What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-03-25 compared with 2021-03-24 · 1214 added, 1146 removed, 68 unchanged (97% of the section changed)

business faces significant risks.

You should carefully consider the risks described below, together with all of the other information

included in our filings with the United States Securities and Exchange Commission (SEC) when evaluating our business.

the following risks actually occurs, our business, financial condition or results of operations could be materially adversely

affected and the trading price of shares of our common stock could decline.

The occurrence of any of the following risks could

cause our actual results to differ materially from those contained in forward-looking statements we have made in this report and

those we may make from time to time.

Our business faces significant risks.

carefully consider the risks described below, together with all of the other information included in our filings with the United States

Securities and Exchange Commission (SEC) when evaluating our business.

If any of the following risks actually occurs, our business, financial

condition or results of operations could be materially adversely affected and the trading price of shares of our common stock could decline.

The occurrence of any of the following risks could cause our actual results to differ materially from those contained in forward-looking

statements we have made in this report and those we may make from time to time.

Summary of Risks

This section provides a summary of the

risks that may impact our performance in the future.

For details of our various risk factors and their impacts, see “Risk

Factors Discussion.”

Our risk factors are organized into the

following categories:

1) Risks related to our business, 2) Risks related to clinical and regulatory matters, 3) Risks related

to our intellectual property, 4) Risks related to government regulations, 5) Risks related to our reliance on third parties, and

6) Risks related to our common stock,

Risks related

to our business

Business risks include risks associated

with our products and regulatory approval, licensing agreements, historical losses, managing growth, acquisitions and the COVID-19

This section provides a summary of the risks that

may impact our performance in the future.

For details of our various risk factors and their impacts, see “Risk Factors Discussion.”

Our risk factors are organized into the following

1) Risks related to our business, 2) Risks related to clinical and regulatory matters, 3) Risks related to our intellectual

property, 4) Risks related to government regulations, 5) Risks related to our reliance on third parties, and 6) Risks related to ownership

of our common stock.

Risks related to

Business risks include risks associated with our

products and regulatory approval, licensing agreements, historical losses, managing growth, acquisitions, the COVID-19 pandemic, and Russia’s

Invasion of Ukraine.

In general, the risks related to our business can cause variability in the future profits of the Company.

Risks related

to Clinical and Regulatory Matters

Risks related to

clinical and regulatory matters

Clinical and regulatory

matters include risks associated with clinical trials and the future ability to commercially market the product.

In order for any

of our products to be commercialized and produce future profits, successful trials need to be completed with supporting data to

receive regulatory approval.

In order for any of our

products to be commercialized and produce future profits, successful trials need to be completed with supporting data to receive regulatory

Failing to complete the trial will significantly increase our cost of doing business.

the active ingredient in our products is a controlled substance which can affect the supply available for clinical trials, as well

as commercial sales.

A limited supply could increase the time needed to complete clinical trials and overall costs including product

liability claims.

We could also face potential fines or reputational risk if we do not comply.

Developments from competitors and

the ability to obtain market exclusivity could also negatively impact future profits.

Risks related

to our intellectual property

Our products depend

upon securing and protecting critical intellectual property.

Patent positions are highly uncertain and involve complex legal and

factual questions.

Infringing upon a patents or trade secrets could force us to cease or alter our product development efforts

or obtain a license to continue to develop or sale our products.

These risks could not only impact the future profits of the company

but also create adverse publicity for us.

Risks related

to government regulations

We are required

to comply with various federal and state pharmaceutical and healthcare laws and regulations, and to maintain secure systems to

protect sensitive confidential information.

In addition, the active ingredient in

our products is a controlled substance which can affect the supply available for clinical trials, as well as commercial sales.

supply could increase the time needed to complete clinical trials and overall costs including product liability claims.

We could also

face potential fines or reputational risk if we do not comply.

Developments from competitors and the ability to obtain market exclusivity

could also negatively impact future profits.

Risks related to

our intellectual property

Our products depend upon

securing and protecting critical intellectual property.

Patent positions are highly uncertain and involve complex legal and factual questions.

Infringing upon patents or trade secrets could force us to cease or alter our product development efforts or obtain a license to continue

to develop or sale our products.

These risks could not only impact the future profits of the company but also create adverse publicity

Risks related to

government regulations

We are required to comply

with various federal and state pharmaceutical and healthcare laws and regulations, and to maintain secure systems to protect sensitive

confidential information.

Complying with the various regulations can increase our cost of doing business.

could also face potential fines or reputational risk if we do not comply.

Litigation or investigations can increase costs, negatively

affect our operating results and create adverse publicity for us.

Risks related

to our reliance on third parties

The Company relies on third parties to

conduct preclinical and clinical studies, as well as to manufacture our product candidates.

Third parties’

failure to perform

the trials as contractually require could impact our ability to obtain regulatory approval.

If manufacturers fail to meet our requirements

and strict regulatory requirements, our product development and commercialization efforts may be materially harmed.

Risks related

to our common stock

Common stocks

risks includes risks associated with the limited market for our common stock, a potential issuance of a substantial number of additional

shares, stock price volatility, and reporting requirements of federal securities laws.

The net effect of these risks can include

reductions in future profits, additional operating expenses, inability to meet liquidity needs, inability to access capital and

increased cost of capital.

We could also face potential

fines or reputational risk if we do not comply.

Litigation or investigations can increase costs, negatively affect our operating results

and create adverse publicity for us.

Risks related to

our reliance on third parties

The Company relies on third parties to conduct preclinical and clinical

studies, as well as to manufacture our product candidates.

Third parties’ failure to perform the trials as contractually required

could impact our ability to obtain regulatory approval.

If our third-party manufacturers fail to meet our requirements and strict regulatory

requirements, our product development and commercialization efforts may be materially harmed.

Risks related to

ownership of our common stock

Common stocks risks include

risks associated with the limited market for our common stock, a potential issuance of a substantial number of additional shares, stock

price volatility, and reporting requirements of federal securities laws.

The net effect of these risks can include reductions in future

profits, additional operating expenses, inability to meet liquidity needs, inability to access capital and increased cost of capital.

Risk Factors Discussion

Related to Our Business

Our business depends on the success

of esmethadone (d-methadone, dextromethadone, REL-1017), our only product candidate currently under clinical development, which

has recently entered into a pivotal clinical trial for the adjunctive treatment of MDD.

If we are unable to obtain regulatory approval

for and successfully commercialize REL-1017 or other future product candidates, or we experience significant delays in doing so,

our business will be materially harmed.

To date, the primary focus of our product

development has been esmethadone (d-methadone, dextromethadone, REL-1017) for the adjunctive treatment of patients with MDD.

esmethadone is our only product candidate under clinical development.

This may make an investment in our company riskier than similar

companies that have multiple product candidates in active development and that therefore may be able to better sustain a setback

of a lead candidate.

Successful continued development and ultimate regulatory approval of esmethadone for the adjunctive treatment

of MDD, and potentially as a monotherapy for MDD, or other indications is critical to the future success of our business.

invested, and will continue to invest, a significant portion of our time and financial resources in the clinical development of

If we cannot successfully develop, obtain regulatory approval for and commercialize esmethadone, we may not be able

to continue our operations.

The future regulatory and commercial success of esmethadone is subject to a number of risks, including

the following:

may not be able to obtain adequate evidence from clinical trials of efficacy and safety for esmethadone for the adjunctive

treatment of MDD, monotherapy for MDD or other indications;

we may not be able

to demonstrate that the benefits of esmethadone for the adjunctive treatment of MDD, monotherapy for MDD or other indications

outweigh the risks;

in our clinical

trials for esmethadone, enrollment may be slower than anticipated and we may need additional clinical trial sites than originally

planned, which could delay our clinical trial progress;

the results of our

clinical trials may not meet the level of statistical or clinical significance required by the FDA or comparable foreign regulatory

authorities for marketing approval;

patients in our

clinical trials may suffer serious adverse effects for reasons that may or may not be related to esmethadone, which could

delay or prevent further clinical development;

the standards implemented

by clinical or regulatory agencies may change at any time and we cannot be certain what efficacy endpoints the FDA or foreign

clinical or regulatory agencies may require in pivotal clinical trials with respect to the adjunctive treatment of MDD, monotherapy

for MDD or any other indication for the approval of esmethadone;

the results of later

stage clinical trials may not be as favorable as the results we have observed to date in our preclinical studies and Phase

1 and 2 clinical trials;

we cannot be certain

of the number and type of clinical trials and preclinical or toxicology studies that the FDA or other regulatory agencies

will require in order to approve esmethadone for the adjunctive treatment of MDD, monotherapy for MDD or any other indication;

we may not have

sufficient financial and other resources to complete the necessary clinical trials for esmethadone, including, but not limited

to, the clinical trials needed to obtain drug approval;

if approved for

the adjunctive treatment of MDD or as a monotherapy for MDD, esmethadone will likely compete with products that may reach

approval prior to esmethadone, products that are currently approved for the adjunctive treatment of MDD or as a monotherapy

for MDD and the off-label use of currently marketed products for MDD;

we may not be able

to obtain, maintain or enforce our patents and other intellectual property rights.

Esmethadone and any future product candidates will be subject to rigorous and extensive clinical

trials and extensive regulatory approval processes implemented by the FDA and comparable foreign regulatory authorities before

obtaining marketing approval from these regulatory authorities, if at all.

The drug development and approval process is lengthy

and expensive, and approval is never certain.

Investigational new drugs, such as esmethadone, may not prove to be safe and effective

in clinical trials.

We have no direct experience as a company in conducting later stage clinical trials required to obtain regulatory

We may be unable to conduct clinical trials at preferred sites, enlist clinical investigators, enroll sufficient numbers

of participants or begin or successfully complete clinical trials in a timely fashion, if at all.

In addition, the design of a

clinical trial can determine whether its results will support approval of a product, and flaws in the design of a clinical trial

may not become apparent until the clinical trial is well advanced.

Risks Related to Our Business

Our business depends on the success of esmethadone

(d-methadone, dextromethadone, REL-1017), our only product candidate currently in clinical development, which is in pivotal clinical trials

for the adjunctive treatment of MDD.

If we are unable to obtain regulatory approval for and successfully commercialize REL-1017 or other

future product candidates, or we experience significant delays in doing so, our business will be materially harmed.

To date, the primary focus of our product development has been esmethadone

(d-methadone, dextromethadone, REL-1017) for the adjunctive and monotherapy treatment of patients with MDD.

Currently, esmethadone is

our only product candidate under clinical development.

This may make an investment in our Company riskier than similar companies that

have multiple product candidates in active development and that therefore may be able to better sustain a setback of a lead candidate.

Successful continued development and ultimate regulatory approval of esmethadone for the adjunctive treatment of MDD, and potentially

as a monotherapy for MDD, or other indications is critical to the future success of our business.

We have invested, and will continue

to invest, a significant portion of our time and financial resources in the clinical development of esmethadone.

If we cannot successfully

develop, obtain regulatory approval for and commercialize esmethadone, we may not be able to continue our operations.

The future regulatory

and commercial success of esmethadone is subject to a number of risks, including the following:

we may not be able to obtain adequate evidence from clinical trials of efficacy and safety for esmethadone for the adjunctive treatment of MDD, monotherapy for MDD or other indications;

we may not be able to demonstrate that the benefits of esmethadone for the adjunctive treatment of MDD, monotherapy for MDD or other indications outweigh the risks;

in our clinical trials for esmethadone, enrollment may be slower than anticipated and we may need additional clinical trial sites than originally planned, which could delay our clinical trial progress;

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

patients in our clinical trials may suffer serious adverse effects for reasons that may or may not be related to esmethadone, which could delay or prevent further clinical development;

the standards implemented by clinical or regulatory agencies may change at any time and we cannot be certain what efficacy endpoints the FDA or foreign clinical or regulatory agencies may require in pivotal clinical trials with respect to the adjunctive treatment of MDD, monotherapy for MDD or any other indication for the approval of esmethadone;

the results of later stage clinical trials may not be as favorable as the results we have observed to date in our preclinical studies and Phase 1 and 2 clinical trials;

we cannot be certain of the number and type of clinical trials and preclinical or toxicology studies that the FDA or other regulatory agencies will require in order to approve esmethadone for the adjunctive treatment of MDD, monotherapy for MDD or any other indication;

we may not have sufficient financial and other resources to complete the necessary clinical trials for esmethadone, including, but not limited to, the clinical trials needed to obtain drug approval;

if approved for the adjunctive treatment of MDD or as a monotherapy for MDD, esmethadone will likely compete with products that may reach approval prior to esmethadone, products that are currently approved for the adjunctive treatment of MDD or as a monotherapy for MDD and the off-label use of currently marketed products for MDD;

we may not be able to obtain, maintain or enforce our patents and other intellectual property rights.

Esmethadone and any future product candidates

will be subject to rigorous and extensive clinical trials and extensive regulatory approval processes implemented by the FDA and comparable

foreign regulatory authorities before obtaining marketing approval from these regulatory authorities, if at all.

The drug development

and approval process is lengthy and expensive, and approval is never certain.

Investigational new drugs, such as esmethadone, may not

prove to be safe and effective in clinical trials.

We have no direct experience as a company in conducting later stage clinical trials

required to obtain regulatory approval.

We may be unable to conduct clinical trials at preferred sites, enlist clinical investigators,

enroll sufficient numbers of participants or begin or successfully complete clinical trials in a timely fashion, if at all.

the design of a clinical trial can determine whether its results will support approval of a product, and flaws in the design of a clinical

trial may not become apparent until the clinical trial is well advanced.

Because we have limited experience as a company designing clinical

trials, we may be unable to design and execute a clinical trial to support regulatory approval.

is a high failure rate for drugs and biological products proceeding through clinical trials.

Failure can occur at any time during

the clinical trial process.

The results of preclinical studies and early clinical trials of esmethadone or any future product

candidate may not be predictive of the results of later-stage clinical studies or trials and the results of studies or trials

in one set of patients or line of treatment may not be predictive of those obtained in another.

In fact, many companies in the

pharmaceutical and biotechnology industries have suffered significant setbacks in late stage clinical trials even after achieving

promising results in preclinical studies and earlier stage clinical trials.

In addition, data obtained from preclinical and clinical

activities are subject to varying interpretations, which may delay, limit or prevent regulatory approval.

Owing in part to the

complexity of biological pathways, esmethadone or any future product candidate may not demonstrate in patients the biochemical

and pharmacological properties we anticipate based on laboratory studies or earlier stage clinical trials, and they may interact

There is a high failure rate for drugs and biological

products proceeding through clinical trials.

Failure can occur at any time during the clinical trial process.

The results of preclinical

studies and early clinical trials of esmethadone or any future product candidate may not be predictive of the results of later-stage clinical

studies or trials and the results of studies or trials in one set of patients or line of treatment may not be predictive of those obtained

In fact, many companies in the pharmaceutical and biotechnology industries have suffered significant setbacks in late stage

clinical trials even after achieving promising results in preclinical studies and earlier stage clinical trials.

In addition, data obtained

from preclinical and clinical activities are subject to varying interpretations, which may delay, limit or prevent regulatory approval.

Owing in part to the complexity of biological pathways, esmethadone or any future product candidate may not demonstrate in patients the

biochemical and pharmacological properties we anticipate based on laboratory studies or earlier stage clinical trials, and they may interact

with human biological systems or other drugs in unforeseen, ineffective or harmful ways.

The number of patients exposed to product

candidates and the average exposure time in the clinical development programs may be inadequate to detect rare adverse events

or findings that may only be detected once a product candidate is administered to more patients and for greater periods of time.

To date, our Phase 2 clinical study has involved a small population of subjects with MDD, and, because of the small sample size

in such trial, the results of this clinical trial may be subject to substantial variability and may not be indicative of either

future top-line results or final results.

If we are unable to successfully demonstrate the safety and efficacy of esmethadone

or other future product candidates and receive the necessary regulatory approvals, our business will be materially harmed.

Even if we do receive regulatory approval

to market esmethadone, any such approval may be subject to limitations on the indicated uses or patient populations for which

we may market the products.

Accordingly, even if we are able to obtain the requisite financing to continue to fund our development

programs, we may be unable to successfully develop or commercialize esmethadone.

If we or any of our future development collaborators

are unable to develop, or obtain regulatory approval for, or, if approved, successfully commercialize esmethadone, we may not

be able to generate sufficient revenue to continue our business.

Top-line results may not accurately

reflect the complete results of the clinical study.

In October 2019, we reported top-line data

from our Phase 2a study of esmethadone in adults with MDD who did not respond to one to three courses of antidepressant treatment

in their current episode.

Although the top-line data indicated that subjects experienced statistically significant improvement

of their depression compared to subjects in the placebo group, as well as a favorable safety and tolerability profile, the top-line

data are based on preliminary analysis of key pharmacokinetic, safety and efficacy data, and such data may change following a more

comprehensive review of the data and may not accurately reflect the complete results of the study.

Preliminary data also remain

subject to audit and verification procedures that may result in the final data being materially different from the preliminary

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

agreement for esmethadone, our only product candidate currently under clinical development, could terminate under certain circumstances,

including if we terminate our chief executive officer except for cause, and we would be unable to conduct our business as planned.

In January 2018,

we entered into an Intellectual Property Assignment Agreement (the “Assignment Agreement”) and License Agreement

(the License Agreement and together with the Assignment Agreement, the Agreements), with Dr.

The number of patients exposed to product candidates

and the average exposure time in the clinical development programs may be inadequate to detect rare adverse events or findings that may

only be detected once a product candidate is administered to more patients and for greater periods of time.

