What changed in this filing

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Item 1. Business

2022-03-09 compared with 2021-03-11 · 1322 added, 1345 removed, 205 unchanged (93% of the section changed)

We are a New York City

based clinical-stage biopharmaceutical company committed to identifying and advancing transformative therapies for the treatment

of cancer and rare diseases with significant unmet needs.

We prioritize creativity, diverse perspectives, integrity and tenacity

to expedite our goal of bringing life-changing therapies to people with limited treatment options.

Our portfolio includes

two development programs utilizing TARA-002, an investigational cell therapy based on the broad immunopotentiator, OK-432, which

was originally granted marketing approval by the Japanese Ministry of Health and Welfare as an immunopotentiating cancer therapeutic

This cell therapy is currently approved in Japan for lymphatic malformations, or LMs, and multiple oncologic indications.

It has never been approved outside Japan and we have secured worldwide rights to the asset excluding Japan and Taiwan and have

begun to explore its use in rare and oncology indications.

We are developing TARA-002 in non-muscle invasive bladder cancer, or

NMIBC, and in LMs.

TARA-002’s

lead oncology program is in NMIBC, which is cancer found in the tissue that lines the inner surface of the bladder that has not

spread into the bladder muscle.

Bladder cancer is the sixth most common cancer in the United States, with NMIBC representing approximately

80% of bladder cancer diagnoses.

We are a New York City based

clinical-stage biopharmaceutical company committed to identifying and advancing transformative therapies for the treatment of cancer and

rare diseases.

We were founded on the principle of applying modern scientific, regulatory or manufacturing advancements to established

mechanisms in order to create new development opportunities.

We prioritize creativity, diverse perspectives, integrity and tenacity to

expedite our goal of bringing life-changing therapies to people with limited treatment options.

Our portfolio includes two

development programs utilizing TARA-002, an investigational cell therapy based on the broad immunopotentiator, OK-432, which was originally

granted marketing approval by the Japanese Ministry of Health and Welfare as an immunopotentiating cancer therapeutic agent.

therapy is currently approved in Japan and Taiwan for LMs, and multiple oncologic indications.

We have secured worldwide rights to the

asset excluding Japan and Taiwan and have begun to explore its use in oncology and rare disease indications.

TARA-002 was developed from

the same master cell bank of genetically distinct group A Streptococcus pyogenes as OK-432 (marketed as Picibanil® in Japan

and Taiwan by Chugai Pharmaceutical Co., Ltd., or Chugai Pharmaceutical).

We are currently developing TARA-002 in non-muscle invasive

bladder cancer, or NMIBC, and in LMs.

Our lead oncology program

is TARA-002 in NMIBC, which is cancer found in the tissue that lines the inner surface of the bladder that has not spread into the bladder

Bladder cancer is the sixth most common cancer in the United States, with NMIBC representing approximately 80% of bladder cancer

Approximately 65,000 patients are diagnosed with NMIBC in the United States each year.

new therapeutics have been approved in NMIBC since the 1990s and the current standard of care for NMIBC includes intravesical

Bacillus Calmette-Guerin, or BCG,.

Very few new therapeutics have been

approved for NMIBC since the 1990s and the current standard of care for NMIBC includes intravesical Bacillus Calmette–Guérin,

The mechanism of TARA- 002 is similar to BCG.

Both TARA-002 and BCG are intravesically administered

and elicit a type Th1 type immune response and locally activated generally similar array of cytokines and immune cells.

In August of 2020,

we announced constructive feedback following a pre-Investigational New Drug (pre-IND) interaction with the Office of Tissues and

Advanced Therapies division of the Center for Biologics Evaluation and Research, or CBER, at the FDA on a development plan for

TARA-002 in NMIBC.

Building on existing data from OK-432, and subject to the completion of non-clinical studies as well as acceptance

of the IND application, we plan to commence a Phase 1 clinical trial in late 2021 to assess the safety and tolerability of TARA-002

in patients with high grade NMIBC.

Our most advanced

clinical program is for LMs, which are rare, non-malignant cysts of the lymphatic vascular system that primarily form in the head

and neck region of children before the age of two.

In July 2020, the U.S.

Food and Drug Administration, or FDA, granted Rare Pediatric

Disease designation for TARA-002 for the treatment of LMs.

OK-432, the originator compound to TARA-002, has been the standard of

care in LMs in Japan for over 20 years.

In addition to the clinical experience in Japan, we have secured the rights to a dataset

from one of the largest ever conducted Phase 2 studies in lymphatic malformations, in which OK-432 was administered via a compassionate

use program led by the University of Iowa to over 400 pediatric and adult patients.

We have updated the initial IND that was submitted

by the University of Iowa and submitted the update and accompanying clarifying questions to the FDA Division of Vaccines and Related

Products Applications, or the Division, in connection with the IND for TARA-002 in LMs.

We plan to utilize the robust dataset for

OK-432 in LMs to support the potential filing of a Biological License Application (BLA) for TARA-002 in lymphatic LMs.

We are encouraged

by the progress to date and, at the FDA’s request, have submitted the full Clinical Study Report (CSR) of the randomized

Phase 2 study of OK-432 in LMs led by the University of Iowa.

We continue to prepare for a potential BLA filing in the second half

of 2021, or to initiate additional clinical work as required by FDA.

TARA-002 was developed

from the same master cell bank of genetically distinct group A Streptococcus pyogenes as OK-432 (marketed as Picibanil ®

Japan and Taiwan by Chugai Pharmaceutical Co., Ltd., or Chugai Pharmaceutical).

Following a pre-IND interaction with the Office

of Tissues and Advanced Therapies Division of the Center for Biologics Evaluation and Research, or CBER, the FDA agreed that we

have successfully demonstrated initial manufacturing comparability between TARA-002 and OK-432.

This initial comparability will

be confirmed by GMP scale batches, which are currently underway using the same release tests that have already been approved by

The third development

program in our portfolio is intravenous, or IV, Choline Chloride, an investigational phospholipid substrate replacement therapy

initially in development for patients receiving parenteral nutrition, or PN, who have intestinal failure associated liver disease,

IV Choline Chloride has been granted Orphan Drug Designation by the FDA for this indication and has also been granted

Fast Track Designation for the treatment of IFALD.

Following a positive end of Phase 2 meeting with the FDA, we received feedback

on the design of the studies necessary to complete the registration package for IV Choline Chloride for the treatment of IFALD,

including a Phase 1 pharmacokinetic study followed by Phase 3 trial.

Prior to initiating these clinical studies, we are currently

undertaking a prevalence study in partnership with a large home health organization in the United States to enhance understanding

of the PN patient population and we plan to use this information to determine the next steps for the development program.

of the study is to understand the presence/incidence of liver disease in this patient population.

Our fourth program, vonapanitase,

is a recombinant human elastase.

We are reviewing the research and preclinical and clinical data of vonapanitase and have not yet

determined whether to pursue further development of this product candidate in the future.

TARA-002 and BCG are intravesically administered and elicit both a Th1 type immune

response and locally activated generally similar array of cytokines and immune cells.

In October 2021, we announced

that the Office of Tissues and Advanced Therapies Division, or the OTAT Division, of the FDA’s Center for Biologics Evaluation and

Research, or CBER, cleared our Investigational New Drug, or IND, application for TARA-002 in NMIBC.

We have commenced a Phase 1 dose-finding,

open-label clinical trial to evaluate TARA-002 in treatment-naïve and treatment-experienced NMIBC patients with high-grade carcinoma

in situ and high-grade papillary tumors (Ta).

In the initial dose escalation phase of the trial, patients will receive six weekly intravesical

doses of TARA-002.

The primary objective of the trial is to evaluate the safety, tolerability and preliminary signs of anti-tumor activity

of TARA-002, with the goal of establishing a recommended dose for a future Phase 2 clinical trial.

We are also pursuing TARA-002

in LMs, which are rare, non-malignant cysts of the lymphatic vascular system that primarily form in the head and neck region of children

before the age of two.

In July 2020, the FDA granted Rare Pediatric Disease designation for TARA-002 for the treatment of LMs.

the originator therapy to TARA-002, has been the standard of care in LMs in Japan for over 20 years.

In addition to the clinical experience

in Japan, we have secured the rights to a dataset from one of the largest ever conducted Phase 2 trials in LMs, in which OK-432 was administered

via a compassionate use program led by the University of Iowa to over 500 pediatric and adult patients.

We have an IND for TARA-002 for

LMs with the Vaccines and Related Products Division of the FDA, or Vaccines Division, and in October 2021 we submitted the completed confirmatory,

current Good Manufacturing Practices (cGMP) comparability data for TARA-002 in relation to OK-432 as part of the IND.

We are engaged with

the FDA to align on a development plan for TARA-002 in LMs.

The third development program in our portfolio is intravenous, or IV,

Choline Chloride, an investigational phospholipid substrate replacement therapy initially in development for patients receiving parenteral

nutrition, or PN, who have intestinal failure associated liver disease, or IFALD.

IV Choline Chloride has been granted Orphan Drug Designation

by the FDA for this indication and has also been granted Fast Track Designation for the treatment of IFALD.

Following a positive end of

Phase 2 meeting with the FDA, we received feedback on a potential design of the studies necessary to complete a registration package for

IV Choline Chloride for the treatment of IFALD, including a Phase 1 pharmacokinetic, or PK, trial and a Phase 3 clinical trial.

to initiating these clinical trials, we are conducting a prevalence study to enhance understanding of the PN patient population and we

plan to use this information to determine the next steps for the development program.

In September 2021, we reported results of the retrospective

part of the prevalence study, which supported the significant unmet medical need in patients dependent on PN who have IFALD.

We are currently

conducting the prospective part of the study, which is a multi-center, cross-sectional observational study that will assess the prevalence

of choline deficiency, as well as cholestasis and steatosis, in patients dependent on PN.

We had been pursuing an additional program, Vonapanitase, a recombinant

human elastase.

Following a review of the research, preclinical, and clinical data of Vonapanitase, we have determined to cease further

development of this product candidate at this time.

We have devoted substantial

efforts to the development of these programs and do not have any approved products and have not generated any revenue from product

TARA-002 is in later stage development for LMs and has not yet been approved for use for treatment of LMs, NMIBC or any

other indications.

We do not expect to generate revenues prior to 2022, if ever.

To finance our current strategic plans, including

the conduct of ongoing and future clinical trials and further research and development costs, we will need to raise additional

efforts to the development of these programs and do not have any approved products and have not generated any revenue from product sales.

TARA-002 has not yet been approved for use for treatment of NMIBC, LMs or any other indications.

We do not expect to generate revenues

in the near-term, if ever.

To finance our current strategic plans, including the conduct of ongoing and future clinical trials and further

research and development costs, we will need to raise additional capital.

Our Product Candidate Pipeline

1 unchanged sentence

the current status of our product candidate pipeline:

* TARA-002 Granted Rare Pediatric Disease Designation for

the treatment of LMs.

* TARA-002 Granted Rare Pediatric

Disease Designation for the treatment of LMs.

OK-432 Granted Orphan Drug Designation by the U.S.

FDA for the treatment of LMs, which we believe is applicable

under established comparability.

** Granted Orphan Drug and Fast Track Designations by the

Phase 1 PK study to be conducted prior to commencing Phase

FDA for the treatment of LMs, which

we believe is applicable under established comparability.

Granted Orphan Drug and Fast Track Designations by the U.S.

Phase 1 PK study to be conducted in addition to Phase 3

Our Corporate Strategy:

We are an oncology and

rare disease company focused on identifying and acquiring or licensing de-risked assets and optimizing and/or accelerating their

Leveraging the drug development and commercialization experience of our management team, our goal is to build a leading

biopharmaceutical company focused on bringing life-saving therapies to patients with significant unmet needs.

Establish comparability of OK-432

Utilizing the same genetically

distinct Streptococcus pyogenes strain and proprietary manufacturing process used by Chugai Pharmaceutical to manufacture

OK-432 (marketed as Picibanil®

in Japan and Taiwan), we have produced development batches of TARA-002 and conducted comparability

studies using commercial OK-432 manufactured in Japan as a reference.

Following a pre-IND interaction with the Office of Tissues

and Advanced Therapies division of the Center for Biologics Evaluation and Research, or CBER, the FDA agreed that we had successfully

demonstrated initial manufacturing comparability between TARA-002 and OK-432.

This initial comparability will be confirmed by GMP

scale batches, which are currently underway using the same release tests that have already been accepted by the FDA.

Seek FDA approval for

the use of TARA-002 in Lymphatic Malformations

We plan to utilize the robust dataset for OK-432 in LMs to support

the potential filing of a Biological License Application (BLA) for TARA-002 in lymphatic LMs.

We are encouraged by the progress

to date and, at the FDA’s request, have submitted the full Clinical Study Report (CSR) of the randomized Phase 2 study of

OK-432 in LMs led by the University of Iowa.

We continue to prepare for a potential BLA filing in the second half of 2021, or to

initiate additional clinical work as required by FDA.

Pursue development of TARA-002 for

the treatment of non-muscle invasive bladder cancer (NMIBC).

Complete toxicology and MOA characterization & immunogenicity

studies in order to file an IND and initiate P1 study

We are developing TARA-002

for the treatment of non-muscle invasive bladder cancer, or NMIBC.

Building on existing safety and efficacy data from OK-432, and

subject to the completion of non-clinical studies, including toxicology and MOA characterization & immunogenicity studies,

which are currently underway, as well as acceptance of an Investigational New Drug, or IND, application, we plan to commence a

Phase 1 clinical trial in 2021 to assess the safety and tolerability of TARA-002 in patients with high grade NMIBC.

Further characterize the patient population

of IFALD to determine the appropriate strategy/path for IV Choline Chloride as a potential treatment option

Following a positive end

of Phase 2 meeting with the FDA, we received feedback on the design of the studies necessary to complete the registration package

for IV Choline Chloride for the treatment of IFALD, including a Phase 1 pharmacokinetic study followed by Phase 3 trial.

to initiating these clinical studies, we are currently undertaking a prevalence study in partnership with a very large home health

organization in the United States to enhance understanding of the PN patient population and plan to use this information to inform

the next steps for the development program.

Explore opportunities to expand our

The immunological activity

of TARA-002’s reference product, OK-432, has been effectively interrogated in patients in a long list of indications.

plan to carefully evaluate the case reports and the literature and perform initial in vitro characterization studies to

better understand the mechanism of action of TARA-002 and its potential activity in indications beyond LMs and NMIBC.

to engage with regulatory authorities outside of the US to explore the potential opportunities to bring TARA-002 to other geographies.

In addition, our leadership

team has a strong track record of licensing, acquiring and optimizing product candidates and we intend to leverage this skill to

identify opportunities for potential combination opportunities for TARA-002, particularly in NMIBC

We are an oncology and rare

disease company focused on identifying and acquiring or licensing de-risked assets and optimizing and/or accelerating their development.

Leveraging the drug development and commercialization experience of our management team, our goal is to build a leading biopharmaceutical

company focused on bringing life-saving therapies to patients with significant unmet needs.

Pursue development of TARA-002 for the

treatment of NMIBC and Advance Phase 1 clinical trial.

We have recently commenced a Phase 1 clinical trial to assess the safety

and tolerability of TARA-002 in patients with high-grade NMIBC, involving a dose escalation phase in which we are evaluating the safety,

tolerability and preliminary signs of anti-tumor activity of TARA-002 to determine dosage for a future Phase 2 clinical trial.

intend to further assess safety and preliminary signs of anti-tumor activity of TARA-002 in an expanded cohort of our Phase 1 clinical

Align with the FDA on a development plan

and regulatory pathway for TARA-002 in LMs.

Based on the robust dataset for the originator product OK-432 in LMs

and the full Clinical Study Report, or CSR of the randomized Phase 2 clinical trial of OK-432 in LMs led by the University of Iowa, we

are encouraged by the potential for TARA-002 to treat patients with LMs.

We are engaged with the FDA to align on a development plan for

TARA-002 in LMs.

Complete prospective prevalence study

of patients receiving PN and who have IFALD to refine a development pathway for IV Choline Chloride.

We are currently conducting

a prospective prevalence study to enhance understanding of the PN patient population and plan to use this information to inform the next

steps for the development program.

We received FDA feedback on a potential design of the studies necessary to complete a registration

package for IV Choline Chloride for the treatment of IFALD, including a Phase 1 pharmacokinetic study and a Phase 3 trial.

Explore opportunities to expand our pipeline

while maintaining a disciplined approach to investment.

We intend to explore the

use of TARA-002 in combination with other therapies and identify additional opportunities to develop TARA-002 in indications beyond NMIBC

We plan to conduct non-clinical experiments and modeling to better characterize the potential benefits of combination therapy

with TARA-002, particularly in NMIBC.

In addition, our leadership team has a strong track record of licensing, acquiring and optimizing

product candidates and we intend to leverage this skill set to identify opportunities for potential combination opportunities for TARA-002,

in NMIBC and other oncology indications.

The immunological activity of TARA-002’s originator product, OK-432, has been effectively

interrogated in patients in a long list of indications.

We plan to continue to carefully evaluate the case reports and the literature

and perform non-clinical characterization studies to better understand the mechanism of action of TARA-002 and its potential activity

in indications beyond NMIBC and LM in which there is unmet need.

TARA-002 / OK-432

1 unchanged sentence

is an investigational cell therapy developed from the master cell line of the same genetically distinct Streptococcus pyogenes

(group A, type 3) Su strain as OK-432, a the broad immunopotentiator (marketed as Picibanil®

in Japan and Taiwan by Chugai

Pharmaceutical Co., Ltd.

(Chugai Pharmaceutical)).

We expect to utilize the same regulatory starting materials as OK-432 and manufacture

TARA-002 using an updated version of the same proprietary processes used to manufacture OK-432.

Functionally, our lead product

We have designated this product as TARA-002 in order to differentiate the regulatory path in the U.S.

and other geographies

from that of OK-432 in Japan.

We entered into an agreement

with Chugai Pharmaceutical in June 2019 to support our development of TARA-002.

The agreement provides us with exclusive access

to certain materials and documents relating to OK-432 including the master cell bank of Streptococcus pyogenes used in the

manufacture of OK-432.

(group A, type 3) Su strain as OK-432, a broad immunopotentiator marketed as Picibanil® in Japan and Taiwan by Chugai Pharmaceutical.

We are using the same regulatory starting materials as OK-432 and manufacture TARA-002 using an updated version of the same proprietary

processes used to manufacture OK-432.

We have designated this product candidate as TARA-002 in order to differentiate the regulatory path

in the United States and other geographies from that of OK-432 in Japan.

We entered into an agreement with Chugai Pharmaceutical in June 2019,

as amended in July 2020, to support our development of TARA-002.

The agreement provides us with exclusive access to certain materials

and documents relating to OK-432 including the master cell bank of Streptococcus pyogenes used in the manufacturing of OK-432.

Additionally, the agreement provides technical support during a certain period.

We have utilized the materials,

proprietary manufacturing process and technical support provided by Chugai Pharmaceutical to produce TARA-002 at a GMP-compliant

facility in the United States.

Under the agreement with Chugai Pharmaceutical, we will have sole responsibility for the development

and commercialization of TARA-002 worldwide, excluding Japan and Taiwan.

On July 14, 2020, we entered into an amendment with Chugai

to the Chugai Pharmaceutical agreement.

This agreement is exclusive through June 17, 2030 or following any termination of the agreement

by either party.

We have utilized the materials, proprietary manufacturing

process and technical support provided by Chugai Pharmaceutical to produce TARA-002 at a cGMP-compliant facility in the United States.

Under the agreement with Chugai Pharmaceutical, we have sole responsibility for the development and commercialization of TARA-002 worldwide,

excluding Japan and Taiwan.

