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● successfully complete all safety and efficacy studies (preclinical and clinical) required to obtain U.S.
−Removed: and foreign regulatory approva;
+Added: and foreign regulatory approval;
● run additional clinical trials or other studies beyond those planned to support the approval and commercialization;
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● enforce and defend our intellectual property rights and claims.
−Removed: Furthermore, third parties may allege that they have intellectual property rights that would block our commercial activities and we may need to seek a license, which may not be available or may not be available at a reasonable price.
+Added: Furthermore, third parties may allege that they have intellectual property rights that could block our commercial activities and we may need to seek a license, which may not be available or may not be available at a reasonable price.
We may also have a contractual dispute, such as a dispute related to patent inventorship or ownership, which may take significant resources, including the management team’s time, to resolve.
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If we are unable to raise further capital in the near-term, or partner with third parties that fund all or the vast majority of our costs and capital expenditures, then we may be unable to continue operations.
−Removed: We do not expect to generate sufficient revenue through any means to fully fund our operations in the near-term.
+Added: We do not expect to generate sufficient revenue through any means to fully fund our operations in the
We cannot assure you that any additional financing that we are able to raise would not have a dilutive impact on your ownership interest in the Company.
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If we breach the agreements, or if we are unable to satisfy our obligations under which we license rights to the ZB Assets, we could lose the ability to develop and commercialize one or more of the ZB Assets.
−Removed: Our ability to develop and commercialize the ZB Assets is dependent on the use of certain intellectual property and regulatory rights licensed to us from Pfizer (for ZB- 168) and Lilly (for torudokimab and tibulizumab).
+Added: Our ability to develop and commercialize the ZB Assets is dependent on the use of certain intellectual property and regulatory rights licensed to us from Pfizer (for crebankitug) and Lilly (for torudokimab and tibulizumab).
The licenses set forth certain terms and conditions for maintaining the licenses.
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“ Business — License Agreements — Pfizer Agreement ”.
−Removed: Further, a wholly owned Pfizer subsidiary is the owner of certain intellectual property licensed to us from Pfizer for ZB-168.
+Added: Further, a wholly owned Pfizer subsidiary is the owner of certain intellectual property licensed to us from Pfizer for crebankitug.
The confirmatory three-way license agreement provides Pfizer the necessary rights to give effect to the Pfizer License.
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We may not be able to initiate clinical trials if drug product is not timely available at clinical trial sites.
−Removed: We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible participants to participate in these trials to conclusion as required by the FDA or foreign regulatory authorities.
−Removed: Additionally, certain clinical trials for our product candidates may be focused on indications with relatively small patient populations, which may further limit enrollment of eligible participants or may result in slower enrollment than we anticipate.
+Added: We may not be able to initiate clinical trials if drug product is not timely available at clinical trial sites.
+Added: We may not be able to initiate or continue clinical trials for our product candidates if we are unable to locate and enroll a sufficient number of eligible participants to participate in these trials to conclude as required by the FDA or foreign regulatory authorities.
+Added: Additionally, certain
+Added: clinical trials for our product candidates may be focused on indications with relatively small patient populations, which may further limit enrollment of eligible participants or may result in slower enrollment than we anticipate.
The eligibility criteria of our clinical trials, once established, may further limit the pool of available trial participants.
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Participant enrollment and retention in clinical trials depends on many factors, including the size and nature of the patient population, the severity of the disease under investigation, the nature of the trial protocol, the existing body of safety and efficacy data for the product candidate, the number and nature of competing treatments and ongoing clinical trials of competing therapies for the same indication, the proximity of participants to clinical sites, the eligibility criteria for the trial, the ability to adequately monitor participants during a clinical trial, clinicians’ and participants’ perceptions as to the potential advantages of the product candidate being studied, and the risk that participants will drop out of a trial before completing all site visits.
−Removed: There are limited patient pools from which to draw in order to complete our clinical trials in a timely and cost-effective manner, particulraly for any rare diseases we are pursuing.
+Added: There are limited patient pools from which to draw in order to complete our clinical trials in a timely and cost-effective manner, particularly for any rare diseases we are pursuing.
Furthermore, a number of factors could delay or prevent potential participants from participating in our clinical trials.
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Risks Related to the Clinical Development and Commercialization of Our Product Candidates
−Removed: Statements included in this annual report on Form 10-K concerning clinical trials of the ZB Assets have not been reviewed, furnished or endorsed by Pfizer or Lilly, and Pfizer and Lilly have not certified and do not certify any information included herein.
We have never successfully completed the regulatory approval process for any product candidates and we may be unable to do so for any product candidates we develop.
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Our future success is substantially dependent on our ability to successfully develop the ZB Assets for future marketing approval, and then successful commercialization.
−Removed: In 2015, ZB- 168 was placed on clinical hold (an order issued by the United States FDA to the sponsor of an investigational new drug application to delay or to suspend a clinical investigation) due to concern regarding IL- 7Rα expression on certain cell types within the lung and “insufficient information to address the potential risk that RN168 treatment poses to the respiratory system in humans.” The clinical hold was not the result of any adverse events or safety findings emerging from the ongoing clinical studies.
+Added: In 2015, crebankitug was placed on clinical hold (an order issued by the United States FDA to the sponsor of an investigational new drug application to delay or to suspend a clinical investigation) due to concern regarding IL- 7Rα expression on certain cell types
+Added: within the lung and “insufficient information to address the potential risk that RN168 treatment poses to the respiratory system in humans.” The clinical hold was not the result of any adverse events or safety findings emerging from the ongoing clinical studies.
Pfizer’s response to the clinical hold included conducting additional non-clinical experiments, a review of IL- 7Rα expression in the lung, and proposed pulmonary monitoring plans for future clinical trials, and a detailed assessment of adverse events in the clinical trials conducted to date.
The clinical hold was lifted in 2016 with the following conditions/requirements:
−Removed: before enrolling children in studies with ZB- 168, data should be submitted supporting that the potential benefits justify the potential risks.
+Added: before enrolling children in studies with crebankitug, data should be submitted supporting that the potential benefits justify the potential risks.
We have subsequently received FDA written responses in September 2023, to our pre-IND application, acknowledging that the completed non-clinical studies appear reasonable to support moving forward to a phase 2 study in alopecia areata.
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Our clinical trials may not be conducted as planned or completed on schedule, if at all, and a failure of one or more clinical trials can occur at any stage.
−Removed: The outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later clinical trials, and the outcome of preclinical studies and early-stage clinical trials for a product candidate for a particular indication may not be predictive of the success of preclinical studies and early-stage clinical trials for the same product candidate for a different indication.
+Added: The outcome of preclinical studies and early-stage clinical trials may not be predictive of the success of later clinical trials, and the outcome of preclinical studies and early-stage clinical trials for a product candidate for a particular indication may not be predictive of the success of preclinical studies and early-stage clinical trials for the same product candidate for a different
Unexpectedly favorable results for the standard of care in any Phase 2 or Phase 3 trial could lead to unfavorable comparisons to the ZB Assets.
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We cannot guarantee that any clinical trials will be initiated or conducted as planned or completed on schedule, if at all.
−Removed: We also cannot be sure that submission of an investigational new drug application (“IND”) or similar application will result in the FDA, EMA, or other regulatory authority, as applicable, allowing clinical trials to begin in a timely manner, if at all.
+Added: We also cannot be sure that submission of an IND or similar application will result in the FDA, EMA, or other regulatory authority, as applicable, allowing clinical trials to begin in a timely manner, if at all.
Moreover, even if these trials begin, issues may arise that could cause regulatory authorities to suspend or terminate such clinical trials.
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delays or failure in obtaining regulatory authorization to commence a trial;
−Removed: delays in reaching agreement on acceptable terms with prospective contract research organizations (“CROs”) and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;
+Added: delays in reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and clinical trial sites;
delays in identifying, recruiting and training suitable clinical investigators;
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failure by our CROs, other third parties or us to adhere to clinical trial protocols;
−Removed: failure to perform in accordance with the FDA’s or any other regulatory authority’s good clinical practice requirements (“GCPs”) or applicable regulatory guidelines in other countries;
+Added: failure to perform in accordance with the FDA’s or any other regulatory authority’s GCPs or applicable regulatory guidelines in other countries;
changes to the clinical trial protocols;
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Further, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the value of the particular program, the approvability or commercialization of the ZB Assets and our company in general.
−Removed: In addition, the information we choose to publicly disclose regarding a particular preclinical study or clinical trial is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.
+Added: In addition, the information we choose to publicly disclose regarding a particular preclinical study or clinical trial
+Added: is based on what is typically extensive information, and you or others may not agree with what we determine is material or otherwise appropriate information to include in our disclosure.
If the preliminary or interim data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, the ZB Assets may be harmed, which could harm our business, operating results, prospects or financial condition.
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The ZB Assets are protein therapeutics and thus carry the risk of provoking immune responses.
−Removed: For example, the formation of anti-drug antibodies (“ADA”) were observed in the majority of patients who were dosed with ZB-168 in a phase 1b trial in T1D mellitus, including 54.5% of patients who developed neutralizing ADA.
+Added: For example, the formation of anti-drug antibodies (“ADA”) were observed in the majority of patients who were dosed with crebankitug in a phase 1b trial in T1D mellitus, including 54.5% of patients who developed neutralizing ADA.
Although these ADAs did not appear to affect drug concentrations based on visual inspection, there can be no assurance that ADAs will not develop in future studies that may reduce exposure or lead to adverse safety events.
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Our reliance on the CROs and others will not relieve us of our regulatory responsibilities.
−Removed: We, our CROs, and other third parties we might engage will be required to comply with good laboratory practices (GLPs) and GCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities in the form of International Conference on Harmonization guidelines for any of our product candidates that are in preclinical and clinical development.
+Added: We, our CROs, and other third parties we might engage will be required to comply with GLPs and GCPs, which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities in the form of International Conference on Harmonization guidelines for any of our product candidates that are in preclinical and clinical development.
The regulatory authorities enforce GCPs through periodic inspections of trial sponsors, principal investigators, and clinical trial sites.
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Our current and anticipated future dependence upon others for the manufacture of our product candidates or drugs may adversely affect our future profit margins and our ability to commercialize any product candidates that receive marketing approval on a timely and competitive basis.
+Added: There is inherent risk, based on the complex relationships among the United States and the countries in which we conduct our business, that political, diplomatic and national security factors could lead to global trade restrictions and changes in trade policies and regulations that may adversely affect our business and operations.
Risks Related to Our Intellectual Property
−Removed: Our business relies on certain licensing rights from Pfizer for ZB-168 that can be terminated in certain circumstances.
−Removed: If we breach the agreement, or if we are unable to satisfy our obligations under which we license rights to torudokimab from Pfizer, we could lose the ability to develop and commercialize ZB-168.
−Removed: We are party to a license agreement with Pfizer under which we were granted rights to certain patents, know-how and technology that are important and necessary to our business, including for ZB-168.
+Added: Our business relies on certain licensing rights from Pfizer for crebankitug that can be terminated in certain circumstances.
+Added: If we breach the agreement, or if we are unable to satisfy our obligations under which we license rights to torudokimab from Pfizer, we could lose the ability to develop and commercialize crebankitug.
+Added: We are party to a license agreement with Pfizer under which we were granted rights to certain patents, know-how and technology that are important and necessary to our business, including for crebankitug.
Our rights to use these patents and employ the inventions claimed therein, as well as the exploitation of licensed technology and know-how, are subject to the continuation of, and our compliance with, the terms of our license agreement.
Our license agreement with Pfizer imposes upon us various diligence, payment and other obligations, including as described in the section entitled “ Business — License Agreements — Pfizer Agreement .”
−Removed: If we fail to comply with any of our obligations under the Pfizer Agreement, or we are subject to a bankruptcy or dissolution, Pfizer may have the right to terminate the license agreement, in which event we would not be able to market any ZB-168 product.
−Removed: We are heavily reliant upon the license from Pfizer to certain patent rights that are important or necessary to the development of ZB-168.
