What changed in this filing

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Item 1. Business

2024-03-21 compared with 2023-03-22 · 409 added, 416 removed, 833 unchanged (50% of the section changed)

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to cancer treatments.

We licensed the DNase oncology platform in April 2022 and we have directed our efforts and resources on the development

of this newly acquired technology.

The DNase platform is designed to target NETs, which are weblike structures

composed of extracellular chromatin coated with histones and other proteins.

NETs are expelled by activated neutrophils, in response to

microbial or pro-inflammatory challenges.

However, excessive production or reduced clearance of NETs can lead to aggravated inflammatory

and autoimmune pathologies, as well as creation of pro-tumorigenic niches in the case of cancer growth and metastasis.

We plan to advance toward a first-in-human, multicenter, dose escalation

and dose-expansion study of IV rhDNase I in subjects with locally advanced or metastatic solid tumors.

Our systemic DNase program is initially

targeting multi-billion-dollar indications including pancreatic carcinoma.

Pancreatic cancer has a low rate of early diagnosis, a high

mortality rate and a poor five-year survival prognosis.

Symptoms are usually non-specific and as a result, pancreatic cancer is often

not diagnosed until it reaches an advanced stage.

The DNase platform is designed to target NETs,

which are weblike structures composed of extracellular chromatin coated with histones and other proteins.

NETs are expelled by activated

neutrophils, in response to microbial or pro-inflammatory challenges.

However, excessive production or reduced clearance of NETs can lead

to aggravated inflammatory, hypercoagulability and autoimmune pathologies, as well as creation of pro-tumorigenic niches in the case of

cancer growth and metastasis.

We are focused on advancing the development

of our DNase platform toward a first-in-human, multicenter, dose escalation and dose-expansion study of IV rhDNase I in subjects

with locally advanced or metastatic solid tumors.

Our systemic DNase program is initially targeting multi-billion-dollar indications

including pancreatic cancer (which includes pancreatic ductal adenocarcinoma (“PDAC”)), colorectal carcinoma

(“CRC”) and other gastrointestinal cancers.

These are all cancer indications with significant unmet need, and with

opportunities for substantial improvement of the currently available therapeutic options.

PDAC has a low rate of early diagnosis, a

high mortality rate and a poor five-year survival prognosis.

Symptoms are usually non-specific and as a result, PDAC is often not

diagnosed until it reaches an advanced stage.

Once the disease has metastasized, or spread to other organs, it becomes especially

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Each year, about 185,000 individuals globally are diagnosed with this condition;

and in 2021, the Surveillance, Epidemiology

and End Results program, or SEER, of the National Cancer Institute estimated that in the United States there would be approximately 60,000

individuals diagnosed with pancreatic cancer.

The overall five-year survival rate among pancreatic cancer patients is 7-8%, which constitutes

the highest mortality rate among solid tumor malignancies;

among those diagnosed with metastatic disease, the overall five-year survival

rate is only 3%.

Recent developments that have improved the survival in many cancer types have not been effective for pancreatic cancer

patients, highlighting the need for the development of new therapeutic options.

Furthermore, second-line patients that were diagnosed already with

metastatic disease have very few therapeutic options.

The only approved regimen for second-line patients is Onivyde® in combination

with 5FU and LV.

For these Stage IV at diagnosis patients reaching second-line therapy, median overall survival is only 4.7 months (Macarulla

et al, Pancreas 2020).

A substantial amount of scientific literature has implicated NETs in

the context of cancer pathogenesis and resistance to cancer therapies (including chemo, radio, and immunotherapies such as checkpoint

inhibitors and cell therapies).

In published reports, elevated levels of NETs have been a biomarker associated with poor prognosis in

patients with a variety of cancers.

In addition, resistance to existing therapeutic agents can involve the release of immunosuppressive

signaling factors from NETs, or physical barriers created by NETs, which can impede the infiltration, activity, and survival of cytotoxic

T cells in the tumor microenvironment.

Published pre-clinical models have demonstrated the effectiveness of systemically administered

DNase, alone or in combination with other agents, for the elimination of NETs and prevention of tumor growth and metastasis.

We are currently

focused on advancing our systemic DNase program into the clinic as an adjunctive therapy for pancreatic carcinoma and locally advanced

or metastatic solid tumors.

Adoptive transfer of CAR T cells has emerged as one of the most promising

advances in cancer immunotherapy.

To successfully treat solid tumors, CAR T cells must be able to infiltrate, persist, and maintain anti-tumor

function in a hostile tumor microenvironment that is itself adept at immunosuppression and conducive to tumor cell survival.

Recent approaches

to CAR T design include “armored” CAR-T cells, so named because they can express additional factors to resist immunosuppression

or degrade physical components of the tumor’s extracellular matrix, including NETs.

We intend to conduct pre-clinical research with

the goal of demonstrating that armoring CAR T cells to secrete DNase can support depth and durability of response against solid tumor

Engineered CAR T cells, designed to recognize cancer-associated antigens, are capable of sustained and selective killing

of tumor cells, with substantial reduction of tumor burden.

CAR T therapies have exhibited remarkable clinical success against hematological

malignancies but thus far have failed to demonstrate success in the context of solid tumors.

Published evidence suggests that in addition

to immunosuppressive factors, mechanical barriers formed by NETs can impede T-cell penetration and occlude T-cell contact with tumor cells.

Our collaboration with Belgian Volition SARL Limited (“Volition”)

is an early exploratory program to evaluate the potential combination of Volition’s Nu.Q® technology and Xenetic’s DNase-Armored

CAR T platform to develop proprietary adoptive cell therapies potentially targeting multiple types of solid cancers for which current

CAR T cell therapies have shown limited or no effect.

Under the terms of the collaboration agreement, Volition will fund a research program

and the two parties will share proceeds from commercialization or licensing of any products arising from the collaboration.

Epigenetically

modified nucleosomes are present on tumor cell surfaces and within the tumor microenvironment of multiple types of solid cancers, and

thus these nucleosomes may represent generalizable tumor antigens that are not limited to a single cancer type.

Volition’s Nu.Q®

technology can specifically recognize and target epigenetically modified nucleosomes, while our DNase-Armored CAR T platform is designed

to enhance the function of CAR T cells within solid tumor microenvironments.

XCART is our personalized

CAR T platform technology engineered to target patient-specific tumor neoantigens, with a demonstrated proof of mechanism in B-cell Lymphomas.

The XCART technology platform was designed to utilize an established screening technique to identify polypeptide domains that selectively

bind to the unique B-cell receptor (“BCR”) on the surface of an individual lymphoma patient’s malignant B-cell clones.

This BCR-selective targeting domain is engineered into the antigen-binding domain of a CAR, creating the possibility of a CAR T treatment

that should only recognize a given patient’s malignant B-cell clones.

We believe our personalized CAR T therapies have the potential

to offer cancer patients substantial benefits over the existing standard of care and currently approved CAR T therapies.

We have suspended

development of the XCART platform as we prioritized the DNase platform and intend to focus our resources on development of the DNase programs.

and in 2021, the Surveillance,

Epidemiology and End Results program, or SEER, of the National Cancer Institute estimated that in the United States there would be

approximately 60,000 individuals diagnosed with pancreatic cancer.

