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Item 1. Business

2023-03-08 compared with 2022-03-09 · 1009 added, 924 removed, 603 unchanged (76% 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.

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.

We are a New York

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

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

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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.

asset excluding Japan and Taiwan and are exploring 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

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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.

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 mechanism of action of TARA-002 is similar to that of BCG.

TARA-002 and BCG are both intravesically administered, elicit

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

We are conducting a Phase 1 dose-finding, open-label clinical trial

to evaluate TARA-002 in treatment-naïve and treatment-experienced NMIBC patients with carcinoma in situ, or CIS, and high-grade papillary

tumors (Ta), known as the ADVANCED-1 trial.

In the initial dose escalation phase, or Phase 1a portion, of the trial, patients 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.

is ongoing and we expect data from the Phase 1a portion of the trial in the second quarter of 2023.

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 and in May 2022, the European Medicines Agency

granted orphan drug designation to TARA-002 for the treatment of LMs.

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 open IND for LMs with the Vaccines and

Related Products Division of the FDA, or Vaccines Division.

We received feedback from the Vaccines Division on the protocol for our proposed

Phase 2 clinical trial evaluating TARA-002 in LMs.

In the second half of 2023 we expect to initiate this Phase 2 single arm, open-label

clinical trial to evaluate the safety and efficacy of TARA-002 in pediatric patients with macrocystic and mixed-cystic LMs.

design includes a safety lead-in phase followed by an expansion phase.

We are conducting trial preparation activities and have identified

multiple trial sites.

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

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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.

Phase 2 meeting with the FDA, we received feedback on the 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.

Prior 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

conducting the prospective part of the prevalence study, which is a multi-center, cross-sectional observational study to 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 expect to have results of the study in the

third quarter of 2023.

In April 2022, the U.S.

Patent and Trademark office, or USPTO, issued to us Patent No.

US 11,311,503 claiming a

sterile aqueous choline salt composition with a term expiring in 2041.

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 sales.

efforts to the development of these programs but 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.

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

Management’s Discussion and Analysis

of Financial Condition and Results of Operations—Liquidity and Capital Resources” for additional information about our liquidity

and capital resource needs.

Our Product Candidate Pipeline

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the current status of our product candidate pipeline:

* 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 U.S.

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

Granted Rare Pediatric Disease Designation for the treatment of LMs

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

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

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 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.

We are an oncology and rare disease company focused on applying modern

scientific advancements to established mechanisms to deliver efficient de-risked clinical programs.

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.

Our current key initiatives are listed below:

Progress clinical program supporting

TARA-002 for the treatment of NMIBC.

Complete the ongoing 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.

We then intend to further assess safety and preliminary signs of anti-tumor activity of TARA-002 in

both BCG-naïve and BCG-exposed NMIBC patients with CIS in an expanded cohort of our Phase 1 and Phase 2 clinical trials.

Progress clinical program for TARA-002

in LMs by initiating a Phase 2 clinical trial in patients with macrocystic and mixed-cystic LMs.

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

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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.

Following feedback from the Vaccines Division, we expect to initiate

a Phase 2 clinical trial evaluating TARA-002 in pediatric patients with macrocystic and mixed-cystic LMs.

Complete prospective prevalence study

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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

to use the results of our multinational prevalence study of the PN patient population to inform our strategy for IV Choline Chloride.

Explore opportunities to expand our

pipeline of uses for TARA-002 alone and in combination with other therapies.

We are exploring the use

of TARA-002 in combination with other therapies and are working to identify additional opportunities to develop TARA-002 in indications

beyond NMIBC and LMs.

We are conducting 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 numerous 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, our lead program,

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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.

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 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

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 party.

In Japan, OK-432 is indicated

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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.

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

TARA-002 in NMIBC

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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%.

There are approximately 65,000 incident cases of NMIBC in the United

States every year, and based upon currently available data we believe that 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.

In 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,

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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.