−Removed: Pfizer retains all rights not expressly granted by the license as well as retaining rights to make, have made, use and import ZB-168 or any products containing ZB-168 for all internal research, development and regulatory purposes, except that Pfizer does not have the right to conduct clinical trials to develop ZB-168 or any products containing ZB-168.
+Added: If we fail to comply with any of our obligations under the Pfizer Agreement, or we are subject to a bankruptcy or dissolution, Pfizer may have the right to terminate the license agreement, in which event we would not be able to market any crebankitug product.
+Added: We are heavily reliant upon the license from Pfizer to certain patent rights that are important or necessary to the development of crebankitug.
+Added: Pfizer retains all rights not expressly granted by the license as well as retaining rights to make, have made, use and import crebankitug or any products containing crebankitug for all internal research, development and regulatory purposes, except that Pfizer does not have the right to conduct clinical trials to develop crebankitug or any products containing crebankitug.
We are responsible for filing, prosecuting (including in connection with any reexaminations, oppositions and the like) and maintaining the licensed patent rights and to provide Pfizer a reasonable opportunity to review and comment on proposed submissions to any patent office and reasonably consider any comments provided by Pfizer.
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We cannot be certain that drafting or prosecution of those patents and patent applications were conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents.
−Removed: Pursuant to the Pfizer Agreement, we are required to prepare a development plan and use Commercially Reasonable Efforts (as that term is defined in the Pfizer Agreement) to develop and seek regulatory approval for ZB-168 in several countries and then to commercialize each product where regulatory approval is obtained.
−Removed: If we fail to comply with the obligations under our license agreement, or if we use the licensed intellectual property in an unauthorized manner, we may be required to pay damages and Pfizer may have the right to terminate the license.
+Added: Pursuant to the Pfizer Agreement, we are required to prepare a development plan and use Commercially Reasonable Efforts (as that term is defined in the Pfizer Agreement) to develop and seek regulatory approval for crebankitug in several countries and then to commercialize each product where regulatory approval is obtained.
+Added: If we fail to comply with the obligations under our license
+Added: agreement, or if we use the licensed intellectual property in an unauthorized manner, we may be required to pay damages and Pfizer may have the right to terminate the license.
If our license agreement is terminated, we may not be able to develop, manufacture, market or sell the product candidate covered by our agreement and those being tested or approved in combination with such product.
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If disputes over intellectual property and other rights that we have licensed, own in the future or co-own in the future prevent or impair our ability to maintain our licensing or exclusivity arrangements on acceptable terms, we may be unable to successfully develop and commercialize the affected product candidate.
−Removed: We enjoy only limited geographical protection with respect to our licensed patents and may not be able to protect our intellectual property rights throughout the world.
+Added: We have limited geographical protection with respect to our licensed patents and may not be able to protect our intellectual property rights throughout the world.
We may not be able to protect our intellectual property rights throughout the world and the legal systems in certain countries may not favor enforcement or protection of patents, trade secrets and other intellectual property.
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The life of a patent and the protection it affords is limited.
−Removed: For example, in the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest US non-provisional filing date.
+Added: For example, in the United States, if all maintenance fees are timely paid, the natural expiration of a patent is generally 20 years from its earliest U.S.
+Added: non-provisional filing date.
In Europe, the expiration of an invention patent is 20 years from its filing date.
−Removed: Certain US patents have a longer patent term pursuant to patent term adjustment (35 U.S.C.
+Added: patents have a longer patent term pursuant to patent term adjustment (35 U.S.C.
Our competitors may operate in countries where we do not have patent protection and can freely use our technologies and discoveries.
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Obtaining and maintaining our patent protection depends on compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated if we fail to comply with these requirements.
−Removed: Periodic maintenance and annuity fees on any issued patent are due to be paid to the United States Patent and Trademark Office (“USPTO”) and foreign patent agencies over the lifetime of a patent.
+Added: Periodic maintenance and annuity fees on any issued patent are due to be paid to the USPTO and foreign patent agencies over the lifetime of a patent.
In addition, the USPTO and other foreign patent agencies require compliance with a number of procedural, documentary, and other similar provisions during the patent application process.
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We may be subject to claims challenging the inventorship, validity, or enforceability of our patents and/or other intellectual property.
−Removed: Finally, changes in US patent law, or laws in other countries, could diminish the value of patents in general, thereby impairing our ability to protect the ZB Assets.
+Added: Finally, changes in U.S.
+Added: patent law, or laws in other countries, could diminish the value of patents in general, thereby impairing our ability to protect the ZB Assets.
Further, if we encounter delays in our clinical trials or delays in obtaining regulatory approval, the period of time during which we could market the ZB Assets under patent protection would be reduced.
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An adverse determination in any such submission, proceeding or litigation could reduce the scope of, or invalidate, our patent rights, allow third parties to commercialize our technology or the ZB Assets and compete directly with us, or result in our inability to manufacture or commercialize drugs without infringing third-party patent rights.
−Removed: If the breadth or strength of protection provided by our patents and patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize the ZB Assets.
+Added: If the breadth or strength of protection provided by our patents and
+Added: patent applications is threatened, regardless of the outcome, it could dissuade companies from collaborating with us to license, develop or commercialize the ZB Assets.
We may not be able to maintain or enforce trade secret protection for our product candidates
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The length of the patent term extension is related to the length of time the drug is under regulatory review.
−Removed: However, a patent extension cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval, only one patent applicable to an approved drug may be extended and only those claims covering the approved drugor its use it may be extended.
+Added: However, a patent extension cannot extend the remaining term of a patent beyond a total of 14 years
+Added: from the date of product approval, only one patent applicable to an approved drug may be extended and only those claims covering the approved drug or its use it may be extended.
Similar provisions are available in Europe and certain other non-United States jurisdictions to extend the term of a patent that covers an approved drug.
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If we are unable to obtain any patent term extension or the term of any such extension is less than we request, our competitors may obtain approval of competing products following the expiration of our patent rights, and our business, financial condition, results of operations and prospects could be materially harmed.
−Removed: It is possible that we will not obtain patent term extension under the Hatch-Waxman Act for a U.S.
+Added: It is possible that we will not obtain patent term extension for a U.S.
patent covering one or more of the ZB Assets even where that patent is eligible for patent term extension, or if we obtain such an extension, it may be for a shorter period than we had sought.
−Removed: There are detailed rules and requirements regarding the patents that may be submitted to the FDA for listing in the Licensed Biological Products with Reference Product Exclusivity and Biosimilarity or Interchangeability Evaluations (also known as the “Purple Book”), a searchable, online database that contains information about biological products, including biosimilar and interchangeable biological products, licensed (approved) by the FDA under the Public Health Service (PHS) Act.
+Added: There are requirements regarding the patents that may be submitted to the FDA for listing in the Licensed Biological Products with Reference Product Exclusivity and Biosimilarity or Interchangeability Evaluations (also known as the “Purple Book”), an online database that contains information about biological products approved by the FDA under the PHSA.
We may be unable to obtain patents covering those ZB Assets that contain one or more claims that satisfy the requirements for listing in the Purple Book.
−Removed: Even if we submit a patent for listing in the Purple Book, the FDA may decline to list the patent, or a manufacturer of biosimilar or interchangable drugs may challenge the listing.
−Removed: If the ZB Assets are approved and patents covering the ZB Assets are not listed in the Purple Book, a manufacturer of biosimilar or interchangablable drugs would not have to provide advance notice to us of any abbreviated new drug application filed with the FDA to obtain permission to sell a biosimilar or interchangable version of either of the ZB Assets.
+Added: Even if we submit a patent for listing in the Purple Book, the FDA may decline to list the patent, or a manufacturer of biosimilar or interchangeable drugs may challenge the listing.
+Added: If the ZB Assets are approved and patents covering the ZB Assets are not listed in the Purple Book, a manufacturer of biosimilar or interchangeable drugs would not have to provide advance notice to us of any abbreviated new drug application filed with the FDA to obtain permission to sell a biosimilar or interchangeable version of either of the ZB Assets.
Changes to patent laws in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect the ZB Assets.
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In addition, the patent positions of companies in the development and commercialization of biologics and pharmaceuticals are particularly uncertain.
−Removed: Recent US Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and altered the rights of patent owners in certain situations.
+Added: Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and altered the rights of patent owners in certain situations.
This combination of events has created uncertainty with respect to the validity and enforceability of patents once obtained.
−Removed: Depending on future legislation by the US Congress, decisions by the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on our patent rights and our ability to protect, defend and enforce our patent rights in the future.
+Added: Depending on future legislation by the U.S.
+Added: Congress, decisions by the federal courts and the USPTO, the laws and regulations governing patents could change in unpredictable ways that could have a material adverse effect on our patent rights and our ability to protect, defend and enforce our patent rights in the future.
For example, in the case Amgen v.
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Kite, the Federal Circuit held genus claims directed to CAR-T cells invalid for lack of written description for failing to provide disclosure commensurate with the scope of the claims.
−Removed: While we do not believe that any of the patents licensed or owned by us will be found wholly invalid based on these decisions, we cannot predict how future decisions by the courts, Congress or the USPTO may impact the value of our patents.
+Added: While we do not believe that any of the patents licensed or owned by us will be found wholly invalid based on these decisions, we cannot predict how future decisions by the courts, Congress or the USPTO
+Added: may impact the value of our patents.
Similarly, changes in the patent laws of other jurisdictions could adversely affect our ability to obtain and effectively enforce our patent rights, which would have a material adverse effect on our business and financial condition.
+Added: In Europe, a new unitary patent system came into effect on June 1, 2023.
+Added: Under the unitary patent system, European patent applications and patents may be subjected to the jurisdiction of the Unified Patent Court (UPC).
+Added: European applications will have the option, upon grant of a patent, of becoming a Unitary Patent which will be subject to the jurisdiction of the UPC.
+Added: As the UPC is a new court system, there is no precedent for the court, increasing the uncertainty of any litigation.
+Added: Patents that remain under the jurisdiction of the UPC will be potentially vulnerable to a single UPC-based revocation challenge that, if successful, could invalidate the patent in all countries who are signatories to the UPC.
+Added: We cannot predict with certainty the long-term effects of any potential changes.
We may not identify relevant third-party patents or may incorrectly interpret the relevance, scope or expiration of a third-party patent, which might adversely affect our ability to develop and market the ZB Assets.
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If a third party successfully brings a claim against us, we may be required to pay substantial damages, be forced to abandon the ZB Assets and/or seek a license from the patent holder.
−Removed: In addition, any intellectual property claims (e.g., patent infringement or trade secret theft) brought against us, whether or not successful, may cause us to incur significant legal expenses and divert the attention of our management and key personnel from other business concerns.
+Added: In addition, any intellectual property claims (e.g., patent infringement or trade secret theft) brought against us, whether or not successful, may cause us to incur significant legal expenses and divert the attention of our management and key personnel
+Added: from other business concerns.
We cannot be certain that patents owned or licensed by us will not be challenged by others in the course of litigation.
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provided, that Pfizer shall not have the right to conduct clinical trials to develop the underlying technology in the treatment, diagnosis or prevention of diseases in humans, (b) the right to use the licensed patent rights and know-how for purposes other than those exclusively license to us under the Pfizer Agreement and (c) the rights that have been provided by Pfizer to (i) a reagent supplier to make or sell the underlying technology or (ii) a non-commercial entity to use the underlying technology, in each case in the form of non- cGMP samples of the underlying technology in milligram quantities solely as a research reagent.
−Removed: Pfizer may also use for any purpose information in non-tangible form which may be retained by persons who have had access to ZB-168 and the licensed know-how, including ideas, concepts or techniques contained therein.
+Added: Pfizer may also use for any purpose information in non-tangible form which may be retained by persons who have had access to crebankitug and the licensed know-how, including ideas, concepts or techniques contained therein.
It is difficult to monitor whether Pfizer limits its use of the technology to these uses, and we could incur substantial expenses to enforce our rights to our licensed technology in the event of misuse.
