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Item 1A. Risk Factors

2026-03-16 compared with 2025-03-11 · 333 added, 232 removed, 1246 unchanged (31% of the section changed)

Investors should carefully consider the risks described below, together with the other information contained in this Annual Report, including in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our audited consolidated financial statements and the related notes contained in this Annual Report.

The events discussed below may occur and adversely impact our business, financial condition, results of operations and prospects, which may cause the trading price of our common stock to decline.

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We have incurred, and will continue to incur, significant expenses related to the clinical development of our product candidates and ongoing operations.

For the year ended December 31, 2024, we reported a net loss of $157.0 million.

As of December 31, 2024, we had accumulated deficit of $387.4 million, which included non-cash charges for stock-based compensation and acquisition and development expenses.

For the years ended December 31, 2025 and 2024, we reported a net loss of $377.7 million and $157.0 million, respectively.

As of December 31, 2025, we had an accumulated deficit of $765.1 million.

We expect to continue to incur significant losses for the foreseeable future, and we expect these losses to increase as we advance the development of our product candidates.

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We anticipate that our expenses will increase substantially if, and as, we:

● continue clinical development of obexelimab and our other programs;

● advance our obexelimab program and our other product candidates through preclinical development and clinical trials;

● continue clinical development of obexelimab, orelabrutinib and our other programs;

● advance our obexelimab and orelabrutinib programs and our other product candidates through preclinical development and clinical trials;

● identify additional product candidates and acquire rights from third parties to those product candidates through licenses or acquisitions and conduct development activities, including preclinical studies and clinical trials;

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● commercialize our current or any future product candidates, if approved;

● take steps toward our goal of being an integrated biopharma company capable of supporting commercial activities, including establishing sales, marketing and distribution infrastructure;

● continue to take steps toward our goal of being an integrated biopharma company capable of supporting commercial activities, including establishing sales, marketing and distribution infrastructure, including pre-commercialization preparation for the potential launch of obexelimab in IgG4-RD;

● attract, hire and retain qualified clinical, scientific, operations and management personnel;

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● experience delays in our preclinical studies, clinical trials or regulatory approval for our current or any future product candidates, including with respect to failed studies, inconclusive results, safety issues or other regulatory challenges;

● establish agreements with contract research organizations (“CROs”) and contract manufacturing organizations (“ CMOs”);

● establish agreements with CROs and CMOs;

● incur additional costs associated with being a public company, including audit, legal, regulatory and tax-related services associated with maintaining compliance with an exchange listing and the Securities and Exchange Commission (the “SEC”) requirements, director and officer insurance premiums and investor relations costs.

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Our operations have consumed substantial amounts of cash since inception.

We expect our expenses to substantially increase in connection with our ongoing and future activities.

Because the outcome of any clinical trial or preclinical study is uncertain, we cannot reliably estimate the actual amount of capital necessary to successfully complete the development and commercialization of obexelimab and other product candidates.

As of December 31, 2024, we had $350.8 million in cash, cash equivalents and short-term investments.

Based upon our current operating plan, we believe that our cash, cash equivalents and investments as of December 31, 2024, will be sufficient to fund our operating expenses and capital expenditure requirements into the fourth quarter of 2026.

We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

We expect to attempt to raise additional cash in advance of exhausting our available capital resources.

We expect our expenses to substantially increase in connection with our ongoing and future activities, including, without limitation, our two Phase 3 trials of orelabrutinib in forms of progressive MS.

If we obtain regulatory approval for obexelimab or other product candidates, we also expect to incur significant commercialization expenses related to manufacturing, marketing, sales and distribution of such products, and we will incur costs as part of pre-commercialization preparations for a potential launch of obexelimab.

In addition, other unanticipated costs may arise.

As of December 31, 2025, we had $360.5 million in cash, cash equivalents and investments.

Based on our current operating plans, we expect that our existing cash, cash equivalents and investments together with the $71.5 million of net proceeds received to date in the first quarter of 2026 from sales under our ATM Program and the first tranche of $75.0 million available under the Company’s debt arrangement with Pharmakon (see Note 18, Subsequent Events , to our consolidated financial statements included elsewhere in this Annual Report), will be sufficient to fund our operations and capital expenditure requirements for approximately twelve months from the date of our consolidated financial statements are issued.

However, due to the uncertainties inherent in forecasting our future cash requirements, management has concluded that these resources are not sufficient to alleviate substantial doubt with respect to our ability to continue as a going concern.

Our financial statements do not include any adjustments or changes in classification of assets or liabilities that may result from our possible inability to continue as a going concern.

However, we expect to finance our operations through private or public equity financing, debt financing or other capital resources.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for a product candidate, and we may not ever generate significant revenue or profits.

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Our future funding requirements will depend on, and could increase significantly as a result of, many factors, including:

● the scope, timing and progress of our ongoing obexelimab clinical studies and other research and development activities associated with the development of other and future product candidates;

● the scope, timing and progress of our ongoing obexelimab and orelabrutinib clinical studies and other research and development activities associated with the development of other and future product candidates;

● the number and scope of preclinical and clinical programs we decide to pursue;

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● obtaining, maintaining, defending and enforcing patent claims and other intellectual property rights;

● our ability to hire additional personnel and consultants as our business grows, including additional executive officers and clinical development, regulatory, chemistry, manufacturing and controls, quality and commercial personnel;

● our ability to retain personnel and hire additional personnel and consultants as our business grows, including additional officers and clinical development, regulatory, chemistry, manufacturing and controls, quality and commercial personnel;

● commercializing product candidates, if approved, whether alone or in collaboration with others;

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Accordingly, we will need to continue to rely on additional financing to achieve our business objectives.

For example, in March 2026, we entered into the Loan Agreement with Credit PLC (the “Collateral Agent”), BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon, providing for up to $250.0 million term loan facility consisting of several tranches of loans that will become available upon the achievement of certain milestones.

See “Item 9B – Other Information” for additional information.

Adequate additional financing may not be available to us on acceptable terms, or at all, including as a result of financial and credit market deterioration or instability, market-wide liquidity shortages, geopolitical events or otherwise.

If we are unable to raise sufficient additional capital, we would be forced to curtail our planned operations and the pursuit of our growth strategy.

Raising additional capital may cause dilution to our stockholders imposing restrictions on our operations or require us to relinquish rights to our product candidates.

Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern.

In its report accompanying our audited financial statements for the year ended December 31, 2025, our independent registered public accounting firm included an explanatory paragraph stating that our recurring losses from operation and expectations of continuing operating losses raise substantial doubt about our ability to continue as a going concern for a period of one year after the date the financial statements are issued.

See Note 1 to our consolidated financial statements appearing elsewhere in our Annual Report for additional information on our assessment.

Our future viability is dependent on our ability to generate cash from our operating activities or to raise additional capital to finance our operations.

There is no assurance that we will succeed in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all.

The perception that we might be unable to continue as a going concern may also make it more difficult to obtain financing for the continuation of our operations on terms that are favorable to us, or at all, and could result in the loss of confidence by investors, suppliers and employees.

If we are unable to continue as a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our financial statements and it is likely that our investors will lose all or a part of their investment.

Raising additional capital may cause dilution to our stockholders, impose restrictions on our operations or require us to relinquish rights to our product candidates.

Until such time, if ever, that we generate substantial product revenue, we expect to finance our cash needs through equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other arrangements.

To the extent that we raise additional capital through the sale of equity or convertible debt securities, stockholders’ ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect their rights as a holder of our common stock.

For example, in October 2025, we closed our private placement of 6,311,030 shares of common stock for net proceeds of approximately $111.8 million, after deducting placement agent fees and other offering costs.

Any future debt or preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, selling or licensing our assets, making capital expenditures, declaring dividends or encumbering our assets to secure future indebtedness.

Such restrictions could adversely impact our ability to conduct our operations and execute our business plan.

In September 2025, the Company and Royalty Pharma Investments 2019 ICAV (“Royalty Pharma”) entered into the Revenue Participation Right Purchase and Sale Agreement (the “Royalty Purchase Agreement”).

The Royalty Purchase Agreement contains covenants that impose on us certain obligations, including with respect to royalty payments, advancement of our obexelimab program and reporting of clinical, regulatory and commercial updates to Royalty Pharma and includes restrictions on intellectual property transfers and out-licenses.

The Royalty Purchase Agreement also limits our ability to incur certain types of indebtedness prior to the consummation of a change of control and limits our ability to create or incur liens or dispose of certain assets related to obexelimab.

The Royalty Purchase Agreement may only be terminated by mutual written agreement of Royalty Pharma and us.

Additionally, in March 2026, the Company entered into the Loan Agreement with Credit PLC (the “Collateral Agent”), BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon and the guarantors party to such agreement.

The Loan Agreement contains customary affirmative and restrictive covenants and representations and warranties.

We and our subsidiaries are bound by certain affirmative covenants setting forth actions that are required during the term of the Loan Agreement, including, without limitation, certain information delivery requirements (including that consolidated financial statements delivered for and after the fiscal year ending December 31, 2026 are not subject to any qualification as to “going concern” or “scope of audit”), obligations to maintain certain insurance, and certain notice requirements.

The Loan Agreement contains customary financial covenants, including (i) at all times prior to the satisfaction of the Tranche B/C Approval Condition, a minimum liquidity requirement and (ii) subject to the outstanding aggregate principal amount of Term Loans advanced under the Loan Agreement being equal to or greater than $200.0 million, a minimum trailing twelve months consolidated net revenue covenant.

Additionally, we and our subsidiaries are bound by certain restrictive covenants setting forth actions that are not permitted to be taken during the term of the Loan Agreement, including, without limitation, (i) selling or disposing of assets, (ii) amending, modifying or waiving our rights under material agreements, (iii) consummating change in control transactions unless all amounts becoming due under the Loan Agreement are paid in full immediately upon (and concurrent with) the consummation of any such change in control transaction, (iv) incurring additional indebtedness, (v) incurring non-permitted liens or encumbrances on our or our subsidiaries’ assets, (vi) paying dividends or making any distribution or payment on or redeeming, retiring or purchasing any equity interests, (vii) making payments on subordinated indebtedness and (viii) making investments other than permitted acquisitions and permitted investments, in each case, subject to specified exceptions including, in the case of restrictions on incurrence of additional indebtedness, the ability to incur certain convertible indebtedness and enter into certain permitted royalty financing agreements.

Compliance with the covenants under the Royalty Purchase Agreement and the Loan Agreement limits our flexibility in operating our business and our ability to take actions that might otherwise be advantageous to us.

If we raise additional funds through future collaborations, licenses and other arrangements, we likely would relinquish valuable rights to our potential future revenue streams or product candidates.

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Moreover, clinical data are often susceptible to varying interpretations and analyses, and many companies that have believed their product candidates performed satisfactorily in clinical trials have nonetheless failed to obtain marketing approval of such product candidates.

Commencing any future clinical trials is subject to finalizing the trial design and submitting an application, such as an IND or BLA, to the FDA or a comparable foreign regulatory authority.

Even after the submission of an IND or BLA, the FDA or comparable foreign regulatory authorities could disagree that their requirements to commence a clinical trial have been satisfied or disagree with the study design, which may require the completion of additional trials or the amendment of the

trial’s protocols or the imposition of stricter conditions on the commencement of the clinical trial.

Commencing any future clinical trials is subject to finalizing the trial design and submitting an application, such as an IND, to the FDA or a comparable foreign regulatory authority.

Even after the submission of an IND, the FDA or comparable foreign regulatory authorities could disagree that their requirements to commence a clinical trial have been satisfied or disagree with the study design, which may require the completion of additional trials or the amendment of the trial’s protocols or the imposition of stricter conditions on the commencement of the clinical trial.

We may be unable to establish clinical endpoints, dose levels and regimens or bioanalytical assay methods that regulatory authorities would consider clinically meaningful.

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● the FDA or comparable foreign regulatory authorities may require us to conduct additional preclinical studies or impose additional requirements before permitting us to initiate a clinical trial;

● the FDA or comparable foreign regulatory authorities, Institutional Review Boards (“IRBs”) or ethics committees may disagree with our study design, may require that we modify or amend our clinical trial protocols, or may not authorize us or our investigators to commence or conduct a clinical trial at a prospective trial site;

● the FDA or comparable foreign regulatory authorities, IRBs or ethics committees may disagree with our study design, may require that we modify or amend our clinical trial protocols, or may not authorize us or our investigators to commence or conduct a clinical trial at a prospective trial site;

● we may experience delays in reaching, or fail to reach, agreement on acceptable terms with trial sites and CROs, the terms of which can be subject to extensive negotiation and may vary significantly;

● clinical investigators or clinical trial sites may deviate from trial protocols or Good Clinical Practice requirements (“GCPs”) or drop out of a trial, and we may need to add new investigators or sites;

● clinical investigators or clinical trial sites may deviate from trial protocols or GCPs or drop out of a trial, and we may need to add new investigators or sites;

● our CROs may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, if at all;

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● we may observe unexpectedly high placebo response rates;

● the cost of clinical trials and preclinical studies may be greater than we anticipate, or we may have insufficient funds to conduct such trial or study or to pay the substantial user fees required by the FDA upon the submission of a BLA;

● the supply or quality of our product candidates or other materials necessary to conduct our clinical trials or preclinical studies may be insufficient or inadequate to initiate or complete a given clinical trial;

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Participant enrollment, a significant factor in the timing of clinical trials, is affected by many factors, including the size and nature of the patient population, the number and location of clinical sites, the proximity of participants to clinical sites, the eligibility and exclusion criteria for the trial, the design of the clinical trial, challenges in obtaining and maintaining participant consents, enrolled participants dropping out, competing clinical trials and clinicians’ and patients’ perceptions as to the potential advantages of the product candidate being studied in relation to other available therapies, including any new drugs or biologics that may be approved for the indications being investigated by us.