This agreement is exclusive through June 17, 2030 or following any termination of the agreement by either

In Japan, OK-432 is indicated

the treatment of lymphangiomas (lymphatic malformations);

the prolongation of survival time in patients with gastric cancer

(postoperative cases) or primary lung cancer in combination with chemotherapy;

and the reduction of cancerous pleural effusion

or ascites in patients with lung cancer or gastrointestinal cancer respectively, head and neck cancer (maxillary cancer, laryngeal

cancer, pharyngeal cancer, and tongue cancer) and thyroid cancer that are resistant to other drugs.

We plan to pursue development

of TARA-002 for the treatment of lymphatic malformations (LMs) and non-muscle invasive bladder cancer (NMIBC) initially in the

and plan to also seek approval in Europe and other regions in the future, and may also explore additional indications where

its utility as an immunostimulant has been hypothesized to be of therapeutic benefit.

the prolongation of survival time in patients with gastric cancer (postoperative

cases) or primary lung cancer in combination with chemotherapy;

and the reduction of cancerous pleural effusion or ascites in patients

with lung cancer or gastrointestinal cancer respectively, head and neck cancer (maxillary cancer, laryngeal cancer, pharyngeal cancer,

and tongue cancer) and thyroid cancer that are resistant to other drugs.

We plan to pursue development of TARA-002 for the treatment of NMIBC

and LMs initially in the United States, and plan to also seek approval in Europe and other regions in the future and may also explore

additional indications where its utility as an immunostimulant has been hypothesized to be of therapeutic benefit.

TARA-002 in NMIBC

Disease Overview

Bladder cancer is the

sixth most common cancer in the United States, with NMIBC representing approximately 80% of bladder cancer diagnoses.

cancer found in the tissue that lines the inner surface of the bladder that has not spread into the bladder muscle.

subtypes of NMIBC:

Ta (non-invasive papillary carcinoma), Tis (carcinoma in situ or CIS), and T1 (carcinoma invading the lamina

Among the types of NMIBC, Ta accounts for most NMIBC cases (70%), whereas T1 and CIS account for 20% and 10%, respectively.

Based on currently available

treatment data, we believe that there are approximately 30,000 incident cases of High-Grade NMIBC per year that would be appropriate

for treatment with TARA-002 in the U.S.

There are 65,000 incident cases of NMIBC in the U.S.

every year, of these, approximately

45% (~30,000) are made up of High-Grade tumor types that are considered higher risk, and therefore candidates for immunotherapies,

such as TARA-002).

In addition, NMIBC has one of the highest rates of recurrence with 3-year rate estimated at up to 80%.

Treatment for NMIBC is

typically targeted to reduce unresectable persistence, recurrence after resection, and to prevent disease progression to muscle-invasive

bladder cancer.

The initial treatment for NMIBC includes cystoscopy and complete transurethral resection of the bladder tumor (TURBT)

for papillary Ta or T1, or biopsy for CIS.

A single postoperative instillation of intravesical chemotherapy is recommended in patients

with low risk of progression, and for patients with intermediate and high-risk disease, a longer course of intravesical therapy

is administered.

The most efficacious intravesical agent is Bacillus Calmette-Guerin (BCG), a live attenuated form of Mycobacterium

BCG has been the subject of multiple supply shortages in the past decade due to the inability to meet demand to treat

the large population of patients with NMIBC resulting in strategies to conserve the use of the therapy.

There has been a significant

increase in bladder cancer recurrence and progression and an escalated number of patients who needed to be treated by cystectomy

have been reported.

As such, with the current BCG shortage and limited effective alternate therapies or dosing strategies, there

continues to be a significant unmet need for treatment options for patients with NMIBC.

Bladder cancer is the sixth

most common cancer in the United States, with NMIBC representing approximately 80% of bladder cancer diagnoses.

NMIBC is cancer found

in the tissue that lines the inner surface of the bladder that has not spread into the bladder muscle.

There are three subtypes of NMIBC:

Ta (non-invasive papillary carcinoma), Tis (carcinoma in situ or CIS), and T1 (carcinoma invading the lamina propria).

Among the types

of NMIBC, Ta accounts for most NMIBC cases (70%), whereas T1 and CIS account for 20% and 10%, respectively.

Based on currently available treatment data, we believe that there

are approximately 30,000 incident cases of High-Grade NMIBC per year that would be appropriate for treatment with TARA-002 in the United

There are 65,000 incident cases of NMIBC in the United States every year, of these, approximately 45% (approximately 30,000) are

made up of High-Grade tumor types that are considered higher risk, and therefore candidates for immunotherapies, such as TARA-002.

addition, NMIBC has one of the highest rates of recurrence with three-year rate estimated at up to 80%.

Treatment for NMIBC is typically targeted to reduce unresectable persistence,

recurrence after resection and to prevent disease progression to muscle-invasive bladder cancer.

The initial treatment for NMIBC includes

cystoscopy and complete transurethral resection of the bladder tumor (TURBT) for papillary Ta or T1, or biopsy for CIS.

A single postoperative

instillation of intravesical chemotherapy is recommended in patients with low risk of progression, and for patients with intermediate

and high-risk disease, a longer course of intravesical therapy is administered.

The most efficacious intravesical agent to date has been

BCG, a live attenuated form of Mycobacterium bovis .

BCG has been the subject of multiple supply shortages in the past decade due

to the inability to meet demand to treat the large population of patients with NMIBC, resulting in strategies to conserve the use of the

There has been a significant increase in bladder cancer recurrence and progression with an escalated number of patients who require

As such, with the current BCG shortage and limited effective alternate therapies or dosing strategies, there continues to

be a significant unmet need for treatment options for patients with NMIBC.

Manufacturing:

TARA-002 will be manufactured

We plan to manufacture TARA-002

using an equivalent, but modernized, proprietary manufacturing process as is used to produce OK-432 by Chugai Pharmaceutical, starting

with a master cell line propagated by us but utilizing the same genetically distinct strain of Streptococcus pyogenes (A

group, type 3) Su strain as OK-432.

We have contracted a contract development and manufacturing organization (CDMO), to manufacture

TARA-002 has received initial comparability to OK-432 from the FDA.

We are currently conducting confirmatory large scale

GMP manufacturing comparability, which are scheduled to be completed in 2021.

with a master cell line propagated by us but utilizing the same genetically distinct strain of Streptococcus pyogenes (A group,

type 3) Su strain as OK-432.

We have contracted a contract development and manufacturing organization, or CDMO, to manufacture TARA-002.

TARA-002 for the Treatment of Lymphatic

1 unchanged sentence

Disease Overview:

We are pursuing regulatory

approval for TARA-002 for the treatment of lymphatic malformations.

Lymphatic malformations are rare, non-malignant cystic masses

We are working to align with

the FDA on a regulatory pathway and development plan for TARA-002 for the treatment of LMs.

LMs are rare, non-malignant cystic masses

that primarily form in the head and neck region of children before the age of two.

The International Society for the Study of Vascular

Anomalies classifies LMs as either macrocystic, microcystic, or mixed.

Anomalies classifies LMs as either macrocystic, microcystic, or mixed cystic.

Macrocystic and microcystic LMs are differentiated by the

size of the fluid-containing portion of the malformation.

Macrocystic LMs are characteristically large, fluid-filled cysts with

a thin endothelial lining.

Macrocystic LMs are composed of cysts greater than 2 cm3 in size and present as a soft, fluid-filled

Macrocystic LMs are characteristically large, fluid-filled cysts with a thin

endothelial lining.

Macrocystic LMs are composed of cysts greater than 2 cubic centimeters in size and present as a soft, fluid-filled

swelling beneath normal or slightly discolored skin.

Macrocystic LMs are usually located in the antero-lateral cervical region

Macrocystic LMs are usually located in the antero-lateral cervical region of the

however, it is possible for this type of LM to originate in other areas of the body.

In contrast, microcystic LMs

have very limited internal space with a thick irregular endothelial lining.

Microcystic LMs are comprised of cysts less than 2

cm3 in size and are often composed of micro-lymphatic channels that integrate and infiltrate normal soft tissue.

Microcystic LMs

can involve both superficial and deep aspects including muscle and bone.

Microcystic LMs can thicken or swell causing enlargement

of surrounding soft tissue and bones and can be found on any area of the skin or mucous membrane.

Mixed LMs are comprised of varying

degrees of both macrocystic and microcystic LMs.

In contrast, microcystic LMs have very limited

internal space with a thick irregular endothelial lining.

Microcystic LMs are comprised of cysts less than 2 cubic centimeters in size

and are often composed of micro-lymphatic channels that integrate and infiltrate normal soft tissue.

Microcystic LMs can involve both

superficial and deep aspects including muscle and bone.

Microcystic LMs can thicken or swell causing enlargement of surrounding soft tissue

and bones and can be found on any area of the skin or mucous membrane.

Mixed cystic LMs are comprised of varying degrees of both macrocystic

and microcystic LMs.

While the exact prevalence

of LMs is not known, in the United States, the condition is thought to be present in approximately one in every 4,000 live births

and we believe there are approximately 1,400-1,800 LM cases per year.

of LMs is not known, in the United States, the condition is thought to be present in approximately one in every 4,000 live births and

we believe there are approximately 1,400-1,800 LM cases per year.

Outside of Japan and Taiwan,

2 unchanged sentences

pharmacotherapies for LMs, except in Japan and Taiwan where OK-432 is approved.

In these countries, OK-432 has been the standard

of care for LMs for over 25 years.

Treatment of LMs varies

depending on the symptoms and complications that present themselves.

The standard of care outside Japan and Taiwan for the treatment

of LMs is either a partial or complete surgical excision of the cysts.

While surgery is the standard approach to the treatment

of LMs in the head and neck, the region is a difficult area to operate in because of the large number of important anatomical structures

Major venous and arterial trunks travel through the neck, as do important nerves.

Surgery on such malformations frequently

results in high rates of recurrence and complications including life-long chronic conditions, such as damage to nerves and other

important structures of the head and neck.

In these countries, OK-432 has been the standard of care

for LMs for over 25 years.

Treatment of LMs varies depending

on the symptoms and complications that present themselves.

The standard of care outside Japan and Taiwan for the treatment of LMs is either

a partial or complete surgical excision of the cysts.

While surgery is the standard approach to the treatment of LMs in the head and neck,

the region is a difficult area to operate on because of the large number of important anatomical structures in the area.

and arterial trunks travel through the neck, as do important nerves.

Surgery on such malformations frequently results in high rates of

recurrence and complications including life-long chronic conditions, such as damage to nerves and other important structures of the head

Clinical Development

When OK-432 is administered

locally for LMs, it is hypothesized that innate immune cells within the cyst are activated and produce a strong immune cascade.

Neutrophils and monocytes infiltrate the cyst and various cytokines, including interleukins IL-6, IL-8, IL-12, interferon (IFN)-gamma,

tumor necrosis factor (TNF)-alpha, and vascular endothelial growth factor (VEGF) are secreted by immune cells within the cyst in

response to the presence of OK-432.

In concert, these immune activities induce a strong local inflammatory reaction in the cyst

wall, resulting in fluid drainage, shrinkage and fibrotic adhesion of the cyst.

randomized, phase 2 clinical trial led by the University of Iowa studied the use of OK-432 in patients with LM from 1998 to 2005.

Most eligible subjects were between 6 months and 18 years of age with macrocystic or mixed macrocystic-microcystic LMs (with ≥

50% macrocytic disease) of the head and/or neck.

There were three treatment groups:

immediate treatment (ITG), delayed treatment

(DTG), and open label treatment group.

The immediate treatment group received treatment with

OK-432 upon diagnosis.

The delayed treatment group received OK-432 treatment following a six-month observation period;

the cross-over

design was intended to investigate spontaneous resolution.

The open-label treatment group included infants younger than six months

of age, adults older than 18 years of age, patients with LMs involving sites other than the head and neck (such as the axilla,

thorax, and extremities), and patients treated on an emergent basis.

When OK-432 is administered locally for LMs, it is hypothesized that

innate immune cells within the cyst are activated and produce a strong immune cascade.

Neutrophils and monocytes infiltrate the cyst and

various cytokines, including interleukins IL-6, IL-8, IL-12, interferon, or IFN, -gamma, tumor necrosis factor, or TNF-alpha, and vascular

endothelial growth factor (VEGF) are secreted by immune cells within the cyst in response to the presence of OK-432.

In concert, these

immune activities induce a strong local inflammatory reaction in the cyst wall, resulting in fluid drainage, shrinkage and fibrotic adhesion

A randomized, phase 2 clinical

trial led by the University of Iowa studied the use of OK-432 in patients with LM from 1998 to 2005.

Most eligible subjects were between

6 months and 18 years of age with macrocystic or mixed cystic LMs (with ≥ 50% macrocytic disease) of the head and/or neck.

three treatment groups:

immediate treatment (ITG), delayed treatment (DTG), and open label treatment group.

The immediate treatment group

received treatment with OK-432 upon diagnosis.

The delayed treatment group received OK-432 treatment following a six-month observation

the cross-over design was intended to investigate spontaneous resolution.

The open-label treatment group included infants younger

than six months of age, adults older than 18 years of age, patients with LMs involving sites other than the head and neck (such as the

axilla, thorax, and extremities), and patients treated on an emergent basis.

The open label treatment group were treated immediately with

Response to therapy was measured by quantitating change in lesion size.

Clinical success was defined as a complete (90%

to 100%) or substantial (60% to 89%) response to treatment based on radiographically confirmed shrinkage in lesions.

Clinical success was defined as a complete (90% to 100%)

or substantial (60% to 89%) response to treatment based on radiographically confirmed shrinkage in lesions.

Results presented in this

report were based on a retrospective analysis of source verified data that included the full dataset of subjects enrolled in the

P2 randomized study between January 1998 and August 2005, including data in the published study (Smith et al.

2009) which included

report were based on a retrospective analysis of source verified data that included the full dataset of subjects enrolled in the Phase

2 randomized clinical trial between January 1998 and August 2005, including data in the published study (Smith et al.

2009) that included

subjects enrolled between January 1998 and November 2004.

Overall, 310 subjects

were enrolled with intent to treat:

246 subjects were randomized to the immediate (ITG, N=171) and delayed (DTG, N=75) treatment

Overall, 310 subjects were

enrolled with intent to treat:

246 subjects were randomized to the immediate (ITG, N=171) and delayed (DTG, N=75) treatment groups;

subjects were nonrandomized and assigned to the open-label group.

Analysis of the primary efficacy endpoint (N=150)

demonstrated clinical success (complete and/or substantial response) in 69% of patients in the ITG 6 months after enrollment, while

7.5% of patients in the DTG experienced spontaneous regression of a LM during this time interval (p < 0.0001)).

When the results

were analyzed by lesion type across all treatment groups, a successful outcome was observed in 84% and 60% of patients with macrocystic

and mixed macrocystic-microcystic LM, respectively.

None of the patients with microcystic LM demonstrated clinical success to OK-432

The results of the retrospective analysis were consistent with the results observed in the original analysis (Smith et

demonstrates that the primary endpoint

was met showing that 69% of patients in the immediate treatment group had a complete or substantial response to OK-432 while 7.5%

of patients in the delayed treatment group had a complete or substantial response after six months of observation and before treatment.

ǂ Clinical Success was defined as complete or substantial

** Results were analyzed by lesion type across all treatment

illustrates that patients with

radiographically confirmed macrocystic lesions had the greatest likelihood of clinical success and in those patients with mixed

legions, clinical success was also achieved.

Success was defined as complete or substantial response

data prior to dosing with OK-432.

After dosing, the clinical success rate was 66%, which was not statistically different from

the Immediate Treatment Group

were analyzed by lesion type across all treatment groups

Analysis of the primary efficacy endpoint (N=150) demonstrated clinical

success (complete and/or substantial response) in 69% of patients in the ITG 6 months after enrollment, while 7.5% of patients in the

DTG experienced spontaneous regression of a LM during this time interval (p < 0.0001)).

When the results were analyzed by lesion type

across all treatment groups, a successful outcome was observed in 84% and 60% of patients with macrocystic and mixed cystic LM, respectively.

None of the patients with microcystic LM demonstrated clinical success with OK-432 therapy.

The results of the retrospective analysis

were consistent with the results observed in the original analysis (Smith et al.

the primary endpoint was met with 69%

of patients in the immediate treatment group had a complete or substantial response to OK-432 while 7.5% of patients in the delayed treatment

group had a complete or substantial response after six months of observation and before treatment.

ǂ Clinical Success was defined as complete or substantial response.

* Reflects data prior to dosing with OK-432.

After dosing, the

clinical success rate was 66%, which was not statistically different from the ITG.

patients with radiographically confirmed

macrocystic lesions had the greatest likelihood of clinical success and in those patients with mixed lesions, clinical success was also

ǂ Clinical Success was defined as complete or substantial response.

* Reflects data prior to dosing with OK-432.

After dosing, the

clinical success rate was 66%, which was not statistically different from the ITG.

** Results were analyzed by lesion type across all treatment groups.

Safety Profile

The most common adverse events with treatment

were local injection site reactions, fever, fatigue, decreased appetite, with resolution within a few days.

Treatment emergent

serious adverse events (defined as any SAE occurring or worsening on or after the first dose of study drug and within 35 days after

the last dose of study drug) associated with OK-432 treatment were reported in 4.1% of patients, with the most severe events being

The most common adverse events with treatment were local injection

site reactions, fever, fatigue, and decreased appetite, with resolution within two weeks.

Treatment emergent serious adverse events or

SAEs, (treatment emergent SAEs are defined as any SAE occurring or worsening on or after the first dose of study drug and within 35 days

after the last dose of study drug) associated with OK-432 treatment were reported in 4.1% of patients, with the most severe events being

airway obstruction and facial paralysis due to massive swelling post-injection that required tracheostomy and hospitalization.

Both of these events were reported as resolved

The safety findings from the Sponsor-conducted

retrospective analysis are consistent with the original analysis reported in Smith et al.

2009, and with safety data in published

studies in approximately 865 patients with LMs after treatment with OK-432.

these events were reported as resolved.

The safety findings from the sponsor-conducted retrospective analysis

are consistent with the original analysis reported in Smith et al.

2009, and with safety data in published studies in approximately 865

patients with LMs after treatment with OK-432.

Preclinical Development:

A comprehensive preclinical

development program for OK-432, including in vitro and in vivo pharmacology and toxicology studies, was conducted

by Chugai Pharmaceutical to support the filing of a new drug application with the Japan Pharmaceuticals and Medical Devices Agency.

We plan to discuss with the FDA the ability to rely on these studies for the submission of a BLA for TARA-002.

A comprehensive preclinical development program for OK-432, including

in vitro and in vivo pharmacology and toxicology studies, was conducted by Chugai Pharmaceutical to support the filing of

a NDA with the Japan Pharmaceuticals and Medical Devices Agency.

We believe these studies may help inform the design of a development

plan for TARA-002 in LMs.

Regulatory Interactions:

In July 2020, the U.S.

Food and Drug Administration, or FDA, granted Rare Pediatric Disease designation for TARA-002 for the treatment of LMs.

grants Rare Pediatric Disease designation for serious diseases that primarily affect children ages 18 years or younger and fewer

than 200,000 persons in the United States.

Under the FDA’s Rare Pediatric Disease Priority Review Voucher program, a sponsor who

receives an approval of a new drug application or biologics license application for a product for the prevention or treatment of

a rare pediatric disease may be eligible for a voucher, which can be redeemed to obtain priority review for any subsequent marketing

application or may be sold or transferred.

We plan to utilize

the robust dataset for OK-432 in LMs to support the potential filing of a Biological License Application (BLA) for TARA-002 in

lymphatic LMs.