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Should any of these events occur, they could significantly harm our business and results of operation.
−Removed: If approved, our product candidates that are regulated as biologics may face competition from biosimilars or interchangables approved through an abbreviated regulatory pathway.
−Removed: The Biologics Price Competition and Innovation Act of 2009, or BPCIA, was enacted as part of the ACA to establish an abbreviated pathway for the approval of biosimilar and interchangeable biological products.
+Added: If approved, our product candidates that are regulated as biologics may face competition from biosimilars or interchangeables approved through an abbreviated regulatory pathway.
+Added: The BPCIA was enacted as part of the ACA to establish an abbreviated pathway for the approval of biosimilar and interchangeable biological products.
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.
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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.
−Removed: During this 12-year period of exclusivity, another company may still develop and receive approval of a competing biologic, so long as their biologics license application (“BLA”) does not rely on the reference product, sponsor’s data or submit the application as a biosimilar application.
−Removed: The law is complex and is still being interpreted and implemented by the FDA.
−Removed: 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.
+Added: 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, sponsor’s data or submit the application as a biosimilar application.
+Added: 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 if any of the ZB Assets is approved in the United States as a biological product under a BLA it would 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.
−Removed: 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.
+Added: 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 will depend on a number of marketplace and regulatory factors that are still developing.
The approval of a biosimilar or interchangeable of our product candidates could have a material adverse impact on our business due to increased competition and pricing pressure.
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If we are not able to obtain, or if there are delays in obtaining, required regulatory approvals for the ZB Assets, we may not be able to commercialize, or may be delayed in commercializing, the ZB Assets, and our ability to generate revenue will be materially impaired.
−Removed: The process of obtaining regulatory approvals in the United States, European Union (“EU”), and other jurisdictions is complex, expensive and typically takes many years following commencement of clinical trials, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved.
+Added: The process of obtaining regulatory approvals in the U.S., E.U.
+Added: and other jurisdictions is complex, expensive and typically takes many years following commencement of clinical trials, if approval is obtained at all, and can vary substantially based upon a variety of factors, including the type, complexity and novelty of the product candidates involved.
We cannot commercialize the ZB Assets without first obtaining regulatory approval from the FDA in the United States and comparable foreign regulatory authorities outside of the United States.
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the FDA, EMA, or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical or commercial supplies;
−Removed: and the approval policies or regulations of the
−Removed: FDA, EMA, or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
+Added: and the approval policies or regulations of the FDA, EMA, or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
Further, the approval requirements for the ZB Assets are likely to vary by jurisdiction such that success in one jurisdiction is not necessarily predicative of success elsewhere.
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Due to unfavorable pricing regulations and/or third-party coverage and reimbursement policies, we may not be able to offer the ZB Assets at competitive prices which would seriously harm our business.
−Removed: Our ability to successfully commercialize the ZB Assets also will depend in part on the extent to which reimbursement will be available from government health administration authorities, private health insurers and other organizations.
−Removed: Government authorities and other third-party payors, such as private health insurers and health maintenance organizations, decide which medications they will pay for and establish reimbursement levels.
+Added: Sales of our product candidates in the United States, if approved, will depend, in part, on the extent to which such products will be covered by third-party payors, such as government health care programs, commercial insurance and managed healthcare organizations.
+Added: These third-party payors are increasingly limiting coverage and/or reducing reimbursements for medical products and services.
+Added: A third-party payor’s decision to provide coverage for a drug product does not imply that an adequate reimbursement rate will be approved.
+Added: Further, one payor’s determination to provide coverage for a drug product does not ensure that other payors will also provide coverage for the drug product.
+Added: Coverage policies and third-party payor reimbursement rates may change at any time.
+Added: In addition, the U.S.
+Added: government, state legislatures and foreign governments have continued implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products.
+Added: Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit
+Added: our net revenue and results.
+Added: Decreases in third-party payor reimbursement or a decision by a third-party payor to not cover any of our product candidates, if approved, could have a material adverse effect on our sales, results of operations and financial condition.
+Added: If we are unable to obtain adequate levels of reimbursement, our ability to successfully market and sell any product candidates if approved will be harmed.
The FDA, EMA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.
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Even if we obtain significant market share for our product candidates, because the potential target populations could be small, we may never achieve profitability without obtaining regulatory approval for additional indications.
+Added: Certain current and future relationships with customers and third party payors as well as certain of our business operations may be subject, directly or indirectly, to federal and state healthcare fraud and abuse laws, false claims laws, health information privacy and information security laws and other privacy and information security laws.
+Added: If we are unable to comply, or have not fully complied or are perceived to have not fully complied, with such laws, we could face significant penalties, including criminal sanctions, civil penalties, contractual damages, reputational harm and diminished profits and future earnings.
+Added: Our operations may be directly, or indirectly through our relationships with customers, third party payors, healthcare providers, and others subject to various federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and the federal False Claims Act.
+Added: These laws may impact, among other things, our proposed sales, marketing and education programs.
+Added: The laws and regulations that may affect our ability to operate include, but may not be limited to:
+Added: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, to induce, or in return for, either the referral of an individual, or the purchase or recommendation of an item or service for which payment may be made under a federal healthcare program, such as the Medicare and Medicaid programs;
+Added: ● federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalty laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment to the federal government, including Medicare or Medicaid, that are false or fraudulent;
+Added: ● the federal Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters;
+Added: ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH") and its implementing regulations, which also imposes certain obligations, including mandatory contractual terms, with respect to safeguarding the privacy and security of individually identifiable health information of covered entities subject to the rule, such as health plans, healthcare clearinghouses and certain healthcare providers, as well as their business associates, independent contractors of a covered entity that perform certain services involving the use or disclosure of individually identifiable health information on their behalf and their subcontractors that use, disclose, access, or otherwise process individually identifiable health information, and their covered subcontractors;
+Added: ● the federal Physician Payments Sunshine Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services ("CMS") information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), other healthcare professionals (such as physician assistants and nurse practitioners), and teaching hospitals, and further requires applicable manufacturers and applicable group purchasing organizations to report annually to CMS ownership and investment interests held by physicians and their immediate family members;
+Added: ● state and foreign law equivalents of each of the above federal laws, such as:
+Added: anti-kickback and false claims laws which may apply to items or services reimbursed by any third party payor, including commercial insurers;
+Added: state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government;
+Added: state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures;
+Added: state laws that require the reporting of information related to drug pricing;
+Added: and state and local laws that require the registration of pharmaceutical sales representatives, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts.
+Added: If our operations are found to be in violation (or perceived to be in violation) of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, litigation, significant civil, criminal and administrative penalties, damages, fines, possible exclusion from Medicare, Medicaid and other government healthcare programs, disgorgement, imprisonment, additional reporting requirements and/or oversight if we become subject to a corporate integrity agreement or similar agreement to resolve allegations of non-compliance with these laws, contractual damages, reputational harm, diminished profits and future earnings, and curtailment or restructuring of our operations, any of which could adversely affect our ability to operate our business, including interrupting or stopping clinical trials, and our results of operations.
+Added: Ensuring that our business
+Added: arrangements with third parties comply with applicable healthcare laws and regulations, including building out a compliance program, will likely be costly.
Healthcare legislative and regulatory reform discourse and potential or enacted measures may have a material adverse impact on our business and results of operations and legislative or political discussions surrounding the desire for and implementation of pricing reforms may adversely impact our business.
2 unchanged sentences
In both the United States and certain foreign jurisdictions, there have been a number of legislative and regulatory changes that could impact our ability to sell our products profitably.
−Removed: In particular, in 2010, the Patient Protection and Affordable Care Act (“ACA”) was enacted, which, among other things, subjected biologic products to potential competition by lower-cost biosimilars;
+Added: In particular, in 2010, the Patient Protection and 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;
6 unchanged sentences
presidential executive orders, Congressional inquiries, proposed and enacted federal and state legislation, and other regulatory actions designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, reform government program reimbursement methodologies for drug products, and otherwise reduce drug prices.
−Removed: For example, the Inflation Reduction Act of 2022 (“IRA”), among other things, (1) extends enhanced subsidies for individuals purchasing health insurance coverage through plan year 2025 in the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, marketplaces, (2) eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program, (3) directs HHS to negotiate the price of certain single-source drugs and biologics covered under Medicare and (4) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
−Removed: The IRA and related federal actions are likely to have a significant impact on the pharmaceutical industry.
+Added: For example, the Inflation Reduction Act of 2022 (“IRA”), among other things, (1) extends enhanced subsidies for individuals purchasing health insurance coverage through plan year 2025 in the Patient Protection and ACA marketplaces, (2) eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program, (3) directs HHS to negotiate the price of certain single-source drugs covered under Medicare that have been on the market for at least 7 years and (4) imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation.
+Added: These provisions began to take effect progressively in fiscal year 2023.
+Added: On August 15, 2024, HHS announced the agreed-upon price of the first ten drugs that were subject to price negotiations, although the Medicare Drug Price Negotiation Program is currently subject to legal challenges.
+Added: On January 17, 2025, HHS selected fifteen additional products covered under Part D for price negotiation in 2025.
+Added: Each year thereafter more Part B and Part D products will become subject to the Medicare Drug Price Negotiation Program.
+Added: Further, on December 7, 2023, an initiative to control the price of prescription drugs through the use of march-in rights under the Bayh-Dole Act was announced.
+Added: On December 8, 2023, the National Institute of Standards and Technology published for comment a Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights which for the first time includes the price of a product as one factor an agency can use when deciding to exercise march-in rights.
+Added: While march-in rights have not previously been exercised, it is uncertain if that will continue under the new framework.
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, designed to encourage importation from other countries and bulk purchasing.
−Removed: We cannot predict what healthcare reform initiatives may be adopted in the future.
+Added: We cannot predict what healthcare reform initiatives may be adopted in the future, particularly in light of the recent change in administration.
We expect that these and other healthcare reform measures that may be adopted may result in more rigorous coverage criteria and in additional downward pressure on the price that we receive for any approved product.
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Since its enactment, there have been numerous judicial, administrative, executive, and legislative challenges to certain aspects of the ACA.
−Removed: It is unclear how other healthcare reform measures of the Biden or future administrations or other efforts, if any, to amend or challenge the ACA, will impact our business.
−Removed: Other legislative changes have been proposed and adopted in the United States since the ACA was enacted.
−Removed: Additionally, there has been increasing legislative and enforcement interest in the United States with respect to specialty drug pricing practices.
−Removed: Specifically, there have been several recent U.S.
−Removed: Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under Medicare, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for drugs.
−Removed: At a federal level, President Biden signed an Executive Order on July 9, 2021 affirming the administration’s policy to (i) support legislative reforms that would lower the prices of prescription drug and biologics, including by allowing Medicare to negotiate drug prices, by imposing inflation caps, and, by supporting the development and market entry of lower-cost generic drugs and biosimilars;
−Removed: and (ii) support the enactment of a public health insurance option.
−Removed: Among other things, the Executive Order also directs the U.S.
−Removed: Department of Health and Human Services (“HHS”) to provide a report on actions to combat excessive pricing of prescription drugs, enhance the domestic drug supply chain, reduce the price that the Federal government pays for drugs, and address price gouging in the industry;
−Removed: and directs the FDA to work with states and Indian Tribes that propose to develop section 804 Importation Programs in accordance with the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and the FDA’s implementing regulations.
−Removed: The FDA released such implementing regulations on September 24, 2020, which went into effect on November 30, 2020, providing guidance for states to build and submit importation plans for drugs from Canada.
−Removed: On September 25, 2020, the HHS’s Centers for Medicare & Medicaid Services (“CMS”) stated that drugs imported by states under this rule will not be eligible for federal rebates under Section 1927 of the Social Security Act and manufacturers would not report these drugs for “best price” or Average Manufacturer Price purposes.
−Removed: Since these drugs are not considered covered outpatient drugs, CMS further stated it will not publish a National Average Drug Acquisition Cost for these drugs.