To date, our Phase 2 clinical

study has involved a small population of subjects with MDD, and, because of the small sample size in such trial, the results of this clinical

trial may be subject to substantial variability and may not be indicative of either future top-line results or final results.

unable to successfully demonstrate the safety and efficacy of esmethadone or other future product candidates and receive the necessary

regulatory approvals, our business will be materially harmed.

Even if we do receive regulatory approval to market

esmethadone, any such approval may be subject to limitations on the indicated uses or patient populations for which we may market the

Accordingly, even if we are able to obtain the requisite financing to continue to fund our development programs, we may be unable

to successfully develop or commercialize esmethadone.

If we or any of our future development collaborators are unable to develop, or obtain

regulatory approval for, or, if approved, successfully commercialize esmethadone, we may not be able to generate sufficient revenue to

continue our business.

Top-line results may not accurately reflect

the complete results of the clinical study.

Preliminary data remains subject to audit and

verification procedures that may result in the final data being materially different from the preliminary data.

As a result, preliminary

data should be viewed with caution until the final data are available.

Our license agreement

for esmethadone, our only product candidate currently under clinical development, could terminate under certain circumstances, including

if we terminate our Chief Executive Officer except for cause, and we would be unable to conduct our business as planned.

In January 2018, we entered

into an Intellectual Property Assignment Agreement (the “Assignment Agreement”) and License Agreement (the License Agreement

and together with the Assignment Agreement, the Agreements), with Dr.

Inturrisi and Dr.

Manfredi (collectively, the “Licensor”).

Pursuant to the Assignment Agreement, we assigned our existing rights, including

patents and patent applications, to esmethadone in the context of psychiatric use to Licensor, and pursuant to the License Agreement,

Licensor then granted us an exclusive perpetual, worldwide license under the assigned intellectual property rights as well as patents

and know-how covering certain new inventions developed by Licensor and relating to esmethadone in neurological and other uses,

to develop and commercialize esmethadone in all fields of use.

The License Agreement also grants to us rights in all future inventions

developed by Licensor, whether or not in collaboration with us that relate in any way to esmethadone or the use thereof.

Agreement was amended in December 2019 to modify certain termination rights relating to the Chief Executive Officer, which are

described further below.

If we develop

any new inventions relating to esmethadone, we are required to do so in collaboration with Licensor, and to file patents covering

such inventions jointly in the name of the Company and Licensor.

All such future inventions or patents shall be jointly owned by

us and Licensor and, will be included in and subject to the financial and other terms of the License Agreement.

Paolo Manfredi (collectively, the “Licensor”).

Pursuant to the Assignment Agreement, we assigned our existing rights, including patents and patent applications, to esmethadone in the

context of psychiatric use to Licensor, and pursuant to the License Agreement, Licensor then granted us an exclusive perpetual, worldwide

license under the assigned intellectual property rights as well as patents and know-how covering certain new inventions developed by Licensor

and relating to esmethadone in neurological and other uses, to develop and commercialize esmethadone in all fields of use.

Agreement also grants to us rights in all future inventions developed by Licensor, whether or not in collaboration with us that relate

in any way to esmethadone or the use thereof.

The License Agreement was amended in December 2019 to modify certain termination rights

relating to the Chief Executive Officer, which are described further below.

If we develop any new

inventions relating to esmethadone, we are required to do so in collaboration with Licensor, and to file patents covering such inventions

jointly in the name of the Company and Licensor.

All such future inventions or patents shall be jointly owned by us and Licensor and,

will be included in and subject to the financial and other terms of the License Agreement.

The License Agreement

includes standard termination rights for Licensor in the event of our insolvency, challenge of the licensed patents and uncured

material breach of our obligations under the License Agreement.

In addition, the License Agreement contains certain “Key

provisions such that the Licensor may terminate the License Agreement if we terminate the employment of our Chief Executive

Sergio Traversa for any reason other than for specified causes determined by a majority of our Board of Directors (including

fraud, gross negligence, unauthorized use of our confidential information, conduct including harassment or discrimination, breach

of fiduciary duty or uncured material breach), or if we (a) substantially modify Mr.

Traversa’s job responsibilities or decision-making

rights in connection with the development and commercialization of esmethadone, (b) remove him from the role of Chief Executive

Officer other than in connection with a permitted change-of-control transaction, (c) materially reduce his compensation, or (d)

assign or transfer our rights under the License Agreement or the esmethadone intellectual property without Mr.

Traversa’s

consent, in each case (termination or the events in (a) through (d) during the period commencing on the effective date and ending

on the later of five years from the original effective date of the License Agreement on December 31, 2022 (the “Key Man Term”).

The December 2019 amendment to the License Agreement made certain clarifications to the nature of a termination for Cause, including

to clarify that termination due to Mr.

Traversa’s death or disability does not give Licensor the right to terminate the License

a result of the provisions described above, we are limited in our ability to terminate, as well as to decrease the salary or authority

of, our Chief Executive Officer until December 31, 2022.

In addition, the agreement provides that any assignor that we assign

the agreement to must agree in writing to all terms of the license, including the key man provisions, and as noted above, our

Chief Executive Officer has the right to consent to any such assignment of the agreement unless previously terminated for cause

or due to death.

As the license agreement relates to our only product candidate currently under clinical development, these provisions may

be deemed to have an anti-takeover effect and may delay, deter or prevent a tender offer or takeover attempt that a stockholder

might consider to be in its best interests, including attempts that might result in a premium being paid over the market price

for the shares held by stockholders.

If we fail to comply with the terms of the License Agreement, our rights to those patents

may be terminated, and we will be unable to conduct our business.

have generated no revenue from commercial sales to date and our future profitability is uncertain.

have a limited operating history and our business is subject to all of the risks inherent in the establishment of a new business

Our likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays

frequently encountered in connection with this.

Since we began our business, we have focused on research, development and clinical

trials of product candidates, and have incurred significant losses since inception and generated no product revenues.

If we continue

to incur operating losses and fail to become a profitable company, we may be unable to continue our operations.

We expect to continue

to operate at a net loss for at least the next several years as we continue our research and development efforts, continue to

conduct clinical trials and develop manufacturing, sales, marketing and distribution capabilities.

There can be no assurance that

the products under development by us will be approved for sales in the US or elsewhere.

Furthermore, there can be no assurance

that if such products are approved they will be successfully commercialized, and the extent of our future losses and the timing

of our profitability are highly uncertain.

International

commercialization of our product candidates faces significant obstacles.

may plan to commercialize some of our products internationally through collaborative relationships with foreign partners.

limited foreign regulatory, clinical and commercial resources.

includes standard termination rights for Licensor in the event of our insolvency, challenge of the licensed patents and uncured material

breach of our obligations under the License Agreement.

In addition, the License Agreement contains certain “Key Man” provisions

such that the Licensor may terminate the License Agreement if we terminate the employment of our Chief Executive Officer, Mr.

Sergio Traversa,

for any reason other than for specified causes determined by a majority of our Board of Directors (including fraud, gross negligence,

unauthorized use of our confidential information, conduct including harassment or discrimination, breach of fiduciary duty or uncured

material breach), or if we (a) substantially modify Mr.

Traversa’s job responsibilities or decision-making rights in connection

with the development and commercialization of esmethadone, (b) remove him from the role of Chief Executive Officer other than in connection

with a permitted change-of-control transaction, (c) materially reduce his compensation, or (d) assign or transfer our rights under the

License Agreement or the esmethadone intellectual property without Mr.

Traversa’s consent, in each case (termination or the events

in (a) through (d) during the period commencing on the effective date and ending on the later of five years from the original effective

date of the License Agreement on December 31, 2022.

The December 2019 amendment to the License Agreement

made certain clarifications to the nature of a termination for Cause, including to clarify that termination due to Mr.

death or disability does not give Licensor the right to terminate the License Agreement.

As a result of the provisions described above,

we are limited in our ability to terminate, as well as to decrease the salary or authority of, our Chief Executive Officer until December

In addition, the agreement provides that any assignor that we assign the agreement to must agree in writing to all terms of

the license, including the key man provisions, and as noted above, our Chief Executive Officer has the right to consent to any such assignment

of the agreement unless previously terminated for cause or due to death.

As the license agreement relates to our only product candidate

currently under clinical development, these provisions may be deemed to have an anti-takeover effect and may delay, deter or prevent

a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result

in a premium being paid over the market price for the shares held by stockholders.

If we fail to comply with the terms of the License

Agreement, our rights to those patents may be terminated, and we will be unable to conduct our business.

We have generated no revenue from commercial

sales to date and our future profitability is uncertain.

We have a limited operating history and our business

is subject to all of the risks inherent in the establishment of a new business enterprise.

Our likelihood of success must be considered

in light of the problems, expenses, difficulties, complications and delays frequently encountered in connection with this.

Since we began

our business, we have focused on research, development and clinical trials of product candidates, and have incurred significant losses

since inception and generated no product revenues.

If we continue to incur operating losses and fail to become a profitable company, we

may be unable to continue our operations.

We expect to continue to operate at a net loss for at least the next several years as we continue

our research and development efforts, continue to conduct clinical trials and develop manufacturing, sales, marketing and distribution

capabilities.

There can be no assurance that the products under development by us will be approved for sales in the US or elsewhere.

there can be no assurance that if such products are approved they will be successfully commercialized, and the extent of our future losses

and the timing of our profitability are highly uncertain.

International commercialization of our product

candidates faces significant obstacles.

We may plan to commercialize some of our products

internationally through collaborative relationships with foreign partners.

We have limited foreign regulatory, clinical and commercial

Future partners are critical to our international success.

not be able to enter into collaboration agreements with appropriate partners for important foreign markets on acceptable terms,

Future collaborations with foreign partners may not be effective or profitable for us.

We will need to obtain approvals

from the appropriate regulatory, pricing and reimbursement authorities to market any of our proposed products internationally,

and we may be unable to obtain foreign regulatory approvals.

Pursuing foreign regulatory approvals will be time-consuming and

The regulations can vary among countries and foreign regulatory authorities may require different or additional clinical

trials than we conducted to obtain FDA approval for our product candidates.

In addition, adverse clinical trial results, such

as death or injury due to side effects, could jeopardize not only regulatory approval, but if approval is granted, may also lead

to marketing restrictions.

Our product candidates may also face foreign regulatory requirements applicable to controlled substances.

have a history of losses and we may never achieve or sustain profitability.

We have incurred substantial losses since

our inception, and we may not achieve profitability for the foreseeable future, if at all.

Since inception, we have an accumulated

deficit of approximately $179.3 million at December 31, 2020.

The Company had cash, cash equivalents and short term investments

We may not be able to enter into collaboration agreements with appropriate

partners for important foreign markets on acceptable terms, or at all.

Future collaborations with foreign partners may not be effective

or profitable for us.

We will need to obtain approvals from the appropriate regulatory, pricing and reimbursement authorities to market

any of our proposed products internationally, and we may be unable to obtain foreign regulatory approvals.

Pursuing foreign regulatory

approvals will be time-consuming and expensive.

The regulations can vary among countries and foreign regulatory authorities may require

different or additional clinical trials than we conducted to obtain FDA approval for our product candidates.

In addition, adverse clinical

trial results, such as death or injury due to side effects, could jeopardize not only regulatory approval, but if approval is granted,

may also lead to marketing restrictions.

Our product candidates may also face foreign regulatory requirements applicable to controlled

We have a history of losses and we may never achieve or sustain

profitability.

We have incurred substantial losses since our

inception, and we may not achieve profitability for the foreseeable future, if at all.

Since inception, we have an accumulated deficit

of approximately $305.1 million at December 31, 2021.

Even if we succeed in developing and commercializing one or more of our product

candidates, we expect to incur substantial net losses and negative cash flows for the foreseeable future due in part to increasing

research and development expenses, including clinical trials, and increasing expenses from leasing additional facilities and hiring

additional personnel.

As a result, we will need to generate significant revenues in order to achieve and maintain profitability.

We may not be able to generate these revenues or achieve profitability in the future.

Even if we do achieve profitability, we may

not be able to sustain or increase profitability.

have a limited operating history upon which to base an investment decision.

limited operating history may limit your ability to evaluate our prospects due to our limited historical financial data and our

unproven potential to generate profits.

You should evaluate the likelihood of financial and operational success in light of the

risks, uncertainties, expenses and difficulties associated with an early-stage business, many of which may be beyond our control,

our potential inability

to continue to undertake preclinical studies, pharmaceutical development and clinical trials,

our potential inability

to obtain regulatory approvals, and

our potential inability

to manufacture, sell and market our products.

operations have been limited to organizing and staffing, on a limited basis, our company, acquiring, developing and securing our

proprietary technology and undertaking preclinical studies and early stage clinical trials of our principal product candidates.

These operations provide a limited basis for you to assess our ability to commercialize our product candidates and the advisability

of investing in our common stock.

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

As of December 31, 2020, we had Federal, New York State and

New York City net operating loss (NOL) carryforwards of approximately $72,507,000, $68,854,000 and $68,470,000, respectively, which

begin expiring in 2027, 2032 and 2032, respectively.

federal tax legislation enacted in 2017, informally titled the

Tax Cuts and Jobs Act, or Tax Act, federal NOLs incurred in 2018 and in future years may be carried forward indefinitely, but the

deductibility of such federal NOLs is limited to 80% of taxable income in the year.

It is uncertain if and to what extent various

states will conform to the Tax Act.

The Company had cash, cash equivalents and short term investments of approximately

$211.9 million at December 31, 2021.

Even if we succeed in developing and commercializing one or more of our product candidates, we expect

to incur substantial net losses and negative cash flows for the foreseeable future due in part to increasing research and development

expenses, including clinical trials, and increasing expenses from leasing additional facilities and hiring additional personnel.

result, we will need to generate significant revenues in order to achieve and maintain profitability.

We may not be able to generate these

revenues or achieve profitability in the future.

Even if we do achieve profitability, we may not be able to sustain or increase profitability.

We have a limited operating history upon

which to base an investment decision.

Our limited operating history may limit your ability

to evaluate our prospects due to our limited historical financial data and our unproven potential to generate profits.

You should evaluate

the likelihood of financial and operational success in light of the risks, uncertainties, expenses and difficulties associated with an

early-stage business, many of which may be beyond our control, including:

our potential inability to continue to undertake preclinical studies, pharmaceutical development and clinical trials,

our potential inability to obtain regulatory approvals, and

our potential inability to manufacture, sell and market our products.

Our operations have been limited to organizing and staffing, on a limited

basis, our company, acquiring, developing and securing our proprietary technology and undertaking preclinical studies and clinical trials

of our principal product candidates.

These operations provide a limited basis for you to assess our ability to commercialize our product

candidates and the advisability of investing in our common stock.

Our ability to use our net operating loss

carryforwards and certain other tax attributes may be limited.

As of December 31, 2021, we had Federal, New York

State and New York City net operating loss (NOL) carryforwards of approximately $92,543,000, $91,755,000 and $91,371,000, respectively,

which begin expiring in 2027, 2032 and 2032, respectively.

federal tax legislation enacted in 2017, informally titled the Tax

Cuts and Jobs Act, or Tax Act, federal NOLs incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility

of such federal NOLs is limited to 80% of taxable income in the year.

It is uncertain if and to what extent various states will conform

to the Tax Act.

Under Sections 382 and 383 of the U.S.

Internal Revenue Code of 1986, as amended, if a corporation

undergoes an “ownership change”

(generally defined as a greater than 50 percentage-point cumulative change (by value)

in the equity ownership of certain stockholders over a rolling three-year period), the corporation’s ability to use its pre-change

NOLs and other pre-change tax attributes to offset its post-change taxable income or taxes may be limited.

We may also experience

ownership changes as a result of stock offerings or as a result of subsequent shifts in our stock ownership, some of which are

outside our control.

We have not completed an analysis to determine whether any such limitations have been triggered.

determined to be triggered, our ability to use our current NOLs and other pre-change tax attributes to offset post-change taxable

income or taxes would be subject to limitation.

We will be unable to use our NOLs if we do not attain profitability sufficient

to offset our available NOLs prior to their expiration.

may not be successful in hiring and retaining key employees.

future operations and successes depend in large part upon the continued service of key members of our senior management team whom

we are highly dependent upon to manage our business, specifically Dr.

Sergio Traversa, our Chief Executive Officer.

If he terminates

Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership

change” (generally defined as a greater than 50 percentage-point cumulative change (by value) in the equity ownership of certain

stockholders over a rolling three-year period), the corporation’s ability to use its pre-change NOLs and other pre-change tax attributes

to offset its post-change taxable income or taxes may be limited.

We may also experience ownership changes as a result of stock offerings

or as a result of subsequent shifts in our stock ownership, some of which are outside our control.

We have not completed an analysis to

determine whether any such limitations have been triggered.

If any were determined to be triggered, our ability to use our current NOLs

and other pre-change tax attributes to offset post-change taxable income or taxes would be subject to limitation.

We will be unable to

use our NOLs if we do not attain profitability sufficient to offset our available NOLs prior to their expiration.

We may not be successful in hiring and retaining

key employees.

Our future operations and successes depend in

large part upon the continued service of key members of our senior management team whom we are highly dependent upon to manage our business,

specifically Dr.

Sergio Traversa, our Chief Executive Officer and Dr.

Paolo Manfredi, Acting Chief Scientific Officer.

If either terminates

employment with us, such a departure would have a material adverse effect on our business.

Our future success also depends on our

ability to identify, attract, hire or engage, retain and motivate other well-qualified managerial, technical, clinical and regulatory

We currently only have 14 full time employees and are likely to hire additional qualified personnel with expertise in

nonclinical pharmacology and toxicology, pharmaceutical development, clinical research, regulatory affairs, manufacturing, sales

and marketing.