We are encouraged by the progress to date and, at the FDA’s request, have submitted the full Clinical Study

Report (CSR) of the randomized Phase 2 study of OK-432 in LMs led by the University of Iowa.

We continue to prepare for a potential

BLA filing in the second half of 2021, or to initiate additional clinical work as required by FDA.

In July 2020, the FDA granted Rare Pediatric Disease designation for

TARA-002 for the treatment of LMs.

The FDA grants Rare Pediatric Disease designation for serious diseases that primarily affect children

ages 18 years or younger and fewer than 200,000 persons in the United States.

Under the FDA’s Rare Pediatric Disease Priority Review Voucher

program, a sponsor who receives an approval of a NDA or BLA for a product for the prevention or treatment of a rare pediatric disease

may be eligible for a voucher, which can be redeemed to obtain priority review for any subsequent marketing application or may be sold

or transferred.

We are encouraged by the robust dataset for OK-432 in LMs, which will

inform our development of TARA-002 and which we believe could help support the potential filing of a BLA for TARA-002 in LMs.

request, we submitted the full CSR of the randomized Phase 2 clinical trial of OK-432 in LMs led by the University of Iowa to our open

We are engaged with the FDA to align on a development plan for TARA-002 in LMs and subsequently initiate a clinical trial in LM patients.

Manufacturing Plans:

TARA-002 will be manufactured

using an equivalent, but modernized, proprietary manufacturing process as is used to produce OK-432 by Chugai Pharmaceutical.

will be manufactured using an equivalent, but modernized, proprietary manufacturing process as is used to produce OK-432 by Chugai Pharmaceutical.

Starting with a master cell line propagated by us but utilizing the same genetically distinct strain of Streptococcus pyogenes

(A group, type 3) Su strain as OK-432.

We have contracted a contract development and manufacturing organization (CDMO), to

manufacture TARA-002.

TARA-002 has received initial comparability to OK-432 from the FDA.

We are currently conducting confirmatory

large scale GMP manufacturing comparability, which are scheduled to be completed in 2021.

IV Choline Chloride for the treatment of Intestinal

Failure Associated Liver Disease

IV Choline Chloride is

an intravenous (IV) substrate replacement therapy initially in development for patients receiving parenteral (typically intravenous)

nutrition (PN) who have intestinal failure associated liver disease (IFALD).

Choline is a known important

substrate for phospholipids that are critical for healthy liver function.

Because patients receiving PN cannot sufficiently absorb

adequate levels of choline and no available PN components contain sufficient amounts of choline to correct this deficit, they often

experience a prolonged progression to hepatic failure and death, with the only known intervention being a dual small bowel / liver

We have contracted a CDMO, to manufacture TARA-002.

IV Choline Chloride

for the treatment of Intestinal Failure Associated Liver Disease

Choline Chloride is an IV substrate replacement therapy initially in development for patients receiving PN who have IFALD.

is a known important substrate for phospholipids that are critical for healthy liver function.

Because patients receiving PN cannot sufficiently

absorb adequate levels of choline and no available PN components contain sufficient amounts of choline to correct this deficit, they often

experience a prolonged progression to hepatic failure and death, with the only known intervention being a dual small bowel / liver transplant.

If approved, IV Choline Chloride would be the first approved therapy for IFALD.

It has been granted Orphan Drug Designations

(ODDs) by the FDA for the treatment of IFALD and the prevention of choline deficiency in PN patients.

We are currently undertaking

a prevalence study in partnership with a very large home health organization in the United States to enhance understanding of the

PN patient population.

We have entered into a

license agreement with Dr.

Alan Buchman for exclusive rights to the IND, ODDs and other regulatory assets related to IV Choline

Chloride, as well as exclusive rights to the data from previously conducted phase 1 and phase 2 clinical trials led by Dr.

The results of a randomized,

controlled, phase 2 clinical trial demonstrated that treatment with IV Choline Chloride resulted in normalization of plasma-free

choline concentrations, improvement of hepatic steatosis, and a clinically meaningful and statistically significant improvement

in cholestasis in patients dependent on PN.

We had an end of phase 2 meeting with the FDA

in November 2018 and received the FDA’s support for the design of studies necessary to complete the registration package

for IV Choline Chloride for the treatment of IFALD, including a Phase 1 pharmacokinetic study followed by Phase 3 trial.

It has been granted ODD by the FDA for the treatment of

IFALD and the prevention of choline deficiency in PN patients.

We are currently undertaking a multinational prevalence study to enhance

understanding of the PN patient population.

We have entered into a license agreement with Dr.

Alan Buchman for

exclusive rights to the IND, ODD and other regulatory assets related to IV Choline Chloride, as well as exclusive rights to the data from

previously conducted Phase 1 and Phase 2 clinical trials led by Dr.

results of a randomized, controlled, Phase 2 clinical trial demonstrated that treatment with IV Choline Chloride resulted in normalization

of plasma-free choline concentrations, improvement of hepatic steatosis, and statistically significant improvement in cholestasis in patients

dependent on PN.

We had an end of Phase 2 meeting with the FDA in November 2018 and

received the FDA’s feedback on the design of studies necessary to complete the registration package for IV Choline Chloride for

the treatment of IFALD, including a Phase 1 pharmacokinetic study and Phase 3 trial.

Disease Overview:

Intestinal Failure Associated

Liver Disease or IFALD is a rare hepatic/metabolic disease.

IFALD, which occurs in patients dependent upon PN, is characterized

by choline deficiency, hepatic steatosis, cholestasis, and rapid progression of liver disease through to hepatic failure and death,

in the absence of intestine-liver transplant.

IFALD carries a relatively poor prognosis, with a 15-34% death rate within one to

When IFALD presents in children, mortality is even higher, with studies reporting death rates of 23-40% within 18 months.

is a rare hepatic/metabolic disease.

IFALD, which occurs in patients dependent upon PN, is characterized by choline deficiency, hepatic

steatosis, cholestasis, and rapid progression of liver disease through to hepatic failure and death, in the absence of intestine-liver

IFALD carries a relatively poor prognosis, with a 15-34% death rate within one to four years.

When IFALD presents in children,

mortality is even higher, with studies reporting death rates of 23-40% within 18 months.

A patient is considered to have IFALD if she/he:

1 unchanged sentence

has evidence of steatosis, determined by imaging techniques or histologic assessments;

has evidence of cholestasis (e.g., elevated alkaline phosphatase (ALP), elevated bilirubin and/or histology);

may have evidence of ongoing, progressive liver injury on the basis of multiple abnormal liver function tests, in conjunction with findings of fibrosis, cirrhosis, and/or end-stage liver disease (ESLD).

According to recent Medicare diagnosis data, we estimate that

there are about 5,000 IFALD patients in the U.S.

Many patients receiving

PN are entirely dependent on PN for their nutritional needs.

PN delivers nearly all the macro and micro-nutrients necessary for

survival in their patients, with the notable exception of choline.

Consequently, patients dependent on PN support have been shown

to be choline deficient.

Patients dependent upon PN are unable to synthesize sufficient levels of choline and malabsorption limits

the bioavailability of choline chloride from the PN diet.

The American Society for Parenteral and Enteral Nutrition and the Academy

of Nutrition and Dietetics’

Dietitians in Nutrition Support both recommend that choline be required in PN products;

there are currently no FDA-approved choline chloride PN products.

Dependence on PN and resulting

choline deficiency often leads to IFALD, which is the most common adverse outcome in chronic PN adult patients that is associated

Low free choline plasma concentrations are associated with alanine aminotransferase (“ALT”), aspartate

aminotransferase (“AST”), and alkaline phosphatase (“ALP”) elevations as well as steatosis (fatty liver)

and Cholestasis (when bile from the liver stops or slows), all indicators of ongoing liver damage.

has evidence of cholestasis (e.g., elevated alkaline phosphatase, or ALP, elevated bilirubin and/or histology);

may have evidence of ongoing, progressive liver injury on the basis of multiple abnormal liver function tests, in conjunction with findings of fibrosis, cirrhosis, and/or end-stage liver disease.

Many patients receiving PN

are entirely dependent on PN for their nutritional needs.

PN delivers nearly all the macro and micro-nutrients necessary for survival

in their patients, with the notable exception of choline.

Consequently, patients dependent on PN support have been shown to be choline

Patients dependent upon PN are unable to synthesize sufficient levels of choline and malabsorption limits the bioavailability

of choline chloride from the PN diet.

The American Society for Parenteral and Enteral Nutrition and the Academy of Nutrition and Dietetics’

Dietitians in Nutrition Support both recommend that choline be developed and routinely included in PN products;

however, there are currently

no FDA-approved choline chloride PN products.

Dependence on PN and resulting choline deficiency often leads to IFALD,

which is the most common adverse outcome in chronic PN adult patients that is associated with death.

Low free choline plasma concentrations

are associated with alanine aminotransferase, or ALT, aspartate aminotransferase, or AST, and ALP elevations as well as steatosis (fatty

liver) and cholestasis (when bile from the liver stops or slows), all indicators of ongoing liver damage.

Clinical History:

In a Phase 2 randomized,

double-blind, controlled 24-week clinical trial, patients (n=15) receiving nightly PN for > 85% of their nutritional needs (for

at least 12 weeks prior to entry) were randomized to receive via IV infusion (10-12 hours) their usual PN with placebo (n = 8),

or PN to which 2g IV Choline Chloride was added (n = 7).

double-blind, controlled 24-week clinical trial, patients (n=15) receiving nightly PN for > 85% of their nutritional needs (for at

least 12 weeks prior to entry) were randomized to receive via IV infusion (10-12 hours) their usual PN with placebo (n = 8), or PN to

which 2g IV Choline Chloride was added (n = 7).

In the IV Choline Chloride

group, mean choline levels were within or greater than the estimated normal range (i.e., 6.7 to 26.9 nmol/mL) throughout the 24-week

trial and quickly returned to baseline levels when treatment was discontinued.

Upon conversion of the

quantification of computed tomography (CT) values to magnetic resonance imaging proton density fat fraction (MRI-PDFF), significant

differences in the least square (LS) mean change from baseline in estimated MRI-PDFF were observed in the IV Choline Chloride group

in comparison to placebo group at Week 4 through Week 24, demonstrating a clinically meaningful and statistically significant reduction

in steatosis.

When LS mean percent changes from baseline in MRI-PDFF were compared between treatment groups, significant differences

in LS mean changes (range, 31.7% to 53.6%) were observed from Weeks 4 to 24 with p-values of 0.0009 to 0.0297 favoring the IV Choline

Chloride group.

group, mean choline levels were within or greater than the estimated normal range (i.e., 6.7 to 26.9 nmol/mL) throughout the 24-week trial

and quickly returned to baseline levels when treatment was discontinued.

Upon conversion of the quantification of computed tomography, or CT,

values to magnetic resonance imaging proton density fat fraction, or MRI-PDFF, significant differences in the least square, or LS, mean

change from baseline in estimated MRI-PDFF were observed in the IV Choline Chloride group in comparison to placebo group at Week 4 through

Week 24, demonstrating a clinically meaningful and statistically significant reduction in steatosis.

When LS mean percent changes from

baseline in MRI-PDFF were compared between treatment groups, significant differences in LS mean changes (range, 31.7% to 53.6%) were observed

from Weeks 4 to 24 with p-values of 0.0009 to 0.0297 favoring the IV Choline Chloride group.

Liver CT Images:

Before and After Treatment with

IV Choline Chloride

Before and After Treatment with IV Choline

Alkaline Phosphatase:

At baseline, LS mean ALP

concentration was 239.3 ±

118.93 in the IV Choline Chloride group and 148.1 ±

100.2 in the placebo group.

analyses demonstrated statistically significant decreases in ALP concentrations at Week 12 (p = 0.008), Week 16 (p = 0.005), Week

20 (p = 0.007), and Week 24 (p = 0.005) for the IV Choline Chloride group, demonstrating a reduction in cholestasis.

A trend towards

significance was observed at Week 4 (p = 0.076) and Week 6 (p = 0.056).

At Week 34, 10 weeks after discontinuation of IV Choline

Chloride treatment, LS mean change from baseline in ALP concentrations still demonstrated statistically significant decreases (p

= 0.002), demonstrating a significant improvement in cholestasis with treatment with IV Choline Chloride (Figure 4).

At baseline, LS mean ALP concentration was 239.3 ± 118.93 in

the IV Choline Chloride group and 148.1 ± 100.2 in the placebo group.

The mixed model for repeated measures, or MMRM, analyses

demonstrated statistically significant decreases in ALP concentrations at Week 12 (p = 0.008), Week 16 (p = 0.005), Week 20 (p = 0.007),

and Week 24 (p = 0.005) for the IV Choline Chloride group, demonstrating a reduction in cholestasis.

A trend towards significance was

observed at Week 4 (p = 0.076) and Week 6 (p = 0.056).

At Week 34, 10 weeks after discontinuation of IV Choline Chloride treatment, LS

mean change from baseline in ALP concentrations still demonstrated statistically significant decreases (p = 0.002), demonstrating a significant

improvement in cholestasis with treatment with IV Choline Chloride (Figure 4).

In the subgroup of subjects with ALP concentration

> 1.5x upper limit of normal (ULN) at baseline, (n=7), mean values at baseline were comparable between the IV Choline Chloride

and placebo groups (294.20 ±

87.947 versus 277.00 ±

128.693, respectively).

In the sub-group analysis, improvement

in ALP was consistent and substantial, with 20-30% improvement over 12-24 weeks of treatment.

> 1.5x upper limit of normal (ULN) at baseline, (n=7), mean values at baseline were comparable between the IV Choline Chloride and

placebo groups (294.20 ± 87.947 versus 277.00 ± 128.693, respectively).

In the sub-group analysis, improvement in ALP was

consistent and substantial, with 20-30% improvement over 12-24 weeks of treatment.

Statistical significance was observed at 12, 16, and

In the description of the trials above and

elsewhere in this Annual Report on Form 10-K, n represents the number of patients in a particular group and p or p-values represent

the probability that random chance caused the result (e.g., a p-value of 0.001 means that there is a 0.1% probability

that the difference between the placebo group and the treatment group is purely due to random chance).

A p-value of less

than or equal to 0.05 is a commonly used criterion for statistical significance, and may be supportive of a finding of efficacy by

regulatory authorities.

Improvement in Cholestasis 1 :

1 Protara Therapeutics re-analysis of patient CRF’s, data

* mixed model for repeated

measurement (“MMRM”) method used for imputation

placebo subject was excluded from all analyses due to likely IV contrast-induced imaging

abnormalities, confirmed by independent radiologist in subsequent re-analysis.

1 Protara Therapeutics re-analysis of patient CRF’s, data

* MMRM method used for imputation.

ǂ A placebo subject was excluded from all analyses due to likely

IV contrast-induced imaging abnormalities, confirmed by independent radiologist in subsequent re-analysis.

Preclinical Development:

Preclinical Studies Conducted by us

for IV Choline Chloride

Preclinical Studies Conducted by us for

IV Choline Chloride

Brief Description

20 unchanged sentences

Clinical Development Plan:

We have reached

agreement with FDA on a number of key aspects of the overall clinical program necessary for registration, including a Phase 1

pharmacokinetic study and a Phase 3 study.

We are currently undertaking a prevalence study in partnership with a large home

health organization in the United States to enhance understanding of the PN patient population, and plans to use this

information to determine the appropriate next steps for the development program.

We have received feedback from the FDA on a number of key aspects of

the overall clinical program necessary for registration, including a Phase 1 pharmacokinetic study and a Phase 3 clinical trial.

a retrospective, observational study of patients dependent on PN for 6 or more months.

The objective of the study was to understand the

incidence of cholestasis, a hallmark pathology of IFALD in this patient population by measuring serum alkaline phosphatase (ALP) levels

greater than 1.5 times the upper limit of normal ULN as a key marker of cholestasis.

Results of the study showed:

31% of all patients,

irrespective of baseline levels, presented with ALP levels greater than 1.5 times the ULN at any given time during 6 to 36 months.

addition, approximately 28% of all patients had persistent ALP elevations greater than 1.5 times the ULN at 36 months.

At baseline, approximately

23% of patients presented with ALP levels greater than 1.5 times the ULN with approximately 76% presenting with greater than 1.5 times

the ULN at any given time during 6 to 36 months and approximately 59% with persistent ALP elevations greater than 1.5 times the ULN at

While medical management demonstrated some improvement in ALP levels, it was not sufficient for managing ALP levels over the

long term in patients on PN.

Results support further exploration in patient population to determine rates of choline deficiency and steatosis.

We have initiated a prospective observational study to further characterize the prevalence of choline deficiency, as well as cholestasis

and steatosis.

We plan to use information from this prospective study to determine the appropriate next steps for the development program.

Manufacturing Plans:

We have manufactured sufficient

amounts of GMP drug substance and drug product to initiate the planned clinical trials.

Scale up for commercial demand is ready

and will commence when appropriate.

Our end-to-end manufacturing of IV Choline Chloride is conducted in the United States by a

GMP-compliant CDMO.

As a result of the Merger,

we acquired the product candidate, vonapanitase, a recombinant human elastase that we previously pursued development for the improvement

of vascular access outcomes in patients with chronic kidney disease, undergoing or preparing for hemodialysis, and as a treatment

for patients with symptomatic peripheral artery disease.

We are reviewing the research, preclinical and clinical data of vonapanitase

and has not yet determined whether to pursue any further development of this product candidate in the future.

amounts of cGMP drug substance and drug product to initiate the planned clinical trials.

Scale up for commercial demand is ready and will

commence when appropriate.

Our end-to-end manufacturing of IV Choline Chloride is conducted in the United States by a cGMP-compliant CDMO.

As a result of the Merger (as defined below), we acquired the product

candidate, Vonapanitase, a recombinant human elastase that we previously developed for the improvement of vascular access outcomes in

patients with chronic kidney disease, undergoing or preparing for hemodialysis, and as a treatment for patients with symptomatic peripheral

artery disease.

We have reviewed the research, preclinical and clinical data of Vonapanitase and have determined to cease further development

of this product candidate at this time.

Collaborations and License Agreements

Chugai Agreement

On June 17, 2019, we entered

into an agreement (the “Chugai Agreement”) with Chugai Pharmaceutical, a company organized and existing under the laws

Chugai Pharmaceutical has developed and commercialized a therapeutic product, OK-432 (Existing Product), in Japan and

Taiwan (the “Chugai Territory”), and owns and controls certain materials and documents related to the Existing Product

(the “Chugai Materials”).

Pursuant to the Chugai Agreement, Chugai Pharmaceutical will provide us with certain materials

and documents relating to the Existing Product and will provide certain technical services to us for our development and commercialization

in territories other than the Chugai Territory (the “Protara Territory”) of a new therapeutic product (the “New

Product”

or “TARA-002”) comparable to the Existing Product beginning on the effective date of the Chugai Agreement

and ending on June 30, 2020, or any other date to be agreed to by the parties (the “Chugai Service Period”), Chugai

Pharmaceutical will exclusively provide the Existing Product and Chugai Materials to us and will not provide the Existing Product

or Chugai Materials to any third parties during the Chugai Service Period, other than for medical, compassionate use and/or non-commercial

research purposes.

Additionally, beginning on the effective date of the Chugai Agreement and ending on the fifth anniversary of

such date or upon the termination of the Chugai Agreement, whichever comes earlier, Chugai Pharmaceutical shall not provide Chugai

Materials or technical support to any third party for the purpose of development and commercialization in the Protara Territory

of a therapeutic product comparable to the Existing Product.

We are responsible, at our sole cost and expense, for the development

and commercialization of the New Product in the Protara Territory.

On July 14, 2020, we entered

into an amended agreement with Chugai Pharmaceutical (the “Amended Chugai Agreement”) with an effective date as of

June 30, 2020.