The overall five-year survival rate among pancreatic cancer

patients is 7-8%, which constitutes the highest mortality rate among solid tumor malignancies;

among those diagnosed with metastatic

disease, the overall five-year survival rate is only 3%.

Recent developments that have improved the survival in many cancer types

have not been effective for pancreatic cancer patients, highlighting the urgent need for the development of newer, more effective

therapeutic options.

For those few patients that present with earlier stage PDAC, surgical resection followed by chemotherapy is

possible, but for the majority of PDAC patients which present at diagnosis with advanced disease, chemotherapy is the only option,

and has only very limited benefit.

Second-line patients that were diagnosed already with metastatic disease have even fewer

therapeutic options.

The only approved regimen for second-line patients is Onivyde® in combination with 5FU and LV.

Stage IV at diagnosis patients reaching second-line therapy, median overall survival is only 4.7 months (Macarulla et al, Pancreas

CRC is the second most common cause of cancer

death in the United States after lung cancer.

CRC is the third most commonly diagnosed cancer in males and the second in females, globally,

according to the World Health Organization GLOBOCAN database.

In the United States, CRC is the second most common cause of cancer death

after lung cancer.

According to data from the NCI’s Surveillance, Epidemiology, and End Results (“SEER) Program, it is estimated

that in 2023 approximately 153,000 individuals in the U.S.

will be diagnosed with colon cancer, and an estimated 53,000 will die of the

CRC is in decline in older patients (>65 years) but that is offset by a steady increase in CRC diagnoses and deaths in individuals

younger than 55 years of age.

Despite continued overall declines, CRC is rapidly shifting to diagnosis at a younger age, at a more advanced

stage, and in the left colon/rectum.

If CRC is diagnosed at a localized stage, the 5-year survival rate is 91%.

However, if the cancer

has spread to surrounding tissues or organs and/or the regional lymph nodes, the 5-year relative survival rate is 72%.

There are numerous

treatment options for earlier stage CRC patients, but as they progress to advanced and metastatic disease (“mCRC”), those

options become limited.

Approximately 22% of CRC cases have metastasis at presentation, and 19% will develop metastasis after primary

tumor removal.

Unfortunately, if CRC has spread to distant parts of the body, the 5-year relative survival rate is 13%.

All major guidelines recommend patients with mCRC

undergo testing of DNA for high DNA microsatellite instability (MSI-H), a mutation found in approximately 10% of all CRC, and up to 5%

CRC patients that are MSI-H/MMRd (or “mismatch repair deficient”) are candidates for immunotherapy using immune checkpoint

inhibitors (“ICIs”);

at present, there are three ICIs approved for MSI-H/MMRd CRC – Keytruda, Opdivo (anti-PD-1 antibodies)

and Yervoy (anti-CTLA-4 antibody).

While the ICI response rates in this small subset of CRC are encouraging at around 50%, a significant

number of patients are resistant, or become refractory to ICI therapy.

However, the vast majority of mCRC patients (>90%) are microsatellite

stable (“MSS”) and mismatch repair proficient (“MMRp”), where ICIs have not been shown to provide benefit.

lack of ICI response in this subset is due to poor immunogenicity and immunosuppression.

Again, this highlights the urgent need for the

development of newer, more effective therapeutic options.

A substantial amount of scientific literature

has implicated NETs in the context of cancer pathogenesis and resistance to cancer therapies (including chemo, radio, and immunotherapies

such as checkpoint inhibitors and cell therapies).

In published reports, elevated levels of NETs have been a biomarker associated with

poor prognosis in patients with a variety of cancers and in particular, in gastrointestinal cancers.

In addition, resistance to existing

therapeutic agents can involve the release of immunosuppressive signaling factors from NETs, or physical barriers created by NETs, which

can impede the infiltration, activity, and survival of cytotoxic T cells in the tumor microenvironment.

Published pre-clinical models

have demonstrated the effectiveness of systemically administered DNase, alone or in combination with other agents, for the elimination

of NETs and prevention of tumor growth and metastasis.

We are currently focused on advancing our systemic DNase program into the clinic

as an adjunctive therapy for pancreatic carcinoma and locally advanced or metastatic solid tumors, including CRC.

Adoptive transfer of Chimeric Antigen Receptor

(“CAR”) T cells has emerged as one of the most promising advances in cancer immunotherapy.

To successfully treat solid tumors,

CAR T cells must be able to infiltrate, persist, and maintain anti-tumor function in a hostile tumor microenvironment that is itself adept

at immunosuppression and conducive to tumor cell survival.

Recent approaches to CAR T design include “armored” CAR-T cells,

so named because they can express additional factors to resist immunosuppression or degrade physical components of the tumor’s extracellular

matrix, including NETs.

We intend to conduct pre-clinical research with the goal of demonstrating that armoring CAR T cells to secrete

DNase can support depth and durability of response against solid tumor indications.

Engineered CAR T cells, designed to recognize cancer-associated

antigens, are capable of sustained and selective killing of tumor cells, with substantial reduction of tumor burden.

CAR T therapies have

exhibited remarkable clinical success against hematological malignancies but thus far have failed to demonstrate success in the context

of solid tumors.

Published evidence suggests that in addition to immunosuppressive factors, mechanical barriers formed by NETs can impede

T-cell penetration and occlude T-cell contact with tumor cells.

The conduct of several CAR T in vivo models has been a primary focus of

our Scripps collaboration.

Our collaboration with Belgian Volition SARL Limited

(“Volition”) is an early exploratory program to evaluate the potential combination of Volition’s Nu.Q® technology

and Xenetic’s DNase-Armored CAR T platform to develop proprietary adoptive cell therapies potentially targeting multiple types of

solid cancers for which current CAR T cell therapies have shown limited or no effect.

Under the terms of the collaboration agreement,

Volition will fund a research program and the two parties will share proceeds from commercialization or licensing of any products arising

from the collaboration.

Epigenetically modified nucleosomes are present on tumor cell surfaces and within the tumor microenvironment of

multiple types of solid cancers, and thus these nucleosomes may represent generalizable tumor antigens that are not limited to a single

Volition’s Nu.Q® technology can specifically recognize and target epigenetically modified nucleosomes, while our

DNase-Armored CAR T platform is designed to enhance the function of CAR T cells within solid tumor microenvironments.

Additionally, we have partnered with biotechnology

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(“FDA”) nor in any other countries or territories by any applicable agencies.

As noted above, we are receiving ongoing royalties

pursuant to a license of our PolyXen technology to an industry partner.

Although we hold a broad patent portfolio, the

focus of our internal efforts in 2022 was on the licensing and advancement of our DNase platform and on the development of our XCART platform

focus of our internal efforts in 2023 was on the licensing and advancement of our DNase platform.

We were incorporated under the laws of the State

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PolyXen, ErepoXen and ImuXen.

In April 2022 we licensed the DNase platform.

The DNase platform is designed to improve outcomes of existing treatments, including immunotherapies, by targeting NETs (see “Overview”

and “Our Technology and Drug Candidates” for a description of the technology).

Our primary efforts are now aimed at advancing

the systemic DNase program into the clinic as an adjunctive therapy for pancreatic cancer and other locally advanced or metastatic solid

Our goal is to provide solutions in the treatment of solid tumors by improving response and overcoming resistance to checkpoint

inhibitors, chemotherapy, and other standard of care treatments.