We compete for qualified individuals with numerous biopharmaceutical companies, universities and other research

institutions.

Competition for such individuals, particularly in the United States, is intense, and we may not be able to hire sufficient

personnel to support our efforts.

There can be no assurance that these professionals will be available in the market, or that we

will be able to retain existing professionals or to meet or to continue to meet their compensation requirements.

Furthermore, the

cost base in relation to such compensation, which may include equity compensation, may increase significantly, which could have

a material adverse effect on us.

Failure to establish and maintain an effective management team and work force could adversely

affect our ability to operate, grow and manage our business.

our growth as we expand operations may strain our resources.

We expect to need to grow rapidly in order

to support additional, larger, and potentially international, pivotal clinical trials of our drug candidates, which will place

a significant strain on our financial, managerial and operational resources.

In order to achieve and manage growth effectively,

we must continue to improve and expand our operational and financial management capabilities.

Moreover, we will need to increase

staffing and to train, motivate and manage our employees.

may expand our business through the acquisition of rights to new drug candidates that could disrupt our business, harm our financial

condition and may also dilute current stockholders’

Our future success also depends on our ability

to identify, attract, hire or engage, retain and motivate other well-qualified managerial, technical, clinical and regulatory personnel.

We currently only have 10 full time employees and are likely to hire additional qualified personnel with expertise in nonclinical pharmacology

and toxicology, pharmaceutical development, clinical research, regulatory affairs, manufacturing, sales and marketing.

We compete for

qualified individuals with numerous biopharmaceutical companies, universities and other research institutions.

Competition for such individuals,

particularly in the United States, is intense, and we may not be able to hire sufficient personnel to support our efforts.

no assurance that these professionals will be available in the market, or that we will be able to retain existing professionals or to

meet or to continue to meet their compensation requirements.

Furthermore, the cost base in relation to such compensation, which may include

equity compensation, may increase significantly, which could have a material adverse effect on us.

Failure to establish and maintain an

effective management team and work force could adversely affect our ability to operate, grow and manage our business.

Managing our growth as we expand operations

may strain our resources.

We expect to need to grow rapidly in order to support ongoing and additional,

larger, and potentially international, pivotal clinical trials of our drug candidates, which will place a significant strain on our financial,

managerial and operational resources.

In order to achieve and manage growth effectively, we must continue to improve and expand our operational

and financial management capabilities.

Moreover, we will need to increase staffing and to train, motivate and manage our employees.

We may expand our business through the acquisition

of rights to new drug candidates that could disrupt our business, harm our financial condition and may also dilute current stockholders’

ownership interests in our company.

business strategy includes expanding our products and capabilities, and we may seek acquisitions of drug candidates or technologies

Acquisitions involve numerous risks, including substantial cash expenditures;

potentially dilutive issuance of equity

incurrence of debt and contingent liabilities, some of which may be difficult or impossible to identify at the time

of acquisition;

difficulties in assimilating the acquired technologies or the operations of the acquired companies;

our management’s attention away from other business concerns;

risks of entering markets in which we have limited or no direct

and the potential loss of our key employees or key employees of the acquired companies.

cannot assure you that any acquisition will result in short-term or long-term benefits to us.

We may incorrectly judge the value

or worth of an acquired product, company or business.

In addition, our future success would depend in part on our ability to manage

the rapid growth associated with some of these acquisitions.

We cannot assure you that we will be able to make the combination

of our business with that of acquired products, businesses or companies work or be successful.

Furthermore, the development or

expansion of our business or any acquired products, business or companies may require a substantial capital investment by us.

We may not have these necessary funds or they might not be available to us on acceptable terms or at all.

We may also seek to

raise funds by selling shares of our preferred or common stock, which could dilute each current stockholder’s ownership

interest in us.

interruptions could limit our ability to operate our business.

operations as well as those of our collaborators on which we depend are vulnerable to damage or interruption from computer viruses,

human error, natural disasters, electrical and telecommunication failures, international acts of terror and similar events.

have not established a formal disaster recovery plan and our back-up operations and our business interruption insurance may not

be adequate to compensate us for losses we may suffer.

A significant business interruption could result in losses or damages incurred

by us and require us to cease or curtail our operations.

business could be adversely affected by the effects of health epidemics, including the global COVID-19 pandemic.

In December 2019, a novel strain of COVID-19

was reported in China.

Our business strategy includes expanding our products

and capabilities, and we may seek acquisitions of drug candidates or technologies to do so.

Acquisitions involve numerous risks, including

substantial cash expenditures;

potentially dilutive issuance of equity securities;

incurrence of debt and contingent liabilities, some

of which may be difficult or impossible to identify at the time of acquisition;

difficulties in assimilating the acquired technologies

or the operations of the acquired companies;

diverting our management’s attention away from other business concerns;

risks of entering

markets in which we have limited or no direct experience;

and the potential loss of our key employees or key employees of the acquired

We cannot assure you that any acquisition will

result in short-term or long-term benefits to us.

We may incorrectly judge the value or worth of an acquired product, company or business.

In addition, our future success would depend in part on our ability to manage the rapid growth associated with some of these acquisitions.

We cannot assure you that we will be able to make the combination of our business with that of acquired products, businesses or companies

work or be successful.

Furthermore, the development or expansion of our business or any acquired products, business or companies may require

a substantial capital investment by us.

We may not have these necessary funds or they might not be available to us on acceptable terms

We may also seek to raise funds by selling shares of our preferred or common stock, which could dilute each current stockholder’s

ownership interest in us.

Business interruptions could limit our ability

to operate our business.

Our operations as well as those of our collaborators

on which we depend are vulnerable to damage or interruption from computer viruses, human error, natural disasters, electrical and telecommunication

failures, international acts of terror and similar events.

We have not established a formal disaster recovery plan and our back-up operations

and our business interruption insurance may not be adequate to compensate us for losses we may suffer.

A significant business interruption

could result in losses or damages incurred by us and require us to cease or curtail our operations.

Our business could be adversely affected

by the effects of health epidemics, including the global COVID-19 pandemic.

In December 2019, a novel strain of COVID-19 was

reported in China.

Since then, COVID-19 has spread globally, to include the United States.

The spread of COVID-19 has resulted

in the World Health Organization (WHO) declaring the outbreak of COVID-19 as a “pandemic,”

or a worldwide spread of

a new disease, on March 11, 2020.

Many countries around the world have imposed quarantines, travel restrictions, limitations on

gatherings, closures of businesses and other social distancing measures.

local jurisdictions continue to put restrictions in place, our ability to continue to operate our business may also be limited.

Such events may result in a period of business and manufacturing disruption, and in reduced operations, any of which could materially

affect our business, financial condition and results of operations.

The COVID-19 pandemic and efforts to contain

the outbreak have led to economic disruption, including declines in interest rates, extreme volatility in financial markets, fluctuations

The spread of COVID-19 has resulted in the

World Health Organization (WHO) declaring the outbreak of COVID-19 as a “pandemic,” or a worldwide spread of a new disease,

on March 11, 2020.

Many countries around the world have imposed quarantines, travel restrictions, limitations on gatherings, closures

of businesses and other social distancing measures.

As local jurisdictions put restrictions in place, our ability to continue

to operate our business may also be limited.

Such events may result in a period of business and manufacturing disruption, and in reduced

operations, any of which could materially affect our business, financial condition and results of operations.

The COVID-19 pandemic and efforts to contain the

outbreak have led to economic disruption, including declines in interest rates, extreme volatility in financial markets, fluctuations

in foreign currency exchange rates, reduced economic activity and a sharp increase in unemployment claims.

While the potential

economic impact brought by COVID-19 may be difficult to assess or predict, a more protracted pandemic could result in significant

disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our

In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business

and the value of our common shares.

continued spread of COVID-19 globally could also adversely affect our planned clinical trial operations, including our ability

to initiate the trials on the expected timelines and recruit and retain patients and principal investigators and site staff who,

as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs in their geography.

Further, the COVID-19

outbreak could result in delays in our clinical trials due to prioritization of hospital resources toward the outbreak, restrictions

in travel, potential unwillingness of patients to enroll in trials at this time, or the inability of patients to comply with clinical

trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare services.

In addition, we

rely on independent clinical investigators, contract research organizations and other third-party service providers to assist

us in managing, monitoring and otherwise carrying out our preclinical studies and clinical trials, and the outbreak may affect

While the potential economic

impact brought by COVID-19 may be difficult to assess or predict, a more protracted pandemic could result in significant disruption of

global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.

a recession or market correction resulting from the spread of COVID-19 could materially affect our business and the value of our common

The continued spread of COVID-19 globally could also adversely affect

our planned clinical trial operations, including our ability to initiate trials on expected timelines and recruit and retain patients

and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19 if an outbreak occurs

in their geography.

Further, the COVID-19 outbreak could result in delays in our clinical trials due to prioritization of hospital resources

toward the outbreak, restrictions in travel, potential unwillingness of patients to enroll in trials at this time, or the inability of

patients to comply with clinical trial protocols if quarantines or travel restrictions impede patient movement or interrupt healthcare

In addition, we rely on independent clinical investigators, contract research organizations and other third-party service providers

to assist us in managing, monitoring and otherwise carrying out our preclinical studies and clinical trials, and the outbreak may affect

their ability to devote sufficient time and resources to our programs or to travel to sites to perform work for us.

Additionally,

COVID-19 may also result in delays in receiving approvals from local and foreign regulatory authorities, delays in necessary interactions

with local and foreign regulators, ethics committees and other important agencies and contractors due to limitations in employee

resources or forced furlough of government employees.

The global outbreak of COVID-19 continues

to rapidly evolve.

Additionally, COVID-19 may also result in delays

in receiving approvals from local and foreign regulatory authorities, delays in necessary interactions with local and foreign regulators,

ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government

The global outbreak of COVID-19 continues to evolve.

The ultimate long-term impact of COVID-19 is highly uncertain and cannot be predicted with confidence.

since COVID-19 is a pandemic, it could materially affect our operations globally, including at our headquarters in the New York

City area and at our future clinical trial sites throughout the globe.

business could be adversely affected by health epidemics in regions where we have significant manufacturing and distribution facilities,

concentrations of clinical trial sites or other business operations.

ultimate impact of the COVID-19 outbreak or a similar health epidemic is highly uncertain and subject to change.

We do not yet

know the full extent of potential delays or impacts on our business, our supply chain, clinical trials, healthcare systems or

the global economy as a whole.

However, these effects could have a material impact on our operations, and, therefore, we will

continue to monitor the COVID-19 situation closely and implement risk mitigation as needed.

Related to Clinical and Regulatory Matters

we or our potential collaborators fail to obtain the necessary regulatory approvals, or if such approvals are limited, we and

our potential collaborators will not be allowed to commercialize our drug candidates, and we will not generate product revenues.

of all regulatory requirements for commercialization of a drug candidate typically takes many years, is dependent upon the type,

complexity and novelty of the drug candidate, and requires the expenditure of substantial resources for research and development.

Our research and clinical approaches may not lead to drugs that the FDA considers safe for humans and effective for indicated

uses we are studying.

The FDA may require studies in addition to those we plan to conduct, in which case we or our collaborators

would have to expend additional time and resources and would likely delay the date of potentially receiving regulatory approval.

The approval process may also be delayed by changes in government regulation, future legislation or administrative action or changes

in FDA policy that occur prior to or during our regulatory review.

Delays in obtaining regulatory approvals would:

delay commercialization

of, and product revenues from, our drug candidates;

diminish the competitive

advantages that we may have otherwise enjoyed, which would have an adverse effect on our operating results and financial condition.

if we or our collaborators comply with all FDA regulatory requirements, our drug candidates may never obtain regulatory approval.

If we or our collaborators fail to obtain regulatory approval for any of our drug candidates we will have fewer commercial products,

if any, and corresponding lower product revenues, if any.

Even if our drug candidates receive regulatory approval, such approval

may involve limitations on the indications and conditions of use or marketing claims for our products.

Further, later discovery

of previously unknown problems or adverse events could result in additional regulatory restrictions, including withdrawal of products.

The FDA may also require us or our collaborators to commit to perform lengthy Phase 4 post-approval clinical efficacy or safety

Our expending additional resources on such trials would have an adverse effect on our operating results and financial

jurisdictions outside the United States, we or our collaborators must receive marketing authorizations from the appropriate regulatory

authorities before commercializing our drugs.

Regulatory approval processes outside the United States generally include all of

the aforementioned requirements and risks associated with FDA approval.

we or our collaborators are unable to design, conduct and complete successful clinical trials, our drug candidates will not be

able to receive regulatory approval.

obtaining regulatory approvals for the commercial sale of any of our product candidates, we must demonstrate through lengthy,

complex and expensive nonclinical testing and clinical trials that the product is both safe and effective for use in each target

from early clinical trials may not support moving a drug candidate to later-stage clinical trials.

Phase 3 clinical trials may

not demonstrate the safety or efficacy of our drug candidates.

Success in preclinical studies and early clinical trials does not

ensure that later clinical trials will be successful.

Results of later clinical trials may not replicate the results of prior

clinical trials and preclinical studies.

Even if the results of Phase 3 clinical trials are positive, we or our collaborators

may have to commit substantial time and additional resources to conducting further preclinical studies and clinical trials before

obtaining FDA approval for any of our drug candidates.

Clinical trials are very expensive and

difficult to design and implement, in part because they are subject to rigorous requirements.

The clinical trial process also consumes

a significant amount of time.

Furthermore, if participating patients in clinical trials suffer drug-related adverse reactions during

the course of such clinical trials, or if we, our collaborators or the FDA believe that participating patients are being exposed

to unacceptable health risks, such clinical trials will have to be suspended or terminated.

Failure can occur at any stage of the

clinical trials, and we or our collaborators could encounter problems that cause abandonment or repetition of clinical trials.

Our clinical trials and our future clinical

trials for esmethadone measure clinical symptoms, such as depression that are not biologically measurable.

The primary measure

of depression is subjective and can be influenced by factors outside of our control, and can vary widely from day to day for a

particular patient, and from patient to patient and site to site within a clinical study.

The results we have obtained in completed

animal studies or we have observed in our clinical trials conducted to date may not be predictive of results from our future clinical

In addition, clinical trial results from the study of depression are inherently difficult to predict.

have no history of developing drug candidates.

We do not know whether any of our planned clinical trials will result in marketable

addition, completion of clinical trials can be delayed by numerous factors, including:

delays in identifying

and agreeing on acceptable terms with prospective clinical trial sites;

slower than expected

rates of patient recruitment and enrollment;

unanticipated patient

dropout rates;

increases in time

required to complete monitoring of patients during or after participation in a clinical trial;

of these delays could significantly impact the timing, approval and commercialization of our drug candidates and could significantly

increase our overall costs of drug development.

cannot predict whether regulatory agencies will determine that the data from our clinical trials support marketing approval.

The FDA’s and other regulatory agencies’

decision to approve our depression product candidate will depend on our ability to demonstrate with substantial clinical evidence

through adequate well-controlled clinical trials, that the product candidate is effective, as measured statistically by comparing

the overall improvement in depression in actively-treated patients against improvement in depression in the control group (usually

a placebo control).

However, there is a possibility that our data may fail to show a statistically significant difference from

the placebo control or the active control (if applicable).

Alternatively, there is a possibility that our data may be statistically

significant, but that the actual clinical benefit of the product candidates may not be considered to be clinically significant,

clinically relevant or clinically meaningful.

Even if we believe that the data from our trials will support marketing approval

in the United States or in Europe, we cannot predict whether the agencies will agree with our analysis and approve our applications.

by competitors may establish standards of care that affect our ability to conduct our clinical trials as planned.

in standards related to clinical trial design could affect our ability to design and conduct clinical trials as planned.

case, both the cost and the amount of time required to conduct a clinical trial could increase.

DEA through its quota system limits the availability of the active ingredients in certain of our current drug candidates and,

as a result, the Company’s quotas for these ingredients may not be sufficient to complete clinical trials, or to meet commercial

demand or may result in clinical delays.

Drug Enforcement Administration,

or DEA, regulates certain controlled substance chemical compounds as Schedule I, II, III, IV or V substances, with Schedule I substances

considered to present the highest risk of abuse and Schedule V substances the lowest risk.

Esmethadone is the single isomer of

methadone, a Schedule II compound, and its handling (including manufacture, research, shipment, storage, sale and use) is subject

to a high degree of federal and state oversight and regulation.

Furthermore, the amount of Schedule II substances that can be obtained

for clinical trials and commercial distribution is limited by the DEA through its quota system.

Quotas may not be sufficient to

complete clinical trials or meet commercial demand.

There is a risk that federal statutes and DEA regulations concerning applicable

quotas may interfere with the supply of the drugs used in clinical trials for our product candidates, and, in the future, the ability

to manufacture and distribute esmethadone in the volume needed to meet commercial demand.

clinical trials of our drug candidates or commercial sales of a drug candidate may expose us to expensive product liability claims

and we may not be able to maintain product liability insurance on reasonable terms or at all.

risk of product liability is inherent in the testing of pharmaceutical products.

If we cannot successfully defend ourselves against

product liability claims, we may incur substantial liabilities or be required to limit or terminate testing of one or more of

In addition, since COVID-19 is

a pandemic, it could materially affect our operations globally, including at our headquarters and at our future clinical trial sites throughout

Our business could be adversely affected by health

epidemics in regions where we have significant manufacturing and distribution facilities, concentrations of clinical trial sites or other

business operations.