−Removed: If implemented, importation of drugs from Canada may materially and adversely affect the price we receive for any of our product candidates.
−Removed: Further, on November 20, 2020, CMS issued an Interim Final Rule implementing the Most Favored Nation, or MFN, Model under which Medicare Part B reimbursement rates would have been calculated for certain drugs and biologicals based on the lowest price drug manufacturers receive in Organization for Economic Cooperation and Development (“OECD”) countries with a similar gross domestic product per capita.
−Removed: However, the MFN rule was immediately challenged in federal courts and on August 6, 2021 CMS announced a proposed rule to rescind it.
−Removed: Additionally, on December 2, 2020, HHS published a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.
−Removed: The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.
−Removed: On November 30, 2020, HHS published a regulation removing safe harbor protection for price reductions from pharmaceutical manufacturers to plan sponsors under Part D, either directly or through pharmacy benefit managers, unless the price reduction is required by law.
−Removed: The rule also creates a new safe harbor for price reductions reflected at the point-of-sale, as well as a safe harbor for certain fixed fee arrangements between pharmacy benefit managers and manufacturers.
−Removed: In response to litigation, the Biden administration agreed to delay the effective date of the rule until January 1, 2023.
−Removed: Further, implementation of these changes and new safe harbors for point-of-sale reductions in price for prescription pharmaceutical products and pharmacy benefit manager service fees are currently under review by the Biden administration and may be amended or repealed.
−Removed: Although a number of these and other proposed measures may require authorization through additional legislation to become effective, and the Biden administration may reverse or otherwise change these measures, both the Biden administration and Congress have indicated that it will continue to seek new legislative measures to control drug costs.
−Removed: The effect of these legislative and executive activities on our business model and operations is currently unclear.
+Added: It is unclear how other healthcare reform measures of the current U.S.
+Added: federal government administration or future administrations or other efforts, if any, to amend or challenge the ACA, will impact our business.
+Added: There have been judicial and Congressional challenges and amendments to certain aspects of the ACA.
+Added: For example, on August 16, 2022, the IRA was signed into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in ACA marketplaces through plan year 2025.
+Added: The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and by creating a new manufacturer discount program.
+Added: It is possible that the ACA will be subject to judicial or Congressional challenges in the future.
+Added: It is unclear how such challenges and healthcare reform measures of the current U.S.
+Added: federal government administration will impact the ACA.
+Added: Other legislative changes have been proposed and adopted since the ACA was enacted.
+Added: These changes include aggregate reductions to Medicare payments to providers of 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013 and, due to subsequent legislative amendments to the statute, including the Infrastructure Investment and Jobs Act, will remain in effect until 2032 unless additional Congressional action is taken.
+Added: Additionally, on March 11, 2021, the American Rescue Plan Act of 2021 was signed into law, which eliminates the statutory Medicaid drug rebate cap, previously set at 100% of a drug’s average manufacturer price, for single source and innovator multiple source drugs, effective January 1, 2024.
At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing.
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European data collection is also governed by restrictive regulations governing the use, processing and cross-border transfer of personal information.
−Removed: The collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in Europe, including personal health data, is subject to the EU General Data Protection Regulation (“GDPR”), which imposes strict requirements for processing the personal data of individuals within the European Economic Area (the “EEA”), such as Norway, Iceland and Liechtenstein.
−Removed: The GDPR is directly applicable in each EU member state and is extended to the EEA.
+Added: The collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in Europe, including personal health data, is subject to the E.U.
+Added: General Data Protection Regulation (“GDPR”) and similar requirements in the United Kingdom (“UK GDPR”) (hereinafter the GDPR and UK GDPR are collectively referred to as “GDPR”), which impose strict requirements for processing the personal data of individuals within the EEA, such as Norway, Iceland, Liechtenstein and the United Kingdom.
+Added: The GDPR is directly applicable in each E.U.
+Added: member state and is extended to the EEA, while the UK GDPR applies
+Added: to the United Kingdom of Great Britain and Northern Ireland.
The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
1 unchanged sentence
Compliance with the GDPR will be a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.
−Removed: For example, the GDPR applies extraterritorially, requires us to make more detailed disclosures to data subjects, requires disclosure of the legal basis on which we can process personal data, makes it harder for us to obtain valid consent for collecting and processing personal data (including data from clinical trials), requires the appointment of data protection officers, such as when sensitive personal data, such as health data, is processed on a large scale, provides more robust rights for data subjects, including far reaching information rights and the right to erasure, introduces mandatory data breach notification through the EU, imposes additional obligations on us when contracting with service providers and requires us to adopt appropriate privacy governance, including policies, procedures, training, and data audit.
−Removed: The GDPR provides that EU member states and EEA countries may establish their own laws and regulations that go beyond the GDPR in certain areas, such as regarding the mandatory appointment of data protection officers or further limiting the processing of personal data, including genetic, biometric, or health data, which could limit our ability to use and share personal data or could cause our costs to increase.
−Removed: Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States, and the efficacy and longevity of current transfer mechanisms between the EU and the United States remains uncertain.
−Removed: For example, in 2016, the EU and the United States agreed to a transfer framework for data transferred from the EU to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the European Union (“CJEU”).
−Removed: While the CJEU upheld the adequacy of the standard contractual clauses (a standard form of contract approved by the European Commission as an adequate personal data transfer mechanism, and potential alternative to the Privacy Shield), it made clear that reliance on them alone may not necessarily be sufficient in all circumstances.
−Removed: Use of the standard contractual clauses must now be assessed on a case-by-case basis taking into account the legal regime applicable in the destination country, in particular applicable surveillance laws and rights of individuals and additional measures and/or contractual provisions may need to be put in place, however, the nature of these additional measures is currently uncertain.
−Removed: After Brexit the United Kingdom is also a third country from an EU perspective, but the EU Commission adopted adequacy decisions for the United Kingdom on June 28, 2021 largely permitting the free flow of data from the EU to the United Kingdom.
−Removed: However, for the first time, the adequacy decisions include a so-called “sunset clause” and, therefore, will automatically expire four years after their entry into force.
+Added: For example, the GDPR applies extraterritorially, requires us to make more detailed disclosures to data subjects, requires disclosure of the legal basis on which we can process personal data, makes it harder for us to obtain valid consent for collecting and processing personal data (including data from clinical trials), requires the appointment of data protection officers, such as when sensitive personal data, such as health data, is processed on a large scale, provides more robust rights for data subjects, including far reaching information rights and the right to erasure, introduces mandatory data breach notification through the E.U., imposes additional obligations on us when contracting with service providers and requires us to adopt appropriate privacy governance, including policies, procedures, training, and data audit.
+Added: The GDPR provides that E.U.
+Added: member states and EEA countries may establish their own laws and regulations that go beyond the GDPR in certain areas, such as regarding the mandatory appointment of data protection officers or further limiting the processing of personal data, including genetic, biometric, or health data, which could limit our ability to use and share personal data or could cause our costs to increase.
+Added: Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States.
+Added: In particular, the EEA and the UK have significantly restricted the transfer of personal data to the United States and other countries whose privacy laws it generally believes are inadequate.
+Added: Other jurisdictions may adopt or have already adopted similarly stringent data localization and cross-border data transfer laws.
+Added: In the ordinary course of business, we transfer personal data from Europe and other jurisdictions to the United States or other countries.
+Added: Europe and other jurisdictions have enacted laws requiring data to be localized or limiting the transfer of personal data to other countries.
+Added: Although there are currently various mechanisms that may be used to transfer personal data from the EEA and UK to the United States in compliance with law, such as the EEA standard contractual clauses, the UK’s International Data Transfer Agreement / Addendum, and the EU-U.S.
+Added: Data Privacy Framework and the UK extension thereto (which allows for transfers to relevant U.S.-based organizations who self-certify compliance and participate in the Framework), 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 United States.
+Added: If there is no lawful manner for us to transfer personal data from the EEA, the UK or other jurisdictions to the United States, 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 (such as Europe) 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.
+Added: Additionally, companies that transfer personal data out of the EEA and UK to other jurisdictions, particularly to the United States, are subject to increased scrutiny from regulators, individual litigants, and activist groups.
We cannot assure you that our third-party service providers with access to our or our customers’, suppliers’, trial patients’ and employees’ personally identifiable and other sensitive or confidential information will not breach contractual obligations imposed by us, or that they will not experience data security breaches or attempts thereof, 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, results of operations, and financial condition.
1 unchanged sentence
Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, and prospects.
−Removed: We do not have a compliance program in place consistent with Federal agencies’ guidances on corporate compliance programs.
−Removed: We have not established a formal compliance function with the independence and resources that Federal regulators would expect of established corporate compliance programs.
−Removed: We are in the process of developing policies and procedures for compliance training, auditing, and monitoring activities.
−Removed: We have not established a dedicated Chief Compliance Officer.
−Removed: Accordingly, risks associated with regulatory schemes described herein may arise undetected and unmitigated by corporate leadership.
−Removed: Furthermore, any potential enforcement action for regulatory violations might result in compliance obligations in addition to fines, penalties, or administrative actions (e.g., U.S.
−Removed: Department of Justice monitorships or U.S.
−Removed: Department of Health and Human Services, Office of Inspector General Corporate Integrity Agreements).
Risks Related to Our Business Operations, Employee Matters, and Managing Growth
−Removed: We are dependent on our key personnel and anticipate hiring new key personnel.
+Added: We are dependent on our key personnel and anticipate hiring additional key personnel.
If we are not successful in attracting and retaining qualified personnel, including consultants, we may not be able to successfully implement our business strategy.
Our ability to compete in the highly competitive biotechnology and pharmaceutical industries depends upon our ability to attract and retain qualified managerial, scientific and medical personnel.
−Removed: We are dependent on our managerial, scientific and medical personnel, including our Chief Executive Officer, Chief Operating Officer, Chief Medical Officer, Chief Financial Officer and Chief Scientific Officer.
+Added: We are dependent on our managerial, scientific and medical personnel, including our Chief Executive Officer, Chief Operating Officer, Chief Medical Officer, Chief Financial Officer and Chief Technology Officer.
If we do not succeed in attracting and retaining qualified personnel, it could materially adversely affect our business, financial condition and results of operations.
We could in the future have difficulty attracting and retaining experienced personnel and may be required to expend significant financial resources in our employee recruitment and retention efforts.
−Removed: We have relied upon and plan to continue to rely upon third parties, including consultants, to act in management roles for the Company.
+Added: We have relied upon and
+Added: plan to continue to rely upon third parties, including consultants, to act in management roles for the Company.
While we have agreements with such third parties, we do not have the same ability to influence their time commitment to the Company as we would if they were employees.
25 unchanged sentences
However, we do not have control over the timing and reporting of the data from investigator-sponsored trials, nor do we own the data from the investigator-sponsored trials.
−Removed: If we are unable to confirm or replicate the results from the investigator-sponsored trials or if negative results are obtained, we would likely be further delayed or prevented from advancing further clinical development.
+Added: If we are unable to confirm or replicate the results from the investigator-sponsored trials or if negative results are
+Added: obtained, we would likely be further delayed or prevented from advancing further clinical development.
Further, if investigators or institutions breach their obligations with respect to the clinical development of our product candidates, or if the data proves to be inadequate compared to the firsthand knowledge we might have gained had the investigator-sponsored trials been sponsored and conducted by us, then our ability to design and conduct any future clinical trials ourselves may be adversely affected.
5 unchanged sentences
Due to our limited financial resources and the limited experience of our management team in managing a company with such anticipated growth, we may not be able to effectively manage the expansion of our operations or recruit and train additional qualified personnel.
−Removed: Our internal computer systems, or those of any of our CROs, manufacturers, other contractors or consultants or potential future collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations.
−Removed: Despite the implementation of security measures in an effort to protect systems that store our information, given their size and complexity and the increasing amounts of information maintained on our internal information technology systems and those of our third-party CROs, other contractors (including sites performing our clinical trials) and consultants, these systems are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners and/or other third parties, or from cyber-attacks by malicious third parties, which may compromise our system infrastructure or lead to the loss, destruction, alteration or dissemination of, or damage to, our data.