The Chugai Amendment extended the date through which Chugai will exclusively provide the Existing Product and materials

to us from June 30, 2020 to June 30, 2021, extended the date through which Chugai will not provide materials or technical support

to any third party for the purpose of development and commercialization in a given area from the fifth anniversary to the eleventh

anniversary of the original effective date (extended to June 17, 2030) and provides that, in addition to the designated fee provided

upon the initial indication approval in the Chugai Pharmaceutical Agreement, we will pay Chugai a designated fee for each additional

indication approval.

On June 17, 2019, we entered into an agreement, or the Chugai Agreement

with Chugai Pharmaceutical, a company organized and existing under the laws of Japan.

Chugai Pharmaceutical has developed and commercialized

a therapeutic product, OK-432 (Existing Product), in Japan and Taiwan, or the Chugai Territory and owns and controls certain materials

and documents related to the Existing Product (the “Chugai Materials”).

Pursuant to the Chugai Agreement, Chugai Pharmaceutical

has provided us with certain materials and documents relating to the Existing Product and has provided certain technical services to us

for our development and commercialization in territories other than the Chugai Territory, or the Protara Territory of a new therapeutic

product, or the New Product or TARA-002 comparable to the Existing Product beginning on the effective date of the Chugai Agreement and

ending on June 30, 2020, or any other date to be agreed to by the parties, or the Chugai Service Period, Chugai Pharmaceutical will exclusively

provide the Existing Product and Chugai Materials to us and will not provide the Existing Product or Chugai Materials to any third parties

during the Chugai Service Period, other than for medical, compassionate use and/or non-commercial research purposes.

Additionally, beginning

on the effective date of the Chugai Agreement and ending on the fifth anniversary of such date or upon the termination of the Chugai Agreement,

whichever comes earlier, Chugai Pharmaceutical shall not provide Chugai Materials or technical support to any third-party for the purpose

of development and commercialization in the Protara Territory of a therapeutic product comparable to the Existing Product.

We are responsible,

at our sole cost and expense, for the development and commercialization of the New Product in the Protara Territory.

On July 14, 2020, we entered into an amended agreement with Chugai

Pharmaceutical, or the Amended Chugai Agreement, with an effective date as of June 30, 2020.

The Chugai Amendment extended the date through

which Chugai will exclusively provide the Existing Product and materials to us from June 30, 2020 to June 30, 2021, extended the date

through which Chugai will not provide materials or technical support to any third-party for the purpose of development and commercialization

in a given area from the fifth anniversary to the eleventh anniversary of the original effective date (extended to June 17, 2030) and

provides that, in addition to the designated fee provided upon the initial indication approval in the Chugai Pharmaceutical Agreement,

we will pay Chugai a designated fee for each additional indication approval.

As consideration for Chugai

Pharmaceutical’s performance under the Chugai Agreement, we agreed to pay Chugai Pharmaceutical a payment in the low, single-digit

millions, which payments shall be made in two installments with an initial payment in July 2020, and the remaining majority of

the payment payable upon FDA approval of the New Product.

Pharmaceutical’s performance under the Chugai Agreement, we agreed to pay Chugai Pharmaceutical a payment in the low, single-digit

millions, which payments shall be made in two installments with an initial payment in July 2020, and the remaining majority of the payment

payable upon FDA approval of the New Product.

We granted Chugai Pharmaceutical

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data and documentation and inventions to develop and commercialize the New Product in the Chugai Territory.

We will be responsible

for manufacturing and supplying or causing our CDMO to manufacture and supply the New Product to Chugai Pharmaceutical.

We will be responsible for

manufacturing and supplying or causing our CDMO to manufacture and supply the New Product to Chugai Pharmaceutical.

The Chugai Agreement shall

remain in full force and effect until the first anniversary of the date of FDA approval of the New Product, unless terminated sooner,

(the “Chugai Term”).

Following the Chugai Service Period and during the Chugai Term, Chugai Pharmaceutical may terminate

the Chugai Agreement, in whole or in part, without cause, by providing us 90 days prior written notice.

Following such termination,

we would maintain exclusive access to Chugai Materials, subject to the termination clauses outlined below.

We may terminate the

Chugai Agreement, in whole only, by providing Chugai Pharmaceutical 90 days prior written notice if (i) we decide to discontinue

the New Product development;

(ii) we decide that the FDA’s requirements for the New Product are not likely to be met;

(iii) the FDA identifies a safety issue regarding the New Product.

or the Chugai Term.

Following the Chugai Service Period and during the Chugai Term, Chugai Pharmaceutical may terminate the Chugai Agreement,

in whole or in part, without cause, by providing us 90 days prior written notice.

Following such termination, we would maintain exclusive

access to Chugai Materials, subject to the termination clauses outlined below.

We may terminate the Chugai Agreement, in whole only, by

providing Chugai Pharmaceutical 90 days prior written notice if (i) we decide to discontinue the New Product development;

(ii) we decide

that the FDA’s requirements for the New Product are not likely to be met;

or (iii) the FDA identifies a safety issue regarding the

In addition, either party

may terminate the Chugai Agreement, in whole or in part, in the event that the other party materially breaches the Chugai Agreement

and fails to cure the breach within 30 days of written notice.

Either party may terminate the Chugai Agreement in its entirety

immediately upon notice to the other party if such other party:

(i) is dissolved or liquidated or takes any corporate action for

such purpose;

(ii) becomes insolvent or is generally unable to pay, or fails to pay, its debts as they become due;

or has filed against it a petition for voluntary or involuntary bankruptcy or otherwise becomes subject to any proceeding under

any domestic or foreign bankruptcy or insolvency laws;

may terminate the Chugai Agreement, in whole or in part, in the event that the other party materially breaches the Chugai Agreement and

fails to cure the breach within 30 days of written notice.

Either party may terminate the Chugai Agreement in its entirety immediately

upon notice to the other party if such other party:

(i) is dissolved or liquidated or takes any corporate action for such purpose;

becomes insolvent or is generally unable to pay, or fails to pay, its debts as they become due;

(iii) files or has filed against it a

petition for voluntary or involuntary bankruptcy or otherwise becomes subject to any proceeding under any domestic or foreign bankruptcy

or insolvency laws;

(iv) makes or seeks to make a general assignment for the benefit of creditors;

or (v) applies for or has a receiver, trustee, custodian or similar agent appointed by order of any court to take charge of or

sell any material portion of its property or business.

or (v) applies for or has a receiver,

trustee, custodian or similar agent appointed by order of any court to take charge of or sell any material portion of its property or

In the event that we undergo

a change of control, Chugai Pharmaceutical may terminate the Chugai Agreement upon 90 days written notice to us, absent a written

pledge by the new controlling party of its agreement to fulfill and undertake all obligations of ours and to be bound by the Chugai

a change of control, Chugai Pharmaceutical may terminate the Chugai Agreement upon 90 days written notice to us, absent a written pledge

by the new controlling party of its agreement to fulfill and undertake all obligations of ours and to be bound by the Chugai Agreement.

Sponsored Research and License Agreement

On November 28, 2018,

we entered into a sponsored research and license agreement (the “Research Agreement”) with The University of Iowa (the

“University”), pursuant to which the University will provide access to certain program data related to Chugai Pharmaceutical’s

OK-432 and will assist us in conducting certain clinical studies.

As consideration for the University’s performance under

the Research Agreement, we will pay the University $30,000 per year in funding for the project, taking into consideration the time

spent by University employees required for the Project.

The parties also agree to discuss in good faith potential additional funding

required for completion of the project pursuant to the Research Agreement as applicable and necessary.

In addition, within 45 days

of approval of the TARA-002 BLA by the FDA, we will pay a one-time approval milestone to the University, the amount of which depends

on the usefulness of the program data in TARA-002’s BLA filing, and the milestone amount will range from $0 to $1 million.

We will also be responsible for certain tiered royalties on annual net sales of products for the indication, which royalty rates

are in the low single digit percentages.

These royalty rates are also subject to a reduction in the event that regulatory authorities

determine that the program data is not sufficient for regulatory approval on its own and additional pediatric efficacy and safety

clinical studies are required.

In the event that the annual net sales surpass certain dollar amount thresholds, we will need to

make certain additional milestone payments following the close of the calendar quarter in which each milestone is reached, with

the payments ranging from $62,500 to $125,000.

On November 28, 2018, we

entered into a sponsored research and license agreement, or the Research Agreement with The University of Iowa, or the University, pursuant

to which the University will provide access to certain program data related to Chugai Pharmaceutical’s OK-432 and will assist us

in conducting certain clinical studies.

As consideration for the University’s performance under the Research Agreement, we will

pay the University $30,000 per year in funding for the project, taking into consideration the time spent by University employees required

for the Project.

The parties also agree to discuss in good faith potential additional funding required for completion of the project pursuant

to the Research Agreement as applicable and necessary.

In addition, within 45 days of approval of the TARA-002 BLA by the FDA, we will

pay a one-time approval milestone to the University, the amount of which depends on the usefulness of the program data in TARA-002’s

BLA filing, and the milestone amount will range from $0 to $1 million.

We will also be responsible for certain tiered royalties on annual

net sales of products for the indication, which royalty rates are in the low single digit percentages.

These royalty rates are also subject

to a reduction in the event that regulatory authorities determine that the program data is not sufficient for regulatory approval on its

own and additional pediatric efficacy and safety clinical studies are required.

In the event that the annual net sales surpass certain

dollar amount thresholds, we will need to make certain additional milestone payments following the close of the calendar quarter in which

each milestone is reached, with the payments ranging from $62,500 to $125,000.

We may terminate the Research

Agreement upon 30 days prior written notice to the University.

Either party may terminate the project under the Research Agreement

and all commitments and obligations with respect thereto upon 30 days prior written notice to the other party.

In the event of

any termination of the project under the Research Agreement by the University, (a) the University agrees to complete certain phases

of the project and (b) we will continue to provide annual funding until the completion of the second phase of the project.

termination of the project by us, the Agreement will terminate and we will reassign to the University the IND.

Either party may terminate the project under the Research Agreement and

all commitments and obligations with respect thereto upon 30 days prior written notice to the other party.

In the event of any termination

of the project under the Research Agreement by the University, (a) the University agrees to complete certain phases of the project and

(b) we will continue to provide annual funding until the completion of the second phase of the project.

Upon termination of the project

by us, the Agreement will terminate and we will reassign to the University the IND.

Choline License Agreement

On September 27, 2017,

we entered into a choline license agreement (the “Choline Agreement”) with Alan L.

Buchman, M.D., pursuant to which

Buchman granted us an exclusive, worldwide, non-transferable license in and to certain licensed orphan designations, certain

licensed IND, certain existing study data and to certain licensed know-how to develop, make, use, sell, offer for sale and import

the licensed product during the term of the Choline Agreement.

We are solely responsible for all fees and expenses related to the

undertaking of the Choline Agreement, including all due diligence obligations, regulatory authority fees, attorney fees and consulting

On September 27, 2017, we entered into a choline license agreement,

or the Choline Agreement, with Alan L.

Buchman, M.D., pursuant to which Dr.

Buchman granted us an exclusive, worldwide, non-transferable

license in and to certain licensed orphan designations, a certain licensed IND, certain existing study data and to certain licensed know-how

to develop, make, use, sell, offer for sale and import the licensed product during the term of the Choline Agreement.

We are solely responsible

for all fees and expenses related to the undertaking of the Choline Agreement, including all due diligence obligations, regulatory authority

fees, attorney fees and consulting fees.

During the term of the Choline Agreement, Dr.

Buchman may not work with any third parties on any product competing with the

licensed product.

In consideration for the rights and licenses granted under the Agreement, we made an initial upfront payment

of $50,000 payable to Dr.

will also owe Dr.

Buchman certain milestone and royalty payments .

Pursuant to the Choline

Agreement, we paid Dr.

Buchman $50,000 in October 2019 because we had not received at least $5 million in working capital from

any source or in any manner as of October 15, 2019.

Buchman may not work with any third parties on

any product competing with the licensed product.

In consideration for the rights and licenses granted under the Agreement, we made an

initial upfront payment of $50,000 payable to Dr.

Certain milestone and royalty

payments may also be payable to Dr.

Pursuant to the Choline Agreement, we paid Dr.

Buchman $50,000 in October 2019 because we

had not received at least $5 million in working capital from any source or in any manner as of October 15, 2019.

Also, we paid Dr.

Buchman an additional $550,000 upon the closing of the Private

Placements following the consummation of the Merger because we received at least $5 million in working capital.

Regardless of whether

development or commercialization is undertaken by us under the Choline Agreement, commencing on November 21, 2022 and during the

term of the Choline Agreement, we shall pay Dr.

an additional $550,000 milestone upon the closing of the Private Placements (as defined herein) following the consummation of the Merger

(as defined herein) following our receipt of at least $5 million in working capital.

Regardless of whether development

or commercialization is undertaken by us under the Choline Agreement, commencing on November 21, 2022 and during the term of the Choline

Agreement, we shall pay Dr.

Buchman a minimum annual royalty that ranges between $25,000 and $75,000.

Buchman sales royalties based on aggregate net sales

of IV Choline Chloride in each calendar quarter, with the royalty rates ranging from 5.0% to 10.5% based on the amount of net sales.

In the event of development or commercialization activity by any sublicensees, we also agreed to pay Dr.

Buchman a royalty in the

mid-single digit percentage of (i) net cash receipts after payment of taxes received by us from sublicensees for their sales of

licensed products and (ii) any other consideration received by us from such sublicensees;

in each case, including a fair monetary

value for any transaction that is not a bona fide arms-length transaction or that is for consideration other than monetary.

in the event of a sale or transfer of a priority review voucher regarding the license product, regardless of whether any development

Buchman sales

royalties based on aggregate net sales of IV Choline Chloride in each calendar quarter, with the royalty rates ranging from 5.0% to 10.5%

based on the amount of net sales.

In the event of development or commercialization activity by any sublicensees, we also agreed to pay

Buchman a royalty in the mid-single digit percentage of (i) net cash receipts after payment of taxes received by us from sublicensees

for their sales of licensed products and (ii) any other consideration received by us from such sublicensees;

in each case, including a

fair monetary value for any transaction that is not a bona fide arms-length transaction or that is for consideration other than monetary.

Further, in the event of a sale or transfer of a priority review voucher regarding the license product, regardless of whether any development

or commercialization activity is undertaken by us or our sublicensees, we agreed to pay Dr.

Buchman a milestone payment representing

the mid-single digit percentage of (i) net cash receipts after payment of taxes and (ii) any other consideration;

in each case,

received by us, our affiliates, or our sublicensees, including a fair monetary value for any transaction that is not a bona fide

arms-length transaction or that is for consideration other than monetary.

Buchman a milestone payment representing the

mid-single digit percentage of (i) net cash receipts after payment of taxes and (ii) any other consideration;

in each case, received by

us, our affiliates, or our sublicensees, including a fair monetary value for any transaction that is not a bona fide arms-length transaction

or that is for consideration other than monetary.

We shall also pay Dr.

Buchman up to an aggregate of up to $775,000 in additional milestone payments upon the achievement of various regulatory approval

up to an aggregate of up to $775,000 in additional milestone payments upon the achievement of various regulatory approval milestones.

The Choline Agreement will

remain in full force and effect until the last sale of the licensed product under the Choline Agreement.

After we received the FDA’s

written minutes regarding its initial FDA meeting concerning the development of the first licensed product for one or more of the licensed

indications, we paid an additional payment of $100,000 to Dr.

Buchman and elected not terminate the Choline Agreement.

The Choline Agreement

will remain in full force and effect until the last sale of the licensed product under the Choline Agreement.

After we received

the FDA’s written minutes regarding its initial FDA meeting concerning the development of the first licensed product for

one or more of the licensed indications, we paid an additional payment of $100,000 to Dr.

Buchman and elected not terminate the

Choline Agreement.

The Choline Agreement may be terminated by Dr.

Buchman if, following regulatory approval of a licensed product,

we have not made our first sale of a licensed product within such country within a specified time period.

We may terminate the

Choline Agreement for convenience upon 90 days prior written notice to Dr.

Buchman may terminate the Choline Agreement

effective immediately for non-payment of any payment due that has not been cured.

Either party may terminate the Choline Agreement

effective immediately if the other party is in material breach and has not cured such breach within 60 days’

Buchman may terminate the Choline Agreement effective immediately upon 60 days prior written notice if (a) we cease or threaten

to cease to carry on its business;

(b) a petition or resolution for the making of an administration order or for the bankruptcy,

winding-up or dissolution of us is presented or passed;

may be terminated by Dr.

Buchman if, following regulatory approval of a licensed product, we have not made our first sale of a licensed

product within such country within a specified time period.

We may terminate the Choline Agreement for convenience upon 90 days’

prior written notice to Dr.

Buchman may terminate the Choline Agreement for non-payment of any payment due that has not been

Either party may terminate the Choline Agreement if the other party is in material breach and has not cured such breach within

60 days’ notice.

In addition, Dr.

Buchman may terminate the Choline Agreement upon 60 days’ prior written notice if (a) we

cease or threaten to cease to carry on our business;

(b) a petition or resolution for the making of an administration order or for the

bankruptcy, winding-up or dissolution of us is presented or passed;

(d) a receiver

or administrator takes possession of our assets or (e) any similar procedure is commenced against us in the United States.

a receiver or administrator takes possession of our assets or (e) any similar procedure is commenced against us in the United States.

License Agreement

On December 22, 2017,

we entered into a license agreement (the “License Agreement”) with The Feinstein Institute for Medical Research, a

not-for-profit corporation organized and existing under the laws of New York (the “Institute”).

The Institute owns,

by assignment, a U.S.

On December 22, 2017, we entered into a license agreement, or the License

Agreement with The Feinstein Institute for Medical Research, a not-for-profit corporation organized and existing under the laws of New

York, or the Institute.

The Institute owns, by assignment, a U.S.

patent related to the treatment of fatty liver disease in humans.

Pursuant to the License Agreement, the

Institute granted us an exclusive, worldwide license, with the right to grant sublicenses to non-affiliate third parties, to develop,

make, have made, use, sell, offer for sale and import certain products for use in the field of fatty liver disease in humans receiving

total parenteral nutrition, by administering, as monotherapy, a pharmaceutical composition comprising intravenous choline, wherein

the fatty liver disease is selected from IFALD, non-alcoholic fatty liver, non-alcoholic steatohepatitis (“NASH”),

NASH-associated liver fibrosis, or non-alcoholic cirrhosis.

Notwithstanding the exclusive rights granted to us, the Institute shall

retain the right to make, use and practice such patents in its own laboratories solely for non-commercial scientific purposes and

for continued non-commercial research.

to the License Agreement, the Institute granted us an exclusive, worldwide license, with the right to grant sublicenses to non-affiliate

third parties, to develop, make, have made, use, sell, offer for sale and import certain products for use in the field of fatty liver

disease in humans receiving total parenteral nutrition, by administering, as monotherapy, a pharmaceutical composition comprising intravenous

choline, wherein the fatty liver disease is selected from IFALD, non-alcoholic fatty liver, non-alcoholic steatohepatitis, or NASH, NASH-associated

liver fibrosis, or non-alcoholic cirrhosis.

Notwithstanding the exclusive rights granted to us, the Institute shall retain the right to

make, use and practice such patents in its own laboratories solely for non-commercial scientific purposes and for continued non-commercial

As consideration for the

license grant, we agreed to pay the Institute tiered royalties of between 1.0% and 1.5% of all net sales.

In addition, we agreed

to pay the Institute a low double digit percentage of net proceeds resulting from agreements entered into within two years from

the effective date of the License Agreement and a mid-single digit percentage of net proceeds resulting from agreements entered

into thereafter.

