD (eGFR between 30 and 35 mL/min/1.73m 2 with accompanying albuminuria UACR between 300 and 5000 mg/g).

This study will be conducted in clinical centers in the United States, Mexico, and Taiwan.

The primary objective of this study is to assess the efficacy of up to two rilparencel injections given three months apart and delivered into biopsied and non-biopsied contralateral kidneys using a minimally invasive percutaneous approach with a targeted enrollment of approximately 685 patients.

Subjects in the treatment group will receive two injections of rilparencel of 3x10 6 cells/g-KW est .

The primary composite endpoint is the time from first injection to the earliest of:

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Subjects will be randomized (1:1) to the treatment group and the “masked” sham control group prior to kidney biopsy.

Each of the subjects in the treatment group will receive the first REACT injection within about 14 weeks following kidney biopsy.

Each of the subjects in the treatment group will receive the first rilparencel injection within about 14 weeks following kidney biopsy.

After three months it is intended that a second dose be given into the contralateral kidney.

In contrast, subjects in the control group will receive two sham injections, the first of which will be administered 14 weeks following sham biopsy, and the second of which will be administered three months after the first sham injection.

During this time, subjects in the control (sham) group will receive contemporaneous, standard-of-care therapy for CKD while undergoing follow-up evaluations at one, 14 and 28 days (+7 days) following the first injection, and then at three months (+10 days) following the first injection, similar to subjects in the treatment group.

All subjects will continue in the study until the global trial end date is announced and an end of study visit is completed.

Other Clinical Development Studies

REGEN-008 is an ongoing Phase 3, prospective, open-label, observational master protocol study of REACT in subjects with diabetes and CKD who were previously enrolled and treated with REACT.

All subjects will continue in the study until the trial end date is announced and an end of study visit is completed.

Discontinuation of REGEN-016/PROACT 2:

REGEN-016 (PROACT 2) was a planned Phase 3, randomized, blinded, sham control arm, bi-lateral kidney dose, controlled efficacy study of rilparencel in subjects with Stages 3b and 4 CKD and type 2 diabetes (specifically eGFR between 20 ml and 44 mL/min/1.73m 2 with moderate to severe albuminuria (UACR between 300 and 5,000 mg/g)).

REGEN-016 was discontinued in 2024 following a comprehensive internal and external review of our Phase 3 program.

No patients received rilparencel in this study.

REGEN-008 is an ongoing, prospective, open-label, observational, long term follow up master protocol study of rilparencel in subjects with diabetes and CKD who were previously enrolled and treated with rilparencel.

There are two sub-studies under the REGEN-008 master protocol:

REGEN-008 sub-study 1 is a multi-center, prospective, non-interventional, long-term observational extension study of participants who were enrolled and dosed in previous interventional clinical studies with the fresh REACT formulation.

Participants will be monitored for up to five years.

REGEN-008 sub-study 2 is intended to follow study participants previously treated with the cryopreserved formulation of REACT.

Participants will be followed for up to an additional 5 years for this study (60 months) from completion of previous protocol End of Study Visit.

Multi-dose study REGEN-015 was a planned Phase 1 open-label study of REACT in subjects with CKD caused by type 1 or type 2 diabetes.

The intended purpose of this study was to evaluate the safety of supplemental REACT injections in participants who have previously received REACT treatment.

The Company no longer feels that REGEN-015 adds value to the overall clinical development plan and has decided to no longer pursue this study.

No patient received REACT and the study will be officially closed in 2024.

REGEN-004 is a completed Phase 1, prospective, open-label, single-arm, safety, tolerability, and early efficacy study of REACT in subjects with CKD from CAKUT.

The primary objective of this study was to assess the safety and efficacy of up to two REACT injections given six months (up to four weeks after target date) apart and delivered into the biopsied kidney using a minimally invasive percutaneous approach that can be delivered under conscious sedation in less than 90 minutes in patients with CKD with eGFRs between 14 and 50 ml/min/1.73m2 due to CAKUT.

Five subjects were enrolled in this trial.

Subjects received two doses of REACT of 3x10 6 cells/g-KW est .

All five subjects received their first injection, and four subjects received both injections.

The trial concluded in January 2023 with the last patient, last visit.

Small mean decreases from baseline in eGFR were noted at almost all time points during the study.

Final results of this study were reported to the FDA in December 2023.

The Company is not pursuing this indication further at this time.

REGEN-008 sub-study 2 is intended to follow study participants previously treated with the cryopreserved formulation of rilparencel.

Participants will be followed for up to an additional five years for this study from completion of previous protocol End of Study Visit.

The biotechnology and pharmaceutical industries are characterized by rapid technological advancement, significant competition, and an emphasis on intellectual property.

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Any product candidates that we successfully develop and commercialize will compete with current therapies and new therapies that may become available in the future.

We believe that the key competitive factors affecting the success of any of our product candidates will include efficacy, safety profile, dosing, cost, effectiveness of promotional support and intellectual property protection.

With respect specifically to REACT, we expect the key competitive factors affecting its success, if approved, will include the intended patient population, the relative convenience of dosing and administration, and efficacy.

Many other companies working on medications for controlling CKD, either alone or with their collaboration partners, have significantly greater financial resources and expertise in research and development, pre-clinical testing, clinical trials, manufacturing, and marketing than do we.

We believe that the key competitive factors affecting the success of any of our

product candidates will include efficacy, safety profile, dosing, cost, effectiveness of promotional support and intellectual property protection.

With respect specifically to rilparencel, we expect the key competitive factors affecting its success, if approved, will include the intended patient population, the relative convenience of dosing and administration, and efficacy.

Many other companies working on medications for controlling CKD, either alone or with their collaboration partners, have significantly greater financial resources and expertise in research and development, preclinical testing, clinical trials, manufacturing, and marketing than we do.