Rare or orphan diseases like IgG4-RD pose additional risk due to the difficulty identifying study subjects and ensuring each participant’s disease state meets the study parameters.

Rare or orphan diseases pose additional risk due to the difficulty identifying study subjects and ensuring each participant’s disease state meets the study parameters.

Further, because screening for many of these diseases is not widely adopted, and because it can be difficult to diagnose these diseases in the absence of screening, it can be difficult to find patients who are eligible to participate in our studies or trials.

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Unacceptable, undesirable or clinically unmanageable side effects, caused by any of our product candidates could cause us or regulatory authorities to interrupt, delay or halt our clinical trials and could result in a more restrictive label or the delay or denial of marketing approval by the FDA or comparable foreign regulatory authorities.

We have observed certain adverse events (“AEs”) and SAEs in our clinical trials of obexelimab administered through IV infusion.

We have observed certain adverse events (“AEs”) and S AEs in our clinical trials of obexelimab administered through IV infusion.

Our clinical trials of obexelimab are administered through SC injection.

In the Phase 1 pharmacokinetic (“PK”) and relative bioavailability study of obexelimab administered either intravenously or subcutaneously, the most common related treatment emergent adverse events (“TEAEs”) across all SC dose regimens were headache and injection site reactions.

In the Phase 1 PK and relative bioavailability study of obexelimab administered either intravenously or subcutaneously, the most common related treatment emergent adverse events across all SC dose regimens were headache and injection site reactions.

GI-related events seen with IV infusions were not observed in subjects who received SC formulation, but future studies may reveal similar issues.

While we believe that obexelimab has the potential to offer benefits, including in regard to its side-effect profile, over B cell depleting agents, if obexelimab is shown to have adverse events, side effects or other safety or tolerability concerns, then our opportunity to disrupt the current standard of care will be limited.

The known potential risks of orelabrutinib, as observed in clinical trials in patients with B-cell malignancies and autoimmune disease, include those associated with BTK inhibitor treatment such as hepatotoxicity, hemorrhage, cytopenia, infection, malignancy, hypertension, and arrhythmia.

In previous trials, two cases of elevated liver enzymes and bilirubin met Hy’s Law criteria.

Both affected patients were asymptomatic and their liver markers normalized after treatment was discontinued.

The FDA issued a partial clinical hold for the conduct of the ongoing RMS trial.

Three other BTK inhibitors, including some those currently in development for progressive MS, were also placed on a partial clinical hold while under development in the U.S.

No development restrictions were placed by the EMA.

AEs, SAEs or other side effects in clinical trials often make it difficult to recruit participants to clinical trials and results in participants dropping out of trials.

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If such effects are more severe, less reversible than we expect or not reversible at all, we may decide, or be required, to perform additional studies or to halt or delay further clinical development of our product candidates.

AEs and SAEs may be deemed to be related to our product candidates.

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We, the FDA or other applicable regulatory authorities, or an IRB, may suspend clinical trials of a product candidate at any time for various reasons, including a belief that participants in such trials are being exposed to unacceptable health risks or adverse side effects.

Many potential product candidates developed in the biotechnology industry that initially showed promise in early-stage trials have later been found to cause side effects that prevented their further development and

Even if side effects do not preclude the product candidate from obtaining or maintaining marketing approval, undesirable side effects may inhibit market acceptance.

Even if we successfully develop a product candidate and it receives marketing approval, the FDA could require us to adopt a Risk Evaluation and Mitigation Strategy (“REMS”) to ensure that the benefits of treatment outweigh the risks for each potential patient, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to healthcare practitioners, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive, and more costly than what is typical for the industry.

Even if we successfully develop a product candidate and it receives marketing approval, the FDA could require us to adopt a REMS to ensure that the benefits of treatment outweigh the risks for each potential patient, which may include, among other things, a medication guide outlining the risks of the product for distribution to patients, a communication plan to healthcare practitioners, extensive patient monitoring or distribution systems and processes that are highly controlled, restrictive, and more costly than what is typical for the industry.

Furthermore, if we or others later identify undesirable side effects caused by any product candidate that we obtain marketing approval for, several potentially significant negative consequences could result, including:

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Risks associated with the in-licensing or acquisition of product candidates could cause substantial delays in the preclinical and clinical development of our product candidates.

We have relied on, and continue to rely on, our licensing partners, such as Xencor, to have (i) conducted research and development in accordance with the applicable protocol, legal, regulatory and scientific standards, (ii) accurately reported the results of all clinical trials conducted prior to our acquisition of the relevant product candidates and (iii) correctly collected and interpreted the data from these trials.

We have relied on, and continue to rely on, our licensing partners, such as Xencor and InnoCare, to have (i) conducted research and development in accordance with the applicable protocol, legal, regulatory and scientific standards, (ii) accurately reported the results of all clinical trials conducted prior to our acquisition of the relevant product candidates and (iii) correctly collected and interpreted the data from these trials.

If the research and development processes or the results of the development programs prior to our acquisition of our product candidates prove to be unreliable, this could result in increased costs and delays in the development of our product candidates, which could adversely affect any future revenue from such product candidates, if approved.

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Please see “—Risks Related to Our Intellectual Property—We may not obtain or maintain necessary rights to our product candidates through acquisitions and in-licenses” for additional information regarding such risks.

We face potential competition from different sources that have made substantial investments into the rapid development of novel treatments for immunological indications, including large and specialty pharmaceutical and biotechnology companies, many of which already have approved therapies in our current indications.

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary drugs.

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Our current product candidates, initially under development for treatment of various I&I indications would, if approved, face competition from existing approved immunological treatments, many of which have achieved commercial success.

For example, we are currently developing obexelimab for the treatment of IgG4-RD, MS, and SLE.

There are currently no approved therapies for IgG4-RD, but there are two products approved for SLE, and a number of products approved for MS.

Moreover, there are a number of product candidates in clinical development by other companies for IgG4-RD, MS, and SLE that may become available in the future, including UPLIZNA (inebilizumab-cdon), an anti-CD19 antibody being developed by Amgen Inc., for which Amgen filed a BLA based on the results of its Phase 3 trial in patients with IgG4-RD.

We may also not be successful in generating clinical data sufficient to differentiate our product candidates from other products in the same therapeutic area.

If our competitors’ products are, or are perceived to be, more effective, more convenient, less costly or safer than our products, or we are unable to demonstrate differentiation in any of those factors, we may not be able to achieve a competitive position in the market.

We are currently developing obexelimab for the treatment of IgG4-RD, MS, and SLE.

In April 2025, FDA approved UPLIZNA (inebilizumab-cdon) an anti-CD19 antibody, which is the first and only FDA-approved therapy for the treatment of IgG4-RD in adult patients.

There are also two products approved for SLE, and a number of products approved for MS.

Moreover, there are a number of product candidates in clinical development by other companies for IgG4-RD, MS, and SLE that may become available in the future.

We are also currently developing orelabrutinib for PPMS and non-active SPMS.

For PPMS, there is currently one FDA-approved therapy, OCREVUS (ocrelizumab), a humanized anti-CD20 monoclonal antibody marketed by F.

Hoffmann-La Roche Ltd.

For non-active SPMS, there are currently no FDA-approved therapies.

Additional product candidates in clinical development by other companies may become available for PPMS and non-active SPMS in the future.

To compete successfully, we need to disrupt currently marketed drugs, meaning we must demonstrate that the relative cost, method of administration, safety, tolerability and efficacy of our product candidates provides a better alternative to existing and new therapies.

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We also make assumptions, estimations, calculations and conclusions as part of our analyses of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.

As a result, the top-line or preliminary results may differ from

future results of the same studies or trials, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated.

As a result, the top-line or preliminary results may differ from future results of the same studies or trials, or different conclusions or considerations may qualify such results once additional data have been received and fully evaluated.

Top-line data also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data.

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Further, disclosure of interim, top-line or preliminary data by us or by our competitors could result in volatility in the price of our common stock .

Our ongoing Phase 3 trial of obexelimab for IgG4-RD and other clinical trials of obexelimab, even if successfully completed, may not be sufficient for approval of obexelimab for the applicable indication.

Our clinical trials of our product candidates, even if successfully completed, may not be sufficient for marketing approval for the applicable indication.

FDA approval of a new biologic generally requires data from two well-controlled Phase 3 trials of the relevant biologic in the relevant patient population;

however, in some cases the FDA may accept data from a single Phase 3 trial to support marketing approval.

We are conducting a Phase 3 trial of obexelimab for IgG4-RD, and we believe the results of this trial may be sufficient to support submission of a BLA for this indication.

We recently announced topline data from our Phase 3 trial of obexelimab in patients with IgG4-RD, and we believe the results of this trial may be sufficient to support submission of a BLA for this indication.

Although we have discussed our plans with the FDA, we do not have any agreement from the FDA that our regulatory development plans will provide adequate safety and efficacy data for the proposed dosing regimen or otherwise be sufficient for submission of a BLA.

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Although obexelimab has been granted orphan drug designation by the FDA for IgG4-RD, such designation does not guarantee that any regulatory authority will accept fewer trials, accelerate regulatory review of, or ultimately approve obexelimab for IgG4-RD.

If the FDA does not agree with our planned strategy, the FDA may ultimately require us to conduct additional Phase 3 clinical trials prior to approval of an indication.

If the FDA does not agree with our planned development strategies for any of our product candidates, the FDA may ultimately require us to conduct additional Phase 3 clinical trials prior to approval of that product candidate for a particular indication.

In addition, the standard of care may change with the approval of new products in the same indications that we are studying.

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● a collaborator with marketing, manufacturing and distribution rights to one or more products may not commit sufficient resources to or otherwise not perform satisfactorily in carrying out these activities;

● the integration of any business or assets, including the InnoCare programs, may be disruptive, complex, risky and costly;

● the grant of exclusive rights to our collaborators would prevent us from collaborating with others;

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We cannot commercialize a product candidate unless and until the appropriate regulatory authorities have reviewed and approved the product candidate.

Even if our product candidates meet their safety and efficacy endpoints in clinical trials, the regulatory authorities may not complete their review processes in a timely manner, or we may not be able to obtain

regulatory approval.

Additional delays may result if an FDA Advisory Committee or other regulatory authority recommends non-approval or restrictions on approval.

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● the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials;

● the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a BLA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the U.S.

● the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a BLA or NDA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the U.S.

or elsewhere;

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Because we have limited financial and managerial resources, we focus our development efforts on certain selected product candidates in certain selected indications.

For example, we are initially focused on our lead product candidate, obexelimab,

for the treatment of IgG4-RD, MS, and SLE.

For example, we are initially focused on our lead product candidates, obexelimab, for the treatment of IgG4-RD, MS and SLE and orelabrutinib, for the treatment of PPMS and non-active SPMS.

As a result, we may forgo or delay pursuit of opportunities with other product candidates or other indications for our existing product candidates that later prove to have greater commercial potential.

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Coverage and reimbursement for products can therefore differ significantly from payor to payor.

if we obtain coverage for a given product by a third-party payor, the reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.

Even if we obtain coverage for a given product by a third-party payor, the reimbursement payment rates may not be adequate or may require co-payments that patients find unacceptably high.

Coverage and adequate reimbursement in the U.S.

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Third-party payors may deny or revoke the reimbursement status of a product or establish payment for new or existing marketed products at levels that are too low to enable us to realize an appropriate return on our investment in our product candidates.

When new competitor generic and biosimilar products enter the market, pricing or reimbursement for the innovator compound may be reduced.

Regulatory authorities in some jurisdictions, including the U.S.

and Europe, allow for abbreviated approval processes for generic and/or biosimilar products.

Should biosimilars or generics reference our product candidates, our product candidates may become subject to competition from such biosimilars or generics, with the attendant competitive pressure and consequences.

Generic and biosimilar manufacturers generally sell their competing versions of the drug at much lower prices.

As such, the introduction of a generic drug or biosimilar may significantly reduce the share of the market of our product candidates.

Increased competition may also reduce the price we are able to charge for our product candidates, and impact future revenue and/or profitability.

In addition to the risk posed by generics or biosimilars of our own product candidates, the entry of a generic or biosimilar of a brand name competitor may similarly create competitive pressure on our share of the market or the price we are able to charge.

More generally, the existence of generic and biosimilar products or other therapeutic alternatives within a “therapeutic category” may result in reduced reimbursement from payors.

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that may be relevant in pricing and reimbursement determinations by health authorities, including in European countries, may include, without limitation, perceived cost-effectiveness perceived benefit to patient quality of life, and designation as an orphan drug indication, among others.

Moreover, increasing efforts by governmental and third-party payors in the U.S.

and abroad to cap or reduce healthcare costs may cause such organizations to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products, if approved.

Moreover, increasing efforts by governmental and private third-party payors in the U.S.

and abroad to cap or reduce healthcare costs may cause such payors to limit both coverage and the level of reimbursement for newly approved products and, as a result, they may not cover or provide adequate payment for our products, if approved.

