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Item 1. Business

2026-02-19 compared with 2025-02-27 · 653 added, 434 removed, 430 unchanged (72% of the section changed)

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Spyre Therapeutics, Inc.

SYRE) is a clinical-stage biotechnology company utilizing potential best-in-class antibody engineering, dose optimization, and rational therapeutic combinations to target improved efficacy and convenience in the treatment of IBD and other immune-mediated diseases.

SYRE) is a clinical-stage biotechnology company pioneering long-acting antibodies and antibody combinations to redefine the standard of care for inflammatory bowel disease (“IBD”) and rheumatic diseases.

Spyre’s pipeline includes extended half-life antibodies targeting α4β7, TL1A, and IL-23 in development as monotherapies and pair-wise combinations.

Our goal is to develop next-generation therapeutics for the treatment of IBD and other immune-mediated diseases, relying on three strategic pillars:

Our goal is to develop next-generation therapeutics to redefine the standard of care for the treatment of IBD and other immune-mediated diseases, relying on three strategic pillars:

• Advancing a portfolio of next-generation monotherapies - novel antibody candidates engineered for optimized potency, selectivity, and pharmacokinetics ("PK") against validated IBD targets

• Evaluating paradigm-changing IBD combinations - fixed-dose-combinations of our engineered investigational antibodies designed to enable superior efficacy, safety, and convenience

• Expansion of our anti-TL1A program into additional indications - pipeline-in-a-product potential in diseases with first-in-class and best-in-class opportunity, starting with rheumatoid arthritis ("RA")

Next-generation monotherapies

Our next-generation monotherapy antibody candidates targeting α4ß7, TL1A, and IL-23 are engineered to match or exceed the potency of comparator first generation molecules, maintain selectivity, incorporate Fc domain modifications called YTE substitutions in order to increase pharmacokinetic half-life, and are formulated as high-concentration, citrate-free formulations.

Combined, these attributes have the potential to enable infrequent subcutaneous ("SC") maintenance dosing compared to competitor molecules, and have upside potential to increase or accelerate efficacy via increasing PK exposures, based on published exposure-response or dose-response relationships for each mechanism in IBD.

Our next-generation monotherapy antibody candidates targeting α4β7, TL1A, and IL-23 are engineered to match or exceed the potency of comparator first generation molecules (Figure 1), maintain selectivity, incorporate Fc domain modifications called YTE substitutions in order to increase pharmacokinetic half-life (Figure 2), and are formulated as high-concentration, citrate-free formulations.

Combined, these attributes have the potential to enable quarterly or twice annual subcutaneous ("SC") maintenance dosing, and have upside potential to increase or accelerate efficacy via increasing PK exposures, based on published exposure-response or dose-response relationships for each mechanism in IBD.

Potency of SPY001, SPY002, and SPY003 compared to first-generation in-class molecules

Data on file.

Potency refers to in vitro potency:

SPY001 assay reports inhibition of cells expressing a4b7 binding to MAdCAM-1.

SPY002 assay reports inhibition of TL1A-induced apoptosis in TF-1 cells.

SPY003 assay reports inhibition of cellular STAT3 signaling.

Vedolizumab, tulisokibart, and risankizumab are synthesized comparator antibodies.

Increased pharmacokinetic half-life of SPY001, SPY002, and SPY003 compared to first-generation in-class molecules

SPY001 PK simulation based on PK data as of 03/19/2025 cutoff;

SPY002 PK simulation based on PK data from 5/31/2025 cutoff;

SPY003 PK simulation based on PK data from 9/15/2025 cutoff.

Vedolizumab, Afimkibart, and Risankizumab simulations based on published data (Rosario, M, et.

Danese, Silvio, et al.

Thakre, Neha et.

no head-to-head clinical trials have been conducted.

Concept image of drug delivery device shown for illustrative purposes only.

Paradigm-changing IBD combinations

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The benefits of co-administration of two targeted therapies in IBD were previously demonstrated by a third-party clinical trial where combination treatment with an anti-TNF antibody and an anti-IL-23 antibody resulted in approximately additive efficacy (47% clinical remission for the combination vs.

25% and 24% for each of the monotherapy agents).

25% and 24% for each of the monotherapy agents, Figure 3).

Spyre's portfolio of investigational combination therapies has unique potential to deliver products with superior efficacy, safety, and convenience compared to the other combination products in clinical development in IBD.

Third-party demonstration of combination therapy in IBD

Lancet Gastroenterol.

8, 307–320 (2023).

mMS=modified mayo score

Anti-TL1A indication expansion

TL1A has been implicated in a wide range of human diseases beyond IBD based on genetic, translational, and/or preclinical data, including diseases within but not limited to:

RA, axial spondyloarthritis, psoriatic arthritis, systemic sclerosis-interstitial lung disease, asthma, pulmonary sarcoidosis, psoriasis, hidradentis suppurativa, and atopic dermatitis.

Among these diseases, multiple publications support anti-TL1A as a potential treatment option for RA, with further validation from in-house in vivo experiments:

• TL1A is elevated in RA patients relative to healthy controls and increases with disease duration and severity

• TL1A administration exacerbates arthritis in murine models of RA and administration of anti-TL1A antibodies reduces arthritis

• TL1A blockade using Spyre's anti-TL1A antibodies matched or exceeded the efficacy of anti-TNF treatment in a collagen induced rat model of RA

If successful in development and in obtaining regulatory approval, SPY002's projected quarterly to twice-annual subcutaneous dosing in a single autoinjector has the potential to be the most convenient product available for RA and represents an attractive opportunity to expand the value of our portfolio.

rheumatic diseases such as RA, PsA, and axSpA, as well as systemic sclerosis-interstitial lung disease, asthma, pulmonary sarcoidosis, psoriasis, hidradentis suppurativa, and atopic dermatitis.

Among these diseases, multiple publications support anti-TL1A as a potential treatment option for rheumatic disease, with further validation from in-house in vivo experiments:

• TL1A is elevated in RA, PsA, and axSpA patients relative to healthy controls and increases with disease duration and severity (Figure 4)

• TL1A administration exacerbates arthritis in murine models of arthritis and administration of anti-TL1A antibodies reduces arthritis

• TL1A blockade using Spyre's anti-TL1A antibodies matched or exceeded the efficacy of anti-TNF treatment in a collagen induced rat model of arthritis

• Robust anti-TL1A activity further replicated in mouse models of arthritis and match the efficacy of anti-TNF (Figure 5)

• Additionally, anti-TL1A treatment led to comparable improvements in psoriatic skin lesions in mouse IMQ model as anti-IL-23 and anti-TNF (Figure 6)

If successful in development and in obtaining regulatory approval, SPY072's projected quarterly to twice-annual subcutaneous dosing in a single autoinjector has the potential to be the first-in-class and best-in-class anti-TL1A for these rheumatic diseases and represents an attractive opportunity to meaningfully expand the value of our portfolio.

Upregulation of TL1A in RA, PsA, and axSpA relative to healthy controls

Spyre analysis of RA-MAP, Li, Sifang, et al.

BMC Musculoskeletal Disorders 25.1 (2024), and Johnsson, Hanna, et al.

Arthritis Research & Therapy.

** P≤0.01, *** P ≤0.001, **** P ≤0.0001.

Unpaired tailed t-test used for RA and axSpA analysis, One-way ANOVA used in PsA.

RA=rheumatoid arthritis;

PsA=psoriatic arthritis;

axSpA=axial spondyloarthritis;

HC=healthy controls.

TL1A blockade matched or exceeded the efficacy of anti-TNF in rodent models of arthritis

Data on file.

**** P ≤0.0001

Anti-TL1A treatment improved IMQ-induced psoriatic skin lesions in mice with comparable efficacy to anti-IL-23 and anti-TNF

Data on file.

**** P ≤0.0001

Inflammatory Bowel Disease

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It encompasses two main disorders:

ulcerative colitis ("UC") and Crohn's disease ("CD").

UC primarily affects the colon and the rectum.

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In the United States, it is estimated that approximately 2.4 million individuals currently have IBD, with approximately 70,000 patients newly diagnosed every year.

Based on research from the Crohn's and Colitis Foundation of America, the market for IBD therapeutics is expected to experience steady growth, driven by rising disease prevalence, increasing diagnosis rates, and evolving treatment paradigms.

Based on research from the Crohn's and Colitis Foundation of America, the market for IBD therapeutics is expected to

experience steady growth, driven by rising disease prevalence, increasing diagnosis rates, and evolving treatment paradigms.

A range of pharmaceutical options exists, including anti-inflammatory drugs, immunosuppressants, and biologics.

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• Side effects and safety concerns associated with long-term medication use;

• Limited options for patients with refractory or severe disease, and

• Limited options for patients with refractory or severe disease;

• Poor adherence to frequent and/or inconvenient dosing regimens.

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RA affects more than 1.5 million individuals in the U.S., with stable-to-increasing incidence of ~40 per 100,000 individuals.

A range of pharmaceutical options exist including conventional synthetic disease-modifying antirheumatic drugs ("DMARDs") (methotrexate, leflunomide, sulfasalazine), biological DMARDs (TNF inhibitors, CD80/86 inhibitor, IL-6 inhibitors, CD20 inhibitors), and targeted synthetic DMARDs (JAKs).

Despite available treatments, there remains substantial unmet need in RA management, including:

• Inadequate response or loss of response to existing therapies

• Side effects and safety concerns associated with long-term medication use

• Limited options for patients with refractory or severe disease

• Poor adherence to frequent and/or inconvenient dosing regimens

Despite several advanced treatment options, a significant number of people living with RA continue to suffer from active disease.

Today’s treatments are associated with many challenges, including low rates of remission, loss of response, and a high frequency of injections that may lead to poor compliance.

Psoriatic Arthritis

PsA is a chronic inflammatory autoimmune condition that typically affects both the joints and skin.

It is characterized by pain, stiffness, and swelling of one or more joints and can progress from mild swelling of the joints in early stages to severe deformations of the joints in late/severe stages.

Other characteristics can include psoriasis (PsO;

scaly patches on the skin and/or nail discoloration and pitting), dactylitis (swollen fingers and toes), and spondylitis (painful inflammation in the spine).

PsA is thought to arise from genetic and environmental triggers, though the pathogenesis is multifactorial and not well understood.

PsA affects approximately 0.8 million individuals in the U.S., with estimates suggesting that up to 15% of PsO patients may have undiagnosed PsA.

Despite several advanced treatment options, a significant number of people living with PsA continue to suffer from active disease.

Today’s treatments are associated with many challenges, including inability to adequately address both joint and skin symptoms, loss of response, and a high frequency of injections that may lead to poor compliance.

Axial Spondyloarthritis

AxSpA is a chronic inflammatory autoimmune condition that primarily affects the axial skeleton (spine), with radiographic and non-radiographic subtypes.

It is characterized by persistent back pain, stiffness, fatigue, joint stiffness, and frequent occurrence of extra-articular manifestations, such as anterior uveitis, IBD, and psoriasis.

AxSpA is thought to arise when biomechanical stress, genetics, environmental triggers, and other factors lead to overactivation of the immune system in the spine.

AxSpA affects an estimated 3 million individuals in the U.S., though only approximately 1 million of those are diagnosed.

Despite some advanced treatment options, a significant number of people living with axSpA continue to suffer from active disease.

Today’s treatments are associated with many challenges, including incomplete / loss of response, lack of MOAs to cycle through, and a high frequency of injections that may lead to poor compliance.

Our Portfolio

We are advancing a pipeline of monoclonal antibodies (“mAbs”) for the treatment of IBD and other immune-mediated diseases.

The following table summarizes our programs and strategy:

Through the Asset Acquisition, we received the option to license the intellectual property rights related to four research programs (collectively, the "Option") pursuant to the Paragon Agreement, and subsequently executed license agreements for our α4β7, TL1A, and IL-23 programs.

As of the date of this Annual Report on Form 10-K, we have exercised our Option with respect to and nominated development candidates for our SPY001, SPY002, and SPY003 programs.

We executed license agreements with Paragon for SPY001 (the "SPY001 License Agreement") and SPY002 (the "SPY002 License Agreement") in the second quarter of 2024 and we executed a license agreement with Paragon for SPY003 (the "SPY003 License Agreement" and, together with the SPY001 License Agreement and the SPY002 License Agreement, the "License Agreements") in the fourth quarter of 2024.

The SPY001 and SPY002 licenses are indication agnostic, and the SPY003 license is restricted to IBD.

We additionally have an exclusive option under the Paragon Agreement for a discovery stage program targeting a novel mechanism of action (“MOA”) that also incorporates half-life extension (SPY004).

See the section titled “Paragon Agreement” in this Annual Report on Form 10-K for more discussion about the Paragon Agreement and the License Agreements.

The following table (Figure 7) summarizes our pipeline and development strategy, including our SKYLINE Phase 2 platform trial evaluating SPY001, SPY002, SPY003, and pairwise combinations thereof in patients with moderately to severely active UC and our SKYWAY basket trial evaluating SPY072 in three rheumatic diseases:

RA, PsA, and axSpA:

Spyre portfolio

SKYLINE Phase 2 Platform Trial in UC

In May 2025, we initiated our SKYLINE Phase 2 platform trial evaluating SPY001, SPY002, SPY003, as well as pairwise combinations thereof (six investigational agents in total), in patients with moderately to severely active UC (Figure 8).

The trial consists of two parts:

Open-label assessment of the safety and preliminary efficacy of a single dose level of each investigational monotherapy, with induction data expected to begin reading out in Q2 2026.

Randomized and placebo-controlled assessment of the safety and efficacy of monotherapies and combinations, designed to provide dose-ranging data on monotherapies, proof-of-concept and contribution of components for combinations, with induction data expected in 2027.

SKYLINE is currently enrolling subjects into Part A of the trial, with Part B expected to begin enrolling after all Part A arms complete enrollment.

SKYLINE trial design

mMS=modified mayo score;

RHI=Robarts Histopathology Index;

HEMI=Histo-Endoscopic Mucosal Improvement;

P=primary endpoint;

S=secondary endpoint.

Initiation of each cohort subject to regulatory clearance.

SKYWAY Phase 2 Basket Trial in Rheumatic Diseases (RA, PsA, axSpA)

In September 2025, we initiated our SKYWAY Phase 2 randomized and placebo-controlled basket trial of SPY072 in patients with moderately to severely active RA, PsA, or axSpA (Figure 9).

The trial consists of three sub-studies:

• RA sub-study:

Double-blind, placebo-controlled safety and efficacy study of two dose levels of SPY072 at Week 12 with open-label follow-up through Week 36.

• PsA sub-study:

Double-blind, placebo-controlled safety and efficacy study of a single dose level of SPY072 at Week 16 with open-label follow-up through Week 40.

• axSpA sub-study:

Double-blind, placebo-controlled safety and efficacy study of a single dose level of SPY072 at Week 16 with open-label follow-up through Week 40.

Topline proof-of-concept data for all three indications are expected in Q4 2026.

SKYWAY trial design

RF=rheumatoid factor;

ACPA= Anti-citrullinated protein antibodies;

cs/b/tsDMARD=conventional synthetic, biologic, or targeted synthetic disease modifying antirheumatic drugs;

BASDAI=Bath Ankylosing Spondylitis Disease Activity Index;

P=primary endpoint;

S=secondary endpoint;

E=exploratory endpoint.

IR=inadequate response

SPY001 – anti-α4β7 mAb

Our most advanced product candidate, SPY001, is a highly potent, highly selective, and humanized monoclonal immunoglobulin G1 antibody designed to bind selectively to the α4β7 integrin being developed for the treatment of IBD (UC and CD).

SPY001 is a highly potent, highly selective, and humanized monoclonal immunoglobulin G1 investigational antibody designed to bind selectively to the α4β7 integrin being developed for the treatment of IBD (UC and CD).

The α4β7 integrin is a protein found on the surface of immune cells.

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By selectively binding to the α4β7 integrin, SPY001 is designed to prevent the interaction of these immune cells with MAdCAM-1, a molecule expressed on endothelial cells lining the blood vessels in the gut.

This interaction is responsible for guiding lymphocytes from the bloodstream into the gut tissue, where they cause inflammation.

By blocking the interaction between α4β7 integrin and MAdCAM-1, SPY001 aims to reduce the recruitment of immune cells to the gut, leading to a decrease in inflammation.

Since it specifically targets the gut immune system, SPY001 is designed to minimize systemic immunosuppressive effects unrelated to IBD pathology.

SPY001 preclinical characterization studies were conducted in-house with support from third party vendors.

SPY001 demonstrates similar potency and selectivity as synthesized vedolizumab in preclinical in vitro models including surface plasmon residence (n=5 concentrations) and cellular adhesion assays (see Figure 1, n=6 replicates per group).

The 28-day GLP toxicity study in non-human primates (“NHPs") (n=42) for SPY001 was completed with the highest dose level tested determined as the no-observed-adverse-effect-level.

The Company initiated a FIH Phase 1 trial for SPY001 in June 2024.

The SPY001 Phase 1 trial is a double blind, placebo-controlled trial in healthy volunteers and consists of a single-ascending dose (SAD) component and a multi-ascending dose (MAD) component.

The trial design includes enrolling 56 healthy adult

participants into five SAD cohorts and two MAD cohorts in the main portion of the study.

The primary endpoint is safety, with pharmacokinetics (PK) and anti-drug antibodies (ADA) serving as secondary endpoints.

Additional cohorts have been added to the study to evaluate pharmacokinetics in healthy volunteers of various ethnicities to facilitate subsequent global clinical trials.

Trial enrollment is now complete.

Interim results were presented in November 2024 with up to four months of follow up.

Findings from the interim SAD and MAD portions of the Phase 1 trial were as follows:

• Safety (See Figure 2) - SPY001 was well tolerated across all dose groups (single doses of up to 1,000mg and multiple doses of up to 600 mg) with a favorable safety profile.

The most common treatment-emergent adverse events ("TEAEs") were headache and nasopharyngitis.

• PK - SPY001 demonstrated a meaningfully differentiated PK profile relative to vedolizumab.

The half-life is estimated at greater than 90 days by population PK modeling, which is approximately four times that of vedolizumab's 25-day human half-life in a cross-trial comparison (See Figure 3), supporting the potential for Q3M-Q6M SC maintenance dosing.

• Pharmacodynamics ("PD") - complete occupancy of α4β7 receptors was observed with a single dose of 300 mg up to Day 85 (See Figure 4), which was the longest follow up available at data cutoff.

Longer-term data from this Phase 1 trial will be presented at a medical meeting later this year.

Based on these interim results, we plan to advance SPY001 to a Phase 2 clinical trial in UC patients in mid-2025.

Potency and selectivity of SPY001 relative to synthesized vedolizumab in cellular assays (Data on file).

Interim SPY001 Phase 1 safety data

Interim SPY001 simulated concentration-time profile compared to vedolizumab

Interim SPY001 pharmacodynamic data

SPY002 – anti-TL1A mAb

For our SPY002 program, we nominated two highly potent, highly selective, and fully human mAb candidates designed to bind to tumor necrosis factor-like ligand 1A (“TL1A”), both of which are being developed for the treatment of IBD (UC and CD) and RA.

TL1A is a protein that plays a role in regulating the immune system and is elevated in the gut tissue of individuals with IBD and synovial tissue of individuals with RA.

TL1A interacts with its receptor, death receptor 3 (“DR3”), which is expressed in various immune cells, including T cells.