We believe that our principal competitors include developers of SGLT2 inhibitors, including canagliflozin (marketed as Invokana® by companies including Janssen Pharmaceuticals, Inc.), dapagliflozin (marketed under the brand names Farxiga® and Forxiga® by companies including AstraZeneca plc and Bristol-Myers Squibb Company), and empagliflozin (marketed as Jardiance® by companies including Boehringer Ingelheim and Eli Lilly and Company), and MRAs, which are small-molecule therapies recently approved to lower risks of CKD progression, notably finerenone (marketed as Kerendia® by companies including Bayer AG).

Most recently, glucagon-like peptide 1 (GLP-1) agonists, approved for type 2 diabetes and obesity, have been associated with lowering all-cause mortality among patients with type 2 diabetes, advanced-stage CKD and ESRD with strong support from the industry associations, including semaglutide (marketed under the brand names Ozempic®, Rybelsus® and Wegovy® by Novo Nordisk) and tirzepatide (marketed under the brand name Mounjaro® by Eli Lilly and Company).

Most recently, glucagon-like peptide 1 (GLP-1) agonists, originally approved for type 2 diabetes and obesity, have been associated with lowering all-cause mortality among patients with type 2 diabetes, advanced-stage CKD and ESRD with strong support from the industry associations, including semaglutide (marketed under the brand names Ozempic®, Rybelsus® and Wegovy® by Novo Nordisk) and tirzepatide (marketed under the brand name Mounjaro® by Eli Lilly and Company).

In January 2025, the FDA approved Ozempic® to reduce the risk of kidney disease worsening, kidney failure, and death from cardiovascular disease in adults with type 2 diabetes and CKD.

Future collaborations, mergers and acquisitions may result in further resource concentration among a smaller number of competitors.

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We believe that over the last 20 years we have developed our manufacturing technology for chemistry, manufacturing, and controls (“CMC”).

In doing so, we have established a considerable intellectual property estate, combined with extensive manufacturing know-how, to enable us to manufacture REACT with consistent quality.

In doing so, we have established a considerable intellectual property estate, combined with extensive manufacturing know-how, to enable us to manufacture rilparencel with consistent quality.

With support from high level manufacturing and regulatory expertise, our internal manufacturing capabilities have enabled us to progress rapidly through our clinical trials.

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The manufacturing facilities located in Winston-Salem, North Carolina and the quality systems are intended to be compliant with global quality standards.

It typically takes approximately 12 weeks to produce the clinical REACT products.

As of the date hereof, our manufacturing team, facilities, and bioprocess capacity have produced over 200 cell therapies.

release and distribution of product for EU clinical sites.

Manufacturing is therefore paused while we optimize our capabilities to meet EU and global standards for our Phase 3 program and prepare for a transition to commercial manufacturing.

No safety events have necessitated this pause.

Our bioprocesses have been reviewed by the FDA and EMA and validation activities are ongoing in anticipation of being commercial-ready for the potential launch of REACT.

It typically takes approximately 12 weeks to produce the clinical rilparencel products.

An audit in 2023 by the Company’s contracted Qualified Person (QP) to evaluate our readiness for release and distribution of rilparencel in the EU identified certain deficiencies in the documentation of the quality management systems to be addressed prior to release and distribution of product for EU clinical sites.

Manufacturing was subsequently paused while we optimized our capabilities to meet EU and global standards for our Phase 3 program.

Of note, no safety events necessitated this pause.

After undergoing a thorough remediation process in the first half of 2024, we resumed manufacturing for U.S.

and non-European clinical study sites in June 2024, and in July 2024, we received the Qualified Person (QP) Declaration of Equivalence to European Union Good Manufacturing Practice (GMP) standards.

The work done during the remediation has positioned the Company well to continue manufacturing under global standards for our Phase 3 program and we are well prepared for a transition to commercial manufacturing.

Our bioprocesses have been reviewed by the FDA and EMA and validation activities are ongoing in anticipation of being commercial-ready for the potential launch of rilparencel.

We plan to expand our manufacturing capacity, as required, to meet the increase in demand.

Our commercial strategy focuses on scaling up to meet the projected market for REACT if we obtain the necessary regulatory approvals.

We intend to improve bioprocess development to further reduce manufacturing costs of the commercial REACT product, assuming receipt of necessary regulatory approvals.

Culture media represents the highest cost in REACT processing, and we are exploring reduced culture media usage via bioprocess and automation improvements.

Further, our final commercial REACT product is planned to be a cryopreserved formulation, which we expect will reduce manufacturing costs compared to our fresh REACT formulation.

Our commercial strategy focuses on scaling up to meet the projected market for rilparencel if we obtain the necessary regulatory approvals.

We intend to improve bioprocess development to further reduce manufacturing costs of the commercial rilparencel product, assuming receipt of necessary regulatory approvals.

Culture media represents the highest cost in rilparencel processing, and we are exploring reduced culture media usage via bioprocess improvements.

Further, similar to our Phase 3 study, our final commercial rilparencel product is planned to be a cryopreserved formulation, which we expect will reduce manufacturing costs compared to our prior fresh rilparencel formulation.

We expect to leverage bulk purchasing to actively negotiate pricing of materials to further drive cost reductions.

However, there can be no assurance that the manufacturing costs for our Phase 3 trials when we manufacture REACT at commercial scale will actually be lower than for our recently completed Phase 2 RMCL-002 study.

A number of factors may contribute to an inability to achieve these cost reductions, including any failures to achieve the automation efficiencies that we anticipate, cost overruns or inefficiencies in the supply chain and any failure to improve the formulation or bioprocessing of REACT in a manner that results in lower costs.

However, there can be no assurance that the manufacturing costs for our Phase 3 trials will actually be lower

when we manufacture rilparencel at commercial scale.

A number of factors may contribute to an inability to achieve these cost reductions, including cost overruns or inefficiencies in the supply chain and any failure to improve the formulation or bioprocessing of rilparencel in a manner that results in lower costs.

Intellectual Property

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Further, we plan to file patent applications, as we consider appropriate under the circumstances, to protect new technologies that we develop.

To cover our proprietary technologies, proprietary cell-based REACT product and related methods, such as methods of use, we have filed patent applications representing 19 patent families.