We expect to experience pricing pressures for any of our product candidates that may be approved due to the continuing trend toward managed healthcare and additional legislative changes.

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or elsewhere in the foreseeable future, or at all.

We have never submitted a BLA for our product candidates to the FDA, or a similar marketing application to a comparable foreign regulatory authority, and our current or any future product candidates may not be successful in clinical trials or receive regulatory approval.

We have never submitted a BLA or NDA for our product candidates to the FDA, or a similar marketing application to a comparable foreign regulatory authority, and our current or any future product candidates may not be successful in clinical trials or receive regulatory approval.

If approved for marketing by applicable regulatory authorities, our ability to generate revenue from our product candidates will depend on our ability to:

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We are highly dependent upon our Founder and Chief Executive Officer, Leon O.

We are also dependent on our President and Chief Operating Officer, Joseph Farmer, Chief Business Officer and Chief Financial Officer, Jennifer Fox, and Chief Commercial Officer, Orlando Oliveira and other members of our senior management and clinical development teams.

We are also dependent on our President and Chief Operating Officer, Joseph Farmer, Chief Business Officer and Chief Financial Officer, Jennifer Fox, and Head of Research and Development and Chief Medical Officer Lisa von Moltke and other members of our senior management and clinical development teams.

The loss of services of any of these individuals could delay or prevent the successful development of our product pipeline, initiation or completion of our preclinical studies and clinical trials or the commercialization of our product candidates, if approved.

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We may not be successful in maintaining our unique company culture and continuing to attract or retain qualified management and scientific and clinical personnel in the future due to the intense competition for qualified personnel among biopharmaceutical, biotechnology and other businesses, particularly in the greater Boston area.

If we are not able to attract, integrate, retain and motivate personnel

necessary to accomplish our business objectives, we may experience constraints that significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.

If we are not able to attract, integrate, retain and motivate personnel necessary to accomplish our business objectives, we may experience constraints that significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.

We will need to grow our organization, and we may experience difficulties in managing our growth and expanding our operations, which could adversely affect our business.

As our development and commercialization plans and strategies develop, and as we transition into operating as a public company, we expect to expand our employee base for managerial, operational, financial and other resources.

As our development and commercialization plans and strategies develop, and as we continue operating as a public company, we expect to expand our employee base for managerial, operational, financial, commercial and other resources.

As our product candidates enter and advance through preclinical studies and clinical trials, we will need to expand our development and regulatory capabilities and contract with third parties to provide manufacturing and other capabilities for us.

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The manufacturing of our product candidates is complex, and our third-party manufacturers may encounter difficulties in production.

If our third-party manufacturers encounter such difficulties, our ability to provide supply of our product candidates for clinical trials, our ability to obtain marketing approval, or provide commercial supply of our products, if approved, could be delayed or halted.

Our product candidates are biopharmaceuticals and the process of manufacturing biopharmaceuticals is complex, time consuming, highly regulated and subject to multiple risks.

Our CMOs must comply with legal requirements, current Good Manufacturing Practices requirements (“cGMPs”) and guidelines for the manufacturing of biopharmaceuticals used in clinical trials and, if approved, marketed products.

If our third-party manufacturers encounter such difficulties, our ability to provide supply of our product candidates for clinical trials, to obtain marketing approval, or to provide commercial supply of our products, if approved, could be delayed or halted.

Our product candidates include biopharmaceuticals and the process of manufacturing biopharmaceuticals is complex, time consuming, highly regulated and subject to multiple risks.

Our CMOs must comply with legal requirements, cGMPs and guidelines for the manufacturing of biopharmaceuticals used in clinical trials and, if approved, marketed products.

Our CMOs may have limited experience in the manufacturing of cGMP batches of our products.

Manufacturing biopharmaceuticals is highly susceptible to drug product loss due to contamination, equipment failure, improper installation or operation of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics and difficulties in scaling the production process.

Manufacturing biopharmaceuticals is highly susceptible to drug product loss due to contamination, equipment failure, improper installation or operations of equipment, vendor or operator error, inconsistency in yields, variability in product characteristics and difficulties in scaling the production process.

The impact of drug product loss is compounded by the long lead times needed to procure additional drug product due to plant capacity limitations or other restrictions at our CMOs.

Even minor deviations from normal manufacturing processes could result in reduced production yields, lot failures, product defects, product liability claims, or other supply disruptions.

If microbial, viral or other contaminations are discovered at our third-party manufacturers’ facilities, such facilities may need to be closed for an extended period of time to investigate and remedy the contamination, which could delay clinical trials and adversely affect our business.

Problems in third-party manufacturing process or facilities could restrict our ability to ensure sufficient clinical material for our clinical trials or delay or prevent us from obtaining marketing approval.

Scaling up a biopharmaceutical manufacturing process is a difficult and uncertain task and involves additional risks, including cost overruns, process scale-up, process reproducibility, stability issues, compliance with cGMPs, lot consistency and timely availability of sufficient quantity of raw materials.

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If our manufacturers are unable to produce sufficient quantities of drug substance and/or drug product for clinical trials or for commercialization we will need to identify and negotiate with other CMOs an agreement for clinical and/or commercial supply and it is not certain we will be able to come to agreement timely or on terms acceptable to us, which would likely jeopardize our ability to provide any product candidates to study subjects in clinical trials and products to patients, if approved.

Any delay or interruption in clinical trial supplies will likely delay the completion of planned clinical trials, increases the costs associated with maintaining clinical trial programs and, depending upon the period of delay, could require new

clinical trials at additional expense or terminate clinical trials completely.

Any delay or interruption in clinical trial supplies will likely delay the completion of planned clinical trials, increasing the costs associated with maintaining clinical trial programs and, depending upon the period of delay, could require new clinical trials at additional expense or terminate clinical trials completely.

Any adverse developments affecting clinical or commercial manufacturing of our product candidates or products may result in shipment delays, inventory shortages, lot failures, product withdrawals or recalls, or other interruptions in the supply of our product candidates or products.

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Any such actions instituted against us could have a material and adverse effect on our business, financial condition, results of operations and prospects, including the imposition of significant civil, criminal or administrative penalties, damages, fines, disgorgement, imprisonment, the curtailment or restructuring of our operations, loss of eligibility to obtain approvals from the FDA, exclusion from participation in government contracting, healthcare reimbursement or other government programs, including Medicare and Medicaid, integrity oversight and reporting obligations, or reputational harm.

Our estimates of commercial opportunities for product candidates and forecasts of market growth may prove to be smaller than we believe, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, or at all.

Commercial opportunities for product candidates and forecasts of market growth may prove to be smaller than we believe, and even if the markets in which we compete achieve the forecasted growth, our business may not grow at similar rates, or at all.

We intend to initially focus our product candidate development on treatments for various I&I indications.

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Our future growth may depend, in part, on our ability to operate in foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.

Our future growth may depend, in part, on our ability to develop and commercialize our product candidates in foreign markets, including in the European Union (“EU”), United Kingdom (“UK”), Japan and China for which we may rely on collaboration with third parties.

We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the applicable regulatory authority in that foreign market, and we may not obtain foreign regulatory approvals on a timely basis, if at all.

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Failure to obtain approval of any of our product candidates by regulatory authorities in another country may significantly diminish the commercial prospects of that product candidate and our business, financial condition, results of operations and prospects could be adversely affected.

Moreover, even if we obtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to the risks and uncertainties, including the burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements and reduced protection of intellectual property rights in some foreign countries.

Moreover, even if we obtain approval of our product candidates and ultimately commercialize our product candidates in foreign markets, we would be subject to risks and uncertainties, including the changing trade policies and tariffs, burden of complying with complex and changing foreign regulatory, tax, accounting and legal requirements and reduced protection of intellectual property rights in some foreign countries.

We may rely on collaborations with third parties to develop and commercialize our product candidates in certain foreign markets.

Strategic transactions could impact our liquidity, increase our expenses and present significant distractions to our management.

As a core part of our strategy, we intend to enter into strategic transactions, which could include acquisitions of companies, asset purchases and in-licensing and out-licensing of intellectual property.

For example, we in-licensed the exclusive global rights to develop and commercialize obexelimab, ZB002 and ZB004 from Xencor, and, in August 2023, we entered into a strategic license and collaboration with BMS, pursuant to which we granted the exclusive rights to develop and, if approved, commercialize obexelimab in Japan, South Korea, Taiwan, Hong Kong, Singapore and Australia.

The expected synergies in development programs, pipelines and other areas of focus between Zenas, Xencor and BMS may not be realized on a timely basis or at all, and there may be risks associated with the acquisition that we did not previously anticipate, such as unanticipated liabilities.

For example, we in-licensed the exclusive rights to develop and commercialize orelabrutinib in the field of MS globally, and non-oncology fields in all territories outside greater China and Southeast Asia, and ZB021 and ZB022 from InnoCare in October 2025, Additionally, we in-licensed the exclusive rights to develop and commercialize obexelimab, ZB002 and ZB004 from Xencor, and, in August 2023, we entered into a strategic license and collaboration with BMS, pursuant to which we granted the exclusive rights to develop and, if approved, commercialize obexelimab in Japan, South Korea, Taiwan, Hong Kong, Singapore and Australia.

The expected synergies in development programs, pipelines and other areas of focus between Zenas, InnoCare, Xencor and BMS may not be realized on a timely basis or at all, and there may be risks associated with the acquisition that we did not previously anticipate, such as unanticipated liabilities.

We also may enter into a variety of other business arrangements, including strategic collaborations, joint ventures, restructurings, divestitures, business combinations and investments.

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In addition, the integration of any business or assets may be disruptive, complex, risky and costly and we may never realize the full benefits of the acquisition.

Recent and future changes to tax laws could adversely affect our company.

The tax regimes we are subject to or operate under, including with respect to income and non-income taxes, are unsettled and may be subject to significant change.

Changes in tax laws, regulations, or rulings, or changes in interpretations of existing laws and regulations, could adversely affect our company.

For example, the Tax Cuts and Jobs Act, the Coronavirus Aid, Relief, and Economic Security Act, and the Inflation Reduction Act of 2022 (the “IRA”) enacted many significant changes to the U.S.

Future guidance from the Internal Revenue Service and other tax authorities with respect to such legislation may affect us, and certain aspects thereof could be repealed or modified in future legislation.

For example, the IRA includes provisions that will impact the U.S.

federal income taxation of certain corporations, including imposing a 15% minimum tax on the book income of certain large corporations and a 1% excise tax on certain corporate stock repurchases that would be imposed on the corporation repurchasing such stock.

If our internal information technology systems, or those used by our CROs, CMOs, clinical sites or other contractors or consultants, are or were compromised, become unavailable or suffer security incidents, loss or leakage of data or other disruptions, we could suffer material adverse consequences, including operational or service interruption, harm to our reputation, litigation, fines, penalties, compromise of sensitive information related our business and other adverse consequences.

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During times of war and other major conflicts, we and the third parties upon which we rely are vulnerable to a heightened risk of these attacks, including retaliatory cyber-attacks, that could materially disrupt our systems and operations, supply chain and ability to conduct our development activities, including clinical trials.

In addition to experiencing a security incident, third parties may gather, collect or infer sensitive information

about us from public sources, data brokers or other means that reveals competitively sensitive details about our organization and could be used against us.

In addition to experiencing a security incident, third parties may gather, collect or infer sensitive information about us from public sources, data brokers or other means that reveals competitively sensitive details about our organization and could be used against us.

Additionally, remote work increases risks to our information technology systems and data, as more of our employees utilize network connections, computers and devices outside our premises or network, including working at home, while in transit and in public locations.

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If we succeed in obtaining approval to market any product candidate, product liability claims could result in FDA or other investigation of the safety and effectiveness of our future product candidates, our manufacturing processes and facilities or our marketing programs and potentially a recall of our products or more serious enforcement action, limitations on the approved indications for which they may be used or suspension or withdrawal of approvals.

Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our product candidates, termination of clinical trial sites or entire trial programs, withdrawal of clinical trial participants or inability to enroll participants, injury to our reputation and significant negative media attention, significant costs to defend the related litigation, a diversion of management’s time and our resources from our business operations, substantial monetary awards to trial participants or patients, loss of revenue, the inability to commercialize and products that we may develop, and a decline in our stock price.

Regardless of the merits or eventual outcome, liability claims may also result in decreased demand for our product candidates, termination of clinical trial sites or entire trial programs, withdrawal of clinical trial participants or inability to enroll participants, injury to our reputation and significant negative media attention, significant costs to defend the related litigation, a diversion of management’s time and our resources from our business operations, substantial monetary awards to trial participants or patients, loss of revenue, the inability to commercialize any products that we may develop, and a decline in our stock price.

We may require higher levels of product liability insurance for later stages of clinical development or marketing any of our product candidates, and our insurance may not provide sufficient coverage against potential liabilities.

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We have in-licensed patent portfolios, but have no solely owned issued patents relating to our product candidates.

Although we exclusively in-license patent portfolios from Xencor related to obexelimab, ZB002 and ZB004, we have no solely owned issued patents.

Although we exclusively in-license patent portfolios from Xencor related to obexelimab, ZB002 and ZB004 and from InnoCare related to orelabrutinib, ZB021 and ZB022, we have no solely owned issued patents.