This interaction triggers signaling pathways that contribute to inflammation and immune system activation, leading to IBD or RA symptomology.

The SPY002 candidates have been designed to block the interaction between TL1A and DR3, and thereby inhibit the downstream signaling events and dampen the inflammatory response.

By neutralizing TL1A, we believe the SPY002 candidates have the potential to modulate the immune response in IBD and RA patients, potentially reducing disease activity.

SPY002 preclinical characterization studies were conducted in-house with support from third party vendors.

Our extensive discovery campaign has identified two lead candidates which bind TL1A monomers and trimers and have subnanomolar potency in cellular assays (see Figure 5, n=4 replicates per group per study).

The candidates also exhibited extended pharmacokinetic half-lives of greater than two to three-fold relative to synthesized competitor molecules in clinical development that do not incorporate half-life extending modifications, based on head-to-head preclinical studies in NHPs (see Figure 6, n=5 per group).

The 42-day GLP toxicity studies in NHPs (n=42) for both SPY002 candidates were completed with the highest dose level tested determined as the no-observed-adverse-effect-level.

The Company initiated two FIH trials in healthy volunteers in the fourth quarter of 2024, one for each of our SPY002 candidates, with interim safety and PK data from these trials expected in the second quarter of 2025.

If successful, one or more SPY002 candidates will then advance to Phase 2 clinical trials (UC and RA).

Inhibition of TL1A induced TF-1 cell apoptosis (left) and IFNγ secretion in primary human whole blood 1 donor of 4 donors profiled (right) (Data on file.

Duvakitug was not benchmarked in IFNγ secretion assay;

Duvakitug, RO7790121, and tulisokibart are synthesized comparator antibodies).

Pharmacokinetic concentration-time curves of SPY002 candidates compared to synthesized competing anti-TL1A molecules in non-human primates (Data on file.

Group size was n=5 for SPY002 mAbs and tulisokibart at final endpoints for half-life determination;

No RO7790121 detected after day 28.

Duvakitug not compared in these models given low human half-life (7-10 days).).

SPY001 demonstrates similar potency and selectivity as synthesized vedolizumab in preclinical in vitro models including surface plasmon residence and cellular adhesion assays.

We initiated a first-in-human ("FIH") Phase 1 trial for SPY001 in June 2024.

The SPY001 Phase 1 trial was a double blind, placebo-controlled trial in healthy volunteers consisting of a single-ascending dose ("SAD") component and a multi-ascending dose ("MAD") component.

The trial enrolled 56 healthy adult participants into five SAD cohorts and two MAD cohorts

in the main portion of the trial.

The primary endpoint was safety, with PK and anti-drug antibodies ("ADA") serving as secondary endpoints.

Additional cohorts were added to the trial to evaluate PK in healthy volunteers of various ethnicities to facilitate subsequent global clinical trials.

Interim results were initially presented in November 2024, with additional data presented in May 2025 with up to eight months of follow up.

To date, SPY001 has demonstrated a favorable safety profile across all dose groups, a meaningfully differentiated PK profile supporting potential quarterly or twice annual maintenance dosing, and rapid, complete saturation of α4β7 receptors beyond six months with a single dose of 600mg.

Based on these results, SPY001 was advanced into the SKYLINE Phase 2 platform clinical trial.

SPY002 and SPY072 – anti-TL1A mAbs

For our anti-TL1A program, we nominated two highly potent, highly selective, and fully human mAb candidates designed to bind to tumor necrosis factor-like ligand 1A (“TL1A”).

SPY002 (formerly SPY002-091) is being developed for the treatment of IBD (UC and CD) and SPY072 (formerly SPY002-072) is being developed for the treatment of RD.

TL1A is a protein that plays a role in regulating the immune system and is elevated in gut tissue of individuals with IBD and serum or synovial tissue of individuals with RA, PsA, and axSpA.

TL1A interacts with its receptor, death receptor 3 (“DR3”), which is expressed in various immune cells, including T cells and fibroblast-like synoviocytes.

This interaction triggers signaling pathways that contribute to inflammation and joint injury in RD, leading to symptomology, such as pain and swelling.

SPY002 and SPY072 have been designed to block the interaction between TL1A and DR3, and thereby inhibit the downstream signaling events to dampen the inflammatory response.

By neutralizing TL1A, we believe that SPY002 and SPY072 have the potential to modulate the immune response in IBD and rheumatic disease patients, potentially reducing disease activity.

SPY002 and SPY072 bind and inhibit TL1A with subnanomolar potency in preclinical cellular assays.

We initiated FIH Phase 1 trials for SPY002 and SPY072 in the fourth quarter of 2024.

The Phase 1 trials were each double blind, placebo-controlled evaluations in healthy volunteers, consisting of five SAD cohorts.

Each trial enrolled 40 healthy adult participants across the five SAD cohorts in the main portion of the trial.

The primary endpoint is safety, with PK and ADAs serving as secondary endpoints, and PD markers as exploratory endpoints.

Phase 1 trial enrollment is complete.

Phase 1 data were presented in June 2025 and October 2025, with up to 24-weeks of follow up.

To date, SPY002 and SPY072 have demonstrated favorable safety profiles, meaningfully differentiated PK profiles supporting potential quarterly or twice annual maintenance dosing, and complete suppression of free TL1A through up to 20-24 weeks at single 100mg doses.

Based on these results, SPY002 has advanced to the SKYLINE Phase 2 platform trial and SPY072 has advanced to the SKYWAY Phase 2 basket trial.

SPY003 – anti-IL-23 mAb

SPY003 is a preclinical-stage program designed to bind to Interleukin 23 (“IL-23”) and incorporates half-life extending modifications.

SPY003 is a clinical-stage program designed to bind to interleukin 23 (“IL-23”) and incorporates half-life extending modifications.

IL-23 is a cytokine that is produced by immune cells and is involved in immune response regulation.

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IL-23 also helps in the recruitment and activation of other immune cells, such as neutrophils, which further contribute to tissue damage in the gut.

SPY003 preclinical characterization studies were conducted in-house with support from third party vendors.

Our extensive discovery campaign has identified a lead candidate which binds to the p19 subunit of IL-23 with subnanomolar potency in cellular assays (see Figure 7, n=2 and n=3 for pSTAT assay and IL-17 assay, respectively).

The development candidate also exhibited extended pharmacokinetic half-life of greater than three-fold relative to a synthesized risankizumab comparator that does not incorporate half-life extending modifications, based on head-to-head preclinical studies in NHPs (see Figure 8, n=4 per group with n=4 and n=3 at the final timepoint for half-life determination for SPY003 and risankizumab, respectively).

The Company expects to initiate a FIH trial in healthy volunteers in the first quarter of 2025, with interim safety and PK data from this trial expected in the second half of 2025.

If successful, SPY003 will then advance to Phase 2 clinical trials.

Inhibition of IL-23 induced STAT3 phosphorylation in a human lymphoma cell line (DB) (left) and IL-23 induced IL-17 secretion in human peripheral blood mononuclear cells (right) by SPY003 and synthesized risankizumab (Data on file).

Pharmacokinetic concentration-time curves of SPY003 candidate compared to synthesized risankizumab comparator in non-human primates (Data on file.

Group size was n=4 in the NHP studies with n=4 and n=3 at the final timepoint for half-life determination for SPY003 and risankizumab, respectively).

SPY004 – novel MOA mAb

SPY004 has an undisclosed novel MOA and incorporates half-life extension modifications.

Upon development candidate nomination, we intend to exercise our Option to acquire intellectual property rights for the SPY004 program pursuant to the Paragon Agreement.

SPY003 binds to the p19 subunit of IL-23 with subnanomolar potency in cellular assays.

SPY003 also exhibited extended PK half-life of greater than three-fold relative to a synthesized risankizumab comparator that does not incorporate half-life extending modifications, based on head-to-head preclinical studies in non-human primates ("NHPs").

We initiated a FIH trial in March 2025.

The SPY003 Phase 1 trial is a double blind, placebo-controlled trial in healthy volunteers trial that enrolled 59 healthy adult participants into five SAD cohorts, one multiple dose (MD) cohort, and one Chinese ethnobridging cohort.

The primary endpoint is safety, with PK and ADAs serving as secondary endpoints.

Phase 1 trial enrollment is now complete.

Interim Phase 1 data were disclosed in November 2025, and additional data were presented in February 2026 with up to 20 weeks of follow-up, demonstrating that SPY003 exhibited a favorable safety profile

and a meaningfully differentiated PK profile supporting quarterly or twice annual maintenance dosing.

Based on these results, SPY003 was advanced to the SKYLINE Phase 2 platform trial.

SPY120 - combination, anti-α4β7 and anti-TL1A mAbs

SPY120 combines SPY001 (anti-α4β7) and SPY002 (anti-TL1A) antibodies, pairing two mechanisms studied in third-party clinical trials targeting non-overlapping sites of action.

We are currently evaluating SPY120 in nonclinical studies, and have initiated combination toxicology studies.

Subject to regulatory feedback, we intend to initiate clinical trials in 2025 that will include SPY120.

In February 2025, the Company presented new preclinical data demonstrating that combination therapy resulted in additive or greater than additive in vivo biological activity relative to either monotherapy in murine hapten reagent 2,4,6-trinitrobenzene sulfonic acid (TNBS) and anti-CD40 colitis models (Figure 9).

In addition, coadministration of SPY001 and SPY002 in NHPs demonstrated no drug effects on PK (Figure 10).

Combined inhibition of anti-TL1A and anti-ß7 (anti-α4β7 murine surrogate) is superior to either monotherapy in mouse models of colitis

Coadministration of SPY001 and SPY002 demonstrates no drug-drug effects on exposure in NHPs

SPY120 combines SPY001 (anti-α4β7) and SPY002 (anti-TL1A) antibodies, pairing two complementary mechanisms studied in third-party clinical trials targeting non-overlapping sites of action.

In February and May 2025, we presented preclinical data demonstrating that combinations resulted in additive or greater than additive in vivo biological activity relative to either monotherapy in mouse hapten reagent 2,4,6-trinitrobenzene sulfonic acid ("TNBS") and anti-CD40 colitis models.

In October 2025, we presented preclinical data further demonstrating that combined inhibition resulted in superior efficacy relative to constituent monotherapies in a mouse TNBS-induced colitis model.

In addition, combination toxicology studies have been completed with no drug-related adverse findings observed.

These preclinical data, in addition to our positive interim Phase 1 results for SPY001 and SPY002, support the advancement of SPY120 into Part B of the SKYLINE Phase 2 platform trial.

SPY130 - combination anti-α4β7 and anti-IL-23 mAbs

SPY130 combines SPY001 (anti-α4β7) and SPY003 (anti-IL-23) antibodies, pairing two commercially validated mechanisms targeting non-overlapping sites of action.

We are currently evaluating SPY130 in

nonclinical studies and initiated combination toxicology studies in 2024.

Subject to regulatory feedback, we intend to initiate clinical trials in 2025 that will include SPY130.

In October 2024, the Company presented new preclinical data, demonstrating in a T-cell transfer model of IBD, that combination therapy with anti-IL-23 and anti-α4ß7 improved body weight and reduced colonic CD4+ infiltration and IL-17 levels relative to monotherapy (Figure 11).

Combination of anti-ß7 (anti-α4β7 murine surrogate) and anti-IL-23 increases efficacy and PD in T-cell transfer colitis model.

In October 2024, we presented preclinical data, demonstrating in a T-cell transfer model of IBD, that combinations with anti-IL-23 and anti-α4ß7 improved body weight and reduced colonic CD4+ infiltration and IL-17 levels relative to monotherapy.

In March and October 2025, we presented additional preclinical data, demonstrating that combinations resulted in superior in vivo biological activity relative to either monotherapy in mouse TNBS model.

In addition, combination toxicology studies have been completed with no drug-related adverse findings observed.

These preclinical data, in addition to our positive interim Phase 1 results for SPY001 and SPY003, support SPY130 being advanced in Part B of the SKYLINE Phase 2 platform trial.

SPY230 – combination anti-TL1A and anti-IL-23 mAbs

SPY230 combines SPY002 (anti-TL1A) and SPY003 (anti-IL-23) antibodies, pairing two complementary mechanisms of action with potential to address overlapping and non-overlapping triggers of inflammation.

We are currently evaluating SPY230 in nonclinical studies and initiated combination toxicology studies in 2024.

Subject to regulatory feedback, we intend to initiate clinical trials in 2025 that will include SPY230.

In October 2024, the Company presented new preclinical data, demonstrating that anti-IL-23 and anti-TL1A have a synergistic effect on promoting IL-17 secretion from human and mouse cells, and that the combination of anti-IL-23 and anti-TL1A suppressed IL-17 secretion more effectively than either agent alone (Figure 12).

Combination of anti-TL1A and anti-IL-23 offers superior inhibition of IL-17 release in vitro

In October 2024, we presented preclinical data, demonstrating that anti-IL-23 and anti-TL1A have a synergistic effect on promoting IL-17 secretion from human and mouse cells, and that the combination of anti-IL-23 and anti-TL1A suppressed IL-17 secretion more effectively than either agent alone.

In addition, combination toxicology studies have been completed with no drug-related adverse findings observed.

These preclinical data, in addition to our positive interim Phase 1 results for SPY002 and SPY003, support SPY230 being advanced in Part B of the SKYLINE Phase 2 platform trial.

Employees and Human Capital Resources

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Should any of our product candidates be approved for commercialization, we intend to develop a plan to commercialize them in the United States and other key markets, through internal infrastructure and/or external partnerships in a manner that will enable us to realize the full commercial value of our product candidates.

Given our stage of development, we have not yet established a commercial organization or distribution capabilities.

In January 2026 we hired our first Chief Commercial Officer, but given our stage of development, we have not yet established a robust commercial organization or distribution capabilities.

Manufacturing and Supply

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Pursuant to a Novation Agreement dated September 19, 2023 (the “Novation Agreement”), by and between us, Paragon and WuXi Biologics (Hong Kong) Limited (“WuXi Biologics”), we novated (i) a Biologics Master Services Agreement (the “WuXi Biologics MSA”) and (ii) a Cell Line License Agreement (the “Cell Line License Agreement”).

In light of the BIOSECURE Act potentially being passed, which would prohibit federal agencies from entering into procurement contracts with an entity that uses biotechnology equipment or services from a biotechnology company of concern, we have taken several measures to strengthen our supply chain in the event that WuXi Biologics or one of our other manufacturers is impacted.

We intend to establish domestic inventory of key materials and are accelerating our clinical resupply campaigns to ensure we have a sufficient stockpile of drug substance.

On December 18, 2025, President Trump signed the Fiscal Year 2026 National Defense Authorization Act, which includes the BIOSECURE Act.

The BIOSECURE Act prohibits federal departments and agencies from contracting with or providing loans or grants to any entity where the biotechnology equipment or services of a designated "biotechnology company of concern" ("BCOC") would be used in the performance of that contract, grant, or loan.

Generally, a BCOC is a biotechnology company that is subject to the jurisdiction, direction, control, or operates on behalf of a foreign adversary's government and poses a risk to the national security of the U.S.

BCOCs include entities listed on the Department of Defense Section 1260H list of "Chinese military companies" and additional entities to be designated through an interagency process led by the Office of Management and Budget ("OMB").

OMB has not yet identified any BCOCs.

We are in the process of creating manufacturing capabilities with third parties outside of China, including within the United States, and have taken several measures to strengthen our supply chain in the event that our manufacturers are impacted.

Among other things, we intend to establish domestic inventory of key materials and are accelerating our clinical resupply campaigns to ensure we have a sufficient stockpile of drug substance.

We will also continue to closely monitor geopolitical risk and implement additional mitigations and supply chain redundancies, as needed.

See the risk factor entitled “ We currently rely, and plan to rely in the future, on third parties to conduct and support our preclinical studies and clinical trials.

See the risk factors entitled “We may be negatively impacted by changes in law or other policy, including healthcare reform initiatives,” and “We currently rely, and plan to rely in the future, on third parties to conduct and support our preclinical studies and clinical trials.

If these third parties do not properly and successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval of or commercialize our product candidates .

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The Cell Line License Agreement will continue indefinitely unless terminated (i) by us upon six months’ prior written notice and our payment of all undisputed amounts due to WuXi Biologics through the effective date of termination, (ii) by WuXi Biologics for a material breach by us that remains uncured for 60 days after written notice, (iii) by WuXi Biologics if we fail to make a payment and such failure continues for 30 days after receiving notice of such failure, or (iv) by either party upon the other party’s bankruptcy.

Intellectual Property

We strive to protect the proprietary programs and technologies that we believe are important to our business, including seeking and maintaining patent protection intended to cover the composition of matter of our programs, their methods of use, related technologies, diagnostics, and other inventions.

Patent Rights Relating to Our Anti-α4β7 Program

As of January 31, 2026, we exclusively license or owned four patent families directed to antibodies that target integrin receptor α4β7, including SPY001, pharmaceutical formulations and compositions, and methods of using those antibodies.

The first patent family is directed to compositions of matter including SPY001, method of treatment and dosing regimen and includes 2 U.S granted patents and patent applications filed in the U.S.

and in foreign jurisdictions including Europe, Japan, and China.

We would expect these patents upon issuance to expire in 2044, absent any applicable patent term extensions.

The second patent family is directed to methods of using SPY001 and includes an international (PCT) patent application.

If the PCT patent application is pursued in the U.S.

or any foreign jurisdictions and matures into one or more issued patents, we would expect those patents to expire in 2045, absent any applicable patent term extensions.

The third patent family is directed to pharmaceutical formulations containing SPY001 and includes a PCT patent application.

If the PCT patent application is pursued in the U.S.

or any foreign jurisdictions and matures into one or more issued patents, we would expect those patents to expire in 2045, absent any applicable patent term extensions.

The fourth patent family is directed to other α4β7 antibody compositions and includes a U.S.

patent application and a PCT patent application.

If the PCT patent application is pursued in any foreign jurisdictions and matures into one or more issued patents, and if the US patent application matures into a U.S.

patent, we would expect those patents upon issuance to expire in 2044, absent any applicable patent term extensions.

Patent Rights Relating to Our Anti-Tl1A Program

As of January 31, 2026, we exclusively license or own ten patent families directed to antibodies that target TL1A, including SPY002 and SPY072, and methods of using those antibodies.

The first patent family is directed to SPY002 and SPY072 compositions of matter and includes 2 U.S.

granted patents, and a PCT patent application.

If the PCT application is pursued in any foreign jurisdictions and matures into one or more issued patents, we would expect those patents upon issuance to expire in 2044, absent any applicable patent term extensions.

The second patent family is directed to composition comprising other anti-TL1A antibody compositions and includes applications filed in the U.S., Europe, Japan, and China.

If Spyre pursues the U.S.

or any foreign jurisdictions and it matures into one or more issued patents, we would expect those patents upon issuance to expire in 2044, absent any applicable patent term extensions.

The next six patent families are directed to methods of using SPY002 and SPY072 and includes six PCT patent applications.

If these PCT patent applications are pursued in the U.S.

and any foreign jurisdictions and mature into one or more issued patents, we would expect those patents upon issuance to expire in 2046, absent any applicable patent term extensions.

The remaining two patent families are directed to SPY002 and SPY072 compositions and as of January 31, 2026, each family includes two provisional patent applications.

If these provisional applications are pursued non-provisionally and mature into one or more issued patents, we would expect those patents upon issuance to expire in 2046, absent any applicable patent term extensions.