As of December 31, 2023, our patent estate, which is solely owned, included 317 total issued patents or pending patent applications with nine issued U.S.

patents, ten pending U.S.

non-provisional patent applications, five pending U.S.

provisional patent applications, two pending Patent Cooperation Treaty (PCT) applications, 172 issued foreign patents and 119 pending foreign patent applications in various foreign jurisdictions.

Specifically, our patent family with claims directed to cells formulated in REACT, implantable constructs, and methods of using the same to, for example, improve kidney function or treat kidney disease, includes 34 issued patents and eight pending patent applications.

Patents in this family have been issued in nine jurisdictions, including the United States (three issued patents), Europe (two issued patents, each separately validated in seven countries), China, Japan, and South Korea.

To cover our proprietary technologies, proprietary cell-based rilparencel product and related methods, such as methods of use, we have filed patent applications representing 22 patent families.

As of December 31, 2024, our patent estate, which is solely owned, included 398 total issued patents or pending patent applications with 11 issued U.S.

patents, 13 pending U.S.

non-provisional patent applications, seven pending U.S.

provisional patent applications, five pending Patent Cooperation Treaty (PCT) applications, 228 issued foreign patents and 134 pending foreign patent applications in various foreign jurisdictions.

Specifically, our patent family with claims directed to cells formulated in rilparencel, implantable constructs, and methods of using the same to, for example, improve kidney function or treat kidney disease, includes 36 issued patents and eight pending patent applications.

Issued patents and any further patents that may be issued from this family’s eight pending applications are expected to expire in 2029 absent any patent term adjustments or extensions.

We also own two patent families directed to our REACT formulations and methods of preparing the formulations.

Across these families, we have 16 issued patents in multiple jurisdictions, including the United States, China, Japan, South Korea, and Canada.

We also have five patent applications that are pending in multiple jurisdictions, including Europe, Canada, Mexico, and Australia.

We also own two patent families directed to our rilparencel formulations and methods of preparing the formulations.

Across these families, we have 28 issued patents in multiple jurisdictions, including the United States, Europe (validated in 11 countries), China, Japan, South Korea, and Canada.

We also have three patent applications that are pending in jurisdictions, including Europe, Canada and Australia.

Patents across these two patent families, including any patents that may be issued from the pending applications, are expected to expire between 2031 and 2038, depending upon their respective filing dates and absent any patent term adjustments or extensions.

Additionally, we own two patent families with claims directed to quality control methods for ensuring that renal cells for formulation in REACT, prepared by our proprietary methods, have phenotypic and functional profiles indicative of therapeutic

Within the first patent family, we have 61 issued patents in various jurisdictions, including the United States (two issued patents), Europe (two issued patents, one of which has been validated in 21 countries and the other has been validated in 20 countries), China (two issued patents), Japan (two issued patents), South Korea (two issued patents), Hong Kong (two issued patents), Australia (two issued patents), and New Zealand (two issued patents).

Additionally, we own two patent families with claims directed to quality control methods for ensuring that renal cells for formulation in rilparencel, prepared by our proprietary methods, have phenotypic and functional profiles indicative of therapeutic activity.

Within the first patent family, we have 66 issued patents in various jurisdictions, including the United States (two issued patents), Europe (three issued patents, a first of which has been validated in 21 countries, a second of which has been validated in 20 countries, and a third of which is due for validation in 2025), China (two issued patents), Japan (two issued patents), South Korea (four issued patents), Hong Kong (three issued patents), Australia (two issued patents), and New Zealand (two issued patents).

We also have ten patent applications in this family that are pending in multiple jurisdictions, including the United States, Europe, Australia, China, and South Korea.

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Any patents that issue from these applications are expected to expire in 2041 absent any patent term adjustments or extensions.

We further own three patent families directed to methods of improving kidney function and/or in treating kidney disease, e.g., DKD or kidney disease resulting from a congenital anomaly.

Across these families, we have three issued patents, including one U.S.

We further own three patent families directed to methods of improving kidney function and/or in treating kidney disease, e.g., kidney disease with diabetes or kidney disease resulting from a congenital anomaly.

Across these families, we have six issued patents, including one U.S.

patent and 37 pending patent applications filed in 16 jurisdictions, including the United States, Europe, Hong Kong, China, Korea, Japan, Australia, Brazil, Mexico, Israel, Canada, and Mexico.

Our issued U.S.

patent is expected to expire in 2037 absent any patent term adjustments or extensions.

patents are expected to

expire in 2037 absent any patent term adjustments or extensions.

Patents across all three patent families, if issued, are expected to expire between 2036 and 2042, depending upon their respective filing dates and absent any patent term adjustments or extensions.

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The process required by the FDA before a biological product may be marketed in the United States generally involves the following:

completion of nonclinical laboratory tests and animal studies according to Good Laboratory Practices (“GLP”), and applicable requirements for the humane use of laboratory animals or other applicable regulations;

completion of nonclinical laboratory tests and animal studies according to Good Laboratory Practices (“GLPs”), and applicable requirements for the humane use of laboratory animals or other applicable regulations;

submission to the FDA of an application for an investigational new drug (“IND”) application which must become effective before human clinical trials may begin;

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performance of adequate and well-controlled human clinical trials according to applicable IND regulations, good clinical practices, or Good Clinical Practices (“GCPs”) and other clinical-trial related regulation, to evaluate the safety and efficacy of the investigational biological product for each proposed indication;

submission to the FDA of a Biologics License Application (“BLA”) for marketing approval that includes sufficient evidence of establishing the safety, purity, and potency of the proposed biological product for each proposed indication, including from results of nonclinical testing and clinical trials;

satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity and, if applicable, compliance with the FDA’s current Good Tissue Practices (“cGTPs”) for the use of human cellular and tissue products;

potential FDA inspection of the nonclinical study and clinical trial sites to assure compliance with GLP and GCP and the integrity of the clinical data submitted in support of the BLA;

satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with cGMPs to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality, potency and purity and, if applicable, compliance with the FDA’s current Good Tissue Practices (“cGTPs”) for the use of human cellular and tissue products;

potential FDA inspection of the non-clinical study and clinical trial sites to assure compliance with GLPs and GCPs and the integrity of the clinical data submitted in support of the BLA;

review of the product candidate by an FDA advisory committee, where appropriate or if applicable;

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117-328) amended the Federal Food, Drug, and Cosmetic Act (the “FDCA”) and the Public Health Service Act to specify that nonclinical testing for drugs and biologics 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 nonhuman biology-based tests (e.g., bioprinting), or in vivo animal tests.