Although the exclusively in-licensed patent portfolios contain pending patent applications, we may not obtain any issued patents from the pending applications directed to our product candidates.

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We also may be unable to license or acquire third-party intellectual property rights on terms that would allow us to make an appropriate return on our investment or at all.

If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have obtained, we may have to abandon

development of the relevant program or product candidate, which could adversely affect our business, financial condition, results of operations, and prospects.

If we are unable to successfully obtain rights to required third-party intellectual property rights or maintain the existing intellectual property rights we have obtained, we may have to abandon development of the relevant program or product candidate, which could adversely affect our business, financial condition, results of operations, and prospects.

While we normally seek to obtain the right to control prosecution, maintenance and enforcement of the patents relating to our product candidates, there may be times when the filing and prosecution activities for patents and patent applications relating to our product candidates are controlled by our licensors or collaboration partners.

For example, under our license and collaboration agreements with Xencor, Xencor is responsible for patent prosecution of certain licensed intellectual property.

In addition, under our license agreement with InnoCare, InnoCare is responsible for patent prosecution of certain licensed intellectual property in greater China and Southeast Asia.

If any of our current or future licensors or collaboration partners fails to prosecute, maintain and enforce such patents and patent applications in a manner consistent with the best interests of our business, including by payment of all applicable fees for patents covering our product candidates, we could lose our rights to the intellectual property or our exclusivity with respect to those rights, our ability to develop and commercialize those product candidates may be adversely affected and we may not be able to prevent competitors from making, using and selling competing products.

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Even if the patents do issue based on our or our licensors’ patent applications, third parties may challenge the validity, enforceability or scope thereof, which may result in such patents being narrowed, invalidated or held unenforceable.

For example, there may be prior art not considered by the patent office that is raised by a third party to challenge the validity of any patents that issue

from our or our licensors' patent applications.

For example, there may be prior art not considered by the patent office that is raised by a third party to challenge the validity of any patents that issue from our or our licensors' patent applications.

Furthermore, even if they are unchallenged, patents in our and our licensors’ portfolio may not adequately exclude third parties from practicing relevant technology or prevent others from designing around our claims.

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Even if we ultimately prevail in such claims, the monetary cost of such litigation and the diversion of the attention of our management and scientific personnel could outweigh any benefit we receive as a result of the proceedings.

Intellectual property rights of third parties could adversely affect our ability to commercialize obexelimab, or future product candidates, and we, our licensors or collaborators, or any future strategic partners may become subject to third party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights.

We might be required to litigate or obtain licenses from third parties in order to develop or market obexelimab or future product candidates.

Intellectual property rights of third parties could adversely affect our ability to commercialize our current or future product candidates, and we, our licensors or collaborators, or any future strategic partners may become subject to third party claims or litigation alleging infringement of patents or other proprietary rights or seeking to invalidate patents or other proprietary rights.

We might be required to litigate or obtain licenses from third parties in order to develop or market our current or future product candidates.

Such litigation or licenses could be costly or not available on commercially reasonable terms.

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Litigation or other legal proceedings relating to intellectual property claims, with or without merit, is unpredictable and generally expensive and time consuming and, even if resolved in our favor, is likely to divert significant resources from our core business, including distracting our technical and management personnel from their normal responsibilities.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments which could adversely effect the market price of our common stock and harm our reputation.

In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments which could adversely affect the market price of our common stock and harm our reputation.

Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities.

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We cannot be certain that our product candidates will not infringe existing or future valid patents owned by third parties.

If we are required to defend ourselves against claims or to protect our own proprietary rights against others, it could result in substantial costs to us and the distraction of our management.

An adverse ruling in any litigation or administrative proceeding could prevent us or our partners from marketing and selling any one of our future products, increase the risk that a generic or other similar version of future products could enter the market to compete with our products, limit our or our partners' development and commercialization of our products, or otherwise harm our competitive position and result in additional significant costs.

Third parties may assert infringement claims against us based on existing or future intellectual property rights, regardless of their merit.

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We may choose to challenge a third party’s patent in patent opposition proceedings in the European Patent Office (“EPO”), or other foreign patent office.

The costs of these

opposition proceedings could be substantial and may consume our time or other resources.

The costs of these opposition proceedings could be substantial and may consume our time or other resources.

If we fail to obtain a favorable result at the USPTO, EPO or other patent office then we may be exposed to litigation by a third party alleging that the patent may be infringed by our product candidates.

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Changes in either the patent laws or interpretation of the patent laws in the U.S.

jurisdictions could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.

or in other jurisdictions could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of issued patents.

In the U.S., numerous recent changes to the patent laws and proposed changes to the rules of the USPTO may have a significant impact on our ability to protect our technology, products and enforce our intellectual property rights.

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Kite , the Federal Circuit held broad antibody claims supported by few examples invalid for lack of written description.

Recently, the Federal Circuit issued precedential decisions in In re Cellect (No.

22-1293) and Allergan v.

MSN Laboratories (No.

24-1061) that could shorten or eliminate an extended patent term awarded under Patent Term Adjustment (“PTA”) in certain patent family members if challenged on the basis of Obvious-Type Double Patenting.

Recently, the Federal Circuit issued precedential decisions in In re Cellect and Allergan v.

MSN Laboratories that could shorten or eliminate an extended patent term awarded under Patent Term Adjustment (“PTA”) in certain patent family members if challenged on the basis of Obvious-Type Double Patenting.

Furthermore, the U.S.

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Alternatively, or additionally, we may enter into agreements to clarify the scope of our rights in such intellectual property.

we fail to defend any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property.

If we fail to defend any such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership of, or right to use, valuable intellectual property.

Such an outcome could adversely affect our business.

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For example, the patent covering obexelimab’s composition of matter expires in May 2028, excluding any extension of patent term that may be available.

In addition, the patent covering orelabrutinib’s composition of matter expires in September 2034, excluding any extensions of patent term that may be available.

Obtaining and maintaining patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by government patent agencies, and our patent protection could be reduced or eliminated as a result of noncompliance with these requirements.

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patents that we may own in the future may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Action of 1984 (the “Hatch-Waxman Amendments”).

The Hatch-Waxman Amendments permit a patent extension term (“PTE”) of up to five years as compensation for patent term lost during the FDA regulatory review process.

The Hatch-Waxman Amendments permit a PTE of up to five years as compensation for patent term lost during the FDA regulatory review process.

A patent term extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug, a method for using it or a method for manufacturing it may be extended.

Similar patent term restoration provisions to compensate for commercialization delay caused by regulatory review are also available in certain foreign jurisdictions, such as in Europe under Supplemental Protection Certificate (“SPC”).

Similar patent term restoration provisions to compensate for commercialization delay caused by regulatory review are also available in certain foreign jurisdictions, such as in Europe under the SPC.

However, we may not be granted any extensions for which we apply because of, for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable deadlines, failing to apply prior to expiration of relevant patents, or otherwise failing to satisfy applicable requirements.

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If we are unable to obtain patent term extension, or the term of any such extension is less than we request, our competitors may obtain approval of competing products following our patent expiration, and our business, financial condition, results of operations and prospects could be materially harmed.

If approved, our product candidates that are regulated as biological products (“biologics”), may face competition from biosimilars approved through an abbreviated regulatory pathway.

The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) was enacted as part of the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), to establish an abbreviated pathway for the approval of biosimilar and interchangeable with an FDA-licensed reference biologic product.

If approved, our product candidates may face competition from biosimilar or generic products approved through abbreviated regulatory pathways.

The BPCIA was enacted as part of the ACA, to establish an abbreviated pathway for the approval of biological products that are biosimilar to or interchangeable with an FDA-licensed reference biologic product.

The regulatory pathway establishes legal authority for the FDA to review and approve biosimilar biologics, including the possible designation of a biosimilar as “interchangeable” based on its similarity to an approved biologic.

Under the BPCIA, reference biological product is granted 12 years of non-patent data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product.

Under the BPCIA, a reference biological product is granted 12 years of non-patent data exclusivity from the time of first licensure of the product, and the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product.

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

During this 12-year period of exclusivity, another company may still develop and receive approval of a competing biologic, so long as their BLA does not rely on the reference product or sponsor’s data or submit the application as a biosimilar application.

The law is complex and is still being interpreted and implemented by the FDA.

As a result, its ultimate impact, implementation and meaning are subject to uncertainty, and any new policies or processes adopted by the FDA could have a material adverse effect on the future commercial prospects for our biological products.

We believe that any of the product candidates we develop that is approved in the U.S.

as a biological product under a BLA should qualify for the 12-year period of exclusivity.

However, there is a risk that this exclusivity could be shortened due to congressional action or otherwise, or that the FDA will not consider the subject product candidate to be a reference product for competing products, potentially creating the opportunity for biosimilar competition sooner than anticipated.

With respect to drugs, including small molecule products, the FDCA provides a five-year period of non-patent marketing exclusivity within the U.S.

to the first applicant to gain approval of an NDA for a new chemical entity (“NCE”), including small molecule products.

A drug is an NCE if the FDA has not previously approved an NDA for any other new drug containing the same active ingredient.

If an NDA is approved, the drug product becomes a “reference listed drug” and is included in the FDA publication “Approved Drug Products with therapeutic Equivalence Evaluations,” also known as the “Orange Book.” During the five-year exclusivity period, the FDA may not approve an ANDA or a 505(b)(2) NDA submitted by another company for another version of such drug where the applicant does not own or have a legal right to reference all the data required for approval.

However, an application may be submitted after four years if it contains a certification of patent invalidity or non-infringement.

The FDCA also provides three years of marketing exclusivity for an NDA, 505(b)(2) NDA or supplement to an existing NDA if new clinical investigations, other than bioavailability studies, that were conducted or sponsored by the applicant are deemed by the FDA to be essential to the approval of the application.

This three-year exclusivity covers only the conditions of use associated with the new clinical investigations and does not prohibit the FDA from approving ANDAs or 505(b)(2) NDAs for drugs containing the original active agent.

Typically, this three-year exclusivity period protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication.

An ANDA filing allows a generic manufacturer to rely on studies from the reference listed drug to support safety and efficacy rather than conducting their own clinical trials.

Generic drug manufacturers may seek approval of a generic product after the regulatory exclusivity period expires, even if we still possess patent protection for our approved product.

The five-year and three-year exclusivities will not delay the submission or approval of a full NDA.

However, an applicant submitting a full NDA would be required to conduct or obtain a right of reference to all of the preclinical studies and adequate and well-controlled clinical trials necessary to demonstrate safety and effectiveness.

Laws regarding exclusivity protections are complex and continue to be interpreted by the FDA.

Any new policies or processes adopted by the FDA could have a material adverse effect on the future commercial prospects for our product candidates.

We believe that any product candidates we develop that are approved in the U.S.

as a biological product under a BLA should qualify for the 12-year period of exclusivity and that any product candidate we develop that is approved as a NCE under an NDA should qualify for the 5-year period of exclusivity.

Moreover, the extent to which a biosimilar, once approved, will be substituted for any one of the reference products in a way that is similar to traditional generic substitution for non-biological products is not yet clear, and will depend on a number of marketplace and regulatory factors that are still developing.

The approval of a biosimilar of our product candidates could have a material adverse impact on our business due to increased competition and pricing pressure.

If competitors are able to obtain regulatory approval for biosimilars referencing our product candidates, our product candidates may become subject to competition from such biosimilars, with the attendant competitive pressure and consequences.

The approval of a biosimilar or a generic of our product candidates could have a material adverse impact on our business due to increased competition and pricing pressure.

If competitors are able to obtain regulatory approval for biosimilars or generics referencing our product candidates, our product candidates may become subject to competition from such biosimilars or generics, with the attendant competitive pressure and consequences.

Generic and biosimilar products may be significantly less costly to bring to market than the reference listed drug, and generic manufacturers generally sell their competing versions of the drug at much lower prices.

As such, the introduction of a generic drug or biosimilar may significantly reduce the share of the market of our product candidates.

Increased competition may also reduce the price we are able to charge for our product candidates, and impact future revenue and/or profitability.

Laws and regulations outside the U.S.

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In addition, other countries may have different standards in determining similarity to a reference product.

market entry of competing products to our product candidates in these other regions could adversely affect our business in those regions.

Any market entry of competing products to our product candidates in these other regions could adversely affect our business in those regions.

To the extent that we do not receive any anticipated periods of regulatory exclusivity for our product candidates it could adversely affect our business, financial condition, results of operations and prospects.

In China, the Fourth Amendments to the PRC Patent Law became effective on June 1, 2021, and for the first time, provides for PTE, PTA and a patent linkage system for eligible Chinese patents.

To date, no PTE or PTA has been granted for any Chinese patent, and the patent linkage system is still in its early stage.

In view of the potential changes and development in the implementation rules in PTE, PTA, patent linkage and data exclusivity in China, a lower-cost generic drug can emerge onto the market much more quickly, which would result in weaker protection for us against generic competition in China than could be available to us in the U.S., and would materially harm our business, financial condition, results of operations, and prospects.

However, the patent linkage system is still in its early stage and the impact remains uncertain.

In view of the potential changes and development in the implementation rules in PTE, PTA, patent linkage and data exclusivity in China, a lower-cost generic drug could emerge onto the market much more quickly, which would result in weaker protection for us against generic competition in China than could be available to us in the U.S., and would materially harm our business, financial condition, results of operations, and prospects.