Patent Rights Relating to Our Anti-IL-23 Program

As of January 31, 2026, we exclusively license or own two patent families directed to antibodies that target IL-23, including SPY003, and methods of using those antibodies and formulations thereof.

The first patent family is directed to compositions of matter including SPY003 and includes a U.S.

patent application and a PCT patent application.

If the PCT patent application is pursued in any foreign jurisdictions and matures into an issued patent or the Argentina or Taiwan applications are pursued and mature into one or more issued patents, we would expect those patents upon issuance to expire in 2045, absent any applicable patent term extensions.

The second patent family is directed to pharmaceutical formulations and compositions including SPY003 and as of January 31, 2026, includes one provisional application.

If the provisional application is pursued non-provisionally and matures into one or more issued patents, we would expect those patents upon issuance to expire in 2046, absent any applicable patent term extensions.

Patent Rights Relating to Our Combination Programs

As of January 31, 2026, we own four patent families directed to combinations of SPY001, SPY002, and SPY003.

The first patent family is directed to methods of treatment with a combination of SPY001 and SPY002 (SPY120) and includes a PCT patent application.

If the PCT application is pursued in the U.S.

or any foreign jurisdictions and matures into one or more issued patents, we would expect those patents upon issuance to expire in 2045, absent any applicable patent term extensions.

The second patent family is directed to methods of treatment with a combination of SPY001 and SPY003 (SPY130) and includes, as of January 31, 2026, one

provisional application.

If this provisional application is pursued non-provisionally and matures into one or more issued patents, we would expect those patents upon issuance to expire in 2046, absent any applicable patent term extensions.

The remaining two patent families are directed to methods of treatment with a combination of SPY002 and SPY072 and SPY003 (SPY230) and as of January 31, 2026, each family includes two provisional patent applications.

Other IP Rights

In addition to patents, we rely upon unpatented trade secrets, know-how and continuing technological innovation to develop and maintain our competitive position.

However, trade secrets and know-how can be difficult to protect.

We seek to protect our proprietary information, in part by executing confidentiality agreements with our collaborators and scientific advisors, and non-competition, non-solicitation, confidentiality and invention assignment agreements with our employees and consultants.

We have also executed agreements requiring assignment of inventions with selected scientific advisors and collaborators.

The confidentiality agreements we enter into are designed to protect our proprietary information and the agreements or clauses requiring assignment of inventions to us are designed to grant us ownership of technologies that are developed through our relationship with the respective counterparty.

We cannot guarantee, however, that we have executed such agreements with all applicable counterparties, that such agreements will not be breached, or that these agreements will afford us adequate protection of our intellectual property and proprietary rights.

For more information, see the section entitled “Risk Factors - Risks Related to Our Intellectual Property”.

Trademark Rights Relating to the Spyre Therapeutics Name and Logo

As of January 31, 2026, we own trademark registrations for the Spyre name and name plus logo for research and development services of new pharmaceutical products in Australia, China, Europe, and the UK.

Paragon Agreement

In May 2023, Pre-Merger Spyre entered into the Paragon Agreement with Paragon and Parapyre.

Pursuant to the Paragon Agreement, the Option provided for the right to acquire the intellectual property rights related to four research programs from Paragon in accordance with a license agreement to be entered into following each exercise of the Option.

Pursuant to the Paragon Agreement, we received the option to license the intellectual property rights related to four research programs (collectively, the "Option") from Paragon in accordance with a license agreement to be entered into following each exercise of the Option.

On July 12, 2023, December 14, 2023 and June 5, 2024, we exercised our Option available under the Paragon Agreement with respect to the SPY001, SPY002 and SPY003 research programs, respectively.

In May 2024, we signed license agreements with Paragon for rights to royalty-bearing, world-wide, exclusive licenses to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting ɑ4β7 integrin (SPY001 program) and TL1A (SPY002 program) and, in October 2024, we signed a license agreement for rights to a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting IL-23 (SPY003 program) in the field of IBD.

The SPY003 License Agreement was subsequently amended and restated in February 2025 to, among other things, clarify each party's rights and obligations with respect to license exclusivity and patent prosecution and correct

certain clerical errors.

Our Option available under the Paragon Agreement with respect to the SPY004 program remains unexercised.

In May 2024, we signed license agreements with Paragon for rights to royalty-bearing, world-wide, exclusive licenses to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting ɑ4β7 integrin (SPY001 program) (the "SPY001 License Agreement") and TL1A (SPY002 program) (the "SPY002 License Agreement") and, in October 2024, we signed a license agreement for rights to a royalty-bearing, world-wide, exclusive license to develop, manufacture, commercialize or otherwise exploit certain antibodies and products targeting IL-23 (SPY003 program) (the "SPY003 License Agreement" and, together with the SPY001 License Agreement and the SPY002 License Agreement, the "License Agreements") in the field of IBD.

The Option with respect to one additional program remains unexercised under the Paragon Agreement.

Under the terms of each License Agreement, we are obligated to pay Paragon up to $22.0 million upon the achievement of specific development, regulatory and clinical milestones for the first product under each agreement, respectively, that achieves such specified milestones, including a milestone payment of $5 million upon the first dosing of a human patient in a Phase 3 trial.

With respect to the SPY002 License Agreement only, on a product by product basis, we are obligated to pay sublicensing fees of up to approximately $20 million upon the achievement of mostly commercial milestones.

Subject to the execution of the Option with respect to the SPY004 research program, we expect to be obligated to make similar payments upon and following the execution of a license agreement with respect to such research program.

Subject to the execution of the Option with respect to the remaining research program, we expect to be obligated to make similar payments upon and following the execution of a license agreement with respect to such research program.

We expect to face intense competition from other biopharmaceutical companies that are developing agents for the treatment of inflammatory diseases.

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Our products would also compete with biosimilars or generics, either currently approved or in development, to many of these products.

We are aware of several companies with product candidates in development for the treatment of patients with IBD, including Merck’s tulisokibart, Roche/Roivant’s RO7790121, and Sanofi/Teva’s duvakitug TL1A antibodies;

We are aware of several companies with product candidates in development for the treatment of patients with IBD, including Merck’s tulisokibart, Roche/Roivant’s afimkibart, and Sanofi/Teva’s duvakitug TL1A antibodies;

additional IL-23/IL-23Rs including icotrokinra (Johnson & Johnson) and picankibart (Innovent);

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PDE4 inhibitor PALI-2108 (Palisade Bio);

multispecifics including PF-07261271 targeting TL1A and IL-12/23 (Pfizer and Roche) and SOR102 targeting TNF and IL-23 (Sorriso).

If approved for the treatment of patients with moderate-to-severe rheumatoid arthritis, SPY002 would compete with TNF antibodies including Humira (AbbVie), Cimzia (UCB), Enbrel (Amgen), Remicade (Johnson & Johnson), and Simponi (Johnson & Johnson);

multispecifics including PF-07261271 targeting TL1A and IL-12/23 (Pfizer and Roche), SOR102 targeting TNF and IL-23 (Sorriso), HXN-1002 targeting α4β7 and TL1A (Sanofi/Earendil), HXN-1003 targeting TL1A and IL-23 (Sanofi/Earendil), SIM0709 targeting TL1A and IL-23 (Simcere and Boehringer Ingelheim) and XmAb412 targeting TL1A and IL-23 (Xencor).

If approved for the treatment of patients with moderate-to-severe RA, SPY072 would compete with TNF antibodies including Humira (AbbVie), Cimzia (UCB), Enbrel (Amgen), Remicade (Johnson & Johnson), and Simponi (Johnson & Johnson);

T-cell activation inhibitor Orencia (Bristol Myers Squibb);

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Our products would also compete with biosimilars or generics, either currently approved or in development, to many of these products.

We are aware of several companies with product candidates in development for the treatment of patients with RA, including Anaptys’ rosnilimab, Johnson and Johnson’s JNJ-4703, and Gilead’s GS-0151 PD-1 agonists;

FcRn inhibitors including IMVT-1402 (Immunovant), a nipocalimab and certolizumab combination (Johnson and Johnson);

We are aware of several companies with product candidates in development for the treatment of patients with RA, including Merck’s tulisokibart and Roche/Roivant’s afimkibart TL1A antibodies;

Anaptys’ rosnilimab, Johnson and Johnson’s JNJ-4703, and Gilead’s GS-0151 PD-1 agonists;

RIPK1 inhibitors including Lilly’s ocadusertib;

additional TNF inhibitors including Zenas’ ZB002 half-life extended antibody and Sanofi’s oral small molecule SAR441566;

additional TNF inhibitors including Zenas’ ZB002 half-life extended antibody and Sanofi’s oral small molecule balinatunfib;

BTLA agonist GS-0272 (Gilead);

Treg cell therapy SBT-77-7101 (Sonoma Biotherapeutics);

IgG degrader BHV-1300 (Biohaven);

and bispecific fusion proteins including plamotamab/XmAb-13676 (Xencor).

MC1/3 agonist resomelagon/AP1189 (Synact Pharma);

bispecific fusion proteins including plamotamab/XmAb-13676 (Xencor);

and IL-1α/β inhibitors including a lutikizumab and ravagalimab combination (AbbVie).

If approved for the treatment of patients with moderate-to-severe PsA, SPY072 would compete with TNF antibodies including Humira (AbbVie), Cimzia (UCB), Enbrel (Amgen), Remicade (Johnson & Johnson), and Simponi (Johnson & Johnson);

T-cell activation inhibitor Orencia (Bristol Myers Squibb);

IL-17 antibodies Cosentyx (Novartis), Taltz (Lilly), and Bimzelx (UCB);

CD20 antibody Rituxan (Roche);

IL-12/23 antibody Stelara (Johnson & Johnson);

IL-23 antibodies Skyrizi (AbbVie) and Tremfya (Johnson & Johnson);

PDE4 antibody Otezla (Amgen);

and JAK inhibitors including Xeljanz (Pfizer) and Rinvoq (AbbVie).

Our products would also compete with biosimilars or generics, either currently approved or in development, to many of these products.

We are aware of several companies with product candidates in development for the treatment of patients with PsA, including TYK2 inhibitor Sotyktu (Bristol Myers Squibb);

IL-23 antibodies including icotrokinra (Johnson & Johnson) and tildrakizumab (Sun Pharma);

IL-17A/F nanobody sonelokimab (MoonLake);

and multiple combination trials including a Tremfya (IL-23) and Simponi (TNF) combination (Johnson & Johnson), a lutikizumab (IL-1α/β) and Skyrizi (IL-23) combination (AbbVie), and a Taltz (IL-17) and Zepbound (GIP/GLP-1 receptor agonist) combination (Lilly).

If approved for the treatment of patients with moderate-to-severe axSpA, SPY072 would compete with TNF antibodies including Humira (AbbVie), Cimzia (UCB), Enbrel (Amgen), Remicade (Johnson & Johnson), and Simponi (Johnson & Johnson);

IL-17 antibodies Cosentyx (Novartis), Taltz (Lilly), and Bimzelx (UCB);

and JAK inhibitors including Xeljanz (Pfizer) and Rinvoq (AbbVie).

Our products would also compete with biosimilars or generics, either currently approved or in development, to many of these products.

We are aware of several companies with product candidates in development for the treatment of patients with axSpA, including TL1A inhibitor tulisokibart (Merck);

IL-17A inhibitor gumokimab (Akesobio) and IL-17A/F nanobody sonelokimab (MoonLake);

and PDE4 inhibtior mufemilast (Hemay).

Government Regulation

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We, along with our third-party contractors, will be required to navigate the various preclinical, clinical and commercial approval requirements of the governing regulatory agencies of the countries in which we wish to conduct studies or seek approval or licensure of our product candidates.

Generally, before a new therapeutic product can be marketed, considerable data demonstrating a biological product candidate’s quality, safety, purity and potency, or a small molecule drug candidate’s quality, safety and efficacy, must be obtained, organized into a format specific for each regulatory authority, submitted for review and approved by

the regulatory authority.

For biological product candidates, potency is similar to efficacy and is interpreted to mean the specific ability or capacity of the product, as indicated by appropriate laboratory tests or by adequately controlled clinical data obtained through the administration of the product in the manner intended, to effect a given result.

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

• completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices ("GLP") regulation;

• completion of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices ("GLPs") regulation;

• submission to the FDA of an IND, which must become effective before clinical trials may begin and must be updated annually or when significant changes are made;

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• a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;

• satisfactory completion of an FDA pre-approval inspection of the manufacturing facility or facilities at which the proposed product is produced to assess compliance with cGMPs, and to assure that the facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with GCPs;

facilities, methods and controls are adequate to preserve the biological product’s continued safety, purity and potency, and of selected clinical investigation sites to assess compliance with GCP;

• FDA review and approval of a BLA to permit commercial marketing of the product for particular indications for use in the United States.

Preclinical and Clinical Development

Prior to beginning any clinical trial with a product candidate in the United States, we must submit an IND to the FDA.

An IND is a request for authorization from the FDA to administer an investigational new drug product to humans.

The central focus of an IND submission is on the general investigational plan and the protocol or protocols for preclinical studies and clinical trials.

The IND also includes results of animal and in vitro

studies assessing the toxicology, pharmacokinetics, pharmacology and pharmacodynamic characteristics of the product, chemistry, manufacturing and controls information, and any available human data or literature to support the use of the investigational product.

Once a therapeutic product candidate is identified for development, it must undergo preclinical studies before commencing any testing in humans.

Preclinical studies include laboratory evaluations of product chemistry, formulation and stability, as well as studies to evaluate the candidate's potential for efficacy and toxicity in animals.

The conduct of preclinical tests and formulation of the compounds for testing must comply with federal regulations and requirements, including current GLPs.

Prior to beginning any clinical trial with a product candidate in the United States, we must submit an IND application to the FDA.

An IND application is a request for authorization from the FDA to administer an investigational new drug product to humans.

The central focus of an IND application is on the general investigational plan, supportive nonclinical evaluations, and the protocol or protocols for clinical trials.

The IND includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology and pharmacodynamic characteristics of the product, chemistry, manufacturing and controls information, and any available human data or literature to support the use of the investigational product.

An IND must become effective before human clinical trials may begin.

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Submission of an IND therefore may or may not result in FDA authorization to begin a clinical trial.

In addition to the IND submission process, supervision of human gene transfer trials includes evaluation and assessment by an institutional biosafety committee (“IBC”), a local institutional committee that reviews and oversees research utilizing recombinant or synthetic nucleic acid molecules at that institution.

The IBC assesses the safety of the research and identifies any potential risk to public health or the environment and such review may result in some delay before initiation of a clinical trial.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical study.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with current GCPs, which include the requirement that all research subjects provide their informed consent for their participation in any clinical trial.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the trial, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated.

A separate submission to the existing IND must be made for each successive clinical trial conducted during product development and for any subsequent protocol amendments.

Furthermore, an independent IRB for each site proposing to conduct the clinical trial must review and approve the plan for any clinical trial and its informed consent form before the clinical trial begins at that site, and must monitor the study until completed.

Regulatory authorities, the IRB or the sponsor may suspend a clinical trial at any time on various grounds, including a finding that the subjects are being exposed to an unacceptable health risk or that the trial is unlikely to meet its stated objectives.

Some studies also include oversight by an independent group of qualified experts organized by the clinical study sponsor, known as a data safety monitoring board, which provides authorization for whether or not a study may move forward at designated check points based on access to certain data from the study and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.

There are also requirements governing the reporting of ongoing preclinical studies and clinical trials and clinical study results to public registries.

For purposes of BLA approval, human clinical trials are typically conducted in three sequential phases that may overlap.

Some trials also include oversight by an independent group of qualified experts organized by the clinical trial sponsor, known as a data safety monitoring board or data monitoring committee, which provides authorization for whether or not a trial may move forward at designated check points based on access to certain data from the trial and may halt the clinical trial if it determines that there is an unacceptable safety risk for subjects or other grounds, such as no demonstration of efficacy.

There are also requirements governing the reporting of ongoing clinical trials and clinical trial results to public registries.

Human clinical trials are typically conducted in three sequential phases that may overlap.

The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition.

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Concurrent with clinical trials, companies may complete additional animal studies and develop additional information about the biological characteristics of the product candidate and must finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the

product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final product, or for biologics, the safety, purity and potency.

Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the product candidate does not undergo unacceptable deterioration over its shelf life.

A sponsor may choose, but is not required, to conduct a foreign clinical study under an IND.

When a foreign clinical study is conducted under an IND, all IND requirements must be met unless waived.

When the foreign clinical study is not conducted under an IND, the sponsor must ensure that the study complies with certain FDA regulatory requirements in order to use the study as support for an IND or application for marketing approval or licensure, including that the study was conducted in accordance with GCP, including review and approval by an independent ethics committee and use of proper procedures for obtaining informed consent from subjects, and the FDA is able to validate the data from the study through an onsite inspection if the FDA deems such inspection necessary.

The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, methods must be developed for testing the safety, purity and potency of the biologic.

A sponsor may choose, but is not required, to conduct a foreign clinical trial under an IND.

When a foreign clinical trial is conducted under an IND, all IND requirements must be met unless waived.

When the foreign clinical trial is not conducted under an IND, the sponsor must ensure that the trial complies with certain FDA regulatory requirements in order to use the trial in support of a BLA, including that the trial was conducted in accordance with GCP, review and approval by an independent ethics committee, use of proper procedures for obtaining informed consent from subjects, and the FDA is able to validate the data from the trial through an onsite inspection if the FDA deems such inspection necessary.

The GCP requirements encompass both ethical and data integrity standards for clinical studies.

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The submission of a BLA requires payment of a substantial application user fee to the FDA, unless a waiver or exemption applies.

In addition, under the Pediatric Research Equity Act (“PREA”), a BLA or supplement to a BLA must contain data to assess the safety and effectiveness of the biological product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The Food and Drug Administration Safety and Innovation Act requires that a sponsor who is planning to submit a marketing application for a biological product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration submit an initial pediatric study plan (“PSP”) within sixty days after an end-of-Phase 2 meeting or as may be agreed between the sponsor and FDA.

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In this event, the BLA must be resubmitted with the additional information.

Once a BLA has been accepted for filing, the FDA’s goal is to review standard applications within ten months after the filing date, or, if the application qualifies for priority review, six months after the FDA accepts the application for filing.

Once a BLA has been accepted for filing, the FDA’s goal is to review standard applications within ten months after the FDA accepts the application for filing, or, if the application qualifies for priority review, six months after the FDA accepts the application for filing.

In both standard and priority reviews, the review process may also be extended by FDA requests for additional information or clarification.

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

The FDA reviews a BLA to determine, among other things, whether a

product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held meets standards designed to assure the product’s continued safety, purity and potency.

The FDA may convene an advisory committee to provide clinical insight on application review questions.

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The FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs.

Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCPs and data integrity of the submitted clinical trial data.

If the FDA determines that the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information.

Notwithstanding the submission of any requested additional

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

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

After the FDA evaluates a BLA and conducts inspections of manufacturing facilities where the investigational product and/or its drug substance will be produced, the FDA may issue an approval letter or a Complete Response letter.

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For example, the FDA may approve the BLA with a Risk Evaluation and Mitigation Strategy (“REMS”) to ensure the benefits of the product outweigh its risks.

A REMS is a safety strategy to manage a known or potential serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

A REMS is a safety strategy to manage a known or potential serious risk associated with a product and to enable patients to have continued access to such medicines by managing their safe use, and could include requirements for medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.