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 nonhuman biology-based tests (e.g., bioprinting), or in vivo animal tests.

The conduct of the preclinical tests must comply with federal regulations and requirements including GLP.

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An IRB or IEC must operate in compliance with FDA regulations.

An IRB or IEC can suspend or

terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

An IRB or IEC can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.

Some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a Data Safety Monitoring Board (“DSMB”).

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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.

federal government.

Department of Health and Human Services’ (“DHHS”) Final Rule and the National Institutes of Health’s (“NIH’s”) corresponding policy on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and both NIH and FDA have brought enforcement actions against non-compliant clinical trial sponsors.

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The 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.

A sponsor must submit a diversity action plan to FDA by the time the sponsor submits the trial protocol to the agency for review.

A sponsor must submit a diversity action plan to the FDA by the time the sponsor submits the 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.

It 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 FDA objects to a sponsor’s diversity action plan and requires the sponsor to amend the plan or take other actions, it may delay trial initiation.

It is unknown at this time how the diversity action plan may affect Phase 3 trial planning and timing, but if the FDA objects to a sponsor’s diversity action plan and requires the sponsor to amend the plan or take other actions, it may delay trial initiation.

During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.

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After the completion of clinical trials of a biological product candidate, FDA approval of a BLA must be obtained before commercial marketing of the biological product.

The BLA must include results of product development, laboratory and animal studies, human studies, information on the manufacture and composition of the product, proposed labeling and other relevant information.

The BLA must include results of product development, laboratory and animal

studies, human studies, information on the manufacture and composition of the product, proposed labeling and other relevant information.

To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety, purity, potency and efficacy of the investigational product for its proposed indication or indications to the satisfaction of the FDA.

The testing and approval processes require substantial time and effort and there can be no assurance that the FDA will accept the BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all.

Under the Prescription Drug User Fee Act, as amended (the “PDUFA”), each BLA must be accompanied by a significant user fee.

Under the Prescription Drug User Fee Act, as amended (“PDUFA”), each BLA must be accompanied by a significant user fee.

The FDA adjusts the PDUFA user fees on an annual basis.

PDUFA also imposes an annual program fee for registered biologic product manufacturers.

PDUFA also imposes an annual program fee for registered biological product manufacturers.

Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business.

Within 60 days following submission of the application, the FDA reviews a BLA submitted to determine if it is substantially complete before the FDA accepts it for filing.

Within 60 days following submission of the application, the FDA conducts an initial review to determine if the BLA is substantially complete before the FDA accepts it for filing.

The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information.

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Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the BLA.

The FDA reviews the BLA to determine, among other things, whether the proposed product is safe, pure, potent and effective for its proposed indication or indications and whether the product is being manufactured in accordance with cGMP to ensure the continued safety, purity and potency of such product.

The FDA reviews the BLA to determine, among other things, whether the proposed product is safe, pure, potent and effective for its proposed indication or indications and whether the product is being manufactured in accordance with cGMPs to ensure the continued safety, purity and potency of such product.

Under the performance goals and policies implemented by the FDA under PDUFA, for original BLAs, the FDA targets 10 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.

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These are FDA regulations that govern the methods used in, and the facilities and controls used for, the manufacture of human cells, tissues, and cellular and tissue-based products (“HCT/ Ps”), which are human cells or tissue intended for implantation, transplant, infusion, or transfer into a human recipient.

The primary intent of the cGTP requirements is to ensure that cell and tissue-based products are manufactured in a manner designed to prevent the introduction, transmission and spread of communicable disease.

The primary intent of the cGTP requirements is to ensure that HCT/Ps are manufactured in a manner designed to prevent the introduction, transmission and spread of communicable disease.

FDA regulations also require tissue establishments to register and list their HCT/Ps with the FDA and, when applicable, to evaluate donors through appropriate screening and testing.

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The FDA likely will re-analyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the review process.

The FDA also may require submission of a Risk Evaluation and Mitigation Strategy (“REMS”) if it determines that a REMS is

necessary to ensure that the benefits of the medicine outweigh its risks and to assure the safe use of the medicine or biological product.

The FDA also may require submission of a Risk Evaluation and Mitigation Strategy (“REMS”) if it determines that a REMS is necessary to ensure that the benefits of the medicine outweigh its risks and to assure the safe use of the medicine 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.

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The PREA requires 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 to submit an initial Pediatric Study Pla n (“PSP”), within 60 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 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.

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 preclinical studies, early phase clinical trials or other clinical development programs.

The FDA reviews a BLA to determine, among other things whether the product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held meets standards designed to assure the product’s continued safety, purity and potency.

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The FDA may also 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 and the FDA agree on a schedule for the submission of the application sections and the sponsor pays any required user fees upon submission of the first section of the NDA or BLA.

addition, fast track designation may be withdrawn by the sponsor or rescinded by the FDA if the designation is no longer supported by data emerging from the clinical trial process.

In addition, fast track designation may be withdrawn by the sponsor or rescinded by the FDA if the designation is no longer supported by data emerging from the clinical trial process.

As part of the 21st Century Cures Act (the “Cures Act”), enacted in December 2016, Congress amended the FD&C Act to facilitate an efficient development program for, and expedite review of regenerative medicine advanced therapies, or RMATs, which include cell and gene therapies, therapeutic tissue engineered products, human cell and tissue products, and combination products using any such therapies or products.

REACT has received RMAT designation from the FDA.

Rilparencel has received RMAT designation from the FDA.