If we are unable to protect the confidentiality of our trade secrets, our business and competitive position would be harmed.

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At times, competitors or other third parties may adopt trade names or trademarks similar to ours, thereby impeding our ability to build brand identity and possibly leading to market confusion.

In addition, there could be potential trade name or trademark infringement claims brought by owners of

other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names.

In addition, there could be potential trade name or trademark infringement claims brought by owners of other registered trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names.

Over the long term, if we are unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our business may be adversely affected.

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The time required to obtain FDA and other approvals is unpredictable but typically takes many years following the commencement of clinical trials, depending upon the type, complexity and novelty of the product candidate.

The standards that the FDA and comparable foreign regulatory authorities use when regulating us

require judgment and can change, which makes it difficult to predict with certainty their application.

The standards that the FDA and comparable foreign regulatory authorities use when regulating us require judgment and can change, which makes it difficult to predict with certainty their application.

Any analysis we perform of data from preclinical studies and clinical trials is subject to confirmation and interpretation by regulatory authorities, which could delay, limit or prevent regulatory approval.

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It is impossible to predict whether additional legislative changes will be enacted, or whether FDA or foreign regulations, guidance or interpretations will be changed, or the impact of such changes, if any.

Any elongation or de-prioritization of preclinical studies or clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of obexelimab or any of our other product candidates or any future product candidates.

Further, the FDA and its foreign counterparts may respond to any BLA that we may submit by requesting additional data or studies that we do not anticipate.

Any elongation or de-prioritization of preclinical studies or clinical trials or delay in regulatory review resulting from such disruptions could materially affect the development and study of obexelimab, orelabrutinib or any of our other product candidates or any future product candidates.

Further, the FDA and its foreign counterparts may respond to any BLA or NDA that we may submit by requesting additional data or studies that we do not anticipate.

Such responses could delay clinical development of our product candidates or any future product candidates.

The FDA also may consider its approvals of competing products, which may alter the treatment landscape, and which may lead to changes in the FDA’s review requirements that have been previously communicated to us and our interpretation thereof, including changes to requirements for clinical data or clinical trial design.

Such changes could delay approval or necessitate withdrawal of our BLA submissions.

Such changes could delay approval or necessitate withdrawal of our BLA or NDA submissions.

Any delay or failure in obtaining required approvals would adversely affect our ability to generate revenue from the particular product candidate for which we are seeking approval.

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Average review times at the FDA and other regulatory authorities have fluctuated in recent years.

In addition, government funding of other authorities and agencies that fund research and development activities is subject to the political process, which is inherently fluid and unpredictable.

In addition, government funding of other authorities and agencies that fund research and development activities is subject to the political process, including government shutdowns, which is inherently fluid and unpredictable.

We face uncertainty regarding the potential for changes in the regulatory environment following the change in presidential administration in January 2025.

While many of the Trump administration’s proposed policies appear to be focused on deregulation, the new administration and federal government could adopt legislation, regulation, or policy that adversely affects our business or creates a more challenging and costly environment to pursue the development and commercialization of our product candidates.

For example, the federal government, including the FDA, may implement legislative, regulatory, or policy changes regarding the standards for approving biologic products that we may be unable to satisfy.

It is difficult to predict how executive actions that may be taken under the current Trump administration may affect the FDA’s ability to exercise its regulatory authority.

While many of the current presidential administration’s policies appear to be focused on deregulation, the administration and federal government could adopt legislation, regulation, or policy that adversely affects our business or creates a more challenging and costly environment to pursue the development and commercialization of our product candidates.

For example, the federal government, including the FDA, may implement legislative, regulatory, or policy changes regarding the standards for approving drug or biologic products that we may be unable to satisfy.

It is difficult to predict how future executive actions that may be taken under the current presidential administration may affect the FDA’s ability to exercise its regulatory authority.

If such executive actions impose constraints on the FDA’s ability to engage in routine oversight and product review activities in the normal course, our business may be negatively impacted.

Disruptions at the FDA and other regulatory authorities may also slow the time necessary for new biologics or modifications to approved or licensed biologics to be reviewed and/or approved, which would adversely affect our business.

For example, the current Trump administration appears to be focused on decreasing spending in the federal government, including through significant staff reductions.

Any significant staff reductions at FDA could impact the agency’s ability to engage in routine regulatory and oversight activities and result in delays or limitations on our ability to proceed with clinical development programs and obtain regulatory approvals.

Additionally, over the last several years, the U.S.

Disruptions at the FDA and other regulatory authorities may also slow the time necessary for new biologics or small molecules or modifications to approved or licensed biologics or small molecules to be reviewed and/or approved, which would adversely affect our business.

For example, the current presidential administration has undertaken substantial efforts to decrease spending in the federal government, including through significant staff reductions.

The current presidential administration has substantially reduced the FDA’s workforce and may make further reductions, which could impact the agency’s ability to engage in routine regulatory and oversight activities and result in delays or limitations on our ability to proceed with clinical development programs and obtain regulatory approvals.

Additionally, reductions in the workforce at the review or inspection divisions of the FDA, any such reductions could extend BLA and NDA review timelines, delay or prevent pre-approval inspections, and limit opportunities for FDA feedback on pending applications.

Further, o ver the last several years, the U.S.

government has shut down several times and certain regulatory authorities, such as the FDA, have had to furlough critical employees and stop critical activities.

Any of these actions may delay or limit our ability to obtain FDA approval and commercialize our product candidates.

Separately, in response to the COVID-19 pandemic, the FDA postponed most inspections of domestic and foreign manufacturing facilities at various points.

Even though the FDA has since resumed standard inspection operations of domestic facilities where feasible, future pandemics may lead to similar inspectional delays.

If any future prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting

their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Even though the FDA resumed standard inspection operations of domestic facilities where feasible, future pandemics may lead to similar inspectional delays.

If the current government shutdown continues or any future prolonged government shutdown occurs, or if global health concerns prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews, or other regulatory activities, it could significantly impact the ability of the FDA or other regulatory authorities to timely review and process our regulatory submissions, which could have a material adverse effect on our business.

Recently enacted legislation, future legislation and other healthcare reform measures may increase the difficulty and cost for us to obtain marketing approval for and commercialize our product candidates and may affect the prices we may set.

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See also “Business—Government Regulation-Healthcare Reform.”

For example, in March 2010, the ACA was enacted in the U.S., which substantially changed the way healthcare is financed by both governmental and private insurers in the U.S.

and significantly affected the pharmaceutical industry.

Since its enactment, there have been judicial, congressional, and executive branch challenges to the ACA.

For example, tax reform legislation was enacted that eliminated the tax penalty established by ACA for individuals who do not maintain mandated health insurance coverage beginning in 2019 and, in 2021, the U.S.

Supreme Court dismissed the latest judicial challenge to the ACA brought by several states without specifically ruling on the constitutionality of the ACA.

Beyond the ACA, there have been ongoing healthcare reform efforts, including under the Biden administration.

Notably, the IRA includes a number of healthcare reform provisions, which have varying implementation dates.

The IRA extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025;

lowers the beneficiary maximum out-of-pocket cost;

establishes a new manufacturer discount program;

imposes new Medicare Part B and Part D drug price inflation rebates, and implements a drug price negotiation program for certain high spend Medicare Part B and D drugs.

Such provisions have been and likely will continue to be subject to legal challenge.

Further, there has been heightened governmental scrutiny in the U.S.

of pharmaceutical pricing practices in light of the rising cost of prescription drugs.

Such scrutiny has resulted in several congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.

For example, in addition to the IRA drug pricing reforms, federal legislation enacted in 2021 eliminates the statutory cap on Medicaid drug rebate program rebates (currently set at 100% of a drug’s “average manufacturer price”), which became effective January 1, 2024.

At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, encourage importation from other countries and bulk purchasing.

For example, on January 5, 2024, the FDA approved Florida’s Section 804 Importation Program (SIP) proposal to import certain drugs from Canada for specific state healthcare programs.

For example, in 2010, the ACA was enacted, which among other things, subjected biologic products to potential competition by lower-cost biosimilars;

addressed 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;

increased the minimum Medicaid rebates owed by most manufacturers under the Medicaid Drug Rebate Program;

extended the Medicaid Drug Rebate program to utilization of prescriptions of individuals enrolled in Medicaid managed care organizations;

subjected manufacturers to new annual fees and taxes for certain branded prescription drugs;

created a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturer’s outpatient drugs to be covered under Medicare Part D.

Beyond the ACA, there have been ongoing healthcare reform efforts, including efforts focused on drug pricing and payment.

For example, the IRA includes a number of changes intended to address rising prescription drug prices in Medicare Part B and Part D.

These changes include caps on Medicare Part D out-of-pocket costs, Medicare Part B and Part D drug price inflation rebates, a new Medicare Part D manufacturer discount drug program (replacing the ACA Medicare Part D coverage gap discount program) and a drug price negotiation program for certain high spend Medicare Part B and D drugs (with negotiated prices for the first set of drugs taking effect in 2026).

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

Additionally, changes to Medicaid effective in 2024 eliminated the Medicaid rebate cap and changes to certain Medicare price reporting requirements for drugs beginning in 2026 will likely increase the administrative and compliance burden for manufacturers.

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

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

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

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

prevent foreign countries from disproportionately shifting the cost of global pharmaceutical research and development to the U.S., and facilitate direct-to-consumer purchasing programs for pharmaceutical manufacturers to sell their products to patients at the most-favored-nation price.

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

A website sponsored by the federal government offering pharmaceutical direct-to-consumer channels has also been launched.

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

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

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

For example, the Congressional Budget Office has estimated that Medicaid provisions in the 2025 budget reconciliation legislation, including restrictions in eligibility and funding for Medicaid, as well as changes to the healthcare marketplace such as the elimination of certain subsidies, will increase the number of uninsured.

There have also been efforts by federal and state government officials or legislators to implement measures to regulate prices or payment for pharmaceutical products, including legislation on drug importation.

For example, on January 5, 2024, the FDA approved Florida’s SIP proposal to import certain drugs from Canada for specific state healthcare programs.

It is unclear how this program will be implemented, including which drugs will be chosen, and whether it will be subject to legal challenges in the U.S.

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Any such approved importation plans, when implemented, may result in lower drug prices for products covered by those programs.

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

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

This could reduce the ultimate demand for our product candidates, if approved, or put pressure on our product pricing, which could negatively affect our business, financial condition, results of operations and prospects.

General legislative cost control measures may also affect reimbursement for our product candidates.

The Budget Control Act, as amended, resulted in the imposition of reductions in Medicare (but not Medicaid) payments to providers in 2013 that remain in effect through 2032 unless additional Congressional action is taken.

Any significant spending reductions

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

Recently, there has been considerable public and government scrutiny of pharmaceutical pricing and proposals to address the perceived high cost of pharmaceuticals.

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

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

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

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

Healthcare reform efforts have been and may continue to be subject to scrutiny, legal challenge and subsequent amendment, creating further uncertainty.

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

For example, the Trump Administration’s recently announced tariff on branded or patented drugs may increase the cost of drug products that are imported from abroad or manufactured using products or materials imported from abroad.

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

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

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

We expect that current and any future healthcare or budget reform measures may result in more rigorous coverage criteria, new payment methodologies and additional downward pressure on the payment that we receive or price that we may charge for any approved product.

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● federal false claims, false statements and civil monetary penalties laws which prohibit, among other activities, any person from knowingly presenting, or causing to be presented, a false claim for payment of government funds or knowingly making, or causing to be made, a false statement to get a false claim paid and may be implicated if claims are submitted that result from a violation of the federal anti- kickback statute;

● the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

● the federal Food, Drug, and Cosmetic Act (“FDCA”), which among other things, strictly regulates drug marketing, prohibits manufacturers from marketing such products for off-label use and regulates the distribution of samples;

● federal laws that require pharmaceutical manufacturers to report certain calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs;

● HIPAA, which, in addition to privacy protections applicable to healthcare providers and other entities, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

● the FDCA, which among other things, strictly regulates drug marketing, prohibits manufacturers from marketing such products for off-label use and regulates the distribution of samples;

● federal laws that require pharmaceutical manufacturers to calculate, certify and report certain complex calculated product prices to the government or provide certain discounts or rebates to government authorities or private entities, often as a condition of reimbursement under government healthcare programs;

● the so-called “federal sunshine” law, which requires pharmaceutical and medical device companies to monitor and report certain financial interactions with physicians, certain non-physician healthcare practitioners and teaching hospitals to the federal government, as well as certain ownership and investment interests held by these physicians and their immediate family members for re-disclosure to the public;

Foreign Corrupt Practices Act of 1977, as amended, which prohibits, among other things, U.S.

● the FCPA, as amended, which prohibits, among other things, U.S.

companies and their employees and agents from authorizing, promising, offering, or providing, directly or indirectly, corrupt or improper payments or anything else of value to foreign government officials, employees of public international organizations and foreign government owned or affiliated entities, candidates for foreign political office, and foreign political parties or officials thereof;

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Various federal, state, local and foreign legislative and regulatory bodies, or self-regulatory organizations, may expand current laws, rules or regulations, enact new laws, rules or regulations or issue revised rules or guidance regarding data privacy and security.

In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws,

including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).

For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), imposes specific requirements relating to the privacy, security, and transmission of individually identifiable health information.