BCG has been the subject of multiple supply shortages in the US in the past

decade due to the inability to meet demand to treat the large population of patients with NMIBC.

There has been a significant increase

in bladder cancer recurrence and progression with an escalated number of patients who require cystectomy.

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.

Clinical Development

We are currently conducting our ADVANCED-1 trial.

In the initial dose

escalation phase of the trial, patients 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.

The trial is ongoing and we expect data from the Phase 1a portion of the trial in the second quarter

Preclinical Development

We continue to conduct pre-clinical

studies on TARA-002 to better characterize the mechanism of action to help us understand how TARA-002 may perform in potential combinations

with other agents used to treat NMIBC.

In addition, we use pre-clinical data to help us define other cancer targets for TARA-002 both

within the urothelial cancer space and other types of cancer affecting different parts of the body.

Regulatory Interactions

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, allowing us to commence our ADVANCED-1

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.

Manufacturing

We plan to manufacture TARA-002

We manufacture TARA-002

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

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Disease Overview

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 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 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 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 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.

We have worked with the FDA to align on a regulatory pathway and development

plan for TARA-002 for the treatment of LMs.

The International Society for the Study of Vascular 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 cubic centimeters in size and present as a soft, fluid-filled swelling beneath normal or slightly discolored skin.

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

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.

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

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

Outside of Japan and Taiwan,

the standard of care is surgical excision, which is associated with high rates of recurrence and complications.

There are no approved

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 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

There are no approved 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

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

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.

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, 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.

Historical Data on OK- 432, predecessor therapy

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.

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 of the cyst.

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.

There were three treatment groups:

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.

The open label treatment group were treated immediately with OK-432.

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.

Results presented in this

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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 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 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.

Overall, 310 subjects were enrolled with intent to treat:

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

64 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-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.

69% of patients in the immediate treatment group had a complete

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

or substantial response after six months of observation and before treatment.

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 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, 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.

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 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 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:

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.

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 ITG.

were analyzed by lesion type across all treatment groups.

TARA-002 Clinical Development

We have an open IND for

LMs with the Vaccines Division.

Later in 2023 we expect to initiate a Phase 2 single arm, open-label clinical trial to evaluate the safety

and efficacy of TARA-002 in pediatric patients with macrocystic and mixed-cystic LMs.

The trial design includes a safety lead-in phase

followed by an expansion phase.

We are conducting trial preparation activities and have identified multiple trial sites.

Historical Safety Profile on OK-432, predecessor

therapy to TARA-002

The most common adverse

events with treatment with OK-432 were local injection site reactions, fever, fatigue, and decreased appetite, with resolution within

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.

Historical Preclinical Development on

OK-432, predecessor therapy to 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.

TARA-002 Regulatory Interactions

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.

The robust dataset for OK-432 in LMs has informed our development of

At the FDA’s 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 IND with the Vaccines Division.

We received feedback from the Vaccines Division on the protocol for our proposed Phase

2 clinical trial evaluating TARA-002 in LMs.

In the second half of 2023 we expect to initiate this Phase 2 single arm, open-label clinical

trial to evaluate the safety and efficacy of TARA-002 in pediatric patients with macrocystic and mixed-cystic LMs.

The trial design includes

a safety lead-in phase followed by an expansion phase.

We are conducting trial preparation activities and have identified multiple trial

Manufacturing

TARA-002 is manufactured

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

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.

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.

IV Choline Chloride for the treatment of Intestinal

Failure Associated Liver Disease

IV Choline Chloride is an

IV substrate replacement therapy initially in development for patients receiving PN who have 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 transplant.

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

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

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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.

We expect to complete the prospective part of the study in mid-2023.

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.

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 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 a Phase 3 trial.

to use the results of our multinational prevalence study of the PN patient population to inform our strategy for IV Choline Chloride.

Disease Overview

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.

IFALD is a rare hepatic/metabolic

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 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:

is dependent on PN for more than six months (e.g., has chronic intestinal failure);

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

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.

dependent on PN for more than six months (e.g., has chronic intestinal failure);

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

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

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

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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:

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

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 Development

In a Phase 2 randomized,

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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, 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.