We also intend to pursue industry collaborations and potential licenses

to develop DNase for other uses and indications.

Our primary focus is aimed at

advancing the systemic DNase program into the clinic as an adjunctive therapy for pancreatic cancer and other locally advanced or

metastatic solid tumors, including CRC.

Our goal is to provide solutions in the treatment of solid tumors by improving response and

overcoming resistance to checkpoint inhibitors, chemotherapy, and other standard of care treatments.

We also intend to pursue

industry collaborations and potential licenses to develop DNase for other uses and indications.

We intend to pursue orphan drug designations and

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We intend to advance development of our DNase

platform primarily through the use of contract manufacturing and contract research organizations (“CROs”) in order to efficiently

manage our resources.

Continuous pipeline growth and advancement of out-licensed drug candidates is dependent, in part, on our ability

to raise sufficient capital and to advance our existing co-development collaborations and strategic arrangements as well as enter into

new such arrangements.

platform primarily through the use of contract manufacturing, contract research organizations (“CROs”) and academic institutions

in order to efficiently manage our resources.

Continuous pipeline growth and advancement of out-licensed drug candidates is dependent,

in part, on our ability to raise sufficient capital and to advance our existing co-development collaborations and strategic arrangements

as well as enter into new such arrangements.

Business Developments

Exclusive Sublicense Agreement

On April 26, 2022, we entered into an Exclusive

Sublicense Agreement (the “Sublicense Agreement”) with CLS pursuant to which we received an exclusive license, under certain

patent rights and know-how owned or controlled by CLS, to develop and commercialize pharmaceutical products and methods incorporating

DNase enzyme for use in treatment of cancer (the “Sublicensed Products”).

Under the terms of the Sublicense Agreement, we

will have sole responsibility for, and shall use commercially reasonable efforts to, among other things, research, develop and obtain

marketing approval for the Sublicensed Products in the U.S.

and certain European markets, and to commercialize such Sublicensed Products

in the relevant market once marketing approval is obtained.

In consideration for the license and other rights

granted to us under the Sublicense Agreement, we issued to CLS 375,000 shares of our common stock (the “Sublicense Agreement Shares”),

of which 250,000 Sublicense Agreement Shares were issued directly to OPKO Health, Inc.

(“OPKO”) in lieu of transfer indirectly

from CLS to EirGen Pharma Ltd.

(“EirGen”), a wholly owned subsidiary of OPKO, in satisfaction of certain third-party contractual

obligations between CLS and EirGen.

Additionally, we are obligated to pay to CLS up to $13,000,000 in cash in potential milestone payments

for the achievement of certain clinical and regulatory milestones, as well as issue an additional 950,000 shares of our common stock to

CLS based on the achievement of certain regulatory milestones.

In addition, we are obligated to pay tiered royalties ranging from the

mid-single to low-double digits on net sales of licensed products falling within the scope of the license during the Royalty Term (as

defined in the Sublicense Agreement), as well as pay a percentage share in the low-to-mid teens of certain consideration received by us

from any sublicensees.

Exclusive License Agreement

On April 26, 2022, we entered into an Exclusive

License Agreement (the “License Agreement”) with CLS, pursuant to which we received an exclusive license under certain patent

rights and know-how owned or controlled by CLS to develop and commercialize pharmaceutical products and methods incorporating DNase in

conjunction with CAR T therapies (the “Licensed Products”).

Under the terms of the License Agreement, we will have sole responsibility

for, and shall use commercially reasonable efforts to, among other things, research, develop and obtain marketing approval for the Licensed

Products in the U.S.

and certain European markets, and to commercialize such Licensed Products in the relevant market once marketing approval

In consideration for the license and other rights

granted to us under the License Agreement, we paid CLS a one-time fee of $500,000 in cash, issued to CLS 500,000 shares of our common

stock, and are obligated to pay up to $13,000,000 in cash in potential milestone payments for the achievement of certain clinical and

regulatory milestones for each Licensed Product.

In addition, we are obligated to pay tiered royalties ranging from the mid-single to

low-double digits on net sales of licensed products falling within the scope of the license during the Royalty Term (as defined in the

License Agreement), as well as pay a percentage share in the mid-teens to low double digits of certain consideration we receive from any

sublicensees.

Patent Assignment and Volition Collaboration

On October 4, 2022, we completed a patent assignment

related to our collaboration with Volition and CLS.

In connection with the patent assignment, we entered into a Subscription Agreement

with CLS Therapeutics, LLC, a Delaware limited liability company (“CLS LLC”), on October 12, 2022, pursuant to which we agreed

to issue to CLS LLC, and CLS LLC agreed to subscribe for, 850,000 shares of our common stock as consideration for the assignment by CLS

and its affiliates to us of certain patent rights owned by CLS and its affiliates.

2, 2022, we announced a research and development collaboration with Volition to develop NETs-targeted adoptive cell therapies for

the treatment of cancer.

The collaboration is an early exploratory program to evaluate the potential combination of Volition’s Nu.Q®

technology Test and our DNase-Armored CAR T platform to develop proprietary adoptive cell therapies potentially targeting multiple types

of solid cancers.

Under the terms of the collaboration agreement, Volition will fund a research program and the two parties will share

proceeds from commercialization or licensing of any products arising from the collaboration.

On June 30, 2022, we entered into a Statement

of Work (the “SOW”) with Catalent Pharma Solutions LLC (“Catalent”) to outline the general scope of work, timeline,

and pricing pursuant to which Catalent will provide certain services to us to perform cGMP manufacturing of our recombinant protein, Human

Scripps Research

On March 17, 2023, we

entered into a Research Funding and Option Agreement (the “Agreement”) with Scripps Research pursuant to which we have agreed

to provide Scripps Research an aggregate of up to $938,000 to fund research relating to advancing the pre-clinical development of the

Company’s DNase oncology platform technology.

The research funding is payable by us to Scripps Research on a monthly basis in accordance

with a negotiated budget, which provides for an initial payment of approximately $78,000 on the date of the Agreement and subsequent monthly

payments of approximately $78,000 over a 12-month period.

Under the Agreement, we have the option to acquire a worldwide exclusive license

to Scripps Research’s rights in the Technology or Patent Rights (as defined in the Agreement), as well as a non-exclusive, royalty-free,

non-transferrable license to make and use TSRI Technology (as defined in the Agreement) solely for our internal research purposes during

the performance of the research program contemplated by the Agreement.

Unless earlier terminated,

the term of the Agreement continues from the date of the Agreement for fifteen (15) months.

The Agreement may be terminated by us with

30 days advance written notice to Scripps Research beginning six (6) months after the Effective Date (as defined in the Agreement) or

by Scripps Research if we fail to make timely payments due under the Agreement, subject to 30 days’ written notice to cure such

The Agreement may further be terminated by either party in the event of the other party’s uncured failure to perform

any obligations under the Agreement or the bankruptcy of the other party.

Volition Collaboration

On August 2, 2022, we announced a research and

development collaboration with Volition to develop NETs-targeted adoptive cell therapies for the treatment of cancer.

The collaboration

is an early exploratory program to evaluate the potential combination of Volition’s Nu.Q ® technology Test and the

Company’s DNase-Armored CAR T platform to develop proprietary adoptive cell therapies potentially targeting multiple types of solid

Under the terms of the collaboration agreement, Volition will fund a research program and the two parties will share proceeds

from commercialization or licensing of any products arising from the collaboration.