Additionally, the California Consumer Privacy Act (“CCPA”) applies to personal information of consumers, business representatives, and employees, and among other things requires businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights, including the right to opt out of certain disclosures of their information.

In the U.S., federal, state, and local governments have enacted numerous data privacy and security laws, including data breach notification laws, personal data privacy laws, consumer protection laws (e.g., Section 5 of the Federal Trade Commission Act), and other similar laws (e.g., wiretapping laws).

For example, HIPAA, as amended by HITECH, imposes specific requirements relating to the privacy, security, and transmission of individually identifiable health information.

Additionally, the CCPA applies to personal information of consumers, business representatives, and employees, and among other things requires businesses to provide specific disclosures in privacy notices and honor requests of California residents to exercise certain privacy rights, including the right to opt out of certain disclosures of their information.

The CCPA provides for civil penalties of up to $7,500 per violation as well as a private right of action with statutory damages for certain data breaches, thereby potentially increasing risks associated with a data breach.

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Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.

In particular, the European Economic Area (“EEA”) and the UK have significantly restricted the transfer of personal data to countries whose privacy laws it believes are inadequate.

In particular, the EEA and the UK have significantly restricted the transfer of personal data to countries whose privacy laws it believes are inadequate.

Case law from the Court of Justice of the European Union (“CJEU”), however, states that reliance on the standard contractual clauses—a standard form of contract approved by the European Commission as an adequate personal information transfer mechanism—alone may not necessarily be sufficient in all circumstances and that transfers must be assessed on a case-by-case basis.

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in compliance with law, such as the EEA and UK’s standard contractual clauses and the recently approved DPF, these mechanisms are subject to legal challenges, and there is no assurance that we can satisfy or rely on these measures to lawfully transfer personal data to the U.S.

If there is no lawful manner for us to transfer personal data from the

EEA, the UK or other jurisdictions to the U.S., or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the U.S., or if the requirements for a legally-compliant transfer are too onerous, we could face significant adverse consequences, including the interruption or degradation of our operations, the need to relocate part of or all of our business or data processing activities to other jurisdictions at significant expense, increased exposure to regulatory actions, substantial fines and penalties, the inability to transfer data and work with partners, vendors and other third parties, and injunctions against our processing or transferring of personal data necessary to operate our business.

Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the U.S., are subject to increased scrutiny from regulators, individual litigants, and activist groups.

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Our CROs, CMOs or other third-party service providers with access to our or our suppliers’, manufacturers’, trial participants’ and employees’ sensitive information for which we are responsible may breach contractual obligations imposed by us, or they may experience data security incidents, which could have a corresponding effect on our business, including putting us in breach of our obligations under privacy laws and regulations and/or which could in turn adversely affect our business, financial condition, results of operations and prospects.

Our contractual measures and our own privacy and security-related safeguards may not protect us from the risks associated with the third-party processing

of such information.

Our contractual measures and our own privacy and security-related safeguards may not protect us from the risks associated with the third-party processing of such information.

Any of the foregoing could adversely affect our business, financial condition, results of operations and prospects.

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Customs regulations, various economic and trade sanctions regulations administered by the U.S.

Treasury Department’s Office of Foreign Assets Controls, the U.S.

Foreign Corrupt Practices Act of 1977, as amended (“FCPA”), the U.S.

Treasury Department’s Office of Foreign Assets Controls, the FCPA, the U.S.

domestic bribery statute contained in 18 U.S.C.

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For example, recent actions and statements by the governments of the U.S.

and China, including those relating to the imposition or threatened imposition of tariffs, or increases to tariffs, affecting certain products manufactured in China, have impacted, and may continue to impact, companies like us who rely on suppliers and other commercial partners with significant operations in China.

and China, including those relating to the imposition or threatened imposition of tariffs, or potential increases to tariffs, affecting certain products manufactured in China, have impacted, and may continue to impact, companies like us who rely on suppliers and other commercial partners with significant operations in China.

For example, while we have selected new CMOs in the U.S.

to establish additional sources of supply, currently we import from China certain drug substance, drug product and

other components, and such imports are subject to existing tariffs and may be impacted by additional tariffs.

Currently, many of our suppliers primarily operate outside of the U.S., including our current sole CMO, WuXi Biologics, which provides its services to us from facilities located in China, and increases in tariffs could result in increased costs.

to establish additional sources of supply for obexelimab, currently we import from China certain drug substance, drug product and other components, and such imports are subject to existing tariffs and may be impacted by additional tariffs.

Currently, many of our suppliers primarily operate outside of the U.S., including our current sole CMO for obexelimab, WuXi Biologics, and our collaboration partner InnoCare for supply of orelabrutinib, which provide services to us from facilities located in China, and increases in tariffs could result in increased costs.

As a result, we are subject to risks associated with political, trade, regulatory developments with respect to such countries, and between the U.S.

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Any unfavorable legislation, regulations, executive orders, government policies on cross-border relations and/or international trade, including increased scrutiny on certain of our suppliers with significant China-based operations, capital controls, or tariffs, may have an adverse effect on our business, financial condition, and results of operations.

For example, in March and April 2025, the U.S.

imposed tariffs on, or increased the tariff rates applicable to, imports from many foreign countries.

In response to these tariffs, a number of other countries have threatened or implemented retaliatory tariffs on U.S.

Political tensions resulting from trade policies could reduce trade volume, investment, technological exchange and other economic activities between major international economies, resulting in a material adverse effect on global economic conditions and the stability of global financial markets.

Further, supply chain disruptions and delays as a result of tariff policies or trade restrictions could also negatively impact our cost of materials and processes.

Such changes in political, trade, regulatory, and economic conditions, including U.S.

trade policies, could have a material adverse effect on our financial condition or results of operations.

Risks Related to Our Reliance on Third Parties

We currently rely on a single third-party manufacturer, WuXi Biologics, to supply our product candidates, including certain drug substances and drug products used in our product candidates.

We currently rely on single third-party manufacturers, WuXi Biologics, and our collaboration partner, InnoCare, to supply our product candidates, including certain drug substances and drug products used in our product candidates.

If we are unable to source these supplies on a timely basis, at sufficient quantities or at acceptable quality or prices, establish longer-term contracts with our CMOs, or our third-party manufacturers fail to comply with applicable regulatory requirements, we will not be able to complete our clinical trials on time and the development of our product candidates may be delayed.

We do not own or operate facilities for drug manufacturing, storage, distribution or quality testing.

We currently rely on a single third-party manufacturer, WuXi Biologics, located in China, to manufacture and supply the drug substances and drug products for our product candidates, and currently do not have any redundant supply outside of WuXi Biologics, for drug substance and drug product.

Reliance on a single third-party manufacturer exposes us to different risks than if we were to manufacture product candidates ourselves.

We currently rely on single third-party manufacturers, WuXi Biologics for supply of obexelimab, and our collaboration partner, InnoCare for supply of orelabrutinib, both of which are located in China, to manufacture and supply the drug substances and drug products for our product candidates, and we currently do not have any redundant supply outside of WuXi Biologics, and InnoCare, for drug substance and drug product.

Reliance on third-party manufacturers exposes us to different risks than if we were to manufacture product candidates ourselves.

While we believe our current inventory of drug substance and drug product will be sufficient to complete our ongoing trials of obexelimab, our preclinical and clinical development product supplies may be limited, interrupted, terminated or be of unsatisfactory quality or unavailable at acceptable prices.

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Any change in our relationship with our CMOs or changes to contractual terms of our agreements with them could adversely affect our business, financial condition, results of operations and prospects.

Additionally, legislation and regulations, such as the proposed BIOSECURE Act, a draft of which is in the legislative process in the U.S.

Congress, could restrict our ability to enter into new long-term commercial agreements with certain CMOs if the proposed legislation and regulations are enacted into law.

Please see “—Risks Related to Our Reliance on Third Parties—The operations of our suppliers, many of which are located outside of the U.S., including our current sole CMO for drug substance and drug product, WuXi Biologics, which is located in China, are subject to additional risks that are beyond our control and that could harm our business, financial condition, results of operations and prospects.”

Additionally, legislation and regulations, could restrict our ability or make it more costly to obtain needed supplies of products and materials from certain CMOs.

Please see “—Risks Related to Our Reliance on Third Parties—The operations of our suppliers, many of which are located outside of the U.S., including our current sole CMO for obexelimab drug substance and drug product, WuXi Biologics, and our collaboration partner, InnoCare, both of which are located in China, are subject to additional risks that are beyond our control and that could harm our business, financial condition, results of operations and prospects.”

Furthermore, any of the sole source and limited source suppliers upon whom we rely could stop producing our supplies, cease operations or be acquired by, or enter into exclusive arrangements with, our competitors.

Any interruption or delay in the supply of sole source or limited source components for our product candidates, including as a result of us needing to seek alternative sources, which may not be available at reasonable prices or at all, would adversely affect our ability to meet scheduled timelines and budget for the development and commercialization of our product candidates, could result in higher expenses and delayed revenue, if our product candidates are approved, and would harm our business.

Although we have not experienced any significant disruption as a result of our reliance on limited or sole source suppliers, we have a limited

operating history and we could experience disruptions in our supply chain in the future as a result of such reliance or otherwise.

Although we have not experienced any significant disruption as a result of our reliance on limited or sole source suppliers, we have a limited operating history and we could experience disruptions in our supply chain in the future as a result of such reliance or otherwise.

The manufacturing process for our product candidates is subject to the FDA and comparable foreign regulatory authority review.

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We rely and intend to continue to rely on third-party clinical investigators, CROs and clinical data management organizations to conduct, supervise and monitor preclinical studies and clinical trials of our current and future product candidates.

Because of this reliance, we have less control over the timing, quality and other aspects of preclinical studies

and clinical trials than if we conduct them ourselves.

Because of this reliance, we have less control over the timing, quality and other aspects of preclinical studies and clinical trials than if we conduct them ourselves.

Third parties are not our employees and we have limited control over the amount of time and resources that they dedicate to our programs.

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Nevertheless, we are responsible for ensuring that each of our clinical trials is conducted in accordance with the applicable trial protocol and legal, regulatory and scientific standards.

For example, we remain responsible for ensuring that each of our preclinical studies are conducted in accordance with good laboratory practices (“GLPs”) and clinical trials are conducted in accordance with GCPs.

For example, we remain responsible for ensuring that each of our preclinical studies are conducted in accordance with GLPs and clinical trials are conducted in accordance with GCPs.

Moreover, the FDA and comparable foreign regulatory authorities require us to comply with GCP for conducting, recording and reporting the results of clinical trials to assure that data and reported results are credible and accurate and that the rights, integrity and confidentiality of trial participants are protected.

Regulatory authorities enforce these requirements through periodic inspections (including pre-approval inspections once a BLA is submitted to the FDA) of trial sponsors, clinical investigators, trial sites and certain third parties including CROs.

Regulatory authorities enforce these requirements through periodic inspections (including pre-approval inspections once a BLA or NDA is submitted to the FDA) of trial sponsors, clinical investigators, trial sites and certain third parties including CROs.

If we, our CROs, clinical trial sites or other third parties fail to comply with applicable GCP or other regulatory requirements, we or they may be subject to enforcement or other legal actions, the clinical data generated in our clinical trials may be deemed unreliable and the FDA or comparable foreign regulatory authorities may require us to perform additional clinical trials.

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We may have conflicts with our current or future licensors or collaborators that could delay or prevent the development or commercialization of our product candidates.

We are currently party to license and collaboration agreements with Xencor and BMS, and we expect to enter into similar strategic transactions in the future.

We are currently party to license and collaboration agreements with Xencor, InnoCare and BMS, and we expect to enter into similar strategic transactions in the future.

Our current or any future collaborators may act in a manner that is adverse to our best interests and our interests may conflict with theirs, including concerning the interpretation of preclinical or clinical data, the achievement of milestones, the interpretation of contractual obligations, payments for services, development obligations or the ownership of intellectual property developed during our collaboration.

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disputes regarding milestone payments or royalties;

uncertainty regarding ownership of intellectual property rights arising from our collaborative activities, which could prevent us from entering into

additional collaborations;

uncertainty regarding ownership of intellectual property rights arising from our collaborative activities, which could prevent us from entering into additional collaborations;

unwillingness by the collaborator to cooperate in the development or manufacture of a product candidate, including providing us with data or materials;

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or attempts by either party to terminate the agreement.

Our rights to develop and commercialize our product candidates are subject, in large part, to the terms and conditions of licenses granted to us by others, such as Xencor.

Our rights to develop and commercialize our product candidates are subject, in large part, to the terms and conditions of licenses granted to us by others, such as Xencor and InnoCare.

If we fail to comply with our obligations in the agreements under which we in-license or acquire development or commercialization rights to product candidates, or data from third parties, we could lose such rights that are important to our business.

We are heavily reliant upon licenses to certain patent rights and other intellectual property that are important or necessary to the development of our current or future product candidates.

For example, we depend on licenses from Xencor for certain intellectual property relating to the development and commercialization of obexelimab, ZB002 and ZB004.

For example, we depend on licenses from Xencor for certain intellectual property relating to the development and commercialization of obexelimab, ZB002 and ZB004 and InnoCare for certain intellectual property relating to the development and commercialization of orelabrutinib, ZB021 and ZB022.