We also agreed to make certain license maintenance payments of $15,000 beginning on the second anniversary of

the effective date of the License Agreement and continuing upon every anniversary thereafter until the first commercial sale of

a licensed product.

Beginning on the first anniversary of the effective date of the License Agreement after the first commercial

sale of a licensed product and every anniversary of the effective date of the License Agreement thereafter, we shall pay the Institute

$30,000 as a license maintenance fee.

Such license maintenance fees are non-refundable but are creditable against future royalty

payments due to the Institute during the 12-month period following each such anniversary.

In addition, we agreed to pay

the Institute a low double digit percentage of net proceeds resulting from agreements entered into within two years from the effective

date of the License Agreement and a mid-single digit percentage of net proceeds resulting from agreements entered into thereafter.

also agreed to make certain license maintenance payments of $15,000 beginning on the second anniversary of the effective date of the License

Agreement and continuing upon every anniversary thereafter until the first commercial sale of a licensed product.

Beginning on the first

anniversary of the effective date of the License Agreement after the first commercial sale of a licensed product and every anniversary

of the effective date of the License Agreement thereafter, we shall pay the Institute $30,000 as a license maintenance fee.

maintenance fees are non-refundable but are creditable against future royalty payments due to the Institute during the 12-month period

following each such anniversary.

We agreed to make certain

one-time milestone payments in the aggregate amount of $375,000 upon the achievement of certain regulatory approval milestones,

of which $100,000 was paid on January 28, 2020 upon us having consummated the Private Placements.

one-time milestone payments in the aggregate amount of $375,000 upon the achievement of certain regulatory approval milestones, of which

$100,000 was paid on January 28, 2020 upon us having consummated the Private Placements.

Unless terminated earlier,

the License Agreement will expire upon the expiration of the last to expire patent under the License Agreement.

We may terminate

the License Agreement by giving the Institute 60 days prior notice.

Either party may terminate the License Agreement in the event

of a default or breach by the other party that has not been cured within 60 days of such notice.

If we (i) make an assignment for

the benefit of creditors or if proceedings for a voluntary bankruptcy are instituted on behalf of us;

(ii) is declared bankrupt

or insolvent or (iii) is convicted of a felony relating to the manufacture, use or sale of the licensed products or a felony relating

to moral turpitude, the Institute may terminate the License Agreement.

We may terminate the License

Agreement by giving the Institute 60 days prior notice.

Either party may terminate the License Agreement in the event of a default or

breach by the other party that has not been cured within 60 days of such notice.

If we (i) make an assignment for the benefit of creditors

or if proceedings for a voluntary bankruptcy are instituted on behalf of us;

(ii) is declared bankrupt or insolvent or (iii) is convicted

of a felony relating to the manufacture, use or sale of the licensed products or a felony relating to moral turpitude, the Institute may

terminate the License Agreement.

Intellectual Property

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is critical to our business and we strive to protect it, including by obtaining and maintaining patent protection in the U.S.

internationally for our product candidates, novel biological discoveries, epitopes, new therapeutic approaches and potential indications,

and other inventions that are important to our business.

Throughout the development of our product candidates, we will seek to

identify additional means of obtaining patent protection that would potentially enhance commercial success.

The patent positions of

biotechnology companies like us are generally uncertain and involve complex legal, scientific and factual questions.

that the ability to obtain patent protection and the degree of such protection depends on a number of factors, including the extent

of the prior art, the novelty and non-obviousness of the invention, and the ability to satisfy the enablement requirement of the

In addition, the coverage claimed in a patent application can be significantly reduced before the patent is issued,

and its scope can be reinterpreted after issuance.

Consequently, we may not obtain or maintain adequate patent protection for any

of our product candidates.

Any patents that we hold may be challenged, circumvented or invalidated by third parties.

Our commercial success

will also depend in part on not infringing the proprietary rights of third parties.

In addition, we have licensed rights under

proprietary technologies of third parties to develop, manufacture and commercialize specific aspects of our products and services.

It is uncertain whether the issuance of any third-party patent would require us to alter our development or commercial strategies,

alter our processes, obtain licenses or cease certain activities.

The expiration of patents or patent applications licensed from

third parties or our breach of any license agreements or failure to obtain a license to proprietary rights that it may require

to develop or commercialize our future technology may have a material adverse impact on it.

If third parties prepare and file patent

applications in the United States that also claim technology to which we have rights, we may have to participate in interference

proceedings in the United States Patent and Trademark Office (the “USPTO”) to determine priority of invention.

a more comprehensive discussion of the risks related to our intellectual property, please see “

Risk Factors—Risks

and internationally

for our product candidates, novel biological discoveries, epitopes, new therapeutic approaches and potential indications, and other inventions

that are important to our business.

Throughout the development of our product candidates, we will seek to identify additional means of

obtaining patent protection that would potentially enhance commercial success.

We also rely upon

trade secrets, know-how, continuing technological innovation and in-licensing opportunities to develop and maintain our proprietary position.

The patent positions of biotechnology

companies like us are generally uncertain and involve complex legal, scientific and factual questions.

We recognize that the ability to

obtain patent protection and the degree of such protection depends on a number of factors, including the extent of the prior art, the

novelty and non-obviousness of the invention, and the ability to satisfy the enablement requirement of the patent laws.

In addition, the

coverage claimed in a patent application can be significantly reduced before the patent is issued, and its scope can be reinterpreted

after issuance.

Consequently, we may not obtain or maintain adequate patent protection for any of our product candidates.

that we hold may be challenged, circumvented or invalidated by third parties.

Our commercial success will also depend in part on not infringing the

proprietary rights of third parties.

In addition, we have licensed rights under proprietary technologies of third parties to develop,

manufacture and commercialize specific aspects of our products and services.

It is uncertain whether the issuance of any third-party patent

would require us to alter our development or commercial strategies, alter our processes, obtain licenses or cease certain activities.

The expiration of patents or patent applications licensed from third parties or our breach of any license agreements or failure to obtain

a license to proprietary rights that it may require to develop or commercialize our future technology may have a material adverse impact

If third parties prepare and file patent applications in the United States that also claim technology to which we have rights,

we may have to participate in interference proceedings in the United States Patent and Trademark Office, or the USPTO, to determine priority

of invention.

For a more comprehensive discussion of the risks related to our intellectual property, please see “ Risk Factors—Risks

Related to Our Intellectual Property.

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distinct Su strain of Streptococcus pyogenes (group A, type 3).

TARA-002 is produced through a proprietary manufacturing

We believe a significant barrier to entry exists, as it believes only Chugai Pharmaceutical and us have the specific strain

and possess the know-how to manufacture the product.

We anticipate that, if approved by the FDA, TARA-002 will be protected by

12 years of biologic exclusivity.

TARA-002 is produced through a proprietary manufacturing process.

We believe a significant barrier to entry exists, as we believe only Chugai Pharmaceutical and we have the specific strain and possess

the know-how to manufacture the product.

We anticipate that, if approved by the FDA, TARA-002 will be protected by 12 years of biologic

IV Choline Chloride:

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Chloride, we have acquired an exclusive, worldwide license to U.S.

Patent 8,865,641 B2 from the Feinstein Institute for Medical

Research providing protection in the United States until 2035.

The patent applies to a method of treating a fatty liver disease

in a subject.

In particular, the method comprises administering to the subject an effective amount of a cholinergic pathway stimulating

agent, wherein the fatty liver disease is selected from non-alcoholic fatty liver (NAFL), alcoholic fatty liver (AFL), non-alcoholic

steatohepatitis (NASH), alcoholic steatohepatitis (ASH), NASH-associated liver fibrosis, ASH-associated liver fibrosis, non-alcoholic

cirrhosis and alcoholic cirrhosis.

The term of individual

patents depends upon the legal term of the patents in the countries in which they are obtained.

In most countries in which we may

file, the patent term is 20 years from the earliest date of filing a non-provisional patent application related to the patent.

patent also may be accorded a patent term adjustment under certain circumstances to compensate for delays in obtaining the

patent from the USPTO.

In some instances, such a patent term adjustment may result in a U.S.

patent term extending beyond 20 years

from the earliest date of filing a non-provisional patent application related to the U.S.

In addition, in the United States,

the term of a U.S.

patent that covers an FDA-approved drug may also be eligible for patent term extension, which permits patent

term restoration as compensation for the patent term lost during the FDA regulatory review process.

The Hatch-Waxman Act permits

a patent term extension of up to five years beyond the expiration of the patent.

The length of the patent term extension is related

to the length of time the drug is under regulatory review.

Patent term extension cannot extend the remaining term of a patent beyond

a total of 14 years from the date of product approval and only one patent applicable to an approved drug may be extended.

provisions are available in Europe and other foreign jurisdictions to extend the term of a patent that covers an approved drug.

In the future, if and when our products receive FDA approval, we expect to apply for patent term extensions on patents covering

certain of those products, when applicable.

We also rely on trade

secrets relating to product candidates and seek to protect and maintain the confidentiality of proprietary information to protect

aspects of our business that are not amenable to, or that we do not consider appropriate for, patent protection.

Although we take

steps to protect our proprietary information and trade secrets, including through contractual means with our employees and consultants,

third parties may independently develop substantially equivalent proprietary information and techniques or otherwise gain access

to our trade secrets, including through breaches of such agreements with our employees and consultants.

Thus, we may not be able

to meaningfully protect our trade secrets.

It is our policy to require our employees, consultants, outside scientific partners,

sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting

relationships with us.

These agreements provide that all confidential information concerning our business or financial affairs

developed or made known to the individual during the course of the individual’s relationship with us is to be kept confidential

and not disclosed to third parties except in specific circumstances.

Our agreements with employees also provide that all inventions

conceived by the employee in the course of employment with us or from the employee’s use of our confidential information

are our exclusive property.

Patent 8,865,641 B2 from the Feinstein Institute for Medical Research

providing protection in the United States until 2035.

The patent applies to a method of treating a fatty liver disease in a subject.

particular, the method comprises administering to the subject an effective amount of a cholinergic pathway stimulating agent, wherein

the fatty liver disease is selected from non-alcoholic fatty liver, alcoholic fatty liver, NASH, alcoholic steatohepatitis, or ASH, NASH-associated

liver fibrosis, ASH-associated liver fibrosis, non-alcoholic cirrhosis and alcoholic cirrhosis.

The term of individual patents

depends upon the legal term of the patents in the countries in which they are obtained.

In most countries in which we may file, the patent

term is 20 years from the earliest date of filing a non-provisional patent application related to the patent.

patent also may be

accorded a patent term adjustment under certain circumstances to compensate for delays in obtaining the patent from the USPTO.

instances, such a patent term adjustment may result in a U.S.

patent term extending beyond 20 years from the earliest date of filing a

non-provisional patent application related to the U.S.

In addition, in the United States, the term of a U.S.

patent that covers

an FDA-approved drug may also be eligible for patent term extension, which permits patent term restoration as compensation for the patent

term lost during the FDA regulatory review process.

The Hatch-Waxman Act permits a patent term extension of up to five years beyond the

expiration of the patent.

The length of the patent term extension is related to the length of time the drug is under regulatory review.

Patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only

one patent applicable to an approved drug may be extended.

Similar provisions are available in Europe and other foreign jurisdictions

to extend the term of a patent that covers an approved drug.

In the future, if and when our products receive FDA approval, we expect to

apply for patent term extensions on patents covering certain of those products, when applicable.

We also rely on trade secrets

relating to product candidates and seek to protect and maintain the confidentiality of proprietary information to protect aspects of our

business that are not amenable to, or that we do not consider appropriate for, patent protection.

Although we take steps to protect our

proprietary information and trade secrets, including through contractual means with our employees and consultants, third parties may independently

develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets, including through

breaches of such agreements with our employees and consultants.

Thus, we may not be able to meaningfully protect our trade secrets.

is our policy to require our employees, consultants, outside scientific partners, sponsored researchers and other advisors to execute

confidentiality agreements upon the commencement of employment or consulting relationships with us.

These agreements provide that all

confidential information concerning our business or financial affairs developed or made known to the individual during the course of the

individual’s relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances.

Our agreements with employees also provide that all inventions conceived by the employee in the course of employment with us or from the

employee’s use of our confidential information are our exclusive property.

Manufacturing

We rely on contract development

and manufacturing organizations (“CDMOs”) to produce our drug candidates in accordance with current Good Manufacturing

Practices (“cGMP”), regulations for use in clinical trials and commercial product.

The manufacture of pharmaceuticals

is subject to extensive cGMP regulations, which impose various procedural and documentation requirements and govern all areas of

record keeping, production processes and controls, personnel and quality control.

We rely on CDMOs to produce

our drug candidates in accordance with cGMP as well as regulations for use in clinical trials and for commercial product.

The manufacture

of pharmaceuticals is subject to extensive cGMP regulations, which impose various procedural and documentation requirements and govern

all areas of record keeping, production processes and controls, personnel and quality control.

The CDMOs that we partner

with have the capability to produce clinical supply required for clinical trials, as well as support commercial scale up activities

for both products.

Both TARA-002 and Choline

Chloride will be produced in the United States.

The starting materials for TARA-002 were provided to us pursuant to an agreement

with Chugai Pharmaceutical.

The regulatory starting materials for Choline Chloride are available commercially.

with have the capability to produce clinical supply required for clinical trials, as well as support commercial scale up activities for

both products.

We plan to manufacture TARA-002

using an equivalent, but modernized, proprietary manufacturing process as is used to produce OK-432 by Chugai Pharmaceutical, starting

with a master cell line propagated by us but utilizing the same genetically distinct strain of Streptococcus pyogenes (A group,

type 3) Su strain as OK-432.

We have contracted a CDMO to manufacture TARA-002.

We expect that both TARA-002 and IV Choline Chloride will be manufactured

in the United States.

The starting materials for TARA-002 were provided to us pursuant to an agreement with Chugai Pharmaceutical.

regulatory starting materials for IV Choline Chloride are available commercially.

Sales and Marketing

We plan to become a

fully integrated biopharmaceutical company pursuing our mission of supporting and improving the lives of patients suffering

from cancer and rare diseases.

If approved by the FDA,

we plan to commercialize both of our current product candidates in the U.S.

first and then move to other geographies.

As we advance

TARA-002 and IV Choline Chloride through our respective clinical development programs, we plan to grow our commercial organization

in support of anticipated product launches.

We plan to become a fully-integrated

biopharmaceutical company pursuing our mission of supporting and improving the lives of patients suffering from cancer and rare diseases.

If approved by the FDA, we plan to commercialize both of our current

product candidates in the United States first and then in other geographies.

As we advance TARA-002 and IV Choline Chloride through our

respective clinical development programs, we plan to grow our commercial organization in support of anticipated product launches.

The process for commercialization

of new drugs is very competitive, and we could potentially face worldwide competition from other pharmaceutical companies, biotechnology

companies and ultimately generic products.

Our potential competitors may develop or market therapies that are more clinically effective,

safer or less expensive than any therapeutic products we develop.

companies and ultimately generic or biosimilar products.

Our potential competitors may develop or market therapies that are more clinically

effective, safer or less expensive than any therapeutic products we develop.

Numerous companies are engaged in the development, patenting,

manufacturing and marketing of healthcare products competitive with those that we are developing.

With respect to our lead

product candidate, TARA-002, for the treatment of NMIBC and LMs, the active ingredient in TARA-002 is a genetically distinct strain of

Streptococcus pyogenes (group A, type 3) Su strain.

TARA-002 is produced through a proprietary manufacturing process.

We anticipate

that, if approved by the FDA, TARA-002 will be protected by 12 years of biologic exclusivity.

In addition, based on the prevalence of

the disease, TARA-002 is likely to have seven years of concurrent Orphan Drug Designation exclusivity for the treatment of LMs if deemed

comparable to OK-432 by the Vaccines Division.

There are no approved pharmacotherapies

currently available for the treatment of LMs and the current treatment options include a high-risk surgical procedure and off-label use

of sclerosants, including doxycycline, bleomycin, ethanol and sodium tetradecyl sulfate.

There are a number of drug development companies

and academic researchers exploring oral formulations of various agents for the treatment of LMs including macrolides, phosphodiesterase

inhibitors, and calcineurin/mTOR inhibitors.

These are in early development.

TARA-002, if approved for

the treatment of NMIBC, would be subject to competition from existing treatment methods of surgery, chemotherapy and immunomodulatory

For example, the current standard of care for NMIBC includes intravesical BCG.

Other products approved for the treatment of NMIBC

include Merck & Co., Inc.’s Keytruda and Endo International plc’s Valstar.

Additional product candidates in development

include Japanese BCG Laboratory’s BCG Tokyo, Pfizer Inc.’s sasanlimab in combination with BCG, ImmunityBio, Inc.’s anktiva

in combination with BCG, CG Oncology Inc.’s CG0070, FerGene’s instiladrin, Sesen Bio, Inc.’s vicineum, and enGene Inc.’s,

Additional pharmaceutical and biotechnology companies with product candidates in development for the treatment of NMIBC include

AstraZeneca PLC, Bristol-Myers Squibb Company, Roche Group and Seagen Inc.

There are no treatments currently

available for IFALD.

With respect to IV Choline Chloride for the treatment of IFALD, IV Choline Chloride is the only sterile injectable

form of choline chloride that can be combined with parenteral nutrition.

Further, if approved, IV Choline Chloride will be protected by

Orphan Drug Designation exclusivity for seven years.

Government Regulation and Product Approval

The FDA and other regulatory

authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the

research, development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage,

distribution, record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting

of drugs and biologics such as those we are developing.

We, along with 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.

In the United States,

the FDA regulates drugs under the Federal Food, Drug and Cosmetic Act (“FDCA”) and biologics additionally under the

Public Health Services Act (“PHSA”) as well as their respective implementing regulations.

The process required by the

FDA before biopharmaceutical 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”) regulations;

authorities at federal, state, and local levels, as well as in foreign countries, extensively regulate, among other things, the research,

development, testing, manufacture, quality control, import, export, safety, effectiveness, labeling, packaging, storage, distribution,

record keeping, approval, advertising, promotion, marketing, post-approval monitoring, and post-approval reporting of drugs and biologics

such as those we are developing.

We, along with 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.

In the United States, the FDA regulates drugs under the Federal Food,

Drug and Cosmetic Act, or FDCA and biologics additionally under the Public Health Services Act, or PHSA, as well as their respective implementing

The process required by the FDA before biopharmaceutical 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, or cGLP regulations;

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;

approval by an independent Institutional Review Board (“IRB”) or ethics committee at each clinical site before the trial is commenced;

performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of a drug product candidate and the safety, purity and potency of the proposed biologic product candidate for its intended purpose;

approval by an independent Institutional Review Board, or IRB, or ethics

committee at each clinical site before the trial is commenced;

performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of a product candidate and the safety, purity and potency of the proposed biologic product candidate for its intended purpose;

preparation of and submission to the FDA of an NDA or BLA after completion of all pivotal clinical trials that includes substantial evidence of safety, purity and potency or efficacy from results of nonclinical testing and clinical trials;

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

a determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the application for review;

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

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 cGMP, and of selected clinical investigation sites to assess compliance with Good Clinical Practices (“GCP”);

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 cGMP, and of selected clinical investigation

sites to assess compliance with current Good Clinical Practices, or cGCP;

FDA review and approval, or licensure, of the NDA or BLA to permit commercial marketing of the product for particular indications for use in the United States.

Preclinical and Clinical Development

Prior to beginning the

first clinical trial with a product candidate, 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(s) for clinical trials.

The IND also includes results of animal and in vitro studies assessing the

toxicology, pharmacokinetics, pharmacology, and pharmacodynamic characteristics of the product candidate;

chemistry, manufacturing,

and controls information;

and any available human data or literature to support the use of the investigational product.

must become effective before human clinical trials may begin.