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:

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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.

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.

Statistical significance was observed at 12, 16, and

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.

Statistical significance was

observed at 12, 16, and 20 weeks.

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.

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

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

* 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.

Therapeutics re-analysis of patient CRF’s, data on file.

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.

Preclinical Development

Preclinical Studies Conducted by us for

IV Choline Chloride

Brief Description

Preclinical Studies Conducted by us

for IV Choline Chloride

In vitro protein binding

Evaluation of Protein Binding by Choline Chloride in Plasma Using Rapid Equilibrium Dialysis

Evaluation of Protein Binding

by Choline Chloride in Plasma Using Rapid Equilibrium Dialysis

In vitro cardiac ion channel study

In Vitro Assessment of the Effect of Choline on Currents Mediated by hERG, Cav1.2, and Peak and Late Nav1.5 Channels Expressed in Human Embryonic Kidney (HEK) Cells

In Vitro Assessment of

the Effect of Choline on Currents Mediated by hERG, Cav1.2, and Peak and Late Nav1.5 Channels Expressed in Human Embryonic Kidney

In vitro drug-drug interaction

Evaluation of Transporter Inhibition by Choline Chloride in Transporter-Transfected HEK293 Cells

Evaluation of OCT2, MATE1 and MATE2-K Inhibition by Choline Chloride in Transporter-Transfected HEK293 Cells

Evaluation of Transporter Inhibition by Choline Chloride in Caco-2 Cells

Evaluation of Time Dependent Cytochrome P450 Inhibition (IC50 Shift) by Choline Chloride in Human Liver Microsomes

Evaluation of Direct Cytochrome P450 Inhibition by Choline Chloride in Human Liver Microsomes

Evaluation of Cytochrome P450 Induction by Choline Chloride in Human Hepatocytes

Evaluation of Transporter Inhibition by Choline Chloride in Caco-2 Cells

Evaluating of Cytochrome P450 2C8, 2C9, and 2C19 mRNA Induction by Choline Chloride in Human Hepatocytes

Evaluation of Transporter

Inhibition by Choline Chloride in Transporter-Transfected HEK293 Cells

Evaluation of OCT2, MATE1

and MATE2-K Inhibition by Choline Chloride in Transporter-Transfected HEK293 Cells

Evaluation of Transporter

Inhibition by Choline Chloride in Caco-2 Cells

Evaluation of Time Dependent

Cytochrome P450 Inhibition (IC50 Shift) by Choline Chloride in Human Liver Microsomes

Evaluation of Direct Cytochrome

P450 Inhibition by Choline Chloride in Human Liver Microsomes

Evaluation of Cytochrome

P450 Induction by Choline Chloride in Human Hepatocytes

Evaluation of Transporter

Inhibition by Choline Chloride in Caco-2 Cells

Evaluating of Cytochrome

P450 2C8, 2C9, and 2C19 mRNA Induction by Choline Chloride in Human Hepatocytes

In vitro BSEP inhibition

Assessment of Choline as an Inhibitor of Human BSEP Mediated Transport

Assessment of Choline as a Substrate of Human BSEP Mediated Transport

Assessment of Choline as

an Inhibitor of Human BSEP Mediated Transport

Assessment of Choline as

a Substrate of Human BSEP Mediated Transport

Nonclinical pharmacology studies

Non-GLP Pilot Single Dose, Escalating Dose Tolerance Study of Choline by Intravenous Infusion in Male Beagle Dogs

GLP Single-dose IV Cardiovascular Study in Surgically Instrumented Male Dogs Monitored by Telemetry

GLP Combined Single-dose IV Neurobehavioral and Respiratory Study

Clinical Development Plan:

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.