On July 10, 2023, we entered into the first Collaborator

Statement of Work as part of this collaboration with Volition.

Scripps Research Institute (“Scripps

On March 17, 2023, the Company and Scripps Research,

entered into a Research Funding and Option Agreement (the “Agreement”), pursuant to which we agreed to provide Scripps Research

an aggregate of up to $938,000 to fund research relating to advancing the pre-clinical development of our DNase oncology platform technology.

The research funding is payable by us to Scripps Research on a monthly basis in accordance with a negotiated budget, which provides for

an initial payment of approximately $78,000 on the date of the Agreement and subsequent monthly payments of approximately $78,000 over

a 12-month period.

Under the Agreement, we have the option to acquire a worldwide exclusive license to Scripps Research’s rights

in the Technology or Patent Rights (as defined in the Agreement), as well as a non-exclusive, royalty-free, non-transferrable license

to make and use TSRI Technology (as defined in the Agreement) solely for our internal research purposes during the performance of the

research program contemplated by the Agreement.

Unless earlier terminated, the term of the Agreement

continues from the date of the Agreement for fifteen (15) months.

The Agreement may be terminated by us with 30 days advance written notice

to Scripps Research beginning six (6) months after the Effective Date (as defined in the Agreement) or by Scripps Research if we fail

to make timely payments due under the Agreement, subject to 30 days’ written notice to cure such nonpayment.

The Agreement may further

be terminated by either party in the event of the other party’s uncured failure to perform any obligations under the Agreement or

the bankruptcy of the other party.

University of Virginia (“UVA”)

On December 21, 2023, we entered into a Research

Funding and Material Transfer Agreement, as amended, with UVA (the “UVA Agreement”) to advance the development of our systemic

DNase program.

Under the terms of the UVA Agreement, i n

addition to advancing our existing intellectual property, we have an option to acquire an exclusive license to any new intellectual property

arising from the DNase research program.

Allan Tsung, MD, a member of the Company’s Scientific Advisory Board and Chair of

the Department of Surgery at the UVA School of Medicine, will oversee the research conducted under

the UVA Agreement.

As a surgical oncologist and scientist, Dr.

Tsung is internationally recognized for leading substantial research on

the role of NETs in tumor growth, metastasis, and resistance to existing cancer therapies.

Our Technology and Drug Candidates

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During the year ended December 31, 2023, the focus

of our internal development efforts was on the licensing and advancement of our DNase oncology platform and the development of our XCART

We have not been actively pursuing development efforts for PolyXen or any of our other technologies.

of our internal development efforts was on the advancement of our DNase oncology platform.

We have not been actively pursuing development

efforts for XCART or PolyXen or any of our other technologies.

The DNase platform is designed to target NETs,

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Program Highlights:

Exclusive license and sublicense agreements with CLS to develop its interventional DNase platform, which is aimed at improving outcomes

of existing treatments, including immunotherapies;

Advancing toward first-in-human study start targeted for 2024-2025;

Systemic DNase program initially targeting multi-billion-dollar indications

including pancreatic carcinoma and other locally advanced or metastatic solid tumors;

Exclusive license and sublicense agreements with CLS Therapeutics Ltd.

(“CLS”) to develop its interventional DNase platform, which is aimed at improving outcomes of existing treatments, including immunotherapies;

Multiple value-driving milestones expected over the next 12 -24 months;

Systemic DNase program initially targeting multi-billion-dollar indications including pancreatic carcinoma and other locally advanced or metastatic solid tumors;

DNase-armored CAR T program in early pre-clinical development.

The XCART technology platform was designed by its originators to utilize an established screening technique to identify peptide ligands that bind specifically to the unique BCR on the surface of an individual patient’s malignant tumor cells.

The Chimeric Antigen Receptor (“CAR”) T cell (“XCART”) technology platform was designed by its originators to utilize an established screening technique to identify peptide ligands that bind specifically to the unique BCR on the surface of an individual patient’s malignant tumor cells.

The peptide is then inserted into the antigen-binding domain of a CAR T cell, and a subsequent transduction/transfection process is used to engineer the patient’s T cells into a CAR T format which redirects the patient’s T cells to attack the tumor.

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Through partner efforts, we are developing our

pipeline of next-generation bio-therapeutics and novel oncology drugs based on our DNase, XCART and PolyXen proprietary technologies.

In order to do this while efficiently managing our overhead, we rely on the services of contract manufacturers, CROs and our strategic

collaborations.

pipeline of next-generation bio-therapeutics and novel oncology drugs based on our DNase and PolyXen proprietary technologies.

to do this while efficiently managing our overhead, we rely on the services of contract manufacturers, CROs and our strategic collaborations.

We currently do not have in-house research facilities to pursue these initiatives.

Accordingly, continuous pipeline growth

and advancement of our technologies and drug candidates is dependent on several important collaborations and strategic arrangements, including

our arrangements with:

Catalent, a global leader in enabling biopharma,

cell, gene and consumer health partners to optimize development, launch, and supply of better patient treatments across multiple modalities;

Pharmsynthez, including its wholly-owned subsidiary SynBio LLC (“SynBio”), a beneficial owner of approximately 2.9% of our common stock;

The Scripps Research Institute (“Scripps Research”), one of the world’s largest, private non-profit research organizations.

Accordingly, continuous pipeline growth and advancement

of our technologies and drug candidates is dependent on several important collaborations and strategic arrangements, including our arrangements

Catalent Pharma Solutions LLC (“Catalent”),

a global leader in enabling biopharma, cell, gene and consumer health partners to optimize development, launch, and supply of better patient

treatments across multiple modalities;

PJSC Pharmsynthez (“Pharmsynthez”), including its wholly-owned subsidiary SynBio LLC (“SynBio”), a beneficial owner of approximately 3.4% of our common stock;

Scripps Research, one of

the world’s largest, private non-profit research organizations;

The University of Virginia, a non-profit, educational, research and healthcare institution.

Accordingly, in addition to pursuing our development

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successfully developed and marketed.

However, other than royalty payments under a sublicense with Takeda and potential royalty payments

under our collaboration agreement with Pharmsynthez, we do not anticipate any milestone or royalty payments in the near term, if at all.

For further detail, please read the section titled “Significant Collaborations and Strategic Arrangements” below.

However, other than royalty payments under a sublicense with Takeda Pharmaceutical Co.

with its wholly-owned subsidiaries, “Takeda”) and potential royalty payments under our collaboration agreement with Pharmsynthez,

we do not anticipate any milestone or royalty payments in the near term, if at all.

For further detail, please read the section titled

“Significant Collaborations and Strategic Arrangements” below.

Our Drug Candidate Pipeline

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production of the product as early as the first quarter of 2022.

Pharmsynthez has informed us that it had received a response letter indicating

certain deficiencies in the dossier and intends to refile the registration upon correction.

In the first quarter of 2023, Pharmsynthez informed us that it had received

a response letter indicating certain deficiencies in the dossier and continues to develop a gap mitigation strategy with the intent of

refiling the registration upon correction.