However, we have no development and commercialization rights for obexelimab in Japan, South Korea, Taiwan, Hong Kong, Singapore, and Australia, all of which rights have been sublicensed to BMS.

Xencor may have relied upon, and any future licensors may rely upon, third-party companies, consultants or collaborators, or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents we in-licensed.

If our licensors, including Xencor, fail to prosecute, maintain, enforce, and defend such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize our current or future product candidates that are or may be the subject of such licensed rights could be adversely affected.

Xencor or InnoCare may have relied upon, and any future licensors may rely upon, third-party companies, consultants or collaborators, or on funds from third parties such that our licensors are not the sole and exclusive owners of the patents we in-licensed.

If our licensors, including Xencor or InnoCare, fail to prosecute, maintain, enforce, and defend such patents, or lose rights to those patents, the rights we have licensed may be reduced or eliminated, and our right to develop and commercialize our current or future product candidates that are or may be the subject of such licensed rights could be adversely affected.

Further development and commercialization of our product candidates and development of any future product candidates may require us to enter into additional license or collaboration agreements.

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Our future licenses may not provide us with exclusive rights to use the licensed patent rights and other intellectual property licensed thereunder, or may not provide us with exclusive rights to use such patent rights and intellectual property in all relevant fields of use and in all territories in which we wish to develop or commercialize our current or future product candidates.

In spite of our efforts, Xencor or any future licensors might conclude that we are in material breach of obligations under our license agreements and may therefore have the right to terminate the license agreements, thereby removing our ability to develop and commercialize product candidates and technology covered by such license agreements.

In spite of our efforts, Xencor or InnoCare or any future licensors might conclude that we are in material breach of obligations under our license agreements and may therefore have the right to terminate the license agreements, thereby removing our ability to develop and commercialize product candidates and technology covered by such license agreements.

If such in-licenses are terminated, or if the underlying patents fail to provide the intended exclusivity, our competitors would have the freedom to seek regulatory approval of, and to market, products identical to our product candidates and the licensors to such in-licenses could prevent us from developing or commercializing product candidates that rely upon the patents or other intellectual property rights which were the subject matter of such terminated agreements.

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Moreover, if disputes over intellectual property that we have licensed prevent or impair our ability to maintain our current licensing arrangements on commercially acceptable terms, we may be unable to successfully develop and commercialize the affected product candidates, which could adversely affect our business, financial condition, results of operations, and prospects.

The operations of our suppliers, many of which are located outside of the U.S., including our current sole CMO for drug substance and drug product, WuXi Biologics, which is located in China, are subject to additional risks that are beyond our control and that could harm our business, financial condition, results of operations and prospects.

Currently, many of our suppliers primarily operate outside of the U.S., including our current sole CMO, WuXi Biologics, which provides its services to us from facilities located in China.

The operations of our suppliers, many of which are located outside of the U.S., including our current sole CMO for drug substance and drug product, WuXi Biologics, and our collaboration partner, InnoCare, both of which are located in China, are subject to additional risks that are beyond our control and that could harm our business, financial condition, results of operations and prospects.

Currently, many of our suppliers primarily operate outside of the U.S., including our current sole CMO, WuXi Biologics, and our collaboration partner, InnoCare, both of which provide services to us from facilities located in China.

As a result, we are subject to risks associated with doing business abroad, including:

● geopolitical tensions, political unrest, terrorism, labor disputes and economic instability resulting in the disruption of trade from foreign countries in which our products are manufactured, particularly China;

● the imposition of new laws and regulations, including those relating to labor conditions and safety standards, information and data transfer, imports, duties, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds, particularly new or increased tariffs imposed on imports, and as a result supply-related costs, from countries where our suppliers operate, including China, pursuant to our master services or commercial supply agreements with WuXi Biologics, as well as tariffs that impact the biopharmaceutical industry generally;

● the imposition of new laws and regulations, including those relating to labor conditions and safety standards, information and data transfer, imports, duties, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds, particularly new or increased tariffs imposed on imports, and as a result supply-related costs, from countries where our suppliers operate, including China, pursuant to our master services or commercial supply agreements with WuXi Biologics, or our clinical supply arrangement with InnoCare, as well as tariffs that impact the biopharmaceutical industry generally;

● greater challenges and increased costs with enforcing and periodically auditing or reviewing our suppliers’ and manufacturers’ compliance with cGMPs or status acceptable to the FDA or comparable foreign regulatory authorities;

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● changes in local economic conditions in countries where our manufacturers or suppliers are located.

If enacted, the BIOSECURE Act, which was introduced in 2024, in Congress, would prohibit U.S.

federal agencies from entering into or renewing a contract with any company that uses biotechnology equipment or services produced or provided by a “biotechnology company of concern” in the performance of that contract.

This legislation would restrict the ability of biopharmaceutical companies that enter into contracts with or receive funding from U.S.

federal agencies from purchasing services or equipment from certain Chinese biotechnology companies, including those that are specifically named in the proposed BIOSECURE Act.

The current version of the BIOSECURE Act , which passed in the House of Representatives names WuXi Biologics as a “biotechnology company of concern.”

If adopted into law, the BIOSECURE Act in its current form would not prevent us from sourcing drug product from WuXi Biologics for clinical use, and we believe our current inventory of drug substance and drug product will be sufficient to complete our ongoing trials of obexelimab.

Depending on the final language of the BIOSECURE Act, and how the law is interpreted by U.S.

federal agencies, however, we could be potentially restricted from pursuing U.S.

federal government business or government reimbursement for our products manufactured by WuXi Biologics or other suppliers or partners determined to be “biotechnology companies of concern.” Additionally, the legislation could adversely impact WuXi Biologics’ operations or financial position, which, in turn, could impact its ability to supply us with product in the future.

The BIOSECURE Act, signed into law in December 2025, prohibits U.S.

federal agencies from utilizing or entering into or renewing a contract with any company that uses biotechnology equipment or services produced or provided by a “biotechnology company of concern” (“BCC”) in the performance of that contract.

This legislation also restricts the ability of biopharmaceutical companies that enter into contracts with or receive funding from U.S.

federal agencies from using such equipment or services in the performance of federal contracts or grants.

While prior versions of the BIOSECURE Act named WuXi Biologics as a BCC the enacted version of the BIOSECURE Act, does not specifically name WuXi Biologics.

The BIOSECURE Act lays out two processes by which a Company can be determined to be a BCC, and no later than December 18, 2026, the Office of Management and Budget will publish a list of entities that satisfy the definition.

In its final form, the BIOSECURE Act does not prevent us from sourcing drug product from WuXi Biologics for clinical use, and we believe our current inventory of drug substance and drug product will be sufficient to complete our ongoing trials of obexelimab.

However, we could be potentially restricted from pursuing U.S.

federal government business or government reimbursement for our products manufactured by WuXi Biologics or other suppliers or partners if they are determined to be BCC.

Additionally, the legislation could adversely impact the operations or financial position of WuXi Biologics or other suppliers or partners if any are determined to be a BCC, which, in turn, could impact their ability to supply us with product in the future.

We may also face additional manufacturing and supply-chain risks due to the regulatory and political structure of China, or due to the deterioration of the relationship between China and the U.S., including but not limited to potential sanctions imposed by the U.S.

government on WuXi Biologics, or any of the other countries in which our products are marketed.

We also selected new CMOs in the U.S.

to establish additional sources of supply for drug substance and drug product for both commercial and clinical use with third-party manufacturers that are not affiliated with WuXi Biologics or another “biotechnology company of concern” identified in the proposed BIOSECURE Act.

We have selected new CMOs in the U.S.

to establish additional sources of supply for obexelimab drug substance and drug product for both commercial and clinical use with third-party manufacturers that are not affiliated with WuXi Biologics or the other BCCs identified in the earlier drafts of the BIOSECURE Act.

However, establishing new manufacturers requires significant effort and time and any delay in securing, or inability to secure, a commercial supplier of drug substance or drug product for a product candidate, if approved, including as a result of delays in contracting, technology transfer, production of validation batches or obtaining an inspection by the FDA or other applicable foreign regulatory authorities, would delay commercialization timelines or prevent commercial sales if manufacturers cannot be qualified.

For additional information on risks related to our current reliance on a sole manufacturer, please see “— Risks Related to Our Reliance on Third Parties — We currently rely on a single third-party manufacturer, WuXi Biologics, to supply our product candidates, including certain drug substances and drug products used in our product candidates.

For additional information on risks related to our current reliance on a sole manufacturer, please see “— Risks Related to Our Reliance on Third Parties — We currently rely on a single third-party manufacturer, WuXi Biologics, and our collaboration partner, InnoCare, to supply our product candidates, including certain drug substances and drug products used in our product candidates.

If we are unable to source these supplies on a timely basis, at sufficient quantities or at acceptable quality or prices, establish longer-term contracts with our CMOs, or our third - party manufacturers fails to comply with applicable regulatory requirements, we will not be able to complete our clinical trials on time and the development of our product candidates may be delayed.”

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The market price of our common stock may be volatile, which could result in substantial losses for investors.

Since shares of our common stock were sold in our IPO in September 2024 at a price of $17.00 per share and through February 28, 2025, the closing price per share of our common stock on Nasdaq has ranged from $6.43 to $25.68.

Since shares of our common stock were sold in our IPO in September 2024 at a price of $17.00 per share and through February 28, 2026, the closing price per share of our common stock on Nasdaq ranged from $6.43 to $43.17.

Some of the factors that may cause the market price of our common stock to fluctuate include:

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● market conditions in the pharmaceutical and biotechnology sectors;

● general global economic, industry, political and market conditions, such as military conflict or war, inflation and financial institution instability, or pandemic or epidemic disease outbreaks, such as COVID-19, many of which are beyond our control;

● general global economic, industry, political and market conditions, such as changing trade policies, military conflict or war, inflation and financial institution instability, or pandemic or epidemic disease outbreaks, many of which are beyond our control;

● the other factors described in this “Risk Factors” section and elsewhere in this Annual Report, including those which are outside of our control.

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Because of the potential volatility of our stock price, we may become the target of securities litigation in the future.

A significant portion of our total outstanding shares are, as of the date of filing this Annual Report, restricted from immediate resale but may be sold into the market upon expiration of the lock-up agreement entered into in connection with our IPO, which could cause the market price of our common stock to decline significantly, even if our business is doing well.

A significant portion of our total outstanding shares may be sold into the market, which could cause the market price of our common stock to decline significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market could occur at any time.

These sales upon the expiration of the lock-up agreements entered into by holders of substantially all of our common stock outstanding immediately prior to our IPO, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock.

These sales or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock.

As of December 31, 2025, we had 54,485,518 shares of common stock outstanding.

Of these shares, 15,220,588 shares sold in our IPO may be resold in the public market immediately, unless held by our affiliates.

The remaining shares are currently restricted under securities laws or other agreements, subject in some cases to applicable volume limitations under Rule 144 beginning after the close of trading on March 11, 2025.

Of these shares, 49,485,518 may be resold in the public market immediately, including 6,311,030 shares of common stock issued in a private investment in public equity (“PIPE”) that we have registered on Form S-3 ASR for resale, unless the shares are held by our affiliates who are subject to volume limitations under Rule 144.

Additionally, holders of an aggregate of 13,046,934 shares of our common stock have rights, subject to conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders.

Further, pursuant to the terms of the InnoCare Registration Rights Agreement, we are obligated to file a registration statement prior to October 7, 2026 to register for resale the InnoCare Shares.

However, InnoCare may not sell any of the InnoCare Shares until October 7, 2026, and thereafter may not transfer InnoCare Shares during any one month in an amount that exceeds the greater of (i) one percent of the outstanding common stock as most recently reported by us publicly and (ii) the average weekly reported volume of trading in the common stock during the four preceding calendar weeks.

We also registered all shares of common stock that we may issue under our equity compensation plans or that are issuable upon exercise of outstanding options.

These shares can be freely sold in the public market upon issuance and once vested, subject to volume limitations applicable to affiliates and the lock-up agreements entered into in connection with our IPO.

These shares can be freely sold in the public market upon issuance and once vested, subject to volume limitations applicable to affiliates.

If any of these additional shares are sold, or if it is perceived that they will be sold, in the public market, the market price of our common stock could decline.

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We have never declared or paid any cash dividends on our common stock.

We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash

dividends in the foreseeable future.

We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends in the foreseeable future.

As a result, capital appreciation, if any, of our common stock will be investors’ sole source of gain on an investment in our common stock in the foreseeable future.

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The choice of forum provisions contained in our Restated Charter may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder.

are challenged in a proceeding or otherwise, which could cause us to incur additional costs associated with resolving such action in other jurisdictions.

While the Delaware courts have determined that such choice of forum provisions are facially valid, it is possible that a court of law in another jurisdiction could rule that the choice of forum provisions contained in our Restated Charter are inapplicable or unenforceable if they are challenged in a proceeding or otherwise, which could cause us to incur additional costs associated with resolving such action in other jurisdictions.

The choice of forum provisions may also impose additional litigation costs on stockholders who assert that the provisions are not enforceable or invalid.

Risks Related to Our Indebtedness

Our indebtedness resulting from our Loan Agreement or future indebtedness could adversely affect our financial condition or restrict our future operations.

On March 14, 2026, the Company entered into the Loan Agreement with Credit PLC (the “Collateral Agent”), BPCR Limited Partnership and BioPharma Credit Investments V (Master) LP, which are funds managed by Pharmakon and the guarantors party thereto.