Non-GLP Pilot Single Dose,

Escalating Dose Tolerance Study of Choline by Intravenous Infusion in Male Beagle Dogs

GLP Single-dose IV Cardiovascular

Study in Surgically Instrumented Male Dogs Monitored by Telemetry

GLP Combined Single-dose

IV Neurobehavioral and Respiratory Study

Regulatory Interactions

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.

We completed 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 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.

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.

In 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 36 months.

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

Through our CDMO, we have

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

Scale up for commercial

demand, if and when applicable, will commence when appropriate.

Our end-to-end manufacturing of IV Choline Chloride is conducted in the

United States by a cGMP-compliant CDMO.

However, due to current macroeconomic factors, such as rising inflation and supply chain shortages,

scaling up may be more difficult than originally anticipated.

Collaborations and License Agreements

Chugai Agreement

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.

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.

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

Territory and owns and controls certain materials and documents related to the Existing Product (or the Chugai Materials).

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.

Under the Chugai Agreement, 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

will 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 and Chugai Pharmaceutical entered into an amendment

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

The Chugai Amendment extends the date through

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

for further such extensions on the occurrence of certain events and milestones.

The Chugai Amendment also provides that, in addition to

the designated fee payable upon the initial indication approval in the Chugai Agreement described below, we will pay Chugai a designated

fee in the low, single digit millions 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 will be made in two installments

with an initial payment made in July 2020, and the remaining majority of the total amount will be payable upon FDA approval of the New

We granted Chugai Pharmaceutical

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

The Chugai Agreement shall

The Chugai Agreement will

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

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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

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;

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 New Product.

In addition, either party

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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 Agreement.

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

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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

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.

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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.

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

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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.

Upon 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 for LMs.

Choline License Agreement

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

or the Choline Agreement, with Alan L.

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.

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 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 under 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.

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 to Dr.

Certain milestone and royalty

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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.

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.

We then paid Dr.

a $550,000 milestone in January 2020 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 in November 2022 and during the term of the Choline Agreement, we will pay Dr.

minimum annual royalty that ranges from $25,000 to $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

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

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

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

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.

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

We will also pay Dr.

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

The Choline Agreement will

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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

written minutes from the 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 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.

Buchman and elected not terminate the Choline Agreement at that time.

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 for non-payment of any payment

due that has not been cured.

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;

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

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.

License Agreement

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.

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.

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

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

Notwithstanding the exclusive

rights granted to us, the Institute will 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.

As consideration for the

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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.

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.

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 will 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.

We agreed to make certain

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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 our behalf;

(ii) are declared bankrupt or insolvent

or (iii) are 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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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.

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.

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

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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.

we may have to participate in interference proceedings in 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.

TARA-002 is a genetically

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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

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, alcoholic fatty liver, NASH, alcoholic steatohepatitis, or ASH, NASH-associated

liver fibrosis, ASH-associated liver fibrosis, non-alcoholic cirrhosis and alcoholic cirrhosis.

In addition, in April 2022, the USPTO

issued to us Patent No.

US 11,311,503 claiming a sterile aqueous choline salt composition with a term expiring in 2041.

We would expect

to list such patent in the FDA’s Orange Book List of Approved Drug Products with Therapeutic Equivalence Evaluations if IV Choline

Chloride is approved by the FDA for the treatment of IFALD.

The term of individual patents

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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.

patent also may

be accorded a patent term adjustment under certain circumstances to compensate for delays in obtaining the patent from the USPTO.

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.

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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.

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.

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.

Manufacturing

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both products.

We plan to manufacture TARA-002

We manufacture TARA-002

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

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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.

Both TARA-002 and IV Choline

Chloride are or will be manufactured 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 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 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.

commercial 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

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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.

Our potential competitors may develop or market therapies that are available

sooner, 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

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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.

the disease, TARA-002 is likely to have seven years of concurrent Orphan Drug Designation exclusivity for the treatment of LMs.

There are no approved pharmacotherapies

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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

and academic researchers exploring oral and topical formulations of various agents for the treatment of LMs including macrolides, phosphodiesterase

inhibitors, and calcineurin/mTOR inhibitors.

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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.