RMAT designation does not include HCT/Ps regulated solely under section 361 of the PHS Act and 21 Code of Federal Regulations Part 1271.

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The FDA has 60 calendar days to determine whether the medicine meets the criteria, including whether there is preliminary clinical evidence indicating that the medicine has the potential to address unmet medical needs for a serious or life- threatening disease or condition.

A BLA for a regenerative medicine therapy that has received RMAT designation may be eligible for priority review or accelerated approval through use of surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites.

A BLA for a regenerative medicine therapy that has received RMAT designation may be eligible for priority review or accelerated approval through use of

surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites.

Benefits of RMAT designation also include early interactions with FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval.

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The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval when 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 long-term clinical benefit of a medicine.

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 medicine, even if the effect on the surrogate or intermediate

clinical endpoint occurs rapidly.

For example, accelerated approval has been used extensively in the development and approval of medicines 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 clinical trials to demonstrate a clinical or survival benefit.

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Under the act’s amendments to the FDCA, FDA may require the sponsor of a product granted accelerated approval to have a confirmatory trial underway prior to approval.

The sponsor must also submit progress reports on a confirmatory trial every six months until the trial is complete, and such reports are published on FDA’s website.

The sponsor must also submit progress reports on a confirmatory trial every six months until the trial is

complete, and such reports are published on FDA’s website.

The amendments also give FDA 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.

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We must comply with applicable requirements in the cGMP and cGTP regulations, including quality control and quality assurance and maintenance of records and documentation.

Entities involved in the manufacture and distribution of approved biologics and HCT/Ps are required to register their establishments with the FDA and certain state agencies, as well as applicable foreign counterparts, and are subject to periodic unannounced inspections by such governmental authorities for compliance with cGMP, cGTP and other laws.

Accordingly, we must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Future inspections by governmental authorities may identify compliance issues at our facilities 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 cGMP or cGTP, 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 BLA, including voluntary recall and regulatory sanctions as described below.

In addition, the discovery of conditions that violate these rules, including failure to conform to cGMPs or cGTPs, 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 BLA, including voluntary recall and regulatory sanctions as described below.

Other post-approval requirements applicable to biological products, include reporting of cGMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping requirements, reporting of adverse effects, reporting updated safety and efficacy information, and complying with electronic record and signature requirements.

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The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

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 BLA or a BLA supplement, which may require the applicant to develop additional data or conduct additional pre-clinical 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.

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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.

After an additional one-year stabilization period to give entities subject to the DSCSA additional time to finalize interoperable tracking systems and to ensure supply chain continuity, the applicable requirements under the DSCSA became fully enforceable as of November 27, 2024.

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.

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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.

This is not a patent term extension, but it effectively extends the regulatory period

during which the FDA cannot approve another application.

This is 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 does not require the sponsor to undertake the described studies.

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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.

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 health care provider who prescribed the reference product.

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In May 2019, the State Council of China issued the Regulation on the Administration of Human Genetic Resources (the “HGR Regulation”), which stipulates the approval requirements pertinent to research collaborations between Chinese and foreign-owned entities.

Pursuant to this new rule, a new filing system (as opposed to the advance approval approach originally in place) is put in place for international clinical trials using Chinese patients’ biospecimens at clinical study sites without involving the export of such biospecimens outside of China.

of such biospecimens outside of China.

A notification filing that specifies the type, quantity and usage of the biospecimens, among others, with the HGRAO is required before conducting such clinical trials.

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Foreign Corrupt Practices Act (the “FCPA”), to which we are subject, prohibits corporations and individuals from engaging in certain activities to obtain or retain business or to influence a person working in an official capacity.

It is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.

Under the FCPA, it is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.

However, in February 2025, President Trump issued an executive order directing the U.S.

Department of Justice to pause enforcement of the FCPA and to issue new enforcement guidelines that take into consideration U.S.

national security and the competitiveness of U.S.

companies abroad.

It is unclear how this presidential directive may affect the biopharmaceutical industry as a whole or our business in particular.

Government regulation outside of the United States

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If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

European Union clinical trials regulation

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.

Certain countries outside of the United States have a similar process that requires the submission of a clinical trial application much like the IND prior to the commencement of human clinical trials.

In the European Union, for example, a Clinical Trial Application (“CTA”) must be submitted for each clinical trial to each country’s National Competent Authority (“NCA”) and at least one IEC, much like the FDA and an IRB, respectively.

Once the CTA is approved in accordance with a country’s requirements, the corresponding clinical trial may proceed.

Under the current regime (the EU Clinical Trials Directive 2001/20/EC and corresponding national laws) all suspected unexpected serious adverse reactions to the investigated medicine that occur during the clinical trial have to be reported to the NCA and ECs of the Member State where they occurred.

Under the Clinical Trials Regulation (EU) No 536/2014, which came into effect on January 31, 2022, there is a centralized application procedure where one EU Member State’s competent authority takes the lead in reviewing part I of the application,

which contains scientific and medicinal product documentation, and the other national authorities only have limited involvement.

Part II, which contains the national and patient-level documentation, is assessed individually by each EU Member State.

Any substantial changes to the trial protocol or other information submitted with the CTA must be notified to or approved by the relevant competent authorities and ethics committees.

Medicines used in clinical trials must be manufactured in accordance with good manufacturing practices.

Other national and EU-wide regulatory requirements may also apply.

Currently, the extent to which clinical trials will be governed by the Clinical Trials Regulation will depend on when the clinical trial is initiated or on the duration of an ongoing trial.

As of January 2023, all new clinical trials must comply with the Clinical Trials Regulation.

In addition, any clinical trial that was already under way as of January 1, 2023 and continues for more than three years from the day on which the Clinical Trials Regulation becomes applicable (i.e., January 31, 2025), the Clinical Trials Regulation will at that time begin to apply to the clinical trial.

Medicinal product review and approval in the EEA

In the European Economic Area (the “EEA”) (comprised of the EU Member States plus Norway, Iceland and Liechtenstein), medicinal products, including advanced therapy medicinal products (“ATMPs”), are subject to extensive pre-and post-market regulation by regulatory authorities at both the EEA and national levels.