The FDA also may condition approval on, among other things, changes to proposed labeling or the development of adequate controls and specifications.

Once approved, the FDA may withdraw the product approval if compliance with pre- and post-marketing requirements is not maintained or if problems occur after the product reaches the marketplace.

The FDA may require one or more Phase 4 post-market studies and surveillance to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

The FDA may require one or more Phase 4 post-marketing studies and/or surveillance in addition to that required of every approved product to further assess and monitor the product’s safety and effectiveness after commercialization, and may limit further marketing of the product based on the results of these post-marketing studies.

Expedited Development and Review Programs

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A fast track product may also be eligible for rolling review, where the FDA may consider for review sections of the BLA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the BLA, the FDA agrees to accept sections of the BLA and determines that the schedule is acceptable, and the sponsor pays any required user fees upon submission of the first section of the BLA.

Additionally, products studied for their safety and effectiveness in treating serious or life-threatening diseases or conditions may receive accelerated approval upon a determination that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

As a condition of accelerated approval, the FDA will generally require the sponsor to perform adequate and well-controlled post-marketing clinical studies to verify and describe the anticipated effect on irreversible morbidity or mortality or other clinical benefit.

a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.

Under the Food and Drug Omnibus Reform Act of 2022 the FDA may require, as appropriate, that such studies be underway prior to approval or within a specific time period after the date of approval for a product granted accelerated approval.

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A product is eligible for priority review if there is evidence it has the potential to provide a significant improvement in the treatment, diagnosis or prevention of a serious disease or condition.

For original BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing date (as compared to ten months under standard review).

For original BLAs, priority review designation means the FDA’s goal is to take action on the marketing application within six months of the 60-day filing acceptance date (as compared to ten months under standard review).

Fast track designation, breakthrough therapy designation and priority review do not change the standards for approval but may expedite the development or approval process.

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Combination therapy is a treatment modality that involves the use of two or more drugs to be used in combination to treat a disease or condition.

If those drugs are combined in one dosage form, such as one pill, that is known as a fixed dose combination product and it is reviewed pursuant to the FDA’s Combination Rule at 21 CFR 300.50.

If those drugs are combined in one dosage form, such as a single injection, that is known as a fixed dose combination product, and it is reviewed pursuant to the FDA’s Combination Rule at 21 CFR 300.50.

The rule provides that two or more drugs may be combined in a single dosage form when each component contributes to the claimed effects and the dosage of each component (amount, frequency, duration) is such that the combination is safe and effective for a significant patient population requiring such concurrent therapy, as defined in the labeling for the drug.

But not all combination therapy falls under the category of a fixed dose combination.

However, not all combination therapy falls under the category of a fixed dose combination.

For example, the FDA recognizes that two drugs in separate dosage forms and in separate packaging, that otherwise might be administered as monotherapy for an indication, also may be used in combination for the same indication.

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That office serves as a focal point for combination product issues for agency reviewers and industry.

It is also responsible for developing

guidance and regulations to clarify the regulation of combination products, and for assignment of the FDA center that has primary jurisdiction for review of combination products where the jurisdiction is unclear or in dispute.

It is also responsible for developing guidance and regulations to clarify the regulation of combination products, and for assignment of the FDA center that has primary jurisdiction for review of combination products where the jurisdiction is unclear or in dispute.

A combination product with a primary mode of action attributable to the drug or biologic component generally would be reviewed and approved pursuant to the drug or biologic approval processes set forth in the FDCA.

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In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, and potency or effectiveness of biologics.

After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval.

After approval, changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval.

There also are continuing user fee requirements, under which the FDA assesses an annual program fee for each product identified in an approved BLA.

Biologic manufacturers and their subcontractors are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMPs, which impose certain procedural and documentation requirements upon us and our third-party manufacturers.

Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval before being implemented.

Changes to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA review and approval before being implemented.

FDA regulations also require investigation and correction of any deviations from cGMPs and impose reporting requirements upon us and any third-party manufacturers that we may decide to use.

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Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information;

imposition of post-market studies or clinical studies to assess new safety risks;

imposition of post-marketing studies or clinical studies to assess new safety risks;

or imposition of distribution restrictions or other restrictions under a REMS program.

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The FDA closely regulates the marketing, labeling, advertising and promotion of biologics.

A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and in accordance with the provisions of the approved label.

A company can make only those claims relating to safety and efficacy, purity and potency that are approved by the FDA and consistent with the provisions of the approved label.

The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

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The FDA does not regulate the behavior of physicians in their choice of treatments.

The FDA does, however, restrict manufacturer’s communications on the subject of off-label use of their products.

The FDA does, however, restrict manufacturer’s communications on the subject of off-label uses of their products.

Additionally, promotional materials for approved biologic products must be submitted to the FDA in conjunction with their first use.

Biosimilars and Reference Product Exclusivity

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The FDA has issued several guidance documents outlining an approach to review and approval of biosimilars.

Biosimilarity, which requires that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity, and potency, is generally shown through analytical studies, animal studies, and a clinical study or studies.

Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.

A product shown to be biosimilar or interchangeable with an FDA-approved reference biological product may rely in part on the FDA’s previous determination of safety and effectiveness for the reference product for approval, which can potentially reduce the cost and time required to obtain approval to market the product.

The FDA has issued guidance documents intended to inform prospective applicants and facilitate the development of proposed biosimilars and interchangeable biosimilars, as well as to describe the FDA’s interpretation of certain statutory requirements added by the BPCIA.

Complexities associated with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles to implementation and the FDA has issued guidance documents intended to inform prospective applicants and facilitate the development of proposed biosimilars and interchangeable biosimilars, as well as to describe the FDA’s interpretation of certain statutory requirements added by the BPCIA.

Under the BPCIA, an application for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed by the FDA.

In addition, the approval of a biosimilar product may not be made effective by the FDA until 12 years from the date on which the reference product was first licensed.

During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing that applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product.

During this 12-year period of exclusivity, another company may still market a competing version of the reference product if the FDA approves a full BLA for the competing product containing

that applicant’s own preclinical data and data from adequate and well-controlled clinical trials to demonstrate the safety, purity and potency of its product.

The BPCIA also created certain exclusivity periods for biosimilars approved as interchangeable products.

At this juncture, it is unclear whether products deemed “interchangeable” by the FDA will, in fact, be readily substituted by pharmacies, which are governed by state pharmacy law.

A reference biologic is granted twelve years of exclusivity from the time of first licensure of the reference product.

Additionally, many states have passed laws concerning the ability of pharmacies to substitute biosimilar and interchangeable products for the reference product.

A reference biologic is granted twelve years of exclusivity from the time of first licensure (BLA approval) of the reference product.

The first biologic product submitted under the abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity against other biologics submitted under the abbreviated approval pathway for the lesser of (i) one year after the first commercial marketing, (ii) 18 months after approval if there is no legal challenge, (iii) 18 months after the resolution in the applicant’s favor of a lawsuit challenging the biologics’ patents if an application has been submitted, or (iv) 42 months after the application has been approved if a lawsuit is ongoing within the 42-month period.

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This six-month exclusivity, which runs from the end of other exclusivity protection or patent term, may be granted based on the voluntary completion of a pediatric study in accordance with an FDA-issued “Written Request” for such a study.

The BPCIA is complex and continues to be interpreted and implemented by the FDA.

In July 2018, the FDA announced an action plan to encourage the development and efficient review of biosimilars, including the establishment of a new office within the agency that will focus on therapeutic biologics and biosimilars.

On December 20, 2020, Congress amended the PHSA as part of the COVID-19 relief bill to further simplify the biosimilar review process by making it optional to show that conditions of use proposed in labeling have been previously approved for the reference product, which used to be a requirement of the application.

In addition, government proposals have sought to reduce the 12-year reference product exclusivity period.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation.

As a result, the ultimate impact, implementation, and impact of the BPCIA is subject to significant uncertainty.

As discussed below, the Inflation Reduction Act of 2022 (“IRA”) is a significant new law that intends to foster generic and biosimilar competition and to lower drug and biologic costs.

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Other Healthcare Laws and Compliance Requirements

Pharmaceutical companies are subject to additional healthcare regulation and enforcement by the federal government and by authorities in the states and foreign jurisdictions in which they conduct their business.

Such laws include, without limitation:

the federal Anti-Kickback Statute (“AKS”);

the federal False Claims Act (“FCA”);

the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) and similar foreign, federal and state fraud, abuse and transparency laws.

The AKS prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under any federal healthcare program.

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

The AKS has been interpreted to apply to arrangements between pharmaceutical manufacturers on one hand, and prescribers and purchasers on the other.

The government often takes the position that to violate the AKS, only one purpose of the remuneration need be to induce referrals, even if there are other legitimate purposes for the remuneration.

There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from AKS prosecution, but they are drawn narrowly and practices that involve remuneration, such as consulting agreements, that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor.

Our practices may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor.

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor

does not make the conduct per se illegal under the AKS.

Biopharmaceutical manufacturers, particularly manufacturers of marketed products, are subject to wide-ranging healthcare regulation and enforcement by federal, state and local government authorities in the U.S.

as well as by foreign jurisdictions.

Biopharmaceutical manufacturers must comply with various federal, state and local laws targeting fraud and abuse in the healthcare industry, including anti-kickback and false claims laws.

The federal Anti-Kickback Statute generally prohibits, among other things, a pharmaceutical manufacturer from directly or indirectly soliciting, offering, receiving, or paying any remuneration in cash or in kind where one purpose is either to induce the referral of an individual for, or the purchase or prescription of, a particular drug that is payable by a federal health care program, including Medicare or Medicaid.

A person or entity does not need to have actual knowledge of the statute or a specific intent to violate the statute.

There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, but protection is available only if all requirements are met.

Our practices, such as paying physicians for consulting services, may not in all cases meet all of the criteria for protection under a statutory exception or regulatory safe harbor.

Failure to meet all of the requirements of a particular applicable statutory exception or regulatory safe harbor does not make the conduct per se illegal under the statute.

Instead, the legality of the arrangement will be evaluated on a case-by-case basis based on a cumulative review of all of its facts and circumstances.

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.

Civil and criminal false claims laws, including the FCA, and civil monetary penalty laws, which can be enforced through civil whistleblower or qui tam actions, prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment of federal government funds, including in federal healthcare programs, that are false or fraudulent.

A claim arising from a violation of the federal Anti-Kickback Statute also constitutes a

false or fraudulent claim for purposes of the FCA.

Other federal and state anti-kickback statutes exist.

For example, another healthcare anti-kickback statute prohibits certain payments related to referrals of patients to certain providers (such as clinical laboratories) and applies to services reimbursed by private health plans as well as government health care programs.

Federal and state false claims laws, such as the federal civil False Claims Act (“FCA”), generally prohibit anyone from knowingly and willfully, among other activities, presenting, or causing to be presented for payment to third party payors (including Medicare and Medicaid) claims for drugs or services that are false or fraudulent.

Pharmaceutical and other healthcare companies have been prosecuted under these laws for engaging in a variety of different types of conduct that “caused” the submission of false claims to federal healthcare programs.

Under the AKS, for example, a claim resulting from a violation of the AKS is deemed to be a false or fraudulent claim for purposes of the FCA.

HIPAA created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program, including private third-party payors, and making false statements relating to healthcare matters.

A person or entity does not need to have actual knowledge of the healthcare fraud statute implemented under HIPAA or specific intent to violate the statute in order to have committed a violation.

The FDCA addresses, among other things, the design, production, labeling, promotion, manufacturing, and testing of drugs, biologics and medical devices, and prohibits such acts as the introduction into interstate commerce of adulterated or misbranded drugs or devices.

The PHSA also prohibits the introduction into interstate commerce of unlicensed or mislabeled biological products.

federal Physician Payments Sunshine Act requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to annually report to the Centers for Medicaid & Medicare Services ("CMS") information related to payments or other transfers of value to various healthcare professionals including physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified nurse anesthetists, certified nurse-midwives, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members.

Beginning on January 1, 2023, California Assembly Bill 1278 requires California physicians and surgeons to notify patients of the Open Payments database established under the federal Physician Payments Sunshine Act.

We are also subject to federal price reporting laws and federal consumer protection and unfair competition laws.

Federal price reporting laws require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/ or discounts on approved products.

Federal consumer protection and unfair competition laws broadly regulate marketplace activities and activities that potentially harm consumers.

We are also subject to additional similar U.S.

state and foreign law equivalents of each of the above federal laws, which, in some cases, differ from each other in significant ways, and may not have the same effect, thus complicating compliance efforts.

If our operations are found to be in violation of any of such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, civil, criminal and administrative penalties, damages, fines, exclusion from government-funded healthcare programs, such as Medicare and Medicaid or similar programs in other countries or jurisdictions, integrity oversight and reporting obligations to resolve allegations of non-compliance, disgorgement, individual imprisonment, contractual damages, reputational harm, diminished profits and the curtailment or restructuring of our operations.

Data Privacy and Security

Numerous state, federal, and foreign laws govern the collection, dissemination, use, access to, confidentiality, and security of personal information, including health-related information.

In the United States, numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws and regulations, govern the collection, use, disclosure, and protection of health-related and other personal information could apply to our operations or the operations of our partners.

For example, HIPAA, as amended by the Health Information Technology for

Economic and Clinical Health ("HITECH"), and their respective implementing regulations imposes data privacy, security, and breach notification obligations on certain health care providers, health plans, and health care clearinghouses, known as covered entities, as well as their business associates and their covered subcontractors that perform certain services that involve using, disclosing, creating, receiving, maintaining, or transmitting individually identifiable protected health information ("PHI") for or on behalf of such covered entities.

These requirements imposed by HIPAA and the HITECH Act on covered entities and business associates include entering into agreements that require business associates protect PHI provided by the covered entity against improper use or disclosure, among other things;

following certain standards for the privacy of PHI, which limit the disclosure of a patient’s past, present, or future physical or mental health or condition or information about a patient’s receipt of health care if the information identifies, or could reasonably be used to identify, the individual;

ensuring the confidentiality, integrity, and availability of all PHI created, received, maintained, or transmitted in electronic form, to identify and protect against reasonably anticipated threats or impermissible uses or disclosures to the security and integrity of such PHI;

and reporting of breaches of PHI to individuals and regulators.

Entities that are found to be in violation of HIPAA may be subject to significant civil, criminal, and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with the U.S.

Department of Health and Human Services ("HHS") to settle allegations of HIPAA non-compliance.

A covered entity or business associate is also liable for civil money penalties for a violation that is based on an act or omission of any of its agents, which may include a downstream business associate, as determined according to the federal common law of agency.

HITECH also increased the civil and criminal penalties applicable to covered entities and business associates and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorneys’ fees and costs associated with pursuing federal civil actions.

To the extent that we submit electronic healthcare claims and payment transactions that do not comply with the electronic data transmission standards established under HIPAA and HITECH, payments to us may be delayed or denied.

In addition, state health information privacy laws, such as California’s Confidentiality of Medical Information Act and Washington’s My Health My Data Act, govern the privacy and security of health-related information, specifically, may apply even when HIPAA does not and impose additional requirements.

Even when HIPAA and state health information privacy laws do not apply, according to the FTC and state Attorneys General, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act and state consumer protection laws.

In addition, certain state laws, such as the California Consumer Privacy Act of 2018, as amended by the California Privacy Rights Act of 2020 (“CCPA”), govern the privacy and security of personal information, including health-related information in certain circumstances, some of which are more stringent than HIPAA in various ways.

Numerous other states have passed similar laws, but many differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.

The CCPA applies to personal data of consumers, business representatives, and employees, and imposes obligations on certain businesses that do business in California, including to provide specific disclosures in privacy notices, and affords rights to California residents in relation to their personal information.

Health information falls under the CCPA’s definition of personal information where it identifies, relates to, describes, or is reasonably capable of being associated with or could reasonably be linked, directly or indirectly, with a particular consumer or household — unless it is subject to HIPAA — and is included under a new category of personal information, “sensitive personal information,” which is offered greater protection.

The numerous other comprehensive privacy laws that have passed or are being considered in other states, as well as at the federal and local levels, also exempt some data processed in the context of clinical trials;

but others exempt covered entities and business associates subject to HIPAA altogether, further complicating compliance efforts, and increasing legal risk and compliance costs for us and the third parties upon whom we rely.

Additionally, our use of artificial intelligence and machine learning may be subject to laws and evolving regulations regarding the use of artificial intelligence and machine learning, controlling for data bias, and antidiscrimination.

Failure to comply with these laws, where applicable, can result in the imposition of significant civil and/or criminal penalties and private litigation.

Privacy and security laws, regulations, and other obligations are constantly evolving, may conflict with each other to complicate compliance efforts, and can result in

investigations, proceedings, or actions that lead to significant civil and/or criminal penalties and restrictions on data processing.

Such laws are not always limited to activities involving government programs or payors.

For example, a federal healthcare fraud statute prohibits the knowing and willful execution, or attempt to execute, a scheme to defraud a health care benefit program, including private health plans, or obtain, through false or fraudulent pretenses, money or property owned by, or under the custody or control of, such a health care benefit program.

Laws and regulations have also been enacted by the federal government and various states to regulate the sales and marketing practices of pharmaceutical manufacturers.

The laws and regulations generally limit financial interactions between manufacturers and health care providers;

require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the U.S.

federal government;

and/or require disclosure to the government and/or public of financial interactions (so-called “sunshine laws” and "sunshine reporting").

State and local laws may also require disclosure of pharmaceutical pricing information and marketing expenditures or licensure of sales representatives.

Manufacturers must also submit information to the FDA on the identity and quantity of drug samples requested and distributed by a manufacturer during each year.

Biopharmaceutical manufacturers are also subject to federal pricing and price reporting laws.

Such laws require manufacturers to calculate and report complex pricing metrics to government programs, where such reported prices may be used in the calculation of reimbursement and/or discounts on approved products.

The laws may also require biopharmaceutical manufacturers to offer products at discounted prices to specific government programs or specific purchasers as a condition for participation in certain government health benefit programs.

Federal consumer protection and unfair competition laws broadly regulate our marketplace activities and activities that potentially harm consumers.

The distribution of biological products is subject to additional requirements and regulations, including extensive record-keeping, licensing, storage, and security requirements intended to prevent the unauthorized sale of such products.

Sanctions for the violation of healthcare laws vary by law but may be significant and compliance is challenging.

For example, violations of fraud and abuse laws may be punishable by criminal or civil sanctions, including fines and civil monetary penalties, and/or exclusion from federal health care programs (including Medicare and Medicaid).

The scope of the federal and the various analogous state anti-kickback, false claims, and similar fraud and abuse laws vary, but is generally broad.

Many of the fraud and abuse laws and regulations contain ambiguous requirements or require administrative guidance for implementation.

Federal and state authorities are paying increased attention to enforcement of these laws within the pharmaceutical industry, and private individuals have been active in alleging violations of the laws and bringing suits on behalf of the government under the FCA as evidenced by numerous significant settlements.

Violations of international fraud and abuse laws could result in similar penalties, including exclusion from participation in health programs outside the U.S.

Given the scope, complexity and lack of clarity in healthcare laws and their implementation, our activities could be subject to scrutiny and the imposition of penalties under the laws.

If we were subject to allegations concerning, or were convicted of violating, these laws, our business could be harmed.

Data Privacy and Cybersecurity Requirements (U.S.)