The IND automatically becomes effective 30 days after receipt by

the FDA, unless the FDA, within the 30-day time period, raises safety concerns or questions about the proposed clinical trial.

In such a case, the IND may be placed on clinical hold and the IND sponsor and the FDA must resolve any outstanding concerns or

questions before the clinical trial can begin.

Submission of an IND therefore may or may not result in FDA authorization to begin

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 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.

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 trial until completed.

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 trial sponsor, known as a data safety

monitoring board, 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.

Phase 1—The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition.

Prior to beginning the first

clinical trial with a product candidate, 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(s)

for clinical trials.

The IND also includes results of animal and in vitro studies assessing the toxicology, pharmacokinetics, pharmacology,

and pharmacodynamic characteristics of the product candidate;

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.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA, within the 30-day time period, raises safety

concerns or questions about the proposed clinical trial.

In such a case, the IND may be placed on clinical hold and the IND sponsor and

the FDA must resolve any outstanding concerns or questions before the clinical trial can begin.

Submission of an IND therefore may or

may not result in FDA authorization to begin 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 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 trial 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 trial sponsor, known as a data safety monitoring board, 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.

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.

Phase 1—The investigational product is initially introduced into healthy human subjects or patients with the target disease or condition.

These trials are designed to test the safety, dosage tolerance, absorption, metabolism, distribution and elimination of the investigational product in humans, the side effects associated with increasing doses, and, if possible, to gain early evidence on effectiveness.

Phase 2—The investigational product is administered to a limited patient population with a specified disease or condition to evaluate the preliminary efficacy, optimal dosages and dosing schedule and to identify possible adverse side effects and safety risks.

Multiple Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.

Phase 3—The investigational product is administered to an expanded patient population to further evaluate dosage, to provide statistically significant evidence of clinical efficacy and to further test for safety, generally at multiple geographically dispersed clinical trial sites.

These clinical trials are intended to establish the overall risk/benefit ratio of the investigational product and to provide an adequate basis for product approval.

In some cases, the FDA

may require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information

about the product.

In some cases, the FDA may

require, or companies may voluntarily pursue, additional clinical trials after a product is approved to gain more information about the

These so- called Phase 4 trials may be made a condition to approval of the NDA or BLA.

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.

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.

Application Submission, Review and Approval

Assuming successful completion

of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical

studies and clinical trials are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for one

or more indications.

The NDA or BLA must include all relevant data available from pertinent preclinical and clinical trials, including

negative or ambiguous results as well as positive findings, together with detailed information relating to the product’s

chemistry, manufacturing, controls, and proposed labeling, among other things.

The submission of an NDA or BLA requires payment

of a substantial application user fee to FDA, unless a waiver or exemption applies.

Once an NDA or BLA has

been submitted, the FDA’s goal is to review standard applications within ten months after it accepts the application for

filing, or, if the application qualifies for priority review, six months after the FDA accepts the application for filing.

standard and priority reviews, the review process is often significantly extended by FDA requests for additional information or

clarification.

The FDA reviews the application 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.

Before approving an NDA or BLA, the FDA will typically inspect the facility or facilities where the product is manufactured.

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 an NDA or BLA, the FDA will typically inspect one or more clinical sites to assure compliance with GCP.

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.

of all required testing in accordance with all applicable regulatory requirements, the results of product development, nonclinical studies

and clinical trials are submitted to the FDA as part of an NDA or BLA requesting approval to market the product for one or more indications.

The NDA or BLA must include all relevant data available from pertinent preclinical and clinical trials, including negative or ambiguous

results as well as positive findings, together with detailed information relating to the product’s chemistry, manufacturing, controls,

and proposed labeling, among other things.

The submission of an NDA or BLA requires payment of a substantial application user fee to FDA,

unless a waiver or exemption applies.

Once an NDA or BLA has been

submitted, the FDA’s goal is to review standard applications within ten months after it 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 is often significantly extended by FDA requests for additional information or clarification.

The FDA reviews

the application 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.

Before approving an NDA or BLA, the FDA will typically

inspect the facility or facilities where the product is manufactured.

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 an NDA or BLA, the FDA will typically inspect one or more clinical

sites to assure compliance with GCP.

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.

The FDA may issue an approval

letter or a Complete Response letter.

An approval letter authorizes commercial marketing of the product with specific prescribing

information for specific indications.

A Complete Response letter will describe all of the deficiencies that the FDA has identified

in the NDA or BLA.

In issuing the Complete Response letter, the FDA may recommend actions that the applicant might take to place

the application in condition for approval, including requests for additional information or clarification.

The FDA may delay or

refuse approval of an application if applicable regulatory criteria are not satisfied, require additional testing or information

and/or require post-marketing testing and surveillance to monitor safety or efficacy of a product.

If regulatory approval

of a product is granted, such approval will be granted for particular indications and may entail limitations on the indicated uses

for which such product may be marketed.

For example, the FDA may impose 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.

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.

FDA may require one or more Phase 4 post-market trials 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

An approval letter authorizes commercial marketing of the product with specific prescribing information

for specific indications.

A Complete Response letter will describe all of the deficiencies that the FDA has identified in the NDA or BLA.

In issuing the Complete Response letter, the FDA may recommend actions that the applicant might take to place the application in condition

for approval, including requests for additional information or clarification.

The FDA may delay or refuse approval of an application if

applicable regulatory criteria are not satisfied, require additional testing or information and/or require post-marketing testing and

surveillance to monitor safety or efficacy of a product.

If regulatory approval of a product is granted, such approval will

be granted for particular indications and may entail limitations on the indicated uses for which such product may be marketed.

the FDA may impose a Risk Evaluation and Mitigation Strategy, or REMS, to ensure the benefits of the product outweigh its risks.

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.

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 trials 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 trials.

Orphan Drug Designation

Under the Orphan Drug

Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a disease

or condition that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States

for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic

for this type of disease or condition will be recovered from sales in the United States for that drug or biologic.

Orphan designation

must be requested before submitting an NDA or BLA.

After the FDA grants orphan designation, the generic identity of the therapeutic

agent and its potential orphan use are disclosed publicly by the FDA.

The orphan drug designation does not convey any advantage

in, or shorten the duration of, the regulatory review or approval process.

If a product that has

orphan designation subsequently receives the first FDA approval for the disease for which it has such designation, the product

is entitled to orphan exclusivity, which means that the FDA may not approve any other applications, including a full NDA or BLA,

to market the same product for the same indication for seven years, except in limited circumstances, such as a showing of clinical

superiority to the product with orphan drug exclusivity.

Orphan exclusivity does not prevent FDA from approving a different drug

or biologic for the same disease or condition, or the same drug or biologic for a different disease or condition.

Among the other

benefits of orphan drug designation are tax credits for certain research and a waiver of the BLA application fee.

Under the Orphan Drug Act,

the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a disease or condition

that affects fewer than 200,000 individuals in the United States, or more than 200,000 individuals in the United States for which there

is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic for this type of

disease or condition will be recovered from sales in the United States for that drug or biologic.

Orphan designation must be requested

before submitting an NDA or BLA.

After the FDA grants orphan designation, the generic identity of the therapeutic agent and its potential

orphan use are disclosed publicly by the FDA.

The orphan drug designation does not convey any advantage in, or shorten the duration of,

the regulatory review or approval process.

If a product that has orphan

designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to

orphan exclusivity, which means that the FDA may not approve any other applications, including a full NDA or BLA, to market the same product

for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with

orphan drug exclusivity.

Orphan exclusivity does not prevent FDA from approving a different drug or biologic for the same disease or condition,

or the same drug or biologic for a different disease or condition.

Among the other benefits of orphan drug designation are tax credits

for certain research and a waiver of the BLA application fee.

A designated orphan product

may not receive orphan exclusivity if it is approved for a use that is broader than the indication for which it received orphan

In addition, exclusive marketing rights in the United States may be lost if the FDA later determines that the request

for designation was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet

the needs of patients with the rare disease or condition.

may not receive orphan exclusivity if it is approved for a use that is broader than the indication for which it received orphan designation.

In addition, exclusive marketing rights in the United States may be lost if the FDA later determines that the request for designation

was materially defective or if the manufacturer is unable to assure sufficient quantities of the product to meet the needs of patients

with the rare disease or condition.

The FDA incentivizes the

development of drugs and biologics that meet the definition of a “rare pediatric disease,”

defined to mean a serious

or life-threatening disease in which the serious of life-threatening manifestations primarily affect individuals aged from birth

to 18 years and the disease affects fewer than 200,000 individuals in the United States or affects 200,000 or more in the United

States and for which there is no reasonable expectation that the cost of developing and making in the United States a drug for

such disease or condition will be received from sales in the United States of such drug.

The sponsor of a product candidate for

a rare pediatric disease may be eligible for a voucher that can be used to obtain a priority review for a subsequent human drug

or biologic application after the date of approval of the rare pediatric disease drug product, referred to as a priority review

voucher, or PRV.

A rare pediatric disease designation does not guarantee that a sponsor will receive a PRV upon approval of its

If a PRV is received, it may be sold or transferred an unlimited number of times.

Congress has extended the PRV program

until September 30, 2024, with the potential for PRVs to be granted until September 30, 2026.

development of drugs and biologics that meet the definition of a “rare pediatric disease” defined to mean a serious or life-threatening

disease in which the serious of life-threatening manifestations primarily affect individuals aged from birth to 18 years and the disease

affects fewer than 200,000 individuals in the United States or affects 200,000 or more in the United States and for which there is no

reasonable expectation that the cost of developing and making in the United States a drug for such disease or condition will be received

from sales in the United States of such drug.

The sponsor of a product candidate for a rare pediatric disease may be eligible for a voucher

that can be used to obtain a priority review for a subsequent human drug or biologic application after the date of approval of the rare

pediatric disease drug product, referred to as a priority review voucher, or PRV.

A rare pediatric disease designation does not guarantee

that a sponsor will receive a PRV upon approval of its NDA or BLA.

If a PRV is received, it may be sold or transferred an unlimited number

Congress has extended the PRV program until September 30, 2024, with the potential for PRVs to be granted until September

Post-Approval Requirements

Any products manufactured

or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other

things, requirements relating to quality control and quality assurance, record-keeping, reporting of adverse experiences, periodic

reporting, product sampling and distribution, and advertising and promotion of the product.

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.

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

Biopharmaceutical 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 cGMP, which impose certain procedural and documentation requirements upon sponsors and their third-party manufacturers.

to the manufacturing process are strictly regulated, and, depending on the significance of the change, may require prior FDA approval

before being implemented.

FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting

requirements upon sponsor and third-party manufacturers.

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

in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by the FDA, including, among other things,

requirements relating to quality control and quality assurance, record-keeping, reporting of adverse experiences, periodic reporting,

product sampling and distribution, and advertising and promotion of the product.

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.

There also are continuing user

fee requirements, under which FDA assesses an annual program fee for each product identified in an approved NDA or BLA.

Biopharmaceutical

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 cGMP, which impose certain procedural

and documentation requirements upon sponsors and their 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.

FDA regulations also require

investigation and correction of any deviations from cGMP and impose reporting requirements upon sponsor and third-party manufacturers.

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

with cGMP and other aspects of regulatory compliance.

The FDA may withdraw approval

if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.

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

or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling

to add new safety information;

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 trials to assess new safety risks;

or imposition of

distribution restrictions or other restrictions under a REMS program.

or imposition of distribution restrictions

or other restrictions under a REMS program.

Other potential consequences include, among other things:

6 unchanged sentences

the marketing, labeling, advertising and promotion of biopharmaceuticals.

A company can make only those claims relating to safety

and efficacy, purity and potency of a biopharmaceutical 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 of a biopharmaceutical that are approved by the FDA and in accordance with the provisions of the approved

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

Failure to comply with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising

and potential civil and criminal penalties.

Physicians may prescribe legally available products for uses that are not described

in the product’s labeling and that differ from those approved by the FDA.

Failure to comply

with these requirements can result in, among other things, adverse publicity, warning letters, corrective advertising and potential civil

and criminal penalties.

Physicians may prescribe legally available products for uses that are not described in the product’s labeling

and that differ from those approved by the FDA.

Such off-label uses are common across medical specialties.

Physicians may believe that such off-label uses are the best treatment for many patients in varied circumstances.

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.

Physicians may believe that

such off-label uses are the best treatment for many patients in varied circumstances.

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.

Biosimilars and Reference Product Exclusivity

The Patient Protection

and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act (ACA), signed into law in 2010, includes

a subtitle called the Biologics Price Competition and Innovation Act of 2009 (BPCIA), which created an abbreviated approval pathway

for biological products that are biosimilar to or interchangeable with an FDA-approved reference biological product.

number of biosimilars have been licensed under the BPCIA, and numerous biosimilars have been approved in Europe.

The FDA has issued

several guidance documents outlining its approach to the review and approval of biosimilars.

The Patient Protection and Affordable Care Act, as amended by the Health

Care and Education Reconciliation Act, or ACA, signed into law in 2010, includes a subtitle called the Biologics Price Competition and

Innovation Act of 2009, or BPCIA, which created an abbreviated approval pathway for biological products that are biosimilar to or interchangeable

with an FDA-approved reference biological product.

To date, a number of biosimilars have been licensed under the BPCIA, and numerous biosimilars

have been approved in Europe.

The FDA has issued several guidance documents outlining its approach to the 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, can be shown through analytical studies, animal studies, and a clinical trial or trials.

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.

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 of the abbreviated approval pathway that are still being worked out

that there be no clinically meaningful differences between the biological product and the reference product in terms of safety, purity,

and potency, can be shown through analytical studies, animal studies, and a clinical trial or trials.

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.

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 of the abbreviated approval pathway that are still being worked out by the FDA.

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

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.

for a biosimilar product may not be submitted to the FDA until four years following the date that the reference product was first licensed

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.

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

The BPCIA is complex and

continues to be interpreted and implemented by the FDA.

In addition, recent government proposals have sought to reduce the 12-year

reference product exclusivity period.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have

also been the subject of recent litigation.

As a result, the ultimate impact, implementation, and impact of the BPCIA is subject

to significant uncertainty.

In addition, recent government proposals have sought to reduce the 12-year reference

product exclusivity period.

Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the

subject of recent litigation.

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

Healthcare Laws and Compliance

In the United States,

our current and future operations are subject to regulation by various federal, state and local authorities in addition to the

FDA, including but not limited to, the Centers for Medicare &Medicaid Services (“CMS”), other divisions of

Department of Health and Human Services (“HHS”) (such as the Office of Inspector General, Office for Civil

Rights and the Health Resources and Service Administration), the U.S.

Department of Justice (“DOJ”) and individual

In the United States, our current and future operations are subject

to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, the Centers for Medicare

& Medicaid Services, or CMS, other divisions of the U.S.

Department of Health and Human Services, or HHS, (such as the Office of Inspector

General, Office for Civil Rights and the Health Resources and Service Administration), the U.S.

Department of Justice, or DOJ and individual

Attorney offices within the DOJ, and state and local governments.

For example, our clinical research, sales, marketing and

scientific/educational grant programs will need to comply with the anti-fraud and abuse provisions of the Social Security Act,

the false claims laws, the privacy and security provisions of the Health Insurance Portability and Accountability Act (“HIPAA”),

and similar state laws, each as amended, as applicable.

For example, our clinical research, sales, marketing and scientific/educational

grant programs will need to comply with the anti-fraud and abuse provisions of the Social Security Act, the false claims laws, the privacy

and security provisions of the Health Insurance Portability and Accountability Act, or HIPAA, and similar state laws, each as amended,

as applicable.

The federal Anti-Kickback

Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving

any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing,

ordering or arranging for the purchase, lease or order of any item or service reimbursable, in whole or in part, under Medicare,

Medicaid or other federal healthcare programs.

Statute prohibits, among other things, any person or entity, from knowingly and willfully offering, paying, soliciting or receiving any

remuneration, directly or indirectly, overtly or covertly, in cash or in kind, to induce or in return for purchasing, leasing, ordering

or arranging for the purchase, lease or order of any item or service reimbursable, in whole or in part, under Medicare, Medicaid or other

federal healthcare programs.

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

The Anti-Kickback Statute has been interpreted to apply to arrangements between therapeutic product manufacturers on one hand and

prescribers, purchasers, and formulary managers on the other.

There are a number of statutory exceptions and regulatory safe harbors

protecting some common activities from prosecution.

The exceptions and safe harbors are drawn narrowly and practices that involve

remuneration that may be alleged to be intended to induce prescribing, purchasing or recommending may be subject to scrutiny if

they do not qualify for an exception or 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 Anti-Kickback 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.

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

Additionally, the intent

standard under the Anti-Kickback Statute was amended by the Patient Protection and Affordable Care Act, as amended by the Health

Care and Education Reconciliation Act of 2010 (the “Affordable Care Act”) to a stricter standard such that a person

or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order to have committed a

In addition, the Affordable Care Act codified case law that a claim including items or services resulting from a violation

of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal False Claims Act (the

“FCA”) (discussed below).

The Anti-Kickback Statute

has been interpreted to apply to arrangements between therapeutic product manufacturers on one hand and prescribers, purchasers, and formulary

managers on the other.

There are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution.

The exceptions and safe harbors are drawn narrowly and practices that involve remuneration that may be alleged to be intended to induce

prescribing, purchasing or recommending may be subject to scrutiny if they do not qualify for an exception or safe harbor.

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 Anti-Kickback 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.

Our practices may not in all cases meet all of the criteria for protection under

a statutory exception or regulatory safe harbor.

Additionally, the intent standard under the Anti-Kickback Statute was

amended by the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or

the Affordable Care Act, to a stricter standard such that a person or entity no longer needs to have actual knowledge of the statute or

specific intent to violate it in order to have committed a violation.

In addition, the Affordable Care Act codified case law that a claim

including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for

purposes of the federal False Claims Act, or the FCA (discussed below).

The federal false claims,

including the FCA, and civil monetary penalty laws, which imposes significant penalties and can be enforced by private citizens

through civil qui tam actions, prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented,

a false or fraudulent claim for payment to, or approval by, the federal government, including federal healthcare programs, such

as Medicare and Medicaid, knowingly making, using, or causing to be made or used a false record or statement material to a false

or fraudulent claim to the federal government, or knowingly making a false statement to improperly avoid, decrease or conceal an

obligation to pay money to the federal government.

A claim includes “any request or demand”

for money or property presented

For instance, historically, pharmaceutical and other healthcare companies have been prosecuted under these

laws for allegedly providing free product to customers with the expectation that the customers would bill federal programs for

Other companies have been prosecuted for causing false claims to be submitted because of the companies’

of the product for unapproved, off-label, and thus generally non-reimbursable, uses.

including the FCA, and civil monetary penalty laws, which imposes significant penalties and can be enforced by private citizens through

civil qui tam actions, prohibit any person or entity from, among other things, knowingly presenting, or causing to be presented, a false

or fraudulent claim for payment to, or approval by, the federal government, including federal healthcare programs, such as Medicare and

Medicaid, knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to

the federal government, or knowingly making a false statement to improperly avoid, decrease or conceal an obligation to pay money to the

federal government.

A claim includes “any request or demand” for money or property presented to the U.S.

For instance,

historically, pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly providing free product

to customers with the expectation that the customers would bill federal programs for the product.

Other companies have been prosecuted

for causing false claims to be submitted because of the companies’ marketing of the product for unapproved, off-label, and thus

generally non-reimbursable, uses.

HIPAA created additional

federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme

to defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by,

or under the control or custody of, any healthcare benefit program, including private third-party payors, willfully obstructing

a criminal investigation of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by trick, scheme

or device, a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of

or payment for healthcare benefits, items or services.