The ultimate impact of the COVID-19 outbreak or

a similar health epidemic is highly uncertain and subject to change.

We do not yet know the full extent of potential delays or impacts

on our business, our supply chain, clinical trials, healthcare systems or the global economy as a whole.

However, these effects could

have a material impact on our operations, and, therefore, we will continue to monitor the COVID-19 situation closely and implement risk

mitigation as needed.

Risks Related to Russia’s Invasion

On February 24, 2022, Russia launched a large-scale

invasion of Ukraine.

The United States and other countries and certain international organizations have imposed broad-ranging economic

sanctions on Russia and certain Russian individuals, banking entities and corporations as a response, and additional sanctions may be

imposed in the future.

The extent and duration of the military action or future escalation of such hostilities, resulting sanctions and

future market disruptions and volatility are impossible to predict, but could be significant and could have a severe adverse effect on

the regional and global economies.

The ramifications of the hostilities and sanctions may not be limited to Russia, Ukraine and

Russian and Ukrainian companies but may spill over to and negatively impact other regional and global economic markets (including Europe

and the United States), companies in other countries (particularly those that have done business with Russia and Ukraine) and on

various sectors, industries and the markets for credit, securities and commodities globally.

In addition, Russia may take retaliatory

actions and other countermeasures, including cyberattacks and espionage against other countries and companies around the world, including

attacks on key infrastructure such as the power grid and the internet.

The potential for a wider conflict could further increase

financial market volatility and could negatively affect our ability to raise additional capital when required.

While we do not currently

conduct any business in Russia or Ukraine, the conflict and its effects could adversely affect our planned clinical trial operations,

including our ability to recruit and retain patients.

Risks Related to Clinical and Regulatory Matters

If we or our potential collaborators fail

to obtain the necessary regulatory approvals, or if such approvals are limited, we and our potential collaborators will not be allowed

to commercialize our drug candidates, and we will not generate product revenues.

Satisfaction of all regulatory requirements for commercialization of

a drug candidate typically takes many years, is dependent upon the type, complexity and novelty of the drug candidate, and requires the

expenditure of substantial resources for research and development.

Our research and clinical approaches may not lead to drugs that the

FDA considers safe for humans and effective for indicated uses we are studying.

The FDA may require studies in addition to those we are

conducting, in which case we or our collaborators would have to expend additional time and resources and would likely delay the date of

potentially receiving regulatory approval.

The approval process may also be delayed by changes in government regulation, future legislation

or administrative action or changes in FDA policy that occur prior to or during our regulatory review.

Delays in obtaining regulatory

approvals would:

delay commercialization of, and product revenues from, our drug candidates;

diminish the competitive advantages that we may have otherwise enjoyed, which would have an adverse effect on our operating results and financial condition.

Even if we or our collaborators comply with all

FDA regulatory requirements, our drug candidates may never obtain regulatory approval.

If we or our collaborators fail to obtain regulatory

approval for any of our drug candidates we will have fewer commercial products, if any, and corresponding lower product revenues, if any.

Even if our drug candidates receive regulatory approval, such approval may involve limitations on the indications and conditions of use

or marketing claims for our products.

Further, later discovery of previously unknown problems or adverse events could result in additional

regulatory restrictions, including withdrawal of products.

The FDA may also require us or our collaborators to commit to perform lengthy

Phase 4 post-approval clinical efficacy or safety studies.

Our expending additional resources on such trials would have an adverse effect

on our operating results and financial condition.

In jurisdictions outside the United States, we

or our collaborators must receive marketing authorizations from the appropriate regulatory authorities before commercializing our drugs.

Regulatory approval processes outside the United States generally include all of the aforementioned requirements and risks associated

with FDA approval.

If we or our collaborators are unable to

design, conduct and complete successful clinical trials, our drug candidates will not be able to receive regulatory approval.

Before obtaining regulatory approvals for the

commercial sale of any of our product candidates, we must demonstrate through lengthy, complex and expensive nonclinical testing and clinical

trials that the product is both safe and effective for use in each target indication.

Results from early clinical trials may not support

moving a drug candidate to later-stage clinical trials.

Phase 3 clinical trials may not demonstrate the safety or efficacy of our drug

Success in preclinical studies and early clinical trials does not ensure that later clinical trials will be successful.

of later clinical trials may not replicate the results of prior clinical trials and preclinical studies.

Even if the results of Phase

3 clinical trials are positive, we or our collaborators may have to commit substantial time and additional resources to conducting further

preclinical studies and clinical trials before obtaining FDA approval for any of our drug candidates.

Clinical trials are very expensive and difficult

to design and implement, in part because they are subject to rigorous requirements.

The clinical trial process also consumes a significant

amount of time.

Furthermore, if participating patients in clinical trials suffer drug-related adverse reactions during the course of such

clinical trials, or if we, our collaborators or the FDA believe that participating patients are being exposed to unacceptable health risks,

such clinical trials will have to be suspended or terminated.

Failure can occur at any stage of the clinical trials, and we or our collaborators

could encounter problems that cause abandonment or repetition of clinical trials.

Our clinical trials and our future clinical trials

for esmethadone measure clinical symptoms, such as depression that are not biologically measurable.

The primary measure of depression

is subjective and can be influenced by factors outside of our control, and can vary widely from day to day for a particular patient, and

from patient to patient and site to site within a clinical study.

The results we have obtained in completed animal studies or we have

observed in our clinical trials conducted to date may not be predictive of results from our future clinical trials.

In addition, clinical

trial results from the study of depression are inherently difficult to predict.

We have a limited history of developing drug

We do not know whether any of our ongoing or planned clinical trials will result in marketable drugs.

In addition, completion of clinical trials can

be delayed by numerous factors, including:

delays in identifying and agreeing on acceptable terms with prospective clinical trial sites;

slower than expected rates of patient recruitment and enrollment;

unanticipated patient dropout rates;

increases in time required to complete monitoring of patients during or after participation in a clinical trial.

Any of these delays could significantly impact

the timing, approval and commercialization of our drug candidates and could significantly increase our overall costs of drug development.

We cannot predict whether regulatory agencies

will determine that the data from our clinical trials support marketing approval.

The FDA’s and other regulatory agencies’ decision to approve

our depression product candidate will depend on our ability to demonstrate with substantial clinical evidence through adequate well-controlled

clinical trials, that the product candidate is effective, as measured statistically by comparing the overall improvement in depression

in actively-treated patients against improvement in depression in the control group (a placebo control).

However, there is a possibility

that our data may fail to show a statistically significant difference from the placebo control or the active control.

Alternatively, there

is a possibility that our data may be statistically significant, but that the actual clinical benefit of the product candidates may not

be considered to be clinically significant, clinically relevant or clinically meaningful.

Even if we believe that the data from our trials

will support marketing approval in the United States or in Europe, we cannot predict whether the agencies will agree with our analysis

and approve our applications.

Developments by competitors may establish

standards of care that affect our ability to conduct our clinical trials as planned.

Changes in standards related to clinical trial

design could affect our ability to design and conduct clinical trials as planned.

In that case, both the cost and the amount of time required

to conduct a clinical trial could increase.

The DEA through its quota system limits

the availability of the active ingredients in certain of our current drug candidates and, as a result, the Company’s quotas for

these ingredients may not be sufficient to complete clinical trials, or to meet commercial demand or may result in clinical delays.

The DEA regulates certain controlled substance chemical compounds as

Schedule I, II, III, IV or V substances, with Schedule I substances considered to present the highest risk of abuse and Schedule V substances

the lowest risk.

Esmethadone is the single isomer of methadone, a Schedule II compound, and its handling (including manufacture, research,

shipment, storage, sale and use) is subject to a high degree of federal and state oversight and regulation.

Furthermore, the amount of

Schedule II substances that can be obtained for clinical trials and commercial distribution is limited by the DEA through its quota system.

Quotas may not be sufficient to complete clinical trials or meet commercial demand.

There is a risk that federal statutes and DEA regulations

concerning applicable quotas may interfere with the supply of the drugs used in clinical trials for our product candidates, and, in the

future, the ability to manufacture and distribute esmethadone in the volume needed to meet commercial demand.

Conducting clinical trials of our drug candidates

or commercial sales of a drug candidate may expose us to expensive product liability claims and we may not be able to maintain product

liability insurance on reasonable terms or at all.

The risk of product liability is inherent in the

testing of pharmaceutical products.

If we cannot successfully defend ourselves against product liability claims, we may incur substantial

liabilities or be required to limit or terminate testing of one or more of our drug candidates.

Our inability to obtain sufficient product

liability insurance at an acceptable cost to protect against product liability claims could prevent or inhibit the commercialization of

our drug candidates.

Our inability to obtain sufficient product liability insurance at an acceptable cost to protect against product

liability claims could prevent or inhibit the commercialization of our drug candidates.

We currently carry clinical trial insurance

but do not carry product liability insurance.

If we successfully commercialize our drug candidates, we may face product liability

claims, regardless of FDA approval for commercial manufacturing and sale.

We may not be able to obtain such insurance at a reasonable

cost, if at all.

Even if our agreements with any current or future corporate collaborators entitle us to indemnification against

product liability losses, such indemnification may not be available or adequate should any claim arise.

We currently carry clinical trial insurance but do not carry product liability insurance.

If we successfully commercialize

our drug candidates, we may face product liability claims, regardless of FDA approval for commercial manufacturing and sale.

be able to obtain such insurance at a reasonable cost, if at all.

Even if our agreements with any current or future corporate collaborators

entitle us to indemnification against product liability losses, such indemnification may not be available or adequate should any claim

If our drug candidates receive regulatory

approval, we and our collaborators will also be subject to ongoing FDA obligations and continued regulatory review, such as continued

safety reporting requirements, and we and our collaborators may also be subject to additional FDA post-marketing obligations or

new regulations, all of which may result in significant expense and limit our and our collaborators’

ability to commercialize

Any regulatory approvals that our drug

candidates receive may also be subject to limitations on the indicated uses for which the drug may be marketed or contain requirements

for costly post-marketing follow-up studies.

In addition, if the FDA approves any of our drug candidates, the manufacturing processes,

labeling, packaging, distribution, post-approval monitoring and adverse event reporting, storage, import, export, advertising,

promotion and record keeping for the drug will be subject to extensive and ongoing regulatory requirements.

The FDA has significant

post-market authority, including the authority to require labeling changes based on new safety information and to require post-market

studies or clinical trials to evaluate safety risks related to the use of a product or to require withdrawal of the product from

The manufacturing facilities used to manufacture our product candidates will also be subject to periodic review and

inspection by the FDA and other regulatory agencies, including for continued compliance with current good manufacturing practices

(cGMPs) requirements.

The discovery of any new or previously unknown problems with our third-party manufacturers, manufacturing

processes or facilities may result in restrictions on the product, manufacturer or facility, including withdrawal of the product

from the market.

Any product promotion and advertising will also be subject to regulatory requirements and continuing regulatory

The FDA imposes stringent restrictions on manufacturers’

communications regarding use of their products.

If we promote

our product candidates in a manner inconsistent with FDA-approved labeling or otherwise not in compliance with FDA regulations,

we may be subject to enforcement action.

If we or our collaborators, manufacturers or service providers fail to comply with applicable

continuing regulatory requirements in the United States or foreign jurisdictions in which we seek to market our products, we or

they may be subject to, among other things, fines, warning or untitled letters, holds on clinical trials, suspension or withdrawal

of regulatory approval, product recalls and seizures, administrative detention of products, refusal to permit the import or export

of products, operating restrictions, injunction, civil penalties and criminal prosecution.

The FDA’s policies may change and

additional government regulations may be enacted that could prevent or delay regulatory approval of our drug candidates.

on July 9, 2012, the FDA approved a risk management program, known as a Risk Evaluation and Mitigation Strategy, or REMS,

for extended-release and long-acting opioid analgesics, or ER/LA opioid analgesics.

This REMS will require companies affected by

the REMS to make available training for health care professionals who prescribe ER/LA opioid analgesics on proper prescribing practices

and also to distribute educational materials to prescribers and patients on the safe use of ER/LA opioid analgesics.

predict the likelihood, nature or extent of adverse government regulation that may arise from future legislation or administrative

action, either in the United States or abroad.

Fast Track Designation may not lead to a faster development

or regulatory review or approval process.

We have obtained Fast Track Designation for esmethadone for

the adjunctive treatment of MDD.

Fast Track Designation is granted if a drug is intended for the treatment of a serious or life-threatening

condition and the drug demonstrates the potential to address unmet medical needs for this condition.

Fast Track Designation does

not guarantee a faster development process, review or approval compared to conventional FDA procedures.

The FDA may withdraw Fast

Track Designation if it believes that the designation is no longer supported by data from our clinical development program.

We may not be able to obtain marketing

exclusivity under the Hatch-Waxman Amendments or equivalent regulatory data exclusivity protection in other jurisdictions for our

safety reporting requirements, and we and our collaborators may also be subject to additional FDA post-marketing obligations or new regulations,

all of which may result in significant expense and limit our and our collaborators’ ability to commercialize our drugs.

Any regulatory approvals that our drug candidates

receive may also be subject to limitations on the indicated uses for which the drug may be marketed or contain requirements for costly

post-marketing follow-up studies.

In addition, if the FDA approves any of our drug candidates, the manufacturing processes, labeling,

packaging, distribution, post-approval monitoring and adverse event reporting, storage, import, export, advertising, promotion and record

keeping for the drug will be subject to extensive and ongoing regulatory requirements.

The FDA has significant post-market authority,

including the authority to require labeling changes based on new safety information and to require post-market studies or clinical trials

to evaluate safety risks related to the use of a product or to require withdrawal of the product from the market.

The manufacturing facilities

used to manufacture our product candidates will also be subject to periodic review and inspection by the FDA and other regulatory agencies,

including for continued compliance with current good manufacturing practices (cGMPs) requirements.

The discovery of any new or previously

unknown problems with our third-party manufacturers, manufacturing processes or facilities may result in restrictions on the product,

manufacturer or facility, including withdrawal of the product from the market.

Any product promotion and advertising will also be subject

to regulatory requirements and continuing regulatory review.

The FDA imposes stringent restrictions on manufacturers’ communications

regarding use of their products.

If we promote our product candidates in a manner inconsistent with FDA-approved labeling or otherwise

not in compliance with FDA regulations, we may be subject to enforcement action.

If we or our collaborators, manufacturers or service

providers fail to comply with applicable continuing regulatory requirements in the United States or foreign jurisdictions in which we

seek to market our products, we or they may be subject to, among other things, fines, warning or untitled letters, holds on clinical trials,

suspension or withdrawal of regulatory approval, product recalls and seizures, administrative detention of products, refusal to permit

the import or export of products, operating restrictions, injunction, civil penalties and criminal prosecution.

The FDA’s policies may change and additional government regulations

may be enacted that could prevent or delay regulatory approval of our drug candidates.

We cannot predict the likelihood, nature or extent

of adverse government regulation that may arise from future legislation or administrative action, either in the United States or abroad.

Fast Track Designation may not lead to a faster development or

regulatory review or approval process.

We have obtained Fast

Track Designation for esmethadone for the adjunctive treatment of MDD.

Fast Track Designation is granted if a drug is intended for the

treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition.

Fast Track Designation does not guarantee a faster development process, review or approval compared to conventional FDA procedures.

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

Even though we have obtained orphan drug designation in the United States

for esmethadone for the treatment of postherpetic neuralgia, we may not obtain or maintain orphan drug exclusivity for that

product candidate, and we may not obtain orphan drug designation or exclusivity for any of our other product candidates or indications.

The FDA may designate drugs for relatively small

patient populations as orphan drugs.

Under the Orphan Drug Act, the FDA may designate a product as an orphan drug if it is a drug intended

to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United

Generally, if a product with an orphan drug designation subsequently

receives the first marketing approval for the indication for which it has such designation, the product is entitled to a period of marketing

exclusivity, which precludes the FDA from approving another marketing application for the same drug for the same disease for seven years.

Orphan drug exclusivity may be lost if the FDA determines that the request for designation was materially defective or if the manufacturer

is unable to assure sufficient quantity of the drug to meet the needs of patients with the rare disease or condition.

We have obtained orphan drug designation for esmethadone for the treatment

of postherpetic neuralgia.

If the product candidate were to obtain orphan drug exclusivity upon approval, such exclusivity would prevent

the FDA from approving another application to market a drug containing the same active moiety for the same orphan indication, except in

very limited circumstances, including when the FDA concludes that the later drug is safer, more effective or makes a major contribution

to patient care.

In addition, a designated orphan drug may not receive orphan drug exclusivity if it is approved for a use that is broader

than the indication for which it received orphan designation.

Even though we have received orphan drug designation for esmethadone

for the treatment of postherpetic neuralgia, we may not be the first to obtain marketing approval for this active moiety for the orphan-designated

indication due to the uncertainties associated with developing pharmaceutical product candidates.

Further, even if we obtain orphan drug

exclusivity for a product, that exclusivity may not effectively protect the product from competition because different drugs with different

active moieties can be approved for the same condition or a drug with the same active moiety can be approved for a different indication.

Orphan drug designation by the FDA neither shortens the development time or regulatory review time of a drug nor gives the drug any advantage

in the regulatory review or approval process.

In addition, even if we intend to seek orphan drug designation for other product candidates

or indications, we may never receive such designations or obtain orphan drug exclusivity.

We may not be able to obtain marketing exclusivity

under the Hatch-Waxman Amendments or equivalent regulatory data exclusivity protection in other jurisdictions for our products.