We are subject to numerous and evolving U.S.

federal and state laws and regulations governing the collection, use, disclosure, transfer, and security of personal information, including health‑related information, any of which may impose operational constraints, create compliance complexity, and increase enforcement and

litigation exposure.

Applicable federal and state frameworks include HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing regulations (including the Privacy, Security, Breach Notification, and Enforcement Rules), state health information privacy laws, state data breach notification laws, a growing number of state comprehensive consumer privacy laws, as well as other consumer protection laws and regulations that could apply to our operations or the operations of our partners.

In addition, sector- and data-specific laws—such as those addressing marketing communications, data security, and the sale/transfer of certain bulk sensitive data—may apply to aspects of our operations or the operations of our partners.

In addition to statutory regimes, we are also subject to evolving state tort and other common law restrictions that may govern privacy and data security practices, including potential duties and liability under theories such as negligence, invasion of privacy, breach of confidence, and implied contract.

Courts and enforcement authorities continue to apply and test these doctrines in the data privacy and cybersecurity context, which can expand obligations and remedies and increase litigation exposure and compliance costs

Certain of our activities may be subject to HIPAA, which imposes standards for the privacy of protected health information (“PHI”), the security of electronic PHI, breach notification to individuals and regulators, and enforcement.

HIPAA applies directly to “covered entities” (health care providers, health plans, and health care clearinghouses), as well as their “business associates” and their covered subcontractors that perform certain services that involve using, disclosing, creating, receiving, maintaining, or transmitting individually identifiable PHI for or on behalf of such covered entities.

Requirements imposed by HIPAA on covered entities and business associates include:

(i) entering into agreements that require business associates and their covered subcontracts to protect PHI provided by the covered entity against improper use or disclosure;

(ii) complying with HIPAA privacy standards that limit the use and disclosure of information about a patient’s past, present, or future physical or mental health or condition, or the patient’s receipt of health care, where the information identifies, or could reasonably be used to identify, the individual;

(iii) implementing administrative, physical, and technical safeguards to ensure the confidentiality, integrity, and availability of electronic PHI and to protect against reasonably anticipated threats, hazards, or impermissible uses or disclosures;

and (iv) reporting of breaches of unsecured PHI to affected individuals and, where applicable, regulators.

Entities found to be in violation of HIPAA may be subject to significant civil, criminal, and administrative fines and penalties, and may be required to enter into resolution agreements and corrective action plan with the U.S.

Department of Health and Human Services (“HHS”) to resolve allegations of non-compliance.

A covered entity or business associate can also be liable for civil money penalties for violations based on an act or omission of its agents, including downstream business associates.

HITECH increased the civil and criminal penalties applicable to covered entities and business associates and authorized state attorneys general to bring civil actions in federal court to enforce HIPAA and seek damages, injunctive relief, and attorneys’ fees and costs.

To the extent we submit electronic healthcare claims and payment transactions that do not comply with HIPAA’s electronic data transmission standards, payments to us may be delayed or denied.

Several states have enacted or are implementing health-data-specific statutes outside HIPAA—such as laws in Washington and Nevada—that broadly regulate the collection, use, and disclosure of “consumer health data,” including certain research, analytics, website, and marketing activities.

These laws may impose consent, notice, contract, and data security obligations, create limitations on sharing with third parties and processors, and provide private rights of action or enhanced enforcement, which could affect aspects of our operations that are not subject to HIPAA.

Even where HIPAA and state health information privacy laws do not apply, the FTC and state attorneys general have asserted that violations of consumer privacy or failures to implement appropriate data security measures may constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act and state consumer protection laws.

In addition, the amended CCPA and approximately 19 other comprehensive state privacy laws, together with their implementing regulations, establish individual rights regarding personal information, impose notice, purpose-limitation, data minimization, and security obligations, and require specific contracts with service providers and other third parties.

Some of these laws also require honoring opt-out signals for targeted advertising or certain profiling, restrict processing of “sensitive” personal information, and mandate assessments for higher-risk processing activities.

Scope and exemptions vary by state:

for example, the CCPA applies to personal information of consumers, business representatives, and employees, includes additional protections for “sensitive personal information,” and generally excludes PHI subject to HIPAA;

other states may exempt

entities regulated by HIPAA or data processed in the context of clinical trials, or neither, which complicates compliance and increases legal risk and costs.

We are also subject to state data breach notification statutes, like the New York SHIELD Act, that require notification to affected individuals and, in some cases, regulators and consumer reporting agencies following certain security incidents.

In connection with clinical research, we also handle personal information subject to privacy and/or confidentiality obligations in informed consent documents and clinical trial agreements, as well as ethical and regulatory standards governing human subjects research.

Depending on the trial and role of the parties involved, our activities may be subject to oversight by institutional review boards, and we may rely on de-identification, coding, or limited data sets, along with contractual restrictions, to manage privacy and data sharing in research contexts.

We also depend on a network of service providers and partners-including clinical sites, contract research organizations, laboratories, data hosting providers, and other vendors-to support our operations.

As a result, we implement contractual and technical controls, diligence, and monitoring of third parties that create, receive, maintain, or transmit personal information on our behalf, and, where data is accessed from or transferred to locations outside the United States, we apply or rely on third parties to implement cross-border transfer mechanisms and safeguards as required by applicable law.

In addition, the U.S.

Department of Justice (“DOJ”) has promulgated rules restricting the sale, transfer, or access to certain categories of bulk sensitive personal data, including health data, genetic information, and other categories deemed to present heightened risks if aggregated and transferred in large volumes.

The DOJ Bulk Data Rule is designed to prevent the misuse of bulk data by foreign adversaries and to mitigate national security risks associated with the transfer of sensitive information.

We are actively evaluating the applicability of these requirements to our operations and monitoring regulatory developments in this area.

Should the rule apply to any aspect of our business, we may be required to implement additional due diligence, risk assessment, notification, and recordkeeping measures, particularly with respect to cross-border data transfers and transactions involving bulk sensitive data.

Noncompliance may result in civil or criminal penalties, and ongoing evaluation of our obligations under the DOJ Bulk Data Rule remains a component of our broader data governance and compliance program.

Our use of artificial intelligence (“AI”) and machine learning technologies in research, analytics, and business operations is subject to a rapidly evolving legal and regulatory landscape.

Federal and state authorities are increasingly focused on the responsible use of AI, including requirements for transparency, accountability, and the mitigation of algorithmic bias and discrimination.

Several states have enacted or are considering laws that regulate the use of AI in processing personal information, mandate impact assessments for high-risk AI applications, and require disclosures regarding automated decision-making.

We may be required to implement measures to assess and address potential biases in AI models, ensure explainability and fairness, and provide individuals with rights regarding automated processing of their data.

In addition, federal agencies such as the FDA have issued guidance on the use of AI in medical device development and clinical research, which may impact our operations.

As regulatory expectations continue to develop, we may need to update our policies, procedures, and technical controls to ensure compliance with applicable AI-related requirements.

The requirements of these laws and regulations continue to develop, and new laws, amendments, or interpretive guidance may require us to modify our data handling practices, implement additional controls, or incur increased compliance costs.

Noncompliance or perceived noncompliance could result in regulatory investigations and enforcement actions, private litigation, fines and penalties, or orders requiring changes to our business practices.

Coverage and Reimbursement

and markets in other countries, patients generally rely on third-party payors to reimburse all or part of the costs associated with their treatment.

Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid, and commercial payors is critical to new product acceptance.

Our ability to successfully commercialize our product candidates will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government health administration authorities, private health insurers and other organizations.

Even if coverage is provided, the approved reimbursement amount may not be high enough to allow it to establish or maintain pricing sufficient to realize a sufficient return on its investment.

Government authorities and third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels.

Significant uncertainty exists as to the coverage and reimbursement status of any pharmaceutical or biological product for which we obtain regulatory approval.

Sales of any product, if approved, depend, in part, on the extent to which such product will be covered by third-party payors, such as federal, state, and foreign government healthcare programs, commercial insurance and managed healthcare organizations, and the level of reimbursement, if any, for such product by third-party payors.

Decisions regarding whether to cover any of our product candidates, if approved, the extent of coverage and amount of reimbursement to be provided are made on a plan-by-plan basis.

Further, no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement can differ significantly from payor to payor.

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

As a result, the coverage determination process is often a time-consuming and costly process that will require us to provide scientific and clinical support for the use of our product candidates to each payor separately, with no assurance that coverage and adequate reimbursement will be applied consistently or obtained in the first instance.

Factors payors consider in determining reimbursement are based on whether the product is:

Adequate coverage and reimbursement from government healthcare programs, such as Medicare and Medicaid, and private payors is critical to new product acceptance.

Our ability to successfully commercialize our product candidates, if and when approved, will depend in part on the extent to which coverage and adequate reimbursement for these products and related treatments will be available from government healthcare programs, private health insurers and other organizations.

Within the U.S., no uniform policy for coverage and reimbursement exists in the United States, and coverage and reimbursement for drug products can differ significantly from payor to payor.

One third-party payor’s decision to cover a particular drug product does not ensure that other payors will also provide coverage for the drug product.

Factors payors consider in determining coverage include whether the product is:

• a covered benefit under its health plan;

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• neither experimental nor investigational.

Third-party payors are increasingly challenging the prices charged for medical products and services, examining the medical necessity and reviewing the cost effectiveness of pharmaceutical or biological products, medical devices and medical services, in addition to questioning safety and efficacy.

Even if products are covered, third party payors may seek to control utilization of the products through various mechanisms (e.g., requiring a prescriber to obtain prior authorization from a health plan before the product will be covered by the health plan or establishing patient copays and deductibles that encourage use of other products over our products).

Coverage of a product by a third-party payor does not mean that reimbursement will be adequate.

Third party reimbursement may not be sufficient to enable us to maintain price levels high enough to realize an appropriate return on our investment in product development.

Net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or requested by private payors in exchange for coverage or by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold.

Our ability to commercialize our product candidates successfully may be adversely affected by discounts or rebates that we are required to provide in order to ensure coverage of our products and compete in the marketplace.

Significant uncertainty exists as to the coverage and reimbursement status of new drug products.

There may be considerable delays in obtaining reimbursement for newly-approved drugs, and coverage may be more limited than the indications for which the drug is approved by the FDA.

Third-party payors may also seek, with respect to an approved product, additional clinical evidence, including comparative effectiveness evidence, that goes beyond the data required to obtain marketing approval in order to demonstrate clinical benefits and value relative to other therapies before covering new products.

If so, we may be required to conduct additional pharmacoeconomic studies beyond what is required for marketing approval.

Third-party payors are increasingly challenging the prices charged for pharmaceutical or biological products and related services, examining the medical necessity and reviewing the cost effectiveness of such products and services.

For products administered under the supervision of a physician, inadequate reimbursement for the product itself or the treatment or procedure in which the product is used may adversely impact physician utilization.

Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit sales of any product that receives approval.

Decreases in third-party reimbursement for any product or a decision by a third-party not to cover a product could reduce physician usage and patient demand for the product.

For products administered under the supervision of a physician, obtaining coverage and adequate reimbursement may be particularly difficult because of the higher prices often associated with such drugs.

Additionally, separate reimbursement for the product itself or the treatment or procedure in which the product is used may not be available, which may impact physician utilization.

In addition, the U.S.

government, state legislatures and foreign governments have continued implementing cost- containment programs, including price controls, restrictions on coverage and reimbursement and requirements for substitution of generic products.

The IRA provides CMS with significant new authorities intended to curb drug costs and to encourage market competition.

For the first time, CMS will be able to directly negotiate prescription drug prices and to cap out-of-pocket costs.

Each year, CMS will select and negotiate a preset number of high-spend drugs and biologics that are covered under Medicare Part B and Part D that do not have generic or biosimilar competition.

On August 29, 2023, HHS announced the list of the first ten drugs subject to price negotiations.

These price negotiations occurred in 2024.

In January 2025, CMS announced a

list of 15 additional Medicare Part D drugs that will be subject to price negotiations.

The IRA also provides a new “inflation rebate” covering Medicare patients that took effect in 2023 and is intended to counter certain price increases in prescriptions drugs.

The inflation rebate provision requires drug manufacturers to pay a rebate to the federal government if the price for a drug or biologic under Medicare Part B and Part D increases faster than the rate of inflation.

To support biosimilar competition, beginning in October 2022, qualifying biosimilars may receive a Medicare Part B payment increase for a period of five years.

Separately, if a biologic drug for which no biosimilar exists delays a biosimilar’s market entry beyond two years, CMS will be authorized to subject the biologics manufacturer to price negotiations intended to ensure fair competition.

Notwithstanding these provisions, the IRA’s impact on commercialization and competition remains largely uncertain.

In addition, net prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs or private payors and by any future relaxation of laws that presently restrict imports of drugs from countries where they may be sold at lower prices than in the U.S.

Increasingly, third-party payors are requiring that drug companies provide them with predetermined discounts from list prices and are challenging the prices charged for medical products.

We cannot be sure that reimbursement will be available for any product candidate that we may commercialize and, if reimbursement is available, the level of reimbursement.

In addition, many pharmaceutical manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price and best price.

Penalties may apply in some cases when such metrics are not submitted accurately and timely.

Further, these prices for drugs may be reduced by mandatory discounts or rebates required by government healthcare programs.

We cannot be sure that adequate coverage and reimbursement will be available, or remain available, for any drug that we commercialize.

Coverage and reimbursement may impact the demand for, or the price of, our products and any product candidate for which we obtain marketing approval and limits on coverage and reimbursement may adversely affect our ability to successfully commercialize any product candidate for which we obtain marketing approval.

Finally, in some foreign countries, the proposed pricing for a drug must be approved before it may be lawfully marketed.

The requirements governing drug pricing vary widely from country to country.

For example, the European Union provides options for its member states to restrict the range of medicinal products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use.

To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost effectiveness of a particular product candidate to currently available therapies.

A member state may approve a specific price for the medicinal product or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the medicinal product on the market.

There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our product candidates.

For example, drug pricing in the European Union is primarily a national competence, with each member state setting its own prices and reimbursement rules according to national budgets and health systems.

The national rules and policies should comply with EU transparency laws to ensure that national pricing and reimbursement decisions for medicines are transparent, non-discriminatory, and timely, thereby facilitating the free movement of pharmaceuticals within the European Union.

To obtain reimbursement and pricing approval, countries may require the completion of clinical trials to establish relative clinical effectiveness to guide cost effectiveness assessment of a new treatment method to currently available therapies before it can be adopted for use in the respective national health systems.

A member state may approve a specific price for the medicinal product or implement a system of direct or indirect controls on the profitability of the company placing the medicinal

product on the market.

There can be no assurance that any country with price controls or reimbursement limitations for pharmaceutical products will grant favorable reimbursement and pricing terms for any of our product candidates.

Historically, products launched in the European Union do not follow price structures of the U.S.

and generally prices tend to be significantly lower.

and are generally subject to lower prices.

Healthcare Reform

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There is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality or expanding access.

In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by federal and state legislative initiatives, including those designed to limit the pricing, coverage, and reimbursement of pharmaceutical and biopharmaceutical products, especially under government-funded health care programs, and increased governmental control of drug pricing.

The ACA, which was enacted in March 2010, substantially changed the way healthcare is financed by both governmental and private insurers in the United States, and significantly affected the pharmaceutical industry.

The ACA contains a number of provisions of particular import to the pharmaceutical and biotechnology industries, including, but not limited to, those governing enrollment in federal healthcare programs, a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected, and annual fees based on pharmaceutical companies’ share of sales to federal health care programs.

For example, in March 2010, the U.S.

Congress enacted the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act (the “ACA”) which substantially changed the way healthcare is delivered as well as financed by both governmental and private insurers in the United States.

The ACA expanded health care coverage through the Medicaid expansion and subsidization of private health insurance, implemented the “individual mandate” for health insurance coverage (by imposing a tax penalty on individuals who did not obtain insurance), and changed the coverage and reimbursement of drug products under government healthcare programs.

Since its enactment, there have been judicial and Congressional challenges to certain aspects of the ACA, and we expect there will be additional challenges and amendments to the ACA in the future.

For example, the IRA, among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.

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

Other legislative changes have been proposed and adopted since the ACA was enacted, including automatic aggregate reductions of Medicare payments to providers of on average 2% per fiscal year as part of the federal budget sequestration under the Budget Control Act of 2011.

These reductions went into effect in April 2013 and, due to subsequent legislative amendments, will remain in effect until 2032 unless additional action is taken by Congress.

In addition, the Bipartisan Budget Act of 2018, among other things, amended the Medicare Act (as amended by the ACA) to increase the point-of-sale discounts that manufacturers must agree to offer under the Medicare Part D coverage discount program from 50% to 70% off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs being covered under Medicare Part D.

In the U.S., in recent years, the pharmaceutical industry has been a particular focus of healthcare reform efforts and has been significantly affected by major legislative, administrative and executive initiatives.

For example, the Inflation Reduction Act of 2022 (IRA) included a number of changes intended to address rising prescription drug prices in Medicare Parts B and D.

These changes included caps on Medicare Part D out-of-pocket costs, Medicare Part B and Part D drug price inflation rebates, a new Medicare Part D manufacturer discount drug program (replacing the previous coverage gap discount program) and a drug price negotiation program for certain high-spend Medicare Part B and D drugs.

The IRA has had and will likely continue to have a significant impact on the pharmaceutical industry.

Beyond the IRA, changes to Medicaid effective in 2024 eliminated the Medicaid rebate cap.

Additionally, changes to certain Medicare price reporting requirements for drugs beginning in 2026 will likely increase the administrative and compliance burden for manufacturers.

Recently, drug pricing and payment has been subject to a number of reform initiatives.

For example, President Trump issued an Executive Order in April 2025 with multiple directives aimed at lowering drug prices, including refining the Medicare drug price negotiation program established by the IRA;

accelerating competition for high-cost prescription drugs by accelerating approval of generics and biosimilars and facilitating the process for re-classifying prescription drugs as over-the-counter drugs;

and increasing drug importation.

In May 2025, President Trump issued another Executive Order that directed government agencies and officials to identify most-favored nation pricing targets for prescription drugs (and looked to pharmaceutical manufacturers to make significant progress towards delivering target prices to patients);

prevent foreign countries from disproportionately shifting the cost of global pharmaceutical research and development to the United States;

and facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers to sell their products to patients at the most-favored-nation price.

In the wake of the Executive Orders and related executive initiatives, a number of pharmaceutical manufacturers have announced direct-to-consumer offerings with discounted prices and/or reached agreement with the federal government regarding pricing for drugs, including prices for Medicaid drugs and newly launched products.

A website sponsored by the federal government that is anticipated to offer pharmaceutical direct-to-consumer channels has also been announced.

Federal agencies are developing new drug pricing pilot programs, such as a voluntary Medicaid initiative which would authorize the federal government to negotiate Medicaid supplemental rebates with participating manufacturers on behalf of state Medicaid programs, in exchange for standardized coverage criteria for participating manufacturer drugs, and the proposed Medicare Part B and Part D pilot models that, if finalized as proposed, would replace existing inflation-based Medicare rebates with rebates determined on the basis of international prices, for drugs and patients subject to the model.

Many of these reform initiatives would require additional legal and/or administrative action to implement and may be subject to legal challenge.

Other federal healthcare reform efforts or actions may affect access to healthcare coverage or the funding of health care benefits, although the full impact of such efforts or actions cannot be predicted.