Regulated in accordance with Regulation (EC) No 1394/2007 (the “ATMP Regulation”), ATMPs comprise gene therapy products, somatic cell therapy products and tissue engineered products.

The CAT (as defined below) designated REACT as a tissue engineered product.

Gene therapy products deliver genes into the body that lead to a therapeutic, prophylactic or diagnostic effect.

We anticipate that REACT will be regulated as an ATMP in the EEA.

To obtain regulatory approval of an ATMP under EEA regulatory systems, we must submit a marketing authorization application (“MAA”) under the centralized procedure administered by the EMA.

The application used to submit the BLA in the United States is similar to the required application process in the European Union, with the exception of, among other things, certain specific requirements set out in the ATMP Regulation, for example certain additional product characteristic information that must be included in the MAA.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid across all of the EEA.

As provided for in the ATMP Regulation, the scientific evaluation of MAAs for ATMPs is primarily performed by a specialized scientific committee called the Committee for Advanced Therapies (the “CAT”).

The CAT prepares a draft opinion on the quality, safety and efficacy of the ATMP which is the subject of the MAA, which is sent for final approval to the Committee for Medicinal Products for Human Use (the “CHMP”).

The CHMP recommendation is then sent to the European Commission, which adopts a decision binding in all EEA Member States.

The maximum timeframe for the evaluation of a MAA for an ATMP is 210 days from receipt of a valid MAA, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CAT and/or CHMP.

Clock stops may extend the timeframe of evaluation of a MAA considerably beyond 210 days.

Where the CHMP gives a positive opinion, the EMA provides the opinion together with supporting documentation to the European Commission, which makes and issues the final decision to grant a marketing authorization within 67 days of receipt of the EMA’s recommendation.

Accelerated assessment may be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation.

If the CHMP accepts such a request, the timeframe of 210 days for assessment will be reduced to 150 days (excluding clock stops), but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that the application is no longer appropriate to conduct an accelerated assessment.

In April 2023, the European Commission issued a proposal that will revise and replace the existing legislation framework for human medicines.

If adopted and implemented as currently proposed, these revisions will significantly change several aspects of medicinal product development and approval in the European Union.

In addition, because the United Kingdom (which comprises Great Britain and Northern Ireland) left the European Union, Great Britain will no longer be covered by centralized marketing authorizations (under the Northern Ireland Protocol, centralized marketing authorizations will continue to be recognized in Northern Ireland).

All medicinal products with a current centralized marketing authorization were automatically converted to Great Britain marketing authorizations on January, 1 2021.

However, to commercialize new medicinal products in the United Kingdom after January 1, 2021, a separate application to the UK’s Medicines and Healthcare products Regulatory Agency (the “MHRA”) is required

Data and marketing exclusivity

The EEA also provides opportunities for market exclusivity.

Upon receiving marketing authorization in the EEA, innovative medicinal products generally receive eight years of data exclusivity and an additional two years of market exclusivity.

If granted, data exclusivity prevents generic or biosimilar applicants from referencing the innovator’s preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization during a period of eight years from the date on which the reference product was first authorized in the EEA.

During the additional two-year period of market exclusivity, a generic or biosimilar marketing authorization can be submitted, and the innovator’s data may be

referenced, but no generic or biosimilar product can be marketed until the expiration of the market exclusivity period.

The overall ten-year period will 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 authorization, is held to bring a significant clinical benefit in comparison with existing therapies.

Even if an innovative medicinal product gains the prescribed period of data exclusivity, another company may market another version of the product if such company obtained marketing authorization based on a MAA with a complete independent data package of pharmaceutical tests, preclinical tests and clinical trials.

There is, however, no guarantee that a product will be considered by the European Union’s regulatory authorities to be an innovative medicinal product, and products may therefore not qualify for data exclusivity.

Post-approval controls

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RMPs and PSURs are routinely available to third parties requesting access, subject to limited redactions.

The manufacturing of authorized medicinal products, for which a separate manufacturer’s license is mandatory, must also be conducted in strict compliance with the applicable European Union laws, regulations and guidance, including Directive 2001/83/EC, Directive 2003/94/EC, Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice.

These requirements include compliance with European Union cGMP standards when manufacturing medicinal products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the European Union with the intention to import the active pharmaceutical ingredients into the European Union.

All advertising and promotional activities for the product must be consistent with the approved Summary of Product Characteristics (“SmPC”), and therefore all off-label promotion is prohibited.

Direct-to-consumer advertising of prescription medicines is also prohibited in the European Union.

Although general requirements for advertising and promotion of medicinal products are established under EU directives, the details are governed by regulations in each EU Member State and can differ from one country to another.

Failure to comply with European Union and EU Member State laws that apply to the conduct of clinical trials, manufacturing approval, marketing authorization of medicinal products and marketing of such products (both before and after grant of the marketing authorization), manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.

Such penalties could include delays or refusal to authorize the conduct of clinical trials or to grant the marketing authorization, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the marketing authorization, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.

Brexit and the Regulatory Framework in the United Kingdom

As of January 1, 2021, EU law no longer directly applies in the United Kingdom.

The United Kingdom has adopted existing EU medicines regulation as standalone UK legislation with some amendments to reflect procedural and other requirements with respect to marketing authorizations and other regulatory provisions.

The MHRA is responsible for regulating the United Kingdom medicinal products market (Great Britain and Northern Ireland).

In order to market medicines in the United Kingdom, manufacturers must hold a UK authorization.

On January 1, 2021, all EU marketing authorizations were converted to UK marketing authorizations subject to a manufacturer opt-out.

The United Kingdom has introduced a separate UK-specific processes for regulatory submissions and medicinal product MA, and MHRA guidance states that the United Kingdom will have the power to take into account marketing authorizations made under the EU decentralized and mutual recognition procedures.