We intend to rely, in part, on Hatch-Waxman

1 unchanged sentence

The Hatch-Waxman Amendments provide marketing

exclusivity to the first applicant to gain approval of an NDA under specific provisions of the Federal Food, Drug, and Cosmetic

For esmethadone, which we intend to elect to have not be considered the same active ingredient as methadone and therefore

an NCE, we anticipate obtaining 5-year exclusivity.

If FDA were to determine that we do not meet the requirements to make the election,

we may not be able to obtain 5-year exclusivity for the product.

In addition, under the statute, this election currently may only

be made in an NDA submitted before October 1, 2022.

If we do not submit an NDA before that date or if the statute is not amended

to extend the election, we may not obtain 5-year exclusivity for esmethadone, if approved.

For esmethadone, which is an NCE, we

anticipate obtaining 5-year exclusivity for a product containing an active moiety that the FDA has not previously approved.

There can be no assurance that European

authorities will grant data exclusivity for our products, because it does not contain a new active molecule.

Even if European data

exclusivity is granted for esmethadone, this may not protect us from direct competition.

A competitor(s) with a generic version

of our products may be able to obtain approval of its product during our product’s period of data exclusivity, by submitting

a marketing authorization application (MAA) with a less than full package of nonclinical and clinical data.

exclusivity to the first applicant to gain approval of an NDA under specific provisions of the Federal Food, Drug, and Cosmetic Act.

For esmethadone, which we intend to elect to have not be considered the same active ingredient as methadone and therefore an NCE, we

anticipate obtaining 5-year exclusivity.

If FDA were to determine that we do not meet the requirements to make the election, we may not

be able to obtain 5-year exclusivity for the product.

In addition, under the statute, this election currently may only be made in an

NDA submitted before October 1, 2022.

As we do not expect to submit an NDA before that date, if the statute is not amended to extend

the election, we would not obtain 5-year exclusivity for esmethadone, if approved.

There can be no assurance that European authorities will grant data

exclusivity for esmethadone, because it does not contain a new active molecule.

Even if European data exclusivity is granted for esmethadone,

this may not protect us from direct competition.

A competitor(s) with a generic version of our product may be able to obtain approval

of its product during our product’s period of data exclusivity, by submitting a marketing authorization application (MAA) with a

less than full package of nonclinical and clinical data.

We may need to focus our future efforts

in new therapeutic areas where we have little or no experience.

Although our primary strategic interest

is in the areas of depression, esmethadone has potential benefits in other therapeutic areas.

If our drug development efforts in

depression fail, or if the competitive landscape or investment climate for antidepressant drug development is less attractive,

we may need to change the company’s strategic focus to include development of our product candidates, or of newly acquired

product candidates, for therapeutic areas other than depression.

We have very limited drug development experience in other therapeutic

areas and we may be unsuccessful in making this change from a depression company to a company with a focus in areas other than

depression or a company with a focus in multiple therapeutic areas including depression.

Although our primary strategic interest is in

the areas of depression, esmethadone has potential benefits in other therapeutic areas.

If our drug development efforts in depression

fail, or if the competitive landscape or investment climate for antidepressant drug development is less attractive, we may need to change

the company’s strategic focus to include development of our product candidates, or of newly acquired product candidates, for therapeutic

areas other than depression.

We have very limited drug development experience in other therapeutic areas and we may be unsuccessful in

making this change from a depression company to a company with a focus in areas other than depression or a company with a focus in multiple

therapeutic areas including depression.

Our product candidates contain controlled

1 unchanged sentence

statutes and regulations, and the use of which may generate public controversy.

The active ingredients in esmethadone are

listed by the DEA as controlled substances under the Controlled Substances Act of 1970.

The DEA regulates certain drug substances

in Schedule I, II, III, IV or V, with Schedule I substances considered to present the highest risk of substance abuse and Schedule

V substances the lowest risk.

These product candidates are also subject to DEA regulations relating to their handling (i.e., manufacturing,

The active ingredients in esmethadone are listed by the CSA and regulations

promulgated by the DEA as controlled substances.

The CSA and regulations promulgated by the DEA regulate certain drug substances in Schedule

I, II, III, IV or V, with Schedule I substances considered to present the highest risk of substance abuse and Schedule V substances the

These product candidates are also subject to the CSA and DEA regulations relating to their handling (i.e., manufacturing,

storage, distribution, prescribing and dispensing procedures).

Products containing controlled substances

may generate public controversy.

Opponents of these products may seek restrictions on marketing and withdrawal of any regulatory

In addition, these opponents may seek to generate negative publicity in an effort to persuade the medical community

to reject these products.

Political pressures and adverse publicity could lead to delays in, and increased expenses for, and limit

or restrict the introduction and marketing of our product candidates.

Failure to comply with the Controlled

Substances Act or DEA regulations, or the cost of compliance with these regulations, may adversely affect our business.

Esmethadone is subject to extensive regulation

Although esmethadone is substantially devoid of opioid activity, and psychotomimetic effects, the DEA may elect to

designate it as a controlled substance falling under a DEA controlled substance Schedule.

Additionally, esmethadone is produced

by separation from racemic methadone, a scheduled drug subject to extensive regulation by the DEA.

The manufacture, shipment, storage, sale

and use of controlled substances are subject to a high degree of regulation, including security, record-keeping and reporting obligations

enforced by the DEA.

For example, all Schedule II drug prescriptions must be signed by a physician, physically presented to a pharmacist

and may not be refilled.

This high degree of regulation can result in significant costs in order to comply with the required regulations,

which may have an adverse effect on the development and commercialization of our product candidates.

The DEA limits the availability and production

of all scheduled substances, including esmethadone, through a quota system.

The DEA requires substantial evidence and documentation

of expected legitimate medical and scientific needs before assigning quotas to manufacturers.

In future years, we may need greater

amounts of controlled substances to sustain our Phase 3 development program, and we will need significantly greater amounts to

implement our commercialization plans if the FDA approves our proposed formulations.

Any delay or refusal by the DEA in establishing

the procurement quota or a reduction in our quota for scheduled controlled substances or a failure to increase it over time as

we anticipate could delay or stop the clinical development or commercial sale of some of our products or product candidates.

could have a material adverse effect on our business, results of operations, financial condition and prospects.

a supplier of an active pharmaceutical ingredient (API) or a pharmaceutical excipient fails to provide us sufficient quantities,

we may not be able to obtain an alternative supply on a timely or acceptable basis.

pharmaceutical excipients and other APIs are multisource, although not all sources have an active Drug Master File (DMF) with

(A DMF is a submission to the FDA used to provide confidential detailed information about facilities, processes, or articles

used in the manufacturing, processing, packaging, and storing of drugs to support drug development and approval).

some of the countries for our multisource APIs are not the same as our drug manufacturing locations.

Thus, any disruption in supply

from our preferred vendor could result in significant delays with our pharmaceutical development, clinical trials, NDA submission,

NDA approval or commercial sale of the finished product due to contract delays, the need to manufacture a new batch of API, out

of specification API, the need for import and export permits, and the failure of the newly sourced API to perform to the standards

of the previously sourced API.

Modifications to our products may

require new NDA approvals.

After a product candidate receives FDA

approval, expanded uses or uses in new indications of our products may require additional clinical trials and new regulatory approvals,

including additional IND submissions before we can begin clinical development and supplemental NDA approval prior to marketing

If we are required to conduct additional clinical studies, it would require additional expenditures and harm our operating

Delays in obtaining required future approvals could adversely affect our ability to introduce new or enhanced products

in a timely manner, which in turn would harm our future growth.

in the commencement or completion of pharmaceutical development, manufacturing or clinical testing could result in increased costs

to us and delay our ability to generate revenues.

do not know whether our pharmaceutical development, manufacturing or clinical testing will begin on time or be completed on schedule,

For example, we may encounter delays during the manufacture of pilot scale batches including delays with our contract

development or manufacturing organization, sourcing satisfactory quantities of APIs, narcotic import and export permits, sourcing

of excipients, contract disputes with our third party vendors and manufacturers, or failure of the product to meet specification.

Products containing controlled substances may

generate public controversy.

Opponents of these products may seek restrictions on marketing and withdrawal of any regulatory approvals.

In addition, these opponents may seek to generate negative publicity in an effort to persuade the medical community to reject these products.

Political pressures and adverse publicity could lead to delays in, and increased expenses for, and limit or restrict the introduction

and marketing of our product candidates.

Failure to comply with the CSA or DEA regulations,

or the cost of compliance with these regulations, may adversely affect our business.

Esmethadone is subject to extensive regulation by the DEA.

esmethadone is substantially devoid of opioid activity, and psychotomimetic effects, it is currently classified as a Schedule II drug.

Upon approval, the DEA may continue to designate it as a controlled substance falling under a DEA controlled substance schedule.

Esmethadone is produced by separation from racemic methadone, a scheduled drug subject to extensive regulation by the DEA.

The manufacture, shipment, storage, sale and use of controlled substances

are subject to a high degree of regulation, including security, recordkeeping and reporting obligations enforced by the DEA.

II substances (as well as substances defined as narcotics in any Schedule) are subject to the strictest regulatory requirements and restrictions

involving registration, storage, security, recordkeeping and reporting.

In particular, distribution and dispensing of Schedule II drugs

are strictly controlled.

For example, all Schedule II drug prescriptions cannot be refilled and must contain a written or electronic signature

of a practitioner when presented to a pharmacy.

This high degree of regulation can result in significant costs in order to comply with

the required regulations, which may have an adverse effect on the development and commercialization of our product candidates.

The DEA limits the availability and production of all scheduled substances,

including esmethadone, through a quota system.

The DEA requires substantial evidence and documentation of expected legitimate medical

and scientific needs before assigning quotas to manufacturers.

In future years, we may need greater amounts of controlled substances to

sustain our development program, and we will need significantly greater amounts to implement our commercialization plans if the FDA approves

our proposed formulations.

Any delay or refusal by the DEA in establishing the procurement quota or a reduction in our quota for scheduled

controlled substances or a failure to increase it over time as we anticipate could delay or stop the clinical development or commercial

sale of some of our products or product candidates.

This could have a material adverse effect on our business, results of operations,

financial condition and prospects.

If a supplier of an active pharmaceutical

ingredient (API) or a pharmaceutical excipient fails to provide us sufficient quantities, we may not be able to obtain an alternative

supply on a timely or acceptable basis.

Our pharmaceutical excipients and other APIs are multisource, although

not all sources have an active Drug Master File (DMF) with the FDA.

(A DMF is a submission to the FDA used to provide confidential detailed

information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of drugs to support

drug development and approval).

In addition, some of the countries for our multisource APIs may not be same as our drug manufacturing

Thus, any disruption in supply from our preferred vendors could result in significant delays with our pharmaceutical development,

clinical trials, NDA submission, NDA approval or commercial sale of the finished product due to contract delays, the need to manufacture

a new batch of API, out of specification API, the need for import and export permits, and the failure of the newly sourced API to perform

to the standards of the previously sourced API.

Modifications to our products may require

new NDA approvals.

After a product candidate receives FDA approval, expanded uses or uses

in new indications of our products may require additional clinical trials and new regulatory approvals, including additional IND submissions

before we can begin clinical development and supplemental NDA approval prior to marketing and sales.

If we are required to conduct additional

clinical studies, it would require additional expenditures and impact our operating results.

Delays in obtaining required future approvals

could adversely affect our ability to introduce new or enhanced products in a timely manner, which in turn would harm our future growth.

Delays in the commencement or completion

of pharmaceutical development, manufacturing or clinical testing could result in increased costs to us and delay our ability to generate

We do not know whether our pharmaceutical development, manufacturing

or clinical testing will be on time or be completed on schedule, if at all.

For example, we may encounter delays during the manufacture

of pilot scale batches including delays with our contract development or manufacturing organization, sourcing satisfactory quantities

of APIs, narcotic import and export permits, sourcing of excipients, contract disputes with our third party vendors and manufacturers,

or failure of the product to meet specification.

Similar delays may occur a during our cGMP manufacture of the product.

commencement and completion of clinical trials can be disrupted for a variety of reasons, including difficulties in:

recruiting and enrolling

patients to participate in a clinical trial;

obtaining regulatory

approval to commence a clinical trial;

reaching agreement

on acceptable terms with prospective clinical research organizations and trial sites;

obtaining approval

of the institutional review board (IRB) at each site selected for participation in our clinical trials;

manufacturing sufficient

quantities of a product candidate;

investigator fraud,

including data fabrication by clinical trial personnel;

diversion of controlled

substances by clinical trial personnel;

clinical trial may also be suspended or terminated by us, the FDA or other regulatory authorities due to a number of factors,

failure to conduct

the clinical trial in accordance with regulatory requirements or in accordance with our clinical protocols;

inspection of the

clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical

unforeseen safety

inadequate patient

enrollment or lack of adequate funding to continue the clinical trial.

addition, changes in regulatory requirements and guidance may occur and we may need to amend clinical trial protocols to reflect

these changes, which could impact the cost, timing or successful completion of a clinical trial.

If we experience delays in the

commencement or completion of our clinical trials, the commercial prospects for our product candidates will be harmed, and our

ability to generate product revenues will be delayed.

Many of the factors that cause, or lead to, a delay in the commencement

or completion of clinical trials may also lead to the denial of regulatory approval of a product candidate.

Conducting successful clinical studies

may require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.

enrollment in clinical trials and completion of patient participation and follow-up depends on many factors, including the size

of the patient population;

the nature of the trial protocol;

the attractiveness of, or the discomforts and risks associated with,

the treatments received by enrolled subjects;

the availability of appropriate clinical trial investigators;

The commencement and completion of clinical trials

can be disrupted for a variety of reasons, including difficulties in:

recruiting and enrolling patients to participate in a clinical trial;

obtaining regulatory approval to commence a clinical trial;

reaching agreement on acceptable terms with prospective clinical research organizations and trial sites;

obtaining approval of the institutional review board (IRB) at each site selected for participation in our clinical trials;

manufacturing sufficient quantities of a product candidate;

investigator fraud, including data fabrication by clinical trial personnel;

diversion of controlled substances by clinical trial personnel.

A clinical trial may also be suspended or terminated

by us, the FDA or other regulatory authorities due to a number of factors, including:

failure to conduct the clinical trial in accordance with regulatory requirements or in accordance with our clinical protocols;

inspection of the clinical trial operations or trial site by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;

unforeseen safety issues;

inadequate patient enrollment or lack of adequate funding to continue the clinical trial.

In addition, changes in regulatory requirements

and guidance may occur and we may need to amend clinical trial protocols to reflect these changes, which could impact the cost, timing

or successful completion of a clinical trial.

If we experience delays in the commencement or completion of our clinical trials, the commercial

prospects for our product candidates will be harmed, and our ability to generate product revenues will be delayed.

Many of the factors

that cause, or lead to, a delay in the commencement or completion of clinical trials may also lead to the denial of regulatory approval

of a product candidate.

Conducting successful clinical studies may

require the enrollment of large numbers of patients, and suitable patients may be difficult to identify and recruit.

Patient enrollment in clinical trials and completion

of patient participation and follow-up depends on many factors, including the size of the patient population;

the nature of the trial

the attractiveness of, or the discomforts and risks associated with, the treatments received by enrolled subjects;

the availability

of appropriate clinical trial investigators;

support staff;

number of ongoing clinical trials in the same indication that compete for the same patients;

and proximity of patients to clinical

sites and ability to comply with the eligibility and exclusion criteria for participation in the clinical trial and patient compliance.

For example, patients may be discouraged from enrolling in our clinical trials if the trial protocol requires them to undergo

extensive post-treatment procedures or follow-up to assess the safety and effectiveness of our products or if they determine that

the treatments received under the trial protocols are not attractive or involve unacceptable risks or discomforts.

also not participate in our clinical trials if they choose to participate in contemporaneous clinical trials of competitive products.

Adverse safety outcomes could affect

our ability to conduct our clinical trials or obtain approval of our product candidates.

Serious injury or death resulting from

a failure of one of our drug candidates during current or future clinical trials could result in the FDA delaying our clinical

trials or denying or delaying clearance or approval of a product.

Even though an adverse event may not be the result of the failure

of our drug candidate, FDA or an IRB could delay or halt a clinical trial for an indefinite period of time while an adverse event

is reviewed, and likely would do so in the event of multiple such events.

Any delay or termination of our current or future clinical

trials as a result of the risks summarized above, including delays in obtaining or maintaining required approvals from IRBs, delays

in patient enrollment, the failure of patients to continue to participate in a clinical trial, and delays or termination of clinical

trials as a result of protocol modifications or adverse events during the trials, may cause an increase in costs and delays in

the submission of any NDAs to the FDA, delay the approval and commercialization of our products or result in the failure of the

clinical trial, which could adversely affect our business, operating results and prospects.

Lengthy delays in the completion of

clinical trials of our products would adversely affect our business and prospects and could cause us to cease operations.

On November 29, 2006, the FDA required

a boxed warning to be added to the Prescribing Information for racemic methadone, a parent compound to our esmethadone related

to cardiac death.

Although the decision was based on case reports and not on a controlled clinical trial, as part of the development

of esmethadone we will likely have to conduct a specific study to evaluate the effects of esmethadone on QTc interval prolongation.

QT interval is a measure of the time between the start of the Q wave and the end of the T wave in the heart’s electrical

Drugs that prolong the corrected QT interval (QTc) are associated with an increased risk of serious disturbances in heart

rhythm, potentially leading to sudden death.