For example, the Congressional Budget Office has estimated that Medicaid provisions in the 2025 budget

reconciliation legislation, including restrictions in eligibility and funding for Medicaid, as well as changes to the healthcare marketplace such as the elimination of certain subsidies, will increase the number of uninsured.

At the state level, individual states are increasingly implementing initiatives designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and measures to encourage importation from other countries and bulk purchasing.

For example, certain states have formed Prescription Drug Affordability Boards that assert authority to set reimbursement rates and/or drug pricing in the state.

States are also increasingly expanding or changing Medicaid supplemental rebate programs to secure additional rebates from manufacturers in exchange for drug coverage and to limit coverage of certain drugs for certain Medicaid patients or to all Medicaid patients.

These and other future state-level reform activities could negatively affect Medicaid coverage and reimbursement for our products.

Other recent government actions also may affect prices or payments for prescription drugs.

For example, the Trump Administration’s recently announced tariff on branded or patented drugs may adversely impact our ability to realize an adequate return on the sale of drug products (if approved) that are imported from abroad or manufactured using products or materials imported from abroad.

The timeline for implementation of this tariff has not yet been finalized.

As another example, the Budget Control Act of 2011, as amended, resulted in the imposition of reductions in Medicare (but not Medicaid) payments to providers in 2013 and will remain in effect into 2032 unless additional Congressional action is taken.

Any significant spending reductions affecting Medicare, Medicaid or other publicly funded or subsidized health programs that may be implemented and/or any significant taxes or fees that may be imposed on us could have an adverse impact on our results of operations.

Reform efforts have been and may continue to be subject to scrutiny and legal challenge, which increases uncertainty.

For example, the IRA drug price negotiation program has been challenged in litigation filed by various pharmaceutical manufacturers and industry groups.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several Congressional inquiries and proposed and enacted federal and state measures designed to, among other things, reduce the cost of prescription drugs, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drug products.

For example, in May 2019, CMS adopted a final rule allowing Medicare Advantage Plans the option to use step therapy for Part B drugs, permitting Medicare Part D plans to apply certain utilization controls to new starts of five of the six protected class drugs, and requiring the Explanation of Benefits for Part D beneficiaries to disclose drug price increases and lower cost therapeutic alternatives, which went into effect on January 1, 2021.

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

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

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

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

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

Notwithstanding the IRA, continued legislative and enforcement interest exists in the United States with respect to specialty drug pricing practices.

Specifically, we expect regulators to continue pushing for transparency to drug pricing, reducing the cost of prescription drugs under Medicare, reviewing the relationship between pricing and manufacturer patient programs, and reforming government program reimbursement methodologies for drugs.

Individual states in the U.S.

have also become increasingly active in passing legislation and implementing regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain drug access and marketing cost disclosure and transparency measures, and designed to encourage importation from other countries and bulk purchasing.

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

In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

This could reduce the ultimate demand for its drugs or put pressure on its drug pricing, which could negatively affect our business, financial condition, results of operations and prospects.

The nature and extent of future healthcare reforms cannot be predicted.

There is uncertainty regarding the nature or impact of any drug pricing or broader healthcare or other reform implemented at the federal or state level and the extent to which such action may be subject to litigation or other challenges.

Ongoing efforts to contain or reduced costs of healthcare and/or impose price controls may adversely affect the demand for our product candidates, if approved, and our ability to achieve or maintain profitability.

In the EU, similar political, economic and regulatory developments may affect our, or our collaborators’, ability to profitably commercialize our current or any future products.

In addition to continuing pressure on prices and cost containment measures, legislative developments at the EU or member state level may result in significant additional requirements or obstacles that may increase our operating costs.

The EU is undergoing a revision of its general pharmaceutical legislation, commonly known as the ‘Pharma Package’ to help ensure, among others, fair access to safe, effective and affordable medicines across the EU.

It also seeks to improve the competitiveness of the pharmaceutical industry by reducing regulatory burdens and strengthening supply chain security to prevent and manage shortages.

The legislative process for the EU Pharma Package began with the European Commission’s proposal in April 2023, followed by the development of positions by the European Parliament and the Council.

This culminated in Trilogue negotiations, with a political agreement reached in December 2025.

The agreed text now awaits formal adoption by both the Parliament and Council, after which it will be published in the Official Journal of the EU.

The new Directive and Regulation will then enter into force following a transition period of 18 to 36 months, ultimately modernizing EU pharmaceutical law to better support innovation, access, and supply.

In addition, the European Commission proposed in December

2025 the Biotech Act which seeks to strengthen the competitiveness of the biotechnology sector and facilitate the development and timely market entry of biotechnology innovations, while ensuring high standards for the protection of human health.

In international markets, reimbursement and healthcare payment systems vary significantly from country to country, and many countries have instituted price ceilings on specific products and therapies.

Our future products, if any, might not be considered clinically appropriate or justified for a specific indication, or cost-effective by third-party payors as reimbursement decisions typically require robust scientific evidence of effectiveness or national health systems and demonstration of therapeutic value to advance patient care.

An adequate level of reimbursement might not be available for such products and third-party payors’ reimbursement policies or national health systems might adversely affect our, or our collaborators’ ability to sell any future products profitably.

Other Government Regulation Outside of the United States

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The requirements and process governing the conduct of clinical trials, including requirements to conduct additional clinical trials, product licensing, safety reporting, post-authorization requirements, marketing and promotion, interactions with healthcare professionals, pricing and reimbursement may vary widely from country to country.

No action can be taken to market any product in a country until an appropriate approval application has been approved by the regulatory authorities in that country.

The current approval process varies from country to country, and the time spent in gaining approval varies from that required for FDA approval.

In certain countries, the sales price of a product must also be approved.

The pricing review period often begins after market approval is granted.

Even if a product is approved by a regulatory authority, satisfactory prices may not be approved for such product, which would make launch of such products commercially unfeasible in such countries.

No action can be taken to market any product in a country until an appropriate marketing approval has been granted by the regulatory authorities in that country.

The current approval process varies from country to country, and the time spent in gaining approval may vary from that required for FDA approval.

In certain countries, the sales price of a product must also be agreed or approved by payors or the respective national health systems before commercial launch.

The pricing review period typically commences following marketing approval.

Although a product may receive marketing approval from a regulatory authority, the price agreed upon during the review process may not be commercially sustainable to justify a commercial launch in those countries.

Regulation in the European Union

European Data Laws

European Data and Security Laws

The collection and use of personal health data and other personal data in the European Union ("EU") is governed by the provisions of the European General Data Protection Regulation (EU) 2016/679 (“GDPR”), which came into force in May 2018, and related data protection laws in individual EU Member States.

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EU Member States may also impose additional requirements in relation to health, genetic and biometric data through their national legislation.

As mentioned above, we depend on a network of service providers and partners-including clinical sites, contract research organizations, laboratories, data hosting providers, and other vendors-to support our operations and may share personal data with these organizations.

As a result, we implement contractual and technical controls, diligence, and monitoring of third parties that create, receive, maintain, or transmit personal data on our behalf, and we apply cross-border transfer mechanisms and safeguards as required by applicable

We also may rely on pseudonymization or anonymization, coding or limited data sets, along with contractual restrictions (including entering into data processing agreements as required under the GDPR) to manage privacy and data sharing in these contexts.

In addition, the GDPR imposes specific restrictions on the transfer of personal data to countries outside of the European Economic Area ("EEA") that are not considered by the European Commission ("EC") to provide an adequate level of data protection.

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companies participating in the framework.

With regard to the transfer of data from the EU to the United Kingdom (UK), personal data may freely flow from the EEA to the UK since the UK is deemed to have an adequate data protection level.

However, the adequacy decisions include a ‘sunset clause’ which entails that the decisions will automatically expire four years after their entry into force, unless renewed.

With regard to the transfer of data from the EU to the United Kingdom (UK), personal data may freely flow from the EEA to the UK since the EC deemed the UK to have an adequate data protection level, and these adequacy decisions were extended in December 2025, and are now valid until December 27, 2031.

Failure to comply with the requirements of the GDPR and the related national data protection laws of the EU Member States may result in significant monetary fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater, other administrative penalties and a number of criminal offenses for organizations and, in certain cases, their directors and officers, as well as civil liability claims from individuals whose personal data was processed.

Data protection authorities from the different EU Member States may still implement certain variations, enforce the GDPR and national data protection laws differently, and introduce additional national regulations and guidelines, which adds to the complexity of processing personal data in the EU.

Furthermore, there are specific requirements relating to processing health data from clinical trials, including public disclosure obligations provided in the EU Clinical Trials Regulation No.

536/2014 (“CTR”), European Medical Agency ("EMA") disclosure initiatives and voluntary commitments by industry.

Failure to comply with these obligations could lead to government enforcement actions and significant penalties against us, harm to our reputation, and adversely impact our business and operating results.

Furthermore, there are specific requirements relating to processing health data from clinical trials, including those related to public disclosure obligations provided in the EU Clinical Trials Regulation No.

536/2014 (“CTR”), European Medicines Agency ("EMA") data transparency initiatives and voluntary commitments by industry.

Failure to comply with these obligations could lead to considerable risks of government enforcement actions and significant penalties against us, harm to our reputation, and adversely impact our business performance and operating efficiency.

Additionally, following the UK’s withdrawal from the EU and the EEA, companies also have to comply with the UK’s data protection laws (including the UK GDPR (as defined in section 3(10) (as supplemented by section 205(4)) of the Data Protection Act 2018 (the “DPA 2018”)), the DPA 2018, and related data protection laws in the UK).

On June 19, 2025, the UK’s Data (Use and Access) Act (“DUAA”) took effect, which introduces certain relatively minor amendments to the data protection regime in the UK, and therefore creates slight divergences between the EU and UK data protection regimes.

Separate from the fines that can be imposed by the GDPR, the UK regime has the ability to fine up to the greater of £17.5 million or 4% of global turnover.

Companies are subject to specific transfer rules under the UK regime which broadly mirror the GDPR rules.

Companies are subject to specific data sharing and transfer rules under the UK regime which broadly mirror the GDPR rules.

We therefore also apply or rely on third parties to implement data sharing and cross-border transfer mechanisms and safeguards, as set out above, in these contexts.

On February 2, 2022, the UK Secretary of State laid before the UK Parliament the international data transfer agreement (“IDTA”) and the international data transfer addendum to the EC’s standard contractual clauses for international data transfers (Addendum) and a document setting out transitional provisions.

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With regard to the transfer of personal data from the UK to the United States, the UK government has adopted an adequacy decision for the United States, the UK-US Data Bridge, which came into force on October 12, 2023.

The UK-US Data Bridge recognizes the United States as offering an adequate level of data protection where the transfer is to a U.S.

The UK-US Data Bridge recognizes the United States as offering an adequate level of data protection

where the transfer is to a U.S.

company participating in the EU-US Data Privacy Framework and the UK Extension.

The EU Directive 2002/58/EC (as amended by Directive 2009/136/EC) (“ePrivacy Directive”) also imposes obligations on organizations operating in the EU.

The ePrivacy Directive is transposed into law in each EU member state and in the UK, so local transposition and enforcement can vary.

It contains a prohibition on accessing information on an individual’s device, such as through the use of cookies and other similar technologies, without informed consent, as well as rules on direct marketing.

On November 19, 2025, the EC published the Digital Omnibus Package (“Omnibus Proposals”), aimed at simplifying the EU’s digital regulatory framework.

The Omnibus Proposals would streamline the rules governing cookies and tracking technologies, potentially removing the requirement to obtain explicit consent for certain categories of cookies.

If adopted, these changes could ease compliance obligations around the use of cookies and tracking tools in the EU.

In the UK, the ePrivacy Directive was transposed into UK law as the Privacy and Electronic Communications (EC Directive) Regulations 2023 (“PECR”) which imposes equivalent requirements on UK operations.

The UK’s DUAA made certain limited amendments to PECR, most notably bringing its enforcement powers in line with the UK GDPR, so that monetary penalties under PECR can now reach the greater of £17.5 million or 4% of an organization’s total worldwide annual turnover.

The EU has also recently implemented a number of cybersecurity laws, some of which are applicable to the healthcare industry.

For example, the Network and Information Security Directive (Directive (EU) 2022/2555) applies to organizations operating in the EU in the healthcare sector and imposes stringent cybersecurity obligations on in-scope organizations, including in relation to supply chain management and incident reporting.

Drug and Biologic Development Process

Regardless of where they are conducted, all clinical trials included in applications for marketing authorization ("MA") for human medicines in the EU/EEA must have been carried out in accordance with EU regulations.

This means that clinical trials conducted in the EU/EEA have to comply with EU clinical trial legislation but also that clinical trials conducted outside the EU/EEA have to comply with ethical principles equivalent to those set out in the EEA, including adhering to international good clinical practice and the Declaration of Helsinki.

The conduct of clinical trials in the EU is governed by the CTR, which entered into force on January 31, 2022.

The CTR replaced the Clinical Trials Directive 2001/20/EC, (“Clinical Trials Directive”) and introduced a complete overhaul of the existing regulation of clinical trials for medicinal products in the EU.

Under the former regime, which will expire after a transition period of three years as outlined below in more detail, before a clinical trial can be initiated it must be approved in each EU member state where there is a site at which the clinical trial is to be conducted.

The approval must be obtained from two separate entities:

the National Competent Authority ("NCA") and one or more Ethics Committees.

The NCA of the EU Member States in which the clinical trial will be conducted must authorize the conduct of the trial, and the independent Ethics Committee must grant a positive opinion in relation to the conduct of the clinical trial in the relevant EU member state before the commencement of the trial.

Any substantial changes to the trial protocol or other information submitted with the clinical trial applications must be submitted to or approved by the relevant NCA and Ethics Committees.

Under the current regime all suspected unexpected serious adverse reactions to the investigated drug that occur during the clinical trial must be reported to the NCA and to the Ethics Committees of the EU member state where they occur.

A more unified procedure will apply under the new CTR.

A sponsor will be able to submit a single application for approval of a clinical trial through a centralized EU clinical trials portal (the Clinical Trials Information System or "CTIS”).

One national regulatory authority (the reporting EU member state proposed by the applicant) will take the lead in validating and evaluating the application consult and coordinate with the other concerned EU Member States.

If an application is rejected, it may be amended and resubmitted through the EU clinical trials portal.

If an approval is issued, the sponsor may start the clinical trial in all concerned EU Member States.

However, a concerned EU member state may in limited circumstances declare an “opt-out” from an approval and prevent the clinical trial from being conducted in such member state.

The CTR also aims to streamline and simplify the rules on safety reporting, and introduces enhanced transparency requirements such

as mandatory submission of a summary of the clinical trial results to the EU Database.

The CTR foresees a three-year transition period.

EU Member States will work in CTIS immediately after the system has gone live.

Since January 31, 2023, submission of initial clinical trial applications via CTIS is mandatory and CTIS serves as the single entry point for submission of clinical trial-related information and data.

By January 31, 2025, all ongoing trials approved under the former Clinical Trials Directive will need to comply with the CTR and have to be transitioned to CTIS.

On July 19, 2023, the EC published guidance concerning the steps to be taken in this transition.

This guidance provides, among other things, that (i) documentation which was previously assessed will not be reassessed, (ii) templates that were developed and endorsed by the EU Clinical Trials Expert Group to provide compliance with the CTR do not need to be updated and (iii) there is no need to retrospectively create a site suitability form, which are only necessary for new trial sites.

Under both the former regime and the new CTR, national laws, regulations, and the applicable GCP and GLP standards must also be respected during the conduct of the trials, including the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use ("ICH") guidelines on Good Clinical Practice and the ethical principles that have their origin in the Declaration of Helsinki.

The EU Clinical Trials Regulation, which replaced the Clinical Trials Directive and has been in force since 2022, aims to harmonize and streamline clinical trial processes across Member States through a centralized application system, the Clinical Trials Information System (CTIS), enabling sponsors to submit a single application for approval.

One national regulatory authority, designated as the reporting Member State, leads the validation and evaluation of applications in consultation with other concerned Member States.

Applications may be amended and resubmitted if rejected, and approved trials may commence in all relevant Member States, although individual states retain the right to “opt out” in limited circumstances.

The Regulation also simplifies safety reporting rules, introduces enhanced transparency requirements such as mandatory submission of trial results summaries to the EU Database.

Since January 31, 2023, all initial clinical trial applications must be submitted through CTIS which now serves as the single entry point for clinical trial-related information and data.

By January 31, 2025, all ongoing trials approved under the former Clinical Trials Directive must transition to CTIS and comply with the CTR.

On July 19, 2023, the EC published guidance for this transition, clarifying that previously assessed documentation will not be reassessed, EU-endorsed templates do not require updates, and site suitability forms are only needed for new trial sites.

Under the CTR, clinical trials must comply with national laws, regulations, and the applicable GCP and GLP standards, and the International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use ("ICH") guidelines on Good Clinical Practice, as well as the ethical principles outlined in the Declaration of Helsinki.

During the development of a medicinal product, the EMA and national regulators within the EU provide the opportunity for dialogue and guidance on the development program.

At the EMA level, this is usually done in the form of scientific advice, which is given by the Committee for Medicinal Products for Human Use (“CHMP”) on the recommendation of the Scientific Advice Working Party ("SAWP").

A fee is incurred with each scientific advice procedure, but is significantly reduced for designated orphan medicines.

A fee is incurred with each scientific

advice procedure, but is significantly reduced for designated orphan medicines.

Advice from the EMA is typically provided based on questions concerning, for example, quality (chemistry, manufacturing and controls testing), nonclinical testing and clinical studies, and pharmacovigilance plans and risk-management programs.

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In the EEA, after completion of all required clinical testing, pharmaceutical products may only be placed on the market after obtaining a MA.

To obtain an MA of a drug under European Union regulatory systems, an applicant can submit an MAA through, amongst others, a centralized or decentralized procedure.

To be used or sold in the UK, a drug must have an effective MA obtained by a centralized application through EMA or a national application.

National applications are governed by the Human Medicines Regulations (SI 2012/1916).

Applications are made electronically through the Medicines and Healthcare products Regulatory Agency (“MHRA”) Submissions Portal.

The process from application to authorizations generally takes up to 210 days, excluding time taken to provide any additional information or data required by the MHRA.

On August 30, 2023, the MHRA published detailed guidance on its recently announced new International Reliance Procedure (“IRP”) for MAAs.

The IRP applies since January 1, 2024 and replaces existing EU reliance procedures to apply for authorizations from seven international regulators (e.g.

Health Canada, Swiss Medic, FDA, EMA, among others).

The IRP allows medicinal products approved in other jurisdictions that meet certain criteria to undergo a fast-tracked MHRA review to obtain and/or update a MA in the UK.

Applicants can submit initial MAAs to the IRP but the procedure can also be used throughout the lifecycle of a product for post-authorization procedures including line extensions, variations and renewals.

To obtain an MA of a drug under European Union regulatory systems, an applicant can submit an MAA through, amongst others, the centralized or decentralized procedure as detailed below.

Centralized Authorization Procedure

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The centralized procedure is compulsory for specific medicinal products, including for medicines developed by means of certain biotechnological processes, products designated as orphan medicinal products, advanced therapy medicinal products (gene therapy, somatic cell therapy, or tissue engineered medicines) and medicinal products with a new active substance indicated for the treatment of certain diseases (HIV/AIDS, cancer, neurodegenerative disorders, diabetes, auto-immune and viral diseases).