+Added: Our internal computer systems, or those of any of the third parties with whom we work (including CROs, manufacturers, other contractors or consultants or potential future collaborators, may fail or suffer security or data privacy breaches or other unauthorized or improper access to, use of, or destruction of our proprietary or confidential data, employee data or personal data, which could result in additional costs, loss of revenue, significant liabilities, harm to our brand and material disruption of our operations.
+Added: Despite the implementation of security measures in an effort to protect systems that store our information, given their size and complexity and the increasing amounts of information maintained on our internal information technology systems and those of the third-parties with whom we work, such as CROs, other contractors (including sites performing our clinical trials) and consultants, these systems are potentially vulnerable to breakdown or other damage or interruption from service interruptions, system malfunction, natural disasters, terrorism, war and telecommunication and electrical failures, as well as security breaches from inadvertent or intentional actions by our employees, contractors, consultants, business partners and/or other third parties, or from cyber-attacks by malicious third parties (including traditional computer “hackers,” threat actors, “hacktivists,” organized criminal threat actors, sophisticated nation states, and nation-state supported actors), which may compromise our system infrastructure or lead to the loss, destruction, alteration or dissemination of, or damage to, our data.
+Added: Such cyber-attacks may include, but are not limited to, social-engineering attacks (including through deep fakes, which are increasingly more difficult to identify as fake, and phishing attacks), malicious code (such as viruses and worms), malware (including as a result of advanced persistent threat intrusions), denial-of-service attacks, credential stuffing attacks, credential harvesting, ransomware attacks, supply-chain attacks, software bugs, server malfunctions, software or hardware failures, loss of data or other information technology assets, adware, attacks enhanced or facilitated by AI, and other similar threats.
+Added: In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, ability to provide our products or services, loss of sensitive data and income, reputational harm, and diversion of funds.
+Added: Extortion payments may alleviate the negative impact of a ransomware attack, but we may be unwilling or unable to make such payments due to, for example, applicable laws or regulations prohibiting such payments.
+Added: We rely on third parties to operate critical business systems to process sensitive information in a variety of contexts.
+Added: Our ability to monitor these third parties’ information security practices is limited, and these third parties may not have adequate information security measures in place.
+Added: If the third parties with whom we work experience a security incident or other interruption, we could experience adverse consequences.
+Added: While we may be entitled to damages if the third parties with whom we work fail to satisfy their privacy or security-related obligations to us, any award may be insufficient to cover our damages, or we may be unable to recover such award.
+Added: In addition, supply-chain attacks have increased in frequency and severity, and we cannot guarantee that third parties’ infrastructure in our supply chain or that of the third parties with whom we work have not been compromised.
To the extent that any disruption or security breach were to result in a loss, destruction, unavailability, alteration or dissemination of, or damage to, our data or applications, or for it to be believed or reported that any of these occurred, we could incur liability and reputational damage and the development and commercialization of the ZB Assets could be delayed.
+Added: For example, we have been the target of unsuccessful phishing attempts in the past, and expect such attempts will continue in the future.
+Added: A security incident or other interruption could disrupt our ability (and that of third parties with whom we work) to provide our services.
+Added: Our contracts may not contain limitations of liability, and even where they do, there can be no assurance that limitations of liability in our contracts are sufficient to protect us from liabilities, damages, or claims related to our data privacy and security obligations.
Further, our insurance policies may not be adequate to compensate us for the potential losses arising from any such disruption in, or failure or security breach of, our systems or third-party systems where information important to our business operations or commercial development is stored.
+Added: 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 to undermine our competitive advantage or market position.
+Added: Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders, including affected individuals, customers, regulators, and investors, of security incidents, or to take other actions, such as providing credit monitoring and identity theft protection services.
+Added: Such disclosures and related actions can be costly, and the disclosure or the failure to comply with such applicable requirements could lead to adverse consequences.
+Added: If we (or a third party with whom we work) experience a security incident or are perceived to have experienced a security incident, we may experience material adverse consequences, such as government enforcement actions (for example, investigations, fines, penalties, audits, and inspections);
+Added: additional reporting requirements and/or oversight;
+Added: restrictions on processing sensitive information (including personal data);
+Added: litigation (including class claims);
+Added: indemnification obligations;
+Added: negative publicity;
+Added: reputational harm;
+Added: monetary fund diversions;
+Added: diversion of management attention;
+Added: interruptions in our operations (including availability of data);
+Added: financial loss;
+Added: and other similar harms.
We currently rely, and plan to rely in the future, on third parties to conduct and support our preclinical studies and clinical trials.
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We may identify material weaknesses in our internal control over financial reporting in the future or fail to maintain an effective system of internal control over financial reporting, which may result in material misstatements of our consolidated financial statements or cause us to fail to meet periodic reporting obligations.
−Removed: As a public company, Zura is required to comply with SEC rules that implement Section 404 of the Sarbanes-Oxley Act and make an ongoing, formal assessment of the effectiveness of our internal controls over financial reporting.
+Added: As a public company, we are required to comply with SEC rules that implement Section 404 of the Sarbanes-Oxley Act and make an ongoing, formal assessment of the effectiveness of our internal controls over financial reporting.
We cannot assure you that the measures we have taken to date, and actions we may take in the future, will prevent or avoid control deficiencies that could lead to material weaknesses in our internal control over financial reporting in the future.
4 unchanged sentences
We have not engaged an independent registered public accounting firm to perform an audit of our internal control over financial reporting as of any balance sheet date or for any period reported in our financial statements.
−Removed: We will be required to evaluate and disclose changes made in our internal controls and procedures on a quarterly basis.
+Added: We are required to evaluate and disclose changes made in our internal controls and procedures on a quarterly basis.
Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by the SEC, the applicable stock exchange or other regulatory authorities, which would require additional financial and management resources.
1 unchanged sentence
As a public company, we are required to comply with the requirements of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, including, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
−Removed: We continue to develop and refine our disclosure controls and other procedures that are designed to ensure that information we are required to disclose in the reports that we will file with the SEC are recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Securities Exchange Act of 1934, as amended, or the Exchange Act, is accumulated and communicated to our management, including our principal executive and financial officers.
−Removed: We must continue to improve our internal control over financial reporting.
−Removed: We are currently required to make a formal assessment of the effectiveness of our internal control over financial reporting.
−Removed: To achieve compliance with these requirements within the prescribed time period, we will be engaging in a process to document and evaluate our internal control over financial reporting, which is both costly and challenging.
−Removed: In this regard, we will need to continue to dedicate internal resources, potentially engage outside consultants and adopt a detailed work plan to assess and document the adequacy of our internal control over financial reporting, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting.
−Removed: There is a risk that we will not be able to conclude, within the prescribed time period or at all, that our internal control over financial reporting is effective as required by Section 404 of the Sarbanes-Oxley Act.
+Added: We continue to develop and refine our disclosure controls and other procedures that are designed to ensure that information we are required to disclose in the reports that we will file with the SEC are recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the Exchange Act, is accumulated and communicated to our management, including our principal executive and financial officers.
+Added: In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including dedicated to internal resources.
+Added: We may also need to engage outside consultants and adopt a detailed work plan to assess and document the adequacy of our internal control over financial reporting.
+Added: If any of these new or improved controls and systems do not perform as expected, we may experience material weaknesses in our controls.
Moreover, our testing, or the subsequent testing by our independent registered public accounting firm, may reveal additional deficiencies in our internal control over financial reporting that are deemed to be material weaknesses.
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This scrutiny can result in new and shifting interpretations of existing laws, thereby further impacting our business.
−Removed: For example, the General Data Protection Regulation (“GDPR”) in the European Economic Area, and the United Kingdom continues to be interpreted by European and UK courts in novel ways leading to shifting requirements, country specific differences in application and uncertain enforcement priorities.
−Removed: More recently enacted laws, such as the Personal Information Protection Law in China, and new and emerging state laws in the United States on privacy, data and related technologies, such as the California Consumer Privacy Act, the California Privacy Rights Act, the Colorado Privacy Act and the Virginia Consumer Data Protection Act, as well as industry self-regulatory codes and regulatory requirements, create new privacy and security compliance obligations and expand the scope of potential liability, either jointly or severally with our customers and suppliers.
+Added: For example, the GDPR in the European Economic Area, and the United Kingdom continues to be interpreted by European and U.K.
+Added: courts in novel ways leading to shifting requirements, country specific differences in application and uncertain enforcement priorities.
+Added: Under the GDPR, companies face temporary or definitive bans on data processing and other corrective actions;
+Added: fines of up to 20 million Euros under the EU GDPR, 17.5 million pounds sterling under the UK GDPR or, in each case, 4% of annual global revenue, whichever is greater;
+Added: or private litigation related to processing of personal data brought by classes of data subjects or consumer protection organizations authorized at law to represent their interests.
+Added: More recently enacted laws globally, and new and emerging state laws in the United States on privacy, data and related technologies, such as the California Consumer Privacy Act (“CCPA”), the California Privacy Rights Act, the Colorado Privacy Act and the Virginia Consumer Data Protection Act, as well as industry self-regulatory codes and regulatory requirements, create new privacy and security compliance obligations and expand the scope of potential liability, either jointly or severally with our customers and suppliers.
+Added: For example, the CCPA applies to personal data of consumers, business representatives, and employees who are California residents, and requires businesses to provide specific disclosures in privacy notices and honor requests of such individuals to exercise certain privacy rights.
+Added: The CCPA provides for fines and allows private litigants affected by certain data breaches to recover significant statutory damages.
As a security example, pursuant to the U.S.
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Determining whether a cybersecurity incident is notifiable or reportable may not be straightforward and any such mandatory disclosures could be costly and lead to negative publicity, loss of customer confidence in the effectiveness of our security measures, diversion of management’s attention and governmental investigations.
−Removed: While we have invested in readiness to comply with applicable requirements, the dynamic and evolving nature of these laws, regulations and codes, as well as their interpretation by regulators and courts, may affect our ability to implement our business models effectively and to adequately address disclosure requirements.
+Added: We publish privacy policies and other statements, such as statements related to compliance with certain certifications or self-regulatory principles, concerning data privacy, and security.
+Added: Regulators in the United States are increasingly scrutinizing these statements, and if these policies, materials or statements are found to be deficient, lacking in transparency, deceptive, unfair, misleading, or misrepresentative of our practices, we may be subject to investigation, enforcement actions by regulators or other adverse consequences.
+Added: While we made certain investments in readiness to comply with applicable requirements, the dynamic and evolving nature of these laws, regulations and codes, as well as their interpretation by regulators and courts, may affect our ability to implement our business models effectively and to adequately address disclosure requirements.
These laws, regulations and codes may also impact our innovation and business drivers and may force us to bear the burden of more obligations.
−Removed: Perception of our practices, products, services or solutions, even if unfounded, as a violation of individual privacy, data protection rights or cybersecurity requirements, subjects us to public criticism, lawsuits, investigations, claims and other proceedings by regulators, industry groups or other third parties, all of which could disrupt or adversely impact our business and reputation and expose us to increased liability, fines and other punitive measures including prohibition on sales of our products, services or solutions, restrictive judicial orders and disgorgement of data.
+Added: Perception of our practices, products, services or solutions, even if unfounded, as a violation of individual privacy, data protection rights or cybersecurity requirements, subjects us to public criticism, lawsuits (including class-action claims), government enforcement actions (e.g., fines, penalties, audits, inspections, investigations, audits), additional reporting requirements and/or oversight, bans or restrictions on processing personal data (including clinical trial data), orders to destroy or not use personal data (including clinical trial data), claims and other proceedings by regulators, industry groups or other third parties, all of which could disrupt or adversely impact our business and reputation and expose us to increased liability, fines and other punitive measures including interruptions or stoppages in our business operations (including clinical trials), inability to process personal data in certain jurisdictions, prohibition on sales of our products, services or solutions, restrictive judicial orders and disgorgement of data.