Serum Institute conducted Phase I and Phase II

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In October 2017, we granted to Takeda the right

to grant a non-exclusive sublicense to certain patents related to the Company’s PolyXen technology that were previously exclusively

licensed to Takeda in connection with products related to the treatment of blood and bleeding disorders.

Pursuant to the agreement, Takeda

(i) paid us a one-time payment of seven million five hundred thousand dollars ($7,500,000) in November 2017 and (ii) agreed to pay us

single digit royalty payments based upon net sales of the covered products throughout the term.

Royalty payments on net sales commenced

in late 2019.

Royalty payments of approximately $1.7 million and $1.2 million were recorded as revenue by the Company during the years

ended December 31, 2022 and 2021, respectively, and are based on single digit royalties on net sales of certain covered products.

On June 30, 2022, we entered into a SOW with Catalent

to outline the general scope of work, timeline, and pricing pursuant to which Catalent will provide certain services to us to perform

cGMP manufacturing of our recombinant protein, Human DNase I.

The parties agreed to enter into a Master Services Agreement (“MSA”)

that will contain terms and conditions to govern the project contemplated by the SOW and that will supersede the addendum to the SOW containing

Catalent's standard terms and conditions.

In addition, in the event of any conflict between the project-specific terms and conditions

set forth in the SOW and the MSA, the MSA terms and conditions shall govern.

The estimated total cost of the project contemplated by the

SOW is expected to be up to approximately $5 million (exclusive of certain fees and potential alternatives) for the manufacturing services

over the course of the term of the project with each phase of the project invoiced separately in connection with the commencement of such

Unless earlier amended or terminated, the manufacturing services contemplated by the SOW are currently targeted to be completed

by the first half of 2024.

The SOW is terminable by the Company at any time with 30 days' prior written notice to Catalent.

contains customary provisions related to, among other things, confidentiality, warranties, intellectual property and indemnification.

to grant a non-exclusive sublicense to certain patents related to our PolyXen technology that were previously exclusively licensed to

Takeda in connection with products related to the treatment of blood and bleeding disorders.

Royalty payments of approximately $2.5 million

and $1.7 million were recorded as revenue by us during the years ended December 31, 2023 and 2022, respectively, and are based on single

digit royalties on net sales of certain covered products.

On April 26, 2022, we entered into an Exclusive

Sublicense Agreement (the “Sublicense Agreement”) with CLS pursuant to which we received an exclusive license under certain

patent rights and know-how owned or controlled by CLS, to develop and commercialize certain pharmaceutical products and methods incorporating

DNase enzyme for use in the treatment of cancer (the “Sublicensed Products”).

Under the terms of the Sublicense Agreement,

we will have sole responsibility to, and shall use commercially reasonable efforts to, among other things, research, develop and obtain

marketing approval for the Sublicensed Products in the U.S.

and certain European markets, and to commercialize such Sublicensed Products

in the relevant market once marketing approval is obtained.

Concurrent with the Sublicense Agreement, we entered

into an Exclusive License Agreement (the “License Agreement”) with CLS, pursuant to which we received an exclusive license

under certain patent rights and know-how owned or controlled by CLS to develop and commercialize certain pharmaceutical products and methods

incorporating DNase in conjunction with CAR T therapies (the “Licensed Products”).

Under the terms of the License Agreement,

we will have sole responsibility to, and shall use commercially reasonable efforts to, among other things, research, develop and obtain

marketing approval for the Licensed Products in the U.S.

and certain European markets, and to commercialize such Licensed Products in

the relevant market once marketing approval is obtained.

On August 2, 2022, we announced a research and

development collaboration with Volition to develop NETs-targeted adoptive cell therapies for the treatment of cancer and on July 10, 2023

we entered into the first Collaborator Statement of Work with Volition as part of this collaboration.

For more information regarding such

collaboration with Volition, refer to the section titled “Business Developments” above.

On June 30, 2022, we entered into a Statement

of Work (the “SOW”) with Catalent to outline the general scope of work, timeline, and pricing pursuant to which Catalent will

provide certain services to us to perform current Good Manufacturing Practices (“cGMP”) manufacturing of our recombinant protein,

Human DNase I.

The parties agreed to enter into a Master Services Agreement (“MSA”) that will contain terms and conditions

to govern the project contemplated by the SOW and that will supersede the addendum to the SOW containing Catalent’s standard terms

and conditions.

In addition, in the event of any conflict between the project-specific terms and conditions set forth in the SOW and the

MSA, the MSA terms and conditions shall govern.

The estimated total cost of the project contemplated by the SOW is expected to be up to

approximately $5 million (exclusive of certain fees and potential alternatives) for the manufacturing services over the course of the

term of the project with each phase of the project invoiced separately in connection with the commencement of such phase.

Scripps Research

On May 15, 2020, we entered into a Research Funding

and Option Agreement with Scripps Research (the “Scripps Agreement”), pursuant to which we agreed to provide Scripps Research

an aggregate of up to $3.0 million to fund research relating to advancing the pre-clinical development of XCART.

The research funding

was payable by us to Scripps Research on a quarterly basis in accordance with a negotiated budget, which provides for an initial payment

of approximately $300,000 on the date of the Scripps Agreement and subsequent quarterly payments of approximately $300,000 over a 27-month

Under the Scripps Agreement, Scripps Research granted us a license within the Field (as defined in the Scripps Agreement) to any

Patent Rights or Technology (as defined in the Scripps Agreement) under the terms of that certain license agreement with Scripps Research,

dated February 25, 2019, assigned to us on March 1, 2019.

Additionally, we have the option to acquire a worldwide exclusive license to

Scripps Research’s rights in the Technology or Patent Rights not already licensed to us, as well as a non-exclusive, royalty-free,

non-transferrable license to make and use Scripps Research Technology (as defined in the Scripps Agreement) solely for the Company’s

internal research purposes during the performance of the research program contemplated by the Scripps Agreement.

During the second quarter

of 2022, the parties mutually agreed to terminate additional funding under the Scripps Agreement.

As a result, Scripps Research agreed

to continue to perform work under the agreement until funding previously advanced was expended.

PJSC Pharmsynthez

In November 2009, we entered into a collaborative

research and development license agreement with Pharmsynthez (the “Pharmsynthez Arrangement”) pursuant to which we granted

an exclusive license to Pharmsynthez to develop, commercialize and market six product candidates based on our PolyXen and ImuXen technology

in certain territories.

In exchange, Pharmsynthez granted us an exclusive license to use any preclinical and clinical data developed by

Pharmsynthez within the scope of the Pharmsynthez Arrangement and to engage in further research, development and commercialization of

drug candidates outside of certain territories at our own expense.

Pharmsynthez is wholly responsible for funding

and conducting its own research and clinical development activities in Russia.

There are no milestones or other research related payments

provided for under the Pharmsynthez Arrangement other than royalties.

The Pharmsynthez Arrangement shall continue until it is terminated

in accordance with the terms and conditions set forth therein.

In August 2011, we entered into a stock subscription

and collaborative development agreement with SynBio (the “Co-Development Agreement”), a wholly-owned subsidiary of Pharmsynthez,

pursuant to which we granted SynBio an exclusive license to develop, market and commercialize certain drug candidates utilizing molecules

based on SynBio’s technology and our PolyXen, OncoHist and ImuXen platform technologies in Russia and the CIS, collectively referred

to herein as the SynBio Market.