On January 1, 2024, the MHRA launched the International Recognition Procedure (“IRP”), which provides for an expedited authorization procedure for products that have received positive marketing authorization decisions from trusted partner agencies, such as the EMA or the FDA.

There are two available routes for assessment and recognition under the IRP:

Recognition Route A – 60 days from validation of submission

Application must be based on a Reference Regulatory (“RR”), marketing authorization within the previous two years

Any significant differences from the quality dossier approved by the RR requires assessment under Recognition Route B

Evidence of GMP compliance for manufacturing sites should be provided with submission

None of the Recognition Route B criteria are met

Recognition Route B – 110 days from validation of submission with one planned clock stop (up to 60 days) at day 70 to allow applicant to respond to issues identified during review

Application must be based on a RR marketing authorization within the previous ten years

Criteria requiring Recognition Route B include, among other things:

The RR granted a conditional or exceptional circumstances marketing authorization

Additional manufacturing sites included in the application were not assessed by the RR or a manufacturing site is not GMP certified

There are substantial changes to the manufacturing process compared to the process approved by the RR

Certain product types (e.g., advanced therapy medicinal products, orphan medicines, over-the-counter medicines)

A Risk Management Plan was not assessed by the RR

The RR required one or more post-authorization safety studies for the product

A companion diagnostic is necessary for correct use of the product

United Kingdom medicines legislation is subject to future regulatory change under the Medicines and Medical Devices Act 2021.

This act sets out a new framework for the adoption of medicines regulation.

Different rules apply in Northern Ireland following implementation of the Northern Ireland Protocol, under which EU central marketing applications continue to apply there.

However, in March 2023, the United Kingdom government and the European Commission reached agreement on a regulatory framework to replace the Northern Ireland Protocol, referred to as the Windsor Framework.

The Windsor Framework is expected to apply as of January 1, 2025 and will change the existing system under the Northern Ireland Protocol, including the regulation of pharmaceutical products in the UK.

Specifically, the MHRA will be responsible for approving all medicines intended to be marketed in the UK (i.e., Great Britain and Northern Ireland), while the EMA will no longer be involved in approving medicines intended for sale in Northern Ireland.

The Trade and Cooperation Agreement, which sets forth a framework for partnership between the European Union and the United Kingdom, became effective as of January 1, 2021.

The Trade and Cooperation Agreement between the European Union and the United Kingdom contains an Annex in relation to medicinal products with the objective of facilitating availability of medicines, promotion of public health and consumer protection in respect of medicinal products.

The Annex provides for mutual recognition of good manufacturing practice (GMP) inspections and certificates, meaning that manufacturing facilities do not need to undergo duplicate inspections for the two markets.

The Annex establishes a Working Group on Medicinal Products to deal with matters under the Trade and Cooperation Agreement, facilitate co-operation and for the carrying out of technical discussions.

It is expected that further bilateral discussions will continue with respect to regulatory areas not the subject of the Trade and Cooperation Agreement, including pharmacovigilance.

The Trade and Cooperation Agreement also does not include reciprocal arrangements for the recognition of batch testing certification.

However, the United Kingdom has listed approved countries, including the EEA which will enable UK importers and wholesales to recognize certain certification and regulatory standards.

The European Commission has not adopted such recognition procedures.

It is expected that the establishment of a separate United Kingdom authorization system, albeit with transitional recognition procedures in the United Kingdom, will lead to additional regulatory costs.

In addition, additional regulatory costs may be incurred with respect to the lack of mutual recognition of batch testing and related regulatory measures.

Relatedly, following the United Kingdom’s withdrawal from the EU, the General Data Protection Regulation (“GDPR”) has been implemented in the United Kingdom (as the UK GDPR).

The UK GDPR sits alongside the amended UK Data Protection Act 2018 which implements certain derogations in the EU GDPR into United Kingdom law.

Under the UK GDPR, 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 UK 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 E.U.

GDPR from the E.U.

to the United Kingdom.

In addition, the 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.

Other health care laws and compliance requirements

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states have adopted laws similar to the AKS and FCA, and may apply to our business practices, including, but not limited to, research, distribution, sales or marketing arrangements and claims involving health care items or services reimbursed by non-governmental payors, including private insurers.

In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research

and Manufacturers of America’s Code on Interactions with Health Care Professionals.

Several states also impose other marketing restrictions or require pharmaceutical companies to make marketing or price disclosures to the state.

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Our failure to comply with these privacy and security laws or a breach of health information or personal data could prompt enforcement against our health care provider partners, create third party liability for our company and/or cause significant financial or reputational harm to our company.

We may also be subject to additional privacy restrictions.

The collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in the EEA, including personal health data, is subject to the 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 explicit 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 and EEA, including the United States, 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.

In addition, the GDPR includes restrictions on cross-border data transfers.

Compliance with the GDPR is a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.

In July 2023, the European Commission adopted an adequacy decision for a new mechanism for transferring data from the European Union to the United States – the E.U.-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 E.U.-U.S.

Privacy Shield.

Notably, the new obligations were geared to ensure that data can be accessed by U.S.

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 United States 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.

Numerous other countries have, or are developing, laws governing the collection, use and transmission of personal data as well.

For example, the European Parliament and the Council of the European Union adopted a comprehensive general data privacy framework called the General Data Protection Regulation ("GDPR"), which went into effect in 2018 and implemented a broad data protection framework that expanded the scope of EU data protection law, and applies to entities located inside and outside of the EU that process, or control the processing of, personal data relating to individuals located in the EU, including clinical trial data.

Also in China, the Personal Information Protection Law, which took effect on November 1, 2021, introduced stringent protection requirements for processing personal information, which are in many ways akin to the requirements of the GDPR.

We also continue to see other jurisdictions proposing and enacting data localization laws.

Evolving legal, contractual, and other privacy and data protection obligations, could impose significant limitations, require changes to our business, or restrict our collection, use, storage or processing of personal data, which may increase our compliance expenses and make our business more costly or less efficient to conduct.