For medicinal products containing a new active substance not yet authorized in the EEA before May 20, 2004 and indicated for the treatment of other diseases, medicinal products that constitute significant therapeutic, scientific or technical innovations or for which the grant of a MA

through the centralized procedure would be in the interest of public health at EU level, an applicant may voluntarily submit an application for a MA through the centralized procedure.

Under the centralized procedure, the Committee for Medicinal Products for Human Use ("CHMP") established at the EMA, is responsible for conducting the initial assessment of a drug.

The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing MA.

Under the centralized procedure, the timeframe for the evaluation of an MAA by the EMA’s CHMP is, in principle, 210 days from receipt of a valid MAA.

However, this timeline excludes clock stops, when additional written or oral information is to be provided by the applicant in response to questions asked by the CHMP, so the overall process typically takes a year or more, unless the application is eligible for an accelerated assessment.

For medicinal products containing a new active substance for indications that do not fall within the mandatory centralized procedure, they are eligible for centralized assessment if they constitute significant therapeutic, scientific or technical innovations or for which the grant of a MA through the centralized procedure would be in the interest of public health at EU level.

Under the centralized procedure, the Committee for Medicinal Products for Human Use ("CHMP") at the EMA is responsible for the initial assessment of an MAA.

The CHMP also oversees the scientific assessment of various post-authorization and maintenance activities, including the assessment of variations or extensions to an existing MA.

The standard timeframe for the evaluation of an MAA by the EMA’s CHMP is 210 days from receipt of a valid MAA, excluding clock-stops for the applicant to provide additional written or oral information in response to the CHMP's list of questions.

As a result, the overall process typically takes a year or more, unless the application is eligible for an accelerated assessment.

Accelerated evaluation might be granted by the CHMP in exceptional cases, when a medicinal product is expected to be of a major public health interest, particularly from the point of view of therapeutic innovation.

Upon request, the CHMP can reduce the time frame to 150 days if the applicant provides sufficient justification for an accelerated assessment.

The CHMP will provide a positive opinion regarding the application only if it meets certain quality, safety and efficacy requirements.

This opinion is then transmitted to the EC, which has the ultimate authority for granting MA within 67 days after receipt of the CHMP opinion.

Upon request, the CHMP may reduce the time frame to 150 days if the applicant provides sufficient justification for an accelerated assessment.

The CHMP will provide a positive opinion regarding the application only if it meets the required standards for quality, safety and efficacy.

This opinion is then transmitted to the EC, which has the ultimate authority for granting MA, ordinarily within 67 days after receipt of the CHMP opinion.

Decentralized Authorization Procedure

Medicines that fall outside the mandatory scope of the centralized procedure have three routes to authorization:

(i) they can be authorized under the centralized procedure if they concern a significant therapeutic, scientific or technical innovation, or if their authorization would be in the interest of public health;

(ii) they can be authorized under a decentralized procedure where an applicant applies for simultaneous authorization in more than one EU member state;

or (iii) they can be authorized in an EU member state in accordance with that state’s national procedures and then be authorized in other EU countries by a procedure whereby the countries concerned agree to recognize the validity of the original, national MA (mutual recognition procedure).

The decentralized procedure permits companies to file identical MA applications for a medicinal product to the competent authorities in various EU Member States simultaneously if such medicinal product has not received marketing approval in any EU Member State before.

This procedure is available for pharmaceutical products not falling within the mandatory scope of the centralized procedure.

The competent authority of a single EU Member State, the reference member state, is appointed to review the application and provide an assessment report.

The competent authorities of the other EU Member States, the concerned member states, are subsequently required to grant a MA for their territories on the basis of this assessment.

The only exception to this is where the competent authority of an EU Member State considers that there are concerns of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the EC, whose decision is binding for all EU Member States.

The decentralized procedure permits companies to file identical MAAs for a medicinal product not falling within the mandatory centralized procedure to the competent authorities in various EU Member States simultaneously if such medicinal product has not received marketing approval in any EU Member State.

In this procedure, the reference member state is appointed to lead the scientific review for agreement with the competent authorities of the other EU Member States concerned by the procedure, the concerned member states.

A member state may refuse to accept the assessment provided by the reference member state on grounds of a potential serious risk to public health that is defined as a situation where there is a significant probability that a serious hazard resulting from a human medicinal product in the context of its proposed use will affect public health.

Risk Management Plan

All new MAAs must include a Risk Management Plan (“RMP”) describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product.

RMPs are continually modified and updated throughout the lifetime of the medicine as new information becomes available.

RMPs are continually modified and updated throughout the lifetime of the medicine as new

information becomes available.

An updated RMP must be submitted:

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The regulatory authorities may also impose specific obligations as a condition of the MA.

Since October 20, 2023, all RMPs for centrally authorized products are published by the EMA, subject only to limited redactions.

All RMPs for centrally authorized products are published by the EMA, subject only to limited redactions.

MA Validity Period

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After these five years, the authorization may subsequently be renewed on the basis of a reevaluation of the risk-benefit balance.

Once renewed, the MA is valid for an unlimited period unless the EC or the national competent authority decides, on justified grounds relating to

pharmacovigilance, to proceed with only one additional five-year renewal.

Once renewed, the MA is valid for an unlimited period unless the EC or the national competent authority decides, on justified grounds relating to pharmacovigilance, to proceed with only one additional five-year renewal.

Applications for renewal must be made to the EMA at least nine months before the five-year period expires.

Any authorization which is not followed by the actual placing of the drug on the EU market (in case of centralized procedure) or on the market of the authorizing member state within three years after authorization ceases to be valid.

For the UK, the period of three years during which the drug has not been marketed in Great Britain will be restarted from the date of conversion to a Great Britain MA.

Conversion refers to the procedure by which, as of January 1, 2021, MAs granted on the basis of a centralized procedure in the EU are only valid in Northern Ireland but not in Great Britain, whereas, prior EU authorizations have all been automatically converted into UK MAs effective in Great Britain only.

The UK applies a rule, consistent with directly applicable EU law, requiring that nationally approved medicinal products must be placed on the market within three years from the date the marketing authorization is granted.

When the Medicines and Healthcare products Regulatory Agency (MHRA) becomes aware that the three-year period is approaching expiry, it will notify the marketing authorization holder in advance that the authorization will cease to be valid if the product is not marketed within the required timeframe.

The MHRA provides notification to the marketing authorization holder in both scenarios referenced previously:

first, where a product has held a marketing authorization for three years but has not been placed on the market at all;

and second, where a product was previously marketed but has subsequently not been placed on the market for a consecutive period of three years.

This process ensures compliance with regulatory requirements and maintains the integrity of the national medicines supply.

Following the UK's exit from the EU, the three-year “sunset clause” for centrally authorized products in the UK was effectively reset from the date of conversion (January 1, 2021).

This means that any product not placed on the market in Great Britain by early 2024 risked losing its validity unless the appropriate notification was made.

The Medicines and Healthcare products Regulatory Agency (MHRA) is responsible for managing this process for UK marketing authorizations (PLGB MAs), requiring marketing authorization holders to provide updates on the marketing status of their products.

The Windsor Framework agreement establishes that, effective from January 1, 2025, the Medicines and Healthcare products Regulatory Agency (MHRA) will serve as the sole regulatory authority for approving medicines for the entire UK market, encompassing both Northern Ireland and Great Britain.

This change replaces the previous system, where Northern Ireland followed EU rules and Great Britain was regulated independently by the MHRA.

Under the new arrangements, a unified UK-wide authorization process will apply, ensuring that medicines in Northern Ireland are regulated by the MHRA in the same manner as in Great Britain.

The primary focus of the Windsor Framework is to streamline regulatory procedures, eliminate the need for separate authorizations, and guarantee equal and timely access to medicines throughout the UK.

On the other hand, for the EU, in the case the drug has been marketed in the UK, the placing on the UK market before the end of the period starting when the UK left the EU on January 31, 2020 and ending on December 31, 2020 (the “Brexit Transition Period”) will be taken into account.

If, after the end of the Brexit Transition Period, the drug is not placed on any other market of the remaining member states of the EU, the three year period will start running from the last date the drug was placed on the UK market before the end of the Brexit Transition Period.

We do not have approved products that fall within the Brexit Transition Period.

Advanced Therapy Medicinal Products

In the EU, medicinal products, including advanced therapy medicinal products (“ATMPs") are subject to extensive pre- and post-market regulation by regulatory authorities at both the EU and national levels.

ATMPs comprise gene therapy products, somatic cell therapy products and tissue engineered products, which are genes, cells or tissues that have undergone substantial manipulation and that are administered to human beings in order to cure, diagnose or prevent diseases or regenerate, repair or replace a human tissue.

beings in order to cure, diagnose or prevent diseases or regenerate, repair or replace a human tissue.

Pursuant to Regulation (EC) No 1394/2007, the Committee for Advanced Therapies (“CAT”) is responsible in conjunction with the CHMP for the evaluation of ATMPs.

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In addition to the mandatory RMP, the holder of a MA for an ATMP must put in place and maintain a system to ensure that each individual product and its starting and raw materials, including all substances coming into contact with the cells or tissues it may contain, can be traced through the sourcing, manufacturing, packaging, storage, transport and delivery to the relevant healthcare institution where the product is used.

Exceptional Circumstances/Conditional Approval

Similar to accelerated approval regulations in the United States, conditional MAs can be granted in the EU in exceptional circumstances.

A conditional MA can be granted for medicinal products where, although comprehensive clinical data referring to the safety and efficacy of the medicinal product have not been supplied, a number of criteria are fulfilled:

(i) the benefit/risk balance of the product is positive, (ii) it is likely that the applicant will be in a position to provide the comprehensive clinical data, (iii) unmet medical needs will be fulfilled by the grant of the MA and (iv) the benefit to public health of the immediate availability on the market of the medicinal product concerned outweighs the risk inherent in the fact that additional data are still required.

Once a conditional MA has been granted, the MA holder must fulfil specific obligations within defined timelines.

A conditional MA is valid for one year and must be renewed annually, but it can be converted into a standard MA once the MA holder fulfills the obligations imposed and the complete data confirm that the medicine’s benefits continue to outweigh its risks.

Data and Market Exclusivity

As in the United States, it may be possible to obtain a period of market and / or data exclusivity in the EU that would have the effect of postponing the entry into the marketplace of a competitor’s generic, hybrid or biosimilar product (even if the pharmaceutical product has already received a MA) and prohibiting another

applicant from relying on the MA holder’s pharmacological, toxicological and clinical data in support of another MA for the purposes of submitting an application, obtaining MA or placing the product on the market.

Innovative medicinal products, referred to as New Chemical Entities ("NCEs"), approved in the EU qualify for eight years of data exclusivity and 10 years of marketing exclusivity.

An additional non-cumulative one-year period of marketing exclusivity is possible if during the data exclusivity period (the first eight years of the 10-year marketing exclusivity period), the MA holder obtains an authorization for one or more new therapeutic indications that are deemed to bring a significant clinical benefit compared to existing therapies.

The data exclusivity period begins on the date of the product’s first MA in the EU.

After eight years, a generic product application may be submitted and generic companies may rely on the MA holder’s data.

However, a generic product cannot launch until two years later (or a total of 10 years after the first MA in the EU of the innovator product), or three years later (or a total of 11 years after the first MA in the EU of the innovator product) if the MA holder obtains MA for a new indication with significant clinical benefit within the eight-year data exclusivity period.

Additionally, another non-cumulative one-year period of data exclusivity can be added to the eight years of data exclusivity where an application is made for a new indication for a well-established substance, provided that significant pre-clinical or clinical studies were carried out in relation to the new indication.

Another year of data exclusivity may be added to the eight years, where a change of classification of a pharmaceutical product has been authorized on the basis of significant pre-trial tests or clinical trials (when examining an application by another applicant for or holder of MA for a change of classification of the same substance the competent authority will not refer to the results of those tests or trials for one year after the initial change was authorized).

Products may not be granted data exclusivity since there is no guarantee that a product will be considered by the EU’s regulatory authorities to include an NCE.

Even if a compound is considered to be a NCE and the MA applicant is able to gain the prescribed period of data exclusivity, another company nevertheless could also market another version of the medicinal product if such company can complete a full MAA with their own complete database of pharmaceutical tests, preclinical studies and clinical trials and obtain MA of its product.

On April 26, 2023, the EC submitted a proposal for the reform of the European pharmaceutical legislation.

The current draft envisages e.g., a shortening of the periods of data exclusivity, however, there is currently neither a final version of this draft nor a date for its entry into force.

While the European Parliament adopted its approving position on the reform on April 10, 2024, no further required legislative steps have been taken since.

Exceptional Circumstances and Conditional Approval

Similar to accelerated approval regulations in the United States, EU pharmaceutical law provides two regulatory pathways to facilitate early patient access to medicines when comprehensive clinical data are not yet available:

conditional marketing authorization (“CMA”) and marketing authorization under exceptional circumstances (“MAUEC”).

Conditional marketing authorization is granted for medicines that address unmet medical needs, such as those for serious or rare diseases, where the immediate availability of the product offers significant benefit despite incomplete data.

Under this pathway, the applicant is required to submit additional clinical data within a specified timeframe to confirm the benefit-risk profile of the medicine.

The authorization is valid for one year and may be renewed annually until sufficient data are provided to support full authorization.

Marketing authorization under exceptional circumstances applies when it is not feasible to obtain comprehensive data, typically due to the rarity of the condition, limitations in scientific knowledge, or ethical constraints that make further studies impossible or inappropriate.

Instead of expecting future comprehensive data, this pathway relies on ongoing obligations such as enhanced safety monitoring and risk management plans.

The authorization remains valid as long as these obligations are satisfied.

The key difference between these pathways is that CMA anticipates the eventual completion of the data package, whereas MAUEC recognizes that full data cannot reasonably be obtained and instead relies on alternative measures to manage risk.

Both pathways require a positive benefit-risk assessment, address unmet medical needs, and ensure that the immediate benefit to patients outweighs the risks, but they differ in their expectations for future data collection and regulatory oversight.

Data and Marketing Exclusivity

Under EU pharmaceutical law, reference medicinal products are granted 8 years of data exclusivity, during which generic and biosimilar manufacturers cannot rely on the originator’s non-clinical and clinical data for regulatory approval.

This is followed by 2 years of marketing exclusivity, preventing generics and biosimilars from entering the market for a total of 10 years.

If, within the first 8 years, the reference product is approved for a new indication that provides significant clinical benefit, the exclusivity period may be extended to 11 years.

These rules ensure that generics and biosimilars cannot seek approval or enter the market until the exclusivity periods have expired, balancing incentives for innovation with future market competition.

A reference medicinal product for data and marketing exclusivity typically contains a new active substance and requires a full dossier, including pharmaceutical, non-clinical, and clinical trial data, for approval.

The European Medicines Agency (EMA), based on the scientific assessment and opinion of its Committee for Medicinal Products for Human Use (CHMP), determines whether a product contains a new active substance.

Data and marketing exclusivity do not prevent other companies from generating their own data through independent development to demonstrate the safety, quality, and efficacy of their own products.

Recent reforms introduced through the EU Pharma Package and the proposed Biotech Act bring significant changes, including streamlined authorization procedures, enhanced measures for access and affordability, stricter management of medicine shortages, strengthened post-market surveillance, and new requirements addressing environmental and ethical considerations.

These initiatives are designed to modernize and harmonize medicines regulation, facilitate patient access to innovative therapies, and provide robust oversight of emerging technologies across the EU.

The legislative process for the EU Pharma Package began with the European Commission’s proposal in April 2023, followed by the development of positions by the European Parliament and the Council.

This culminated in Trilogue negotiations, with a political agreement reached in December 2025.

The agreed text now awaits formal adoption by both the Parliament and Council, after which it will be published in the Official Journal of the EU.

Under the agreed EU Pharma Package, companies launching new medicines will benefit from eight years of data protection and one year of market exclusivity, with a possible additional year for innovative products meeting specific criteria.

Pediatric Development

In the EU, an approved PIP is required to be obtained by the company prior to any application for marketing authorization of a medicinal product based on a full dossier of pharmaceutical, non-clinical, and clinical data that has not yet been approved in the EU.

This requirement also applies to authorized products protected by a supplementary protection certificate (SPC) or a patent eligible for an SPC, when seeking authorization for new indications, pharmaceutical forms, or routes of administration.

A PIP is a research and development program designed to ensure that adequate data are generated to determine the conditions under which a medicinal product may be authorized for use in the pediatric population.

Companies developing new medicinal products must submit a PIP, along with a request for agreement, to the European Medicines Agency (EMA).

The EMA’s Pediatric Committee (PDCO) evaluates the PIP and provides an opinion, upon which the EMA issues a binding decision.

Companies are required to conduct pediatric clinical trials in accordance with the agreed PIP and within the specified timelines.

The resulting pediatric study data must accompany the application for authorization for it to be validated and approved by the EMA.

However, a PIP may include a deferral of the initiation or completion of some or all studies, based on scientific, technical, or public health grounds—for example, if it is appropriate to conduct adult studies first or if pediatric studies will take longer to complete.

A waiver from the PIP requirement may be granted if the product or product class is likely to be ineffective or is likely to be to be unsafe in the pediatric population, if the disease or condition occurs only in adults, or if the product does not offer significant therapeutic benefit over existing pediatric treatments.

Unless a waiver or deferral has been granted, the MAA must include the results of all pediatric clinical trials and all information collected in compliance with the approved PIP.

If a deferral is granted, the pediatric studies may be completed at a later date.

A “PIP Compliance Check” is conducted during the validation period of an MAA to confirm that pediatric product development is being conducted in accordance with the approved PIP at that time.

Medicinal products granted marketing authorization based on pediatric clinical trials conducted in accordance with an approved PIP are eligible for a six-month extension of the SPC (if in effect at the time of approval), or, for orphan medicinal products, a two-year extension of orphan market exclusivity, regardless of whether the pediatric data result in approval of a pediatric indication.

For applications resulting in the authorization of a new pediatric indication, a one-year extension of data and marketing exclusivity may be granted.

However, the regulatory framework prohibits double awards of these exclusivity rights for the same product.

In the UK, the MHRA has established a closely aligned process, frequently accepting agreed EU PIPs and decisions to streamline UK submissions.

However, the MHRA maintains UK-specific requirements, such as the need for a UK PIP for new medicines.

Following the Windsor Framework, MHRA is responsible for regulatory control of medicines (including pediatric medicines) for the entire UK market (England, Scotland, Wales, and Northern Ireland).

Orphan Designation and Exclusivity

The criteria for designating an orphan medicinal product in the EU are similar in principle to those in the U.S.

The EMA grants orphan drug designation if the medicinal product is intended for the diagnosis, prevention or treatment of a life-threatening or chronically debilitating condition affecting no more than five in 10,000 persons in the EU (prevalence criterion).

persons in the EU (prevalence criterion).

In addition, orphan drug designation can be granted if, for economic reasons, the medicinal product would be unlikely to be developed without incentives and if there is no other satisfactory method approved in the EU of diagnosing, preventing, or treating the condition, or if such a method exists, the proposed medicinal product is a significant benefit to patients affected by the condition.

An application for orphan drug designation (which is not a MA, as not all orphan-designated medicines reach the authorization application stage) must be submitted first before an application for MA of the medicinal product is submitted.

The applicant will receive a fee reduction for the MAA if the orphan drug designation has been granted, but not if the designation is still pending at the time the MA is submitted, and sponsors must submit an annual report to EMA summarizing the status of development of the medicine.