We face substantial competition, which may result in others discovering, developing, licensing or commercializing products before or more successfully than we do.
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delays or difficulties in enrolling patients in, initiating or expanding our clinical trials, including delays or difficulties with clinical site initiation and recruiting clinical site investigators and clinical site staff;
−Removed: increased rates of patients withdrawing from our clinical trials following enrollment as a result of contracting COVID-19 or other health conditions or being forced to quarantine;
+Added: increased rates of patients withdrawing from our clinical trials following enrollment as a result of contracting health conditions or being forced to quarantine;
interruption of key clinical trial activities, such as clinical trial site data monitoring and efficacy, safety and translational data collection, processing and analyses, due to limitations on travel imposed;
recommendations by federal, state or local governments, employers and others or interruptions of clinical trial subject visits, which may impact the collection and integrity of subject data and clinical trial endpoints;
−Removed: diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our clinical trials;
+Added: diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of our
+Added: clinical trials;
delays or disruptions in preclinical experiments and IND-enabling studies due to restrictions of on-site staff and unforeseen circumstances at CROs and vendors;
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legislation or investigations, including the proposed BIOSECURE Act, sanctions, trade restrictions, and other foreign regulatory requirements, which could increase the cost or reduce the supply of material available to us, delay the procurement or supply of such material, delay or impact clinical trials, and could adversely affect our financial condition and business prospects.
−Removed: We currently rely on WuXi Biologics (Shanghai) as the sole supplier of torudokimab.
−Removed: Accordingly, there is a risk that supplies of torudokimab may be significantly delayed by, or may become unavailable as a result of manufacturing, equipment, process, regulatory, or business-related issues affecting that company.
−Removed: We may also face additional manufacturing and supply-chain risks due to the regulatory and political structure of the PRC, or as a result of the international relationship with the PRC, including but not limited to potential sanctions imposed by the U.S.
+Added: For example, the current U.S.
+Added: federal government administration has recently proposed tariffs on certain U.S.
+Added: imports, and China and other countries have responded with and/or threatened retaliatory tariffs on certain U.S.
+Added: We cannot predict what effects these tariffs and potential additional tariffs will have on our business, including in the context of escalating trade tensions.
+Added: However, these tariffs and other trade restrictions could increase our operating costs, reduce our gross margins or otherwise negatively impact our financial results.
+Added: WuXi Biologics (WuXi, PRC) has historically been our sole supplier of torudokimab.
+Added: We have moved our existing product from WuXi to the U.K.
+Added: When we require additional product, we may find a new manufacturing facility for torudokimab.
+Added: There is a risk that supplies of torudokimab may be significantly delayed by, or may become unavailable as a result of finding a new manufacturer or business-related issues affecting WuXi Biologics, including manufacturing, equipment, process or regulatory issues.
+Added: If we continue to have product manufactured at WuXi Biologics, we may also face additional manufacturing and supply-chain risks due to the regulatory and political structure of the PRC, or as a result of the international relationship with the PRC, including but not limited to sanctions and tariffs imposed by the U.S.
government on WuXi.
−Removed: Although currently there has been no impact on our ability to obtain supply of torudokimab, and we are developing risk mitigation plans to strengthen our supply chain by moving certain activities outside of WuXi Biologics’ Chinese facilities, there can be no assurance that operations would not be impacted in the future with a negative impact on the supply of, or use of, torudokimab.
+Added: Although currently there has been no impact on our ability to obtain supply of torudokimab, there can be no assurance that operations would not be impacted in the future with a negative impact on the supply of, or use of, torudokimab.
Risks Related to Ownership of Our Class A Ordinary Shares
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Further, the equity markets in general have recently experienced extreme price and volume fluctuations.
−Removed: Continued market fluctuations could result in extreme volatility in the price of Zura Class A Ordinary Shares, which could cause a decline in the value of our ordinary shares.
−Removed: Price volatility of Zura Class A Ordinary Shares might worsen if the trading volume oftsour ordinary shares is low.
+Added: Continued market fluctuations could result in extreme volatility in the price of Zura Class A Ordinary Shares, which could cause a decline in the value of Zura Class A Ordinary Shares.
+Added: Price volatility of Zura Class A Ordinary Shares might worsen if the trading volume of Zura Class A Ordinary Shares is low.
In the past, shareholders have initiated class action lawsuits against pharmaceutical and biotechnology companies following periods of volatility in the market prices of these companies’ share.
−Removed: Such litigation, if instituted against Zura, could cause it to incur substantial costs and divert management’s attention and resources fromour business.
+Added: Such litigation, if instituted against Zura, could cause it to incur substantial costs and divert management’s attention and resources from our business.
The realization of any of the above risks or any of a broad range of other risks, including those described in these “Risk Factors,” could have a dramatic and material adverse impact on the market price of Zura Class A Ordinary Shares.
−Removed: We have not paid cash dividends in the past and we does not expect to pay cash dividends in the foreseeable future.
−Removed: Any return on investment may be limited to the capital appreciation, if any, of Zura Class A Ordinary Share.
−Removed: We have not paid cash dividends on our ordinary shares and we does not anticipate paying cash dividends on our ordinary shares in the foreseeable future.
−Removed: The payment of dividends on our capital shares will depend on our earnings, financial condition and other business and economic factors affecting us at such time as the board of directors may consider relevant.
−Removed: Since we do not intend to pay dividends, a shareholder’s ability to receive a return on such shareholder’s investment will depend on any future appreciation in the market value of our ordinary shares.
+Added: We have not paid cash dividends in the past and we do not expect to pay cash dividends in the foreseeable future.
+Added: Any return on investment may be limited to the capital appreciation, if any, of Zura Class A Ordinary Shares.
+Added: We have not paid cash dividends on our Class A Ordinary Shares and we do not anticipate paying cash dividends on our Class A Ordinary Shares in the foreseeable future.
+Added: The payment of dividends on our shares will depend on our ability to comply with relevant legal requirements as well as our earnings, financial condition and other business and economic factors affecting us at such time as the Zura Board may consider relevant.
+Added: Since we do not intend to pay dividends, a shareholder’s ability to receive a return on such shareholder’s investment will depend on any future appreciation in the market value of our Class A Ordinary Shares.
There is no guarantee that Zura Class A Ordinary Shares will appreciate or even maintain the price at which our shareholders have purchased it.
−Removed: Future sales of a substantial number of Zura Class A Ordinary Shares may cause the price of our ordinary shares to decline.
−Removed: If our existing shareholders sell, or indicate an intention to sell, substantial amounts of the Zura Class A Ordinary Shares, the trading price of the Zura Class A Ordinary Shares could decline and it could impair our ability to raise capital through the sale of additional equity securities.
−Removed: The Zura shareholders and certain directors and equity holders of JATT, including the Sponsor, are subject to lock-up provisions that restrict their ability to transfer Zura Class A Ordinary Shares or any security convertible into or exercisable or exchanged for Zura Class A Ordinary Shares until 6 months, 12 months and 24 months, as applicable, from the Effective Time, subject to certain exceptions.
−Removed: Sales and issuances of our Class A Ordinary Shares and future exercise of warrants or registration rights, could result in additional dilution of the percentage ownership of our shareholders and could cause our share price to fall.
−Removed: If we sell our Class A Ordinary Shares, convertible securities or other equity securities, investors may be materially diluted by subsequent sales.
−Removed: Such sales may also result in material dilution to our existing shareholders, and new investors could gain rights, preferences, and privileges senior to existing holders of our Class A Ordinary Shares.
−Removed: Sales of a substantial number of shares of our Class A Ordinary Shares in the public market, including the resale of the Class A Ordinary Shares held by our shareholders, could occur at any time.
+Added: Future sales and/or issuances of our securities could result in additional dilution of the percentage ownership of our existing shareholders and could cause our share price to fall.
+Added: If we or any of our existing shareholders sell our Class A Ordinary Shares, convertible securities or other equity securities, investors may be materially diluted by subsequent sales.
+Added: Such sales may also result in material dilution to our existing shareholders, and new investors could gain rights, preferences, and privileges senior to existing holders of our securities.
+Added: Sales of a substantial number of our Class A Ordinary Shares in the public market, including the resale of the Class A Ordinary Shares held by our shareholders, could occur at any time.
These sales, or the perception in the market that the holders of a large number of Class A Ordinary Shares intend to sell shares, could reduce the market price of our Class A Ordinary Shares.
−Removed: Of the 43,593,678 Class A Ordinary Shares outstanding as of March 26, 2024, an aggregate of 4,162,969 shares are currently subject to various restrictions on transfer until March 20, 2025.
−Removed: These shares will become eligible for public sale on March 21, 2025.
−Removed: Pursuant to our Amended and Restated Registration and Stockholder Rights Agreement, dated March 20, 2023, by and among us and the shareholders party thereto (the “Registration Rights Agreement”), certain shareholders are entitled to have a registration statement kept effective for a prolonged period of time such that registered resales of their Class A Ordinary Shares can be made.
−Removed: Pursuant to our obligations under the Registration Rights Agreement, we have filed a registration statement, which the SEC declared effective on September 14, 2023, to include 30,251,124 Class A Ordinary Shares, 5,910,000 warrants to purchase our Class A Ordinary Shares, and 16,591,996 Class A Ordinary Shares issuable upon exercise of warrants.
−Removed: After it is effective and until such time that it is no longer effective, the registration statement registering such securities will permit the resale of these shares.
+Added: Pursuant to our Amended and Restated Registration and Shareholder Rights Agreement, dated March 20, 2023, by and among us and the shareholders party thereto (the “A & R Registration
+Added: Rights Agreement”), certain shareholders are entitled to have a registration statement kept effective for a prolonged period of time such that registered resales of their Class A Ordinary Shares can be made.
+Added: Pursuant to our obligations under the A&R Registration Rights Agreement, we filed a resale shelf registration statement, which the SEC declared effective on September 14, 2023, as amended (the “Resale Registration Statement”), covering the resale of up to an aggregate of 21,248,364 Class A Ordinary Shares, 3,782,000 2023 Pre-Funded Warrants (as defined herein) and 3,782,000 Class A Ordinary Shares issuable upon the exercise of the 2023 Pre-Funded Warrants.
+Added: Until such time that it is no longer effective, the Resale Registration Statement permits the resale of these shares for a significant period of time, the precise duration of which cannot be predicted.
The resale, or expected or potential resale, of a substantial number of shares of our Class A Ordinary Shares in the public market could adversely affect the market price for our Class A Ordinary Shares and make it more difficult for you to sell your holdings at times and prices that you determine are appropriate.
−Removed: Furthermore, we expect that, because there is a large number of shares being registered pursuant to the registration statement initially filed with the SEC on June 14, 2023 and declared effective on September 14, 2023, the Selling Securityholders thereunder will continue to offer the securities covered thereby for a significant period of time, the precise duration of which cannot be predicted.
Accordingly, the adverse market and price pressures resulting from an offering pursuant to the registration statement may continue for an extended period of time.
−Removed: In addition, our Class A Ordinary Shares is also subject to potential dilution from the exercise of warrants and stock options, the issuance of Class A Ordinary Shares pursuant to the vesting of restricted stock units, and issuance of Class A Ordinary Shares in connection with future equity and or convertible debt financings.
−Removed: Sales of substantial numbers of such shares in the public market, including the resale of the Class A Ordinary Shares held by our shareholders, could adversely affect the market price of our Class A Ordinary Shares, the impact of which is increased as the value of our stock price increases.
+Added: In addition, we currently have on file with the SEC a shelf registration statement on Form S-3 which allows us to offer and sell our ordinary shares, preference shares, debt securities, warrants and or units from time to time pursuant to one or more offerings at prices and terms to be determined at the time of sale.
+Added: In September 2024, we entered into a Sales Agreement (the “Sales Agreement”) with Leerink Partners (“Leerink”), pursuant to which, from time to time, we may offer and sell through Leerink up to $125.0 million of Zura Class A Ordinary Shares registered under the shelf registration statement pursuant to one or more “at the market” offerings.