In addition, any such changes could impact our ability to develop an adequate marketing strategy and pursue our growth strategy effectively, or even prevent us from providing our products in jurisdictions in which we receive marketing authorization, or potentially cause us to incur liability in an effort to comply, which, in turn, could adversely affect our business,

financial condition, results of operations and prospects.

Complying with these numerous, complex and often evolving requirements is expensive and difficult, and suspected and actual failure to comply, whether by us, our service providers, CROs, business partners or other third parties, or any inadvertent or unauthorized access to or use or disclosure of data that we store or handle as part of operating our business, could adversely affect our business, financial condition, results of operations and prospects.

Health care reform

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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 and therapeutic candidates.

In addition, future legislative and regulatory proposals may materially impact the ability of the FDA and other regulatory agencies to operate as they have historically operated.

We cannot be sure whether additional legislative changes will be enacted, or whether any of the FDA’s regulations, guidance or interpretations will be changed, or what the impact of such changes on the agency and its scientific review staff, if any, may be.

For example, the next FDA user fee reauthorization package is expected to enter stakeholder negotiations beginning in mid-2025, with any agreement sent to Congress in early 2027 for purposes of initiating the legislative process.

Reauthorization of the prescription drug user fee program would need to be finalized by Congress by the end of September 2027 in order to avoid a disruption in FDA’s review goals for NDAs and other activities supported by user fees assessed against industry.

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.

In addition, the containment of healthcare costs has become a priority of federal and state governments and the prices of therapeutics have been a focus in this effort.

The containment of healthcare costs has become a priority of federal and state governments and the prices of therapeutics have been a focus in this effort.

government, state legislatures and foreign governments 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 and biosimilar products for branded prescription medicines, respectively.

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With regard to biopharmaceutical products, the ACA, among other things, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for therapeutics that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees on manufacturers of certain branded prescription medicines, created a new Medicare Part D coverage gap discount program, and expanded the 340B drug discount program.

As another example, the 2021

Consolidated Appropriations Act signed into law on December 27, 2020 incorporated extensive health care provisions and amendments to existing laws, including a requirement that all manufacturers of medicines and biological products covered under Medicare Part B report the product’s average sales price, to the DHHS beginning on January 1, 2022, subject to enforcement via civil money penalties.

As another example, the 2021 Consolidated Appropriations Act signed into law on December 27, 2020 incorporated extensive health care provisions and amendments to existing laws, including a requirement that all manufacturers of medicines and biological products covered under Medicare Part B report the product’s average sales price, to the DHHS beginning on January 1, 2022, subject to enforcement via civil money penalties.

L egislative and regulatory changes under the ACA remain 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.

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Such scrutiny has resulted in several recent U.S.

Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to medicine pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of medicines under Medicare, and reform government program reimbursement methodologies for pharmaceutical products.

Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to medicine pricing, review the

relationship between pricing and manufacturer patient programs, reduce the cost of medicines under Medicare, and reform government program reimbursement methodologies for pharmaceutical products.

Notably, on December 20, 2019, the Further Consolidated Appropriations Act for 2020 became law (P.L.

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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 (the “IRA”).

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.” Although lawsuits have been filed under the CREATES Act since its enactment, those lawsuits have settled privately;

therefore to date no federal court has reviewed or opined on the statutory language and there continues to be uncertainty regarding the scope and application of the law.

More recently, in August 2022, the Inflation Reduction Act of 2022 (the “IRA”) became law.

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 United States.

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.

For example, 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 product by 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, including biologics that have been on the market for 13 years, without generic or biosimilar competition.

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If 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.

CMS has begun to implement these new authorities and entered into the first set of agreements with drug and biological product manufacturers for negotiated prices of 10 products, which will become applicable for payment year 2026.

However, the IRA’s impact on the pharmaceutical industry in the United States remains uncertain, in part because multiple large pharmaceutical companies and other stakeholders (e.g., the U.S.

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Payors include government authorities, managed care providers, private health insurers and other organizations.

Patients who are prescribed treatments for their conditions and providers who prescribe such treatments generally rely on these third-party payors to reimburse all or part of the treatment and other associated health care costs.

who are prescribed treatments for their conditions and providers who prescribe such treatments generally rely on these third-party payors to reimburse all or part of the treatment and other associated health care costs.

The process for determining whether a payor will provide coverage for a medicine, device or biologic product may be separate from the process for setting the reimbursement rate that the payor will pay for the product.

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If payors do not consider a product to be cost-effective compared to current standards of care, they may not cover the product as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to cover its costs or make a profit.

In addition to the IRA, which is designed to exert downward pressure on drugs and biologics covered under Medicare Parts B and D (see Health care reform, above), President Biden issued Executive Order 14087 in October 2022, which called for CMS to prepare and submit a report to the White House on potential payment and delivery modes that would complement the 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.

Additional state and federal healthcare reform measures are expected to 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 reduced demand for certain biopharmaceutical products or additional pricing pressures.

Outside of the United States, the pricing of pharmaceutical products is subject to governmental control in many countries.

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Chief Financial Officer

Chief Regulatory Officer, SVP, Regulatory Affairs, Quality, Biometrics & Market Access

Chief Legal Officer

Chief Regulatory Officer, SVP, Regulatory Affairs, Quality, Biometrics & Market Access

Non-Employee Directors

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José Ignacio Jimenez Santos

Maraganore, Ph.D.

Pereira, M.D.

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Information Available on the Internet

Our internet address is https://www.prokidney.com, to which we regularly post copies of our press releases as well as additional information about us.

Our internet address is https://www.prokidney.com.

We use our website as a routine channel for distribution of information that may be material to investors, including news releases, financial information, presentations and corporate governance information.

This Annual Report on Form 10-K and our quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, are available to you free of charge through the Investors section of our website as soon as reasonably practicable after such materials have been electronically filed with, or furnished to, the SEC.

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We include our web site address in this Annual Report only as an inactive textual reference.

Information contained in our website does not constitute a part of this report or our other filings with the SEC.

Information contained in or connected to our website does not constitute a part of, and is not incorporated by reference in, this report or our other filings with the SEC.

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