For example, the current standard of care for NMIBC includes intravesical BCG TICE (manufactured by Merck & Co., Inc.).

products approved for the treatment of NMIBC include Merck & Co., Inc.’s Keytruda, Endo International plc’s Valstar and

Ferring B.V.’s Adstiladrin.

Additional product candidates in development include Japanese BCG Laboratory’s BCG Tokyo, Pfizer

Inc.’s Sasanlimab in combination with BCG, ImmunityBio, Inc.’s VesAnktiva in combination with BCG, CG Oncology Inc.’s

CG0070, Sesen Bio, Inc.’s Vicineum, enGene Inc.’s, EG-70, Seagen Inc.’s PADCEV, Janssen’s TAR200 combined with

gemcitabine plus or minus Cetrelimab, Urogen Pharma Ltd.’s Jelmyto,and Auro BioSciences, Inc.’s Aura-0011.

Additional pharmaceutical

and biotechnology companies with product candidates in development for the treatment of NMIBC include but may not be limited to Verity

Pharmaceuticals, Inc., AstraZeneca PLC, Bristol-Myers Squibb Company, Roche Group, Asieris Pharmaceuticals, BeiGene, Ltd, NanOlogy, LLC,

Linton Pharm Co., Ltd., Lindis Biotech GmbH, Theralase Technologies Inc., Taizhou Hanzhong biomedical co.

Ltd., Shionogi & Co., Ltd.,

Rapamycin Holdings, Inc., Vaxiion Therapeutics Inc., Incyte Corporation, LiPac Oncology, Inc., Anika Therapeutics Inc., Surge Pharmaceuticals

Ltd., and Istari Oncology, 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

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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, 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 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 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.

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 regulations.

The process required by the FDA before biopharmaceutical product

candidates may be marketed in the United States generally involves the following:

of preclinical laboratory tests and animal studies performed in accordance with the FDA’s current Good Laboratory Practices,

or cGLP regulations;

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;

by an independent Institutional Review Board, or IRB, or ethics committee at each clinical site before the trial is commenced;

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;

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;

determination by the FDA within 60 days of its receipt of an NDA or BLA to accept the application for review;

completion of an FDA Advisory Committee review, if applicable;

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,

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

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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;

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.

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

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.

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.

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.

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.

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.

Phase 2 clinical trials may be conducted to obtain information prior to beginning larger and more expensive Phase 3 clinical trials.

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

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

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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.

The submission of an NDA or BLA requires payment of a substantial application user fee to

the FDA, unless a waiver or exemption applies.

Once an NDA or BLA has been

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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.

A Complete Response letter will describe all of the deficiencies that the FDA has identified in the NDA or

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, or 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

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

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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.

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

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Other potential consequences include, among other things:

restrictions on the marketing or manufacturing of a product, mandated modification of promotional materials or issuance of corrective information, issuance by FDA or other regulatory authorities of safety alerts, Dear Healthcare Provider letters, press releases or other communications containing warnings or other safety information about the product, or complete withdrawal of the product from the market or product recalls;

fines, warning or untitled letters or holds on post-approval clinical trials;

refusal of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product approvals;

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

injunctions, consent decrees or the imposition of civil or criminal penalties.

on the marketing or manufacturing of a product, mandated modification of promotional materials or issuance of corrective information,

issuance by FDA or other regulatory authorities of safety alerts, Dear Healthcare Provider letters, press releases or other communications

containing warnings or other safety information about the product, or complete withdrawal of the product from the market or product

warning or untitled letters or holds on post-approval clinical trials;

of the FDA to approve pending applications or supplements to approved applications, or suspension or revocation of existing product

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

consent decrees or the imposition of civil or criminal penalties.

The FDA closely regulates

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Biosimilars and Reference Product Exclusivity

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.

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.

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.

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

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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, 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

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),

Department of Justice, or DOJ and individual U.S.

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, or HIPAA, and similar state laws, each as amended,

as applicable.

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

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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).