+Added: From time to time, we have issued and sold Zura Class A Ordinary Shares pursuant to this agreement and as of the date of this filing, we have $114.0 million of Zura Class A Ordinary Shares remaining available for sale under the Sales Agreement.
+Added: Sales of Zura Class A Ordinary Shares under the Sales Agreement with Leerink could be subject to business, economic or competitive uncertainties and contingencies, many of which may be beyond our control, and which could cause actual results from the sale of Zura Class A Ordinary Shares to differ materially from expectations.
+Added: To the extent additional capital is raised through the sale and issuance of shares or other securities convertible into shares, the ownership interest of our shareholders will be diluted.
+Added: Future issuances of Zura Class A Ordinary Shares or other equity securities, or the perception that such sales may occur, could adversely affect the trading price of Zura Class A Ordinary Shares and impair our ability to raise capital through future offerings of shares or equity securities.
+Added: No prediction can be made as to the effect, if any, that future sales of Zura Class A Ordinary Shares or the availability of Zura Class A Ordinary Shares for future sales will have on the trading price of our shares.
If certain holders of our Class A Ordinary Shares sell a significant portion of their securities, it may negatively impact the market price of the shares of our Class A Ordinary Shares and such holders still may receive significant proceeds.
−Removed: As of the date of this annual report on Form 10-K, the market price of our Class A Ordinary Shares is below $10.00 per share, which was the price per unit sold in the initial public offering of our predecessor, JATT, and the per-share price of the 2,009,950 JATT Class A Ordinary Shares it sold to certain investors in connection with our Business Combination in a private placement for an aggregate amount of $20,099,500 (the “PIPE Financing”).
+Added: As of the date of this Annual Report, the market price of our Class A Ordinary Shares is below $10.00 per share, which was the price per unit sold in the initial public offering of our predecessor, JATT, and the per-share price of the 2,009,950 JATT Class A Ordinary Shares it sold to certain investors in connection with our Business Combination in a private placement for an aggregate amount of $20,099,500 (the “PIPE Financing”).
However, certain of our shareholders who hold shares of our Class A Ordinary Shares that were (i) originally purchased by JATT’s sponsor, JATT Ventures, L.P, in a private placement prior to JATT’s initial public offering at an effective purchase price of $0.007 per share (the “Founder Shares”) or (ii) originally issued by JATT in a private placement in connection with certain forward purchase agreement and backstop arrangement (the “FPA Shares”) between JATT and certain investors at an effective purchase price of $6.32, may nonetheless be inclined to sell such Founder Shares or FPA Shares as they were originally purchased at an effective price significantly less than $10.00 per share.
The currently outstanding 3,450,000 Founder Shares were purchased at an effective price of $0.007 per share.
−Removed: Holders of the FPA Shares obtained (i) an aggregate of 3,000,000 Class A Ordinary Shares at purchase price of $10 per share for $30,000,000;
+Added: Holders of the FPA Shares obtained (i) an aggregate of 3,000,000 Class A Ordinary Shares at a purchase price of $10.00 per share for $30,000,000;
an aggregate of 1,301,633 Class A Ordinary Shares at purchase price of $10.00 per share for $13,016,330 as public share redemptions were greater than 90% at the time of the Business Combination (backstop redemption);
3 unchanged sentences
The Founder Shares are currently subject to restrictions on transfer under applicable lock-up agreements;
−Removed: however, these restrictions are due to expire on March 20, 2025, resulting in these shares becoming eligible for public sale on March 21, 2025, if they are registered under the Securities Act, or if they qualify for an exemption from registration under the Securities Act.
−Removed: Pursuant to our Registration Rights Agreement, certain of our stockholders, including holders of the Founder Shares, were entitled to registration rights with the securities being registered pursuant to the registration statement initially filed with the SEC on June 14, 2023 and declared effective on September 14, 2023.
−Removed: Our operating results may fluctuate significantly.
+Added: however, these restrictions are due to expire on March 20, 2025, resulting in these shares becoming eligible for public sale on March 21, 2025 pursuant to the Resale Registration Statement, if then in effect, or if they qualify for an exemption from registration under the Securities Act.
+Added: Our operating results have and may continue to fluctuate significantly.
We expect our operating results to be subject to quarterly, and possibly annual, fluctuations.
19 unchanged sentences
The issuance of additional equity securities will dilute the holdings of existing shareholders and may reduce the share price of Zura Class A Ordinary Shares.
−Removed: Pursuant to the Equity Incentive Plan, which became effective the day prior to the Closing, we are authorized to grant equity awards to our employees, directors and consultants.
−Removed: In addition, pursuant to the ESPP, which will become effective the day prior to the Closing, We are authorized to sell shares to our employees.
−Removed: A total of 9,594,213 and 4,029,898 Zura Class A Ordinary Shares have been reserved for future issuance under the Equity Incentive Plan and the ESPP, respectively.
−Removed: In addition, the Equity Incentive Plan provides for annual automatic increases in the number of shares reserved thereunder, beginning on January 1, 2024.
+Added: Pursuant to the EIP, which became effective the day prior to the Closing, we are authorized to grant equity awards to our employees, directors and consultants.
+Added: In addition, pursuant to the 2023 Employee Stock Purchase Plan (“ESPP”), which became effective the day prior to the Closing, we are authorized to sell shares to our employees.
+Added: As of December 31, 2024, a total of 9,594,213 and 4,029,898 Zura Class A Ordinary Shares have been reserved for future issuance under the EIP and the ESPP, respectively.
+Added: In addition, the EIP and ESPP provide for annual automatic increases in the number of shares reserved thereunder on January 1 st of each year, unless our board of directors, or the appropriate committee thereof, elects not to increase the number of shares underlying the EIP and ESPP each year.
+Added: Accordingly, on January 1, 2025, the shares reserved for future issuances under each of the EIP and ESPP were increased by 3,264,877 shares.
As a result of such annual increases, our shareholders may experience additional dilution, which could cause the price of Zura Class A Ordinary Shares to fall.
1 unchanged sentence
If adequate funds are not available, our ability to achieve profitability or to respond to competitive pressures would be significantly limited and we may be required to delay, significantly curtail or eliminate the development of the product candidates.
−Removed: Our principal shareholders, directors and executive officers own a significant percentage of our capital shares, and have significant influence over our management.
−Removed: Our directors, executive officers, holders of 5% or more of our capital shares and their respective affiliates beneficially own, in the aggregate, approximately 99.4% of our issued and outstanding voting shares.
−Removed: This concentration of voting power may make it less likely that any other holder of Zura Class A Ordinary Shares will be able to affect the way we are managed and could delay or prevent an acquisition on terms that other shareholders may desire.
−Removed: This could prevent transactions in which shareholders might otherwise recover a premium for their shares over current market prices.
−Removed: See above for additional information regarding our influence and control.
−Removed: See “ Security Ownership of Certain Principal Shareholders ” for information regarding the ownership of our outstanding shares by our directors, executive officers, and current beneficial owners of 5% or more of our voting securities and their respective affiliates.
−Removed: If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our operating results could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our ordinary shares.
+Added: If our estimates or judgments relating to our critical accounting policies are based on assumptions that change or prove to be incorrect, our operating results could fall below our publicly announced guidance or the expectations of securities analysts and investors, resulting in a decline in the market price of our Class A Ordinary Shares.
The preparation of financial statements in conformity with U.S.
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Among other things, these provisions:
−Removed: ● allow the Zura Board to authorize the issuance of undesignated preference shares, the terms of which may be established and the shares of which may be issued without shareholder approval, and which may include supermajority voting, special approval, dividend, or other rights or preferences superior to the rights of other shareholders;
−Removed: ● provide that directors may only be removed (a) for cause by the vote of a majority of the other directors then in office or (b) by the affirmative vote of holders of at least 66 2 ∕ 3 % in voting power of all the then-outstanding Zura Class A Ordinary Shares entitled to vote thereon, voting together as a single class;
+Added: ● allow the Zura Board to authorize the issuance of preference shares, the terms of which may be established and the shares of which may be issued without shareholder approval, and which may include such preferred, deferred or other rights or restrictions, whether in regard to voting, dividends or other distributions, return of capital or other rights;
+Added: ● provide that directors may only be removed (a) for cause by the vote of a majority of the other directors then in office or (b) by the affirmative vote of holders of at least two-thirds of the total voting power of all the then-outstanding Zura Class A Ordinary Shares entitled to vote thereon, voting together as a single class;
● prohibit shareholder action by written resolution;
● provide that extraordinary general meetings may only be called by or at the direction of (a) the Chairman of the Zura Board, the Zura Board or the Chief Executive Officer or (b) members holding not less than 10% in par value of the issued shares which as at the date of the requisition for a meeting carry the right to vote at general meetings;
−Removed: ● provide that any alteration, amendment or repeal, in whole or in part, of any provision of the MAA by our shareholders will require the affirmative vote of the holders of at least 66 2∕3 % in voting power of all the then-outstanding shares of the Zura Class A Ordinary Shares entitled to vote thereon, voting together as a single class;
−Removed: ● establish advance notice requirements for nominations for elections to the Zura Board and for proposing matters that can be acted upon by shareholders at shareholder meetings.
+Added: ● provide that any alteration, amendment or repeal, in whole or in part, of any provision of the MAA by our shareholders will require the affirmative vote of the holders of at least two-thirds of the total voting power of all the then-outstanding shares of the Zura Class A Ordinary Shares entitled to vote thereon, voting together as a single class;
+Added: ● establish advance notice requirements for appointment of directors to the Zura Board and for proposing matters that can be acted upon by shareholders at general meetings.
These anti-takeover provisions and other provisions in the MAA and Cayman Islands law could make it more difficult for shareholders or potential acquirors to obtain control of the Zura Board or initiate actions that are opposed by our then-current board of directors and could also delay or impede a merger, tender offer or proxy contest involving us.
The existence of these provisions could negatively affect the price of our Class A Ordinary Shares and limit opportunities for a shareholder to realize value in a corporate transaction.
−Removed: For information regarding these and other provisions, see the section titled “ Description of Zura Securities.
In addition, if prospective takeovers are not consummated for any reason, we may experience negative reactions from the financial markets, including negative impacts on the price of our Class A Ordinary Shares.
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(ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers or other employees to us or our shareholders;
−Removed: (iii) any action asserting a claim against arising pursuant to any provision of the Cayman Islands Companies Act, or the MAA;
+Added: (iii) any action asserting a claim arising pursuant to any provision of the Cayman Islands Companies Act, or the MAA;
(iv) any action asserting a claim against us governed by the “internal affairs doctrine,” (as such concept is recognized under the laws of the United States of America);
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If the enforceability of our forum selection provisions were to be challenged, it may incur additional costs associated with resolving such challenge.
−Removed: While we currently has no basis to expect any such challenge would be successful, if a court were to find its forum selection provisions to be inapplicable or unenforceable with respect to one or more of these specified types of actions or proceedings, we may incur additional costs associated with having to litigate in other jurisdictions, which could result in a diversion of the time and resources of our employees, management and board of directors, and could have an adverse effect on our business, financial condition and results of operations.
−Removed: We are an emerging growth company, and it cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our ordinary shares less attractive to investors.
+Added: While we currently has no basis to expect any such challenge would be successful, if a court were to find its forum selection provisions to be inapplicable or unenforceable with respect to one or more of these specified types of actions or proceedings, we may incur additional costs associated with having to litigate in other jurisdictions, which could result in a diversion of the time and resources of our employees, management and Zura Board, and could have an adverse effect on our business, financial condition and results of operations.
+Added: We are an emerging growth company, and it cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make our securities less attractive to investors.
We are an emerging growth company, as defined in the JOBS Act.
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Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
−Removed: We will incur increased costs as a result of operating as a public company, and our management will devote substantial time to related compliance initiatives.
−Removed: As a public company, we will incur significant legal, accounting and other expenses that Legacy Zura did not incur as a private company, and these expenses may increase even more after it is no longer an “emerging growth company.” we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), as well as rules and regulations adopted, and to be adopted, by the SEC and Nasdaq.