If we do a QT interval prolongation study in accordance with regulatory guidelines,

there is no assurance that the results of the study will demonstrate an absence of QT interval prolongation with esmethadone.

adverse safety outcome from such study could result in a similar bolded warning on the label of esmethadone or in a decision not

to approve esmethadone, either one of which could have serious consequences for our continued operation.

the number of ongoing clinical trials in the same indication that compete

for the same patients;

and proximity of patients to clinical sites and ability to comply with the eligibility and exclusion criteria for

participation in the clinical trial and patient compliance.

For example, patients may be discouraged from enrolling in our clinical trials

if the trial protocol requires them to undergo extensive post-treatment procedures or follow-up to assess the safety and effectiveness

of our products or if they determine that the treatments received under the trial protocols are not attractive or involve unacceptable

risks or discomforts.

Patients may also not participate in our clinical trials if they choose to participate in contemporaneous clinical

trials of competitive products.

Adverse safety outcomes could affect our ability to conduct

our clinical trials or obtain approval of our product candidates.

Serious injury or death resulting from a failure

of one of our drug candidates during current or future clinical trials could result in the FDA delaying our clinical trials or denying

or delaying clearance or approval of a product.

Even though an adverse event may not be the result of the failure of our drug candidate,

FDA or an IRB could delay or halt a clinical trial for an indefinite period of time while an adverse event is reviewed, and likely would

do so in the event of multiple such events.

Any delay or termination of our current or future clinical trials as a result of the risks

summarized above, including delays in obtaining or maintaining required approvals from IRBs, delays in patient enrollment, the failure

of patients to continue to participate in a clinical trial, and delays or termination of clinical trials as a result of protocol modifications

or adverse events during the trials, may cause an increase in costs and delays in the submission of any NDAs to the FDA, delay the approval

and commercialization of our products or result in the failure of the clinical trial, which could adversely affect our business, operating

results and prospects.

Lengthy delays in the completion of clinical trials of our products would adversely affect our business and prospects

and could cause us to cease operations.

On November 29, 2006, the FDA required a boxed warning to be added

to the Prescribing Information for racemic methadone, a parent compound to our esmethadone related to cardiac death.

Although the decision

was based on case reports and not on a controlled clinical trial, as part of the development of esmethadone we are actively assessing

the cardiac safety profile of esmethadone in our Phase 3 clinical trials.

There is no assurance that the results of our clinical studies

will demonstrate an absence of cardiac adverse events with esmethadone.

An adverse safety outcome could result in a similar bolded warning

on the label of esmethadone or in a decision not to approve esmethadone, either one of which could have serious consequences for our continued

Esmethadone may require Risk Evaluation

1 unchanged sentence

Esmethadone, may require REMS.

may include requirements for special labeling or medication guides for patients, special communication plans to health care professionals

and restrictions on distribution and use.

We cannot predict the specific REMS to be required as part of the FDA’s approval

of any of our products.

Depending on the extent of the REMS requirements, our costs to commercialize our products may increase

significantly.

Furthermore, controlled substances risks that are not adequately addressed through proposed REMS for our product

candidates may also prevent or delay their approval for commercialization.

Our products will face significant

competition in the markets for such products, and if they are unable to compete successfully, our business will suffer.

Our products candidates face, and will

continue to face, intense competition from large pharmaceutical companies, specialty pharmaceutical and biotechnology companies

as well as academic and research institutions.

The REMS may include

requirements for special labeling or medication guides for patients, special communication plans to health care professionals and restrictions

on distribution and use.

We cannot predict the specific REMS to be required as part of the FDA’s approval of any of our products.

Depending on the extent of the REMS requirements, our costs to commercialize our products may increase significantly.

Furthermore, controlled

substances risks that are not adequately addressed through proposed REMS for our product candidates may also prevent or delay their approval

for commercialization.

Our products will face significant competition

in the markets for such products, and if they are unable to compete successfully, our business will suffer.

Our products candidates face, and will continue to face, intense competition

from large pharmaceutical companies, specialty pharmaceutical and biotechnology companies as well as academic and research institutions.

We compete in an industry that is characterized by:

(i) rapid technological change,

(ii) evolving industry standards, (iii) emerging competition and (iv) new product introductions.

Our competitors have existing

products and technologies that will compete with our products and technologies and may develop and commercialize additional products

and technologies that will compete with our products and technologies.

Because several competing companies and institutions have

greater financial resources than us, they may be able to:

(i) provide broader services and product lines, (ii) make greater investments

in research and development, (R&D ) , and (iii) carry on larger R&D initiatives.

Our competitors also have greater

development capabilities than we do and have substantially greater experience in undertaking nonclinical and clinical testing of

products, obtaining regulatory approvals, and manufacturing and marketing pharmaceutical products.

They also have greater name

recognition and better access to customers than us.

Our chief competitors include companies such as Johnson and Johnson, Allergan,

Pfizer, Eli Lilly, Sage Therapeutics, and Axsome Therapeutics among others.

may be exposed to liability claims associated with the use of hazardous materials and chemicals.

research and development activities involve the controlled use of hazardous materials and chemicals.

Although we believe that

our safety procedures for using, storing, handling and disposing of these materials comply with federal, state and local laws

and regulations, we cannot completely eliminate the risk of accidental injury or contamination from these materials.

of such an accident, we could be held liable for any resulting damages and any liability could materially adversely affect our

business, financial condition and results of operations.

In addition, the federal, state and local laws and regulations governing

the use, manufacture, storage, handling and disposal of hazardous or radioactive materials and waste products may require us to

incur substantial compliance costs that could materially adversely affect our business and financial condition.

may incur substantial liabilities and may be required to limit commercialization of our products in response to product liability

testing and marketing of medical products entail an inherent risk of product liability.

We may be held liable if serious adverse

reactions from the use of our product candidates occur.

If we cannot successfully defend ourselves against product liability claims,

we may incur substantial liabilities or be required to limit commercialization of our product candidates.

Our inability to obtain

sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent

or inhibit the commercialization of pharmaceutical products we develop, alone or with corporate collaborators.

We currently do

not carry product liability insurance.

We, or any corporate collaborators, may not be able to obtain insurance at a reasonable

cost, if at all.

Even if our agreements with any future corporate collaborators entitle us to indemnification against losses,

such indemnification may not be available or adequate if any claim arises.

Related to Our Intellectual Property

business depends upon securing and protecting critical intellectual property.

commercial success will depend in part on our obtaining and maintaining patent, trade secret, copyright and trademark protection

of our technologies in the United States and other jurisdictions as well as successfully enforcing this intellectual property

and defending this intellectual property against third-party challenges.

We will only be able to protect our technologies from

unauthorized use by third parties to the extent that valid and enforceable intellectual property protection, such as patents or

trade secrets, cover them.

In particular, we place considerable emphasis on obtaining patent and trade secret protection for significant

new technologies, products and processes.

Furthermore, the degree of future protection of our proprietary rights is uncertain

because legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our

competitive advantage.

Moreover, the degree of future protection of our proprietary rights is uncertain for products that are

currently in the early stages of development because we cannot predict which of these products will ultimately reach the commercial

market or whether the commercial versions of these products will incorporate proprietary technologies.

patent position is highly uncertain and involves complex legal and factual questions.

we cannot predict the breadth of claims that may be allowed or enforced in our patents or in third-party patents.

we or our licensors might not have been the first to make the inventions covered by each of our pending patent applications and

issued patents;

we or our licensors might not have been the first to file patent applications for these inventions;

independently develop similar or alternative technologies or duplicate any of our technologies;

it is possible that none of our

pending patent applications or the pending patent applications of our licensors will result in issued patents;

our issued patents

and issued patents of our licensors may not provide a basis for commercially viable technologies, or may not provide us with any

competitive advantages, or may be challenged and invalidated by third parties;

and, we may not develop additional proprietary

technologies that are patentable.

a result, our owned and licensed patents may not be valid and we may not be able to obtain and enforce patents and to maintain

trade secret protection for the full commercial extent of our technology.

The extent to which we are unable to do so could materially

harm our business.

trade secrets, improvements, confidential know-how and continuing technological innovation are important to our scientific and

commercial success.

Although we attempt to and will continue to attempt to protect our proprietary information through reliance

on trade secret laws and the use of confidentiality agreements with our corporate partners, collaborators, employees and consultants

and other appropriate means, these measures may not effectively prevent disclosure of our proprietary information, and, in any

event, others may develop independently, or obtain access to, the same or similar information.

of our patent rights are licensed to us by third parties.

If we fail to comply with the terms of these license agreements, our

rights to those patents may be terminated, and we will be unable to conduct our business.

we are found to be infringing on patents or trade secrets owned by others, we may be forced to cease or alter our product development

efforts, obtain a license to continue the development or sale of our products, and/or pay damages.

manufacturing processes and potential products may violate proprietary rights of patents that have been or may be granted to competitors,

universities or others, or the trade secrets of those persons and entities.

As the pharmaceutical industry expands and more patents

are issued, the risk increases that our processes and potential products may give rise to claims that they infringe the patents

or trade secrets of others.

These other persons could bring legal actions against us claiming damages and seeking to enjoin clinical

testing, manufacturing and marketing of the affected product or process.

If any of these actions are successful, in addition to

any potential liability for damages, we could be required to obtain a license in order to continue to conduct clinical tests,

manufacture or market the affected product or use the affected process.

Required licenses may not be available on acceptable terms,

if at all, and the results of litigation are uncertain.

If we become involved in litigation or other proceedings, it could consume

a substantial portion of our financial resources and the efforts of our personnel.

Our ability to protect and enforce

our patents does not guaranty that we will secure the right to commercialize our patents.

(i) rapid technological change, (ii) evolving industry standards, (iii) emerging competition

and (iv) new product introductions.

Our competitors have existing products and technologies that will compete with our products and technologies

and may develop and commercialize additional products and technologies that will compete with our products and technologies.

Because several

competing companies and institutions have greater financial resources than us, they may be able to:

(i) provide broader services and product

lines, (ii) make greater investments in research and development, (R&D ) , and (iii) carry on larger R&D initiatives.

competitors also have greater development capabilities than we do and have substantially greater experience in undertaking nonclinical

and clinical testing of products, obtaining regulatory approvals, and manufacturing and marketing pharmaceutical products.

They also have

greater name recognition and better access to customers than us.

Our chief competitors include companies such as Johnson and Johnson,

Abbvie, Pfizer, Eli Lilly, Sage Therapeutics, and Axsome Therapeutics among others.

We may be exposed to liability claims associated

with the use of hazardous materials and chemicals.

Our research and development activities involve

the controlled use of hazardous materials and chemicals.

Although we believe that our safety procedures for using, storing, handling and

disposing of these materials comply with federal, state and local laws and regulations, we cannot completely eliminate the risk of accidental

injury or contamination from these materials.

In the event of such an accident, we could be held liable for any resulting damages and

any liability could materially adversely affect our business, financial condition and results of operations.

In addition, the federal,

state and local laws and regulations governing the use, manufacture, storage, handling and disposal of hazardous or radioactive materials

and waste products may require us to incur substantial compliance costs that could materially adversely affect our business and financial

We may incur substantial liabilities and

may be required to limit commercialization of our products in response to product liability lawsuits.

The testing and marketing of medical products

entail an inherent risk of product liability.

We may be held liable if serious adverse reactions from the use of our product candidates

If we cannot successfully defend ourselves against product liability claims, we may incur substantial liabilities or be required

to limit commercialization of our product candidates.

Our inability to obtain sufficient product liability insurance at an acceptable

cost to protect against potential product liability claims could prevent or inhibit the commercialization of pharmaceutical products we

develop, alone or with corporate collaborators.

We currently do not carry product liability insurance.

We, or any corporate collaborators,

may not be able to obtain insurance at a reasonable cost, if at all.

Even if our agreements with any future corporate collaborators entitle

us to indemnification against losses, such indemnification may not be available or adequate if any claim arises.

Risks Related to Our Intellectual Property

Our business depends upon securing and protecting

critical intellectual property.

Our commercial success will depend in part on

our obtaining and maintaining patent, trade secret, copyright and trademark protection of our technologies in the United States and other

jurisdictions as well as successfully enforcing this intellectual property and defending this intellectual property against third-party

We will only be able to protect our technologies from unauthorized use by third parties to the extent that valid and enforceable

intellectual property protection, such as patents or trade secrets, cover them.

In particular, we place considerable emphasis on obtaining

patent and trade secret protection for significant new technologies, products and processes.

Furthermore, the degree of future protection

of our proprietary rights is uncertain because legal means afford only limited protection and may not adequately protect our rights or

permit us to gain or keep our competitive advantage.

Moreover, the degree of future protection of our proprietary rights is uncertain

for products that are currently in the early stages of development because we cannot predict which of these products will ultimately reach

the commercial market or whether the commercial versions of these products will incorporate proprietary technologies.

Our patent position is highly uncertain

and involves complex legal and factual questions.

Accordingly, we cannot predict the breadth of

claims that may be allowed or enforced in our patents or in third-party patents.

For example, we or our licensors might not have been

the first to make the inventions covered by each of our pending patent applications and issued patents;

we or our licensors might not

have been the first to file patent applications for these inventions;

others may independently develop similar or alternative technologies

or duplicate any of our technologies;

it is possible that none of our pending patent applications or the pending patent applications of

our licensors will result in issued patents;

our issued patents and issued patents of our licensors may not provide a basis for commercially

viable technologies, or may not provide us with any competitive advantages, or may be challenged and invalidated by third parties;

we may not develop additional proprietary technologies that are patentable.

As a result, our owned and licensed patents may

not be valid and we may not be able to obtain and enforce patents and to maintain trade secret protection for the full commercial extent

of our technology.

The extent to which we are unable to do so could materially harm our business.

Unpatented trade secrets, improvements, confidential

know-how and continuing technological innovation are important to our scientific and commercial success.

Although we attempt to and will

continue to attempt to protect our proprietary information through reliance on trade secret laws and the use of confidentiality agreements

with our corporate partners, collaborators, employees and consultants and other appropriate means, these measures may not effectively

prevent disclosure of our proprietary information, and, in any event, others may develop independently, or obtain access to, the same

or similar information.

Certain of our patent rights are licensed to us

by third parties.

If we fail to comply with the terms of these license agreements, our rights to those patents may be terminated, and

we will be unable to conduct our business.

If we are found to be infringing on patents

or trade secrets owned by others, we may be forced to cease or alter our product development efforts, obtain a license to continue the

development or sale of our products, and/or pay damages.

Our manufacturing processes and potential products

may violate proprietary rights of patents that have been or may be granted to competitors, universities or others, or the trade secrets

of those persons and entities.

As the pharmaceutical industry expands and more patents are issued, the risk increases that our processes

and potential products may give rise to claims that they infringe the patents or trade secrets of others.

These other persons could bring

legal actions against us claiming damages and seeking to enjoin clinical testing, manufacturing and marketing of the affected product

If any of these actions are successful, in addition to any potential liability for damages, we could be required to obtain

a license in order to continue to conduct clinical tests, manufacture or market the affected product or use the affected process.

licenses may not be available on acceptable terms, if at all, and the results of litigation are uncertain.

If we become involved in litigation

or other proceedings, it could consume a substantial portion of our financial resources and the efforts of our personnel.

Our ability to protect and enforce our patents

does not guaranty that we will secure the right to commercialize our patents.

A patent is a limited monopoly right conferred

upon an inventor, and his successors in title, in return for the making and disclosing of a new and non-obvious invention.

monopoly is of limited duration but, while in force, allows the patent holder to prevent others from making and/or using his invention.

While a patent gives the holder this right to exclude others, it is not a license to commercialize the invention, where other permissions

may be required for permissible commercialization to occur.

For example, a drug cannot be marketed without the appropriate authorization

from the FDA, regardless of the existence of a patent covering the product.

Further, the invention, even if patented itself, cannot

be commercialized if it infringes the valid patent rights of another party.

Intellectual property rights do not

necessarily address all potential threats to our competitive advantage.

The degree of future protection afforded

by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately

protect our business, or permit us to maintain our competitive advantage.

This monopoly

is of limited duration but, while in force, allows the patent holder to prevent others from making and/or using his invention.

patent gives the holder this right to exclude others, it is not a license to commercialize the invention, where other permissions may

be required for permissible commercialization to occur.

For example, a drug cannot be marketed without the appropriate authorization from

the FDA, regardless of the existence of a patent covering the product.

Further, the invention, even if patented itself, cannot be commercialized

if it infringes the valid patent rights of another party.

Intellectual property rights do not necessarily

address all potential threats to our competitive advantage.

The degree of future protection afforded by our

intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business,

or permit us to maintain our competitive advantage.

The following examples are illustrative:

1 unchanged sentence

others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

it is possible that our future patent applications will not lead to issued patents;

it is possible that our current and future patent applications will

not lead to issued patents;

issued patents that we own or license may not provide us with any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges;

1 unchanged sentence

and we may not develop additional proprietary technologies that are patentable.

Related to Government Regulation

may undertake international operations, which will subject us to risks inherent with operations outside of the United States.

we do not have any foreign operations at this time, we intend to seek to obtain market clearances in foreign markets that we deem

to generate significant opportunities.

However, even with the cooperating of a commercialization partner, conducting drug development

in foreign countries involves inherent risks, including, but not limited to:

difficulties in staffing, funding and managing foreign

Risks Related to Government Regulation

We may undertake international operations,

which will subject us to risks inherent with operations outside of the United States.