In exchange for our granting to SynBio those certain license rights, SynBio granted an exclusive license

to us to use any preclinical and clinical data generated by SynBio and to engage in the development of commercial candidates that may

arise from the collaboration in any territory outside of the SynBio Market based upon the Co-Development Agreement.

SynBio is wholly responsible for funding and conducting

its own research and clinical development activities in Russia.

There are no milestones or other research-related payments provided for

under the Co-Development Agreement other than fees for the supply of each party’s respective research supplies based on their technology,

which, when provided, are due to mutual convenience and not representative of an ongoing or recurring obligation to supply research supplies.

Upon successful commercialization of any resultant products, we are entitled to receive a 10% royalty on sales in certain territories

and pay royalties to SynBio for sales outside those certain territories subject to the terms of the Co-Development Agreement.

years ended December 31, 2022, and December 31, 2021, there were no supply service revenues in connection with the Co-Development

The Co-Development Agreement continues until it is terminated in accordance with the terms and conditions set forth therein.

Effective December 20, 2021 SynBio assigned the Co-Development Agreement to its parent company, Pharmsynthez.

See Note 4 Significant Strategic Collaborations

for Pharmsynthez’ share ownership in us.

Serum Institute

In August 2011, we entered into a collaborative

research and development agreement with Serum Institute (the “Serum Agreement”) providing Serum Institute an exclusive license

to use our PolyXen technology to research and develop one potential commercial product, Polysialylated Erythropoietin (“PSA-EPO.”)

Serum Institute is responsible for conducting all preclinical and clinical trials required to achieve regulatory approvals within certain

predetermined territories at Serum Institute’s own expense.

Royalty payments are payable by Serum Institute to us for net sales

to certain customers in the Serum Institute sales territory.

Royalty payments are payable by us to Serum Institute for net sales received

by us over the term of the license.

There are no milestone or other research-related payments due under the collaborative arrangement.

The Serum Agreement continues until it is terminated in accordance with the terms and conditions set forth therein.

Through December 31,

2022, no commercial products were developed and no royalty revenue or expense was recognized by us related to this arrangement.

Institute had a share ownership of less than 1% of our total outstanding common stock as of December 31, 2022.

On March 17, 2023, the Company and Scripps Research

entered into the Agreement, pursuant to which we have agreed to provide Scripps Research an aggregate of up to $938,000 to fund research

relating to advancing the pre-clinical development of our DNase oncology platform technology.

For more information regarding the Agreement,

refer to the section titled “Business Developments” above.

Other Agreements

We have also entered into various research, development,

license and supply agreements with Serum Institute of India (“Serum Institute”), Pharmsynthez and SynBio, a wholly owned subsidiary

of Pharmsynthez.

We and our collaborative partners continued to engage in research and development activities with no resultant commercial

products through December 31, 2023.

No amounts were recognized as revenue related to the Serum Institute, Pharmsynthez or SynBio agreements

during each of the years ended December 31, 2023 and 2022.

Our Intellectual Property

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We also plan to

rely on data exclusivity, market exclusivity and patent term extensions when available.

Our commercial success will depend in part on

our ability to obtain and maintain patent and other proprietary protection for our technology, inventions and improvements;

the confidentiality of our trade secrets;

to obtain and maintain licenses to use intellectual property owned by third parties;

and enforce our proprietary rights, including any patents that we may own in the future;

and to operate without infringing on the valid

and enforceable patents and other proprietary rights of third parties.

rely on data exclusivity, market exclusivity and patent term and supplemental patent certificate extensions when available.

Our commercial

success will depend in part on our ability to obtain and maintain patent and other proprietary protection for our technology, inventions

and improvements;

to preserve the confidentiality of our trade secrets;

to obtain and maintain licenses to use intellectual property owned

by third parties;

to defend and enforce our proprietary rights, including any patents that we may own in the future;

and to operate without

infringing on the valid and enforceable patents and other proprietary rights of third parties.

Our drug candidates are in various stages of development,

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Our first issued patents began to expire in 2021 with the majority of the existing issued patents

for our PolyXen and OncoHist technology expiring between 2025 and 2030.

for our PolyXen technology expiring between 2025 and 2030.

Our XCART and XDNASE patent families include patent applications that were

recently filed, with those most recently filed having an expiration date of 2042.

Our patent strategy is to file patent applications

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though we do not necessarily file a patent application in each of these jurisdictions for every patent family.

As of January 23, 2023, we directly or indirectly

As of February 15, 2024, we directly or indirectly

through a license with CLS), through our wholly-owned subsidiaries, Hesperix and Xenetic U.K., and Xenetic U.K.’s wholly-owned

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This number includes patents and patent applications that we have acquired or filed covering various aspects

of our DNase and XCART platform technology, including all rights throughout the world in and to patents and patent applications related

of our XDNASE and XCART platform technology, including all rights throughout the world in and to patents and patent applications related

to “Articles And Methods Directed To Personalized Therapy Of Cancer,” and our PolyXen platform technology covering polysialylation

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PSA-granulocyte colony stimulating factor (PSA-GCSF).

Further patents cover methods to prepare proteins that are linked to a PSA.

method patents include those that link a PSA to a protein in a high pH solution as well as patents that use a process for producing an

aldehyde derivative of a sialic acid through the opening and oxidation of a sialic acid unit.

For instance, we have patent protection

for a PSA linkage that can be at the N-terminus.

Further patents cover methods to prepare proteins that are linked to a PSA as well

as covering PSA linkages.

These method patents include those that link a PSA to a protein in a high pH solution as well as patents that

use a process for producing an aldehyde derivative of a sialic acid through the opening and oxidation of a sialic acid unit.

For instance,

we have patent protection for a PSA linkage that can be at the N-terminus.

We have received patent protection for the production

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We have also received patent protection for our

DNase technology, which covers the use of DNase for the treatment of cancer and amelioration of the side effects associated with a cancer

XDNASE technology, which covers the use of DNase for the treatment of cancer and amelioration of the side effects associated with a cancer

The DNase can be administered alone or in combination with a cancer therapeutic.

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The portfolio

further covers the use of CAR-T cells with or without a DNase that are administered with an immune checkpoint inhibitor or modulator to

further covers the use of CAR-T cells with or without DNase that are administered with an immune checkpoint inhibitor or modulator to

treat a cancer.

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or claims an FDA approved product can be extended to recapture a portion of the term effectively lost as a result of the FDA regulatory

review period, which is called patent term extension.

The restoration period cannot be longer than five years, and the total patent term,

including the restoration period, must not exceed fourteen years following FDA approval.

review period, which is called patent term extension in the United States and supplemental patent certificate in Europe and several other

The restoration period cannot be longer than five years, and the total patent term, including the restoration period, must

not exceed fourteen years following FDA approval.

The term of patents outside of the U.S.

in accordance with the laws of the foreign jurisdiction but is typically also twenty years from the earliest effective filing date.

the actual protection afforded by a patent varies on a product-by-product basis, from country-to-country, and depends upon many factors,

including the type of patent, the scope of its coverage, the availability of regulatory-related extensions, the availability of legal

remedies in a particular country and the validity and enforceability of the patent.

varies in accordance with the laws of the foreign

jurisdiction but is typically also twenty years from the earliest effective filing date.