−Removed: Our management and other personnel will need to devote a substantial amount of time to these compliance initiatives.
+Added: We have and will continue to incur increased costs as a result of operating as a public company, and our management will devote substantial time to related compliance initiatives.
+Added: As a public company, we have and will continue to incur significant legal, accounting and other expenses that Legacy Zura did not incur as a private company, and these expenses may increase even more after it is no longer an “emerging growth company.” we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), as well as rules and regulations adopted, and to be adopted, by the SEC and Nasdaq.
+Added: Our management and other personnel will need to continue to devote a substantial amount of time to these compliance initiatives.
Moreover, we expect these rules and regulations to substantially increase legal and financial compliance costs and to make some activities more time-consuming and costly, which will increase operating expenses.
20 unchanged sentences
If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and there could be a material adverse effect on our business, financial condition and results of operations.
−Removed: Our failure to meet Nasdaq’s continued listing requirements could result in a delisting of ordinary shares.
−Removed: In order to continue to maintain the listing of our securities on Nasdaq, we will be required to demonstrate ongoing compliance with Nasdaq’s continued listing requirements.
+Added: A failure to meet Nasdaq’s continued listing requirements could result in a delisting of ordinary shares.
+Added: In order to continue to maintain the listing of our securities on Nasdaq, we are required to demonstrate ongoing compliance with Nasdaq’s continued listing requirements.
If we fail to satisfy Nasdaq’s continued listing requirements, such as the minimum number of round-lot shareholders, the minimum dollar value of the public float, the total minimum capital, the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may or take steps to delist Zura Class A Ordinary Shares.
1 unchanged sentence
In the event of a delisting, we can provide no assurance that any action taken to restore compliance with listing requirements would allow our ordinary shares to become listed again, stabilize the market price or improve the liquidity of our ordinary shares, prevent our ordinary shares from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing requirements.
−Removed: The Warrants may never be in the money, they may expire worthless and therefore we may not receive cash proceeds from the exercise of warrants.
−Removed: The terms of the Warrants may be amended in a manner adverse to a holder if holders of a majority of the then-outstanding Warrants approve of such amendment.
−Removed: The Warrants were issued in registered form under the Warrant Agreement between Continental, as warrant agent, and JATT.
−Removed: The Warrant Agreement provides that the terms of the Warrants may be amended without the consent of any holder to cure any ambiguity or correct any defective provision or correct any mistake, but requires the approval by the holders of a majority of the then-outstanding Warrants to make any change that adversely affects the interests of the registered holders of Warrants.
−Removed: Accordingly, we may amend the terms of the Warrants in a manner adverse to a holder if holders of a majority of the then- outstanding Warrants approve of such amendment.
−Removed: Although our ability to amend the terms of the Warrants with the consent of majority of the then-outstanding Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the exercise price of the Warrants, convert the Warrants into cash, shorten the exercise period, or decrease the number of Zura Class A Ordinary Shares purchasable upon exercise of a Warrant.
−Removed: The exercise of the Warrants, and any proceeds we may receive from their exercise, are highly dependent on the price of our Class A Ordinary Shares and the spread between the exercise price of the Warrant and the price of our Class A Ordinary Shares at the time of exercise.
−Removed: For example, to the extent that the price of our Class A Ordinary Shares exceeds $11.50 per share, it is more likely that holders of our Public Warrants and Private Placement Warrants will exercise their warrants.
−Removed: If the price of our Class A Ordinary Shares is less than $11.50 per share, it is unlikely that such holders will exercise their warrants.
−Removed: As of March 26, 2024, the closing price of our Class A Ordinary Shares was $2.26 per share.
−Removed: There can be no assurance that all of our Warrants will be in the money prior to their expiration.
−Removed: Our Public Warrants under certain conditions, as described in the warrant agreement, are redeemable by the Company at a price of $0.01 per warrant or on a cashless basis.
−Removed: Our Private Placement Warrants are not redeemable so long as they are held by the initial stockholders or permitted transferees and are exercisable on a cashless basis.
−Removed: Our Pre-Funded Warrants are not redeemable and are exercisable on a cashless basis.
−Removed: As such, it is possible that we may never generate any cash proceeds from the exercise of our Warrants.
−Removed: Accordingly, as of the date of this annual report on Form 10-K, we have neither included nor intend to include any potential cash proceeds from the exercise of our Warrants in our short-term or long-term liquidity projections.
−Removed: We will continue evaluate the probability of warrant exercise over the life of our Warrants and the merit of including potential cash proceeds from the exercise thereof in our liquidity projections.
−Removed: Nevertheless, we believe our existing cash and cash equivalents will be sufficient to fund our operations for at least the next 12 months from the date of this annual report.
−Removed: However, our liquidity assumptions may prove to be incorrect, and we could utilize our available financial resources sooner than we currently expect.
−Removed: Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth under “Risk Factors” elsewhere in this annual report.
−Removed: We may redeem any unexpired Warrants prior to their exercise at a time that is disadvantageous to you, thereby making the Warrants worthless.
−Removed: We have the ability to redeem outstanding Warrants of legacy JATT at any time after they become exercisable and prior to their expiration, at a price of $0.01 per Warrant, provided that the closing price of Zura Class A Ordinary Shares equals or exceeds $18.00 per share (as adjusted for share subdivisions, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and the like) on each of 20 trading days within any 30-trading-day period commencing after the Warrants become exercisable and ending on the third trading day prior to the date on which notice of redemption is given.
−Removed: If and when the Warrants become redeemable by Zura, We may exercise our redemption right even if we are unable to register or qualify the underlying securities for sale under all applicable state securities laws.
−Removed: Redemption of the outstanding Warrants could force the holders thereof to:
−Removed: (i) exercise such Warrants and pay the exercise price therefor at a time when it may be disadvantageous for a holder to do so;
−Removed: (ii) sell such Warrants at the then-current market price when a holder might otherwise wish to hold such Warrants;
−Removed: or (iii) accept the nominal redemption price that, at the time the outstanding Warrants are called for redemption, is likely to be substantially less than the market value of such Warrants.
−Removed: In addition, we may redeem the Warrants at any time after they become exercisable and prior to their expiration for a number of Zura Class A Ordinary Shares determined based on the fair market value of Zura Class A Ordinary Share.
−Removed: The value received upon exercise of the Warrants (1) may be less than the value the holders would have received if they had exercised their Warrants at a later time where the underlying share price is higher and (2) may not compensate the holders for the value of the Warrants.
+Added: We believe that we were a PFIC for U.S.
+Added: federal income tax purposes for the taxable year ended December 31, 2024, which could result in adverse U.S.
+Added: federal income tax consequences to U.S.
+Added: If the Company is treated as a PFIC within the meaning of Section 1297 of the Code for any taxable year (or portion thereof) during which a U.S.
+Added: Holder (as defined below) holds our Class A Ordinary Shares (regardless of whether the Company remains a PFIC for subsequent taxable years), certain adverse U.S.
+Added: federal income tax consequences, such as taxation at the highest marginal ordinary income tax rates on capital gains and on certain actual or deemed distributions, and interest charges on certain taxes treated as deferred, may apply to such U.S.
+Added: Holder and such U.S.
+Added: Holder might be subject to additional reporting requirements.
+Added: Under certain circumstances, certain elections may be available to U.S.
+Added: Holders of Class A Ordinary Shares to mitigate some of the adverse tax consequences resulting from PFIC treatment.
+Added: Based on the nature of our activities and the composition of our income and assets, we believe we were a PFIC for the taxable year ended December 31, 2024.
+Added: Additionally, the Company may be a PFIC in the current taxable year or in any subsequent taxable year.
+Added: The determination of whether we are a PFIC is a fact-intensive determination made on an annual basis and the applicable law is subject to varying interpretation.
+Added: In particular, the characterization of our assets as active or passive may depend in part on our current and intended future business plans, which are subject to change.
+Added: In addition, the total value of our assets for PFIC testing purposes may be determined in part by reference to the market price of our Class A Ordinary Shares from time to time, which may fluctuate considerably.
+Added: Under the income test, our status as a PFIC depends on the composition of our income which will depend on the transactions we enter into in the future and our corporate structure.
+Added: The composition of our income and assets is also affected by how, and how quickly, we spend the cash we raise in any offering.
+Added: Accordingly, our U.S.
+Added: counsel expresses no opinion with respect to our PFIC status.
+Added: If the Company were determined to be a PFIC, you may be unable to make certain advantageous elections with respect to your ownership of the Class A Ordinary Shares that could mitigate some of the adverse consequences of the Company’s PFIC status, or making such elections retroactively could have adverse tax consequences to you.
+Added: The Company is not representing to you, and there can be no assurance, that the Company will or will not be treated as a PFIC for any past, current, or future taxable year.
+Added: The Company has not sought and will not seek any rulings from the IRS or any opinion from any tax advisor as to such tax treatment.
+Added: If we determine that we are a PFIC for any taxable year, upon written request by a U.S.
+Added: Holder, we will endeavor to provide or make available to such U.S.
+Added: Holder such information as the IRS may require to enable the U.S.
+Added: Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required information.
+Added: Holders should consult with, and rely solely upon, their tax advisors to determine the application of the PFIC rules to them and any resultant tax consequences.
+Added: For purposes of this discussion, a “U.S.
+Added: Holder” is a holder who, for U.S.
+Added: federal income tax purposes, is a beneficial owner of our Class A Ordinary Shares and is (1) a citizen or individual resident of the United States;
+Added: (2) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state thereof or the District of Columbia;
+Added: (3) an estate, the income of which is subject to U.S.
+Added: federal income taxation regardless of its source;
+Added: or (4) a trust that (a) is subject to the primary supervision of a U.S.
+Added: court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code) or (b) has a valid election in effect to be treated as a United States person for U.S.
+Added: federal income tax purposes.
+Added: If a United States person is treated as owning at least 10% of our Class A Ordinary Shares, such holder may be subject to adverse U.S.
+Added: federal income tax consequences.
+Added: person is treated as owning (directly, indirectly or constructively) at least 10% of the value or voting power of our Class A Ordinary Shares, such U.S.
+Added: person may be treated as a “United States shareholder” with respect to each “controlled foreign corporation” in our group (if any).
+Added: We generally will be classified as a controlled foreign corporation if such United States shareholders own (directly, indirectly or constructively) more than 50% of the value or voting power of our Class A Ordinary Shares.
+Added: Additionally, under certain “downward attribution” rules, because our group includes U.S.
+Added: subsidiaries, our non-U.S.
+Added: subsidiaries could be treated as controlled foreign corporations (regardless of whether we are treated as a controlled foreign corporation).
+Added: A United States shareholder of a controlled foreign corporation may be required to report annually and include in its U.S.
+Added: taxable income its pro rata share of “Subpart F income,” tested income for “global intangible low-taxed income” purposes and investments in U.S.
+Added: property by controlled foreign corporations, regardless of whether we make any distributions.
+Added: Subpart F income generally includes dividends, interest, rents, royalties, gains from the sale of securities and income from certain transactions with related parties, and “global intangible low-taxed income”
+Added: generally consists of net tested income of the controlled foreign corporation, other than Subpart F income and certain other types of income, in excess of certain thresholds, subject to certain adjustments.
+Added: Failure to comply with these reporting obligations may subject you to significant monetary penalties and may prevent the statute of limitations from starting with respect to your U.S.
+Added: federal income tax return for the year for which reporting was due.
+Added: We cannot provide any assurances that we will assist holders in determining whether any of our non-U.S.
+Added: subsidiaries is treated as a controlled foreign corporation or whether such holder is treated as a United States shareholder with respect to any of such controlled foreign corporations.
+Added: Further, we cannot provide any assurances that we will furnish to any United States shareholders information that may be necessary to comply with the aforementioned reporting and tax payment obligations.
+Added: holders of our Class A Ordinary Shares should consult their tax advisors regarding the potential application of these rules to their investment in our Class A Ordinary Shares.
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.