The Loan Agreement provides for up to a $250.0 million Term Loan that matures on March 27, 2031 (the “Term Loan Maturity Date”) and consists of five tranches including (1) a Tranche A Loan of $75.0 million drawn ten business days following the execution of the Loan Agreement, (2) a Tranche B Loan of $50.0 million which will be required to be drawn (and up to an additional $25.0 million that the Company may elect to draw) by no later than November 1, 2027, subject to the occurrence of the Company’s receipt of approval from the FDA of a BLA for the use of obexelimab for the treatment of IgG4-RD (the “Tranche B/C Approval Condition”), (3) a Tranche C Loan of $25.0 million (less any amounts elected to be (and actually) drawn under the Tranche B Loan in excess of $50.0 million) which will be available at the Company’s election, subject to the occurrence of the Tranche B/C Approval Condition, no later than April 28, 2028, (4) a Tranche D Loan of $50.0 million which will be available at the Company’s election no later than October 30, 2028, subject to the occurrence of the Tranche B/C Approval Condition and achievement of certain milestones in respect of certain net sales levels and (5) a Tranche E Loan of $50.0 million which will be available at the Company’s election no later than April 30, 2029, subject to the occurrence of the Tranche B/C Approval Condition and achievement of certain milestones in respect of net sales levels.

The Term Loan bears interest at a rate based upon an annual interest rate of 3-month secured overnight financing rate (subject to a 3.25% floor) plus 5.75% payable quarterly in arrears;

provided that the Company may elect for 100% of the interest for the first 24 months following the Tranche A Loan funding date may be paid-in-kind without an increase in the interest rate.

The Company is required to pay a funding fee equal to (i) 2.00% of the funding amount of the Tranche A Loan on the funding date of such loan, (ii) 2.00% of $50,000,000 of the funding amount of the Tranche B Loan on the funding date for such loan, (iii) 1.00% of any amounts in excess of $50,000,000 of the funding amount for the Tranche B Loan on the funding date for such loan, and (iv) 1.00% of each of the funding amount of the Tranche C Loan, Tranche D Loan, and Tranche E Loan on each respective funding date.

The Company may elect to prepay the Term Loans in whole or, subject to certain conditions, in part prior to the Term Loan Maturity Date with such prepayments being subject to certain prepayment, make-whole and exit fees.

The Term Loans are subject to certain mandatory prepayments, including a repayment in full of all term loans in four equal payments commencing on September 30, 2028 to the extent the Tranche B/C Approval Condition is not met on or prior to June 30, 2028.

The Loan Agreement contains customary affirmative and restrictive covenants and representations and warranties.

The Loan Agreement contains customary financial covenants, including (i) at all times prior to the satisfaction of the Tranche B/C Approval Condition, a minimum liquidity requirement and (ii) subject to the outstanding aggregate principal amount of Term Loans advanced under the Loan Agreement being equal to or greater than $200.0 million a minimum trailing twelve months consolidated net revenue covenant.

The Loan Agreement also contains certain events of default, including the following:

(i) failure to pay principal, interest and other amounts when due, (ii) the breach of the covenants under the Loan Agreement, (iii) the occurrence of a material adverse change or a withdrawal event in respect of obexelimab or orelabrutinib, (iv) certain attachments of the credit parties assets and restraints on their business, (v) certain insolvency, liquidation, bankruptcy or similar events, (vi) certain cross-default of third-party indebtedness and royalty revenue contracts, (vii) the failure to pay certain judgements, (viii) material misrepresentations, (ix) the loan documents ceasing to create a valid security interest in a material portion of the collateral, (x) the occurrence of certain ERISA events and (xi) the occurrence of a default under any intercreditor agreement, in each case subject to the grace periods, cure period and thresholds as specified in the Loan Agreement.

Upon the occurrence of an event of default, the Lenders may, among other things, accelerate our obligations under the Loan Agreement (including all obligations for principal, interest and any applicable make-whole and prepayment premiums); provided that upon an event of default relating to certain insolvency, liquidation, bankruptcy or similar events, all outstanding obligations will be automatically accelerated.

Our obligations under the Loan Agreement are secured by substantially all of our assets, including our intellectual property.

Certain of our subsidiaries may, from time to time after the Tranche A Closing Date, be required to guarantee our obligations under the Loan Agreement and, in connection with such guarantee, pledge substantially all of their assets, including intellectual property, to secure such guarantee.

Servicing our Loan Agreement requires a significant amount of cash, and we may not have sufficient cash flow to pay our debt.

Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness, including the Loan Agreement, depends on our future performance, which is subject to many factors, including, economic, financial, competitive and others, beyond our control.

We do not expect our business to be able to generate cash flow from operations in the foreseeable future, sufficient to service our debt and make necessary capital expenditures and we may therefore be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional equity capital on terms that may be onerous or highly dilutive.

Our ability to refinance the Loan Agreement, which matures in 2031, will depend on the capital markets and our financial condition at such time.

We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations and limit our flexibility in planning for and reacting to changes in our business.

General Risk Factors

Unstable economic and market conditions may have serious adverse consequences on our business, financial condition and stock price.

Global economic and business activities continue to face widespread uncertainties, and global credit and financial markets have experienced extreme volatility and disruptions in the past several years, including severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, rising interest rates, labor shortages, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recession risks, and uncertainty about economic and geopolitical stability (for example, related to the ongoing Russia-Ukraine conflict).

Global economic and business activities continue to face widespread uncertainties, and global credit and financial markets have experienced extreme volatility and disruptions in the past several years, including severely diminished liquidity and credit availability, rising inflation and monetary supply shifts, high interest rates, the impact of increased tariffs and trade policy, labor shortages, declines in consumer confidence, declines in economic growth, increases in unemployment rates, recession risks, and uncertainty about economic and geopolitical stability (for example, related to the ongoing Russia-Ukraine or Middle East conflicts).

The extent of the impact of these conditions on our operational and financial performance, including our ability to execute our business strategies and initiatives in the expected timeframe, as well as that of third parties upon whom we rely, will depend on future developments which are uncertain and cannot be predicted.

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If any of the analysts who cover us publish inaccurate or unfavorable research or opinions regarding us, our business model, our intellectual property or our stock performance, or if our preclinical studies and clinical trials and operating results fail to meet the expectations of analysts, our stock price would likely decline.

We have incurred, and will incur, increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

We have incurred, and will continue to incur, increased costs as a result of operating as a public company, and our management will continue to be required to devote substantial time to new compliance initiatives and corporate governance practices.

As a public company, we have incurred, and particularly after we are no longer an emerging growth company, we will incur significant legal, accounting and other expenses that we did not incur as a private company.

The Securities Act, the Exchange Act, Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the listing requirements of the Nasdaq Global Select Market and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.

Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives.

Moreover, we expect these rules and regulations to substantially increase our legal and financial compliance costs and to make some activities more time consuming and costly.

We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements.

Our management and other personnel will continue to need to devote a substantial amount of time to these compliance initiatives.

Moreover, we expect these rules and regulations have and we expect them to continue to substantially increase our legal and financial compliance costs and to make some activities more time consuming and costly.

We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements in the future.

The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers.

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This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices.

Failure to establish and maintain effective internal control over financial reporting could adversely affect our business and if investors lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be negatively affected.

We are required to comply with the SEC’s rules implementing Section 404 of the Sarbanes-Oxley Act, which requires management to certify financial and other information in our annual and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting.

Although we will be required to disclose changes made in our internal control over financial reporting on an annual basis, we will not be required to make our first annual assessment of our internal control over financial reporting until our annual report on Form 10-K, for fiscal year ending December 31, 2025.

However, as an emerging growth company, our independent registered public accounting firm will not be required to formally attest to the effectiveness of our internal control over financial reporting until the later of the fiscal year ending December 31, 2025 or the date we are no longer an emerging growth company.

At such time, our independent registered public accounting firm would need to issue a report that is adverse in the event that there are material weaknesses in our internal control over financial reporting.

To comply with the requirements of being a public company, we have undertaken various actions, and will need to take additional actions, such as implementing numerous internal controls and procedures and hiring additional accounting or internal audit staff or consultants.

Testing and maintaining internal controls can divert our management’s attention from other matters that are important to the operation of our business.

If we fail to maintain an effective system of internal control over financial reporting in the future, we may not be able to accurately report our financial condition, results of operations or cash flows, which may adversely affect investor confidence in us and, as a result, the value of our common stock.

The Sarbanes-Oxley Act requires, among other things, that we maintain effective internal controls for financial reporting and disclosure controls and procedures.

We are required, under Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting.

This assessment must include disclosure of any material weaknesses identified by our management in our internal control over financial reporting.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting that results in more than a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis.

Section 404 of the Sarbanes-Oxley Act also generally requires an attestation from our independent registered public accounting firm on the effectiveness of our internal control over financial reporting.

However, for as long as we remain an emerging growth company as defined in the JOBS Act, we intend to take advantage of the exemption permitting us not to comply with the independent registered public accounting firm attestation requirement.

Our compliance with Section 404 will require that we incur substantial expense and expend significant management efforts.

We currently do not have an internal audit group, and we will need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and compile the system and process documentation necessary to perform the evaluation needed to comply with Section 404.

We may not be able to complete our evaluation, testing and any required remediation in a timely fashion.

During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial reporting, we will be unable to assert that our internal control over financial reporting is effective.

We cannot assure you that there will not be material weaknesses or significant deficiencies in our internal control over financial reporting in the future.

Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows.

If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begins its Section 404 reviews, we could lose investor confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by the Nasdaq Global Select Market, the SEC or other regulatory authorities.

Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

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Securities litigation (including the cost to defend against, and any potential adverse outcome resulting from any such proceeding) can be expensive, time consuming, damage our reputation and divert our management’s attention from other business concerns, which could seriously harm our business.

We could be subject to securities class action litigation .

In the past, securities class action litigation has often been instituted against companies following periods of volatility in the trading price of a company’s securities.

This type of litigation, if instituted, could result in substantial costs and a diversion of management’s attention and resources, which would harm our business, operating results or financial condition.

Additionally, the dramatic increase in the cost of directors’ and officers’ liability insurance may cause us to opt for lower overall policy limits or to forgo insurance that we may otherwise rely on to cover significant defense costs, settlements and damages awarded to plaintiffs.

We could be subject to changes in tax rates, the adoption of new tax legislation or could otherwise have exposure to additional tax liabilities, which could harm our business.

Securities class action litigation imposes costs on our business .

Securities class action litigation often is instituted against issuers following periods of volatility or declines in the market prices of a n issuer’ s securities.

As an example, in April 2025, a putative securities class action was filed against us and certain of our directors and officers, as well as the underwriters in our IPO.

The action, purportedly brought on behalf of a putative class of purchasers of our common stock in, or traceable to, our IPO, asserts claims under Sections 11, 12, and 15 of the Securities Act.

The action seeks compensatory damages, attorneys’ fees and costs, and any other relief that the court determines is just and proper.

Often multiple plaintiffs’ attorneys file similar complaints and, at a future point, a consolidated amended complaint is filed.

For example, in the putative class action just discussed, the plaintiff filed an amended complaint in November 2025 alleging claims under Sections 11 and 15 of the Securities Act, and Defendants moved to dismiss the amended complaint in January 2026.

We do not anticipate providing updates for similar complaints or developments in this litigation, absent a legal obligation.

Securities litigation results in costs and diversion of management’s time and attention.

The underwriting agreement from our IPO contemplates that we cover certain litigation expenses incurred by the underwriters in connection with the suit referenced above.

Costs we incur addressing securities litigation harm our business, operating results and financial condition, potentially with significant impact.

Securities litigation also often raises the cost of directors’ and officers’ liability insurance.

We factor those costs into the policy limits and scope of coverage we obtain, with those costs being a key factor in determining the extent to which we rely on our balance sheet, rather than insurance to cover defense costs, any settlement amounts, or any damages awarded to plaintiffs in litigation.

Our ability to use our net operating loss carryforwards and other tax attributes to offset future taxable income may be limited.

We have incurred substantial losses and certain tax credits in the past and may incur more as we pursue our business strategy.

Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, if a corporation undergoes an “ownership change,” very generally defined as a greater than 50% percentage point change (by value) in its equity ownership by “5 percent shareholders” over a three-year period, the corporation’s ability to use its pre-change net operating losses (“NOLs”) and other pre-change tax attributes (such as research and development tax credits) to offset its post-change income or taxes may be limited.

Similar provisions of state or non-U.S.

tax law also may apply.

We may have experienced ownership changes in the past and may experience ownership changes as a result of future changes in our stock ownership, some of which are outside our control.

There is also a risk that due to regulatory changes, such as suspensions on the use of NOLs by federal, state or non-U.S.

taxing authorities or other unforeseen reasons, our existing NOLs could expire or otherwise be unavailable to reduce future income tax liabilities.

As a result, our ability to use our NOLs and tax credits to offset future taxable income, if any, could be subject to limitations.

Changes in tax rates, the adoption of new tax legislation or other exposure to tax liabilities, could harm our business.

Changes to tax laws or regulations in the jurisdictions in which we operate, or in the interpretation of such laws or regulations, could significantly increase our effective tax rate, and otherwise materially affect our financial condition.

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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 1A. Risk Factors