However, the actual protection afforded by a

patent varies on a product-by-product basis, from country-to-country, and depends upon many factors, including the type of patent, the

scope of its coverage, the availability of regulatory-related extensions, the availability of legal remedies in a particular country and

the validity and enforceability of the patent.

In certain situations, where we work with drugs

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submission to the FDA of an NDA or BLA;

satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current Good Manufacturing Practices (“cGMP”) requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with cGMPs requirements to assure that the facilities, methods and controls are adequate to preserve the drug’s identity, strength, quality and purity;

FDA review and approval of the NDA or BLA.

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Medicare Part D is administered by private prescription drug plans approved by the U.S.

government, and each drug plan establishes its own Medicare Part D formulary for prescription drug coverage and pricing, which the drug

plan may modify from time-to-time.

Medicare Part B covers most injectable drugs given in an in-patient setting and some drugs administered

by a licensed medical provider in hospital outpatient departments and doctors’ offices.

Medicare Part B is administered by Medicare

Administrative Contractors, which generally have the responsibility of making coverage decisions.

Subject to certain payment adjustments

and limits, Medicare generally pays for Part B covered drugs based on a percentage of manufacturer-reported average sales price.

products are subject to discounted pricing when purchased by federal agencies via the Federal Supply Schedule, or FSS.

FSS participation

is required for a drug product to be covered and paid for by certain federal agencies and for coverage under Medicaid, Medicare Part B

and the PHS pharmaceutical pricing program.

FSS pricing is negotiated periodically with the Department of Veterans Affairs.

is intended to not exceed the price that a manufacturer charges its most-favored non-federal customer for its product.

In addition, prices

for drugs purchased by the Veterans Administration, Department of Defense (including drugs purchased by military personnel and dependents

through the TRICARE retail pharmacy program), Coast Guard and PHS are subject to a cap on pricing (known as the “federal ceiling

price”) and may be subject to an additional discount if pricing increases more than inflation.

To maintain coverage of drugs under

the Medicaid Drug Rebate Program, manufacturers are required to extend discounts to certain purchasers under the PHS pharmaceutical pricing

Purchasers eligible for discounts include hospitals that serve a disproportionate share of financially-needy patients, community

health clinics and other entities that receive health services grants from the PHS.

government, and each drug plan and/or pharmacy benefit manager establishes its own Medicare Part D formulary for prescription drug coverage

and pricing, which the drug plan and/or pharmacy benefit manager may modify from time-to-time.

Medicare Part B covers most injectable

drugs given in an in-patient setting and some drugs administered by a licensed medical provider in hospital outpatient departments and

doctors’ offices.

Medicare Part B is administered by Medicare Administrative Contractors, which generally have the responsibility

of making coverage decisions.

Subject to certain payment adjustments and limits, Medicare generally pays for Part B covered drugs based

on a percentage of manufacturer-reported average sales price.

Drug products are subject to discounted pricing when purchased by federal

agencies via the Federal Supply Schedule, or FSS.

FSS participation is required for a drug product to be covered and paid for by certain

federal agencies and for coverage under Medicaid, Medicare Part B and the PHS pharmaceutical pricing program.

FSS pricing is negotiated

periodically with the Department of Veterans Affairs.

FSS pricing is intended to not exceed the price that a manufacturer charges its

most-favored non-federal customer for its product.

In addition, prices for drugs purchased by the Veterans Administration, Department

of Defense (including drugs purchased by military personnel and dependents through the TRICARE retail pharmacy program), Coast Guard and

PHS are subject to a cap on pricing (known as the “federal ceiling price”) and may be subject to an additional discount if

pricing increases more than inflation.

To maintain coverage of drugs under the Medicaid Drug Rebate Program, manufacturers are required

to extend discounts to certain purchasers under the PHS pharmaceutical pricing program.

Purchasers eligible for discounts include hospitals

that serve a disproportionate share of financially-needy patients, community health clinics and other entities that receive health services

grants from the PHS.

In March 2010, the U.S.

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These individuals include scientific advisors as well as independent consultants.

The biotechnology and pharmaceutical industries are characterized by

rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products.

While we believe that our technology,

development experience and scientific knowledge provide us with competitive advantages, we face potential competition from many different

sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions and governmental

agencies and public and private research institutions.

Any product candidates that we successfully develop and commercialize will compete

with existing therapies and new therapies that may become available in the future.

Many of our competitors may have significantly greater financial resources

and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials, obtaining regulatory approvals,

and marketing approved products than we do.

Mergers and acquisitions in the pharmaceutical, biotechnology, and diagnostic industries may

result in even more resources being concentrated among a smaller number of our competitors.

These competitors also compete with us in

recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration

for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

Smaller or early stage companies

may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies.

The key competitive factors affecting the success of all our product

candidates, if approved, are likely to be their efficacy, safety, side effects, convenience, price, the level of generic competition,

and the availability of reimbursement from government and other third-party payors.

Our commercial opportunity could be reduced or eliminated if our competitors

develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient, or are

less expensive than any products that we may develop.

Our competitors also may obtain FDA or other regulatory approval for their products

more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before

we are able to enter the market.

In addition, our ability to compete may be affected in many cases by insurers or other third-party payors

seeking to encourage the use of generic products.

There are many generic products currently on the market for the indications that we

are pursuing, and additional products are expected to become available on a generic basis over the coming years.

If our therapeutic product

candidates are approved, we expect that they will be priced at a significant premium over competitive generic products.

The most common methods of treating patients with cancer are surgery,

radiation and drug therapy, including chemotherapy, hormone therapy, immunotherapy, and targeted drug therapy.

There are a variety of

available drug therapies marketed for cancer.

The biotechnology and pharmaceutical industries

are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products.

While we believe

that our technology, development experience and scientific knowledge provide us with competitive advantages, we face potential competition

from many different sources, including major pharmaceutical, specialty pharmaceutical and biotechnology companies, academic institutions

and governmental agencies and public and private research institutions.

Any product candidates that we successfully develop and commercialize

will compete with existing therapies and new therapies that may become available in the future.

Many of our competitors may have significantly

greater financial resources and expertise in research and development, manufacturing, preclinical testing, conducting clinical trials,

obtaining regulatory approvals, and marketing approved products than we do.

Mergers and acquisitions in the pharmaceutical, biotechnology,

and diagnostic industries may result in even more resources being concentrated among a smaller number of our competitors.

These competitors

also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and

patient registration for clinical trials, as well as in acquiring technologies complementary to, or necessary for, our programs.

or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and

established companies.

The key competitive factors affecting the success

of all our product candidates, if approved, are likely to be their efficacy, safety, side effects, convenience, price, the level of generic

competition, and the availability of reimbursement from government and other third-party payors.

Our commercial opportunity could be reduced or

eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects,

are more convenient, or are less expensive than any products that we may develop.

Our competitors also may obtain FDA or other regulatory

approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong

market position before we are able to enter the market.

In addition, our ability to compete may be affected in many cases by insurers

or other third-party payors seeking to encourage the use of generic products.

There are many generic products currently on the market

for the indications that we are pursuing, and additional products are expected to become available on a generic basis over the coming

If our therapeutic product candidates are approved, we expect that they will be priced at a significant premium over competitive

generic products.