An application for orphan drug designation (which is not an MA, as not all orphan-designated medicines reach the authorization application stage) must be submitted before an application for MA of the medicinal product is submitted.

The applicant will receive a fee reduction for the MAA, as well as other fee-based regulatory procedures, if the orphan drug designation has been granted, but not if the designation is still pending at the time the MAA or application for other regulatory procedures is submitted, and sponsors must submit an annual report to EMA summarizing the status of development of the medicine.

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

Designated orphan medicines are eligible for conditional MA.

The EMA’s Committee for Orphan Medicinal Products (“COMP”) reassesses the orphan drug designation of a product in parallel with the review for a MA;

The EMA’s Committee for Orphan Medicinal Products (“COMP”) reassesses the orphan drug designation of a product in parallel with the review for an MA;

for a product to benefit from market exclusivity it must maintain its orphan drug designation at the time of MA review by the EMA and approval by the EC.

Additionally, any MA granted for an orphan medicinal product must only cover the therapeutic indication(s) that

are covered by the orphan drug designation.

Upon the grant of a MA, orphan drug designation provides up to ten years of market exclusivity in the orphan indication.

Additionally, any MA granted for an orphan medicinal product must only cover the therapeutic indication(s) that are covered by the orphan drug designation.

Upon the grant of an MA, orphan drug designation provides up to ten years of market exclusivity in the orphan indication.

During the 10-year period of market exclusivity, with a limited number of exceptions, the regulatory authorities of the EU Member States and the EMA may not accept applications for MA, accept an application to extend an existing MA or grant a MA for other similar medicinal products for the same therapeutic indication.

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Orphan exclusivity runs in parallel with normal rules on data exclusivity and market protection.

Additionally, a MA may be granted to a similar medicinal product (orphan or not) for the same or overlapping indication subject to certain requirements.

Additionally, an MA may be granted to a similar medicinal product (orphan or not) for the same or overlapping indication subject to certain requirements.

In the UK, following the post-Brexit transition period, a system for incentivizing the development of orphan medicines was introduced.

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The MHRA will review applications for orphan designation at the time of a MA, and will offer incentives, such as market exclusivity and full or partial refunds for MA fees to encourage the development of medicines in rare diseases.

Pediatric Development

In the EU, companies developing a new medicinal product are obligated to study their product in children and must therefore submit a PIP together with a request for agreement to the EMA.

The EMA issues a decision on the PIP based on an opinion of the EMA’s Pediatric Committee ("PDCO").

Companies must conduct pediatric clinical trials in accordance with the PIP approved by the EMA, unless a deferral (e.g.

until enough information to demonstrate its effectiveness and safety in adults is available) or waiver (e.g.

because the relevant disease or condition occurs only in adults) has been granted by the EMA.

The MAA for the medicinal product must include the results of all pediatric clinical trials performed and details of all information collected in compliance with the approved PIP, unless a waiver or a deferral has been granted, in which case the pediatric clinical trials may be completed at a later date.

Medicinal products that are granted an MA on the basis of the pediatric clinical trials conducted in accordance with the approved PIP are eligible for a six month extension of the protection under a supplementary protection certificate (if any is in effect at the time of approval), or, in the case of orphan medicinal products, a two year extension of the orphan market exclusivity.

This pediatric reward is subject to specific conditions and is not automatically available when data in compliance with the approved PIP are developed and submitted.

An approved PIP is also required when a MA holder wants to add a new indication, medicinal form or route of administration for a medicine that is already authorized and covered by intellectual property rights.

In the UK, the MHRA has published guidance on the procedures for UK Paediatric Investigation Plans ("PIPs") which, where possible, mirror the submission format and requirements of the EU system.

EU PIPs remain applicable for Northern Ireland and EU PIPs agreed by the EMA prior to January 1, 2021 have been adopted as UK PIPs.

PRIME Designation

In March 2016, the EMA launched an initiative to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist.

The Priority Medicines (“PRIME”) scheme is

intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure.

Products from small- and medium-sized enterprises may qualify for earlier entry into the PRIME scheme than larger companies on the basis of compelling non-clinical data and tolerability data from initial clinical trials.

Many benefits accrue to sponsors of product candidates with PRIME designation, including but not limited to, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and other development program elements, and potentially accelerated MAA assessment once a dossier has been submitted.

The EMA has established the Priority Medicines ("PRIME") scheme, an initiative to facilitate development of product candidates in indications, often rare, for which few or no therapies currently exist.

The PRIME scheme is intended to encourage drug development in areas of unmet medical need and provides accelerated assessment of products representing substantial innovation reviewed under the centralized procedure.

Products from small- and medium-sized enterprises may qualify for earlier entry into the PRIME scheme if compelling non-clinical data in a relevant model provide early evidence of promising activity or proof of principle.

Additionally, first-in-human studies should demonstrate adequate exposure to achieve the desired pharmacotherapeutic effects and tolerability.

Products accepted onto the PRIME scheme benefit from, among others, early and proactive regulatory dialogue with the EMA, frequent discussions on clinical trial designs and

other development program elements, and potentially accelerated MAA assessment once a dossier has been submitted.

Importantly, once a candidate medicine has been selected for the PRIME scheme, a dedicated contact point and rapporteur from the CHMP or CAT are appointed facilitating increased understanding of the product at EMA’s Committee level.

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Post-Approval Regulation

Similar to the United States, both MA holders and manufacturers of medicinal products are subject to comprehensive regulatory oversight by the EMA, the EC and/or the competent regulatory authorities of the EU Member States.

This oversight applies both before and after grant of manufacturing licenses and MAs.

It includes control of compliance with EU good manufacturing practices rules, manufacturing authorizations, pharmacovigilance rules and requirements governing advertising, promotion, sale, and distribution, recordkeeping, importing and exporting of medicinal products.

Failure by us or by any of our third-party partners, including suppliers, manufacturers and distributors to comply with EU laws and the related national laws of individual EU Member States governing the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of MA, statutory health insurance, bribery and anti-corruption or other applicable regulatory requirements may result in administrative, civil or criminal penalties.

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

Similar to the United States, both MA holders and manufacturers of medicinal products in the EU are subject to comprehensive regulatory oversight by the EMA, the EC and/or the competent regulatory authorities of the EU Member States.

The regulatory oversight covers every stage of the authorization process, from initial grant of an approval to ongoing monitoring of compliance with EU cGMPs, manufacturing authorizations, pharmacovigilance rules and requirements governing advertising, promotion, sale, and distribution, recordkeeping, importing and exporting of medicinal products.

These regulatory requirements are designed to ensure that the safety, quality, and efficacy standards of medicinal products are consistently maintained throughout their lifecycle.

Failure by us or by any of our third-party partners, including suppliers, manufacturers and distributors to comply with EU laws and the related national laws of individual EU Member States governing the conduct of clinical trials, manufacturing approval, MA of medicinal products and marketing of such products, both before and after grant of MA[, statutory health insurance], bribery and anti-corruption or other applicable regulatory requirements may result in administrative, civil or criminal sanctions.

These include delays or refusal to authorize the conduct of clinical trials or to grant MA, product withdrawals and recalls, product seizures, withdrawal or suspension of authorizations, restrictions on regulated activities such as production, distribution, manufacturing or clinical trials, operating restrictions, financial penalties.

The holder of MA for a medicinal product must also comply with EU pharmacovigilance legislation and its related regulations and guidelines, which entail many requirements for conducting pharmacovigilance, or the assessment and monitoring of the safety of medicinal products.

These pharmacovigilance rules can impose on holders of MAs the obligation to conduct a labor intensive collection of data regarding the risks and benefits of marketed medicinal products and to engage in ongoing assessments of those risks and benefits, including the possible requirement to conduct additional clinical studies or post-authorization safety studies to obtain further information on a medicine’s safety, or to measure the effectiveness of risk-management measures, which may be time-consuming and expensive and could impact our profitability.

MA holders must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, who is responsible for oversight of that system.

Key obligations include expedited reporting of suspected serious adverse reactions and submission of Periodic Safety Update Reports ("PSURs") in relation to medicinal products for which they hold MAs.

These pharmacovigilance rules require holders of MAs the obligation to develop a system capable of collecting, collating, assessing and reporting post-authorization data to monitor the ongoing risks and benefits of marketed medicinal products as well as the requirement to conduct additional clinical studies or post-authorization safety or efficacy studies to address uncertainties about the benefit-risk balance, or to measure the effectiveness of risk-management measures.

Such post-authorization measures may be time-consuming and expensive and could impact our profitability.

MA holders must establish and maintain a pharmacovigilance system designed to monitor the safety of authorized medicinal products and detect any change to their risk-benefit balance and appoint an individual qualified person for pharmacovigilance, who is responsible for the oversight of that system.

Key obligations include expedited reporting of unexpected serious adverse reactions and submission of Periodic Safety Update Reports ("PSURs") in relation to medicinal products for which they hold MAs.

The EMA reviews PSURs for medicinal products authorized through the centralized procedure.

If the EMA has concerns that the risk benefit profile of a product has varied, it can adopt an opinion advising that the existing MA for the product be suspended, withdrawn or varied.

The agency can advise that the MA holder be obliged to conduct post-authorization Phase IV safety studies.

If the EC agrees with the opinion, it can adopt a decision varying the existing MA.

Failure by the MA holder to fulfill the obligations for which the EC’s decision provides can undermine the ongoing validity of the MA.

More generally, non-compliance with pharmacovigilance obligations can lead to the variation, suspension or withdrawal of the MA for the product or imposition of financial penalties or other enforcement measures.

If the EMA, based on the scientific assessment conducted by its advisory committees, determines that the risk-benefit profile of a product has changed, it may issue an opinion recommending suspension, withdrawal, or variation of the existing MA.

The scientific opinion must be ratified by the EC in a legally binding decision.

If the MA holder fails to meet the obligations set out in the EC’s decision, the validity of the MA may be compromised.

For centrally authorized products, non-compliance with pharmacovigilance requirements can result in regulatory sanctions, including financial penalties imposed by the EC.

The manufacturing process for pharmaceutical products in the EU is highly regulated and regulators may shut down manufacturing facilities that they believe do not comply with regulations.

Manufacturing requires a manufacturing authorization, and the manufacturing authorization holder must comply with various requirements set out in the applicable EU laws, regulations and guidance, including Directive 2001/83/EC, Directive 2003/94/EC (repealed by Directive 2017/1572 on January 31, 2022), Regulation (EC) No 726/2004 and the European Commission Guidelines for Good Manufacturing Practice ("GMP").

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

Amendments or replacements of at least Directive 2001/83/EC and Regulation (EC) No 726/2004 are part of the reform proposal for European pharmaceutical legislation.

These requirements include compliance with EU cGMP standards when manufacturing pharmaceutical products and active pharmaceutical ingredients, including the manufacture of active pharmaceutical ingredients outside of the EU

with the intention to import the active pharmaceutical ingredients into the EU.

Amendments or replacements of at least Directive 2001/83/EC and Regulation (EC) No 726/2004 are part of the reform proposal for European pharmaceutical legislation under the EU Pharma Package, as deta.

Similarly, the distribution of pharmaceutical products into and within the EU is subject to compliance with the applicable EU laws, regulations and guidelines, including the requirement to hold appropriate authorizations for distribution granted by the competent authorities of the EU Member States.

The manufacturer or importer must have a qualified person who is responsible for certifying that each batch of product has been manufactured in accordance with GMP, before releasing the product for commercial distribution in the EU or for use in a clinical trial.

Manufacturing facilities are subject to periodic inspections by the competent authorities for compliance with GMP.

Sales and Marketing Regulations

The manufacturer or importer must have a qualified person who is responsible for certifying that each batch of product has been manufactured in accordance with GMP and the terms of a marketing authorization or clinical trial authorization, before releasing the product for commercial distribution in the EU or for use in a clinical trial.

Manufacturing facilities are subject to periodic inspections by the competent authorities for compliance with cGMPs.

Advertising and Promotion Regulations

The advertising and promotion of our products is also subject to EU laws concerning promotion of medicinal products, interactions with physicians, misleading and comparative advertising and unfair commercial practices.

In addition, other national legislation of individual EU Member States may apply to the advertising and promotion of medicinal products and may differ from one country to another.

These laws require that promotional materials and advertising in relation to medicinal products comply with the product’s SmPC as approved by the competent regulatory authorities.

These laws require that promotional materials and advertising in relation to medicinal products comply with the product’s Summary of Product Characteristics (SmPC) as approved by the competent regulatory authorities.

The SmPC is the document that provides information to physicians concerning the safe and effective use of the medicinal product.

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These laws may further limit or restrict the advertising and promotion of our products to the general public and may also impose limitations on its promotional activities with healthcare professionals.

EU regulation with regards to dispensing, sale and purchase of medicines has generally been preserved in the UK following Brexit, through the Human Medicines Regulations 2012.

However, organizations wishing to sell medicines online need to register with the MHRA.

Following Brexit, the requirements to display the common logo no longer apply to UK-based online sellers, except for those established in Northern Ireland.

EU regulation advertising and promotion of medicinal products is retained ed in the UK following Brexit as directly applicable EU law, by virtue of the EU (Withdrawal) Act the Human Medicines Regulations 2012 and The Human Medicines (Amendment etc.) (EU Exit) Regulations 2019.

Anti-Corruption Legislation

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Failure to comply with these requirements could result in reputational risk, public reprimands, administrative penalties, fines or imprisonment.

In the UK, the pharmaceutical sector is recognized as being particularly vulnerable to corrupt practices, some of which fall within the scope of the Bribery Act 2010.

Due to the Bribery Act 2010’s far-reaching territorial application, the potential penalized act does not have to occur in the UK to become within its scope.

In the UK, the pharmaceutical sector is recognized as being particularly vulnerable to corrupt practices.

The UK Bribery Act 2010 impacts pharmaceutical promotion through its interaction with the self-regulatory Code of Practice of the Association of the British Pharmaceutical Industry (ABPI).

The Serious Fraud Office (SFO) and Prescription Medicines Code of Practice Authority (PMCPA) work together to prevent bribes disguised as promotional activities, such as excessive hospitality offered to healthcare professionals for prescription medicines.

The ABPI Code, enforced by the PMCPA, serves as the primary self-regulatory safeguard, establishing strict rules on inducements and requiring transparency to prevent violations of both anti-bribery laws and industry codes, especially in relation to prescribing decisions.

Due to the Bribery Act 2010’s far-

reaching territorial application, the potential penalized act does not have to occur in the UK to become within its scope.

If the act or omission does not take place in the UK, but the person’s act or omission would constitute an offense if carried out there and the person has a close connection with the UK, an offense will still have been committed.

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The MHRA has since been consulting on future regulations for medicines and medical devices in the UK.

The MMDA supplements the UK Medical Devices Regulations 2002 (the “Regulations”), which are based on the EU Medical Devices Directive as amended to reflect the United Kingdom’s post-Brexit regulatory regime.

Notably, the Regulations do not include any of the revisions that have been made by the EU Medical Devices Regulation (EU) 2017/745, which has gained full application in all EU Member States since May 26, 2021 but is not applicable in the UK as “retained law”.

Additionally, the MHRA launched a comprehensive consultation in 2021 with proposals to amend the regulatory framework for medical devices in the United Kingdom.

The stated objectives of the proposals include expansion of the scope of the Regulations (for example, by expanding the in vitro diagnostic medical device definition to include software and other products, including products without an intended medical purpose but with similar functioning and risk profiles) and potentially through use of internationally recognized definitions (for example, by excluding products that contain viable biological substances and excluding food), remove trade barriers, further the availability of medical devices and improve the favorability of the UK market.

The consultation period closed on November 25, 2021 and on June 26, 2022, the MHRA published a response to its consultation, which sets out the proposed new UK regulatory framework for medical devices and in vitro diagnostic medical devices.

The proposals are intended to improve patient safety and public health through appropriate regulatory oversight, improve the traceability of medical devices, improve the regulation of the rules governing software and AI as medical devices and introduce alternative routes to market to ensure the UK aligns with any superior international best practices.

Core aspects of the new framework are expected to apply from July 1, 2025 with appropriate transitional measures and the introduction of secondary legislation.

To be used or sold in the UK, a drug must have a valid MA granted through the national application process.

National applications are governed by the Human Medicines Regulations (SI 2012/1916).

Applications are made electronically through the Medicines and Healthcare products Regulatory Agency (“MHRA”) Submissions Portal.

The MHRA operates fixed submission and assessment timetables for innovative medicines applications to facilitate consultation with its statutory advisory committee, the Commission on Human Medicines (CHM).

The MHRA assessment procedure for a marketing authorization application (MAA) involves an initial evaluation, including orphan designation if applicable, and consultation with expert advisory groups as needed.

By Day 90, applicants receive a consolidated request for information (RFI), which pauses the review clock until a complete response is submitted electronically.

Responses are assessed by Day 150, with further RFIs issued for minor issues or a CHM letter for major objections.

Each subsequent RFI requires a complete response within three months, and the clock is restarted upon submission.

Applicants may make written or oral representations to the CHM if major objections remain.

Final compliance checks are conducted once all issues are resolved, and the MHRA issues a grant or refusal letter specifying any conditions and the MA expiry date.

The entire assessment process is designed to be completed within 210 calendar days, excluding any procedural clock-stops for additional information representations.

Orphan drug designation is determined at the time of granting the MA.

In addition, the MHRA 150-day accelerated review is a specialized, fast-track national MA procedure designed for innovative medicines, new active substances, and biosimilars, aiming for a decision in 150 "clock-on" days rather than the standard 210.

It requires high-quality applications, typically involving one round of questions and a 60-day cool-down period for responses.

On August 30, 2023, the MHRA published detailed guidance on its recently announced new International Recognition Procedure (“IRP”) for MAAs.

The IRP applies from January 1, 2024 and replaces existing EU decision reliance procedure to apply for authorizations from seven international regulators (e.g.

Health Canada, Swissmedic, FDA and EMA, among others).

The IRP allows the MHRA to take into account the assessment and decision-making of the "Reference Regulators” to perform a targeted assessment of IRP applications but retain the authority to reject applications if the evidence provided is considered insufficiently robust.

There exist two recognition timetables for new IRP MAAs:

IRP Route A (60 days) and IRP Route B (110

days), both starting from validation.

Eligibility is determined via an applicant-completed form six weeks before submission.

Recognition A applies to applications with Reference Regulator approval within the past two years, with no clock-stop, but may revert to Recognition B if major objections arise.

IRP Route B covers Reference Regulatory approvals within the past ten years (or exceptionally older) and applies if specific criteria, such as conditional approvals, manufacturing changes, or UK-specific requirements, are met.

IRP Route B allows for consultation with the CHM and aligns with CHM dates for new active substances.

Applications not eligible for either timetable may be submitted as full national applications if MHRA requirements are met.

IRP can be used for post-authorization measures including line extensions, variations, and renewal applications.

There will be no pre-MA orphan designation.

Instead, the MHRA will review applications for orphan designation in parallel to the corresponding MA application.

The criteria are essentially the same as the EU rules, but have been tailored for the market, i.e., the prevalence of the condition in UK, rather than the EU, must not be more than five in 10,000.

Should an orphan designation be granted, the period or market exclusivity will be set from the date of first approval of the product in Great Britain.

For other countries outside of the EU, such as countries in Eastern Europe, Latin America or Asia, the requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country.

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

What changed 10-K

Item 1. Business