Although we do not have any foreign operations

at this time, we intend to seek to obtain market clearances in foreign markets that we deem to generate significant opportunities.

even with the cooperating of a commercialization partner, conducting drug development in foreign countries involves inherent risks, including,

but not limited to:

difficulties in staffing, funding and managing foreign operations;

unexpected changes in regulatory requirements;

1 unchanged sentence

tariffs and other trade barriers;

in protecting, acquiring, enforcing and litigating intellectual property rights;

difficulties in protecting, acquiring, enforcing and litigating intellectual property

fluctuations in currency exchange rates;

potentially adverse tax consequences.

we were to experience any of the difficulties listed above, or any other difficulties, any international development activities

and our overall financial condition may suffer and cause us to reduce or discontinue our international development and registration

depend on our information technology systems and those of our third-party collaborators, service providers, contractors or consultants.

Our internal computer systems, or those of our third-party collaborators, service providers, contractors or consultants, may fail

or suffer security breaches, disruptions, or incidents, which could result in a material disruption of our development programs

or loss of data or compromise the privacy, security, integrity or confidentiality of sensitive information related to our business

and have a material adverse effect on our reputation, business, financial condition or results of operations.

the ordinary course of our business, we collect, store and transmit large amounts of confidential information, including intellectual

property, proprietary business information and personal information.

Our internal technology systems and infrastructure, and those

of our current or future third-party collaborators, service providers, contractors and consultants are vulnerable to damage from

computer viruses, unauthorized access or use resulting from malware, natural disasters, terrorism, war and telecommunication and

electrical failures, denial-of-service attacks, cyber-attacks or cyber-intrusions over the Internet, hacking, phishing and other

social engineering attacks, persons inside our organizations (including employees or contractors), loss or theft, or persons with

access to systems inside our organization.

Attacks on information technology systems are increasing in their frequency, levels

of persistence, sophistication and intensity, and they are being conducted by increasingly sophisticated and organized foreign

governments, groups and individuals with a wide range of motives and expertise.

and potentially adverse tax consequences.

If we were to experience any of the difficulties

listed above, or any other difficulties, any international development activities and our overall financial condition may suffer and cause

us to reduce or discontinue our international development and registration efforts.

We depend on our information technology

systems and those of our third-party collaborators, service providers, contractors or consultants.

Our internal computer systems, or those

of our third-party collaborators, service providers, contractors or consultants, may fail or suffer security breaches, disruptions, or

incidents, which could result in a material disruption of our development programs or loss of data or compromise the privacy, security,

integrity or confidentiality of sensitive information related to our business and have a material adverse effect on our reputation, business,

financial condition or results of operations.

In the ordinary course of our business, we collect,

store and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal

Our internal technology systems and infrastructure, and those of our current or future third-party collaborators, service

providers, contractors and consultants are vulnerable to damage from computer viruses, unauthorized access or use resulting from malware,

natural disasters, terrorism, war and telecommunication and electrical failures, denial-of-service attacks, cyber-attacks or cyber-intrusions

over the internet, hacking, phishing and other social engineering attacks, persons inside our organizations (including employees or contractors),

loss or theft, or persons with access to systems inside our organization.

Attacks on information technology systems are increasing in

their frequency, levels of persistence, sophistication and intensity, and they are being conducted by increasingly sophisticated and organized

foreign governments, groups and individuals with a wide range of motives and expertise.

In addition to extracting or accessing sensitive

information, such attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering

and other means to affect service reliability and threaten the security, confidentiality, integrity and availability of information.

The prevalent use of mobile devices that access sensitive information also increases the risk of data security incidents which

could lead to the loss of confidential information or other intellectual property.

While to our knowledge we have not experienced

any material system failure, accident or security breach to date, if such an event were to occur and cause interruptions in our

operations or the operations of third-party collaborators, service providers, contractors and consultants, it could result in

a material disruption of our development programs and significant reputational, financial, legal, regulatory, business or operational

The costs to us to mitigate, investigate and respond to potential security incidents, breaches, disruptions, network security

problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and while we have

implemented security measures to protect our data security and information technology systems, our efforts to address these problems

may not be successful, and these problems could result in unexpected interruptions, delays, cessation of service and other harm

to our business and our competitive position.

to comply with existing or future laws and regulations related to privacy or data security could lead to government enforcement

actions (which could include civil or criminal fines or penalties), private litigation, other liabilities, and/or adverse publicity.

Compliance or the failure to comply with such laws could increase the costs of our products and services, could limit their use

or adoption, and could otherwise negatively affect our operating results and business.

of data processing is evolving, as federal, state, and foreign governments continue to adopt new, or modify existing, laws and

regulations addressing data privacy and security, and the collection, processing, storage, transfer, and use of data.

partners may be subject to current, new, or modified federal, state, and foreign data privacy and protection laws and regulations

(e.g., laws and regulations that address data privacy and data security including, without limitation, health data).

or proposed laws and regulations are subject to differing interpretations and may be inconsistent among jurisdictions, and guidance

on implementation and compliance practices are often updated or otherwise revised, which adds to the complexity of processing

personal data.

These and other requirements could require us or our partners to incur additional costs to achieve compliance,

limit our competitiveness, necessitate the acceptance of more onerous obligations in our contracts, restrict our ability to use,

store, transfer, and process data, impact our or our partners’

ability to process or use data in order to support the provision

of our products or services, affect our or our partners’

ability to offer our products and services in certain locations,

information, such attacks could include the deployment of harmful malware, ransomware, denial-of-service attacks, social engineering and

other means to affect service reliability and threaten the security, confidentiality, integrity and availability of information.

The prevalent

use of mobile devices that access sensitive information also increases the risk of data security incidents which could lead to the loss

of confidential information or other intellectual property.

While to our knowledge we have not experienced any material system failure,

accident or security breach to date, if such an event were to occur and cause interruptions in our operations or the operations of third-party

collaborators, service providers, contractors and consultants, it could result in a material disruption of our development programs and

significant reputational, financial, legal, regulatory, business or operational harm.

The costs to us to mitigate, investigate and respond

to potential security incidents, breaches, disruptions, network security problems, bugs, viruses, worms, malicious software programs and

security vulnerabilities could be significant, and while we have implemented security measures to protect our data security and information

technology systems, our efforts to address these problems may not be successful, and these problems could result in unexpected interruptions,

delays, cessation of service and other harm to our business and our competitive position.

Failure to comply with existing or future

laws and regulations related to privacy or data security could lead to government enforcement actions (which could include civil or criminal

fines or penalties), private litigation, other liabilities, and/or adverse publicity.

Compliance or the failure to comply with such laws

could increase the costs of our products and services, could limit their use or adoption, and could otherwise negatively affect our operating

results and business.

Regulation of data processing is evolving, as

federal, state, and foreign governments continue to adopt new, or modify existing, laws and regulations addressing data privacy and security,

and the collection, processing, storage, transfer, and use of data.

We and our partners may be subject to current, new, or modified federal,

state, and foreign data privacy and protection laws and regulations (e.g., laws and regulations that address data privacy and data security

including, without limitation, health data).

These new or proposed laws and regulations are subject to differing interpretations and may

be inconsistent among jurisdictions, and guidance on implementation and compliance practices are often updated or otherwise revised, which

adds to the complexity of processing personal data.

These and other requirements could require us or our partners to incur additional

costs to achieve compliance, limit our competitiveness, necessitate the acceptance of more onerous obligations in our contracts, restrict

our ability to use, store, transfer, and process data, impact our or our partners’ ability to process or use data in order to support

the provision of our products or services, affect our or our partners’ ability to offer our products and services in certain locations,

or cause regulators to reject, limit or disrupt our clinical trial activities.

2 unchanged sentences

data privacy and protection laws and regulations could result in government enforcement actions (which could include civil or criminal

penalties, fines or sanctions), private litigation, and/or adverse publicity and could negatively affect our operating results

and business.

Moreover, patients about whom we or our partners obtain information, as well as the providers who share this information

with us, may contractually limit our ability to use and disclose the information.

Claims that we have violated individuals’

privacy rights, failed to comply with data protection laws, or breached our contractual obligations related to security or privacy,

even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could

harm our business.

Compliance with data protection laws may be time-consuming, require additional resources and could result in

increased expenses, reduce overall demand for our products and services and make it more difficult to meet expectations of or commitments

to customers or partners.

relationships with customers and payors will be subject to applicable anti-kickback, fraud and abuse, transparency, and other

healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational

harm, administrative burdens, and diminished profits and future earnings.

providers, physicians and payors play a primary role in the recommendation and prescription of any product candidates for which

we may obtain marketing approval.

Our arrangements with healthcare providers, payors, customers and others may expose us to broadly

applicable fraud and abuse and other healthcare laws and regulations that may constrain the business or financial arrangements

and relationships through which we research, market, sell and distribute any product candidates for which we may obtain marketing

Restrictions under applicable federal, state and foreign healthcare laws and regulations may affect our ability to operate.

Related to Our Reliance on Third Parties

have no manufacturing capabilities and depend on other parties for our manufacturing operations.

If these manufacturers fail to

meet our requirements and strict regulatory requirements, our product development and commercialization efforts may be materially

do not own or operate facilities for drug manufacturing, storage, distribution or quality testing.

We currently rely, and may

continue to rely, on third-party contract manufacturers to manufacture APIs, drug products and other components of our product

Reliance on third-party manufacturers may expose us to different risks than if we were to manufacture product candidates

The manufacturing process for a product

candidate is subject to FDA and foreign regulatory authority review.

We, and our suppliers and manufacturers, must meet applicable

manufacturing requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order

to comply with regulatory standards, such as cGMPs.

Securing marketing approval also requires the submission of information about

the product manufacturing process to, and inspection of manufacturing facilities by, the FDA and foreign regulatory authorities.

If our contract manufacturers cannot successfully manufacture material that conforms to our specifications and the strict regulatory

requirements of the FDA or comparable foreign regulatory authorities, we may not be able to rely on their manufacturing facilities

for the manufacture of our product candidates.

Moreover, we do not control the manufacturing process at our contract manufacturers

and are completely dependent on them for compliance with current regulatory requirements.

In the event that any of our manufacturers

fails to comply with such requirements or to perform its obligations in relation to quality, timing or otherwise, or if our supply

of components or other materials becomes limited or interrupted for other reasons, we may be forced to enter into an agreement

with another third party, which we may not be able to do on reasonable terms, if at all.

In some cases, the technical skills or

technology required to manufacture our product candidates may be unique or proprietary to the original manufacturer and we may

have difficulty transferring such to another third party.

These factors would increase our reliance on such manufacturer or require

us to obtain a license from such manufacturer in order to enable us, or to have another third party, manufacture our product candidates.

We expect to continue to rely on third-party

manufacturers if we receive regulatory approval for any product candidate.

To the extent that we have existing, or enter into future,

manufacturing arrangements with third parties, we will depend on these third parties to perform their obligations in a timely manner

consistent with contractual and regulatory requirements, including those related to quality control and assurance.

Any manufacturing

facilities used to produce our products will be subject to periodic review and inspection by the FDA and foreign regulatory authorities,

including for continued compliance with cGMP requirements, quality control, quality assurance and corresponding maintenance of

records and documents.

If we are unable to obtain or maintain third-party manufacturing for product candidates, or to do so on

commercially reasonable terms, we may not be able to develop and commercialize our product candidates successfully.

Our or a third

party’s failure to execute on our manufacturing requirements, comply with cGMPs or maintain a compliance status acceptable

to the FDA or foreign regulatory authorities could adversely affect our business in a number of ways, including:

penalties, fines or sanctions), private litigation, and/or adverse publicity and could negatively affect our operating results and business.

Moreover, patients about whom we or our partners obtain information, as well as the providers who share this information with us, may

contractually limit our ability to use and disclose the information.

Claims that we have violated individuals’ privacy rights, failed

to comply with data protection laws, or breached our contractual obligations related to security or privacy, even if we are not found

liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.

with data protection laws may be time-consuming, require additional resources and could result in increased expenses, reduce overall demand

for our products and services and make it more difficult to meet expectations of or commitments to customers or partners.

Our operations and relationships with future

customers, providers and third-party payors will be subject to applicable anti-kickback, fraud and abuse and other healthcare laws and

regulations, which could expose us to penalties including criminal sanctions, civil penalties, contractual damages, reputational harm

and diminished profits and future earnings.

Healthcare providers and third-party payors will

play a primary role in the recommendation and prescription of any product candidates for which we obtain marketing approval.

arrangements with providers, third-party payors and customers will subject us to broadly applicable fraud and abuse and other healthcare

laws and regulations that may constrain the business or financial arrangements and relationships through which we market, sell and distribute

any product candidates for which we obtain marketing approval.

Restrictions under applicable U.S.

state healthcare laws and regulations include the following:

● the federal Anti-Kickback Statute prohibits, among other things, persons and entities from knowingly and

willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either

the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under

federal healthcare programs such as Medicare and Medicaid.

A person or entity does not need to have actual knowledge of the federal Anti-Kickback

Statute or specific intent to violate it in order to have committed a violation;

● federal false claims laws, including the federal False Claims Act, imposes criminal and civil penalties,

including through civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented,

to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an

obligation to pay money to the federal government.

In addition, the government may assert that a claim including items or services resulting

from a violation of the U.S.

federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims

● HIPAA imposes criminal and civil liability for, among other things, knowingly and willfully executing

or attempting to execute a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent

to violate it in order to have committed a violation;

● the federal Physician Payment Sunshine Act requires applicable manufacturers of covered drugs, devices,

biologics, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program,

with specific exceptions, to report payments and other transfers of value provided during the previous year to physicians, as defined

by such law, physician assistants, certain types of advance practice nurses, and teaching hospitals, as well as certain ownership and

investment interests held by such physicians and their immediate family, which includes annual data collection and reporting obligations;

● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may

apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party

payors, including private insurers;

and some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s

voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers

to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;

● some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary

compliance guidelines and the relevant compliance guidance promulgated by the federal government and may require drug manufacturers to

report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures.

Efforts to ensure that our business arrangements with third parties

will comply with applicable healthcare laws and regulations will involve substantial costs.

It is possible that governmental authorities

will conclude that our business practices may not comply with current or future statutes, regulations or case law involving applicable

fraud and abuse or other healthcare laws and regulations.

If our operations are found to be in violation of any of these laws or any other

governmental regulations that may apply to us, we may be subject to significant civil, criminal and administrative penalties, damages,

fines, imprisonment, exclusion of product candidates from government-funded healthcare programs, such as Medicare and Medicaid, disgorgement,

contractual damages, reputational harm, diminished profits and future earnings, and the curtailment or restructuring of our operations.

If any of the physicians or other healthcare providers or entities with whom we expect to do business is found to be not in compliance

with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government-funded

healthcare programs.

Risks Related to Our Reliance on Third Parties

We have no manufacturing capabilities and

depend on other parties for our manufacturing operations.

If these manufacturers fail to meet our requirements and strict regulatory requirements,

our product development and commercialization efforts may be materially harmed.

We do not own or operate facilities for drug manufacturing,

storage, distribution or quality testing.

We currently rely, and may continue to rely, on third-party contract manufacturers to manufacture

APIs, drug products and other components of our product candidates.

Reliance on third-party manufacturers may expose us to different risks

than if we were to manufacture product candidates ourselves.

The manufacturing process for a product candidate

is subject to FDA and foreign regulatory authority review.

We, and our suppliers and manufacturers, must meet applicable manufacturing

requirements and undergo rigorous facility and process validation tests required by regulatory authorities in order to comply with regulatory

standards, such as cGMPs.

Securing marketing approval also requires the submission of information about the product manufacturing process

to, and inspection of manufacturing facilities by, the FDA and foreign regulatory authorities.

If our contract manufacturers cannot successfully

manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or comparable foreign regulatory

authorities, we may not be able to rely on their manufacturing facilities for the manufacture of our product candidates.

do not control the manufacturing process at our contract manufacturers and are completely dependent on them for compliance with current

regulatory requirements.

In the event that any of our manufacturers fails to comply with such requirements or to perform its obligations

in relation to quality, timing or otherwise, or if our supply of components or other materials becomes limited or interrupted for other

reasons, we may be forced to enter into an agreement with another third party, which we may not be able to do on reasonable terms, if

In some cases, the technical skills or technology required to manufacture our product candidates may be unique or proprietary

to the original manufacturer and we may have difficulty transferring such to another third party.

These factors would increase our reliance

on such manufacturer or require us to obtain a license from such manufacturer in order to enable us, or to have another third party, manufacture

our product candidates.

We expect to continue to rely on third-party manufacturers

if we receive regulatory approval for any product candidate.

To the extent that we have existing, or enter into future, manufacturing

arrangements with third parties, we will depend on these third parties to perform their obligations in a timely manner consistent with

contractual and regulatory requirements, including those related to quality control and assurance.

Any manufacturing facilities used to

produce our products will be subject to periodic review and inspection by the FDA and foreign regulatory authorities, including for continued

compliance with cGMP requirements, quality control, quality assurance and corresponding maintenance of records and documents.

unable to obtain or maintain third-party manufacturing for product candidates, or to do so on commercially reasonable terms, we may not

be able to develop and commercialize our product candidates successfully.

Our or a third party’s failure to execute on our manufacturing

requirements, comply with cGMPs or maintain a compliance status acceptable to the FDA or foreign regulatory authorities could adversely

affect our business in a number of ways, including:

an inability to initiate or continue clinical trials of product candidates under development;

4 unchanged sentences

in the event of approval to market and commercialize a product candidate, an inability to meet commercial demands for our products.

Our contract manufacturers may experience

manufacturing difficulties due to resource constraints or as a result of labor disputes or unstable political environments.

our contract manufacturers were to encounter difficulties, our ability to provide our product candidates to patients in preclinical

and clinical trials, or to provide product for treatment of patients once approved, would be jeopardized.

intend to rely on third parties to conduct our preclinical studies and clinical trials.