Like the Anti-Kickback Statute, the Affordable Care Act amended the intent

standard for certain healthcare fraud statutes under HIPAA such that a person or entity no longer needs to have actual knowledge

of the statute or specific intent to violate it in order to have committed a violation.

Also, many states have

similar, and typically more prohibitive, fraud and abuse statutes or regulations that apply to items and services reimbursed under

Medicaid and other state programs, or, in several states, apply regardless of the payor.

We may be subject to data

privacy and security regulations by both the federal government and the states in which it conducts business.

HIPAA, as amended

by the Health Information Technology for Economic and Clinical Health Act (HITECH) and its implementing regulations, imposes requirements

on “covered entities,”

including certain healthcare providers, health plans, and healthcare clearinghouses, as well

as their respective “business associates”

that create, receive, maintain or transmit individually identifiable health

information for or on behalf of a covered entity as well as their covered subcontractors relating to the privacy, security and

transmission of individually identifiable health information.

Among other things, HITECH makes HIPAA’s privacy and security

standards directly applicable to business associates, independent contractors, or agents of covered entities that receive or obtain

protected health information in connection with providing a service on behalf of a covered entity.

HITECH also created four new

tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to 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.

In addition, many state laws govern the

privacy and security of health information in specified circumstances, many of which differ from each other in significant ways,

are often not pre-empted by HIPAA, and may have a more prohibitive effect than HIPAA, thus complicating compliance efforts.

We may develop

products that, once approved, may be administered by a physician.

federal criminal statutes that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to

defraud or to obtain, by means of false or fraudulent pretenses, representations or promises, any money or property owned by, or under

the control or custody of, any healthcare benefit program, including private third-party payors, willfully obstructing a criminal investigation

of a healthcare offense, and knowingly and willfully falsifying, concealing or covering up by trick, scheme or device, a material fact

or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits,

items or services.

Like the Anti-Kickback Statute, the Affordable Care Act amended the intent standard for certain healthcare fraud statutes

under HIPAA such that a person or entity no longer needs to have actual knowledge of the statute or specific intent to violate it in order

to have committed a violation.

Also, many states have similar,

and typically more prohibitive, fraud and abuse statutes or regulations that apply to items and services reimbursed under Medicaid and

other state programs, or, in several states, apply regardless of the payor.

We may be subject to data privacy and security regulations by both

the federal government and the states in which it conducts business.

HIPAA, as amended by the Health Information Technology for Economic

and Clinical Health Act, or HITECH, and its implementing regulations, imposes requirements on “covered entities,” including

certain healthcare providers, health plans, and healthcare clearinghouses, as well as their respective “business associates”

that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity as well as

their covered subcontractors relating to the privacy, security and transmission of individually identifiable health information.

other things, HITECH makes HIPAA’s privacy and security standards directly applicable to business associates, independent contractors,

or agents of covered entities that receive or obtain protected health information in connection with providing a service on behalf of

a covered entity.

HITECH also created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly

applicable to 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.

many state laws govern the privacy and security of health information in specified circumstances, many of which differ from each other

in significant ways, are often not pre-empted by HIPAA, and may have a more prohibitive effect than HIPAA, thus complicating compliance

We may develop products that,

once approved, may be administered by a physician.

Under currently applicable U.S.

law, certain products not usually

self-administered (including injectable drugs) may be eligible for coverage under Medicare through Medicare Part B.

Medicare Part

B is part of original Medicare, the federal health care program that provides health care benefits to the aged and disabled, and

covers outpatient services and supplies, including certain biopharmaceutical products, that are medically necessary to treat a

beneficiary’s health condition.

As a condition of receiving Medicare Part B reimbursement for a manufacturer’s eligible

drugs, the manufacturer is required to participate in other government healthcare programs, including the Medicaid Drug Rebate

Program and the 340B Drug Pricing Program.

The Medicaid Drug Rebate Program requires pharmaceutical manufacturers to enter into

and have in effect a national rebate agreement with the Secretary of HHS as a condition for states to receive federal matching

funds for the manufacturer’s outpatient drugs furnished to Medicaid patients.

Under the 340B Drug Pricing Program, the manufacturer

must extend discounts to entities that participate in the program.

In addition, many pharmaceutical

manufacturers must calculate and report certain price reporting metrics to the government, such as average sales price (“ASP”)

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 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 United States.

It is difficult to predict how Medicare coverage and reimbursement policies will be applied to our products

in the future and coverage and reimbursement under different federal healthcare programs are not always consistent.

Medicare reimbursement

rates may also reflect budgetary constraints placed on the Medicare program.

law, certain products not usually self-administered

(including injectable drugs) may be eligible for coverage under Medicare through Medicare Part B.

Medicare Part B is part of original

Medicare, the federal health care program that provides health care benefits to the aged and disabled, and covers outpatient services

and supplies, including certain biopharmaceutical products, that are medically necessary to treat a beneficiary’s health condition.

As a condition of receiving Medicare Part B reimbursement for a manufacturer’s eligible drugs, the manufacturer is required to participate

in other government healthcare programs, including the Medicaid Drug Rebate Program and the 340B Drug Pricing Program.

The Medicaid Drug

Rebate Program requires pharmaceutical manufacturers to enter into and have in effect a national rebate agreement with the Secretary of

HHS as a condition for states to receive federal matching funds for the manufacturer’s outpatient drugs furnished to Medicaid patients.

Under the 340B Drug Pricing Program, the manufacturer must extend discounts to entities that participate in the program.

In addition, many pharmaceutical manufacturers must calculate and report

certain price reporting metrics to the government, such as average sales price, or ASP, 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 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 United States.

It is difficult to predict how Medicare coverage and

reimbursement policies will be applied to our products in the future and coverage and reimbursement under different federal healthcare

programs are not always consistent.

Medicare reimbursement rates may also reflect budgetary constraints placed on the Medicare program.

Additionally, the federal

Physician Payments Sunshine Act (the “Sunshine Act”), within the Affordable Care Act, and its implementing regulations,

require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare,

Medicaid or the Children’s Health Insurance Program (with certain exceptions) report annually to CMS information related

to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists,

podiatrists and chiropractors) and teaching hospitals, or to entities or individuals at the request of, or designated on behalf

of, the physicians and teaching hospitals and to report annually certain ownership and investment interests held by physicians

and their immediate family members.

Beginning in 2022, applicable manufacturers also will be required to report such information

regarding its relationships with physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants,

certified registered nurse anesthetists and certified nurse midwives during the previous year.

Failure to report accurately could

result in penalties.

In addition, many states also govern the reporting of payments or other transfers of value, many of which

differ from each other in significant ways, are often not pre-empted, and may have a more prohibitive effect than the Sunshine

Act, thus further complicating compliance efforts.

In order to distribute

products commercially, we must comply with state laws that require the registration of manufacturers and wholesale distributors

of drug and biological products in a state, including, in certain states, manufacturers and distributors who ship products into

the state even if such manufacturers or distributors have no place of business within the state.

Some states also impose requirements

on manufacturers and distributors to establish the pedigree of product in the chain of distribution, including some states that

require manufacturers and others to adopt new technology capable of tracking and tracing product as it moves through the distribution

Several states and/or localities have enacted legislation requiring pharmaceutical and biotechnology companies to establish

marketing compliance programs, file periodic reports with the state, make periodic public disclosures on sales, marketing, pricing,

clinical trials and other activities, and/or register their sales representatives, as well as to prohibit pharmacies and other

healthcare entities from providing certain physician prescribing data to pharmaceutical and biotechnology companies for use in

sales and marketing, and to prohibit certain other sales and marketing practices.

All of our activities are potentially subject

to federal and state consumer protection and unfair competition laws.

Physician Payments Sunshine Act, or the Sunshine Act, within the Affordable Care Act, and its implementing regulations, require that certain

manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s

Health Insurance Program (with certain exceptions) report annually to CMS information related to certain payments or other transfers of

value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare

professionals (such as physicians assistants and nurse practitioners) and teaching hospitals, or to entities or individuals at the request

of, or designated on behalf of, the physicians and teaching hospitals and to report annually certain ownership and investment interests

held by physicians and their immediate family members.

Failure to report accurately could result in penalties.

In addition, many states

also govern the reporting of payments or other transfers of value, many of which differ from each other in significant ways, are often

not pre-empted, and may have a more prohibitive effect than the Sunshine Act, thus further complicating compliance efforts.

In order to distribute products

commercially, we must comply with state laws that require the registration of manufacturers and wholesale distributors of drug and biological

products in a state, including, in certain states, manufacturers and distributors who ship products into the state even if such manufacturers

or distributors have no place of business within the state.

Some states also impose requirements on manufacturers and distributors to

establish the pedigree of product in the chain of distribution, including some states that require manufacturers and others to adopt new

technology capable of tracking and tracing product as it moves through the distribution chain.

Several states and/or localities have enacted

legislation requiring pharmaceutical and biotechnology companies to establish marketing compliance programs, file periodic reports with

the state, make periodic public disclosures on sales, marketing, pricing, clinical trials and other activities, and/or register their

sales representatives, as well as to prohibit pharmacies and other healthcare entities from providing certain physician prescribing data

to pharmaceutical and biotechnology companies for use in sales and marketing, and to prohibit certain other sales and marketing practices.

All of our activities are potentially subject to federal and state consumer protection and unfair competition laws.

Ensuring business arrangements

with third parties comply with applicable healthcare laws and regulations is a costly endeavor.

If our operations are found to

be in violation of any of the federal and state healthcare laws described above or any other current or future governmental regulations

that apply to it, it may be subject to penalties, including without limitation, significant civil, criminal and/or administrative

penalties, damages, fines, disgorgement, imprisonment, exclusion from participation in government programs, such as Medicare and

Medicaid, injunctions, private “qui tam”

actions brought by individual whistleblowers in the name of the government,

or refusal to allow it to enter into government contracts, contractual damages, reputational harm, administrative burdens, diminished

profits and future earnings, additional reporting obligations and oversight if we become subject to a corporate integrity agreement

or other agreement to resolve allegations of non-compliance with these laws, and the curtailment or restructuring of its operations,

any of which could adversely affect our ability to operate our business and our results of operations.

If our operations are found to be in violation

of any of the federal and state healthcare laws described above or any other current or future governmental regulations that apply to

it, it may be subject to penalties, including without limitation, significant civil, criminal and/or administrative penalties, damages,

fines, disgorgement, imprisonment, exclusion from participation in government programs, such as Medicare and Medicaid, injunctions, private

“qui tam” actions brought by individual whistleblowers in the name of the government, or refusal to allow it to enter into

government contracts, contractual damages, reputational harm, administrative burdens, diminished profits and future earnings, additional

reporting obligations and oversight if we become subject to a corporate integrity agreement or other agreement to resolve allegations

of non-compliance with these laws, and the curtailment or restructuring of its operations, any of which could adversely affect our ability

to operate our business and our results of operations.

Coverage, Pricing and Reimbursement

Significant uncertainty

exists as to the coverage and reimbursement status of any product candidates for which we may obtain regulatory approval.

United States and in foreign markets, sales of any products for which we receive regulatory approval for commercial sale will depend,

in part, on the extent to which third-party payors provide coverage and establish adequate reimbursement levels for such products.

In the United States, third-party payors include federal and state healthcare programs, private managed care providers, health

insurers and other organizations.

Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and

Medicaid in the United States, and commercial payors are critical to new product acceptance.

Significant uncertainty exists

as to the coverage and reimbursement status of any product candidates for which we may obtain regulatory approval.

In the United States

and in foreign markets, sales of any products for which we receive regulatory approval for commercial sale will depend, in part, on the

extent to which third-party payors provide coverage and establish adequate reimbursement levels for such products.

In the United States,

third-party payors include federal and state healthcare programs, private managed care providers, health insurers and other organizations.

Adequate coverage and reimbursement from governmental healthcare programs, such as Medicare and Medicaid in the United States, and commercial

payors are critical to new product acceptance.

Our ability to commercialize

any products successfully also will depend in part on the extent to which coverage and reimbursement for these products and related

treatments will be available from government health administration authorities, private health insurers and other organizations.

Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide

which therapeutics they will pay for and establish reimbursement levels.

Coverage and reimbursement by a third-party payor may

depend upon a number of factors, including the third-party payor’s determination that use of a therapeutic is:

any products successfully also will depend in part on the extent to which coverage and reimbursement for these products and related treatments

will be available from government health administration authorities, private health insurers and other organizations.

Government authorities

and other third-party payors, such as private health insurers and health maintenance organizations, decide which therapeutics they will

pay for and establish reimbursement levels.

Coverage and reimbursement by a third-party payor may depend upon a number of factors, including

the third-party payor’s determination that use of a therapeutic is:

a covered benefit under its health plan;

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neither experimental nor investigational.

We cannot be sure that

reimbursement will be available for any product that it commercializes and, if coverage and reimbursement are available, what the

level of reimbursement will be.

Coverage may also be more limited than the purposes for which the product is approved by the FDA

or comparable foreign regulatory authorities.

Reimbursement may impact the demand for, or the price of, any product for which we

obtain regulatory approval.

Third-party payors are

increasingly challenging the price, examining the medical necessity, and reviewing the cost-effectiveness of medical products,

therapies and services, in addition to questioning their safety and efficacy.

Obtaining reimbursement for our products may be particularly

difficult because of the higher prices often associated with branded drugs and drugs administered under the supervision of a physician.

We may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness

of our products, in addition to the costs required to obtain FDA approvals.

Our product candidates may not be considered medically

necessary or cost-effective.

Obtaining coverage and reimbursement approval of a product from a government or other third-party

payor is a time-consuming and costly process that could require us to provide to each payor supporting scientific, clinical and

cost-effectiveness data for the use of our product on a payor-by-payor basis, with no assurance that coverage and adequate reimbursement

will be obtained.

A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate

will be approved.

Further, one payor’s determination to provide coverage for a product does not assure that other payors

will also provide coverage for the product.

Adequate third-party reimbursement may not be available to enable us to maintain price

levels sufficient to realize an appropriate return on our investment in product development.

If reimbursement is not available

or is available only at limited levels, we may not be able to successfully commercialize any product candidate that it successfully

Different pricing and

reimbursement schemes exist in other countries.

In the European Union, governments influence the price of biopharmaceutical products

through their pricing and reimbursement rules and control of national health care systems that fund a large part of the cost of

those products to consumers.

Some jurisdictions operate positive and negative list systems under which products may only be marketed

once a reimbursement price has been agreed.

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.

Other member states allow companies to fix their own prices for medicines but monitor and control company profits.

pressure on health care costs has become intense.

As a result, increasingly high barriers are being erected to the entry of new

In addition, in some countries, cross-border imports from low-priced markets exert a commercial pressure on pricing within

We cannot be sure that reimbursement

will be available for any product that it commercializes and, if coverage and reimbursement are available, what the level of reimbursement

Coverage may also be more limited than the purposes for which the product is approved by the FDA or comparable foreign regulatory

Reimbursement may impact the demand for, or the price of, any product for which we obtain regulatory approval.

Third-party payors are increasingly

challenging the price, examining the medical necessity, and reviewing the cost-effectiveness of medical products, therapies and services,

in addition to questioning their safety and efficacy.

Obtaining reimbursement for our products may be particularly difficult because of

the higher prices often associated with branded drugs and drugs administered under the supervision of a physician.

We may need to conduct

expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of our products, in addition to

the costs required to obtain FDA approvals.

Our product candidates may not be considered medically necessary or cost-effective.

coverage and reimbursement approval of a product from a government or other third-party payor is a time-consuming and costly process that

could require us to provide to each payor supporting scientific, clinical and cost-effectiveness data for the use of our product on a

payor-by-payor basis, with no assurance that coverage and adequate reimbursement will be obtained.

A payor’s decision to provide

coverage for a product does not imply that an adequate reimbursement rate will be approved.

Further, one payor’s determination to

provide coverage for a product does not assure that other payors will also provide coverage for the product.

Adequate third-party reimbursement

may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development.

If reimbursement is not available or is available only at limited levels, we may not be able to successfully commercialize any product

candidate that it successfully develops.

Different pricing and reimbursement

schemes exist in other countries.

In the European Union, governments influence the price of biopharmaceutical products through their pricing

and reimbursement rules and control of national health care systems that fund a large part of the cost of those products to consumers.

Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has

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.

Other member states allow companies to fix

their own prices for medicines but monitor and control company profits.

The downward pressure on health care costs has become intense.

As a result, increasingly high barriers are being erected to the entry of new products.

In addition, in some countries, cross-border imports

from low-priced markets exert a commercial pressure on pricing within a country.

The marketability of any

product candidates for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors

fail to provide adequate coverage and reimbursement.

In addition, emphasis on managed care, the increasing influence of health

maintenance organizations, and additional legislative changes in the United States has increased, and we expect will continue to

increase, the pressure on healthcare pricing.

The downward pressure on the rise in healthcare costs in general, particularly prescription

medicines, medical devices and surgical procedures and other treatments, has become very intense.

Coverage policies and third-party

reimbursement rates may change at any time.

Even if favorable coverage and reimbursement status is attained for one or more products

for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

product candidates for which we receive regulatory approval for commercial sale may suffer if the government and third-party payors fail

to provide adequate coverage and reimbursement.

In addition, emphasis on managed care, the increasing influence of health maintenance

organizations, and additional legislative changes in the United States has increased, and we expect will continue to increase, the pressure

on healthcare pricing.

The downward pressure on the rise in healthcare costs in general, particularly prescription medicines, medical

devices and surgical procedures and other treatments, has become very intense.

Coverage policies and third-party reimbursement rates may

change at any time.

Even if favorable coverage and reimbursement status is attained for one or more products for which we receive regulatory

approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Healthcare Reform

In the United States and

some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes

regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval

activities, and affect the ability to profitably sell product candidates for which marketing approval is obtained.

makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems

with the stated goals of containing healthcare costs, improving quality and/or expanding access.

In the United States, the pharmaceutical

industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding

the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post-approval activities,

and affect the ability to profitably sell product candidates for which marketing approval is obtained.

Among policy makers and payors

in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of

containing healthcare costs, improving quality and/or expanding access.

In the United States, the pharmaceutical industry has been a particular

focus of these efforts and has been significantly affected by major legislative initiatives.

For example, the Affordable

Care Act has substantially changed healthcare financing and delivery by both governmental and private insurers.

Among the Affordable

Care Act provisions of importance to the pharmaceutical and biotechnology industries, in addition to those otherwise described

above, are the following:

Among the Affordable Care

Act provisions of importance to the pharmaceutical and biotechnology industries, in addition to those otherwise described above, are the

an annual, nondeductible fee on any entity that manufactures or imports certain specified branded prescription drugs and biologic agents apportioned among these entities according to their market share in some government healthcare programs;

an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for most branded and generic drugs, respectively, and capped the total rebate amount for innovator drugs at 100% of the Average Manufacturer Price (the “AMP”);

a new Medicare Part D coverage gap discount program, in which manufacturers must now agree to offer 70% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers’

outpatient drugs to be covered under Medicare Part D;

extension of manufacturers’

Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’

Medicaid rebate liability;

expansion of the entities eligible for discounts under the 340B Drug Discount Program;

an extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

an expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals and by adding new mandatory eligibility categories for individuals with income at or below 133% of the federal poverty level, thereby potentially increasing manufacturers’ Medicaid rebate liability;

an expansion of the entities eligible for discounts under the 340B Drug Discount Program;

a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;

expansion of healthcare fraud and abuse laws, including the FCA and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance;

an expansion of healthcare fraud and abuse laws, including the FCA and the Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance;

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;

requirements to report certain financial arrangements with physicians and teaching hospitals;

a requirement to report certain financial arrangements with physicians and teaching hospitals;

a requirement to annually report certain information regarding drug samples that manufacturers and distributors provide to physicians;

establishment of a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending;

the establishment of a Center for Medicare and Medicaid Innovation at CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending;

a licensure framework for follow on biologic products.