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

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, 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,

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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.

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.

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

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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.

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,

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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.

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.

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.

Under currently applicable U.S.

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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.

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.

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

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

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.

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, 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.

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.

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

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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.

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

All of our activities are potentially subject to federal and state consumer protection and unfair competition laws.

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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

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

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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.

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.

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

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the third-party payor’s determination that use of a therapeutic is:

a covered benefit under its health plan;

safe, effective and medically necessary;

appropriate for the specific patient;

covered benefit under its health plan;

effective and medically necessary;

for the specific patient;

cost-effective;

neither experimental nor investigational.

experimental nor investigational.

We cannot be sure that reimbursement

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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.

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.

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.

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.

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.

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

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.

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

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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.

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

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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.

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

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, or 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;

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;

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;

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;

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.

Among the Affordable

Care Act provisions of importance to the pharmaceutical and biotechnology industries, in addition to those otherwise described above,

are the following:

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;

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, or the AMP;

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;

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;

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;

requirement to report certain financial arrangements with physicians and teaching hospitals;

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;

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 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.

Starting in 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.

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 the Affordable Care Act-mandated “Cadillac”

tax on high-cost employer-sponsored health coverage and medical device tax and also eliminated the health insurer tax.

On June 17, 2021,

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

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.

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 instructed 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.

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

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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.

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

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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.

varied from 1% in 2022 to up to 3% in the final fiscal year of this sequester.

Additionally, on March 11, 2021, President Biden signed

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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

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.

For 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.

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benefit managers, unless the price reduction is required by law.

The implementation of the rule has been delayed by the Biden administration

The implementation of the rule was delayed by the Biden administration

from January 1, 2022 to January 1, 2023 in response to ongoing litigation.

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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.

manufacturers, the implementation of which also was 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.

for certain physician-administered drugs to the lowest price paid in other economically advanced countries, and was effective as of January

As a result of litigation challenging the MFN model, on August 10, 2021, CMS published a proposed rule that rescinded the MFN

model interim final rule.

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, on August 16, 2022, President Biden signed

into law the Inflation Reduction Act of 2022, which, among other things, contains substantial drug pricing reforms that will reduce drug

spending by the federal government.

For example, the Inflation Reduction Act of 2022 limits the prices paid by Medicare for various prescription

drugs and requires drug manufacturers to pay rebates to Medicare if they increase prices faster than inflation for drugs used by Medicare

beneficiaries.

Although the effect of the Inflation Reduction Act of 2022 on our business and the pharmaceutical industry in general

is not yet known, the Inflation Reduction Act of 2022 could affect the prices we can charge and the reimbursement we can receive for

our product candidates, if approved, thereby reducing our profitability.

We also expect that additional state and federal healthcare

reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare

products and services, which could result in reduced demand for our product candidates if approved or additional pricing pressures.

The Foreign Corrupt Practices Act

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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.

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

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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

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.

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As of December 31, 2022,

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

we had 25 employees, all of whom were full-time employees.

As of December 31, 2022, 13 of our employees were engaged in research and

development activities and 12 of our employees were engaged in business development, legal, finance, market development, information

systems, facilities, human resources or administrative support.

As of December 31, 2022, all of our employees were located in the United

None of our United States employees are represented by any collective bargaining agreements.

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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.

COVID-19 and Related Macroeconomic Conditions

The COVID-19 pandemic and

related macroeconomic conditions, such as supply chain shortages, inflation and economic volatility have, and may continue to have, an

impact on our results of operations.

We will continue to monitor whether such conditions would have a material impact on our operations,

liquidity and capital resources.

Further, rising inflation has, in part, caused a disruption in the capital markets, which may lead to

a recession or market correction that could impact our access to capital, and could in the future negatively affect our liquidity.

recession or market correction, continued supply chain disruptions and/or inflation could materially affect our business and the value

of our common stock.

See “ —Risks Related to Our Financial Condition ” below.

Corporate Information

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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.

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.

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 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.

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

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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.

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