If these third parties do not perform

as contractually required or otherwise expected, we may not be able to obtain regulatory approval for our product candidates.

We do not currently, or in the future,

intend to conduct preclinical studies or clinical trials on our own, and instead will rely on third parties, such as contract research

organizations (CROs), medical institutions, clinical investigators and contract laboratories, to assist us with our preclinical

studies and clinical trials.

Accordingly, we will have less control over the timing, quality and other aspects of preclinical studies

and clinical trials than we would have had we conducted them on our own.

These investigators, CROs and consultants are not our

employees and we will have limited control over the amount of time and resources that they dedicate to our programs.

parties may have contractual relationships with other entities, some of which may be our competitors, which may draw time and resources

from our programs.

The third parties with which we may contract might not be diligent, careful or timely in conducting our preclinical

studies or clinical trials, resulting in the preclinical studies or clinical trials being delayed or unsuccessful.

we cannot contract with acceptable third parties on commercially reasonable terms, or at all, or if these third parties do not

carry out their contractual duties, satisfy legal and regulatory requirements for the conduct of preclinical studies or clinical

trials or meet expected deadlines, our clinical development programs could be delayed and otherwise adversely affected.

events, we will be responsible for ensuring that each of our preclinical studies and clinical trials are conducted in accordance

with the general investigational plan and protocols for the trial as well as applicable legal and regulatory requirements.

FDA generally requires preclinical studies to be conducted in accordance with good laboratory practices and clinical trials to

be conducted in accordance with good clinical practices, including for designing, conducting, recording and reporting the results

of preclinical studies and clinical trials to assure that data and reported results are credible and accurate and that the rights,

integrity and confidentiality of clinical trial participants are protected.

Our contract manufacturers may experience manufacturing

difficulties due to resource constraints or as a result of labor disputes or unstable political environments.

If our contract manufacturers

were to encounter difficulties, our ability to provide our product candidates to patients in preclinical and clinical trials, or to provide

product for treatment of patients once approved, would be jeopardized.

We intend to rely on third parties to conduct

our preclinical studies and clinical trials.

If these third parties do not perform as contractually required or otherwise expected, we

may not be able to obtain regulatory approval for our product candidates.

We do not currently, or in the future, intend

to conduct preclinical studies or clinical trials on our own, and instead will rely on third parties, such as contract research organizations

(CROs), medical institutions, clinical investigators and contract laboratories, to assist us with our preclinical studies and clinical

Accordingly, we will have less control over the timing, quality and other aspects of preclinical studies and clinical trials than

we would have had we conducted them on our own.

These investigators, CROs and consultants are not our employees and we will have limited

control over the amount of time and resources that they dedicate to our programs.

These third parties may have contractual relationships

with other entities, some of which may be our competitors, which may draw time and resources from our programs.

The third parties with

which we may contract might not be diligent, careful or timely in conducting our preclinical studies or clinical trials, resulting in

the preclinical studies or clinical trials being delayed or unsuccessful.

If we cannot contract with acceptable third parties

on commercially reasonable terms, or at all, or if these third parties do not carry out their contractual duties, satisfy legal and regulatory

requirements for the conduct of preclinical studies or clinical trials or meet expected deadlines, our clinical development programs could

be delayed and otherwise adversely affected.

In all events, we will be responsible for ensuring that each of our preclinical studies and

clinical trials are conducted in accordance with the general investigational plan and protocols for the trial as well as applicable legal

and regulatory requirements.

The FDA generally requires preclinical studies to be conducted in accordance with good laboratory practices

and clinical trials to be conducted in accordance with good clinical practices, including for designing, conducting, recording and reporting

the results of preclinical studies and clinical trials to assure that data and reported results are credible and accurate and that the

rights, integrity and confidentiality of clinical trial participants are protected.

Our reliance on third parties that we do not control

will not relieve us of these responsibilities and requirements.

Any adverse development or delay in our preclinical studies or

clinical trials as a result of our reliance on third parties could have a material and adverse effect on our business, financial

condition, results of operations and prospects.

Related to Ownership of Our Common Stock

is a limited market for our common stock that may make it more difficult to dispose of your stock.

common stock is currently listed on the Nasdaq Capital Market under the symbol “RLMD”.

There is a limited trading

market for our common stock.

Accordingly, there can be no assurance as to the liquidity of any markets that may develop for our

common stock, the ability of holders of our common stock to sell shares of our common stock, or the prices at which holders may

be able to sell their common stock.

sale of a substantial number of shares of our common stock may cause the price of the common stock to decline.

our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could

These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and

price that we deem reasonable or appropriate.

Stockholders who have held their shares for at least six months are be able to sell

their shares pursuant to Rule 144 under the Securities Act of 1933, as amended (the Securities Act).

We have registered under

separate registration statements in aggregate up to 10,894,658 shares of our common stock for sale into the public market by certain

selling stockholders named therein.

These shares represent a large number of shares of our common stock, and if sold in the market

all at once or at about the same time, could depress the market price of our common stock during the period the registration statement

remains effective and could also affect our ability to raise equity capital.

are subject to the reporting requirements of federal securities laws, which can be expensive and may divert resources from other

projects, thus impairing our ability grow.

are a public reporting company and, accordingly, subject to the information and reporting requirements of the Exchange Act and

other federal securities laws, including compliance with the Sarbanes-Oxley Act of 2002 (the Sarbanes-Oxley Act).

preparing and filing annual and quarterly reports, proxy statements and other information with the SEC and furnishing audited

reports to stockholders would cause our expenses to be higher than they would be if we remained privately held.

may be time consuming, difficult and costly for us to develop and implement the internal controls and reporting procedures required

by the Sarbanes-Oxley Act.

We may need to hire additional financial reporting, internal controls and other finance personnel in

order to develop and implement appropriate internal controls and reporting procedures.

If we are unable to comply with the internal

controls requirements of the Sarbanes-Oxley Act, then we may not be able to obtain the independent accountant certifications required

by such act, which may preclude us from keeping our filings with the SEC current.

we fail to establish and maintain an effective system of internal control, we may not be able to report our financial results

accurately or to prevent fraud.

Any inability to report and file our financial results accurately and timely could harm our reputation

and adversely impact the trading price of our common stock.

internal control is necessary for us to provide reliable financial reports and prevent fraud.

If we cannot provide reliable financial

reports or prevent fraud, we may not be able to manage our business as effectively as we would if an effective control environment

existed, and our business and reputation with investors may be harmed.

As a result, our small size and any current internal control

deficiencies may adversely affect our financial condition, results of operation and access to capital.

We have not performed an

in-depth analysis to determine if historical un-discovered failures of internal controls exist, and may in the future discover

areas of our internal control that need improvement.

In addition, as a smaller reporting company, our independent registered

public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting

so long as we remain a smaller reporting company, which could increase the likelihood of undiscovered errors in our internal controls

or reported financial statements as compared to issuers whose independent registered public accounting firms have provided such

attestations.

stock price may be volatile.

market price of our common stock is likely to be highly volatile and could fluctuate widely in price in response to various factors,

many of which are beyond our control, including the following:

Any adverse development or delay in our preclinical studies or clinical

trials as a result of our reliance on third parties could have a material and adverse effect on our business, financial condition, results

of operations and prospects.

Risks Related to Ownership of Our Common Stock

There is a limited market for our common

stock that may make it more difficult to dispose of your stock.

Our common stock is currently listed on the Nasdaq

Global Select Market under the symbol “RLMD”.

There is a limited trading market for our common stock.

Accordingly, there can

be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common stock to

sell shares of our common stock, or the prices at which holders may be able to sell their common stock.

A sale of a substantial number of shares

of our common stock may cause the price of the common stock to decline.

If our stockholders sell substantial amounts of our common stock in

the public market, the market price of our common stock could fall.

These sales also may make it more difficult for us to sell equity

or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

Stockholders who have held their

shares for at least six months are able to sell their shares pursuant to Rule 144 under the Securities Act of 1933, as amended (the Securities

We have registered under separate registration statements in aggregate up to 21,041,717 shares of our common stock for sale into

the public market by certain selling stockholders named therein.

These shares represent a large number of shares of our common stock,

and if sold in the market all at once or at about the same time, could depress the market price of our common stock during the period

the registration statement remains effective and could also affect our ability to raise equity capital.

We are subject to the reporting requirements

of federal securities laws, which can be expensive and may divert resources from other projects, thus impairing our ability grow.

We are a public reporting company and, accordingly, subject to the

information and reporting requirements of the Exchange Act and other federal securities laws, including compliance with the Sarbanes-Oxley

Act of 2002 (the Sarbanes-Oxley Act).

The costs of preparing and filing annual and quarterly reports, proxy statements and other information

with the SEC and furnishing audited reports to stockholders cause our expenses to be higher than they would be if we remained privately

It may be time consuming, difficult and costly

for us to develop and implement the internal controls and reporting procedures required by the Sarbanes-Oxley Act.

We may need to hire

additional financial reporting, internal controls and other finance personnel in order to develop and implement appropriate internal controls

and reporting procedures.

If we are unable to comply with the internal controls requirements of the Sarbanes-Oxley Act, then we may not

be able to obtain the independent accountant certifications required by such act, which may preclude us from keeping our filings with

the SEC current.

If we fail to establish and maintain an

effective system of internal control, we may not be able to report our financial results accurately or to prevent fraud.

Any inability

to report and file our financial results accurately and timely could harm our reputation and adversely impact the trading price of our

common stock.

Effective internal control is necessary for us

to provide reliable financial reports and prevent fraud.

If we cannot provide reliable financial reports or prevent fraud, we may not

be able to manage our business as effectively as we would if an effective control environment existed, and our business and reputation

with investors may be harmed.

As a result, our small size and any current internal control deficiencies may adversely affect our financial

condition, results of operation and access to capital.

We have not performed an in-depth analysis to determine if historical un-discovered

failures of internal controls exist, and may in the future discover areas of our internal control that need improvement.

as a smaller reporting company, our independent registered public accounting firm is not required to formally attest to the effectiveness

of our internal control over financial reporting so long as we remain a smaller reporting company, which could increase the likelihood

of undiscovered errors in our internal controls or reported financial statements as compared to issuers whose independent registered public

accounting firms have provided such attestations.

Our stock price may be volatile.

The market price of our common stock is likely

to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control, including

the following:

changes in our industry;

competitive pricing

our ability to obtain

working capital financing;

additions or departures

of key personnel;

limited “public

in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing

pressure on the market price for our common stock;

sales of our common

our ability to execute

our business plan;

operating results

that fall below expectations;

competitive pricing pressures;

our ability to obtain working capital financing;

additions or departures of key personnel;

limited “public float” in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock;

sales of our common stock;

our ability to execute our business plan;

operating results that fall below expectations;

regulatory developments;

economic and other

external factors;

period-to-period

fluctuations in our financial results;

inability to develop

or acquire new or needed technology or products.

addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated

to the operating performance of particular companies.

These market fluctuations may also materially and adversely affect the market

price of our common stock.

Nevada Revised Statutes and our articles of incorporation and bylaws contain provisions that could discourage, delay or prevent

a change in control of our Company, prevent attempts to replace or remove current management and reduce the market price of our

in our articles of incorporation and bylaws may discourage, delay or prevent a merger or acquisition involving us that our stockholders

may consider favorable.

For example, our articles of incorporation authorize our board of directors to issue up to 200,000,000

shares of “blank check”

preferred stock.

As a result, without further stockholder approval, the board of directors

has the authority to attach special rights, including voting and dividend rights, to this preferred stock.

With these rights,

preferred stockholders could make it more difficult for a third party to acquire us.

are also subject to the anti-takeover provisions of the Nevada Revised Statutes (NRS).

Depending on the number of residents in

the state of Nevada who own our shares, we could be subject to the provisions of Sections 78.378 et seq.

of the Nevada Revised

Statutes, which, unless otherwise provided in the Company’s articles of incorporation or by-laws, restricts the ability

of an acquiring person to obtain a controlling interest of 20% or more of our voting shares.

Our articles of incorporation and

by-laws do not contain any provision which would currently keep the change of control restrictions of Section 78.378 from applying

addition, our articles of incorporation and amended and restated bylaws provide that our board of directors is classified into

three classes of directors with staggered three-year terms.

Only one class of directors will be elected at each annual meeting

of stockholders, with the other classes continuing for the remainder of their respective three-year terms.

third party may be discouraged from making a tender offer or otherwise attempting to obtain control of us as it is more difficult

and time consuming for stockholders to replace a majority of the directors on a classified board of directors.

bylaws provides that a Nevada court and the federal district courts of the United States will be the exclusive forum for substantially

all disputes between us and our stockholders, which could limit our stockholders’

ability to obtain a favorable judicial

forum for disputes with us or our directors, officers or employees.

to our bylaws, to the fullest extent permitted by law, and unless we consent in writing to the selection of an alternative forum,

the Eighth Judicial District Court of Clark County, Nevada, is the sole and exclusive forum for any stockholder (including a beneficial

owner of stock) to bring (a) any derivative action or proceeding brought in the name or right of the Company or on our behalf,

(b) any action asserting a claim of, or a claim based on, breach of any fiduciary duty owed by any current or former director,

officer, employee, agent or stockholder of the Company to the Company or the Company’s stockholders, (c) any action arising

or asserting a claim arising pursuant to any provision of NRS Chapters 78 or 92A or any provision of the articles of incorporation

or our bylaws or (d) any action asserting a claim against us or any current or former director, officer, employee or stockholder

(including a beneficial owner of stock) governed by the internal affairs doctrine, including, without limitation, any action to

interpret, apply, enforce or determine the validity of our articles of incorporation or bylaws.

By its terms, to the fullest extent

permitted by law, our forum selection provision applies to actions arising under the Securities Act or Exchange Act.

Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability

created by the Exchange Act or the rules and regulations thereunder, and the Company does not intend for its exclusive forum jurisdiction

provision to apply to Exchange Act claims.) These choice of forum provisions may limit a stockholder’s ability to bring

a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees.

were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur

economic and other external factors;

period-to-period fluctuations in our financial results;

inability to develop or acquire new or needed technology or products.

In addition, the securities markets have from time to time experienced

significant price and volume fluctuations that are unrelated to the operating performance of particular companies.

These market fluctuations

may also materially and adversely affect the market price of our common stock.

The Nevada Revised Statutes and our articles

of incorporation and bylaws contain provisions that could discourage, delay or prevent a change in control of our Company, prevent attempts

to replace or remove current management and reduce the market price of our stock.

Provisions in our articles of incorporation and

bylaws may discourage, delay or prevent a merger or acquisition involving us that our stockholders may consider favorable.

our articles of incorporation authorize our board of directors to issue up to 200,000,000 shares of “blank check” preferred

As a result, without further stockholder approval, the board of directors has the authority to attach special rights, including

voting and dividend rights, to this preferred stock.

With these rights, preferred stockholders could make it more difficult for a third

party to acquire us.

We are also subject to the anti-takeover provisions

of the Nevada Revised Statutes (NRS).

Depending on the number of residents in the state of Nevada who own our shares, we could be subject

to the provisions of Sections 78.378 et seq.

of the Nevada Revised Statutes, which, unless otherwise provided in the Company’s articles

of incorporation or by-laws, restricts the ability of an acquiring person to obtain a controlling interest of 20% or more of our voting

Our articles of incorporation and by-laws do not contain any provision which would currently keep the change of control restrictions

of Section 78.378 from applying to us.

In addition, our articles of incorporation and

amended and restated bylaws provide that our board of directors is classified into three classes of directors with staggered three-year

Only one class of directors will be elected at each annual meeting of stockholders, with the other classes continuing for

the remainder of their respective three-year terms.

A third party may be discouraged from making a tender offer or

otherwise attempting to obtain control of us as it is more difficult and time consuming for stockholders to replace a majority of the

directors on a classified board of directors.

Our bylaws provides that a Nevada court

and the federal district courts of the United States will be the exclusive forum for substantially all disputes between us and our stockholders,

which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers

or employees.

Pursuant to our bylaws, to the fullest extent

permitted by law, and unless we consent in writing to the selection of an alternative forum, the Eighth Judicial District Court of Clark

County, Nevada, is the sole and exclusive forum for any stockholder (including a beneficial owner of stock) to bring (a) any derivative

action or proceeding brought in the name or right of the Company or on our behalf, (b) any action asserting a claim of, or a claim based

on, breach of any fiduciary duty owed by any current or former director, officer, employee, agent or stockholder of the Company to the

Company or the Company’s stockholders, (c) any action arising or asserting a claim arising pursuant to any provision of NRS Chapters

78 or 92A or any provision of the articles of incorporation or our bylaws or (d) any action asserting a claim against us or any current

or former director, officer, employee or stockholder (including a beneficial owner of stock) governed by the internal affairs doctrine,

including, without limitation, any action to interpret, apply, enforce or determine the validity of our articles of incorporation or bylaws.

By its terms, to the fullest extent permitted by law, our forum selection provision applies to actions arising under the Securities Act

or Exchange Act.

(However, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any

duty or liability created by the Exchange Act or the rules and regulations thereunder, and the Company does not intend for its exclusive

forum jurisdiction provision to apply to Exchange Act claims.) These choice of forum provisions may limit a stockholder’s ability

to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees.

court were to find the choice of forum provision contained in our bylaws to be inapplicable or unenforceable in an action, we may incur

additional costs associated with resolving such action in other jurisdictions, which could harm our business.

UNRESOLVED STAFF COMMENTS

Not applicable.

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

What changed 10-K

Item 1A. Risk Factors