There remain legal and

political challenges to certain aspects of the Affordable Care Act.

Since January 2017, the Trump administration signed several

executive orders and other directives designed to delay, circumvent, or loosen certain requirements mandated by the Affordable

In December 2017, Congress repealed the tax penalty for an individual’s failure to maintain Affordable Care Act-mandated

health insurance as part of a tax reform bill.

Further, the 2020 federal spending package permanently eliminated, effective January

1, 2020, the Affordable Care Act-mandated “Cadillac”

tax on high-cost employer-sponsored health coverage and medical

device tax and, effective January 1, 2021, also eliminated the health insurer tax.

On December 14, 2018, a U.S.

District Court

Judge in the Northern District of Texas ruled that the individual mandate is a critical and inseverable feature of the Affordable

Care Act, and therefore, because it was repealed as part of the tax reform bill, the remaining provisions of the Affordable Care

Act are invalid as well.

Additionally, on December 18, 2019, the U.S.

Court of Appeals for the 5th Circuit upheld the District

Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether

the remaining provisions of the Affordable Care Act are invalid as well.

Supreme Court is currently reviewing this case,

although it is unclear when a decision will be made.

Although the U.S.

Supreme Court has yet ruled on the constitutionality of

the ACA, on January 28, 2021, President Biden issued an executive order to initiate a special enrollment period from February 15,

2021 through May 15, 2021 for purposes of obtaining health insurance coverage through the Affordable Care Act marketplace.

executive order also instructs certain governmental agencies to review and reconsider their existing policies and rules that limit

access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work

requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or

the Affordable Care Act.

It is unclear how the Supreme Court ruling, other such litigation, and the healthcare reform measures

of the Biden administration will impact the ACA and our business.

We anticipate that the

Affordable Care Act, if substantially maintained in its current form, will continue to result in additional downward pressure on

coverage and the price that we receive for any approved product, and could seriously harm our business.

Any reduction in reimbursement

from Medicare and other government programs may result in a similar reduction in payments from private payors.

The implementation

of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability,

or commercialize our products.

Such reforms could have an adverse effect on anticipated revenue from product candidates that we

may successfully develop and for which we may obtain regulatory approval and may affect our overall financial condition and ability

to develop product candidates.

Further legislation or

regulation could be passed that could harm our business, financial condition and results of operations.

Other legislative changes

have been proposed and adopted since the Affordable Care Act was enacted.

For example, in August 2011, President Obama signed into

law the Budget Control Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend

to Congress proposals in spending reductions.

The Joint Select Committee on Deficit Reduction did not achieve a targeted deficit

reduction of at least $1.2 trillion for fiscal years 2012 through 2021, triggering the legislation’s automatic reduction

to several government programs.

This includes aggregate reductions to Medicare payments to providers of up to 2% per fiscal year,

which went into effect beginning on April 1, 2013 and will stay in effect through 2030 unless additional Congressional action is

However, COVID-19 pandemic relief legislation has suspended the 2% Medicare sequester from May 1, 2020 through March 31,

In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced

Medicare payments to several types of providers, including hospitals, imaging centers and cancer treatment centers, and increased

the statute of limitations period for the government to recover overpayments to providers from three to five years.

Additionally, there has

been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices.

Specifically,

there have been several recent U.S.

Congressional inquiries and proposed federal legislation designed to, among other things, bring

more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing

and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.

At the federal level, the

Trump administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals

seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to

lower-cost generic and biosimilar drugs.

Further, the Trump administration previously released a “Blueprint , ”

or plan, to lower drug prices and reduce out of pocket costs of drugs that contains additional proposals to increase drug manufacturer

competition, increase the negotiating power of certain federal healthcare programs, incentivize manufacturers to lower the list

price of their products, and reduce the out of pocket costs of drug products paid by consumers.

Several final rules have been recently

promulgated that seek to implement several of the Trump administration’s proposals.

However, it is unclear whether the Biden

administration will work to reverse these measures or pursue similar policy initiatives.

Individual states in the United States

have also become increasingly active in passing legislation and implementing regulations designed to control biopharmaceutical

product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing

cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk

There remain legal and political

challenges to certain aspects of the Affordable Care Act.

Since January 2017, the Trump administration signed several executive orders

and other directives designed to delay, circumvent, or loosen certain requirements mandated by the Affordable Care Act.

In December 2017,

Congress repealed the tax penalty for an individual’s failure to maintain Affordable Care Act-mandated health insurance as part

of a tax reform bill.

Further, the 2020 federal spending package permanently eliminated, effective January 1, 2020, the Affordable Care

Act-mandated “Cadillac” tax on high-cost employer-sponsored health coverage and medical device tax and, effective January

1, 2021, also eliminated the health insurer tax On June 17, 2021 the U.S.

Supreme Court dismissed a challenge on procedural grounds that

argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.

Thus, the Affordable Care Act will remain in effect in its current form.

Further, prior to the U.S.

Supreme Court ruling, on January 28,

2021, President Biden issued an executive order to initiate a special enrollment period for purposes of obtaining health insurance coverage

through the Affordable Care Act marketplace.

The executive order also instructs certain governmental agencies to review and reconsider

their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects

and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance

coverage through Medicaid or the Affordable Care Act.

It is possible that the Affordable Care Act will be subject to judicial or Congressional

challenges in the future.

It is unclear how such challenges and the healthcare reform measures of the Biden administration will impact

the Affordable Care Act and our business.

We anticipate that the Affordable

Care Act, if substantially maintained in its current form, will continue to result in additional downward pressure on coverage and the

price that we receive for any approved product, and could seriously harm our business.

Any reduction in reimbursement from Medicare and

other government programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures

or other healthcare reforms may prevent us from being able to generate revenue, attain profitability, or commercialize our products.

reforms could have an adverse effect on anticipated revenue from product candidates that we may successfully develop and for which we

may obtain regulatory approval and may affect our overall financial condition and ability to develop product candidates.

Further legislation or regulation

could be passed that could harm our business, financial condition and results of operations.

Other legislative changes have been proposed

and adopted since the Affordable Care Act was enacted.

For example, in August 2011, President Obama signed into law the Budget Control

Act of 2011, which, among other things, created the Joint Select Committee on Deficit Reduction to recommend to Congress proposals in

spending reductions.

The Joint Select Committee on Deficit Reduction did not achieve a targeted deficit reduction of at least $1.2 trillion

for fiscal years 2012 through 2021, triggering the legislation’s automatic reduction to several government programs.

This includes

aggregate reductions to Medicare payments to providers of up to 2% per fiscal year, which went into effect beginning on April 1, 2013

and will stay in effect through 2031 unless additional Congressional action is taken.

However, COVID-19 pandemic relief legislation suspended

the 2% Medicare sequester from May 1, 2020 through March 31, 2021.

Under current legislation, the actual reduction in Medicare payments

will vary from 1% in 2022 to up to 3% in the final fiscal year of this sequester.

Additionally, on March 11, 2021, President Biden signed

the American Rescue Plan Act of 2021 into law, which eliminates the statutory Medicaid drug rebate cap, currently set at 100% of a drug’s

average manufacturer price, for single source and innovator multiple source drugs, beginning January 1, 2024.

In January 2013, the American

Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers,

including hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government

to recover overpayments to providers from three to five years.

Additionally, there has been

increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices.

Specifically, there

have been several recent U.S.

Congressional inquiries and proposed federal legislation designed to, among other things, bring more transparency

to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient

programs, and reform government program reimbursement methodologies for drugs.

For example, the Trump administration used several means

to propose or implement drug pricing reform, including through federal budget proposals, executive orders and policy initiatives.

example, on July 24, 2020 and September 13, 2020, the Trump administration announced several executive orders related to prescription

drug pricing that attempt to implement several of the administration’s proposals.

The FDA also released a final rule and guidance

implementing a portion of the importation executive order providing pathways for states to build and submit importation plans for drugs

Further, on November 20, 2020, the Department of Health and Human Services, or HHS, finalized a regulation removing safe

harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy

benefit managers, unless the price reduction is required by law.

The implementation of the rule has been delayed by the Biden administration

from January 1, 2022 to January 1, 2023 in response to ongoing litigation.

The rule also creates a new safe harbor for price reductions

reflected at the point-of-sale, as well as a new safe harbor for certain fixed fee arrangements between pharmacy benefit managers and

manufacturers, the implementation of which have also been delayed until January 1, 2023.

On November 20, 2020, CMS issued an interim final

rule implementing former President Trump’s Most Favored Nation, or MFN, executive order, which would tie Medicare Part B payments

for certain physician-administered drugs to the lowest price paid in other economically advanced countries, effective January 1, 2021.

As a result of litigation challenging the MFN model, on August 10, 2021, CMS published a proposed rule that rescinded the MFN model interim

As a result of litigation challenging the MFN model, on December 27, 2021, CMS published a final rule that rescinded the Most

Favored Nation model interim final rule.

In July 2021, the Biden administration released an executive order, “Promoting Competition

in the American Economy,” with multiple provisions aimed at prescription drugs.

In response to Biden’s executive order, on

September 9, 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices that outlines principles for drug pricing reform

and sets out a variety of potential legislative policies that Congress could pursue to advance these principles.

No legislation or administrative

actions have been finalized to implement these principles.

In addition, Congress is considering drug pricing as part of other reform initiatives.

Individual states in the United States have also become increasingly active in passing legislation and implementing regulations designed

to control biopharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain

product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other

countries and bulk purchasing.

Further, it is possible that additional government action is taken in response to the COVID-19 pandemic.

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The Foreign Corrupt Practices

Act (the “FCPA”), prohibits any U.S.

individual or business from paying, offering, or authorizing payment or offering

of anything of value, directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing

any act or decision of the foreign entity in order to assist the individual or business in obtaining or retaining business.

FCPA also obligates companies whose securities are listed in the United States to comply with accounting provisions requiring us

to maintain books and records that accurately and fairly reflect all transactions of the corporation, including international subsidiaries,

and to devise and maintain an adequate system of internal accounting controls for international operations.

Act, or the FCPA, prohibits any U.S.

individual or business from paying, offering, or authorizing payment or offering of anything of value,

directly or indirectly, to any foreign official, political party or candidate for the purpose of influencing any act or decision of the

foreign entity in order to assist the individual or business in obtaining or retaining business.

The FCPA also obligates companies whose

securities are listed in the United States to comply with accounting provisions requiring us to maintain books and records that accurately

and fairly reflect all transactions of the corporation, including international subsidiaries, and to devise and maintain an adequate system

of internal accounting controls for international operations.

Additional Regulation

In addition to the foregoing,

state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health

Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business.

These and other laws

govern our use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated

by, our operations.

If our operations result in contamination of the environment or expose individuals to hazardous substances,

we could be liable for damages and governmental fines.

We believe that we are in material compliance with applicable environmental

laws and that continued compliance therewith will not have a material adverse effect on our business.

We cannot predict, however,

how changes in these laws may affect our future operations.

state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act,

the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business.

These and other laws govern our use,

handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations.

our operations result in contamination of the environment or expose individuals to hazardous substances, we could be liable for damages

and governmental fines.

We believe that we are in material compliance with applicable environmental laws and that continued compliance

therewith will not have a material adverse effect on our business.

We cannot predict, however, how changes in these laws may affect our

future operations.

Other Regulations

We are also subject to

numerous federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental

protection, fire hazard control, and disposal of hazardous or potentially hazardous substances.

We may incur significant costs

to comply with such laws and regulations now or in the future.

As of March 11, 2021,

we had twenty-nine employees, twenty-seven of whom were full-time employees and two of whom were contract employees.

11, 2021, twelve of our employees were engaged in research and development activities and seventeen of our employees were engaged

in business development, finance, commercial, information systems, facilities, human resources or administrative support.

March 11, 2021, all of our employees were located in the U.S.

None of our U.S.

employees are represented by any collective bargaining

We believe that we maintain good relations with our employees.

The ultimate impact of

the current COVID-19 pandemic or a similar health epidemic is highly uncertain and subject to change.

We have experienced delays,

but may experience additional future delays that impact our business, our research and development activities, healthcare systems

and the global economy as a whole.

However, we will continue to monitor the COVID-19 situation closely should the effects have

a material impact on our operations, liquidity and capital resources.

In response to public

health directives and orders, we have implemented work-from-home policies for our employees and temporarily modified our operations

to comply with applicable social distancing recommendations.

Similar health directives and orders are affecting third parties with

whom we do business, including the third parties that we have contracted with to conduct studies for TARA-002.

The effects of the

orders and our related adjustments in our business are likely to negatively impact productivity, disrupt our business and delay

our timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations

on our ability to conduct our business in the ordinary course.

Severe and/or long-term

disruptions in our operations will negatively impact our business, operating results and financial condition in other ways, as

Specifically, we anticipate that the stress of COVID-19 on healthcare systems around the globe will negatively impact our

ability to conduct clinical trials in the near term due primarily to the lack of resources at clinical trial sites and the resulting

inability to enroll patients in the trials.

We also anticipate that the global impact of COVID-19 will negatively impact our ability

to conduct nonclinical studies due primarily to laboratory closures and limited availability of personnel.

In addition, while the

potential economic impact brought by, and the duration of, COVID-19 may be difficult to assess or predict, it has significantly

disrupted global financial markets, and may limit our ability to access capital, which could in the future negatively affect our

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

value of our common stock.

We are also subject to numerous

federal, state and local laws relating to such matters as safe working conditions, manufacturing practices, environmental protection,

fire hazard control, and disposal of hazardous or potentially hazardous substances.

We may incur significant costs to comply with such

laws and regulations now or in the future.

As of December 31, 2021,

we had 32 employees, 31 of whom were full-time employees and one of whom was a contract employee.

As of December 31, 2021, 14 of our employees

were engaged in research and development activities and 18 of our employees were engaged in business development, finance, market development,

information systems, facilities, human resources or administrative support.

As of December 31, 2021, all of our employees were located

None of our United States employees are represented by any collective bargaining agreements.

We believe that we maintain good

relations with our employees.

The ultimate impact of the

current COVID-19 pandemic is highly uncertain and subject to change.

We have experienced delays and may experience additional future delays

that impact our business, our research and development activities, the healthcare systems in which we operate and the global economy as

We will continue to monitor the COVID-19 public health crisis closely including whether the effects would have a material impact

on our operations, liquidity and capital resources.

In response to the initial

outbreak of COVID-19 and the prevalence of new variants and additional waves of infections throughout the pandemic, we have from time

to time implemented work-from-home policies for our employees and at times have temporarily modified our operations to comply with applicable

safety recommendations.

Similar health and safety measures have affected or may affect third parties with whom we do business, including

the third parties that we have contracted with to conduct studies for TARA-002, our study sites or other clinical partners, laboratories

through which we conduct non-clinical studies, o ur third-party manufacturers, and other parties

with whom we conduct business and regulatory agencies.

The effects of these measures and our related adjustments to our business are likely

to negatively impact productivity, disrupt our business and delay our timelines, the magnitude of which will depend, in part, on the length

and severity of the pandemic and associated health and safety measures and other limitations on our ability to conduct our business in

the ordinary course.

Severe and/or long-term disruptions

in our operations as a result of COVID-19, including in response to the prevalence of new variants of the virus, additional waves of infections

and the associated health and safety measures, will negatively impact our business, operating results and financial condition.

Specifically,

we anticipate that the stress of COVID-19 on healthcare systems around the globe will negatively impact our ability to conduct clinical

trials in the near-term primarily due to the lack of resources at clinical trial sites and the resulting inability to timely enroll patients

in the trials.

We also anticipate that the global impact of COVID-19 will negatively impact our ability to conduct non-clinical studies

due primarily to laboratory closures and limited availability of personnel.

In addition, the potential economic impact brought by, and

the duration of, COVID-19 may be difficult to assess or predict, and it may limit our ability to access capital, which could in the future

negatively affect our liquidity.

A recession or market correction resulting from the COVID-19 pandemic and related effects on the economy

such as supply chain disruptions and inflation risk could materially affect our business and the value of our common stock.

Related to Our Financial Condition ” below.

Corporate Information

1 unchanged sentence

Therapeutics, Inc.

(formerly ArTara Therapeutics, Inc., formerly Proteon Therapeutics, Inc.

the “Company”

or “Protara”),

and privately-held ArTara Subsidiary, Inc.

(“Private ArTara”), completed the merger and reorganization, or the Merger,

in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated September 23, 2019, or the Merger Agreement,

by and among the Company, Private ArTara and REM 1 Acquisition, Inc., a wholly owned subsidiary of the Company (“Merger Sub”),

whereby Merger Sub merged with and into Private ArTara, with Private ArTara surviving as a wholly owned subsidiary of the Company.

The Merger was structured as a reverse merger and Private ArTara was determined to be the accounting acquirer based on the terms

of the Merger and other factors.

(formerly ArTara Therapeutics, Inc., formerly Proteon Therapeutics, Inc., or the Company or Protara), and privately-held

ArTara Subsidiary, Inc., or Private ArTara, completed the merger and reorganization, or the Merger, in accordance with the terms of the

Agreement and Plan of Merger and Reorganization, dated September 23, 2019, or the Merger Agreement, by and among the Company, Private

ArTara and REM 1 Acquisition, Inc., a wholly owned subsidiary of the Company, or Merger Sub, whereby Merger Sub merged with and into Private

ArTara, with Private ArTara surviving as a wholly owned subsidiary of the Company.

The Merger was structured as a reverse merger and Private

ArTara was determined to be the accounting acquirer based on the terms of the Merger and other factors.

Refer to Note 3, Reverse

Merger with Protara and Recapitalization, to our financial statements appearing elsewhere in this Annual Report on Form 10-K for

additional information.

Merger with Protara and Recapitalization , to our financial statements appearing elsewhere in this Annual Report on Form 10-K

for additional information.

We were originally incorporated

in Delaware in March 2006, and at that time, acquired Proteon Therapeutics, LLC, the predecessor of Protara, which was formed in

Our principal executive

offices are located at 345 Park Avenue South, 3 rd Floor, New York, New York 10010, our telephone number is (646) 844-0337

and our website address is www.protaratx.com.

in Delaware in March 2006, and at that time, acquired Proteon Therapeutics, LLC, the predecessor of Protara, which was formed in June

Our principal executive offices

are located at 345 Park Avenue South, 3 rd Floor, New York, New York 10010, our telephone number is (646) 844-0337 and our website

address is www.protaratx.com.

The contents of our website are not incorporated into this Annual Report on Form 10-K and our reference

to the URL for our website is intended to be an inactive textual reference only.

The information contained on, or that can be accessed

through, our website is not a part of this document.

Unless the context requires

otherwise, references in this Annual Report to “Protara”, “TARA”, “we”, “us”, the

“Company”

and “our”

refer to Protara Therapeutics, Inc.

otherwise, references in this Annual Report on Form 10-K to “Protara”, “TARA”, “we”, “us”,

the “Company” and “our” refer to Protara Therapeutics, Inc.

(formerly ArTara Therapeutics, Inc., formerly Proteon

1 unchanged sentence

Available Information

Annual Reports on Form

10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and

15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, will be made available free of charge on our website

as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange

Commission, or SEC.

The contents of our website are not incorporated into this Annual Report and our reference to the URL for our

website is intended to be an inactive textual reference only.

The information contained on, or that can be accessed through, our

website is not a part of this document.

Annual Reports on Form 10-K,

Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the

Securities Exchange Act of 1934, as amended, or the Exchange Act, will be made available free of charge on our website as soon as reasonably

practicable after we electronically file such material with, or furnish it to, the SEC.

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

What changed 10-K

Item 1. Business