The most common methods of treating patients with

cancer are surgery, radiation and drug therapy, including chemotherapy, hormone therapy, immunotherapy, and targeted drug therapy.

are a variety of available drug therapies marketed for cancer.

In many cases, these drugs are administered in combination to enhance efficacy.

To the extent

our product candidates are ultimately used in combination with or as an adjunct to existing drug or other therapies, our product candidates

will not be competitive with them.

Some of the currently approved drug therapies are branded and subject to patent protection, and others

are available on a generic basis.

Many of these approved drugs are well established therapies and are widely accepted by physicians, patients

and third-party payors.

In general, although there has been considerable progress over the past few decades in the treatment of cancer

and the currently marketed therapies provide benefits to many patients, these therapies all are limited to some extent in their efficacy

and frequency of adverse events, and none of them are successful in treating all patients.

As a result, the level of morbidity and mortality

from cancer remains high.

To the extent our product candidates are ultimately used in combination with or as an adjunct to existing drug or other therapies, our

product candidates will not be competitive with them.

Some of the currently approved drug therapies are branded and subject to patent

protection, and others are available on a generic basis.

Many of these approved drugs are well established therapies and are widely accepted

by physicians, patients and third-party payors.

In general, although there has been considerable progress over the past few decades in

the treatment of cancer and the currently marketed therapies provide benefits to many patients, these therapies all are limited to some

extent in their efficacy and frequency of adverse events, and none of them are successful in treating all patients.

As a result, the level

of morbidity and mortality from cancer remains high.

DNase for pancreatic cancer and solid tumors

In the field of pancreatic cancer, we will compete with the few, currently

approved treatments for pancreatic carcinoma, including pancreatic ductal adenocarcinoma (“PDAC”).

In the first line setting,

Gemcitabine in combination with Abraxane ® or FOLFIRINOX regimen are the current standard of care.

Oncologists have limited

options of existing therapies for second-line metastatic patients.

The only FDA-approved second-line treatment is Onivyde ®

in combination with Fluorouracil (5FU) and leucovorin (LV) for gemcitabine-treated patients.

In addition to chemotherapy, Merck’s

KEYTRUDA ® was approved for MSI-H cancers (approximately 1% of all cases) and Lynparza ® was approved for

maintenance of BRCA mutated pancreatic cancer (approximately 7% of all cases).

In the last years there have been a number of late-stage clinical failures

of compounds for advanced PDAC.

In the field of pancreatic cancer, we will compete

with the few, currently approved treatments for pancreatic carcinoma, including pancreatic ductal adenocarcinoma (“PDAC”).

In the first line setting, Gemcitabine in combination with Abraxane ® or FOLFIRINOX regimen are the current standard of

care, although NALIRIFOX, which substitutes liposomal irinotecan (Onivyde) for irinotecan, recently received FDA approval for first-line

treatment of metastatic pancreatic adenocarcinoma.

Oncologists have limited options of existing therapies for second-line metastatic patients.

The only FDA-approved second-line treatment is Onivyde ® in combination with Fluorouracil (5FU) and leucovorin (LV) for

gemcitabine-treated patients.

In addition to chemotherapy, Merck’s KEYTRUDA ® was approved for MSI-H cancers (approximately

1% of all cases) and Lynparza ® was approved for maintenance of BRCA (or “BReast CAncer gene”) mutated pancreatic

cancer (approximately 7% of all cases).

In the last years there have been a number of

late-stage clinical failures of compounds for advanced PDAC.

Most of these failed trials have been based on a single promising endpoint.

There are very few compounds

in advanced stages of development in PDAC.

With respect to other solid tumors, there are a large number of companies

developing treatments intended to be used in combination with approved immunotherapies, including immune checkpoint inhibitors, to treat

a variety of solid tumor indications.

XCART for B-cell lymphomas

There are a number of CAR T therapies approved

and EU including Novartis’ Kymriah (tisagenlecleucel);

Gilead Sciences, Inc.’s and Kite Pharma’s Yescarta

(axicabtagene ciloleucel) and Tecartus (brexucabtagene autoleucel);

Bristol Myers Squibb’s Breyanzi (lisocabtagene maraleucel) and

Abecma (idecabtagene vicleucel);

and Janssen’s Carvykti (ciltacabtagene autoleucel).

In addition, there are over one-hundred CAR

T therapy products in development with a significant number being allogeneic and off-the-shelf cell therapies.

In addition, depending

on the diseases that our CAR T therapies target, we may face competition in the indication of interest from both CAR T therapies and other

modalities such as small molecules and antibodies.

T-cell based treatments for cancer, such as CAR T and TCR therapies, have recently

been an area of significant research and development by academic institutions and biopharmaceutical companies.

There are very few compounds in advanced stages of development in PDAC.

With respect to other solid tumors, there are

a large number of companies developing treatments intended to be used in combination with approved immunotherapies, including immune checkpoint

inhibitors, to treat a variety of solid tumor indications.

In the field of CRC, there are numerous approved treatments for CRC diagnosed

at earlier stages.

However, for mCRC, chemotherapy remains the mainstay of systemic treatment for MSS/MMRp mCRC, which at 95%, represent

the majority of mCRC patients.

Chemotherapy regimens will typically consist of a fluoropyrimidine (5-FU or capecitabine) paired in a two-drug

regimen (doublet) with irinotecan or oxaliplatin.

Treatment regimens can be 5-FU- or capecitabine-based and can be either oxaliplatin-based

(FOLFOX or CAPEOX) or irinotecan- based (FOLFIRI or CAPIRI) with no difference in survival.

Regimens with a three-drug (triplet) combination,

FOLFIRINOX or FOLFOXIRI, are also available as first-line therapy and are commonly paired with the anti-VEGF antibody bevacizumab.

therapy is tailored according to previous therapies.

In general, patients who receive oxaliplatin-based chemotherapy upfront should be

treated with irinotecan-based chemotherapy and vice versa [20–22].

Biologics such as aflibercept ramucirumab are added based on

molecular profiling.

After progression on second-line therapy, patients with RAS/BRAF wild-type disease receive an EGFR inhibitor combined

with irinotecan.

Alternatively, if they have HER2 mutation, trastuzumab is typically preferred.

Patients with the BRAF V600E

mutation typically receive an encorafenib-cetuximab regimen.

For those 5% of patients with MSI-H/dMMR mCRC,

immune checkpoint inhibitors are now the preferred first line therapy.

However, 50% of those will fail and the therapeutic options then

become very limited.

Immunotherapy is so far largely considered ineffective in MSS/MMRp mCRC.

We will compete with novel combinations

of ICIs with conventional cancer drugs or immunotherapeutics that have started to expose vulnerabilities in MSS/MMRp mCRC.

These include

dual immune checkpoint inhibition of both the PD-1/L1 axis and CTLA-4.

Other combinations being explored include immunotherapies combined

with anti-EGFR antibodies, small molecule VEGFR inhibitors, small molecule inhibitors against other targets (for example, KRAS), and novel

ICIs targeting lymphocyte activation gene 3 (LAG3).

These combination have shown modest benefit and with the exception of LAG3, do not

directly address the main reasons for ICI failure, which are lower mutation and neoantigen loads in MSS/MMRp mCRC compared to MSI-H/MMRd

mCRC, and immunosuppression.

PSA for Drug Delivery

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business